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Under the 'Community Charter,' Nelson's financial plan may be amended by bylaw at any time.

An amendment to the City of Nelson’s five-year financial plan could cost $1.5 million.

Although the city’s five-year financial plan bylaw for the years 2024-2028 was adopted by city council on May 7, 2024, since adoption and during the year, several additional expenditures arose that are needed to be added in.

The expenditures were known to council, said city chief financial officer Chris Jury in his report to council.

“As the five-year financial plan is adopted in the early part of a fiscal year it is common for opportunities or changes to what had been planned to arise as the year progresses,” he said.

Under the Community Charter, the financial plan may be amended by bylaw at any time.

At the Oct. 25 Nelson Hydro budget presentation there were two “significant impacts” to 2024 operations that required a financial plan amendment, Jury explained.

The first was a decrease in the projected funding receivable from the insurance claim made on the Mill Street substation failure.

“This funding was budgeted to help offset the overall cost of the replacement and upgrade of the substation,” Jury said.

Forecasted proceeds from insurance were budgeted at $2.5 million, but the city received a settlement of $1.6 million. The result was an increase in capital costs of $840,000 and an increase in the transfer from the Hydro capital reserve to fund the completion of the project.

At the same meeting, council was reminded of the Jan. 13, 2024 cold weather event that increased peak demand by 16 per cent.

“The result of that event, and increased customer demand, was an increase in the demand charges incurred through Fortis BC power purchases, which are based on the highest level reached in the proceeding 12-month period,” said Jury.

The financial impact for the year was an increase in power purchase costs versus the budget of $477,000.

“It should be noted that the above two amendments impact both rural and urban sides of the utility,” Jury pointed out.

For uncontrollable expenses or decreases in revenue versus budget, Nelson Hydro is directed by the B.C. Utilities Commission to recover those variances, as they relate to the rural portion of the utility, through deferral accounts over subsequent years, he added.

In September of 2024, city council passed a resolution to give an operating grant to the Nelson Civic Theatre Society in the amount of $150,000. As part of that resolution, direction was given for staff to amend the financial plan to reflect $150,000 in expenditures with funding from surplus, Jury said.