Don Quixote Budget Submission Tomorrow at 5:30

Below are pages 3 & 4 from my submission to Council re Budget Input for the Public Input Session Tuesday Night at 5:30 at City Hall. The full budget handout can be found at http://www.vernon.ca/documents/public_input_session.pdf .

If you wish a copy of my full 5 page submission I can send it as an attachment in word form if you e-mail me at don.quixote@vernonblog.com

The present budget has a $421,300 or a 2.83% Tax Increase.
1% = $148,869

AREAS THAT SHOULD BE EXAMINED IN THIS BUDGET:

• There is an estimated $780,000 in an operating surplus for 2006 that has yet to be finalized but even with an estimated 60-80,000 in carryovers this surplus to be sliced and diced should be at least $700,000. (Most of this surplus came from reductions in borrowing costs and building fees revenue. (The approximately $350,000 in Policing Excess was put into the Police Reserve on July 24 in a bylaw change that was merely a window dressing measure. )
• Land Corporation Committee Budget. The $30,000 for honorariums is not in this budget and the proposed $30,000 in fees for services has yet to be approved. However there are soft costs such as $24,000 for support services and $5000 for meeting costs. If the support service costs aren’t actually new staff but just using the services of existing staff then this is double counting. It might be an applied cost to the committee but it s/b a credit to the City department from which it is already budgeted.
• The Airport Capital Request for a further $300,000 to be consolidated with the $113,333 in the existing capital reserve (On the Airport’s books at 2006 year end) to pay for the estimated $415,627 for Taxiway Charlie will be decided by council after a Business case presentation but presently is in the budget and is part of the 2.83% tax increase. The decision whether this could be financed through borrowing is part of the debate.
• This year’s operating budget grant from the City for the Airport is $97,985. The X Factor: Any operating deficits or surpluses must be considered in the 2007 budget cycle for the 2004-2006 year period in which the Airport had their own books of account. The accumulated deficit on Airport's books of $98,498 to 2005 year end and any loss or profit for 2006 affect the 2007 budget. When Amortization is backed out in the amount of $ 163,530 {$68314 (2004) and $95216 (2005)} the deficit of $98,498 becomes a surplus of $65,032 at 2005 year end. Combined with the 2006 profit at the same rate we would have about $100,000 to finance this years operating Grant or placed against capital Reserves to pay for Taxiway Charlie!
• Discussion about the $1,100,000 in the 2008-2011 out years for Airport Capital Projects (but not shown on the Reserve sheets) is imperative. If this is a reserve for Runway Expansion estimated to be at least $4,000.000 then a decision whether this should be financed through borrowing rather than taxation must be part of the debate. The decision to bring the Airport to NORD as part of any approved Economic Function should be explored immediately as part of the service review.
• Police reserve at 2006 year end stands at a restated $1,843,000. Police reserve fund stands at $1,218,180 at 2007 year end without any 2006 surplus (20,000- 30,000). The $624,820 draw down includes $241,000 for the new bylaw enforcement officers. Original 2.84% budget for 2007 showed an intended reserve position at year end of $913,000. (See RCMP ANALYSIS at G!) “The RCMP reserve is projected to reduce in 2007 to below the $1,000,000 threshold identified by Council,” (P.A2). IF Police Reserve was reduced down to the $1,000,000 threshold there could be $218,180 or 1.46% in tax reduction
• The OUTFALL pipe system valued at $3,395,161 on Vernon's books should be fully paid after 2007 and this item will disappear from your Tax Bill if you were one of the lucky ones who were paying for it the last 20 years.
• Tax Ratios: Council’s decision to adjust the tax ratios on the Light Industrial and Utilities Class is projected to bring in extra revenue in 2007. The Light Industrial revenue increase of $96,500 will be applied to the business class and thus will lower the business tax increase below that of the residential tax increase if no other adjustments are made. The Utilities Ratio increase will bring in $13427 in general Utilities Revenue and $70,000 in B.C. Hydro Grant in Lieu Revenue and this $83,427 will flow through to all taxpayers in 2007. The out year revenue projections in 2008 show no increase for the Hydro Grant line item or the Light industrial line item even though the ratios were phased in over 2 years? The expected revenue in 2008 or 2009 is not forecasted for the 21.7 million B.C. Hydro Control centre? ($400,000?)
• DCC’s : Most cities are either doing a DCC review or raising DCC’s by up to 30% this year. There are many cities that have budgeted money ($50,000) to hire a consultant to do this necessary review. Kelowna actually has a full time staff member to keep on top of this item. Might be a good use for the $700,000 operating surplus from last year. Remember if your DCC’s are $4,000,000 for a year then a 10% undercharge is $400,000. A DCC review in conjunction with an affordable housing study on eliminating DCC’s for approved low income housing could free up the $550,000 in the ASSISTED LIVING RESERVE. FINANCIAL ASSISTANCE FOR NON-PROFIT AND AFFORDABLE RENTAL HOUSING LEGISLATIVE AUTHORITY: Waiving/reducing fees and charges* – Development cost charges, building permit fees or property taxes may be waived or reduced, in certain circumstances (such as heritage buildings), or when improvements are owned or held by a charitable, philanthropic or other non-profit corporation. (Section 224, Community Charter and Section 933 LGA)
• Building permit fees – The Dev Excess Revenue Reserve has a balance of $196,693 which is adequate protection for the slight increase put in the budget for building permit fees. Last year the total Commercial Building Value was $8,647,336, already in January there is a $15,000,000 + building permit in this class.
• RESERVES: A thorough and immediate review of the History and purpose of all the Operational Reserves should be undertaken. When you see that there still is $31,000 in the Council Initiative Fund (wiggle room fund or slush fund) which represents the tag ends from last years slicing and dicing section then the taxpayer can only wonder why? There is $150,000 in a capital Grant Matching Fund established last year which could be a source for a grant application from http://www.spiritsquares.gov.bc.ca/ The province is providing $20 million to create or improve outdoor public meeting and celebration spaces, such as traditional town squares or community commons. Generally projects will be outdoors, accessible to the community and near other public sites, such as parks. (Feb 17 Deadline)