Purpose To recommend adoption of the 2017 provisional budget for the Comox Strathcona Regional Hospital District (CSRHD).

Transcription

1 Staff Report DATE: November 3, 2016 TO: Chair and Directors Regional Hospital District Board FILE: H-AB FROM: RE: Debra Oakman, CPA, CMA Chief Administrative Officer 2017 Provisional Budget Purpose To recommend adoption of the 2017 provisional budget for the Comox Strathcona Regional Hospital District (CSRHD). Policy analysis Per section 23 of the Hospital District Act, regional hospital districts must prepare and adopt, before a prescribed date (December 31 st ) a provisional budget for the following calendar year. This report is provided within the framework of the CSRHD financial planning policy. Executive summary The provisional budget is a legislative requirement and provides the authority for expenditures until it is replaced by the annual budget adopted by the board before March 31, The provisional budget includes: Annual funding allocation of $1,850,000 for minor equipment and projects ($5,000 up to < $1,500,000). This will be funded entirely through current year taxation. Annual unconditional grants of $5,000 per named health facility other than hospitals, as per the CSRHD financial planning policy. Major capital projects greater than $1.5 million: o Per memorandum of understanding with Island Health and the cash flow submitted in 2014, $10.1 million is included for the North Island hospitals project (NIHP). o Interim financing interest for the NIHP in the amount of $2.2 million, plus $12.8 million pay-down on the principal Prior year projects are assumed complete for the purposes of the provisional budget. This allows us to clearly see the current year values. Professional fees in the amount of $38,000 for the NIHP project liaison which is carried forward from 2016 and $29,000 for upgrading the CSRHD website.

2 Administration expenses are included at the 2012 level of $151,000. This amount will be reviewed periodically to reflect current costs of service provision. Page 2 Recommendation from the chief administrative officer: THAT the 2017 provisional budget for the Comox Strathcona Regional Hospital District be adopted. Respectfully: D. Oakman Debra Oakman, CPA, CMA Chief Administrative Officer History/background factors The provisional budget is being presented with very little change from the prior year other than the entries for the NIHP. Appendix B contains the consolidated budget, and as per the financial planning policy, details and prior years comparisons are provided in appendices C and D. Capital projects/equipment $5,000 to $1,500,000 The CSRHD financial planning policy provides for an annual fixed allocation of $1,850,000 towards Island Health s annual equipment/project needs under $1.5 million. The allocation represents a 40 per cent share of capital equipment/project costs with Island Health providing the balance of 60 per cent, with the exception of the Cumberland Regional Laundry Society for which the 40 percent is evenly shared with the Nanaimo Regional Hospital District. The provisional budget includes the full allocation. Prior year projects are assumed complete for the purposes of the provisional budget. This allows us to clearly see the current year values. Capital projects/equipment greater than $1,500,000 The NIHP project is well underway and is anticipated to be complete in On September 12, 2013 the board authorized the signing of a memorandum of understanding between Island Health and the CSRHD with regards to the payment methodology and reporting for the NIHP project. Payments are being made based on the cash flow submitted by Island Health. The provisional budget includes 2017 payments of $10.1 million based on this cash flow. Options Legislation requires that a provisional budget must be adopted by December 31 st and as there are no further meetings scheduled in 2016, the options for the board are to approve the provisional budget as presented or to approve it with amendments. Financial factors In 2014, the CSRHD reached the final year of the four year strategy outlined in the 2011 annual budget staff report, which was a gradual implementation of a tax rate of $0.84 per $1,000 taxable value over a four year period from 2011 to There is no change in the requisition for 2017 (appendix A). The apportionment will be recalculated once the 2017 completed assessment roll is received in January. This will be presented with the recommended budget in March The

3 recommended budget will reflect actual prior year capital project carry forwards and any other updates required. Page 3 The 2017 expenses for the NIHP will be $10.1 million which will be funded through interim financing with the Municipal Finance Authority. The interim financing interest for 2017 is estimated at $2.2 million. The annual contribution to the major capital project reserve has been budgeted as a pay-down on the principal of the interim financing. This will reduce the interest payable in 2017 as well as lower the long term borrowing requirement in The uncommitted funds in the future expenditure reserve at December 31, 2016 is anticipated to be $12 million. Contributions to this reserve are from a variety of sources which include budget contributions, debenture refunds, operating and capital project surplus. Legal factors Per section 23 of the Hospital District Act, regional hospital districts must adopt an annual budget by March 31 st of each year. Sustainability implications The tax rate of $0.84 per $1,000 is projected to provide adequate funds for debt repayment and annual equipment and project requests. Intergovernmental factors The Comox Valley Regional District (CVRD) executive management branch works with Island Health capital finance staff with regards to the NIHP and annual capital funding and project requirements. Interdepartmental involvement Management and administration support is provided by the Comox Valley Regional District administration team. Citizen/public relations The 2017 assessed values are not received until January, but as the requisition is maintained at the same level as 2016, there will be little or no change to taxpayers in Prepared by: Concurrence: Concurrence: C. Sellers W. Byrne B. Dunlop Cheryl Sellers, Wendy Byrne, CITP, MBA Beth Dunlop, CPPB, CPA, CGA Senior financial accounting Manager of financial Corporate Financial Officer technician planning Attachments: Appendix A Requisition apportionment Appendix B 2017 Consolidated provisional budget Appendix C 2017 Budget summary and details Appendix D Comparative actual vs. budget summary report

4 Appendix A Page 4 Participant 2016 Revised Converted Assessments 2017 Proposed Requisition % Comox Valley Regional District Comox 224,880,488 1,837, % Courtenay 494,832,823 4,042, % Cumberland 54,796, , % Area A Baynes Sd-Denman/Hornby 200,508,559 1,638, % Area B Lazo 144,725,964 1,182, % Area C Puntledge-Black Creek 185,156,820 1,512, % Strathcona Regional District Campbell River 521,922,338 4,263, % Gold River 12,134,946 99, % Sayward 3,108,135 25, % Tahsis 3,581,598 29, % Zeballos 1,458,269 11, % Area A Sayward Valley 19,915, , % Area B Cortes 29,881, , % Area C Discovery Islands-Mainland Inlets 70,853, , % Area D Oyster Bay-Buttle Lake 95,557, , % Area A Kyuquot-Nootka 17,522, , % 2,080,837,203 17,000,000 Residential rate per $1,000 taxable value Average residential value $ 295,280 Average residential levy $ 241

5 Appendix B 2017 Consolidated Provisional Budget Page 5 Revenue Grants in lieu of taxes $ 82,000 Requisition 17,000,000 Short term debt financing 10,114,000 Interest revenue 60,000 Surplus prior year 224,770 $ 27,480,770 Expenditures Administration expense $ 151,000 Governance expenses 54,000 Benefits 100 Bank charges 500 Travel 18,000 Legal fees 10,000 Professional fees 94,000 Bank/loan interest operating 22,000 Funds for future expenditures 19,524 Long term debt financing costs 103,646 Short term debt financing costs 15,009,000 Capital grants 11,999,000 $ 27,480,770

6 GL5290A Page : 1 Date : Nov 03, 2016 Time : 10:29 am Budget Departmental by Class APPENDIX 'C' From Category : 0 To Category : 0 Budget Detail : Provisional Budget : 5?-?-?-??? To : 5?-?-?-??? Year : 2017 Account Description Budget Provisional Budget 50 --> GENERAL REVENUE FUND GRANTS IN LIEU OF TAXES 82,000 82, REQUISITION - ELECTORAL AREAS 6,252,376 6,252, REQUISITION - MUNICIPAL 10,747,624 10,747, INTEREST REVENUE 60,000 60, SURPLUS PRIOR YEAR 117, ,770 REVENUE Total 17,259,299 17,366, ADMINISTRATION EXPENSE 151, , GOVERNANCE EXPENSES 54,000 54, BENEFITS BANK CHARGES TRAVEL 18,000 18, LEGAL FEES 10,000 10, PROFESSIONAL FEES 78,500 94, TRANSFER TO CAPITAL 754,613 1,885, FUNDS FOR FUTURE EXPENDITURES 1,112,887 19, BANK/LOAN INTEREST OPERATING 22,000 22, LONG TERM DEBT PRINCIPAL 295,027 66, LONG TERM DEBT INTEREST 262,672 36, INTERIM FINANCING PRINCIPAL 12,000,000 12,800, INTERIM FINANCING INTEREST 2,500,000 2,209,000 EXPENSES Total 17,259,299 17,366,770 GENERAL REVENUE FUND Total 0 0 Report Total --> 0 0

7 GL5290A Page : 2 Date : Nov 03, 2016 Time : 10:29 am Budget Departmental by Class APPENDIX 'C' From Category : 0 To Category : 0 Budget Detail : Provisional Budget : 5?-?-?-??? To : 5?-?-?-??? Year : 2017 Account Description Budget Provisional Budget 51 --> CAPITAL & LOAN FUND INTERIM FINANCING PROCEEDS 61,025,000 10,114, TRANSFER FR RESERVE 3,233, TRANSFER FR GENERAL 754,613 1,885,000 REVENUE Total 65,013,326 11,999, CAPITAL GRANTS FUNDED BY OPERATING 719,613 1,850, GLOBAL GRANTS FUNDED BY OPERATING 35,000 35, CAPITAL GRANTS FUNDED BY RESERVES 763, MAJOR CAPITAL PROJECTS 63,495,000 10,114,000 EXPENSES Total 65,013,326 11,999,000 CAPITAL & LOAN FUND Total 0 0 Report Total --> 0 0

8 Budget Departmental Report GL5290A Page : 1 APPENDIX 'C' Date : Nov 03, 2016 Time : 10:29 am 2017 Provisional Budget Account Name ID Description Status Quantity Rate Burden % Amount 50 --> GENERAL REVENUE FUND 1 --> REVENUE GRANTS IN LIEU OF TAXES 1 A ,000 Total : GRANTS IN LIEU OF TAXES -82, REQUISITION - ELECTORAL AREAS per $1000 based on 2016 completed roll A ,252,376 Total : REQUISITION - ELECTORAL AREAS -6,252, REQUISITION - MUNICIPAL per $1000 based on 2016 completed roll A ,747,624 Total : REQUISITION - MUNICIPAL -10,747, INTEREST REVENUE 5 A ,000 Total : INTEREST REVENUE -60, SURPLUS PRIOR YEAR 8 General surplus estimate A ,770 8 NIHP liaison estimated carry forward A ,000 8 Board strategic planning A ,000 Total : SURPLUS PRIOR YEAR -224, > CAPITAL & LOAN FUND

9 Budget Departmental Report GL5290A Page : 2 APPENDIX 'C' Date : Nov 03, 2016 Time : 10:29 am 2017 Provisional Budget Account Name ID Description Status Quantity Rate Burden % Amount 1 --> REVENUE INTERIM FINANCING PROCEEDS 175 NIHP Interim financing A ,114, TRANSFER FR GENERAL Total : INTERIM FINANCING PROCEEDS -10,114, Global grants funded by operating A , Current year capital projects/equipment funded by A ,850,000 operating 50 --> GENERAL REVENUE FUND Total : TRANSFER FR GENERAL -1,885,000

10 Budget Departmental Report GL5290A Page : 3 APPENDIX 'C' Date : Nov 03, 2016 Time : 10:29 am 2017 Provisional Budget Account Name ID Description Status Quantity Rate Burden % Amount 2 --> EXPENSES ADMINISTRATION EXPENSE 9 CVRD support services A , GOVERNANCE EXPENSES Total : ADMINISTRATION EXPENSE 151, $4500 A , BENEFITS Total : GOVERNANCE EXPENSES 54, Board remuneration (CPP only) A BANK CHARGES Total : BENEFITS A TRAVEL Total : BANK CHARGES Board travel A , LEGAL FEES Total : TRAVEL 18, A , PROFESSIONAL FEES Total : LEGAL FEES 10, Annual audit fees A , Audit fee allowance for expanded scope and A ,500 additional services re NIHP 165 Project liaison - based on actual time required A ,000 on project carry forward. 165 Cfwd 2016 Board strategic planning A , Website upgrade A , TRANSFER TO CAPITAL Total : PROFESSIONAL FEES 94, Equip/projects A ,850, Global grants A , FUNDS FOR FUTURE EXPENDITURES Total : TRANSFER TO CAPITAL 1,885, A , BANK/LOAN INTEREST OPERATING Total : FUNDS FOR FUTURE EXPENDITURES 19, Temporary borrowing interest A , LONG TERM DEBT PRINCIPAL Total : BANK/LOAN INTEREST OPERATING 22, Issue 99 Apr/Oct 19 - ends Oct 2026 A , Issue 103 Apr 23 - ends Apr 2018 A ,598 Total : LONG TERM DEBT PRINCIPAL 66,902

11 Budget Departmental Report GL5290A Page : 4 APPENDIX 'C' Date : Nov 03, 2016 Time : 10:29 am 2017 Provisional Budget Account Name ID Description Status Quantity Rate Burden % Amount LONG TERM DEBT INTEREST 73 Issue 99 Apr/Oct 19 - ends Oct 2026 A , Issue 103 Apr/Nov 23 - ends Apr 2018 A ,248 Total : LONG TERM DEBT INTEREST 36, INTERIM FINANCING PRINCIPAL 132 Paydown Aug 1 interim financing A ,800,000 Total : INTERIM FINANCING PRINCIPAL 12,800, INTERIM FINANCING INTEREST 139 NIHP interim financing interest A ,209,000 Total : INTERIM FINANCING INTEREST 2,209, > CAPITAL & LOAN FUND

12 Budget Departmental Report GL5290A Page : 5 APPENDIX 'C' Date : Nov 03, 2016 Time : 10:29 am 2017 Provisional Budget Account Name ID Description Status Quantity Rate Burden % Amount 2 --> EXPENSES CAPITAL GRANTS FUNDED BY OPERATING 154 Current year capital projects/equipment funded by A ,850,000 operating GLOBAL GRANTS FUNDED BY OPERATING Total : CAPITAL GRANTS FUNDED BY OPERATING 1,850, Zeballos, Cortes, Cumberland Reg Laundry, A ,000 Kyuquot, Tahsis, Gold River, Sayward MAJOR CAPITAL PROJECTS Total : GLOBAL GRANTS FUNDED BY OPERATING 35, NIHP payment Jan 1 A ,464, NIHP payment Apr 1 A ,553, NIHP payment Jul 1 A NIHP payment Oct 1 A ,000 Total : MAJOR CAPITAL PROJECTS 10,114,000

13 GL5290A Page : 1 Date : Oct 31, 2016 Time : 3:12 pm Budget Departmental by Class APPENDIX 'D' From Category : 0 To Category : 0 : 5?-?-?-??? To : 5?-?-?-??? Account Description Actual Budget Actual Budget Actual Budget Actual YTD Budget 50 --> GENERAL REVENUE FUND GRANTS IN LIEU OF TAXES 281,064 82, ,182 82, ,126 82, , REQUISITION - ELECTORAL AREAS 6,060,815 6,119,600 6,144,938 6,173,884 6,223,667 6,208,221 6,242,712 6,252, REQUISITION - MUNICIPAL 9,968,963 9,910,177 10,555,061 10,526,116 10,776,333 10,791,779 10,757,288 10,747, INTEREST REVENUE 1,034,586 60,000 1,044,339 60, ,265 60,000 90,460 60, DEBENTURE REFUNDS 521, , , SURPLUS PRIOR YEAR 295, , , , , , , ,299 REVENUE Total 18,162,481 16,466,904 18,469,468 17,108,832 17,815,036 17,435,790 17,207,759 17,259, ADMINISTRATION EXPENSE 151, , , , , , , , GOVERNANCE EXPENSES 21,952 54,000 24,594 54,000 28,260 54,000 16,918 54, BENEFITS BANK CHARGES TRAVEL 4,374 18,000 4,828 18,000 7,135 18,000 3,677 18, PUBLIC RELATIONS LEGAL FEES 0 10, , , , PROFESSIONAL FEES 17,734 98,500 12,144 78,500 15,256 58,500 7,298 78, TRANSFER TO CAPITAL 34,269 1,642, , ,545 51, , , , FUNDS FOR FUTURE EXPENDITURES 2,992, ,355 2,538,366 1,672,444 2,793,479 1,298,429 1,112,887 1,112, FUNDS FOR FUTURE MAJOR PROJECTS 13,366,486 12,500,000 14,331,510 13,500,000 82,655 13,500, BANK/LOAN INTEREST OPERATING 0 22, , , , LONG TERM DEBT PRINCIPAL 685, , , , , , , , LONG TERM DEBT INTEREST 620, , , , , , , , INTERIM FINANCING PRINCIPAL ,500, ,000,000 12,000, INTERIM FINANCING INTEREST , , ,990 2,500,000 EXPENSES Total 17,895,649 16,466,904 18,175,678 17,108,832 17,697,737 17,435,790 15,848,038 17,259,299 GENERAL REVENUE FUND Total 266, , , ,359,721 0 Report Total --> 266, , , ,359,721 0

14 GL5290A Page : 2 Date : Oct 31, 2016 Time : 3:12 pm Budget Departmental by Class APPENDIX 'D' From Category : 0 To Category : 0 : 5?-?-?-??? To : 5?-?-?-??? Account Description Actual Budget Actual Budget Actual Budget Actual YTD Budget 51 --> CAPITAL & LOAN FUND INTERIM FINANCING PROCEEDS ,388,437 60,943,477 59,498,000 61,025, TRANSFER FR RESERVE 7,287,283 8,420,262 53,902,487 65,476,463 29,962,093 43,629,934 2,762,581 3,233, TRANSFER FR GENERAL 34,269 1,642, , ,545 51, , , , UNEXPENDED DEBT PROCEEDS PRIOR YR 32,097 32,097 15,497 15, REVENUE Total 7,353,649 10,095,271 54,040,037 66,090, ,402, ,457,088 62,387,874 65,013, CAPITAL GRANTS FUNDED BY DEBT 16,599 32,097 15,497 15, CAPITAL GRANTS FUNDED BY OPERATING 16,769 1,625, , ,045 34, ,177 92, , GLOBAL GRANTS FUNDED BY OPERATING 17,500 17,500 17,500 17,500 17,500 17,500 35,000 35, CAPITAL GRANTS FUNDED BY RESERVES 1,903,283 3,036,262 1,930,561 2,576, , , , , MAJOR CAPITAL PROJECTS 5,384,000 5,384,000 51,971,925 62,899, ,635, ,635,000 61,968,000 63,495,000 EXPENSES Total 7,338,152 10,095,271 54,040,037 66,090, ,402, ,457,088 62,387,874 65,013,326 CAPITAL & LOAN FUND Total 15, Report Total --> 15,