District of Sparwood 2019-2023 FINANCIAL PLAN Public Consultation Meeting March 20, 2019 Presented by: Michèle Schalekamp, CPA, CMA Introduce members of Council and Senior Management team. 1
Public Consultation Meeting Agenda Introduction Tax Base Operating Budget Project Funding Capital Budget 2
Why are we here? Improve the efficiency, transparency and public involvement in the budget process Ensure the public understands and supports the direction of Council Community Charter – Section 166 “A Council must undertake a process of public consultation regarding the proposed financial plan before it is adopted” We are here because Section 166 of British Columbia’s Community Charter states that we must have public consultation regarding the proposed financial plan for the year, this one formal meeting. This gives the public an opportunity to see what major projects are planned for the upcoming year and what their estimated costs will be. This also gives the public an opportunity to provide feedback whether it be positive or negative, as both can be useful. During the early part of the year before the current financial plan is adopted, we operate under the authority of the financial plan adopted in the previous year, which makes provision for operations in a 5 year period. This presentation will deal with operations in an overview only. 3
Sustainability is defined as: “Meeting the needs of the present without compromising the ability of future generations to meet their needs” Paraphrased from the Brundtland Commission In order that we remain aware of future needs we review the effects of the capital and the reserve plans out to 20 years. 4
Official Community Plan (OCP) Sparwood undertook to renew their Official Community Plan (OCP) starting in 2013 and the OCP bylaw was adopted in 2015. This plan is the formal communication from the community on where they want to be in the future. 5
Strategic Plan With the adoption of the Official Community Plan, strategic planning is undertaken. During strategic planning we chart a course that is intended to lead to the goals set by the Official Community Plan. As financial plan projects are brought forward for consideration, they will be assessed on how well they head in the direction set by the Strategic Plan. Some items will be more concerned with keeping the District operating effectively and will be neutral in relation to the Strategic Plan. However, some proposals may conflict with the Strategic Plan and should be reconsidered. This is especially true of capital items, which once built or purchased may serve to frustrate the goals set by the OCP for many years. Local government operations gather a significant momentum and just like an ocean liner cannot stop or change direction very quickly. Our present course may already be heading in the general direction that the new Strategic Plan will identify, so a major change of direction might not be needed. It may take one or two budget cycles before a shift of direction is seen. 6
Council’s 2019 - 2023 Corporate Strategic Themes Economic Diversity Community Lifestyle Mining Industry Impact After the October 2018 election, Council completed a strategic planning session in February 2019 to determine the strategic direction for Sparwood for the next four year. Three clear corporate strategic themes emerged from the session: - Economic diversity - Community lifestyle - Mining industry impact 7
2018 Tax Base The following slides are to give you an idea of where all of the taxes that are collected get distributed and who is paying. Sparwood does not get to keep everything it collects! 8
Allocation of Sparwood Property Taxes 57% available for municipal use $12.7M taxes collected It should be noted that not all of the taxes that are paid to the District of Sparwood belong to the District. This chart shows that of the total 2018 taxes collected in Sparwood ($12.7M) only 57% ($7,325,000) is available for the District’s use. 2018 Allocation of Sparwood Taxes EV Mine Pool - Fernie, Elkford & Area A 2,002,342 EV Mine Pool - Sparwood 3,118,869 District of Sparwood General 4,206,802 Regional Hospital District 175,130 RDEK - general 238,762 EValley Waste - closure & debt 465,348 School taxation 2,117,858 Police 329,290 BCAA & MFA 110,355 TOTAL $12,764,756 9
Sparwood Tax Share by Class Mine Pool – 46.8% Residential – 24.6% Business – 12.4% The Mine Pool taxes will increase or decrease in future years by the lesser of CPI and the average tax increases in the Elk Valley. 10
Keeping up with the neighbours – 2018 (Selected 1200 square foot home) Fernie Crowsnest Pass Elkford Sparwood Assessed value $429,000 $293,000 $316,700 $309,700 Tax 3,324.03 2,887.20 2,762.70 2,375.42 Utilities 704.08 1,080.00 483.75 741.84 Total 4,028.11 3,967.20 3,246.45 3,117.26 To see how our taxes and utilities compare with surrounding communities we have been tracking four similar homes in these communities from year to year. Sparwood’s total taxes and fees continue to be reasonable in comparison to its neighbours. Please note that these are not always perfectly comparable numbers as each area’s taxes are used to fund different things. For example, the Crowsnest Pass taxes help fund their ambulance service. The results are affected by the assessed value. The sample home is located in lower Sparwood. 11
2019 Operating Budget 12
2019 Major Operating Initiatives Executive Assistant (HR/Safety/Communications) position Conceptual design Fire Hall #2 Teck – Condition 21 consulting fees Complete flood mitigation strategy Parks and recreation master plan Update ● Zoning bylaw ● Subdivision servicing bylaw ● Cemetery master plan Continuing to focus on ● Wildlife mitigation strategies ● Economic diversification ● Trail development ● Water leak repairs These are some of the operational items that Staff and Council are working on to ensure that Sparwood moves forward. 13
2019 Operating Revenue $13.5M Taxation is 57% (2018 57%) of our revenue, while user fees are 20% (2018 18%). The remaining 23% is from various other sources, such as grants. 14
2019 Operating Costs $13.5M 2019 - $13,461,366 2018 - $13,157,305 Administration includes - office and lease building maintenance, community broadband, IT, legal, finance, human resources, records management Protection includes - bylaw enforcement, building inspection, animal control and emergency planning Public Health includes - mosquito control and Cemeteries Community Relations includes - visitor information centre, library, coal miner days, youth action network and various grant programs 15
2019 Community Support $560K * Programs are grant funded and managed through the District. 16
How are Capital Projects Funded? Debt funding Grants Reserves for capital projects Replenished by: Formal repayment with interest Yearly transfers from operations 17
Reserve Funds - Guidelines When spending Careful consideration If reserves are diminished Must borrow to fund new capital Debt repayments Not as flexible Resource community Reliant on industry Must replenish reserves regularly May lose flexibility to respond to economic downturns 18
Reserve Funds - Guidelines Infrastructure and equipment Upgrades & replacement • Reasonable maintenance costs New spending Keep up with regulated standards • Water protection, sewer & waste Economic development Grow & diversify the community • Maintain low taxes As with your house or vehicles, there comes a point where they must be replaced because they are either costing you too much money to repair or they need to be updated to keep up with current regulations. There are always new rules and regulations being set by various levels of government that the District must adhere to. We must also consider the future and develop infrastructure strategically. Often there are Government Grants available to help fund projects, but in the current economic downturn they are often coming up on short time lines and need proof that they have Council authorization and that the District’s share of funds are available. An example of this was the Stimulus Funding for the CPR Overpass and Link Trail. Capital budgets in any one year may contain many more projects than actually move forward just so that we are able to take advantage of potential funding opportunities. 19
Borrowing Funds! - When & Why? Example – major infrastructure upgrades • Several years down road • Too costly for reserves • Borrowing evenly spreads out costs between current & future taxpayers Local Service Areas (LSA) • Infrastructure upgrades for limited area • Taxpayers in LSA repay debt *Conserves reserve funds for projects that benefit ALL taxpayers It is the future residents of the community that benefit from these larger, long term projects. Therefore, they are typically the ones that pay for them over time by paying back the borrowed funds. The District does have a Local Improvement reserve that can be used for very small projects and avoid the significant amount of administration that the borrowing process requires. 20
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