HomeMy WebLinkAboutFI 27/98r
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REPORT TO COUNCIL
FROMs Oillis A, Pulerson DATE: September 8,1998
Director of Finance & Treasurer
REPORT NUMDER: FI 27/98
SUDJECf: 1998 Cumnt and Cepilal Dudgels
RECOMMENDATION:
That Repod FI 27/98 rcgazding the 1998 Current end Cepital Budge�s be rcceived
and thet:
I. In order to efRct a uro (0) per cent incaaze in the Town controlled portion of
lhe 1998 Curtenl Operating Uudgel:
a) The suvings rcsulting from the OMERS rcduction end Ihe OMERS
holiday, lolalling approximately 5582,000, be deleted Gom the
nppropriale expenditures contuined in the 1998 Curtent Opernting
Oudget prcsenteJ to Council in 1une, 1998.
b) The Reskilling und Redeployment roserve balance in the nmount of
583,90Q be laken fnto revenue in thc 1998 Current Opemting budgel
nnd Ihe Reserve be eliminnled .
c) Report TR 25/98 adopled by Council at its meeting of lune 29, 1998
be emended by:
I. in Recommendation I(u) deleting ihe number "S1,900,000" and
subsliluling, Ihcrefore, "SI,698,498" and by deleling the
percenlage "J.1" and substiluling, lherefarc, "0";
If. in Recommendation 2(a) deleting the number "Sl,806,100" nnd
substituljng,thcreforo, "51,926,100"; nnd
2) tlic Dudgct provision in lhc amowit of 5349,1 I I, Account 2822, TmnsCcrs to
'Rescrve funds, be rcduccd by 5175,000.
3) The 1998 Current and Capilal Uudgets be, amended acsordingly to re(lect
Il�e forcgoing nnd lhe changes delniled in ihis report.
4) Thc Dircctor of financc & Trcnsurcr bc authorizcd to make any adjustmcnts
ncccssory to tha omaunt of cupilnl expendilures linanced from current
rcvenues or any olher aceounu in order to ensure a uro impact on the
mtepayers for the Town controllcd podian of the 1998 Budgets.
S) The appropdete staff of thc Town of Pickering be given authorily to give
efCcel thercto.
. ORICINs Dircctor of Finenco end Treosurer.
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Report to CouncU Ft27/98 pate; 3eptember 8,1998
Subjecl: 199B Currcnt and Capite) UudgeW . Page 2
AUTf10RITVs . Tho Municipal Act.
FINANCIAL IMPUCATIONS:
Adoplion oC Ihe Recommendatioro will reduce the tex increase for the Town
controlled partion of lhe 1998 Current (Ope�ating) Budget from 3.l per cent to
uro.
Debt finencing rcmains relatively unchanged at approximutely S2,435,800.
The cos► to ihe ralepayers of Provinciel Downlonding, "Who Does What" end the
implemenintion of the new Curtent Volue Assessment now eppears lo be of(sel by
ihe residenliul education Wc room ofS3,209,000.
The funding of he loss of Puymenis•in-Lieu of taxes of 53,683,000 stiil must be
nddressed.
EXECUTIVE SUMMARY:
The rccommendalions provide for amendmenls lo those passed in June, 1998
which provided for the ndoption of Ihe 1998 Current (Opernling) Dudgel with a
Inx incrense of 3.1 per cenl for Ihe Town's cantrolled ponion cf Ihe budgct anJ
Jcbt linancing in Ihe umount of 52,628,89]. Lost revenuc Gom Payments-in•Lieu
of Taxes in lhe net amounl of S],683,000 wns to hnve been nddressed.
BACKGROUND:
1998 fiudaeta
Since the adoption of the Town controlled portion of the 1998 Current Uudget in
June of 1998, resulting in a J.1 per cent incroase in taxcs, plus an estimnted 9.9
per cent increase in laxes for Provincini Downlonding and debt oF 52.6 million, a
number of events have occurred:
1. Provincial Regulntions on Paymenls•in•Lieu of Tnxes were pussed in 1uly,
1998; .
. 2, lhe Region ndopted lhe tax policics to apply to oll area municipalilles nnd
properlics on August 12, t998;
3. School Donrd Ta�c Rales have been set bytBe Province;
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4. all anolysis af thc abovc hns now becn complcled by slu(f; -
`':� 5. a roview of potentiai sources of funds hes been underteken by staff rcducing
�£,� the tex fncrease for the Town controlled porlion from 3.1 per cent to 0 per
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- ' Subjeec
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to Councll , Ft27l98 ` ' -
:� 1998 Cumnt end Capital Iludgeta
Town'e PoMion
D�tet Se�tember 8, l99!
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The rcduction (n 1he incrcese in iho Town's portion of the Curtent 8udget from
], I per cent to 0 is a result of the following actions:
1. Ihe savings resulting from OMERS rcducing the contribulion mte from 6
�xr cent l0 4 per cent for the first 7 months of 1998 (S 188,000 ) plus the
aJJiliunui savings rcsulling from lhc conlribulion IwliJuy (4 per ccnt to 0)
for Iiw last S months of IS9E (S394,000) can bc possed back lo lhc
Inxpayers to assist in keeping the Tax Rnle down;
2) the Reserve for Reskilling and Itedeployment, originaliy set up in the days
of the Ihen Provincial GovemmenCs Social Contruct, is no longer
required. Thercfore, ihe rcmaining bulence of 583,900 can be broughl into
revenue in 1998 and retumed to tite mtepayers ihrough a reduced TaK
Rate; ' '
3. estimnted assessmant growth of approximately 1.4 per cent (5200,000) in
1997 ihal increases the ussessment base upon which taxes are levied,
thcrcby reducing tlu Tax Rale.
ln addition, the reduction in thc provision to Reserve funds for repayment of
Town funJeJ local improvemcnls in thc nmount of S175,000 sprcads thc
rcpnymcnl ovcr two ycars instcad of onc. 'flic 5175,000 will rcmain as gcncral
revenue to assist in offsclling unanticipatcd expenditures mainly in thc arcas of
slorm damnge rcpairs nnd rclief, tax billing nnd enquiries and tlic undertakins oF
thc Mnsler Dcvclopmcnt and Scrvicing Plan nnd the rcsultnnt Dc�clopment
Chnrges Sludy.
Provtncinl Portlon
That portion of the TOwn's 1998 Currenl DuJgcl, Ihut has been uffected by
Downlaading, Ihe implemenlation of the new Ontario Fui� Assessmcnl System
(OFAS) nnd Ihe loss of thc Paymenis-in•Licu of Taxes is thc "unconlrollabic" or
thc Provinciol portion of Ihc Dudget. (t appears Ihnt all of the effecls of
Downloading nnd implemenlotion of OfAS cnn be offse: on the residential
mlepnyers Inx bill by Ihe rcduction in the educnlion property tax.
The lo�� of rcvcnuc from Payment�-in•Licu of Taxe� previau�ly retatncd by
fhe Towo fn lhe net amounf of S3,683,000 haa bcen provideJ for in Ihe
eatimatea 6ut Ihe lax incrcase b prceenlly bcing nJJreseeJ aeparalely. Thi�
mu�t be reaolveJ before lax bllle can be �ent out Intcr thts monfh.
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a'�.� } 1n.summary, 1998 taxes will not incroase duo to the Town cantrolled portion of
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��y the Dudget, howevor, tnxes may incrcase due to Provinciel nctions. The forogoing
�+�tt nnd the informalion presented separntely rcgarding Paymenls•in-Lieu of Taxes
'� ,�,, ' has been preparcd to the best of our abiliry based upon informntion ovailnble at
� ^ thc lime. The mandate Council gnve the deneml Manoger ond thc Dircctor of
��, f,' ;° finonce & Treasuror to reduce lhe Town's portion to.a uro per cent incrense hos
�'.�,��Y , a; been met. We cannot, howevu, compensute or be rcsponsibie for Provinciel
,�� �,� r. , actions, espectally)hoso rcaulNng in Inrge 6udgetnry incrcnses. Funhermoro, it is
���';,;` � qw)e.' po�ible. that the Town's estimates muy yet prove to be in nced of
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¢;w � �, , ;• Repott �q Cauncil .F(27198 Date: Seplember 8,1996
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� Subject.5` 1998;Cuaent aod Cep11a1 BudQeu . peg� q
adjwtment over the belana of thc year. Should thla bc the ceac, it'will be
'rcpected in the 1999 Dudge6
`� Finelly, even with a 0 per crnt incrcasc, the use of debt, irulead of Capitel from
.- .. Curteni; lxwmea necessary for tho firsl Ume sinco the 1970'a and 1960'a, the last
of which wns poid off in 1995, Whlle it is not advocnted, especially given the
Town's finnncielly advantageous position of having no debt outstanJing, it
Ixcomes necessary under curcent financial conditions.
Prior to Council approving any specitc debt to be issued, the Director of Finance
nnd Trcasurcr will review and make rccommendations on ell projects.
ATTACHMENTS:
Prcpamd By: Approved / Endorsed Dy:
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Oillis A. Paterson �Gillis A. Paterson
Dircctor of Finance & Trcosurcr Dircetor of Finance & Treasurer
dAPrt
Almchmrnts
Copy: Oenerel Manager
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�� °r TOWN OR PICNERING '
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own Controll�d Portlon ot 6udp�t
1998 Net Curtent Operadng Budgel (per June 29th Councii approval) 525,849,858
leas Uncontrolled PoNon:
Provindal Downloading (3,108,919)
Paymenb-in-Lieu of Taxes • bss In revanue (3,883,000)
own Conpolled Portlon of Budget 518,858,739
Oebt Flnandng of Capital ProJecb (2,435,175)
Initlatives to Albw Tawn Controtled Portlon of Budget 0% inerease over 1997:
OMERS Con�ibuUon Reductlon d Holiday (582,000)
Reskilling b Redepbyment Reserve 83,900)
awn ConVollad Portion to be Reised through Tax Levy
(0� tncrease over 1997) (1) 515,758,884
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lUthough lhe dollar Ievy Is 5200,000 hlgher than thal In 1997,
Ihla amount wili be ofhet by assessment grouM.
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`�,�a'� TOWNOFPICKERINO
� 199! BUDGET
1A98 T�x L�vy
' Incre�u
own ConWtled Pordan to be Ralsed Ihrough Tax Levy 315,758,884
Provindal0ovmloading (1) 3,108,918 2096
S1B,B85,583
of Taxes lose ot revenue 3,883,000 24°,6
199BTs::sw 522,� 54�0,593�
O�aet by ResWenGal Educatlon Tax Room af 53,209,000.
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