11 2011 Draft Budget Overview to the Chamber of Commerce March 16, 2011 Presenters: John Taylor, Regional Councillor Mike Mayes, Director, Financial Services/Treasurer.

11

2011 Draft BudgetOverview to the

Chamber of CommerceMarch 16, 2011

Presenters:

John Taylor, Regional Councillor

Mike Mayes, Director, Financial Services/Treasurer

2

Budget Process Recap

September 2010 2011 Fees and ChargesJanuary 31 Overview of Preliminary BudgetFebruary 17 Budget Listening SessionFebruary 28 Budget binders distributedMarch 4 Budget available for the publicMarch 7 CoW Budget deliberations

3

Strategic PlanVision, Mission & Core Values

VisionWhat we aspire to.

Well beyond the ordinary

With direction from the community we defined our ultimate destination as a community that is well beyond the ordinary. It’s an extraordinary goal that requires deliberate, strategic and guided steps, each taking Newmarket closer to its vision.

MissionHow we’ll get there.

Making Newmarket even better

The corporate mission exists to guide employees in their daily jobs. By striving to make Newmarket even better, employees will help achieve the vision.

ValuesThe principles that guide our actions and behaviours.

Courage & CreativityAccountabilityAccessibility Respect & IntegrityExcellence

The core values are the guiding principles the employees of the Town have chosen to live by as they strive to make Newmarket even better.

4

Strategic Plan Focus Areas

Living Well Living well means focusing on health, safety and the environment to promote activity and enrich lives.

Well-Balanced Well-balanced means encouraging a sense of community through an appropriate mix of land uses and amenities.

Well-Equipped & Managed Well-equipped and managed means implementing policy and processes that reflect sound and accountable governance.

Well-Planned & Connected Well-planned and connected means strategically planning for the future to improve information access and enhance travel to, from and within Newmarket.

Well-Respected Well-respected means inspiring partnerships and co-operation with stakeholders that revolve around well-being, synergy and balanced living.

The 5 Wells

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The Town of Newmarket is Diverse and Complex981 full and part-time employees$110 million budget212 km of roads, 290km of watermains, 50 km of

trails, 365 hectares of parksEstimated replacement value of capital assets =

$1.1 billion Servicing a population of 84,351 in 27,350

householdsManaging many lines of business on a day-to-day basis

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The Town of Newmarket is CompetitiveComparative tax rate – 2010 BMA studyCustomer satisfaction

• 96% of residents are satisfied living in Newmarket• nearly 80% are satisfied with the services received

from the TownNewmarket is ranked 15th out of 179 Canadian

cities and towns and best place to live in York Region

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2010 Tax Comparators

Measure Newmarket Region Average

GTA Average

BMA (Ontario) Average

Detached Bungalow $3,151 $3,432 $3,380 $2,915

Senior Executive Home $5,190 $5,638 $5,675 $5,438

Multi-Residential walk-up $799 $822 $1,364 $1,327

Multi-Residential mid/high rise $960 $953 $1,460 $1,557

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Measure NewmarketRegion Average

GTA Average

BMA (Ontario) Average

Net Municipal Levy per Capita $1,036 $1,222 $1,208 $1,228

Net Lower Tier Levy per Capita $468 $507

Property taxes as a % of Household Income

3.50% 3.70% 4.10%

Property Tax and Water / Sewer Rates as a Percentage of Income

4.20% 4.20% 4.30% 5.00%

2010 Tax Comparators

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Measure Newmarket Region Average

GTA Average

BMA (Ontario) Average

Office building per sq ft $2.36 $3.02 $3.19 $2.89

Neighbourhood Shopping sq ft $3.63 $3.39 $3.72 $3.36

Hotel per suite $1,246 $1,431 $1,561 $1,803

Standard Industrial sq ft $2.05 $2.05 $2.19 $1.83

Large Industrial sq ft $1.50 $1.35 $1.51 $1.38

2010 Tax Comparators

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Responsible Financing Strategies

Asset Replacement Fund (ARF)• $12 million annually for $1.1 billion in

assetsThe Town of Newmarket Debt Policy

• limit of 10% (currently 6.5%), 85% of which is financed from non-tax sources

Service Pricing Policy5-year ForecastService Reviews

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Partnerships (Government-to-Government, Other)• N6 Waste Management • Customer Service Centre/Region, etc.• N6 training cooperative• Business

Optimizing 2010 Surplus Gapping, Hiring Delays Outsourcing Sponsorships Service Pricing Policy Trail Levy Recreation Surcharge Responsible Policies (Debt, Benefits, Cola, etc.) Maximizing opportunities for cost recovery (e.g. VIVA) Ongoing service level, department and org structure reviews Remaining ‘opportunity aware’ and acting on these as appropriate

Efficiency & EffectivenessMeasures / Actions / Innovations

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Internal & External

Assessment

Internal & External Assessment

Continuous Improvement Reviews• Let’s Make it Happen (2002)• Results Based Budgeting – Service Level Review (2006)• Call to Action (2009)• Service Delivery Review – Business Planning & Budget

Process (2010) Human Resources Department Review (2004) Community Services Commission Organizational Review

(2007/08) Service Alignment Review (2009) Community Surveys (2002, 2005, 2010) Budget Open House (2008, 2009, 2010) IT Review (2007) PIC’S (e.g. Magna, Operations Centre, CUSP, etc.) Fees & Charges Review

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2011 Budget Priorities Strive to provide quality programs and services to maintain a high

level of community satisfaction.

Provide for the hiring of 20 new Firefighters to meet growth and ensure public safety.

Maintain a responsible and affordable tax levy to respond to current and future needs.

Incorporate carry-over obligations to accommodate growth and new facilities.

Encourage public engagement and consultation in the budget process through enhanced communication efforts.

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2011 Drivers & Challenges

Driver /Challenge Example

Legislation & Agreements Meeting legislated requirements and agreements [i.e. Accessibility for Ontarians with Disabilities Act (AODA), CYFS]

Service Level and Growth Service Delivery Levels, Community Safety/Emergency Services, Asset Replacement Fund Reserves, Parks, Trails & Open Spaces

Decreased Revenues Participation rates changing due to demographic shifts, decreasing Hydro dividend

Increased Expenses Cost of fuel, electricity & other equipment and materials

Workforce Considerations Maintaining a sufficient workforce in an increasingly competitive labour market

Economic Realities Slower than expected recovery, increasing global unrest

Environment Shifts More complex standards, variable weather conditions

Technology Needs Increase in on-line services, communication methods (i.e. Twitter, Facebook, etc.)

Places to Grow Opportunities Investment by others, new ventures, grant opportunities

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Budget Challenge

Town$ increase

CYFS$ increase

Library$ increase

Total$ increase

Tax % Increase

Increase from 2010 Base 858,803 661,656 273,049 1,793,508 4.53%

Gapping reduction 150,000 150,000 0.38%

Increase in winter control 394,434 394,434 1.00%

Hydro dividend decrease 137,500 137,500 0.35%

OMERS 221,316 70,596 12,000 303,912 0.77%

Dispatch service 35,096 35,096 0.09%

Additional firefighters 1,069,389 1,069,389 2.70%

CUSP 361,978 361,978 0.91%

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Budget Challenge

Town$

CYFS$

Library$

Total$

TaxIncrease

%

Other growth requests 809,198 154,223 115,635 1,079,056 2.72%

Restoring level of Capital Financing 296,000 (3,026) (7,678) 285,296 0.72%

Planned Increase in ARF contribution 631,780 143,366 30,586 805,732 2.03%

Monday service 119,406 119,406 0.30%

Other Enhancement requests 205,809 41,585 (1,400) 245,994 0.62%

Subtotal 4,066,818 2,172,885 541,598 6,781,301 17.11%

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Budget Reductions

Town$

CYFS$

Library$

Total$

Tax Increase

%

Continuation of Corporate-wide Gapping (150,000)

(150,000) (0.38%)

Reduce street lighting budget (200,000) (200,000) (0.50%)

Energy reserve (80,000) (80,000) (0.20%)

Increase in bank interest (115,000) (115,000) (0.29%)

De-annualize additional firefighters (242,964) (242,964) (0.61%)

De-annualize CUSP (216,187) (216,187) (0.55%)

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Budget Reductions cont.

Town$

CYFS$

Library$

Total$

Tax Increase

%

De-annualize other Growth requests (75,216) (40,889) (116,105) (0.29%)

Deferred growth requests (436,412) *(92,445) *(115,635) (644,492) (1.63%)

Assessment growth (808,621) (808,621) (2.04%)

Supplementary Taxes (250,000) (250,000) (0.63%)

Supplementary taxes – extra (184,665) (184,665) (0.47%)

* To be reviewed by JCC and Library Board.

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Budget Reductions cont.

Town$

CYFS$

Library$

Total$

Tax Increase

%

Reserve Funding for Growth items (6,500) (40,889) (47,389) (0.12%)

Reserve Funding for Enhance items (80,000) (80,000) (0.20%)

Deferred Enhance requests (90,016) (119,406) (209,422) (0.53%)

Total Reductions (2,692,617) (417,187) (235,041) (3,344,845) (8.44%)

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Further Budget Reductions

Town CYFS Library Total Tax Increase

Subtotal after reductions $1,374,201 $1,755,698 $306,557 $3, 436,456 8.67%

Defer capital financing increase ($296,000) ($296.000) (0.75%)

Defer ARF increase ($631,780) ($143,366) ($30,586) ($805,732) (2.03%)

Current budget status $446,421 $1,612,332 $275,971 $2,334,724 5.89%

Tax Increase 1.13% 4.07% 0.70% 5.89%

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Risk and Impact on Future Years

De-annualization deferring 1.45% tax increase to 2012• additional fire staff• operating costs for CUSP• other growth-related initiatives

Capital financing is being kept at the 2010 levels• asset replacement fund had not been

increased since 2009

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Breakdown of Tax IncreaseUnder Consideration (Preliminary 1st Draft)

• CYFS budget has been reviewed by JCC• Library budget Growth and Enhancement items have been reviewed

by the Board. Town to update Library budget

Town CYFS Library Total

Base 2.51% 1.67% 0.67% 4.85%

Mandatory 0.56% 0.27% 0.03% 0.86%

Growth 1.10% 2.04% 0.00% 3.14%

Enhancement 0.09% 0.09% 0.00% 0.19%

Subtotal 4.26% 4.07% 0.70% 9.03%

Assessment GrowthSupplementary Taxes

(2.04%)(1.10%)

0.00%0.00%

0.00%0.00%

(2.04%)(1.10%)

Total 1.12% 4.07% 0.70% 5.89%

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How our Tax Dollar is Spent

Notes: •$113 / month•$1366 / year

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2011 Residential Property TaxUnder Consideration

• Regional Municipality of York is projecting a tax increase of 1.94%. Tax shifts due to variable assessment growth in the province could lower the increase applicable to Newmarket in 2010 by 0.5%. The Region continues to benefit from uploading to the Province. Last year this has allowed them to reduce their tax increase by 3.3%.

• School Board increase is based on historical trends. Tax shifts due to variable assessment growth in the Region could lower the increase applicable to Newmarket in 2010 by 0.24%.

• If the 2011 tax shift is the same as in 2010, the all-in tax increase would be 2.17%.

2010 2011 $ Change % Change

Town $ 1,289.90 $ 1,365.87 $ 75.97 5.89%

Region 1,565.49 1,595.87 30.38 1.94%

Municipal 2,855.39 2,961.74 106.35 3.72%

School Board 790.92 790.92 - 0.00%

Total $ 3,646.31 $ 3,752.56 $ 106.35 2.92%

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2011 Commercial Property Tax Under Consideration

Property taxes per square foot for Neighbourhood Shopping from the 2010 BMA Study

2010 2011 $ Change % Change

Town $ 0.73 $ 0.77 $ 0.04 5.89%

Region 0.88 0.90 0.02 1.94%

Municipal 1.61 1.67 0.06 3.72%

School Board 2.02 2.02 0.00 0.00%

Total $ 3.63 $ 3.69 $ 0.06 1.65%

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2011 Industrial Property Tax Under Consideration

Property taxes per square foot for Standard Industrial from the 2010 BMA Study

2010 2011 $ Change % Change

Town $ 0.42 $ 0.44 $ 0.02 5.89%

Region 0.50 0.51 0.01 1.94%

Municipal 0.92 0.95 0.03 3.72%

School Board 1.13 1.13 0.00 0.00%

Total $ 2.05 $ 2.08 $ 0.03 1.67%

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Draft 2011 Capital Budget

New Gross Expenditures = $25.5 million Spending will be limited to available funding – ARF, other

reserve funds, DC’s and Capital Financing from Operations. There has been no increase in these funding sources based on

the current operating budget.

2010 capital budget carryovers Funding for incomplete 2010 projects and commitments are

carried over into 2011 if still necessary. Council has already approved them and funding has been

allocated.

Accounting and Policy Changes

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To engage the public in the budget process. To better inform the public of the challenges

facing Newmarket and innovative approaches Newmarket is taking to protect the financial sustainability of the Town.

To demystify the budget and make it a more understandable and approachable process.

Public Consultation& Communication Plan

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Public Consultation& Communication Plan

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Public Consultation& Communication Plan

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2011 Budget Meeting and Events ScheduleDATE ACTIVITY

March 21 Budget Open House #1, Ray Twinney Recreation Complex, 7 to 9 PM

March 26 Budget Open House #2, Newmarket Operations Centre, 1 to 3 PM

March 28 Special Committee of the Whole Meeting, Municipal Offices, 1:30 PM

April 4 Special Committee of the Whole Meeting: Budget Report, Municipal Offices, 1:30 PM

April 19 Council Meeting: Final Budget Approval, Municipal Offices, 7 PM

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Thank you & Questions