City of Calgary budget, 2014 edition

[Bunk]

Originally Posted by yads

Just curious if density is such a big factor to keeping operating costs down, why Toronto, Victoria and Vancouver have significantly higher property taxes despite being much denser than Calgary?

It's an interesting question. It's hard to compare apples to apples because different municipalities provide different services or levels of service. For example Montreal spends about $145 million on snow removal a year (even though they have fewer lane km than Calgary) we spend about $35 million. They have chosen to physically remove snow from most streets, we plough and sand/salt and mostly only on major roadways. Other municipalities also have much greater responsibility in social services and housing than us for instance.

[CaptainYooh]

Originally Posted by Addick

Fully developed or recover all of their infrastructure costs?..

OK, I don't like doing this, because it would be very primitive; but let's try illustrating the infrastructure investment scenario using some basic assumptions, rounded numbers and 10% hurdle rate:

City's investment is taken at $35,000/ha, which has been called a "net subsidy to developers" – an excess of infrastructure extension costs to service new subdivision (developers pay for everything else). Obviously, this is not as simple. Plus, the IRR outcome is based on a gross revenue number, not a net profit, but it is illustrative - subtract basic costs of municipal services and the residual numbers should still repeat the same return pattern. (Also, remember, the city is not supposed to make profit, just cover expenses and reinvest any excess money back.) Another assumption is that the new subdivision will start cashflowing at YR-5 at 25% and then increase annually to 50% then 75% and then to 100% by YR-9.

Modern day subdivisions in Calgary are being approved at 12+ upa. I believe the new targets are even higher, at 16-20 upa overall. The revenues will grow accordingly.

Originally Posted by Addick

I said 'should have'. The impact fees in the inner-city should have been high enough to cover the cost of the Peace Bridge's construction...

There are no impact fees to my knowledge. There are special assessments and other funding mechanisms in some areas of the inner city, when they are associated with developments in those specific areas. Peace Bridge was not funded from those revenues.

Originally Posted by Addick

The alternative to public transport is the private vehicle which doesn't even have a user-fee. With all modes of transport, a high degree of the operational costs are covered by property taxes. Where are you going with this?

Just trying to demonstrate the futility of using the "subsidy" argument. It can't withstand any serious scrutiny, because of how many various municipal cost items are directly subsidized based on their perceived political, environmental or social value without any hopes of financial return.

Anyway, we can move this particular part of our argument to another thread. It has little to do with the current capital budget.

[SebC]

Originally Posted by CaptainYooh

Plus, the IRR outcome is based on a gross revenue number, not a net profit, but it is illustrative - subtract basic costs of municipal services and the residual numbers should still repeat the same return pattern.

What? You can't just omit operating costs and assume that they wouldn't change the outcomes.

[Bunk]

Originally Posted by calculoso

Assuming you're saying the tax rate has to increase by 5.5%, this is wayyy too simplistic. It implies that the population growth does not pay any taxes. If the population growth is 2.5% and as a result property tax revenue also increases by 2.5%, then the % to be charged doesn't need to change.

When the City says the "property tax increase is 5.5%" - what that actually is indicating is how much more revenue the City is taking in from property taxes over the year before - not the individual's increase. So if there's a 2.5% increase in population - you have 2.5% more people paying into a 5.5% increase in revenue.

[GGG]

Originally Posted by Bunk

When the City says the "property tax increase is 5.5%" - what that actually is indicating is how much more revenue the City is taking in from property taxes over the year before - not the individual's increase. So if there's a 2.5% increase in population - you have 2.5% more people paying into a 5.5% increase in revenue.

Really? I thought that in the past when reports of 5% and 6% increase were apporved that the Non-Adjusted notices that went out in January showed straight 5% or 6% increases on the municipal side.

[calculoso]

Originally Posted by Bunk

When the City says the "property tax increase is 5.5%" - what that actually is indicating is how much more revenue the City is taking in from property taxes over the year before - not the individual's increase. So if there's a 2.5% increase in population - you have 2.5% more people paying into a 5.5% increase in revenue.

But see that is very different.

The way it was presented previously said that an increase in population was requiring an increase in property tax.

Now you're saying is that an increase in population is resulting in an increase in tax collected.

[Bunk]

Originally Posted by calculoso

But see that is very different.

The way it was presented previously said that an increase in population was requiring an increase in property tax.

Now you're saying is that an increase in population is resulting in an increase in tax collected.

No, not what I'm saying - because the calculation each year starts on a revenue neutral basis.

I'll try and explain how it works, hopefully tomorrow when I have a bit of time. It's stupidly confusing and complex.

[Bunk]

So with regard to the property tax calculation every year - I'll take a shot at trying to explain it.

Say we have a population of 1 million in 2012 (and all the businesses that come along with it). Say we have a property tax base of $1 billion - toward a $2 billion budget. Between 2012 and 2013, the population increases by 2%. Say also that the market value of the total assessment base has also increased by some amount

So when we're going to set the 2013 property tax rate. We now have 1,020,000 people and a higher assessment base. However, when we go to calculate the budget, we begin from a position of being revenue neutral. So given this larger base we adjust the mill rate down such that it would produce $1 billion. In a case the base goes down, we'll adjust the mill rate up to again be revenue neutral.

We then figure out how much we're likely going to need to spend. In 2012 we have a $2 billion budget - for 2013 we estimate it is going to need to go up. MPI (inflation) is about 3% and we estimate population will again go up by about 2%. So we figure overall spending will need to go up by 5% to keep the same level of service per capita. Our overall revenue will need to go up by 5%.

Say the 50% of our budget that's not property taxes goes up by about 5% (user fees, investments, etc). So we'll need to derive 5% more in property taxes to meet this budget need (sometimes the non-property tax side stays more level, so the property tax has to compensate and go higher). So the mill rate is then manually adjusted to derive 5% more revenue from the current property tax base. You have a "5% property tax increase". But you also have a large number of people paying into that increase.

In 2006 for instance, the mill rate actually dropped quite dramatically because property values skyrocketed.

Property taxes rates (per $100,000 of assessed value)


Your individual taxes will depend entirely on your assessment relative to others. If your assessment went down (while the average increased), your taxes will likely stay flat or even drop. If your property increased by a large amount, your taxes will go up more than the average.

[Slava]

^Thanks for the explanation. That system seems unnecessarily cumbersome. Why do they adjust this as revenue neutral? It seems like a step that could be eliminated, but without understanding the significance I'm not sure?

[Bunk]

Originally Posted by Slava

^Thanks for the explanation. That system seems unnecessarily cumbersome. Why do they adjust this as revenue neutral? It seems like a step that could be eliminated, but without understanding the significance I'm not sure?

I think they moved to a revenue neutral calculation in 2000. I'm not totally sure of the rationale. Could be because of the nature of a boom-bust economy - assessment numbers can swing wildly.

[Bill Bumface]

Originally Posted by fotze

But who wants to live in a grid?

Me. When I lived in a Close/Crescent/Meadow/View/Meadow View/Mews/ Gardens Mews/Meadow community I found it incredibly frustrating to walk around. Nothing but detouring around curvy streets and stupid connector pathways hidden around everywhere.

My criteria for a good neighborhood is one where a kid can ride a bike to a convenience store without a GPS.

[GGG]

Originally Posted by hulkrogan

Me. When I lived in a Close/Crescent/Meadow/View/Meadow View/Mews/ Gardens Mews/Meadow community I found it incredibly frustrating to walk around. Nothing but detouring around curvy streets and stupid connector pathways hidden around everywhere.

My criteria for a good neighborhood is one where a kid can ride a bike to a convenience store without a GPS.

As long as they put pass throughs in for pedestrians and bikes at convenient spots it is pretty easy to walk around. My problem is the damn names. I have lived in my neighbourhood for 6 years and I still don't know the street name suffixs other then the immediate streets around me. Unless something directly connects off of it it should have a different name. main thourough fairs should have different names. It drives me crazy.

[GGG]

Originally Posted by Bunk

I think they moved to a revenue neutral calculation in 2000. I'm not totally sure of the rationale. Could be because of the nature of a boom-bust economy - assessment numbers can swing wildly.

Thanks for the explanation.

Is it correct then that when the city proposing a 5% increase and that number is reported in the media they are referring to a revenue neutral increase so if all properties had the same proportion of value then tax would increase by 5%?

or

Are they saying that city reveues need to increase by 5% through a variety of means including property taxes.

I am assuming it is the former.

[SebC]

May I present... the fused grid. Sorry. Off topic.

[nik-]

Originally Posted by SebC

May I present... the fused grid. Sorry. Off topic.

That kind of looks horrible. A neighbourhood of dead ends. Just grid please.

[BigNumbers]

Originally Posted by Bunk

All I see here are a bunch of brightly coloured mutant-penises.

[Bunk]

Heading into budget discussions - the annual Citizen Satisfaction Survey.

In short - satisfaction with the City and living in Calgary at an all time high:

http://www.calgary.ca/CS/CSC/Documen...ion_survey.pdf

[mykalberta]

For tax adjustments, if the City needs 5% more in revenue wouldnt it have to increase taxes by 10% because the province takes 1/2?

[Tyler]

Originally Posted by Bunk

Heading into budget discussions - the annual Citizen Satisfaction Survey.

In short - satisfaction with the City and living in Calgary at an all time high:

http://www.calgary.ca/CS/CSC/Documen...ion_survey.pdf

But but but Rick Bell and the Calgary Sun says the finding are BUNK and meaningless.. what do I make of this now..

[GGG]

Originally Posted by mykalberta

For tax adjustments, if the City needs 5% more in revenue wouldnt it have to increase taxes by 10% because the province takes 1/2?

The province sets its mill rate independant of the cities. So if the province leaves its rate flat than your taxes would only go up roughly 2.5% while the city portion goes up 5% and the provincial portion remained flat. I do think that the city takes more than 50% right now. Not sure the exact amount but I think approaching 55%.