City of Revelstoke 2013 budget process public comments

March 28, 2013

Mayor David Raven & City Councilors City of Revelstoke

Re: Municipal Fiscal Responsibility & Business Property Taxation

REVELSTOKE + CHAMBER OF COMMERCE

The Chamber Board of Directors and management have been approached by many local business owners and Chamber Members to address the issue of increasing business property taxes, specifically to Class 6. Our Policy & Advocacy Committee and Chairman, Nathan Weston, has been working with City staff and the 2013 Financial Focus Group to better understand the City's past budgets and the 2013- 2017 Financial Plan. This process has provided us a good understanding of the challenges that Council and Staff undertake to provide the services and programs that the citizens of Revelstoke benefit from.

The Chamber Board of Directors has three major concerns: 1. The overall spending of the City has increased alarmingly in the absence of any

significant growth in the town. The result is an onerous tax and debt burden on all members of the community, with no signs of slowing.

2. The taxation on small business is wildly disproportionate vis-a-vis the residential tax rate. 3. The budgeting process that is used by the City does not allow careful examination of all

proposed costs (not just increases) by Council and the general public so examination and discussion can lead to more informed decisions.

At the special Council meeting on February 19th, the Mayor's comments regarding earning a living wage, while referencing the City's unionized workforce, can be echoed to the business community at large. Ultimately, business property taxes and city fees are an expense that has become a burden to many local merchants and building owners. Councilor Benders comments that "very few people complain about tax increases" was of interest to the Chamber as this has not been our experience.

In response to this, The Revelstoke Chamber of Commerce held an open house for members, business owners and the general public on March 121

h, 2013. This was an opportunity to provide input into the Chamber's review of the budget and proposed property taxation increases. Throughout the day we had 57 participants of whom all but one Chamber Member felt the process was helpful.

Our comments and recommendations are enclosed . The Chamber of Commerce Board and Staff are committed to work with City Council and Staff to ensure our City is sustainable for citizens to live, work and play as well as being "Open for Business" to encourage future growth.

Respectfully,

Board of Directors Revelstoke Chamber of Commerce

REVELSTOKE + CHAMBER OF COMMERCE

Revel stoke Chamber of Commerce

Municipal Fiscal Responsibility & Business Property Taxation

Submitted: March 281h, 2013

By: Judy Goodman, Executive Director On Behalf of: The 2013 Chamber of Commerce Board of Directors

Steve Bailey, President Mike Vopni, Vice President Nathan Weston, Director Chelsea Lamont, Director Randy Driediger, Director

Scott Duke, Director Trevor English, Director Peter Nielsen, Director

Brydon Roe, Past President

2013-2017 FINANCIAL PLAN COMMENTS

Table of Contents

Executive Summary ...................... .. ........................... ............................................... .. .. .. ................ 2 Property Tax Equality ..................................................................................................................... 3 New Development and Economic Diversity ................. ........ .... ........... ........................................... 5 Fiscal Responsibility ....................................................................................................................... 6

General Administration ............................................................................................................... 6 Fire Department ......................................... .. ............................................................................... 7 Planning Department ....... ..... ....................................... ............... ............................ .................... 7 Public Works ........ ... .................. ................................... ........... .. ....................................... ..... ...... 7 Parks, Recreation and Culture ................... .................................. ........ ................ ............ ............ 8

Red Tape Reduction Advisory Committee ...... ...................................................... ......................... 8 Summary .................................... .. ............ ........................... ............ ....... ........................ ... .... .......... 8

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Executive Summary

Enclosed is an overview of the Chamber's comments on the City of Revel stoke's proposed 2013 - 2017 budget and operational expenses. While these are the opinions of The Revelstoke Chamber of Commerce Board of Directors and Staff, they are not necessarily the opinion of each Member of the Chamber.

The announcement of the expansion of Mount McKenzie in 2007 began a major change in our community. There was an estimated expectation of a significant increase in population and, in turn, the infrastructure and City services and resources that would be required to meet this growth. Many factors contributed to the lack of anticipated growth and our community has remained stable, albeit with a somewhat different population demographic today. The recently completed Integrated Community Sustainability Plan (ICSP) sited that "the permanent population of approximately 7,924 is expected to grow only by approximately 200 by 2031 unless there is an unexpected driver for population growth." The Chamber is in agreement, as is the 2013 Financial Focus group in that "we need to align our spending to reflect that reality."

Municipal operating expenses* have increased dramatically from $9.5 M in 2006 to $16.5 M in 2011 to a budgeted $19.9 M for 2013. It is understandable that the City began to prepare for a development and population growth through staffing in areas of planning and social infrastructures. However, it is no longer sustainable to support the accrued operational cost structure given our current economic situation. The citizens of Revelstoke are facing substantial infrastructure upgrades within our City and we do not have appropriate reserves to finance these projects. Provincial and Federal programs are forthcoming in 2014 to cost share on projects and we must be ready to take advantage of these funds without taking on more debt. Our current debt is costing tax payers well over $1 M per year in interest alone and the interest on debt expense continues to compound.

Revelstoke is a unique community, blessed with natural beauty and challenged by lack of economic diversity and living wage employment opportunities. Many of our residents and business owners struggle to pay the taxes that have been imposed. Simply put, less spending= less required tax revenue. Throughout this document it will be apparent that The Chamber is urging Council to take immediate steps to reduce operating expenses.

The 2013 Focus Group reported: "The continued growth in spending is troubling. Revelstoke's population is declining. Growth in the tax base has not kept pace with the rise in spending. Consumers in British Columbia have the highest level of non-mortgage debt in Canada and it is growing. Continued tax increases coupled with the rise in the cost of living in Revelstoke is eroding affordability and is not sustainable."

The 2011 Financial Focus Group suggested: "We need affordability and equity in the business and residential tax bases, value for tax dollars and accountability of city staff and Council." This concern was echoed by the 2012 group and in the 2013 group's report stating; "Our concerns focus on: spending, tax fairness and affordability, and funding of capital. We do not feel that the current approach is sustainable."

A strong and vibrant community and lower operating budgets are not mutually exclusive. With strong leadership and smart choices, these goals can be achieved concurrently. City spending can be reduced through tough and wise decisions. Some positions will have to be eliminated and some services eliminated. These reductions can be done in ways that minimize their impact.

We hope that these recommendations, as well as those of the Financial Focus Groups, will be thoughtfully considered and appropriately addressed by Council.

*Estimated Municipal Operating Expenses, not including Non TCA's or TCA's or other contributions from grants etc.

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2013- 2017 FINANCIAL PLAN COMMENTS

, Property Tax Equality

Recommendations

1. No tax increase in 2013 for existing Class 6, small business. 2. A commitment to a reduction of the mill rate for existing Class 6 tax revenue over the 2013-

2017 Financial Plan. 3. Develop a taxation and/or fee structure for vacation home rentals.

The expected tax revenue share from small business is unsustainable and needs to be addressed. There is an inequitable balance of tax revenue generation from the unique property classes, mainly Class 1, residential and Class 6. This balance must be corrected in order to maintain viable, competitive businesses and services to the residents of Revelstoke. The future of our small business community and those that they employ is at stake. As suggested by each of the Financial Focus groups (FFG), it is essential that Revelstoke maintain a fair tax revenue system.

2011 FFG: "Council to reduce the current tax burden to Business Class 6 to promote the survival and health of this class. This should be done in a phased approach. The impact of the change should come from a combination of an increase in residential tax and a decrease in the overall budget.

2012 FFG: Freeze or Lower the Business Tax Burden A thriving business community is the backbone of any community, providing most of the jobs and paying a much larger proportion of taxes per dollar of value than a comparable _resident. The business community in Revelstoke believes that, relative to other communities in BC, they pay a much larger proportion of municipal taxes compared to residents ... There is considerable evidence that the "cost of doing business" is higher here than in most if not all communities with a similar economic profile. Council needs to revisit this issue and decide, in a sense, what is fair and to what extent Revelstoke is "open for business".

2013 FFG: "Who should pay and the proportionate tax burden between classes continues to be a flash point in the community ... Businesses do not bear their tax burden on their own. It touches customers, employees and suppliers... "Relief in one tax class is simply passed on to those in the others, shifting the problem from one group to another."

The City's current policy regarding equity is that "property taxation policy sets a target for the residential share of municipal taxes at 50%". It is the opinion of the Chamber of Commerce that this is an unrealistic goal given the current assessment value of business property is less than 20% of residential. The Chamber does not support a long term goal of a 50% revenue split; however, we would support this for the 2013 budget given the revenue proposal of 43% residential and 48% from class 6.

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The following chart shows the balance of expected revenue generation vs. assessed property value.

Amount of Taxes Paid per $lOOk Assessed Value $2,500.00

$2,000.00

$1,500.00

$1,000.00

$500.00

$0.00

The gap was narrowing up to 2012 but the proposed 2013 revenue expectation would reverse past efforts, as per the City's charts below.

2013 2012 0% 0%

Small Busines

Note: It is understood that the assessment value of RMR residential units may shift from Class 1 to Class 6 in 2013. Our recommendation remains unchanged.

Public Comment from Open House

» 5 attendees agreed and 52 did not agree that a 3.5% increase in overall property tax is acceptable; » 51 attendees agreed and 6 did not agree that the City should strive for a minimum 50% parity in property tax revenue from residential vs. business;

» 56 attendees agreed and 1 disagreed that developing a management, taxation and fee policy for vacation home rentals within Revelstoke should be encouraged.

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New Development and Economic Diversity

Recommendation

1. Council or independent Core Service Review of development services, including DCC fees and revenue expectations.

2. Review of current holdings and "Land Acquisition Strategy."

As an advocate for business, the Chamber is mindful of the future of Revelstoke's new development prospects and economic diversit . The trend shown in the New Construction chart below is of concern.

100,000,000

80,000,000

60,000,000

40,000,000

ion

-Residential

- Business

20,000,000

2007 2008 2009 2010 2011 2012

According to the DCC Rates published by the Ministry of Community, Sport and Cultural Development in December 2011*, Revelstoke's fee schedule is ranked as the 24th most costly out of 114 Cities in British Columbia. The 2013-2017 budget has DCC revenue projections of $1,220,000 per year and 5 year Interest earnings of $800,000 totalling $6.9 million dollars. It is the opinion of the Chamber that this prediction is grossly overstated given the current ecomonic environment and the history of project approval through the Planning Department. If any portion of this projected revenue is allocated to future upgrades to existing infrastructure it should be reviewed by Council.

Additionally, we believe there needs to be a balance that attracts new growth, investment, and development. We must look to increase our tax base rather than continual tax rate increases on our existing tax base. The cost of development must also include the process required for approval which in Revelstoke is notorious for being cumbersome, time consumming and frustrating. The Chamber believes that this has been, and will continue to be, a detriment to potential new investment and development in our City.

The City of Vernon is just completing a Core Services Review**. There is a comprehensive audit of the Building Services Department. Key points in the audit that Revelstoke could emulate are:

Service Delivery- Staff positions, responsibilites, service levels and client impact; Finance- Cost of salaries, other expenditures and allocation vs. Income and Tax Revenue; Recent Reviews with detailed comments including permit and approval timeframes with comparable cities; Application review- Total issued permit, lot and subdivision approvals granted and/or registered.

The 2013-2017 Financial Plan Community Goals (page v) notes: "Manage and acquire City owned lands consistent with a Land Acquisition Strategy." Further information regarding the current holdings or acquisition strategy was unavailable from the CFO or CEO. This may be an area for review.


56 attendees agreed and 1 attendee did not agree that Revelstoke benefits from new development and should focus on being "open for Business".

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Fiscal Responsibility

Each of the Financial Focus Groups over the past 3 years has highlighted the rising expenses by department. All have voiced a serious concern with the Fire Department, Planning and Public Works. While the City's Department Leaders are experienced professionals who would be the obvious choice to best manage service levels and costs within their departments, the direction for change must come from Council.

The Chamber of Commerce fully supports the analysis and recommendations of the 2013 Financial Focus Group report regarding spending, as per below:

"There's been a progressive service/program creep in the past 10 years such as: aquatic centre; expanded transit; animal/bylaw control; fire training officer; first responder; highway rescue; planning and the Unified Bylaw Development (UBD); curbside recycling; emergency services coordinator; IT technology systems and support; and plaza extension. This budget proposes further additions: Corporate Officer, officer ranks in the Fire Department, childcare staff. The combined impact of new initiatives along with rising costs are diverting resources from ongoing reinvestment in infrastructure that must increasingly be funded with debt.

In 2009, the City adopted accounting changes including a new definition of a "capital asset." Since then, it budgets for tangible capital assets (TCA) that meet the new definition, and single-initiative operating project type items (Non-TCA's) that do not. We are concerned about the later. In 2013, Non-TCAs amount to $2. 7M. That's 14% of operating costs, or roughly one quarter of all non-salaried operating costs. We weren't able to trend this spending prior to 2009 for a baseline. We are concerned that this process is inviting ad hoc spending without adequately assessing value contributions to service delivery outcomes. We feel this process should be reviewed, and also recommend a rigorous review of all Non-TCA spending to challenge the value-added and priority of the investment. We did not see much discussion of these items during the budget process and we feel that they should be considered more thoroughly.

It was unclear in the budget process how the City rationalizes service delivery on an ongoing basis. Reductions are not apparent in the budget process. In its current form, we find the budget process does not allow Council the time to effectively make requests for budget reductions as the fiscal year has already begun. We have flagged some specific items further in this report that we feel warrant review. We feel we need to remember that we are only 7500 people, and we need to align our spending to reflect that reality. We have added, and continue to add services, staff positions etc, yet we don't always see the benefit of those decisions. Yes, we need to plan for the future, but we should be realistic about what we expect that future to look like, and plan/spend accordingly. As a city, we need to make these decisions now, before reaching a point where it will really hurt to make changes."

General Administration

Recommendations

1. Available grant monies and provincial revenues should be used, when possible, towards infrastructure requirements.

2. The proposed Corporate Officer position (about $92,000 including benefits) should be reviewed prior to approval .

3. The proposed Child Care expense of $60,000 including benefits should be reviewed prior to approval.

4. Postpone the City hall elevator project. 5. The proposed City Hall Stucco and renovation including benefits should be reviewed prior to

approval.

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The system of grants monies and provincial transfers is complicated. It is understood that many of the available programs have conditions on usage. That said, when applicable over the next 2 years, funds should be pooled towards infrastructure. i.e. Gas Tax Funds to sewer or water projects.

General Public Comment from Open House

57 attendees agreed that use of grant monies and provincial revenues should be used, when possible, towards infrastructure requirements; 55 attendees agreed and 2 did not agree that an audit of General Government would be beneficial ;

Fire Department

Recommendations

1. No additional authorized expenditures pre audit, including the $11 K proposed for institution of Officer Ranks.

2. A series of public meetings be held to review the post audit results to determine the level of service that is required and acceptable to the community at large.

The Chamber is supportive of the recommendations of all of the Financial Focus Groups and the current audit process that has been requested .


55 attendees agreed and 2 did not agree that a post audit public review process to determine acceptable service levels would be beneficial;

Planning Department

Recommendations

1. Council or independent audit of current staffing levels, and projected 5 year requirements given our economic situation and lack of population growth and new development.

2. Revisit goals and objectives of the Planning Department to reflect a customer service, positive experience to encourage future business and development opportunities.


55 attendees agreed and 2 did not agree that an audit of Planning would be beneficial;

Public Works

Recommendations

1. Council or independent audit of Public Works, including clear documentation of a cosUbenefit analysis for services.

2. CosUBenefit analysis of contracted services, specifically where it would save increased fleet expenses.

3. Review of Non TCA's, specifically leases and owned fleet overview.


54 attendees agreed and 3 did not agree to an external audit of Public Works.

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Parks, Recreation and Culture

Recommendation

An annual cosUbenefit analysis and public review of programs and services would be beneficial.

Revelstokians enjoy a healthy environment, vibrant cultural and supportive social lifestyle. The ISCP report states: "A thriving community with a unique and attractive identity and vibrant cultural elements helps attract residents, which is essential to a sustainable community over the long term."

In "1 0 Trends for Smarter Communities, Gord Hume states: "How communities protect and preserve their unique assets- heritage, properties, riverfronts, urban green spaces, natural areas, etc. will speak volumes about the community. Communities will increasingly be ranked on how they understand the importance of developing their public realm for the public's benefit; in other words creating wonderful public places and exciting public spaces that provide safe social interaction, cutting edge urban design and public gathering places that celebrate the culture, heritage, life and people of the community."

The Chamber believes that we need to be fiscally responsible, but that it is also essential to retain the vibrancy of our community.


56 attendees agreed and 1 did not agree that a public review of programs and services would be beneficial.

Red Tape Reduction Advisory Committee

Recommendation

The Chamber of Commerce provides Terms of Reference and Process for a Red Tape Reduction Advisory Committee. We would require a commitment from Council to appoint a councilor and a City employee to participate on the committee.

The district of Sechelt has an online form for residents to report "Red Tape". It is not a "general complaints department" and clearly outlines examples like being required to provide the same information multiple times when accessing District services, having to wait an unreasonably long period while an application is processed, or similar situations.


All of the attendees agreed that they would support a "Red Tape Reduction" process.

Summary

We believe the communication process for public input can be improved and are committed to assist in this process. It is clear from many of the comments provided at our open house that the current perception of the process and cost of service delivery is based on misinformation. This often leads to an ill informed opinion and general frustration . Expectations and demands of local residents and taxpayers will help to formulate the future of our community. Council and City Staff would be well served by developing a communication and public engagement strategy, including better utilization of technology, to encourage public engagement. The information provided to the public should be consistent including year over year comparisons in a simple format. The Financial Plan recommended that City Staff "conduct a

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community satisfaction survey". The Chamber would welcome an opportunity to participate in this and assist City Staff in distribution.

Canadian Provinces have unilaterally downloaded responsibility and costs for a wide range of services. The potential negative effect of this financial constraint on municipalities is a major concern . Municipalities and their lobby associations, such as the Chamber of Commerce, need to become more assertive in building new relationships with the Provinces. The Chamber is committed to working together with the municipality and our business leaders to ensure the Provincial Government of BC understands the challenges our community is facing and is engaged as part of the solution.

The Chamber team has been reading the "Municipal Knowledge Series" by Gord Hume, In his latest book, 10 Trends for smarter communities, published in 2013, Gord sums up his Smarter Technology Chapter with:

"Develop a bold community vision for the future, including commitments for investments in technology, reducing costs of service delivery, clean energy, making civic services more user-friendly and responding to the tech demands of a new generation for communication and interaction."

The Chamber of Commerce is mindful of our community's rich culture and the importance of attracting economic diversity through continuing to offer an amazing City to live, work and play. Our Board and Staff are committed to work with Council and City Staff to create a sustainable financial plan that supports the needs of our residents , business owners and the community at large. Thank you for allowing us to be part of this essential process.

The 2013 Chamber of Commerce Board of Directors

Steve Bailey, President Mike Vopni, Vice President Nathan Weston, Director Chelsea Lamont, Director Randy Driediger, Director Scott Duke, Director Trevor English, Director Peter Nielson, Director Brydon Roe, Past President

Source References

*DCC comparison by BC City: http://www.cscd .gov.bc.ca/lgd/finance/development cost charges.htm

**City of Vernon preliminary Core Review information is available at http://www.vernon.ca/core review. The format used in the report is clear and concise and easy to use for public comment.

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Focus Group for the City of Revelstoke

2013-2017 Financial Plan

Recommendations to Mayor and Council

February 28, 2013

Thank you Mayor and Council for continuing with an focus group on the City's annual financial plan. We appreciate your willingness to listen to outside perspectives, and hope that our input assists you in choosing the appropriate financial plan for the City of Revelstoke.

We also thank city staff for the time they have spent in educating us on city operations and issues, and in answering questions to assist us in our deliberations. This year's presentations were better than the last, and the plan format has improved considerably since the first focus group three years ago. Although we feel there is still more work to do, we appreciate the visible efforts heading in the right direction.

Our concerns focus on: spending, tax fairness and affordability, and funding of capital. We do not feel that the current approach is sustainable. We recommend Council:

1. Develop a far-reaching sustainable financial strategy 2. Limit tax increases to CPI 3. Get spending under control and better understand the local economic impacts of

city spending before tackling tax fairness. 4. Continue to recapitalize infrastructure and introduce an asset management

approach. 5. Address the adequacy of processes to drive accountability, efficiency, value-for-

money. 6. Update the budget process 7. Review some specific investment areas

The following describes our concerns in more detail.

1. Overall Financial Plan The draft plan reflects Council's proposed cost of living increase (2%) to sustain status quo operations, plus a further one-time tax increase of 3% in 2013 to reduce debt, plus increases of 15% to sewer and 2% to water rates. We do not support this direction as we feel it reinforces an unsustainable approach: an ever increasing tax burden to support a continuous growth in spending. We see how the 3% tax increase intended to reduce debt, is eaten up with spending. Not only does debt not reduce, it grows further with the borrowing of another $2M.

The Financial Plan focuses on sources of funds and their uses on a department-by-department basis. It's really more of a budget forecast than a financial plan. Although this content is important, we don't feel that the plan deals with what we see as the most important issue facing the City -long-term financial sustainability. We believe a more far-reaching approach is needed.

As part of Council's commitment to fiscal responsibility we would like to see the development of a strategy that focuses on long-term financial sustainability. Partly visionary, partly policy, partly tactical, it should lead to rationalized service deliverables matched with realistic resourcing strategies and supporting tax policies, all that align with the values, objectives and realities of a changing Revelstoke. It's an opportunity to address the recurring tensions of affordability, service expectations, services supporting growth, and tax burden.

City of Revelstoke, 2013-2017 Financial Plan Focus Group Page 2

A strategy should consider the City's current financial position, long-term plans, priority goals, and potential risks and opportunities. It should develop options Revelstoke can implement to maintain required services and related capital/infrastructure, withstand economic disruption, and meet the demands of growth, decline and changes as the City continues to evolve as resort community. It should contain a cohesive policy framework to drive investment decisions to achieve community objectives in a sustainable manner, and demonstrate sound financial management. It is a great opportunity to engage citizens in finding the right balance between expectations and affordability in achieving the vision for Revelstoke.

The City of Edmonton is one municipality doing some interesting work in this area. This link click here can help explain the concept.

2. Spending The continued growth in spending is troubling. Revelstoke's population is declining. Growth in the tax base has not kept pace with the rise in spending. Consumers in British Columbia have the highest level of non-mortgage debt in Canada and it is growing. Continued tax increases coupled with the rise in the cost of living in Revelstoke is eroding affordability and is not sustainable. There's been a progressive service/program creep in the past 10 years such as: aquatic centre; expanded transit; animal/bylaw control; fire training officer; first responder; highway rescue; planning and the Unified Bylaw Development (UBD); curbside recycling; emergency services coordinator; IT technology systems and support; and plaza extension. This budget proposes further additions: Corporate Officer, officer ranks in the Fire Department, child care staff. The combined impact of new initiatives along with rising costs are diverting resources from ongoing reinvestment in infrastructure that must increasingly be funded with debt.

In 2009, the City adopted accounting changes including a new definition of a "capital asset." Since then, it budgets for tangible capital assets (TCA) that meet the new definition, and single-initiative operating project type items (Non-TCA's) that do not. We are concerned about the later. In 2013, Non-TCAs amount to $2.7M. That's 14% of operating costs, or roughly one quarter of all non-salaried operating costs. We weren't able to trend this spending prior to 2009 for a baseline. We are concerned that this process is inviting ad hoc spending without adequately assessing value contributions to service delivery outcomes. We feel this process should be reviewed, and also recommend a rigorous review of all Non-TCA spending to challenge the value-added and priority of the investment. We did not see much discussion of these items during the budget process and we feel that they should be considered more thoroughly.

It was unclear in the budget process how the City rationalizes service delivery on an ongoing basis. Reductions are not apparent in the budget process. In its current form, we find the budget process does not allow Council the time to effectively make requests for budget reductions as the fiscal year has already begun. We have flagged some specific items further in this report that we feel warrant review.

We feel we need to remember that we are only 7500 people, and we need to align our spending to reflect that reality. We have added, and continue to add services, staff positions etc, yet we don't always see the benefit of those decisions. Yes, we need to plan for the future, but we should be realistic about what we expect that future to look like, and plan/spend accordingly. As a city, we need to make these decisions now, before reaching a point where it will really hurt to make changes.


3. Taxes The Focus Group does not support the tax increases proposed for 2013: 2% +one time 3% + 2% increase in water+ 15% increase in sewer. We feel we are at a critical point in the City financial model. The easy way out is to simply increase taxes each year, as we have done. This does not address the fundamental issue at hand, which is our spending habits. We are leveraging our financial future to serve our current fiscal requirements. Until we have control over our spending habits, we will not be able to control our tax increases and address the bigger issues of tax fairness and affordability.

Who should pay and the proportionate tax burden between classes continues to be a flash point in the community. It's a complicated subject. The business sector continues to lobby for lower taxes. Businesses do not bear their tax burden on their own. It touches customers, employees and suppliers. Likewise, some businesses benefit directly from City spending and others indirectly from services that support business and growth. A growing tourism industry brings benefits and demands for non-resident services alike. Again this year, the draft financial plan suggests a further reduction of major industry (Class 4). This would be the 4th continuous reduction and place the rate in the bottom quartile in the Province. The reasons for continued and significant tax reductions in this class are unclear, as are the economic impacts. Increases will rise further if any relief is provided between tax classes. Relief in one tax class is simply passed on to those in the others, shifting the problem from one group to another.

Development Cost Charges help pay to build the services necessary to support development and community growth. Revelstoke rates are middle of the pack, both among resort communities and all municipalities in the Province. Are the current DCCs the appropriate ones for Revelstoke? We have no indication oftheir efficacy in achieving Revelstoke's growth management objectives of economic development, tax fairness or affordability. This is an important question that needs answering in considering tax fairness solutions.

We feel that there are numerous issues that need to be considered in tax fairness. We feel that Council should consider a cohesive approach to tax strategy. One that will support the combined economic and social objectives as Revelstoke continues to evolve into a resort community. We suggest that Council seek further advice and assistance necessary on the economics of taxing in Resort Communities in addressing tax fairness issue.

4. Asset Base and Capital reinvestment requirements: We support ongoing reinvestment to sustain necessary infrastructure. During the budget presentations, we heard that the City intends to introduce asset management planning. We strongly support this initiative. Done right, it can provide knowledge to make better choices about how and when to intervene to optimize asset life-cycles, manage risk, and obtain sustained value-for-money of assets. It can also drive innovation, support economic development and assist broader planning efforts such as the recommended sustainable financial strategy with long-range infrastructure planning. For example, reducing treated water loss in distribution systems can reduce operating and provide environmental benefits. Introducing innovations such as rainwater harvesting for non-potable uses have potential to drive economies in future infrastructure renewal or expansion.

Since 2009, operating costs have contained a capital replacement contribution (amortization) that are recouped each year in property taxes. The amount is currently $1.7 M per year. We are concerned about the use of these amounts. We believe that these amounts should be clearly directed to fund capital replacement. It is disappointing, to see that these funds are being used for Non-TCA which are operating and often discretionary items. Infrastructure is being financed with debt and as a result discounted by interest costs.


5. Reserves We suggest a review of the current approach and use of reserves for accountability and transparency. The design and use of the current structure lacks clarity. Some appear to be operating reserves to offset deficits or rainy day funds. What is a reasonable amount of reserves and for what purpose, i.e. capital investments? We feel that individual reserves by department may not promote the best use of funds, but rather reinforce a dept-by-dept approach to business. It is also extremely difficult to follow the source and use of funds overall, clouding transparency.

6. Efficiency /Value-for-Money: We continue to have the concerns voiced in previous Focus Group reports about the adequacy of processes to drive accountability, efficiency, and value-for-money.

Investments in services and programs should be defined, matched with cost and benefits and outcomes aligned with City goals and objectives. City processes continue to look at departments activities and focus on operational delivery (the work) rather than outcomes (the result). This makes it difficult to assess relevance and efficiency and adjust for changing priorities on the basis of achieving objectives. The City has a good track record of cost-sharing, accessing grants, and exploiting innovative funding models. We encourage this to continue with the caution that opportunity alone should not drive initiatives. Ill conceived, today's opportunity can become tomorrow's liability, e.g. more assets to service. Going forward, when deciding if a venture is the right fit with community interests, business cases should assess whole costs and financial servicing on a life-cycle basis. Taking an "eyes wide open" forward looking approach at conception will avoid unplanned financial surprises later.

What is required in business cases? Are they adequate? How widely are they used? Do they consider risk; require whole cost on a life-cycle basis; require rigorous definition of services and expectations aligned with city objectives; identify service levels, users, expected outcomes. What is the basis for when to contract/when to do in house; is the related local economic impact to spending considered.

Are post-evaluations held? These can be especially valuable for big projects and where new services are introduced to learn what worked and what need to do differently. How are the quality of budget estimates, budget performance, and whether objectives were achieved assessed?

7. Financial Planning Cycle, Process and Review The current plan is presented after the fiscal year has already started. We feel that the budget process can be improved by changing the cycle to allow for earlier decisions and input to the financial plan; clarifying roles; and adding more defined processes. It could benefit from reviews of prior-year operations, and post-evaluations of significant projects, to incorporate lessons learned in the current cycle.

We feel Council should provide concrete direction and priorities to drive the budget process, e.g. specific budget priorities, focus and weight of capital investments, directions around any changes to levels of service, areas of growth, taxation targets, etc. We feel the role of Finance Committee should be concretely defined, as should the purpose and expectations of any public review group such as the Focus Group.

Focus Group This is the third year of involvement of a focus group in the annual financial plan. There is a steep learning curve, considerable time investment, and an expectation that one's efforts will make a difference.


To participate in a meaningful manner requires devoting some time to become familiar with the nature of city operations and its financing operations. The learning curve could be significantly shortened if a training package were available. Such a tool would speed understanding and allow focus group members to spend their time in more value-added analysis and discussion instead of trying to figure out the financing maze. It might result in more interest from citizens, and be a tool of benefit for other audiences, e.g. council, constituents.

We suggest that a debrief meeting with the Mayor and CAO be added as part of any future focus group activity. This will provide the opportunity to more fully explore and develop an understanding of the group's observations and recommendations.

8. Specific Investments/Issues:

The following are some specific areas of concern that standout to us and we suggest be reviewed:

1. Fire Protection - Like other municipalities across Canada, we are concerned about the affordability of fire protection services. The scope and costs of services have grown substantially over the past 10 years. We see that the City is undertaking an independent review of the Fire Department. We feel that this should provide information to address the concerns of affordability, and identify any opportunities to adopt new approaches, e.g. such prevention methods that build a more fire-proof city, and tailored response models that reduce equipment needs such as those profiled in the National Post on February 9. 2013, all to help find the appropriate balance of cost and service for Revelstoke going forward.

2. City Hall Renovations of $800k proposed for 2013 should not proceed without a comprehensive look at the project needs (i.e. potential internal space configuration to better utilize space and staff).

3. Information Technology- we continue to see increase in standalone systems and growth in City IT infrastructure. We suggest that the City stand back and develop a comprehensive IT strategy that focuses: Strategic investment in IT aligned to achieve City's strategic direction and optimize the investment in IT. Including connectivity, systems integration, and potential for outsourcing.

4. Sewer and Water Rates- We are concerned about the makeup ofthe costs of delivering these services. 20% of costs are Non-TCA and internal administrative costs. The later are $125k per year, well over the cost of one FTE in each of the utilities. We recommend a review of the cost of operating these services.

5. Use of the Gas Tax Revenues- we feel that these should be directed to highest use and where possible to offset future debt. Gas tax can be directed at energy efficiency projects that surely could eliminate the need for carbon-offsets. Rather, these funds continue to be directed to planning, while at the same time the City spends ($26 k per year) to purchase carbon-offsets.

6. Fleet- The mobile equipment/vehicle fleet is a significant portion of capital and leasing costs. A cursory review of costs ofleasing compared to purchase doesn't show reductions in maintenance costs suggested as a benefit to leasing. We recommend a comprehensive cost/benefit review of fleet/mobile equipment whether the most long-term economical approach is leasing or implementing a government fleet purchase program.

Thank you again for the opportunity to provide a citizen's perspective on the 2013-2017 Financial Plan. We would be pleased to meet to discuss our observations in more detail.

Respectfully Submitted

Financial Plan Focus Group Dale Morehouse, Betty Sloan, Nathan Weston


Dawn Levesque

From: Sent: To: Subject:

Hi Dawn:

Teresa Lerose March-18-13 8:20AM Dawn Levesque FW: Budget

This is part of the public comment package for the City's budget.

Thank you.

Teresa

-----Original Message-----From: Graham Inglis Sent: March-18-13 8:04AM To: Tim Palmer; Teresa Lerose Subject: FW: Budget

-----Original Message-----From: Annie Purse [mailto:[email protected]] Sent: Friday, March 15, 2013 5:02 PM To: Graham Inglis Subject: H'udget

HI, this letter is in response to the article in the Times Review about the budget. For me things are quite simple as I feel the city should be run as we run our household. There are important expenditures that we have to make each month and then we put a bit into savings and if there is anything left over we may indulge in a treat.

With the city there are important areas of spending that benefit us all and also those who need a hand up as they are not able to completely help themselves and then there should be a reserve. If there is money left over then all those with their hands out for projects that do not benefit all of us can be considered.

At the moment I do not believe there is extra money in the City of Revelstoke coffers so we should not be spending our money foolishly.

Until such time as the Revelstoke tax base grows again and our population increases I think belt tightening is in order. It seems every month a business is shutting its doors and without a growing business sector we can not afford to waste our money.

As a retired couple our monthly income is going to stay the same and with every increase in taxes, be it local or others we are losing ground.

I think if councillors can not take the flack when services are cut or not increased they should not be in the job. We elected the mayor and council to do make the tough decisions and spend our money wisely.

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Thank You, Annie Purse.

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Dawn Levesque

From: Sent: To:

[email protected] March-10-13 3:27 PM ad min

Subject: Online Form Submittal: Contact Us

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Contact Us

Your Name* Thomas Bruchig Email Address [email protected] How Would You Prefer To Be Contacted:* ()By Phone (X)By Email

Which Department Do You Wish to Contact?*

(X)Ad ministration ( )Economic Development ( )Engineering ()Finance ( )Fire/Rescue ()Parks Recreation and Culture ( )Planning/Bylaw Enforcement ( )Public Works Operations

Please indicate how we can be of assistance to you.* my input for the upcoming Budget discussion: Letter to the City; As you were looking for input in regards to approving the new budget I would like to mention a couple of things that I do not agree with. First of all I do not approve of using our tax dollars in financial hard times for a unnecessary position like a commissionaire in a Town of this size, to target residents of this city who pay for his salary by trespassing property and wasting fuel circling and idling an oversized truck in the downtown core. Or maybe because I did not grow up in Canada I am missing the purpose of this position entirely. For a city with a downtown core of2 city blocks I do not see the need of him circling Mackenzie Ave, 1st Street and Orton or Boyle, by using a Pickup truck with unreasonable gas mileage, and keep idling the truck continuously in front of local businesses. I have seen ticket clerks in this Country covering 5 to 10 city blocks on foot in real cities with no car present. I understand that property tax is the main income for the city to keep things running, but in times like this I do not agree to constantly raise taxes on a yearly basis for property and small businesses, when the local economy is fragile. We should be making every effort to make this town more inviting to young

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City of Revelstoke 2013 budget process public comments

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