2014 Budget Budget Sub-Committee #1 October 8 th , 2013 Building - - PowerPoint PPT Presentation

Building Markham’s Future Together Journey to Excellence

2014 Budget

Budget Sub-Committee #1 October 8th, 2013

Markham Pan Am Centre

Building Markham’s Future Together Journey to Excellence

Slide 2

• 2014 Budget Process and Communication Plan
• Economic Trends and Fiscal Scan
• 2014 Budget Overview
• Operating
• Capital
• Planning & Design
• Engineering
• Building
• Waterworks
• 2014 Budget Summary
• 2014 Capital Budget Highlights
• Next Steps

Agenda

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Fiscal Scan Community Engagement Business Plans Reserve Studies Integrated Leisure Master Plan

Development Charge Background Study Diversity Action Plan

Sustainability Plan Councillor Requests Official Plan

2014 Budget Process

Staff Review

• Preliminary Budget
• Staff, Commissioner and CAO Review

Deliberation Process

• Budget Sub-Committee meetings
• Budget Consultation meeting

Council Decision

• General Committee
• Council Decision

Slide 3

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2014 Budget Process (cont’d)

• Each Business Unit identified proposed objectives for the year ahead, in

alignment with Council’s priorities and the City’s corporate goals, and developed its proposed operating budget and capital budget within the available funding envelope

• In 2014 Markham introduced “Capacity Budgeting” , setting realistic operating

(revenue and expense ) and capital budgets that are achievable within underlying operational capabilities or capacity constraints (defined by skill set and available time)

Slide 4

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2014 Budget Process (cont’d)

Step 1: Identify Business as Usual (“BAU”) versus Strategic Projects/ Initiatives (“SPs”)

a) BAU - a set of services, activities or processes that are routine and re-occurring in nature, with an established set of formal or informal expectations, that are necessary to deliver a product and/ or service that is considered regular, core, base business type work b) SP - projects that do not have one operational goal but focus on the organisations overall direction and address specific strategic goals. These projects are considered to be of significant importance to the Mayor and Council and are typically unique (transformational, major impact), complex (high risk) and involve large organizational change

Step 2: Identify timelines within which BAU and SPs must be delivered Step 3: Identify available capacity, primary drivers of which are time available and skill set, to meet BAU Step 4: Identify excess capacity to address SPs

Slide 5

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Seven Budget Sub-Committee meetings are scheduled in October on the 8th, 11th, 15th, 18th, 23rd, 25th and 28th

• Public Budget Consultation Meeting is scheduled to take place on:
• October 24th from 7 p.m. to 9 p.m. at the Civic Centre

Once the Budget Sub-Committee and Budget Consultation meetings are complete, the following process will take place to finalize the budget:

• December 2nd, 2013

General Committee - recommends budget to Council

• December 9th, 2013

Council Decision

• December 10th, 2013

Press Conference

2014 Budget Process (cont’d)

Slide 6

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2014 Budget Process (cont’d)

Communication Plan

Slide 7

• All Budget Sub-committee meetings are open to public and audio streamed through

Markham’s website. Notices of the Budget Sub-Committee meetings are advertised in the local newspapers, through social media and on Markham’s webpage.

• This year, the City is taking an additional innovative step to engage Markham residents in

the budget process, through the Citizen Budget Tool.

• This online tool will help residents better understand how their tax dollars are used for

Markham’s programs and services. It also provides an opportunity to express their views

• n how residential tax dollars are used.

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2014 Proposed Budget

Slide 8

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2014 Budget

Capital $120.46M Waterworks Operating $187.36M

Building Services Planning & Design Engineering

Slide 9

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Inflation

• 1.1% CPI, Canada, All Items (Aug. 2012 to Aug. 2013)
• 1.3% CPI, Ontario, All Items (Aug. 2012 to Aug. 2013)
• 1.6% CPI, Toronto, All Items (Aug. 2012 to Aug. 2013)
• 2.4% Energy Index (Aug. 2012 to Aug. 2013)
• 0.9% Construction Index (Jun. 2012 to Jun. 2013)
• 2.02% average CUPE settlements (Markham primary comparators)
• 2.93% average Fire settlements
• The Ontario forecast for real GDP (Gross Domestic Product): 1.8% in 2013 and 2.5% in 2014, which are below the

historical average of 2.6% (1) Stock market indexes

• TSX – 6.7% increase (Sept. 2012 to Sept. 2013)
• Dow – 13.8% increase (Sept. 2012 to Sept. 2013)

Housing

• Markham housing sales are down 0.9% and the average price is up 3.8% to $629,211
• GTA housing sales are expected to decline by 4.1% in 2013 and prices are expected to increase by 1.4%
• GTA housing sales for 2014 are expected to increase by 5.9% with prices increasing by 1.6%(2)

Economic Trends

Slide 10

Sources: (1) TD Economics – “Provincial Economic Forecast” July 10, 2013 (2) Canadian Mortgage and Housing Corporation – “Housing Market Outlook” GTA – Spring 2013 release

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• Unemployment rate in Ontario is 7.9% for August 2013 as compared to 8.0% in August 2012
• The Bank of Canada is not expected to raise interest rates until late 2014. The current Bank of Canada interest rate

is 1%. (1)

• The pace of Canadian consumer borrowing has moderated in 2013, and the household debt-to-income ratio has

stabilized over the past year at a very high level. (1)

• Global growth is expected to be 2.9% in 2013 and 3.6% in 2014 . Europe is projected to see negative growth

(contraction) of (0.5%) in 2013. The U.S. is forecasted to see 1.9% growth in 2013 with 2014-2017 expected to be 2.8% per year. The above potential pace of growth will lower the current U.S. unemployment rate of 7.6% to an average of 5.7% by 2017. (1) (2)

• China’s forecast for growth is 7.6% in 2013 which is 0.3 percentage points lower than previous forecasts. (2)
• While the global market and Canada’s economic growth has started off slow in 2013, momentum will pick up in the

second half of this year, as the global economy regains confidence from a stronger US recovery (2)

Economic Trends (cont’d)

Slide 11 Sources: (1) TD Economics – “Long Term Economic Forecast” June 18, 2013 (2) TD Economics – “Economic & Financial Outlook: A 10,000 Foot View” – June 26, 2013

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1.20% 1.20% 0.80% 0.80% 0.50% 1.20% 1.00%0.40% 0.70% 1.20% 1.30% 1.10% 2.90% 1.70%

• 0.20%
• 0.50%
• 1.70%

2.00% 0.30%

• 1.90%

1.00% 4.10% 5.30% 2.40% 2.40% 2.10% 1.10% 0.90% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%

• 5.00%

0.00% 5.00% 10.00% Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Canada CPI Energy Construction Wage Settlements

Economic Trends

Indexes Impacting Markham

Slide 12

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Personnel Costs Growth Municipal Service Contracts Infrastructure Provincial Legislation

Slide 13

Fiscal Scan

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Personnel Costs

• Canadian Union of Public Employees (CUPE) collective agreement

expired on March 31, 2013

• Markham Professional Fire Fighters Association (MPFFA) collective

agreement expired on December 31, 2012

• Full-time, part-time grid movements
• Firefighter grid progression and service pay
• New staffing requests
• Includes benefit costs such as health, dental, paramedical and other

costs Net Total: $2.63M

Fiscal Scan

Slide 14

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Growth

• Personnel ramp-up related to new facilities:
• Cornell Fire Station
• 2nd crew at the Cornell Fire Station
• Southeast Community Centre
• Markham Pan Am Centre
• Regional Sports Park
• Operations Works Yard
• Milliken Mills Library Expansion
• Markham Centre Fire Station (new ramp-up)

Fiscal Scan (cont’d)

Slide 15

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Growth

(cont’d)

• Increase in costs related to:
• 3,200 tonnes or 1.8% increase in tonnage – waste collection
• 30 additional kms of road – maintenance, street & catchbasin

cleaning

• 800 new streetlights to power, maintain & repair
• 12 additional hectares of parks – park maintenance
• 30 hectares of park maintenance related to window streets, valleys

& natural areas and stormwater management ponds

• 5,000 litres increase for fleet gasoline volume and 25,000 litres in

diesel volume

• Winter maintenance
• Contribution to capital program
• Ramp-up for Operations Works Yard

Total: $3.12M

Fiscal Scan (cont’d)

Slide 16

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Municipal Service Contracts

Contract Escalations

• Winter maintenance contract increases and phase-in
• Waste collection contract (CPI and fuel cost increases)
• Fuel cost increase (City-owned vehicles)
• Utility rate increases (facility and streetlight hydro, gas and water)
• Contract escalations

Sub-total: $1.28M Service Level Enhancements

• Winter Maintenance – Local road service level for rear lanes
• Integrity Commissioner
• Animal Services
• Regional Councillor newsletters

Sub-total: $0.24M

Fiscal Scan (cont’d)

Slide 17

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Municipal Service Contracts

Cost Efficiencies (E3)

• School crossing guard contract ($0.12M)
• Energy savings ($0.10M)
• VOIP contract award (elimination of redundant phone lines)

($0.06M)

• Waste Calendar in Markham Life ($0.03M)

Sub-total: ($0.31M) Other Adjustments

• Support services to Building, Planning & Design, Engineering &

Waterworks ($0.25M)

• Roads Asphalt Repairs ($0.17M)
• Other $0.02M

Sub-total: ($0.40M) Total: $0.81M

Fiscal Scan (cont’d)

Slide 18

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• The Life Cycle and Water & Wastewater reserve studies are updated annually

to address the funding requirements with known inflows for future replacements of existing assets for the next 25 years

• There are infrastructure pressures identified in the following areas:

Life Cycle Reserve Study

• Replacements of future assets
• Stormwater management program

Water and Wastewater Reserve Study

• Projected increases from the Region of York
• Sustainability of future water rates

Development Charges Background Study

• Non-growth portion of City wide hard and soft services

Other potential unfunded Capital Projects

Fiscal Scan (cont’d)

Slide 19

Infrastructure

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New Official Plan Municipal Official Plans must be brought into conformity with Provincial Plans and the Region of York Official Plan. It is anticipated that work towards a new Official Plan will be completed in 2014 Accessibility Council approved the Accessible Customer Service Policy effective January 1, 2010 to meet the legislated requirements of the Accessible Customer Service Standard, under the Accessibility for Ontarians with Disabilities Act. The goal of the Act is to make Ontario fully accessible by 2025 and requires Markham to identify, prevent & remove barriers for people with disabilities. The next phase is compliance with the Integrated Accessibility Regulation under the AODA.

Provincial Legislation

Fiscal Scan (cont’d)

Slide 20

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Bill 168 - Occupational Health and Safety Amendment Act (Violence and Harassment in the Workplace) 2009 An amendment to the Ontario Occupational Health and Safety Act came into effect on June 15, 2010. The amendment strengthens the protection of workers against violence and harassment in the workplace. All existing full-time staff have attended training and all new regular full-time staff are required to attend an orientation facilitated by the Human Resources Department which includes health and safety training (inclusive of the Respect in the Workplace policy).

Provincial Legislation

(cont’d)

Fiscal Scan (cont’d)

Slide 21

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Personnel Costs Growth Municipal Service Contracts Infrastructure Provincial Legislation

Slide 22

Operating Impact of Budget Pressures $6.56M

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Operating $187.36M

2014 Operating Budget

Slide 23

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2013 Approved Operating Budget

($ in Millions) (Excl. Planning & Design, Engineering, Building Standards and Waterworks)

Slide 24

2013 Approved Budget % of Total Budget Revenues Tax Revenues

126.0 69.7%

User Fees and Service Charges

15.4 8.5%

Income from Investments

10.4 5.7%

Interest and Dividend Income - PowerStream/MEC/MDEI

8.8 4.9%

Rentals, Licenses and Permits

8.4 4.6%

Tax Interest and Penalties

3.4 1.9%

Grant and Subsidy Revenues

1.5 0.8%

Other Revenues

7.1 3.9%

Total Revenues

180.8 100.0%

Expenditures Salaries and Benefits

107.6 59.5%

Transfer to Reserves

18.3 10.1%

Purchased Services

16.1 8.9%

Waste Management

8.4 4.6%

Transfer to Reserves - PowerStream/MEC/MDEI

7.8 4.3%

Winter Maintenance

6.6 3.7%

Materials and Supplies

5.8 3.2%

Utilities

5.2 2.9%

Insurance

2.3 1.3%

Other Expenditures

2.7 1.5%

Total Expenditures

180.8 100.0%

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2014 Preliminary Operating Budget Summary

($ in Millions) (Excl. Planning & Design, Engineering, Building Standards and Waterworks)

Slide 25 2013 $ 2014 $ Increase/ (Decrease) $ Tax Rate Increase Revenues 180.80 183.48 2.68 Expenditures Personnel 107.57 111.65 4.08 Non-Personnel 73.23 75.71 2.48 Total Expenditures 180.80 187.36 6.56 Net Shortfall

• 3.88

3.88 3.2% E3 initiatives (requires Council approval)

• (0.98)

(0.98) Subtotal

• 2.90

2.90 2.4% Infrastructure Surcharge

• 0.61

0.61 0.5% Net Shortfall

• 3.51

3.51 2.9%

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2014 Preliminary Operating Budget - Revenues

($ in Millions)

(Excl. Planning & Design, Engineering, Building Standards and Waterworks)

Slide 26

2013 $ 2014 $ Increase/ (Decrease) $ Total Revenues 180.80 183.48 2.68 Assessment growth (2.5%) 3.02 CPI adjustment for Recreation user and program fees 0.27 User fee volume adjustments 0.14 CPI adjustment for user and program fees 0.04 Recreation revenues (net $0.42M) (0.79) Total Revenue Increase 2.68

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2014 Preliminary Operating Budget - Expenditures

($ in Millions)

(Excl. Planning & Design, Engineering, Building Standards and Waterworks)

Slide 27 Personnel Costs 2.63 Existing staff / new staffing requests 2.63 Growth 3.12 Future staff ramp-up related to new facilities 1.45 0.86 Transfer to capital 0.50 Capital induced operating costs 0.21 Non-personnel ramp-up for a future operations works yard 0.10 Municipal Service Contracts 0.81 Utility price escalation 0.85 0.24 Winter maintenance requirement and phase-in 0.20 Fuel cost increase (waste contract fuel escalation and price adjustment for City fleet ) 0.13 Other contract escalations 0.10 Cost efficiencies (E3) (energy savings, school crossing guards, VOIP contract award and waste calendar) (0.31) Support services for Building, Engineering, Planning & Design, Waterworks (0.25) Roads - asphalt repairs contract award (0.17) Other 0.02 Total Expenditures 6.56 Increase/ (Decrease) $ Growth (roads, waste, parks, streetlights and winter maintenance) Service level enhancements

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2014 Preliminary Staffing Requests Tax Funded Part-time Positions

Slide 28

Business Unit Position Title

• No. of

Positions Salary (incl. Benefits) $

• 1. New Position Requests - Part-Time

Asset Management Civic Centre Facility Operator 40,000 Library Pages - Additional Hours (1 branch) 9,866

Total Part-Time 49,866

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2014 Preliminary Staffing Requests Non-Tax Funded Positions

Slide 29

Business Unit Position Title Funding Source Grade

• No. of

Positions Salary (incl. Benefits) Expense/ Revenue Offsets Net Non-Tax Funded Impact $ $ $

• 1. New Position Requests

ITS Application Support Specialist Building Fees ITSD 1 104,329 104,329 Planning & Urban Design Growth Centre Manager Development Charges (ASDC) NU11 1 140,773 140,773 Asset Management Senior Project Engineer (Stormwater) SWM Rate NU10 1 119,334 119,334

Total New Position Requests 3 364,436 0 364,436

• 2. Conversions of Full-Time Contract or Part-Time to Full-Time

Planning & Urban Design Urban Designer, Policy and Growth 3 year developer contribution funded from future ASDC, then development fees IU8 1 89,098 89,098 Planning & Urban Design Project Coordinator, Policy and Growth 3 year developer contribution funded from future ASDC, then development fees NU10 1 119,334 119,334 Asset Management Environmental Engineer Development Fees NU10 1 119,334 119,334 Asset Management Environmental Technician Development Fees IU7 1 80,848 80,848

Total Conversions to full-time 4 408,614 0 408,614

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2014 Preliminary Staffing Requests Non-Tax Funded Positions

Slide 30

Business Unit Position Title Funding Source Grade

• No. of

Positions Salary (incl. Benefits) Expense/ Revenue Offsets Net Non-Tax Funded Impact $ $ $

• 3. New Position Requests - Part-Time or Contract

Building Standards Project Manager - 2 year contract Building Fees 1 100,000 100,000

Total New Position Requests - Part-Time or Contract 1 100,000 0 100,000 TOTAL NON-TAX FUNDED POSITIONS 8 873,050 0 873,050

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2014 Preliminary Staffing Requests Ramp-Up Funded Positions

Slide 31

Business Unit Position Title Grade

• No. of

Positions Salary (incl. Benefits) $

• 1. New Position Requests

Library Manager - Southeast Markham Library NU10 1 119,334 Recreation Services Manager - Pan Am Centre NU11 1 140,773 Recreation Services Program Supervisor - Pan Am Centre NU7 1 88,072 Recreation Services Pool Supervisor - Pan Am Centre IU7 1 80,848 Recreation Services Customer Service Representative - Pan Am Centre IU5 1 66,026 Recreation Services Facility Supervisor - Pan Am Centre NU7 1 88,072 Recreation Services Facility Operator III - Pan Am Centre OU5 1 70,755 Recreation Services Facility Operator II - Pan Am Centre OU4 3 202,321 Recreation Services Facility Operator I - Pan Am Centre OU3 2 128,622 Recreation Services Fitness Counsellor IU6 1 72,934

Total New Position Requests 13 1,057,757

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Excellence through Efficiency & Effectiveness (E3)

• As early as 2007, Markham saw signs the economy was faltering. By 2008,

it was clear that the City needed to take action to reduce the impact of the impending recession on residents

• During the 2008 budget process, Council made it clear that it was prudent

to develop and implement a sustainable process to deliver the lowest possible tax increases in future years

• In an effort to achieve this vision, the project “Excellence through Efficiency

& Effectiveness” (E3) was launched in March 2008 and endorsed by Council in June 2008

• The E3 project involves a corporate wide business transformation through

the review of services to find as many efficiencies as possible, maximize revenue opportunities and minimize tax rate increases

Slide 32

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• Over the past five years (2009 – 2013), $14M of revenue enhancements and

expenditure reductions have been implemented to offset potential tax increases

• Otherwise a requirement for a 14% increase in taxes - an increase that would have

been paid out year after year by Markham taxpayers

• In addition, other initiatives were implemented that strengthened the organization’s

ability to serve customers, support staff engagement, avoid future costs, and improve quality of services

Excellence through Efficiency & Effectiveness (E3)

($ in Millions)

Slide 33

2009 2010 2011 2012 2013 2014 Total $ $ $ $ $ $ $ Expenditure reductions 2.9 3.1 0.3 1.0 0.7 0.5 8.5 Revenue enhancements 1.6 1.0 1.5 0.6 1.3 0.8 6.8 Total 4.5 4.1 1.8 1.6 2.0 1.3 15.3

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2014 E3 Initiatives

($ in Millions)

Slide 34 Item Description $ Tax Rate Impact Net shortfall from Operating 3.88 3.2% Requires Council approval

• A. New fees

Mortgage administrative fees 9,700 accounts x $8 x 2 times/year

(0.15)

• 0.1%

Paid parking exemptions no exemptions effective March 2014, $9 x 15,000

(0.11)

• 0.1%

Overdue notice fees 8,000 accounts x $5 x 2 times/year

(0.08)

• 0.1%

Property service fees 1st inspection $60, 2nd inspection $90, 3rd inspection $120

(0.05) 0.0%

Waste bin replacement $5 green bin, $2 blue bin and $2 kitchen catcher

(0.03) 0.0%

Event application Application fee $50 x 250 events Road closures $20 x 25 events Equipment use (Great Hall) $50 x 25 events Civic Centre parking lot $500 x 4 events

(0.02) 0.0%

Other licenses and fees License wildlife operators and food trucks, noise exemption fee and fence exemption fee

(0.01) 0.0%

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2014 E3 Initiatives

($ in Millions)

Slide 35

Item Description $ Tax Rate Impact

• B. Increase in existing fees

Street banner installation

Increase from $100 to $250 (volume 70/year) (cost recovery)

(0.02) 0.0% Film permits

Increase from $280 to $750 (volume 18/year for Legislative and Operations)

(0.02) 0.0% User and license fees

Incremental increase of 3.4% over CPI (total 5% increase) excludes Recreation, Professional Entertainment Series ticket sales and ticket handling charges

(0.14)

• 0.1%

Parking fees at Milne park

Increase from $5 to $10 (volume 16,000/year)

(0.08)

• 0.1%

Sportsfield rental

Increase average rate of $4.80/hour to $5.40/hour (volume 68,000 hours/year)

(0.04) 0.0%

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2014 E3 Initiatives

($ in Millions)

Slide 36 Item Description $ Tax Rate Impact

• C. Reduction in expenditures

E-newsletters for Ward Councillors (0.04) 0.0% LED streetlights

Total annualized savings of $960k 2014: 80% of savings $768k (pro-rated) Proposed allocation: 75% of savings to Reserve and 25% to Operating

(0.19)

• 0.2%

Sub-total (0.98) Net Shortfall from Operating 2.90 2.4%

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2014 Capital Budget

Capital $120.46M

Slide 37

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2014 Capital Budget

• Establish capital project types with timelines for initiation and completion
• All capital projects must be initiated in the year of funding approval
• Project completion rates will be measured based on the timelines established for

the project type: Annual: Recurring in nature to be completed within the calendar year Minor: Non-recurring in nature to be completed within one year from initiation Major: Multi-year projects that are non-recurring completed in accordance with approved project

Slide 38

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2014 Capital Budget Funding Sources Total $120.5M

Slide 39

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2014 Capital Budget Expenditure Types

Total $120.5M

Slide 40

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Life Cycle Reserve Study

• Markham implemented the Life Cycle Reserve Study in 2004
• The purpose of the reserve study was to address the on-going capital

replacements and preventative maintenance of capital assets over their useful lives

• The reserve study is updated annually to identify if there is adequate

funding in the reserve based on known inflows to sustain future rehabilitation and replacement requirements for the next 25 years

Slide 41

Building Markham’s Future Together Journey to Excellence

Life Cycle Reserve Study

• Over the past years, Markham services were enhanced through a number of new facilities

and development.

• Markham committed over $25M in partnership with the governments of Canada and Ontario

to complete the following new infrastructure projects:

• Thornhill Community Centre & Library renovations
• Indoor Tennis Centre at Angus Glen Community Centre
• Outdoor artificial ice rink at the Markham Civic Centre
• A new full size artificial turf soccer field and seasonal dome at St. Robert Catholic High School
• Emergency Operation Centre

Slide 42

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Life Cycle Reserve Study

• Other facilities, such as the Cathedral and Cornell fire stations, Cornell Community Centre

and Library, Museum Collections Building, expansion at the Varley Art Gallery and Mount Joy artificial turf, were opened to accommodate growth and to provide enhanced services to Markham residents

• The future replacements and rehabilitation for these new facilities and infrastructures

have been included in previous Life Cycle Reserve Study updates

• The 2012 update identified that there was sufficient funds with known inflows to sustain

the future replacements and rehabilitation of existing assets for the next 25 years

Slide 43

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Life Cycle Replacement and Capital Reserve Fund

2014 Preliminary Budget

Operating Budget Capital Budget

Life Cycle and Non-Life Cycle Funded Capital

$17.6M

Life Cycle and Non-Life Cycle Funded Capital includes: 1) Repair and replacement to existing assets 2) New assets and a portion of non-growth share of new parks construction, recreational facilities, libraries and city wide hard services relating to Engineering

$25.5M

PowerStream Interest ($3.6M) & Dividends ($4.2M)

Slide 44

$31.6M

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Life Cycle Replacement and Capital Reserve Fund ($ in Millions)

2014 Preliminary Budget

Slide 45

2009 2010 2011 2012 2013 2014 Total Inflows 24.7 22.4 24.6 24.8 24.9 25.4 Total Outflows (19.9) (25.3) (20.5) (27.9) (37.9) (31.6) Net Inflows/(Outflows) 4.8 (2.8) 4.1 (3.1) (13.0) (6.2)

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Reserve Study Update Process

• 2013 update covers the years 2014 to 2038

(2012 update for years 2013 to 2037)

• Includes all assets as identified by the departments to the end of

December 2012

• Includes new purchases/assets as identified in the 2013 Capital Budget

Slide 46

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Life Cycle Reserve Study

• Assets included in the Life Cycle Reserve Study are:
• Roads
• Facilities
• Vehicles and Operations Equipment
• Parks
• Library Collections
• Stormwater Management (SWM) and Storm Sewers
• ITS Infrastructure
• Structures (Bridges and Culverts)
• Fire Fighter Equipment
• Traffic Signals
• Streetlights
• Assets not yet fully addressed in the Life Cycle Reserve Study are:
• Watercourse management (funding requirement dependent on future developments)

Slide 47

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25-Year Projected Life Cycle Expenditures By Component

2014-2038 (in 2013 $ - in Millions)

Slide 48

Total projected expenditures of $684M for the next 25 years (Average $27M/year)

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Life Cycle Reserve Study

Slide 49

• Based on the known inflows and outflows, there will be sufficient funds for 17 years (short by 8 years)
• The reserve balance will be in a deficit position of $18.8M at the end of 25 years (year 2038)
• Shortfall of $0.51M/year, equivalent to a tax rate increase of 0.4% to meet the 25 year funding level

Changes to 2013 reserve study update: Impact to Reserve Reserve Study adjustments Unfavourable 2013 expenditure amendments Unfavourable Reduction in interest from reserve Unfavourable Inclusion of watercourse erosion control remediation for years 2028 to 2038 Unfavourable Change in inflation from 2% to: 1% in 2014, 1.5% 2015 to 2017 and 2% 2018 and beyond Favourable

Option 1

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Life Cycle Reserve Study

Slide 50

• Based on the known inflows and outflows, there will be sufficient funds for 15 years (short by 10 years)
• The reserve balance will be in a deficit position of $68.4M at the end of 25 years (year 2038)
• Shortfall of $1.82M/year, equivalent to a tax rate increase of 1.5% (recommend to be phased-in over 3 years

at 0.5% per year for the years 2014, 2015 and 2016) to meet the 25 year funding level

Option 2 – Staff Recommendation

Inclusion of future facilities and tree inventory Impact to Reserve Pan Am Facility Unfavourable SECC&L Unfavourable Tree inventory Unfavourable Additional reduction in interest from reserve Unfavourable Section 37 contribution to Life Cycle (requires Council approval) Favourable Dividends from solar project Favourable

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2014 Preliminary Operating Budget Summary

($ in Millions) (Excl. Planning & Design, Engineering, Building Standards and Waterworks)

Slide 51 2013 $ 2014 $ Increase/ (Decrease) $ Tax Rate Increase Revenues 180.80 183.48 2.68 Expenditures Personnel 107.57 111.65 4.08 Non-Personnel 73.23 75.71 2.48 Total Expenditures 180.80 187.36 6.56 Net Shortfall

• 3.88

3.88 3.2% E3 initiatives (requires Council approval)

• (0.98)

(0.98) Subtotal

• 2.90

2.90 2.4% Infrastructure Surcharge (Option 2)

• 0.61

0.61 0.5% Net Shortfall

• 3.51

3.51 2.9%

Building Markham’s Future Together Journey to Excellence

2014 Preliminary Operating Budget Summary

• The tax rate increase of 2.9% excludes the impact of the Flood Control

Implementation Program

• Based on the February 12, 2013 “Stormwater Funding Options” presentation,

the impact to each residential homeowner will be in the range of $36 to $48

• This translates to:
• a tax rate increase ranging from 3.25% to 4.34% or
• a water rate increase ranging from 4.80% to 6.40% (based on 2013 water rate)
• An update will be presented to General Committee in October/November

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Building Markham’s Future Together Journey to Excellence

2014 Budget Summary

($ in Millions)

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2013 Operating Budget 2014 Price Assumptions % Price Growth Other Adjustments Efficiencies (E3) Service Level Enhancements 2014 Impact 2014 Operating Budget Tax rate increase 2.4% 0.1% 0.8%

• 1.1%

0.2% 2.4% Personnel 107.57 1.45 0.43 0.05 1.93 109.50 Non-personnel Hydro 3.86 9.8% 0.38 (0.10) 0.28 4.14 Streetlight Hydro 2.16 18.5% 0.40 0.13 0.53 2.69 Natural gas 0.87 2.0% 0.02 0.02 0.89 Water 0.64 7.8% 0.05 0.05 0.69 Transfer to Reserve 26.11

• 0.50

0.50 26.61 Other 39.59 2.48 1.05 (0.32) (0.45) 0.24 3.00 42.59 Total non-personnel 73.23 3.33 1.68 (0.32) (0.55) 0.24 4.38 77.61

• Total Expenses

180.80 3.33 3.13 0.11 (0.55) 0.29 6.31 187.11 Increases / (Decreases)

Building Markham’s Future Together Journey to Excellence

2014 Budget Summary

($ in Millions)

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2013 Operating Budget 2014 Price Assumptions % Price Growth Other Adjustments Efficiencies (E3) Service Level Enhancements 2014 Impact 2014 Operating Budget

• Total Expenses

180.80 3.33 3.13 0.11 (0.55) 0.29 6.31 187.11 Revenues Tax levies 124.77 3.02 3.02 127.79 User fees (Recreation) 15.00 2.0% 0.30 (0.79) (0.49) 14.51 User fees (Other) 3.50 5.0% 0.18 0.18 3.68 Other income 37.53 (0.05) 0.75 0.70 38.23 Total Revenues 180.80 0.48 3.02 (0.84) 0.75 3.41 184.21

• Net Expenditure/(Revenue)
• 2.85

0.11 0.95 (1.30) 0.29 2.90 2.90 Tax rate increase 2.4% 0.1% 0.8%

• 1.1%

0.2% 2.4% Infrastructure Surcharge (1.5% phase-in over 3 years, 0.5% per year for the years 2014, 2015 and 2016) 0.61 0.61 Total shortfall 3.51 3.51 Tax rate increase including Infrastructure Surcharge 2.9% Increases / (Decreases)

Building Markham’s Future Together Journey to Excellence

Assessment and Property Taxes

2013 Property Tax Distribution Residential

Region 50% Education 25% Markham 25%

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Building Markham’s Future Together Journey to Excellence

Education 60% Region 27% Markham 13%

Assessment and Property Taxes

2013 Property Tax Distribution Non-Residential

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Building Markham’s Future Together Journey to Excellence

Impact of Markham Tax Rate Increase

• n an Average Residential Property - Preliminary

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2014 Average Current Value of a Residential Property in Markham = $485,000* 1% Tax Rate Increase for City’s Tax Levy $11.07 Tax Dollar Impact per Household 2.4% Tax Rate Increase for City’s Tax Levy $26.57 0.5% Tax Rate Increase for Infrastructure $ 5.53

$32.10

* residential tax class includes single family detached, linked homes, freehold townhouses, semi-detached and residential condominiums

Building Markham’s Future Together Journey to Excellence

Planning & Design Engineering

2014 Planning & Design and Engineering Budget

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Building Markham’s Future Together Journey to Excellence

Building Services

2014 Building Budget

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Building Markham’s Future Together Journey to Excellence

• November 5, 2013 – Report to Development Services Committee on

proposed fee by-law amendments and request to hold a Public Meeting

• November 19, 2013 – Public Meeting
• November 26, 2013 – Council Decision on the fee by-law amendments
• December 9, 2013 – Council Decision on 2014 Budget
• January 1, 2014 – Implementation of any new fee adjustments

Development Fee Approval Process

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Building Markham’s Future Together Journey to Excellence

Waterworks

2014 Waterworks Budget

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Building Markham’s Future Together Journey to Excellence

• Financial Prudence
• Ramp-ups
• Service Levels
• Reserve Studies

2014 Budget Summary Highlights

Fiscal Stewardship

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Building Markham’s Future Together Journey to Excellence

Highlights of 2014 Proposed Capital Budget

Environment ($ in Millions)

• Environmental Asset Program (includes Flood Control Implementation – West Thornhill*)

$7.10

• Emerald Ash Borer Program

$2.59

• PowerStream Embedded Energy Projects and Integrated Community Energy Plan*

$0.39

• Waste Management Initiatives (includes Carpet Recycling Program and Specialty Recycling Containers*)

$0.14

• Continuation of the Trees for Tomorrow Initiative and Replacement of Trees*

$0.12

• Community Food Projects*

$0.07 * - service level enhancement

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Building Markham’s Future Together Journey to Excellence

Highlights of 2014 Proposed Capital Budget

Growth ($ in Millions)

• Markham Pan Am Centre – Construction (Year 2)

$16.90 (also included in Integrated Leisure Master Plan/Public Safety)

• New Parks Assessment Design and Construction

$ 4.09

• Major Wood Cathedral Town Park – Construction (4 acres, opening: Summer 2015)
• South Unionville Community Park West – Design and Construction (3.7 acres, opening: Fall 2015)
• Linear Park – Hwy. 48 west of James Walker Court – Design and Construction (0.5 acres, opening: Fall 2015)
• Monarch Cathedraltown North Park – Design (5.1 acres, opening: Fall 2015)
• Wismer Donald Mingay Woodlot Park – Design (7 acres, opening: Early 2016)
• Greensborough Williamson/A. Paterson North Park – Design (3.9 acres, opening: Early 2016)
• Growth Management Strategies

$ 1.26

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Building Markham’s Future Together Journey to Excellence

• Main Street Markham, Hwy 407 to Hwy 7 Reconstruction

$14.87

• Rodick Road Extension – Phase 2 of 3 – Miller to 14th Ave. Construction *

$7.23

• Hwy 404 Bridge North of Hwy 7 – Construction

$4.07

• Miller Ave – CN Rail to Kennedy Road – Phase 4 – Property Acquisition

$4.07

• Cycling and Trail Pathways*

$2.95

• Streetlight Replacement and Inspection Program

$2.72

Highlights of 2014 Proposed Capital Budget

Transportation and Transit ($ in Millions)

• Centurian Drive – Allstate Parkway to Woodbine Ave – Reconstruction

$1.71

• Church Street – 9th Line to Bur Oak Ave – Construction

$2.05

• Traffic Control Signals & Traffic Operational Improvements

$0.22 (also included in Integrate Leisure Master Plan/Public Safety) * - service level enhancement

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Building Markham’s Future Together Journey to Excellence

• Water System and Water Meter replacement/upgrade program

$1.86

• Illumination Program *

$1.15

• Tennis Courts Resurfacing

$0.69

• Sidewalk Program *

$0.64

• Markham Museum Pottery Studio *

$0.33

• Sportsfield Maintenance and Reconstruction

$0.10

• Landscape for Warden Avenue multi-use pathway (16th Avenue to Major Mackenzie) *

$0.05 * - Service level enhancement

Highlights of 2014 Proposed Capital Budget

Service Levels ($ in Millions)

• Roads rehabilitation program

$5.14

• Facility improvement program at Community Centres, Libraries, Fire

$3.72 Stations, Cultural Venues and Civic Centre

• Watermain and Sanitary Sewer construction and replacement program

$2.51

• Structures rehabilitation and replacement program

$2.18

• Library Collections (including tablets and headsets*)

$2.17

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Building Markham’s Future Together Journey to Excellence

Highlights of 2014 Proposed Capital Budget

Integrated Leisure Master Plan/Public Safety ($ in Millions)

• Markham Pan Am Centre – Construction (Year 2)

$16.90 (also included in Integrated Leisure Master Plan/Public Safety)

• Fire Services Vehicle Replacement

$1.21

• Fire and Emergency Services Capital Program

$0.87

• Traffic Control Signals and Traffic Operational Improvements

$0.22 (also included in Transportation and Transit)

• Play Structure Replacements *

$0.14 * - service level enhancement

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Building Markham’s Future Together Journey to Excellence

• Pedestrian Accessibility Improvements *

$0.04

• Language Line Service
• Career Bridge/Ability Edge Program

* - service level enhancement

Highlights of 2014 Proposed Capital Budget

Diversity ($ in Millions)

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Building Markham’s Future Together Journey to Excellence

Next Steps

• Budget Sub-Committee Meeting #2
• Canada Room
• Friday, October 11, 2013 – 9:00 a.m. - 12:00 p.m.
• Review of the 2014 proposed capital budget by exception
• Please bring your computer to the meeting
• Public Budget Consultation Meeting is scheduled on October 24th

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