The 2014 Budget Discussion Document presents the proposed 2014 operating budget, 2015-2016 forecasts and the 2014 Capital Budget for the Town of Oakville. The document represents the outcome of the 2014 staff budget process, presenting the base budget recommended by staff, for public comment and the review and approval of the Budget Committee and Council. The budget has been prepared in accordance with Council s direction to prepare the budget with an overall increase of 1.5% in line with inflation. The 2014 operating budget and 2014 Capital Budget and 10 Year Financial Plan ensures the town s strong financial position is maintained and our residents continue to receive the programs and services they value. The 2014 budget continues Council s direction for overall property tax increases in line with inflation; provides funding to maintain and renew town assets such as roads, bridges, facilities and equipment and incorporates the cost of operating new facilities such as the new Fire Station 9 and the North Operations Depot. The proposed 2014 budget results in a 2.93% property tax increase on the town s share of the property tax bill, after assessment growth, and a total tax increase of 1.71% including the forecasted increase in the Region of Halton s tax budget of 1.5% and no increase in Education rates. Options, if required, to reduce the overall tax increase to 1.5% will be presented to the Budget Committee in November. The gross operating budget of $264.1 million provides the necessary funding to maintain current town services, renew assets and ensure infrastructure and services required due to growth in the municipality are provided. Council has provided clear direction to keep the overall tax increase including the town, region and education to 1.5% or less. This has put significant pressure on the town s operating budget as there are many competing priorities and limited funding. To ensure the town is well placed to achieve increases in line with inflation, the CAO as part of the 2013 budget committed to undertake an efficiency review of all town programs and services to ensure the activities within those services are delivered in the most efficient and cost effective manner. A target was set of $3 million to $3.25 million in permanent savings to be achieved through the review. This process was expected to take two years to complete. As part of the 2013 budget $1.2 million in efficiencies were identified and tax stabilization funding was used in anticipation of the savings to be achieved in future years. To date the service delivery review has identified an additional $1.6 million in permanent savings. This has reduced the tax stabilization funding in the 2014 budget to $300,000. It is anticipated that the remaining efficiency savings will be found during 2014 and the tax stabilization funding will be removed from the 2015 base budget. E-1
The service delivery review has focused on how services are delivered and opportunities to streamline processes without reducing service. To achieve Council s guideline of an overall increase in line with inflation departments were directed to pursue cost efficiencies and maximize non-tax revenue sources in addition to reviewing processes. This has resulted in a staff recommended budget much closer to Council s guideline than the forecasted increase presented to the Budget Committee in June. The 2014 budget has been prepared using a performance based program based budgeting (PB2) methodology. PB2 focuses on programs rather than departments and traditional line item budgeting. Emphasis is on the allocation of resources to programs based on desired outcomes and measurement of actual program results against expected outcomes. Consistent with the focus on outcomes, the efficiency reviews undertaken by staff have focused on reviewing activities to determine if results are being achieved in the most cost effective manner. Assessment growth resulting from additional properties added to the roll or expansions/additions to existing properties reduces the overall tax increase. Assessment growth of 0.75% has been assumed in the preparation of the 2014 staff recommended budget. A total of 12.3 positions have been gapped in the base budget to help keep the tax levy increase down. In addition, to reflect the increased time positions are held vacant, corporate gapping has been increased to $350,000. These measures have resulted in a $1.3 million reduction in personnel costs. Most of the gapped positions are in the Community Development Commission and reflect the level of development activity anticipated in 2014. These positions will remain gapped until revenue returns to normal levels. The program business plans include a detailed budget for 2014 and a forecast by program and service for 2015 and 2016. Business plans for each program provide information on the purpose of the program, define existing service levels and identify strategic initiatives linked to the town s strategic plan. PB2 performance measures and 2013 projected results along with 2014 targets for achievement are also provided for all town programs. PROPOSED BASE BUDGET The base budget provides for existing levels of service and does not include increased service levels or new initiatives. It does however include the operating impact of completed capital projects. Included in the 2014 base is the partial year impact of operating the new North Operations Depot and Fire Station 9, operating costs related to expanded transit care-a-van service, support for the ongoing implementation of the asset management project and new software as well as the impact of maintaining new parks and roads resulting from growth in the municipality. In total the operating impacts from completed capital projects and growth related infrastructure add 1.7% to the base. E-2
The 2014 budget also continues Council s practice of a 1% increase for the capital levy and an additional $250,000 in funding to accelerate the Road Resurfacing & Preservation Program. These add 1.16% to the base, bringing the increase before taking into consideration inflationary pressures related to personnel, materials and supplies and contracted services to 2.86% on the town s portion of the tax bill. Table 1 presents a summary of the total tax impact of the proposed budget, including the anticipated increases in the Region s tax budget and Education rates. The cost associated with each item is outlined below. Table 1 Total Tax Impact of Proposed Budget Purpose Share of Tax Bill Increase Impact on Total Bill $ Increase per $100,000 of Assessment Town of Oakville 39.3% Inflationary Impacts/Revenue Adjustment 0.82% 0.32% $2.94 Annualized Impact of 2013 New Programs 0.00% $0.00 Capital Driven Operating Costs for New Infrastructure 1.70% 0.67% $6.09 Assessment Growth -0.75% -0.29% ($2.69) Total Base Operating Budget 1.77% 0.70% $6.34 Capital Levy 1.00% 0.39% $3.58 Additional Funding for Road Resurfacing 0.16% 0.06% $0.57 Budget Committee Adjustments 0.00% $0.00 Total Town of Oakville* 39.3% 2.93% 1.15% $10.49 Region of Halton** 37.4% 1.5% 0.56% $5.11 Inflationary Impacts/Revenue Adjustments The most recent Monetary Policy Report from the Bank of Canada forecasts core inflation (which excludes the more volatile components of the consumer price index (CPI)) at 1.5% by the second quarter of 2014 and gradually increasing to 1.7% by the end of the year. For budget purposes the guideline for inflation has been set at 1.5%. The cost of providing services to residents of municipalities does not always compare with traditional CPI. Many of the goods and services included in the basket of goods on which CPI is calculated do not reflect the cost of material, supplies, contracted services and wages applicable to municipalities. Inflationary pressures on the town s base budget total 3.77%. This has been partially offset by an increase to program rates and fees and revenue adjustments bringing the net increase to 0.82%, resulting in an increase of 0.32% on the overall tax bill or an increase of $2.94 on each $100,000 of assessment. The inflationary impacts provide for the town s personnel costs which are driven by collective agreements with the town s four unions. These contracts provide for annual cost of living increases, as well as movement through salary grids and negotiated benefit coverage. The town typically negotiates longer term contracts to ensure stability. Education 23.3% 0.00% 0.00% $0.00 Total * 1.71% $15.60 *Exclusive of reassessment impacts **Estimated Region of Halton total tax increase E-3
Many of the materials and supplies that the town provides are construction related. The construction price index has increased by 2.2% over the last year. There is also increased pressure on the budget due to inflation on utilities, materials, supplies and purchased services. Revenue The 2014 base budget incorporates proposed rates and fee increases. Rates and fees were reviewed by the Budget Committee at its meeting on November 4, 2013 and its recommendations forwarded to Council for approval on November 18, 2013. Many of these fee increases are effective January 1, 2014 and are required to maintain or improve the cost recovery of town programs. The fee increases result in an additional $1 million in revenue. In addition to the fee increase, volume adjustments were made to program revenue budgets where applicable. This added additional revenue of $3.5 million in 2014. Most of the additional revenue is in Planning, Development Engineering and Building Services and is based on anticipated development activity. Capital Driven Operating Costs for New Infrastructure The largest driver of operating impacts from capital is the impact of the North Operations Depot and Fire Station 9 opening in 2014. The operating budget includes funding to operate and maintain the facility as well as personnel costs to staff the fire station. In total this adds $1.4 million to the 2014 base budget. The annualized impact of the facility will result in an additional $583,700 in operating costs in 2015. It is town policy to budget a transfer to the Building Maintenance and Replacement Reserve for future repairs and replacement of new facilities. To help smooth the impact of new facilities on the operating budget the transfer to the Building Maintenance and Replacement Reserve is phased in over five years. The 2014 budget includes an increased contribution to the reserve for the Transit facility and Queen Elizabeth Park Community and Cultural Centre (QEPCCC) as well as the first year contribution for the new North Operations Depot. The cost of maintaining new roads and parks added to the town in 2013 are also included in the base as is increased funding to continue the implementation of the asset management program and new software support costs. As well, the 2014 base budget includes the cost of providing increased transit care-a-van service. In total the capital impacts of $2.6 million included in the 2014 operating budget add 1.7% to the town s base budget, or an increase of 0.67% on the overall tax bill or an increase of $6.09 per $100,000 of assessment. Assessment Growth from New Development New development within the town results in an increase in the town s assessment base. New assessment generates additional tax revenue without an increase in the town s tax rate. Assessment growth has been estimated at 0.75% in the staff recommended budget. This amount may change based on the final returned roll from The Municipal Property Assessment Corporation (MPAC) in December. The approved budget will reflect actual assessment growth based on the roll. E-4
CAPITAL LEVY The town implemented a 1% capital levy in 1996. This program recognized the need to set aside additional funding to pay for both the replacement of aging infrastructure as well as demands for new infrastructure, including recreational and other facilities. A capital levy policy is considered a best practice in municipal financing. The capital levy provides an increasing source of funding to address infrastructure renewal and helps ensure that funding is available to replace assets as required based on the town s asset management plan. The capital levy has a 1% impact on the town s tax rate, or 0.39% impact on the total tax rate or $3.58 per $100,000 of assessment. In addition to the 1% capital levy, the base budget also includes an additional transfer to capital to fund increased road resurfacing as recommended by the Budget Committee and Council in 2010. SUMMARY In total, the proposed 2014 budget being presented to Budget Committee will result in an overall increase in property taxes of 1.71%, including the town, region and education taxes as shown in Table 1; assuming a 1.5% increase in the Region of Halton tax supported budget. 2015 AND 2016 FORECAST The Budget Document also includes a forecast of the 2015 and 2016 operating budgets, incorporating inflation related expenditure increases and the increased operating costs resulting from capital projects undertaken in 2014 and 2015. As the 2015 budget will be in the next term of Council no new requests have been identified at this time. New requests or service enhancements will be determined based on Council s strategic priorities for the term of Council. Table 2 presents the forecasted increase in the total tax bill for the town s base budget and projected education and regional tax requirements. The forecast increase in 2015 is 4.92% and the overall tax increase is forecast at 3.02% or $27.96 per $100,000 of assessment. For 2016, the town s increase is forecast at 4.15% and the overall tax increase at 2.64% or $25.21 per $100,000 of assessment. Table 2 Overall Tax Impact 2014 Requested Budget 2015 Forecast Budget 2016 Forecast Budget Inflationary Impacts/Revenue Adjustment 0.82% 3.04% 2.63% Capital Driven Operating Costs for New Infrastructure 1.70% 1.72% 1.37% Assessment Growth -0.75% -1.00% -1.00% Total Base Operating Budget 1.77% 3.76% 3.00% Capital Levy/Additional Road Resurfacing Funding 1.16% 1.16% 1.15% Total Base Budget 2.93% 4.92% 4.15% Total Town Budget 2.93% 4.92% 4.15% Province of Ontario 0.00% 0.00% 0.00% Region of Halton (1) 1.50% 2.90% 2.70% Overall Tax Bill Impact (%)(2) 1.71% 3.02% 2.64% Overall Tax Bill Impact ($'s per $100,000 of assessment)(3) $15.60 $27.96 $25.21 (1) Based on Region's forecast increase for 2015 and 2016 (2) Total Tax Bill is 37.4% Region. 39.3% Town, 23.3% Education (3) Exclusive of reassessment impacts Table may not add due to rounding E-5
2014 BUDGET COMMITTEE PROCESS The recommendations included in this book reflect the direction to date provided by Council through its Budget Committee. The budget process provides the Committee with the opportunity to provide further direction and request additional information from staff. The following meetings have been scheduled for the review of the 2014 Budget: November 4, 2013 Rates and Fees November 18, 2013 Distribution of Budget Document and Overview Presentation November 21 and 22 (if required), 2013 Staff Presentations November 26 and December 6, 2013 Public Delegations December 12, 2013 Deliberations and Recommendations Council Approval December 16, 2013 Two public open houses have also been scheduled to give residents the opportunity to provide feedback on the budget. The meetings are scheduled to take place as follows: November 23, 2013 Iroquois Ridge Community Centre December 4, 2013 Woodside Library In addition, residents can contribute by email to budget@oakville.ca. E-6
HIGHLIGHTS OF THE PROPOSED 2014 BUDGET Program Based Performance Based Budget The 2014 budget was prepared using the performance based program based Budgeting (PB2) methodology. The 2014 budget and the forecasts for 2015 and 2016 focus on programs, and the services within each program, rather than departments and line item expenditures. In preparing the 2014 budget and 2015 and 2016 forecasts, emphasis is on allocating resources to programs based on the goals and objectives to be achieved by the program. A key component of PB2 is the development of performance indicators to measure how well programs are meeting objectives. During 2013 emphasis was placed on developing a key set of monthly performance indicators for senior management. The measures are reviewed monthly by the Executive Management Team to ensure programs are achieving targets and for strategic planning purposes. The 2014 Program Performance Measures section includes measures for all programs with 2013 projected results and 2014 target outcomes. The program business plans and resulting program budgets are based on achieving the priorities in the town s strategic plan and each new initiative identified in the budget is tied to a strategic objective. Business plans for each program provide information on the purpose of the program and service within the program, define existing service levels, and new requests identify the resulting impact on service levels. Total 2014 Operating Expenditures by Program The gross expenditures proposed in the 2014 operating budget total $264.1 million for the town s 26 programs. This is an increase of $9.8 million over 2013 expenditures. Corporate Revenue and Expenses gross expenditures total $50.6 million. Included in these expenses are the funding envelop for the capital program, debt charges, transfers to corporate reserves, and financial expenses not related to a particular program such as audit fees, banking fees and postemployment expenses. The largest operating program is Emergency Services, which includes the fire department, at $32.4 million or 12.3% of the town budget. The 2014 budget includes the impact of hiring new firefighters for the station opening mid-2014. The next major program area is Infrastructure Maintenance at $28.7 million or 10.8% of total expenditures. This program provides for the maintenance of town roads, storm sewers and traffic infrastructure. Recreation Services totals $27.7 million or 10.5% of expenditures and provides for the operation of the town s indoor recreation facilities, delivery of indoor and outdoor recreation programs and facility rentals. Oakville Transit totals $27.4 million or 10.4% of total expenditures. Corporate Support Programs total $21.5 million or 8.2% and is the combined total of the Human Resources, Financial Services, Information Systems + Solutions, Strategy, Policy and Communications, Legal Services, ServiceOakville and Administrative Executive Management Programs, which are key to the ongoing operation of the town s front line programs and service delivery. The charts below detail the town s total expenditures by program area. E-7
Table 3 2014 Operating Budget by Program, $264.1 Million Table 4 Detail of Other Programs (11.1%) E-8
Table 13, on page E-17 sets out the town s 2014 operating budget by program, and also provides comparisons to the 2013 budget. The table highlights the components of the 2014 budget, showing the recommended 2014 program budget. The forecast budget for 2015 and 2016 are shown on Table 15 on page E-19. Total 2014 Operating Expenditures By Cost Component The chart on page E-10 (Table 5) shows the town s total operating budget expenditures by cost component. In total the base budget gross expenditures have increased by $9.8 million. The details are provided in Table 14 on page E-18. Salaries and Benefits account for 49.8% or $131.4 million of the operating budget. This is an increase of $4.8 million over 2013 as a result of negotiated wage settlements with the town s fire, inside workers and transit unions, a corporate provision for other employee groups, movement through salary grids, benefit costs and the cost of positions required as a result of new facilities, software implementations and capital infrastructure. Of the $4.8 million, $1.7 million relates to additional staff required as a result of completed capital projects and new infrastructure. Materials and Supplies include expenditures for utilities, fuel, office supplies, construction and other materials. They represent 7.8% of the town s gross expenditures and have decreased by $522,400 primarily due to a reduction in the fuel budget based on a price per litre reduction. Transfers to reserves including provisions for future expenditures, e.g. equipment replacement and transfers to tax stabilization reserves account for 11.5% of expenditures. Capital from operating includes the funding transferred to the capital budget of $20.9 million plus minor capital provisions of $0.3 million for a total of $21.2 million or 8% of expenditures. The increase in expenditures is offset by an increase in revenues of $4.2 million. This includes items such as Recreation and Culture user fees, Transit fares and Planning application fees. The increase in activity revenue is due to increases in fees to maintain cost recovery ratios, volume adjustments, increased development revenues and the impact of revenue from the new programs. Purchased Services includes costs for items such as communication, contracted services, professional fees, training and development, insurance and printing. Purchased Services comprise 11.2% of the budget and have increased $812,400 due to inflationary pressures, costs associated with the 2014 municipal election and operating impacts from capital. E-9
Table 5 - Total Operating Expenditures by Cost Component, $264.1 Million Table 6-2014 Operating Budget by Funding Source, $264.1 Million E-10
Total 2014 Operating Revenues Table 6 shown above illustrates the funding sources for the 2014 operating budget. Taxation revenues provide 59.8% (2013 59.9%) of the funding. Fees and charges are the next largest source of funding at $64.8 million or 24.5% (2013 23.6%). Included in the fees and charges are increases to maintain cost recovery ratios for all programs. The 2014 budget includes a $1.9 million dividend from Oakville Hydro. 2014 Tax Levy Requirement The total 2014 tax levy requirement to support town programs is $157.9 million and is shown by program in Table 13 on page E-17. The chart below shows how much of each tax dollar is spent on specific town programs. The allocation of tax dollars to programs differs from the allocation of gross expenditures as many of the town s departments are supported partially or entirely from user fees. The largest share of the tax dollar is spent on Emergency Services followed by Oakville Transit and Infrastructure Maintenance. E-11
Table 7 How Your Tax Dollars Are Spent E-12
BASE BUDGET There are three components to the 2014 base budget. The first provides for the same level of service as provided in 2013. Program spending at this level reflects the costs to deliver the same level of service as previous years. Increases in program spending and resulting tax levy requirements are driven by the costs of materials and supplies, contracted and other purchased services as well as labour costs resulting from union contracts. Changes in revenue from user fees and other sources also impact the tax requirement. The second component of the base budget includes the impact of decisions made in previous years such as the annualized impact of service enhancements and the operating impacts of new facilities and infrastructure resulting from completed capital projects and infrastructure assumed through the development process. The 2014 budget includes a partial year impact of opening the North Operations Depot and Fire Station 9, continued implementation of the asset management project, increased Transit care-a-van service as well as the impact of parks, roads and computer software conversions approved in prior year capital budgets. reductions in service levels or the elimination of programs and services is required. The third component of the base budget is the increased funding for the maintenance and replacement of aging infrastructure as well as the demands for new infrastructure. The base budget includes an additional $1.8 million for the 1% capital levy and increased funding for the road resurfacing program. The capital levies are an important source of funding for the town s capital program and help ensure the infrastructure gap faced by municipalities does not continue to grow. While these levies are a very important source of funding for infrastructure renewal and the town s share of growth related capital projects, they represent 1.16% of the proposed tax increase on the town s portion of the tax bill and 0.45% or $4.15 on the overall tax bill. Table 8 shows the allocation of the increase in the tax requirement for the base budget. To maintain existing service levels, the tax levy requirement for these two components is $156.1 million. This is an increase of $3.8 million or 1.77% after assessment growth. The tax impact of the increase in the town s base budget of 1.77% has an impact on the overall tax bill of 0.7% or $6.34 per $100,000 of assessment. To reduce this increase, E-13
Table 8 - Net Base Budget Increase By Program (millions) generates a growing source of funding to deal with the town s infrastructure needs. Many municipalities have implemented capital infrastructure levies to address their infrastructure gaps. It is considered a prudent and best practice financial policy. The funding is a critical component of the Long Term Financial Forecast presented to Council in June and updated for Council approval in December. Any change to the capital levy policy would require changes in the long term forecast. The second largest increase is in Emergency Services program at $1.9 million and includes the impact of hiring firefighters for the new Fire Station 9 as well as contractual increase in salaries and benefits. Finally the third largest increase is in the Oakville Transit program at $0.9 million. The increase includes the contractual increases in salaries and benefits, the phased-in transfer to the Building Maintenance Reserve for the new transit facility and the cost of increased care-a-van service. The net base budget has increased by $5.6 million after growth. Three programs account for $5 million of the increase. Of this amount $2.3 million is included in the Corporate Revenue and Expense program and relates to the increased contribution to capital and reserves. This program includes the 1% capital levy totaling $1,523,000 and the additional funding for road resurfacing. The capital levy has been a town policy since 1996. By adding 1% annually to the tax rate for capital the town The balance of the increase is spread between the remaining programs. NEW SERVICE LEVELS The demand for new programs and services is continuing to grow. Every year the town must identify the costs to provide programs and services to its newest residents, while also responding to demands for new programs and services from current residents. In addition, requests for new programs or services may be the result of legislative requirements or to address health and safety concerns. E-14
In light of the pressures on the 2014 budget and the direction to prepare the budget with an overall increase at inflation, the budget focuses on maintaining service levels and incorporating the operating cost of service enhancements approved through the capital budget. There are however a few new requests that are considered a priority. Alternative funding, where possible, has been identified to help mitigate the impact of new requests on the tax levy. The chart below outlines the requests being brought forward for the Budget Committee s consideration. If approved, the service enhancements would add $161,800 to the operating budget (0.11% tax levy impact). The transit care-a-van request has the largest impact on the tax levy. However, as it is to meet legislative requirements it is considered the highest priority. Table 9 2014 Recommended Requests Program Service Request Type Description Transit Operations Legislated Care-A-van Coordinators to achieve AODA requirements Funding Source Gross Operating Net Operating FTE Tax Levy 2 FT / 0.8 PT $ 145,800 $ 67,800 Tax Stabilization Reserve 0.3 PT $ 17,200 $ - Innovation Reserve 0.3 PT $ 25,100 $ - Recreation Services Youth Programs New Service 3 year Grant funding for Youth After School Program Move to volunteer usher and bar Culture OPAC New Service service at Oakville Centre Increase staffing to accommodate Recreation Youth increased hours at QEP, Oakville & Culture Programs Service Level and Bronte Youth Centres Tax Levy 0.5 PT $ 15,200 $ 15,200 Conversion of 3 Small Equipment Operators to Full Time to provide 3 FT less Parks Maintenance Service Level year round increased service Tax Levy 2.5 PT FTE's $ 206,700 $ 53,800 Current Pilot Project in Kerr Village - 5 Section 37 Planning Planning New Service years Funds $ 150,000 $ - Planning Heritage New Service Pilot Heritage Grant Program Tax Levy $ 25,000 $ 25,000 Total 5 FT/ -0.6 PT $ 585,000 $ 161,800 During the course of 2013, items have been referred to the Budget Committee for consideration. Table 10 is a list of items referred to the Budget Committee for consideration during the 2014 budget review process. Table 10-2014 Budget Committee Referrals Department Item Lead ROADS & WORKS OPERATIONS Winter Maintenance Level of Service for Roads and Sidewalks Roads & Works FORECAST FOR 2015 AND 2016 Description That the staff report, Winter Maintenance Level of Service for Roads & Sidewalks, dated April 4, 2013, from the Roads & Works Operations department, be referred to the 2014 Budget Committee. Treatment in Budget Report to Budget Committee in November The Budget Document also includes a forecast of the 2015 and 2016 operating budgets, incorporating inflation related expenditure increases and the increased operating costs resulting from capital projects undertaken in 2014 and 2015. The CAO and Commissioners have not recommended any new requests at this time. Service enhancements and changes to service levels will be considered based on Council s strategic plan for the term of council beginning in 2015. The forecast increase in these years is 4.92% in 2015 and 4.15% in 2016, for base budget purposes only. The overall increase including the region and education is projected to be 3.02% in 2015 and 2.64% in 2016. E-15
These increases are largely due to new infrastructure constructed as part of the Capital Budget and inflationary adjustments. Table 11 shows the total base budget increase for 2014, 2015 and 2016 by cost driver. The town has committed to a maximum of $130 million contribution to the new Oakville Hospital. At this time it is anticipated that the contribution will be required by the hospital in 2015. A provision has been included in the 2015 and 2016 forecasts for the potential debt charges as well as the anticipated funding for the repayment of the debt from the Hydro Operations reserve. Table 12 shows the overall tax impact in 2015 and 2016, for the town s base budget and the forecast increases in the Region of Halton and Education tax requirements. Table 12 Overall Tax Impact 2014 Requested Budget 2015 Forecast Budget 2016 Forecast Budget Inflationary Impacts/Revenue Adjustment 0.82% 3.04% 2.63% Capital Driven Operating Costs for New Infrastructure 1.70% 1.72% 1.37% Assessment Growth -0.75% -1.00% -1.00% Table 11 - Forecast Budget Increase Total Base Operating Budget 1.77% 3.76% 3.00% Capital Levy/Additional Road Resurfacing Funding 1.16% 1.16% 1.15% Total Base Budget 2.93% 4.92% 4.15% Total Town Budget 2.93% 4.92% 4.15% Province of Ontario 0.00% 0.00% 0.00% Region of Halton (1) 1.50% 2.90% 2.70% Overall Tax Bill Impact (%)(2) 1.71% 3.02% 2.64% Overall Tax Bill Impact ($'s per $100,000 of assessment)(3) $15.60 $27.96 $25.21 (1) Based on Region's forecast increase for 2015 and 2016 (2) Total Tax Bill is 37.4% Region. 39.3% Town, 23.3% Education (3) Exclusive of reassessment impacts Table may not add due to rounding E-16
Table 13-2014 Operating Budget by Program 2013 2014 Base 2014 2014 2013-2014 Restated Base Budget Requested Requested Change Budget Budget Change (%) Adjustments Budget (%) EXPENDITURE BY PROGRAM Political Governance 3,210,700 3,955,400 23.2% 0 3,955,400 23.2% Administrative Executive Management 2,120,500 1,784,700-15.8% 0 1,784,700-15.8% Service Oakville 762,400 747,000-2.0% 0 747,000-2.0% Strategy, Policy & Communications 1,002,500 1,102,500 10.0% 0 1,102,500 10.0% Human Resources 2,302,400 2,299,500-0.1% 0 2,299,500-0.1% Regulatory Services 2,734,500 2,681,500-1.9% 0 2,681,500-1.9% Financial Services 5,335,500 5,602,200 5.0% 0 5,602,200 5.0% Environmental Policy 880,200 912,800 3.7% 0 912,800 3.7% Legal Services 2,558,600 2,350,900-8.1% 0 2,350,900-8.1% Information Systems + Solutions 7,163,500 7,656,300 6.9% 0 7,656,300 6.9% Facilities & Construction Management 3,089,700 3,431,100 11.0% 0 3,431,100 11.0% Emergency Services 30,564,000 32,427,100 6.1% 0 32,427,100 6.1% Recreation Services 27,021,700 27,687,400 2.5% 0 27,687,400 2.5% Culture 5,320,100 5,542,000 4.2% 0 5,542,000 4.2% Library 9,432,200 9,271,600-1.7% 0 9,271,600-1.7% Parks & Open Space 20,481,800 21,074,400 2.9% 0 21,074,400 2.9% Infrastructure Maintenance 28,488,100 28,704,500 0.8% 0 28,704,500 0.8% Infrastructure Planning & Improvements 3,723,400 3,806,300 2.2% 0 3,806,300 2.2% Parking 3,883,600 3,990,100 2.7% 0 3,990,100 2.7% Oakville Transit 26,151,000 27,403,300 4.8% 0 27,403,300 4.8% Strategic Business Support 845,900 865,000 2.3% 0 865,000 2.3% Building Services 7,084,500 9,614,700 35.7% 0 9,614,700 35.7% Planning Services 6,493,600 6,454,800-0.6% 0 6,454,800-0.6% Development Engineering 3,466,400 3,435,400-0.9% 0 3,435,400-0.9% Economic Development 647,000 668,100 3.3% 0 668,100 3.3% Corporate Revenue & Expenses 49,500,900 50,595,900 2.2% 0 50,595,900 2.2% Total EXPENDITURE BY PROGRAM 254,264,700 264,064,500 3.9% 0 264,064,500 3.9% REVENUES Activity Revenue 53,055,700 57,374,300 8.1% 0 57,374,300 8.1% Internal Recoveries 18,650,300 18,996,800 1.9% 0 18,996,800 1.9% Grants 822,500 823,400 0.1% 0 823,400 0.1% Other Revenue 29,435,200 28,967,400-1.6% 0 28,967,400-1.6% Total Revenues 101,963,700 106,161,900 4.1% 0 106,161,900 4.1% Tax Levy Requirement 152,301,000 157,902,600 3.7% 0 157,902,600 3.7% Assessment Growth -0.75% Tax Levy Requirement 2.93% E-17
Table 14 2014 Operating Budget Tax Levy by Program 2013 2014 Base 2014 2014 2013-2014 Restated Base Budget Requested Requested Change Budget Budget Change (%) Adjustments Budget (%) TAX LEVY BY PROGRAM Political Governance 3,194,400 3,276,800 2.6% 0 3,276,800 2.6% Administrative Executive Management 2,085,500 1,745,700-16.3% 0 1,745,700-16.3% Service Oakville 756,400 733,000-3.1% 0 733,000-3.1% Strategy, Policy & Communications 997,500 1,102,500 10.5% 0 1,102,500 10.5% Human Resources 2,293,500 2,290,600-0.1% 0 2,290,600-0.1% Regulatory Services 1,458,000 1,309,300-10.2% 0 1,309,300-10.2% Financial Services 4,764,300 4,860,300 2.0% 0 4,860,300 2.0% Environmental Policy 855,200 887,800 3.8% 0 887,800 3.8% Legal Services 1,990,300 1,765,800-11.3% 0 1,765,800-11.3% Information Systems + Solutions 7,062,300 7,529,600 6.6% 0 7,529,600 6.6% Facilities & Construction Management 2,606,000 2,913,900 11.8% 0 2,913,900 11.8% Emergency Services 30,118,200 32,057,600 6.4% 0 32,057,600 6.4% Recreation Services 10,389,600 10,676,100 2.8% 0 10,676,100 2.8% Culture 2,874,400 3,242,700 12.8% 0 3,242,700 12.8% Library 8,769,500 8,617,800-1.7% 0 8,617,800-1.7% Parks & Open Space 14,481,600 14,794,900 2.2% 0 14,794,900 2.2% Infrastructure Maintenance 17,479,400 18,015,300 3.1% 0 18,015,300 3.1% Infrastructure Planning & Improvements 2,275,300 2,248,500-1.2% 0 2,248,500-1.2% Parking 0 0 0.0% 0 0 0.0% Oakville Transit 18,121,400 19,020,000 5.0% 0 19,020,000 5.0% Strategic Business Support 0 83,400 0.0% 0 83,400 0.0% Building Services 0 0 0.0% 0 0 0.0% Planning Services 3,627,100 2,778,800-23.4% 0 2,778,800-23.4% Development Engineering 963,500 546,900-43.2% 0 546,900-43.2% Economic Development 647,000 668,100 3.3% 0 668,100 3.3% Corporate Revenue & Expenses 14,490,600 16,737,200 15.5% 0 16,737,200 15.5% Total TAX LEVY BY PROGRAM 152,301,000 157,902,600 3.7% 0 157,902,600 3.7% Gross Expenditures by Type Salaries, Wages, Benefits 126,566,700 131,383,300 3.8% 0 131,383,300 3.8% Materials & Supplies 21,079,300 20,556,900-2.5% 0 20,556,900-2.5% Purchased Services 28,819,100 29,631,500 2.8% 0 29,631,500 2.8% Internal Charges 17,154,900 17,355,100 1.2% 0 17,355,100 1.2% Other Expenditures 13,688,100 13,533,000-1.1% 0 13,533,000-1.1% Minor Capital & Transfer to Reserves 46,956,600 51,604,700 9.9% 0 51,604,700 9.9% Gross Operating Expenditures 254,264,700 264,064,500 3.9% 0 264,064,500 3.9% E-18
Table 15 2015 2016 Operating Budget by Program 2014 2015 Base 2015 2015 2014-2015 2016 2016 2016 2015-2016 Requested Preliminary Budget Requested Forecast Change Forecast Requested Forecast Change Budget Base Budget Change (%) Adjustments Requested (%) Base Budget Adjustments Requested (%) GROSS EXPENDITURES Political Governance 3,955,400 3,363,700-15.0% 0 3,363,700-15.0% 3,427,100 0 3,427,100 1.9% Administrative Executive Management 1,784,700 1,840,000 3.1% 0 1,840,000 3.1% 1,896,400 0 1,896,400 3.1% Service Oakville 747,000 767,700 2.8% 0 767,700 2.8% 788,600 0 788,600 2.7% Strategy, Policy & Communications 1,102,500 1,228,000 11.4% 0 1,228,000 11.4% 1,264,600 0 1,264,600 3.0% Human Resources 2,299,500 2,355,700 2.4% 0 2,355,700 2.4% 2,423,000 0 2,423,000 2.9% Regulatory Services 2,681,500 2,754,600 2.7% 0 2,754,600 2.7% 2,828,800 0 2,828,800 2.7% Financial Services 5,602,200 5,947,100 6.2% 0 5,947,100 6.2% 6,133,200 0 6,133,200 3.1% Environmental Policy 912,800 934,400 2.4% 0 934,400 2.4% 959,600 0 959,600 2.7% Legal Services 2,350,900 2,388,400 1.6% 0 2,388,400 1.6% 2,427,500 0 2,427,500 1.6% Information Systems + Solutions 7,656,300 8,180,600 6.8% 0 8,180,600 6.8% 8,481,200 0 8,481,200 3.7% Facilities & Construction Management 3,431,100 3,541,900 3.2% 0 3,541,900 3.2% 3,636,600 0 3,636,600 2.7% Emergency Services 32,427,100 33,722,700 4.0% 0 33,722,700 4.0% 34,776,300 0 34,776,300 3.1% Recreation Services 27,687,400 28,644,600 3.5% 0 28,644,600 3.5% 29,677,600 0 29,677,600 3.6% Culture 5,542,000 5,795,200 4.6% 0 5,795,200 4.6% 5,992,600 0 5,992,600 3.4% Library 9,271,600 9,582,400 3.4% 0 9,582,400 3.4% 9,782,900 0 9,782,900 2.1% Parks & Open Space 21,074,400 21,797,600 3.4% 0 21,797,600 3.4% 22,402,400 0 22,402,400 2.8% Infrastructure Maintenance 28,704,500 30,261,300 5.4% 0 30,261,300 5.4% 31,460,400 0 31,460,400 4.0% Infrastructure Planning & Improvements 3,806,300 3,918,300 2.9% 0 3,918,300 2.9% 4,030,600 0 4,030,600 2.9% Parking 3,990,100 3,990,100 0.0% 0 3,990,100 0.0% 3,990,100 0 3,990,100 0.0% Oakville Transit 27,403,300 28,555,000 4.2% 0 28,555,000 4.2% 30,561,600 0 30,561,600 7.0% Strategic Business Support 865,000 892,500 3.2% 0 892,500 3.2% 923,500 0 923,500 3.5% Building Services 9,614,700 10,246,100 6.6% 0 10,246,100 6.6% 10,436,200 0 10,436,200 1.9% Planning Services 6,454,800 6,712,600 4.0% 0 6,712,600 4.0% 6,988,100 0 6,988,100 4.1% Development Engineering 3,435,400 3,557,700 3.6% 0 3,557,700 3.6% 3,698,700 0 3,698,700 4.0% Economic Development 668,100 691,200 3.5% 0 691,200 3.5% 716,000 0 716,000 3.6% Corporate Revenue & Expenses 50,595,900 55,049,900 8.8% 0 55,049,900 8.8% 63,020,700 0 63,020,700 14.5% Total GROSS EXPENDITURES 264,064,500 276,719,300 4.8% 0 276,719,300 4.8% 292,724,300 0 292,724,300 5.8% REVENUES by Type Activity Revenue 57,374,300 59,073,100 3.0% 0 59,073,100 3.0% 60,102,800 0 60,102,800-1.7% Internal Recoveries 18,996,800 19,980,000 5.2% 0 19,980,000 5.2% 20,762,200 0 20,762,200-3.9% Grants 823,400 810,000-1.6% 0 810,000-1.6% 820,200 0 820,200-1.3% Other Revenue 28,967,400 29,610,800 2.2% 0 29,610,800 2.2% 35,184,300 0 35,184,300-18.8% Total Revenues 106,161,900 109,473,900 3.1% 0 109,473,900 3.1% 116,869,500 0 116,869,500 6.8% Tax Levy 157,902,600 167,245,400 5.9% 0 167,245,400 5.92% 175,854,800 0 175,854,800 5.15% Assessment Growth -1.00% -1.00% Total Tax Levy Requirement 157,902,600 167,245,400 167,245,400 4.92% 175,854,800 175,854,800 4.15% E-19
Table 16 2015 2015 Operating Budget Tax Levy by Program 2014 2015 2014-2015 2016 2015-2016 Requested Forecast Change Forecast Change Budget Base Budget (%) Base Budget (%) TAX LEVY Political Governance 3,276,800 3,347,100 2.1% 3,410,500 1.9% Administrative Executive Management 1,745,700 1,796,500 2.9% 1,847,900 2.9% Service Oakville 733,000 753,700 2.8% 774,600 2.8% Strategy, Policy & Communications 1,102,500 1,228,000 11.4% 1,264,600 3.0% Human Resources 2,290,600 2,346,800 2.5% 2,414,100 2.9% Regulatory Services 1,309,300 1,364,500 4.2% 1,420,400 4.1% Financial Services 4,860,300 5,199,000 7.0% 5,383,400 3.5% Environmental Policy 887,800 909,400 2.4% 934,600 2.8% Legal Services 1,765,800 1,803,300 2.1% 1,842,400 2.2% Information Systems + Solutions 7,529,600 8,053,900 7.0% 8,354,500 3.7% Facilities & Construction Management 2,913,900 3,013,800 3.4% 3,099,100 2.8% Emergency Services 32,057,600 33,353,200 4.0% 34,406,800 3.2% Recreation Services 10,676,100 11,219,300 5.1% 11,919,400 6.2% Culture 3,242,700 3,451,300 6.4% 3,619,100 4.9% Library 8,617,800 8,928,600 3.6% 9,129,100 2.2% Parks & Open Space 14,794,900 15,396,800 4.1% 15,928,600 3.5% Infrastructure Maintenance 18,015,300 19,120,100 6.1% 20,014,900 4.7% Infrastructure Planning & Improvements 2,248,500 2,322,700 3.3% 2,417,000 4.1% Parking 0 0 0.0% 0 0.0% Oakville Transit 19,020,000 19,993,200 5.1% 21,923,200 9.7% Strategic Business Support 83,400 87,500 4.9% 90,400 3.3% Building Services 0 0 0.0% 0 0.0% Planning Services 2,778,800 2,682,600-3.5% 2,569,900-4.2% Development Engineering 546,900 524,700-4.1% 514,300-2.0% Economic Development 668,100 691,200 3.5% 716,000 3.6% Corporate Revenue & Expenses 16,737,200 19,658,200 17.5% 21,860,000 11.2% Total TAX LEVY 157,902,600 167,245,400 5.9% 175,854,800 5.1% GROSS EXPENDITURES by Type Personnel Services & Benefits 131,383,300 137,197,400 4.4% 142,308,400 3.7% Materials & Supplies 20,556,900 20,877,400 1.6% 21,618,900 3.6% Purchased Services 29,631,500 30,663,800 3.5% 31,673,100 3.3% Internal Charges 17,355,100 18,289,300 5.4% 19,017,500 4.0% Other Expenditures 13,533,000 14,190,000 4.9% 19,456,300 37.1% Minor Capital & Transfer to Reserves 51,604,700 55,501,400 7.6% 58,650,100 5.7% Total Expenditures 264,064,500 276,719,300 4.8% 292,724,300 5.8% E-20
Table 17 Town Revenue Operating Budget Summary 2014 Base Requested 2014 % Forecast Forecast 2013 Base Budget 2014 Requested Change 2015 2016 Budget Budget Change (%) Adjustments Budget 2014/2013 Budget Budget SOURCES OF REVENUE Corporate Revenue Taxation 152,301,000 157,902,600 3.7% 0 157,902,600 3.7% 167,245,400 175,854,800 Supplementary Taxes 1,250,000 1,250,000 0.0% 0 1,250,000 0.0% 1,250,000 1,250,000 Local Improvement Collections 24,900 2,100-91.6% 0 2,100-91.6% 2,100 2,100 Payments in Lieu of Taxes 3,448,100 3,591,500 4.2% 0 3,591,500 4.2% 3,591,500 3,591,500 General Provincial Grants 0 0 0.0% 0 0 0.0% 0 0 Income from Investments 4,076,600 4,086,400 0.2% 0 4,086,400 0.2% 4,086,400 4,086,400 POA Halton Court Fines 594,000 594,000 0.0% 0 594,000 0.0% 594,000 594,000 Tax Penalty & Interest 3,000,000 3,000,000 0.0% 0 3,000,000 0.0% 3,000,000 3,000,000 Oakville Hydro Revenue 9,574,000 9,603,200 0.3% 0 9,603,200 0.3% 9,603,200 9,603,200 Subdivision Agreement Fees 0 0 0.0% 0 0 0.0% 0 0 Other Service Fees 0 0 0.0% 0 0 0.0% 0 0 Fund Balance and Transfer 500,000 500,000 0.0% 0 500,000 0.0% 500,000 500,000 Total Corporate Revenue 174,768,600 180,529,800 3.3% 0 180,529,800 3.3% 189,872,600 198,482,000 Deparmental Revenue 60,845,800 64,537,900 6.1% 0 64,537,900 6.1% 66,866,700 73,480,100 Internal Recoveries 18,650,300 18,996,800 1.9% 0 18,996,800 1.9% 19,980,000 20,762,200 TOTAL REVENUE 254,264,700 264,064,500 3.9% 0 264,064,500 3.9% 276,719,300 292,724,300 E-21
2014 TOTAL EXPENDITURES The table below sets out the 2014 expenditure needs for all programs for both operating and capital. Total combined gross spending in 2014 is projected at $296.2 million. The following chart shows the major areas of spending for the combined operating and capital programs. Table 18 2014 Capital & Operating Expenditures E-22
Table 19 Town Summary Budgeted Expenditure and Revenue by Program (Operating & Capital) 2013 2013 2014 2014 2014 2014 Gross 2013 Net Gross 2014 Net Capital Capital + Operating Expenditures Revenue Expenditures Expenditures Revenue Expenditures Expenditures Expenditures Political Governance 3,210,700 (16,300) 3,194,400 3,955,400 (678,600) 3,276,800 0 3,955,400 Administrative Executive Management 2,120,500 (35,000) 2,085,500 1,784,700 (39,000) 1,745,700 100,000 1,884,700 Service Oakville 762,400 (6,000) 756,400 747,000 (14,000) 733,000 475,000 1,222,000 Strategy, Policy & Communications 1,002,500 (5,000) 997,500 1,102,500 0 1,102,500 620,000 1,722,500 Human Resources 2,302,400 (8,900) 2,293,500 2,299,500 (8,900) 2,290,600 0 2,299,500 Regulatory Services 2,734,500 (1,276,500) 1,458,000 2,681,500 (1,372,200) 1,309,300 0 2,681,500 Financial Services 5,335,500 (571,200) 4,764,300 5,602,200 (741,900) 4,860,300 450,600 6,052,800 Environmental Policy 880,200 (25,000) 855,200 912,800 (25,000) 887,800 0 912,800 Legal Services 2,558,600 (568,300) 1,990,300 2,350,900 (585,100) 1,765,800 0 2,350,900 Information Systems + Solutions 7,163,500 (101,200) 7,062,300 7,656,300 (126,700) 7,529,600 2,300,000 9,956,300 Facilities & Construction Management 3,089,700 (483,700) 2,606,000 3,431,100 (517,200) 2,913,900 2,577,300 6,008,400 Emergency Services 30,564,000 (445,800) 30,118,200 32,427,100 (369,500) 32,057,600 4,284,600 36,711,700 Recreation Services 27,021,700 (16,632,100) 10,389,600 27,687,400 (17,011,300) 10,676,100 1,963,500 29,650,900 Culture 5,320,100 (2,445,700) 2,874,400 5,542,000 (2,299,300) 3,242,700 422,200 5,964,200 Library 9,432,200 (662,700) 8,769,500 9,271,600 (653,800) 8,617,800 1,162,800 10,434,400 Parks & Open Space 20,481,800 (6,000,200) 14,481,600 21,074,400 (6,279,500) 14,794,900 14,649,600 35,724,000 Infrastructure Maintenance 28,488,100 (11,008,700) 17,479,400 28,704,500 (10,689,200) 18,015,300 2,527,000 31,231,500 Infrastructure Planning & Improvements 3,723,400 (1,448,100) 2,275,300 3,806,300 (1,557,800) 2,248,500 16,240,100 20,046,400 Parking 3,883,600 (3,883,600) 0 3,990,100 (3,990,100) 0 474,000 4,464,100 Oakville Transit 26,151,000 (8,029,600) 18,121,400 27,403,300 (8,383,300) 19,020,000 4,681,000 32,084,300 Strategic Business Support 845,900 (845,900) 0 865,000 (781,600) 83,400 0 865,000 Building Services 7,084,500 (7,084,500) 0 9,614,700 (9,614,700) 0 0 9,614,700 Planning Services 6,493,600 (2,866,500) 3,627,100 6,454,800 (3,676,000) 2,778,800 125,000 6,579,800 Development Engineering 3,466,400 (2,502,900) 963,500 3,435,400 (2,888,500) 546,900 40,000 3,475,400 Economic Development 647,000 0 647,000 668,100 0 668,100 0 668,100 Corporate Revenue & Expenses 49,500,900 (12,542,700) 36,958,200 50,595,900 (11,231,500) 39,364,400 0 50,595,900 254,264,700 (79,496,100) 174,768,600 264,064,500 (83,534,700) 180,529,800 53,092,700 317,157,200 Less Operating and Capital Overlap (19,087,600) (20,946,100) (20,946,100) 235,177,100 (79,496,100) 174,768,600 243,118,400 (83,534,700) 180,529,800 53,092,700 296,211,100 Town Revenue 155,681,000 159,583,700 E-23
Table 20 Capital Budget and Financing Summary By Program TOTAL PROGRAM SPECIFIC FINANCING CORPORATE FINANCING TOTAL Gross Development Equipment Gas Tax Other Funding Grants Total Local Capital Operating Long Term Total Proposed COMMISSION/PROGRAM Cost Charges Reserves Funding Reserves and Other Pr. Specific Infrastructure Reserve Contribution Financing Corporate Financing Revenues Financing Reserve Financing CORPORATE INITIATIVES Corporate Initiatives 1,645,600 1,645,600 1,645,600 1,645,600 Total CORPORATE INITIATIVES 1,645,600 0 0 1,645,600 1,645,600 1,645,600 CORPORATE SERVICES Facilties and Construction Management 2,577,300 759,400 759,400 1,817,900 1,817,900 2,577,300 Information Systems & Solutions 2,300,000 2,300,000 2,300,000 2,300,000 Total CORPORATE SERVICES 4,877,300 759,400 759,400 0 0 4,117,900 4,117,900 4,877,300 COMMUNITY SERVICES Parks and Open Space 14,649,600 3,457,800 1,614,000 2,996,600 8,068,400 6,581,200 6,581,200 14,649,600 Emergency Services 4,284,600 2,289,600 917,000 203,000 3,409,600 875,000 875,000 4,284,600 Recreation and Culture Department 2,368,700 1,368,400 1,368,400 1,000,300 1,000,300 2,368,700 Oakville Public Library 1,162,800 60,300 60,300 1,102,500 1,102,500 1,162,800 Oakville Galleries 17,000 17,000 17,000 17,000 Infrastructure Maintenance 2,527,000 500,000 1,217,000 350,000 2,067,000 460,000 460,000 2,527,000 Oakville Transit 4,681,000 148,400 2,897,000 1,202,100 25,000 4,272,500 408,500 408,500 4,681,000 Total COMMUNITY SERVICES 29,690,700 6,395,800 6,645,000 1,552,100 4,653,300 19,246,200 0 0 10,444,500 10,444,500 29,690,700 COMMUNITY DEVELOPMENT Infrastructure Planning 16,714,100 4,596,100 336,000 5,842,400 338,000 700,500 11,813,000 292,000 4,609,100 4,901,100 16,714,100 Planning Services 125,000 125,000 125,000 125,000 Development Engineering 40,000 36,000 36,000 4,000 4,000 40,000 Total COMMUNITY DEVELOPMENT 16,879,100 4,632,100 336,000 5,842,400 338,000 700,500 11,849,000 292,000 0 4,738,100 5,030,100 16,879,100 TOTAL $53,092,700 $11,027,900 $6,981,000 $7,394,500 $5,750,700 $700,500 $31,854,600 $292,000 $0 $20,946,100 $0 $21,238,100 $53,092,700 Percent of Total 20.8% 13.1% 13.9% 10.8% 1.3% 60.0% 0.5% 0.0% 39.5% 0.0% 40.0% 100.0% E-24
2014 CAPITAL BUDGET AND FORECAST Municipalities deliver many services that are critical to the health and well-being of their residents and businesses. These services rely on well-planned, well-built and well maintained infrastructure. Therefore, it is essential that a municipality has a strong strategic framework that guides future investment in ways that support economic growth, maintains ageing infrastructure, responds to changing needs and is fiscally responsible. The 2014-2023 capital forecast and financing strategy that was presented to Council in June has been built on the foundation of Council s strategic goals resulting from many of the studies undertaken under Vision 2057 and the 2011-2014 Strategic Workplan. Many community development plans and master plan studies have been identified through Vision 2057 and the ten year capital forecast strives to incorporate the initiatives outlined within these plans while ensuring fiscal sustainability. In order to review, assess and prioritize the various capital projects, a framework based on drivers was developed. This framework is essential in ensuring that all financial tools available to the town are managed as a whole with the overall fiscal picture in mind. Many financing sources are specific for only certain types of projects and it is important that these sources are leveraged to the maximum. The framework that was developed groups projects into five categories: Growth Cost to maintain current service levels as the town s population grows. Needs identified in the Development Charges Study Infrastructure Renewal Costs to maintain existing infrastructure in a state of good repair. On-going replacement of infrastructure at end of useful life. Strategic Priorities Costs for other initiatives identified to achieve council s strategic goals. Community Enhancements Costs for improvements or enhancements to the community that increase the current level of service but are not entirely driven by growth. Enterprise Initiatives Costs that support ongoing initiatives for the town s 3 self-supported programs; Cemeteries, Harbours and Parking. E-25
Capital Financing Policies and Assumptions The 2014-2023 capital forecast and financing plan has been developed with the following financing policies and assumptions: Debt re-payment levels including the pending new hospital commitment remain within the council approved policy limits; Outstanding debt to reserve levels do not exceed the 1:1 ratio required to maintain AAA credit rating; The 1% Capital levy increase is maintained over the 10 year period; Timing of Growth projects aligns with anticipated residential and non-residential development; Development Charge reserve funds return to a surplus position; Capital reserves are maintained at sufficient levels to minimize risk, support future initiatives and provide for unknown contingencies; Equipment reserves are maintained at sufficient levels to support on-going life cycle replacements; Building replacement reserve contributions are maintained and as new facilities are built contributions are increased phased over 5 years; The 2014-2023 capital forecast and financial plan ensures that various master plans and strategic goals are achievable while maintaining fiscal sustainability and ensuring the financial policies are adhered to. The 2014-2023 capital forecast as presented in June totaled $867.6 million over 10 years, of which $52.9 million was included in 2014. Over the past few months minor adjustments have been made to the 2014 capital budget increasing the 2014 recommended gross capital expenditures to $53.1 million, therefore the revised 10 year capital program totals 868.3 million. These adjustments have been outlined in the 2014 Capital Budget Approval report to Budget Committee November 18 th, 2013. The following table illustrates the revised capital forecast by category. Table 21 Capital Forecast by Category Classification 2014 Total Infrastructure Renewal $ 31.2 $ 375.7 Growth 12.8 358.0 Strategic Priorities 8.2 54.9 Community Enhancements 0.1 62.7 Enterprise Initiatives 0.8 17.0 Total $ 53.1 $ 868.3 E-26
This next table outlines the highest dollar value projects included in the 2014 capital budget. These projects represent 46.8% of the total capital budget. Table 22 Top 10 Largest Capital Projects (Millions) Program Project Budget Infr. Planning & Improv. 53331304 Road Resurfacing & Preservation Program $ 6.3 Parks & Open Space 52271303 EAB Management Program $ 3.6 Oakville Transit 54411303 Replacement Buses $ 2.9 Infr. Planning & Improv. 53311102 North Service Rd Extension - Joshua Cree $ 2.8 Emergency Services 43301402 Fire Station No.9 - Land $ 2.3 Parks & Open Space 52211302 North Oakville - Neighbourhood Park -2 $ 2.0 Parks & Open Space 52251302 Parks Replacement Equipment $ 1.6 Parks & Open Space 52241201 16 Mile Creek West Shore Landscape Rehabilitation $ 1.5 Infrastructure Maint. 51321301 Roads & Works Replacement Equipment $ 1.2 Oakville Transit 54411304 Major Vehicle Refurbishment $ 1.1 Significant Infrastructure Renewal projects for 2014 include: $6.3 million for Road resurfacing and preservation program $2.9 million for Replacement buses $1.6 million for Parks replacement equipment Table 23 2014 Capital Budget by Classification, $53.1 M Total $ 25.2 46.8% Top 10 Projects Above Account for 46.8% of the Total 2014 Capital Budget Infrastructure Renewal As seen in table 23, the largest component of the 2014 capital budget is Infrastructure Renewal with $31.2 million or 58.7%. These projects are necessary in order to ensure that existing infrastructure remains in a state of good repair and that they are replaced at the end of their useful life. Growth For 2014, the growth capital budget includes expenditures of $12.8 million. Projects supporting growth of the town are of great importance with 24.1% allocated in this category. As the town grows it is important that new infrastructure is in place to maintain current levels of service for its residents. E-27
Significant projects for 2014 include: $2.8 million for reconstruction and extension of the North Service Road to Ford Drive, improving and relieving travel congestion on Trafalgar Road $2.3 million to locate and purchase suitable land in North Burnhamthorpe area for a permanent fire station to be construction in 2021 $2.1 million for a new 4 ha neighbourhood park in North Oakville Strategic Priorities The Strategic Priorities are projects that have been initiated by staff in order to achieve the goals set out in Council s strategic plan. In 2014 a total $8.2 million has been allocated to this category and include some significant projects: $3.6 million for the EAB Management program to deal with the impact of the emerald ash borer on ash trees on town road allowances, parks and woodlots $0.7 million to implement an RFID System at the Oakville Public Library $0.6 million for Web Based Services to continue enhancements to site functionality with a significant focus on accessibility Community Enhancements These projects are improvements or enhancements to the community that increase the current level of service but are not entirely driven by growth. The two projects in 2014 represent funding for necessary studies to determine next steps required for the various Community Enhancement initiatives include: Oakville Trafalgar Memorial Hospital demolition - funding to conduct engineering studies to refine demolition requirements of the site. South Central School Site Planning Studies funds to assess buildings and determine how they can be redeveloped for residential uses. Enterprise Initiatives The 2014 Enterprise Initiative capital budget includes projects that support ongoing initiatives for the town s three selfsupported programs; Cemeteries, Harbours and Parking. In 2014, expenditures of $0.8 million have been included to support ongoing replacement of equipment and vehicles, along with repair and refurbishment to facilities. E-28
2014 Financing Overview Financing of the 2014 capital budget is provided by several different funding sources. As shown in the pie chart the largest source of financing is the capital levy representing 39.5% of total funding. The $20.9 million in financing from the capital levy is primarily used to fund infrastructure renewal projects. The capital levy represents 41% of the financing for infrastructure renewal. This illustrates the reliance of the capital levy in ensuring the town s assets are maintained in a state of good repair. The annual 1% increase to the levy has also allowed all infrastructure renewal requirements to be fully funded without the use of debt financing. Table 24 2014 Capital Budget Financing, $53.1 M In addition, the capital levy is the main source of funding used to fund the various strategic priorities which enable staff to meet council s objectives. In 2014, 90% of the financing for strategic priorities is funded from capital levy. Development charges represent the second largest funding source representing 20.8% of the total financing. As development charges are the primary source of funding for growth projects, timing of these projects is heavily reliant on anticipated growth patterns and projected Development Charge (DC) collections. In 2014, 86% of the growth capital is funded from development charges. External revenue from sources such as the MTO or other municipalities represent 6% of the financing for growth projects as some projects are cost shared. The remaining 8% is funded from the capital levy and gas tax which represents the town s share of growth projects for the mandatory discount on soft services and any benefit to existing as per the DC legislation. Other integral sources of funding for Infrastructure Renewal are the Equipment reserves and Building Maintenance reserve fund. These reserves are the primary source of funding for all town vehicle and equipment replacements and building repairs and maintenance. Buildings, vehicles and equipment represent 30% of the town s total asset net book value. Therefore, it is important that these reserves are available to sustain future repairs and replacements. The 2014 capital budget includes $9.4 million in funding from these reserves. E-29
Gas Tax represents 13% of the total financing with $7.4 million. Gas Tax funding is used to support various environmental initiatives across the town. Provincial gas tax is dedicated to Transit and has been used primarily to support service expansion as the town grows. Federal gas tax must be used for projects which promote cleaner air, water or reduce greenhouse gas emissions. In 2014 gas tax funding is primarily used for infrastructure renewal projects such as road improvements, active transportation, transit vehicle replacements and green energy projects. Reserve Funds are generally derived from program specific revenue sources and therefore are restricted to be used for those programs. Specific reserve funds in this group include the Parkland reserve fund, as well as the Parking and Harbour reserve funds and are the source of funding for the Enterprise Initiatives. Debentures are generally used for specific initiatives and not used to support infrastructure renewal or growth projects. In 2014 no additional debt has been planned. Minimal Capital reserve funding has been used in 2014 to ensure the town s financial status remains in good standing. One of the key indicators that Municipal credit rating agencies look at to determine a municipality s credit rating is the outstanding debt to reserve ratio. Agencies recommend a debt to reserve ratio of 1:1, therefore it is important that this ratio is maintained to ensure the Region s AAA credit rating. With the anticipated debt issuance required in 2016 for the town s contribution to the new Hospital, careful attention has been paid to projected reserve levels over the next few years. Minimizing use of capital reserve over the short-term has also allowed many of the Community Enhancement projects to proceed in future years as capital reserves are the primary source of funding for these projects. Capital reserves will provide funding for some of the South Central community projects as the sale of surplus residual land from the Oakville Trafalgar Memorial (OTM) hospital is intended to replenish funding utilized from the reserve. E-30
2014 Capital Budget by Program The following chart illustrates the 2014 capital budget by program. As shown in the graph, the Infrastructure Planning & Improvements program has the largest capital budget in 2014 totaling $16.7 million or 31.5% of the total capital budget. Table 25 2014 Capital Budget by Program, $53.1 M & Preservation Program project recommended as part of the 2010 budget process. The second largest capital program is Parks and Open Space totaling $15.3 million or 27.6% of the total capital budget. Included in the Parks and Open Space program is $3.6 million to continue work on Emerald Ash Borer (EAB) management in street trees and woodlots. As well, North Oakville Neighbourhood Park 2 is scheduled to begin construction in 2014, with a budget of $2.0. Other significant programs are Oakville Transit and Emergency Services totaling $9.0 million which includes a budget of $2.3 million to purchase land for the new Fire Station 9 that is estimated to begin construction in 2020. Oakville Transit has budgeted $2.9 million to replace its ageing fleet along with $1.1 million for major vehicle refurbishment. Of the $16.7 million, $10.0 million is for road infrastructure improvements to service growth needs of the town and $5.6 million is for rehabilitating existing infrastructure. It should also be noted that the capital program includes a $250,000 increase in funding from operating to the Road Resurfacing E-31