HomeMy WebLinkAbout2016 - 2020 Report and Bylaw.pdfCirculated separately
MAPLE RIDGE
British Columbia
mapleridge.ca City Of Maple Ridge
TO: Her Worship Mayor Nicole Read MEETING DATE: December 7, 2015
and Members of Council
FROM: Chief Administrative Officer MEETING: Committee of the Whole
SUBJECT: 2016-2020 Financial Plan Bylaw
EXECUTIVE SUMMARY:
The 2016-2020 Business and Financial Plans were presented to Council at public meetings held on
December 1, 2 and 3. The Financial Plan overview was presented followed by a public Question and
Answer period on December 3, which was streamed live over the internet. On December 4, after
considering the presentations, business plans, incremental adjustments and citizen feedback,
Council directed that a Financial Plan Bylaw, incorporating the recommendations in the Financial
Overview Report be brought forward for first and second reading.
The bylaw will be considered for Third Reading at a subsequent meeting to incorporate any changes
that Council may wish to make based on feedback from the public. Following this, the Final Reading
will occur at a separate meeting. Approval will take place over 3 meetings, rather than the historic
practice of 2 meetings, to allow for 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 2016-2020 Financial Plan Bylaw No. 7194 - 2015 be given first and second
readings.
DISCUSSION:
a) Background Context:
The 2016-2020 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:
• property tax increase for General Purposes of 2.1% in 2016, 1.9% per year for 2017
and 2018 and 2.0% per year for 2019 and 2020
• property tax increase for Infrastructure Sustainability of 0.50% in 2016 and 0.70%
per year for 2017 through 2020
• property tax increase for Parks & Recreation Improvements of 0.25% each year
• property tax increase for Drainage Improvements of 0.30% each year
• growth in property tax revenue (from new construction) of 2% each year
• Water Utility levy increase of 4.5% per year
1131
• Sewer Utility levy increase of 3.6% per year
• recycling levy increase of 0% in 2016 and 2.75% per year for 2017 through 2020
• growth costs as detailed on page 10 of the Financial Overview Report
• incremental adjustments as outlined on page 12 of the Financial Overview Report
• Capital Works Program totaling $30.7 million in 2016, $27.5 million in 2017, $23.7
million 2018, $29.5 million in 2019 and $26.3 million in 2020
• cost and revenue adjustments from pages 27 and 28 of the Financial Overview
Report, which reconciles the 2015-2019 Financial Plan with the 2016-2020
Financial Plan
In last year's financial plan, Council adopted an aggressive capital program and this plan
builds on that direction. The 2016-2020 Financial Plan includes a capital program of about
$138 million.
We have about $1.4 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 2016 is 2.0%.
Future budget amendments will include the actual growth revenue as well as projects that
were approved in 2015 and are still in progress. The previously approved funding sources
will also be included in the plan, placing no burden on 2016 property taxes.
b) Desired Outcome:
A financial plan that accurately reflects the planned expenditures and methods of funding
that is consistent with corporate strategic plans, policies and Council direction.
c) Strategic Alignment:
All departments submitted Business Plans which were prepared considering 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.
After considering the presentations, business plans, incremental adjustments and citizen
feedback, Council directed that a Financial Plan Bylaw, incorporating the recommendations
outlined in the Financial Overview Report, be brought forward for First and Second readings.
The bylaw will be considered for Third Reading at a subsequent meeting to incorporate any
changes that Council may wish to make based on feedback from the public. Following this,
the Final Reading will occur at a separate meeting. Approval will take place over 3 meetings,
rather than 2, to allow for additional time for public input.
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 over the phone, email and social media like Facebook and Twitter.
f) Alternatives:
In the event that this bylaw is not adopted, the City is not authorized to make any
expenditure other than those identified in the existing 2015-2019 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.
"Ori inal signed by Trevor Thompson'
Prepared by: Trevor Thompson, CPA, CGA
Manager of Financial Planning
"Original signed by Paul Gill"
Approved by: Paul Gill, BBA, CPA, CGA
GM Corporate & Financial Services
"Ori inal signed by Ted Swabey"
Concurrence: Ted Swabey
Chief Administrative Officer
CITY OF MAPLE RIDGE
BYLAW NO. 7194-2015
A bylaw to establish the five year financial plan for the years 2016 through 2020
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 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 2016-2020 Financial Plan Bylaw No. 7194-2015".
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 2016 through 2020.
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
ATTACHMENT: Statement 1, Statement 2 and Statement 3
CORPORATE OFFICER
Attachment to Maple Ridge 2016-2020 Financial Plan Bylaw 7194-2015
Statement 1
Consolidated Financial Plan 2016-2020 (in $ thousands)
REVENUES
Revenues
Development Fees
Developer Contributed Assets
Developer Cost Charges
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
2016 2017 2018 2019 2020
16,500
16,500
16,500
16,500
16,500
12,359
8,531
9,071
13,255
9,846
200
200
200
200
200
1,451
1,242
1,276
1,238
1,282
30,510
26,473
27,047
31,193
27,828
74,844
78,953
83,049
87,298
91,748
2,906
2,997
3,091
3,188
3,288
40,793
42,327
43,926
45,627
47,277
1,883
1,898
1,913
1,928
1,943
3,991
4,829
3,691
4,855
4,531
1,500
1,500
1,500
1,500
1,000
156,427
158,977
164,217
175,589
177,615
2,273 2,133 2,043 1,920 1,801
20,929 20,929 20,929 20,929 20,929
100,455 103,587 107,112 110,668 114,373
123,657
126,649
130,084
133,517
137,103
14,838
32,770
32,328
34,133
42,072
40,512
20,929
20,929
20,929
20,929
20,929
30,712
27,518
23,701
29,515
26,302
16,500
16,500
16,500
16,500
16,500
6,487
9,239
14,861
16,986
18,639
4,047 4,144 3,641 3,720 3,801
TOTAL REVENUES LESS EXPENSES
2,440
5,095
11,220
13,266
14,838
INTERNALTRANSFERS
Transfer from Reserve Funds
Capital Works Reserve
3,149
3,549
-
-
-
Equipment Replacement Reserve
3,540
1,813
3,245
2,311
1,857
Fire Department Capital Reserve
356
-
-
-
250
Land Reserve
-
-
Local Improvement Reserve
Sanitary Sewer Reserve
-
-
-
-
-
Transfer from Reserve Fund Total
7,045
5,362
3,245
2,311
2,107
Less :Transfer to Reserve Funds
Capital Works Reserve
3,886
2,862
4,334
4,139
3,336
Equipment Replacement Reserve
2,449
2,615
2,744
2,876
2,977
Fire Dept. Capital Acquisition
712
791
869
999
1,136
Land Reserve
5
5
5
5
5
Local Improvement Reserve
-
-
-
-
-
Sanitary Sewer Reserve
30
30
30
30
30
Total Transfer to Reserve Funds
7,082
6,303
7,982
8,049
7,484
Transfer from (to) Own Reserves
(501)
1,029
916
891
1,576
Transfer from (to) Surplus
2,904
3,125
5,567
6,637
7,885
Transfer from (to) Surplus & own Reserves
2,403
4,154
6,483
7,528
9,461
TOTAL INTERNAL TRANSFERS 2,440 5,095 11,220 13,266 14,838
BALANCED BUDGET
Attachment to Maple Ridge 2016-2020 Financial Plan Bylaw 7194-2015
Statement 2
Revenue and Property Tax Policy Disclosure
REVENUE DISCLOSURE
Revenue Proportions
2016
2017
2017
2019
2018
General Purpose
2019
1.90%
2020
2.00%
Development Fees Total
$ ('OOOs)
%
$ ('OOOs)
%
$ ('OOOs)
%
$ ('OOOs)
%
$ ('OOOs)
%
Revenues
1,883
1.2
1,898
1.2
1,913
1.2
1,928
1.1
1,943
1.1
Property Taxes
74,844
47.8
78,953
49.7
83,049
50.6
87,298
49.7
91,748
51.6
Parcel Charges
2,906
1.9
2,997
1.9
3,091
1.9
3,188
1.8
3,288
1.9
Fees & Charges
40,793
26.1
42,327
26.6
43,926
26.7
45,627
26.0
47,277
26.6
Borrowing Proceeds
0
0.0
0
0.0
0
0.0
0
0.0
0
0.0
Other Sources
37,884
24.2
34,700
21.8
34,151
20.8
39,476
22.5
35,302
19.9
Total Revenues
156,427
100.0
158,977
100.0
164,217
100.0
175,589
100.0
177,615
100.0
Other Sources include:
2016
2017
2018
2019
2020
General Purpose
2.10%
1.90%
1.90%
2.00%
Development Fees Total
30,510
19.5
26,473
16.7
27,047
16.5
31,193
17.8
27,828
15.7
Interest
1,883
1.2
1,898
1.2
1,913
1.2
1,928
1.1
1,943
1.1
Grants (Other Govts)
3,991
2.6
4,829
3.0
3,691
2.2
4,855
2.8
4,531
2.6
Property Sales
1,500
1.0
1,500
0.9
1,500
0.9
1,500
0.9
1,000
0.6
37,884
24.2
34,700
21.8
34,151
20.8
39,476
22.5
35,302
19.9
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 comprise 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.
2016
2017
2018
2019
2020
General Purpose
2.10%
1.90%
1.90%
2.00%
2.00%
Infrastructure Replacement
0.50%
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%
3.15%
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 comprise 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 2016-2020 Financial Plan Bylaw 7194-2015
Statement 2 (cont.)
Revenue and Property Tax Policy Disclosure
Fees & Charges
The Business Planning Guidelines call for an increase of 5% in fees as a guideline. Actual fee
increases vary depending on the individual circumstances, the type of fee and how it is calculated.
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 where it makes sense. Caution is used when considering debt 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 borrowing previously approved 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 2016 property tax revenue and updated rates will be included in a Financial Plan Amending
Bylaw that proceeds the Property Tax Rate Bylaw, as the 2016 property assessed values are not yet
finalized. For information purposes the 2015 distribution is included.
Property Tax Revenue Distribution
Property Class
Taxation Revenue
('OOOs)
Assessed Value
('OOOs)
Tax Rate
($/1000)
Multiple
(Rate/Res.Rate)
1
Residential
53,677
77.9%
12,004,518
91.1%
4.4713
1.0
2
Utility
540
0.8%
13,495
0.1%
40.0000
8.9
4
Major Industry
573
0.8%
17,230
0.1%
33.2682
7.4
5
Light Industry
2,808
4.1%
228,203
1.7%
12.3038
2.8
6
Business/Other
11,082
16.1%
900,715
6.8%
12.3038
2.8
8
Rec./ Non -Profit
38
0.1%
2,901
0.0%
13.1537
2.9
9
Farm
157
0.2%
4,905
0.0%
31.9560
7.1
Total
68,875
100%
13,171,968
100%
Attachment to Maple Ridge 2016-2020 Financial Plan Bylaw 7194-2015
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.
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. As part of the Financial
Planning discussions in December, 2013 Council authorized $70,000 each year for five years, 2014-
2018, to reduce the Major Industrial Class property tax rate. Council's direction for the 2016-2020
Financial Plan was to discontinue further reduction in property taxes as Council revisits priorities.
In reviewing the tax rates to ensure competitiveness, absolute rates, tax multiples and overall tax
burden are considered. The impact that assessed values have when comparing 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 2016-2020 Financial Plan Bylaw 7194-2015
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
misleading. This disclosure is required under the Local Government Act s. 937(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 2021 through 2035. Projects in these years typically exceed likely funding available.
Capital Works Program for 2021- 2035
(in $ thousands)
Capital Works Program 303,585
Source of Funding
Development Fees
Development Cost Charges 120,537
Parkland Acquisition Reserve -
Contribution from Others 6,635
127,173
Borrowing Proceeds 2,091
Grants 41,229
Transfer from Reserve Funds
Capital Works Reserve 13,163
Cemetery Reserve 115
Equipment Replacement Reserve -
Fire Department Capital Reserve 2,486
Recycling Reserve -
Transfer from Reserve Funds 15,764
Revenue Funds 117,328
Source of Funding 303,585