[PPT] - 2020 2024 Draft Financial Plan Special Council Meeting, April 30, PowerPoint Presentation

SLIDE 1

2020 – 2024 Draft Financial Plan

Special Council Meeting, April 30, 2020

SLIDE 2

Overview

Financial Planning Process Update
2020 Budget Summary
2020-2024 Property Taxation
Next Steps

SLIDE 3

2020-2024 Financial Planning Process

October 31, 2019 – First Special Budget Meeting
December 3, 2019 - Public Consultation
January 31, 2020 – Second Special Budget Meeting
February 18, 2020 – Public Consultation
April 14, 2020 – Special Budget Meeting – Closed
April 30, 2020 – Special Budget Meeting
Financial Plan and Annual Tax Rates Bylaws presented May 12th

SLIDE 4

Financial Impact and Risks

Risk to revenues:

– Inability to provide some services – Reduction in demand for District services – Reduction in users’ ability to pay

Risk to cash flow:

– Delay in receivables – Refund of user fees collected to date in 2020 – Low operating, financial stability and cash reserves – High capital expenditures in 2019 and 2020

SLIDE 5

Immediate Financial Measures

Cancellation of recreation programming:

– Refunding fees for all future programs – Reduction in service level

Closure of the Community Children’s Centre:

– The Centre remains closed with the budget allowing for a September 2020 opening

SLIDE 6

Immediate Financial Measures

Suspend hiring of all temporary and seasonal employees in 2020 -

exception one temporary position in Public Works

Close monitoring of service delivery, service demand and user fee

collection

Delay hiring of positions – late 2020/2021
Transfer of $150,000 from general surplus to the Financial Stability

Reserve Fund

Reductions to expenditures in all service areas
Weekly cash flow projections

SLIDE 7

Financial Objectives and Priorities

Meet the current service delivery demands of the community
Establish appropriate services and service levels
Taxation levels must be reasonable
Essential services continue and are appropriately funded
Essential projects continue and are appropriately funded
Non-essential projects and services are deferred
Immediate cash flow needs are met

SLIDE 8

Financial Objectives and Priorities

Develop plans and policies that will generate and ensure stable

future revenues and cash flows

Create a five year plan that supports a resilient, efficient and

reliable municipality

Create a five year plan that considers the fiscal health of the

taxpayers and community at large

Maintain transparency to the community
Create a plan that responds to the current economic climate of the

community while maintaining essential services

SLIDE 9

Financial Tools and Strategies

Revenue Anticipation Borrowing Bylaw

– The establishment of $5,000,000 in short term credit to meet immediate cash flow needs in anticipation of current year taxation revenue – To meet operating expenditures to provide essential services – Transfer of taxes to other agencies in advance of collecting taxes

SLIDE 10

Financial Tools and Strategies

Encourage timely payment of utilities and taxes

– Accepting credit card payment for 2020 taxes, subject to an administration fee – Reduce taxation to an appropriate and feasible levels – Adjust tax due dates and penalties – Extending the due date of Quarter 1 utility billing to 90 days

Focus on plans and policies that will stabilize revenues and

manage risk

SLIDE 11

Ministry; MFA Correspondence

Focus on the budget and tax cycle
Ensure a strong cash position
Keep liquid investments in portfolios
Practice good financial management and stay the course
Prioritize core municipal operations
Use legislative tools that are in place
Defer expenses related to non-essential services and capital projects

SLIDE 12

Provincial Financial Support

Reduction of School Tax Rate for commercial property

– Relief directed to Class 4,5,6,7,8

Postponing late payment penalties on Commercial Properties

to October 1, 2020; Due date remains at July 2, 2020

Delayed remittance of School and Police Tax to December 31st

– Funds available for cash flow

Interest Free borrowing from capital reserves in 2020 only

SLIDE 13

Provincial Financial Support

Discretionary authority to delay tax sale
Extend Revenue Anticipation Borrowing

– Must be paid down by end of calendar year 2021

Deadline extension for annual reporting and SOFI Reporting
Deadlines will not be enforced for submission of audited financial

statements

Canada Summer Jobs – grant increased to minimum hourly wage;

may be an opportunity to add back summer students in the service areas of Parks and in Recreation

SLIDE 14

Financial Support to Organizations

Tofino-Long Beach Chamber of Commerce

– $20,000/year fee for services

Permissive Tax Exemptions

– Policy amendment; applications will go out to existing exemptions

SLIDE 15

2020 Arts & Culture/Council Grants

All applicants have been contacted
Most applicants can modify proposals
One project has been cancelled
Applications will come forward to Council after the Financial

Plan is adopted

SLIDE 16

MRDT and OAP

Tofino Housing Corporation (THC)

– Loan Guarantee $70,756 per year; July 2019 to July 2024

Tourism Tofino
Deferral of remittance date to September 30th

– Reduction in MRDT and OAP due to late reporting and reduced

ccupancy for 2020

SLIDE 17

2020 BUDGET UPDATE

SLIDE 18

2020 Budget Update

Changes were made to the follow areas:

– Reduction in revenues based on current demand – Reduced operating expense to meet current service levels – Reduction to Council travel and indemnities – Reduced travel & training budgets in all departments – Reductions to service levels – Cancelled projects – Deferral of projects to future years

SLIDE 19

Consolidated Project Listing

Projects Removed from Financial Plan:

– Community Hall Kitchen Upgrades – Indoor Recreation Facility – Duty Officer Vehicle – Fire Department – West Gibson Street Improvements – Btw First and Third – Community Hall Roof Improvements – Replaced by Condition Assessment – Structural Mitigation Project – Grant dependant

SLIDE 20

2020 Budget Summary

C&I Levy – 10% of proposed $137,178; funded from general

surplus

0% 2020 General Tax Increase
Non-market change revenue added to 2020 tax levy: $23,300
Debt servicing $282,641: WWTP Interest only; long term debt;

THC loan guarantee

SLIDE 21

2020 Budget Summary

General Fund Contingency is set higher than in previous years:

$401,726 (Typical contingency $135,000)

– Higher contingency allows for more operational flexibility – Emergent expenditures are likely to be higher in 2020/2021 – Any balances can be transferred to operational/capital reserves

SLIDE 22

2020 Budget Summary

Water Fund

– 2018 and 2019 Surplus added to 2020 operations budget: $299,881 – Water fund contingency set at: $94,731 – Contribution from Financial Stability Reserve Fund balance: $60,000 – Minimize impact to user by keeping rates consistent for 2020 and plan for an increase January 1, 2021

SLIDE 23

2020 Budget Summary

Sewer Fund

– 2018 and 2019 Surplus added to 2020 operations budget: $501,580 – Sewer Fund contingency set at: $331,552 – Minimize impact to user by keeping rates consistent for 2020 and plan for an increase January 1, 2021

SLIDE 24

2020 Budget Summary

Total 2020 budget reduced by $1,795,345 since January 31st

– Most projects remain in the budget due to stable funding sources

Water and Sewer fees reduced by: $517,250
Reduction to General Fund other revenue: $403,973
Reassignment of 2019 Taxation: $122,423

SLIDE 25

2020 Revenues and Expenses Consolidated

See Consolidated Worksheet

SLIDE 26

2020-2024 Municipal Property Taxation

Total 2020 Municipal Taxation is reduced by approximately

$887,179 over 2019 taxation

– Removal of C&I Levy from taxation for 2020 – No tax increase on general taxation

Removal of debt servicing for the Indoor Recreation Facility
C&I Levy amounts modified for years 2021 to 2023
2% increase in years 2021-2024 to be revisited throughout the

the upcoming budget process

SLIDE 27

Capital and Infrastructure Levy

387,609 648,410 1,430,813 1,907,750 137,178 387,609 648,410 1,234,602 90% reduction 775,218 50% reduction 432,273 25% Reduction 476,938 25% Reduction

500,000

1,000,000 1,500,000 2,000,000 2,500,000 2020 2021 2022 2023 2024 Taxation Surplus Reduction to Levy

SLIDE 28

Breakdown of Municipal Property Taxation

1,000,000

2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 2019 2020 2021 2022 2023 2024 Demand Loan THC WWTP Debt/Other C&I Levy General Municipal

SLIDE 29

2020 Municipal Property Taxation

2019 Municipal Taxation Including $3,373,391 2020 Non Market Change Revenue $23,300 Base Level Municipal Taxation: $3,396,691 2020 C&I Levy $0 2020 WWTP Debt Servicing – Interest Only on $6,856,623 – (Deducts interest collected in 2019) $139,000 Demand Loan – THC $70,756 Other Debt Servicing – Reservoir; Ocean Park Staff Housing $72,885 Total 2020 Municipal Taxes $3,679,332

SLIDE 30

2019/2020 Assessment Comparison

Property Class 2019 Assessment (Revised Roll) 2020 Assessment (Revised Roll) Difference % Change Residential 837,589,802 968,346,002 130,756,200 15.6% Utilities 499,700 587,300 87,600 17.5% Light Industry 454,000 1,054,100 600,100 132% Business 231,822,244 255,400,424 23,578,180 10.2% Recreation/Non-Profit 6,267,900 6,684,000 416,100 6.6% Total 1,076,633,646 1,232,596,126 155,962,126 14.5%

SLIDE 31

2020 Non Market Change

Property Class 2020 Assessment (Revised Roll) Non Market Change Residential 968,346,002 11,104,400 Utilities 587,300 Light Industry 1,054,100 520,000 Business 255,400,424

4,586,100

Recreation/Non-Profit 6,684,000 Total Assessment 1,232,596,126 7,017,300

SLIDE 32

Draft Municipal 2020 Tax Rates

Tax rates are calculated by taking the your Assessed Value/1,000 X Tax Rate
Municipal Tax Rates calculated based on Revised Assessment Roll
Municipal Tax Rate includes: General Taxation for Services; Debt Servicing
C&I Levy funded from general surplus; $0 from taxation in 2020

Property Class 2020 Municipal Tax Rate Revised 2020 Municipal Tax Rate January 31 2019 Municipal Tax Rate Residential 2.04485 2.80722 2.89138 Utilities 38.02143 38.56856 38.42277 Light Industry 6.69240 9.18851 9.83068 Business 6.29810 8.64715 8.81943 Recreation/Non-profit 9.16874 12.58848 12.20841

SLIDE 33

2020 Municipal Taxation by Class

Property Class Assessment Value Municipal Taxes January 31 Municipal Taxes Revised Residential 968,346,002 2,725,717 1,980,126 Utilities 587,300 22,651 22,330 Light Industry 1,054,100 9,686 7,055 Business 255,400,424 2,208,487 1,608,538 Recreation/Non-Profit 6,684,000 84,141 61,283 Total 1,232,596,126 5,050,685 3,679,332

SLIDE 34

Draft 2020 Municipal Tax Comparison

Residential – Fred Tibbs Municipal Tax January 31 Municipal Tax Revised 2020 Assessment 395,600 $1,111 $809 2019 Assessment 395,600 $1,144

34

Residential – Neill Street Municipal Tax January 31 Municipal Tax Revised 2020 Assessment 609,000 $1,710 $1,245 2019 Assessment 433,000 $1,252

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