Report Purpose To provide Council with an overview of the recommended Business Plan and 2013 Budget.

Transcription

1 BUSINESS PLAN AND 2013 BUDGET EXECUTIVE SUMMARY AND BUDGET OVERVIEW Council Budget Meeting Date: November 9, 2012 Agenda Item #: 4.1 Report Purpose To provide Council with an overview of the recommended Business Plan and 2013 Budget. Council History March 27, 2012 Council received the Business Plan and 2032 Budget Timeline as information. May 15, 2012 Council reviewed financial projections, 2012 Service Levels and stakeholder input into the business plan and budget. May 29, 2012 Council provided initial direction for the Business Plan and 2013 Budget. October 2, 2012 Council received the initial Business Plan Initiatives and 2013 Council Budget Requests in order to give direction for the preparation of the Business Plan and 2012 Budget. Background/Justification Strategic Plan: (mark beside the applicable sections) Governance X Community Well Being X Community Sustainability X Economic Viability X Service Delivery X Stakeholder Communication X Resource Management Policy: n/a Legislative/Legal: Sections 242 and 245 of the Municipal Government Act RSA 2000, c,m- 26 outline the requirements for Council to adopt an operating and capital budget for each calendar year. Economic: The Business Plan identifies actions over a three-year period which contributes to the achievement of the objectives identified in the Strategic Plan. The Budget allocates the annual resources necessary to deliver services to the community and undertake actions identified in the Business Plan. Social: The Business Plan and Budget provide the resources to support the principles contained within the Social Sustainability Framework. Environmental: The Business Plan and Budget provide the resources to address sustainability initiatives and support the Environmental Sustainability Framework. Stakeholder: Citizens of Strathcona County, Industry, Businesses. Interdepartmental: All County Departments. X Document #: Corporate Planning /2

2 - 2 - Summary This report will provide an overview of the recommended Business Plan and 2013 Budget. Handouts I Business Plan and 2013 Budget Executive Summary (CorpPlng ) II 2013 Budget Overview (Fin.Admin ppt) Author: Kelly Rudyk, Corporate Planning & Intergovernmental Affairs Date: October 26, 2012 Acting Director: Laura Probst, Financial Services Acting Director: Kelly Rudyk, Corporate Planning & Intergovernmental Affairs Associate Commissioner: George Huybregts, Corporate Services/County Treasurer Interim Chief Commissioner: Kevin Glebe Document #: Corporate Planning

3 Strathcona County Recommended Business Plan & 2013 Budget Investing in our Community Executive Summary ENCLOSURE I Introduction The theme for the Business Plan and 2013 Budget is Investing in our Community. It reflects citizens desires to continue to live in excellent communities, with high standards for services, as well as the County s commitment to remain an innovative and quality community of choice. The business plan is created and implemented with the goal to continue as a municipality that empowers and enables citizen and business success. Business plans and budgets are financial and organizational tools to convey priorities. Creating a business plan and budget is a process that considers stakeholder and community input, expert advice, and our Strategic Plan vision, goals and direction. One of the important goals of Council and Administration in this process is to engage local citizens. Each year, citizens have a chance to discuss with Council needs and wants within the context of fiscal responsibility and sustainability. This input is captured through one-on-one meetings, open houses, s, conversations and tools like the annual Public Satisfaction Survey and the Budget Survey. Community priorities, goals, and aspirations, balanced with County direction and availability of resources, are reflected in the business plan and budget. Strathcona County seeks to provide quality services for citizens at acceptable tax levels. Council makes choices knowing any growth or increase in service levels must be matched by revenues. By law, municipalities cannot spend more funds than it receives, and is required to meet a balanced budget each fiscal year. It is not an easy process every year difficult decisions have to be made around what initiatives to fund, what the appropriate service levels should be, and how to move the community and organization towards its goals with intent and diligence. We are investing in our community, our citizens, and our services. Doing so takes vision, strategy, priority setting and informed decision-making. While Council has a tough task in weighing community priorities to meet today s and tomorrow s needs, Strathcona County is committed to responsibly investing in the livability and vibrancy of our community. The Business Plan and 2013 Budget reflects this commitment to you and the community. Document #: Corporate Planning

4 Strathcona County Recommended Business Plan & 2013 Budget Investing in our Community Executive Summary ENCLOSURE I The Budget Process The budget is developed based on recommendations from our citizens, departments, senior administration and Council. April: Public input is invited through a random telephone survey of 400 residents, open houses, and an invitation for any interested resident to comment. May: Council receives the public input (Budget Survey results included) and reviews all current programs, services and financial projections. Council provides guidance and direction for the upcoming business plan and budget The 2013 Budget was developed under the following Council approved direction: Look at opportunities to modify service levels with guidelines including: o Maintain Service Levels: Fire and Ambulance Summer Road Maintenance Winter Road Maintenance RCMP Indoor Recreation Public Transit o Adjust Service Levels: Parks, Green Space and Open Space o Perform a Strategic Audit: Planning and Development Family Support Services Document #: Corporate Planning

5 Strathcona County Recommended Business Plan & 2013 Budget Investing in our Community Executive Summary ENCLOSURE I Highlights of the proposed 2013 Budget Municipal Operations Programs and service delivery levels will be generally maintained at Councilapproved 2012 levels. Ten (10) new Business Plan initiatives are recommended: Implement a Community Safety and Fire Prevention Program Develop Risk Mitigation Plans for Rural Neighborhoods Commingled recycling program (curbside) in the Green Routine Begin an Open Data Portal and Opportunity Assessment Develop a Smartphone app Civic Reporter to enable residents reporting directly to the County on municipal infrastructure and other issues Transition to Transit evening and weekend service (from Dial-A- Bus) in Sherwood Park Provide supports to children experiencing and/or witnessing family violence Continue to implement and entrench the Youth Intervention Program Extend RCMP and Enforcement Services (front counter availability and hours) Expand and restructure specialized transit service The proposed municipal operations operating budget for 2013 is $251.9 million. This budget represents the resources required to implement Council s strategic direction to generally maintain current programs and service levels, and provide for important new Business Plan Initiatives. The impact of municipal price inflation (MPI) has been incorporated into the total operating expenditure budget. MPI is estimated to be 3.0% for 2013 and is expected to amount to an estimated $5.5 million for County municipal operations. MPI represents the estimated increase in cost of the County s basket of goods (i.e., asphalt, gravel, etc.). The impact of a projected 1.93% population increase, continued development, and increased demand for municipal services and associated costs are addressed in the 2013 operating budget. The 2013 operating budget requires additional municipal property tax revenues ($8.6 million) equivalent to an approximate 4.9% municipal tax dollar increase to support maintaining current service levels. Municipal tax rates for 2013 will be subject to Council s approving the 2013 Tax Rate Bylaw in May In addition to municipal property taxes, tax rates provide for anticipated provincial education, Library and Pioneer Housing Foundation requisitions. Selective increases are recommended to occur in fees and charges for certain programs and services. Document #: Corporate Planning

6 Strathcona County Recommended Business Plan & 2013 Budget Investing in our Community Executive Summary ENCLOSURE I The recommended 2013 Municipal Capital Budget amounts to $126.3 million. The 2013 Capital Budget: Continues to focus on the replacement of existing capital infrastructure ($56.1 million), which is critical to maintaining programs and service levels. Includes an investment in new priority capital infrastructure ($75.5 million), responding to the increased demand for services. Proposes $9.8 million new debt for municipal operations to support priority capital infrastructure projects. Strathcona County s total debt of $200 million projected for December 31, 2013 is well within the limit legislated by the Government of Alberta. Utilities Operations Programs and service delivery levels will be generally maintained at Councilapproved 2012 levels. The proposed Utilities operating budget for 2013 amounts to $52.2 million. The Utilities user fee for water, wastewater, storm sewer, and solid waste will see a net rate increase of $5.02 per month for the typical Sherwood Park residential customer. Utilities will continue to be entirely self-sustaining in No property tax revenues are required to support utility operations except for recycling stations and Enviroservice events. Only those customers who benefit from utility services pay for the utility services. The recommended 2013 Utilities Capital Budget amounts to $6.1 million. Library Operations The proposed Library operating budget for 2013 amounts to $9.2 million. The proposed Library tax dollar increase for 2012 amounts to approximately 2.05% or a $1.35 per year increase for the average residential property assessed at $424,050. The recommended 2013 Library Capital Budget amounts to $0.7 million. Document #: Corporate Planning

7 Investing in Our Community Business Plan & 2013 Budget Overview Council Meeting November 9, 2012 Document #:

8 Presentation Outline Business Plan & 2013 Budget Timeline Council Direction Strategic Plan, Business Plan & Budget Budget Highlights Key Recommendations Next Steps 2

9 2013 Timeline March 27 Approval of Timeline May 15 Financial Projections May 29 Council Guidance & Direction October 2 Initial Review of Business Plan Initiatives & Councillor Budget Requests November 9 Overview of Recommended Business Plan & Budget (no decisions required today) November Recommended Business Plan & Budget Presentations 23, 26, 28, 30 (Dec 3 tentative) Dec 11 Approval of Business Plan & Budget 3

10 Council Direction - Service Levels On May 29, 2012 Council provided the following direction with respect to service levels: 1. Maintain Services Levels Fire & Ambulance Winter Road Maintenance RCMP Summer Road Maintenance Indoor Recreation Public Transit 2. Adjust Service Levels Parks, Green Space & Open Space 3. Perform Strategic Audit Family Support Services Planning and Development 4

11 Strategic Plan, Business Plan & Budget

12 Strategic Plan, Business Plan & Budget Relationship Strategic Plan identifies long-term direction & objectives Business Plan identifies actions over a 3 year period that contribute to the achievement of the objectives in the Strategic Plan Budget allocates, on an annual basis, the resources necessary to deliver services to the Community & undertake the actions identified in the Business Plan Operating & Capital Budgets are developed in the context of long-term plans, consistent with the Strategic Plan. 6

13 Fundamental Principles Guided by/ linked to Council s Strategic Plan & Community Vision Business Plan illustrates programs and services approved by Council Budget is balanced, fiscally responsible and allocates the resources required to deliver programs and services at Council approved levels Strives to achieve balance between environmental, social & economic sustainability Meets federal and provincial legislative requirements, Council approved bylaws, policies and plans Continues to identify economies & efficiencies while ensuring equity and effectiveness 7

14 Guidelines Maintain municipal service levels while searching for efficiencies in operations to lessen the tax requisition to residents Increase selected user fees to keep pace with market conditions and to offset increased costs on fee-based services Maintain utility service levels while searching for efficiencies in operations to lessen the impact on utility bills Continue to provide annual operating funding for annual capital programs Maintain library service levels pursuant to direction provided by the Library Board. 8

15 Our Environment: Opportunities & Challenges Resource Availability Citizen Needs && Wants Population Changes Increased Standards Inflation External Agency Involvement Regional Commitments Delayed Development New New Development 9

16 Budget Highlights Business Plan & 2013 Budget November 9, 2012 Council

17 2013 Recommended Budget Identifies the costs and resources required to continue with the provision of quality Municipal, Utility and Library service delivery generally at approved 2012 levels. Is balanced and fiscally responsible in the short term However, In the long term, the current business plan is potentially not fiscally sustainable a couple observations: Revenues not keeping pace with increasing costs to meet high resident service demands Significant non-residential property tax subsidy is not sustainable without a specialized injection of new heavy industrial assessment 11

18 Initiatives These initiatives will contribute to achieving sustainability Implement Council recommendations from the In Pursuit of Excellence organization review Implement updated Strategic Plan and Community Vision Implement Sustainability Platform; strong link to strategic plan & key performance indicators Implement the Economic Sustainability Framework recommendations Review and implement the 4E Business Planning and Budget Process Review recommendations 12

19 The Operating Budget Equation Expenses Cost of delivering services $301.1 Inflation $ 8.9 Growth $ 12.7 Changes in service levels $ 1.5 Business process changes $( 3.3) Other $( 7.1) Total Expenses $ Revenues Existing tax base $179.8 New tax base $ 13.0 User fees & charges $ 37.5 Utility rate base $ 49.5 Operating grants $ 6.3 Reserves $ 10.8 Other, Penalties, $ 16.9 and Interest Total Revenues $ Budget Target: Expenses = Revenues *(including non-operating items; excludes amortization exp.) Expenses Revenues 13

20 Service Delivery Factors - Growth A few examples Total Units in 2012 Growth in 2013 Housing starts 34,414 dwellings +680 dwellings Population 94,257 people +1,819 people Rural roads 1,382 km +2.3 km Urban roads 394 km +2.4 km Sidewalks & trails 575 km +4.1 km Street & traffic lights 5,835 lights +33 lights Parks seeded & sodded areas 896 hectares hectares Trees & shrubs 70,807 +8,700 Utility operations 25,000 customers +250 customers New Utility Hwy 14 Customers 0 customers +450 customers 14

21 Municipal Price Inflation Municipal Price Inflation Municipal Operations 3.0% 3.5% Utility Operations 7.2% 2.7% Strathcona County Library 1.9% 3.4% Alberta CPI (at September 2012) 1.4% Municipal price inflation exceeds the consumer price index due to the higher cost of the County s basket of goods, which includes commodities related to the provision of services for Fire, Ambulance & Police, Transit, Recreation, Parks, Roads, Utilities and the Library 15

22 Service Delivery Factors-Inflation A few 2012 examples: Examples (Note: 2013 inflation rates are calculated based on 2012 base budget comparison) Medications up 21.3% Cement up 17.7% Water for resale up 16.0% Protective Clothing up 7.1% Trucking up 6.1% Gravel up 6.0% Wastewater treatment up 6.0% Cold mix up 5.3% Postage up 3.5% Natural gas up 2.3% Gasoline up 0.1% Diesel up 0.0% Electricity down (6.1%) 16

23 2013 Operating Budget Highlights Consolidated Operations (millions $) Budget Year Municipal Operations $252.4 $240.4 Utility Operations Strathcona County Library Consolidated operations $313.8 $301.1 Note: amounts include non-operating items & exclude amortization expense 17

24 2013 Operating Budget Highlights Additional revenues required to deliver quality service levels $8.6M additional Municipal property taxes required = $87 increase / year (4.90%) for the average single families residential property assessed at $416,000 $822k additional Municipal user fees & charges required = 2.3% average increase $165k additional Library property taxes required = $1.35 increase / year (2.05%) for the average single families residential property assessed at $416,000 18

25 2013 Operating Budget Highlights Additional revenues required to deliver quality service levels $2.3M additional revenue from Utility user rates required = $5.02 increase / month (4.47%) for the average Urban residential customer consuming 18.5 cubic meters of water = $5.04 increase / month (2.84%) for the average Rural residential customer consuming 18.5 cubic meters of water 19

26 2013 Capital Budget Highlights Capital Budget * Municipal Operations $ 126.3M $97.7M Utility Operations 6.1M 12.8M Strathcona County Library 0.7M 0.6M County $133.1M $111.1M Note: $460M capital projects identified for *as amended at September 30,

27 2013 Capital Budget Highlights Consolidated Capital Budget = $133.1 million Includes Annual Programs to ensure existing infrastructure is maintained in a manner to continue service delivery = $36.4 million Growth projects include OSRFS program = $37.9m Emerald Hills Aquatic / Welllness Centre; Spray Park; Facility Upgrades; Artificial Turf RCMP Facility Expansion = $14.3m Sherwood Drive - Lakeland Dr. to Emerald Dr. = $ 8.9m Construct 2 additional lanes Twp Road 530 = $ 6.7m Intersection Rge.Rd. 223 & 224 Class 1 Grid Road = $ 6.7m In accordance with Sustainable Rural Road Master Plan The 2013 Capital Budget tries to balance Council s interest & direction with respect to roads & recreation. 21

28 Key Recommendations Business Plan & 2013 Budget November 9, 2012 Council

29 Business Plan Services & service delivery generally maintained at current approved levels 9 Business Plan Initiatives (BPIs) recommended for inclusion in the Business Plan: Municipal Operations 9 BPIs that increase service levels such as extending RCMP front counter service, supporting children witnessing famliy violence and an expansion in transit service Utility Operations 1 BPI that increases service levels for a comingled curbside recycling service Strathcona County Library Operations No BPIs for Strathcona County Library Operations 23

30 Recommended 2013 Operating Budget Strathcona County delivers a balanced budget $M Municipal Operations Utility Operations Strathcona County Library 2013 Strathcona County Revenues Expenses Net Revenues 2.8 (0.1) Non-Operating Items* (2.8) (2.7) Net Impact for Budget 0.0 (0.0) *Non-operating items includes transfers to/from reserves, debt repayment and offset for TCA amortization 24

31 Sources of Funding 313.8M Operating Budget Source of Funds Reserves $10.8 3% User Fees $ % Utility User Rates $ % Other $11.8 4% Govt Grants $6.3 2% Penalties & Fines $5.0 2% Property Taxes $ % Investment Income AHS Contract Other Revenues 25

32 Selective Municipal User Fee Increases Consistent with budget guidelines, all user fees are reviewed annually to ensure that: Prices keep pace with market conditions while balancing what the community will bear, and Increased costs are offset on fee-based services A few examples: Millennium Card increased from $40 to $41.50/ month Temporary Approach Deposit increased from $2,100 to $3,675 Transit Adult Commuter Monthly Pass from $94.50 to $

33 Increase in 2013 Municipal Property Tax dollar required to maintain municipal services at current approved levels ( 000$ ) = $ 6, % new business plan initiatives = $ 1, % new Councillor budget requests = $ % = Total increase = $ 8, % Estimated impact on average single family residential property = $87 increase In municipal property taxes. 27

34 Annual Property Assessment & Tax Relationship A property s Share of Tax Will not be the same some properties will see an increase more than the average & some properties will see an increase less than the average Will change each year due to annual budget requirements for municipal, library, Pioneer Housing Foundation and education Will also change each year due to market value redistribution effects 28

35 Annual Property Assessment & Tax Relationship For 2012 tax year, the following % changes applied: 4.25% increase 0.90% increase (4.85% decrease) 7.01% increase 5.08% increase For 2012 tax year, the following approximate % changes per residential sector applied: Urban Single Family Urban Condominiums Average % Market Value Change (- 4%) (-1%) Average % Total Tax Change 3% 6% Rural Single Family Weighted Average + 1% -2% 8% 5% 29

36 Putting Your Tax Dollars to Work The average single family residential property is projected to pay about $1873 in municipal property taxes in 2013 Planning Services $87 Roads $570 Recreation, Parks & Culture $369 Community Social Programs $53 Agriculture $60 Public Transit $213 Fire, Ambulance & Police $506 Economic Development $15 Source: 2012 Operating Budget 30

37 Recommended 2013 Capital Budget $133.1M Capital Budget Required to Deliver Services Land $0 Electronic HW/SW Machinery & Equip Parks & Open Space Vehicles $2 $4 $6 $12 Annual Programs $17M Sherwood Dr $9M Class 1 Grid Road $7M RCMP Building Expansion $14M Emerald Hills Aquatic/Wellness Centre $22M Utility Infrastructure $5 Buildings $56 Roads $49 $- $10 $20 $30 $40 $50 $60 Millions 31

38 Recommended 2013 Capital Budget Funding Sources $60 $50 $40 $30 $20 $133.1M Capital Budget Required to Deliver Services $54.2 Municipal Sustainable Initiative (MSI) $14M $42.6 Annual Programs $28M $3.1M Debt Financed $16.1 $15.6 $6.3M Debt Financed Surplus Funding $7.6M $0.4M Debt Financed $10 $0 $4.3 Grants Reserves Contirbutions Developer Levies Property Taxes $0.4 Utility User Rates 32

39 Projected Capital Plan $460M Capital Projected to Deliver Services Electronic HW/SW $8 Machinery & Equip $8 N of Yellowhead $27M Parks & Open Space $11 Josephburg Reservoir $10M RCMP Expansion $14M Vehicles $49 OSRFS $33M Annual Programs $88M Utility Infrastructure $87 Class I Roads $22M Buildings $98 Roads $199 $- $50 $100 $150 $200 $250 Millions NOTE: The projects identified represent the projected requirements to deliver services in the next five years and have been allocated funding accordingly, however, these needs are subject to change to address emergent needs and priorities. 33

40 Recommended Capital Plan Funding Sources $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $460M Capital Budget Required to Deliver Services $109.6 $177.3 Municipal Sustainabilit y Initiative (MSI) $78M $71.2 $143M Annual Programs $35M Debt Financed $57.0 $43M Debt Financed $14.5 $15M Debt Financed $30.5 $0 Grants Reserves Developer Levy Property Taxes Utility User Rates Contributions 34

41 Debt Management External debt (debentures & capital leases) is managed, within MGA guidelines and County Policy Millions $600 $500 $400 Debt capacity $195 debt capacity in 2017 $300 $200 $100 $ Actual 2012 Forecast 2013 Projection 2014 Projection 2015 Projection 2016 Projection 2017 Projection Proposed New Debt Existing Approved Debt Debt Limit Total Debt Outstanding 35

42 Forecasting $M 2011 Actual 2012 Budget 2012 Forecast** 2013 Budget Revenues Expenses Net Revenues 15.4 (6.1) 17.1 (7.0) Non-Operating Items* (13.3) (2.8) Net Impact for Budget *Non-operating items includes transfers to/from reserves, debt repayment and offset for TCA amortization **Forecast includes Municipal Operations 36

43 Key Recommendations Allocation of Year End Operating Surplus Policy FIN Principles Allocation of surplus will be sound and fiscally responsible Surplus represents one-time funding that, by its nature cannot be relied on to recur and therefore should not be allocated to fund recurring expenses, but rather to fund one-time items Surplus is allocated to reserves to facilitate service delivery in the future Municipal operating surplus Broad parameter is to provide funding for future capital projects and to provide funding for emergent projects that arise in between budget cycles (such as strategic land acquisitions) Utility / Library operating surplus allocated to reserves for the purpose of funding future capital projects 37

44 Key Recommendations Allocation of Year End Operating Surplus The 2013 Municipal Budget assumes the following allocation of (projected) 2012 operating surplus to: Lord Strathcona Day 60 Land Use Bylaw 200 Growth Management Strategy 300 OSFRS Artificial Turf 780 Spray Park * 1,741 Emerald Hills Aquatic Centre * 5,088 Replenish Capital Projects Reserve 1,225 Total 9,394 * Reduces requirement for debt financing 38

45 Next Steps Business Plan & 2013 Budget November 9, 2012 Council

46 Next Steps 2012 Timeline March 27 Approval of Timeline May 15 Financial Projections May 29 Council Guidance & Direction Oct 2 Initial Review of Business Plan Initiatives & Councillor Budget Requests Nov 9 Overview of Recommended Business Plan & Budget (no decisions required today) Nov 23, 26, 28,30 Recommended Business Plan & Budget (Dec 3 tentative) Presentations Dec 11 Approval of Business Plan & Budget 40

47 Next Steps Overview of Binder TABS General 1 5 Council Report, Consolidated Operating Budget, Consolidated Capital Non Cash Flowed & Cash Flowed and Capital Five Year Plan Non-Cash Flowed Presentations

48 Next Steps Overview of Binder TABS Additional Information Municipal Business Plan Initiatives Councillor Budget Requests Staff Resources Flagged Items When an issue raised by a Councillor during the business plan and budget presentations is deemed critical to making the final budget decision If a majority of Council supports the flagged item, a response will be provided before the conclusion of the budget deliberations Deferred Items TAB INDEX 40 42

49 Questions Investing in Our Community Business Plan & 2013 Budget 43