Operating Budget - February 26, 2013 1
Overview � Budget Process � 2013 Operating Budget Summary � New Assessment � Grants � Recommendations � Utilities � Next Steps 2
Budget Process � February 26, 2013 – 2013 operating budget presentation and approval � March 5, 2013 – 2014-2015 operating budget � March 8, 2013 – Greater Victoria Public Library Budget Presentation – 2013 capital budget presentation and approval � April 2013 – Financial Plan and Tax Rate Bylaws preparation and adoption 3
2013 Operating Budget 4
Budget Direction � Council direction for a 3 year operating budget with a maximum annual tax increase of 3.25% � To achieve a 3.25% annual tax increase, the operating budget must be reduced by a minimum of $4.3 million over the next 3 years � On average $1.5 million of unanticipated costs are added to the budget each year; assuming this trend continues an additional $4.5 million in cuts may be required. � These cuts must be ongoing permanent reductions, not one-time cuts. 5
Steps Taken 1. Principles for budget containment developed 2. Council provided list of ideas for staff to review for potential budget reductions. 3. 5% net operating budget reduction exercise conducted with Departments 4. Public consultation 5. Organizational review commenced 6
Budget Balancing Principles A. Share of Budget Cuts a. Consider existing assets before adding new. b. Split the tax increase between Capital and Operating as follows: a. Capital budget property tax levy increase 1.25% b. Operating budget property tax levy increase max 2.0% c. The City’s share of Police and Library budgets will be capped at 2% annually B. Service Delivery – Least impact on the community a. Changes to service delivery methods b. Reduction in service levels c. Elimination of services C. Salary and Benefits a. Compensation budgets will be capped at affordable levels D. New Revenue a. Implement new revenues with realistic estimates and timelines 7
2013 Budget Balancing October 11, 2012 Presentation February 26, 2013 Changes 1,684,700 1,684,700 2013 Reduction Needed as per the 2012-2016 Financial Plan Forced Growth (Hydro, postage, fleet costs, insurance, WCB, LTD) 620,000 620,000 101,500 101,500 Increased insurance and claims (650,000) (650,000) Departmental reductions (500,000) - (500,000) Vacancy management 40,000 - 40,000 Council meeting webcasting Governance funding 15,000 - 15,000 Increased lease revenues (95,000) (95,000) Increased payments in lieu of taxes (293,000) (293,000) 64,400 64,400 Library additional increase (including operating costs) (503,600) (503,600) Police Department net budget reduction (275,000) (275,000) Capital property tax levy increase reduction to 1.25% No salary increases for Exempt (200,000) (200,000) No salary increases for Council (9,000) (9,000) 1,209,700 (1,209,700) - 2% Target Budget Request Amount Over Reduction Change Target Police (564,300) (503,600) 60,700 Library (including operating costs) (38,600) 64,400 103,000 8
2013 Operating Budget Summary 2012 2013 Change Percen t EXPENDITU RES General 78,059,478 79,307,961 1,248,483 1.60% Police 45,851,151 46,778,120 926,969 2.02% Corporate 15,635,509 15,206,556 (428,953) -2.74% Greater Victoria Public Library 4,090,345 4,275,183 184,838 4.52% Debt principal, interes t and reserve transfer 7,827,583 7,827,583 0 0.00% Self-financed Programs 32,794,348 33,731,170 936,822 2.86% Funding T ransfer to Capital * 10,501,592 10,894,852 393,260 3.74% 194,760,007 198,021,425 3,261,418 1.67% REVEN UES Non-Tax 26,045,576 25,623,251 (422,325) -1.62% Corporate 17,903,343 16,825,243 (1,078,100) -6.02% Police 9,650,012 9,792,281 142,269 1.47% Self-financed Programs 32,794,348 33,731,170 936,822 2.86% 86,393,279 85,971,945 (421,334) -0.49% Property Tax Levy 108,041,728 108,366,728 325,000 0.30% New As ses sment R evenue 325,000 165,000 (160,000) -49.23% 108,366,728 108,531,728 165,000 0.15% 194,760,007 194,503,673 (256,334) -0.13% Pro perty Tax Increase (0) 3,517,752 3,517,752 3.25% Op erating and Capital Prop erty Tax Increase * Some capital b udgets ($9 62,00 0) were m oved to the o perating bu dget to conform with ne w acco unting rules. Those bud gets were funde d throu gh the capital p ro perty ta x levy. Th at portion h as been mo ved back to th e ope ra tin g bud get. 9
2013 Increase Explanation 784,700 Police Department 184,838 Library 1,355,000 Capital Pro perty T ax Levy 650,000 CUPE 2013 salary increase Property tax p enalty revenue decrease 120,000 200,000 Property tax write-off increase Coun cil meetin g web casting 40,000 15,000 Governan ce fund ing 168,214 Various other ad justments 3,517,752 10
Revenues by Type 11 11 11
Revenues by Type – Excluding Utilities 12 12 12
Expenditures by Type 13 13 13
Expenditures by Type – Excluding Utilities 14 14 14
Salaries and Benefits 15 15 15
New Assessment Revenue 16 16 16 16
New Assessment Revenue � New assessment revenue is composed of: – New construction and renovations – Demolitions – Property class changes (i.e. a commercial property is redeveloped as residential or a property has been rezoned) � Assessed values are based on: � physical condition of the land and improvements as at October 31 of the previous year � market values as at July 31 of the previous year � As per the Financial Sustainability Policy, new assessment revenue is transferred into infrastructure reserves 17
Historical New Assessment 2013 2012 2011 2010 2009 2008 New Assessment Values 68,035,000 100,661,885 228,503,298 379,406,312 389,924,566 248,863,858 New Assessment Revenue 165,000 328,110 1,659,979 1,878,834 1,958,697 1,376,425 The 2013 “preliminary” new assessment revenue is low ($165,000) for the following reasons: – Fortis moved from Victoria to Langford (the property was re-classed from utility to business; the Utility Class tax ratio in 2012 was 8.335 compared to 3.3663 for Business) – Very little new commercial development included in the 2013 assessment roll 18 18
New Assessment Values by Class New Assessment Values 100% 80% 60% 40% 20% 0% -20% 2013 2012 2011 2010 2009 2008 Residential Utilities Light Industry Major Industry Commercial Recreation/Non-profit 19
Grants 20 20 20 20
2013 Grants � Grants have been held at 2012 budget level 21
2013 Grants 2013 2012 Budg et Budg et C orporate Budg et Corpo rate G rants C om munity Socia l P lanning Co uncil 16,590 16,590 G reater Victoria V o lunteer Society 11,439 11,439 C risis Intervention & Pu blic Inform ation S ociety of G rea ter V ictoria 20,103 20,103 S t John A mbulance 2,221 2,221 Integrated Recreation 28,943 28,943 V ictoria Y outh C ouncil 20,000 20,000 G reater Victoria F ilm C om m ission 45,000 45,000 S portHost 7,500 7,500 M iscellaneou s - - T ourism V ictoria 47,500 47,500 V IA TeC 22,500 22,500 50,000 50,000 G reater Victoria C ham ber of Comm erce Arts and Culture 20,000 20,000 M aritim e M useu m Com m u nity Develop m ent Pro gram G rants C oa lition to E nd Hom elessness 100,000 10 0,000 391,796 39 1,796 E ngineering Departm e nt Bu dget Transp ortation and D ev elop m en t G rants A dult S chool C rossing G uards 30,000 30,000 Civic S ervices G rants V ictoria Com post E ducation Cen tre 13,530 13,530 43,530 43,530 22
2013 Grants continued 2013 2012 Budget Budget Planning and Development Department Budget Planning and Development Grants Victoria Civic Heritage Trust - Building Incentive Grant 420,000 420,000 Victoria Civic Heritage Trust 103,470 103,470 Victoria Heritage Foundation 189,368 189,368 Brochure - This Old House, Licence Fees 7,257 7,257 720,095 720,095 Sustainability Department Budget Community Development Program Grants Special Project 86,739 86,739 Program Grants - Greater Victoria Bike to Work Society 2,500 2,500 2,000 2,000 Program Grants - Youth Empowerment Society 2,000 2,000 Program Grants - Victoria AM Society 15,000 15,000 Program Grants - Victoria Attractions Association Youth Outreach - Youth Empowerment Society 15,000 15,000 Youth Outreach - Fairfield Community Association 15,000 15,000 Youth Outreach - Burnside Gorge Community Association 10,000 10,000 Youth Outreach - James Bay Community Project 10,000 10,000 Youth Outreach 10,000 10,000 Downtown Community Association - One-time - - Adult Outreach (Our Place) 25,000 25,000 193,239 193,239 23
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