Mayor's Update: 2020 Budget Information

Jan 29, 2020

Hello everyone,

As the District moves forward to public engagement on the proposed 2020 budget, I frequently get asked the question, “Why is the proposed budget increase not the same as the rate of inflation?" I’d like to address that, and some other frequently asked questions, here.

First, what’s in the budget? The 2020 proposed budget includes:

  • A proposed tax increase of 3.95%
  • An Asset Levy of 0.5%, and
  • A new Climate Levy of 1%

…for a total of 5.45%.

Why is the tax levy higher than the rate of inflation?

Inflation measures the cost of living, and that is only one of a number of factors that drive the cost of delivering services to our community. Most services are delivered by staff, and staff wages are determined by collective agreements.

There are other cost pressures that the District cannot control. Electricity and gas costs are not tied to the rate of inflation, and these definitely affect the cost of services in our facilities.

Does the District look for funding from sources other than taxes?

Yes, the District earns revenue from fees and charges, particularly development permits. Development permit revenue fluctuates because it is tied to the housing market. In 2020 we anticipate the housing market will be relatively flat, so we expect less revenue this year. When we have a revenue shortfall, we first look for alternate sources of revenue, then reduce expenses where we can, and finally, we need to make up any remaining shortfall by adjusting the tax levy.

Why does West Vancouver have the highest per capita spending of lower mainland municipalities?

The level of staff and the level of taxation in West Vancouver are directly tied to the level of service. We are a service industry, and one of the things people love about our community is the high level of service provided here. The factors that drive costs in our community are:

Density – We are largely a community of large single-family lots. The cost of a length of road or a pipe is the same whether it serves twenty households, four households or one. The costs of these services become much less per capita as development becomes denser. It may be less obvious, but the same costing principle applies to Police and Fire protection, parks, and event planning. A low-density community creates high costs per capita. And, with an average of less than five residents per hectare, West Vancouver is one of the least densely populated municipalities in the lower mainland.

Lack of Industry – There is no industry in West Vancouver to share operating and infrastructure renewal costs. Ninety-three per cent of the tax burden falls to residents and the remaining seven per cent to small business. In most other municipalities, the proportion of municipal costs borne by residents is much smaller due to the diversity of the tax base. Residents can share the costs with corporate offices and industry, to name a few.

Geography – In addition to being spread out, West Vancouver has some of the most challenging geography in the lower mainland. Building up a mountain or down to a beachfront is more costly per meter that it is to build in a flat community like Delta. Our residents love the natural beauty and geography of our community, but it is more costly to service.

Age of Infrastructure - West Vancouver is over 100 years old, and our infrastructure is aging. Unlike many other municipalities in the Lower Mainland, we have not had much new development, and the benefit of development is having the developers pay for infrastructure replacement. West Vancouver’s tax base is mostly residential, with very little business and no industry. Without development or industry, the burden of infrastructure replacement falls to residents.

Level of Services - West Vancouver does spend more per capita but also provides very high-quality community centres, sports programs, the library, the Seawalk, and more than 100 other parks. Many of these amenities are equal to, or better than, what much larger communities such as Richmond, Burnaby, and even City of Vancouver provide. Our residents value these higher levels of service, but they do cost money. There are also costs that we often don’t think about. To provide our own Blue Bus, the municipality invests human resources, legal, communications, and administrative costs that are not reimbursed by TransLink. And, providing our own police force is more expensive than using the RCMP. 

Why does staff want to add additional staff positions when you tell us that West Vancouver’s population is declining?

Council and staff always consider how to accomplish our goals with existing staff first. When staff request additional staff positions, it is to ensure they can serve the community and Council at the appropriate levels. This year, staff are proposing new professional staff in response to Council’s work plan to implement our strategic goals and objectives. The work that the District needs to do is not directly related to the population. For details on staffing proposals, read this response staff provided to a community member. 

Why is there an additional 0.5% for an Asset Levy?

The municipality has more than $1 billion worth of built assets. Since 2015, staff have been maintaining an inventory of these, providing and continually refining estimates of how much, and when we need to invest in maintenance or replacement. Before that time, we had a deficit in the area of asset maintenance. If a budget only accounts for inflation, then you’ve only addressed the cost of living. You have not planned for maintenance and renewal of your assets. This is not unlike failing to set aside savings, so that when your car needs service or your roof starts to leak, you have no ability to finance the maintenance or repairs. Since we introduced the Asset Levy we have increased our investment in maintaining our assets and staff are working hard to tackle the problem of deferred maintenance

What is the new 1% Climate Levy?

In July 2019 Council passed a resolution declaring that climate change constitutes an emergency, and adapted our climate change goals to meet more aggressive targets to reduce our greenhouse gas emissions (GHGs). This new levy will fund projects that will move the District to a more energy-efficient and less resource-intensive future. When you are committed to ensuring your capital spending decisions are sustainable and support our target to reduce GHG emissions, there is often a higher up-front cost. An example is purchasing new energy-efficient windows for Municipal Hall. With this investment, we will significantly reduce the GHGs created by the building, but we will also reduce future heating costs.

West Vancouver has also completed a Natural Capital Inventory, the first of its kind in Canada. We now consider our natural assets in terms of the benefits provided by their eco-systems, and we need to assess their condition, monitor their performance, and perform maintenance and enhancement as needed. The one per cent levy will also support this work. One per cent would add $738,000 annually.

Find out more

The details are available in the proposed budget, at www.westvancouverITE.ca/budget. You can also attend an information meeting:

  • Wednesday, January 29, 6–8 p.m. West Vancouver Memorial Library, Welsh Hall West, 1950 Marine Drive

  • Thursday, January 30, 6:30–8:30 p.m. West Vancouver Community Centre, Cedar Room, 2121 Marine Drive

Staff will explain the budget and collect your feedback. You can also leave your feedback online at the link above, and staff will answer your questions and post the answers publicly. And of course, Council will review all feedback received.

Council and staff are always looking for ways to reduce costs, increase revenues, and operate the organization more efficiently. We take resident concerns and suggestions seriously, and we will do our utmost to keep property tax increases to a minimum.  

While West Vancouver doesn't have significant reserves or diverse funding sources, and costs continue to escalate, I feel confident in saying we are in good financial shape with a sustainable plan for the future.


Warm regards,
 
Mayor Mary-Ann Booth
 



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