Sewage users in Colwood's Phase 5 local service area will see a reduction on their tax bill to correct an error at City hall.

Sewage tax, charged only to homes linked into the municipal system, is collected to pay back debt from installing sewage infrastructure.

The City initially taxed the Phase 5 LSA a rate of 2.1 per cent, but 14 of the 130 homes in the area overlap with the Lagoon LSA where sewage tax was levied for the first time this year.

To avoid overtaxing the 14 homes, Colwood council passed a motion to tax those homes at the Lagoon rate and add on 0.9 per cent to cover only the interest (not principal repayment) on debt for Phase 5.

Property tax bills were sent out with these charges. Council was later advised that it can't charge a different rate to some households within an LSA.

Rather than double-tax the 14 homes, council voted to bring all homes in Phase 5 down to interest-only rate of 0.9 per cent for this year. The shortfall will be made up in future years.

Notices will be mailed (presumably after the postal worker lockout) advising affected homeowners of the change. For the handful that have already paid their property tax, the City will refund the money.

Colwood is in the process of seeking support from the province to merge Phase 5 and Lagoon LSAs to deal with the issue of overlap.

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