FINANCIAL PLAN REVIEW – DEVELOPMENT SERVICES

FINANCE & ADMINISTRATION REPORT

TO: Committee of the Whole DATE: November 3, 2023 FROM: D. Christenson, Director of Finance & Technology MEETING DATE: November 14, 2023

FINANCIAL PLAN REVIEW – DEVELOPMENT SERVICES

RECOMMENDATION:

THAT the report titled “Financial Plan Review – Development Services” by the Director of Finance & Technology be received for information.

PURPOSE:

To provide information about Development Services as a part of the financial planning cycle in advance of the 2024-2028 Financial Plan development.

TIME CRITICAL:

On June 20, 2023, Council approved the proposed 2024-2028 Financial Planning Calendar (attached) that lists the activities and opportunities for public engagement that will culminate in the adoption of the five-year financial plan for those years. The schedule includes a systematic review of each functional division’s financial plans early in the process to build the groundwork for subsequent activities. Accordingly, this report provides a review of Development Services financial plans.

EXECUTIVE SUMMARY:

Development Services supports Council and the community in managing current and future land use within the Town and are responsible for a variety of development application, long-range planning, and permitting processes. The four full-time staff support projects related to the zoning bylaw, the Official Community Plan, climate action, housing needs, urban design, economic development, heritage, and parks planning. Development Services staff also support the building and secondary suite permitting and business licencing programs, accounted for outside of Development Services budget.

While most (2023 – 99%) of the services provided by the Development Services division are funded through property taxes, this division is responsible for ensuring developer compliance with certain policies and bylaws, such as those related to development cost charges and community amenity contributions. Operational revenue attributed to Development Services comprises less than 1% of total 2023 operational revenue.

Development Services expense comprises an average of 5% of View Royal’s total operating expense. On average, labour costs account for 63% of Development Services operating expense, supplemented by support from external consultants.

The Development Services component of View Royal’s budget is generally financially sustainable, since most recurring expenses are funded by recurring or predictable revenue.

BACKGROUND:

The five-year financial plan includes estimates of revenue and expense to maintain View Royal services, categorized by functional division. This report provides a historical look at the financial results of Development Services in the context of the overall budget and highlights significant components.

DISCUSSION:

Services

Development Services is responsible for many processes that shape the future of View Royal, such as rezoning and subdivision applications, development permits, development variance permits, temporary use permits, board of variance, and long-range planning initiatives. Development Services also manages parks planning, climate action initiatives, such as the Coastal Adaptation Plan, implementation of the Community Climate Action Strategy, and regularly reports on View Royal’s progress towards its GHG reduction targets. While the administration of building inspection, secondary suite, and business licensing services are supported by Development Services personnel, the budget related to these, as protective services, is reported separately from the Development Services budget.

Operating revenue and expense

Schedule A Operating Revenue (attached) details the budgeted and actual revenue for 2019-2023 (year-to-date). Primarily, revenue arises from permit fees. In total, operating revenue directly attributable to Development Services averages less than 1% of total operating revenue.

Schedule B Operating Expense (attached) details the budgeted and actual expense for 2019-2023 (year-to-date) and shows that Development Services comprise about 5% of total municipal operating costs on average. Most of the costs are allocated to planning activities (2023 – 96%) while a smaller component is used to support economic development activities (2023 – 4%). Over the last five years, economic development activities have averaged about 10% of the total Development Services budget. These costs vary from year to year, depending on Council-approved specific initiatives or projects.

It is important to understand that centralized support services costs, such as general administration, finance, information technology, human resources, and communication, are not generally allocated to Development Services. Likewise, not all administrative costs included in the Development Services budget are directly related to Development, since there is some overlap in personnel between Development Services and Protective Services functions.

Most of Development Services budget is allocated to labour costs (63%). Of the four full-time staff managed by Development Services, 3.5 FTEs (full-time equivalents) are included in the planning budget and 0.5 FTE is allocated to the building inspections service. Development Services comprises about 8% of View Royal’s total personnel.

Development Services use qualified professionals to supplement staff’s capacity to deliver non-routine activities and projects. Over the last five years, about 30% of the divisional budget has been allocated to professional services. Other direct costs for goods and services average 7% of the total divisional budget. Indirect costs, such as those for general administration, finance, and information technology, are not allocated to this budget, but instead, are described in the General Administration budget.

SUSTAINABILITY/CLIMATE CHANGE IMPACTS:

The proportion of annual or frequently recurring expense that is funded from annually recurring or predictable revenue sources, such as taxation or user fees, is a measure of financial sustainability. Development Services is primarily funded from taxation revenue (99%) and is financially sustainable to the extent that the service can maintain its existing financial obligations without increasing the tax burden relative to the local economy.

FINANCIAL IMPLICATIONS:

There are no significant financial implications associated with the proposed recommendation.

ALTERNATIVES:

None.

CONCLUSION:

The Development Services division supports planning and economic development activities in View Royal. This division represents about 5% of the total operating budget, funded primarily by taxation.

ATTACHMENTS:

1. 2024-2028 Financial Planning Calendar
2. Schedule A Operating Revenue
3. Schedule B Operating Expense