HomeMy WebLinkAboutAFC 2017-07-18 Agenda.pdfCity of Maple Ridge
Audit & Finance Committee
July 18, 2017
5:00 PM
Blaney Room
Chairperson: Councillor Masse
Committee Members: Mayor Read; Councillors C. Bell; K. Duncan; G. Robson; T. Shymkiw;
C. Speirs
Staff: Chief Administrative Officer: T. Swabey
GM – Corporate & Financial Svc: P. Gill
GM – Public Works & Development F. Quinn
GM – Community Dev. Park & Rec K. Swift
Manager of Accounting: C. Nolan
Manager of Financial Planning T. Thompson
Manager Sustainability & Corporate Planning L. Benson
Recording Secretary: Amanda Gaunt
AGENDA
1. Approval of agenda
2. Approval of minutes of May 29, 2017
3. Community Services Development Proposal
4. Facilities Funding Model
5. Adjournment
“Original signed by Catherine Nolan”” “Original signed by C. Nolan”
_________________________________________________________________________________________________ Agenda submitted by: C. Nolan, CPA, CGA
Manager of Accounting
City of Maple Ridge
Audit & Finance Committee Meeting Minutes
May 29, 2017
The Minutes of the Audit and Finance Committee Meeting held in the Blaney Room of the
Municipal Hall, 11995 Haney Place, Maple Ridge, BC on Monday, May 29, 2017 at
10:30 a.m.
PRESENT
Committee Members Municipal Staff
Mayor Read P. Gill, GM, Corporate & Financial Services
Councillor Masse, Chair W. McCormick, Acting GM, Parks Recreation & Culture
Councillor Robson D. Pollock, Acting GM, Public Works & Development
Councillor Speirs C. Nolan, Manager of Accounting
T. Thompson, Manager of Financial Planning
A. Gaunt, Confidential Secretary
Other staff as required
Absent Guests
Councillor Bell
Councillor Duncan
Councillor Shymkiw
Note: Councillor Speirs joined the meeting via phone
The meeting was called to order at 10:34 a.m.
1. Approval of the Agenda
It was moved and seconded
That the agenda for the May 29, 2017 Audit & Finance Committee meeting be
approved as circulated.
CARRIED
2. Approval of minutes of May 8, 2017
It was moved and seconded
That the minutes of the Audit & Finance Committee of May 8, 2017 be adopted
as circulated.
CARRIED
Audit & Finance Committee Meeting Minutes
May 29, 2017
Page 2
3. Business Planning Guidelines 2018-2022
Mr. Gill reviewed the staff report dated May 29, 2017 and provided an overview of
the 2018-2022 Business & Financial Planning Guidelines, including the proposed
property tax increases for the next 5-year financial planning cycle. The Committee
endorsed forwarding the proposed guidelines to Council for further discussion. The
Committee asked for a future discussion on infrastructure funding and tax rate
comparisons.
It was moved and seconded
That the 2018-2022 Business & Financial Planning Guidelines be forwarded to
Council
CARRIED
4. Maple Ridge/Pitt Meadows Community Services – Affordable Housing
Mr. Gill provided a presentation regarding the affordable housing development
project being considered by the Maple Ridge/Pitt Meadows Community Services
Council and their request for financial assistance from the City. Staff & board
members from the Community Services Council were available to answer
Committee questions regarding the project and the request for assistance. The
Committee discussed the proposed project, generally expressing a preference for a
policy approach to affordable housing rather than a one-off approach to a specific
project. The Committee asked that staff bring back information regarding possible
changes to the Community Amenity Program, specifically around affordable
housing. The Committee also asked for information regarding options for providing
a level of support to the Community Services project.
It was moved and seconded
That staff bring back a report outlining options for providing a level of support to
the MR/PM Community Services Affordable Housing project.
CARRIED
5. Debt Financing
Mr. Gill reviewed a letter provided to Mayor & Council about the City’s obligation
regarding taxes collected for the principal and interest payments on the existing
town centre debt.
Adjournment – 11:50
____________________________________________
B. Masse, Chair
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City of Maple Ridge
TO: Audit & Finance Committee MEETING DATE: July 18, 2017
FILE NO:
FROM: Manager of Accounting MEETING: Audit & Finance Committee
SUBJECT: MR PM Community Services Development Proposal
EXECUTIVE SUMMARY:
The Maple Ridge/Pitt Meadows Community Services (CSC) has a development proposal that would
result in the construction of office space for Community Services and 94 affordable residential
housing units. CSC has requested a contribution of approximately $1.8 million from the City, and the
Audit & Finance Committee received a presentation regarding this at the May 29, 2017 meeting.
This contribution is to match the value of the land that Community Services is contributing to the
project. CSC has also received a preliminary commitment from BC Housing for a Provincial grant of
$11 million.
As outlined in the May 29th presentation, a contribution to the order requested by CSC is hard to
rationalize. Community Services was asked to do an analysis of what the project would have
attracted in incentives from the city, had the previous town centre incentive program still been in
place. That value has been calculated at approximately $500,000.
In discussions with CSC, we have been advised that the assistance requested from the city will not
only provide affordable housing, it will also assist CSC in providing improved space for its own
programming. The latter portion of this request is problematic for the city as over the years, we have
denied similar requests for funding from other service providers. Alouette Addictions and the Friends
in Need Foodbank are but two very valuable community organizations that have requested such
assistance and have been denied. CSC itself has applied for a tax exemption in the past and has
been denied based on policy direction.
CSC is a valuable community organization that has been working on this project for some time. Had
the project come forward while the currently expired incentive program was in place, it would have
been eligible under that program. Staff recommend that assistance be afforded to CSC based on the
parameters that were in place for the currently expired incentive program, noting that the value of
that assistance approximates $500,000.
RECOMMENDATION:
That staff be directed to develop a program to provide assistance to the Community Services Council
project following the framework of the recently expired Town Centre Incentive Plan.
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Background and Discussion:
On May 1, 2017, the City received a letter (attached) from the Maple Ridge/Pitt Meadows
Community Services (CSC) regarding a development proposal that would include office space for
Community Services and 94 affordable residential housing units. CSC has received a preliminary
commitment for a grant of $11 million toward the project from BC Housing and has requested the
City contribute approximately $1.8 to match the value of the land that CSC is contributing.
On May 29, 2017, the Audit & Finance Committee received a presentation (attached) about the
project and the request for assistance. As outlined in the presentation, a contribution of the
magnitude requested is hard to rationalize.
In discussions with CSC, we have been advised that the assistance requested from the City will not
only allow for an increase in the number of units offered at low or moderate rental rates from 65 to
86, but will also assist them with providing space for their own programming. The latter portion of
this request is problematic for the City. Over the years, we have denied similar requests for funding
from valuable community organizations such as Alouette Addictions and The Friends in Need Food
Bank. CSC has itself been denied a tax exemption in the past.
CSC has done some analysis to estimate the value of incentives the project would have attracted
under Council’s Town Centre Investment Incentive Program had the program still been in place. That
value is estimated at approximately $500,000.
CONCLUSION:
Staff recommend that any assistance provided to Community Services be based on the parameters
that were in place for the expired incentive program, noting that the value of that assistance is
estimated to be approximately $500,000.
“Original signed by Catherine Nolan”
Prepared by: Catherine Nolan, CPA, CGA
Manager of Accounting
“Original signed by Paul Gill”
Approved by: Paul Gill, CPA, CGA
GM: Corporate & Financial Services
“Original signed by Ted Swabey”
Concurrence: E.C. (Ted) Swabey
Chief Administrative Officer
City of Maple Ridge
11995 Haney Place
Maple Ridge, BC
Maple Ridge/Pitt Meadows
Community Services
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Action: ----------
Attn: Mayor Read and Maple Ridge Council
Re: City of Maple Ridge Contribution to Affordable Housing
Maple Ridge/Pitt Meadows Community Services is embarking on an exciting and ambitious endeavor to
enhance the existing services we provide and create much needed affordable housing in our community. Our
proposed project at 11907 228 th Street includes 94 units of affordable housing, as well as new office and
programming space to replace our existing facility made up of aging trailers. This is a timely project for our
society and the community: we need to replace our aging facility, and the community, including our clients,
need safe and secure affordable housing.
Our vision for the project is to create a space that will benefit not only our clients, but also the community of
Maple Ridge, for years to come. Our desire is for an affordable housing building that offers safe and secure
housing to a range of tenants, including low income seniors, young couples, and working families who are
simply struggling to find a decent place to live at a reasonable rent. Ours will be a healthy, mixed-income
community.
We have received a preliminary commitment from BC Housing for a capital grant $11 million, and have
ourselves committed to contribute our land, assessed at $1.782 million. We greatly value the relationship we
have with Maple Ridge, are looking to include you as a partner in this project, and are seeking a financial
contribution from the City to deepen the affordability of the housing units while continuing to provide
necessary programs and services to the community.
Even with the contributions from BC Housing and our society, the size of the mortgage we would require to
pay for the construction of our new project is staggering. The rents we would have to charge to pay for that
mortgage, while mostly below market, would not provide what we believe to be the ideal mix of tenants for a
project of this nature. Furthermore, the initial start-up and ongoing costs to operate the facility, including a
dramatic increase in property taxes, make creating affordability and providing our ongoing services a
challenge. With your assistance, we can create a healthier mix of tenants and continue to offer much needed
programming.
Both a capital grant and lower operating costs are valuable ways of ensuring this project's success. A capital
grant would lower the size of the mortgage, while lower operating costs would increase the amount of
monthly revenue we have available to make our mortgage payments and pay other operating costs. These are
both ways we would encourage your assistance. Our formal request is for a contribution, by way of any
combination of capital injection, fee reduction, or operating cost savings equal to our equity contribution, the
value of our land, assessed at $1,782,000.
11907 -228 th Street, Maple Ridge BC V2X 8G8
T 604.467.6911 F 604.463.2988
www.comservice.bc.ca
Maple Ridge/Pitt Meadows
Community Services
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With this level of contribution, we will be able to lower our rents for 21 units within the project. To ensure
your contribution results in affordability in perpetuity, we would welcome a Housing Agreement, registered on
the title of our land, that would guarantee a level of affordability deemed appropriate by all project partners.
Furthermore, we are working with staff to secure a space within our project for the RCMP to co-locate within
our existing programming at Alisa's Wish Child and Youth Advocacy Centre, available at no cost to the City. You
will benefit from a free and customized office, and we will benefit from the synergies of co-location; a true
win-win for Community Services and the City of Maple Ridge.
The City of Maple Ridge has previously offered incentive programs for projects that align with their vision:
encouraging energy efficient buildings and supporting development in the town centre. The Maple Ridge
Housing Action Plan identifies the following strategies: support the non-market housing sector, use financial
incentives to support housing goals, and continue to support local community groups. We believe this project
aligns with your vision as a City, and represents the perfect opportunity for the City to implement these
strategies.
As always, we greatly appreciate the time and support you have offered our Society, and hope you will strongly
consider this request.
Sincerely,
Glenn Campbell
Chair of the Board of Directors, Maple Ridge/Pitt Meadows Community Services
11907 -228 th Street, Maple Ridge BC V2X 8G8
T 604.467.6911 F 604.463.2988
www.comservice.bc.ca
Community Services Project
11907 – 228th Street
Project Overview
•Mixed Use Development
–94 Residential Units
–20,000 square feet of ground floor “Commercial”
•For Community Services Programming/Administration
•About 2/3rds of an acre of land
•Assessed Value of $1,782,000
•Project value: $25 million
•25% Commercial: $ 6.25 million
•75% Residential: $18.75 million
Breakdown of Cost
•Project Cost: $25,000,000
–Less: Prov. Grant - $11,000,000
–Less: Land Value - $ 1,800,000
Required Funding $ 12,200,000
“Ask from City” - $ 1,800,000
Net Funding Req’d. $ 10,400,000
(If lump sum assistance from city)
Residential Component
•Types of Residential Units
Without With
City Support City Support Difference
–Studio: 30 30
–1 bedroom: 40 40
–2 bedroom: 19 19
–3 bedroom: 5 5
»Total 94 94
Residential Component
Breakdown of Rental Units by Level of Support
Without With Difference
City Support City Support
Income Assistance 5 5 0
Low Income 38 44 6
Moderate Income 27 42 15
Near Market 24 3 - 21
Total 94 94
Residential Component
Estimate of Monthly Rents
Income Low Moderate Near
Assistance Market
Studio $ 375 $ 550 $ 775 $ 900
Studio (Seniors) $ - $ 765 - -
1 bedroom $ 375 $ 700 $ 875 $ 1,050
2 bedroom $ 570 $ 950 $1,150 $ 1,300
3 bedroom $ 660 $1,250 $1,450 $ 1,613
Residential Component
Summary of Annual Rental Income
Total Rental Income without subsidized rents $1,002,156
Total Rental Income with subsidized rents $ 957,396
Reduction in Rental Income with subsidized rents $ 44,760
Total Number of Additional Subsidized Suites: 21
Average Annual Rent Subsidy $ 2,131 / year
$ 178 / mth
City Fees & Charges
Estimated Taxes & Development Cost Charges
DCC’s - Residential $756,418
- Commercial $ 35,464
Total DCCs (one-time) $791,882
Property Taxes
- City – Residential $81,938
- Others – Res. $42,938 $124,876
- City – Commercial $74,250
- Others – Comm. $43,313 $117,563
Total Property Taxes (annual) $242,439
Financial Considerations
“Ask” from the City $ 1,800,000
Number of Additional Supported
Units Provided with this support: 21
Cost for each additional supported unit $86,000
Financial Considerations
Annual Rental Deficiency: $44,760
Amortization Period: 35 years
Straight line value of deficiency: $ 1,566,600
(P/V @ 2.5% ; 35 years = $1,036,000)
Residential DCCs $750,000
Annual Residential Taxes $125,000
Exemption Period: 5 Years
5 year value of exemption $750,000
Total $1,500,000
City of Maple Ridge
TO: Her Worship Mayor Nicole Read MEETING DATE: July 18, 2017
and Members of Council
FROM: Chief Administrative Officer MEETING: Audit & Finance Committee
SUBJECT: Funding Model for Council endorsed Parks and Recreation Facilities
EXECUTIVE SUMMARY:
At the July 11, 2017 Council meeting, Council provided direction on which parks and recreation
facilities they are in support of advancing. Council also directed that public approval be sought
separately for each project, through the alternative approval process. As a result, a separate Loan
Authorization Bylaw will be produced for each investment. Prior to considering the Loan
Authorization Bylaws, Council asked for an updated funding model reflecting the approved projects
and that is the purpose of this report.
RECOMMENDATION(S):
That the Financial Plan be amended to include the capital projects, operating costs and associated
funding, as outlined in the report “Funding Model for Council endorsed Parks and Recreation
Facilities” dated July 18, 2017, and brought forward for Council’s consideration.
And that a separate Loan Authorization Bylaw be prepared for each project and brought forward for
Council’s consideration.
DISCUSSION:
a) Background Context:
The July 11, 2017 staff report titled “Parks, Recreation and Cultural Facilities – Public Engagement
Final Report”, provides detail on the process and history of the community consultation that has
taken place, leading up to Council’s decisions. That report and support material, totaling nearly 400
pages, is available on the Maple Ridge website under Council Meeting agenda addendums.
At the July 11, 2017 Council meeting, Council provided direction on which parks and recreation
facilities they are in support of advancing. Council also directed that public approval be sought
separately for each project, through the alternative approval process. As a result, a separate Loan
Authorization Bylaw will be produced for each investment. Prior to considering the Loan
Authorization Bylaws, Council asked for an updated funding model reflecting the Council-endorsed
additional park and recreation facility investments.
The updated financial model is attached to this report. It should be noted at the outset that many of
the costs are estimates at this time as detailed design work has not been done.
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The funding model calls for a capital outlay of about $55 million and the use of Community Amenity
Reserves and Albion Density Reserves in the first few years to assist with initial outlays. Annual debt
servicing costs, once long term debt is in place, are about $2.75 million a year and annual operating
costs are estimated at $1.4 million. These costs can be funded through the existing Parks and
Recreation Levy and a further annual property tax increase of 0.35% for seven years.
In light of the fact that detailed design work has not been done, the borrowing bylaws could include a
contingency to address unforeseen costs or scope changes. All such changes would be subject to
Council approval.
b) Citizen/Customer Implications:
The addition of these facilities will come at a cost of a further 0.35% annual property tax increase for
seven years. On a home that pays $2,000 in municipal property taxes, this equates to a total
increase of $50, phased in over seven years.
CONCLUSIONS:
The discussion around investment in Parks, Recreation and Cultural facilities has resulted in
direction to move forward with about $55 million in facilities, subject to the approval of the electoral.
This will be done through the alternative approval process for each facility.
"Original signed by Trevor Thompson"
Prepared by: Trevor Thompson
Manager of Financial Planning
"Original signed by Don Cramb"
Approved by: Don Cramb, Senior Recreation Manager
Recreation & Community Services
"Original signed by Paul Gill"
Approved by: Paul Gill, General Manager
Corporate & Financial Services
"Original signed by Wendy McCormick"
Approved by: Kelly Swift, General Manager
Parks, Recreation & Cultural Services
"Original signed by E.C. Swabey"
Concurrence: E.C. Swabey
Chief Administrative Officer
Funding Model for Council-Endorsed Parks and Recreation Facilities
(in $thousands)
2017 2018 2019 2020 2021 2022 2023 2024
Project
Leisure Centre Renovations $3.5M 3,500
Telosky Field ‐ $10M 7,500 2,500
Albion Community Centre ‐ $10M 5,000 5,000
Silver Valley Gathering Place $1M 1,000
Hammond Comm. Centre $2.5M 2,500
Ridge Canoe and Kayak Club $1M 1,000
MRSS Track Facility Upgrade $2.5M 2,500
Ice Sheet $25M 12,500 12,500
Subtotal new year 11,000 24,500 20,000 ‐ ‐ ‐ ‐ ‐
Cumulative 11,000 35,500 55,500 55,500 55,500 55,500 55,500 55,500
Use of Reserves (1,000) (4,000) (1,000) ‐ ‐ ‐ ‐ ‐
Borrowing
Short Term 10,000 30,500 49,500 49,500 ‐ ‐ ‐
Long Term ‐ ‐ ‐ ‐ 49,500 49,500 49,500 49,500
Total Borrowing 10,000 30,500 49,500 49,500 49,500 49,500 49,500 49,500
Debt Servicing Costs
Short Term 49 610 990 990 ‐ ‐ ‐ ‐
Annual Long Term (25 yr) debt costs ‐ ‐ ‐ ‐ 2,750 2,750 2,750 2,750
Debt Servicing 49 610 990 990 2,750 2,750 2,750 2,750
Operating
Telosky Field ‐ ‐ 250 250 250 250 250 250
Albion Community Centre ‐ ‐ 600 600 600 600 600 600
Other Neighbourhood Amenities ‐ ‐ 60 60 60 60 60 60
MRSS Track Fac. Upgrade ‐ ‐ 20 20 20 20 20 20
Ice Rink ‐ ‐ 500 500 500 500 500 500
Total Operating ‐ ‐ 1,430 1,430 1,430 1,430 1,430 1,430
Total Requirements 49 610 2,420 2,420 4,180 4,180 4,180 4,180
Sources of Funding
Existing P&R Levy 0.25% ‐ 900 1,107 1,321 1,543 1,772 2,010 2,256
Additional Taxation Requirements
Tax Increase 7 years 0.35% ‐ 280 570 870 1,180 1,501 1,834 2,178
Total Sources of Annual Funding 1,180 1,677 2,191 2,723 3,274 3,844 4,434
Reserves to Fund Balance
Annual Funding Shortfall (Surplus) 49 (570) 743 229 1,457 906 336 (254)
Use Reserves
Cumulative Use of Reserves 49 (521) 223 452 1,908 2,814 3,150 2,896
Plus initial outlay (CACs/Albion) 6,000
Max Draw Reserves 3,150
Total Reserve Draw Over Time 9,150