Province Refunds 2009 – 2012 Policing Costs
Council for the City of Duncan is pleased to announce that the Province of BC has refunded the $1,351,519 in policing costs paid by the City of Duncan from the period April 1, 2009 to March 31, 2012. This was a result of a change in government policy regarding which population data set to use to determine policing responsibility. As a result, Duncan was deemed not to be responsible for their policing costs during that period. As a result of the 2011 Canada Census, Duncan was confirmed as being under 5,000 population and therefore not responsible for policing services.
This amount is in addition to the ongoing operational savings from no longer being required to directly pay for policing costs as of April 1, 2012.
In early 2012 the City reverted to collecting the Police tax on behalf of the Province which provided over $400,000 in operational savings in 2012 and will provide approximately $700,000 in savings from 2013 to 2016.
During 2012 budget discussions City Council weighed several options on how to manage this opportunity while protecting the taxpayer from large tax increases in 2017 when the City will likely crossover the 5,000 threshold again.
Although options of 0% tax increases for 3-5 years were discussed, the drawbacks included less opportunity for reducing ongoing debt payments, and increases of up to 27% in 2017 or a repeated “phase in” of policing costs in three year increases of up to 11% per year.
Keeping increases close to inflation over the next 5 years was selected as the best course of action, as it should provide over $3 million in funds for necessary projects, thereby reducing interest costs, while preparing for the return of Policing costs in 2017.
The by-product of keeping tax increases close to inflation was the creation of the Police Bridging Capital (PBC) Levy – which results in $419,192 for this PBC fund in 2012, and an estimated $693,952 in 2013.
In addition to a few smaller items, the initial PBC funds collected were primarily allocated to Dike Infrastructure ($450,000) and costs for the Lee St. storm water intake and Marchmont St. pump station upgrade ($474,124).
This approach enables the City to avoid debt payments on capital projects such as dike and storm water infrastructure, resulting in direct annual interest cost savings estimated to be $35,856 for 20 years, avoiding total interest costs of $717,120.
The 2009-2013 Policing Cost Refund:
Council discussed that since the PBC funds and the refunded 2009-2012 Policing Costs were somewhat similar in nature, it made sense to reconsider the various options again.
With these additional funds added to the PBC funds, Council discussed that it was now in a position to make a direct impact on the budget. Council decided to add the refund to the PBC funds and put $1,400,000 in combined funds aside to pay down the City’s portion of the Cowichan Aquatic Centre debt. This frees up $119,540 in annual debt and interest payments. Council then used these savings in two ways:
- lessen the estimated tax increase to 2.3%, and
- increase overall capital replacement spending (particularly on roads).
PBC funds will also be used on the following projects over the next few years, avoiding associated debt payments:
- Seismically upgrade the Fire Hall – approximately $423,000 from PBC and $122,000 from other reserves. Total estimated project costs of $545,000.
- Upgrading the Canada Avenue/ Ingram Street intersection to increase pedestrian safety – approximately $350,000.
Council and staff encourage taxpayers to come out, get informed, and provide feedback on this opportunity and on all aspects of the 2013 – 2018 Financial Plan.
Opportunities for input are as follows:
- February 12th – Tuesday – 4:00 pm – Financial Plan Open House
- Find us on Facebook – “City of Duncan – Local Government”
- Send us an email at firstname.lastname@example.org
CONTACT: Mayor Phil Kent email@example.com 250-709-0186