Richard Gleeson
Northern News Services

NNSL (May 19/99) - Later this month, city council will begin grappling with an issue near but not-so-dear to the hearts of all ratepayers -- property taxes.

The city's finance department last month reported a reassessment of all city properties conducted last year has resulted in a 7.5 per cent reduction in the city's tax base.

That means council will have to increase the mill rate -- the number by which assessed value is multiplied to calculate taxes owed -- for the first time in three years to avoid a decline in tax revenue.

The city budgeted to take in $11.4 million in property taxes this year. With Royal Oak defaulting on its taxes, that prediction is already overly optimistic to the tune of $738,000.

Another comparatively small matter is a plan to reduce the amount of interest charged on outstanding taxes for people who enter into payment plans with the city. If approved, the reduction is estimated to cost the city about $45,000 annually.

If the town chooses to go no more than half a million dollars in debt, council faces a basic decision -- whether to raise the mill rate across the board, or make individual adjustments to the mill rate for each of the four property classifications (ie. residential, multi-residential, commercial and mining).

The city finance department has calculated a 1.29 per cent increase in the mill rate for all properties and is required to maintain the tax base (minus Royal Oak's share and the interest rate discount).

They have also proposed an alternate method of achieving the same result -- increasing the mill rate by different levels for each classification (see Option #2).

Council will begin dealing with the delicate issue of increasing tax on some properties and decreasing it on others at the beginning of June.