2017 Budget

West Vancouver, like almost every municipality in Canada, has ageing infrastructure requiring a long-term plan and financial resources to repair, maintain and replace it. This includes everything from community centres and the Seawalk to park benches and sewer lines.

Last year, the District took a critical first step to addressing this issue when Council passed an asset management levy and created an asset reserve.

In this year's budget, the District will further build the asset reserve while continuing to provide you with municipal services of the highest quality. 

2017 Budget Approved by Council

On February 20, Council approved an operational levy increase of 2.00 per cent and asset levy increase of 2.45 per cent. The 5 Year Financial Plan was developed with the approved levy increases and the 5 Year Financial Plan Bylaw was adopted on April 3.

Council Report: Proposed 2017 Capital and Operating Budgets

Five Year Financial Plan 2017-2021

Impact to Households

The impact of the asset levy and tax rate change to residents will vary based on the assessed value of their property.

The PDF below summarizes the impact of the tax increases to property owners based on assessed value.

2017 Property Tax Impact to Households

2017 Assessment Information

2017 Assessments for residential properties in West Vancouver increased by an average of 33%.

Assessment increases do not produce the overall increase in municipal taxes.  If there is no tax rate increase approved by Council, then the municipality collects the same amount in property taxes overall as in the previous year.

Assessment increases do cause property taxes to shift, that is, to move off of some properties and on to others. The change in individual property assessments relative to the average will determine whether individual property owners pay more, less, or the same amount of tax as in the previous year.

If an individual property assessment changes by the average assessment change of 33% — individual property tax will not be impacted by the assessment change

If an individual property assessment changes by less than the average assessment change of 33% — the change in assessment will cause taxes to shift off of the property, likely resulting in a decrease in taxes from the prior year.

If an individual property assessment changes by more than the average assessment change of 33% — the change in assessment will cause taxes to shift on to the property, likely resulting in an increase in taxes from the prior year.

The link below navigates to a GIS map which illustrates the assessment changes for West Vancouver residential properties. Hovering over a specific property will show the percentage change in assessment from the previous year. 

Map of assessment changes for 2017

Operating Budget & Process

Providing residents and businesses with the quality of municipal services they expect is important. Like any business or household, the municipality is challenged with increased costs for providing services.

Each year as part of the budget process, choices must be made so that the increase in costs is balanced with a tax rate increase that is affordable.

The cost of providing municipal services and the monthly impact to each West Vancouver resident is illustrated in the PDF below:

Cost of Providing Municipal Services

After considering all non-taxation sources of revenue and identifying opportunities for operational efficiencies, an additional $1.6 million, which represents a tax rate increase of 2.55%, is required to meet anticipated 2017 expenditures of $89 million.

Only cost pressures which are critical to delivering a comparable level of services to that provided in 2016 have been taken into consideration. The increased cost pressure is primarily due to contractual increases for labour, contracts and energy costs.

Capital Budget & Process

The District of West Vancouver owns over $1 billion in infrastructure, much of which is aging and requires a long-term management plan and financial resources to repair, maintain and replace.

Due to the limitation imposed by this funding gap, project requests have been prioritized and only projects with the characteristics below have been considered for funding:

  • Those which address assets which are at risk of failure;
  • Those which are critical to ensuring the safety of workers or residents; and
  • Those which are considered critical to community.

In addition to ongoing annual works such as maintenance of roads, bridges, sports fields and equipment, significant projects planned in 2017 include seismic upgrades to Municipal Hall and Fire Station #1.

Other projects planned in 2017 include restoration of the Ferry Building, Aquatic Centre change room expansion and a new Technology Learning Lab and exterior accessibility ramp at the West Vancouver Memorial Library.

Asset Management Update

The Fiscal Sustainability–General Fund Asset Review (Dec 2015) led to the conclusion that an annual asset investment gap of approximately $6.5 million existed.

Council responded by establishing:

1. the Asset Levy, which added $3 million to the amount invested annually in assets;
2. the Asset Reserves, which separated the management of asset investment from the operating budget.

An annual asset investment gap of $3.5 million remained.

In 2016, Council also asked staff to revisit the list of assets and update the state and condition information.  This provided: 

  • an updated listing of assets
  • updated re-investment costs; and
  • a ranking of all assets by condition and use.

From this information, a new annual investment requirement of $13.3 million was calculated, and a list of low use, poor condition assets was produced.

Based on this new information, the investment gap is reduced to $2.9 million.  

For further information, please see the asset management update report to Council:  

Council Report: Proposed Asset Managment Policy and Asset Management Update

Information Meetings

Information meetings were held on January 30, February 1 and 2. A questionnaire was open for public feedback and closed on February 10.

Thank you for your interest and feedback.

Proposed 2017 Budget - Information Session Presentation

Questions & Answers from the January 30 Budget Information Meeting

Notes from Budget Information Meeting, January 30, 2017. 6–8 p.m.
West Vancouver Memorial Library, Welsh Hall West
Total Attendees: 27 (14 residents, 13 Councillors/staff)

Q: Can you explain what each colour on the 20-year life-cycle replacement and maintenance slide mean?
A: Each colour refers to assets that support an operational area and requires investment to continue to operate. The areas of the graph where the bar extends above the required asset investment, specifically in 2018 and 2020, refer to larger gaps in funding. The major categories represented (in order from top to bottom) are:

  • Facilities – yellow
  • Library – grey
  • Police Equipment - purple
  • Fire Equipment – red
  • Parks, Culture, and Community – brown
  • Engineering Infrastructure and Equipment – green
  • Information Technology – blue

The main assets requiring investment above the line in 2018 are:

  • Facilities – Fire Hall #1; Ice Arena; and the Seniors’ Activity Centre.

The main assets requiring investment in 2020 are:

  • Facilities – Library, Operations Centre, and Municipal Hall, and Fire Equipment – Aerial Platform Ladder Truck and Pumper.

Q: In the 2017 preliminary operational budget, why is the contract labour increase almost double the Police Services increase?
A: Those two numbers can’t be compared because they are composed of different kinds of employees. A collective agreement provision of 1.5% for West Vancouver municipal employees and 2.5% for West Vancouver firefighters is required in 2017. A 2% provision for exempt positions and 3% for Council is also included. The Police Services increase includes a labour increase provision of 2.5%, critical communications and technology contract obligations and one additional FTE.

Q: Why does Fire & Rescue Services require more funds to operate than other operational areas?
A: Due to the geography of West Vancouver, in order to meet standards of coverage for fire safety, there are 4 fire halls in West Vancouver, each of which requires staffing and equipment. Four halls is a high number for a community of this size (for instance, the City of North Vancouver, with a comparable population, has only one Fire Hall). However, the number of Halls cannot be reduced without affecting coverage, which would certainly result in much higher fire insurance premiums for District residents.

Q: The median household assessment in West Vancouver is $2.8M. Young families aren’t moving here because they don’t want to, they just can’t afford it. What are you doing to invest in building more affordable housing?
A: Council is very concerned with this issue. They have established an Affordable Housing fund, have directed $5M in public amenity contributions to the fund, and are discussing possible uses of District-owned land to create options for affordable housing in West Vancouver.

Q: Where can we get a copy of the District’s list of assets?
A:  You can view a listing of the General Fund assets in the General Fund Capital Assets Long-term Planning & Projections report.

Q: Is the Gleneagles Community Centre one of the assets that are underused and expensive to operate?
A: The facility does not show up on the low use, poor condition list. In fact, it is a relatively high use facility, with many programs offered. It perhaps suffers by comparison with the Community Centre and Aquatic Facility, which is a very high use facility, but its usage statistics are not low.

Q: Thank you for placing streetside recycling bins in Horseshoe Bay. Why aren’t there more recycling bins throughout the community?
A:  This is only the second year of public realm recycling in the District. Although public realm recycling is common in Europe, it is not as common here yet.  The bins in Horseshoe Bay are part of a pilot project to introduce recycling to the public realm. Assuming they are successful, the plan is to introduce similar bins in many more locations.

Q: Why is there an asterisk under the percentage change column for the asset levy?
A: The asset levy percentage is based on the overall tax base, not on the amount of last years’ asset levy. We didn’t want to mislead people into trying to calculate the percentage based on the change from last years’ levy.

Q: Is the proposed increase to the operating budget and asset levy about 5%?
A: Yes, we are proposing an operation levy of 2.55% and an asset levy of 2.45%.

Q: There was a core services review, have we seen any results from that?
A: We are close to reporting out on that. The core service review is looking at all expenditures and the services provided and looked for possible efficiencies. It did not divide the services up into ‘core’ and ‘non-core’, as that is not really something that can be done except by Council and the community. Each community has to decide, through the Council process, what services it wants to fund.

Q: The community is ageing and many residents are on fixed incomes. A 5 percent year-over-year increase would be getting ahead of our pensions. 
A: Municipal costs and household costs are different. We are recommending more funding to maintain the assets and to maintain the services at the level the community expects.

Q: Over the past 5 years, many municipalities have made a lot of money from permits. What happened to that money?
A: Permit revenue is always part of the budget, and, because it is somewhat unreliable, it is budgeted conservatively at a level we feel fairly certain can be obtained. For the past several years, this level has been exceeded due to heavy permit activity. Each Fall, we report this excess to Council as part of the budget revision, and Council decides what to do with the extra funds. In 2017, so far, permit activity has slowed down, so there may be no excess funds this year.

Q: Did our taxes go down in years with increased permit revenues?
A: Increased permit revenues always form part of the budget, so they do reduce the requirement for taxes.

Q: Why are we putting in new bike lanes when the funds could be used to maintain the assets?
A: While assets, such as roads are being rehabilitated, it makes sense to upgrade them to accommodate current needs.  Guided by Council policy, such as the Strategic Transportation Plan and the Cycling Network Master Plan, road space is being allocated to other modes of travel, including pedestrians, transit, as well as cyclists.  New facilities, such as Spirit Trail are being implemented with cost-sharing grants from TransLink and senior governments.

Q: There are more employees being hired again this year. Why is this necessary when technology is supposed to encourage us to become more efficient?
A: The complexity of municipal services continues to increase. The level of expertise that is required of municipal employees to provide the current level of service to the community is high. Also, there has been underinvestment in technology, and this has not helped with efficiency. The Core Service review will help the District identify alternatives.

Note: An incorrect figure of “over 4,000” was given in response to a question regarding the number of District properties receiving a tax deferral. The correct number is 1,934 properties receiving a tax deferral in 2016.This represents approximately 12% of all District residential properties.

Questions & Answers from the February 1 Budget Information Meeting

Notes from Budget Information Meeting, February 1, 2017. 2–4 p.m.
Seniors' Activity Centre, Learning  Studio
Total Attendees: 30 (21 residents, 9 Councillors/staff)

Q: What is the link between the municipality and the assessments?
A: BC Assessment are a completely independent agency, set up by the Province to do all the assessments. They use many different sources of information, from real estate sales information to physical property inspections, to ensure that they have all the relevant information in order to assess the property. They do get copies of all permits that are taken out at the District, as well as all rezoning information. If a permit for any demolition, construction, or renovation on a property is issued, a copy goes to BC Assessment.
 

Q: What percentage of properties in West Vancouver experienced decreases in their assessments?
A: Twenty-four District houses and strata properties (out of a total of 15,280) decreased in value in 2017. That is less than 0.2%. Of these, 15 were single detached dwellings, and 9 were strata properties.

Q: How can an assessment show a building value when the building has been demolished? 
A: Even if a building is demolished, it may still show up on the assessment roll. BC Assessment does the valuation each year as of the market conditions on July 1, but they do it for the physical condition and permitted use of the property as of Oct 31. If the building was there on Oct 31, it may be assessed even if it is demolished the next day. However, there can be adjustments where substantial damage or destruction of the buildings occurs between October 31 and December 31. If you can show that this is the case, you should call BC Assessment about this.

Q: Was last year's assessment done in July?
A: Yes, BC Assessment is required by the Assessment Act to do the valuation each year as of the market conditions on July 1. The fact that the government chose a date on which to introduce the foreign buyers' tax that was shortly after the assessment date did not affect any valuation that BC Assessment made, because it was after July 1. By July 1, 2017, when BC Assessment do their next valuation, they will use 2017 values, which will then reflect any changes since last year.

Q: Is the report on the District's assets like the depreciation report that stratas are required to do now?
A: Yes, it is very similar. Just as the common assets of a strata need to be maintained by all the owners, the District's assets need to be maintained by all the District taxpayers, and also similar to the strata reports, the District's reports generally show that it is more costly to do all the required maintenance than people would predict.

Q: Does the optimum point in an asset's life-cycle move?
A: Yes. First, maintenance schedules are dependent on the type of asset. Each type of asset has different characteristics and requires a different program of maintenance. Second, it depends on how the asset is being used. A heavily used public asset (such as the public pool) will require more intensive maintenance than the same type of asset in a private setting (such as a pool in a back yard). Both pools require maintenance, but the optimal maintenance schedule for the public pool is far more rigorous.

Q: Is this make-work for the divisions?
A: It is far from 'make-work'. It is part of the District's basic responsibilities not just to acquire and construct assets, but also to care for them, hopefully at the optimal level, throughout their life cycles. Divisional director's see this as a key part of their, and their staff's, jobs.

Q: Does the critical point in the asset's life cycle move too?
A: Certainly. The critical point is the point where, if maintenance is not done, or not done very well, failure beings to become likely. There is a close relationship between when maintenance is done, and when the critical point arrives. Even if maintenance is done well, the asset may eventually reach the critical point, where it makes sense to stop spending any more time and money on it and just replace it. But, if maintenance is not done, the critical point, where breakdown becomes likely, will certainly arrive much more quickly.

Q: Are staff dedicated to asset management and how much time do they devote to it?
A: The Asset Management Task Group is a staff working group tasked with managing the assets, but asset management is an ongoing part of each division's responsibility. Some staff, such as the Fleet Manager, or the Facilities Manager, spend a higher percentage of their time on it, but all staff are aware of it.

Q: Can you tell us more about the 3 single detached dwellings in the Poor Condition, Low Use Assets slide?
A: They are single detached dwellings in parks that are currently being used as park caretaker residences. Each of them is in need of significant maintenance, and the question is "Is it worth it?" Are these assets still essential to provide the needed service, or is there some other, better way to do this? The houses are located in Whytecliff, Lighthouse, and Brissenden Parks.

Q: Are they inhabited?
A: Yes, they are currently inhabited.

Q: What options are available for parks if the District no longer decides to have caretakers?
A: It would depend on the level of security and service needed at the park. Most municipalities no longer use resident park caretakers, and have moved to alternate way of providing these services.

Q: Is the asset funding gap cumulative?
A: Yes, each year we are trying to catch up and close the gap, and each year that we underinvest, the gap keeps growing as asset investments are postponed due to lack of funds. This not to say that more money is the only answer to this problem. There are other options that could be considered in order to close the asset funding gap, such as:

  • stop maintaining some items (just use to the failure point, then scrap without replacement)
  • lower maintenance costs by consolidating items,
  • get rid of (sell or dispose of) some assets.

One thing that should also be mentioned is that the District is developing a framework for evaluating new assets. This is key to closing the gap, because obviously, if there is not enough money to maintain what we have now, taking on more will simply make the problem worse. Therefore, new assets have to be considered very carefully and strategically, and the framework will provide a means to do that.

Q: What have you invested in?
A: All funds that the District has which are not needed to meet immediate cash requirements are invested. This happens routinely because, for instance, we collect all of the taxes for the year on one day. In terms of how we manage the investments, we have a Council-approved investment strategy using the Municipal Finance Authority’s pooled investment funds. The District’s Finance Committee is reviewing this investment strategy and will consider whether to recommend moving to non-MFA investments. In any case, municipalities are restricted by provincial legislation to very conservative investments, basically government bonds and bank or credit union deposits. Investing in more risky instruments such as equities or derivatives is not allowed, so any investment protocol that the District may adopt will be a minimal-risk strategy.

Q: Where do the police fines go?
A: What is called "Traffic Fine Revenue Sharing" is an amount that comes each year from the Province, and it is shown as revenue in police operations. The amount that is received therefore lowers the amount that the police operations requires to be funded from taxes.

Q: Don't some of the police fines go to the Province?
A: Yes, all of them do. Payment for all tickets issued in BC by the police goes to the Province. The Province then pools all of the collected fines and redistributes the money to the municipalities using a formula based on relative spending on police costs.

Q: Does the Engineering & Transportation operational subsidy number include the Blue Bus?
A: No, municipal taxes don't pay for the Blue Bus service. That is fully handled through Translink.

Q: Do you include community amenity contributions (CAC's) in part of the permit revenue?
A: No. CAC's are accounted for separately. Some CAC's are set aside for specific projects, related to the development they came from, for instance, park improvements in Horseshoe Bay. They can also be allocated for a specific use, for example, Council recently set aside $5M in CAC's in an Affordable Housing Reserve. Also, every year in the capital budget, community projects are proposed to be funded from CAC's, if Council approves. CAC's are not generally used for asset management, but to create tangible improvements for community use. This can create asset management issues, however, if the cost of maintaining the new community assets is not thought through.

Q: Employee salaries make up about 60 to 80% of the budget in most divisions. The most recent information says that 107 employees make over $100,000. What are they doing about how much it's going to be this year?
A: Council looks each year at the number of employees, and approves each new position. In terms of how much employees are paid, this is based on contracts negotiated through Human Resources and approved by Council. The District has 3 separate bargaining units (Fire, Police, and WVMEA = West Vancouver Municipal Employees Association) and exempt employees (i.e. employees, usually managers, who are not in a union). The Core Services Review currently underway is looking at the number of employees, the overall trend, and what needs to be done to manage these costs.

Q: When do the contracts come up?
A: At different times. The WVMEA contract expired at the end of 2016 and they are in bargaining now. The Police contract is also up for renewal and is being negotiated. The Fire contract is current and expires at the end of 2019.

Q: How can anyone get information about bargaining?
A: Legally, it's a closed process. Even Finance does not get any information on what is being negotiated until bargaining is completed and Council has ratified the settlement.

Q: There seems to be a slow creep of more District employees. Are we covered with pensions and benefits?
A:  Municipal employees belong to a province-wide pension plan called municipal superannuation, and it is fully funded from employer/employee contributions. In terms of other benefits, the District receives an actuarial valuation every three years of the outstanding liability and then considers what funding to set aside for this. At this time, there may be a small unfunded liability, but this is not considered to be very risky as it is extremely unlikely that all of these benefit banks will need to be paid out at one time.

Q: How much is this really looked at, the snow creep of FTE?
A: It is looked at quite a bit, and it is being managed. The kind of work that is done at the municipal level is becoming more complicated and requires specialized training. It's difficult to hire in West Vancouver because people can't move here. We are transitioning to having more people with specializations and there has been underinvestment in technology in the District. The Core Funding Review is helping to quantify these issues, and staff will be using this information to come up with long-term solutions.

Q: Where can we look at the budget in more detail?
A: The budget book is available online at westvancouver.ca/budget. Hard copies can be made available upon request.

Questions & Answers from the February 2 Budget Information Meeting

Notes from Budget Information Meeting, February 2, 2017. 6:30–8:30 p.m.
Gleneagles Community Centre, Seaview Room
Total Attendees: 9 (3 residents, 1 Councillor/5 staff)

Q: Why is the optimum point in an asset's life-cycle so broad? There's not much difference between 6 and 10 years.
A: The optimum point would look different for different kinds of assets. There is a range of optimal points depending on the asset.

Q: Why are the unpleasant washrooms in John Lawson Park not included on the poor condition, low use assets list?
A: The washrooms at John Lawson Park were identified as "deteriorating condition, high use" by the asset management review process, and community input has indicated that the condition of this asset is impacting service. Therefore, they have been advanced forward of what would ordinarily be their renewal date, and are recommended for renovation as part of the proposed 2017 Capital Budget.

Q: Are new items included in the optimal capital investment figure in 2017 preliminary capital budget?
A: There is only one new item recommended for funding in 2017 using Asset Levy funds, and this is a vehicle to be used in the enhanced construction standards enforcement program. All the other new items in the proposed 2017 Capital Budget are funded from CAC's (Community Amenity Contributions) or external sources such as grants or donations.

Q: Is the sewage treatment plant also included in the optimal capital investment figure?
A: No. The treatment plant is a regional facility which will be constructed and operated by the Greater Vancouver Sewerage and Drainage District Authority (GVS&DD). This authority charges a levy to each municipality for the services it provides, and that levy is collected by the District through the quarterly sewer bill. At this time, the increase in cost that the GVS&DD will levy is not fully determined, but it is known that the increase will be substantial. This will be reflected in increases to the sewer bill in future. 

Q: What does the item in the operational budget called “one-time use of surplus” mean?
A: Surplus is the amount left over from revenues for the year after all the annual expenses have been recorded. It is generally small, but many municipalities allow it to build up year over year to create a fund to draw on in case of emergencies. However, Councils are not required to do this. In 2016, Council decided to use prior year surplus to, in effect, smooth out the tax rate increase needed to balance the budget. However, this means that the revenues really were not sufficient to cover the expenses. In 2017, it is recommended that the District return to covering expenses with revenues, including taxation, therefore the one-time surplus amount is shown as a revenue reduction.

Q: Could there be a special tax that is levied on unoccupied houses in West Vancouver? Has this been considered?
A: Municipal tax policy is governed by provincial legislation, so no changes to provincially-governed matters can be made to taxes without provincial legislative amendments. The province has allowed the City of Vancouver to put a 'vacant home tax' in place. Vancouver is in a unique position to do this because they operate under their own charter, and so are legally able to do things that no other municipality in the province can do. The province basically has said something to the effect of: Let Vancouver do it, and then we'll see whether it is appropriate for the rest of the municipalities to do the same. So far, the City of Vancouver has expended considerable effort on developing a 'vacant home tax program', but the results of the program are not yet clear. Councils and staff in the other lower mainland municipalities are watching with interest to see the effectiveness of such a program, including how much revenue the Vancouver program generates, whether it covers its costs, and whether it has any discernible impact on real estate sales. District staff will also monitor the effectiveness of the City of Vancouver program, and have been in contact with the province about the possibilities for West Vancouver, but no decisions have been made in this regard.

Contact

Financial Services

604-925-7032

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