West Vancouver defers many capital projects as part of the 2020 budget

May 28, 2020

The financial impacts of the COVID pandemic will be seen throughout West Vancouver over the next year, as non-essential operations and programs are reduced. Many community improvements, known as capital projects, have also been cut.

Over the last several years, the District has been focusing on addressing deferred maintenance, building up an asset levy, and increasing the funding for of District’s asset maintenance. These efforts allowed us to partially offset the increasing costs of maintaining ageing capital assets and, where possible, achieve efficiencies by replacing older infrastructure with new, more efficient solutions. The table below illustrates the gradual increase in dedicated capital funding from 2015 to 2019.

 
Annual Budget Asset Levy Rate Increase Asset Levy Amount Added Available for Capital Investment Estimation of Required Optimal Investment Shortfall
2015     $7,400,000 $13,900,000 $6,500,000
2016 5.25% $3,000,000 $10,400,000 $13,900,000 $3,500,000
2017 2.45% $1,550,000 $11,950,000 $14,100,000 $2,150,000
2018 1.56% 1,050,000 $13,000,000 $14,500,000 $1,500,000
2019 2.16% $1,500,000 $14,500,000 $14,500,000  

View this table as a PDF

The initial version of the 2020 Budget (Budget 1- developed prior to the COVID-19 emergency) proposed to continue this focus on asset maintenance and included the allocation of $15M+ from the General Fund to the Capital Program. Analysis showed that this amount was very close to providing the optimal amount needed annually for asset investment, and the budget, therefore, proposed to tackle climate change issues with an additional green levy, and deferred maintenance with an additional deferred maintenance levy.

Then the COVID-19 emergency arose, and a complete revision of the proposed budget was required. In order to respond to the COVID-19 emergency, Budget 2 was developed, and in it, the green levy, and the amounts for deferred maintenance, were removed. In addition, support for capital projects had to be reduced to $8M. Budget 1 and Budget 2 information, including high-level infographics, is available at the 2020 Budget webpage:

2020 Budget (revised)

Because funding for capital was reduced by almost 50 per cent,  drastic changes in the Capital Program planned for 2020 were required, and many important and worthwhile projects had to be postponed.

Decisions on which projects to recommend for retention were made by the asset managers responsible for specific portfolios (e.g. roads, fleet, IT, etc.). These recommendations were based on the current condition of the assets; their risk status (e.g. critical, important, desirable) and the likely consequences of a proposed deferral/reduction. The prioritization had to take into account multiple factors, including safety considerations and regulatory requirements.

As a result, some projects with significant community support had to be postponed due to the lack of funds and the need to address other critical priorities.

All initiatives which were removed from the 2020 Capital Program will be re-considered in the 2021 budget process. In 2021, it is also likely that full capital funding of $15M will be available, so many more projects can be funded. Similar to the initial 2020 process (prior to the emergency adjustments), the 2021 budget plan will be submitted for review and feedback from the community through extensive budget consultations (either online or in-person, depending on the circumstances at the time). We look forward to working on the 2021 Capital Program and hope that the overall financial situation will improve and enable the delivery of the many important initiatives that have been postponed due to the current emergency.

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