CITY OF PORT ALBERNI

SUMMARY OF TAX RATES FORUM

MONDAY, FEBRUARY 21, 2005 AT 7:00 PM

AT DOGWOOD ROOM, ECHO CENTRE

Present: Mayor McRae, Councillors Chopra, Lord, Mealey, Patterson, Price and Solda.

Panel Guests:

David Bird, Norske, Vice President Operations, Port Alberni

Ron Corbett, Weyerhaeuser

Ainsley Foster, representing Barclay Capital Inc.

Bob Cole, President Alberni Valley Chamber of Commerce and Port Boat House

Dusty Miller, Residential Tax Payer

Ann Grabowski, Residential Tax Payer

There were approximately 38 members of the public in attendance (excluding City staff).

Mayor McRae made opening remarks and thanked the panel guests for participating in the forum.

Ken Watson, Acting City Manager provided a brief overview of the previous Five Year Financial Plan meetings where Departmental budgets were reviewed in detail. He explained the purpose of the forum and outlined the highlights of the Five Year Financial Plan and of the Tax Rate Forum Background Information Package.

Theresa Kingston, Manager of Human Resources and Community Development acted as facilitator for the forum. She explained the forum process. Six panel members representing industry, business and residents would each provide a five minute commentary of City taxes. This would be followed by a moderated discussion where eleven questions developed by City Council would be posed to members of the public. The meeting was being broadcast live by Shaw Cable and those at home were welcome to submit their own response to the questions.

David Bird, Norske Canada, Vice President Operations - Port Alberni, stated that the paper mill pays 7.4 million in total property tax, with the majority going to the City. Though their property assessment is down, the taxes paid by the paper mill have remained the same. The paper mill pays more tax now than when the kraft mill was running. He spoke about the companies expenses and profit margins. Their total costs of production are equivalent to $18 per ton and will increase to $23 per ton, where competitors are paying $6 - $8 per ton. Taxes are one expense that needs to be reduced to improve their competitiveness. Industry in Port Alberni is 11% of assessed value and pays 43% of the total tax collected. Norske contributes $94 million into the community via wages, donations, purchases and taxes. The market is very competitive and major capital is needed at the mill.

Ron Corbett, Weyerhaeuser, stated that of the 155 BC municipalities, 64 have some type of major industry. He indicated that he would refer to tax rates by percentage rather than mill rates as they are more easily understood. Tax rates for these industries range from 0.45% to 9.6%. Port Alberni's rate is 7.8% which is the second highest in the province. The average is 4%. Weyerhaeuser pays 20% of the City's major industrial tax share. Both the Somass and APD Mills were reassessed and have recently paid approximately $200,000 in supplementary property tax. The City’s 0.5% tax shift from industry should be increased, a chart of possible shift levels was distributed by Mr. Corbett and is attached to this summary. He stated that Council should set a target and time frame to get the tax rate reduced to the 4% average for the province.

Ainsley Foster, Barclay Capital Inc. stated that property values in Port Alberni have increased due to new businesses in the community. The City’s mill rates deter new business because they are higher than average for the province. She advised that in 2002 Redford Centre building costs were $63 per square foot. Today the building costs are $86 per square foot. Lease rates are the same and the increased cost is to the developer. She stated that Port Alberni does not apply Development Cost Charges and encouraged Council to investigate implementation of this process for revenue generation in order to decrease the commercial tax burden. Generally tenants who lease commercial properties want a cap on lease rates and expect to pay Development Cost Charges.

Bob Cole, President, Alberni Chamber of Commerce and President, Port Boat House spoke of the recent growth in the community. He indicated that Council, through its budget process, has attempted to reduce the tax burden on industry and business and has achieved marginal success. He indicated that the Community Charter gives Council more opportunity to raise revenues and he suggested a local "employment tax" collected at source. This would be a means of collecting revenues from employees that live outside the City. He indicated that industry has a cost on the community, for instance industrial traffic is damaging to City streets. He indicated that industry is beneficial to the community and we need to work together for a solution to the industrial tax rates. Mr. Cole encouraged the community to be involved and provide their advice to Council.

Dusty Miller, 2898 7^th Avenue stated that he reviewed the financial plan documents. The Financial Plan Summary indicated that Core Services are to remain the same. He feels that services should be increased to attract new business and residents. He questioned how the library revenue is neutral and asked how $100,000 allocated for Economic Development is to be spent. He stated that the City staffing levels do not show casual staff. He suggested that tidy properties should be given a tax break, whereas messy properties be penalized. He stated that North Island College should pay tax on their Tebo Street campus. City owned property should be sold and unlicensed dogs should be licensed for increased revenue. He questioned why water rates are increasing 2% per year. He found the Draft Financial Plan Working Paper to be a confusing document and suggests more explanation and details in the document. He feels that all City vehicles should be sold. He proposes that a traffic light at 10^th Avenue and China Creek Road would be much more costly than a 4 way stop. He asked if the cost for the McLean Mill water upgrade is included in the City’s $400,000 contribution, or is it over and above this cost. Finally he asked why pay interest to borrow money when there is money in reserve.

Ann Grabowski commented that it is important to recognize that there is a cost for the City’s service levels. Citizens need to provide more input to Council and the Outlook 20/20 group has some good ideas for Council to consider. Social justice issues should be considered and Council should be aware of the poverty, low income families and violence in the community. She agrees with the McLean Mill expenditures if there is a solid plan in place to reduce these by 50% over time. She recommends that the City provide funding for Outlook 20/20 to help form a vision for the City. The City should focus on some environmental issues such as a blue box program and look to other communities for ideas. She supports the new RCMP building. She asked for assurance that recyclables do not go to the land fill.

Theresa Kingston led the audience through a series of questions developed by Council which are attached to this summary. A number of questions were considered as a show of hands for the benefit of Council without a count being recorded. The comments received by the public are summarized as follows:

Bob Kraneveldt, 3951 Glenside stated that the City’s roads were in poor condition and that the financial reserves of the City were too high. He proposed increased spending on road maintenance.

Fred Boyko, 2616 9^th Avenue stated that City streets are getting narrower while the boulevards are getting wider which are more costly to maintain. He does not like that the snow plows pile snow in the middle of the roads. He suggested that the Museum staff take pictures of the City on an ongoing basis to document changes.

David Whitworth, 5213 Mar Street stated that he was very pleased with the timely removal of snow on City streets.

Dusty Miller thinks that the City should provide removal of snow on sidewalks.

Arthur Shambrook, 4082 Craig wanted to know why the City is cutting down ornamental trees and thinks this is ridiculous. He stated streets are plowed when there is only a couple of inches of snow, which is more than necessary. He proposed that the City could generate increased revenue by enforcing the licensing of dogs.

Sue Frazer, stated that the trees cut down at the entrance to the City is unsightly and feels that fees charged for camping keep people away. She encouraged Council to promote tourism in the valley.

Jack Thornburgh, 4217 8^th Avenue encouraged Council to consider creative housing initiatives such as co-op housing and suggested that the Log Train Trail be more publicized as it is used for a variety of purposes. Mr. Thornburgh complimented the City for the garden at 10^th Avenue and Roger Street.

David Whitworth suggested that Council look at the budget the way a citizen would. The presentation of the budget is confusing. Council should identify the issues important to the community and show how the financial plan will affect these matters. He suggested that Council look to Outlook 20/20 for ideas.

Bob Cole stated that a tax shift will not help the community grow.

Paul Elder, Fowlie Crescent said that he had recently returned to live in Port Alberni after a 30 year absence. He stated that he had been the Mayor of Swift Current, Saskatchewan where business and development was encouraged and promoted. He said the tax system is backwards and is concerned that the tax rate for business is too high. The present Council did not create this problem and he commends Council for the open forum. He said the City needs more business to increase the tax base and suggested exploring the possibility of giving away land or a tax break for 5 years to encourage new businesses.

Dusty Miller suggested that the industrial tax rate be reduced but not shifted to residential taxes and that Council should have other ideas for replacing lost revenue.

Ann Grabowski suggested that some services should be user pay but not services for youth. Council needs to be aware of the impact changes to taxation and services may have on the poor.

Bob Cole suggested that the equipment replacement polices be looked at to consider extending equipment life on an as needed basis.

Dusty Miller suggested that equipment be rented or leased instead of purchased.

Nigel Parker, 3722 Argyle Way wanted to know why there were 5 street lamps at North Island College on a gravel parking lot and most streets have insufficient street lighting. He stated that property owners should be responsible for keeping streets around their properties tidy and that most streets are disgusting.

Art Shambrook said that the City should enforce snow removal from sidewalks.

David Whitworth questioned that the City’s service levels are very prompt and may be too expensive. This maybe an area for cost reduction.

Shandy Nadudvary, 3883 10^th Avenue asked if there is a Casino opening in Port Alberni that would generate tax dollars for the City.

Bob Cole stated the reserve funds should be reduced and questioned the necessity and costs of a fire boat.

Art Shambrook said the reserve funds should be used to pay debts that are costing the City interest charges.

Brooke George asked if the AV Multiplex parcel tax could be eliminated through an early repayment of the loan.

Bob Cole suggested that if the City were to reduce industrial taxes there needs to be a partnership whereby industry returns access to the waterfront for the public.

Corey Prentice suggested that the City advertise that Port Alberni is open for business and that residents should work with business and industry.

This ended the public forum. The meeting ended with Council providing comment:

Councillor Patterson stated that he was impressed with the number of people that were in attendance and agrees with Ann Grabowski's suggestion for Council to focus on quality of life in the community.

Councillor Lord stated that she appreciates that the public provided input and that she agrees that the Financial Plan is difficult to understand and should be more readable.

Councillor Mealey said that he heard some good ideas and that this was the best budget meeting he had attended.

Councillor Price indicated that it is difficult to do business in a "one company town" and that changes won't happen quickly and that industry and the City must work together.

Council Solda indicated that there was not much response to the questions and encouraged the public to complete and submit the questionnaires.

Councillor Chopra stated that it costs 17 million dollars to operate the City and appreciated the input from the public.

Mayor McRae stated that Port Alberni is the first community to partner with First Nations in a hydro-project and hopes that a new paper machine will start.

Theresa Kingston closed the meeting at 9:04 pm and reminded people to complete and submit the questionnaires.