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The Village of Burns Lake withdraws from RDBN function

Village of Burns Lake has withdrawn from the Regional District of Bulkley-Nechako Chinook Community Forest economic development function.

The Village of Burns Lake has withdrawn from the Regional District of Bulkley-Nechako (RDBN) Chinook Community Forest economic development function.

The decision will result in each local government assuming independent responsibility for legal and other costs associated with creation of a corporate entity to hold the new community forest tenure. It will, according to a village spokesman, also allow each organization to hold its own shares in the yet-to-be-created company, and appoint its own directors to the latter’s board.

Burns Lake mayor Luke Strimbold communicated the municipality’s decision to the regional district in a March 25 letter. In that document, he also stated council would not approve adoption of the Chinook Community Forest Economic Development Service Establishing Amendment Bylaw No. 1728, which proposed a slight change in how money for setting up the community forest corporation would be generated.

Last December, the regional district board adopted the Chinook Community Forest Economic Development Service Establishing Bylaw No. 1714, which authorized the creation of an economic development “service” for the purpose of “making contribution towards the cost of creating a community forest corporation or community forest limited partnership, or both, in the service area.”

The bylaw also authorized the regional district to collect taxes for this purpose in electoral areas B (Burns Lake Rural) and E (Francois/Ootsa Lake Rural), as well as the Village of Burns Lake. The maximum annual tax requisition under the bylaw “is the greater of $113,000, or the amount equal to the amount that could be raised by a property value tax rate of $0.25 per $1,000 applied to the net taxable value of land and improvements in the service area.”

In an interview last week, Strimbold suggested the decision to withdraw from the regional district’s Chinook economic development function was prompted by council’s desire to have direct representation on the Chinook Community Forest board.

“Council has chosen to withdraw because we want to hold our own shares in the company rather than the regional district holding our portion of the shares in Chinook Community Forest,” he explained. “This allows the Village of Burns Lake to appoint a director to the Chinook Community Forest board of directors.

“Council looked at several options with the regional district and determined the option to hold our share independently is in the best interest of municipal taxpayers.”

Strimbold added it’s appropriate that “village taxpayers pay for municipal legal costs, and regional district taxpayers pay for regional district legal costs.” He indicated that to date, the municipality has spent approximately $5700 on legal costs associated with establishment of the new community forest, but doesn’t expect they’ll total more than $10,000.

Each local government, he noted, has its own legal counsel investigating the matter.

Strimbold downplayed the impact Burns Lake council’s decision will have on the Chinook economic development function. “The fact that the village is not participating in the function means that the village will hold its own shares, will not be responsible for regional district legal costs, and will be responsible for its own legal fees associated with getting Chinook Community Forest operational.”

Hans Berndorff, financial administrator for the regional district, deferred comment on the village’s decision, saying “discussions are continuing, and it is too soon to comment.” When asked to elaborate on the substance of those discussions, he stated they “are not related to the village wanting to withdraw from the service.”

It appears, however, that the municipality’s decision will necessitate changes in the Chinook economic development function, and indirectly prevent the regional district from collecting taxation in 2015 to specifically offset its Chinook set-up costs.

“The Village of Burns Lake council has decided that it wants to own its Chinook shares directly instead of through the RDBN,” Berndorff explained in an April 14 memo to the regional district board. “As a result, it wants to withdraw from the Chinook Community Forest service that was established to fund the RDBN’s legal and other set-up costs for Chinook. This would require an amendment to the service establishment bylaw, which would need the consent of two-thirds of the participants as well as the RDBN board approval.

Berndorff noted that Electoral Areas B and E, through their directors, have agreed to continue to fund the Chinook economic development function and will consent to the change. The amendment bylaw, which will remove the municipality as a participant in the Chinook economic development function, will be brought to the RDBN board April 30.

“In the meantime,” added Berndorff in his memo, “there would be no taxation for 2015 (for this service). Costs would be covered by grants or grants-in-aid from areas B and E.”

In 2014, the regional district incurred $20,076 in legal expenses in relation to set-up of the Chinook Community Forest. This year, the regional district estimates it will spend an additional $29,924.

Political reaction to the village’s decision was mixed. Bill Miller, director for Electoral Area B, declined to comment on the matter at this time. However, Electoral Area E director Eileen Benedict expressed some misgivings.

“My concern with the village pulling out of this function is the costs to the taxpayers,” she said. “As a rural director, I feel that having one entity working on the set-up of this function only makes sense. The costs double when both the regional district and the village are paying for lawyers and staff time.”

Mayor Strimbold doesn’t agree.

“The Village of Burns Lake and the Regional District of Bulkley-Nechako legal counsels have been and will continue to collaborate where possible,” he said. “For example, it is anticipated that we can partner on the application to the municipal inspector, which in turn will save both of us costs. However, there are some issues that need independent legal advice, because the Village of Burns Lake is governed by the Community Charter, and the regional district is governed by the Local Government Act.”

Strimbold concluded by saying that the municipality’s decision to withdraw from the Chinook economic development function in no way reflects its level of support for the new community forest.

“Council is very supportive of participating in Chinook Community Forest,” he stressed. “This decision in no way impacts our relationships with all the shareholders of Chinook Community Forest. Council has signed the license application.”

The Chinook Community Forest is an area-based tenure with an Allowable Annual Cut (AAC) of 150,000 m3. It is a partnership with the Burns Lake Band, Lake Babine Nation, Cheslatta Carrier Nation, Wet’suwet’en First Nation, Skin Tyee Nation, Nee Tahi Buhn and the Village of Burns Lake and RDBN.