Monday, October 23, 2017

Growth, aging infrastructure, and federal regulations mean increased debt at regional district

Biannually, the Metro Vancouver Regional District holds a Council of Councils meeting. Except for Surrey and Vancouver, most municipalities have one or two council members that are appointed to the regional district board. These Council of Councils meetings facilitate all people who are elected to local government in our region to stay informed on what’s happening at the regional district, and address questions and concerns of people in attendance.

Council of Councils meeting held in North Vancouver on October 21. Select image to enlarge.

The latest Council of Councils meeting occurred last Saturday in North Vancouver. One of the major items on the agenda was Metro Vancouver’s 2018-22 Financial Plan.

Metro Vancouver’s big-ticket services provide safe drinking water and liquid waste management in our region. These services account for around 70% of the regional district’s budget. Metro Vancouver is also responsible for solid waste management (garbage and organics) which represents 13% of the budget. The regional district manages some revenue-neutral affordable housing. The remaining services provided by the regional district including parks, air quality management, and regional planning account for 7% of its budget.

Population growth, aging infrastructure, and federal water protection regulations mean that Metro Vancouver will be investing a significant amount of money in the next five years. Between 2008 and 2017, the regional district invested $1.9 billion into infrastructure. Between 2018 and 2022, that number will increase to $4.7 billion.

Some of the revenue will come from increased fees to developers (DCC) and user fees, but most of the funding for this infrastructure will come from borrowing. In fact, 68% or $3.2 billion will come from borrowing.

This means that debt servicing will balloon over the next few years. For example, debt servicing for liquid waste management will increase from $17.9 million this year to $157.7 million in 2022 due in part to the requirement to upgrade waste water treatment plants.

In addition to borrowing, the water and sewer fees on your property tax bill will be increasing around 4% to 6% each year over the next five years; I wonder if user fees are set to low in our region considering the debt that Metro Vancouver is taking on to renew our water and sewer infrastructure.

When it comes to solid waste management, expenditures will only be increasing at the rate of inflation. This is because Metro Vancouver programs to divert material from going into the garbage have been extremely successful.

Not much is said about water and sewer services in our region because they are largely hidden, even though there are significant investments required to keep water flowing and liquid waste treated.

More information on the 2018-22 Financial Plan can be found on Metro Vancouver’s website.

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