Mill assessment appeal looms over town

Duane Hicks

Whether or not the property assessment of the local pulp and paper mill is decreased this year will have a major bearing on the town’s finances in 2012, Mayor Roy Avis said last week.
AbitibiBowater (AbiBow) Canada Inc., now Resolute Forest Products, currently has an appeal before the provincial Assessment Review Board for its mill property in Fort Frances.
The appeal covers the years 2009, 2010, and 2011, with the company looking to have the assessment lowered from $28,260,000 to no more than $15,010,000.
If the appeal is successful, the town would be required to make a retroactive payment of roughly $2.2 million for the municipal portion of the adjustment to the company for the years 2009-11.
As well, in subsequent years, the town would see tax revenues reduced by roughly $800,000 on an annual basis.
“We have a real concern with the reassessment,” Mayor Avis acknowledged.
“In the worst-case scenario, we’re looking at a $2-million liability, so that’s something we really have to watch, pay attention to, and work through,” he stressed.
Mayor Avis said the town has hired Municipal Tax Equity Consultants Inc. and MTE Paralegal Corp. to represent the town’s interests in the appeal proceedings.
“We’re working through that with them, and I understand it will be in the latter part of this year that the decision is going to be made,” he noted, estimating a decision could be made by late summer.
Mayor Avis said the town’s 2012 budget probably will be finalized in April. And while council will not know the result of the appeal until after that time, the possible outcomes will weigh heavily on budget deliberations.
“We will be walking through our budget process but this will be hanging over our heads,” he remarked.
“We are going to have a special meeting and deal with the ‘what if’ scenarios,” said the mayor, adding council also will look at where the town can turn to get one-time funding to deal with the impact of a possible drastic change in assessment.
“There’s a lot of things we have to look at because this goes back three years,” he explained. “We’re incurring liabilities from those years, and that money has been spent by ourselves or [paid to] the uncontrollables, and we have no way of getting it back.”
Speaking more specifically about the current status of production at the local mill, Mayor Avis hopes the forecast improves in 2012 for the sake of everyone.
“It gives me great concern that we start off 2012 with our paper company not operating,” he said. “That’s a real concern of mine as mayor and also for our council.
“We’ve always had a good, stable economy in Fort Frances, and we hope that we can continue having that.”
The mayor said another budget factor is government funding for infrastructure projects.
For example, the town has been requesting “Connecting Link” funding from the province for years so it can reconstruct Scott Street from Reid Avenue to Colonization Road East—a project initially tendered by the town back in January, 2009.
Mayor Avis said he and other council reps attended conferences, such those for the Association of Municipalities of Ontario (AMO) and Ontario Good Roads Association (OGRA)/Rural Ontario Municipal Association (ROMA) in the past year, met with various ministers and parliamentary assistants, and lobbied to secure funding for more projects.
They will keep doing so in 2012.
“It’s a continuous battle because of the government’s financial position. It’s putting real stress on us as a community, as well, in trying to move forward with new projects,” he remarked, adding council is “working hard and diligently to secure funding.”
Mayor Avis noted council once again will have to try to keep town costs in line for the 2012 budget while having to deal with “uncontrollable” costs, such as public health and social services, which are out of council’s hands.
“When [uncontrollable costs go up], it’s very hard for council to come up with a budget that’s appropriate for these times,” he admitted, noting the 2012 levies for uncontrollable costs aren’t yet known.
Council also will be setting the sewer and water rates for 2012 early in the new year in order for them to be passed prior to the first billing period (the first week of March).
While council received a report at its last meeting from a consultant recommending water and wastewater rates be increased five percent each year over the next six years, Mayor Avis said this still needs to be discussed.
“Looking at the long-term sustainability of our system, and looking at capital funding, we’ve been working on that path the past few years,” he explained.
“It’s not going to be ‘rate shock’ to our taxpayers because we have put ourselves on that track a few years back.”
The town recently inked a four-year deal with non-union/management employees, and having this agreement in place will help council budget staffing costs, the mayor continued.
“We know we can budget for it, we can work with it, it’s a good agreement for both parties,” he said.
With a string of high-profile projects having been completed in the past five-six years, ranging from the renovated Fort Frances Museum to the heritage sites on the riverfront to the new Fort Frances Public Library Technology Centre, Mayor Avis said the public shouldn’t expect to see any similar projects in the near future.
The focus now is more on taking care of what the town has, he noted, adding the town’s “soft services” and support programs are in good order, and the maintenance programs in place “are going to show a long-term stability for the community.”
But the mayor did mention the town is working on an agreement with the Fort Frances Community Clinic with regards to the old library building, located at the corner of Church Street and Victoria Avenue, and hopefully the clinic will move in later in 2012.
While time will tell what happens in 2012, Mayor Avis said he wants to start the new year off positive, adding: “I’d like to wish everybody a prosperous and happy new year.”
2011 review
Looking back at 2011, Mayor Avis noted he and council completed their first year of their second-consecutive term, and having all of council return has resulted in a beneficial sense of continuity.
“We were able to hit the road running,” he reasoned.
For example, council and administration completed a strategic plan for the 2010-14 term of council this past fall, and already has begun conducting exercises and meeting objectives set out in that plan.
Likewise, the 2011 budget process began right after mayor and council were elected, and they put together a good budget, which should be “right on target” and result in no surprises when council gets the year-end financial report for 2011.
As far as infrastructure projects, Mayor Avis said he was glad to see the reconstruction of the water and sewer infrastructure on the 200 block of Third Street East be completed on time and on budget this past summer.
“It was a very good job done there,” he remarked. “It was a necessity because of the condition of the pipes.
“Like we’ve always said, there’s pipes in the ground that are over 100 years old, and that was one of the worst areas in town and one of the main feeds for the town.”
The job included water and sanitary sewer line replacement, new storm sewer installation, and new asphalt on Third Street East between Mowat Avenue and Portage Avenue.
Smaller projects coinciding with the Third Street East work included rebuilding Osborne Street (between Christie Avenue and Armit Avenue), the installation of new sewer and water services for a commercial property on McIrvine Road and the new 10-unit apartment complex built by Wahkaihganun Futures Corp. up on Eighth Street, as well as work on the watermain on Sixth Street between Portage Avenue and McKenzie Avenue.
(Work on the watermain at the Shevlin wood yard easement between Nelson Street and Church Street will be done next spring/summer).
As well, wildlife fencing was erected at the Fort Frances Airport to prevent deer from wandering onto the runway and making it safer for passengers on landing aircraft.
The fence, which was made possible through Transport Canada’s Airports Capital Assistance Program (ACAP), has been working since being put in place in the fall, noted the mayor.
On a lighter note, another highlight of 2011 was Fort Frances beating International Falls in the International Tug-of-War on July 2, said Mayor Avis.
“That was great and we’re looking forward to our 2012 tug-of-war, as well,” he added.