Council Report - GROWING COMMUNITIES FUND RESERVE ESTABLISHMENT

GROWING COMMUNITIES FUND RESERVE ESTABLISHMENT

RECOMMENDATION:

THAT the report dated March 20, 2023, from the Director of Finance titled “Growing Communities Fund Reserve Establishment” be received;

AND THAT Council give “Growing Communities Fund Reserve Bylaw No. 1116, 2023” three readings.

PURPOSE:

To introduce a reserve establishment bylaw as required by the Province of British Columbia for purposes of the Growing Communities Fund program and to propose corresponding amendments to Reserves and Surplus Policy (#1600-020).

TIME CRITICAL:

The province has committed to disbursing funds under the Growing Communities Fund program by March 31, 2023. The program requires a distinct reserve fund to be established for the purpose of administering these funds.

EXECUTIVE SUMMARY:

The Ministry of Municipal Affairs has awarded nearly $4.7 million to View Royal under the Growing Communities Fund (GCF) program to build the infrastructure and amenities associated with increasing the local housing supply. The program requires the funds to be placed in a segregated reserve fund established by bylaw under section 188 of the Community Charter for the purposes of the GCF. Attached to this report is a draft bylaw to establish the required reserve and proposed corresponding amendments to the Reserves and Surplus Policy (#1600-020) that, if approved, would satisfy this condition.

BACKGROUND:

On March 17, 2023, View Royal received a letter (attached) from the Ministry of Municipal Affairs announcing the award of a $4,665,000 one-time grant to the Town under the Growing Communities Fund (GCF) program. The GCF is limited to one-off costs needed to build required infrastructure and amenities that are incremental to currently planned investments. The funding is conditional on the Town establishing a segregated reserve fund by bylaw under section 188 of the Community Charter for the purposes of the GCF. Section 189(1) of the Community Charter requires earned interest to be tracked and allocated to the reserve and may only be used for eligible purposes related to the GCF program.

View Royal uses segregated reserve funds established for different purposes to facilitate administration and reporting of the funds, as set out by section 188 of the Community Charter. Council has approved a Reserves and Surplus Policy (#1600-020 attached) that provides guidance on the administration of these funds. When new reserve funds are established, the policy should be amended to reflect the addition of the new reserve.

Council may establish a new reserve fund by adopting a bylaw that describes the purpose and appropriate uses of the fund. A corresponding amendment to the Reserves and Surplus Policy assists staff in administering these funds.

DISCUSSION:

The attached draft Growing Communities Reserve Fund Bylaw No. 1116, 2023, if adopted, will establish a segregated reserve for GCF grant funds as required by the province. Additionally, staff recommend corresponding changes to the Reserves and Surplus Policy (#1600-020) and its appendix as attached with the changes noted in red text for clarity (Section 2.9).

Staff also recommend amending Section 7.5 of the Reserves and Surplus Policy to reflect the current practice of allocating interest quarterly rather than annually, and to include the return on interest earned on reserve funds held in interest-bearing bank accounts in the interest allocation calculation.

SUSTAINABILITY/CLIMATE CHANGE IMPACTS:

The focus of the GCF is to enhance investments in core community infrastructure for BC’s growing communities. To the extent that these investments consider sustainability and climate change impacts, the outcomes will positively affect View Royal’s sustainability.

FINANCIAL IMPLICATIONS:

The Finance department currently administers and reports on eleven separate reserves in addition to statutory development cost charge funds and other reserve accounts. While the addition of one more segregated reserve fund is not of itself burdensome, at a certain point the addition of work without commensurate resourcing is unsustainable.

ALTERNATIVES:

The province requires establishment of a segregated reserve fund for the GCF as a condition of the grant; therefore, other alternatives are not recommended.

CONCLUSION:

Draft Bylaw 1116 establishes a reserve that meets the requirements of the GCF. Amendments to View Royal’s Reserves and Surplus Policy (#1600-020) correspond to the establishment of the new reserve and guide the administration of this reserve. Staff recommend Council’s consideration of the proposed bylaw and approval of proposed amendments to the policy.

ATTACHMENTS:

• March 16, 2023 letter from Ministry of Municipal Affairs
• Draft Growing Communities Fund Reserve Bylaw No. 1116, 2023
• Draft amended Reserves and Surplus Policy #1600-020 with Appendix A