operating overview - brampton budget/proposed...operating - 2 2018-2020 budget summary oper-3...
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OPERATING OVERVIEW
Operating - 2
2018-2020 Budget Summary OPER-3
Residential Tax Bill Information OPER-4
Municipal Price Index (MPI) OPER-5
Corporate Overview OPER-6
Departmental Breakdown OPER-7
Revenue Breakdown OPER-8
Expense Breakdown OPER-10
Staff Changes OPER-11
Reserves and Reserve Funds OPER-12
Full Accrual Budgeting OPER-19
Table of Contents
Operating - 3
The 2018 Operating Budget calls for an increase in the property tax levy of $16.5 million over 2017.
The Base Operating and Growth portion of the budget consists of delivering today’s services to
existing and new residents for 2018-2020. The 2018 Base Operating and Growth budget proposes
a reduction of $3.1 million, which was achieved through a concerted effort to modernize the
corporation, maximize the use of existing resources, become more business-like and realign how
the City works. Examples of improved efficiencies include a new e-Procurement process, winter
maintenance service improvements, increased recreation service access, as well as a new site plan
review process and 311 customer service integration.
New or Enhanced Services for 2018 require $10.7 million dedicated to Transit, Fire, Library and
Enforcement. These service increases are focused on adding value to the quality of life in our
community.
The Infrastructure Levy increase of $9.0 million in 2018 is required to maintain our existing assets
and in line with the City’s Long Term Financial Plan, which was endorsed by Council in 2017.
Assessment Growth of $11.5 million and Revenue Growth of $18.2 million are included in the 2018
Operating budget and result in reducing the overall budget increase of $46.1 million.
2018-2020 Budget Summary
CATEGORY 2018 2019 2020
Base Operating & Growth (3,094) 1,856 6,889
Infrastructure Levy 8,961 9,112 9,424
New or Enhanced Services 10,667 13,652 5,537
PROPERTY TAX LEVY INCREASE $16,534 $24,619 $21,850
BUDGET VARIANCES ($000s)
Operating - 4
RESIDENTIAL TAX BILL IMPACT
The City of Brampton is a two-tier municipality, where the resident receives one tax bill to cover the
total cost of services provided by the City, the Region and School Boards. Therefore, to calculate
the annual change to the residential property tax bill, all three components must be considered.
The City of Brampton’s proposed 2018 tax levy increase of $16.5 million translates into an increase
of $80 per year or 1.7% on the average residential property tax bill.
The Region of Peel’s 2018 tax levy increase is estimated to have a 1.0% impact on the overall
property tax bill. This impact equates to $46 per year on the average residential property tax bill.
The School Board component of the residential property tax bill is estimated to have no change for
2018.
The average residential tax bill in the City of Brampton will increase by approximately $126 in 2018,
based on the average residential assessment of $471,000.
Residential Tax Bill Information
Property Tax Levy Increase $16,534
Add:
Assessment Growth 11,450
Revenue Growth 18,157
2018 Net Budget Variance ($000s) $46,141
TOTAL TAX BILL
IMPACT - WEIGHTED% $ % $ % $
City of Brampton 1.7% $80 2.5% $130 2.2% $116
Region of Peel 1.0% $46 1.3% $69 1.1% $60
Education 0.0% - 0.0% - 0.0% -
Residential Tax Bill
Increase2.7% $126 3.9% $199 3.3% $176
* Based on the 2018 Average Residential Assessment = $471,000
** Amounts and percentages may not add to totals due to rounding
2018 2019 2020
Operating - 5
The City of Brampton’s Municipal Price Index (MPI) is calculated annually and is designed to
measure the increases in prices of goods and services purchased by the municipality.
The MPI differs from other indices such as the Consumer Price Index (CPI) in that it is constructed
based on purchasing patterns of the City rather than consumers. The MPI is a weighted aggregate
of prices which means that the price or wage increases are weighted by the relative importance that
each represents in the City budget.
Municipal Price Index (MPI)
Component WeightInflation
FactorSource
Salaries, Wages, and
Benefits55.6% 2.4%
2017 Mercer Compensation Survey/Globe and
Outside Services 6.8% 1.6% Statistics Canada - April 2017 (CPI)
Capital Contributions 8.0% 2.4%2017 Non-Residential Building Construction
Index - 1st Quarter
Heat, Hydro, and Water 2.9% 3.9% Statistics Canada - April 2017
Internal Borrowing 1.9% 2.4%2017 Non-Residential Building Construction
Index - 1st Quarter
Brampton Library 2.2% 1.6% Statistics Canada - April 2017 (CPI)
Fuel 2.5% 15.9% Statistics Canada - April 2017
Office Expenses 2.2% 1.6% Statistics Canada - April 2017 (CPI)
Winter Contracts 2.0% 6.6% Statistics Canada - April 2017
Insurance 1.7% 3.5% Statistics Canada - April 2017
Materials 1.2% 1.6% Statistics Canada - April 2017 (CPI)
Preventative and
Demand Maintenance0.9% 1.6% Statistics Canada - April 2017 (CPI)
Vehicle Repairs and
Maintenance1.1% 1.7% Statistics Canada - April 2017
Promotion and
Advertising0.6% 1.6% Statistics Canada - April 2017 (CPI)
Professional Services 0.5% 1.6% Statistics Canada - April 2017 (CPI)
Rent 1.5% 0.6% Statistics Canada - April 2017
Equipment Costs 0.3% -0.5% Statistics Canada - April 2017
Communications 0.3% 0.4% Statistics Canada - April 2017
Staff Development 0.2% 1.6% Statistics Canada - April 2017 (CPI)
Uniform and Cleaning 0.3% -2.0% Statistics Canada - April 2017
Mileage 0.1% 0.0% CRA Rates (2017 over 2016)
Vehicle Lease 0.1% -3.1% Statistics Canada - April 2017
Non Inflationary Items 7.2% 0.0% N/A
100%
Municipal Price Index 2.5%
Operating - 6
Corporate Overview
($000s) % ($000s) % ($000s) %
Base Operating and Growth (3,094) -0.7% 1,856 0.4% 6,889 1.5%
(5,712) -1.3% (829) -0.2% 4,973 1.1%
Compensation Adjustments / Provisions 9,859 2.2% 10,064 2.2% 10,494 2.2%
New Staff Requests 525 0.1% 3,812 0.8% 2,582 0.5%
Road and Traffic Infrastructure Maintenance 1,231 0.3% 1,197 0.3% 1,277 0.3%
I.T. Maintenance and Support 1,442 0.3% 981 0.2% 219 0.0%
I.T. Operating Impacts - New Systems 303 0.1% 456 0.1%
Security Contract Renewal 1,290 0.3% 345 0.1% 106 0.0%
Sub-Division Admin Fees 479 0.1%
Transformation Savings (832) -0.2%
Transit Conventional Service Increase 1,596 0.4% 1,225 0.3% 1,727 0.4%
Transit Ridership Revenue Increase (7,500) -1.7% (1,000) -0.2% (500) -0.1%
Transit Fare Increase (724) -0.2% (760) -0.2% (736) -0.2%
Presto Commission 909 0.2% 460 0.1% 1,360 0.3%
Provincial Gas Tax (200) 0.0% (2,850) -0.6% (2,850) -0.6%
Investment Income 600 0.1% 600 0.1% 600 0.1%
Hospital Levy Return (1,333) -0.3% (8,500) -1.9%
Assessment Growth (11,000) -2.5% (9,000) -2.0% (9,000) -1.9%
East-End Community Centre 1,455 0.3%
Other Variances (2,054) -0.5% 839 0.2% (761) -0.2%
2,619 0.6% 2,684 0.6% 1,916 0.4%
Minimum Wage 802 0.2% 837 0.2%
Compression 1,200 0.3% 1,200 0.3% 1,200 0.3%
Diesel Fuel Cap and Trade 617 0.1% 647 0.1% 716 0.2%
Infrastructure Levy 8,961 2.0% 9,112 2.0% 9,424 2.0%
New or Enhanced Services 10,667 2.4% 13,652 3.0% 5,537 1.2%
Zum Service Increase 4,657 1.0% 2,392 0.5% 3,467 0.7%
Fire Full Response Enhancement 1,955 0.4% 2,040 0.4% 1,845 0.4%
Fire Headquarters & Training Facility 3,200 0.7%
Second Unit Task Force 643 0.1%
Bramwest Interim Branch 212 0.0% 212 0.0%
Downtown Improvements ($31.4M) 2,027 0.4%
Centre for Innovation ($100M) 6,756 1.5%
$5M University Contribution (Investment Income Loss) 225 0.0% 225 0.0%
PROPERTY TAX LEVY INCREASE 16,534 3.7% 24,619 5.4% 21,850 4.6%
B) External Uncontrollable Impacts
2018 2019 2020
A) Base (Excluding External Uncontrollable)
Operating - 7
Departmental Breakdown
The chart below illustrates the 2017 approved and 2018-2020 proposed budgets for each
department.
($000s)2017
BUDGET
2018
BUDGET
2019
BUDGET
2020
BUDGET
DEPARTMENT BREAKDOWN
Office of the CAO $20,465 $20,331 $20,574 $20,126
Corporate Services 53,952 57,186 58,934 59,656
Planning & Development Services 1,825 1,906 2,126 2,215
Public Works & Engineering 92,168 93,372 98,421 100,608
Community Services 60,687 61,584 64,278 66,455
Economic Development & Culture 13,013 12,631 12,641 12,649
Fire & Emergency Services 66,519 73,210 77,578 81,319
Transit 63,478 66,301 67,495 70,130
Brampton Public Library 15,612 16,781 17,667 18,711
Mayor & Members of Council 3,106 3,135 3,077 3,077
General Government (390,825) (406,437) (422,791) (434,946)
Net Expenditures $0 $0 $0 $0
Proposed
Operating - 8
Departmental Breakdown
This chart illustrates the 2018-2020 proposed budgets variances by department for Base
Operating and Growth, which for 2018, results in a reduction of $3.1 million. The Infrastructure
Levy and New or Enhanced Services recommend increases of $9.0 million and $10.7 million for
2018, leading to a net property tax levy increase of $16.5 million.
CATEGORY 2018 2019 2020
DEPARTMENT BREAKDOWN
Office of the CAO (134) $243 (449)
Corporate Services 2,483 1,749 722
Planning & Development Services 189 220 89
Public Works & Engineering 1,204 3,023 2,187
Community Services 898 2,694 2,177
Economic Development & Culture (382) 10 8
Fire & Emergency Services 1,536 2,328 1,896
Transit (1,834) (1,198) (832)
Brampton Public Library 956 674 1,044
Mayor & Members of Council 29 (59) -
General Government (8,039) (7,828) 46
BASE OPERATING & GROWTH (3,094) 1,856 6,889
Infrastructure Levy 8,961 9,112 9,424
OPERATING BUDGET VARIANCE $5,867 $10,967 $16,313
New or Enhanced Services 10,667 13,652 5,537
PROPERTY TAX LEVY INCREASE $16,534 $24,619 $21,850
BUDGET VARIANCES ($000s)
Operating - 9
2018 Budgeted Revenues by Category ($000s)
Revenue Breakdown
Property Taxes$474,984
User Fees & Service Charges
$163,245
Investment &
Other Income$15,110
Contribution from
Reserves
$13,299Grants & Subsidies$11,347
70.1 %
1.7 %
2.0 % 2.2 %
24.1 %
Operating - 10
2018 Budgeted Expenses by Category ($000s)
Expense Breakdown
Category 2018 Budget $ 2018 Budget %
Salary, Wages & Benefits 392,388 57.9%
Contribution to Reserves & Capital 74,064 10.9%
Repairs, Maintenance & Materials 42,595 6.3%
Contracted Services 41,343 6.1%
Utilities & Fuel 36,512 5.4%
Financial Services 20,127 3.0%
Grants, Subsidies & Donations 19,171 2.8%
Office & Administrative 14,428 2.1%
Internal Borrowing Repayments 11,302 1.7%
Rent & Lease Charges 9,601 1.4%
Professional Services 7,143 1.1%
Advertising, Marketing & Promotion 6,074 0.9%
Staff Development 3,237 0.5%
Total Budgeted Expenses 677,985 100.0%
Operating - 11
For further details on individual position requests, see Section 7 - “Staff Requests”.
Staff Changes
DEPARTMENTS 2018 2019 2020 TOTAL
Office of the CAO 0 2 0 2
Corporate Services 7 5 1 13
Planning & Development Services 5 6 1 12
Public Works & Engineering 0 8 0 8
Community Services 7 21 19 47
Economic Development 0 0 0 0
Brampton Public Library 6 5 6 17
Mayor and Members of Council 0 0 0 0
Fire and Emergency Services 20 28 23 71
Transit 62 35 49 146
DEPARTMENTAL TOTAL 107 110 99 316
* Includes F/T and conversions to F/T
COMPLEMENT ADDS*
Operating - 12
Reserves are earmarked to fund programs or
projects and:
Do not reference any specific asset
Do not require segregation as in the case
of a reserve fund
Are often referred to as “contingency” or
“rainy day” funds
Are generally used towards operating
expenses
Example: General Rate Stabilization
Reserve
Reserve Funds are separate bank accounts
that:
Must remain segregated from general
operating funds
Are based on statutory requirements or
future financial commitments
Usually have restrictions and rules around
collection and use
Are of two types: obligatory and
discretionary
Obligatory Reserve Funds:
Are created when provincial or federal
statute requires that revenues are
segregated from general municipal
revenues
Can also be created as a result of a legal
agreement
Examples: Development Charges Fund;
Federal Gas Tax Reserve Fund
Discretionary Reserve Funds:
Are created when Council wishes to
earmark revenue to ensure funds are
available as required to finance a future
expenditure
Examples: Legacy Fund; Community
Investment Fund; Brampton University
Reserve Fund
Reserves and Reserve Funds are established by Council to help pay for future costs and are:
Designated for specific purposes
Meant to assist with long-term financial planning
Reserves and Reserve Funds
Operating - 13
Contributions to Reserves include contributions in support of current and/or future tax based
capital asset repair and replacement, self-insurance deductibles, WSIB claims provisions and
Municipal elections.
The 2018 Operating Budget includes contributions to reserves and reserve funds (estimated) as
follows:
Reserves and Reserve Funds
Reserve
Fund #Reserve Fund Description
2017
Budget
2018
BudgetVariance
3 Workplace Safety and Insurance Board $2,004 $2,087 $84
4 Asset Repair and Replacement $45,169 $53,585 $8,416
8 Self Insurance of Deductibles 4,609 4,609 0
10 Corporate Facilities 255 304 49
23 Brampton Columbarium 4 4 0
25 Municipal Elections 600 600 0
37 Official Plan Review 120 120 0
58 Theatre Capital Improvements 75 75 0
78 10% Non Development Charge 4,899 4,899 0
126 Peel Memorial Hospital 9,833 8,500 (1,333)
127 Major Maintenance Reserve Fund 634 634 0
128 Brampton Starter Company 0 375 375
134 Development Charges - Recreation 59 59 0
211 Interest Rate Stabilization Reserve 300 300 0
TOTAL ($000s) $68,561 $76,151 $7,590
Operating - 14
Capital Contributions (Res #4, Res
#10, Res #58, Res#127, Contribution
to Capital)
These contributions are required to support
current and future tax based components of
the capital program, the majority related to
repair and replacement of existing City assets.
For 2018, the operating budget includes a base
contribution of $54.6 million.
Municipal Elections (Res #25)
A contribution to this Reserve Fund is made
annually to spread election costs more evenly
between elections.
10% non-DC Contribution (Res #78)
As the City continues to grow, the requirement
to fund growth driven capital infrastructure
projects has remained unabated. The growth
funding from Development Charges comes
with an associated tax based funding need to
support the non-DC eligible portion of capital
projects.
Peel Memorial Hospital (Res#126)
As previously endorsed by Council on April 3,
2013, an annual tax contribution of
approximately $9.8 million, commencing in
2013 and ending in 2018, was approved to
support the new Peel Memorial Centre for
Integrated Health and Wellness. Due to the
City’s prudent investment practices, the 2018
requirement has been reduced to $8.5 million.
Funds will be held in a Reserve Fund until
payments are due in accordance with
Memorandum of Understanding between the
City of Brampton and William Osler Health
Services.
Reserve Descriptions
Reserves and Reserve Funds
Operating - 15
Draws from Reserves include required draws from Reserves to support the current year’s
operating functions.
The 2018 Operating Budget includes draws from reserves and reserve funds (estimated) as
follows:
Reserves and Reserve Funds
Reserve
Fund #Reserve Description
2017
Budget
2018
BudgetVariance
Contribution from Trust Funds $36 $21 ($16)
General Rate Stabilization Reserve 2,913 2,939 26
3 WSIB Fund 1,472 1,872 400
8 Self Insurance of Deductibles 3,080 3,510 430
19 Employee Benefit Rate Stabilization 350 350 0
25 Municipal Elections 63 1,800 1,737
78 10% Non Development Charge 1,015 1,015 0
89 Provincial Dedicated Gas Tax - Transit 10,682 10,882 200
93 Building Rate Stabilization 8 2,158 2,150
128 Brampton Starter Company 0 195 195
138 Development Charges - Parking 454 454 0
100/110/120Legacy, Community Investment and
Community Development Funds9,000 9,000 0
TOTAL ($000s) $29,073 $34,196 $5,123
Operating - 16
Self Insurance of Deductibles (Res #8)
As a result of the City’s growing
infrastructure base, insurance costs are also
increasing (e.g. community facilities, transit
fleet, etc.)
Dedicated Gas Tax (Res #89)
The Provincial Dedicated Gas Tax Funds for
Public Transportation Program provides
funding of $10.9 million in 2018. The
Province has announced that this program
will double between now and 2022, which
will translate to over $10 million additional
funding expected over the coming years.
Municipal Elections (Res #25)
Draw down required to offset ongoing
operating costs associated with municipal
election planning.
Legacy Fund
This reserve fund was originally established
with a $100 million balance, which has been
maintained. Annual interest on the balance
is built into the base budget to offset tax levy
needs (currently targeted at $4.5 million).
Community Investment Fund
This reserve fund was originally established
with a $100 million balance and is almost
fully committed annually. Internal loans for
initiatives such as the Rose Theatre, parking
garages, POA Courthouse, and
administrative space have been made with a
long term payback horizon. “Revolving
loans” continue to be made as principal is
repaid and funding is made available.
Annual interest on the fund, including loans
outstanding, is built into the base budget to
offset tax levy needs (currently targeted at
$4.5 million).
General Rate Stabilization Reserve
The remaining base budget for 2018
includes a $2.7 million provision to fund
operations. The General Rate Stabilization
Reserve draw is used on an annual basis to
mitigate tax pressures.
Reserve Descriptions
Reserves and Reserve Funds
Operating - 17
Reserve Balance Details
Interest Rate Stabilization
This reserve fund has a balance of $11.3
million. It is recommended that the balance be
protected for use in mitigating any shortfalls in
investment income from the Legacy Fund and
Community Investment Fund.
Building Rate Stabilization
This reserve fund, established pursuant to Bill
124 changes in the Building Code, is available
for building operations only, to offset temporary
shortfalls in building permit revenue. This
reserve fund has a balance of $38.1 million.
General Rate Stabilization (GRS) Reserve
This reserve is intended to smooth the impact
on the tax base of major unforeseen or
unavoidable events and one-time impacts.
Council has provided direction to maintain a
target in this reserve at 10% of budgeted gross
annual operating expenditures, which equates
to a reserve requirement of $67.8 million for
2018. The current GRS Reserve balance is
$74.9 million. The 2018 Capital Budget
proposed $4.8 million worth of projects funded
from this reserve with further reserve draws
anticipated as the City invests in large key
initiatives.
Development Charge (DC) Reserve Funds
DC reserve funds are in a surplus position of
$87.7 million. For more information on
projected DCs, refer to the “Development
Charge Reserve Projection” in the 2018-2020
Capital Budget Overview.
Cash In Lieu of Parkland
There was a balance in this reserve fund of
$99.5 million. This fund has limited cash
inflows from receipts and sizeable land
acquisition costs in the short to medium term.
It is therefore critical that a cash flow strategy
be considered as part of the long term
funding plan.
The City has several reserves and reserve funds, which have funding balances that change from
year to year. Supplemental Details - “Reserves and Reserve Fund Balances” shows the
preliminary year-end reserves and reserve fund balances as at September 30, 2017. Commentary is
provided below for some key Reserves and Reserve Funds.
Reserves and Reserve Funds
Operating - 18
Legacy, Community Investment, and
Community Development Reserve Funds
The balance in these reserve funds are
Legacy ($100 million), Community
Investment ($24.6 million), and Community
Development ($0) respectively.
The Legacy Fund has generated more than
$79.4 million in interest revenue since the
inception of the fund. Of this, over $62.7
million has been transferred to the Operating
Budget during that time, which has offset tax
levy requirements and the balance has been
transferred to the Interest Rate Stabilization
reserve Fund.
The Community Investment Fund has
outstanding internal loans of $84.9 million
committed against this fund for initiatives
such as the Rose Theatre, Provincial
Offences Act Courthouse and public works
yards. Annual interest of $4.5 million on the
fund has also been built into the base budget
to offset tax levy needs. The remaining
uncommitted balance plus annual principal
repayments are forecasted to be allocated to
internal financing of capital projects beyond
2017.
The Community Development Fund has
been fully drawn down for projects of citywide
benefit and was closed out in 2009. Funding
was committed towards initiatives such as
the Rose Theatre, downtown revitalization,
Sheridan College and Alderlea.
Reserves and Reserve Funds
Reserve Balance Details
Operating - 19
Municipal government budget methods have
historically been focused on the annual cash
requirements to operate the municipality and
the associated property tax needed to fund
operations.
With the introduction of Public Sector
Accounting Board (PSAB) changes with
respect to the tangible capital asset reporting
(TCA) in 2009, additional financial information
has become available, such as annual
depreciation expense and developer
contributed assets that were not previously
reported in the City’s financial statements or
budgets prior to this change.
Full accrual budgeting provides stakeholders
with a better reflection of the long term financial
health of the municipality for decision making
purposes.
Full accrual budgeting also serves to meet the
disclosure requirements of Ontario Regulation
284/09 - Budget Matters - Expenses.
The full accrual budget for 2018 projects a net
surplus of $87 million. This surplus is primarily
due to developer contributed assets,
recognized development charges and other
grants and subsidies, such as gas tax funding.
Full Accrual Budgeting
Property Tax Related Expenditure Budget $677,985
Less:
Contributions to Reserve Funds 76,151
Add:
Amortization (Depreciation Expense) 129,459
Project Expenses that are Operating in Nature 40,686
Post Employment and Other Liabilities 4,600
Full Accrual Expenditure Budget 776,579
Property Tax Related Revenue Budget 677,985
Less:
Contributions from Reserve Funds 34,196
Add:
Recognized Development Charges, Grants & Subsidies 164,113
Developer Contributed Assets 44,215
Interest Earned on Reserves 11,477
Full Accrual Revenue Budget 863,594
Net Surplus / (Deficit) $87,016
Operating - 20
Developer contributed assets consist of the
City taking ownership of subdivisions built by
developers. The value of the subdivision is
included on the City’s balance sheet as an
asset and must therefore be operated,
maintained and depreciated.
Recognized development charges are sources
of funding received from developers and
utilized during the year to fund growth-related
assets, such as new roads and parks. PSAB
rules require that development charge
revenues be recognized on the City’s
statement of operations when the
corresponding investment in growth funded
assets occurs.
Other grants and subsidies such as gas tax
funding are sources of funding contributed to
the City for specific purposes and cannot be
used to offset property tax funding. Gas tax
funding is primarily used for transit and
infrastructure related projects and is recognized
as revenue when the corresponding investment
in the infrastructure occurs.
Although the 2018 full accrual budget indicates
a surplus position of $87 million, this is largely
due to the City of Brampton’s current growth
cycle and cannot be used to offset property
taxes.
Full Accrual Budgeting