FINANCIAL PLAN. A Path to Sustainability

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1 FINANCIAL PLAN A Path to Sustainability

2 CONTENTS DISTRICT OF SECHELT... 4 FINANCIAL PLANNING PROCESS AT A GLANCE FINANCIAL PLAN OVERVIEW FINANCIAL PLAN GENERAL FUND OPERATIONS TAXES AND UTILITIES TAXES AND UTILITIES NEW FOR YOUR TAX DOLLARS AT WORK EVERY DAY COMPARISON OF 2016 MUNICIPAL TAXES AND CHARGES HOW PROPERTY TAXES ARE SHARED BETWEEN PROPERTY CLASSES TOTAL CUMULATIVE DISTRICT DEBT DISTRICT PROGRAM AND FUNCTIONS MAYOR AND COUNCIL CORPORATE PROCESS & POLICIES MUNICIPAL FUNDS PROPERTY TAXES COMMUNITY INVESTMENT PROGRAM CONSOLIDATED STATEMENT OF FINANCIAL POSITION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FULL TIME EMPLOYEE (FTE) TOTALS PROGRAMS ADMINISTRATION AIRPORT ARTS AND CULTURE BUILDING INSPECTION BYLAW ENFORCEMENT COMMUNITY FACILITIES... 57

3 CORPORATE SERVICES DEVELOPMENT SERVICES ECONOMIC DEVELOPMENT ENGINEERING FINANCIAL SERVICES FLEET MAINTENANCE GOLF COURSE INFORMATION TECHNOLOGY LIBRARY MAYOR AND COUNCIL MUNICIPAL BUILDINGS NON-DEPARTMENTAL ACTIVITY PARKS PUBLIC WORKS SUNSHINE COAST RCMP E DIVISION SOLID WASTE WHARFS SANITARY SEWER OPERATIONS YEAR CAPITAL PLAN PROJECTS PROJECTS PROJECTS PROJECTS PROJECTS 100

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5 DISTRICT OF SECHELT The District of Sechelt is a rapidly growing community, located within the Sunshine Coast Regional District, 27 kilometers from the Langdale Ferry Terminal. The District s strong history and development has been driven by the beautiful coastal environment and a resident interest in arts and culture. Our Vision: We foster a creative, thriving community, sustaining a diverse and prosperous economy and a healthy natural environment Our Mission: To provide leadership within an engaged community

6 FINANCIAL PLANNING PROCESS AT A GLANCE The following schedule provides the dates for the Financial Plan process. August - September Budget preparation guidelines established. Department managers prepared and submitted their operating and capital budget requests. October- November Senior Management and Finance staff reviewed the department's budget submissions. December A draft Five-year Financial Plan with a focus on the base budget is presented to Council. January-April Council will consider additional budget items not included in the base budget. April-May Council will adopt the Five-year Financial Plan Bylaw and the Tax Rate Bylaw.

7 FINANCIAL PLAN OVERVIEW The proposed Financial Plan includes an overview of the 2017 priorities and work plan outlined in each department s business plan and budget. These priorities span both operating and capital initiatives aimed at enhancing the quality of life for the residents of the District of Sechelt. A financial plan serves four purposes. It is first and foremost a policy document. Through the financial plan, Council sets out strategic direction for the organization. Second, the financial plan outlines the long-term financial plan and highlights fiscal condition and challenges facing the municipality. Third, the financial plan is an operations guide, a tool that is used to evaluate efficiency and effectiveness. Lastly, it is a communication device that conveys public stewardship. The Financial Plan focuses on building long term stability and sustainability for Sechelt. Reserves and surpluses have steadily declined over the past 10 years, a trend that the District aims to reverse going forward. This guide has been prepared by the District of Sechelt Finance Department in consultation with all municipal departments and senior administration and outlines estimated costs for in two categories: Operating budget for all municipal services such as RCMP, parks, culture, roads, solid waste and wastewater. Capital budgets by division and program. The Program section provides the operating costs for individual programs and services in 2014, 2015, 2016 and This section also includes a program summary, highlights on the impacts affecting the 2017 budget. The final section includes estimates on capital costs for services such as roads, drainage, facilities, parks and fleets, among others Budget Highlights Tax increases over the past few years have been insufficient to keep up with the increased cost of providing services. To facilitate long term sustainability several changes have been proposed including the reallocation of expenses, as well as service fee and tax increases. A gradual increase in capital funding is required to maintain the District s capital assets.

8 Many of the increases in the operating expenses are the result of insufficient budgets from prior years, increases in costs for staffing, Water Treatment Centre operations, natural gas, water, and hydro. Historically property taxes have partially subsidized services such as sewer and solid waste removal. Reallocating these expenses to the end users will result in service fee increases for residents who receive these service Economic growth of approximately 2% is expected to contribute to the revenue for 2017 There will be no service level changes in 2017.

9 2017 FINANCIAL PLAN GENERAL FUND OPERATIONS General Fund 2016 Actual Historic Figures from Budget 2017 Adopted Budget Increase/ (Decrease) Revenue Property tax 5,805,977 7,279,078 7,861, ,811 Property tax from growth ,534 50,534 Fees, Rates and Sale of Services 2,932,924 2,800,652 2,896,916 96,264 Investment Income 410, , ,926 (141,458) Grants and Donations 1,059,440 1,047,867 1,050,187 2,320 Other revenue 9,156 13,307 12,100 (1,207) Total Revenue 10,218,250 11,626,288 12,215, ,264 Expenses: General Government (1,171,278) 3,160,862 2,741,709 (419,153) Sustainable Planning and Community Development 1,130,299 1,359,204 1,294,722 (64,482) Community Services 1,562,259 1,555,560 1,720, ,192 Public Works 1,613,710 1,578,050 1,834, ,881 Facilities 606, , ,044 (9,078) Police Services 2,065,830 1,929,424 2,064, ,453 Solid Waste 945, , ,601 54,000 Total Expenses 6,752,529 11,030,823 11,149, ,813 Net operating activity 3,465, ,465 1,065, ,451 Amortization 2,642,380 2,730,405 2,730,405 - Principle on debenture debt 129, , ,557 45,280 Transfer To (From) Reserves (271,178) (1,149) 444, ,586 Transfer To (From) Capital 847, , ,000 (739,839) Reduction of Capital Equity (2,642,380) (2,730,405) (2,730,405) - Transfer To (from) surplus 2,760,437 (716,502) 2, ,424 Estimated surplus (deficit) balance (623,994) (447,583)

10 General Fund 5 Year Forecast Revenue Property tax 7,861,889 8,450,847 8,887,845 9,352,978 9,826,780 Property tax from growth 50,534 79,124 85,300 89,731 94,427 Fees, Rates and Sale of Services 2,896,916 2,915,588 2,934,633 2,954,059 2,973,874 Investment Income 343, , , , ,476 Grants and Donations 1,050, , , , ,867 Other revenue 12,100 12,342 12,589 12,841 13,098 Total Revenue 12,215,552 12,790,756 13,271,142 13,779,198 14,297,522 Expenses: General Government 2,741,709 2,794,864 2,846,870 2,900,509 3,024,362 Sustainable Planning and Community Development 1,294,722 1,276,891 1,301,589 1,326,680 1,333,664 Community Services 1,720,752 1,749,082 1,779,820 1,811,173 1,827,557 Public Works 1,834,931 1,797,509 1,833,458 1,870,126 1,884,485 Facilities 559, , , , ,360 Police Services 2,064,877 2,136,244 2,210,809 2,287,586 2,361,612 Solid Waste 933, , , ,744 1,010,559 Total Expenses 11,149,636 11,274,275 11,500,031 11,751,915 12,014,599 Net operating activity 1,065,916 1,516,481 1,771,111 2,027,283 2,282,923 Amortization 2,730,405 2,730,405 2,730,405 2,730,405 2,730,405 Principle on debenture debt 398, , , , ,486 Transfer To (From) Reserves 444, , , , ,437 Transfer To (From) Capital 220, , , ,000 1,100,000 Reduction of Capital Equity (2,730,405) (2,730,405) (2,730,405) (2,730,405) (2,730,405) Transfer To (from) surplus 2, , , , ,000 Estimated surplus (deficit) balance (447,583) (297,583) (147,583) 2, ,417 Property Tax increase 6.95% 7.49% 5.17% 5.23% 5.07%

11 General Government 2014 Actual 2015 Actual Historic Figures from Actual 2016 Budget 2017 Adopted Budget Increase/ (Decrease) Salaries, Wages and Benefits 1,764,984 1,701,019 1,623,202 1,877,360 1,967,876 90,516 Contract Services 1,067, , , , ,000 (218,500) Professional Development and Dues 161, , , , ,550 2,040 Supplies and Materials 313, , , , ,700 (19,350) Debenture Interest 23 7, ,050 2,050 Other Expenses 440, ,409 (3,718,847) 311, ,150 (37,292) Allowance for Bad Debt 192, ,331 50, Contingency , ,000 Loss on Sale of Fixed Asset - 219, Recovery of Sewer Costs (338,617) (338,617) Total Direct Costs 3,939,718 3,979,446 (1,171,278) 3,160,862 2,741,709 (419,153) Fees, Rates and Sale of Services 615, , , , ,700 20,272 Investment Income 885,073 1,093, , , ,000 (99,990) Grants 676, , , , ,437 27,720 Other revenue 41,844 12,157 9,156 13,307 12,100 (1,207) Total Revenue Generated 2,218,707 2,688,356 1,593,777 1,705,442 1,652,237 (53,205) Net Operating Costs 1,721,011 1,291,090 (2,765,055) 1,455,420 1,089,472 (365,948) Amortization 98, , , , ,230 - Principle on debenture debt , , ,557 45,280 Transfer To (From) Reserves 413, ,308 (90,556) 224, , ,086 Transfer To (From) Capital (861,020) 2,121, , , ,000 (739,839) Transfer To (From) Surplus 437,632 (1,961,934) 2,760,437 (716,502) 2, ,424 Net Tax Requirement (contribution) 1,809,011 2,451, ,649 2,436,615 2,315,618 (120,997) Staffing per budget - FTEs

12 General Government 5 Year Forecast Salaries, Wages and Benefits 1,967,876 2,001,832 2,040,891 2,080,716 2,083,739 Contract Services 296, , , , ,400 Professional Development and Dues 142, , , , ,300 Supplies and Materials 297, , , , ,240 Debenture Interest 2,050 7,813 7,057 6,894 6,894 Other Expenses 274, , , , ,747 Allowance for Bad Debt Contingency 100, , , , ,572 Loss on Sale of Fixed Asset Recovery of Sewer Costs (338,617) (345,389) (352,297) (359,343) (366,530) Total Direct Costs 2,741,709 2,794,864 2,846,870 2,900,509 3,024,362 Fees, Rates and Sale of Services 632, , , , ,700 Investment Income 175, , , , ,000 Grants 832, , , , ,717 Other revenue 12,100 12,342 12,589 12,841 13,098 Total Revenue Generated 1,652,237 1,624,759 1,625,006 1,625,258 1,625,515 Net Operating Costs 1,089,472 1,170,105 1,221,864 1,275,251 1,398,847 Amortization 160, , , , ,230 Principle on debenture debt 398, , , , ,486 Transfer To (From) Reserves 444, , , , ,437 Transfer To (From) Capital 220, , , ,000 1,100,000 Transfer To (From) Surplus 2, , , , ,000 Net Tax Requirement (contribution) 2,315,618 2,846,816 3,153,205 3,462,764 3,842,000 Staffing per budget - FTEs 18.40

13 Community Services 2014 Actual 2015 Actual Historic Figures from Actual 2016 Budget 2017 Adopted Budget Increase/ (Decrease) Salaries, Wages and Benefits 525, , , , ,566 6,117 Contract Services 202, , , , ,855 5,390 Professional Development and Dues 4,075 5,523 7,114 7,825 9,325 1,500 Supplies and Materials 235, , , , ,335 9,600 Other Expenses 68,666 35,592 36,825 32,168 32, Loss on Sale of Fixed Asset 92, Grants 390, , , , , ,253 Inter-Department Allocation 22, Total Direct Costs 1,541,282 1,452,984 1,562,259 1,555,560 1,720, ,192 Fees, Rates and Sale of Services 67,682 65,811 71,133 55,515 14,515 (41,000) Grants and Donations 94,989 72,550 78,280 87,150 92,750 5,600 Total Revenue Generated 162, , , , ,265 (35,400) Net Operating Cost 1,378,611 1,314,623 1,412,846 1,412,895 1,613, ,592 Amortization 173, , , , ,560 - Transfer To (From) Reserves - - (81,250) (22,000) - 22,000 Net Tax Requirement (contribution) 1,551,710 1,471,001 1,499,668 1,561,455 1,784, ,592 Staffing per budget - FTEs

14 Community Services 5 Year Forecast Salaries, Wages and Benefits 736, , , , ,734 Contract Services 218, , , , ,896 Professional Development and Dues 9,325 9,512 9,702 9,896 10,094 Supplies and Materials 158, , , , ,387 Other Expenses 32,500 33,150 33,813 34,489 35,179 Loss on Sale of Fixed Asset Grants 565, , , , ,267 Inter-Department Allocation Total Direct Costs 1,720,752 1,749,082 1,779,820 1,811,173 1,827,557 Fees, Rates and Sale of Services 14,515 14,515 14,515 14,515 14,515 Grants and Donations 92,750 77,150 77,150 77,150 77,150 Total Revenue Generated 107,265 91,665 91,665 91,665 91,665 Net Operating Cost 1,613,487 1,657,417 1,688,155 1,719,508 1,735,892 Amortization 170, , , , ,560 Transfer To (From) Reserves Net Tax Requirement (contribution) 1,784,047 1,827,977 1,858,715 1,890,068 1,906,452 Staffing per budget - FTEs 9.41

15 Facilities 2014 Actual 2015 Actual Historic Figures from Actual 2016 Budget 2017 Adopted Budget Increase/ (Decrease) Salaries, Wages and Benefits 82, ,561 86,797 87, Contract Services 104, , , ,434 14,434 Professional Development and Dues Supplies and Materials 78,832 92, ,975 72,000 97,600 25,600 Debenture Interest 184, , , , ,725 (55,805) Other Expenses 99, , , , ,120 6,325 Inter-Department Allocation 3, Total Direct Costs 553, , , , ,044 (9,078) Fees, Rates and Sale of Services 678, , , , ,200 (123,500) MFA Actuarial Income 171, , , , ,926 (41,468) Total Revenue Generated 849, , ,574 1,033, ,126 (164,968) Net Operating Cost (296,000) (506,483) (338,361) (464,972) (309,082) 155,890 Amortization 399, , , , ,655 - Net Tax Requirement (contribution) 103,920 (96,345) 86,916 (16,317) 139, ,890 Staffing per budget - FTEs

16 Facilities 5 Year Forecast Salaries, Wages and Benefits 87,165 88,690 90,464 92,273 92,273 Contract Services 124, , , , ,045 Professional Development and Dues Supplies and Materials 97,600 99, , , ,646 Debenture Interest 109, , , , ,725 Other Expenses 140, , , , ,671 Inter-Department Allocation Total Direct Costs 559, , , , ,360 Fees, Rates and Sale of Services 699, , , , ,200 MFA Actuarial Income 168, , , , ,476 Total Revenue Generated 868, , , , ,676 Net Operating Cost (309,082) (317,776) (346,941) (356,825) (369,316) Amortization 448, , , , ,655 Net Tax Requirement (contribution) 139, , ,714 91,830 79,339 Staffing per budget - FTEs 1.00

17 Sustainable Planning & Community Development 2014 Actual 2015 Actual Historic Figures from Actual 2016 Budget 2017 Adopted Budget Increase/ (Decrease) Salaries, Wages and Benefits 614, , , , , ,588 Contract Services 194, , , , ,000 (172,500) Professional Development and Dues 16,948 17,078 11,891 29,670 20,000 (9,670) Supplies and Materials 25,755 11,845 8,267 6,700 7, Other Expenses 6,216 2,781 2,946 3,200 3,000 (200) Grants 131, , , , ,000 16,500 Total Direct Costs 990,004 1,501,529 1,130,299 1,359,204 1,294,722 (64,482) Fees, Rates and Sale of Services 271, , , , , ,825 Grants and Donations - 23,000 53,437 49,000 35,000 (14,000) Total Revenue Generated 271, , , , ,500 91,825 Net Operating Cost 718,656 1,077, ,848 1,009, ,222 (156,307) Amortization 2,649 2,649 2,649 2,650 2,650 - Transfer From (To) Reserves (52,500) (460,729) (88,928) (190,000) - 190,000 Net Tax Requirement (contribution) 668, , , , ,872 33,693 Staffing per budget - FTEs

18 Sustainable Planning & Community Development 5 Year Forecast Salaries, Wages and Benefits 874, , , , ,457 Contract Services 253, , , , ,193 Professional Development and Dues 20,000 20,400 20,808 21,224 21,648 Supplies and Materials 7,500 7,650 7,803 7,959 8,118 Other Expenses 3,000 3,060 3,122 3,184 3,248 Grants 137, , , , ,000 Total Direct Costs 1,294,722 1,276,891 1,301,589 1,326,680 1,333,664 Fees, Rates and Sale of Services 406, , , , ,500 Grants and Donations 35, Total Revenue Generated 441, , , , ,500 Net Operating Cost 853, , , , ,164 Amortization 2,650 2,650 2,650 2,650 2,650 Transfer From (To) Reserves Net Tax Requirement (contribution) 855, , , , ,814 Staffing per budget - FTEs 8.50

19 Police Services Historic Figures from Actual 2015 Actual 2016 Actual 2016 Budget 2017 Adopted Budget Increase/ (Decrease) Salaries, Wages and Benefits 286, , , , ,777 3,353 Contract Services 680,953 1,207,434 1,526,490 1,353,000 1,585, ,300 Professional Development and Dues Supplies and Materials ,000 10,600 9, Other Expenses 624, , , , ,200 7,200 Grants 111,346 85,168 93, ,000 - (117,000) Total Direct Costs 1,703,165 1,763,349 2,065,830 1,929,424 2,064, ,453 Fees, Rates and Sale of Services 70,487 52,426 80,352 69,000 74,000 5, Grant 78, ,512 96, ,000 90,000 (17,000.00) Total Revenue Generated 148, , , , ,000 (12,000) Net Tax Requirement (contribution) 1,554,194 1,591,411 1,889,413 1,753,424 1,900, ,453 Staffing per budget - FTEs

20 Police Services 5 Year Forecast Salaries, Wages and Benefits 281, , , , ,291 Contract Services 1,585,300 1,647,780 1,712,576 1,779,388 1,849,216 Professional Development and Dues Supplies and Materials 10,600 10,812 11,028 11,249 11,474 Other Expenses 187, , , , ,631 Grants Total Direct Costs 2,064,877 2,136,244 2,210,809 2,287,586 2,361,612 Fees, Rates and Sale of Services 74,000 74,000 74,000 74,000 74,000 Grant 90,000 90,000 90,000 90,000 90,000 Total Revenue Generated 164, , , , ,000 Net Tax Requirement (contribution) 1,900,877 1,972,244 2,046,809 2,123,586 2,197,612 Staffing per budget - FTEs 4.00

21 Public Works 2014 Actual Historic Figures from & Five Year Forecast Actual 2016 Actual 2016 Budget Adopted Budget Increase/ (Decrease) Salaries, Wages and Benefits 879,082 1,036, , ,740 1,088,331 89,591 Contract Services 430, , , , ,500 61,500 Professional Development and Dues 14,190 11,524 14,247 29,800 31,500 1,700 Supplies and Materials 299, , , , ,200 83,700 Debenture Interest Other Expenses 127, , , , ,400 20,390 Loss (Gain) on Sale of Fixed Asset 62,505 (314) (1,815) Inter-Department Allocation 11, Total Direct Costs 1,824,889 2,169,780 1,613,710 1,578,050 1,834, ,881 Fees, Rates and Sale of Services 96, ,816 58,244 74, ,400 61,800 Grant 3,679 2,256 2, Total Revenue Generated 100, ,072 60,500 74, ,400 61,800 Net Operating Cost 1,724,527 1,785,708 1,553,210 1,503,450 1,698, ,081 Amortization 1,825,687 1,929,936 1,931,020 1,948,310 1,948,310 - Transfer From (To) Reserves - (492,321) (10,444) (13,500) - 13,500 Net Tax Requirement (contribution) 3,550,214 3,223,323 3,473,786 3,438,260 3,646, ,581 Staffing per budget - FTEs

22 Public Works 5 Year Forecast Salaries, Wages and Benefits 1,088,331 1,107,377 1,129,525 1,152,115 1,152,115 Contract Services 269, , , , ,944 Professional Development and Dues 31,500 32,130 32,772 33,428 34,096 Supplies and Materials 259, , , , ,565 Debenture Interest Other Expenses 186, , , , ,765 Loss (Gain) on Sale of Fixed Asset Inter-Department Allocation Total Direct Costs 1,834,931 1,797,509 1,833,458 1,870,126 1,884,485 Fees, Rates and Sale of Services 136, , , , ,400 Grant Total Revenue Generated 136, , , , ,400 Net Operating Cost 1,698,531 1,661,109 1,697,058 1,733,726 1,748,085 Amortization 1,948,310 1,948,310 1,948,310 1,948,310 1,948,310 Transfer From (To) Reserves Net Tax Requirement (contribution) 3,646,841 3,609,419 3,645,368 3,682,036 3,696,395 Staffing per budget - FTEs 12.00

23 Solid Waste 2014 Actual Historic Figures from & Five Year Forecast Actual 2016 Actual 2016 Budget Adopted Budget Increase/ (Decrease) Contract Services 873, , , , ,601 54,000 Total Direct Costs 873, , , , ,601 54,000 Fees, Rates and Sale of Services 832, , , , ,601 67,867 Total Revenue Generated 832, , , , ,601 67,867 Net Tax Requirement (contribution) 40,051 (3,746) 60,355 13,867 - (13,867) Solid Waste Contract Services 933, , , ,744 1,010,559 Total Direct Costs 933, , , ,744 1,010,559 5 Year Forecast Fees, Rates and Sale of Services 933, , , ,744 1,010,559 Total Revenue Generated 933, , , ,744 1,010,559 Net Tax Requirement (contribution)

24 2017 TAXES AND UTILITIES Property Tax 2017 Property Tax Requirement 7,912, Property Tax Requirement 7,279,977 Total Revenue Increase Required 632,988 Revised Funding Strategy Property Tax from Growth 50,534 Increase Utility Class rate to $40 per $ ,246 Increased Tax Rate 503, ,988 This will require a 6.95% property tax increase. Sewer 2017 Sewer Levy Requirement 2,293, Sewer Levy Requirement 1,744,058 Total Revenue Increase Required 549,309 Revised Funding Strategy Sewer Levies from Growth 106,422 Increased Parcel Tax Levy 519,585 Decreased User Rate (76,698) 549,309 This will require the parcel tax to increase from $115 to $274 and the User fee to decrease from $390 to $371. The net increase is $140. Solid Waste 2017 Solid Waste Levy Requirement 951, Solid Waste Levy Requirement 883,547 Total revenue increase required 67,867 Revised Funding Strategy Solid Waste Levies from Growth 20,057 Increased User Rate 47,810 67,867 This will require the solid waste levy to increase from $201 to $216.

25 2016 TAXES AND UTILITIES Based on the average 2016 assessment of: $429, Municipal taxes per household: Administrative Services $ Protective services $ Infrastructure Maintenance $ Community Development $79.28 Parks $ Library, Arts and Culture $42.80 Property Management $81.11 Total $1, Utilities per household: Garbage User Fee $ Sewer User Fee $ Sewer Parcel for Sewer Infrastructure $ Total $ Total Taxes and Utilities Collected for Average Household $1, Regional District Water User Fee $255.41

26 NEW FOR 2017 Influencers Increase Details Engineering and Development Services $88,000 Anticipated increase in service fees collected from Engineering and Development Services due to growth in Sechelt Staffing $360,623 Increased cost for existing staff, increased staffing levels and staff training Budget Adjustment $102,100 Insufficient budgets from previous years result in an increase needed for expenses Project Expenses $90,734 Integrated Community Sustainability Plan project, Trail Bay Wharf RCMP $76,200 Increased contract costs Fleet Maintenance $33,000 Increased vehicle maintenance costs Legal Expenses $22,000 Adds a budget for legal fees to the budget, previous budgets did not include legal fees Municipal Utilities $20,814 Increased costs for hydro, natural gas and water charges municipal buildings Sewer Costs $264,081 Increased costs based on 2015 & 2016 amounts, including increased costs for Liquid Waste Management Plant, warranty renewals, increased insurance costs Solid Waste $104,504 Increased cost of recycling collection and elimination of subsidy from property taxes Contingency $200,000 Adds a contingency budget for 2017 Capital Assets $220,000 Increased funding for maintenance of capital assets

27 YOUR TAX DOLLARS AT WORK EVERY DAY Tax revenue is invested in services and infrastructure that maintain the high quality of life in Sechelt residents enjoy. Typical Daily Household Tax and Utility Expenditures Income Taxes per year Sechelt General Municipal Taxes Cell Phone Electricity Sechelt Garbage, Water and Sewer User Fees School District Natural Gas Internet Landline Telephone Levy for Regional District, BC Assessment, MFA Fire District Parcel - SCRD Rec Sechelt Sewer Parcel for Sewer Infrastructure Regional Hospital $3.43 $2.72 $2.71 $2.33 $2.32 $1.81 $1.39 $1.10 $0.80 $0.46 $0.32 $0.32 $0.27 District taxes and utilities account for $6.08 per day of the average household expenses as shown. $40.73 Valuations based on: Property taxes are based on the 2016 British Columbia Assessment Authority average assessed value in Sechelt of $429,737. Additional expenses were provided by 2014 Statistics Canada average BC household expenditures. Municipal user fees include water charges paid to the Regional District of Sechelt. Property taxes and utility fees are based on the 2016 budget and tax rates. Service costs are based on the 2016 adopted budget. Additional statistics are for 2016 and were sourced from

28 COMPARISON OF 2016 MUNICIPAL TAXES AND CHARGES Below are the Municipal Taxes and Charges on representative houses with comparable value to the District of Sechelt: Municipalities House Value General Municipal Total Total Res Parcel Taxes Total Res. User Fees Maple Ridge 503,865 2, Abbotsford 428,986 2, Mission 414,523 1, ,167 Kelowna 508,291 1, West Kelowna 503,263 1, Colwood 471,039 1, Lake Country 506,011 1, ,174 Penticton 374,274 1, Fernie 455,531 1, Qualicum Beach 444,890 1, Peachland 452,970 1, Sidney 493,209 1, Invermere 430,859 1, Vernon 386,860 1, ,196 Summerland 416,701 1, Coldstream 490,514 1, Langford 445,337 1, Sechelt 429,737 1, Pemberton 472,925 1, * Statistics are for 2016 and were sourced from

29 HOW PROPERTY TAXES ARE SHARED BETWEEN PROPERTY CLASSES The District of Sechelt collects taxes from a variety of sources each year with the majority, 85%, coming from residential property taxes. Compared with municipalities across British Columbia:

30 TOTAL CUMULATIVE DISTRICT DEBT TOTAL DEBT 12,000,000 10,000,000 8,000,000 5,555,777 4,815,007 4,074,237 6,000,000 6,296,547 3,333,467 2,592,697 4,000,000 2,000,000 4,991,098 4,732,362 4,437,205 4,103,995 3,737,277 2,321, General Fund Sewer Fund

31 DISTRICT PROGRAM AND FUNCTIONS To serve the citizens of the District of Sechelt operations are divided into 23 programs. These programs represent everything the District does as part of its annual operations. These include police, road maintenance, parks and recreation programs, development services, and sewer, as well as administrative services that support Council and the other operating programs such as human resources, payroll, accounting, and information technology. These programs are grouped within two distinct hierarchies: the corporate management structure and the function provided to the general public. Corporate Management Hierarchy Within the corporate management structure, each program is assigned to a department. The department director has authority over all programs within his/her department and represents the interest of the department at the Senior Management table. The departments are: ADMINISTRATION CORPORATE AND FINANCIAL SERVICES PLANNING AND DEVELOPMENT ENGINEERING AND OPERATIONS Functional Hierarchy Each program performs a variety of functions to provide required services and meet their goals. The Program Areas are: Airport Arts and Culture Building Inspection Bylaw Enforcement Administration Corporate Services Development Services Information Technology Financial Services Mayor and Council Economic Development Engineering Municipal buildings Community Facilities Wharfs Fleet Maintenance Golf Course Library Parks Public Works RCMP Solid Waste Sanitary Sewer Operations

32 MAYOR AND COUNCIL The Mayor and Council are the elected legislative body that represent and guide the District of Sechelt. They are elected every four years by the residents of Sechelt and subsequently appointed during the month of November. Once appointed, the Mayor and Council work together with staff to identify and adopt appropriate policy, program, and budget priorities for the District of Sechelt. The flexible structure ensures that all members contribute to accomplishing the tasks set out in the District's strategic planning documents. Council's services include, but are not limited to: Policy Formation The primary responsibility of the Mayor and Council is to enact public policy in response to current and anticipated needs within the political, administrative and fiscal domains. Community Leadership By taking part in community events and providing community leadership, the legislative and policy-making body of the municipal government is able to take a proactive approach to enhancing the quality of life for residents in Sechelt. Committees and Commissions Mayor and Council oversee committees and commissions to ensure that the interests of the citizens are represented in current and upcoming initiatives. Governmental Communication and Collaboration The District's elected officials are also responsible for connecting with other government agencies. Through this function, the District is able to secure grant funding, coordinate large-scale projects, identify areas of opportunity and ensure that Sechelt is represented on the local, provincial and national fronts. Public Communication One of the most important areas of responsibility for Mayor and Council is their role as an information resource. By providing citizens with better information, the District's elected officials are able to gather informed feedback and identify goals. This two way flow of information also lets Council announce future plans and inform the public on how they intend to achieve their goals. This

33 framework is consistent with the Charter principle that Council has the flexibility to set its own objectives, based on public interest, and submit reports on progress to its citizens. To meet these objectives Mayor and Council participate in the following Committees: Accessibility Advisory Committee Noel Muller Affordable Housing (Sunshine Coast Housing Society Darnelda Siegers Airport Development Advisory Committee Doug Wright Community Investment Program Grant Review Committee Alice Lutes Community Justice Program Alice Lutes Downtown Revitalization Advisory Committee Darren Inkster Finance Advisory Committee Dormant Harbour Authority Doug Wright Human Resources Committee/Personnel Committee Councillors Muller and Wright Island Coastal Economic Trust Mayor Milne Lower Mainland Treaty Advisory Committee - Dormant Municipal Finance Authority Mayor Milne, Alternate Darren Inkster SC Emergency Preparedness Executive Committee Mayor Milne SCRD Policing Committee Doug Wright SCRD Transportation Committee Doug Wright Sechelt and District Chamber of Commerce Mike Shanks Sechelt Downtown Business Association Noel Muller Sechelt Public Library Association Board Darnelda Siegers Southern Sunshine Coast Ferry Advisory Committee Mike Shanks Sunshine Coast Regional District Board Alice Lutes, Alternate Doug Wright Youth Action Advisory Committee Alice Lutes

34 CORPORATE PROCESS & POLICIES Financial Plan Process and Timing The Financial Plan process began in Guidelines, a timetable, and current operating reports were sent to all the program coordinators. A capital plan and a financial plan for each program were prepared by the managers. During October, each department director reviewed his/her program operating budgets. In December 2016, the Financial Plan were presented to Council. Council will consider the information received from District staff, as well as the input received from the general public to make any necessary adjustments to the plan. In April 2017, the District will receive the Authenticated Roll from the BC Assessment Authority, allowing us to determine the amount of new growth in the District. With that information, revenue projections will be revised in the Financial Plan. In early May, Council will adopt the Financial Plan and Tax Rate Bylaws at an open Council meeting. Budget Basis The operating budget is prepared on an incremental basis. This means it focuses on changes from the previous year's budget. These changes might include new or expanded programs; non-controllable cost increases; salary and employment benefit increases; and the removal or addition of one-time, non-recurring revenues and expenditures from the preceding year. MUNICIPAL FUNDS Operating and Capital Funds The District has two operating and capital funds: the General Fund and the Sanitary Sewer Fund. In broad terms, the General Fund represents the cost of providing all municipal services other than sanitary sewer. Costs that are in excess of user fees and other non-tax revenue raised are funded by property taxes. The Community Charter requires that all revenue sources be identified to cover all anticipated expenditures.

35 PROPERTY TAXES Service Levels The majority of the District of Sechelt s revenue is obtained through property taxes. When preparing the budget, we first determine the amount of revenue required to provide all municipal services to our residents. Then we determine the amount of revenue (other than property taxes) that we can expect to receive through fees and charges, federal and provincial government grants, investment income, etc. The difference between the budgeted expenditures and the other revenue represents the amount of property tax revenue the District must collect to provide the services to the levels prescribed by Council. To adjust the amount of property taxes required, we must adjust the service levels provided. If we lower the service level provided, we can lower the budgeted expenditures and consequently lower the property tax revenue requirement. Our challenge is to determine the appropriate service level to provide weighed against the cost of providing that service. When the cost of providing a service increases (through inflation and other cost of living increases), we must either raise more revenue to provide the same level of service or adjust the level of service provided. The Tax Rate The District determines the "tax rate" (a charge per thousand) by dividing the sum of all the property values in the District by the amount of property tax revenue that must be collected. The tax rate is simply a means of determining how much each individual property owner must pay. The rationale for this approach is that owners of larger properties should pay more than owners of smaller properties or that these individuals have an ability to pay more than those in lesser valued properties. An alternative approach would be to charge every home the same amount regardless of its value. We have chosen to adopt the former approach whereby the actual amount paid by each property owner is determined by the value of his or her property. Consequently, we must calculate the tax rate each year based on the revenue we must collect and the assessed values of all the properties in the District at that time. Changes in the total assessed values in the District will cause the tax rate to change, but will have no effect on the amount each property owner must pay unless his/her assessed value change is different than the average. The following table illustrates the effect assessments have on the tax rate.

36 Tax Rates and Property Tax Revenue The following example shows how much each of five property owners must pay to provide the District with $5,000. Please note that although the tax rate changes, the amount the District collects remains the same. In the above example, the owners of properties 1, 2, and 5 pay the same amount of property taxes in both years as the assessed value of their property changed by the same amount as the average of the entire group. The assessed values of properties 2 and 3 changed by different amounts; therefore, the total amount they paid was different. Property Tax Increases Much of the discussion of the budget will focus on the effect the budget will have on property taxes. If the cost of providing the same level of service increases and there are no additional revenue sources, the District must increase the property taxes collected to provide these same services. The only alternative is to adjust the level of service provided. To ensure everyone is fully aware of how much more they are paying for the services we provide, any property tax increase will be expressed as a percentage of the total amount we need to collect. The actual tax rate changes from year to year will not reflect the property tax increase as it is also affected by the assessed values as shown on the example on the previous page. The following example outlines the effect a 5% tax increase has on the tax rate and the total amount paid by the property owners (the same data from the first example is used).

37 Property Tax Increases and the Tax Rate You will note from the above example that although the tax rate decreased by 4.5%, the total amount collected by the District actually increased by 5%. Unlike the federal and provincial governments, we will express this to our taxpayers as a 5% increase in property taxes as opposed to a 4.5% decrease in the tax rate. This is significant to note as the federal and provincial government claim that they have not increased income taxes even when they are collecting more money from you. Assuming that the combined federal and provincial income tax rate is 40%, individuals earning $40,000 a year will pay $16,000. If these individuals receive a 5% raise (new income level = $42,000), he/she will pay 5% more in income tax (40% of $42,000 = $16,800) even though the rate is still 40%.

38 COMMUNITY INVESTMENT PROGRAM The District may support voluntary, not-for-profit organizations by providing monetary or in-kind grants. These grants are subject to annual review and approval. Fees for service and operating grants The largest portion of the grants is given to organizations either in the form of fees for service or operating grants. These organizations provide a service to the residents of the District that is deemed desirable by Council. In 2016 the following fees for service agreements and operating grants included in the budget were: Arrowhead Clubhouse Society Coast Cultural Alliance Society Coast Recital Society Deer Crossing - the Art Farm Society Sechelt Downtown Business Association Special Olympics, Sunshine Coast St. Hilda's Anglican Church - S.C. Cold Weather Shelter Sunshine Coast Arts Council Sunshine Coast Centre, Royal Astronomical Society of Canada Sunshine Coast Festival of the Written Arts Sunshine Coast Marine Rescue Society Sunshine Coast Natural History Society Sunshine Coast Salmonid Enhancement Sunshine Coast Tourism Tetrahedron Outdoor Club Transportation Choices Sunshine Coast Society (TraC) Restorative Justice program of the Sunshine Coast Sunshine Coast Community Services- Youth Outreach Program Sunshine Coast Community Services - Police-based Victim Services - Crisis Support Team Sunshine Coast Hospice Society Sunshine Coast Resource Centre Society Sunshine Coast Army Cadets Support

39 Property Tax Exemptions The Community Charter has provisions for Council to grant permissive tax exemptions for specified categories of property. Council Permissive Exemption Policy stipulate exemptions for the following organization types meeting the qualifications: Charitable and Philanthropic Organizations Not for Profit Corporations Places for Public Worship Recreation Facilities Private Hospitals The 2017 permissive exemptions are estimated to be $548,472. Other Revenue Sources Grants-in-lieu of property taxes The District of Sechelt receives grant funding from the federal and provincial governments, their agencies, and Crown Corporations equal to the taxes that would be assessed on land and improvements. The total amount of grants-in-lieu of taxes in 2017 is $12,997. 1% Utility Tax The 1% utility tax is a tax-in-lieu on utility companies in exchange for the tax exemption status of their linear assets. The total amount of 1% utility tax revenues is estimated to be $208, for Telus $ 23, BC Hydro $ 126, Fortis $ 28, Coast Cable* $ 29, *Based on assessed value of property for 2017 $ 208,969.28

40 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

41 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

42 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

43 FULL TIME EMPLOYEE (FTE) TOTALS Program 2011 FTE 2012 FTE 2013 FTE 2014 FTE 2015 FTE 2016 FTE 2017 FTE Administration Total Communication Total Arts, Culture & Heritage Total Corporate Services Total Human Resources Total Financial Services Total Information Services Total RCMP Total Bylaw Enforcement Services Total Building Inspection Service Total Planning & Development Total Engineering Total Public Works Total Parks Operations Total Property Management Total Sustainabiltiy Total Sewer Total Grand Total

44 PROGRAMS This section contains detailed information about each program (in department order) in the general revenue fund. The program details are divided into four sections: Purpose- Provides a broad description of the purpose of the program. Impact on the 2017 Budget- Represent the events/amounts faced by each program prior to preparing the 2017 budgets. These amounts are required to maintain the same levels of service. Service Level Changes included in the 2017 Budget- Represent service level adjustments proposed. Included in this section is an indication of the impact the service level adjustment will have on the program delivery. A detailed report showing the 2014, 2015,and 2016 year to date actual amounts by the type of revenue or expenditure, as well as the 2016 adopted and 2017 proposed budget amounts. Of note in this section is the Net Tax Requirement (Contribution) line. This line indicates the property taxes required to provide this program.

45 ADMINISTRATION Purpose: Administration is comprised of five core service sections: Strategic Planning, Communications, Publications, Media Relations and Community Relations. The five core services work in concert to create a cohesive point of contact for the District. The primary functions of each service sector are: Strategic Planning The strategic portion of the Communications department assists in the development of strategies that deliver District messaging to the desired stakeholders in a clear, timely and concise manner. As part of the District's management team, the Communications Officer is responsible for developing varied communications that engage audiences in District programs and activities. The strategic planning service is designed to positively influence audience attitudes regarding the direction the District is taking in the management of operations and resources. Communications The communications service section Coordinates the District s print, broadcast and social media presence and messaging. This also includes drafting correspondence on behalf of Mayor and Council. Publications The District of Sechelt produces a wide array of print information resources. The Communications department oversees the production of communications resources including brochures, reports and supplies. Media Relations The media relations service is provided so that productive working relationships with the media can be maintained and a contact point for media releases, inquiries and briefings can be readily available. Community Relations As the primary contact point for communications, the department also serves as the key liaison with Council and Departmental Managers on District celebrations, events, consultations and information meetings. In addition, the department acts as the primary contact for inquiries received via the website and social media outlets

46 Impact on the 2017 Budget: Staff Appreciation Program 2017 budget increased to order 10 year pins $2,500 Contracted Services budget increased for Annual Report and Community Update Newsletters - $8,000 Increased budget for wages and benefits for existing and new staff - $71,516 Supplies budget increased based on three-year average for actual costs - $3,000 Increased budget for Citizen Satisfaction Survey - $15,000 Decreased printing budget based on three-year average ($16,000) Eliminate th anniversary celebrations budget funded from reserve- ($35,000) Eliminate transfer from reserve - $35,000 Recovery of costs from the sewer utility ($63,263) Professional development and travel budget were increased based on a 3 year average - $3,000 Service Level Changes included in the 2017 Budget: None.

47 Program: Administration 2014 Actual 2015 Actual 2016 Actual 2016 Budget 2017 Adopted Budget Increase/ (Decrease) Salaries, Wages and Benefits 188, , , , ,520 71,516 Contract Services 262, ,865 93,010 68,000 56,000 (12,000) Professional Development and Dues 14,873 11,091 15,492 10,500 13,500 3,000 Supplies and Materials 5,972 38,660 13,337 47,000 29,000 (18,000) Other Expenses 28,790 11,377 7,195 16,200 14,700 (1,500) Recovery of Sewer Costs (63,263) (63,263) Total Direct Costs 500, , , , ,457 (20,247) None Total Revenue Generated Net Operating Costs 500, , , , ,457 (20,247) Transfer To (From) Reserves - - (35,000) (35,000) - 35,000 Net Tax Requirement (contribution) 500, , , , ,457 14,753 Staffing per budget - FTEs Salaries, Wages and Benefits 385, , , , ,114 Contract Services 56,000 57,120 58,262 59,427 60,616 Professional Development and Dues 13,500 13,770 14,045 14,326 14,613 Supplies and Materials 29,000 29,580 30,172 30,775 31,391 Other Expenses 14,700 14,994 15,294 15,600 15,912 Recovery of Sewer Costs (63,263) (64,528) (65,819) (67,135) (68,478) Total Direct Costs 435, , , , ,168 5 Year Forecast None Total Revenue Generated Net Operating Costs 435, , , , ,168 Transfer To (From) Reserves Net Tax Requirement (contribution) 435, , , , ,168 Staffing per budget - FTEs 2.50

48 AIRPORT Purpose: The Sechelt Airport is located at the top of Field Road in Wilson Creek. The airport currently provides service to the public via three commercial operators. Lots at the airport are available to lease for commercial and recreational purposes. An airport expansion plan has been proposed to attract more business to Sechelt. Impact on the 2017 Budget: Hydro rate increase of 3.5% - $135 Hydro budget decreased based on three-year average for actual costs - ($1,727) Equipment maintenance budget decreased based on three-year average for actual costs - ($1,500) Grounds maintenance budget decreased based on three-year average for actual costs - ($2,000) Supplies budget decreased based on three-year average for actual costs - ($2,000) Service Level Changes included in the 2017 Budget: None

49 Program: Airport 2014 Actual 2015 Actual 2016 Actual 2016 Budget 2017 Adopted Budget Increase/ (Decrease) Salaries, Wages and Benefits 18,315 18,279 18,302 18,600 18,600 - Contract Services 120,924 2,399 7,536 2,000 2,000 - Professional Development and Dues 3,675 1, ,400 1,400 - Supplies and Materials 109,330 85,257 83,832 88,000 82,500 (5,500) Other Expenses 13,879 18,448 15,509 19,192 15,900 (3,292) Loss on Sale of Fixed Asset - 219, Total Direct Costs 266, , , , ,400 (8,792) Fees, Rates and Sales of Service 144, ,774 95, , ,000 - Total Revenue Generated 144, ,774 95, , ,000 0 Net Operating Costs 121, ,095 29,591 (4,808) (13,600) (8,792) Amortization 24,219 26,128 30,883 30,695 30,695 0 Net Tax Requirement (contribution) 146, ,223 60,474 25,887 17,095 (8,792) 5 Year Forecast Salaries, Wages and Benefits 18,600 18,926 19,305 19,691 19,691 Contract Services 2,000 2,040 2,081 2,123 2,165 Professional Development and Dues 1,400 1,428 1,457 1,486 1,516 Supplies and Materials 82,500 84,150 85,833 87,550 89,301 Other Expenses 15,900 16,218 16,542 16,873 17,210 Loss on Sale of Fixed Asset Total Direct Costs 120, , , , ,883 Fees, Rates and Sales of Service 134, , , , ,000 Total Revenue Generated 134, , , , ,000 Net Operating Costs (13,600) (11,238) (8,782) (6,277) (4,117) Amortization 30,695 30,695 30,695 30,695 30,695 Net Tax Requirement (contribution) 17,095 19,457 21,913 24,418 26,578