FINANCIAL SUSTAINABILITY PLAN PROJECT SCOPE

Transcription

1 FINANCIAL SUSTAINABILITY PLAN PROJECT SCOPE

2 WHY FORMALIZE EXISTING STRATEGIES? 1) Align with Community Action Plan strategies: Ensure tax rates remain reasonable and competitive Rebuild and further strengthen financial reserves 2) Build upon current long range financial planning Solutions for existing known gaps and issues Introduce new policies based on best practices 3) Decision making guide for current and future Councils 4) Ensure long term financial sustainability

3 EXTERNAL PRESSURES/ISSUES 1) Provincial/OLG changes to gaming industry Has created a degree of uncertainty 2) Provincial review of electricity sector Includes local distribution companies (e.g. Veridian) 3) Continuing low interest rates Reduced investment income negatively impacts general levy slows growth of some reserves/reserve funds

4 TAX RATE PRESSURES CAPITAL & OPERATING 1) Existing Funding Gap Master Plans, Studies, Strategies, EA s 2) Long term infrastructure major maintenance, rehabilitation and replacement 3) Legislative and regulatory requirements 4) Continuing steady growth 5) Declining development revenues under intensification 6) Lower assessment growth 7) Long term debt for future phases of Audley Recreation Centre 8) Impact of freeze on new full time staff positions

5 PROJECT SCOPE 1) Discretionary Reserves and Reserve Funds 2) Capital Project Funding 3) Long Term Debt

6 CORE PRINCIPLES Two core principles from existing plan will remain: 1) 100% of operating budget surplus allocated to reserves 2) Veridian (100%) and Slots (96%) allocated to reserves

7 KEY EXISTING RESERVES 1) Vehicle/Equipment Replacement Reserve Fund Mid to late 1990 s cuts in allocations are now having an impact Will be fully depleted by 2017 without immediate financial action 2) Capital Projects Reserve Current flexibility has been an advantage and disadvantage Feasibility of splitting up reserve will be looked at 3) Post Buildout Capital Reserve Use was purposely left open ended when created in 2005 Three options for the future of the reserve will be investigated 4) Infrastructure Reserve (Slots) Funding both new and existing infrastructure is a conflict

8 CORE RESERVE PHILOSOPHIES To ensure effectiveness, total number of reserves/reserve funds will be limited Must have the flexibility to leverage external funding opportunities Establish realistic, objective target balances for individual reserves/reserve funds Revenues sources must be sustainable for growth/replenishment General Levy funded allocations to reserves/reserve funds should be increased Must have objective, comparable measures of overall strength of reserve/reserve fund total balances

9 CAPITAL PROJECT FUNDING 1) Pressure on General Levy Funded Capital Four different types of capital projects compete for limited funding 1. Infrastructure Maintenance roads, sidewalks, parks, sportsfields 2. Infrastructure New sustainable forest cover, splashpads 3. Non Infrastructure traffic calming, studies, customer polling 4. Miscellaneous Equipment new and replacement 2) Computer Hardware & Software Licensing Currently funded from Capital Projects Reserve; should be funded from General Levy 3) Major Infrastructure Maintenance Capital vs. Operating Current inconsistency on which budget funds major maintenance

10 Long Term Debt 1. Annual Repayment Limit (ARL) Established by the Province Annual debt payments cannot exceed 25% of Net Revenues Generally just considered an administrative calculation An Ajax specific % limit will be established 2. Other Review Areas Uses for which debt can and can t be issued Length of debenture terms Maximum amount of debt to be issued for a single project Temporary borrowing pending the issuance of debt Use of internal vs. external debt Debt management measures beyond ARL Use of budget room/capacity when debt is paid off

11 PROJECT APPROACH, COMMUNICATIONS & TIMING Project Approach Majority of work to be completed by Town staff External expertise to be used for benchmarking, best practices Communications Public awareness through press releases, website, Ajax Today Input requested from business community and general public Project Timing Date/Time Period July 2012 July 2012 to March 2013 March/April 2013 April to June 2013 June 2013 Activity Council approval of project scope Research, analysis, develop draft recommendations Draft recommendations presented to GGC Input from business community and public Adjustments based on Council input Final plan approved by Council