Appendix B: 2021-2025 Financial Plan Project Summary N-42
A project summary for the long-term financial plan and sustainability review, detailing costs and funding sources.
Project Summary
Project Name: Long-term financial plan and sustainability review Priority: Strategic Project Number: 1-2-01500-615 CC150-02
Submitted by: Steven Vella, Manager of Accounting and Kevin Bowbyes, Deputy Director of Engineering
Executive Summary
In the 2019-2023 financial plan, Council approved funding for a long-term financial plan and a financial sustainability review. Staff has worked with a consultant and will bring forward to Council a long-term asset management revenue plan in early 2021. Work will continue toward developing an asset management funding model as a key step in guiding the long-term financial plan. This project will contribute to the goal of minimizing the infrastructure deficit and financial sustainability.
Business problem and opportunity
An asset management revenue plan has been developed to understand the funding requirements for long-term asset management. Next steps are developing asset management policies and financial model to create funding strategies that will achieve desired levels of service and bridge the infrastructure deficit both reasonably and sustainably.
Proposed project objectives
Next steps are to develop a funding model in 2021 to meet the asset management long-term revenue requirements, and creation of an asset management policy. In FY2 the Town will be positioned to integrate the asset management funding model into an integrated long-term financial plan which will capture both existing assets and new capital and operations costs. Ongoing costs in FY3 and beyond include updating the data used to maintain the financial plan.
Business risks
Creating a financial plan without determining the infrastructure replacement requirements may result in ad-hoc and reactive decisions. This can translate into increased costs, potentially decreased levels of service of critical infrastructure and unplanned asset investment.
Proposed sources of funding
- Non-Core FY1 – FY2: Gas Tax, FCM grant - if successful
- (Gas Tax funding will be replaced by grant funding, if future FCM grants are successful)
- Ongoing FY3 - FY5: Taxation
Costs and benefits
| Costs | FY1 | FY2 | FY3 | FY4 | FY5 | 5-year Total |
|---|---|---|---|---|---|---|
| Capital | 0 | |||||
| Operational | 49,550 | 30,000 | 10,000 | 10,000 | 25,000 | 124,550 |
| Total | 49,550 | 30,000 | 10,000 | 10,000 | 25,000 | 124,550 |
Benefits
- Tangible: A documented asset management revenue plan to guide financial decisions
- Intangible: A reduction in risk of higher requirements of taxation than would otherwise be realized as well as decreased levels of service
Recommendation
THAT the Committee recommend the 2021-2025 Financial Plan include the Long- term financial plan project to be funded by gas tax and grant revenue, with ongoing updates in 2023-2025 funded by taxation.
Additional Information
Explanation of project costs in years 2020-2022. 2023 -2025 are ongoing project maintenance costs.
Project costs and funding
| Project costs and funding | 2020 Approved Project Total | 2020 (Completed) | 2021 (Projected) | 2022 (Projected) |
|---|---|---|---|---|
| Provincial grant funding | 8,000 | 5,975 | 2,025 | 0 |
| Gas Tax funding | 38,000 | 5,975 | 47,525 | 30,000 |
| Total revenue | 46,000 | 11,950 | 49,550 | 30,000 |
| Project costs | 46,000 | 11,950 | 49,550 | 30,000 |
| Total expense | 46,000 | 11,950 | 49,550 | 30,000 |
FCM Grant Application: Municipal Asset Management Program Workbook Budget:
Workplan and Budget - MAMP Funding Offer
- Lead applicant: Town of View Royal
- Project title: Long-Term Financial Modeling to Support Asset Management Decisions, Asset Management Policy & Presentation Template
- Applicant Type: Municipal government with a population over 1,000 people
| Activity | Start date (dd month yyyy) | End date (dd month yyyy) | Eligible cost ($) | Ineligible cost ($) | Total cost ($) |
|---|---|---|---|---|---|
| Activity 1: Long-Term Financial Modeling to Support Asset Management Decisions | Jan 1, 2021 | June 1, 2021 | |||
| Assessment of Current Financial Planning Process For Capital Asset Replacement | $1,500.00 | $0.00 | $1,500.00 | ||
| Align Current State With Proposed State & Identify Financial Planning Principles | $3,500.00 | $0.00 | $3,500.00 | ||
| Build Long-Term Financial Model & Plan | $26,000.00 | $0.00 | $26,000.00 | ||
| $0.00 | $0.00 | $0.00 | |||
| $0.00 | $0.00 | $0.00 | |||
| Activity 1 Subtotals | $31,000.00 | $0.00 | $31,000.00 | ||
| Activity 2: Asset Management Policy Statements | June 1, 2021 | Sept 1, 2021 | |||
| Review Existing policies & background doucments | $1,000.00 | $0.00 | $1,000.00 | ||
| Workshop With Staff | $1,500.00 | $0.00 | $1,500.00 | ||
| Develop draft AM policy statements | $6,000.00 | $0.00 | $6,000.00 | ||
| Reivew draft AM policy statements with staff | $1,000.00 | $0.00 | $1,000.00 | ||
| Present AM policy statements to council | $1,500.00 | $0.00 | $1,500.00 | ||
| Activity 2 Subtotals | $11,000.00 | $0.00 | $11,000.00 | ||
| Activity 3: Asset Management Presentation Template | Sept 1, 2021 | Dec 1, 2021 | |||
| Develop asset management presentation template | $3,500.00 | $0.00 | $3,500.00 | ||
| [Add task description here] | $0.00 | $0.00 | $0.00 | ||
| [Add task description here] | $0.00 | $0.00 | $0.00 | ||
| [Add task description here] | $0.00 | $0.00 | $0.00 | ||
| [Add task description here] | $0.00 | $0.00 | $0.00 | ||
| Activity 3 Subtotals | $3,500.00 | $0.00 | $3,500.00 | ||
| Total costs | $45,500.00 | $0.00 | $45,500.00 |