City of Port Moody Draft Financial Plan Tuesday, February 26 th, 2013

Budget Deliberations 2013 Budget Summary (1% ~ $295,000) prepared by Financial Services Department ItemAmount $ Tax % Comment 2012 Baseline Budget 0.00 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) Subtotal 728, Unavoidable Legislation/Re gulation 138, Post employment benefits; Invasive plant mgmt. Operational Priorities - High 444, Services prioritized HIGH by management Subtotal 1,310, Police 650, October 23, 2012 Council Meeting TOTAL 1,961, January 31, 2013 Budget Town Hall Meeting

Budget Deliberations 2013 Budget Adjustments Budget Impact Tax Impact Proposed Tax Increase - Jan 31 Town Hall Meeting $1,961, % 1 Overhead Adjustment-64, % 2 Compensation & Benefit Adjustments  -132, % 3 Burrard Thermal Grant in Lieu (preliminary number) -54, % 4 Growth (preliminary number) 42, % Revised Tax Increase $1,753, % prepared by Financial Services Department  Subsequent to the Agenda report, staff have been working with a consultant and identified additional annual net savings for benefits. Based on an effective date of May/2013, $66,000 in additional savings relate to 2013.

Budget Deliberations Tax Impact to the Average Household ($531,600 Average 2012 Assessed Household) AmountIncrease User Fee / Tax Impact AmountIncrease User Fee / Tax Impact Taxes $1,706$875.36%$1,807$ % Drainage % % Utilities % % Combined Taxes & Utilities$2,720$ %$2,824$ % prepared by Financial Services Department

5 Annual Asset Funding What should the annual funding be?  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

6 Historical Perspective Retroactive Infrastructure Funding Gap  City has not addressed the funding gap retroactively  In prior years, assets were being used up much faster than funds were set aside or raised  If asset replacement funding was in place, the Asset Reserve would have more funds today to meet planned capital replacement  Because the funding was not in place, the Asset Reserve is insufficient to fund major capital replacements (e.g. Fire Hall)  Therefore, the City must substitute debt to provide capital funding, using asset levies to fund debt service (e.g. Police Building, Recreation Centre) prepared by Financial Services Department

7 Asset Reserve What should the Asset Reserve balance be?  Depends on what is planned to be replaced, and when  A detailed Asset Management Plan will provide a schedule of future major capital replacements  By listing what will be required and when, annual funding contributions and reserve balances will be determined  The City has a 2013 Capital Project to develop a Asset Management Plan which will provide a planning tool  The amount of the City’s assets used up to date is approximately $87 Million. This is the amount the City should have in the Asset Reserve to fund all replacements without debt  The $87 Million is historical value; replacement value would be much higher prepared by Financial Services Department

8 Tri-City Comparison Average Assessed Household Average Assessed Value Total Charges Average Household * Total $ Increase Total % Increase Port Moody **$ 531,600$ 2,824$ % Coquitlam ***$ 565,000$ 2,911$ % Port Coquitlam ****$ 449,000$ 1,988$ % prepared by Financial Services Department * Total Charges includes taxes, levies and utility user fees **Based on proposed 5.95% tax increase *** Information provided by City of Coquitlam (approved) **** Information provided by City of Port Coquitlam (proposed)