Draft 2013 Business Plan Budget Breakfast Meeting December 19, 2012 - - PowerPoint PPT Presentation

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Draft 2013 Business Plan

September 26, 2012 Budget Breakfast Meeting December 19, 2012 Growing – Building – Together

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Disclaimer

This presentation has been prepared by City of Barrie staff. It has not been adopted, approved, disapproved, or otherwise acted upon by City Council.

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• 1. Services and service levels resulting in a 4.1% property

tax increase,

• 2. Water and wastewater services reflecting all current

regulatory and legislative standards, resulting in a 7% increase for water rates and a 12% increase for wastewater rates, and

• 3. A $135 million capital budget funded mostly by reserve

funds.

The Recommended 2013 Business Plan Includes:

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Managing Services and Costs

Choices about how we pay for the services in the Business Plan include consideration of:

• Efficiency improvements
• Service adjustments
• Revenue increases
• Reliance on debt and/or reserve financing

Effective stewardship involves assessing both the present and future effects of today’s decisions

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$349 $315 $277 $1,953 $3,198 $4,076 $5,545 $6,128

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 0.5 1 1.5 2 2.5 2006 2007 2008 2009 2010 2011 2012* 2013* Financial Assets:Liabilities Net Debt:Total Revenue Debt per Household

Sustainability Trends Are Not Favourable

* 2012/3 projected

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Debt Payment Forecasts Remain Within Annual Repayment Limits

$0 $10 $20 $30 $40 $50 $60 $70 2012 2013 2014 2015 2016 Millions Forecasted Debenture Payments Estimated Annual Debt Repayment Limit 20% of own-source revenues

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How does growth influence our financial condition and current service levels?

• If there’s a gap between expected service levels and the

resources available to provide them, the gap grows as more people use the service

• Current residents help pay for services provided to new

developments, further reducing the taxes available for service to existing areas

• New assets typically require debt financing and prompt

more funds to be allocated for lifecycle activities and replacement

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Reserves Are Not Just For “Rainy Days”

A B C A: Funds we’ve put away for an asset’s replacement in the past B: Funds we’ll put away within 12 years = amortization charge C: Funds we’ll need when it’s time to replace the asset

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3.1% 3.1% 3.2% 3.2% 3.4% 3.5% 3.5% 3.6%

0.01 0.02 0.03 0.04 0.05 0.06 0.07 0.08 0.09 2006 2007 2008 2009 2010 2011 2012* 2013*

Debt Charges:Total Revenue Municipal Taxes as a % of Household Income Total Municipal Revenue:Total Assessment

Funding Choices Are Available

* 2012/3 projected

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Property Tax Comparison - 2012

Source: BMA Municipal Study, 2012 (Draft)

Property Type Barrie Cities 100,000+ Avg. Survey Avg. Detached Bungalow $3,033 $3,378 $2,995 Senior Executive 4,996 5,931 5,659 Walk-up Apartment 1,117 1,494 1,333 Mid/High Rise 1,252 1,694 1,588 Office Bldg (sq. ft) 3.49 3.39 2.94

• Std. Industrial (sq. ft.)

1.07 2.04 1.69

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0% 2% 4% 6% 8% 10% 12% 14% 2006 2007 2008 2009 2010 2011 2012* 2013*

Government Transfers:Total Revenue

Low Reliance on Funds From Senior Governments

• 2012/3 projected

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Forecast 2012 Financial Performance

• Anticipating a year-end operating deficit of approximately

$1M

– Salary gapping target will not be fully met – Revenue shortfalls – Partially offset by anticipated surplus from the County of Simcoe

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• Service plans that produce no more than a 3%

property tax increase, net of new debt financing charges

• Find opportunities to reduce planned water and wastewater

rate increases

• Recommend adjustments to the capital budget and service

delivery plans that could reduce anticipated cost increases

Council’s 2013 Budget Directions

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Business Plan Drivers

• Factors influencing plans and priorities

– Asset renewal and capacity management needs – Growth management for annexed lands and intensification – Council’s Goals and Strategic Initiatives

• Operating cost changes

– New Legislative and Regulatory requirements – Transit & Waste Management services – Increases in utilities, maintenance – New facilities

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Anticipated Service Adjustments

• To meet budget directions, staff needed to identify service

adjustments and cost reductions:

– Service Adjustments – No economic adjustments for Council, Executive Team or Senior Leadership Team – Salary gapping of $750,000 expected

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Recommended Program Changes

• Program Changes have been categorized by type of

need being addressed:

– Legislative Requirements – Stormwater Management pond maintenance & master plan development, Digitize infrastructure location data, Historic waste disposal site management – Efficiency Measures – Sustainable Waste Management Strategy (Mattress Recycling), Standing Agreements (Purchasing) – Savings Opportunities – Elimination of landfill tipping fee subsidy – Council Priorities – Plan for Transit

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Anticipated Service Impacts

• Increased risk of service interruptions or cost increases

when external factors do not match plans

• Longer wait times due to fewer staff resources

available for managing customer inquiries

• Diminished appearance of facilities and grounds

because of reduced spending on maintenance/repairs

• Reduced capacity of tools/systems staff need to

provide services

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Service Partners

• County of Simcoe – Preliminary budget request of $20.6

Million – decrease of $1.2 Million from 2012

• Police Budget – Preliminary budget request of $44.6M –

increase of $1.3M or 3%

• Library Budget – Preliminary net budget of $5.8M – increase
• f $169K or 3%

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Water and Wastewater User Rate Budget

Barrie’s Finance Committee – 12-10-24

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Water System Assets

1 – Surface Water Treatment Plant 12 - Production Wells 620 kms – Water main 3,600 Hydrants 24,000 Valves 5 - Water Storage Facilities 6 – Booster Pumping Facilities

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Overall Water System Value: $527M

• Water Treatment Component:- $172M (replacement cost of plant

and wells and pumping stations)

• Water Distribution component:- $355M (replacement cost mains,

hydrants, valves, storage towers and reservoirs, meters and booster stations)

• Average age of the linear Assets is 19 years – many city core pipes

beyond 75 years (in some phase of corrosion)

Water System – Asset Value & Condition

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• 42,500 water customers (40,000 Residential, 2,500 ICI) (140,000

persons) – 100% metered

• 172 lpcd - Average Residential Consumption: (National average: 229

lpcd – Barrie is at 75% of National Average – due to City’s Water Conservation efforts/promotion ongoing over many years)

• $212/year – Average Residential cost of water (NWWBI – national

average: $325/year (Barrie @ 65%))

• Individual Customer access to water usage, via the internet – since

October, 2011

• 60 – number of Licensed/Certified Operational Staff serving Barrie

Water Customers (some 20% less than National average)

Water System – Customer Information

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Wastewater System Assets

23 1 – Expanded/upgraded Waste water Treatment Facility 1 – Biosolids Storage/Treatment Facilities 526 kms – Sanitary Sewers 7,700 Maintenance Holes 42,500 Service Connections 13 – Sewage Pumping Stations

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• Overall Wastewater System Value:- $836M

– Wastewater Treatment Component:- $436M (replacement cost

• f plant and biosolids facility)

– Wastewater Collection Component:- $400M (replacement cost of sanitary mains and pump stations) – Average age of the linear Assets is 21 years – many city core pipes beyond 75 years (in some phase of deterioration)

Wastewater System – Asset Value

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• 42,500 water customers (40,000 Residential, 2,500 ICI - serving

140,000 persons)

• 215 lpcd - Average Residential Contribution
• $321/year – Average Residential cost of Wastewater (near

average – yet Barrie has much more stringent treatment requirements)

• Individual Customer access to water usage, via the internet –

since October, 2011 – guide to assessing Wastewater charges

• 33 – number of Licensed/Certified Operational Staff serving

Barrie Wastewater Customers (some ~20% less than National average)

Wastewater System – Customer Information

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2013 Capital Budget

Buildings 17,923 0.13 Computer Equipment 6,990 0.05 Fleet 5,155 0.04 Furniture and Fixtures 282 0.00 Infrastructure 76,638 0.57 Land Improvements 16,907 0.12 Leasehold Improvements 159 0.00 Machinery and Equipment 11,521 0.08

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2013 Capital Budget Funding Sources ($000)

Development Agreement 177 0% Reserves 0% User Rate 10,795 22% Grants 37 0% Tax Capital Reserve 18,000 37% Debenture 7,677 16% RecDCA 6,116 12% FedGasTax 5,489 11% RecOther 922 2%

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We need your participation:

• Visit www.barrie.ca to learn more about our 2013

Business Plan and the process we’re using to assemble it

• Please get engaged - give us your thoughts on what

you heard today

• Attend General Committee or Council
• Send feedback:

– Ed Archer, GM of Corporate Services (739-4220, x. 4419; earcher@barrie.ca)

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Where do we go next?

• December

– Budget Breakfast December 19 – Publish the Business Plan and distribute it to Council – Discuss potential amendments with members of Council

• January 21 – General Committee review
• January 28 – Council decision