AGENDA - Finance Advisory Committee - 20160119FINANCE
ADVISORY COMMITTEE
MEETING AGENDA
TUESDAY,JANUARY 19,2016
5:30 P.M.
LEKSAND ROOM
AURORA TOWN HALL
PUBLIC RELEASE
January 19,2016
TOWN OF AURORA
FINANCE ADVISORY COMMITTEE
MEETING AGENDA
DATE:Tuesday,January 19,2016
TIME AND LOCATION:5:30 p.m.,Leksand Room,Aurora Town Hall
1.DECLARATION OF PECUNIARY INTEREST AND GENERAL NATURE
THEREOF
2.APPROVAL OF THE AGENDA
RECOMMENDED:
THAT the agenda as circulated by Legal and Legislative Services be approved.
3.RECEIPT OF THE MINUTES
Finance Advisory Committee Meeting Minutes of August 11,2015 pg.1
RECOMMENDED:
THAT the Finance Advisory Committee meeting minutes of August 11,2015,be
received for information.
4.DELEGATIONS
5.CONSIDERATION OF ITEMS
1.2016 Budget Process Debrief
RECOMMENDED:
THAT the Finance Advisory Committee comments of the 2016 Budget
Process Debrief be referred to staff for consideration.
Finance Advisory Committee Meeting Agenda
Tuesday,January 19,2016 Page 2 of 3
2.Memorandum from Director,Corporate &Financial pg.4
Services –Treasurer
Re:Update on Council Budget Principles and Council Budget Process
Documents
RECOMMENDED:
THAT the memorandum regarding Update on Council Budget Principles
and Council Budget Process Documents be received and referred for
discussion at the next meeting of the Finance Advisory Committee.
3.Discussion of Process/Expectations for Detailed Department Budget
Reviews for 2016 for Parks &Recreation Services and Infrastructure &
Environmental Services
Discussion:Possible formats/areas of focus:
i.2016 department business plan
ii.MPMP results history
iii.5-year account histories
iv.Line by line review:by work group/section vs whole department
v.Challenges from the Director’s perspective
vi.Future forecasts
vii.Revenue review:rates/charges/recovery rates/subsidy rates
viii.Identification of other areas or materials of interest
RECOMMENDED:
THAT the necessary and appropriate agenda materials be provided to
support the Committee’s detailed Budget review of the Parks &
Recreation Services department in the following areas:
a.
b.
c.
THAT the necessary and appropriate agenda materials be provided to
support the Committee’s detailed Budget review of the Infrastructure &
Environmental Services department in the following areas:
a.
b.
c.
Finance Advisory Committee Meeting Agenda
Tuesday,January 19,2016 Page 3 of 3
4.Proposed 2016 Work Plan for Finance Advisory Committee pg.21
RECOMMENDED:
THAT the Proposed 2016 Work Plan for Finance Advisory Committee be
received;and
THAT the Proposed 2016 Work Plan for Finance Advisory Committee be
approved.
5.Next Meeting Dates/Time/Duration and Setting of Dates
RECOMMENDED:
THAT the Financial Advisory Committee shall normally meet at Town
Hall once per month,except for the months of July and August,from
5:30 p.m.to 6:45 p.m.on the Tuesday of the second General Committee
meeting of that month;and
THAT the Town Clerk be directed to amend the Terms of Reference for
the Financial Advisory Committee.
6.Extract from Council Meeting of September 15,2015 pg.22
Re:Finance Advisory Committee Meeting Minutes of August 11,2015
RECOMMENDED:
THAT the Extract from Council Meeting of September 15,2015,
regarding Finance Advisory Committee meeting minutes of August 11,
2015,be received for information.
6.NEW BUSINESS
7.ADJOURNMENT
TOWN OF AURORA
FINANCE ADVISORY COMMITTEE
MEETING MINUTES
Date:Tuesday,August 11,2015
Time and Location:5:30 p.m.,Leksand Room,Aurora Town Hall
Committee Members:Councillor Michael Thompson (Chair),Councillor Harold Kim,and
Mayor Geoffrey Dawe (departed 6:32 p.m.)
Member(s)Absent:None
Other Attendees:Councillor Tom Mrakas,Councillor Paul Pirri,Patrick Moyle,Interim
Chief Administrative Officer,Dan Elliott,Director of Corporate and
Financial Services/Treasurer,and Linda Bottos,Council/Committee
Secretary
The Chair called the meeting to order at 5:36 p.m.
1.DECLARATION OF PECUNIARY INTEREST AND GENERAL NATURE THEREOF
There were no declarations of pecuniary interest under the Municipal Conflict of Interest Act.
2.APPROVAL OF THE AGENDA
Moved by Mayor Dawe
Seconded by Councillor Kim
THAT the agenda as circulated by Legal and Legislative Services,with the following addition,
be approved:
Item 2 –CFS15-029 –Council Budget Process,Policies and Directives
CARRIED
3.RECEIPT OF THE MINUTES
Finance Advisory Committee Meeting Minutes of May 26,2015
Finance Advisory Committee Meeting Agenda
Tuesday,January 19,2016 Minutes Page -1
-1 -
Finance Advisory Committee Meeting Minutes
Tuesday,August 11,2015 Page 2 of 3
Moved by Councillor Kim
Seconded by Mayor Dawe
THAT the Finance Advisory Committee meeting minutes of May 26,2015,be received for
information.
CARRIED
4.DELEGATIONS
None
5.CONSIDERATION OF ITEMS
1.CFS15-033 –Updated Investment Policy –Final Draft
Staff presented the proposed final draft of the updated Investment Policy –Policy No.
61,and highlighted some of the most recent revisions,including the addition of limits
with respect to equity investments in the ONE Investment Program,as well as limits on
the protected principle notes (PPNs)and the proportions of the portfolio.The
Committee provided feedback and staff agreed to incorporate the stipulation that no
purchase of PPNs would exceed a ten-year term.Staff noted that the updated Policy
allows for O.Reg.438/97 to set the limits with the exception of the “Additional Local
Limitations on Investments”of the Policy.Staff confirmed the intent to provide an
annual report during the budget process,which would include investment performance
during the last fiscal year,rates of return,change from opening balance,and
benchmark indexes.
Moved by Councillor Kim
Seconded by Mayor Dawe
THAT Report No.CFS15-033 be received;and
THAT the final draft of the revised Investment Policy –Policy No.61 be referred to a
future Council meeting for its review and approval;and
THAT a ONE Investment Program enabling participation bylaw be brought to a future
Council meeting for its review and approval.
CARRIED
2.CFS15-029 –Council Budget Process,Policies and Directives
(Added Item)
Staff presented a draft framework of high level guidelines for budget development for
discussion in the context of balancing the need for detail and transparency with
Finance Advisory Committee Meeting Agenda
Tuesday,January 19,2016 Minutes Page -2
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Finance Advisory Committee Meeting Minutes
Tuesday,August 11,2015 Page 3 of 3
expediting the budget approval process.Staff provided a brief overview of the
proposed Council Budget Principles,Council Budget Review and Approval Process,
and Directives of Council to Staff for Preparing 2016 Budget and Forecasts.The
Committee discussed elements of the documents in further detail,provided feedback,
and expressed its support of the guidelines.The Committee inquired about alternative
budgeting concepts,such as performance-based budgeting,and staff discussed
another municipality’s recent transition from traditional to service-based budgeting and
results-based accountability.Staff further discussed the advantages of Council
providing principle-based direction early in the process.The Committee suggested
that,in order to advance the budget review process,staff prepare a separate report for
the September 8,2015 General Committee meeting with the information needed,
including tax pressure range,for Council to provide staff with direction in the preparation
of the 2016 Operating and Capital Budgets.
Moved by Councillor Kim
Seconded by Councillor Thompson
THAT Report No.CFS15-029 be received;and
THAT Finance Advisory Committee comments and discussion be referred to staff for
preparation of an updated Council Budget Process,Policies and Directives report for
consideration at a future meeting of the General Committee.
CARRIED AS AMENDED
6.NEW BUSINESS
The Committee referred to the Notice of Motion on the Council meeting agenda of August
11,2015,regarding “Town of Aurora Financial Health Status.”Staff noted that a financial
report card was currently in progress,as requested by Mayor Dawe following the adoption of
the audited financial statements for the year ended December 31,2014,and any
enhancements required by Council could be added to that document or reported separately.
7.ADJOURNMENT
Moved by Councillor Kim
Seconded by Councillor Thompson
THAT the meeting be adjourned at 6:46 p.m.
CARRIED
COMMITTEE RECOMMENDATIONS ARE NOT BINDING ON THE TOWN UNLESS ADOPTED
BY COUNCIL AT A LATER MEETING.
Finance Advisory Committee Meeting Agenda
Tuesday,January 19,2016 Minutes Page -3
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MEMORANDUM
DATE:January 19,2016
TO:Chair Thompson,Members of Finance Advisory Committee
FROM:Dan Elliott,Director,Corporate &Financial Services -Treasurer
RE:Update on Council Budget Principles and Council Budget Process
Documents
RECOMMENDATIONS
THAT the memorandum regarding Update on Council Budget Principles and Council
Budget Process Documents be received and referred for discussion at the next
meeting of the Finance Advisory Committee.
BACKGROUND
In August 2015,the Committee reviewed and approved the two Budget guidance
documents,Council Budget Principles,and Council Budget Process.These were advanced
to General Committee and Council.At that stage,a couple of suggested changes were
proposed by Council,with the documents referred back to staff for updating,and to be
brought back to Council.
In the process of updating the documents to reflect Council’s suggestions,staff identified
some areas for minor amendments to the balance of the document which would improve the
flow.
Attached are a marked up version and a clean version with all changes reflected.The
yellow highlighted sections are those additions/changes suggested by Council.The other
mark-ups are the minor changes undertaken by staff.
Given the late agenda circulation,staff recommend that discussion on these two documents
be deferred to the next Finance Advisory Committee meeting.
ATTACHMENTS
Attachment #1 –Council Budget Principles
Attachment #2 –Council Budget Review and Approval Process
Town of Aurora
Corporate &Financial Services
Finance Advisory Committee Meeting Agenda
Tuesday,January 19,2016 Item 2 Page -1
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Attachment #1
January 19,2016 Page 1
Council Budget Principles
The Council of the Town of Aurora is responsible for two key elements in carrying out
their duties.Council must represent and advance the interests,needs and actively plan
for the future,and serve the residents and businesses of the community byof the Town
of Aurora,advancing their interests and needs,while also actively planning the
community for the future.Secondly,Council must while also rresponsibly manageing a
large municipal corporation,including its future,assets,resourcesresources,assets,
needs and interests.The funding raised and used by the corporation comes primarily
from within the community,and must be used wisely,obtaining good value and cared
for responsibly.Within the context of annual corporation budgets,Council is committed
to remain engaged with the community and continually strengthen the municipal
corporation’s overall fiscal sustainability,balanced with the need for Aurora’s property
taxation levels and water rates to remain comparable and affordable within the context
of the Greater Toronto Area.
In exercising its budget setting duties,Council should be mindful that the primary
funding source for the Town’s operations is from taxpayers,and it is Council’s duty to be
responsible in this regard,making fiscally responsible decisions with respect to services
offered,the levels of those services offered,and other uses and application of the
taxpayers’funding;while being mindful of the long term and short term impacts to both
the corporation and the taxpayer.
Council recognizes that there are many different external influences which have impacts
to the Town’s budgets,costs and services..The following items each cause tax
increase pressures upon the budgets of the Town.Council is committed to address
each of these issues in a manner which respects the taxpayer,the financial health of
the municipal corporation and our staff serving Aurora.The following items each cause
tax increase pressures upon the budgets of the Town.:
•New and emerging legislative compliance requirements increasing demand on
municipal resources and staffing
•Growth of the community,and the resultant volumetric increase in demand for
services and facilities provided and available.Such costs are normally offset by
growth in base revenues arising from the new residents and businesses.
•Community expectations for newer,evolving and additional services and facilities
beyond over and above today’s existing service levels
•Aging and deteriorating infrastructure requiring tThe need to develop the financial
capacity to meet current and future capital infrastructure replacement needs to
provide reasonable service levels in a sustainable manner.Infrastructure
sustainability funding has historically been a low priority for municipal
governments across the country.Aging and deteriorating infrastructure requiring
urgent repair or replacement has now brought this issue to the forefront for all
levels of government.
•Economic pressures such as interest rate fluctuations and inflationary pressures
•Cost increases in some supply sectors which exceed inflation,such as electricity
•Pressures on wage and benefits costs,including collective agreements
Finance Advisory Committee Meeting Agenda
Tuesday,January 19,2016 Item 2 Page -3
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Attachment #1
January 19,2016 Page 2
•New and emerging legislative compliance requirements increasing demand on
municipal resources and staffing
•Service and supply contract renewals and existing committed multi-year
contracts
Council recognises that during every budget debate,various perspectives and interests
are represented and raised at the Council table.To assist in these prospective
discussions,Council has reviewed and agreed on a consensus basis that the following
principles will guide the development,review and approval processes of each budget for
the Town.These Budget Principles will be reviewed by Council in the first year of each
Council term,and at any other time as requested by Council.
The following principles will guide the preparation,review and evaluation for approvals
of the Annual Operating,Capital and Utility budgets for the Town:
Open and Transparent Process
1.The Annual Budget Process shall include opportunities for input from members of
the public and community groups.All feedback,comments and suggestions
received through solicitation tools such as email,website,social mediasurveys or
others,will be conveyed to General Committee –Budget (Budget Committee)as
they are received throughout the budget review process.
2.The Annual Budget Process should include a formalized system or survey for
community input,as determined by the Finance Advisory Committee.
3.All meetings of the Budget Committee shall be open to the public,except those
aspects which are permitted and appropriate to be held in closed session,such as
but not limited to discussions regarding collective agreement negotiation
provisions,personnel matters,or litigation.
4.Budget materials,presentations,disclosures and Budget Committee review
processes shall be open and transparent.All materials will be prepared with the
intended audience being a member of the general public where reasonable and
practical.A specific section of the Town’s website will contain all relevant budget
materials,presentations,summaries and reports throughout the process,and
updated to reflect the final approved budgets.
5.Council will undertake to complete the review and approval of the annual operating
budgets prior to the commencement of the new budget year.For a budget in
respect of the year following a municipal general election,the budget review
process will begin early in the new budget year,as required by statute.
Finance Advisory Committee Meeting Agenda
Tuesday,January 19,2016 Item 2 Page -4
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Attachment #1
January 19,2016 Page 3
6.In making comparisons to other municipalities in respect to processes,
performance,service levels,cost,revenue rates or any other basis,the Town shall
have regard to,at minimum,the following municipalities:
a.All other lower tier municipalities of York Region.
b.Municipalities in the Durham Region,Peel Region,and Region of Halton
Hills which have populations within 30%of the Town’s population.
c.York Region where applicable.
d.Ontario Municipal Benchmarking Initiative materials where applicable.
Budgets to be Fiscally Responsible
7.The Town will prepare a traditional municipal balanced budget for review.Ontario
Regulation 284/09 allows for exclusion from such budget certain accounting
estimates such as amortization,and post-employment benefit liabilities.The
impact of these excluded items will be presented separately as part of the budget
submission as required of the Regulation.
8.The Town will not use or rely upon prior year operating surpluses to fund or
balance the Operating Budget.
9.The Town will not rely on one-time or short-term temporary funding sources to
fund or balance the Operating Budget,unless directly associated with
corresponding temporary expenses for events or special purpose programs.
10.Council and staff will continually look to implement changes in technique,tools or
approaches to delivering all services and functions which will reduce costs,or
improve the efficiency or effectiveness of our work and programs.Where
necessary,cCapital investments required to achieve such improvements will be
prioritized.
11.The annual operating budget will not be impacted by year to year fluctuations of
the actual capital budget approval.Rather a singular,stable and predictable
funding transfer to Infrastructure Sustainability Reserves will be included.
12.Council is committed to adequately fund infrastructure repair,replacement and
improvements through annually evaluating the future funding needs,and when
indicated,increase annual contributions to infrastructure sustainability reserves.
Such increases will be included in the Fiscal Strategy budget area.Additionally,
the Town will ensure the planned capital program attempts to replace assets at the
optimal point in time for efficient and effective use of scarce capital funding in
accordance with the Ten Year Asset Management and Investment Plan,balancing
this with meeting community expectations,and the need for maintaining reliable
services.
Finance Advisory Committee Meeting Agenda
Tuesday,January 19,2016 Item 2 Page -5
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Attachment #1
January 19,2016 Page 4
13.Council recognizes that budget decisions made in one year may have ripple-type
impacts to future budget years.To ensure open and public awareness,for each
annual operating budget presented for tax funding,an accompanying forecast of
the next three budgets and related tax impacts shall also be presented.These
forecasts will be updated as budget decisions are made during review.The
forecasts presented will always include three or more years for consistency of
vision.Using multi-year budgets and forecasts improves fiscal health and service
delivery through:
a.better coordination of budgeting and strategic priorities,
b.greater certainty for departments in managing expenditures and service
levels
c.improved fiscal discipline of the organization
d.streamline annual budget reviews to focus on key changes in assumptions
and outlooks,and the reasons driving such changes
e.allow staff to develop budgets with fixed targets in place,allowing early
response to circumstances and budget constraints of such targets.
14.A separate Special Phasing Budget will be used to address significant permanent
tax pressures.These pressures will be mitigated through phase-in in over multiple
years,using tax stabilization reserves where necessary.Foreseen pressures,such
as the operating costs for a facility under construction,will be phased-in in advance
where possible.Unforeseen pressures will be phased-in as promptly as
appropriate.Phasing of such tax pressures may result in tax rate increases which
are in excess of inflation so as not to adversely impact existing services and
facilities provided.Where appropriate,growth revenues will be allocated towards
the new costs.
15.In the event that previously established Operating Budget directives are sought to
be reduced by Budget Committee or Council,a balanced approach will be used
whereby roughly 50%of such amount will be through internal cost reductions
which have minimal impact on service levels,with the remaining amount other 50%
through new revenue streams,fee increases exceeding inflation,or definitive
service or program reductions identified by Budget Committee.
Inflation is a Reality for both the community and the Corporation
16.Council and our taxpayers recognize that annual tax increases approximating
inflation are necessary to support perpetuation of existing services,facilities and
operations,while accommodating new growth in population and the demand for
more of these same levels of services,facilities and operations such growth
creates.For reference,Council will refer to the annual 12 month CPI index for the
Toronto Area,as reported by Statistics Canada for the period July 1 to June 30,
ending in the year prior to the budget under review.
Finance Advisory Committee Meeting Agenda
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Attachment #1
January 19,2016 Page 5
17.It is reasonable to expect administrative support overhead type costs are
necessary,and should remain in a consistent ratio to the cost of core outward
services and operations.The growth of the community and demand for services
affects both outward and administrative functions of the corporation.
The Town will Advance Priorities
18.Council is committed to advancing strategic priorities set out in our Strategic Plan,
balanced with affordable and coordinated advancements of the goals and
objectives set out in our various Master Plans,including:
a.Communications Strategic Plan
b.Corporate Administrative Plan
c.Corporate Environmental Action Plan
d.Cultural Master Plan
e.Downtown Revitalization Plan
f.Economic Development Master Plan
g.Information Technology Strategic Plan
h.Long Range Asset Management and Investment Plan
i.Official Plan (community growth plan)
j.Parks Master Plan
k.Promenade Plan
l.Pursuit of Top 100 Employer status
m.Servicing Master Plan
n.Trails and Open Spaces Master Plan
o.Transportation Master Plan
It is recognized that it may not be financially possible to make advancement in all
areas each year.Council will annually identify and prioritize such items during the
annual budget review process.
19.Innovation,efficiencies,service excellence,maintaining public safety,and service
level improvements come through the continuous learning and development of our
staff.Training and development funding will be provided in the budget in the range
of x%to x%(to be determined)of the Total Salaries and Benefits costs.In the first
year of each term of Council,data from the comparator municipalities will be
presented to confirm the Town’s percentage allocation.
Historical Underfunding must be Addressed
20.A separate annual Fiscal Strategy budget is intended to:
a.Eliminate the infrastructure funding gap which exists for all municipalities.
arose from a long history of underfunding the costs of wear &tear on
(consumption of)our infrastructure.
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Attachment #1
January 19,2016 Page 6
b.Reduce the reliance upon unsustainable revenue sources by the
Operating budget,such as interest from the Hydro Investment Reserve
Funds.
The driver for the need for current tax increases in this regard is a historical
underfunding of contributions to infrastructure reserves,and the recently mandated
detailed planning and forecasting taking place for the management of capital asset
infrastructure.This situation is being experienced in virtually all municipalities
across Canada,particularly by those municipalities such as Aurora who
implemented long periods without increasing taxes.The “no tax increase”years
actually made matters worse for each of these municipalities,as the core
operations experience inflationary pressures every year,as does the cost of
rehabilitation and replacement of infrastructure.
.
Current service levels of the base operating budget should not suffer due to the
need to address this historical funding issue.Council is committed to increase
property taxes in order to increase its contributions to reserves for funding
necessary infrastructure rehabilitation and renewal.The Town’s Ten Year Asset
Management and Investment Plan outlines and updates this strategy each year.
It is understood that the Fiscal Strategy budget could will normally push the tax
rate impact to the resident beyond inflation rates when combined with the
Operating Budget.
21.The Province has quietly been providing “tax room”to municipalities since 1998:
Since the substantial changes of property taxes with the introduction of Current
Value Assessment in Ontario in 1998,the Province of Ontario has generally held
education tax rates revenue neutral for existing properties each year,resulting in a
decline of the portion of the property tax bill going toward education.Together with
recent uploading from the Region of York and others of the Social Pooling
allocation,and other social and provincial responsibilities,the Province has
continually reduced their burden on the net property tax bill incrementally each
year.Some of these reductions have been offset by increased regulatory
compliance requirements which have directly or indirectly added costs to the
municipalities.Overall,it needs to be recognized that due to the net zero tax
increases for education taxes,the province annually opens “tax room”on the bill
for municipalities to address funding pressures such as infrastructure and
compliance costs.
Council and the community need to recognize that to access this tax room,the
local Town taxes need to increase by more than general inflationary levels.Failing
to access this tax room in one year is difficult to recapture in future years.
Finance Advisory Committee Meeting Agenda
Tuesday,January 19,2016 Item 2 Page -8
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Attachment #1
January 19,2016 Page 1
Council Budget Principles
The Council of the Town of Aurora is responsible for two key elements in carrying out
their duties.Council must represent and advance the interests,needs and actively plan
for the future,and serve the residents and businesses of the community of the Town of
Aurora,while also responsibly managing a large municipal corporation,including its
future,resources,assets,needs and interests.The funding raised and used by the
corporation comes primarily from within the community,and must be used wisely,
obtaining good value and cared for responsibly.Within the context of annual corporation
budgets,Council is committed to remain engaged with the community and continually
strengthen the municipal corporation’s overall fiscal sustainability,balanced with the
need for Aurora’s property taxation levels and water rates to remain comparable and
affordable within the context of the Greater Toronto Area.
In exercising its budget setting duties,Council should be mindful that the primary
funding source is from taxpayers,and it is Council’s duty to be responsible in this
regard,making fiscally responsible decisions with respect to services offered,service
levels offered,and other uses and application of the taxpayers’funding,being mindful of
the long term and short term impacts to both the corporation and the taxpayer.
Council recognizes that there are many different external influences which have impacts
to the Town’s budgets,costs and services.The following items each cause tax increase
pressures upon the budgets of the Town.Council is committed to address each of these
issues in a manner which respects the taxpayer,the financial health of the municipal
corporation and our staff serving Aurora:
•New and emerging legislative compliance requirements increasing demand on
municipal resources and staffing
•Growth of the community,and the resultant volumetric increase in demand for
services and facilities provided and available.Such costs are normally offset by
growth in base revenues arising from the new residents and businesses.
•Community expectations for newer,evolving and additional services and facilities
over and above today’s existing service levels
•The need to develop the financial capacity to meet current and future capital
infrastructure replacement needs to provide reasonable service levels in a
sustainable manner.Infrastructure sustainability funding has historically been a
low priority for municipal governments across the country.Aging and
deteriorating infrastructure requiring urgent repair or replacement has now
brought this issue to the forefront for all levels of government.
•Economic pressures such as interest rate fluctuations and inflationary pressures
•Cost increases in some supply sectors which exceed inflation,such as electricity
•Pressures on wage and benefits costs,including collective agreements
•Service and supply contract renewals and existing committed multi-year
contracts
1
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Attachment #1
January 19,2016 Page 2
Council recognises that during every budget debate,various perspectives and interests
are represented and raised at the Council table.To assist in these prospective
discussions,Council has reviewed and agreed on a consensus basis that the following
principles will guide the development,review and approval processes of each budget for
the Town.These Budget Principles will be reviewed by Council in the first year of each
Council term,and at any other time as requested by Council.
The following principles will guide the preparation,review and evaluation for approvals
of the Annual Operating,Capital and Utility budgets for the Town:
Open and Transparent Process
1.The Annual Budget Process shall include opportunities for input from members of
the public and community groups.All feedback,comments and suggestions
received through solicitation tools such as email,website,surveys or others,will
be conveyed to General Committee –Budget (Budget Committee)as they are
received throughout the budget review process.
2.The Annual Budget Process should include a formalized system or survey for
community input,as determined by the Finance Advisory Committee.
3.All meetings of the Budget Committee shall be open to the public,except those
aspects which are permitted and appropriate to be held in closed session,such as
but not limited to discussions regarding collective agreement negotiation
provisions,personnel matters,or litigation.
4.Budget materials,presentations,disclosures and Budget Committee review
processes shall be open and transparent.All materials will be prepared with the
intended audience being a member of the general public where reasonable and
practical.A specific section of the Town’s website will contain all relevant budget
materials,presentations,summaries and reports throughout the process,and
updated to reflect the final approved budgets.
5.Council will undertake to complete the review and approval of the annual operating
budgets prior to the commencement of the new budget year.For a budget in
respect of the year following a municipal general election,the budget review
process will begin early in the new budget year,as required by statute.
6.In making comparisons to other municipalities in respect to processes,
performance,service levels,cost,revenue rates or any other basis,the Town shall
have regard to,at minimum,the following municipalities:
a.All other lower tier municipalities of York Region.
b.Municipalities in the Durham Region,Peel Region,and Region of Halton
Hills which have populations within 30%of the Town’s population.
2
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Attachment #1
January 19,2016 Page 3
c.York Region where applicable.
d.Ontario Municipal Benchmarking Initiative materials where applicable.
Budgets to be Fiscally Responsible
7.The Town will prepare a traditional municipal balanced budget for review.Ontario
Regulation 284/09 allows for exclusion from such budget certain accounting
estimates such as amortization,and post-employment benefit liabilities.The
impact of these excluded items will be presented separately as part of the budget
submission as required of the Regulation.
8.The Town will not use or rely upon prior year operating surpluses to fund or
balance the Operating Budget.
9.The Town will not rely on one-time or short-term temporary funding sources to
fund or balance the Operating Budget,unless directly associated with
corresponding temporary expenses for events or special purpose programs.
10.Council and staff will continually look to implement changes in technique,tools or
approaches to delivering all services and functions which will reduce costs,or
improve the efficiency or effectiveness of our work and programs.Where
necessary,capital investments required to achieve such improvements will be
prioritized.
11.The annual operating budget will not be impacted by year to year fluctuations of
the actual capital budget approval.Rather a singular,stable and predictable
funding transfer to Infrastructure Sustainability Reserves will be included.
12.Council is committed to adequately fund infrastructure repair,replacement and
improvements through annually evaluating the future funding needs,and when
indicated,increase annual contributions to infrastructure sustainability reserves.
Such increases will be included in the Fiscal Strategy budget area.Additionally,
the Town will ensure the planned capital program attempts to replace assets at the
optimal point in time for efficient and effective use of scarce capital funding in
accordance with the Ten Year Asset Management and Investment Plan,balancing
this with meeting community expectations,and the need for maintaining reliable
services.
13.Council recognizes that budget decisions made in one year may have ripple-type
impacts to future budget years.To ensure open and public awareness,for each
annual operating budget presented for tax funding,an accompanying forecast of
the next three budgets and related tax impacts shall also be presented.These
forecasts will be updated as budget decisions are made during review.The
forecasts presented will always include three or more years for consistency of
3
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Attachment #1
January 19,2016 Page 4
vision.Using multi-year budgets and forecasts improves fiscal health and service
delivery through:
a.better coordination of budgeting and strategic priorities,
b.greater certainty for departments in managing expenditures and service
levels
c.improved fiscal discipline of the organization
d.streamline annual budget reviews to focus on key changes in assumptions
and outlooks,and the reasons driving such changes
e.allow staff to develop budgets with fixed targets in place,allowing early
response to circumstances and budget constraints of such targets.
14.A separate Special Phasing Budget will be used to address significant permanent
tax pressures.These pressures will be mitigated through phase-in in over multiple
years,using tax stabilization reserves where necessary.Foreseen pressures,such
as the operating costs for a facility under construction,will be phased-in in advance
where possible.Unforeseen pressures will be phased-in as promptly as
appropriate.Phasing of such tax pressures may result in tax rate increases which
are in excess of inflation so as not to adversely impact existing services and
facilities provided.Where appropriate,growth revenues will be allocated towards
the new costs.
15.In the event that previously established Operating Budget directives are sought to
be reduced by Budget Committee or Council,a balanced approach will be used
whereby roughly 50%of such amount will be through internal cost reductions
which have minimal impact on service levels,with the remaining amount other 50%
through new revenue streams,fee increases exceeding inflation,or definitive
service or program reductions identified by Budget Committee.
Inflation is a Reality for both the community and the Corporation
16.Council and our taxpayers recognize that annual tax increases approximating
inflation are necessary to support perpetuation of existing services,facilities and
operations,while accommodating new growth in population and the demand for
more of these same levels of services,facilities and operations such growth
creates.For reference,Council will refer to the annual 12 month CPI index for the
Toronto Area,as reported by Statistics Canada for the period July 1 to June 30,
ending in the year prior to the budget under review.
17.It is reasonable to expect administrative support overhead type costs are
necessary,and should remain in a consistent ratio to the cost of core outward
services and operations.The growth of the community and demand for services
affects both outward and administrative functions of the corporation.
4
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The Town will Advance Priorities
18.Council is committed to advancing strategic priorities set out in our Strategic Plan,
balanced with affordable and coordinated advancements of the goals and
objectives set out in our various Master Plans,including:
a.Communications Strategic Plan
b.Corporate Administrative Plan
c.Corporate Environmental Action Plan
d.Cultural Master Plan
e.Downtown Revitalization Plan
f.Economic Development Master Plan
g.Information Technology Strategic Plan
h.Long Range Asset Management and Investment Plan
i.Official Plan (community growth plan)
j.Parks Master Plan
k.Promenade Plan
l.Pursuit of Top 100 Employer status
m.Servicing Master Plan
n.Trails and Open Spaces Master Plan
o.Transportation Master Plan
It is recognized that it may not be financially possible to make advancement in all
areas each year.Council will annually identify and prioritize such items during the
annual budget review process.
19.Innovation,efficiencies,service excellence,maintaining public safety,and service
level improvements come through the continuous learning and development of our
staff.Training and development funding will be provided in the budget in the range
of x%to x%(to be determined)of the Total Salaries and Benefits costs.In the first
year of each term of Council,data from the comparator municipalities will be
presented to confirm the Town’s percentage allocation.
Historical Underfunding must be Addressed
20.A separate annual Fiscal Strategy budget is intended to:
a.Eliminate the infrastructure funding gap which arose from a long history of
underfunding the costs of wear &tear on (consumption of)our
infrastructure.
b.Reduce the reliance upon unsustainable revenue sources by the
Operating budget,such as interest from the Hydro Investment Reserve
Funds.
The driver for the need for current tax increases in this regard is a historical
underfunding of contributions to infrastructure reserves,and the recently mandated
5
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detailed planning and forecasting taking place for the management of capital asset
infrastructure.This situation is being experienced in virtually all municipalities
across Canada,particularly by those municipalities such as Aurora who
implemented long periods without increasing taxes.The “no tax increase”years
actually made matters worse for each of these municipalities,as the core
operations experience inflationary pressures every year,as does the cost of
rehabilitation and replacement of infrastructure.
Current service levels of the base operating budget should not suffer due to the
need to address this historical funding issue.Council is committed to increase
property taxes in order to increase its contributions to reserves for funding
necessary infrastructure rehabilitation and renewal.The Town’s Ten Year Asset
Management and Investment Plan outlines and updates this strategy each year.
It is understood that the Fiscal Strategy budget will normally push the tax rate
impact to the resident beyond inflation rates when combined with the Operating
Budget.
21.The Province has quietly been providing “tax room”to municipalities since 1998:
Since the substantial changes of property taxes with the introduction of Current
Value Assessment in Ontario in 1998,the Province of Ontario has generally held
education tax rates revenue neutral for existing properties each year,resulting in a
decline of the portion of the property tax bill going toward education.Together with
recent uploading from the Region of York and others of the Social Pooling
allocation,and other social and provincial responsibilities,the Province has
continually reduced their burden on the property tax bill incrementally each year.
Some of these reductions have been offset by increased regulatory compliance
requirements which have directly or indirectly added costs to the municipalities.
Overall,it needs to be recognized that due to the net zero tax increases for
education taxes,the province annually opens “tax room”on the bill for
municipalities to address funding pressures such as infrastructure and compliance
costs.Council and the community need to recognize that to access this tax room,
the local taxes need to increase by more than general inflationary levels.Failing to
access this tax room in one year is difficult to recapture in future years.
6
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Attachment #2
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Council Budget Review and Approval Process
The annual budget review and approval process includes the following distinct
components,each with their separate Council Review and Approval Process flow:
November/December each year (January to March following an election)
•Operating Budget
o CAO controlled operations
o Aurora Public Library Board funding request
o Aurora Cultural Centre Board funding request
o Aurora Historical Society funding request
o Central York Fire Services Budget
o Utilities Operations Budgets
•Annual Fiscal Strategy Budget
•Annual Special Phasing Budget
•Three Year Forecast Budgets
•Budget Directives for the next year’s budget
October each year (January following an election)
•Capital Budget
o Ten Year Asset Management and Investment Plan
o Annual Capital Budget
March to September
•Annual Detailed Review –departmental detailed review (rotating)
Operating Budget
The annual operating budget will be reviewed by the General Committee –Budget
(Budget Committee)in the fall period prior to each budget year,except budgets for the
year following an election.All meetings of the Budget Committee are open to the public.
A multi-year budget approach is to be used by Aurora.The current year’s budget,plus
similarly detailed forecasted budgets of the subsequent three years are to be prepared
and presented by staff,in accordance with directives from Council.The basic premise of
the multi-year budget approach is that a current budget which meets the previously
approved forecast and budget directives of Council will generally be approved by
Budget Committee and Council.Staff can more effectively plan multi-year programs,
revenue streams and staffing based on the presumption of having complying budget
forecasts receiving approval.Any variations from forecast would need to be fully
explained in the presentation of such budget.It is important to note that Committee or
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Council can still make amendments to those future approved forecasts based on new
initiatives,new regulations,or changing economic circumstances.
Using this presumed approval and multi-year approach to developing budgets will give
several advantages:
•improved coordination of budgeting for strategic priorities,
•greater certainty for departments in managing expenditures and service levels
•improved fiscal discipline of the organization
•streamline annual budget reviews to focus on key changes in assumptions and
outlooks,and the reasons driving such changes
•allow staff to develop budgets with fixed targets in place,allowing early response
to circumstances and budget constraints of such targets.
In conducting its annual operating budget review and approval process,the Budget
Committee will consider the following components and their related three year
forecasts:
o CAO controlled operations including Building Services Budget
o Aurora Public Library Board funding request
o Aurora Historical Society funding request
o Central York Fire Services Budget (as recommended by Joint Council
Committee)
o Utilities Operations Budgets
o Annual Fiscal Strategy Budget
o Annual Special Phasing Budget
Once these budget components have been reviewed by Budget Committee,Committee
will recommend adoption to Council.
Operating Budget –Aurora Cultural Centre Board funding request
To fulfil the requirements of the Cultural Services Agreement with the Aurora Cultural
Centre Board,their annual report and budget request for funding of operations will be
presented to Budget Committee.Budget Committee will deliberate on the funding
request and make any adjustments to the Operating Budget as appropriate.
Budget Communications Strategy and Key Messages
Following recommendation for adoption of the annual operating budget and forecasts,
Budget Committee will discuss and provide direction to staff regarding key messages
and budget highlights,including any specific statements or strategies to be included in
media releases,website and other communications regarding the approval of the
budget.
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Budget Directives for Next Budget
Following resolutions regarding Communications Strategy Key Messages,the Budget
Committee will turn its attention to reviewing the budget directives for the preparation of
the subsequent budget.The directives presented by staff for consideration will be those
of Council from the prior year,with any changes recommended being highlighted.
Budget Committee will recommend a set of Budget Directives for adoption by Council.
Capital Budget
The annual review and approval of the Ten Year Asset Management and Investment
Plan will be completed prior to the end of October prior to the budget year.This timing
allows for pricing advantage of early tendering,as well as allowing integration of the
capital plan into the operational plans,capacities and requirements of the affected
business units within the Operating Budget as applicable.Budget Committee will
recommend adoption to Council.Funding allocations approved in the annual capital
budget will be effective January 1 of the budget year,unless otherwise specifically
approved by Council.
Rotating Annual Departmental Detailed Budget Reviews
Separate from and completed subsequent to the annual final budget approval,a specific
group of town budget areas will be examined in detail each year during the period of
April to September or as otherwise determined by Committee.The Finance Advisory
Committee (FAC)will review the operational budget details of each operating
department on a rotating basis,so as to review all operating departments of the Town
once each term.Recommended adjustments will be reflected by staff in the following
year’s operating budget submission.
This rotating approach balances the need to review the details of each departmental
budget with the expectation of efficient and effective use of Committee time commitment
for the annual budget process.Detailed review of every department every year is not
practical.The rotational approach allows for ongoing assurance by Council,new
members to Council,and the general public that all areas of the budget have been
reviewed in extensive detail within the last few years by a committee of Council,and
that such reviews continue on a regular basis on a fixed schedule.This approach
ensures that the annual budget review of the overall corporate budget submission can
remain at a higher level of consolidation,focusing on service levels,performance
indicators and overall compliance with budget directives and prior forecasts,and the
forecasts for the following years.
The rotation of detailed reviews will be as follows (calendar year of term):
Year 1 Parks,Recreation and Culture Services
Infrastructure &Environmental Services
Utilities Operation Budget
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Year 2 Building Services Division (fees funded budget)
Building &Bylaw Services
Planning &Development Services
Year 3 Council Administration
CAO/Administration
Legal &Legislative Services
Corporate &Financial Services
Corporate Accounts
Year 4 None due to municipal election
The detailed review will include,but is not limited to:
•the current approved operating budget,with provided expanded details;
•all related fees and rates charged;
•activities,services and service levels provided by the department;
•open capital projects and status
•the area’s related content details within the Ten Year Asset Management and
Investment Plan
•adequacy of staffing and funding to meet mandatory activities,services,
commitments,and approved non-mandatory services,activities and programs
and general expectations of Council;
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Proposed 2016 Work Plan for Finance Advisory Committee (for Discussion)
a.February
i.Detailed Budget Review –Parks &Recreation Services (PRS)(45 minutes)
ii.Results of Citizen Budget Survey
iii.Discussion of future of Citizen Budget Survey
iv.Other Business
b.March
i.Detailed Budget Review –Infrastructure &Environmental Services (IES)(45
minutes)
ii.Residential/Non-Residential Split of Assessment
iii.Review of BMA Study
iv.Other Business
c.April
i.Detailed Budget Review –PRS (45 minutes)
1.Incl.Aurora Cultural Centre/Aurora Public Library/Aurora Historical
Society in discussions
ii.Review of Corporate Process for full-time Salaries and Benefits (incl.Human
Resources)
d.May
i.Detailed Budget Review –IES (45 minutes)
ii.Review of Multi-Year Budget Process
iii.Review of Budget Drivers
iv.Setting of Budget Development Directives 2017,2018,2019,2020
e.June
i.Detailed Budget Review –PRS (45 minutes)
ii.Continued discussion on Budget Development Directives –Recommendations
to Council
f.July (if required)
i.Detailed Budget Review –IES (45 minutes)
ii.Other Business
g.August (if required)
i.Detailed Budget Review –PRS (45 minutes)
ii.Other Business
h.September
i.Detailed Budget Review –IES (45 minutes)
ii.Other Business
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7.ADOPTION OF ITEMS NOT REQUIRING SEPARATE DISCUSSION
Items 1 (with the exception of sub-items 6,7,8,and 9),2,3,4,and 6 were identified as items
not requiring separate discussion.
Moved by Councillor Humfryes
Seconded by Councillor Pirri
THAT the following recommendations with respect to the matters listed as “Items Not
Requiring Separate Discussion”be adopted as submitted to Council and staff be authorized to
take all necessary action required to give effect to same:
1.General Committee Meeting Report of September 8,2015
THAT the General Committee meeting report of September 8,2015,be received and the
following recommendations carried by the Committee be approved:
19.Finance Advisory Committee Meeting Minutes of August 11,2015
THAT the Finance Advisory Committee meeting minutes of August 11,2015,be
received for information.
CARRIED
EXTRACT FROM
COUNCIL MEETING OF
TUESDAY,SEPTEMBER 15,2015
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