A contentious issue between the City of Prince Rupert and the District of Port Edward has been resolved, for now.
The two local governments arrived at a two-year service agreement that will see Port Edward pay the City of Prince Rupert $500,000 over the next two years out of the standing Ridley Island Tax Sharing Agreement.
The district will contribute $300,000 in 2016 and $200,000 in 2017, with a renegotiation date set in two years' time, or if investors behind the Pacific NorthWest LNG terminal make a final investment decision on their project on Lelu Island, whichever comes first.
As well, the City of Prince Rupert is reducing the rates and fees for Port Edward residents using Prince Rupert's landfill site as of the start of 2017 by eliminating the non-resident surcharge. This has Prince Rupert residents and Port Edward residents paying the same amount to use the landfill. Port Edward businesses and industry will still pay the non-resident rates, a press release from the City of Prince Rupert outlines.
"This two-year agreement reflects our shared understanding that Port Edward benefits from Prince Rupert services and public facilities without fully contributing towards the costs of operating them. The agreement is a good start towards achieving a long-term solution that is fair to taxpayers," said Mayor Lee Brain.
A representative from the District of Port Edward was not immediately available to comment Thursday.
The original Ridley Island Tax Sharing Agreement was negotiated by the two local governments and the province in 1980 and when signed, stated that 20 per cent of taxes collected from Ridley Island properties is to be shared with Port Edward.
In 1984, Port Edward started returning three per cent to the City of Prince Rupert in return for the recognition that Port Ed residents use Prince Rupert's recreation facilities.
Recent stats show that from 2010-2014, approximately $3.27 million was transferred to Port Edward as part of this agreement, equating to an average of 50 per cent of Port Edward's annual revenues.
"Our respective circumstances have changed significantly since the Ridley Island Tax Sharing Agreement was signed. We no longer have the pulp mill contributing to our tax base, and I'm pleased Port Edward has agreed with us that it's time to update the Ridley Island agreement to be fair for everyone," added Brain.
The non-resident landfill fee was a source of contention between the municipalities when introduced in 2015, and a rise in illegal dumping has occurred at Kloiya Bay and other spots around Port Edward since, as well as various docks in Prince Rupert.
Pacific NorthWest LNG signed a taxation agreement with Port Edward in December 2014 and is still in negotiations with the City of Prince Rupert on a benefits agreement.