Sunday, January 09, 2011

Once and for all, Amalgamation

The 2011 Property BC Assessment notices are in and property values are up as much as 20 percent on the North Shore.

City of North Vancouver Mayor Darell Mussatto says, the increase is both good news and bad news for local residents - depending on whether they already own property or not.

For those who don't, "It's now eight percent more difficult to get into the housing market," said Mussatto in Friday's North Shore News.

For those who do there really isn't any good news either. The Assessment is key in determining local property taxes each year so most homeowners will see an increase for 2011.

A recent report showed the North Shore local governments are some of the highest spenders of the tax money we entrust to them as compared to other B.C. municipalities.

Is it high time to re-visit the issue of Amalgamation of the City and the District? Is it one way to potentially reduce or curb the upward spiral of municipal taxes we seem to be facing in our future?


Barry Rueger said...

A recent report showed the North Shore local governments are some of the highest spenders of the tax money we entrust to them as compared to other B.C. municipalities.

A rather sweeping statement since it doesn't address the quantity and quality of services received.

I'm more interested in knowing what our per capita spending is on transit, roads, recreation etc compared to similar sized cities.

We may pay more taxes than they do in Enderby or Yahk, but that really doesn't mean much.

John - how do you expect that amalgamation would help to reduce assessments?

John Sharpe said...

I didn't say it would reduce assessments but, seeing the trend and projections for future local tax increases I suggest it as a way to potentially curb over all tax increases. Some argue there are duplications of services and larger than needed payrolls.

Tax increases are obviously relative as you say. The report that came out said the North Shore governments were some of the biggest spenders to comparible municipalities, not Spuzzum, Yakh or Enderby.

I know Mayor Walton came out in defense of that report.

John Sharpe said...

Maybe we should try to dig up the report.

Anonymous said...

Amalgamation would have nothing whatsoever to do with reducing assessments as assessments are property values. Your current assessment is the fair market value of your property as of July 1of last year.

The mill rate set by Council times your assessment = your municipal property tax. So for my money the mill rate, as the multiplier, is the more important figure. Your assessment can go down and your property tax can go up if the mill rate is increased.

But back to amalgamation. If it ever happened, the unionized workers would be least impacted while management, administrative staff and elected officials would be the most impacted.

After all, you still need sewer workers, road maintenace, parks staff, garbage pickup, firefighters, building, plumbing, electrical, bylaw inspectors etc. etc. However, the duplication of staff to administer the workers could be reduced, purely administrative work such as finance, human resources, planning could likely be downsized as could the number of elected officials, and capital costs of 2 City Halls, 2 works yards etc.

So, yes John, I agree that amalgamation would produce some efficiencies.

Lyle Craver said...

I agree amalgamation would be a positive social good to the taxpayer and am distressed to see zero mention of the possibility in the District OCP discussions.

The assumption at District Hall (which I've heard directly from Councillors) is that the status quo is set in stone forever which seems a bit much for a document that is supposed to be a guide for 20 years!

Even something as basic as 'to be open to the possibility of CNV / DNV amalgamation should the opportunity arise' would be something I'd love to see in the OCP.

By the way for those unfamiliar with the nuts and bolts of municipal taxation, keeping the mill rate the same from the previous year isn't a 0% tax increase! In fact in any year where the overall tax roll increase is lower in percentage terms than the real estate market the mill rate _should_ go down!

Anonymous said...

Who are you people and where do you come from?

Anonymous said...

So, whoever is in charge of this blog and its re-birth, any chance we can get some info on what the plans for it are? Is it back, or will it continue to be on or off line, depending on someone's mood of the day? Are there posting guidelines? Is there still the 24 hour posting courtesy? What's up, tiger lilly?

Anonymous said...

There are 3 amalgamations that should be done immediately. First amalgamate the fire departments and create a north shore fire department. Amalgamate the recreation centers. Finally amalgamate the libraries. This will reduce the fat by at least 2/3 and transfer the saving to providing the services that the constituents on the North Shore deserve.

John Sharpe said...

Anon 4:27,

Yes I would respectfully request the guideline for a 24 hour posting courtesy; A new post should not go over the current until after midnight of the next day.

Guidelines for main posts were once per week per registered user. Technically you if you posted on Saturday you could main post again as soon as Sunday but, after midnight.

Anonymous said...

From the topic post... "The Assessment is key in determining local property taxes each year..."

It's a component but not the key. It works like this:

1. All Municipal Directors, Police Superintendents/Chiefs, Chief Librarian, and various significant cost centre administrators are directed to submit their Capital and Operating proposed budgets for the following year to the municipal Financial Services Dept.;

2. Budgets are reviewed line by line, some costs are reduced or eliminated at the senior staff level;

3. Preliminary budgets, which include additional budgets for reserves, major projects etc. are produced by Finance for a first review by Council. This raw budget also has a preliminary average household tax implication.

This tax number is arrived at by taking the projected taxable property assessments x the current year mill rate to equal next year's projected budget total.

Then additional budget reviews are undertaken with senior staff and council, council themselves, public input sessions which go on for some weeks into the actual year that the budget is going to apply to.

Special interest delegations come before council to cheerlead their own expenditures.

Some show up to insist on budget cuts to various projects, divisions, services etc.

Industry reps show up to complain about their tax burden and recommend shifting a portion of their load onto the residential property owner.

Council works with stakeholders to refine the budget. By this time the actual assessments are out so the budget implications are more clear and the mill rate can be adjusted up or down, if necessary, to equal the required municipal funding.

There's often some last minute politicking to slip in or eliminate specific expenditures.

Finally a tax number (often an increase) is reached by adjusting the expenditures (the assessments are regarded as more or less a fixed number) and the attention is centred on the mill rate/expenditure adjustments.

The penultimate all-in budget is divided by the mill rate (which can be adjusted up or down) to fund the budget.

This budget and associated tax burden is put to council for a vote. They can accept it or send it back for further revision.

The process cannot go on indefinitely as the Provincial gov't sets a spring date by which all municipal budgets must be concluded. Failure to do so may result in the Provincial gov't taking over the financial affairs of the delinquent jurisdiction.

Et voila. Funds are appropriated through local taxation to provide the goods and services that the majority of the taxpayers expect.

The foregoing is a bit of a simplification but it outlines the main path of annual local gov't budget/taxation preparation.

Lyle Craver said...

Yup - and of course assessments (which are what are happening at this time of year theoretically on the basis of values as of July 1st though it looks like they took into account a July 15th sale on my brother's block) are a key part of setting the tax levy since your presentation details how MUCH will be collected while the sum total of the tax roll determines what the mill rates will be.

I am firmly of the opinion that property value for commercial and industrial properties is a dysfunctional system - if I invest $100k in new equipment and increase my sales by $300k as a result my ability to pay tax is also increased.

If my next door neighbor sells for 50% above assessed value to an offshore investor my ability to pay tax is not affected at all.

Nevertheless under the existing system the latter will raise my taxes while the former will not - at least not at the municipal level.

Personally I'd favor eliminating the municipal levy on commercial and industrial properties in return for a higher corporate income tax rate with the rate to be determined in some kind of revenue neutral way.

Fairer and in the long run simpler.

Lyle Craver said...

Concerning amalgamation, I attended one of those District OCP meetings before Christmas and for those not familiar with them these meetings always have a public feedback form.

In one of these meetings the question was to finish the phrase "In 2030 my community will be a better place to live because..." which I finished with "because City/District amalgamation took place 15 years ago and we are now enjoying the economic benefits resulting from that!"

Lyle Craver said...

Here's a thought experiment for you all: it's now November 2011 and there is a candidate for City Mayor running against Mayor Mussatto who differs from his platform strictly on being 125% pro-amalgamation.

How do you think such a candidate would fare? Win? Lose? Lose Badly?

What do you think?

Don McBain said...

Good thought experiment Lyle, but a lot can change between now and November.

Anonymous said...

I think basically the tax payer is screwed. Take for instance the Lonsdale Energy Corporation. Here is a market that was created by passing a bylaw. The city creates a corporation called the Lonsdale Energy Corporation. It is heavily subsidized by the tax payers of the city of North Vancouver by providing office space, phones, computer equipment, software, automobiles, support staff and who knows what else. It seems that the current mayor and council care little at providing services and have instead become a charity for business. Will I now receive a tax receipt for charitable contributions that the city has taken under the guise of taxes?