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2017 Proposed Budget Booklet

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2017 Proposed Budget Booklet 2017 Proposed Business Plan & Budget Operating, Lifecycle & Reserves As Submitted to Town Council November 8, 2016 Table of Contents 2017 Business Plan & Budget Table of Contents 1. Transmittal 2. Overview 3. Operating 4. Lifecycle 5. Reserves 6. Police and Police Services Board 7. Presentation 8. Glossary & Acronyms 2017 Business Plan & Budget The Corporation of the Town of Tecumseh November 8, 2016 Mayor and Members of Council: Re: Transmittal - 2017 Proposed Operating, Lifecycle & Reserve Budgets In accordance with Council policy and the provisions of The Municipal Act, we are pleased to submit for your consideration the 2017 Proposed Operating, Lifecycle & Reserve Budgets & Business Plans. The proposed budget, including the departmental business plans, supports the goals in the Town of Tecumseh’s Strategic Priorities as well as the Transportation, Parks and Recreation, and Official Plan Master Plans. The budget submission requires an additional $716,000 over the 2016 budget. This is equivalent to a 2.6% tax levy increase net of growth on the Tecumseh portion of taxes (53% of the total residential tax bill) and represents an increase in the total tax bill of approximately $85 on a property assessed at $250,000 (the average house assessed value in Tecumseh). The Proposed 2017 Operating Budget: Maintains the base 2016 levels of service Recognizes assessment growth Includes inflationary allowances Reflects the Town’s user fees Addresses contractual labour allowance Includes Capital Reserve contributions to support long-term sustainability of Town infrastructure Reflects the final phase-in reduction of the OPP Billing Model In closing, we extend our sincere thanks to the Town staff that have worked so diligently to bring forward a budget that invests in key strategic priorities to strengthen the future of the Town while also balancing affordability with the delivery of quality programs and services. We look forward to continuing to work collaboratively with Council to meet the expectations of our community. Sincerely, Tony Haddad Luc Gagnon Chief Administrative Officer Director Financial Services & Treasurer 917 Lesperance Rd. | Tecumseh ON | N8N 1W9 | P: 519-735-2184 | www.tecumseh.ca Section 2 Index Page 1. EXECUTIVE SUMMARY 3 2. ABOUT TECUMSEH 15 Community Profile 15 History of Tecumseh 15 Historical Societies 19 Twinnings 19 Tecumseh Branding 19 Corporate Motto 20 Town Characteristics 20 Ward Map 20 Tecumseh Demographics and Statistics 21 Labour/Employment Characteristics 25 Rates and Charges 26 Municipal Infrastructure 28 Citizen Satisfaction Survey 29 3. BUDGET PROCESS 30 Timelines 30 Public Input 31 Budget Development – 2017 Challenges 32 4. PREPARATION OF FINANCIAL INFORMATION 38 Financial Statements 38 Basis of Accounting 38 Basis of Budgeting 38 Long Term Financial Plan 38 Financial Information Return 39 5. 2017 BUDGET RECONCILIATION FOR PSAB ADJUSTMENTS 40 OReg 284/09 40 Budget Reconciliation 40 6. FISCAL POLICY 46 Annual Budget Development 46 Asset Management 46 Debt Management 46 Development Charges By-law 47 Lifecycle Program 47 Operating Budget Implementation and Reporting 47 Post Budget Adjustments 47 Purchasing By-law 47 Surplus/Deficit Management 48 2017 Business Plan & Budget Section 2 Index Tangible Capital Asset Accounting 48 7. SUMMARY OF FUNDS 49 Operating Fund 49 Capital Fund 49 Reserves/Reserve Funds 50 Summary of Fund Activity 50 8. FINANCIAL KEY PERFORMANCE INDICATORS 52 Financial Position 52 Operating Surplus/(Deficit) 55 Asset Consumption 57 Reserves 58 Debt 60 Taxes Receivable 62 9. MUNICIPAL PERFORMANCE MEASUREMENT PROGRAM 64 Background 64 Comments 65 General Government 66 Fire Services 67 Police Services 68 Building Permits & Inspection Services 70 Roadways 71 Bridges and Culverts 72 Winter Control 72 Conventional Transit 73 Wastewater 74 Water 75 Garbage Collection/Disposal 76 Parks & Recreation 77 Planning 79 10. ORGANIZATION CHART 80 11. STAFFING RESOURCES 81 Staffing Resources Summary 82 Recommended New Staffing Enhancements 84 2017 Business Plan & Budget Section 2 Overview Executive Summary The 2017 Business Plan & Budget represents the 2017 Operating, Lifecycle and Reserve Budgets for the Town of Tecumseh as proposed to Council on November 8, 2016. The Municipal General Tax Levy is one of three levies included in property taxes. County Tax Levy and Education Tax Levy are the other two components. The three levies combined comprise the property tax levy and are referred to as the Consolidated Tax Levy. The Estimated Consolidated Tax Levy for Tecumseh property owners for 2017 is $45,577,000, an increase of 3.0% from 2016. The Municipal General Tax Levy for 2017 is $21,394,000, an increase of 3.5% from 2016 (1.35% increase from estimated assessment growth and 2.15% increase in the tax levy). The total estimated assessment change for 2017 is 4.3%, of which 0.8% is growth and 3.5% is due to phase-in increases. The assessment growth is estimated to generate $180,000 in municipal tax revenue. The 2017 proposed budget provides for: The final year of the New OPP Billing model phase-in, which results in a significant reduction to Town policing costs. The 2017 reduction is $400,000, which represents a 1.9% reduction to the general tax levy and brings the total accumulated reductions to $1.8-million annually. The total reduction was phased-in over the course of four years (2014-2017). A $400,000 increase towards the New Infrastructure Levy (NIL), bringing the annual levy to $1,100,000, representing a 1.9% increase to the general tax levy. Initiated in 2015, the annual levy target is $1,300,000 and will help fund known near-term new capital investments. A $226,000 increase towards Lifecycle representing a 1.1% increase to the levy. This increase is required to address new asset additions and specific Lifecycle category deficiencies identified in recent study updates. Details are fully explained in section 4. Assessment growth translating into $180,000 of additional tax revenue and $100,000 in supplemental tax revenue, combining for a 1.4% decrease to the general tax levy. $13.7-million capital expenditure program Service level enhancements in some areas, including; o Increased legislative requirements and community services in Corporate Services o Addition of an Intern reporting to the CAO o Extended Parks facilities operating hours, including evenings and weekends and enhanced recreation space, particularly with respect to Lakewood Park o Additional resource hours to support Public Works - Drainage in addressing backlog of maintenance work o Increased frequency of Roadside Maintenance in rural areas of Town o Increase to garbage collection and disposal services following residential growth Some of the proposed Service level enhancements will require additional staffing resources, detailed thoroughly in section 2 (11), which will increase payroll and benefit costs by $124,000, representing a 0.6% increase to the general tax levy. $50,000 for known employee wage and benefit increases and an additional $150,000 allocation to reserves for wage and benefit adjustments representing a 1.0% increase to the levy. 2017 Business Plan & Budget 3 Section 2 Overview The goal of the municipal budget process is to produce a balanced budget while maintaining the following Town fiscal policies: The use of Reserve Funds where applicable The use of Reserves to fund one-time expenditures Debt issuance for long-term projects The 2017 budget is focused on Town strategic priorities identified in 2015 and approved through Council Resolution 87/15, which includes: Make the Town an even better place to live, work and invest through a shared vision for our residents and newcomers. Ensure that the Town’s current and future growth is built upon the principles of sustainability and strategic decision-making. Integrate the principles of health and wellness into all of the Town’s plans and priorities. Steward the Town’s “continuous improvement” approach to municipal service delivery to residents and businesses. Demonstrate the Town’s leadership role in the community by promoting good governance and community engagement, by bringing together organizations serving the Town and the region to pursue common goals. Furthermore, the Town’s budget development focuses on a multi-year approach. The current year budget was developed along with forecasts for the ensuing two years. The proposed budget requires a municipal tax levy increase of 3.5%. When phase-in and assessment growth is taken into account the average residential property assessed at $250,000 will see a $51 or 2.8% increase. The impact on the various other property classes will vary based on numerous factors. Future municipal levy increases forecast for 2018 to 2021 are 3.1%, 2.5%, 3.1% and 2.8% respectively. Table 2.1 details estimated tax levy for an average residential property valued at $250,000 experiencing phase-in assessment increase of 3%. That is, a 2017 assessed value of $250,000 would be comparable to a 2016 assessed value of $243,000. The overall impact is an $84.44 or 2.50% increase. Table 2.1 2017 2016 $ Change % Change Municipal $1,851.79 $1,801.24 $50.55 2.81% County estimate $1,168.17 $1,122.44 $45.73 4.07% Education estimate $445.00 $456.84 $(11.84) (2.59)% Total $3,464.96 $3,380.52 $84.44 2.50% 2017 Business Plan & Budget 4 Section 2 Overview Table 2.2 details estimated tax levy per $100,000 in assessment for a commercial property experiencing phase-in growth of 0.9%, which is the average for the Town commercial properties based on preliminary 2016 CVA assessment cycle figures. Based on a phase-in increase of 0.9%, 2016 comparable assessment would be $99,000. The overall impact is a $31.79, or 1.21% levy increase per $100,000 of assessed value. Table 2.2 2017 2016 $ Change % Change Municipal $801.49 $794.05 $7.44 0.94% County estimate $505.60 $494.81 $10.80 2.18% Education estimate $1,355.74 $1,342.18 $13..56 1.01% Total $2,662.83 $2,631.04 $31.79 1.21% Table 2.3 details estimated tax levy per $100,000 in assessment for an industrial property experiencing phase-in growth of 1.6%, which is the average for Town industrial properties based on preliminary 2016 CVA assessment cycle figures.
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