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AGENDA - Finance Advisory Committee - 20160216FINANCE ADVISORY COMMITTEE MEETING AGENDA TUESDAY,FEBRUARY 16,2016 5:30 P.M. LEKSAND ROOM AURORA TOWN HALL PUBLIC RELEASE February 11,2016 TOWN OF AURORA FINANCE ADVISORY COMMITTEE MEETING AGENDA DATE:Tuesday,February 16,2016 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 January 19,2016 pg.1 RECOMMENDED: THAT the Finance Advisory Committee meeting minutes of January 19,2016,be received for information. 4.DELEGATIONS 5.CONSIDERATION OF ITEMS 1.Memorandum from Director,Corporate &Financial Services –pg.6 Treasurer Re:Update on Council Budget Principles and Council Budget Process Documents (Referred from Finance Advisory Committee meeting of January 19,2016 –Item 2) Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Page 2 of 3 RECOMMENDED: THAT the “Council Budget Principles”and “Council Budget Review and Approval Process”guidance documents be approved by Council. 2.Memorandum from Treasurer pg.23 Re:Departmental Budget Review –Infrastructure and Environmental Services (IES) RECOMMENDED: THAT the memorandum regarding Departmental Budget Review – Infrastructure and Environmental Services (IES)be received for information. 3.Memorandum from Treasurer pg.51 Re:Departmental Budget Review –Parks and Recreation Services (PRS) RECOMMENDED: THAT the memorandum regarding Departmental Budget Review –Parks and Recreation Services (PRS)be received for information. 4.General Discussion and Review by Committee RECOMMENDED: THAT the comments and discussions of the Committee be referred to staff for consideration. 5.Memorandum from Acting Manager of Corporate Communications pg.80 Re:2016 Your Citizen Budget Survey RECOMMENDED: THAT the memorandum regarding 2016 Your Citizen Budget Survey be received for information. Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Page 3 of 3 6.Memorandum from Director,Corporate &Financial Services –pg.89 Treasurer Re:Redesigned 2016 Interim Property Tax Brochure with Budget Information RECOMMENDED: THAT the memorandum regarding Redesigned 2016 Interim Property Tax Brochure with Budget Information be received for information. 6.NEW BUSINESS 7.ADJOURNMENT TOWN OF AURORA FINANCE ADVISORY COMMITTEE MEETING MINUTES Date:Tuesday,January 19,2016 Time and Location:5:30 p.m.,Leksand Room,Aurora Town Hall Committee Members:Councillor Michael Thompson (Chair),Councillor Harold Kim (arrived 5:45 p.m.),and Mayor Geoffrey Dawe Member(s)Absent:None Other Attendees:Councillor Tom Mrakas,Doug Nadorozny,Chief Administrative Officer,Dan Elliott,Director of Corporate and Financial Services/Treasurer,Al Downey,Director of Parks and Recreation Services,Ilmar Simanovskis,Director of Environmental and Infrastructure Services,Jason Gaertner, Manager,Financial Planning,and Linda Bottos,Council/ Committee Secretary The Chair called the meeting to order at 5:32 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 be approved. CARRIED Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Minutes Page -1 -1 - Finance Advisory Committee Meeting Minutes Tuesday,January 19,2016 Page 2 of 5 3.RECEIPT OF THE MINUTES Finance Advisory Committee Meeting Minutes of August 11,2015 Moved by Councillor Kim Seconded by Mayor Dawe THAT the Finance Advisory Committee meeting minutes of August 11,2015,be received for information. CARRIED 4.DELEGATIONS None 5.CONSIDERATION OF ITEMS 1.2016 Budget Process Debrief Staff and Committee briefly reviewed the 2016 Budget process and agreed that the new process was more efficient and worked well.The Committee discussed future areas of focus and noted that daytime Budget meetings are not convenient for all Council members. Moved by Councillor Kim Seconded by Mayor Dawe THAT the Finance Advisory Committee comments of the 2016 Budget Process Debrief be referred to staff for consideration. CARRIED 2.Memorandum from Director,Corporate &Financial Services –Treasurer Re:Update on Council Budget Principles and Council Budget Process Documents Staff provided a brief overview of the memorandum and attachments,which will be submitted for Council approval once discussed by the Committee. Moved by Mayor Dawe Seconded by Councillor Kim Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Minutes Page -2 -2 - Finance Advisory Committee Meeting Minutes Tuesday,January 19,2016 Page 3 of 5 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. CARRIED 3.Discussion of Process/Expectations for Detailed Department Budget Reviews for 2016 for Parks &Recreation Services and Infrastructure & Environmental Services Staff reviewed the possible formats and areas of focus respecting the expectations and approaches of the budgeting process.The Committee indicated that it wished to have a better sense of how budgets are created at the department level,including main drivers,major elements and accomplishments,and how they affect the budget.The Committee discussed various options,and staff noted that the Council Budget Principles document proposes that each department would undergo a line by line review once during each Term of Council.Staff provided insight into the strategy of the budget process for the departments of Parks and Recreation Services and Infrastructure and Environmental Services,and it was noted that these two departments would be the focus of review for 2016. Moved by Councillor Kim Seconded by Mayor Dawe THAT the necessary and appropriate agenda materials be provided to support the Committee’s detailed Budget review of the Parks and Recreation Services department in the following areas: a.Line by line details,including grouping summaries for identification of areas of Committee interest; b.2016 Business Plan;and c.Presentation by Director on approaches used to prepare their Budget; and THAT the necessary and appropriate agenda materials be provided to support the Committee’s detailed Budget review of the Infrastructure and Environmental Services department in the following areas: a.Line by line details,including grouping summaries for identification of areas of Committee interest; b.2016 Business Plan;and c.Presentation by Director on approaches used to prepare their Budget. CARRIED Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Minutes Page -3 -3 - Finance Advisory Committee Meeting Minutes Tuesday,January 19,2016 Page 4 of 5 4.Proposed 2016 Work Plan for Finance Advisory Committee The proposed 2016 Work Plan was briefly reviewed and the Committee was encouraged to bring any other ideas forward. Moved by Mayor Dawe Seconded by Councillor Kim 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. CARRIED 5.Next Meeting Dates/Time/Duration and Setting of Dates Moved by Councillor Kim Seconded by Mayor Dawe 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. CARRIED 6.Extract from Council Meeting of September 15,2015 Re:Finance Advisory Committee Meeting Minutes of August 11,2015 Moved by Mayor Dawe Seconded by Councillor Kim THAT the Extract from Council Meeting of September 15,2015,regarding Finance Advisory Committee meeting minutes of August 11,2015,be received for information. CARRIED 6.NEW BUSINESS None Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Minutes Page -4 -4 - Finance Advisory Committee Meeting Minutes Tuesday,January 19,2016 Page 5 of 5 7.ADJOURNMENT Moved by Councillor Kim Seconded by Mayor Dawe THAT the meeting be adjourned at 6:40 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,February 16,2016 Minutes Page -5 -5 - 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,February 16,2016 Item 1 Page -1 -6 - 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,February 16,2016 Item 1 Page -3 -7 - 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,February 16,2016 Item 1 Page -4 -8 - 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,February 16,2016 Item 1 Page -5 -9 - 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 Tuesday,February 16,2016 Item 1 Page -6 -10 - 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. Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -7 -11 - 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,February 16,2016 Item 1 Page -8 -12 - 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 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -9 -13 - 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 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -10 -14 - 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 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -11 -15 - 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 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -12 -16 - Attachment #1 January 19,2016 Page 5 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 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -13 -17 - Attachment #1 January 19,2016 Page 6 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 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -14 -18 - Attachment #2 January 19,2016 Page 1 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 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -15 -19 - Attachment #2 January 19,2016 Page 2 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. Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -16 -20 - Attachment #2 January 19,2016 Page 3 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 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -17 -21 - Attachment #2 January 19,2016 Page 4 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; Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 1 Page -18 -22 - MEMORANDUM DATE:February 16,2016 TO:Finance Advisory Committee CC:Doug Nadorozny,Jason Gaertner,Tracy Evans,Karen Oreto,Laura Sheardown FROM:Dan Elliott,Treasurer RE:Departmental Budget Review –Infrastructure and Environmental Services (IES) RECOMMENDATIONS THAT the memorandum regarding Departmental Budget Review –Infrastructure and Environmental Services (IES)be received for information. BACKGROUND At the January 19,2016 meeting of the Finance Advisory Committee,the Committee decided to commence a detailed review of departmental budgets,beginning with Infrastructure and Environmental Services (IES).Attached please find the 2016 Departmental Business Plan for IES,the applicable 2016 Corporate KPIs and Departmental KPIs,as well as a detailed listing of accounts for all functions undertaken by Infrastructure and Environmental Services.The detailed listing of accounts has been grouped by the department’s tax levy funded and rate funded operations. ATTACHMENTS Tax Levy Funded Departmental Operations Page 2016 Departmental Business Plan 2 2016 Corporate KPIs and Departmental KPIs 8 IES (Consolidated)9 IES Administration 13 Engineering Services 15 Vehicle and Equipment Maintenance 17 Roads Operations (Consolidated)19 Waste Management 21 Facilities Management (Consolidated)23 Rate Funded Departmental Operations Water and Sewer Consolidated 26 100 John West Way Box 1000 Aurora,Ontario L4G 6J1 Phone:905-727-3123 ext.4772 Email:delliott@aurora.ca www.aurora.ca Town of Aurora Corporate and Financial Services Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -1 -23 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Infrastructure &Environmental Services Department About the Infrastructure &Environmental Services Department The Department is responsible for the planning,construction,operation and maintenance of all Town owned infrastructure assets related to buildings and facilities,transportation networks,water and sewer supplies,solid waste management,and fleet. The Department supports internal clients by providing fleet management services for all Town owned equipment.This includes management,procurement,and maintenance of equipment such as vehicles,lawn care equipment and excavation equipment.The Department also manages the construction, operation and maintenance of all buildings and facilities owned and operated by the Town which are primarily in place to meet community cultural,recreational and administrative needs. The Department delivers services and provides support to clients through three organizational divisions:Linear Assets Operations,Facilities and Fleet Operations,and Engineering and Capital Projects. Services That We Provide The Department has three major functions and various associated activities including: Linear Assets Operations Water and Wastewater Operations o Water meter installations o Water quality monitoring o Sanitary Inflow and Infiltration management o Stormwater system maintenance o Asset maintenance and operation Road Network Operations o Traffic management o Winter control o Road asset management Street lighting Traffic lights Sidewalks and curbing Bridges Solid Waste o Collection Contract Administration o Customer complaints resolution o Diversion strategies Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -2 -24 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Infrastructure &Environmental Services Department Facilities and Fleet Services Facilities design,construction,repairs,and renovations Facility operations Fixed and mobile asset management,condition assessments maintenance,revitalization and replacement Fleet management and procurement Energy conservation and management Engineering and Capital Projects Development review for operational input Asset management strategy and implementation Capital planning Capital delivery Development inspections Lot Grading Departmental Initiatives that advance the Strategic Plan Fiscal Year:2016 Strategic Plan Linkage Description of Initiative Completion Date Community Goal: Supporting an exceptional quality of life for all Convert street lights to LED for energy savings. Strategic Environmental Master Plan Q1 Town Wide Stream Erosion Management Plan Strategic Environmental Master Plan Q3 Expand 2015 successes of Lean Practices pilot to include cross functional services to increase operational efficiencies On going Integrate various corporate project management practices to create consolidated delivery model Q4 Natural Environment Goal: Supporting environmental stewardship and sustainability Implement changes to winter snow control to eliminate use of sand on roads Q1 Implement garbage bag limits and bag tag program to better align with N6 best practices Q2 Issue joint N6 tender for renewal of waste collection contract that expires fall 2017 Q3 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -3 -25 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Infrastructure &Environmental Services Department Key Performance Measures Measure Results 2016 Target2012201320142015 Road operations $/Household 191.00 209.40 204.60 202.90 200.00 Waste Collection $/Household 97.90 93.40 91.90 90.80 90.00 Facilities Operations $/Household 258.90 272.50 278.00 271.80 270.00 Departmental Organization The department has three functional divisions through which it delivers its services.Each of these divisions are headed by a manager reporting to the Director. Total:66.5 FTEs Infrastructure & Environmental Services Director &Admin Support (2 FTEs ) Linear Assets Operations (25.5 FTEs ) Facilities/Fleet Operations (25 FTEs ) Engineering/Capital Projects (14 FTEs ) Fleet Management Facilities &Property Management Capital Projects Engineering Roads Operations Solid Waste Management Water/Sewer/ Storm Operations Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -4 -26 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Infrastructure &Environmental Services Department 2016 Budget Highlights: Personnel Costs 4,964.2 5,202.3 5,208.0 5,323.1 Other Expenditures 8,638.0 7,926.6 7,627.0 8,169.7 Total Expenditures 13,602.2 13,128.8 12,835.0 13,492.8 Revenues (1,990.0)(1,570.2)(1,556.3)(1,607.7) Net 11,612.2 11,558.7 11,278.7 11,885.1 Change from 2015 Budget 2.8%Unfavorable Change from 2016 Recommended Outlook of $11,949.1K:(0.5%)Favorable Infrastructure & Environmental Services 2014 Actual 2015 Projected Year End Actuals 2015 Budget (adjusted) 2016 Draft Budget The overall departmental costs and revenues are as follows: $% Personnel Costs 4,964.2 5,202.3 5,208.0 5,323.1 (120.8)(2.3%) Other Costs: Contracts Snow Removal 747.8 799.0 799.0 799.0 -- Waste Management 1,780.1 1,950.0 1,950.0 1,835.0 115.0 5.9% Road Maintenance 450.5 535.2 522.7 526.6 8.6 1.6% Street Lights 178.8 185.0 185.0 185.0 -- Facility Related 640.3 602.2 560.4 656.2 (54.0)(9.0%) Other 137.7 185.0 240.2 215.0 (30.0)(16.2%) Utilities &Fuel 2,386.3 2,320.0 2,509.0 2,548.9 (228.9)(9.9%) Operating Materials Snow Removal 335.9 260.0 260.0 260.0 -- Facility Related 201.2 204.1 215.2 238.2 (34.1)(16.7%) Road Maintenance 80.4 79.9 79.9 79.9 -- Waste Management 45.2 60.0 60.0 45.0 15.0 25.0% Other 9.1 16.0 12.3 15.0 1.0 6.2% Office &Computer Supplies 13.6 15.0 14.6 12.0 3.0 20.0% Memberships 12.8 13.5 9.8 13.5 -- All Other Expenses 1,618.3 701.7 209.0 740.5 (38.8)(5.5%) Total Other Costs 8,638.0 7,926.6 7,627.0 8,169.7 (243.1)(3.1%) Total Expenditures 13,602.2 13,128.8 12,835.0 13,492.8 (364.0)(2.8%) Revenues: Engineering Fees (1,263.3)(250.0)(1,263.3)(350.0)100.0 40.0% Transfer from Eng.Fees Reserve -(310.9)(245.0)(229.0)(81.9)(26.3%) All Other Revenue (726.7)(1,009.3)(48.0)(1,028.7)19.4 1.9% Total Revenue (1,990.0)(1,570.2)(1,556.3)(1,607.7)37.5 2.4% Net 11,612.2 11,558.7 11,278.7 11,885.1 (326.5)(2.8%) 2016 Draft Budget 2016 Budget vs 2015 Budget Fav /(UnFav) Infrastructure & Environmental Services 2014 Actual 2015 Projected Year End Actuals 2015 Budget (adjusted) Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -5 -27 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Infrastructure &Environmental Services Department Budget Breakdown by Town Service The above graphic illustrates the Infrastructure &Environmental Services (IES) Department’s historical and planned net operating budget requirements.The 2014 and 2015 values reflect the department’s final approved net operating budgets.And,the figure presented for 2016 is IES’recommended net resource requirement for that year.The identified changes between fiscal years reflect the change in net operating requirements from the year presented versus the previous year’s net financial resource need. In general,the presented trend of increasing net operating resource needs is predominantly driven by inflationary pressures such as growing salary and benefit costs as well as increases in energy costs for street light and facilities requirements.The IES Department’s net operating budget increase for 2016 represents a tax pressure of 0.85%.IES’2016 net operating budget pressures FTEs $'s Engineering &Capital Delivery 13.12 976.5 66.5 (982.1)60.9 Roads Operations 16.22 1,429.8 2,507.8 (77.6)3,860.0 Water /Sewer /Storm Operations 7.23 1,856.4 17,616.4 (19,366.5)106.4 Solid Waste Management 1.02 132.4 1,910.5 (308.8)1,734.1 Facilities and Property Management 25.37 2,360.6 3,320.2 (184.5)5,496.3 Fleet Management 3.55 315.6 358.5 (46.7)627.4 66.50 7,071.5 25,779.9 (20,966.3)11,885.1 Less:Rate Funded Budget*-1,748.4 17,610.2 (19,358.6)- Tax Levy Funded Service Costs 66.50 5,323.1 8,169.7 (1,607.7)11,885.1 *Rate funded budget is still under review and has not been finalized. 2016 SERVICE IMPACT NET OPERATING SERVICE PERSONNEL OTHER OPERATING REVENUE Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -6 -28 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Infrastructure &Environmental Services Department are presented in more detail in the following Key Changes for 2016 Budget section of this report. Key Changes for 2016 Budget: Variances Description Amount Energy Cost Increases Inflationary Cost increases for utilities 228,900 Salary related COLA & Step Increases COLA/Step Increases 120,800 Facility Related Increases Increased R &M contracts as well as supplies 88,100 Various Other Operating Budget Increases 3,700 Waste Management Savings Reduction in collection contract (115,000) Total 326,500 OUTLOOK Continued community growth will drive increased resource needs to maintain target service levels along with inflationary and salary pressures.A key initiative in the coming years will be to expand the Lean Practices program with the goal of eliminating waste and finding new efficiencies both within line businesses and across the organization.The expected outcome of this program is increased cost efficiency and increased resource capacity to allow for strategic reallocation of resources to high priority service areas.The expectation is that Lean becomes a departmental culture of awareness and willingness to look at service delivery with a critical view of value add and efficiency. Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -7 -29 - Corporate Level KPIs Measure Results Targets 2012 2013 2014 2015 2016 Road Operating Cost per Lane KM ($’s)8.39 9.05 8.43 8.50 8.50 Water Program Costs per Account ($’s)870 866 912 920 920 Solid Waste Costs per Account ($’s)97 90 92 92 92 Facility Cost per Square Meter ($’s)97 103 100 105 105 Departmental Level KPIs (Consolidated from Departmental Business Plans) Infrastructure &Environmental Services Measure Results Target 2012 2013 2014 2015 2016 Road operations $/Household -209.40 204.60 200.00 200.00 Waste Collection $/Household -93.40 91.90 90.00 90.00 Facilities Operations $/Household -272.50 278.00 270.00 270.00 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -8 -30 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -9 -31 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -10 -32 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -11 -33 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -12 -34 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -13 -35 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -14 -36 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -15 -37 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -16 -38 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -17 -39 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -18 -40 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -19 -41 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -20 -42 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -21 -43 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -22 -44 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -23 -45 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -24 -46 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -25 -47 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -26 -48 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -27 -49 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 2 Page -28 -50 - MEMORANDUM DATE:February 16,2016 TO:Finance Advisory Committee CC:Doug Nadorozny,Jason Gaertner,Tracy Evans,Karen Oreto,Laura Sheardown FROM:Dan Elliott,Treasurer RE:Departmental Budget Review –Parks &Recreation Services (PRS) RECOMMENDATIONS THAT the memorandum regarding Departmental Budget Review –Parks and Recreation Services (PRS)be received for information. BACKGROUND At the January 19,2016 meeting of the Finance Advisory Committee,the Committee decided to commence a detailed review of departmental budgets,beginning with Parks and Recreation Services (PRS).Attached please find the 2016 Departmental Business Plan for PRS,the applicable 2016 Corporate KPIs and Departmental KPIs,as well as a detailed listing of accounts for all functions undertaken by Parks and Recreation Services. ATTACHMENTS Tax Levy Funded Departmental Operations Page 2016 Departmental Business Plan 2 2016 Corporate KPIs and Departmental KPIs 9 PRS (Consolidated)10 PRS Administration 16 Cultural Services 18 Business Support 20 Parks Operations 22 Community Programs 25 Special Events 28 100 John West Way Box 1000 Aurora,Ontario L4G 6J1 Phone:905-727-3123 ext.4772 Email:delliott@aurora.ca www.aurora.ca Town of Aurora Corporate and Financial Services Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -1 -51 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Parks and Recreation Services Department About the Parks and Recreation Services Department The Parks and Recreation Services Department is responsible for the planning, development,general/financial management and administration of Parks and Recreation.We oversee planning,construction and maintenance of parks,as well as development and delivery of community and heritage programs to enhance and improve the quality of life of Aurora residents through participation in recreation programs and use of recreation facilities and active/passive green spaces. The Parks and Recreation Services Department provides essential public services which ensure a high quality of both natural and urban environments and promote a healthy,satisfying lifestyle for all Aurora citizens.Parks and open spaces,recreational facilities,sports,fitness,creative and social programs are all managed with the aim of encouraging the greatest possible public participation in fitness and leisure. Services That We Provide The Parks and Recreation Services Department delivers a wide range of programs and services primarily focused on the following areas: 1)Parks and Recreation Services Administration 2)Parks and Open Spaces and Trails 3)Recreational Programming and Community Development Initiatives 4)Business Support Services 5)Cultural Services Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -2 -52 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Parks and Recreation Services Department Departmental Initiatives that advance the Strategic Plan Fiscal Year:2016 Strategic Plan Linkage Description of Initiative Anticipated Completion Date Community Goal: Supporting an exceptional quality of life for all Advancement of recommendations from the Parks and Recreation Master Plan and Sports Plan Advancement of recommendations from the Cultural Precinct Plan Public Art Policy Implementation of recommendations coming out of the Cultural Master Plan Implementation of a short and long term plan for the Aurora Collection Q3 Q1 Q2 Q1 Q3 Economy Goal: Enabling a diverse,creative and resilient economy Update and review of the departmental Pricing Policy Q3 Natural Environment Goal: Supporting environmental stewardship and sustainability Assist Council on the determination and disposition of use for Library Square, Victoria Hall,the Armoury and the Petch House Ongoing discussions and negotiations regarding land acquisitions for parkland purposes Q3 Q1 Key Performance Measures Measure Result 2015 Target 2016 Target201320142015 #Participant hours special events (annually)-based on MPMP stats 371,000 417,400 n/a 420,000 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -3 -53 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Parks and Recreation Services Department Measure Result 2015 Target 2016 Target201320142015 #Participant hours registered programs (annually)-based on MPMP stats: 194,061 206,934 -210,000 %of Membership retention (Fitness)60 48.56 -65 Revenue per Fitness Member 217.44 113.91 -225.00 Departmental Organization The department has four functional divisions through which it delivers its services.Each of these divisions are headed by a manager reporting to the Director. Total:49.5 FTE Parks &Recreation Director's Office (2 FTEs ) Manager,Parks and Open Spaces (17.5 FTEs ) Manager,Recreation Programming (18 FTEs ) Manager,Business Support (11 FTE) Curator (1 FTE) Parks Management Recreation Programming, Registration & Reception Fitness Culture / Special Events Facilities Booking & Advertising Culture / Special Events Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -4 -54 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Parks and Recreation Services Department 2016 Budget Highlights: Personnel Costs 5,644.3 6,308.3 6,267.9 6,570.9 Other Expenditures 3,093.1 2,090.5 2,230.4 2,245.3 Total Expenditures 8,737.3 8,398.8 8,498.3 8,816.2 Revenues (6,077.9)(5,520.9)(5,298.7)(5,410.5) Net 2,659.5 2,877.9 3,199.6 3,405.7 Change from 2015 Budget 18.3%Unfavorable Change from 2016 Recommended Outlook of $3,466.2K:(1.7%)Favorable Total Parks &Recreation Services 2014 Actual 2015 Projected Year End Actuals 2015 Budget (adjusted) 2016 Draft Budget The overall departmental costs and revenues are as follows: $% Personnel Costs 5,644.3 6,308.3 6,267.9 6,570.9 (262.6)(4.2%) Other Costs: Contracts Cultural Services 377.0 377.0 377.0 393.9 (16.9)(4.5%) Community Programs 314.3 145.1 318.8 204.1 (59.0)(40.7%) Special Events 110.1 112.6 112.6 114.5 (2.0)(1.7%) Grass Cutting 26.9 35.0 30.0 35.0 -- Shrub Bed Maintenance 95.9 100.0 89.3 100.0 -- Arboricultural Services 54.4 60.0 50.1 60.0 -- Other 117.9 112.6 71.6 87.5 25.1 22.3% Operating Materials &Supplies Park Maintenance Materials 117.4 129.3 128.0 129.3 -- Program Materials 37.7 44.2 34.3 44.7 (0.5)(1.1%) Other 40.4 76.5 18.5 126.7 (50.2)(65.6%) Park Operation Utilities (incl.water)190.6 182.0 165.0 197.6 (15.6)(8.6%) Soccer Bubble Reality Taxes 49.4 56.3 56.3 57.4 (1.1)(2.0%) Security 33.9 35.0 33.4 35.0 -- Purchase of Trees 94.4 50.0 59.8 50.0 -- Printing -Advertising 37.8 44.0 44.0 42.4 1.6 0.3% All Other Expenses 1,394.8 531.0 641.8 567.1 (36.1)(6.8%) Total Other Costs 3,093.1 2,090.5 2,230.4 2,245.3 (154.8)(7.4%) Total Expenditures 8,737.3 8,398.8 8,498.3 8,816.2 (417.4)(5.0%) Revenues: Community Program Revenues (2,104.7)(2,696.9)(2,512.8)(2,603.2)(93.7)(3.5%) Facility Driven Revenues (2,085.5)(2,097.3)(2,069.7)(2,171.1)73.8 3.5% Parks Dev DC Revenues (177.0)(160.6)(160.6)(156.4)(4.2)(2.6%) All Other Revenue (1,710.7)(566.1)(555.6)(479.8)(86.3)(15.2%) Total Revenue (6,077.9)(5,520.9)(5,298.7)(5,410.5)(110.4)(2.0%) Net 2,659.5 2,877.9 3,199.6 3,405.7 (527.8)(18.3%) 2015 Budget vs 2014 Budget Fav /(UnFav) 2016 Draft Budget 2015 Budget (adjusted) Total Parks &Recreation Services 2015 Projected Year End Actuals 2014 Actual Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -5 -55 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Parks and Recreation Services Department Budget Breakdown by Town Service The above graphic illustrates the Parks &Recreation Services (PRS) Department’s historical and planned net operating budget requirements.The 2014 and 2015 values reflect the department’s final approved net operating budgets.And,the figure presented for 2016 is PRS recommended net resource requirement for that year.The identified changes between fiscal years reflect the change in net operating requirements from the year presented versus the previous year’s net financial resource need. In general,the presented trend of increasing net operating resource needs is predominantly driven by inflationary pressures such as growing salary and benefit costs;as well as,maintaining existing service levels in an environment of a growing client base both externally and internally.Also included in the 2016 operating budget is $20,000 in support of a new community multi-cultural event to be funded through a draw from the Council discretionary reserve.The PRS FTEs $'s Recreation Programming, Registration &Reception 21.79 3,132.5 516.2 (2,183.6)1,465.1 Fitness 2.51 549.8 28.0 (420.0)157.8 Culture/Special Events 3.42 441.6 736.7 (191.0)987.4 Facilities Booking &Advertising 3.55 289.3 27.7 (2,170.7)(1,853.7) Parks Management 18.23 2,157.7 936.7 (445.3)2,649.2 49.50 6,570.9 2,245.3 (5,410.5)3,405.7 SERVICE PERSONNEL OTHER OPERATING REVENUE NET OPERATING SERVICE IMPACT 2016 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -6 -56 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Parks and Recreation Services Department Department’s net operating budget increase for 2016 represents a tax pressure of 1.4%. PRS’2016 net operating budget pressures,if any,are presented in more detail in the following Key Changes for 2016 Budget section of this report. Key Changes for 2016 Budget: Variance Description Amount Annualization of previously approved positions Facility Bookings Administrator, Youth Programmer,Curator $230.5 Loss of revenue-Parks Operations Loss of York Region grass cutting contract $137.0 Recreation Program Revenue Decreases Decrease in planned recreation program revenues $93.7 Salary related COLA & Step Increases Incremental cost of living allowance &step increases in relation to existing positions $32.1 Aurora Cultural Centre & Aurora Historical Society Grant Increases Grant increase in recognition of growth and inflation $19.9 Other net operating costs Various minor other operational costs $14.6 Total $527.8 OUTLOOK The Parks and Recreation Services Department continues to experience growth pressures,affecting both Operating and Capital budgets. Population growth will continue to place additional pressure on our ability to maintain existing service levels without the allocation of additional staff,facility space or the re-positioning of existing service levels to meet this demand. Many of the services we provide today are completed with the assistance of private contractors,partnerships,the employment of part-time staff and volunteers.We continue to also rely on sponsorship and advertising to support a number of initiatives and will endeavor to expand this program in the future. Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -7 -57 - TOWN OF AURORA 2016 BUSINESS PLAN AND BUDGET Parks and Recreation Services Department Staff will be introducing to Council the Parks and Recreation Master Plan and Sports Plan that will help guide our vision for the future.These will have an impact on our existing resources and challenge us to focus on what our role is in the delivery of service to the community. A shift in demographics to a growing senior’s and youth population will require a corresponding shift in the delivery of programs.This,combined with a growing cultural diversity will place service demands that must be considered in future budgets. The expansion of our Cultural portfolio must also be considered,a multi-year plan,outlining programming opportunities and staffing needs has been presented to Council and will require consideration in future budgets. A user pay philosophy does not come without limits and careful consideration on an individual’s ability to pay must be reflected in future budgets and service delivery models. Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -8 -58 - Corporate Level KPIs Measure Results Targets 2012 2013 2014 2015 2016 Recreation Program Utilization Rates (%)53 55 77 80 80 Prime Ice Time Rentals (%)81 80 76 90 90 Square Meters of Indoor Recreational Facilities per 1,000 Residents (square meters)850 845 841 840 840 Operating costs of providing Recreation Programs per Town Resident ($’s)3.88 3.88 -3.90 3.90 Departmental Level KPIs (Consolidated from Departmental Business Plans) Parks &Recreation Services Measure Results Targets 2012 2013 2014 2015 2016 Number of Annual Participant Hours for Special Events (hours)371,000 371,000 417,400 420,000 - Number of Annual Participant Hours for Registered Programs (hours)194,061 194,061 206,934 210,000 - Percentage of Fitness Membership Retention (%)60 60 48.56 65 - Revenue per Fitness Member ($)217.44 217.44 113.91 225.00 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -9 -59 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -10 -60 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -11 -61 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -12 -62 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -13 -63 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -14 -64 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -15 -65 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -16 -66 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -17 -67 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -18 -68 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -19 -69 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -20 -70 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -21 -71 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -22 -72 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -23 -73 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -24 -74 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -25 -75 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -26 -76 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -27 -77 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -28 -78 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 3 Page -29 -79 - MEMORANDUM DATE:February 16,2016 TO:Finance Advisory Committee FROM:Anthony Ierullo,Acting Manager of Corporate Communications RE:2016 Your Citizen Budget Survey RECOMMENDATIONS THAT the memorandum regarding 2016 Your Citizen Budget Survey be received for information. BACKGROUND In July 2014,Town staff formed a working group to design and implement a Citizen Budget online interactive survey with staff from Open North,a non-profit company that creates online tools for citizen engagement. The survey was designed to inform residents on how the Town allocates tax dollars for various programs and services,provide homeowners the opportunity to provide feedback,and serve as a broad gauge of resident satisfaction with municipal spending. The survey was built with the potential to re-deploy annually or as required.The 2016 Your Citizen Budget survey offered interested residents the option to provide feedback on 13 core programs and services offered by the Town,by indicating whether funding should be increased,reduced,or remain the same.As with most online surveys,the results of the survey are not statistically valid or representative. The 2016 Your Citizen Budget survey calculated the selections instantaneously, displaying the effect the choices would have on the resident’s tax levy.The survey was online from August 27 to November 3,2015,and was promoted in the Town Notice Board,newspapers,Town website,and social media feeds.Approximately 75%of visitors accessed the survey either directly or through the Town’s website. 100 John West Way Box 1000 Aurora,Ontario L4G 6J1 Phone:905-727-3123 ext.4742 Email:aierullo@aurora.ca www.aurora.ca Town of Aurora Administration Department Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 5 Page -1 -80 - February 16,2016 -2-2016 Your Citizen Budget Survey The Town received 88 unique completed surveys with a verified and screened IP address. The 2016 Your Citizen Budget survey posed the following 13 questions,providing examples of programs and services in each area: “How would you adjust your property tax funding to …” 1)Community Planning? 2)Enforcement and Licensing? 3)Animal Control? 4)Road Network Operations? 5)Snow Management and Plowing Operations? 6)Solid Waste Management? 7)Municipal Facilities? 8)Community Programs? 9)Parks,Trails and Open Spaces? 10)Cultural Services? 11)Fire and Emergency Services? 12)Infrastructure Rehabilitation and Replacement Contributions? 13)Aurora Public Library? The results of the 2016 Your Citizen Budget survey are summarized in Attachment 1.Given the costs,response rate and statistical validity of the data,staff will explore options to better engage the public as part of the 2017 Budget. ATTACHMENTS Attachment 1 –Your Citizen Budget Report,Town of Aurora Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 5 Page -2 -81 - Your Citizen Budget Report Town of Aurora Attachment 1 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 5 Page -3 -82 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 5 Page -4 -83 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 5 Page -5 -84 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 5 Page -6 -85 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 5 Page -7 -86 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 5 Page -8 -87 - 28.8%(19 respondents)are unhappy with the services they receive from the Town. 53.4%(47 respondents)are happy with the service they receive from the Town. 25%(22 respondents)chose not to answer this question. 14.8%(13 respondents)did not think this survey helped them to better understand where their local municipal taxes are spent. 59.1%(52 respondents)think this survey helped them to better understand where their local municipal taxes are spent. 26.1%(23 respondents)chose not to answer this question. Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 5 Page -9 -88 - MEMORANDUM DATE:February 16,2016 TO:Finance Advisory Committee FROM:Dan Elliott,Director,Corporate &Financial Services -Treasurer RE:Redesigned 2016 Interim Property Tax Brochure with Budget Information RECOMMENDATIONS THAT the memorandum regarding Redesigned 2016 Interim Property Tax Brochure with Budget Information be received for information. BACKGROUND Attached please find,for your information and review,a copy of the recently redesigned interim property tax brochure,which was mailed with tax bills in the recent week. Finance and Communications staff worked collaboratively to redevelop this brochure as part of the 2016 Budget Communications Plan.We trust you will find our efforts in this regard a sound investment of our time. The previous brochure was 8.5”x 11”,black and white format,and was printed double-sided and folded for mailing in-house at copier rate costs of approximately $120.00 plus staff time in print and fold.It contained no budget information,as normally the budget was not approved until after the production requirement for this piece. The new brochure is legal size,in colour,and was printed and folded by an outside contractor for approximately $1,000.All design work was completed in-house by Communications staff. ATTACHMENTS Attachment 1 –2016 Interim Property Tax Bill Brochure Town of Aurora Corporate &Financial Services Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 6 Page -1 -89 - Attachment 1 Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 6 Page -2 -90 - Finance Advisory Committee Meeting Agenda Tuesday,February 16,2016 Item 6 Page -3 -91 -