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ANALYSIS SUMMARY:
The Five Year Financial Plan Bylaw No. 3371, 2017 for the period 2017-2021 is being
presented for councils consideration. The plan includes the revenues and expenditures
planned for 20172021 that have been presented to both Council and the public. All
proposed expenditures, funding sources and transfers to or between funds must be
included in the plan. Both the operating budget and the capital budget information are
attached in Schedule A of the bylaw. The Five Year Financial Plan Bylaw No. 3371, 2017
is being presented for first three readings.
BACKGROUND:
The 2017-2021 Financial Plan process included Council and Staff having a variety of
internal, external and public meetings over the past six months to review current financial
performance, budgetary pressures and forecasted departmental budgets.
The Budget Open House was held at the new Nelson Chamber of Commerce board room
in Railtown on February 27, 2017 with an attendance of 32 Citizens plus another 13 in
Staff and Elected officials. The Open House was comprised of a meet and greet session
an hour before the 7pm formal interactive evening presentation of the draft financial plan,
ending with a question and answer period and more mingling with Council, Staff, and
attendees.
As in previous years any written submissions received at the Budget Open House, other
presentations or just from walk-ins at City Hall have been compiled and are included as
attachments to this document. Like 2016, there was only 1 comment sheet filled out this
year.
At the Budget Open House the proposed tax increase was 4.85% but there was also a
caveat at the meeting that the tax increase number was awaiting the outcome of City
negotiations with the RDCK Recreation Commission. The member of Council who sit on
the RDCK Rec Commission were working with our Area E & F partners on lowering the
Nelson and District Community Complex (NDCC) tax requisition as well as looking for
support to help fund capital upgrades at the Civic Centre Arena for 2017 from this
recreational partnership service. The Rec Commission was successful in decreasing the
tax requisition for the NDCC for 2017, however, no agreement was made on the Rec
Commission assisting in the funding of upgrades to the Civic Centre.
As Staff worked through the effect of the decrease in the tax requisition from the RDCK
and noted the now underfunding of necessary capital upgrades to the Civic it became
apparent that a plan to assist in the long-term funding of City buildings could be
undertaken this year with minimal effect to taxpayers. As can be seen from the attached
2017 Tax scenario options document presented to Council the overall tax increase
amounts to 2.25% from 2016 to an owner of an average single family dwelling from a
Municipal tax increase of 6.35%. The effect of the same Municipal tax increase on
commercial buildings actually results in a .5% decrease in overall taxes when compared to
2016.
After reviewing all the updated budget documentation at the April 19, 2017 budget meeting
Council increased the original 4.85% tax increase to 6.35%. This decision was not made
lightly and only came on the condition that the $120,000 (1.5%) in new tax income is to be
allocated to the building reserve fund to assist in the ongoing challenges of required
capital improvements and upgrades to City owned buildings.
The financial plan includes a 6.35% increase in property taxes for 2017 plus rate
increases for water, sewer and Nelson Hydro which have been previously approved by
Council. The attached 2017 Budget impact overview on average single family dwelling in
Nelson shows the effect of these changes.
Tax Rates:
There was a 7.65% increase in the residential assessment values for 2017, in addition, the
commercial assessments went up this year by 3.25% as compared to 2016. In keeping
with Councils objective to maintain the same tax rate ratios as previous years staff were
directed to prepare the 2017 2021 financial plan and 2017 Tax rate bylaw using the fixed
share approach (keeping the share of the tax levy collected from each property class
constant except where changes are due to non-market changes such as growth). The
result is the same 73% and 25.4% residential and commercial ratio of the total Municipal
tax burden. The required adjustment to the tax multiplier was different this year as
compared to the previous few years as this time the residential assessed values were
significantly higher than in the commercial sector.
COMMUNICATION:
The proposed financial plan was presented to the public at an open house held on
February 27, 2017. The 2017 budget presentation is also posted on the Citys website.
RECOMMENDATIONS:
The Council passes the following resolutions:
1. That the Financial Plan Bylaw No. 3371, 2017 be introduced and read a first time and
read a second time by title only.
2. That the Financial Plan Bylaw No. 3371, 2017 be read a third time.
___________________________ __________________________
CHIEF FINANCIAL OFFICER CITY MANAGER
THE CORPORATION OF THE CITY OF NELSON
AND WHEREAS the Council of the Corporation of the City of Nelson has
reviewed, prepared and solicited public input on the attached five-year financial plan;
1. Schedule A attached to and forming part of this bylaw is hereby adopted as the
Financial Plan for the City of Nelson for the five-year period starting January 1, 2017.
2. Schedule B attached to and forming part of this bylaw is hereby adopted as the
Revenue Policy Disclosure Requirement for the five-year period starting
January 1, 2017.
3. This bylaw may be cited as The Corporation of the City of Nelson Five Year Financial
Plan (2017-2021) Bylaw No. 3371, 2017.
_______
Mayor
_______
Corporate Officer
2017-2021 FIVE YEAR FINANCIAL PLAN
SCHEDULE A
Property Taxation: Operations & Debt 10,154,323 10,323,559 10,496,179 10,672,251 10,851,845
Add back:
Amortization 5,253,868 5,306,407 5,359,471 5,413,066 5,467,197
Capital Expenditures
General 8,692,742 4,426,250 4,403,100 4,137,600 5,787,100
Nelson Hydro 3,010,524 2,469,664 3,030,450 2,103,273 2,187,467
Water 3,635,000 1,810,500 2,174,436 5,942,765 5,520,404
Sewer 2,570,000 816,000 936,360 848,966 974,189
Total Capital Expenditures 17,908,266 9,522,414 10,544,346 13,032,604 14,469,160
CAPITAL FUNDS
Expenditures
General 8,692,742 4,426,250 4,403,100 4,137,600 5,787,100
Nelson Hydro 3,010,524 2,469,664 3,030,450 2,103,273 2,187,467
Water 3,635,000 1,810,500 2,174,436 5,942,765 5,520,404
Sewer 2,570,000 816,000 936,360 848,966 974,189
Total Expenditures 17,908,266 9,522,414 10,544,346 13,032,604 14,469,160
Schedule B - 2017-2021
Five Year Financial Plan
REVENUE POLICY:
The revenue policy will provide direction on how Council chooses to fund the
expenditures of the City, distribute property taxes among the property taxes, and use
permissive tax exemptions.
1. REVENUE SOURCES
a. Property Taxes
The existing proportionate share has been established through years
of public process and the City will strive to keep the proportions at a
similar ratio to past years.
The City will encourage the use of alternate revenue sources in
conjunction with property taxes.
b. Parcel Tax
Parcel taxes will be used whenever Council determines that they are
more appropriate than property taxes.
Residential
2016 2017 - Scenario 1 2017 - Scenario 2
4.85% $ % 6.35% $ %
Average home $ 328,738 $ 353,886 $ 353,886
Commercial
2016 2017 - Scenario 1 2017 - Scenario 2
4.85% $ % 6.35% $ %
Average building $ 1,000,000 $ 1,037,000 $ 1,037,000