a successful $60-million judgment against the Municipality of North Cowichan over denying zoning for a new expansion at the Vancouver Island Motorsport Circuit would have staggering repercussions in the municipality, according to a staff report. (File photo)

a successful $60-million judgment against the Municipality of North Cowichan over denying zoning for a new expansion at the Vancouver Island Motorsport Circuit would have staggering repercussions in the municipality, according to a staff report. (File photo)

Residents in B.C. city could face 133% tax hike in ‘worst case’ lawsuit outcome: report

An average 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.

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.

The VIMC and municipality have been at odds over the company’s wishes to expand a private motorsport circuit.

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.

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

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

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Amanda Parsons, a registered nurse on staff at the Northwood Care facility, administers a dose of the Moderna vaccine to Ann Hicks, 77, in Halifax on Monday, Jan. 11, 2021. THE CANADIAN PRESS/Andrew Vaughan-Pool
61 new COVID-19 cases, two more deaths in Interior Health

Twenty-nine people are in hospital, seven of whom are in intensive care

Community mental health workers are in high demand, and a new program at Selkirk College will provide opportunities in this field. File Photo
Selkirk College to train community mental health workers

Twelve students will complete two courses enabling them to work in health and human services

Dr. Cori Lausen, bat specialist, has questions about logging in an unusual bat habitat near Beasley. Photo: Submitted
Kaslo biologist questions logging at unique West Kootenay bat site

Dr. Cori Lausen, a bat specialist, studies a population of bats above Beasley

Robbie Campbell lost his livelihood when the pandemic shut down Shambhala Music Festival. Instead, he spent part of 2020 working on a children’s book called Tulip that is now available. Photo: Submitted
In a lousy year, a Kootenay man was saved by a pink T-rex

Robbie Campbell became a children’s author after the pandemic cost him his livelihood

Syringe is prepared with one of B.C.’s first vials of Pfizer vaccine to prevent COVID-19, Victoria, Dec. 22, 2020. (B.C. government)
B.C.’s COVID-19 caseload stays steady with 465 more Tuesday

No new outbreaks in health care facilities, 12 more deaths

New Westminster TV production designer, Rick Whitfield, has designed an office in a box for British Columbians in need of a private workspace. (BC Box Office photo)
PHOTOS: B.C. man designs ‘box office’ solution for those working from home

‘A professionally designed workspace on your property, away from the distractions of home’

Chilliwack ER doctor Marc Greidanus is featured in a video, published Jan. 18, 2021, where he demonstrates and describes effectiveness of various styles of masks. (Youtube)
VIDEO: Emergency room doctor runs through pros and cons of various masks

‘We’ve been asked to wear a mask and it’s not that hard,’ Greidanus says.

(Pixabay photo)
VIDEO: Tip to Metro Vancouver transit police helps woman 4,000 km away in Ohio

Sgt. Clint Hampton says transit police were alerted to a YouTube video of the woman in mental distress

A woman types on her laptop in Miami in a Monday, Dec. 12, 2016, photo illustration. THE CANADIAN PRESS/AP/Wilfredo Lee
British Columbia government lax on cybersecurity practices, auditor reports

The audit did not highlight a specific threat, but it found breaches in cybersecurity are increasing globally

Cranbrook Food Bank coordinator Deanna Kemperman, Potluck Cafe Society executive director Naved Noorani and Sunshine Coast Community Services Society executive director Catherine Leach join B.C.’s new Municipal Affairs Minister Josie Osborne on a video call about B.C. gaming grants, Jan. 19, 2021. (B.C. government)
B.C. gaming grants reorganized for COVID-19 priorities

Minister highlights community kitchens, food banks

(Pixabay photo)
‘Cocaine bananas’ arrive at Kelowna grocery stores after mix up from Colombia: RCMP

Kelowna RCMP recently concluded an international drug investigation after finding cocaine in local grocers’ banana shipments in 2019

A new video from NCCIH and BC Northern Health titled ‘Healing in Pandemic Times: Indigenous Peoples, Stigma and COVID-19’ was animated by Joanne Gervais. (Photo Provided By: NCCIH Archives)
VIDEO: Stigma against Indigenous people is a ‘social sickness’

A new short animated video is aiming to educate the public on the stigmatization

A pinniped was attacked by an unseen predator off the shores of Dallas Road Monday night. (Courtesy of Steffani Cameron)
VIDEO: Seal hunting, not being hunted in video shot off Victoria waterfront

Victoria woman captures footage of pinniped activity off Dallas Road

Most Read