Cost drivers in West Vancouver tax rates

Mar 5, 2021

In West Vancouver, the question is sometimes asked, “Why are costs so high, when the population is not increasing, and may even be decreasing?”. The answer is that costs to maintain municipal services relate only marginally to the size of our population.

Streets, parks, water and sewer pipes, public swimming pools and tennis courts, trails, and facilities cost the same to provide and maintain whether few or many people use them. Fire Department costs are driven by the number of fire halls, which in turn relates to geography and coverage, not to the number of people living in the houses. Police costs actually rise if there are empty houses because these attract vandalism and burglary. West Vancouver is a well-established community with a fully developed utility and street system, a very high number of parks and trails, two community centres, and many sports fields. The costs to maintain these things continues to rise with inflation, and as fewer and fewer people can afford to live in the community, the cost per capita for maintaining all these things inevitably goes up.

West Vancouver has been slowly losing population for years, and for years the solution to lowering the taxes per capita was to cut costs. The inevitable result was that assets were left to deteriorate, which is why West Vancouver’s deferred maintenance problem is so large. Of course, the alternate solution is to increase West Vancouver’s population so that more people can live here and help pay for the community services. Along with a much more vibrant community, this in itself would cause per capita costs to go down.

Instead, compared to the rest of the Lower Mainland, West Vancouver has been very slow to welcome any form of densification or development. This is a major factor contributing to higher taxes and costs. A closer look at what really drives municipal costs in this municipality is needed to break this down further. The majority of municipal costs are driven by a few important factors, all of which have a strong effect on costs in the District of West Vancouver:

Density

It is much cheaper to provide municipal services to denser forms of development (strata and apartments) than to less dense forms (single-detached dwellings). This is because most municipal costs are linear: pipes and roads, obviously, and less obvious things like parks, police, fire, and even planning. Density makes for efficiency in service delivery. Conversely, the more spread out everything is, the more it costs to provide the services. West Vancouver has some of the most eccentric and spread out development in the Lower Mainland, with numerous cul-de-sacs, large lot sizes, and large houses driving high service demands. The same population living in more compact housing forms could be provided with municipal services at far less expense.

Geography

Building and maintaining a road, a trail, or a water pipe, up the side of a mountain or down onto a beachfront, is quite a bit more costly per metre than building the same infrastructure on flat, level terrain. West Vancouver has probably the most challenging geography in the Lower Mainland—it is costly to provide and maintain services here. The District’s long, narrow shape, steep terrain, waterfront subject to flooding, and houses built on cliffs and other challenging places make it very difficult and expensive to keep a functioning water, sewer, and road system intact.

Age of Infrastructure

Municipalities like Surrey and Burnaby, where ongoing development is common, get many of their older infrastructure replaced and made new by developers. Older municipalities like the City of Vancouver, New Westminster, and West Vancouver have to bear all the costs of maintenance and replacement for aging infrastructure ‘in-house,’ and our budgets and tax rates reflect that. All municipalities are playing ‘catch up’ on asset management, but some of us have a lot more to catch up on than others. Not only is Surrey’s infrastructure mostly new, but their practice has been to rip up any neighbourhood that is old and replace it. For instance, Port Kells used to be a charming rural area, but now it's just row-upon-row of townhouses. It's doubtful the same type of development will ever happen in West Vancouver.

Level of Services

Everyone realizes that different communities provide different levels of service, but most don’t really acknowledge what this means for costs. West Vancouver provides a very high level of service for things like community centres and sports programs, the library, the Seawalk, and over 150 parks. Many of these are regional draws, comparable to, or better than, what much larger communities such as Richmond, Burnaby, and even the City of Vancouver provide. In addition to the obvious costs, there are hidden costs to provide enhanced services, such as providing a local police force and a local bus service. To support these local services, the District faces HR, legal, communications, and administration costs. These costs are absorbed by TransLink (buses) and RCMP (police) in most other lower mainland communities.

North Shore ‘premium’ 

In the Lower Mainland, it is quite common for contractors to charge up to 30% extra to provide services on the North Shore. Anything the District buys on a contract that involves transporting materials or moving workers to sites on the North Shore will cost more than in other parts of the Lower Mainland, because of the traffic delays created by the North Shore transportation system. Contractors, whose operations generally are not located on the North Shore, insist on being compensated for the extra cost of getting here, and (particularly) for the extra cost for their workers to get home at the end of the day. Indeed, we have been told that jobs on the North Shore are routinely refused for exactly this reason.

Lack Of Industry

On top of these factors, which drive up costs for West Vancouver, there is an additional factor that affects residential taxes. That is the proportionate share of the overall taxes that the residential properties in West Vancouver must pay. Almost all the other Lower Mainland municipalities with waterfront have port industry on that waterfront. These major industrial properties pay a very high proportion of the total municipal tax bill, often as much as 20%. Tax on light industrial (warehouse) properties and commercial (retail and office) properties generally contribute at least another 20–30%. So, outside of West Vancouver, 40–50% of municipal taxes are not being paid by homeowners. West Vancouver has no major or light industrial properties, and a very small commercial tax base, leaving the tax burden to be carried by the homeowner.

Community Character

While the factors mentioned above (unique geography, spread-out development, high levels of service, lack of port industry) cause costs in West Vancouver to be higher, it should be noted that these same factors contribute to the very high property values enjoyed by this community. It is highly doubtful that the community wants to encourage industrial development on the waterfront or increase density in areas currently occupied by single-detached dwellings. However, without an increased population base, costs for services per capita will inevitably continue to be significantly higher here than in other communities.

2021 Budget

The proposed budget for 2021 supports Council’s Strategic Goals. It also reflects the District's response to the pandemic and the on-going commitment to providing high-quality services and programs to the community in a fiscally responsible manner.

Learn more about the proposed budget at westvancouverite.ca/budget: you will find detailed financial schedules, a summary of highlights for this year, public questions and answers, and a helpful video presentation. The online engagement is open until Tuesday, February 9 at 4 p.m.

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