STAFF REPORT: GROWING COMMUNITIES FUND ELIGIBILITY CRITERIA

GROWING COMMUNITIES FUND ELIGIBILITY CRITERIA

RECOMMENDATION:

THAT the report dated March 22, 2023, titled “Growing Communities Fund Eligible Projects” from the Director of Finance be received.

PURPOSE:

To provide information about the purpose and conditional provisions of the British Columbia’s Growing Communities Fund (GCF) grant.

TIME CRITICAL:

The province requests that the GCF be fully expended within approximately five years of receipt. View Royal received of the full amount on March 28, 2023, therefore the Province will expect the fund to be fully spent by the end of March, 2028.

EXECUTIVE SUMMARY:

The province awarded View Royal $4,665,000 from the Growing Communities Fund with the principal objective being to increase the local housing supply by supporting investments in community infrastructure and amenities. This is a conditional grant, with criteria around project eligibility, fund administration, reporting, and public recognition.

Staff are in the process of identifying projects that meet GCF funding criteria. Further analysis to understand the alignment of these and other initiatives with priorities in View Royal’s Strategic Plan, the Official Community Plan and other foundational plans is required prior to inclusion in future financial plans. This analysis must include consideration of staff’s capacity to deliver priority projects and the financial implications of expanding View Royal’s capacity.

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 support the primary objective to increase the local housing supply. The province has set conditions on the GCF around project eligibility, fund administration and reporting.

Project eligibility

The province identified specific categories of capital projects that are eligible for GCF funding (see listing in attached Ministry letter). Projects are limited to one-off costs for municipal-owned infrastructure, rather than ongoing or operational activities. One-off costs may include feasibility studies, including infrastructure capacity assessments, and the pre-construction work required for eligible projects. The projects are to be incremental to currently planned investments and should accelerate the delivery of capital projects.

Generally, incremental projects are those that are in addition to projects in the approved five-year financial plan. This requirement is meant to incentivise local governments to push the development horizon and hasten the construction of housing in communities by supporting investments in infrastructure that enables development.

The following table describes several funding scenarios for capital projects in the five-year financial plan and whether they would be eligible for GCF funding based on the stated funding source, if they meet all other aspects of project eligibility:

GCF conditions prohibit the transfer of funds to third parties, except for:

• Contributions to eligible housing projects and infrastructure owned by a regional district when the municipality is a participant in the service.
• First Nations eligible infrastructure when it is a shared service or there is a service relationship.
• Eligible infrastructure projects that result in capital assets that are owned by one or more local governments in a shared service (such as Juan de Fuca Recreation Centre and West Shore RCMP facility).

If projects are advanced to occur earlier than originally scheduled, Council should consider the implication to staff capacity or service delivery.

Fund administration

As a condition of funding, the GCF requires the recipient municipality to place the GCF grant in a separate dedicated reserve fund for capital and planning purposes and held in that reserve for spending only on eligible projects. Interest earned on the reserve must be retained in the reserve and used only for eligible purposes. At its April 18, 2023, meeting Council adopted the Growing Communities Fund Reserve Bylaw No. 1116, 2023 to satisfy this requirement.

Reporting

The municipality must report annually on the amounts and uses of money expended from the GCF reserve fund over the fiscal year and the balance of the reserve fund at the end of the fiscal year. Additionally, the annual financial statements must include a schedule describing these details until GCF funding is fully expended.

Further to financial reporting requirements, an annual report that identifies work related to the Housing Needs Reports and pre-zoning requirements, as applicable, is required. The province has indicated that a template for this report will be distributed later.

GCF requirements also include parameters for public recognition of the funding relating to capital projects.

DISCUSSION:

Given the purpose and conditions of the GCF, staff are in the process of identifying potential projects that meet the eligibility requirements. Staff are reviewing the five-year financial plan, master plans and other sources to better understand previously established priorities.

Given that the GCF award is insufficient to complete all potential projects, staff recommend that funding priority for eligible projects be aligned with other foundational documents. These include but are not limited to the Strategic Plan and Official Community Plan, assorted engineering and parks master plans, and the Active Transportation Network Plan. Given the five-year horizon to utilize the GCF, there is no immediate urgency to make these decisions before complete information is in hand.

Five-year financial plans are based on the staffing resources available to successfully deliver projects. Accelerating projects to earlier years or injecting new projects into the five-year financial plan will impact staff’s ability to deliver projects as scheduled. Therefore, staff will need to investigate options to expand staff capacity and estimate the resulting financial implications.

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 and climate action.

FINANCIAL IMPLICATIONS:

The five-year financial plan must include all proposed uses of the GCF. Given that the current 2023-2027 Financial Plan has been finalized, staff anticipate that most GCF-funded projects will be included in future iterations of the five-year plan. The financial plan would need to be amended in 2023 to the extent that GCF eligible projects or uses are approved to occur in 2023.

The financial plan may also need to be amended for additional financial impacts required to expand staff capacity to accommodate accelerated or new projects. GCF criteria does fund ongoing or operational activities.

ALTERNATIVES:

The province has set the conditions and criteria for uses of the GCF, and the Town has no other alternative than to comply to the extent it wishes to use the funding. This report is provided for Council’s information and will give rise to a multitude of alternative uses for the GCF. Further analysis is needed to understand which projects best achieve objectives in View Royal’s Strategic Plan and other foundational documents, while meeting the provincial objectives for this fund.

CONCLUSION:

The province has specified criteria and requirements for the GCF to achieve the primary objective of increasing the local housing supply with investments in community infrastructure and amenities. Staff are responsible for ensuring requirements for fund administration and reporting are met and have initiated appropriate actions accordingly. Staff recommend that further analysis is required prior to allocating the GCF grant to better understand the alignment of eligible projects with View Royal’s strategic documents and staff capacity.

ATTACHMENTS:

Attachment 1 – March 16, 2023, letter from Ministry of Municipal Affairs