1 1 2016 Budget Corporate Accounts Budget Committee of the Whole February 9, 2016
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2016 Budget
Corporate Accounts
Budget Committee of the Whole
February 9, 2016
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Description
Programs and accounts that benefit the Town, as a
whole, but not specific to one department. Include:
Corporate Revenues
Corporate Expenditures
Insurance
Grants
Village of Richmond Hill BIA
Property Taxation
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Key Directions
Maintain existing services levels
Provide for approved new items and service level changes adopted in 2015
Minimize the tax rate impact
Remain true to Town of Richmond Hill’s financial principles Thorough short and long term planning
Prudent consideration of reserves
Leverage available funding sources
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Budget Summary
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2015 Approved
Budget 2016 Draft Budget
Incremental
Change
Corporate Revenues $(14,740,600) $(13,847,100) $893,500
Corporate
Expenditures 7,301,800 10,223,200 $2,921,400
Insurance 1,363,800 1,473,800 $110,000
Grants 214,800 217,200 2,400
Village of R.H. BIA - - -
Net Budget $(5,860,200) $(1,932,900) $3,927,300
Property Taxation $(95,134,600) $(96,394,700) $(1,260,100)
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Corporate Revenues (pg 4 - 5)
Proposed net revenue budget of $13.8 million (decr. $893,500)
Significant Items:
Transfer from Water, Wastewater & Stormwater funds increased by $146,000
Investment income maintained at $6.9 million despite low-interest rate
environment (less to reserve funds)
EBC Building Rental income decreased by $42,600 due to expected vacancy
Payments in Lieu of Taxes are $39,800 higher than 2015 budget due to change
in property valuation and tax rate increases
Base Budget reflect the Tax Rate Stabilization reserve draw of $1,478,900
(equivalent to 1.58% tax rate) (2015 draw was $1,063,600)
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Special Levies/Other Items: Eliminate Growth Rate Stabilization
Budget strategy to stabilize growth revenues at the equivalent of 3%
assessment, by using the Tax Rate Stabilization Reserve (since 2008)
The strategy has cost the Reserve $6.4 million since 2008
The strategy was intended as a temporary measure until assessment
growth returned to 3%....that hasn’t happened
Since 2008 average annual assessment growth has been 2.01%, and has
been below 2% annually since 2012
Corporate Revenues (cont’d)
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Special Levies/Other Items: Eliminate Growth Rate Stabilization (Continued)
The purpose of the Tax Rate Stabilization Reserve is to cover one-time unforeseen
events/costs due to economic conditions, events or circumstances that would
otherwise require excessive tax rate increases (eg. 2013 Ice Storm costs)
Before any budget draws, Reserve Balance is currently $8.03 million
GFOA recommends best practice of maintaining a stabilization reserve balance of
10% of Own Source Revenues (i.e. Tax Levy)
2016 Draft Operating Budget proposes the end of the Growth Stabilization Strategy
Corporate Revenues (cont’d)
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Corporate Expenditures (pg 6 - 7)
Total proposed net budget of $10.2 million (incr. $2,921,400)
Significant Items:
Personnel Contingency at $2.2 million (incr. $1.4 million) to provide for
ongoing collective bargaining negotiations
Credit Card and Bank Fees budget has increased by $44,600 to
reflect greater level of transactions
OMB provision $200,000 (reserve funded) (unchanged)
Provision for the Public Art contribution is not included in the Draft
2016 Operating budget
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Corporate Expenditures (cont’d)
Council Approved Service Level Changes (CASLC):
Personnel Contingency increased by $41,300 to provide for potential
corporate impact of various collective bargaining negotiations for new
positions approved in 2015 budget
ADP Payroll charge is included at $200,000 to account for the payroll
processing fee for the system implemented in 2015
New Items:
Personnel Contingency Account to be increased by $27,400 to
provide for potential corporate impact of negotiated settlements for
new positions
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Special Levies/Other Items: Capital Asset Sustainability Contribution
Throughout the Capital Workshop and Capital Budget process the concern of
the life of the Town’s Capital Reserve Funds was presented
Currently contribute $7.9 million to the Capital Reserve Funds through the
operating budget
Based on most recent 10 year Capital Forecast these reserve funds will be
depleted by 2021 as the average annual forecasted spend from these
reserves is $23 million (three times the annual contribution)
As presented to BCW in November, the goal is to move to a “Pay-As-You-Go”
level in which budget contributions equate to the forecasted average spend
Corporate Expenditures (cont’d)
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Special Levies/Other Items: Capital Asset Sustainability Contribution (Continued)
BCW passed on motion for an annual combined contribution
increase to the Capital Reserves of 1.25% each of the next ten
years. This would extend the life of these reserves to 2026
Committee requested a further review to see how the tax impact
could be reduced but still provide reasonable life extension
The Draft 2016 Operating Budget provides for a 1% ($949,600)
increased contribution to the Capital Reserve Funds and if done at
this level each of the next ten years, will extend the life of the
reserves to 2025
Corporate Expenditures (cont’d)
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Special Levies/Other Items: Capital Asset Sustainability Contribution (Continued)
Corporate Expenditures (cont’d)
Municipal (including
Capital Increase)Increase for Capital
Mississauga 5.00% 2.00%
Whitchurch-Stouffville 3.47% 1.50%
Burlington 3.14% 1.44%
Brampton 4.90% 1.30%
Markham 2.44% 1.00%
Oakville 2.40% 1.00% Capital Levy
Aurora 1.80% 1.00%
Newmarket 2.99% 0.80% Asset Replacement Fund
Milton 7.00% 0.50%
Capital Infrastructure and Debt Repayment Levy
Infrastructure Repair and Replacement
Increase in Capital Levy for infrastructure Renewal (from 0.5% to 1%)
Renewal of the City's Infrastructure
Staff proposed an incremental 1% infrastructure surcharge per year
starting 2016 Budget. The Budget Committee directed Staff to report
back in Spring 2016 with additional information.
Increased Contribution to Infrastructure reserves
Capital Reserves
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Special Levies/Other Items: Decrease Personnel Gapping Factor
Provisional budget factor to recognize the savings in salaries and benefits
that occurs from staff turnover or long-term disability. Assumed savings are
derived from the time it takes to recruit
The 2015 operating budget has a gapping factor of $1.5 Million
The need for continuity of service provision leads to the use of immediate
temporary backfill until full-time recruitments are complete, which hinders
the ability to meet this budget
The 2016 budget proposes a $270,000 reduction (to $1.23 million), the first
of a three year plan to reduce the personnel gapping to $800,000 by 2018
The goal is to move this budget to a sustainable level of 1% of the Corporate
Full-time salaries & benefits budget by 2018
Corporate Expenditures (cont’d)
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Insurance (pg 8)
• Provides corporate-wide insurance risk management program
designed to protect and conserve Town resources from unanticipated
losses
Significant Items:
$1,473,800 net budget (incr. $110,000)
Insurance Premiums increased by $176,500 from the 2015 level
reflective of greater number of facilities/values, and inclusion of
Cyber Insurance for the first time
Adjuster & Legal Fees are maintained at $175,000 (unchanged)
Claims expenses (fully funded from the Insurance Reserve Fund)
are being maintained at 2015 level of $135,000
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Other Budgets
Grants (pg 9 - 10) - includes Ann Gold Scholarships, Seniors Tax Assistance Grant, Disability Initiatives Grant, Road Watch Grant and Heritage Grant
Total budget of $217,200 (incr. $2,400)
Village of Richmond Hill BIA - net zero budget due to
locally applied levy
• February 16th presentation to BCW
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Road Watch Grant
History:
Up to and including 2013, Road Watch also received annual grant from
the Ministry of Transportation as well as private sponsorship funds
2016 Draft Budget also includes $3,500 Grant
Road Watch Committee requesting $8,417.75 (COW February 1, 2016)
Recommend that the unused budget of 2015 be carried forward to 2016,
for a total amount of $7,000 grant for the Committee to use. And annually
prior to Operating Budget approval, Road Watch present the coming
year’s program plans for use of budget funds.
Year Budget Actual
2013 3,500$ 3,500$
2014 3,500$ -$ Part of Year End surplus
2015 3,500$ -$ Can be carried forward to 2016
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Seniors Tax Assistance Grant
65 years of age or older, and own home at least one year, and in
receipt of Federal Guaranteed Income Supplement
Since 2008 Town has annually increased grant level by the same
rate as tax increase
Staff anticipate up to 460 applications in 2016 (budget of $158,700)
Taxation Grant Approved Total
Year Amount Applications Expense
2011 $307 425 130,411$
2012 $316 438 138,408$
2013 $324 460 149,016$
2014 $331 447 147,950$
2015 $345 447 154,215$
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Property Taxation (pg 11) Includes property tax levy and supplementary taxes (i.e. in-year tax levy
additions)
Significant Items:
• Property tax levy reflects 1.42% assessment growth ($1,330,100 additional revenue)
Special Levies/Other Items: Decrease Supplementary Taxation
2015 Budget at $1.5 million is not generally attained. The average annual
supplementary taxation results over the last four years are $1,280,000
The draft 2016 Operating Budget proposes a $70,000 reduction (to
$1,430,000) and a phased plan to reduce the budget to a sustainable level of
$1.3 million by 2018
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Municipalities with Special Levies
Special Levy
(Municipal %)Special Levy
York Region:
Markham 0.16% December 2013 ice storm continuing costs (year 3 of 3)
Newmarket 0.80% Asset Replacement Fund
Aurora 1.00% Increased contribution to Infrastructure reserves by 1% of tax levy
Whitchurch-Stouffville 1.50% Capital Reserves
East Gwillimbury 1.75% Dedicated increase of 1.75% to enhance community safety
Peel Region:
Mississauga 2.00% Capital Infrastructure and Debt Repayment Levy
Brampton 1.30% Infrastructure Levy
Caledon 0.60% Broadband Levy of 0.60%
Halton Region:
Burlington 1.44% Capital Infrastructure
Milton 0.50% Capital Levy for infrastructure Renewal
Halton Hills 0.20% Fire Services Levy
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Summary Corporate Accounts net revenue budget of $1.9 million ($3.9 million
decrease from 2014)
Property taxation provides $96.4 million funding (about 61% of total budget)
Cost Expectations:
Provision for ongoing Labour negotiations at $2.2 million (incr. $1.4 million)
Insurance premiums have been budgeted at $1.7 million (incr. $176,500)
Special Levies/Other Items:
Eliminate Growth Rate Stabilization
Capital Asset Sustainability Contribution
Decrease Personnel Gapping Factor
Decrease Supplementary Taxation
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That the 2016 draft operating budget for the Corporate
Accounts be received and consolidated by Financial
Planning staff for presentation to the meeting on
February 23, 2016.
Recommendation
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Questions
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