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 24-member board has a great deal to consider when it contemplates its annual budget to provide the services our residents receive.
The preliminary budget was discussed and passed on Oct. 30. Much of the coverage has focused on the 6.2 per cent operating budget increase.
Unfortunately, the typical 15-second sound bite does not really allow residents to understand how this number was determined. I would like to offer some expanded thoughts as to how this increase was determined.
Inflation and the costs of providing the CRD’s core services account for a 2.8 per cent 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 construction costs.
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.
The region cannot 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 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 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 operating budget are generated by several means. Twenty-six 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. 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 3,100 new housing units and more than $1 billion of new assessed value in the region will result in the tax burden being shared by these new properties.
Each jurisdiction in the region participates in different services, so increases will vary by municipality. It is accurate that the CRD’s budget will go up 6.2 per cent, not everyone will see the same increase.
So what will 6.2 per cent look like to the average taxpayer? The regional average increase 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 cut services residents tell us they value.
The CRD operates an efficient and cost-conscious organization. In passing the provisional budget, your local leaders felt they struck the right balance.
Your feedback is welcome at crd.bc.ca/budget.
Colin Plant is the chair of the Capital Regional District board.
