Council mines reserves to balance budget

The Town of Lake Cowichan has approved its five-year financial plan, which includes transferring reserve

The Town of Lake Cowichan has approved its five-year financial plan, which includes transferring reserve funds, reducing industrial and business tax rates and attempting to increase government grants for infrastructure projects.

On Tuesday, April 26, the town provided an opportunity for members of the public to provide input on the financial plan before it was voted on later that evening during the regular monthly council meeting.

Joseph Fernandez, the town’s chief administrative officer, noted this year the town is looking at transfers from past surpluses in order to balance the 2016 budget.

“This is a year where if we were to look at tax increases or user fees we just wouldn’t be able to make the budget balance,” he said.

“We’re facing a difficult year this year but because we’ve got several surplus funds we’re able to make the budgets balance.”

According to the financial plan, the town will transfer $425,894 from surplus funds this year. It will also transfer $1.15 million from reserve funds.

Director of finance Ronnie Gill noted these steps will allow the town to avoid accumulating debt in 2016.

“There is $2.56 million in capital expenses so it’s a heavy year for capital improvements, so it’s good we’ve got reserves,” she said.

Gill referred to the $1.6 in capital expenditures in the water utility fund, which will go toward upgrading the town’s water treatment facility.

“These are mandated by the Ministry of Health,” she said. “These are improvements we must make by Dec. 31, 2017.”

One of the stated objectives of the town’s five-year (2016-2020) financial plan is to encourage investment and employment in the area by striving “to reduce the industrial and business tax rates.” The plan notes there is currently a limited industrial taxation base within the municipality.

However, this year the town is keeping business tax rates the same as last year because of the higher-than-normal capital expenses.

“And our business rates last time I checked, which has been a couple years, were lower than the neighbouring communities,” said Gill.

The financial plan prioritizes strategic community investment funds (government grants) provided by the Province of British Columbia, which not only pay for infrastructure projects but can reduce the level of municipal taxation. Currently 39 per cent of the town’s revenue comes from property taxes while approximately 16 per cent comes from government grants.

The plan states: “The Town will attempt to increase the sources of government grants to complete much needed infrastructure capital projects in the municipality.”

Furthermore, the plan also states the town will work to continue to “provide tax exemptions to charitable non-profit organizations and places of public worship as council recognizes the efforts and activities of volunteer and community groups,” while also pledging to periodically review these exemptions.

Members of the public were invited to ask questions about the financial plans. The questions centered on the upcoming Sunfest Country Music Festival. One person asked how much money would be allocated for extra policing, garbage collection and washroom maintenance.

Fernandez said that policing costs are not handled by the town. Mayor Ross Forrest said the only money designated by the town for Sunfest weekend would be for garbage collection.

Another member of the public asked a similar question, expressing concerns about Sunfest weekend.

“Do you not expect additional costs to the town because of the Sunfest event? … [Such as] vandalism, washrooms, traffic, on and on it goes,” he said.

“It just seems to me there are some contingency costs that should be thrown into the pot just in case. And if not, what would you do if you ran into a bunch of extra costs from Sunfest? Where would you get the money from?”

Forrest noted this was a public hearing on the financial plan and not Sunfest but said there are funds that could be accessed in the event of an emergency.

“It’s hard to budget for something you haven’t had before and you don’t know what that expense is going to be,” he said, referring to Sunfest.

The financial plan bylaw was carried unanimously by council.