The smile on the face of Shape Properties president John Horton is understandable, but considering what this photo-op cost Abbotsford’s taxpayers what does Abbotsford Mayor George Peary have to smile about?

But then consideration of what effect their actions will have on taxpayers or their pocketbooks has never been a priority for Abbotsford’s mayor, councilors or city staff.

Admittedly this photo-op is costing the taxpayers of Abbotsford less than the photo-ops involving the Abbotsford Entertainment Sports Complex did; but the tax holiday giving rise to this photo-op may well be the council misjudgement that pushes the City of Abbotsford over the edge and sends it freefalling down into the abyss of financial crisis, perhaps even insolvency.

We are talking about a tax holiday (tax break) that works out to three years of $0.00 taxes on what is to be the largest shopping centre built in B.C. over the past 30 years.

We are also talking about a cost that is undoubtedly considered information taxpayers don’t need to know and information to be kept behind closed doors by our current mayor and council. One can hope that the new mayor and council (November 2011) will recognize this type of information as information those who pay the cost of decisions such as making the tax holiday/break that was suppose to attract new development retroactive to development already in the pipeline are entitled to know.

Hmmm; I don’t recall the tax holiday/break being retroactive as part of either the discussion or motion when mayor and council approved Jay Teichroeb’s dubious plan to use three years of $0.00 property taxes (spread over five years) to get developers to develop in Abbotsford by providing compensation to offset the barriers that were preventing their building in Abbotsford.

Although with Highway 1, a border crossing, an international airport and metro Vancouver just a short drive down Highway 1 it would seem that Abbotsford has much to offer developers – outside of its city council’s behaviour.

Still, it was predictable that Shape Properties and other developers who had projects in various stages of development would seek the same freebie that council was using to overcome developers reluctance to locate in Abbotsford and that council would find itself making their tax concessions/holidays/breaks retroactive for any developer that had not already made a significant investment in an Abbotsford development.

After all, leverage is all on the side of any developer with nothing (or close to nothing) invested and at stake in a development in Abbotsford. In those circumstances either developers would get the tax holiday/break or put their development(s) on hold; leaving council either to concede the tax holiday/break or lose those DCCs.

And while developers who have to much invested in a project not to complete the project canbe denied the tax holiday/break – what effect does denying a developer in that position the tax holiday/break have on that developer building any future development in Abbotsford?

The costs of making the tax holiday/breaks retroactive are only one facet of the can of worms council opened with its decision to grant holidays/breaks to satisfy its addiction to Development Cost Charges to finance Abbotsford City Hall’s spendthrift ways.

What the tax holiday/break does is to pull development into a current fiscal year from future years. At some point you simply run out of projects, or have a seriously reduced number of projects, that can be pulled from the future into your current fiscal year; also at some point pulling projects into your current fiscal year from the future will leave you without any projects in some future year (or years) – leaving the city without any Development Cost Charges (or at best significantly reduced DCCs) in that year (or years).

Similarly, when you end the tax holiday/break it leaves you in a vacuum of no, or significantly reduced, DCCs.

Either way the tax holiday/break is only a short term fix which creates longer term financial difficulties.

But the worst facet of city staff and council’s tax holiday/break decision is the extremely negative consequences the tax holiday/break will have on future city property tax revenue flows.

By giving future tax holidays/breaks for DCC cash now, council is borrowing from the future to fund council’s lack of planning and fiscal discipline in the current year. While this may save council from the consequences of its lack of fiscal discipline THIS year, it deals with this year’s problems not by addressing them but by pushing the reckoning into (near) future years.

The major consequences of city staff and council’s tax holiday/break are: forcing the city to grant retroactive tax holidays/breaks for projects that were already on the drawing board; pulling development out of the future into the current year with the result that in a near future year (or years) the city’s DCC revenue will suffer a significant reduction; the property tax reductions used to pull revenue into the current year to permit council to avoid, for this year, the consequences of council’s lack of planning and fiscal discipline will result in a significant reduction of property tax revenue flows in near (and not so near) future years; the developments that occur as a result of the tax breaks will, as they come online over future years require water, sewer and other city infrastructure that are inadequate to service the city’s current needs.

Council’s tax holiday/break ‘solution’ is going to require major infrastructure investments to provide services to the developments while at the same time the tax holiday/break ‘solution’ reduces the revenue flows of the city making it necessary to cut the city’s operating budget to match reduced revenues and raises the question of how much property taxes and debt will have to rise to fund city operations and the required infrastructure investments.

Tax breaks for DCCs now …live for today and ignore the future while digging the financial hole the city is in ever deeper.

Leaving citizens wondering ‘where are we going and why are we in this hand-basket’?