2023-2027 FINANCIAL PLAN APPROVAL - STAFF REPORT

2023-2027 FINANCIAL PLAN APPROVAL

RECOMMENDATION:

THAT the 2023-2027 Financial Plan be approved in principle, as amended, and further that the 2023-2027 Financial Plan bylaw be prepared for consideration at the next Council meeting.

PURPOSE:

To provide Council with a revised five-year financial plan for approval in principle and identify any changes required by Council before preparing the 2023-2027 Financial Plan bylaw.

TIME CRITICAL:

The Community Charter (S. 165) requires municipalities to adopt a financial plan by bylaw prior to adoption of the annual property tax bylaw before May 15 of each year.

EXECUTIVE SUMMARY:

Over the last several months, Council has considered many projects and initiatives that have implications for the five-year financial plan, culminating in a series of budget-focused workshops in February 2023. View Royal constituents have had the opportunity to review and comment on the proposed 2023-2027 Financial Plan through various means, including participating in public meetings, commenting in the Citizen Budget engagement tool online, and reviewing the financial plan through the Financial Plan Insights app and accompanying documents via View Royal’s website.

After the publication of the proposed financial plan, Council directed that funding for the Public Safety Building landscaping (C-085) project be reduced by $20,000. Staff recommend further changes to add funding for building inspection contracted services ($40,000) and to transfer the provincial Growing Communities Fund grant to a new reserve. These changes will have no direct impact to taxation.

Council may wish to direct any further changes to the 2023-2027 Financial Plan prior to approving the plan in principle. Once the plan has Council’s approval, staff will prepare the financial plan bylaw for Council’s consideration prior to the May 15, 2023, deadline.

Information about the financial plan, taxes and user fees will be included with the tax notice mail out planned for mid-May 2023.

BACKGROUND:

The proposed 2023-2027 Financial Plan was reviewed by Council at a series of budget meetings on February 14-16 and 21-22, 2023. At these sessions, Council considered the 2023 core operating budget, proposed non-core and capital items, ongoing costs of capital projects and reserve transfers. Council provided direction to staff regarding specific changes to the financial plan as outlined in Schedules A and B (attached), indicated by black text.

The decisions made during the budget deliberations were incorporated into the Citizen Budget public engagement tool, Financial Plan Insights app, and the 2023-2027 Financial Plan document published on March 13, 2023, on View Royal’s website. The Citizen Budget engagement opportunity was open for input until April 2, 2023. View Royal residents were informed about the online opportunity and budget information through multiple social media messages, View Royal’s website, and RSS feeds.

Further to the February 2023 budget workshops, Council reviewed several items held over in a “Parking lot” list. Council approved all items to proceed as proposed, except for the items listed in the following table with the changes indicated. The change to the Public Safety Building landscaping (C-085) project is added to Schedule B, signified with red text, and will be incorporated into the financial plan bylaw before it is returned to Council for consideration.

DISCUSSION:

Since the publication of the proposed 2023-2027 Financial Plan, staff have identified the following items that, if approved, will need to be incorporated into the financial plan bylaw before it is submitted for Council’s consideration.

Building inspection

When Council considered the proposed budget in February 2023, staff had incomplete information about the Building Inspector vacancy, and underestimated the need to retain a contractor to assist in providing this service. Subsequently, the Town was successful in hiring a Level 2 Building Inspector, and staff now estimate that a total of $40,000 will be required to provide contractor assistance in providing the full building inspection service until View Royal’s building inspector achieves Level 3 certification (anticipated in 2023). As this assistance is a temporary measure, the cost may be funded by Casino revenue.

Staff recommend adding $40,000 to the building inspection budget included in Protective Services, funded by Casino revenue.

Growing Communities Fund

On March 24, 2023, View Royal received its Growing Communities Fund allocation from the province totalling $4,665,000. Staff will provide Council with an analysis of project eligibility and the requirements for fund administration and reporting. Given the five-year spending horizon for this fund, Council may take the time it needs to thoughtfully consider options for using this fund for the benefit of the community. The five-year financial plan will need to be updated to reflect the receipt of the grant and authorize the transfer to the newly established reserve.

Staff recommend adding $4,665,000 to provincial grant revenue and a corresponding transfer to reserve.

When the February budget workshops concluded, the 2023-2027 Financial Plan estimated a 9.97% overall tax increase required to generate approximately $1 million additional tax revenue for 2023 in addition to new tax revenue from non-market change assessments (about $100,000). The amendments as described above have no impact to the proposed change in taxation. A 9.97% tax increase was estimated to result in a $187 increase for the average residential property assessed at $1,050,000.

Taxation impact estimates assume that the ratios or multiples that reflect the relationship of non-residential tax classes to the residential class remain unchanged from the prior year. Council will have the opportunity to consider these multiples prior to adoption of the tax rates bylaw. Estimates of future years’ taxation will be adjusted when the financial plan is reviewed again next year.

Prior to approving the financial plan in principle, Council may direct further changes to the plan.

SUSTAINABILITY/CLIMATE CHANGE IMPACTS:

The changes to the 2023-2027 Financial Plan recommended in this report have no significant direct impact to View Royal’s sustainability or climate change.

FINANCIAL IMPLICATIONS:

There are no additional financial implications other than those described in other sections of this report.

ALTERNATIVES:

Delaying approval in principle of the five-year financial plan may create the need for additional Council meetings to meet statutory deadlines.

CONCLUSION:

The Community Charter requires that local governments adopt a five-year financial plan, prior to adoption of the tax rates bylaw, which is required on or before May 15 each year. The financial plan may be amended by bylaw at any time.

The following proposed schedule for remaining steps in the financial planning process satisfies the legislated deadlines:

• First, second and third reading of five-year financial plan bylaw: April 18, 2023
• Adoption of five-year financial plan bylaw: May 2, 2023
• First, second and third reading of tax rates bylaw: May 2, 2023
• Adoption of tax rates bylaw (special meeting): May 9, 2023

Information about the financial plan, taxes and user fees will be included with the tax notice mail out planned for mid-May 2023.

ATTACHMENTS:

• Schedule A Changes to tax-funded items
• Schedule B Changes to items funded by sources other than taxes