Trail and Warfield have officially put further amalgamation study action to bed after shelving discussions last year.
The city was waiting to hear from the village after Warfield put Phase 2 of the merger report on hold due to the uncertainty of industrial taxation.
“The industrial taxation was a big issue but it wasn’t completely the whole issue,” said Warfield councillor Donna Baggio, acting as mayor. “We looked at figures of taxation for Warfield and Trail, which seemed to be equal in some points and in others slightly higher for Trail at the moment.”
Phase 1 of the study administered by Urban Systems highlighted three amalgamation scenarios - business as usual, increased efficiencies and enhanced services - and ultimately concluded that taxes would fluctuate between a $42 decrease to a $12 increase per year for a $200,000 home. The study projected under the “business as usual” scenario that property taxes for business owners in Warfield would increase by about $370 per $100,000 in assessed value, which would gradually be phased in.
The second part of the study would have looked more critically at the potential new organization, as far as the number of employees and the types of services available through city hall.
A survey of residents given last summer clearly favoured the continuation of the study that explored what the two communities would look like as one. All Trail respondents and 62 per cent of Warfielders, who participated in a public survey following an amalgamation meeting, supported proceeding with the second half of the study.
But that wasn’t the word on the street, said Baggio, who said the village created a special amalgamation committee which included three residents – Nuala Bain, Thorpe Watson and Gordon Titsworth – to explore whether to proceed.
The move wasn’t seen as attractive after taking a look at some of the issues Trail is dealing with, she said, which include the possibility of footing a bill for a new bridge and potential debt owing to Teck (the company has appealed to the B.C. Assessment Authority for a tax reduction from 2009 and onward that could result in the city paying some $4.8 million plus interest).
Baggio also pointed to Warfield’s small community grant last year of $235,858 and a new Safe Community Innovation Fund (SCIF) grant of $339,382 expected this year, too.
“Until our small community grants are affected, we’re quite sustainable,” she said. “I think there will be a future decision made – I don’t know whether it will be three years, four years, five years down the road or even sooner than that – but I really believe it will be when the provincial government starts clawing back and people financially cannot stay independent.”
Trail Mayor Dieter Bogs was surprised by the village’s decision, when a letter was presented at Monday’s city council meeting.
“It’s really amazing and it’s really sad in many ways when people feel that small community grants are a sure thing from the government and industrial taxation may not be a sure thing forever,” he said. “Taxation is a question mark and it’s very unfortunate to see that the economy be, from my perspective, secondary to cheques from the government.”
City administrator David Perehudoff was also baffled by the village’s position, noting amalgamation would have resulted in a diversified tax base for the village, which is currently 98 per cent residential.
Warfield approached Trail in 2010 to undertake the first phase ($34,000) of the study. Based on population, Trail paid about $28,000 and Warfield picked up the remainder of the bill.
After completing a study of its own, the Beaver Valley – Fruitvale, Montrose and Area A – recently announced no plans of merging the communities due to a substantial tax hike foreseen for Area A residents. Area A director Ali Grieve said she is not opposed to taking a look at the larger scope, a Greater Trail merger, a position that Warfield also shares.
“We thought that this would be a start of the formation of the district municipality in the future,” said Baggio.