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Bylaw No. 3382-2023

Five-Year Financial Plan Bylaw, 2023-2027

Consolidated and printed by authority of the Corporate Officer under section 139 of the Community Charter. Includes amendment bylaw 3405-2023 . Last amended May 8, 2023.

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 2023 to 2027, 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 2023 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 2023

Consolidated

Revenue Sources

% of Total Revenue

Dollar Value

(in thousands)

Municipal assessment taxes

42.18%

$183,250

Fees and charges

18.24%

$79,268

Developer charges earned

4.28%

$18,611

Contributions from other governments

5.92%

$25,728

Government Grants

23.74%

$103,139

Rent

1.84%

$7,978

Interest and penalties

3.23%

$14,025

Other sources

0.57%

$2,484

Total

100.0%

$434,483

B/L 3405-2023

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 2023

Property Class

% of Total

Property Tax

Dollar Value

(in thousands)

1 Residential

61.2%

$107,182

2 Utilities

3.1%

$5,429

3 Supportive Housing

0.0%

$0

5 Light Industry

5.9%

$10,333

6 Business and Other

27.4%

$47,986

8 Recreation/ Non-profit

0.1%

$175

9 Farm

2.3%

$4,028

Total

100.0%

$175,133

B/L 3405-2023

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 2022 and the estimated municipal tax revenue to be foregone in 2023 as a result of permissive tax exemptions are as set out in Table 3.

Table 3: Municipal Tax Revenue Foregone

Exemption Category

2022 Actual

2023 Estimated

Permissive Tax Exemptions

Places of Worship

$1,008,26

$812,200

Not-for-Profit Organizations

$551,671

$555,700

Local Authority

$215,073

$116,300

Athletic or Service Clubs

$308,066

$313,000

Independent Schools

$5,491

$5,500

Revitalization Tax Exemptions

Revitalization

$36,600

$24,000

Total

$2,125,168

$1,826,700

B/L 3405-2023

(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 2022 and the estimated municipal tax revenue to be foregone in 2023 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 2023 to 2027, inclusive.

Figure 1

City of Abbotsford Five Year Consolidated Financial Plan 2023-2027 (in thousands)

Revenue

2023

2024

2025

2026

2027

Municipal assessment taxes

183,250

189,221

196,199

203,387

210,792

Fees and charges

79,268

81,298

83,190

84,999

86,806

Developer charges earned

18,611

21,203

15,424

37,678

24,859

Contributions from other governments

25,728

11,737

18,933

10,837

8,016

Government grants

103,139

85,950

22,168

21,701

20,880

Rent

7,978

7,983

7,987

7,987

7,946

Interest and penalties

14,025

17,538

16,743

14,565

13,584

Other sources

2,484

2,572

2,274

2,274

2,249

Total Revenue

434,483

417,502

362,916

383,427

375,132

           

Expenditure

2023

2024

2025

2026

2027

Capital expenditures

340,985

174,326

98,730

128,300

107,274

Protective services

89,146

91,621

94,465

97,182

96,799

Parks, recreation and cultural services

34,926

34,321

34,474

34,757

34,982

Engineering services

29,828

29,009

29,136

29,233

28,961

General government

37,363

35,935

38,143

40,989

42,859

Transit services

15,447

16,001

16,453

16,453

16,454

Planning & development services

8,753

7,981

7,987

7,992

7,998

Dyking services

3,518

3,577

3,623

3,671

3,710

Water services

13,248

13,255

13,390

13,586

14,112

Sewer services

11,925

11,869

11,849

11,998

12,240

Airport services

6,133

5,977

6,066

6,156

6,239

Debt interest

2,466

2,301

2,130

2,130

2,130

Debt principal repayment

4,112

4,277

4,448

4,448

4,448

Total

597,849

430,451

360,893

396,895

378,206

           

Net Revenue/(Expenditure)

(163,367)

(12,949)

2,024

(13,467)

(3,075)

Debt Proceeds

36,000

-

-

-

-

           

Net Change in Funds

2023

2024

2025

2026

2027

Net change in unappropriated reserve fund

-

-

-

-

-

Net change in operating reserve fund

(2,934)

9,702

9,192

8,147

9,464

Net change in general capital reserve fund

(71,791)

(665)

2,011

(13,521)

(13,589)

Net change in storm drainage capital reserve fund

(11,689)

(3,197)

(1,857)

(1,595)

(2,286)

Net change in waterworks capital reserve fund

(15,316)

(15,483)

(428)

(5,340)

506

Net change in sanitary sewer capital reserve fund

(10,292)

(4,228)

(10,288)

(7,404)

(2,839)

Net change in affordable housing reserve

-

-

-

-

-

Net change in airport capital reserve fund

(10,292)

922

3,393

6,246

5,670

Total Net Change in Funds

(127,367)

(12,949)

2,024

(13,467)

(3,075)

           

Balanced

-

-

-

-

-

B/L 3405-2023

READ A FIRST TIME on April 3, 2023 READ A SECOND TIME on April 3, 2023 READ A THIRD TIME on April 3, 2023 ADOPTED on April 20, 2023