Castlegar city council has decided to move forward with phasing the new infrastructure investment levy in over seven years instead of the five years included in initial budget proposals.
The infrastructure investment levy is the city’s new asset renewal plan to fund the replacement of roads, facilities, parks and fleets.
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The 2019 budget and five-year financial plan still must proceed through several more steps before it is final.
The decision was split with councillors Florio Vassilikakis, Sue Heaton-Sherstobitoff, Dan Rye and Bergen Price voting in favour of the motion.
Mayor Bruno Tassone and councillor Cherryl MacLeod voted against it.
Councillor Maria McFaddin was not at the meeting.
MacLeod began the pre-vote conversation by stating she was still in favour of the five-year phase-in.
The councillors who voted in favour of extending the phase-in process said they had heard from a number of local residents and business owners who were not in favour of the five-year phase-in and the cumulative tax increases to fund it.
“Talking with residents … and speaking with different business people, they are not in disagreement with what we are trying to do, they just think five years is way too fast,” said Rye.
Heaton-Sherstobitoff argued she couldn’t support the five-year plan because the tax increase by the end of the five years would be 31.74 per cent for residential and 34.84 per cent for commercial.
“This does nothing for commercial or our businesses, they have written a letter through the Chamber of Commerce, not supporting the five-year levy,” she said. “These people are the bread and butter of our community.”
Vassilakakis added: “I think the five years — to take $3.5 million out of the pockets of taxpayers so our reserve balance can look shiny — I’m not sure that I can accept that.”
Price was originally in favour of the five-year phase-in when it was introduced. But after talking to residents, he decided to change his mind and opt for seven years instead.
“The politician that I’d like to be would be listening to community,” said Price. “Five years just seems like too much, too soon. The community is not ready for it. The community has spoken loud and clear.”
Mayor Tassone lobbied for a six-year plan.
“Hearing what people are saying, maybe the five year plan is being a little bit shortsighted,” he acknowledged. “I think six years is a compromise for council that leaves us with a very healthy reserve fund.”
Increase to major industry’s tax share
The other budget decision council made was to move forward with phasing in an increase to the overall portion of the tax burden that major industry carries over the next seven years.
Major industry is currently paying about 28.6 per cent of the city’s total tax revenue. Council has decided to set the total taxation for the major industry class at 30 per cent. The amount has varied through the years up to as high as 42 per cent.
CAO Chris Barlow explained that setting a specific tax level will give both the city and industry certainty and clarity around taxation.
“We have heard through council that it is appropriate to look at their total taxation … as we move forward with the infrastructure investment levy that they are paying their portion of infrastructure replacement,” said Barlow.
The increase to major industry will result in a decrease to other classes, with the benefits split between residential and commercial taxpayers.
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