WSPR STAFF REPORT: 2023 Budget and Requisition Request
The primary internal staff report from the WSPR Administrator detailing the society's 2023 budget challenges, including inflation and wage increases.
MUNICIPAL OWNERS
WSPR STAFF REPORT
TO: West Shore Parks & Recreation Society Members FROM: Grant Brown, Administrator DATE: November 1st, 2022 SUBJECT: 2023 Budget and Requisition Request
RECOMMENDATION:
That the West Shore Parks & Recreation Society Members review and approve the West Shore Parks & Recreation Society 2023 budget and requisition request as presented.
BACKGROUND:
On October 13th, 2022, the West Shore Parks & Recreation Society Board of Directors moved THAT THE DRAFT 2023 WSPRS BUDGET BE APPROVED AND PRESENTED TO COUNCIL MEMBERS.
Included in this package you will find the above noted financial information for the West Shore Parks & Recreation Society. The package has been divided into sections to aid in analysis and includes the following: Five-Year Consolidated Financial Plan, Budget Comparisons, Capital Summary, Reserve Continuity, Converted Assessments, Requisition Request and Per Capita Costs, Impact to Taxation, Operating Summary and Fees and Charges.
DISCUSSION:
The West Shore Parks & Recreation Society is projecting a $230,739 surplus for the 2022 fiscal year. This is partly due to better than budgeted performance within the Community Recreation, Sports, and Fitness & Wellness departments. Savings were also realized due to many open regular full-time positions throughout the year, especially in the maintenance department where the recruitment of qualified staff continues to be a struggle. Though regular positions remaining open may lead to financial savings, there is a negative effect on staff and services offered as optimal work output levels are not achieved. When an operating surplus is realized, the funds contribute to the general capital reserve.
The 2023 West Shore Parks & Recreation Society’s requisition request is for $5,816,429 which is a $277,048 or 5.00% increase over the 2022 approved requisition.
The 5.00% requisition increase includes a 3.9% or $217,048 increase for operating and a 1.1% or $60,000 for additional annual general capital reserve contribution as requested by the owners in fall 2021. This minimum annual increase to the general capital fund reserve was implemented in response to the projected depletion of the reserve in future years if the current contribution levels remain unchanged.
The additional general capital reserve fund contribution assists the Society in reaching its goal of obtaining sufficient funding for the maintenance and replacement of existing infrastructure. The transfer to general capital was $237,206 in 2021, increasing to $438,581 in 2022. For 2023, the Society’s proposed increase will bring the annual contribution to $498,581. The $60,000 minimum annual increase with the anticipated $230,739 operating surplus for 2022, has led to projected positive reserve balances until 2027.
A few financial challenges with preparing the budget for 2023:
- In 2022, $209,513 COVID Restart funds were deferred from 2021, which led to a $209,513 opening deficit for 2023. The proposed 2023 budget addresses this.
- Regionally, CUPE is looking for a 14% wage increase over 3 years. The Society’s collective agreement for 2023 includes a 2% wage increase, thus if successful, the Society will be 4-5% behind the region. The 2023 budget secures funds to address this.
- The Society is not immune from the 7-8% inflation that the economy is experiencing, and this is increasing the Society’s costs across all departments.
The proposed 2023 – 2027 financial plan includes the following:
- Non-discretionary increase in expenses $234,816:
- Collective bargaining wage increases - $103,619 for regular staff and $45,438 for auxiliaries
- Utility rate increases - $40,982
- Insurance premium increases - $44,867
- Discretionary increase in expenses $226,363:
- In preparation for the next collective agreement negotiations, a wage contingency has been established. The current agreement expires at the end of 2023.
- New afterschool care team lead positions that require Class 4 driver’s licenses and provide additional administrative support at a value of $30,000. These positions address our recent transportation issues that have resulted in the contracting of bus services as well as remove the need for program staff to be in-program as often.
- A $60,000 increase to the transfer to general capital reserve as requested by the ownership at the fall 2021 owners’ meeting.
- To combat rising inflationary costs, a second fee increase on admissions and programs that will be effective January 1st, 2023 has been included and will be followed by the historical annual fee increase that will be effective September 1st, 2023.
The 2023 capital plan includes the following projects and funding sources:
| West Shore Parks & Recreation Society | 2023 Budget |
|---|---|
| CAPITAL FUNDING | |
| Fitness Equipment Reserve | $ (300,000) |
| Library Capital Reserve | (130,000) |
| Grant, Community and Member Contributions | (929,900) |
| Capital Reserve | (1,362,000) |
| TOTAL FUNDING | $(2,721,900) |
| FITNESS EQUIPMENT | |
| Fitness Equipment | 300,000 |
| MAJOR SITE MAINTENANCE | |
| JDF Electrical Room Upgrade | 30,000 |
| Pool office AHU | 15,000 |
| Pool/Fitness/ Changeroom Roof | 1,000,000 |
| Pool/Filter Pump/Main | 10,000 |
| Pool/Filter Pump/Leisure | 10,000 |
| Golf Carts | 30,000 |
| Q Centre AHU lobby and offices (2 units) | 50,000 |
| Vehicle replacement | 117,000 |
| MAJOR PARKS MAINTENANCE | |
| Pump Station Irrigation | 50,000 |
| Tennis Court Refinishing | 50,000 |
| LIBRARY CAPITAL EXPENDITURES | |
| Flooring replacement | 50,000 |
| Inner auto doors | 10,000 |
| HVAC DDC | 50,000 |
| Card Lock Sytem for Doors | 20,000 |
| NEW INITIATIVES | |
| Skate Park | 929,900 |
| TOTAL CAPITAL EXPENDITURES | $ 2,721,900 |
| NET CAPITAL | 0 |
Skatepark project updates:
- The City of Colwood has approved the development permit and site excavation is anticipated to begin in November.
- The construction expenditure for 2022 is anticipated at $350,000, with the remainder in 2023.
Increase and impact to each municipality:
| REQUISITIONS | 2022 Budget (5.14% Increase) | 2023 Budget (5.00% Increase) | Increase | % Increase |
|---|---|---|---|---|
| Operating | $ (4,945,800) | $ (5,162,848) | $ (217,048) | 3.9% |
| Capital Contribution | (593,581) | (653,581) | (60,000) | 1.1% |
| TOTAL REQUISITIONS | (5,539,381) | (5,816,429) | (277,048) | 5.00% |
| REQUISITION REQUEST | ||||
| Colwood | (1,191,599) | (1,268,583) | (76,983) | 6.46% |
| Highlands | (193,573) | (209,377) | (15,804) | 8.16% |
| Langford | (2,985,575) | (3,137,471) | (151,896) | 5.09% |
| Metchosin | (415,127) | (432,640) | (17,513) | 4.22% |
| View Royal | (753,507) | (768,358) | (14,852) | 1.97% |
| TOTAL | $ (5,539,381) | $ (5,816,429) | $ (277,048) | 5.00% |
As per the West Shore Parks, Recreation and Community Services Agreement, which governs the members’ obligations as participants in the WSPRS, the requisition amounts attributed to each member is proportioned based on their converted assessment values as provided by each members’ financial officer on an annual basis.
FINANCIAL IMPLICATIONS:
The 2023 budget and requisition request of $5,816,429 is an increase of $277,048 or 5.00% over the approved 2022 budget requisition.
Grant Brown, Administrator
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