Table of Contents Final Budget - Executive Summary November 28, 2017 Page 1

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1 Executive Summary

2 Table of Contents Budget at a Glance... 2 Your Tax Dollars... 5 Background Information... 6 County Profile... 6 Statistics... 7 Overview... 8 Financial Principles & Guidelines Budget Framework Key Inputs Assumptions Consolidated Budget Components Property Taxation Levy Budget Operating Budget Capital Budget Reserves Reserve Funds Trust Funds Development Charge Reserves Debt Financing Operating Cash Flow Risks & Opportunities Budget and the Strategic Plan Department Budget Components Department Descriptions Reserve Use Operational Requests Staffing Budget Operating Budget by Department Capital Projects Service Partners City of Barrie Operating and Capital City of Orillia Operating and Capital Final Budget - Executive Summary November 28, 2017 Page 1

3 Budget at a Glance The 2018 budget contains operating and capital expenditures of $510M. Total County Operating Expenditures of $407M Major department expenditures include: Paramedic Services - $47M Long Term Care and Seniors Services - $54M Ontario Works - $71M Children & Community Services - $53M Social Housing - $50M Transportation and Engineering - $23M Solid Waste Management - $41M Total County Capital Expenditures of $103M Major department capital expenditures include: Paramedic Services - $8M Simcoe County Housing Corporation - $34M Roads Construction - $48M Roads Maintenance - $2M Solid Waste Management - $2M Transit - $4M Applying operating and capital revenues of $442M excluding property tax rate increase, reserve use and capital financing leaves a net requirement of $68.4M which is proposed to be financed as follows: 1% tax rate increase of $1.6M Capital debt financing of $7.9M internally financed Non-DC Reserve use of $11.9M largely driven by planned Social Housing projects, Hospital Alliance commitments and Asset Management Initiatives Development Charge Reserve use of $47M In addition to including all the resources necessary to maintain existing services and service levels, the budget contains items that address areas of growth as well as initiatives directed by Council to enhance service levels, increase efficiencies or prepare for the future. These include: Continued implementation of the 10-year Affordable Housing and Homelessness Prevention Strategy, dedicating resources for increasing rental supplements, secondary suites and rental development The Simcoe County Housing Corporation capital program includes two major developments. One in Collingwood and the other in Wasaga Beach Increasing Paramedic Services resourcing to address 4.6% continued growth of medical emergency calls in 2017 Continue the development of an Environmental Resource Recovery Centre(ERRC) to improve efficiencies and increase diversion rates in the future Continue the implementation of the County wide intermunicipal transit system Continue with the development of the Paramedic Services hub and post within the Barrie Simcoe Emergency Services campus in collaboration with the City of Barrie Continue to condense major road construction projects including CR90, CR21 and CR17 with related road, bridge and intersection components Implementation of the Provincial Growth Plan 2017, including the completion of a Municipal Comprehensive Review in partnership with the local municipalities Age Friendly Housing $500K grant program 2018 Final Budget - Executive Summary November 28, 2017 Page 2

4 Paramedic Services $54.4 Cultural Services, Administrative & Statutory Support $32.1 General Municipal Planning, Economic Services including Development & Health Unit, MPAC, Tourism Hospital & Educational $6.9 Support $27.9 Transportation & Engineering $73.9 Solid Waste Management $43.1 Ontario Works $71.4 Children & Community Services $53.4 Transit $6.5 Long Term Care & Seniors Services $ Total County Expenditures: $ 510M Social Housing $ Final Budget - Executive Summary November 28, 2017 Page 3

5 Simcoe County Housing Corporation $33.9 Other $2.2 Transportation & Engineering $50.4 Long Term Care & Seniors Services $3.0 Paramedic Services $7.5 Solid Waste Management $1.9 Transit $ Total Capital Expenditures: $103M 2018 Final Budget - Executive Summary November 28, 2017 Page 4

6 Your Tax Dollars The County s tax levy of $157M is broken down as follows: Your Tax Dollars Levy Support Area % of Tax Dollars ($000's) Per $100,000 Residential Assessment Value Cultural Services, Operational & Statutory Support 8.1% 12,791 $24.24 General Municipal Services including Health Unit, MPAC, Hospital & Educational Support 11.6% 18,175 $34.44 Paramedic Services 14.0% 22,017 $41.72 Long Term Care and Seniors Services 6.0% 9,395 $17.80 Ontario Works 2.1% 3,320 $6.29 Children & Community Services 2.6% 4,075 $7.72 Social Housing 14.2% 22,325 $42.30 Transportation & Engineering 16.1% 25,260 $47.86 Solid Waste Management 19.6% 30,780 $58.32 Planning, Economic Development & Tourism 4.0% 6,328 $11.99 Transit 1.7% 2,592 $4.91 Total Taxes based on Services listed above: 100.0% 157,060 $ * All numbers are rounded 2018 Final Budget - Executive Summary November 28, 2017 Page 5

7 Background Information County Profile Simcoe County: Consists of 16 member municipalities Is the second largest County with a population of approximately 478,000 and third largest based upon physical size in Ontario Owns 13,246 hectares of County Forests Borders on 500 kilometres of shoreline Maintains more than 1,800 lane kilometres of County roads, 198 bridges and structures and 55 major signalled intersections Plays host to over nine million visitors annually Employs more than 1,850 full and part-time people Provides Paramedic Services responding to more than 67,000 calls in 2017 Provides Long Term Care and Seniors Services in four homes and 541 beds Is the co-ordinating agency for 911 and Emergency Planning Manages the provincially legislated Ontario Works program Provides Children Services for the County Manages and funds homelessness prevention programs Is responsible for the planning, funding, and managing of the County s social housing system providing 1,395 units through Simcoe County Housing Corporation and managing 2,558 units through non-profit organizations Is responsible for the residential waste and recycling programs, environmental compliance and waste diversion initiative Handles more than 9,000 inquiries per month to Customer Service Works with the partner municipalities through the Planning and Development to guide and influence growth and development policies 2018 Final Budget - Executive Summary November 28, 2017 Page 6

8 Statistics Measure *** General Economic Consumer Price Index (Ontario) % Growth* 1.0% 2.4% 1.2% 2.0% 1.7% 2.0% Non-Residential Building Construction Price Index (Toronto) 1.0% 2.4% 1.2% 3.7% 1.7% 2.0% Infrastructure Ontario - Average yearly lending rate % 3.8% 3.6% 3.1% 3.0% 3.2% 3.5% Electricity Avg Lower Tier Price ( per kwh) % Growth* 12% 7% 13% 11% -8% -5% Natural Gas Avg Effective Price ( /m3) % Growth* 25% 52% -36% -5% -10% 3% Diesel Fuel ($ per litre) - Ontario Avg* $1.27 $1.31 $1.10 $1.02 $1.01 $1.07 Gasoline Fuel ($ per litre) - Ontario Avg* $1.27 $1.27 $1.07 $1.05 $1.04 $1.07 Simcoe County Housing Starts (excluding Barrie & Orillia)** 2,205 1,851 1,757 2,146 3,274 3,252 Unemployment Rate - Central Ontario* 7.5% 7.8% 7.4% 6.5% 6.3% 5.7% County Services County of Simcoe Tax Rate Increase 0.6% 2.0% 1.1% 2.0% 2.0% 1.0% Development Charge Receipts ($M)** Medical Emergency Call Volume 53,341 57,785 60,463 64,546 67,521 71,325 Medical Emergency Call Volume % Growth** 6.0% 8.3% 4.6% 6.8% 4.6% 5.5% LTC Case Mix Index (acuity / complexity indicator) 97.90% 99.12% 99.93% 98.08% % % Ontario Works Monthly Average Caseload** 7,480 7,405 7,278 6,483 5,900 5,700 Social Housing Waitlist* 2,800 2,900 3,087 2,979 3,020 3,000 Child Care Provincial Funding ($M) Solid Waste Tonnage Collected (Curbside & Drop-Off)** 128, , , , , ,400 Solid Waste Direct Diversion Rate (Curbside & Drop- Off)** 55.8% 58.6% 60.2% 60.8% 59.8% 59.7% Simcoe Country Forest (acres) 32,022 32,189 32,625 32,737 32,900 33,100 Simcoe County Museum Total Visitors 33,293 31,209 35,992 32,865 36,500 37,500 Simcoe County Library Co-Operative Circulation** 51,466 63,989 67,782 69,124 71,130 72,500 Note: * 2017 Year to Date Measure, ** 2017 Projected Year Measure, *** 2018 Projections 2018 Final Budget - Executive Summary November 28, 2017 Page 7

9 Overview The County of Simcoe delivers a wide variety of programs and services to local residents and businesses ensuring residents needs are met by allocating the limited resources available to the County to the best use. The County of Simcoe is a dynamic community that continues to experience tremendous growth. With growth, the municipality is faced with delivering core services to an expanding demand, enhancing programs and services to address community feedback, while balancing the financial burden on the taxpayers as there are only limited sources of funding available to support the services used by residents every day. This challenge is addressed annually through budget deliberations as Council decides on the overall level of services and the types of programs, infrastructure and longterm investments necessary to support a growing community while preserving a valued lifestyle affordable to residents of Simcoe County. The annual budget is a strategic planning document whereby the limited financial resources of the County are allocated to various programs and services to achieve the County of Simcoe s priorities and reflects the needs of residents. The budget establishes service levels, program offerings, replacement schedules as well as capital improvements, and determines the amount of taxes to be collected from residents and businesses. The County of Simcoe s 2018 operating and capital budgets provide a balance between the service demands of a growing community and maintaining the economic stability of the County s fiscal strength while minimizing the tax impact on ratepayers. The County of Simcoe is a unique and diverse community that continues to grow at a rapid pace. Balancing the need to provide core services to an expanding population with the desire to pursue new opportunities presents a challenge due to limited revenue sources. County staff has maximized other sources of revenues to support Simcoe County s history of maintaining low tax rates through a strong pay for service and growth pays for growth philosophy. Where appropriate, service fees and charges have been introduced or increased and services have been aligned with the needs of the growing community. Multiyear financial planning incorporated into the budget ensures current and future impacts associated with decisions are understood and identified. Staff continue to be conscious of Council s desire to limit the impact of growth on taxpayers and mitigate the impact on the tax levy wherever possible. Through the budget, Council and staff have the ability to meet the needs and expectations of the community Final Budget - Executive Summary November 28, 2017 Page 8

10 Revenues The County utilizes service charges and user fees that are either at or near full cost recovery for funding of the services that benefit users. This reduces the need for property tax by requiring the users of services that do not benefit the community as a whole to pay for the cost of those services. User fees are reviewed and updated regularly. Development Charges are collected to recover the growthrelated capital costs associated with residential and nonresidential development that create the need for capital. As the majority of the County s capital expenditures are growth related, development charges are a major source of financing for the capital plan. Property taxes are calculated by multiplying the property assessment values established by Municipal Property Assessment Corporation (MPAC) by the tax rate set for each property class that is sufficient to raise the revenue required to support municipal services. The amount required for municipal services is based on planned operating and capital expenditures net of all other revenue sources. The taxes levied for municipal purposes are used to fund the County s financial condition, investment in infrastructure, ongoing expenditures and liabilities incurred. Each year Council establishes budget directions for staff to set out priorities for the year and the level of taxation deemed to be acceptable. Tax increases are based on the requirement to maintain existing service levels, suggested service level changes and on the long term financial plan. Non-recurring revenues are those revenues that the County has little control over in terms of the amount, timing or conditions associated with receiving them. Examples are funding from senior levels of government for a specific purpose, an operating surplus or gain from sale of an asset. Reserves Reserves and Reserve Funds are critical to the County s long term financial plan. Reserves are used to provide stability by smoothing the effect of variable or unanticipated expenditures by providing one time funding. Reserves also provide flexibility to manage debt within the County Debt and Capital Financing Policy. Basis of Accounting and Budgeting The County of Simcoe s financial statements are prepared and presented in accordance with Generally Accepted Accounting Principles for local governments as recommended by the Public Sector Accounting Board (PSAB). The County of Simcoe follows the full accrual basis of accounting, which recognizes revenues as they are earned and expenses as they are incurred and measurable through the receipt of goods or services and where a legal obligation to pay exists. As required at year-end, revenues and expenses that have not yet been processed are accrued and then reversed in the following year Final Budget - Executive Summary November 28, 2017 Page 9

11 The County s annual budget and long term financial plan framework utilize financial information that incorporates Strategic Plans, asset management plans and data from the financial accounting systems. The Asset Management System provides projections of capital maintenance and replacements based on established criteria and service levels. The County also utilizes a budgeting and reporting software which provides a central repository for the County s budgeting and planning requirements. This enhances consistency in budgeting methods, assumptions among the divisions and data integrity Final Budget - Executive Summary November 28, 2017 Page 10

12 Financial Principles & Guidelines The County has recognized the need to adopt an approach to financial management, one that shifts the emphasis from bottom line financial concerns to service delivery with a longer term financial planning horizon. The principles in the preparation of this budget may be summarized into the following: 1. Ensure Long-Term Financial Sustainability Determine on a multi-year basis the financial requirements for operating and capital needs Identify any funding gap between revenues and expenditures Ensure there are sufficient revenues to meet long-term operating and financial requirements and balance spending with revenues Plan for the replacement of assets and maintenance of assets through asset management and replacement reserves Maintain existing service levels Keep tax levy impact within cost indices 2. Deliver services in a cost-effective and efficient manner Undertake reviews of programs on a regular basis to ensure services are delivered in a cost-effective and efficient manner Identify and implement efficiencies Provide sustainable service levels 3. User Fees Ensure that user fees recover program operating costs 4. Manage capital assets to maximize long-term community benefit Maintain the County s assets in a state of good repair' by implementing asset management plan 5. Implement a capital funding plan to address the County s requirements New asset requirements Develop debt financing program to address the County s capital needs Ensure debt terms are consistent with the life of the asset 6. Maintain reserves at appropriate levels Establish reserves to provide funding for future assets 7. Prudent Investment Management Invest the County s reserves to achieve optimum return within appropriate risk tolerances 2018 Final Budget - Executive Summary November 28, 2017 Page 11

13 Budget Framework Council is required to approve a balanced budget each calendar year (Jan 1 Dec 31), before property taxes can be billed. The operating budget includes annual expenditures for staff, materials, services, debt servicing, reserve activity, taxation, subsidy revenue and program costs. The capital budget identifies projects that will be undertaken during the year and how they will be funded. Recurring expenditures are to be financed from recurring sources of revenue and one-time, non-recurring expenditures financed from reserves. During each budget development process, Council will consider staffing, operational and capital expenditures to increase efficiencies and effectiveness. Ontario municipalities are not permitted to budget an operating deficit. Any operating surplus in any given year is allocated as per Council s direction during strategic plan discussions. Financial status reports on spending against budget and forecast to year end are prepared on a regular basis for Council s and management s information. Budget Process The County of Simcoe strives to provide good value for tax dollars and works to enhance value for taxes by monitoring the efficiency and effectiveness of services. The challenge of the budget process is to meet the many and varied needs of residents and businesses at a cost that is reasonable to County taxpayers. The County of Simcoe s Budget primary purposes are to: 1. Set out the program of services provided by the County, their purpose and planned costs 2. Provide a method of controlling expenditures 3. Forecast revenues and funding to support services to the communities served 4. Support and facilitate achievement of long term plans and objectives The County of Simcoe is organized into six major areas: Warden & CAO, Statutory & Cultural Services, Corporate Performance, Health & Emergency Services, Social & Community Services, Engineering, Planning & Environment. Each area includes departments covering specific service areas. The Strategic Plan is the focus that establishes the strategic directions for the budget. The budget review process covers base budget, growth and enhancements to service levels Final Budget - Executive Summary November 28, 2017 Page 12

14 Base Budget Service Growth Enhancements All requests must support the County s strategic plan and each department s mandate. Costs required to maintain existing service level Mandatory / Legislative Non discretionary costs imposed by others Carry Over Projects Costs from prior year commitments Costs required to maintan existing levels of service for the increasing population New initiatives funded by development charge revenues and assessment growth Long term financing strategies New Services or enhanced service levels Funding to cover cost of providing these services depends on property taxes and growth in the assessment base that may lag the timing of expenditures Executive Management then further reviews, challenges and assesses each proposal. Once reviews are completed, the budget is presented to Committee of the Whole. The Committee of the Whole provides comments and direction to staff for any adjustments. The Committee of the Whole refers the budget to County Council with their recommendations for review and final approval. Department Submission Finance Review Budget Review The budget process requires each department to meet with their Financial Controller and prepare a budget that ensures all relevant budgeting principles and application of Generally Accepted Accounting Principles (GAAP) are consistently applied. The Department budget outlines the associated revenues and expenditures, net operating balance, net capital requirement and the total department requirement. Changes to operations, staffing complements and capital projects are supported by an expenditure request form. Executive Management Review Date October 26 th, 2017 Special budget meeting November 14 th, 2017 November 28 th, 2017 Committee of the Whole County Council Committee Committee of the Whole Committee of the Whole County Council 2018 Final Budget - Executive Summary November 28, 2017 Page 13

15 Key Inputs Plans, Acts and Regulations: The budget reflects the strategic initiatives and investment in Simcoe County. A number of planning processes, multi-year master plans and Acts, in addition to Ministry regulations, drive the development of the budget. Major elements include: County of Simcoe Strategic Plan Transportation Master Plan Simcoe County Official Plan Solid Waste Management Strategy Long Term Financial Plan Development Charge Background Study Development Charge Act Ontario Planning Act Housing Services Act Long Term Care Act Ambulance Act Environmental Protection Act Ontario Provincial Standards Affordable Housing and Homelessness Prevention Strategy Transit Feasibility and Implementation Study Economic Outlook: The economic prospects for the County of Simcoe are expected to remain good per Standard & Poor s (S&P) report at the time of the County s credit rating review. The credit rating firm provided the following; County of Simcoe 'AA' rating affirmed based on exceptional liquidity and very low debt burden and contingent liabilities, strong economy and budgetary performance with a stable outlook. Provincial Subsidies: As a major source of revenue, Provincial subsidies are assumed to continue at the current known and committed levels. Costs of providing provincially mandated services are based on Ministry regulations and guidelines and have been increased to reflect an inflation factor. Development Charges and Reserve Funds: Development Charges are fees imposed against development to pay for costs due to increased needs for services arising from growth-related development in the County. The rates for these fees are developed based on the growth forecasts and needs requirements within the County. Various long term plans have been utilized to develop future rates; these include the Transportation Master Plan and the Official Plan. A requirement of the Public Sector Accounting principles of the Chartered Professional Accountants of Canada (CPA Canada) is that obligatory reserve funds be reported as deferred revenue. This requirement is in place as legislation and external agreements restrict how these funds may be used and under certain circumstances these funds may possibly be refunded. Monies received from payment of Development Charges under the Development Charge bylaw shall be maintained in specific reserve funds and interest is allocated to each of the reserves increasing their balances Final Budget - Executive Summary November 28, 2017 Page 14

16 Asset Management Plan: Ontario municipalities are required to develop asset management plans to accompany any request for provincial infrastructure funding. The County has an asset management plan that outlines the state of the local infrastructure including an asset inventory listing identifying various attributes of an asset such as the asset condition and replacement cost estimates. The asset management plan provides desired level of service, an asset management strategy and a financing strategy. Debt Capacity: A municipality may only issue new debt provided that the projected financial charges related to the outstanding debt will be within the annual debt repayment limit prescribed by the Ministry of Municipal Affairs. This limit is set at 25% of a municipality s own source revenues less debt charges and financial commitments. The County has a current debt service capacity of $43 million available per year for payments relating to debt and financial obligations under provincial guidelines based on the 2015 Financial Information Return. This would allow additional borrowing if needed. The additional borrowing which the County of Simcoe could undertake over a 5 year, 10 year, 15 year and 20 year period is illustrated below at 5% interest rate, for information purposes only. Period Maximum Borrowing 20 years $537M 15 years $447M 10 years $333M 5 years $186M 2018 Final Budget - Executive Summary November 28, 2017 Page 15

17 Assumptions General: Tax rate increase of 1.0% as directed by Council Provision of 1% set aside for strategic land purchases Provision of 1% set aside for Economic Development Based on historical trends, the property asset/additions growth assumption has been estimated at 2.0% Consumer Price Index 2% Supplementary tax is estimated at $2.4M Non Residential Building Construction Price Index 2% Utilities projected increases (Natural Gas 3%, Water 2%) and a decrease in Hydro of 5% Gasoline and Diesel fuel increase of approximately 5% Salaries & Benefits are based on current contracts and non-union compensation plan Municipal Property Assessment Corporate increase of 3.1% Simcoe Muskoka District Health Unit increase of 2% Provision of $500K for Hospice capital funding Hospital Alliance grant of $3M Post-secondary funding of $1.5M Cost sharing with the Cities of Barrie and Orillia are estimated based on the current shared services agreement Staffing requirement for FTE s have been projected to meet departmental objectives Paramedic call Volume increase of 5.5% Ontario Works monthly average caseload of 5, Final Budget - Executive Summary November 28, 2017 Page 16

18 2018 Final Budget - Executive Summary November 28, 2017 Page 17

19 Consolidated Budget Components Property Taxation Each year County Council is responsible for making tax policy decisions that are sensitive to local needs and priorities and which will ultimately shape the local property tax landscape. The decisions that must be made include: Tax ratios Tax rates Optional capping tools and recovery of capping costs Assessment valuations reflect changes in real estate market conditions, which are driven by economic factors, demographics etc. Generally, valuation reflects the impact of reassessment, which involves updating the current assessed value of properties to reflect a new, more recent effective valuation date. The impact on the tax rate and the taxes paid by an individual property owner will vary depending on the property s new assessment applied by Municipal Property Assessment Corporation (MPAC) relative to the average assessment and to the four year phase-in provisions. These types of assessment changes will not necessarily affect municipal revenue because tax rates must be restated; they will, however, affect the overall distribution of the tax burden among taxpayers as rates of valuation change do vary by class. The County collects tax by providing a tax requisition to member municipalities who levy separate tax rates for County purposes. To raise the levy amount from member municipalities, the County sets tax ratios and tax rates Final Budget - Executive Summary November 28, 2017 Page 18

20 Levy Budget The levy budget is determined by starting with the 2017 levy and adding three components. 1. Adjustments are made to reflect the actual 2017 year end property asset/additions, a value of $934K. 2. Property asset/additions that will occur in 2018 have been estimated at 2.0% growth consistent with historical trends, a value of $3.0M. 3. A property tax rate increase assumption of 1.0%, a value of $1.6M. The following table illustrates the tax impact per $100,000 of a property s assessed value with a property tax rate increase of 1.0% for residents in the community. % County Tax Rate Increase $ (in millions) $ per $100,000 assessment $ Levy Budget ($000's) 2017 Levy Budget 151, Property Asset/Additions Adjustment Property Asset/Additions Growth % Assumption 2.0% 2018 Property Asset/Additions Estimate 3, Property Tax Excluding Tax Rate Increase 155, Property Tax Rate Assumption 1.0% 2018 Property Tax Increase 1, Levy Budget 157, Final Budget - Executive Summary November 28, 2017 Page 19

21 Operating Budget County of Simcoe Change Category (000's) Actual Actual Budget Budget $ % Operating Revenues Subsidies (170,968) (167,604) (189,240) (195,372) (6,133) 3.2 Service Partners (23,876) (22,912) (22,873) (23,532) (659) 2.9 County Levy (143,262) (149,998) (153,657) (159,551) (5,894) 3.8 User Fees (32,969) (33,939) (33,157) (35,132) (1,976) 6.0 Miscellaneous Income (10,464) (10,548) (5,490) (7,344) (1,854) 33.8 Transfer From Reserve (10,049) (8,209) (9,835) (10,768) (933) 9.5 Total Revenues (391,588) (393,210) (414,252) (431,701) (17,449) 4.2 Operating Expenses Client Benefit 122, , , ,699 2, Salaries 124, , , ,158 5, Administration 25,762 23,520 19,251 20,251 1, Facilities 22,698 23,166 24,379 26,294 1, Cost of Service Delivery 54,827 57,218 62,750 67,326 4, Transfer To Reserve 17,395 23,404 16,968 16,159 (809) (4.8) Total Expenses 367, , , ,886 14, Total Operating Balance (23,633) (19,824) (21,725) (24,815) (3,090) 14.2 The financial statement includes an adjustment to reclassify curbside tipping fees. There is no financial impact with this change Final Budget - Executive Summary November 28, 2017 Page 20

22 Capital Budget The net operating balance for the County of Simcoe is used to partially fund capital requirements for the current year. In addition capital is funded by reserves, development charge reserves, municipal partners and senior levels of government. Any shortfall is financed through various debt instruments. In 2018, the financing requirement is $7.9M as outlined below Capital Financing ($000's) Capital Expenditures 102,981 Revenue: Gas Tax 2,700 Subsidies 6,207 Other Funding 2,635 Service Partners 10,643 Reserves 48,089 The capital plan includes Council direction to condense major roads construction projects as much as possible in order to minimize the construction time impact on residents. The projects identified include CR90, CR21 and CR17 with related road, bridge and intersection components. The Simcoe County Housing Corporation capital program includes two major developments. One is a multi-year redevelopment plan in Collingwood which requires the demolition of 30 existing town homes and the creation of two new medium rise apartment buildings. The buildings consist of a six storey 55 unit family building and a five storey 92 unit seniors building. The second multi-year development plan is located in Wasaga Beach. This development is utilizing a donated four acre parcel of land for the creation of one new medium rise apartment building. This four storey building will add approximately 100 new affordable housing units. Total Capital Revenue 70,272 Operating Balance available for Capital 24, Capital Financing Requirement 7, Final Budget - Executive Summary November 28, 2017 Page 21

23 The main goal of the redevelopment plans is to maximize County owned lands for the purpose of increasing the supply of affordable housing while creating a more sustainable, energy efficient housing portfolio with reduced annual operating costs. These plans support the County's 10-Year Affordable Housing and Homelessness Prevention Strategy and make a significant contribution towards Collingwood's and Wasaga Beach s targets. The capital budget includes total projects worth of $103M. This represents investment in the development and rehabilitation of capital infrastructure to support the provision of services to the residents of Simcoe County. A significant portion of the capital program is to service growth in the expanding community while the balance of the budget is for the rehabilitation and/or replacement of existing infrastructure. Paramedic Services includes the development of new Paramedic stations in Barrie and Elmvale as well as the purchase of the existing Angus station. The developments and the purchase of the Angus station will accommodate both the current and future growth in these areas Final Budget - Executive Summary November 28, 2017 Page 22

24 Reserves Under the Municipal Act, Council has the authority to establish reserves as required. Reserves and Reserve Funds can be formed to meet specific objectives. Projected Reserves ($000's) Reserves 2017 Funds Available Transfer To Reserves Operating Transfer From Reserves Operating Transfer To Reserves Capital Transfer From Reserves Capital 2018 Year End Balance Archives Contingency Museum Contingency Forestry 5, ,203 Homes Contingency 390 1, , ,474 General Contingency 4,568 2, ,242 Social Services 6, ,225 Simcoe Village Roads Contingency 2, ,613 Paramedic Contingency Administration Building Contingency Tourism Simcoe Social Housing 20,149 2,699 1,849 1,600 3,774 18,825 Waste Management Contingency 15,574 3, ,274 Economic Development & Planning 5,057 1, ,224 Total 62,262 13,021 3,106 2,600 4,642 70, Final Budget - Executive Summary November 28, 2017 Page 23

25 Reserve Funds Projected Reserves ($000's) Reserve Funds 2017 Funds Available Transfer To Reserves Operating Transfer From Reserves Operating Transfer To Reserves Capital Transfer From Reserves Capital 2018 Year End Balance Georgian Manor Donations Georgian Village Suites - Residents Georgian Village Homes - Residents Simcoe Manor Donations Sunset Manor Donations Trillium Manor Donations Simcoe Village Donations Sunset Village - Residents Sunset Village - County Alcona Development Hospital Reserve 4,319 3,000 3, ,319 Social Housing - DOOR Total Reserves Funds 6,270 3,136 3, , Final Budget - Executive Summary November 28, 2017 Page 24

26 Trust Funds Projected Reserves ($000's) Trust Funds 2017 Funds Available Transfer To Reserves Operating Transfer From Reserves Operating Transfer To Reserves Capital Transfer From Reserves Capital 2018 Year End Balance C. Matthews Museum Reserve Fund 2, ,308 Estate of S.O. Bain Estate of H.P. Brown Ross Channen Memorial Fund Honor Guard Total Trust Funds 2, ,805 Grand Total 71,361 16,159 6,583 2,600 5,298 78, Final Budget - Executive Summary November 28, 2017 Page 25

27 Development Charge Reserves Development Charges are collected to recover the growthrelated capital costs associated with residential and nonresidential development that create the need for capital. As the majority of the County s capital expenditures are growth related, development charges are a major source of financing for the capital plan. A background study for the current Development Charge bylaw occurred early in Process reviews were conducted to ensure stakeholders understand the methods and assumptions used in determining the development charge rates. This process helps to ensure stakeholders understand the infrastructure needs, associated costs, methods and address any concerns. The budget includes estimates based on the County of Simcoe s Development Charge by-law effective January 1, The Development Charge Act, 1997 and other legislation require that municipalities maintain specific reserves. Such reserves include Development Charge Deferred Revenue. Development Charge reserves have been advanced resulting in development charge unfinanced capital. In 2018 unfinanced development charges are to increase by $14.6M, resulting in a year end unfinanced development charge balance of $64.3M Development Charge Balance ($000's) Development Charge Receipts 32,426 Development Charge Expenditures 46,975 Development Charge Reserves ($000's) 2017 Funds Available Transfer To Reserves Operating Development Charge Balance ($14,550) Transfer From Reserves Operating Transfer From Reserves Capital 2018 Year End Balance Library Paramedic (2,663) (2,306) Long Term Care (16,185) 2, (14,104) Social Housing (2,638) 4, ,545 (9,177) Public Works (268) General Government Roads and Related (28,794) 24,349 3,870 31,838 (40,154) Solid Waste Management ,366 Total Development Charge Reserves (49,709) 32,426 4,185 42,790 (64,259) 2018 Final Budget - Executive Summary November 28, 2017 Page 26

28 Debt Financing Section 401 of the Municipal Act grants Council the authority to issue debentures, when deemed in the best interest of the taxpayers, to finance its own capital expenditures. Best Interest for the County of Simcoe will be consistent with the County s Strategic Directions which includes fiscal management that contains both financial principles and policies. This philosophy is also reflected in the County of Simcoe s capital financing and debt policy. The following key objectives were set out: Adhere to statutory requirements Ensure long term financial flexibility Limit financial risk exposure Minimize long term cost of financing Match term of financing to the useful life of the related asset The total principal and interest payments in 2018 are $4.5M with an estimated 2018 year end debt balance of $172M (In Millions) Debt Type Debt Financing Forecasted Year end 2017 Principal Payments Interest Payments 2018 Debt Estimated Year End 2018 Short Term Debt New Short Term Debt 0.0 Roads Debenture Simcoe County Housing Corporation Landfill Debt Payment to Municipalities Unfinanced DC s Unfinanced Capital Total Final Budget - Executive Summary November 28, 2017 Page 27

29 Operating Cash Flow The following exhibit shows the estimated operational cash flow for Other funds are held separately and may be used for cash management and emergency cash purposes. Operating Cash Flow $ In millions 2018 Budget Cash Balance Beginning of Year 15.0 Sources From Operations Operating Revenue Capital Revenue 22.2 Development Charge Receipts 32.4 Less: Uses For Operations Operating Expenses Capital Expenses 89.4 Net Cash From Operations (4.7) Finance Sources/Uses Service Partners- MFC Financing* 8.1 Cash - End of Year 2.2 *Includes MFC financing as outlined in Municipal Service Agreement (MSA) 2018 Final Budget - Executive Summary November 28, 2017 Page 28

30 Risks & Opportunities The following risks and opportunities could impact the ability to achieve the budget as outlined. Risks In year non-profit housing capital loan requests Future collective agreements, interest arbitration settlements and pay equity settlements Delays in regulatory approval and their impact on construction projects Delays in utility relocations and their impact on construction projects Unplanned initiatives requiring funding Unforeseen legal/legislative challenges Human Resources Lost time management Development charge appeal Current funding model stability The Waste Free Ontario Act Timing of regulations and transition of blue box program plan Delays in implementing 2017 Growth Plan Local municipal service challenges as it relates to planning regulations Opportunities Municipal partnerships to achieve economies of scale in common service areas Taking advantage of additional borrowing opportunities at historical low interest rates Potential rebates received Realize market appreciation on County assets (i.e. housing, lands) Engage federal government to further support Affordable Housing Strategies Federal funding for Transit 2018 Final Budget - Executive Summary November 28, 2017 Page 29

31 Budget and the Strategic Plan Long-range planning is a powerful tool to help make informed decisions to ensure the County s future vitality and economic stability. The long term plan identifies and analyzes current and future events and their effect on the County s short and long-range goals and objectives. Building upon these efforts, the 2018 budget and long financial plan will refer to some of the major issues facing the County of Simcoe. The budgeting process is an integral component of the cycle of planning, budgeting, forecasting and measuring activities and results. The foundations of these forward looking processes are the County s strategic objectives and long term business plan. By remaining focused on these strategic initiatives we ensure that the Corporation s plans, budgets, and forecasts reflect the actions and activities necessary to achieve the strategic objectives and targets. The County of Simcoe updates the strategic plan and long term financial plan annually which serves as a framework by which County departments, agencies and other municipal partners can align their goals and strategies, thereby making budgetary decisions more consistent, sustainable and transparent. The budget is a subset of these long term plans that encompasses directed and approved service levels, capital projects, debt levels and revenue sources Final Budget - Executive Summary November 28, 2017 Page 30

32 The Strategic Plan reflects the nature of the planning process at the County of Simcoe. Several master plans drive the development of the strategic plan. Included are: County s Strategic Plan Transportation Master Plan Simcoe County Official Plan Solid Waste Management Plan Long Term Financial Plan Development Charge Background Study Development Charge Act Ontario Planning Act Housing Services Act Long Term Care Act Ambulance Act Environment Protection Act Ontario Provincial Standards Rehabilitation/ Replacement Costs required for ongoing maintenance or replacement of existing assets Long Term Financial Plan Growth/ Expansion Costs required to maintain existing levels of service for the County s increase population Improvement/ Enhancement Expenditures that increase the level of quality of service currently provided Growth continues to be a primary driver of the budget and Long Term Financial Plan with the majority of projects targeted for new capital infrastructure to address capacity and development demands. However, emphasis is placed on maintaining the County of Simcoe s infrastructure and providing for its eventual replacement. As part of the Strategic plan annual review, the long term financial plan is established with this in mind Final Budget - Executive Summary November 28, 2017 Page 31

33 Long Term Financial Plan The annual budget becomes the base year for the long term financial plan. The 2018 budget plus the next four years of the long term financial plan has been included to better understand what financial requirements exist. Focusing on the long term, will ensure that the County will continue to be in a strong financial position. County of Simcoe ($000's) Budget LTFP LTFP LTFP LTFP LTFP Operating Revenues Subsidies (195,372) (182,690) (178,470) (178,429) (178,447) (177,369) Service Partners (23,532) (23,509) (24,863) (29,087) (26,461) (26,600) Levy (157,151) (157,870) (163,440) (169,206) (175,175) (181,356) Supplementary Taxes (2,400) (2,100) (2,100) (2,100) (2,100) (2,100) User Fees (35132) (32,951) (36,878) (38,368) (39,098) (39,655) Miscellaneous Income (7,344) (5,786) (6,247) (6,176) (6,254) (6,208) Transfer From Reserve (10,768) (11,297) (12,728) (16,158) (7,959) (6,342) Total Revenues (431,701) (416,204) (424,726) (439,524) (435,494) (439,629) Operating Expenses Client Benefit 136, , , , , ,992 Salaries 140, , , , , ,779 Administration 20,251 20,682 20,663 20,537 20,921 20,847 Facilities 26,294 25,125 26,509 27,470 27,399 27,510 Cost of Service Delivery 67,326 68,877 66,784 64,342 66,493 67,623 Transfer To Reserve 16,159 15,756 16,158 16,115 16,269 16,321 Total Expenses 406, , , , , ,072 Total Operating Balance (24,815) (20,705) (29,016) (30,729) (31,149) (30,557) Capital Capital Revenue (70,272) (65,109) (58,419) (47,860) (57,668) (68,435) Capital Expenses 102,981 96,988 97,602 75,353 94, ,712 Net Capital 32,709 31,879 39,182 27,494 37,028 40,277 Net Requirement 7,894 11,174 10,167 (3,235) 5,880 9, Final Budget - Executive Summary November 28, 2017 Page 32

34 Long Term Capital Plan The 2018 capital budget plus the current long term financial plan. Capital Expenditure by Area ($000's) Area Average Budget LTFP LTFP LTFP LTFP LTFP LTFP LTFP Paramedic Services 7,499 5,893 14,511 11,987 4,601 4,342 4,557 64,121 Long Term Care 3,028 1,935 1,869 2,472 22,065 22,356 1,955 60,474 Simcoe County Housing Corporation 33,892 34,292 29,803 11,350 11,059 15,357 8, ,068 Roads Construction 48,258 47,978 37,576 43,263 37,069 49,913 32, ,318 Roads Maintenance 2,188 1,856 1,880 1,514 1, ,833 17,111 Solid Waste Management 1,933 2,032 4,410 2,038 14,436 14,003 2,214 47,987 Other Departments 6,183 3,001 7,553 2,730 3,771 1,741 2,391 30,754 Total 102,981 96,988 97,602 75,353 94, ,712 53, , Final Budget - Executive Summary November 28, 2017 Page 33

35 Long Term Debt Financing Projection 220,000 In $,000's 210, , , , , , , , , , , Final Budget - Executive Summary November 28, 2017 Page 34

36 2018 Final Budget - Executive Summary November 28, 2017 Page 35

37 Department Budget Components Department Descriptions Warden & CAO The Warden & CAO division consists of the Warden, Council, CAO, Customer Service and Communications departments. Fundraising activities are captured in the Warden s department with net proceeds from these events being paid out to various community causes. Customer Service provides residents of Simcoe County with a central point of contact to access services and programs. Corporate Communications manages both internal and external communications such as media relations, publications, newsletters and County of Simcoe branding. This area is responsible for implementing Council s decisions and strategic directions, provide leadership and advice on policies, programs and services and to ensure compliance with the Municipal Act. Statutory & Cultural Services Statutory and Cultural Services division consists of the Clerk s Department, Archives, Library and Museum. The primary role of the County Clerk is to perform the statutory duties assigned to the position by provincial legislation and County Council, as well as oversee a broad range of responsibilities related to the function of County Council. The Archives department preserves and promotes Simcoe County's cultural and visible heritage as well as provides efficient permanent-records management services to the departments of the County of Simcoe, the member municipalities and the city of Barrie. The Simcoe County Museum welcomes 30,000 visitors each year and offers a range of programs and activities that highlight the stories of the people and events that shaped the County. The Library Co-operative supplements and enhances the library services provided by its member municipalities to the residents of the County of Simcoe Final Budget - Executive Summary November 28, 2017 Page 36

38 Corporate Performance Corporate Performance division consists of the support functions: Finance, Human Resources, Information Technology, Legal and Procurement, Fleet & Property. These areas are responsible for the overall administration of the Corporation and support the operating divisions in their effort to provide their services to the County. Health and Emergency Services Paramedic Services Paramedics provide land ambulance services at a Primary Care Paramedic (PCP) and Advanced Care Paramedic (ACP) level of service with a required response time in addition to training programs, public education and Public Access Defibrillator programs. Long Term Care and Seniors Services Long Term Care and Seniors Services department provides effective, high quality, safe, and efficient long term care services in a home-like setting for the clients and families. This includes the management of four Long Term Care Homes across Simcoe County: Georgian Manor and Village; Simcoe Manor and Village; Trillium Manor; Sunset Manor and Village. Social and Community Services Ontario Works The County of Simcoe administers both mandated and nonmandated programs through the Ontario Works Department. Ontario Works provides both financial and employment supports to those in need. Financial benefits under this program include income support, temporary care, drug benefits, medical benefits and funds for employment related expenses. Discretionary benefits under this program include emergency dental assistance for adults, funeral coverage, and assistance with health related items for those in receipt of social assistance. Ontario Works also provides services to non-social assistance recipients which includes emergency dental and housing retention benefits. Children and Community Services The County is responsible for managing the local child care system which includes a number of mandated programs such as the Child Care Fee Subsidy Program. It provides a provision of funding to support the overall child care system through more than 200 community contracts including special needs resourcing, wage subsidy, repairs and maintenance. Effective January 1, 2018, legislated responsibility for Ontario Early Years Child and Family Centres (OEYCFCs) will be transferred to Consolidated Municipal Service Manager (CMSMs) as part of their existing responsibility for service system management of child care and other early years services. The County is also responsible for homelessness prevention and poverty reduction, shelter retention, social planning, emergency social services and works with area partners to operate the Local Immigration Partnership initiative Final Budget - Executive Summary November 28, 2017 Page 37