Abbotsford legal costs have more than tripled since 2021

The City of Abbotsford’s legal fees doubled to nearly $6 million last year as the municipality continues to deal with the legal fallout from the 2021 flooding disaster.

The city spent $5.9 million on “risk management” in 2023, according to audited financial statements released last week to Abbotsford council. That’s more than double the amount spent last year and quadruple the cost of legal fees in 2019.

Risk management

Most municipalities do not reveal just how much they spend on legal fees and related costs each year, but Abbotsford does. And for years, the amount has been growing steadily higher.

Between 2018 and 2020, the city was spending about $1.5 million on what Abbotsford’s financial statements call “risk management”—a category that sums up all of the municipality’s legal costs, including costs for claims against it, according to a city spokesperson. (Abbotsford’s books are more transparent about legal costs than most municipalities financial accounts, which usually don’t break out legal fees—or “risk management”—into its own category. )

But over the last five years, Abbotsford’s legal costs have ballooned to the point where they now exceed the city’s annual spending on its libraries.

In 2021, “risk management” increased to $1.8 million. In 2022, it jumped even more, to $2.8 million. And last year, such costs ballooned to $5.9 million.

There is no case-by-case accounting for the legal costs. But a city spokesperson said the latest jump in spending is a result of a change to the city’s insurance policy in 2022. Instead of being insured for up to $1 million in total claims in any one year; the city is now insured for up to $1 million per claim. That seems like it should reduce city legal costs, but a spokesperson says that the new policy also includes changes to how deductibles are applied, resulting in the higher costs.

While neither the city’s updated insurance policy nor its previous policy are publicly available, the 2021 flood and its legal fallout are likely to have pushed premiums up for the municipality. Abbotsford, along with the provincial government, is facing a class action lawsuit from Sumas Prairie business owners. And while it hasn’t been settled yet, legal fees stemming from that case are undoubtedly mounting.

Earlier this month, lawyers for the plaintiffs and the governments were in court for a week of hearings that will determine if the class action suit will be allowed to proceed to a trial and, if so, which property owners would be able to sign up and participate. Those defence costs would be included in the city’s “risk management” spending.

The city has also been more aggressive in taking property owners to court—especially those breaching the rules of the Agricultural Land Commission—which would have pushed up legal costs as well.

Last year’s legal spending trumped spending in a variety of other departments. It was four times the city’s economic development spending and almost identical to the sum of all operational expenses for Abbotsford International Airport. (With revenues exceeding $11.6 million, the airport actually made a $4.2 million profit.)

With the Sumas Prairie class action lawsuit possibly headed to trial this year or next, it seems unlikely the city’s legal fees will drop anytime soon.

Abbotsford’s other costs

The latest financial statements don’t just show how much Abbotsford is spending in court. It also shows how spending on various departments has changed over the years.

Between 2018 and 2023, Abbotsford’ population rose by about 12.6%. Over that same time period, the city’s total operations spending has increased at nearly double that rate.

Much of that is driven by increased police costs, which are easily the largest single expenditure, making up a little more than one-quarter of the entire budget. Police spending has risen by 28.6% since 2018. Fire and rescue services, which is a smaller but still sizable portion of all spending, has risen by about 38%. Parks, recreation and culture spending has increased by 28% since 2018. (Transit, library, and diking and drainage spending saw spending rise slower than the budget-wide average. Engineering costs have decreased substantially.)

But the quickest jump in spending is found among the city’s “general government services”—a hodgepodge collection of various programs, services, obligations and costs that don’t fall under a single, obvious category. Risk management is one such item in that budget, accounting for between 10% and 20% of the category.

In 2018, “general government” spending amounted to about $18.9 million—about the same amount as Abbotsford spent on its fire department. But by last year, such spending had nearly doubled from five years earlier, increasing to $35.9 million. That’s $10 million more than the fire and rescue budget, and now more than the city spends on all parks, recreation and culture programs in Abbotsford.

Some of that increased spending reflects significant new challenges. Spending on housing services, for instance quintupled from just $537,000 in 2018 to $2.9 million last year. But it also reflects the increasing size of the city government. It includes significant spending increases on communications and marketing (up 60% to $1.3 million), human resources (up 58% to $3 million), and bylaw enforcement (up 150% to $4 million).