2020 – 2024 Draft Financial Plan Special Council Meeting, April 30, 2020
Overview • Financial Planning Process Update • 2020 Budget Summary • 2020-2024 Property Taxation • Next Steps
2020-2024 Financial Planning Process • October 31, 2019 – First Special Budget Meeting • December 3, 2019 - Public Consultation • January 31, 2020 – Second Special Budget Meeting • February 18, 2020 – Public Consultation • April 14, 2020 – Special Budget Meeting – Closed • April 30, 2020 – Special Budget Meeting • Financial Plan and Annual Tax Rates Bylaws presented May 12 th
Financial Impact and Risks • Risk to revenues: – Inability to provide some services – Reduction in demand for District services – Reduction in users’ ability to pay • Risk to cash flow: – Delay in receivables – Refund of user fees collected to date in 2020 – Low operating, financial stability and cash reserves – High capital expenditures in 2019 and 2020
Immediate Financial Measures • Cancellation of recreation programming: – Refunding fees for all future programs – Reduction in service level • Closure of the Community Children’s Centre: – The Centre remains closed with the budget allowing for a September 2020 opening
Immediate Financial Measures • Suspend hiring of all temporary and seasonal employees in 2020 - exception one temporary position in Public Works • Close monitoring of service delivery, service demand and user fee collection • Delay hiring of positions – late 2020/2021 • Transfer of $150,000 from general surplus to the Financial Stability Reserve Fund • Reductions to expenditures in all service areas • Weekly cash flow projections
Financial Objectives and Priorities • Meet the current service delivery demands of the community • Establish appropriate services and service levels • Taxation levels must be reasonable • Essential services continue and are appropriately funded • Essential projects continue and are appropriately funded • Non-essential projects and services are deferred • Immediate cash flow needs are met
Financial Objectives and Priorities • Develop plans and policies that will generate and ensure stable future revenues and cash flows • Create a five year plan that supports a resilient, efficient and reliable municipality • Create a five year plan that considers the fiscal health of the taxpayers and community at large • Maintain transparency to the community • Create a plan that responds to the current economic climate of the community while maintaining essential services
Financial Tools and Strategies • Revenue Anticipation Borrowing Bylaw – The establishment of $5,000,000 in short term credit to meet immediate cash flow needs in anticipation of current year taxation revenue – To meet operating expenditures to provide essential services – Transfer of taxes to other agencies in advance of collecting taxes
Financial Tools and Strategies • Encourage timely payment of utilities and taxes – Accepting credit card payment for 2020 taxes, subject to an administration fee – Reduce taxation to an appropriate and feasible levels – Adjust tax due dates and penalties – Extending the due date of Quarter 1 utility billing to 90 days • Focus on plans and policies that will stabilize revenues and manage risk •
Ministry; MFA Correspondence • Focus on the budget and tax cycle • Ensure a strong cash position • Keep liquid investments in portfolios • Practice good financial management and stay the course • Prioritize core municipal operations • Use legislative tools that are in place • Defer expenses related to non-essential services and capital projects
Provincial Financial Support • Reduction of School Tax Rate for commercial property – Relief directed to Class 4,5,6,7,8 • Postponing late payment penalties on Commercial Properties to October 1, 2020; Due date remains at July 2, 2020 • Delayed remittance of School and Police Tax to December 31 st – Funds available for cash flow • Interest Free borrowing from capital reserves in 2020 only •
Provincial Financial Support • Discretionary authority to delay tax sale • Extend Revenue Anticipation Borrowing – Must be paid down by end of calendar year 2021 • Deadline extension for annual reporting and SOFI Reporting • Deadlines will not be enforced for submission of audited financial statements • Canada Summer Jobs – grant increased to minimum hourly wage; may be an opportunity to add back summer students in the service areas of Parks and in Recreation
Financial Support to Organizations • Tofino-Long Beach Chamber of Commerce – $20,000/year fee for services • Permissive Tax Exemptions – Policy amendment; applications will go out to existing exemptions
2020 Arts & Culture/Council Grants • All applicants have been contacted • Most applicants can modify proposals • One project has been cancelled • Applications will come forward to Council after the Financial Plan is adopted
MRDT and OAP • Tofino Housing Corporation (THC) – Loan Guarantee $70,756 per year; July 2019 to July 2024 • Tourism Tofino • Deferral of remittance date to September 30 th – Reduction in MRDT and OAP due to late reporting and reduced occupancy for 2020
2020 BUDGET UPDATE
2020 Budget Update • Changes were made to the follow areas: – Reduction in revenues based on current demand – Reduced operating expense to meet current service levels – Reduction to Council travel and indemnities – Reduced travel & training budgets in all departments – Reductions to service levels – Cancelled projects – Deferral of projects to future years
Consolidated Project Listing • Projects Removed from Financial Plan: – Community Hall Kitchen Upgrades – Indoor Recreation Facility – Duty Officer Vehicle – Fire Department – West Gibson Street Improvements – Btw First and Third – Community Hall Roof Improvements – Replaced by Condition Assessment – Structural Mitigation Project – Grant dependant
2020 Budget Summary • C&I Levy – 10% of proposed $137,178; funded from general surplus • 0% 2020 General Tax Increase • Non-market change revenue added to 2020 tax levy: $23,300 • Debt servicing $282,641: WWTP Interest only; long term debt; THC loan guarantee
2020 Budget Summary • General Fund Contingency is set higher than in previous years: $401,726 (Typical contingency $135,000) – Higher contingency allows for more operational flexibility – Emergent expenditures are likely to be higher in 2020/2021 – Any balances can be transferred to operational/capital reserves
2020 Budget Summary • Water Fund – 2018 and 2019 Surplus added to 2020 operations budget: $299,881 – Water fund contingency set at: $94,731 – Contribution from Financial Stability Reserve Fund balance: $60,000 – Minimize impact to user by keeping rates consistent for 2020 and plan for an increase January 1, 2021
2020 Budget Summary • Sewer Fund – 2018 and 2019 Surplus added to 2020 operations budget: $501,580 – Sewer Fund contingency set at: $331,552 – Minimize impact to user by keeping rates consistent for 2020 and plan for an increase January 1, 2021
2020 Budget Summary • Total 2020 budget reduced by $1,795,345 since January 31 st – Most projects remain in the budget due to stable funding sources • Water and Sewer fees reduced by: $517,250 • Reduction to General Fund other revenue: $403,973 • Reassignment of 2019 Taxation: $122,423
2020 Revenues and Expenses Consolidated • See Consolidated Worksheet
2020-2024 Municipal Property Taxation • Total 2020 Municipal Taxation is reduced by approximately $887,179 over 2019 taxation – Removal of C&I Levy from taxation for 2020 – No tax increase on general taxation • Removal of debt servicing for the Indoor Recreation Facility • C&I Levy amounts modified for years 2021 to 2023 • 2% increase in years 2021-2024 to be revisited throughout the the upcoming budget process
Capital and Infrastructure Levy 2,500,000 2,000,000 476,938 432,273 25% Reduction 1,500,000 25% Reduction 775,218 50% reduction 1,234,602 1,000,000 648,410 1,907,750 90% reduction 1,430,813 387,609 500,000 648,410 387,609 137,178 - 2020 2021 2022 2023 2024 Taxation Surplus Reduction to Levy
Breakdown of Municipal Property Taxation 7,000,000 6,000,000 5,000,000 Demand Loan THC 4,000,000 WWTP Debt/Other C&I Levy 3,000,000 General Municipal 2,000,000 1,000,000 - 2019 2020 2021 2022 2023 2024
2020 Municipal Property Taxation 2019 Municipal Taxation Including $3,373,391 2020 Non Market Change Revenue $23,300 Base Level Municipal Taxation: $3,396,691 2020 C&I Levy $0 2020 WWTP Debt Servicing – Interest Only on $6,856,623 – (Deducts interest collected in 2019) $139,000 Demand Loan – THC $70,756 Other Debt Servicing – Reservoir; Ocean Park Staff Housing $72,885 Total 2020 Municipal Taxes $3,679,332
2019/2020 Assessment Comparison 2019 Assessment 2020 Assessment % Property Class (Revised Roll) (Revised Roll) Difference Change Residential 837,589,802 968,346,002 130,756,200 15.6% Utilities 499,700 587,300 87,600 17.5% Light Industry 454,000 1,054,100 600,100 132% Business 231,822,244 255,400,424 23,578,180 10.2% Recreation/Non-Profit 6,267,900 6,684,000 416,100 6.6% Total 1,076,633,646 1,232,596,126 155,962,126 14.5%
Recommend
More recommend
