2019 Operating & Capital Budget 2020 2028 Capital Budget and - - PowerPoint PPT Presentation

2019 Operating & Capital Budget

2020 – 2028 Capital Budget and Forecast

Presented by: Keshwer Patel

Commissioner, Corporate Services, Chief Financial Officer & Treasurer

December 10, 2018

What’s Happening in Waterloo?

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What’s Happening in Waterloo & our Region?

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Delivering on Council’s Vision

Help us define Waterloo’s priorities for the next 4 years. Questionnaire available till Dec 21, 2018 at engagewr.ca/waterloo

Our Share of the Pie

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Based on the data from the Fraser Institute, the average income in 2018, of a family in Ontario is $121,649. On this income, the family would pay $52,696 in taxes for an effective tax rate of 43.3%.

https://www.fraserinstitute.org/sites/default/fil es/tax-freedom-day-2018.pdf

This includes income tax, payroll tax, sales tax, property tax, fuel tax, motor vehicle license tax ……. City of Waterloo share = 2.9% or 2.9 cents for every tax $

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Our Share of the Property Tax Bill

Tax Funded Services ($74.8 million)

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FIRE RESCUE & MUNICIPAL ENFORCEMENT PARKS, RECREATION, COMMUNITY & CULTURE OPERATING TRANSFERS TO CAPITAL/RESERVES TRANSPORTATION & DEVELOPMENT SERVICES FACILITY DESIGN & MANAGEMENT CIVIC ADMINISTRATION WATERLOO PUBLIC LIBRARY

$19.3 million

Prevention and emergency response services that enhance public safety & maintain community standards through education, mediation and enforcement.

$13.6 million

Management of parks & open spaces, fields and trails to support outdoor recreation. The development and promotion of programs for community activities and ensure that culture & heritage are nurtured.

$12.5 million

Transfer of operating funding to reserves and reserve funds for capital rehabilitation and new investments in city infrastructure.

$8.8 million

Includes the city’s transportation network which is made up of public parking, traffic operations and winter control. The provision of engineering and management services to other divisions, the establishment of development regulations and the review and processing of urban planning applications.

$7.9 million

Ensure the smooth, safe and reliable operations of all city-

• wned buildings, vehicles and
• equipment. Maintenance of the

structural, architectural, mechanical, electrical and security service and systems of all city-

• wned properties.

$6.9 million

Support services for program delivery such as human resources, finance, legislative services, information technology, procurement, communications & legal.

$5.6 million

Supports and fulfills literacy needs

• f the community, including digital

literacy and provides crucial settlement services to newcomers.

Note: some numbers may not add due to rounding

Enterprise Funded Services ($78.1 million)

8 $3.2 million

Ensure safe and healthy buildings through the Building Code Act.

$1.8 million

Cemetery services including the operation

• f a crematorium and cemetery grounds

maintenance.

$66.6 million

Distribution of safe and reliable drinking water, collection of sanitary wastewater and stormwater management services.

$1.6 million

Programs that regulate rentals for safety and compliance.

$1.5 million

The City of Waterloo's parking regulations are designed to keep you safe while effectively utilizing our on-street parking spaces. BUILDING STANDARDS CITY UTILITIES COMPREHENSIVE BUSINESS LICENSING RENTAL HOUSING LICENSING CEMETERY SERVICES PARKING SERVICES

$0.4 million

Programs that regulate businesses for safety and compliance.

Note: Not included on this slide are smaller enterprises such as local area health networks, regional road recoveries and internal fleet operations which total $3.0 million.

City of Waterloo 2019 Proposed

Gross Operating Budget

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Net Property Tax, $74.8, 39% User Fees & Other Revenues, $39.1, 20% Enterprises (Revenues & Transfer From Reserves), $78.1, 41% Enterprises (Expenses & Transfer to Reserves), $78.1, 41% Civic Administration, $28.1, 14% Parks, Recreation, Community and Culture, $24.3, 13% Fire Rescue and Municipal Enforcement, $21.4, 11% Operating Transfers to Capital/Reserves, $13.0, 7% Transportation and Development Services, $11.7, 6% Facility Design and Management, $9.8, 5% Waterloo Public Library, $5.6, 3%

Where Funding Comes From $191.9 million Where Funding Goes $191.9 million

Investing in Our Strategic Priorities in 2019

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Strategic Plan Link Operating Budget ($) Capital Budget ($) 2019 Total ($) Infrastructure renewal 1,099,655 57,916,635 59,016,290 Corporate excellence 667,209 3,038,999 3,706,208 Economic development 299,364 10,639,135 10,938,499 Strong community 397,837 30,348,511 30,746,348 Multi-modal transportation 13,000 2,614,088 2,627,088 Environmental leadership 1,716,368 1,059,075 2,775,443 2019 Total 4,193,433 105,616,443 109,809,876 2019 Proposed Operating & Capital Budget Expenses - Strategic Plan Link Summary

2019 Budget – “A Balanced Approach”

The proposed budget reflects the priorities of the community, decisions of council, delivers on current services, addresses resource needs for growth areas and has a limited number of new services and the resources needed to keep the city in a stable financial position. Our objective is clear – continue to deliver services to support a strong, healthy green and vibrant Waterloo within the financial capacity available from the community.

THE 2019 BUDGET WILL HELP US GET THERE.

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Deliver services effectively & efficiently 2 Maintain infrastructure 3 Invest in the future 4 Sustainability

The 2019 Proposed Tax Increase

Broken Down by Budget Category

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For base budget change + operating impact of capital and growth , the proposed increase is 1.6%.

• Rolling average CPIX to August is

1.3% (1.7% actual)

• Rolling average CPIX to October is

1.4%

• Actual CPIX to October is

1.6%

Budget Category 2019 Proposed Property Tax Net ($) 2019 Proposed Property Tax (%) Base Budget 814,202 1.1% Operating Impact of Capital & Growth 400,335 0.5% Service Level Changes 188,891 0.3% TOTAL 1,403,428 1.9%

Investing in Our Tax Based Services to Citizens

Viewing Through the Lens of Our Major Service Delivery Areas

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Our History of Tax Increases 2011- 2018

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Using CPIX as the guideline, this chart shows the tax increase for base budget & operating impact of capital in relation to average inflation.

Our History of Tax Increases 2011- 2018

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For 2011 to 13,

• ur tax

increase has been close to average CPIx inflation; For 2014 & 2015,

• ur tax increase

has been well below this inflation level. The years 2016, 17 & 18 have been a catch up.

Where are the Inflationary Indices Trending Now?

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Our Capital Investment for 2019 - 2028

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2019-2028 Projected Capital Expenditures by Strategic Priority Area

Criteria # of Projects Total $ % of 2019 Budget Dollars # of Projects Total $ % of 2020- 2028 Budget Dollars # of Projects Total $ % of Total Budget Dollars INFRASTRUCTURE RENEWAL 97 57,916,635 $ 55% 164 333,075,121 $ 61% 261 390,991,756 $ 60% CORPORATE EXCELLENCE 20 3,038,999 $ 3% 26 27,763,974 $ 5% 46 30,802,973 $ 5% ECONOMIC DEVELOPMENT 8 10,639,135 $ 10% 18 44,955,632 $ 8% 26 55,594,767 $ 8% STRONG COMMUNITY 30 30,348,511 $ 29% 68 108,358,675 $ 20% 98 138,707,186 $ 21% MULTI-MODAL TRANSPORTATION 12 2,614,088 $ 2% 19 21,030,234 $ 4% 31 23,644,322 $ 4% ENVIRONMENTAL LEADERSHIP 9 1,059,074 $ 1% 16 13,966,297 $ 3% 25 15,025,371 $ 2% Total Capital Budget 176 105,616,443 $ 100% 311 549,149,932 $ 100% 487 654,766,375 $ 100%

2019 2020-2028 Total

Our 2019 Proposed Capital Budget

Prioritized with our AMP

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Our 2019 Proposed Capital Budget

By Service Area

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What Does This Mean For Our Reserves Funding The Capital Program?

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Our Tangible Capital Assets as at year end 2017 ( $1.1 Billion)

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History Of Public Infrastructure Ownership

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Municipalities have 67% of the assets but 8% - 9% of the tax revenues

Addressing the Infrastructure Deficit

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Asset Management Plan (AMP)

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• In November 2016, Asset

Management Plan developed, integrating various existing data sets

• n asset condition and life cycle.
• Key Findings:
• Shortfall of $14 - $17 million annually on tax funded

capital infrastructure

• Shortfall of $6 million annually on city utility

infrastructure

• Need to develop a sustainable funding strategy

Asset Management Plan (AMP)

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Reference: Report IPPW2016-099 dated Nov 14, 2016

Asset Management Plan (AMP)

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Reference: Report IPPW2016-099 dated Nov 14, 2016

Long Term Financial Plan (LTFP)

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• Long Term Financial Plan developed in 2018
• Ref CORP2018-011 to FSP on April 16, 2018
• Took a holistic view of financial needs of city including

infrastructure, operational and anticipated growth needs

• Financial model with a 25 year outlook developed.
• Financial Model was integrated with the data from the

Asset Management Plan developed in the prior year.

• Model factored in anticipated growth related capital (eg

fire station), operating impact of capital projects, and inflationary trends and resulting financial requirements.

Long Term Financial Plan (LTFP)

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The Long Term Financial Plan recommended:

• 1. Establishing a sustainable funding source for capital

reserves supporting life cycle replacement of assets

√ Increased share of Assessment growth allocated to Capital infrastructure Reinvestment Reserve Fund (CIRRF) √ Increased portion of annual surplus contributed to CIRRF

• 2. Consolidation of reserves to provide flexibility √

And the 2019 – 2028 Capital budget & forecast before council is based on the priorities established through the AMP .

What Else is on the “Financial” Horizon?

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• Implementation of Long Term financial plan recommendations

– Clear focus on our capital project priorities – Funding strategy to address gap of $14 - $17 million on tax funded infrastructure + $ 6 million on utility infrastructure – Needs to be balanced with funding for projects that grow and invest in our community, maintain our heritage

• East side library financial commitments through assessment growth and

tax increase

• Changing market and competitive factors to be considered e.g. opening
• f market to funeral homes for operating crematoriums
• With autonomous cars, what are the future parking related needs?
• With growth is there a need for additional city facilities with related

capital and operating costs, to be funded

• Working with the Region and addressing housing affordability

What is our 2019 Proposed Budget Impact?

30 $ Impact % Impact *Property Tax Increase - City of Waterloo 24.79 $ 1.9% **City Utilities Increase to Average Household - City Portion 27.39 $ 2.7% Total Increase to Average Household - City of Waterloo 52.18 $ 4.6% City Utilities Increase to Average Household - Region Portion 20.79 $ 2.0% Total Annual Increase to Average Household 72.97 $

** Based on average water consumption of 17 m3 per month ** Based on Medium Residential Stormwater Category

2019 Proposed Operating Budget Annual Impact per Average Household

2019

* Based on 2018 average assessed value of $383,930 as provided by the Region of Waterloo

How Do We Compare With Our Peers?

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Source BMA Management Consulting Inc., Municipal Study - 2017

How Do We Compare With our Peers?

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Source BMA Management Consulting Inc., Municipal Study - 2017

How Do We Compare With our Peers?

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Looking at total annual municipal taxes and water rates for a detached bungalow, the 2017 taxes and water rates that a similar household will pay in Waterloo is less than Cambridge and Kitchener. Even with the higher proportion of Regional tax burden (due to higher property values) the city still had an

• verall lower tax than the other two

municipalities by having lower local taxes and lower water/waste water charges.

Source Information: Local, region and education values from 2017 BMA Management Consulting Inc., municipal study.

$4,365 $4,460 $4,593

2019 Operating & Capital Budget

2020 – 2028 Capital Budget and Forecast

Questions ?