COUNCIL CORNER: Council facing the challenges of budget time

Linda Nixon, chair of City of Revelstoke's finance committee, gives overview of budget process and city finances.

This is the third in a monthly series of columns from local elected officials. This month, councillor Linda Nixon, the chair of the city’s finance committee, writes about the budget.

By Linda Nixon, Revelstoke city councillor

The first draft of the 2015-2019 budget for the City of Revelstoke was prepared by city  staff and presented to mayor and council on February 20. Further meetings are planned that will give us the opportunity to both learn about municipal financial planning and to provide staff with direction in amending the plan as we move forward through the process. There will also be an opportunity for citizens to provide feedback on the financial plan through a public process.

The main costs in providing city services are infrastructure needs such as water, sewer and roads. Parks and recreation provide a healthy environment for citizens to enjoy and engage with each other.

The community undertook an Integrated Community Sustainability Plan in 2013 to guide future planning for the economic, environmental and social needs of the community. Recently the new council met to develop a strategic plan to drive the next four years. The finished document should be completetd this month. Goals accompanied by objectives that are specific and measurable will keep Revelstoke moving forward.

We have a diversified economy in that there is CPR, BC Hydro and a strong forestry industry in town. There is also a growing and healthy manufacturing sector. On the tourism side, our mountains and lakes offer a rich diversity of summer and winter sports including alpine and Nordic skiing, mountain biking, hiking, climbing, fishing, dirt biking and camping.

Balancing our needs is 80 percent of the budget — the core. The wants are about 20 percent. Satisfying everyone with the tax pie is impossible. It is the job of the council to attempt in a very serious manner to make the pie palatable to all classes of the taxpayers — residential, commercial businesses, light manufacturers, heavy industry and utilities. There is also a small class of seasonal property. We have no private forest lands within the municipality.

The first draft of the 2015-2019 budget was first studied by the new council on Friday, February 20. Mayor McKee turned the meeting over to Graham Inglis, the finance director, to lead council through the document. The new council will ask the questions and make the decisions as the budget is shifted and shaped in budget meetings.

There is a long standing policy in the City of Revelstoke that the total tax burden is shared equally between residential and business classes.

For this budget, council will proceed without input from a community-based focus group. In the fall of 2015, the focus group will be called to add back a broader community voice at the budget table for future budgets. The goal is to have the 2016 budget done earlier than this one.

As well as municipal taxes, the city collects tax for the school district, the Columbia Shuswap Regional District, the North Okanagan Regional Hospital Board, the Okanagan Library, the BC Assessment Authority, and the Municipal Finance Authority. Utility charges are also included in the residential tax payment statements. As these revenues come into the city coffers mid-year, due on July 2, the council of the day must pass a bylaw allowing the city to borrow from a line of credit from January to July if need be. This line of credit has not been used for several years and should not need to be used this year for the city of Revelstoke.

The assessment value of a home or business is done by BC Assessment, an independent body crown corporation of the provincial government. The City of Revelstoke has had a roller coaster of assessments in the last 10 years where housing assessments doubled then fell after the global recession. There is not a predictable, steady forecast of assessments. When assessments decrease, it becomes necessary to increase the tax rate for each tax class in order to maintain a particular budget level.

This year, the overall assessment total is slightly up from last year. The previous council started a reserve fund to try to help buffer some of these changes which can affect the latter years of a multi-year budget.

Another challenge to forecasting is inaccurate census data. The official current population of Revelstoke is 7,200 which swells in both winter and again in summer. Services need to be provided not only for the base population, but also for the seasonal increases. Many businesses benefit directly from the seasonal population surge. Many residents benefit from the enhanced tourism infrastructure such as the ski hill, the cross-country ski lodge with lights for night skiing, the snowmobiling cabin and groomer, enhancements which came about as a result of the seasonal population surge.

Revelstoke is one of fourteen  local governments that is designated as a Resort Municipality by the Province of British Columbia. This gives the community  additional tourism infrastructure monies from the Province in the form of a grant that must be used to develop tourism infrastructure. This funding is administered by the Department of Community Economic Development, which is accountable to city council. A special two per cent hotel tax is collected by the province on every hotel room within city limits. This money is remitted to the city and flows from the city through to the Revelstoke Accommodation Association. These funds can only be used for tourism promotion activities.

The Regional District also has an Economic Opportunity Fund which can be used for projects in the area that meet the criteria of providing new economic projects. BC Hydro pays a grant in lieu of taxes. This grant is expected to increase when the sixth generating station is installed.

 

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