January 12, 2021 ADMINISTRATIVE REPORT ... - Document Center

S:\LGS\Council ARM Development (c7)\2021-01-12 COTW\Word\331117_CTW 2021-2025 Five-Year Fin Pln v2_REP.docx January 6, 2021

January 12, 2021

ADMINISTRATIVE REPORT TO COMMITTEE OF THE WHOLE

ON

2021–2025 FIVE-YEAR FINANCIAL PLAN AND SUPPLEMENTAL ITEMS UPDATE PURPOSE The purpose of this report is to update the Committee of the Whole (COTW) on the 2021 budget and the 2021–2025 Five-Year Financial Plan and to introduce the supplemental items (Attachment “A”) for the COTW’s consideration at the February 9, 2021, meeting. COUNCIL STRATEGIC PLAN This report supports Council’s strategic priorities and areas of focus regarding: • Governance and Accountability

- Asset Management: We proactively plan for the repair and replacement of our infrastructure.

- Community Engagement: We are committed to engaging and connecting with Kamloops residents and stakeholders.

- Fiscal Responsibility: We are fiscally responsible and accountable. • Livability

- Safety: We recognize the importance of a safe and secure community. • Environmental Leadership

- Climate Action: We enhance the City’s resiliency and capacity for mitigating and adapting to the impacts of climate change.

SUMMARY In December 2020, the COTW recommended that Council pass the 2021 provisional budget. This budget was developed with the view to identify opportunities to reduce costs and followed Council’s direction to have a budget as close to a 0% increase as possible. The estimates that were used in calculating the projected budget have been reviewed and confirmed, and it has been determined that there are no significant revisions. The provisional budgeted tax increase is 0.27%, $318,000 for 2021, prior to the consideration of supplemental requests. As presented in December 2020, the 2021 tax requirements (provisional budget) are as shown in Table 1.

2021–2025 FIVE-YEAR FINANCIAL PLAN AND January 12, 2021 SUPPLEMENTAL ITEMS UPDATE


Table 1: 2021 Provisional Budget Summary

Economic impacts on municipal tax funding 2021 Budget

$ Impact % Impact 2020 Taxation Funding - Budget ($116,640,000) Item Previously Approved by Council $1,044,000 Inflation and Increased Operating Costs $2,999,500 Change in Capital Funding $895,800 Administrative Budget Reductions ($1,561,000)

Subtotal $3,378,300 2.90% Less: 2021 Anticipated Growth (lowered to reflect potential for poorer economic conditions) ($1,166,000) (1.0%)

Total Increase in Regular Budget Items After Growth $2,212,300 1.90%

COVID-19-Related Impacts Revenue Reduction Due to COVID-19 Guidelines $2,783,000 Increase in Costs Related to COVID-19 Pandemic $400,000 Total Impact Due to COVID-19 $3,183,000 2.73% 2021 Initial Tax Requirements $5,395,300 4.63% Cost Offset by Use of Specific Reserve Funds ($1,320,000) Increase in Tax Funding Requirements before Provincial COVID-19 Safe Restart Funding or Service Reductions

$4,075,300 3.49%

2021 COVID-19 Restart Funding Proposals ($3,506,000) Overall Impact on Taxation before Proposed Service Level Reduction or Supplementals $569,300 0.49%

Council Approved Service Reductions ($251,500) Overall Impact on Taxation Before Supplementals $317,800 0.27% To complete this year’s budgeting cycle, Council is being asked to consider a number of supplemental budget items. Some supplemental items were planned for inclusion to the 2020 budget but were deferred at Council’s request due to the financial uncertainty that materialized with the COVID-19 pandemic and have now been brought forward again for the COTW’s consideration along with new 2021 supplemental items. This COTW meeting will be the first introduction of the items only. The COTW will be asked to make a final recommendation on these items at the February 9, 2021, COTW Meeting. At this time, Administration will also present feedback gathered from the public from the budget page on the City’s Let’s Talk website.



RECOMMENDATION: For Council information only.

SUPPORTING COUNCIL AND CORPORATE DIRECTION • November 24, 2020, COTW Report: 2021 Provisional Budget and 2021–2025 Five-Year

Financial Plan (Attachment “B”) DISCUSSION Development of the 2021 budget presented some unique challenges for Administration in order to meet Council’s request to deliver a budget near the approved 2020 taxation funded levels. The conditions within the economy due to the COVID-19 pandemic and the response of the Provincial Health Authority placing numerous requirements to operate and restrictions on traditional activities directly affected the fee for service based revenues that the City requires to support the delivery of those services. Administration undertook the task to review both operating and capital budgets to determine where cost savings (or deferrals) could be realized, recognizing that there would be an expected reduction on other forms of revenue, all the while working to maintain the existing service levels. Through this review, $1.5 million in savings were identified; however, that was not enough to offset the projected loss of $3.5 million in fee-for-service revenues. Provincial Support In September 2020, BC Transit announced that it would be providing a $1.05 million “lease fee holiday” to the City. This relief was in recognition of lower ridership and the financial impact of maintaining the current scheduling availability of the transit system. This relief represents six months of lease fees on revenue-generating transit vehicles. In November 2020, the Province introduced a one-time COVID-19 Safe Restart Funding program. Under this program, the Province provided the City with $6.68 million in funding to provide financial relief due to the impact of the COVID-19 pandemic. Council approved the use of $3.5 million to offset the lost revenues and cost increases related to the new COVID-19 operating requirements the City is facing. Recently, BC Transit announced further financial support to the City. These funds, which amount to $4.3 million, are to offset the existing operating costs that are required to maintain the existing levels of service and fee structures for the 2020 and 2021 transit operating years.



Government Agency Purpose Amount BC Transit Lease Fee Holiday $1,050,000

Ministry of Municipal Affairs and Housing

COVID-19 Safe Restart Grant for Local Governments 6,680,000

BC Transit* COVID-19 Safe Restart - Conventional Transit Service 3,999,504

BC Transit COVID-19 Safe Restart - Custom Transit Service 247,000

Total $11,976,504 *Net of funds for Tk’emlúps te Secwépemc Route 18 - Mount Paul ($105,496) Before including any of the supplemental items, the 2021 budget requires an additional $318 thousand in tax funding after anticipating 1.00% of projected growth and incorporating the following items: • recognition of the BC Transit “lease fee holiday” of $1.050 million • use of $1.3 million in City reserve funds ($970,000 from the Community Safety Reserve

and $350,000 from the Working Capital Reserve) • use $3.5 million of the available $6.7 million in provincial Restart Relief funding • service level reductions as approved by Council There has been no material change in the estimates used to determine the December 2020 provisional budget. The estimates used in calculating the projected budget were reviewed and confirmed, and there are no changes required at this time. The anticipated increase in property tax funding before consideration of supplemental items is 0.27% (approximately $6 annually to the average house valued at $469,000) after incorporating Council-approved elimination or reduction to existing services. Next Steps The next step in the budget process is for Council to consider supplemental requests. Supplemental items have been prepared by Administration and relate to one of two things: it is for something new and this request can initiate from the community or is identified by Administration. The second is as a change to an existing service. Given the actions undertaken by the City at the start of the pandemic in March 2020 and to help manage the overall level of uncertainty, many of the supplemental items that were approved for the 2020–2024 Five-Year Financial Plan budget were deferred and are being presented again for the COTW’s deliberation and consideration in 2021. Each of the 2020 supplemental items business cases contains a brief update highlighting changes since the original presentation last year. Along with the 2020 supplemental items, there are initiatives that were identified over the course of the 2020 year, which Administration is presenting to the COTW as 2021 supplementals also for the COTW’s consideration.



These items are being presented today to the COTW and public so that they can be considered in full at the February 9, 2021, COTW Meeting. At the February meeting, Administration will ask the COTW to make a decision as to which items should or should not be included in the 2021–2025 Five-Year Financial Plan.

Item Supplemental Item Capital Operating

Funding Source Year

Tax Tax % Reserve Other Recommended

20.01 RCMP Municipal Employee $97,000 X 0.08% Taxation 2021

20.02 Arborists & Nature Park Tech $94,000

$75,000 X 0.08% Taxation

BC Safe Restart Funding

2021

20.04 Accessibility Mats $40,000 Gaming Gaming 2021

20.05 Conventional and Custom Transit Expansion Hours

$82,570 X 0.07% Taxation 2021 + 2022

20.06 RCMP Battle Street Detachment Upgrades

$750,000 Working Capital

Reserve Working Capital

Reserve 2021

20.07 Pedestrian Crossings $500,000 X 0.44% Taxation

2021 -

2031

20.08 Boat Launch Improvements $759,000 Community

Works Community Works

2021 – 2024

20.09 RCMP Protective Services Training Facility

$8,755,000 Debt Debt 2024 + 2025

20.10 Council Request: Service Agreements $33,000 X 0.03% Taxation 2021

21.01 KFR IIAF Staffing Increase $200,000 X 0.17% Taxation 2021

21.02 Professional Archeologist1 2021

21.03 Electric Bikes – Community Services $20,000 CAF CAF 2021

21.04 KFR 911 Levy Amendment – Revenues

($66,000) X (0.06%) Taxation (General Fund) 2021

21.05 Renovate Smart Kamloops Program $15,000 CAF CAF 2021

21.06 Step Code Incentive Program $120,000 CAF CAF 2021

1 The proposal for the professional archeologist provides for a spend reduction as it relates to the costs associated with archeology work encountered on capital projects. As many of the capital projects are funded from various sources, (water, sewer, or solid waste levies; taxation; or grants and other contributions) the savings are included in the spending portion of the project and not the funding contributions.



Attachment “A” provides a summary of these requests and the detailed business cases are included with the agenda and provide more information about each of the initiatives for the COTW’s review in advance of the February 9, 2021 COTW meeting. The following is the schedule of upcoming budget meetings: • February 9, 2021 - finalize supplemental items and tax funding requirements for the

2021–2025 Five-Year Financial Plan • January/February - online public consultations • April 2021 - approval of 2021 tax rates Author: D. Hallinan, FCPA, FCMA Planning and

Procurement, Manager

K. Humphrey, CPA, CA Corporate Services Director

Approved for Council KH/kjm Attachments

2020 SUPPLEMENTALS

C:\Users\kmihalech\Documents\GroupWise\Attachment A 2020-2021 Supplemental.docx January 12, 2021

20.1 RCMP Municipal Employees (FTE) - 2021 $97,000 ongoing - Request is to increase the FTE numbers in

support of the Kamloops RCMP detachment. The positions identified is Crime Analyst. There is an additional request to maintain the predetermined member-to-support-staff ratio to support future changes in RCMP members deployed in Kamloops.

20.2 Arborist (2021) and Natural Resources Tech (2021) (FTEs) - 2021 $169,000 - Request is for two additional FTEs in the Parks and Civic Facilities Division. The two roles would be introduced in 2021, an Arborist, would provide additional capacity to assist with landscape and tree inspections in new developments.

The second role, an additional Natural Resources Technician, would provide additional resources to assist in maintaining the ever-growing public demand for safe access to our large network of nature trails and park areas.

20.4 Accessibility Mats - 2021 $40,000, 2022 $20,000 annually - Request is for the purchase of reusable mobility mats that can be installed/placed temporarily for events. It is planned that an initial purchase of $20,000 be undertaken to assess the viability, stability, and performance of the product over the summer months. If the

testing is successful, a second purchase to double the inventory would be completed in 2021.

20.5 Conventional and Custom Transit Expansion Hours - 2021 $82,570, 2022 $165,130 - BC Transit has offered 4,500 additional operating hours beginning in September 2021 with a pro-rated amount (1/3). The increase in hours will be fully implemented in 2022. These additional hours are for both conventional and custom (HandyDART) transit services.

20.6 RCMP Battle Street Detachment Upgrades - 2021 $750,000 one time - This request has changed from the previous proposal. While the need to develop a longer-term plan to address the overall policing requirements for the city and area still exists, the more pressing need is focused on addressing immediate needs and concerns in conjunction with the need to provide a safe working environment for the existing staff and members. In addressing the short-term needs will provide time to develop the longer-tern facility strategic plan.

20.7 Pedestrian Crossings - 2021 $500,000 ongoing capital, 2021 $8,000 per intersection ongoing - Request proposes a funding strategy to initiate pedestrian crossing upgrades to the 39 existing crosswalks in Kamloops

that do not adhere to 2018 updated guidelines. The main objective of the guidelines is to promote uniformity across the country with respect to the approach used in the provision of pedestrian crossing control. This program looks to address the upgrades over a 10-year period.

20.8 Boat Launch Improvements - 2021 $4,000, 2022 $300,000, 2023 $380,000, 2024 $75,000 - This proposal is a follow-up to the 2019 request to address the condition of the boat launches with an investigation to determine a long-term plan for the City’s inventory of boat launches. The result is a multi-year plan to address these civic assets. The introduction of paid parking should therefore be considered within the City’s Parking Management Plan.

20.9 RCMP Protective Services Training Facility - 2024 $755,000, 2025 $8,000,000 - This proposal is a follow-up to the 2019 request to investigate building a multi-purpose training facility to support the ongoing needs of RCMP training activities. This facility has a broader reach in that it will support other organizations within the geographic boundaries and can generate revenues and a positive return between revenues and cost avoidance. This project could be ties into a greater RCMP Facility Strategy Plan.

20.10 Council Request - Service Agreements - 2021 $33,000 - This request proposes to reallocate the funds that

were slated to be increases to existing service agreements and set aside these funds to be used in the community by means of social grants.

Attachment "A"

2021 SUPPLEMENTALS

C:\Users\kmihalech\Documents\GroupWise\Attachment A 2020-2021 Supplemental.docx January 12, 2021

21.1 Kamloops Fire Rescue (KFR) IIAF Staffing Increase (FTEs) - 2021 $200,000 ongoing - As identified in 2020, KFR has reached capacity with regard to leave coverage by the current composition of staff. KFR will need to use overtime call-back to fill some vacation requirements in order to maintain a sufficient contingent of on-duty members. As a result of the identified contraints, KFR is seeking to add two additional FTEs to expand coverage capacity and reduce direct and indirect coverage costs.

21.2 Professional Archeologist (FTE) - 2021 - The City has made a commitment to preserving and protecting cultural and archaeological resources that may be impacted by City projects or operations. Furthermore, the City is legally obligated to protect these resources through the Heritage Conservations Resources Act. To support this commitment, approximately three years ago, the City facilitated a competitive request to secure the services of a consulting firm specializing in archaeology and cultural resources. This initiative seeks to add the resource to City staff with an expected savings by reducing the reliance of contracted services.

21.3 Electric Bikes – Community Services - 2021 $20,000 one time – Community Services’ current practice during bike patrol activities involves loading a conventional bike into a pickup truck; driving to the park or area for patrol; unloading, patrolling, and then reloading in order to move to the next location to patrol. E-bikes offer a more appropriate sustainable solution, particularly in eliminating the need for a pickup truck to transport the conventional bike over considerable distances and allowing officers to ride directly from the Bylaws Services office to their location. The intent of the E-bike is to use this mode of transportation to

effectively cover greater distances and increase the officer’s community profile with the bike. 21.4 Kamloops Fire Rescue (KFR) 911 Levy Amendment (Revenue) - 2021 ($66,000), average ($90,000)

annually - The City collects funds by means of the 911 levy fee that is charged on all landlines located in the city’s geographic area. This $0.75 per month fee has remained unchanged for 20 years. KFR is proposing a short-term increase to $1.08 per month per landline while a longer-term strategy is developed to address the migration from landlines to cellular services.

21.5 Renovate Smart Kamloops Program - 2021 $15,000 one time - The primary objective of the Renovate

Smart Kamloops Program is to increase local homeowners’ awareness of the opportunities to increase their homes’ energy performance, reduce their household emissions, and realize co-benefits such as reduced energy costs and increased home comfort. The program will seek to engage homeowners through one-on-one consultations, community workshops, and program marketing. Costs are directed towards marketing and program piloting.

21.6 Step Code Incentive Program - 2021 $120,000 one time - This request is to replenish the Step Code

Incentive Program, which was launched in October 2019 and is now nearly fully subscribed. The Step Code Incentive Program offers local builders a financial incentive to voluntarily comply with the BC Energy Step Code in advance of it becoming mandatory on January 1, 2022. The program also provides the City’s Building Inspection Section with experience with handling Step Code permitting, documentation, and inspection

requirements in advance of it becoming mandatory in 2022.

S:\CS\Reports (a7)\2021-2025 Budget\2020-11-24 COTW\329389_CTW 2021 Budget Utility v3_REP.docx November 20, 2020

November 24, 2020

ADMINISTRATIVE REPORT TO THE COMMITTEE OF THE WHOLE

ON

2021 PROVISIONAL BUDGET AND UTILITY RATES

PURPOSE

The purpose of this report is to provide the Committee of the Whole (COTW) with a summary of the 2021 provisional budget and utility rates with a view to adopting the 2021–2025 Five-Year Financial Plan Bylaw and the Sanitary Sewer Amendment Bylaw before December 31, 2020.

COUNCIL STRATEGIC PLAN

This report supports Council’s strategic priorities and areas of focus regarding:

• Governance and Accountability- Asset Management: We proactively plan for the repair and replacement of our

infrastructure.- Fiscal Responsibility: We are fiscally responsible and accountable.

• Livability- Safety: We recognize the importance of a safe and secure community.

• Environmental Leadership- Climate Action: We enhance the City’s resiliency and capacity for mitigating and

adapting to the impacts of climate change.

SUMMARY

Utilities

The utility funds (water, sewer, and solid waste) are accounted and budgeted for separately from the general operating and capital funds. In addition to budgeting to cover the annual operating costs for these utilities, reserve funds are set aside to pay for the asset management plans, which include significant capital projects for the maintenance and replacement of the utilities infrastructure.

Administration is recommending no increase in solid waste rates, no increase in water rates, and a 2.5% increase in sewer rates for 2021, which is consistent with what was announced in prior years.

General Fund - Provisional Budget

Currently the rate impacts on the average household for the primary service items are as follows:

Attachment "B"

2021 PROVISIONAL BUDGET AND UTILITY FUNDS November 24, 2020 Page 2


Table 1 - Summary of Proposed Tax and Utility Rate Changes

Cost to Average Household 2020 2021 $ Change % Change

($469,000 assessed property value)

Total Municipal Property Taxes $2,238 $2,249 $11 0.49%

Utility Rates

Water $379 $379 $0 0.0%

Sewer $446 $457 $11 2.5%

Garbage and Recycling $152 $152 0 0.0%

Total Utility Fees $977 $988 $11

The City is currently in a position of requiring a 0.49% increase in taxation funding, before taking into consideration of any of the Proposed Service Level Reductions or Supplemental items.

RECOMMENDATION: That the Committee of the Whole direct Administration to: a) prepare a Sanitary Sewer Amendment Bylaw, inclusive of a 2.5%

rate increase, to be considered for Council’s approval b) prepare a bylaw for the 2021–2025 Five-Year Provisional Financial

Plan incorporating the following items i) use $1.32 million from specific reserves to offset new costs as

described in Table 7 ii) allocate $3.506 million from the provincial COVID-19 Safe Restart for

Local Governments funding to offset lost revenues and increased costs as described in Table 8

c) include or exclude the following cost reduction items in the 2021–2025

Five-year Provisional Financial Plan Bylaw

i) eliminate street light inspections ii) reduce temperature in civic buildings ii) reduce number of hours for public access to City Hall iv) reduce hours of operation for Westsyde Pool and Fitness Centre in

one of the following ways: • Option 1 - reduce hours • Option 2 - close part of year • Option 3 - close for 2021

v) reduce City calendar publication vi) reduce use and access to Memorial Arena

d) prepare supplemental items for discussion and deliberation in early 2021



e) include supplemental item 21.8 Mayor’s Task Force Action Items ($78,750) to the 2021 provisional budget funded by the COVID-19 Safe Restart funding

SUPPORTING COUNCIL AND CORPORATE DIRECTION • November 17, 2020, COTW Report: 2021 Provisional Budget and 2021–2025 Five-Year

Financial Plan (Attachment “C”) DISCUSSION Utility Rates Water Kamloops has Canada’s most complex water distribution system, and the water utility continues to be a financially strong utility that has sustained itself without a water rate increase in over a decade. Staff at the Kamloops Center for Water Quality have developed industry-leading treatment methods that have extended the life cycle of our treatment membranes to almost double the expected time. This has resulted in savings of nearly $8 million in capital work. In 2021, significant capital projects include the completion of the new Valleyview reservoir, replacement of the upper Rosehill pressure reducing valve, several booster station improvements, and work on the water main along Ord Road. Effective asset management principles within the water utility have allowed the utility to remain financially stable. Administration does not recommend a rate change for the water utility for 2021. Within this recommendation from Administration, the Noble Creek Irrigation System has not been considered. Table 2 - Proposed Water Rate Changes

2021 2022 2023 2024 2025

Proposed 2021–2025 Water Rate Increase

0.00% 0.00% 0.00% 0.00% 0.00%

Projected Rate in 2021–2025 $379 $379 $379 $379 $379

Change in Rate From Prior Year $0 $0 $0 $0 $0

Sewer Significant financial requirements related to biosolids and asset management projects have resulted in a need for continued rate increases in the sewer utility. Biosolids management continues to be a costly operation with no certainty on the long-term financial needs that may accompany a revised provincial regulation. Phases 2 and 3 of the Tranquille Road sanitary sewer upgrade were funded in part through the recent rate increases.



As staff continue to advance our sewer utility asset management plans, it is expected the financial need of this utility will increase. Staying in line with the previous Five-Year Financial Plan, the 2.5% increase recommended for 2021 is the planned increase noted in the 2020–2024 Five-Year Financial Plan. This strategy of good fiscal management ensures financial sustainability and provides the fund with the necessary financial stability to manage a very complex sewer collection and treatment system. Administration is recommending a sewer utility increase of 2.5% on the annual levy, which amounts to an increase of approximately $11 per household for 2021. Table 3 - Proposed Sewer Rate Changes

2021 2022 2023 2024 2025

Proposed 2021–2025 Sewer Rate Increase

2.5% 2.5% 2.5% 2.5% 2.5%

Projected Rates in 2021–2025 $457 $469 $481 $493 $505

Change in Rates From Prior Year $11 $12 $12 $12 $12

Solid Waste For the proposed 2021 provisional budget, the solid waste utility does not have any new capital projects planned; however, having updated the Design and Operational Plans at both landfill sites, a greater portion of the Mission Flats Landfill progressive closure work is anticipated to be performed in 2022. This expected increase in capital spending will place a considerable draw on the existing Solid Waste Reserve. The strong revenues from tipping fees across all sites have proven to be a significant contributor to the utility, which allowed for no rate increases in previous years. The anticipated spend at the Mission Flats Landfill on along with further development and improvements expected to the Kamloops Resource Recovery Center in 2023 is resulting in a forecasted need to initiate rate increases in 2022, 2023, and possibly 2024. In the coming year, staff will continue to implement the Thompson-Nicola Regional District’s (TNRD’s) Regional Solid Waste Management Plan and help to identify further efficiencies within our local municipal waste management programs. The top three priorities from the TNRD’s Regional Solid Waste Management Plan continue to be commercial recycling, construction waste diversion, and organic waste collection. At this time, Administration does not recommend a rate increase for 2021. Table 4 - Proposed Solid Waste Rate Changes

2021 2022 2023 2024 2025

Proposed 2021–2025 Solid Waste Rate Increase

0.00% 10.00% 5.00% 5.00% 5.00%

Projected Rates in 2021–2025 $152 $167 $175 $183 $191

Change in Rates From Prior Year $0 $15 $8 $8 $8



General Fund - Provisional Budget At the November 17, 2020, COTW Meeting, Administration presented the overall financial challenges that the COIVD-19 pandemic has caused on the City’s normal operating practices (Attachment “C”). It is expected that effects the pandemic will be felt into 2021; however, the City needs to maintain the ability to provide ongoing services to the community throughout these challenging times. Based on the current 2021 provisional budget, the City currently requires an overall 0.49% ($569 thousand) increase in taxation funding, which results in approximately $11 for the average household ($469,000 assessed value), before taking any of the proposed service level reductions or supplemental budget items into consideration. Table 5 - Summary of General Fund Taxation Requirements

Economic Impacts on Municipal Tax Funding 2021 Budget

$ Impact % Impact

2020 Taxation Funding - Budget ($116,640,000)

Item Previously Approved by Council $1,044,000

Inflation and Increased Operating Costs $2,999,500

Change in Capital Funding $895,800

Administrative Budget Reductions ($1,561,000)

Subtotal $3,378,300 2.90%

Less: 2021 Anticipated Growth (lowered to reflect potential for poorer economic conditions)

($1,166,000) (1.0%)

Total Increase in Regular Budget Items After Growth

$2,212,300 1.90%

COVID-19-Related Impacts

Revenue Reduction Due to COVID-19 Guidelines $2,783,000

Increase in Costs Related to COVID-19 Pandemic $400,000

Total Impact Due to COVID-19 $3,183,000 2.73%

2021 Initial Tax Requirements $5,395,300 4.63%

Cost Offset by Use of Specific Reserve Funds ($1,320,000)

Increase in Tax Funding Requirements before Provincial COVID-19 Safe Restart Funding or Service Reductions

$4,075,300 3.49%

2021 COVID-19 Restart Funding Proposals ($3,506,000)

Overall Impact on Taxation before Proposed Service Level Reduction or Supplementals

$569,300 0.49%



Based on this increase, the overall impact on the ratepayer, before taking of any of the proposed service level reductions or supplemental budget items into consideration, and considering the information presented above on the increase identified for the sewer utility, the following table reflects the overall impact to the ratepayer. Table 6 - Change to Average Household

Cost to Average Household 2020 2021 $ Change % Change

($469,000 assessed property value)

Total Municipal Property Taxes $2,238 $2,249 $11 0.46%

Utility Rates

Water $379 $379 $0 0.0%

Sewer $446 $457 $11 2.5%

Garbage and Recycling $152 $152 0 0.0%

Total Utility Fees $977 $988 $11

Proposed Use of Specific Reserves Over the course of 2020, the local RCMP detachment has consistently maintained a less than full staffing level compared to the budgeted amount. With the RCMP training depot partially closed in 2020 due to the COVID-19 pandemic, officers who took new postings have not been backfilled, which has created vacancies across the province. This has resulted in a predicted surplus contribution to the Community and Protective Services Reserve. Administration recommends using $970,000 of these funds in 2021 to cover the current increase in the RCMP contract to reduce the taxation requirement for RCMP. This will bring the current tax funded portion of the RCMP to approximately 132 members. During the budget planning preparation period, Administration was informed that both Canadian National (CN) Rail and Canadian Pacific (CP) Rail would be replacing the 3rd Avenue CP crossing and the Singh Street CN crossing, which would require the City to perform work on them. This work is required to support the road portion of the crossings. The railways are responsible for the rails while all other infrastructure is the City’s responsibility. The costs associated with replacing the crossings is expected to be approximately $200,000. Administration recommends using reserves as this is a one-time request. As the City transitions its technology off of the current Novell platforms, it is expected that there will be some costs that will become redundant in future years as the transition occurs. Administration recommends that the $150,000 cost associated with the Novell products be funded from reserves.



Table 7 - Use of Specific Reserves

Cost Driver Reserve Funding From Impact on

2021 Budget Impact on

2021 Tax Rate

RCMP Increase Community and Protective Services Reserve

($970,000)

Capital - Railway Crossings

Working Capital Reserve (200,000)

IT Legacy Applications Working Capital Reserve (150,000)

Specific Reserve Funding to Reduce Taxation Requirements ($1,320,000) (1.13%)

COVID‐19 Safe Restart Grants for Local Governments Funding (Safe Restart Funding) At the start of November 2020, the City received a letter from the Province, which stated that the City was eligible for $6,680,000 under the one-time COVID-19 Safe Restart funding. In alignment with the guidelines, Administration recommends that a portion of the funds be used in 2021 to address the following budget impacts that are a direct result of the COVID-19 pandemic: • offset loss revenues • condition deterioration due to increase usage (nature parks) • increased costs - supplies and staffing Table 8 - 2021 Safe Restart Funding Proposals

Cost Driver Description Impact on

2021 Budget

Impact on the Overall BC Safe

Restart Fund

Funding Received – BC Safe Restart $6,680,000

Projected Revenue Shortfalls:

Recreation $2,100,000

Parking 606,000

Facility rentals 400,000

New Costs Due to COVID-19 (included already in budget)

Impact on nature parks 200,000

Technology and facility costs supporting distancing requirements 150,000

Other COVID-related costs: safety equipment, Plexiglas, face masks, signage, etc.

50,000

Proposed Use of Safe Restart Funding $3,506,000

Mayor’s Task Force Action Items 78,750

Safe Restart Funding Available for future needs $3,095,250



Administration recommends that Council set the remaining funds aside until early 2021 to see if any other immediate needs arise and to allow time to plan for some longer-term items that will be required to ensure safe operations in the futures. Proposed Service Reductions In August 2020, Council directed Administration to prepare the budget with a goal of achieving a taxation requirement as close to the 2020 value as possible. Based on this direction, Administration actively reviewed and identified a number of proposed service level reductions that would reduce costs and therefore the tax requirement. As these operating activities are changes to service levels, they are presented here for direction. Consistent with each of these proposed service level reductions is that along with a reduction in taxation funding, there is also an impact on both the organization and to the community, although the level of impact varies by proposal. Without the COVID-19 Safe Restart for Local Governments funding, Council would need to consider many more options to get close to a zero percentage tax increase. Administration has included these cost reduction items as options to further reduce the overall tax requirement. With direction from the COTW, these items are either to remain in the 2021–2025 Five-Year Financial Plan and the activities be planned for or they will be removed from the budget and service reduction changes will implemented effective January 1, 2021, which will eliminate them from the overall taxation funding amount. As the tax rates will not be finalized until spring 2021, these or other items could be considered later in the budget process; however, the amount of the cost savings would be reduced in many cases due to the delay in implementation. A summary of the proposed service level reductions is listed in Table 9, with additional details for each item provided in Attachment “A”. Table 9 - Summary of Proposed Service Level Reductions and Savings

Item Description Service Cost Savings

Estimate

Potential Taxation % Reduction

01 Street Light Inspections Elimination $20,000 0.02%

02 Temperature Reduction in Civic Buildings

Reduction $200,000 0.17%

03 Public Access Hours in City Hall Reduction $6,500 0.01%

04 Hours of Operations Westsyde Pool and Fitness Centre

Reduction $200,000–$600,000 0.17%–0.51%

05 City Calendar Publication Reduction $25,000 0.02%

06 Public Use and Access Memorial Arena

Reduction $220,000 0.19%

Administration is seeking the COTW’s direction on whether each of the items remain or be removed from the 2021–2025 provisional budget. At this time, a 0.1% change in taxation is equal to approximately $100,000.



Supplemental Items As in prior years, Administration will seek Council’s direction to bring forward new service levels and operational support to be included in the 2021 budget. Supplemental items are summarized for the COTW’s information in Attachment “B”. At this time, Administration is seeking the COTW’s direction to generally move forward with supplemental items following the regular schedule of discussion and deliberation in the new year. As the extent of the reserve balances for the year ending December 31, 2020, are not finalized, we have not included all of the funding sources for supplemental items knowing that balances still need to be confirmed. Concurrence: J. Fretz, P.Eng., Civic Operations Director

Author: D. Hallinan, FCPA, FCMA, Planning and

Procurement Manager Reviewed by: G. Wightman, CPWI1, CPWS, Utility

Services Manager G. Farrow, BBA, Streets and

Environmental Services Manager

K. Humphrey, CPA, CA Corporate Services Director

Approved for Committee of the Whole

DH/kjm Attachments

January 12, 2021 ADMINISTRATIVE REPORT ... - Document Center

Documents

Transcript of January 12, 2021 ADMINISTRATIVE REPORT ... - Document Center