Build A Budget For Multi Year - London, Ontario · 2015 Property Tax - Commercial (for...
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Transcript of Build A Budget For Multi Year - London, Ontario · 2015 Property Tax - Commercial (for...
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Stay in Touch
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E‐mail [email protected]
Tweet us @CityofLdnOnt or #LdnBudget
Find us on www.Facebook.com/LondonCanada
Call Financial Planning & Policy at 519‐661‐4638
www.buildabudget.ca
Watch budget meetings streaming live atwww.london.ca/livestreaming
Budgets Tabled
• Property Tax Supported 2016‐2019
• Water 2016‐2019
• Wastewater 2016‐2019
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Residential ‐ How do we Compare?
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2015 Group Average: $ 3,583 (2014 $ 3,530)2015 City of London: $ 3,206 (2014 $ 3,151)
$377 below group average
Commercial ‐How do we Compare?
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$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2015 Property Tax - Commercial(for Municipalities with Populations over 100,000)
For prime location commercial office space, property taxes per sq ft of gross leaseable area(Source: BMA - Municipal Study 2015)
2015 Group Average: $ 3.37/sq. ft (2014 $ 3.36/sq. ft)2015 City of London: $ 2.36/sq. ft (2014 $ 2.32/sq. ft)
Industrial ‐ How do we Compare?
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$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
2015 Property Tax - Industrial(for Municipalities with Populations over 100,000)
For standard industrial property under 125,000 sq ft, newer construction, flexible design - taxes per sq ft of floor area basis
(Source: BMA - Municipal Study 2015)
2015 Group Average: $ 2.05/sq. ft (2014 $ 2.09/sq. ft)2015 City of London: $ 1.30/sq. ft (2014 $ 1.39/sq. ft)
The Budget Components
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Base BudgetBase Budget
Minimal changes to existingservices and programs
Service Review
Strategic Initiatives
(Business Cases Pgs. 255‐388)
Cost Pressures Summary Pgs. 33‐36
Potential Service Review
Savings
82016 2017 2018 2019
0.4%
2.5%
0.7%
2.6%
3.5%
3.1% ‐ Potential Average Annual increase
0.7%
2.7%
2.6%
2.9% ‐ Average annual target (upper limit)
2.6% ‐ Average Annual increase (Base budget ‐ starting point)
0%
0.4%
2016‐2019 Budget
• Consider the average impact over the four years
• Stick to financial principles• Take a measured approach to
reductions to base• Carefully consider pace of strategic
initiatives
Multi‐Year Budget Key Considerations
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Key Consideration 1:Base Budget
Key Consideration 2:
Strategic Investments
Requested Tax Levy From Rates
RECOMMENDED By Administration
For CONSIDERATIONBy Council
POTENTIAL Tax Levy
Avg. Annual Increase Of2.6% or $14.0 million
Avg. Annual Increase Of0.5% or $3.0 million
Avg. Annual Increase Of3.1% or $17.0 million
2016‐2019 Base Budget Cost Drivers
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Category
AverageAnnual Net Inc / (Dec) $millions
Average Annual Tax Levy Impact
Capital Financing and Other Related Financing 9.5 1.7%
Civic Service Areas 3.0 0.6%
Upload Of Ontario Works (2.1) (0.4)%
Agencies, Boards & Commissions 3.6 0.7%
TOTAL 14.0 2.6%
Key Consideration #2:Strategic Investments
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• Included in the requested budget for Council’s consideration• 23 business cases Total gross expenditure investment of $53.1 million (2016‐2019) Average annual tax impact of 0.5% or $3.0 million per year
• Other sources of funding include: reserve funds, London Hydro dividend, debt, and other government funding.
Budget 101
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Budget Terminology
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The City’s plan for expected revenue and expenditures based on the City’s daily activities.
The City’s plan for long-term financing of fixed assets.
Operating Budget…
Capital Budget…
Budget Terminology
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Property taxes collected from existing homeowners and businesses.
Additional revenue that is collected through property taxes due to a growing and expanding city.
Funding from Assessment Growth…
Tax Levy from Rates…
The tax bill paid by homeowners and businesses for owning real estate. This revenue is used to fund programs and services for the entire community.
Property Tax Levy…
Budget Terminology
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Fees imposed on services intended to recover all or part of the cost associated with providing the service.
User Fee Revenue…
Pay-as-you-go Financing…
The principle of funding capital projects with current funds rather than relying on debt financing.
Budget Terminology
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A Reserve Fund is an amount set aside for a specific purpose that is carried from year to year unless consumed or formally closed.
Reserves are also amounts carried from year to year, but reserves are set up and used as cushions against operating budget contingencies or unforeseen events.
Reserve Fund…
Reserves…
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Expenditures
Tax Levy=Property Taxes collected
Non-Property TaxRevenues
(User fees and Grants)
FromTax Rate Increase
FromAssessment
Growth
Revenues =+
Balanced Budget
Balancing the Budget
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Current Services &
Service Levels• What Exists
Cost of Business
• Labour• Materials• Regulation
Expanding City• New homes• New businesses• More of Same!
Service Changes• New Services• Higher Svc Levels
=
+
+
+
Expenditure Requirements
BASE BUDGET SERVICE GROWTH
EXISTING TAX LEVY, USER FEES, GRANTS, ETC
PROPERTY TAX FROM RATE INCREASE
PROPERTY TAX FROM ASSESSMENT GROWTH
OTHER REVENUE: USER FEES, GRANTS,
LICENSES, ETC
ONE‐TIMEREVENUE(DEFERRAL)• RESERVE FUNDS
Business Plan including KPI’s
Update Business Plan with new MYB Information
• Annual Progress UpdatesBase Budget – Maintain the existing Services• Cost Pressures• Demands• Upload• Contingency
Strategic Investment – Business Cases for Council’s top strategic priorities (new/expanded services) • On‐going revenue and operating/maintenance
costs• Initial capital investment
Service Review
Assessment Growth ‐ Policy
Annual Surplus ‐ Policy
Significant Events• New Provincial Regulation• New Council Direction• Areas significantly over target
2016‐2019 Budget (Multi‐Year Budget [MYB])
Annual Update
2016
‐Mar
2017
‐De
c /16
2018
‐De
c /17
2019
–Mar/19
4 Year Average Tax Levy Target Set by Council(between 2.2% and
2.9%)
The Budget Process
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Short Video
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https://www.youtube.com/watch?v=_DI1T‐qnfbo
Stay in Touch
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E‐mail [email protected]
Tweet us @CityofLdnOnt or #LdnBudget
Find us on www.Facebook.com/LondonCanada
Call Financial Planning & Policy at 519‐661‐4638
www.buildabudget.ca
Watch budget meetings streaming live atwww.london.ca/livestreaming
