CHAPTER 4. Tax-supported Operating Strategy 2014 approved Operating Budget and Forecast

Transcription

1 CHAPTER 4 Tax-supported Operating Strategy 2014 approved Operating Budget and Forecast

2 The Community Energy, Downtown Renewal, Economic Development and Finance departments develop policies and programs designed to attract business investment and contribute to a thriving future for Guelph. This service area explores innovative financing models and business development practices to support affordable and sustainable growth. Organizational structure Finance and Enterprise Services Executive Director/ Chief Financial Officer Albert Horsman T x 5606 E albert.horsman@guelph.ca Executive Assistant Carole Al-Haydari T x 2310 E carole.al-haydari@guelph.ca Community Energy Corporate Manager Robert Kerr T x 2079 E robert.kerr@guelph.ca Downtown Renewal Corporate Manager Ian Panabaker T x 2475 E ian.panabaker@guelph.ca Economic Development General Manager Peter Cartwright T x 2820 E peter.cartwright@guelph.ca Finance General Manager Katrina Power T x 2289 E katrina.power@guelph.ca Financial Planning Financial Reporting and Accounting Procurement and Risk Management Taxation and Revenue

3 Financial snapshot 2013 Budget 2014 Approved Year/year increase Year/year increase Funding sources tax-supported User fee Grants Finance and Enterprise $3,868,900 $4,175,781 $306, % 84.17% 15.43% 0.40%

4 >> Finance The Finance department ensures accountability and transparency in the organization and helps make Guelph an economically resilient city. The department performs financial planning and budgeting, procurement and risk management, financial reporting and accounting, and taxation. Finance also provides advice and analysis to the corporation, and supports Council in making decisions to maintain the municipality s financial integrity in compliance with The Municipal Act, Financial Planning and Budgeting Provide long-range financial plans and strategic advice to City Council Support budget preparation and analysis for all City departments Monitor expenses and revenues in compliance with governing policies and legislation Develop user-fee models and perform rate analysis Procurement and Risk Management Purchase goods and services using open and transparent processes Ensure fair competition and compliance with governing policies and legislation Manage the City s insurance portfolio Financial Reporting and Accounting Manage general accounts receivable, accounts payable, and treasury functions Manage City investments, cash flow projections, debt issues, and reserve accounting Manage development charge accounting, line of credit maintenance, and accounting system integrity Prepare financial statements, FIR reporting, grant reporting, and manage the external audit Manage capital project accounting, capital variance reporting, and capital asset reporting system Taxation Bill and collect taxes Review assessment roll and maintain tax collectors roll according to governing policies, by-laws and legislation Prepare tax policies, review and establish payment options and process methods, and set tax rates Perform tax revenue analysis for City departments Prepare tax certificates and remit education taxes to school boards

5 Financial snapshot 2013 Budget 2014 Approved Year/year increase Year/year increase Funding sources tax-supported User fee Grants Finance $2,163,401 $2,356,282 $192, % 78.3% 21.7% 0.0% 2013 accomplishments Received an upgraded AA+ credit rating from Standard and Poor s Led the City s 2013 Development Charge (DC) background study as required by the Development Charges Act, 1997 in connection with the 2014 Development Charge Policy and By-law update Reduce bank charges and interest costs through banking services system conversion Implemented upgrades to Vailtech tax system to accommodate new services and enhance service delivery Created a Budget Monitoring Policy to formalize the City s approach to ensuring fiscal accountability Reviewed the City s purchasing procedure and controls Renegotiated the Elliot Promissory note to pass on savings realized by the City after achieving a favourable rate on refinancing a matured security Introduced monthly operating and capital variance reporting across the organizaton Introduced a multi-year budget guideline and forecast to improve predictability and control in the operating budget process Created an Asset Management Policy to meet provincially-legislated requirements and provide strategic direction for the development of a Corporate Asset Management Plan

6 Key performance measures Indicator target (1) Percentage of direct debt to own source operating revenue (<55 per cent) (2) Percentage of debt interest cost to own source revenue (<=10 per cent) (3) Ratio of debt to total reserve (1:1) 0.75:1 0.70:1 0.95:1 (4) Percentage of operating reserves to total expenditure (>5 per cent) (5) Percentage of purchase orders to Guelph suppliers (6) Percentage of tax accounts on pre-authorized payments (7) Percentage of outstanding taxes receivable (<5 per cent) (8) Return on investment rate (per cent) Explanation (1) The degree the City is leveraged in case of the need to repay debt (lower number is better) (2) The ability of the City to cover debt servicing costs (lower number is better) (3) The degree the City is leveraged in comparison to its liquid reserves (lower number is better) (4) The flexibility in finances to absorb unexpected expenditures (higher number is better) (5) Efforts to source local products and services (6) Pre-authorized payment method has lower arrears rate and administration costs (7) The effectiveness of tax collection methods as compared to overall taxes owed (lower number is better) (8) The return on unused cash balances and reserves (higher number is better)

7 2014 objectives Update DC Background Study and By-law before March 1, 2014 Complete Purchasing Policy and By-law update Automate DC accounting and parkland payment tracking into accounting system Complete rate revenue process and internal control review, and implement recommendations for better monitoring, reporting and forecasting Participate in water/wastewater rate review and update the water/wastewater long-range financial plan Investigate and implement self-service tax applications to achieve efficiencies and improve customer service Outsource printing of tax bills to achieve cost and productivity savings Implement Electronic Funds Transfer to reduce financial risk associated with issuing cheques and achieve cost savings Create a Year-end Operating Surplus Allocation Policy to formalize the City s approach and enhance accountability and transparency Key changes in 2014 Allocate finance support costs according to Ontario Municipal Benchmarking Initiative (OMBI) methodology which shows a reduction of $42,700 in internal recoveries Decrease external recoveries of $33,828 to align with 2013 actual recovery experience

8 Trend analysis $700,000 Year/year revenue comparison $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 User fees and service charges External recoveries Internal recoveries

9 Year/year expenditure comparison $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 Salary, wages and benefits Purchased goods Purchased services Internal charges

10 2014 approved budget 2013 budget 2014 base budget 2014 eff/new/ growth impact from capital 2014 approved budget 2014 budget change 2014 budget change Revenue User fees and service charges -$571,200 -$569,800 $0 -$569,800 $1, % Licenses and permits $0 $0 $0 $0 $0 0.0% External recoveries -$117,828 -$84,000 $0 -$84,000 $33, % Total revenue -$689,028 -$653,800 $0 -$653,800 $35, % Expenditure Salary, wage and benefits $3,306,655 $3,411,125 $0 $3,411,125 $104, % Purchased goods $56,970 $57,500 $0 $57,500 $ % Purchased services $75,304 $85,472 $0 $85,472 $10, % Financial expenses $0 $0 $0 $0 $0 0.0% Total expenditure $3,438,929 $3,554,097 $0 $3,554,097 $115, % Net before internal charges and recoveries $2,749,901 $2,900,297 $0 $2,900,297 $150, % Internal charges and recoveries Internal charges $2,000 $1,785 $0 $1,785 -$ % Internal recoveries -$588,500 -$545,800 $0 -$545,800 $42, % Total internal charges and recoveries -$586,500 -$544,015 $0 -$544,015 $42, % Net budget $2,163,401 $2,356,282 $0 $2,356,282 $192, %

11 >> Enterprise Services Enterprise Services mandate is to grow Guelph s economy using innovative approaches to retain and expand local businesses, and attract new investment. Together, the Community Energy, Downtown Renewal and Economic Development departments also identify and implement strategic initiatives and partnerships which contribute to a thriving future for Guelph. Community Energy Lead Guelph s Community Energy Initiative and achieve its goals for Guelph to use 50 per cent less energy by 2031 than it did in 2006, consume less energy per capita than comparable Canadian cities, and produce less greenhouse gas per capita than the current global average Implement the Corporate Energy Management Program to reduce financial risk and manage the City s operating costs Downtown Renewal Targets downtown development as a strategic priority for the City following the Downtown Secondary Plan (adopted 2012) and the Downtown Guelph Community Improvement Plan (amended 2012) Economic Development Create an environment that attracts and supports business investment Foster collaboration and partnerships among stakeholders Leverage local, regional and national assets to create sustainable economic development opportunities for Guelph Financial snapshot 2013 Budget 2014 Requested Year/year increase Year/year increase Funding sources tax-supported User fee Grants Enterprise Services $1,705,499 $1,819,499 $114, % 93.2% 5.7% 1.0%

12 2013 accomplishments Increased partnerships and local investments through the Mayor s Task Force on Community Energy and its four subcommittees Promoted the economic development potential of the Community Energy Initiative to regional, provincial, national and international audiences Applied to the Ontario Power Authority to sell solar power generated on City-owned property Implemented no/low-cost energy conservation measures at various City facilities including energy-efficient lighting systems and high-efficiency boilers Initiated studies for the development of the Downtown Implementation Strategy with the Downtown Advisory Committee Awarding 16 projects with a total City contribution of $208,383 under the Downtown Community Improvement Plan investment program Oversaw downtown development activities including construction of Market Commons, 5 Gordon Street (55 residential units and commercial space) and Riverhouse, 148 MacDonnell Street (130-unit residential condominium), planning applications and public meetings for 5 Arthur Street and 150 Wellington Street E, Marsh Tire (160-unit residential with mixed use) Coordinated four outgoing and four incoming trade missions intended to raise awareness about business investment opportunities in Guelph Developed Foreign Direct Investment strategy Launched a revised, community-based Business Retention and Expansion Program to identify local business issues and assist business investors in addressing expansion Led a number of strategic initiatives promoting Guelph as being investment-ready including work on the Integrated Operational Review, Guelph Innovation District, Hanlon Creek Business Park and a postsecondary school campus business case Key performance measures Local Employment Trends (shows health of Guelph s labour force) March 2012 March 2013 Change Unemployment Rate 5.6% 6.5% 0.9% Participation Rate 72.9% 68.5% -4.4% Employment Rate 68.7% 64.0% -4.7%

13 Municipal Tax Trends (balance residential/non-residential assessment base) $ Millions Per cent $ Millions Per cent $ Millions Per cent $ Millions Per cent $ Millions Residential Commercial Industrial Total Per cent Development Charge Trends (Measurement of new investment) $ Millions Per cent $ Millions Per cent $ Millions Per cent $ Millions Per cent $ Millions Residential Multi-Residential Industrial Commercial Institutional Total Per cent

14 Downtown Renewal Downtown Renewal Activities Investment Facilitation Special Projects and Partnerships Marketing and Communications Prosperity 2020 Strategic Directions 2011/ Comments Invest in the Downtown: Target icon status for a vibrant, transit connected, mixed use centre Continue to follow through on the City s investments in improving the Downtown Identify and promote potential residential development sites Downtown Promote the Downtown as a strong location for information and technology businesses Target the Downtown as a preferred location for new University or College space requirements Program the Downtown to enhance its role as a centre of civic life Market the Downtown to attract and retain business and jobs Celebrate and promote successes in the Downtown Tax-increment Based Grant Funding Approved Downtown Secondary Plan Approved Downtown CIP program uptake 5 Downtown Major Activation Grants awarded to date = over 185 new residential units and 8,000 m2 new commercial space Guelph Central Station and Market Square opened to the public Approval of 148 MacDonnell (TriCar) 5 Gordon (Market Commons) 5 Arthur Street South Master Plan process underway (Kilmer/Fusion) 150 Wellington E, Marsh Tire (Tricar) Downtown Renewal has started discussions with the innovation and start-up enterprises in the area on potential directions. Innovation Guelph and the Guelph Chamber of Commerce have moved to Downtown at 111 Farquhar Street No specific initiatives have developed as yet. Downtown location being considered under the Joint Campus Business Case study. Ongoing efforts with University and College on downtown presence may include potential Baker St and Arts partnerships The Market Square and Guelph Civic Museum openings have brought new programs, events, and ideas to the core. The upcoming completion of GO Transit s platform and Kiss n Ride sections of Guelph Central Station will complete this downtown gateway. A communications campaign will be launched in 2013 and will generate community awareness for downtown projects and activities.

15 Community Energy Performance measure Target/benchmark Actual 2012 Estimated 2013 Projected 2014 Community per capita energy reduction Total Corporate energy expenditures natural gas and hydro City capacity to manage energy consumption 2031 target 50 percent reduction from 2006 baseline Corporate utility expenditure Annual reduction in consumption (electricity and gas) Improve score each year: max score per cent reduction from 2006 base 18.5 per cent reduction from 2006 base 20 per cent reduction from 2006 base Data not available Data not available 2.2 per cent reduction

16 Corporate Energy Program Scorecard, Max score is 16 Energy management Scores Energy policy 4 4 Organising 3 4 Motivation 2 3 Information systems Marketing 3 3 Investment 3 3 Average score Awareness and information Scores Energy management responsibilities 2 3 Energy efficiency awareness 3 4 Reporting procedures 2 4 Review of energy performance 3 4 Ongoing training 2 3 Market awareness 2 3 Average score Financial management Scores Identifying opportunities 3 4 Exploiting opportunities 3 4 Management information 3 4 Appraisal methods 3 4 Human resources 4 4 Project funding 4 4 Average score Technical Scores Existing plant and equipment 2 3 Plant and equipment replacement 2 3 Maintenance procedures 2 2 Operational knowledge 2 3 Documentation and record keeping 2 3 Operational methods 2 3 Average score Total program scores

17 2014 objectives Integrate energy data monitoring and tracking system and report on savings achieved through Corporate Energy Management Program Increase local renewable energy investment, jobs, projects and activities to support the goals of the Community Energy Initiative Pursue large-scale solar development at former Eastview landfill site Pursue development of thermal energy networks consistent with the Guelph District Energy Strategic Plan Increase revenue by leasing space or investing in solar and other renewable energy projects Lead the Downtown Guelph Community Improvement Plan and related investment programs Facilitate development application processes within the planned area to achieve economic development objectives Deliver core programs: Investment Attraction, Investment Retention and Expansion, Community Investment Readiness, and Marketing, Promotion and Communications Develop and deliver programs to address regional economic development initiatives between the County of Wellington and the City and local workforce development Continue implementing recommendations of Integrated Operational Review Participate in the City s update of the Development Charges By-law Key changes in 2014 Increase compensation $87,400 due to new position related to downtown development expansion Internal staff chargeback increases $50,000 to be offset by a reduction in consulting fees Increase promotion material by $18,900 to implement communication plan developed in 2013

18 Trend analysis $120,000 Year/year revenue comparison $100,000 $80,000 $60,000 $40,000 $20,000 $0 Product sales External recoveries Grants Internal recoveries

19 Year/year expenditure comparison $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 Salary, wages and benefits Purchased goods Purchased services Other transfers Internal charges

20 2014 approved budget 2013 budget 2014 base budget 2014 eff/new/ growth impact from capital 2014 approved budget 2014 budget change 2014 budget change Revenue User fees and service charges $0 $0 $0 $0 $0 0.0% Product sales -$1,000 -$1,000 $0 -$1,000 $0 0.0% External recoveries -$108,343 -$110,800 $0 -$110,800 -$2, % Grants -$25,000 -$20,000 $0 -$20,000 $5, % Total revenue -$134,343 -$131,800 $0 -$131,800 $2, % Expenditure Salary, wage and benefits $1,048,500 $1,064,100 $87,400 $1,151,500 $103, % Purchased goods $76,300 $92,800 $0 $92,800 $16, % Purchased services $565,642 $484,514 $1,500 $486,014 -$79, % Other transfers $173,000 $175,500 $0 $175,500 $2, % Financial expenses $0 $0 $0 $0 $0 0.0% Total expenditure $1,863,442 $1,816,914 $88,900 $1,905,814 $42, % Net before internal charges and recoveries $1,729,099 $1,685,114 $88,900 $1,774,014 $44, % Internal charges and recoveries Internal charges $2,400 $52,685 $4,800 $57,485 $55, % Internal recoveries -$26,000 -$12,000 $0 -$12,000 $14, % Total internal charges and recoveries -$23,600 $40,685 $4,800 $45,485 $69, % Net budget $1,705,499 $1,725,799 $93,700 $1,819,499 $114, %