Village of Dewberry Viability Report

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Village of Dewberry Viability Report September 2020 1 Classification: Public Municipal Affairs, Government of Alberta Village of Dewberry Viability Review Report September 2020 © Government of Alberta www.municipalaffairs.ca Digital Version ISBN 978-1-4601-4839-6 Printed in Canada Viability Review Report | Village of Dewberry 2 Classification: Public Table of Contents Executive Summary ....................................................................................................................... 4 Review and Findings ...................................................................................................................... 9 Municipal Backgrounds ................................................................................................................ 9 Municipal Performance Indicators.............................................................................................. 10 Village of Dewberry Viability Review Report .............................................................................. 11 Sustainable Governance ........................................................................................................ 13 Administration and Operations ............................................................................................... 17 Finances, Assessment, and Taxation .................................................................................... 21 Infrastructure .......................................................................................................................... 27 Services .................................................................................................................................. 33 Regional Cooperation ............................................................................................................. 38 Community Well-Being ........................................................................................................... 41 Financial Summary ....................................................................................................................... 45 Appendix A: Recommendations for Viability ............................................................................ 46 Appendix B: Performance Indicators ......................................................................................... 48 Appendix C: Village Infrastructure ............................................................................................. 50 Appendix D: 10-Year Capital Plan ............................................................................................... 58 Appendix E: Financial Position ................................................................................................... 59 Appendix F: Summary of Public Input ....................................................................................... 60 Appendix G: Vote on Dissolution ............................................................................................... 62 Additional Information ............................................................................................................... 63 Viability Review Report | Village of Dewberry 3 Classification: Public Executive Summary Alberta Municipal Affairs prepared the Village of Dewberry Viability Review Report based on information collected from the Village of Dewberry (village) and the County of Vermilion River (county). The draft report was reviewed by elected officials and administration from the village and county, and municipal officials representing four Alberta municipal associations. At the time of writing, the most recent financial information available for the village is from the 2018 audited financial statements. The Viability Review Report describes two options for the future of Dewberry: 1. The Village of Dewberry remains an incorporated municipality and council addresses the recommended actions in this report according to the direction of the Minister of Municipal Affairs, and 2. The municipal corporation of Dewberry dissolves and Dewberry becomes a hamlet in the County of Vermilion River. The report highlights the major similarities and differences under these two options answering the questions: What would be the same or different if Dewberry remains a village? What would be the same or different if Dewberry becomes a hamlet in the County of Vermilion River? Continuing as a Village With the approval of a viability review for the village, the Minister has expressed that Dewberry’s current state must be improved to ensure a viable future for the community. Should electors vote to remain as a municipality, the Minister of Municipal Affairs will direct the village to take actions to improve its viability. Governance: The council for the Village of Dewberry would continue to consist of three members elected at large by village residents and the mayor would be appointed from within council at the annual organization meeting. The council would be expected to address the recommended actions in this report. Administration: The village council would continue to be responsible for the hiring and evaluation of the CAO, who is responsible for overseeing the administration and operation of the village. Assessment and Taxation: In 2020, the village set the general municipal residential and non-residential tax rates at 15.07 mills. This equates to $15.07 for each $1,000 of assessed property value. Many small villages experience difficulty in collecting taxes if the rate exceeds 13 mills. To continue the operation of the village at current service levels, the village may be able to maintain property taxes at the current level with careful cost management. The village must address tax arrears through the legislated tax recovery process. Viability Review Report | Village of Dewberry 4 Classification: Public Finances: Since the village reported an overall operating deficit in 2018 (See Appendix E), it is not anticipated that property taxes could decrease in the foreseeable future while ensuring costs are fully covered. Despite the village having a small staff, costs associated with administration of the village consumed over 25 per cent of the village expenses in 2018, which also represents 74 per cent of total municipal property taxes in 2018. Village of Dewberry Operating Expenses 2018 Parks & Recreation $0 Land Use Planning, Housing, Rentals $1,005 Ambulance & Disaster Services $1,286 Culture, Library, (Museum?) $4,997 Family & Community Support Services $5,681 Legislative - Council $18,845 Fire and By-law Enforcement $33,992 Waste Management $35,716 Wastewater Treatment & Disposal $52,483 Roads, Walks, & Lighting $83,591 Water Supply & Distribution $108,984 Administration $128,467 Total Expenses 2018 $475,047 $0 $100,000 $200,000 $300,000 $400,000 $500,000 Services: The village would continue to have sole responsibility for provision of services and programs. The village would require similar levels of funding as now to continue to provide these services. As associated costs increase, residents can anticipate increases in utility fees and property taxes. Infrastructure: Most municipal infrastructure requires repair and replacement during its lifecycle, and municipalities typically carry out these investments on an ongoing basis to spread out the associated costs. Over the five-year period (2014-18), the village’s capital spending was less than the depreciation of its assets indicating that the village has probably not addressed infrastructure needs on a regular basis. Recent capital projects have been funded solely through federal and provincial grants. From 2015 to 2018, the village participated in an infrastructure study completed with neighbouring municipalities. In 2019, as a municipality undergoing a viability review, the village received $120,000 through the Alberta Community Partnership grant program to complete an infrastructure study to determine the state of the village infrastructure and develop a 10-year capital plan. The study was completed in January 2020 and identifies repairs, ongoing maintenance, and upgrades currently required for existing village infrastructure. The combined infrastructure audits indicate that the village has infrastructure deficiencies of approximately $5 million, inclusive of the expansion of the lagoon at an estimated cost of $1.3 million, to be addressed over the next ten years to maintain and upgrade current village infrastructure. Funding sources available for capital infrastructure projects include federal and provincial grants, utility fees, property taxes, and borrowing within the village’s debt limit. Viability Review Report | Village of Dewberry 5 Classification: Public Based on the village’s 2018 audited financial statements, the village’s debt limit is $691,038 with an annual debt service limit of $115,173. The village currently has no debt incurred. If the village had had an annual debt payment of $115,000 in 2019, the additional required revenues for the annual debt payment would have increased 2019 property taxes by 8.9 mills, equivalent to an increase of $712 on a property assessed at $80,000. The 2019 financial statements are needed to confirm the current state. The village council approved a 2020 capital budget in June 2020. The village proposes to fund the projects with $414,729 in federal and provincial grants. Property Tax Comparison $1,600.00 $1,400.00 $1,200.00 $1,000.00 $800.00 $600.00 $400.00 $200.00 $- Village of Dewberry County of Vermilion River Municipal/Urban General Tax Urban Hamlet Tax Recreation general Recreation Dewberry
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