Photo: RDCK board chair Gary Wright
The Aug. 1 deadline for the City of Castlegar to pay the Regional District of Central Kootenay (RDCK) $375,000 for its 2009 tax requisition has come and gone, and the two entities now have to determine next steps in dealing with the contentious issue.
City representatives argue that the amount is only collected by the city on behalf of the RDCK, and that the RDCK's issue is with the delinquent rate-payer – in this case, the Celgar pulp mill, which declined to pay its $3.6-million municipal tax bill.
Conversely, RDCK representatives contend the amount is owed by the city for shared services (primarily recreation) that are administered by the RDCK, and unpaid invoices are the city's problem alone.
Area J director for the RDCK Gord Zaitsoff told local media last week that if the outstanding $375,000 was not paid by the Aug.-1 deadline, he would advise that the regional district enter into discussions with Celgar parent company Mercer International and the provincial government to have Celgar moved into the RDCK tax jurisdiction.
Gary Wright, RDCK board chair, said the regional district has not, at this point, entertained Zaitsoff's idea nor yet entered into talks with any party to put the plan in motion.
“The board is looking at its options at this point,” he said. “We've got an open meeting of the General Affairs Committee this Thursday in Nelson – I would imagine this issue will come up. Our next board meeting is Aug. 20, and we'll certainly discuss it further then.”
Wright did say, though, that the law is clear as it pertains to Castlegar's responsibility to remit the $375,000, regardless the status of Celgar's tax account.
“Every municipality ends up with delinquent accounts every year – the only difference, for Castlegar this year, is the extent of the delinquency,” he said. “Castlegar has received, for seven months, the benefits of the programs they voluntarily entered into. They voted for that budget. It's incumbent on (them) now to honour those commitments.”
He pointed out that the RDCK, unlike the city, is not eligible for interest payments or penalties and has no power to tax – these extra benefits are offsetting factors that are part of why municipalities are expected to borrow to cover delinquent accounts, even when they impact other, less powerful, jurisdictions like school, hospital and regional districts.
“The options left for the district ... are limited,” he said, adding their only real recourse is to appeal to the province. “If the payment is not made, we'll look at having to adjust or recover those costs somehow through the services Castlegar receives.
“But I'm really hopeful this will all get straightened out and the funds will be forthcoming before the end of the year.”
As far as the argument that Castlegar has over-taxed Celgar and thus the mill should be moved under RDCK jurisdiction, Wright said he's not willing to get into that discussion at this time.
“The district is very careful to make no comment on how any municipality sets up its tax regime – that's their business – but we also have every right to expect them to honour their legal commitments to pay for programs for which they voted.
“Having said that, we have every sympathy for communities that don't receive their full taxes from their rate-payers.”
Meanwhile, other RDCK directors have weighed in on the issue – Area K director Paul Peterson said he'd like to see Celgar within RDCK boundaries, as he feels the mill has been over-taxed by the city for years.
Area H director Walter Popoff said the jurisdictional issue has not been brought before the board, and until it has, with information presented and a discussion held, it's premature to speculate on the idea.
“My take on it is, as a responsible corporate citizen, Celgar should come up with the money and pay the dues,” he said, adding he's hopeful calmer heads will prevail in future discourse, despite the sometimes-angry rhetoric being reported through the media in recent weeks. “I hope this does not cause a rift in the relationship between the RDCK and the City of Castlegar. We just have to get our heads together and see what we can do to make this work without causing hardship for the region or the city.”
Area I director John Voykin said he'd prefer not to comment on the issue.
“Certainly, if the taxes are not coming in, we're all going to be impacted. I would prefer to see how we can work, not through the newspaper, but through the proper channels,” he said.
“I'd rather be cautious and perhaps not make any comment at this time, and hopefully down the road resolve this, to the benefit of everyone involved.”