Humble Pie

There come times in everyone's life when "humble pie" is the only item on the menu. Today I'm staring that menu in the face. I've learned this morning that Schedule 'E' of the staff report to Council regarding the ACS Housing Proposal is in fact INCORRECT! Whereas we were led to believe that the properties on the NW corner of Gladys and George Ferguson Way are in the C7 zone, they are in fact outside that zone.

I offer my sincere apology to the public for misleading them, and in particular, I apologize to Paul MacLeod and Tina Stewart, of the ADBA, for any embarrassment I may have caused them through the publishing of my article on this matter.

As a former history teacher and one that always exhorted his students to have their information corroborated, I have failed to follow my own advice. Lesson learned - pie eaten!

Is Integrity of the C7 Zoning the Issue?

The ACS Housing proposal has generated much discussion, but at the same time, there still appears to be a measure of cloudiness around two bylaws:

1. Bylaw No. 1699-2007 – Abbotsford East Downtown Business Improvement Area Bylaw (BIA), and

2. Bylaw No. 1150-2002 – The C7 Zoning Bylaw

The first relates to a Grant provided, by the City, to the ADBA for specific purposes related to the improvement of the Downtown area. This Grant is tied to the property taxes of member businesses, and is set as a 20-year agreement, which can only be set aside by mutual consent or by a violation of the terms by one of the two parties.

The second bylaw established a new commercial zone, which identifies a long list of “Permitted Uses”, which all other zones would have as well. The ACS Housing project (parts) does not fall within that list of Permitted Uses. Zoning of any kind and in any jurisdiction is subject to change at any time, due to demographic changes or growth, to name only two. Councils may not fetter the freedom of future Councils to make decisions regarding zoning. Such decisions would be regarded as illegal and unsupportable in a court challenge.

This then brings me to the crux of the ADBA’s position. The paramount argument made, by the ADBA, against a zoning variation to pave the way for the ACS proposal, is that to do so would threaten the integrity of the C7 Zone, which was implemented in 2002.

Firstly, I would point out that, contrary to what has been stated, there is no “agreement” or “commitment” to the C7 Zone, because such an agreement would illegally fetter subsequent Councils in their discretion.

My second point, perhaps, raises the most troublesome problem. Both the Executive Secretary, Tina Stewart, and another member of the ADBA Executive have indicated separately, to me and to Councillor Braun, that the City-owned property on the NW corner of Gladys and George Ferguson Way(Hazel St. on map) would be acceptable for this housing project. Reference to the attached map will show that this property not only resides within the C7-zoned boundary, but is actually in closer proximity to the hub of the Downtown shopping district. Why would this location not endanger the integrity of the C7 Zone when the other would?

Assessed Value, Tax Rates, and Total Tax Revenue

Too many people, incorrectly, use "Tax Rates" as a measure of comparison from one local government to another. Tax rates are only a tool, albeit an important one, to ensure the required revenue to meet annual budgets is met.

The following explanation from Corporate Services, City of Abbotsford, will hopefully clarify this subject for those still unsure:

 

Comparing Tax Rates

Tax rates are not a direct indicator of comparative tax costs between cities. They must be interpreted in conjunction with average assessed values, which vary significantly between cities. Without that reference point, they are meaningless.

(Having said that, however, if rates are to be used as a comparator, one must include the fact that, since 2005, Abbotsford's tax rate increased from 4.83072 to 4.9075, an increase of 0.33%!)

Comparing Total Taxes and Charges on Representative Properties

The Province of BC publishes a listing of “Taxes and Charges on a Representative House”. This is the closest data comparison available to compare relative tax burdens between cities for residential properties. It shows what a typical house in each city pays annually in total taxes and charges (both municipal and non-municipal).

Assessed Values are a Useful Tool for Allocating Tax Charges

Assessed values are a good tool for allocating the city’s tax requirement across properties. More expensive properties (those with conceivably greater ability to pay) pay higher taxes. Less expensive properties (those with conceivably lesser ability to pay) pay lower taxes.

Assessed values are not a good tool for dictating the city’s total tax requirement. Assessed values have virtually no relationship to municipal expenses, so it follows that they should not drive tax revenues. Why, for example, should the city increase its tax revenues by 10% in a given year, simply because land values have risen? Similarly, does the fact that Abbotsford has lower land values than Vancouver or Surrey automatically mean that it has lower costs of doing business? With very limited exceptions (e.g. land purchase for road right of way), the answer is no.

 

How Abbotsford Calculates Tax Charges on Specific Properties

1. Council approves a total tax revenue requirement, separate from any market movement in assessed value (which has no impact)

2. The tax rate is set such that the total required tax revenues will be collected from properties, given their current assessed values. (Council has the option to choose to allocate tax charges in varying proportions to each class of properties.)

3. The total tax charge per property class is allocated to specific properties in proportion to their relative assessed values.