Special Council

Good afternoon.

Welcome to the special council meeting for the town of View Royal for Tuesday, May 14th, 2024.

Just for uh awareness that we'll go through the special council meeting primarily because of budget that needs to get through, and then we'll go into our normal council the whole meeting.

Um I'll start with a territorial acknowledgement that we recognize the Lakongan speaking people known today as the Esquimalt Nation and Songhees Nation, and that their historic connections to these lands continue to this day.

Uh this afternoon we'll hear from the public who phone uh in, probably on two portions: one on the special council meeting and also on our council the whole meeting and question period portions of the agenda.

Uh if you wish to provide comments by telephone, call 778-402-9227 and when prompted, enter conference ID 807-860-703 pound.

You'll be immediately muted once admitted to the meeting.

Please do not unmute yourself until you are asked.

At the appropriate time in the agenda will then announce the last four digits of your phone number.

Ask you to mute the live webcast to avoid any feedback.

Ask you not to use your speakerphone to ensure sound quality and finally I'll ask you to unmute yourself by pressing star six.

To begin please indicate your name and address for the record speakers will have five minutes each to speak during the public participation and two minutes to ask a question or questions during question period and you will be timed.

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

For council today we have uh for this afternoon's portion Councillor Rogers online.

Uh Councillor Kowalewich cannot be with us and I believe um Councillor Mattson will be uh coming in uh this evening remotely um may I have a motion to approve the special council meeting uh agenda please second all those in favor?

Any opposed?

Seeing none opposed, motion carries.

And can I get a motion to adopt the minutes?

Uh I'll be brief and I'll just thank Staff and Don for getting all this work together for us for the consolidated uh financial statements and audit results.

Well, we have no minutes to adopt, so we do not need a motion for it.

Mayor's report.

Um and uh thank you very much again for your hard work.

Um that will bring us to our first public participation period.

Donna, uh, you're the only one in the room, so either you say something or we go to online.

Thank you.

Uh Carl, we got anybody online?

Mayor Tobias, we have no callers so far this evening.

Thank you.

Um, so I think we can move right down to staff reports, Don.

I think I forgot to uh just one second.

Sorry about that.

You have to click first.

All right, here we go.

So thank you very much, Mayor and Council, for uh agreeing to uh humor us with a special council meeting.

Today is May 14.

Financial statements uh are due at the province tomorrow.

So that is why we needed to have this happen today.

So thank you for your time.

Uh online we have Corey Vanderhorst of MNP with us, who is our auditor, and he has staff that supports him just like I have staff that support me.

And I want to very much recognize the contribution of the finance team and Corey's team as well.

Uh doing an audit and year-end financials is a huge piece of work.

It is hours and hours that culminates in these financial statements, which are absolutely critical and required, even though they are not necessarily have a wide readership.

Both compared to our prior year, 2022, and in in comparison with some of our neighbors as well.

So attached to the staff report are two attachments.

One is, of course, the draft 2023 Consolidated Financial Statements, as well as the 2023 Audit Findings Report.

And Corey will be presenting his findings report to you right after my presentation.

Okay.

So we prepare financial statements in keeping with the community charter, and it is in accordance with public sector accounting standards.

We don't make up the rules, we follow them, right?

These statements are audited, of course, by MNP, who is our council-appointed audit firm.

And legislation does require that the financial statements are presented publicly for council for your review and acceptance, and a resolution to that effect will be requested after we're done our presentation.

And then, of course, we submit to the ministry.

It is also going to be available on our website as all of our past financial statements have been.

So I'm going to go through them through the financial statements.

And please go ahead and stop me if you have any questions as we go through.

It is really important to understand you know the role of each participant in the financial statement reporting process.

Management, of course, is responsible for preparing the statements in according with accordance with accounting standards.

The auditor provides independent examination on the statements and evaluates the systems of internal controls and then expresses an opinion on whether or not the financial statements fairly represent the actual financial position of the town.

That's key.

Mayor and council has a role as well, and that is responsible for oversight of management.

You also have the opportunity to meet with the auditor at any time during the year or at any meeting you can request to have to meet with the auditor in camera to discuss any matter of concern.

It is important, I think, that mayor and council understand that the auditor works for you, not for our CAO and not for me.

Okay.

So we're going to go through the statements.

First, we're going to start with statement A, and you'll think of this as a balance sheet.

It's called the statement of financial position, and it is a snapshot in time at December 31st, a specific date and time.

It includes non financial assets, which are those physical assets.

You can think of them as tangible capital assets like buildings and roads and sewer pipes and pump stations.

And those are shown separately on municipal financial statements to highlight our financial positions separate from physical asset position in regards to tangible capital assets.

The change in accumulated surplus is explained by the following statements, notes, and schedules.

So it all has to be read as a package, not as any one isolated statement.

So financial assets, we're going to talk about those first, is they represent future economic benefits that are owned by or owed to View Royal.

These increased to about $12 million from 2022 to 2023.

That seems like a large number, and we're going to learn as we go through how what that's what where did that come from?

That's that seems that is higher than we have seen in some prior years.

So we're going to talk about that a little bit.

The um do note that the cash and cash equivalents of 49 million.

Note three will explain more in detail that nearly 27 million of that is restricted.

And by restricted, we mean set aside for a specific purpose.

These are our reserves, these are our DCCs, right?

So this is cash that has some sort of restriction on it.

It's not free money to spend on just anything.

Financial liabilities, then, are those items representing future economic benefits that are owed to other outside entities.

These increased about $4 million.

Mostly these are deferred revenue, as in DCCs.

So those are all related.

Net financial assets then is the difference between the financial assets and the financial and the and liabilities.

And these increased about $8 million.

Again, you know, that that is, you know, it's kind of all uh built in.

It's uh the increase, of course, in net financial assets is because the financial assets uh increase was more than the increase in financial liabilities.

Okay, so we're we're gonna see more of that as we go through.

Now you're gonna see several of these charts as we go through.

Um I I know it's probably a little bit hard to read here in council chambers, but I'm hoping the viewers at home, if there are any, can see them a little bit more clearly.

It's just a little bit of a trend analysis, comparing both year over year for View Royal and against all other capital region municipalities.

These are using the provincial statistics for local governments.

You'll see that the blue bars represent View Royal's results.

So you can just kind of follow the blue bars.

Is it going up?

Is it going down?

Um, is it going, you know, is it a lot up or a little bit or down?

So forth.

The the lines on the graph, the dark purple line at the bottom represents the minimum of all of the other municipalities in the capital regional district.

And the median is the yellow orange ish line.

And the maximum is the top blue line that you see there.

So it just kind of takes all of them and helps us understand where View Royal lands in terms of are we the lowest, the highest, or kind of middle of the pack?

So that's how to read all of these.

They all look very similar and they represent different things.

This particular slide has two sustainability ratios.

We call it sustainability because it represents the degree to which a government can maintain its existing financial obligations without increasing either debt or the tax burden relative to the economy.

So really what we mean by that is are we able to pay our bills as they come due?

Do we have the resources to meet our obligations?

And indeed, what we see on the left is that for assets to liabilities, so this is the ratio of what we have as assets compared to our liabilities.

And for every dollar of liability, we have $7.34 in assets.

That's pretty strong.

However, this does include tangible capital assets, which you're not gonna sell exactly to pay your bills.

So what we do is uh look at the chart on the right that is our financial assets to liabilities.

So this is more like cash in the bank compared to what we owe.

And we find that for in 2023, we have about two dollars of assets for every dollar of liability.

So that's a very strong position yet.

We will be paying our bills as they come due, I'm happy to report.

So then we'll go to non-financial assets, and these, of course, are the tangible capital assets, the buildings and infrastructure, vehicles, equipment that we use to deliver the services to View Royal residents and visitors.

Total non-financial assets decreased about $600,000 in 2023.

And and I would say, just generally speaking, whenever your non-financial asset total, this is your net book value, it it is an indicator that we are not replacing our assets faster than they're amortizing.

So that's that's kind of how to how to think of that.

Now accumulated surplus, the bottom line on the statement of financial position is a big number, 150 million.

It increased 7.4 million from seven from 2022.

7.4 million is also a larger number than we have seen.

And as we go through my presentation today, we're going to talk about that number again.

It's going to be, you're going to see it again.

So statement B helps explain it.

And then we're going to be looking at note 10 in the notes that will break this number down for you in detail.

Any questions so far?

We're doing good?

Still awake?

Thank you.

Awesome.

So then let's look at some flexibility ratios.

What we mean by flexibility ratio is the degree to which a government can change its debt or tax burden on the economy within it with it within which it operates to meet existing financial obligations.

So so basically, do we have the ability to cover some emergency without having to borrow?

Right?

So that that's kind of how I think of that.

Or perhaps if there was a significant drop in some sort of revenue, how long could we sustain what we're doing without having to raise taxes?

So the left chart compares accumulated surplus to taxes.

And we've talked about surplus before with this council, so that that won't be an unfamiliar term to you.

And the trend indicates that accumulated surplus is decreasing relative to taxation.

So it and council is aware.

We've talked about the use of accumulated surplus, which isn't a terrible thing, but this is this is some of that, right?

It's not decreasing sharply, I'm I'm glad to see.

So this is just one of those let's be aware.

On the right side, though, is the operating surpluses to taxes.

So the so remember, accumulated surplus doesn't count all of our tangible capital assets, which again are not really something that we can use to spend.

But uh on so you know, so we do look more closely at operating surplus to taxes, which is the right hand chart.

It takes out the tangible capital a can tangible capital assets and the reserve funds.

It it keeps casino revenue in there, and it shows that for every one dollar of taxes we ended in 2023 with a dollar thirty in relatively available resources so that again is a strong position and you can see that the you know across uh time uh you know view royal the blue bars there are are fairly flat so that's that's a good I think a good indicator and we are above the median for other compared to other uh CRD municipalities uh I meant to mention that the reason why you see the line indicators on these charts ending in 2022 is because all the municipalities' information is due tomorrow and it wasn't available to me.

So you'll see that again next year.

So I've just got View Royals in there.

So next we look at the consolidated statement of operations, which is statement B.

You'll you'll recognize it as something akin to an income statement that shows revenue and expense and the total annual surplus or deficit.

So you will see the same number on this statement, a bottom line of 150 million accumulated surplus.

So we're gonna go through that.

So view rules revenue is consolidated with West Shore Parks and Recreation and includes the value of the assets that are contributed by developers and DCCs.

Now in 2023, we didn't have any assets contributed by developers, but by comparison, we did in 2022.

Total revenue is up from 2022 nearly 13 million.

That's considerable, primarily due to an increase in investment income.

So you're going to hear that a couple of times, you're going to see that a couple of times, but more significantly in government grants and transfers.

You will recall 4.6 million growing communities fund.

That was something that we hadn't seen before.

We received it in 2023 and we didn't spend it all in 2023.

Instead, per the conditions with the grant, we put it into a reserve.

So when that happens, you receive it as revenue, but you didn't spend it, so it there isn't an equal, you know, outflow, outgo uh expense.

So that that's that's what has had a significant influence in our revenue number being quite a bit you know higher than it was in 2022.

The other thing that you'll notice in 2022 if you're looking closely, is that there was a five nearly $5.5 million dollar loss in 2022, but that was um uh rel related to the parkland that was transferred to the CRD.

So it wasn't a cash loss, I would say.

It was we transferred it and booked the loss of of the asset compared to uh when we first uh uh received the asset and the value was recorded as as a loss so that also uh notes a difference um in revenue between 2022 and 2023 significantly our um user charges sales of service is another significant source of revenue for view royal it's about five million dollars and uh that uh is is uh one of the one of it was a little bit of an increase.

Um, you know, so so for our revenue, uh, while there was an increase, I would, you know, other than the anomalies being the government grants and transfers, really, the most significant one in my book is the investment income.

So expenses are shown against budget and against prior year, and we do look at these very closely.

And it remember it does include our share of West Shore Parks and Rec revenue and expense as well.

So total expense in 2023 is about one and a half or 1.4 million dollars more than in 2022.

But each line uh for each of the functions, general government, protective services, and so on, is under budget for all except for recreation and culture, but that includes a loss of proportionate share in West Shore Parks and Rec that we book as an expense.

So if it wasn't for that, then uh West then the parks and recreation recreation and culture services would have been under budget by about $150,000.

So I have no concerns.

It is something that we look at closely, is bottom line.

We make a budget.

Did we actually achieve that?

And the answer is a solid yes.

So then we look at the annual surplus and deficit.

Of course, the annual surplus and deficit, as you know, is the difference between the revenue and the expense.

What did we have left?

That would be a surplus.

What did we fall short by?

That would be a deficit.

And in this year, in 2023, we are reporting a $7.4 million dollar surplus, which again, that's the same number that you saw on statement A as the difference between the accumulated surplus last year to this.

And we're going to look closely at this again.

I do want to point out that if you look at the column labeled financial plan, you will see an annual surplus was planned for of nearly $5 million.

Well, that seems odd since we have a balanced budget, right?

Well, of course, accounting standards are a little bit different than budget, but what you can think of this as is we knew when we made the budget that we were going to get $4.6 million from the government.

We also knew that we weren't going to spend it.

We were going to put it in reserves.

Well, reserves is a part of surplus.

So of the $7.4 million that we experienced as a real surplus in 2023, we planned on $5 million of that.

And we did exactly what we said we were going to do.

We got it.

Okay.

Couple more flexibility ratios for you.

On the left side is the extent to which financial assets could support a loss of any kind of revenue.

Okay, so that's net financial assets to total revenue.

And in 2023, it's just a little bit higher than it was in 2022.

It's about a dollar for every dollar in financial assets for every dollar of revenue.

So that's that's a fair, a fair measure that just says basically you have the financial assets.

If you if you lost a little bit of revenue, you have financial assets that would help to support the loss of that.

And on the right side is a very similar ratio.

It's the extent to which financial assets could support a loss of tax revenue.

So it isolates tax revenue and says, all right, how much, how long could we last if we had to, you know, if there was a significant change in our tax revenue?

And indeed, there's about two and a half dollars for every one dollar of taxes.

And both are relatively close, at least in 2022, to the median.

Couple more ratios for you.

Own source revenue to taxes.

So own source revenue are those uh is is revenue other than taxation, such as user fees, sales of services.

We provide services for fire protection to our surrounding First Nations.

So it's that, it's penalties, it's penalties and fines and any kind of other uh revenue compared to the taxation.

So how much of our revenue is coming from own source services like that, and how much is taxation?

And again, you can see that in 2023 we're really close to the median um uh across our history.

Public debt charges to revenue, the right hand chart there, View Royal has a very low um debt structure, about 0.8 of a percent of total revenue is required for debt interest payments.

So it's very, very low.

We have uh a large unused debt capacity.

If we needed to borrow, we could.

I do have a a question, if you'll entertain it, Don.

What are the big ticket items right now that uh that we're kind of servicing?

Would that still be the fire hall and maybe the um bridge over the gorge, or what are the what are we servicing right now?

For debt.

Yeah.

All of the debt is related to the public safety building, the land and the building itself.

Yes.

Okay, thank you.

Yeah.

So next we're going to look at statement C, which is the consolidated statement of change in net financial assets.

So it looks at excuse me, it looks at what changes uh happened between 2022 and 2023 just in regards to our net financial assets, that top part of the first statement that we looked at.

We take the surplus uh in from 2023 of 7.4 million, and we take out all the things that affect equity, anything to do with our tangible capital assets, to isolate the effect for net financial assets.

And the the net result is that net financial assets increased nearly $8 million.

And that makes sense because we know that more than half of that is the result of cash from that growing communities fund infusion of 4.6 million, right?

So that kind of makes sense that it's a little bit higher.

Uh, you know, it's almost double that of what it was last year.

So it kind of makes sense in that context.

So we'll look at statement D, which focuses more on cash flows and and uh the result uh at the end of the year for our uh cash flows.

We look at uh the cash.

Oh, I need to go back.

We look at the cash position, and it's influenced, of course, by things like changes in receivables, in payables, in deferred revenue, and other balance sheet items.

And uh statement D accounts for all of these changes and eliminates any non cash items so that we can isolate the effect of cash.

And regular what we find is that regular operations accounted for nearly 15 million of the change in cash.

$3 million then was spent on capital acquisitions, and three uh $300,000, just a little more than $300,000 was spent on reducing the debt.

So the result at the end of the day was an increase of cash and cash equivalents of nearly $12 million.

These funds, of course, are held in an interest bearing bank accounts or in MFA investments.

And I'll just remind you that of the total $49 million that we have at just we had December 31st, it does include all of the reserve funds, all of the accounts, any deposits from developers that are refundable.

So it's not all of that money is ours, and any unspent DCCs.

If you remember this presentation from last year, I love the notes.

If you look at nothing else, because everything else is numbers, numbers don't tell the story like the notes do.

We love the notes.

And if you don't want to read all of the notes, I encourage you to at least read note 10.

And we're going to talk about that in a few minutes.

But notes are very important because they do tell the story.

They tell you what happened throughout the year, and they provide additional detailed breakdown that helps you understand those bigger numbers.

Note 10.

This one we're going to spend just a few more minutes on.

Note 10.

I want you to draw your attention right to the bottom of this slide where it says the difference is that 7.4 million.

We've seen that number right at the top of the presentation.

This is the difference between accumulated surplus last year to this.

It's also the net result of operating on statement B.

So this is our surplus.

So this note you'll see the bottom of the column 2023, 150 million.

That's our accumulated surplus.

This is what makes up that accumulated surplus.

So if anybody asks you how much we have in a particular reserve or in casino revenue, this is where you go.

This is the note that tells you all of that.

At the top, equity and tangible capital assets, which of course is not cash.

That's what we have in sewer pipes in the ground and in buildings and in vehicles, right?

This will change as we acquire or dispose of assets, as we record amortization and as we pay off debt or incur new debt.

So that there is a slight decress, decrease, which again would be indicative to me that we are just barely or not quite keeping up with our uh assets in terms of replacing them as fast as we're being amortized.

Casino revenue is the next one, and it increased by $145,000, which in this context really isn't a lot of money.

What that should tell you is that we're spending it almost as fast as we get it.

Which is there's nothing wrong with that.

That's what it's for, I suppose.

But uh I I will refer you to the financial plan, which has a five year forward forecast of where that where that is gonna happen, you know, where that money is gonna go, predicated on on the continuance of casino revenue.

So I I do keep a close eye on that for sure.

We did receive, we predicted two million dollars in casino revenue, and we received 1.96.

So pretty close.

So I'm I was really happy about that.

And we used 1.8 million or just over.

Community works fund, the the gas tax um has its own note uh as note 11 that tells you a little bit more about what was received and what was spent.

It did increase about $400,000 as uh, but we received uh just over half a million dollars and we spent a million dollars on projects, uh, and we also earned interest.

The interest is retained in the community works fund as well for the purposes according to the grant.

Unrestricted surplus.

We're going to pause on this number for just a little bit as it went from about uh nearly six million to seven million.

So the increase in unrestricted accumulated surplus increased 1.1 or nearly 1.2.

This is kind of the unrestricted part of surplus that we rely on to pay our bills as we go without dipping into other funds, right?

This is how we we pay our bills before we get to June or July two tax due date.

Um this is what we rely on if we got a huge uh tax uh BC assessment supplementary assessment that was the wrong direction, and they're never the the right direction, uh the good direction, right, for View Royal.

So it did it did increase by 1 million, and you you might think, well, that's an awful lot to miss by.

But when you consider what's happened with interest rates, I do I I I would argue that almost all of this as a result of unanticipated interest earnings.

So that's actually a good thing.

It does include the component that West Shore Parks and Rec contributed to a surplus as well.

They did have a little bit of a surplus, less than $100,000.

And it is it is important to keep an eye on this number and just be aware be aware of it.

This is why I did suspect that we were going to be in this neighborhood, you know, kind of later on in the budget process.

And this is why I wasn't too worried about the fact that we were going to be using some surplus to help uh support the tax rate.

So the rest of the note there, the bottom half of it uh talks about all of the other reserves, and there are bylaws for all of these reserves.

So they are restricted, right?

In the sense that we we um have to plan for their use and they need to be used.

These monies are used for specific purposes set out by bylaw.

Most of the reserves did increase.

Uh, community amenity contributions increased.

Of course, you see the growing communities reserve there of 4.9 by the time we added interest to it, and we are required to attribute it interest specifically to that reserve.

Uh, the reserves that decreased were the machinery and equipment reserve and the sewer system reserve.

That's because DCCs are a deferred revenue.

You might be missing DCCs from this list.

They're accounted for just slightly differently, and you can see details about DCCs in note six.

Schedules one and two are very much like your income statement.

The difference is that on statement B, our statement of operations, the expense side of it is by General Government Services Protective Services, and so on.

Whereas Schedule One puts those functions across the in the column headers and describes the expenses by what did we spend it on?

So you'll see labor and benefits separated out there, the goods and services, amortization, and so on.

So you get a little bit of a different view of your revenue and expense, a little bit more details, and as well then compares it to Schedule 2, which is the prior year.

So you can kind of look back and forth to see what changed from one year to the next.

And of course, we include budget at that same level of detail.

Sure.

Is there an ability to check an RE report like for Essex, for example, at any given time?

I just know when I work for the C or D in my department, we were able to do it on an RE just for our department.

Is that a possibility or not?

I I'm I'm I'm missing you want to look for which for Well just say at the end of any end of March, just throw that month out.

And we wanted to see where we were standing in our R and E at that point.

Oh I could ask, you could ask you, right?

Certainly.

Yeah.

That is our budget variance dashboard that we have on our website and it's updated weekly.

There will be a little bit of a lag between you know when invoices are received and posted and that sort of thing, and payroll is is actually run.

But certainly um the dashboard on the website will give you an idea of our operating expenses and revenues and where we are at at any given point in time, and there's history back for five years.

Staff only, or is or is it public have access to that?

They wouldn't.

It's on our public website.

Really?

Okay.

Absolutely.

Okay, good, thanks.

The last schedule is the schedule of tangible capital assets, and and you will see the um type of assets across the top.

And I realize it's very small print on on this particular screen, but on paper form uh and um hopefully for the viewers at home, you can see a little bit there.

What you're looking at there is that um we do have our cost value for our assets is a hundred and eighty million.

I do want to remind council that this does not directly relate to our asset management plan or the asset management strategy.

This is what the assets cost when we bought them.

This is not what it will cost to replace them.

Think about, you know, for this building, for example, I can't tell you just off the top of my head, how much this building cost when we built it, but that was several years ago.

And I suspect it's going to be a lot more when we go to replace it at some point in the future, right?

So I just want to keep this schedule in context with what we mean by cost when we're relating to tangible capital assets on the financial statements.

So we look specifically at tangible capital assets net book value, which is what is left of the cost value after we subtract amortization, and we look to see how much of our assets remain unamortized.

And in 2023, that was about 68%.

So that still is indicative that View Royal is relatively young.

That's a that's a positive thing.

It means we have time, as we've talked about when we talked about the asset management plan and strategy.

But I don't like the direction that these blue bars are indicating on this particular slide because it's going down.

It means that our assets are amortizing more quickly than we are replacing them.

That's what this slide tells you.

And we we know that, and that is why I'm very pleased that council chose to support the asset management strategy in this year's budget and put money aside to help support the replacement of the assets in the future.

So that that is encouraging.

Government transfers to total revenue is an indicator, and you'll see a sharp spike on the right blue bar of that right-hand chart, and that is the growing communities fund.

So what this what this slide shows you is compares it isolates out how much money do we get from the federal government, provincial government primarily.

And how does that compare to our total revenue?

How much of our total revenue is coming from gifts?

And up until 2022, it was, I would say, a small part of our revenue.

And in 2023, it's a bigger part of our revenue.

And that's to be expected given the growing communities fund.

And I would expect that by comparison next year's chart.

When you see this chart, you're going to see all of the other municipalities have a similar spike.

So we're we're in good company there, and we have put that in a reserve, and we are making plans to spend that money appropriately as we go forward according to the conditions of that grant.

So I'm gonna pause there for any questions about my presentation before I turn it over to our auditor, Corey Vanderhorst.

Thank you for waiting through my presentation, Corey.

And he will he has a much shorter presentation about his audit findings and his audit, I'm happy to say.

Thanks, Don.

Go ahead, Don.

There's a line item there for people that prepay their or prepay their taxes on a monthly or weekly basis.

And uh did they gather interest on that or or not?

Indeed, they do.

Yes, yes.

We do have a bylaw that um determines how much interest is, and it does float as the interest rate goes.

So um, yes, the uh uh it's not stellar.

I wouldn't use it as an investment, but certainly we are very happy when people prepay their taxes.

Basically, the it starts in August and ends in June, and you have 10 months to uh put away a monthly payment on your property taxes, and it makes it a lot simpler in on July 2 when you have to pay, and you just pay if there's any a little bit if there's any difference, because we don't know exactly how much your property taxes are going to be um in it that far in advance, but there may be either a little credit or a little amount owning when you get to July 2, and it's it's a very helpful tool, I think, for most people.

Well, I'm glad you got to the story bit.

Thank you.

Um, to the point of um property taxes, and you know, might have been reflected there.

I'm wondering how much deferred taxes, because many, many people defer their taxes, how how how that oper that affects our operations.

I would say that it affects our operations in a very positive way, because the fact that that program is offered means that the province is paying our taxpayers' taxes on their behalf.

So rather than seeing, let's say a pensioner on a fixed income struggle to pay their taxes, it'll the province pays their taxes for them.

We get the money when it's due on July 2.

And yet the homeowner isn't suffering by having to come up with that money until the home is is sold.

So I would say it's a very positive program.

I don't have the dollar amount for how much that represents, but I believe it's about 250 of our of our constituents use that program.

So it's not a high number.

I believe it.

That and I'm I'm glad that the money shows up on time here.

So thank you.

Hi Don, I've got uh two questions.

If there are no others, I think I'll go to John after I have uh a couple here.

Uh one is uh for our amortization for assets, does that include big things like the six-mile bridge or um is that part of it?

I know there's a uh shared ownership potentially there.

And if you don't know right off the top of your head, that's okay.

In fact, it was interesting.

Uh, bridges came up in our discussion uh with the manager of accounting myself this morning about in relation to insurance.

And there you're right, there are some bridges that are shared ownership, the Craigflower Bridge being one of them as well.

So yeah, um certainly tangible all tangible capital assets um according to uh accounting uh standards are gonna be included in in that number.

Great.

And my next question was for our cycle for auditors is it a two-year contract, a three-year contract?

Do we go year by year?

I'm just curious about uh how how we go about that because obviously we want some consistency but we don't want lock in either we offered the audit contract up I believe it was Corey may correct me here I believe it was 2018.

So it has been about five years.

We typically do a longer term being you know, three to five years contract just because of the cost, not in terms of real dollars, as much as staff time and effort to understand make the switch.

There's a lot of synergies to be found by having the same auditor from one year to the other.

They don't have to learn what you are all about and how you do things and your system of internal controls, for example.

So uh we don't have any specific plans at this moment to go to RFP.

Uh we we do go year to year, um, but it is something that that uh is under consideration.

And certainly our purchasing policy would allow for uh, you know, continuing on the basis that that there are some savings to be realized um by sticking with the same um auditor.

Perfect.

Thank you.

If there's no other questions, I'll go to Councillor Rogers.

Counselor Rogers, please.

Yes.

Thank you for the um uh presentation.

Thank you very much.

Um Don, I'd like to go to um uh the part you don't like, page 26, the one before.

Yes, the uh the one on the left.

Um the um the fact that the um the bar is on a downward trend, uh which you don't like, uh we are making a contribution, or did we did in this uh fiscal year?

But the contribution that we did make, um, how much has that uh been to um if we saw that on the screen, uh would uh stop the um decline or does it so I think um if if I'm understanding the question correct uh you you you are right this chart does not reflect the amount of dollars we've put into reserve dedicated to future asset replacement so that your your point is is is true that this chart does not reflect that what would it look like if it did well it's I'm I'm not I'd have to think about how to how to reflect that because you know the the contributions in reserves are meant to fund future assets and this of course is a look back.

Um if I could over overlay this with our capital reserves, then maybe that's something that I can I can look and see what you know what that would look like for a future.

Yeah, I guess it's um it's a long term viability as um uh while we're relatively young as the pro uh as a municipality, um we still uh have assets that are uh going to be needing replacement and we have to uh um and I think that's the whole initiative is that we start contributing and and planning for that future.

Um and so yes, we've done that for 2024, and and how much and you know, would we have to anticipate uh the taxpayers being aware and contributing to make sure that uh we stop this downward trend and can plateau and start climbing it up.

Is that a one, two percent increase every year?

You know, certainly we, you know, we can talk about this for sure uh uh again as we do at budget time.

This, of course, uh, you know, the only thing that's gonna drive the blue bars up in this chart is the actual implementation of new capital assets.

That's that's what's gonna kind of drive this up.

Um so as we as and and those projects, you know, kind of like this significant ones are are discrete, right?

As we as we add in, for example, you know, the six mile roundabout, that's gonna spike this one up.

It'll be interesting to see what what um you know this chart will look like next year once we've made some significant investments on the ground in capital assets as we go forward.

Yeah.

Uh your other comment and um is um with respect to casino we're and I think you said uh we're spending it as fast as we're getting it.

Um and and I think one of your cautions um that we've and we've actually have it as policy is to start um slowly uh putting the um parts and rack onto um uh taxpayers opposed to uh uh relying a hundred percent on casino um would that help alleviate this um this problem of spending as fast as we're getting a question.

Certainly uh it it it is my recommendation that at some point in time um and and certainly we have scheduled in the current financial plan for that to start in 2026 to wean ourselves off of casino revenue for the purposes of supporting a significant operational cost being West Shore Parks and Rec.

And if we were to take that the the money instead of spending casino revenue on West Shore Parks and Rec, if we invested it instead in of into assets and supporting our asset management plan, we would see uh a a change in this as well.

I think that is something it's a good goal to work towards.

Yes, thank you.

I agree.

Thank you, Councillor Rogers.

If there's no other questions, I think that's audit time, probably.

Thank you, Corey.

Over to you.

Thank you, Don.

Hello to the Mayor and Council.

Thank you for inviting me here today.

I'm just gonna switch over my.

Great.

Thank you.

So uh thank you, Don, and before I uh get going, a big thank you to Don and Steven and DAF throughout the town for going through the audit process with us.

We really do appreciate all their assistance and the audit goes very smoothly from our perspective.

As Don said, I have a short presentation, talk about the audit findings and results, and then I would be happy to uh answer some questions at the end.

So uh diving in, um we are providing what we call an unqualified audit opinion, so a clean audit opinion.

Now we are satisfied the financial statements that Don just went through are presented fairly in all material respects, um, in accordance with Canadian public sector accounting standards.

Ready to sign the report.

Uh uh after Mayor and Council approves the financial statements, I've got an audit report ready to send to Don.

We have all the last few steps wrapped up this morning of the audit.

Um and this was also mentioned by Don earlier, but uh just a refresher that when we're going through the audit process, we start by looking at the controls uh in place at the town, make sure you're getting accurate financial reporting.

Are they designed appropriately, implemented to safeguard cash and other assets to get you that accurate financial reporting?

Are they operating effectively throughout the entire year?

We don't specifically test um effectiveness.

But we look specifically at how they're designed and are they implemented properly.

And then we look at the year imbalances and we sample those transactions throughout the year to form our audit opinion.

Okay, we don't look at everything.

To drive our audit testing and to do our work, one of the most important numbers is this materiality and this concept of materiality in the audit.

Uh so we've used the number of $1.1 million dollars for 2023.

That's around 5% of what we call your normalized annual revenue.

And when I say normalize, we would take things like the growing community fund that doesn't uh you don't receive every year and take that out of our calculation and try and get to sort of what's what's the regular uh activity level.

So we look at everything that's above that $1.1 million dollar mark.

That's uh any large capital projects and grants, and then below that dollar amount, we sample transactions.

If we found anything that we disagreed with management on, I couldn't give you a clean audit opinion if those errors or those differences and disagreements were either an individual item of over $1.1 million, or if there were several items that added up to over that amount of $1.1 million, that wouldn't be able to give you a clean audit opinion.

But happy to say there aren't any of those items to report.

Uh, and we're very happy with uh a clean audit opinion this year.

There was no limitations placed on the performance of our audit.

Uh, your staff has everything dialed in in terms of their audit preparations and getting things ready for us and and drafting the financial statements for you.

No significant unadjusted amounts to bring to council's attention.

We didn't find any irregularities or unusual related party transactions.

We're not specifically looking for fraud.

Our our job on the financial statement audit side is to make sure the numbers on the page are accurate.

But if something came to our attention, I am required to report it out to council.

And if that happens, we always would ask for an in-camera meeting, of course.

But I have nothing to bring to council's attention here tonight.

So that's a good news item.

Uh another comment there that the there the town does not have an internal auditor or internal audit function.

Uh it may have checks and balances of internal control, but no specific internal audit function as a discrete uh you know activity or something where that we, as your external auditor, would be able to rely on it.

Um and we are required to review your annual report when it's available before it gets filed to make sure the financial statements are accurately reproduced.

So we always get a draft copy of that, have a look through and make sure that all the pages are there and and and nothing's been missed.

Again, a big thank you to uh Dawn and Stephen and staff throughout the town.

Uh and I'll I'll wrap by uh confirming our independence.

So we didn't do any other projects with the town that would impair my ability to give you an independent audit opinion.

You know, that's no consulting projects or or other things during uh 2023 and all the way up to today.

So thank you very much.

It did promise a short presentation.

Uh I will turn the sharing off.

I would be happy to answer any questions about the audit result, the audit process uh or the audit report.

Thank you, Corey.

Any questions for the auditor?

Squinting to see if Councilor Rogers has his hand up, but I can't see whether it does or not.

Uh I think there's no questions, Corey, so thank you very much.

Great.

Thank you very much, Mr.

Mayor.

Cheers.

Don, does that uh complete everything?

But we've got a uh um a recommendation that we have to consider so that council accept the 2023 audited consolidated financial statements.

Um further questions or discussions?

Okay, uh moved by councillor Brown, seconded by counselor Lemon, because your finger was on the button.

Um all those in favor?

Any opposed?

Seeing none opposed, motion carries unanimously.

Um thank you, Don.

And I think that brings us down tax to bylaws.

Um agenda item 10, tax rates by law uh 1133 2024.

Um, and that's the bylaw uh levy rates municipal uh regional district regional hospital uh district uh purposes for the year 2024.

John, did you want to speak to that?

We already have okay.

Uh any further questions for Don on it.

My computer moves very, very slowly.

Um so uh can I get a motion to adopt uh bylaw one one three three moved by councilor uh lemon, seconded by councillor Brown, all those in favor?

Any opposed?

Seeing none opposed motion carries.

Uh and I think that brings us to question period.

And I don't think Donna has any questions in the room.

Carl, we got anybody with questions on the phone.

Mayor Tobias, we have no callers.

Thank you, Carl.

So can I get a move to terminate?

And we'll take a slight pause, potentially a bio break.

And so we can advance into the next council of the whole meeting.

Can I get a motion to terminate, please?

So moved.

Moved by Councillor McKenzie, seconded by Councilor Lemon.

All those in favor?

Any opposed?

I think Councilor Rogers, you just stay tuned.

It'll just take a second to get uh swapped over, and then we can uh start the council of the whole