a successful $60-million judgment against the Municipality of North Cowichan over denying zoning for a new expansion at the Vancouver Island Motorsport Circuit would have staggering repercussions in the municipality, according to a staff report. (File photo)

Residents in B.C. city could face 133% tax hike in ‘worst case’ lawsuit outcome: report

An average home could see a tax increase of $2,164 in one year

The tax ramifications for any large judgment against the Municipality of North Cowichan if the Vancouver Island Motorsport Circuit sues and wins its case would be staggering, according to a staff report.

The report, written by CAO Ted Swabey, said the potential liabilities associated with the VIMC claims for damages can’t be ignored, and could have potentially devastating implications for North Cowichan and its taxpayers over the next 10 years and beyond.

The VIMC and municipality have been at odds over the company’s wishes to expand a private motorsport circuit.

Swabey said that if the worst-case scenario were to happen and the municipality were saddled with a $60-million judgment, minus the $20 million that would be covered by insurance, there would be two options for council to choose from.

RELATED STORY: VIMC SAYS NORTH COWICHAN BACKED OUT OF “ASSURANCES”

The first is a one-time tax increase of 133 per cent that would see a tax increase of $2,164 for an average home, and $8,134 for an average business, in North Cowichan for one year.

The second option would be to borrow some or all of the required funding and repay over time.

Swabey said that borrowing over 10 years would result in annual loan payments of $4.6 million each year, which equates to a 15 per cent tax increase each year.

That means that the average home in the municipality would see a tax increase of $250 per year for 10 years, and the average business would see an increase of $930 per year.

“In addition to these tax increases, an additional tax increase of three per cent, at best guess, would be required to pay for our insurance premiums during those 10 years,” Swabey said.

RELATED STORY: NOISE MITIGATION TOP OF MIND AS N. COWICHAN COUNCIL CONSIDERS VIMC EXPANSION PROPOSAL

Swabey said $40 million is the equivalent of building two new RCMP detachments or two aquatic centres.

“Borrowing would make increases slightly more palatable, but would use up a large portion of the district’s borrowing power and cost millions in interest,” he said.

“The opportunity costs of this expenditure would be the tax room used up that could have been used to advance council’s priorities.”

Council decided on Oct. 4, following two marathon nights of public hearing, to deny rezoning at the VIMC property on Highway 18 to allow a major expansion due to community concerns about noise, environmental impacts, and First Nations objections.

But North Cowichan Mayor Al Siebring has announced since then that he is exercising his power to ask council to walk back their decision not to approve the rezoning and have council reconsider its vote, revealing that turning down the rezoning has opened the municipality up to the possible $60 million liability.

RELATED STORY: NORTH COWICHAN WILL HOLD A SECOND PUBLIC HEARING ON VIMC EXPANSION PLANS

That means another public hearing on the rezoning request is scheduled for Dec. 9 at 6 p.m. at the Cowichan Performing Arts Centre.

Swabey said the municipality already has significant budget challenges facing it over the next number of years.

He said that without adjustments to the work expectations, service levels or major increases to North Cowichan’s revenues, the municipality is already facing five per cent tax increases each year for the foreseeable future.

Swabey said those tax increases are related to the costs of the new RCMP building, the loss of forestry revenue from the Municipal Forest Reserve, loss of revenue from land sales, replacing the Crofton fire hall and other expenses.

Swabey said the scale of any potential claim by the VIMC would be known within three years, and North Cowichan can’t build enough of a reserve in that time to significantly address the issue without unprecedented tax increases.

“This notwithstanding, the potential liability requires attention starting in the 2020 budget,” he said.

“To this end, staff recommend an ongoing 0.5 per cent tax be allocated to a reserve for insurance purposes. This will provide approximately $150,000 per year into a reserve account.”



robert.barron@cowichanvalleycitizen.com

Like us on Facebook and follow us on Twitter

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Bill C-283 would establish a National Food Waste Awareness Day. File photo
Anti-Food Waste bill introduced by North Island-Powell River MP

Bill would establish awareness day, ask Minister of Agriculture to work towards ending food waste

This 2013 Dodge Ram 1500 was stolen from Black Creek Motors at approximately 2 a.m. Sunday, April 11. Photos via blackcreekmotors.com
VIDEO: Thieves steal truck from Black Creek car lot by towing it away

Have you seen a 2013 Dodge Ram 1500 in your neighbourhood in… Continue reading

Police pup in training: Nugget. RCMP photo
Police Service Dog Nugget gets golden opportunity to learn with veteran Gator

Newest recruit to train with Campbell River RCMP service dog and handler

Campbell River RCMP. RCMP photo
Man arrested after firearm pointing incident on Campbell River street

Campbell River RCMP have arrested a local man following a firearms pointing… Continue reading

FILE - This Tuesday, Sept. 29, 2015, file photo shows the dashboard of the Tesla Model X car, at the company's headquarters in Fremont, Calif. Newer cars that connect to the internet are capable of collecting vast amounts of data about their drivers. Tesla Motors has used data to reveal, sometimes within hours of a crash, how fast the driver was going and whether or not the company’s semi-autonomous Autopilot system was engaged. (AP Photo/Marcio Jose Sanchez, File)
Test of vehicle’s self drive features results in being mistaken for impaired driving

Campbell River RCMP warn busy roadway no place to check out a vehicle’s new features

Restaurant patrons enjoy the weather on a patio in Vancouver, B.C., Monday, April 5, 2021. The province has restricted indoor dining at all restaurants in B.C. due to a spike in COVID-19 numbers. THE CANADIAN PRESS/Jonathan Hayward
B.C.’s COVID-19 indoor dining, drinking ban extending into May

Restaurant association says patio rules to be clarified

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Two men were seen removing red dresses alongside the Island Highway in Oyster Bay. (Submitted photo)
Two men filmed removing red dresses from trees on highway near Ladysmith

Activists hung the dresses to raise awareness for Vancouver Island’s Murdered/Missing Women & Girls

B.C. Premier John Horgan speaks at the B.C. legislature. (B.C. government)
Tougher COVID-19 restrictions in B.C., including travel, still ‘on the table’: Horgan

John Horgan says travel restrictions will be discussed Wednesday by the provincial cabinet

RCMP on scene yesterday at the altercation at the trailer park. (Submitted photo)
Violent altercation at Port Hardy trailer park sends one to hospital

Police say man confronted another over airsoft shooting, then was attacked with a weapon

John Albert Buchanan was found guilty of manslaughter in the 2017 death of Richard Sitar. Pictured here, Buchanan walking to the court in Nanaimo last year. (Karl Yu/News Bulletin)
Six years including time served for Nanaimo man in bludgeoning death

John Albert Buchanan sentenced in B.C. Supreme Court in Nanaimo for death of Richard Sitar

Protesters occupied a road leading to Fairy Creek Watershed near Port Renfrew. (Submitted photo)
B.C. First Nation says logging activist interference not welcome at Fairy Creek

Vancouver Island’s Pacheedaht concerned about increasing polarization over forestry activities

Flow Academy is not accepting membership applications from anybody who has received a dose of the vaccine, according to a password-protected membership application form. (Submitted image)
B.C. martial arts gym refusing patrons who have been vaccinated, wear masks

Interior Health has already issued a ticket to Flow Academy for non-compliance with public health orders

Guinevere, lovingly referred to by Jackee Sullivan and her family as Gwenny, is in need of a gynecological surgery. The family is raising money to help offset the cost of the procedure. (Jackee Sullivan/Special to Langley Advance Times)
Langley lizard’s owners raise funds for gynecological surgery

The young reptile is scheduled for operation on Tuesday

Most Read