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2018 Town of Parry Sound BudgetPRESENTATION TO COUNCIL DECEMBER 12, 2017PRESENTED BY TREVOR PINN, CPA, CADIRECTOR OF FINANCE AND POA COURT SERVICES
Agenda
Layout of this presentation follows the budget binder
Specific questions regarding what and why will be referred to appropriate director
Deliberations on specific items will be after the presentation or at the deliberation meetings in January Ensures the whole picture is presented first
Direction for the 2018 Budget
• Rate increase between 1.7% and 2.4% for inflation• Additional 1.8% per Asset Management Plan recommendations• Total range is 3.5% to 4.2%• Proposed budget is 3.5%
Approved Budget and Financial Controls Policy
• We have identified items in the 2018 budget which further the Strategic Plan
• As in the past, we can’t afford to do everything
2015 to 2018 Strategic Plan
Determining the Tax Levy
(Page 4)
Start with PSAB Statement of Operations Remove Amortization Expense
Subtract grants/other revenue for capital items not included in budget
Add capital costs for all projects
Subtract transfers from reserves and reserve funds
Add transfers to reserves and reserve funds
Subtract new debt to be issued in 2018
Add principal payment on existing debt
Determining the Levy Changes in 2018
Changed slightly in 2018 budget to break out “Operating” and “Capital”• More transparency on where tax dollars are being spent
Included in Capital
• Any transfers to/from reserves and reserve funds intended for capital purchases
• New debt issued during the year• Principal payments for existing debt• Revenue from grants specific for capital items
$0.27 of every $1.00 tax dollar is going towards the capital budget
Items Considered and Removed(Administration and Development and Leisure Services)
Administration Cost Savings on operating
Old Firehall $3,700
CN Station $10,400
Remove upgrade of stairs at Municipal Office $20,000
Remove expansion of Wi-Fi Downtown $18,000
Development and Leisure Services Reductions in Building Inspections
Misc Materials $200
Books and subscriptions $200
Staff training (1 year) $1,000
Reduce planning consulting fees $2,000
Economic Development Reduce EDO Contract $45,000
Reduce conventions $2,000
Items Considered and Removed(Emergency and Protective Services and Land Ambulance)
Emergency and Protective Services Reduce revenues for shared by-
law enforcement $15,000
Defer replacement of retaining wall at Firehall $135,200
Land Ambulance Reduce legal costs $1,000
Reduce misc contracts $2,000
Reduce conventions $1,000
Items Considered and Removed(Operations, Parks and Rec and POA)
OperationsRemove Hillcrest Cemetery chapel and mausoleum repairs $56,000
Do not proceed with public water tap $45,000
Parks and RecreationOperating costs for proposed splash pad $16,000
Eliminate leisure guide $3,500
Defer development of splash pad $270,000
Defer replacement of irrigation system at Waubuno Beach $36,000
Defer 1-ton truck (will upgrade 2020 truck in 2019) $75,000
Do not proceed with Sail Parry Sound Trail repairs $50,000
Remove Olympia room repairs $10,000
Provincial Offences Act Court
Reduce Town share of revenue $3,900
Reduce travel costs $500
Reduce conferences $1,000
New Operating Initiatives(Administration and IT)
Increased funding for OMPF $176,200
Increased rental revenue $19,000
Increased investment revenue $24,000
New Corporate Communications Officer $85,800
Recruiter for CAO and Treasurer $50,000
2018 Elections $18,450
Licence for software to prepare audit and financial statements $1,700 (saves $3,000 in audit fees)
Service agreement for mail machine purchased in 2017 $1,100
Creation of shared GIS resource $40,000 (are pursuing intern options)
New Operating Initiatives(Council)
Provide Council $9,000 for grants to organizations outside of Municipal Assistance Program
Design for new coat of arms $5,000
New Operating Initiatives(Development and Leisure Services)
Increased revenues for building department $2,500
Tourism intern $8,500 (net)
Survey on two properties $15,000
Repair highway entrance signs $1,000
Increase Façade Improvement Program $55,000
EDO contract increased by $4,500
Increased advertising for cruises $1,500
Increased waterfront advisory committee materials and signage $7,000
Feasibility study for Parry Sound Innovation Park $60,000
Implement full time EDO $76,600
Increased repairs for Big Sound Marina $19,000
Increased repairs for Town Dock $10,000
New Operating Initiatives(Emergency and Protective Services)
Adjustment for 2015 and 2016 OPP billing $76,000 This is in addition to regular bill
increase of $110,200
Purchase of HAZMAT equipment for mutual aid $10,000 CP Rail and other municipalities
provided funding in 2016 for the purchase of these materials
Photo credit: Parry Sound North Star
New Operating Initiatives(Operations)
Road needs study $50,000
Increased funding for summer students to reflect longer time served $34,000
Increased gravel maintenance to combat washouts $5,000
Bridge needs study $65,000
Engineering for railway crossings to determine if able to have whistle cessation in Town $20,000
Additional staff at Transfer Station $55,200 (net of increase in revenue from municipal partners)
Retrofit lighting at Operations Yard with LED $4,000
New Operating Initiatives(Parks and Recreation)
Annualized cost for Community Recreation Programmer $36,100
Funding for intern at HUB $2,000 Increase summer students to reflect
longer period of time $40,000 Replace wood benches with Ipe
$5,000 Repairs and maintenance on Fitness
Trail bridge $5,000 Beach house painting at Waubuno
$3,000 Replace fountain pump at Market
Square $5,000
Repair warning track at Kinsman Park $11,000
Replace buoy line for swim enclosure $5,000
Replace linens for rentals $1,000
Interest cost on 2017 debenture (BSM Dock B) $3,805
Purchase self-watering flower baskets $14,500
New interest cost on BOCC roof debt $2,942
New Operating Initiatives(POA, Water and WastewaterProvincial Offences ActStaffing reorganization $24,000
Promotional items for 2018 MCMA Conference $1,000
WastewaterInfiltration and inflow study for storm/sanitary sewer system $50,000
WaterProvide annual funding for bulk water station repairs $1,000
Membrane tank coating review and plant efficiency review $57,000
Budget Process 2018
Planning
• Priority Setting Meeting
• Online Public Consultation
• Budget Compilation
Review
• Management Review
• Budget Binders
• Deliberations
Approval
• Temporary Borrowing Bylaw
• Tax Ratio Bylaw
• Tax Policy Bylaw
• Budget Bylaw
Strategic Plan 2015 to 2018
Active Living
Growth and Development
Organizational Excellence
Our Community
West Parry Sound Area Cooperation
BMA Survey 2017 –Social Economic Indicators
Population increase of 3.5% since last census, best in the North
Aging population (27% over 65, average is 17%)
Relatively low building construction
Below average home value, higher than North average
Below average assessment per capita, higher than North average
Significantly low household income (3rd lowest in survey)
BMA Survey 2017 – Sustainability
Are we sustainable
Strong financial position per capita ($1,228 vs $454)
Average Tax asset consumption (42.8% vs 42.3%) MMA considers 26% to 50% “moderately
new”
Is a higher figure than 2016, assets are getting older
Average Net Financial Liabilities Ratio
BMA Survey 2017 - Vulnerability
How dependent are we on others
Tax reserves of 110.5% of taxation (71.3% avg) and 80.1% own source revenue (average 51%
Reserves/Capita of $1,709 vs $685
Includes land ambulance reserves and reserve funds, most other municipalities do not provide this service therefore ratio is likely higher
Debt charges of 4.2% own source revenue (vs 4.4% avg)
Debt / capita
Total $2,248 vs $769
Tax $896 vs $539
Debt to reserve ratio 0.8 (vs 1)
Target is 1:1
BMA Survey - Flexibility
Taxes receivable 4.6% (vs 6.0%) We are collecting a good portion of
the taxes receivable
Target is 8% or lower
Rates coverage ratio 62.8% vs 90.8% Measure of ability to cover costs with
own revenue
MMA basic target is 40% to 60%
Note: the EMS expenses are likely throwing ratio lower
Advanced is >90%, average is 90.8% most municipalities are covering 90% of their own costs
We are dependent on grants
BMA Survey - Taxes
Levy per capita is below survey average $1,498 vs $1,510
Levy per $100,000 assessment is above average $1,473 vs $1,122 We have an urbanized
municipality with low assessment base
No development charges (average is $30,512)
Tax ratios are below averge Cost as a % of income is higher
than average 4.7% vs 3.8% (6.6% vs 4.9% including water)
Assessment Growth
Slow assessment growth from 2012 to 2016
In 2017 assessment declined Several large commercial appeals
settled
First year in reassessment cycle (all decreases occur in 2017, increases are phased in over 4 years)
-10.0%
-8.0%
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
2012 2013 2014 2015 2016 2017
Percentage Tax Assessment Change Y/Y
Residential Taxable Commercial Taxable
Industrial Taxable Other Taxable
Sources of Revenue
Total Property Taxation OMPF Funding
11,228,832
10,968,020
11,233,338
11,877,853
12,682,927
12,245,318
2012 2013 2014 2015 2016 2017Budget
Total Taxation
1,978,700 1,957,000
1,863,100
1,784,900
1,720,700
1,662,200
2012 2013 2014 2015 2016 2017Budget
OMPF Funding
Grant Revenue
Federal and Provincial Grants Municipal Grants (EMS)
4,043,550 4,438,201
6,747,183
6,160,038 6,463,192
5,274,918
489,667 407,090 397,206 421,143 954,921
458,950 28,170 20,329 19,322 35,654 129,509 16,783
2012 2013 2014 2015 2016 2017Budget
Ontario Grants Canada Grants Other Income
3,557,850 3,479,035 3,599,929
3,969,722 3,807,412 3,931,500
28,170 20,329 19,322 35,654 129,509 16,783
2012 2013 2014 2015 2016 2017Budget
Other Municipal Grants Other Income
Other Income and Licenses
User Charges Licenses and Permits
5,355,449
6,406,104 6,330,308 6,098,236
6,525,338 6,407,060
2012 2013 2014 2015 2016 2017Budget
User Charges
121,981 118,761
240,788
119,976
193,417
128,500
2012 2013 2014 2015 2016 2017Budget
Licenses and Permits
Fines and Penalties/Interest
Fines Penalties and Interest
1,248,646
1,286,955
1,410,464
1,447,400
1,233,945
1,444,800
2012 2013 2014 2015 2016 2017Budget
Fines
112,699 123,063
138,908 135,053 138,039 130,000
2012 2013 2014 2015 2016 2017Budget
Penalties and Interest
Investment Income and Other Income
Investment Income Other Income
384,559 405,022
2,177,091
414,071 436,910 344,475
2012 2013 2014 2015 2016 2017Budget
550,654 527,139 517,988
568,720 528,449
460,455
28,170 20,329 19,322 35,654
129,509
16,783
2012 2013 2014 2015 2016 2017Budget
Rents, Concessions Other Income
Expenditures (without EMS)
30% is salaries and wages
21% is amortization
21% is contracted services
Interest expense is only 3% of total expenditures
30%
12%
21%
7%
3%
6%
21%
0%
2016 ACTUAL (WITHOUT EMS)
Salaries, wages &benefits
Materials
Contracted Services
Rent and FinancialExpenses
Interest on Long-termDebt
External transfers
Amortization
Inter-segment transfers
Capital Budget – Chief Administrative Officer
Administration Garbage Room $20,000
Renovate front lobby area $30,000
Replace gas line to power generator $7,500
Information Technology Laptop and Desktop Replacement
$10,200
Council meeting paperless devices $11,700
Replacement of networking infrastructure $23,200
Replacement of phone systems $38,000
POA Printer $2,000
Capital Budget – Emergency and Protective Services
Fire Pooled gear $37,000
Personal protective equipment $12,900
Self-Contained Breathing Apparatus $275,000
Convert firehall to natural gas $20,000
Contribution to area training facility $7,691
By-law Replace By-law Vehicle
Capital Budget – Development and Leisure ServicesDevelopmentTown Dock lights and electrical services $40,000 (incl grant)
Town Dock roof $20,000
Repair Big Sound Marina water service $30,000
Parks and RecreationBOCC ice pad replacement $1,126,400
Replace Mission Park playground equipment $32,000
Install lights at dog park $2,000
Replace lights at tennis courts $3,000
Replace lights at outdoor ice rink $9,000
Skate board park resurfacing from 2017 $20,000
Stockey CentreReplace exterior building sign $20,000
Replace roof and siding $1,411,050
Replace marquis sign $20,000
Replace HVAC $25,000
Create gift shop design $5,000
Capital Budget – Public Works
Replace sidewalk plow $165,200
Replace vacuum truck $350,000
Hillcrest Cemetery Storage shed $10,000
Monument restoration $15,000
Cyclone rake $5,000
Pillar repairs $20,000
Transfer Station compactors $100,000
Storm sewer replacement Laird/Mapleview $50,000
Lining of Parry Sound Drive culverts $150,000
Portable traffic lights $40,000
Replacement of traffic light control systems $60,000
Purchase of storm sewer locator $10,000
Replace trackless blade $7,500
Operations Yard HVAC $10,000
Hot water tank to gas $5,000
Fitness Trail behind McNabb $8,000
Logan’s lane retaining wall $150,000
Isabella Street alignment $1,380,272
Emily Street $197,190
Waubeek Street $2,162,289
Paving replacement $250,000
Capital Budget – Water and Wastewater
Wastewater Replace SPS 13 control panel
$40,000 WWTP windows $20,000 SPS 10 wet well $20,000 SPS 3 upgrade $100,000 SPS 9 replacement $300,000 Waubeek St $2,773,384 Emily St $1,369,314
Water Rotork actuators $25,000 CLA-VAL $25,000 Vacuum pump upgrade $30,000 Insulate gallery pumps $45,000 WTP roof landscaping $5,000 SCADA hardware $100,000 WTP HVAC $30,000 Waubeek St $2,289,287 Emily St $1,628,126 Kate St watermain $50,000
Asset Management and Long Term Planning
This is the second year of 1.8% capital levy for asset management
Steps taken in past 4 years 20 year fleet plan with annual
contribution
20 year rolling equipment plan with annual plan
10 year IT plan with increasing annual contribution
10 year fire plan with annual contribution
Water and Wastewater rate study performed in 2012 allowed for proper funding to system $-
$500,000.00
$1,000,000.00
$1,500,000.00
$2,000,000.00
$2,500,000.00
$3,000,000.00
$3,500,000.00
$4,000,000.00
$4,500,000.00
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
Annual Capital Levy for the Year
Debt Management
Proposed $9.2 million debenture in 2018 BOCC floor replacement (critical)
Stockey Centre roof replacement (critical)
Emily Street reconstruction (committed)
Waubeek Street reconstruction (critical and committed)
Isabella Street realignment (safety concerns and funding application in)
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
2018 2019 2020 2021 2022
Town of Parry Sound Total Debt 2017 to 2021
New Debt Ending Balance
Total Existing Debt EndingBalance
Tax Debt vs Tax Supported Debt
Tax debt is funding by the taxpayer (based on assessment of property)
Tax supported debt is paid by the water/wastewater rate payer (based on usage of water / fee paid)
2018 2019 2020 2021 2022Tax Supported Debt $10,016, $9,477,9 $8,938,4 $8,398,0 $7,690,9User Fee Supported $12,241, $11,306, $10,358, $9,732,6 $9,106,5
$-
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
Closing Debt - Tax Supported vs User Fee Supported 2018 to 2022
Debt Servicing Costs 2018 to 2022
Based on existing and 2018 debenture
2018 2019 2020 2021 2022Interest Payments 642,699 617,539 864,766 809,099 991,569Principal Repayments $958,369 $998,427 $1,473,769 $1,487,540 $1,566,445
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
Debt Servicing Costs - 2017 to 2021
Projected Debt
Based on prioritized projects in May 2016 and May 2017 All are assumed to be 20 years at 3.18% (costs will fluctuate based on interest, debt
servicing cost will also vary based on term)
Timeline (most aggressive) 2021
Great North Rd reconstruction
2022 Parry Sound Road Extension Waterfront development Champagne Street pumping station replacement
2023 Wastewater Treatment Plant expansion Parry Sound Innovation Park West Parry Sound Aquatic Centre (pool)
Projected Debt Servicing Costs 2018 to 2051
-
1,000,000.00
2,000,000.00
3,000,000.00
4,000,000.00
5,000,000.00
6,000,000.00
7,000,000.00
Projected Debt Servicing Costs 2018 to 2051Existing, New and Projected
Total Existing Debt Total New Debt Total Projected Debt
Annual Repayment Limit (25% of Net Revenues) Repayment Limit at 10% of Net Revenues Repayment Limit at 15% of Net Revenues
Debt Management
Legal limit is 25% of own source revenue Recommending a target of 10%
Can go above 10% to 15% provided there is a plan to get back to 10% within a reasonable timeframe
Currently below 10% limit Will go to almost 15% based on 2018 debenture Will be back to 10% within 5 years, also debenture is for existing critical
asset replacement.
If all of the projects listed previously are completed in the next 10 years it is highly likely that the legal limit will be exceeded
What are we putting into Reserves
$5,000 into Waste Management Reserve
(1/4 of compost program for future
grinding needs)
$25,000 into Parks Reserve for playground
equipment replacement
$28,569 into Emergency Capital Asset
Replacement Reserve for contingent capital replacement needs
$75,310 into Equipment Replacement Reserve for rolling stock 20 year
plan
$86,000 into Equipment Replacement Reserve
for fire equipment replacement 10 year
plan
$167,000 into Building Replacement Reserve
for operations shop (salt shed replacement) (1 of
3 years)
$439,114 into Fleet Replacement Reserve (annual contribution)
$47,000 into IT Reserve ($7,000 for operating
needs $40,000 for capital)
$100,000 into Tax Rate Stabilization Reserve
(contingency for Council)
$1,085,189 into Wastewater Stabilization
Reserve (user fee)
$525,118 into Water Stabilization Reserve
(user fees)
What are Reserves Funding
Elections Reserve $15,000 (municipal
election)
Police Stabilization Reserve $30,600
(extra billing)
Stockey Centre Reserve $55,000 (capital items)
Parks Reserve $45,000 (capital
items)
Infrastructure Replacement
Reserve $210,000 (capital items)
Equipment Replacement
Reserve $332,400 (capital items)
Building Replacement
Reserve $105,200 (capital items)
Fleet Replacement Reserves $553,100
(fleet plan)
IT Replacement Reserves $45,100
(capital items)
Tax Rate Stabilization
Reserve $176,900 (operating needs)
Water and Wastewater
Reserves (capital needs)
Reserve Funds
Interest is reinvested into reserve funds $120,234 being contributed into Capital Asset Legacy Fund (LED) $7,691 being taken from Fire Training Reserve Fund for contribution
to regional training centre $410,000 is being contributed and $531,000 being taken from EMS
Equipment Reserve Fund for Land Ambulance program $10,000 taken from BOHF Special Projects Reserve Fund for capital
project
