2022-2026 financial plan overview

Photo Caption here

2022-2026 Financial Plan OverviewJerry W. DobrovolnyCommissioner/Chief Administrative Officer

Dean RearGeneral Manager, Financial Services/ Chief Financial Officer

5.1

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2022 – 2026 FINANCIAL PLAN OVERVIEW

2

Short-term Relief for Households• Leverage supported tools to create short-term action plan (1-2

years)• Fully evaluate 30 Year amortization for NSWWTP

Maintain Current Goals and Objectives• Continue work on strategic and long-range plans• Optimize capital plan timing and identify deferment opportunities• Evaluate effects of more restrictive lawn watering regulations• Explore demand side management options for liquid waste

Realize New Opportunities• Partner on projects to increase affordable housing • Reduce GHGs • Help drive economic recovery

Board direction from April workshop

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3

6.4% Prior Projection for 2022 Budget

$38 Increase for the average household in 2022(Water: $6, Liquid Waste: $25, Solid Waste: $4, MVRD: $3)

$612 Average annual costs for all Metro Vancouver services

3.5% Proposed 2022 Budget

$21 Increase for the average household in 2022(Water: $4, Liquid Waste: $8, Solid Waste: $3, MVRD: $6)

$595 Average annual costs for all Metro Vancouver services

2022 Budget – Bottom Line

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2022 Budget - Addressing Board Priorities2022 – 2026 FINANCIAL PLAN OVERVIEW

• Implementing the Clean Air Plan to meet 2030climate targets and improve air quality

• Incentivizing Inflow and Infiltration reductions

• Accelerated investment in affordable housing

• Integrating land use and transportation planning

• Accelerated action on Regional EconomicProsperity

• Improving seismic resiliency of the water system

• Advancing long term water source supply capacity

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2022 Budget – Addressing Organizational Needs

• Support services for capital program delivery

• Indigenous relations• Internal requests for support have tripled

• Project Delivery and improved project management

• Asset management


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TOOLBOX

6

Use of Reserves Reduce Payas-you-go

Capital Plan Deferrals

ContinuousImprovement

Demand Side Management

Debt Amortization

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Reliance on Annual SurplusesUSE OF RESERVES

7

• Applied annual surplus in excess of operating reserves minimums to reduce upward pressure on levies and tax requisition

• $8M for 2022• In accordance with the Operating, Statutory and Discretionary Reserves

Policy

• Impact is one time only• Pressure intensifies on future levies and tax requisitions

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Policy VarianceREDUCING PAY AS YOU GO

8

• Contributions to capital funding from the Operating budget

• Reduced by $11M from prior year

• Easy to cut, difficult to add back

• Long term impact is more borrowing• Interest costs• Rate risks

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CAPITAL PLAN DEFERRALS

9

• Review of over 300 projects

• In the prior cycle, over $400 million in capital expenditures deferred

• This cycle, a further $450 million of capital expenditures have been deferred

Project Review

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OverviewCONTINUOUS IMPROVEMENT

Initiative Outcomes

LIWWTP Effluent Heat Recovery$415k / year increase in revenue from Renewable NaturalGas.1,000 t / year regional reduction in GHG emissions.

In-House Developed Effluent Mixing Models $150k / year reduction relative to cost for modellingperformed by Consultants

Increased in-house Project Managementand Field Quality Control / Assurance

$2M / year reduction relative to outsourced engineeringwork by Consultants

Project Management Framework Improved project performance, project oversight andtransparency.

Project Controls insourcing/optimization of project support for HVRC projects $750,000 Cost Avoidance, Operating

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OverviewCONTINUOUS IMPROVEMENT

Initiative Outcomes

Ozone optimization at Coquitlam Water Treatment Plant

$230k / year reduction in electricity and oxygen costs;Reduced greenhouse gas emissions by 17,200 kg CO2eper year

Automation of Statutory Financial Statements

$120,000 in annual staff time savings and reduced auditfees.

Short-Term Financing and Cash Management

$2,000,000 in annual interest cost savings, mitigate liquidityrisk and optimize cash position.

New recycling depot funding modelAllows for recycling depots at all Metro Vancouver recyclingand waste centres while supporting municipalities withdepots and reducing municipal costs by over $1m / year

New organics management contracts $2m / year regional cost reduction while maximizingorganics system resiliency

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12

DEMAND SIDE MANAGEMENT

• Continued Emphasis on Water Conservation• Necessary to delay need for growth infrastructure• Continue practice of water rate increase being

applied to high season

• Liquid Waste – Develop Wet Weather Billing• Incentivize Inflow and Infiltration reductions at the

member level• Manage system capacity• Delay need for additional infrastructure

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DEBT AMORTIZATION

13

North Shore Wastewater Treatment Plant

• Board direction to maintainpolicy of 15 year debtamortization

• Recommendation for 30-yearamortization term for theNorth Shore’s share of theNorth Shore WastewaterTreatment Plant Project asrequested

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OVERALL HOUSEHOLD IMPACT 2022 - 2026

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2021 2022 2023 2024 2025 2026

Water District $171 $175 $183 $200 $221 $244

Liquid Waste $273 $281 $324 $379 $452 $543

Solid Waste $60 $63 $65 $68 $71 $74Regional District $70 $76 $85 $88 $89 $91Total Household Impact $574 $595 $657 $735 $833 $952% Change 3.5% 10.4% 11.8% 13.3% 14.3%Prior Year Forecast $612 $656 $710 $784

Prior Year % Change 6.4% 7.3% 8.5% 10.4%

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FUTURE FINANCIAL PLANNING

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• One year budget that utilizes MV fiscal strength to minimize overall impact for 2022

• Continue to work on resolving challenging fiscal issues• Forthcoming major projects• Revenue stream such as DCC’s• Economic uncertainties

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Apr 8 May 8 June/July OctoberBoard Budget Workshop

Council of Councils

Proposed capital plan for input

Recommendedfinancial plan

Oct 20 Oct 23 Oct 29Board Budget Workshop

Council of Councils

Board meeting

PROCESS AND TIMELINE

16

*10 Standing Committees and 3 Advisory Committees (RAAC, RFAC, REAC)

* *

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Financial Plan Overview

View of Vancouver17 of 53

METRO VANCOUVER OPERATING BUDGET

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Overview:• 2021 Operating Budget: $947.9M• 2022 Operating Budget: $1,017.9M (7.4%)• About 1% higher than previously projected for 2022

Drivers:• Increase in Operations averages 3.8% over 5 years• Debt servicing reflective of the capital program, but

favorable rates• Easing contribution to Capital in 2022 - Refocusing in

2023-2026

$- $100 $200 $300 $400 $500 $600 $700 $800 $900 $1,000

$- $200 $400 $600 $800

$1,000 $1,200 $1,400 $1,600 $1,800

2021 2022 2023 2024 2025 2026

Mill

ions

Operations Contribution to Capital Debt ServiceHousehold Impact (Prior) Household Impact (Current)

Expenditures

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METRO VANCOUVER OPERATING BUDGET

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Overview:• Primary funding sources – water sales, sewer levy,

tipping fees, rents, MVRD requisition• Relative stability for primary sources

Drivers:• Significant use of reserves in 2022 to minimize HHI• Anticipated water DCC revenue received and applied

starting 2024, downward pressure on water rate• Assumed partner funding for upcoming major capital

projects, downward pressure on levies/rates

Revenues

$- $200 $400 $600 $800

$1,000 $1,200 $1,400 $1,600 $1,800

2021 2022 2023 2024 2025 2026

Mill

ions

Water Sales Liquid Waste Levy Solid Waste Tipping Fees MVRD Requisitions Housing Rents Other Revenue19 of 53

METRO VANCOUVER CAPITAL PLAN

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• Regional infrastructure investment drives the financial plan and ratepayer impact

• Though there are challenging projects, many have positive financial outcomes

• Kennedy Newton Water Transmission Main• AIWWTP Cogen Power Backup

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$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

$2,000

2021 2022 2023 2024 2025 2026

Mill

ions

Housing Regional Parks Solid Waste Liquid Waste Water

METRO VANCOUVER CAPITAL PLAN

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Overview:• 2020 capital cashflow $1.52B• 2021 capital cashflow $1.38B

Drivers:• Capital projects in progress carried forward• $450M deferred from previous 5 year cashflow• Reflects risks and scope changes where known

Expenditures

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Questions22 of 53

MV Budget Presentation – Housing 2022 - 2026

Heather McNellGENERAL MANAGER, REGIONAL PLANNING AND HOUSING SERVICES

Housing Committee – October 6, 202147308997

Pacific Spirit Regional Park

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2

Metro Vancouver Housing

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3

PROVIDE PRESERVE EXPAND11 PROJECTS

2,300 UNITS

RENEW &

IMPROVE

TENANT PROGRAMS

COMMUNITY BUILDING

Metro Vancouver Housing 10 Year Plan

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• MVH 10 Year Plan implementation• ID Redevelopment and

Expansion Priorities• Manage redevelopment and

expansion projects to pre-construction

• Partnerships and Fundingapplications

• MVHC Policy and Agreements• Regional Policy, Data and Research

• Operations (49 sites)• Capital maintenance• Construct Development

and RedevelopmentProjects

• Tenant Programs• Finance (Tenant Accounts

and Subsidies)

Housing Planning & Policy MVHC

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2022 – 2026 FINANCIAL PLANHOUSING PLANNING & POLICYHeather McNellGENERAL MANAGER, REGIONAL PLANNING AND HOUSING SERVICES



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Supports the implementation of the Metro Vancouver Housing 10-Year Plan and MVHC development projects as well as regional housing priorities and best practice research.

Housing Planning & Policy over the next 5 yearsHOUSING PLANNING & POLICY OVERVIEW

Welcher Avenue Redevelopment

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Key Performance Past Performance (Average) Expected Performance 2022

Pitt Meadows Civic Centre site (municipal partner site)

10%

New municipal partner site (EOI Round 2)

n/a

Southwynde Ave (municipal partner site in Burnaby)

10%

Housing Planning and PolicyPERFORMANCE METRICS

75%

10%

60%

% of Design Complete for MVHC Development Projects (pre-construction)

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2022 Initiatives and OutcomesCONTINUOUS IMPROVEMENT

Initiative Outcomes

Secure portfolio-level funding from provincial and federal governments to support 10-year Plan

Leverage MVHC investment and secure funding to deliver more housing and/or deeper affordability

Property management policy & info. package & proactively market MVH to manage affordable units developed through inclusionary housing policies

Advance towards goals for MVH-managed housing units; provide qualified and consistent property management services for newly developed affordable housing units; expanded service

Develop new policies for income testing for new Low End of Market tenants, and to support new affordability baseline

Improved accountability in providing affordable rental housing for families, seniors and others experiencing barriers to housing

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Housing Planning and Policy Financial PlanBUDGET OVERVIEW

2022 MV Budget, $1,017.9M

Housing Planning and Policy,

$6.35M

2022 Operating Budget Breakdown – Housing Planning and Policy

Communications Program Allocation of Centralized Support Costs

Contribution to Affordable Housing Re-development Reserve Contribution to Affordable Housing Development Reserve

Housing Planning and Policy

$4M$1M

$1.3M

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Overview:

Drivers for Change:

2021 Operating Budget:2022 Operating Budget:

2021-2025 “Function” Financal Plan

$6.6M$6.4M

3.1% decrease

Proposed increase to tax requisition of $2M in 2023 to support new and re-developmentDecrease in SIF spending (projects completed)

5 5

7 7 7 7

012345678

0123456789

10

2021 2022 2023 2024 2025 2026

$ M

illion

s

Operations Household Impact

Housing Planning and Policy Financial Plan

2021 – 2026 Housing Planning and Policy Financial Plan

OPERATING EXPENDITURES

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Overview:

Drivers for Change:



Proposed tax requisition increase (2023) to support more development via municipal partnershipsDecrease in SIF funding (projects completed)

0123456789

10

2021 2022 2023 2024 2025 2026

$ M

illion

s

MVRD Requisitions Transfer from Sustainability Innovation Reserves

Housing Planning and Policy Financial Plan

2021 – 2026 Housing Planning and Policy Financial Plan

OPERATING FUNDING

$6.6M$6.4M

3.1% decrease

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2022 Advance development priorities Confirm new site (EOI Round 2)

Manage 6 projects through design & approvalsIdentify new site and develop concept

2023

2024

2025

2026

Advance development prioritiesUpdate MVHC policies

Advance development priorities

Advance development priorities; confirm new site (EOI Round 3)

Manage 5 projects through design & approvals

Manage projects through design & approvals Support 2 projects through rent up

Manage projects through design & approvals Support 2 projects through rent up

Manage projects through design & approvals Support 2 projects through rent upIdentify new site and develop concept

Housing Planning and Policy 2022 - 2026OPERATING HIGHLIGHTS

Advance development prioritiesReport out on 10 yr plan progress

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2021 2022 2023 2024 2025 2026

$6.6

$5

$6.4

(3.1%)

$5

1.9%

(1.2%)

$8.2

29.8%

$7

29.4%

(1.6%)

$8.3

0.3%

$7

(1.7%)

(0.6%)

$8.3

0.2%

$7

(1.2%)

(1.0%)

$8.4

1.5%

$7

0.1%

N/A

HOUSING PLANNING AND POLICY FINANCIAL PLAN SUMMARY

Total Expenditures ($ Millions)

% Change

Household Impact ($)

% Change

Prior Cycle Household Impact Change (%)

MVRD Requisition ($ Millions)

% Change

$6.0 $6.3

3.7%

$8.2

31.9%

$8.3

0.3%

$8.3

0.2%

$8.4

1.5%

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2022 – 2026 FINANCIAL PLANMETRO VANCOUVER HOUSING CORPORATIONHeather McNellGENERAL MANAGER, REGIONAL PLANNING AND HOUSING SERVICES



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Guided by the Metro Vancouver Housing’s 10-Year Plan: Provide safe, inclusive, diverse and affordable homes in communities throughout the region; Preserve existing portfolio through capital maintenance to support affordability & improve sustainability and accessibility; Expand through redevelopment and partnerships with member jurisdictions and other levels of government.

Metro Vancouver Housing over the next 5 yearsMVHC OVERVIEW

Somerset Gardens Complex

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Total RGI units rented to subsidized tenants

33% (3 year average)

Metro Vancouver Housing Communities with tenant associations

63% (3 year average, 30 sites)

Vacancy percentage (based on number of rentable units)

0.2% (3 year average)

MVHCPERFORMANCE METRICS

33%

65% (2022, 32 sites)

0.2%

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Reduce GHG emissions 10.2 grams CO2 Emissions per m2 (2010 baseline)

Welcher Avenue Redevelopment

2021: 10% Construction

Kingston Gardens Phase I Redevelopment


MVHCPERFORMANCE METRICS

7.45 grams CO2 Emissions per square metre



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CONTINUOUS IMPROVEMENT

Initiative Outcomes

Expand through Redevelopment – add 736 new & redeveloped units in 5 Year Financial Plan Horizon

• Kingston Gardens Phase 1, Surrey – Construction 75%• Welcher Avenue, Port Coquitlam – Construction 75%• Heather Place B, Vancouver – Detailed design – 95%• Eastburn Square, Burnaby – Detailed design – 60%• Malaspina Village Phase 1, Coquitlam – OCP Application

100%, Rezoning 75%, Design 50%

Build New Amenity Space to Expand Free Food Program

Expand the free food program for vulnerable tenants –improved and expanded service, and provide new gathering place for community events and other tenant programs; leverage funding programs to improve service

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CONTINUOUS IMPROVEMENTInitiative Outcomes

Accelerate Delivery of Large Capital Rehabilitation Projects through Financing

Front end projects to leverage low interest rates and mitigate commodity and service cost increases

• Strathearn Court, Vancouver – Construction 5%• Evergreen Downs, Delta – Construction 100%• Kelly Court, Vancouver – Construction 80%

Pembina REFRAMED

• Develop replicable approach to whole-building retrofits to improvetenant comfort, well-being and safety, extend the life of the asset,reduce operational costs, improve energy efficiency, and reduceGHG emissions at 3 sites

Innovations in Technology to improve efficiency and service levels

• Implement work order system for capital maintenance projects toimprove timelines & decrease overall costs

• Develop online portal for tenants to submit documents andcorrespondence, 50% completion by end of 2022

• Improve/update existing housing website

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BUDGET OVERVIEW

2022 MV Budget, $1,017.9M

MVHC, $54.8M

2022 Operating Budget Breakdown – MVHC

Property Operations Operational AdministrationSite Administration Allocation of Centralized Support CostsAsset Maintenance and Replacement Debt ServiceContribution to Reserve

MVHC Financial Plan

20

22.9%

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Overview:

Drivers for Change:



$53.7M$54.8M

2.1% increase

• Expansion of portfolio by 736 units • Inflation for goods and services (1.9%)• Increases for janitorial services, waste

removal, utilities, property insurance, and landscaping, offset by property tax savings of $2.8M

0

20

40

60

80

100

2021 2022 2023 2024 2025 2026

$ M

illion

s

Contribution to Reserve Contributions to Capital Replacement Reserve

Debt Service Operating Programs

MVHC Financial Plan

2021 – 2026 MVHC Financial Plan

OPERATING EXPENDITURES

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Overview:

Drivers for Change:



• Expansion of portfolio by 736 units • Projected inflationary rent increase

of 1.9% • Increase in financing to fund

rehabilitation projects

0102030405060708090

2021 2022 2023 2024 2025 2026

$ M

illion

s

Housing Rents Housing Mortgage and Rental SubsidiesOther External Revenues Financing ProceedsTransfer from Reserves

MVHC Financial Plan

2021 – 2026 MVHC Financial Plan

OPERATING FUNDING

$53.7M$54.8M

2.1% increase

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2022-2026 CAPITAL MAINTENANCE EXPENDITURESCAPITAL MAINTENANCE

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0

5

10

15

20

2022 2023 2024 2025 2026

Milli

ons

2022 – 2026 Capital Maintenance Plan

Manor House Kelly Court Strathearn Court Regal Hotel Le ChateauCrown Manor Minato West Evergreen Downs Somerset Gardens Other Maintenance

Overview:• Funding from Operating Surpluses / Reserve; financing• 2022-2026 Maintenance Plan Cash Flows: $72.9M

Drivers:• Asset Facility Condition Index• Preservation of existing affordable housing • Reduce GHG emissions by 45% (from 2010 levels) by 2030

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Overview:

Drivers for Change:

5 Year Approved

Project Budget

24

$322.5M

2022 - 5 Year Approved Projects’ Budget as of October 2021MVHC CAPITAL BUDGET

2022 MVHC Capital Budget

• Support critical need for affordable housing in the region through redevelopment of existing sites to create additional homes

• Partnerships to deliver additional affordable housing sites across the region

• Welcher Ave. (construction) 63 Units• Kingston Gardens (construction) 85 Units• Heather Place B (planning and approvals) 87 Units• Eastburn (planning and design) 172 Units• Malaspina Phase 1 (planning and design) 85 Units• Southwynde (planning and design) 122 Units• Pitt Meadows (planning and design) 122 Units

Total is 736 new and redeveloped units

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Overview:

Drivers for Change:

2021 Capital Cash Flow:2022 Capital Cash Flow:

• Support critical need for affordablehousing in the region throughredevelopment of existing sites tocreate additional homes

• Partnerships to deliver additionalaffordable housing sites across theregion

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$39.6M$48.3M

22.0% increase

MVHC Capital PlanCAPITAL EXPENDITURES

2022 – 2026 MVHC Capital Cash Flow

020406080

100120140160

2022 2023 2024 2025 2026

$ M

illion

s

Heather Place - Building B Kingston Gardens - Phase 1 Welcher AvenueEastburn Square Malaspina Pitt Meadows Town CentreSouthwynde - Burnaby Projects in Planning

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Overview:

Drivers for Change:

2021 Capital Cash Flow:2022 Capital Cash Flow:

• Developing CMHC Partnership -providing low interest long-termloans

• Pursuing BC HousingPartnership

• Support development throughHousing reserves

• Develop additional Partnershipswith Member Municipalities

26

$39.6M$48.3M

22.0% increase

MVHC Capital PlanCAPITAL FUNDING

2022 – 2026 MVHC Capital Funding

020406080

100120140160

2022 2023 2024 2025 2026

$ M

illion

s

Reserves New External Borrowing Grant

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MVHC Capital PlanCAPITAL PROGRAM OVERVIEW

($ Millions)

Prior CycleCash Flow2021-2025

Cash Flow2021

Adjustments to 2022-2025 Capital PlanCash Flow2026

DraftCash Flow2022-2026

Carry-Forward

Deferrals/Accel. Risk Scope Total

354.4 (39.6) - - 12.3 23.1 35.4 77.8 428.0

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2022 Full building rehabilitation projects (6)Financing of rehabilitation projects

6 rehabilitation projects in various stages of design and construction ongoing in 2022 (282 Homes)Accelerate preservation of portfolio through maintenance

2023

2024

2025

2026

Expand Tenant Free Food Programs

Rent up of 2 redevelopment projects: Kingston and Welcher

Rent up of 2 redevelopment projects: Heather Place B and Civic Centre

Rent up of 3 redevelopment projects: Eastburn, Southwynde and Malaspina

Develop an amenity space to run free-food and other tenant programs

Additional 148 homes added to the Housing portfolio



MVHC 2022 - 2026OPERATING and CAPITAL HIGHLIGHTS

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TENANT OPERATIONS & COMMUNITY BUILDING

Community Building• Tenant Associations• Events and Programs• Tenant newsletters &

information• Crime Prevention• Emergency Preparedness• Community Gardens• Healthy Living Programs• Reducing Energy Use

Tenant Operations• Tenant

Placement• Tenant Support

Services andPartnerships

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2021 2022 2023 2024 2025 2026

$53.7

MVHC 2022 - 2026

$12.4

$54.8

2.1%

$12.7

$60.3

10.0%

$17.4

$66.8

10.7%

$20.2

$68.8

3.1%

$19.6

$76.4

11.0%

$18.8

MVHC FINANCIAL PLAN SUMMARY

Total Expenditures ($ Millions)

% Change

Other Revenues*

Housing Rents ($ Millions)

% Change 2.0% 1.9% 8.5% 5.7% 17.1%

$42.1 $42.9 $46.6 $49.2 $57.7$41.3

% Change 2.4% 37.0% 16.2% (3.0%) (4.2%)

*includes subsidies, other external revenues, financing proceeds, transfer from reserves

Total Capital Expenditures ($ Millions) $39.6 $48.3 $48.2 $105.4 $148.3 $77.8

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Questions?Camosun Bog

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2022-2026 financial plan overview

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