Abbotsford City Hall

Police building expansion may push up Abbotsford tax rates: consultant

City may be able to keep tax increases below 5%, committee told

Tax rates are forecast to go up in the years to come as the city looks to build an expanded police headquarters. But long-term planning may help the city avoid particularly steep tax hikes over the next five years, consultants told a city committee last week.

Initial projections of tax rates over the next five years forecast an increase as high as 5.6 per cent after work begins on a $60 million expansion to the Abbotsford Police’s headquarters. But a consultant hired by the city to help craft a new long-term financial plan for the city says a few tweaks could lower the yearly cost and reduce the scale of such a spike – although a moderate rise in tax rates should be expected.

RELATED: Proposed $60 million expansion of Abbotsford Police HQ moves forward

Julia Cziraky told a city committee that by changing the debt repayment schedule, tax increases could be kept below 4.5 per cent in 2023 and 2024. After those two years, tax increases would then be projected to fall back to between two and three per cent.

“The impacts are quite significant … the residential tax rate spike in 2023 is reduced from a 5.6 % increase to a 3.6% increase.”

Over the last half-decade, council has sought to keep tax increases level with the cost of inflation. This year’s tax revenue increase came in at 2.12 per cent, slightly below the rate of inflation, after the city decided to reduce a slightly greater tax hike because of COVID-19 uncertainties.

FROM APRIL: Abbotsford scales back tax hike

Cziraky said the city’s policy will still be to keep tax increases roughly in line with inflation, and to use debt and other financial instruments to ease the pain when that might not be possible.

“There’s plenty of capacity to fund key longterm capital projects through debt to minimize sudden tax rate shocks,” she said.

Other major capital projects that will factor into the city’s fiscal future include a new downtown fire hall, road interchanges and overpAsses, and a multi-sport tournament and training facility.

Several water and sewer upgrades are also on the horizon. Cziraky said they expect the city will need to raise water rates each year by 2.5 per cent and sewer rates by four per cent to keep maintaining and improving infrastructure.

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