SUPPORTS ITEM NO. 2
CS&B COMMITTEE AGENDA
OCTOBER 19, 1995
ADMINISTRATIVE REPORT
Date: August 8, 1995
TO: Standing Committee on City Services and Budgets
FROM: Director of Finance
SUBJECT: Citizens Advisory Group on Property Taxation
RECOMMENDATION
A. THAT Council approve the Terms of Reference, the Objectives
and the Work Plan for a Citizens Advisory Group on Property
Taxation as set out in the body of this report.
B. THAT Council approve the membership criteria and
participation proposal around the formation of a Citizens
Advisory Group on Property Taxation as set out in the body
of this report.
C. THAT Council instruct staff to report back on the names of
the nominees for membership on the Citizens Advisory Group
pursuant to Recommendation 'B', and as advanced by the
respective community associa-tions, for consideration and
approval.
GENERAL MANAGER'S COMMENTS
The General Manager of Corporate Services RECOMMENDS approval of
A, B and C.
COUNCIL POLICY
Council policy is to keep property taxes affordable by follow-ing a
practice of holding year-over-year tax increases at inflationary
levels.
Since 1983, Council has maintained relatively constant taxation burden
sharing ratios among the property classes, allowing adjustments to
those burden ratios resulting from new construction and zoningchanges.
In 1992, Council folded the residential, recreational and farm classes
together to establish a common tax rate for billing purposes, subject
to any tax limitation measures applicable to the residential class.
This change produced a very slight shift of taxation burden onto the
residential class.
In 1994, and again in 1995, Council approved a $3 million shift of the
City's general purposes tax burden from non-residential to residential
properties as a move in the direction of reduc-ing the share of City
taxes borne by commercial properties.
PURPOSE
The purpose of this report is to recommend the establishment of a
standing Citizens Advisory Group on Property Taxation, following the
work of the City's Task Force and Advisory Panel on property taxes.
The establishment of this group will continue Council's policy of
having community perspectives represented in, or presented alongside
of, proposed changes to existing taxation policy, especially if those
changes have the potential to impact the tax burden sharing ratios for
the City's annual general purposes tax levy among the property
classes, and/or the amounts levied on individual properties.
BACKGROUND
On April 13, 1995, KPMG Management consulting submitted its
Consumption Study report to Council, accompanied by a staff report
from the Director of Finance and a report from the Chair of the
Advisory Panel. After hearing a number of delegations on the
consumption report, Council approved the following recommendations.
- That Council receive the report prepared by KPMG Management
Consulting on the consumption of the City's tax-supported
services for information.
- That Council instruct the Director of Finance to report back on
short-term taxation policy measures to be implemented for the
1995 taxation year that specifically address the issues of a
further shift in tax burden from commercial properties to
residential properties, and an appropriate mechanism to phase-out
the property tax limitation program on these properties.
- That Council instruct the Director of Finance to report back
later in the year on a longer-term taxation policy that takes
into account the recommendations and findings of the consumption
study, along with the recommendations of the Advisory Panel
arising from the consumption study;
Further that the report back include the following information:
- impact on taxes due to the establishment of utility
operations for garbage collection, recycling and disposal
(solid waste) and for sewerage collection, transmission and
treatment (liquid waste).
- That Council consider retaining the voluntary services of the
members of the Advisory Panel in the form of a citizens standing
committee on property taxes, for future work on several of the
property tax items identified in the consumption report and the
Property Tax Task Force report submitted to Council in April,
1994;
Further that the Director of Finance be instructed to report back
on the Terms of Reference, including future composition over
time, Objectives and a Work Plan for a citizens standing
committee on property taxes.
- That the report back on the longer-term taxation policy include
the following information:
- taxation policy based on benefits, services and ability to
pay;
- tax write-off opportunities; and,
- differential tax rates within classes of property.
This present report is another step along the road towards a new
taxation policy for the City of Vancouver.
DISCUSSION
As mentioned above, Council instructed staff to report back on the
creation of a Citizens Advisory Group on Property Taxation matters.
The following items need to be confirmed in that regard.
1. Terms of Reference
The following terms are proposed.
- to comment/report to City Council from time to time on property
taxation policy matters that are before Council for
consideration. The Group will serve primarily as a means of
providing community input into taxation issues, and as such will
not be expected to undertake/provide detailed technical analysis.
- to schedule and undertake the items of work identified in the
Work Plan with the technical assistance of the Director of
Finance and staff.
- to meet on a regular basis or at the call of the Chair.
- to decide administrative matters such as appointment of the
Chair, meeting protocol (dates and times) and other related
items.
- to recommend to Council proposed changes in the Terms of
Reference, the Objectives, or the Work Plan that would facilitate
the operation of the Advisory Group.
2. Objectives
The following objectives are proposed.
- participate as a group in the review of the work items identified
in the Work Plan and provide recommendations for incorporation
into staff and/or Advisory Group reports to Council.
- communicate the substance of Council decisions on taxation policy
and other related matters back to their respective
community/business associations in order to promote a greater
community awareness on property taxation matters.
- submit an annual status report to Council with respect to
progress made on Work Plan items and accomplishments during the
reporting period.
3. Membership
(a) Association Participation
We propose that the initial membership on the Advisory Group be
comprised of the 14 ratepayer and business associations formerly
represented on the Advisory Panel (see Appendix A), including the
individuals who represented these associatios. Having those former
members serve as the initial members of the Advisory Group would
reduce the start up time that the new group would need to familiarize
itself with the municipal property assessment and taxation field, and
the volumes of material that were compiled from the previous work in
those areas.
We believe that associations outlined below represent and reflect a
good cross-section of community interests, while keeping the size of
the Advisory Group to a reasonable number of participants. Council,
however, may wish to increase the size of the Group by another
residential representative to balance out the representation between
business and residential interests or, alternatively, replace the
academic association with another residential association. We also
note that a condition of membership on the Advisory Group requires a
member to be a residential property taxpayer in the City as well.
Association Affiliation
Land Property Tax Association, B.C. Chapter Business
Angry Taxpayers Action Committee Business
Building Owners and Managers Association Business
Industrial Landowner Business
Vancouver Board of Trade Business
Retail Merchants Association Business
Rental Housing Council of B.C. Business
UBC Faculty of Commerce & Business Admin. Academic
Grandview-Woodland Area Council Residential
Dunbar Residents Association Residential
Fairview Slopes Association Residential
Joyce Area Planning Committee Residential
Tenants' Rights Action Coalition Residential
Kerrisdale/Granville Homeowners' Association Residential
There are at least 25 other residential ratepayer groups in the City
that could be asked for nominees to increase the residential
participation by one association. These groups could nominate their
representatives and Council could make a direct appointment from the
list of names, or make the selection through a random draw, using
whichever method reflects Council's preference.
(b) Membership Criteria
Thefollowing criteria are proposedfor membership onthe Advisory Group.
- work will be voluntary and without compensation.
- one member per association.
- all members will be residential property owners in the City.
- Council will review the general membership on an annual basis and
make changes accordingly.
- Council will fill interim vacancies to maintain an appropriate
balance of community interests, with nominees solicited from the
community associations expressing an interest to participate.
(c) Internal Support
During the next several years the internal resources in Finance will
be stretched to accommodate the changing face of govern-ment at City
Hall arising out of our process and service improvement work. As a
result, we expect that the amount of internal resources available to
the Advisory Group will be somewhat diminished, although we expect to
provide the basic support noted below.
- a Finance staff member will attend all meetings, take minutes,
arrange meeting facilities, provide Work Plan materials, and act
as a liaison to Corporate Services and other Service Groups,
Departments, Boards and Council as required.
4. Work Plan
As noted above, Council instructed the Director of Finance to report
back later in the year on a longer-term taxation policy that takes
into account the recommendations and findings of the consumption
study, and the recommendations of the Advisory Panel arising from the
consumption study. Council further indicated that this report should
also address the following issues:
- impact on taxes due to the establishment of utility operations
for garbage collection, recycling and disposal (solid waste) and
for sewerage collection, transmission and treatment (liquid
waste);
- taxation policy based on benefits, services and ability to pay;
- tax write-off opportunities; and,
- differential tax rates within classes of property.
In terms of the foregoing instruction, the proposed work plan for the
Citizens Advisory Group would include the items listed below.
- investigation of the proportional share of the City's general
purposes property taxes borne by the residential and non-
residential classes, as a continuation of the work initiated
through the Consumption Study. This investiga-tion may lead to a
rate-of-adjustment policy recommenda-tion regarding a shift of
tax burden in future taxation years.
- investigation of the tax rate and tax rate ratio presently in
effect in the light industrial class as and between the tax rate
for the commercial class. The review would also include the
issue of tax rates and ratios among all the non-residential
property classes.
- review of staff reports dealing with the property tax impacts
associated with the proposed implementation of a solid waste and
sewer utility billing system.
- review of staff reports dealing with the property tax provisions
of the Vancouver Charter with a view to reducing the types of
properties that now quality and enjoy tax exemption.
- review of staff reports dealing with the new Vancouver Charter
provisions for heritage properties and proposed tax exemptions.
- ongoing review of staff reports to Council dealing with property
tax policy matters.
ACCOMPLISHMENTS
To date, the following recommendation items arising from the work of
the Task Force and the Advisory Panel (Consumption Study) have been
completed to the extent practicable.
- a $3 million shift of the City's general purposes tax levy from
commercial (Class 6) to residential properties in 1994 to
nominally adjust the tax burden ratios.
- the continuation of a tax capping mechanism for commercial and
residential properties in 1994 to dampen tax shifts on individual
properties within their respective classes caused by uneven
assessment changes.
- the introduction and application of three-year land averaging for
residential and commercial properties in the 1993, 1994 and 1995
taxation years.
- a $3 million shift of the City's general purposes tax levy from
non-residential properties (Classes 2, 4, 5, and 6) to
residential properties in 1995 to further adjust the tax burden
ratios.
- the elimination of the tax capping program on residential
properties in 1995 and the introduction of a program to phase-out
tax capping on commercial properties. The phase-out program will
be continued in subsequent taxation years.
- continuing work on broadening the City's revenue base (e.g.,
Corporate Sponsorships) to reduce the City's reliance on property
taxes.
- a redesign of the City's tax bill to more clearly separate
municipal, regional and provincial tax levies and the
accountability for such.
- a developing corporate communication plan to build public
awareness of the value received for its property taxes.
- a review of the Assessment Notice and the communication program
around the assessment process with the BC Assessment Authority.
We have established a practice of inserting a notice in the
City's mailing package for the application of a Business License
to inform business tenants that the business property assessment
is available from their landlord on request. We have received
positive feedback on this initiative.
- a request to the Province to remove School Taxes from property
taxes which was met with a negative response. We will continue
our work in this area.
- staff participation with the Federation of Canadian
Municipalities (FCM) to encourage the Federal Government to pay
property taxes (grants-in-lieu) on the basis of the assessment
values and tax rates effective in the respective municipalities.
We will continue our work in this area.
- Council, on many occasions, has written to both senior levels of
government requesting appropriate cost-sharing on major capital
projects arising from mandated standards, as well as requesting
appropriate cost-sharing on City programs and services which
would qualify in whole or part for senior government support. We
will continue our work in this area.
CONCLUSION
The advice and assistance the City has sought from past advisory
committees/panels on property taxation matters has been well-received
by Council in terms of establishing new taxation policy directions for
the City of Vancouver. This report recommends a continuation of that
citizen involvement through the creation of a standing Citizens
Advisory Group on Property Taxation, with appropriate terms of
reference and a corresponding work plan.
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APPENDIX A
MEMBERSHIP OF PROPERTY TAX ADVISORY PANEL, 1994/1995
Mr. Michael Lount................................ Land Property Tax Association,
B.C. Chapter
Mr. Douglas Sauer.............................. Dunbar Residents Association
Ms. Alexa Allen................................... Angry Taxpayers Action
Committee
Mr. Tom Shiffman................................ Retail Merchants Association
Mr. Richard Anderson.......................... Building Owners and Managers
Association
Ms. Janet Stetham............................... Fairview Slopes Association
Professor Robert Clark......................... Vancouver Board of Trade
Mr. Eric Watt...................................... Kerrisdale/Granville
Homeowners' Association
Mr. Ed DesRoches............................... Angry Taxpayers Action Committee
Mr. Edward Whitlock............................ Rental Housing Council of B.C.
Professor Stan Hamilton...................... UBC Faculty of Commerce & Business
Administration
Mr. Don Van Dyke................................ Joyce Area Planning Committee
Ms. Merrilee Robson............................. Grandview-Woodland Area
Council
Mr. Mike Walker................................... Tenants' Rights Action
Coalition
Mr. Don Atkins....................................... Industrial Landowner
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