City of Mission has ‘tough decisions’ ahead of next budget cycle, says CFO – Mission City Record



Faced with a long list of unfunded capital projects, revenue shortfalls and upcoming infrastructure projects needed to manage the development explosion in Mission, the city has “tough decisions” to make.

The council unanimously agreed to consider additional tax increases over the next five years on October 5, as well as to consider long-term debt as a solution to large projects that are pushed back year after year.

“At the end of the day, we have to start making tough decisions,” said Doug Stewart, CFO.

Staff reviewed a number of areas ahead of the next budget, which is expected to be discussed by the board next month.

They identified gaps regarding reserve spending for city assets, large projects with no start-up funds, and the need to increase developer fees needed for infrastructure growth.

The value of the city’s current fixed assets is depreciating at a rate of $ 4.6 million per year, but only $ 2.5 million per year is transferred to reserves for maintenance and replacement, according to the report.

Staff believe the savings should come from property taxes and utility revenues.

Steward likened it to buying a car for $ 40,000 and expects it to last 10 years. He said that each year $ 4,000 should be set aside to replace the vehicle.

For the city, this applies to all the assets it owns, including roads, buildings, infrastructure, equipment, etc.

The problem had been underestimated before because millions were supplemented each year by other sources such as gas tax subsidies and gambling revenues – which are no longer reliable.

Staff want the board to consider an additional 0.5% tax increase in the 2022 budget, and an additional 1% increase from 2023 to 2027.

Mayor Paul Horn said it was “somewhat worrying” that the maintenance of public property was left to the granting of funds.

“We’ve seen it with a carbon tax this year, how much that source can go away with the stroke of a pen, or how COVID has affected the game this year,” Horn said.

“Frankly, it might be an unpopular thing on the surface, but it’s the right thing to do. “

The staff review also compiled a list of projects they identified that did not have the funding to start.

Stewart said that with current levels of income and reserves, funding the Combined List is impossible without going into debt.

He joked that they “had a list of the years they weren’t going to do something.”

His goal is to eliminate that list this year and prepare a realistic, fully funded five-year plan.

“If we’re not going to do a project, let’s admit it and postpone it, cancel it or figure out how we’re going to pay for it,” he said. “It really is that important.”

The unfunded list over the next five years includes $ 5.1 million for a new Cedar Valley fire hall (originally listed in 2018), $ 27 million to expand and renovate the RCMP Mission building (2015), $ 3.2 million for a new search and rescue building (2019), earthquake-resistant upgrade and public works building expansion for $ 6 million (2007/2019) and $ 16 million for the replacement of the municipal hall (2019).

“Think of the Cedar Valley fire station… We made a plan, we know where we think we might want him to go; we actually don’t have anything in the budget on how we’re going to pay for it, ”Steward said.

While debt is often viewed as negative, Stewart said it shouldn’t be when it comes to the right assets, comparing it to when a person goes into debt to buy a home.

Staff have also been tasked with preparing changes to the regulations – Development Fee (DCC) and Community Equipment Contributions (CAC) – to ensure developers pay their fair share.

Over the next five years, Mission will need to spend an average of $ 12.9 million per year on new infrastructure needed for development, according to the report.

The city averaged just $ 3.51 million from CCDs from 2018 to 2020, Stewart said in an email.

Staff believe developers should pay for expanding the infrastructure needed to cope with the growth, according to the report.

Considerable infrastructure work will be required for development in Silverdale, Cedar Valley and the waterfront.


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