Mayor's Report - April 2007

On April 2^nd Belcarra’s 2007 annual budget and five-year financial plan was 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.)

The “Guiding Principles” used for the development of the current five-year financial plan originated from the Capital Planning Form held in November 2000, and are as follows:

Eight years ago the province combined their grants into a single “lump sum” Small Community Protection Grant of $102,889. I am pleased to advise that after 15 years of remaining constant, the provincial grant increased by $40,000 in 2006, and Belcarra also will receive similar increases for 2007, 2008 and 2009. This will offset increases to the municipal tax levy required to make-up the amount lost to inflation over the past 15 years (~$35,000) as well as offset the new provincial tax levy for RCMP services.

The 2007 budget has been set at $832,139 which is 8.3% higher than the 2006 actual expenditures, which is offset by the increase in the provincial grant. The “bottom line” is a 0% increase in the municipal component of the property tax for 2007. It is important to note that while the municipal tax levy accounts for 75% of the operating budget, the municipal tax levy only accounts for 34% of the overall property tax.

In order to provide additional perspective to the foregoing, I have provided the following background information regarding the financial status of the municipality.

RESERVE FUNDS

As at December 31^st, 2006, the municipal financial reserves stood as follows:

During 2006, interest earnings from the reserve accounts amounted to $5,700 — equivalent to $0.025 per $1,000 of assessment. This increase in interest earned in 2006 over $2,511 in 2005 is due to an increased reserve balance. For 2007, an interest accrual of $3,375 is projected for the reserve funds. Note: 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.

CAPITAL EXPENDITURES FUNDING

The Contribution To Capital for 2007 has been set at $152,000 to reflect Council’s commitment to the capital program of fire protection infrastructure works and roads reconstruction:

PROJECT	PROJECT COST	GENERAL REVENUE	OTHER FUNDING	COMMENTS
Roads & Drainage – MRN	$9,500	0	$9,500	Bedwell Bay Road
Roads & Drainage – Municipal	$40,900	$40,900	0	Fire Protection Water Main
Fire Protection Water Main – Construct Tatlow Water Main Extension Along Marine Ave	$92,000	$92,000	0	Includes asphalt overlay from 3924 to 4078 Marine Avenue
Recycle Depot	$2,500	$2,500	0	Video Camera No. 2
Municipal Hall & Buildings	$7,100	$7,100	0	Software & Municipal Hall
TOTAL CAPITAL	$152,000	$142,500	$ 9,500	---

TAXES RECEIVABLE

As at December 31^st, 2006, the 2006 taxes receivable totalled $7,913. All 2004 and 2005 taxes receivable were paid in 2006. This represents a decrease of $976 in taxes receivable compared to the $8,880 receivable as at December 31^st, 2005.

An important consideration with taxes receivable is the fact that the Village has to borrow funds to operate and pay the School Taxes whenever property owners do not pay taxes. 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.

BORROWING COSTS

The cost of borrowing money during 2006 (interest and bank charges) was $2,098 — an amount equivalent to $0.009 per $1,000 of assessment. This was lower than the 2005 costs of $2,472. These costs include the offset accrued interest paid on Tax Prepayments. For 2007, the projected borrowing costs are estimated to be $3,000 — which equates to $0.011 per $1,000 of assessment.

The most important factor influencing annual borrowing costs is the prevailing interest rate from January until July, when the 2006 taxes are received. However, as a result of Belcarra's property tax prepayment program, there is a reduced requirement to borrow operating funds during the first six months of the year.

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.

INVESTMENT REVENUE

An important financial consideration is the management of municipal funds in order to maximize investment revenue. During 2006, $9,613 was earned as interest on investments — equivalent to $0.043 per $1,000 of assessment. This was a result of competitive interest rates paid by the bank on the municipal accounts. A similar investment strategy is proposed for 2007 with a projected investment income of $9,600.

PROVINCIAL GOVERNMENT GRANTS

The municipality received a single “lump sum” grant in 2006 of $143,254 (The Small Community Protection Grant), which was $40,000 more than the $102,800 in 2005. This is the first increase in the past 15 years. We will receive similar increases for each of the years 2007, 2008 and 2009. This will offset increases to the municipal tax levy required to make-up the amount lost to inflation over the past 15 years (~$35,000) as well as offset the new provincial tax levy for RCMP services.

GARBAGE & RECYCLING USER FEE

The 2007 Garbage & Recycle User Fee has been increased from $140 per residence to $150 ($300 if the residence contains an accessory suite). The fee increase of $10 is needed to offset increased hauling costs (read increased fuel costs and travel times due to traffic congestion) from the contractor that provides the service. Calculated on the basis of a user group of 334 users, the garbage revenues will amount to $50,100 for 2007. Council will continue the two projects initiated in 2001, the “nominal charge” curb-side tree chipping service, and the “nominal charge” large item pickup service.

LICENCE & PERMIT FEES

Licence & Permit Fees in 2006 amounted to $27,373. For 2007 Licence & Permit Fees are projected at $27,000 in anticipation of providing 2007 services at the same levels as in 2006.

PLANNING & CONSULTING

The 2007 budget for Planning & Consulting has been set at $70,000. This budget includes provision for the OCP review, completion of discussions with the Vancouver Port Authority regarding the Bedwell Bay Sustainability Plan. Predicated on the Preferred Option Predesign Study completed by Dayton & Knight to provide the Village with GVWD water from the District of North Vancouver, this budget includes contingency amounts for survey and infrastructure design work should the Village’s application to the Municipal Rural Infrastructure Fund for grant funding be approved.

PUBLIC WORKS OPERATIONS

The 2007 Public Works Operations budget for roads, drainage and general purposes has been set at $163,590. GVTA funding in 2007 will remain unchanged from the $61,800 in 2006 for the maintenance of Bedwell Bay Road under the GVTA Main Roads Network (MRN).

MUNICIPAL LEVY

The 2007 municipal tax rate has been reduced from $1.96 to $1.61 per $1,000 of assessed value, a reduction of 18% in response to the increase in property assessments. This levy will yield a total of $456,577 on the $283,588,300 assessment role. The “bottom line” is that Belcarra’s 2007 municipal property tax requisition has been held at the 2006 level to reduce the impact of the new provincial levy for RCMP services. Note: The municipal tax levy accounts for 75% of Belcarra's overall operating budget, and only 34% of the overall property tax.

Search www.belcarra.ca Search WWW