Resurfacing of airport means tax increase

A public referendum is planned for Feb. 27, 2016, in order to vote on whether to approve raising the tax limit.

Burns Lake residents will soon be asked whether they approve raising the tax limit of the Village of Burns Lake and electoral areas B and E to resurface the runway at Burns Lake’s Baker Airport.

Last week, the board of the directors of the Regional District of Bulkley-Nechako (RDBN) received a report from financial administrator Hans Berndorff describing how the airport runway has deteriorated to the point where a complete resurfacing is required with a projected total cost of $1,585,619.

In order to meet the costs of repaying any debt accrued, it is proposed that the tax limit of the Village of Burns Lake and electoral areas B and E would be increased from $93,750 to $190,000 on improvements only.

Berndorff clarified that the current $93,750 tax limit is equivalent to a residential tax rate of $20 on a $100,000 property, and the proposed tax increase to $190,000 would be equivalent to a residential tax rate of $41 for a $100,000 property.

A public referendum is planned for Feb. 27, 2016, in order to vote on whether to approve raising the tax limit.

The Lakes District Airport Society (LDAS) has applied for a number of grants to supplement this cost. The LDAS has also submitted to the RDBN’s board of directors a proposed financial plan, which outlines potential financing for the project including federal gas tax funds from electoral areas B and E, capital reserves, GST rebates, and potentially debt funding from the RDBN.

The memo notes that when the total cost of the project is added to the RDBN’s existing annual budget for the airport, it would require an annual taxation of $188,949 starting in 2017. Therefore Berndorff argues an increase in the tax limit of the service is required.

Addressing debt-funding, Berndorff described the need for a loan authorization bylaw, which would authorize the borrowing of up to $1 million. Assuming a 15-year debenture with an interest rate of 4.4 per cent, Berndorff estimates the annual debt repayment cost would be $91,568.

However, the board decided to meet again to discuss alternatives to a loan authorization bylaw (such as a contribution service establishment bylaw). As it turned out the ministry of community sport and cultural development had informed the board that it would not authorize the bylaw.

Burns Lake’s Baker Airport is owned by the Village of Burns Lake and is operated by the Lakes District Airport Society under a lease; the society itself is funded by the RDBN.

 

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