Mayor's Report - June 2009

On May 11^th Belcarra’s 2009 annual budget and 2009-2013 five-year financial plan were presented to the community. A few residents attended the information session and their questions contributed to a good discussion for all who were there. (The Financial Plan presentation is posted here in PDF format.) In addition, I am pleased to provide the following information regarding the financial health of the municipality.

The “Financial Planning Objectives” used to guide the development of the current five-year financial plan are as follows:

2009 Municipal Tax Levy

The 2009 municipal tax rate has been increased from $1.45 to $1.49 per $1,000 of assessed value. This levy will yield a total of $505,588 on the $334,019,200 municipal assessment role. The “bottom line” is that the increase in Belcarra’s 2009 municipal property tax levy is 2.8%. The municipal tax levy accounts for only 36% of the overall property tax.

Provincial Government Grants

Belcarra will receive a $337,812 Small Community Grant in 2009 as the first instalment of the Province’s Strategic Community Investment Fund, a restructuring of provincial grant programs and continued commitment to help provide services in areas with smaller tax bases. The 2008 Small Community Grant received by Belcarra was $221,430. Belcarra will reserve $78,300 from its 2009 grant to add to additional provincial grant funds received and utilized in 2010.

Licence & Permit Fee Revenue

Licence & Permit Fee Revenue in 2008 amounted to $27,145. 2009 Licence & Permit Fee Revenue is projected at $23,490 in anticipation of reduced construction due to the economic recession. Customer services will be provided at the same levels in 2009 as those provided in 2008.

Investment Revenue

An important financial consideration is the management of municipal funds in order to maximize investment revenue. During 2008, $22,023 was earned as interest on investments. This was a result of competitive interest rates paid by the bank on the municipal accounts. A similar investment strategy is proposed for 2009; however, interest rates and return paid by banks are predicted to be low.

BUDGET HIGHLIGHTS

The 2009 budget has been set at $2,125,814 comprising the following programs:

General Fund Program – Planning & Consulting

The 2009 Planning & Consulting budget has been set at $59,000. This budget includes provision for general planning consulting services and contingency for consulting services to implement the Belcarra Potable Water Infrastructure Project to provide the municipality with GVWD water from the District of North Vancouver. The project is predicated on the Preferred Option Predesign Study completed by Dayton & Knight Ltd.

General Fund Program – Public Works

The 2009 Public Works budget for roads, drainage and general purposes has been set at $81,836. This budget includes $32,300 for roads and drainage maintenance, $6,500 for hazard tree assessment and removal, $10,400 for municipal hall and building maintenance, and $32,363 for operations and maintenance.

Recycle & Refuse Program

Beginning in the 2008 budget, progressive steps were implemented towards making the Recycle & Refuse Program a self-sustaining utility. The 2009 Recycle & Refuse User Fee has been increased from $160 per residence to $183 ($366 if the residence contains an accessory suite). The fee increase of $23 is needed to offset increased hauling costs (read increased disposal costs, fuel costs, and travel times due to traffic congestion) from the contractor that provides the service. Calculated on the basis of 348 users, the 2009 Recycle & Refuse User Fee revenue will amount to $63,783. The curb-side tree chipping service is increased from two to three times per year and the large item pickup service will continue, generating some revenue to offset costs to provide these services.

Main Roads Network Program (Bedwell Bay Road)

TransLink funding in 2009 has been increased by 4% to total $65,587 for the maintenance of Bedwell Bay Road under the TransLink Main Roads Network (MRN). The 2009 Program includes minor improvements to the Bedwell Bay pathways.

Capital Program

The 2009 Capital Program has been set at $1,888,931 to reflect Council’s commitment to maintaining its roads and municipal facilities infrastructure and completing the fire protection infrastructure works:

PROGRAM	PROJECT DESCRIPTION	PROJECT COST	GENERAL REVENUE	OTHER FUNDING	RESERVE FUNDS
General Fund	Municipal Hall New Roof and Improvements (Reserve Contribution)	$21,000	$21,000	---	---
General Fund	Senkler Bridge Water Main Conduit	$40,000	$40,000	---	---
General Fund	Municipal Recreation Area	$2,000	$2,000	---	---
General Fund	Replace Truck / Plow / Spreader	$77,000	$2,000	---	$75,000
General Fund	Information and Technology	$6,500	$6,500	---	---
Recycle & Refuse	Recycle Facility Site -- Security Gate, Cardlock System, Security Camera, Improved Access	$55,710	$10,469	---	$45,241
Main Road Network	Bedwell Bay Road Pathways	$500	---	$500	---
Main Road Network	Culvert Headwalls	$22,550	$11,275	$11,275	---
Main Road Network	Future Works Reserve Contribution	$20,659	---	$20,659	---
Water Supply & Distribution	Water Project Infrastructure Costs	$942,912	---	$942,912	---
OVERALL	TOTAL CAPITAL EXPENDITURES	$1,188,931	$93,244	$975,346	$120,241

2008 YEAR-END NOTABLES

Reserve Funds

As at December 31^st, 2008, the municipal financial reserves were as follows:

During 2008, interest earnings from the reserve accounts amounted to $5,503. The decrease in interest earned in 2008, over $6,693 in 2007, is due to reduced interest rates. An interest accrual of $5,000 is projected for the reserve funds. Note: Capital reserve funds cannot be used, even temporarily, for operating in order to offset borrowing costs, and all interest earned by the reserve funds must be accrued to the reserve funds.

Borrowing Costs

The cost of borrowing money during 2008 (interest and bank charges) was $2,112. This was slightly lower than the 2007 costs of $2,809. These costs include the offset accrued interest paid on Tax Prepayments. For 2009, the projected borrowing costs are estimated to be $2,500.

The most important factor influencing annual borrowing costs is the prevailing interest rate from January until July, when the 2009 taxes are received.

As can be appreciated, the prompt payment of taxes means that borrowed funds can be quickly paid back, and investments made earn interest and offset the cost of borrowing during the first half of the year.

Taxes Receivable

As at December 31^st, 2008, the 2008 taxes receivable totalled $54,514. This amount represents an increase of $32,258 in taxes receivable over the 2007 year-end taxes receivable balance. The balance includes applicable interest charged in accordance with rates set by the Province.

An important consideration with taxes receivable is the fact that even if property owners do not pay taxes, the Village must pay the School District, GVRD, TransLink, MFA and BCAA taxes in full, and may have to borrow funds to continue to operate. This places an additional financial burden in the form of increased borrowing charges. It is imperative that every effort be made to reduce the level of unpaid taxes.

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