The District's finances appear to be in order, but authorities need a plan for spending between $40 million to $100 million on its facilities for upgrades and replacements.
As elections draw near, this assessment was made by a UBC professor who was asked by The Chief to evaluate the municipality's financial situation.
After looking at the most recent financial statements — which were for the year ending Dec. 31, 2017 — Kin Lo, a senior associate dean at UBC's business school, said that he can't find any red flags.
Lo, CPA professor in accounting, also reviewed the District's most recent budget, the 2018-2022 Five-Year Financial Plan.
"The forecasted budgets are in balance and look reasonable," he told The Chief in an email, after examining the document.
Lo, however, noted that the budget was made prior to the release of the Real Estate and Facilities Strategy, which came out later in the spring.
As a result, the financial documents haven't yet taken into account what could be up to $100 million in spending for upgrading or replacing municipal facilities.
"My key message is that, given financial constraints, a robust discussion should be had regarding priorities," Lo said.
In response, the District says that decisions on spending for aging facilities haven't been made, but the municipality is looking into identifying priorities.
"The District is in the stage of developing a master plan for the District's real estate and facilities," said Mayor Patricia Heintzman. "The District's master plans — such as our Water Master Plan or Flood Hazard Management Plan for example — inform future work plans, prioritization of projects, and provide a foundation for council budget and funding priorities in the future."
District spokesperson Christina Moore said investment decisions will only be made after the municipality completes several steps.
From first to last, the District will create a Real Estate and Facility Master Plan; a Long-Term Financial Plan; an Annual Five-Year Financial Plan (Budget); and borrowing bylaws.
About $18 million can be paid to keep the facilities operating, according to an information report that District staff presented to council, but that won't help eliminate the problems associated with aging, capacity, and function of facilities.
"The replacement, upgrading, or expansion of these facilities will require an investment of more than $100 million," Coun. Karen Elliott said in a column in The Chief.
District staff has said the municipality currently does not have the financial means available to fund the $100 million investment identified.
Lo said there needs to be discussions with regard to facilities spending.
He said the real estate strategy is not as definitive about the $100 million figure as Elliott suggested.
Nonetheless, the costs could still be fairly high.
"The key difference is what could be done versus what must be done," Lo said.
"The $100 million investment is not a foregone conclusion. The minimum investment is probably closer to $40 million, and the remainder will depend on how people prioritize various needs."
These spending recommendations, he said, are based on the assessment that those facilities have reached capacity; will soon reach capacity, or have a level of functionality that is not ideal.
Only about $36 million worth of facilities spending is considered ‘critical' in the real estate strategy.
Therefore, Lo says that is likely closer to the actual cost needed to keep the municipality running.
Other spending items aren't absolute necessities.
For example, the report also lists $27 million for a second skating rink in Brennan Park. It also lists $13 million in spending for recreation centre's programming.
"The bottom line is that these are choices that council (and District residents) need to make, but by no means are these investments absolutely mandatory," Lo wrote.
The District said it has yet to determine if it will spend the full $100 million in the long run or aim for a lower amount.
