HomeMy WebLinkAboutCS 15-09
cay REPORT TO
COUNCIL
PICKERING, Report Number: CS 15-09
Date: May 19, 2009100
From: Gillis A. Paterson
Director, Corporate Services & Treasurer
Subject: 2009 Current and Capital Budgets
Recommendation:
1. That Report CS 15-09 of the Director, Corporate Services & Treasurer be
approved;
2. a) That the 2009 Current Budget expenditure for personnel expenditures,
consisting of salaries and wages (Account 1100), overtime (Account
1200) and employer contributions (Account 1400), in the total amount of
$39,915,363 be approved;
b) That the 2009 Gross Current Budget expenditures for City purposes in the
amount of $31,314,541 (that excludes personnel expenditures and
includes capital expenditures from current revenues in the amount of
$2,484,452); less estimated current operating revenues of $25,969,347
and transfer from the Rate Stabilizk tion Reserve of $2,912,338 and
transfer from the Economic Stabilization Reserve of $405,000 be
approved;
c) That the total levy under a) and b) above which results in a net overall levy
for City Operations of $41,943,2181 which is approximately a 3.53%
increase over 2009, be approved;
3. a) That Council approve the revised financing for Toy Ave. by cancelling the
unspent funds previously approved in the 2007 and 2008 capital budgets
(Account 5320.0824 and 5410.0700) and costs incurred and funding of
approximately $9,500 be transferred to the 2009 project (Account
5320.0910);
b) That contingent upon the Intake Two (BCF - Communities Component)
application for Toy Ave. filed May 1., 2009, being accepted, Council
approve the gross expenditure of $1,050,000 with financing from Federal
and Provincial Governments of $350,000 each and the remainder from
Federal Gas Tax Reserve Fund 75,000) and Move Ontario Reserve
($175,000) ;
Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 2
4. That Council approve the more detailed project scope for Frenchman's Bay
Master Plan - Phase One by cancelling the 2008 capital project (Account
5410.0805) and approving the 2009 project (Account 5410.0905);
5. a) That the 2009 Capital Budget as submitted to the Executive Committee
meeting of May 7, 2009 be amended to reflect the addition of the following
capital projects:
Cogs Funding
401 Ped. Bridge $10,001,0,000 Fed./Prov. $10,000,000
Glenanna Rd. 8510,000 Fed./Prov. 566,950
Debt 283,050
Whitevale Bridge 800,000 Fed./Prov. 533,600
Debt 266,400
Accessibility Improvements 17,400 Fed. 17,400
Total 11.667.400 $11.667.400
b) That the 2009 Capital Budget as submitted to the Executive Committee
meeting of May 7, 2009 be amended to provide for the following two
projects, totalling $2,820,000, being advanced from the future concept
planning phase to construction by adding them to the 2009 Capital
Budget, dependent upon Federal (RInC) and Provincial (Ontario REC)
funding:
Don Beer Arena Rehabilitation and 2 2
Refurbishment with funding as follows:
Federal/Provincial RInC Grants $1,680,000
Federal Gas Tax Reserve Fund 420,000
Community Contribution (Don Beer Res.) 100,000
Debt 320.000
Total Funding $2,520,0Q0
Kinsmen Park Field House with funding as $0 QQ
follows:
Federal Grants $100,000
Provincial Grants 100,000
Provincial Grant - Invest in Ontario 50,000
Federal Gas Tax 50.000
Total Funding $30T
c) That the 2009 Capital Budget for the City of Pickering with a Gross
Expenditure of $16,955,617 be amended to reflect the additional capital
budget projects in recommendation 5a) of $11,667,400 and 5b) of
$2,820,000 for a revised capital budget of $31,443,017 be adopted as
amended;
Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 3
d) That the following capital financing sources be approved as presented in
the amended 2009 Capital Budget:
Transfer from Current Fund to Capital Fund $2,484,452
Transfers from Reserves:
- Don Beer Arena (7033) 118,000
- Rec Complex Pool Reserve) (7035) 12,500
Move Ontario Reserve (7040) 300,000
- Cap Mtce and Mgmt Systems(7045) 60,000
Transfers from Reserve Funds
- Development Charges 1,267,800
- Parkland Development (7502) 30,000
- Federal Gas Tax Funds (7505) 2,532,000
- City Share Dev. Charges Projects (7022) 714,365
- Third Party Contribution (7501) 200,000
- Storm water (7611) 46,000
Debt - 5 yr 495,000
Debt - 10 yr 6,639,450
Federal and Provincial Grants 401, Bridge 10,000,000
Federal and Provincial Grants - Don Beer
Arena Rehabilitation - (RInC) & (Ont Rec) 1,680,000
Federal and Provincial Grants - Kinsmen Park
Field House - (RInC) & (Ont Rec) 200,000
Federal Grant (1610) 845,275
Federal Grant - Enabling Access. 17,400
Provincial. Grants (1623) 3,103,275
Waterfront Toronto 500,000
Donations (1592) 197.500
'TOTAL 31.443.017
e) That total external debt financing of $7,134,450 for the projects identified
in the 2009. Capital Budget, and as indicated in this report, in the amount
of $495,000 for a period not to exceed 5 years and $6,639,450 for a
period not to exceed 10 years;
Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 4
f) That projects identified in the 2000 Capital Budget as being financed
through the issuance of debt be subject to additional, specific approval of
the expenditure and the financingiby Council;
g) 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 additional principal repayment,
outstanding loan or debt charges or to reduce debt, internal loans or any
other amounts to be financed;
h) That all Capital expenditures or portions thereof, approved in the 2009
Capital Budgets to be financed through the issuance of debt, may, at the
discretion of the Director, Corporate Services & Treasurer, be financed
through internal loans, dealer financing, current or capital funds or a
combination thereof;
i) That the Director, Corporate Services & Treasurer be authorized at his
discretion to apply any excess funds raised from completed internal loans
projects to first repay the original internal loans, and secondly to reduce or
replace budgeted internal loans oridebts;
j) That the Director, Corporate Services & Treasurer be authorized at his
discretion to apply any excess funds through the issuance of debentures
as provided for under Section 413 of the Municipal Act, 2001 as amended;
6. That the Director, Corporate Services & Treasurer be authorized to transfer:
a) Any surplus current operating funds at year-end in excess of
approximately $125,000 in the following ratio: 30% to the Rate
Stabilization Reserve and 70% to the City Share DC Projects Reserve;
b) Any funds necessary from the Rats Stabilization Reserve in order to
ensure that the Current Budget results in a year end surplus of no less
than $125,000;
c) Any portion of the annual Veridian Dividend not required to be recognized
in revenue to meet expenditures be transferred to the Economic
Stabilization Reserve;
7. 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 accommodates any reallocation of 2009 current operating
expenditures and revenues resulting from any reorganization and any
adjustment in taxes or tax rates duo to Provincial and Regional tax policy
changes;
i
Report CS 15-09 May 1,9, 2009
Subject: 2009 Current and Capital Budgets Page 5
104
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 unless
otherwise approved by Council;
8. That any under expenditures from projects funded from Federal or Provincial
Grants may be used to fund over expenditures for approved projects funded from
the same source(s);
9. a) That Council approve the establishment of the Operations Centre Reserve
Fund where all proceeds from future land sales associated with Duff in
Heights be allocated to this reserve fund and all expenditures associated
with the establishment of the new operations centre be funded from this
reserve fund;
b) That Council pass the attached by+law to give effect to the foregoing;
c) That any revenue resulting from the disposition of land or buildings, other
than Duff in Heights, be transferred to the Capital Equipment Reserve;
10. That the Director, Corporate Services & Treasurer be authorized at his discretion
to close any prior year's capital project accounts, and to first apply any excess
funding to any over expenditure in other capital accounts and to secondly
transfer any remaining excess funding ba0k to the original source of the funds;
11. That the Director, Corporate Services & 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) Enter into leases or rental agreements for the provision of vehicles or
equipment required for temporary use during periods of equipment
breakdown or repair or during periods of increased need (eg. Inclement
weather),
12. That Council pass the attached General Municipal Fees and Charges By-law
which provides for the fees and charges that are incorporated into the 2009
Current Budget;
13. That the Director, Corporate Services & Treasurer be authorized to adjust, where
appropriate, the per kilometre travel expense reimbursement rate during the year
in order to maintain a reasonable level of reimbursement with any increase in
cost being met from under expenditures io other accounts;
Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 6
10
14. That Council adopt the following Budget Guidelines for the development and
presentation of the 2010 budget;
a) That there be no new full or part-tiime 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, or additional staffing is due to health and safety or LTD
accommodations;
b) That there may be no new, enhanced or expanded current or capital
budget programs;
c) That the 2010 budget be developed based on a "restricted use of debt;"
15. That the Director, Corporate Services & Treasurer be authorized to initiate any
assessment appeals necessary to protect the assessment base of the City;
16. That the Director, Corporate Services & Treasurer be authorized to execute the
buy out provision in the lease for the Trackless sidewalk snow plough as
provided for in the 2009 Capital Budget for Property Maintenance (Account
5311.0901); and,
17. That the appropriate staff of the City of Pickering be given authority to give effect
thereto.
Executive Summary: Not applicable
Financial Implications: At the Executive Committee meeting on May 7, 2009, the
following changes were made to the draft Current and Capital Budgets:
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Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 7
106
Current Budget Changes
General Government Section Grants:
Ribfest Event $5,000
Current Budget Reductions
Regional Councillor B. Littley's budget (11,680)
Regional Councillor B. McLean's budget (12,500)
City Councillor J. O'Connell's budget (3,300)
City Councillor D. Pickle's budget (6,570)
Office of Sustainability:
Increase in conferences 5,000
Total Net Current Budget Changes ($24,050)
The 2009 budgetary levy increase has been reduced from
3.59% to 3.53% as a result of the reductions made by the 3.53%
Councillors noted above.
The 2009 Current and Capital Budgets, if adopted as amended, will result in a tax levy
increase of 3.53 % over last year's average property tax bill (excluding any
Provincial tax policy changes). On a single detached home assessed at $289,400 the
total tax levy proposed increase for the City equates to $1.30 per week.
Sustainability Implications: The 2009 Current and Capital Budgets contain a
number of projects and expenditures that will contribute to environmental sustainability.
Background: The Recommendations put forth are those necessary to adopt and
provide authority and direction for the 2009 Current and Capital Budgets of the City of
Pickering and to provide direction regarding the development of the 2010 Budgets.
In April 2008, Council was presented with a forecasted need of a tax increase of
approximately 6% to 7% to meet expenditures. At that time the decline in the
economy, at least not to the current extent and degree, was not apparent.
The first "draft" of the 2009 Current Budget resulted in a tax increase of approximately
12.0% which staff knew was unacceptable. Under the Chief Administrative Officer and
senior management's team direction, expenditures were reduced and then reduced
again and again. When you review the individual cost centres, you will notice that many
of the accounts are at 2008 levels that in-turn means that inflationary cost pressures
were absorbed by the departments.
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Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 8
User fees were reviewed in the context of increasing them taking into consideration the
current economic environment. By reviewing expenditures and revenues, a net change
of $2.5 million or 6.3% was removed from the final draft.
One of the most direct and visible effects of the recession on the City is the significant
decline in investment income for the current fund from $1.6 million in 2007 to $1.1
million in 2008 to a forecasted $650,000 in 2009. This is primarily due to the steep
decline in interest rates from about 4% to less than 1 Another effect of the recession
is the impact on Building Permit revenues which have declined from $936,519 in 2007
to forecasted revenue of $550,000 in 2009. Even the 2009 forecasts for these two
significant sources of revenues may prove overly optimistic.
After reducing expenditures, reviewing revenues and absorbing the negative impact of
the recession through lower investment incomeand building permit revenues there
were only two remaining ways for the City to reduce the budgetary increase: reduce
services and/or increase the draw from the Rate Stabilization Reserve. Proposing to
reduce services in 2009 without prior discussion with Council was deemed not
appropriate. In terms of the Rate Stabilization Reserve, the budget includes a
proposed additional draw of $426,000 (1%) increasing the 2009 draw to $2.9 million.
Furthermore, a draw of $405,000 (1 of the Special Veridian dividend was needed to
reach the 3.59% increase being proposed. In other words, the City is using $3.3 million
of one time funds to reduce the tax levy. The reductions made by Councillors to their
individual budgets at the Executive Committee Meeting of May 7, 2009 further reduced
the budgetary increase to 3.53%.
City's Budgetary Increase Summary
2009 Projection (Spring 2008) 6.0 to 7.0%
First Draft (January 2009) 9.8 to 10.8
Reduced Revenue from:
Building Permit & Invest Income 1.6
Sub-Total 11.4 to 12.4%
Staff Budgetary Review & Reductions (6.3)%
Special (One Time) Veridian Dividend (1.0)
Additional Draw - Rate Stabilization 1.0
Proposed Budgetary Increase 3.59%
After Executive Committee meeting of Mjay 7, 2009 3.53%
Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 9
108
Special Veridian Dividend
Veridian approved a special dividend for 2009 for the shareholders. Pickering's share
of the special dividend, to be paid quarterly, will be approximately $1.8 million,
effectively doubling the City's dividend for 2009L
This amount will be placed in a new Reserve called Economic Stabilization Reserve to
assist the City's budget process during the next few years. For the 2009 budget,
$405,000 has been drawn from this reserve to reach the proposed tax increase of
3.59%, that was further reduced to 3.53% after the Executive Committee meeting of
May 7, 2009. The current fiscal strategy is to draw $405,000 for the next four years
(2009 to 2012) to partially offset loss of income.related to the recession.
Reserves and Reserve Funds
The City is using approximately $3.3 million to deduce 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 a
specific purpose, intent or condition on the use of the funds. The December 31, 2008
non-discretionary uncommitted balance is $33.2 million with the Development Charges
Reserve Fund having an uncommitted balance of $23.1 million. Some other larger non-
discretionary Reserve or Reserve Fund balances include Third Party/Developer
Contributions, Parkland, Worker's Compensation, Federal Gas Tax, City Share DC
Projects and Self Insurance. The December 3f, 2008 discretionary Reserve and
Reserve Fund balance is $19.2 million. The Rate Stabilization Reserve is the largest
component of the discretionary funds of which $2.9 million is being used this year to
reduce the 2009 tax levy.
Use of One Time Funding
$4,500,000
$4,000,000
$3,500,000
$3, 000, 000
$2,500,000
$2,000,000
$1,500,000
2007 2008 2009 2010 2011
oActuals ®Budget 0Forecast
Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 10
189
As the above chart indicates, over the next two;years (2009 and 2010) the City will be
drawing over $7.3 million from the Reserves to lower the tax rate due to the recession.
The 2010 preliminary draw does not consider any of the potential financial impacts
associated with the harmonization of the GST and PST. After 2010, the City does not
have sufficient funds to maintain drawing from this reserve at this current rate and other
sources of revenues or expenditure reduction will have to be identified. Therefore,
starting in 2011, this draw will have to be reduced.
Debt and Debt Charges
$7,000,000
$6,000,000
$5,000,000
$4,000,000
$3,000,000
$2,000,000
$1,000,000
$0
-*-Principal & Interest
--f-2009 & 2010 CaplitaI Budgets
Estimated
This year's capital budget utilizes $7.1 million in debt. As of December 31, 2008, the
City has approved $20.5 million in debt financed projects and this amount will increase
to $27.6 million as a result of the 2009 capital budget. However, it should be noted that
the City is using approximately $870,000 in debt! to fund its share of the recently
announced Federal and Provincial grant funded projects. In addition under "Intake Two
= BCF Communities Component' (Toy Ave. project), if the City is successful, the City
will reduce its use of debt by $325,000.
This year, the City is expected to pay $4.2 million in interest and principle payments to
service the City's debt. The $4.2 million is equivalent to 10.6% of the budgetary tax
levy. In other words, if Pickering had no outstanding debt, the City would have almost
10% more flexibility. It should be noted that the 2009 debt financed projects will
translate into approximately 2.0% budgetary increase for 201.0.
Report CS 15-09 May 19', 2009
Subject: 2009 Current and Capital Budgets Page 11
110.
Table Ome "
External Debt and Internal Financing of Capital Projects
City of Pickering
5 and 10 Year Debt Financing
2009 Capital Bud et
Capital Project Code Debt - 5 Description
Years $
5320.0902 195,000 Four Ton Dump Truck
5731.0903 300,0 Road Grader
Total Five Year Debt 495,000
Capital Project Code Debt -10 Description
Years $
5320.0910 325,00 To Ave.
5320.0914 283,05 Glenanna Road
5320.0915 266,40 Whitevale Bridge
5321.0901 680,00 RU-3 Sideline #4
5321.0905 165,00 BR-3 Brock Rd
5321.0910 1,034,00 BI-20 Krosno Creek Storm Water Facility
5321.0910 * 716,000 1 BI-20 Krosno Creek - DC Portion
5340.0913 850,00 Fire - Pumper Rescue
5410.0904 2,000,000 Duff in Heights Pond #4
5715.0903 320,00 Don Beer Arena Rehabilitation
Total Ten Year Debt 6,639,450
DC portion be funded from debt until Development Charges are collected.
2009 Current Budget Estimates
As in previous years, the City's budget includes components that are based on
estimates or best known information when the budget is developed. The 2009 current
budget for building permit fees has been decreased to reflect the current economic
environment. Presented below is the summary of activity for building permit fees.
2009 Draft Current Budget Building Permit Revenue
2907 2i~1Q$ 2UOS ° 2009
Ac~ tual Actual Bt~ ddet Decrease Draft
Budget
$536,519 $614,756 $850,00 ($300,000) $550,000
While the 2009 budget has been decreased, these is a possibility that building permit
revenue may be lower than what is anticipated fdr this year. In comparing the building
Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 12
-permit revenues for 2007 with 2009, the large swing is an indication of the uncertainty
and the element of risk associated with budgeting for this type of revenue source.
2009 Draft Current Budget Investment Income Revenue
2007 2008 2000 2009
Actual Actual t Decrease Draft
Budget
$1,632,872 $1,101,238 $1,050,000 ($375,000) $675,0000
I
The investment income has been revised downwards to reflect the current interest rate
policy of the Bank of Canada as it attempts to fight the recession. In comparing the
2007 actuals with the proposed 2009 budget - there is a decrease in revenue of
approximately $1.0 million or 2.46% change in the budgetary levy.
Tax Rates
As has been the case for the last few years, the 2009 Property Tax Rates and Levy By-
law will be presented later in this agenda.
2009 User Fees and Charges 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
is updated every year as part of the budget process. In order to have the new user fees
become effective, Council will be required to approve the 2009 User Fee By-law, (as
required under Section 391 of the Municipal Act, 2001, as amended) which is included
in this report.
The Municipal Act, 2001 as amended through Bill[ 130, no longer requires municipalities
to maintain a formal list of fees and charges. StOff, however, have decided to maintain
the fee list due to the fact that it provides Councill 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 jpublic comment and provides for a
more open access and transparent government process.
Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 13
X12
Capital Budget
The 2009 capital budget proposes expenditures in the amount of $31.4 million. The
high capital budget is mainly due to the recent funding announcements which are
summarized in Table Two. The 2010 capital budget, (excluding any grant funding
announcements) will be approximately in the $8.0 to $10.0 million range with the largest
source of financing being debt.
Table
Summary of Capital Budget Changes due to
Recent Funding Anr12uncements
2009 Capital Budget as submitted to the Executive $16,955,617
Committee of May 7, 2009
Add: Infrastructure Stimulus Fund
(3 Projects): $10,000,000
401 Pedestrian Bridge 850,000
Glenanna Rd. 800,000 11,650,000
Whitevale Bridge
Accessibility Improvements 17,400
Recreational Facilities (RInC) & Ontario
REC (2 Projects):
Don Beer Arena 2,520,000
Kinsmen Park Field House 300.000 2,820,000
Proposed 2009 Capital Budget 31.443.017
As Members of Council are aware, the City can only afford these types of expenditures
by using debt financing.
Infrastructure Stimulus Fund (Three Projects)
Project Gross Cost Federa rovincial Municipal Cost
Share
h 401 Pedestrian $10,000,000 10,000,000 $0
Bridge
Glenanna Road $850,000 $566,950 $283,050 - debt financed
Whitevale Bride $800,000 ! $533,600 $266,400 - debt financed
Report CS 15-09 May 19,.2009
Subject: 2009 Current and Capital Budgets Page 1.4
The application due date for the Infrastructure Stimulus project submission was May 1,
2009. As stated in the May 7th presentation, the 401 Pedestrian Bridge project will only
proceed if both Federal and Provincial levels of ;government provide 100% project
funding. Without this funding, the City is not in as financial position to contribute on a go
'forward basis towards the capital cost of this project. The Glenanna Road project
involves grinding the existing asphalt pavement in the preparation of a 40mm asphalt
overlay (2.9 km in length). The Whitevale Bridge involves the following work:
rehabilitation of the bridge deck by waterproofing and paving the bridge deck, replacing
deck joints and repairing the.concrete curb and sidewalk.
Small Proiects Enabling Accessibility Application
On May 8, 2009, the City submitted an application for the "Enabling Accessibility Fund"
program. The City applied to have accessible doors installed at the following locations:
Claremont Community Centre, West Shore Community, Pickering Civic Complex and
the Redman House at Pickering Museum Village. The total grant funding requested is
$17,400.
Recreational Infrastructure Canada (RInQ &-(00t REM Program (Two Projects)
Project Gross Cost FederaVProvincial Municipal Cost
Share
Don Beer Arena - $2,520,000 $1,680,000 $320,000 debt
Rehabilitation $100,000 Don Beer. Res.
$420,000 FGT
Kinsmen Park $300,OOOJ $200,000 $50,000 FGT
Field House $50,000 Invest in Ontario
On Tuesday, May 12th, the Federal and Provincial, Governments announced a new
funding program for the renewal of recreational facilities. The deadline for the
submission is May 29, 2009. It appears that there will be funding available over the
next two years and staff anticipates that there will be another funding or program
announcement sometime next year.
Toy Ave. (Recommendation 3)
Toy Ave. was previously budgeted for in years 2007 and 2008 but not constructed.
Additional funding was required for 2009 due to change of the project's scope (adding
the north part of the road). Therefore, the entire ;project is being rebudgeted in 2009 as
one complete project to assist with the required documentation for debt financed
projects. The additional cost for 2009 is $325,000 to be debt financed.
Toy Ave. road construction project has been submitted by the City as its application for
the recently. announced "Intake Two - Building Canada Fund Communities Component"
grant funding with an application deadline of May 1, 2009. The table below summarizes
the two different financing options as it relates tothis project.
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Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 15
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Table ThLee
Comparison of Fundiba for Toy Ave.
2009 Capita Budget Intake Two BCF Project
If Approved
Gross Cost 1.050.000 $1,050,000
Provincial - BCF (350,000)
Federal - BCF (350,000)
Federal Gas Tax (FGT) (250,000) (175,000)
Move Ontario (300,000) (175,000)
Invest in Ontario ,(175,000)
Debt - 10 year (325,000)
Total Funding $(1,050,00911 $(1,050,00011
If the City is successful in obtaining "Intake Two" funding, the City will eliminate the use
of debt and reduce the amount of Federal Gas Tax and Move Ontario funds.
Establishment of Operations Centre Reserve Fgnd (Recommendation 9)
Recommendation 9 provides for the establishment of the Operations Centre Reserve
Fund where future. City owned Duffin Heights land sales net proceeds will be
transferred and any interest earned on these funds will be credited to this Reserve
Fund. This reserve fund will be used to finance those costs associated with the
construction of the new operations centre including land costs, soil testing, surveys and
legal fees. The By-law to establish this Reserve. Fund is attached.
Multi-Year Financial Strategic Plan
Last year, staff presented to Council a multi-year financial plan for the years 2008 to
2015. At the Executive Committee meeting of May 7, 2009 staff presented a strategic
financial plan based on the years 2010 to 2018 reflecting various assumptions
regarding the future economic environment. A Rey component of the plan is the
assumption that the economic environment will improve starting in 2012 with the City
benefiting from assessment growth.
Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 16
a City of Plickpring
Multi-Year Financial Strategic Plan
2010 to 2011 2012 to 2914 2015 to 2018
Economy
Recession/Zero growth Economy begins to grow Economic growth above
1 % per ear 3.0%
Assessment Growth
0.5% per year Increases by 0.5% per 3% per year
year
Service Levels
Maintain Existing Levels Maintain Existing Levels Limited expansion of
services to meet public
demand/need
Staffing
Frozen, except for H&S and Maintain Existing Staffing Limited staff increase to
LTD accommodations Levels meet public demand for
services
Debt Strategy
Restricted use of debt City use of debt is, capped Decrease use of debt. City
moves to "Pa as you o"
Reserve Draws
City continues to use Rate Decrease use of Rate City no longer uses Rate
Stabilization Reserve Stabilization Reserve Stabilization Reserve
Assessment growth used to
reduce Rate Stabilization
draw and debt
As the multi-year plan indicates, the financial strOtegy has been adjusted to reflect the
current economic environment. Starting in 2011, the following actions must occur:
• Staffing levels continue to be frozen except for H&S and LTD accommodations.
• Use of debt has to continue to be restricted.
Even with the above noted actions, the projected 2011 levy increase will be
approximately 8.0 to 9.0%. These projections do not include any costs impact that may
be associated with the harmonization of the GST with the PST.
Property Assessment Database Management
Recommendation 15 provides the Treasurer with the authority to initiate any necessary
assessment appeals to protect the property assessment database of the City. Staff
have been advised by our consultants that due td recent court decisions a formal
By-law is required authorizing City officials to file ;assessment appeals. A report with a
corresponding By-law will be prepared for Council's consideration in the near future.
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Report CS 15-09 May 19, 2009
Subject: 2009 Current and Capital Budgets Page 17
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Trackless Sidewalk Snow Plough
The 2009 Capital Budget provides for the acquisition of a Trackless sidewalk snow
plough. In January, 2009 the existing Tracklessi broke down and winter demands
necessitated immediate replacement while repairs were being completed. A
replacement was located from the only supplierwho had one available at that time. As
a new unit was proposed in the 2009 Budget, allease to buy option was explored.
Rather than renting it for several months, it was; leased with 80% of the monthly cost
'($9,000) being applied to the potential purchase. Exercising this option reduces the
purchase price from $129K, as included in the Capital Budget, to $93K which is a
reduction of approximately $36K. Upon approval of the 2009 Capital Budget and
Recommendation 16, the buy out provision will be exercised.
Attachments:
1. By-law to Confirm General Fees and Charges, 2009
2. By-law to Provide for the Establishment of an Operations Centre Reserve Fund
3. Budget Presentation Slides, May 7, 2009
Prepared By: Prepared / Approved / Endorsed By:
Stan Karwowski Gillis A. Paterson
Manager, Finance & Taxation Director, Corporate Services & Treasurer
SK:vw
Copy: Chief Administrative Officer
Recommended for the consideration of
Pickering City C r
/9 r_1
T J. Quinn, R. MM
Chief Administrative O er
ATTACHMENT #TO REPORT #_CjLS'- 0 9
7 THE CORPORATION OF THE CITY OF PICKERING
BY-LAW NO. Xoood09
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, By-law 6677/06, By-law 6748/07
and By-law 6857/08;
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 19th day of May, 2009.
David Ryan, Mayor
Debi Wilcox, Clerk
ATTACHMENT#cq TO REPORT
vg
THE CORPORATION OF THg CITY OF PICKERING
118
BY-LAW NO. XXXX/09
Being a by-law to provide for the establishment of a Reserve
Fund to be known as the Operations Centre 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 15-09
endorsing the establishment of an Operations Centre Reserve Fund to provide a
source of funds for the new Operations Centre.
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 Operations Centre
Reserve Fund is hereby authorized.
2. The net proceeds from the sale of land in the area known as Duffin Heights and
other funds as may be approved by Council shall be deposited into this Reserve
Fund.
3. The purpose of this fund is to provide funds for the costs associated with the
establishment of the new Operations Centre. These include costs for disposal
and acquisition of land, legal fees, surveys, soil tests, engineering design,
construction costs, debt charges and, if available, any equipment and furniture
required for the new facility.
4. Interest earned on the investment of fund; balances shall form part of this reserve
fund.
5. This By-law shall come into force on the date of its enactment.
By-law read a first, second and third time and finially passed the 19th day of May, 2009.
David Ryan, Mayor
Debi A. Bentley, City Clerk
i
ATTACHMENT #_TO REPORT # 1S'~ 09
119
2009 Current & Capital Budgets
A Financial Overview
2009 - 2012
201 2 - 2015
Executive
Commidee
May 7, zoos
The Need for Financial Planning
• Financial Sustainlbility
• Current Economic; Environment
• Revenue Challenges
• Expenditure & Debt Pressures
• Lack of Assessment Growth
• City's infrastructure - current pressures
(repairs & replacement) & growth related
pressures (Duffin Heights & Seaton)
2
1
120
2009 Budget Objectives
CAO and Department Heads
• Undertook a review of all cost
centres' expenditures.
• Limited number of new positions.
• Capital Budget focused primarily on
replacement or repair of City's
existing assets.
3
Pickering's Financial Background
Over the last 35 years, senior government indecision regarding
withholding vast parcels of land from economic development
(assessment growth) has created a financial challenge to the City.
By withholding these lands from !economic development, the City
has been denied assessment growth that translates into additional
property tax revenues.
Pickering's Lakeshore Neighbo* have over the last eight years
been in a financial position to experience strong assessment
growth providing them with the opportunity to develop their
reserves and reduce the use of debt.
a
2
121
Pickering's Financial Background
Pickering enters the economic recession in a unique
financial position due to upper level government's
indecision and inaction regarding "Provincial &
Federal Pickering Lands."
Pickering's Lakeshore Neighbours (through
assessment growth) have built-up financial strength
to weather the financial challenges of the current
economic climate.
5
i
Pickeringq s Finoncial Background
What our Municipal Neighbours are
doing today - Reviewing Expenditures
and Revenues line by line - Pickering
has been doing fQr several years.
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.
Consumer Price Index or CPI is currently 1.9% and reflects more a
family household.
Municipal inflation is between 3,5 to 4.0% due to the fact municipal
operations are more like a commercial or industrial enterprise. s
3
1 2-2
2009 Budgetary Levy
2009 Projection (Spring 2008) 6.0-7.0%
First Draft (January 2009) 9.8-10.8%
Reduction in Building Permit Rev. & Interest 1.6%
Sub-Total 11.4-12.4%
Staff Budgetary Review and Reductions (6.3)%
Special (One Time) Veridiah Dividend (1.0)%
Additional Draw from Rate Stabilization 1.0
Proposed City Levy 3.59%
7
Budgetary Levy Increases
2001'. to 2009
12.0
10.0
8.0
6.0
4.0
2.0
- _
0.0
N M 'Cr 10 (0 r Co rn
N N N ';N N N N N N
LOVY 8
4
1 23
Where Do Yoyr Tax dollars Go?
city
271%
Region
54.8%
School Boards.
18.1%
9
Total Property fax Bill Summary
What will the residential taxpayer see on their tax bill?
2008 2009 Increase %
City/Region
Sch Brd. $ 3,961.59 $ 4,030.07 $68.48 1.73%
Assess. 280,000 289,400 9,400 3.36%
2009 is a re-assessment year that resulted in assessment shifts:
For Pickering, commercial assessment class increased at a higher
rate then residential causing al tax shift resulting in more tax dollars
now being paid within the commercial class. Therefore, your
residential tax payer will be paying less.
10
5
i
12 4
How Does Pickering Compare
with Other Durham Lakeshore
Munipipalities
Municioality Budgetary Avg. Region Property
Inc.% Assessment Taxes
Pickering 3.59 $289,400 1,092
Ajax 3.00 $289,400 1,125
Whitby 2.90 $289,400 1,246
Oshawa 3.30 $289,400 2,145
Clarington 2.22 $289,400 1,229
11
2009 DRAFT CAPITAL BUDGET
12
6
ti
125
2009 Submitted Capital Budget
S mma
kwj~ n
Mayor, Council & Council Support
Admin. Dept.
Office of Sustainability
Corporate Services $733,990 $(256.128) $477,802
Operations & Emergency Services 10.308.580 643,720 10,952,300
Planning & DevetOpnlBnt 2,945,400 1,831.765 4,777.165
External Agencies - -
Libraries 288.900 459,450 748,350
Rec. Complex Expansion 4,500,000 (4,500, 0
Total $18,776,810 $(1,821,193) $10.955,sn
13
2009 Revised Capital Budget Summary
to Reflect 2009 Funding Announcements
2M t fit?
BUDOU T
Mayor, Council & Council Support
Admin. Dept.
Office of Sustainability
Corporate Services $733,930 $(258.128) $477,802
Operations & Emergency Services - 10,308,560 2,293,720 12,602.300
Planning $ Development 2,945,400 1.831,765 4,777,165
External Agencies - -
Libraries 288.900 459,450 748.350
Rec. Complex Expansion 4,500,000 (4,500,000) o
401 Pedestrian Bridge 10,000,000 10 000 000
T $10.778 M0 x,628,607 $26,605,617
14
7
126
Capital Budget Summary
1995 to 2009
$30,000,000 2009 Grant
Announcement
$25,000,000 Rec. Complex
Expansion
$20,000,000 COMRIF Bridge
Third Ice Pad Projects
$15;000,000
$10,000,000
A A
$5,000,000
1995 1997 1999 !2001 2003 2005 2007 2009
15
City of Dickering
Annual Debt Chajrges 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
"p, Ob 01 OCb ~N
ry0 ry0 ry0 ~O ry0 ry0 ry0 ry0
Prinjeipal & Interest
-2009 & 2010 Capital Budgets
Estimated
10% of the City's tax levy Is being used for debt payments.
For every dollar collected ten cents goes towards 16
Servicing the City's debt.
i
127
External Government Grant
Funding Used for 2009
Capital Budget
Federal Gas Tax Funds $2,062,000
Provincial Grants-Invest in Ontario 2,193,000
Provincial Grants-Ministry Natural Res. 15,000
BCF Grant Funding: (Federal S Provincial) 590,000
Waterfront Toronto 500,000
Move Ontario 300,000
Total $5,660,000
17
2009 Significant Green Proiects
Duffin Heights Storm Water Mgmt Pond $2,000,000
Krosno Creek Storm Water Mgmt Pond 1,750,000
Western Gateway 925,000
Pine Creek, Sanitary Crosr0ng 350,000
Frenchman's Bay Phase 1 330,000
Trees (Replacement) 75,000
Total $5,430,000
The City's net cost is $2.2 Million.
18
9
2009 Capital Budget
Other Major Projects
Toy Ave (Partially budgeted in prior years) $1,050,000
Museum Hotel Restoration Project 895,000
Sideline#4 870,000
Pumper / Rescue Vehicle 850,000
Fire Dispatch Communication Sys. 444,000
Road Grader 300.000
Total $4,409,000
The City's net cost is $2.9 million. 19
2009 Capital Budget Funding Announcements
Additions to the Budgets
• Building Canada Fund Communities Component
Intake Two - One Application
Due date:- May 1, 2009
• Infrastructure Stimulus Fund
Three Applications
Due date;- May 1, 2009
• Enabling Accessibility Fund
One Application
Due date May 8, 2009
20
10
129
Buildings Canada Fund
Communities Component
Intake Two
Project Toy Ave $1,050,000
Cost Sharing:
Federal $350,000
Provincial 350,000 700,000
City Share $350,000
City Share would be funded by Federal Gas Tax and
Reserves (Move Ontario) 21
2009 Funding Announcements
Infrastructure,,Stimulus Funds
Gross Fed/Prov. Municipal
Cost Share Share
1.401 Ped. Bridge $10.0 M $10.0 M $0.0
2.Glenanna Road 850,000 566,950 283,050
3.Whitevale Bridge 800,000 533.600 266.400
Total $11.65 M1 $11.10 M $549,450
Budget report will include recommendations regarding
approvals and debt funding of above projects.
22
11
Financial Sustainability
23
City of Pickering
Multi-Phased Financial Strategic Plan
2010 to 2011 2012 to 2014 2015 to 2018
Econorn
Recession/ Zero Economy begins to Economic growth
growth grow (1 % per year) above 3.0%
Assessment growth
0.5% per year Increases by 0.5% per 3% per year
year
24
12
131
City of Pickering
Multi-Phased Financial Strategic Plan
2010 to 2011 2012 to 2914 2015 to 2018
Service Levels
Maintain Maintain Existing Limited expansion of
Existing Levels services to meet public
Levels demand/need
Staffing
Frozen, except Maintain Limited staff increase
for H+S and LTD Existing Staffing to meet public demand
accommodations Levels for services
05
City of Pickering
Multi-Phased Financial Strateaic Plan
2010 to 2011 2012 to 2014 2015 to 2018
Debt Strategy
Restricted use of debt. City use of debt: is Decrease use of
capped debt. City moves to
Reserve Draws "Pay as you go"
City continues to use
Rate Stabilization Decrease use of Rate City no longer uses
Reserve Stabilization Reserve Rate Stabilization
Reserve
Assessment growth
used to reduce Rate
Stabilization draw and ,
debt 26
13
132
Financial Projections
2009 2010 2011 2012
Submitted Proforma Proforma Proforma
Budget Budget Budget Budget
3.59% 3.5-4.5% 8.0-9.0% 7.5-8.5%
2013 2014 2015 2016
Proforma Proforma Proforma Proforma
Budget Budget Budget Budget
5.5-6.5% 4.5-5.5% 3.0-4.0% 3.0-4.0%
27
Current Budget Reserve Draws
2097 to 2011
$4,5W ,ON
S4,000,000
S3„io0,009
53,000,000
52-W,000
52,000,000
$i,soe,ooe
2007 2008 2009 2010 2011
AMp14 Budget • Fore .
Total draw (2009 & 2010) is $7.1 million
2011 draw has to decrease because there are less 28
funds available.
14
133
Discretionary Reserves &
Reserve Funds 1999 - 2014
25
y 20
e
15
10-
5
0
Kear
29
Financial $ustainability
Future Years
Revenues
Continue to maximize revenue sources.
Expenditures
Minimize expenditures.
Services & Programs
Review service delivery options.
30
15
134
2009 Budwt Outstanding Item
Late Grant Submission:
• Ribfest - Request for $10,000
To be discussed at the General Government - Grants
Section of the budget review
31
Proposed Draft 2010 Budget
Draft Current Budget
• The 2010 draft current budget has been developed
for the various cost centres / departments.
• This budget draft incorporates the principles of the
financial strategic plan outlined earlier in this
presentation.
• The draft 2010 current budget forecast is found on
the summary page for each cost centre (far right
column).
Draft Capital Budget
• Due to the City's financial situation, the capital
budget will be based on a maintenance philosophy.
32
16
1 3 3
2010 Proposed Draft Budget
Timetable
1. Budget package to be mailed out first
week of February, 2010.
2. Budget Committee meetings
proposed for February, 2010
3. Council adopts 2010 Budget prior to
March Break.
33
Conclusion
The City's future looks positive with the
perspective development of Duffin
Heights and Seaton. These projects
will change the City's position among
its Lakeshore Neighbours and within
the GTA.
The challenge to the City is to manage
its finances through the current
economic environment to better
position itself for the future.
34
17