Revelstoke propane customers hit with hidden city tax

Residential propane customers have been hit with a new 3.09 per cent tax that goes directly to the City of Revelstoke.

  • Apr. 8, 2013 8:00 a.m.

By Carl BR Johnson

Walter Brettermayer was taken by surprise when he opened his FortisBC propane gas bill to find that a new ‘franchise fee’ had been added to his monthly total.

To his dismay, FortisBC will now be charging this longtime Revelstoke resident, and many like him, an extra 3.09 per cent charge per month, and he is wondering why there was no concerted effort to inform him beforehand of this new levy.

“I don’t know who dreams these things up,” said Brettermayer.

“I think this is a hidden tax for the city – they never said anything to the customers about this beforehand.”

Teresa LeRose, Revelstoke’s Deputy Director of Corporate Administration, claims that there was an effort to educate Revelstoke’s citizens about the franchise fee beforehand.

“We advertised about the fee via local newspaper, the city’s website and radio ads in March of 2012,” said LeRose.

The fee works out to about three or four dollars extra per month, at an increased annual rate of about $36 for each propane-using household in Revelstoke.

According to Fortis’ commentary on many residents’ bill, this fee is, “a levy that FortisBC collects on behalf of some municipalities, and allows FortisBC the right to operate within a municipality’s roadways.”

Ruth Sulentich, community and Aboriginal Relations manager for FortisBC, said that many municipalities in B.C. already have this fee charged to their bills as a “flow-through to the city.”

“The 3.09 per cent is a common amount being charged in many municipalities in B.C. and that revenue, ultimately, lands in that city’s coffers,” she said.

Upon further examination, the BC Utilities Commission (BCUC) approved this fee after final approval was given by Revelstoke city council on Oct. 9, 2012, and the agreement was submitted for approval to the BCUC by FortisBC.

“One of the things that FortisBC attached to the approval of this agreement was the minutes of the [Revelstoke] council meeting. The motion was put forth by Councillor [Steve] Bender and seconded by Councillor [Christopher] Johnston on Oct. 9, 2012,” said Alison Thorson, BCUC director of policy, planning and customer relations.

Councilman Steve Bender responded to questions about the need and the creation of the franchise fee and said the City of Revelstoke is in dire need of extra tax revenue.

“That 3.09 per cent fee from propane users will go into general revenue,” said Bender.

“And Lord knows we need the tax revenue, like every other city does.”

According to him, the agreement with FortisBC and the city expired and was renewed recently for another 20 years.

The opportunity arose to add the fee, by which FortisBC would be used as a vehicle to collect the extra revenue for the city.

“We saw this as an opportunity to get a little more into the tax coffers,” he said.

“When we collect this fee, this will reduce the need for us to increase taxes for the city.”

City council reports indicate that at the 3.09 per cent rate, based on 2010 gross revenues for FortisBC in the city of Revelstoke, it’s estimated that this fee will net the city an extra $104,000 a year.

 

 

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