Draft 2014 Business Plan

Transcription

1 Draft 2014 Business Plan September 26, 2012 Budget Breakfast Meeting December 3, 2013 Setting the Foundation 1

2 Disclaimer This presentation has been prepared by City of Barrie staff. It has not been adopted, approved, disapproved, or otherwise acted upon by City Council. 2

3 Key Messages About the 2014 Business Plan Responds to priority service areas identified by Council Continues the direction started in 2010 to address asset renewal and maintenance needs Increases reliance on user fees and charges Anticipates future financing requirements by minimizing debt and focusing on the City s highest-priority needs Maintains Barrie s position as a community with lower than average property taxes 3

4 Responsive Full year of redesigned Transit service Improved stormwater management services Corporate Customer Service Strategy Election preparation and management Growth management 4

5 The Recommended 2014 Business Plan Includes: 1. Services and service levels resulting in a 2.2% property tax increase 2. Water and wastewater services reflecting all current regulatory and legislative standards, resulting in a 7% increase for water rates and a 13% increase for wastewater rates 3. A $152M capital budget, including $53M in new projects and $99M in projects approved in prior periods and ongoing in

6 Responsive 2014 Cost Changes from 2013 Change ($) 2014 v Annualization of 2013 Program Changes 893,000 Asset renewal 2,567,000 Employee Costs 2,762,000 Tax Rate subsidy for Parking Services 814,000 Tax Rate Impact (%) Tax-supported debt service costs (net) 240,000 Salary Gapping (160,000) Revenue Growth from New Assessment (1,380,000) Base budget reductions (LSRA, Vehicle Repairs, MPAC Fee) (370,000) Other individually immaterial changes to base budget 526,000 Total Municipal Services (A) 5,952, % 6

7 Responsive Description Change ($) 2014 v * Recommended Service Level Changes ( SLCFs ) (358,000) ** Pending Adjustments (814,000) Tax Rate Impact (%) (B) Total SLCFs + Pending Adjustments (1,127,000) (0.5%) (A) Total Municipal Services (CFWD from previous slide) 5,952, % (A+B) Total Municipal Services + SLCFs + Pending Adjustments 4,779, % 7

8 Managing Services and Costs Choices about how we pay for the services in the Business Plan include consideration of: Efficiency improvements Service adjustments Revenue increases Reliance on debt and/or reserve financing Effective stewardship involves assessing both the present and future effects of today s decisions 8

9 Property Tax Comparison !"#$#% & '( )* + +,--.*/ *.*/ Source: BMA Municipal Study, 2013 (Draft) 9

10 We Are Managing our Financial Condition 2.5 $7, $349 $315 $277 $1,953 $3,198 $4,076 $5,043 $5,449 $6,000 $5,000 $4,000 $3,000 $2,000 $1, * Financial Assets:Liabilities Net Debt:Total Revenue Debt per Household Forecast $0 * 2013 projected 10

11 Why Do Debt Levels Matter So Much? Decisions about debt influence a City s credit rating Lower credit rating increases the interest charge on future debt Having a plan, and sticking to it, helps maintain or improve a credit rating Debt has to be repaid Debt payments reduce the amount of operating funds available for other programs and services Like a household, relying too much on debt financing without ensuring the repayment plan is affordable eventually prompts cities to reconcile wants and needs 11

12 Debt Payment Forecasts Remain Within Annual Repayment Limits $70 $60 $50 $40 Million ns $30 $20 $10 $ Forecasted Debenture Payments Estimated Annual Debt Repayment Limit 20% of own-source revenues 12

13 Funds Set Aside for Asset Renewal Are Lower Than Funding Requirements Market Cost to replace asset Amortization based contribution Tax Capital Reserve City s share of Growth (Greenfield) City s share of building capacity (Intensification) Strategic Initiatives and new opportunities 13

14 Choices That Increase Revenues Are Available 4.2% 4.0% Municipal Taxes as a % of Household Income 3.8% 3.6% 3.4% 3.4% 3.4% 3.5% 3.5% 3.6% 3.2% 3.1% 3.1% 3.2% 3.0%

15 Low Reliance on Funds From Senior Governments 14% 12% 10% 8% 6% 4% 2% 0% * Government Transfers:Total Revenue * 2013 projected 15

16 Service Partners County of Simcoe Budget request of $21.6 Million increase of $1 Million from 2013 Police Budget Budget request of $46M increase of $1.2M or 2.5% Library Budget Budget pending anticipate a plan that reflects Council s Budget Directions 16

17 Parking Budget The year over year spending has not changed significantly, however, the parking rate supported budget generates an operating deficit of approximately $814K per year Historically, the operating deficit has been funded by the Parking Rate Reserve, however, this reserve will be fully depleted at the end of A staff report will be presented to Council in December that recommends rate changes that reduce this deficit. 17

18 Water and Wastewater User Rate Budget 18 18

19 Water System Assets 1 Surface Water Treatment Plant 12 - Production Wells 620 kms Water main 3,600 Hydrants 24,000 Valves 5 - Water Storage Facilities 6 Booster Pumping Facilities 19 19

20 Wastewater System Assets 1 Expanded/upgraded Waste water Treatment Facility 1 Biosolids Storage/Treatment Facilities 526 kms Sanitary Sewers 7,700 Maintenance Holes 42,500 Service Connections 13 Sewage Pumping Stations 20 20

21 2014 Draft Capital Budget 21

22 Capital Planning Objectives Demonstrate good stewardship over the City s existing assets to support services at desired levels Additional capacity needs of the City are provided for in a sustainable manner Develop an optimal investment program Produce a Capital Plan that is: Reliable and executable Addressing the City s most critical needs Matched with available financial resources Aligned with advancing Council s Strategic Goals 22

23 Capital Plan - Total Planned Expenditures by Funding Source ($000) RecOther $1,388 1% Grants $37,022 20% User Rate $33,158 18% Development $1,848 1% Reserves $82 FedGasTax 0% $6,748 3% RecDCA $18,724 10% Debenture $34,632 19% Tax Capital Reserve $52,031 28% 23

24 Capital Plan - Total Planned Expenditures by Asset Class ($000) Leasehold Improvement $56 0% Machinery & Equipment $22,355 12% Buildings $32,042 17% Land Improvements $24,884 13% Land $1,075 1% Computer Equipment $12,436 7% Fleet $5,517 3% Infrastructure $87,268 47% 24

25 We need your participation: Visit to learn more about our 2014 Business Plan and the process we re using to assemble it Please get engaged - give us your thoughts on what you heard today Attend General Committee or Council Send feedback: Ed Archer, GM of Community and Corporate Services ( , x. 4419; earcher@barrie.ca) 25

26 Where do we go next? December Budget Breakfast December 3 Publish the Business Plan and distribute it to Council Discuss potential amendments with members of Council January 20 General Committee review January 27 Council decision 26