Committee of the Whole

Good evening, everyone.

I'll call the special committee of the whole meeting for February 22nd to order and recognize our friends and neighbors, the Esquimalt Nation and the Songhees Nation.

So for public participation tonight, if anyone would like to speak on a budget-related matter, you can call in under public participation, which will come up almost immediately.

And when prompted, enter conference ID 207-504-67 pound.

And at the appropriate time in the agenda, I will announce the last four digits of your phone number, ask you to mute the live webcast to avoid feedback, ask you to not use speakerphone to ensure sound quality, and that you unmute yourself by pressing star six.

If you can give us your name and address for the record, please.

The meeting will be recorded.

By participating in this webcast, you are consenting to being recorded, and the recording will be available on the town's website for future access.

And there is also a question period later in the agenda, which follows the same basic uh procedures, but you can ask a question about anything.

And with that, if I can get a motion to approve the agenda, please.

Second.

All in favor, opposed, that's carried.

And that brings us right to public participation period.

Staff, do we have any callers on the line?

Your worship, we have no callers on the board at this time.

Okay.

Thank you very much.

So I think we'll close that off and we'll carry right on to staff reports.

Take it away, Damon.

Thank you, Your Worship.

I have a presentation tonight.

It is seven slides long.

Okay.

That's an acceptable number.

I kind of thought so.

Just give me a half a second here.

Sure.

However, don't let the seven slides deceive you.

We're going to take our time and we're going to attempt to answer some of the questions that have been posed.

And if we have not correctly captured your question, or if you think of a new question, we're going to stop and make sure that to the best of our ability, we have answered your questions.

Okay.

I want to recognize that we did get your email, Counselor Rogers.

There is a copy of that email printed out in front of each one of you, and we are going to look at those questions as well.

Okay.

So so far, this is this is day four of a what we hope is a four-day budget process.

We have accomplished a lot already.

I just want to acknowledge that, and I appreciate council's attention and persistence and uh at going through all of the material that we have presented.

Um you can see the check marks beside the items that we have completed.

Um, most significantly, I think the consideration of all of the non core items, all of the capital items, with some changes made to the budgets on council's direction.

So, what we are hoping to accomplish tonight, and not on this list, is the recap that we want to make sure that we're all on the same page with where we left off last time, and the answering the questions.

So that's that we want to look at first is is make sure that we're starting from a place of um you know, kind of all fresh, we're gonna wipe wipe the slate clean and start fresh with um answering the questions.

And then we're going to look at the operational budgets.

Now there is a lot of material there, and what we did last year, if I recall correctly, is we invited council to ask any one of the directors specific questions about the operational budgets.

Um, they could be specific, they could be more general in nature.

Um, but specific rather than you know going through a lengthy, you know, here's each budget and what it means.

I think council has a very good handle on on you know what we mean by the operational budgets in each one of the sections.

So that's a little bit of an open session as opposed to kind of prescribed.

We don't have any particular presentations about that, but all the directors are available to you to look at those operational budgets.

And we will bring up the um financial plan insights dashboard and we can look at specific numbers if if we need to.

And then is the discussion about reserves, surplus, and taxation.

It kind of all gets down to okay, now that we've dealt with the items that um you know are in or out or up or down, um, and we've answered some questions about um you know, just about anything, as well as the operational budgets.

Where do we want to go for this year so that staff can put together the budget document for public exposure?

That's that's kind of what we're hoping to get to by the end of tonight.

Is uh the information that we need as staff so that we can put together the budget book to put on our website to build the citizen budget engagement tool so that we can then take it to the public to say, okay, this is what we've come up with.

This is what we think is the right thing to do, and and and allow that a couple of week period for the the View Royal property owners and and citizens to give us their input.

So I just want to take you to the changes worksheet.

I'm going to just stop sharing this screen so that I can switch it over to the other screen so that we can just very quickly go through that.

And it's right here.

Okay, I need to clearly make that a little bit bigger so that you can see that a little bit more.

Can we get bigger TVs?

I need bigger TVs, don't I?

Okay.

Well, you know, I I use this worksheet for council's information, but I also use it to track the entries as I go through.

So it does serve as a multiple sheet, uh, you know, a tracking sheet for us as well.

We want to be very careful at making sure that we correctly record council's decisions.

So here we are looking at uh primarily this column here uh with the 2022 numbers, although the numbers going forward are there as well.

So we're starting off 2022.

I think we we saw in the very first day that we were starting off with what we thought was about a 5.9% tax increase.

You can see the increases for the following years, but that does assume about $100,000 of new construction.

We we don't have any better estimates than that at this point in time.

It just affected 2022 and 2023.

And you can see the amounts there 22,000 in 2022, 82,000 in 2023.

What council asked us to do, and you do see this on the worksheet both under the taxation section, and then if I scroll all the way down to the reserves and others and casino section, you see it showing up here on row 54 as well as below for casino revenue, and that's because of the funding sources where all the funding sources are coming from.

I wouldn't worry too much about the funding sources, but what you're seeing on that new C18 in front of you is that we've uh talked to um Director Rosenberg and uh his people in engineering to help us understand what either needs to be done because it's already started, and some work has been happening in uh January, would be the carry forward part from the prior year from 2021.

So we can't kind of leave that hanging.

We need to fund uh what needed to be uh you know what was kind of already in progress as well as taking advantage of work that we know is going to happen in 2022, um, and we can kind of piggyback on as I understand it, and Director Rosenberg can speak to it better than I can about um you know piggybacking onto work that is being done so that we can actually save save some money in the long run.

But the bulk of the roundabout has all been deferred to the to 2023.

Do you have any questions about that project and the numbers?

Councillor Lemmon.

Um this is actually a question to um Director Rosenberg, if I may.

Um John, do will we have the capacity given the situation within engineering to actually complete this year?

The the part that sorry, Director Rosenberg, uh engineering and parks.

That's right, you are your worship.

Uh Councilor Lemmon.

Yeah, um, what we've done is we've changed the actual construction of the roundabout to 2023.

The funding that's left is work that would have been done to Hydro's got some ducks that are basically under the road that would be uh inside the roundabout that would be subjected to some significant traffic.

Um, so what we're doing is is Hydro is doing some work this year to um redo that duct bank all in that area, but it's in a bad location we found for the design.

So we're asking them, and that's what the hundred thousand portion is for, to move those ducks out of that way and do that now as part of their work.

If we let them do their work that they've got planned and then build the roundabout, we'd then ask them to come back and move all of that stuff, and it would cost us about a quarter of a million.

So we're gonna do that piece of the project this year uh just to save that money, and then the other piece is just to finish the design of the project, so it's ready to go for 2023.

Okay, but my question is that is is where about the actual capacity within the project.

No problem at all.

That's all BC hydro work and a couple of inspections, no issues.

Okay, good, thank you.

Okay.

I just wanted to know if you had to put them in a row.

It's budget time, which is the same thing.

When you are going sailing, okay.

Counselor Rogers.

That's if it's a one-way trip.

Um yeah, question to uh staff.

Um on this report here, um we'd also asked for a pedestrian push button uh at Chilco, you know, with a four-way stop.

It's done.

Is that is that is that done?

Oh pardon me.

Correct, is the stop signs are in, the lighted LEDs are in, and push button.

And it's all solar.

Yeah.

Okay, so it looks good.

All right, thank you very much for that.

All right.

So the other the other question is um on the timing here.

So is it saying that the cross sections for pedestrian and cycling connections uh will be assessed in 2023 only in the conceptual drawing and not done?

They're going to be as part of the 2022 program.

We're looking at those at the same time.

Okay.

Um, so in and out of the roundabout to connect up to Choco where we put the bike lanes in that are above Choco, and then south of the roundabout that comes down into the Deman Drive area.

Right.

Those will be done as well.

So hopefully we'll be able to have cyclists on the ENN trail be able to cycle up to FS Lake Park.

I would say yes, hopefully.

We have some restrictions within and under those trestles that we have to cross under.

So we're not sure what that's going to look like.

But part of the process is to review that and see what we can do to make that happen.

Would that be in engineering to see if some of the railway and uh abutments supports are are going to be on the sidewalk going to be able to move over?

Is that part of the assessment that they'll be looking at?

Well, if if we're talking about abutment movement, I guess I would say we would look at that for about two seconds, because you're talking, you know, millions of dollars to move abutments.

So I I would assume that we don't have the funding to do that, but certainly I'm sure that would be an option to say you can spend millions or you can spend tens of thousands, and this is how we can fix it.

And and that just means going to one side or the other, multi-use paths, those types of things.

Thank you.

There's enough width there, we just don't know what that width's gonna look like.

Okay.

I'm not sure if this is the right time, but I have sort of a bigger question than just in terms of the overall operating financial plan and how it really is.

Yeah, let's go through.

So let's do these revisions, and then I think we're gonna get to that.

Yeah.

Okay.

Yeah.

Okay, so we're all good on the six-mile.

All right, thank you.

Uh carrying on the next three items, uh, the Centennial Park Toilets Disc Golf Course and Heart Road Lime Kiln.

They're they're in this section of the chain sheet because they had some small uh operating costs related to the project that uh we have removed because of the decisions that council made to either defer or remove those projects.

You're gonna see them again under uh their source of funding.

So additional council members, we've we've looked at the amounts and we've confirmed those amounts as previously stated.

So we um would add those as an operational item to the budget.

We have uh increased the revenue estimate for the Fortis BC.

It'll be uh $13,000 more than is currently uh in the budget as as printed.

And we've added a new um operational um non-core um uh sorry, non core item.

This should this actually isn't uh C 126, my mistake, it's N uh 93.

You have it in front of you for public art acquisition.

Um my mistake at um at uh thinking at first that it was a capital item.

Art is not a tangible capital asset, um, according to our policy and according to accounting standards.

So that's why you see it as a non-core item.

Public art does not have a market value, market uh uh tangible capital assets need to have market values.

It's an accounting thing, I know.

Okay, yeah.

So um what you see here is the ongoing maintenance costs.

As I uh scroll down, you'll see uh the rest of that there.

And again, that is just an estimate, as as especially those um ongoing maintenance costs are going to depend on what type of thing it is that is actually purchased at the end of the day.

So for the items that affect taxation, we are at the 6.02%.

And again, you know, that being a rough my best guess, we're gonna call that a 6% increase in taxation.

So items that affected reserves were the corporate energy and emissions plan that was removed from 2024.

We've already talked about six road mile, six mile road improvements.

Um the heart road lime Kiln that was deferred for a year, and you see the component there that was funded from reserves as opposed to grants.

So that's what's happening there.

New C 125 project summary you see in front of you for council chambers modifications to accommodate two additional council members.

So you see that in detail in a separate sheet in front of you as well.

Investment now, these are all the projects that affected uh casino funding.

So the investment program development was deferred by a year from 2022 to 2023.

Coastal adaptation plan went the reverse way.

It was brought forward a year to 2024, phased over 2024 and 2025 as opposed to the last two years of the plan.

Placemaking Urban design Plan was reduced from 50,000 for each of two years starting in 2024 to 25,000 in each of those two same years.

The 30,000 is to advance the design of that project.

Centennial Park Toilets was removed with the understanding that the uh centennial Park plan, when that's built, will likely have something to say about toilets.

We suspect.

Disc golf course was deferred from 2022 to 2023 for $15,000.

Uh here's the casino uh component of the Heart Road Lime Kiln project deferral from 2022 to 2023.

The public safety building landscaping was deferred from 2022 to 2023.

And we've already talked about the public art acquisition.

Now, council had mentioned um around $25,000 for the acquisition.

We uh Sarah uh director uh Jones can speak to this better than I, but we understood that to purchase and install a $25,000 art project is likely and to run the program, the competition is likely going to cost something more than $25,000.

So if it was council's intent to talk the budget at $25,000, then it would be with the understanding that the actual art piece would not be valued at $25,000 because it's going to take something extraneous to that actual value.

But according to you, it has no value anyways.

Right.

It has no value.

It has no market value.

Yeah, no, that's a counting thing.

So it certainly does have value.

Okay.

Are there any questions on these?

Everyone's good with those.

I'm not happy that we've gone up 10 grand on the public art.

And the other question about it is it doesn't carry on.

So we do is this a one-time thing and never doing it again.

Well, I think we're gonna see, you know, how successful it is and what and what comes out of it, and then maybe it'll be an annual event or biannual or something.

Who knows?

Councilor Rogers?

Yeah.

Um, I think what the intent of this is to try it out, see how how the like it outbey format.

But I I would hope that um you know, as as development projects come along, particularly in in key areas along Island Highway, we should um start making some kind of um you know direction to staff to ask the developer, you know, what kind of art contribution they would be making to the site.

Yeah.

Well, we could.

I mean, also remembering though that of course we could use our community amenity funds for it as well, right?

Yeah, yeah.

So but I think the first thing is just to see you know how it goes and what happens and what we come up with.

Yeah.

Yeah.

Yeah.

Okay, so I think everyone's good on those done.

Okay.

I'm just going to switch back to the slide show.

Okay, thank you.

All right.

So the question I would like to address next is the one that you, your worship, raised on day one.

And that was about when I presented this slide.

You'll recognize that nothing's changed on this slide from when you saw it last.

We talked about you know the 2020 budget and how we drew from surplus for COVID relief 167,500 to help offset some of the pressures of the day.

And in 2021, we started reducing our draw on that, um, you know, kind of phasing back our our dependency on surplus.

But we also drew $200,000 from the BC Safe restart grant to fund some COVID related expenses.

And I I'm I'm not sure I'm gonna phrase the question exactly as as you would, your worship.

Perhaps you want to phrase it better than I, but my understanding was well, if if that $200,000 was meant to fund COVID related expenses in 2021, and we're now in 2022 and we don't have those same COVID-related expenses.

Then why does that $200,000 have anything to do with 2022?

Well, I think my question, I mean, was partially that, but it was really why are we repaying ourselves on the with the accompanying 2% tax increase that goes with it.

Right.

So why why does it affect taxation?

Yeah.

Right.

Well, why do we have to, I think, is more my question.

Well, you know, to I'll I'll I'll I'll take you through some some of you know my research in history uh about this to to perhaps I hope help help understand what's going on and and and I appreciate this is it's tough, it's a little bit tough to, you know, kind of conceptually, you know, understand what's happening here so when we looked at you know why why did we pull why did we why did we pick 200 000 where did that come from and and what was it supposedly you supposed to be for and and i did i did look back and i saw that um staff estimated that just related to labor costs that that the primarily the shifting that had to happen in response to COVID to keep everybody safe at at the public safety building.

The fire volunteers um in in the the um paul can can certainly help and explain that that i know he has already um we had to there was going to be additional costs basically related to the fire volunteers that was about $160,000 that we estimated and then when we kind of got down to the end we said well we do have the BC safe restart grant let's add $40,000 to that to help bring the tax rate down and the burden for some of the other costs that are that are related to COVID but but not specifically for labor there there's going to be some other broader costs that are a little bit hard to define.

So if we just look at the difference between what 2021 looked like and what we're proposing for 2022, I've only pulled this from the previous slide and added the column, the change so that we can understand the dollars that are changing.

So the operating budgets have gone up by about 342,000.

The reserve contributions have gone up by 248,000.

The draw from surplus went from 10ly 12,000 down to 56,000.

So that's a different difference of about 56,000.

We drew 200,000 from casino revenue out of the BC safe restart money, and we're not proposing to pull more out.

That is a difference of 200,000.

I am suggesting that we can fund some of these reserve contributions from surplus to the tune of 228,000.

But going back up to the 200,000, so where is that money going that we're taxing the 200,000 for?

Are we repaying that back to casino?

No.

So I'm really confused on this, and I don't want to take up everybody's time, but I I don't ever remember as a council.

I I remember us agreeing to the one above where we we agreed to borrow from surplus and kick it in.

I the expenditures of the fire hall, my understanding was that they were one-time things and we felt they could be paid with COVID relief funds, which would seem to make sense.

The province gave us that money.

So I don't understand now why we're taxing for those.

Why we have to keep paying for it.

Yeah, exactly.

Why are we going to keep paying for that?

They're done, gone.

So my question to you would be what if council said we don't approve that $200,000?

What are the implications?

What are we getting for it if we've already proved so one time expenditure?

That was my issue.

Yeah.

So I'm confused.

Let's just let Dawn think about that before we hit her with more questions.

I'm I'm I'm I I I do understand.

Um in if you remove if you um let's just go to the next slide.

It might make it worse.

It might make it better.

I'm not sure.

Okay.

But I think in order to balance the budget, if you take the 200,000 out of here, then um we have to find 200,000.

But but where is it going?

Where is that 200,000 going?

It is funding the expenses.

It's already operational budgets.

Let me go to the next slide.

Can I just so what I understood you to say was we took $200,000 for one-time expenditure last year, but we still need that $200,000 this year, so it's obviously paying for expenditures that are different than the ones that were one time.

Yeah.

Right?

I yeah.

So okay, so what we're actually okay, if that's the case, then we're so we sort of under we're understating how much money how much new expenditures are by $200,000.

But the fire department didn't possibly have $200,000 increase in ongoing expenses annually.

No, but it's just it sounds as if there's two hundred thousand dollars in our budget operating budget, but that's increased and it's being accounted for this way as opposed to uh pointing out that it's just new expenses.

Kim, that's what I understand.

I'm just going to say that you know, the total operating expenditure, that's total net of you know reductions, increases, whatsoever.

So you're looking for a corresponding decrease in operating budgets to offset the two hundred thousand dollars.

And what we're explaining is what the new total expenses are and what has changed in terms of what we usually come in for.

So yeah I think frustrations are going to get really high here because I don't think we understand right we're being told that the 200 000 was to cover covet related expenses at the fire hall so now am I being told or we're being told that those are ongoing expenses I'm not clear that the $200,000 was explicit for fire hall I did view a council meeting of February 23rd last year wherein we upped the amount coming from that COVID funding source without really talking about how it's being spent.

We only acknowledge that we have budget challenges and we know that there are additional COVID expenditures happening.

And so now we're dealing with the tolls without really looking at the details of every COVID expenditure for last year.

What I've put on this slide just looks at the labor component.

And remember, we did estimate that the additional change impact, you know, for the fire volunteers, we thought was going to be about 160,000.

Right?

So what you're looking at, and I've I've put 2020 in here as well, and our 2021 budget.

Our 2020 budget was prepared without any estimates for COVID.

So it was closer to our normal labor budget at 4.7 million.

The 2021 budget included COVID costs, and we thought that was going to be about 160,000.

So this is just looking at that 160,000 component of the total of 200.

So you can see that the fire volunteers line, just look at that first line, went from 176,000 in 2020 to 381,000 in 2021, a $200,000 increase.

So we've gone from $381,000 in 2021 to $240.

That is a reduction of $140,000.

So that is a the we're look well again, we're looking at total numbers, so it's not 160 because that 140 is going to include the fact that there's there's you know increases you know you might say that like like like the two and a half two two percent or or whatever um increases and if there's anybody that went up I guess father fire volunteers don't get step increases so that's that's not the case here but in any case um we've we've we can account for a reduction in uh cost that we identified as needing an increase for COVID, and now we've reduced it because of COVID, because we are not budgeting that way or you know we don't have the same demand I don't even understand on why COVID created a need to increase the budget by $211,000 for the volunteers.

The um the director of protective services, I'm sure, can explain that, but I think it related to the fact that volunteers needed to be at the hall, we called it the COVID schedule, perhaps.

Okay, well, so regardless of that, I mean it was in the past, and presumably we proved it.

But so you're taking 141 out.

Yes.

So then how are we still ending up with needing to fund 200,000 more?

I direct you to the second line.

So in 2020 for these are our career fire, and it'll be similar for the emergency program.

You can see the numbers there in 2020.

They were increased in 2021.

You will recall that the personnel, career personnel had um, there were three positions that had phased increases, 50% in 2021, and the other 50% is in 2022.

So that's what you're saying.

Doesn't even exist anymore.

As well as there's going to be step increases as well as inflationary increases that we are we are estimating at this point.

So it doesn't really have anything to do with COVID funding.

So what that part does not.

I'm completely screwed around.

I'm gonna let someone else talk, but I I don't understand it, and I don't like it when I don't understand it.

You know, it it clearly says replaced 2021 pandemic relief funding from casino reserve, 2.1%.

And now what we're hearing is that it wasn't pandemic relief funding.

Really?

It was more core operating, which I would have presumed would have been in the core operating part of the budget.

Is anyone else as confused as I am?

Yes.

I think it's just gone.

We had funding that we could allocate for the co because it's COVID funding.

So we took that out and put it in there, even though in the scheme of things it's going to be an on sort of an on was an ongoing expenditure.

I have no recollection of doing that for that sort of amount of money.

Sure.

So when I look at this, uh you know.

When I prepared this, and and you'll see numbers in green here that received minor corrections.

I don't want to focus on those.

I can explain those if you need me to.

This on uh the the line direct.

So that's what we're talking about, 130,000.

I looked at that line when I when I was preparing this part of the the budget, and I also looked at the all other net increases in expenses at 1.1%.

And I thought that can't be right.

We know that we typically budget for inflation at about 2%, and some at 2.5%, and there are a few at three.

So why is labor and and labor cost at 1.4%?

Where are the step increases?

Where's the phased fire restructure increases?

Those should be driving that to be more than 1.4%.

Why are all of our net increases at 1.1%?

So what the conclude you know the the secret is in the presentation.

I could have, and I considered not having that $200,000 line at the top.

And it would have then told you that all other net increases, instead of being 103,500, are 303,500.

Right.

So in any case, if the budget is supported with a $618,000 increase to taxation, however you slice it, whether it's because we no longer are wanting to pull from the BC safe restart fund to fund additional expenses, or whether we want to use taxation to do so the it the all other net increases it it may have been more transparent if i had said well that's not a hundred and three thousand it's three hundred and three thousand councilor rogers so um you know there was a uh page where you know there was um another estimate of something like nine percent um or some higher amount and i i so i if i think if i see this you're you're helping us um achieve the labor costs with um casino you know taking from you know taking the 200,000.

Is that is that what i'm what i'm hearing you saying to adjust the um so that you're suggesting funding the reserves with surplus, which is which is bringing it down from that nine percent.

Yeah, yeah.

Yes.

And I and I think um, yeah, we'll you know reserves are another thing.

You know, in the other page that you uh can you take us back to the fire hall uh page?

Yeah, and it would this isn't just the fire hole, is it?

Or is it no this is a no this represents all the labor budgets, right?

Although I've only identified the fire volunteers, the fire and emergency program as all of the other ones all told altogether had a 3.8% increase.

Yeah.

And and that that includes not just inflation, but also any step increases.

It actually also includes um um the uh webcasting labor component that was previously um on a contract line.

So right?

So there there will be a that's I think I think it's under 20,000 or something like that.

It's not a very significant amount.

What kind of confuses me is that um you know we see uh you know there's a uh row, the total row at the far end it shows a percent change, 2.5 percent.

And that's 2.5% from what year from 2022 to 2021.

That that's yeah, the one year okay, 2.5 percent.

So if that's the 2.5 percent, then what is the column that says 1.4 percent?

Because if you've got if you've got you know one that says we need a 2.5 and now we've got a 1.4.

The the 2.5 percent is the difference, as you say, between 2021 and 2022, the 130,000.

In order to raise 130,000, we need to raise taxes by 1.4%.

Okay.

Right.

And because we had you know that savings in red 140, it's actually down to 1.4.

Yes.

Right.

Okay.

Kim.

Clearly, we're not going to satisfy that question this evening.

And we will have to come back to you with a more clear explanation.

I suggest that we move on and continue with the meeting.

And when we have a clear answer for you, we'll provide it, and it will be as soon as we can.

Yeah.

Okay, but I mean, the I mean, this really makes or breaks the tax increase, right?

I Don's sorry, can you just go back to that?

I know what you're saying.

Yeah.

Well, I mean, we can carry on with the meeting if you think we can accomplish much without trying to solve this.

Well, the resolution needs to be had.

Yeah.

And we can speculate as long as you want, but it's only going to take more time.

So I suggest we carry on and we keep in mind that this explanation still has to be had.

Okay.

Counselor Matson.

So I have sort of like a not, I'm sort of one step higher and just in stuff that I can't understand in terms of this.

So I look on the uh page 23 in our booklet, I think.

And I just it's the consolidated operating financial plan.

And so the percentage change for this year is 20 is 9%.

So we have a 9% increase between 21 and 22.

And then I look at 23, it's 2%, 24% is 3%, 25% is 3%, 26 is 3%.

And so I'm already here's my issue is I'm I'm not believing those numbers.

Like, how can we have a 9% this year and then they drop down so low?

So I mean so that's one of the things.

And then I look at the tax increases for this year's got 6.6, next year's 8.1, and then in 24, 25, you know, uh the numbers may have changed a bit, but then they started dropping from 3.5 percent to 1.9 and 2%.

And so I just have a concern that the 6 and the 8% that we know we're gonna get the next two years, and the other ones are gonna start getting back up to the 6 and 8 percent.

And my overall concern is that there are the operating expenditures are really unrealistic in in the future and and I'm just concerned that we're hitting it this is just unsustainable if with you know nine percent increases and and operating expenditure say for this year and if if those things go up or even uh 6.6 percent increase in taxes this year and then 8.1 next year I just it for me it's just unsustainable and I just have a concern I I don't have any it's it's not so much as a question but just it's something I don't think I I I don't like and then I'm sure our residents are gonna like and please tell me that I'm wrong somewhere if if I may your worship just address uh uh counselor mattson's um concern about the nine percent if if you're looking at page 23 and at the bottom you're absolutely right it does say nine percent I encourage you to also consider the kind of shaded line just uh an inch or so above that where it says the operating expense total increase is three percent so so those you know percentage percentages get get you every time they get me right because um what you know what's what's in there is you know for example we budgeted zero revenue for from the casino last year.

This year we're we're estimating a million dollars from the casino.

What's the percentage change on that and how meaningful is it?

Right?

So I'm I'm I'm just cautioning you to take it to take the percentages with a full understanding of what it is that's changing.

Yeah, and I'm not even concerned about the revenue.

Like the part I'm just concerned about is the increases in expenditures.

Like how can we keep doing this and survive?

It's just and why so we've gone up about 800,000, just roughly from 21 to 22.

And are these other numbers reasonable to be, you know, just a what I think is cost of living or you know, inflationary for the rest, you know, for the next few years, you know, two to three percent.

I mean, that's one of the things I don't understand this year.

Although some of that will be offset by new revenue.

That's one of the many things I don't understand this year, is how we could only have sixty thousand dollars in new revenue.

When when you think of the like the Erskine Lane rezoning at all alone, I mean, I know it's bare land, but that went from a rural zoning to a zoning that allows 350 residential units.

And so, I mean, to me, that that was done in time for, right.

I don't understand where that is.

Yeah, but I know you're talking about expenses.

Yeah, yeah.

And like if we can get all the revenue in the world, but it's just how can we keep increasing our expenditures so much?

Well, I think as you get the revenue, it presumably means you're increasing the amount of housing and population, right?

So there's some trade-off.

But what's killing us is that last year we had a negative increase in assessments.

And this year we have a minuscule one.

I mean, $60,000 in new revenue is nothing.

Guys are forced, I'm so aggravated now with this whole thing.

I'm forced to eat chocolate.

But I get your, but I guess, Don, just to finish off the fire hall one, and I'll then I'll take Kim's message advice.

I mean, I guess part of what we need to understand is how we went from 822 in 2020 to a million and sixty three in 2022.

Um or the other thing is 6.6 and then 8.1 next year in terms of tax increases.

Well, I never worry about the next year.

I mean, but I'm not happy, you know, because I think it's always going to change.

Um, but I'm certainly not happy with the 6.6 for this year.

So anybody else?

Professor Rogers?

I well, I I guess um yeah, taking from what Kim was saying, we can leave it for a while, you know, and and hope for a better um more detailed um answers, if you like.

I and I I've from what I heard from Damon, I understand how we went from uh 800 to uh a million.

Um, you know, because we had you know that was just the way the staffing was and and uh in the last couple of years.

So yeah, I get that.

Um and I guess the other parts, we're gonna come to reserves soon, and we're gonna talk about the reserve issues that I um that I have, and I think that what Don was was suggesting about um uh what we need to do for reserves.

Well, we'll get I mean we can do reserves, but I mean the operating is where we're completely held up.

So doing the reserves isn't really, really going to um I I guess part of what is puzzling me on this is that presumably last year part of our tax increase anyhow okay I'll leave that one for you to report back um but I think it is a problem because I don't get the the impression that there's much support for a six point some odd percent tax increase um so but at any rate we can we can hold off on that so so what else are you suggesting we do tonight while leaving this huge elephant in the room.

I guess we carry on with our our our discussion and avoid that one topic okay uh that one topic needs to be addressed and it will be.

But I suspect that the outcome won't change the outcome of your debate for the remainder of the evening.

Okay.

Mm-hmm.

Can I can I just make an ask?

No, the the slides that um uh that Don you provided you know we need to see those.

It's great to see it up there.

But unless we actually have them, you know, it would be helpful to have um uh copies of that and uh just another thought is on on page 14 that gives where you give the percentages.

Um, it would be helpful to know the amount, a dollar amount, so we understand what that that those percentages are if we should the rows.

That's why I put it on the slide so you would have that.

Yeah, thanks.

Okay.

So um we can next turn to the questions um that you posed uh through your worship counselor rogers.

If you like, you see that sheet in front of you, and I believe that our CAO is prepared to respond to those.

So, your worship, I intend on addressing each of those questions, unless you want me to avoid certain ones or disregard some.

Um, the first question is it's pretty straightforward.

Your counselor Rogers is looking for confirmation that the projections for tax increases are six percent, eight percent, four percent, three percent, and three percent for the years twenty two to 26.

And that is correct.

Okay.

And the next question is what are the C or D tax projections for five years?

The Town of View Royal and all the other communities in the regional district, I suspect, only receive the detailed information for the current tax year, 2022, in a format that's usable and comparable in terms of town of you rural details.

So we do not have the detailed projections that enable us to extract from the C or D information the Town of U Royal specific tax implication for the years after 2022.

Do we know what 2022 is?

For the CRD?

Yeah.

That's next to nothing.

Like the for Viewer resident, it's per household or something very small.

Yeah.

Okay.

Okay.

So this the CRD.

Is that in this document?

C or D?

No.

But it but it's very little.

Yes.

Yeah.

Yeah.

Yeah.

Similarly, we do not provide information uh in the budget for the other jurisdictions that we collect taxes for.

The school board is significant as is the uh the other jurisdictions, BCAA, MFA is small, but nonetheless we don't include that either.

Okay.

Sorry, good go ahead.

So that's that would be available.

Does the um CRD do a five-year plan as well?

Yeah.

Okay.

Yeah, but the percentage-wise project, you know, at the CRD are very small.

Um, yeah, I mean you you could probably find it online easily enough, but it really tells you very little.

Okay, cool.

Um, but it was dollars per household.

All right.

Well, of course, the budget is not finalized yet.

It could change.

But you have a fair chance.

Yeah.

Okay.

Yeah.

Thanks.

The next question um provided by Council Rogers is discusses the climate action plan, which will be adopted in 2022.

He indicates that we already have short, medium, long-term action items with cost estimate indicators.

Those identified within five years should be included in the plan and marked as climate action placeholders.

After council adopts the climate action plan.

There's not enough staff time available currently to include all of those details in anticipation of council approval, but it will be in future budgets.

Also see the financial plan insights.

Have a look at the dashboard.

So you should find the information you require using those tools.

Okay, can you can you um help me with that then?

So because I couldn't um you know find it here, it just didn't say council related.

You know, legislative doesn't mean anything.

The heading is legislative.

Yep.

And so all the items under legislative are those items that are specific to council.

Okay.

And again, so that's all that's including does that roll up then uh the enumeration and the equipment costs and the conferences?

All on legislation 1100.

So the um on on the board you will see the details.

Um the director of finance has puts them up for you, and so the list is is very comprehensive.

It is the entire budget for council members, including conferences, etc.

The dashboard really is a great tool.

That's in the dashboard.

Okay, thank you.

The next question relates to the development cost charges.

Um the five-year plan should also include a DCC review in 2023, right after a new OCP.

Will our DCCs keep spending power pace with inflation and all the infrastructure needed for significant increase in density?

The development cost charge bylaws should be reviewed every five years and also after every OCP rewrite.

Regular review enables inflationary adjustments.

This item will appear in next year's budget after the OCP amendment is concluded.

So if we so when was the last time we did the uh OCP?

2011.

Right.

So, you know, and it should be done every five years.

So we really should be identifying that in the five-year plan, you know, and we should have some approximate making costs.

And there should they should be.

I think we were anticipating the OCP review, and as soon as that's completed, we will be putting it in the budget from 2023.

Okay.

Can I just follow up on John's question?

Go ahead.

Just uh the whole thing about inflation.

If we had 10% inflation and the DCC bylaw was done three years ago, we'd be falling back by that.

And I'm just wondering do we do we get to that for we can certainly do a review on a more regular basis, but they cost money.

We just can't like add cola to the DCCs.

I'm sorry?

Like add cost of you know, whatever the inflationary rate, we just can't increase our DCCs by that amount every year.

We can we can make adjustments to the development cost charge bylaw, send them to the ministry for approval and get reapproval from them, and then adopt a new DCC bylaw.

That's correct.

Okay, again, but if there's a process that we have to follow to actually affect a revised DCC, whether it's an inflationary adjustment or whether it's a wholesale adjustment affecting all the different projects.

So we could just say, oh, there's a 10% been a 10% increase in inflation the past three years.

We just want a 10% added, and they would say yay or nay.

Generally, what will happen is they will want us to update all the numbers, recognize the projects that are finished.

Got it.

All of those things.

Okay.

So it's it's it's very bureaucratic, but it's it's very much in the interest of doing a good job in the interest of both the development community and and the local government.

Okay, thank you.

The next question from Council Rogers is I expect OCP density will have related population increased projections.

The big question when that takes us over the 15,000 and 100% policing costs and more fire protection full-time equivalents.

Our current projection for reaching 15,000 is 2038.

We expect that in 2038, we will be paying 90% of R C P costs.

We currently have a subsidy of 30%, and our RCMP costs are pooled with all other local governments having a population of 15,000 or less.

Those that have a population of 15,000 or more do not have the luxury of a pool, and they pay 90%.

And so 2038 is the year that we project for that.

The next item.

So I I guess yeah, that's you know, that's the anticipated right now.

And when um, and I'll be very interested when the OCP is done and and uh you know what densifications we're looking at.

Will that OCP give us an estimate of of units and density and and population increases in that report?

Oh, I think that that answer should be answered, or that question should be answered by the uh director of development services.

I believe she's available to respond.

What's our next step scan review five years from now?

So Lindsay's prepared to respond.

Go ahead Lindsay.

Thank you your worship Lindsay Chase Director of Development Services.

As a result of the latest release of census data we are within um population projection that we had anticipated for this year.

And I don't I I don't think that that is going to that our our overall projections are going to change substantially uh between now and twenty thirty eight so I would I would suggest that the the direction the RGS are relatively accurate.

Okay thank you you're welcome we'll have to get rid of most of council off those numbers go ahead yeah uh counsel of his next comments um design the L and highway traffic design plans all elemental states have to be equally and fairly taken from viewing that we can do not think about for the random grant funding.

Grant Flat Island Highway and line are shot in the dark, and we have waited a long time.

Our expectation is that our transportation planning process will identify and prioritize.

Our expectation is that our transportation planning process will identify and prioritize sidewalk requirements.

Council will want to debate the approach to funding capital projects, both the ones that are priority and those that are seem to be of a lesser priority.

Staff haven't taken a position about whether they should be grant funded or otherwise.

It's in our best interest to try to take advantage of grant funding in all of our projects.

And I guess my question is for the grant funding that we've tried for the Island Highway Project.

Um, and we've been doing this for a long time.

You know, ever since we did this portion down here, we've been applying for a stretch from the Helmcken Road to Stormont.

No, we haven't.

We haven't never done any grant funding.

That's right.

I mean, we only just got the detailed design, and my understanding was understanding was that we were going to apply for funding once the detailed design was complete.

Director Rosenberg.

Thank you, Your Worship.

Uh we complete that design in 2019, and we did apply for funding in 2020, but we weren't successful.

Right.

Yeah.

So I just think that it's um, you know, it's it's it's grant funding is such a uh a shot in the dart.

That's just my view.

Thank you.

Thank you.

Um the next item using Jedburgh Sidewalk project as a template, 250,000 for 120 meters of concrete sidewalk.

If the projected OCP housing infill happens, the town will have to budget about 15 to 20 million in non DCC sidewalks before development happens over the next 15 years.

One side only and all in 2022 dollars.8 million in the harbor area, 2.7 million for Glenarley slash Stormont, 1.6 million for Wera slash Midwood, 2 million for Kingham.

Will all this be factored into active transportation plan and DCC review?

So our subdivision servicing bylaws speaks to those neighborhoods that require sidewalk installation.

Council in some instances have provided direction to maintain the character of neighborhoods.

For example, you know, some of our neighborhoods don't have sidewalks, and we understand that there is no intention of actually installing sidewalks in those places.

Over time we might get requests from members of the public to change the character of their block if they're concerned about having a sidewalk.

Local government can require infrastructure to be installed adjacent to developments up to the center line.

And so when it comes to infill, if there is a sidewalk or a road improvement to be done for that property, we can require that development, be it a building permit or be it a larger development other than single-family housing, we can require that the property owner install that infrastructure up to the center line.

And in some instances, we have collected cash in lieu of having them do the work so that we can take care of economies of scale by having a larger project in our future.

Council will have to budget for those projects that they want to advance prior to development.

If, for instance, we want a sidewalk and there's no development happening for five years, but we still want the sidewalk, we can certainly budget to put those sidewalks in.

Sidewalks can be included in development cost charges, but only to the extent that the projects themselves are required as a result of development.

So I just want to say that thank you for that.

And I guess we'll wait and see what what the OCP comes with and what recommendations, what changes would be happening in the various precincts.

We'll see.

And in the harbor precinct, we don't want sidewalks.

Well, you see, I guess that the thing is that you know, sidewalks is a double-edged sword.

You know, if you're we're going to double the the uh density and double the traffic, then I think there will be a great um great concern about public safety.

So that's that's one of the things of active transportation.

Council may well wish to want to change the subdivision control byla to establish a different profile for neighborhoods as they see fit based on what criteria you might have.

The next item is the uh the new RCMP building.

Uh the comment is new RCP police building will be necessary within five years.

That should be in the plan, debt likely.

What would our share be for a $25 million dollar building?

16 percent, four million dollars.

I think we can agree that the RCMP building ought to be included in the five-year financial plan.

The scope and construction and planning process is still currently underway.

Uh the magnitude of the project is not yet fully understood.

In the upcoming months, I expect that council will be further engaged on the topic with a view to establishing a conceptual budget and seeking some direction.

The mayor and the CAOs will have a meeting likely in the first couple weeks of March to talk about where we can go with the police building, and at that time we will be bringing the subject back to council for discussion and then some direction.

And so at that time, it may well be um something that we can include in the budget.

Points of that, yeah, committee worship.

Um, you know, I I think this is relevant and and I you know I'm I'm really pleased that all the mayors and COs are are really working with the superintendent on this.

But um you know because we were talking about um you know the the debt debt counts debt load and what we could finance or not could it be a fire truck or and um so in that um that discussions about how we're gonna pay for a fire truck and then I'm thinking okay if we if we um you know if we see that there is a need within five years then that would be a five year prediction of of uh of debt and looking at um the the two debt loads that we have right now that you know are still ongoing um you know it it does beg the question at least for me is um you know what our ability to carry what how much in debt um and you know is this uh and i guess when we get around to it we'll we'll see if it's every municipality is going to have to do a um what's the word uh referendum question referendum yeah yeah well i think it's quite likely but as kim says we're not there yet no we're not no we're trying to get unanimity on the building and what's going to happen and then we'll have to figure out how we're gonna pay for it yeah yeah thank you the tree tree planting and tree watering, we don't need to talk about that, Kim.

It's already been covered.

Um, and this isn't the idea here isn't to micromanage staff's work in the town.

I if i may, we're sure should no, Councillor Rogers.

It's it you you've already brought this up in the last meeting, and you were given an explanation.

And um, if you feel that we need to hire more staff to water trees, then bring forward a notice of motion.

Okay, thank you.

I will.

Okay.

Uh, the next item we know that the town hall is showing its age and already seems to have significant limits, strained for staffing capacity, especially if the pandemic pandemic is now over.

How many FTEs now and projected in five years additions slash renovations should be budgeted as placeholders within the five-year plan now?

Well, staff agree that the five-year plan should reflect anticipated changes that affect the budget over the financial planning horizon.

COVID has taught us that in many instances brick and mortar need not constrain our work.

We're learning that work from home solutions are a good solutions.

Other departments realize additional future demands, they will be incorporated in the budget process.

Staff have considered at times various options for additional space, including a new worksyard and a new town hall.

in future years um a better longer term within that financial plan yeah i i agree with with your worship you know we talked about uh taxes earlier and you know generally we don't as a group focus on years two three four and five and and it is imperative that we ultimately get to that point where we have a uh a really clear plan it it uh it makes sense to have some rules about what budgets should be approved.

If for example uh a new budget is proposed for the current budget year and has never been in any of the future years what is wrong with that scenario it kind of demonstrates a lack of planning and then so if if we're anticipating that we're going to need more manpower, it should be reflected in future years and and so I agree with counselor's Councillor Rogers' perspective that we need to anticipate those changes.

And we are working on doing that.

Mm-hmm.

We are getting there slowly but surely.

I think um you know staff have already indicated that you know it's going to be an infrastructure review and uh the life expectancies of those and and certainly the town hall is front and center in that regard.

Thank you.

Uh the next question where is the four point seven million in surplus shown in this book?

It is not in that book.

It is shown within the annual financial statements.

So I guess i if I may, worship, you know, if we get this in an annual financial statement, and um, you know, it it just seems so so nebulous that it's there, but not here.

And um uh so uh I guess if I'm I would like this for for, you know, if I have to look at or say if staff can bring to us, you know, what the financial statement is and and the breakdown of that 4.7 million, because it seems like we have a lot, and yet we're worrying about um what we have to enforce on and I understand Dawn's saying is that we need to have some monies for staffing for three months.

So, but it's it's a surplus number that council adopted um several years ago, and and we work within that.

If you'd like a report back on surplus sometime during the year, I'm sure staff could do it, but it's the way it's always been done as long as I've been on council.

When the auditor reports back, we we find out what the previous year's surplus was and what the accumulated surplus is.

Nothing has changed, and it's never been in the budget because it's not used in the budget.

It's like town hall isn't in the budget, right?

It's an asset.

Next question, Kim, because we do have a ways to go tonight.

Thank you.

Uh the next item is uh regarding inflation.

Construction project costs factored into capital projects as inflation contingency.

From 580,000 to 744,000.

West Shore Skate Park, skateboard Part 2.

So the comment I would have there is capital projects that are expressed as conceptual include significant estimates, uh significantly significant contingency allowances to qualify their estimates.

And capital projects that already have a detailed cost estimate generally will have a smaller contingency.

So we do try to anticipate um unforeseen costs in the estimates that we include in our budgets.

I guess uh to that um it's it's been a um somewhat of a shock to the Warner Fecal Water Commission um when we've contracted out uh for uh doing um major infrastructure work and uh no one's bidding now or they're um bidding well in excess, and uh staff are coming back to us with uh increased costs.

And I and I this one example is um I think I just caught it in an up island um project park cost where you know indeed their own pickleball had gone up by 200,000.

So it's um um it's definitely an inflationary supply issue.

We've certainly seen in the last year significant increases in construction.

In my meetings uh discussing the RCP building, it's quite amazing how how large the uh increases in construction costs are, even just over the last 12 months.

And so staff do try to stay on top of it.

Should look at a hospital increase.

Okay, thank you.

The next item police expenses rise from 2 million in 2021 actual to 2.7 million, the estimate in 2026.

This rising due to more FTEs and increases in officer salaries.

The short answer is yes.

Both increased number of police officers and an increase in costs.

You might remember that the RCMP have unionized recently and they have negotiated their first contract, and uh the cost increases significantly.

The next item has to do with reserves.

Don has a director of finance has a slide for that demonstrates the changes.

You in your question, in 2021, we shortchanged our reserve contributions by 200,000.

This should be paid back into reserves from surplus now on top of the 2022 amounts.

And so if you can share your slide for so the 2020 budget for uh reserve contributions was 625,500.

In 2021, that was reduced to 291,500.

So a reduction of $334,000.

In 2022, the transfer to the reserve is $539,500.

So an increase by $248,000.

And so I don't know what council's intention is today.

We haven't talked until this point about reinstating what was not transferred by doing a transfer from surplus, although there is a transfer from surplus incorporated in this budget.

So I guess when we get to reserves we could we can discuss that.

But I um yeah my concerns is the you know with the other things that are coming at uh coming up, um are our reserves actually healthy enough?

And I gave some examples where I was worried about how far they're going down in the five years.

So well the to to your to the point that you you've submitted, the reduction was 334,000, and we are drawing from surplus to fund reserve contributions to the two years 228,000.

Okay.

So we we are making that up then from the surplus.

At least a certain we're not making back up what was missed.

No, but we're putting it back up if if that's approved and adopted.

Yeah.

And then the the five year balance of the funds are all in the five-year plan.

The starting and ending balances.

Yeah.

Right?

And they're based on very, as I've said before, very conservative casino projections.

Okay, it's not sorry.

So on our page, um I don't see a page number, but appendix six, the very last projected reserve balances.

So we start at 20 million, then we end at 15 million, and that is um with arguably um conservative casino projections.

Yeah, it's the individual sections that uh that worry me.

And and I guess you know I'll let staff take it and I can ask these questions when we get around to uh dealing with the reserves.

So the next item, um council rogers observes that if if sewer capital goes from 1.8 million now to 215,000 in five years, isn't that a danger?

When we look at those numbers by themselves, yes, there is some risk in that.

Um but we are in the process of developing that long-term financial plan, and that plan will uh be established following the development of our capital asset management system.

It is intended to be a tool that anticipates and addresses the variability of capital project funding and so uh we agree with you and it is a longer term planning process that addresses that risk and we are in the process of getting that in place the long term financial plan will follow our work in the capital asset management efforts so a question and where so what is our funding source how do we top up the sewer capital I'm sorry?

How do you know how how do funds go into the super sewer capital?

What is the funding source?

Well, generally speaking, it it is going to be um the sewer rates.

You know, the usual revenue source for the sewer fund is is uh what we charge our okay our users.

So so that's the sewer rate pays for that and DCCs pay for the sewer DCCs, right?

Well sewer DTCs are are it's related to sewer, but it's not a um a source of funding for the uh the sewer capital reserve.

The sewer DCCs are very specific to projects that are required to be done in support of the development of our community, and so there's a finite list of projects that um are the basis for the charge, and those same projects are where the DCCs has been.

So you you see in on that, you know, and identified again the sewer DCs how much that's gone, you know, from you know almost a million down to 10,000.

And so are you saying that the long term financial plan will also help us strategize better and in the you're speaking to your next question.

Yes, I am.

So let's let's get to that if we're finished with the first one.

So you made two observations.

Sewer DCCs go from 965,000 to 10,000 in five years, and you made the observation that highways DCCs going from 1.6 million to 62,000.

Is that a problem?

It's not a problem in the sense that development cost charges are collected to do projects that are required to or as a result of development.

The project list is finite, and the project requirements are triggered by the development itself.

So DCCs are collected to fund DCC projects only.

The balance of the DCC reserves is established on the basis of DCC funds collected by development, and the DCC projects themselves are completed to accommodate development.

So it's it's a very finite world in terms of the capital projects that are DCC projects and the funding sources for those development cost charges.

Significant sewer and road projects are budgeted as part of the plan in 2026.

The current situation isn't seen as a problem.

I suppose we might view it as a problem in that there has not been a significant number of building permits issued.

And the sources of development cost charges are developments through subdivision of land or through the issuance of building permits.

And so as we develop subdivisions will generate DCCs, and building permits will also generate DCCs.

So it does highlight the need to review our DCCs after on a semi-regular basis every five years or immediately after a rerun of the OCP.

So my um question then, um when certain projects have been um approved, let's say number seven, number nine, person lane, and they're making substantial DCC contributions, um do we can we project?

You know, we you know it's it we haven't got it yet, so it's you know you can't count it, but are we able to project and and have some confidence that um you know when those projects go on stream that these DCCs will go up and and will be uh sustained?

We can we can establish an understanding of what potentially might be collected if all of developments and process took out a building permit.

But we don't know when building permits will take place.

I I personally thought that uh Eagle's Nest would see a building permit much sooner, but that's not yet happened.

Um and so another example might be Christie Point, another development that we saw or a redevelopment that we saw happening.

Um potentially a candidate for DCCs, but um our crystal ball is not going to be as accurate as the reality of actually realizing those development health charges.

So when the contributions, and I and I guess so that's that's our problem then.

And you know, because you can't say how much they are, you know, it in I I guess that's one of the inherent problems.

Um we can only show estimates of uh estimate um uh expenditures, but not really good estimates of contributions.

No.

Well our you can, right?

It does Kim said it depends on what projects go ahead and what projects pay their DCCs.

Exactly.

Hmm.

Okay, next one, Kim.

So moving on, the um the next item is shouldn't we be increasing our reserve contributions from the standard $500,000 per year to $600,000?

Um I think our director of finance would say absolutely let's do that.

Um it is our intention that the long term financial plan that we intend on developing once this capital asset management process is uh to fruition, that long term planning process will enable us to look at what our requirements are in future, and uh that will be the ideal time to understand exactly how much of an adjustment should we be making to set aside money for future expenditures.

And it's you too day, um we had done a um uh really good assessment of our reserve funds a couple of years ago.

And are we on still on target uh for um the the predictions and and um unless we're um saving for any day building our reserves, are we still on target for for based on on those guidelines and and directions?

I think the um the policies that we have express what we should be transferring to reserves based on other factors, things like what is our operating budget, how much should we set aside in reserves relative to operating?

Similarly, there are other policies above capital.

The director of finance can um nod her head to say yes, we're we're behaving within that policy on a consistent basis.

We do know that COVID did you know cause some changes temporarily, but yes, we're doing good.

Okay, thank you.

Um the next observation uh you've made is Schedule 1.3 consolidated reserves.

2026 shows a whopping 1.895 million in revenue in DCCs.

What is this?

You need to understand that when it comes to development cost charges, we recognize the revenue when the expenditure is made.

So when we collect development cost charges from a developer, we don't really recognize that revenue, it's deferred.

And it is recognized when we spend it.

And the effort is to match the revenue with the expenditure.

So as was observed by Council Rogers previously, we are spending our DCC sewer reserve is reduced from 965,000 to 10,000 in 2026.

And also our highways DCC is reduced from 1.6 million to 62,000.

It's those expenditures that are being made in 2026 that enable us to recognize the revenue in that same year.

Again, we're matching revenue and expenditures, deferring the recognition until such time as we're actually spending the money.

So we don't know we don't know the source of that revenue.

Well the source is contributions, but we don't recognize it officially in our financial statements because the accountants have decided that it should be something that's deferred until such time as we spend the money.

It's an accounting policy uh or an accounting standard that's that's dictated by the accountants and finally council rogers uh comments about community amenity contributions now has 177,000 dollars.

What is the $150,000 capital project on page 207?

And uh that project is actually the park property which is adjacent to the transit project on the corner of Burnside Road and Watkiss Way.

So what what is that project for?

It's the uh property next to the transit site.

Oh okay.

On the corner of Burnside and Watkins Way.

Okay, so so sorry, sorry for uh friend.

So this was the um contributions made by transit to us.

It was actually made but yes, that's correct.

Okay, okay.

Uh the question is also there that uh can we put in any anticipated revenues in 2022?

Um to respond to that, you know, the form of amenities provided versus revenues are contingent on the approval process, so no estimates uh are not proposed to be done.

So what happens is when we have a project that uh proposes a project or a physical amenity as opposed to a cash contribution, we don't know who's going to do what.

And so to estimate and then put that in our budgets, etc.

Um, we're not supportive of that kind of process, it's not a burden and so to speak.

So we won't uh we're gonna be about a year behind each time.

Uh we will be recording revenues as they're realized, so it's going to be like a real-time recognition.

Okay, thank you.

Those are all the questions.

I don't think so.

That was just counselor Rogers' questions.

Yeah, thank you, Kim, for managing to deal with those at extremely sure notice.

Yeah.

I have a question on page 22 under revenue.

That is fire protection and emergency program.

And I'm curious why the 2021 actual value was 439,000, but our 2021 budget value is 310,000.

Your worship, I can take a stab at that.

Uh that would be in part, and I can't tell you the exact number, but that would a significant part of that would be related to the amount we received from EMBC for wildfire uh response expenses.

And you would see a corresponding um discrepancy, if you will, between 2021 actual and 2021 budget when it comes to some of the fire costs for the same reason.

Thank you.

It's a separate room.

That money we put into reserve, don't we?

Don't we put it into the fire equipment reserve?

The difference between if there are any differences between um revenue and expense, yes.

Okay.

So once again, ignoring the elephant in the room of how we're going to work with that tax increase.

What's next on our plan?

Your worship, the intention at this point was to look at any specific areas in the operational budget that council would wish to look through.

And I certainly am happy to, for what it's worth, share the financial plan insights on the screen.

I realize it's very small font.

And you know, we can we can kind of dive into any specific areas that uh you wish.

Okay, council, do you have any questions on specific parts of the operating budget?

Mine is more over archier.

Well, I think Don took a stab at answering that one already.

Well, yeah, that's gonna be covered by increases in revenue, but still doesn't change the fact we've had huge increases in expenditures.

Well, I mean we can go over the increases in detail for this year.

Um I mean the reality is we're not really increasing one hell heck of a lot this year, right?

I mean I know the dollars and figures are, but in terms of actual um they're from what it appears, they're decisions we've made earlier that are catching up with.

Yeah, I totally understand that.

I just yeah, I'm concerned that next year we'll have a whole bunch of things added to our wish list and I'll keep going on and on and on.

Yeah.

But at any rate, so this is if anyone has anything specific in the operating budget that they would like more information on, or I'm sure if they sent Don an email, as long as it's not 38 questions, we would endeavor to get those answers for them.

Good question.

Councillor Rogers.

Yes, thanks.

So um I'm on uh looking at page 22 and 23.

So on uh on the user fees of the garbage collection, uh, we have a budget of um uh revenue, I think, of 646,000.

And down below, um environmental health services again, garbage collection, and it shows the the expenditure for the year being 575 so if we collect 646 and spend 575 was uh what's there seems to be a difference here on what we're collecting and spending on garbage collection if if i may your worship uh the particular layout of this um document the schedule 1.2 is is meant to you know, provide more detail uh in the form that you'll see it in the bylaw.

It's a little bit patterned after um the way it is in the bylaw.

And one of the items that is is a little bit of an anomaly, and that is internal cost allocations.

You see that near the bottom of right?

So those internal cost allocations, you'll see a corresponding item at the bottom of page 22.

You'll see the corresponding offset to that.

A charge, if you will, that we charge against uh garbage collection and the sewer fund to help pay back govern general government services.

So that's town hall and and finance and IT and corporate administration.

So we have to identify it as a we're kind of paying ourselves from these sewer and garbage utility functions, right?

So those are those are what we call non PSAB compliant, or they're not okay according to you you can't call revenue revenue when it's not really revenue.

You're taking it from one pocket and putting it into another.

So we separate those out, and and that's that's the difference there.

But I do an exercise definitely every year and for each and every year to make sure that those are accounted for when we set our garbage rates and our sewer rates to make sure that we are collecting sufficient, and that's why you see uh the the garbage and sewer revenue that looks like it's higher than the expenses, but when you add in those internal car cost allocations, you will see they are exactly match.

Okay, so if I can if I may reinterpret that, um we're collecting the fees, and it's one thing to pay the contractor, but there's also internal costs that we must compensate for.

Much better said than I did.

Yes, thank you.

Yeah, okay, thank you.

That helps.

Councilor Lemon.

Yeah, quick question, Jolan.

Um, on page 23 under Transportation Services, 21% hike in administration.

Can you just talk me through that?

I'm not sure, but I certainly will try.

What I'm gonna do for that is I'm going to bring up uh the the corresponding area in our our um dashboard and I'm gonna look at that.

Just let me get there.

Um that is for you're looking just specifically at transportation administration.

Transportation services and administration.

I'm gonna just share my screen.

Okay, and I do apologize.

I do wish that was bigger.

The number that I've highlighted, I'm pointing at right now, that says 950,776 as a total budget.

And that corresponds to the column on page 2023.

I'm sorry, 23.

I think that's the is that the one you're looking at?

The 950,776.

Yeah, and next to it it says 21%.

Right.

I would argue, and here's the 21% here.

You see, there is a non-core item of $145,000.

I believe that is the active transportation plan.

So that's a big chunk of the 21%.

And I can tell that because the core increase is actually 2%.

That's $805,000.

If you take the 950, subtract the 145, you're gonna end up at 805,000, whereas the prior year budget was 788 or 789,000.

Okay.

Thank you.

Thank you.

And why doesn't it disappear in 23 what's that counts to mouse well i understand why the 140 or whatever it is but why doesn't 23 go down by that amount because it's a one-time expenditure isn't it so when i flip the uh dashboard to 2023 i can see that on that same line in 2023 of the total 934 85 000 of that is a non-core item, which is i'd have to look at the non-core sheet to remember i'm just it's not coming out of my brain exactly which one that is, but that's a non-core item.

So that the core uh increase is eight hundred uh I'm sorry, five percent.

It goes from it goes to uh eight hundred and forty-nine thousand.

I didn't understand seventy-five thousand of that is the urban forestry plan twenty twenty-three.

So it's not more core money, it's just non-core again.

So those would be decided at the time in terms of whether they were funded.

Can we on the revenue side, just to make me more comfortable, can we check the two specific properties?

I'd really like to understand that 60,000.

And the properties I'd like to understand is 298 Island Highway.

Because I mean that had a considerable rezoning on it, and you would have thought that that alone would have generated property tax increase.

And then also number nine Erskine.

I mean, that one really floors me.

The the the land value couldn't have gone up enough on that rezoning to generate more revenue.

Nine of seven.

Yeah.

Well, seven was yeah, no, right, yeah yeah yeah so I mean if we if we're able to find out about those from DC assessment I'd it might help to understand how we only have sixty thousand dollars in new revenue.

Noted because that's that's a real part of the problem we're facing.

Is um is it too late to uh challenge a a uh a claim or yeah an assessment yeah okay so I'm not seeing any other specific questions, Councillor Rogers?

Yeah, thanks so um in looking at schedule 1.2 on page twenty three um I I'm looking at the um various columns of um 2024, 25, 26, and um there you know let's say protective services as an example.

You know, it's all just a flat two percent, two percent, two percent.

And I'm wondering if um you know we're not it shouldn't be higher um than that, you know, and and I guess the same thing with transportation services, um you know, projections of zero, two, and two percent.

You know, are we um giving too too low an estimate um that then um um should be better reflected in what those three year overall tax increases might be like?

Right, I could ask that what two hours the same question I had two hours well i just yeah i know it's um is is 2022 23 yeah sorry 24 25 26 4 3 and 3 um you know is that real realistic when you know having a two percent in those years uh particular in protected services um would um it it seems like that probably should be higher and reflected to the top so it's not a shock when the year comes around um certainly where i have solid information, and i might point you to um kind of three-quarters of the way down the page 23 for library services and recreation services.

Where I have other projections to base them on, I do I do my best to reflect them here.

In the absence of information, I can make I can make any assumption you you would like me to make.

it's always going to be a battle to increase the budget and and less it it's it's easier for staff to take the budget as it in as it is as opposed to um you know fight for it to be reduced you you know what i'm saying so it's uh you know if if we do an automatic assumption of a three percent inflation without having to look at at every single little penny it's going to be easier for staff just to say well that seems reasonable so to to to me it's probably more conservative to um to estimate it out to two percent yeah, because i um i go back, you know, I go back to a 2012 budget and look at the five-year.

And and you know, and then so then i'll i'll see what it was like, what the projections was when when 2022 was predicted five years ago.

And you know, I see what those are and and um and in the reality, and I think um and I was wondering if there's any way of being able to get a um a better chance.

I know it's crystal ball, but um it just doesn't seem now, and maybe there won't be any inflation in 2025.

Yeah, they're just projections, right?

I don't know.

I know which we're just keeping it.

Yeah, we're just making the province happy.

But it also makes nine percent look better when the next few years it's two and three percent councillor counselor Kowalovich.

Thank you, Chair.

I'm just wondering if we're at the stage yet where we can start uh uh communicating with with each other about uh potentially uh considering removing some optimal uh capital uh recommendations and or decreased discretionary at this point we start doing that yet i don't think so no i don't think until we get the the that 200 000 sorted out that we're in a position to um make final decisions okay uh my next question would be what is the timeline and anticipated uh remedy for that 200 000 and what will that look like would uh 25 minute recess suffice, or is it going to be another meeting?

No, I think it's gonna be another meeting for sure.

Yeah.

Okay, okay.

So what are we gonna do tonight?

Cool, that's just we're finished now.

So, Don, what were you thinking of lastly?

Going through reserves.

I'm presuming the council doesn't have any more questions on the operating uh at your pleasure.

We can we can look at reserves.

I think we should do that.

It's it's only just 10 to 8.

Yeah, we're obviously gonna have another meeting, but we could do spend a little bit of time on reserves, I think.

So I don't have a slide uh specifically for that.

We can look at appendix six and our projected reserve balances.

And um, if you have questions about specifics, either contributions, um, the the line items that are labeled as non core requirements and capital projects correspond to the non core requests and capital projects that you've already looked at so the one reserve that always kind of gets me is the future expenditures one page one on page 206 it's up at the top because we we established that when we were lucky enough to be a wash in money when Eagle Creek came online and we needed somewhere to put the funds.

So we set that up.

But when you look at it and you look five years up, we're gonna put 100,000 in into it every year.

And yeah, we don't have any plan to use it for anything.

So I mean, I just throw that out there as uh why.

Um and wouldn't it be better just to leave it all in the casino revenue pot, arguably, for what that's worth.

So anyhow, that's just what one one thought for me is that we're we're budgeting a hundred thousand every year for that.

And admittedly, that may be used by done by surplus this year.

If we endorse Don's plan to use the 223 from surplus.

Do we have any idea what this year's or last year's surplus is, Don?

Are you not anywhere near that yet?

I I very much suspect that we will not have any significant surplus this year.

That's why you told us last year, too.

I believe it was Yeah, it it was under 200,000.

Right.

I I think it will be less this year.

So do we have a you know, to your your point of Bership, do we have an operational definition for future expenses?

Yeah, no, there is the the the reserve fund does have a definition, and it's yeah, I mean it's first fund.

Well, kind of, yeah.

It's I'm sure it's in our in our documents somewhere.

So what and and if I may on that thing, where's our contribution source?

100,000.

Where's that coming from?

Well, this go ahead.

Sorry, that would normally come from taxation.

That is, eh?

Although this year we could argue that maybe it's coming from the 225 that's going to come from surplus.

But it is an annual contribution that we make one way or another, and it should be taxation normally.

Your your worship, if I may, one of the things that this uh reserve would fund is if there was a significant appeal mid year to our assessments.

Right.

And we had to refund taxes.

But arguably our four point seven million dollar surplus could also do that.

Yeah.

Arguably that nebulous fund.

Right so um so, anyhow, that's just an observation from me.

Did any other I mean I think what Don is looking for is whether we we endorse the idea of funding the reserves from the surplus for the 223,000 or whatever it is that was suggested.

So is it funding from surplus or funding from this um park futures expenditure?

Because we if we don't have anything from surplus, then it sounds like this is where it's got to come from.

No, no, no.

In the overall, but can you do you have that slide where you show the the reserves?

So that was the right.

So in 2020 we had 625, and then we really cut it.

And so this year Don has it going back up to 599, but that increase is being funded largely from surplus.

Not completely.

I think there's still a little sliver on taxation.

This is probably the sorry, this might this is probably the the one that compares 2021 to 2022 as it is in front of you right now, which does show the reserve contributions going back to 539,500, which is an increase of 248.

Right.

So 20,000 on taxation and 228.

Exactly.

That's that's exactly right.

Um one of the questions, um so so yes, your worship, um, you know, one of one of my questions that to council is uh, you know, do you wish to draw from surplus to fund those reserve contributions?

The other alternative is to again cut reserve contributions instead.

So I mean that that's an option as well that would have you know the same effect.

We could reduce the reserve contributions, eliminate the draw from surplus, and we'd be exactly at the same place, or something in between, right?

Um if if I may also, your worship, one of the other questions that has uh, to my knowledge, not yet been discussed is that this budget does include um the start of the transition to taxation for the West Shore Parks and REC of a half a percent.

And that plays into this discussion because it it the casino revenue projections, the casino reserve projections are based on not only a half a percent in 2022, but then one percent in 2023 and one and a half percent in 2024.

So if that plan was either to get eliminated or shifted or changed up or down, it would affect those casino reserve projections.

Um I do like actually recall also that the mayor um uh your worship you suggested that perhaps we are being too conservative in our revenue projections for casino and and your crystal ball is a different one than mine.

So fair enough.

Uh so those are the same things.

But of course, none of that's gonna make any difference to the tax increase.

It may not make any difference.

You're right, it doesn't make any difference to the tax increase.

I might suggest that you know, or I might ask, does it make any difference to um how you want to present the purchase of a major fire apparatus for debt?

How how do you wish this budget to present that purchase?

And does the influence of casino revenue projections make a difference to that decision?

Right.

So what I'm saying is the way that the budget sits right now, that that million dollars, $1.1 million dollars is funded by debt.

Yeah.

Do you want us to publish a butt a budget that shows that coming from debt?

Or do you want to fund it from, I mean, last time we funded it from casino revenue.

There's nothing wrong with that.

It's just different than what the budget has today.

So those are some questions that I you know, unless I get different direction from council, we'll be going forward as it is.

And that would cut the projected tax increase for next year somewhat.

And the following years, absolutely, because of about $78,000 in debt service costs for 2023 and future.

And similarly, if you decided to just leave casino revenue to pay for Juan de FUCA.

Yeah.

Yeah, I mean, for me, I mean, I don't know if we want to make those decisions now because I don't honestly, I don't it it doesn't really matter to me a whole lot what next year projected increases are because we're going to deal with that, or whoever is sitting up here is gonna deal with that at that time.

But I I don't know why we would borrow for the fire truck.

I I think we should pay for it, and I think we'll have the money too.

I mean, I think we already have the money too in that fund that I was just talking about.

And there are $280,000 for parking spots.

Well, you can't use that money for that, Ron.

Yeah, so we could reallocate that.

But what Ron is saying is we'll put that, you know, we we keep moving monies around from our reserves, one reserve to another to pay different.

But the bylaw for the parking spots, that money has to be used for active transportation initiatives.

But we can change our bylaw.

Trucks move.

So so on this, is everyone comfortable with Don's the suggestion that we we just fund the 228 from surplus and that'll bring them back up basically to where they were.

But we don't know what surplus is.

I mean, we've just told that we have we don't have anything in res likely to have anything in surplus.

No, we do know that we have a four point seven million dollar.

Oh, that's right.

Okay.

All right.

So yeah, I mean, if we got the 4.7, we can yeah.

So if everyone's good with that, let's do that.

Okay.

And so, Don, can you go back to the the slide that Kim doesn't want us to talk about, the very first one, which shows the overall increases that we're dealing with.

So I mean, I think it's important that we get as far as we can, and then you can go away and so I guess my big stumbling block on this was the wording of it of pandemic relief funding.

When in essence that isn't really what it is.

It's oper it was operational increases for the fire department, which was the extra.

Yeah, anyhow, as Kim says, you need to take this away and get because that extra position existed all of this year, so it should have been fully funded.

The increase for the assistant chief position, at least one of those existed all this year.

So that should have been fully funded.

So that obviously is the stumbling block that you know, and if we can sort that out, I think we're close to having a budget that everybody can agree on.

I know you're looking, but yeah.

Um but beyond that, I don't know how much further we can we I mean we can play with West Shore Parks.

I mean sure that takes off 0.5.

Um we could even say that the election should be paid from surplus that would take off 0.3 um we could take off the 0.2 that are going to come from taxations and so then we've shaved off a whole percent 0.2 the 0.2 increase that's actually going on taxation to the reserves.

Right but we're just kind of playing with numbers to bring it down to an acceptable amount.

It's that 200 000, I think, if we can understand better.

Okay.

Kim's nodding his head so I think partly because he wants to go home.

Always comes into play.

Yeah too.

But but my thinking was that you know we will satisfy you in terms of that 200,000 explanation.

And when when uh director Christensen commented that you know the 200,000 could just as well be part of that last line of expense all other net increases in expenses.