By: Councillor Austin Davey Interim Chair Budget Committee of the Whole

February 26, 2002Budget Committee of the Whole2 Council’s Direction Council Resolution # stated: “Be it resolved that the Council of the City of Greater Sudbury directs the Chief Administrative Officer to prepare the 2002 Operating Budget estimates to reflect the following guideline: that the net basic budget increase be zero percent.”

February 26, 2002Budget Committee of the Whole3 Purpose To review 2002 Budget facts and figures To outline alternative approaches to resolving 2002 Budget challenges To outline a schedule of budget meetings

February 26, 2002Budget Committee of the Whole4 Magnitude of 2002 Budget Issues approximately $4.3 million of ongoing costs related to amalgamation approximately $10.2 million in 2002 unavoidable costs an annual $40 million+ capital deficit due to long-term under-funding

February 26, 2002Budget Committee of the Whole Adjusted Base Budget Estimates $(millions) 2001 Levy115.0 less adjustment for annualization of water and wastewater revenue (3.8) Revised 2001 Levy111.2 Amalgamation Adjustments Adjusted Base115.5

February 26, 2002Budget Committee of the Whole Base Budget Estimated Increases $(millions) Contractually Obligated 1.4 Provincially Mandated 2.7 Outside Boards 1.8 Cost of Provincial Services Downloaded without Offsetting CRF 1.0 Loss of Investment Interest Income 0.9 Inflation (excluding water, wastewater) 5.5 Changes in CRF Funding/Additional Revenues (3.1) Total 2002 Base Budget Increases 10.2

February 26, 2002Budget Committee of the Whole Current Base Budget $(millions) Revised Levy111.2 Amalgamated Adjustments Base Budget Increases Current Base Budget125.7 Dollars required to attain 0% increases on revised levy 14.5 million

February 26, 2002Budget Committee of the Whole8 Traditional Budgeting Options efficiencies and process improvements Revenues capital reductions service/program reductions one-time offsets Other

February 26, 2002Budget Committee of the Whole Revised Levy $ millions 2001 Levy115.0 less adjustment for annualization of water and waste water revenue (3.8) Revised 2001 Levy111.2

February 26, 2002Budget Committee of the Whole Adjusted Base (Ongoing Costs Related to Amalgamation) Revised 2001 Levy111.2 Recreation Services - maintenance of parks and play fields; part-time clerical and program staff 1.0 Roads Services - summer maintenance (patching, grading, dust control, culverts, lane markings) 1.0 Corrected Staffing Requirements – (Corporate Services and Emergency Services)0.7 Transit Services - increased fuel (additional commuter trips) and increased maintenance costs (aging fleet) 0.4 Telephone Services Revenues Overstated (lottery licenses, Trillium leases, arena revenues)1.0 Total of Amalgamation Adjustments Adjusted Base115.5 Million

February 26, 2002Budget Committee of the Whole Base Budget Estimated Increases $ millions 2001 Adjusted Base115.5 Contractually Obligated Pensioners0.2 Information Technology - software/hardware maintenance agreements and licensing 0.3 Insurance Costs on Levy - including fire protection for transit fleet0.3 Utility costs - (increased costs re energy, wastewater charges)0.5 Annualization of Bylaw Officers0.1 Total of Contractually Obligated1.4 SUB-TOTAL116.9

February 26, 2002Budget Committee of the Whole Base Budget Estimated Increases (con’t) SUB-TOTAL116.9 $ millions Provincially Mandated Tax Write-offs, Charity and Vacancy Rebates0.9 Solid Waste Management0.5 Ontario Works - GWA caseload, provincial ceiling on administration 1.3 Total of Provincially Mandated2.7 SUB-TOTAL119.6

February 26, 2002Budget Committee of the Whole Base Budget Estimated Increases (con’t) SUB-TOTAL119.6 $ millions Outside Boards Police Services1.8 Total of Outside Boards1.8 Cost of Provincial Services Downloaded without Offsetting CRF Social Housing0.6 Land Ambulance0.4 Total of Provincial Services Downloaded1.0 SUB-TOTAL122.4

February 26, 2002Budget Committee of the Whole Base Budget Estimated Increases (con’t) SUB-TOTAL122.4 $ millions Loss of Investment Interest Income0.9 Inflation (excluding water, wastewater)5.5 Changes in CRF Funding/Additional Revenues Reclassification of CRF Bonus from one-time funding to permanent funding (2.6) Taxation from Power Dams(0.5) Total Changes in CRF Funding(3.1) 2002 Current Base Budget125.7

February 26, 2002Budget Committee of the Whole15 The numbers are large! They are here to stay and must be addressed immediately in a different way if we are going to be a sustainable community that not only survives, but thrives

February 26, 2002Budget Committee of the Whole16 Challenges present Opportunities to show leadership, move forward, plan for the future HOW? By adopting a new budgeting process: a process that allows us to deal with the issues in the current budget year in a unique short-term fashion a process that requires us to look ahead and address our fiscal needs over the next ten years

February 26, 2002Budget Committee of the Whole17 Sustainable Community Model Prudent Fiscal Management Opens the door to options not available under traditional year-to-year budgeting methods Two-step process: 1. the development of a short-term financial plan for 2002 only, and, more importantly, 2. the development of a long-term financial plan for the City, (which would be presented to Council in early October.) Goal: A sustainable community

February 26, 2002Budget Committee of the Whole18 Long-Term Financial Plan Public input property and business assessment base forecasts future and emerging revenue streams pressures/opportunities impacting expenditures required levels/sources capital financing fiscal policy for debt management adequacy/levels of reserves and special funds property tax policy and rates financial indicators current financial management policies current financial planning / budget process best practices in long-range financial planning sustained economic growth risk analysis

February 26, 2002Budget Committee of the Whole19 Process Phase 1 - Issue identification Phase 2 - Identify policy options Phase 3 - Policy evaluation Phase 4 - Financial Plan Result – Sustainable Community

February 26, 2002Budget Committee of the Whole20 City of Edmonton adopted a Long-Term Financial Plan City of Edmonton adopted a Long-Term Financial Plan in 1998 to guide financial decision-making to 2008 by addressing financial issues facing the City and outline effective stategies to deal with these issues Long-Term Financial Plan: an innovative and progressive component of a professionally managed financial system will support our ability as a City to efficiently finance public services on an ongoing basis

February 26, 2002Budget Committee of the Whole21 Benefits for City of Edmonton helping the City to better understand / address its long- term commitments providing accurate and timely information providing principles to guide decision-making providing a policy approach to planning ensuring municipal responsibilities are aligned with appropriate revenue sources Result: New approach to financial management that shifts the emphasis from bottom line financial concerns to service delivery, within a longer-term financial planning horizon.

February 26, 2002Budget Committee of the Whole22 Benefits to the Sustainable Community Model for the City of Greater Sudbury Provides for public participation and input into Council decisions; Fosters confidence in both the public and the business community by demonstrating leadership and planning by this Council; Provides a sound basis for a short-term 2002 solution that is not available under any other option;

February 26, 2002Budget Committee of the Whole23 Benefits to the Sustainable Community Model for the City of Greater Sudbury Provides for third party involvement; i.e. the hiring of an outside expert to work with staff to prepare long-term options for Council’s consideration; Supports Council’s direction of “Council control through policy”; Continues to keep open the political options of approaching the Federal and Provincial Governments with the same urgency that exists today.

February 26, 2002Budget Committee of the Whole24 Unique Opportunity Sustainable Community Model An opportunity to budget differently and keep us on a solid track In keeping with Council’s Vision: “a growing, world-class community bringing talent, technology and a great northern lifestyle together.” Traditional method of budgeting - not sustainable Will result in: significant reduction in services, downsizing (staff reductions) and/or drastic reductions in capital, all of which are not sustainable in the long-term.

February 26, 2002Budget Committee of the Whole Short-Term Solution The Sustainable Community Model allows for a 2002 short-term solution that would not be available under any other option: the use of reserves to offset ongoing costs in 2002 only provided there is a long-term financial plan being put in place for 2003 and beyond.

February 26, 2002Budget Committee of the Whole26 Traditional Budgeting In traditional year-to-year budgeting, options in all of the following categories are considered: a) Efficiencies; b) Service reductions and/or eliminations; c) Long-term capital reductions; d) One-time offsets; e) New or enhanced revenue sources; f) Other.

February 26, 2002Budget Committee of the Whole27 Traditional Budgeting Favors year-to-year management, and is contrary to the sustainable cities concept, and the outcomes of the CGS’s visioning exercise; Provides no perception of leadership or planning to the public and/or business community on behalf of Council; Perpetuates ward politics (not in my ward); Provides for no policy framework; Provides for no opportunity for public input on policy issues; and Reduces the urgency of a new deal with the Federal and/or Provincial Governments.

February 26, 2002Budget Committee of the Whole28 Seeking Council Support Adopt the Sustainable Community Model of budgeting: with a short-term solution and long-term financial plan Hire an expert to assist in the development of the Long-Term Financial Plan with a target completion date of October 2002

February 26, 2002Budget Committee of the Whole29 Benefits to the Sustainable Community Model Provides for public participation and input into Council policy decisions; Fosters confidence in both the public and the business community by demonstrating leadership and planning by this Council; Provides a sound basis for a short-term 2002 solution that is not available under any other option; Provides for third party involvement; i.e. the hiring of an outside expert to work with staff to prepare long-term options for Council’s consideration; Supports Council’s direction of “Council control through policy”; Continues to keep open the political options of approaching the Federal and Provincial Governments with the same urgency that exists today.

February 26, 2002Budget Committee of the Whole30 Thank You! By: Councillor Austin Davey Interim Chair Budget Committee of the Whole Questions?