1. City of Port Moody 2013 - 2017 Draft Financial Plan Tuesday, February 26 th, 2013

2. 2 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 2012 2013 Commitments: Revenue Changes-108,612-0.37Fees, grants in lieu of taxes increases Growth-69,700-0.24New tax revenues from development (BCA estimate) Salaries570,6691.93Salary contractual increases – no new positions Inflation/3 Year Average192,5310.65Inflation Inlet Centre Fire Hall Debt Levy143,5000.49Second phase of borrowing ($3 Million) Subtotal 728,3882.46 Unavoidable Legislation/Re gulation 138,0900.47Post employment benefits; Invasive plant mgmt. Operational Priorities - High 444,0001.51Services prioritized HIGH by management Subtotal 1,310,4784.44 Police 650,9982.21October 23, 2012 Council Meeting TOTAL 1,961,4766.65January 31, 2013 Budget Town Hall Meeting

3. 3 2013 Budget Deliberations 2013 Budget Adjustments Budget Impact Tax Impact Proposed Tax Increase - Jan 31 Town Hall Meeting $1,961,4766.65% 1 Overhead Adjustment-64,200-0.21% 2 Compensation & Benefit Adjustments  -132,100-0.45% 3 Burrard Thermal Grant in Lieu (preliminary number) -54,000-0.18% 4 Growth (preliminary number) 42,5000.14% Revised Tax Increase $1,753,6765.95% 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.

4. 4 2013 Budget Deliberations Tax Impact to the Average Household ($531,600 Average 2012 Assessed Household) 20122013 AmountIncrease User Fee / Tax Impact AmountIncrease User Fee / Tax Impact Taxes $1,706$875.36%$1,807$1015.95% Drainage 5236.12%5535.77% Utilities 962293.16%96200.00% Combined Taxes & Utilities$2,720$1194.59%$2,824$1043.82% prepared by Financial Services Department

5. 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%$852,000 2013 – 2017: 1.00% per year Proposed1,621,000 2,473,000  Other Capital Funding (2013 - 2017) 1,076,000  Utility Capital Funding (2013 - 2017) 3,605,000 Total Annual Asset Funding (end of 2017)$ 7,154,000 Total Annual Infrastructure Funding Gap (estimated) $ 2,846,000 prepared by Financial Services Department

6. 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. 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. 8 Tri-City Comparison Average Assessed Household Average Assessed Value Total Charges Average Household * Total $ Increase Total % Increase Port Moody **$ 531,600$ 2,824$1043.82% Coquitlam ***$ 565,000$ 2,911$ 943.30% Port Coquitlam ****$ 449,000$ 1,988$ 943.40% 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)