6.1 West Sechelt Area A06 Sewer Expansion Funding Option Report from the Director of Corporate and Financial Services dated March 23, 2018

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1 DISTRICT OF SECHELT FINANCE, CULTURE AND ECONOMIC DEVELOPMENT COMMITTEE Community Meeting Room, 5797 Cowrie Street, Sechelt, BC Wednesday, March 28 th, :00 am AGENDA 1. CALL TO ORDER AND DECLARATION OF CONFLICT 2. ADOPTION OF AGENDA 3. APPOINTMENTS AND DELEGATIONS 4. ADOPTION OF MINUTES 5. BUSINESS ARISING FROM MINUTES 6. BUSINESS ITEMS 6.1 West Sechelt Area A06 Sewer Expansion Funding Option Report from the Director of Corporate and Financial Services dated March 23, General Fund Operating Budget Deliberation Update Report from the Director of Corporate and Financial Services dated March 23, 2018 Pg 2-9 Pg ADJOURNMENT

2 REQUEST FOR DECISION DATE: March 23, 2018 TO: FROM: RE: Finance, Culture & Economic Development Committee The Director of Corporate and Financial Services West Sechelt Area A06 sewer expansion funding option 1. PURPOSE 1.1. To provide the Committee with an option to fully fund the West Sechelt Area A06 sewer expansion project 2. RECOMMENDATIONS 2.1 That the report from the Director of Corporate and Financial Services dated March 23, 2018 regarding the West Sechelt Area A06 sewer expansion funding option be received. 2.2 That the funding strategy detailed in the West Sechelt Area A06 sewer expansion funding option report be endorsed and included in the Financial Plan to be recommended to Council. 3. DISCUSSION 3.1 At the March 21, 2018 FCED Committee meeting the committee received a report from District staff regarding the additional funding required to complete the project as originally planned. 3.2 The Committee agreed to recommend to Council that an additional $127,439 be allocated to the project to allow for the servicing of 52 lots. 3.3 The Committee was advised that due to a funding shortfall of $531,897, 19 lots along Anchor Road, Pickleball Court, Acorn Road and Gowland Road would not be provided service. The Committee instructed District staff to bring a report back providing a potential option to fund the shortfall. Page 2

3 3.4 The following chart provides the details of the tender received from Bear Creek Projects and the funding shortfall: West Sechelt Area A06 Tender Price and Funding Tender Price Contingency Budget Wakefield Road 1,352, ,250 1,487,754 Anchor Place 114,713 11, ,184 Pickleball Court 43,154 4,315 47,469 Acorn ROW 50,371 5,037 55,408 Acorn Road & Gowland Road 275,305 27, ,836 1,836, ,604 2,019,651 Funding: CWWF grant 1,129,061 Original Amount from sewer reserves 231,254 Increased amount from sewer reserves 127,439 1,487,754 Funding Shortfall 531, District staff first reviewed the proposed sewer capital plan to determine if any projects could be removed. As the majority of the projects in the sewer capital plan are funded through Development Cost Charges and required as a result of growth, District staff did not feel they could recommend removing any projects from the plan. 3.6 District staff then considered whether any projects in the sewer capital plan could be deferred to a future year thus freeing up resources now. It was determined that the construction of the chemical storage area at the Water Resource Centre could be moved from 2019 to District staff recommends that the design of the area still occur in As deferring the chemical storage area project one year is not, in itself, sufficient to provide the additional funds required to complete the West Sechelt Area A06 sewer expansion project, District staff considered what reserve funds are available for the Committee s consideration. Page 3

4 3.8 The first step in this process was to determine if projects funded from sewer revenue could be funded from an alternative source. District staff recommends changing the funding of three projects currently proposed to be funded from sewer revenue as follows: Amount Current Funding Proposed Funding Liquid Waste Management Plan 50,000 Sewer Revenue Gas Tax Selma Park & Davis Bay Sewer Functional Plan 149,160 Sewer Reserve Gas Tax Sewer Modeling 109,160 Sewer Reserve General Capital Reserve - $26,350 General Fund Surplus - $82, The $82,810 funding from the General Fund Surplus is based on the assumption that the Committee will also recommend to Council that the two staff positions being requested by District staff be approved. The budget for the two staff positions is $165,620. If the positions are fully funded for 2018 but not filled until July 1, 2018 a surplus of $82,810 will be generated. If the two staff positions are not approved, but the Committee still wants to use general fund reserves for the Sewer Modeling project, this is still an option as the current proposed general fund 2018 budget includes a $150,000 surplus Once the changes listed above are made, there are sufficient funds in the sewer surplus and sewer capital reserve to fund the entire $531,897 shortfall in the West Sechelt Area A06 sewer expansion project District staff feels the Committee should be cautioned that utilizing this strategy to ensure the sewer expansion project is completed does result in the combined balance of the sewer surplus and capital reserve being lower than recommended. Based on the currently proposed Financial Plan approximately $200,000 is available between now and the end of 2019 to deal with any unexpected events District staff feels completing the sewer expansion project in West Sechelt should be a high priority and, therefore, support this funding strategy. As part of the process of preparing the Financial Plan later this year, District staff will consider what other options could be made available for the Committee to consider alleviating any concerns regarding the low level of reserves in the sewer fund Attachment 1 provides a summary of the general and sewer funds surplus and capital reserves, as well as the Gas Tax reserve prior to incorporating the changes listed in this report. Page 4

5 3.14 Attachment 2 provides a summary of the general and sewer funds surplus and capital reserves, as well as the Gas Tax reserve after incorporating the changes listed in this report 3.15 Attachment 3 provides the Sewer Fund capital plan after incorporating the changes listed in this report. The affected projects are bolded. Respectfully Submitted, Doug Stewart Director of Corporate and Financial Services Page 5

6 Selected Reserve Balances 2018 to 2022 before increased budget for West Sechelt Area A06 Sewer Expansion Prior years surplus (deficit) Reserves General fund Sewer Fund General Capital Gas Tax Sewer Capital 2018 Opening Balance (454,824) 1,179, ,320 42, ,006 Contributions 150, , , , ,000 Expenses (854,399) (804,963) (153,480) (411,006) Ending Balance (304,824) 439,978 91, , Opening Balance (304,824) 439,978 91, ,739 Contributions 150,000 64, , , ,000 Expenses (180,437) (677,250) (584,500) (205,000) Ending Balance (154,824) 324, , , Opening Balance (154,824) 324, , ,895 Contributions 150,000 64, , , ,000 Expenses (1,074,067) (465,000) (33,000) Ending Balance (4,824) 389,533 52, , , Opening Balance (4,824) 389,533 52, , ,000 Contributions 150,000 64,996 1,271, , ,000 Expenses (663,800) (400,000) (273,675) Ending Balance 145, , , , , Opening Balance 145, , , , ,325 Contributions 150,000 64,996 1,558, , ,000 Expenses (324,115) (525,000) (211,600) Ending Balance 295, ,525 1,895, , ,725 Page 6

7 Selected Reserve Balances 2018 to 2022 after increased budget for West Sechelt Area A06 Sewer Expansion Prior years surplus (deficit) Reserves General fund Sewer Fund General Capital Gas Tax Sewer Capital 2018 Opening Balance (454,824) 1,179, ,320 42, ,006 Contributions 150, , , , ,000 Expenses (82,810) (1,077,976) (831,313) (352,640) (411,006) Ending Balance (387,634) 216,401 65, , Opening Balance (387,634) 216,401 65, ,579 Contributions 150,000 64, , , ,000 Expenses (80,437) (677,250) (584,500) (205,000) Ending Balance (237,634) 200, ,812 15, Opening Balance (237,634) 200, ,812 15,735 Contributions 150,000 64, , , ,000 Expenses (1,074,067) (465,000) (133,000) Ending Balance (87,634) 265,956 26,635 16, , Opening Balance (87,634) 265,956 26,635 16, ,000 Contributions 150,000 64,996 1,271, , ,000 Expenses (663,800) (400,000) (273,675) Ending Balance 62, , ,069 82, , Opening Balance 62, , ,069 82, ,325 Contributions 150,000 64,996 1,558, , ,000 Expenses (324,115) (525,000) (211,600) Ending Balance 212, ,948 1,868,913 22, ,725 Page 7

8 Sewer Collection & Treatment Budget 2017 YTD Nov Carried to New Request 2018 Budget Project Project Total Funding Source Liquid Waste Management Plan 50,000 Gas Tax Reserve 50,000 50,000 Wakefield Road Sewer Expansion Area A06 Harbour Way to Lookout Sewer Expansion Area A Budget 2020 Budget 2021 Budget 2022 Budget 2,130,286 Sewer reserve 251, , , ,348 Grants & Contributions 1,225,532 5,594 1,219,938 1,219,938 2,028,345 Sewer reserve 346, , ,634 Grants & Contributions 1,692,401 10,690 1,681,711 1,681,711 WRC work yard fence Sewer Reserve 10,000 Selma Park & Davis Bay Sewer Functional Plan Sewer Reserve 150, Gas Tax Reserve 149, ,160 Sewer Modelling & Funding Project 110,000 Sewer Reserve 110, Capital reserve 26,350 26,350 General Surplus 82,810 82,810 Trail Ave Sewer Relocation Cowrie to Teredo 25,000 Sewer reserve 25,000 25,000 Scada Equipment Purchase 30,000 Sewer reserve 30,000 30,000 Additional Membrane Filters 112,000 Sewer Reserve 80,000 80,000 16,000 16,000 3/4 Ton Truck (Unit #33 Replacement) Chemical Storage Area (Design) Shelter for Septage Receiver at Dusty Rd Spare PLC Components (Inventory) Upsize Main MH 4095 Wakefield Lift Station Wakefield Lift Station Cabinet Repairs Chemical Storage Area (Construction) Wakefield Lift Station Upgrades Roof Replacement Dusty Rd Building Upsize main MH 4720 to MH 4710 Marine Way Siphon Upgrades MH 4745 to MH 4540 Gravity Sewer Main Upgrades MH 4745 to MH 4765 Upsize Main MH 4730 to MH 4720 Replace Pumps Mackenzie Marina Lift Station Replace Norwest Bay Rd Lift Station 35,000 Sewer Reserve 35,000 35,000 Sewer Reserve 35,000 15,000 Sewer reserve 15,000 15,000 12,000 Sewer Reserve 12,000 12, ,000 Sewer Reserve 32,187 Development Cost Charges 92,813 10,000 Sewer reserve 10, ,000 Sewer reserve 100, ,000 Sewer Reserve 227,250 Development Cost Charges 222,750 12,000 Sewer Reserve 12, ,000 Sewer Reserve 2,250 Development Cost Charges 222, ,000 Sewer Reserve 1,000 Development Cost Charges 99, ,000 Sewer Reserve 1,750 Development Cost Charges 173, ,000 Development Cost Charges 123,750 Sewer reserve 1, ,000 Development Cost Charges 153,450 Sewer Reserve 156, ,000 Development Cost Charges 334,125 Sewer Reserve 115,875 Upsize Shoreline Siphon 110,000 Development Cost Charges 108,900 Sewer Reserve 1,100 Trunk Expansion 550,000 Development Cost Charges 544,500 Sewer Reserve 5,500 Sanitary Sewer Upgrade Dolphin St to Inlet Ave, Inlet Ave to Medusa St, Medusa St 200,000 Development Cost Charges 198,000 to Trail Ave Sewer Reserve 2,000 Page 8

9 Sewer Collection & Treatment Budget 2017 YTD Nov Carried to New Request 2018 Budget 2019 Budget 2020 Budget Project Project Total Funding Source Sechelt Inlet Rd Sanitary Sewer Extension Saltgrass 200,000 Sewer Reserve 200,000 to Dusty Sanitary Sewer Upgrade Teredo St Ambulance 300,000 Development Cost Charges 297,000 Station to Inlet Ave Sewer Reserve 3,000 Reclaimed Water Treatment and Distribution 1,500,000 Grants & Contributions 1,500, Budget 2022 Budget Sewer Fund Totals Sewer reserve 867,646 1, , ,336 1,488, , , , ,600 Development Cost Charges 315, , ,325 1,148,400 Grants & Contributions 2,917,933 16,284 2,901,649 2,901,649 1,500,000 Gas Tax Reserve 199, ,160 Capital reserve 26,350 26,350 General surplus 82,810 82,810 3,785,579 17,964 3,499,295 1,129,656 4,698, , , ,000 2,860,000 Page 9

10 REQUEST FOR DECISION DATE: March 23, 2018 TO: FROM: RE: Finance, Culture & Economic Development Committee The Director of Corporate and Financial Services General fund operating budget deliberation update 1. PURPOSE 1.1. To present to the Committee the updated proposed 2018 General Fund operating budget and to seek the Committee s recommendation to Council. 2. RECOMMENDATIONS 2.1 That the report from the Director of Corporate and Financial Services dated March 14, 2018 regarding the Sewer Financial Plan be received. 2.2 That a property tax rate increase of 5.78% be endorsed and included in the Financial Plan to be recommended to Council. 3. DISCUSSION 3.1 On March 21, 2018 the FCED Committee received a report from District staff recommending using reserves to fund four specific one-time budget initiatives in the 2018 budget. 3.2 The Committee agreed with the recommendation and directed District staff to bring a report to the FCED Committee meeting providing a summarization of the deliberations to date. 3.3 By utilizing $142,500 from reserves the required property tax increase required to fund the proposed general fund 2018 budget is 5.78%. 3.4 District staff would like to note for the Committee that the total property tax increase includes 3% for increased capital renewal expenses. 3.5 The remainder of the increase (2.78%) will fund the negotiated wage increase, increased costs due to inflation and the addition of two staff members one to be assigned to the Parks department and the other to work in the Public Works department. Page 10

11 3.6 Attachment 1 provides a list summarizing the impacts on the 2018 General Fund budget based on the deliberations to date. Respectfully Submitted, Doug Stewart Director of Corporate and Financial Services Page 11

12 General Operating Fund Budget Changes from 2017 to 2018 Reason Change Tax increase General Operations: Salaries and benefits 155, % 1 FTE Arborist/Horticulturalist 90, % 1 FTE Equipment Operator 1 75, % Debt costs 78, % RCMP contract 61, % Information technology costs 40, % Utility 1 % revenue 14, % Downtown Wi Fi (10,000) (0.12%) Training plans (10,406) (0.13%) Cell phone charges (14,400) (0.18%) Audit fees (15,000) (0.19%) Reduction of tax subsidy for Airport (17,095) (0.22%) Misc. changes (44,449) (0.56%) Development permits and fees (125,300) (1.58%) Surplus 147, % Community Forest Annual Dividend (25,890) (0.33%) Ocean's Day 1, % Taxes from growth (181,984) (2.30%) Property tax increase for general operations 219, % One time initiatives: Bylaw 430 review 80, % General Election 34, % Downtown Wifi 8, % Seniors Planning Table operating grant 20, % Appropriation of reserves for one time initiatives (142,500) (1.80%) Property tax increase for one time initiatives 0.00% Property tax increase for capital renewal 237, % Total property tax increase proposed 457, % Page 12