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2023 Lions Bay Budget Wrap-Up

Accelerated Process + Ministry Support = Result

The Village of Lions Bay's 2023 budget squeaked through after the final reading Friday night, with two yes votes and two abstentions, a result which echoed the voting of the first three readings on Thursday.

The tax rate will increase by six percent from last year, less than the ballpark number of seven percent that was first lobbed by Acting CAO Ron Miller and the Finance Committee, but considerably higher than the 4.5 percent that Councillor Michael Broughton had proposed.

Several residents expressed concern to The Watershed about both the feedback process and the accelerated timeline of the budgeting process this year. Resident Gail Craig wrote: "It seems possible that questions from many residents went unanswered when they used the incorrect email address provided April 28 in the Village Update. I used that incorrect email address May 2 and again on May 4. On May 5, I sent my letter again to the correct email address. After no response, I emailed my question to the mayor and council on the morning of May 9 and finally received a response back that afternoon.”

Craig added that many residents did not know about the Special Council meeting on May 9, as the agenda was posted late and was not included in the May 5 Village Update.

Only two residents ultimately were available to direct questions to Council during meetings. On Thursday night, Controller Joe Chirkoff reported that he'd received three emails requesting feedback from residents, and later during that meeting Norma Rodgers identified herself as one of the residents who had written. She asked if the budgeted amount of $56,972 (as listed on page 16 of the budget HERE) would complete the Bayview Bridge rehabilitation. Chirkoff noted that he had forwarded her question to the new Acting Public Works Manager Karl Buhr, as he didn't know the answer.

Rodgers then asked why bear issues, as noted in the Solid Waste Budget, could be considered a cost, since those issues are addressed by bylaw officers, who are budgeted elsewhere. This question led into a discussion of the costs of extending recycling options, which Councillor Abbott noted would be very minimal.

Rodgers' questions about the deterioration of village pipes and proposed capital requests went unanswered.

Other discussion reflected that property taxes are not always eligible to be put toward infrastructure costs, and concerns expressed by Abbott and Councillor Marcus Reuter regarding the unrealistic view of grant availability, complicated by the Village's need to compete against all the other municipalities.

On Thursday night, both Abbott and Reuter addressed the grant numbers listed in the budget. "The assumption appears to be that we are going to get 100 percent (grant) to cover our infrastructure projects," said Abbott.

This issue arose again in the public participation segment at Friday's meeting. Resident Tamara Leger (calling in from Montreal), directed her question at Ministry Consultant Randy Diehl, who was also present online. Leger noted that the budget allocates 100 percent of the costs of proposed infrastructure projects to grant money, which she suggested was an impossibility. In the absence of grant coverage, Leger wondered where Council would find the funds. "Are we being set up to have to borrow money to complete these infrastructure projects?"

In response, Miller said that in 2023, Council knows exactly what grants they will receive, but in future years they do not. So from 2024 onward, "there is a wish list of capital expenditures that can only be financed three ways: property taxes, debt or grants." He added that they have been advised to use grants as a placeholder.

After considerable back and forth, Diehl reminded both Council and Leger that municipalities, among all levels of government, are the only ones who are required to operate without a deficit. Therefore, municipal budgets are considered fluid documents, and are subject to amendment as required. He said that Council needs to make their best guess at matching anticipated revenues with capital projects. If grant money ultimately isn't available for a project, Council then needs to seek a change in financial strategy to make the project happen, or to defer it to another time.

Leger pointed out that the way the document is structured, it appears that if the grants don't come through as budgeted, the infrastructure costs will leave the village with a $5 million gap.

Diehl replied that it's not uncommon to budget for capital projects as a mixture of grant money and taxation, with a percentage allotted to each. Then if the grant is not available, Council can drop or defer the project, or finance it by borrowing from the Municipal Financial Authority (MFA). "Every decision about those capital projects has to go back to Council – they are not administrative decisions, they are Council decisions, and they have to be made in open meetings."

In response to Reuter's description of these figures as 'fantasy grants', Diehl noted that the grant numbers represent "our best effort to balance the books." He added that "the critical thing for tonight is to approve your tax bylaw and your financial plan. Once you do that, you'll know what your tax revenue stream will be."

Abbott put forward a resolution that Council meet for a strategic planning process early in June and subsequently update the budget prior to the summer recess. Diehl concurred and said that in addition to the submission of the budget and the tax rate to the Ministry before May 15, that Council will also need to submit their goals and objectives by the end of June. He noted that both these dates are hard deadlines.

"I'm trying to get you guys to do three things," Diehl said. "You need to get the taxation rate and financial plan bylaws approved today. The second thing is to approve a timeline so we can get together and talk about governance, and the best practices in British Columbia about how to manage the corporation, because Council is a public corporation. And number three is to do a strategic plan, apart from the workshop on governance, which sets out your goals and objectives collaboratively for next three and a half years of mandate." He added that he would ask for specific dates at the next Council meeting. "We need to make both these workshops happen as quickly as possible to get you on the road to good governance."

Both bylaws passed their first three readings on Thursday night, and were adopted on Friday, with Broughton and Berry voting for the bylaws, and Reuter and Abbott abstaining. Prior to the voting on Thursday evening, Abbott noted that he has voted against the budget in each of the last four years, because each year he felt the budget didn't meet a standard he was comfortable with. This year, he said, the pressure and speed of the process has meant he lacks confidence in the financial plan. Reuter concurred, saying he abstained as a means of protesting both the speed and his lack of confidence in the process.

Prior to the vote on Friday evening, both Abbott and Reuter reiterated this stance, citing their discomfort with the delayed and ultimately rushed process. Reuter noted the previous CFO and Works Manager had already done most of the work. "If this budget was a cake, they didn't just provide the ingredients, they mixed it together, put in a bowl and asked us to turn on the oven. We didn't do that in February or March, but just started doing it in the last couple of weeks."

The abstentions ultimately did not impede the passage of the bylaws, and so after the most intense budgeting process in recent history, the provincial deadline was met, and for better or for worse, Lions Bay has now both a financial plan and tax rate bylaw in place.

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Councillor Reuter, kudos, you could not have said it better, our departed CFO and PWM had already done most of the work on this budget prior to quitting. This CAO is not only grossly overpaid for his two days a week, but has done hardly anything to contribute to putting this together on time, and available for council and public to digest. Last minute meetings and confusion at the council table and having the public thinking we will have hundred percent government grants next year will never happen, just another “pipe dream” from this management team.

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