Barkley Road Water Extension
Information Page
Stephen Banmen February 10 report to Council.
District of Lake Country
Report from the Director of Finance
______________________________________________________________________________________________________
To: Mayor and Council
Date Presented: February 10, 2004
Subject: Barkley Road Specified Area Parcel Tax
______________________________________________________________________________________________________
Issue
Whether to adopt a bylaw to establish a parcel tax for the purpose of financing the pre-design of the Barkley Road Specified Area Water System.
Recommendation
That Council gives first, second and third readings to District of Lake Country Barkley Road Water System Parcel Tax Bylaw 479, 2004.
Background
In May 2002, the District received a sufficient petition from residents of Barkley Road asking that the District establish a specified area to finance the construction of a water system to a maximum of $662,400. To finance the capital works, the estimated parcel tax was $2,010 per property per year for 20 years.
On April 15, 2003, Council adopted the Barkley Road Specified Area Bylaw 453. In addition to establishing the specified area, the bylaw established that costs associated with this project be borne by the benefiting properties by way of a parcel tax and/or other fees or charges on the properties within the specified area.
On September 16, 2003 Council received a presentation from staff and Associated Engineering regarding preliminary design of the Barkley Road Water System. Council adopted the following resolution:
“That the District not proceed with the Barkley Road Water System, as the costs at this time are prohibitive, and further
That the report be provided to the petitioners to determine if they want to pursue the recommended Option C, and whether the residents wish to re-petition for two-thirds support, and further
That the existing petition remains valid for one year.”
On October 21, 2003 a public meeting with residents was held to discuss the pre-design report, the estimated cost of $1.1 million, and the possibility of a water servicing plan for Carr’s Landing.
The final cost of the pre-design was $16,634.69. There are 29 parcels in the specified area. Thus, the cost per parcel is $573.61. Each property owner has the option to commute the $573.61 charge or make payments over 3 years. The annual charge will be $206.70, if the charge is not commuted by May 14, 2004. The date was set as late as possible for the benefit of the property owners, while respecting the process of finalizing the 2004 tax notices.
The repayment period of 3 years is being recommended to allow the District to recoup its project financing as soon as possible and to minimize administration costs. However, consideration was also given to spread the repayment over a long enough term so that an excessive annual charge to the property owners was avoided. Residents were not polled on a preferred repayment schedule.
A repayment period of 2 years would result in an annual charge of $304.13.
Pursuant to the Community Charter property owners will be given an opportunity to appeal their inclusion on the parcel tax roll at the sitting of the Parcel Tax Review Panel.
The existing policy regarding interest rates charged on these types of projects (attached) is not completely applicable, since the Municipal Finance Authority does not lend funds on a fixed basis for amortizations less than 5 years. However, the intent and spirit of the policy is to provide internal financing at a rate that would be a benefit to both the residents and to the District. As such a rate of 4.0% was set and is built into the 3-year repayment schedule.
Respectfully submitted,
_______________________
Stephen Banmen
Director of Finance
