Municipal Hall Update
The project commenced in September 2017 with construction starting in 2019. Council did not at the beginning of the project approve a total budget with funding source for the entire project. Council approved each phase of the project (see phases below) one at a time through approval of the Five Year Financial Plan Bylaws. During the development of the project the District received cost estimates periodically.
An update was provided to Council in a report dated September 1, 2021. The main and original purpose was a seismic upgrade to the existing building. The estimated total cost at that time was $19.7 million. The project anticipated occupancy commencing in August 2021 and full occupancy by March 2022.
The goal of making the building more environmentally efficient was considered important to help deliver the District’s sustainability objectives in light of the June 2019 declaration of a Climate Emergency. My understanding is that this added significantly to the cost of the renovation- do not know exactly how much.
$8.4 million was withdrawn from the Endowment Fund in 2021 to help finance the project.
The project is now estimated to be completed in August 2022 and be $1.5 million over the 2021 estimate for a total of $21.2 million. Delays and increased costs are attributed by staff to supply chain issues, availability of trades and COVID together with challenges of renovating an old building.
The project was in three main stages:
- Seismic upgrade (original purpose of upgrade).
- Building envelope and major building systems.
- Interior modifications.
The main benefits of the project per the staff report were:
- Seismic upgrade and resultant earthquake safety
- New building envelope with modern high thermal efficiency windows (from Japan) and electrification of heating system – consequential 90% reduction of GHG’s.
- Safety improvements through removal of all hazardous materials.
- Sensitive restoration of what is considered a recognized heritage building- West Coast Modern.
- Reduced future operating and capital costs.
The project involved 45+ trucks of concrete, 250,000 pounds of reinforcing steel and 100,000 pounds of steel bracing.
To my knowledge no cost estimate was provided to Council of the alternative of demolishing the original building and a new build to compare to the cost of renovation.
Graham McIsaac from ADRA attended the Finance Committee Meeting on January 24 where the budget was discussed and one of the two public presentations on January 25. Please see here the link to the presentation on the District of West Vancouver website:
The Budget presentation was well done however this presentation, as in previous years, focuses on the tax increases residents will be facing and not on the ever rising costs of the operations of the District of West Vancouver which remain a concern. Because the population and dwellings are increasing due to development, this expanded ‘tax-base’ allows the (%) increase in Operating Expense to be greater than the proposed (%) increase in taxes.
The 2022 Budget, as proposed, will push the increase in costs (/spending) by the District to over 18.3% in the last 5 years..
From 2020 expenditures have risen 8.6%. This is well above the rate of inflation.
Comparing 2022 budget versus 2021 budget it appears that expenditures will increase a modest 2.7%. However – those 2021 Budget figures included “one time” COVID recovery spending of approximately $5 million – donated by the province.
So – should it be also used to form the new base for 2022 – or should it be removed since we will not receive that $5 million again this year?.
So it seems additional spending has replaced the “one time” spending in 2022. We have asked District of West Vancouver to explain this and their response is shown below.
Proposed Tax increases
So what does the Budget 2022 mean for you-
- A proposed Operating Tax levy of 1.79%- this compares to the 2.7% operating cost increase referred to above.
- A proposed 1% increase in the Asset Levy to maintain our existing facilities.
- A proposed 1% Environmental Levy (see more on this topic below).
This is an increase in taxes of 3.79% that is directly controlled by the District of West Vancouver.
Then we add in Utilities, which are not directly controlled by the District, and are also somewhat dependent on actual usage by the home owner-
- Water- an increase of 6%.
- Sewer & Drainage of 5%
- Solid Waste 9%
This is an increase in taxes of 7.7% that is not directly controlled by the District of West Vancouver.
So overall based on the average home valued at $3.7 million with average utilities usage the increase in taxes would be $431 or 4.8% in 2022.
Note also that the average increased assessment in the District of West Vancouver is up 18% over 2021-We have seen increases ranging from 7% to as much as 30%. Those home owners who receive assessments of greater than 18% will see a larger increase than 4.8% and those where the increase less than 18% a lower increase.
The above taxes amount to approximately 60% of your property taxes. (excluding the Education/Wealth Tax).
Other taxes that are also likely to increase are Provincial School Tax, Metro Vancouver, BC Assessment Authority and Transit- This makes up around 40% of your property Taxes.
1% Environmental Levy
This tax is proposed again this year (last year was not implemented). The issue that I raised was that there is no firm plan of how this money should be spent. The District is hiring a new Environmental Manager who will lead the District Departments in developing plans to reduce GHG’s and to make our infrastructure more resilient to a changing Climate. Should Council not present to residents a clear plan on recommended spending before we implement such a new tax?
Then there are two elephants in the room that will impact many residents in 2022 who were not impacted in previous years:
The Provincial Government introduced an Education Tax/Wealth Tax in around 2018. This is an additional tax of 0.2% of Assessed Value of your home above $3 million and 0.4% above $4 million.
With the increased in assessed values 682 homeowners who were not subject to this tax before will now have to pay it (eg if the assessed value of your home increased from $2.9 million in 2021 to $3.5 million in 2022 you would pay an additional $1,200 in property tax).
1,225 homeowners will now be subject to the higher 0.4% tax on the assessed value of their home over $4 million (eg if assessed value of your home increased from $3.8 million in 2021 to $4.5 million in 2022 you would pay an additional $2,400).
The grant threshold for 2022 is increased to $1,975,000 so 2,314 homeowners in West Vancouver will no longer be entitled to the grant. (this means now 74% of homeowners not entitled to the Grant compared to 60% in 2021)
In conclusion costs of the District of West Vancouver continue to rise at well above the rate of inflation which leads to increased taxes. We are also seeing continued increases in property taxes through increased taxes and costs passed along from other levels of Government.
In the Budget presentation are alternatives that show 2.79% and 3.29% operating tax levy instead of 3.79% through reducing the Asset Levy and Environmental Levy.
Hope this was helpful If you have any comments on the proposed budget write to [email protected]
Graham McIsaac, Vice President ADRA
Comments from District of West Vancouver
As promised above here is the response to question on rising costs and one off COVID relief costs that I referred to above.
“The $5 million Provincial COVID-19 Safe Restart Grant was brought into the 2021 budget as revenue to offset eligible COVID-19 expenses, so there would not have been a net expense increase. One time COVID -19 expenses have not been incorporated permanently into the 2022 budget.
2020 was an extraordinary year in which the budget was completely overhauled in response to COVID 2019. Programs and service levels were curtailed and the budget was rebuilt conservatively to reflect this. The 2022 budget is a minimal spending budget that aims to restore service levels and programs that were reduced in 2020 and 2021. These would contribute to the budget increase.
Property taxes have increased from 2017. They have covered the costs of providing services at levels that West Vancouver residents have come to expect and include many uncontrollable costs such as collective agreement increases, contractual obligations, and externally driven cost increases. Note that property taxes consist of both an operating levy and an asset levy. With the exception of the extraordinary 2020 pandemic year, the operating levy increase has been consistently below the rate of inflation as measured by the consumer price increase (CPI). The asset levy is not tied to inflation, but rather is driven by the need for the District to catch up on its capital asset maintenance to prevent asset failure.”