1. CAPITAL AND RATE SUPPORTED OPERATING BUDGETS
Special Committee of the Whole
November 13, 2017
Presented by:
Mike Mayes, Director, Financial Services 1

2. Background

3. Budget process overview
On an annual basis, the Town of Newmarket prepares a budget to authorize its expenditures for the year. For 2018, this includes:
$127 million in operating expenditures
- $84 million in tax-supported operations
- $43 million in rate-supported operations (water, stormwater, building)
$26 million in capital expenditures
When developing the budget, the Town prioritizes projects and services that are required to meet legislative requirements and community needs.
Although the budgets are broken down into service areas, the budget is considered and recommended as a whole to enhance the Town’s decision-making process.

4. Potential impact on the average residential property
Proposed increases for the average residential property using 200 cubic metres of water per year. 200 cubic metres represents the normal annual household use in Ontario.
2018 Budget
Increase
Monthly cost
Water
$ 1,157.41
$ 67.71
6.21%
$ 96.45
Stormwater
$ 33.97
$ 3.72
12.30%
$ 2.83

5. Council Priorities The focus of the 2018 Budget is Sustainability:
Financial
Environmental
Community
Organizational Readiness
Council’s strategic priorities:
Developing corridors and community
Manage assets, maintain service levels and cultivate talent
Cultivate innovation and growth

6. Budget Schedule Date Activity October 16
Preliminary draft budgets to Cow
October 23
Info report to Council with additional details and answers to questions
November 13
Special CoW – capital & rate-supported operating budgets
November 20
Special CoW – tax-supported operating budget
November 27
Regular CoW – budget and fees & charges
December 4
Council approval – budget and fees & charges

7. 2018 Budget Process - Definitions
Decision Package – budgetary requests for Enhancements, Growth Expenses, and Mandatory Items are submitted with all related costs, net of recoveries
ARF or Asset Replacement Fund – monies set aside in a reserve fund to finance the replacement of existing Capital Assets such as roads, watermains and sewers

8. 2018 Budget Process - Assumptions
Assumptions used in the 2018 Budget:
Inflation – the March 2017 Toronto CPI was used as a predictor of inflation – 2.1%
Growth – the Town’s Growth Revenue Model projects a 1.24% increase for 2018
Preserve service levels for a growing population with any reductions based on prioritization
Service level preservation takes precedence over service level enhancements

9. Water and Wastewater Budget

10. Operating Budget - Water
2017
2018
Change
Rate revenue
$ 15,384,000
$ 17,129,802
$ 1,745,802
Region
$ 8,439,000
$ 9,011,485
$ 572,485
Operations
3,669,233
3,839,459
170,226
ARF
2,713,083
3,127,156
414,073
Overhead
1,029,485
1,142,000
112,515
Rate stabilization
- 466,801
9,702
476,503

11. Operating Budget - Wastewater
2017
2018
Change
Rate revenue
$ 17,084,000
$ 19,684,137
$ 2,600,137
Region
$ 11,098,000
$ 12,951,320
$ 1,853,320
Operations
1,009,467
1,212,938
203,471
ARF
3,674,219
3,940,703
266,484
Overhead
926,770
1,006,000
79,230
Rate stabilization
375,544
573,176
197,632

12. Water Rate Group Financial Performance
2018 Budget
6-year plan
Difference
Rate revenue
$ 17,129,802
$ 16,909,802
$ 220,000
ARF increase
$ 414,073
$ 0
Contribution to rate stabilization
$ 9,702
- $180,750
$ 190,452

13. Wastewater Rate Group Financial Performance
2018 Budget
6-year plan
Difference
Rate revenue
$ 19,684,137
$ 20,604,137
- $ 920,000
ARF increase
$ 266,484
$ 0
Contribution to rate stabilization
$ 573,176
$ 527,092
$ 46,084

14. Consolidated rate group Financial Performance
2018 Budget
6-year plan
Difference
Rate revenue
$ 38,813,939
$ 39,513,939
-$ 700,000
ARF increase
$ 680,557
$ 0
Contribution to rate stabilization
$ 582,878
$ 346,742
$ 236,136
Consolidated performance exceeds the 6-year plan targets

15. Proposed Water/Wastewater Rates
Annual Consumption
2017 Average Bill
2018 Average Bill
Change
2" Residential and Non-Residential Customer
200 m3
$ 1,090
$ 1,157
6.2%
2" Industrial, Institutional, Commercial Customer
4,600 m3
$ 17,629
$ 19,290
9.4%
3" Industrial, Institutional, Commercial Customer
6,900 m3
$ 26,709
$ 29,514
10.5%
4" Industrial, Institutional, Commercial Customer
22,000 m3
$ 83,140
$ 89,699
7.9%

16. Comparative Rate Data - Water and Wastewater
Newmarket has financially sustainable water and wastewater operations:
Full cost recovery
Healthy reserve fund levels
Comparatively lower infrastructure gaps
Tiered water rates have been introduced to address the fact that our residential rates are the 2nd highest in York Region while our non-residential rates are the lowest

17. Stormwater Budget

18. Operating Budget - Stormwater
2017
2018
Change
Revenue
$ 1,672,855
$ 1,852,084
$ 179,229
Operations
$ 350,476
$ 1,160,623
$ 810,147
ARF
983,000
340,512
-642,488
Overhead
339,379
340,000
621
Rate stabilization
10,949

19. Stormwater Rate Group Financial Performance
2018 Budget
6-year plan
Difference
Rate revenue
$ 1,852,084
$ 0
ARF increase
-$ 642,488
$ 43,000
- $ 685,488
Contribution to rate stabilization
$ 10,949
$ 4,084
$ 6,885
Additional expenses have been offset by lowering ARF contributions

20. Proposed Stormwater Rates
Customer Type
Median Property square meters
2017
2018
Increase
(%)
($)
Low Level Runoff
478
$ 6.36
$7.14
12.3%
$ 0.78
Med Level Runoff
465
$ 30.24
$ 33.97
$ 3.73
High Level Runoff
561
$ 72.98
$ 81.99
$ 9.01

21. Comparative Rate Data - Stormwater
12 Ontario municipalities reported that they had Stormwater charges in the draft 2017 BMA Study
Most are based on flat rates, while Newmarket’s rates are based on an automated program that performs detailed analysis to balance fairness and cost effectiveness
Newmarket has the lowest residential rate

22. Building Department Budget

23. Operating Budget - Building
2017
2018
Change
Revenue
$ 1,680,191
$ 0
Operations
$ 2,068,439
$ 2,070,238
$ 1,799
Overhead
466,976
466,463
- 513
$ 2,535,415
$ 2,536,701
$ 1,286
Building reserve
- 855,224
- 856,510
- 1,286

24. Rate Supported Decision Packages

25. Decision Packages Recommended
DP Form #
Initiative
Category
Total Amount
Storm Water 1
Stormwater Management Facility Maintenance Program
Mandatory
400,000 2
Catch Basin Cleaning
200,000 18
Sr. Climate Change Coordinator -Contract to Full-Time
Growth
107,356
Total
$ 707,356
Water & Wastewater  3
Convert Water Quality Analyst From Contract to Full-time
8,267 22
GIS Technician- Cost Allocation to Water &WW
84,949
$ 93,216

26. Capital Budget

27. Capital Request Summary
ARF
Development charges
Other
General
Total
$ millions
Replacement
10.9
3.6
14.5
Growth
8.7
0.6
9.3
0.9
0.7
0.5
2.1
11.8
4.9
25.9

28. Replacement Capital
Replacements are determined by condition assessments such as the Roads Need Study
$14,488,100 in replacements are funded:
ARF
$ 10,943,100
76%
Federal Gas Tax
2,100,000
15%
Grants
795,000 5%
Reserves
650,000 4%

29. Replacement Capital Major Projects include:
Municipal Infrastructure projects - $4,235,000
Vehicles and Equipment Replacement - $1,254,000
Sports Field Lighting Replacement - $1,016,000
Magna Centre roof repair - $950,000
All other facility maintenance needs - $934,500
Capital Projects – Engineering Staff Time - $900,000
Engineering/Design for Future Projects - $850,000
Fernbank Farmhouse Maintenance - $600,000

30. Growth Capital
Growth needs are determined by growth plans such as the Development Charges (DC) Background Study
$9,313,020 in to maintain service levels in the face of growth are funded from:
Development Charges (DC’s)
$ 8,660,775
93%
Reserves
374,300 4%
Other Sources
277,945 3%

31. Growth Capital Major Projects include:
Haskett Park Trail & Davis Drive Breathing Space Construction - $1,700,000 **
Davis & Bathurst Intersection Improvements (Sidewalk & Streetlighting) - $1,550,000 *
Water/Wastewater Master Servicing Study Implementation - $1,281,500 *
Recreation Playbook Implementation - $1,013,000 **
Satellite Building – Glenway - $500,000 *
Yonge Street North of Davis to Green Lane Consulting - $500,000 *
* Funded 100% from DC’s
**Funded 90% from DC’s

32. Other Capital Projects
These are projects and studies to address legislated and health & safety requirements, and to meet Council direction.
$2,132,000 is funded from:
ARF
$ 914,000
43%
General Revenues
495,000
23%
Grants
481,427
Reserves
241,573
11%

33. Other Capital Projects
Major Projects include:
Stormwater Management Pond Clean Outs - $714,000 *
Low Impact Development (LID) & New Stormwater Facilities - $200,000 *
Community Energy Plan Implementation - $310,000
Trail Lighting – TTT Tannery to CN Crossing - $160,000
Lighting of Pathways - $180,000
* Funded from Stormwater ARF

34. How to give feedback Residents are encouraged to Get Involved in the 2018 budget process

35. Next Steps Date Activity October 16 Preliminary draft budgets to Cow
Info report to Council with additional details and answers to questions
November 13
Special CoW – capital & rate-supported operating budgets
November 20
Special CoW – tax-supported operating budget
November 27
Regular CoW – budget and fees & charges
December 4
Council approval – budget and fees & charges