OPERATING OVERVIEW

Operating - 2

2018-2020 Budget Summary OPER-3

Residential Tax Bill Information OPER-4

Municipal Price Index (MPI) OPER-5

Corporate Overview OPER-6

Departmental Breakdown OPER-7

Revenue Breakdown OPER-8

Expense Breakdown OPER-10

Staff Changes OPER-11

Reserves and Reserve Funds OPER-12

Full Accrual Budgeting OPER-19

Table of Contents

Operating - 3

The 2018 Operating Budget calls for an increase in the property tax levy of $16.5 million over 2017.

The Base Operating and Growth portion of the budget consists of delivering today’s services to

existing and new residents for 2018-2020. The 2018 Base Operating and Growth budget proposes

a reduction of $3.1 million, which was achieved through a concerted effort to modernize the

corporation, maximize the use of existing resources, become more business-like and realign how

the City works. Examples of improved efficiencies include a new e-Procurement process, winter

maintenance service improvements, increased recreation service access, as well as a new site plan

review process and 311 customer service integration.

New or Enhanced Services for 2018 require $10.7 million dedicated to Transit, Fire, Library and

Enforcement. These service increases are focused on adding value to the quality of life in our

community.

The Infrastructure Levy increase of $9.0 million in 2018 is required to maintain our existing assets

and in line with the City’s Long Term Financial Plan, which was endorsed by Council in 2017.

Assessment Growth of $11.5 million and Revenue Growth of $18.2 million are included in the 2018

Operating budget and result in reducing the overall budget increase of $46.1 million.

2018-2020 Budget Summary

CATEGORY 2018 2019 2020

Base Operating & Growth (3,094) 1,856 6,889

Infrastructure Levy 8,961 9,112 9,424

New or Enhanced Services 10,667 13,652 5,537

PROPERTY TAX LEVY INCREASE $16,534 $24,619 $21,850

BUDGET VARIANCES ($000s)

Operating - 4

RESIDENTIAL TAX BILL IMPACT

The City of Brampton is a two-tier municipality, where the resident receives one tax bill to cover the

total cost of services provided by the City, the Region and School Boards. Therefore, to calculate

the annual change to the residential property tax bill, all three components must be considered.

The City of Brampton’s proposed 2018 tax levy increase of $16.5 million translates into an increase

of $80 per year or 1.7% on the average residential property tax bill.

The Region of Peel’s 2018 tax levy increase is estimated to have a 1.0% impact on the overall

property tax bill. This impact equates to $46 per year on the average residential property tax bill.

The School Board component of the residential property tax bill is estimated to have no change for

2018.

The average residential tax bill in the City of Brampton will increase by approximately $126 in 2018,

based on the average residential assessment of $471,000.

Residential Tax Bill Information

Property Tax Levy Increase $16,534

Add:

Assessment Growth 11,450

Revenue Growth 18,157

2018 Net Budget Variance ($000s) $46,141

TOTAL TAX BILL

IMPACT - WEIGHTED% $ % $ % $

City of Brampton 1.7% $80 2.5% $130 2.2% $116

Region of Peel 1.0% $46 1.3% $69 1.1% $60

Education 0.0% - 0.0% - 0.0% -

Residential Tax Bill

Increase2.7% $126 3.9% $199 3.3% $176

* Based on the 2018 Average Residential Assessment = $471,000

** Amounts and percentages may not add to totals due to rounding

2018 2019 2020

Operating - 5

The City of Brampton’s Municipal Price Index (MPI) is calculated annually and is designed to

measure the increases in prices of goods and services purchased by the municipality.

The MPI differs from other indices such as the Consumer Price Index (CPI) in that it is constructed

based on purchasing patterns of the City rather than consumers. The MPI is a weighted aggregate

of prices which means that the price or wage increases are weighted by the relative importance that

each represents in the City budget.

Municipal Price Index (MPI)

Component WeightInflation

FactorSource

Salaries, Wages, and

Benefits55.6% 2.4%

2017 Mercer Compensation Survey/Globe and

Mail

Outside Services 6.8% 1.6% Statistics Canada - April 2017 (CPI)

Capital Contributions 8.0% 2.4%2017 Non-Residential Building Construction

Index - 1st Quarter

Heat, Hydro, and Water 2.9% 3.9% Statistics Canada - April 2017

Internal Borrowing 1.9% 2.4%2017 Non-Residential Building Construction

Index - 1st Quarter

Brampton Library 2.2% 1.6% Statistics Canada - April 2017 (CPI)

Fuel 2.5% 15.9% Statistics Canada - April 2017

Office Expenses 2.2% 1.6% Statistics Canada - April 2017 (CPI)

Winter Contracts 2.0% 6.6% Statistics Canada - April 2017

Insurance 1.7% 3.5% Statistics Canada - April 2017

Materials 1.2% 1.6% Statistics Canada - April 2017 (CPI)

Preventative and

Demand Maintenance0.9% 1.6% Statistics Canada - April 2017 (CPI)

Vehicle Repairs and

Maintenance1.1% 1.7% Statistics Canada - April 2017

Promotion and

Advertising0.6% 1.6% Statistics Canada - April 2017 (CPI)

Professional Services 0.5% 1.6% Statistics Canada - April 2017 (CPI)

Rent 1.5% 0.6% Statistics Canada - April 2017

Equipment Costs 0.3% -0.5% Statistics Canada - April 2017

Communications 0.3% 0.4% Statistics Canada - April 2017

Staff Development 0.2% 1.6% Statistics Canada - April 2017 (CPI)

Uniform and Cleaning 0.3% -2.0% Statistics Canada - April 2017

Mileage 0.1% 0.0% CRA Rates (2017 over 2016)

Vehicle Lease 0.1% -3.1% Statistics Canada - April 2017

Non Inflationary Items 7.2% 0.0% N/A

100%

Municipal Price Index 2.5%

Operating - 6

Corporate Overview

($000s) % ($000s) % ($000s) %

Base Operating and Growth (3,094) -0.7% 1,856 0.4% 6,889 1.5%

(5,712) -1.3% (829) -0.2% 4,973 1.1%

Compensation Adjustments / Provisions 9,859 2.2% 10,064 2.2% 10,494 2.2%

New Staff Requests 525 0.1% 3,812 0.8% 2,582 0.5%

Road and Traffic Infrastructure Maintenance 1,231 0.3% 1,197 0.3% 1,277 0.3%

I.T. Maintenance and Support 1,442 0.3% 981 0.2% 219 0.0%

I.T. Operating Impacts - New Systems 303 0.1% 456 0.1%

Security Contract Renewal 1,290 0.3% 345 0.1% 106 0.0%

Sub-Division Admin Fees 479 0.1%

Transformation Savings (832) -0.2%

Transit Conventional Service Increase 1,596 0.4% 1,225 0.3% 1,727 0.4%

Transit Ridership Revenue Increase (7,500) -1.7% (1,000) -0.2% (500) -0.1%

Transit Fare Increase (724) -0.2% (760) -0.2% (736) -0.2%

Presto Commission 909 0.2% 460 0.1% 1,360 0.3%

Provincial Gas Tax (200) 0.0% (2,850) -0.6% (2,850) -0.6%

Investment Income 600 0.1% 600 0.1% 600 0.1%

Hospital Levy Return (1,333) -0.3% (8,500) -1.9%

Assessment Growth (11,000) -2.5% (9,000) -2.0% (9,000) -1.9%

East-End Community Centre 1,455 0.3%

Other Variances (2,054) -0.5% 839 0.2% (761) -0.2%

2,619 0.6% 2,684 0.6% 1,916 0.4%

Minimum Wage 802 0.2% 837 0.2%

Compression 1,200 0.3% 1,200 0.3% 1,200 0.3%

Diesel Fuel Cap and Trade 617 0.1% 647 0.1% 716 0.2%

Infrastructure Levy 8,961 2.0% 9,112 2.0% 9,424 2.0%

New or Enhanced Services 10,667 2.4% 13,652 3.0% 5,537 1.2%

Zum Service Increase 4,657 1.0% 2,392 0.5% 3,467 0.7%

Fire Full Response Enhancement 1,955 0.4% 2,040 0.4% 1,845 0.4%

Fire Headquarters & Training Facility 3,200 0.7%

Second Unit Task Force 643 0.1%

Bramwest Interim Branch 212 0.0% 212 0.0%

Downtown Improvements ($31.4M) 2,027 0.4%

Centre for Innovation ($100M) 6,756 1.5%

$5M University Contribution (Investment Income Loss) 225 0.0% 225 0.0%

PROPERTY TAX LEVY INCREASE 16,534 3.7% 24,619 5.4% 21,850 4.6%

B) External Uncontrollable Impacts

2018 2019 2020

A) Base (Excluding External Uncontrollable)

Operating - 7

Departmental Breakdown

The chart below illustrates the 2017 approved and 2018-2020 proposed budgets for each

department.

($000s)2017

BUDGET

2018

BUDGET

2019

BUDGET

2020

BUDGET

DEPARTMENT BREAKDOWN

Office of the CAO $20,465 $20,331 $20,574 $20,126

Corporate Services 53,952 57,186 58,934 59,656

Planning & Development Services 1,825 1,906 2,126 2,215

Public Works & Engineering 92,168 93,372 98,421 100,608

Community Services 60,687 61,584 64,278 66,455

Economic Development & Culture 13,013 12,631 12,641 12,649

Fire & Emergency Services 66,519 73,210 77,578 81,319

Transit 63,478 66,301 67,495 70,130

Brampton Public Library 15,612 16,781 17,667 18,711

Mayor & Members of Council 3,106 3,135 3,077 3,077

General Government (390,825) (406,437) (422,791) (434,946)

Net Expenditures $0 $0 $0 $0

Proposed

Operating - 8

Departmental Breakdown

This chart illustrates the 2018-2020 proposed budgets variances by department for Base

Operating and Growth, which for 2018, results in a reduction of $3.1 million. The Infrastructure

Levy and New or Enhanced Services recommend increases of $9.0 million and $10.7 million for

2018, leading to a net property tax levy increase of $16.5 million.

CATEGORY 2018 2019 2020

DEPARTMENT BREAKDOWN

Office of the CAO (134) $243 (449)

Corporate Services 2,483 1,749 722

Planning & Development Services 189 220 89

Public Works & Engineering 1,204 3,023 2,187

Community Services 898 2,694 2,177

Economic Development & Culture (382) 10 8

Fire & Emergency Services 1,536 2,328 1,896

Transit (1,834) (1,198) (832)

Brampton Public Library 956 674 1,044

Mayor & Members of Council 29 (59) -

General Government (8,039) (7,828) 46

BASE OPERATING & GROWTH (3,094) 1,856 6,889

Infrastructure Levy 8,961 9,112 9,424

OPERATING BUDGET VARIANCE $5,867 $10,967 $16,313

New or Enhanced Services 10,667 13,652 5,537

PROPERTY TAX LEVY INCREASE $16,534 $24,619 $21,850

BUDGET VARIANCES ($000s)

Operating - 9

2018 Budgeted Revenues by Category ($000s)

Revenue Breakdown

Property Taxes$474,984

User Fees & Service Charges

$163,245

Investment &

Other Income$15,110

Contribution from

Reserves

$13,299Grants & Subsidies$11,347

70.1 %

1.7 %

2.0 % 2.2 %

24.1 %

Operating - 10

2018 Budgeted Expenses by Category ($000s)

Expense Breakdown

Category 2018 Budget $ 2018 Budget %

Salary, Wages & Benefits 392,388 57.9%

Contribution to Reserves & Capital 74,064 10.9%

Repairs, Maintenance & Materials 42,595 6.3%

Contracted Services 41,343 6.1%

Utilities & Fuel 36,512 5.4%

Financial Services 20,127 3.0%

Grants, Subsidies & Donations 19,171 2.8%

Office & Administrative 14,428 2.1%

Internal Borrowing Repayments 11,302 1.7%

Rent & Lease Charges 9,601 1.4%

Professional Services 7,143 1.1%

Advertising, Marketing & Promotion 6,074 0.9%

Staff Development 3,237 0.5%

Total Budgeted Expenses 677,985 100.0%

Operating - 11

For further details on individual position requests, see Section 7 - “Staff Requests”.

Staff Changes

DEPARTMENTS 2018 2019 2020 TOTAL

Office of the CAO 0 2 0 2

Corporate Services 7 5 1 13

Planning & Development Services 5 6 1 12

Public Works & Engineering 0 8 0 8

Community Services 7 21 19 47

Economic Development 0 0 0 0

Brampton Public Library 6 5 6 17

Mayor and Members of Council 0 0 0 0

Fire and Emergency Services 20 28 23 71

Transit 62 35 49 146

DEPARTMENTAL TOTAL 107 110 99 316

* Includes F/T and conversions to F/T

COMPLEMENT ADDS*

Operating - 12

Reserves are earmarked to fund programs or

projects and:

Do not reference any specific asset

Do not require segregation as in the case

of a reserve fund

Are often referred to as “contingency” or

“rainy day” funds

Are generally used towards operating

expenses

Example: General Rate Stabilization

Reserve

Reserve Funds are separate bank accounts

that:

Must remain segregated from general

operating funds

Are based on statutory requirements or

future financial commitments

Usually have restrictions and rules around

collection and use

Are of two types: obligatory and

discretionary

Obligatory Reserve Funds:

Are created when provincial or federal

statute requires that revenues are

segregated from general municipal

revenues

Can also be created as a result of a legal

agreement

Examples: Development Charges Fund;

Federal Gas Tax Reserve Fund

Discretionary Reserve Funds:

Are created when Council wishes to

earmark revenue to ensure funds are

available as required to finance a future

expenditure

Examples: Legacy Fund; Community

Investment Fund; Brampton University

Reserve Fund

Reserves and Reserve Funds are established by Council to help pay for future costs and are:

Designated for specific purposes

Meant to assist with long-term financial planning

Reserves and Reserve Funds

Operating - 13

Contributions to Reserves include contributions in support of current and/or future tax based

capital asset repair and replacement, self-insurance deductibles, WSIB claims provisions and

Municipal elections.

The 2018 Operating Budget includes contributions to reserves and reserve funds (estimated) as

follows:

Reserves and Reserve Funds

Reserve

Fund #Reserve Fund Description

2017

Budget

2018

BudgetVariance

3 Workplace Safety and Insurance Board $2,004 $2,087 $84

4 Asset Repair and Replacement $45,169 $53,585 $8,416

8 Self Insurance of Deductibles 4,609 4,609 0

10 Corporate Facilities 255 304 49

23 Brampton Columbarium 4 4 0

25 Municipal Elections 600 600 0

37 Official Plan Review 120 120 0

58 Theatre Capital Improvements 75 75 0

78 10% Non Development Charge 4,899 4,899 0

126 Peel Memorial Hospital 9,833 8,500 (1,333)

127 Major Maintenance Reserve Fund 634 634 0

128 Brampton Starter Company 0 375 375

134 Development Charges - Recreation 59 59 0

211 Interest Rate Stabilization Reserve 300 300 0

TOTAL ($000s) $68,561 $76,151 $7,590

Operating - 14

Capital Contributions (Res #4, Res

#10, Res #58, Res#127, Contribution

to Capital)

These contributions are required to support

current and future tax based components of

the capital program, the majority related to

repair and replacement of existing City assets.

For 2018, the operating budget includes a base

contribution of $54.6 million.

Municipal Elections (Res #25)

A contribution to this Reserve Fund is made

annually to spread election costs more evenly

between elections.

10% non-DC Contribution (Res #78)

As the City continues to grow, the requirement

to fund growth driven capital infrastructure

projects has remained unabated. The growth

funding from Development Charges comes

with an associated tax based funding need to

support the non-DC eligible portion of capital

projects.

Peel Memorial Hospital (Res#126)

As previously endorsed by Council on April 3,

2013, an annual tax contribution of

approximately $9.8 million, commencing in

2013 and ending in 2018, was approved to

support the new Peel Memorial Centre for

Integrated Health and Wellness. Due to the

City’s prudent investment practices, the 2018

requirement has been reduced to $8.5 million.

Funds will be held in a Reserve Fund until

payments are due in accordance with

Memorandum of Understanding between the

City of Brampton and William Osler Health

Services.

Reserve Descriptions

Reserves and Reserve Funds

Operating - 15

Draws from Reserves include required draws from Reserves to support the current year’s

operating functions.

The 2018 Operating Budget includes draws from reserves and reserve funds (estimated) as

follows:

Reserves and Reserve Funds

Reserve

Fund #Reserve Description

2017

Budget

2018

BudgetVariance

Contribution from Trust Funds $36 $21 ($16)

General Rate Stabilization Reserve 2,913 2,939 26

3 WSIB Fund 1,472 1,872 400

8 Self Insurance of Deductibles 3,080 3,510 430

19 Employee Benefit Rate Stabilization 350 350 0

25 Municipal Elections 63 1,800 1,737

78 10% Non Development Charge 1,015 1,015 0

89 Provincial Dedicated Gas Tax - Transit 10,682 10,882 200

93 Building Rate Stabilization 8 2,158 2,150

128 Brampton Starter Company 0 195 195

138 Development Charges - Parking 454 454 0

100/110/120Legacy, Community Investment and

Community Development Funds9,000 9,000 0

TOTAL ($000s) $29,073 $34,196 $5,123

Operating - 16

Self Insurance of Deductibles (Res #8)

As a result of the City’s growing

infrastructure base, insurance costs are also

increasing (e.g. community facilities, transit

fleet, etc.)

Dedicated Gas Tax (Res #89)

The Provincial Dedicated Gas Tax Funds for

Public Transportation Program provides

funding of $10.9 million in 2018. The

Province has announced that this program

will double between now and 2022, which

will translate to over $10 million additional

funding expected over the coming years.

Municipal Elections (Res #25)

Draw down required to offset ongoing

operating costs associated with municipal

election planning.

Legacy Fund

This reserve fund was originally established

with a $100 million balance, which has been

maintained. Annual interest on the balance

is built into the base budget to offset tax levy

needs (currently targeted at $4.5 million).

Community Investment Fund

This reserve fund was originally established

with a $100 million balance and is almost

fully committed annually. Internal loans for

initiatives such as the Rose Theatre, parking

garages, POA Courthouse, and

administrative space have been made with a

long term payback horizon. “Revolving

loans” continue to be made as principal is

repaid and funding is made available.

Annual interest on the fund, including loans

outstanding, is built into the base budget to

offset tax levy needs (currently targeted at

$4.5 million).

General Rate Stabilization Reserve

The remaining base budget for 2018

includes a $2.7 million provision to fund

operations. The General Rate Stabilization

Reserve draw is used on an annual basis to

mitigate tax pressures.

Reserve Descriptions

Reserves and Reserve Funds

Operating - 17

Reserve Balance Details

Interest Rate Stabilization

This reserve fund has a balance of $11.3

million. It is recommended that the balance be

protected for use in mitigating any shortfalls in

investment income from the Legacy Fund and

Community Investment Fund.

Building Rate Stabilization

This reserve fund, established pursuant to Bill

124 changes in the Building Code, is available

for building operations only, to offset temporary

shortfalls in building permit revenue. This

reserve fund has a balance of $38.1 million.

General Rate Stabilization (GRS) Reserve

This reserve is intended to smooth the impact

on the tax base of major unforeseen or

unavoidable events and one-time impacts.

Council has provided direction to maintain a

target in this reserve at 10% of budgeted gross

annual operating expenditures, which equates

to a reserve requirement of $67.8 million for

2018. The current GRS Reserve balance is

$74.9 million. The 2018 Capital Budget

proposed $4.8 million worth of projects funded

from this reserve with further reserve draws

anticipated as the City invests in large key

initiatives.

Development Charge (DC) Reserve Funds

DC reserve funds are in a surplus position of

$87.7 million. For more information on

projected DCs, refer to the “Development

Charge Reserve Projection” in the 2018-2020

Capital Budget Overview.

Cash In Lieu of Parkland

There was a balance in this reserve fund of

$99.5 million. This fund has limited cash

inflows from receipts and sizeable land

acquisition costs in the short to medium term.

It is therefore critical that a cash flow strategy

be considered as part of the long term

funding plan.

The City has several reserves and reserve funds, which have funding balances that change from

year to year. Supplemental Details - “Reserves and Reserve Fund Balances” shows the

preliminary year-end reserves and reserve fund balances as at September 30, 2017. Commentary is

provided below for some key Reserves and Reserve Funds.

Reserves and Reserve Funds

Operating - 18

Legacy, Community Investment, and

Community Development Reserve Funds

The balance in these reserve funds are

Legacy ($100 million), Community

Investment ($24.6 million), and Community

Development ($0) respectively.

The Legacy Fund has generated more than

$79.4 million in interest revenue since the

inception of the fund. Of this, over $62.7

million has been transferred to the Operating

Budget during that time, which has offset tax

levy requirements and the balance has been

transferred to the Interest Rate Stabilization

reserve Fund.

The Community Investment Fund has

outstanding internal loans of $84.9 million

committed against this fund for initiatives

such as the Rose Theatre, Provincial

Offences Act Courthouse and public works

yards. Annual interest of $4.5 million on the

fund has also been built into the base budget

to offset tax levy needs. The remaining

uncommitted balance plus annual principal

repayments are forecasted to be allocated to

internal financing of capital projects beyond

2017.

The Community Development Fund has

been fully drawn down for projects of citywide

benefit and was closed out in 2009. Funding

was committed towards initiatives such as

the Rose Theatre, downtown revitalization,

Sheridan College and Alderlea.

Reserves and Reserve Funds

Reserve Balance Details

Operating - 19

Municipal government budget methods have

historically been focused on the annual cash

requirements to operate the municipality and

the associated property tax needed to fund

operations.

With the introduction of Public Sector

Accounting Board (PSAB) changes with

respect to the tangible capital asset reporting

(TCA) in 2009, additional financial information

has become available, such as annual

depreciation expense and developer

contributed assets that were not previously

reported in the City’s financial statements or

budgets prior to this change.

Full accrual budgeting provides stakeholders

with a better reflection of the long term financial

health of the municipality for decision making

purposes.

Full accrual budgeting also serves to meet the

disclosure requirements of Ontario Regulation

284/09 - Budget Matters - Expenses.

The full accrual budget for 2018 projects a net

surplus of $87 million. This surplus is primarily

due to developer contributed assets,

recognized development charges and other

grants and subsidies, such as gas tax funding.

Full Accrual Budgeting

Property Tax Related Expenditure Budget $677,985

Less:

Contributions to Reserve Funds 76,151

Add:

Amortization (Depreciation Expense) 129,459

Project Expenses that are Operating in Nature 40,686

Post Employment and Other Liabilities 4,600

Full Accrual Expenditure Budget 776,579

Property Tax Related Revenue Budget 677,985

Less:

Contributions from Reserve Funds 34,196

Add:

Recognized Development Charges, Grants & Subsidies 164,113

Developer Contributed Assets 44,215

Interest Earned on Reserves 11,477

Full Accrual Revenue Budget 863,594

Net Surplus / (Deficit) $87,016

Operating - 20

Developer contributed assets consist of the

City taking ownership of subdivisions built by

developers. The value of the subdivision is

included on the City’s balance sheet as an

asset and must therefore be operated,

maintained and depreciated.

Recognized development charges are sources

of funding received from developers and

utilized during the year to fund growth-related

assets, such as new roads and parks. PSAB

rules require that development charge

revenues be recognized on the City’s

statement of operations when the

corresponding investment in growth funded

assets occurs.

Other grants and subsidies such as gas tax

funding are sources of funding contributed to

the City for specific purposes and cannot be

used to offset property tax funding. Gas tax

funding is primarily used for transit and

infrastructure related projects and is recognized

as revenue when the corresponding investment

in the infrastructure occurs.

Although the 2018 full accrual budget indicates

a surplus position of $87 million, this is largely

due to the City of Brampton’s current growth

cycle and cannot be used to offset property

taxes.

Full Accrual Budgeting