Kitimat taxes to rise by 20 per cent: council

Marcel Vander Wier - Kitimat Northern Sentinel Published: February 27, 2010 5:00 PM

After three straight days of cost-cutting and budget deliberations, Kitimat municipal council voted to raise taxes by 19.99 per cent in 2010. District manager Trafford Hall recommended the instant budget-balancing tax hike, calling it "a simple, elegant way" to deal with the community's fiscal situation following the February closure of the Eurocan pulp and paper mill. In a 4-2 vote, council made the ruling today, which will see the average homeowner pay an additional $186 in taxes. For major industry, Rio Tinto Alcan's annual taxes will rise by $1.8-million, while Eurocan will need to cough up an additional $1.03-M on top of last year's rates. Mayor Joanne Monaghan and councillors Bob Corless, Randy Halyk and Richard McLaren voted in favour of the increase. Councillors Mario Feldhoff and Rob Goffinet voted against, preferring the tax hike to be fazed in over two years at lesser percentages. Councillor Gerd Gottschling did not attend the budget meetings.

Hall advised council that a 20 per cent tax increase would allow Kitimat to build up its reserves this year, before West Fraser's current annual $4.7-M contribution drops to $600,000 in 2011. By raising taxes now, council is "biting the bullet" to raise additional funds to stock the district's reserves for bona-fide future projects, Hall explained. Halyk said the major portion of the population is expecting a tax increase, adding that the instant hike will allow the municipality to share the tax burden with the outgoing Eurocan mill. "It's not going to be a surprise," added councillor Richard McLaren, who also noted 2011 is an election year. "Twenty per cent is going to be hard on all of us, but we have to do something to make this thing balance out," Halyk said of the budget, before requesting that administration work the tax figures to 19.99 per cent.

In total, council cut $838,800 from the municipality's operations budget of nearly $20-million, before agreeing to raise taxes. "This is very, very good work," said Hall of council's budget decisions. Councillors will have an opportunity for some "sober second thought" before signing the budget into law at the March 15 council meeting.For a complete analysis of budget talks, see the March 3 edition of the Northern Sentinel.