Municipality of Chatham-Kent 2019 Draft Budget Presentation Budget Committee Information Meeting January 16, 2019 1
Agenda Item • Opening remarks – Budget Chair, Cl. Brock McGregor – CAO, Don Shropshire • Presentation of the 2019 Draft Budget 2
Budget Highlights • Over the past 3 years, Council has supported a budget direction of CPI % on the operating budget and a percentage increase consistent with the current approvals to meet our Asset Management Plan • Administration is presenting a budget in the range of 1.70% to 2.03% (Pending Provincial OMPF announcement) on the entire operations including: – 1% increase in the annual funding for infrastructure – an additional $550,000 for bridges (Year 3 of 3) – Council approved 12 hour shift ambulance funding and – other previous Council decisions and Requisitioning body’s requests Note: Budget subject to change with OMPF announcement • 3
AREAS OF STRATEGIC FOCUS 4
CKPlan2035 CRITICAL SUCCESS FACTORS That the Corporation of the The Corporation of the Municipality of Chatham- Municipality of Chatham-Kent is Kent is financially open, transparent and effectively sustainable. governed with efficient and bold, visionary leadership. To be a community that is responsive to emerging strategic priorities, able to adapt to and recover from change and taking advantage of opportunities. 5
• Council’s current priorities 2015 -2019 – Jobs (support economic development) – People (stabilize / grow our population) – Health (support healthy lifestyles) – Financial sustainability 6
Community Factors Challenges Proactive Actions Low Assessment Growth Investing in Economic Development Low Population/ Low Density Resident Attraction and Retention Strategy Significant Infrastructure Assets Asset Management Plan and Financing Plan 7
Key Staffing Recommendations Environmental System Leadership Sustainability Improvements • Environmental • Director, Human • Business Technician Resources and Solution Analyst, Organizational CityView • Environmental Development Planner • Business • Director, Legal Solutions Services Analyst, Capital Asset • Executive Management Assistant, Corporate Services 8
Budget Team presents the details within the 2019 Budget 9
Long-term Financing & Budgeting Strategy • In October, 2015 we brought forward the Long-Term Financial Strategy, the following are important principles we should follow: – One-time costs should be funded with one-time revenues – Sustainable funding for facility replacement and strategic objectives – Fully fund Asset Management Plan 10
Major Components of Variability in Tax Budget Process • Council’s challenge is to balance the levels of service in the Community against assessment growth and an increase in revenues. 1) New Tax Assessment 2) Level of Services 3) Revenues/Taxes/User Fees 11
Proposed Agenda • Budget Overview • Background information • Tax information • 2019 budget information • Infrastructure • Overview of reserves • Overview of staffing recommendations • Other budget information and next steps • Deputations • Discussion on draft budget presentation 12
Agenda Item • Budget Overview 13
For 2019 budget Administration was tasked with : • Meeting a budget target of CPI (1.8%) for operational needs and approval for infrastructure spending with the currently approved financing model. • Addressing the 0.37% approved Council decisions and a requisitioning body’s request that are carried into the 2019 budget • Continued funding of the approved Financing Plan for the 2017 Asset Management Plan – a recommended 1% increase in infrastructure spending, plus the final year of the three year bridge infrastructure funding plan of $550,000 14
Council Decisions affecting 2019 Year of 2019 Tax Impact Amount Cumulative impact 2013 Reduction - Winter Control Budget (Salt - $500,000) 2019 125,000 125,000 2018 Additional 12 hour ambulance shift 2019 348,040 473,040 2017 Soccer/Canteen building maintenance/lifecycle 2019 24,828 497,868 2018 Removal of Special Event Late fee 2019 26,100 523,968 2018 Live Streaming of Council Meeting 2019 25,000 548,968 Total amount that must be recaptured 548,968 0.37% 15
Council Requests for 2019 Budget • Support operations of summer camps in Tilbury, Bothwell and other rural communities in the summer of 2019 - $6,500 per community added • Reinstate the primary care practitioner recruitment and retention program - $100,000 • Community engagement support ($400,000 - $62,000 recommended in budget) = $338,000 • These amounts would need Council direction to be added to the budget and will be highlighted during deliberations 16
Overview of 2019 Draft Budget Requests Considered Recommended Budget Tax $ Tax % Tax $ Tax % Comment Municipal Operations including Police Savings of $554,504 included In provision Provisions for labour matters 2,095,998 1.40% 1,131,694 0.75% from Bill 148/Bill 47 changes Inflation 2,154,686 1.44% 1,957,845 1.31% 2018 budget decisions: Net base budget requirement 662,101 0.44% 662,101 0.44% Ontario Municipal Partnership Funding grant increase -500,000 -0.33% -500,000 -0.33% Assessment growth -1,250,000 -0.83% -2,100,000 -1.40% Revenue opportunities -487,572 -0.33% -699,572 -0.47% Base budget requirements -922,574 -0.62% -1,145,251 -0.76% Subtotal for existing services 1,752,639 1.17% -693,183 -0.46% Strategic investments 6,308,635 4.21% 2,585,424 1.73% Fund from revenues, reserves - included One time requests 5,040,833 3.36% 0 0.00% in Tab 5 Other Funding Available Asset Management Plan requirement net of new asset funding 651,891 0.43% 651,891 0.43% Ministry requirement Service reductions options submitted -43,134 -0.03% 0 0.00% Total Change 13,710,864 9.14% 2,544,132 1.70% OMPF potential reduction 500,000 2.03% 17
2019 Tax Budget Avg. Household Taxes $2,850 (Assessment $168,300) Annual Weekly Tax % Impact Impact Municipal Operations: Municipal Departments 0.54% $ 15.39 $ 0.30 Council Decisions and Uncontrollables 0.37% $ 10.55 $ 0.20 Police Services $ 10.26 $ 0.20 0.36% 1.27% $ 36 $ 0.71 Infrastructure renewal: 0.43% $ 12.26 $ 0.24 Recommended AMP requirements Tax Levy Recommended AMP requirements Gas Tax Funding 0.00% 0.00% Recommended AMP requirements OCIF Funding 0.43% $ 12 $ 0.24 $ 48 $ 0.94 Total Recommendation 1.70% OMPF potential reduction 2.03% $58 $1.11 18
Agenda Item • Background information 19
Chatham- Kent’s Customers – Municipal tax based: Rate based: – Households 48,051 • Hydro customers 33,059 – Businesses: • Water customers 38,651 • Commercial 2,578 • Sewer customers 29,699 • Shopping 15 • Large office 8 • Industrial 656* • Large industrial 14 * Industrial includes wind turbines Service level agreements are in place for the cost of services provided for rate based services 20
2018 Revenue Breakdown 21
2018 Base Budget Expenses by Type 22
2018 Avg Household Contribution to Municipal Services (based on 2018 Residential Assessment of $164,984 = $2,835) 23
Net Expenditure Changes – Tax Impact 2008 to 2017 (10 years) Chatham-Kent Net Expenditure Changes - Tax Impact 2009 to 2018 (10 years) 40.0% 27.9% 30.0% 18.8% 20.0% 15.8% 10.0% 5.9% 5.5% 3.0% 1.2% -0.7% -4.2% 0.0% -1.6% -10.0% -9.4% -20.0% -18.5% -30.0% 24
Comparison of Tax Changes to CPI Tax Tax Revenue Rate 10 year increase * 27.9% 18.5% Less: Net infrastructure investment 18.8% 18.8% Change for existing services 9.1% -0.3% CPI during same period 15.8% * Difference of 9.4% is from assessment growth 25
Overview of Debt Debt Outstanding at December 31, 2018 PUC Municipality Total Rates Locals Taxes Locals PUC Municipality Total 43,937,570 0 14,550,412 18,242,205 43,937,570 32,792,617 76,730,187 • Rates and taxes: – debt being funded by those revenue streams • Locals: – debt being funded by local improvements or senior government grants 26
Debt Principal Outstanding Tax Funded Debt Only 14,000,000 12,000,000 10,000,000 Roads 8,000,000 Bridges 33% Riverview Gardens John D. Bradley Centre 6,000,000 4,000,000 2,000,000 0 27 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
CK Financial Position CK Balance Sheet at December 31, 2017 Assets (excluding capital): Financial 306,428,000 Inventory 1,003,000 Prepaid expenses 410,000 307,841,000 Capital assets at historical cost, net of depreciation 838,574,000 Total assets 1,146,415,000 Liabilities 206,943,000 Accumulated surplus 939,472,000 Total liabilities and equity 1,146,415,000 – The $308M of liquid assets to pay off $207M of liabilities – Net Asset Position of $101M – Net Asset Position: • This places us in a solid financial position to ensure funding is available for ongoing operations and unfunded liabilities • This trend has been moving into a positive direction over the past 6 years 28
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