PUBLIC SAFETY BUILDING TIMING OF FUNDING
A report from the Director of Finance outlining four options for the timing of tax increases to fund a new public safety building, including projections for interest costs and principal payments through 2017.
TOWN OF VIEW ROYAL COMMITTEE OF THE WHOLE REPORT
TO: Committee of the Whole DATE: February 8, 2013 FROM: Jeannie Beauchamp, Director of Finance MEETING DATE: February 12, 2013
PUBLIC SAFETY BUILDING TIMING OF FUNDING
RECOMMENDATION: THAT the Committee receive the February 12, 2013 Public Safety Building Timing of Funding Report for information.
CHIEF ADMINISTRATIVE OFFICER'S COMMENTS: I concur with the recommendation.
FIRE CHIEF'S COMMENTS: I concur with the recommendation.
PURPOSE OF REPORT:
To provide Council with information regarding options for the timing of funding the new public safety building.
DISCUSSION:
In 2012, the public was informed that the estimated cost to the average resident would be a tax increase of 6.7%. This estimate was based on the 2012 BC Assessment Revised Roll. The figures in this report are based on the 2013 BC Assessment Completed Roll. The estimated tax increase based on this assessed value is 6.36%.
The public safety building is projected to be completed in the fall of 2014. It is currently anticipated that half the impact will be realized in 2014 and half in 2015. Interest costs will begin in 2013 as the debt amount will be temporarily borrowed before it is transitioned into long-term debt. The following budgeted costs are based on anticipated interest rates at the time of borrowing and a debenture term of 20 years.
| 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|
| Interest Costs | 30,000 | 125,000 | 192,150 | 192,150 | 192,150 |
| Principal Payment | - | 92,182 | 184,364 | 184,364 | 184,364 |
| Total Cost | 30,000 | 217,182 | 376,514 | 376,514 | 376,514 |
| Est Additional Contribution | 2,065 | 14,952 | 25,921 | 25,921 | 25,921 |
| View Royal | $27,935 | $202,230 | $350,593 | $350,593 | $350,593 |
| Annual % Increase to SF Home | 0.51% | 3.16% | 2.69% | 0% | 0% |
Council may choose to amend the timing of the tax increase to lessen the burden on taxpayers in any given year. This can be done by adjusting the contribution to the Fire Department Reserve, which will result in the desired tax increase in each year. The reserve contribution will be available to assist in funding the new public safety building, and could be used to reduce the amount of debt necessary for the project.
Option 1
Council may choose to leave the timing as currently presented.
Option 2
Council may choose to adjust the timing so that it impacts residents evenly over a three year period.
| 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|
| Interest Costs | 30,000 | 125,000 | 192,150 | 192,150 | 192,150 |
| Principal Payment | - | 92,182 | 184,364 | 184,364 | 184,364 |
| Trf to Reserve | 95,505 | 33,828 | - | - | - |
| Total Cost | 125,505 | 251,010 | 376,514 | 376,514 | 376,514 |
| Est Additional Contribution | 8,640 | 17,280 | 25,921 | 25,921 | 25,921 |
| View Royal | $116,865 | $233,730 | $350,593 | $350,593 | $350,593 |
| Annual % Increase to SF Home | 2.12% | 2.12% | 2.12% | 0% | 0% |
Option 3
Council may choose to weigh the increase more heavily early on.
| 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|
| Interest Costs | 30,000 | 125,000 | 192,150 | 192,150 | 192,150 |
| Principal Payment | - | 92,182 | 184,364 | 184,364 | 184,364 |
| Trf to Reserve | 148,000 | 138,818 | - | - | - |
| Total Cost | 178,000 | 356,000 | 376,514 | 376,514 | 376,514 |
| Est Additional Contribution | 12,255 | 24,509 | 25,921 | 25,921 | 25,921 |
| View Royal | $165,745 | $331,491 | $350,593 | $350,593 | $350,593 |
| Annual % Increase to SF Home | 3.0% | 3.0% | .35% | 0% | 0% |
Option 4
Council may choose to bring a portion of the increase on in 2013.
| 2013 | 2014 | 2015 | 2016 | 2017 | |
|---|---|---|---|---|---|
| Interest Costs | 30,000 | 125,000 | 192,150 | 192,150 | 192,150 |
| Principal Payment | - | 92,182 | 184,364 | 184,364 | 184,364 |
| Trf to Reserve | 59,000 | - | - | - | - |
| Total Cost | 89,000 | 217,182 | 376,514 | 376,514 | 376,514 |
| Est Additional Contribution | 6,127 | 14,952 | 25,921 | 25,921 | 25,921 |
| View Royal | $82,873 | $202,230 | $350,593 | $350,593 | $350,593 |
| Annual % Increase to SF Home | 1.50% | 2.16% | 2.69% | 0% | 0% |
RECOMMENDATION: THAT the Committee receive the February 12, 2013 Public Safety Building Timing of Funding Report for information.
SUBMITTED BY:
J. Beauchamp, Director of Finance
REVIEWED BY:
K. Anema, Chief Administrative Officer