Thursday, April 2, 2009

Money Makes The World Go Around

Money and budgets are a necessary evil in municipal circles and the Township of Langley is currently in a budget process. Without being political, I hope this information will be considered by our citizens in the Township of Langley and that they will provide feedback to mayor and council as I did yesterday.

I have attended all but one Finance Committee meeting, as well as the Council budget meetings that were held. Staff worked up numbers to show what various options would look like. The options were 1%, 3.95% and 5% tax increases. Obviously the higher the increase the more you can do. Some have argued that these are tough economic times and we need to be conservative.

I would agree with those who propose being conservative to a point, but I also recognize that the Township is not a commercial enterprise. The ToL cannot cut as a business does. We have made major investments in our community transportation assets like roads, bridges, transit corridors, etc. There are other non-transportation related assets, but I wanted to focus on transportation here.

In reviewing the budget documents and speaking with engineering staff I see 7 items that can be funded under transportation with a 1% tax increase. Basically some simple paving projects and that's about it with a budget of $15,563,953 for transportation, of which $4,896,031 goes to Salaries, Wages, Bendefits & Other. This would create a surplus of only $21,752 for any unexpected emergencies in 2009.

The challenges with a 1% icrease budget is that we will have serious shortfalls, unless we borrow money from reserves and increase our financial risks. 

1% Budget (shortfalls)

2009 = - $1,929,442

2010 = - $3,491,219

2011 = - $4,615,043

2012 = - $6,086,789

2013 = - $8,987,178

1% Transportation Utility (surpluses)

2009 =  $21,752

2010 =  $671,061

2011 =   $697,258

2012 =  $387,056

2013 =  $308,773

Also with the 1% increase, Water and Sewer Utilities Contribution to Capital would be depleted. All at a time where more and more residents want water and sewer lines in the ToL. 

3.95% Budget (surpluses)

2009 = - $224,195

2010 = - $1,008,805

2011 = - $2,437,527

2012 = - $3,738,746

2013 = - $3,846,914

A 3.95% increase would produce these surpluses for the Transportation Utility, thereby allowing us to fund more projects:

3.95% Transportation Utility (surpluses)

2009 =  $396,380

2010 =  $1,453,845

2011 =   $1,924,060

2012 =  $2,096,218

2013 =  $2,541,277

5% Budget Surplus/Shortfall

2009 - 2013 = - $0

5% Transportation Utility Surplus/Shortfall

2009 - 2010 =  $0

2011 =  - $1,197,605 (with $3,078,975 Contribution to Capital)

2012 =   - $2,613,832 (with $4,955,274 Contribution to Capital)

2013 =   - $3,398,213(with $5,500,000 Contribution to Capital)

Obviously the surpluses would be applied to fund more projects. An important transportation priority that I see on the list of potential projects is the replacement of the bridge at 232nd Street and 68th Avenue. I have been told by engineers that we may get as little as 12-18 months use of this bridge before major structural concerns will prevent trucks and larger vehicles from using this bridge. The price to design and construct a 232nd Street bridge is pegged at $1,500,000.

Also, the average person doesn't realize that the 200th Street Interchange vehicle capacity study assumed an overpass for 216th as well as a 4 lane 208th Street overpass, as part of the Major Roads Network (MRN). The cost to design and build a new 4 lane 208th Street overpass is pegged at $3,216,000. I have been told that the existing overpass allows for us to kick off the side plates and expand to 4 lanes, thereby saving us some cash.

I personally provided a feedback form to support a 5% increase, but I would also support a 3.95% increase. There is no way I would support anything less and put our community and transportation needs in jeopardy. 

The choice is yours based on the facts and figures. More details and info on providing input can be found at the ToL website here.

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