A "quick" review of the draft financial plan 2001-2005 submitted to FONVCA by Corrie Kost - March 4/2001

A "quick" review of the draft financial plan 2001-2005
submitted to FONVCA by Corrie Kost - March 4/2001

Note that the full Draft Financial Plan 2001-2005 is available at District Hall. Parts are on the web site at url http://www.dnv.org/council/agn-min/ca010214.htm Page numbers below refer to the Draft Financial Plan 2001-2005. Municipal Taxes are to increase 4.36% BUT the "real" amount is much higher!

PRINCIPLE USED TO DETERMINE THE REAL TAX INCREASE

Money taken from savings constitutes a "hidden" tax increase upon future budgets. It is tantamount to going into debt - sooner or later the difference will need to be made up. If you don't balance the books you are living beyond your means.
Yes REVENUES must equal EXPENDITURES but REVENUES by the District are made of two components: TAXES and use of our SAVINGS Our real TAXES are thus TAXES we pay now plus the loss of our savings. For reference we note on page B4 that
A 1% property tax is equivalent to a budget amount of $429,570 or about $18/home
  a) Transfer capital costs for drainage works from
     the tax levie to the sewer and drainage user fee
     adds another $545,000  
        [See "The real drainage fee program" below ]     1.26%

  b) Use of 2000 accumulated surplus(savings) $250,000   0.58%

  c) Use of accumulated water surplus - resulting in
     loss of saving of $1,008,824 (page B2)              2.35%

  d) Use of accumulated sewer surplus - resulting in
     loss of saving of $795,256  (page B2)               1.85%

  e) Use of Riverside reserves of $214,333 (page B2)     0.50%
     (slightly inconsistent with $187,333 on page B10)

  f) Use of Heritage funds which will not be repaid
     (ie. loss of savings in long term) 
     $2,877,500  (page B2)                               6.72%

  g) Loss of Interest payment from Northlands golf
     course to Heritage fund of $590,000 (page B10)      1.37%
     See note below on legality of this.

           Real amount now at                      ---> 18.99%


 Now add change in service levels or additional user fees:

 - A 11.1% decrease over 2000 in capital expenditures
   of watermain replacement (Page D20) - $350,000        0.82%
 - Secondary suite user fees -$250,000                   0.58%
 - Three can solid waste limit reduces to two cans
 - Green waste pickup every alternate week
 - Sportsfield user fees
 - Increased rec. fees

           Real amount now at least                ---> 20.39%  
                                                        ======

Note: There are improvements in services which have 
      resulted in benefits and/or savings that have
      not been quantified - eg. use of environmentally friendly
      liquid magnesium chloride instead of common road salt.

The bottom line :  We are still living way beyond our means 
                   and/or not managing our affairs properly.


Other inconsistencies/items of note:


Other problems with the financial plan:

1. Solid waste reduction from 3 cans to 2 will save $2.50 in 
   recycling and Solid waste charges - a very small amount.
   The cost to acquire even a single tag /year for going over limit
   would far exceed this extra cost. Since we are well below 
   the targeted 50% reduction in our waste stream, have a blue box,
   yellow bag, blue bag, and cardboard program this seems 
   punitive. The Schaefer (wheeled carts) are well suited for
   our needs as well as being easier on our sanitation engineers
   and should be encouraged. I suggest that in order to do so
   that as a compromise the limit be set at 2 cans or 1 Schaefer
   unit. No figures were given for the expected revenue to be 
   generated by the number of $2 tags/extra-can.
   

2. The 1999-2010 Sidewalk program, totaled $1.52million (Dec 1/98
   report from Bob West-Sells Doc # 144278v1
   There seems to be NO money this again year for sidewalks!

3. Lack of 2000 figures in many tables, making comparison hard.

4. No lane improvements - service drop ~$200,000  ie.       0.4%

5. Use of Heritage investment earnings to pay for maintenance
   (really part of operating budget) as outlined on page A1,
   column 2, paragraph 3 seems both inconsistent with current
   policy and the Local Government Act. This is how the District
   went bankrupt before - selling land to pay for operating.

6. Cancellation of interest charge to Northlands Golf Course
   (see page A1, column 2, paragraph 1) effectively constitutes 
   use of Heritage Funds for Operating - contrary to Local
   Government Act 

7. Apportionment of Police Costs between District/City
   Page 2-8 of report by CNV (available for City of North Vancouver)
                                      Crime Rate       Case Burden
     NVC Population 44,975              122              89
     NVD Population 85,995               68              64
     NVD Pro-rata gives share of        45%              58%
   The actual share paid by DNV is 62% .
   Note that property crimes in 1990 were 3908(city), 5002(district) while
                             in 1999 were 3247(city), 3575(district)
   It would appear that District is paying more than a fair share!

8. There is virtually any accounting for the state of the $26million
   referendum money. See line items 186-188 on E5 and 205 on E6 and E17.

9. Status of council reserve funds for 2001 is unknown.

10. Healthy Neighbourhood funds (line 74 of page B13).
    Increases request from $10,000/yr to $14,000/yr but no information
    was made available on money spent last year.

11. Why are we not seeing a benefit to the reduction in the Neighbourhood
    Zoning Program?

12. Concern over process over funding of Lynn Valley Library.
    The 1996 Referendum stated a replacement cost as $6million. 
    Five years later we are now being told that the real 
    cost may be $15million or more! We are also told that
    if truth be told when the Referendum was conducted in 1996
    the Referendum would in all likelyhood not have passed.

13. Subsidy of public/private ice rink facility.
    Icetime rates are the same for the higher quality private
    rink as they are for the public rink. That is, it seems that
    the rates for the lower quality public facilities were 
    raised in order to subsidize the rates for the private rink in 
    Seymour.

14. Overall the Financial Plan report is a sham. 
    Comparison to previous years are missing. Increases in 
    requested funding are not put into perspective by giving
    a % change.  

The real "drainage" fee program!

In my opinion, drainage fees cannot be justifiably be moved to the flat rate sewer utility fees. This is because the user has no control of the use of this resource. Sewage, water, elctricity, gas - these are all utilities whose use can be controlled by our residents. Drainage use cannot. So why are we billing "drainage" works to our sewer utility bill? Well, because it deduces our "municipal taxes" part of the ledger. This makes it appear that are taxes have only gone up 4.36% but the real motive could well be more sinister:
to set a precedence to move all future "drainage fees" works to our "sewer utility fee". This will ensure that those with expensive properties will not have to pay their fair share of the huge upcoming costs to mitigate the risk as outlined in the "Debris Flow Hazards" report of April 1999 by Kerr Wood Leidal Association to the District of North Vancouver. Many millions of $'s will need to be spent to address, with due diligence these flood risks. The policy of moving all drainage to a flat rate sewer bill will ensure that those who have the most to lose will be subsidized by those who can least afford it - ie. our poor. The equitable way is that those with more to loose (expensive properties) should bear a higher burden.

Legality of using interest payment destined for Heritage Fund

Via a bylaw change council declared a moratorium on repaying the principal for the five year period 2000-2004. The interest was also reduced to 5.0% so that interest payments would only amount to $590,000/year on a principal balance of $11,800,000. This was already down from the $711,400 set in 1998. Now it appears Northlands cannot meet this repayment and council has decided to take the $590,000 to meet its operational cost obligations. I deem this contrary to the Local Government Act which does not allow land sale funds (Heritage Fund) to be used to fund operations. Council could Unless council does one of the two above, they appear to be breaking the law.