I will be the first to acknowledge the Capital Regional District’s 2020 provisional financial plan is complicated.
With 13 municipalities, three electoral areas and more than 200 different services governed by numerous committees and commissions, the twenty-four member CRD Board has a great deal to consider when it contemplates its annual budget to provide the services our residents receive.
The CRD preliminary budget was discussed and passed on Oct. 30. Much of the coverage has focused on the additional 6.2 per cent operating budget increase.
Unfortunately the typical 15 second sound byte does not really allow residents to understand how this number was determined. Therefore I would like to offer some expanded thoughts as to how this increase was determined by the board.
Inflation and the costs of providing the CRD’s core services is 2.8 per cent of the overall increase. This includes negotiated wage increases for our employees. For context, 2019 has also seen the following inflationary increases in the region: fuel and piped gas 10 per cent, food five per cent and accommodation three per cent.
The next significant budget driver is the Core Area Wastewater Treatment project. On the capital side 2020 sees another $5 million funding lift in order to pay for the construction costs of this project.
The Board previously determined that having a predictable, annual lift was preferable to waiting until the project was fully built and operating before raising the funds in one large increase to pay for it.
In 2020 we will finally begin treating our wastewater to a tertiary level. And in order to do so, we will need employees to run this 24-hour operation. The addition of employees to run the facility was referenced as a future cost in previous years.
I don’t think the region can underestimate the impact of the federally and provincially mandated Wastewater Treatment Project on those municipalities’ taxpayers who pay into it. Even though the federal and provincial governments are paying 60 per cent of the capital costs, the $300 million balance is the responsibility of core area residents.
The final 1.7 per cent increase is being requisitioned to support Board Strategic Priorities such as environmental protection, asset management, affordable housing initiatives and improved First Nations relations.
The largest item in this final grouping is $925,000 for a capital reserves fund for our Regional Parks. This issue generated the greatest amount of debate at the meeting largely because the Board decided to add this as new spending rather than pay for it by reducing the Land Acquisition levy from $20 to $15 as staff had recommended.
The Board decided to maintain the levy at $20 due to the importance of the land acquisition program but also agreed that additional funds were needed to take care of the properties the CRD purchased and owns. This new amount is representative of $5 per household in the region.
So how does the CRD pay for these services? Revenues for the CRD operating budget are generated by several means. 26 per cent comes from direct taxation of residents, 50 per cent comes from the sale of services (i.e. water, landfill, wastewater) and the remaining 24 per cent comes from grants, internal allocations and municipalities repaying their debt through the CRD.
There is some good news on the budget front. The provisional Hospital Board budget sees a diversification of revenue streams resulting in a requisition decrease of 4.2 per cent and the addition of 3100 new housing units and over $1 billion of new assessed value in the region will result in the tax burden being shared by these new properties.
Because each jurisdiction in the region chooses to participate in different services not each municipality will see the same increase. The calculations staff have to do for each jurisdiction are complicated and take time. So while it is accurate the CRD’s budget will go up six per cent, not everyone will see the same increase.
So what will six per cent look like to the average taxpayer in the region? The regional average increase to a property owner should be about 50 cents per week.
While the budget may be complicated, one thing is not: if we want to maintain the services we have, address emergent issues and fulfill the legal requirement to treat our sewage, we need to pay for it. If our region wishes to see no increase in taxes, we will need to make cuts to services residents tell us they value. As someone who leads the organization I can assure residents we operate an efficient and cost-conscious organization.
The Board when it passed its provisional budget consciously made a decision to continue providing services, honouring previous commitments and responding to emerging community needs. Your local leaders felt it struck the right balance.
Your feedback is welcome at crd.bc.ca/budget.
CRD Board Chair