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‘Bonus’ gas tax payments bolster Greater Trail coffers

Gas tax fund funnels a portion of Canadian fuel sales to fund municipal infrastructure projects

News that a $144,000 bonus cheque will be cut for the village this year has come at a perfect time, says Kelli Tuttle, Fruitvale’s chief financial officer.

She was referring to a one-time payout that each B.C. municipality and regional district will soon get from the federal gas tax fund, in addition to their annual gas tax allotments.

“With a newly elected council and new administrative team, the village is using 2019 as a planning year,” Tuttle explained. “Armed with two infrastructure planning reports from prior years, council and staff will spend 2019 taking a close look at the services the village provides, what assets are required to provide those services, the condition and age of the assets, and developing a long-range capital plan from all the information.”

Read more: Kootenay communities benefit from gas tax dollars

Collectively called the Community Works Fund, the money comes from a portion of Canadian diesel and gasoline sales that are pooled annually, then dispensed per-capita to fund municipal infrastructure projects.

For Fruitvale, that means the $144,000 bonus will come along with the village’s yearly apportionment of almost $136,000, though the latter is sent out in two payments, months apart.

“Although there are no specific uses yet defined for the bonus payment, the village’s goal is to maximize access to federal and provincial grants to fund the capital plan,” Tuttle explained. “This is where the bonus payment will have a huge impact … the village has many capital improvement projects to undertake and once a risk prioritized capital plan is in place, council will be better able to make decisions about the best allocation of the bonus payment to leverage the largest amount of funding and ultimately the largest investment into the village’s infrastructure.”

Similarly in Trail, at this point, there are no specific plans for the city’s $394,000 gas tax bonus.

“The city retains unspent gas tax moneys in a gas tax reserve account,” Chief Administrative Officer David Perehudoff explained. “The future use of gas tax money is assessed in the context of the city’s capital plan further to the identification of the highest priority capital projects and how they will be funded,” he said.

“The residual money in the gas tax reserve account will be considered as a future funding source for projects that fall within the eligible project categories, which are all infrastructure- related, such as water and sewer.”

There are no specific projects in the books where gas tax has been identified as the funding source.

“When and how the money is used in the future will be dependent on the ongoing analysis of capital project requirements,” Perehudoff added. “And associated funding sources available.”

From now and until 2024, a big slice of the city’s annual payment, which presently nears $380,000, will go toward paying down Trail’s loan for the walking bridge.

“The city’s budget reflects an annual transfer from federal gas taxes to general revenue in the amount of $250,040 in offset of the annual debt payment for the Columbia River Skywalk,” Perehudoff confirmed. “The use of funding in this way is consistent with the financing plan that was presented to the public as part of receiving assent for the city to proceed with the loan authorization bylaw in order for the project to proceed.”

At the start of 2019, debt outstanding on the Skywalk was $4.65 million. The loan is on course to be paid off in 25 years.

Other gas tax bonuses include $100,000 to Montrose, $130,000 for Warfield, Rossland for $212,000 and $488,000 to the Regional District of Kootenay Boundary.

The Administrative Agreement on the Federal Gas Tax Fund in British Columbia (Agreement) took effect on April 1, 2014. The tripartite Agreement between Canada-British Columbia-UBCM (Union of B.C. Municipalities) replaced the 2005-2014 Agreement and provides the administrative framework for the delivery of federal Gas Tax funding to local governments and other recipients in British Columbia over ten years (2014-2024).

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