Coming Up: May 19
Council meets on Tuesday. We’ll be meeting over video conference. On the agenda:
Photo Enforcement: the contract with Global Traffic Group is expiring
Opioid Crises Class Action Lawsuit: we’ve been asked to be the representative Plaintiff
Property Tax Rates: a recommendation for a below-inflation increase of 1.25%
Property Tax Rebates: a potential rebate to allow properties to pay what they paid in 2019
New Capital Projects
Re-zoning Request in Kensington
Following is more information and my take on agenda items.
As always, any mistakes or opinions belong to me and me alone, not to Council or City staff.
While I express my current views below, I work hard to go into meetings ready to listen and with an open mind. I learn new information and participate in debate. This always informs, and sometimes changes, how I vote on issues.
If you would like to watch the meeting or read any of its supporting material for yourself, you can do so by clicking here. The City will post the highlights of Council’s decisions here.
PHOTO ENFORCEMENT
The City currently uses a private contractor, Global Traffic Group, to operate its Automated Traffic Enforcement (ATE) program. The contract is up at the end of this month. There is a recommendation coming before Council to direct administration to renew this contract for three years.
Photo enforcement was also discussed a couple of weeks ago at Council Committee of the Whole (CCW). I’ve provided an update about that conversation, including how I voted, here. You can also see the thoughts I had going into this meeting in this video:
I’d like to see us review our Site Selection Guidelines and rules around the placement of enforcement vehicles. However, there was no support of that at CCW.
There was support to explore using clearly marked and clearly visible vehicles for components of our ATE program. On Tuesday, I intend to push for us to get the use of overt vehicles solidified in Council’s direction to administration.
However, the biggest issue for me: how payment to the contractor is calculated.
Currently, the contractor is paid a portion of fine revenue generated. This does have some benefits. The biggest benefit: there is large financial risk to the City of provincial changes to traffic enforcement. For example, recently, with no warning or consultation, the province increased the portion of fine revenue it keeps by 150%. There is potential that further provincial changes could cause enforcement programs to become a net cost to the City. Paying the contractor based on revenue insulates the City from this financial risk.
However, to me, enforcement should always be about safety and not revenue. Having the contractor receive payment based on how much money they generate isn’t a good way to give the public confidence that decisions are only being made based on safety outcomes. I cannot support a contract renewal if we don’t find an alternative payment methods, such as fixed monthly or per-hour fees.
If this contract does get renewed, there will be two additional changes I’ll be pushing for in upcoming months:
The dedication of increased City resources to oversee this program. I’d like our people to have more direct oversight of the contractor to ensure community safety priorities are being met. I’d also like to see us be able to better report results to the community, and respond quicker to resident concerns about the placement of vehicles.
The reporting of fine revenue separately from Enforcement Services and RCMP departmental budgets. This would increase the transparency of these programs: right now, it is impossible to look at City financial reports and determine fine revenues. It would also give further assurance that our staff are implementing programs with safety instead of revenue in mind.
OPIOID CRISES LAWSUIT
The City has been asked to participate as the Representative Plaintiff in a class action lawsuit. The lawsuit relates to the opioid crises.
Opioids have had a huge impact on our community. The biggest and worst impacts were harm and death created in the lives of residents and residents’ loved ones. These impacts are the biggest concern to me.
However, there have also been quantifiable financial impacts to residents. For example, the City of Grande Prairie has spent money in having emergency personnel respond to opioid overdoses.
This crises has come about partly due to wrong actions by some companies making false claims, creating misleading marketing, and undertaking other deceptive practices. The class action lawsuit would allow municipalities to recoup some of the costs to taxpayers which these companies created.
This lawsuit is being carried out on a contingency basis. That means that there is no financial exposure to the City participating.
I intend to vote in favour of joining the lawsuit. The companies which have contributed to our Opioid Crises should be held accountable.
PINNACLE RIDGE SPECIAL TAX
Pinnacle has a large water fountain in Pinnacle Lake and a smaller water feature at the neighbourhood entrance. These features cost approximately $16,700 to operate. In 2010, the City was going to stop operating them. However, local residents gathered 700 signatures asking for a special neighbourhood levy to continue funding these features. Since then, the City has honored this request.
Right now, this levy sits at $25/house. An annual bylaw needs to be passed every year to continue issuing it. Since the neighbourhood asked for this and I have not had anyone in it express disapproval to me, I currently intend to vote "yes" to this bylaw.
PROPERTY TAX RATE
In November, Council approved a budget that would see property taxes raise less than inflation: the average property would pay more than 1.25% more in 2020 than it did in 2019. On Tuesday, Council will be debating a Property Tax Bylaw to enable this new rate. It will also be debating a one time, 1.25% rebate on property taxes.
If the recommended Bylaw is passed, taxes will have gone down by 1% this term. Here is what the cumulative impact of recent tax changes looks like:
Something worth highlighting: taxes have gone down. But inflation has driven up many costs for the City. In addition, in 2020, the federal and provincial governments have forced the City to absorb about $4,000,000 in changes. In response, the City has significantly tightened its spending. If it had continued “business as usual” and passed increased costs onto taxpayers, this is where taxes would’ve gone this term:
These changes reflect the municipal portion of property taxes only. However, about 20% of property taxes in Grande Prairie are taxes that the province requires municipalities to collect on its behalf. In 2019, the province introduced its budget months after municipalities were required to levy taxes. That meant that we had to guess at what the province would require. The City’s estimates were slightly over, which means that taxpayers will see a slight provincial refund in 2020.
When provincial refunds are factored in, average residential properties will see their total tax bill drop by 0.5%. Average non-residential properties will drop by 0.4%.
It’s important to realize that these percentage tax changes relate to an “average property.” That means a property which has seen its assessment grow by the average amount of other properties in our community. In Grande Prairie, an average residential property went up by 0.45% and an average non-residential property went by by 1%.
I know that it is frustrating to many that we talk about “average” impact instead of setting taxes in a way that gives every property an equal impact. However, the province mandates how municipal finances work. The provincial framework only allows Council to impact the total amount of money levied from all properties, not how much particular properties pay. To learn more about this framework, checkout these two short videos I’ve created:
I’m likely to NOT vote in favour of the Property Tax Bylaw as presented. To see my reasoning, see the following section below.
PROPERTY TAX REBATE
While taxes have seen a net decrease this term, we are also in unusual times. Due to COVID-19, many businesses and families are undergoing tremendous financial struggle. Council recognizes this, and is having a lot of conversation about how best to help.
What is being recommended on Monday: a 1.25% rebate on property taxes. This would keep the municipal portion of taxes level with where they were in 2019.
This would provide minor relief to all property owners. Additionally, it would lead to the City collecting ~$1,500,000 less in taxes, which would leave some money circulating in the economy.
I appreciate my colleagues wanting to provide relief and leave more money in the local economy. However, I don’t think that a property tax rebate is a good way to do that. A few objections:
While many businesses and families have seen their incomes decreased, many have seen their incomes stay flat. And COVID-19 has even increased revenue for some. A tax rebate benefits all residents and property owners. I’d rather target benefits to those who need them most.
For an average residential property (valued at $318,200) the rebate equates to $38. For an average non-residential property (valued at $1,778,300) it equates to $353. For most families and businesses, this is a very small amount: it is nice to have in their pockets, but makes no real difference to their financial viability.
The total $1,500,000 being used to finance this small rebate is a significant funding pot. It could make a very real impact on many families and businesses that are struggling if it is targeted correctly.
Many of our large, non-residential property holders aren’t based in Grande Prairie. Giving them a tax rebate doesn’t circulate money into our local economy.
I think this rebate is largely symbolic. It might feel good to sort-of-but-not-really hold the line on taxes in 2020. But it won’t substantially impact our community.
Instead, I would like Council to pursue one of these alternatives:
Instead of both raising taxes and rebating taxpayers, just set the taxes to a 0% change. And commit to still keeping the 2021 increase to inflation or below. In this way, we provide long-term tax relief. That’s far more meaningful than one-time relief.
Continue with the 2020 tax increase. But put any money raised through the increased tax levy into COVID Recovery initiatives.
For additional residential tax revenue, give one time grants to non-profits helping the families most impacted. These could include food banks, domestic violence intervention, mental health supports, and programs to help families maintain housing.
For additional non-residential tax revenue, use it to fund some of the recovery suggestions made by the Chamber of Commerce. You can see those here.
I am unlikely to support the Property Tax Bylaw as it is currently formed.
CAPITAL PROJECTS
The City has grant funding left over from past capital projects. There are recommendations to spend it this year to both improve the community and stimulate our local economy. The new projects proposed are:
Smith Subdivision Improvements ($4,950,000): Paving of Park Road and 92 Ave, and a road across the City owned section of land adjacent to Park Road. Water and storm services to be installed along with the roads.
Snow Dump Liner ($3,600,000): The current clay liner is at the end of its life. It will be replaced with an asphalt liner.
Spillway Repairs ($1,325,000): Repairs and assessments on the reservoir dam to ensure it continues to operate as intended.
Road Overlays ($3,600,000): An increase to the Road Overlay program
Eastlink Centre Enhancements ($187,000): Paint touch up, fixing some landscaping, and other minor repairs that are needed as the facility ages
Hillside Fencing ($40,000): Replacing the fence alongside the railway track behind Rotary House
Revolution Place Enhancements ($544,000): To be determined- Council has directed that a report be brought back to it with more information if this funding proceeds
Ernie Radbourne Pavilion Enhancements ($100,000): Painting, landscape repair, and other cosmetic touch-ups, as well as a renovation to the reception desk
Economic Recovery Fund ($500,000): Use to be determined by Council to stimulate COVID-19 recovery
I’m currently opposed to the Revolution Place enhancements. Before we commit to major funding in that building, we need to figure out what Council’s future vision with it is. I’d also like to see a business case for how enhancements might finance themselves through increased revenue opportunities.
I am currently in favour of the other projects being proposed. They’ll all serve our community well while also creating local economic activity.
RE-ZONING IN KENSINGTON
The City has received an application to re-zone land in Kensington from Manufactured Home Community District to Urban Reserve. This change would allow agricultural use to happen on the land.
There are a variety of reasons that developers make this type of request, including to use crops as a form of weed control. However, usually a developer makes this type of request as a tax strategy. Some background:
In Alberta, provincial rules mean that farmland pays very little in property taxes. As soon as agricultural use stops on a piece of land, its property taxes go way up. No physical improvements are needed to trigger this increase.
Under current rules in Grande Prairie, if a landowner wants to develop a piece of farmland, it gets re-zoned. When this happens, agriculture can no longer happen on it. The taxes go up. Which is fine if development happens and the improved land gets sold.
But what has happened in the last few years: during better economic times, developers re-zoned some pieces of land to be shovel-ready for new projects. Then the economy got hit, and these pieces of land never got developed. But Grande Prairie’s Land Use Bylaw doesn’t allow them to be farmed under their current zonings. So now the landowners are paying much larger tax bills than they would’ve had they never re-zoned. They are also forced to pay thousands (sometimes tens of thousands) of dollars per year undertaking provincially mandated weed control that would not be necessary if the land was farmed.
Now these developers are coming to Council with re-zoning requests to allow this land to go back to agricultural use.
Council has been allowing these re-zoning requests. But I’ve been voting against them, and I’m likely to vote “no” again on Tuesday. However, my objections have more to do with our process than the result.
There are good reasons to support allowing this land to revert to agricultural use and pay lower taxes. They include:
Promote shovel-ready development: We want shovel-ready land in our community. It allows development to happen quickly during economic upswings, and it helps make sure that tax paying property is built in the City instead of just outside it. If developers are penalized with huge tax and weed bills for carrying shovel-ready land, we will see less of it created in our community.
It seems fair and equitable: It doesn’t seem right that land pays much higher taxes just because it is re-zoned, not be cause it is improved in any way. If land is sitting empty (with no roads or other public infrastructure to maintain and no people to access City services), it seems reasonable to tax it differently than utilized land.
However, I strongly object to the current process we are using. The problem with it: Council is involved.
A fundamental aspect of our tax system is that politicians are uninvolved with individual tax bills. In Alberta, Councils set the total amount of taxes that will be collected in the community. But they have nothing to do with how that total amount is split between individual properties. Instead, professional land assessors working under provincial (not municipal) rules determine who pays what. And their decisions are subject to appeal to an independent Assessment Review Board and to provincial courts.
Keeping politicians away from individual tax bills is a good part of our system. It makes sure that everyone is treated fairly and consistently. And it is a great check against any possibility of corruption.
However, when land is re-zoned: that’s completely up to politicians. Council can grant or not grant re-zoning requests for any reasons it chooses. And there is no way to appeal Council’s decision. That means that if re-zoning is being used as a tax strategy, politicians are getting involved in taxes in ways they should not be involved. And I cannot support that.
I also have troubles with some of the justifications my colleagues have expressed to support past re-zonings. They’ve called doing so as being “business friendly” by not penalizing land owners for trying to develop their land. However, re-zoning is a long, expensive, unpredictable process for land owners. And right now, developers who want to revert to agricultural use need to do it twice: once to start farming the land, and then again in the future when they are ready to try developing it again. Asking them to go through this process twice is not business friendly.
So I will likely be voting “no” to this re-zoning request on Tuesday. However, if Council’s will is to grant tax relief to these properties: I’m not fundamentally oppossed. I’d just like us to find a better process. Two options I can think of:
Create a “Undeveloped Land” property class and charge a lower rate to land which has no infrastructure built and which has no residential, business, or other activity on it. (I brought this idea up at a recent Corporate Services Committee meeting but Committee was not interested in advancing it)
Change our Bylaws to allow light agricultural use on any land that is adjacent to other farm land and which does not have roads or other municipal services. Instead of going to Council, landowners would need to get approval from our professional planning staff. And staff’s decisions would be appeal-able to the Subdivision and Development Appeal Board and provincial court. Politicians would be removed from the process, and it would more closely reflect what usually happens with taxation of individual properties. It would also be quicker and cheaper than re-zoning for both developers and the City. (I intend to raise this idea at a Committee meeting in the near future)
That’s what is on our agenda for Monday. I’d love to hear your thoughts.
You can comment below. Or, you can contact me at dbressey@cityofgp.com or 780-402-4166. I'm happy to talk online or over the phone. I'm also always willing to setup a time to meet for coffee.
We also always have great conversation in the GP Round Table group on Facebook.
After Council meeting, you will be able to find highlights posted by the City here.
Thanks for reading!
-Dylan