Council ponders options to cover spending

“Council has agreed to increase the general capital levy to $2.335 million being spent directly on capital projects.” ~ David Perehudoff

One way to level the playing field for all Trail homeowners is to increase, maybe double, the current $130 flat tax rate.

But that’s only one option on a list of property tax allotments Trail council is considering to cover a swell in capital spending this year.

“Council has agreed to increase the general capital levy to $2.335 million being spent directly on capital projects,” explained David Perehudoff, Trail’s chief administrative officer (CAO). “This is increased by $239,500 over and above the provisional budget that was originally reviewed.”

Trail council is considering a number of additional projects and initially approved a further $100,000 for the LED streetlight project, he added.

“Further allocation of the remainder of this money is subject to review and may include funding for such things as improvements to the front of the TMC (Trail Memorial Centre) depending on the final project scope and cost.”

Those initiatives combined with big ticket items already underway, like the new museum library, has council leaving no stone unturned before ultimately deciding how to pay for it all.

The group reviewed a number of possibilities during the Monday governance meeting, such as increasing the flat tax or changing rates to individual tax classes.

After a robust back-and-forth, council agreed to defer pending further study of implications to the business, residential and major industry classes.

Further muddying the water is the current disparity in Trail residential assessments, the impetus behind council’s study of property tax apportionment practises.

Depending upon the neighbourhood, Trail homes dropped up to 15 per cent in assessment value and others increased up to 10 per cent. That major shift prompted Trail Mayor Mike Martin to request the study and look at mitigating property tax imbalances but at the same time, recognize the city’s common services.

One way to do that, which council has not made a decision on, is to increase residential tax levies through a higher flat tax.

“We can make that shift,” Perehudoff explained. “(And) basically spread the tax load throughout the residential class as opposed to seeing these peaks and valleys (home assessment values), so it has a smoothing impact.”

The reason flat tax was implemented a number of years ago, was to pay for the new water treatment plant, replied Coun. Sandy Santori.

“The whole purpose was you could clearly define that every resident was getting an equal service for that $130,” Santori explained. “We just kept it there (after the water treatment plant was paid), and that $130 ended up funding our debt on the Aquatic Centre.”

Coun. Robert Cacchioni questioned the affordability of a higher flat tax for those already struggling to make ends meet in homes assessed at lower values.

Instead, Cacchioni asked his peers to consider upping the major industry apportionment by two per cent, from 61.33 to the previous 63.34 per cent.

Martin concluded the discussion by acknowledging the complexity of apportioning property taxes, especially taking into account the 4.5 per cent “across the board” reduction in residential values.

“There’s been no other time in our recently history that indicates we’ve had a change in assessment of that magnitude,” he said. “And it set all sorts of alarm bells off for me.”

He requested the CAO bring back historical information of major industry taxation.

“We need to clearly understand where we come from with regard to past practise and decisions previous councils have made,” added Martin. “Another thing, we have been working really hard to improve the city and we are making huge capital investments to do that.

“That is for the benefit of all residents and businesses and I think we have to keep that in mind.”