2018 Budget Operating Budget November 2017 November 2017 1 - PowerPoint PPT Presentation

2018 Budget Operating Budget November 2017 November 2017 1

Agenda  Budget Process  Budget Objective  Fiscal Principles, Practices and Policies  Significant Growth Revenue Financial Policy/Plan  Key Assumptions  Consolidated Budget Overview  Tax Allocation  Budget Impacts & Challenges  Budget Highlights  Budget Comparisons  Corporate Budget Tax Effect  Corporate Budget Utilities  Corporate Budget Closing & Summary November 2017 2

Corporate Budget Overview Budget Process • Budgetary process has focused on containing costs and implementing best practices. • Management and stewardship of public funds is taken very seriously • Due to the effects of the economic environment the County’s approach to the annual operating budget has retained a focus on financial constraint and maintaining service. November 2017 3

Corporate Budget Overview Budget Process • This budget is coming from prior Council’s direction. • Budgets are completed by Managers, reviewed by their GM, and finally reviewed by Senior Management for alignment with corporate business plan and Council direction. • During the budget review meeting with Senior Management managers must provide detailed information regarding:  2016 Results  Projected 2017 Budget Targets  Impact on the 2018 budget emerging from previous two items  Service enhancements brought forward for 2018 November 2017 4

Corporate Budget Overview Budget Objective Reinforce strategic priorities through corporate planning . • Align budgets & business plan to the Strategic Plan. • Identify & allocate resources to respond to and meet service requirements – within the budget parameters Council provides. • Continue to position the County for a sustainable future. November 2017 5

Corporate Budget Overview Fiscal Sustainability • Predictable and stable taxation in current & future years. • Future taxpayers will not face declines in services or unreasonable tax increases to deal with deferred needs. • Future Refinery Revenue • Current taxpayers do not bear all the burden of funding items that will benefit future taxpayers. • Capital leveraged with low cost debt. • Council’s highest priority programs can be maintained. • Align budgets and business plan to the vision and strategic plan. November 2017 6

Corporate Budget Overview Budget Consistent with: • Federal legislative requirements. • Provincial legislative requirements. • Community Vision and Strategic Plan. • Council’s approved bylaws, policies and plans. • Council’s 2018 budget direction/priorities • Council Workshop April 2017 • Approval of the 2018 Capital Infrastructure Program Sept. 2017 • Acknowledges feedback during election campaign (Roads; Road Project Communications; Public Consultation; Efficiency) November 2017 7

Corporate Budget Overview Council Guidance and Direction • Ensure Administration is equipped to do the work and meet Council’s expectations for service delivery to stakeholders. • Support for utility rate action based on the Utility Cost of Service Study completed in 2016. • Support for debenturing capital assets that provide a service to future generations. • Caution regarding the use of unallocated reserve funds. November 2017 8

Review – Fiscal Principles, Practices and Policies November 2017 9

Review – Fiscal Principles, Practices and Policies Operating Budget Budget Requirement Council must adopt an operating and capital budget for each calendar o year. Administration prepares the County’s initial budget based on Council approved corporate business plan and priorities. Balanced Budget The County’s operating budget must have revenues equal to or greater o than expenditures. Conservative Revenue Estimates Sturgeon County estimates its annual revenues by an objective, analytical o approach utilizing trend, judgemental and statistical analysis as appropriate. November 2017 10

Review – Fiscal Principles, Practices and Policies Revenue User Fees The County charges user fees for services. User fees will be reviewed and o adjusted annually to recover the full cost of services provided, except when Council determines that a subsidy from general revenue is in the public interest . User fees will be based on full cost recovery where it is applicable and o cost effective to do so. One-time Revenues o Revenues that are not expected to be of an ongoing nature will not be used to fund ongoing expenditures. The County will avoid budgetary and accounting procedures, which will balance the current budget at the expense of future budgets. November 2017 11

Review – Fiscal Principles, Practices and Policies Utility Financial Policy Utilities Self Balancing The County sets fees and user charges for each utility fund at a level that o fully supports the direct and indirect costs of the utility . Water and Wastewater Funds o Any surpluses from the County’s utility operation will be transferred to the utility reserve at year-end as part of the County’s effort to establish funding for the ongoing replacement and addition of utility infrastructure. o If a utility function experiences a deficit, it will be funded by a transfer from the utility reserve. November 2017 12

Review – Fiscal Principles, Practices and Policies Growth o Off-site levies will be used to recover the costs of growth to minimize the financial burden of the growth on existing ratepayers. o Certain projects may proceed in the advance of collection of off- site levies subject to the availability of funds/financing. -The County has limited resources and cannot meet all offsite front-end needs. - The County will need to prioritize residential or non-residential areas for front-ending . Reserves o The County has established specific reserves to provide for emergent financial needs, to stabilize tax rates, to set aside funds for the replacement of existing equipment, facilities, and future projects. o The County recognizes that the ongoing commitment of funds to specific reserves provides for property tax stabilization, contingency funding and reduces the need for debt financing. November 2017 13

Review – Fiscal Principles, Practices and Policies International Government Finance Officers Association General Operating Reserve Recommendation:  20-25% of regular operating revenues  PLY_Reserve_Policy_2016 “To provide funds to stabilize tax rates for non-recurring, emergency, one-time expenditures, losses of revenue or cash flow timing issues that will not be built into the base operating budget in future years. Target 20% of the annual municipal operating revenue; no maximum.” November 2017 14

Significant Growth Revenue Journey Late 2015, August 26, Early 2014 Early 2016 2016 May 6, 2016 March 28, During 2015 2017 Significant Growth Revenue Journey November 2017 15

Significant Growth Revenue - 2018 PRIORITY #7 – Tax Stabilization $583,333 PRIORITY #6 – Heartland Mitigation $530,833 Strategy PRIORITY #5 – Potential Service Level $530,833 Increase PRIORITY #4 – Community Building $2,453,083 $15,042,592 PRIORITY #3 – Infrastructure New $0 PRIORITY #2 – Infrastructure $5,202,128 Rehabilitation PRIORITY #1 – Reserve & Debt $5,742,381 16

Significant Growth Revenue – 5 Year Outlook November 2017 17

Review – Fiscal Principles, Practices and Policies Budget Equation Expenses Revenues  Existing Service Levels  Existing Tax Base  Inflation  New Assessment Growth  Staff & Material Costs  User Fees and Charges  Growth  Grants  Debenture servicing  Other EXPENSES = REVENUES November 2017 18

Corporate Budget Overview Key Assumptions – Baseline • Assessment growth Conservative revenue estimates • Economic growth • Inflation • Maintain current service levels ‘Keep the lights on’ • Based on Council priorities and policy direction • Continuous service improvement • Identify challenges and opportunities: Transitioning to Focused Growth November 2017 19

BREAK November 2017 20

Corporate Budget Overview 2018 CONSOLIDATED BUDGET $80,529,581 CAPITAL OPERATING *$26,728,659 $53,800,922 * Pending Refinery Revenue November 2017 21

Corporate Budget Overview Consolidated Overview OPERATING EXPENDITURES 2018 2017 % Change Tax Funded Operations $45,056,000 $41,809,297 7.8% Utility Funded Operations $5,989,240 $6,736,064 -11.1% Debenture Repayment $2,755,682 $2,684,876 2.6% $53,800,922 $50,483,413 Tax funded capital $ 7,512,625 $ 7,442,125 November 2017 22

Corporate Budget Overview 2018 Tax Allocation by Function Planning, Economic Engineering Development, CARP 4.0% 7.9% Protective Services 6.6% Community Services 5.0% Transportation Agriculture & 47.6% Solid Waste 4.6% Corporate Support 19.6% County Governance 4.6% November 2017 23

Corporate Budget Overview Budget Impacts & Challenges PROJECTED ASSESSMENT GROWTH 2017 2016 Residential 2.05% 1.37% Machinery & Equip 19.78% 24.46% Non-residential 2.73% -0.51% Linear -6.23% 15.95% November 2017 24