Posted: April 8, 2019
On Tuesday, April 16th, 2019, the District of Tofino is holding a Special Council Meeting at 9:00 AM in the Council Chamber, Municipal Office, 380 Campbell Street for the purposes of reviewing the 2019-2023 Proposed Financial Plan.
The slides from the Meeting presentation are included below.
We Want to Hear From You!
Tofino’s property taxes are collected to address three main areas of expenditures:
- The general municipal operations budget to deliver services to the community, such as roads, parking, parks, trails, recreation programs, planning and development services, fire protection, bylaw enforcement, emergency planning, and much more.
- Debt servicing required for long-term loans taken out to build infrastructure such as water reservoirs or sewer infrastructure.
- A Capital and Infrastructure Levy (“C&I Levy”), which effectively builds savings accounts to maintain and replace infrastructure from roads to pipes to buildings.
In 2018, together these three types of expenses added up to $4.32M.
Property value taxes comprised only 25.4% of Tofino’s total budget last year – because fees, grants, and transfers from reserves add to the total municipal budget of $12.26M.
The draft 2019 budget calls for increases in all three areas of expenditures, as follows:
- General municipal operations budget is proposed to increase by 2%, as it generally has in previous years. This accounts for rising costs of fuel, hydro, materials and supply inventory, equipment, professional fees, wages and benefits and other operating costs.
- Debt-servicing will be increased in 2019 by just over $67,000 to account for two new sources of debt: the wastewater treatment project, and a BC Housing loan guarantee required to enable the Tofino Housing Corporation to borrow $353,780 for the development of affordable housing at DL114.
- The C&I Levy is proposed to increase by 4.3% in 2019. This increase is part of a steady and measured rise in saving for infrastructure replacement to bring the municipality to a stable long-term position of being able manage our infrastructure without sudden shocks to the taxpayer. Many municipalities, the District of Tofino included, have recently begun Asset Management programs to manage municipal assets and make better investment decisions. The program relies on accurate information about the state of our roads, pipes, buildings and other assets, and is similar to a homeowner saving up a little bit each year to replace the roof on their house, or ensuring that you’ve saved up enough to cover the costs of fixing your brakes when they wear down.
Together, the increases in these three areas will result in a change from 2018 taxation of $4.32M, to $4.64M in 2019, which is a 7.4% increase.
Municipalities must forecast their budgets for five years, and present a balanced budget for each of these years.
The wastewater treatment project is the largest project this municipality has ever undertaken, and by 2020 the full effects of its cost will show up in property tax requisitions. The municipal operations budget is forecast to continue to rise at 2% per year. Together with the Capital and Infrastructure Levy increases (forecast at approximately 4% each year until 2023 when the reserves stabilize to a sufficient level) and the other projects that Tofino Council is planning for, such as the possibility of a new recreation facility, the proposed 2019-2023 Financial Plan shows increases as follows:
- 2020: 9.53%
- 2021: 9.28%
- 2022: 23.05%
- 2023: 3.90%
These amounts may change, for example if projects such as the recreation facility do not go forward or are delayed.
The only changes that are certain in any given year are those of the current year, i.e., the 2019 increase will be confirmed and the remaining four years discussed in detail again as each year passes.
Generally speaking, the forecasted increases are needed:
- To account for rising costs of fuel, hydro, materials and supply inventory, equipment, professional fees, wages and benefits and other operating costs;
- To pay for services and facilities that Tofitians expect – such as clean drinking water and fire protection – as well as to pay for services that Council sees as important to our community’s health and well-being, such as robust by-law enforcement or a new recreation facility;
- To pay for services that Tofino has been mandated to deliver, namely sewage treatment; and
- To adequately set aside savings (a.k.a. reserves) that will pay for the true costs of annually maintaining roads, pipes, parks, and buildings so that Tofitians can benefit from them for years without worrying that sudden tax increases will be needed to fix and replace them when they break, wear out, or become unsafe.