HomeMy WebLinkAboutFIN 05-14 Cif,, Report To
Council
PICKERING Report Number: FIN 05-14
Date: February 24, 2014
From: Paul Bigioni
Director, Corporate Services & City Solicitor
Subject: 2014 Current and Capital Budget
Recommendation:
1. That Report FIN 05-14 of the Director, Corporate Services & City Solicitor be
approved; and,
a) That the 2014 Current Budget expenditure for personnel costs, consisting
of salaries and wages (Account 1100), overtime (Account 1200) and
employer contributions (Account 1400), in the total amount of$47,907,085
be approved;
b) That the 2014 Gross Current Budget expenditures for City purposes in the
amount of$34,241,215 (excludes personnel expenditures) less estimated
current revenues of$29,153,225 (City Revenues of$27,807,225 plus .
$1,146,000 for assessment growth plus supplementary taxes of$200,000)
and net transfer from the Rate Stabilization Reserve of$2,082,963 for City
operations be approved;
•
c) That the Capital from Current expenditure in the amount of$1,795,301
funded by $1,175,301 from property taxes and $620,000 from a transfer
from the Rate Stabilization Reserve be approved;
• d) That the total final City levy under paragraphs a), b) and c) above, plus an
additional $85,000 for the Bridge Washing and Road Crack Seal Program,
for a total final levy of$52,172,413 being an increase of approximately
3.75% over the 2013 budget, be approved;
2. That the 2014 Capital Budget for the City of Pickering with a Gross Expenditure of
$52,950,440 be adopted as presented below;
a) That the following capital financing sources be approved as presented in
the 2014 Capital Budget:
70
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 2
Transfer from Current Fund to Capital Fund $1,175,301
Transfers from Reserves:
•
- Rate Stabilization Reserve (7021) 3,933,992
-Vehicle Replacement Reserve (7040) 508,000
- Replacement Capital Reserve (4611) 278,500
- Financial Systems Reserve (7049) 125,000
- Don Beer Arena Reserve (7033) 110,000
- Rec. Complex Core Reserve (7034) 81,000
- Rec. Complex Pool Reserve (7035) 60,000
- Provision for Eastern Branch Library
Res (7042) 50,000
- Rec. Complex Arena Reserve (7036) 30,000
• Transfers from Reserve Funds:
- Development Charges (7605 to 7621) 16,445,077
- Federal Gas Tax Funds (7505) 6,095,000
- City Share Dev. Charges Projects (7022) 897,960
- Parkland Development (7502) 410,875
-Third Party Contribution (7501) 232,735
- Capital Works (7701) 140,000
Debt - 10 yr 1,175,000
Debt - 15 yr 3,734,000
Debt - 20 yr 11,000,000
Internal Loan - 5 yr 192,000
Internal Loan - 10 yr 790,000
Provincial Grant- ODRAP 1,800,000
Provincial Grant-.Municipal.Road & 1,518,000
Infrastructure
Provincial Grant- Invest in Ontario 383,000
York Region Funding Agreement 1,785,000
Total $52,950.440
b) That total external debt financed by property taxes of $15,909,000 for the
•projects identified in the 2014 Capital Budget, and as indicated in this
report, in the amount of $1,175,000 for a period not to exceed 10 years,
$3,734,000 for a period not to exceed 15 years and $11,000,000 for a
period not to exceed 20 years be approved;
71
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 3
c) That the Division Head, Finance & Treasurer, be authorized to borrow
external debt of$8,690,000 (for a period not to exceed 20 years) and that
these dollars be used to fund the shortfall in the Development Charges
Reserve Fund — Operations Centre component and that these funds be
applied to the construction of the new Operations Centre;
d) That the internal loans in the amount of $982,000 be undertaken at the
discretion of the Division Head, Finance & Treasurer;
e) That projects identified in the 2014 Capital Budget as being financed
through the issuance of debt be subject to additional, specific approval of
the expenditure and the financing by Council;
f) That any debt repayment, interest or financing provisions contained in the
annual Current Operating Budget not used in the current year's payments
requirements may, at the discretion of the Division Head, Finance &
Treasurer, be used to apply towards additional principal repayment,
outstanding loan or debt charges or to reduce debt, internal loans or any
other amounts to be financed;
g) That all Capital expenditures or portions thereof, approved in the 2014
Capital Budget to be financed through the issuance of debt, may, at the
discretion of the Division Head, Finance &Treasurer, be financed through
internal loans, current or capital funds or a combination thereof;
h) That the Division Head, Finance & Treasurer, be authorized to make draws
from Reserve and Reserve Funds for,projects included in the approved
capital budget up to the amount approved;
i) That the Division Head, Finance & Treasurer be authorized at his discretion
to apply any excess funds obtained through the issuance of debentures as
provided for under Section 413 of the Municipal Act, 2001 as amended;
3. That the Division Head, Finance & Treasurer be authorized to transfer:
a) Any surplus current,operating funds at year-end in excess of approximately
$125,000 in the following ratio: 50% to the Rate Stabilization Reserve
(7021), and 50% to the City Share DC Projects Reserve (7022);
b) Any funds necessary from the Rate Stabilization Reserve in order to ensure
that the Current Budget results in a year end surplus of no less than
$125,000;
•
•
72
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 4
4. That the Division Head, Finance & Treasurer be authorized to make any changes
or undertake any actions necessary, including funding any shortfall in the Property
Tax Write-off account (2134.0000.0000) from a transfer from the Contingency
Assessment Appeal Reserve; and in order to ensure that the budget plan
accommodates any reallocation of 2014 current operating expenditures and
revenues resulting from any reorganization and to reflect any adjustment in taxes
or tax rates due to Provincial tax policy changes;
5. That the Division Head, Finance & Treasurer be authorized to use any under
expenditures from projects funded from Reserves or Reserve Funds to fund over
expenditures for approved projects funded from the same source(s);
6. That the Division Head, Finance &Treasurer be authorized at his discretion to
close any prior year's capital expenditure accounts and to first apply any excess
funding from property taxes to any over expenditure in other accounts and to
secondly transfer any remaining excess funding back to the original sources of
funds;
7. That the Division Head, Finance &Treasurer be authorized to fund the shortfall in
the Pickering Parkway Realignment project (5321.1006) estimated to be $150,000
as follows: (i) $129,000 from unspent funds from the 401 Pedestrian Bridge-Town
Centre to GO Station project (5323.0501) and (ii) $21,000 from the 2013 surplus;
8. That the Division Head, Finance & Treasurer be authorized at his discretion to
close any consulting account expenditure and corresponding revenue source that
is over three years from the original purchase order date of issuance;
9. That the Division Head, Finance & Treasurer be authorized at his discretion to re-
finance any capital expenditures that failed to meet the Federal Gas Tax reporting
criteria from other sources including transfers of funds from reserves and reserve
funds;
10. That the Division Head, Finance &Treasurer be authorized to:
a) Undertake transactions in the spot or forward (12 months or less) currency
markets in order to effect United States dollar denominated expenditures in
the Current or Capital Budgets;
•
b) Sign leases or rental agreements on the City's behalf for the provision of
vehicles or equipment required for temporary use during periods of
equipment breakdown or repair or during periods of increased need (e.g.
inclement weather);
c) Restate the 2014 Current Operating and Capital Budgets to reflect: any
Council changes made at the February 24th Council meeting; any
reorganization or personnel account'changes (salary, benefits & overtime)
as a result of salary increases or negotiated labour settlements;
73
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 5
11. That the Property Maintenance budget for Outside Agency Services (account
2132.2399.0000) be increased by $60,000 to $379,116 to reflect higher than
anticipated ice storm expenditures, with the additional cost be offset by a -
corresponding increase to the revenue account Provincial Grant - ODRAP
(1623.2132.0001);
12. That the Division Head, Finance & Treasurer be authorized to draw from the Rate
Stabilization Reserve sufficient funds to cover any current budget deficit as a
result of senior level government funding shortfall directly related to the ice storm
recovery;
13. That the Division Head, Finance &Treasurer be authorized to draw up to
$450,000 from the Rate Stabilization Reserve to match senior government grant
funding for the capital expenditures related to the tree canopy replacement;
14. That Council pass the attached General Municipal Fees and Charges By-law
which provides for the fees and charges that are incorporated into the 2014
Current Budget;
15. That the Division Head Finance & Treasurer be authorized to adjust, where
appropriate, the per kilometre travel expense reimbursement rate during the year
in order to maintain a reasonable level of reimbursement with any increase in cost
being met from under expenditures in other accounts;
16. That Council approve the continuing engagement of the firm of Watson and
Associates to be used for Development Charge issues, financial studies related to
Seaton and/or Duffin Heights; •
17. That the Division Head, Finance &Treasurer be authorized to transfer any funds
received from the sale of Duffin Heights Lands in excess of total financial
commitments to the Rate Stabilization Reserve;
18. That Council approve the exemption of the artificial turf field capital project
(5780.1416.6129) from the Fair Wage Policy for Industrial, Commercial and
Institutional Construction contracts (FIN 070);
19. That the Division Head, Finance &Treasurer be authorized to initiate or defend
any assessment appeals necessary to protect the City's interests including the
engagement of the firm Nixon Fleet & Poole LLP and the firm of Municipal Tax
Equity Consultants;
• 20. That the Division Head, Finance &Treasurer be authorized to transfer any
revenue funds remaining that have not been used to offset the account
expenditure in account 2620.5320.0002 to the Reserve for Sustainable Initiatives;
74
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 6
21. That the General Government Grant expenditure for Eurasian Water-milfoil •
program in the amount of$21,875 be subject to an additional expenditure
approval by Council before the release of funds;
22. That Council recommend to the new incoming Council in December, 2014 that the
2015 budget be developed with the following budget guidelines:
a) That the draw from the Rate Stabilization Reserve be reduced by at least
1% of the 2014 taxation levy;
b) That a Roads and Bridges Reserve Fund be established and that the 2015
budget include a contribution of$500,000 to this reserve fund;
c) That the above two recommendations be identified as the City's top two
financial priorities;
23. That Council authorize staff to update the Parkland Conveyance By-law 5373/98
to require that, pursuant to the Planning Act (Ontario) 2% of the land being
developed or redeveloped for commercial or industrial purposes be conveyed to
the City for park or other public recreational purposes, or to require cash-in-lieu of
parkland, so that the approach to parkland conveyance approved within the
Seaton Development area will become the standard for the rest of Pickering;
24. That the Division Head, Finance & Treasurer be authorized to fund any
SaveOnEnergy incentive funding shortfall from a transfer from Federal Gas Tax
reserve fund or from the Contingency.account;
25. That any funds remaining unspent in account 5719.1405.6183 (General
Accessibility Upgrades), at the end of any fiscal year be transferred to the
Reserve for Accessibility Initiatives; and,
26. That the appropriate staff of the City of Pickering be given authority take the
necessary actions to give effect thereto.
Executive Summary: This report contains a summary of the 2014 Current and
Capital Budgets and a discussion of the Recommendations contained in this report.
Financial Implications: The 2014 Current and Capital Budgets, if adopted as
amended, will result in a property tax levy increase of 3.75% (City Share Only) over last
year which translates into a 1:05% increase in the City's share of the total property tax
bill.
•
75
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 7
This increase, when combined with the Region and the School Boards increase, results
in an increase of 1.88% on the total property tax bill.
The above excludes any property tax shifts due to reassessment and potential Provincial
tax policy changes. Any changes as a result of Provincial Tax Policy changes will be
adjusted in the calculation of the final tax rates.
The changes below resulted from the February 13, 2014 Executive (Budget) Committee's
review of the draft Current and Capital budgets on a "line-by-line" basis:
Current Budget Additions:
General Government Section Grants
Pickering Auxiliary Rescue Association $20,000
South Pickering Seniors Club 5,000
Royal Canadian Legion Branch #606 200
Current Budget Reductions:
Regional Councillor J. O'Connell's (5,300)
Regional Councillor B. McLean's (10,000)
Sub-Total Net Current Budget Changes 9.900
Staff Recommended Additions/(Reductions)
Vehicle Replacement Reserve 70,100
Prj. 5325.1403.6254 Traffic Signal/Controllers Replacement (40,000)
Prj. 5325.1404.6254 Traffic Signal/Controllers Replacement (40,000)
Total Net Current Budget Changes 0
Discussion: The Recommendations put forth are those necessary to adopt and
provide authority and direction for the 2014 Current and Capital Budgets for the City of
Pickering.
Explanation of Key Recommendations
Bridge Washing & Road Crack Seal Program — Recommendation 1d)
Recommendation 1d) is asking Council to make an additional $85,000 investment in the
City's roads and bridges infrastructure. This recommendation is based on the asset
management plan report (ENG 21-13) approved by Council in December of last year.
The two initiatives consist of a bridge washing program ($35,000) and $50,000 for the
implementation of a crack seals road repair program. Bridge washing will occur in the
spring, where basically all of the salt and other debris is power washed away. The
76
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 8
bridge's skeleton should last longer with this program. The crack and seal road repair
program should translate into extending the life of the City's roads.
Ice Storm -Recommendations 11, 12, 13
Recommendation 11 is asking for Council approval to increase the Property Maintenance
cost centre budget (outside agency account) by$60,000 to reflect anticipated higher ice
storm clean-up costs. The additional cost is offset by a corresponding increase in the
Provincial ODRAP revenue account.
As Council is aware, the senior governments have not yet announced any ice storm
grant funding or cost sharing. Recommendation'12 provides the Treasurer the authority
to finance any current budget senior government funding shortfall by transferring funds
from the rate stabilization reserve. Recommendation 13 allows the Treasurer to draw up
to $450,000 from the Rate Stabilization Reserve to match any senior government grant
funding program as it pertains to tree canopy capital expenditures. If the senior
governments provide no capital funds, then the draw will not occur and the tree canopy
capital expenditure will become a 2015 to 2018 budget pressure.
Transfer of Excess Funds to Rate Stabilization Reserve — Recommendation 17
Over the last few budgets, City staff have identified expenditures to be financed from
Duffin Heights land sales such as purchase of the new Operations Centre land. Staff
estimate that there are approximately $8.7 million in costs to be funded from future Duffin
Heights land sales. Recommendation 17 provides the Treasurer the authority to transfer
funds from the sale of land to the Rate Stabilization Reserve if sale proceeds are in
excess of$8.7 million. Depending upon current market conditions, there is a possibility
that there will be excess sale proceeds that can be transferred to this reserve.
Exemption to Fair Wage Policy for Artificial Turf Field Project— Recommendation
18
The City's fair wage policy is to apply for industrial, commercial and institutional
construction contracts exceeding $1.0 million. The artificial turf field project includes the
following major tasks: install artificial turf and goal posts, landscaping, asphalt track
expansion, new electronic scoreboard, long and triple jump installation and site servicing
(storm sewers and electrical). Recommendation 18 is asking Council to confirm staffs
interpretation and or understanding that this project does not fall within the criteria of
industrial, commercial and institutional construction.
Eurasian Water-milfoil Grant— Recommendation 21
At the Executive (Budget) Committee meeting of February 13th, there was some
discussion regarding the Eurasian water-milfoil grant ($21,875). It is staffs
understanding that Council was seeking more information regarding the reduction or
elimination strategy to be employed for the water-milfoil aquatic plant. Recommendation
21 basically puts the funds on "hold" until staff bring forth an information report regarding
the elimination or reduction strategy for this aquatic plant.
77
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 9
2015 Budget Guidelines — Recommendation 22
Many-municipalities develop budget guidelines for the following year's budget while-
reviewing the current draft budget. The detailed review by Council of the current year's
budget usually helps frame the following year's budget development and preliminary
establishment of budget goals and objectives. Recommendations 22a and b, are asking
the new Council to consider as the top two budget priorities the following actions: further
reduction to the draw on the rate stabilization reserve and establishment of a roads and
bridges reserve fund. If Council adopts this recommendation, the 2015 draft budget will
include these recommendations before considering service level increases, new staff and
proposed major capital projects. These two recommendations will assist the City in
meeting its overall objectives in a financially sustainable manner.
Update of Parkland Conveyance By-law 5373/98 — Recommendation 23
The Planning Act(Ontario) permits municipalities, by by-law, to require the conveyance
of land, or cash-in-lieu of the land, for park or other public recreational purposes, as a
condition of development. For commercial or industrial development, conveyance of up
to 2% of the land, or cash-in-lieu, may be required. For all other development,
conveyance of up to 5% of the land, or cash-in-lieu, may be required.
The City's Parkland Conveyance By-law 5373/98 does not include provisions allowing
Council to require parkland conveyance, or cash-in-lieu, for commercial or industrial
purposes. To obtain a sufficient amount of parkland in Seaton, the 2% contribution from
commercial and industrial development was required, in addition to parkland for
residential and mixed use areas. It is important that there is a consistent approach
across the City with respect to parkland conveyance.
Further, research shows that Brock Township and Pickering are the only municipalities in
Durham Region who are not collecting parkland for commercial and industrial
development. Accordingly, it is recommended Council authorize staff to make the
necessary revisions to the By-law and bring it back to Council for enactment.
SaveOnEnergy Incentive Funding — Recommendation 24
The 2014 current budget for Recreation Complex Centre Core includes a $50,000
consulting expenditure for the design and study of an intergraded energy system. The
intergraded system would link the heating and cooling systems at the Complex to reduce
future maintenance and energy costs. This consulting cost is shown as being 100%
funded by the SaveOnEnergy incentive funding revenue source. (SaveOnEnergy is a
conservation program funded by the Ontario Power Authority or OPA and is administered
by the local electric utility). City staff will apply for these funds, however, Recommendation
24 provides the Treasurer the authority to fund any possible revenue shortfall from either
Federal Gas Tax or the General Government contingency account.
78
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 10
2014 Current Budget
- During the budget discussions last spring; staff presented a proposed 2014 tax levy
increase in the range of 3.5 to 4.5%. This forecast was based on information available at
that time and to continue current City service levels.
In November 2013, Report CAO 06-13 presented to Council a 2014 base budget
guideline of 3.9%. Staff have reviewed budgets, revised expenditure plans and are now
recommending a lower 2014 budget increase of 3.75%. After a budget is first developed,
it goes through many changes and reviews before it is presented to Council. Included in
all of these reviews are hundreds, if not thousands of budget changes, and most of these
changes are reductions. The original capital budget submission has been reduced by
$5.5 million and the current budget by $1.4 million. These reductions were made to
develop a multi-year sustainable financial plan.
Based on an average assessment of$358,400, the 3.75% increase (excluding the
impact of reassessment) will result in an average increase of approximately $47.40.per
• year or $0.91 per week for the average residential dwelling in Pickering.
At the February 13th Executive (Budget) Committee meeting, Council was presented
with a proposed budget levy increase of 3.75%. As noted earlier, Council made a small
number of changes to the Current Budget and when applied with the staff recommended
adjustments the budget levy remains at its current position.
Tax Increase Summary
The 3.75% tax increase translates into an increase of 1.05% on the total tax bill. The
3.75% levy increase compares favorably to other municipalities, especially when one
considers that Pickering has had the lowest tax rate among its Durham Region
Lakeshore neighbours for over sixteen years. Adding the Region's tax increase for
Pickering (1.5%) and the School Board's estimated 0% increase, the total increase for
the average residential ratepayer will be approximately 1.88%. The chart below presents
a comparison of the overall increase to other municipalities.
•
•
79
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 11
Chart One
Comparison of 2014 Overall Tax Bill Levy Increases
3.00 VV.
2.50
2.00 -'
1.50 11111111
1.00 11 , 11111
0.50
���'� Q�o�, e�`�� at�`e e\Qr `yc yr o�o
�e4r ek<6 Q` � �\hy c� hoc
Table One below provides a summary of the financial impact of the proposed 2014 tax
levy increase based on various assessed values.
Table One
Financial Impact of Budget Increase
City Share Only
Residential Assessment $100,000 $200,000 $300,000 $400,000
Increase (Over 2013) $13.22 $26.45 $39.67 $52.90
This is the second year of the Province's four year reassessment cycle. Assessment-
related increases are phased in over four years and assessment related decreases are
implemented immediately. The City does not receive any additional revenue as a result
of reassessment. The corresponding property tax rates are adjusted for the increase in
reassessment values to create an overall property tax neutral position on a total property
class basis.
The impact on the individual homeowner is based on their specific reassessment
increase, relative to the City-wide average of 3.45%.
There are also assessment-related tax shifts for the Region and Education. These
impacts will be based on the average reassessment increases on a Region-wide basis
and for Education on a Province-wide basis.
80
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 12
Reassessment Assessment Related
Increase Impact on Taxes
_ . _-. Below 3.45% Decrease
Equals 3.45% No Impact
Above 3.45% Increase
2014 User Fees & Charges Schedule
Every year, the City reviews its user fees, mainly for various recreational and cultural
programs, to partially reflect the cost of delivering these programs. Council passed
Resolution #149/03 confirming the City's existing user fees through a specific by-law.
This By-law has been updated as part of each year's budget process. Other fees have
been introduced to address industry trends and their associated costs.
Debt Financing of Capital Projects
The 2014 Capital Budget utilizes the following debt plan:
Property Tax Base Funded $13,157,000 •
Development Charge Funded Debt—
Operations Centre 8,686,000
Community Group (PSC for Indoor Soccer Dome) 3,734,000
•
Total Debt Issued $25,577,000
The property tax base funded debt increase is mainly due to the construction of the new
Operations Centre ($11.0 m). This year, the City will pay $4.8 million in interest and
principal payments to service the current debt. For 2015, the property tax funded debt
charges are predicted to increase to $5.3 million.
The 2013 Development Charge Background Study (approved in December) includes
funding of$8.6 million towards the Operations Centre construction cost. Finance staff
were aware that the DC Operations Reserve Fund did not have sufficient dollars to meet
the $8.6 million obligation. Therefore, when the new DC rates were determined an
interest rate cost component was added to the calculation and is now reflected in the
current DC rate. The debt charges (interest and principal) will be funded by current and
future DC payments. This fiscal strategy of having the DC reserve fund borrowing funds
is employed by other municipalities such as Brampton, Milton and Ottawa. The City of
Pickering is borrowing $3.7 million in external debt to fund the construction of the indoor
soccer dome. The Pickering Soccer Club business plan includes reimbursing the City for
all of the debt costs (principal and interest).
The City's maximum borrowing capacity is measured by the Annual Repayment Limit or
ARL which is a tool to calculate the municipality's ability to pay back its debt. The
maximum ratio of"annual payment" to "own source revenue" is set at 25%. In 2013,
Council adopted a higher standard where the City cap is set at 15% of the total taxation
revenue. The debt capacity used for 2014 is estimated to be around 8.5% which is
81
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 13
below the 15% cap and well below the 25% Provincial limit. (Attachment One provides
the 2014 Provincial ARL for Pickering). The chart below provides a historical perspective
of the current and future estimated debt charges as it relates to the 15% CAP.
Chart Two
Forecasted Debt Charges
$11,000,000
$10,000,000
$9,000,000
$8,000,000
$7,000,000
$6,000,000
$5,000,000
$4,000,000 �-
$3,000,000
$2,000,000
tiro^ oc,
-Principal&Interest • •Forecast 15%Debt Cap
Council can control the slope of the line as it relates to future debt charges by:
increasing contributions to reserves and changing the timing of future capital projects.
By increasing reserve or reserve fund contributions, the City will require less debt for
capital projects. In addition, successful City capital grant applications will also have a
financial impact on future debt charges.
2014 Tax Rates
As has been the case for the last few years, the 2014 Property Tax rates and
corresponding levy By-law will be presented to Council.
2014 Capital Budget
This year, the draft Capital Budget totals, $52.9 million which includes $27.0 million for
the new Operations Centre. The new Operations Centre is being funded by multiple
funding sources of which the debt component is the largest ($19.6 million). (The $19.6
million of debt consists of property tax ($11.0 m) and development charges funded
($8.6 m). The debt financed capital projects are listed below.
82
•
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 14
'Table Two •
External Debt and Internal Financing of Capital Projects
City of Pickering
5, 10, 15 and 20 Year Debt Financing
2014 Capital Budget
Capital Project Code Debt - 5 Description
Years ($)
5800.1406 $192,000 Brickcladding and Masonry Repairs - .
Library
Total Five Year Debt $192,000
Capital Project Code Debt- 10 Description
Years ($)
5320.1417 $600,000 Dunbarton Road Culvert Replacement
5320.1406 575,000 Salem Road Hard Surfacing
5744.1402 400,000 Oddfellows Hall
5320.1407 250,000 Wilson Bridge Replacement
5701.1403 140,000 East Shore HVAC & Sprinkler Upgrades
Total Ten Year Debt $1,965;000
Capital Project Code Debt - 15 Description
Years ($)
5711.1301 $3,734,000 Indoor Soccer Dome
Total Fifteen Year Debt $3,734,000
Capital Project Code Debt- 20 Description
Years ($)
5315.1401 New Operations Centre •
$11,000,000 - Property Tax Base funded
8,686,000 - DC Reserve Fund financed
Total Twenty Year Debt $19,686,000
Total Debt Financed Projects $25,577,000 -
The major capital projects are listed below:
New Operations Centre $27,000,000
Indoor Soccer Dome 7,146,605
Tree Canopy Replacement Program 1,800,000
William Jackson Drive Urbanization 1,606,400
Beverly Morgan Park Artificial Turf Field 1,335,000
Government Grant Funding
The 2014 Capital Budget proposes to use various grants to reduce the City share of
project costs. The major grants are: Federal Gas Tax Grant ($6,095,000), Federal and
83
Report FIN 05-14 February 24, 2014
Subject: 2014 Current and Capital Budget Page 15
Provincial Grants related to the ice storm ($1,800,000) and municipal infrastructure
($1,518,000), and Investing in Ontario Grant ($383,000).
2015 - 2018 Capital Forecast
Included in the budget is the City's 2015 - 2018 Capital Forecast. This document
outlines the City's current financial plan including a listing of major capital projects. On
page one of the forecast, you will notice that the total capital forecast (excluding major
capital projects) is for$95.9 million of which $32.4 million will be funded from debt and .
internal loans. This means that for every dollar spent, $0.337 is projected to come from
debt financing sources. Page four includes a list of major capital projects for the next
Council to determine the priority sequence.
This capital forecast captures all previously discussed visions and projects, and will be
revisited on an annual basis to ensure fiscal feasibility and to confirm Council's interest in
proceeding with the project.
Multi-Year Financial Plan •
Last year, staff presented to Council a multi-year high level financial plan for the years
2014 to 2017. At the Executive Budget Committee meeting of February 13, 2014, staff
presented a financial projection for the years 2015 to 2018 based on a "status quo"
scenario. (Status quo being simply defined as maintaining existing services and not
including Seaton or any major capital projects).
Communication & Community Engagement
For the 2014 budget, the City has implemented a new initiative to try to increase public
awareness of and participation in the budget approval process. The City's website
included a section for public input and/or comments. Unfortunately, the City did not
receive a large number of suggestions or comments regarding the budget. It is however,
interesting to note that the City website's budget page traffic increased by almost 462%
from 120 views re the 2013 budget to 555 views re the 2014 budget.
Included in the public version of the current and capital budget books is a section that
explains common municipal budget terminology. In addition, this year staff developed a
16 point font book (current and capital) for those individuals who find a larger font easier
to read.
Attachments:
1. Ministry of Municipal Affairs and Housing letter dated February 19, 2014 regarding
the 2014 Annual Repayment Limit
2. Accessibility Forecast 2014 to 2018
3. By-law to Confirm General Fees and Charges 2014
84 4. Budget Presentation, February 13, 2014
Report FIN 05-14- February 24, 2014
Subject: 2014 Current and Capital Budget Page 16
Prepared By: -
ames Halsall Stan Karwowski
Manager, Budgets &.Internal Audit Division Head, Finance &Treasurer
Approved / Endorsed By:
•
Tom Melym(k Paul Bi,ion
Director, City D elopment Directo , Co so ate Services & City Solicitor
•
6-"Na it ?AI
fa.. Marisa Carpino Rich rd Holbor-
Director, Culture & Recreation Dictor, Engineering & Public Works
Recommended for the consideration of .
Pickering City Council
aggoehe r - Zo Z'r4
Tony Prevedel, P.Eng.
Chief Administrative Officer -
•
•
85
•
ATT '' T#__TO REPORT#.Ft Al pc-1g
Ministry of . Ministere des
Municipal Affairs wires municipales nta1/ Ontario
and Housing et du Logement
Municipal Finance Policy Branch Direction des politiques relatives aux finances mun}dpales
777 Bay Street, 13th Floor 777,rue Bay, 13`etage
Toronto ON M5G 2E5 Toronto ON M5G 2E5
Phone: (416) 585-6951 Telephone: (416)58 - 951
Fax: (416) 585-6315 . .Telecopieur (416) 585-6315
February 19, 2014
Dear Municipal Treasurer, Clerk/Treasurer:
I am pleased to enclose a report showing your municipality's 2014 Annual Repayment T.i mit
(ARL)respecting long-term debtand financial obligations.Your 2014 ARL was calculated based
on 25 percent of your 2012 net own source revenues as reported in your 2012 Financial
Information Return.
If you require any further information,please contact the appropriate Municipal Service Office of
the Ministry of Municipal Affairs and Housing(list enclosed). .
Yours truly,
Trevor Bingler .
Director
Enclosures
86
•
•
•
•
L✓' Ontario
Ministry of Municipal Affairs and Housing Ministere des offaires municlpales et du logement
•
777 Bay Street, 777 rue Bay,
Toronto,Ontario MSG 2E5 Toronto(Ontario) MSG 2E5• + ei RR p I , n I I >,t I �
iCGi F lay ISr+,I� {7�SV r ���R'7� " � • 1 F� '� U TI
Rf r , 4If , +II.I r,+ill c + 5 5 1 �a�;-5S �lI•
�rl w,i i<i r< J 1 I,h j i If ji,81
i1 yy li . •/ • - oNrA�fgl E�U�A I� '"- „
F, ,_ �1 �!il (.+11.)1]ijllLNli.I I�+1 ef,1..PS. �?;•� .-.1''I J i - .±::.ri + F-:.- ...?'r •
•
'. MMAH CODE 10102: .. : FIR CLEAN ELAGf::..,.`,i:;C''
MUNICIPALITY: •Pickering•C:
•
:UPPER:TIER;. : : Durham:R:`.: ,;•• ,. .:• • 5:'':1:13,813,333 •
The repayment limit has been calculated based on data contained in the 2012 Financial Information Return,as submitted to the ,
•
Ministry. This limit represents the maximum amount which the municipality had available as of December 31,2012 to commit to
payments relating to debt and financial obligation. Prior to the authorization by.Council of a long term debt or financial obligation,
. this limit must be adjusted by the Treasurer In the prescribed manner. The limit is effective January 01,2014.
•
i.:. FOR ILLUSTRATION PURPOSES ONLY,
• ,...:;The additf¢hat'
'brig-term.6orrbWih�'V✓hich a mdnicipality could undertake over a.5-year;:a:j0=yeat';':a 15=yeaf and a• .;.'
20:year period is shownt::.::,' :_,.: ;'s: ;:_ '`::
•
If Khe'municipalities could:borrow:,at5%'or,7%annually;the annual repayment limits shown above would allow it to'.. ':• •••
••undertake additional tang-term borrowing as follows
: :
• ! � >1.1 y . —.,.,,•.. , . s 1 y $ 17�2,.14:I4;65
•
8
'
L. ((a) 20 ears
@•5%'..a,•.::: •
'ears @ 5% ' a :.:, 1,43,377;670..,• :...
:::.:.::,:.. .:. ,,. .... .;,... a �•':-10
.:..... ,; a):.• :: :years•®,5%F,a.. : .
:•$.+ :••• •
59,804,502
;: .d`yl'i�l i-!x'-sr �I)I �:Yt�:•S L+ ":1: 7Tt'Interest I�gte Iii l��II 'JiIi;l�li If :�1'il'."^f,T,ii•;�jtiW
• . ..:.,::h�i' (a)r .20 years @ 7%p.a....' , : ;
., .. :.'.: ::,-146,338 644 s�:°.. .
;a':,....;!•."i':'s:.: a 15 ears 7% .a,.::.<:....:. 125 810 647:::'
•
•
(a) 10 years:®:7%P a:i`i';;1 ' 97;019;069.:.
•
•
•
•
•
•
•
•
•
•
•
•
• - 87
•
•
ATTACHMENT# _TO REPORT#.P-)NI
City of Pickering
2014
Accessibility Capital Projects Forecast
2014 to 2018
Project Description
2014
Claremont Community Centre Washroom Renovations $90,000
Kinsmen Park Pathway 50,000
Recreation Complex Reception Counter Replacement (design only) 35,000
$175,000
•
2015
Accessibility to Sports Fields (Pathways) $100,000
$100,000
2016
City Hall Upgrades $650,000
Recreation Complex Reception and Registration/Permit Counter Replacement 250,000
Accessibility Upgrades to Greenwood Community Centre (Ramps, Washrooms, 120,000
Entrances)
Delaney Rink Mechanical, Boards & Floor (gross cost = $1,500,000) 100,000
Accessibility to Sports Fields (Pathways) 100,000
$1,220,000
2017
Don Beer Arena New Reception Area $250,000
Elevator at Greenwood Community Centre 120,000
Accessibility to Sports Fields (Pathways) 100,000
Accessibility Upgrades (Washrooms, Entrances, Counters) 45,000
$515,000
2018
Redesign of Recreation Complex Arena Office $250,000
Accessibility to Sports Fields(Pathways) 150,000
$400,000
Grand Total $2,410,000
In addition to the above expenditures the City plans on investing an additional $1.3 million on
sidewalks to meet accessibility requirements. The City's five year Accessibility Plan (2012 -2016)
identified the need to spend $1.2 million on sidewalks for the years 2014 to 2016.
88
ATTACHMENT#_PTO REPORT# tsi_os -14
The Corporation of the City of Pickering
By-law No. XXXX/14
Being a by-law to amend By-law No. 6191/03
to confirm General Municipal Fees
Whereas the Council of the Corporation of the City of Pickering enacted By-law
6191/03, as amended, on October 14, 2003 to confirm general municipal fees.
Whereas Schedule "I" to By-law 6191/03 was updated and replaced under By-law,
6338/04, By-law 6519/05, By-law 6652/06, By-law 6677/06, By-law 6748/07 By-law
6857/08,By-law 6951/09, By-law 7032/10, By-law 7119/11, By-law 7194/12 and By-law
7268/13;
Now therefore the Council of the Corporation of the City of Pickering hereby enacts as
follows:
1. Schedule "I" to By-law Number 6191/03, as amended, is hereby deleted and
Schedule "I" attached hereto is substituted therefore.
By-law passed this 24th day of February, 2014.
David Ryan, Mayor • .
Debbie Shields, City Clerk
•
•
89
ATTACHMENT# 'f- TO REPORT# iN -/f
2014 Draft Current & Capital
Bud • ets
itiSYi
- �y q � '. �• 1• •'�•. -'�. Executive Budget Committee
February 13, 2014
1
•
2014 Budget Direction / Philosophy
• Small Service level increase over 2013 levels
Hamlet expansion —senior snow removal
Museum —additional staffing hours
Communication Coordinator position from mini re-org.
•
• Financial sustainability
• Planning for the future
• Provide value for tax dollars
2
1
90
Ice Storm — December 2013
• Significant damage experienced.
• Estimating $100,000 in initial response costs (2013).
• Council approves Ontario Disaster Relief Assistance
Application on Jan. 13th
• 2014 current budget estimate for removal of hazards for
residents' safety needs to be increased from $390,000 to
$450,000
• 2014 tree canopy recovery estimated to be $1.8 million. •
• Discussions with Province will continue beyond budget
approval
3
2014 Ice Storm Costs
2014 budget is based on 100%
reimbursement of ice storm costs—
current and capital.
If senior level of governments,fail to - =
cover the cost,the budget report will
include financial contingency
strategies. a
The current budget includes financial
flexibility in the EAB program to allow
some of these dollars to be used to = —a
replace trees. (
Ash Tree
The capital budget includes$1.8 m to
replace these trees(1,800 est.).
4
•
1
•
•
2014 Budget Building Blocks
•
214 Cu rre nt&Capltal Bud get 1
0
y
1 '
•
•
fix: -r:'k ,'`T.
ter; r r :ti,
',,,:FT:.
At-
•
if iil,
INOM
2013 Budget AMP DC Study Seaton
$550k increase Michell Bridge $15.0 M FIS
In vehicle res. $470k $18.5 m
5
2014 Budget & Next Term
(2015 to 2018)
2015.to 2018 Budgets `: ... _ _
f W
..2014 Current&Capltal Budget . „
fl�a,I
F it
iiis
2013 Budget AMP DC Study Seaton
$550k increase Michell Bridge $15.0 M FIS
•
In vehicle res. $470k -$18.5m
•
B
3
•
92
•
•
2013 DC Background.Study -
DC Funded Capital Projects
$15,500,000 -
$12,500,000
•$9,500,000
$6,500,000
$3,500,000
$500,000 -
2011 2012 2013 2014
• —DC Funded Capital Projects
The 2013 DC Background study employed a change in philosophy.
Capital forecast projects were reviewed looking for opportunities to employ DC dollars.
7
•
• 2014-DC Funded Capital
Expenditures
•
•
1 Gross DC — Residual I %
Description i Cost I Funding Balance DC Funding
Fire Pumper i $ 800,000 I $ 760,000 $ 40,000• 95.00%!
Regional Radio I 700,000 ; • 665,000 35,000. 95.00%,
• Operation Centre i 27,000,000 8,686,000` 18,314,000 . 32.17%
• Street Sweeper j 300,000 270,000 30,000 , 90.00%'
4 Ton Dump Truck l 195,000 • 175,500 19,500! 90.00%.
Development Projects L. 2,922,400 • 2,078,940 843,460; 71.14%'
Indoor Soccer Dome j 7,146,600 3,412,500. 3,734,100 4775%'
The DC funding represents a'deferral of 32 tax points.
•
8
�3
•
•
New Operation Strategy Centre Funding
. _ ._ . . __. ._ • .. _
•
2014
Budget
Gross Cost $ 27,000,000 •
Financing Sources:_ _�
Debt 20 ear 11 000 000
Rate Stabilization Res. 3,314,000 •
FGT -._--_,_--_- 4,000,000 !
DC-Operation Centre 8,686,000
Total Financin.Sources $ 27,000,000 ;
Full Year Debt Servicing Costs $ 809,400
The DC reserve fund will have to borrow funds to meet its financial obligations.
The new DC rate includes an interest cost component.
This strategy of having the DC reserve fund borrow funds is employed by several •
municipalities such as Oakville,Brampton,Milton and Ottawa.
9
•
What is the Cost of delaying the Op.'
. Centre by One Year?
•
.
2014 ! 2015 •
! — ,----__--- _--Budget __Budget--_
;Gross Cost $ 27,000,000 $ 27,675,000
•
• Financing Sources:_
Debt 20 year 11,000,000 11,457,850
;Rate Stabilization Res. 3,314,000 _i 3,314,000
iFGT 4,000,000 4,000,000
• ;DC-Operation Centre 8,686,000 8,903,150
Total Financing.Sources •$ 27,000,000 $ 27,675,000
• Full Year Debt Servicing Costs I :$ 809,400 $ 874,860
Additional cost over 20 years $ 1,309,200
Assumptions:
Construction cost increase of 2.5%
Interest rate increase of 50 basis points.
•
10
• 5
94
•
Pickering's Long-term Debt
Approach
Debt includes long-term debt,internal loans and capital leases.
The term of debt must be equal to or less than the life of the asset.
The Province limits the total amount of debt that a municipality can issue to
25%of its"own-source revenues".(All revenues less Federal and Provincial
Grants.)
Last year, Pickering Council supported staffs recommendation of a adopting a
debt ceiling"CAP"at 15%of the total taxation revenues.
Pickering has adopted a higher standard.
11
City's Debt Guideline
Using the City's CAP guideline, the 2014 and 2015 debt charges
•are below the City's CAP.
000's ; I 2012 11 2013 I 2014 1 ; 2015
15%CAPI I $7,714 I $8,093 $8,569 i $8,881
II
Debt/Proj.'; 41, 12! 4,418 4,803 5,369
Unused Debt Ca pity , , $3,602 t $3,675 $3,766 I $3,512
1 I Ii
The increase in 2015;reflects the full cost of the Operation Centre's property
tax funded debt cost.
12
•
%5
City's Debt Guideline — Another
Perspective
Total Debt Charges as a %of City Owned Revenues
15.00%
10.00%
1
0.00%
2012 2013 2014 2015
Property Tax Funded
■DC Funded
Community Group Funded(PSC)
13
City of Pickering Forecasted
Draft Debt Charges
511,440,000 -
510,400,000 ��•
59,440,000
58,400,000
57,400,000
56,000,000
55,000,000
S4,000,000
53,000,000
52,000,000 '
cg) ,y0 .y0■gl ti��, ti�,� ry�,'
—Principal&Interest --Forecast —t--15%Debt Cap
Council can control the timing of capital projects that in-turn will
impact on the debt payments. 14
7
96
•
Major Capital Projects
2015 to 2018
• For Future Council Decision
•
_ Preliminary
Construction Financing.Strategy ! Operating_
Description Cost Dc's Debt Grants ! Other ; _Cost
:Community Park-Greenwood $6,500,000 $ 6.50
Library Expansion 15 000,000 , $5.30 9.70
TBD
Museum Visitor Centre 7,250,000.` 1.20 $4.801$•1_25 TBD
Seaton Fire Station&Equip. I 6,833,333 6.60_ ! 0.23; TBD
Senior Centre 16,780,000 15.20 3.30 00 30' . TBD
Total $54,363,333. :$27.10 $20.70 $4.80 $ 1.781
Staff will present to the new Council(mid January 2015),a full cost estimate of •
the above projects. Cost estimate will include all.financing and operating costs.
Sequence and timing of these projects can be influenced by senior government •
level grants.
15
•
• Long Term Capital Financial
Environment & Strategy
- — --- Low Growth - --
Seaton j _ .Moderate Growth (1,840 units)
I
High Growth•(2,000 units I) •
Maximize senior Ieve1 grant funding_o-portunities.
Maximize the use of DC's where possible.
Continue to explore & investigate energy grant incentives.
Our long term financial plan will be flexible &
opportunistic to maximize City resources.
16
• §7
•
Multi Year Financial Projection
2015 to 2018 _ . -.._.- _.. .
US Economy Projected Growth
3.5%
35
2.9-3.1 0-3
3.0 2.5-3.3
23-2.6
1.5 `kw
2014 2015 2016 2017-2018 -
®GDP
US unemployment rate is projected to decrease from 6.8%(2014)to
approximately 5.2—5.8%(2017—2018).
Sours:US Federal Reserve—Monetary
Policy Report,February 11,2014 17
2014 Federal Budget — Economic
Forecast
Key Canadian Economic Facts
1 11 2014 2015 2016 1 2.017 ! 2018
(Real GDP 2.3 2.5 ; _ 2.5 2.3 1 2.2
!Unemployment Rate ! 6.8 6.6 ' 6.4 6.3 6.2
13-Month T-Bill Rate j 1:0 _ 1.5 I 2.7 I 3.6 4.0
•
The strengthening of the global economy specifically in the advanced world
and the recent depreciation of the Canadian dollar should help economic
growth. .
18
9
98
•
•
Long Term Financial Forecast
2014 ._ 2015 _ 2016 2017 _ 2018
L Draft _Proforma_Proforma_ Proforma _ Proforma
• BUDGET. BUDGET BUDGET BUDGET BUDGET
Cr Base Budget
Levy(Inc.Growth) iii 3.75% I:2.50-3.50% .3.00-4.00% 1 3.00-4.00% 4.00-5.00%
Priority Sequence ;' j i
Decrease in Draw I!
RateStabTization. !l1 II 1.00% 1 1.00% i I 1.00% 0.50%
Roads&Bridge Levy !i I 1.00% 1.00% 1.00% I 1.00%
•Sub TotalII ..3.75% 450-5.50% 5.00-6,00% 5.00-6.00% ' 5.50-6.50%
I City Share DC Funding 1 I 0.25% I 0.25% 1 025%
Special Projects !i I _ 1013bortunilies: First Pri, I, First Pri, ■ _2nd Pri.
11
L''e___)y 1nc� II L450to6SD/L$25to6,25/L�25to625/J5,75to675%'
Rate Stab.Ending Bal._ $7.1 m $5.2 m - $3.9 m $3.3 m $6.1 m •
111,1 li I' fl i1
There are many factors that may change the financial forecast such as: assessment
growth,interest rates and senior level grant funded capital projects.
19
•
•
2014 Budget Summary
2014 Budget Summary` •
•
%
Total City Operations 5.85
•
Less: Assessment Growth . -2.28
City Base Budget 3.57:
• AMP Council Recommendations
Bridge Washing&Crack Seal Prg. 0.18
Proposed Budget . I 3.75
•
The 3.75%proposed budget levy increase(excluding the impact of
reassessment)translates into an increase of$47.40 or$0.91 per
week for an average residential dwelling in Pickering based on
• assessment of$358,400.
20 •
1%9
Impact on the Total Tax Bill
4.00%
3.50%-/ •
2.93%
PtA, 'Yft
3.0C% ,
2364 -
•
% 114
•
1°0% -_kreiN
Z1 .
1.50% )
;f .k.-.7--A41,
1.00% g, 4
5° 6174.tiell.ftte4k [4:t
C' 9‘ 1::14F
2011 2012 2013 2014
1.Overall Tax Bill 7-City
The cumulative property tax increase on the total tax bill is 8.78%over the
current term of Council. 21 •
Household Spending Comparison
Pickering's Property Taxes in Perspective
Typical Household Costs _1 I Annual ; I Monthly .1
I
H dro $_1 826
Natural Gas , $ 1,093 ' $ 91
60L of•as per week ; $ 4,072 I $ 339 I
Car Insurance(Avg.GTA) $ 1,500 I $ 125
Home/Phone/CablefTV Internet , $ 1,866 ; $
I ;
•
Total City Services $1,345 $ 112
• Pickering's residents receive over 100's of services&programs
• For less than many household expenses.
22
1 1
100
•
•
•
What Services Do Your Tax Dollars
Provide •
•
•
Fire Servios �' _.___ ._..._._..__�. ._..-�- $369
•Sidewalks,Roads&Streetlights -.11 -.__ -234
Facilities and Recreation Programs ....
Library I $1'2
Parks
CdyDevelopment ._ $R9
EngineeringServios - $68
Information Technology _ 36 $1,344.33 Tax Dollars
CAOOffice&Customer Care} $D per City of Pickering
•
Mayor,Coundl and Support ,, $7 Average Residential
pec.ccmnr.f nF CaxR An(L
•
Clerk's f $ ,
•
Human Resources
Legal a, $�
BylawServises . $7
Finance&Supply&Servir •
$0 $60' $100 $150 $200 $250 $300 $360 $400
•
23
•
•
•
•
•
2014 Budget Report
Recommendations will include the following:
•
' 1. Council to confirm that the budget was developed using the cash basis of
accounting as per Ont.Regulation 284/09.
2. Any committee decisions to be re-allocated to their proper cost centre for
accounting and expenditure control purposes.
•
3. The Treasurer be authorized to draw on the Rate Stabilization Reserve to
• accommodate ice storm recovery costs as a result of the senior government
• funding shortfall.
4. The budget be revised to reflect any future negotiated labour settlements.
•
24
•
Thank You
Next Step
2014 Capital Budget
Would you please turn to page nine
in your capital budget book.
25
•
102 13