B u d g e t C a p i tal Wo r k s B u d g e t - - PDF document

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C a p i tal Wo r k s B u d g e t 2 5 B u d g e t

The Government Finance Officers Association (GFOA), with members representing the United States and Canada, has accorded the Ville de Montréal its 2004 Distinguished Budget Presentation Award. To earn this annual award, a public administration must produce documents that fulfill all the criteria for materials that combine general policy statements with information

• n financial activities and planning wich also may used as communications tools.

Moreover, the GFOA jury described the Montréal budget documents as exceptional general policy statements and operations guide. The Montréal municipal administration feels that these budget documents respect the same criteria and intends to submit them for the 2005 Award.

Ville de Montréal

2005 Budget 2005-2007 Three-Year Capital Works Budget

Adopted by the Montréal City Council December 14, 2004 Prepared by the Service des finances

Presentation of the budget

1 WEB PAPER

USER GUIDE TO THE DIFFERENT VOLUMES OF THE BUDGET The 2005 Budget documents will be distributed to some users in printed and in electronic formats and in French or English. In other cases, these texts will only be available from the finance department’s Web site at ville.montreal.qc.ca/finances. These documents contain the following information:

• 1. 2005 Budget and 2005-2007 Three-Year Capital Works Budget

(English and French): printed and Web versions Presentation of the budget: contains messages from the mayor, the chairman of the executive committee, the director general, the statement of achievements and highlights of the 2005 Budget, as well as a breakdown of municipal expenditures in dollar terms. Business plan: includes a statement of the guidelines and strategies that will be deployed by the administration to meet long-term goals. Profiles of Montréal: reveals different facets of the city, outlines its political organization and serves as an economic portrait of Montréal. Budget by activity: illustrates the budgetary assumptions that have been employed in producing the budget, the Certificate of the Treasurer and Director General responsible for the Finance Department who guarantees both the necessity and availability of funds assigned in fiscal 2005 to debt service payments and obligations under law and pursuant to decisions. Budget by business unit and by expenditure item: describes how skills are shared within the city, methods of producing the borough budgets and the budget framework applied to the corporate departments. This budget presents business unit budgets and revenues. Fiscal Situation: primarily discusses tax parameters and tax variations. The Three-Year Capital Works Budget: presents the investments the City intends to make, in view of maintaining and developing its infrastructure over the next three years. The program also presents investments by borough and by corporate department. Debt and Financial portrait: contains a portrait of the city’s indebtedness and the city of Montréal’s debt service. Appendices: contains the accounting and budgetary policies that the city has adopted in preparing the budget, budget policies, a statement of results from water management efforts, the 2004 Budget process schedule and a list of definitions, abbreviations and acronyms that have been used.

2005 Budget and 2005-2007 Three-Year Capital Works Budget

2 WEB WEB WEB

• 2. Budget by borough and by corporate department: Web only

Borough: organizational chart, profile of the borough, business plan and budget choices, revenues and expenditures by activity and the investment plans of each borough. Corporate department: primary mission and activities, business plan and budget choices, revenues and expenditures by activity and the investment plans of each department.

• 3. Supplementary Information Book: Web only

Montréal’s current economy Principal aspects of Montréal’s strategy for economic development Montréal’s new urban plan The recovery plan for water-related infrastructure The road network infrastructure The Policy for protecting and enhancing the natural environment Principal aspects of the proposed cultural policy The heritage policy The Société de transport de Montréal and its financial stakes Legislative changes in 2004: major municipal reorganizations (bills 9 and 33) List of topics previously covered in the Supplementary Information Book and the Economic and Budgetary Information Book

• 4. Miscellaneous: Web only

The city’s business plan The city’s management framework Financial and budgetary policies Information on taxation from prior years Prior budgets and three-year capital works programs Prior and current annual and financial reports

Documentation from prior years

• 5. Quick references

Message from the mayor and decision makers..................................................................................9 Highlights .........................................................................................................................................19 Organizational chart.........................................................................................................................49 Statement of financial activities........................................................................................................63 Workforce and compensation ........................................................................................................148 Tax rates........................................................................................................................................156 Change in the assessment roll...................................................................................................... 177 Real-estate projects ...................................................................................................................... 189 Measurements of performance ..........................................................................................Appendix 4 Definitions, abbreviations and acronyms ............................................................ Appendices 6 and 7

Presentation of the budget

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TABLE OF CONTENT 2005 BUDGET AND 2005-2007 PTI PRESENTATION OF THE BUDGET

User guide to the different volumes of the budget ..................................................................................... 1 Table index ............................................................................................................................................... 5 Figure index ............................................................................................................................................... 7 Message from the Mayor and the Chairman of the Executive Committee ................................................. 9 Message from the Director General ........................................................................................................... 13 List of achievements ................................................................................................................................. 17 Highlights ................................................................................................................................................... 19 Use of each dollar collected ....................................................................................................................... 23

BUSINESS PLAN ....................................................................................................................................... 25 PROFILES OF MONTRÉAL

Montréal Facts and Figures ....................................................................................................................... 37 Political organization .................................................................................................................................. 39 Members of the City Council and the boroughs councils ........................................................................... 41 Members of the Executive Committee ...................................................................................................... 44 The Strategic Committees ......................................................................................................................... 45 Standing committees of Council and the Commission de la sécurité publique .......................................... 46 Timeline .....................................................................................................................................................47 Administrative organization ....................................................................................................................... 49 Map of Montréal and its boroughs .............................................................................................................. 51 Economic Portrait ...................................................................................................................................... 53

BUDGET BY ACTIVITY

Key factors used in formulating the 2005 Budget .................................................................................... 57 Certificate of the Principal director and Treasurer ..................................................................................... 59 Statement of financial activities ................................................................................................................. 61 Analysis of financial activities – revenues ........................................................................................................................................... 65 – operating expenditures and other financial activities ....................................................................... 79 Analysis of allocations ............................................................................................................................. 104

BUDGET BY BUSINESS UNIT AND EXPENDITURE ITEM

• Budget by business unit

Organizational structure ......................................................................................................................... 107 The distribution of competencies ............................................................................................................ 109 Budget by organizational structure ......................................................................................................... 113 Boroughs budgets .....................................................................................................................................117

2005 Budget and 2005-2007 Three-Year Capital Works Budget

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The budget of corporate department .......................................................................................................123 The other budget item ...............................................................................................................................131 – The commons expenditures ............................................................................................................131 – The financial expenditures ...............................................................................................................134 – The contributions expenditures ........................................................................................................135 – Cancellation of internal transactions ...............................................................................................141

• Budget by expenditure item

Analysis of expenditure item .....................................................................................................................145 – Remuneration .................................................................................................................................147 – Change in size of workforce ............................................................................................................148 – Other expenditure items ..................................................................................................................151

FISCAL SITUATION

Montréal Taxation in 2005 .......................................................................................................................153 Tax parameters in 2005 ............................................................................................................................155 Variations in tax burden ...........................................................................................................................165 Evolution of the assessment roll .............................................................................................................. 177

2005-2007 THREE-YEAR CAPITAL WORKS BUDGET

Issues, general, guidelines and priorities for 2005 ...................................................................................183 Balance sheet of accomplishments in 2004 ............................................................................................. 185 Overview of the three-year capital works budget .....................................................................................187 2005-2007 Capital works budget highlights .............................................................................................188 Investments analyses ............................................................................................................................. 189 Analysis of financing methods ................................................................................................................ 204 Impact on the operating budget ................................................................................................................207 The projects and investments of each of Montréal’s 27 boroughs ........................................................... 209 Projects and investments of each of Montréal’s corporate departments ..................................................239

DEBT AND FINANCIAL PORTRAIT

Indebtedness ...........................................................................................................................................253 The financial portrait .................................................................................................................................257

APPENDICES

1 – Presentation format for budget information and standard accounting practices ................................. 1.1 2 – Budget management framework and budgetary policies ................................................................... 2.1 3 – Implementation of an innovative water management policy ............................................................... 3.1 4 – Improved services to citizens ............................................................................................................. 4.1 5 – Budget process .................................................................................................................................. 5.1 6 – Glossary ............................................................................................................................................ 6.1 7 – Index of acronyms, abbreviations and initialisms ............................................................................... 7.1

Presentation of the budget

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TABLE INDEX

Table 1 Statement of financial activities ................................................................................................ 63 Table 1.1 Statement of surplus and Reserved Funds .............................................................................. 63 Table 2 Taxes ....................................................................................................................................... 66 Table 3 Payments in lieu of taxes .......................................................................................................... 68 Table 4 Other revenues from local sources ........................................................................................... 70 Table 5 Transfers ................................................................................................................................. 73 Table 6 Government subsidies for capital spending .............................................................................. 75 Table 7 Government subsidies to repay operating expenditures ...........................................................76 Table 8 Specific revenues transferred to investment activities .............................................................. 77 Table 9 General administration ............................................................................................................. 81 Table 10 Public security .......................................................................................................................... 85 Table 11 Transportation ......................................................................................................................... 87 Table 12 Environmental hygiene ............................................................................................................. 90 Table 13 Health and welfare .................................................................................................................... 93 Table 14 Urban planning and development ............................................................................................ 95 Table 15 Recreation and culture ............................................................................................................ 97 Table 16 Electricity ................................................................................................................................ 100 Table 17 Financing Costs ..................................................................................................................... 101 Table 18 Other Financial Activities ....................................................................................................... 103 Table 19 Allocations .............................................................................................................................. 105 Table 20 Summary of the respective jurisdictions, competencies and duties of the boroughs and the corporate departments .....................................................................................................109 Table 21 Summary of respective responsibilities ..................................................................................111 Table 22 2005 Budget forecasts for business unit ..................................................................................114 Table 23 Major items affecting the growth of the expenditures budget for corporate departments ........123 Table 24 Non-fiscal revenue categories .................................................................................................127 Table 25 Common expenditures ............................................................................................................131 Table 26 Other common expenditures ...................................................................................................133 Table 27 Financial expenditures .............................................................................................................134 Table 28 Contributions to corporations, organizations and other major partners ..................................135 Table 29 Contributions to paramunicipal corporations ...........................................................................138 Table 30 Contributions to other organizations ........................................................................................139 Table 31 Cancellation of internal transactions ........................................................................................141 Table 32 Analysis of operating expenses by item and other financial activities ......................................146 Table 33 Variance in total wage bill .......................................................................................................147

2005 Budget and 2005-2007 Three-Year Capital Works Budget

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Table 34 Analysis of remuneration and employer contributions ............................................................148 Table 35 Distribution of human resources according to the organizational structure ............................150 Table 36 Adjusted assessed property value calculation for 2004-2005-2006 ........................................154 Table 37 General 2005 Property Tax Rates by Property Category .......................................................156 Table 38 Average 2005 Cumulative Rates - Residual Property Category ..............................................158 Table 39 Average 2005 Cumulative Rates - Properties with six or more units........................................159 Table 40 Residential Property User Fees for Fiscal 2005 ......................................................................160 Table 41 Average 2005 Combined Non-Residential Property Rates .....................................................162 Table 42 Non-Residential Property User Fees for Fiscal 2005................................................................163 Table 43 Tax Variation from 2004 to 2005 in the City of Montréal’s Different Boroughs .......................167 Table 44 Tax Variation and Levels from 2004 to 2005 in the City of Montréal’s Different Sectors .........168 Table 45 Distribution of Tax Burden by Sector Pursuant to the Charter Category: Residual...................170 Table 46 Distribution of Tax Burden by Sector as per the Charter Category: Six or More Dwellings ......172 Table 47 Distribution of Tax Burden by Sector Pursuant to the Charter Category: Non-Residential .......174 Table 48 Evolution of the 2004-2006 Three-Year Assessment Roll .......................................................177 Table 49 Variation in Taxable Value by Borough .................................................................................. 179 Table 50 City of Montréal property valuation roll based on category of immovable ................................181 Table 51 Taxable and non-taxable values by borough as of September 12, 2004 .................................182 Table 52 Major projects completed in 2004 ...........................................................................................185 Table 53 Contribution of the Three-year Capital Works Budget to priority issues ..................................189 Table 54 Sharing of responsibility among boroughs and corporate departments ...................................193 Table 55 Capital expenditures by business unit .....................................................................................194 Table 56 Share of investments financed by loans charged to taxpayers (budget allowance) .................195 Table 57 Capital expenditures by municipal functions ...........................................................................197 Table 58 Capital expenditures by type of business unit and by municipal functions .............................199 Table 59 Capital expenditures by type of business unit and asset category ..........................................200 Table 60 Investment expenditures by investment objective and asset category ................................... 202 Table 61 Summary of financing methods ...............................................................................................204 Table 62 Summary of impacts on the operating budget ........................................................................ 208 Table 63 Debt service ............................................................................................................................ 254 Table 3.1 Water management - Statement of forecast expenditures and revenues .................................3.3 Table 4.1 Summary of performance benchmarks by borough and by function .........................................4.3

Presentation of the budget

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FIGURES INDEX Included in the budget highlights

• Annual variation of the budget .............................................................................................................. 20
• Variation of residential tax bills between 2004 and 2005 ....................................................................... 21
• Variation of non-residential tax bills between 2004 et 2005 ....................................................................22

_____________ Figure 1 Use of each dollar collected ..................................................................................................... 23 Figure 2 Revenues et allocations ........................................................................................................... 62 Figure 3 Expenditures by municipal functions......................................................................................... 62 Figure 4 Expenditures by heading ...................................................................................................... 145 Figure 5 Variation in Property Tax Burden from 2004 to 2005 .............................................................166 Figure 6 Variation of Tax Burden in 2005 - Category: Residual ............................................................171 Figure 7 Variation of Tax Burden in 2005 - Category: Six or More Units ...............................................173 Figure 8 Variation of Tax Burden in 2005 - Category: Non-Residential ................................................175 Figure 9 Variation in Taxable Value by Borough ...................................................................................178 Figure 10 Investment by type of business unit and investment objective ............................................. 187 Figure 11 Investments from 2005 to 2007 by municipal functions .......................................................... 187 Figure 12 Investments from 2005 to 2007 by asset category ............................................................... 187 Figure 13 Investment expenditures between 2005 and 2007 by asset category and investment

• bjective (protection or development) ...................................................................................203

Figure 14 Methods of investment financing by type of business unit ......................................................206 Figure 15 Net Direct and Indirect Debt (Excluding Initial Actuarial Deficit) as a Percentage of Revenues for the 2001 to 2005 Period ..................................................................................................257 Figure 16 Net Debt Service Cost as a Percentage of Operating Expenditures and Other Financial Activities for the 2001 to 2005 Period .....................................................................................258 Figure 17 Allocation of surpluses for 2001 to 2005 .................................................................................259 Figure 18 Evolution of the net direct debt and the initial actuarial deficit with and without the refinancing strategy for 2001 to 2005 .....................................................................................260 Figure 19 Evolution of the net direct debt and the initial actuarial deficit for the years 2001 to 2005.......261 Figure 20 Net Direct Debt and Initial Actuarial Deficit as a Percentage of the Harmonized Equivalent Taxable Assessment for the 2001 to 2005 Period ...................................................................262 Figure 21 Net Direct Debt and Initial Actuarial Deficit per Resident for the 2001 to 2005 Period............263 Figure 22 Taxable and non-taxable valuation for the years 2001 to 2005 ...............................................264

2005 Budget and 2005-2007 Three-Year Capital Works Budget

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Figure 4.1 Cost of snow removal per kilometre of road cleared .............................................................4.10 Figure 4.2 Average cost of snow removal per kilometre of road cleared according to borough category based on the average percentage of snow pushed or blown onto properties .......................4.12 Figure 4.3 Cost of snow removal by kilometre of roads cleared by borough, according to the percentage of snow pushed or blown onto properties ...........................................................4.13 Figure 4.4 Cost of snow removal – total for the City of Montréal – by kilometre of snow cleared .........4.14 Figure 4.5 Cost of snow removal – total for the City of Montréal – by centimetre of precipitation ...........4.15 Figure 4.6 2003 Cost of snow removal – total for the City of Montréal (Bar 1) – by kilometre of roads cleared – Compared to some other cities in Québec..............................................................4.16 Figure 4.7 2001 Cost of snow removal – Province of Ontario .................................................................4.17

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Montréal, Moving Forward

On January 1st, 2002 the citizens of the Island of Montréal were invited to take part in one of the most exciting projects we have ever undertaken as a community: to build - for ourselves and for future generations - an extraordinary city that is open to the world, strengthened by its differences and driven by the dynamism of its citizens. During the recent referendums some of our fellow citizens decided that the preservation of their assets took precedence over the creation of this new collective wealth and decided to partially reconstitute their former cities. We tried to convince them to the contrary and their decision is regrettable. While we respect their decision we must nonetheless find a way for everyone to work together in a positive manner to ensure that the agglomeration council, which will be created in 2006, will focus on the major priorities that inspired us to create this great city. We must do so because we have priorities; we have a clear vision of what needs to be accomplished to bring Montréal to the level of the great, dynamic cities in the world. Even though

• ur mission was slowed down - and even occasionally obstructed - by the futile debate over de-

mergers we have taken a strong step forward toward our collective future by following a clear plan. Even though there is a great deal left to do, we must continue to follow this plan because it yields results and is the only way to ensure our collective success. This project must become even more vibrant and more inspiring for all of us. It is through our society’s wealth, talent and diversity that we have drawn the energy we need to ensure that Montréal moves forward. Our main partner, the Government of Québec, has also accompanied us throughout this process. While recognizing its significant efforts in supporting Montréal it also must be noted that we never received certain funding that we were anticipating. As a result, this had an impact on our budget. For its part, the Government of Canada, by giving us a complete reimbursement of the GST and by now offering provincial governments and municipalities a share of the gasoline tax for municipal infrastructures and public transit has also shown that it understands the vital role played by cities. Major cities are also front-line participants in the cultural, economic and social development of a

• society. Through their recent actions our government partners have demonstrated that they are

ready to commit to the success of these cities. Many issues have been resolved. Still, there is much work that needs to be done to help Montréal make up for lost time, correct the errors of the past and allow it to fully assume its role as Québec’s most important city. We must insist on, among

• ther things, significant investments required to ensure the viability and development of public

transit, which is so vital to the responsible development of our city. It is essential for Montréal to benefit from growing sources of revenue because it is a key participant in the creation of this

• growth. We remain vigilant and will continue to insist that our partners assume their responsibilities

and clearly commit to Montréal. We cannot repeat this enough: the success of the city also means success for all regions of Québec.

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The 2005 Budget

We have made commitments. We are proud to say to Montrealers that we have fulfilled these

• commitments. Our administration is taking action and we intend to continue in this direction.

The budget for 2005 has been established at $3.98 billion, and the three-year capital works budget has been set at $1.67 billion, 45% of which has been dedicated to water and road infrastructures. Thanks to rigorous and responsible management, 55% of residential taxpayers will see their tax bills decrease while 19% will see an increase less than the rate of inflation of 2.1%. In the non-residential sector, 43% of owners will see their tax bills decrease and 20% will see an increase less than the rate of inflation. As a result, the competitiveness of the businesses located within city territory is improved. The administration also has attacked crucial problems notably the modernization of the city’s water and sewer and its road networks as well as the construction of social housing units. The City has invested $146 million to improve its entire road network throughout 2004. The Solidarité 5000 logements project is also well on its way to being completed. The major achievements of this administration also include the urban plan, which will guide the harmonious development of its territory as well as policies for economic development, culture, heritage, sustainable development and the protection of natural spaces. We created the Office de consultation publique and the Bureau de l’Ombudsman. We also provided $10 million in financing to the Conseil des arts. These are all commitments that we are proud to honour. As promised, the City also achieved recurring substantial savings of $45 million in 2002, $36 million in 2003 and $44 million in 2004. The renewal of eight of 10 collective agreements has also allowed us to respect our financial framework and generate a climate of confidence.

Responsible Boroughs

Since the creation of the city our municipal administration has recognized that elected officials in the boroughs are the ones that are best positioned to provide first-rate, greatly efficient local services to citizens. These individuals now have all the tools they require to respond to the front- line needs of their citizens. The boroughs are now responsible for the quality and efficiency of these local services. To support them, the City has implemented an evolving and dynamic budgetary proposal that will allow them to better fulfil their obligations and meet their needs. Once again in 2005 the budget allocated to the boroughs has increased substantially. Everything is now in place to allow each borough to assert its character and personality.

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Defending the Interests of Montrealers

Above and beyond this decentralization, the Mayor of Montréal remains the mayor of all Montrealers and he intends to represent them and defend their interests. Elected by all citizens, the mayor will always intervene in strategic and major matters and will ensure that the well-being of the City and its citizens always comes first. Yes, Montréal is moving forward. Together, if we devote the necessary energy and desire and move beyond partisan debates and with the indispensable collaboration of the City’s employees and managers and the support of civil society, we will succeed. We are profoundly convinced of

• this. We are confident that we have put in place the management strategies and policies that are

required to make our great city a place that we can all be proud of. That is our collective responsibility and, above all, our obligation. Gérald Tremblay Mayor Frank Zampino, FCA Chairman of the Executive Committee

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The year 2004 was marked by significant changes in the ways we conduct business. Some of the characteristics of our new organizational model designed to ensure the success and development

• f Montréal include a lighter organizational structure, dynamic operating procedures, a faster

decision-making process and better defined challenges and priorities. This model, adopted in 2003, is based on increased decentralization of local services and eliminates function duplication and

• verlapping. A lot of work has been accomplished by managers and employees to improve the

city’s overall performance. So far, we are on course with our action plan and major objectives. Key structuring projects have been completed or are underway. In 2005, we will forge ahead and make sure that Montrealers receive the best possible services at the lowest possible cost.

2004 highlights An administration that meets public expectations

Urban plan The urban plan is a reference document in the field of territorial development in Montréal. It is the result of planning and concerted action stemming from the Montréal Summit. The plan was adopted in November after public consultations were held last May and June. The urban plan will enable Montréal to focus on key development issues and challenges to make it an even more hospitable and dynamic city. In a context of sustainable development, the guidelines, objectives and actions that are advocated aim at improving the quality of life of Montrealers, supporting economic development and providing a sound environment. Economic development A few weeks ago, our administration held public hearings on the new city of Montréal’s very first economic development strategy and action plan. These two elements are supported by new positioning that defines Montréal as an international centre of knowledge and innovation, high-technology pole, cultural centre, as well an entertainment and sports-oriented city. The document will undergo public hearings and will be submitted to city officials for adoption at the beginning of 2005.

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Cultural policy The first Montréal cultural policy, which grew out of the Montréal Summit, is expected within one

• year. A first public consultation document will be tabled shortly. It will determine the framework that

will guide city interventions in the field of culture, as well as meet the expectations of the cultural milieu and the needs of Montrealers. Heritage policy The city of Montréal recently tabled its first draft heritage policy that will guide the actions of the administration and its partners to promote the collective development of our city’s heritage. This heritage policy also has its origins in the Montréal Summit. Montrealers are invited to take part in the project by becoming involved in the public consultations, to be held in December 2004 and January 2005. Montréal charter of rights and responsibilities The proposed Montréal charter of rights and responsibilities stems from the Montréal Summit as well and was developed under the aegis of the workshop on democracy. It states the rights and responsibilities of Montrealers, while taking into account the city’s field of jurisdiction. A neutral and impartial ombudsman was appointed to oversee its implementation. The proposed charter was received favourably at public hearings. Its adoption is scheduled for the year 2005. E-cité The e-cité project is at the heart of the administration’s strategic vision. The electronic city, or city

• nline, will become the gateway to online services for the boroughs and city partners, as well as

the modern way to do business with the city. It will include a new electronic counter for customer service that will complement existing customer-service counters and telephone services. The first phase, introduced at the end of the year 2004, involves the new Internet portal, updating the city’s Web site and intranet sites to meet the needs and developing ten or so transactional applications, such as online payment of traffic tickets and permit applications.

A modern and highly efficient administration

Implementation of the organizational model The organizational model, which reflects a new management philosophy, has been integrated into the charter. The administration therefore focuses on a clearer and more flexible management process involving the boroughs and corporate departments. In 2005, the city will complete the review of operating practices in an effort to improve efficiency. Management by objectives and a lighter decision-making process will remain among our concerns.

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Collective agreements The city administration signed new labour contracts with two thirds of its unionized workers in 2003 and followed suit with other employee groups in 2004. The financial framework been observed for all groups. However, the collective agreement for blue-collar workers was imposed by an arbitrator in the beginning of October. The City now has a lasting partnership with employees, which will enable us to devote more energy to employee development and training. New remuneration policy for managers Along with the new working conditions that were agreed to with unionized workers, the city has adopted major amendments to the managers’ remuneration and performance evaluation policies. The city has agreed to bring up to standard the conditions and benefits of senior and middle

• management. The new remuneration policy aims at linking the entire salary progression process of

managers to their performance, in line with objectives, to promote individual performance and improve the quality of our administration. Debt management The city of Montréal has adopted a debt management policy to accommodate taxpayers and their ability to pay, while continuing investment to provide quality services to the community. Also, a new agreement has been signed between the government of Québec and the City regarding refinancing

• f the initial actuarial deficit. Under this agreement, the city of Montréal contracted a $240-million

bonded debt, which will be the sole responsibility of the government of Québec. Integrated management system (SIMON) The new integrated management system, or SIMON, created to manage resources in the field of finance, supply and human resources will achieve significant development stages in 2005. SIMON was introduced one year ago to improve managing objectives. SIMON will introduce its first applications in the beginning of the year. Introduction in the former suburban municipalities is scheduled for the end of 2005. Implementation across the city will be completed and effective at the end of 2006. Equal access to employment program In accordance with the Act respecting equal access to employment in public bodies, our administration has adopted a five-year action plan which will lead to the implementation of an equal access to employment program. To accelerate results in this field, we have adopted temporary hiring measures for jobs that are underrepresented by members or groups that are designated under the act. These measures will increase the representation of women, Aboriginal peoples and members of visible and ethnic minorities within the public service over the next three years.

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Human-respect policy The city administration has adopted a policy of human respect which states that all employees are entitled to work in a harassment-free environment, in accordance with values such as integrity, loyalty and respect that must reflect our organization’s management practices and influence its

• conduct. The city thereby asserts its commitment and will to promote and maintain a working

environment that mirrors respect and dignity. This policy takes into account the new provisions relating to psychological harassment in the workplace which have been included in the Act respecting Labour Standards at the beginning of June 2004.

Action plan for 2005

The year 2005 represents a transition year that will lead to the reconstitution of demerging municipalities on January 1, 2006. We will carry on activity, in partnership with the boroughs, to strengthen our organizational culture which places citizens at the heart of municipal life. The Island

• f Montréal’s vital strengths will also be put to contribution in achieving key projects, many of which

stem from the Montréal Summit. Robert Abdallah Director General

Presentation of the budget

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LIST OF ACHIEVEMENTS The year 2004 was marked by full deployment of the city of Montréal’s new organizational model in view of ensuring a high quality of service to residents. The December 2003 enactment of the Act amending the Charter of the City of Montréal gives increased powers to the boroughs, particularly with respect to governance and human resource management. The financial provisions of this statute will take effect January 1, 2005. Montréal launched a variety of major development projects in 2004 that should take shape over the coming year.

• The city injected $25 million of seed money into upgrading of water management infrastructure

to kick off its effort to improve the water supply service.

• The city injected an additional $14 million into the budget of the Société de transport de

Montréal, bringing its total contribution to $263 million.

• In conjunction with the Government of Québec, the city has completed the financing package

for the initial actuarial liability of the former city of Montréal. This package should provide for savings of some $1.1 billion over 40 years.

• The city has entered the new three-year assessment roll into its books over the past year and

has deployed measures aimed at alleviating the impact of this roll. These measures include the distribution of increased assessments over a three year period and application of a variable property tax rate to four different property categories.

• At press time in 2004, three collective agreements had been concluded, in addition to the one

previously confirmed in 2003. All of these agreements fell within the framework of the city’s fiscal rules. These renewals applied to some 2,200 employees.

• The city set up the Bureau Solidarité 5 000 logements. It injected $20.6 million into this project

through the AccèsLogis and the Logement abordable programs. To date, 1,239 housing units have already been occupied, 1,941 are or soon will be under construction, and 2,390 others have received conditional grant commitments and will be under construction in 2005.

• The first phase is underway of a $4.8 million three-year program aimed at reducing the use of

pesticides throughout the Island of Montréal.

• Launched in June 2002 at the Montréal Summit, the city’s new urban plan is to be adopted by

late 2004 and will ensure harmonious development of the city.

• The cultural policy project entitled Montréal, métropole culturelle, has been submitted to public

hearings, in anticipation of its adoption in early 2005.

2005 Budget and 2005-2007 Three-Year Capital Works Budget

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• The planned heritage policy will be the subject of a public hearing conducted by Montréal’s

Office de consultation publique in December 2004 and in January 2005, in view of its adoption in the spring of 2005.

• Prepared under the aegis of the Chantier sur la démocratie, the draft Montréal Charter of

Rights and Responsibilities has taken shape and is expected to be adopted in 2005.

• An initial economic development plan for Montréal has been tabled and is accompanied by an

action plan. This document will be enhanced through the consultation process and submitted to the elected city officials for adoption in early 2005.

• The deployment of e-Cité—which is to become the online portal for the city, its boroughs and

related organizations—will make it much easier for residents to interact with the city administration.

• The city has invested more than $146 million in infrastructural repairs to upgrade the local and

arterial road network, along with highway structures, such as the Acadie traffic circle.

• More than $18 million has been applied to upgrading public safety by building a firehouse in

Rivière-des-Prairies and by modernizing the radio communications systems used by the Service de la prévention des incendies.

• The city has invested in a number of major projects that will contribute to Montréal’s

development and visibility, including more than $11 million for the Quartier international and the Cité des arts du cirque.

• To improve the living environment of Montréal residents, more than $25 million has been

earmarked for the installation of new leisure and recreational equipment, as described below in the section pertaining to the Three-Year Capital Works Budget.

• Negotiations with the federal government to achieve full reimbursement of the goods and

services tax for purchases by the city and for paramunicipal corporations have generated annual savings of $30 million. This measure is more than a financial agreement and attests to the development of a true partnership between the Government of Canada and the city of Montréal. Agreement is imminently expected as a follow-through to this partnership. The agreement pertains to rebating the federal fuel tax. This priority issue represents many tens of millions of additional dollars annually that could be applied to the restoration of our infrastructure.

Presentation of the budget

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HIGHLIGHTS A responsible budget that respects the capacity of taxpayers to pay

• The overall budget of the City of Montréal has risen to $3.98 billion in 2005, an increase of

3.9%.

• With this budget, the City is maintaining rigorous control of its spending and is not

increasing the fiscal burden on its taxpayers.

• The measures taken by the administration have allowed us to, notably:
• attack the historical problems of under-financing of infrastructures related to water

management: $45 million in 2005, which represents an additional $20 million in 2005 compared to 2004;

• ensure the funding of various pension plans: an additional $33 million in 2005;
• increase the contribution to public transit: $6.5 million in 2005.
• These measures, including the amount for the transfer of management of the CLD

(Centres locaux de développement) from the Government of Québec, some $13 million dollars in 2005, represent 1.8% of the total increase in the budget.

2005 Budget and 2005-2007 Three-Year Capital Works Budget

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• Excluding these previously mentioned items, the City has limited the growth of budgetary

spending to only 2.1%.

• On this basis, since the creation of the new city, sound financial management has allowed

us to maintain the growth of the budget at the level of inflation. Annual variation of the budget from 2002 to 2005

• The City is maintaining the actions that have allowed it to reduce the proportion of the debt

shouldered by taxpayers from 15.8% in 2002 to 14.9% in 2005, improving the ratio by 6%.

• Over three years, investments total $1.7 billion, representing an increase of 9% for 2005,

essentially to intensify repair work on the network of main arteries and to improve the water network.

• Of these investments, an amount of $527 million is allocated to the boroughs.

2.0% 2.5% 2.1% 1.6% 2.6% 1.9% 2.0% 2.1% 2002 2003 2004 2005

Inflation Budget excluding measures

Presentation of the budget

21

A decrease in taxes for the majority of taxpayers Residential sector

• Apart from the contribution to improve the water service, which represents an increase of

0.5%, overall, residential property owners will not experience an increase in their tax bill for 2005.

• 55% of residential owners will benefit from a property tax reduction in 2005.
• 19% of residential taxpayers will experience a tax increase less than the inflation rate of

2.1%. Variation of residential tax bills between 2004 and 2005 From 2002 to 2005, on average, residential property owners will have experienced no tax increase between 2002 and 2005, excluding the contributions made to improve the water system.

18.9% 55.2%

13.1% 10.5% 2.2%

From 0.0% to 2.1% From 2.1% to 5.0% From 5.0% to10.0% 10.0% and higher

Decrease or variation in tax bills Below inflation for 3 out of 4 owners

Decrease in taxes

2005 Budget and 2005-2007 Three-Year Capital Works Budget

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Non-residential sector

• Excluding the contributions made to improve the water system, which represent an

increase of 1%, the fiscal burden of non-residential properties has increased by 1.8%, a progression that is lower than the inflation rate of 2.1%. As a result, the competitiveness of businesses located within city territory is improved.

• 43% of non-residential owners will benefit from a property tax reduction for 2005.
• 20% of non-residential property owners will experience a tax increase less than the rate of

inflation of 2.1%. Variation of non-residential tax bills between 2004 and 2005

• From 2002 to 2005, overall, non-residential property owners will have experienced an

average annual tax increase of 1.2% - excluding contributions made to improve the water system – an increase that is clearly below that of the inflation rate.

42.7% 20.4%

13.9% 13.6% 9.3%

From 0.0% to 2.1% From 2.1% to 5.0% From 5.0% to 10.0% 10.0% and up

Decrease or variation in tax bills Below inflation for 2 out of 3 owners

Decrease in taxes

Presentation of the budget

23

Figure 1 Use of each dollar collected The City efficiently manage municipal affairs keeping in mind its goal to offer quality public services at the lowest possible cost Explanations for these budget items are found in the section entitled "Budget by Activity".

2005 Budget and 2005-2007 Three-Year Capital Works Budget

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