HomeMy WebLinkAboutCS 16-07
CitJl c~
REPORT TO
COUNCIL
Report Number: CS 16-07
Date: April 2, 2007
From:
Gillis A. Paterson
Director, Corporate Services & Treasurer
014
Subject:
2007 Current and Capital Budgets
Recommendation:
1. That Report CS 16-07 of the Director, Corporate Services & Treasurer be
approved;
2.
a)
That the 2007 Current (Operating) Budget expenditure for salaries &
wages (Account 1100) in the amount of $26,645,519 be approved;
b) That the 2007 Current (Operating) Budget expenditure for employer
contributions (Account 1400) in the amount of $6,324,567 be approved;
c) That the 2007 Gross Current (Operating) Budget for City purposes in the
amount of $28,182,201 (which excludes employer contributions, salaries
and wages) and includes capital expenditures from current revenues in
the amount of $2,283,556; less estimated current operating revenues of
$21,838,833 and transfers from the following reserves: Rate Stabilization
Reserve of $1,659,000, which results in a net overall levy for City
Operations of $37,654,454 which is approximately a 8.79 percent
increase over 2006, be approved;
3. That the Director, Corporate Services & Treasurer present the 2007 final tax
rates for adoption by Council when further information regarding 2007 Non
Residential Education Tax Rates from the Province of Ontario and Region of
Durham is available;
4.
a)
That the 2007 Capital Budget for the City of Pickering with a Gross
Expenditure of $9,705,306 be adopted as presented;
b) That the following capital financing sources be approved as presented in
the 2007 Capital Budget:
Transfer from Current Fund to Capital Fund
$2,283,556
Transfers from Reserves:
- Rep. of Capital Equipment (7000)
- Don Beer Arena (7033)
51 ,400
70,000
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
Page 2
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- Move Ontario Reserve (7043)
- Animal Services Reserve (7044)
525,000
25,000
Transfers from Reserve Funds
- Development Charges
- Community Facilities (7700)
- Parkland Development (7502)
- Federal Gas Tax Funds (7505)
- City Share Dev. Charges Projects (7022)
- Third Party Contribution (7501)
1,013,675
117,000
580,000
954,000
377,725
50,000
Debt - 5 yr
Debt - 1 0 yr
Debt - 20 yr
Internal Loans
Internal Loans - 5 yr.
360,000
1,611,700
725,000
573,000
230,000
Federal Grants (1610)
Donations (1592)
15,750
142,500
$9.705.306
TOTAL
c) That total external debt financing of $2,696,700 for the projects identified
in the 2007 Capital Budget, and as indicated in this report, in the amount
of $360,000 for a period not to exceed 5 years and; $ 1,611,700 for a
period not to exceed 10 years and $725,000 for a period not to exceed
20 years be approved;
d) That projects identified in the 2007 Capital Budget as being financed
through the issuance of debt be subject to additional, specific approval by
Council of the expenditure and the financing before proceeding;
e) That internal loans or dealer financing as indicated in this budget in the
amount of $803,000 may be undertaken at the discretion of the Director,
Corporate Services & Treasurer be approved;
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, Corporate Services &
Treasurer, be used to apply towards outstanding loan or debt charges or
to reduce debt, internal loans or any other amount to be financed;
g) That all Capital expenditures or portions thereof, approved in the 2007
and future Capital Budgets to be financed through the issuance of debt,
may, at the discretion of the Director, Corporate Services & Treasurer, be
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
Page 3
-(l16
financed through internal loans, dealer financing, current funds or a
combination thereof;
5. That the Director, Corporate Services & Treasurer be authorized to transfer:
a) Any surplus current operating funds at any year-end in excess of
$125,000 to the Rate Stabilization Reserve;
b) Any funds necessary from the Rate Stabilization Reserve in order to
ensure that in any year the Current Budget results in a year end surplus of
no less than $125,000;
c) Any revenue resulting from the disposition of land or other assets in
excess of the $50,000 included in this budget to the Reserve for
Replacement of Capital Equipment;
6.
a)
That the Director, Corporate Services & Treasurer be authorized to make
any changes or undertake any actions necessary, in order to ensure that
the budget plan including any re-allocation of 2007 current operating
expenditures and revenues resulting from any reorganization and
including any adjustment in taxes or tax rates due to Provincial and
Regional tax policy changes;
b) That any new additional Provincial and Federal Government funding
announcements for municipalities in the form of grants or new taxing
authority/powers be applied to future Current and Capital budgets;
c) That the 2007 Current Operating Budgets for Accounts 1100 (Salaries &
Wages) and 1400 (Employer Contributions) be restated for the 2007
Budget once contract negotiations have been completed;
7. That the Director, Corporate Services & Treasurer be authorized at his discretion
to close any prior year's capital expenditure accounts, and to first apply any
excess funding to any overexpenditure in accounts utilizing the same source of
funds and to secondly transfer any remaining excess funding back to the original
source of the funds;
8. That Council enact the attached General Municipal Fees and Charges By-law
which provides for the fees and charges that are incorporated into the 2007
Current Budget;
9. That Council authorize and approve the establishment of the Animal Shelter
Reserve Fund and that the attached By-law be read three times and passed;
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
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1 u. I nat the Director, Corporate Services & Treasurer be authorized to adjust, where
appropriate the per kilometre travel expense re-imbursement rate at any time in
order to maintain the appropriate level of re-imbursement with any increase in
cost being met from under expenditures in other accounts;
11. That Council adopt the following Budget Guidelines for the development and
presentation of the 2008 budget;
a) That there be no new full or part-time positions, or increase in part-time
hours unless these additional costs are offset by additional program
revenues, reduced expenditures or is mandated by Federal or Provincial
legislation;
b) That debt financing for capital projects only be permitted either for health
and safety reasons or to participate in financial cost sharing programs;
c) That there may be no new, enhanced or expanded current or capital
budget programs;
d) That the 2008 budget be developed based on a reduced reliance on one-
time funds and reserves;
12. That the Director, Corporate Services & Treasurer be authorized to undertake
any assessment appeals necessary to protect the assessment base of the City
and,
13. That the appropriate staff of the City of Pickering be given authority to give effect
thereto.
Executive Summary:
Not applicable
Financial Implications: At the Budget Committee meetings on March 23, 2007, the
following changes were made to the draft current budget:
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
Page 5
Current Budqet Additions
G18
General Government Section Grants
TRCA Joint Funded Projects
$10,000
Participation in CNE (Account 2718.2482)
5,000
Current Budqet Reductions
Reduction in Contingency
Frenchman's Bay Festival (Account 2712.2394)
(5,000)
(10,000)
$0
Total Current Budget Changes
These adjustments have been reflected in the Revised 2007 Current and Capital
Budgets submitted for Council approval.
The 2007 Current (Operating) & Capital Budgets, if adopted as presented, will result in
a tax levy increase of 8.79 percent over last year's average property tax bill
(excluding any Provincial tax policy changes). On a single detached home assessed at
$280,000, the total tax levy proposed increase equates to $1.56 per week. The
proposed increase is estimated to be approximately 2.24 percent on the Total
Residential Tax Bill.
Sustainability Implications: The 2007 Current and Capital Budgets contain a
number of projects and expenditures that will contribute to environmental and
community sustainability. In addition, this budget continues Council desire to maintain
financial sustainability over the longer term
Background: The Recommendations put forth are those necessary to adopt the
2007 Current (Operating) and Capital Budgets of the City of Pickering and to provide
direction regarding the 2008 Budgets.
This year's budget review exercise by the CAO and senior management was one of the
most difficult to date given the City's financial position. In the Current Operating Budget
every line item of every Section, Division and Department was reviewed, debated, and
increases justified in an attempt to reduce discretionary expenditures to the lowest
possible. This measure was adopted in order to assist in offsetting mandatory or non-
discretionary increases such as inflation, utilities, salaries and benefits. Low
assessment growth and fixed mandatory costs translate into budgetary increases which
we recognize are not popular with the general public.
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
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City's Budqetary Increase Summary
Page 6
Net City Operations
3.98%
Less: Return of Cap. From Taxes
Easement Settlement Reserve
$ 386,000
1,280,000
4.81
Proposed Budgetary Increase
8.79%
As shown above, one time funding used to reduce the 2006 budgetary increase has
translated into corresponding increase of 4.81 percent for 2007.
The 3.98 percent net City operating increase is partially attributable to higher debt costs
of 1.14 percent which leaves a residual balance of 2.84 percent which is slightly higher
than the rate of inflation but also includes 2007 new positions and annualization of 2006
new position costs.
Reserves and Reserve Funds
The 2007 Budgets contain continuing reliance upon draws from Reserves and Reserve
Funds especially for the Parkland Reserve Fund (Account 7502) as reflected in the
graph below.
$5.250,000
~
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$4,250,000
$3,250,000
$2,250,000
$1.250,000
$250,000
1999
2000
2001
2002
2003
2004
2005
2006
2007
Year
The 2006 projected year-end uncommitted balance for the Parkland Reserve Fund is
$1.4 million. However, the 2007 capital budget will use approximately $580,000 to fund
various capital projects such as playground equipment and therefore, the estimated
2007 yearend position for this account would be approximately $900,000. (In 1999 the
Parkland Reserve Fund's balance was $4.25 million).
The External Subdivision portion of the 2007 Capital Budget is funded primarily from
two sources: Developer contributions and a City Share Developer Contributions
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
Page 7
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(Reserve Account 7022). The City's cost for its share of 2007 capital projects is
$377,725. The preliminary 2008 and 2009 capital forecast requirement for the City to
fund approximately $11.5 million in City share DC projects. These large future dollar
commitments and the City's ability to fund these costs most likely means the City will
have to debt finance its contribution of approximately $6.0 million which in-turn will add
to the financial pressures on the organization.
The City is using approximately $3.76 million in reserve and reserve funds to finance
2007 capital expenditures and $1.6 million to reduce the current budget tax levy. As
indicated in the annual reports filed by the Treasurer, the majority of the City's reserve
and reserve funds can be classified as non-discretionary. In other words, there is either
a specific purpose, intent or condition on the use of the funds. The projected estimated
draft, December 31, 2006 non-discretionary balance is $44.2 million ($5.8 million
committed) with the Development Charges reserve fund having a projected balance of
$22.75 million. Other non-discretionary reserve or reserve fund balances include Third
Party Subdivision Agreements, Parkland Reserve Fund, Worker's Compensation, OPG
Appeal and Self Insurance. The projected December 31, 2006 discretionary reserve
and reserve fund balance is estimated to be $4.25 million. The Rate Stabilization
Reserve is the largest component of the discretionary funds of which $1.6 million is
being used this year to reduce the 2007 tax levy. In 1998 the balance of these same
funds totaled approximately $13.6 million.
Debt and Debt Charqes
The current level of debt, and the resultant annual debt charges, is at a relatively high
level, especially considering this means of financing was not used before 1998. The
2007 debt of $2,696,700 plus $803,000 in internal loans will translate into additional
debt charges and will necessitate an approximate 1 .25 percent increase in the 2008
Current (Operating) Budget.
For 2007, the City is planning on issuing $3,499,700 of internal and external debt for
various projects listed in Table One.
Table One
External Debt and Internal Financing of Capital Proiects
City of Pickering
5 & 10 Year Debt Financing
2007 Capital Budget
Capital Project Code Debt- 5 Description
Years ($)
07-2320-001-04 260,000 Five ton dump truck
07-2731-005-05 100,000 New roof for tennis court area
Total Five Year Debt $360,000
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
Page 8
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-c;apital Project Code Debt -10 Description
Years ($)
07 -2320-009-13 640,000 Additional funds for Bulmer Bridqe
07 -2320-008-07 321,700 Liverpool road reconstruction - Wharf St.
to Annland St.
07 -2320-008-14 250,000 Additional funding for Old Brock Road
reconstruction.
07-2718-001-11 200,000 Sunbird Trail park development.
07-2321-002-10 200,000 External Subdivision project (DH-24),
sidewalks & streetlights constructed by the
CP rail underpass.
Total Ten Year Debt $1,611,700
City of Pickering
20 Year Debt Financing
2007 Capital Budaet
Capital Project Code Debt - 20 Description
Years ($)
07 -2320-008-16 725,000 Sheppard Ave - Altona Rd to Rosebank
Rd., slope retention system.
Total $725,000
City of Pickering
Internal Loan/Dealer Financing
2007 Capital Budget
Capital Project Code Internal Description
Loan/
Dealer
Financing
($)
07 -2240-002-01 150,000 Five year financing term - Furniture &
equipment for Station NO.5 addition
07-2320-001-03 80,000 Five year financing term - Vehicle - 1 ton
dump truck with crane.
07-2718-004-01 100,000 Two utility tractors - Treasurer to determine
loan term.
07-2718-001-01 175,000 Repair & resurface Bev. Morgan running
track. Treasurer to determine loan term.
07-2718-001-13 100,000 Repair & replace interlock brick - Phase 1
Esplanade Park. Treasurer to determine
loan term.
07 -2124-005-01 38,000 Phase 2 - Pattern concrete in front
entrance area of civic complex (interlocking
stone replacement). Treasurer to
determine loan term I
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
Page 9
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07-2715-005-02 50,000 Replacement of concrete floor on pad 2
(Don Beer arena - design only). Treasurer
to determine loan term.
07-2719-005-05 110,000 Replace parking lot - West Shore
Community Centre. Treasurer to determine
loan term.
Total $803,000
2007 Budqet Based on Estimates
As in previous years, the City's budget includes a component that is based on
estimates or best known information when the budget is developed. The 2007
operating budget for building permit fees has been reduced to reflect 2006 actual
revenues and anticipated activity for 2008. Presented below is the summary of activity
for building permit fees.
2007 Draft Current BudQet BuildinQ Permit Revenue ($)
734,460
599,324
800,000
(150,000)
650,000
While the 2007 budget has been reduced, there is a possibility that building
permit revenue may continue to decrease. Unfortunately, the decrease in
building permit revenue is an indicator of future lower assessment growth for
2008 and 2009.
As stated in last year's report, the 2006 budget for education PIL revenues is an
estimate due to the fact the 2006 education rates for commercial and industrial
assessment will not be known until spring of this year. Members of Council may recall
that the City retains the education portion of the property taxes for "pay-in-lieu"
properties.
T ax Rates
As has been the case for the last few years, the 2007 Property Tax Rates and Levy By-
law will be presented at a later date when more information is available from the
Province regarding the education tax rates for the large industrial tax class.
Several years ago, the City was able to absorb on a short-term basis the loss of
revenue due to Provincial and Regional Governments taxation policy changes.
Unfortunately, this year, the City has limited financial flexibility and is therefore unable
to offset any anticipated revenue losses due to higher level government decisions
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
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Page 10
regarding tax rates and tax policy decisions. With the City being in a limited
assessment growth scenario, our ability to absorb these revenue losses through
increased assessment does not exist. Therefore, Recommendation 6 a) will allow
the Treasurer to make any adjustments to the 2007 proposed Total Tax Levy to reflect
senior government tax policy decisions.
Capital Forecast
The capital forecast (2008 and 2009) projects a total expenditure in the amount of
$51.6 million. The high capital forecast is a result of projects and capital expenditures
being deferred to future years due to affordability limitations. As Members of Council
are aware, the City cannot afford these types of expenditures during the next two years.
Over the next few months the capital forecast budget will be reviewed from the
perspective of affordability, maintenance and safety. A revised capital budget forecast
will be presented to Council later this year.
2007 User Fees & Charqes Schedule
Every year, the City increases its user fees mainly for various recreational and cultural
programs to partially reflect the cost of delivering the various programs. Council passed
Resolution #149/03 confirming the City's existing user fees through by-law. This By-law
was updated as part of the 2006 budget process. In order to have the new user fees
become effective, Council will be required to approve the 2007 User Fee By-law, (as
required under Section 391 of the Municipal Act) which is included in this report.
The Municipal Act, as amended through through Bill 130, no longer requires
municipalities to maintain a formal list of fees and charges. Staff, however, have
decided to maintain the fee list due to the fact the fee list facilitates financial control and
auditing by ensuring that the correct fees are charged and provides Council and the
general public an opportunity to review the fees and provide any comment or input. In
addition, having the fee list approved via the budget process allows general public
comment and provides for a more open access and transparent government process.
2007 Budqet Summary Paqes
Attachment 1 includes the budget summary pages.
Animal Shelter Reserve Fund
In February, 2007 the City received a cheque from the Town of Whitby in the amount of
$144,433 as the City's share of the proceeds resulting from the dissolution and
disposition of the assets of Pickering, Ajax, Whitby Animal Services (PAW). This
cheque was deposited in an account for an Animal Shelter. Recommendation 9
provides for the establishment of an Animal Shelter Reserve Fund which will clearly
differentiate those funds from all others received by the City and provide that interest
earned on the funds shall be credited to this Reserve Fund. The initial deposit will be
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
Page 11
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the PAW proceeds plus approximately $1,000 raised as donations from a "Dogs in the
Park" event held in 2006.
Multi Year Financial Strateqic Plan
At the March 23rd, Executive Committee meeting, staff presented the City's long term
financial plan in two components: (Phase 1) 2007 to 2011 and (Phase 2) 2011 to 2014.
The 2007 to 2011 financial plan projects a steady decrease in the levy increase based
on various assumptions. (Attachment 3 - slide seven outlines these assumptions).
These assumptions are key to the success of the financial projection.
Every year, the Phase 1 projection will be updated to reflect current information which
in-turn may change budgetary assumptions such as utility costs and assessment
growth. The City's budgeted personnel expenditures represents 57.9 percent of the
City's total expenditures. Future negotiated settlements and industry trends can have a
significant impact on the City's financial projections both positive and negative.
Phase 2 (2011 to 2014) financial projection provides a longer term approach or outlook.
Based on known facts, the long term outlook indicates a "leveling off" or a stable period
of budgetary increases. As stated at the presentation, the risk or uncertainty factor
increases over time.
Assessment Analvsis of Lands
At the March 23rd, 2007 Executive Council meeting, information was provided regarding
land sales in the rural north east area of the City. The reported land sales transaction
appears to be substantially higher than the assessed value of the property. Staff have
discussed this issue with its assessment consultant and lawyer. They have advised the
City to conduct an assessment analysis of these properties and work with the
Municipal Property Assessment Corporation or MPAC on this issue. The consultant
will use recent land sales transactions and review land use as part of their analysis.
Working with MPAC could be beneficial due to the fact, increased land values could
be reflected in the returned (property assessment) roll for 2008 taxation year. In our
discussion with the consultant we have asked them to tentatively complete the work by
the end of this summer so that there is sufficient time to work with MPAC on updating
the 2008 returned assessment (property tax) roll. If MPAC is unwilling to make the
changes, the City would then file assessment appeals in 2008. As a first step, the
property analysis will focus primarily on Ontario Government lands and with time
permitting - Federal Government lands.
Report CS 16-07
April 2, 2007
Subject: 2007 Current and Capital Budgets
Page 12
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Attachments:
1. 2007 Financial OveNiew, February 8, 2007
2. By-law to Confirm General Fees and Charges, 2007
3. Budget Slide Presentation, March 23, 2007
4. By-law to Provide for the Establishment of an Animal Shelter Reserve Fund
Prepared By:
Prepared I Approved I Endorsed By:
S~Ski c2-
Manager, Finance & Taxation
~~...~..,..~._/.:']
.<...- .~.~~~ ~=-"'. -:'"'--;:_...
Gillis A. Paterson
Director, Corporate Services & Treasurer
GAP:vw
Attachments
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickering ncil
OIl. ;If'
ATTACHMENT#-L. TO REPORT#~''''07
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2007
Financial Overview
February 8, 2007
Deer Creek Golf & Country Club
Introduction
Message Unchanged from Prior Years
Current budget pressures same as other municipalities.
City is in a "Limited" (Assessment) growth situation. (In fill
only).
Increasing pressure on capital budget as infrastructure
ages. However, adding debt puts upward pressure on
operating costs.
Financial flexibility is at a minimum.
City's financial sustainability has to be addressed
during this term of Council.
2
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2007 Financial Overview
The purpose of this briefing is to provide:
1. Review of 2006 Budget tax levy increase
2. Current City Financial Situation
3. 2007 Budget Guidelines
4. Preliminary Draft 2007 Financial Position
Our goal is financial sustainability for the City.
3
2006 City AQProved Budgm
Budgetary Increase before
One Time Funds
Less:
Return of Cap. From Taxes
Rate Stab. Draw Res.
Easement Settle Agree Res.
14.99%
$386,000
1,320,000
1,280,113
9.20
Council Approved Levy 5.79%
The City used $2.98 million to reduce the 2006 tax levy
which has to be replaced in 2007.
4
2
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Benefits & Pitfalls In the Use of One-
Time Funds
Scenario A
Scenario B (Year 1 Levy
Decreased bv One-Time Funds)
$10,000;000
SS,coo,aoo
$6.000,000
S4COO,OOD j
$2,000,000
'0
Year 1
Year 2
Year 1 Year 2
IOLevyl
iOLevyl
Under Scenario A, Year 2 dollar
increase is $2.0 M.
The Year 2 percentage increase is
25.0%.
$3,250,000
$2,750,000
$2,250,000
$1,750,000
$1,250,000
$750,000
Under Scenario S, Year 2 dollar
increase is $4.0 M.
The Year 2 percentage increase is
66.7%.
5
A Different View of the Use of One-
Time Funds
These tvio
fundin~ .67M)
uree re not
available'in
I
2006
2007
[0 Rate Stablization . Easement Settlement Res. Q] Prior Year's Capital
The City used $3.0 M in one-time funds to reduce the 2006 tax levy.
The 2007 budget challenge is - how do you replace $1.67 M of one-time funds?
6
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April 2005 Budget Forecast for 2007
At the April 7th, 2005 Budget Committee meetings, staff presented the
following information to Council.
2005
Draft
Budget
{OOO's)
Total City Operations $
Less: One Time Funding
City Levy
35,700
(1,000)
34,700
City Levy (%)
6.7%
Final Levy
Additional 1
One Time
Funds
5.500/0
2006
Proforma
Budget
(OOO's)
$
36,100 $
(1,000)
35,100
2007
Proforma
Budget
(OOO's)
37,700
(1,000)
36.700
8.0 - 12.0%,
7
Feb 2006 Forecast for 2007 Draft
Budget
Feb 27/06 - Mqmt. Forum
UnControllable
Salaries & Benefits
Annualization of 2006 New Positions
General Inflation
Debt Charges
Reduction in Assessment Grow1h
Sub Total
Additional 1
One Time
Funds
5.790/0
Reduction in Use of One-Time Funds or Sources
Easement Settlement Reserve
Draw from Rate Stab. Res.
PriorYrs.Capital
Sub Total
Total Starting Financial Position
2007 Budget
The above financial estimate excludes:
Any new positions for 2007.
New programs or enhanced levels of service.
3.50%
0.78%
1.00%
2.25%
.1..00%
8.53%
2.99%
.1....J.3.%
7.32%
1?85~:',!.
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Reserves & Reserve Funds Summary
(Proi. Sal Dec.31, 2006)
Non
Discretionarv Discretionary Total
Reserve Funds $23,125,621 $1,380,169 $24,505,790
Reserves 6.650.253 2,380.905 9,031.158
Total $29,775,874 $3,761,074 $33,536.948
The draft 2007 budget is already using $1.5 million of discretionary
funding.
9
Discretionary Reserves & Reserve Funds
1 999 - 2006
12
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8
6
4
2
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City of Pickering
Annual Debt Charqes 2001 to 2015
$ $7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
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1___ Principal & Interest -- Forecast I
11
New Residential Units Constructed in the GTA - 2005
Total GTA 35609
Pickering 178
Toronto 35''10
12
6
Building Permit Trends
$1,400,000
f1
$urplus
$1,100,000
$800,000
$500,000
2003 2004 2005 2006 2007
1-0- Budget -I:r- Actual I
Building Permit revenue is an indicator of future assessment growth.
Assessment Growth Timinq Model
For residential homes, building permits and
construction are usually completed in one year.
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14
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City of Pickerinq Assessment Growth
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2000 2001 2002 2003 2004 2005 2006 2007
10 Pickering. Town "A" I
15
Another Perspective of Tax Levy
Increases
Fixed Other
Exp. Est. Assessment Tax Levy
Municipality Increase Revenues Growth Increase
nAil 12.0 -3.0 -5.5 3.5
118" 12.0 0.0 -1.0 11
Under the above situation, both municipalities have the same core cost pressures
such as: wage settlements, utilities and costs associated with meeting Provincial
Government regulations.
16
8
034
2006 Allocation of Residential Prop. Taxes
Region
54%
School
Boards
20%
1m City. School BoardS.RegiOnl
17
Percentages Vs. Dollar$
In 2006, the budgetary levy increase was 5.79% or
1.45% on the Total Tax Bill.
A 1 % budgetary increase translates into $9.75 per year
or 20 cents per week.
1....A.S..s....e..s.sm...e.. .nt
. $296,000
....
1.0%
City
$9.75
City 1 % = 20 cents per week.
18
9
(' ')-
....: ~J
Summary of City's Current Financial
Environment
City is in a limited growth scenario.
Debt and debt payments are reaching all
time highs.
The City needs several years of financial
breathing room.
19
New Facilities & Service Level
Enhancements
The City is currently in a "limited growth" scenario regarding population and
assessment. In other words, the City is in a "status quo" position.
1 % Assessment growth does not cover City core inflationary pressures
such as utilities, wages and higher costs to meet Government Reg.'s.
New facilities and their corresponding operating and financing costs
will have to funded through increases in property taxes.
Increase service levels provided by additional staffing or other
means will have to be funded through increases in property taxes.
Until the City's assessment growth is above the core inflationary level,
changes in service levels and facilities will have to be funded through
increases in the tax levy.
The City does not have the financial resources to
absorb these extra costs.
20
10
;';." ~
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Feb 2006 Forecast for 2007 Draft
Budget
Feb 27/06 - Momt. Forum
UnControllable
Salaries & Benefits
Annualization of 2006 New Positions
General Inflation
Debt Charges
Reduction in Assessment Growth
Sub Total
3.50%
0.78%
1.00%
2.25%
1..0.0%
8.53%
Reduction in Use of One-Time Funds or Sources
Easement Settlement Reserve
,.........."'..,..........-...."..............."............................
Draw from Rate Stab. Res.
PriorYrsCapital
Sub Total
Total Starting Financial Position
2007 Budget
3.20%
2.99%
.:L.ll%
7....3.2.%
15.85'%
The above financial estimate excludes:
Any new positions for 2007.
New programs or enhanced levels of service.
21
2007 Budget Guidelines
Based on Council's approval guidelines (April 2006)
1. Minimum increase in full time or part time staffing hours.
2. Maintain current service levels.
3. Capital funded from property taxes continues to be reduced.
4. Debt financing continues to be reviewed.
5. Reduced reliance on one-time funds.
6. All discretionary expenditures are at 2006 or below budgetary
levels.
22
11
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Introduction to the Multi Year Plan
1. Staff are recommending that a multi year strategic plan
be developed.
2. Plan is required due to City's unique financial
environment.
3. The financial plan will act as blueprint for future City
service delivery based on current financial resources.
4. The multi year plan will assist with future budget
development and service delivery issues.
23
Multi Year Fiscal Plan
For the plan to succeed, a corporate wide effort is
required.
Costs will have to be contained and new revenues/fees will
have to be explored for the plan to work.
The plan will be updated every year to accommodate new
information and uncontrollable events.
Uncontrollable events range from Federal to Provincial
Government regulation changes (and their hidden costs),
to unexpected changes to our core inflationary factors.
24
12
_ .D!J C
\. 0iJ
2007 Preliminary Current Budget
April 2006 Forecast for 2007
Current Position
Further use of One-Time Reserves
2007 Levy
15.85%
8.9 - 9.9 1
TBD
Starting Position
of
Multi Yr Plan
The multi year plan will be based on the City's current service levels and
community facility infrastructure.
Increase levels of service and or facilities will have to be treated as an
additional tax levy.
25
2007 Draft Capital Budget
Development
$45,000,000
$35,000,000
$25,000,000
$15,000,000
$5,000,000
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1-.- Draft Capital Budget 1
The 2007 draft capital budget is currently at $10.9 million.
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26
13
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2007 Draft Budget Timetable
1. Budget package to be mailed out on March 9, 2007.
2. Budget Committee meetings scheduled for March 22 to
23.
3. Council adopts budget at the April 2nd, 2007 Council
meeting.
27
Financial Summary
Over the last 35 years, senior government indecision
regarding withholding vast parcels of land from economic
development has created a unique financial challenge.
Every year, expenditures increase due to: core inflationary
pressures, increased costs associated with Government
regulations and higher repair and replacement costs of the
capital infrastructure.
Pickering does not have access to ongoing revenues that
increase with inflation.
The City needs "financial breathing room" (several years) to
assist in meeting the unique Pickering financial challenges.
28
14
n..'4J"'!.
\.. .
Conference Board of Canada
(February 6, 2007)
"The municipal governments of Canada's major cities are caught in
fiscal pincers: on the one hand, they bear the costs of services that
have been off loaded by federal and provincial governments over
the last two decades....; on the other hand, they are under financed
by available resources of revenue."
"Although the fiscal situation of .. .cities is untenable, senior
levels of government continue to reap the immediate rewards of
maintaining the status quo."
"As a result, federal and provincial governments get the
upside of urban growth - the goldmine - while big
cities get the downside - the Shaft."
29
CAG
Action
Plan
30
15
'\ 4 '"
l> 1.
CAO's Action Plan
Actions Undertaken Every Year:
All operating costs scrutinized and reduced to minimum
levels.
All utilities, contracted services reviewed and reduced.
All other non mandatory costs reviewed and reduced.
Selective hiring freeze implemented.
All fees, charges and other revenues reviewed and
maximized.
31
Staff's Action (2001 & Ongoing)
Veridian Interest & Dividends $13,759,750
Transit Funding 5,486,200
Ongoing Assessment Appeal 2,610,000
Easement Settlement Ag. Res. 2,500,000
POA 2,349,459
Land Sales 753.775
Total $27.459.184
This is in addition to the $25 M in draws from Reserve & Reserve
Funds used to balance the budget.
32
16
'. 4 "'.
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~....- ..,
Corporate Action Plan
Future Strategies/Options:
Business (service) delivery model to be Reviewed.
Vacancies to be carefully reviewed.
- May not be filled.
- Resources may need to be reallocated.
Capital maintenance budgets will be a priority for this
Council term.
Existing infrastructure has to be maintained for
the health and safety of our residents and staff.
33
Corporate Action Plan
Review of large assets.
Land Holdings
Brock Road surrounding the Operations Centre there are
approximately 30 acres of developable land.
North of the Operations Centre there are 5 to 10 acres of
developable land.
Veridian Shares
The former Pickering Hydro was merged with other
municipal hydro entities to form Veridian.
Prom Notes - $25.1 M
Shares initial value $30.5M
34
17
" 4 r.'
/ .
_ _ \.. d
Conclusion
Paraphrasing
As chairman Anderson in his speech to Council on
Monday (February 5, 2007)
We must use the forthcoming Provincial and Federal
elections to our maximum advantage to achieve our
larger goals.
35
Corporate Action Plan
I am recommending that two Ad Hoc Committees of
Council be formed for the following:
Committee A Committee B
To pursue the Ontario Government
for financial compensation over its 35
years of indecision over the North
Pickering lands.
The Provincial history of these lands
is as follows:
Cedar Wood - Pop. 250,000
North Pickering - Pop. 90,000
Seaton - Pop. 70,000
To pursue the Federal Government for
financial compensation over its 35
years of indecision over the North
Pickering lands.
The Federal Government history of
these lands is as follows:
From International Airport (to replace
Pearson) to a Regional Reliever (GTAA).
36
18
ATTACHMENT#~ TO REPORT#.a.1 ~''''f)7
THE CORPORATION OF THE CITY OF PICKERING
BY-lAW NO. xxxx/07
-1~44
Being a by-law to amend By-law Number
6191/03 to confirm General Municipal Fees
WHEREAS the Council of the Corporation of the City of Pickering enacted By-law
Number 6191/03, as amended, on October 14, 2003 to confirm general municipal fees.
AND 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 and By-law 6677/06;
NOW THERFORE 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 read a first, second and third time and finally passed this 2nd day of April, 2007.
David Ryan, Mayor
Debi Bentley, Clerk
CORP0223-07/01
,CHMENT#-3-1
" A. -
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2007 Current & Capital Budgets
&
A Financial Overview
2007 - 2010
2011 - 2014
Budget Goals
· Financial Sustainability
· Financial Flexibility
· The City undertakes longer range
financial planning in both its Current
& Capital Budgets
2
#~/fo-07
Executive Committee March 23, 2007
1
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The Need for Financial Planning
· Revenue Challenges
· Expenditure Pressures/Debt Doubles
· Discretionary reserves and reserve
funds being depleted
· Lack of assessment growth
3
2007 Budget Objectives
CAO and Department Heads
· Undertook a line by line review of
every budget
· Focus on 2006 Actual Expenditures
where reasonable
· To use the lower of 2006 Actual or
Budget (Depts. Inc.1.65%)
· Dept. Revenues Inc. 5.350/0
4
2
C 4"(.
2007 Draft Budqet Summary
BUDGET (DECREASE) ~
$53,404,854 $2,432,740 $55,837,594
-20,812,286
$32,592,568
2,635,911
395,226
-85,572
,715,847 $39,313,454
5
ErQperty Tax Impact Summary
What will the residential taxpayer see on their tax bill?
City Share
0/0
81.14 8.79%
Pickering increase equates to $1.56 per household or $0.50 p
person per week.
Total Bill (Region, School Board & City)
280,000
$3,783.74
163.19
$ 3,620.55
6
3
048
Multi Year Fiscal Plan
2007 - 2011
Current Budget Assumptions - annual increases
No increase in staffing
Utilities (water, hydro & gas)
Building Repair and Maintenance
Debenture Debt Charges
Departmental Revenues
Annual Operating Surplus
Other Operating Costs
Assessment Growth
0.0%
7.5%
5.0%
10.0%
1.5%
$650,000
2.5 - 3.0%
$300,000
Additional assessment associated with Duffin Heights
Neighbourhood development projected
to commence in 2011
7
Financial Projection 2007 to 2010
Net City Operations
Levy Change
2007 2009 2010
Draft Proforma Proforma
BUDGET BUDGET
$39,313,454 $42,223,000 $44,714,000 $47,317,000
12.13% 10.26% 9.35%
(1.659.000) (1.668.000) (1,444.000) (1 ,580.000)
~37,~~4,4~4 $40,555,000 ~43.270.000 l!45.737,000
8.79% 7.70% 6.70% 5.70%
56.351,000
Total City Operations
%
Reserve Draw
Tota! Reserve Draw
8
4
" 4 -
l' .j
Financial Projection 2011 to 2014
2011 2012 2013 2014
Proforma Proforma Proforma Proforma
BUDGET BUDGET BUDGET BUDGET
Total City Operations $50,038,000 $52,278,000 $55,160,000 $58,232,000
Reserve Draw (1,053,000) (499,000) (430,000) (493,000)
Net City Operations $48.985.000 ~51.779,00O $54.730.000 $57,739.000
7.10% 5.70% 5.700,,>
9
Summary
If the projections prove correct:
· Lower tax increases with stability
· Fund balances replenishment commences
. Long term strategic planning for the end of
future (greenfield) growth
If they do not prove correct:
· Loss of financial flexibility and sustainability
· Depletion of remaining fund balances
· Increasing debt
· Continuing high tax increases
10
5
(\5.0
Capital Forecast
2008 - 2011
Fall 2007
Multi Year Budget
11
Draft 2007 Capital Budget
Summary
OnQoinQ Prior Year's Proiects
2006 Projects
Prior Year's Projects
Ext. Subdivisions Prior
Year's Projections
Total Projects to be Completed
$2,834,000
1,856,500
1,962,022
.$6,652,522
12
6
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2007 Capital Budget Summary
External Subdivisions
Roads
Sidewalks & Street Lights
Stormwater Management
Traffic Signals
Total External Subdivisions
Capital Maintenance & Replacement
Health & Safety
New Capital
Grand Total
Grand Total with Prior Year's Projects
$ 884,500
481,900
160,000
65.000
$1,591.400
4,068,201
1,112,800
2,932,905
$9,705,306
$16,357,828
13
Sustainable Pickering Capital Budget
Major Initiatives
Clean Air Initiatives
Humidification System Civic Complex
Hybrid Vehicles (2)
Trees (City Green Canopy)
Clean Water Initiatives
Toy Ave. Storm Sewer Installation
Frenchman's Bay Master Plan
Sideline 16 Erosion Control
EnerQV Efficiencv Initiatives
Roof Replacement with higher level of
insulation
Rec Complex (tennis court area)
(Dunbarton pool)
$ 80,000
84,000
85,000
250,000
150,000
85,000
100,000
80,000
14
7
,~ 5"
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Energy Efficiency Initiatives (cant' d)
New Vapour Barrier (on pool wall)
New Ammonia Compressor
Reline 4 Hot Water Tanks
New Energy Efficient Compressor for
East Shore Gym
High Efficiency Furnace for Greenwood
Community Centre
$80,000
55,000
25,000
20,000
1 0.000
Total
$1.104.000
15
2007 Maior Capital Proiects
Sheppard Ave. Altona Rd to
Rosebank Rd . slope retenti on
liverpool Rd reconstruction:
Wharf St to Annland St
Sidewalk & Streetlights by
CP rail underpass
400,000
EA process for Duffin Heights Neighborhood
Old Brock Rd reconstruction. additional
funding
Purchase of property for Pickering
Waterfront trail
220,000
Town Centre West access road
Bev Morgan Park. running track & electrical
191,000
Ressor Creek Bridge. additional funding
100,000
100,000
Hotel restoration project. phase 1
Total
80,000
$ 4,107,200
16
8
ATTACHMENT #....:L TO REPORT # ~I'r 0 1
THE CORPORATION OF THE CITY OF PICKERING
"5~
r .
- <-",7 .J
BY-lAW NO. XXXX/07
Being a By-law to provide for the establishment of a
Reserve Fund to be known as the Animal Shelter
Reserve Fund
WHEREAS under the Municipal Act, S.o., 2001 as amended, Section 11, 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.
WHEREAS the Council of the City of Pickering approved Council Report CS 16-
07 endorsing the creation and or establishment of an Animal Shelter Reserve
Fund to provide a source of funds for a permanent animal shelter.
NOW THEREFORE THE COUNCil OF THE CORPORATION OF THE CITY OF
PICKERING HEREBY ENACTS AS FOllOWS:
1. The establishment of a reserve fund to be known as the Animal Shelter
Reserve Fund is hereby authorized.
2. The purpose of this fund is to provide funds for the provision of an animal
shelter.
3. The initial source of funds will be a transfer of the proceeds of the
dissolution of "PAW" in the amount of $144,433.00 to this reserve fund
and donations received to date in the amount of $963.00. Future sources
of funds will be as identified by the Treasurer or as approved by Council
including but not limited to the annual budget, donations or any other
source.
4. The Treasurer may draw funds from this reserve fund to provide for the
construction of an animal shelter.
5. Interest earned on the investment of fund balances shall form part of this
reserve fund.
6. This By-law shall come into force on the date of its enactment.
By-law read a first, second and third time and finally passed the 2ndrd day of
April, 2007. '
David Ryan, Mayor
Debi A. Bentley, City Clerk