REGIONAL DISTRICT OF CENTRAL OKANAGAN GOVERNANCE … · Respect the wisdom, culture and traditional role of First Nations in the Region Ongoing. Co-Management Agreements in Regional

REGIONAL DISTRICT OF CENTRAL OKANAGANGOVERNANCE AND SERVICES COMMITTEE MEETING

AGENDA

Thursday, February 21, 20198:30 a.m.

Woodhaven Board Room1450 K.L.O. Road, Kelowna, BC

Pages

1. CALL TO ORDER

The Chair acknowledged that this meeting is being held on the traditional territory ofthe Syilx/Okanagan Peoples.

2. ADDITION OF LATE ITEMS

3. ADOPTION OF THE AGENDA

Recommended Motion:THAT the agenda be adopted.

4. CORPORATE SERVICES

4.1 CAO Year-End Review (Surplus/Deficit) 1 - 20

Recommended Motion:THAT the CAO Year-End Review report be received for information.

5. FINANCIAL SERVICES

5.1 Director of Financial Services to Provide an Overview of the 5-Year FinancialPlan (2019-2023)

5.1.1 Director of Financial Services Report - 2019 Budget and 5-YearPlans Presentation

21 - 23

5.1.2 Draft 1 - 2019-2023 Budget & Financial Plan - Summary HighlightsReview

24 - 38

5.2 Invitation for the Public to Comment on the 2019-2023 Financial Plan

5.3 Recommendation to Forward Budget to the March 14, 2019 Governance &Services Meeting

Recommended Motion:THAT the Governance & Services Committee receive for information the 2019-2023 Financial Plan documentation;

AND FURTHER THAT staff be directed to bring forward any recommendedamendments discussed today to the Governance & Services Committeebudget meeting scheduled for March 14, 2019.

6. NEW BUSINESS

7. ADJOURN

Governance & Services Committee MeetingFebruary 21, 2019

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• Primarily a fiscally conservative budget;

• Holding the line on residential tax increases,

• Most requisition increases in line with growth,

• Improving contributions to reserves

• Minor staffing adjustments in strategic areas; AND

• Positioning upcoming priority infrastructure investments.

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Strategic Priority 1 Strategic Initiatives: Progress to Date: Lead

% Complete

Provide Proactive and Responsive Governance

Focus on the 2016 budget process to ensure expenditure decisions are informed and

well consideredCompleted March 31, 2016. CFO & CAO 100.0%

Board review of Regional Hospital Board expenditures Completed December 12th, 2016 CFO & CAO 100.0%

Review existing grants in aid process - develop new grants in aid policyBoard consensus reached to reduce this program to only fund Community Gardens

until further notice (March 2017).DepCO 100.0%

Review governance of the Okanagan Film Commission Service Review Report presented September 19th, 2016 CAO 100.0%

Electoral Area Governance - Work to improve Electoral Area working relationships

within the RDCO

Work in progress - Most recently a services review in the North Westside area was

completed and Board supported consultants recommendations.

Board Chair &

CAO100.0%

Review governance options for operation of the Westside Wastewater Treatment PlantAdministration and Overhead Service Review by OPUS completed. Regional Board

overhead review completed in 2018.DirCS & CAO 98.0%

Explore contracts with member municipalities for operational services in new parks and

when existing contracts expire

Part of recommendations in 2014 Parks Service Review. Ongoing process as new

parks management plans come forward.DirRP & CAO 100.0%

Explore options that strengthen the role of First Nations on the Regional Board

Have spoken to Ministry of Aboriginal Relations & Reconcilliation. Added opening

statement to all Board Meetings that acknowkedge traditional territory of

Syilx/Okanagan Peoples. Completed C2C Forum and entered new MOU with WFN to

advance co-management agreements in Regional Parks. Installed WFN flag in Board

Room. Co-presented at the Southern Chiefs Conference in Winnipeg.

CAO 100.0%

Percent Complete: 99.8%

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Strategic Priority 2 Strategic Initiatives: Progress to Date: Lead% Complete

Ensure Asset, Service and Financial Sustainability

Continue five-year rotation of service reviews with a view of

improving efficiencies and effectivenessOngoing CAO 100.0%

Examine administration costs for potential savings with a view to

gaining efficiencies and reducing costsPart of regular 5 year review; scheduled for 2018 CFO & CAO 100.0%

Bring forward report evaluating long-term RDCO building viability

and potential alternatives

The RDCO office is fully occupied with 6 tenancy agreements to offset

administration costs and bolster capital & operational reserves for the

building (October 2017).

DepCO 100.0%

Focus energies on regional services e.g. parks, solid waste, economic

development

Underway - Facilities condition assessments complete. Asset

Management Plan currently being developed.CFO & CAO 75.0%

Review dog control services in West Electoral Area with a view to

improving service levelsCompleted January 2016 CAO 100.0%

Review Electoral Area building inspection service withdrawal request and

alternatives for service deliveryCompleted February 2016 CAO 100.0%


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Nurture Responsible Growth and Development

Continue to implement the Regional Growth Strategy

Underway. Have received Regional Context Statements from all 4

Municipalities. Commenced work on RGS Implementation Strategy.

Implementing Strategy ongoing.

DirCS &

PlanMgr100.0%

Advocate for Healthy Communities Projects Ongoing Board & CAO 100.0%

Develop a Transportation Master PlanReceived $600K Grant in January 2016. STPCO Group actioning a 3

year program starting in 2017.

CAO &

STPCO50.0%

Develop the electoral area planning process Completed June 2015 CAO 100.0%


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Protect and Promote Our Environment and Lifestyle

Find region-wide solutions to bio-solids challengePrimarily Provincial jurisdiction. Chair/CAO have met with Minister and

senior staff 3 times. Efforts ongoing.DirCS & CAO 50.0%

Review RDCO Air Quality Function and service delivery options Completed December 2016. CAO 100.0%

Develop opportunities for greater access to RDCO park lands

January 2016 adopted new focus on development of existing parks -

finalizing current acquisitions then put on hold until current debt is paid

down. Efforts ongoing.

DirRP 100.0%

Advocate for protection of water sources Ongoing primarily through OBWB. Board & CAO 100.0%

Advocate for protection of the lake against invasive mussels Significantly addressed January 2016. Efforts ongoing. Board & CAO 100.0%

Participate on the Okanagan Rail Corridor Inter-jurisdictional Acquisition

TeamCompleted July 2015. CAO 100.0%

Explore/advocate for Paratransit/handyDART service for Ellison - Central

Okanagan East Electoral Area service

BC Transit consultation process completed in 2018 with service

improvements planned for late 2019.CAO & CFO 100.0%

Advocate for improved cycling safety on Old Vernon Road - Central

Okanagan East Electoral AreaProvincial jurisdiction - efforts ongoing. Board & CAO 50.0%


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Champion Communications and Engagement

Raise awareness of what the RDCO does and what services it deliversEfforts ongoing. Attending local and municiapl open houses.

Improvements made to RDCO WEB site.CFO & CAO 100.0%

Identify initiatives that support the Truth and Reconcilliation Commission

recommendations

Report presented on March 26th, 2018. Invited WFN to display their flag

in the Woodhaven Board Room as a sign of our friendship and mutual

respect.

DirRP & CAO 100.0%

Respect the wisdom, culture and traditional role of First Nations in the

RegionOngoing. Co-Management Agreements in Regional Parks. Board & CAO 100.0%

Increase public engagement in RDCO activities and services e.g. budget,

celebrate successes (parks)Ongoing. CAO & CFO 100.0%

Conduct a citizen satisfaction survey Funding approved. Anticipate completion in 2019. CAO 10.0%


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Empower our EmployeesDevelop staff training plans for key areas including First Nations Cultural

Awareness

In 2018 Work plan. Initiated RDCO Staff Engagement Initiative in

October, 2018. Anticipate an updated staff training program coming

forward in 2019.

CFO & CAO 50.0%

Develop Corporate Succession Plans Corporate Succession Plan Report presented in November 2018. CFO & CAO 100.0%


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88 % Completion =

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• Primarily Status Quo Budget to 2018;

• No new services or changes in service delivery;

• The Operating Plan will be adjusted to align with the Board’s new strategic priorities when finalized.

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• Modest Capital Plan anticipated in 2019;

• Several Capital Planning Studies will be undertaken;

• Positioning for more significant investments in our infrastructure and asset renewal programs in 2020 to 2022.

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• Staff are recommending minor staffing changes (increase of 2.25 FTE’s overall in 2019) highlighted as follows:• To increase park hours of operation and extend seasonal staffing,

increase staffing levels (1.05 FTE);• To leverage IT infrastructure and improve network security, a new full

time software integration specialist (0.75 FTE);• In response to the opioid crisis and increased crime rates in the

region, increase operating hours (0.32 FTE) in the Victims Services using existing staff members.

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108

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112

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118

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122

124

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Corporate Wide

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• Met most 2018 financial and work-plan targets;

• Performed well with Regional Board Strategic Priorities;

• Making staffing adjustments in strategic areas to meet public, corporate, and Regional Board needs;

• AND, positioning the corporation for upcoming priority infrastructure investments and any programing changes the Board deems appropriate.

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THAT the Governance and Services Committee receive this report for information.

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TO: Governance and Services Committee FROM: Marilyn Rilkoff Director of Financial Services DATE: February 14, 2019 SUBJECT: Draft 1 – RDCO 2019 - 2023 Budget and Financial Plan – Summary Highlights ____________________________________________________________________________

Purpose: This Draft Financial Plan is provided to the Board for discussion, and to see the impacts of various proposals that have been made for 2019 and upcoming projects and unusual expenses in 2020 - 2023. The Board may then provide further direction to staff for the revision of the Plan for the 2nd Budget meeting on March 14, 2019.

Executive Summary:

General Services average home tax decreases and increases for 2019:

City of Kelowna Increase $0.51 0.285 %

Peachland Increase $0.04 0.010 %

Lake Country Decrease -($1.16) -(0.562)%

West Kelowna Increase $1.28 0.639 %

C.O. West Increase $30.20 4.934 %

C.O. East Increase $18.38 3.695 %

Local Service Areas are in addition to the above.

RECOMMENDATION:

THAT the Governance & Services Committee receive for information the 2019-2023 Financial Plan documentation; AND FURTHER THAT staff be directed to bring forward any recommended amendments discussed today to the Governance & Services Committee budget meeting scheduled for March 14, 2019.

Respectfully Submitted: Approved for Committee Consideration

Marilyn Rilkoff Brian Reardon, CAO Director of Financial Services

Governance & Services Committee

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Summary Highlights Report Page 2

Please read the Summary Memo in Tab 1 of your binder first. This report includes the highlights of some budgets that have the largest tax or rate impacts, and some other large items to be aware of, but please note that all budgets and capital items in Tab 8 should still be reviewed. Both the Budget Binder and this report are designed to allow the reader to obtain either a high level summary, or delve further into the detail should they have questions. It is not expected that the entire Budget Binder would be read. Tabs 6, 7 & 8 are key, and the other information is supportive in nature.

General Information: Increases to All Budgets:

Budgets are not automatically increased with cost of living percentages. All line items are reviewed each year and adjusted based on anticipated need for the year. Any one time expenditures (i.e. studies or projects) are removed or added.

Collective Agreement Increase to Payroll 1.5%.

Payroll Overhead: 1% for increases to benefit costs.

Increases for utilities and insurance. Summary of Budgeted Reserve or Capital Transfers: Continued work on Asset Management and Renewal is in the work plan for 2019. Five, Ten and Twenty Five Year Plans continue to be revised and developed for various cost centres to assist with planning and forecasting future capital needs and reducing or eliminating the need for financing. In 2019 the following total use and transfers are proposed in this budget. Reserve balances at the beginning of the year - $24.7m and Forecasted year end balances $23.4m are shown in Tab 15 by service.

2019 Transfers into Reserves

2019 Transfers From (use of reserves)

Capital $87,041 $87,041

Equipment Reserve $543,635 $2,193,872

CWF Reserve $680,850 $601,576

Facilities & Equip Reserve $4,274,818 $3,524,401

Landfill Closure Reserve $22,000 $63,062

Parkland Reserve $0 $1,255,378

DCC Reserves $670,000 $19,800

Operating Reserve $428,459 $490,033

Total $6,706,803 $8,235,163

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Administrative & Engineering Overhead Rates and Budgets – explained inTab 13: The following budgets are recovered via allocation to all other budgets.

2018 Rate 2019 Rate Difference

Engineering (may be added to Level 1 rate below for certain services (i.e. Sewer & Water)

3.4% 3.2% .2% Decrease

Administration Level 1 13.55% 13.55% No Change



Engineering Overhead (applied only to certain budgets in addition to Administrative Overhead): Rate decrease from 3.4% to 3.2% (0.2%). The overall maximum rate with both combined rates is now 16.75% vs. 16.95% in 2019. Explanations and detail provided in Tab 13.

004 – Engineering Page 1: Overhead recovery amount stays the same at $226k. Operating costs decreased by $24k for payroll due to Full Time Equivalent staff (FTE) reduction of .18. Operating reserve transfer increased from $27k to $128k due to surplus that is mostly due to water and sewer capital project overhead recovery. The operating reserve is needed to smooth this rate in future years when there will be fewer public works capital projects and less recovery. Capital $5k. Tab 13 Pages 12 & 13 shows overhead recovery calculations.

Administrative Overhead: (Rate level varies for services – only one of the administration rates will apply to a service). Tab 13 Pages 6 - 11. Recovery rates remain the same as 2018.

002 – Administration/Corporate Services Page 121: Increase to overhead recovery of $159k. Reduction of Basic Admin Grant from province of $60k. Operating budget change of $117.9k includes Operating expense increase of $84k, which includes FTE increase of 1.47 for reallocation of staff between 002- Corporate Services and 001 Board/Communications, and Staff from Solid Waste Management to Communications. While there are increases to payroll, there are decreases to contract services. Continuing to build reserves by increasing transfer to capital reserve by $18k and Operating reserve by $15k. Capital $313k – includes $254k for admin/reception reconfiguration.

003 – Finance Page 92: Overhead recovery amount stays the same. Net operations increase of $26k. Contract services and other payroll increases have been offset by FTE reductions. Purchasing Manager position contracted part way through 2018. Transfer of .4 FTE to 006 Information Services, plus 0.1 for relief staff. Total reduction to FTE’s 1.30. Capital $23k.

005 – Human Resources Page 123: Overhead recovery amount stays the same. Small overall increase to operating expenses $11k. Offset by $8k increase to surplus and $3k reduction in transfer of surplus into operating reserve.

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006 – Information Systems Page 125: Minor increase to Recovery amount of $2.9k. Overall budget increase of $29k consisting of net operating expenses increase of $64k due to .4 FTE reallocation from Finance and increase of .35FTE – ($83k) and Microsoft Licensing increase of ($50k). Various decreases for R&D, Contract Service, Software, & Equipment totaling $75k offset some of the increases. Transfer from Operating Reserve of $25k offset most of remaining costs. Decreased transfers to capital reserves $5k. Capital $104.5k.

Summary of Staffing -- Tab 10: The overall proposal is a net increase in Full Time Equivalents (FTE)’s of 2.254. (From 119.508 in 2018 to 121.762 in 2019). The primary cost centres affected with changes are:

0.606 Fire Services for Administrative Assistance, and Fire Manager is now full time.

0.320 Police Services increased hours for Victims Services staff

1.048 Parks Services increased hours for seasonal and part time employees

(1.30) Financial Services purchasing management is now a contracted service (-1.0 FTE), Transferring IT work from Finance to 006 – Information Services (-0.4), Maternity Leave Training (+0.1).

0.700 Administration Reallocating staff between Corporate Services and Board

Communications 0.20 FTE changes between various functions. Plus Manager Corporate Communications 0.5 FTE.

0.200 Electoral Area Services added administrative assistance, contingent on committee set up.

0.750 Information Services reallocation from Finance 0.40 plus .35 FTE increased hours

(0.070) Various functions, minor adjustments, reductions, and shifts of staff between cost centres.

Summary of Capital Projects: Capital projects and their funding sources are listed in the Capital Fund Budgets for each function. For summaries by function, of capital project totals, see Tab 6, pages 9, 11, and 13.

General Capital: $ 7,367,770 Water Capital: $ 1,413,748 Sewer Capital: $ 755,823 Total Capital $ 9,537,341

Major Capital over $150,000 are:

301 – Killiney Beach Water – Distribution System, Improvements, Equipment $939.6k funded by grant, reserves, and Community Works Funds Gas Tax money (CWF). Tab 8 – Page 11. Note - $3.5m for 2020 potentially coming.

307 – Westshore Water System – Reservoir, Disinfection and equipment $371.3k – funded by reserves. Tab 8 – Page 19. Note - $3.7m for 2020 potentially coming.

401– Westside Wastewater Treatment Plant - $690k. Equipment and Improvements funded by reserves. Tab 8 -- Page 23.

023 – North Westside Fire Department – Truck, Equipment, Hall Improvements $322.7k. Tab 8 – Page 51.

030 – Regional Rescue – Truck, Equipment, EOC Equipment $480k. Tab 8 – Page 59.

121 – Ellison Community Hall – Renovations & Stair Replacement $213k. Tab 8 – Page 78.

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142 – Regional Parks – Development, Land & Equipment $4.6 million, funded by reserves, grants, RSP Gas Tax funding, Disaster Funding Assistance/Insurance & donations. Tab 8, Page 84.

143 – Westside Parks – Improvements & Development $688.9k funded by reserves, Disaster Funding Assistance/Insurance and CWF. Tab 8, Page 88.

002 – Administration / Corporate Services – Building Improvements, vehicle and equipment $313.3k funded by reserves. Tab 8, Page 121.

Operating Reserves: In 2019, staff are proposing setting aside a total of $428,459 into individual operating reserves for some functions with 2018 surpluses, for future rate stabilization and contingency. The amounts and reasoning are in Schedule A. Recommended Use of Operating Reserves in 2019: Budgets in Tab 8 have been presented with the proposed use of $490,033 of Operating Reserves established in prior years. The benefit is to smooth rate increases between years by reducing impacts on requisitions and rates in 2019. The amounts utilized in the draft of the budget are listed below:

047 – Mosquito Control $8,000 Page 3

401 – Westside Wastewater Treatment Plant $100,000 Page 23

092 – Westside Transfer Station $43,047 Page 35

030 – Regional Rescue $40,000 Page 61

044 – Building Inspection $56,549 Page 64

110 – Regional Planning $32,992 Page 66

031 – 911 $35,000 Page 70

040 – Crime Stoppers $5,471 Page 72

041 – Victims Services $3,974 Page 74

142 – Regional Planning $100,000 Page 84

006 – Information Systems $25,000 Page 125

001 – Board & Communications $40,000 Page 155

Use of Community Works Gas Tax Funds (CWF): A list of CWF projects for the Electoral Areas is included in Tab 9.

Some projects have been approved in prior years and are carried over and reflected in the 2019 budget - $470,076. An approved amount of $25,000 has been deferred to a future year.

Staff has proposed some additional projects totaling $131,500 for usage of CWF for the Electoral Areas in the budget.

A staff report will be brought forward at the March 25th Board Meeting for approval of the use of these new funds. While the use of CWF has been shown in the budget, it has been specifically noted in the Budget Notes that these projects require further reporting and Board approval on March 25th of the use of those funds due to competing priorities and limited availability of funds.

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A report on historical use and approval of CWF by electoral area and service will also be provided for inclusion in Tab 9.

FYI Only – General Tax Information for any Reduction or Increase Decisions: For regional services, where all partners are involved, on an average $739,000 RDCO home, every $50,000 added or deleted, the change to the tax rate would be between $0.0007 to $0.0009, and $0.54 to $0.64 per home. For other services with different combinations of partners, specific calculations would be required.

Largest Tax Rate or Service Impacts Look at Tab 7, Pages 10 – 16 to see the requisition impacts in your area for general services, and which ones have the largest increase or decrease. The page numbers in Tab 8 are noted to the right so you can refer to those pages for further explanation of the increases or decreases. Explanations of the changes are explained in this section below. Summary of Total Requisition or Service Cost Increase / Decrease > $50k (Tabs 7 & 8):

Cost Centre Tax Requisition

(TR),or Service

Invoice (SI)

Amount of Increase

Tax Impact

per avg home

Tab 8 Page

401 – Westside Sewer - WWTP SI $174,268 n/a 23

470 – Westside Sewer – Collection Syst.

SI ($92,757) n/a 27

092 – SWM: Westside Transfer Stn SI $227,855 n/a 35

094 – SWM: Waste Reduction & Recycling

SI $197,690 n/a 39

024 – Wilson’s Landing TR $59,674 $138.34 53

030 – Regional Rescue TR $50,256 ($0.19) 59

142 – Regional Parks TR $317,617 $1.23 84

001 – Regional Board TR $72,824 $0.60 155

Summary of Services with Large Tax Impact > $5 per Average Home per Tab 7 page 17: Note: Only the Electoral Areas and their local service areas are affected.

Cost Centre Tax Impact per avg home

Tab 8 Page

Included in Electoral Area General Service Rate increases in Tab 7 Pages 7 & 8 (Tax Rates) and 14 & 15 (Requisitions):

019 – Electoral Area Fire Prevention $7.45 43

171 – Okanagan Regional Library $11.95 111

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SWM: Parcel Tax $8.93 35-42

143 – Westside Community Parks $5.20 88

Impact Tab 8 Pg

Electoral Area Local Service Areas (Tab 7, Page 9):

020 – Lakeshore Road Fire Protection $38.23 45

022 – Joe Rich Fire Department $47.74 49

023 – North Westside Fire Department $28.57 51

024 – Wilson’s Landing Fire Department $138.34 53

028 – June Springs Fire Protection ($22.81) 55

124 – Westside Municipal Recreation ($6.22) 105

085 – Ellison Transit $5.19 135

2019 Budget Changes Explanations (vs. 2018) (Tab 8): In most cases, if the tax impact has stayed relatively the same for a service, it will not be mentioned below. Engineering Services – Public Works: 047 – Mosquito Control Pages 3 -- 4: Increase to requisition $10.4k. Due to growth the average home will see a decrease of $2.33. Increase is caused by change in surplus carried forward and small contract cost increase. Using $8k of Operating reserve to reduce the impact. 058 -- Scotty Heights Street Lights Pages 5 -- 6: No change. Transfer $1k surplus to Operating Reserve. 091 – Effluent / Water Disposal Pages 7– 8.: No tax requisition. Transfer $50k to Capital Reserves and $36.7k to Operating for flexibility. 199 – Fleet Pool Capital Pages 9-10: Capital $117k – mobile shop vehicle. 301 – 310 Water Systems Pages 11 – 22: No impact to tax rates or service contracts. Funded by user fees only. Rates were increased in 2016 and are currently under review. Fund are being transferred to capital reserves. In some cases (for 303, 306, and 310), it is not possible to transfer at least the full asset maintenance fees to reserves. Capital Projects totals as below. Items of note:

301 – Killiney Beach Water System – 2019: $939k in Capital, 2020 $3.5m – financing would be required unless alternative solution is found.

303 – Falcon Ridge Water System -- $52 in Capital

305 – Sunset Ranch Water System – $26k in Capital

306 -- Trepanier Water System -- $2k in Capital

307 – Westshores Water System – 2019: $371k in Capital, 2020: $3.7m – financing would be required unless alternative solution is found.

310 – Fintry Shalal Water System – Capital $22.8k. 401 to 472 -- Wastewater Treatment Plant & Collector Systems Pages 23-32:

Budget has been taken to Stakeholder Committee Feb. 13th and it was recommended:

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o THAT the Westside Regional Wastewater Treatment Plant Stakeholder Select Committee receive the Westside Sewer System Draft 2019-2023 Financial Plan Report for information;

o AND THAT the Committee recommends funding reserves and capital at 40% of the recommended annual replacement amount.

o AND FURTHER THAT the Committee recommends the Westside Sewer System budgeted Draft 2019 – 2023 Financial Plans to the Board.

Change to 5 year rolling average for flow splitting (from 3 year average) to help reduce rate fluctuations.

Totals: CWK: $42k increase, Peachland $809 increase, WFN $39k increase.

401 Wastewater Treatment Plant Pages 23-24: Net change to recovery from partners - $174k increase. Much of this is offset by decreases from cc 470 – RDCO Lift Stations/Collector Systems.

Operating cost increase $137.5k primarily related to increases for biosolids removal $66k & management $34k, Centrifuge Maintenance $25k, Software and Licencing $40k, Water Rates $8k, decreases to Vehicle Operations $15k Electrical Maintenance & Repairs $11k, Odor Control $10k and various smaller increases and decreases in expenses.

Increase in funding the annual capital replacement amount or Capital Reserve Transfers from 35% to 40%. 2010 Report was updated by Urban Systems with revised asset information. Funding levels were actually at 37% of new recommendation and budget was prepared at the 40% level.

Engineering Overhead rate decreased from 3.4% to 3.2%.

Using $100k of Operating Reserves to reduce impact of reduced surplus carried forward (from $172k to $80k).

Capital Projects of $690k. 470 – RDCO Lift Stations/Collector Systems Pages 27-28: Net decrease to partners of $92.8k -- decreases to CWK - $79k and WFN $16k. Operating costs reduced by $43k due to removal of capacity study. $55k increase in surplus carried forward (study rolled into DCC project). Reduction to overhead. Increased reserve transfer by $13k to 40% level. Capital Projects $55k. 471 – WFN Lift Stations/Collector Systems Pages 29-30: Minor decrease $1.7k. Change to surplus carry forward offsets cost increases for operating. 472 - Peachland Lift Stations/Collector Systems Pages 31-32: Minor increase $2k for Peachland. Increase to surplus carry forward offsets cost increases for payroll for repairs and maintenance. Engineering Services -- Solid Waste Management: Note: SWM is one service and the following cost centres are separated out for cost tracking purposes for sub-programs.

092 – SWM: Westside Waste Disposal & Recycling Centre Pages 35 - 36: $227.8k increase to partners – Peachland ($25.7k), CWK ($127k), EA’s ($31k), WFN ($43.5k). Increases of $189k in operating: Hauling $70k, Drywall Recycling $55k (stockpiled inventory), Garbage Tipping Fees $23k, Payroll $20k, Vehicle Operations $11k, Yard

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Waste Tipping $9k, Collection fees $8k, and net misc. decreases $5.2k. Used $43k operating reserve for drywall recycling stockpile costs. Transfer $22k to Landfill for Closure Reserve (see below). Surplus carryforward reduction of $77k. 093 – SWM: Westside Landfill Closure Pages 37 – 38: Based on updated Landfill Closure Plan, it has been determined that closure reserves are likely too low. Adding $22k for transfer to reserves. The affected participants are being billed via cost centre 092 above and the amount is transferred into the landfill closure reserve. 094 – SWM: Waste Reduction & Recycling Program Pages 39 – 40: $197.7k increase in estimated cost to partners - Kelowna ($136.5k), Peachland ($5.8k), Lake Country ($13.8k), West Kelowna ($35k), EA’s (6.6k). Multi-Materials Management BC (MMBC) rebate reduction $94k due to reduction in household incentives, adding a contamination disincentive and lower fees. Decrease to budgeted revenue of $50k for Bulky Item Collection program. Increased operating costs $47k: Community Education Study $30k, Waste Composition Study $30k, Software & Licences $20k, Depot Contracts $15k, Payroll $6k, Recycling program $5k, less $50k for Bulky Item Collection Program, and education programs $10k. Note: partners are only invoiced for actual costs during the year. If projects are deferred, partners are not invoiced. 095 – SWM: Solid Waste Collection (Electoral Areas) Pages 41 – 42: Fees and surplus cover costs. Transfer part of surplus to operating reserve $10k to possibly continue to eliminate or reduce the need for future EA parcel tax for this portion of the SWM service. Multi-Materials Management BC (MMBC) rebate reduction $5k due to reduction in household incentives, adding a contamination disincentive and lower fees. Capital $12.6k.

Engineering Services – Fire Services: With Fire Services, it is possible that future out of area wildfire responses could enable additional transfers to reserves, as was the case in 2018 and some past years. 019 – Electoral Area Fire Prevention Pages 43 – 44: Tax requisition increase $24k, or $7.45 per average home. FTE increase of 0.1371 for Fire Services Manager (portion of full time salary) and additional support staff. Increases: Payroll $1k, Uniforms $1k, Vehicle Operations $2k. Start building reserves for future truck replacement $2k. In 2018 availability of $9.7k of operating reserve helped offset costs, as well as provincial emergency management funds. 2018 budget was amended to increase payroll and related costs. 020 – Lakeshore Road Fire Protection Pages 45-46: Tax requisition increase $2.2k – due increased contract costs. Impact on average home is $38.23 increase (only about 35 properties). 021 – Ellison Fire Department Pages 47 – 48: Requisition increase of $6.7k, however due to growth, the average home will see a $0.07 decrease. Transfer $9k to operating reserve to prepare for eventual loss of $45k in revenue from contract with City of Kelowna for Country Rhodes service area. They will take on service likely in 2020 themselves. Total capital reserve transfer is $100k. Continuing to build capital reserves for upcoming capital of $1.55m for apparatus to eliminate need for future financing. 2019 Capital Projects $89k.

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022 – Joe Rich Fire Department Pages 49 – 50: Tax requisition increase $23.4k. This has a significant tax impact per average home of $47.74. It is imperative to keep up with planned reserve transfers to reduce the need for debt for capital. 2019 Transfer is $100k. There are two firehalls that need to be staffed, equipped and maintained, and the assessment tax base is low. It is strongly recommended that reserves continue to be increased at the recommended levels. Trucks totaling $1.6 million are scheduled to be replaced between 2020 – 2029. As mentioned each year, even at these levels, it is forecast that further relatively gradual tax increases and financing will be required. Operating increases of $31k include Firefighter and support staff payroll, Vehicle Operations, Uniforms, and travel. Capital Projects $87k. 023 – North Westside Fire Rescue Department Pages 51 – 52: Tax requisition increase of $41k. There is an increase in cost per average house of $28.57. Operating increases of $32k include Firefighter and support staff payroll, Vehicle Operations, Uniforms, Safety Supplies, Snow Removal and other minor line items. Reserves are gradually increasing to fund $1.627m in truck replacements from 2025 – 2033 and eliminate financing. Capital Projects $323k. 024 – Wilson’s Landing Fire Department Pages 53 – 54: Requisition increase $ 60k. The impact to an average house is an increase of $138.34. In addition to Operating increases of $31k including Firefighter and support staff payroll, Vehicle Operations, Snow Removal, Building Repairs & Maintenance, there are also $16.8k in costs for expanding to Medical First Response Service. In future years, it is strongly recommended that reserve transfers are increased by $6.3k per year to fund $1.1m in truck replacements from 2032 – 2036 without financing. Reserve transfers have been reduced below planned levels between 2017 to 2019 – see budget notes due to tax increases each year. It is not recommended that transfer levels be reduced any further. Capital $58k. 028 – June Springs Fire Protection Pages 55-56: Requisition decrease of $654 results in decrease of $22.81 per average home because there are only 27 properties in this service. Transfer full surplus of $575 to Operating reserve. 029 -- Brent Road Fire Protection Pages 57-58: Requisition increase of $235 results in decrease of $4.02 per average home because there are only 67 properties in this service. Transfer full surplus of $1,109 to Operating reserve. 030 – Regional Rescue Pages 59 - 61: Requisition increase $50k. Increases: $75k for one time reviews ($35k for Radio Review, $20k Operating Guidelines, and $20k for Emergency Management Plan as recommended by CoK Fire Department managing staff), CoK Fire Dispatch contract increase $30k, Equipment $21.5k, Emergency Social Services $9k. Using $40k of Operating Reserve and $44k increased surplus carryforward to cover one time contract services costs. Due to assessment shifts, Kelowna pays the relatively larger share of the requisition increase at $39.8k. Capital $480k. Community Services - Inspections: 044 – Building Inspection and Other Bylaw Enforcement Pages 64-65: Tax Requisition increase $8.8k or $2.92 per home for EA’s for Bylaw Enforcement part of service. This cost centre is effectively 2 services in one. Building Inspection portion of budget is tracked separately and is currently self-sustaining with no tax requisition, however in 2019 it does require the use of $54.5k of BI Operating Reserves to offset costs. There is a large reduction in

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the surplus carry forward, which is normally used to offset the costs, or build operating reserves. Operating costs have decreased by $20k. For Bylaw Enforcement, operating costs have increased by $5k. The surplus carry forward has also been reduced, and $2k of operating reserves have been used to mitigate some of the tax impact. Community Services - Planning: 110 – Regional Planning Pages 66-67: Tax requisition increase $12.6k. Operating cost increase $333k primarily due to increase in Regional Growth Strategy (RGS) Projects. Utilizing $32.9k of operating reserve to reduce tax impact. UBCM Grant $150k offsets LIDAR project contract costs of $150k. National Disaster Mitigation Program (NDMP) Grant $270k offsets most of OK, Kal, Ellison Floodplain Mapping Project. 111 – Electoral Area Planning Pages 68-69: Retroactive 2018 requisition adjustment made to reflect impact of 1 additional vote for Kelowna. Net 2019 Requisition decrease $14k: Kelowna $6,983 increase, and decreases as follows: Peachland $85, Lake Country $382, West Kelowna $1,595, CO West $6,210, CO East $12,646. Transfer $10k of surplus to Operating Reserve to reduce tax impact for future upcoming projects. Operating costs came down $25.7k in 2019. Community Services - Policing: 031 – 911 Pages 70-71: Requisition increase of $20k for RDCO’s share of program. Contract costs have increased by $43k as planned and agreed by participants (8 other Regional Districts). Operating reserve and surplus are being returned to partners as agreed, and used to smooth tax rate increases over the life of the contract and cover $150k texting technology upgrade in 2020. Utilize $35k from operating reserve in 2019. 040 – Crime Stoppers Pages 72-73: Requisition increase $21.4k. The average home will see a $0.17 increase. Operating cost are up $20k due to RCMP Detachment Clerical/Rent and payroll. Using $5.5k Operating Reserve to reduce tax impact. 041 – Victims Services Pages 74-75: Tax requisition increase $33.8k. Operating expense increase of $27.5k due primarily to 0.32 FTE increase. The increase per average home average home will be $0.30 due to growth. Utilize $3.9k Operating reserve to reduce impact. 042 – Crime Prevention & Alarm Control Pages 76-77: Minimal requisition increase. Transfer a portion of 2017 surplus ($7.9k) to operating reserve. Parks Services: 121 – Ellison Heritage School Community Centre Pages 78-79: Minor requisition increase of $3.3k with tax impact of $1.36 per average home. Reduced reserve transfer for 2018 to fund $19k in building repairs and maintenance. Regularly planned reserve funding has resumed in 2019. Capital $213k, partly funded by $40k of previously approved Community Works Funds and an additional $72.5k if approved by the Board in 2019. 123 – Joe Rich Community Hall Pages 80-81: Requisition increase $1.8k. Increase of $4.02 per average home. Operating increase for legal for contract renegotiation. Increase in surplus ($2k) transferred to reserves. Reserves must continue to be built, and $6k transfer is minimal

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amount. Capital Projects $84k funded with $50k of previously approved Community Works Gas Tax Funds. Additional $32 k being requested for approval. 126 – Killiney Community Hall Pages 82-83: Effectively no increase. Revised contract shifts some capital costs to operating costs. 142 – Regional Parks Pages 84–87: Requisition increase $317.6k. An increase of $1.23 per average home. Primarily due to Operating increase of $274.8k: for staffing costs $127k, Planning $55k, Forest Health, $60k, Parks Maintenance $17.5k, Training $9k, and $5.5k net for various items. There is an additional $70k in grant revenue, and reductions in surplus carry forward from year to year of $48k (after use of $100k of Operating reserve) and increase to reserve contribution of $61k as follows:

In prior years Board approved that $.07 and $.02 per $1000 of assessment, were to be used to pay down land acquisition debt & the remainder was to be utilized for capital or transfers to capital facility reserves, rather than funding land acquisition specifically. The capital facilities reserve can still be used to purchase land. In 2017, by funding to a specific tax rate, the unintended consequence of the total funding of $.09 resulted in large increases per average house due to market and growth increases. Staff instead recommended a 1.5% increase to represent a reasonable amount for growth, in reserve/debt funding over the prior year’s total, and recommended that this approach also be taken in future years as well, and the Board agreed. Thus, the combination of debt and transfers to reserves in 1.5% or $61k higher than 2018. This maintains the reserve transfer levels originally anticipated in past financial plans.

Capital $4.6 million. Includes Flooding Disaster Recovery and Improvement Projects. 143 – Westside Parks Pages 88-89: $10.6k Requisition Increase. Increase to average home is $5.20. Operating Increase $8.5k for payroll and decrease for planning. Use of Community Works Funding of $280k previously approved and carried forward, requesting use of $12k more for capital projects. Capital projects $689k. Includes 2017 Flooding Disaster Recovery and Improvement Projects. 144 – Eastside Parks Pages 90-91: Minor Requisition increase $2.8k. Increase to average home is $0.72. Increasing base reserve transfer from $5k to $8k and also transferring $10k of surplus to reserves. Funds must continue to be built, and $8k annual transfer is minimal amount. Capital Projects $30k. Finance & Administration: 034 – Wilson’s Landing Boundary Extension – Shelter Cove: Pages 99--100: Debt is complete, but there has been a small deficit carried forward since the inception of the debt that relates to the original financing. A small parcel tax of $544 (vs. $9,166) will be levied in order to wrap this financing up. 1 parcel affected. 101 – OBWB Pages 103–104: Requisition increase $20k due to shift between participating regional district partners due to assessment value increases in RDCO. 171 – Okanagan Regional Library Pages 111–112: Requisition increase $33.2k. $9.4k of increase is due to ORL budget increase. $23.8k of increase is due to apportionment formula,

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which includes the use of BC Stats population numbers which staff feel is too high. An appeal has been filed with ORL. (Note: This is function is only for the EA’s. Municipalities contribute directly.) 188 – OK Regional Library Borrowing Pages 113—114: Refinanced in 2018 – Debt payments reduced by $101k. 189 -- Fiscal – Member Municipal Debt Financing Pages 115--116: Reduction to debt payments of $7.98m. Corporate Services: 007 – Electoral Areas Pages 127-128: No change to requisition. Transfer $4.95k to operating reserve. 008 – Central Okanagan West EA Pages129-130: Requisition decrease $3.3k, or $1.67 per average home. Operating costs reduced $5k for travel based on actuals. Transfer $2k to Operating Reserve. 009 – Central Okanagan East EA Pages 131-132: Requisition decrease $1.8k or $1.40 per average home. Reduction in primarily in payroll due to not having to pay both an EA Director and an alternate. Transfer $2k to Operating Reserves. 050 – Transportation Demand Management (STPCO) Pages 133-134: Requisition increase of $4k, or $1.23 per average home to make up deficit of $2k and increase 2019 amount based on 2018 actual charge. Electoral Areas only. 085 – Ellison Transit Pages 135-136: Service expansion in Fall 2019. Requisition increase $2.5k, or $5.19 per average home. Transfer $8.5k to Operating reserve to make rate increase more gradual as service comes on line for full year, and surplus carry forward is reduced. 102 – Air Quality Service Pages 137-138: Requisition increase $3.4k. Minimal effect due to growth. $.02 decrease per average home. 117 – SIR Pages 139-140: While there is absolutely no change in requisition, there is a shift to Kelowna of $4.9k from other areas due to property assessments (mostly due to growth). Corporate Services – Bylaw Services: 046 – Dog Control Pages 141-142: No change in total requisition. Transfer $23.5k of surplus to Operating Reserve. Operating increases of $49.8k primarily for payroll and bylaw software development. Capital $57k. 115 – Enforcement of Noxious Insect Control Bylaws Pages 149-150: No requisition change. Transfer $2k to Operating reserves. 116 – Noxious Weed Control Bylaw Enforcement Pages 151 – 152: No requisition change. Transfer part of surplus to Operating Reserve $7.5k.

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EDC: 120 – EDC Pages 153-154: Requisition increase of $44k. Due to growth, result for average home is an increase of $0.22. Operating increases include Special Projects $20k, Payroll $13.6k, Advertising & Promo $5k, Agricultural Field Service Program $4k. Board: 001 – Regional Board Pages 155 - 156: Requisition increase $72.8k. Impact on average house is $0.60. Increased operating costs of $100k includes Payroll for staff & Board $46k, Software and Licenses $15.8k, Contract Services $40k for Communications Audit and Strategic Planning, Communications $10.5k, and net miscellaneous reductions of 11.5k. Using $40k of Operating Reserve to reduce tax impact. CATCH Grant $5k currently included in budget. Capital $5.5k. 011 – Regional Grants in Aid Pages 157 - 158: Community Gardens is the only GIA included. The amounts are shown at 2018 contribution levels for participants. 012 – Grants – EA CO West Pages 159 – 160: Minor change, no increase. Proposed committed amounts $6,671: CWK School Liaison Officer $3,200, Wildsafe Program $371, NWCA $1,600, NWSC $1,500. Budget is $7,000. 013 – Grants – EA CO East Pages 161 – 162: Requisition decrease $1k due to surplus change.

Direction Required for next Meeting: Are there any changes requested? Outstanding Issues:

001 – Board – CATCH grant $5k included – confirm if contribution should continue in 2019.

011 – Confirm Regional Grants In Aid participation for Community Gardens.

Electoral Areas chose not to participate in Starling control in 2017 and 2018 via 012 & 013 – EA Grants in Aid. Is that still the case for 2019? Confirm budgeted GIA amounts are sufficient for each area.

Community Works Fund approvals for new projects Tab 9 report – March 25th.

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Schedule A RDCO 2019 Proposed Transfers to Operating Reserves for future rate mitigation $428,459 (See Tab 8):

004 – Engineering - $127,923 - For future administrative overhead rate stabilization. Page 4.

058 – Scotty Heights Street Lights - $945. Page 5.

091 – Septage Facility - $36,691– Page 7.

095 – Solid Waste Collection (EA’s) - $10,043 – Contribution for parcel tax in 2018 is nil. For future parcel tax stabilization as rates fluctuate. Page 41.

021 – Ellison Volunteer Fire Department - $9,000 – Transfer part of surplus to prepare for eventual loss of $45k in revenue from City of Kelowna for Country Rhodes fire protection, and to mitigate rate impact. Page 47.

028 – June Springs Fire Protection - $575. Page 55.

029 – Brent Road Fire - $1,009. Page 57.

043 – Business Licences - $3,338. Page 62.

111 – Electoral Area Planning - $10,000– For rate mitigation as project work fluctuates from year to year and there is the possibility of legal fees. Page 68.

123 – Joe Rich Community Hall - $1,000. Page 80.

003 – Finance - $135,272 – For future administrative overhead rate stabilization. Page 95.

027 – Ridgeview Fire (NWFR) - $73. Page 97.

051 – Lakeshore Road Improvements - $26 To help pay down/reduce parcel tax in final year. Page 101.

002 – Administration - $30,000 – For future administrative overhead rate stabilization or building capital. Page 121.

005 – HR - $11,910 - For future administrative overhead rate stabilization or capital. Page 123.

007 – Electoral Areas - $4,950. Page 127.

008 – Electoral Area Westside - $2,000. Page 129.

009 – Electoral Area East -- $2,000. Page 131.

085 – Ellison Transit - $8,497 – Set aside funds for rate transition for possible service expansion. Page 135.

046 – Dog Control -- $23,520. For rate mitigation, legal, and possible future dog pound replacement. Page 141.

106 – Untidy Premises - $346. Page 147.

115 – Insect Control $2,000. Page 149.

116 – Weed Control $7,341. Page 151.

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Documents

REGIONAL DISTRICT OF CENTRAL OKANAGAN GOVERNANCE … · Respect the wisdom, culture and traditional role of First Nations in the Region Ongoing. Co-Management Agreements in Regional