FINANCE AND ADMINISTRATION REPORT - 2018 TAX RATE OPTIONS

2018 TAX RATE OPTIONS

RECOMMENDATION:

THAT the Committee recommend the 2018 tax rates to Council;

AND THAT a bylaw be prepared to implement the tax rates accordingly.

CHIEF ADMINISTRATIVE OFFICER’S COMMENTS:

I concur with the recommendation.

PURPOSE OF REPORT:

To consider various tax rate options for 2018 that will achieve the Financial Plan’s revenue target for municipal taxation.

TIME CRITICAL:

Legislation requires the municipality to adopt a tax rates bylaw after adoption of the financial plan but before May 15 each year. After receiving direction from Council, staff will prepare the tax rates bylaw for consideration at the April 17, 2018 meeting with adoption on May 1, 2018. This schedule will allow sufficient staff time to prepare tax notices for mailing mid-May.

BACKGROUND:

The Community Charter requires Council to consider the tax rates proposed for each property class in conjunction with the objectives and policies in its financial plan, as outlined below:

Objectives

1. To ensure property value taxes remain affordable and reasonable for services provided.
2. To maintain consistent tax increases for average property values in all property classes.

Policies

1. Regularly review the affordability of property value taxes for each property class relative to other classes.
2. Regularly review and compare the Town of View Royal’s distributions of tax burden relative to other municipalities in British Columbia.

The following charts compare key tax ratios for the Province and municipalities in the Capital Regional District for 2015-2017:

[Bar chart titled "Business/Other Tax Ratios 2015-2017" showing ratios for various municipalities including Central Saanich, Colwood, Esquimalt, Highlands, Langford, Metchosin, North Saanich, Oak Bay, Saanich, Sidney, Sooke, Victoria, View Royal, and Provincial average.]

[Bar chart titled "Recreation Tax Ratios 2015-2017" showing ratios for the same municipalities as above.]

Figure 1 2015-2017 Comparative Business and Recreation Class Ratios (Source: MCSCD)

DISCUSSION:

The following schedules are attached to this report to assist Council in determining tax rates for 2018:

• Schedule A: 2018 Net Taxable Assessments (Revised Roll) with prior year comparatives
• Schedule B: 2018 Tax Rates Analysis – Summary of impact per $100,000 assessment
• Schedule C: 2018 Tax Rates Analysis – Sample property comparatives

Schedules B and C describe the impact of the following scenarios, based on similar discussions in prior years:

• Scenario A: Even increase across tax classes – no change to tax ratios
• Scenario B: Class 8 rate equal to 2017
• Scenario C: Decrease Class 5 and Class 6 ratios to 3.1 and 3.3 respectively
• Scenario D: Increase Class 8 ratio by 10%
• Scenario E: Scenarios C and D combined
• Scenario F: Decrease Class 6 ratio to 3.3

Note that while information is provided for subsets of assessments within the residential class (single family, strata, other), legislation allows only one rate for the residential property class as a whole.

BUDGET IMPLICATIONS:

The tax rate scenarios presented on Schedules B and C are based on raising sufficient tax revenue to meet the financial plan’s 2018 target of $8,147,788. During the 2018 budget discussions, Council approved the financial plan based on a 0.92% total tax rate increase after factoring in the additional revenue from new construction and non-market change assessments. These projections were based on BC Assessment’s Completed Roll assessed values for View Royal. On March 29, 2018 BC Assessment issued the Revised Roll assessments, and as a result of increases in both market and non-market assessed values, the overall increase required to meet the financial plan target is 0.71%. Specific properties owners will experience this increase differently to the extent that the change in their property assessed value differs from the average change in total assessments.

RECOMMENDATION:

THAT the Committee recommend the 2018 tax rates to Council;

AND THAT a bylaw be prepared to implement the tax rates accordingly.

SUBMITTED BY: D. Christenson, Director of Finance

REVIEWED BY: K. Anema, Chief Administrative Officer