Revenue from construction permits in the city is up in 2019 and is helping to drive what has been a profitable fiscal second quarter for Nelson’s municipal government.
The city’s “other revenue” in its budget is higher this year than in the prior year mainly due to the significant increase in building and development in the city, noted financial officer Colin McClure recently in his presentation to city council at its regular meeting.
Building and development in Nelson have had a corresponding impact on development and connection fees, which means the city has realized additional revenue, he said.
“Building permit revenue is $155,000 ahead of what was received by this time last year, while water and sewer connection fees are $355,000 ahead of 2018,” he said.
Although there are some favourable and unfavourable revenue “variances” due to timing differences, McClure was quick to point out that the city was on target to end the year in line with the budgeted operating revenues in all areas.
He noted several key budget areas in his presentation, with a brief update on some ongoing projects in the city:
Sale of services
Revenue is ahead of last year with $65,000 in additional revenue from city parkade sales above what was generated in the prior year from the rental of the parkade.
The city will also lose four Nelson Police Department (NPD) officers to the Integrated Road Safety Unit (IRSU) — up from three — eliciting a corresponding increase in funding from the RCMP to cover the costs.
Protective Services expenses are in line with budget but higher than the previous year, relating to two full time building inspectors being employed by the city and an additional firefighter to backfill the fire chief in his emergency director role.
The city has also decided to fund a full-time emergency management coordinator, a role that will be filled later in September.
An aging bus fleet is one of the prime reasons the city’s transit service is over budget and higher than in the previous year.
The aging fleet means an increase of maintenance on the vehicles.
“Staff have been working with BC Transit on this issue and working toward fleet optimization,” said McClure.
On the other side of the coin transit revenues are higher than at the same time last year and higher than what was budgeted this year.
McClure pointed to the collaborative work of the West Kootenay Transit committee and the setting of one fair price to travel the entire length of the system as having a positive result on both ridership and revenue.
In fact, the sale of bus pass revenue rose by 21 per cent higher when compared to the prior year, but there has been a corresponding drop in cash fares by 13 per cent.
The city-owned utility is ahead and in line on revenues and expenses, respectively, with a slightly cooler first quarter in 2018 driving electricity demands higher.
The annual rate increase also helped bump the bottom line of revenues for Nelson Hydro, noted McClure.
“When creating the budget for revenue Nelson Hydro uses a five year average of temperatures to forecast what the expected revenue will be,” he said in his report.
There will be some significant changes to the utility’s capital budget with an estimated $2 million in project costs related to replacing about 600 poles to accommodate Telus's Fiber Project. Telus will be funding approximately $1.4 million of this work.
“This significant project also provided an opportunity for the utility to replace some sections of small copper lines at the anticipated cost of $300,000,” said McClure.
Finally, $698,000 in projects out at the power plant have been deferred into 2020.
Water and sewer
Water operations are almost $60,000 higher than last year for the city due to the “investigation” of issues regarding the treatment plant and the chlorination system.
In addition, sewer utility operations are currently running ahead of last year (almost $90,000) with extra work being completed on city side of sewer connections to commercial and residential properties, staffing at the sewage treatment plant and the additional cost incurred for disposal of bio-solids as a result in a waste bylaw change by the regional district.
On the plus side of the ledge, engineering work for the piping of current secondary water sources to the Mountain Station Reservoir continued in 2019, with the expectation of construction to start in 2020.
The airport lift station, grit chamber and surge tank project has been completed.
“The city is seeing the positive results of this upgrade out at the sewage treatment plant, especially, with the surge tank doing its job during the number of heavy rain fall events that have occurred in the past couple of months,” McClure said.
Any announcement on an infrastructure upgrade on the sewage treatment plant is expected to occur in mid to late September, but the current contract for relining sewer pipes will begin and end this fall.
— Source: City of Nelson
Other notable budget items
- The Hydro lakeside submarine cable installation project has been completed.
- The expense portion for the city is running under budget, said McClure, since several budget increases in 2019 for items like the climate change coordinator, environmental consultant and additional communications had not incurred any expenses as of June 30. “With the recent hiring of the coordinator, the new agreement with Thought exchange and the city engaging an environmental firm to assist with the transfer station site it is anticipated that expenses will be in line with budget by the end of the year,” he said.
- A lower snow removal expense means Transportation services are in line with its budgeted amount, with resources being directed to sidewalk, storm sewer and pot hole repair work.
- Expenses such as public health and welfare services are higher than last year due to a “significant increase in the number of burials” as compared to prior year. “In addition, staff have spent additional time trouble shooting some challenges that have occurred with the irrigation system,” said McClure.
- A washroom should be in place at the Hall Street lakeside park by the end of October as work continues on the water front park.
- The replacement of the Gyro Park bridge has been completed.
- A lakeshore erosion mitigation plan is awaiting approval from the Ministry of Environment, explained McClure. “If approval is granted and communicated in the near future work will be able done during the lower lake levels this fall, otherwise it will have to wait until spring,” he said.
- The Cottonwood Falls Park project inches ahead with the stage scheduled to be installed in the park in late September. The washroom is in the request-for-proposals planning stage with the intent of posting it at the end of August.
- The city has bought several vehicles this year to flesh out its fleet, including a plow truck and flat deck truck purchased and already in use. In addition, the city has ordered a hybrid model for the new police SUV with expectations it will be in service in the next few months. City staff were able to find a grader that meets the city’s needs, with a front end loader and a tandem dump truck awarded. “The review and analysis for the new garbage truck continues with the expectation it will be ordered in 2019 but arrive in 2020,” said McClure.
- Replacement of the airport fuel pumps has been awarded with the plan to have a vendor install them in late September or early October after the busy flying season. The city received a $75,000 grant for this project.
— Source: City of Nelson