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2015 Business Plan and Budget

Introduction to Budget Planning

Public MeetingFebruary 18, 2015

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Agenda

• Opening Remarks

• Budget Process and Public Input

• Response to Auditor General’s Report

• Budget Context

• Facts & Figures

• Budget 2015

• Questions (open mic)

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Budget Process and Public Input

Feb 18 (evening) Community Dialogue #1 (Introduction to Budget Planning)

Feb 19 – Mar 24 Radio, TV, print media stories and appearances

Feb 24 Council Workshop (Strategic Priorities)

Feb 24 – Mar 13 5 Tele-Town Halls (1 per ward pairing)

Mar 24 (evening) Community Dialogue #2 (Preliminary Budget Presentation)

Mar 30 Budget Committee Deliberations

Mar 31 Budget Committee Deliberations

Apr 2 Budget Committee Deliberations

Apr 8 Special Council Meeting to approve Budget

To date, we have held several Council workshops and Budget Sub-Committee meetings to discuss process, pressures and opportunities for engagement. Following are upcoming opportunities for public input into the process:

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Response toAuditor General’s Report

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Auditor General’s Report

• Address “Financial Review of the City of Brampton” by Jim McCarter (January 26, 2015)

• Discretionary reserve funds

• Maintaining infrastructure in a state of good repair

• Managing the rate of growth of operating expenses

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Capital Reserve Funds

Payments to Contractors

Make payments to contractors from bank account as work is performed

Chequing Account

Put money into savings account

Personal Line of Credit / Savings

Draw from LOC to pay for renovations

Illustration: Home Renovations vs. City of Brampton Capital Program

Payments to Vendors

Make payments to vendors (designers, contractors, etc.) as work is performed

Capital Fund / Unspent Capital

Allocate funds to capital projects

Reserve Funds

Draw from reserves to pay for capital projects

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Capital Reserve Funds - Update

Auditor General’s Report

“[S&P] stated in its most recent report that, as a result of the SWQ capital lease obligation and the guarantee relating to the Powerade centre, it estimated Brampton’s tax-supported debt to be about $215 million, which was at “a level which we believe is higher than most of its similarly rated peers.””

Response from Standard & Poor’s

“… when we reassessed the City’s credit rating in early 2014, we revised the Research Update and subsequent Supplementary Analysis for the City to use the net present value (NPV) of the capital lease (calculated at $131M) and removed the comment about this being higher than peers. Accordingly in our most recent report total tax-supported debt for 2012 is therefore calculated as $141M: $131M for the NPV of the capital lease + $10M related to a debt guarantee (the Powerade Centre guarantee).”

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Capital Reserve Funds – Update 2015

As a result of the change in capital project funding methodology, it is expected that the DC deficit will be reduced by $93.5 million in 2015

Development Charge Reserve Deficit

• $239.4 million – December 31, 2013

• $214.7 million – December 31, 2014

• $121.2 million – December 31, 2015 (projected)

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Maintaining Infrastructure

• Staff are in agreement that additional funds should be contributed towards repair and replacement of City assets / infrastructure

• In 2008, Council approved a 2% infrastructure levy

• Cost of maintaining that level was weighed against the cost to the taxpayer, and the contributions were reduced

• Determination of an “adequate” level of contributions going forward is one of the goals of the long-term financial master plan

2008 $1M + 2% 2012 $1M + 1%

2009 $1M + 0% 2013 $1M + 1%

2010 $1M + 0% 2014 $1M + 1%

2011 $1M + 1% 2015 $1M + 2% (tbd)

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Growth of Operating Expenses

0

500

1,000

1,500

2,000

2,500

3,000

0

100,000

200,000

300,000

400,000

500,000

600,000

Brampton Full-Time Staffing Levels in Relation to Population

Population Full-time positions

2010: Introductionof Zum Bus Rapid

Transit (BRT)

*2014 staffing number estimated based on approved additions

1994 - 2000: No tax increases =

reduced service levels

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Financial Information Return (FIR)

• From the Ontario Ministry of Municipal Affairs and Housing:

• “The FIR is the main data collection tool used by the Ministry of Municipal Affairs and Housing to collect financial and statistical information on Municipalities.

• “The FIR is a standard document comprised of a number of Schedules which are updated each year to comply with current legislation and reporting requirements.”

• All Ontario municipalities must complete and submit their FIR to MMAH by May 31st of the following year

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Staffing Levels in Relation to Population

Includes full-time, part-time and seasonal employees Source: 2005-2013 FIRs

90

100

110

120

130

140

150

160

170

2005 2006 2007 2008 2009 2010 2011 2012 2013

Po

pu

lati

on

Se

rve

d p

er

Em

plo

ye

e

Brampton Burlington Mississauga Oakville

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Labour Costs as % of Total Expenses

55%

60%

65%

70%

75%

2009 2010 2011 2012 2013

Brampton Burlington Mississauga Oakville

Includes full-time, part-time and seasonal employees Source: 2009-2013 FIRs

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2014 Distribution of Labour Costs

$0 $10 $20 $30 $40 $50 $60 $70 $80 $90

Transit

Fire & Emergency Services

Maintenance & Operations

Recreation & Culture

Corporate Services

Public Services (other)

Planning & Building

Plng & Infrastructure Servs…

Enforcement & By-law Services

Office of Chief Operating Officer

Mayor & Council

Office of Chief Admin Officer

$ millions Net Labour Cost Labour - Revenue Recovery

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Budget Context

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Municipality Population

2011Population

2006Rank 2011

Rank 2006

Toronto 2,615,060 2,503,281 1 1

Montréal 1,649,519 1,620,693 2 2

Calgary 1,096,833 988,812 3 3

Ottawa 883,391 812,129 4 4

Edmonton 812,201 730,372 5 5

Mississauga 713,443 668,599 6 6

Winnipeg 663,617 633,451 7 7

Vancouver 603,502 578,041 8 8

CONTEXT – Population

Municipality Population

2011Population

2006Rank 2011

Rank 2006

Brampton 523,911 433,806 9 11

Hamilton 519,949 504,559 10 9

Québec City 516,622 491,142 11 10

Surrey 468,251 394,976 12 12

Laval 401,553 368,709 13 14

Halifax 390,096 372,679 14 13

London 366,151 352,395 15 15

0

500,000

1,000,000

1981 1986 1991 1996 2001 2006 2011 2031 2041Total Population 149,090 188,498 234,445 268,251 325,428 433,806 523,911 842,800 899,000

Brampton Growth 1981-2011 and Projections to 2041

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Source: 1981-2011, Statistics Canada Census; 2031-2041, Hemson Consulting

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Municipal Service Delivery – Services

• Arts and culture• By-law enforcement• Economic development• Fire services• Parks and recreation• Provincial offences administration• Planning new community developments

and enhancing existing neighbourhoods• Public transit• Snow removal• Tax collection• Local roads

• Ambulance services• Housing services• Police services• Public health• Regional roads• Social services• Waste collection and recycling• Water treatment and supply• Waste water collection and

treatment

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Municipal Service Delivery – Funding

Property Taxes & User Fees

• Fire Services• Public Transit• Planning New Developments• Enhancing Existing Neighbourhoods• Economic Development• Parks and Recreation• Arts and Culture• Road Maintenance• Snow Removal• Animal Control• By-law Enforcement• Infrastructure Maintenance

Development Charges

• Expanded Transit System• New/Expanded Roads• New Recreation Centres• Expansion of Existing Recreation

Centres• New Parks• New Libraries (limited)• New Fire Stations (limited)• Debt capacity allows infrastructure

ahead of growth• Debt service payments charged

back to developers

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City of Brampton Organizational Structure

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City of Brampton Strategic Plan and Vision

Brampton is a city that respects its roots, and isthoughtful about its future. Purposeful planningmeans places that connect and preserve—andspaces to play and live. In Brampton, city-building is planned, public and progressive. OurStrategic Plan reflects who we are and wherewe’re going. Let’s be proud of our city today,and excited for our future.

Our Vision

Brampton is a world-class city of opportunity.We honour the past.We build on success.

We plan for a future that thrives.

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Current and Future Situation

• Provincially mandated as a high-growth municipality

• Infrastructure repair and replace – plan to address gap

• Address unspent capital

• Improve accountability and transparency

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Facts and Figures

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7-Year Historical Average – Property Tax Bill

$1,365 $1,445 $1,478 $1,526 $1,589 $1,733* $1,792*

$1,457 $1,489 $1,502 $1,516 $1,515

$1,543 $1,570

$760 $753 $747 $739 $729

$736 $738 $3,583 $3,687 $3,727 $3,782 $3,834

$4,012 $4,100

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

2008 2009 2010 2011 2012 2013 2014

Pro

pert

y T

ax

Budget Year

City of Brampton Region of Peel School Boards*Includes Peel Memorial HospitalLevy: $52 (2013) and $50 (2014)

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2014 Residential Property Tax Bill – Total

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City of Brampton

$1,742

Hospital Levy$50

Region of Peel$1,570

School Boards

$738

* Based on 2014 average household with an MPAC assessed value of $364,000 (Brampton)

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(1) 3 Bedroom, 1200 sq ft (2) 4-5 Bedroom, 3000 sq ft

Source: 2014, BMA Management Consulting Inc.

SINGLE DETACHED (1)

Markham $4,825 Vaughan $4,360Oshawa $4,013Mississauga $3,984Whitby $3,854Hamilton $3,747Brampton $3,657Oakville $3,512Richmond Hill $3,476Burlington $3,410

SENIOR EXECUTIVE (2)

Markham $6,206Oshawa $6,087 Oakville $6,055Hamilton $5,995Whitby $5,962 Vaughan $5,931Burlington $5,817Mississauga $5,702Richmond Hill $5,672Brampton $5,598

Residential Tax Comparisons - Municipalities

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Source: 2014, BMA Management Consulting Inc.

Residential Tax Comparisons - Municipalities

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MunicipalityAssessed

ValueTax Rate Tax Bill

Mississauga 439,000$ 0.9084% 3,984$

Brampton 325,000$ 1.1263% 3,657$

Oakville 402,000$ 0.8745% 3,512$

Burlington 374,000$ 0.9106% 3,410$

MunicipalityAssessed

ValueTax Rate Tax Bill

Oakville 692,000$ 0.8745% 6,055$

Burlington 639,000$ 0.9106% 5,817$

Mississauga 628,000$ 0.9084% 5,702$

Brampton 497,000$ 1.1263% 5,598$

Higher tax rates do not automatically mean higher tax bills.

Assessed Value x Tax Rate= Tax Bill

The same house in different municipalities has a different assessed value.

Municipalities with lower property values must have a higher tax rate in order to collect the same amount of tax revenue.

1200 sq ft home (Detached Bungalow), 3 bedroom

3000 sq ft home (Senior Executive), 4-5 bedroom

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7-Year Historical Revenues

62.5% 62.9% 65.0% 66.0% 67.1% 67.4% 68.0%

27.5%25.5% 25.5%

26.0%26.0%

25.8%25.2%

10.0%11.6% 9.5%

8.0%6.9%

6.8%

6.8%

$371,636 $400,817 $408,235

$429,554 $454,903

$491,075

$530,109

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

2008 2009 2010 2011 2012 2013 2014

Gro

ss E

xp

en

dit

ure

s (

000's

)

Budget Year

Revenues as a Percentage of Gross Expenditures

Taxes and PIL's User Fee and Service Charges Other Revenues

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2014 City Budget – Property Tax Impact

* Cost on property tax bill based on average home with a 2014 assessed value of $364,000

LabourOther

ExpensesRevenue

Net

Expenses

Public Services 197,709$ 59,592$ (94,371)$ 162,929$ 833$

Plng & Infrastructure Services 65,948$ 43,192$ (21,701)$ 87,438$ 447$

Corporate Services 41,221$ 16,544$ (8,646)$ 49,119$ 251$

Office of Chief Operating Officer 7,111$ 2,437$ (354)$ 9,193$ 47$

Mayor and Council 2,509$ 525$ -$ 3,034$ 16$

General Government 3,125$ 64,806$ (54,595)$ 13,336$ 68$

Office of Chief Admin Officer 1,825$ 81$ -$ 1,906$ 10$

Brampton Public Library -$ 13,740$ -$ 13,740$ 70$

Hospital Levy -$ 9,833$ -$ 9,833$ 50$

City TOTAL 319,448$ 210,749$ (179,667)$ 350,530$ 1,792$

$ Cost on

Property

Tax Bill

2014 Budget ($ thousands)

City TOTAL

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Budget 2015

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2015 Budget Pressures and Relief

Budget Pressures

• Compensation adjustments (Fire and Transit collective bargaining)

• New staff requests – address growth, maintain services, new service

• Inflation on non-labour expenditures

• Roads, parks and open space maintenance

• Operating costs for corporate facilities

• Reduced yield on investments

• Legislated requirements

• Infrastructure repair & replacement

Potential Budget Relief

• Fuel costs (diesel)

• Property tax assessment growth (new homes and businesses)

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2015 Preliminary Operating Budget Tax Impact

Every additional $100,000 spent on City operations adds approximately 50¢ to

the average property tax bill (based on 2015 average assessed value of $381,000)

$10 million

$100,000

1% increase to the tax levy = $3.62 million

$0.50

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• Maintain existing staffing levels (non-decisionablesalary and wage costs)

• Inflationary and other adjustments to reflect actual expenditure and revenue expectations

Base Operating Adjustments

$8.23 million

• Additional tax revenue from new properties added to the tax roll

Assessment Growth

($11.85 million)

• Increased contribution to capital infrastructure (1%)Infrastructure Levy

$3.62 million

• Maintain current services levels• Additional staff and resources

to respond to growth

Growth – Maintain Service Levels

$18.56 million

• New services• Improved service levels

Service – Improve Service Levels

$9.90 million

2015 Current Budget – Incremental Changes

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Ta

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2015 Budget Considerations

To achieve a zero property tax increase, services would need to be reduced and/or eliminated and no new service enhancements introduced.

• Preliminary 2015 Budget has been submitted, based on current service levels and response to growth. To achieve a zero property tax increase, the following would need consideration:

• Delayed implementation of previously-completed capital projects

• Continued delay of administrative support to growing front-line services

• Reduction or elimination of existing services

• Reduction of grants and subsidies

• Elimination or scaling back of planned new initiatives

• Increase user fees (fee for service)

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Future Opportunities for Feedback

Through Mar 27 Online Questionnaire

Through Mar 27 Online Property Tax (Budget) Allocator

Feb 19 – Mar 24 Radio, TV, print media stories and appearances

Feb 24 Council Workshop (Strategic Priorities)

Feb 24 – Mar 13 5 Tele-Town Halls (1 per ward pairing)

Mar 24 (evening) Community Dialogue #2 (Preliminary Budget Presentation)

Mar 30 Budget Committee Deliberations

Mar 31 Budget Committee Deliberations

Apr 2 Budget Committee Deliberations

Apr 8 Special Council Meeting to approve Budget

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Questions?

www.brampton.ca/budget