Staff Report for Special Meeting of Council

Transcription

1 Agenda Item 4.2 Staff Report for Special Meeting of Council Date of Meeting: February 28, 2017 Report Number: SRCFS Department: Division: Subject: Corporate and Financial Services Financial Services 2017 Operating Budgets & 2017 Water, Wastewater & Stormwater Budgets Purpose: To present the Town of Richmond Hill s 2017 Draft Operating Budgets and 2017 Water, Wastewater & Stormwater Draft Budgets for Council Approval. Recommendations: a) That the 2017 Town Services Operating Budget a. Summarized in Appendix F with a recommended budget increase of $2,804,000 and a total tax levy of $73,874,600 (excluding supplementary taxes), be adopted; b. That the 2017 Seniors Tax Assistance Grant be increased to $377; c. That the draft By-law No , attached as Appendix M, be enacted to adopt the 2017 Town Services Operating Budget. b) That the 2017 Richmond Hill Fire & Emergency Services Operating Budget a. Summarized in Appendix G with a recommended budget increase of $1,476,200 and a total tax levy of $23,381,600, be adopted; b. That the draft By-law No , attached as Appendix N, be enacted to adopt the 2017 Richmond Hill Fire & Emergency Services Operating Budget. c) That the 2017 Richmond Hill Public Library Board Operating Budget a. Summarized in Appendix H with a recommended budget increase of $444,600 and a total tax levy of $ 8,329,100, be adopted; b. That the draft By-law No , attached as Appendix O, be enacted to adopt the 2017 Richmond Hill Public Library Board Operating Budget. d) That a Capital Asset Sustainability Fee charged to each tax account be increased to $30 for the 2017 taxation year; 25

2 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 2 e) That the Financial Outlook and Three-Year Staffing Plan (attached as Appendix I ) be received; f) That the draft By-law No , attached as Appendix P be enacted to adopt the 2017 Water, Wastewater & Stormwater Budgets g) That, as required by Ontario Regulation 284/09, Municipal Act 2001, the compliance report attached as Appendix R be approved for expenses that have been excluded from the 2017 Draft Budget.. Contact Person: Lisa Chen, Manager of Financial Planning & Budgets Ext Submitted by: "Signed version on file in the Office of the Clerk" David Dexter Acting Commissioner of Corporate and Financial Services Approved by: "Signed version on file in the Office of the Clerk" Neil Garbe Chief Administrative Officer 26

3 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 3 Background: The 2017 Operating Budget was deliberated through Budget Committee of the Whole (BCW) from January 24 th to February 14 th, This report provides additional information as requested by committee members during the BCW meetings, provides an overview of the final draft, and requests Council approval of the 2017 Operating Budgets and the Water, Wastewater & Stormwater Budgets. Operating Budget Strategy The Draft 2017 Operating Budget reflects the Council adopted budget strategy endorsed by the Budget Committee of the Whole (BCW) recommendations from the June 28, 2016 meeting. The approved 2017 Draft Operating Budget Strategy includes the following objectives and guidelines: 1. Maintains existing service levels 2. Includes items consistent with the Strategic Plan, that also provides for: a. Annualizations of prior years approved service enhancements; b. Impacts from development growth; c. Legislated changes; and d. Year two of the three-year phased-in reductions from the Growth Rate Stabilization Strategy, Personnel Gapping Factor and Supplementary Taxation as approved in Continues with the Capital Asset Sustainability Fee Strategy approved in Provides an update on the Emerald Ash Borer Management Strategy implementation plan, and report back on funding alternatives 5. Updates the Financial Outlook and Staffing Plan 6. Minimizes the tax rate increase 2017 Budget Information Sessions The 2017 Budget Information Sessions with the Business Community and the Public took place on October 26, 2016 with business groups at the Richmond Hill Centre for the Performing Arts, and on Saturday, January 21, 2017 at the Central Library Branch with members of the public. Staff and Council Members were in attendance to answer questions regarding the budget process. In early November 2016, staff launched an educational video, How Richmond Hill s Budget Works. Operating Budget Preparation and Senior Management Review Staff developed departmental work plans incorporating the Town s Strategic Plan for 2017 and derived Operating Budget requests consistent with Council s budget objectives and guidelines. The 2017 Draft Operating Budget requests were subjected to an ongoing detailed review and scrutiny by the Executive Leadership Team, culminating in Departmental presentations and detailed reviews with the Chief Administrative Officer, and the Town Treasurer. 27

4 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 4 Budget Committee of the Whole Review At the January 24, 2017 BCW meeting, staff presented an overview of the 2017 Draft Consolidated Operating Budget reflecting a $4.8 million tax levy increase including the financial impact of Town Services, Richmond Hill Fire & Emergency Services and Richmond Hill Public Library Board. The Village of Richmond Hill Business Improvement Area will present their 2017 Operating Budget request to Committee of the Whole in April January 24, Tax Levy Impact Town Services RH Fire & Emergency Services Richmond Hill Public Library Total Operating Budget Base $1,023,100 $1,131,600 $206,300 $2,361,000 Growth 401, , ,800 Legislated 221,400-24, ,800 Service Enhancements 125, , ,600 Unsustainable Funding Sources 1,033, ,033, Draft Operating Budget Tax Levy Impact $2,804,000 $1,476,200 $516,400 $4,796,600 Detailed information was previously provided to Council Members on January 17 in the form of the Annual Budget Binder. Members were also invited to meet with senior Departmental and/or Financial Services staff to gain a greater understanding of the budget overview, pressures, binder content, and process. Each Department s budget was presented, reviewed, and deliberated through BCW meetings held from January 24 to February 7, Council motions were raised and voted on January 24 and February 14. Staff prepared a consolidated report for presentation to Council today, summarizing the detailed budget information and incorporating the approved motions. Financial/Staffing/Other Implications: The original 2017 Draft Operating Budget as presented during the January 24, 2017 BCW meeting proposed a tax levy increase of $4.8 million. The annual average household tax bill impact would have been approximately $ The Annual Operating Budget consists of three components: 1. Town Services. 2. Richmond Hill Fire & Emergency Services 3. Richmond Hill Public Library Board Town Services is comprised of all Richmond Hill service areas: Community Services (except Fire and Emergency Services), Environment and Infrastructure Services, Corporate and Financial Services, Planning and Regulatory Services, Office of the Chief Administrative Officer and Corporate Accounts 28

5 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 5 Approved Motions and Updated 2017 Draft Operating Budget On January 24, BCW approved the motion, That the new staff requests from the Richmond Hill Public Library Board for the new Oak Ridges Library in the 2017 draft operating budget be limited to 2 (two) new positions and the Board make the decision of which 2 (two) positions they wish to add. The start time to be the same July 1st start. The Richmond Hill Public Library Board has made a delegation to speak to Council on the options and impacts of this motion. To update the draft operating budget to show the financial impact of this motion, Financial Services staff provided a reduced tax impact of $71,800 based on retaining the two highest rated positions, the Children s Librarian and the Library Systems Specialist, and deferring the Library Assistant and part-time Page hours. Flexibility as to how the remaining budget for the new branch is resourced may be necessary in order to meet the needs at opening. The updated 2017 Draft Operating Budget reflects a $4.7 million tax levy increase. February 28, Tax Levy Impact Town Services RH Fire & Emergency Services Richmond Hill Public Library Total Operating Budget Base $1,023,100 $1,131,600 $206,300 $2,361,000 Growth 401, , ,000 Legislated 221,400-24, ,800 Service Enhancements 125, , ,600 Unsustainable Funding Sources 1,033, ,033, Draft Operating Budget Tax Levy Impact $2,804,000 $1,476,200 $444,600 $4,724,800 Other motions approved during budget deliberations do not have a financial impact. Council approved the motions for staff to report back on the 2018 budget process and impacts options to combine the Operating & Capital Budgets (Appendix A ), and for staff to provide further information on implementing a Municipal Price Index (Appendix B ). Information Requests Along with the approved motions, Committee members requested further detailed information on the Richmond Green Air Support Structure financials (Appendix C ), an update on Ontario Municipal Board hearings, legal costs and cases (Appendix D ), and Consultants and External Legal usage (Appendix E ). 29

6 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 6 Total Operating Budget The 2017 proposed budget requires a Tax Levy increase of $4.7 million: $2.8 million increase for Town Services, $1.5 million for the Richmond Hill Fire & Emergency Services and $444,600 for the Richmond Hill Public Library Board. Total Operating Budget 2016 Budget 2017 Draft Budget Inc / (Dec) Expenditures Personnel Personnel Permanent $ 84,174,700 $ 89,471,200 $ 5,296,500 Personnel Casual 14,233,400 14,928, ,600 $ 98,408,100 $ 104,399,200 $ 5,991,100 Non-Personnel Contracts, Services 21,386,300 22,228, ,700 Materials, Supplies 21,419,800 22,252, ,600 Other Expenditures 3,539,100 4,012, ,700 To Reserve & Reserve Funds 8,983,500 9,093, ,800 $ 55,328,700 $ 57,586,500 $ 2,257,800 Total Expenditures $ 153,736,800 $ 161,985,700 $ 8,248,900 Revenues User Fees & Fines $ (33,314,400) $ (34,865,500) $ (1,551,100) Investment Income (6,870,000) (6,536,600) 333,400 Grants, Donations (1,126,800) (1,178,500) (51,700) From Reserve & Reserve Funds (7,448,600) (6,670,200) 778,400 From Other Internal Sources (4,550,600) (5,719,600) (1,169,000) Non-Taxation Revenue $ (53,310,400) $ (54,970,400) $ (1,660,000) Net Budget Before Tax Levy $ 100,426,400 $ 107,015,300 $ 6,588,900 Tax Levy $ (98,996,400) $ (100,860,500) $ (1,864,100) Supplementary Taxes (1,430,000) (1,430,000) - (100,426,400) (102,290,500) (1,864,100) - - Tax Levy Increase $ - $ 4,724,800 $ 4,724,800 30

7 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 7 Proposed Taxation Revenue Taxation revenue comprises three components assessment growth, supplementary taxes, and tax rate increase. It has been budgeted to increase by $6.6. Assessment growth is the result of an increasing number of assessable properties and structures within Richmond Hill. The taxation revenue assessment base grew by 1.88% in 2017 resulting in additional taxation revenue of $1.86 million. Supplementary taxes are budgeted at $1.43 million in 2017, the same as the prior year. The taxation revenue budget includes: 2017 Budget 2016 Base assessment $ 98,996, Assessment growth 1,864,100 Tax Levy before increase $ 100,860,500 Tax Levy increase 4,724,800 Tax Levy before supplementary taxes $ 105,585,300 Supplementary Taxes 1,430,000 Total Tax Levy $ 107,015,300 Senior s Tax Grants The Town of Richmond Hill provides a Seniors Tax Assistance Grant for qualified senior homeowners. To be eligible, the individual must have been a Richmond Hill resident for at least one year prior to the date of application, and in receipt of the Guaranteed Income Supplement as provided under the Old Age Securities Act (Canada). The 2016 grant is $360. The grant is indexed to the tax rate increase set by the Town of Richmond Hill. The grant will increase by $17 to $377 per eligible applicant. Municipal Impact of the Tax Rate Increase to Resident Taxpayer Every four years, the Municipal Property Assessment Corporation (MPAC) is responsible for updating all the property assessment values in the Province, of which the changes are then phased-in over four years. It is important to note that assessment value changes do not affect the total amount of taxes received by the municipality. The property tax rates are re-evaluated annually to provide the same tax revenue. There may be fluctuations however, between homeowners, where some may increase and some may decrease, depending on how their property assessment has changed compared to the municipal average. In 2016 Municipal Property Assessment Corporation (MPAC) released New Current Property Value Assessments (CVA) to be phased-in over the next 4 years for the taxation years 2017 through to The new CVA value for the average single, detached residential property in Richmond Hill is now $1,148,000. This same property in 2017 will have a phased-in assessment value of 31

8 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 8 $856,300 and will see an annual impact of $81.83 on the municipal portion of the tax bill Combined with the increase approved by the Region of York, and assuming Education rates remain the same, the total tax bill increase is approximately $ The municipal annual impact of $81.83 is comprised of budgetary pressures from Town Services of $48.50, Richmond Hill Fire & Emergency Services of $25.65, and Richmond Hill Public Library Board of $7.68. Estimated Tax Impact Town Services RH Fire & Emergency Services Richmond Hill Public Library Town Portion of Tax Bill Annual $48.50 $25.65 $7.68 $81.83 Monthly Daily Tax Bill $1, Actual percentage rates for each individual property may vary (higher or lower) due to changes in assessment levied by Municipal Property Assessment Corporation (MPAC); whether the property is residential, non-residential, or exempt; and the impact of tax ratios approved by the Region which are consistent with broader economic objectives. Operating Budget Town Services The 2017 Town Services Draft Operating Budget (Appendix F ) proposes a net budget increase of $2,804,000 over the prior year. In total, 19 new full-time staffing requests are provided for in the operating budget Town Services Operating Expenditures Town Services Operating Expenditures is comprised of personnel expenditures representing 58% of the budget. Contracts and Services, and Materials and Supplies each represent 16% of the expenditure budget. 32

9 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 9 Other Expenditures 3% Materials, Supplies 16% Contributions to Reserve & Reserve Funds 7% Personnel 58% Contracts, Services 16% Town Services Operating Revenues The most significant portion of the Town Services revenue is property taxation, representing 65% of the revenue budget. User Fees and Fines represent 21% of the revenue budget. Contributions from Reserve and Reserve Funds and Other Internal Sources are 8%, while investment income contributes 4%. The net operating budget funding request is to be determined. Contributions from Reserve & Reserve Funds 3% Investment Income 4% Contributions from Other Internal Sources 4% Grants & Donations 1% To be Determined 2% User Fees & Fines 21% Taxation 65% 33

10 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 10 Town Services Base Pressures These are generally inflation pressures for maintaining service levels. Any identified efficiencies and savings will also be reflected here. Base Expenditures Personnel expenditure pressures include cost of living adjustment provisions, adjustments to benefit rates and step-rate increases. Recycling and refuse contracts added a $115,900 budget pressure to Contracts and Services. Telephone, Cellular & Data Communications and Winter Maintenance contributed to the majority of the remaining Contracts and Services pressures. Facility related hydro and water expenditures present a $303,100 pressure on materials and supplies, as well as $172,200 in relation to parks and streetlights hydro, and a $68,000 postage increase contributed to the remaining increases. Base Revenues User fees and fines revenues are budgeted to increase $768,200. This reflects a $330,300 in additional revenues as a result of the Tariff of Fees update, additional revenues from popular demands on general programs, the Richmond Green Air Support structure, and ice rentals. Additional rental income is included for the Old Post Office lease. Transfers from internal sources include additional transfers from the Water and Wastewater Fund as a result of additional efforts and resources identified in the Operating Fund for Water and Wastewater activities. Staff have reviewed business activities between both operations and were able to identify amounts to allocate. Town Services Growth Pressures The total growth pressure is $401,200. These are pressures from providing the same level of service but to a growing community due to larger volumes or higher level of activities. Growth pressures include cost annualizations of partial year funding of resources in the prior year, new resources for the 2017 budget, and the taxation The Town Services Operating Budget includes 18 new and converted, as well as casual and contract staffing resources to support providing existing services to a growing community. In 2017, the property assessment growth is expected at 1.88%, generating an additional $1,864,100 in taxation revenue. Town Services Legislated Pressures The financial impact of new legislation imposed on how we provide municipal services include additional funding for implementing AODA customer service and communication requirements, minimum wage increases and Electrical Authority permitting requirements. 34

11 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 11 Town Services Pressures from Service Enhancements Service enhancement pressures are increase costs as a result of service level changes to implement approved plans and resources. The Asset Management Plan was presented to Council as part of the 2016 work plan. Also part of the management reorganization plan recommendations, the staffing resources are being requested as part of the 2017 operating budget process. In addition, staff included provisions in the budget for the Records Information Management System implementation, museum program enhancements, a study to review Building Cultural Capacity, a Richmond Hill Farmer s Market, Richmond Hill Arts Award program, and initial phases of the ownership transfer of David Dunlap Observatory lands and building to the Town. Town Services Unsustainable Funding Sources As approved in the 2016 Budget, staff are continuing to decrease the revenue budget on items that have historically been unachievable, or that are unsustainable going forward. The Corporate Staffing Gapping Factor is targeted to be reduced to 1% of fulltime personnel costs over four-years. Staff originally proposed a three-year phase-in, however, upon review, a four-year plan is more realistic. The budget includes the second year phased-in amount. In addition, staff have also incorporated year two of the three-year plan to eliminate the reliance of the Tax Rate Stabilization Reserve as part of eliminating the Growth Rate Stabilization Strategy. Supplementary Taxation revenue decreases were recommended as part of the three-year phase-in plan for the 2017 Outlook. Based on current development projects underway, staff determined a decrease is not required at this time. With the continued decline in investment returns, the draft budget reflects a decrease in investment income by $333,400. This is new for the 2017 budget process, and is the first-year of a three-year phase-in plan to reduce Investment Income by $1 million. Richmond Hill Fire and Emergency Services In the fall of 2015, the Town of Richmond Hill initiated a Fire and Emergency Services Master Plan (FESMP) study as part of its comprehensive community planning process to guide the delivery of fire protection services over the next ten years. The FESMP provided a complete review of the current operations of Richmond Hill Fire and Emergency Services (RHFES) to assist Council in establishing key objectives for the division. The plan included recommendations to address both short-term (five-year) and long-term (ten-year) strategies for the municipality. The analyses and recommendations contained within the plan were prepared based on a foundation of legislated responsibilities, the Ontario Fire Marshal and Emergency Management Public Fire Safety Guidelines, and stakeholder engagement. The plan was developed with the highest regard for the legislated responsibilities of the municipality as contained within the Fire Protection and Prevention Act (1997) and the Occupational Health and Safety Act. The FESMP consisted of over 40 recommendations, which includes the Fire Chief be directed to develop a multi-year implementation plan for Council s consideration in 35

12 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 12 responding to the proposed fire suppression phases contained within the Fire and Emergency Services Master Plan. At the June 28, 2016 Special Council meeting, the ten-year implementation plan was presented to Council by Dillon Consulting Ltd. Council adopted the recommendations from the staff report, Fire and Emergency Services Master Plan (SRCS.16.27), and directed the Fire Chief to report back to Council on priorities, cost, implications and options for phased implementation of the Fire and Emergency Services Master Plan. The follow-up report was presented to Committee of the Whole on January 23, The FESMP has significant financial implications over the next ten years. For the Richmond Hill Fire & Emergency Services 2017 Operating Budget (Appendix G ), staff have presented the financial impact of the Richmond Hill Fire and Emergency Services separately from the rest of the Town Operating Budget. The January 23 rd report and presentation provides the specific details and overall implications of recommendations as they are introduced in each of the next ten years. The increase in Richmond Hill Emergency & Fire is driven by step-rate increases and the financial implications of the Fire & Emergency Services Master Plan. Under Service Enhancements there are eight Firefighters and one Fire Prevention Officer requested for Richmond Hill Public Library Board RHPL operates under the direction of a ten member Library Board appointed by the Town of Richmond Hill Council. The Board is governed by the Public Libraries Act. The Richmond Hill Public Library Board operating budget presented to BCW is based on their recommendations, and presented separately as a part of the overall Operating Budget. The Richmond Hill Public Library Board s 2017 Draft Operating Budget (Appendix H ) is $8.3 million. The total expenditure budget is $10.2 million. The total revenue budget is $1.8 million. The net budget is funded from the municipal property taxes. Included in their budget are two full-time staffing requests for the Oak Ridges Library Branch: a Children's Librarian, and a Library Systems Specialist. In addition, part-time hours are requested for the Richmond Green Library Branch. Capital Asset Sustainability Fee Continuing with the Capital Asset Sustainability Strategy adopted by Council as part of the 2016 Operating Budget, the Capital Asset Sustainability Fee is proposed to increase $15 per tax bill per year. This fee is separate from the Town Services Operating Budget. The 2017 increase will generate an additional $1,025,800 for future capital asset funding for a total budget of $1,975,400. On the current tax bill, it lists the assessed property value and property tax rates and taxes for each of the following: the Town of Richmond Hill, the Region of York and the Province. A separate line on the tax bill will be added for the annual fee for Capital Asset Sustainability contributions. 36

13 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 13 Financial Outlook and Staffing Plan One of the Town s budget principles relates to detailed long-term and short-term planning. The multi-year financial outlook is one of the planning tools used by Council and staff. The provision of a multi-year financial outlook ensures that the Council is provided with a financially prudent outlook of the future implications of decisions made in the present. Appendix I provides an updated operating financial outlook based on the proposed 2017 budget and for Town Services, Richmond Hill Fire and Emergency Services, and Richmond Hill Public Library Board. The schedule incorporates the Town of Richmond Hill Three Year Staffing Plan and anticipates: elimination of Growth Rate Stabilization Strategy by 2019; reduction of Staffing Gapping Factor to 1% of full-time personnel costs by 2019; reduction in Investment Income by $1 million by 2019 that the tax rate pressure shown for each year is approved and incorporated into the base revenues of the next year; and that no surpluses/deficits are expected. Base budget forecast for The Town of Richmond Hill includes inflationary and growth pressures estimated at 1.50% for annual inflation and a 2.0% factor on non-tax revenue growth. Assessment growth has been conservatively forecasted at 1.50% for both 2018 and Over the three-year forecast period ( ) potential annual Tax Levy increases range from $4.72 million to $6.30 million: Draft Budget Outlook Town Services Base $ 1,023,100 $ 1,327,600 $ 1,643,600 Growth 401,100 1,536,700 1,359,700 Legislated 221, ,600 56,200 Service Enhancements 125, ,100 Unsustainable Funding Sources 1,033,400 1,012, ,300 $ 2,804,000 4,038,100 3,685,900 Richmond Hill Fire & Emergency Services 1,476,200 1,464,100 1,513,100 Richmond Hill Public Library Board 444, , ,600 Tax Levy Increases $ 4,724,800 $ 6,297,300 $ 5,818, , Town Services anticipates annual increases ranging from $2.80 million to $4.04 million (see Appendix J ) due to annualized impacts of approved new resources and forecasted costs for future staffing and programming requirements to support the Town of Richmond Hill s various Strategic Plan initiatives as listed in Appendix I. 37

14 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 14 Richmond Hill Fire & Emergency Services forecasted annual increases range from $1.46 million to $1.51 million required to support the future costs of the Fire & Emergency Services Master Staffing Plan (See Appendix K ). Richmond Hill Public Library Board forecasts annual increases from $0.44 million to $0.80 million to support the Richmond Hill Public Library Strategic Plan and Oak Ridges Library (See Appendix L ) Draft Water, Wastewater & Stormwater Budgets Included in the 2017 Draft Water, Wastewater & Stormwater Budgets is the proposed Water and Wastewater combined retail rate increase of 9% (effective April 1, 2017), largely driven by a 9% wholesale rate increase for water and wastewater, charged by the Region of York. The budget also proposes a 9% increase for Stormwater, similar to the Water and Wastewater charge. Water & Waste Services The 2017 Draft Water and Wastewater Budget provides for: 9% combined Water & Wastewater retail rate increase effective April 1, 2017 mainly due to a combined wholesale rate increase of 9% from the Region of York, which accounts for 71% of this budget. Greater transfers to the Operating Fund to reflect increased workflow activity toward Water & Wastewater functions. Increased contribution to the Repair & Replacement Reserve Fund to continue the legislated requirement of providing for full replacement funding of Water & Wastewater assets The draft By-law No in Appendix P shows the new combined retail rate of $ per cubic metre, a water service only rate of $ per cubic metre and a flat rate at $ per quarter for wastewater services only effective April 1, While all properties in the Town of Richmond Hill are required to have a water meter installed, periodically a property becomes occupied before the meter is installed. In these instances, those properties without a water meter will be charged a flat rate of 1 cubic metre per day at the current combined water & wastewater retail rate. The rate increase continues to be consistent with the legislatively required (Safe Drinking Water Act, 2002, Ontario Regulation 453/07) Water and Wastewater Financial Plan, 2010 to 2019 that was adopted by Council in June, Stormwater Management Services The budget also proposes a 9% increase for stormwater management, similar to the water & wastewater change. The Stormwater Management Rate was adopted by Council in The basis of the rate was presented in the report, Stormwater Management Financing Feasibility Study (SRCFS ). The proposed increase takes the annual rate per residential home owner from $57.10 to $ The required public notice was provided on February 9, 16, and 23, 2017 for the February 28rd, 2017 Special Council meeting at which this budget is recommended for 38

15 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 15 adoption. Council adoption of the 2017 Draft Water, Wastewater & Stormwater Budgets will facilitate the proposed retail charges to be effective for April billings. Reserves and Reserve Funds Budget Appendix Q provides an overview of the transfers to and from Reserve and Reserve Funds that impact the Operating Budgets. Resolution to Exclude Amortization and Post-Employment Expense Budgets Accounting regulations require municipalities to report on financial statements expenses traditionally not included in the operating budget. Ontario Regulation 284/09, Budget Matters Expenses, allows the Town of Richmond Hill to continue to budget on a basis other than based on accounting regulations, and exclude amortization and postemployment benefits related expenses. Before adopting a budget that excludes such expenses, Council must pass a resolution on a report (Appendix R ) that outlines the impact to the accumulated surplus, and the impact on the future tangible capital asset funding requirements of the municipality. Relationship to the Strategic Plan: The Town of Richmond Hill s annual Operating Budget reflects the overall use and wise management of resources, and should be considered the annual financial reflection of the Town s Strategic Plan. The Strategic Plan goals are represented in the annual budget process through: Stronger Connections in Richmond Hill not only through the efficient provision of services common to all residents but also from the methods used to reach out to the public for budget input. Suggestions and feedback from residents and businesses are an important part of the Town s budget process. Better Choice in Richmond Hill as reflected in the mosaic of service options available to the residents from transportation through the Town to the various recreation programs offered. Better choice also reflects the common services all residents have come to depend on, be it with Fire Emergency services or prompt winter maintenance of roads and sidewalks. The annual budget communicates the details of the high-quality services that Richmond Hill residents and businesses are accustomed. A more vibrant Richmond Hill is also made apparent through the budget process with many cultural, recreational and creative programs and initiatives included in the annual budget. Annual presentation of the Town s Water, Wastewater & Stormwater Budgets demonstrates responsible municipal management and wise management of resources in ensuring reasonable user fee increases; justifiable full cost recovery for quality services rendered and sound fiscal management for both short term and long term planning. 39

16 Town of Richmond Hill Special Meeting of Council SRCFS Date: February 28, 2017 Page 16 Conclusion: This report includes a summary of the 2017 Draft Operating Budgets: The 2017 Operating Budget provides for a Municipal Tax Levy of $105,585,300 (excluding supplementary taxes) which reflects a $4.7 million increase over The provision of a Special Levy fee of $30 per tax account, for Capital Asset Sustainability contributions. The combined retail rate for water & wastewater services and the stormwater management rate are recommended to be increased by 9% effective April 1, 2017 in order to provide full cost recovery for water, wastewater & stormwater functions and replacement funding of related assets to support future sustainability of the water, wastewater & stormwater infrastructure. Attachments: A B C D E F G H I J K L M N O P Q R 2018 Operating and Capital Budget Process Municipal Price Index Richmond Green Air Support Structure Financials Ontario Municipal Board Hearings and Legal Costs Consultants and Outside Legal Services Usage 2017 Town Services Operating Budget 2017 Richmond Hill Fire & Emergency Services Operating Budget 2017 Richmond Hill Public Library Board Operating Budget 2017 Financial Outlook, Strategic Initiatives and the Three-Year Staffing Plan 2017 Town Services Financial Outlook 2017 Richmond Hill Fire & Emergency Services Financial Outlook 2017 Richmond Hill Public Library Board Financial Outlook By-Law to adopt the 2017 Town Services Operating Budget By-Law to adopt the 2017 Richmond Hill Fire & Emergency Services Budget By-Law to adopt the 2017 Richmond Hill Public Library Board Budget By-Law to adopt the 2017 Water, Wastewater & Stormwater Budgets 2017 Application of Reserve and Reserve Fund Transfers in the Budget Compliance Report under O. Reg. 284/09, Budget Matters Expenses 40

17 Appendix A 2018 Operating and Capital Budget Process At the February 14, 2017 meeting, BCW approved a motion for staff to report back on the timing of the 2018 Budget process, and clarify implications of combining both the Operating and Capital budgets. Staff polled the Region of York municipalities and a majority of them deliberated both budgets together. Although an ideal scenario for the Town of Richmond Hill, this business process change requires staff throughout the organization to change work plans currently underway, as both operational and finance staff will be impacted. Currently staff are working on a large number of concurrent initiatives including: David Dunlap Observatory Master Plan implementation Fire & Emergency Services Master Plan Asset Management Plan implementation Museum Study implementation Employee strategy Administrative Monetary Penalty System implementation Civic Precinct implementation Information Technology project implementation o Enterprise Resource Planning o Customer Relationship Management o Maximo Work Order Management system o Recreation Management System o Agenda Management System o Planning and Regulatory Management Staff will revisit the timing of the budget process for the 2020 Budget deliberations when a number of these projects will be mostly complete. For the 2018 Budget process, staff will report back to BCW on timelines, consistent with the current process, when the Budget Strategy is reported in June

18 Appendix B Municipal Price Index At the February 14, 2017 meeting, BCW endorsed a motion for staff to report back the use of a Municipal Price Index. Staff polled the Region of York municipalities on the use of MPIs during the budget process. The Region was the only organization using an MPI as part of the multi-year budget process. An MPI informs the budgetary process of external economic conditions facing the municipality. In comparison to the MPI, the Consumer Price Index (CPI)'s basket of goods include food, shelter, household operations, footwear, transportation, health, personal care, and education. The type of commodity and weight used to derive the CPI is not representative of municipal spending that includes the building of roads, pools, buying trees, vehicles and hiring firefighters. These specific expenditures are representative of municipalities and help explain expenditures attributed to inflationary pressures when submitting annual operating budgets. Municipal costs generally experience higher levels of inflation compared to consumer costs. Higher expenditures can be attributed to increased construction and utility costs. As such, the MPI is expected to trend upwards relative to the Bank of Canada s annual CPI target of approximately 2%. Wages, salaries and employee benefits form one of the major expenditure categories. These expenditures are dictated by unions and labour settlements. Another main category indicative of a municipal spending are existing and future contracts. Inflationary factors in this category may be dictated by contractual obligations. The weightings of each category determine the importance of each category group. The MPI is used to assess inflationary Base Budget pressures for determining unit costs, however, it does not account for operating pressures resulting from growth, legislation, strategic priorities and service level enhancements. Staff will explore the possibility of establishing an MPI factor representative of the Town s expenditure profile for future budget processes. 42

19 Appendix C Richmond Green Air Support Structure The Richmond Green Air Support Structure was installed in the fall of The installation costs were part of the capital project cost. The initial removal and storage in the spring of 2016 was also part of the capital project cost. The subsequent dome setup in the fall of 2016 was included as part of the operating budget. Going forward in 2017, all seasonal set up, removal and storage of the dome will be included in the operating budget. Facility field house was not operational until February Expenses 2015 November 1 - December January 1 - December 31 Asset Management (utilities) $ 8,757 $ 110,011 Parks Operations (maintenance & janitorial) 12,000 40,000 Parks Operations (air support structure install & removal) - 85,000 Recreation Facility Operations & Programs 10,500 89,900 Total Expenses $ 31,257 $ 324,911 Revenues Rental Revenue $ 42,500 $ 434,500 Program Instruction Revenue - 29,500 Total Revenue $ 42,500 $ 464,000 Net Operating Budget $ (11,243) $ (139,089) 43

20 Appendix D Ontario Municipal Board Hearings and Legal Costs OMB Summary for Legal Services The Town s OMB costs charged directly to the OMB account for 2014, 2015 and 2016 are the following respective amounts: $714,255 (2014); $223,651 (2015) and $367,094 (2016). These OMB costs include legal fees paid to law firms, fees paid to outside experts (such as economists, planners, urban designers, transportation engineers etc.). In total, the legal fees charged directly to the OMB account for 2014, 2015 and 2016 are the following respective amounts: $432,241 (2014); $204,553 (2015) and $245,548 (2016). The majority of these fees were paid in relation to appeals related to the Town s New Official Plan. Legal staff and outside lawyers have attended a number of different hearings related to appeals of the Town s New Official Plan from , including hearings related to the parkland appeal. The Town does not pay a retainer fee to law firms, but instead invoices are billed and paid monthly. Law firms charge based on time spent at an hourly rate and may include incidental disbursements for copying and mileage, which would be included in the total costs provided above. The Legal Department had primary carriage of the 18 OMB matters in 2014, 21 OMB matters in 2015 and 25 OMB matters in 2016 (all of these matters exclude appeals of the Town s new Official Plan). In 2016, external counsel were retained on two matters not related to the Town s new Official Plan. OMB Summary for Planning and Regulatory Services Over the past 3 years, ending December 31, 2016 the Town has received over 1330 development related applications. Of these forty one (41) or (3.0%) applications were appealed to the OMB, 26 have proceeded to the hearing phase, 18 are ongoing and 8 are completed, with 1.9% going to a hearing. Of the 18 ongoing, staff have also reached a settlement with the owner on 9 of these files. Therefore, only 17/1330 or 1.3% have or will be at a contested hearing at this point in time. The eighteen (18) which are or will be scheduled for the OMB hearing in the next months: CIM Developments Inc. (Elgin Mills Road East/Bayview Ave.) Laurier Homes (Richmond Hill) Inc. (Arnold Cr.) Primont Homes (Bayview) Inc. (Bayview Ave./Glen Meadow Lane) Robert Salna, Robert Salna Holdings Inc. and Pennytech Inc. (Yonge St./Centre St.) Ideal (MM) Developments Inc. (Major Mackenzie Dr. East /Lennox Ave.) Ideal (JS) Developments Inc. (Yonge St./Jefferson Sideroad) Ebrahim Rezaiee (Bayview Ave./Duncan Rd.) Dogliola Developments Inc. (Yonge St./Canyon Hill Ave.) Deergate Holdings Inc. (former E. Manson) (North Leslie) William & Yvonne Worden (West Gormley) J-G Cordone Investments Ltd. (12030 Yonge St.) Ontario Inc. (850 Elgin Mills Road East) FL (107 Hall) Inc. (Hall St.) 44

21 Wycliffe King Bond Limited (King Rd./Bond Cr.) North Lake Estates Inc. (Lowther Ave.) Behrooz Yazdani-Zenooz & Rohan Ahrari YazdaniAubrey (155 Snively St.) Greg Larden & Tina Leblanc (25 Aubrey Ave.) Ontario Ltd. (Belmont) (North Leslie) Of other 23 applications finalized to date: Settled 9 Withdrawn 6 OMB Hearing 8 External consultants (Planning and Urban Design) were required to assist the Town for 4(four) of these hearings. Budget 2016 $42,000 Budget 2017 $191,000 Note: These files below are non-development applications which involve the Town. Buttonville Properties LP Interim Control By-law Parkland The Town maintains an OMB Reserve to fund these costs. The OMB Reserve is funded by favourable budget variances in Legal Services Outside Legal account, and through corporate surplus allocations from time to time. Approximately $2 million were allocated between 2008 and Staff will be presenting a Reserve and Reserve fund policy update to BCW in June. 45

22 Appendix E Consultants and Outside Legal Usage Overview Consulting and legal services are used to support both operating and capital operations. They are used to alleviate workload or obtain specialized expertise. Operating Budget The Town of Richmond Hill use consultants and legal services in the following capacities: Internal audits AODA compliance Technical expertise Implement studies and analysis related to corporate priorities o Community Survey o Fire Services Consolidation Studies o Economic Development Strategy Update o Foreign Direct Investment Consultant o Development Charges Study Personnel related activities o Advertising o Reference Checking o Labour relations, bargaining preparation o Leadership Development o Outside legal counsel on employment matters: arbitrations, mediations and third party workplace investigators o Wellness consulting, health & safety and benefits consulting Capital Budgets Asset Management Facilities Capital Consultants are retained for Architectural Design and Contract Administration. Geotechnical Engineers are required for studies whereas Project Management firms are retained to oversee and complete the project itself (i.e. these consultants pertain to growth related capital). Asset Management also retains structural electrical and mechanical engineers as well as heritage architects to provide consulting services for capital related projects. The cost of the consultants varies with the complexity and size of the project. Funding sources are generally from Reserve funds and Development Charges. Design & Construction External Professional Engineers and Landscape Architects are retained to perform Design and contract Administration Services. Geotechnical Investigations, Hydro Geology, and surveying for roads, watermains, ponds, parks, trails etc. The cost of the consultant varies with the project complexity, type of project, regulatory agency requirements, environmental impacts and any cost mitigation. Projects are funded through Reserve Funds, Development Charges, Letter of Credits or Stimulus Grant Funding. Environment Services In the Natural Environment Division, environmental and urban forestry service consultants provide services in the development of Implementation Plans (such as the Beaver Woodland Restoration Plan, the David Dunlap Observatory Park Restoration 46

23 Plan, or the Urban Forest Management Plan). Consulting services are often obtained in partnership with TRCA and cost varies with the complexity of the project. Funding sources are from Reserve Funds, specifically the Ecological Legacy Reserve Fund and Third Party Recoveries. In the Water Resources Division, Engineering and Environmental Consulting services are used to complete Feasibility and Environment Assessment Studies which are required prior to design and construction of stormwater facilities (such as Rumble Pond and Pioneer Pond). Consultant costs vary depending on the type of project, complexity and size of the study area. The funding source is the Water Quality Protection Reserve Fund. The Air Quality Division is in charge of the LED Conversion Plan. Consultants were hired to provide Project Management Services for streetlight and Smart Control design, installation, testing and commissioning of the LED system itself. Funding was from Reserve Funds, Third Party Recovery and an internal loan. 47

24 Appendix F Town Services Operating Budget 2016 Budget 2017 Draft Budget Inc / (Dec) Expenditures Personnel Personnel Permanent $ 57,605,600 $ 61,247,000 $ 3,641,400 Personnel Casual 11,838,700 12,401, ,000 $ 69,444,300 $ 73,648,700 $ 4,204,400 Non-Personnel Contracts, Services 19,897,300 20,626, ,100 Materials, Supplies 19,347,600 20,208, ,600 Other Expenditures 3,456,300 3,922, ,700 To Reserve & Reserve Funds 8,457,400 8,516,500 59,100 $ 51,158,600 $ 53,273,100 $ 2,114,500 Total Expenditures $ 120,602,900 $ 126,921,800 $ 6,318,900 Revenues User Fees & Fines $ (31,246,700) $ (32,734,000) $ (1,487,300) Investment Income (6,870,000) (6,536,600) 333,400 Grants, Donations (1,004,600) (1,056,300) (51,700) From Reserve & Reserve Funds (6,294,500) (5,570,700) 723,800 From Other Internal Sources (4,550,600) (5,719,600) (1,169,000) Non-Taxation Revenue $ (49,966,400) $ (51,617,200) $ (1,650,800) Tax Levy Requirement $ 70,636,500 $ 75,304,600 $ 4,668,100 Tax Levy $ (69,206,500) $ (71,070,600) $ (1,864,100) Supplementary Taxes (1,430,000) (1,430,000) - $ (70,636,500) $ (72,500,600) $ (1,864,100) Tax Levy Increase $ - $ 2,804,000 $ 2,804, Tax Levy (excluding Supplementary Taxes) $ 73,874,600 48

25 Appendix G Richmond Hill Fire & Emergency Services Operating Budget 2016 Budget 2017 Draft Budget Inc / (Dec) Expenditures Personnel Personnel Permanent $ 21,876,400 $ 23,300,800 $ 1,424,400 Personnel Casual $ 21,876,400 $ 23,300,800 $ 1,424,400 Non-Personnel Contracts, Services 631, ,600 25,600 Materials, Supplies 792, ,400 37,200 Other Expenditures 82,800 90,800 8,000 To Reserve & Reserve Funds 17,500 17,500 - $ 1,523,500 $ 1,594,300 $ 70,800 Total Expenditures $ 23,399,900 $ 24,895,100 $ 1,495,200 Revenues User Fees & Fines $ (1,494,500) $ (1,513,500) $ (19,000) Tax Levy Requirement $ 21,905,400 $ 23,381,600 $ 1,476,200 49

26 Appendix H Richmond Hill Public Library Board Operating Budget Draft Approved Budget Budget Inc / (Dec) Expenditures Personnel - Full Time $ 4,692,700 $ 4,923,400 $ 230,700 Personnel - Part Time 2,394,700 2,526, ,600 Contracts/Services 858, ,000 87,000 Materials/Supplies 98,800 89,400 (9,400) Collection Development 1,181,200 1,125,400 (55,800) Transfer to R&R Reserve Fund 508, ,300 50,700 $ 9,734,000 $ 10,168,800 $ 434,800 Revenues Provincial/Other Grants (122,200) (122,200) - Library General Revenue (337,000) (361,300) (24,300) YRDSB Funding (236,200) (256,700) (20,500) Transfer from R&R Reserve (1,154,100) (1,099,500) 54,600 $ (1,849,500) $ (1,839,700) $ 9,800 Tax Levy Requirement $ 7,884,500 $ 8,329,100 $ 444,600 50

27 Appendix I Financial Outlook and Staffing Plan Financial Outlook & 3 Year Staffing Plan Town of Richmond Hill Draft Budget Outlook Town Services Base $ 1,023,100 $ 1,327,600 $ 1,643,600 Growth 401,100 1,536,700 1,359,700 Legislated 221, ,600 56,200 Service Enhancements 125, ,100 Unsustainable Funding Sources 1,033,400 1,012, ,300 $ 2,804,000 4,038,100 3,685,900 Richmond Hill Fire & Emergency Service 1,476,200 1,464,100 1,513,100 Richmond Hill Public Library Board 444, , ,600 Tax Levy Increases $ 4,724,800 $ 6,297,300 $ 5,818,600 Total Pressures 169, Draft Budget Outlook Expenditures Personnel Personnel - Permanent $ 3,641,400 $ 3,434,800 $ 3,687,700 Personnel - Casual 563, , ,200 4,204,400 4,061,500 3,959,900 Non-Personnel Contracts, Services 729,100 1,125,300 1,932,400 Materials, Supplies 860, , ,700 Other Expenditures 465,700 58,800 59,700 To Reserve & Reserve Funds 59, , ,700 2,114,500 2,100,300 2,711,500 Total Expenditures $ 6,318,900 $ 6,161,800 $ 6,671,400 Revenues User Fees & Fines $ (1,487,300) $ (849,000) $ (1,026,400) Investment Income 333, , ,300 Grants, Donations (51,700) (41,000) - From Reserve & Reserve Funds 723, ,600 (459,800) From Other/Internal Sources (1,169,000) (117,700) (133,500) Non-Taxation Revenue (1,650,800) (538,800) (1,286,400) Taxation (1,864,100) (1,584,900) (1,699,100) Total Revenues $ (3,514,900) $ (2,123,700) $ (2,985,500) Town Services Levy Requirement $ 2,804,000 $ 4,038,100 $ 3,685,900 Richmond Hill Fire & Emergency Service 1,476,200 1,464,100 1,513,100 Richmond Hill Public Library Board 444, , ,600 Tax Levy Requirements $ 4,724,800 $ 6,297,300 $ 5,818,600 51