Report by Dave Svetlichny, CA – Chief Financial Officer – Town of Oliver

In preparation for the 2014 general budget council urged staff to bring forth a balanced general budget with a zero percent increase to tax revenues. This was difficult task for staff, but after numerous meetings, and approximately $236,700 in cuts, we were able to accomplish council’s request.

The draft 2014 general budget, after taking into account both capital and operating funds, shows a budgeted surplus of approximately $27,000 which will be transferred to the general reserve account. Unfortunately this is where the good news ends.

Staff are projecting that the general reserve fund balance on January 1, 2014 will be approximately $277,100. The 2014 budget, on top of everything else, also takes into account $131,200 of capital expenditures which are to be funded directly out of the general reserve account. This would leave the general reserve account with a December 31, 2014 balance of approximately $175,400. From staffs perspective this balance is beginning to get too low. When reviewing the general reserve account there are two major factors that need to be addressed. The first item is spending. The following table shows the general reserve accounts balance and spending over the past four years.

Opening Balance          Net Expenses            Ending Balance

2011 1,319,080              271,092                       1,047,988

2012 1,047,988             381,378                        666,610

2013 666,610                389,510                        277,100

2014 277,100                101,700                        175,400

The above table shows an alarming picture in that over a four year period the general reserve account has gone from a healthy balance of $1.3 Million to a projected 2014 balance of $175k, a decrease of $1.14 Million.

This type of reserve spending is unsustainable and is further hindered by the second factor; a lack of current funding sources, the largest being general taxation.

Over the past few years the global economic climate has taken a substantial hit which has also affected the Town of Oliver. Construction in the area has dramatically decreased which directly impacts the Town’s revenues in the way of building permit revenues (2013 actual revenues were $38,511 — lowest level since 2002 revenues of $21,558).

Federal and Provincial governments have eased back municipal funding while at the same time downloading services to municipalities. There are numerous more examples, however they all point to municipalities having to do more with less, (or perhaps more realistically less with less).

The primary source of revenue municipalities have for general fund operations is taxes. During these tough economic times council has been very conscious on keeping tax rate increases at a minimum, while at the same time continuing to deliver the same level of service to its residents. This is evident by a tax increase of 1.3% in 2011 and 2.1% in 2012 and a tax decrease of 0.67% in 2013. Although this is good for the residents, this does not bode well for the Town. This report does not provide a recommended tax rate, however, staff do believe an increase is necessary.  

Cemetery: • Budgeted revenues of $50,650 are based on 2013 actual figures. • Overall budgeted expenditures have decreased $2,133 or 2.53% over prior year budgeted figures and are approximately $8,300 below 2013 actual figures (2013 had one time scattering acquisition costs of $3,920).

Development Services Operations: • Building permit revenues have been budgeted at $40,000 which is based on 2013 actual revenues. • Operating expenses down 22.14% ($43k) from 2013 budget due primarily to the following three factors: o $6k decrease as 2013 included orthographic work not required in 2014 o $5k decrease in planning consulting costs as the majority of the zoning bylaw re-write has been completed in 2013 o $31k decrease in planning salaries due to time tracking work performed in 2013.

Development Services Planning: • Removed growth boundary work plan in the amount of $2,000. Elections: • Budgeted election costs total $25,000. Of this amount the Town is expecting to recover $15,000 combined from the RDOS & School District as well as $3,800 from the water and sewer funds leaving a net general cost of approximately $6,200.

Fire Department: • Staff, along with Councilor Schwartzenberger met with the Oliver Fire Protection District on November 20, 2013 to review the draft fire department budget. The OFPD has given their support to the proposed budget. • Highlights include: o An approximate increase in budgeted shareable costs of $13,400 from 2013 which equates to approximately 3.92%. The estimated allocation of costs between the Town and the OFPD is based on assessed values. Therefore, taking into account 2013 assessment figures, the Town’s portion of the above cost is $6,763. o Estimated surplus for 2013 is approximated at $42,300 which will bolster the joint fire reserve to $454,200 at year end. Discussion around this reserve (any funds expended from this reserve must be approved by both Town council and the OFPD) were had with a consensus to use $100,000 to fund the fire hall garage expansion. Taking into account budgeted 2014 Town only expenses of $32,293; the Town’s overall tax requisition for fire services has increased $4,322 or 2.81% from 2013 up to $157,919.

Grants in Aid: • $15,000 has been included for the Frank Vcnables Theatre Society. • Budget for library furnishing has been reduced to $2,000 annual figure resolved by council in 2011. Legislative: • Decrease in the 2014 budget over 2013 by $960 or 1.05%.

Town Parks: • No major changes, slight increase from prior year budget of $1,022 or 0.87%.

Public Works: • 2014 Operations budget includes full year of wages for the hiring of a Deputy Director at Public Works (2013 budget was for 6 months).

• Overall 2014 Public Works Building budget has decreased by $8,300 when compared to 2013. The reason for this is again, due to the time tracking work performed in 2013. In the past the PW building has been allocated to the water (40%), sewer (15%) and general funds (45%). Upon review of the data it was noted that the water fund should be at 50%. Therefore, the 2014 budget has taken this change into account.

Rental Properties: • Budgeted revenue has increased by $5,721 or 9.8%, when compared to 2013 budgeted revenues, due to the increased rent being collected at Centennial trailer park.

• Community Service building is being budgeted to have some painting done as well as replacing some rugs at a cost of $5,700.

Roads & Drainage: • 2014 includes major bridge maintenance to be performed at a budgeted cost of $75,850, none budgeted in 2013. • 2014 includes dredging the waterway that drains Tucelnuit lake to help alleviate the current difficulties encountered when trying to control lake levels at a budgeted cost of $40,600, none budgeted in 2013. • 2014 includes a decrease in crack sealing by $65,000 as the majority of the roads were completed in 2013. • Taking the above into account, overall road operating expenses have increased $5,289 or 1.56%.  

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