Teslin Municipal Services Financial Analysis

Transcription

1 Teslin Municipal Services Financial Analysis th Street, Fort St. John, BC V1J 3Z6 T: May 17, 2013 File: This report is prepared for the sole use of Yukon Government. No representations of any kind are made by Urban Systems Ltd. or its employees to any party with whom Urban Systems Ltd. does not have a contract. Copyright 2013.

2 Report to: Community Affairs Client Name: Government of Yukon Department of Community Services C-9 Whitehorse, Yukon Y1A 2C6 Attention: Christine Smith Director, Community Affairs Prepared by: Across The River Consulting Dawson City, Yukon Y0B 1G Urban Systems th Street Fort St. John, BC V1J 3Z6 (250) Date: May 17, 2013 Page i

3 Contents Executive Summary Introduction Background Objectives Methodology Context Map Legislative and Policy Environment Final and Self-Government Agreements Taxation Agreements Municipal Act Other Legislation Official Community Plan Existing Agreements Summary Service Delivery Current Services Impact of Boundary Expansion on Services Water Service Sewer service Fire protection Road Maintenance and Street Lighting Parks and Recreation Solid Waste Bylaw Enforcement (Animal Control) and Insect Control Land Use Management and Development Control Cemetery Summary Property Taxes Government of Yukon Village of Teslin ii P age

4 4.3 Impacts Senior Government Grants Comprehensive Municipal Grant (CMG) Gas Tax Building Canada Financial Implications Summary of Financial Impacts Key Considerations Recommended Agreements Services Taxes Page iii

5 Executive Summary The Village of Teslin is considering filing a proposal with the Yukon Municipal Board to expand the boundaries of the municipality. The objective is to provide for a more cohesive community and the most efficient and cost effective service delivery. This study undertook a scan of the applicable legislation and policies and a detailed financial analysis of the costs and revenues associated with the delivery of municipaltype services in the Greater Teslin area, and the related implications of the proposed expansion. With a few exceptions, the legislative and policy environment is permissive and supportive of the intention. This context is also supportive of the consideration of appropriate service agreements between any of the governments, irrespective of such an expansion proceeding. Extending the Village s boundary would appear to have limited impact on service levels. Those properties that would be brought into the Village under the proposed boundary expansion already receive a comprehensive suite of services from the Village. The most significant change in the level of service would be the increase in water delivery from once a week to three times a week. The most significant change in service responsibility could be for the roads on TTC lands e.g. Foxpoint Subdivision. In total, the Village is expected to experience a gain of $54,590 if the boundary is expanded as proposed. TTC is expected to experience a loss of $22,702. TTC Citizens would gain $6,585. There is a notable net positive impact to the local community as a whole of $46,334 as tax levies are redirected from Government of Yukon to Village of Teslin. Table E-1: Summary of Financial and Service Level Implications of Boundary Expansion (annual) Village of Teslin Teslin Tlingit Council TTC Citizens Property Taxes $100,020 ($49,777) $0 Service Fees/Costs ($45,430) $27,075 $6,585 Grant Transfers No change No change No change Total $54,590 ($22,702) $6,585 Service Level Gains Increased water delivery from 1 to 3 times/week Animal Control Insect Control Development Control Increased water delivery from 1 to 3 times/week Animal Control Insect Control Development Control Village Council voting rights For the sake of simplicity, the estimates on road maintenance cost assumed that the Village would simply take over the TTC contracts on those lands, continuing the current mode and standard of service. However, there is a considerable discrepancy between the per/km road costs provided by TTC and those experienced by the Village elsewhere and therefore anticipated in the expanded area, which causes concern to the Village. More detailed work is required to examine the road network, its costs and its future. Service agreements between the Village and TTC are recommended for water, sewer, solid waste and cemetery. Parks and recreation should continue under the current agreement. Transitional arrangements for land use management and development control should be agreed for until such time as a new OCP is developed. A TTC-Village MoU on animal control and a three-government agreement on fire protection are proposed. A service agreement for the roads will need to be detailed and finely crafted to outline the level of service and specifics of a maintenance program and delineate and assign the associated capital costs. Page 1

6 1.0 Introduction The Government of Yukon wished to work with Village of Teslin (Village) and Teslin Tlingit Council (TTC) to facilitate a detailed financial analysis of costs and revenues associated with the delivery of municipal-type services in the Greater Teslin area, and the related implications of a proposed boundary expansion. 1.1 Background The Village of Teslin is considering filing a proposal with the Yukon Municipal Board to expand the boundaries of the municipality. The Village has a good working relationship with both Teslin Tlingit Council and Government of Yukon, and there is a strong history of collaboration in community planning (a joint Integrated Community Sustainability Plan was completed in 2009) and the delivery of services. Each party is interested in ensuring agreements and mechanisms are in place to provide for the most efficient, costeffective and financially fair service delivery arrangements going forward, whether a boundary expansion proceeds or not. The main services of concern, listed in no particular order, were: Potable water; Wastewater management; Fire protection; Solid waste management; Road maintenance and street lighting; Bylaw enforcement (including animal control) and insect control; Parks and recreation; Land use management and development control; and Cemetery. Whenever general reference to services is made in this report, this means to all of the above. 1.2 Objectives The immediate specific questions that needed to be answered were: What is the legislative and policy environment and what are the implications associated with service delivery in the event of a boundary expansion? Who is currently providing services in various areas and at what cost? Who is paying for services in various areas and at what price? What are the financial implications associated with a boundary expansion for each of the governments and private property owners? The answers to these questions were used to develop recommendations to the Village of Teslin and Teslin Tlingit Council in order to facilitate the development of service and/or tax agreements, both in the case of 2 P age

7 boundary expansion proceeding and if it does not. A high-level assessment of the other key financial considerations associated with the expansion was also undertaken. It is expected that this analysis will help inform decision-makers, and later the public, on how municipal service provision would unfold, both governance-wise and financially, after a boundary expansion. 1.3 Methodology The consulting team visited Teslin in March 2013 to interview service managers, financial officers and senior administrators. A joint workshop was held with members of each Council and Government of Yukon advisors to clarify objectives. A community service tour was completed and financial documents were sourced and reviewed with the officers for clarification on points of note. Literature reviews of relevant legislation, policies and plans from all three governments were undertaken. The financial and technical analysis was completed and reviewed with Government of Yukon prior to being presented as a draft report to a joint meeting of Village of Teslin and Teslin Tlingit Council representatives. Revisions were made based on feedback received and this final report submitted with visual aids, mapping and supporting financial information. Interviewees were: Adam Grinde Cole Hunking Shelley Hassard Frank Thomas Ian Davis Director, Capital and Infrastructure, Teslin Tlingit Council Public Works Foreman, Village of Teslin Treasurer, Village of Teslin Chief Administrative Office, Village of Teslin Community Advisor, Government of Yukon March workshop attendees were: Carl Sidney Brad Stoneman Gord Curran Denise Johnston Stephen Kremer Adam Grinde Bernadette Wolfe Frank Thomas Shelley Hassard Cole Hunking Frank Thomas Ian Davis Anthony DeLorenzo Chief Executive Officer, Teslin Tlingit Council Councillor, Village of Teslin Councillor, Village of Teslin Councillor, Village of Teslin Councillor, Village of Teslin Director, Capital and Infrastructure, Teslin Tlingit Council Senior Finance Officer, Teslin Tlingit Council Chief Administrative Office, Village of Teslin Treasurer, Village of Teslin Public Works Foreman, Village of Teslin Chief Administrative Office, Village of Teslin Community Advisor, Government of Yukon Senior Advisor, Government of Yukon Page 3

8 1.4 Context Map Figure 1-1 illustrates the Village of Teslin current boundary and proposed boundary, as well as applicable property ownership. Note that the Garbage Dump reserve to the southeast, owned by Government of Yukon, will be excepted from the municipality under this proposal. Figure 1-1: Context Map 4 P age

9 2.0 Legislative and Policy Environment This section reviews the legislative and bylaw context for service delivery and boundary expansion and the implications of the Final and Self-Government Agreements between Teslin Tlingit Council, Yukon and Canada. The full listings of the relevant clauses from review documents can be found in appendices B Final and Self-Government Agreements For the purpose of clarity, the Final and Self-Government Agreements prevail to the extent of the inconsistency or conflict between any territorial or municipal Law and the Agreements TAXATION The Final Agreement includes a number of clauses with respect to property taxation, including that: Fee Simple Settlement Land is subject to property taxes; Unimproved Rural Settlement Land is exempt from property taxes; Other Settlement Land is subject to property taxes; Residences on Fee Simple Settlement land are eligible for home owner s grant programs; Settlement Land is not subject to attachment, seizure or sale for non-payment of property taxes; If property taxes are unpaid for more than two years, services may be withdrawn and later referred to a dispute resolution process; and, User-pay services must be at the same rate as other property owners in the Village and similar to those in similar communities. Note that unless the governments agree otherwise, if the expansion encompasses a parcel of Unimproved Rural Settlement Land, the tax exempt status of the parcel shall not change until a service agreement has been entered into. Government of Yukon may enter into a taxation agreement with TTC, which has power to enact laws for taxation of citizens and interests in Settlement Land including any measures made pursuant to such an agreement AGREEMENTS TTC and Yukon are expected to enter into negotiations as necessary to provide for the efficient delivery of local services and programs. TTC may develop common administrative or planning structures within the community and delegate any powers to any of the other governments. It may enter into agreements with any other government to provide for municipal-type services. Such agreements shall: Take into account the cost of providing that service; Provide for a process to resolve disputes; and, Provide that the parties shall pay similar rates for user-pay municipal or local government services as are paid by property owners in the same or similar communities. Page 5

10 Conclusions The Final and Self-Government Agreements anticipated the benefits of the governments working cooperatively for the delivery of local services. The Agreements empower TTC and Yukon to conclude taxation agreements and all the governments to seek service agreements. With the exception of Unimproved Rural Settlement Land (exempt), property taxes are applied to Settlement Lands in the same manner as any other property. 2.2 Municipal Act The Municipal Act provides a process for municipal boundary alterations and outlines municipal powers in service delivery inside and outside their boundaries. To apply to expand its boundaries, the Village must provide a reason for the expansion in its proposal, such as the rationalization and coordination of service delivery in the area. The Yukon Municipal Board then reviews the proposal and makes recommendations to the Minister, considering: The potential effect of the proposal on each nearby municipality, each nearby Yukon First Nation government, other nearby residents, and on the residents of the affected area; and, The viability, including financial viability, of the proposal. If the proposal is accepted, the Commissioner in Executive Council may make an order to expand the boundary. The order may contain provisions dealing with matters of assessment and taxation, property, and employees. The Municipal Act is generally very permissive with regard to empowering the Village to deliver any services desirable for the residents and to make agreements with other governments on service delivery. Specifically, the Village may: Establish common administrative or planning structures with any other government; Enter into agreements for the provision of municipal-type services with any other government; and, Provide services outside its boundary if in accordance with such an agreement. Aside from the above, the municipality s jurisdiction is confined to the boundary and therefore so is its power to raise revenue by levying taxes. The Village cannot impose a tax outside the boundary and also cannot provide exemptions or privileges on property taxes inside the boundary. However, there is power to establish a different fee structure for persons or businesses from outside the boundary. Conclusions In order to have a boundary expansion request recommended to the Minister by the Yukon Municipal Board, the Village must demonstrate the viability of the expansion and that it has properly addressed the impacts on Teslin Tlingit Council and area residents. All the governments are free to develop the most appropriate service agreements and fee structures but taxation by the Village is restricted to the municipality. 6 P age

11 2.3 Other Legislation The Yukon Assessment and Taxation Act, Home Owners Grant Act, Seniors Property Tax Deferment Act, Pioneer Utility Grant Act, Highways Act and Lands Act and associated regulations provide some direction to how the governments may adjust policies or make agreements to properly address the impacts of the proposed expansion upon them and the area residents. Of most critical note: Taxing authorities may vary rates by year, region and class of property; Local improvement taxes may be levied but require majority approval of those to be taxed; Agreements may be made for the purposes of the Highways Act; and, Highways in a municipality are transferred unless exempted by order. 2.4 Official Community Plan The Village of Teslin Official Community Plan (OCP) provides policy direction from Council, which is supportive with regard to cooperative service delivery and consideration of the merits of a boundary expansion, as shown below. Table 2.1: Summary of OCP direction relating to boundary expansion Section Boundary Expansion Committed to rationalizing its boundaries to ensure that community members are enfranchised, to benefit from future development, and to maintain excellent levels of service Work closely with TTC to investigate the feasibility of boundary expansion to improve the tax base, eliminate boundary anomalies, and promote efficient land management Before expanding the service area, ensure the expected revenue base is sufficient to cover the additional costs incurred. Section Cooperative Service Delivery Encourage all levels of government to coordinate their actions to ensure the level and quality of services provided are responsive to current and future resident needs. 5.4 Utilize, whenever and wherever possible, opportunities to work cooperatively with all levels of government to optimize the use of existing infrastructure and make the best use of available financial and management resources for the benefit of the community Work with the Teslin Tlingit Council to coordinate the delivery of water, collection of sewage and disposal of garbage to ensure the costs of service are fairly distributed, the service level provided is consistent, and the services are provided in a cost effective manner throughout the municipality Enter into joint use agreements with the Teslin Tlingit Council and the Yukon Government to provide municipal services in a cost effective and efficient manner. Page 7

12 2.5 Existing Agreements The Village and TTC have two existing signed formal agreements, being the Infrastructure and Services Memorandum of Understanding and the Recreation Contribution Agreement. A number of other informal agreements are recognized, such as for fire protection and fee-for-service arrangements for water delivery and wastewater and solid waste management. The Infrastructure and Services Memorandum of Understanding is supportive of the approach the two governments are taking, in considering negotiating local service agreements to properly address the impacts of the proposed boundary expansion, as it: Recognizes the importance of mutually beneficial relations to ensure a high level of service at cost effective pricing; Facilitates evolving inter-governmental relationships to assist in the orderly provision of governmental services to TTC Settlement Land; Contemplates a series of specific agreements in relation to separate projects; and, Commits to working together in developing better inter-governmental relationships and the provision of governmental services to all land parcels. The Recreation Contribution Agreement is an existing example of a local service agreement as contemplated under the TTC Self-Government Agreement. TTC provides funding to the Village to ensure programming relevant to the entire community including all age groups. 2.6 Summary With a few exceptions, the legislative and policy environment is permissive and supportive of the intention to explore a boundary expansion as a means to support the best and most efficient service delivery. This context is also supportive of the consideration of appropriate service agreements between any of the governments, and tax agreements in the case of TTC and Government of Yukon, irrespective of such an expansion proceeding. 8 P age

13 3.0 Service Delivery This section outlines the current municipal-type services within the current municipal boundary and those outside that boundary but within the proposed expanded boundary. It then explores the impact of the proposed boundary extension on those services. 3.1 Current Services The Village provides the majority of services to residents living outside of the existing municipal boundaries. Most of these residents, about people, are in Foxpoint Subdivision, north along the Alaska Highway. Table 3.1 outlines the current service delivery and cost recovery approach. For sewer services, solid waste, parks and recreation, fire protection and cemetery, these residents enjoy the same level of service as that provided to residents living within the municipality. However, standard water delivery service for residents outside of current boundaries is only once a week, while residents within the municipality receive water three times a week. TTC provides road maintenance and street lighting on TTC lands outside of Village boundaries and service standards are understood to be comparable 1. Animal control, land use management and development control outside the boundaries are the responsibility of Government of Yukon but service is negligible. Table 3.2 provides a summary of the costs of these services in Both water delivery and septic pump-out services are governed by a radius concept that extends two kilometers beyond the existing boundary. Properties within this radius receive the same service levels and fee rates as those within the boundary. This includes the few homes on the south side of the bridge and the western portion of Smarchville that extends beyond the boundary. The road in this section of Smarchville is also Village maintained. Yukon Government Department of Highways and Public Works has responsibility for the Alaska Highway that runs through the centre of the community. The department also maintains the airport and is based out of a highway maintenance camp just out off the highway, at the airport site. It is understood that the Yukon Government as a convenient and simple courtesy to all concerned therefore maintains the road to the airport and the camp. The lagoon, the landfill and the highway pullout stops at the town entrances, all outside the municipality, are Village operated and maintained. The Village also maintains the access roads to the sewage lagoon and the landfill, and the western end of the Smarchville loop, even as all these lie outside of the current boundary. Figure 3-1 illustrates the distribution of current road maintenance (including street lighting) service responsibility and the piped sewer system. There are a number of locations where road and driveway responsibilities cross and significant opportunities for rationalized service decisions, efficiencies and cost savings exist, such as at the TTC Administration Building and at the Teslin School site, where a new lease will leave the status of its access road unclear. 1 Personal communication Adam Grinde, Director, Capital and Infrastructure, Teslin Tlingit Council Page 9

14 Table 3.1: Current Service Delivery and Cost Recovery Approach Water Sewer Properties Within Current Boundary Properties Outside of Current Boundary 2 (but within proposed boundary) Service Service Cost Recovery Approach Service Cost Recovery Approach Fire Protection Road Maintenance and Street Lighting Parks and Recreation Solid Waste Bylaw Enforcement (Animal Control) & Insect Control Land Use Management and Development Control Delivery 3 times a week by the Village (optional extras) Pump outs as needed provided by the Village for septic systems, but most properties are connected to community system Fire protection provided by the Village Road maintenance provided by the Village Parks and recreation services provided by the Village Weekly residential, twice-weekly commercial collection by Village Dog licensing provided by the Village Land use management and development control provided by the Village $ per litre (monthly min of Delivery once a week by the $25), $20 for extras 3 Village (optional extras) $15.50/month for residential properties connected to the piped system 4 $75/hr. for pump out 5 No specific user charge levied - funded out of general revenues No specific user charge levied - funded out of general revenues Fees charged for specific programs; balance funded out of general revenues and through TTC contribution of $65,000 6 $20/month residential, $45/month commercial 7 $80/licence if dog is not spayed or neutered, otherwise licence is free 8 Fees levied for OCP and zoning changes 4 Pump outs as needed provided by the Village Fire protection provided by the Village Road maintenance on TTC lands provided by TTC contractors. No other service provided. Parks and recreation services provided by the Village Weekly residential, twice-weekly commercial collection by Village Generally, no animal control provided (YG will, but only under exceptional circumstances) YG provides minimal levels of development control. TTC land planning in progress. Cemetery Provided by TTC N/a Provided by TTC N/a $10 delivery charge plus $0.0095/litre (monthly min of $25), $50 for extras 3 $75/hr. for pump out 5 Plus $2/km for travel costs No fee No specific user charge levied TTC lands service funded by TTC out of general revenues Fees charged for specific programs - balance funded out of general revenues and through TTC contribution of $65,000 6 $20/month residential, $45/month commercial 7 N/a N/a 2 For water and sewer, properties within 2km radius of current boundary are serviced as if inside the boundary 3 Water Distribution Bylaw # Sewer Bylaw # Service Rates and Fees Bylaw # Community of Teslin Recreation Contribution Agreement 7 Garbage Bylaw # Dog Control Bylaw # P age

15 Table 3.2: Current Service Delivery Costs Service Service Provider Services provided to: Total Cost (2012 Actual Expenditures) Water Sewer Fire Protection Road Maintenance and Street Lighting Parks and Recreation Solid Waste Bylaw Enforcement (Animal Control) & Insect Control Land Use Management and Development Control Cemetery Village Village Village Village & TTC Village & TTC Village Village Village TTC All properties within proposed boundary All properties within proposed boundary All properties within proposed boundary Only properties within municipality & TTC lands All properties within proposed boundary All properties within proposed boundary Only properties within municipality Only properties within municipality All properties within proposed boundary $110,000 $66,000 $32,000 $140,000 9 $272,000 $166,000 $4,300 $0 10 $0 Total $790,300 9 Including $20,000 of TTC road contract costs and $15,625 for Village street lighting 10 Land Use Management and Development Control are part of normal municipal responsibility and it is assumed that it is being carried out as part of management duties. Village has $1,000 budgeted for 2013 for additional costs. Page 11

16 Figure 3-1: Road and Sewer Service Map 12 P age

17 3.2 Impact of Boundary Expansion on Services The following sections provide details for each service and the potential impact of boundary expansion. The impact on service delivery is based on the following key assumptions: A consistent level of service will be provided within the proposed Village boundary the same level of service would be provided to all properties within the proposed boundary No change in user fees/tax rates newly incorporated properties will pay the same user fees/tax rates as charged to current Village residents and set out in the relevant Village bylaws Single family residential development these tables reflect servicing for single family residences Based on current development these tables do not incorporate information on future developments WATER SERVICE The Village provides trucked water once a week to residents living outside of current Village boundaries for $ per litre plus a $10 delivery fee. These residents can only receive additional unscheduled water deliveries by paying a $50 delivery fee each time so this is rarely done. The TTC six-plex and another six residences (four TTC, 2 privately owned) take Village water delivery and are currently outside the boundary but would be inside the proposed boundary. Of these, only the six-plex receives scheduled water delivery twice a week, to each of the six units. TTC pays an additional $90/week in delivery charges for this single building (in addition to the per litre charge). If the boundary were to be expanded, it is assumed that all these residences would receive water three times a week at $0.0095/litre with no additional delivery fee. In an average month, TTC pays $400 in delivery charges on water. This totals to approximately $4,800/year. In addition, TTC citizens living outside the boundary pay on average $400 a month in delivery charges. This also totals to approximately $4,800/year 11. The two private residences pay $1,040/year. If the boundary were to be expanded, the Village would forego approximately $10,640 in annual water delivery charges. Moreover, the Village would incur additional costs to increase delivery to 3 times a week. The six-plex already receives delivery twice a week so only one additional delivery to each unit would be needed. The other six residences receive water only once a week, so they would need an additional 12 deliveries a week. Assuming the current $10 delivery fee just covers the Village s costs 12, increasing service to these residences would theoretically cost the Village approximately $9,360 (18 x $10/delivery x 52 weeks) over the year. Though there is potential revenue decrease due to the loss of delivery charges if these properties are included within the Village boundaries, the additional deliveries would also increase revenue the Village receives from the sale of water ($ per litre), assuming water use in these households reverts to the community mean. It is estimated that the Village would gain an additional $2, from added water sales. It is assumed that the associated additional cost of sourcing this water is negligible. Most dwellings and the larger institutional and commercial properties that would come into the municipality through a boundary expansion have wells or access other water delivery services, such as personal trucks. 11 The Village provided a breakdown in water and sewer fees paid by TTC versus those paid by TTC citizens outside deliveries use app. 5 $30/hour labour, $60 fuel and $30 maintenance and depreciation 13 Calculation: 18 additional deliveries x (320 litres average delivery x $0.0095) x 52 weeks Page 13

18 3.2.2 SEWER SERVICE Most properties outside of Village boundaries have individual septic fields or holding tanks. The Village provides tank pump outs at a rate of $75/hr. plus $2/km each way for travel costs. There are no current plans to expand the Village s community sewer system to existing properties (although a future Airport West subdivision may tie in), so the level of service is not expected to change if the boundary is expanded. If the boundary were to be expanded, it is assumed that residences outside of the current boundary would no longer be required to pay the $2/km each way for travel costs. In an average month, TTC pays $ for mileage on septic pump outs, which totals approximately $1,800/year. TTC citizens living outside of the current boundary pay an average of $288/ month for mileage on septic pump outs, for a total of approximately $3,500 over the year. The mileage charges paid by TTC and by TTC citizens totals approximately $5,300/year. None of the six private titled properties identified in the expansion area are on regular Village holding tank sewer service. While these would see a small saving from the reduced mileage charge on annual septic field pump-outs, these amounts would be small, approximately $20-$50 each annually FIRE PROTECTION The Village already provides fire protection outside of its boundaries at no cost to TTC or its citizens service delivery is not expected to change if the boundary is expanded. However, there are no clear service boundaries, for either structural fire protection or motor vehicle accidents ROAD MAINTENANCE AND STREET LIGHTING The Village does not currently provide any road maintenance outside of Village boundaries. TTC maintains the Foxpoint roads (3.4km) and the Finance Building Road (0.8km) on TTC lands with private TTC contractors. These contracts currently cost TTC $19,990 for a total of 4.2km, or $4,759 per km. However, the Village does provide snow clearing on TTC lands located within the current boundary. If the boundary is expanded, it is assumed, to be consistent across the municipality, that the Village would be accepting responsibility for this additional 4.2km of road, and up to 6.7km if the extended Sawmill Road is maintained. Currently the Village charges an hourly rate for steaming culverts outside of the municipal boundary. In 2012 this generated an additional $750 in revenue for the Village from servicing lands inside the proposed boundary. With a boundary extension the municipality would no longer charge an hourly rate for this service and therefore would no longer gain this revenue. The Village currently only pays the cost of street lighting inside the municipality. Along with road maintenance, it is assumed, to be consistent across the municipality, that the Village would be accepting responsibility for the cost of lighting the roads on TTC lands such as Foxpoint Subdivision. This currently costs TTC $14.88/month for each of four lights, or $714 total annually PARKS AND RECREATION The Community of Teslin Recreation and Contribution Agreement outlines the responsibilities of TTC and the Village regarding the provision of recreational services. Under that agreement, TTC is required to contribute 14 P age

19 on an annual basis $25,000 for programming and $40,000 for half the wages and benefits of a recreation programmer. The Village matches this contribution to provide recreation services. TTC residents living outside of the Village boundary have access to the same recreational programs, and at the same user fees, as residents living within the current boundary. As the Agreement does not reference the boundary and extends until 2016, it is understood that if the boundary were to be expanded, TTC would still make these financial contributions, at least in the short-term SOLID WASTE The Village currently provides all properties (both those within and those outside the current boundary) weekly residential garbage pick-up for $20/month and twice-weekly commercial pick-up for $45/month. A weekly recycling collection service is provided to all for free. Therefore, there would be no change in garbage collection if the boundary were to be expanded BYLAW ENFORCEMENT (ANIMAL CONTROL) AND INSECT CONTROL Animal control is generally not provided outside of the boundary (only by Yukon Government in exceptional circumstances). It is estimated that the Village would incur an additional $750 in costs, but receive an additional $450 in revenues (penalties and licensing fees), for a net cost to the Village of $ Insect control is also only in the Village and, by manager estimates, would increase by 60% from $1,600 to $2, LAND USE MANAGEMENT AND DEVELOPMENT CONTROL The Village does not currently provide land use management and development control outside of current municipal boundaries. Yukon Government has this responsibility. If the boundary were to be expanded, the Village would assume land use management and development control for an additional 25% of developed land, based on the increase in property numbers. Using the 2013 budget forecasts, it is estimated that the Village would incur an additional $250 in costs, but receive an additional $25 in development permit revenues for a net cost to the Village of $ CEMETERY The community cemetery is owned and managed by TTC but serves the entire community at no cost, both those within and outside the current boundary. This is not expected to change with boundary expansion. However, responsibility for the future shoreline stabilization likely to be necessary at this site is unknown SUMMARY Extending the Village s boundary would appear to have limited impact on service levels. Those properties that would be brought into the Village under the proposed boundary expansion already receive a 14 Estimate of costs = $2, (2012 actuals)/157 dwellings = $17.10/dwelling; assume a total of 44 new dwellings within new boundary; $8.94 x 44 = $750 Estimate of revenues = $1,610 (2012 actuals)/157 dwellings = $10.25/person; assume a total of 44 new dwellings within new boundary; $10.25 x 44 = $450 Page 15

20 comprehensive suite of services from the Village. The most significant change in the level of service would be the increase in water delivery from once a week to three times a week. The most significant change in service responsibility would be for the roads on TTC lands e.g. Foxpoint Subdivision. Table 3.3 summarizes the changes in service levels that would be seen in the expansion area and the financial impacts on the Village, TTC and its citizens, both costs and savings. In this first iteration, prior to any alternative direction, for the sake of simplicity, the estimates assume that the Village would simply take over the TTC roads contracts on those lands, continuing the current mode and standard of service. In total, changes to service levels, loss of delivery surcharges and extended responsibilities are expected to cost the Village $45,430 per year. The savings to TTC and its citizens (due to the elimination of service delivery charges for water and sewer) would be $33,030 per year. Table 3.3: Service Delivery Impacts on Properties within Boundary Expansion Area Water Sewer Service Anticipated Change in Level of Service Increase delivery from 1 to 3 times/week No change Estimated Impact on Village Loss of $10,640/yr. in delivery charges Estimated additional cost of $9,360/yr. for more frequent delivery Estimated additional revenue of $2,845/yr. for sale of water Loss of $5,300/yr. in mileage charges Estimated Impact on TTC and Its Citizens Elimination of $9,600/yr. in delivery charges Additional cost of $2,845/yr. for water purchases Elimination of $5,300/yr. in mileage charges Fire Protection No change $0 $0 Road Maintenance and Street Lighting Parks and Recreation No change. TTC roads continue with same mode and standard of maintenance as now. No change Estimated additional cost of $20,700/yr. for TTC roads and street lighting Estimate loss of $750/yr. revenue for steaming culverts $0 (Same level of funding provided by TTC to the Village as per Recreation and Contribution Agreement) Estimated saving of $20,700/yr. for TTC roads and street lighting Estimate saving of $750/yr. revenue for steaming culverts Solid Waste No change $0 $0 $0 Bylaw Enforcement (Animal Control) & Insect Control Will be provided none provided currently Estimated additional cost of $1,300/yr. to enforce dog control bylaw (net of fees received) & spread insecticide Estimated fees and fines of $450 will need to be paid Land Use Management and Development Control Will be provided none provided currently Estimated increased cost of $225/yr. to manage larger land base Estimated development permit fees of $25/yr. Cemetery No change $0 $0 Total Cost of $45,430 Saving of $33, P age

21 4.0 Property Taxes 4.1 Government of Yukon The Yukon Assessment and Taxation Act and Regulations 2012/19 set the property taxation rates for the Y66 taxation area in which the proposed boundary expansion sits. As stated in Table 4.1, the 2012 rates were: Table 4-1: Government of Yukon 2012 Property Taxation Rates Property class Effective Tax rate Tax rate with exemption Residential 0.66 % 0.8% with a 17.5% exemption Non-Residential % 0.67% with a 7.5% exemption Agricultural % 0.52% with a 19% exemption Minimum $100 Property taxes are paid to Government of Yukon by TTC with respect to Settlement Lands in the peripheral expansion area, with the exception of the exempt Unimproved Rural Settlement Land. 4.2 Village of Teslin Property Taxation By-Law 2013, sections 2-4, set the 2013 taxation rates within the Village. As stated in Table 4.2, the 2013 property tax rates are: Table 4-2: Village of Teslin Property Taxation Rates Property class Effective Tax rate Residential 1.23% Commercial 1.27% Minimum $125 Property taxes are paid to Village of Teslin by TTC with respect to Settlement Lands in the Village. Pursuant to the TTC Final Agreement no taxes would be payable on the exempt Unimproved Rural Settlement Agreement brought into the municipality until such time as a service agreement is in place. Government of Yukon and Government of Canada pay grant-in-lieu of taxes (GILT) rather than property tax but the amount is the same. Two significant properties straddle the existing boundary, the Government of Yukon airport and the TTC Retained Reserve (Teslin Post). The airport is wholly included in the Village for taxation purposes but the TTC property is currently split between the Village and the peripheral Y66 Government of Yukon taxation area. The assessed value of this property for 2012 taxes was split $816,470 to Y66 and $4,906,940 to the Village for 2012 tax payments of $4, and $60, respectively. There are 5/6 dwellings (the boundary may bisect one) in the Y66 section, although the tax roll only identifies one. Page 17

22 4.3 Impacts Table 4-3 below shows, for the properties within the proposed expansion area, the current net tax receipts/payments, future net tax receipts/payments under the expansion, and the best estimates of the net impact of the expansion for each government and for the private property owners as a whole. This assumes a steady state of development footprint and no change in tax rates, Table 4-3: Estimated net property tax flows before and after proposed expansion Tax/GILT Current Tax/GILT Post-Expansion Expansion Impact Village of Teslin $0 Receives $100,020 Gains $100,020 Teslin Tlingit Council Pays $42,452 Pays $92,229 Loses $49,777 Private Pays $3,633 Pays $7,543 Loses $3,910 Net Community Impact Pays out $46,085 Receives $248 Gains $46,334 Government of Yukon Receives $46,085 Pays $17 Loses $46,102 Government of Canada $0 Pays $232 Loses $232 Village of Teslin would receive an extra $100,020; Teslin Tlingit Council 15 would pay an extra $49,777 and private owners a cumulative extra $3,910. Government of Yukon would relinquish $46,102 in revenue. The Net Community Impact shows the total net financial impact of property taxation on the community as a whole (Village of Teslin, Teslin Tlingit Council and private), being the sum of the first three rows. The proposed expansion would result in an estimated net positive impact to the local community as a whole of $46,334 as tax levies are redirected from Government of Yukon to Village of Teslin. Detailed tables of all the properties included in the proposed boundary expansion area and estimates of the property tax impact on each can be found in Appendix A2. 15 Three TTC properties are actually privately owned on 100-year leases and pay their own taxes. These were not specifically identified so are included in the TTC total. 18 P age

23 5.0 Senior Government Grants 5.1 Comprehensive Municipal Grant (CMG) Government of Yukon provides an annual Comprehensive Municipal Grant (CMG) to each of the municipalities, to be used at their discretion. Determinants include: 1. Base amount; 2. Population; 3. Dwellings; 4. Cost of living (Whitehorse CPI and community special price index); 5. Asset maintenance (Asset book values and accumulated amortization); and, 6. Property tax room (Residential and non-residential). 16 The Village would acquire no new significant book value assets by result of the expansion. 17 The only determinants that would change as a direct result of the expansion are the dwellings number and the property tax room. Table 5-1 shows the impact of each, assuming a steady state of development footprint. Table 5-1: CMG impacts as a result of boundary expansion and continued steady state development Determinant Change Grant Impact Dwellings +39 $53,625 Residential tax room $3,872,730 ($15,491) Non-residential tax room $3,500,100 ($11,726) The net impact of the number of dwellings and the property tax room on the basic CMG grant amount would be an increase of $32,334. However, under the new CMG arrangements introduced from 2013 forward, the Village is already receiving a transitional amount of $57,184 to ensure there is no net reduction in CMG from the 2012 level, an assurance provided by Yukon Government to all the municipalities. The increase in the CMG grant calculated by the formula as the impact of the boundary expansion would therefore just be to reduce this transitional amount by $32,334, from $57,184 to $24,850. Potential impact There is no immediate change in comprehensive municipal grant as a result of the boundary expansion. In the future, in the event of a small number of very high value properties being developed in the expanded area, significantly increasing the tax room assessment relative to the dwellings and residents, this could impact negatively upon the CMG. However, the actual property tax revenue from such an eventuality would likely more than replace any grant loss, resulting in a net gain. 16 Also known as property tax assessment. 17 An exception would be if the Village takes ownership of an upgraded and extended Sawmill Road Page 19

24 5.2 Gas Tax Yukon receives $15 million a year from the federal government for the Gas Tax Fund. Funds can be used to build environmentally sustainable municipal infrastructure to help ensure cleaner air, cleaner water and reduced greenhouse gas emissions. Eligible project categories include: Public transit; Water and wastewater management; Solid waste management; Community energy systems; Active transportation infrastructure, such as bike lanes; and, Local roads, bridges and tunnels that enhance sustainability outcomes. For the four years of , the Village receives $876,792 ($219,198 per year) and TTC receives $1,152,934 ($288,233 per year). Funds are distributed for specific projects subject to application and demonstration of eligibility and can be used in any of the years as need and planning determines. The municipal and First Nation allocations are made by agreement, rather than any specific formula. Nevertheless, it must be considered that a change in the status, size and infrastructure management of the community through the expansion of the municipality could lead to an argument for a change in these allocations, to the benefit or loss of either government. Potential impact Gas tax fund allocations may change by uncertain amounts in future due to boundary expansion. 5.3 Building Canada The Building Canada Fund began in 2007, and is delivered by the Government of Canada. It was intended to fund priority infrastructure projects to drive economic growth, achieve environmental goals, and build strong, sustainable communities. The government renewed infrastructure funding in 2013 with the announcement of the New Building Canada Fund. The Building Canada Fund is made up of three components: Community Improvement Fund- Consists of an indexed Gas Tax Fund and increased GST Rebate for Municipalities; New Building Canada Fund- Support infrastructure projects of national, regional significant; and, P3 Canada Fund- Funding for infrastructure delivered through public-private partnerships. The Yukon Territory received $182.9 million through the program in the seven years of the original funding. 18 Yukon Government undertook extensive community consultations in 2009 to develop the Yukon Infrastructure Plan that identifies short and long-term infrastructure priorities for Yukon, based on need. There are no specific formulaic or agreed allocations to communities, based on size or other factors, so no change in community access to Building Canada can be anticipated P age

25 6.0 Financial Implications 6.1 Summary of Financial Impacts In total, the Village is expected to experience a gain of $54,590 if the boundary is expanded as proposed. TTC is expected to experience a loss of $22,702. TTC Citizens would gain $6,585. These financial impacts reflect the current status of development, and assume all properties and residents inside the expanded boundary would receive the same levels of services including Village maintenance of roads on TTC lands. These are best estimates based on the information provided by the Village, TTC and Yukon Government and are presented for discussion purposes only. Negotiation of any future service agreements should be based on further detailed analysis once the full and final scope and timing of the proposed boundary expansion has been determined. Table 6-1: Summary of Financial Implications of Boundary Expansion (annual) Village of Teslin Teslin Tlingit Council TTC Citizens Property taxes $100,020 ($49,777) $0 Service Provision Sewer pump out mileage charges ($5,300) $1,800 $3,500 Water delivery charges ($10,640) $4,800 $4,800 Water meter charges $2,845 ($950) ($1,265) Increased water service ($9,360) Additional roads maintenance & lighting ($21,450) $21,450 $0 Additional animal control (net of fees) ($1,300) $0 ($450) Additional land management ($225) ($25) $0 Cemetery No change No change No change Grants CMG No change N/a N/a Gas Tax No change No change N/a Building Canada Fund N/a N/a N/a Total $54,590 ($22,702) $6,585 A residential property that is brought into the municipal boundary with a net taxable value of $100,000 is expected to pay an additional $450 in property taxes (after Homeowners Grant), representing a 136% increase, but would save $935 in service fees, for a net saving of $485 and an increased service level. Table 6-2 illustrates the potential financial impact on a representative property brought into the municipal boundary. Page 21

26 Table 6-2: Summary of Impact of Boundary Expansion on a Representative Single Family Development ($100,000 net taxable value) Costs Before Costs After Change Notes Property Taxes $330 $780 ($450) Sewer Mileage Charge Water Delivery Charge $415 (Three pump outs a month assume property is 6 km out of town) $520 ($10 for each weekly delivery) 6.2 Key Considerations $0 $415 $0 $520 Total Saving $485 (With 50%, or $450 homeowner grant) Delivery would increase from once to 3 times a week The financial analysis in the preceding sections is based on a number of assumptions, and provides a highlevel assessment of financial impacts the Village and TTC are expected to experience today. While it is critical to understand these immediate financial impacts, it is just as important to understand future financial implications. The following factors can alter the financial impact of boundary expansion (for the Village and/or TTC), and should be considered: Road cost uncertainties In this first iteration, prior to any alternative direction, for the sake of simplicity, the estimates assume that the Village would simply take over the TTC roads contracts on those lands, continuing the current mode and standard of service. However, there is a considerable discrepancy between these per/km road costs provided by TTC and those experienced by the Village elsewhere and therefore anticipated in the expanded area, a concern to the Village. This may be due to different accounting policies for particular services and costs, or simply differences in acceptable service standards because Foxpoint is a country residential neighbourhood with lesser needs. Table 6.3 shows a breakdown of current Village road costs, totalling $104,000 or $10,400/km. Extrapolating this rate would add $24,000 to the estimates, making a total of $43,800, to maintain the 4.2km of Foxpoint Subdivision and the Finance Building Road. This would eliminate much of the estimated overall net financial benefit to the Village of the expansion. Table 6.3 also shows estimates for the TTC roads extrapolated from current Village costs for a number of other possible servicing and accounting standpoints, to assist the governments in a more detailed discussion of the possible future costs to the Village, depending on the agreed service levels and accounting. There is a wide $33,500 range in possible costs, from $10,300 to $43,800. From another angle, the TTC contract costs are also lower than standards used by Aboriginal Affairs and Northern Development Canada as well 19. Using those rates it is estimated to cost $22,680/year. 19 Based on AANDC s Cost Reference Manual The formula is: O&M Gross Funding Requirement = (Base Unit Cost) x (City Centre Index) x (Zone Remoteness Index) x (Asset Count) Gravel = $5,015.33/km x 1.02 x 1.03 x km = $5.27 / metre Paved = $4,252.37/km x 0.88 x 1.02 x km = $3.82 / metre 22 P age