DISTRICT OF LANTZVILLE2018-2022 FINANCIAL PLAN

November 19, 2018 Committee of the Whole

2019 – 2023 Financial PlanPresentation to Mayor & Council

Overview

▪ The 2019-2023 Plan has been prepared in accordance with the

District of Lantzville’s 2019 Financial Plan Guidelines

▪ Copy included in Financial Plan Binder

▪ A zero-based budgeting approach has been used, which includes

a thorough review of each line item to determine necessity

▪ The complete 2019-2023 Financial Plan Bylaw and Property Tax

Distribution will be distributed to Council at a later date, once the

District receives BC Assessment’s final roll assessment information

around March 31, 2019

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Budget Highlights

▪ The proposed budget outlines an increase of approximately 3.65%

over the prior year’s budget

▪ This is an increase of approximately $70,600 on a $5.3M

expense budget

▪ For reference, approximately $19,000 of additional expenses

increases the tax rate by 1%

▪ Inflationary pressures:

▪ Wage and benefit increases at approximately 2% (CUPE)

▪ Victoria, BC, Consumer Price Index increased by 2.48%

▪ Fuel prices and strong economy impacting costs

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Legislative Requirement

• Financial Plan – Section 165 and 166 of the Community Charter

• Be adopted annually by bylaw, before the annual tax rate

bylaw is adopted (before May 15th)

• Be for a 5-year period (2019-2023)

• For each year, set out the proposed expenditures, funding

sources and transfers to or between funds

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No Deficit Rule

• Section 165 (5) and (9) of the Community Charter

• The total of the proposed expenditures and transfers to other

funds for a year must not exceed the total of the proposed

funding sources and transfers from other funds for the year

(simply put, no deficits are permitted)

• If actual expenditures and transfers to other funds for a year

exceed actual revenues and transfers from other funds for the

year, the resulting deficiency must be included in the next

year’s financial plan as an expenditure in that year

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No Surplus Rule

• Per the Ministry, municipalities should not purposefully budget for

an operating surplus. Revenue should only be collected if there is

an associated expense in the Financial Plan

• Budget may provide for reserve fund contributions

• The Financial Plan should balance (net to $0)

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Budget Review Process

▪ Budget process started in July 2018 and Department Heads

submitted budgets in August 2018

▪ Since then, multiple budget review meetings have taken place

▪ Budget to be amended when direction is received from Council

▪ Council may provide direction at any time

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Accounting Overview

▪ All Financial Information is Recorded in separate funds

▪ General Fund

▪ Water Fund

▪ Sewer Fund

▪ Capital Fund

▪ Reserve Funds

▪ The Water Fund and Sewer Fund are stand-alone utilities, which

operate as self-sustaining entities

▪ i.e. utility revenues are adequate to support expenditures in

each year

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Accounting Overview

▪ There are three main categories of expenditures

1. Operating Expenses – required, annual expenses to maintain

operations

2. Non-Core Expenses – Expenses that do not happen annually and

are specifically approved by Council

1. These may include special projects and larger repair &

maintenance items

2. Temporary or one-time changes to existing level of service

3. Larger purchases but do not meet capital asset criteria

3. Capital Projects – Capital purchases or project costs where the

cost is significant and will be amortized over the useful life of the

asset

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Funding Concepts

▪ Operating Expenses- should only (over time) be funded by annual

property tax collection and annual revenues

▪ Non-Core Expenses

▪ May be funded by General Revenues

▪ May also be funded from operating reserve funds

▪ Grant funding is sometimes available

▪ Capital Projects

▪ Funding is generally from Reserve Funds (i.e. DCC funding, Capital

Works Project Reserves, etc.. )

▪ Grant funding is researched and applied for if available

▪ Local Area Service (if applicable)

▪ Funded by those benefitting

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Revenue

▪ Property Taxes

▪ Based on assessed value

▪ Parcel Taxes (specified by bylaw)

▪ Based on area of land or a flat amount per parcel

▪ User Fees

▪ Based on the cost of providing the service and usage

▪ Utility 1%

▪ Based on 1% of specified utilities (Telus, Shaw, Fortis, Hydro)

previous year’s income in Lantzville

▪ Also receive 3% Municipal Operating Fees from Fortis

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Revenue Continued

▪ PILT (Payment in Lieu of Tax)

▪ Government & crown corporations exempt from paying tax under Section 125 of the Constitution Act, 1867

▪ PILT is a way of making a payment to municipal governments for services it receives

▪ Lantzville has one PILT from BC Hydro

▪ Grants

▪ Small Community Works Fund▪ Around $442k/year

▪ Gas Tax▪ Funds can only be accessed for projects that meet the grant

funding criteria; they are not included in revenue until a

capital project is approved by Council

▪ Around $200k/year12

Revenue Continued

▪ Other

▪ Penalties

▪ Interest (arrears, delinquent, cash)

▪ Donations (park bench contribution, developers)

▪ Application fees (DVP, subdivision, etc.)

▪ Administration fees paid by developers

▪ Inventory sales (garbage tags, bins)

▪ Fire Suppression Service Agreement

▪ Snaw-Naw-As First Nation

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Surplus

▪ The difference between Revenue and Expense each

year in the operating budget is transferred into the

surplus account

▪ Surplus is mainly the difference between tax funds

received and tax funded expenses

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Use of Surplus

▪ Reduces risk by providing funding in case of

emergencies

▪ Should not be used to fund regular operating costs

▪ May be a funding option for one-time expenditures

at Council discretion

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Surplus

Year General Sewer Water

Projected 2018* $782,883 ($301,422) $674,098

2017 $2,395,155 ($300,342) 677,878

2016 $2,777,624 ($453,135) 668,535

2015 $2,918,812 ($573,294) 666,096

2014 $2,818,250 ($723,777) 660,311

*General surplus includes $1,330,259 for Nanaimo water connection

and approximately $288k of non-core items funded through surplus

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Assessment

▪ Preview Roll (Expected by end of November)

▪ Completed Roll (December 31st)

▪ Revised Roll (March 31st)

▪ NMC = Non Market Change or New Assessment

▪ Calculation process – exclude Non Market Change to

obtain same taxes as prior year

▪ Apply projected tax increase

▪ Add factor for Non Market Change

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Property Taxes - Continued

▪ Non-Market Change estimated at $24.3M from BC

Assessment

▪ Largely due to Foothills property assessments

▪ This would generate approximately $40,000 of extra tax

revenue

▪ Financial plan includes saving a portion of these funds for

maintenance costs that the District will incur

▪ Remainder of the funds to be allocated by Council at the

Strategic Planning session

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Property Taxes - Others

▪ Tax Rates are set per $1,000/assessment

▪ The District collects and remits taxes on behalf of other taxing authorities. The tax amounts and rates are set external to the District and are entirely out of the District’s control

▪ Regional District of Nanaimo (general and hospital taxes)

▪ School (SD68 and 69) on behalf of the Province

▪ Police Tax on behalf of the Province

▪ BC Assessment Authority

▪ Municipal Finance Authority

▪ Regional Library

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Property Taxes Collected

Type % Total Revenue (2018)

General Municipal 36%

School District 38%

Nanaimo Regional District - General 13%

Nanaimo Regional District - Hospital 4%

Library 4%

Policing 4%

BC Assessment Authority 1%

Municipal Finance Authority 0%

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Comparative Data

▪ Comparative data for Regional Municipalities can

be found under Tab 2

▪ Average Single Family Home for Lantzville is

$630,945

▪ Additional information is provided by the Ministry

of Municipal Affairs

▪ Note: Levels of service, cost, financial health,

varying fee structures, and other items vary

between municipalities

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Current Financial Plan

▪ The Financial Plan as presented includes:

2019 Property Tax (Municipal Portion):

5.73% 2019 rate increase

(2.08%) portion funded by New Growth (Non-Market Change)

3.65% effective rate increase for existing taxpayers

Impact to Average Single Family House, $630,945

▪ 2018 tax rate - $630,945 / $1,000 x 1.72 = $1,088

▪ 2019 tax rate - $630,945 / $1,000 x 1.79 = $1,128

▪ Difference of $40, or 3.65%

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Current Financial Plan

Sewer User Fee

▪ Approximate 19.8% increase in user fees required

▪ If attributed equally to the rate categories now,

quarterly base fee would increase from $94.42 to

$113.30, or $18.80 each quarter

▪ An analysis of applicable costs attributed to the Sewer fund

was completed this year, resulting in the majority of the

19.8% increase

Water User Fee

▪ 2019 User Fee – 1% Increase

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Budgeted Expenses

General Government 22%

Mayor and Council2%

Protective Services7%

Contract Services 2%

Transportation Services

12%

Planning3%

Solid Waste Collection

4%

Parks & Recreation8%

Sewer9%

Water9%

Reserve Contributions

22%

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Reserve Contributions

▪ September 17, 2018 Council Motion:

▪ “That Council consider the reinstatement of the annual

contributions to the Park Development Reserve Fund for

the 2019-2023 Financial Plan”

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Questions?

▪ Note that the operating budget (or any budget items)

may be adjusted in the future with direction from

Council

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Non-Core - General Government

▪ Costin Hall Maintenance - $7,000

▪ Funded from surplus

▪ Strategic Planning - $3,000

▪ Funded from property taxes

▪ Community Use Buildings Plan - $10,000

▪ Funded from surplus

▪ OCP - $5,000

▪ Funded from surplus

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Non-Core - Fire Services

▪ All funded from surplus:

▪ Fire Truck Electric Fan - $5,000

▪ Fire Dept Office Furniture - $10,000

▪ 6 Portable Radios - $6,000 (2020)

▪ Fire Hall Projector & Screen - $5,000 (2020)

▪ Repaint Truck Bay - $15,000 (2020)

▪ E1 Refurbishment - $15,000 (2021)

▪ Plastic Cribbing - $5,000 (2021)

▪ Preplan Software - $5,000 (2022)

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Non-Core - Planning

▪ Zoning & Subdivision Bylaw Reviews- $17,500

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Non-Core - Parks & Recreation

▪ Copley Ridge Recreation (Woodlot) Trail - $4,000

▪ Funded from surplus

▪ Interpretive Signage - $3,500

▪ Funded 2/3 from grant, 1/3 from surplus

▪ Fernmar Road to Andrea Cr. via Copley Park Trail -

$5,500

▪ Funded from surplus

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Non-Core - Transportation

▪ Roads Master Plan - $100,000 (2022)

▪ Funded by Gas Tax Grant

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Non-Core - Sewer

▪ Sewer Master Plan - $100,000

▪ Funded by Gas Tax Grant

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Questions?

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Capital Budgets

▪ Capital Project Overview

▪ Council’s budget

▪ Projects may be added, approved as is, moved

between years, modified, or removed from the budget

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2018 Roll Forward Projects

Project 2018

Budget

2018

Actual

Projected

Carried

Forward to

2019

Carried

Forward to

2020

Website Upgrades 15,000 12,000 3000 -

Replace E-6 Fire Truck 425,000 112,100 312,900 -

Peterson Road reconstruction

and walking path

301,042 48,725 851,275 -

Rumming Road Drainage 425,000 25,000 175,000 -

Huddlestone Upgrades 142,000 112,677 44,323 -

Sewer Phase 3 3,051,065 350,000 4,701,065 1,780,000

Roll Forward Totals 4,359,107 660,502 6,087,563 1,780,000

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General Government

Project 2019 2020 2021 2022 2023

Costin Hall Upgrades 97,000

Flat Roof Replacement – Costin

Hall

12,500

Drop Ceiling – Costin Hall 10,000

Community Use Building B

(Church) Upgrades

146,000

General Government Total 12,500 243,000 10,000 - -

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Protective Services

Project 2019 2020 2021 2022 2023

Fire Hall – Additional Office 75,000

Fire Hall – New Kitchen 25,000

Duty Truck Replacement 60,000

SCBA & Bottle Replacement 180,000

Engine-E2 Remote Monitor 20,000

Industrial Washing Machine 10,000

New Bay Doors 21,000

New Jaws of Life 20,000

Replace Engine-3 300,000

Protective Services Total 100,000 81,000 - 330,000 200,00037

Transportation - Roads

Project 2019 2020 2021 2022 2023

Fernmar Road (Clark Drive to

West End)

350,000

Venture Road Replacement 250,000

Clark Cres Asphalt Replacement

Portion

245,000

Alger Road Asphalt Replacement 230,000

Mart & Metro Road Replacement 450,000

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Transportation – Storm Drain/PW

Project 2019 2020 2021 2022 2023

Clark Alger Road Crossing of

Bloods Creek

350,000

Installation of Piping Along

Huddlestone Road

200,000 200,000

Joy Way Culvert 200,000

Culvert Replacement Dickinson

Road Bloods Creek Head Wall

25,000

Replace Half Ton Truck 70,000

Replace 3 Ton Dump Truck 90,000

Backhoe Replacement 150,000

Dodge 2500 Replacement 70,000

Transportation Total 270,000 800,000 535,000 445,000 930,00039

Parks & Recreation

Project 2019 2020 2021 2022 2023

Copley Park Upgrades 80,000

E&N Trail Portion From Ware

Road to Phillip Road Along

Railway

500,000 500,000

Trail Connection Harwood to

Phillip

28,350

Parks Total 80,000 28,350 - 500,000 500,000

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Sewer Fund

Project 2019 2020 2021 2022 2023

SCADA Upgrade (50/50

Water & Sewer)

43,750

Sewer Total 43,750 - - - -

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Water Fund

Project 2019 2020 2021 2022 2023

Industrial Road 434,454

SCADA Upgrade (50/50

Water & Sewer)

43,750

Sebastion Road Watermain

Replacement

200,000

Replace Clark Cres

Watermain

374,000

Water Total 243,750 - 434,454 - 374,000

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Questions?

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Next Steps

November 22, 2018 – 6pm Staff updates to Financial

Plan as Requested

Committee of the Whole

November 26, 2018 – 6pm Potential 1st 2nd 3rd

readings of Financial Plan

Bylaw, public input session

Committee of the Whole /

Council

December 10, 2018 – 7pm Adoption of Financial Plan

Bylaw (if first three

readings happen on Nov

26th)

Council

December ?, 2018 – pm Readings of Financial Plan

Bylaw (if required)

Special Council

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