Taxing by property assessment saves the homeowner money in the long run, says the City of Trail.
Now that the new sewer line deal is in place, the city expects the regional requisition to increase by about $275,000 next year.
That means, all Trail property owners are subject to a tax increase related to the regional debt payment, whether they are actually using the sewer system or not.
“It's a regional service that is being paid for through a regional loan authorization,” explains Trail Mayor Mike Martin. “So the approach is that all (taxpayers) whether they are currently hooked up or not, will contribute for the service.”
Martin lives in Tadanac, clarifying that homes in that neighbourhood are on septic, but all are subject to the tax increase of $31.50 based on the average houses assessed at $183,000.
“It is there for the benefit of the region,” he added. “And there may well come a point when septic tanks are no longer acceptable and the city would have to put that infrastructure in to deal with it. So this is a regional benefit that (someday) everyone may be hooked into.”
Based on property tax assessment, all tax classes including major industry, such as Teck Trail Operations, and small business, will see an increase in their 2016 property tax bill related to the new utility line.
“In the context of the regional service, and the City of Trail's participation, costs are attributed to each rate class and collected accordingly,” clarified David Perehudoff, Trail's chief administrative officer.
“Debt servicing costs, including both annual principal and interest payments, are an operating cost and recovered through the property tax system.”
The City of Trail has always recovered the regional requisition through the establishment of property tax rates based on ratios prescribed by the Province of B.C., he added.
“If regional costs were recovered through some other system (such as user rates or parcel taxes) the cost to the residential user would increase significantly.”
Further, specific costs for services that are included in the property tax levy, whether it be as part of the municipal or regional property tax levy and corresponding property tax rates, is not tied to individual use.
“Some municipal costs however may be partially or completely offset by user fees or other revenues but the bridge cost recovery is done entirely through property taxes as part of distributing costs through to the entire assessment base,” Perehudoff said.
“In other words, there will not be user toll fee or other levy to recover the costs.”
Trail's regional service partners in Rossland and Warfield chose to introduce a flat tax rate to all their property tax owners rather than base payment on assessments.
“This increase to our taxpayers is significant because Rossland does not have any industrial taxpayers to help soften the blow for our residential taxpayers,” says Rossland Mayor Kathy Moore.
“The only businesses we have in town are independently owned, small enterprises.”
She reiterated the city worked hard to collaborate with its partners to come to an agreement, because holding off until next year introduced risks, such as increased costs.
“I regret that we did not have enough time to do a thorough analysis of all the options,” Moore added.
“And explore other approaches that might have been better.”
Warfield property owners will see an estimated $47 increase, though the sewer bill will be included as a separate line on the June property tax form, confirmed Corporate Officer Jackie Patridge.
“We have a few businesses, no industry, and all property owners will receive the fee,” she added, noting all Warfield properties are tied to the sewer utility. “We should be able to calculate the actual amount sometime before the property tax forms are issued.”