First nation pays debt; is excused from the interest
The Kwanlin Dun First Nation has paid the city $892,000, but will not pay interest stemming from a 2006 deal made public at a city council meeting earlier this year.
The Kwanlin Dun First Nation has paid the city $892,000, but will not pay interest stemming from a 2006 deal made public at a city council meeting earlier this year.
Deputy-Mayor Doug Graham confirmed this morning that the first nation issued the city a cheque in early February in the amount of $892,000.
The deal saw the city connect water and sewage lines and roads to Kwanlin Dun property on the waterfront. The site, at Black Street and First Avenue, is set to be a cultural centre.
Kwanlin Dun had agreed to pay the costs for connecting the city services, and was billed accordingly in November 2006. The city said it expected the money by that December.
Chief Mike Smith of Kwanlin Dun had told the Star his government had always intended to pay the outstanding balance, but that interest payments were never discussed.
"It wasn't written into the agreement, but it is part of city invoicing," Graham said this morning. Mayor Bev Buckway is in Dawson City.
Graham had raised the issue of the outstanding money at a January council meeting for reasons unknown.
Smith expressed displeasure at the agreement being dragged out into the public arena.
"We do not need all this negativeness," he told the Star.
Graham's issue was ensuring the city was paid the outstanding balance, but he also raised concern over whether or not the city would seek the interest.
When city taxpayers do not pay the amounts they owe, they face a two per cent compounded interest rate for every month they are late.
In this case, two per cent of $892,000 for 14 months equals an additional $249,760.
"We just decided not to pursue it because we hadn't pursued it before," said Graham.
City manager Dennis Shewfelt said such problems with Kwanlin Dun have not arisen in his tenure.
"We do have service agreements with them, and they've all been honoured," he said.
The city has agreements to provide water and sewage lines in lieu of payment to land parcels owned by Kwanlin Dun.
Representatives of Kwanlin Dun were not available for comment as of this afternoon's press time.
Comments (1)
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Robin on Mar 4, 2008 at 8:26 am
I think the Kwanlin Dun First Nation should have paid the interest.
Normal business dealing work with interest all the time automatically. I would say they should not pay only if the agreement had specifically stated interest was not to be added.