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Budgetaudit Advisory Board 2016.Pdf[Icon] Budget/Audit Advisory Board Meeting #1/16 was held at TRCA Head Office, on Friday, April 1, 2016. The Chief Executive Officer Brian Denney, called the meeting to order at 9:35 a.m. PRESENT Colleen Jordan Member Gino Rosati Member John Sprovieri Member ABSENT Maria Augimeri Chair RES.#C1/16 - ELECTION OF CHAIR Moved by: Gino Rosati Seconded by: John Sproveri THAT Colleen Jordan be elected Chair to conduct Budget/Audit Advisory Board Meeting #1/16, held on April 1, 2016. CARRIED ______________________________ RES.#C2/16 - MINUTES Moved by: Gino Rosati Seconded by: John Sprovieri THAT the Minutes of Meetings #2/15, held on June 26, 2015 and #3/15, held on October 16, 2015, be received. CARRIED ______________________________ (a) A presentation by Rocco Sgambelluri, Chief Financial Officer, TRCA, in regard to item 8.1 - 2016 Budget, Operating and Capital. RES.#C3/15 - PRESENTATIONS Moved by: Gino Rosati Seconded by: John Sprovieri THAT above-noted presentation (a) be received. CARRIED ______________________________ 1 Section I – Items for Authority Action RES.#C4/16 - 2016 BUDGET, OPERATING AND CAPITAL Recommends approval of the 2016 operating and capital budget. Moved by: Gino Rosati Seconded by: John Sprovieri THE BOARD RECOMMENDS TO THE AUTHORITY THAT WHEREAS the Conservation Authorities Act (CA Act) provides that a conservation authority, in establishing its annual levy, shall have the power to determine the proportion of the total benefit afforded to all the participating municipalities that is afforded to each of them; THEREFORE LET IT BE RESOLVED THAT, subject to such regulations under the Conservation Authorities Act as may be approved by the Lieutenant-Governor-in-Council: (i) all participating municipalities be designated as benefitting for programs included in the 2016 Operating Budget; (ii) Toronto and Region Conservation Authority's (TRCA) share of the cost of the programs included in the 2016 Operating Budget shall be raised from the participating municipalities as part of the general levy; (iii) the 2016 general levy be apportioned to the participating municipalities in the proportion that the modified current value assessment of the whole is under the jurisdiction of TRCA, unless otherwise provided in the levy or a project; (iv) appropriate TRCA officials be directed to advise the participating municipalities, pursuant to the Conservation Authorities Act and the regulations made thereunder, and to levy the said municipalities the amount of the general levy set forth in the 2016 Operating Budget, including property tax adjustments and non-current value assessment (CVA) levy, and to levy the said municipalities the amount of the project and special levy set forth in the 2016 Capital Budget and in the approved projects of TRCA; THAT the 2016 Budget, Operating and Capital, and all projects therein, be adopted; THAT TRCA staff be authorized to amend the 2016 Budget, Operating and Capital to reflect actual 2016 provincial transfer payment allocations in order to set the amount of matching levy required by the CA Act; THAT the cost of property taxes imposed by municipalities be included as additional levy to the participating municipalities where the lands are located, excluding the cost of property taxes which are passed on to a third party under a lease or similar agreement; THAT, except where statutory or regulatory requirements provide otherwise, TRCA staff be authorized to enter into agreements with private sector organizations, non-governmental organizations or governments and their agencies for the undertaking of projects which are of benefit to TRCA and funded by the sponsoring organization or agency, including projects that have not been provided for in the approved budget; 2 THAT, as required by Ontario Regulations 139/96 and 231/97, this recommendation and the accompanying budget documents, including the schedule of matching and non-matching levies, be approved by recorded vote; THAT the presentation of 2015 budget comparisons and related actuals be amended to conform to the presentation adopted in the 2016 budget document; AND FURTHER THAT authorized TRCA officials be directed to take such action as may be necessary to implement the foregoing, including obtaining approvals and the signing and execution of documents. CARRIED RATIONALE Enclosed is the recommended 2016 Budget, Operating and Capital. The budget will be presented to the Authority for approval at its meeting scheduled to be held on April 1, 2016. Municipal Approvals Estimates are prepared in the summer and fall of each year for submission to TRCA's municipal funding partners. Staff meets with municipal staff as required by the budget processes and schedules as set out by each participating municipality. Presentations are made to municipal finance staff and the committees and councils of the funding partners as required. In the case of Peel Region, TRCA works closely with staff at Credit Valley and Halton conservation authorities to align budget information and requirements. A similar process occurs with York Region where TRCA works closely with the Lake Simcoe Region Conservation Authority. In Durham Region, TRCA staff works with five conservation authorities to align budgets and financial submissions to meet the Region of Durham requirements. TRCA's submissions to the City of Toronto for capital and operating levy are reviewed with Finance and Toronto Water staff. The funding identified in the recommended apportionment of the levy reflects the amounts that the municipal funding partners have approved in their 2016 budgets. Contributions from the City of Toronto and the regional municipalities of Durham, Peel and York have received council approval. The Township of Adjala-Tosorontio and the Town of Mono have been advised of TRCA's levy request. Notice of Meeting As required by regulation, TRCA has provided 30 days written notice to its member municipalities of the date of the meeting at which the Authority will consider the municipal levy. At the April 1, 2016 Authority meeting a recorded vote on the budget recommendations, including adoption of the non-matching municipal levy, is required. The weighted voting procedure prescribed by regulation will be used, if necessary. MNRF Transfer Payments The 2016 provincial transfer payments to conservation authorities, which must be matched with levy, have not been announced. The 2016 operating budget includes a provision for Ministry of Natural Resources and Forestry (MNRF) transfer payments at an amount equal to the funding received in 2015 or $774,000. 3 2016 Budget Presentation In order to meet the provisions of the Conservation Authorities Act and the regulations made thereunder, it continues to be necessary to distinguish between general levy (operating) and benefitting levy (capital and special projects.) However, due to the unique budgetary requirements of each of the four major participating municipalities, the distinction between operating and capital expenditures has been blurred over the years. For this reason the presentation adopted in the 2016 budget continues to focus on the nine service areas of the TRCA business plan, regardless of the underlying nature of the funding. Commencing in 2016, the budget document includes the following additional components: an expenditure summary which is aligned with the financial statement presentation (i.e., includes amortization, but excludes planned expenditures on tangible capital assets); a summary of expenditures by object classification, also consistent with proposed financial statement presentation; an accompanying document entitled, “Business Synopsis and Rationale” which describes the 32 programs of TRCA in greater detail (Attachment 2). Further, during the compilation of the 2016 budget staff became aware of certain adjustments in presentation required to better reflect the work contained in each service areas. Consequently, the 2016 budget and actuals presentation has been modified to conform to the presentation adopted for 2016. Operating Budget - Overview of Key Issues Salary/Wage Guideline In October 2015 the Authority adopted a staff recommendation for a wage increase of 2%, effective April 3, 2016. TRCA salary and wage adjustments over the last five years have averaged 2.2% per year, on a simple average basis, as follows: 2016 - 2% 2015 - 2% 2014 - 2% 2013 - 2% 2012 - 3% Staffing Levels and Costs The full time equivalents (FTE) included in the operating budget are projected to be 426.6 for 2016 as compared to 418.6 for 2015. Including the FTE count within the capital program, the 2016 total FTE count is estimated at 716.8 (695.9 for 2015). A summary of FTEs by service area is found on page 5, in section I of the budget document. Wage and benefit costs within the operating budget amount to $34.0 million or 74% of the gross expenditures, representing an increase of about $1.5 million or 4.7% over 2015 budget. This amount includes the 2% cost of living adjustment noted above as well as above average increases in the cost of the TRCA employee benefit program. Also provided for are the cost of the new FTEs as noted above and the annualization of positions hired in 2015. Gross Operating Expenditures/Revenues The 2016 gross operating expenditure budget is $46.0 million, an increase of $3.1 million or 7.1% over the 2015 budget. The increase in expenditures will be financed by additional general levy of $0.3 million; additional revenues of $2.1 million and net reserve contributions of $0.7 million. 4 Municipal Levy Each of TRCA's participating municipalities has its own unique budget requirements and annual budgetary pressures. TRCA has met each of the individual participating municipality’s requirements. TRCA’s funding "formula" has been designed to achieve the flexibility required in meeting individual municipal partner funding guidelines. To this end, the 2016 operating levy includes a provision, totaling $415,600 (2014 - $359,200) referred to as "Non-CVA Levy". Under the provisions of the Act, TRCA makes a general levy against all of its participating municipalities to fund its general operating requirements.
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