The City of Merritt is facing an estimated four to six per cent drop in overall tax revenue in 2018 due to the closure of the Tolko sawmill.

Those numbers are based on two scenarios, with the city facing up to a six per cent drop if Tolko decides to demolish the offices they have on the property, and about a four per cent drop if the site remain shuttered as it is now, City of Merritt director of finance Sheila Thiessen told the Herald.

The city’s overall revenue from taxes was $7.3 million in 2015 with Tolko contributing about $500,000.

For this year’s budget, the City of Merritt will receive the same amount of tax revenue from Tolko that it took in last year, but knowing what kind of revenue hit the city may be facing in 2018 will allow the city to prepare for that during this year’s budget process, Thiessen said.

“We can make a conscious plan to save some of our revenue this year to help transition,” she said.

Troy Connelly, Tolko’s senior general manager of lumber told the Herald last month that the company intends to maintain woodlands staff at the mill site.

Thiessen said there will still be some sort of drop in revenue even if Tolko maintains a presence at the property because it will be reclassified.

She said she intends to conduct a service level review after completing the 2017 budget in anticipation of the drop in revenue coming in 2018.

“Doing a service level review is a good way to interact with the public and council for everybody to get a sense of what we have here and what is a priority. Maybe we’re spending money on stuff that isn’t a priority to taxpayers,” Thiessen said.

She said the service level review will involve examining city run programs and what it costs to run them.

Thiessen said the city isn’t faced with major increases in expenses this year.

The city held its first budget meeting Tuesday to go over the impact of the Tolko closure, and there are five more meetings that will take place at city hall between January and March.

Next Thursday there will be a budget meeting examining grant-in-aid requests. Another budget meeting is scheduled for Feb. 7 and an open house is set to take place Feb. 21 to gather public input.

The last two regular budget meetings will be on Feb. 25 and March 7.