Proposed Regional Budget

Transcription

1 Proposed Regional Budget Presentation to Council Bill Hughes November 17, 2016

2 Overview of Presentation Part 1: Overview of the 2017 Budget Part 2: The Budget Operating Budget Capital Budget Part 3: Fiscal Strategy Debt Management Reserve Management Part 4: Financial Sustainability Part 5: Budget Review Process and Conclusion Proposed Budget - November 17,

3 Overview of the 2017 Budget Proposed Budget - November 17,

4 The tax levy at a glance Budget Year Approved 2016 Proposed % 2.85% 2.69% 2.35% 2.87% 2.65% Proposed Budget - November 17,

5 The proposed budget at a glance Operating Budget Capital Budget Ten-Year Capital Plan Capital plan compliant with the Province s Annual Repayment Limit $2.0B $783M $6.1B $2.1B $942M $6.1B Proposed Budget - November 17,

6 Fiscal impacts at a glance Peak outstanding debt New DC debt in the next 10 years Tax-levy debt in the next 10 years Rate-supported debt in the next 10 years Increase in reserves in the next 10 years 2017 $2.9B (2017) $1.1B $0 $0 $3.5B Proposed Budget - November 17,

7 Key features of the budget Continued implementation of the multi-year budget Small incremental tax increases to accommodate YRP needs and lower assessment growth Selected improvements to service levels More investment in transportation capital More investment in water and wastewater capital More savings for future capital asset replacement Proposed Budget - November 17,

8 Operating Budget Proposed Budget - November 17,

9 The value of multi-year budgeting Tightens the links between budgeting and strategic priorities Improves fiscal discipline Sets expectations about future tax levies Provides a longer term outlook for program and service planning Enables better long-term planning by internal departments and Regionally funded service providers Proposed Budget - November 17,

10 Proposed operating budget 2015 Approved 2016 Approved 2017 Budget 2018 Outlook Gross Expenditures ($M) 1,901 1,987 2,097 2,178 Non-Tax Revenue ($M) 963 1,006 1,071 1,108 Net Expenditures ($M) ,026 1,070 Assessment Growth* (%) Proposed Tax Levy Increase (%) *Reflects revenue from assessment growth. Proposed Budget - November 17,

11 Environment, CHS, Transportation and Police account for 83% of spending 2017 Gross Expenditures - $2.1 Billion Other 4% Environmental Services 27% Community & Health Services 24% Corporate Management & Governance 5% Financial Initiatives 8% Transportation Services 16% York Regional Police 16% Proposed Budget - November 17,

12 Program-specific and contracted services represent 30% of spending 2017 Gross Expenditures - $2.1 Billion Other 0.1% Contributions to non-capital reserves 1% Boards and Authorities (incl. YRRTC) 3% Program- Specific and Contracted Services 30% York Regional Police 16% Regional Salaries and Benefits 20% Capital Investment and Debt Repayment 30% Proposed Budget - November 17,

13 Non-tax revenue supports about half of the Region s gross expenditures 2017 Total Revenue - $2.1 Billion User Rates 18% Tax Levy 49% Grants & Subsidies 15% Development Charge Reserve Draws 12% Contributions from Reserves 2% Fees, Charges & Other Recoveries 4% Proposed Budget - November 17,

14 Police, Transportation and CHS account for about two thirds of every tax dollar 2017 Net Budget - $1.0 Billion York Regional Police 30% 31% Transportation Services 20% Other 5% 4% Corporate Management & Governance 9% Fiscal Strategy 14% Community & Health Services 17% Environmental Services 5% Proposed Budget - November 17,

15 Police budget higher due to increase in staffing 21 more FTEs in 2017 and $1.8 million for hiring in advance of anticipated retirements 2017 Budget 2018 Outlook Variance to the Outlook ($000s) 908 2,828 Change to approved net tax levy increase 0.09% 0.19% Proposed Budget - November 17,

16 Assessment growth is below forecast 2017 Budget 2018 Outlook Variance to the Outlook ($000s) 808 1,244 Change to approved net tax levy impact 0.08% 0.12% Proposed Budget - November 17,

17 Assessment growth trending down Assessment Growth % Fcst Proposed Budget - November 17,

18 The budget is about sound public policy and delivering high quality public services Police services Court services Forestry Transit Waste management Wastewater Water Regional roads Public health Economic development Social assistance Housing Long term care Paramedic services Planning Children s services Proposed Budget - November 17,

19 New initiatives in 2017 Examples of Initiatives Operation and maintenance of an additional 18 urban lanekilometres of Regional roads Enhanced traffic management systems to help improve traffic flow Continued implementation of the SM4RT Living Plan Enhanced Rent Supplement Program to support additional subsidized rental units 16 new Paramedic Services staff to support Regional growth 43 new York Regional Police staff and new funding to backfill anticipated retirements Proposed Budget - November 17,

20 Continued search for efficiencies Examples of Efficiencies Standardizing transfer of care at hospitals Implementing new fuel saving initiatives on buses Faster responses to requests relating to children with special needs Improving the preventative maintenance program in water and wastewater operations Impact Paramedic time savings of 20 minutes Savings of $880K in 2018 Waiting list reduction of 30% Savings of $725K in 2017 Proposed Budget - November 17,

21 There are always risks to be managed All departments are expected to manage their risks and keep spending within their approved budgets There are some risks beyond the Region s control that may create material pressures for the 2018 budget Potential Risks Potential loss of revenue due to fare integration upon opening of the Spadina subway extension Downloading of Presto costs Downloading of costs for Part III POA prosecutions and increased judicial costs Proposed Budget - November 17,

22 Tax impact on homeowner The average assessed value of a residential property in the Region is $577,000. $53 $35 A tax levy increase of 2.87% in 2017 equates to $66 per household, on average. $78 $51 $62 $62 $72 $72 $67 Proposed Budget - November 17,

23 Capital Budget Proposed Budget - November 17,

24 Proposed capital budget 2017 Capital Budget 2017 Capital Approval $942M 2017 Capital Spending Authority $2.6B Ten-Year Capital Plan $6.1B Proposed Budget - November 17,

25 High levels of capital investment ($ Millions) 1,200 1, Actual 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Actual Forecast Proposed 2018 Outlook Proposed Budget - November 17,

26 Delivering on the capital plan 100% % of Capital Budget Delivered 92% 80% 71% 77% 82% 82% 60% 53% 48% 40% 20% 0% 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Actual 2016 Forecast Proposed Budget - November 17,

27 Transportation has the largest share of the ten-year capital plan Year Plan - $6.1 Billion Transportation 44% Water & Wastewater 38% Other 18% Proposed Budget - November 17,

28 Record levels of roads investment ($ Millions) 240 Roads Capital Investment Actual 2007 Actual 2008 Actual 2009 Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Actual 2015 Actual 2016 Forecast 2017 Proposed 2018 Outlook Proposed Budget - November 17,

29 Large transit investment underway Transit Investments total $1.6 Billion Federal 3% Regional 41% Provincial 56% Proposed Budget - November 17,

30 $1.8 billion in growth-related water and wastewater infrastructure already in place ($ Millions) Water and Wastewater Growth-Related Infrastructure Forecast 2017 Proposed 2018 Outlook Proposed Budget - November 17,

31 Rehabilitation and replacement investments in water and wastewater infrastructure are increasing ($ Millions) Water and Wastewater Rehabilitation Expenditure Forecast 2017 Proposed 2018 Outlook Proposed Budget - November 17,

32 Proposed 2017 Capital Spending Authority of $2.6 billion ($ Millions) 1, Proposed Budget - November 17,

33 Top 10 capital projects by Capital Spending Authority Projects Proposed 2017 CSA ($ Millions) Spadina Subway Extension 287 Annex 200 Duffin Creek Incinerators 168 Upper York Sewage Solutions 164 Southeast Collector Rehabilitation 107 Southeast Transit Garage 101 Yonge Subway Extension 91 Toronto Water Supply 74 Unionville Housing Redevelopment 74 Trunk Sewer (Rehabilitation) 68 Proposed Budget - November 17,

34 York s ten-year capital plan remains among the largest in the 905 PEEL $5.4B YORK $6.1B DURHAM $4.2B HALTON $3.7B Figures reflect Ten-Year Capital Plans approved in 2016, except York, which is the 2017 proposed Ten-Year Capital Plan Proposed Budget - November 17,

35 Fiscal Strategy Proposed Budget - November 17,

36 The essence of the fiscal strategy Capital Management Debt Management Fiscal Strategy Intergenerational Equity Reserve Management Proposed Budget - November 17,

37 Debt Management Proposed Budget - November 17,

38 Net debt expected to reach $2.7 billion this year ($ Millions) 3,000 2,728 2,603 2,502 2,500 2,248 2,000 1,753 1,987 1,500 1,239 1,350 1, , Proposed Budget - November 17,

39 Water and wastewater projects account for 78% of current debt Net Debt $2.7 Billion By Sector Wastewater 46% Water 32% Others 4% Rapid Transit 8% Roads and Transit 10% Proposed Budget - November 17,

40 Roads and transit share of debt has been increasing 20% 18% Share of Net Outstanding Debt 18% 16% 14% 12% 11% 12% 12% 14% 10% 9% 8% 6% 4% 2% 0% Proposed Budget - November 17,

41 Development charges will be used to repay 89% of existing debt Net Debt $2.7 Billion By Debt Repayment Source User Rate 7% DC 89% Tax Levy 3% Other 1% Proposed Budget - November 17,

42 Debt servicing costs are significant ($ Millions) 400 Forecast Principal and Interest Payments (2017 Proposed Budget) Principal Interest Proposed Budget - November 17,

43 Debt management is reliant on future DC collections ($ Millions) DC Collections $267M Proposed Budget - November 17,

44 Fiscal strategy will reduce debt levels ($ Billions) Net Outstanding Debt Projection 2016 Budget vs Budget Peak Debt 2016 Budget - $2.9 B in Council Tabling - $2.9 B in Historical Outstanding Debt 2016 Budget 2017 Proposed Budget Debt peaks at $2.85 billion in 2017 and then declines Proposed Budget - November 17,

45 Reserves Proposed Budget - November 17,

46 Reserve management plan is key to achieving financial sustainability Long-term financial sustainability will require two things: Saving for future capital asset life cycle and replacement investments Using reserves judiciously to manage debt Proposed Budget - November 17,

47 High levels of reserves ($ Millions) 4,000 3,760 3,500 3,000 2,500 2,000 1,500 1,000 1,890 1,648 1,516 1, Toronto York Peel Durham Halton Ottawa Hamilton Waterloo 329 In 2015, York Region s reserves were second only to Toronto Proposed Budget - November 17,

48 Contributions to capital asset replacement reserves continue to grow ($ Millions) Proposed 2018 Outlook In 2013, Council approved incremental increases to capital asset replacement reserve contributions to achieve a 2% increase in 2017 Proposed Budget - November 17,

49 York Region s reserve balances are robust and growing ($ Millions) 3,000 2,661 2,000 1,380 1,559 1,661 1,675 1,890 2,042 2,200 2,137 2,331 1, Est Proposed Budget - November 17,

50 160% 140% 120% 100% Reserve to debt ratio will improve 80% 60% 40% 20% 0% Actual Est The reserve to debt ratio is forecast to increase in 2017 and exceed 100% by 2020 Proposed Budget - November 17,

51 Achieving Financial Sustainability Proposed Budget - November 17,

52 Growth creates an opportunity for financial sustainability Source: Statistics Canada ( ), Ontario Ministry of Finance, Spring 2016 Population Projections Update Proposed Budget - November 17,

53 Growing municipalities tend to have more fiscal capacity Fiscal Capacity ($000s) Municipal Growth Profile Declining Stable Growing Fast-Growing Sources: Fiscal capacity = Weighted average assessment per household, 2013, FIR; Household, 2013, MPAC; population, , Ontario Ministry of Finance Proposed The Quest for Financial Budget - Sustainability November 17,

54 The Region is making excellent progress towards financial sustainability A sound financial strategy is in place Working towards financial sustainability Debt will peak in 2017 and then fall Reserves to meet future asset management obligations are growing Full cost recovery for water and wastewater will be achieved by 2021 The Region will be a net investor by 2020 It appears feasible to fund forthcoming asset management plans Taxes are relatively low, leaving room for future needs Proposed Budget - November 17,

55 The remaining steps Next steps to achieving financial sustainability Stay the course on prudent financial decisions already made Vigilant oversight of the capital plan Increase in pay-as-you-go capital as part of the next multi-year budget (and possibly capital asset replacement contributions) Tax increases commensurate with desired service levels Federal and provincial subsidies for infrastructure mega-projects New revenue sources, primarily for growthrelated capital Proposed Budget - November 17,

56 Budget Review Process and Conclusion Proposed Budget - November 17,

57 Council / Committee Review Process Committee of the Whole December 1, 2016 Council November 17, 2016 Conservation Authorities York Region Rapid Transit Corporation Transportation Services Environmental Services Committee of the Whole December 8, 2016 York Regional Police Community and Health Services Corporate Management, Financial Initiatives and Court Services Council December 15, 2016 Proposed Budget - November 17,

58 Summary of the 2017 budget Third year of a multi-year budget that aligns with the term of Council and the Strategic Plan Wide-ranging, high quality services A robust capital plan Lower debt levels and higher reserve balances No tax levy debt in next ten years No rate-supported debt in the next ten years Proposed tax increases of 2.87% and 2.65% Proposed Budget - November 17,