North Cowichan taxpayers face 133% ‘worst case’ hike from a Vancouver Island Motorsports Circuit lawsuit

An average North Cowichan home could see a tax increase of $2,164 in one year

The tax ramifications for any large judgment against the Municipality of North Cowichan if the Vancouver Island Motorsport Circuit sues and wins its case would be staggering, according to a staff report.

VIMC says North Cowichan made “assurances” that led it to proceed with the development of its automobile track which opened near Duncan in 2016. That development included a planned expansion that North Cowichan eventually rejected earlier this year, leading to suggestions of a possible lawsuit.

RELATED STORY: VIMC SAYS NORTH COWICHAN BACKED OUT OF “ASSURANCES”

The report, written by CAO Ted Swabey, said the potential liabilities associated with the VIMC claims for damages can’t be ignored, and could have potentially devastating implications for North Cowichan and its taxpayers over the next 10 years and beyond.

Swabey said that if the worst-case scenario were to happen and the municipality were saddled with a $60-million judgment, minus the $20 million that would be covered by insurance, there would be two options for council to choose from.

The first is a one-time tax increase of 133 per cent that would see a tax increase of $2,164 for an average home, and $8,134 for an average business, in North Cowichan for one year.

The second option would be to borrow some or all of the required funding and repay over time.

Swabey said that borrowing over 10 years would result in annual loan payments of $4.6 million each year, which equates to a 15 per cent tax increase each year.

That means that the average home in the municipality would see a tax increase of $250 per year for 10 years, and the average business would see an increase of $930 per year.

“In addition to these tax increases, an additional tax increase of three per cent, at best guess, would be required to pay for our insurance premiums during those 10 years,” Swabey said.

RELATED STORY: NOISE MITIGATION TOP OF MIND AS N. COWICHAN COUNCIL CONSIDERS VIMC EXPANSION PROPOSAL

Swabey said $40 million is the equivalent of building two new RCMP detachments or two aquatic centres.

“Borrowing would make increases slightly more palatable, but would use up a large portion of the district’s borrowing power and cost millions in interest,” he said.

“The opportunity costs of this expenditure would be the tax room used up that could have been used to advance council’s priorities.”

Council decided on Oct. 4, following two marathon nights of public hearing, to deny rezoning at the VIMC property on Highway 18 to allow a major expansion due to community concerns about noise, environmental impacts, and First Nations objections.

But North Cowichan Mayor Al Siebring has announced since then that he is exercising his power to ask council to walk back their decision not to approve the rezoning and have council reconsider its vote, revealing that turning down the rezoning has opened the municipality up to the possible $60 million liability.

RELATED STORY: NORTH COWICHAN WILL HOLD A SECOND PUBLIC HEARING ON VIMC EXPANSION PLANS

That means another public hearing on the rezoning request is scheduled for Dec. 9 at 6 p.m. at the Cowichan Performing Arts Centre.

Swabey said the municipality already has significant budget challenges facing it over the next number of years.

He said that without adjustments to the work expectations, service levels or major increases to North Cowichan’s revenues, the municipality is already facing five per cent tax increases each year for the foreseeable future.

Swabey said those tax increases are related to the costs of the new RCMP building, the loss of forestry revenue from the Municipal Forest Reserve, loss of revenue from land sales, replacing the Crofton fire hall and other expenses.

Swabey said the scale of any potential claim by the VIMC would be known within three years, and North Cowichan can’t build enough of a reserve in that time to significantly address the issue without unprecedented tax increases.

“This notwithstanding, the potential liability requires attention starting in the 2020 budget,” he said.

“To this end, staff recommend an ongoing 0.5 per cent tax be allocated to a reserve for insurance purposes. This will provide approximately $150,000 per year into a reserve account.”



robert.barron@cowichanvalleycitizen.com

Like us on Facebook and follow us on Twitter

Just Posted

U.K. press wonders if Nanaimo bars lured Prince Harry and Meghan Markle to Canada

‘Prince Harry’s favourite snack revealed,’ trumpets tabloid

Electric vehicle enthusiasts charged up over new mid-Island EV association

Mid Vancouver Island Electric Vehicle Association will promote technology and infrastructure

How to keep the hummingbirds fed during a cold snap

Four cups of water and one cup of white sugar is the perfect solution

Tips to get around years-long waiting lists for Greater Victoria attraction passes

Some passes have more than 2,000 people on the Greater Victoria Public Library waitlist

Remembering Ginger: Cumberland Museum receives national award

Museum given Governor General’s History Award for exhibit honouring martyr of the union movement

‘Like an ATM’: World’s first biometric opioid-dispensing machine launches in B.C.

First-of-its-kind dispensing machine unveiled in the Downtown Eastside with hopes of curbing overdose deaths

Canucks extend home win streak to 8 with 4-1 triumph over Sharks

Victory lifts Vancouver into top spot in NHL’s Pacific Division

BC Green Party leader visits northern B.C. pipeline protest site

Adam Olsen calls for better relationship between Canada, British Columbia and First Nations

B.C. society calls out conservation officer after dropping off bear cub covered in ice

Ice can be seen in video matted into emaciated bear cub’s fur

Horgan cancels event in northern B.C. due to security concerns, says Fraser Lake mayor

The premier will still be visiting the city, but the location and day will not be made public

Prince Harry, Meghan to give up ‘royal highness’ titles

‘Harry, Meghan and Archie will always be much loved members of my family,’ says Queen Elizabeth II

BC Ferries hybrid ships set to arrive in Victoria today

The battery-operated vessels will take over smaller routes

Know how to spot counterfeit bills

Campbell River RCMP concerned obvious phony bills are fooling people

Young Island skiers earn podium finishes at first Teck BC Cup of 2020

Saanich student-athlete earns two bronze medals in U18 girls category

Most Read