2020 DRAFT BUDGET OVERVIEW PRESENTATION www.centrewellington.ca PRESENTED TO THE COMMITTEE OF THE WHOLE December 3, 2019 2020 DRAFT BUDGET 1 Overview Presentation Agenda 1. Overview & Summary 2. General Budget Information 3. Tax Supported Operating Budget Operating Budget Facts Funding Challenges www.centrewellington.ca OMPF Funding Reduction Contributions to Capital Impact Areas Impact on Township’s Portion of the Tax Levy 3 Year Operating Forecast 2020 DRAFT BUDGET 2
Overview Presentation Agenda 4. Capital Budget Capital Budget Facts 2020 Capital Project Highlights Allocation of OLG Funds in 2020 Capital Budget 10 Year Capital Forecast www.centrewellington.ca 2021 and 2022 Project Highlights Dedicated Capital Levy / OCIF Capital Plan 5. Debt Analysis 2020 DRAFT BUDGET 3 Budget & Strategic Planning www.centrewellington.ca 2020 DRAFT BUDGET 4
Budget & Asset Management Strategic Plan Official Plan Secondary Plans Asset Departmental Plans www.centrewellington.ca Management Master Plans & Processes Process Condition Assessments Staff Reports & Budget Process Analysis 2020 DRAFT BUDGET 5 Asset Management Requirements • Infrastructure for Jobs and Prosperity Act (IJPA) & O.Reg 588/17: www.centrewellington.ca 2020 DRAFT BUDGET 6
Asset Management Requirements • Provincial Grant Application Based Funding: • Requires submission of an asset management plan • Federal Gas Tax Funding: • Requires an asset management plan for all assets www.centrewellington.ca • Development Charges Act: • Requires an asset management plan • Capital costs proposed to be funded under the DC bylaw • Ensure assets are “financially sustainable over their full lifecycle” 2020 DRAFT BUDGET 7 Asset Management Benefits • Internal Benefits: • Knowledge of assets owned Corporate Corporate Processes Processes • Replacement value, condition, etc. • Great planning tool Asset Asset • Linkage to budget process and strategic plan Management Management Process Process • Identification of priorities www.centrewellington.ca • Required for grant applications and gas tax allocations Asset Asset • Long ‐ term identification of gaps in both Management Management Plan Plan asset spending and investing • Infrastructure gap • Funding gap 2020 DRAFT BUDGET 8
Asset Management Plan • Prioritizing Assets: Asset Type Consequence Variables Bridges & Culverts Response time, detour length, traffic counts, local access, and heritage. www.centrewellington.ca Traffic counts, and speed limits. Roads Land use, static pressure, trunk main vs. local main, and main Water mains diameter. Sanitary Sewer Main diameter, force main vs. gravity main, river crossing, mains proximity to water, and land use. Other Assets Criticality of the services being provided by the asset. 2020 DRAFT BUDGET 9 Asset Management Planning Investment in Assets Replacement Replacement Area Cost (2016 $) Cost (2020 $) Tax Supported $ 602,300,000 $677,900,000 Water Supported $ 114,100,000 $128,400,000 www.centrewellington.ca Wastewater Supported $ 127,000,000 $142,900,000 Total $ 843,400,000 $949,200,000 $31,640 per resident in Centre Wellington 2020 DRAFT BUDGET 10
Asset Management Planning Investment in Assets Annual Infrastructure Funding Gap Analysis (Inflated) $20,000,000 $18,000,000 $16,000,000 $14,000,000 www.centrewellington.ca $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Current Capital with Inflation Optimal Funding ‐ Phase in Optimal Funding 2020 DRAFT BUDGET 11 Asset Management Planning Recommendations Tax Supported • 4.9% increase in taxation rates annually to 2030 (includes operating inflationary increases). 2.89% increases thereafter. www.centrewellington.ca Water/Wastewater Supported • Water and wastewater rate increases in line with the Township approved Water & Wastewater Rate Study. The Rate Study recommends annual increases to water and wastewater rates of 2.5% and 4.0% respectively. 2020 DRAFT BUDGET 12
Asset Management Planning Tax Supported – Funding Gap 2014 (first 2018 2019 2020 2021 2022 Consistent Tax Supported Funding AM Plan) Budget Budget Budget Forecast Forecast Transfer to General Capital Reserve 700,500 800,500 825,000 850,000 875,000 900,000 Dedicated Capital Levy - 915,300 1,208,200 1,516,200 1,583,826 1,583,826 Gas Tax Funds 794,200 850,200 855,200 855,200 894,100 894,100 OCIF Funds - 793,377 1,216,174 1,216,174 1,216,174 1,216,174 www.centrewellington.ca OLG Funds 2,150,000 2,125,000 2,165,000 2,200,000 2,200,000 2,200,000 Transfer to Vehicle/Equipment Replacement 1,065,000 1,512,000 1,619,000 1,661,000 1,724,000 1,790,000 Total 4,709,700 6,996,377 7,888,574 8,298,574 8,493,100 8,584,100 AM Plan Recommended Phase-In 6,900,000 7,900,000 8,600,000 9,000,000 9,600,000 Optimal Capital Investment 15,000,000 15,500,000 15,900,000 16,400,000 16,900,000 Annual Funding Gap (8,003,623) (7,611,426) (7,601,426) (7,906,900) (8,315,900) 2020 DRAFT BUDGET 13 Asset Management Planning Tax Supported – Funding Gap A B C A-B A-C Projected Recommended Optimal Capital Recommended Annual Year Capital Phase-In Investment Phase-In Gap Funding Gap Investment 2020 Budget 8,298,574 8,600,000 15,900,000 (301,426) (7,601,426) 2021 Forecast 8,493,100 9,000,000 16,400,000 (506,900) (7,906,900) 2022 Forecast 8,584,100 9,600,000 16,900,000 (1,015,900) (8,315,900) www.centrewellington.ca 2023 TBD 10,600,000 17,400,000 TBD TBD TBD 11,500,000 17,900,000 TBD TBD 2024 2025 TBD 12,700,000 18,500,000 TBD TBD 2026 TBD 13,900,000 19,000,000 TBD TBD 2027 TBD 15,000,000 19,600,000 TBD TBD 2028 TBD 16,200,000 20,200,000 TBD TBD TBD 17,600,000 20,800,000 TBD TBD 2029 2020 DRAFT BUDGET 14
Budget Overview 2020 Consolidated Budget: 2019 2020 Tax Supported Operating Budget $27.5 million $28.9 million Water Supported Operating Budget $5.1 million $5.3 million Wastewater Supported Operating Budget $6.4 million $6.7 million www.centrewellington.ca Combined Capital Budget $21.7 million $18.5 million Total $60.7 million $59.4 million 2020 DRAFT BUDGET 15 Inflation Analysis Consumer Price Index ‐ Ontario Non ‐ Residential Building Construction Price Index Annual Average (based on quarterly results) Annual Average (based on 3rd quarter results) Source: Statistics Canada Source: Statistics Canada 3.5% 6.0% 3.0% 5.0% 2.5% 4.0% 2.0% 3.0% 1.5% 2.0% 1.0% www.centrewellington.ca 1.0% 0.5% 0.0% 0.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q3 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 CPI Ontario 2.3% 3.2% 1.2% 1.3% 2.3% 1.3% 1.7% 1.6% 2.3% 1.8% NRBCPI 0.8% 4.3% 1.8% 0.2% 1.5% 1.8% 3.3% 3.1% 5.2% 3.2% Combined Township Index (Tax Supported): 2020 Net Inflation Description Expenditures: Factor Operating Costs $ 19,662,864 1.8% Capital Transfers-Internal 4,116,200 3.2% Capital Transfers-External 4,671,383 3.2% Debt Payments (net) 417,459 0.0% Total Net Expenditures $ 28,867,906 2.2% weighted Township index 2020 DRAFT BUDGET 16
Dedicated Capital Levy (DCL) • How the DCL works: • 2% increase in base taxation levy, compounding annually • Average assessed residential property: Annual DCL Impact Year Impact Y1 Y2 Y3 Y4 Y5 Y6 Total www.centrewellington.ca • 2015 2% increase in base taxation $17 = $17 • 2016 2% increase in base taxation $17 + $18 = $35 • 2017 2% increase in base taxation $17 + $18 + $19 = $54 • 2018 2% increase in base taxation $17 + $18 + $19 + $20 = $74 • 2019 2% increase in base taxation $17 + $18 + $19 + $20 + $21 = $95 • 2020 2% increase in base taxation $17 + $18 + $19 + $20 + $21 + $22 = $117 2020 DRAFT BUDGET 17 2020 Fees and Charges • Regular practice to bring forward an update to fees and changes every December • Integrated into the annual budget process • Categories: Parks & Recreation Corporate Services www.centrewellington.ca Fire Services Infrastructure Services Cemeteries Water & Wastewater Building Services Township Wide Planning Services 2020 DRAFT BUDGET 18
2020 Fees and Charges • Fees & Charges affect the budget: • Play a role in estimating user fee revenues within the operating budgets • Funds equipment replacement within the capital budget www.centrewellington.ca • Makes sense to bring forward as part of the budget process • Decisions on fees and charges and budget can be connected 2020 DRAFT BUDGET 19 2020 Fees and Charges • Summary of 2020 Fees and Charge Increases: • Generally, fees and charges are increasing by 1.8% (operating inflation) • Township costs are increase at a rate higher than 1.8% • Therefore, increase in taxation subsidization for user fee based services • Some fees/charges staying at 2019 levels (or decreasing) www.centrewellington.ca • Due to the need to remain competitive (i.e. recreation, corporate services) • Fire – MTO driven rates – 1.7% increase from 2019 • Water & Wastewater – Increase of 2.5% and 4.0% respectively, based on the approved Rate Study (new rate study to be completed in 2020). 2020 DRAFT BUDGET 20
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