PROPOSED CORPORATE BUSINESS PLAN

Transcription

1 PROPOSED CORPORATE BUSINESS PLAN Executive Summary The City of Pitt Meadows has operated under the direction of Council approved annual Business Plans for the past 12 years. The plans are developed to carry out Council s priorities and goals as reflected in the Strategic Plan and communicated to staff. The annual business planning process affords us the opportunity to step back and evaluate our external environment and internal processes, and adjust goals, service levels, and programs in the context of our Strategic Plan and progressive financial planning. The proposed Corporate Business Plan and associated Department Business Plans provide a comprehensive overview of how and where the City plans to allocate resources to provide good value for taxpayers in a disciplined, coordinated and transparent way. A significant focus of this plan is on maintaining existing services, including replacing and improving our capital infrastructure. The cost to deliver civic programs and services such as utility construction, recreation programs, and police services tend to increase more than consumer inflation (as measured by the Consumer Price Index) because large municipal expenditures for items such as gasoline, equipment, road repair services, and construction materials are impacted by fluctuation in market demand and world prices. Other impacts, such as regulatory compliance also have an impact. The City has limited sources of revenue to pay for all the services it provides. A significant portion of the City s City of Pitt Meadows - Proposed 2015 Business Plan Pg. 1

2 revenue does not increase at the same rate as expenditures. That means the City must rigorously pursue cost efficiencies and find innovative ways to deliver services. The 2015 Business Planning Process engaged staff at all levels and challenged them to bring forward their best thinking on how to strike a balance between meeting service expectations and achieving fiscal restraint, as outlined in the following documents. This is an exciting, but demanding time, and staff remains flexible to adjust these plans in any way that Council directs. Aligning our Priorities The Strategic Plan The Community Charter mandates Council to provide services, laws and other matters for the community s benefit, and also to provide financial stewardship over its finances, assets and resources. Strategically planning the delivery of City services and other matters of community is essential to proper and sustainable allocation of scarce resources. In 2012, Council approved the City s Corporate Strategic Plan which sets the direction and priorities for how we will spend taxpayer s dollars for that Council s term. It provides quality programs and services for our citizens by organizing effort within five strategic pillars: Community Building & Engagement develop a healthy community that promotes liveable neighborhoods & citizen well-being Economic Development & Land Use create a diverse local economy, maintain a compact urban environment, and balance financial, social & environmental sustainability Transportation plan and build a multi-modal transportation system incorporating alternative options to promote active lifestyles Public Works & Safety deliver programs and services to protect the safety of our citizens and the integrity of our infrastructure Governance & Policy ensure our strategies reflect the needs of the community and council s commitment to principled governance Council also provides more specific guidance by developing and updating a list of strategic priorities for Administration to focus their efforts on making progress within a particular fiscal year. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 2

3 For the 2014/2015 term, the following strategic priorities were identified by Council: Diversify tax base by encouraging non-residential growth and create local jobs Pursue/lobby for improvements to the Lougheed corridor to the benefit of Pitt Meadows Preserve the Paid-on-Call model for fire services Provide efficient & effective organization capacity Maintain and enhance our potable water system Ensure long term financial sustainability This combination of Council strategy and priorities serve as the foundation for developing annual business plans and budgets that guide how we will deliver programs and services to our residents in The Role of the Business Plan The Proposed Corporate Business Plan, and associated Department Business Plans, are a series of documents that bridge the Strategic Plan with day-to-day work plans and budgets. It allows the City to look ahead, focus on key activities, allocate resources, prepare for opportunities and risks, and set priorities accordingly. Most important, the Business Plans ensure that all City Departments are moving in the same direction. Departments are asked to prepare Business Plans which have two primary purposes: a communication tool to solicit Council s feedback and direction on service delivery so that we clearly understand and meet their expectations; and a planning tool to achieve the objectives of Council in an organized and efficient manner. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 3

4 Every year difficult decisions have to be made around which initiatives to fund, what the appropriate service levels should be and to chart the immediate direction of the organization through the Business Plans. The ultimate goal of this process is always to be cognizant of the long term viability of the community, to spend tax dollars wisely, and to maintain the quality of life for all of our residents. When deliberating business plans and budgets Council must constantly weigh different community needs. Increases in service levels must be matched by corresponding revenues. By law, a municipality cannot spend more funds than it takes in and the City doesn t have the financial resources or the organizational capacity to do everything at once. Therefore, choices need to be made on service levels and taxation and this is decided through the business planning process. While this is a challenge, it also presents an opportunity for the organization to become more resilient, to improve, and to do business differently where efficiencies can be achieved Proposed Business Plan and Approach The Proposed Business Plan and have been fully integrated with the objective of laying out information in a transparent manner to allow Council and interested stakeholders the opportunity to understand how their tax dollars are being spent. The City s business planning process ensures resources are allocated to the various programs and services within these Departments and that resourcing is tied to clear and achievable plans. The business planning and budgeting process is transparent and provides City Council and residents with information on how City funds are used. It allows for accountability in service delivery, while maintaining a focus on long term sustainability. The proposed Business Plan attempts to provide a balance between citizens service expectations and fiscal restraint. It considers the increased cost pressures to deliver services that meet the service demands of the community, balanced against reasonable tax impacts. The Business Plans outline the achievements, key challenges, major initiatives planned within each Department and the City s major Service Delivery Partners: City Departments Office of the CAO & Legislative Services Operations & Development Services Finance & Facilities Human Resources, Communications & IT Fire and Rescue Services Service Delivery Partners Ridge Meadows Parks & Leisure Services RCMP Economic Development Corporation Fraser Valley Regional Library City of Pitt Meadows - Proposed 2015 Business Plan Pg. 4

5 Council s emphasis on cost containment together with modest short term growth forecasts has been reflected in the conservative approach taken to planning and budgeting for The following principles were applied to the development of the 2015 business plans and budgets: Business Plans must be aligned with the Corporate Strategic Plan Base budgets are to be prepared to maintain existing service levels Cost increases in excess of inflation are to be estimated and highlighted to Council New or enhanced service levels are to be identified separate from the base budget as Decision Packages with justification for Council consideration Capital planning must balance the need for replacement against available funding and the reserve s long-term health Increased annual reserve provisions to ensure stable and adequate infrastructure, facilities and equipment replacement Only conservative & sustainable revenues are to be incorporated into the budget Taxation from growth (assessment from new construction) will be allocated as follows: to offset operating costs related to growth; to fund growth related projects; and to fund long-term strategies identified by Council. The use of debt as a funding source only to be used when no other funding source is available and only with Council approval City of Pitt Meadows - Proposed 2015 Business Plan Pg. 5

6 Significant Issues and Trends Affecting the Organization Significant issues and financial pressures that need to be addressed in the 2015 budget: Growth and the demand for services Current economic climate; pressure to do more with less Increased costs for replacement and renewal of aging City infrastructure Higher labour costs and payroll deductions for EI, CPP and Pension Plan Remaining environmentally responsible (green house gas and waste reductions) Stricter federal and provincial legislation that require more training, stewardship and reporting Increasing demand for information due to internet/social media Increased downloading from federal and provincial governments, like hazardous spill response, noxious weed control and social services City s long term strategy to reduce reliance on residential property taxes Very lean organizational structure that is reliant on several service delivery partners Aging workforce and competitive job market are creating internal recruitment and retention challenges Increasing costs of regional and other government services 2014 Achievements Highlights from across the organization: Once in a Hundred Years - 45,000 individuals attending over 17 events to celebrate the City s 100th birthday Centennial Legacy projects including: a children s activity book, a new Centennial stage, heritage exhibit panel and the Museum memory band, student s time capsule, Centennial tree, veteran banners, may poles, centennial mural and other artwork Increased budget process transparency and approval of 2014 Business Plans & Provision of regular quarterly reports to Council Adoption of a new Corporate IT Strategic Plan Completion of the Parks & Leisure Joint Services Agreement Review Integration of automatic water meter data with the City s financial system City of Pitt Meadows - Proposed 2015 Business Plan Pg. 6

7 Unqualified 2013 audit opinion Tender issued and contract awarded for the renovation/addition to the public works yard Website refresh a cleaner look, better search capability, user-centric links to key content/pages and full mobile capabilities are underway Continued development at Fire Department training ground Honorary Fire Department Member - Ring of Honor presentation night Completed vast majority of initial airport facility fire inspections Transitioned emergency program coordination to new position at City Hall Grand opening of the newly renovated Community Police Office (CPO) Completion of $500,000 renovation of the forensic identification rented space in the RCMP detachment building paid for by the Integrated Forensic Identification Section (IFIS) Integrated Team Inventory tracking software (Wisetrack) implemented for RCMP asset control and fleet management Closed capture video monitoring installation in the new Community Police Office Implementation of electronic fingerprinting at Pitt Meadows Community Police Office (LiveScan) for processing of criminal records checks Acquired marine transport (police boat) in spring 2014 that now provides enhanced policing on waterways funded by Province of BC Official partner in Real Time Intelligence Center (RTIC) to provides a multijurisdictional real time analysis of violent crimes CartêGraph continued work on the implementation of our infrastructure asset management system to improving maintenance planning and supporting analysis for preventative maintenance Identification of Council s top 7 corporate priorities for the 2014/2015 term Adoption of a new Council orientation policy & new updated Council orientation manual for the Council North Fraser education forum & labour market research project supported by $110,000 grant from the Provincial Government Presentation on international investment and attraction best practises presented at the 2014 Union of BC Municipalities convention Canadian Pacific rail crossing at Harris Road upgraded City of Pitt Meadows - Proposed 2015 Business Plan Pg. 7

8 Proposed Corporate Plan Installation of automated trash racks at the McKechnie drainage pump station Baynes Road pump station overhauled with the installation of new pumps and motor controls Backyard hens pilot program implemented Social mandate report completed Comprehensive parking strategy adopted Phase 1 of the Cross Connection Control program (severe risk connections) completed Bylaw revisions adopted to strengthen the City s regulations regarding dangerous dogs, dog care and control in general Municipal operations are only 60 tonnes away from being carbon neutral The City partnered with Maurice Sports, one of our local businesses, to do a shoreline cleanup in July Development of new and expanded Occupational Health and Safety program 2015 Proposed Summary The annual budget is an estimate of anticipated revenues and expenses required to provide municipal services for a specific fiscal year and forecast the financial requirements of activities and events to be carried out by municipal staff and Council. Each year, the municipality strives to balance the needs of the municipality while mitigating the impact on the tax levy. This is achieved by examining expenditures for sustainable savings and identifying opportunities to enhance other sources of revenue such as: assessment increases from growth, fees and charges, reserves and Provincial and Federal funding. These other types of funding are applied first, leaving the remainder of funding from property taxes to balance the budget. The City has five separate funds a General Fund and four Utility Funds (Water, Sewer, Solid Waste, and Storm Drainage) that contain operating and capital budgets needed to deliver various services to the community. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 8

9 General Fund Covers expenses for general government related to the day to day operations of the City including: essential services, such as: fire services, police services, emergency response and transportation; priority services, such as: parks, recreation, bylaw enforcement, library services, development approval, subdivision control and economic development; and support services, such as: personnel, supplies and materials to assist the essential and priority services in their delivery of services to the public. It also provides annual reserve provisions for the maintenance, upgrade and replacement of the City s roads, facilities and other infrastructure needed to deliver these services. Utility Funds (Water, Sewer, Solid Waste & Storm Drainage) Covers expenses related to essential services including: the provision of safe drinking water, sewage collection, solid waste and storm drainage, each of which contains operating and capital costs to achieve sustainable service delivery models. All Funds Combined The City of Pitt Meadows 2015 budget has capital and operating investments of approximately $37.5 million, comprised of: $22.9 million for general government operations $9.0 million for utility operations $5.6 million for capital projects General Fund Summary Revenues The most important driver of City revenue is economic activity which affects the number of taxable properties, influences construction activity related fees and charges, and impacts demands for City services. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 9

10 2015 Operating Revenue Sources 2014: 77% Taxation 18% Fees & Charges 2% Grants 3% Reserve Transfers Property Taxation Property taxation comprises a significant portion (75%), of the City s operating revenues. Property taxes are calculated in two steps. The BC Assessment Authority calculates the total assessed value of properties within the City, and the City determines a factor called the mill rate to be applied to the assessed values in order to generate enough revenues to balance the budget. For 2015, a 1% property tax increase (for all classes) raises approximately $160,000. Growth in property tax revenue from new development (referred to as non-market change) in 2015 is estimated at $200,000. While there was relatively good growth in new construction in Pitt Meadows in 2013, an error by BC Assessment Authority meant the City was not able to collect approximately $153,000 in revenue, which required correction over two years in 2014 and This significantly impacted revenue expected from new construction for 2014 and Also, due to the Province adopting Bill 8, the City will lose taxation revenue as specific farm buildings are moved from Class 1 (Residential) into Class 9 (Farm). This loss in taxation revenue will have an impact on the other classes and properties in the community. Property taxation is also susceptible to assessment appeals. Any appeals, if successful, may result in supplementary rolls throughout the year which could reduce future taxation revenue. In 2015, there are two outstanding appeals that may adversely affect the $200,000 estimate for growth in property tax revenue from new development, depending on the outcome and the timing for when the appeals are finalized. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 10

11 In 2014, BC Assessment Authority conducted a thorough review of the City s industrial properties and, based on preliminary information, they have determined that the assessed values of approximately 35 properties will significantly rise which will trigger a redistribution of property taxation revenues. The 2015 budget includes a proposed general tax increase of 2.85% or $50.50 to the average single family home in Pitt Meadows. The increase includes a 0.6% allocation to the repair and replacement of existing infrastructure and a 1.0% allocation for strategic capital. Taxation Breakdown It is important to note that the City collects from taxpayers on behalf of Outside Agencies, including the Province on behalf of the School Board, Metro Vancouver, the Municipal Finance Authority, BC Assessment Authority, and TransLink - the Regional Transportation Authority. Twenty-eight percent (28%) of all taxes collected are done so on behalf of other agencies. The City has no control over these costs and directly remits all funds collected to these agencies. Non-taxation Revenue Twenty-one percent (21%) of the City s operating revenue is generated from other fees and charges, largely associated with development activity. As with most municipalities, the City budgets development-related revenues conservatively as they are recognized as being an unstable source of funding. As part of the business planning process, the City reviewed opportunities to enhance other revenue streams including leveraging City assets by leasing facility space to a daycare provider and to increase budgeted revenues in areas like dog and business licences, as well as electronic billboard advertising. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 11

12 Transfer from Reserves Since 2009, a $200,000 transfer from the Operating Reserve has been budgeted to compensate for the reduction in building permit revenue that occurred in 2009 as a result of a downturn in the economy. Due to the volatility of development revenues and the heavy reliance on annual surpluses to fund this transfer, the 2014 Business Plan identified the fact that this is not a sustainable budget practice and the need to eliminate the reserve subsidy as quickly as possible. With this in mind, the year financial plan reduces the transfer by $150,000 in 2015 and a further $50,000 in 2016 so that the reliance on this transfer is eliminated and the Operating Reserve can begin rebuilding to an acceptable level. In 2013, a property on Airport Way was reclassified by the BC Assessment Authority (BCAA) to Farming class 9 on the assessment roll but the property was not taken off of the roll in Business class 6. Basically, BCAA doubled-up the assessed value of the same property which meant the City was expecting to collect more taxes than it could in This resulted in the City needing to find $153,000 in revenue, or nearly 1% tax, to make up for this mistake. In order to minimize the impact of this error on taxpayers, funds from the Operating Reserve were used in 2013 and to a lesser extent in 2014 until the taxation level could be corrected within the 2015 budget. The year financial plan utilizes the Operating Reserve to phase-in taxation funding for an unbudgeted reserve transfer which designates annual TransLink funding for future Major Road Network (MRN) maintenance or rehabilitation expenditures. Other amounts are drawn in from the Operating Reserve, on an as needed basis, for various projects and programs that are of a one-time nature or have been carried forward from a prior year. Expenses The General Fund operating budget deals with the recurring and ongoing costs of providing services. These services include road maintenance, snow removal operations, fire and emergency response services, parks maintenance, recreation programming & facility operations, development approvals, subdivision control, bylaw enforcement and library services. It also includes financial planning measures such as debt and annual reserve provisions for general infrastructure replacement and capital projects. As a result of adopting a zero-based budget approach that involved rebuilding budgets from the ground up and sound rationale for all budget increases, all City Departments have limited their total budget request to a combined 0.49% tax increase or $8.34 to the average single family home. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 12

13 The City s three Service Delivery Partners: Fraser Valley Regional Library, Parks & Leisure Services, and Police have requested a combined increase of 1.59% or $27.06 to the average single family home. To help the City pay for its operating and capital investments, the 2015 proposed budget is proposing a 2.85% municipal property tax increase, 1.25% taxation from new development and 0.59% net revenue enhancements, 2.61% of which is proposed for allocation to reserves to take care of existing City infrastructure, the construction of major future capital projects and reduced reliance on Operating Reserve funding. A homeowner with a single-family detached home with a market value assessment of $460,000 (based on 2014 assessments) will see an increase in municipal property taxes by approximately $50.50 annually, or $4.21 per month. The year over year comparison shows an overall increase of $455,400 or 2.85% in base budget expenditures. The negative numbers in the following table represents a reduction to taxes, whereas positive numbers mean an increase to taxes. The drivers of the 2.85% tax increase are summarized below: City of Pitt Meadows - Proposed 2015 Business Plan Pg. 13

14 City Department Expenses Combined, City departments have held their 2015 budgets near 2014 levels with a small additional tax fund request of $78,300, equating to 0.49% or $8.34 increase to the average single family home. All departments went through a very rigorous budget review process and reduced expenses or increased revenues in a variety of areas to offset inflationary and contractual increases. Expenditure details have been provided in each Department Business Plan. Service Delivery Partners Library The Library has been operating in its new location in the Solaris development since February In that time there has been growth in usage, including circulation of materials, number and variety of programs offered, attendance at those programs, and expansion of community partnerships. The Fraser Valley Regional Library (FVRL) Board endorsed a new funding formula that was to be implemented over 2 years 2014 and 2015 that is more closely tied to per capita costs and more reflective of the services provided. With any change in funding formula for budget allocation purposes, there are winners and losers. Unfortunately, for Pitt Meadows this funding formula change has meant an increase in costs. In order to mitigate the impact, this change was phased in over two years with 2015 being the final year of implementation. The 2015 cost increase is nearly $52,000. Other library cost increases relate to collective agreement rate adjustments, administrative restructuring changes and costs associated with replenishment of the Collections Reserve. The total requested increase in 2015 over 2014 is $79,900, equating to a 0.50% or $8.51 tax increase to the average single family home. Expenditure details have been provided in the Library Services Business Plan. Parks & Leisure Services Parks and Leisure Services includes costs related to the operation of recreation facilities (not including the Arena), sports fields, parks, and recreation programming in both Pitt Meadows and Maple Ridge, provided for under the joint Maple Ridge/Pitt Meadows Parks and Leisure Services Agreement. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 14

15 The department has requested additional funds of $42,900, equating to a 0.27% or $4.57 tax increase. The increase request primarily relates to collective agreement adjustments to provide community services, maintain parks, fairgrounds and trails, as well as adding $5,000 to fund Pitt Meadows share of the Arts Centre operating costs, as agreed during the recently completed review of the joint services agreement with Maple Ridge. Expenditure details have been provided in the Parks & Leisure Services Business Plan. Police Services The budget for Police Services, including the RCMP Contract and Housing and Support Services provided by the City of Maple Ridge, has increased for 2015 by $131,300 or 0.82% over the 2014 budget. The RCMP Contract budget was increased by $115,000, while the Housing and Support Services budget was increased by $16,300. Based on an existing complement of 22 members, the RCMP projects an overall increase in RCMP detachment costs of 2.9% over the 2014 budget which is driven significantly by member contractual pay increases, pension rate increases, Pitt Meadows new contribution to the Real Time Intelligence Centre (RTIC), offset by health care savings for members joining the Medical Services Program (MSP), and funding vehicle replacement contingency from the Equipment Replacement Reserve if needed. The RCMP is a federal organization and budgets are based on an April to March fiscal year. Municipalities must adjust these cost estimates to align with the January to December fiscal year used by local governments. In adjusting the base RCMP costs to the City budget, adjustments have been made to allow for member vacancies based on historical averages. This is a budget risk as these vacancy patterns may not occur to the same extent in a given year. During the month budget review with Council, a new Police reserve was established in order to transfer 50% of Police Services annual operating surpluses. The reserve will mitigate the risk that vacancies do not materialize and will provide funding for one-time operating and capital costs. Expenditure details have been provided in the Police Services Business Plan. Proposed Corporate Plan Corporate Finance Revenue and expense budgets belonging to Corporate Finance are not directly attributed to any one department. Rather, all or most departments will benefit by them or share in creating the cost. The majority of budget items in the Corporate Finance area are budgets for reserve transfers, debt servicing costs and taxation revenue which includes taxes from new development or growth. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 15

16 The cost drivers of the $123,000 or 0.77% tax increase for Corporate Finance are summarized below: Proposed Corporate Plan The City s strategy has been to properly fund reserves for existing asset and infrastructure replacement and avoid debt funding for this purpose, wherever possible. In keeping with the philosophy that the consumption of fixed assets and infrastructure represents an ongoing cost, the City has been focused on providing consistent, structured annual funding to infrastructure replacement and maintenance reserves, as well as, funding future strategic assets. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 16

17 The following table summarizes the proposed allocation to reserves consistent with the Strategic Plan goal to properly fund and care for existing and future assets and commitments. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 17

18 The estimated total value of the City s assets/infrastructure, including utilities, is $173 million. A conservative estimate for their annual replacement cost is $8.1 million compared to the 2015 annual funding of $5.1 million, leaving an annual funding shortfall of $3 million. This represents a significant infrastructure funding deficit. This deficit will continue to accumulate until such time the annual reserve funding matches the annual replacement cost and the funding level is sufficient to fund the past accumulated deficit. It is important to note that this an international issue that faces all municipalities. That being said, there are mitigating steps that Council may want to consider including: re-directing the Strategic Capital Reserve balance and the annual 1% asset levy to fund the eventual replacement of existing facilities to ensure sustained long-term service delivery; and after the Future Capital Reserve balance recovers in 2018, consider re-directing the remaining funds and annual levy of $575,000 to fund the eventual replacement of existing facilities rather than strategic initiatives How the City Spends Its Money General Fund Expenses Capital Reserves 21% Supplies & Equipment 1% Police 20% Salaries & Wages 19% Parks & Leisure 10% Training & Development 1% Utilities 1% Library 5% Contracts & Fees 12% Arena 6% Vehicles 2% Debt 2% City of Pitt Meadows - Proposed 2015 Business Plan Pg. 18

19 Five Year Summary General Operating Fund Revenues: Taxation $ 16,678,799 $ 17,356,350 $ 18,149,950 $ 18,852,750 $ 19,520,650 $ 20,135,050 Grants 299, , , , , ,000 Fees, Licences, Charges & Permits 2,502,754 2,671,300 2,718,200 2,767,300 2,817,800 2,869,400 Transfers from Utilities 369, , , , , ,100 Transfers from Reserves 684, , , , , ,100 Other 1,659,501 1,628,350 1,641,550 1,680,150 1,737,450 1,754,250 22,193,613 22,915,200 23,582,200 24,396,800 25,165,000 25,779,900 Expenditures: CITY DEPARTMENTS: General Government 3,545,564 3,549,600 3,578,700 3,626,800 3,730,600 3,749,000 Development Services 1,271,854 1,446,900 1,487,300 1,513,200 1,542,700 1,562,300 Fire, Rescue and Emergency Services 1,292,776 1,292,900 1,318,000 1,342,700 1,367,400 1,396,100 Transportation and Public Works 1,759,816 1,733,400 1,755,700 1,775,600 1,795,800 1,816,100 Debt Service 566, , , , , ,000 8,436,710 8,586,400 8,700,100 8,815,600 8,990,700 9,074,500 SERVICE DELIVERY PARTNERS: Arena 1,323,500 1,246,800 1,284,100 1,322,600 1,362,400 1,403,300 Library 1,131,400 1,211,300 1,235,100 1,272,300 1,301,100 1,332,100 Parks and Leisure Services 2,261,180 2,266,000 2,328,000 2,398,000 2,452,000 2,502,000 Police Services 4,702,623 4,832,000 5,037,200 5,306,200 5,487,200 5,601,800 9,418,703 9,556,100 9,884,400 10,299,100 10,602,700 10,839,200 Reserve Provisions 4,338,200 4,772,700 4,997,700 5,282,100 5,571,600 5,866,200 Balanced $ - $ - $ - $ - $ - $ - Impact on Average Home $50.50 City of Pitt Meadows - Proposed 2015 Business Plan Pg. 19

20 Risks With the preparation of the budget each year there are risks with respect to the estimates made and the assumptions. Some of the more significant risks included in the 2015 budget are as follows: No allowance for assessment appeals has been built into the budget for this year. Actual assessment appeals vary significantly from year to year. Risk Successful assessment appeals may erode taxation revenue throughout the year, risking a potential year end deficit. Position vacancy allowances have been made for RCMP and internal staff based on historical patterns that the City has experienced. With respect to vacancies, these are short term for reasons such as maternity/paternity time and medical leave. Risk These vacancies and under spends may not materialize causing potential for overspends. Often position vacancies must be backfilled to maintain service levels and to avoid unmanageable staff work load. A $200,000 transfer was budgeted in 2014 to accommodate a reduction in building permit revenue that occurred in This transfer has continued each year since Due to the volatility of development revenues and the heavy reliance on annual surpluses to fund this transfer, this is not a sustainable budget practice and needs to be eliminated to also avoid over-utilizing the Operating Reserve. Reserves should be used to fund one-time initiatives rather than supplementing the on-going operating budget each year. Risk Future annual surpluses may not be sufficient to absorb this cost whether generated by development revenue surpluses or unrelated surplus. As well, the Operating Reserve balance is being diminished due to this poor budgeting practice. Annual surpluses are deposited to the Operating Reserve each year. The primary purpose of the Operating Reserve is to fund emergency events should they arise. The general guideline, provided by auditors, suggests the reserve balance should be approximately 15% of taxation revenue or $2.3 million. Risk The projected balance for the Operating Reserve is below the recommended balance, in the event a major emergency event occurs. As a result, City of Pitt Meadows - Proposed 2015 Business Plan Pg. 20

21 alternate funding sources would need to be reassigned for this purpose which will displace other capital priorities. Proposed Corporate Plan The annual TransLink funding covers the cost to operate, maintain and rehabilitate the City s major road network (MRN) and any unspent funds must be deposited to a designated MRN reserve. This practice ensures the TransLink funding is not allocated to any other purpose than MRN activities. Currently, the MRN transfer to a designated reserve is not budgeted even though the actual transfer is made, in accordance with the TransLink agreement, each year end. So, in effect, the annual operating surpluses, if any, absorb this unbudgeted transfer. The year financial plan has incorporated a phase-out plan to eliminate the $53,000 Operating Reserve transfer subsidy over the 5 years and replace with an MRN Rehabilitation Reserve transfer. Risk The unbudgeted transfer to a designated MRN reserve causes the Operating Reserve to be drawn down to an insufficient projected balance that is well below the recommended amount in the event of an emergency. Service Level Changes Each year, the Corporate Leadership Team undertakes an internal review process to ensure services are in alignment with staff s interpretation of Council s strategic goals and objectives. As a result of this review, a number of incremental changes in service delivery are provided for Council s consideration as part of the business planning and budget deliberation process Business Plan - Decision Packages PRIORITY CATEGORY DESCRIPTION BUDGET Taxation 1 Reallocation 1% Strategic Asset Levy $160,000 2 Incremental Business Analyst $89,000 3 Incremental Operational Support for Special Events $3,000 4 Incremental Festival Fund $5,000 5 Incremental Cultural Facilities Rental Grant $3,000 6 Incremental Glass Recycling $120,000 plus $25,000 for upfront costs Reserves 1 Operating Reserve Fire Services Review $50,000 2 Operating Reserve Service Assessment $40,000 3 Operating Reserve Historical Council Agenda Scanning $6,500 4 Water Reserve Universal H2O Metering Cost/Benefit Analysis $40,000 City of Pitt Meadows - Proposed 2015 Business Plan Pg. 21

22 Tax Rate Multipliers Prior to 2008, the City of Pitt Meadows applied the same rate increase to the mill rate for all property classes. The City, along with some other local governments such as the City of Vancouver, have recently made adjustments to their mill rates to shift the tax burden further to the residential class which generally is acknowledged to generate less revenue than expenditures, resulting in a subsidy from the other property classes. Much focus is placed on the multiplier between the class 6 (business) and class 1 (residential). The main factor impacting mill rates over the last couple of years has been the significant increase in market values which the City adjusts for, on a class by class basis, prior to applying a tax rate increase. Annual market adjustments in assessments which vary between the classes have the biggest impact on multipliers year over year. Because of the difference in the mill rate and the difference in the number of folios in each class, adjusting the tax rate by say 1% in class 6 (business) will not generate the same tax dollars as a 1% adjustment to class 1 (residential). The Community Charter requires local governments to formulate a policy around taxation revenue and disclose this as part of the financial plan bylaw each year. With the prior adoption of this policy, the City undertook to reduce the multiplier between class 1 and class 6 to 3.5:1 over a five year period. This means that a class 6 taxpayer will pay 3.5 times a class 1 taxpayer for every one thousand dollars in assessed value of their property. For 2014, the multiplier is 3.10:1, which indicates the City has achieved its objective to have a multiplier of less than 3.5:1. Inflation Municipal governments are under considerable pressure to relate their spending and taxation levels to the cost of inflation, yet each municipal government s experience with inflation can differ greatly from the national average. The most widely used measure of inflation in Canada is the consumer price index (CPI). The CPI measures the price changes for common household purchases, such as food, shelter, clothing, household operations and furnishings; these are items a municipal government typically does not purchase to provide programs and services to its citizens. Extending the use of CPI into discussions on appropriate level of property tax or fee increases for a municipal government is problematic because the basket of goods that is consumed by a municipality as compared to an individual or household is different. The largest expenditures for governments are labour, construction materials and contractual services, factors not found in CPI. As such City of Pitt Meadows - Proposed 2015 Business Plan Pg. 22

23 municipalities have their own spending patterns and cost profiles that differ from other economic sectors. To better understand and communicate the true inflationary pressures on municipal budgets, the following statistics are more relevant: the municipal price index forecasted by the City of Edmonton for 2015 is 2.73%; and the Vancouver 2014 third quarter construction price index provided by Statistics Canada is 1.50%. Additionally, municipal costs, like many private company costs, will often increase by steps rather than gradual increases. For example, when the City of Pitt Meadows reached 15,000 residents in 2010, the City became responsible for 90% of its policing costs rather than 70%, resulting in a sharp increase in costs in one year that did not correlate to CPI, rather than gradual increases over many years Proposed Utility Summaries This section describes the major opportunities, challenges and budget that are associated with delivering each of the City s utilities: Water, Sewer, Solid Waste, and Drainage. Water Utility The key issues facing the water utility are the usage of water and the equity in the rate mix between flat and volume based charges. To improve equity within the system, the City has adopted the approach of flowing through the Greater Vancouver Water District (GVWD) blended rate for water to the metered users and charging a flat amount per connection to recover the City s costs to deliver the water and maintain the system. Metro Vancouver s drinking water blended rate rose by 1.65% from cents per cubic meter to 64 cents per cubic meter which has been reflected in the 2015 metered revenue budget. Past Metro Vancouver increases to the rates have been more significant than this, and the City has taken a normalizing approach to its own rate adjustments so as to minimize fluctuations in taxation for residents. In 2015, the City does not need to increase the 2014 single family and multi-family water flat fees or the metered flat amount per connection for the following reasons: Increased flat fee revenue of $45,000 attributed to growth in the apartment residential sector City of Pitt Meadows - Proposed 2015 Business Plan Pg. 23

24 Improved metered revenue of $90,000 resulting from: higher water consumption patterns than budgeted; and changes in Metro Vancouver water purchase costs. Reduced City budgets for PRV station and line maintenance to past actuals of approximately $11,000, offset by an increased allocation to the water utility for administration support costs of $14,000. Water supply costs from the Greater Vancouver Water District (GVWD) make up 60% of the water operating budget (including reserve provisions). Therefore, it is the primary driver of the rate increases in this fund. Last year, GVWD adopted the pay-as-you-go philosophy that directs capital costs to municipalities as the costs are incurred. Key GVWD capital cost drivers are: the water treatment program, growth related infrastructure projects, risk management, and infrastructure upgrade projects. To provide for future capital replacement of water infrastructure, the contribution to the Water Capital Reserve Fund in 2015 is $925,000 including a $120,000 increase over Initially the contribution to the water reserves was planned to increase at a slower rate however, since we were able to achieve a zero increase in the 2015 water budget for flat fee customers and the per connection charge for metered customers, it was financially prudent to raise the annual reserve provision to $925,000 so that it matches asset consumption costs sooner and provides sufficient funding for the timely replacement of water utility infrastructure. However, achieving the annual replacement cost of the water assets sooner does not address the accumulated infrastructure funding gap that has grown over the years. As mentioned, the 2015 budget reflects a zero increase that keeps the single family flat fee unchanged at $438, the multi-family flat fee unchanged at $334 and the connection charge for metered customers unchanged at $276. Volume usage by metered customers will be charged the GVWD blended rate. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 24

25 Five Year Summary Water Utility Operating Fund Revenue: Flat $ 2,724,906 $ 2,756,400 $ 2,801,900 $ 2,847,300 $ 2,892,600 $ 2,937,900 Metered 994,736 1,084,400 1,095,200 1,106,200 1,117,300 1,128,500 Other 13,000 15,000 15,000 15,000 15,000 15,000 3,732,642 3,855,800 3,912,100 3,968,500 4,024,900 4,081,400 Expenditures: Administration 289, , , , , ,500 Insurance 1,350 1,600 1,600 1,600 1,600 1,600 Telephone Hydro 7,344 7,000 7,100 7,200 7,300 7,400 PRV Station Maintenance 72,670 65,000 65,700 66,400 67,100 67,800 Water Line Maintenance 183, , , , , ,300 Meters - Reading & Maintenance 30,794 31,000 31,300 31,600 31,900 32,200 Hydrant Maintenance 42,462 43,000 43,400 43,800 44,200 44,600 GVWD Water Purchase 2,300,000 2,300,000 2,350,000 2,400,000 2,450,000 2,500,000 2,927,642 2,930,800 2,987,100 3,043,500 3,099,900 3,156,400 Reserve Provisions 805, , , , , ,000 Total Expenditures 3,732,642 3,855,800 3,912,100 3,968,500 4,024,900 4,081,400 Balanced $ - $ - $ - $ - $ - $ - Increase in ed Expenditures (before reserves) 0.1% 1.9% 1.9% 1.9% 1.8% Rate Adjustment: Single Family Flat Rate $0 Multi-Family Flat Rate $0 Metered Base Rate $0 Metered Rate (Same as GVWD) $ City of Pitt Meadows - Proposed 2015 Business Plan Pg. 25

26 Sewer Utility The Greater Vancouver Sewage and Drainage District (GVS&DD) charge for sewer treatment makes up 60% of the City s sewage operating budget (including reserve provisions), thus it is the primary cost driver for the sewer utility. That said Metro Vancouver s overall utilities increase is the lowest in over a decade where they estimate, on average, households will pay $3 more for sewerage services, with the bulk of the increase attributed to making sure the system meets the needs of a growing population. Based on a review of the City s budget for GVS & DD treatment charges, staff determined that the small Metro Vancouver increase can be absorbed within the current budget based on historical costs thereby, negating an increase in this area. The sewer utility budget includes a contribution to the Sewer Capital Reserve in 2015 of $368,000 which matches existing estimated annual replacement values for the sewer assets and represents an $11,000 increase over A comprehensive asset management plan is being prepared to better estimate the appropriate annual replacement value. Based on preliminary data, staff anticipates the value is reasonably accurate therefore, there are no further planned reserve increases in the five year plan until a more definitive value is known. While the City anticipates increased costs related to insurance, hydro and sewer reserve funding, the City was able to realize offsetting savings for sewer lift station and sewer line maintenance costs in the amount of $18,000. Consequently, the City was able to achieve zero increases in its overall expenses. As well, the anticipated growth in 2015 from multi-family developments is expected to contribute almost $40,000 to the bottom line and the 2014 budgeted growth was conservatively estimated which will also provide $17,000 in additional revenue in Since the City held its expenses to a zero increase and new growth is estimated to provide additional revenue of $57,000, the City is able to reduce the 2015 sewer flat fee by 2.8% over 2014, reducing the annual fee by $8 for the single family & multi-family home from $283 to $275. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 26

27 Sewer Fund Expenses Sewer Reserves 19% Administration 11% Lift Station Maintenance 5% Metro Vancouver GVS & DD Waste Treatment $1,180,000 60% Sewer Line Maintenance 5% Five Year Summary Sewer Utility Operating Fund Revenues: Levy $ 1,961,632 $ 1,962,800 $ 2,014,100 $ 2,079,700 $ 2,161,200 $ 2,247,400 Katzie 22,000 19,500 19,700 19,900 20,100 20,300 Expenditures: 1,983,632 1,982,300 2,033,800 2,099,600 2,181,300 2,267,700 Administration 203, , , , , ,300 Insurance 3,060 4,500 4,500 4,500 4,500 4,500 Hydro 17,000 20,000 20,200 20,400 20,600 20,800 Sewer Lift Station Maintenance 122, , , , , ,400 Sewer Lines Maintenance 100,602 95,800 96,800 97,800 98,800 99,800 GVSDD Treatment Charge 1,180,000 1,180,000 1,227,200 1,288,600 1,365,900 1,447,900 1,626,632 1,614,300 1,665,800 1,731,600 1,813,300 1,899,700 Reserve Provisions 357, , , , , ,000 Total Expenditures 1,983,632 1,982,300 2,033,800 2,099,600 2,181,300 2,267,700 Balance $ - $ - $ - $ - $ - $ - Increase (decrease) in ed Expenditures (before reserves) -0.8% 3.2% 4.0% 4.7% 4.8% Rate Adjustment: Single Family Flat Rate ($8) Multi-Family Flat Rate ($8) City of Pitt Meadows - Proposed 2015 Business Plan Pg. 27

28 Solid Waste Utility The cost of garbage and recycling services in Pitt Meadows is primarily determined by two factors: the contract cost of garbage collection services and the garbage and green waste tipping fees. The garbage collection contract accounts for 76% of the solid waste budget. The garbage tipping fee is charged by the Greater Vancouver Regional District (GVRD) and is expected to increase from $108 per tonne to $109 per tonne for 2015, offset by the tonnage dropping from 1,200 to 1,100 tonnes, creating an overall savings of $11,000. In 2013, the Province of BC approved the Stewardship Plan submitted by Multi-Material BC (MMBC), the not-for-profit agency established to represent commercial Packaging and Printed Paper (PPP) producers. Under the PPP Stewardship Plan, MMBC pays qualified collectors, including local governments, a financial incentive for recyclables collected from single-family and multi-family residences. The City of Pitt Meadows signed a recycling contract with MMBC to continue to provide recycling services to the community for a variety of reasons including meeting its current contract commitments with its private collection contractor. The MMBC contract took effect on May 19, The City received 7/12ths of the financial incentive in 2014, or $143,000 and passed the savings back to the ratepayers as part of the budget. The remaining 5/12ths or $102,000 has been included as additional revenue in 2015, offset by a $50,000 contingency for penalties resulting from potential contaminated loads. A $3,750 penalty per truck load will be levied for contaminated loads in excess of 3% to a maximum of $120,000 in a 12 month period. Staff believes that qualified collectors, including cities, will be afforded the opportunity to correct customer behaviour which suggests that it is unlikely that the City will incur the maximum penalty in a given year, unless the behavior persists. Therefore, we believe the contingency for penalties is adequate however we will monitor the situation closely. Additionally, garbage, recycling and green waste collections budgets were reviewed and adjusted to match the charges received from the City s collection contractor, resulting in budget savings of $23,000. Offsetting these savings were an increased allocation to the solid waste utility for administration support costs of $18,000 and increased tipping fees due to tonnage of $11,000. The City established a Solid Waste Reserve in 2015 for $65,000. The reserve is necessary to smooth out rates, transition new costs and mitigate risks such as receiving higher MMBC contaminated load penalties than planned. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 28

29 When taken together all of these budget adjustments, including introducing the new reserve to balance the total solid waste budget to zero, results in no increase to the single family home or multi-family home that receives garbage collection. Flat fees will remain the same in 2015 as follows: Single family home: $253 Multi-family home with curbside garbage collection: $253 Multi-family home with central garbage collection: $10 Finally, due to the variety of service changes in recent years involving the Solid Waste utility, in 2013 staff undertook a review of the City s solid waste costs and found that costs associated with a number of property classifications did not match the bylaw rates. The approved year Financial Plan provided a maximum 2-year phase in (2014 & 2015) for rate increases in order to mitigate the impact to those rate payers. The 2015 proposed budget includes fees which now covers the operating costs to deliver solid waste services for all property types. Solid Waste Expenses Proposed Corporate Plan 1,400,000 1,425,000 1,200,000 1,000,000 1,077, , ,000 Green Waste Recycling Garbage 400, , ,000 0 City Waste Management Total Drainage Utility The drainage utility is funded by a variety of sources, but primarily from a levy established by bylaw and a separate charge (mill rate) based on assessed value. Key costs in the utility include: ditch cleaning, maintenance of culverts, storm sewers and pumps, hydro costs and capital reserve provisions for replacement of infrastructure, in particular pumps and pump stations. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 29

30 The drainage utility budget includes a contribution to the Drainage Capital Reserve in 2015 of $580,000, an $80,000 increase over The estimated annual replacement value of $764,000 is substantially higher than annual funding however, the reserve was only established in 2009 therefore substantial improvement has been made to the reserve provision in a short period of time. The 5-year financial plan continues to increase the drainage reserve contribution by $40,000 each year to attain the replacement value in a reasonable time frame. The drainage utility has an increased allocation of $10,300 for administration support costs that better reflects time and materials spent for this utility. The increased reserve contribution and increased support cost allocation is partially offset by a budget reduction of $10,400 for reduced storm sewer maintenance that corresponds with past actual activity, an increase of $10,200 in the Maple Ridge drainage levy for Area 3, and debt interest savings of $4,700 due to lower interest rates. The rate increase for 2015 is 8.5% for both the mill rate and the levy, particularly to address the increased reserve contribution needed for ageing infrastructure and lessen debt servicing costs associated with pump and infrastructure replacements. This results in an impact of $8.41 on the average single family taxpayer or $6.12 on the average multi-family home. Drainage Fund Expenses Proposed Corporate Plan Hydro, Telephone, Insurance 13% Administration 14% Ditch Cleaning 20% Drainage Reserve 33% Pump Maintenance 11% Culvert Maintenance 3% Storm Sewer Maintenance 3% Debt Servicing 3% City of Pitt Meadows - Proposed 2015 Business Plan Pg. 30

31 Five Year Summary Drainage Utility Operating Fund Revenues: Drainage Levies $ 915,040 $ 962,200 $ 1,144,400 $ 1,184,100 $ 1,236,800 $ 1,311,600 Drainage Mill Rate 587, , , , , ,000 Maple Ridge for Area 3 112, , , , , ,500 1,614,240 1,694,400 1,890,300 1,943,900 2,010,900 2,100,100 Expenditures: Administration 220, , , , , ,200 Insurance 22,440 28,600 29,700 30,900 32,100 33,400 Telephone Hydro 190, , , , , ,300 Ditch Cleaning 336, , , , , ,200 Culvert Maintenance 54,142 54,700 55,200 55,800 56,400 57,000 Drainage Maintenance 57,358 47,000 47,500 48,000 48,500 49,000 Pumps/ Barscreens 183, , , , , ,400 Debt Servicing 50,000 45, , , , ,000 1,114,240 1,114,400 1,270,300 1,283,900 1,310,900 1,360,100 Reserve Provisions 500, , , , , ,000 Total Expenditures 1,614,240 1,694,400 1,890,300 1,943,900 2,010,900 2,100,100 Balance $ - $ - $ - $ - $ - $ - Increase in ed Expenditures (before reserves) 0.0% 14.0% 1.1% 2.1% 3.8% Residential Single Family Rate Adjustment Levy $3 Mill Rate $5 Total $ Capital Program All Funds The capital budget deals with the non-recurring costs of projects and construction, as well as the purchase of tangible capital assets. These include items such as the purchase of fleet and equipment, information technology, the repair and construction of roads, bridges, sewer and water lines and the construction of parks. The City is continuing to develop funding plans for major infrastructure projects, not only resulting from growth, but also for maintenance and replacement due to aging. The proposed capital program for 2015 has a proposed budget of approximately $5.6 million of which nearly $1.9 million relates to maintenance and replacement of utility infrastructure. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 31

32 The capital program for the subsequent four years of the 5-year plan is as follows: 2016 $6.3 million 2017 $5.8 million 2018 $4.8 million 2019 $4.9 million 2015 Key Projects Some of the more significant projects for 2015 include: Core business system renewal Broadcast audio system Meadows Room Broadcast camera system Council Chambers Asset management plans Thompson Road repave (east of Rannie Road) Ford Road Detour repave (west of Wooldridge Road) Harris Road repave (north of the Cranberry Slough) Ford Road repave: Harris Road to 189B Cranberry Slough bridge replacement Ice resurfacer replacement at the Arena Canopies at ice resurfacer entrances at the Arena New lighting in arena: Chrysler Rink McKechnie pump replacement ( ) Blakely Road water main replacement Ford Road water main replacement ( ) Wildwood Crescent water main replacement ( ) McKechnie Road water main replacement ( ) City of Pitt Meadows - Proposed 2015 Business Plan Pg. 32

33 Five Year Capital Plan Category Utility Infrastructure $ 1,914,500 $ 2,232,500 $ 2,405,000 $ 1,515,000 $ 1,360,000 Public Assets 1,051,700 1,592,500 1,027, , ,500 Recreation Parks and Culture 657, , , ,000 1,092,000 Transportation 1,993,000 1,860,500 1,540,000 2,098,000 1,625,000 $ 5,616,700 $ 6,270,000 $ 5,830,400 $ 4,840,200 $ 4,940,500 Funding Source Arena Capital Reserve Fund $ 155,000 $ 165,000 $ 175,000 $ 185,000 $ 195,000 Development Cost Charges 290, ,500 65,000 15, ,000 Debt , ,000 Drainage Reserve Fund 488, , , , ,100 Dyking Reserve Fund 36,400 45,500 36,400 45,500 36,400 Equipment Replacement Reserve Fund 472, , , , ,500 Lifecycle Reserve Fund 405, , , , ,000 Future Capital Reserve Fund 597, , , ,000 25,000 Operating Reserve Fund 45, Sanitary Sewer Reserve Fund 25, ,000 25, ,000 25,000 South Bonson Amenity Reserve Fund 10,000 10,000 10,000 10,000 10,000 Third Party Contributions 117,630 76, ,900 77,400 22,500 Transportation Infrastructure Reserve Fund 1,880,000 1,610,000 1,440,000 1,998,000 1,175,000 Waterworks Capital Reserve Fund 1,095,000 1,380,000 1,090, , ,000 $ 5,616,700 $ 6,270,000 $ 5,830,400 $ 4,840,200 $ 4,940,500 City of Pitt Meadows - Proposed 2015 Business Plan Pg. 33

34 Overall Taxpayer Impact The following table summarizes the 2015 property tax and utility fee increase for the average assessed single family home, as described in this budget overview document. It is important to note that when taken together, the budget includes a $0 increase for utilities and a $50 property tax increase for an average assessed single family home of approximately $460,000. Achieving the $50 tax increase in 2015 for an average assessed single family home resulted from a diligent budget process that evaluated each expense for savings, a thorough review of revenues to find enhancements and process reviews to maximize efficiencies when possible. Approximately 54% or $27 of the $50 tax increase to the average assessed single family home relates to providing capital funding for the maintenance and replacement of the City s infrastructure, as well as a 1% levy to fund new strategic capital assets. The proposed tax increase, including the operating and capital components, is needed to maintain the same services as last year and to continue to increase funding for the City s eventual asset replacement. With respect to the zero dollar increase for the single family home for utilities, there were a number of budget opportunities that came together that permitted a zero increase in 2015 including: Metro Vancouver cost saving measures that resulted in the lowest increase in many years, the City aligning maintenance budgets with historical actual costs that are sustainable, receiving full year MMBC financial incentives, aligning solid waste budgets with the contractor rates, and increased Maple Ridge drainage levy contribution and growth. City of Pitt Meadows - Proposed 2015 Business Plan Pg. 34

35 This is the second consecutive year the City was able to maintain the utilities at a zero increase. It is important to note that sustained low tax increases or, in the case of utilities, zero increases for 2014 and 2015 cannot continue indefinitely. Like last year, staff made every effort to closely review the budget to ensure the 2015 budget was sufficient to deliver the services expected by the community while simultaneously ensuring the budget does not contain surplus funds. Therefore, it is reasonable to expect that with continued community growth and normal cost escalations, future year budgets will need to be adjusted upwards. The next table summarizes the 2015 property tax and utility fee increase for the average assessed multi-family home of approximately $263,000 that receives central collection for recycling and green waste services. Single family homes and multi-family homes that receive central collection for recycling and green waste services represent 81% of the total residential properties. Based on the proposed budget, they will receive a combined property tax and utility increase of either 1.76% or 1.53%, respectively. The next table provides the 2015 tax and utility increase for the average assessed single family home of $460,000 for each year of the five year plan, with an average increase at the bottom of the table. Year Corporate Finance Operating Reserves Capital Reserves Taxation 1% Asset Levy City Depts Service Delivery Partners Subtotal User Fee Utilities Storm Sewer Water Solid Drainage Waste Subtotal Total with Utilities 2015 $ (30) $ 17 $ 10 $ 18 $ 8 $ 27 $ 50 $ 8 $ (8) $ - $ - $ - $ (16) (11) (5) (5) Average (14) City of Pitt Meadows - Proposed 2015 Business Plan Pg. 35