financial management summary of submitted 2014 budget · • invest reserve funds not required in...

Service Expense

Non Tax

Revenue

Net Property

Tax Supported Expense

Non Tax

Revenue

Net Property

Tax Supported Expense

Non Tax

Revenue

Net Property

Tax

Supported

Prop. Tax

Supported

(%)

Corporate Financing 109,812 (36,806) 73,006 121,743 (35,462) 86,281 11,931 1,344 13,275 18.2%

Finance 7,380 (1,859) 5,521 7,495 (1,906) 5,589 115 (47) 68 1.2%

Corporate Investments & Partnerships 652 0 652 654 0 654 2 0 2 0.3%

Total to Maintain Existing

Service Level117,844 (38,665) 79,179 129,892 (37,368) 92,524 12,048 1,297 13,345 16.9%

(3,600) (3,600) (4.5%)

88,924 9,745 12.3%

Note: All figures are subject to rounding.

2014 Budget Highlights: $ 000 %

Maintaining Existing Service:

13,275 16.8%

70 0.1%

Service Adjustments:

(3,600) (4.5%)

Increase/ (Decrease) over prior year budget 9,745 12.3%

Finance and Corporate Investments & Partnerships reflect increases in salary, wage and fringe benefits due to existing employment agreements as well as other minor administrative adjustments based on requirements

The 2014 budget includes a reduction in financing to fund the capital plan as outlined in Business Cases #6 - #13, as a result of budget decisions made in 2013.

The 2014 submitted budget for Corporate Finance is comprised of increases required to finance previously approved capital projects (debt financing $2.1 million), financing in accordance with the Strategic Financial Plan to fund proposed capital projects (pay-as-you-go financing and reserve fund contribution $2.7 million) as well as increasing capital by $3.6 million to accommodate the 2014 capital plan identified in 2013. Along with capital funding, corporate finance includes increases in personnel / legal related accounts and tax write offs. Corporate Finance also includes adjustments to revenues such as the reduction in draw down from the Operating Budget Contingency Reserve ($1.7 million). These revenue reductions have been partially offset by an increase in revenue anticipated from the Ontario Lottery and Gaming Corporation (OLG) based on the revised Municipal Contribution Agreement.

Financial ManagementSummary of Submitted 2014 Budget

($000's)

Service Adjustments Submitted

2014 Financial Management AS SUBMITTED

Increase / (Decrease) Over Previous YearRevised Budget

2013 2014

Draft Budget

____________________________________________________________________________________________________________________ 2014 Draft Budget for the City of London - December 3, 2013

Page 595

BUSINESS PLAN: Corporate Financing

How does this service contribute to the results identified in the City of London Strategic Plan?

A strong economy A vibrant and diverse community

A green and growing City

A sustainable infrastructure

A caring community

Corporate Financing oversees the financial activities of the City including the funding of capital projects through capital levy, reserve fund contributions and debt financing as well as manages personnel and legal contingency costs. In addition, Corporate Financing manages revenue that is corporate in nature such as grants and subsidies; investment income; taxation and other general income. Corporate Financing contributes to the goal of achieving and sustaining a healthy financial position for a strong economy. Adequately funding capital projects, managing debt servicing costs, planning for contingencies and maximizing revenues are key components to sustaining a healthy financial position. Our strong financial position also allows the City the flexibility to take of advantage opportunities, such as government programs for infrastructure and capital investments in the community.

Name the main activities done to provide this service:

Name The Activities Done To Provide This Service How Much Did We Do?

(optional)

Is The City Mandated To Provide This

Service?

Can The Level Of Service Be

Changed?

1. Capital Financing Costs and Reserve Funds Issued $34.7 million debt, 3.299% over 10-year term Contribution to Reserve Funds in 2013 $25.7 million.

No Yes

2. Corporate Costs (bank fees, insurance, professional fees) $2.3 million Yes (insurance) Yes

3. Taxation (GIL’s and supplementary taxes) $14.4 million (revenue) Yes No

4. Government Grants and Subsidies $1.0 million Yes No

5. Other Municipal Revenues $20.1 million No No


Page 596

What is the current state of this service?

The City of London has maintained its Aaa credit rating through Moody’s Investor Services for 37 consecutive years. “The City of London’s Aaa debt rating is supported by a prudent, conservative approach to fiscal planning as well as sizeable levels of reserves. The rating also reflects the City’s strong track record of achieving positive operating results and the generation of internal financing for capital expenditures which mitigates the need for debt issuance”. (Moody’s Report, October 2013)

The City of London continues to implement Council’s debt reduction program of reducing authorized but not issued debt through the allocation of surplus and other one-time sources. For 2013, we anticipate authorized but not issued debt to be reduced by $4.5 million, resulting in $0.9 million in avoided borrowing costs. Reserve funds assist in funding the 10-year capital plan. The City of London is reviewing its capital asset management process. The process will identify the need and prioritize spending on capital assets based on a comprehensive risk based approach. Although the projected reserve balances are increasing over the next five years, the total balance is a small percentage of the estimated replacement value on property tax supported assets. Civic Administration collects and analyzes information on potential contingences relating to personnel and legal matters. Civic Administration utilizes a conservative approach to estimate the potential costs related to contingencies.

What is the future direction of this service?

The City has continued on the path of employing tighter controls for authorizing new debt which is being reflected in the decline in total potential debt levels (i.e. issued and authorized) since 2010. The City expects that this trend will continue through 2018 as we continue to move toward pay as you go financing with the goal to fund 75% of life cycle projects through capital levy.

The City of London will continue to invest in its infrastructure through prudent use of reserve funds to assist in mitigating the growth of the infrastructure deficit.

Civic Administration will continue to collect and analyze information relating to contingencies to effectively plan for future costs.


Page 597

What do you plan to do?

2014 – 2018 • Continue to move toward pay as you go financing. • Maintain the City’s Aaa credit rating. • Provide sufficient reserve fund contributions to appropriately fund the capital plan. • Review adequacy of reserve funds to provide better planning tools to determine appropriate balances, contributions and draws in

connection with asset management. • Invest reserve funds not required in the short term in longer-term, higher yielding investments to maximize investment income. • Manage tax write offs and rebates in accordance with the Municipal Act and the Assessment Act. • Monitor economic downturns that could affect contingencies and amounts received through supplementary taxes. • Consider the affect of significant inflationary and industry costs to items such as insurance and audit costs.

Key Performance Indicators Description of measure 2012 2013 2014 2015 2016 2017 2018

How Much? 1. $ in debt under administration (in millions) $347.4 $352.5 $433.8 $423.5 $406.4 $396.7 $417.9 2. $ in reserve funds (in millions) $246.0 $145.5 $147.7 $145.9 $160.5 $180.9 $203.0

How Well? 3. Debt service as a % of total corporate expenditures

(tax supported) 5.1% 5.3% 5.4% 5.4% 5.6% 5.7% 5.8%

4. Contribution to capital reserve funds as a % of total corporate expenditures (tax supported)

2.7% 2.9% 2.8% 2.8% 2.8% 2.8% 2.8%

5. % of life cycle renewal projects funded from capital levy 34% 35% 35% 40% 36% 45% 48% 6. Debt financing as a % of total capital budget

(tax supported) 32% 25% 21% 21% 23% 22% 22%


Page 598

2012 2013 2014

Object

ActualRevised

Budget

Maintain

Existing

Service

Service

Adjustments

Requested

Budget

Expenditures $ %

Capital Financing:

a) Capital Levy 21,715 21,558 5,800 (3,025) 24,333 2,775 12.9%b) Debt Servicing 38,033 39,865 2,132 41,996 2,131 5.3%c) Capital Grants 50 0 0 0 0.0%Contributions Reserves/ Reserve Funds

Risk Management and Long Term

PlanningUnfunded Liabilities 7,724 0 0 0 0.0%Other (Self Insurance, WSIB, Sick Leave)

1,958 1,998 (328) 1,670 (328) (16.4%)

Contingencies/ Stabilization

Operating Budget Contingency 5,165 0 0 0 0.0%Other (Municipal Election, Official Plan)

497 497 497 0 0.0%

Capital Asset Renewal and

ReplacementMajor Repairs - City Facilities 4,355 5,775 5,775 0 0.0%Sanitary Landfill Site 2,220 2,272 0 (200) 2,072 (200) (8.8%)Social Housing Major Repairs & Upgrades

476 500 500 0 0.0%

Public Housing Major Upgrades (LMHC)

2,104 2,208 2,208 0 0.0%

Police Vehicle Replacement 1,681 1,764 (464) 1,300 (464) (26.3%)Other (Library, Dearness, Fire) 1,750 2,267 100 2,367 100 4.4%

Capital Asset Growth

Industrial Oversizing 953 600 400 1,000 400 66.7%Industrial Land 1,487 1,600 292 1,892 292 18.3%

Corporate Financing

($000's)2014 Budget As Submitted

Explanation of Adjustments

Increase/ (Decrease) Over

2013


99

2012 2013 2014

Object

ActualRevised

Budget

Maintain

Existing

Service

Service

Adjustments

Requested

Budget

Corporate Financing




2013

Specific Projects and New

Initiatives

New Affordable Housing 1,000 2,000 2,000 0 0.0%Downtown (Rehab, DCs, Old East)

1,381 1,450 400 1,850 400 27.6%

Other (Civic Invest, Property Acquisition, Woodlot, Energy, Waste Diversion, Parking)

3,791 2,416 0 (375) 2,041 (375) (15.5%)

Sub-Total Contributions

Reserves/ Reserve Funds

36,542 25,347 400 (575) 25,172 (175) (0.7%)

Contingencies:

a) Tax Write Offs and Rebates 10,031 8,004 242 8,246 242 3.0%b) Corporate Costs (Personnel and Legal)

3,699 6,702 3,439 10,141 3,439 51.3%

Other Corporate Expenditures:

a) Interest Charges/Bank Fees 69 150 (56) 94 (56) (37.3%)b) Professional Fees (Accounting, Consulting, Purchased Services)

460 533 (48) 485 (48) (9.0%)

c) Insurance Costs 1,362 1,710 23 1,733 23 1.3%d) Municipal Property Assessment Corporation (MPAC) service fee

4,597 4,703 4,703 0 0.0%

e) County of Middlesex - suburban roads payments

1,151 1,240 1,240 0 0.0%

Total Expenditures 117,709 109,812 11,932 (3,600) 118,143 8,331 7.6%

Revenue

Other Taxation:

a) Grants In Lieu of Taxes & Railway Rights of Way (9,486) (9,267) 115 (9,152) 115 (1.2%)

b) Supplementary Taxes (9,517) (5,100) (5,100) 0 0.0%c) Local Improvements (98) (149) 6 (143) 6 (4.0%)


00

2012 2013 2014

Object

ActualRevised

Budget

Maintain

Existing

Service

Service

Adjustments

Requested

Budget

Corporate Financing




2013

Government Grants & Subsidy:

a) Dearness - Provincial Capital Recovery

(920) (918) (918) 0 0.0%

Other Municipal Revenues:

a) Penalty & Interest (4,902) (3,405) 5 (3,400) 5 (0.1%)b) Short & Long Term Investments (1,495) (900) (185) (1,085) (185) 20.6%c) Draw from Operating Reserves

i) Strategic Draw from Operating Budget Contingency Reserve 0 (4,540) 1,740 (2,800) 1,740 (38.3%)

ii) Transfer from Capital Reserves (20) 0 0 0 0.0%d) Western Fair

i) Slot Machine (4,086) (4,195) (305) (4,500) (305) 7.3%ii) Rent (500) (550) (16) (566) (16) 2.9%

e) Recovery (London Hydro)i) London Hydro-interest (4,200) (4,200) (4,200) 0 0.0%ii) London Hydro-dividend (3,000) (2,450) (2,450) 0 0.0%iii) London Hydro- administrative recovery

(75) (75) (75) 0 0.0%f) Recovery from Water rate (801) (817) (16) (833) (16) 2.0%g) Other (366) (240) (240) 0 0.0%Sub-total - Non Property Tax

Revenue(39,466) (36,806) 1,344 0 (35,462) 1,344 (3.7%)

Net Budget 78,243 73,006 13,276 (3,600) 82,681 9,675 13.3%

Additional Information / Commentary with respect to 2014 Draft Budget

The 2014 submitted budget for Corporate Finance is comprised of increases required to finance previously approved capital projects (debt financing $2.1 million), financing in accordance with the Strategic Financial Plan to fund proposed capital projects (pay-as-you-go financing and reserve fund contributions $2.7 million) as well as increasing capital by $3.6 million to fund the 2014 capital plan identified as part of the 2013 budget. Along with capital funding, corporate finance includes increases in personnel / legal related accounts and tax write offs. Corporate Finance also includes adjustments to revenues such as the reduction in draw down from the Operating Budget Contingency Reserve ($1.7 million). These revenue reductions have been partially offset by an increase in revenue anticipated from the Ontario Lottery and Gaming Corporation (OLG) based on the revised Municipal Contribution Agreement.

Maintaining Existing Service Levels (Flow through from prior years, inflation, contractual obligations, efficiencies)


Page 601

2012 2013 2014

Object

ActualRevised

Budget

Maintain

Existing

Service

Service

Adjustments

Requested

Budget

Corporate Financing




2013

Business Case #11 - Downtown On-Street Pay & Display Parking - ($175,000)Business Case #12 - Bike Lane Program - ($200,000)Business Case #13 - Facility Energy Management - ($500,000)

Service Adjustments:

Business Case #6 - Landfill Property Acquisition ($200,000)Business Case #7 - Bus Purchase Renewal ($500,000)Business Case #8 - Arterial Road Rehabilitation - Main ($1,700,000)Business Case #9 - Glen Cairn Major Upgrades - ($125,000)Business Case $10 - Floodplain Acquisition - ($200,000)

A reduction is required to the financing available to fund the 2014 capital plan identified in the 2013 budget as a result of the 2013 budget decision. The following capital budgets will be reduced as a result:


Page 602

Budget Forecast

Object

Expenditures 109,812 118,143 128,005 134,646 141,303 148,492 38,680Non-Property Tax Revenue (36,806) (35,462) (32,311) (32,333) (32,356) (32,373) 4,433Property Tax Supported (Net Budget) 73,006 82,681 95,694 102,313 108,947 116,119 43,113

Increase / (Decrease) Over Prior Year 9,675 13,013 6,619 6,634 7,172 43,113Increase / (Decrease) Over Prior Year % 13.3% 15.7% 6.9% 6.5% 6.6% 59.1%

Annual average increase: 9.8%

StaffingFull-Time Equivalents # 0.0 0.0 0.0 0.0 0.0Increase / (Decrease) Over Previous Year 0.0 0.0 0.0 0.0 0.0Full-Time Employees # 0 0 0 0 0

Increase / (Decrease) Over Previous Year 0 0 0 0 0

Additional Information / Commentary:

Anticipated reduction in the draw from the Operating Budget Contingency Reserve as balance is anticipated to decrease, and the maturity of the London Hydro Note payable.

Increase in personnel and legal contingencies to reflect unsettled collective agreements.

2016

Forecast

Increase in capital levy by $2.2 million each year to finance capital projects as outlined in the capital plan consistent with the Strategic Financial Plan. Anticipated increase of debt servicing costs by approximately $1.6 million on average each year, net of debt retired, to reflect the issuance of the existing $92.2 million in previously approved but unissued debt along with the issuance of proposed debt as outlined in the 2014 to 2023 capital plan. 2015 includes adding back in $3.6 million in capital financing that was introduced as a reduction in 2013 budget.

Corporate Financing2014 - 2018 Budget Forecast & Staffing

($000's)

2013 Revised

Budget2014 to 2018

Projected Increase

2014 Requested

Budget

2015

Forecast

2017

Forecast

2018

Forecast

Although no staff are directly budgeted, staff in Finance are directly responsible for managing corporate expenditures and revenues.


Page 603

Business Cases 6 thru to 13 Overview Impact of Prior Year Capital Budget Reduction

With Council approval of the 2013 Budget, the tax levy contribution to the capital budget was reduced by $3.6 million. This was accommodated by eliminating or reducing $3.6 million of capital projects that were originally planned in 2013 (e.g. a reduction in the facility energy management program and the bus purchase renewal program). However, Council’s decision during 2013 Budget deliberations signifies a permanent reduction to the capital plan, representing $36 million over the ten year plan, therefore Civic Administration was required to identify an additional $3.6 million of reductions to the capital program in 2014.

Civic Administration has included $3.6 million of “cuts” within the submitted 2014 budget in response to Council’s decision to reduce the capital budget by $3.6 million during 2013 budget deliberations. Civic Administration is not recommending these cuts.

The following table shows the cuts that were identified for 2014 – eight capital projects that were eliminated or reduced for a total of $3.6 million. Service Improvement projects were the first choice of capital projects to be cut, because Life Cycle projects maintain the existing capital infrastructure and Growth projects are supported by development charges. However, there were a limited number of service improvement projects to choose from, so three Life Cycle projects were also impacted in 2014. Each “cut” is supported by a business case in the pages that follow.

Business Case # Category Service Program Project # Project Description

2014 Reduction ($000)

6 Life Cycle Environmental Services SW6030 Landfill Site Property Acquisition 200 7 Life Cycle Transportation Services MU1044-14 Bus Purchase Renewal 500 8 Life Cycle Transportation Services TS1446-14 Arterial Road Rehabilitation – Main 1,700 Subtotal Life Cycle $ 2,400

9 Service Improvement Parks, Recreation & Neighbourhood Services

RC2608 Glen Cairn Major Upgrades 125

10 Service Improvement Parks, Recreation & Neighbourhood Services

PP2014 Floodplain Acquisition 200

11 Service Improvement Transportation Services TS4207 Downtown On-Street Pay & Display Parking 175 12 Service Improvement Transportation Services TS1739-14 Bike Lane Program 200 13 Service Improvement Corporate, Operating &

Council Services TS6217 Facility Energy Management 500

Subtotal Service Improvement $ 1,200 TOTAL $ 3,600


Page 604

Business Case #6

Service Corporate Financing Initiative Life Cycle Renewal Capital Project for Garbage, Recycling & Composting

Landfill Site Property Acquisition (SW6030) Financial Implications ($ 000’s)

2014 Net Change to

Property Tax Levy

2014 Tax Levy Impact

%

Ten Year Impact (if funding not

returned)

(200) -0.04% (2,000)

Recommendation

In the short term, Civic Administration recommends that available 2013 year end operational savings be used to reduce or eliminate the capital funding reduction in the 2014 budget, up to $3.6 million. In the long term, Civic Administration recommends increasing the tax levy by 0.8% to generate $3.6 million of capital funding to permanently restore the original capital plan that was reduced during 2013 deliberations.

Background

The W12A Landfill Community Enhancement and Mitigative Measures Program is part of the City’s overall efforts to reduce and address the negative effects of the W12A Landfill on neighbouring properties. It provides for property acquisition or property value protection to a number of properties around the landfill. This policy was approved by Council in 2009 after extensive consultation and input from area residents.

In addition to addressing concerns about property values from area residents, acquisition of properties around the W12A landfill is required to:

• complete acquisition of lands identified as part of a special policy area (Waste and Resource Management area) in the City’s Official Plan,

• act as a buffer to existing landfill operations, • protect against short and long-term encroachment around the landfill site, • reduce opposition and provide buffering for future potential landfill and resource recovery development options, and • eliminate on-going “right of first refusal” payments to property owners.

Property value protection is provided to nearby properties that are not purchased to ensure those properties don’t decline in value due to the ____________________________________________________________________________________________________________________ 2014 Draft Budget for the City of London - December 3, 2013

Page 605

Business Case #6


Landfill Site Property Acquisition (SW6030)

proximity of the property to the W12A Landfill. Property value protection involves paying the difference between the fair market value of the property and what a willing purchaser would pay for the land knowing it is near a landfill. Under the W12A Landfill Community Enhancement and Mitigative Measures program, the City is required to provide property value protection if it does not purchase the property.

This proposal reduces the projected amount available to purchase property and provide property value protection from $13.4 million over ten years to $11.4 million. In addition, a second (Business Case #3) proposed 2014 service change would involve a further $2.55 million cut in funding to $8.85 million for the next 10 years. This amount is below the expectations of the community who provided input in the development of the Community Enhancement and Mitigative Measures Program. It must be recognized that a combined 34% reduction in property acquisition/property value protection funding will be viewed by the community as stepping away from a “community negotiated” deal and may result in opposition from the local community to the existing landfill operations and any proposed future facilities.

As noted above, acquisition of nearby properties will reduce opposition and provide buffering for future potential landfill and resource recovery development options. Failure to secure an expansion of the W12A landfill would increase waste management operating costs of between $6,000,000 and $10,000,000 per year. Development of the City’s long term disposal plan is expected to begin within the next year and any expansion of the W12A landfill will require approval by the Ministry of the Environment.

It should also be noted that any lands acquired can be sold in the future if it was deemed they were not required for buffering or as part of any future potential landfill expansion or resource recovery facility and the City will be able to recoup any money spent.

Performance Measures Impact

This service change does not directly affect any of the services’ key performance measures in the short term. It may impact performance measures in future years should the community demand other actions from the City that have not been budgeted.

Impacts

a) Community

This service change will have a direct impact on the local community. It will be viewed as Council altering a deal with the local community for a function (waste disposal) that benefits the entire City. Also, there could be an indirect financial impact as this service change makes it more likely the City will have to pay higher waste disposal costs ($6,000,000 to $10,000,000 more per year) in the


Page 606

Business Case #6


Landfill Site Property Acquisition (SW6030)

future.

b) Community Engagement

The community will learn about this service change through the tabling of the 2014 Property Tax Budget in December 2013. The W12A Neighbourhood Liaison Committee will also be advised of this proposed change as this is the local resident’s group established by Council resolution.

c) Other City of London Services

N/A

Risks

Reducing the funds available for property acquisitions over the next ten years will:

• affect the City’s ability to purchase property on a timely basis and therefore, will likely result in the need to purchase land at higher prices in the future.

• reduce the ability to obtain local support for additional waste diversion and resource recovery facilities

• impact the comprehensive nature of the Community Enhancement and Mitigative Measures Program thus reducing the positioning City staff have with the Ministry of the Environment


Page 607

Business Case #7

Service Corporate Financing Initiative Life Cycle Renewal Capital Budget for Transportation Services

Bus Purchase Replacement (MU1044-14) Financial Implications ($ 000’s)

2014 Net Change to

Property Tax Levy


%


returned)

(500) -0.1% (5,000)

Recommendation


Background

This capital project is for the ongoing program of replacing buses supporting maintaining assets in a state of good repair, mitigating vehicle maintenance cost and supporting service reliability. The replacement program provides for:

• Establishing and maintaining an average fleet age of between six and seven years, noting that the long held industry standard on the economic useful life of a bus is 12 years.

• Lowering and then levelling the direct bus maintenance cost to an average of 20% of total direct operating costs over the period 2014 to 2018.

• Improving service quality, reliability and predictability re: fewer service interruptions, targeted improvement of 5% over the period - 2014-2018.

• Establishing and maintaining spare fleet requirements at 25% of peak fleet requirements. • Supporting a healthier environment, noting replacement buses, given improvement in bus construction/technology and fuel

technology, produce less greenhouse gas emissions. In addition, over the period, the number of hybrid buses in the fleet will increase to 24 from the current eight.


Page 608

Business Case #7


Bus Purchase Replacement (MU1044-14)

• The plan provides for the following fleet make up, noting the growth in fleet is addressed as part of the bus expansion programs:

Year 30 ft Buses 40 ft Buses 60 ft Buses Total Buses Avg Age of Fleet 2012 4 178 10 192 6.5 years 2013 4 178 12 194 6.7 years 2022 4 196 14 214 6.5 years

• Cost of replacement buses (2013 dollars) including preparation cost, AVL upgrades $5,300, PDI $3,000, and net HST:

30 ft Diesel 40 ft Diesel 40 ft Hybrid 60 ft Diesel $446,500 $446,700 $688,900 $710,600

If this funding is not returned, this service change means $500,000 less in City funding each year or $5 million over ten years. There is no impact on other funding if the City portion is reduced.

Should Municipal Council approve the reduction, the LTC Administration will assess the options to accommodate the reduction, with resulting recommendation to the Commission on the selected option. The options include:

• Seek additional funding sources – e.g. increased Provincial Gas Tax funding, noting same would impact use of provincial gas tax funding for other operating and capital budget programs

• Reduce the number of buses to be replaced each year – results in upward pressure on average fleet age and direct vehicle operating maintenance and servicing costs

• Change mix of replacement buses to be purchased – reduce/eliminate purchase of 60’ buses (reducing system capacity and resulting in higher capacity cost per hour) and/or reduce/eliminate purchase of hybrid buses (negatively impacting LTC environmental foot print)

• Combination of the above


This service change may affect a number of key performance measures, for fleet operations, depending upon on the option selected.


Page 609

Business Case #7


Bus Purchase Replacement (MU1044-14)

Impacts

a) Community

Depending on the option chosen to address this capital reduction, the impact on the community could be: • Reduction in service quality, reliability and predictability (e.g. increase in service interruptions) • Reduction of other LTC operating or capital programs if Provincial Gas Tax is reallocated to fund this reduction • Reduced number of buses replaced each year resulting in upward pressure on average fleet age and direct vehicle operating

maintenance and servicing costs • Reduction and/or elimination of 60’ buses reducing system capacity and resulting in higher capacity cost per hour • Reduction and/or elimination of hybrid buses negatively impacting LTC environmental foot print


The community will learn about this service change through the tabling of the 2014 Property Tax Budget on December 3, 2013.


There is no impact on other City of London services.

Risks

Depending on the option chosen to address this capital reduction, the risks are: • The average age of the fleet may increase, which may in turn increase vehicle operating maintenance and servicing costs • Service quality, reliability and predictability (e.g. increase in service interruptions) will decrease • The fleet will be less supportive of a healthier environment, noting replacement buses, given improvement in bus

construction/technology and fuel technology, produce less greenhouse gas emissions. In addition, over the period, the number of hybrid buses in the fleet may decrease.


Page 610

Business Case #8

Service Corporate Financing Initiative Life Cycle Renewal Project for Transportation

2014 Arterial Road Rehabilitation – Main (TS1446 – 14) Financial Implications ($ 000’s)

2014 Net Change to

Property Tax Levy


%


returned)

(1,700) -0.4% (17,000)

Recommendation


Background

The annual Arterial Road Rehabilitation program will repair and resurface main roads (arterial, primary collectors, expressways & freeways) throughout the City. These roads represent the busiest of the approximately 1500 lane-km of the total 3680 lane-km to the overall network. The roads included in the annual program are chosen based on their relative condition rating and overall usage / traffic volume, as well as coordination with other works in the area. The Arterial Road Rehabilitation program represents the largest portion of the transportation infrastructure gap deficit and this reduction will create further pressure on the management of the transportation network.


This service change will reduce the annual program budget by nearly 20%. This will reduce the number of road sections to be rehabilitated in 2014 and future years by three roads per year.

The three locations, as defined on the appendix, are: - Exeter Road Westbound Off Ramp - HWY 401 to Bessemer Road; - Crumlin Side Road - Dundas Street to Gore Road; and,


Page 611

Business Case #8

Service Corporate Financing Initiative Life Cycle Renewal Project for Transportation

2014 Arterial Road Rehabilitation – Main (TS1446 – 14)

- Trafalgar Street - Lem Gardens to Crumlin Side Road.

These streets represent a 9.6 lane-km reduction in the amount of rehabilitation of roads that are rated in “poor” condition.

Impacts

a) Community

Maintaining the condition of our existing roads provides safety, economic and comfort benefits to all road users.


Some coordination discussions with MTO have been initiated for the Exeter Road location. Also, calls from the residents along Crumlin Side Road have been received to request & support any improvements to their street.

c) Other City of London services

Discussion with other City services has been initiated, and no other services are anticipating any needs on the three streets to be deferred in 2014.

Risks

• Further deterioration of the roadway may cause safety concerns and require increased attention and operating costs for Roadside Operations to keep the area safe and passable.


Page 612

Business Case #9

Service Neighbourhood & Recreation Services Initiative Service Improvement Project for Parks, Recreation and Neighbourhood Services

Glen Cairn Major Upgrades (RC2608)

Financial Implications ($ 000’s) 2014

Net Change to Property Tax Levy


%


returned)

(125) -0.03% (125)

Recommendation


Background

The 2014 Capital plan has $0.125M set aside for the design and consulting work required to repurpose the Glen Cairn Arena. These funds can be deferred to 2015 as the South West multipurpose recreation centre project will not be operational until 2016, so the repurposing project can be delayed one year.


n/a


Page 613

Business Case #9

Service Neighbourhood & Recreation Services Initiative Service Improvement Project for Parks, Recreation and Neighbourhood Services

Glen Cairn Major Upgrades (RC2608)

Impacts

a) Community n/a

b) Community Engagement n/a

c) Other City of London Services n/a

Risks

• n/a


Page 614

Business Case #10

Service Corporate Financing Initiative Service Improvement Business Case for Parks, Recreation & Neighbourhood Services

Floodplain Acquisition (PP2014)

Financial Implications ($ 000’s) 2014

Net Change to Property Tax Levy


%


returned)

(200) -0.04% (2,000)

Recommendation


Background

This project was set up to acquire lands within the floodplain for public purposes per priorities established by Municipal Council. Selected floodplain lands will be acquired through a long term program of progressive acquisition.

This reduction effectively reduces funding for the floodplain acquisition program to zero.

Chapter 15 of the Official Plan:

Objectives: This floodplain acquisition program will be conducted in recognition of the limited development potential of floodplain lands, and as a means of achieving objectives for open space and recreational lands.

Priorities: For the purposes of floodplain acquisition, priorities will be established and evaluated on a regular basis according to the potential for loss of life, damage to property in the case of a major flood event, and the potential contribution to the network of public open space within the City. Priorities for the acquisition of floodplain lands will be established by Council in co-operation with the appropriate


Page 615

Business Case #10



Conservation Authority

Methods of Acquisition: Acquisition will occur as properties become available primarily through the following methods: purchase; dedication; and donation or bequest. In some cases where a property cannot be acquired through other means, the property may be acquired through expropriation.

Floodplain acquisition programs are meant to protect the members of a community. Floodplain acquisition is a key component to an overall flood plan management strategy in co-operation with conservation authorities in the province.

Maintained vigilance within a concerted floodplain management program furthers protection of life and property.

In 2007, Council directed staff to identify potential properties for acquisition along the Thames River Corridor. That work was completed and approximately 70 parcels have been identified for potential acquisition. In the subsequent years, this fund has been utilized to acquire several of these parcels.

City Council has been updated on Climate Change studies and the potential impact on the Thames River Valley regarding flooding events. This work continues with the updating of many sub-watershed studies for hydrological modeling. A similar Thames River focused study is also currently underway.

In 2012, City Council endorsed the Thames Valley Corridor Plan that had as one of its goals the acquisition of the remaining floodplain parcels along the river to protect environmental features and provide improved pathway and trail systems.

Jeff Brick, Coordinator, Hydrology and Regulatory Services UTRCA explains, “With unusually dry conditions this year, we have had a rise in the number of requests for development in regulated floodplain areas. We have developed a video to explain the importance of floodplains in protecting people and property from flooding.”

Importance of Floodplains in London

Today, rather than attempting to keep the river's floodwaters away from the people who have moved into the floodplain areas, the Conservation Authority works to keep the human development away from the river, to leave the floodplain available to the Thames when it needs the space for flooding. Regulating development near the river is a cost effective, environmentally sound means of preventing flood


Page 616

http://youtu.be/T3LeXtqfN7Y

Business Case #10



damage (source UTRCA).

Important dates in London’s flood history (source UTRCA):

• 1883 – 12 deaths and extensive property damage

• 1937 - 1,100 homes destroyed in London, 5 deaths across the Upper Thames River watershed

• 1947 – Upper Thames River Conservation Authority established

• 1968, 1977, 1997, 2000, 2008, 2009 - significant flood events controlled by utilizing floodplains, and flood control structures (dykes, dams)


Residents and property no longer included in the flood way below the 100 year flood line are no longer exposed to the implications of incurring a significant event. Flooding in the context of a 100 year event no longer poses as great a risk subsequent to floodplain acquisitions being made.

Impacts

a) Community

Safer less flood prone communities. Active acquisition in cooperation with conservation authorities provides for proactive mitigation of significant flood events. Improved pathway and trail systems in support of green space created by the program.


Public education, media releases/stories co-operation with URTCA efforts in the context of watershed conservation


Page 617

Business Case #10




Floodplain acquisition properties, when no longer a going concern, is added to the inventory of green space within the community. Added green space provides betterment through its public utility to the population at large.

Risks

Developed floodplain areas within the City increase the likelihood for loss of property and life associated with significant flood events. Acquisitions under the floodplain acquisition program mitigate these risks for residents within the community.

Reducing the funding to zero leaves little or no room to manoeuvre or continue to acquire floodplain properties.


Page 618

Business Case #11

Service Corporate Financing Initiative Service Improvement Capital Project for Transportation Services

Downtown On-Street Pay & Display Parking Meters (TS4207) Financial Implications ($ 000’s)

2014 Net Change to

Property Tax Levy


%


returned)

(175) -0.04% (1,750)

Recommendation


Background

In recent years Council approved replacing the aging individual meters with new master meters utilizing pay ‘n display parking technology. Initially master meters were installed on Dundas Street and on Richmond Row. This technology proved to be superior to individual meters for a variety of reasons and a plan was developed to replace on-street and off-street aging meters with new equipment based on traffic, usage, failing equipment and customer experience over a several year period. In 2012 Council approved entering into a 3 year contract with vendor expiring 2015/04/30 with fixed pricing, therefore, following the end of the current contract the price may be higher. Currently there are 66 master meters installed in the City; 39 on-street and 27 in municipally owned/managed parking lots.

Pay ‘n display machines provide value and efficiencies in maintenance, collection of coins, increased payment options, programming capability (change in rates etc.), audit functions and reduced meter downtime over individual parking meters. Individual meters are collected and maintained per space requiring more staff time dedicated to collection and repairs. Staff can check the vendor website to determine if a master meter is functioning, low on paper, battery needs charging, how much money is collected etc.

The individual meters are aging and the result is failing meters resulting in a loss of revenue, customer dissatisfaction, staff frustration and complaints. A reduction to the budget will alter the schedule for the changeover.


Page 619

Business Case #11


Downtown On-Street Pay & Display Parking Meters (TS4207)


The new master meters installed in 2012 and 2013 have been very beneficial from an operational perspective. Revenue has increased, maintenance is reduced and complaints are down.

Impacts

a) Community

Failed meters are a constant frustrating complaint amongst the public. If a citizen reports a problem with a master meter staff can easily check the status of the meter and determine if the complaint (or ticket) is valid. With individual meters this is nearly impossible to confirm as the meter may function then get plugged then function.

Master meters provide alternative methods of payment e.g. credit cards which many motorists appreciate.

Master Meters are easily programmable for rate changes etc.

Another example: Council approved free parking for on-street meters for the month of December which requires the meter staff to install caps inside the individual meter clocks to say free parking so motorists know they are not required to feed the meters. This takes several days to complete with all the meters not changed out till December 3rd or 4th with motorists paying for parking unnecessarily. If staff start installing earlier, for example in the last week of November, the City loses that revenue. With the new Master Meters programming changes take a few minutes therefore staff are not required to physically install these caps and can be redeployed otherwise.


There has not been any direct community engagement to date with respect to this program. It will, however, be identified as part of the 2014 Budget process.


Bagging meter requests and physical bagging is more efficient since one master meter covers several parking spaces.


Page 620

Business Case #11


Downtown On-Street Pay & Display Parking Meters (TS4207)

Risks

The existing individual meter casings are aging and the timing mechanisms continue to fail and have been identified in asset management study as poor to very poor condition.

Without continued capital investment in moving to pay-and-display meters in future years, an increase in the operating budget will be required to maintain and service existing machines. Noting that one FTE was previously reduced on the basis of changing out the individual meters to master meter program.

The audit function that is associated with the master meters for coin collection is highly accurate provides accountability and must be a priority.

At the end of the current vendor contract on 2015/04/30, the price per unit may increase.


Page 621

Business Case #12

Service Corporate Financing Initiative Service Improvement Capital Project for Transportation

Bike Lane Program (TS1739-14) Financial Implications ($ 000’s)

2014 Net Change to

Property Tax Levy


%


returned)

(200) -0.04% (2,000)

Recommendation


Background

In accordance with the current Official Plan, the Bike Lane Program is intended to introduce bike lanes to roadways and other cycling facilities in accordance with the City’s Bicycle Master Plan and the recently approved “Smart Moves” Transportation Master Plan. Bike lanes are added either as independent projects or in conjunction with other City works for cost effectiveness. When complete, the City of London will have a cycling network consisting of bike lanes, paved shoulder bikeways, signed-only routes, as well as multi-use pathways that will provide active transportation option available to residents both in the urban and rural areas of London.


The introduction of bike lanes around the City is still early in the stages with some currently in the core area and extending towards the University and south London and many more to come. The City has received support for the program from many Londoners through the TMP and ReThink London public process, as well as many email requests for more. In general, the bike lanes have promoted a more active lifestyle for our community and provided active transportation options.


Page 622

Business Case #12

Service Corporate Financing Initiative Service Improvement Capital Project for Transportation

Bike Lane Program (TS1739-14)

Impacts

a) Community

Eliminating the capital project for the bike lane program will result in no new bike lanes being constructed in the City for the next ten years. The TMP identified transportation modal splits that include a greater emphasis on cycling in order to achieve a more sustainable transportation system. With the City very early in the process of introducing bike lanes, further lengths are anticipated by the cycling public.


Considerable community input was received in 2005 to complete the Bicycle Master Plan and bike lanes were a key component of that plan moving forward. As new projects are created, the detail plans are available for the community to review and understand the benefits. The public has been very supportive of the program to date and many are requesting further extensions of the bike lanes to support their needs in becoming a more active community.


This project is currently listed as a Service Improvement. When other projects are carried out, the support for the bike lane installation is provided by others when this budget is available.

Risks

Council has accepted the Transportation Master Plan including cycling infrastructure improvements to promote a more active community. Without the Bike Lane Program, the network will continue to be discontinuous and not encourage growth of the cycling community. With more bike lanes, we can progress towards a continuous system and encourage more people out of their automobiles and reduce congestion and pollution around the City.

Also with no funding of the Bike Lane Program, over the coming years we cannot combine with other projects to provide the improved roadway and accommodate bicycles through newly reconstructed areas of the City.


Page 623

Business Case #13

Service Corporate Financing Initiative Service Improvement Capital Project for Facilities

Facility Energy Management (TS6217-14) Financial Implications ($ 000’s)

2014 Net Change to

Property Tax Levy


%


returned)

(500) -0.1% (5,000)

Recommendation


Background

Any reduction in implementing energy efficiency measures will negatively affect the City’s ability to achieve its targets set forth in its Energy Conservation and Demand Management plan, which it is mandated to publish annually by O.Reg. 397/11. Capital budget investment in energy retrofits provides a return on investment through energy savings, and reduced investment means higher operating costs in the future.

This proposed reduction in Capital Budget for the Facility Energy Management Program will not change the continued identification of energy savings measures but it will reduce the number of and/or scope of the measures that get implemented each year. This reduction in implemented energy savings projects will result in an increasing backlog of unrealized energy savings (operational cost increases) which at some point will more than offset the capital budget savings associated with this service change.

The Facility Energy Management Program is one of the key initiatives focused on keeping the City of London’s facilities in service while maintaining the lowest possible lifecycle costs going forward. By indentifying and incenting the reduction of wasteful use of energy resources, the program also helps curtail green house gas emissions and helps the City sustain its level of service to the public. Facility operating costs and in particular energy costs continue to increase annually (approximately 8% per year) and are expected to continue for the foreseeable future.


Page 624

Business Case #13


Facility Energy Management (TS6217-14)


This service change will primarily affect the quality and quantity of energy savings measures that get implemented either as standalone projects or as energy efficient components of larger projects. Corporate greenhouse gas emissions will not be reduced as quickly as anticipated and the ascent of energy costs will increasingly outpace the City’s ability to offset them with energy usage reductions through the implementation of energy savings measures.

Impacts

a) Community

If this reduction is implemented, this service change could at some point affect the delivery of services provided by the City of London to the public. • As the demand for City services increases, so too does the energy usage and the costs associated with the energy usage. • As energy costs continue to increase there is downward financial pressure on the ability to provide the services desired by the public. • Examples of energy sensitive services include sports fields lighting, artificial ice refrigeration plants and community centre room rentals

(heating, cooling and lighting). • In order to reduce the energy usage and control costs in a given facility, the City must either reduce the facility size, curtail use of the

facility or reduce its energy consumption per unit of area (i.e. kWh/ft2) by installing high efficiency equipment, building automation systems and implementing awareness campaigns to encourage conservation.


There has not been any direct community engagement to date with respect to this program. It will, however, be prudent to convey to the public the implication of any reduction initiative on the delivery of services and programs.

At every Mayor’s Sustainable Energy Council meeting, City staff provides an update on corporate energy management activities including


Page 625

Business Case #13


Facility Energy Management (TS6217-14)

energy related projects for which Facilities Management is the lead.


The Facility Energy Management Program is designed to help any City of London department achieve energy savings by offering technical support, energy usage analysis and helping find funding and incentives for relevant projects. Affected City of London services include:

• Parks and Recreation Programs • Neighbourhood and Children Services Programs

Risks

By controlling consumption through capital retrofit programs the City can mitigate the effect of rising energy costs. The sustained rise in energy costs will continue to negatively impact future operating costs. A proposed reduction in this capital program investment will further compound the impact on operating budgets.

• As energy costs increase (as they currently are) there is downward financial pressure on the ability to provide the desired services.

• Any delay in implementing currently identified energy projects could jeopardize the City’s ability to qualify for third party incentive programs which are usually offered for a limited time. As a result the City will bear the full cost of any energy efficiency projects. For example the City recently commissioned an asset energy audit at cost of $80,000 of which $40,000 will be recovered via third party incentives.

Any reduction in implementing energy efficiency measures will negatively affect the City’s ability to achieve its targets set forth in its Energy Conservation and Demand Management plan which it is mandated to publish annually by O.Reg. 397/11.


Page 626

BUSINESS PLAN: Finance





A caring community

The Finance service area is responsible for providing sound financial leadership, planning, advice and reporting to Council, the Corporation and

the Community. Financial business support is provided to all services across the corporation who in turn support all of the results. The strong

financial position of the City provides continued and sustainable funding for existing services and has allowed flexibility to take advantage of

opportunities to further support the results.

Name the main activities done to provide this service:


(optional)


Service?


Changed?

1. Planning – business support, systems issues; analytical analysis

Yes Yes

2. Budgeting & Business Plans – operating and capital: development, monitoring

Yes Yes

3. Transactional Processing – A/P, A/R, account review, debt and cash management, cost accounting

Yes Yes

4. Reporting – financial statements, service reviews, statutory reporting and compliance, council reports, performance measurement, benchmarking, maintaining account structures.

Yes No


Page 627

What is the current state of this service?

Transaction volumes continue to increase, putting pressure on existing resources to cope and adapt to additional workload while maintaining

tight financial controls. While the requirements of PSAB 3150 (including Tangible Capital Asset Reporting) have been met, significant process re-

engineering, system design and reporting enhancements are necessary to streamline the process holistically. Unquestionably, this will require

significant resources from across the Finance division and other areas as well.

The Accounts Payable EFT payment process now includes an email to the payee with the details of the transaction. This reduces paper, postage

and the effort required to print, seal and mail the deposit notice. A number of organizations from both the social services sector and

construction industry have praised the City's adoption of EFT.

The Business Administration area has been established to centralize budget development and monitoring; business plans; service reviews and

key financial support to all services.

The Financial Planning & Policy section is moving towards the development of a more strategic budget document that will allow for better

community engagement and Council decision making. In addition, the Financial Planning area is assisting service areas across the Corporation to

develop best budget practices by ensuring financial policies and procedures are followed and consistent with corporate guidelines and

directives. Financial Planning & Policy administers and manages: the city reserve funds and reserves to ensure appropriate balances are

maintained in order to support the City’s needs, debt portfolio to ensure debt is utilized in a strategic manner for key City projects (timing of

debt issuances, debt levels as % of operating revenue), as well as manages the cash/investment portfolio on behalf of the Corporation.

What is the future direction of this service?

Financial Services will continue system development and review of business processes to improve efficiencies in all areas which will increase

section capacity and lower overall costs to the Corporation. One major step forward to aid both the transaction volumes and PSAB 3150 was the

major JD Edwards system upgrade which was completed in November 2012. This project provided the opportunity for key staff to focus on

these, and other enhancements. A stable, upgraded system also provides a springboard for further automation and efficiencies in the future.


Page 628

What is the future direction of this service? (cont’d)

Business Administration will continue to work with services to ensure financial practices are being adhered to, provide financial advice and

liaison within the Finance Division. Refinement of the budget development and monitoring process will be undertaken.

Financial Planning and Policy will continue to develop financial policies and practices to ensure best practices are put in place and communicated

to service areas across the Corporation. Best budget practices such as the development and approval of a 4 year Operating Budget at the start

of a new Council term will be explored in greater detail to ensure cost and service delivery certainty for core municipal services. Furthermore,

the section will continue its efforts in integrating and reporting of key performance measures into the budget development and monitoring

report cycles and in providing sound financial advice to all services areas.


2014

TCA Business Process Improvements Implement systems and process changes within the Budget, Accounting, Accounts Payable and Purchasing areas to reduce administrative costs and improve the efficiency and effectiveness of compiling the information required for TCA.

Actions Resources from across the organization will be required to assist with making improvements and reducing the amount of effort required to gather the information necessary for TCA reporting (PSAB 3150).

Outcomes and measures Completion of the TCA portion of the Financial Statements by March 15 in order to enable the year-end audit to be completed on schedule and with reduced effort (less overtime).

New System Implementations and Business Process Reviews In the last quarter of 2013 and well into 2014, the City will be initiating a number of major systems projects that will require the expertise of Financial Services staff. Staff will be involved in the planning, development, documentation, process reengineering, testing, procedure creation, interface design and training for these new implementations.


Page 629


2014 (cont’d)

PSAB 3410 Government Transfers As part of the 2013 Financial Statements, Financial Services will implement revised accounting for Government Transfers in accordance with the Public Sector section 3410, which is new for 2013 year ends.

Debenture The City of London anticipates to issue debt in 2014 ($40 million estimate) in order to support approved City projects that require debenture financing.

2015 – 2018

2015 - Major JD Edwards (ERP) System Upgrade Financial Services will be providing staff and leadership on a major JDE Enterprise Resource Planning (ERP) System Upgrade. The JDE system includes Payroll, Budget, Accounts Payable, Work Orders, Fixed Assets, Purchasing, Inventory, Address Book, Accounts Receivable and General Ledger. An ERP provides for data input, storage, retrieval and analysis features to meet corporate business needs. In 2015, significant corporate resources will be required to staff the project team. Backfilling of key positions may be required. Suitable project space will be required for the duration of the project.

Policy Review As part of the 2015-2018 budget cycle, Financial Planning and Policy will implement reviews of key financial policies such as reserve fund, revenue, debt, assessment growth, surplus in order to ensure the financial framework the municipality operates by is current and consistent with best budget practices.

PSAB 3450, 2601 and 3260 As part of the 2014-2017 Financial Statements, Financial Services will implement revised accounting for Financial Instruments, Foreign Currency Translation and Liability for Contaminated Sites in accordance with the Public Sector sections 3450, 2601 and 3260 which are new over various years for 2014-2017 year ends.


Page 630

Key Performance Indicators

Description of measure 2012 2013 2014 2015 2016 2017 2018

How Much? 1. Accounts Payable Transaction Lines Processed 129,823 129,000 130,000 131,000 132,000 133,000 134,000

2. Number of Accounts Payable Cheques Issued 26,796 26,000 25,500 25,000 24,500 24,000 23,500

3. Number of Electronic Fund Transfers Processed 5,916 6,200 6,400 6,600 6,800 7,000 7,200

4. Number of Accounts Receivable Invoices Issued 15,760 16,000 16,200 16,400 16,600 16,800 17,000

5. Number of Active Capital Projects 610 625 640 655 670 685 690

6. Number of Active Capital Project Financing Reports

163 150 155 160 165 170 175

7. Number of Active Securities on Development & Subdivision Agreements

776 745 760 780 800 850 875

8. Number of Contracts Administered 110 82 82 82 82 82 82

9. Number of Social Assistance Payments 207,706 210,000 210,000 214,200 214,200 216,300 216,300

10. Number of Monitoring Reports Issued 204 204 204 204 204 204 204

11. Number of Lawyer’s Letters Processed 285 285 285 285 285 285 285

How Well? 12. Cost of Accounts Payable Function per

Transaction Line 3.8 4.1 4.1 4.2 4.2 4.3 4.3

13. Internal Management Operating Expense Ratio – Investment Portfolio

.01% .01% .01% .01% .01% .01% .01%

14. Cost of Accounts Receivable Function per Invoice 21.26 22.0 22.5 23.0 23.5 24.0 24.5

15. % of Accounts Receivable Billings over 90 days 32.6% 20% 20% 20% 20% 20% 20%

Is Anyone Better Off? 16. % of Accounts Payable Invoices Paid within 30

days 82.4% 80% 80% 80% 80% 80% 80%

17. Dollars in supplier discounts taken through Accounts Payable

$147,380 $149,000 $150,000 $151,000 $152,000 $153,000 $154,000

18. Moody’s Credit Rating Aaa Aaa Aaa Aaa Aaa Aaa Aaa

19. Total Federal/Provincial Subsidy Collected ($000’s)

131,772 137,317 143,601 141,988 145,377 148,810 152,241


Page 631

2012 2013 2014

Object

ActualRevised

Budget

Maintain

Existing

Service

Service

Adjustments

Requested

Budget

Expenditures $ %

Personnel Costs 7,330 7,392 172 7,564 172 2.3%Administrative Expenses 72 144 13 157 13 9.0%Financial Expenses 129 5 0 5 0 0.0%Purchased Services 33 67 9 76 9 13.4%Materials & Supplies 64 95 2 97 2 2.1%Furniture & Equipment 3 43 2 45 2 4.7%Recovered Expenses (334) (366) (83) (449) (83) 22.7%

Total Expenditures 7,297 7,380 115 0 7,495 115 1.6%

Revenue

Government Grants & Subsidies (874) (892) (29) (921) (29) 3.3%User Fees (49) (54) (1) (55) (1) 1.9%Other Municipal Revenues (894) (913) (17) (930) (17) 1.9%

Sub-total - Non Property Tax

Revenue(1,817) (1,859) (47) 0 (1,906) (47) 2.5%

Net Budget 5,480 5,521 68 0 5,589 68 1.2%


Increase in salary, wage and fringe benefits due to existing employment agreements.

Purchased Services reflects increased advertising costs to properly advise citizens and budget meetings/workshops and increased costs for maintenance of the CAPRS (Ontario Works cheque production) system.

Furniture and Equipment increased to address health and safety concerns as well as normal replacement.

Government Grants revenue increased due to additional Ontario Works costs of administration subsidy as a result of increased personnel costs and operating expenditures as well as increased staffing allocations to support Ontario Works.Increase in water and wastewater utility recoveries for services provided.

Administrative Expenses increased due to increased costs for education/training and travel for conferences/seminars in order for staff to maintain designations and keep informed of financial issues.

Materials and Supplies increased to reflect inflationary pressures.

Recovered Expenses increase is due to recovery of a temporary staff person hired to assist with the JD Edwards upgrade being funded through capital.


Finance2014 Budget As Submitted

($000's)Explanation of Adjustments


2013


Page 632

Budget Forecast

Object

Expenditures 7,380 7,495 7,657 7,725 7,795 7,875 495Non-Property Tax Revenue (1,859) (1,906) (1,932) (1,959) (1,986) (2,014) (155)Property Tax Supported (Net Budget) 5,521 5,589 5,725 5,766 5,809 5,861 340

Increase / (Decrease) Over Prior Year 68 136 41 43 52 340Increase / (Decrease) Over Prior Year % 1.2% 2.4% 0.7% 0.7% 0.9% 6.2%


StaffingFull-Time Equivalents # 89.4 89.4 88.4 88.4 88.4 88.4Increase / (Decrease) Over Previous Year 0.0 (1.0) 0.0 0.0 0.0Full-Time Employees # 88 88 88 88 88 88Increase / (Decrease) Over Previous Year 0 0 0 0 0


One temporary full time position in Financial Planning Policy fully funded from JD Edwards capital project. Position ends in 2014.

Finance2014 - 2018 Budget Forecast & Staffing

($000's)

2013

Revised

Budget

2014

Requested

Budget

2015

Forecast

2016

Forecast

2017

Forecast

2018

Forecast

2014 to 2018

Projected

Increase


Page 633

BUSINESS PLAN: Corporate Investments & Partnerships





A caring community

Corporate Investments and Partnerships service area primarily supports the Strong Economy strategic result. Through project management and

delivery, activities in the Corporate Investments and Partnerships service area will support other strategic results in a secondary manner. For

example, ‘A caring community’ is supported through London’s Innovation and Commercialization Network and ‘A vibrant and diverse

community’ is supported through the investigation into a mixed use development including a performing arts centre.

Goal: The Investment and Economic Prosperity Committee (IEPC) is developing a 10-year plan that will move London’s Economy

forward faster and ensure long term prosperity for our community.

Objectives: Create Jobs; Leverage Investment; Stimulate spin-off benefits; Build beneficial partnerships; Benefit key sectors; Fuel

transformational change in London’s economy.

Vision: London, Ontario will be a prosperous city which is recognized as: open for business; supportive of our business community and

focused on fostering new business opportunities.

Mission: The Corporate Investments and Partnerships Service Area will seek and review potential business opportunities; support

business case and business plan development; manage existing projects and make recommendations from a return focused,

profit maximization perspective.

Clients: Building from the Prosperity Plan process in which community members were asked to present ideas to move London’s

Economy forward faster and ensure long term prosperity for our community, the Corporate Investments and Partnerships

service area serves to seek out, review and analyze potential business opportunities that support economic prosperity.

Customers: Any City of London Service Area that is in need of support with the creation of business plans, business cases, investment

analyses and/or a for profit focused review of an opportunity is our customer.


Page 634

Name the activities done to provide this service:


(optional)


Service?


Changed?

1. Support the evaluation and review of potential business ideas presented to the City of London

49 Business ideas reviewed and formally presented to City Council

No Yes

2. Manage investment and partnership projects approved by City Council

Five major projects currently being managed

No Yes

3. In association with partners, research local economic conditions and provide updates

No Yes

4. Seek out new investments, partnerships and business opportunities for the City of London

No Yes

What is the current state of this service? Current Objectives / Milestones During the June 2012 IEPC meeting, a request for ideas was made to the community where 49 prosperity proposals were presented. In October

of 2012, Proponents were requested to complete a due diligence checklist; 12 checklists were returned which were reviewed using a business

centred approach focused on economic development. An analytical tool containing 23 criteria directly related to the stated objectives was

applied. City of London financial constraints were considered.

On December 18, 2012, the Corporate Investments and Partnerships staff prepared a report for IEPC that presented a shortlist for the purpose

of accelerating London’s economy and fostering private sector investment in the City. The report discussed the Industrial Lands Development

Strategy and analyzed 49 proposals/ideas that were brought forward to the IEPC in June of 2012, in an effort to present business ideas that

would stimulate the economy and would help to grow prosperity in the City. This report presented five proposals best suited to the

advancement of the goal and objectives of London’s Prosperity Plan.


Page 635

1. Development of strategically located serviced lands for LEDC to market.

2. The City of London enter into more formal discussions with Kilmer Brownfield Equity Fund and London Hydro regarding the potential

sale and redevelopment of the land at 111 Horton St. East.

3. Consider a mixed use development/investment in the downtown.

4. Investigate the possibility of committing $1 million per year over 10 years to support a medical research fund.

5. Consider funding the joint proposal from 2 employment support programs for one year on a pilot basis.

What Is Driving This Service? On January 23, 2012 Municipal Council was presented with the ‘Developing a Strategic Investment and Economic Prosperity Plan’ report, where

a process was proposed for the purpose of developing the Strategic Investment and Prosperity Plan. Outlined in that report was a proposed

process by which selected projects would move from conception to implementation. As a result the City of London received 49 ideas from

members of our community. All delegates who brought forth a proposal, and for which contact information was available and communication

direction provided, were asked to complete the due diligence checklist for short listing projects.

As part of the due diligence review, the submission and satisfactory completion of the specific elements listed within the checklist were essential

for the proposal to move forward. For the proposals where a completed checklist was not submitted a fair review and categorization took place.

The primary evaluation of the proposals was based on careful review and analysis of the proposed ideas in relation to the listed definition of

economic development; this analysis allowed for the appropriate classification of the proposals based on the four proposed categories:

Economic Development, Social Prosperity, Idea Bank, or Other.

Challenges and Pressure Points

Uncertainty associated with the global economic recession presents certain challenges for the City of London. In accordance with the

Conference Board of Canada (Summer 2013) economic insight, the local economic conditions are not expected to improve a great deal in 2013.

The continued weakness in the public sector and in manufacturing will limit economic growth in the city to 1.2% this year; however, after two

years of negative growth there is finally a 0.1% increase in the public sector (health, education and public administration).

One of the biggest challenges and pressure points is the unemployment rate, which rose to 9.6% in the first quarter of 2013, putting pressure on

the administration to speed projects up, which could potentially impact the city’s prosperity. On a positive note, employment is predicted to

continue to grow at a moderate growth rate of 1.2% per year from 2015-2017. In short, the current local economic conditions impact the

challenges and pressure points faced by the Administration.


Page 636

What is the current state of this service? (cont’d)

Recent Achievements September 25, 2012: “A Paradigm for Economic Prosperity, Director Corporate Investments and Partnerships”

November 27, 2012: “Investment and Economic Prosperity Proposal Assessment Process, Corporate Investments and Partnerships”

December 18, 2012: “A Path to Prosperity: Community Business Ideas to Stimulate our Economy, Corporate Investments and Partnerships”

The Five Recommendations

1. Development of strategically located, serviced industrial lands Development of the 2013 Industrial Lands Development Strategy to be presented to Council in the 3rd quarter of

2013. Further direction in terms of acquisition, servicing and marketing of the City's industrial land supply will be given by Council post ILDS Strategy presentation.

2. Potential redevelopment of London Hydro lands at 111 Horton Street East for residential/commercial use Interdisciplinary team has been created; opportunity / constraint and gap analysis taking place; non-disclosure

agreement endorsed on June 24, 2013; communication among Kilmer Brownfield, Labatt's, London Hydro and Upper Thames River Conservation Authority facilitated. Terms of reference for REACH study have been complete; RFP has been issued; Draft Study Report (Phase I) to be submitted to the City by Q4, 2013; Draft Study Report ( Phase II) to be submitted to the City by Q1, 2014.

3. Competing proposals for a mixed use arts centre/residential/or commercial development by the Grand Theatre and Music London Business plans have been received from project proponents; business plans will be reviewed; public consultation will

occur; third party fairness review will be performed by NOVITA . The go forward decision to be made by Council by the end of 2013.


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What is the current state of this service? (cont’d)

4. Create a medical research fund The vision for London’s Medical Innovation and Commercialization Network was presented to IEPC on July 29, 2013

and was supported in principle subject to the preparation of a governance structure. In collaboration with St. Joseph’s Health Care Foundation, London Health Sciences Foundation, Lawson Health Research Institute, Robarts Research Institute, London Health Sciences Centre, St. Joseph’s Health Care and Western University, on July 30th, 2013 Civic Administration was directed by Council to develop a governance structure for the Medical Innovation and Commercialization Network which was presented at the August 2013 IEPC meeting.

5. Fund a joint proposal from two Employment Support Programs for one year on a pilot basis Completed in June of 2013: Contract and by-law have been approved by council; funding has been provided to

partner organizations; evaluation of program ongoing. $101,980 for the first year of program delivery was approved by Municipal Council.

What is the future direction of this service? Given that the Investments and Partnerships service area is only one year old, current objectives and milestones are the primary focus. As this

area matures, future objectives and milestones will be added. For the foreseeable future, the service drivers identified in the current state

section will continue to impact the delivery of this service in the future. Due to global economic uncertainties, the export oriented

manufacturing sector is susceptible to fluctuation. According to the Conference Board of Canada’s Summer 2013 metropolitan outlook, real

GDP is expected to grow 2.3% in 2014-2015 and housing starts are expected to decline for 2013.


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2014

1. Develop and implement a transparent, fair and efficient investment proposal evaluation process intended to serve as a guide for project/idea evaluation that will aid in the analysis of new proposed investment ideas.

Action Steps: Develop Investment and Economic Prosperity Proposal Assessment Process including specific project evaluation

tools:

Primary Analysis Tool: Due Diligence Checklist

Secondary Analysis Tool: Prospect Ranking Tool – Score Card

Secondary Proposal Project Evaluation Timeline

2. Support the evaluation and review of potential business ideas presented to the City of London in an objective, fair and efficient manner.

Action Steps: Evaluate all Investment and Economic Prosperity ideas/proposals through the use of the developed evaluation process and appropriate evaluation tools, as approved by Council.

3. Support internal business plan and business case development by working with appropriate project proponents and/or stakeholders in order to develop and/or aid with the development of project business plans; related to Investment and Prosperity ideas/proposals.

Action Steps: Perform thorough research, and prepare a comprehensive business plan where appropriate, and/or as requested by Council.

Work closely with project proponents and/or stakeholders and provide any assistance that may help with the development a formal business plan/case. The assistance may be given through telephone conversations, email and/or face-to-face meetings.

4. Seek out new investments, partnerships and business opportunities for the City of London by actively pursuing and following up on potential Capital Investment leads.

Action Steps: Actively engage in community events, conferences, and business meetings. Seek out and pursue new investment opportunities through newly developed relationships.


Page 639

What do you plan to do? (cont’d)

5. Continue to provide economic development information on the Prosperity for London website in order to ensure that the Prosperity

for London website is updated on a regular basis with up to date/accurate information as it relates to select economic development projects/ideas.

Action Steps: Prepare updated and accurate project information summaries.

Work collaboratively with the “ROMD ǀ Marketing and Design” team to ensure that the content posted on the Prosperity for London website is updated promptly.

Encourage and solicit public feedback through the prosperity website and [email protected] email address.

2015 – 2018 In future years, the Corporate Investments and Partnerships Service Area will seek and review potential business opportunities; support business

case and business plan development; manage existing projects and make recommendations from a return focused, profit maximization

perspective.

In order to advance the goal and objectives of London’s Prosperity Plan, significant focus will placed on the following goals: Create jobs; Leverage investment; Stimulate spin-off benefits; Build beneficial partnerships; Benefit key sectors; Fuel transformational change in London’s

economy.

Key Performance Indicators

Description of measure 2012 2013 2014 2015 2016 2017 2018

How Much? 1. # of proposals / ideas received and analysed n/a 49 n/a n/a n/a n/a n/a

2. # of proposals / ideas recommended n/a 71 n/a n/a n/a n/a n/a Comment* the performance indicators will flow as projects move forward in the process.

1 *Please note that the 7 proposals represent 4 recommendations (Medical Research Fund, Kilmer, Performing Arts Centre and Employment Support Network). The Industrial

Land Strategy was not part of the 49 ideas that came from the community; however, it was the 5th

recommendation.


Page 640

mailto:[email protected]

2012 2013 2014

Object

Actual Revised Budget Maintain

Existing Service

Service

Adjustments

Requested

Budget

Expenditures $ %

Personnel Costs 279 568 0 568 0 0.0%Administrative Expenses 8 24 3 27 3 12.5%Financial Expenses 41 0 0 0 0 0.0%Purchased Services 0 37 3 40 3 8.1%Materials & Supplies 4 8 0 8 0 0.0%Furniture & Equipment 6 15 (4) 11 (4) (26.7%)

Total Expenditures 338 652 2 0 654 2 0.3%

Revenue

User Fees 0 0 0 0 0 0.0%Other Municipal Revenues 0 0 0 0 0 0.0%

Sub-total - Non Property Tax

Revenue0 0 0 0 0 0 0.0%

Net Budget 338 652 2 0 654 2 0.3%



Corporate Investments & Partnerships



Increase/ (Decrease) Over 2013

Increase in purchased services to provide for increased consulting costs to support service areas.Increase in administrative expenses due to staff training requirements.

Decrease in furniture and equipment to reflect actual requirements


Page 641

Budget Forecast

Object

Expenditures 652 654 657 664 670 676 24Non-Property Tax Revenue 0 0 0 0 0 0 0Property Tax Supported (Net Budget) 652 654 657 664 670 676 24

Increase / (Decrease) Over Prior Year 2 3 7 6 6 24Increase / (Decrease) Over Prior Year % 0.3% 0.5% 1.1% 0.9% 0.9% 3.7%


StaffingFull-Time Equivalents # 5.0 5.0 5.0 5.0 5.0 5.0Increase / (Decrease) Over Previous Year 0.0 0.0 0.0 0.0 0.0Full-Time Employees # 5 5 5 5 5 5Increase / (Decrease) Over Previous Year 0 0 0 0 0


Minor inflationary increases have been forecast.

Corporate Investments & Partnerships2014 - 2018 Budget Forecast & Staffing

($000's)

2013

Revised

Budget

2014 to 2018

Projected

Increase

2014

Requested

Budget

2015

Forecast

2017

Forecast

2018

Forecast

2016

Forecast


Page 642

financial management summary of submitted 2014 budget · • invest reserve funds not required in...

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