2018 NRRM Council Preliminary Budget January 31, 2018 2018 Budget - - PowerPoint PPT Presentation

2018 NRRM Council Preliminary Budget

January 31, 2018

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2018 Budget Process

 On January 31, 2018, Regional Council directed staff to move forward with

public engagement based on the preliminary budget presented.

 The full preliminary budget is available online at

www.NorthernRockies.ca/engage

 This presentation has been prepared to assist in reviewing the budget and

includes information to help navigate though the municipal budget document and presents material critical to understanding how municipal budgeting and taxation work.

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2018 Budget Process

 In addition to this online presentation, NRRM Council and Staff will be hosting

an open house on February 22, 2018 from 2:00 to 7:00 pm.

 If you are unable to make it to the open house, you can still submit your

comments and any questions via e-mail to admin@northernrockies.ca.

 The final 2018 Budget Meeting is scheduled for Saturday, March 17, 2018 @

9:00 am at Municipal Hall.

 Council will be provided the submitted public comments prior to the final

budget meeting.

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2018 Budget Open House

Residents and businesses are invited to participate in the upcoming open house to provide input into the 2018 Northern Rockies Regional Municipality capital and operating budgets. Thursday, February 22, 2018 2:00 pm to 7:00 pm Northern Rockies Regional Recreation Centre Can’t make it to the open house?

Send your comments or questions via e-mail by Monday, February 26, 2018 to admin@northernrockies.ca.

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2018 Budget Process

Budget Preparation Preliminary Budget Presentation Public Comment and Feedback Period Council Public Comment Review Final Budget Meeting Jan 31 Open until Feb 26 March 17

” “

The goal of a municipal budget is to allocate resources to public services and projects, and balance the resources drawn from the community against the demands for services and projects, while keeping municipal taxes within acceptable limits and ensuring that services are sufficient to allow economic growth and social stability.

BLAND & RUBIN: 1997

Part I – the foundation

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Purpose of the Budget

 A municipal budget serves as a policy

document, financial plan, and

• perations guide to achieve Municipal

priorities as identified by Council.

 The budget consists of operating &

capital revenues and expenses as well

• utlines council direction regarding

financial matters such as reserve levels, grant usage, and debt servicing.

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Budget Terminology

When reviewing this presentation and the preliminary budget document, the following terms may be of assistance. Operating Budget: the budget for expected revenues and expenditures based on daily municipal activities. Capital Budget: the budget attached to major maintenance, special projects, and capital projects. User charges and fees: fees imposed on services intended to recover all or part of the costs associated with providing the service (for example: Aquatic Centre admission fees, permit fees, etc.) Municipal Property Tax Levy: the tax bill issued to home owners and businesses for owning real property in the Municipality. This revenue is used to fund programs and services for the Municipality.

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Budget Terminology

Infrastructure Development Contribution Agreement (IDCA): In 2013 the NRRM was successful in negotiating the IDCA, a 20 year funding agreement with the Province of BC to fund the renewal and replacement of critical infrastructure. Annual Infrastructure Development Plan (AIDP): The AIDP is the annual infrastructure plan that must be submitted to the Province as part of the IDCA Agreement.

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Property Taxes

 Levying property tax is the main method for a local government to collect the

funds required to provide a variety of services such water, sewer, fire protection, streetlights, airport, cemetery and many more.

 Some services and the level of service provided are mandated by legislation

while other services are based on the needs and wants of the specific community.

 In addition to collecting taxes to pay for Municipal services,

the NRRM collects taxes on behalf of other public authorities such as School Taxes. Once collected, that tax revenue is then remitted to the other public authorities.

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What is the tax levy and how is it calculated?

 In basic terms, the levy is calculated as the difference between

approved estimated expenses and other anticipated revenue (other than taxation)

Expenses less Revenue = Tax Levy

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What is property assessment?

 An assessment is the determination of a property's

market value, classification and applicable exemptions each year.

 BC Assessment determines the current assessment roll

property assessments reflecting their physical condition and permitted use as

• f October 31, using a valuation date of July 1, in the year immediately prior to

the annual assessment roll.

 For more information about BC Assessment works, visit

https://info.bcassessment.ca/about-us/how-BC-Assessment-works.

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Relationship Between Assessment and Taxation

 Each municipality is responsible for ensuring that each property owner pays his

• r her share of taxes. Property assessment is the method used to distribute the

tax burden among property owners in a municipality.

 A common misconception is that a significant change in your assessed value

will result in a proportionately significant change in your property taxes. The most important factor is not how much your assessed value has changed, but how your assessed value has changed relative to the average change for your property class in your municipality or taxing jurisdiction.

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Property Classes in the NRRM

 BC Assessment places property in one or more of nine classes, based on

the property’s type or use. Within the NRRM, we have the following property classes:

 Class 1: Residential  Class 2: Utilities  Class 4: Major Industry  Class 5: Light Industry  Class 6: Business  Class 8: Recreation/Non-profit  Class 9: Farm

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2018 Assessment

BC Assessment Completed Roll Jan 2018 BC Assessment Revised Roll 2017 Increase/(Decrease) $ % Residential 329,385,086 360,083,211

• 30,698,125
• 9%

Business 178,239,392 214,209,292

• 35,969,900
• 17%

Industry 1,408,319,849 1,441,973,546

• 33,653,697
• 2%

Other 1,562,759 1,620,865

• 58,106
• 4%

TOTAL 1,917,507,086 2,017,886,914

• 100,379,828
• 5%

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Bringing Assessment and Taxation Together

 Local governments use the assessment base of the entire

municipality and the required taxation amount to determine what the tax rates will be the coming year for the various property classes. Revenue Required (Tax Levy) Assessment = Tax Rate

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What does it all mean?

 A couple key points to remember:

 While assessments may increase and decrease, the costs of providing Municipal

services do not significantly change unless service levels change.

 A budget can also change from year to year based on capital projects, debt

servicing, reserves and finance charges.

 This engagement process is an opportunity to have your say, e-mail comments

• r questions to admin@northernrockies.ca. All submissions will form part of the

budget review process.

Part II – the numbers

The following pages summarize the 2018 Preliminary Budget presented to Council

• n January 31, 2018. To review the entire preliminary budget in detail, please visit

www.NorthernRockies.ca/engage.

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2018 Budget Guiding Principles

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 In preparation of the 2018 Preliminary

Budget, the following guiding principles were used:

▪ Maintain existing service levels ▪ Continue to identify and incorporate

• perational efficiencies

▪ Improve customer service ▪ Continue investment into priority

infrastructure through the NRRM contributions to the IDCA Program

▪ Creating enhanced transparency and

accountability

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2018 Preliminary Budget - Outcomes

Maintains current Municipal service levels Includes capital expenditure sufficient to maintain $10M IDCA Provincial Funding Results in a 5.2% decrease in total municipal tax levy over 2017 ($1.2M) Carry forward of $10.5M for capital and major maintenance projects continuing into 2018 Pay down of $2.2M on temporary borrowing

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2018 Preliminary Budget - General Notes

$50,000 increase in 2018 Airport budget attributed to Transport SMS Audit and potential soil remediation concerns with Transport Canada $62,000 increase related to property insurance costs due to previously undervalued property Mobile Equipment (M&E) Reserves have been set to pre- 2017 levels Debt payments on borrowing have increased over 2017 due to principle repayment schedule 2017 year end has not closed and the 2017 actuals are not final As this is a preliminary budget, changes to budgeted numbers (i.e.: carry overs, grant funding, etc.) may

• ccur prior to final budget meeting and approval

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2018 Preliminary Budget - Notes to Personnel Costs

Increase to annual health benefit costs of approximately $25,000 due to raise in premiums Reduction of 2 full-time management positions (Airport Business Manager and Roads & Projects Supervisor) 2018 budget and 2017 actuals include wage accruals for potential wage liability Some reallocation of wages amongst departments has occurred to more accurately reflect operations No budgeted wage increases for Management Staff

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2018 NRRM ANNUAL BUDGET 2018

This page is the summary of the total 2018 NRRM Preliminary Annual Budget and shows all revenue, expenses (including capital), required tax levy, carry over, reserves, and surplus transactions.

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NRRM Budget Documents

Departmental Operating Summary These pages show a department’s day-to-day operating costs and do not include things such as capital and

• ther fiscal items. These pages are

useful to compare a department’s

• perating budget from one year to

the next.

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NRRM Budget Documents

Departmental Annual Budget These pages show a department’s total expenses and revenue including

• perating, capital, major

maintenance, and other fiscal items. For some departments, these pages can be 2 to 3 pages in length. These pages also break out the department budget into operating areas.

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A Balanced Budget

 The Community Charter states the a

municipality must prepare a balanced financial plan which includes all of the expenditures and revenues for the taxation year.

 The NRRM generates revenue from a

number of sources including:

▪ User charges and fees collected ▪ Frontage and parcel tax ▪ Grants (Federal, Provincial, others) ▪ Infrastructure Development

Contribution Agreement (IDCA)

▪ Property taxes ▪ Other income including interest ▪ Funds carried over between years is

not considered revenue 2018 Sources of Revenue $51M

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A Balanced Budget

 The 2018 Preliminary Budget

includes expenses of approximately $62M.

 The 2018 Preliminary Budget

includes a carry over $10.5M for capital projects from previous year.

2018 Estimated Expenses $62M

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Total Budgeted Municipal Levy 2014 – 2018

(no Policing Costs)

20,000,000 20,500,000 21,000,000 21,500,000 22,000,000 22,500,000 23,000,000 23,500,000 24,000,000 24,500,000 25,000,000 2014 2015 2016 2017 2018 Municipal Levy 24,919,860 24,697,900 23,761,290 22,983,290 21,768,600

The 2018 Preliminary Budget estimates the total municipal tax levy to be $21.7M.

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2018 Capital/Major Maintenance & Projects

 A large portion of the annual budget is allocated

towards capital, major maintenance and special projects.

 These pages includes all capital, major

maintenance, and special projects (including Rec Centre pay down) not part of regular operations and includes capital projects in the AIDP Submission.

 In reviewing the Capital Budget, note that the

majority of the expenses (83%) are covered by a combination of grants, carry over, and IDCA Funding.

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2018 Capital/AIDP Submission

 2018 AIDP Submission includes eligible capital

expenditures based on the IDCA Agreement plus

• ther capital projects funded by grants for inclusion

into the AIDP Submission.

 The intent of the 2018 Annual Infrastructure

Development Plan (AIDP) Submission was to continue receiving the $10M Provincial IDCA contribution to fund capital projects related to asset renewal and improvements identified by our asset management program.

 The 2018 AIDP Submission also plans for future capital

expenditure by creating asset renewal and improvement “funding envelopes” for future expenditures defined by the asset management program.

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2018 Operating Budget by Area $19.8M

(includes community groups)

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NRRM Department Operating Budgets 2014-2018

(includes wages, services, supplies & utilities)

17,500,000 17,750,000 18,000,000 18,250,000 18,500,000 18,750,000 19,000,000 19,250,000 19,500,000 2014 2015 2016 2017 2018 Departmental Operating Budgets 18,212,990 19,373,740 19,445,430 18,955,190 18,872,310

These are the

• perating budget

totals of NRRM Departments only.

The notable increase from 2014 to 2015 is largely attributed to Phase 3 of the Recreation Centre (pool, climbing wall, & walking track).

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Protective Services Operating Budget 2014 - 2018

1,200,000 1,500,000 1,800,000 2,100,000 2014 2015 2016 2017 2018 Animal Control/Bylaw 142,810 138,470 140,220 137,480 127,750 EMO 12,950 13,260 19,250 22,300 18,840 Fire Services 1,614,010 1,667,200 1,690,640 1,739,170 1,747,910

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Public Works Operating Budget 2014 - 2018

• 1,000,000

2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 2014 2015 2016 2017 2018 Cemetery 35,760 34,390 47,590 26,830 52,440 Solid Waste 1,294,320 1,233,050 1,215,340 1,215,950 1,197,550 Water 1,437,140 1,384,960 1,328,420 1,318,660 1,264,250 Sewer 552,270 511,650 519,600 528,930 510,850 Public Works (Roads & Grounds) 3,771,260 4,296,610 4,130,820 3,892,900 3,550,660

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Airport Operating Budget 2014 - 2018

The notable increase from 2017 to 2018 is attributed to additional expenses related to Transport Canada items.

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Recreation & Facilities Operating Budget 2014 - 2018

• 500,000

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000 2014 2015 2016 2017 2018 Recreation 3,750,740 4,459,910 4,727,300 4,680,670 4,876,490

The notable increase from 2014 to 2015 is attributed to Phase 3

• f the Recreation

Centre (pool, climbing wall, & walking track).

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Regional Development & Planning Operating Budget 2014 - 2018

• 200,000

400,000 600,000 800,000 1,000,000 1,200,000 1,400,000 2014 2015 2016 2017 2018 Building Inspection 217,570 197,540 198,510 176,340 183,390 Economic Development/Tourism 460,690 522,020 572,860 562,990 563,120 Planning 514,200 465,050 452,640 420,730 412,500

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General Government Operating Budget 2014 -2018

2,600,000 2,700,000 2,800,000 2,900,000 3,000,000 3,100,000 3,200,000 3,300,000 2014 2015 2016 2017 2018 General Government 2,974,560 3,063,870 3,041,640 2,889,190 2,936,000

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Community Groups & NRRHD

 In addition to NRRM Departments, the 2018 Preliminary Budget includes

• perating and capital grants to a number of Community Groups including:

▪

Grants to Community Groups (Council Grant in Aid Program, Arts Council, Search & Rescue, Toad River Area Club, & FN Seniors Society)

▪

Poplar Hills Golf Course

▪

Library

▪

Museum (Historical Society)

▪

Phoenix Theatre

 Northern Rockies Regional Hospital District (NRRHD)

 Council has a meeting tentatively scheduled with Northern Health representatives

• n February 26, 2018 @ 5pm to discuss the 2018 NRRHD Budget and Capital Plan

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Sample Properties

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What this table shows is that based on this preliminary budget, property taxes will either be close to equal

• r decrease

as long as property assessment went down or remained equal.

When the draft budget is presented to Council at the final budget meeting, it includes an estimation of property taxes for a baseline group and a sample group of real properties within the NRRM. The summary table below was created for Council based on the 2018 Preliminary Budget to show the resultant property taxes to the baseline and real sample property groups.

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The Value of Municipal Services

The chart on the right shows the monthly costs of municipal services for an in-town residential property with an assessed value of $164,000 based on the 2018 Preliminary Budget compared to some

• ther common

monthly expenses.

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Want more information?

 You can download the full 2018 Preliminary Budget at www.NorthernRockies.ca/engage  Attend the budget Open House on Thursday, February 22 between 2:00 and 7:00 pm at

the Northern Rockies Regional Recreation Centre

 Visit www.bcassessment.ca for information about how BC Assessment works  Submit your comments and questions on the 2018 Preliminary Budget to

admin@northernrockies.ca by Monday, February 26, 2018.

 Attend the final budget meeting on Saturday, March 17, 2018 at 9:00 am in the Bear Pit at

Municipal Hall