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Bylaw No. 3213-2021

Five-Year Financial Plan Bylaw, 2022-2026

Consolidated and printed by authority of the Corporate Officer under section 139 of the Community Charter. Includes amendment bylaw 3258-2022 . Last amended May 9, 2022

Contents
 1 Interpretation
 2 Objectives and policies
 3 Statutory requirements
 4 Funding sources
 5 Distribution of property taxes among property classes
 6 Permissive tax exemptions, including revitalization tax exemptions
 7 Revitalization tax exemption programs
 8 Proposed funding sources, expenditures and transfers to or between funds

The Council of the City of Abbotsford, in open meeting assembled, enacts as follows:

Interpretation

1   The Interpretation Bylaw applies to this bylaw.

Objectives and policies

2   Sections 3 to 7 sets out the objectives and policies of the City for the years 2022 to 2026, inclusive, in relation to the following:

(a) the proportion of total revenue that is proposed to come from the following proposed funding sources:

(i) revenue from property value taxes;

(ii) revenue from parcel taxes;

(iii) revenue from fees;

(iv) revenue from other sources;

(v) proceeds from borrowing;

(b) the distribution of property value taxes among the property classes that may be subject to the taxes;

(c) the use of permissive tax exemptions.

Statutory requirements

3   In accordance with Section 165(3.1) of the Community Charter, the City is required to include in the Five-Year Financial Plan, objectives and policies for each of the following:

(a) the proportion of total revenue derived from each of the funding sources described in Section 165(7) of the Community Charter;

(b) the distribution of property taxes among the property classes;

(c) the use of permissive tax exemptions, including revitalization tax exemptions, as detailed in Part 7 Division 7 of the Community Charter.

Funding sources

4   (1) Subject to subsection (2), the following objectives and policies apply with respect to funding sources:

(a) new development should substantially pay for the increased infrastructure required to service it;

(b) the cost of services used by specific users should be recovered from those users, rather than by a general tax levy to all property owners, where possible;

(c) user fee rates should remain competitive with neighbouring jurisdictions, where appropriate;

(d) the proportion of total revenue proposed to be raised from each funding source in 2022 is as set out in Table 1;

(e) property taxes form the greatest proportion of revenue based on the following features:

(i) property taxation is simple to administer and fairly easy for residents to understand;

(ii) property taxation offers a stable and reliable source of revenue for services that are difficult or undesirable to fund on a user-pay basis, such as general administration, fire protection, police services, library services and road maintenance;

(f) user fees and charges form the second largest portion of planned revenue based on the following features:

(i) user fees and charges apportion the cost of a service to those using it;

(ii) many services can be measured and charged on a user-pay basis;

(iii) fees and charges can be easily administered for services including water and sewer usage, building permits, business licenses, and sale of services.

(2) It is recognized that because these objectives and policies may at times conflict in specific circumstances, it may not always be possible to simultaneously satisfy all of these principles.

Table 1: Planned Sources of Revenue for 2022

Consolidated

Revenue Sources

% of Total Revenue

Dollar Value

(in thousands)

Municipal assessment taxes

51.5%

$167,515

Fees and charges

23.0%

$74,997

Developer charges earned

3.0%

$9,813

Contributions from other governments

2.8%

$9,230

Government Grants

14.2%

$46,084

Rent

1.8%

$5,882

Interest and penalties

2.2%

$7,016

Other sources

1.5%

$4,918

Total

100.0%

$325,454

B/L 3258-2022

Distribution of property taxes among property classes

5   The following objectives and policies apply with respect to the distribution of property taxes among property classes:

(a) tax distributions should be set so as to attract commercial and industrial development in an effort to maintain and strengthen the financial health of the City, and to ensure the City's economic and employment base can keep pace with population growth;

(b) the financial planning process will determine the total increase in property taxes required from all property classes, excluding new growth;

(c) the total taxable assessment excluding growth, as determined by BC Assessment, will affect the tax rate and resulting tax rate ratios required to achieve the revenue requirement;

(d) the planned distribution of property taxes among the property classes is out in Table 2;

(e) the residential property class should provide the largest proportion of property tax revenue because this class is the largest portion of the assessment base consuming the majority of City services.

Table 2: Planned Distribution of Municipal Taxation for 2022

Property Class

% of Total

Property Tax

Dollar Value

(in thousands)

1 Residential

60.3%

$101,012

2 Utilities

5.1%

$8,543

3 Supportive Housing

0.0%

$0

5 Light Industry

4.8%

$8,041

6 Business and Other

27.6%

$46,234

8 Recreation/ Non-profit

0.1%

$168

9 Farm

2.1%

$3,518

Total

100.0%

$160,399

Permissive tax exemptions, including revitalization tax exemptions

6   (1) The City recognizes the significant value of volunteers, volunteer groups and agencies to the spiritual, educational, social, cultural, and physical well-being of the community.

(2) Permissive property tax exemptions are a means for council to support organizations within the community that align with council’s strategic goals and objectives.

(3) The City provides permissive tax exemptions to properties used by places of worship, not-for-profit organizations, local authorities, athletic or service clubs, and independent schools.

(4) Subject to subsection (5), the actual municipal tax revenue foregone in 2021 and the estimated municipal tax revenue to be foregone in 2022 as a result of permissive tax exemptions are as set out in Table 3.

Table 3: Municipal Tax Revenue Foregone

Exemption Category

2021 Actual

2022 Estimated

Permissive Tax Exemptions

Places of Worship

$894,800

$894,800

Not-for-Profit Organizations

$570,700

$584,800

Local Authority

$287,300

$287,300

Athletic or Service Clubs

$362,100

$345,400

Independent Schools

$4,300

$4,300

Revitalization Tax Exemptions

Revitalization

$32,100

$29,500

Total

$2,151,300

$2,146,100

(5) The extent of permissive tax exemptions approved is dependent on the annual budget set by council, which may, at its discretion, cancel any or all permissive tax exemptions within a given year, or place a cap on the dollar value of exemptions granted on individual properties in any one or all of the above categories listed in Table 3.

(6) The City's general eligibility criteria are as follows:

(a) the applicant must qualify under the Community Charter as a

(i) local authority,

(ii) independent school,

(iii) place of worship,

(iv) charitable, philanthropic or other not for profit organization, or

(v) athletic or service club or association;

(b) the applicant’s objectives must align with council’s strategic goals and objectives;

(c) the applicant and registered owner of the subject property, where applicable, must be in compliance with City policies, plans, bylaws, and regulations including, without limitation, with respect to. business licensing and zoning;

(d) the applicant must be liable for payment of property taxes in respect of the exempted portion of property.

(7) Despite subsection (6), the following organizations are exempt from property taxes:

(a) veteran services;

(b) local authorities;

(c) City-owned golf courses;

(d) City-owned property leased to non-profit organizations or athletic or service clubs where the lease provides that the City is responsible for property taxes;

(e) property gifted to the City.

(8) The City may adopt policies to provide further guidance regarding the applicability of category-specific eligibility criteria for permissive tax exemptions.

(9) Nothing in this section affects council’s discretionary authority to exempt any portion of the land or improvements of a property that does not otherwise meet the permissive tax exemption criteria set out in this section.

Revitalization tax exemption programs

7   (1) Revitalization tax exemptions exempt a property from municipal property value taxes only and are phased out over five years for the Abbotsford Downtown Revitalization Area.

(2) Table 3 sets out the actual municipal tax revenue foregone in 2021 and the estimated municipal tax revenue to be foregone in 2022 as a result of revitalization tax exemptions.

(3) The City provides revitalization tax exemptions

(a) to create economic stimulus and additional permanent employment opportunities, and

(b) to expand the light industry and business tax bases.

(4) Exemptions are provided under the Abbotsford Downtown Revitalization Area program and are governed in accordance with the applicable bylaw.

Proposed funding sources, expenditures and transfers to or between funds

8   The Figure below sets out proposed funding sources, expenditures and transfers to or between funds for the years 2022 to 2026, inclusive.

Figure 1

City of Abbotsford Five Year Consolidated Financial Plan 2022-2026 (in thousands)

Revenue

2022

2023

2024

2025

2026

Municipal assessment taxes

167,515

172,905

178,042

183,249

188,554

Fees and charges

74,997

78,807

81,118

82,547

84,183

Developer charges earned

9,813

15,597

26,627

22,435

34,908

Contributions from other governments

9,230

10,404

14,690

14,734

11,420

Government grants

46,084

17,545

17,344

17,186

17,186

Rent

5,882

5,912

5,917

5,921

5,915

Interest and penalties

7,016

7,273

7,671

8,243

8,469

Other sources

4,918

3,933

4,071

3,800

3,833

Total Revenue

325,454

312,375

335,480

338,114

354,466

           

Expenditure

2022

2023

2024

2025

2026

Capital expenditures

255,579

100,320

132,409

127,029

116,753

Protective services

83,527

83,751

83,892

84,138

84,203

Parks, recreation and cultural services

31,816

33,777

33,927

34,007

34,252

Engineering services

29,976

28,940

28,913

29,505

29,420

General government

32,455

30,108

31,459

33,138

34,782

Transit services

15,204

16,039

16,548

16,548

16,548

Planning & development services

8,609

7,974

7,979

7,985

7,990

Dyking services

3,232

3,270

3,318

3,375

3,399

Water services

12,856

12,810

12,990

13,224

13,450

Sewer services

10,704

10,603

10,782

10,829

11,311

Airport services

5,165

5,159

5,228

5,271

5,544

Debt interest

2,624

2,466

2,301

2,130

2,130

Debt principal repayment

3,954

4,112

4,277

4,448

4,448

Total

495,700

339,330

374,023

371,626

364,230

           

Net Revenue/(Expenditure)

(170,246)

(26,955)

(38,543)

(33,511)

(9,764)

Debt Proceeds

36,000

-

-

-

-

           

Net Change in Funds

2022

2023

2024

2025

2026

Net change in unappropriated reserve fund

-

-

-

-

-

Net change in operating reserve fund

(30,998)

2,565

8,966

10,121

10,778

Net change in general capital reserve fund

(104,266)

(17,955)

(30,310)

(28,319)

(15,112)

Net change in storm drainage capital reserve fund

(3,304)

(4,084)

(1,367)

(1,776)

(4,200)

Net change in waterworks capital reserve fund

5,060

(5,686)

(12,899)

(8,790)

(379)

Net change in sanitary sewer capital reserve fund

713

(4,895)

(6,797)

(10,607)

(6,596)

Net change in affordable housing reserve

-

-

-

-

-

Net change in airport capital reserve fund

(1,452)

3,101

3,864

5,860

5,745

Net change in airport capital and loan fund

-

-

-

-

-

Total Net Change in Funds

(134,246)

(26,955)

(38,543)

(33,511)

(9,764)

           

Balanced

-

-

-

-

-

B/L 3258-2022

READ A FIRST TIME on December 6, 2021 READ A SECOND TIME on December 6, 2021 READ A THIRD TIME on December 6, 2021 ADOPTED on December 20, 2021