City of Port Moody DRAFT Financial Plan Thursday, January 31 st, 2013 “P UBLIC I NPUT ”

Financial Plan Process Governed by a Legislative Process  Municipal Purpose (Community Charter, Section 7) Provide good government Provide services, laws and other matters for community benefit Provide stewardship of public assets Foster economic, social and environmental well-being of community  Financial Plan (Community Charter, Section 165) Adopt a 5-Year Plan (can be amended anytime during the year)  Annual Property Tax Bylaw (Community Charter, Section 197) Tax rates adopted by bylaw before May 15, 2013 Authority to levy taxes on properties to allocate funding for services  Public Consultation Process (Community Charter, Section 166) Ensures the public have an opportunity to comment prepared by Financial Services Department

Financial Plan Process Provision of Services prepared by Financial Services Department  Essential Services Police, Fire, Water, Sewer & Drainage, Garbage & Recycling, Roads  Priority Services Parks, Recreation, Library, Bylaw Enforcement, Licensing, Arts, Culture, Heritage, Planning, Environment/Sustainability Management  Support Services Communications, Human Resources, Payroll, Finance, Administration, Legislative Services, Information Technology, Records Management, Clerical, Facilities Provision of Services Budget Driver

Financial Plan Process Community Enrichment prepared by Financial Services Department  Community/Cultural Support Financial Accessibility Sports Groups Arts/Culture Groups  Business Support Chamber of Commerce Business Improvement Areas Events  Environmental Support Supports environmental groups Development sustainability checklist Environmental stewardship

Financial Plan Process Planning Process Strategic Plan – Articulates Council’s high level Goals & Objectives Business Plan – Identifies measurable departmental Tasks to meet the Strategic Plan Financial Plan – Attaches the Resources to achieve the Business Plan. prepared by Financial Services Department Financial Plan Business Plan Strategic Plan

Financial Plan Process Timeline  Budget guidelines a pproved – June 05, 2012  Budget packages distributed – Late June, 2012  Budgets drafted by Departments – July/August, 2012  Budget reviews with Financial Services Division – Late August, 2012  Executive Leadership Team review – October, 2012  Finance Plan Council workshop – October 27, 2012  Preliminary budget deliberations – October, 2012 to December, 2012  Public Input (Town Hall Meeting) – January 31, 2013  Council deliberations – February, 2013 to April, 2013  Adoption of tax rates bylaws – Prior to May 15, 2013 prepared by Financial Services Department

7 Budget Planning Budget Considerations prepared by Financial Services Department  Residents enjoy and expect exceptional service Recent City surveys indicated a 99% approval rate  Level of reliance on reserves Major infrastructure historically funded from finite capital funding (e.g. land sales)  Asset management Infrastructure funding gap  Protective services emphasis (fire, police)  Senior government downloading (provincial, federal)  Taxation Business to Residential Tax Ratios – business retention issue Port Moody taxes and services relative to other municipalities  Subsidy levels User fees versus taxation to fund services

8 Budget Planning Service Costs - New Services prepared by Financial Services Department Operational Costs Capital Infrastructure Costs Labour Costs Provision of Services Budget Driver

9 Budget Planning Service Costs – Service Industry prepared by Financial Services Department

10 Budget Planning Service Costs – Operating vs. Capital Operating Costs – Direct and ongoing tax impact  Typically day to day costs of running of the City Wages/Benefits Materials/Supplies Training Utilities (heat, light) Insurance Capital Costs – Not historically a tax impact  Traditional capital funding sources (reserves, grants, development levies)  Taxation quickly becoming most sustainable capital funding source  What capital costs affect tax in 2013 budget? Fire Hall #1 Debt Funding for the Asset Reserve (replacement/maintenance of assets) prepared by Financial Services Department

11 Budget Planning Service Costs – Service Value prepared by Financial Services Department 2013 proposed Costs based on Average 2012 Assessed value of household $531,60 0

12 Historical Perspective prepared by Financial Services Department

13 Historical Perspective Tax Increases 1996 to 2012 prepared by Financial Services Department YearAverage Household Taxes Paid Average Household Tax Increase % Running Average % , , , , ,1001, ,5001, ,5001, ,1001, ,0001, ,0001, ,9001, ,0001, ,4001, ,4001, ,0001, ,9001, ,6001, $68 year or $1.30 week

14 Historical Perspective Tax Increases 1996 to 2012 prepared by Financial Services Department

15 Historical Perspective Utility Single Family Fees 1996 to 2013 (Net of 5% Discount) prepared by Financial Services Department YearTotal BillIncrease $Increase % Average$32.00 year or 62¢ week5.27% Significant portion of costs passed on to the City from Metro Vancouver

16 Historical Perspective Utility Increases 1999 to 2012 prepared by Financial Services Department

17 Historical Perspective Combined Tax & Utility Increases 1996 to 2012 prepared by Financial Services Department YearTax & Utility Increase (%) Running Average

18 Historical Perspective Combined Tax & Utility Increases form 1996 to 2013 prepared by Financial Services Department Services have changed dramatically since What service level increases have residents received since 1995?  Police Services (new building; increased compliment)  Fire Services (new #1 Hall; renovated #2 hall; firefighter force doubled)  Recreation (new community centres; expanded Recreation Centre)  Parks/Fields (artificial turfs; RP Park redeveloped; Westhill field; skate board park )  Trails (Shoreline, Westhill, Bert Flinn Park; bike paths)  Arts & Culture (new Library; new Theatre; new amphitheatre; funding for museum)  Utilities (new pumps, filtration and treatment plants; in-house garbage & recycling)  Other (new City Hall; bylaw officers; online services; environment protection funding) Average combined Dollar increase: $68 Taxes + $32 Utilities = $100 year

19 Historical Perspective 2012 Total Taxes Comparison (Average SF Household) prepared by Financial Services Department MunicipalityTaxesUtilitiesTotal Charges West Vancouver3,1441,3324,476 North Vancouver District2,0501,2943,344 Delta1, ,835 Coquitlam1,6241,1072,731 Port Moody1, ,720 Vancouver1, ,646 New Westminster1,5411,0782,619 Maple Ridge  1, ,523 Langley Township1,4531,0522,505 Port Coquitlam1, ,494 Abbotsford1, ,456 Pitt Meadows1, ,416 Burnaby1, ,392 North Vancouver City1, ,330 Richmond1, ,281 Surrey1,1951,0752,270 Langley City1, ,043   Maple Ridge does not have Garbage & Recycling pickup – private collection paid for by residents or drop off

20 Historical Perspective Reserves (Designated for Capital & Operating Needs) prepared by Financial Services Department YearOperating Reserves Capital Reserves Statutory Reserves Development Levies Accumulated Surplus Total ,300,000 3,800,000 18,900,000 5,200,000 4,300,000 35,500, ,100,000 4,700,000 20,100,000 4,800,000 4,500,000 37,200, ,100,000 5,800,000 21,100,000 5,500,000 4,500,000 40,000, ,300,000 11,700,000 17,400,000 8,000,000 4,700,000 44,100, ,300,000 7,500,000 13,200,000 5,400,000 4,700,000 34,100, ,900,000 8,000,000 6,200,000 5,500,000 4,700,000 28,300, ,700,000 7,800,000 4,300,000 5,700,000 5,000,000 26,500, ,500,000 8,200,000 2,800,000 5,600,000 25,700, ,600,000 10,400,000 6,800,000 5,800,000 6,000,000 32,600, ,100,000 12,900,000 6,100,000 5,800,000 6,600,000 35,500,000 Average 3,390,0008,080,00011,690,0005,730,0005,060,00033,950,000

21 Historical Perspective Reserves - Operating prepared by Financial Services Department

22 Historical Perspective Reserves - Capital prepared by Financial Services Department

23 Historical Perspective Reserves - Statutory prepared by Financial Services Department

24 Historical Perspective Reserves – Development Levies prepared by Financial Services Department

25 Historical Perspective Reserves – Accumulated Surplus prepared by Financial Services Department

26 Historical Perspective Growth prepared by Financial Services Department YearGrowth (%) 1% tax Equates to Growth ($) %150,000341, %158,000528, %170,000599, %183,000890, %189,5001,314, %218,000690, %230,0001,107, %248,000350, %258,00019, %273,50067,000 NOTE: Port Moody led the Region in population growth from 2006 to 2011 at 20%

27 Historical Perspective Protective Services Focus prepared by Financial Services Department

28 Historical Perspective Regional Labour Increases prepared by Financial Services Department YearCUPEFirePoliceCPI %3.0% 2.2% %3.0% 1.8% % 2.2% %3.8% 2.0% %3.5% 2.0% %3.5% 1.9% %2.5% 1.9% %3.5% 2.0% %5.1%4.0%2.4% %5.1%4.9%0.1% %TBD2.95%1.8% %TBD2.95%2.1% %TBD2.55%1.5% * Statistics courtesy of Metro Vancouver

29 Historical Perspective Labour Increases prepared by Financial Services Department

30 Historical Perspective Debt per Capita (with 2 nd Fire Hall Borrowing $3M) prepared by Financial Services Department Projected

31 Historical Perspective Declining Debt prepared by Financial Services Department Based on debt borrowing of $6 Million in 2012 and up to $3 Million in Based on population topping out at 38,000 in 2021.

32 Current Perspective prepared by Financial Services Department

33 Current Perspective Asset Renewal – Closing the GAP  City has approximately $650 Million in assets $450 Million land / $200 Million infrastructure/equipment Depreciation $6.2 Million per year Annual replacement cost is significantly higher, possibly $10,000,000  Asset Funding  Asset Levy (established 2009) 2009 – 2011: 3.50%$852, – 2017: 1.00% per year Proposed1,621,000 2,473,000  Other Capital Funding ( ) 1,076,000  Utility Capital Funding ( ) 3,605,000 Total Annual Asset Funding (end of 2017)$ 7,154,000 Total Annual Infrastructure Funding Gap (estimated) $ 2,846,000 prepared by Financial Services Department

34 Current Perspective Competitive Business Tax Rate prepared by Financial Services Department 2012 Business Tax Survey - Metro Vancouver 2010 Rank2012 RankMunicipality Commercial Mill RateResidential Mill Rate Commercial to Residential Tax Ratio 21Chilliwack Langley (City) White Rock Abbotsford West Vancouver Maple Ridge Langley (Township) Port Moody Surrey Mission Pitt Meadows Delta Port Coquitlam North Vancouver (District) Richmond New Westminster North Vancouver (City) Vancouver Burnaby Coquitlam ** Data courtesy of the National Association for Industrial and Office Parks (NAIOP)

35 Current Perspective Competitive Business Tax Rate prepared by Financial Services Department ** Data courtesy of the National Association for Industrial and Office Parks (NAIOP)

36 Current Perspective Changing Tax Base prepared by Financial Services Department

37 Current Perspective Evolving Tax Base - Value of Corporate Citizens prepared by Financial Services Department Property Tax Allocation Comparison Residential Class paying proportionately more of total tax!

38 Future Perspective prepared by Financial Services Department

39 Future Perspective Challenges  Evergreen Line Growth management Traffic and parking issues Police enforcement  Diminishing land inventories City will not be able to sell land to finance capital much into the future  Replacement & renewal of critical assets Assets are being used up and need more funding to replace & maintain  Work force (aging, skills shortage, knowledge/experience gap) The City will need to compete for talent and skilled labour Succession planning and alternative work force strategies (retirees)  Limited revenue opportunities under the Community Charter prepared by Financial Services Department

40 Future Perspective Opportunities  Evergreen Line Developments and revitalizations along the corridor Improved access to businesses Improved commuter options  Shared Services Potential cost savings Improved services Village of Anmore contributing to recreation costs  Debt Capacity City’s debt per capita currently favourable Debt allows the allocation of the capital cost to be spread over several generations  Leverage Technology prepared by Financial Services Department

41 What’s in the Budget Proposal? 2013 Operating Budget  Developed by City Management  Starting point was zero increase over 2012  No new extravagant programs  One new position proposed – Police Constable  There are 8 distinct categories driving the PROPOSED Budget increase of 6.65%: prepared by Financial Services Department

42 What’s in the Budget Proposal? 1.Revenue Changes ($108,600)- 0.37%  Increases to fees for programs, grants and other revenues are reducing the budget increase prepared by Financial Services Department

43 What’s in the Budget Proposal? prepared by Financial Services Department 2.Growth ($69,700)- 0.24%  New developments means new taxation  Used in 2013 to offset increased costs

44 What’s in the Budget Proposal? 3.Salaries ($570,700)+ 1.93%  No new City positions  Union collective agreements prepared by Financial Services Department

45 What’s in the Budget Proposal? 4.Inflation ($192,500)+ 0.65%  General increase to the cost of doing business  Similar to all businesses and households prepared by Financial Services Department

46 What’s in the Budget Proposal? prepared by Financial Services Department 5.Fire Hall Debt Levy ($143,500)+ 0.49%  Interest and principal repayment costs for the $3 Million second phase of borrowing to construct the new Hall  Total construction costs $11 Million  30 year term

47 What’s in the Budget Proposal? prepared by Financial Services Department 6.Legislation/Regulations ($138,100)+ 0.47%  0.28% ($82,900) to fund accounting requirements for increases to employee benefit obligations  0.19% ($55,200) to meet new Provincial regulation to control noxious weeds (e.g. knotweed, thistle, hogweed)

48 What’s in the Budget Proposal? prepared by Financial Services Department 7.High Service Priorities ($444,000)+ 1.51%  1.00% ($295,000) increase to the Asset Renewal Levy to provide ongoing funding to maintain and replace aging assets  0.37% ($109,000) to eliminate an unsustainable budget practice meant to generate budget savings from position vacancies  0.14% ($40,000) to provide a Council contingency to address unforeseen expenditures that typically arise each year

49 What’s in the Budget Proposal? prepared by Financial Services Department 8.Police Budget ($651,000)+ 2.21%  1.78% ($524,000) to fund Police union collective agreements  0.25% ($73,600) to fund a new recruit constable  0.33% ($98,800) to fund some minor increases to operations (e.g. vehicle, firearms, heat/light)  % ($45,400) reduction over 2012 funded from operational efficiencies

Capital Projects  Capital funding from taxation  1.5% tax increase to fund capital  Total 2013 capital budget proposed at $6.9 million  The capital plan mostly includes repair, renewal or safety projects like the ones listed below: prepared by Financial Services Department Capital ProjectCapital Budget Rocky Point Park sidewalk replacement$ 128,000 Westhill Pool repairs$ 220,000 Moody Street overpass sidewalk widening$ 750,000 Ioco Road safety improvements$ 330,000 Permanent Noons Creek Drive traffic calming measures $ 75,000 Sewer & drainage repairs and upgrades$ 1,500,000 Water repairs and upgrades$ 1,800,000

Budget Deliberations 2013 Budget Summary (1% ~ $295,000) prepared by Financial Services Department ItemAmount $ Tax % Comment 2012 Baseline Budget0.00 Starting point is same service level as Commitments: Revenue Changes-108, Fees, grants in lieu of taxes increases Growth-69, New tax revenues from development (BCA estimate) Salaries570, Salary contractual increases – no new positions Inflation/3 Year Average192, Inflation Inlet Centre Fire Hall Debt Levy143, Second Phase of Borrowing ($3 Million) Subtotal728, Unavoidable Legislation/Regulation138, Post Employment Benefits; Invasive plant mgmt. Operational Service Priorities - High444, Service levels prioritized HIGH by management Subtotal1,310, Police650, As presented at October 23, 2012 Council Meeting TOTAL1,961,

Budget Deliberations $531,600 Average 2012 Assessed Household * prepared by Financial Services Department 2013 Budget 2014 Budget 2015 Budget 2016 Budget 2017 Budget General Government2.95%1.11%1.62%1.54%1.51% Port Moody Police2.21%1.16%1.14%1.47%0.92% Asset Renewal Levy1.00% Fire Hall #1 Debt Levy0.49%0.00% Total Tax Increase6.65%3.27%3.76%4.01%3.43% * Average value based on April, 2012 BC Assessment Roll; 2013 Average assessed value will not be known until tax rolls published in 2013 ** Approximately $17 for every 1% increase (e.g. 6.65% x $17 ~ $114) Proposed Budget

Budget Deliberations $531,600 Average 2012 Assessed Household * prepared by Financial Services Department 2013 Budget 2014 Budget 2015 Budget 2016 Budget 2017 Budget General Government$ 50$ 20$ 30 $ 31 Port Moody Police Asset Renewal Levy Fire Hall #1 Replacement Levy Total Property Charges$ 114$ 59$ 70$ 78$ 70 * Average value based on April, 2012 BC Assessment Roll; 2013 Average assessed value will not be know until tax rolls published in 2013 ** Approximately $17 for every 1% tax increase (e.g. 6.65% x $17 ~ $114) Proposed Budget

Budget Deliberations Utilities – Water, Sewer, Garbage & Recycling, Drainage  City provides 4 utility services  Self balancing funds Capital and operating costs = Revenues billed  3 are funded by user fees; 1 by taxation Water, Sanitary Sewer, Garbage & Recycling – user fee Storm Drainage – taxation  Utilities are for the most part “regionalized” Significant cost passed from Metro Vancouver Jointly fund major infrastructure (dams, filtration plants, pipes, etc.) Local costs include workers/infrastructure with city boundaries prepared by Financial Services Department

Budget Deliberations (Net of 5% Discount) prepared by Financial Services Department 2012 Budget 2013 Budget $ Variance % Variance Sanitary Sewer Services$ 317 $ % Water Services$ 338 $ % Garbage & Recycling Services$ 307 $ % Subtotal (User Fee Charges)$ 962 $ % Storm Drainage Services$ 52$ 55$ % Total Utility Charges$ 1,014$ 1,017$ %

Budget Deliberations ($531,600 Average 2012 Assessed Household *) prepared by Financial Services Department General Gov’t.Police Asset Levy Fire Hall #1 Debt LevySubtotal Storm Drainage Utility User Fee Utilities (Water, Sewer, Garbage) City Metro Total with Utilities 2013 $ 50$ 38$ 17$ 9$114$ 3-$5$5$ $ 20$ 21$ 18$ 0$ 59$ 4-$3$27$ $ 30$ 21$ 19$ 0$ 70$ 4-$4$34$ $ 30$ 29$ 19$ 0$78$ 4$0$28$ $ 31$ 19$ 20$ 0$ 70$ 4$10$21$105 * Average value based on April, 2012 BC Assessment Roll; 2013 Average assessed value will not be known until tax rolls published in 2013 ** Approximately $17 for every 1% tax increase (e.g. 6.65% x $17 ~ $114)

Budget Deliberations ($531,600 Average 2012 Assessed Household *) prepared by Financial Services Department 2012 Budget 2013 Budget $ Variance User Fee/Tax Impact General Government$ 1,139$ 1,189$ % Port Moody Police$ 497$ 535$ % Subtotal$ 1,636$ 1,724$ % Asset Renewal Levy$ 51$ 68$ % Fire Hall #1 Replacement Levy$ 19$ 28$ % Subtotal - Operating$ 1,706$ 1,820$ % Storm Drainage$ 52$ 55$ % User Fee Utilities (Water, Sewer, Garbage & Recycling) $ 962 $ 00.00% Total Property Charges$ 2,720$ 2,837$ % * Average value based on April, 2012 BC Assessment Roll; 2013 Average assessed value will not be known until tax rolls published in 2013 ** Approximately $17 for every 1% tax increase (e.g. 6.65% x $17 ~ $114)

Budget Deliberations ($531,600 Average 2012 Assessed Household *) prepared by Financial Services Department $531,600 Household $750,000 Household $1,200,000 Household General Government$ 1,189$ 1,677$2,684 Port Moody Police$ 535$ 755$1,208 Subtotal$ 1,724$ 2,432$3,892 Asset Renewal Levy$ 68$ 96$153 Fire Hall #1 Replacement Levy$ 28$ 40$63 Subtotal - Operating$ 1,820$ 2,568$4,108 Storm Drainage$ 55$ 78$124 User Fee Utilities (Water, Sewer, Garbage & Recycling) $ 962 Total Property Charges$ 2,837$ 3,608$5,194 * Average value based on April, 2012 BC Assessment Roll; 2013 Average assessed value will not be known until tax rolls published in 2013

59 Budget Options Increase Non-Tax Revenues  Explore Other Revenues Revenue opportunities limited by the Community Charter May require capital investments. Sensitive revenues (e.g. pay parking)  Leverage Developer Contributions Share revenues from increased densities, or require developers to provide amenity contributions as part of development.  Leverage Assets The City has leased land instead of selling it (e.g. Inlet Centre Residences), and negotiated revenue sharing agreements (e.g. Boathouse Restaurant) on City land.  Increase User Fees Most programs are subsidized to some extent. The City could reduce or eliminate subsidies from taxation.  Special Capital Levies Special capital levies can address specific needs, and be discontinued once the initiative is complete or funding met (e.g. Fire Hall Debt Levy) prepared by Financial Services Department

60 Budget Options Expenditure Controls  Economies of Scale The City does pools its volumes with other cities in a regional purchasing consortium to leverage volume buying power.  Municipal Service Assessments Transparent, detailed review of each business unit Finding efficiencies Right level of service at right cost  Value The City uses value not just cost as the criteria for purchases to avoid long term costs (e.g. higher maintenance, shorter useful life, poor service, etc.)  Alternative Service Providers Some services can be contracted out successfully but others belong in the public domain and should not be run on the bottom line.  Partnerships/ Shared Services Partnerships reduce costs and transfer or broaden the financial risk Staffing, operating and capital costs can be shared prepared by Financial Services Department

61 Budget Options Service Adjustments  Built-In Service Levels Citizens are accustomed to a certain service level and usually want it maintained. Surveys can assist with service adjustments.  Which Services does the City adjust? This is an ongoing debate. No two people are going to agree on the same level for every service. Citizens generally expect the same services and service levels delivered in neighbouring communities.  Sustainable Service What is a reasonable or sustainable level of service? What level is required versus level desired?  Shared Services (e.g. dog control) The City purchases dog compounding services from Coquitlam. Are there other services we could share to maintain a high quality of service? prepared by Financial Services Department

62 Public Input prepared by Financial Services Department Questions, Comments, Suggestions ???