Township of Zorra 2018 Capital Budget Presentation This - - PowerPoint PPT Presentation

Township of Zorra 2018 Capital Budget Presentation

This presentation was developed by staff for the Council and members of the public to provide financial information and strategies as it relates to the 2018 Budget

• deliberations. The report covers the following topics for review and discussion

purposes.

• 1. Assessment Analysis
• 2. 2017 Capital Projects Recap.
• 3. 2018‐2022 Capital Budget Plan,
• 4. Reserve and Reserve Funds.
• 5. 2018 Operating Budget potential impacts and challenges.
• 6. Next Steps.

November 27, 2017 1

4(d) F05/Budgets

Zorra’s 2017 Assessment

In 2017 the Township tax levy requirement was $7,344,041.00 and apportioned as follows: – Operating expenditures $4,887,241.00 – Capital expenditures $2,456,800.00 Based on the Property Assessment Roll; the following summarizes how the tax classes funded the levy requirement for Township purposes:

November 27, 2017 2

Assessment Class Taxable Assessment Township Tax Levy Percentage share Residential (includes all residences;

multi and farm residences

841,249,025 $4,479,557.00 61.00% Farmland & Managed Forest 1,222,875,775 $1,618,253.00 22.03% All other tax classes 138,111,341 $1,246,231.00 16.97% Totals 2,202,236,141 $7,344,041.00 100.00%

Zorra’s 2017 Assessment

For information purposes; the following tables highlights the changes from 2016 to 2017 on households numbers and supplementary assessment as a result of new construction and demolition.

November 27, 2017 3

Household Count 2016 Year Demo Permits Assessment Decreased New Houses Assessment Added Assesment Growth 2016 Year Farmland Houses 1017 (4) (381700) 8 3,245,200 2,863,500 1021 Residential Houses 2343 (1) (108000) 19 5,460,400 5,352,400 2361 3360 (5) (489700) 27 8,705,600 8,215,900 3382 Household Count 2017 Year Demo Permits Assessment Decreased New Houses Assessment Added Assesment Growth 2016 Year Farmland Houses 1021 (5) (268540) 5 1,001,246 732,706 1021 Residential Houses 2361 (2) (162554) 16 7,522,567 7,360,013 2375 3382 (7) (431094) 21 8,523,813 8,092,719 3396 2016 Activities 2017 Activites

2017 Capital Budget – Recap

Capital Expenditures 2017 Budget Debenture Payments 955,624.00 Transfer To Reserves 665,000.00 General –Council chambers/Computers 36,000.00 Keyless/alarm system (multiple sites) 40,000.00 Fire – Vehicles 40,250.00 Fire – Building 52,500.00 Fire – Equipment 125,000.00 Recreation – Buildings (townhall, Harrington hall ) 305,000.00 Recreation – Machinery/Equipment 79,000.00 Recreation – land improvements (pool, soccer field, exterior lights) 303,500.00 Recreation – new infrastructure (water/wheels) 70,000.00 Roads – Vehicles/Machinery & Equipment 675,000.00 Roads ‐ Road Construction 1,031,500.00 Roads – Bridges and Culverts 488,500.00 Total Capital Expenditures 4,876,874.00 November 27, 2017 4

2017 Capital Budget – Recap

Capital Financing 2017 Budget OCIF annual Grant – Rural Infrastructure 50,000.00 Other Revenues – Erie Thames Interest 59,000.00 Other Revenues – Federal Gas Tax 245,000.00 Other Revenues – MNR Royalties 285,000.00 Other Revenues – Grants (Ont 150, Canada 150 2 projects) 297,500.00 Other Revenues – Community Fundraising –Embro townhall 27,000.00 Contribution from Reserves – Fire 40,250.00 Contributions from Reserves – Recreation 222,500.00 Contributions from Reserves – Roads Fleet 675,000.00 Subtotal of Other Revenues Sources 1,901,250.00 Subsequently the 2017 capital budget required total tax dollars = 2,975,624.00 Proposed contribution from Road Infrastructure Reserve $518,824.00 Established the 2017 capital levy to be = $2,456,800.00 November 27, 2017 5

2017 Capital Budget – How did we do?

Capital Projects Funded from Taxation 2017 Budget 2017 Actual/projected Council Chambers Renovations/computers 46,800.00 6,920.00 Keypad entry system (multiple sites) 39,200.00 36,950.00 Uniondale parking lot 52,500.00 31,780.00 Embro Townhall elevator lift 33,000.00 33,000.00 Pool Renovations 100,000.00 101,325.00 Fire Department Equipment 125,000.00 125,000.00 Water/Wheels commitment 70,000.00 70,000.00 Electrical panel – beach volleyball 3,500.00 710.00 Recreation – sewer repairs/water heater 0.00 41,945.00 Sidewalks 19,000.00 19,000.00 Bridge improvements 243,500.00 118,976.00 Road Construction – North Townline 277,500.00 352,015.00 Road Construction – Road 78 400,000.00 175,000.00 Debenture payments 900,624.00 900,624.00 Transfer to Reserves 665,000.00 665,000.00 Total 2,975,624.00 2,678,245.00 November 27, 2017 6

2017 Capital Budget update

At this time, staff is projecting at the end of 2017, the required transfer from Infrastructure Reserve would be approximate $220,000.00 (Budget figure was $518,824.00). The balance in this reserve in at January 1, 2017 was $577,550.00. The majority of the reduction is attributed to Road and Bridge Construction projects.

• Town of Ingersoll engineer provided a letter dated November 2, 2015 on budget estimates for the

work to be done on the North Townline for both 2017 and 2018, being $535,000 (2017), $505,000 (2018) and $40,000 for geotechnical costs; with Zorra share at 50%. Zorra capital budget allocated $277,500.00 in 2017 and $322,500.00 in 2018 based on this letter. However the actual construction cost completed in 2017 was $352,015.00 ($74,515.00 increase over budget).

• It was also determined in recent conversation with the Town of Ingersoll concerning the work

proposed in 2018 the budget estimated provided in November 2015 was erroneous and will be presented further on in this presentation.

• Zorra’s Road 74 project was estimated at $735,000.00 and included an estimate for hydro work to

be $250,000.00, the work has been completed and the Hydro One invoice for this work is expected to be around $51,200.00. Also staff and equipment time was also included in the figure in error. The actual cost projected on this project is now $170,000.00.

• Several bridge repairs were not completed.
• Sewer repairs in Embro Arena and new water heater system in Thamesford arena were installed

and not budget. $41,945.00.

• Council chambers work not completed.
• Underbudget in Uniondale fire hall parking lot.

November 27, 2017 7

2018 capital budget considerations

The first draft of the 2018 capital budget was developed based on the following parameters and

• information. Supplementary Memorandums to Council will be presented which provide

background details to support the selection and also to provide alternatives for Council to consider during budget deliberations. Fire Capital:

• Construction of an addition of a single bay to the Embro Station and a cistern.

Recreation:

• Only the $80,000.00 commitment towards the Water/Wheels project has been included in

the 2018 budget. Council is aware that a Trillium application has been made for the project, however a decision on funding will not be known until March, 2018. Final report and recommendations will follow after the announcement on the Trillium application and status

• f community fundraising.
• Aside for the roof replacement at the Harrington Hall which was suppose to be completed in

2017 but delayed, no other improvements to any recreation facilities has been considered in the first draft of the 2018 budget. The outcome of the Recreation Master Plan scheduled for early 2018 may require financial output. Roads:

• Updated Budget estimates and scope of work for the North Town line project with the Town
• f Ingersoll was received.

November 27, 2017 8

2018 Capital Budget – What are we planning?

Capital Expenditures 2018 Budget Comments Debenture Payments 941,258.00 Reflects payment schedule Transfer To Reserves 665,000.00 Same as 2017 General–Building 87,000.00 Council Renovations; computer replacements; new roof Fire‐ Building 225,000.00 Add bay and new door and oil interceptor to Embro Firehall Fire – Building 75,000.00 Cistern Fire ‐ Equipment 100,000.00 Reduced from 2017 levels $25,000.00 Recreation – Buildings 25,000.00 Harrington hall roof replacement Recreation – Infrastructure 80,000.00 Water/Wheels commitment Roads – Vehicles/Machinery & Equipment 275,000.00 Replace Unit#8 Tandem Roads ‐ Road Construction 367,450.00 Road 78, Road 88 and Road 60 Roads – Road Construction 995,000.00 North Townline Roads – Bridges and Culverts 36,000.00 Bridge 8 and Bridge 8 UTRCA – Embro Dam Levy 25,000.00 Embro Dam Levy UTRCA – Harrington Dam Levy 67,000.00 Harrington Dam Levy Total capital budget expenditures $3,963,708.00 November 27, 2017 9

2018 Capital Budget – how are we financing it?

Capital Financing 2017 Budget Comments OCIF annual Grant – Rural Infrastructure 58,520.00 Road 78 Other Revenues – Federal Gas Tax 245,000.00 North Townline Other Revenues – MNR Royalties and Interest 285,000.00 North Townline Other Revenues – Erie Thames Interest 59,000.00 Debt repayment Contributions from Reserves – Roads Fleet 275,000.00 Roads Fleet Contribution from Reserve – Recreation 25,000.00 Harrington Hall Roof Subtotal of Other Revenues Sources 947,520.00 2017 Capital Tax Levy – BASE LEVY AMOUNT 2,456,800.00 Resulting in SHORTFALL of capital tax levy: 559,388.00

Therefore resulting in Transfer from Infrastructure Reserve of $559,388.00; Reserve balance as at December 31, 2017 is estimated to be only $357,550.00

November 27, 2017 10

2018‐2022 Capital Budget Plan

During the 2017 Budget deliberations in early 2017, Council was presented with a Five (5) Year capital budget Plan and Capital levy funding for Council to review. In August 2017 Council was informed on two major areas that will have sufficient impact on levy requirements for capital infrastructure.

• 1. Director of Public works memo 2017‐113 Asphalt Rehabilitation schedule.
• 2. Embro and Harrington Dam Financial Analysis presented September 7, 2017.

As a result, Staff revisited the 5 Year capital budget plan, and developed it to include this information and formulate a financial plan for Council to consider.

The result, for Council to consider increasing the capital tax levy requirement by $35,000.00 (1.4%) from $2,456,800.00 to $2,491,800.00.

November 29, 2016 11

November 27, 2017 12

TOWNSHIP OF ZORRA 2018 2019 2020 2021 2022 Total Expenditures Debenture Payments 941,258.00 $ 929,360.00 $ 1,251,127.00 $ 1,226,167.00 $ 1,207,942.00 $ 5,555,854.00 $ Transfer to Reserves‐ Tax levy ‐ base level 665,000.00 $ 665,000.00 $ 665,000.00 $ 665,000.00 $ 665,000.00 $ 3,325,000.00 $ Capital Expenditures ‐ from detail Listing General Department ‐building 77,000.00 $ ‐ $ ‐ $ ‐ $ ‐ $ 77,000.00 $ General Department ‐Equipment 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 10,000.00 $ 50,000.00 $ Fire Department ‐ building 300,000.00 $ ‐ $ ‐ $ ‐ $ ‐ $ 300,000.00 $ Fire Department ‐Vehicles ‐ $ 397,000.00 $ ‐ $ ‐ $ ‐ $ 397,000.00 $ Fire Department ‐ Equipment 100,000.00 $ 100,000.00 $ 100,000.00 $ 100,000.00 $ 100,000.00 $ 500,000.00 $ Recreation ‐Buildings 25,000.00 $ 165,000.00 $ 130,000.00 $ ‐ $ ‐ $ 320,000.00 $ Recreation ‐ Machinery/Equipment 70,000.00 $ ‐ $ ‐ $ ‐ $ 70,000.00 $ Recreation ‐ New Infrastructure 80,000.00 $ ‐ $ ‐ $ ‐ $ ‐ $ 80,000.00 $ Roads‐ Buildings ‐ $ 6,000,000.00 $ ‐ $ ‐ $ ‐ $ 6,000,000.00 $ Roads ‐ Vehicles 275,000.00 $ 347,000.00 $ 510,000.00 $ 522,000.00 $ 450,000.00 $ 2,104,000.00 $ Road Construction 1,362,450.00 $ 1,206,000.00 $ 607,500.00 $ 876,500.00 $ 805,000.00 $ 4,857,450.00 $ Bridges and Culvert Construction 36,000.00 $ 205,500.00 $ 450,000.00 $ 254,000.00 $ 658,000.00 $ 1,603,500.00 $ UTRCA ‐ Embro Dam 25,000.00 $ 25,000.00 $ 25,000.00 $ 25,000.00 $ 25,000.00 $ 125,000.00 $ UTRCA ‐ Harrington Dam 67,000.00 $ 67,000.00 $ 67,000.00 $ 67,000.00 $ 67,000.00 $ 335,000.00 $ Total Capital Expenditures 3,963,708.00 $ 10,186,860.00 $ 3,815,627.00 $ 3,745,667.00 $ 3,987,942.00 $ 25,699,804.00 $ Funding Sources ‐ OCIF annual grant ‐ Road infrastructure (58,520.00) $ (92,604.00) $ (98,663.00) $ (50,000.00) $ (50,000.00) $ (349,787.00) $ ‐ Contributions from Reserves (300,000.00) $ (2,055,715.00) $ (640,000.00) $ (522,000.00) $ (450,000.00) $ (3,967,715.00) $ ‐ Contributions from Reserve Funds ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ $ ‐ Other Revenues ‐ Federal Gas Tax (245,000.00) $ (245,000.00) $ (245,000.00) $ (245,000.00) $ (245,000.00) $ (1,225,000.00) $ ‐ Other Revenues MNR Aggregate Royalities (285,000.00) $ (450,000.00) $ (450,000.00) $ (450,000.00) $ (450,000.00) $ (2,085,000.00) $ ‐ Other Revenues ‐Erie Thames Interest (59,000.00) $ (59,000.00) $ (59,000.00) $ (59,000.00) $ (59,000.00) $ (295,000.00) $ ‐ New Long Term Debenture ‐ $ (4,923,285.00) $ ‐ $ ‐ $ ‐ $ (4,923,285.00) $ (947,520.00) $ (7,825,604.00) $ (1,492,663.00) $ (1,326,000.00) $ (1,254,000.00) $ (12,845,787.00) $ CAPITAL TAX LEVY REQUIREMENT (3,016,188.00) $ (2,361,256.00) $ (2,322,964.00) $ (2,419,667.00) $ (2,733,942.00) $ (12,854,017.00) $ AVERAGE CAPITAL LEVY (5 YEARS) (2,491,800.00) $ (2,491,800.00) $ (2,491,800.00) $ (2,491,800.00) $ (2,491,800.00) $ (12,459,000.00) $ TRANSFER TO/FROM INFRASTRUCTURE RESERVE 524,388.00 $ (130,544.00) $ (168,836.00) $ (72,133.00) $ 242,142.00 $ 395,017.00 $ LESS JANUARY 1, 2018 OPENING BALANCE (357,550.00) $ 37,467.00 $ 2018‐2022 CAPITAL BUDGET UPDATED ROAD CONSTRUCTION COSTS/AGGREGATE ROYALTIES AND ADDING SCENARIO 1 FOR DAMS

Reserves and Reserve Funds

The Township has four categories of Reserves and Reserve Funds. Below lists those categories and projected reserve balances as at December 31, 2017. It is anticipated that changes will occur in the Surplus/Deficit Reserve and Building Department Reserve Fund when the 2017 fiscal year has ended and after audit.

November 27, 2017 13

Operational Reserves

• Working Fund ($541,209)
• Insurance Deductible

($39,679)

• Surplus/Deficit ($131,480)

Discretionary Reserves where annual contributions from current year tax levy

• Fire Reserve ($129,396)
• Public Works Housing

($926,715)

• Roads Vehicles/Equipment

($83,319)

• Recreation ($565,465)
• Infrastructure Reserve

($357,550) Discretionary Reserves where contributions from other revenue sources

• Village Affairs/Erie Thames

($22,635)

• MNR Tonnage Surcharge

($777,245) Non Discretionary Reserves where contributions from

• ther revenue sources
• Parkland/Severance Fees

($5,796)

• Building Dept Services

($134,121)

• Development Charges

($22,454)

• Federal Gas Tax ($230,744)

Reserves and Reserve Funds Cont’d

November 27, 2017 14

TOWNSHIP OF ZORRA - RESERVE AND RESERVE FUNDS WITH INCREASE INFRASTRUCTURE COMMITMENT RESERVES Dec 31, 2017 Closing Balances 2018 2019 2020 2021 2022 Dec 31, 2022 Closing Balances Working Fund 541,209.00 $

• $
• $
• $
• $
• $

541,209.00 $ 500-0050-000;500-0100-000;500-0210-000 Insurance Deductible 39,679.00 $

• $
• $
• $
• $
• $

39,679.00 $ 500-0101-000 Surplus/Deficit Reserve 131,480.00 $

• $
• $
• $
• $
• $

131,480.00 $ 500-0108-000 712,368.00 $

• $
• $
• $
• $

712,368.00 $ Fire Reserve 126,396.00 $ 100,000.00 $ 100,000.00 $ 100,000.00 $ 100,000.00 $ 100,000.00 $ 229,396.00 $ 500-0120-000;500-0120-122

• $

(397,000.00) $ Public Works Housing 926,715.00 $ 75,000.00 $ 75,000.00 $ 75,000.00 $ 75,000.00 $ 75,000.00 $ 225,000.00 $ 500-0159-000 (1,076,715.00) $ Roads - Vehicles/Equipment 83,319.00 $ 410,000.00 $ 410,000.00 $ 410,000.00 $ 410,000.00 $ 410,000.00 $ 29,319.00 $ 500-0160-000 (275,000.00) $ (347,000.00) $ (510,000.00) $ (522,000.00) $ (450,000.00) $ Recreation 565,465.00 $ 80,000.00 $ 80,000.00 $ 80,000.00 $ 80,000.00 $ 80,000.00 $ 545,465.00 $ (30,000.00) $ 500-0240-000 (25,000.00) $ (235,000.00) $ (130,000.00) $

• $
• $

Infrastructure Capital levy 357,550.00 $ (524,388.00) $ 130,544.00 $ 168,836.00 $ 72,133.00 $ (242,142.00) $ (37,467.00) $ SUBTOTAL 2,059,445.00 $ (189,388.00) $ (183,456.00) $ (882,879.00) $ 215,133.00 $ (27,142.00) $ 991,713.00 $ RESERVES Dec 31, 2017 Closing Balances 2018 2019 2020 2021 2022 Dec 31, 2022 Closing Balances Village Affairs/Erie Thames 22,635.00 $

• $
• $
• $
• $
• $

22,635.00 $ 500-0180-000 MNR Tonnage surcharge Fund 777,244.85 $ 285,000.00 $ 450,000.00 $ 450,000.00 $ 450,000.00 $ 450,000.00 $ 725,640.85 $ 500-0161-000 (285,000.00) $ (522,604.00) $ (439,500.00) $ (439,500.00) $ (450,000.00) $ Severance Fees/Parkland 5,796.00 $

• $
• $
• $
• $
• $

5,796.00 $ 500-0461-000 Building Department 134,121.00 $

• $
• $
• $
• $
• $

134,121.00 $ 500-0130-000 Development Charges Fund 22,454.00 $ (20,000.00) $

• $
• $
• $
• $

2,454.00 $ 500-0401-000 Federal Gas Tax Fund 230,744.00 $ 245,000.00 $ 245,000.00 $ 245,000.00 $ 245,000.00 $ 245,000.00 $ 170,244.00 $ (60,500.00) $ 500-0103-000 (245,000.00) $ (245,000.00) $ (245,000.00) $ (245,000.00) $ (245,000.00) $ SUBTOTAL 1,192,994.85 $ (20,000.00) $ (133,104.00) $ 10,500.00 $ 10,500.00 $ 1,060,890.85 $ TOTAL OF ALL RESERVES/FUNDS 3,964,807.85 $ (209,388.00) $ (316,560.00) $ (872,379.00) $ 225,633.00 $ (27,142.00) $ 2,764,971.85 $

2018 Operating Budget

The 2017 Operating Budget was approved with a operating levy of $4,887,241.00, which was $489,025.00 (7.1%) over 2016 levy requirement. In 2017 the Province reduced Zorra’s Ontario Municipal Partnership Fund grant (OMPF) by $188,700.00; which makes up 40% of the increase in tax levy requirement in 2017. On November 20, 2017, the Province released is 2018 Ontario Municipal Partnership Fund grant (OMPF) allocation. Zorra will be experiencing a decrease of $160,000.00. Based on the 2017 operating levy, Zorra will need to increase a minimum of 3.3% to fund this decrease.

November 27, 2017 15

Year 2017 2018 Dollar change Rural Community Grant $ 622,300.00 $ 714,600.00 $ 92,300.00 Nothern or Rural Fiscal Circumstances Grant $ 30,200.00 $ 40,400.00 $ 10,200.00 Transitional Assistance $ 416,900.00 $ 154,000.00 $ (262,900.00) Court Security/Prisoner Transportation Grant $ 5,600.00 $ 6,000.00 $ 400.00 Total OMPF $ 1,075,000.00 $ 915,000.00 $ (160,000.00)

2017 Operating Budget Cont’d

The 2017 fiscal year has not yet been completed; however preliminary review of operating budget to actual figures to date; staff is anticipating a small overall operating surplus. This will not be known until mid January, 2018. Staff has been working on the 1st draft of the 2018 operating budget, which will be presented at a subsequent meeting, however for the purpose of this presentation, we have identified areas and proposed projects that will have an impact on the financial needs for 2018.

• 2018 OMPF reduction in grant

$160,000.00

• Election

$ 31,000.00

• Branding

$ 10,000.00

• Recreation Scheduling software

$ 20,000.00

• Wages/benefits costs

???? The result, for Council to consider increasing the operating tax levy requirement by a minimum

• f OMPF reduction $160,000.00 (3.3%) from $4,887,241.00 to $5,047,241.00.

November 27, 2017 16

Next steps

In summary, this preliminary review of the 2018 capital levy requirements and the identifiable operating areas of concern reports the need to raise a minimum of $190,000.00 ($35,000 capital and $160,000 operating) in total tax levy dollars to address capital and operating. This equates out to 2.7% levy dollar increase over the 2017 total levy requirement.

November 27, 2017 17