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7/31/2019 2012-06-12 - Presentation on Budget Targets
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2013 2017 Operating Budget
Targets
Strategic Priorities & Policies
CommitteeApril 30, 2012
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2
How the Municipal Budget Works
OPERATING BUDGETSalaries/WagesUtilitiesSuppliesFuelContracted ServicesAnnual InsuranceDebt PaymentsCapital Levy (PAYG)Reserve FundContributions
CAPITAL BUDGETNew ArenaNew Fire TruckRoad WideningNew Bike PathAsset Rehab
Property Tax
Grants
User Fees
RESERVE FUNDS
DEBT
Outside:
DevelopmentCharges, Grants,etc.
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Budget Focus
ExpendituresNet Budget
(Tax Levy)
Non-Property TaxRevenues- =
From
Tax Rate
Increase
From
Assessment
Growth
3
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Balancing the Budget
Current
Services &
Service Level
What Exists
Cost of
Business
Labour
Materials
Regulation
Expanding City
New homes
New businessesMore 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 TAXFROM ASSESSMENT GROWTH
OTHER REVENUE:NEW: USER FEES, GRANTS,
LICENSES, ETC
ONE-TIME
REVENUE(DEFERRAL)
RESERVE FUND
4
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The Balancing Act Zero or not!
5
Cost containment (operating
efficiencies)
Ontario Works Upload
Operating Budget Contingency
Reserve
**Assessment Growth**
Permanent Service
Adjustments/Reductions
$
Labour costs & Collective
Agreements (over 0%) Capital Financing
Inflation - 3.1%
Increased demand for new
services (especially social,
cultural and economic)
New regulation (e.g. AODA)
**Expanding City services &
capital maintenance**
$
Acceptable
Tax increase
from rates
New Opportunities$700 m LIMIT to $100 m: New City Hall
401/402 Corridor Development
Green Bin
Transportation Master Plan
New initiatives (SOHO CIP, Downtown,
OW decentralization)
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Background/ Perspective
Residential Property Tax Comparison
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2009 Property Tax - Residential( for Municipalities with Populations over 100,000)
For a three bedroom, 1,200 sq ft detached bungalow with 1.5 baths and a single cargarage, on a 5,500 sq ft lot
(Source: BMA - Municipal Study 2009)
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
2011 Property Tax - Residential( for Municipalities with Populations over 100,000)
For a three bedroom 1,200 sq ft detached bungalow with 1.5 baths and a single cargarage, on a 5,500 sq ft lot
(Source: BMA - Municipal Study 2011)
SHIFTED 2 POSITIONS
2011 Group Average: $ 3,293 (2009 $ 3,196)2011 City of London: $ 3,079 (2009 $ 3,031)6
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Background/ Perspective
Commercial Property Tax Comparison
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2009 Property Tax - Commercial( for Municipalities with Populations over 100,000)
For prime location commercial office space, property taxes per sq ft of grossleaseable area
(Source: BMA - Municipal Study 2009)
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
2011 Property Tax - Commercial( for Municipalities with Populations over 100,000)
For prime location commercial office space, property taxes per sq ft of grossleaseable area
(Source: BMA - Municipal Study 2011)
SHIFTED 1
POSITION
2011 Group Average: $ 3.28/sq .ft (2009 $ 3.38/sq. ft)
2011 City of London: $ 2.23/sq ft (2009 $ 2.61/sq. ft)7
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Background/ Perspective
Industrial Property Tax Comparison
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
2009 Property Tax - Industrial( for Municipalities with Populations over 100,000)
For standard industrial property under 125,000 sq ft, newer construction, flexibledesign - taxes per sq ft of floor area basis
(Source: BMA - Municipal Study 2009)
$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
2011 Property Tax - Industrial( for Municipalities with Populations over 100,000)
For standard industrial property under 125,000 sq ft, newer construction, flexibledesign - taxes per sq ft of floor area basis
(Source: BMA - Municipal Study 2011)
SHIFTED 4 POSITIONs
2011 Group Average: $ 2.04/sq .ft (2009 $ 2.12/sq. ft)2011 City of London: $ 1.51/sq ft (2009 $ 1.76/sq. ft)8
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Background/ Perspective
3 Year Comparison of Municipal Property Tax
Levy Increases from Rates
Municipality 2010 2011 2012
3 Year
Average
Toronto 2.9% 0.0% 2.5% 1.8%
Ottawa 3.8% 2.4% 2.4% 2.9%
Chatham Kent 1.4% 1.4% 2.3% 1.7%Hamilton 2.0% 0.8% 0.9% 1.2%
Sudbury 2.5% 3.5% 2.8% 2.9%
Windsor 0.0% 0.0% 0.0% 0.0%
AVERAGE 2.1% 1.3% 1.8% 1.75%
London 1.86% 0.0% 0.0% 0.6%
Consumer Price Index
Based on change as of December
3.3% 2.0% 1.7% 2.3%
* Tax levy increases based on information identified on respective websites.9
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2011 and 2012 Tightening
To achieve 0% :
In 2012, a further $18.1 million in
adjustments comprising of:
One time funding sources
Service changes and reductions Position Management
Additional revenue
Provincial Upload
In 2011, $6.0 million in reductions
were achieved through salary and
wage freezes, position managementand cost containment initiatives.
$ 24.1 million10
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2013 2017 Operating Budget
Forecasts
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
20132014
20152016
2017
5.5%
3.8% 4.2% 3.6% 3.4%
Property
TaxL
evy
Years
Updated Tax Levy Forecast
(excluding impact of assessment growth)
2013 2014 2015 2016 2017 Total
Forecasted Tax Levy $ 493.0 m $ 511.8 m $ 533.1 m $ 552.0 m $ 571.0 m $ 2,661 m11
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2013 2017 Operating Budget
Forecasts
Forecasts do not include:
Additional funding for the Investment & Economic Prosperity Plan
Increased investment in municipal infrastructure to close infrastructure gap
Additional funding to meet targets as laid out in the Emerald Ash Borer Strategy
New initiatives, or enhanced service delivery of existing services
Items included in forecasts are:
Impact of contractual settlements
Financing costs associated with capital plans in keeping with Strategic Financial Plan
Increase to complement (Policing Services)
Anticipated increases in costs for fuel and energy
Continued upload of Ontario Works Benefit costs and Court Security costs
Moderate growth in transit
Continued position management initiatives
Increased contribution to Economic Development Reserve Fund (2013, 2014)
Strategic reduction in the reliance on the Operating Budget Contingency Reserve for
base funding
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2013 2014 2015 2016 2017 Total
Forecasted
Tax Levy$ 493.0 m $ 511.8 m $ 533.1 m $ 552.0 m $ 571.0 m $ 2,661 m
2013 2017 Operating Budget Forecasts
Compared to Proposed Targets
2013 2014 2015 2016 2017 Total
Forecasted
Tax Levy$ 493.0 m $ 511.8 m $ 533.1 m $ 552.0 m $ 571.0 m $ 2,661 m
Proposed Tax
Levy TARGET$ 485.0 m $ 500.2 m $ 517.3 m $ 532.8 m $ 547.3 m $ 2,583 m
Difference $ 8.0m $ 11.6 m $ 15.8 m $ 19.2 m $ 23.7 m $ 78 m
20132014
20152016
2017
AVERAGE
5.5%
3.8% 4.2%
3.6%3.4%
4.1%
Target Forecast
20132014
20152016
2017
AVERAGE
3.8%3.1% 3.4%
3.0%2.7% 3.2%
5.5%
3.8% 4.2%
3.6%3.4%
4.1%
Target Forecast
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Potential Impact of 2013 Targets
Somebody pays.either now or in the future.
14
Increase/ Decrease
2013 Property Tax Levy Increase based on forecast $ 25.6 million
Reduction required to meet 3.8% target $ - 8.0 million
Additional reductions required to achieve 0% $ - 17.6 million
Total impact to services in order to achieve 0% $ - 25.6 million
Two ways to achieve target:Permanent service reduction (expenditures)
Sustainable non property tax supported revenue
sources
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2013 Operating Budget Targets
Service/Source of change
2013 Maintain
Tax Levy
Requirement
in $ millions
At 3.8% Levy
Impact
$ millions
Cumulative
At 2% Levy
Impact
$ millions
Cumulative
At 0% Levy
Impact
$ millions
2012 Council Decisions 4.1 - -0.1 -4.1
London Police Service 4.3 -1.2 -2.5 -4.3
London Fire Services 1.6 - -0.5 -1.6
Land Ambulance 0.3 - -0.1 -0.3
Conservation Authorities 0.2 - -0.1 -0.2
Social Housing 0.5 -0.3 -0.3 -0.5
London Transit 1.3 - -0.9 -1.3
London Middlesex Housing Corp 1.1 -0.6 -1.0 -1.1
London Middlesex Health Unit - -0.3 -0.5 -0.7
Business Attraction & Retention 1.8 -0.3 -1.7 -1.8
Capital Costs and Contingencies 7.3 - -1.9 -6.8
Social Support and Long Term Care -2.5 -1.1 -1.1 -1.1
All other Services 5.7 -4.3 -5.8 -5.8
Total 25.7 -8.1 -16.5 -25.7
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2013 2017 Operating Budget Targets
Next Steps
March April May June July August September October November December
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