01 - January 14, 2014 Special County Council Meeting Agenda Pkg.
ORDERS OF THE DAY
SPECIAL COUNCIL
FOR TUESDAY, JANUARY 14, 2014 – 2:00 P.M.
ORDER
1st Meeting Called to Order
2nd Disclosure of Pecuniary Interest and the General Nature Thereof
3rdMotion to Move Into “Committee Of The Whole Council”
4th Presenting Petitions, Presentations and Delegations
DELEGATIONS:
1. Peter Devlin, President, Fanshawe College; Ross Fair, Chair of St. Thomas/
Elgin Campus; Catherine Finlayson, Executive Director, Fanshawe College
Foundation and Andrew Gunn, Regional Development Coordinator with
correspondence dated January 6, 2014 and a PowerPoint presentation.
(attached)
2. Fons Vandenbroek, President, Elgin Federation of Agriculture; Steve Walsh
and Bill Luyks, Directors, Elgin Federation of Agriculture; Ben LeFort and
Jason Bent, Research Specialists, Ontario Federation of Agriculture; and Ed
Ketchabaw, Past President, Elgin Federation of Agriculture with PowerPoint
titled ”Farmland Assessment and Taxation” and correspondence titled “New
Property Assessments Reflect Higher Farmland Prices”. (attached)
5th Reports of Council, Outside Boards and Staff
1. Report from Director of Financial Services – Impact of 2012 MPAC
Reassessment. (attached)
2. PowerPoint Presentation from Chief Administrative Officer and Director of
Financial Services titled “2014 Fiscal Outlook”. (attached)
OTHER BUSINESS
6th
1) Statements/Inquiries by Members
2) Notice of Motion
3) Matters of Urgency
7th Closed Meeting Item
8th Motion to Rise and Report
9th Motion to Adopt Recommendations from the Committee Of The Whole
10th Consideration of By-Law
11th ADJOURNMENT
CASUAL DRESS PERMITTED
NOTICE:
January 28, 2014 9:00 a.m. - County Council Meeting
1
2
Presentation to Elgin County Council
January 14, 2014
County Administration Building
3
Our Agenda
1.Re-introduce Fanshawe College to County Council and introduce some
2.S-
3.
4.Update you on recent developments and future plans for our St.
Thomas/Elgin Campus.
5.Answer any questions that member of County Council may have.
4
The New Faces
Peter Devlin, 5 President of Fanshawe College, effective September,
th
2013, after 35 years of service in the Canadian Armed Forces, re
the rank of Lieutenant-General.
Ross Fair has been the Chair of our St. Thomas/Elgin Campus since August,
2012 and is a seasoned senior administrator with background in b
municipal and provincial government sectors.
Also joined today by Catherine Finlayson, Executive Director,
Advancement and Alumni Relations and Andrew Gunn, Regional
Development Coordinator
5
Thanks to Elgin County
The County has been a strong supporter of Fanshawe in the
past:
Made a pledge of $100,000 in 1993 which was paid between 1996-
2000
For this support we say thank-you!
6
7
Strategic Framework
Vision:
Mission:
Provide pathways to success, an exceptional learning experience,
a global outlook to meet student and employer needs.
Focus on
Values:
Students
Involve
Utilize
Resources
our
Wisely
Communities
Embrace
Engage Each
Change
Other
8
Strategic Goals
1.Grow enrolment by 20% over 5 years;
2.Ensure that all students are provided the opportunity
to access flexible learning options;
3.Provide the premier learning, student life, and career
preparation experience;
4.Foster a high-performing and sustainable College.
9
Fanshawe College
St. Thomas/Elgin Campus
Welcome
to h w campus!
10
Fanshawe Footprint in
St. Thomas and Elgin County
Campus in St. Thomas post-secondary and continuing education
programs.
Delivery of academic upgrading programs in East Elgin; St. Thoma
West Elgin (Feb. 2014)
Partner in delivery of Employment Services Elgin 3 offices across the
City/County
11
Campus Developments
Changing regional economy is driving change.
Rationalization of training labs so that trades programming is f
current and evolving labour market needs in the region and beyon
Continuation of accelerated delivery of diploma programs 12 months of
continuous study a great aid to residents looking to retrain and
the workforce.
New investments in labs, with support from the Palmer Estate has
in new Renewable Energies Technician and Welding Certificate pro
12
Campus Future Growth
The College is developing a five year growth plan built around t
:
of a more diversified curriculum
Maintain excellence in post-secondary trades and apprentice trai
Expand the Renewable Energies Technician program
Introduce innovative business-training in areas of use of social
settings; integration of trades and business training.
Expand health and social services options, including exploring t
regional centre of excellence for ongoing professional developme
practitioners;
13
Questions and Answers
14
Farmland Assessment and
Taxation
Elgin Federation of Agriculture
Taxation Committee Meeting
Aylmer, Ontario
th
Dec 9, 2013
15
Jason Bent & Ben Le Fort
Farm Policy Research
Ontario Federation of Agriculture
519-821-8883
16
2012 Property Assessment
MPAC mailed Notices of Assessments
showing assessed values as of Jan 1, 2012.
1,551 vacant farmland sales occurring
between March 2007 to December 2011
were used to determine assessed values.
Assessment increases will be phased in over
the next four years (2013,-14,-15, & 2016)
17
3
2012 Farmland Analysis
The 1,551 vacant farmland sales used to
Of the 1,551 sales,239sales were in the
Elgin/Middlesex/Oxford Assessment Region
Excludes farm property sales:
with buildings;
of less than 20 acres; and
from the urban fringe (example: Halton).
18
4
2012 Farmland Analysis
The 1,551 vacant farmland sales occurred
between March 2007 to December 2011.
valuation date to reflect inflation in the
marketplace.
Value adjustment applied to farms over 75
acres to account for larger properties
being sold for less per acre than smaller
properties.
19
5
Farm Assessment Base Rate per
Acre Comparison (Prov. Average)
Productivity2008 rate per Ac 2012 rate per Ac
Class
1 $4,051$7,323
2 $3,429$6,665
3 $2,639$5,425
4$1,591$2,546
5 $1,105$2,003
6 $ 421$1,008
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6
Farm Assessment Value
Adjustment Factor (New for 2012)
Lot SizeMarket Adjustment Factor
Less than 75 acres 1.000
75 ac up to 89 ac1.000
90 ac up to 99 ac0.984
100 ac up to 109 ac0.974
110 ac up to 119 ac 0.955
125 ac up to 149 ac0.940
150 ac up to 199 ac0.927
200 ac up to 299 ac0.916
300 ac up to 499 ac0.883
500 ac and larger 0.842
21
7
Farm Class increase has outpaced
the Residential Class increase
% Change Tax Class Growth
(compared to 4 years ago)
ZoneFarm ClassResidential Class
South West 52.17%9.34%
Central South 44.95%11.74%
GTA41.17%22.57%
Central North 16.70%7.32%
East54.78%22.33%
North34.18%21.82%
22
8
Farm Class increase has outpaced
the Residential Class increase
%Change Tax Class Growth
(compared to 4 years ago)
Farm ClassResidential Farm increase
Classis (X) times
higher than the
Res increase
Elgin51.4% 12.18% 4.02
Wellington52.01% 12.6% 4.1
Peel Region74.3% 22.1% 3.4
York Region 25.5% 27.2% 0.9
Simcoe23.6% 8.7% 2.7
23
9
Total 2012 Farm Class Tax Rates in
Elgin County
TownshipFarm Tax Rate (per
$1,000 of assessment)
Aylmer 4.218
Southwold2.804
Bayham3.536
Central Elgin4.01
Dutton-Dunwich 3.769
Malahide3.829
West Elgin3.598
24
10
2012 Property Assessment
To avoid a tax burden shift onto the Farm
Class assessment base, municipalities need
to set the farm class tax rate at less than
25% of residential class tax rate.
Upper/Single Tier Farm Tax Ratiolower than
Municipality25% in 2010 year
Durham20%
Halton Region20%
Hamilton20%
Ottawa20%
Chatham-Kent 22%
North Bay 15%
25
11
Tax Burden Shifted onto Farmland if not mitigated in
Elgin County (at 2012 Mono farm tax rate)
Taxation Year Accumulated additional
farmland tax collected due to
assessment increase if tax rates
do not change & ratio remains
at 25%:
2013$ 647,540
2014$ 1,295,080
2015$ 1,942,620
2016$ 2,590,157
26
12
Farm Class Tax Ratios that would
avoid a tax burden shift in Elgin
Taxation Year Farm Tax Ratio(of
Residential)
201225%
201322.8%
201421,1%
201519.7%
201618.5%
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13
Thank you
28
14
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REPORT TO COUNCIL
FROM: Jim Bundschuh - Director of Financial Services
DATE: September 14, 2012
SUBJECT: Impact of 2012 MPAC Reassessment
INTRODUCTION:
The last Municipal Property Assessment Corporation (MPAC) province-wide
assessment update was based on a January 1, 2008 valuation date and affected
the 2009-2012 tax years. The assessment released this fall is based on a
January 1, 2012 valuation date and will affect 2013-2016 tax years. Properties
experiencing a market increase from 2008 to 2012 will have the valuation
phased-in for property tax calculation purposes over the four year tax cycle. All
market decreases will be applied immediately to the 2013 tax year. Attachment I
shows that residential properties increased by 12% over the four-year period (3%
per annum), but farm properties increased by over 50% (11% per annum). Since
increases will be phased in over four years, the impact on the farmers will be
gradual; however this still translates into double digit tax increases for the farm
portion of these properties for each of the next four years. Since a family farm is
comprised of not only farm assessment, but also residential assessment, the
combined impact would be much less. On a typical 100 acre family farm, the
impact on the upper and lower tier taxes for the four years is an increase of
approximately $85 per year on their prior $2,300 tax bill or 3.6% (calculated using
no change in total taxes collected across all property classes – any levy
increases passed by the County or its partner municipalities will be additive).
DISCUSSION
:
The property tax system legislated by the Province of Ontario attempts to
achieve fair taxation through the use of Current Value Assessment (CVA). In
recognition that the tax impact of changes in valuation will be difficult to absorb
by individual property owners in a single year, the province mandated that
increases be phased-in over four years to soften the blow. Without this phase-in,
farmers would see 50% increases in their farm class assessment in 2013.
It is important to look at the increase with a long-term perspective. The change
from the 2005 to the 2008 CVA on farms represented a 2% increase per annum
compared to the residential increase of 5% per annum. Based on the 2005 CVA,
farms were paying 8% of the levy and residential properties were paying 76%.
With the loss of industrial property assessment, the 2012 CVA will see both farm
and residential percent share of levy rise by 2% to 10% and 78% respectively.
The loss of industrial assessment base is an unfortunate reality that has placed
added burden on both farms and households.
31
If the County and its partner municipalities wished to soften the blow further,
changes in the farm ratio could be considered (see Attachment II for legislative
authority for changing farm tax ratio). However, it is also important to note that
tax ratios were never foreseen as a means of providing temporary tax relief. Tax
ratios are typically altered either for fairness or strategic reasons.
The farm/managed forest tax rate is currently only 25% of the residential rate,
whereas all other rates are greater than the residential rate. Hence, it could be
argued that the fairness argument would only apply to those classes with higher
rates.
The strategic reason for changing ratios would be to attract businesses to the
County. At this time Chatham/Kent is the only comparable municipality with a
farm tax ratio below 25%, with their ratio being set at 22%. In a report to Council,
th
titled “Tax Ratios” dated November 28, 2011, the County’s Economic
Development department concluded that tax rates play a minor role in the site
selection of businesses, with quality of place being the primary decision factor.
Although the focus of that report was on commercial and industrial properties, its
conclusions apply equally well to farm businesses.
CONCLUSION:
Despite the fact that the purpose of tax ratios was not to soften the blow of CVA
changes, it does not preclude the County from using it for that purpose.
However, given the disadvantages of using it for that purpose (as outlined in
Attachment III), the most important of which is the transfer of tax burden onto
residential rate payers, the use of ratios as a means to effectively extend the
phase-in period would be ill advised.
It is important to remember the benefit farmland had relative to residential
properties in the 2005 reassessment. Also, when looking at an average family
farm, the increase due to reassessment will only be approximately 3.6%
annually.
The contents of this report were reviewed at a meeting held on September 14,
2012 between the CAOs and Treasurers of the County and municipalities. It was
the consensus of all that the following recommendations be put forward for
Council’s deliberation.
RECOMMENDATION:
THAT the current four-year Current Value Assessment (CVA) phase-in be the
sole tool used to soften the 2012 reassessment impact on property taxes; and,
THAT tax ratios for all property classes be maintained at their current level.
Respectfully Submitted Approved for Submission
Jim Bundschuh Mark G. McDonald
Director of Financial Services Chief Administrative Officer
32
Attachment I
33
34
35
Attachment II
Authority to Modify Farm Tax Ratio
Municipal Act 2001, S.O. 2001, c25 Restrictions, tax ratios for certain
property classes 308.1
Farm property class
(3) The tax ratio for the farm property class prescribed under the Assessment Act
is 0.25 or such lower tax ratio as the upper-tier municipality or single-tier
municipality may establish. 2002, c. 22, s. 153.
Ministry of Municipal Affairs and Housing Website – Section 4 The Fiscal
Context
Reduced Rates for Farm and Managed Forest Classes
In 1998, the provincial government specified that farm lands, farm outbuildings
and managed forest properties could only be taxed at 25 per cent of the
residential rate established in the municipality.
Under recent changes initiated by the provincial government, upper tier and
single tier municipalities have been given the option to further reduce the
municipal tax rate on the farm property class to below 25 per cent of the
residential tax rate. Lowering the farm tax ratio in one year does not, however,
prevent your municipality from raising it in a subsequent year, as long as the ratio
does not exceed the 25 per cent limit. The tax ratio for education purposes
remains at 25 per cent of the residential rate for farm and managed forest
properties.
36
Attachment III
Modify Farm Tax Ratio to Soften Impact of CVA increase
Assumptions:
A change in tax ratio was to be only temporary spreading out the impact of
the 2012 valuation over an eight-year period.
The ratio would be lowered over the next four years.
The ratio would be ramped back to 25% in the subsequent four years.
Result: Instead of facing tax increases in excess of 10% for four years under the
CVA phase-in regime, the farmers would have increases of less than 10% but
over an eight-year period.
Pros:
Impact on farmers over next four years would be less.
Cons:
Transfers tax burden to other tax categories, the largest of which is
residential properties.
Significant tax increases on farms would continue for eight years, long
after the root cause (increased property value) for the increase is
forgotten.
Managing farm taxes through tax ratio manipulation would be difficult
given the numbers of factors that are involved:
Experience from the Capping regime, a temporary mechanism put
o
in place in 1998 to soften the impact of the move to CVA on
commercial and industrial properties, has shown how difficult it is to
manage and virtually impossible to get out of.
The next CVA valuation to take effect in the later half of the next
o
eight years. It is impossible to predict where farm prices will stand
in 2016 relative to other properties, but at this point in time it
appears that the increases in farm valuations that MPAC witnessed
from 2008 through January 1, 2012 are continuing. A London Free
Press article “Area Farm Prices Surge” dated September 11, 2012
(see Attachment IV) states that London area farms have shot up
hundreds of thousands of dollars in the last 12 months. If increases
in farm prices over the next four years continues to out pace that of
residential properties, then 2017 would require further reductions to
the farm tax ratio.
37
Area farm prices surge | Local | News | The London Free PressPage 1of 3
AttachmentIV
By John Miner, The London Free Press
Wednesday, September 12, 20129:16:21 EDT AM
If you have a yearning to buy a farm and get back to the land, it’s going to take deep pockets and a friendly lender to satisfy.
That is if you can even find a farm for sale.
Prices for farms in the London region, particularly the Woodstock and Stratford regions, have shot up hundreds of thousands of dollars
in the last 12 months, according to report released Monday by Re/Max.
And in southern Huron and parts of Perth County, basic 100-acre parcels are changing hands for as much as $1.8 million, up from
$1.4 million in 2011, the Re/Max market trends report found.
“The market is strong,” said Kevin Williams of Re/Max a-b Realty that has offices in Oxford and Perth counties.
“We’ve seen land trend higher and it will plateau and then it will go back up again. This rise has been a little quicker than anyone
expected,” he said.
One-hundred-acre farms were bringing $15,000 an acre in the Woodstock to Stratford area, up from $9,000 in 2011, Re/Max says.In
south Huron and mid-Perth County, prices per acre climbed to $16,000 to $18,000.
Williams said higher crop prices, now treading in record territory, are partly responsible for the increase farm prices.
38
http://www.lfpress.com/2012/09/10/farm-land-prices-soar19/09/2012
Area farm prices surge | Local | News | The London Free PressPage 2of 3
Another factor is few farms are hitting the market as farmers at retirement age are keeping their farms and renting the land instead of
selling, he said.
“That is definitely tightening the supply,” Williams said.
Re/Max is forecasting farm prices in many areas will continue to rise.
Though prices in Southwestern Ontario have surged, they are nowhere near the highest prices in the country. In the Fraser River
valley, farm land is bringing $40,000 to $60,000 an acre, the same as it did in 2011.
john.miner@sunmedia.ca
---------
FARM LAND PRICES
According to the Re/Max market trends report
London-St. Thomas
•Price per acre up almost $1,500 an acre during last year.
•Farm land selling for $10,500 an acre in east Middlesex, $7,500 in west Middlesex, $8,500 in east Elgin County, $6,500 in west
Elgin County, 9,500 in north Lambton and $5,900 in south Lambton.
Woodstock and Stratford
•Price-per-acre risen to $15,000 from $9,000 a year ago.
•100-acre parcels the most sought after
•Properties sell within 60 days or sooner
Bruce and Huron counties
•Prime farm land in south Huron and mid-Perth commands $16,000 to $18,000 an acre, up from $10,000 to $14,000 an acre.
•Farmland sells within 15 to 30 days
•Local buyers are leading the charge, but there is the odd offshore buyer of land
Chatham-Kent
•Starting prices range from a low of $5,000 to a high of $16,000 an acre with the most popular price point between $7,000 and
$9,000
•50 to 100-acre parcels the most coveted.
Wednesday, September 19, 2012
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http://www.lfpress.com/2012/09/10/farm-land-prices-soar19/09/2012
2014 FISCAL OUTLOOK
January 14, 2014
40
STRATEGIC VISION
1- MAINTAIN SERVICE LEVELS
2-LOW TO MODERATE USE OF RESERVES
3-AFFORDABLE TAX INCREASE
41
ADVANCED PLANNING PAYS OFF
$3.0 M IN EFFICIENCIES FOUND DURING LAST FIVE
BUDGET CYCLES
STAFF CONTINUE TO FIND $400,000 A YEAR IN
EFFICIENCIES
RESERVES ARE BEING DRAWN DOWN AND
EVENTUALLY REPLENSHED TOWARD END OF 10 YEAR
PLAN
42
THE GOOD NEWS
2013 SAW ANOTHER SURPLUS OF APPROXIMATELY
$2.0M
NEW AMBULANCE BASE OPENED IN DUTTON/DUNWICH
WEST END SATELLITE OFFICE OF EBRC A SUCCESS
IMPROVED RESPONSE TIMES IN BAYHAM
MULTI-YEAR ACCESSIBILITY PLAN UPDATED
NEW PARTNERSHIPS WITH CENTRAL ELGIN (IT) AND
MIDDLESEX COUNTY (ACCESSIBILITY COORDINATOR)
TEMPORARY RELOCATION OF DEXTER LINE
SUPPORT FOR SHEDDEN AND AYLMER BRANCH
LIBRARIES
43
THE COST PRESSURES FOR 2014
LEGAL/ARBITRATION COSTS LIKELY TO RISE
INSURANCE UP $80,000
CROSS BORDER BILLING FOR AMBULANCE LIKELY
NEW GAS TAX FORMULA REDUCES ALLOCATION
NEW AMBULANCE CONTRACT EXPENSE
INFLATION
LIBRARY STAFFING HOURS
44
THE BIG TICKET ITEMS FOR 2014
TERRACE LODGE RENOVATIONS- ARCHITECT TO BE
CHOSEN , RFP DEVELOPED, CONTRACT AWARDED BY
END OF YEAR (ALREADY BUDGETTED FOR THIS)
MUSEUM, POA COURTS, COUNCIL CHAMBERS PROJECT
TO TENDER IN 2014 (ANTICIPATED IN BUDGET)
SHEDDEN AND AYLMER LIBRARY INTEREST FREE
LOANS (ANTICIPATED IN BUDGET PLAN)
SHORELINE MANAGEMENT PLAN (CONTRIBUTION IS IN
BUDGET)
WOWC BROADBAND PROJECT (IN BUDGET)
45
DEXTER LINE PREFERRED OPTION
At the January 8, 2013 County Council meeting, Council
deferred proposed capital spending for the Relocation of
Dexter Line unless the County received assistance through a
funding program.
The County's MII and SRN-MIF applications during 2013 were
unsuccessful.
Minor
relocation of Dexter Line was constructed during 2013
to keep the road safe and open for a projected 5 to 10 years.
The Capital Plan includes the full $4.5 million cost for the
permanent relocation solution and can be "pulled ahead" at
any time.
Staff will continue to apply for funding for Dexter Line.
46
The Starting Point for the 2014 Long-Term Plan
2013 budgeted for:
a net loss of $1.5 million (a degradation in
Municipal Position)
A further $1.2 million in losses was planned
from 2014-2015
Cumulative effect of 4% tax increases per
annum return County to favourable net income
by 2016
2022 ending Municipal Position is up, but
represents a reduction in real terms
47
Current New Items Incorporated into the Plan
Impact on
OngoingOne-Time Tax Rate
($000) ($000)
Included in 2014 Plan
Total Council Driven193(100)0.7%
Total External Factors(447)832-1.4%
Staff Efficiencies above
$400,000 Target 01,935 0.7%
Total Tax Decrease/(Increase) above 4% target0.0%
(Risks)/Opportunities above 4% targetTBD
Net effect is a potential levy increase of4.0%
48
Council Driven Changes
Impact on
Ongoing One-Time Tax Rate
($000) ($000)
Bayham Trial hours
contained in new base
contract189 -0.7%
Shoreline Erosion Study-(75)0.0%
Broadband Initiative-(25)0.0%
WOW Membership Fee(2) -0.0%
Council Development 5 -0.0%
Total Council Driven193(100)0.7%
49
External Driven Changes
Impact on
OngoingOne-Time Tax Rate
($000) ($000)
New Ambulance Provider(116)(148)-0.5%
Legal/Arbitration(100)150-0.3%
Social Services net of OMPF (56) - -0.2%
Insurance Premiums(80) --0.3%
Gax Tax(75) --0.3%
Ford Tax Appeal (2009-13)-8300.3%
Amb. Cross-Border Billing(20) --0.1%
Total External Factors(447)832-1.4%
50
Staff Driven Changes
Impact on
OngoingOne-Time Tax Rate
($000)($000)
Homes Efficiencies300(25)1.1%
Library Staff Service Inc (26) 50-0.1%
Engineering Projects2300.1%
2013 Op/Cap Performance1,700 0.7%
Other Depart. Efficiencies126(20)0.5%
Total Staff Driven4001,935 2.3%
Efficiency Target400 -1.5%
Staff Efficiency to Target 01,935 0.7%
51
Risks & Opportunities
Impact on
Ongoing One-Time Tax Rate
($000) ($000)
Tax Rate before Risks & Ops4.0%
GrantsTBD -TBD
Tax Rate including Risks &
OpportunitiesTBD -TBD
52
Analysis of Potential Tax Increase including Risks
Ford prior year tax settlement will offset the lost
Federal Gas Tax Revenue
2013 Performance to Budget improvements since
the Nov 26, 2013 Council presentation anticipated
to provide a further 0.2% reduction in the tax
increase
Impact of grants needs to be determined at next
Council meeting
53
THE RESULTS
Estimated that a levy increase of 4.0% is
commitment through its ten-year plan
A reduction in the tax rate is expected of
approximately 0.5%
All subject to final approval and adjustments at
February Council meeting
54
Next Steps
January 28 Council Meeting:
2014 Capital Budget
2014 Grants
February 11 Council Meeting:
2014 Operating Budget
55