January 2020 City of Trail 2015 - 2019 Financial Plan 1 General - PowerPoint PPT Presentation

January 2020 City of Trail 2015 - 2019 Financial Plan 1

• General Overview – Legislation, process • Summary – Tab 1 of Budget Manual, assessment update, high level overview, impacts • Expenditures – Tab 3 of Budget Manual, review and approval of individual departmental budgets City of Trail 2015 - 2019 Financial Plan 2

City of Trail 2015 - 2019 Financial Plan 3

THE MUNICIPAL BUDGET/FINANCIAL PLAN  Section 165 of the Community Charter indicates that a municipality MUST annually adopt a Financial Plan by Bylaw.  The planning period for the Financial Plan is 5 years, that period being the year which the plan is specified to come into force and the following four years.  The Financial Plan must set out the objectives and policies of the municipality for the planning period.  The Financial Plan must set out the following for each planning period:  Proposed expenditures by the municipality  The proposed funding sources  The proposed transfers to or between funds City of Trail 2015 - 2019 Financial Plan 4

THE MUNICIPAL BUDGET/FINANCIAL PLAN  The total of the proposed expenditures and transfers for a year must NOT exceed the total of the proposed funding sources. – THE BUDGET MUST BE BALANCED.  The proposed expenditures must set out separate amounts for each of the following as applicable:  The amount to pay interest and principal on municipal debt.  The amount required for capital purposes.  The amount required for other municipal purposes.  Any deficiency with respect to revenue less expenditures must form part of municipal expenses in the following year :: The Budget continues to include a $340,000 transfer from reserves based on the current budget and projected revenue shortfall :: City of Trail 2015 - 2019 Financial Plan 5

THE MUNICIPAL BUDGET Budgets are calculated considering historical spending patterns as well as information that is available that will impact the budget in the current year. The budget is a “status quo” with adjustments included to deal with longer term capital (Bridge Reserve Transfer) and future potential increases in staffing costs. Council should review the budget and make adjustments as deemed necessary. City of Trail 2015 - 2019 Financial Plan 6

2020 BUDGET REVIEW The review and approval process of the 2020 Budget includes the following components. The budget must be formally approved by May 15 th :  Overview / Presentation  Expenditure review/approval  Revenue review/approval  Budget changes / amendments  Property tax options / implications  Capital Budget review and approval  Public consultation (as determined by Council)  Finalize all budgets and tax rates  Adopt Financial Plan and Property Tax Rate Bylaws City of Trail 2015 - 2019 Financial Plan 7

2020 BUDGET – REVIEW OBJECTIVE Primary Budget Objective: Determine the “equilibrium” property tax requirement. TOTAL Municipal Expenditures subtracted from TOTAL Other Municipal Revenues equals EQUILIBRIUM Property Tax Requirement Total Revenues must equal total Expenditures so the budget is balanced. City of Trail 2015 - 2019 Financial Plan 8

BUDGET MANUAL The Budget Manual is organized as follows and has six main sections:  Tab 1 – High level summary and explanation of the 2020 Budget.  Tab 2 – Revenues  Tab 3 – Expenditures  Tab 4 – Supporting information and analysis  Tab 5 – Five year Financial Plans (General, Water, Sewer) – This forms the basis for the Financial Plan Bylaw that must be adopted by Council.  Tab 6 – Detailed listing of General Ledger accounts for the General Revenue Fund. City of Trail 2015 - 2019 Financial Plan 9

2020 BUDGET – REVIEW OBJECTIVE  Council should consider the longer-range impact of decisions and how they will impact the financial position of the City, including future property tax revenue requirements.  Decisions made or not made can impact future years (i.e. capital funding, transfers to reserves) and have a compounding impact.  This is especially important when considering the Five Year Plan. The Five Year plan suggests ongoing increase in property taxes to fund anticipated ongoing inflationary increases in operating expenses. City of Trail 2015 - 2019 Financial Plan 10

2020 BUDGET – PROPERTY TAX RATES  The last stage of the process once expenditures and revenues are finalized, involves the apportionment of property taxes amongst the various rate classes.  In 2016 the flat tax for residential properties was increased from $130 to $260 to offset the impacts that resulted from disproportionate changes in assessments on a year over year basis. The flat tax has remained unchanged.  Initial example property tax calculations can be found in Tab 4 of the Budget Manual.  The calculation assumes no changes to the flat tax or variances to the business ratio from last year. 61.33% of the budgeted increase in the municipal property tax levy is apportioned to Class 4 – Major Industry. City of Trail 2015 - 2019 Financial Plan 11

City of Trail 2015 - 2019 Financial Plan 12

2020 ASSESSMENT ROLL BM 110 1. ROLL REVIEW - COMPLETED ROLL ROLL AT DECEMBER 31, 2019 Class 2019 Total Assess 2020 Change Assessments Change Assessments $ % CL1 - Residential 734,704,200 42,193,600 776,897,800 42,193,600 5.74% CL2 - Utilities 16,622,335 129,680 16,752,015 129,680 0.78% CL4 - Major Industry 213,070,300 4,467,900 217,538,200 4,467,900 2.10% CL5 - Light Industry 2,642,000 14,000 2,656,000 14,000 0.53% CL6 - Business 125,284,700 1,644,400 126,929,100 1,644,400 1.31% CL7 - Managed Forest 511,000 66,000 577,000 66,000 12.92% CL8 - Rec/Non-profit 1,477,000 173,100 1,650,100 173,100 11.72% 1,094,311,535 48,688,680 1,143,000,215 48,688,680 4.45% Average single family residence: 2020 assessed value 230,062 2019 assessed value 217,689 $ Change 12,373 % Change 5.68% The changes are almost entirely market driven. There is very little new development being added to the assessment roll. “New” residential assessments are estimated at $4.5 million, which generates revenue in the amount of $18,800 or . City of Trail 2015 - 2019 Financial Plan 13

ASSESSMENT TREND – 2007 TO 2020 BM Page 113 1,000,000,000 800,000,000 Class 8 600,000,000 Class 7 Class 6 Class 5 Class 4 Class 2 400,000,000 Class 1 200,000,000 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 14

PRELIMINARY TAX CALCULATION 2020 $260 Residential Flat Tax 2020 TAXES MUNICIPAL RATE CALCULATION Class 2020 RATIO DEBT DEBT GENERAL GENERAL FLAT TOTAL TOTAL % Assessed RATE TAX RATE TAX TAX TAX RATE Total Value 776,897,800 1.00 0.2239 173,947.42 3.9186 3,044,351.72 873,600 4,091,899.14 4.1425 26.59% Cl 1 - Residential 16,752,015 9.66 2.1620 36,217.86 37.8380 633,862.74 670,080.60 40.0000 4.35% CL2 - Utilities 217,538,200 10.48 2.3445 510,018.31 41.0591 8,931,922.71 9,441,941.02 43.4036 61.33% CL4 - Heavy Industry 2,656,000 0.72 0.1604 426.02 2.8214 7,493.64 7,919.66 2.9818 0.05% CL5 - Light Industry 126,929,100 2.22 0.4998 63,439.16 8.7110 1,105,679.39 1,169,118.55 9.2108 7.59% CL6 - Business 577,000 2.07 0.4619 266.52 8.0997 4,673.53 4,940.05 8.5616 0.03% CL7 - Managed Forest 1,650,100 1.36 0.3050 503.28 5.3371 8,806.75 9,310.03 5.6421 0.06% CL8 - Rec/Non-profit 1,143,000,215 784,818.57 13,736,790.48 873,600.00 15,395,209.05 100.00% City of Trail 2015 - 2019 Financial Plan 15

PRELIMINARY TAX CALCULATION 2020 vs 2019 Class 2019 2020 Change 2019 v 2020 Total Taxes % Total Total Taxes % Total Total Taxes % Change 3,839,234 26.28% 4,091,899 26.58% 252,666 6.58% Cl 1 - Residential 664,893 4.55% 670,081 4.35% 5,187 0.78% CL2 - Utilities 8,959,691 61.33% 9,441,941 61.33% 482,250 5.38% CL4 - Heavy Industry 7,470 0.05% 7,920 0.05% 450 6.02% CL5 - Light Industry 1,124,155 7.70% 1,169,119 7.59% 44,964 4.00% CL6 - Business 4,660 0.03% 4,940 0.03% 280 6.01% CL7 - Managed Forest 8,780 0.06% 9,310 0.06% 530 6.04% CL8 - Rec/Non-profit TOTAL 14,608,883 100.00% 15,395,209 100.00% 786,326 5.38% City of Trail 2015 - 2019 Financial Plan 16

BM Page 5 2020 2019 VAR OVER 2019 BUDGET Budget Budget Actual $ % Expenditure: General government 2,859,400 2,687,300 2,622,734 172,100 6.40% Protective services 2,463,050 2,414,350 2,376,541 48,700 2.02% Transportation services 3,733,800 3,661,900 3,368,885 71,900 1.96% Environmental health services 384,900 384,900 380,869 0 0.00% Public Health and Welfare 300,950 296,250 302,865 4,700 1.59% Environmental development 181,750 177,400 180,909 4,350 2.45% Recreation 3,836,700 3,734,150 3,801,576 102,550 2.75% Library and cultural services 1,150,450 1,122,950 1,064,236 27,500 2.45% Debt charges 1,165,200 1,158,700 1,172,998 6,500 0.56% Transfers own reserves and funds 1,349,550 999,550 999,550 350,000 35.02% General capital fund 2,682,550 2,632,550 2,632,550 50,000 1.90% Municipal Airport 603,850 578,950 569,251 24,900 4.30% Unconditional transfers 45,350 45,100 42,533 250 0.55% Transmission of taxes levied for other governments 8,132,900 8,075,350 8,021,908 57,550 0.71% TOTAL EXPENDITURES 28,890,400 27,969,400 27,537,405 921,000 3.29% City of Trail 2015 - 2019 Financial Plan 17