Ramifications of recent city decisions now being felt on finances
An 18 per cent increase in transit ridership, a seven per cent jump in parking meter revenue and a 50 per cent drop in senior parking passes highlighted the city’s second quarter financial update.
City chief financial officer Colin McClure said Monday sales of city service revenue is ahead of last year due to a number of factors, including a seven per cent increase in parking meter revenue — around $25,000 — and a 14 per cent increase — $7,000 — in the garbage tag revenue over last year.
“It is important to note that only half of the projected seniors parking passes sold which has resulted in that balance being $25,000 lower than was budgeted,” said McClure.
About 280 passes have been sold, compared to 580 to 600 on average in previous years.
An additional Nelson Police Department (NPD) officer being seconded to the Integrated Road Safety Unit (IRSU) — and therefore funded by the RCMP — also improved the sales of services revenue.
Overall the city is on target to end the year in line with the budgeted operating revenues as well as expenses, said McClure.
Revenues and expenses are budgeted to occur evenly through the year, resulting in some favourable and unfavourable revenue variances due to timing differences, said McClure in his report.
“It is anticipated that these timing differences will be resolved prior to year end,” he said. “Taxes have been billed and collected as expected, however, there are still some provincial grants-in-lieu taxes outstanding that are normally received later in the fall.”
More people are riding the bus this year than last year as the West Kootenay Transit ridership has enjoyed an 18 per cent increase so far. As a result, transit revenues are higher than at the same time last year and higher than what was expected and budgeted this year by the city.
McClure noted that the ridership increase was due to the collaborative work of the West Kootenay Transit committee, the system integration, additional routes and an increase in frequency of trips.
Also powering up are Nelson Hydro sales, which are coming in higher than expected and budgeted as a result of the increased demand from customers this year. McClure noted that a colder winter and spring than what had experienced in the prior year was the likely culprit.
All other revenues “appear to be in line with budget expectations and consistent with prior years,” McClure said.
McClure noted that the bond investments of the city were hurt in June from capital losses resulting from the “volatility in bond rates and it had a significant negative effect on investment income” this year.
“It will be interesting to see what transpires in the markets and the ramifications on bonds as both Canada and U.S. plan to increase interest rates this year,” he said.
Conditional grants are significantly higher than last year at this time because the province provided over $1.8 million of their portion of the Hall Street phase two grant the city was successful in obtaining.
General government expenses have dropped, due to a $20,000 funding drop to Nelson and Area Economic Development and 2016 budgeted consulting expenses relating to the Railtown and the Downtown planning.
As well, protective services expenses are lower than budget as a result of a pending wage settlement with city firefighters. With no agreement in place — and an accumulated estimated wage increase for firefighters pending — firefighters are paid at the wage rates from the 2011 expired collective agreement.
“Another factor is that NPD has only in the last month been able to hire staff to be at their budgeted strength,” said McClure.
However, the icy fingers of winter are still being felt in the heat of summer as transportation services expenses are higher this year, up $200,000 from $1.7 million to $1.9 million.
“This is a direct result of the long, cold winter accompanied with very significant snow accumulation which required an immense amount of city and contracted resources to deal with road clearing, sanding and removal of the snow that obstructed city streets,” said McClure.
To offset the costs, the city directed one-time funding of $175,000 to the transportation budget for 2017 in acknowledgement of the challenges created from the snowy winter.
However, in other operational areas the city is saving money. Environmental health services is ahead of budget because of the educational effort the city undertook with residents as it related to informing and enforcing the changes in the waste management and wildlife attractant bylaw that were implemented early in the year.
Hydro expenses were higher this year and the main factor was the increase in power purchase costs, driven by colder weather and increased demand for electricity.
“However, these increased costs were partially offset by the historically early and long freshet generation this year,” said McClure.
On the capital project end of the city, several general capital projects and equipment purchases were underway, with upgrades to 610 Railway, an exterior assessment of Touchstones Nelson, electrical upgrades at the Civic Centre, a new loader, a hook truck, sweeper and a protective services radio system all in the planning or request-for-proposal stage.
The city was also successful in getting over $4.5 million in grant funding for Hall Street upgrade Phase II, with the final design nearing completion now that the city received federal approval to move ahead with the foreshore work.
“That contract has been awarded with the expectation work will commence in August,” said McClure. “With the size of this project and the traffic flow during construction staff have determined that the project will need to be split into two sections, with the first section to be completed in 2017 and the other in 2018.”
He said plumbing for the new public washroom and water fountain on Hall Street is nearing completion with the expectation of installation in the near future.
The emergency water source preliminary design work has been completed while the city looks at supply options for the treatment plant component of the project. McClure said the water licence application to use water from the lake in an emergency has been submitted and is under provincial review, while the city is working with the IHA on determining the best location of the intake in Kootenay Lake for emergency source.
“So the construction of intake and associated distribution piping has been put on hold until that can be determined which has delayed the project for this year,” said McClure. “Assuming a solution and approval from IHA is achieved it would appear that the city would tender this project in the Fall of 2017 with the work to be completed in 2018.”