Saturday, December 31, 2011

City of Victoria looking for a consultant to review their Revenue and Tax Policy Review and Permissive Property Tax Exemption Policy

The City of Victoria is looking to engage a consultant in January to have a draft Revenue and Tax Policy Review and Permissive Property Tax Exemption Policy review report ready by February 28th and a final report by March 6th.


The closing for the RFP is January 9th.   


Here is the text of the RFP
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THE CORPORATION OF THE CITY OF VICTORIA REQUEST FOR PROPOSAL 11-065
REVENUE AND TAX POLICY AND PERMISSIVE PROPERTY TAX EXEMPTION POLICY REVIEW
TERMS OF REFERENCE

INTRODUCTION
The City of Victoria is requesting proposals from experienced qualified consultants who are interested in conducting a review of the City of Victoria’s Revenue and Tax Policy and its Permissive Property Tax Exemption Policy.

BACKGROUND
The City of Victoria has two Council policies relating to revenue and property taxes; Revenue and Tax Policy; and Permissive Property Tax Exemption Policy. As the City faces accelerating costs and ongoing pressure to provide additional services, there is a need to find alternative sustainable revenue sources. Many of the services the City provides are regional in nature as Victoria is the downtown core for the 13 municipalities in Greater Victoria. In addition, rising costs are putting pressure on the City’s main funding source, property taxes. As a result, there is a need to conduct a review of these policies to ensure a long-term focus that is fair and sustainable to the tax payers.

The City’s tax base consists primarily of residential and commercial tax payers. The City’s residential tax payers have the lowest household income in the region and therefore have a limited ability to pay increasing property taxes. The City’s commercial tax payers primarily consist of small businesses that also have a limited ability to pay increasing property taxes. The City’s Revenue and Tax Policy, and its Permissive Property Tax Exemption Policy must strike a sustainable balance between the services the City provides, alternative revenue sources and the allocation of property taxes between the property tax classes.

OBJECTIVE
The objective of this project is three fold:

  1. To develop a revenue strategy and provide recommendations on changes to existing revenues and opportunities for new revenue generation.
  2. To review and recommend changes to the City’s Revenue and Tax Policy to ensure the policy supports the City’s Strategic Plan, tax payer ability to pay, fair distribution of property taxes amongst property classes, and best practices.
  3. To review and recommend changes to the City’s Permissive Property Tax Exemption policies and practices – including the Permissive Property Tax Exemption Policy, and Heritage and Revitalization Exemptions – to better reflect the City’s strategic priorities and budget challenges.

SCOPE OF WORK
The scope of work for the Revenue and Tax Policy and Permissive Property Tax Policy Review, in addition to researching and making recommendations on best practices, includes the following:

Revenue Strategy
a. Assessment of Current Revenue Sources - Review existing revenue sources and identify opportunities to increase.
b. Identification of New Revenue Sources – Review BC legislation and other municipalities to identify opportunities for new revenue sources.

Policy on Distribution of Property Taxes Among Property Classes
a. Assessment of Current Tax Policy - Review the City of Victoria's policy on distribution of property taxes among property classes, and analyze the impact of these policies on Victoria's business, industrial and residential taxpayers, and other classes of property, highlighting key issues and identifying any inequities.

Include as part of this work the following:

  1. Evaluation Criteria - Recommend appropriate criteria to use to assess the fairness of the City's property tax policies. Evaluation criteria may include benefits received, ability to pay, accountability, stability and predictability of taxes for an individual property from year to year, cost of administering and collecting the tax, socioeconomic impacts of the tax and/or impact of the tax on the competitiveness of Victoria businesses.
  2. Appropriate Measures - Recommend appropriate measures to use in order to assess the impact of the City's property tax policies on taxpayers within each of the City's property classes, to determine the fairness of the City's property tax policies, and to understand the impact of Victoria's property taxes on commercial competitiveness.

The Consultant is asked to select measures that can be calculated using supportable, proven methodology, and to ensure that any comparisons made between Victoria and other cities are meaningful, taking into account the considerable differences among municipalities in property tax and assessment systems, methodologies, market values and property types.
b. Fair Tax Distribution Target - Recommend a definition of a fair tax distribution target for each class of property in the City.
c. Comparable Municipalities – Determine which municipalities the City should be comparing its tax levels and tax distribution targets to. Determine how the City compares to those municipalities. Any recommendations relating to the City’s current tax distribution, tax distribution targets, and tax levels should align with those comparable municipalities.
d. Implementation Strategy - Recommend a strategy that would allow Council to arrive at the recommended fair tax distribution target, with specific timelines identified.
e. Long-Term Policy and Mechanism - Recommend a long-term policy and mechanism that would allow Council to permanently maintain a fair tax allocation among the City's property classes.

Property Tax Exemptions
a. Assessment of Current Policies – Review the City of Victoria’s current Permissive Property Tax Exemption Policies, Heritage Tax Incentive Program; and the Revitalization Property Tax Exemption Bylaw. Provide a recommendation on if the City should be providing permissive tax exemptions, and if so, consideration as to an appropriate cap, the length of time an exemption will be granted, changes to eligibility criteria, and a strategy to phase out “grandfathered” properties that do not meet the Permissive Property Tax Exemption Policy criteria, to better reflect the City’s strategic priorities and budget challenges. Refer to the City’s Civic Investment Program review to ensure consistency with its framework.
Include as part of this work the following:

  1. Evaluation Criteria - Recommend appropriate criteria to use to assess the fairness of the City's property tax exemption policies. Evaluation criteria may include the degree to which an organization complements City services, benefits received, ability to pay, accountability, stability and predictability of taxes for an individual property from year to year
  2. Appropriate Measures - Recommend appropriate measures to use in order to assess the impact of the City's property tax exemption policies on taxpayers within each of the City's property classes, to determine the fairness of the City's property tax exemption policies, and to understand the impact of Victoria's property tax exemptions on remaining taxpayers. Also, recommend appropriate measures to assess if the exempted organization has reasonably achieved the goals for which the exemption was granted.

b. The Consultant is asked to select measures that can be calculated using supportable, proven methodology, and to ensure that any comparisons made between Victoria and other cities are meaningful, taking into account the considerable differences among municipalities in property tax and assessment systems, methodologies, market values and property types.

c. Fair Permissive Tax Exemption Level (cap) - Recommend a sustainable maximum for Permissive Tax Exemptions, and rules around length of permissive tax exemptions.
d. Implementation Strategy - Recommend a strategy that would allow Council to arrive at the recommended level of Permissive Tax Exemptions, including phasing out grandfathered properties.
e. Long-Term Policy and Mechanism - Recommend a long-term policy and mechanism that would allow Council to permanently maintain a fair and sustainable permissive tax exemption level.

PRINCIPLES AND GUIDELINES
The Consultant is asked to undertake their work using the following principles and guidelines.

  • Equity - The Consultant should have an appreciation of the impacts of any changes to the tax distribution on all classes of taxpayers.
  • Sustainability - The recommendations should be consistent with the City's long-term objectives concerning economic, fiscal and social sustainability.
  • Independence and objectivity -The Consultant should serve independently, and make recommendations to Council that will result in the best possible outcome for Victoria as a whole, without favouring any one stakeholder group over another.
  • Simplicity - Any recommended changes to the City's property tax policies should be simple, transparent, and readily understandable by the City's taxpayers and other stakeholders.
  • Municipal Taxes Only - The work of the Consultant should be limited to a review of the distribution of property taxes levied by the City of Victoria, and should not include property taxes collected by the City of Victoria on behalf of other taxing authorities.

CONSULTANT’S EXPERIENCE
The Consultant should have a strong understanding and experience with BC Assessment, the BC Community Charter, municipal property tax issues, municipal services in general, the challenges facing municipalities, and Local Government Economics.

REFERENCE DOCUMENTS
The Consultant will be provided with the following reference documents, which should guide and inform the review:

  1. Revenue and Tax Policy
  2. Permissive Property Tax Exemption Policy
  3. Heritage Tax Exemption Program
  4. Revitalization Tax Exemption Bylaw
  5. Corporate Strategic Plan
  6. Civic Grant Review
  7. Corporate Business Plan
  8. Victoria Sustainability Framework
  9. Official Community Plan
  10. Financial Sustainability Policy
  11. Citizen and Business Survey
  12. Input/communications from business groups such as the Chamber of Commerce
  13. Budget Reports
  14. Staff Reports


MEETINGS
The consultant should plan to attend four (4) meetings at City Hall during this project.

SCHEDULE
The Consultant is expected to deliver the draft report to the Director of Finance by February 28, 2012
The Consultant is expected to deliver the final report to the Director of Finance by March 6, 2012

DELIVERABLES
The Consultant will be required to provide the following deliverables to the City’s Director of Finance:

  1. Six (6) copies of the draft Revenue and Tax Policy Review and Permissive Property Tax Exemption Policy review report
  2. One (1) electronic copy of the draft Revenue and Tax Policy and Permissive Property Tax Exemption Policy review report, including options for alternative revenue sources for Council’s consideration.
  3. Ten (10) copies of the final Revenue and Tax Policy and Permissive Tax Exemption Policy review report
  4. One (1) electronic copy of the final Revenue and Tax Policy and Permissive Tax Exemption Policy review report
  5. One (1) electronic copy of recommended amended Revenue and Tax Policy in City of Victoria format
  6. One (1) electronic copy of recommended amended Permissive Tax Exemption Policy in City of Victoria format.
  7. One (1) PowerPoint presentation
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