2014 budget overview - cornwall, ontario · the 2014 budget for the city of cornwall can be...

2014 Budget Overview February 03, 2014

Introduction

The 2014 Budget for the City of Cornwall can be summarized as follows:

This document has been prepared with a tax levy increase of 1.76% or $986,904. There is a proposed change in the tax ratio for the commercial class.

The ratio would be lowered to 1.9407 from 1.9650.

As a result of the 1.76% increase in the tax levy and the change in the commercial ratio, the residential tax rate would be reduced by 4.0%. This would mean the average residential property would have no increase in their municipal taxes in 2014. This is due to changes within assessments as well as shifts between tax classes. Capital projects total $5,776,000 versus $7,343,900 in 2013. With $1,627,100 ($1,500,600 in 2013) funded from the tax base. There is an additional $863,000 of capital which is proposed to be financed.

2013 2014 Variance

City Departments (net operating) 31,944,531 33,201,180 1,256,649

Protective Services (police,fire, EMS) 27,844,947 28,567,785 722,838

Non Departmental:

OMPF (Equalization Grant only) (5,740,000) (5,486,505) 253,495

Federal Gas Tax (2,819,952) (2,683,588) 136,364

Investment Income (660,000) (560,000) 100,000

Supplementary Taxation (1,812,000) (524,000) 1,288,000

Growth - New Assessment 0 (3,439,300) (3,439,300)

Allowance for Write Offs 767,000 1,303,000 536,000

Great West Life - Benefit Refund 0 (249,000) (249,000)

Other 1,051,750 1,209,946 158,196

Sub Total (9,213,202) (10,429,447) (1,216,245)

Net Operating Budget 50,576,276 51,339,518 763,242

Capital (tax base funded) 1,500,600 1,627,100 126,500

Community Agencies 4,088,617 4,185,779 97,162

Tax Levy Requirement 56,165,493 57,152,397 986,904

1.76%

Introduction con’t

Ontario Municipal Partnership Fund (OMPF)

2013 2014 Reduction

Equalization Grant $ 5,740,000 $ 5,062,900 $ 677,100

Transitional Assistance $ 2,707,400 $ 2,117,400 $ 590,000

Total $ 8,447,400 $ 7,180,300 $ 1,267,100

The City’s funding from the grant component of the Ontario Municipal Partnership Fund

(OMPF) has been reduced by $1,267,100 for 2014.

OMPF has been redesigned and will no longer provide grants for social programs

which has benefited the City of Cornwall in previous years.

OMPF will now provide support for the following areas:

1. Assessment Equalization

2. Northern Communities Grant

3. Rural Communities

4. Northern and Fiscal Circumstances Grant

It is important to note that the “Transitional Assistance” indicated above will most likely

be reduced in 2015 or be eliminated entirely.

Operating and Capital Summary

'13 Budget '14 Submission Variance

Revenue

Taxation $56,165,493 $57,152,397 $986,904

PIL & Suppl. Taxation $3,247,187 $5,440,457 $2,193,270

Operating $89,152,884 $91,186,051 $2,033,167

Capital $5,843,300 $4,148,900 -$1,694,400

Total Revenue $154,408,864 $157,927,805 $3,518,941

Expenditures

Operating $125,664,753 $130,275,049 $4,610,296

Capital $7,343,900 $5,776,000 -$1,567,900

Tfr Community Agencies $4,088,617 $4,185,779 $97,162

Police Services $17,350,165 $17,734,388 $384,223

Internal Transfers -$38,571 -$43,411 -$4,840

Total Expenditures $154,408,864 $157,927,805 $3,518,941

1.76% Levy increase. Increase includes taxation now on the 2014 roll of $3,439,300 (growth) a decrease of $1,288,000 in supplementary taxation for 2014.

Operating Summary

'13 Budget '14 Submission

Total Revenue (excluding taxation) $92,400,071 $96,626,508

Less:

Expenditures -$125,664,753 -$130,275,049

Tfr Community Agencies -$4,088,617 -$4,185,779

Police Services -$17,350,165 -$17,734,388

Internal Transfers $38,571 $43,411

Total Expenditures -$147,064,964 -$152,151,805

Total Operating financed by taxation -$54,664,893 -$55,525,297

% change 1.57%

$ change $860,404

Capital Summary


Revenue

Federal Gas Tax $4,245,000 $3,060,000

EMS Ambulances/Vehicles (Reserve) $560,000 $498,000

Provincial Gas Tax (Transit) $182,500 $240,000

United Counties (GSDL Capital) $90,800 $90,900

Net Reserves $765,000 $260,000

Less:

Gross Capital Costs $7,343,900 $5,776,000

Total Capital financed by taxation -$1,500,600 -$1,627,100

% increase 8.43%

$ increase $126,500

Capital Summary Gross

Department Capital TAX BASE GAS TAX RESERVES COUNTIES FINANCING

FINANCIAL SERVICES 80,000 80,000

GLEN STOR DUN LODGE 303,000 212,100 90,900

FIRE SERVICES 145,000 145,000

EMERGENCY MEDICAL SERVICES 498,000 498,000

MW FLEET 718,000 718,000

MW FACILITIES 265,000 60,000 205,000

TRAFFIC SIGNALS & STREETLIGHTING 375,000 375,000

TRANSIT SERVICES 240,000 240,000

TRANSPORTATION CAPACITY 275,000 100,000 175,000

ROAD NETWORK 2,200,000 100,000 2,100,000

STRUCTURES 95,000 70,000 25,000

ACTIVE TRANSPORTATION - SIDEWALKS 185,000 185,000

ACTIVE TRANSPORTATION - BICYCLE INFR. 385,000 385,000

SOLID WASTE 400,000 210,000 190,000

PARKING 40,000 40,000

PARKS & RECREATION SERVICES 435,000 420,000 15,000

FUNDING SOURCE

TOTAL 6,639,000 1,627,100 3,300,000 758,000 90,900 863,000

Operating Revenue (excluding Police Services)


PIL & Suppl. Taxation $3,282,187 $5,460,457

Provincial $57,089,368 $58,339,662

Federal $2,886,652 $2,716,288

Municipal $7,256,178 $6,978,299

User Fees $16,936,708 $16,704,386

Internal Tfr $3,880,647 $4,916,225

Reserves $1,068,331 $1,511,191

Subtotal $92,400,071 $96,626,508

% increase 4.57%

$ increase $4,226,437

Major variances (000s):

$3,439 2013 Growth

$2,064 Provincial Funding

$1.8M Income Mtce

$745 Child Care

($416) CHPI

$1,027 Direct Recoveries

$863 Tfrs within S&H Services

$ 443 From Reserve

$706 Social and Housing Reserves

$108 Election Reserve

$ 87 EMS Defib. LTD

($ 60) 2012 Surplus utilized in 2013

($375) Building Reserve

$ 346 GSDL Revenue

$ 249 GWL Recovery

($1,288) Supplementary Taxation

($1,267) OMPF

($ 278) United Counties

($ 207) Tipping Fees

($ 165) Recycled Materials

($ 100) Inv. Income

Operating Expenditures (excluding Police Services)

The departmental requests resulted in a year over year expenditure increase of $4,625,296. This represents a 3.68% increase in expenditures from the 2013 approved budget


Salary $51,376,908 $52,424,065

PoG $8,227,998 $8,263,962

S&R $23,821,068 $25,848,807

Financial $42,203,779 $43,718,215

Total $125,629,753 $130,255,049

% increase 3.68%

$ increase $4,625,296

Salary and Benefits 2.04% or $1,047,157

Purchase of Goods 0.44% or $35,964

Services and Rents 8.51% or $2,027,739

Financial

3.59% or $1,514,436

Salaries & Benefits

(excluding Police Services)


S & B $51,376,908 $52,424,065

% increase 2.04%

$ increase $1,047,157

Major variances primarily relates to increases/(decreases) in (000’s):

• $1,059 Full-Time $900 Contractual Obligations

$158 Increase in FTE

• $ 24 Part-Time

• $ 43 Overtime $ 25 GSDL

$ 17 EMS

• ($ 115) Benefits $143 OMERS (there was rate increase in 2014)

$136 Benefits (includes CPP, EI, EHT)

($392) Benefits savings (including Dental,

Medical, Vision, LTD, etc.)

• $ 39 Election Staff

Purchase of Goods Comparison (excluding Police Services)


PoG $8,227,998 $8,263,962

% increase 0.44%

$ increase $35,964


$78 Utilities

$54 Sand, Salt, Landscape Material

$19 Food Provisions

$17 Uniform, Clothing, Safety Supplies

($52) Gasoline & Fuel

($81) Parts, Accessories, Repairs

Services & Rents Comparison (excluding Police Services)


S&R $23,821,068 $25,848,807

% increase 8.51%

$ increase $2,027,739


$1.75M Social & Housing Services $616K Social Housing - CHPI

$1.1M Child Care

$117K Vehicles Municipal Services

$55 Leased vehicles

$63 City Internal Rental Charge

City fleet managed by MW, financing

charges for LTD for vehicles and equipment.

$105K Computer Mtce Agreements $17K upgrade FIRE FDM software (training module)

$ 46K Postage

Financial Comparison (excluding Police Services)


Financial 4,377,122 5,230,282

SSS Tfr 19,938,007 21,399,995

SH Tfr 12,812,543 12,009,487

Reserves 5,076,107 5,078,451

Total 42,203,779 43,718,215

% increase 3.59%

$ increase 1,514,436


• $ 591 Social and Housing Programs $254K CHPI

$346K CAHC

$1.4M Assistance for Unemployed transferred from SH to SSS

$ 536 Tax Write Offs

$ 140 Hardware/Software charge backs

• $ 125 Long Term Debt $24K Fire Vehicles

$87K EMS Defibs

$ 90 Tax Increment Grants

($ 59) Waste Credit $105K budgeted in 2013; $46K in 2014

General Gov‘t 8%

Social & Family Services 10%

Infrastructure & MW 14%

Solid Waste 2%

Transit Services 4%

Planning & Building Services 2%

Economic Development 1%

Parks and Recreation 10%

Community Agencies 6%

Emergency Medical Services 3%

Fire Services 14%

Police Services 26%

2014 Summary by Department

Operating and Capital

Budget 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

EMS 631,551 1,547,074 1,362,670 1,543,869 1,411,132 1,674,427 1,919,013 1,984,874 2,044,413 2,094,876

Fire 5,454,069 6,083,144 6,170,943 6,753,890 7,036,676 7,204,948 7,542,941 7,913,909 8,448,356 8,736,507

Police 12,742,278 13,274,138 13,967,348 14,287,378 14,701,519 15,470,795 16,191,396 16,575,144 17,350,165 17,734,388

Total 18,827,898 20,904,356 21,500,961 22,585,137 23,149,327 24,350,170 25,653,350 26,473,927 27,842,934 28,565,771

Year over Year Increase 8.33% 11.03% 2.85% 5.04% 2.50% 5.19% 5.35% 3.20% 5.17% 2.60%

Tax Levy 47,355,196 48,415,949 48,974,228 50,306,438 50,301,854 50,601,854 52,437,847 53,721,264 56,165,493 60,591,697

Budget as a percentage

of Tax Levy 39.76% 43.18% 43.90% 44.90% 46.02% 48.12% 48.92% 49.28% 49.57% 47.14%

Protection to Persons & Property

2013 2014 Increase

Tax Levy 56,165,493 60,591,697 4,426,204

Combined Budgets for PPP 27,842,934 28,565,771 722,837

49.57% 47.14%

MPAC Phased In Assessment 2013 – 2016 (Residential)

MPAC has completed an assessment update for 2012 market values of properties throughout the province. The 2012 market values will be phased in over the next four years from 2013 to 2016. For example: Average Value 2008 2012 Single Family $139,000 $163,000 16.18% Semi-Detached $121,000 $148,000 21.85% Condominiums $130,000 $151,000 15.90%

The average residential property in Cornwall has increased by 18%. The provincial average is 17%.

The average residential property will experience a phased in increase of 4.5% per year for the years 2013 through to 2016.

In a comparison of assessed values for commercial properties from 2012 to 2013 (as a result of the market update completed in 2012):

53 properties had a decrease in assessed value

255 properties had an increase between 0 – 2%





262 properties had an increase greater than 10%

MPAC Phased In Assessment 2013 – 2016 (Commercial)

Distribution Centres & Assessment Appeals

• Prior to 2013, MPAC had applied a Market Adjustment Factor (MAF) to the assessments for distribution centres across Ontario.

• The MAF reduced their assessed value by 40%.

• In 2013, the MAF was eliminated.

• The distribution centres assessments went up between 86 – 96% on the 2012 CVA to be phased in over the 4 year period 2013 to 2016.

• The 3 major distribution centres in Cornwall have filed appeals against their assessed values.

• The combined 2012 CVA value for these three properties is approximately $271 million.

Allowance for Appeals on Assessment Large Commercial Properties

Cummulative

2013-2016 Estimated

Estimated Taxes Allowance

Current MPAC Assessment $25,541,316 $0

10% Reduction in Assessment $23,334,324 ($2,206,992)




A 10% reduction in assessed value would result in a write off of $2.2M in tax revenue for the four years (2013-2016). In 2014 an additional $500,000 has been budgeted as an allowance for appeals on commercial properties. There is also $500,000 in a Tax Stabilization Reserve. Additional allowances will likely be required in 2015 & 2016.

Tax Ratios by Class

Class Ratio 2014 2013 Change

Residential 1.0000 0.01450917 0.01511323 96.00% -4.00%

Multi-Res 2.3492 0.03408494 0.03550401 96.00% -4.00%

Commercial 1.9407 0.02815795 0.02969751 94.82% -5.18%

Industrial 2.6300 0.03815912 0.03974781 96.00% -4.00%

Pipeline 1.5217 0.02207860 0.02299781 96.00% -4.00%

Farm 0.2500 0.00362729 0.00377831 96.00% -4.00%

Class Ratio 2014 2013 Change

Residential 1.0000 0.01444571 0.01511323 95.58% -4.42%

Multi-Res 2.3492 0.03393587 0.03550401 95.58% -4.42%

Commercial 1.9650 0.02838583 0.02969751 95.58% -4.42%

Industrial 2.6300 0.03799223 0.03974781 95.58% -4.42%

Pipeline 1.5217 0.02198204 0.02299781 95.58% -4.42%

Farm 0.2500 0.00361143 0.00377831 95.58% -4.42%

Current Ratios

Proposed Ratios

A reduction in the commercial ratio of 0.0243 will result in a 5.18% reduction in the commercial tax rate.

Comparison of Tax Levy by Class:

Taxation – Assessment Growth

The chart above would yield a tax rate reduction of 4.00%, for all classes except the commercial class which would see a 5.18% rate reduction.

2013 SHARE 2014 SHARE Difference 2013 2014

Residential 30,876,649.04 31,452,870.99 576,221.95 54.97% 51.91%

Multi-Res 5,456,813.93 5,481,826.51 25,012.58 9.72% 9.05%

Commercial 17,503,851.16 21,257,244.21 3,753,393.05 31.16% 35.08%

Industrial 2,105,628.04 2,174,207.13 68,579.09 3.75% 3.59%

Pipeline 211,706.34 212,992.29 1,285.95 0.38% 0.35%

Farm 10,844.49 12,555.86 1,711.37 0.02% 0.02%

56,165,493.00 60,591,697.00 4,426,204.00 100.00% 100.00%

Taxation – Assessment Growth con’t.

MPAC Assessment

2013 SHARE 2014 SHARE Difference Assessment Growth

(Approximate) (Approximate)

Residential 2,043,020,743$ 2,167,792,560$ 124,771,817$ 92,486,132$ 32,285,685$

Multi-Res 153,695,695$ 160,828,393$ 7,132,698$ 14,085,322$ (6,952,624)$

Commercial 595,432,165$ 762,718,729$ 167,286,564$ 59,254,993$ 108,031,571$

Industrial 56,260,735$ 60,433,385$ 4,172,650$ 6,132,903$ (1,960,253)$

Pipeline 9,205,500$ 9,647,000$ 441,500$ 162,000$ 279,500$

Farm 2,870,200$ 3,461,497$ 591,297$ 521,402$ 69,895$

2,860,485,038$ 3,164,881,564$ 304,396,526$ 172,642,752$ 131,753,774$

Changes in Assessment:

MPAC Assessment is approximate and based on the 2012 Phased-In Assessment Report for the City of Cornwall. Note: 2013 was the first year of the four year phase in. Assessment Growth is a result of new development within the City of Cornwall and will generate $3,439,300 in additional tax revenue in 2014. Supplementary taxation for 2014 is forecasted to be $524,000 which is $1,288,000 lower than 2013.

Change in Education Tax Rate 2013 2014

Tax Class Rate Rate Decrease

Residential 0.00212000 0.00203000 -4.25%

Multi-Residential 0.00212000 0.00203000 -4.25%

Commercial 0.01490000 0.01460000 -2.01%

Industrial 0.01590000 0.01560000 -1.89%

Pipeline 0.01590000 0.01560000 -1.89%

Farmlands/Managed Forests 0.00053000 0.00050800 -4.15%

New Commercial/Industrial 0.01260000 0.01220000 -3.17%

Education Rates are set by the Provincial Government through the Education Act (Ontario Regulation 400/98). Education rates for the residential class have been reduced and will offset the impact of increased assessment. However, the commercial and industrial classes will see increases. The education rate for the commercial class is 7.19 times higher than the residential class (2013 – 7.028).

Change in Residential Tax Rate 2007-2014

2007 1,692$ 264$ 1,956$

2008 1,736$ 264$ 2,000$

2009 1,708$ 252$ 1,960$

2010 1,637$ 241$ 1,878$

2011 1,590$ 231$ 1,821$

2012 1,554$ 221$ 1,775$

2013 1,511$ 212$ 1,723$

2014 1,451$ 203$ 1,654$

Residential Taxes per $100,000

of Assessment

Year Municipal Education Total

-$302 or -15.4%

Annual combined municipal and education taxes for the residential sector has dropped 15.4% since 2007.

-14.2% -23.1%

$1,300

$1,350

$1,400

$1,450

$1,500

$1,550

$1,600

$1,650

$1,700

$1,750

$1,800

2007 2008 2009 2010 2011 2012 2013 2014

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Total Residential Taxes per $100,000 Assessment

Change in Commercial Tax Rates

2007 – 2014

2007 3,325$ 2,421$ 5,746$

2008 3,412$ 2,405$ 5,816$

2009 3,356$ 2,300$ 5,656$

2010 3,216$ 2,150$ 5,366$

2011 3,124$ 1,730$ 4,854$

2012 3,054$ 1,490$ 4,544$

2013 2,970$ 1,490$ 4,460$

2014 2,816$ 1,460$ 4,276$

Commercial Taxes per $100,000

of Assessment

Year Municipal Education Total

Annual combined municipal and education taxes for the commercial sector has dropped 25.6% since 2007.

-15.3% -39.7% -$1,470 or -25.6%

$2,500

$2,750

$3,000

$3,250

$3,500

2007 2008 2009 2010 2011 2012 2013 2014

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Total Commercial Taxes per $100,000 Assessment

Community Agencies Municipal Partners & Mandatory Funding Requests:

Organization Name 2013 Approved 2014 Requests $ Increase % Increase

Cornwall Public Library $1,982,538 $2,003,359 $20,821 1.1%

Eastern Ontario Health Unit $692,052 $697,858 $5,806 0.8%

Raisin Region Conservation Authority $448,000 $461,440 $13,440 3.0%

Cornwall Regional Airport $159,784 $157,654 ($2,130) -1.3%

St. Lawrence College (year 5 of 10) $100,000 $100,000 $0 0.0%

Heart of the City $30,000 $30,000 $0 0.0%

Heritage Cornwall $10,385 $49,610 $39,225 377.7%

Eastern Ontario Regional Network (year 2 of 10) $25,858 $25,858 $0 0.0%

Medical Recruitment/Scholarship $75,000 $75,000 $0 0.0%

Total $3,523,617 $3,600,779 $77,162 2.2%

There is also $560,000 included in the budget for the grant applications.

28

Strategic Plan

• The Ten Year Housing and Homelessness Plan has been completed and approved by the Ministry of Municipal Affairs and Housing.

• Elder Friendly Community

(GSDL, EMS and Social & Housing Services)

Strategic Plan Progress in 2014

Pillar 1


Pillar 2

• Economic Development will be presenting an update on the Marketing Plan on Wednesday to the BSC.


Pillar 3

• Police Services will be completing a Strategic Plan

• The Fire Master Plan will be completed

• Results from the EMS Deployment Review will be shared on Thursday

• Arts & Culture Needs Assessment will be undertaken in 2014


Pillar 4 2014 Budget includes:

• Enhancements to the Waterfront Bike Path with 4 rest stops with benches, concrete pad & garbage cans and picnic tables

• Upgrade signs and paving in the Eco Park/new bridge location

• Pointe Maligne will also have a rest stop, pad & picnic table area


Pillar 5 • Development Charges Study

partially funded $30K

• Active Transportation continues with capital projects for Sidewalks - $185K and Bicycle Infrastructure $385K

• Energy Efficient Measures - $40K

• Service Delivery Review – Social & Housing Services

• Employee Engagement Survey to be completed

• Budget Process – changes in structure as well as community engagement survey

A random sample of 500 properties results in an average municipal tax increase of $0, an average increase of 0% in 2014. Page 34

Conclusion

The proposed tax levy increase of 1.76% and a reduction of the Commercial Class Ratio of

0.0243 will result in a municipal tax rate decrease of 4.00% for all classes except

Commercial which will be reduced by 5.18%.

2014 budget overview - cornwall, ontario · the 2014 budget for the city of cornwall can be...

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