Report 9(c) — Staff Report: Approval of Major Asset Maintenance Reserve Expenditures (GVPL)

Staff Report to Council

Date: January 16, 2017
Department: Finance
Subject: Approval of Major Asset Maintenance Reserve Expenditures (GVPL)

Background

In 2013 the owners of the Juan de Fuca library branch established a Major Asset Maintenance Reserve to provide funding for high-value maintenance/refurbishment of the library facility. Each member of the branch makes an annual contribution to the reserve and funds are expended on an as-required basis. The objective is to smooth out the budget impact of these major repairs while ensuring that funds are available when needed. The reserve is held by GVPL and spent only with approval of the affected Councils.

Commentary

The attached letter and schedule from the GVPL Chair presents the proposed expenditures for 2017-2023 and the request is for Council approval of the 2017 expenditures totalling $214,000. Council response is requested by January 31st.

The reserve has the necessary funding to pay for the 2017 proposed spending, and indeed, is projected to remain in a healthy position through the 7-year planning horizon in the schedule.

Financial Implications

Langford budgets for an annual contribution to the reserve of $38,428 (varies slightly from year-to-year in accordance with the cost sharing formula). The proposed expenditures will not affect Langford’s contribution.

Options

That Council:

1. Approve the expenditure of $214,000 from the Major Asset Maintenance Reserve in 2017; or
2. Not approve the proposed expenditure from the Major Asset Maintenance Reserve

Respectfully Submitted,

Submitted by:
Steve Ternent, Director of Finance

Concurrence:
Jim Bowden, Chief Administrative Officer

Attachment

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November 3, 2016 — Letter from Chair, Greater Victoria Public Library Board

Kevin Murdoch, Chair, Greater Victoria Public Library Board
[enclosures]

His Worship Mayor Stewart Young and Council
City of Langford
877 Goldstream Avenue, 2nd Floor
Langford, BC V9B 2X8

Dear Mayor Young and Council:

Re: Juan de Fuca Branch Major Asset Maintenance (“JF MAM”) Reserve

As referenced in our Provisional budget cover letter of October 31, 2016 please find enclosed a proposed project plan for projects funded from the JF MAM Reserve. Our recommendation is as follows:

THAT the enclosed project plan be approved by Council by January 31, 2017.

The JF MAM reserve was established in 2013 to fund major building component replacement and is held in trust and administered by GVPL on behalf of the building owners. According to the Library Operating Agreement, the branch portion of building maintenance costs are the responsibility of the Municipality as part of fulfilling its obligation to provide branch premises.

Municipal contributions to the trust fund have been included in GVPL’s Provisional Budget request (see page 4 of Provisional Budget document package). Contributions to the reserve are split between branch (80%) and administrative space (20%). The contributions for the branch portion are paid by the West Shore Municipalities in accordance with each of their share of the GVPL budget, which is based on property assessment and population.

Further to the enclosed project plan, we enclose a Memo which provides additional information on our understanding of the arrangement in place between GVPL, building owners and West Shore Parks and Recreation Society (“WSPRS”). It also references a lapsed agreement between the GVPL Board and the WSPRS relating to cost sharing for non-JF MAM building maintenance costs, including building insurance. Consequently, we make the further recommendation:

THAT the Councils for the Cities of Langford and Colwood, and the Districts of Highlands and Metchosin direct Municipal staff to work with GVPL staff in development of an agreement between the Library Board and the West Shore Municipalities, which outlines the terms of the JF MAM trust fund administration and building maintenance role provided by GVPL.

Sincerely,
Kevin Murdoch
Chair, Greater Victoria Public Library Board

Copies:
Jim Bowden, CAO, City of Langford
Steve Ternent, Acting Director of Finance, City of Langford
Lanny Seaton, Councilor Representative on Greater Victoria Public Library Board
Maureen Sawa, CEO, Greater Victoria Public Library
Donna Phillips, Director of Finance and Facilities, Greater Victoria Public Library

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Major Asset Maintenance Reserve - Planned Projects from Trust Fund

Juan de Fuca Branch Library (JF MAM)

Budget Years: 2014, 2015, 2016, 2017, 2018, 2019, 2020, 2021, 2022, 2025

Planned projects (items shown with the data as presented in the schedule):

• Fire corridor expansion / pony wall relocated — 8,439
• Carpet replacement (CaTS) — Age: 1; Life Span: 15
• Linoleum flooring replacement (CaTS) — Age: 1; Life Span: 15
• Carpet replacement, Branch and Meeting Room — Age: 16; Life Span: 15; 88,554
• Flooring replacement, workrooms / offices — Age: 16; Life Span: 15; 30,000
• Outer automatic doors — Age: 16; Life Span: 15; 7,980
• Meeting room walls and door — Age: 16; Life Span: 15
• Hot water tank — Age: 16; Life Span: 15; 691
• Air Handling Unit #1 — Age: 16; Life Span: 15; 45,000
• Air Handling Unit #2 — Age: 16; Life Span: 15; 45,000
• Air Handling Unit #3 — Age: 16; Life Span: 15; 45,000
• Air Handling Unit #4 — Age: 16; Life Span: 15; 45,000
• Air Handling Unit #5 — Age: 16; Life Span: 15; 45,000
• Air Handling Unit #6 — Age: 16; Life Span: 15; 45,000
• Tile flooring - Lobby — Age: 16; Life Span: 25; 20,000
• Inner auto doors/ branch renovation — Age: 16; Life Span: 20; 40,000 / 20,000
• Branch expansion — Age: 16; Life Span: 25; 300,000
• Roof envelope, including flashing — Age: 16; Life Span: 20; 1,770 / 179,000
• Sky Lights — Age: 16; Life Span: 20; 10,000
• Exterior Patch and Paint — Age: 16; Life Span: 15; 35,000

Total Expenditures (by Budget Year)

• 2014: 35,041
• 2015: $7,980
• 2016: $88,554
• 2017: $214,000
• 2018: $40,000
• 2019: $90,000
• 2020: $45,000
• 2021: $90,000
• 2022: $85,000
• 2025: $340,000

Approved Budget (by Budget Year)

• 2014: 44,980
• 2015: $88,000
• 2016: $214,000

Variance - Carry forward to future years (Approved Budget minus Total Expenditures)

• 2014: 9,939
• 2015: $80,020
• 2016: $125,446

Notes

• Note 1 - Meeting room walls and door project ($12,000) no longer required. Roof envelope ($4,000) rolled into larger upgrade in 2017. Outer automatic door replacement came in $12,000 under budget. Carpet replacement project expanded and deferred to 2016. Exterior patch and paint project deferred to 2017.
• Note 2 - Roof envelope and flashing deferred to 2017.

Fund Balances (by Budget Year)

Columns: 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2025

• JF MAM Fund Balance, Jan 1st:

  • 2014: 80,132
  • 2015: 161,949
  • 2016: 210,217
  • 2017: 286,028
  • 2018: 282,023
  • 2019: 152,532
  • 2020: 195,746
  • 2021: 189,392
  • 2022: 227,975
  • 2025: 221,943

• Contribution:

  • 2014: 80,880
  • 2015: 80,880
  • 2016: 80,880
  • 2017: 80,880
  • 2018: 80,880
  • 2019: 80,880
  • 2020: 80,880
  • 2021: 80,880
  • 2022: 80,880
  • 2025: 323,520

• Interest, estimated:

  • 2014: 937
  • 2015: 2,428
  • 2016: 2,911
  • 2017: 3,669
  • 2018: 3,629
  • 2019: 2,334
  • 2020: 2,766
  • 2021: 2,703
  • 2022: 3,089
  • 2025: 5,455

• JF MAM Fund Balance - Available:

  • 2014: 161,949
  • 2015: 245,258
  • 2016: 294,008
  • 2017: 370,577
  • 2018: 366,532
  • 2019: 235,746
  • 2020: 279,392
  • 2021: 272,975
  • 2022: 311,943
  • 2025: 550,918

• Deduct: Expenditures from Prior Year:

  • 2014: -
  • 2015: (35,041)
  • 2016: (7,980)
  • 2017: (88,554)
  • 2018: (214,000)
  • 2019: (40,000)
  • 2020: (90,000)
  • 2021: (45,000)
  • 2022: (90,000)
  • 2025: (85,000)

• JF MAM Fund Balance, Dec 31st:

  • 2014: 161,949
  • 2015: $210,217
  • 2016: $286,028
  • 2017: $282,023
  • 2018: $152,532
  • 2019: $195,746
  • 2020: $189,392
  • 2021: $227,975
  • 2022: $221,943
  • 2025: $465,918

Planned Projects (summary / total): $24,141

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