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City will look to increase property taxes on top of BC Assessment increased assessment

Review and analysis of the 2017 completed assessment roll indicates that the assessed value of residential properties in Grand Forks has increased an average of 4.08 per cent due to market changes.

Grand Forks taxpayers are getting hit with a double whammy this year.

City council is considering a 3.5 per cent increase for property taxes — to be voted on in earnest March 27 — in addition to a 4.8 per cent increase in property values from B.C. Assessment.

Council voted on an increase of 3.5 per cent — $125,062 — on top of the previously proposed $3,573,211, for total property tax revenues of $3,698,273. But it did not come without much debate, and the motion was not unanimous.

Coun. Julia Butler contended that the city’s asset management policy says it could only increase taxes two per cent over the consumer price index, which works out to 3.5 per cent.

But because of the increased assessments the city has had from B.C. Assessment a lot of the property values have gone up in the city, she added, that the actual increase the city is realizing already in taxes is 4.08 per cent, meaning a tax increase of $163,000.

“Because we are already seeing a 4.08 per cent increase in our gross revenue from property taxes, I don’t feel comfortable increasing it another 3.5 per cent on top of that,” she said. “I would be favour of keeping the rates where they are.”

Review and analysis of the 2017 completed assessment roll indicates that the assessed value of residential properties in Grand Forks has increased an average of 4.08 per cent due to market changes, plus a further approximately three per cent overall as a result of the desktop review process recently conducted by B.C. Assessment, read a city staff report to council.

City chief administrative officer Doug Allin said the Asset Management Financial Plan Bylaw outlined that the city should reach 50 per cent of its asset replacement. The city was currently only at 44 per cent.

“The windfall we will realize as a result of property taxes and the B.C. Assessment rate going up will allow us meet that objective,” he said. “If you hold the line now you won’t reach your objective and you are so close to the 20-year plan.”

Coun. Christine Thompson agreed.

“If we don’t continue to increase our taxes somewhat, we are going to keep going down the hole, instead of trying to have the money there to do the upgrades required, to have some money we can put away into capital for the rainy day fund,” she said.

“I think we are going to get some flack for it, but I think we really have to be able to move forward so our community can. If we don’t start to put our money into the repair of our assets, we are hooped.”

Mayor Frank Konrad said no one wants taxes increased, but it was a very real possibility that assessments will go down next year.

“So what kind of tax increase would we be looking at then, which would make matters worse?” he asked.

Butler said property values are going through the roof in most areas, but Grand Forks was on the low end of that spectrum.

She felt the city could tighten its belt in a few different areas to save the pennies it needs to still fix the roads and whatever needed to be done, but to cut back extra and pass savings on to the taxpayers.

Coun. Chris Hammet argued that tax increases were not done in previous years to build the asset plan — which helps fund the repair of roads and infrastructure — but now council has gradually built it up.

“Now we are almost there and if we can just take a bit more of a step and then we can maintain,” she said.

Konrad said the scenario of two taxation increases was very beneficial to the city because now it only has to implement a minimal tax increase, and the city “was fortunate” that assessments went up and it helped the municipal bottom line.

“But, having said that, if it goes down next year or it drops, then we have to increase our percentage, which then we will be under bigger scrutiny from the taxpayers,” he said. “So, while it’s going good, let’s not go and fix it.”

The motion to increase property taxes by 3.5 per cent passed, with Butler and Coun. Colleen Ross voting against the increase.

Road map to fiscal freedom

Sections 165 and 166 of the Community Charter require a municipality to adopt a five-year financial plan each year, before the annual property tax bylaw is adopted, and to include public consultation as part of the process prior to adoption of the financial plan.

A series of four workshops, open to the public, were held in Council Chambers on Jan.

16 and 30, and Feb. 6 and 14, in which the capital and operating budgets for 2017 were presented and discussed.

The financial plan for 2017-2021 was presented for review and discussion at a public workshop on Feb. 27.

At the Feb. 27 workshop, city staff presented council with a draft financial plan which included an increase of tax revenues of $162,128 from 2016, for total 2017 property tax revenues of $3,573,211.

This amount was determined by applying 2016 tax rates to the 2017 completed assessment roll, and thus represented an increase in tax revenues attributable to changes in property values and new construction.