Nelson’s city council just wrapped up the first phase of their 2011 budget process, a phase that saw city staff explain their accomplishments for 2010, their goals for 2011 and what they need, financially, from council to get it done in the coming year.

I live blogged about those meetings, sitting in on all three days. I was alone most times, though one member of the public did sit in on discussions around the water system. (Keep an eye out for a short opinion piece on covering this process.)

This post is the summary of those meetings and there will be links to the source material for the reader that wants to know more. It’s worth looking at the discussions because the majority of the city’s departments are looking at increasing costs that can’t be avoided. Unless the city can make cuts somewhere, find grants to pay for some projects or  increase their revenue, they’re going to have to turn to the taxpayer to cover costs.

There’s a rough calculation councillors brought up several times over the three days:

Every $65,000 increase in costs requires a one per cent tax increase.

The numbers below are only the requests from various departments and proposed plans. No final decisions have been made yet.

This is a lengthy report on the city’s budget, but the discussions and issues brought up here have a direct impact on the city’s taxes.

The upcoming budget schedule

On Monday, Jan. 24, 3:30 p.m. council meets to discuss the utility rates (water, sewer and hydro). Council will give the first three readings to the new rates, whatever the end up being, and the final adoption vote will happen at a later meeting.

On Monday, Jan. 31, 9 a.m. to 3 p.m. council will hold a public meeting to discuss the capital project requests. These capital projects are the major projects, purchases and repairs the city could make. This covers everything from vehicles, equipment and buildings.

On Tuesday, Feb. 1, 9 a.m. to 3 p.m. council will hold another public meeting where they’ll consider the capital projects – requests from city departments for new equipment or upgrades to facilities – and the impacts this could have on residents, namely tax increases.

In the third week of February council will hold public meetings where they’ll present their draft 2011 budget to the public for their input. This is your chance to say what you think about the financial plans. That date will be announced later.

The budget process started with the city’s utilities.

Nelson Hydro asks for a 9.6 per cent rate increase

A 9.6 per cent rate increase will let Nelson Hydro get working on improvements to their infrastructure and cover other cost increases, said Alex Love, general manager of Nelson Hydro. Any changes to Nelson Hydro’s rates has to go before the B.C. Utilities Commission for approval.

That rate increase would also allow Nelson Hydro to start building up its capital reserve.

The situation in 2011

• Cost to buy power from FortisBC will increase by 12 per cent.

- Nelson Hydro generates roughly half the power it needs to supply customers. It buys the remainder from FortisBC.

• Labour costs will increase by 3.5 per cent.

• Planned capital upgrades will total $6 million. Nelson Hydro plans on borrowing $4.5 million for these upgrades.

• A 9.6 rate increase would generate $821,000 in additional revenue for the utility.

Other issues

Coun. Kim Charlesworth asked about the feasibility of bringing in smart meters. Smart meters provide the homeowner and the utility with constant information about how much energy is used.

Nelson Hydro is a large contributor to the city, paying $2.1 million each year. Coun. Marg Stacey told me without Nelson Hydro Nelson would have some of the worst taxes in the world.

Read the full discussion with Nelson Hydro here.

Water utility

Allen Fillion, the city’s director of engineering and operations, asked for the water rates to increase as planned.  A year or two ago council approved a schedule that would see rates increase nine per cent each year.

The situation in 2011

• They are working towards bringing in water meters for commercial users in 2012.

• They are continuing with a massive project to upgrade the water system which has leaky pipes and a water source (Five Mile Creek) that could be disrupted or even cut off should a major forest fire burn above Nelson. In 2010 the city spent $1 million upgrading the water system.

Other issues

Council had extensive discussions about water meters for residential users. The meters would allow the city to know just how much water each building is using.

An interesting around water meters that Coun. Robin Cherbo made was people think water meters will mean they’ll pay less for water, but he pointed out the city has to collect enough money to make the necessary repairs to the water system. The money has to come from somewhere.

They also spoke about plans to access the West Arm of Kootenay Lake as a secondary source of water. At the moment, the creeks (Five Mile, Anderson and Selous) are all considered the primary source of water.

Read the full water utility talk here.

Council had questions for Fillion that were addressed at a later meeting. At that second meeting there was an interesting discussion about how they should set water rates for residential and commercial water users. There are many different ways rates could be set and little agreement on just what the best way is.

The question of whether the city should change its plans for the water rates also arose, with Mayor John Dooley suggesting that is a major issue that the entire community needs to have and doing so would likely take quite awhile, possible dropping the issue in the next city council (after the November municipal elections).

Sewer utility

Council seemed to lean towards sticking with the planned rate increases (seven per cent) approved the same time the council set out the wate utility rates.

The situation in 2011

• One priority for the coming year is to reduce the flow of sewage. That isn’t as weird as it sounds as water from the storm drains gets into the sewer system times. Storm drain water could be pumped directly into the lake but the water that goes into the sewer system is sent to the sewer treatment plant instead. By keeping the storm system water out, the sewer treatment plant won’t have to work so hard.

The discussion around the sewer system was short and sweet and can be read here.

Greenhouse Gas Reduction Plan

The city has a plan to reduce greenhouse gas emissions through a series of capital upgrades to city hall, the Civic Centre, police station/library building and some other buildings. The total cost is $463,130 and if followed through with will result in a greenhouse gas emission reduction of 9.3 per cent.

The situation in 2011

• Nelson Hydro is running this reduction plan and would like to hire a project manager to ensure the projects happen. The alternative is to have the projects managed off the corner of someone’s desk, says Alex Love.

The full discussion can be read here.

Library happy with its budget

There was little to report from the library’s presentation. A referendum to include rural residents in Areas F and H passed, adding to the library’s budget. The library has asked for the same contribution from the city ($558,000) which is actually more than last year, but only because part of the deal in the referendum was the city would contribute some of the revenues it gets from dams to the library.

Read the full discussion here.

Youth centre asks for another staffer

The Nelson and District Youth Centre asked council for additional funding for more staff time at the centre, specifically $17,000 for another 20 hours of supervision and $2,000 for janitorial services.

The centre’s budget, without the added staff time, would be down to $113,174. That’s down from 2010 where they budgeted $120,335 and only used $102,133.

Should council approve the request for additional staff time and janitorial services, the city would contribute $132,174.

The situation in 2011

• The City of Nelson is not the major contributor to the youth centre’s budget. The Youth Employment Resource Centre (a Government of Canada program) provides 60 per cent of their budget, an additional $238,000 on top of the city’s contribution.

- The youth centre’s contract to run the employment centre comes up at the end of this year and there’s a risk they could lose the contract, which would have a major impact on the services the Nelson and District Youth Centre could provide.

Read the full discussion on the youth centre here.

Legislation and administration ask for less money

The city’s legislation and administration department manages the agendas for council meetings, keep city records, answers freedom of information requests and runs elections, like the one scheduled for this fall. This year they’re asking for a decrease to $1,108,419, down from 2010 when they received $1,218,587.

The situation in 2011

• This will focus on bringing in an adjudication bylaw, which will make it easier for the city to collect on bylaw infractions, streamlining their agenda process through new software and improving communication with the public, capitalizing on the web and “other digital options.”

There wasn’t much discussion around this presentation, but it can be read here.

IT department overwhelmed, wants another employee

The city’s information technology department has been getting busier and busier over the years and they’ve asked council to approve spending for another employee.

Another IT tech would add $61,000 to their budget. Their request for the 2011 budget then is an increase to $246,132, up from $169,711 in 2010.

Even if council doesn’t approve adding another IT person to handle the city’s computers and networks, the department reports they still need a budget increase ($185,132) just to offer the same service they did in 2010.

The situation in 2011

• The reason behind the increase just to stay in the same place is licensing costs for software.

• The IT department reports they are getting more and more requests from other city departments for work.

Read the full discussion here.

Finance and purchasing dept. asks for more money

The corporate services department includes human resources, finance and purchasing. They’ve asked for increased funding to cover the expected costs of collective bargaining and labour costs.

Staff have asked for the human resources budget to increase to $248,647 (an increase of $27,647) while the finance and purchasing department is asking to increase their budget to $689,238 from $656,141 in 2010.

Both human resources and finance were over budget in 2010. Finance was over budget because their revenue was not what they expected to be while human resources did not budget enough to cover their collective bargaining costs.

The situation in 2011

• This department is not planning any cost increases in 2011 but they have requested higher budgets to match the costs to handle labour negotiations. They’re using the precedents set in 2010 to determine their numbers.

• They have proposed cutting their long-term costs by buying an automated phone system to handle calls to city hall. This would allow them to reduce their staff hours.

• They also suggested council consider buying automated kiosks where people could pay their bills. These kiosks could be set up at sites outside city hall. They would still have some staff at city hall to take people’s money.

Read the full discussion here.

Planning department wants more money for staff

The short name is the planning department, but it’s full name is development services and sustainability, which gets across the broad range of responsibilities this department has. Dave Wahn is the department’s manager and he told council he needs to increase his budget to $17,034 in 2011′s budget to maintain service, an increase of almost $50,000 from 2010. The department was budgeted to lose money ($32,018) last year.

However, beyond the status quo budget, Wahn has asked for $20,000 for short-term administrative assistance for sustainability planning and $100,000 for property management software.

The situation in 2011

• Wahn anticipates finishing the Waterfront and Downtown Master Plan, updating some regulatory bylaws and complete an inventory of city owned land. This includes empty lots and other odd pieces of property.

• The increase in funding is needed to cover: a shortfall from the previous year; expected lower revenues for planning services and; wage adjustments due to changes in the department’s organization.

• Wahn could raise an additional $24,000 by raising fees in his department by 10 per cent.

Other issues

During the talks about this meeting, council asked Wahn what the impact of Kutenai Landing not going ahead was. The short answer: $100,000 in fees would have gone to his department had the project gone ahead.

Read the full discussion here.

Fire department needs significant increased funding

The story with the Nelson fire department is not an easy one to tell, largely because of some retroactive costs that came about through labour negotiations. To continue offering the same service they always have, Nelson Fire and Rescue Services needs an extra $210,000. This is because of contract negotiations that were settled in November 2010 but retroactive to 2008. The city had set aside money to cover the expected wage increases, but not enough.

That money was not covered by taxation in the past and the city now needs to find ways to increase their revenue or find grants to cover the costs or else they’ll have to turn to the taxpayer. The fire department is asking for $1,532,607 for 2011. The budget in 2010, retroactively adjusted to include the new wages, was $1,484,015.

The situation in 2011

• Other than the labour increase, the fire department has not asked for increased funding.

Read the full discussion here.

Police want to hire a new civilian employee to let their officers patrol the streets

Dan Maluta, chief of the Nelson Police Department, asked council to approve increased funding to hire a new employee for the police department. Chief Maluta told council his officers were spending more and more time on administrative duties that could be handled by a civilian on a lower wage. Maluta also said his department’s budget needs to increase to cover salary hikes from collective agreements.

The civilian job would add roughly $75,000 to the budget in salary ($65,000) and benefits. Maluta says the police are working on a business case that could find savings elsewhere in the budget that would help cover the extra cost.

Regardless of whether council approves the new position, Maluta told them his department needs an increased budget just to offer the same services. For 2011 Maluta asked the budget be increased to $2,569,909, up from $2,414,169 in 2010. That’s a $155,741 increase.

The situation in 2011

• Adding the civilian position at the department was the focus of Maluta’s presentation to council

• The police chief also tried to make a case for replacing his department’s boat, which has been used for 17 years. That discussion will happen at the capital meeting, set for Tuesday, Feb. 1.

Read the full presentation here.

Public works asks to keep the budget the same (more or less)

The city’s public works department didn’t ask for an increase to their budget aside from what’s needed to cover contractual wage increases. They’ve asked for their budget to be increased to $2,540,906, up from $2,449,187 in 2010. That’s a $91,719 increase.

The situation in 2011

• Public works isn’t looking to change much in their budget. They plan on hiring an operations manager (a position that was vacant much of the year) and complete facility and tree maintenance plans.

Other issues

One thing council discussed was whether the standards for snow plowing was too high. Mayor Dooley noted the quality of service was far higher than several decades ago.

Read the full discussion here.

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