2020-2025 Financial Plan Presentation 2020-05-06 Public Consultation Presentation 5 5 Year Financial Pl ar Financial Plan an 2020-2025 2020-2025 1 Outline • Legislation – Community Charter Act • Strategic Plan & Financial Plan • Funding & Taxation Methods • Assessment • Other Taxing Authorities • Village Services • Current Situation - COVID-19 • Financial Plan • Year Over Year Comparisons • Value of Services • Questions/Comments 2 1
2020-2025 Financial Plan Presentation 2020-05-06 Legislation The Community Charter Act sets out the requirements for municipal financial planning • The Financial Plan must cover 5 years • It must be balanced (some leeway this year due to COVID-19) • For this year only, municipalities are allowed to carry borrowing for a year – 2021 • For this year only, municipalities are allowed to borrow against their internal reserves without paying interest • The Financial Plan must set out the revenues and expenses in specific categories • The Plan must identify the levels of taxation, permissive exemptions and class tax ratios • If a deficit is incurred in one year, it must be budgeted for and collected in the next year • There must be an opportunity for the public to view, question and comment prior to adoption • The Financial Plan must be adopted by bylaw before May 15 3 Strategic Plan & Financial Plan • Council developed a Strategic Plan in early 2019 and will update it as necessary - likely this autumn or toward the end of the year, basically half way through the 4 year elected term. • The Financial Plan (or budget) allocates funds for Strategic Priorities; the goals and objectives or projects in the Strategic Plan are in the budget. • The budget is made up to two parts – non-discretionary and discretionary. • In other words, the operating core services that the Village provides on an ongoing basis are non- discretionary budget expenses; and the strategic initiatives that are not part of current required operations are discretionary and tend to be project related. 4 2
2020-2025 Financial Plan Presentation 2020-05-06 Funding & Taxation Methods • There are different methods that municipalities are authorized to use to raise funds. • Some services are easily tied to actual usage – for example garbage, water, business licenses, pool attendance, hall rentals, preschool classes. These are logical fee for service situations. • Some services are subsidized by taxation to augment fee for service – for example the pool is heavily subsidized as the costs of maintaining it would cause pool fees to be too high for many people to use. • Other funding models are assessment based (ad valorem) taxes which are progressive taxes, in other words, sliding scale based on the valuation of the property being taxed. For example, general services such as governmental/administrative/finance/debt servicing, recreation services. These may be based on different assessment bases e.g. school taxes are based on the School assessment base; Regional District requisitions and Regional Hospital District requisitions are based on the Hospital assessment base; and Village services are based on the Municipal assessment base. 5 Funding & Taxation Methods • There are also parcel taxes, which in the Village are a set amount for each assessed property parcel. These are for services deemed as equal value for all properties; for example there are parcel taxes for Works & Services, another for Sewer services and one for Infrastructure Replacement Reserves. • There is also a Local Service Area tax for exactly that, services only available in a specific, defined area. The Village does not have any of these taxes at present. • There are also programs and projects that are fully or partially funded by federal, provincial, organizations, foundations or other grants 6 3
2020-2025 Financial Plan Presentation 2020-05-06 Assessment • Municipalities do not control property valuation. In BC that function is carried out independently by the BC Assessment Authority (BCAA). • Properties are valued at July 1 in one year for taxation purposes in the following calendar year. • Assessment notices are delivered by BCAA in early January and can only be disputed by January 31 in the current calendar year. This must be done through the BCAA and the Village does not have the ability to change an assessment. • There are 7 property assessment classes, but within the Village there are only Residential, Utilities, Light Industrial and Business/Other properties. • Warfield properties have experienced significant increases over the last 2 years (14% for 2020). However, if your property is within the average increase, your taxes should reflect the average stated tax increase. If the assessment increase is less than the average, the tax increase is less, if more than the average, the tax increase will reflect that. • In Warfield, the Residential properties are taxed at a lower rate than the other assessment classes. • The following slide shows the breakdown of the assessment base of the Village. 7 Assessment continued… 8 4
2020-2025 Financial Plan Presentation 2020-05-06 Other Taxing Authorities • Municipalities in BC are required to collect and remit taxes for other governments and agencies • The Village does not set the rates, nor have any say in the amounts • For the Province, the Village levies and collects • School taxes – both residential and non-residential taxes (different rates) • Police taxes • For the regional governments the Village levies and collects the requisitions for • Regional District of Kootenay Boundary • West Kootenay Regional Hospital District • For other authorities, the Village collects the rates for • BC Assessment Authority (to carry out annual property assessments) • Municipal Finance Authority (to issue debentures for all municipal borrowing in BC) • The following slide shows the breakdown of the Village taxes and those collected for others 9 Other Taxing Authorities continued… 10 5
2020-2025 Financial Plan Presentation 2020-05-06 Other Taxing Authorities continued… • The services provided by the Regional District that the Village participates in are East End Fire Protection • East End Economic Development • East End Transit • Emergency Preparedness • • Solid Waste Management (landfill/recycling) 9 1 1 Emergency Communications • Lower Columbia Culture, Arts & Recreation • Police Based Victims Assistance • East End Cemeteries • • Regional Planning & Development Administration & General Government • Feasibility Studies Reserve • • The Regional District also provides on a contract basis the following services which the Village funds from general taxation • East End Sewer Utility • Building Inspection • Mapping Services 11 Village Services • The services that the Village sets the levels and budget for are • Roads and Streets (snow clearing, maintenance, patching) • Street lights, signs and sidewalks • Sewer (liquid waste) collection • Water treatment and distribution • Garbage and yard waste collection • Bylaw enforcement • Land use planning and development • Special events and programs (Age Friendly partially grant funded, Youth Action Network grant funded, volunteer recognition, community events) • Recreation services (pool, community hall, parks and walkways) • Building and plumbing inspections • Hydrant maintenance and replacement • Fiscal services (debt retirement, equipment replacement) • Governance services (Council, elections, legislative requirements) • General corporate services (administration, finance, labour relations etc.) 12 6
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