Town, Resolute reach a deal on tax appeal
The Town of Fort Frances and Resolute Forest Products today reached a joint agreement to resolve outstanding assessment appeal complaints regarding the company’s mill here.
The property assessment will be reduced by 25 percent for the subject years 2009-12.
The joint settlement means the town will have to repay Resolute a total of $1.763 million ($2.111 million minus the education tax component).
If the mill’s appeal had been 100 percent successful, the town would have had to repay $4.098 million ($4.919 million minus the education tax component).
The reduction in assessment also means a loss of future tax revenue for the town.
By how much has yet to be determined, but the town sees the settlement as a prudent measure in the mitigation of tax revenue loss.
“It’s very, very good news for the community,” Mayor Roy Avis said in an interview this morning.
“We’ve been working on this issue for the last year,” he noted.
“We’ve been able to come to an agreement with Resolute,” the mayor added.
“As you see, the 2009-12 years were involved, and our biggest problem was, going back, our liability as a community was at $4.9 million [$4.,098 million].
“Now, with the negotiations that took place, we went to $2.111 million [$1.763 million] and that really reduces our liability for that four-year period,” he stressed.
“It’s very good news for the municipality.
“When I compare it to our northern partners, Dryden and Espanola, we’ve been very fortunate to come up with this agreement,” Mayor Avis continued.
“We feel that the settlement is a very, very proactive resolution to this appeal.”
That said, the $1.736-million repayment to Resolute—and the loss of assessment going forward—will play into the town’s 2013 budget considerations.
“Going forward, it’s going to play a major part in our budget deliberations,” the mayor conceded.
“We’re going to have to look at reserves, we’re going to have to look at taxation, we’re going to have to look at everything in the community.
“We’ll be looking at the complete organization, look at the way we do business,” he remarked.
“Going forward it’s going to hurt,” he acknowledged. “We have to try to maintain the services we’ve got with less revenue.”
With the settlement in place, the loss of assessment also means the town’s proportion of costs to some services, such as Rainy River District Social Services Administration Board, will not be as great this year.
“We can’t do anything about the past,” Mayor Avis said. “We have to accept that responsibility and pay those ourselves, from the tax dollars that we raise in this community.
“Even though we have paid previously, we can’t go back and get a credit,” he noted.
“The Town of Fort Frances is pleased that Resolute Forest Products was willing to work together to achieve a settlement of this very important matter,” the town said in a press release.
“Given the recent decisions related to assessment within the forest sector, the town believes that this settlement was a proactive resolution to this appeal and could not have achieved this without the co-operation and consideration of Resolute Forest Products.
“The town and its citizens all share mutual concerns with assessment and the tax base,” it continued.
“This settlement requires prudent risk management in the best interests of our community given the recent Assessment Review Board decisions for the paper mills in Dryden and Espanola.”
The Municipal Property Assessment Corp. recently assessed the Domtar mill in Dryden at just $14 million—down from the $36 million estimated by the city in its 2013 budget.
This reassessment meant tax revenues from the Domtar mill will drop $1 million going forward, and force Dryden council to deal with a $4-million shortfall in its 2013 budget.
Likewise, the assessment of the Domtar mill in Espanola recently dropped from $19 million to $9.9 million.
As a result, Espanola will need to refund $4.9 million in property taxes to Domtar.