HomeMy WebLinkAboutFIN 05-21Report to Council
Report Number: FIN 05-21
Date: March 22, 2021
From: Stan Karwowski
Director, Finance & Treasurer
Subject: 2021 Current & Capital Budget
-File: A-2000-001
Recommendation:
1.That Report FIN 05-21 of the Director, Finance & Treasurer be approved;
2.That the following budget recommendations be approved;
(a)That the 2021 Current Budget expenditure for personnel costs, consisting of
salaries and wages (Account 1100), overtime (Account 1200) and employer
contributions (Account 1400), excluding Cost Centres 2712 and 2293, in the
total amount of $60,364,218 be approved; and
i)That the 2021 Current Budget for Cost Centre 2712 (Programs)
expenditure for personnel costs, consisting of salaries and wages
(Account 1100), overtime (Account 1200) and employer contributions
(Account 1400) in the total amount of $1,137,031 be approved; and
(ii)That the 2021 Current Budget for Cost Centre 2293 (Animal Services)
expenditure for personnel costs, consisting of salaries and wages
(Account 1100), overtime (Account 1200) and employer contributions
(Account 1400) in the total amount of $506,210 be approved;
b)That the 2021 General Government Budget for grant expenditures in the total
amount of $184,068 be approved;
c)That the Heritage Property Tax Rebate in the amount of $10,000 be
approved;
d)That the 2021 Gross Current Budget expenditures for City purposes in the
amount of $54,684,613 (excluding personnel costs, grant expenditures and
Heritage Property Tax Rebate) less estimated current revenues of
$47,004,304 (City revenues of $40,667,304 plus $4,000,000 for estimated
casino gaming revenue, $2,037,000 for assessment growth plus
supplementary taxes of $300,000), less Phase One and Phase Two Safe
Restart Funding of $2,802,100 and net transfer from the Rate Stabilization
Reserve of $1,500,000 for City operations be approved;
e)That the $4,000,000 in estimated casino gaming revenues be transferred to
the newly established Casino Reserve;
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 2
f)That the Capital from Current expenditure in the amount of $731,660 funded
from property taxes be approved; and
g)That the total final City levy under paragraphs a), b), c), d) and e) above,
plus the following additions that result in a total final levy of $70,841,695
being an increase of approximately 1.45 percent over the 2020 Budget, be
approved:
i)Hiring of three additional firefighters ($283,000) for the Seaton fire
station; and
ii)Service level increases that consist of $51,000 for additional staffing for
seasonal By-law enforcement at the waterfront and parks, an investment
of $121,300 for the City to meet provincially legislated accessibility
requirements and $75,000 to establish a Community Investment Fund;
3.That the 2021 Capital Budget for the City of Pickering with a Gross Expenditure of
$73,041,800 be adopted as presented:
a)That the following capital financing sources be approved as presented in
the 2021 Capital Budget:
Transfer from Current Fund to Capital Fund $731,660
Transfers from Reserves:
-Rate Stabilization Reserve (7021)4,040,043
-City Share Dev. Charges (7022)1,811,500
-Vehicle Replacement (7040)
-Major Equipment Reserve (7062)
1,547,000
1,345,000
-Capital Replacement (7001)384,600
-Facilities Reserve (7055)385,000
-Self-Insurance Reserve (7020)200,000
-Property Fence Line Reserve (7057)180,000
-Tennis Court Reserve (7061)90,000
-Artwork Reserve (7067)50,000
-Don Beer Arena Surcharge (7033)40,000
-Rec. Complex Pool Surcharge (7035)30,000
Transfers from Reserve Funds:
-Development Charges (7601 – 7630)25,024,180
-Third Party Contribution (7501)9,041,375
-Parkland (7502)4,180,000
-Federal Gas Tax Funds (7505)3,567,000
-Roads & Bridges (7709)790,000
-Animal Shelter (7706)291,400
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 3
-Seaton Land Group FIA (7713)145,785
Debt - 20 yr 11,391,900
Internal Loan - 2 yr 2,175,000
Internal Loan - 5 yr 200,000
Internal Loan - 10 yr 247,500
Donations 10,000
Canada Cultural Spaces Fund (CCSF) 4,000,000
Investing in Canada Infrastructure Program (ICIP) –
COVID -19 Resilience Infrastructure Stream
222,500
Federal Grant – TBD 40,000
Provincial Grant – Ontario Community Infrastructure
Fund (OCIF)
880,357
Total $73,041,800
b)That total external debt financed by property taxes of $11,391,900 for the
projects identified in the 2021 Capital Budget, and as indicated in this
report, for a period not to exceed 20 years be approved;
c) That the internal loans in the amount of $2,622,500 be undertaken at the
discretion of the Director, Finance & Treasurer;
d)That projects identified in the 2021 Capital Budget as being financed
through the issuance of debt be subject to additional, specific approval of
the expenditure and the financing by Council;
e)That the source of financing for the Demolition & Site Remediation capital
project (5315.1901) be changed from future land sales to Operations
Centre Reserve Fund to eliminate the unfinanced capital liability when the
project is converted to the new financial system;
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 Director, Finance & Treasurer, be
used to apply towards additional principal repayment, outstanding loan or
debt charges or to reduce debt not issued, balloon payments in future years
through transfer to Rate Stabilization Reserve, internal loans or any other
amounts to be financed;
g)That all Capital expenditures or portions thereof approved in the 2021
Capital Budget to be financed through the issuance of debt may, at the
discretion of the Director, Finance & Treasurer, be financed through internal
loans, current or capital funds or a combination thereof;
h)That the Director, 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; and
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 4
i)That the Director, 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;
4.That the Director, Finance & Treasurer be authorized to transfer:
a)Any surplus current operating funds at year-end in excess of approximately
$125,000 be allocated in the following manner: the first $70,000 be
allocated to the Elected Officials Life Insurance Reserve and the remaining
surplus be allocated in the following ratio: 25 percent to the Rate
Stabilization Reserve (7021); 20 percent to the Facilities Reserve (7055); 5
percent to the Artwork Reserve (7066) and 50 percent to the City Share DC
Projects Reserve (7022);
b)Any surplus funds from the Emergency Operational Capital Needs Account
(2901.0000.0000) to the Facilities Reserve; and
c)The revenue from the sale of used vehicles recorded in account
(1593.0001.0000) to the Vehicle Replacement Reserve (7040);
5.That the Director, Finance & Treasurer be authorized to make any changes or
undertake any actions necessary including: adjusting the budget plan to meet
provincial COVID reporting requirements while maintaining the approved levy; to
accommodate any labour relations settlements including adjusting the Personnel
related accounts and that any revenue shortfall as a result of a Provincial tax
policy change be adjusted through the 2021 final tax rates;
6.That the Director, 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) and any
unfinanced capital be funded from a transfer from reserves or reserve funds;
7.That the Director, Finance & Treasurer be authorized at his discretion to fund
Property Tax Write-offs account (2134.0000.000) that exceed the budget provision
due to assessment appeals that translates into a deficit position for the corporation
and this shortfall be funded from a transfer from the Assessment Appeal Reserve
(7011) and if this reserve is depleted then the shortfall be funded from the Rate
Stabilization Reserve (7021) and that any shortfall from Payment-in-Lieu
Education Share revenue estimates be funded from a transfer from the Rate
Stabilization Reserve (7021);
8.That the Director, Finance & Treasurer be authorized to revise the funding ratio’s
for development charge funded projects where applicable to reflect the removal of
the 10 percent statutory deduction that was eliminated through the adoption of Bill
197, COVID-19 Economic Recovery Act, 2020;
9.That the Director, Finance & Treasurer be authorized at his discretion to close any
current and completed prior year’s capital expenditure accounts and to first apply
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 5
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;
10.That Council approve a change in funding source for capital project 5325.2105
Accessible Pedestrian Signals from 100 percent funded from the Rate
Stabilization Reserve to:
a) $169,838 to be funded from unused provincial grant funding (Invest in
Ontario and Provincial Budget) from accounts 5999.0898.1623 and
5999.0899.1623; and
b)$190,562 to be funded from the Rate Stabilization Reserve (7021);
11.That Council approve the cancellation of the following previously approved Capital
projects:
a)Two 1 Ton Dump Trucks with Aluminum Body, Plow and Salter – New
(Seaton) (5319.2003) - $140,000;
b)Front Plow and Wing Attachments for Seaton – New (5319.2014) –
$20,000;
c)1 Ton Truck with Utility Body Replacement (5319.2004) – $110,000;
d)Duffin Heights Sewer (5320.1116) – $196,612;
e)Whitevale Master Drainage Plan Implementation – Construction
(5320.1901) – $2,250,000;
f)RU-13 Salem Road – Road Reconstruction (5321.1608) – $155,635;
g)RP-10 Altona Road – Sidewalks & Streetlights (5321.1909) – $150,000;
h)Accessible Pedestrian Signals – 4 Locations (5325.2004) – $360,400;
i)FS #2 Accessibility Upgrades & Interior Renovations (5340.1809) –
$94,875;
j)FS # 2 Lighting Retrofit (5340.2001) – $60,000;
k)Civic Centre Backup Generator Replacement – Construction (5700.2002) –
$800,000;
l)CHDRC Tennis Court Flooring Replacement (5731.2004) – $1,200,000;
m)Animal Shelter – Design (5219.2003) – $881,850;
n)Animal Shelter – Construction (5219.2004) – $8,273,650; and
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 6
o)Animal Shelter – FF&E (5219.2005) – $300,000;
12.That Council approve an increase to the Fire Protection Cost Centre (2240)
budget, in the amount of $27,200 for the purchase of technology upgrades and the
corresponding cost be offset 100 percent by Provincial Fire Safety Grant;
13.That the Director, Finance & Treasurer be authorized at his discretion to close any
capital or consulting account expenditure and corresponding revenue source that
is over three years from the original purchase order date of issuance;
14.That the Director, Finance & Treasurer be authorized at his discretion to refinance
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;
15.That the Director, 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 (including summer rentals) 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 2021 Current Operating, User Fees and Capital Budgets to
reflect: (i) any Council changes made at the March 22 Council meeting; (ii)
any reorganization or personnel account changes (salary, benefits and
overtime), (iii) reclassifications that result from salary increases or
negotiated labour settlements; and
d)To process budget transfers during the fiscal year which do not change the
overall approved property tax levy;
16.That Council waive the Purchasing Policy where the estimated vehicle repair cost
is below $30,000 (HST excluded) for all fleet vehicles and off road vehicle
equipment in 2021;
17.That Council authorize the Director, Finance & Treasurer to administer the
Community Investment Fund by following the general intent of the Community
Grants program; and
a)That any grant funding request up to $2,500 be jointly approved by the
Chief Administrative Officer and the Director, Finance & Treasurer and any
grant request above this amount be approved by Members of Council and
staff report to Council regarding the use of these funds through the 2022
Budget process;
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 7
18.That the Director, Finance & Treasurer be authorized to amend Section 06.01 b)
and 06.02 b) of Policy ADM 190 such that the word “every” be replaced with
“Starting in 2022”;
19.That the Director, Finance & Treasurer be authorized at his discretion to draw
from the Winter Control Reserve to fund any Current Budget deficit as a result of
higher than budget winter control costs;
20.That Council approve the continuing engagement of the firm of Watson &
Associates Economists Ltd. to be used for the Five Year Capital & Operating
Financial Plan; for the engagement of the new Development Charge Background
Study and new Community Benefit Charge Study and in support of the DC
Background Study and issues related to the City, Seaton and/or Duffin Heights;
21.That Council approve the continuing engagement of the following firms: Nixon
Poole Lackie LLP, Municipal Tax Advisor Group and Municipal Tax Equity
Consultants for any studies related to the reassessment or other property tax
issues and for to protect the property tax base by defending assessment appeals
through proactive assessment base management;
22.That Council approve the award of professional services in accordance with the
City's Purchasing Policy Item 10: 03 (c) to Public Sector Digest Inc. for the
completion of the Ontario Regulation 588 (2021) Compliant Asset Management
Plan in the amount of a maximum of $70,000;
23.That Council approve the establishment of the WSIB Excess Indemnity Reserve
Fund and that the draft by-law attached hereto for the establishment of the reserve
fund be enacted;
24.That Council approve the transfer of $136,775 to the WSIB Excess Indemnity
Reserve Fund;
25.That Council approve the annual transfer of funds from the WSIB Reserve when
its year-end balance is greater than $4.0 million, and that these excess funds be
transferred to the WSIB Excess Indemnity Reserve Fund;
26.That the Director, Finance & Treasurer be authorized to initiate any additional
assessment appeals necessary to protect the assessment base of the City;
27.That the Director, Finance & Treasurer be authorized at his discretion to transfer
any green energy rebates and revenue associated with the Claremont solar roof
rental project account (1530.2620.0000) and other incentives and rebates account
(2620.9993.0000) to the Reserve for Sustainable Initiatives;
28.That Council amend the Community Grant policy as follows:
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 8
a)That the grant application deadline date for the 2022 Community Grant
Program be October 29, 2021 to give community groups sufficient time to
complete their applications;
29.That any unused funds in excess of $1,000 for accessibility capital projects (6183)
be transferred to the Reserve for Accessibility Initiatives (7053);
30.That Council approve the following to be added to the 2021 Budget to be funded
from the Rate Stabilization Reserve (7021);
a)$35,000 for the rental of an additional radar camera; and
b)$150,000 for Pickering Fire Services’ share of the cost for NG911 Dispatch
equipment (text to 911);
31.That any unspent 2021 Local Planning Appeal Tribunal (LPAT) funds budgeted
under General Government consulting account (2126.2392) be transferred to the
Tennis Court Reserve (7061);
32.That Council approve the 2021 Low Income Seniors & Persons with Disabilities
grant amount to be increased from $375 to $450 per household;
33.That Council pass the attached General Municipal Fees and Charges By-law and
incorporate the user fee schedule into the 2021 Current Budget:
a)That Council approve revising “Schedule B – Fees Payable for Building
Permits” of the Building By-law with the Building Permit fees listed in the
2021 User Fee Schedule;
34.That Council approve the establishment of the 2021 COVID-19 Recovery Reserve
Fund and that the draft by-law attached hereto for the establishment of the reserve
fund be enacted and that the Provincial funds received be transferred to this
reserve fund;
35.That the Director, Finance & Treasurer be authorized to draw from the 2021
COVID-19 Recovery Reserve Fund to maintain the City’s financial and business
plans due to direct and indirect affects of COVID-19;
36.That Council approve the levy allocation of the $121,300 for Provincial
accessibility requirements to the following accounts:
2621.2479.0000 Sfwr/Hdwr Maint Contracts $13,800
2621.2340.0000 Seminars & Education 7,500
2621.1100.0000 Salaries & Wages 70,000
2621.2399.0000 Outside Agency Services 30,000
37.That Council approve the funding of the Coordinator, Community Safety position
(Cost Centre 2712), either by senior government grants or by a transfer from the
Rate Stabilization Reserve (7021); and
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 9
38.That the appropriate City of Pickering officials be authorized take the necessary
actions as indicated in this report.
Executive Summary: This report contains a summary of the 2021 Current and
Capital Budgets and a discussion of the recommendations. Staff have worked hard to
ensure that the 2021 Budget is respectful of each dollar contributed by taxpayers,
reinvesting those revenues back into our infrastructure and the many services the City
provides to our residents. The big differences between municipal government and federal
and provincial governments are the number of revenue streams that fund their budgets
and the impact on residents. Municipal governments have limited revenue, consisting
primarily of property taxes and service fees, such as for recreation, by-law and planning.
The 2021 Budget strikes a balance between providing the level and types of services that
residents expect and ensuring affordability for all residents.
The 2021 Budget builds upon the success of the 2020 Budget and continues to be a
good news story. It keeps property taxes affordable and provides the following benefits to
our residents and community:
•Funding for a new full-time Coordinator, Diversity & Inclusion position (CAO
Department).
•Increase in seniors property tax grant from $375 to $450.
•Major 2021 Capital Projects: Pickering Heritage & Community Centre, Highway 401
Road Crossing Land Acquisition, Waterfront Trail Land Acquisition, Whitevale Master
Drainage Plan Improvement Construction and Rotary Frenchman’s Bay West - Park
Completion & Washroom Facility.
•Increase in Capital Budget roads and bridges projects expenditures from $4.9 million
to 6.1 million - an increase of $1.3 million or 26 percent.
•Funding for By-law enforcement coverage at the waterfront and park areas from mid-
May to Labour Day.
•Investment of $121,300 to help meet the new Provincial Accessibility standards for
website compliance.
•Funding of $50,000 for mechanical harvesting of Eurasian Water-Milfoil weeds in
Frenchman’s Bay.
•An increase of 3 positions for front line firefighting staff (Seaton).
•Establishing a Community Investment Fund ($75,000) to provide financial assistance
to Pickering community groups.
Financial Implications: The 2021 Current and Capital Budgets, if adopted as
amended, will result in a property tax levy increase of 1.45 percent (City Share Only)
over last year which translates into a 0.44 percent increase in the City’s share of the
total property tax bill.
This increase, when combined with the Region and the School Boards increase, results
in an average increase of 1.54 percent on the total property tax bill.
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 10
Discussion: At the Executive Budget Meeting, a question was raised by a Member of
Council regarding general taxation and infrastructure funding. The information below
addresses that question.
According to Statistics Canada, National Economic Accounts Division and the
Association of Municipalities Ontario, municipalities receive a small portion of total taxes
paid by individuals in Canada, when sales taxes, income taxes, property tax, etc. are
considered. For example, Ontario municipalities receive only 9 cents of every dollar tax
dollar raised in Canada, while the Provincial and Federal governments receive 44 cents
and 47 cents respectively. In contrast to this, municipalities own approximately 60
percent of the capital infrastructure, while the Provincial Government owns 38 percent of
the infrastructure and the Federal Government 2 percent.
Chart One
Ownership vs. Funding Gap
0%20%40%60%80%100%
Municipal Provincial Federal
Taxes
Infrastructure Ownership
The municipal reference in the legend above includes both upper and lower tier.
It is interesting to note, that the Toronto Star editorial of March 14, 2021 makes the
following comment:
“Municipal Governments are at the bottom of the pile when it comes to powers and
financial resources in Canada”.
The above chart supports the statements as it relates to financial resources/taxation.
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 11
Explanation of Key Recommendations
Cancellation of Capital Projects – Recommendation 11
The capital projects listed in Recommendation 11 in many cases have been rebudgeted
in the 2021 Capital Budget or included in the 2022-2025 Capital Forecast because the
original budget amount was too low due to the project delay. In most cases, by
rebudgeting a higher amount, the project can proceed without staff either reducing the
project’s scope to address the funding shortfall or trying to find additional funds to cover
the project’s shortfall. In other cases, the projects cancelled or deferred were dependent
on senior government grant funding which was not received.
Increase to Fire Services Budget ($27,200) – Recommendation 12
Since the start of the pandemic, Ontario’s fire services have faced unprecedented
challenges. In Pickering, our ability to train our Fire Services staff in a COVID
environment brought with it new challenges due to restrictions on gatherings and our own
commitment to best practices in an effort to curtail the spread of the virus. Additionally,
our ability to conduct fire code enforcement inspections and public fire safety education
classes have been slightly eroded for the same reasons.
The Provincial Fire Safety Grant will help to support Fire Services and will assist in
meeting the mandates and to overcome these ongoing challenges. These grant funds
are intended to provide fire departments with the flexibility to support in the two priority
areas as identified above. Fire Services plans include technology upgrades to ensure
that we can safely continue to conduct training for fire crews and that inspections and
public education programs can safely continue for our residents and businesses. This
project is in line with the grant requirements and it will ensure that Fire Services is able to
continue to serve our customers/residents in the City with the services they have come to
expect and deserve. Planned expenditures include items such as computer hardware
and software, including desktops and rugged laptops.
Establishment of WSIB Excess Indemnity Reserve Fund – Recommendation 23
The City is a Schedule 2 employer under the Workplace Safety and Insurance Act, and
therefore, self-insures the entire risk of its own WSIB claims, and is 100 percent liable for
reimbursing WSIB for all claim costs. Every year the City budgets $710,000 dollars for
WSIB claims and any remaining dollars are then transferred to the City’s WSIB Reserve
Fund (7705). The 2019 year-end position of this reserve fund was $3,930,110.
To reduce the WSIB financial risk exposure, the City purchases an Occupational
Accident policy. The City previously purchased an Excess Indemnity Insurance policy,
however, staff are recommending that the City establish a separate reserve fund to
replace the insurance coverage from this policy. City staff consulted with an actuarial
consultant regarding this strategy and they support the City adopting this plan. The
Excess Indemnity Reserve Fund will be funded from two sources. The first source is from
premiums that were previously paid for purchase of the Excess Indemnity Insurance and
recommendation 24 is transferring $136,775 to this reserve fund. The second source is
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 12
from the WSIB Reserve Fund (7705) whereby if the year-end balance exceeds $4.0
million, the residual amount would then be transferred to the WSIB Excess Indemnity
Reserve Fund. (This transfer is accomplished through Recommendation 25). The
financial goal of the WSIB Excess Indemnity Reserve fund is to reach a balance of $2.5
million. The budget target for this reserve fund will be reviewed in three years when the
City undertakes its next actuarial WSIB liability review.
Establishment of 2021 COVID-19 Recovery Reserve Fund – Recommendation 34
On March 4, 2021 the City received unexpected good news that it was receiving
$1,598,618 from the Province. The City will receive these funds in two equal instalments
–on or before May 1, 2021 and the other on or before November 1, 2021. These funds
are to be used to address COVID-19 operating costs and pressures. Provincial
documentation provides direction that any unused funds are to be transferred to a
reserve fund to be used for any future COVID-19 operating costs. Recommendation 34
provides the Treasurer the authority to transfer or use funds from this reserve fund to
mitigate any negative impacts due to COVID-19 on the City’s financial and or business
plans. One of the lessons learned from the pandemic is its unpredictability and its
corresponding impact on municipal operations.
2021 Current Budget
At the March 4, 2021 Executive (Budget) Committee meeting, Council was presented
with a proposed budget levy increase of 1.45 percent, which was accepted by the
Executive Committee. Based on an average assessment of $612,000 the 1.45 percent
increase will result in an average increase of approximately $28.89 per year or 56 cents
per week for the average single detached dwelling in Pickering. Unlike goods purchased
by consumers where there is a tangible product that is received each time there is a
transaction, many City services provided to residents such as park or road maintenance
are not paid for as the services are used or received. For this reason, many residents
may not be aware of the costs associated with the vast array of services offered by the
City. Attachment 5 shows a breakdown of the average daily cost of the City’s municipal
services (based on the average assessed value of a single detached dwelling -
$612,000).
Tax Increase Summary
The 1.45 percent City share tax increase translates into an increase of 0.443 percent on
the total residential tax bill. The 1.45 percent levy increase compares favourably to other
municipalities, especially given that Pickering has had the lowest tax rate among its
Durham Region Lakeshore neighbours for over nineteen years (1998 up to 2017) and
has experienced relatively low assessment growth for many years. Adding the Region’s
(1.98%) tax increase and Pickering’s (1.45%) and the School Board’s estimated 0
percent increase, the total increase for the average residential ratepayer will be
approximately 1.54 percent.
In 2000, Pickering Council approved a zero percent levy increase and since then, budget
levy increases have ranged from 9.8 to 2.47 percent.
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 13
Chart Two
Budget Levy Increases 2001 to 2021
For the last few years, the levy increase has been under 3.0 percent. The average
increase for the current term is 2.3 percent which is below the average for the last few
terms.
The table below provides a summary of the financial impact of the proposed 2021 tax
levy increase based on various assessed values.
Financial Impact of Budget Increase
City Share Only
Residential Assessment $100,000 $530,000 $612,000 $900,000
Increase (Over 2020 ) $4.72 $25.02 $28.89 $42.48
The 1.45 percent City share tax increase translates into an increase of 0.443 percent on
the total residential tax bill. Durham Region’s 1.98 percent increase translates into 1.095
percent on the total residential property tax bill. Adding the Region’s (1.095% ) tax
increase and Pickering’s (0.44%) and the School Board’s estimated 0 percent increase,
the total increase for the average residential ratepayer will be approximately 1.54
percent.
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 14
Chart Three
Impact of Budget Levy Increases on Total Residential Property Tax Bill
Durham Region 1.095%
City 0.44%
1.54%
Combined Increase
For 2021, Pickering’s levy increase was below Durham Region’s.
No reassessment for 2021
The good news for Pickering residents is that there is no reassessment for 2021. (The
reassessment is being deferred to 2022.) In a two tier municipal government structure,
there is always going to be property tax reassessment shifts among municipalities. With
Pickering’s location bordering Toronto, the real estate property values have historically
increased at a higher rate than those municipalities who are located further away from
Toronto. In the past, an uneven increase in property values has resulted in property tax
shifts among lower tier municipalities. On the front page of the Final Residential Property
Tax Bill, on the bottom left corner, is a schedule entitled “Explanation of Tax changes
from 2019 to 2020”. This schedule includes a line called Tax change due to
Reassessment and for 2021 and this line should be zero for this year.
At the February 22, 2021 Council meeting, Council adopted a motion related to the
correspondence from the Manager of Finance/Treasurer from Perth County. The Perth
County correspondence lamented that the reassessment was deferred to 2022 further
complicating the assessment challenges that are specific to a weighted farmland
residential property tax base. His argument is that for Perth County, the last
reassessment, resulted in a property tax shift to the farmland class. Therefore, the
arguments being put forth are: reassessment should not be delayed and that for the next
reassessment, Perth County is reasoning that there will be a reassessment shift away
from the farmland class. For Pickering, farmland accounts for 0.3 percent of the property
tax base. Therefore, the assessment issues of Perth County are not related to Pickering
and as stated in the previous paragraph, not having the reassessment likely benefits
Pickering residents.
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 15
Risk Analysis
As one looks forward, it is extremely difficult to project future year budget requirements
with a high level of certainty. The most significant uncertainty remains the ongoing
financial impacts from the COVID pandemic. There remains a significant risk that
expenditures and revenues may take a longer period to return to historical levels. In
some cases, COVID related impacts might cause certain services to establish a new
normal resulting in corresponding budget increases in future years. The introduction of
the higher level of cleaning within City facilities may become a permanent standard for
the City to adopt.
2021 Challenges and Opportunities
Outstanding Assessment Appeals
There is currently $2.0 billion in outstanding assessment appeals for the commercial
and industrial property tax class for the City. These are multi-year appeals that range
from 2013 up to 2020. These appeals are mostly for large commercial and industrial
properties with complex valuations that often have interests from multiple parties.
The appeal schedules are set by the Assessment Review Board and the appeals can
take years to resolve. The ARB made some progress in 2020 due to the fact the multi –
year appeal for the Pickering Town Centre (PTC) was settled. It is staff’s understanding
that the only outstanding appeal for PTC is for the year 2020.
Any assessment appeals that are not settled during the current year are automatically
deemed outstanding for the 2021 taxation year. Every year these appeals remain
outstanding, the settlement cost increases, creating additional financial risk to the
Corporation. For the last few years, staff have budgeted for the outstanding commercial
and industrial appeals and any funds remaining from these prior years has accrued to
fund anticipated settlements in 2021. If the budget provisions are insufficient to fund the
reductions, the City would draw on the Assessment Appeal reserve to fund any shortfall.
Development Charge and Community Benefit Studies
In the Finance Department budget, there is funding for $80,000 to undertake the a
Development Charge and Community Benefits Study. The DC and CBC studies are
funded 100 percent from the Development Charges Reserve Fund.
The Province of Ontario has recently made changes to the Development Charges Act
and Planning Act and provided a transition period of until September 18, 2022 to comply
with the changes. The City needs to complete a new Community Benefit Charge Study
before this date and prepare a new DC background study to reflect the changes in
legislation and to allow the City to continue to collect DC’s after the expiry of the current
DC By-law on December 31, 2022. The work plan is to commence both studies in the
fall with a target completion date of second quarter 2022. This is a major inter-
departmental project that will draw resources from almost every City department.
Currently, funding for the new animal shelter is under the Development Charges
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 16
Protective Services component and the City cannot use this funding source once the
new DC By-law is adopted. The finance strategy is to replace some of DC funding with
the Community Benefit Charge (CBC) for the Animal Shelter. However, you have to
complete the Community Benefits Study before you can apply the CBC. It should be
noted that the CBC can only be charged to buildings with more than 4 floors or have in
excess of 10 residential units.
Elexicon Revenues & Forecast 2021 to 2024
On January 28, 2021, the CAO and the Director Finance & Treasurer attended a
meeting by Elexicon Corporation where they presented their 2021 budget and a financial
forecast for the years 2022 up to and including 2025. The financial information from that
meeting as it relates to dividends and interest income (promissory notes) is presented
below.
The City holds $25.069 million of Elexicon promissory notes. The income from
promissory notes is based on an interest rate of 4.13 percent and the interest rate is
approved by the Ontario Energy Board (OEB). The 2019 accounting book value of the
City’s Elexicon investment, is $96.376 million.
The financial plan is to use the Rate Stabilization Reserve to mitigate the decrease in
dividend payments for the years 2022, 2023 and 2024. Therefore, the draft financial plan
for 2022 will include an additonal draw of approximately $547,000 from the rate
stabilization reserve.
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
2021 2022 2023 2024 2025
Elexicon Projected Payments
Interest on Prom Notes Forecast Dividends
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 17
2021 User Fees and 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 for virtual programs due to the pandemic.
User Fees and Charges have been established so that those who benefit directly from
programs and services contribute to the cost of the service. The City’s user fees and
charges have been updated for 2021 to reflect such things as inflationary increases,
adjustments to ensure greater cost recovery and updates based on comparable fees in
neighbouring municipalities. Members of Council should note that due to the pandemic,
the implementation of the Council approved sports field permit hourly increase of
September 2020 will be deferred to November 2023. As such, the user fee schedule of
2021 includes the sports field (seasonal) user fees of November, 2019. Therefore, the
deferred implementation of hourly sports field permit fees is estimated to save
community and sports groups approximately $170,000 in 2021.
Asset Management
Maintaining public infrastructure in a state of good repair is a significant responsibility
and cost for municipalities. Critical investments in our assets at the right time help
extend the life of the assets and lower the overall cost of ownership while ensuring that
the assets remain current and safe for public use. These assets are used to provide
residents, businesses, employees and visitors access to services including
transportation, recreation, culture and economic development and have a direct link on
the quality of life for Pickering residents.
Every year, the City has been increasing its funding of reserves and reserve funds to
ensure that it has the dollars available or required to purchase the replacement of the
critical and core assets. For 2021, the Draft Budget as submitted to Council includes
additional funding for the roads and bridges reserve fund; storm water management
reserve fund, vehicle replacement reserve, animal shelter reserve fund and tennis court
reserve.
Please find below a quick snapshot of select Durham Lakeshore municipalities
measuring the consumption of their assets. A ratio of over 50 percent means that the
City has consumed more than half of the asset’s life.
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 18
Table One
Asset Consumption Ratio
2014
(%)
2015
(%)
2016
(%)
2017
(%)
2018
(%)
2019
(%)
Whitby 35.40 36.80 37.80 38.40 38.90 39.09
Clarington 37.90 38.00 38.80 40.00 40.69 40.92
Oshawa 38.60 39.10 39.90 40.60 42.45 44.08
Pickering 52.00 50.30 50.60 50.20 50.40 47.86
The Ministry of Municipal Affairs considers a ratio of 26 to 50 percent moderately new
and 51 to 75 percent to be moderately old. As the above data indicates, the City is
making progress on replacing its old assets. As the above ratio indicates, the City has
consumed less than 50 percent of its assets.
2021 Tax Rates
As has been the case for the last few years, the 2021 Property Tax rates and
corresponding levy By-law will be presented to Council after the City has received the
education tax rates from the Province.
2021 Capital Budget
This year the draft Capital Budget is $73.0 million. Major capital projects in 2021 include
the Pickering Heritage and Community Centre ($29.1 million), Highway 401 Road
Crossing Land Acquisition - Phase 2 ($14.5 million), Waterfront Trail Land Acquisition
($3.1 million), Whitevale Master Drainage Plan Improvement Construction ($3 million ),
Rotary Frenchman’s Bay West - Park Completion & Washroom Facility ($3 million) and
many bridge and road resurfacing and reconstruction projects ($3.1 million).
Five Year Capital & Operating Financial Plan
The City’s growth continues to drive a variety of capital investments that will have a
significant impact on the future of the community. These are capital projects that will
either provide the community with benefits in the short-term or capital projects that will
provide supporting amenities for a growing community. All of these capital investments
are needed, however, there are competing priorities with limited funding that needs to be
considered in the development of the capital financial plan. The overall goal of this
financial exercise is to maintain good financial management.
From a high level perspective, the financial exercise will consider the following inputs:
construction costs, operating cost impact of the capital projects and asset management
costs for the replacement of existing infrastructure. For capital project costs, the financial
exercise will also examine the funding strategies of these projects as it relates to debt,
development charge funding and other financing sources such as casino “gaming”
revenues, naming rights and community fundraising. The study will also examine the
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 19
City’s debt capacity as it relates to the Annual Repayment Limit (ARL) to ensure that the
City is compliant with Provincial legislation. The capital project costs being considered
for this exercise are: City Centre; Highway 401 Road Crossing; Animal Shelter; Seaton
Community & Library Centre; Pickering Heritage & Community Centre; Civic Complex
Renovation and Replacement of Fire Hall #5. In addition, staff will also consider other
debt financed capital projects identfied in the capital forecast to ensure that the City is
either compliant with the ARL or develops a strategy to address this issue.
The end result of the financial exercise is to produce a financial “road map” with possible
options for Council to consider in the context of “Council required actions” and possible
increases to the tax levy for future years. One of the challenging aspects of this exercise
is that assumptions have to made regarding the “post pandemic environment” and its
impact on City operations.
Municipal Debt Limits and Annual Repayment Limit (ARL)
Managing the debt capacity or dollar borrowing amount is important to the City due to the
financial limitations imposed by the Province through the Annual Repayment Limit or
(ARL). (The Municipal Act regulation permits a maximum of 25 percent of net operating
revenues to be used to fund principal and interest charges for debt. A municipality can
only exceed the 25 percent limit through prior approval from the Local Planning Appeal
Tribunal).
For Pickering, the net operating revenues consists of the following major items:
•property tax revenue
•user fees & charges
•fines, penalties & interest on taxes
•license fees, permit fees & rents
•gaming & casino revenues
As stated above, every year the budget levy increases, the City’s annual repayment limit
increases that in-turn results in a higher debt borrowing capacity or dollar amount. The
City’s annual repayment limit for 2021, based on the prescribed calculation and using the
City’s 2019 Financial Information Return (FIR) was $23.447 million. The proposed 2021
budgeted annual debt payments (interest and principal) is $6.027 million and therefore,
the City had $17.45 million in unused debt payment capacity before hitting the 25 percent
cap.
As Members of Council are aware, the 2020 pandemic has resulted in a decrease in
revenues generated by user fees and charges, especially for the Community Services
Department. Therefore, a possibility exists that the City’s debt borrowing capacity could
decrease based on 2020 financial results for the fiscal year 2022. However, for the
following year (2023), you could also see a significant increase in debt borrowing
capacity with the introduction of casino revenues as part of the 25 percent revenue
calculation.
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 20
Please find below a historical comparison of the City’s annual debt cost (that includes
principal and interest) in relation to the ARL. The source of the data was the annual FIR,
Schedule 81 for each respective year. The 2020 financial information is currently not
available due to the fact the City is still processing its 2020 closing adjustments. As the
chart below indicates, the City has been operating slightly below the 5 percent level of its
debt limit.
Chart Four
City’s Debt Measured Against the ARL Limit
It is estimated that the 2021 year-end financial data should reflect an upward direction of
the slope of the line due to Council’s approval of the following two major debt financed
projects: Chestnut Hill Developments Recreation Complex Renovation and Seaton Fire
Hall.
Debt Payments and Debt Financing of Capital Projects
The 2021 Current Budget includes $5.2 million of taxpayer funded debt charges (interest
and principal), excluding the City Centre project. The taxpayer funded debt charges
represent 7.2 percent of the 2021 property taxes levied. In other words, for every dollar
collected - 7 cents is applied to debt charges.
A high level summary of the City’s debt, excluding the City Centre project is presented
below:
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2014 2015 2016 2017 2018 2019
Debt %ARL
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 21
Debt Summary Millions ($)
2020 Debt
External Debt Commitments $33.4
External DC Debt 8.7
Internal Loans 1.9
Total 2020 Commitments $44.0
Add: 2021 Debt Commitments
External Debt $11.4
New Internal Loans 1.6
Total Debt Commitments $57.0
The 2021 debt financed Capital Projects, are listed below.
External Debt and Internal Financing of Capital Projects
City of Pickering
2, 5, 10 and 20 Year Debt Financing
2021 Capital Budget
Capital Project Code Debt - 2 Years ($) Description
5321.2101 $2,175,000 Hwy 401 Road Crossing – Land
Acquisition – Phase 2
Total Two Year Debt $2,175,000
Capital Project Code Debt - 5 Years ($) Description
5731.2101 $200,000 CHDRC Lobby & Core Area
Renovations - Contingency
Total Five Year Debt $200,000
Capital Project Code Debt - 10 Years ($) Description
5700.2107 $247,500 Civic Complex Parking Garage Ramp
Replacement
Total Ten Year Debt $247,500
Capital Project Code Debt - 20 Years ($) Description
5719.2101 $11,391,900 Pickering Heritage Community Centre
-Construction
Total Twenty Year Debt $11,391,900
Total Debt Financed
Projects
$14,014,400
Borrowing or debt financing should not be viewed as a negative. The proper use of debt
is an essential component of prudent fiscal strategy. The use of debt promotes
intergenerational equity. By borrowing, Pickering can distribute the cost of the asset over
the lifetime of the asset.
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 22
2022 – 2025 Capital Forecasts
The City’s 2022 – 2025 Capital Forecast outlines the City’s current financial plan.
Provided below is a breakdown of the various funding sources related to the capital
forecast.
Draft 2021 Capital Budget and 2022-2025 Capital Forecast ($M)
2021
Budget
Amount
2022-2025
Planned
Amount Total
%
Total
Funding
Development Charges $25.0 $165.9 $190.9 42.6
Debenture Financing 14.0 109.8 123.8 27.6
Other 4.3 4.7 9.0 2.0
Reserve & Reserve Funds 25.4 73.4 98.8 22.0
Federal Gas Tax 3.6 14.8 18.4 4.1
Capital from Taxation .7 6.9 7.6 1.7
$73.0 $375.5 $448.5 100%
As shown above, the City is relying on a substantial level of development charge funding
and debt financing for the City’s future capital needs. The debt amount can change over
time with increasing contributions to reserves.
Attachments:
1.By-law to Confirm General Fees and Charges 2021
2.By-law to Provide for the Establishment of a Reserve Fund to be Known as the WSIB
Excess Indemnity Reserve Fund
3.By-law to Provide for the Establishment of a Reserve Fund to be Known as the 2021
COVID-19 Recovery Reserve Fund
4.Budget Presentation, March 4, 2021
5.Average Daily Cost of Municipal Services
Report FIN 05-21 March 22, 2021
Subject: 2021 Current and Capital Budget Page 23
Prepared By: Approved/Endorsed By:
Original Signed By: Original Signed By:
James Halsall Stan Karwowski
Manager, Budgets & Internal Audit Director, Finance & Treasurer
Recommended for the consideration
of Pickering City Council
Marisa Carpino, M.A.
Chief Administrative Officer
Original Signed By:
Attachment #1 to Report #FIN 05-21
The Corporation of the City of Pickering
By-law No. XXXX/21
Being a by-law to amend By-law No. 6191/03
to confirm General Municipal Fees
W hereas 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, By-law
7268/13, By-law 7339/14, By-law 7411/15, By-law 7478/16, By-law 7542/17, By-law
7605/18; By-law 7679/19 and By-law 7740-20;
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 22nd day of March, 2021.
__________________________________
David Ryan, Mayor
__________________________________
Susan Cassel, City Clerk
Attachment #2 to Report #FIN 05-21
The Corporation of the City of Pickering
By-law No. XXXX/21
Being a By-law to Provide for the Establishment
of a Reserve Fund to be Known as the WSIB
Excess Indemnity Reserve Fund.
Whereas under the Municipal Act, S.O., 2001 as amended, Section 417(1), the Council
of the City of Pickering may establish and maintain a reserve fund for any purpose for
which it has authority to expend funds; and
Whereas it is desirable for the City of Pickering to establish such a reserve fund for the
purpose of paying potential claims and other related costs arising out of extraordinary
WSIB claims such as multiple injuries arising from one incident, severe burns or
paraplegic or quadriplegic claims.
Now therefore the Council of the Corporation of the City of Pickering hereby enacts as
follows:
1.That the establishment of a reserve fund known as the WSIB Excess Indemnity
Reserve Fund is hereby authorized.
2.That WSIB Excess Indemnity Reserve Fund shall be used to pay potential claims
and other related costs arising out of extraordinary WSIB claims.
3.That the financial goal of this fund is to reach a balance $2.5 million, subject to
actuarial valuations of the City’s future WSIB liabilities.
4.That the Interest earned on the investment of fund balances shall form part of this
reserve fund.
5.That this By-law shall come into force on the date of its enactment.
By-law passed this 22nd day of March, 2021.
__________________________________
David Ryan, Mayor
__________________________________
Susan Cassel, City Clerk
Attachment #3 to Report #FIN 05-21
The Corporation of the City of Pickering
By-law No. XXXX/21
Being a By-law to Provide for the Establishment
of a Reserve Fund to be Known as the 2021
COVID-19 Recovery Reserve Fund.
Whereas under the Municipal Act, S.O., 2001 as amended, Section 417(1), the Council
of the City of Pickering may establish and maintain a reserve fund for any purpose for
which it has authority to expend funds; and
Whereas it is desirable for the City of Pickering to establish such a reserve fund for the
purpose of capturing 2021 COVID-19 Recovery Grant Funding received from the
provincial government to be used for 2021 and/or future COVID-19 operating costs and
pressures.
Now therefore the Council of the Corporation of the City of Pickering hereby enacts as
follows:
1.That the establishment of a reserve fund known as the 2021 COVID-19 Recovery
Reserve Fund is hereby authorized.
2.That the 2021 COVID-19 Recovery Reserve Fund shall consist of grant monies
received from the Province from the COVID-19 Recovery Funding for Municipalities
program.
3.That the 2021 COVID-19 Recovery Reserve Fund shall be used to address the
City’s 2021 and/or future COVID-19 operating costs and pressures.
3.That the Treasurer has the discretion to draw from this fund to maintain the City’s
financial and business plans due to direct and indirect affects of COVID-19.
4.That the Interest earned on the investment of fund balances shall form part of this
reserve fund.
5.That this By-law shall come into force on the date of its enactment.
By-law passed this 22nd day of March, 2021.
__________________________________
David Ryan, Mayor
__________________________________
Susan Cassel, City Clerk
1
pickering.ca
Executive (Budget) Committee
March 4, 2021
2021 Draft Current & Capital Budgets
pickering.ca
Introduction
Page 2
Two Themes:
A Budget Presentation
Budget Assumption
Financial Snapshot
Budget Impact on Residential Taxpayer
Budget Impact on the Commercial/Industrial Taxpayer
Capital Budget
Budget Report and Housekeeping Items
B Pickering’s Social Conscience – Financial Measure
Attachment #4 to Report #FIN 05-21
2
pickering.ca
2021 Budget Assumption
Page 3
• COVID Restrictions remain for Q1, Q2, Q3.
• Vaccine (that is effective against variants) is distributed
to large percentage of population by September.
• City moves to the “New Normal” transitioning in Q4
Budget reflects traditional City Events:
Remembrance Day Service
Tree Lighting
Santa Claus Parade
New Year’s Eve Countdown
pickering.ca
What are the Financial Implications if the Budget
Assumption is “Off Target”?
Page 4Rate Stabilization Reserve is the City’s
Financial Safety Net.
3
pickering.ca
2021 Recommended Current Budget
2021 Recommended Capital Budget
$73,041,800
Net
$70,841,695
Gross
$121,617,800
2021 Budget Financial Snapshot
Page 5
pickering.ca
Page 6
4
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2021
Budget
Snapshot
Page 5
2020 Increase 2021 Draft
Budget (Decrease)BudgetATotal City Revenues ($44,173,039)($2,831,265)($47,004,304)-4.05%B Total City Expenditures 115,501,660 6,116,140 121,617,800 8.76%C $71,328,621 $3,284,875 $74,613,495 4.70%
One-Time FundingDRate Stabilization Reserve ($1,500,000)0 ($1,500,000)0.00%E Provincial Restart Funding (Phase 1 & 2)(2,802,100)(2,802,100)-4.01%F ($1,500,000)($2,802,100)($4,302,100)-4.01%
G Base Budget (Line C Minus F)$69,828,621 $482,775 $70,311,395 0.69%
Growth Related IncreasesH3 Fire Fighters For New Seaton Fire Hall $283,000 $283,000 0.41%
Service Level IncreasesIWaterfront By-law Enforcement 51,000 51,000 0.07%J Investment to Meet Accessibility Compliance 121,300 121,300 0.17%K Community Investment Fund 75,000 75,000 0.11%L 530,300 530,300 0.76%M $1,013,075 $70,841,695 1.45%
Net City (Line A Minus B)
Sub Total (Lines D to E)
Sub Total (Lines H to K)
Budget Levy Increase (Line G + L)2021 I mpact on Resi de nti al Tax Bill 0.44%
Page 7
pickering.ca
Assessment Growth
Page 8
$2,037,000
5
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Fire Services Overtime & Seaton Staffing Strategy
Page 9
Budget
2017 2018 2019 2020 2021 2022 2023
Council Approved Hiring 2223 3 44
Cumulative 46912 1620
Projected
24 Hour Shifts
Start
Jan 1, 2015
24 Hour Shifts
Start
Jan 1, 2015
pickering.ca
2021 Other Key Current Budget Highlights
Page 10
$50,000- Mechanical harvesting of Eurasian Water-Milfoil (weeds in Frenchman’s Bay)
$25,000 – Concrete gaming structures for 3 City parks
$85,000 – Diversity & Inclusion consultant to facilitate the completion of a Diversity & Inclusion
strategy
Target Hiring Date Q2 - For a full time coordinator, Diversity & Inclusion Position
$746,000 - Increase in Contribution to reserves & reserve funds
6
Budget Levy Increases 2001 to 2021
Page 11
Average
Property Tax
Increase
Term Per Term
2006 to 2009 6.0%
2010 to 2014 3.4%
2015 to 2018 3.2%
Current 2.3%
pickering.ca
2021 Budget Levy Increase Comparison with
Our Durham Lakeshore Neighbours
Page 12
City/Town
Share
(%)
Oshawa 1.41
Pickering 1.45
Whitby 1.61
Clarington 2.04
Ajax 3.07
Total
Residential
Tax (%)
NA
0.55
0.67
0.95
0.
7
pickering.ca
How is the Residential Tax Bill Allocated?
Pickering 30.60%
Durham Region 55.03%
School Boards 14.37%
Residential Tax Bill Pickering Share
Page 13
pickering.ca
Budget Levy Impact on Total
Residential Property Taxes
Page 14
City
Share
Proposed 2021 Levy Inc. 1.45%
Percentage of Allocation 30.60%
Increase on Total Tax Bill 0.44%
8
pickering.ca
Budget Levy Impact on Total
Residential Property Taxes
Page 15
Residential Assessment 100,000$ 530,000$ 612,000$ 900,000$
Increase over Last Year 4.72$ 25.02$ 28.89$ 42.48$
Financial Impact of Budget Levy Increase
The residential assessment value is based on a
market valuation date of January 1, 2016.
pickering.ca
Impact of Delayed Reassessment on
Residential Property Taxes
Page 16
For 2021, the reassessment is being
delayed to 2022. Therefore, there should
be no financial impact due to
reassessment.
The highlighted line should be ZERO for
2021.
Last Year
9
pickering.ca
Pickering’s 2021 Budget Levy Increase
On The Total Residential Tax Bill
1.91%
Page 17
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Page 18
10
pickering.ca
Budgetary Impact on Commercial/Industrial Property Owner
In November 5, 2020 Budget Statement, the Provincial Government announces significant
reductions in the Business Education Tax Rate.
The tax reductions are significant because the “Education Share” is the largest component of the
property taxes.
2020 2021
Education Education Percentage
Tax Rate Tax Rate Decrease
Commercial 0.0098 0.0088 10.20%
Industrial 0.0125 0.0088 29.60%
Page 19
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Budgetary Impact on Commercial/Industrial Property Owner
Page 20
Every commercial & industrial property owner should see a
reduction in their 2021 property taxes.
Reduction is due to the Provincial initiative to reduce the education taxes.
Est.
2020 2021
Total Total
Property Property Percentage
Example Taxes Taxes Savings Change
A Stand Alone Fast Food 42,179$ 40,779$ 1,399$ 3.31%
B Strip Plaza 84,496$ 81,695$ 2,800$ 3.31%
C Industrial Building 223,388$ 199,063$ 24,325$ 10.89%
11
pickering.ca
Non Residential Assessment as a % of the
Total Property Assessment Base
Residential $1.00 = Commercial $1.45
Residential $1.00 = Industrial $2.26
Page 21
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Pickering’s Debt Picture
*The above debt amount excludes City Centre.Page 22
Original
Borrowed
Amount ($)
Outstanding
Principal
Balance
A Total "Issued" Debt Commitments-Dec. 31, 2020 45,528,000$ 30,575,692$
Add:
B Debt Funded Projects from Prior Year's Budgets 13,482,180
C 2021 Debt Funded Projects 12,999,400
D Estimated City Debt Commitments - December 31, 2021 57,057,272$ *
12
pickering.ca
Pickering’s Debt & Debt Capacity
The Province through O. Reg 403/02 establishes the municipality’s debt limit.
Using the 2019, Council approved financial statements, the Province has calculated, that the
Upper City’s debt repayment limit cannot exceed $23.4 million.
Interest Rate 4.00% 4.50% 5.00%
Term 20 Year 20 Year 20 Year
Upper Borrowing Capacity Limit $317.00 $305.00 $292.00
Less:
2021 Est. Debt Commitments 57.06 57.06 57.06
Available Debt Capacity $259.94 $247.94 $234.94
Millions
The Debt Capacity changes every year.Page 24
pickering.ca
5 Year Financial Strategic Plan
Cost Inputs Revenue Inputs
Options
Page 25
13
pickering.ca
Capital Budget Summary
Major Capital Projects of Interest:
• Pickering Heritage & Community Centre
(Combined Museum, Community Centre and Library Archives)
• Waterfront Trail Land Acquisition
• Whitevale Road & Drainage Improvements
• Frenchman’s Bay West Park
(Pedestrian Walkway & Washroom Facility)
Page 26
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City of Pickering
2021 Capital Budget by Financing Source
Page 27
14
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Roads & Bridges Program 2018 to 2021
Page 28FGT – Federal Gas Tax
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Parks Program 2018 to 2021
Page 29
15
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User Fees
Goal
To charge comparable fees where there are other comparable municipal
comparisons. User Fees are reviewed every year as part of the budget
process.
The User Fee schedule provides a summary of the City fees including all
proposed changes.`
Deferral of Sports Field user permit fees from seasonal to hourly.
User Fees proposed to be set at November 2019 rates.
Community & sports groups will save approximately $170,000
per year.
Page 30
pickering.ca
.
2021 Budget Communication Statistics
Page 31
• Capital budget posted on the website on Feb 5th.
• Current budget posted on the website on Feb 22nd.
• Community Page ad ran four times starting February 4
th.
Social Media
Posted to corporate Facebook, Twitter and Instagram
Available @CityofPickering
Facebook
13,136 people reached
Twitter
3,715 impressions
Instagram
1,666 people reached
16
pickering.ca
2021 Budget Report (Housekeeping)
Recommendations will include the following:
1. Council to confirm that the budget was developed using the cash basis of
accounting as per Ontario Regulation 284/09.
2. Any committee decisions to be re-allocated to their proper cost centre for
accounting and expenditure control purposes.
3. Grant housekeeping recommendations – change application deadline to
October 29th.
4. Increase seniors grant amount from $375 to $450.
5. The budget report will seek Council’s approval to establish an Excess
Indemnity Reserve Fund.
Page 32
pickering.ca
.
Measuring Pickering’s Social Conscience
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Residential Property Tax Deferral Program
Program approved by Council on January 25, 2021 (FIN 02-21).
Program will defer property tax payments that were due at the end of February
and April to the end of May. (3 Month deferral)
To qualify for the program, your property taxes had to be in good standing from
February 29, 2020 or up-to-date by December 31, 2020.
Provide verifiable documentation to demonstrate financial hardship related directly
to the COVID-19 pandemic through prolonged suspension of pay, reduction in pay,
or loss of employment
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Update on Residential Property Tax Deferral Program
Communication Strategy
Advertised in the Community Page (February 11 & 18)
Promoted in Interim Property Tax Brochure (approximately 16,000 copies)
Promoted on Social Media using Facebook, Twitter and Instagram
Social Media Statistics
Facebook - 10,029 reached (the number of individuals who saw the ad)
Instagram – 1,503 individuals reached
Twitter – 838 impressions
The Pickering News Advertiser ran a story on the Program in early February
Next Step:
Promoted through mailing of Arrears Notices in March
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Low Income Seniors/Persons with Disabilities
Property Tax Grant Statistics
The City had 244 participants in the program in 2020 Page 35
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.
Social Conscience – A Financial Measure
Pickering’s financial “giving”
is equivalent to 0.58% levy
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Attachment #5 to Report #FIN 05-21
2021 Draft Budget
Average Daily Cost of
Municipal Services
Average Daily Cost of Municipal Services: $5.55*
22.82%
Fire Services
$1.27 17.86%
Roads
$0.99 7.53%
Library
$0.42 7.72%
Parks &
Property
$0.43
6.76%
Debt Services
$0.37 5.77%
Community
& Rec.
Centres
$0.32 4.99%
Corporate
Services
$0.28 4.97%
Culture &
Recreation -
Other
$0.28
2.74%
City
Development
$0.15 1.54%
Mayor,
Council &
Council
Support
$0.09 1.23%
Streetlights
$0.07 1.14%
Recreation
Programs
$0.06
0.68%
Animal
Services
$0.04 0.64%
Customer
Care
$0.04 1.10%
Museum
$0.06 0.51%
Crossing
Guards
$0.03
1.63% Arenas $0.09 0.33%
Community
Grants
$0.02 0.91%
By-law
Services
$0.05 9.12% All
Other Areas
$0.51
* Calculated based on the average assesed value of $612,000 for a residential property.