Colwood City Hall (Black Press file photo)

Colwood discusses parcel tax to help pay for sewer repair and replacement

Report submitted to committee recommends parcel tax for all residents

The City of Colwood is discussing options to maintain the city’s sewer infrastructure, one of which could be a parcel tax for all Colwood residents in a Local Area Service regardless of whether or not they are connected to sewer.

At the Committee of the Whole meeting on March 18, a report from Colwood’s director of finance was presented recommending that the city establish sewer infrastructure replacement funding.

“The city can establish a new sewer capital user fee, a parcel tax levy on the Main LAS (Local Area Service) or a combination of the two,” the report reads.

Colwood’s Sustainable Infrastructure Replacement Plan points out that approximately $913,000 will be required each year to prepare for sewer repair and replacement.

Currently, the city is setting aside $51,000 per year and expects to replace approximately $72 million in sewer infrastructure over the next 80 years, according to the report.

Five Local Area Services — West, East, South, Central and Main — were established in 2011 after combining what used to be 56 Local Area Services. All residents who belong to a sewer LAS are also part of the Main LAS.

The parcel tax related to the South and West LAS expired last year but the ones related to Central and East LAS still remain and go towards debt related to the capital construction cost.

READ MORE: Colwood residents consider sewer hookup

In 2018, revenue from the South and West totaled over $281,000, according to the report. Revenue from Central and East in 2019 will generate $347,000.

Colwood staff are recommending that the city aim for a revenue target of an additional $250,000 through a Main LAS parcel tax, a sewer user fee or both.

For those in the Central LAS and East LAS that are paying parcel taxes already, city staff recommend the new tax be discounted by the amount that is already being paid in those areas.

Implementing a Main LAS parcel tax would mean 88 per cent of sewer accounts in the City of Colwood would see a decrease in the amount they are paying, according to the report.

There are about 500 sewer user accounts that are not part of any active LAS area in Colwood, the report says.

In terms of a sewer user fee, the report says the city can implement it to go towards infrastructure replacement. It would be following the lead of a bylaw from 2011 that established a sewer user fee based on water consumption to fund CRD trunk maintenance, sewer administration and Colwood sewer main maintenance.

The new sewer user fee would only be applied to users connected to the sewer system and would include the close to 500 users who are not in the Main LAS.

READ MORE: Light at the end of Colwood’s sewer tunnel

In the report, staff presented the committee and council with four options: implement a sewer capital user fee, implement a Main LAS parcel tax, implement a combined Main LAS parcel tax and a sewer capital user fee for non-LAS customers or do not implement any sewer capital levy.

If the city hopes to achieve a revenue target of $250,000 annually, average residences will see a decrease of $11 in their sewer taxes regardless of whether the city implements a tax, a user fee or both.

At Monday’s committee meeting, council directed city staff to continue to explore options for establishing a sewer infrastructure replacement fund in preparation for 2020 budget discussions.

“Colwood is ahead of the curve on planning for future infrastructure replacement costs,” said Acting Mayor Gordie Logan. “Council agrees with the principle of creating a sewer repair and replacement fund. We look forward to continued discussion about doing it in the most equitable and predictable way for taxpayers.”

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