2021 -2025 financial plan overview - metro vancouver - home
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2021 - 2025 Financial Plan OverviewCOUNCIL OF COUNCILS – OCTOBER 24, 2020Jerry W. DobrovolnyCOMMISSIONER/CHIEF ADMINISTRATIVE OFFICER
Dean RearGENERAL MANAGER, FINANCIAL SERVICES/ CHIEF FINANCIAL OFFICER
41858536
• Observing 2020 Budget Process o Strengthso Opportunities for Improvement
2
Reflecting Feedback
• Strong financial position• Process includes multiple layers
of scrutiny• Board Strategic Plan and 5 Year
Financial Plan• Provides foundation
3
Strengths
• Overall picture of the budget at the Committee level• Earlier direction from the Board• Greater input and transparency around decision making• Increased understanding of evolving municipal challenges
4
Opportunities for Improvement
Short-term Relief for HouseholdsLeverage supported tools to create a short-term action plan (1-3 years)
Maintain current goals and objectivesContinue work on strategic and long-range plans
Realize New OpportunitiesPartner on projects to increase affordable housing Reduce GHGs Help drive economic recovery
Board Direction from June Workshop
5
• Expanding affordable rental housing through strategic redevelopment and partnerships o 7-8 projects over 5 years (750-900 units)
• Waste-to-Energy District Energyo Up to 70,000 tonnes of GHG reductions per year
• Project delivery – maximizing local benefits
6
Realizing New Opportunities
7
Toolbox
Continuous Improvement
Capital Plan Deferrals
Demand Side Management
Reduce Pay-as-you-go
Increase Debt Amortization
Term
Asset Management Plans• Minimize asset failure risks
and impact to customers• Optimize lifecycle value• Meet asset performance
targets
Financial Management Policy• 15 Year Amortization Period• Pay-as-you-go to ensure
<40% debt servicing cost
• Opportunities for continuous improvemento Find efficiencieso Improve service
• Annacis Cogen Expansion: $1.5M savings in 2020 • Identified 2021 opportunities:
o Fraser Valley Gravel Pit Reclamation - $1.7M savingso Lulu Island Green Biomethane Sales Revenue - $860k in revenueo In-house Engineering and Design - $500k savingso COVID Claims Management on over 50 projects
8
Continuous Improvement
• Review of over 300 capital projectso Numerous adjustments to workplans and schedules
• Leveraging conservation efforts to defer growth-related infrastructure projects (demand side management)
9
Project Review
• Capital plan includes deferring key phases of the Coquitlam Water Supply project
• Unique opportunity to significantly increase water conservation efforts to achieve long-term per capita reductions
10
Project ReviewCapital Plan Deferrals
50% -Coquitlam
33% -Coquitlam
33% -Capilano
33% -Seymour
CURRENT FUTURE
25% -Capilano
25% -Seymour
Water budget household increase: 1.6%
Water Rates currently differentiated by a ratio of 1.25• Non-peak season: October 1 – May 31• Peak season: June 1 – September 30
Proposal: Apply all of the increase to the peak rate• Non-peak rate would remain the same as 2020, at
71.2¢ per 1,000 litres• Peak rate would go from 90¢ to 95¢
11
2021 Peak Season Water RateProposed Amendment
12
Capital Plan RequirementsInfrastructure Resilience
• Aging Infrastructure• Climate Change Adaptation
Clayton Langley Main Valve Chamber Refurbishment
Before
AfterCoquitlam Interceptor: corroded section of pipe Iona Wastewater Treatment Plant: Flood Protection
• Financial tools used to provide short-term relief:o Eased pay-as-you-go funding for next 3 yearso Maintained 15 year amortization period for debt issued
13
Financial Tools
14
Budget Adjustments
$967.5 M Prior Projection for 2021 Budget
$42 Increase for the average household in 2021(Water: $7, Liquid Waste: $26, Solid Waste: $3, MVRD: $6)
$602 Average annual costs for all Metro Vancouver services
$939.5 M Proposed 2021 Budget
$17 Increase for the average household in 2021(Water: $2, Liquid Waste: $8, Solid Waste: $0, MVRD: $7)
$577 Average annual costs for all Metro Vancouver services
15
Overall Household Impact 2021-2025
2020 2021 2022 2023 2024 2025
Water District $172 $174 $182 $191 $207 $226
Liquid Waste $264 $272 $297 $326 $361 $411
Solid Waste $61 $61 $63 $65 $67 $70
Regional District $63 $70 $73 $77 $81 $82
Total Household Impact $560 $577 $615 $659 $716 $789Recommendation (15 yr) % Change 3.2% 6.4% 7.3% 8.5% 10.4%
Alternative (30 yr) % Change 3.2% 4.2% 5.2% 8.8% 9.4%
Prior Year % Change 7.4% 9.0% 8.0% 6.7%
Prior Year Forecast $602 $655 $708 $755
16
Timeframe
2021 Budget Approval (Oct)
Strategic Plan Update (Feb 2021)
Board Budget Workshop (Spring
2021)
• 2022 Budget Cycle will continue to prioritize:o Continuous improvement to realize cost savings and efficiency
gains, including delivery mechanisms for capital projectso Exploring alternatives to building new infrastructure i.e. demand side
management strategieso Sound fiscal managemento Understanding of municipal challengeso Early direction from Boards and Committees
17
Financial Plan Overview
View of Vancouver
18
Drivers:• Increase in Operations averages 2.2% over 5 years• Debt servicing reflective of the capital program, but
favorable rates• Easing Contribution to Capital in 2021/22/23 - Refocusing
in 2024/25
M E T R O VA N C O U V E R O P E R AT I N G B U D G E TE X P E N D I T U R E S
Overview:• 2020 Operating Budget: $894.3M• 2021 Operating Budget: $939.5M (5.0%)• $28M less than previously projected for 2021
$-
$100
$200
$300
$400
$500
$600
$700
$800
$900
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
2020 2021 2022 2023 2024 2025
Mill
ions
Operations Contribution to Capital Debt Service Household Impact (Prior) Household Impact (Current)
19
M E T R O VA N C O U V E R O P E R AT I N G B U D G E TR E V E N U E
Overview:• Primary funding sources - water sales, sewer
levy, tipping fees, rents, MVRD requisition• Expecting relative stability for primary sources• Continued focus on alternate sources
Drivers:• Assumed Water DCC revenue received and applied
starting in 2023• Assumed partner funding for upcoming major capital
projects, reduces pressure on levies/rates• Return to the Financial Management Policy in 2024/25
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
2020 2021 2022 2023 2024 2025
Mill
ions
Water Sales Liquid Waste Services Levy Solid Waste Tipping Fees MVRD Requisitions Housing Rents Other Revenues
$1,414.7 $1,524.7
$1,321.5 $1,416.1
$1,585.3 $1,523.7
$-
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
2020 2021 2022 2023 2024 2025
Mill
ions
Housing Regional Parks Solid Waste Liquid Waste Water
20
Drivers:• Capital project in progress carried forward• Reviewed for deferrals and savings• Project risks and scope provisions
Overview:• 2020 Capital Budget: $1.41B• 2021 Capital Budget: $1.52B• Increase: $110.0M (7.8%)
M E T R O VA N C O U V E R C A P I TA L B U D G E T
19
21
LIQUID WASTE SERVICESGREATER VANCOUVER SEWERAGE & DRAINAGE DISTRICT
Lulu Island WWTP
2020 2021 2022 2023 2024 2025
22
$330.2
$274.2
$883.4
$264
$353.4
7.0%
$288.2
5.1%
$934.5
$272
3.1%
9.6%
$393.9
11.5%
$320.0
11.0%
$692.9
$297
9.0%
11.4%
$447.3
13.6%
$357.8
11.8%
$741.1
$326
9.8%
9.1%
$503.8
12.6%
$402.6
12.5%
$924.5
$361
10.6%
5.9%
$578.9
14.9%
$467.0
16.0%
$912.2
$411
14.0%
N/A
LIQUID WASTE SERVICES FINANCIAL PLAN SUMMARY
Total Expenditures ($ Millions)
% Change
Liquid Waste Levy ($ Millions)
% Change
Total Capital Expenditures ($ Millions)
Household Impact ($)
% Change
Prior Cycle Household Impact Change (%)
2020 2021 2022 2023 2024 2025
23
$99.2
$85.4
$89.5
$308
$104.6
5.5%
$90.1
5.4%
$65.2
$320
3.9%
6.8%
$113.5
8.5%
$99.8
10.8%
$91.2
$350
9.4%
6.4%
$120.9
6.6%
$106.9
7.1%
$120.7
$369
5.6%
5.2%
$131.1
8.4%
$119.6
11.9%
$218.1
$407
10.3%
3.1%
$145.6
11.1%
$134.4
12.3%
$330.5
$451
10.7%
N/A
LIQUID WASTE SERVICES FINANCIAL PLAN SUMMARY - VSA
Total Expenditures ($ Millions)
% Change
VSA Liquid Waste Levy ($ Millions)
% Change
Total Capital Expenditures ($ Millions)
Household Impact ($)
% Change
Prior Cycle Household Impact Change (%)
2020 2021 2022 2023 2024 2025
24
$28.6
$26.1
$347.3
$339
$31.4
9.7%
$28.6
9.8%
$404.4
$368
8.5%
10.8%
$37.1
18.1%
$34.3
19.7%
$115.0
$435
18.3%
16.8%
$44.8
20.8%
$41.3
20.6%
$147.3
$518
19.0%
11.6%
$52.2
16.6%
$49.0
18.6%
$44.5
$607
17.2%
12.8%
$60.2
15.2%
$57.3
17.0%
$9.0
$702
15.6%
N/A
LIQUID WASTE SERVICES FINANCIAL PLAN SUMMARY - NSSA
Total Expenditures ($ Millions)
% Change
NSSA Liquid Waste Levy ($ Millions)
% Change
Total Capital Expenditures ($ Millions)
Household Impact ($)
% Change
Prior Cycle Household Impact Change (%)
2020 2021 2022 2023 2024 2025
25
$27.4
$24.7
$37.7
$242
$28.9
5.4%
$25.6
3.8%
$55.7
$247
1.9%
11.6%
$32.0
10.8%
$28.7
12.2%
$45.9
$272
10.2%
12.6%
$36.5
14.3%
$32.6
13.4%
$6.9
$303
11.6%
9.4%
$39.4
7.7%
$35.5
8.9%
$7.9
$325
7.2%
6.6%
$44.3
12.5%
$40.4
13.8%
$11.3
$364
12.1%
N/A
LIQUID WASTE SERVICES FINANCIAL PLAN SUMMARY - LIWSA
Total Expenditures ($ Millions)
% Change
LIWSA Liquid Waste Levy ($ Millions)
% Change
Total Capital Expenditures ($ Millions)
Household Impact ($)
% Change
Prior Cycle Household Impact Change (%)
2020 2021 2022 2023 2024 2025
26
$172.8
$135.9
$408.9
$235
$186.2
7.8%
$141.7
4.3%
$409.2
$239
2.0%
11.2%
$209.1
12.3%
$155.0
9.4%
$440.8
$256
6.9%
13.0%
$242.8
16.1%
$174.8
12.8%
$465.8
$282
10.4%
11.0%
$278.8
14.9%
$196.3
12.3%
$653.4
$310
9.9%
5.9%
$326.5
17.1%
$232.6
18.5%
$560.8
$360
16.0%
N/A
LIQUID WASTE SERVICES FINANCIAL PLAN SUMMARY - FSA
Total Expenditures ($ Millions)
% Change
FSA Liquid Waste Levy ($ Millions)
% Change
Total Capital Expenditures ($ Millions)
Household Impact ($)
% Change
Prior Cycle Household Impact Change (%)
27
WATER SERVICESGREATER VANCOUVER WATER DISTRICT
Capilano Reservoir
2020 2021 2022 2023 2024 2025
28
$310.4
$0.7836
$397.5
$172
$318.6
2.6%
$0.8110
($0.021)
$431.3
$174
1.6%
4.2%
$334.9
5.1%
$0.8534
($0.052)
$462.6
$182
4.1%
7.7%
$356.3
6.4%
$0.9078
($0.087)
$469.5
$191
5.3%
8.8%
$389.6
9.3%
$0.9883
($0.107)
$499.7
$207
8.0%
9.2%
$431.5
10.7%
$1.0950
N/A
$497.6
$226
9.5%
N/A
WATER SERVICES FINANCIAL PLAN SUMMARY
Total Expenditures ($ Millions)
% Change
Blended Water Rate ($/m3)
Blended Water Rate Change From Prior Cycle ($/m3)
Total Capital Expenditures ($ Millions)
Household Impact ($)
% Change
Prior Cycle Household Impact Change (%)
29
SOLID WASTE SERVICESGREATER VANCOUVER SEWERAGE & DRAINAGE DISTRICT
2020 2021 2022 2023 2024 2025
30
$114.1
$105.8
$88.5
$61
$118.5
3.9%
$108.5
2.5%
$96.3
$61
0.0%
5.0%
$124.7
5.2%
$113.0
4.1%
$76.3
$63
2.8%
3.5%
$131.1
5.2%
$118.2
4.7%
$65.6
$65
3.5%
3.2%
$137.5
4.8%
$124.3
5.2%
$30.8
$67
4.0%
3.8%
$144.7
5.2%
$131.3
5.6%
$29.9
$70
4.2%
N/A
SOLID WASTE SERVICES FINANCIAL PLAN SUMMARY
Total Expenditures ($ Millions)
% Change
Tipping Fees ($ Millions)
% Change
Total Capital Expenditures ($ Millions)
Household Impact ($)
% Change
Prior Cycle Household Impact Change (%)
31
METRO VANCOUVER HOUSING CORPORATIONLynden Court
2020 2021 2022 2023 2024 2025
32
$52.3
$40.4
$25.3
$53.7
2.7%
$41.3
2.3%
$39.6
$54.7
1.8%
$41.8
1.2%
$61.3
$57.6
5.3%
$44.4
6.1%
$109.3
$58.4
1.5%
$44.8
0.9%
$96.1
$62.1
6.4%
$47.4
5.9%
$48.2
Total Expenditures ($ Millions)
% Change
Housing Rents
% Change
Total Capital Expenditures ($ Millions)
MVHC FINANCIAL PLAN SUMMARY
33
METRO VANCOUVER REGIONAL DISTRICTBurnaby, BC
34
REGIONAL DISTRICT FINANCIAL PLAN
$87.3 $95.3 $98.9
$104.7 $110.7 $113.7
$-
$10
$20
$30
$40
$50
$60
$70
$80
$90
$-
$20
$40
$60
$80
$100
$120
2020 2021 2022 2023 2024 2025
Milli
ons
2021 - 2025 Regional District Financial Plan
Regional Parks Air Quality Housing Planning and Policy Regional PlanningOther Household Impact (Current) Household Impact (Prior)
2020 2021 2022 2023 2024 2025
35
$87.3
$71.8
$63
$95.3
9.1%
$80.9
12.8%
$70
10.6%
8.8%
$98.9
3.8%
$86.4
6.7%
$73
4.9%
7.1%
$104.7
5.9%
$92.7
7.3%
$77
5.3%
5.9%
$110.7
5.8%
$98.7
6.5%
$81
4.7%
5.7%
$113.7
2.7%
$102.0
3.3%
$82
1.6%
N/A
REGIONAL DISTRICT FINANCIAL PLAN SUMMARY
Total Expenditures ($ Millions)
% Change
MVRD Requisitions ($ Millions)
% Change
Household Impact ($)
% Change
Prior Cycle Household Impact Change (%)
Total Capital Expenditures ($ Millions) $19.9 $23.1 $28.4 $30.7 $34.2 $35.8
Thank you
Pitt River Greenway
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