REPORT Administration/Finance/Fire Committee

Transcription

1 DATE: March 19, 2018 REPORT NO: SUBJECT: 2018 Operating and Capital Budget CONTACT: Donna DeFilippis, Treasurer/Director of Finance OVERVIEW: REPORT Administration/Finance/Fire Committee Council is presented with a Draft 2018 Operating and Capital Budget which results in a general tax levy of $6,259,300, which would result in an approximate increase of $26.13 (2.30%) to the Township portion of taxes to an average homeowner. The Draft 2018 Operating and Capital Budget includes the second allocation towards the MURS (Multi-Use Recreational Site) project of $298,000. Every $59,000 of additional expenditure added to this Draft Budget equates to a 1% general tax levy adjustment which represents an $11.00 increase in taxes to the average homeowner Council is presented with three service level requests which, if approved, would increase the operating budget by $155,100 resulting in a general tax levy of $6,414,400. This would result in a $54.91 (4.84%) increase to the Township portion of taxes to an average homeowner. Capital and Special Project requests for 2018 total $4,568,800 RECOMMENDATION: 1. That, Report, regarding the 2018 Operating and Capital Budget, dated March 19 th, 2018 be received; and, 2. That, a tax levy of $6,259,300, which represents a 2.30% increase to West Lincoln taxes for an average residential property owner, be approved; and, 3. That, the Service Level Change Request to hire two additional truck drivers, resulting in an additional levy requisition of $109,400 be approved; and, 4. That, the Service Level Change Request to allocate an additional $40,000 to the Community Improvement Program, resulting in an additional levy requisition of $40,000 be approved; and, 5. That, the Service Level Change Request to hire a full-time By-Law Officer, resulting in an additional levy requisition of $5,800 be approved; and,

2 PAGE 2 6. That, the Detailed 2018 Capital Program, attached as Schedule B to this report, totaling $4,568,800 be approved with the following amendments: (a) (b) That, the fire capital budget be amended to reflect Option 2 (Chart 11) as outlined on page 11 of this report; and, That a transfer of $598,974 be made from the Road Settlement Agreement to fund the Road Resurfacing projects currently funded through the Capital Reserve and as outlined on page 9 (Chart 8) of this report; and, 7. That, water and wastewater user fees increase by 5% effective July 1, 2018; and, 8. That, as required by the Ontario Community Infrastructure Fund (OCIF) Formula Component Contribution Agreement, the Treasury Department be authorized to submit Section A of the required Project Report by the deadline of March 31, 2017, indicating that the 2018 funding of $172,526 be allocated towards the Surface Treatment on Twenty Road, from Abingdon Road to Westbrook Road; and, 9. That, the balance of Capital projects for the years 2019 to 2027 as outlined on Schedule C to this report be approved in principle; and, 10. That, tangible capital asset amortization expense estimated at $2,215,086 and post-employment expenses estimated at $37,500 be and are hereby excluded from the 2018 Draft Operating and Capital Budget as permitted through regulation 248/09. ATTACHMENTS: Schedule A 2018 Budget Summary Schedule B 2018 Summary of Capital and Special Projects Schedule C 2018 Service Level Change Requests Schedule D Summary of Ten Year Capital Plans Schedule E Detailed Revenue & Expenditure Analysis Schedule F Summary of Reserve Transfers Schedule G Estimated Reserve Balances as of December 31, 2018 BACKGROUND: The overall 2018 base budget totals $7,797,300 and represents a 4.14% increase over the 2017 Operating Budget. A tax levy of $6,259,300 is required in order to meet the requirements of this operating budget. This represents an increase of $363,300 (6.16%) over the 2017 levy requirement of $5,896,000. The tax levy of $6,259,300 includes an allocation of $298,000 which is required for the second year of the MURS (Multi-Use Recreational Site) financing. The 2017 Budget The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

3 PAGE 3 included a $283,500 allocation for the MURS financing and the 2019 Budget has a planned additional increase of $307,000 for the final MURS allocation. These allocations for MURS and the financing for this project was outlined in the 2017 Budget Approval report RFD-T dated December 5, The total three year MURS allocation is $888,500. An important factor in determining the impact of the tax levy to homeowners is to determine the average residential assessment. In 2017, the average residential assessment was $326,794, whereas in 2018 it is $345,042. The 2018 figure will be used in any analysis into the impacts of the budget to homeowners. This average assessment is for a single detached residential property. Departmental staff will be available to respond to questions regarding their budget requirements. It is important for Council to realize that every $59,000 increase or decrease in the tax funded budget equates to a 1% general tax levy adjustment. The increase in the amount needed from the tax base does not directly relate to an increase in taxes on a residential home, but rather it is the increase in the overall tax levy required year over year. A 1% increase to the tax levy equates to approximately an additional $11.00 in property taxes. Every $10,000 of expenditure added to this budget will result in an approximate increase of $1.85 to the property taxes paid by the average residential homeowner. This information should assist Council in understanding the estimated effects of the draft budget as presented and alternatively how adjustments to the amount needed from the tax base impacts the average residential property owner. Council is reminded that this budget is being presented using the Township s new chart of accounts structure. The 2018 Budget is the first financial report being presented to Council in this format. In 2017, while staff implemented a new Financial Software platform a complete redesign of the Chart of Accounts was also undertaken. This redesign was necessary to align all of the various reporting requirements the Township has and will also provide more detailed information going forward. However, for 2018 only, prior year comparisons on a line-by-line basis is challenging. Therefore, staff will be providing details as to the significant driving factors impacting the 2018 budget, as opposed to a detailed variance analysis that was provided in the past. Again, this will only be the case for the 2018 Budget, going forward, detailed variance analysis will be delivered. A Budget Open House was held on Thursday, February 22 nd as an opportunity for staff to discuss the 2018 Budget with members of the public. After a brief presentation from the Director of Finance the floor was open to questions from the public. There were five members of the general public in attendance at the meeting and four members of Council were also in the audience. Discussion took place regarding various aspects of the Budget and Township services in general. Discussion included the following topics: Winter Control Services The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

4 PAGE 4 Road Maintenance and Repair State of Township Reserves Wellandport Library Fire Services Comment sheets received indicated that Gravel Roads need attention and that Urban Storm Sewer costs should be added to Urban Service Area rates Levy Request: The 2018 Base Budget represents a total expenditure of $7,797,300 which requires a tax levy of $6,259,300. This tax levy is a 6.16 %( $363,300) increase over the 2017 levy and results in a $26.13 increase to the lower tier taxes paid by an average homeowner. Although the total tax levy is increasing by 6.16%, the impact to the property taxes paid is not a 6.16% increase, but a 2.30% increase. Assessment growth assists to lower the impact of levy increases on property taxes. It represents the tax dollars that can be raised with a zero percent levy change. The Chart below highlights the impact of growth on the tax levy: Chart 1: Impact of Growth on the Tax Levy $ Change % Change General Levy Requirement $ 6,259,300 $ 5,896,000 $ 363, % Less: Assessment Growth $ 222,000 $ - $ 222,000 Net Levy Requirement $ 6,037,300 $ 5,896,000 $ 141, % Township Taxes for Average Residential Property $ 1,161 $ 1,135 $ % Average Assessment for a single detached residential property $ 345,042 $ 326,794 In 2017, the average home in the urban area paid $75.00 for streetlight and sidewalk services. The 2018 Budget is indicating that the amount paid for streetlight and sidewalk services for an average homeowner will be $80.00 annually (a $5 increase). This would result in an annual increase in taxes of approximately $31.00 ($26.13 plus $5) for those living in the urban service area. The 2018 Budget has a total urban service area levy of $186,900 compared to a total levy of $165,000 in The increase in the 2018 Budget is attributable to higher allocations for program support, in particular, staffing costs and corporate insurance. In prior year budgets, the allocation to the Sidewalk budget was not reflective of its proportionate share of the Township s total infrastructure costs and insurance costs. Any changes to the urban sidewalk or urban streetlight budgets will alter the amount above. The municipal tax bill has three portions which need to be explained. The municipality The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

5 PAGE 5 collects taxes for itself, the Niagara Region, and the School Boards. The Township has no control over the Region or School Board rates. We bill, collect and then remit their portions to them. In 2017, the portion of the total tax billing related to the Township s budget was approximately 31%, the Regional portion was 54% and Education was 15%. This distribution has not varied significantly over past years. The chart below highlights the allocation of taxes. Chart 2: Breakdown of 2017 Property Tax Bill 2017 Property Tax Breakdown by Taxing Authority Township of West Lincoln 31% Niagara Region 54% Education 15% At the time of preparation of this report, the 2018 Niagara Region tax rates have not been determined, however, the Region has approved a 2% tax increase. However, it is likely that the increase in Regional taxes to the average homeowner in West Lincoln will be higher than 2% given the fact that West Lincoln s assessment growth relative to the other Niagara Municipalities assessment growth is on the high end. This results in West Lincoln paying a proportionately higher amount of Regional Taxes. For the purpose of this report, it is being assumed that Niagara Region taxes will actually increase 3%. The education rates for 2018 have been released from the Province. The Residential Education rate is in 2018 as opposed to in The chart below is an estimate of the impact of all three taxing authorities to the average homeowner in Please note that the chart below is based on the 2017 tax ratios. Any changes to the tax ratios made in 2018 will impact the residential tax rate. Tax ratios are established by the Upper Tier municipality after consultation with the Lower Tier municipalities. At the time of preparation of this report, there has been some discussion regarding adjustments to the Multi-Residential Tax Ratio which currently has a weighting of If the ratio is reduced for this tax class, the residential tax class will see an increase. The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

6 PAGE 6 Chart 3: Estimated Impact to 2018 Property Tax Bill 2018 Total Taxes 2017 Total Taxes $ Change % Change Assessed Value $ 345, $ 326, $ 18, % Municipal $ 1, $ 1, $ % Street Lights $ $ $ % Sidewalks $ $ $ % Total Township $ 1, $ 1, $ % $ - Region* $ 2, $ 2, $ % Education $ $ $ % $ - TOTAL $ 3, $ 3, $ % * assume 3% increase to Niagara Region portion of taxes SERVICE LEVEL CHANGES: The 2018 Draft Operating Budget was developed based on taking 2017 service levels and making adjustments based on any information which would impact the budget numbers. These adjustments include changes stemming from updated contracts, new benefit costs, inflation and the collective agreement. The three items listed in Chart 4 are new services that were not part of the 2017 Budget and reflect an enhanced level of service from the Municipality. These items are not included in the 2018 Budget. Detailed justification sheets are provided in Schedule C. The chart below indicates what the new tax levy would be and the new average amount of taxes paid for each item. The increase to taxes prior to any service level change approvals is $26.13 or 2.30%. Chart 4: Impact of Service Level Change Requests Request Impact to Operating Fund Annual Impact to Operating Fund 2018 Incremental Increase to Taxes Revised Total Increase to Taxes Revised Total % Increase to Taxes Addition of 2 Truck Drivers $ 164,000 $ 109,400 $ $ % Increased Allocation for CIP (Community Improvement Program) $ 40,000 $ 40,000 $ 7.42 $ % Addition of a new Bylaw Officer $ 5,800 $ 5,800 $ 1.08 $ % Total $ 209,800 $ 155,200 $ $ % The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

7 PAGE 7 The Column Impact to Operating Fund 2018 takes the annualized cost of two truck drivers and prorates that cost based on an actual hire date of May OVERALL 2018 BUDGET OVERVIEW: Attached to this report as Schedule E is a detailed analysis of the Budget Binder. This schedule outlines departmental Operating and Capital Budgets for This portion of the budget report will highlight high level items impacting the budget as a whole. MURS allocation: The second year of the MURS allocation is increasing the operating budget by $298,000. Labour Costs/Benefits: Salary and Benefit costs comprise approximately 69% of the total Township Operating Budget. Total Salary and Benefit Costs in 2018 total $5,402,600 compared to a total of $5,066,900 in 2017 ($335,700 increase). This represents a 6.6% increase over Factors contributing to this increase are as follows: $76,000 increase for an addition to the Planning department approved in 2017 $40,000 increase to account for compliance with Bill 148 legislation $43,000 increase to account for Library pay equity adjustments $176,700 increase to account for the overall increase budgeted for salaries and benefits which represents a 3.5% increase over the 2017 salary and benefits budget. Benefit costs include WSIB, CPP, EI, EHT, OMERS and Group Benefits. Insurance: Corporate Insurance is allocated among various departments and has an overall budget of $192,600 compared to $173,400 in 2017, which equates to an increase of $19,200. Staff have increased the 2018 insurance budget by $16,200 in anticipation of the higher asset values that will result from the construction of the new MURS facility. The balance of the insurance premium increase is a result of anticipated premium increases as a result of inflationary factors. In 2018 staff also reviewed the allocations among departments and determined based on departmental budgets, asset values and claim experience that the allocation needed to be updated. This has resulted in a larger portion of the insurance costs to be allocated towards Transportation Services. Reserve Increases: The following departments had significant increases made to their reserve transfers as compared to 2017: The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

8 PAGE 8 Chart 5: Reserves with significant increases in 2018 Reserve 2018 Contribution 2017 Contribution Difference Fire Equipment $ 300,000 $ 250,000 $ 50,000 Road Equipment $ 350,000 $ 237,000 $ 113,000 Bridges $ 130,000 $ 55,600 $ 74,400 Total $ 780,000 $ 542,600 $ 237,400 Funding from Operating Fund for Special Projects: In 2018, $154,000 is budgeted for as funding from the Operating Fund for the financing of special projects. This represents an increase of $118,750 over 2017, where $35,250 was funded from the Operating Fund. The chart below outlines the projects funded through the Operating Fund. If any projects are removed from this list, it will have an impact on the Operating Fund. Chart 6: Special Projects funded through Operating Fund Expenditure Development Charges Operating Fund Grants Provincial Website Refresh $ 18,000 -$ 18, Townhall - Replace Old Fire Hall Windows $ 3,500 -$ 3, Townhall - Repair Old Fire Hall Bathrooms $ 6,000 -$ 6, Town hall - Parking Lot Spot Repairs $ 20,000 -$ 20,000 Traffic Safety Study $ 10,000 -$ 10, PW Building - Building interior upgrades $ 10,000 -$ 10, Oakdale Blvd: Storm Pond Maintenance $ 25,000 -$ 25,000 Tree planting new & replacement $ 5,000 -$ 5, Urban Boundary Expansion $ 100,000 -$ 60,000 -$ 40, Bike Trails Master Plan $ 25,000 -$ 3,800 -$ 2,500 -$ 18, Wellandport Streetscape Master Plan $ 10,000 -$ 2,000 -$ 8, Railroad Crossing Justification Study $ 30,000 -$ 24,000 -$ 6,000 Grand Total $ 262,500 -$ 89,800 -$ 154,000 -$ 18,700 The above expenditure increases total $1,009,050. Mitigating Factors: The following items reflect increases in revenues which help to offset the operating increases outlined above. They are summarized below and total $676,700: $319,000 increase in PIL (Payments in Lieu) $82,400 increase to OMPF (Ontario Municipal Partnership Fund) $187,000 increase in Planning Department Revenues $88,000 in new revenue for transportation services which represents the Road Use Agreement funds The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

9 PAGE 9 CAPITAL RESERVE: The 2018 Budget recommends a transfer to the Capital Reserve of $177,000. This represents 3% of the 2017 tax levy, which is higher than the recommended 2% that is outlined in the Township s Reserve Policy. This higher transfer is being proposed in light of the demands from the Capital Reserve in 2018 and over the period of the ten-year capital plan. The chart below outlines the forecasted transfers to and from the Capital Reserve over a period of ten years. The assumption is being made that the transfer to the Capital Reserve would increase by 10% annually. Chart 7: Capital Reserve Forecast 2018 to 2027 Based on Ten Year Capital Plan Opening Reserve Balance 951,043 32,969 (744,991) (2,717,425) (3,825,505) (4,241,355) (4,791,165) (4,673,345) (5,545,447) (6,528,267) Transfer to Reserve 177, , , , , , , , , ,900 Transfer from Reserve 1,095, ,660 2,186,634 1,343, , , ,080 1,217,402 1,362,720 2,173,790 Closing Reserve Balance 32,969 (744,991) (2,717,425) (3,825,505) (4,241,355) (4,791,165) (4,673,345) (5,545,447) (6,528,267) (8,284,157) The projected negative balances in the Capital Reserve for the years 2019 to 2027 will require Capital projects to be deferred, or the Township will have to incur long-term debt in the form of a debenture in order to complete the projects as proposed. Staff is recommending for 2018 that some of the projects funded from the Capital Reserve be financed through a transfer from the Reserve set up for the Settlement Road Agreement Funds. In 2017, Council approved projects totalling $4,637,368 to be financed with the funds received through the Settlement related to the Wind Turbine Road Agreement Funds. After the 2017 approval, the balance remaining in this reserve is $1,462,632. It is being recommended by staff that the road resurfacing projects funded through a transfer from the Capital Reserve be funded alternatively through a transfer from the Settlement Road Agreement Reserve (see Chart 8). If approved, this reserve would have a closing balance of $863,658 at the end of If approved, this recommendation would result in the Capital Reserve having a balance of $631,943 at the end of Chart 8: Proposed Projects to be financed with the Settlement Road Agreement Reserve Expenditure Capital Reserve Development Charges Gas Tax OCIF Twenty Rd : Pulverize & DST - From: Abingdon Rd To: Westbrook Rd $ 370,000 -$ 197,474 -$ 172, Twenty Rd : Pulverize & DST - From: RR 14 To: South Grimsby Rd 8 $ 70,000 -$ 64,000 -$ 6, South Chippawa Rd : Pulverize & DST - From: North Chippawa Road To: RR 14 (Smithville Rd) $ 370,000 -$ 337,500 -$ 32,500 Grand Total $ 810,000 -$ 598,974 -$ 38,500 $ - -$ 172,526 If Council chooses not to approve the use of the Settlement Road Agreement Reserve, these projects would be funded through a debenture issue. It is estimated that a ten-year The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

10 PAGE 10 debenture at a rate of 3.5% would result in a debenture payback of $80,000 in Alternatively, Council could defer the completion of other Capital projects funded by the Capital Reserve. FIRE RESERVE: Based on the 2018 Fire Capital requests and the Fire Ten Year Capital Plan, there is pressure being placed on the Fire Reserve. The chart below outlines the projected balances in the Fire Reserve if the Ten-Year Capital Plan is completed as submitted. In light of this pressure, the transfer to the Fire Reserve has increased by $50,000 in 2018 to a total of $300,000 annually. However, the pressure on the reserve still exists even after this increased allocation. The two charts below outline the Ten-Year Capital Plan for fire and the resulting impact to the Fire Reserve. The chart below is based on an annual 7% increase being made to the annual transfer to the Fire Reserve. Chart 9: Fire Ten Year Capital Plan- OPTION 1: Grand Total New Hose Replacement $ 5,000 $ 5, Portable, Base and Truck Radios_replacement and additions $ 278,600 $ 278,600 Bunker Gear $ 17,000 $ 17,000 $ 18,000 $ 18,000 $ 18,000 $ 19,000 $ 19,000 $ 19,000 $ 20,000 $ 20,000 $ 185,000 Extracation Equipment - New $ 80,000 $ 80,000 Equipment & Gear for 10 additional Firefighters $ 136,300 $ 136, Caistor Fire Hall - Replacement $ 1,880,000 $ 1,880, New Pumper Rescue Station # 2 $ 550,000 $ 550, New Tanker Station #1 $ 450,000 $ 450, New Tanker Station #2 $ 450,000 $ 450, Chief's vehicle $ 40,000 $ 40, New Pumper Station # 1 $ 650,000 $ 650, Deputy Chief's vehicle $ 40,000 $ 40, New Aerial Truck $ 1,000,000 $ 1,000,000 Grand Total $ 890,600 $ 507,000 $ 2,348,000 $ 234,300 $ 18,000 $ 19,000 $ 1,019,000 $ 19,000 $ 670,000 $ 20,000 $ 5,744,900 Chart 10: Fire Equipment Reserve Balances from 2018 to 2027 based on OPTION Opening Reserve Balance -$ 36,463 -$ 376,323 -$ 562,323 -$ 686,823 -$ 385,223 -$ 9,823 $ 392,177 -$ 176,323 $ 286,777 $ 132,677 Transfer to Reserve $ 300,000 $ 321,000 $ 343,500 $ 367,600 $ 393,400 $ 421,000 $ 450,500 $ 482,100 $ 515,900 $ 552,100 Transfer from Reserve $ 639,860 $ 507,000 $ 468,000 $ 66,000 $ 18,000 $ 19,000 $ 1,019,000 $ 19,000 $ 670,000 $ 20,000 Closing Reserve Balance -$ 376,323 -$ 562,323 -$ 686,823 -$ 385,223 -$ 9,823 $ 392,177 -$ 176,323 $ 286,777 $ 132,677 $ 664,777 Based on the current Fire Ten Year Capital Plan the Fire Reserve would be in a negative balance for the years and This would require internal borrowing from another Township reserve, with the Industrial Park Reserve being suggested as it has a projected closing balance of approximately $842,000 at the end of It is to be noted that the Industrial Park Reserve would not be replenished fully until Alternatively, The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

11 PAGE 11 outside borrowing through the issuance of a debenture could be utilized. At the Preliminary Budget meeting held on February 20, 2018, it was suggested by Councillor Ganann to consider moving the projects in the Fire Ten Year Capital Plan out by one year. Staff reviewed this suggestion and below is a Revised Fire Ten Year Capital Plan with projects moved in such a manner as to ensure the Fire Reserve is never in a large negative balance. Chart 11: Revised Fire Ten Year Capital Plan- OPTION Grand Total New Hose Replacement $ 5,000 $ 5, Portable, Base and Truck Radios_replacement and additions $ 278,600 $ 278,600 Bunker Gear $ 17,000 $ 17,000 $ 18,000 $ 18,000 $ 18,000 $ 19,000 $ 19,000 $ 19,000 $ 20,000 $ 20,000 $ 185,000 Extracation Equipment - New $ 80,000 $ 80,000 Equipment & Gear for 10 additional Firefighters $ 136,300 $ 136, Caistor Fire Hall - Replacement $ 1,880,000 $ 1,880, New Pumper Rescue Station # 2 $ - $ 550,000 $ 550, New Tanker Station #1 $ - $ 450,000 $ 450, New Tanker Station #2 $ - $ 450,000 $ 450, Chief's vehicle $ - $ 40,000 $ 40, New Pumper Station # 1 $ 650,000 $ 650, Deputy Chief's vehicle $ - $ 40,000 $ 40, New Aerial Truck $ - $ 1,000,000 $ 1,000,000 Grand Total $ 300,600 $ 567,000 $ 1,978,000 $ 684,300 $ 468,000 $ 19,000 $ 19,000 $ 1,019,000 $ 670,000 $ 20,000 $ 5,744,900 Under this scenario, the Fire Equipment Reserve would only be in a negative position for the years 2019 and 2022 with the negative balances significantly smaller. No internal borrowing would be required. Chart 12: Fire Equipment Reserve Balances from 2018 to 2027 based on OPTION Opening Reserve Balance -$ 36,463 $ 213,677 -$ 32,323 $ 213,177 $ 64,777 -$ 9,823 $ 392,177 $ 823,677 $ 286,777 $ 132,677 Transfer to Reserve $ 300,000 $ 321,000 $ 343,500 $ 367,600 $ 393,400 $ 421,000 $ 450,500 $ 482,100 $ 515,900 $ 552,100 Transfer from Reserve $ 49,860 $ 567,000 $ 98,000 $ 516,000 $ 468,000 $ 19,000 $ 19,000 $ 1,019,000 $ 670,000 $ 20,000 Closing Reserve Balance $ 213,677 -$ 32,323 $ 213,177 $ 64,777 -$ 9,823 $ 392,177 $ 823,677 $ 286,777 $ 132,677 $ 664,777 It is recommended that the Revised Fire Ten Year Capital Plan be approved by Council. It is also important to note that in order for the Fire Reserve to remain for the most part in a positive balance, the annual contribution to the Fire Reserve will have to increase by 7% on an annual basis commencing in WATER & WASTEWATER BUDGETS: Both the Water and Sewer Department budgets are self-funding, meaning that all costs The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

12 PAGE 12 are off-set by user fees and not property taxes. The 2018 budget is proposing a 5% increase to water and wastewater rates as outlined in the 2016 Water and Wastewater Rate Study and Financial Plan. The rate change would be effective July 1, 2018 and would impact the September 2018 and December 2018 billings. The water consumptive rate would increase to $1.28 from $1.22 and the fixed quarterly rate for a ¾ service would increase to $35.81 from $ Bulk water would see its per cubic meter rate increase to $1.72 from $1.64. The wastewater consumptive rate would increase to $1.65 from $1.57 and the fixed quarterly rate for a ¾ service would increase to $82.55 from $ The impact to an average quarterly water bill is outlined below: Chart 13: Impact of Proposed 5% Increase to Quarterly Water & Wastewater Bill Impact of Proposed Water & Wastewater Rates Based on an average consumptiom of 45 cubic meters per quarter, or 180 cubic meters annually Quarterly Charge Current July 2018 Water Consumptive $ 55 $ 58 Sewer Consumptive $ 71 $ 74 Water Base $ 34 $ 36 Sewer Base $ 79 $ 83 Total $ 238 $ 250 ONTARIO REGULATION 284/09 REQUIRED REPORTING: As a municipality, the Township is required to follow the accounting standards established by the Public Sector Accounting Board (PSAB). The PSAB standards do not require municipal budgets be prepared on a fully accrual basis. The Township of West Lincoln, like most Ontario Municipalities, continues to prepare budgets on a cash basis. A key outcome of the annual budget is a tax rate. The tax rate is based on annual cash requirements and therefore does not include the PSAB requirements around accrual accounting and accounting for non-financial assets and liabilities Ontario Regulation 284/09 allows a municipality to exclude from its annual budget estimated expenses related to the following: i. Amortization expenses ii. Post-Employment Benefit Expenses iii. Solid waste landfill closure and post-closure expenses N/A to our Township The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

13 PAGE 13 The regulation however does require that the municipality report on the impact of these excluded costs. In particular, reporting is required to estimate the impact on the accumulated surplus and the impact on the future tangible capital asset funding requirements from resulting from the exclusion of any of the expenses listed above. i. Amortization Expense: Amortization expense represents the reduction in the economic benefits realized by the Township s Tangible Capital Assets during the fiscal period. Amortization expense should not be used to determine the impairment of an asset; however, it is a good tool to predict the future annual financial commitment required for asset rehabilitation or replacement. The 2018 Draft Operating and Capital Budget excludes $2,215,086 of estimated amortization expense, which would reduce the Township s accumulated surplus. The 2018 Budget does include total transfers to reserves relating to Tangible Capital Assets of $906,200. In 2018, $2,721,800 is being transferred from Reserves to finance Capital expenditures. It should also be noted that the 2018 Budget includes $4,057,300 in recommended Tangible Capital Asset Investments. These investments are treated as expenditures in the 2018 Budget; however, in accrual accounting they are Tangible Capital Additions and are not expensed, resulting in an increase to the accumulated surplus. ii. Post-employment Benefits: Post-employment benefits are non-pension benefits provided to employees that met specific criteria upon retirement. The 2018 Draft Operating Budget excludes an estimated $37,500 of post-employment benefits expense which has the impact of decreasing the accumulated surplus. The 2018 Budget does include $24,600 of the current year s post-employment benefit costs paid out to current eligible retired employees, offsetting the liability. Impact on Accumulated Surplus: The accumulated surplus shown in the Township s Financial Statements represents the net resources available to provide future services. It does not represent surplus cash. The Township s accumulated surplus as calculated using PSAB policies was $72.8 million as of December 31, The closing balance as of December 31, 2017 is not yet available. Chart 8 below outlines the estimated impact of excluding the above two expenses: The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

14 PAGE 14 Chart 14: Impact of Excluding Amortization and Post-Employment Benefits on the Accumulated Surplus Tangible Capital Asset Amortization 2,215,086 Reserve Financing for Tangible Capital Assets 2,721,800 Post Employment Benefits 37,500 Total Decrease to Accumulated Surplus 4,974,386 Investment in Tangible Capital Assets 4,057,300 Reserve contibutions related to Tangible Capital Assets 906,200 Total Increase to Accumulated Surplus 4,963,500-10,886 INTER-DEPARTMENTAL COMMENTS: Department Heads have all been involved in the creation of their own budget documents. Department Heads worked with their staff to send in initial budget plans which have undergone some change through meetings with the Treasurer and CAO to get to the final draft document as presented to Council. CONCLUSION: It is concluded that the 2018 Operating and Capital Budget report and recommendations be approved as presented. Prepared by: Approved by: Donna DeFilippis, CPA,CA Treasurer/Director of Finance Carolyn Langley Acting CAO/Clerk The Township of West Lincoln will be a community that values our heritage, preserves our environmental and natural resources, fosters entrepreneurial spirit and provides excellent quality of life

15 SCHEDULE A TOWNSHIP OF WEST LINCOLN 2018 Budget General Revenues & Expenditures Budget Budget Difference Difference General $ $ $ % Operating Taxation Revenue TAX LEVY ,259,300 5,896, , % SUPPLEMENTAL TAX LEVY RESIDENT ,000 65,000 (15,000) % 6,309,300 5,961, , % Payments in Lieu of Taxation PILS COMMERCIAL , , , % 697, , , % Licenses & Permits GF-TRAILER LICENSES % GF-HUNTING LICENSES % GF-LOTTERY LICENSES ,500 3,700 (200) -5.41% 4,500 4,700 (200) -4.26% Rents & Concessions GF-PROPERTY RENTAL ,400 48,500 (2,100) -4.33% 46,400 48,500 (2,100) -4.33% Government Transfers GF-OMPF , ,400 82, % 954, ,400 82, % Penalty & Interest Revenue GF-P&I TAXES , ,000 (55,000) % GF-PARKING TICKETS ,000 (27,000) % 325, ,000 (82,000) % Investment Income GF-CIBC INTEREST ,000 89,000 (24,000) % GF-MERIDIAN INTEREST ,000-5, % GF-RBC DOMINION INTEREST ,000 76,000 (6,000) -7.89% 140, ,000 (25,000) % Other Revenue GF-DONATIONS , , % GF-MISCELLANEOUS ,000 5,100 (100) -1.96% 425,000 5, , % Funding From Accumulated Surplus GF-TRSF FROM PY SURPLUS , , % GF-TSFR FROM WORKING FUNDS ,000 45, % 145, , % Total General Revenue 9,047,000 7,985,900 1,061, % General Expenses GF-INT DEBENT # , , % GF-PRNCPL DEBENTURE # , , % 512, , % Reserve Contributions GF-CONTRIB TO CAPITAL , ,300 (300) -0.17% GF-CONTRIB TO CONTINGENCY ,200 (37,200) % GF-CONTRIB TO FACILITIES , ,000 (158,900) % GF-CONTRIB TO TECHNOLOGY ,000 15, % GF-CONTRIB TO WT COM FUND RESERVE , , % 737, , , % Total General Expenses 1,249, , , % Financing for Service Areas 7,797,300 7,487, , %

16 SCHEDULE A General Government TOWNSHIP OF WEST LINCOLN 2018 Budget Operating Expenditures Budget Budget Difference Difference $ $ $ % Governance 241, ,300 49, % Corporate Management 1,629,800 1,522, , % Total General Government 1,871,500 1,714, , % Protection Services Fire 1,138,500 1,037, , % Building Permit & Inspection Services and Protective Inspection & Parking 88,600 94,300 (5,700) -6.04% Provincial Offences Act (POA) (18,500) - (18,500) Animal Control 20,300 18,300 2, % Total Protection Services 1,228,900 1,149,900 79, % Transportation Services Roads - Paved & Unpaved Operating 1,835,400 2,081,700 (246,300) % Traffic Operations & Roadside Maintenance Services Operating 194,900 7, , % Winter Control 542, ,100 (69,600) % Crossing Guards 80,000 67,200 12, % Streetlights 45,200 48,900 (3,700) -7.57% Bridges 200, ,600 76, % Total Transportation Services 2,898,900 2,942,200 (43,300) -1.47% Environmental Services Storm Sewer 112, , % Total Environmental Services 112, , % Health Services Cemetery 68,400 70,800 (2,400) -3.39% Total Health Services 68,400 70,800 (2,400) -3.39% Library Services 510, ,500 92, % Recreational and Cultural Services Rec Facilities 288, ,000 (119,300) % Parks 369, ,300 69, % Rec Programming 241, , , % Total Recreational and Cultural Services 899, ,500 68, % Planning and Development Planning and Heritage 171, ,900 (26,300) % Drainage 35,900 45,500 (9,600) % Total Planning and Development 207, ,400 (35,900) % Facilities - 117,400 (117,400) % (in 2018 Facilities are budgeted within appropriate service area) TOTAL 2018 OPERATING EXPENDITURE 7,797,300 7,487, , %

17 SCHEDULE B 2018 CAPITAL BUDGET - TANGIBLE CAPITAL ASSETS 2018 Expenditure Development Charges Bridge Reserve Building Dept. Reserve Capital Reserve Equipment Reserve Facilities Reserve Fire Reserve Gas Tax In Lieu of Parkland IT Reserve Library Reserve Planning Reserve Sewer Reserve Water Reserve _02500_Corporate_Mangement $ 176,100 -$ 103,000 -$ 73,100 Miscellaneous equipment $ 3,000 -$ 3, Microsoft Exchange Server & Migration $ 52,000 -$ 52, Miscellaneous Network Hardware $ 13,100 -$ 13, Replacement Phone System $ 100,000 -$ 100,000 New Computers $ 8,000 -$ 8,000 _04100_Fire $ 890,600 -$ 639, New Hose Replacement $ 5,000 -$ 5, Portable, Base and Truck Radios_replacement and additions $ 278,600 -$ 27,860 Bunker Gear $ 17,000 -$ 17, New Pumper Rescue Station # 2 $ 550,000 -$ 550, Chief's vehicle $ 40,000 -$ 40,000 _06000_Transportation_Services_General $ 484,500 -$ 57,600 -$ 14,400 -$ 412,500 Miscellaneous road equipment $ 6,000 -$ 6, Roadside Rear/Side Mower for Kubota Tractor - To replace 2009 Tiger $ 26,000 -$ 26,000 Plow Blade for Kubota Tractor $ 16,000 -$ 16, Vehicle Hoist $ 8,000 -$ 8, Pickup Truck 12 - To replace 2005 Chevrolet $ 36,000 -$ 36, Tractor - To replace 2004 Kubota $ 92,000 -$ 92, Backhoe with hoe ram & packer - To replace 2006 John Deere $ 192,500 -$ 192, Pickup Truck 14 - To replace 2008 Ford $ 36,000 -$ 36, Pickup Truck - New to fleet $ 72,000 -$ 57,600 -$ 14,400 _06110_Roads_Paved $ 940,000 -$ 49,500 -$ 598,974 -$ 119, Abingdon Rd : Pulverize & DST - From: South Chippawa Rd To: North Chippawa Rd $ 130,000 -$ 11,000 -$ 119, Twenty Rd : Pulverize & DST - From: Abingdon Rd To: Westbrook Rd $ 370,000 -$ 197, Twenty Rd : Pulverize & DST - From: RR 14 To: South Grimsby Rd 8 $ 70,000 -$ 6,000 -$ 64, South Chippawa Rd : Pulverize & DST - From: North Chippawa Road To: RR 14 (Smithville Rd) $ 370,000 -$ 32,500 -$ 337,500 _06130_Bridges_Culverts $ 590,000 -$ 73,100 -$ 196,350 -$ 320, Boyle Rd - From: East Chippawa (WL) To: River Road (W) SDR $ 360,000 -$ 39,450 -$ 320, Caistor-Gainsborough Townline Rd - From: South Chippawa To: RR 63 SDR $ 30,000 -$ 2,850 -$ 27, Patterson Rd - From: Sixteen Rd To: RR 20 SDR $ 30,000 -$ 2,800 -$ 27,200 Guardrail Replacement $ 130,000 -$ 130,000 Guard Rail Replacement - various bridges $ 130,000 -$ 130, Pedestrian Trail Bridge - Forestview $ 40,000 -$ 28,000 -$ 12,000 _06140_Traffic_Ops_Roadside_Services $ 205,600 -$ 18,000 -$ 187,600 Railroad Crossing Unopened Roads - various locations $ 15,000 -$ 15,000 Signs - New & Replacment $ 10,600 -$ 10,600 Sidewalk Replacement Wade Rd (West side) - From: Colver St To: RR m $ 180,000 -$ 18,000 -$ 162,000 _08110_Wastewater_Collection_Conveyance $ 5,000 -$ 5,000 Miscellaneous Wastwater Equipment $ 5,000 -$ 5,000 _08210_Urban_Storm_System $ 20,000 -$ 20, Colver St: Canborough St to Wade Rd Refurbishment $ 20,000 -$ 20,000 _08320_Water_Distribution_Transmission $ 125,000 -$ 20,000 -$ 105,000 Miscellaneous Water Equipment $ 5,000 -$ 5,000 Water Meters Replacement Program $ 50,000 -$ 50,000 Water Meters New Installation $ 30,000 -$ 30, West St - From: South Grimsby Rd 5 To: Wade Rd Design Main Replacement $ 40,000 -$ 20,000 -$ 20,000 _16100_Parks $ 419,700 -$ 48,000 -$ 117,000 -$ 51,700 -$ 16,000 -$ 21,000 -$ 5,000 Miscellaneous recreation equipment $ 6,000 -$ 6, Heritage Committee Mural Project $ 12,500 -$ 5, Leisureplex - Works building upgrades $ 16,000 -$ 16, Streamside Playground - New playground equipment $ 32,000 -$ 23,000 -$ 9, Abingdon Baseball Diamond Lights $ 40,000 -$ 40, Leisureplex - New Green Space $ 12,000 -$ 12, Smithville Square Parkette $ 250,000 -$ 25,000 -$ 77, : Wellandport Park Upgrades - From: To: $ 5, Front mount mower - To replace 2008 John Deere $ 21,500 -$ 21, Landscape Trailer - To replace 2005 NandO $ 20,000 -$ 20, Field Paint Liner $ 4,200 -$ 4,200 _16340_Recreation_Facilities $ 24,500 -$ 7,500 -$ 17, Floor Cleaning Machine $ 7,500 -$ 7, Wellandport Hall - New Steel Roof, Facia & Soffit $ 17,000 -$ 17,000 _16402_Library_Smithville $ 23,300 -$ 4,800 -$ 18, Photocopier $ 5,000 -$ 5,000 Replacement Computers $ 1,500 -$ 1,500 Addition to printed collection $ 13,500 -$ 4,800 -$ 8,700 Addition to audio visual collection $ 3,300 -$ 3,300 _16403_Library_Caistorville $ 11,500 -$ 4,800 -$ 6,700 Addition to printed collection $ 7,200 -$ 4,800 -$ 2,400 Addition to audio visual collection $ 4,300 -$ 4,300 _16404_Library_Wellandport $ 116,500 -$ 4,800 -$ 101, Wellandport Addition Furniture and Fixtures $ 100,000 -$ 90, Computers-New $ 5,000 -$ 5,000 Addition to printed collection $ 8,700 -$ 4,800 -$ 3,900 Addition to audio visual collection $ 2,800 -$ 2,800 _04450_Building_Permit_Inspection_Services $ 25,000 -$ 25, New Vehicle - 2nd in fleet $ 25,000 -$ 25,000 Grand Total $ 4,057,300 -$ 280,600 -$ 196,350 -$ 25,000 -$ 1,040,974 -$ 471,700 -$ 33,000 -$ 639,860 -$ 439,550 -$ 21,000 -$ 73,100 -$ 126,900 -$ 5,000 -$ 5,000 -$ 105,000

18 SCHEDULE B 2018 CAPITAL BUDGET - TANGIBLE CAPITAL ASSETS 2018 Expenditure Inter-Municipal Loan Grant Regional Grant Community Grant Provincial OCIF Donations _02500_Corporate_Mangement $ 176,100 Miscellaneous equipment $ 3, Microsoft Exchange Server & Migration $ 52, Miscellaneous Network Hardware $ 13, Replacement Phone System $ 100,000 New Computers $ 8,000 _04100_Fire $ 890,600 -$ 250, New Hose Replacement $ 5, Portable, Base and Truck Radios_replacement and additions $ 278,600 -$ 250,740 Bunker Gear $ 17, New Pumper Rescue Station # 2 $ 550, Chief's vehicle $ 40,000 _06000_Transportation_Services_General $ 484,500 Miscellaneous road equipment $ 6, Roadside Rear/Side Mower for Kubota Tractor - To replace 2009 Tiger $ 26,000 Plow Blade for Kubota Tractor $ 16, Vehicle Hoist $ 8, Pickup Truck 12 - To replace 2005 Chevrolet $ 36, Tractor - To replace 2004 Kubota $ 92, Backhoe with hoe ram & packer - To replace 2006 John Deere $ 192, Pickup Truck 14 - To replace 2008 Ford $ 36, Pickup Truck - New to fleet $ 72,000 _06110_Roads_Paved $ 940,000 -$ 172, Abingdon Rd : Pulverize & DST - From: South Chippawa Rd To: North Chippawa Rd $ 130, Twenty Rd : Pulverize & DST - From: Abingdon Rd To: Westbrook Rd $ 370,000 -$ 172, Twenty Rd : Pulverize & DST - From: RR 14 To: South Grimsby Rd 8 $ 70, South Chippawa Rd : Pulverize & DST - From: North Chippawa Road To: RR 14 (Smithville Rd) $ 370,000 _06130_Bridges_Culverts $ 590, Boyle Rd - From: East Chippawa (WL) To: River Road (W) SDR $ 360, Caistor-Gainsborough Townline Rd - From: South Chippawa To: RR 63 SDR $ 30, Patterson Rd - From: Sixteen Rd To: RR 20 SDR $ 30,000 Guardrail Replacement $ 130,000 Guard Rail Replacement - various bridges $ 130, Pedestrian Trail Bridge - Forestview $ 40,000 _06140_Traffic_Ops_Roadside_Services $ 205,600 Railroad Crossing Unopened Roads - various locations $ 15,000 Signs - New & Replacment $ 10,600 Sidewalk Replacement Wade Rd (West side) - From: Colver St To: RR m $ 180,000 _08110_Wastewater_Collection_Conveyance $ 5,000 Miscellaneous Wastwater Equipment $ 5,000 _08210_Urban_Storm_System $ 20, Colver St: Canborough St to Wade Rd Refurbishment $ 20,000 _08320_Water_Distribution_Transmission $ 125,000 Miscellaneous Water Equipment $ 5,000 Water Meters Replacement Program $ 50,000 Water Meters New Installation $ 30, West St - From: South Grimsby Rd 5 To: Wade Rd Design Main Replacement $ 40,000 _16100_Parks $ 419,700 Miscellaneous recreation equipment $ 6, Heritage Committee Mural Project $ 12, Leisureplex - Works building upgrades $ 16, Streamside Playground - New playground equipment $ 32, Abingdon Baseball Diamond Lights $ 40, Leisureplex - New Green Space $ 12, Smithville Square Parkette $ 250, : Wellandport Park Upgrades - From: To: $ 5, Front mount mower - To replace 2008 John Deere $ 21, Landscape Trailer - To replace 2005 NandO $ 20, Field Paint Liner $ 4,200 _16340_Recreation_Facilities $ 24, Floor Cleaning Machine $ 7, Wellandport Hall - New Steel Roof, Facia & Soffit $ 17,000 _16402_Library_Smithville $ 23, Photocopier $ 5,000 Replacement Computers $ 1,500 Addition to printed collection $ 13,500 Addition to audio visual collection $ 3,300 _16403_Library_Caistorville $ 11,500 Addition to printed collection $ 7,200 Addition to audio visual collection $ 4,300 _16404_Library_Wellandport $ 116, Wellandport Addition Furniture and Fixtures $ 100, Computers-New $ 5,000 Addition to printed collection $ 8,700 Addition to audio visual collection $ 2,800 _04450_Building_Permit_Inspection_Services $ 25, New Vehicle - 2nd in fleet $ 25,000 Grand Total $ 4,057,300 -$ 105,000 -$ 8,000 -$ 48,000 -$ 5,000 -$ 2,500 -$ 100,000 -$ 48,000 -$ 5,500 -$ 10,000 -$ 10,000 -$ 250,740 -$ 105,000 -$ 8,000 -$ 48,000 -$ 172,526 -$ 10,000

19 2018 CAPITAL BUDGET - SPECIAL PROJECTS 2018 SCHEDULE B Expenditure Development Charges Operating Fund Capital Reserve Facilities Reserve Sewer Reserve Water Reserve Grants Provincial _02500_Corporate_Mangement $ 71,500 -$ 47,500 -$ 24, Website Refresh $ 18,000 -$ 18, Townhall - Replace Old Fire Hall Windows $ 3,500 -$ 3, Townhall - Paint Lobby $ 24,000 -$ 24, Townhall - Repair Old Fire Hall Bathrooms $ 6,000 -$ 6, Town hall - Parking Lot Spot Repairs $ 20,000 -$ 20,000 _06000_Transportation_Services_General $ 85,000 -$ 34,900 -$ 20,000 -$ 30,100 Traffic Master Plan $ 65,000 -$ 34,900 -$ 30,100 Traffic Safety Study $ 10,000 -$ 10, PW Building - Building interior upgrades $ 10,000 -$ 10,000 _08110_Wastewater_Collection_Conveyance $ 75,000 -$ 19,000 -$ 56,000 Sanitary Sewer Master Plan $ 75,000 -$ 19,000 -$ 56,000 _08210_Urban_Storm_System $ 25,000 -$ 25, Oakdale Blvd: Storm Pond Maintenance $ 25,000 -$ 25,000 _08320_Water_Distribution_Transmission $ 75,000 -$ 56,200 -$ 18, Water Master Plan $ 75,000 -$ 56,200 -$ 18,800 _16100_Parks $ 5,000 -$ 5,000 Tree planting new & replacement $ 5,000 -$ 5,000 _16340_Recreation_Facilities $ 10,000 -$ 10, Wellandport Hall - Point & Paint $ 10,000 -$ 10,000 _18100_Planning_Development $ 165,000 -$ 89,800 -$ 56,500 -$ 18, Urban Boundary Expansion $ 100,000 -$ 60,000 -$ 40, Bike Trails Master Plan $ 25,000 -$ 3,800 -$ 2,500 -$ 18, Wellandport Streetscape Master Plan $ 10,000 -$ 2,000 -$ 8, Railroad Crossing Justification Study $ 30,000 -$ 24,000 -$ 6,000 Grand Total $ 511,500 -$ 199,900 -$ 154,000 -$ 54,100 -$ 10,000 -$ 56,000 -$ 18,800 -$ 18,700

20 Schedule C 2018 SERVICE AREA SERVICE CHANGE Building & Enforcement Department Hiring of New Full Time By-Law Enforcement Officer JUSTIFICATION The ability for both by-law enforcement and building inspection to be conducted by the same resource has been challenged and is effecting the provision of service in these areas. To address these challenges thus ensuring that mandatory service levels are met in both areas of jurisdiction an additional human resource is required to divide the work thus allowing for both primary functions, building and by-law enforcement, to be handled appropriately. Through the addition of the new enforcement officer position the necessary time can be spent resolving enforcement matters while leaving the building inspector to conduct the mandated construction inspection as required through the building code act. This position will only be added when it is determined as necessary in order to maintain proper service levels. The need will be monitored and hiring will only take place once an increased need is evident. BUDGET IMPACT The analysis below is based on the assumption that a new ByLaw Officer would be in a similar salary grid as the Building Inspection position. In addition, the analysis below has been annualized. Department Increase Impact Building Inspection $ 73,400 Decrease to Building Department Reserve which may lead to increase in Building Department User Fees ByLaw Enforcment $ 5,800 Increase to the tax levy 1