In an unprecedented move, city council voted to change the tax rates it approved last week - with only four days to make the changes under provincial legislation.
On May 2, city council approved the first three readings of the tax rate bylaw. On Monday, council was anticipated to approve the fourth and final reading of the bylaw -a procedure which is normally just a formality required by legislation. However outcry from local light industrial property owners, which would have seen their tax rate increase 25.8 per cent over last year, prompted council to defeat the bylaw.
"There is a reason why there is a waiting period between third reading and final reading. It's a last chance for sober second thought," coun. Shari Green said. "I don't take it lightly that I am changing my mind at this late stage. This... tax option has been a struggle for me. I really felt it was our last-resort choice."
The tax rate for light industrial properties was slated to rise from $26.61715 per $1,000 of assessed value to $33.485 per $1,000.
A city report examining 67 light industrial properties in the city showed an average tax increase of 37.69 per cent, due to rising property values.
In a letter to city council, Lomak president David Livingstone called the tax rate "exorbitant."
"For Lomak, that represents an increase of $23,205 or 45 per cent over 2010," Livingstone wrote. "An increase of this size at any time would be intolerable, but given what our industry has been through the past several years it is just unconscionable. We had no advance warning of such an increase and were not consulted at all as to what the effects of such an increase would be."
Rick Bandstra, owner of Bandstra Transportation Systems, said the company has seen its property taxes rise between 45 and 85 per cent on its facilities in the BCR Industrial Site since 2005.
"Now were are potentially facing an additional 24 per cent rate increase in 2011," Bandstra wrote. "We believe the proposed increases are ill-considered and threaten the continued viability of operating and business in Prince George. Most small and medium-sized businesses have struggled financially during the recent economic down turn and are in no position to absorb such hefty tax increases at this time."
Similar letters were sent to council by nine other light industrial companies.
"We have received in the last week a major push back from the light industrial sector," coun. Debora Munoz said. "For some it represents a 125 per cent tax increase since 2008. It's too hard a hit for the small businesses."
New tax rate a blend of previous options
Council deliberated until after 1:30 a.m. before coming to a unanimous decision on an adjusted tax rate.
Under the new tax rate plan, the residential tax rate would stay the same at $7.6304 per $1,000 assessed value - about an $85 increase for the average single-family home. Farm, supportive housing and season property tax rates would also remain the same as previously approved.
However the light industrial rate would be lowered to $27.357 per $1,000 value -a 2.78 per cent rate increase. After rising property values were factored in, the result was an average 12.5 per cent dollar increase for the 67 sample properties examined.
The business, utility and major industrial property classes will all see their taxes rise higher than previously anticipated.
Business properties will see their rates go from $15.84373 per $1,000 in 2010 to $16.28435 per $1,000 -up from the $15.91679 previously approved.
The utility class will rise from $0 per $1,000 to $40.71087 per $1,000 and major industry will rise to an unspecified amount.
The basis for the new rates was Option G in the tax rate report considered by council on May 2. Because the rates approved by council will generate more revenue from the residential category than previously allotted in Option G, the major industrial rate will be dropped from the original $49.16566 per $1,000 called for in the option to something less than that.
The rates discussed by council are only the city's portion of the total property tax levy. City taxes represent approximately 63 per cent of the total property tax bill - the remainder includes school taxes, regional district taxes, hospital district taxes and other taxes.
Special meetings called to approve new rate
City council will hold two special meetings - on Wednesday at 7 p.m. and Friday at noon - in order to pass the new tax rate bylaw before the legislated deadline of May 14.
The majority of city councillors and the mayor will be Prince Rupert attending the North-Central Local Government Association annual general meeting May 11-13.
Councillors Shari Green and Brian Skakun will be in Prince George to attend the meetings, while the rest participate by phone.
Mayor Dan Rogers said council now has no choice but to approve the modified tax rates set out Monday night. There is simply not time to change or modify the tax rates again before the deadline.
Rogers said the last-minute change in direction is, "unprecedented in my involvement in local government."
"If you're going to lessen the burden on light industrial, where are you going to put it?" Rogers told council early Tuesday morning. "If you shift it from one class, you'll get phone calls and e-mails from the other class -welcome to local government."
Councilors Green, Munoz, Cameron Stolz and Garth Frizzell voted in favour of making the change, while Rogers, Skakun, coun. Dave Wilbur and coun. Don Bassermann voted against it - a tie resulted the bylaw being defeated. Coun. Murry Krause, the chairperson of the finance and audit committee which recommended the previous tax rate, was absent from the meeting.
