Prince Rupert city council is planning to use dividends from the recently formed Prince Rupert Legacy Inc., but the intention isn't to use the money to offset tax increases or operational costs.
Rather, Mayor Lee Brain said the idea is to put it towards needed infrastructure improvements and upgrades needed to handle a boom that would accompany the liquefied natural gas (LNG) industry.
"We commissioned a report by KPMG entitled Planning for Growth and they have analyzed what the cost of LNG is going to be on the City of Prince Rupert. In there they estimated that one LNG terminal could cost us roughly $16 million per year in infrastructure costs to handle the load, plus a certain amount for planning. It is going to cost us a lot as a city just to host this industry," he explained, noting additional staff support and engineering work would be among the needs.
"We don't have the money to do that and we don't want to put the burden on the taxpayer to handle the situation, particularly in the speculation period because we have to do all this work now and we have to contract out extra planners. We are going to take a certain amount from Prince Rupert Legacy each year for the next four years because, even if Petronas doesn't move ahead it doesn't mean Exxon is not at a future date ... to help prepare and use that money for the growth period."
Brain said the plan is to run the city's operating budget as though there is no growth coming and everything is status quo while using the Legacy money to cover the additional costs. The need for a system such as this one was outlined by chief financial officer Corinne Bomben at the March 23 meeting of council.
"Using Legacy funds to offset the operational costs can have dire consequences ... assuming a three per cent operating increase each year, using Legacy funds to keep the mill rate at zero would result in the need to increase the mill rate by 23 per cent if we stopped using it after eight years," she explained, adding that was not an acceptable option.
"Staff are aware we are not just the stewards of the people living in the community today, but we are the stewards of the community for those living here in the future."