FORT ST. JOHN, B.C. — The City of Fort St. John is one step closer to officially setting municipal tax rates for this fiscal year after the 2018 Tax Rates Bylaw passed first three readings at Monday’s council meeting.
The City’s General Manager of Corporate Services David Joy gave a presentation of this year’s tax rate review at a Committee of the Whole meeting on Monday. Since 2013, Joy showed that the City’s revenues from residential property taxes have decreased from 45.6 percent to 42.1 percent. In that same timeframe, revenue from businesses has increased from 47.2 percent to almost 60 percent. Major and light industrial taxes combined represent less than 4.5 percent of revenues, down from nearly 6.5 percent in 2013.
Joy explained that after Assessment BC finalized property assessments earlier this Spring, the value of property assessments in Fort St. John actually decreased an average of seven percent compared to last year, while business property assessments increased just over three percent. Overall, the city saw property values drop by roughly $200 million, from $3.8 billion to $3.6 billion.
Looking at tax rates, Joy showed that residential tax rates as budgeted will be increasing from $4.76 to $4.86 per $1,000 to make up for the drop in home values. In fact, tax rates for all property types will be increasing this year to make up for the drop in residential properties, save for Utilities properties, which are subject to a rate of $40 per $1,000 assessed value. Major industrial property owners will pay $26.97, light industrial owners will pay $24.64, businesses will pay $13.67, recreational properties will pay $10.24, while farm owners will pay $1.45.
Joy said that the rate increase is needed to keep revenues the same as in 2017 in order to maintain the same services the City provided last year. He explained that homeowners whose properties dropped in value by the average of seven percent will actually pay less in property taxes this year, while those whose property values were unchanged will see a $40 increase this year.
Joy also looked at how recommendations on the 2009 Hamilton Report that examined the City’s tax rates would apply to the City today. That report observed that the City’s light industrial tax ratio was high, and that the tax ratio on businesses was near the top, though within a reasonable range. The ratio of taxes paid by heavy industry was found to be in the mid-range with other cities in B.C.
Joy said that the 2009 report recommended lowering the business tax ratio from 2.97 to 2.7 over four years, and to lower the light industry ratio from 5.56 to 3.0 over three years, with the cost of those reductions to be made up by residential owners. However, Joy noted that residents would currently pay between $11 and $42 extra per year to make up for the drop in revenue from commercial and industrial owners. He added that the report was written nearly ten years ago, during a time of economic prosperity, while the local economy is currently on the tail end of a steep recession.
Mayor Lori Ackerman mentioned the possibility of having some of the City’s Peace River Agreement annual grant money used to make up for the shortfall, since the terms of the agreement are different than the former FairShare agreement with the Province. Councillors Bolin and Evans said they weren’t opposed to the possibility. City Manager Dianne Hunter said that the City’s current policy of how much of the Peace River Agreement money is allocated to operating and capital costs would best be discussed ahead of the 2019 budget.
Council voted in favour of a resolution to review the PRA’s allocation policy and how it would impact the 5-year financial plan. Meanwhile, the City’s Budget Bylaw is due to be passed at the next Council meeting in early May.