2018 PRELIMINARY CORPORATE BUSINESS PLAN & BUDGET Governance & Priorities Committee (GPC) October 16, 2017 Presentation By Murray Totland City

Transcription

1 2018 PRELIMINARY CORPORATE BUSINESS PLAN & BUDGET Governance & Priorities Committee (GPC) October 16, 2017 Presentation By Murray Totland City Manager

2 OVERVIEW What s the challenge(s)? What s the response(s)? How do we pay for it? How do we compare? Next Steps

3 THE CHALLENGES Falling non-tax revenues Growing Population Growing Service Demand

4 Percent (%) Change After two sluggish years, the Economy is rebounding Source: Conference Board of Canada

5 Annual Change (%) Cumulative Change (%) And population growth remains strong 5 Saskatoon Population Change (%) Source: Statistics Canada CSD Estimates 70,000 new residents Annual Growth Rate (Left Axis) Cumulative Growth (Right Axis)

6 Source: Statistics Canada, July Annual Population Estimates, (based on Census data) City of Saskatoon Population Projection At the end of 2018, the City will deliver services to about 280,000 people 310, , , ,000 City of Saskatoon Population Growth 270, , , , , , ,000 Statistics Canada, July Annual Estimate Population Projection - 2.0% growth rate Population Projection - 1.5% growth rate Population Projection - 2.5% growth rate

7 Share (%) of Operating Budget Non-Tax Operating Revenues are Falling as Share of the Budget 60 Tax Revenues vs Non-Tax Revenues p 2018p City Non-Property Tax Revenues as Share (%) of Total Operating Revenues City Property Tax Revenues Share (%) of Total Operating Revenues

8 Precent Share And the trend shows that the property tax needs to fund more services 60 Revenue Sources as Share of Operating Budget (%) Taxation Grants in Lieu of Taxes General Revenues User Fees Government Transfers 2016a

9 Per Capita $ Partly because less money is coming from the Province Provincial Funding Per Capita City Operating Budget (includes GIL, Franchise Fees & Revenue Sharing Year Moving Average p 2018p

10 CONTROLLNG EXPENDITURES Manage Expenses Innovation & Creativity Continuous Improvement

11 Over Half of the 2018 Consolidated Budget Increase is for Capital Investment Total: $1.07 billion Total: $1.14 billion $330.0 $352.3 $477.6 $491.0 Utilities Operating Capital $261.9 $ p

12 In millions Year over Year Operating Expenditures up $13.3 million, or 2.8 percent but $500 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 $477.7 $ p

13 Annual Change (%) The lowest increase in over a Decade! 14 Annual Change (%) City of Saskatoon Operating Expenditures (Unadjusted) Annual Change (%) Operating Expenditures 2-year moving average

14 Annual Change (%) And in Real Per Capita terms, we see Expenditure Reductions in Annual Change (%) City of Saskatoon Real Per Capita Operating Expenditures Sources: City of Saskatoon, Statistics Canada, Conference Board of Canada

15 Over half of the 2.79% year over year expenditure increase is due to inflation EXPENDITURE PROJECTIONS VALUE ($) Inflation 1.67% Growth Snow & Ice Other Service Level Adjustments $7.99 million $2.47 million $1.21 million $1.64 million 2018 Expenditure Increase $13.31 million

16 May 2017

17 But if we increased inflation expenditures by expected CPI increase for 2018 then. All things being equal, our year over year expenditures would have had to increase by $11 million, or 3.4% ESTIMATED EXPENDITURES VALUE $ Inflation (using CPI 2.3%) Growth Snow & Ice Other Service Level Adjustments Potential Expenditure Increase $10.97 million $2.47 million $1.21 million $1.64 million $16.29 million

18 Public Safety and Transportation related services account for over half of total operating expenditures 2018 Operating Expenditures By Service (% Share of Total) Police 20 Transportation 16 Recreation & Parks 14 Fire Transit % Corporate Support 9 Other 7 Debt Servicing 6 Urban Planning 3 Waste Collection 3 Community Grants/Housing

19 Staff Compensation accounts for the largest share of expenditures by category 2018 Operating Expenditures by Category (Share %) Debt Chrages, 6.3 Capital/Reserve Transfers, 15 Staff Compensation, 57.2 Operating Costs, 21.5

20 FTE s as a share of the population is on a downward trend and FTEs/ 1,000 population p

21 Percent of FTEs to Total Employment Remains consistent with those employed in the Saskatoon CMA 2.3 City of Saskatoon FTEs Relative to Total Saskatoon CMA Employment Source: CANSIM (as at September 1 in preceding year) Budget 13 Budget 14 Budget 15 Budget 16 Budget 17 Budget 18 CityFTEs/ Person Employed Average

22 MAINTAINING SERVICES

23 Satisfaction with City Services is Strong 88% phone 85% online Telephone 88% 88% 83% Online 85% 83% 73%

24 Residents do not want Service Cuts to help balance the operating budget Telephone: 15% Online: 20% Telephone: 69% Online: 58% Discontinue Service Reduce Service Increase/New Fees, Taxes or Combination

25 So, the Budget maintains and even increases spending for some services

26 INVESTING IN INFRASTRUCTURE Utility Transportation Recreation & Culture Land Development

27 Utilities, Land Development and Transportation account for 2/3 s of all Capital Investments FIGURE Capital Investment by Business Line ($000 s) Utilities $93,501 Land Development Transportation $44,393 $49,677 Corporate Asset Management Recreation & Culture $29,086 $28,202 Corporate Governance & Finance Environmental Health Fire Services Urban Planning and Development Policing Community Support Arts, Culture and Events Venues Saskatoon Public Library $17,030 $16,481 $10,322 $3,365 $2,558 $315 $233 $200

28 Reserves Fund 70% of the Capital Budget, illustrating their importance Private Contributions, 9% 2018 Capital Budget Funding Sources All Other Sources, 12% Borrowing, 9% Reserves, 70%

29 Less than 50% of Debt Servicing Costs are Tax Supported Projected Debt $411 Million (Dec 31,2017) External Borrowing in 2018: $12.2 million Internal Borrowing in 2018: $15 million Debt Servicing Costs ($Millions) Property Taxation Utility Rates 15.3 Federal Gas Tax Funding

30 In (000) Building Better Roads Investment* $70,000 Roadways Snow & Ice Street Sweeping Total: $61,885 $60,000 3,799 3,759 3,789 $50,000 $40,000 $30,000 $20,000 Total: $24,603 2,165 7,673 2,299 7,998 2,434 8,988 3,120 10,736 36,615 3,320 11,618 13,141 14,336 13,284 38,517 41,480 43,587 43,760 $10,000 14,765 20,749 22,851 $ p *includes back lanes and boundary roads

31 KEY PROJECTS FOR 2018 $40.6 million for water treatment plant $27.9 million for waste water treatment plant $31.8 million for Roadway & Sidewalk Preservation $22.9 million for Gordon Howe Complex Upgrades $8.8 million Fire Hall #5 Replacement $15.0 million for Energy Performance Contracting $15.0 million for Enterprise Resource Planning (ERP) $49.7 million in Land Development

32 A BUDGET BUILT ON TRANSPARENCY

33 Phase 1: Phase 2: Phase 3: Phase 4: Prepare/ Educate Engage Citizens and Staff Update/Service Level Reports/Construct Inform/ Debate/ Approve Mar - May May - July July - Oct Nov - Dec 2018

34 2018 Budget Process Recap 6.97% 6.48% 5.59% 4.96% Original May 15 Estimate Based on Growth/Inflation and Revenue assumptions June 19 Estimate Operation savings for insurance and PST identified August 21 Estimate Savings from the 30 Day Challenge Revised civic revenue estimates September 18 estimate Additional operational decreases through deferrals and reductions to RCE

35 HOW DO WE PAY FOR IT?

36 Inflation $7.9 million Growth $2.5 million Expenditures $13.3 Million Service Level Changes $2.9 million Revenues $2.4 Million Revenue Gap $10.9 Million

37 Over half of the 2018 Property Tax increase of 4.96% is a result of Provincial revenue reductions 2018 Property Tax 2.78% 1.17% 0.41% 0.55% 0.06% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% Provincial Revenue Reductions Police Fire Services Dedicated Snow & Ice All Other Civic Services

38 Percent The Proposed Property Tax increase attributed to civic services is less than estimated consumer inflation Saskatoon Consumer Inflation (2018f) Snow/Ice Service Level Provincial Revenue Reductions Civic Services Growth & Inflation Property Tax Increase Consumer Inflation

39 HOW DO WE COMPARE TO OTHER CITIES?

40 Saskatoon is just above average for Consolidated Expenditures Per Capita in 2016 $3, Consolidated Expenditures Per Capita Sources: 2016 Annual Financial Reports Statistics Canada CSD Population Estimates $3,000 $2,500 $2,000 $1,500 $1,000 $2, $2, $2, $2, $2, $500 $0 Calgary Edmonton Saskatoon Regina Winnipeg Consolidated Expenditures Per Capita Average

41 Percent Saskatoon s Salaries and Benefits are well below the five City average 60 Salaries and Benefits as Percent of Total Expenditures 2016 Source: Annual Financial Reports Calgary Edmonton Saskatoon Regina Winnipeg Wages and Benefits as Share (%) of Total Exenditures 2016 Average

42 FTEs/ 1,000 Saskatoon s FTEs/1,000 population are about average when compared to other cities 18 FTEs / 1,000 Population (2016) Sources: 2016 Annual Financial Reports, Statistics Canada CSD Estimates Calgary Edmonton Saskatoon Regina Winnipeg FTEs/ 1,000 (2016) Average

43 Saskatoon is below average for Operating Expenditures Per Capita in 2016 $3, Operating Expenditures Per Capita Sources: 2016 Annual Financial Reports Statistics Canada CSD Population Estimates $2,500 $2,000 $1,500 $1,000 $2, $2, $1, $2, $1, $500 $0 Calgary Edmonton Saskatoon Regina Winnipeg Operating Expenditures Per Capita Average

44 Saskatoon collects the least amount of property taxes per person to fund its operations $1,600 Municipal Property Taxes/Frontage Levies Collected Per Capita 2016 Sources: Annual Financial Report Selected Cities Statistics Canada: CSD Estimates July 1, 2016 $1,400 $1,200 $1,000 $800 $600 $1, $1, $400 $ $ $ $200 $0 Winnipeg Regina Saskatoon Calgary Edmonton Municipal Property Taxes/Levies Per Capita Average

45 Saskatoon has the second lowest residential municipal property taxes $6,000 Residential Property Taxes By City $400,000 Assessed Value $5,000 $4,000 $3,000 $2,000 $1,000 $1, $2, $1, $2, $2, $0 Calgary Edmonton Saskatoon Regina Winnipeg Municipal Tax Education Tax Library Tax

46 But has the lowest non-residential municipal property taxes $12,000 Non-Residential Property Taxes By City $400,000 Assessed Value $10,000 $8,000 $6,000 $4,000 $2,000 $5, $6, $3, $3, $3, $0 Calgary Edmonton Saskatoon Regina Winnipeg Municipal Tax Education Tax Library Tax

47 Saskatoon has the lowest residential utility charges among the Cities Average Water Utility Charge 2016 Sample Residential Customer (Water, Wastewater and Drainage) *Usage based on 360 cubic meters of water per year $1,202 $1,600 $1,615 $1,755 $1,805 Saskatoon Winnipeg Edmonton Calgary Regina *Source: City of Regina 2017 Budget Finanical Summaries

48 Saskatoon s Debt as a Share of Operating Revenues is the lowest among the Cities 120% Debt as a Share (%) Operating Revenues Source: Annual Financial Reports 100% 80% 60% 40% 110% 86% 72% 20% 44% 40% 0% Edmonton Calgary Regina Saskatoon Winnipeg Saskatoon Forecast

49 Saskatoon s Debt per Person is also the lowest among the cities $4,000 Debt Per Capita 2016 Source: Annual Financial Reports $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $2,439 $3,581 $1,188 $1,364 $1,439 $0 Calgary Edmonton Saskatoon Regina Winnipeg Debt/ Per Capita Average

50 Additional Late Changes Additional savings and revenues of $825K, could potentially be used to: reduce property tax increase by 0.37% to 4.59% offset other service level changes Caveat: still finalizing Assessment Growth numbers

51 NEXT STEPS November 1:00 pm: Business Plan and Budget Agenda and Reports Tabled with Governance & Priorities Committee November 1:00pm: City Council Business Plan & Budget Deliberations

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