Planning is underway for City of Powell River’s 2020 to 2024 financial plan.
At the Tuesday, October 22, city finance committee meeting, chief financial officer Adam Langenmaier said his report to the committee outlines the basis and assumptions and some of the building blocks that have to come together to build the five-year financial plan.
One of the most talked about and anticipated things is what will property tax do, according to Langenmaier. At this moment, council has not given direction on a property tax amount change, he added. The city does not yet have BC Assessment information it can rely on to give council information on what assessments are doing and how much new construction has occurred, so the budgetary process is in the preliminary stages.
“The basis for 2020 revenue now is our best guess on what has happened in the last several years and averaging up to follow the trend,” said Langenmaier. “We expect about a $700,000 increase in revenue. That may seem good, and then you go one line lower in my report to expenses. We are expecting a 3.5 per cent increase in expenses, which equates to about $1.2 million.
“These figures will be looked at by directors and managers to ensure they are the most accurate.”
In terms of assessments, BC Assessment releases a preview roll in November, which it says is an idea of what the assessment is going to be. The completed roll is presented in early January and gives a better basis on what the assessments are going to be. The revised roll is released in late March or early April and is used for calculating the city’s tax levy.
“Throughout the next several months you can have discussions on the theory and ideas of what we want our taxation to do, where we feel we need revenue and where we feel we can make changes,” said Langenmaier.
He said a lot of things go into consideration when he brings a recommendation forward of what kind of tax rates the city wants.
“I look at what’s going on historically, the use of averages,” said Langenmaier. “Are we changing things like flat tax or our sewer rates or are our user rates changing significantly?”
Taxation is only one half of the equation, said Langenmaier. There are external drivers and other costings that go into driving the overall budget, he added.
One of the keys he wants to bring forward is in the development trends and growth, which is a tool Langenmaier has used to take a test of how the city is doing overall for growth and vitality. Looking at business licences, if it’s assumed all businesses get licensed and renew as they should, business licences have been trending up.
“It’s nice to see the number of renewed licences are continuing to rise,” said Langenmaier. “We are not seeing businesses start and fail within a year or two, which is a really nice sign of the times.
“The next one that really drives our assessments and activity is the building permit numbers. Looking at the total value in 2017, there were $14 million of building permits issued, in 2018 it was $26 million and for 2019, up to September, we’ve had $34 million.”
Langenmaier said he was surprised at last year’s numbers and of that figure, Santé Veritas Therapeuticshad a $9 million building permit. He thought it would level out but the data shows there is still growth going on. He said it does take time for building projects to get completed and hit the city’s tax rolls, so looking at that, he has set a reasonably fair new construction amount for this year.
One of the pieces dwarfing everything in the 2020 plan is the liquid waste plant. Cost and staff time expected to be dedicated to it includes a significant cost factor and time factor, according to Langenmaier.
The key Langenmaier said he wants to bring forward is having time for discussion and public input. The schedule for the financial planning process is a public document and it will be brought forward any time Langenmaier is talking about the budget.
“It gives people the timeline of what to expect and when it is occurring,” said Langenmaier.
Mayor Dave Formosa said there is now a process for the formation of a finance advisory committee. Formosa said the terms of reference are being drawn up. Once the terms of reference have been completed, it will come to the finance committee for approval, and then the city will go through the process of creating a select committee.
“The sooner that’s done, the better it is for all of us,” said Formosa.
Finance committee chair George Doubt said once terms of reference are drawn up and applications are made to the finance committee and accepted, his thinking is that this committee would be ongoing for a period of time.
“Once we get the terms of reference, we can detail it more,” said Doubt. “There’s a number of opportunities for public input. I want to see us advertise this as much as we possibly can so the public knows all the opportunities they are going to have to come to the finance committee meetings and different gatherings.”
