Council reverses backhoe decision; notes $2M surplus

By Andru McCracken


The Village of Valemount will purchase a new backhoe this year after all, and not in spite of the egregious impact of the global pandemic, but because of it. At the May 12 council meeting, council reversed their April 28th decision to defer purchasing a backhoe. Staff brought a report to council explaining why they feel replacing backhoe is necessary and part of a sensible response to COVID-19. The report provides an interesting lens on village finances and obligations.

In their report, staff said providing safe drinking water and sewage disposal is critical and that money is available for the village to carry on their obligations.

“As the purchase of the backhoe has been budgeted since 2018, the funds have already been
set aside and budgeted in the five-year financial plan capital expenses. 2020 Tax rates will not be affected from the deferment of this purchase.”

“As the Province now begins to re‐open, it is even more imperative that staff have the necessary equipment required to continue providing these essential services.”

The report from the department of finance said that even if the village was unable to collect any of the $1.5 million of 2020 tax revenue, there are resources and processes available to ensure a positive cash flow.

Currently the village has $3.6 million in capital reserves (in excess of capital projects scheduled for 2020) and $2 million in its general surplus.

“Staff is reviewing the budget on a regular basis and deferring projects and/or purchases that
are able to wait, allowing access to that associated funding,” wrote staff. “ Currently, the paving of main
street in the amount of $250,000 has been deferred to 2021.”

The Province is allowing the village to hold on to money it collects from residents and usually forwards to the Province for education until December 2020. The result is effectively a short-term loan to municipalities.

While holding off on the purchase of the backhoe leaves money available for other uses, staff say there are sufficient funds available in the capital reserves and general surplus accounts.

Public works said that not replacing the backhoe could result in unexpected costs, including rental of a replacement.

“The current backhoe is 21 years old with 7,672 hours. In the past 3 years approx $8,150 has
been spent on maintenance and repairs.”

Despite regular maintenance, public works said that the risk of more failures rises.

Larry Stewart, the executive editor of Construction Equipment (constructionequipment.com) said businesses that can afford very little risk of downtime should consider the statistics.

“Half of the [engines in backhoe-loaders] have failed by 8,500 hours, and most of the remaining half fail within the next 3,500 hours,” said Stewart.

Staff said the longer this purchase is deferred, the more probable a major breakdown will happen.

“This will cause the Village to spend monies on a rental machine, and/or a loss of service to the public, and may prevent the sale of the current machine which is to meant to offset the costs of a newer purchase.”

Staff listed the backhoe’s uses and how it would impact village services:

  • Emergency repairs
  • Snow removal
  • Loading sand truck for ice control measures
  • Digging graves
  • Loading gravel trucks
  • Spring clean up
  • Debris removal
  • Baseball field maintenance
  • Road repair
  • Unloading and loading of heavy equipment
  • Ditching
  • Maintaining planters on 5th Ave
  • Maintaining Village Welcome signs
  • Moving rocks/bollards
  • Water Treatment Plant/Intake
  • Changing and unloading chemical totes at
  • Cleaning of intake screens
  • Removing and adding of blocks for weir level control
  • Installing services
  • Cleaning of retention pond
  • Sewer Treatment Plant/Lift stations
  • Screen repairs
  • Screen removal
  • Installing services
  • Pulling sewer pumps

In a letter to council read before the decision was made, resident Rashmi Narayan made a comment. Narayan said that public works needs to be provided with good reliable tools to do their work and also that the capital reserves and general surplus should feature prominently when utility rates and taxes are discussed.

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