Infrastructure: The City of Toronto Gap

Transcription

1 Infrastructure: The City of Toronto Gap December 1, 2017

2 Overview

3 CHALLENGES IN CAPITAL FINANCING Funding constrained by debt cost limit 15 per cent of property tax Current funding well below needs / Council directions SOGR Backlog growing Direct/Indirect financing through operating Debt payments Surplus management policy Capital from current policy MLTT allocation policy Tax implications Inadequate, unstable and poorly understood - 3 -

4 2016 POTENTIAL FINANCIAL IMPACT OF UNFUNDED CAPITAL PROJECTS Funded Projects $32B $1.73 Billion in Debt Charges Unfunded Projects $22.3B 65% residential property tax increase Note: New transit Expansion projects were not included. Includes Rate projects

5 2017 UNMET NEEDS TO BE FUNDED Notwithstanding $32 Billion funded in 10 year Capital Plan, the City still has unmet capital needs of $33 Billion over the next 15 years. Investments are required to address state of good repair backlog, service improvement initiatives and future transit expansion

6 UNMET CAPITAL REQUIREMENTS: DEFERING OUR NEEDS FUNDED: $32 BILLION UNFUNDED: $33 BILLION Note: * Represent gross costs. Federal and Provincial funding expected. City Share currently funded from Development Charges and other sources

7 Tax Capital Budget & Plan

8 $5.8 Billion New Investments to Fund Critical Unmet Needs

9 $5.8 BILLION NEW INVESTMENT FUNDS CRITICAL UNMET NEEDS Invest in PTIF (Provincial Transit Infrastructure Funding) Projects [$709 Million] Fund the F.G. Gardiner (Plan B) Uncertain Federal Subsidy [$14M Gross/ $863M Debt] (including Grade Separation and Go Transit Expansion) Build Smart Track [$3.8 Billion] and more. Protect Portland from Flooding [$1.2 Billion] Reduce Library SOGR Backlog [$21 Million] - 9 -

10 STRATEGIES TO CREATE ADDITIONAL INVESTMENT ROOM RESULTS $134M Realigning to project timelines in the first 5 years released debt room of $134 Million $2.2B Maximizing debt capacity increased debt room by $2.2 Billion $1.0B Council approved 0.5% per year City Building Fund (for 5 years) increased debt room by further $1.0 Billion $3.3B Total $3.3 Billion debt room provides $5.8 Billion in capital investments

11 KEY PRIORITIES FUNDED IN THE PRELIMINARY CAPITAL & PLAN - $5.8B Funding Criteria for Unmet Needs ($M) 1- Approved projects over debt target due to cost escalation 2- To ensure legislative compliance 3- Health &Safety/SOGR to avoid service disruption/claims 4- To leverage opportunity otherwise missed 5- Results in operating savings or cost avoidance 6- To implement approved Council priorities 7- SOGR projects to reduce backlog 8- To address sustained service demand Grand Total 10-Yr 10-Yr Gross Debt ,975 1, ,831 3,

12 KEY PROJECTS FUNDED IN THE PRELIMINARY CAPITAL & PLAN - $5.8B GROSS/3.3B DEBT ($M) 10-Yr Gross 10-Yr Debt SmartTrack 3,842 1,840 F.G. Gardiner TTC & Non TTC PTIF Projects Port Lands Flood Protection 1, Modernization & Transformation Toronto Public Library SOGR Backlog North York Central Renovation Phase MB Renovation Accessibility Retrofit Multi-Branch SOGR Administrative Penalty System 6 6 Other Grand Total 5,831 3,

13 TAX CAPITAL AND PLAN - $26.5B WHERE THE MONEY GOES Capital Budget & Plan By Program ($m) 60% TTC/Transportation Capital Budget & Plan By Category ($m) 52% SOGR Facilities Management, Real Estate & Environment, $1,030, 4% Waterfront Revitalization, $1,382, 5% Health and Safety, $240, 1% Legislated, $810, 3% Transportation Services, $5,294, 20% Corporate Initiatives, $4,019, 15% Growth Related, $6,444, 24% $26.5B Toronto Police Service, $521, 2% Parks, Forestry & Recreation, $1,204, 5% Fleet Services, $577, 2% $26.5B Other, $1,862, 7% Toronto Transit Commission, $6,842, 26% Spadina Subway Ext, $344, 1% Scarborough Subway Ext., $3,398, 13% Service Improvement, $5,354, 20% State of Good Repair, $13,624, 52%

14 WHERE THE MONEY COMES FROM 2017 TAX AND 10 YEAR PLAN 2017 Capital Budget Funding Sources ($m) 38% Funding from Debt/CFC Capital Budget & Plan Funding Source ($m) 45% Funding from Debt/CFC Federal Subsidy, $662, 24% Federal Subsidy, $4,789, 18% Capital from Current, $294, 10% Provincial Subsidy, $261, 9% Capital from Current, $5,085, 19% Provincial Subsidy, $3,607, 14% $2.8B Reserves / Reserve Funds, $360, 13% $26.5B Reserves / Reserve Funds, $2,739, 10% Debt, $768, 28% Recoverable Debt, $52, 2% Other, $186, 7% Development Charges, $189, 7% Debt, $6,710, 26% Recoverable Debt, $855, 3% Development Charges, $1,364, 5% Other, $1,323, 5%

15 10 Year Capital Plan: Impact on State of Good Repair Backlog

16 STATE OF GOOD REPAIR BACKLOG AS % OF TOTAL ASSET TRENDING DOWN TO 6.5%

17 SOGR BACKLOG AS A % OF TOTAL ASSET VALUE WITHOUT F.G. GARDINER IMPACT

18 10 Year Capital Plan: Impact on Debt Financing

19 Millions OUTSTANDING TAX SUPPORTED DEBT BALANCE 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1, Net Debt 4,046 4,549 5,248 5,891 6,281 6,876 6,869 6,714 7,370 7,761 8,

20 Millions TAX SUPPORTED DEBT SERVICE COSTS Debt Costs Funded by the 0.5% City Building Fund Debt Costs Funded by Regular Property Tax

21 Scenarios To Create More Investment Room

22 POTENTIAL DEBT ROOM TO INVEST IN MORE UNMET NEEDS $1.9B $1.0B $2.9B Expressway tolling at $1.40 per trip will free up debt room of $1.9 Billion Additional 0.5% (Total of 1.0%) City Building Fund will provide another $1B debt room Total new debt room of $2.9 Billion created to fund more unmet needs

23 Tax Impacts

24 PRELIMINARY 2017: WHERE THE MONEY GOES Police Service & Board $ TTC (Incl. Wheel Trans) $ Debt Charges $ % Fire Services Shelter, Support & Housing Administration $ $ Parks, Forestry & Recreation $ Transportation Services Toronto Public Library Toronto Employment & Social Services Toronto Paramedic Services $ $ $76.81 $54.32 Total = $2,841* {Based on Property Tax of $2,841 (includes preliminary 2.0% property tax increase) for an average house with an assessed value of $587,471} *Does not Include Education Taxes 26% Children's Services $52.89 Other* $38.92 Scarborough Subway $28.28 ($120.00) ($20.00) $80.00 $ $ $ $ $ $

25 2016 IMPACT OF CVA, POLICY IF RESIDENTIAL TAX INCREASE AT INFLATION (1.3%) ON AVERAGE* RESIDENTIAL HOME Budgetary 1.30% Res./0.43% Non. Res. Tax Increase (+0.6%/0.20% res/nonres increase for subway) Impact on Average Residential Household % $ Per Household* 2015 Tax = $2,675 (municipal) CVA-Shift between Property Classes 0.04% $1.13 Policy Shift between Property Classes 0.74% $19.89 No New Revenue to City Budgetary Levy Increase (Res.*) 1.30% $35.06 Scarborough Subway 0.60% $16.18 Average Net Impact on Homeowner 2.69% $ Tax = $2,748 *Average House Assessed at $549,

26 2017 TOTAL TAX INCREASE + CITY BUILDING FUND & CVA SHIFT RESIDENTIAL TAX INCREASE OF 2.0% 4.00% 3.00% CVA / Policy / Regulation Impacts, 0.98% 2.00% City Building Fund, 0.50% Total Residential Tax Increase CVA / Policy / Regulation Impacts, 0.40% 3.48% City Building Fund, 0.35% Total City Tax Increase 1.00% Budget Impact, 2.00% Budget Impact, 1.39% 2.14% 0.00% Residential Total City Increase

27 KEEPING THE PUBLIC INFORMED toronto.ca/budget

28 UNMET CAPITAL REQUIREMENTS: DEFERING OUR NEEDS Major Unmet Capital Needs ($Million) Unmet Need Priorities (Tier 1 Projects, TCHC & Waterfront 2.0) TCHC State of Good Repair Backlog (Province/Federal Share of $2.6 billion requirement) 2,378 SOGR Backlog to 2% of Asset Value (Exc.TCHC) 1,046 TTC Board Approved Unfunded 2,679 SSHA (George Street Revitalization) 480 Long Term Homes Care Services 246 Other City Priorities 1,318 Lower Don Flood Protection 975 Waterfront Land Servicing (EBF, WDL and Keating) 150 Note: * Represent gross costs. Federal and Provincial funding expected. City Share currently funded from Development Charges and other sources. Waterfront Public Realm Initiatives 350 Less Waterfront DCS/Federal & Provincial Funding -1,125 Unfunded Projects from Environmental Assessments 2,000 TCHC Revitalization Principal repayment current revitalization 200 TCHC Revitalization Additional funding requirements existing revitalizations 400 Tier 2 Unmet Need Priorities TTC Future Capital Needs 2,233 Other Programs 474 Unfunded Transit Expansion Initiatives All Unfunded Transit Expansion Initiatives 28 15,300 Total of Unfunded Capital Projects ($Million) 29,