Financial Impact of Site C Construction Workforce on City of Fort St. John

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1 Financial Impact of Site C Construction Workforce on City of Fort St. John Presentation to Site C Joint Review Panel Dianne Hunter, City Manager, City of Fort St. John Gerhard Tonn on behalf of the City of Fort St. John January 20, 2014

2 Focus of Presentation Includes: Direct financial impacts of Site C on the services and finances of the City of Fort St. John during the construction phase Does not include: Impacts on City services and finances during the operations phase Any City services that may be required to directly service B.C. Hydro facilities and that would be provided on a contractual bases (i.e.: fire protection) The payment that would be received through the Regional Legacy Benefits Agreement Payment from B.C. Hydro to help defray City staff cost incurred in reviewing the project as well as meetings with B.C. Hydro staff and consultants The impacts of the Site C project on City police services. The impacts of the Site C project on City roads and intersections. The impacts of the Site C project on the City s water system.

3 BCUC 1983 Conclusions The Commission concludes that the actual impact of Site C on municipal infrastructure and finances will depend in large part on the magnitude and patterns of in-migration into the area, which cannot be determined at this time. The Commission therefore recommends that the matter of impacts and migration and compensation for the City of Fort St. John be referred to a monitoring program.

4 EIS - Section B.C. Hydro recognized in the Environmental Impact Statement (EIS) that there is potential for adverse effects on local government revenue due to changes in the following as a result of the Project (EIS, Section ): Changes to population and demand for community infrastructure and services, increasing expenditures; Changes in expenditures for services demand (sic) by non-residents but no corresponding increase in revenues; Change in revenues and expenditures and the difference in timing when revenues would begin to be received and when expenditures would need to take place; Change to in-place infrastructure and the associated cost that would be created by the Project; Change in land use that would decrease the property tax paid to local government.

5 EIS - Section Section of the EIS goes on to note the following: It is anticipated that workers settling in communities and those living in camp would place increased demand on local services, but in different ways; Aggregate demand would increase for local government services for policing, fire, recreation and leisure, municipal solid waste, sewer and water service delivery, and transportation; The net effect of the Project on local government revenues and expenditures would be to accelerate the expected increases in service and infrastructure needed to serve the growing population; Collectively, own-source taxation to local governments would increase (this refers to residential as well as commercial and industrial taxation); Based on proximity to the Project, most of this new resident population and business activity would likely be in the Fort St. John area.

6 Council s Key Position Council established a key position that was ratified by the community through an extensive consultation program: B.C. Hydro must provide an adequate, predictable and sustainable source of funding to the City in order to address impacts and provide community benefits.

7 Figure 1: Overview of Financial Analysis Methodology Step #1: Population projections: Step #2: Projection of growth related capital and debt services costs Step #3: Projection of growth related operating costs Step #4: Projection of total annual debt service, capital and operating costs: Step #5: Projection of total annual City revenues: Step #6: Projection of net annual City costs: Step #7: Determination of Site C related costs:

8 Figure 2: Population / Financial Model Scenarios Variable Workers reside in-camp or incommunity? Scenario 1 (EIS) 15% incommunity Scenario 2 Scenario 3 Scenario 4 Scenario 5 20% incommunity 20% incommunity 20% incommunity 20% incommunity If in-community, which one? Number of spinoff jobs in the Peace Region? 60% FSJ 67% FSJ 67% FSJ 75% FSJ 90% FSJ 13% in region 13% in region 20% in region 20% in region 20% in region Base Line Scenario Maximum Exposure Scenario

9 Figure 1: Overview of Financial Analysis Methodology Step #1: Population projections: Step #2: Projection of growth related capital and debt services costs Step #3: Projection of growth related operating costs Step #4: Projection of total annual debt service, capital and operating costs: Step #5: Projection of total annual City revenues: Step #6: Projection of net annual City costs: Step #7: Determination of Site C related costs:

10 Figure 3: Broad Concept for Addressing Financial Impact on City during Construction Phase Maximum Exposure Funding Amount of Reserve Fund Base Line Funding

11 Figure 4: Baseline and Maximum Exposure Scenario Summary Scenario Average Annual Net Costs Allocated to Site C Baseline (Population Scenario 3) $ 2.3 M Maximum Exposure (Population Scenario 5) $ 3.2 M