2020 Budget Presentation January 13, 2020
Overview – Working Session Presentation I. Context II. 2020 Op-Ex and Cap-Ex Budget Review III. Strategic Reserve Planning & Debt Management IV. The Path Forward for 2020 January 13, 2020 The Corporation of the Township of King 2
Context, as established in 2012 Integrated Community Sustainability Plan (ICSP) Economic Environmental Socio-Cultural Financial January 13, 2020 The Corporation of the Township of King 3
Investment in Public Infrastructure (1961 vs. 2005) Context: The significant shift in funding to support investment in public infrastructure has and continues to change … January 13, 2020 The Corporation of the Township of King 4
Consumer Price Index vs. Non-Residential Building Index 6% CPI (“All Items”) vs. Non-Res Building Index 5.3% CPI (Toronto) All Items Non-Res Building Index 4% 3.3% 3.2% 3.1% 2.5% 1.8% 2.5% 2% 2.1% 2.1% 1.9% 1.5% 1.5% 0% 2014 2015 2016 2017 2018 2019 January 13, 2020 The Corporation of the Township of King 5
Consumer Price Index vs. Non-Residential Building Index Consumer Price Index (CPI) 6% CPI (“All Items”) vs. Non-Res Building Index 5.3% CPI (Toronto) All Items Non-Res Building Index 4% 3.3% 3.2% 3.1% 2.5% 1.8% 2.5% 2% 2.1% 2.1% 1.9% 1.5% 60% of Township Operating Costs align 1.5% with Non-Res CPI measure 0% 2014 2015 2016 2017 2018 2019 January 13, 2020 The Corporation of the Township of King 6
Context - Annual Budget Process (2017-2020) Evolution of Budget Processes 2017-2022 2020 2017-18 Budgets • Q4-2016 Public Consultation • Approved 2017 Op-Ex +2.98% Change in Levy 2020 • 2018 Op-Ex Forecast +3.99% 2019 • Approved 2-Year Capital Plan (2017-2018) 2018 @ $71.4M 2017 January 13, 2020 The Corporation of the Township of King 7
Context - Annual Budget Process (2017-2020) Evolution of Budget Processes 2017-2022 2018 Budgets 2020 2017-18 Budgets • Q4-2017 Public Consultation • Q4-2016 Public • Approved 2018 Op-Ex Consultation +0.00% Change in Levy • Approved 2017 Op-Ex • Approved 2018 amended +2.98% Change in Levy 2020 Capital Plan @ $26.9M • 2018 Op-Ex Forecast +3.99% 2019 • Approved 2-Year Capital Plan (2017-2018) 2018 @ $71.4M 2017 January 13, 2020 The Corporation of the Township of King 8
Context - Annual Budget Process (2017-2020) Evolution of Budget Processes 2017-2022 2019-2022 Budgets • Q4-2018 Public Consultation • 1 st Multi-Year (2019-2022) Term of Council Op-Ex Budget • Approved 2019 Op-Ex 2018 Budgets +2.30% Change in Levy 2020 2017-18 Budgets • Q4-2017 Public • Forecast Op-Ex Levy Increase Consultation • 2020 @ 2.60% • Q4-2016 Public • 2021 @ 2.65% • Approved 2018 Op-Ex Consultation • 2022 @ 2.75% +0.00% Change in Levy • Approved 2017 Op-Ex • Approved 4-Year Capital Plan • Approved 2018 amended +2.98% Change in Levy 2020 ($125.8M) through 2022 Capital Plan @ $26.9M • 2018 Op-Ex Forecast +3.99% 2019 • Approved 2-Year Capital Plan (2017-2018) 2018 @ $71.4M 2017 January 13, 2020 The Corporation of the Township of King 9
Context - Annual Budget Process (2017-2020) 2020-2022 Budgets Evolution of Budget Processes • Q3-2019 Directions Report (+2.9%) 2017-2022 2019-2022 Budgets • Q4-2019 Public Consultation • Q4-2018 Public Consultation • 2 nd Year of Multi-Year (2019-2022) Term of Council Op-Ex Budget • 1 st Multi-Year (2019-2022) Term of Council Op-Ex Budget • Proposed 2020 Op-Ex +2.89% Change in Levy • Approved 2019 Op-Ex 2018 Budgets +2.30% Change in Levy • Forecast Op-Ex Levy Increase 2020 2017-18 Budgets • 2021 @ 2.88% • Q4-2017 Public • Forecast Op-Ex Levy Increase • 2022 @ 2.85% Consultation • 2020 @ 2.60% • Q4-2016 Public • 2021 @ 2.65% • Amended 4-Year Capital Plan • Approved 2018 Op-Ex Consultation • 2022 @ 2.75% ($120.4M) through 2022 +0.00% Change in Levy • Approved 2017 Op-Ex • Approved 4-Year Capital Plan • Approved 2018 amended +2.98% Change in Levy 2020 ($125.8M) through 2022 Capital Plan @ $26.9M • 2018 Op-Ex Forecast +3.99% 2019 • Approved 2-Year Capital Plan (2017-2018) 2018 @ $71.4M 2017 January 13, 2020 The Corporation of the Township of King 10
How we got to this point for the 2020 Budget Cycle ? 2019-2022 Council Priorities Adoption of Township’s new Official Plan • Capital Projects – “On time and On budget” Road & related improvements Strategic Land Acquisition Traffic calming • Rural Dumping Customer Service • Rural Area Broadband Communication Strategy • Train Whistle Cessation • Tree By-law • Township-wide Recreation Centre January 13, 2020 The Corporation of the Township of King 11
How we got to this point for the 2020 Budget Cycle ? 2020-2022 Budget Directions Report September 9, 2019 Tax Levy Increase </= 2.9% Maintain service level standards Identify incremental sources and uses of funds Program Change requests Robust Business Case Justification Amended 2020-2022 Capital Plan deferred $5.5M beyond 2022 re: construction timing January 13, 2020 The Corporation of the Township of King 12
2020 Operating and 2020-2022 Capital Budgets Integrated Community 2020 Budget Overview Sustainability Plan (ICSP) Township’s 2020 Operating Budget includes: Economic Environmental • $44.8 million in tax supported operating costs Including a Tax levy increase of $899,748 or 2.89% Township’s planned Capital Investments over the four-year Term of Council (2019-2022) include: • $29.3 million in 2019 • $34.8 million in 2020 (revised from $40.3 million) • $28.8 million in 2021 (revised from $29.1 million) • $27.4 million in 2022 (revised from $27.0 million) Socio-Cultural Financial January 13, 2020 The Corporation of the Township of King 13
2020 Budgets (Operating & Capital) $ 44.8 million $ 34.8 million $79.6 million = + Operating expenses Capital expenses 72.5% of $15 Total Op-Expenses $ in Millions 2020 Operating Costs ($44.8 M) are allocated as follows: $12.9 $12 $10.7 $8.9 $9 28.7% $6 28.7% 19.7% $3.1 $2.9 $3 $1.8 $1.6 $0.4 $1.5 7.0% $1.0 6.4% 0.9% 4.1% 2.3% 3.3% 3.6% $- January 13, 2020 The Corporation of the Township of King 14
Township’s 2020 Operating Budget @ $44,823,806 2020 Gross Operating Costs by Expenditure Category $ in Millions $20 $17.9 $18 $16 $14 Expenditure Categories aligned w ith $12 “Non-Res Building Index” 39.8% $10 $8.3 $8 $6.8 $5.7 $6 16.6% 15.1% $3.4 $4 12.8% 9.6% $1.5 $2 $1.2 3.3% 2.8% $- Salaries & Benefits Transfer to Contractual General Other Utilities Minor Capital Reserves (Net) Services Operations Expenditures (Repairs & Maint.) January 13, 2020 The Corporation of the Township of King 15
Township’s 2020 Operating Budget @ $44,823,806 2020 Sources of Funding $ in Millions $40 $33.8 $35 $30 $25 $20 75.4% $15 $10 $3.6 $2.6 $4.4 $0.4 $5 9.8% 8.1% 5.8% 1.0% $- Property Taxation User Charges Transfers from Other Revenues Grants Reserves January 13, 2020 The Corporation of the Township of King 16
2020 Budgets (Operating & Capital) $ 44.8 million $ 34.8 million + $79.6 million = Operating expenses Capital expenses Distribution of Property Taxation Revenue by Assessment Type $ in Millions $30 $25 $20 $33.8M Total Non-Residential Property Taxation or $15 88.9% Sum < 6% $10 $5 5.2% 4.7% 1.2% $- Residential & Farm Payments in Lieu (PILs) Commercial Industrial of Taxation January 13, 2020 The Corporation of the Township of King 17
Annual % Increase in Levy Requirements (2019-2022) Multi-Year Term of Council Budgets (2019-2022) Focus on Operational 3% Efficiency 2% 2.89% 2.88% 2.85% 2.30% Excellence in Customer 1% Service 2019 2020 2021 2022 (Approved) Proposed Forecast Forecast January 13, 2020 The Corporation of the Township of King 18
Township’s Operating Budget vs. Actual Costs (2016-2022) Examples of operational drivers that may Planne d Cost vs. Ac tual Cost influence variances betw een Planned and (Excluding Corporate Costs) Actual Costs include: $30 • Seasonal weather conditions $ in Millions Severe winter events Increased winter maintenance costs Forecast Rainy spring $20 Forecast Increased gravel road maintenance Proposed Summer Heat Wave Increased energy costs relating to facility cooling $10 • Participation rates for recreation programs (e.g. Day Camps) • Fluctuating commodity rates $0 2016 2017 2018 2019 2020 2021 2022 • Fuel, Hydro-Electricity, Natural Gas January 13, 2020 The Corporation of the Township of King 19
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