Revenue Lost!

I have often been criticized by the mayor and my council peers for not understanding the difference between policy and administration and told that council should not delve too deeply into the town’s finances. This hands-off attitude and abdication of financial responsibility, “we hire competent staff to look after the budget so I don’t have to”, has resulted in an under-assessment of class 2 property taxes for several years.  

Class 2 properties are owned by utilities such as BC Hydro and Telus. Residential (class 1) and small business (class 6) have had to pick up the slack by paying an estimated $320,000 in additional taxes.

Under the community charter

“In setting the tax or levy rate for class 2 property for general municipal purposes, a municipality must not exceed the greater of

• a.       $40 for each $1000 of assessed value (a mill rate of 40), and
• b.      2.5 times the rate applicable to class 6 property for general municipal purposed in the municipality for the same taxation year.” 

Last year, when I was analysing historical mill rates, I discovered that for the 5 years from 2000 to 2005 the town had set a mill rate of 40 for class 2, the maximum the town is allowed to charge. In subsequent years, 2006 to 2010, the mill rate dropped to a low of 30,  a multiple of 2.5 times the class 6 rate. 

This misunderstanding and misapplication of the maximum class 2 mill rate resulted in 8 years of lost revenue!!.  At an estimated $40,000 per year this equates to a $320,000 paid by the taxpayers of Golden that should have been paid by class 2.

I will ensure that this will be addressed and corrected when the mill rates are set for 2014 property taxes resulting in annual saving of $40,000 for residential and small business.

The opinions expressed in this blog are my personal opinions and may not represent the opinions of other Councillors nor the opinions of council.

Permissive tax exemption survey results

Should the town place a cap on permissive tax exemption grants?:

I would like to thank the 58 individuals who participated in my informal survey of opinions on permissive tax exemptions. This survey, although unscientific and representative of only a small section of the population, supports council's decision to place a cap on permissive tax exemptions for 2014.
The opinions expressed in this email are my personal opinions and may not represent the opinions of other Councillors nor the opinions of council.

Permissive Tax Exemptions 2014

In 2014 the permissive tax exemption will be capped at 1.2% of the prior year’s property taxes or $52,814. As a result some buildings that had previously been exempt form property taxes will now contribute a small portion (12.2%) of the property taxes due. 

What are property tax exemptions?

Property tax exemptions come in two types; Statutory and Permissive. 

Statutory tax exemptions are authorized by the province and are mandatory. The town has no choice but to exempt these properties from property tax. The statutory exempt properties include properties held by the province, municipalities, regional districts, libraries, hospitals, schools, cemeteries and places of worship. For some properties such as those for public worship, the statutory exemption is limited to the building and the land beneath the building, and not, for example, parking lots.

Permissive Tax exemptions are authorized under the community charter and granted annually by the town council. The authority to grant permissive tax exemptions is a policy tool available to municipalities to promote or achieve specific goals. Permissive Tax exemptions are discretionary and can be granted to a much wider range of properties including property owned by a not-for-profit corporation, property owned by a local authority, and property occupied by a not-for-profit. 

Why did council set a cap?

Permissive tax exemptions have been granted in Golden for several years and have been steadily increasing every year with currently over 30 applicants. In 2013 the town granted permissive tax exemptions totalling $58,657. This represents 1.39% of the total revenue from taxation, revenue that must be made up by increasing property taxes for the vast majority that do not enjoy an exemption. 

Council felt that, although it wished to continue supporting organizations with permissive tax exemptions because they provide valuable services to our community, capping the total amount at 1.2% of the total revenue from taxation was appropriate in the current economic climate.

Who will be affected?

The permissive tax exemption for 2014 is capped at $52,814. This represents approximately 87.7% of the total applications for permissive tax exemption received by the town. Council decided to distribute this grant proportionately to all applicants such that every applicant will now be responsible for paying a small portion (12.3%) of the property taxes due. 

A complete list of 2014 permissive tax exemptions is a matter of public record and can be obtained from the town office.

I want your opinion

I would like to get your feedback on the subject and have created a short 3 question survey. I would appreciate your time to complete the survey. Your responses will influence the way I vote at council meetings.

Click here to take the survey

Thanking you in anticipation.

The opinions expressed in this Blog are my personal opinions and may not represent the opinions of other Councillors nor the opinions of council.

What a difference a year makes

It is hard to believe that it’s now a year since I took office. It has been a generally satisfying year with significant positive changes at town hall.

 

Staffing

In the first Quarter of 2013, Mr. Allen’s resignation facilitated the promotion of Jon Wilsgard to the position of Chief Administration Officer. Jon assumed both jobs as CAO and Corporate Officer thus eliminating one position. I believe Jon is capable of becoming a first rate CAO.

Mr. Love and Mr. Smith also moved on to other communities affording Mr Wilsgard the opportunity to restructure the management team. Mr Love’s position, the manager of strategic initiatives, became redundant and he will not be replaced. The Manager of Planning position remains vacant.

The much improved staff moral under this new management team is palpable.

 

Economic development

The tripartite funding agreement for Golden Area Initiatives (GAI) comes to an end today. The disfunctionality of the GAI was recognized by both the town and the regional district and a new model of economic development needs to be established.

Bruce Fairley has stepped up to the plate and formed a committee with a project-based focus to economic development. I support this initiative and hope that in the New Year they can garner the support of the other stakeholders.

 

Financial Reporting

Many improvements have been achieved by the Chief Financial Officer in the timing and level of detail in the financial information that is now available to council to make informed decisions, and to the public in the 5-year financial plan that was given first reading on December 17^th, months ahead of last year. There is still more work to be done to improve the transparency of the information and the readability of the reports, but I am confident that this will be achieved.

 

Planning Department

With the departure of Mr. Smith and in the absence of Mr. Mirehouse the planning department is now staffed by 2 young and keen individuals whom I am hoping will present a friendly and enthusiastic face to both new and existing businesses.

With the New Year comes new challenges and opportunities

 

New Building Canada Plan

Expected to be introduced in 2014, the New Building Canada Plan is a 10-year federal grant program to help communities repair and rebuild infrastructure. How this plan is managed and how the town finances its matching contribution will be critical to its impact on the town. Chris Cochrane has identified the infrastructure in most need of attention and the NCBP will allow us to address a large portion of the town’s infrastructure deficit.

 

Borrowing Bylaw

Loan Authorization Bylaw 1326 2013 for $5 million to cover the town’s portion of the New Building Canada Fund (NBCF) grant application was given first, second and third reading at the council meeting on Dec. 3^rd 2013. The town is awaiting provincial approval, expected to be received in January 2014, before proceeding.

I am of the opinion that the town could and should fund its portion of the NBCP by reallocation of future budgeted general capital expenditure, an allocation of reserve funds, and/or reallocation of tax revenues. Town staff will be evaluating these and other alternatives in the New Year.

The borrowing bylaw will require approval from the electorate, but council has not yet decided if it will use the alternative approval process or go to referendum. I am totally against borrowing given the current state of the town’s finances and will continue to challenge the borrowing bylaw in 2014.

 

Zoning Bylaw

Reviewing sections of the zoning bylaw has been identified as a priority for the planning department in 2014. I’m hopeful that the significant barriers to development can be addressed and a made-in-Golden solution to the parking issues can be achieved. Resolving these thorny issues will be a test for the young planner in 2014.

Reserve Funds

The Finance department will undertake, as a strategic priority in 2014, a review and rationalization of the Reserve Funds. It’s not just about saving money for a rainy day, but about making the most out of the money we have.

 

Municipal Election

2014 is Municipal Election year.

I hope everyone has a happy and prosperous New Year.

Keith W Hern

The opinions expressed in this Blog are my personal opinions and may not represent the opinions of other councillors nor the opinions of council.

Borrowing Bylaw 1326 2013 Loan Authorization

At the council meeting on Tuesday, Dec 3^rd 2013, Council will consider reading bylaw 1326 2013 Loan authorization for $5 million to cover the town’s portion of the New Building Canada Fund (NBCF) grant application. I would like council to consider delaying the reading of the bylaw until after the staff has been given the opportunity to investigate alternative sources of funds to satisfy the town’s contribution under the NBCF grant. Only then will council have the data to make informed decisions on the amount and  timing of any short-term borrowing that may or may not be required.

Step 1: Reallocation from the 5-year plan capital budget

Staff should identify all of the water, sewer and road projects from the list of capital projects in the 5-year plan and determine if those projects would qualify under the NBCF. These projects could then be added to the list of NBCF projects and the capital re-allocated to satisfy the town’s contribution for the NBCF. 

Step 2: Reserve Allocation

If insufficient funds are identified in step 1, then the staff should determine if the addition of funds from the water, sewer and road reserves would be enough to satisfy the town’s contribution to the NBCF. 

Step 3: Leasing and short term borrowing

After steps 1 and 2 have been exhausted then the staff should determine how much capital could be preserved and reallocated to the NBCF by the use of leasing and short-term financing for larger capital items such as trucks, graders and plows in the 5-year budget.

Step 4: Long term borrowing

After steps 1,2 and 3 have determined how much of the town’s contribution can be funded by reallocation of funds from existing capital, council will the be able to make an informed decision as to the amount and timing of any long term borrowing to satisfy the town’s contribution under the NBCF grant application.

The opinions expressed in this Blog are my personal opinions and may not represent the opinions of other councillors nor the opinions of council.