DocumentsStaff ReportMay 4, 2020Pages 119–122
Staff Report - 2020-2024 Five-Year Financial Plan Bylaw No. 1894 and 2020 Tax Rates Bylaw No. 1895
Report to present the proposed 2020-2024 Five-Year Financial Plan (Bylaw 1894) and 2020 tax rates bylaw (Bylaw 1895) for Council readings and adoption.
Key facts
- Agenda listing: Report start page 119
- Bylaw Nos referenced: 1894 (Financial Plan) and 1895 (Tax Rates)
- Intended for first/second/third readings and adoption per agenda
Staff Report to Council
Date: 04/05/2020
Department: Finance
Subject: 2020-2024 Five-Year Financial Plan Bylaw No. 1894 and 2020 Tax Rates Bylaw No. 1895
Background
The Community Charter requires Council to adopt a Five-Year Financial Plan (the Plan) each year and, after the adoption of the Plan but before May 15th, to adopt a tax rate bylaw. Bylaws No. 1894 and No. 1895 satisfy these requirements. Copies of these bylaws are attached.
Commentary
At the Regular Council Meeting on March 2, 2020, Council approved the 2020-2024 Five Year Financial Plan and directed staff to bring forward the 2020-2024 Five Year Financial Plan Bylaw, 2020 and the Tax Rates Bylaw 2020.
The 2020 – 2024 Five Year Financial Plan approved by Council had a tax increase of 3.49% in 2020. Council’s priority of public safety services make up 2% of the tax increase this year, the second of a five-year plan, with 1% to fire, 1% to police for additional resources to meet the requirements of growth within in the City. It also included the first year of a five-year plan for 1% annual tax increase that would initially be used to fund land-banking purchases in the downtown core. After five years, the annual 1% tax increases will roll into Asset Replacement Reserves to provide funding for an Asset Management Plan that will be required by the Provincial and Federal Governments. The additional 0.49% is to cover increased costs of service due to inflation and growth of the City.
At this time of uncertainty and given the timing of the preparation of the budget that was approved being before this uncertainty, work has been done to analyze and evaluate the 2020 budget to determine whether there are areas of concern or risk associated with the COVID-19 impact on the City. Upon further analysis, while some actuals may end up lower than budgeted and others may be higher than budgeted, staff believe that the 2020 budget, approved on March 2nd with the following amendments to decrease the tax increase from 3.49% to 1.90%, is appropriate.
Proposed Amendments / Changes (Impact to tax dollars required)
| Change | Impact to tax dollars required |
|---|---|
| Postpone Land Banking Initiative to 2021 | ($380,000) |
| Increase RCMP ME’s | $ 100,000 |
| Increase RCMP Contract | $ 110,000 |
| Increase legal budget | $ 25,000 |
| Move construction of McCallum/Florence Lake Rd Improvements and Peatt Rd @ Brock Roundabout to 2020 from 2021 | $0 (this is entirely funded through DCCs) |
| Postpone Council and Staff Conferences and Training | ( $50,000) |
| Postpone Car Sharing program | ( $35,000) |
| Postpone transfer to Infrastructure Sustainability Reserve | ( $85,000) |
| Fund all capital from reserves | ($173,500) |
| Total (decrease) | ($488,500) |
With the proposed tax rate, the City will continue to maintain some of the lowest residential taxes in the region and the province for a similar sized municipality. The following table shows Langford’s residential property taxes in comparison to others in the region and similar sized municipalities throughout the province. Note that this number is indicative of the total tax bill not just the municipal portion (i.e. including Regional District, Hospital District, School Taxes, BC Transit, BC Assessment, MFA, etc).
Residential property taxes (2019)
| Municipality | 2019 |
|---|---|
| Langford | 3,030 |
| Metchosin | 3,178 |
| Colwood | 3,751 |
| North Cowichan | 3,792 |
| View Royal | 3,795 |
| Sooke | 3,818 |
| Highlands | 3,900 |
| Penticton | 4,126 |
| Vernon | 4,202 |
| Courtenay | 4,215 |
| North Saanich | 4,216 |
| Esquimalt | 4,263 |
| Sidney | 4,343 |
| Campbell River | 4,432 |
| Langley | 4,506 |
| Mission | 4,628 |
| Central Saanich | 4,773 |
| West Kelowna | 5,244 |
| Victoria | 5,574 |
| Saanich | 5,608 |
| North Vancouver | 5,899 |
| Port Moody | 6,485 |
| Oak Bay | 7,968 |
| West Vancouver | 10,416 |
Table 2 — Property tax as percent of average household income
Table 2 shows the percentage of property to average household income for all CRD municipalities as well as similar sized municipalities in BC and shows how affordable Langford property taxes are as a percentage of average household income.
| Municipality | Average Household Income | Average 2019 Property Tax | 2019 % PT to Household Income |
|---|---|---|---|
| Metchosin | 94,660.41 | 3,178 | 3.36% |
| Langford | 86,780.78 | 3,030 | 3.49% |
| Highlands | 111,819.74 | 3,900 | 3.49% |
| North Saanich | 111,589.64 | 4,216 | 3.78% |
| Colwood | 92,546.28 | 3,751 | 4.05% |
| View Royal | 90,737.88 | 3,795 | 4.18% |
| Sooke | 77,020.36 | 3,818 | 4.96% |
| Central Saanich | 93,576.88 | 4,773 | 5.10% |
| North Vancouver | 112,329.63 | 5,899 | 5.25% |
| North Cowichan | 69,321.13 | 3,792 | 5.47% |
| Mission | 84,434.39 | 4,628 | 5.48% |
| West Kelowna | 90,681.70 | 5,244 | 5.78% |
| Sidney | 68,965.71 | 4,343 | 6.30% |
| Campbell River | 69,640.89 | 4,432 | 6.36% |
| Port Moody | 100,382.71 | 6,485 | 6.46% |
| Esquimalt | 65,275.44 | 4,263 | 6.53% |
| Vernon | 64,118.45 | 4,202 | 6.55% |
| Saanich | 83,486.97 | 5,608 | 6.72% |
| Courtenay | 62,076.70 | 4,215 | 6.79% |
| Langley | 64,225.40 | 4,506 | 7.02% |
| Penticton | 58,572.24 | 4,126 | 7.04% |
| Oak Bay | 101,038.44 | 7,968 | 7.89% |
| Victoria | 57,391.49 | 5,574 | 9.71% |
| West Vancouver | 97,018.68 | 10,416 | 10.74% |
City of Langford 2020-2024 Financial Plan Bylaw No. 1894, 2020 gives authority for the City to spend for operating and capital purposes in 2020.
City of Langford Tax Rates Bylaw No. 1895, 2020 gives authority for the City to levy taxes for municipal, regional district and hospital purposes in 2020.
Council also considers the distribution of taxes among property classes with the objective of maintaining a stable and equitable burden. Council has determined that the burden on commercial properties is not competitive and has embarked on a program of reducing the commercial multiple by 0.05 each year for 10 years. The multiple has been set at 2.80 for 2020.
Options
That Council:
a. Approve the reduction of the tax increase from 3.49% to 1.90%, and
b. That Council proceed with consideration of City of Langford 2020-2024 Financial Plan Bylaw No. 1894, 2020 first, second, third readings and final adoption, and
c. That commercial class multiples in 2020 be set at 2.80, and
d. That Council proceed with consideration of City of Langford Tax Rates Bylaw No. 1895, 2020 first, second, third readings and final adoption.
OR
That Council:
a. Approve a tax increase of ___% for 2020, and
b. Direct staff to prepare the 2020-2024 Financial Plan Bylaw and 2020 Tax Rates Bylaw as per the % increase outlined in ‘a’ above and bring these two bylaws to a Special Council meeting before May 14, 2020.
Respectfully Submitted,
Submitted by:
Michael Dillabaugh, CPA, CA, Director of Finance
Concurrence
Audrey Kryklywyj, Deputy Director of Finance
Concurrence
Adriana Proton, Manager of Legislative Services
Concurrence
Chris Aubrey, Fire Chief
Concurrence
Michelle Mahovlich, P.Eng, P.Geo, Director of Engineering
Concurrence
Matthew Baldwin, MCIP, RPP, Director of Planning
Concurrence
Darren Kiedyk, Chief Administrative Officer