Numbers don't add up

This is a letter to the Editor of the Morning Star on March 10 that I am posting WITH the permission of the author Mike Pennock.

--------------------------

There is a phrase that Vernon city councillors are trying to tell the citizens of Okanagan Landing: HICA (Here It Comes Again).

Some of the city councilors owe the Landing citizens a public apology for trying to pull the wool over their eyes in the latest no-thought decision on fire taxation. Stating that the Landing has been free loading to the tune of $489,693 in services is crap. In fact the taxes collected from the Landing area for fire rescue services are reflective of the actual costs of the service that is being offered by a volunteer fire hall in the Landing and administration costs of the downtown hall.

It is time to put our thinking caps on and remember the statement made by previous fire chief John Lysholm. He said that the First Medical Responder (FMR) would not cost the taxpayers any extra. In fact it was a way to enhance medical response, with the ambulance service, and keep the downtown firefighter contingent busy in between other calls. The costs to run the FMR program are approximately $20,000 per year. How does council come up with a number that says the Landing residents have been getting $362,136 worth of free FMR service a year? The numbers are presented in a way that helps them make a decision, that’s how. The presentation to council to help decide on the taxing of fire rescue services shows a cost of $1,574,093 for FMR, how is this possible for a no-cost service? It is not possible. This cost will not go away if the service is no longer offered. The cost is part of the cost of running a fully-manned fire hall no matter what type of emergency they are responding to. Landing residents have not been freeloading.

In 1993, when the Landing became part of the city of Vernon, the council of the day was bright enough to see the savings in keeping the volunteer fire rescue services and taxed the Landing residents accordingly. The move by the current council to tax the Landing the same as the rest of the city of Vernon for fire rescue service has done nothing more than open the door for millions of dollars in increased fire costs over the next few years to all the taxpayers of Vernon. The increase will be required to bring the Landing the same fire rescue service as the rest of the City of Vernon, a fully-manned hall. Or is it again one of those things we pay equal tax on and don’t get, like sidewalks, streetlights, and wastewater services? Vernon city council, it is time to take a stand and realize what you have in the Okanagan Landing Volunteer Fire Hall. It is a great service and huge tax savings to the citizens of Vernon.

Landing residents contact your council and express your concerns about the latest move to integrate taxation. Most homes in the Landing are above average assessment so the integration will cost Landing residents dearly. Speak up now or HICA.

Mike Pennock

Vernon Tax CHEAT SHEET. Lets take the mystery out of the City Portion of Taxation

This is a reposting of a Mar 13 piece on how to figure out where you stand with regards the proposed "1.99%" budget from the city of Vernon. The "mill rates" to be used for both Residential and Business taxpayers anywhere in the city are listed below. They are based on the budget as it was presented last night at the public input session and in response to a businessman who asked what the effect on business would be and didn't receive an answer. The business tax "mill rate" (I am from the old school ) is based on the ratio remaining at the present 3.09 ratio.

This will calculate your City Taxes portion for 2009 only and should be compared to your city taxes last year for both the general tax portion and the fire specified area portion. The difference will be your increase or decrease.

Hopefully the City will post an interim tax calculator showing only the City's portion of your taxes on their website so you can more easily calculate your tax change. Last years full calculator is here:
What will your tax bill be in 2008? Calculate your property taxes with our new online Property Tax Estimator.

Tax Caveat:
Every property is effected by the tax rates in a different manner and is dependent usually on the amount that its assessment is up as compared to the average assessment increase. As the Province froze assessments this year (in most cases) this should not be a major factor in this years calculation . The major difference this year is how much Land you have in comparison to the average Land component of the average property within the same class. (The average $418,676 Residential property has 35.78% Land and 64.22% Improvements) As fire taxes will now be charged on Land also your taxes will rise or fall dependent on your deviation from the average.


----------------------------- Original March 13 Article.--------------------
According to the CFO of the City of Vernon the average home based upon the current tentatively approved budget will have a City taxation rate of 2.4786469.

This 'mill rate' is easily figured out by dividing the CFO's average tax charge for 2009 of $1037.75 by the average property assessment value for 2008 of 418,676 and multiplying by 1000.
(1037.75/418676) x 1000 = 2.4786469

Thus all you have to do to figure your 2009 Vernon City Taxes is to

• Multiply your 2009 total assessment by 2.4786 and divide by 1000.
  
• Compare it to your 2008 tax bill for the sections "General City taxes AND Fire Protection (Add the two totals together to get 2008 taxes)
  
• The difference is how much the City Part of your taxes will go up or down for 2009.

This does NOT figure out your School taxes, Nord Taxes, Hospital taxes or Library and taxes for MFA and BC assessment or any specified areas taxes which all appeared on your 2008 tax bill.

THIS IS FOR RESIDENTIAL TAX PAYERS ONLY:
For Businesses:
If the business tax ratio stays at last year's rate of 3.09 then the multiplier that you should use will be 2.4786469 x 3.09171 = 7.66328

Use this multiplier as in the above Residential Formula.
------------------------
Remember there is a public input session on Monday March 30 at 5:30 Pm
-------------------------------

Would appreciate comments from any one that uses this formula on the status of their 2009 taxes. (keep them Civil)

--------------------
All these numbers used are those that were provided in open sessions of Council by the Financial department.

Other Postings on this subject : Real effects of a 1.99 % budget
The 1.99% City Taxation Presentation

The real effects of the 1.99% budget !!

Click on Image To Enlarge:
This presentation is the comparison between what the average property valued at $418,676 ($149,811 Land & $ 268,865 Improvements) would have paid in actual taxes in 2008 and proposed taxes in 2009.

2008 taxes are calculated with the fire tax levy separate as it was only charged on improvements while the 2009 taxes are charged on a full integrated fire tax that is assessed on both Land AND improvements.

Because there were 2 different fire specified areas in 2008 Okanagan landing AND the rest of the City the comparision is naturally broken out that way.

A comparison for the same valued property (i.e $418,676) that is bare land is also shown.
------------------------
Tax Caveat:
Every property is effected by the tax rates in a different manner and is dependent usually on the amount that its assessment is up as compared to the average assessment increase. As the Province froze assessments this year (in most cases) this should not be a major factor in this years calculation . The major difference this year is how much Land you have in comparison to the average Land component of the average property. (The average $418,676 property has 35.78% Land and 64.22% Improvements) As fire taxes will now be charged on Land also your taxes will rise or fall dependent on your deviation from the average.

As an illustration of the above my particular property has 46% land assessment and I will expect that my tax increase consequently will be higher than the average increase.
-------------------
An article in the Morning Star has some of the comments from Council about the 1.99% tax solution.
A Posting of yesterday shows the City's Presentation of the 1.99% Tax Increase for the average House.

The 1.99% City Tax PRESENTATION

You can click on both images to enlarge.
The first Chart is the presentation by the City of Vernon's financial department of the budget effect on the average house for the so called "1.99%" or only $20 per average house Tax Solution that passed three readings on Friday 13th by a 5-1 vote.

The second Chart is the presentation by the City of Vernon's financial department of the budget effect on the average house for the so called "-0.33%" or -$3.25 saving per average house Tax Solution that rescinded the original 5-2 favourable vote of Monday and defeated it on Friday 13th by a 5-1 vote.

I have made notations of what each figure represents on both charts.

These presentations are based on a comparison of what would the effect be on an average house IF the average house in 2008 had been charged for the fire portion of the City's taxes on the new basis that is been put into effect for 2009, namely 'Fire taxes integrated fully into city taxes and charged on LAND and Improvements rather than just improvements as was actually the case in 2008.

I will be posting later a more valid comparison to show the taxes on the average property of $418, 676 (Land $149,811 and Improvements $268,865) located both in the Okanagan Landing AND the rest of the city. I will also show a comparison for this average property and the resultant tax effect IF the property is land only. This comparison will be based on the actual taxes for 2008 being split by general and fire and compared to the full tax integration formula of 2009.

Tax Caveat:
Every property is effected by the tax rates in a different manner and is dependent usually on the amount that its assessment is up as compared to the average assessment increase. As the Province froze assessments this year (in most cases) this should not be a major factor in this years calculation . The major difference is how much Land you have in comparison to the average Land component of the average property. (The average $418,676 property has 35.78% Land and 64.22% Improvements) As fire taxes will now be charged on Land your taxes will rise or fall dependent on your deviation from the average.

As an illustration of the above my particular property has 46% land assessment and I will expect that my tax increase consequently will be higher than the average increase.

An article in the Morning Star has some of the comments from Council about the 1.99% tax solution.