WEST Vancouver taxpayers will no longer be on the hook for the tax bill of B.C. Ferries' Horseshoe Bay terminal, following an agreement between the B.C. Assessment Authority and the ferry corporation.
Last year, B.C. Ferries convinced members of the Property Assessment Appeal Board that because the property could only be used as a ferry terminal, its value was only about $20 - rather than its previous $49 million assessment.
The surprise devaluing of the land meant the District of West Vancouver stood to lose about $250,000 a year in tax revenue. The municipality was also on the hook to pay back the taxes paid by B.C. Ferries for the last three years.
At the time, West Vancouver Mayor Michael Smith called the decision "ridiculous," and the district launched an appeal in B.C. Supreme Court, which was scheduled for a hearing in October.
But the province announced Thursday that B.C. Ferries and the assessor had reached an agreement that would keep the matter out of court.
The agreement applies to all of B.C. Ferries' 48 properties in the province, reducing the corporation's total property tax burden by roughly 20 per cent, or $1 million.
"We've always said we want to pay fair and reasonable taxes. We felt that the assessment levels we were at were too high," Marshall said. "With the terminals, it's not like it was waterfront condominiums and housing developments. It's what we would call an impaired use."
Marshall said the ferry corporation is pleased to have an agreement that works for all "What we're glad about is that it is a five-year agreement and it provides predictability for B.C. Ferries and helps us mitigate pressure on ferry fares," she said.
In the case of West Vancouver, the agreement provided for a terminal assessment of just over $47.8 million - slightly down from a previously-anticipated $49 million valuation.
Smith offered the agreement his blessing in a press release statement. "West Vancouver is very pleased that all the parties were able to come to an amicable resolution and put this chapter behind us," he said.
"Although the new assessment is still a loss of revenue for our district and our taxpayers, we are pleased with negotiating the assessment up to $47,825,000 and bringing a long-term, stable and predictable assessment and tax base. The original assessment of $20 for the Horseshoe Bay ferry terminal properties was absurd and suggested that the properties had no value."
The agreement results in a slight reduction in property taxes for the Horseshoe Bay terminal, but the municipality still gains from the agreement, according to Michael Koke, the district's chief financial officer.
"Absolutely, we've resolved the 2010, 2011 and 2012, issues. We have some certainty for 2013 moving forward. We've eliminated a bunch of costs that would be associated with the appeal - legal fees and whatever other consultant and staff time that would be involved with that," Koke said."(Even if we won), we still ran the risk that we would go back to the appeals board and get a decision that was less favourable than the one we have right now."
There is no telling what the district should brace for when the deal expires though, Koke added.
"There are any number of things that could happen. Everything from a legislated resolution where the provincial government could interject themselves in this to the status quo, to what we're doing moving forward," he said.