Budget 2014 Overview Council Presentation Oct 3 2013 Cc

Your Worship, Deputy Mayor, and Members of Council, I’d like to start off this evening first of all by extending my thanks and appreciation to all members of the administration who have played a role in the development of the 2014 Business Plans and the Draft Budgets. I also want to ensure that Council and the public know that this is a draft financial plan at this point in time. It is a draft budget. We will be hearing from the public in the coming weeks as we present the budget submission to Council. Members of Council, as your term has progressed you have been presented with budgets that have been underpinned by a number of the core strategies as outlined in the community strategic plan, Inspiring Innisfil 2020, which we updated earlier this year... ..to reflect ongoing changes both in circumstances and priorities. The strategic plan has been a cornerstone for us as an organization, and you as a Council in making certain decisions as we set a foundation for growth and propserity within the Town of Innisfil. On April 3rd you considered a Council Report which as part of the efforts to develop financial policies to guide our community.. and you provided direction to your administration to develop the 2014 budget based upon certain parameters. Let me remind you of what those parameters were. Those instructions required the administration to develop a budget that limited any blended tax increase to 3% or less. The instructions were to ensure that the overall increase included a modest inflationary increase which we were estimating at that point in time of approximately 2%, plus our 1% capital levy which council has previously incorporated as part of a longer term financial strategy to build for the future of this community. Almost immediately following the Council meeting we started setting the direction for the 2014 budget process and we launched a Budget Kick-off Staff meeting and our finance staff provided instructions respecting the development of the budget submissions Once again as we did in previous years we established some very aggressive timelines so that we would be in a position to start the preliminary review of the departmental projections for the coming year by August. Without getting into too much detail let me say that a great deal of work was undertaken well before the Senior Management Team was in a position to review the submissions. We have undertaken a review of the various business plans, the proposed fees and charges, as well as the proposed capital plans. We did a detailed examination of all of the proposed changes and forecast the cash flow requirements. We also continued over the next several weeks meetings with the respective service areas were convened with the intention of finalizing the operating budget submissions and undertaking a similar review with our Senior Management Team. By early September the final changes were made to the proposed budgets. In turn, we also contacted the respective bodies who also have a responsibility for the overall tax rate increase and on that basis by mid-September we were in a position to project the early estimate for the blended tax rate. Over the remaining days of September we were able to complete the documentation and prepare the report which is before you to table the 2014 budget for public review and comments. So today as part of formally tabling the draft 2014 budget we also begin in earnest the public consultation process. We will also be hosting a Public Meeting on Wednesday October 9, from 6 to 8:00 pm here at the Town Hall in our Community Rooms. For the purposes of engaging the public and getting their feedback with regards to proposed changes, or ideas that they have with regards to the final submission. Your worship and members of council the next portion of this presentation will be mine to deliver to you. The slide before you shows you information that's contained within the BMA study from 2012. BMA surveys 86 municipalities in Ontario And this graph, this pie chart represents the average family income in Innisfil, as per that study, which is just under $90,000. Property taxes represent about 3.8 percent of that family's expenditures. So, as a comparison The Fraser Institute, which is an independent Canadian public policy research and educational organization, does annual reports. They study the Canadian average income, family and their tax burden. And so the Canadian average was 4.9% as per the Fraser Institute. So you can tell that Innisfil, certainly as in comparison to the Canadian average, well positioned from an income standpoint. The next slide just illustrates quickly where do the tax dollars go to. You've seen this type of pie chart before... It illustrates if you take a look at the Town purposes and the Future Asset Replacements, represents about 40% of the tax bill, so the Town, Town Council has direct control over about 40% of the average residential tax bill. The remaining portion, 60%, the goes to the school boards, which of course is Provincial mandated education rates; Police Services, which Council has some, limited control of; and of course, the County of Simcoe, for the services that they provide. This chart shows you what staff is proposing. It's the year-over-year increase that's being proposed in the Draft Budget. The average residential property owner’s tax bill, which includes all the staff proposed service level changes, would be approximately a $92.83 increase. If you break that down, that's roughly the $1.79 a week or 26 cents a day increase in the average tax bill. It represents a blended tax rate increase of 2.85%. So as Mr. Skorobohacz said, Council had given direction early on in April that we were to come in at 3% or under. So this current represents 2.85%. The Police, Education and County portions are estimated at this point, best information that we have available to us at this time. The pie chart here is another indication of how your local dollars are spent. If you took every dollar of tax dollars, this chart would show you where those monies go. For example, the Police Services are considered part of your local dollars, that represents approximately a quarter percent of the local dollars being spent. Some of the other larger areas, certainly Roads activities about 15-16% of the bill. Other areas, as you can see in the pie chart, Conservation Authorities, Reserves for Future Replacements, and those types of activities. As Mr. Davis alluded to earlier, the increase at 2.85% also includes a number of the proposed Service Level Change requests. And although you have an extensive list of those Service Level Changes before you in the documentation, I'll only speak briefly tonight about the changes as we will have a more fullsome discussion about the need for these Service Level Changes at the Budget Deliberation Meetings later this month. There are, however, a number of staffing related positions, many of these linked to the growth related pressures facing the Town. Some positions, such as the Fire related staff have been identified through the recently adopted Fire Master Plan, and are presented in light of the issues identified through that initiative. In other instances, we see some integration of resources between Roads and Parks that seek out efficiencies and generating a more dynamic working environment. Your administration has provided greater details respecting all of the Service Level Changes which are presented in this budget submission. and will be certainly providing fuller details during those discussions. The chart before you you've seen in past budgets The chart before you you've seen in past budget presentations, its a comparison of water and wastewater bills in Innisfil, both what currently is in place for 2013 and what's proposed for 2014 and then a comparison with some of the local municipalities. The Town's really been dilligent in attempting to ensure that our water and wastewater rates reflect an appropriate balance between the operating costs and the future replacement needs. As the infrastructure ages many communities are finding the challenge of raising appropriate funding to meet the cost of replacing the assets. We're addressing this need to ensure that adequate funds are being set aside for future asset replacements. That's consistent with property tax levy approach that Council adopted back in 2011. The Town of Innisfil, we feel, have been out in front of the issue for several years now while many other municipalities are still scrambling and trying to catch up and make sure they've got adequate funds set aside. You're seeing some of that in the rate comparators. The 2014 increase is about $47 to the average user. It would still result in a total annual bill of approximately $1000. Still, compared to others, a reasonable price that is being afforded to our residents. The Draft 2014 Capital Budget and 2015 to 2018 forecast reflects significant infrastructure, amenities and equipment investments to address replacement of existing assets but also to further growth and development initiatives that are facing the Town. Major items of note is $31.1M for the Lakeshore Water Treatment Plant Phase III expansion. This is really a requirement initially of Bradford West Gwillimbury, so they would be front-ending all of that cost. The Town then would be subject to repayment of our portion of that, again subject to timing and conditions which have yet to be determined. The aging and out-of-date Operations Centre is proposed to be relocated to the property to the South of the Innisfil Recreational Complex along with the salt management facility. There will be a sharing of services and costs with Innisfil Hydro for the development of this site, so there will be some synergies there... some cost savings. The 2014 budget also includes an expanded roads rehabilitation and repair program, replacement and updating of the Cookstown Fire Station and a number of other initiatives including $250,000 in items specifically to advance Inspiring Innisfil 2020 initiatives. This chart just briefly shows you the Capital program. It's at 66.5 Million dollars. You can see the largest component is the water component, which is the planned expansion at 62% of the total costs. The next largest component is roads other, which is really the salt management facility and the proposed operations centre. This slide illustrates to you the long term debt. No budget presentation would be complete unless we included a slide to address the topic of long term debt. Council will recall that previous capital budgets included projects that will require long term debt financing for the growth component of thos projects. The annual repayment requirements will be serviced through the use of development charges revenues. These include the Lakeshore Library Branch expansion, the Lefroy Fire Station, the Salt Management Facility, the Innisfil Heights Reservoir. Although we discussed it tonight and it's yet to be finalized, we have included a component here in the long term debt projection to the anticipated portion of the South Innisfil Drain that the residents would be responsible for. So again, that's a projection - obviously that hasn't been resolved at this point in time. The 2014 draft capital budget also identifies the need for debt to be issued for: the Cookstown Fire Station, again the growth component of that Fire Station; the Operations Centre plus the potential future need - this is still to be determined - in 2018 for the Town’s share of the Phase III plant expansion. The chart illustrates the Town’s existing debt for the Town, thats in the blue component. That's about 30 million dollars currently. That's for this building [Town Hall] and the IRC [Innisfil Recreational Complex] and other properties. The red (or middle portion of the bar) represents the proposed new debt requirements based on the projected timing of the projects, that I've just identified for you. The top portion, or the green portion, represents the debt borrowing capacity that remains. shows the shows you that over time, out in 2020 we would have only a capacity of about 50 million dollars, left to avail ourselves of that for future debt requirements. Your administration has been working on a number of options respecting the issue of strategic infrastructure and we remain optimistic that creative solutions will provide some measure of relief to us in the future. Proposed fees and charges continue to reflect staff work in developing full cost recovery models to reduce the impact to all property tax payers but shift the costs to the actual consumers of the service. Planning has undertaken a significant study of their fees, in consultation with the development community, to address the level of recovery for the services they provide. The Planning fees report will be provide to council in the coming weeks leading up to the budget deliberations. Parks & Recreation have met with the reps from the local sports associations and are also looking at initiatives to increase the utilization of facilities for non-peak hours. Staff also closely reviewed the building and inspection fees and the status of the legislated reserve and have determined that the third phase-in of the fees is not required at this time. Proposed fees and charges continue to reflect staff work in developing full cost recovery models to reduce the impact to all property tax payers but shift the costs to the actual consumers of the service. Planning has undertaken a significant study of their fees, in consultation with the development community, to address the level of recovery for the services they provide. The Planning fees report will be provide to council in the coming weeks leading up to the budget deliberations. Parks & Recreation have met with the reps from the local sports associations and are also looking at initiatives to increase the utilization of facilities for non-peak hours. Staff also closely reviewed the building and inspection fees and the status of the legislated reserve and have determined that the third phase-in of the fees is not required at this time. by shifting the costs to the actual consumers of the service. Planning staff have undertaken a significant study of their fees, in consultation with the development community, to address the level of recovery for the services they provide. The Planning fees report will be provide to Council in the coming weeks leading up to the budget deliberations. Parks & Recreation have met with the representatives from local sports associations and are also looking at initiatives to increase the utilization of facilities for non-peak hours. Staff have also reviewed the building and inspection fees and the status of the legislated reserve and we've determined that the third phase-in - if you recall Council had approved a three-year phase in of the building fees. We've determined that the third phase of the fees isn't going to be required at this time. The 2014 do not include a further increase at this point in time. So, Council this concludes our "macro" look at the 2014 Budget, which is being tabled with you this evening.