PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Budget Information Meetings January 28-30, 2020
Presentation Outline Presentation Outline 1. Assessment Changes 2. Asset Management 3. Greening the Budget 4. Operational Issues 5. Capital/Asset Issues 6. 2020 Budget Process PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN 2 Slide 1
Assessment Changes PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 2
Assessment Shifts in West Vancouver Average Above Average Assessment Change = -20% Assessment Change = -14.8% Assessment Change = -10% Change in 2019 2020 Tax Municipal Tax Assessment Assessment Assessment Shift Below Average -20% $3,110,913 $2,488,730 -$275 $4,187 Average -14.8% $2,919,350 $2,488,730 $0 $4,187 Above Average -10% $2,765,256 $2,488,730 $221 $4,187 This chart references the arithmetic mean average of all residential property classes, as this is the point of 0% tax shift. PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 3
2019 Heat Map PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 4
2020 Heat Map PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 5
Tax Shift vs. Property Value PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 6
Property Tax Deferment The Province is changing the way the application for property tax deferments will be handled Starting in April 2020, there will be an electronic application required for both new and renewal applications You will no longer be able to apply through the municipality The Province will send a letter with instructions for renewal to all property owners already deferring property tax More information will be available on the District’s website, in the tax bill mail out, and at: www.gov.bc.ca/propertytaxdeferment PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 7
Asset Management PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 8
Asset Management The District currently owns $1 billion in assets This is approximately $60,665 for each household, based on 16,484 households Over the next 20 years, virtually all of these assets will require capital investment to maintain their performance The estimated cost of maintaining the general fund assets alone is $304.8 million over the next 20 years The District needs to continue working on the long-term strategy for asset management PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 9
Twenty-Year Asset Lifecycle Replacement and Maintenance Twenty-Year Lifecycle Funding Requirement $ 14.5M $35 Deferred Maintenance Requirement $ 13.8M $30 $25 $20 Millions $15 $10 $5 $0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 Information Technology Transportation Infrastructure & Equipment Parks, Culture & Community Fire & Rescue Police Library Facilities Current Asset Management Tax Funding PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 10
Twenty-Year Asset Lifecycle Replacement and Maintenance Twenty-Year Lifecycle Funding Requirement $ 14.5M $35 Deferred Maintenance Requirement $ 13.8M $30 DEFERRED $25 MAINTENANCE $20 Millions $15 $10 $5 $0 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 Information Technology Transportation Infrastructure & Equipment Parks, Culture & Community Fire & Rescue Police Library Facilities Current Asset Management Tax Funding PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 11
Asset Levy – Moving Target Asset investment gap recalculated due to: » compounding impact of not funding required maintenance in past years (deferred maintenance) » response to climate change impacts PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 12
Asset Management – Next Steps 1. Eliminate deferred maintenance deficit. 2. Incorporate natural capital maintenance and climate action emergency response support projects. PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 13
Greening the Budget PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 14
Proposed Additional Asset Levy Average Value Property Amount per Asset Levy for: average Levy % household Natural Capital and Climate 1.00% $41 Response Deferred Maintenance 0.50% $20 (Repay Endowment Fund Loan) 2020 average assessed single family detached home in West Vancouver is $2.85 million. PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 15
Greening the Budget: Climate Emergency Response A 1% addition to the Asset Levy will add $738,000 to the District’s asset reserves annually The District is working to make all of our assets ‘green’, but this generally involves spending more money up front The Community and Corporate Emissions Plans include more than fifty actions we need to implement to reduce greenhouse gases, limit waste, and monitor conditions The District also now has an inventory of natural capital assets, and these also need investment and monitoring PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 16
Deferred Maintenance The District has underinvested in its assets for many years, resulting in outdated assets in poor condition Gradually, these assets are being replaced, but there is still about $13M worth of asset investment outstanding A 0.5% addition to the asset levy will allow the District to do internal borrowing from its basic Endowment Fund of $18M This will fund $5.5M, which is enough to deal with the most urgent deferred maintenance issues, including outdated technology, docks, roads, and washrooms PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 17
Operational Issues PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 18
2020 Operating Budget Factors affecting the operating budget: Revenue reductions • Permit revenue • Investment income Unavoidable cost pressures • Contract increases • Utility rate increases PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 19
1% Property Tax Rate Increase For 2020, 1% equals $738,000 of revenue to the District. The impact of a 1% property tax rate increase on three typical properties: Assessed Value of Proposed Tax Impact Property $1.00 million $14 $2.85 million* $41 $5.00 million $72 *2020 average assessed single family detached home in West Vancouver is $2.85 million. PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 20
2020 Preliminary Operating Budget Increase / (Decrease) Tax Increase % Labour changes $2,388,918 3.24% Requests Labour – 8 FTEs $908,737 1.23% Non-Labour $267,026 0.36% Revenue reductions $677,876 0.92% Unavoidable cost increases $359,430 0.49% Additional revenue ($848,590) (1.15%) Cost reductions ($111,317) (0.15%) New construction revenue ($706,000) (0.96%) Total $2,936,080 3.98% PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 21
2020 Preliminary Operating Budget Operational Requests Total of Items Requested $1,960,718 Critical Items Included $1,175,763 Items Not Included $784,955 PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 22
Capital/Asset Issues PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 23
2020 Preliminary Capital Budget Critical Requirement for: Total Requests Requests Deferred Maintenance $13,727,712 $11,475,082 Maintenance $12,761,727 $9,828,557 New Assets $1,248,000 $566,000 New Assets – CEEP $1,186,915 $598,915 Support Total $28,924,354 $22,468,554 PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 24
2020 Preliminary Capital Budget Available Funding: 2020 Base Asset Levy Funds $14,500,000 2020 DCCs and External Funds $1,171,500 Proposed 2020 Natural Capital and CEEP $738,000 Support Proposed 2020 Deferred Maintenance Loan $5,500,000 Funding Available for Required Maintenance $21,909,500 Shortfall $559,054 PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 25
2020 Budget Process PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 26
Preliminary Proposed Increase Average Single Family Detached Home Proposed Proposed Average Single Family Detached 2019 2020 Y:Y Change Increase/ Home = $2.85M Taxes & Fees Taxes & Fees (Decrease) Operational Levy $4,093 $4,256 $163 3.98% * 0.50% Incremental Asset Levy $20 $20 included above Natural Capital & Climate Response $0 $41 $41 1.00% Total $4,093 $4,317 $224 5.48% * Percentage of 2019 total tax PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 27
Utilities Increase Median Household Proposed Proposed 2019 Median Household 2020 Y:Y Change Increase/ Taxes & Fees Taxes & Fees (Decrease) Water $695 $728 $33 4.75% Sanitary/Storm Sewers $1,083 $1,180 $97 8.96% ($9) Solid Waste $241 $232 (3.73%) Total $2,019 $2,140 $121 5.99% PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 28
Consultation Online westvancouverITE information and moderated forum Budget Information Meetings January 28 | 3–5 p.m. | Seniors’ Activity Centre January 29 | 6–8 p.m. | West Vancouver Memorial Library January 30 | 6:30–8:30 p.m. | West Vancouver Community Centre PROPOSED 2020-2024 FIVE-YEAR FINANCIAL PLAN Slide 29
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