tabling of 2017 draft budget and lrcf -...

Michael Wildman, CAO

Tabling of 2017 Draft Budget and

LRCF

Council Meeting – Monday, January 9th, 2017

Draft Operating and Capital Budget

2

Guiding PrinciplesArnprior Strategic Plan

• Vision: Sustainable financial model: Measured by debt ratios and a sound long range financial plan in place

• Vision: Improved infrastructure: We have an implementable 10 year capital plan including a lifecycle strategy for all assets. (Note: New 20yr LRCF in 2017)

3


• Strategic Plan - 2013 to 2017

– 2013 Key Priority Area & Action Plan

• Financial Model (2013 Budget, 10 Year Long Range Capital Forecast, Resolve & Improve Financial Issues)

– 2014 & 2015 Key Priority Areas

• Infrastructure, Economic Development and Marketing

– 2016 & 2017 Key Action Plan Item

• Town Centre/Square Completed

4


• Strategic Plan Refresh – 2015 to 2019 –now extends the plan by two years

– Official Plan “Arnprior Centric” (2015 start)

– Downtown Revitalization (2015-2017)

– Waterfront Development (2018-2019)

– Recreation Master Plan Implementation (2015-2019)

5

Budget Approach

• 2017 Draft Operating Budget

– Comprehensive review of every line item

– 3 Year Trend Analysis of every line item

• The “Pay-as-you-go” principle continues to be the vanguard in order to avoid new long-term borrowing, pay down debt and to build reserves to fund future expenditures

6

Financial Controls

• Since 2013 several new financial controls have been established.

• Two key controls implemented are the 80% rule and expenditure earmarking

• CAO has implemented the 80% rule on Discretionary Spending to control and mitigate cost center overages

7

Financial Controls

• CAO requires “earmarking” to be identified prior to allowing overages to ensure that there is either an offsetting revenue or cost savings wherever possible, pursuant to the Delegation of Authority By-law

8

Financial Controls - Results

9

Revenues Expenses Variance

2015 Budget 16,840,896$ 16,840,896$ -$

2015 Actuals 17,001,756$ 16,901,046$ 100,710$

Variance ($) 160,860$ (60,150)$ 100,710$ Variance (%) 0.95% -0.36% 0.59%

Total 2015 Revenues and Expenses were within 0.59% (less than 1%)

of total Budgeted Amounts.

• Forecast little to no surplus for 2016

2017 Operating Budget Format

• Column 1 – 2016 Actuals

– Note: these are unaudited amounts and some invoices remain outstanding at point of printing

• Column 2 – 2016 Budget

• Column 3 – 2017 Draft Budget

• Column 4 - Budget Variance 2016 vs 2017

10

Operating Budget Impacts

• Standard Impacts

– OMPF (increase)

– Salary Related & Benefits

• COLA, Benefit increases

– Utility Increases

– Insurance

– Policing

– Winter Control

11


• Ontario Municipal Partnership Fund (OMPF)

– 2017 allocation amount is $1,108,300 which $137,500 higher than the 2016 budget of $970,800

• Benefits

– Manulife benefit premiums are increasing for Health and Dental (4.0% overall - $12,000)

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• Utility Charges

– Trending for Hydro & Gas utilities are being monitored. Staff are taking measures to adjust the draft budget accordingly, however, it will be prudent to plan for continued increases as part of the Town’s long range forecasts.

– The Town is enrolled in various programs to help mitigate these increases such as the LAS Electricity Billing program.

13


• Insurance

– Going to market with an RFP for Insurance Services resulted in a 13% ($25,000) cost savings for insurance premiums for 2016 and a soft cap of 2% increase for 2017.

– The re-evaluation of buildings by our insurer in 2016 resulted in an additional increase of $10,000

14


• Policing Services

– Based on the new policing costing model, the per unit cost for policing has increased from $396.37 in 2016 to $398.85 in 2017 and the total number of households for Arnprior has increased resulting in an increase to budget of $44,167.

– Shift in Town funded administrative resources at the OPP building to OPP responsibility in spring of 2017 – savings of $37,650 in 2017

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• New impacts

– Winter Control

• Expanded sidewalk program and sidewalk contract increase ($)

– Downtown Revitalization Financing

• Debt repayment added to Levy, Water, Wastewater

– Downtown Maintenance

• Additional summer student to maintain downtown core and added operation costs

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• New impacts

– 0.5 FTE Public Works

• Shift in 50/50 position to 100% PW

– Museum Weekend Hours

• Pilot project for 2017

– Seasonal Market

• Pilot project for 2017 – Additional revenues for vendor fees and some expenses for set up (barricades, etc)

17

ConsiderationsSelf-Sustaining Cost Centers

• The following programs are established as self-sustaining cost centers:

– Wastewater Services

– Waterworks Services

– Waste Management

– Cemeteries

– Protection, Inspection and Control (PIC)

18

Water / Wastewater Cost Centres

• In 2015, to meet statutory requirements, Council had a 10 Year Water/Wastewater Rates Study completed

– The 2017 budget is built based on the Rate Study.

• Additional new pressures on the Water cost center will require a revision to the Rate Study to ensure sufficient collection of funds.

19

Water / Wastewater Cost Centres

• Staff will be preparing recommended amendments to the Water/Wastewater Rate Study after responses to the CWWF and OCIF Grants are received in Q1.

20

Waste Management

• 2016 was the 3rd and final year of a 3 year phase-in increase in the Garbage Rate

– $130 in 2014, $135 in 2015 and $140 in 2016

• 2017 Draft Budget includes a rate increase to $155 based on estimated contract pricing (from 2016 extension), which are currently in the tendering process.

– The increase will be required to breakeven and maintain pace with growth in future years.

21

Waste Management

• Staff will confirm a recommended rate at time of award (Feb 2017) for integration into the final budget, prior to adoption.

22

Cemeteries

• The 2017 Draft Budget includes the increase in cemetery rates and reduction in OPSS Internal Equipment Rates, as approved by council on November 28, 2016.

• The adjustments will assist with cost recovery of the cost center and a forecasted small surplus to be transferred to the Cemetery Reserve Fund.

23

Protection, Inspection and Control (PIC)

• The PIC cost center is projected to generate a surplus of $9,310 in 2017.

• The 2017 Draft Capital Budget includes a vehicle for the CBO funded through the Building Reserve Fund, to match other corporate users.

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• Pending approval of the capital request for a vehicle, the operating budget includes:

– Gas, oil and lubricants, licenses, mechanical and insurance costs as well as the removal of mileage allowance

• The current mileage usage for the CBO is similar to the Waterworks Supervisor, which is 3,300 kms annually. – Save on annual mileage costs of $1,782

25


• Should the mileage on a Town owned vehicle be approx. 3,300 kms, the total estimated annual cost would be $1,690 (which has been included in the budget)

26

Personal Vehicle Town Vehicle

Insurance $800

Fuel $500

General Maintenance $300

Plate Renewal $90

Mileage Reimbursement $1,782

TOTAL $1,782 $1,690

Net Operating Expensesby Department

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Draft 2017 Budget

• The Draft 2017 budget includes Reserve and Reserve Funds contributions of $4,051,517 which is $207,960 higher than 2016 contributions of $3,843,557.

• Contributions include:

– For levy based cost centres – no increase but maintains 2016 contribution levels

– Increases in Gas Tax funding and self-funding cost centers (water, wastewater, etc)

28

Draft 2017 Budget

• Draft 2017 Capital Budget includes expenditures of $5,883,845 which require funding in 2017 and the Downtown Financing of $1,249,126 for a total expenditure of $7,132,971, in keeping with the Downtown Financial Plan.

29

Reserve & Reserve Funds

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2017

Contributions

Reserves

Winter Control Reserve 25,000

Election Reserve 7,000

Marketing & Economic Development Reserve 15,000

Protection, Inspection, Control (PIC) 9,310

56,310

Reserve Funds

Landfill Reserve Fund 51,000

Wastewater Reserve Fund 380,842

Water Reserve Fund 317,220

Development Charges Reserve Fund 560,000

Gas Tax Reserve Fund 246,691

Capital Expenditure Reserve Fund 2,165,920

Cemetery Reserve Fund 13,600

Museum Reserve Fund 5,000

3,740,273

OCIF Formula Contribution 254,834

3,995,107

Total Contributions to Reserve / Reserve Funds 4,051,417

Pay-as-you-go Expenses

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2017 Capital

Expenditures

Expenditures from Reserves

Marketing & Economic Development Reserve 20,000

Building Reserve 25,000

45,000

Expenditures from Reserve Funds

Gas Tax Reserve Fund 251,409

Development Charges Reserve Fund 1,630,876

Wastewater Reserve Fund 1,210,935

Water Reserve Fund 934,060

Capital Expenditure Reserve Fund 2,805,857

6,833,137

OCIF Formula Contribution 254,834

7,087,971

Total Expenditures from Reserve / Reserve Funds 7,132,971

Works in Progress (WIP)

• 2016 Capital Projects

– Some will carry over into 2017, or may yet to have final invoicing completed when the draft budget was prepared.

• A WIP by-law will be provided with more up to date year end information before deliberations on February 21-22, 2017.

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Reserve Balances

• Reserve & Reserve Fund Balances

– Balances provided herein are best estimates using information available at the time of preparing the draft budget and may not have been finalized and are unaudited.

– Balances are estimates based upon a number of variables such as status of carry-over WIPs, progress payments yet invoiced, and offsetting grants applied to final project costs.

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ContributionsReserve & Reserve Funds

• The Reserve and Reserve Fund Policy sets annual contribution requirements for a number of reserve funds and set minimum balances for others.

• All annual contribution requirements for reserve and reserve funds are being met in the 2017 draft budget, but minimum balances have not been achieved for reserves.

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35

RESERVE & RESERVE FUNDS

(w annual requirements)

2017 Estimated

Balances

Meets

Annual

Requirement

ELECTION EXPENSE 28,103 Yes

BASKIN DRIVE REHAB 16,900 n/a

ARNPRIOR CAPITAL RESERVE FUND 4,507,065 Yes Consistent with the required funding set out in the LRCF

DEVELOPMENT CHARGES 279,794 n/a Variable based on DC's Collected and utilized

STAYE CRT DRIVE WATER & SEWER (891,438) n/a Variable based on DC's Collected and utilized

LANDFILL SITE 1,535,262 Yes Not less than $51,000 annually

GAS TAX REVENUE (0) n/a Variable based on AMO Agreement

JA GAUMOND ANIMAL CONTROL 49,578 n/a

WATER (1,384,512) Yes

WASTEWATER 627,609 Yes Not less than $50,000 annually pursuant to LRCF requirements

PARK DEVELOPMENT 103,293 n/a Variable based on cash-in-lieu amounts collected and utilized

MUSEUM 67,330 n/a

PARKING LOT DEVELOPMENT 26,312 n/a Variable based on cash-in-lieu amounts collected and utilized

*Reserve and Reserve Fund balances are unaudited and do not include final adjustments

for 2016 operating and capital surplus or final interest allocations.

n/a

Reserve Policy RequirementsAnnual contributions to ensure that sufficient funds are

available every 4 years, based not less than $28,000 to hold the

election.

Not less than $50,000 annually pursuant to LRCF and Water

Financial Plan requirements

n/a

n/a

Minimum Reserve & Reserve Fund Balances

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2017 Estimated Minimum Minimum Amount Req'd Reserve Policy

Balances Limit Met Balance For Min Balance Balance Limits

RESERVES & RESERVE FUNDS (w minimum balances)*

WORKING CAPITAL 389,989 No 413,226 (23,237) Approx. 5% min / 10% max of Levy

INSURANCE STABILIZATION 95,223 No 100,000 (4,777) Not less than $100,000

BUILDING SERVICES 212,495 No 326,180 (113,685) Not less than two years budget & capital

GRANTS TO ORGANIZATIONS 600 No 5,000 (4,400) $5,000 min / $10,000 max

LEVY STABILIZATION 258,223 No 450,000 (191,777) Not less than $450,000

WINTER CONTROL 115,000 No 406,925 (291,925) 50% min / 100% max of budget

POLICE RESERVE 164,499 No 168,916 (4,417) Not less than 10% of Police Budget

MARKETING & ECON DEVELOP 66,842 No 100,000 (33,158) Not less than $100,000

ALBERT/MALLOCH CEMETERY 61,733 No 100,000 (38,267) Not less than $100,000

TOTAL 1,364,605 2,070,247 (705,642)


• Council approved minimum reserve balances are not yet achieved for some of reserve and reserves funds that have set minimums, 2016 surpluses and/or other funds should they become available will be recommended to be allocated to reserve & reserve fund accounts.

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Budget Approach

• 2017 Draft Capital Budget

– Capital projects over $10,000 are taken from the Long Range Capital Forecast

– Mandatory “M” projects have been included in the Capital Budget (Refer to Capital Tab)

– “M” projects include mandatory or mission critical projects (required by law, based on Council direction or approved plans, etc.).

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Capital

• In addition to projects identified in the 2016 LRCF, the draft 2017 Capital budget includes investment in:

– Corporate Policy Review - Procurement

• Peer review of the procurement policy due to increase in legal requirements

– Public Works Garage Roof Repairs

• Replacement of the east roof, repairs to west and center roof due to leaking (H&S)

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Capital

– Hydraulic Water Redundancy Review

• Review of Town’s water distribution system

– Chemical Media for Bay Products Scrubber (WPCC)

• Chemical media for odour control

– Marina – Main Dock Repairs

• Various maintenance repairs to the main docks

– NSC – Booking Software

• Current software expiring, implement online bookings

40

Capital

– Canada 150th

• Festivities and Activities

– Downtown Lighting/Banners

• Decorative lighting/banners for the Downtown

– PIC – Vehicle CBO

• Properly identified Town vehicle required for inspections

41

Capital

• Grant funding of $267,500 from the Canada Cultural Spaces Fund for the D.A. Gillies Building Remediation project.

– Includes exterior/interior remediation work and humidification improvements.

• Grant provides 50% of project costs, while the application was for 70% grant funding.

– Project included in 2017 capital with remaining 50% funded from the CERF

42

Capital

• D.A. Gillies Building Remediation Project

– While the project moves into 2017 capital, there is a $500,000 project removed from the LRCF in 2022

– Overall savings of $267,500

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Capital Budget By Department

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20 Year Long Range Capital Forecast

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Background

• Long Range Capital Forecast (LRCF) is a snap shot in time of known future Budget & Infrastructure pressures.

– Significant reliance upon Town Master Plans and the Asset Management Plan

• LRCF is a dynamic tool which is reviewed and updated annually.

• LRCF is in “today’s dollars”

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Background

• Year to year, LRCF is subject to changes in priorities, funding, emerging legislation or trends, etc.

• Many factors can impact a LRCF including, pace of growth, inflation, updates to Asset Management Plans, Water & Wastewater models, other Master Plans, etc.

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Background

• With the 2015 LRCF, Council approved the Downtown Revitalization project including a financing strategy of a rapid 5 year loan repayment.

• With this financing commitment, the LRCF has taken into account the reduced capital funding capacity over the five year 2017-2021 loan repayment period.

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Shift to 20 Year LRCF

• Given the nature and longevity of municipal infrastructure staff have developed a 20 Year long range capital forecast (previously 10 years)

• Increasingly detailed Asset Management Plans and key Master Plans/Studies assist in providing more robust data for an extended LRCF.

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Shift To 20 Year LRCF• For planning purposes, varying levels of

accuracy exists depending timeframes in the LRCF. Generally speaking:

– 1-5 Year Timeframe

• Projects are generally set, limited change in value/year


• Very probable to occur as forecasted – value/year may fluctuate somewhat


• Longer range and subject to adjustments as years draw closer

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Asset Management Plan

• Some of the increases in the total capital investment in the LRCF are in part due to the annual updating of the Asset Management Plan (AMP) modeling, which sets recommended service levels.

• The AMP model is updated based on on-going studies such as pavement condition analysis, CCTV, flow monitoring, water modeling, etc.

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Asset Management Plan

• Annually, staff have prepared the budget in order to bring investment levels up to (or better than) 2013 AMP recommendations

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2013 2014 2015 2016 2017

Roads 900,000$ 1,900,000$ 1,900,000$ 1,900,000$ 1,900,000$

Sidewalks 200,000$ 200,000$ 200,000$ 200,000$ 200,000$

Watermains 75,000$ 300,000$ 300,000$ 310,000$ 310,000$

Sewers 200,000$ 200,000$ 200,000$ 200,000$ 200,000$

1,375,000$ 2,600,000$ 2,600,000$ 2,610,000$ 2,610,000$

Recommended Investment Levels

Investment in Linear AssetsYear Roads Sidewalks Watermains Sewers Total

2010 $250,538 $112,700 $0 $0 $362,938

2011 $109,834 $74,757 $0 $0 $184,591

2012 $449,947 $169,818 $75,002 $112,657 $807,424

2013 $769,404 $129,383 $40,720 $163,615 $1,103,122

2013 AMP $900,000 $200,000 $75,000 $200,000 $1,375,000

2014 $872,176 $274,217 $178,000 $93,000 $1,417,393

2015 $1,204,358 $196,776 $295,800 $119,443 $1,816,377

2016 $1,279,763 $506,095 $1,819,529 $1,001,443 $4,606,830

2016 AMP $1,900,000 $200,000 $310,000 $200,000 $2,610,000

2017

(Planned)$897,726 $377,223 $500,709 $480,136 $2,255,794

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Investment in Linear Assets

• In 2015 Council approved service levels which set the recommended annual level of investment in linear assets at $2.610M.

• To maintain levels of service, Council committed to an annual investment increase of $75K in linear assets.

– Recommend maintaining the additional $75,000 per year beyond 10 years

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YearMin. Investment

(+ $75K per year)

Levels of

Investment

Actual /

Planned (LRCF)

2016 $1,945,000 $4,606,830 Actual

2017 $2,020,000 $2,255,793 Planned LRCF

2018 $2,095,000 $400,000 Planned LRCF

2019 $2,170,000 $1,379,800 Planned LRCF

2020 $2,245,000 $2,605,411 Planned LRCF

2021 $2,320,000 $975,000 Planned LRCF

2022 $2,395,000 $2,225,000 Planned LRCF

2023 $2,470,000 $2,703,506 Planned LRCF

2024 $2,545,000 $3,008,530 Planned LRCF

2025 $2,610,000 $2,567,802 Planned LRCF

TOTAL $22,815,000 $22,727,672

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• 2017 Capital Budget exceeds the recommendations of the 2016 Updated AMP Results by over investing in sidewalks, watermains, and sewers, but is less than the recommended investment towards roads.

• This is largely due to the Town’s significant investment in the Downtown Revitalization Project.

56


57

Asset Type 2016 Updated

AMP Results

2017 Draft

Budget

Road $1,900,000 $897,726

Sidewalk $200,000 $377,223

Watermain $310,000 $500,709

Sanitary Sewer $200,000 $480,136

TOTAL $2,610,000 $2,255,794

Future Capital Pressures

• The Downtown Revitalization project and other Asset Management Life Cycle projects in 2017 will cause a temporary shortfall in contributions to reserves

– assuming no new grants or new borrowing

• The pay-as-you-go model is designed to “over contribute” to reserves as a practice in order to fund occasional short falls such as outlined above.

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• The Downtown Revitalization project is funded through a combination of reserve funds ($4.4M) and debt bridge financing ($6.0M) over 5 years.

• Rapid debt repayment and use of reserves for a net gain upholds pay-as-you-go principles.

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• Reduced funding capacity for future capital spending from 2017-2021 in order to fund the bridge financing payments ($1.249M)

– Begin the recovery for the drawdown on reserve balances.

• Minor adjustments to the LRCF as part of the Financing Strategy.

– E.g. Road Rolling Rehab will be reduced for 2018-2021 in the LRCF to offset the reduced financial capacity for bridge financing.

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Reserve & Reserve Fund Continuity Schedule

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Reserve & Reserve Fund 2017 2018 2019 2020 2021 2022

Opening Balance 9,411,455 6,587,501 7,057,135 7,349,784 7,384,313 7,954,585

Add: Contributions 4,041,517 4,358,760 4,763,776 4,390,715 4,285,076 4,370,271

Less: Expenditures (5,616,345) (2,640,000) (3,222,000) (3,107,060) (2,934,100) (3,716,200)

Subtotal 7,836,627 8,306,261 8,598,910 8,633,439 8,735,289 8,608,656

Financing / (Financing Repayment) (1,249,126) (1,249,126) (1,249,126) (1,249,126) (780,704) -

Closing Balance 6,587,501 7,057,135 7,349,784 7,384,313 7,954,585 8,608,656

Discussion

• The impact of new pressures, Down-town financing and AMP objectives may exceed our ability to fund some projects, which will require annual monitoring

• Adjustments to DC’s, increases in the Water & Wastewater Rate Study may assist in responding to potential shortfalls

– this will be reviewed in 2017

62

Discussion

• Maintaining a strong commitment to the pay-as-you-go model will help address funding challenges

63

Grant Opportunities

• A number of grant applications remain outstanding for the Town of Arnprior. Success on any of the applications will have varying impact on the LRCF

– Projects in latter years (i.e. NSC Roof Replacement, Museum elevator, etc) will shift forward to 2017 if grant funding is received.

• This will result in net savings however would require earlier financial investment from the Town.

64

LRCF Format

• LRCF includes a Summary Sheet (by Department) as well as detailed sheets by department and category.

• Expenditures of less than $10,000 are not included

• Funding sources are not determined by a LRCF, this is established through such things as annual Budgeting, DC By-laws, Grants, etc.

65

LRCF Format

• A column has been included in the LRCF to identify projects derived from a Town Master Plan or Asset Management Plan

• Master Plans and/or the AMP projections may vary from the LRCF projects depending on a number of factors.

66

Client Services

• Legislated Items

– Election, Development Charges, JE Evaluation, etc. - extended out to a 20 year time frame

• IT Requirements

– Server, Desktop, Network, Software, Telephone, Security, Website upgrades

– Based on estimated lifecycles of current equipment

67

Fire Department

• 1-5 Years

– $15K Fire Hose removed (2020)

– $10K Water & Ice Rescue equipment added (2020)

– Personal Protective Gear (2019-2022) increased by $28K to account for all firefighter gear

68

Fire Department

• Rescue / Equipment Vehicle

– Possibility for combining two vehicles (rescue vehicle and equipment van) reviewed by the Fire Department for cost effectiveness

• Business case from Fire Dept attached as supplemental information

– increased from $310K to $330K (2018)

69

Fire Department

• Radio system not included in the LRCF due to unknown factors still under review by the County:

– Type and Cost, Timeline for upgrades, Funding options (payment plan/lease, lump sum), Capital vs Operating expenditure

• Upon County decision(s) for the radio system, the estimates will be added to the budget or LRCF depending on direction

70

Public Works

• #25 Loader & Blower

– Moved from 2021 to 2018 - $325K

• #77 & 78 Axle Vehicles

– Increased from $230K to $260K

• Library Roof Replacement

– Added to 2020 - $70K

• Snow Disposal Facility

– Added to 2028-2037 - $1M

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Public Works

• Madawaska Street (Elgin to Daniel) – full reconstruction

– Strategy is to request the County to mill/pave in 2018 (approximately 10 year life) with the Town to complete full reconstruction in 2027

– Recent underground infrastructure review shows potential for lasting until 2027

72

Public Works - Buildings

• In the 2016 AMP Update, municipal buildings have been added and are broken down into building components

– Aligns components with the recent TCA review

• In the latter 10 years of the LRCF, a portion of the component values have been included to reflect the future infrastructure investment that will be required for municipal facilities.

73

Public Works

• Asset Management Plan (2028-2037)

– Roads – annual $1.9M estimate

– Sidewalks – annual $200K estimate

74

Environmental

• Water Meter Reading Equipment

– $12K added to 2021

• Check valve on Hartney St 400mm WM

– $150K added to 2023-2027

• Rolling Storm Control Measures

– As per Stormwater Master Plan recommendation

75

Environmental

• WPCC Plant Expansion

– Shift to years 11-20 of the LRCF

– Sewer separation to defer need

• Building Components (WFP, WPCC, Water Tower, Pump Stations)

– Included years 11-20 and based on the TCA analysis completed (Watson)

– Represents a portion of the replacement values and their given lifecycles

76

Environmental

• Landfill Trigger Mechanism and Financial Liability

– $20K added to year 2021

– As per annual landfill monitoring report recommendation

• Asset Management Plan (2028-2037)

– Watermain – annual $310K estimate

– Sanitary Sewer – annual $200K estimate

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Recreation Department

• Recreation Master Plan

– Additional items added to latter 10 years including but not limited to:

• Atkinson St Playground

• Play Structure – McLean Diamonds

• RSP Splash Pad Replacement

• Community Hall Flooring / Room Divider

• Pool Decking

• Hydro Park Fitness Station

• Skate Board Ramps

78

Recreation Department

• Waterfront Rehab Removed

– Waterfront Feasibility Study underway (Q2 / 2017) with a financial strategy to follow

• Accessible Change Rooms / Bathrooms

– Will be reviewing options in 2017 for inclusion in next year’s LRCF to meet 2025 accessibility deadlines

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Community Services

• New section created in LRCF

– Includes studies/reviews (Strategic Plan, Official Plan, Zoning, etc) at varying intervals

– Airport Lands Special Study (OP) added at $150K for 2020

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Summary• Snapshot in time of known pressures

• Supported by master plans and studies

• Varying levels of accuracy and probability

– 1-5 years, 6-10 years, 11-20 years

• May be impacted by grant opportunities

• Future debt retirement will help create available funds for capital investment

• Fluid document meant to help inform financial planning

81

Summary

• LRCF will be brought forward to Council after the 2017 Operating and Capital budgets are adopted

– 2017 Budgets (tentative February 27, 2017)

– 2017 LRCF (tentative March 13, 2017)

82

Conclusions and Recommendations

83

AMO – Infrastructure Gap

• Much of Ontario municipal infrastructure needs modern upgrades or replacement.

• Growing populations increase the burden on existing infrastructure and fuel demand for new investments.

• It was estimated in 2008 that Ontario faces a municipal infrastructure gap of over $60 billion dollars

84

20 Year LRCF Summary

• NOTE: New Downtown bridge financing shown to illustrate short term capital funding. Other long-term financing is embedded in operating budget.

85

Year 1 Year 2 Year 3 Year 4 Year 5 Year 1-5 Year 6-10 Year 11-20 Year 1-20

2018 2019 2020 2021 2022

2018-2022

Total

2023-2027

Total

2028-2037

Total

2018-2037

Total

Client Services 98,000 65,000 55,000 40,000 75,000 333,000 313,000 590,000 1,236,000

340,000 22,000 30,000 49,500 127,000 568,500 1,764,500 2,240,000 4,573,000

Public Works 1,142,000 2,224,000 2,017,000 1,552,000 1,510,000 8,445,000 23,253,500 24,270,000 55,968,500

Environmental 355,000 261,000 995,060 232,000 1,748,600 3,591,660 492,000 29,385,000 33,468,660

Recreation 705,000 640,000 10,000 855,600 220,600 2,431,200 1,561,600 1,086,000 5,078,800

Community Services 0 10,000 0 205,000 35,000 250,000 110,000 225,000 585,000

TOTAL CAPITAL 2,640,000 3,222,000 3,107,060 2,934,100 3,716,200 15,619,360 27,494,600 57,796,000 100,909,960

Downtown Financing 1,249,126 1,249,126 1,249,126 832,751 0 4,580,129 0 0 4,580,129

TOTAL WITH FINANCING 3,889,126 4,471,126 4,356,186 3,766,851 3,716,200 20,199,489 27,494,600 57,796,000 105,490,089

Department

Fire

20 Year LRCF Summary

• Annual average investments required to fund all LRCF projects increase over time.

• Current shortfall when considering the annual reserve/reserve fund contributions

86

Year 1-5 4,039,898$ 4,272,877$ (232,979)$

Year 6-10 5,498,920$ 4,367,117$ 1,131,803$

Year 11-20 5,779,600$ 4,454,459$ 1,325,141$

*Investment gap calculated using 2017 forecasted reserve contributions.

Average Annual

Investment

Annual Reserve

Contributions

(Forecasted)

Investment

Gap*

Debt Retirement

• One of the key objectives of the pay-as-you-go model is retirement of debt.

• In 2017 the annual debt payments are $2,881,310 (excludes Sewer Rate debt –funded separately)

87

Year Debt Payments Available Funds

Year End 2017 (Current) $2,881,310 $0

Year End 2022 (5yrs) $1,632,184 $1,249,126

Year End 2027 (10yrs) $1,177,732 $1,703,578

Year End 2032 (15yrs) $0 $2,881,310

Closing the Investment Gap

• As debt retires, redirecting these funds into capital asset investments, will help cover the forecasted investment gap

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Year 1-5 4,039,898$ 4,272,877$ (232,979)$ -$

Year 6-10 5,498,920$ 4,367,117$ 1,131,803$ (1,249,126)$

Year 11-20 5,779,600$ 4,454,459$ 1,325,141$ (2,292,444)$

*Investment gap calculated using 2017 forecasted reserve contributions.

Debt

Retirement

Average

Annual

Investment

Annual Reserve

Contributions

(Forecasted)

Investment

Gap*

Draft 2017 Budget

• MPAC “Phase In” is not a Municipal Tax Rate Increase, it is an increase or decrease in Assessment due to MPAC’s 4 year current value assessment phase-in.

• Currently the budget as presented could be approved as a $121,096 Tax Revenue increase which includes a 0.8% Municipal Tax Rate increase.

– This would maintain reserve contributions at 2016 levels for levy cost centers.

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What Impacts the Levy

New Growth

CVA Phase-InLEVY

Municipal Tax

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Set by MPAC and is

variable per property

Offsets expenses

for new propertiesSet by Council

Note: CVA Phase-In of -1.0% includes all property classes (Residential, Commercial, Industrial, etc.)

$121,096 = ($29,742) + $85,816 + $65,022

1.43% = -1.0% + 1.63% + 0.8%

Draft 2017 Budget

• A 0% Municipal Tax rate would result in a decrease in the annual reserve contributions for levy based cost centers.

• Staff is recommending a $198,310 Tax Revenue increase which includes a 1.75% Municipal Tax Rate Increase

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92


New Growth

CVA Phase-InLEVY

Municipal Tax

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Set by MPAC and is

variable per property

Offsets expenses

for new propertiesSet by Council

Note: CVA Phase-In of -1.0% includes all property classes (Residential, Commercial, Industrial, etc.)

$198,310 = ($29,742) + $85,816 + $142,236

2.38% = -1.0% + 1.63% + 1.75%

Draft 2017 Budget

• A 1.75% Municipal Tax Rate Increase

– This equates to a $1.24/month increase for the Average Home with an Assessed Value of $220,250.

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Municipal Tax Rate IncreaseAdditional

Revenue

Annual Cost

per Average

Home Value

Monthly Cost

per Average

Home Value

0.50% $40,639 ($7.47) ($0.62)

1.00% $81,278 $1.46 $0.12

1.25% $101,597 $5.92 $0.49

1.50% $121,917 $10.38 $0.87

1.75% $142,236 $14.85 $1.24

2.00% $162,556 $19.31 $1.61


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0% with CVA

Phase-In 1.75% Increase

1.75% with CVA

Phase-In

Annual Increase over 2017 Taxes -$16.21 $31.05 $14.85

Monthly Increase over 2017 Taxes -$1.35 $2.59 $1.24

* Calculated based on Assessed Value Avg Home of $220,250 and assumes a -0.91%

Residential CVA Phase-In for 2017

2017 Municipal Tax Impact

Overall Tax Rate

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Town County* Education* TOTAL

Levy Rate 0.00824541 0.00345406 0.00188000 0.01357947

% Impact on Levy 1.75% 0.00% 0.00% 1.06%

Annual Increase** $14.85 -$6.91 -$3.76 $4.18

Monthly Increase** $1.24 -$0.58 -$0.31 $0.35

*County and Education Rates are based on the 2016 Rates.

2017 Impact Applying CVA Phase-In and 1.75% Municipal Tax Rate

**Calculated based on Assessed Value Avg Home of $220,250 and assumes a -0.91%

Residential CVA Phase-In for 2017

Impact of Municipal Tax Rate

• Additional taxation revenue will help:

– Respond to decreased 2017 CVA and Supps

– Bolster recovery of reserve fund balances related to the Downtown Revitalization project

– Assist in bringing reserve and reserve fund balances to Council’s minimum balances

– Help address the increasing gap between LRCF infrastructure requirements and funding over the 20 year forecast

– Avoid the need for sharp increases in the future

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Impact of Municipal Tax Rate

• Will help provide increased stability for the pay-as-you-go financial model over the long term

• A municipal tax rate increase of 1.75% is in a range below inflation

– 2.1% CPI (Ont. All items)

• Oct 2015 – Oct 2016

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Draft Budget Summary – at 0.8% Municipal Tax Increase

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2016 2017

Budget Budget % OF TOTAL

TAXATION REVENUE (8,390,592) (8,472,758) 88.4%

ONTARIO MUNICIPAL PARTNERSHIP FUND (970,800) (1,108,300) 11.6%

(9,361,392) (9,581,058) 100.0%

GENERAL GOVERNMENT 1,377,775 1,425,130 14.9%

PROTECTION TO PERSONS & PROPERTY 2,377,793 2,402,660 25.1%

PUBLIC WORKS 1,558,566 1,709,628 17.8%

ENVIRONMENTAL SERVICES (712,811) (749,062) -7.8%

CEMETERY 9,900 (13,600) -0.1%

PARKS AND RECREATION 1,086,757 1,066,835 11.1%

GRANTS & SUBSIDIES 372,261 371,215 3.9%

COMMUNITY SERVICES 359,215 378,360 3.9%

CONTRIBUTION TO RESERVES 2,931,936 2,989,892 31.2%

0.0%

9,361,392 9,581,058 100.0%

NET OPERATING BUDGET 0 0

Note: Departmental expenditures are shown net of department specific revenues.

Budget Document

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• Tabs 1 to 10

– 1 – Budget Summary

– 2 to 11 – Budget Detail by Department with Budget Notes (Blue pages)

• Supporting Tabs

– Budget Presentation

– Reserve and Reserve Fund Schedules

– Capital Projects

– 20 Year Long Range Capital Forecast

– Debt Schedule

– Community Group Consultations

Schedule of Deliberations

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Tuesday, February 21, 2016 Wednesday, February 22, 2016

at 5:00 pm at 5:00 pm

2017 Draft Operating Budget Carry-over from prior night

2017 Draft Capital Budget 2017 Long Range Capital Forecast

Supporting Documents

Next Steps

• Deliberations – February 21 & 22, 2017

• Budget Approval – February 27, 2017

• LRCF – March 13, 2017

• County Sets Tax Ratios – by April 30, 2017

• Municipal Tax Rates – May, 2017

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Questions?

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