Look for a lean village operation under a trim five-year financial plan that got the go-ahead in a special meeting on May 12.
New construction and a careful paring of the budget kept the average Nakusp village property tax increase around .75 per cent for the coming year, according to figures accompanying a new 2011-2015 five-year financial plan bylaw (number 635, 2011) that saw the tax increase shaved from the expected 1 percent. City staffers in all departments went to work to keep costs down in weeks prior to the budget’s adoption.
“The net tax base of residential properties has increased,” city administrative officer Linda Tynan said. That increase was estimated at 6 per cent.
While the plan estimates general municipal property tax revenues will remain fairly constant in the $852,224 to $840,013 range over five years, other revenues are estimated to vary widely. Government grants, for example, are expected to be reduced from over $2 million this year to $417,000 within two years, and to $342,000 by 2014 and 2015.
The drop in government grants accounts for the lion’s share of a reduction in funding sources from $7.2 million in 2011 to $4.4 million in 2015, according to figures presented with the bylaw.
Accordingly, capital works are trimmed in the five-year plan, from $2.45 million in 2011 to $303,500 by 2015, with total village expenditures expected to dip from $7.2 million in 2011 to $4.4 million by 2015.
A table accompanying the bylaw showed revenues according to sources.
Grants made up almost 30 per cent of village revenues in 2011. These include the Small Communities grant (Strategic Community Investment Fund) and other conditional grants allocated to specific projects.
User fees and charges form the second largest portion of Village revenue.
Among property taxes, 72 per cent collected were residential property taxes; 26 per cent were business property taxes; 1.5 per cent were light industrial property taxes, and .5 per cent were “other.”
“The revenues and expenditures summarized in the 20011-2015 financial plan bylaw have been set with the objective of maintaining a fair, equitable and stable level of tax collection that will allow the municipality to continue to provide a high level of quality services to the taxpayer,” Tynan’s report read.
Key projects accounted for in the approved budget include a borrowing for $108,000 for the Emergency Services Building.
The cost of the construction of the ESB was $2,405,433, much of which was covered by grant funding. The Village contributed the land, valued at $350,000.
The 2011 budget included $10,0000 for the arena slab and $10,000 to rebuild a capital reserve account.
Because of user and service fees, the village’s water and sewer accounts are self-balancing and have no impact on the village’s operating budget.
The budget also called for a borrowing in the form of a municipal debenture.
The debenture of $710,000 funds $698,476 for Nakusp Hot Springs infrastructure in the form of work previously financed in 2006 in order to re-open the hot springs, paid for through the village’s reserve accounts, not including the Municipal Finance Authority fee.
During financial plan discussions, council reviewed the Hot Springs
Infrastructure and discussed the impact that the internal borrowing has had on the Village — specifically on the depletion of capital reserves.
The amount borrowed internally was at least $610,000.
“Council agreed to repay this debt over a 20-year term with 3 percent interest. Interest was credited to the reserve funds in 2007 but has not been tracked or recorded in subsequent years,” said Tynan.
“The Village of Nakusp contributed an additional $34,000 to these renovations through its general operating funds in 2007 and the hot springs had additional operating losses in 20006 ($114,208) and 2007 ($64,400),” Tynan’s report said.
“By formalizing this borrowing, the actual cost of borrowing will be more transparent to council and the community and it will be more practical to allocate the debt servicing costs against the department (hot springs) that it relates to and ensure that the interest charges are being paid,” she said.
That amount still leaves the village as one of the more modestly indebted communities of its size in the province, according to figures from Tynan.
Prior to the borrowing, the Village of Nakusp had $377,000 in total borrowing, with a credit limit of about $8 million available.