HomeMy WebLinkAboutFIN 06-22Report to Council
Report Number: FIN 06-22
Date: March 28, 2022
From: Stan Karwowski
Director, Finance & Treasurer
Subject: 2022 Current & Capital Budget
- File: A-2000-001
Recommendation:
1. That Report FIN 06-22 of the Director, Finance & Treasurer be approved;
2. That the following budget recommendations be approved;
(a) That the 2022 Current Budget expenditure for personnel costs, consisting of
salaries and wages (Account 1100), overtime (Account 1200) and employer
contributions (Account 1400), excluding Cost Centres 2712 and 2293, in the
total amount of $65,578,990 be approved; and
i) That the 2022 Current Budget for Cost Centre 2712 (Programs)
expenditure for personnel costs, consisting of salaries and wages
(Account 1100), overtime (Account 1200) and employer contributions
(Account 1400) in the total amount of $1,827,449 be approved; and
(ii) That the 2022 Current Budget for Cost Centre 2293 (Animal Services)
expenditure for personnel costs, consisting of salaries and wages
(Account 1100), overtime (Account 1200) and employer contributions
(Account 1400) in the total amount of $539,202 be approved;
b) That the 2022 General Government Budget for grant expenditures, excluding
the Community Grant to PARA Marine Search & Rescue, in the total amount
of $252,983 be approved;
c) That the 2022 Community Grant to PARA Marine Search & Rescue in the
total amount of $6,000 be approved;
d) That the 2022 Gross Current Budget expenditures for City purposes in the
amount of $61,152,284 (excluding personnel costs and grant expenditures)
less estimated current revenues of $61,094,056 (City revenues of
$50,443,456 plus $8,250,000 for estimated casino gaming revenue,
$1,900,600 for assessment growth plus supplementary taxes of $500,000),
less COVID-19 Recovery Funding of $1,598,618 and net transfer from the
Rate Stabilization Reserve of $1,500,000 for City operations be approved;
e) That the $8,250,000 in estimated casino gaming revenues be transferred to
the established Casino Reserve (7067);
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 2
f) That the Capital from Current expenditure in the amount of $639,000 funded
from property taxes be approved; and
g) That the total final City levy under paragraphs 2. a), b), c), d) and e) above,
plus the hiring of four additional firefighters ($130,000) for the Seaton fire
station that results in a total final levy of $74,183,234 being an increase of
approximately 1.79 percent over the 2021 Budget, be approved;
3. That the 2022 Capital Budget for the City of Pickering with a Gross Expenditure of
$46,584,454 be adopted as presented:
a) That the following capital financing sources be approved as presented in
the 2022 Capital Budget:
Transfer from Current Fund to Capital Fund $639,000
Transfers from Reserves:
- City Share Dev. Charges (7022) 7,983,262
- Rate Stabilization Reserve (7021) 3,888,322
- Vehicle Replacement (7040)
- Major Equipment Reserve (7062)
1,536,000
687,000
- Capital Replacement (7001) 331,000
- Tennis Court Reserve (7061) 135,000
- Rec. Complex Arena Surcharge (7036) 114,000
- Public Art Reserve (7068) 95,000
- Fence Reserve (7057) 180,000
- Dunbarton Pool Surcharge (7032) 20,000
Transfers from Reserve Funds:
- Development Charges (7601 – 7630) 12,815,328
- Federal Gas Tax (7505) 4,460,995
- Parkland (7502) 1,857,942
- Animal Shelter (7706) 1,200,000
- Stormwater Management (7710) 1,170,000
- Third Party Contribution (7501) 397,500
- Roads & Bridges (7709) 106,110
- Seaton Land Group FIA (7713) 46,100
Debt – 5 yr 371,000
Debt – 15 yr 1,200,000
DC Debt – 15 yr 6,004,000
Donations 27,500
Federal Grant – TBD 560,000
Canada Community Revitalization Fund Grant
Museums Assistance Program Grant
90,500
10,000
Ontario Trillium Foundation Grant 386,000
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 3
Transit & Infrastructure Grant 93,890
Inclusive Communities 2022 – 2023 Grant 60,000
Provincial Streamline Development Approval Grant 48,000
Provincial Grant – TBD 40,000
Provincial Budget Grant 31,005
Total $46,584,454
b) That total external debt financed by property taxes and development
charges of $7,575,000 for the projects identified in the 2022 Capital Budget,
and as indicated in this report, in the amount of $371,000 for a period not to
exceed 5 years and $7,204,000 for a period not to exceed 15 years be
approved;
c) That projects identified in the 2022 Capital Budget as being financed
through the issuance of debt be subject to additional, specific approval of
the expenditure and the financing by Council;
d) That Council authorize the creation of the Balloon Payment Reserve;
e) That any debt repayment, interest or financing provisions contained in the
annual Current Operating Budget not used in the current year’s payments
requirements may, at the discretion of the Director, Finance & Treasurer, be
used to apply towards additional principal repayment, outstanding loans,
debt charges or to reduce debt or internal loans not issued or transfer funds
to the balloon payment reserve;
f) That all Capital expenditures or portions thereof approved in the 2022
Capital Budget to be financed through the issuance of debt may, at the
discretion of the Director, Finance & Treasurer, be financed through internal
loans, current or capital funds or a combination thereof;
g) That the Director, Finance & Treasurer be authorized to make draws from
Reserve and Reserve Funds for projects included in the approved Capital
Budget up to the amount approved; and
h) That the Director, Finance & Treasurer be authorized at his discretion to
apply any excess funds obtained through the issuance of debentures as
provided for under Section 413 of the Municipal Act, 2001 as amended;
4. That the Director, Finance & Treasurer be authorized to transfer:
a) Any surplus current operating funds at year-end in excess of approximately
$125,000 be allocated in the following manner: the first $70,000 be
allocated to the Elected Officials Life Insurance Reserve and the remaining
surplus be allocated in the following ratio: 25 percent to the Rate
Stabilization Reserve (7021); 20 percent to the Facilities Reserve (7055); 5
percent to the Artwork Reserve (7066) and 50 percent to the City Share DC
Projects Reserve (7022);
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 4
b) Any surplus funds from the Emergency Operational Capital Needs Account
(2901.0000.0000) to the Facilities Reserve; and
c) The revenue from the sale of used vehicles recorded in account
(1593.0001.0000) to the Vehicle Replacement Reserve (7040);
5. That the Director, Finance & Treasurer be authorized to make any changes or
undertake any actions necessary including: adjusting the budget plan to meet
provincial COVID-19 reporting requirements while maintaining the approved levy;
to accommodate any labour relations settlements including adjusting the
Personnel related accounts and that any revenue shortfall as a result of a
Provincial tax policy change be adjusted through the 2022 final tax rates;
6. That the Director, Finance & Treasurer be authorized to use any under
expenditures from projects funded from Reserves or Reserve Funds to fund over
expenditures for approved projects funded from the same source(s) and any
unfinanced capital be funded from a transfer from reserves or reserve funds;
7. That the Director, Finance & Treasurer be authorized at his discretion to fund
Property Tax Write-offs account (2134.0000.000) that exceed the budget provision
due to assessment appeals that translates into a deficit position for the corporation
and this shortfall be funded from a transfer from the Assessment Appeal Reserve
(7011) and if this reserve is depleted then the shortfall be funded from the Rate
Stabilization Reserve (7021) and that any shortfall from Payment-in-Lieu
Education Share revenue estimates be funded from a transfer from the Rate
Stabilization Reserve (7021);
8. That the Director, Finance & Treasurer be authorized to revise the funding ratio’s
for development charge funded projects where applicable to reflect Council’s
adoption of the 2022 Development Charges Background Study and Community
Benefits Charge Study and where applicable and/or where financial beneficial to
the City, the Treasurer be authorized to change the DC funding of capital projects
for CBC funding that results in the City funding share being decreased;
9. That the Director, Finance & Treasurer be authorized at his discretion to close any
current and completed prior year’s capital expenditure accounts and to first apply
any excess funding from property taxes to any over expenditure in other accounts
and to secondly transfer any remaining excess funding back to the original
sources of funds;
10. That the Director, Finance & Treasurer be authorized to adjust the per kilometer
travel expense reimbursement rate (last increased in 2020) with an effective date
of April 4, 2022, from 0.59 cents per kilometre to 0.61 cents per kilometre for the
first 5,000 kilometres and from 0.53 cents per kilometre to 0.55 cents per kilometre
for travel beyond 5,000 kilometres;
11. That Council approve in accordance with the City's Purchasing Policy Section 09,
that the City Clerk be authorized to sole source services from Datafix (Comprint
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 5
Systems Incorporated), the City’s Voters’ List management provider, in the
amount of $20,300 (net HST), and Vernon Technology Solutions for hardware and
technology requirements in the amount of $18,000 (net HST) for the 2022
Municipal Election;
12. That the Director, Finance & Treasurer be authorized to apply for all grant
applications based on the 2022 Capital & Current Budget and prior year’s capital
projects that have not started and that Council endorse all future applications that
meet senior government grant criteria and that staff report back to Council at the
next possible meeting regarding which grants staff have applied to;
13. That the Director, Finance & Treasurer be authorized at his discretion to close any
capital or consulting account expenditure and corresponding revenue source that
is over three years from the original purchase order date of issuance;
14. That the Director, Finance & Treasurer be authorized at his discretion to refinance
any capital expenditures that failed to meet the Federal Gas Tax reporting criteria
from other sources including transfers of funds from reserves and reserve funds;
15. That the Director, Finance & Treasurer be authorized to:
a) Undertake transactions in the spot or forward (12 months or less) currency
markets in order to effect United States dollar denominated expenditures in
the Current or Capital Budgets;
b) Sign leases or rental agreements (including summer rentals) on the City’s
behalf for the provision of vehicles or equipment required for temporary use
during periods of equipment breakdown or repair or during periods of
increased need (e.g. inclement weather);
c) Restate the 2022 Current Operating, User Fees and Capital Budgets to
reflect: (i) any Council changes made at the March 28 Council meeting; (ii)
any reorganization or personnel account changes (salary, benefits and
overtime), (iii) reclassifications that result from salary increases or
negotiated labour settlements; and
d) To process budget transfers during the fiscal year which do not change the
overall approved property tax levy;
16. That Council waive the Purchasing Policy where the estimated vehicle repair cost
is below $30,000 (HST excluded) for all fleet vehicles and off road vehicle
equipment in 2022;
17. That the Director, Finance & Treasurer be authorized to implement a Property Tax
Deferral Program for the residential property tax class based on the following
principles:
a) Property taxes had to be in good standing on or before January 30, 2022;
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 6
b) Residential property owners that pay their property taxes through their
mortgage payments are not eligible for this program;
c) Property tax payments are deferred for the three remaining installments
(April, June and September or as adjusted by Council) with the interest free
period ending on October 28, 2022; and
d) To be eligible for the property tax deferral program, the applicant has to
demonstrate financial hardship due to the pandemic either through loss of
pay/employment or substantial reduction in hours and earnings through
supporting documentation;
18. That Council approve in accordance with the City's Purchasing Policy sections
09.01 and 09.03 d), whereby the extension or reinstatement of an existing contract
would prove most cost effective or beneficial and that Neptune Security Services
Inc. (Neptune) be retained to provide concrete sidewalk and curb repair services
as a continuation of services provided in 2021 under Tender T2021-3, in order to
complete outstanding work and the value of the work not to exceed $40,000 (Net
HST);
19. That the Director, Finance & Treasurer be authorized at his discretion to draw
from the Winter Control Reserve to fund any Current Budget deficit as a result of
higher than budget winter control costs;
20. That Council approve the continuing engagement of the firm of Watson &
Associates Economists Ltd. to be used for the Five Year Capital & Operating
Financial Plan; for the engagement of the Development Charge Background Study
and new Community Benefit Charge Study, issues related to the City, Seaton
and/or Duffin Heights and any other DC related matters;
21. That Council approve the continuing engagement of the following firms: Nixon
Poole Lackie LLP, Municipal Tax Advisor Group and Municipal Tax Equity
Consultants for any studies related to the reassessment or other property tax
issues and to protect the property tax base by defending assessment appeals
through proactive assessment base management;
22. That Council approve the award of professional services in accordance with the
City's Purchasing Policy Item 10.03 (c) to Public Sector Digest Inc. for the
development and delivery of an Asset Management Strategy as required by
Ontario Regulation 588 (2021) in the amount of a maximum of $63,000 (net HST);
23. That Council approve additional funds in the amount of $50,000 plus HST, to be
funded by a transfer from the Parkland Reserve Fund, to be added to project
C10305.2109 Walkway Reconstruction Design & Approvals, for the walkway
between Elvira Court and Bruce Handscomb Memorial Park, and that an
adjustment to Purchase Order 701009 issued to TRCA for the required amount to
complete the required studies, detailed design, and permitting review and
approval be approved;
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 7
24. That the Director, Finance & Treasurer be authorized to review the City’s Reserve
and Reserve Funds from the perspective of maximizing financial efficiency and
flexibility related to the next term as it pertains to the funding of capital projects
and that the Director be authorized to transfer funds, close reserves and or
rename reserves;
25. That Council approve the annual transfer of funds from the WSIB Reserve when
its year-end balance is greater than $4.0 million, and that these excess funds be
transferred to the WSIB Excess Indemnity Reserve Fund;
26. That the Director, Finance & Treasurer be authorized to initiate any additional
assessment appeals necessary to protect the assessment base of the City;
27. That the Director, Finance & Treasurer be authorized at his discretion to transfer
any green energy rebates and revenue associated with the Claremont solar roof
rental project account (1530.2501.0000) and other incentives and rebates account
(2501.9993.0000) to the Reserve for Sustainable Initiatives;
28. That Council amend the Community Grant policy as follows:
a) That the grant application deadline date for the 2023 Community Grant
Program be October 28, 2022 to give community groups sufficient time to
complete their applications;
29. That any unused funds in excess of $1,000 for accessibility capital projects (6183)
be transferred to the Reserve for Accessibility Initiatives (7053);
30. That Council approve an additional $50,000 for mechanical harvesting of Eurasian
Water-Milfoil weeds in Frenchman’s Bay to the 2022 Current Budget to be funded
from the Rate Stabilization Reserve (7021);
31. That any unspent 2022 Ontario Land Tribunal (OLT) funds budgeted under
General Government consulting account (2126.2392) be transferred to the Tennis
Court Reserve (7061);
32. That Council approve the 2022 Low Income Seniors & Persons with Disabilities
grant amount to be increased from $450 to $525 per household;
33. That Council approve, beginning in 2023, that future increases for the Low Income
Seniors & Persons with Disabilities Grant be increased by the prior year’s budget
levy increase and rounded up to the nearest five dollar increment;
34. That Council pass the attached General Municipal Fees and Charges By-law and
incorporate the user fee schedule into the 2022 Current Budget:
a) That Council approve revising “Schedule B – Fees Payable for Building
Permits” of the Building By-law with the Building Permit fees listed in the
2022 User Fee Schedule;
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 8
35. That Council approve the change in funding for the Whitevale Master Drainage
Plan Implementation – Construction capital project (C10570.1807) as follows:
Funding Source Account
Number
Original Approved
Amount ($)
Revised
Amount ($)
Rate Stabilization 7021 2,119,643 173,904
Reserve Fund – OCIF Grant 7711 880,357 2,826,096
36. That Council approve the cancellation of the following previously approved Capital
projects:
a) DPW Park – Overflow Parking Lot Construction (C10320.2005) - $450,000
b) Pickering Municipal Broadband (C10405.2106) - $200,000
c) Digital Conversion of Analog Cameras (Phase 2) (C10405.2105) - $47,000
37. That Council approve $100,000 for a Facilities Renewal Plan to be added to the
2022 Current Budget, of which $39,140 is to be funded from the DC Studies
Reserve Fund (7601) and $60,860 is to be funded from City Share DC Reserve
(7022);
38. That Council approve an additional $10,000 for the rover pothole detection pilot
project to the 2022 Current Budget to be funded from the Rate Stabilization
Reserve (7021); and
39. That the appropriate City of Pickering officials be authorized take the necessary
actions as indicated in this report.
Executive Summary: This report contains a summary of the 2022 Current and
Capital Budgets and a discussion of the recommendations. Staff have worked hard to
ensure that the 2022 Budget is respectful of each dollar contributed by taxpayers,
reinvesting those revenues back into our infrastructure and the many services the City
provides to our residents. The big differences between municipal government and federal
and provincial governments are the number of revenue streams that fund their budgets
and the impact on residents. Municipal governments have limited revenue, consisting
primarily of property taxes and service fees, such as for recreation, by-law and planning.
The 2022 Budget strikes a balance between providing the level and types of services that
residents expect and ensuring affordability for all residents.
The 2022 Budget builds upon the success of the 2021 Budget and continues to be a
good news story. It keeps property taxes affordable and provides the following benefits to
our residents and community:
• Funding for Digital Readiness Assessment & Service Modernization Strategy.
• Increase in seniors property tax grant from $375 to $525.
• Major 2022 Capital Projects: construction of a new animal shelter ($8.8 million).
Walnut Lane Extension design and construction ($6.6 million), Sandy Beach Road
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 9
reconstruction (5.2 million) and various asphalt resurfacing and road reconstruction
projects ($4.5 million).
• Funding for new Corporate Strategic Plan & Five Year Capital & Operating Plan.
• Dedicated waterfront parking enforcement for the paid waterfront parking program.
• Funding for accessible upgrades to playground equipment in select playgrounds.
• Funding of $50,000 for mechanical harvesting of Eurasian Water-Milfoil weeds in
Frenchman’s Bay.
• An increase of 4 positions for front line firefighting staff (Seaton).
• Funding to introduce three new additional outdoor ice rinks in Pickering.
Financial Implications: The 2022 Current and Capital Budgets, if adopted as
amended, will result in a property tax levy increase of 1.79 percent (City Share Only)
over last year which translates into a 0.547 percent increase in the City’s share of the
total property tax bill.
This increase, when combined with the Region and the School Boards increase, results
in an average increase of 1.98 percent on the total property tax bill.
Discussion: The Recommendations put forth are those necessary to adopt and
provide authority and direction for the 2022 Current and Capital Budgets for the City of
Pickering.
Explanation of Key Recommendations
Creation of a Balloon Payment Reserve – Recommendation 3 d)
When the City uses external debt as a financing source, there have been situations
where the debt repayment schedule has included a large payment at the end of the term
to cover the remaining debt principal. This large payment is referred to as a “balloon
payment”. The advantage of the balloon payment is that the annual principal and interest
payments are lower until the last payment. In 2021, the City made a balloon payment in
the amount of $674,000. In the past, some balloon payments were as large as $1.5
million. In these situations, the City had the option to refinance the balloon payment
amount over additional years and the City exercised this option.
The Treasurer is recommending that the City establish a “Balloon Payment Reserve” for
the specific purpose of accumulating funds to meet the future obligations of these large
payments. Excess interest costs would be transferred to this reserve so that any large
future payments would be funded by this reserve eliminating possible large funding
requirements related to the balloon payments. In addition, by employing this strategy, the
City is creating additional debt capacity in contrast to refinancing the balloon payment.
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 10
Sole Source Services from Datafix (Comprint Systems Incorporated) –
Recommendation 11
Datafix is the City’s Voters’ List Management Provider for municipal elections. Datafix
has an ongoing contract with the City and fees are paid annually to keep the service
active in between elections. In an election year, additional modules become available to
aid the City Clerk in the administration of the municipal election. These modules provide
services to election workers, voters, and candidates, providing for more effective
administration and communication of pertinent election information. The services include
the ability for voters to check if they are on the City’s Voters’ List, edit or add their
information to the List, and find voting locations that are most convenient based on their
geographic location. In addition to voter services, a module specific to the management
of candidates provides the ability to communicate with candidates through the portal and
provide the Voters’ List in an electronic format to be used during their election campaign.
As these services can only be provided by Datafix, as the Voters’ List management
provider, staff are seeking the ability to sole source for these additional services at a cost
of $20,300 (net HST).
The City will be offering internet voting for the entire voting period beginning on October
17 and concluding on October 24, 2022. Additionally, the City will offer a paper ballot
option on Voting Day only using vote tabulators and a live Voters’ List providing a vote
anywhere experience for electors. To give effect to a live Voters’ List, rental laptops are
required to be used by election officials to cross a voter off the Voters’ List in real time.
Laptops are also needed by election officials who are adding or editing an elector’s
information on the Voters’ List at the voter centres. In additional to the laptops needed for
the Voters’ List, laptops and tablets will also be set up in the Voter Assistance Centres to
aid electors who may not have access to the necessary technology or if they require
assistance to vote using internet voting. Vernon Technologies was used in 2018 as the
hardware provider for rented laptops and tablets and provided reliable machines and
service and therefore staff are seeking the ability to sole source for these services again
in 2022 at a cost of $21,000 (net HST).
Council Authority To Apply for All Possible Grants (Current & Capital) –
Recommendation 12
There are basically two types of grants: regular and unpredictable grant opportunities.
Every year, City staff apply for numerous operating grants such as “Cultural Tourism
Strategy” and “Community Museum Operating Grant”. These grants help fund, to some
degree, the operating costs related to their respective current budgets. The
unpredictability of the grant process usually applies to capital grants.
Historically, both senior levels of government (Federal & Provincial) announce capital
grant funding opportunities usually through their budget day announcements, and the
information included in the “Budget Background Papers” is usually sparse regarding
project criteria and application timelines. After a budget day announcement, you could be
waiting several weeks and or months before the formal application process is initiated by
the senior government level.
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 11
Recommendation 12 is seeking Council authority and approval to submit a grant
application, where a senior level of government has announced a grant opportunity with
a short term application deadline or due to a summer recess, thereby making the
scheduling of a Council meeting to seek Council’s endorsement of the project a
significant challenge. Included in the recommendation is the direction that staff report
back to Council at the next available Council meeting regarding the capital and/or current
grant(s) that was applied for.
Property Tax Deferral Process – Recommendation 17
The Director of Finance & Treasurer is seeking Council approval to implement a
residential property tax deferral program based on the principles in the recommendation.
Applicants of the program, will be required to demonstrate and provide supporting
documentation of financial hardship incurred as a result of COVID-19 in one or more
categories: suspension of pay and/or loss of pay. Staff will consider the following
documentation as proof of a decrease of income: Record of Employment or ROE; lay-off
notice; termination letter; letter from employer; and, evidence of receiving benefits under
a senior level of government. It should be noted that if any of the applicant information is
incorrect or inaccurate, the taxpayer will be removed from the program and penalty will
be retroactively applied.
If Council approves the recommendation, then staff will promote the program through
various communication channels such as property tax brochure (final), community page
ad and through the City Website. Staff would also seek Council’s assistance by
referencing this program through their regular communication channels with their
residents.
Single Source Services for Completion of Concrete Sidewalk & Curb Repairs to
Neptune Security Services Inc. – Recommendation 18
City staff issued the tender for concrete sidewalk and curb repair program, on September
24, 2021, with work starting November 1 and continuing to December 20, 2021. The
contractor was able to invoice a total of $199,337.27, or approximately 86 percent of the
tender value. Neptune’s job performance as reviewed by City staff is satisfactory. The
existing Purchase Order 4500000161 for last year’s work is still open, and the contractor
still has restoration work to be completed and therefore they would be able to complete
the work once weather is suitable. This recommendation would complete the 2021
project list for those residents still outstanding, and provide a seamless continuation of
service. There are sufficient funds proposed in the 2022 Current Budget to cover the
expenditure
Walkway Reconstruction Between Elvira Court and Bruce Handscomb Memorial
Park – Recommendation 23
In 2021, contract was awarded to TRCA to complete assessments, studies and detailed
design for the reconstruction of the walkway between Elvira Court and Bruce Handscomb
Memorial Park. Based on findings during the baseline data collection, additional work is
required to further inform the design and achieve all clearances. The work to be
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 12
completed includes an archaeology assessment, an ecology study, DFO/MECP reviews
and consultations, and TRCA permit review and issuance. This work must be completed
prior to completion of the final detailed design. TRCA has indicated that approximately
$41,000 plus HST is required to complete the assignment. Staff is recommending that an
additional $50,000 be approved to the project cost to cover the for mentioned work, any
unforeseen work, and a contingency. It is recommended that the additional amount of
$50,000 be financed through a transfer from the Parkland Reserve Fund, which is the
source of funds used for the initial assignment.
Review and Revise Reserve/Reserve Funds – Recommendation 24
There are currently two initiatives funded in the 2022 Budget related to strategic
initiatives for the “next term of office”. These initiatives are: Corporate Strategic Plan and
Five Year Capital and Operating Plan. Recommendation 25 is connected to these two
initiatives as the City’s reserve and reserve funds are linked to the corporation’s financial
strategy and/or five year plan. It should be noted, that through this financial exercise, the
total dollar value that the City has invested in its reserve/reserve funds will not change,
however, some of the reserves may be collapsed, repurposed or have additional funds
transferred providing greater financial flexibility. To put another way, this financial review
is helping the financial foundation of the corporation for the next term. In the 2022 budget
document, in the General Government Expenditure section (page 145), the City makes
an annual contribution to seven reserves that are related to the recreation area. As part
of this exercise, perhaps it would be better if we have collapsed all seven reserves into
one reserve that would result in having greater flexibility to fund future capital projects.
Additional Funding for the Elimination of the Eurasion Water-Milfoil Weeds –
Recommendation 30
At this time, the operational work plan regarding the removal of the “Weeds” still needs to
be finalized. Recommendation 30 provides additional funding to meet the project’s goal.
In the unlikely situation that the funding is insufficient, the Director Finance & Treasurer
would then fund the additional costs up to $25,000 from the contingency account.
2022 OCIF Allocation – Recommendation 35
The approved 2021 Capital Budget included $3 million in funding for the Whitevale
Master Drainage Plan Implementation - Construction capital project. Financing for this
project was to be $2,119,643 from the Rate Stabilization Reserve and $880,357 in grant
funding from the Ontario Community Infrastructure Fund (OCIF). In late December 2021,
the City was advised of its’ 2022 OCIF allocation in the amount of $1,945,739. This
budget recommendation increases the OCIF funding amount for the Whitevale Master
Drainage Plan Implementation - Construction capital project from $880,357 to
$2,826,096, as the City’s total 2022 OCIF allocation is being applied towards this capital.
project. As a result, less funding from the Rate Stabilization Reserve is require for this
project and will be reduced from $2,229,643 to $173,904.
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 13
Facilities Renewal Plan – Recommendation 37
The City’s 2017 DC Background Study, updated in 2019, included provision for a
Facilities Renewal Study to examine the overall condition of existing building stock. The
intent is to determine which buildings are approaching end of life and to develop strategic
options and recommendations for their eventual renewal, replacement or
decommissioning. Long term planning is critical to ensure that needed space and proper
amenities are available to meet the City’s growing programming and service delivery
needs, and feeds into broader discussions regarding goals set by the City’s Official Plan,
Parks & Recreation Master Plan, Corporate Energy Management Plan, and other
relevant guiding documents. The study must be completed in 2022 as its conclusions will
be essential input for long term capital planning, ultimately informing the City’s new
corporate strategic plan, which are both also intended to be developed over the course of
this year. Approximately 40 percent of the study’s cost is recoverable from development
charges.
A $10,000 Investment for Pothole (AI) Software – Recommendation 38
Recommendation 38 is seeking Council approval to purchase new artificial intelligence
software called Rover, which uses a windshield mounted smartphone camera scan and
detects potholes in real-time. This software will assist City staff in finding potholes and
other road deficiencies automatically as patrol vehicles drive and inspect City roads. Any
detected incidents are then uploaded to the cloud and become accessible immediately,
providing City staff with real-time actionable data on road conditions. The selected
software has built in privacy features that will automatically blur any license plates, faces
and other personal information. There are several Canadian municipalities that are
planning to install the software. The advantage of the software is that it increases the
efficiency of both City staff (by reducing the number of stops during patrols) and road
repairs scheduling.
2022 Current Budget
At the March 17, 2022 Executive (Budget) Committee meeting, Council was presented
with a proposed budget levy increase of 1.79 percent, which was accepted by the
Executive Committee. Based on an average assessment of $612,000, the 1.79 percent
increase will result in an average increase of approximately $36.17 per year or 70 cents
per week for the average single detached dwelling in Pickering. Unlike goods purchased
by consumers where there is a tangible product that is received each time there is a
transaction, many City services provided to residents (such as park or road maintenance)
are not paid for as the services are used or received. For this reason, many residents
may not be aware of the costs associated with the vast array of services offered by the
City. Attachment 5 shows a breakdown of the average daily cost of the City’s municipal
services (based on the average assessed value of a single detached dwelling -
$612,000).
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 14
Tax Increase Summary
The 1.79 percent City share tax increase translates into an increase of 0.547 percent on
the total residential tax bill. The 1.79 percent levy increase compares favourably to other
municipalities, especially given that Pickering has had the lowest tax rate among its
Durham Region Lakeshore neighbours for over nineteen years (1998 up to 2017) and
has experienced relatively low assessment growth for many years. Adding the Region’s
(2.60%) tax increase and Pickering’s (1.79%) and the School Board’s estimated 0
percent increase, the total increase for the average residential ratepayer will be
approximately 1.98 percent.
In 2000, Pickering Council approved a zero percent levy increase and since then, budget
levy increases have ranged from 9.8 to 1.45 percent.
Chart One
Budget Levy Increases 2001 to 2021
For the last few years, the levy increase has been under 3.0 percent. The average
increase for the current term of Council (2018-2022) is 2.18 percent which is below the
average for the last few terms.
The table below provides a summary of the financial impact of the proposed 2022 tax
levy increase based on various assessed values.
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 15
Financial Impact of Budget Increase
City Share Only
Residential Assessment $100,000 $530,000 $612,000 $900,000
Increase (Over 2021) $5.91 $31.32 $36.17 $53.19
Chart Two
Impact of Budget Levy Increases on Total Residential Property Tax Bill
Durham Region 1.437
City .547%
1.98%
Combined Increase
For 2022, Pickering’s levy increase was below Durham Region’s.
No reassessment for 2022
The good news for Pickering residents is that there is no reassessment for 2022. (The
reassessment is being deferred to 2024.) In a two tier municipal government structure,
there is always going to be property tax reassessment shifts among municipalities. With
Pickering’s location bordering Toronto, the real estate property values have historically
increased at a higher rate than those municipalities who are located further away from
Toronto. In the past, an uneven increase in property values has resulted in property tax
shifts among lower tier municipalities. On the front page of the Final Residential Property
Tax Bill, on the bottom left corner, is a schedule entitled “Explanation of Tax changes
from 2020 to 2021”. This schedule includes a line called Tax change due to
Reassessment and for 2022 and this line should be zero for this year.
Risk Analysis
As one looks forward, it is extremely difficult to project future year budget requirements
with a high level of certainty. The most significant uncertainty remains the ongoing
financial impacts from the COVID-19 pandemic. There remains a significant risk that
expenditures and revenues may take a longer period to return to historical levels. In
some cases, COVID-19 related impacts might cause certain services to establish a new
normal resulting in corresponding budget increases in future years.
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 16
At its core, a municipal budget is a projection of inflow and outflows for the year. Due to
the timing of the budget preparation and approval, projections need to be made with less
than complete information. Additionally, these projections need to take into account
future events and circumstances, which are often out of the control of the municipality.
A. There is approximately $2.1 billion in outstanding assessment appeals for the
commercial and industrial property tax class for the City. These are multi-year
appeals that range from 2013 up to 2021. These appeals are mostly for large
commercial and industrial properties with complex valuations that often have
interests from multiple parties. The appeal schedules are set by the Assessment
Review Board (ARB) and the appeals can take years to resolve.
B. Fuel related costs have been extremely volatile over the last few years and
especially over the last few weeks. While average fuel prices decreased slightly in
2020 because of COVID-19, they have increased by approximately 33 percent in
2021 plus we are experiencing further increases for the first two months of the year.
For this reason, the 2022 budget reflects an increase of $250,000 for fuel costs.
C. General inflationary pressures continue to increase as the economy continues to
improve. Consumer prices in Canada have risen at their fastest rate in 18 years with
the Ontario inflation rate reaching 5.9 percent. The end result is that the City’s
“buying power” may become diminished during the year resulting in the need to rely
on reserves to cover higher than expected purchasing costs. To help reduce the
inflation fire, it is expected that the Bank of Canada will begin to hike interest rates.
While hiking interest rates to cool off the economy and reduce inflation is a positive
step, it will result in possible higher borrowing costs for the City.
2022 Challenges and Opportunities
Development Charge and Community Benefit Studies
In the Finance Department 2022 budget, there is funding for $80,000 to complete the
Development Charge (DC) and Community Benefits Charge (CBC) Studies. City staff
have started this process in the fall of 2021. The DC and CBC studies are funded 100
percent from the Development Charges Reserve Fund.
The City has to complete both “Studies” by September 18, 2022 as per the Provincial
legislation. The City needs to complete both “Studies” in order to allow the City to collect
DC fees and to start collecting the new revenue source of CBC fees. The current work
plan strategy is to have Council approve both “Studies” By-law by the end of June 2022.
Members of Council should be aware, that there is a possibility that the DC funding
percentages for the various City Centre project components may either increase or
decrease as a result of the updating of the DC Background Study.
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 17
Seaton Fire Hall Staffing and 2023 PreBudget Approval
The 2022 budget includes the hiring of four additional fire fighters for the Seaton firehall.
As a result, the fire hall staffing level is at 16 positions. The required staffing complement
for this fire hall is 20 positions. Therefore, at the first regular Council meeting in
December 2022, the Fire chief will bring forward a report requesting pre-budget approval
to hire four additional staff with a February 1, 2023 start date.
Elexicon Revenues 2022
Elexicon revenues consists of two components: interest income from promissory notes
and dividends. The City holds $25.069 million of Elexicon promissory notes that earn
4.13 percent. The 2022 budgeted interest income for these promissory notes is
$1,035,350.
The City owns 27.88 percent of Elexicon. Last year, the City received $3,172,744 and
this year the dividend projection is reduced by $546,587 to $2,626,157. The decrease in
Elexicon dividends are being funded by the casino reserve.
2022 User Fees and Charges Schedule
Every year, the City reviews its user fees, mainly for various recreational and cultural
programs, to partially reflect the cost of delivering these programs. Council passed
Resolution # 149/03 confirming the City’s existing user fees through a specific by-law.
This By-law has been updated as part of each year’s budget process. Other fees have
been introduced for virtual programs due to the pandemic.
User Fees and Charges have been established so that those who benefit directly from
programs and services contribute to the cost of the service. The City’s user fees and
charges have been updated for 2022 to reflect such things as inflationary increases,
adjustments to ensure greater cost recovery and updates based on comparable fees in
neighbouring municipalities.
Asset Management
Maintaining public infrastructure in a state of good repair is a significant responsibility
and cost for municipalities. Critical investments in our assets at the right time help
extend the life of the assets and lower the overall cost of ownership while ensuring that
the assets remain current and safe for public use. These assets are used to provide
residents, businesses, employees and visitors access to services including
transportation, recreation, culture and economic development and have a direct link on
the quality of life for Pickering residents.
Every year, the City has been increasing its funding of reserves and reserve funds to
ensure that it has the dollars available or required to purchase the replacement of the
critical and core assets. For 2022, the Draft Budget as submitted to Council includes
additional funding for the roads and bridges reserve fund; major equipment reserve and
vehicle replacement reserve.
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 18
Please find below a quick snapshot of select Durham Lakeshore municipalities
measuring the consumption of their assets. A ratio of over 50 percent means that the
City has consumed more than half of the asset’s life.
Asset Consumption Ratio
2015
(%)
2016
(%)
2017
(%)
2018
(%)
2019
(%)
2020
(%)
Whitby 36.80 37.80 38.40 38.90 39.09 40.56
Clarington 38.00 38.80 40.00 40.69 40.92 41.99
Oshawa 39.10 39.90 40.60 42.45 44.08 44.04
Pickering 50.30 50.60 50..20 50.40 47.86 47.86
The Ministry of Municipal Affairs considers a ratio of 26 to 50 percent moderately new
and 51 to 75 percent to be moderately old. As the above data indicates, the City is
making progress on replacing its old assets. As the above ratio indicates, the City has
consumed less than 50 percent of its assets.
2022 Tax Rates
As has been the case for the last few years, the 2022 Property Tax rates and
corresponding levy By-law will be presented to Council after the City has received the
education tax rates from the Province.
2022 Capital Budget
This year the draft Capital Budget is $46.6 million. Major capital projects in 2022 include
the construction of a new animal shelter ($8.8 million), Walnut Lane Extension design
and construction (6.6 million), Sandy Beach Road reconstruction (5.2 million) and various
asphalt resurfacing and road reconstruction projects (4.5 million).
Debt Capacity and Annual Repayment Limit (ARL)
Managing the debt capacity or dollar borrowing amount is important to the City due to the
financial limitations imposed by the Province through the Annual Repayment Limit or
(ARL). (The Municipal Act regulation permits a maximum of 25 percent of net operating
revenues to be used to fund principal and interest charges for debt. A municipality can
only exceed the 25 percent limit through prior approval from the Ontario Land Tribunal.
For Pickering, the net operating revenues consists of the following major items:
• property tax revenue
• user fees & charges
• fines, penalties & interest on taxes
• license fees, permit fees & rents
• gaming & casino revenues
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 19
As stated above, every year the budget levy increases, the City’s annual repayment limit
increases that in-turn results in a higher debt borrowing capacity or dollar amount. The
City’s annual repayment limit for 2022, based on the prescribed calculation and using the
City’s 2020 Financial Information Return (FIR) was $23.032 million. The proposed 2022
budgeted annual debt payments (interest and principal) is $6.035 million and therefore,
the City had $17 million in unused debt payment capacity before hitting the 25 percent
wall.
Since last October, there have been several factors that may have a negative impact on
the City’s debt capacity which are: inflation, interest rates, and supply chain challenges.
It’s no secret that the day-to-day living expenses have increased over the last year.
Ontario inflation is running at 5.9 percent and these higher costs will probably be
reflected in higher future capital project costs for the City. The City’s ARL is not directly
linked to inflation. If future year’s debt financed capital projects have higher costs, the
City has basically three options: it can accept a higher ARL percentage or it has to defer
or reduce the size of debt financed capital projects.
Please find below a historical comparison of the City’s annual debt cost (that includes
principal and interest) in relation to the ARL. The source of the data was the annual FIR,
Schedule 81 for each respective year. The 2021 financial information is currently not
available due to the fact the City is still processing its 2021 closing adjustments. As the
chart below indicates, the City has been operating slightly below or around the 5 percent
level of its debt limit and or debt capacity.
Chart Three
City’s Debt Capacity Measured Against the ARL Limit
0.00%
2.50%
5.00%
7.50%
10.00%
12.50%
15.00%
17.50%
20.00%
22.50%
25.00%
27.50%
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
ARL City %Projection City Target
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 20
It is estimated that for this year, the financial data should reflect an upward direction of
the line slope due to Council’s approval of the following two major debt financed projects:
Chestnut Hill Developments Recreation Complex Renovation and Seaton Fire Hall.
Debt Payments and Debt Financing of Capital Projects
The 2022 Current Budget includes $4.0 million of taxpayer funded debt charges (interest
and principal), excluding the City Centre project. The taxpayer funded debt charges
represent 5.2 percent of the 2022 property taxes levied. In other words, for every dollar
collected 5 cents is applied to debt charges.
A high level summary of the City’s debt, excluding the City Centre project is presented
below:
Debt Summary Millions ($)
2021 Debt
External Debt Commitments $27.8
External DC Debt 15.6
Total 2021 Commitments $43.4
Add: 2022 Debt Commitments
External Debt $7.6
Total Debt Commitments $51.0
The 2022 debt financed Capital Projects, are listed below.
External Debt and Internal Financing of Capital Projects
City of Pickering
5 and 15 Year Debt Financing
2022 Capital Budget
Capital Project Code Debt - 5 Years ($) Description
5340.2215 $371,000 Fire Station #2 Interior Renovation
Total Five Year Debt $371,000
Capital Project Code Debt - 15 Years
($)
Description
5340.2209 $1,200,000 Fire Pumper Rescue Replacement
Total Fifteen Year Debt $1,200,000
Capital Project Code DC Debt - 15
Years ($)
Description
5219.2201 $6,004,000 Animal Shelter Construction
Total Fifteen Year - DC Debt $6,004,000
Total Debt Financed Projects $7,575,000
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 21
Borrowing or debt financing should not be viewed as a negative. The proper use of debt
is an essential component of prudent fiscal strategy. The use of debt promotes
intergenerational equity. By borrowing, Pickering can distribute the cost of the asset over
the lifetime of the asset.
2023 – 2026 Capital Forecasts
The City’s 2023 – 2026 Capital Forecast outlines the City’s current financial plan.
Provided below is a breakdown of the various funding sources related to the capital
forecast.
Draft 2022 Capital Budget and 2023-2026 Capital Forecast ($M)
2022
Budget
Amount
2023-2026
Planned
Amount
Total
%
Total
Funding
Development Charges $12.8 $19.3 $32.1 6.6
Development Charges Debt 6.0 197.5 203.5 41.8
Debenture Financing 1.6 112.0 113.6 23.4
Other 1.4 2.6 4.0 .8
Reserve & Reserve Funds 19.7 81.5 101.2 20.8
Federal Gas Tax 4.5 20.9 25.4 5.2
Capital from Taxation .6 6.0 6.6 1.4
$46.6 $439.8 $486.4 100%
As shown above, the City is relying on a substantial level of development charge funding
and debt financing for the City’s future capital needs. The debt amount can change over
time with increasing contributions to reserves.
City staff are proposing to re-start the corporate strategic plan during the last quarter of
this year with the goal of having the plan commence early in the new term to help guide
the new Council’s priorities and a roadmap for Council decision making. As part of the
process, a five year capital and operating plan will also be developed to ensure that the
Council priorities are linked to a financial strategy. The end result may be a shift or
revision to the above capital forecast.
2023 Draft Budget Documents
For the 2021 Budget, staff introduced the “Budget Summary Book” to provide Council a
budget document that provides more information in contrast to “data”. The 2022 budget
document reflects this same strategy. For the 2023 budget, the goal is to continue to
move in this direction of providing information and explanations for budget changes
through revised budget documents.
Report FIN 06-22 March 28, 2022
Subject: 2022 Current and Capital Budget Page 22
Attachments:
1.By-law to Confirm General Fees and Charges 2022
2.Budget Presentation, March 17, 2022
3.Average Daily Cost of Municipal Services
Prepared By: Approved/Endorsed By:
James Halsall Stan Karwowski
Division Head, Finance Director, Finance & Treasurer
Recommended for the consideration
of Pickering City Council
Marisa Carpino, M.A.
Chief Administrative Officer
Original Signed By: Original Signed By:
Original Signed By:
Attachment #1 to Rpt #FIN 06-22
The Corporation of the City of Pickering
By-law No. XXXX/21
Being a by-law to amend By-law No. 6191/03
to confirm General Municipal Fees
W hereas the Council of the Corporation of the City of Pickering enacted By-law 6191/03,
as amended, on October 14, 2003 to confirm general municipal fees.
Whereas Schedule “I” to By-law 6191/03 was updated and replaced under By-law,
6338/04, By-law 6519/05, By-law 6652/06, By-law 6677/06, By-law 6748/07 By-law
6857/08, By-law 6951/09, By-law 7032/10, By-law 7119/11, By-law 7194/12, By-law
7268/13, By-law 7339/14, By-law 7411/15, By-law 7478/16, By-law 7542/17, By-law
7605/18; By-law 7679/19; By-law 7740-20 and 7823/21;
Now therefore the Council of the Corporation of the City of Pickering hereby enacts as
follows:
1.Schedule “I” to By-law Number 6191/03, as amended, is hereby deleted and
Schedule “I” attached hereto is substituted therefore.
By-law passed this 28th day of March, 2022.
__________________________________
David Ryan, Mayor
__________________________________
Susan Cassel, City Clerk
At
t
a
c
h
m
e
n
t
#
2
t
o
R
p
t
#
F
I
N
0
6
-
2
2
Average Daily Cost of Municipal Services: $5.64*
23.56%
Fire Services
$1.33 20.25%
Roads
$1.14 7.62%
Library
$0.43 8.13%
Parks &
Property
$0.46
5.32%
Debt Services
$0.30 5.90%
Community
& Rec.
Centres
$0.33 5.57%
Corporate
Services
$0.31 4.24%
Culture &
Recreation -
Other
$0.24
0.05%
City
Development
$0.00 1.47%
Mayor,
Council &
Council
Support
$0.08 1.35%
Streetlights
$0.08 1.31%
Recreation
Programs
$0.07
0.68% Animal
Services
$0.04 0.60%
Customer
Care
$0.03 0.92%
Museum
$0.05 0.53%
Crossing
Guards
$0.03
0.93% Arenas $0.05 0.32%
Community
Grants
$0.02 0.62%
By-law
Services
$0.03 10.63% All
Other Areas
$0.60
* Calculated based on the average assesed value of $612,000 for a residential property.
Attachment #3 to Rpt #FIN 06-22