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Brandon finances going into 2024 budget

Brandon finances going into 2024 budget

Adam

Joined: Mar 2005
Posts: 15663

Adam
Joined: Mar 2005
Posts: 15663

Brandon finances going into 2024 budget
12/16/2023 at 1:01 AM

For anyone that hasn't had a chance to read, the City has released details on its financial state and a look toward where things may go from here as things progress into the 2024 budget and beyond.

Please read the link below for the city press release along with a link to a very thorough contracted report that details circumstances that have led to current state, recommendations and the report's conclusion that "a significant increase in municipal taxes is required for the City to fund its operating and infrastructure needs over the next decade."
The direction the City ultimately takes in terms of the budgeting, expenses, taxation & revenue will flow through the budgeting process into early next year.

With how passionate of opinions the topic of budgeting & taxation in general can bring out and the importance of constructive discourse within the community, I'd really emphasize the importance of looking through the report and all available information as part of forming an informed opinion.

City press release is at:
https://www.brandon.ca/public-notices-details?var=6632

the direct link to the report itself is at:
https://pn.brandon.ca/2015/pdfs/City_of_Brandon_Sustainability_Plan_Phase_1_Report_-_12_Dec_2023.pdf
A Youtube archive of a media briefing done on Friday including a fairly lengthy media questioning session is at:
https://www.youtube.com/watch?v=oVGxRuNTms4
Iceman69
Joined: This month
Posts: 513

Iceman69
Joined: This month
Posts: 513

grow
12/16/2023 at 4:25 AM

I've always said that tax increases need to be minimum 1%. Knew this was bound to happen. But now it may have to come down to even more then that. Poor planning and excuses over the years in trying to save money.

Unfortunately, people do not like the city to grow for new infrastructure where we can benefit from additonal tax revenue.
JessieJay
Joined: Mar 2016
Posts: 796

JessieJay
Joined: Mar 2016
Posts: 796

Shocking
12/16/2023 at 5:23 AM

13% per year between 2024 and 2027, then 3% from 2028 through 2033. Or second scenario, 9% per year for that same time frame.

Some home owners are going to have a hard time with tax increases like that.
Abbysmum
Joined: Mar 2009
Posts: 5039

Abbysmum
Joined: Mar 2009
Posts: 5039

I agree
12/16/2023 at 10:43 AM

JessieJay said "13% per year between 2024 and 2027, then 3% from 2028 through 2033. Or second scenario, 9% per year for that same time frame.

Some home owners are going to have a hard time with tax increases like that. "
I think back to ebrandon threads from years past, and people (usually seniors, but not exclusively so) were talking about how they couldn't afford any sort of tax hike and afford to remain in their homes. It's going to be devastating to those groups to see such large, sudden jumps.

I don't even think the reports address the huge jump our water/sewer is taking the next few years. They are going up something like 75% between now and 2025.
https://www.brandonsun.com/local/2023/10/25/citys-handling-of-water-rates-called-unacceptable

There are consequences to not having regular, steady increases to our taxes and utilities. It just kicks the can down the road.
Iceman69
Joined: This month
Posts: 513

Iceman69
Joined: This month
Posts: 513

Bad
12/16/2023 at 11:40 AM

I do not see how they can cut budgets anymore than they have. This will all be dumped on tax payers, unless Brandon starts opening the door the corporate businesses.

Also they city should implement that empty commercial buildings should get a luxury/hefty tax or some sort of tax added to the owners tax bill for being vacant. For example, old sobeys south location, make them pay 1 million in taxes just for the sobeys building alone.

Edited by Iceman69, 2023-12-16 11:44:15
Exhausted
Joined: Nov 2010
Posts: 1760

Exhausted
Joined: Nov 2010
Posts: 1760

Agree
12/17/2023 at 7:29 PM

Iceman69 said "I do not see how they can cut budgets anymore than they have. This will all be dumped on tax payers, unless Brandon starts opening the door the corporate businesses.

Also they city should implement that empty commercial buildings should get a luxury/hefty tax or some sort of tax added to the owners tax bill for being vacant. For example, old sobeys south location, make them pay 1 million in taxes just for the sobeys building alone.

Edited by Iceman69, 2023-12-16 11:44:15"
Vacant buildings whether business or residential need to be taxed heavier especially long term vacancy.

Taxpayers who owe taxes need to be made to pay rather than all the excuses.

I believe that increases done over time avoids large increases in one go. Unfortunately we are probably in that situation now.

As to budget everyone needs to read and put specific's and constructive ideas forward. Not just negative that’s too high, etc.
Adam

Joined: Mar 2005
Posts: 15663

Adam
Joined: Mar 2005
Posts: 15663

Budget
12/17/2023 at 11:25 PM

A few random thoughts…

-The USA has a pretty great municipal bond setup that allows bonds issued by municipalities to be income tax exempt. It’s a real win-win in that investors are incentivized to invest in communities and those municipalities can probably get a good chance at a better cost on that debt than traditional debt/loan instruments. I know over these last couple years I’d have been buying some personally if available. If there's appetite for this kind of thing it has to be a solution with buy-in from the Federal level, but advocacy starts at the local level. Would love to see the Feds explore this, be it that there needs to be nudging from the civic or provincial (or both) levels. Still have to be mindful of how much debt is being taken on and the cost to carry that debt vs necessity of the spend to begin with but potentially part of a bigger picture plan.

-under the current property tax system, residential properties can end up taking on an outsized portion of tax increases. First noticed it during the infamous 2012 budget but good chance it goes back even further in assessment years (every two years). This is because residential real estate appreciated so much during hot market times and commercial wasnt appreciating at the same rate, so when a mill rate was getting applied against the whole tax base regardless of property type it was resulting in higher increases on a lot of single family residential homes than what the city wide mill rate increase was. It’s possible that *next year* (2025 budget) when the newest assessment hits that this effect could show itself again based on how home prices ran up since when the most recent 2021 assessment was done. That would then carry through to 2026 when those same new assessment values would be used.

-At the other side of the coin to above, there will be many making the point that commercial properties seeing an outsized portion of an increase could have serious unintended consequences of their own. If there ends up being a residential real estate market correction it could have the opposite effect as above and offload a disproportionate amount of the new burden on commercial property owners. This would all be something that council if they saw it necessary would have to decide to take on as they consider priorities across the board, but I think there’s basis here to examine in comparison to other cities what the ratio is and has been as far as tax contribution by various property types. There are some cities that have the ability to set different mill rates by property class if they want to have more control of how a tax increase is distributed by property class

-remember with talk of city tax increases that the percent you’re seeing is on the municipal part of the tax bill as opposed to the whole bill which includes what funds the school division needs. That budget is still to come and isn’t necessarily going to be anywhere near a recommendation of 47%. You can see any given property’s breakdown on the assessment/tax page on the City’s site at:
https://gisapp.brandon.ca/webmaps/taxassessment/

-For anyone that hasn’t watched the YouTube replay of the press conference Friday, it’s a good example of the role that media plays in working toward wider understanding. Some questions can be difficult, but an important part of getting to all sides of a topic like this
Adam

Joined: Mar 2005
Posts: 15663

Adam
Joined: Mar 2005
Posts: 15663

Budget
1/14/2024 at 12:52 PM

Just looking at the 2024 budget docs that are posted. As of now there's a forecast increase of 11% in the Property Tax line this year from $47.2M to 52.5M. Over four years the increase to 70.7M by 2027 would make for a 49.8% increase from 2023.
A few things to keep in mind when evaluating that....
- this is the proposed budget. City is going through the budgeting process for 2024 to determine the final approved budget and posted some info in this thread

- that will be on the city side of the bill. Brandon School Division side tbd

- that number would be the total property tax collected by the city. Somewhere within that is some revenue from an increase in the tax base

- property assessment values over those years will have an impact on what individual properties have against whatever mill rates are set in those years to collect the taxes deemed necessary for city expenses. Unclear how for example residential properties may go up or down in proportion to commercial properties in future assessments
The city has posted the proposed 2024 budget docs at:
https://www.brandon.ca/budget/proposed-2024-budget
Adam

Joined: Mar 2005
Posts: 15663

Adam
Joined: Mar 2005
Posts: 15663

Budget
1/29/2024 at 1:41 AM

Just to clarify one of the above points again since I gather there’s some inaccurate information circulating on social media. Tax numbers and projections during city budgeting would relate to the city side of the property tax bill. If a person goes to the property tax assessment page on the city website and looks up a given property it’ll show you how much of that property’s tax bill is municipal and how much of it is school division. Any number to do with city of Brandon budget *only* applies to that municipal component of that tax bill and not the entire property tax bill like some circulating info is incorrectly giving the impression. To be able to project the whole bill you would have to know what BSD is budgeting and if they're even publicly projecting that far into the future
As far as BSD’s side of the equation, they’ve posted their schedule at: https://www.bsd.ca/page/8172/budget-consultations
It would also be not correct to come away with the impression that a 49.8% increase in property tax collected by the city by 2027 would be a 49.8% increase in municipal property tax on an average home since over those years there will inevitably be some growth in the assessment base (basically new homes to share some of that burden by bringing in some new revenue). Maybe just a couple or a few percent per year in assessment growth and so highly unlikely to change that the projections could lead to an historically big tax increase over those years... but that would be a question to ask during the budgeting process when projections are made.
tlr
Joined: May 2010
Posts: 633

tlr
Joined: May 2010
Posts: 633

Wondering
1/29/2024 at 8:48 AM

what percentage did you overpay your taxes, when you paid last years tax bill ?
PrimeConvoy

Joined: Nov 2012
Posts: 562

PrimeConvoy
Joined: Nov 2012
Posts: 562

Not that simple
1/29/2024 at 10:37 AM

Iceman69 said "I've always said that tax increases need to be minimum 1%. Knew this was bound to happen. But now it may have to come down to even more then that. Poor planning and excuses over the years in trying to save money.

Unfortunately, people do not like the city to grow for new infrastructure where we can benefit from additonal tax revenue. "
Right now growth isn't paying for itself, and we knew it wouldn't.

As the emerging areas grow, particularly in the Southwest and Southeast corners of Brandon, infrastructure such as streets, lighting, water/sewer distribution, overland drainage, sanitation, and transit are needed to expand to these areas, and that is what is costing the City more than ever, which is why development charges are being increased so much.

The truth of the matter is that growth is outpacing the rate at which the City is taxed. More infill growth is needed to lessen the burden of emerging growth and all the infrastructure growth cost associated with it.
wheelrider
Joined: This month
Posts: 82

wheelrider
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Posts: 82

Infill housing has its drawbacks too.
1/29/2024 at 4:17 PM

When you put a couple 4 plexes on a block that had single houses on the lot previously it causes problems too. The sewer system was not designed for that much flow. The Hydro grid was not meant to supply 6 extra houses. And thats without the electric car chargers that we'll need in the next 11 years. Parking of extra vehicles.

Also would like to mention unless you are one of the 2 large developers the city does not make it easy for growth in this city. They put some demands on people who want to build or retrofit land. For example they make you plant so much green space on an existing property. But go downtown to some of these lots. Yes they had to plant trees but there is no caveat to look after those trees or green space so after a few years the look like crap, overgrown and wild. I know a few projects that have been scrapped because the city just made it too hard and took too long for permits and inspections.
Flele
Joined: May 2021
Posts: 99

Flele
Joined: May 2021
Posts: 99

Not correct
1/30/2024 at 4:06 PM

Hydro won’t approve a connection for a multi family dwelling if there isn’t capacity. City won’t approve if there isn’t sewer capacity. So that’s not right.
Sure upgrades will be required everywhere with EV and electric heating adoption, but not for infills.
PrimeConvoy

Joined: Nov 2012
Posts: 562

PrimeConvoy
Joined: Nov 2012
Posts: 562

This is intersting
1/31/2024 at 10:07 AM

wheelrider said "When you put a couple 4 plexes on a block that had single houses on the lot previously it causes problems too. The sewer system was not designed for that much flow. The Hydro grid was not meant to supply 6 extra houses. And thats without the electric car chargers that we'll need in the next 11 years. Parking of extra vehicles.

Also would like to mention unless you are one of the 2 large developers the city does not make it easy for growth in this city. They put some demands on people who want to build or retrofit land. For example they make you plant so much green space on an existing property. But go downtown to some of these lots. Yes they had to plant trees but there is no caveat to look after those trees or green space so after a few years the look like crap, overgrown and wild. I know a few projects that have been scrapped because the city just made it too hard and took too long for permits and inspections. "
There are quite a few allegations in your post, care to elaborate?

What processes does the City have in place to make it easier for any developer over others?

Also, are you against green spaces? Would you rather have dense housing with no boulevards, sidewalks, trees, grass, bike paths, and parks?

What projects have been scrapped?

If you look around, there are a at least 2 developments that have started and stalled, and not because the City made permitting too difficult, If anything, it is too easy for bad developers to get permits.
Oh Canada
Joined: Mar 2010
Posts: 1392

Oh Canada
Joined: Mar 2010
Posts: 1392

Real world example
1/31/2024 at 11:59 AM

Adam said "
Just to clarify one of the above points again since I gather there’s some inaccurate information circulating on social media. Tax numbers and projections during city budgeting would relate to the city side of the property tax bill. If a person goes to the property tax assessment page on the city website and looks up a given property it’ll show you how much of that property’s tax bill is municipal and how much of it is school division. Any number to do with city of Brandon budget *only* applies to that municipal component of that tax bill and not the entire property tax bill like some circulating info is incorrectly giving the impression. To be able to project the whole bill you would have to know what BSD is budgeting and if they're even publicly projecting that far into the future
As far as BSD’s side of the equation, they’ve posted their schedule at: https://www.bsd.ca/page/8172/budget-consultations
It would also be not correct to come away with the impression that a 49.8% increase in property tax collected by the city by 2027 would be a 49.8% increase in municipal property tax on an average home since over those years there will inevitably be some growth in the assessment base (basically new homes to share some of that burden by bringing in some new revenue). Maybe just a couple or a few percent per year in assessment growth and so highly unlikely to change that the projections could lead to an historically big tax increase over those years... but that would be a question to ask during the budgeting process when projections are made.

"
At the last special city council meeting councilor Parker put forward a real world example on the impact of municipal tax increases would have on a residential property in Brandon .

the example was a property that would estimate to sell for $350,000.00 based on a 8% increase in municipal taxes ( city tax portion) that would increase that properties taxes by $122 a year or $10 a month.

This is the most simple example of the impact of what I would suggest will be about the increase we will see in taxes.
Oh Canada
Joined: Mar 2010
Posts: 1392

Oh Canada
Joined: Mar 2010
Posts: 1392

infill and new development
1/31/2024 at 12:20 PM

PrimeConvoy said "There are quite a few allegations in your post, care to elaborate?

What processes does the City have in place to make it easier for any developer over others?

Also, are you against green spaces? Would you rather have dense housing with no boulevards, sidewalks, trees, grass, bike paths, and parks?

What projects have been scrapped?

If you look around, there are a at least 2 developments that have started and stalled, and not because the City made permitting too difficult, If anything, it is too easy for bad developers to get permits. "
The city has basically 3 developers that control 95% of the land for new development . The bottom line is they own or have control of this land and have put up there own dollars to buy it and develop it . With that they also control who builds on that land . Would suggest at this time that any development in the south end is on hold as there is not sewer and water to support development. It will be multiple years before their will be services so more than 3/4 of the land in the city is not able to be developed into any type of housing or commercial development. This is the outcome of the one more year kicking the can down the road of land that was annexed years ago into the city that we all new needed services to be developed.

On the topic of infill suggest that people need to define what that is? Is that bare land sitting empty that would be developed into housing? There is little land that meets this definition. If it is tear down a single family home and build a duplex or a 8 plex that is different . There has been a lot of this that people are not aware of . Take a drive around the city and look for yourself. To buy a existing home and redevelop it into a multiple units is not cheap. Any house you are looking at $180,000 plus and that is a tear down. Then say you build a 4 plex at $200,000 plus a door . Now you have close to a million dollar 4 plex in the middle of houses 70 to 100 years old and you need $1400 plus for a two bedroom 2 bath 1000 sq feet unit. How many people are willing to sign loan documents to put there money on the line for this type of money? Not many!
PrimeConvoy

Joined: Nov 2012
Posts: 562

PrimeConvoy
Joined: Nov 2012
Posts: 562

Well
1/31/2024 at 5:00 PM

Oh Canada said "The city has basically 3 developers that control 95% of the land for new development . The bottom line is they own or have control of this land and have put up there own dollars to buy it and develop it . With that they also control who builds on that land . Would suggest at this time that any development in the south end is on hold as there is not sewer and water to support development. It will be multiple years before their will be services so more than 3/4 of the land in the city is not able to be developed into any type of housing or commercial development. This is the outcome of the one more year kicking the can down the road of land that was annexed years ago into the city that we all new needed services to be developed.

On the topic of infill suggest that people need to define what that is? Is that bare land sitting empty that would be developed into housing? There is little land that meets this definition. If it is tear down a single family home and build a duplex or a 8 plex that is different . There has been a lot of this that people are not aware of . Take a drive around the city and look for yourself. To buy a existing home and redevelop it into a multiple units is not cheap. Any house you are looking at $180,000 plus and that is a tear down. Then say you build a 4 plex at $200,000 plus a door . Now you have close to a million dollar 4 plex in the middle of houses 70 to 100 years old and you need $1400 plus for a two bedroom 2 bath 1000 sq feet unit. How many people are willing to sign loan documents to put there money on the line for this type of money? Not many! "
There is truth to what you are saying, but most, if not all of those infill developments you are talking about are replacing vacant or dilapidated houses that are a huge drain on your tax dollars as a result of break-ins, vandalism and fires. It's a choice of evils, do you want your property value to go up, or do you want to live in a decaying neighbourhood with increased crime?

The V&D By-law can only do so much as a band aid fix, and with housing prices where they are, entering the housing market is near impossible for most people. And, building a single detached home in that area isn't feasible for a developer wanting to make money, again...the housing market.

So, smaller developers have to be crafty in finding funding for infill development, which means going to CMHC with their hands out to fund low income housing developments. But let's be clear, "affordable" housing is just a term for housing that will be affordable by the average family with 2 stable incomes.

In short, that big alphabet company does well during a housing market boom, and they do poorly when there is a housing market bust. The number of multi-family starts in Brandon nearly doubled the number of single family starts, and this is a trend that we are likely going to see well into the future. So, don't bet on a company that has a bulk of their investment into the construction of single detached homes.

Edited by PrimeConvoy, 2024-01-31 17:02:39