Victoria, BC– The Capital Regional District (CRD) and Capital Regional Hospital District (CRHD) Boards have approved the Financial Plan for 2019 at the March 20 Special Board meetings. The Financial Plan incorporates the delivery of work and execution of priorities and initiatives that were identified in the fourth year of a planning cycle and as part of the strategic and corporate plans for both the CRD and CRHD. It is in line with service levels set out in the four year service plans with adjustments for Standing Committee recommendations.

The overall change in the Financial Plan is reflective of inflation in our region, the increase to some municipalities for the construction and implementation of the Core Area Wastewater Treatment Project and the cost of new initiatives. Approval of the Financial Plan enables the organization to effectively deploy resources needed to maintain core service delivery and advance capital projects required to support development and population growth across the region.

Since the approval of the provisional budget in September 2018, a number of service plan adjustments and, as a result, financial plan adjustments were proposed through standing committees for consideration by the Board. A sample of directed changes being included are but not limited to;

• Climate Action - On February 27, 2019, the Parks and Environment Committee approved a recommendation to the CRD Board that a $95,000 increase in requisition funding be considered as part of the 2019 final budget approval for the CRD Climate Action service, to undertake a regional greenhouse gas emissions inventory and modelling exercise, and pursue a BC Hydro grant for staff support and, if successful, amend the staff establishment chart to hire a Community Energy Manager for a two-year term;
• First Nations - On February 20, 2019, the First Nations Relations Standing Committee approved a recommendation to the Board to amend the 2019 Service Plan to undertake the work recommended by the Special Task Force on First Nations Relations. The additions to be considered include increases for a Forum of All Councils, special projects, meeting costs, and 1.5 FTE for a program administration and a community liaison;
• Greater Victoria Coalition to End Homelessness - A requested increase to support core services and extend services by the Youth Project Coordinator;
• Electoral Area: Specific increases as recommended through director and/or commissions.

Various external pressures influence the Financial Plan including inflation, interest rate changes and utility costs, such as electricity, natural gas, and fuel. Impacts on CRD activity include the need for new capital investment, infrastructure maintenance and upgrades, and a continued focus on maintaining service levels while advancing Board priorities.

External increases are partially mitigated by new revenue sources, grants, cost containment, and optimization efforts by staff. Increases in requisition costs to municipalities may also be distributed across a larger local tax base resulting from increased development and construction activity or be impacted by shifts in the growth of the tax base in other parts of the region. The external factors are incorporated across the organization but given the diverse nature of services and service areas, consideration is given for applicability within a given service area. Cost escalation pressures driven by strong local economy and low local unemployment continue to be a major factor in organization wide service delivery.

The CRD, Capital Regional Hospital District (CRHD) and Capital Region Housing Corporation (CRHC) financial plans combine to form a consolidated budget. The consolidated operating portion ($313.3 million) will pay for a range of regional services and sub-services to over 413,000 people in the region. In addition, the consolidated capital portion targets $503.1 million in projects. The Financial Plan is unique for each municipality, electoral area and First Nation as each participates in a different set of services. An overview is available in the attached 2019 Consolidated Budget Overview.

The operating portion of the Financial Plan pays for the daily business of the CRD, including labour, supplies, programs, services and repayment of debt for major projects. For 2019, the operating portion includes revenues and expenditures of $261.8 million, an increase of $13.4 million or 5.4% compared to the 2018 CRD Financial Plan.

For 2019, revenue from sale of services comprises nearly half (47%) of the CRD’s operating revenue, while requisition makes up approximately one quarter (26%). The balance is funded from a variety of other revenue sources including grants.  

This increase reflects the scope and scale required for working within complex regulatory and legislative frameworks while managing changes related to environmental monitoring; reporting related to liquid and solid waste management; discharges and emissions; operations and site safety; cyber security; and internal performance measures. It is also driven by Board priorities and community needs identified in corporate and service planning.

The capital portion of the Financial Plan pays for new and enhanced infrastructure. This includes acquisition of buildings and facilities, as well as construction and upgrades to assets. For 2019, the capital portion includes revenues and expenditures of $382.2 million, an increase of $72.3 million (23%) compared to the 2018 CRD Financial Plan. The Core Area Wastewater Treatment Project accounts for $260.2 million (68%) of capital expenditures as construction activities continue. A list of significant capital projects is available in the attached CRD Major Capital Projects and CRHD Capital Expenditures.

Highlights include:

• The Core Area Wastewater Treatment Project will see significant construction activities in 2019 with all components under construction. This includes the new treatment plant at McLoughlin Point in Esquimalt, the Residuals Treatment Facility at the Hartland Landfill, and upgrades to the conveyance system. The project will benefit from considerable contributions totaling more than $450 million from the federal and provincial governments. The CRD continues to support the implementation of core area wastewater treatment by increasing the requisition to $30 million ($5 million increase) for participating municipalities. This follows a 2013 Board decision to budget for incremental increases to reduce overall interest expense, reduce ongoing annual debt servicing costs and provide sufficient funding for capital and operating costs.
• Implementation of the Regional Housing First Program in 2019 includes the $44.5 million purchase of Millstream Ridge at 713/715 Treanor (132 units).
• Renewing and improving drinking water and wastewater infrastructure for the region’s urban centres and local service areas continues in 2019. With a total budget of $3.16 million, $1.6 million has been allocated in 2019 for the replacement of Lubbe Dam No. 4. Construction is currently underway and expected to be completed this spring. Also underway is the remediation of Butchart Dam No. 5 with a budget of $3.2 million in 2019.
• Promoting active and healthy lifestyles remains a priority as the CRD continues development of the E&N Rail Trail, a cycling and pedestrian trail providing active transportation and recreation opportunities largely within the E&N rail corridor. The CRD Board has agreed to borrow up to $6.1 million to complete two additional sections (Phase 3 and Phase 4), between Atkins Avenue and Savory Elementary School in Langford and between Esquimalt Road to Catherine Street in the City of Victoria. Once complete these two sections will provide a continuous route from Westshore communities to Victoria – approximately 13km of the eventual 17km route.
• The CRD also continues to collect about $20 per average residential household assessment resulting in $3.7 million annually for park land acquisition.
• Construction of a unified 9-1-1 call answer and police dispatch centre is complete and borrowing costs for construction will be funded from existing revenue streams. Now fully operational, the South Island 9-1-1/Police Dispatch Centre meets post-disaster standards and accommodates consolidated services that benefit residents across the region while maintaining existing revenue requirements.
• Thanks to a UBCM Strategic Priorities Fund grant, an expansion of SEAPARC in 2019 will add 5,200 square feet of fitness and multi-purpose space to the leisure complex in Sooke. Project construction is underway and is expected to be complete by December 2019.
• An additional investment of $1.2 million has been allocated for the South Galiano Fire Hall approved in referendum last fall, as well as $1.3 million for the Southern Gulf Islands Small Craft Harbours Facilities.
• The CRHD Financial Plan includes $46.5 million for continued development of health-related infrastructure, including The Summit at Quadra Village, a 320 unit complex residential and dementia care facility. Construction of the facility is currently underway and is expected to be complete in 2019.
• A new major project planned for CRHD in 2019 is the Westshore Health Centre. The total estimated cost for this project is $3.4 million.
• Additional possible projects for CRHD in 2019 include the planned RJH Multidisciplinary Pain Clinic estimated at $3 million, the VGH Pediatric Youth Mental Health Stabilization Unit estimated at $5 million, and the Urban Victoria Health Centre estimated at $3.4 million.

The CRD follows a four-year planning cycle to ensure alignment with the local government election cycle. The CRD’s multi-year financial plans establish a longer-term perspective of the allocation of resources required to deliver the programs and services needed by the community, and to accomplish Board priorities.

Financial plans are the products of a rigorous strategic, corporate and financial planning process spanning many months, starting in May of the preceding year. Service plans drive the financial planning process and provide necessary information to evaluate overall organizational requirements, new initiatives, proposed service levels and implications for the budget and financial plan.

Through Board direction, the Electoral Area Services Committee reviews and recommends all electoral area-only service budgets, including the review of Local Service Commission budgets. This process includes a significant amount of work undertaken by many commissioners who volunteer their services in the Southern Gulf Islands, Salt Spring Island and Juan de Fuca electoral areas.

For more details, please visit www.crd.bc.ca/about/financial-accountability/budget-in-brief.

Proud to be recognized as one of BC’s Top Employers and Canada’s Greenest Employers, the CRD delivers regional, sub-regional and local services to 13 municipalities and three electoral areas on southern Vancouver Island and the Gulf Islands. Governed by a 24-member Board of Directors, the CRD works collaboratively with First Nations and all levels of government to enable sustainable growth, foster community well-being, and develop cost-effective infrastructure while continuing to provide core services to residents throughout the region. Visit us online at www.crd.bc.ca.

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