Chapter 1: Executive Summary

In compliance with the Community Charter, Coquitlam City Council adopted the 2023 – 2027 Financial Plan in February 2023 The Financial Plan supports maintaining the delivery of City core services in an environment of significant cost increases while also planning for ongoing community growth and capital investment required to provide public services

In addition to the significant inflationary pressures and volume increases in operational activities related to growth, the City’s operating environment continues to respond to new legislation, additional service demands and public expectations when it comes to the delivery of services to the community The Financial Plan therefore addresses these pressures while also maintaining core service levels, critical foundational supports that ensure quality control as well as good corporate governance

The Financial Plan complements Coquitlam’s Business Plan which, in turn, aligns with the City’s Strategic Plan The corporate Strategic Plan and accompanying annual Business Plan ensure that staff focus on Council priorities and that the City delivers optimal services to its residents The City’s 2023 Business Plan incorporates four themes to guide the City’s priorities in 2023: Balanced Growth and Livability; Equity, Diversity and Inclusion; Reconciliation; and Resiliency The 2023 Financial Plan includes funding to advance initiatives to support these themes as key priorities in 2023

The Financial Plan was developed using best practices, robust policies and financial principles of long-term financial sustainability, stability in property taxation and flexibility to respond to emerging priorities and opportunities It is based on robust financial forecasting and analysis, staff input, Council direction, and public feedback collected over the year through a variety of public engagement opportunities

The results of public input on the budget highlight that the majority of the respondents continue to prefer retaining existing service levels and associated funding allocations

The Plan therefore supports a balance between maintaining existing services and making investments for the future to ensure the City is able to respond to the pressures and opportunities of a growing community, all while preserving the City’s financial flexibility and ongoing fiscal stability

With this in mind, the 2023 – 2027 Financial Plan incorporates an average property tax increase of 5 48% This is made up of 3 63% to maintain the current service levels, which have been impacted by the recent significant inflationary increases, and includes 1 07% for the federallynegotiated RCMP wage settlement Another 0 58% is for the investment in enhancements to public safety, with 0 77% for infrastructure sustainability, and a further 0 5% to support priority areas required for the effective delivery of core City services and to support emerging and new priorities The solid waste collection rate increased by 4%, the water utility rate increased by 4%, and the sewer and drainage utility rate increased by 4% For an average residential home, the total municipal property taxes and utility levies will be approximately $3,834 in 2023, an increase of $179 over 2022

Long-term View

A long-range perspective for decision makers provides a basis to avoid financial challenges, stimulate strategic thinking, and drive consensus on the long-term financial direction

The City’s long-range planning continues to support the balance between maintaining core services that residents and businesses expect with growth and development across the City This includes providing the funding for the maintenance, adaptation and timely replacement of the City’s existing assets as well as the ongoing capital investment required to serve the growing community

Continued development in the City’s northeast area is anticipated, where approximately one-quarter of residents new to Coquitlam will reside in the next 30 years, as well as the substantial infill and redevelopment throughout the rest of the municipality, where neighbourhoods are being densified and revitalized following the arrival of the SkyTrain to the City in 2016 To manage this period of significant population growth, major capital investments planned for this and subsequent years include infrastructure and amenities to ensure that all the required municipal services are in place to serve these changing neighbourhoods

As Coquitlam residents and visitors enjoy these new amenities and services, it is important to recognize they come with associated costs that result in increased pressure on the City’s operating budget Though the City receives additional tax revenues from shifting to more compact forms of development, these tax revenues do not occur at the same time as the related expenses As a result, the anticipated property tax increases in the future years of the Plan (20242027) to support the planned level of investment and growth could range from 5% to 9% This volatility is being addressed through the use of various tax stabilizing mechanisms including the use of a Development Stabilization Reserve which will help match growth related revenues to growth related expenses, thus mitigating the projected tax increases to an approximate 6% annually

Coquitlam’s long-term financial planning strategies reflect a responsible and sustainable forward-thinking approach to fiscal planning that seeks to protect Coquitlam’s financial position and ensure adequate reserves to minimize impacts on taxpayers in the future

Capital Investment

The 2023 – 2027 Capital Plan includes a total investment of $631 million over the five-year period supporting the City’s existing assets and infrastructure as well as ensuring new capital infrastructure is in place to support a growing community Balancing capital investment priorities is an inherently challenging task as is, and this year has proven particularly difficult against the backdrop of significant construction cost escalation caused by supply chain disruption, labour shortages and the lingering effects of the COVID-19 pandemic as well as other global economic uncertainty The Plan is supported by long-term funding strategies and includes funding from a combination of Development Cost Charges (DCCs), other developmentrelated revenues such as Density Bonus and Community Amenity Contributions, General and Utilities Revenues, Reserves and Grants

The City owns a variety of assets valued at approximately $4 billion (excluding land) that are used to deliver services to the community The performance of, and access to, these capital assets is vital to the health, safety and quality of life of residents The City continues to invest in the improvement of asset replacement information systems and resources including financial policies that provide funding mechanisms for future asset replacement needs and long-term sustainability In addition, an assessment of the City’s longterm asset replacement requirements and funding in the form of a Corporate Asset Management Update is completed on a bi-annual basis with the most recent update completed in 2022

Based on the 2022 city-wide asset replacement needs assessment, for the next 20–40 years, the gap between the average annual asset replacement optimal funding level and existing annual funding for the assets is calculated at $23 million ($15 million in the General Fund including buildings and $8 million in the Utility Funds) The review was accompanied by a Sustainable Infrastructure Renewal Funding Strategy, which provides a two-pronged approach to ensuring the sustainability of the City’s infrastructure and assets over the long term while balancing the impact on current and future taxpayers The first is to address the funding required for a 10-Year Asset Replacement Capital Plan, which includes required asset replacement projects in the next 10 years, of which the first five years have been incorporated into the 2023 – 2027 Financial Plan The second component is addressing the long-term calculated infrastructure funding gap to support long-term sustainability, which is proposed to be addressed through gradual, reasonable tax and utility rate increases The funding strategy together with the existing Council’s financial sustainability policies enables the City to continue taking steps towards sustaining its existing infrastructure over the long-term

The City recognizes that in the coming years, significant investment will be required in a variety of new infrastructure, community facilities and amenities The strategy for funding capital projects is based on utilizing a combination of balances within the existing City reserves and future development related revenues through leveraging the City’s debt financing sources This includes the City’s top priority project, the Northeast Community Centre (NECC) and adjacent park and plaza Both projects are funded fully by development revenues, which will require debt financing in order to bridge cash flow gaps A debt management strategy has been developed to support the delivery of the project in the near term with debt repayment from future development revenues This includes an initiation of a Loan Authorization Bylaw to authorize the City to seek external borrowing through the Municipal Finance Authority (MFA), should it be determined that future external debt is prudent

The City’s Major Facilities Roadmap, currently under development, will propose sequencing of decisions and necessary investment to support the renewal and replacement of existing, and building of new, recreation, cultural and major civic facilities to deliver the City’s core programs and services for a growing population The Major Facilities Roadmap will be accompanied by a long-term funding strategy that takes into account both financial and resource implications, while ensuring continuity of community services

2023 – 2027 Financial Plan

The revenues and expenditures identified within the 2023 – 2027 Financial Plan fund City services and programs to the levels and standards established by Council, as well as address the requirements of the Community Charter and other regulatory bodies Council has approved initiatives that have been established in accordance with priorities and issues identified by the community and in a manner that adheres to the core principles of fiscal sustainability

The 2023 – 2027 Financial Plan provides an overview of Coquitlam’s community profile and demographics, as well as the City’s governance and organizational structure Coquitlam also has a number of financial policies in place that support its fiscal responsibility and protect the City’s long-term financial sustainability The Plan is centered around the principles in the City’s Capital Funding Framework and the related available funding sources, utilizing debt where needed to bridge cash flows gaps, and within the context of the City’s ability to maintain a reasonable stabilized annual tax impact

This is further supported by the City’s Debt Management Policy, which promotes long-term financial sustainability, maintaining sound financial position, optimizing borrowing costs and ensuring that financial flexibility is maintained in the context of the City’s opportunities and changing service priorities The policy guides the management of the capital financing program and provides a framework to establish prudent financing of the City’s capital and infrastructure needs

The financial details included in the 2023 – 2027 Financial Plan are the Consolidated Statement of Financial Activities, the 2023 Five-Year Consolidated Operating Plan and the 2023 Five-Year Capital Plan In each chapter, examples are provided of how this funding is allocated to support the City’s goals, with particular emphasis on the first year of the 2023 – 2027 Financial Plan

The City regularly reports on its progress towards achieving the City’s strategic goals and how the financial activities and priorities in the budget align with these goals Together, these components provide a comprehensive report on the City of Coquitlam’s financial planning for the next five years The result is a well-formulated approach to financial and strategic management that will enable Coquitlam to meet the needs of the community and move toward achieving its vision of a community where people choose to live, learn, work and play