HomeMy WebLinkAbout2017 - 2021 Report and Bylaw.pdfMAPLE RIDGE
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TO: Her Worship Mayor Nicole Read and MEETING DATE: December 5, 2016
Members of Council
FROM: Chief Administrative Officer MEETING: Committee of the Whole
SUBJECT: 2017-2021 Financial Plan Bylaw
EXECUTIVE SUMMARY:
Municipal Council received presentations on the 2017-2021 Business Financial Plans and the
Financial Overview Report at public meetings held on November 28, 29 and 30. A Financial Plan
overview was presented again on the evening of November 30th. That meeting was livestreamed
over the Internet and a public question and answer period followed.
As part of its deliberations, Council voted on each of the incremental packages that were
recommended by staff and shown on Page 18 of the Financial Overview Report. Council supported
the staff recommendations with the following exceptions:
1. The Social Planning incremental request was approved contingent upon Council approving a
plan to be developed at a future Workshop.
2. Council also approved an additional incremental expense for increased security in the
downtown core ($20,000) to be funded from Accumulated Surplus.
Council's direction is incorporated into the attached Financial Plan Bylaw. Final consideration of this
bylaw will not occur until the New Year, thus allowing additional time for public input.
The Financial Plan Bylaw is a consolidated plan that includes the general revenue fund, the sewer
and water utility funds and the capital program. It is in a format that follows the legislated
requirements. This includes revenue and tax policy disclosure, the objectives and policies regarding
the proportions of revenue proposed to come from various funding sources, the distribution of
property taxes among property classes, and the use of permissive tax exemptions.
RECOMMENDATION(S):
That Maple Ridge 2017-2021 Financial Plan Bylaw No. 7300 - 2016 be given first, second and third
readings.
1131
DISCUSSION:
a) Background Context
The 2017-2021 Financial Plan was presented to Council at public meetings along with the
Business Plans from all areas. The Financial Plan Bylaw incorporates the following direction from
Council:
1. General Purpose Property Tax Increase: 1.90% in 2017 and 2018 and 2.00% per year in
2019 through 2021
2. Infrastructure Sustainability Property Tax Increase: 0.70% per year
3. Parks, Recreation and Culture Property Tax Increase: 0.25% per year
4. Storm Water Property Tax Increase: 0.30% per year
5. Water Levy Increase: 4.50% per year
6. Sewer Levy Increase: 3.60% per year
7. Recycling Levy Increase: 1.67% in 2017 and 2018 and 2.75% per year in 2019 through
2021
8. Growth in Property Tax Revenue Assumption: 2.00% per year
9. Incremental Adjustments (as outlined in pages 14 to 18 of the Financial Overview Report
2017 - 2021) were approved with the following amendments:
a. The incremental for additional staffing in Social Planning (page 15) was approved, but no
spending will occur until further Council discussion.
b. An additional incremental adjustment of $20,000 for security was approved, and will be
funded through Accumulated Surplus.
10. Provision for costs associated with growth as outlined on page 12 of the Financial Overview
Report, subject to available funding
11. Capital Works Program totaling $32.9 million 2017, $27.8 million in 2018, $24.9 million in
2019, $26.5 million in 2020 and $23.5 million in 2021
12. Cost and revenue adjustments from page 13 of the Financial Overview Report, which
reconciles the 2016-2020 Financial Plan with the 2017 - 2021 Financial Plan
The financial strategy for additional Parks, Recreation & Culture investments (discussed on page
38 of the Financial Overview Report) was presented to Council, and feedback from the
community will besought during the public consultation process.
We have about $1.6 billion invested in our infrastructure and it is important that we protect this
investment. This financial plan continues the dedicated funding strategy for sustaining our
infrastructure. As well, we are a growing community and along with that growth comes pressure
on our existing services. This financial plan provides funding to help meet growth related
demands. The funding for growth and for infrastructure sustainability are in line with Council's
Financial Sustainability Policies.
The amount of incremental property tax revenue from new construction will not be known until
property assessments are finalized. The growth assumption built into the financial plan for 2017
is 2.0%.
Future budget amendments will include the actual growth revenue as well as projects that were
approved in 2016 and are still in progress. The previously approved funding sources will also be
included in the plan, placing no burden on 2017 property taxes.
b) Desired Outcome
A financial plan that accurately reflects planned expenditures and methods of funding that are
consistent with corporate strategic plans, policies and Council direction.
c) Strategic Alignment
All departments submitted Business Plans which considered relevant strategic and master plans.
The Financial Plan reflects Council's Strategic Financial Sustainability Policies and Infrastructure
Funding Strategy.
d) Citizen/Customer Implications
The business plans have far-reaching citizen and customer implications. The Financial Plan
reflects the financial impact of the business plans. Property tax revenue and user fees are
planned to increase as described in the above discussion.
e) Statutory Requirements and Policy Implications
The financial plan has been prepared in accordance with statutory requirements and Municipal
financial policies. There are several requirements in the Community Charter for the Financial
Plan Bylaw, including: disclosure of the proportions of revenue proposed to come from various
funding sources, the distribution of property taxes among property classes, and the use of
permissive tax exemptions. Explicit policies and objectives in each of these areas are also
required. Maple Ridge's approach to business planning, property taxation policies and other
financial policies have addressed all these reporting requirements. The attached bylaw includes
this information.
Public consultation is an important and legislated component of financial plan preparation.
Regular feedback and interaction with the public is also considered when business plans are
developed. The business planning presentations were open to the public; there was also a live
question and answer period where comments and questions were accepted in person as well as
by phone, email and social media like Facebook and Twitter.
f) Alternatives
Council is required to adopt a five year Financial Plan Bylaw prior to May 15 each year. There are
very tangible benefits to adopting the bylaw early in the year. Work plans can proceed with more
certainty and construction projects can be tendered to secure companies availability in seasonal
construction windows, maximizing competition and likely reducing costs.
In the event that this bylaw is not adopted, the City is not authorized to make any expenditures
other than those identified in the existing 2016-2020 Financial Plan Bylaw. This will require
departments to curtail or delay expenditures and only proceed with capital projects that were
identified in the previous financial plan.
CONCLUSIONS:
The Financial Plan is a multi-year planning, reviewing and reporting tool that represents Council's
priorities and commitment to providing quality services to the residents of Maple Ridge. The
Financial Plan provides a forecast of the financial resources that are available to fund operations,
programs and infrastructure for the five year period.
The Financial Plan Bylaw is routinely amended in late April or early May to include the projects that
were approved but not completed in the prior year. The change also includes an update to reflect the
actual property tax revenue due to the amount of real growth.
"Original signed by C.K. Lee"
Prepared by. C.K. Lee, Financial Analyst
"Original signed by Trevor Thompson"
Approved by. Trevor Thompson, Manager of Financial Planning
"Original signed by Trevor Thompson"
Approved by. Paul Gill, General Manager
Corporate and Financial Services
"Original signed by Christine Carter"
Approved by. Frank Quinn, General Manager,
Public Works & Development
"Original signed by David Boag"
Approved by. Kelly Swift, General Manager,
Parks, Recreation & Cultural Services
"Original signed by E.C. Swabey"
Approved by. E.C. Swabey
Chief Administrative Officer
CITY OF MAPLE RIDGE
BYLAW NO. 7300-2016
A bylaw to establish the five year financial plan for the years 2017 through 2021
WHEREAS, through a public process in an open meeting the business and financial plans were
presented;
AND WHEREAS, the public will have the opportunity to provide comments or suggestions with respect
to the financial plan;
AND WHEREAS, Council deems this to be a process of public consultation under Section 166 of the
Community Charter;
NOW THEREFORE, the Council for the City of Maple Ridge enacts as follows:
1. This Bylaw may be cited as "Maple Ridge 2017-2021 Financial Plan Bylaw No. 7300-2016".
2. Statement 1 attached to and forming part of this bylaw is hereby declared to be the Consolidated
Financial Plan of the City of Maple Ridge for the years 2017 through 2021.
3. Statement 2 attached to and forming part of the bylaw is hereby declared to be the Revenue and
Property Tax Policy Disclosure for the City of Maple Ridge.
4. Statement 3 attached to and forming part of the bylaw is hereby declared to be the Capital
Expenditure Disclosure for the City of Maple Ridge.
READ a first time the
day of
20
READ a second time the
day of
20
READ a third time the
day of
20
PUBLIC CONSULTATION completed on the day of 20
ADOPTED the day of 20 .
PRESIDING MEMBER
CORPORATE OFFICER
ATTACHMENT: Statement 1, Statement 2 and Statement 3
Attachment to Maple Ridge 2017-2021 Financial Plan Bylaw 7300-2016
Statement 1
Consolidated Financial Plan 2017-2021 (in $ thousands)
2017 2018 2019 2020 2021
Revenues
Development Fees
Developer Contributed Assets
Developer Cost Charges
Developer Specified Projects
Parkland Acquisition
Contributions from Others
Development Fees Total
Property Taxes
Parcel Charges
Fees & Charges
Interest
Grants (Other Govts)
Property Sales
Total Revenues
EXPENDITURES
Operating Expenditures
Interest Payments on Debt
Amortization Expense
Other Expenditures
Total Expenditures
ANNUAL SURPLUS
Add Back: Amortization Expense (Surplus)
Less: Capital Expenditures
Less: Developer Contributed Capital
CHANGE IN FINANCIAL POSITION
OTHER REVENUES
Add: Borrowing Proceeds
OTHER EXPENDITURES
Less: Principal Payments on Debt
20,000
20,000
20,000
20,000
20,000
4,478
1,189
5,703
8,906
7,447
200
200
200
200
200
1,300
1,338
1,307
1,329
1,321
25,978
22,727
27,210
30,435
28,968
78,526
82,600
86,828
91,255
95,917
3,012
3,085
3,181
3,282
3,385
40,256
41,793
43,409
44,994
46,664
1,898
1,913
1,928
1,943
1,958
4,500
3,899
3,709
4,168
4,379
1,500
1,500
1,500
1,000
-
155,670
157,517
167,765
177,077
181,271
2,006
1,940
1,815
1,687
1,554
19,780
19,780
19,780
19,780
19,780
103,333
106,439
109,898
113,589
117,317
125,119
128,159
131,493
135,056
138,651
30,551
29,358
36,272
42,021
42,620
19,780
19,780
19,780
19,780
19,780
32,952
27,831
24,859
26,520
23,530
20,000
20,000
20,000
20,000
20,000
(2,621)
1,307
11,193
15,281
18,870
6,000 7,000
3,706 3,723 3,803 3,886 3,972
TOTAL REVENUES LESS EXPENSES (327) 4,584 7,390 11,395 14,898
INTERNALTRANSFERS
Transfer from Reserve Funds
Capital Works Reserve
3,849
150
150
150
150
Equipment Replacement Reserve
2,298
3,921
2,307
1,671
1,603
Fire Department Capital Reserve
585
-
-
-
-
Land Reserve
-
Local Improvement Reserve
Sanitary Sewer Reserve
-
-
-
-
-
Transfer from Reserve Fund Total
6,732
4,071
2,457
1,821
1,753
Less :Transfer to Reserve Funds
Capital Works Reserve
1,915
3,364
3,803
2,292
2,626
Equipment Replacement Reserve
2,760
2,893
3,028
3,192
3,358
Fire Dept. Capital Acquisition
783
861
991
1,127
1,267
Land Reserve
5
5
5
5
5
Local Improvement Reserve
-
-
-
-
-
Sanitary Sewer Reserve
30
30
30
30
30
Total Transfer to Reserve Funds
5,493
7,153
7,857
6,646
7,286
Transfer from (to) Own Reserves
(74)
(271)
(826)
(1,303)
(1,109)
Transfer from (to) Surplus
(838)
(1,231)
(1,164)
(5,267)
(8,256)
Transfer from (to) Surplus & own Reserves
(912)
(1,502)
(1,990)
(6,570)
(9,365)
TOTAL INTERNAL TRANSFERS
327
(4,584)
(7,390)
(11,395)
(14,898)
BALANCED BUDGET
Attachment to Maple Ridge 2017-2021 Financial Plan Bylaw 7300-2016
Statement 2
Revenue and Property Tax Policy Disclosure
REVENUE DISCLOSURE
Revenue Proportions
2017
2018
2018
2020
2019
General Purpose
2020
1.90%
2021
2.00%
Development Fees Total
$ ('OOOs)
%
$ ('OOOs)
%
$ ('OOOs)
%
$ ('OOOs)
%
$ ('OOOs)
%
Revenues
1,898
1.2
1,913
1.2
1,928
1.1
1,943
1.1
1,958
1.1
Property Taxes
78,526
48.6
82,600
50.2
86,828
51.8
91,255
51.5
95,917
52.9
Parcel Charges
3,012
1.9
3,085
1.9
3,181
1.9
3,282
1.9
3,385
1.9
Fees & Charges
40,256
24.9
41,793
25.4
43,409
25.9
44,994
25.4
46,664
25.7
Borrowing Proceeds
6,000
3.7
7,000
4.3
-
-
-
-
-
-
Other Sources
33,876
21.0
30,039
18.3
34,347
20.5
37,546
21.2
35,305
19.5
Total Revenues
161.670
100
164.517
100
167.765
100
177.077
100
181.271
100
Other Sources include:
2017
2018
2019
2020
2021
General Purpose
1.90%
1.90%
2.00%
2.00%
Development Fees Total
25,978
16.1
22,727
13.8
27,210
16.2
30,435
17.2
28,968
16.0
Interest
1,898
1.2
1,913
1.2
1,928
1.1
1,943
1.1
1,958
1.1
Grants (Other Govts)
4,500
2.8
3,899
2.4
3,709
2.2
4,168
2.4
4,379
2.4
Property Sales
1,500
0.9
1,500
0.9
1,500
0.9
1,000
0.6
-
-
33,876
21.0
30,039
18.3
34,347
20.5
37,546
21.2
35,305
19.5
OBJECTIVES & POLICIES
Property Tax Revenue
Property tax revenue is the City's primary revenue source, and one which is heavily reliant on the
residential class. Diversification of the tax base and generation of non -tax revenue are ongoing
objectives, outlined in Financial Sustainability Policy 5.52 section 6.
The Financial Plan includes property tax increases that are as listed below:
Additional information on the tax increases and the cost drivers can be found in the most recent
Financial Plan Overview Report. Specific policies discussing the tax increases are included in the
Financial Sustainability Plan and related policies which were adopted in 2004.
Property tax revenue includes property taxes as well as grants in lieu of property taxes.
Parcel Charges
Parcel charges are comprised of a recycling charge, a sewer charge and on some properties, a local
area service or improvement charge. Parcel charges are a useful tool to charge all or a subset of
properties for a fixed or variable amount to support services. Unlike property taxation the variable
amount does not need to be related to property assessment value, but can be something that more
accurately reflects the cost of the service.
2017
2018
2019
2020
2021
General Purpose
1.90%
1.90%
2.00%
2.00%
2.00%
Infrastructure Replacement
0.70%
0.70%
0.70%
0.70%
0.70%
Parks & Recreation
0.25%
0.25%
0.25%
0.25%
0.25%
Drainage
0.30%
0.30%
0.30%
0.30%
0.30%
Total Property Tax Increase
3.15%
3.15%
3.25%
3.25%
3.25%
Additional information on the tax increases and the cost drivers can be found in the most recent
Financial Plan Overview Report. Specific policies discussing the tax increases are included in the
Financial Sustainability Plan and related policies which were adopted in 2004.
Property tax revenue includes property taxes as well as grants in lieu of property taxes.
Parcel Charges
Parcel charges are comprised of a recycling charge, a sewer charge and on some properties, a local
area service or improvement charge. Parcel charges are a useful tool to charge all or a subset of
properties for a fixed or variable amount to support services. Unlike property taxation the variable
amount does not need to be related to property assessment value, but can be something that more
accurately reflects the cost of the service.
Attachment to Maple Ridge 2017-2021 Financial Plan Bylaw 7300-2016
Statement 2 (cont.)
Revenue and Property Tax Policy Disclosure
Fees & Charges
Fees should be reviewed annually and updated if needed. Recent fee amendments include
recreation fees, development application fees, business license fees and cemetery fees. A major
amendment to the Development Costs Charges (DCC), recommended no more frequently than every
five years, was completed in 2008. Minor DCC amendments are done more frequently. Some fees
are used to offset the costs of providing specific services. The utility fees are reviewed annually with
a view towards using rate stabilization practices to smooth out large fluctuations in rates, as set out
in the Business Planning Guidelines.
Borrowing Proceeds
Debt is used when it makes sense, and with caution as it commits future cash flows to debt
payments, restricting the ability to use these funds to provide other services. The source of the debt
payments needs to be considered as does the justification for advancing the project. More
information on previously approved borrowing can be found in the most recent Financial Plan
Overview report.
Other Sources
This will vary greatly year to year as it includes:
• Development fees which fund capital projects from the DCC Reserve
• Contribution from others in relation to capital
• Grants which are sought from various agencies and may be leveraged with City funds
PROPERTY TAX DISCLOSURE
The 2017 property tax revenue and updated rates will be included in a Financial Plan Amending
Bylaw that proceeds the Property Tax Rate Bylaw, as the 2017 property assessed values are not yet
finalized. For information purposes the 2016 distribution is included.
Property Tax Revenue Distribution
Property Class
Taxation Revenue
('OOOs)
Assessed Value
('OOOs)
Tax Rate
($/1000)
Multiple
(Rate/Res.Rate)
1
Residential
56,532
78.3%
12,918,297
91.2%
4.3761
1.00
2
Utility
541
0.8%
13,516
0.1%
40.0000
9.14
4
Major Industry
591
0.8%
17,291
0.1%
34.1952
7.81
5
Light Industry
2,760
3.8%
232,323
1.7%
11.8801
2.71
6
Business/Other
11,565
16.0%
973,520
6.9%
11.8801
2.71
8
Rec./ Non -Profit
39
0.1%
2,577
0.0%
15.2783
3.49
9
Farm
164
0.2%
4,852
0.0%
33.7082
7.70
Total
72,192
100%
14,162,376
100%
Attachment to Maple Ridge 2017-2021 Financial Plan Bylaw 7300-2016
Statement 2 (cont.)
Revenue and Property Tax Policy Disclosure
PROPERTY TAX DISCLOSURE
Objectives & Policies
Property taxes are the City's largest source of revenue and are contained by efficient business
practices. Annual business planning practices are the mechanism for resource allocation decisions.
The City's Financial Sustainability Policy section 6 discusses the necessity of diversifying the tax
base. Development of employment-related properties is one method of diversification; therefore a
key performance measurement in Strategic Economic Initiatives tracks the increased investment
and development of non-residential properties.
A policy in the Financial Sustainability Plan that calls for stable tax increases and the adoption of the
annual increase early in the prior year in the Business Planning Guidelines provides citizens with a
more stable and predictable set of cost increases. In some cases costs are phased in over multiple
years to stay within the set tax increases.
Property Tax Rates
It is policy to adjust property tax rates annually to negate the impact of fluctuations in the market
values of properties. Tax rates are reduced to negate the market increases. Property tax increases
are then applied at the same relative increase for all classes, unless legislation restricts the rates, as
with Class 2, Utility.
The Business Class and Light Industry Class properties have the same tax rate and are treated as a
composite class when setting the tax rates, as the types of businesses in each class are similar. In
2016, the increase was reduced from 3.15% to 1.85% to reduce the relative property tax burden for
these properties.
A review was done on the Major Industry Class rates and the recommendation from the Audit and
Finance Committee and Council was a 5% property tax reduction in both 2009 and 2010 to support
additional investments in the subject property and to keep rates competitive. In 2014 and 2015,
property taxes charged to major industrial class properties were reduced by $70,000 in each year.
In reviewing tax rates to ensure competitiveness, absolute rates, tax multiples and overall tax burden
are considered. The impact that assessed values have when comparing to other geographical areas
must be considered in a comparison of tax rates.
Permissive Tax Exemptions
Council has set policies around the use of permissive tax exemptions. These are Council Policies
5.19 through 5.24. These policies discuss Churches, Community Halls, Heritage Sites, Homes for the
Care of Children and the Relief of the Aged, the Poor, the Disabled and the Infirm, Municipal
Recreational Services, Private Hospitals and Daycares, Private School and Youth Recreation Groups.
Revitalization Tax Exemption Program
The Employment Land Investment Incentive Program is designed to encourage job creation by
supporting private investment in buildings and infrastructure on identified "employment lands".
More information on this tax exemption can be found on our website.
Attachment to Maple Ridge 2017-2021 Financial Plan Bylaw 7300-2016
Statement 3
Capital Expenditure Disclosure
The sole purpose of this statement is to meet legislative requirements and highlight the value of the
DCC program; no other conclusions should be drawn from the figures as the information could be
misconstrued. This disclosure is required under the Local Government Act s. 560 (2); capital costs
attributable to projects to be partially funded by Development Cost Charges (DCC) must be included
in the financial plan. The DCC program includes projects as far out as 2035 so the capital
expenditures must be extended to match. Certain types of projects are not planned past the five year
time horizon of the financial plan. Much less scrutiny is given to projects that are planned in years
2022 through 2035. Projects in these years typically exceed likely funding available.
Capital Works Program
Source of Funding
Development Fees
Capital Works Program for 2022 - 2035
(in $ thousands)
336,703
Development Cost Charges 145,877
Parkland Acquisition Reserve -
Contribution from Others 3,304
149,181
Borrowing Proceeds -
Grants 42, 664
Transfer from Reserve Funds 18,792
Revenue Funds 126,066
187,522
336,703