Port Moody has $18.5 million for capital projects earmarked in 2023, though many of its reserves are facing significant financial deficits.
Council got its first look at a draft of the five-year financial plan on Tuesday. The plan has 350 proposed projects at a total cost of $69 million. Staff are aiming to get approval by Dec. 6.
The city plan’s spends less and less every year as its reserves replenish. Only $10 million will be spent on capital projects by 2027, while 33 percent more is being put into the city’s asset reserves.
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Spending on utility and infrastructure projects are the “really heavy” items on the list for 2023, said Tyson Ganske, manager of financial planning.
“Asset renewal and infrastructure replacement, you can see, are a major driving force relative to some of the other departments within the city,” Ganske said.
The top eight most expensive projects all relate to maintenance or renovations of roads, water, drainage and sewage systems, and account for 52 percent of total capital spending in 2023.
For instance, the Ioco Road Corridor Reconstruction project is receiving $3.5 million next year and $1.8 million in 2024. Total costs are expected to top $12 million, and work is scheduled to take place over several phases over the next decade.
The road, sewage, drainage and watermain are all set to be replaced, and upgrades to the road are being considered for safety, and pedestrian and cycling traffic use.
The utilities department is set to receive 45 percent ($8.3 million) of the city’s total capital budget; engineering and operations is set to receive 25 percent ($4.6 million); and community services, which includes facilities and parks, is set to receive 24 percent ($4.4 million).
The city’s total reserves are balanced over the five-year plan, but many are starting the year in a deficit.
The city’s asset reserves, used to fund and replace city properties as they deteriorate (excluding utilities), are in the worst shape. Five of the city’s six asset reserves are starting 2023 in the red.
Annual funding to these reserves are proposed to increase by $485,000 in 2023 to $4.8 million, and increase to $7 million by 2027.
Ganske noted that reserve usage is cyclical and follows a lifecycle replacement schedule.
“Some years, we’ll have more spending, while other years have less projects just depending on where we are in that cycle,” he said.
The plan has them balancing out by 2026, though two reserves – the facilities maintenance and parks asset reserves – will remain overdrawn by 2027. At the start of 2023, they’ll have a $560,000 and $840,000 deficit, respectively. Their combined deficit will grow to over $4.2 million by the start of 2025, before falling to $1.7 million by the end of 2027.
“Facility maintenance is definitely an area where we have had some challenges,” Ganske said. “They do have a significant opening balance deficit, and some larger projects over the next five years.”
One of those larger projects includes Westhill Centre, earmarked for $1.5 million in upgrades to its facilities by the end of 2027.
Other reserves suffering from significant deficits at the start of 2023 include the new initiatives reserve, sewer capital reserve, and water capital reserve, though they balance out by the end of 2027.
The city is closing out a tough year for its revenue streams, mainly due to the lingering effects of the COVID-19 pandemic, according to its 2022 projections.
The staff report described it as a “significant revenue shortfall.”
The city is forecasting a $126,740 surplus on its $45.5 million budget, with six of its 10 departments underperforming.
Community Services experienced the largest decline with a shortfall of $448,366. General Manager Anna Mathewson said other cities are seeing significant revenue declines to their recreational programs as well.
She said enrolment is lower than pre-COVID, even in programs where there are no longer limits on class sizes.
“We’re definitely in a new phase, a new normal, and there’s still a number of unknowns,” Mathewson said. “We’re just not seeing the numbers coming back.”
She added that staff were looking into reviewing their fees, tweaking the programs and trying a marketing push.
The city’s advertising revenue from its new digital billboard and transit shelters is also $209,000 below projections.
Revenue shortfalls were partially offset by nearly $572,000 from job vacancies and hiring delays, according to the staff report.