Well, we finished day 2 of budget deliberations. Today we covered the Utility Fund General Operating and the Utility Fund Capital. There a few items we deferred from our last meeting that we revisited as well.
The entire utility fund was much simpler to get through. This fund includes sewer treatment, sewer and water. There will be an increase of $27 to the water and sewer rates for 2016. There are three main reasons why:
Discussions are ongoing with the city of Moncton about our water rates (we purchase our water from the city). Our contract expires in 2017 and the conversation is indicating that our fees for water will be increasing so in an effort to slowly increase the Riverview water and sewer rates to residents, rather than implementing a large sum all at once, we will slowly implement that raise in our rates. Our current contract already includes an annual 1.5% increase.
Trans Aqua funds – Federal regulations are requiring that the Trans Aqua sewerage treatment plant be upgraded to a secondary treatment facility by 2020. Their rates have been increasing by $5.00 for the past couple of years and will be doing so again this year. This project will cost in the neighbourhood of $90Mil to complete. They are looking into federal and provincial funding to assist so the municipalities don’t foot the entire bill.
A lot of our piping was laid in the early 70’s in Riverview and cast iron was used. This means a lot of the pipes are reaching the end of their life span and must be replaced. Our Director of Public Works reminded us we have a $41Mil backlog in utility infrastructure. We need to be able to address this issue and thus the rates needed to go up to accommodate this as well.
To break down the $27 increase: $15 is going to water, $7.00 is going to sewer and $5.00 to sewer treatment (Trans Aqua). That makes the new totals $825/year or $206.25/qtr or $2.26/day. Increases of $27/year or $6.75/qtr and $0.07/day.
By comparison, the current rates in Moncton and Dieppe, who are both also considering increases, are:
Moncton - $945 (average as there are metered)
Dieppe - $876
The new total for Riverview (including the $27 increase) will be $825, still making us the lowest in the tri-community.
In the utility operating fund, we are transferring $65,000 from our operating reserve in order to come in on budget. I spoke against this idea at first, citing my hesitancy on needing a reserve fud to come in on budget. I felt it was risky to be relying on a reserve fund simply because it isn’t a sustainable practice. However; the reason why was explained and it indeed does make sense. In an effort to pay down more of the town’s utility debt, a balloon payment of $1,040,400 is being made in the utility fund (balloon payment also being made in general fund). In an effort to accommodate this balloon payment, it was a one-time necessity to take the money from the reserve, which Council will have the option of replacing next year if the Council of the day so desires. Fortunately, this reserve fund (totaling $100,000) is never used so there isn’t a big impact to withdraw funds from it. It does mean that we cannot transfer any monies to the capital reserve fund in 2016, but I feel that’s fine given that it enables us to make such a large payment on our debt.
The utility capital fund includes the utility work that coincides with the local improvement projects from the general capital fund, fixing Beverly, Hawthorne, Woolridge, Cherry and includes some other projects like underground utility for the future Riverview West blvd.
Council also revisited a few items that we deferred from our previous budget deliberations. Those were Codiac Transpo, Street Patching and Christmas Decorations.
As you know, we have conducted resident surveys about the satisfaction with our transit routes. Route changes were proposed to Council that offered some great changes (and had a few kinks to be ironed out as well). Unfortunately given the budget constraints, we were still unable to find a way to incorporate these changes into the budget. Codiac Transpo is running some ridership programs to boost numbers, marketing campaigns and Council wants to work to iron out those few remaining kinks before implementing new routes to ensure the service is truly beneficial for all. Enhancing all of the routes will require a significant increase to the budget and we need to decide whether or not can we make that investment. Council unanimously agreed to not implement the new routes ($80,000).
In order for the department of Engineering and Works to come in on budget, the “street patching” line item was cut down to $268,000 (small works like fixing potholes, etc…). The projected actual for 2015 is $450,308. I had some serious reservations about having this line item cut back by $182,000. Now, $40K of the 2015 expense was for repairs to Coverdale Rd which shouldn’t be a reoccurring cost next year, but that item side, we still spent $410,000 on street patching.
My thoughts were that we should take funds from other proposed expenditures and reallocate them back into street patching as resident surveys tell us that streets are the most important investment for us. The Director said that his department could likely maintain the cut for one year but was not sustainable for longer than that. I was concerned that doing anything to negatively impact our street repair was not the right direction for us to be going in. I questioned whether or not it would mean that some potholes don’t get fixed and that may indeed be a possibility. I suggested three line items to be adjusted or eliminated which would add $81,000 back into the street patching line item. Those were:
$25,000 – Program Review – Study of Aquatics (eliminate)
$45,000 – Facilities Management review (defer)
$11,000 – Contract extension for HR staff of three months (eliminate)
Councillor Hayward suggested that, rather than us identifying specific line items, we just give staff general direction to go back and adjust the budget, putting funds back into the street patching line, which I also was ok with. Council made a consensus vote of 5-2 in favour of keeping those identified line items in and maintaining the reduced street patching line of $268,000.
We discussed the town’s investment in Christmas decorations for Coverdale rd. While we do have some decorations, we would like to continue to grow our stock. Our hope is that through our Parks and Rec department, they can continue to add, but if we are to seriously consider upgrading what we have, it will require a significant investment in the capital budgets of future years. Christmas decorations are expensive…
Council is still awaiting confirmation from the province on our unconditional grant and assessment numbers. If those decrease more than we projected, we may have to revisit the budget again, specifically looking at cutting some capital expenditures.
That’s it for this meeting. If you have any questions comments or concerns, please let me know. Thanks for toughing it out all the way to the end!