A proposed 3.19 per cent general tax increase for the Town of Sidney this year is only the starting point in an update of the municipality’s five-year financial plan — more money might be needed to shore up the town’s utility reserve funds.
That tax hike would bring in an additional $304,550 to the town’s bottom line, according to director of corporate services, Andrew Hicik. He said more than half of that new money — more than $178,000 — is earmarked for increases in services provided by the town, higher costs of services provided to the town, as well as a few new local initiatives.
Hicik introduced the draft financial plan to council on Jan. 21, providing a look at the challenges ahead to balance the budget and keep service levels steady. More meetings are ahead in which council will lay out their priorities for the next five years — and their financial impact.
No changes are proposed for the town’s water and sewer operating funds — meaning no user fee increases over 2012. However, Hicik pointed out that a drop in water consumption last year saw $100,000 vanish from the budget.
That shortfall was covered by reserve funds and for 2013, revenue expectations have been adjusted accordingly.
Another loss was recorded in the sewer utility — again, around $100,000 — in 2012. That was offset, reported Hicik, by a reduction in debt payments to the capital Regional District in the neighbourhood of $280,000.
Hicik noted, however, that an ongoing policy of not increasing user fees has seen an inadequate funding of the utility reserve funds. That, he said, is against the town’s own policies to do so and must be discussed by council during the financial plan review. The reserve funds help offset financial losses throughout the year, as well as provide a buffer in case of a problem, like a broken water main.
Hicik reassured council the funds should be OK for the next year or two but a review should be done. That would include a look at the rate structure and tools available to better address the issue.
In a nutshell, Hicik said the town didn’t make as much money in 2012 as they had hoped. Surplus funds — some $200,000 this year — will help balance the books and keep the proposed tax rate increase at a reasonable level. With the change back to the provincial sales tax this year, he said the town will be paying an extra seven per cent for some materials.
‘It’s going to hit us, but we’re not sure how much,” he said.
He assured council there is enough money in the previous years’ surplus fund — as long as the town sticks with its policy to ensure they top it up.
Since 2009, Hicik said the town has not had an inflationary increase to its overall budget.
“Eventually, it does catch up to you,” he said. “It limits the amount of money available to the town, as the costs to the town continue to change.”
For example, the town’s contract with the RCMP is set to jump $60,000 this year, and by $117,000 overall come 2015. Within that budget item, there is a savings of $89,000 with a reduction in the ongoing RCMP detachment debt, as well as the savings from withdrawing from the regional crime unit. As well, the elimination of two RCMP positions at the airport means the District of North Saanich’s share in the policing costs drops to 44 per cent from 48. Plans for a 15th police officer on the rolls in 2014 will only add to the overall cost.
Town council will now take the draft financial plan and meet specifically to discuss the budget on Feb. 4 at a committee of the whole meeting and again on Feb. 19 and 20 (the latter date if required).
Highlights of the costs of Sidney service changes and additions being planned for 2013:
• Firefighter hiring plan — $39,000
• Fire department training — $20,000
• Fire department wage reimbursement — $4,000
• GIS budget increase — $15,000
• RCMP CrimeStoppers program — $4,500
• RCMP contract — $60,000
• Beacon Wharf study — $30,000