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2013 Final Operating Budget Report TOWN OF AURORA GENERAL COMMITTEE REPORT No. CFS13-009 SUBJECT: 2013 Operating Budget – Final Approval FROM: Dan Elliott, Director of Corporate & Financial Services - Treasurer DATE: March 19, 2013 RECOMMENDATIONS THAT the 2013 Operating Budget summarized in Schedule 2 which reflects all revisions recommended for approval by Budget Committee, resulting in a total tax levy of $33,015,900 and a total expenditure plan of $51,289,400, and an estimated 2.02% residential tax bill increase when combined with the regional and education shares of the tax bill, be approved; and THAT the Town’s full-time staff complement be increased by four (4) to 205 (excluding Library Board and Central York Fire Services staff) as presented in Schedule 5 and funded in the 2013 Operating Budget; and THAT staff prepare the necessary bylaw for adoption by Council to set 2013 tax rates and payment dates. PURPOSE OF THE REPORT To present for formal adoption the 2013 Operating Budget as recommended for approval by the Budget Committee on February 11, 2013. BACKGROUND 2013 Budget had many challenges from the outset. Budget preparations for 2013 were initiated by October 1, 2012. The 2013 budget directives were to: • Maintain existing services levels • Make clear linkages to the Town’s Strategic Plan • Identify efficiencies and savings available • Review all revenue streams and rates • Capital and Operating budgets will manage the Town’s active and passive capital infrastructure in a prudent manner, with the goal to efficiently maintain their levels of serviceability for both the long and the short term • Minimize the impact of inflation, growth of community, and legislative March 19, 2013 - 2 - Report No. CFS13-009 changes • Enhance the resiliency and capacity of the organization to respond to future challenges and change. Key issues anticipated for 2013 budget: i) Weakened Economy: Difficult economic times result in taxpayers and Council expecting strong value for dollar. As a result of the weakened economy, the Town’s assessment base grew by only 1.3% for the 2013 taxation year, compared to 1.75% for 2012 and 2.7% for 2011. This reduced growth will somewhat limit the Town’s ability to accommodate this growth and inflation without tax increases. ii) Increased Costs for Fire Services: Nearly 25.4% of the 2012 Aurora tax levy funded the fire and emergency services provided by Central York Fire Services (CYFS). For 2013, the cost of Aurora’s share of this service increased by $540,200, adding 1.69% tax rate pressure. This is due to increasing wage costs in a labour intensive operation; wages which are resolved in arbitration hearings. Further contributing is the planned final phase-in of the full cost of the new fire crew that was added in 2011. The new crew is located in and serves the Town of Aurora. Fire Services costs are shared proportionately with our partner in the CYFS, Newmarket. iii) Benefits and salaries costs: Tax rate pressure was expected to arise from existing staffing and benefits costs. This base budget item includes a provision for cost of living adjustments (COLA) of 1% effective April 1, 2013 to the entire compensation grid of the Town, except Fire Services administered by Newmarket. Increased mandated employer share of pension contributions, and the annualization of new positions added in the 2012 budget have also adversely affected our base budget. The current collective agreement with the Town’s outside and facility workers expires on March 31, 2013, requiring renegotiation. iv) The invading destructive beetle: The Emerald Ash Borer has made its way into York Region and is advancing into Aurora. Near complete destruction of most ash tree species is expected to occur over the next fifteen year period. There are few options available to mitigate the inevitable outcome. Town costs to remove and replace as many as 2,700 dead trees on town owned property are expected to be approximately $2.252 million over the period. v) Continuing infrastructure rehabilitation and replacement needs: Older roads are requiring rehabilitation, while some vehicles, equipment and facilities needed to meet or provide the Town’s services have reached the end of their economic lives and require replacement. Further, for a number of valid reasons, past recommendations for rehabilitation projects have been deferred by staff or Council in an effort to contain tax pressures. As the Town continues to grow, an increasing number of older assets come due for replacement or rehabilitation each year. Further, the costs of these projects often escalate at an inflation rate higher than the general Canadian Consumer Price Index due to the materials required. The Town’s capital rehabilitation program relies extensively on petrochemical products (in roofing, fuel and asphalt), structural steel and technology, all of which have experienced higher than average inflationary March 19, 2013 - 3 - Report No. CFS13-009 pressures. The ongoing aging of infrastructure, together with the past deferrals of projects continues to place pressure on the capital budget and reserve funds, and on staff to deliver effective and satisfactory performance from our infrastructure inventory. During 2012 staff from all departments reviewed and refined the Town’s rolling 10 year capital plan which outlines the planned investments and sources of funding and associated issues. The Plan was presented to Council in October 2012. vi) Requirement to Increase Reserve Contributions for Infrastructure Sustainability: Reserve funds established for infrastructure sustainability purposes have been relied upon continually for many years, without sustainable contributions to keep them replenished. Excluding land, the Town owns nearly $400 million of assets which are depreciating over time, leading to requirements for major repairs, refurbishment or replacement. Relative to the asset inventory, the reserve funds are nearing depletion.. The current state of these reserves places pressure on the 2013 budgets in particular, as there exists limited available sources of funding for infrastructure sustainability projects during 2013 and beyond. In October 2012, Council received a ten year capital forecast and funding recommendations, which demonstrated a need to increase our annual contributions to these reserves by 1% of tax levy or more for at least the next ten years. The 2013 budget reflects this 1% tax rate pressure. In response to these anticipated pressures, all departments were asked to submit budgets which minimized non-personnel expenses, limited new hires, and increased non-taxation revenues of fees and charges where possible. The Draft Budget as presented was reviewed and amended by Budget Committee. On January 12, 2013, an overview of the first draft of the Town’s Business Plans and the Operating and Capital budgets was presented to the Budget Committee. At that time, the draft budget had a total deficit of $1,651,600, which if the entire deficit were to be funded through increased taxation, would equate to a tax rate increase of 5.17%. Throughout the months of January and February, the Budget Committee deliberated the budget and made a number of changes. Those changes reduced the funding deficit by 33.9% to $1,090,900, reducing the effective tax rate increase to 3.42%. Schedule 1 details these changes. On February 11, 2013, the Budget Committee approved the 2013 Operating Budget for recommendation to Council. Schedule 2 shows the recommended 2013 Operating Budget Summary by Department Schedule 3’s Tax Rate Pressures Summary graphically provides general information on the Base Budget for running today’s Aurora, and preparing for the future’s Aurora. Reviewing year-over-year changes in related groups assists in understanding the source of tax rate increase pressures, and Schedule 4 shows the Expenditure Pressures and Revenue Changes which details the increases in the 2013 Budget from March 19, 2013 - 4 - Report No. CFS13-009 the 2012 Approved Budget. “Effective Tax Rate Increase” requires clarification. With the introduction of annual phase-in’s of assessment changes for each property, the town begins each budget by reducing its published tax rate from the prior year to the degree necessary to produce the same amount of tax revenue from the same properties as last year, but on the updated assessment values for those properties. This restated rate is often referred to as the “revenue neutral tax rate”. It is from this revenue neutral restated tax rate that the town calculates any pending tax change arising from its new annual budget. The effective tax rate increase, or simply “tax rate increase” as used in the balance of this report, is the expected increase to the town share of the tax bill that the average residential property will experience. THE OPERATING BUDGET The 2013 Operating Budget provides an increase in total expenditures of $1,516,500 or 4.75%, tax pressure change from $49,772,900 in 2012 to $51,289,400 in 2013. $19,689,100 or 38.4% of these total expenditures are for direct personnel related costs. The Operating Budget includes a minor increase in non-taxation revenues of $16,500. Taxation revenue has been budgeted to increase by $1,499,900. The increase is comprised of two components: assessment growth and tax rate increase. Assessment growth is the result of an increasing number of assessable properties and structures within Town. Aurora’s assessment base growth resulted in a less than expected 1.3% change in tax pressure, with $409,000 of additional taxation revenue. The less than expected assessment growth is in part a result of MPAC focussing their efforts on completing the 2013 reassessments, leaving some new properties unassessed at year-end 2012. These unassessed growth properties will be retroactively assessed during 2013, and accordingly, the Town has increased its estimate of supplementary tax revenues to offset the lower actual reported growth. The $1,090,900 balance of the increase in taxation revenue will be generated by the 3.42% tax rate increase on all properties. Town share of the tax bill to increase by 3.42% To achieve a tax rate increase of 3.42% staff and Committee managed the costs of providing existing levels of services or service enhancements which would apply pressure to increase the tax rate. The 3.42% tax rate increase, or $1,090,900 deficit, is broken down into the following elements: March 19, 2013 - 5 - Report No. CFS13-009 Increase Amount Tax Rate Pressure Running Today’s Town of Aurora Town Provided Services (includes accommodating growth and inflation) Current Staffing Cost Increases 546,500 1.71% Impact of last year’s added staff 69,200 0.22% Conversions of contract staffing to full-time 41,000 0.13% Changes in contract staffing – one net addition 36,200 0.11% Staff related costs pressures 692,900 2.17% Net expenditure reductions/non-tax revenue increases 48,100 0.15% 741,000 2.32% Fire & Emergency Services – net cost increase 400,000 1.25% Library Services – net cost increase 95,500 0.30% Less: Growth taxes from new properties (559,000) (1.75%) Tax Pressures of Running Today’s Aurora $677,500 2.12% Preparing for the Future Aurora Additional contribution to reserves for maintaining our infrastructure assets 313,400 0.98% Reduction of operational reliance on Hydro Reserve interest 100,000 0.31% Net Tax Rate Increase $1,090,900 3.42% A graphical presentation of the Tax Rate Increases is set out in Schedule 3, with further detail in Schedule 4. Running Today’s Town of Aurora Running Today’s Town of Aurora requires a modest inflationary tax increase. Town services are delivered in Aurora through the corporate administrative budget. In additional to the directly controlled service departments, the Town makes payment to Newmarket for the provision of Fire & Emergency Services for the shared and jointly managed Central York Fire Services budget, and a payment to the Aurora Library Board for the provision of library services. March 19, 2013 - 6 - Report No. CFS13-009 The Town experiences inflation in all of its operating, capital and utility services budgets. Staffing and related benefits is a significant component of the town’s expenditures. Pressures include inflationary wage adjustments, significant increases in the costs of existing pension and benefits plans (without enhancement to the plans), as well as bringing on additional staff necessary to meet the service needs of our expanding community facilities, population and the associated volume of activities. The 2013 budget provides for the conversion to full time employment status of four positions which are currently staffed with temporary contract staff. The total staffing related tax pressure in 2013 is 2.17%. All departments were challenged to accommodate these personnel cost pressures, yet maintain our existing service levels by actually reducing non-personnel expenses where possible, while also reviewing revenue fees and volumetric estimates for non-tax revenues. The net impact of these reviews on the overall Town controlled budget was a minor net operating cost increase of $48,100 0.15%, bringing the tax impact of the Town’s administered department costs to only 2.32%, without the benefit of any new tax revenue from the new properties driving the growth pressures. Two factors affected costs of Emergency Services totalling 1.25% Inflation and growth pressures: The Fire & Emergency Services budget is also affected by inflation, salary and benefits pressures. The Joint Council Committee for Central York Fire Services approved a 2013 operating budget which was 6.38% higher than the 2012 approved budget. This year’s approved CYFS budget adds $253,800 to the Aurora budget being inflationary and growth costs pressures. A further $6,000 was added by Aurora for increased training for community emergency management programs required to be in place by the province. Planned phase-in of costs of 2011’s new crew: In 2011 and 2012, Aurora drew from our Stabilization Reserve to cushion the impacts of the significant tax rate pressures created by the new full-time additional crew. It was previously anticipated that such draw from Stabilization would be reduced to zero for 2013, effectively phasing in the new crew over three years. Due to the economic climate, Budget Committee has now split this last remaining portion into the two years, 2013 and 2014. The 2013 recommended draw is in the amount $140,200, a reduction of $140,200 from the prior year. Combined, these two factors added a total of $400,000 or 1.25% to the tax rate pressures. March 19, 2013 - 7 - Report No. CFS13-009 Library Services funding increases by 3.0% from 2012, adding 0.30% to tax pressure The Library Board brought forward a budget funding requisition of $3,313,500, being $95,500 or 3.0% higher than last years funding from the tax base. The Town of Aurora Council does not approve how Library funds are spent, but rather determines the tax funding allocation for library services each year. The net result is an increase in Library Funding over 2012 which results in a 0.30% tax rate pressure. Growth Tax Revenues – 1.75% tax rate pressure relief from taxes from new development During the course of 2012, new construction and other development activities have resulted in new assessment being added to the community. However, during the course of 2012, MPAC, the assessment body, was focussed on completing its periodic complete reassessment of all properties. As a result, some additional growth that took place in Town during the year was not reflected on their yearend report upon which taxes are based. Staff have increased the normal estimate of supplementary assessments which will be levied retroactively upon these missed properties during 2013. Combined, these two factors of new growth represent an estimated 1.75% growth in tax revenues to the Town for 2013, or $559,000. This growth amount does not stem from the phase-in of reassessment adjustments for individual properties. This additional growth revenue reduces the combined tax pressure of the foregoing budget changes by 1.75%. Described above, the total costs to run Aurora today have increased by $677,500, requiring a tax rate increase of 2.12%. Preparing for the Future Aurora Increased Contributions to Capital: 1.0% tax rate pressure In October, 2012, Council received for information an updated 10 Year Capital Investment Plan. This Plan outlined expected and required capital investments separately for repair and replacement of existing infrastructure, investment in new infrastructure to meet the needs of growth of the community, as well as investment in major studies or other projects needed from time to time by the Town. The 10 Year Plan demonstrated that the existing reserves for infrastructure renewal require annual increases to the tax sourced contributions. The Plan outlined that a 1% of tax levy increase annually for 10 years should bring the annual contribution to a sustainable level for years beyond this. To improve the accountability for managing scarce capital funding, each asset manager has be internally apportioned a pro rata share of the scarce funding. This ensures that only assets at risk of impacting community service levels are brought forward for capital renewal funding. March 19, 2013 - 8 - Report No. CFS13-009 Reduced reliance on Hydro Reserve Fund interest for day to day operations In late 2012, Council agreed to again work to reduce the annual budgetary reliance on interest earned by the Hydro Reserve Funds as a source of revenue to mitigate tax pressures in the operating budget. For 2013, the operational reliance was reduced from $600,000 in 2012, to $500,000 of interest. Overall, the 2013 Operating Budget requires an additional $1,090,900 to be raised from the tax levy. This represents a 3.42% tax rate increase. 2-YEAR OPERATING BUDGET OUTLOOK As part of the 2013 Operating Budget process, each department was asked to identify any items of note which are expected to have an operating impact in the 2014 or 2015 budget years. Using this information, and making informed projections of assessment growth revenue, inflation, infrastructure pressures, and other budget drivers, Finance has prepared a three year outlook. The following table outlines the expected tax rate pressures in each separate year, with the assumption that the tax pressure of the prior year was approved. Key pressures in 2014 which will be evaluated during 2013 include contributions to a reserve to fund expected removal and replacement of ash trees killed by the Emerald Ash Borer Beetle, increased contributions to infrastructure reserves, the final phase-in of the costs of the new fire crew added in 2011, as well as the onset of operating costs of a new youth centre which is expected to open in 2014.Further, the 2014 forecast currently includes an increase in operating costs related to the on-going discussions in respect of the care and display of historical cultural artifacts. The year is also expected to see a drop in Planning Application Fees as the work on the 2C lands around St. John’s Sideroad and Leslie Street begins to move past the planning stages and into the construction phases. Building permit revenues do not impact tax rates due to regulations from the Province. 4.77%3.42% 3.74% 1.20%0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 2012 2013 2014 2015 Tax Rate Pressure Forecast March 19, 2013 - 9 - Report No. CFS13-009 CAPITAL BUDGETS On January 22, 2013, prior to the commencement of discussions on the Operating Budget, Council approved the recommendations arising from Budget Committee’s review of the 2013 Capital Budgets. The capital budget had been presented in three parts for more focussed examination due to the fundamental differences in funding sources: - Repair and Replacement Infrastructure Capital - Growth and Other New Infrastructure Capital - Major Studies and Other Non-Infrastructure Projects As a result of the concept of a “Cash to Capital” reserve allocation from tax levy, and the internal funding of capital coming from resultant “infrastructure” and other reserves, there is no longer a direct tax impact arising from the capital budget. As such, the Committee recommended capital budget is driven by asset need rather than impact on taxes. A number of projects have been noted in the schedules as “approved subject to further report from staff”. These projects have been approved in principle, yet Council has asked staff to provide additional information prior to any financial commitment for the project. Where a satisfying report to Council has already been presented subsequent to Council’s capital approval, the item is so noted in the attachments ot this report. While this year’s capital program is larger than normal, it includes the construction of a new joint operations centre from which all outdoor Aurora infrastructure will be managed and maintained, will materials, inventory and equipment storage and administrative spaces. This large capital project in the amount of $13,236,500 has been delayed several years, but must proceed to maintain services to our community. Repair and Replacement Infrastructure Projects - $7.5 million approved for investment in existing infrastructure The proposed Repair and Replacement Capital Budget for 2013 represents a gross cost of $7,481,900, funded mainly from capital reserves including the specific R & R reserves. The program includes restoration work to roads, water lines, sewer lines, storm water management systems, pavement and hardscaping, some fleet vehicles and some replacement equipment. Other projects, such as the reconstruction of part of Elderberry Trail, Springmaple Chase, and Houdini Way are planned for design work to be done in 2013, with construction to be considered in the 2014 budget process. Management has confirmed they have the resource capacity to deliver the proposed capital program. Management have also confirmed that these are their priority projects in light of the new allocation of R&R reserves by asset group, and the asset managers agree with the limited submissions. Schedule 6 outlines the approved Repair and Replacement Capital program by project. March 19, 2013 - 10 - Report No. CFS13-009 Growth and Other New Infrastructure Projects - $19.5 million investment approved for new capital additions The proposed Growth and New Capital Budget represents a gross cost of $19,485,900, to be funded from development charges of $8,066,500, grants of $282,100 and the remaining $11,137,300 from various town reserves. This capital program includes funding for the construction of a new joint operations centre on Industrial Parkway North, reconstructing Vandorf Sideroad, and additional works on Wellington Street West entry features among other small projects. Schedule 7 outlines the approved Growth and New Capital program for 2013. Major Studies and Other Projects- strategic investments approved for $235,000 The proposed Major Studies Capital Budget represents a gross cost of $235,000. The plan includes only three items, being development of a Cultural Master Plan, completing an Urban Forest Study in partnership with the York Region, and updating the Town’s Development Charges bylaw. Schedule 8 outlines the approved Major Studies and Other Projects program for 2013. Ten Year Capital Plan and financial forecast is continuously updated In October 2012, staff presented an updated consolidated 10 year capital plan and funding proposals for review. This plan is continuously updated and used by the managers responsible for the condition and renewal of our existing assets and planning our future asset investments. The 10 Year Capital Plan will be updated in early 2013 for during the reserve fund review that is underway. The October 2012 version of the Plan is available for public reference on the Town’s website. 2013 BUDGET RECOMMENDATION Overall, the Budget Committee recommends a 2013 Operating Budget which presents a proposed operational services bundle requiring an additional $1,090,900 to be raised from the tax levy. This represents a 3.42% tax rate increase to fund new and existing services and initiatives. Residential tax bill Impacts can be quantified. The 2013 Draft Operating Budget proposes a 3.42% tax rate increase on the Town portion only of the tax billing. This year’s 3.42% increase applies to all classes of property, but only to the Town share of the 2012 tax billing. For reference, Schedule 10 outlines graphically the Aurora tax rate changes since 1991. For 2013, the Region of York has approved a net effective tax rate increase of 1.94%, applied to their share of the tax billing only. The province's education rate is designed to be dollar neutral to the taxpayer despite their assessment increases. For 2013, the 2012 education rate of 0.221% has been reduced to remain revenue neutral with the higher assessment values. March 19, 2013 - 11 - Report No. CFS13-009 When considering the budget changes for the Town and the Region, together with the revenue neutral change to the education tax rate, staff estimate the effective taxpayer impact to be a 2.02% increase on their overall residential tax billing. This increase applies to properties which experienced the average reassessment change from 2012 to 2013. Those properties with higher than average reassessment change will experience tax increases higher than 2.02%, while those with lower changes will see lower tax increases. Budget Binder of details to be reissued Staff are in the process of updating the entire budget binder of details which was previously circulated to members of Budget Committee at the beginning of budget deliberations. The update will reflect all changes to budgets and updates to 2012 actuals and will be circulated to all existing binder holders. Copies of the Budget Detail Binder will be available for inspection by the public at the Clerk’s Counter on the Second Floor, the Info Aurora Counter on the Ground Floor of Town Hall, and at the Aurora Public Library. The Town’s website will be shortly updated to reflect the budget highlights. Once the detailed binder material is completed, that too will be posted to the Budget section of the website. LINK TO STRATEGIC PLAN Approval of the 2013 Operating Budget provides funding support and approval for all initiatives, services and operations of the Town, all of which support and advance the Strategic Plan objectives. Overall, the budget leads to improving the quality of life of the community we serve. ALTERNATIVE(S) TO THE RECOMMENDATIONS 1. General Committee or Council may make any changes to the budget as deemed appropriate prior to its final approval. FINANCIAL IMPLICATIONS The approval of the 2013 Operating Budget will provide the necessary funding for approved Town programs, services and operational needs for the year. March 19, 2013 - 12 - Report No. CFS13-009 CONCLUSIONS In order to fund the needs of the Town in 2013, the total 2013 Operating Budget requires an increase in tax levy from 2012 of $1,090,900 for a total Municipal Tax Levy of $33,015,900. This results in a tax rate increase of 3.42%. Council previously approved the three 2013 capital budgets totalling $27,202,800. The Water, Wastewater and Stormwater utility services budgets and rates will be considered under a separate report on tonight’s agenda. PREVIOUS REPORTS CFS13-001: Draft 2013 Operating Budget for Committee review, January 12, 2013. CFS12-049: 2013 Final Capital Budget for Council approval: December 18, 2012. ATTACHMENTS Attachment # 1 – Budget Committee Changes made to Draft Budget Attachment # 2 – 2013 Operating Budget – Summary by Department Attachment # 3 – Tax Rate Pressures Summary Attachment # 4 – Detail of Expenditure Pressures and Revenue Changes Attachment # 5 – Staff Complement Changes Attachment # 6 – 2013 Repair & Replacement Capital Program Attachment # 7 – 2013 Growth and Other Infrastructure Capital Program Attachment # 8 – 2013 Studies and Other Capital Program Attachment # 9 – Continuity of Estimated Reserves and Reserve Funds Attachment # 10 – Tax Rate History PRE-SUBMISSION REVIEW Executive Leadership Team - Wednesday, March 13, 2013 Prepared by: Dan Elliott, Director of Corporate & Financial Services - Treasurer ________________________________ ________________________________ Dan Elliott, CPA, CA Neil Garbe Director of Corporate & Financial Chief Administrative Officer Services - Treasurer Schedule 1 Town of Aurora 2013 Operating Budget BUDGET COMMITTEE CHANGES Residential Commercial STARTING POINT - CAO's draft budget January 12, 2013 =5.17 % 2.61%1.47% 1 Jan 12 P&R (22,500) 1,629,100 (0.07 %) 5.10 % 2.59%1.45% 2 Jan 14 Corp. R&E (140,200) 1,488,900 (0.44 %) 4.66 % 2.44%1.37% 3 Jan 14 Corp. R&E (235,000) 1,253,900 (0.73 %) 3.93 % 2.19%1.23% 4 Jan 21 IES (63,800) 1,190,100 (0.20 %) 3.73 % 2.12%1.19% 5 Jan 21 CFS (42,600) 1,147,500 (0.14 %) 3.59 % 2.07%1.16% 6 Jan 21 CLS (28,200) 1,119,300 (0.08 %) 3.51 % 2.05%1.15% 7 Jan 21 CLS 39,400 1,158,700 0.12 % 3.63 % 2.09%1.17% 8 Jan 21 CLS (15,000) 1,143,700 (0.05 %) 3.58 % 2.07%1.16% 9 Jan 22 IES (6,000) 1,137,700 (0.02 %) 3.56 % 2.06%1.16% 10 Staff Admin (4,000) 1,133,700 (0.01 %) 3.55 % 2.06%1.16% 11 Jan 28 Council 10,000 1,143,700 0.03 % 3.58 % 2.07%1.16% 12 Jan 28 Corp. R&E (10,000) 1,133,700 (0.03 %) 3.55 % 2.06%1.16% 13 Jan 28 Corp. R&E 8,400 1,142,100 0.03 % 3.58 % 2.07%1.16% 14 Feb 11 Council Comm (8,000) 1,134,100 (0.03 %) 3.55 % 2.06%1.16% 15 Feb 11 P&R (43,200) 1,090,900 (0.13 %) 3.42 % 2.02%1.13% (560,700) (1.75 %) Estimated Tax Rate Share Weighted Share Weighted Pressure of Tax Rate of Tax Rate (from above)Tax Bill Pressure Tax Bill Pressure 3.42%34.0 % 1.16%19.1 % 0.65% 1.94%44.0 % 0.85%24.7 % 0.48% 0.00%22.0 % 0.00%56.2 % 0.00% 2.02%1.13% RESIDENTIAL COMMERCIAL Town of Aurora Region of York Education CALCULATION OF IMPACT ON OVERALL TAX BILL Remove increase to contribution to Election Reserve Rental Revenue Sublease at 22 Church St. Absorb GC live streaming provision in existing Increase Historical Society to $60,000 Reduce Council Contingency to fund above H.S. increase Increase A.C.C. funding to 370,000 Remove Chamber Business Ach. Awards funding Remove uplift of facilities bookings clerk Increase Insurance Provision Running Revised Budget Increase Impact on Town Rate Running Town Rate Pressure Effective Combined Tax Impact e-PLAY Service Charge cost reduction Reduce Fire Crew Final Phase-In Fund EAB Reserve from other reserve/reserves Remove Staffing Request-I.T. New Contract Position Reduce Postage Cost Remove Staffing Request-IES Fleet Supervisor 1,651,600 A D J U S T M E N T S R E S U L T S Ref.Date of Decision Department I T E M Change to Operating Budget Town of Aurora Schedule 2 2013 Operating BudgetOPERATING BUDGET by DEPARTMENT - SALARY & BENEFITS SEPARATE 2012 2013 New & Other 2013 Tax Shown in $,000's Approved Base Items Recommended Dollar Pressure Budget Budget for 2013 Budget Change Change (adjusted) favourable / (unfavourable) Gross Expenses Total Salaries & Benefits 18,996.1$ 19,542.6$ 146.5$ 19,689.1$ (693.0)$ (2.17 %) Other Expenditures: Council 206.0 197.5 - 197.5 8.5 0.03 % Chief Administrative Office 445.3 437.3 - 437.3 8.0 0.03 % Customer & Legislative Services 620.7 667.9 - 667.9 (47.2) (0.15 %) Legal Services 268.6 265.9 - 265.9 2.7 0.01 % Corporate & Financial Services 660.2 738.0 - 738.0 (77.8) (0.24 %) Building & By-law Services 935.0 970.8 - 970.8 (35.8) (0.11 %) Planning & Development Services 130.2 130.8 - 130.8 (0.6) (0.00 %) Infrastructure & Environmental Services 6,742.6 6,816.5 - 6,816.5 (73.9) (0.23 %) Parks & Recreation 2,221.9 2,158.0 - 2,158.0 63.9 0.20 % Corporate Expenses 7,332.1 7,334.7 313.4 7,648.1 (316.0) (0.99 %) Fire & Emergency Operations 7,996.2 7,996.2 259.8 8,256.0 (259.8) (0.81 %) Funding Provided for Library Operations 3,218.0 3,218.0 95.5 3,313.5 (95.5) (0.30 %) Gross Expenditures 49,772.9$ 50,474.2$ 815.2$ 51,289.4$ (1,516.5)$ (4.75 %) Gross Revenues Council (13.0)$ (13.5)$ -$ (13.5)$ 0.5$ 0.00 % Chief Administrative Office - - - - - - Customer & Legislative Services (47.0) (48.0) - (48.0) 1.0 0.00 % Legal Services (17.0) (19.0) - (19.0) 2.0 0.01 % Corporate & Financial Services (143.0) (130.0) (130.0) (13.0) (0.04 %) Building & By-law Services (2,409.1) (2,518.7) - (2,518.7) 109.6 0.34 % Planning & Development Services (1,277.5) (1,314.7) - (1,314.7) 37.2 0.12 % Infrastructure & Environmental Services (894.9) (987.9) - (987.9) 93.0 0.29 % Parks & Recreation (5,484.3) (5,492.4) - (5,492.4) 8.1 0.03 % Corporate Revenue (7,971.2) (7,839.5) 90.2 (7,749.3) (221.9) (0.70 %) Fire & Emergency Operations - - - - - - (18,257.0)$ (18,363.7)$ 90.2$ (18,273.5)$ 16.5$ 0.05 % Taxation - 2012 (31,515.9) (31,515.9) - (31,515.9)$ - - Taxation - Growth from New Assessment - - (409.0) (409.0) Gross Revenues (49,772.9)$ (49,879.6)$ (318.8)$ (50,198.4)$ 16.5$ 0.05 % Net Expenditures/(Revenues) Total Salaries & Benefits 18,996.1$ 19,542.6$ 146.5$ 19,689.1$ (693.0)$ (2.17 %) Other Net Expenditures: Council 193.0 184.0 - 184.0 9.0 0.03 % Chief Administrative Office 445.3 437.3 - 437.3 8.0 0.03 % Customer & Legislative Services 573.7 619.9 - 619.9 (46.2) (0.14 %) Legal Services 251.6 246.9 - 246.9 4.7 0.01 % Corporate & Financial Services 517.2 608.0 - 608.0 (90.8) (0.28 %) Building & By-law Services (1,474.1) (1,547.9) - (1,547.9) 73.8 0.23 % Planning & Development Services (1,147.3) (1,183.9) - (1,183.9) 36.6 0.11 % Infrastructure & Environmental Services 5,847.7 5,828.6 - 5,828.6 19.1 0.06 % Parks & Recreation (3,262.4) (3,334.4) - (3,334.4) 72.0 0.23 % Corporate Expenses (639.1) (504.8) 403.6 (101.2) (537.9) (1.68 %) Fire & Emergency Operations 7,996.2 7,996.2 259.8 8,256.0 (259.8) (0.81 %) Funding Provided for Library Operations 3,218.0 3,218.0 95.5 3,313.5 (95.5) (0.30 %) 31,515.9$ 32,110.5$ 905.4$ 33,015.9$ (1,499.9)$ (4.70 %) Taxation (31,515.9)$ (31,515.9)$ (409.0)$ (31,924.9)$ 409.0$ 1.28 % NET -$ 594.6$ 496.4$ 1,090.9$ (1,090.9)$ (3.42 %) •Improving Services, Meeting Growth • Efficient & accountable government • Closely aligned with inflation 2.12%  Running Aurora  Today •Infrastructure Sustainability Funding •Long term plan to keep our Town     in good condition & working well • Reducing our reliance on interest  earned from Hydro Sale proceeds,  while protecting the purchasing  power of those proceeds 1.30%  Preparing for the  Future Costs previously paid by  water, now paid by taxes •Aurora Combined Tax  Bill  Increase is 2.02% for  residential properties  (estimated) Total  Town  Share  Tax  Increase  3.42% Summary of Changes to Aurora’s Taxes Schedule 3 Schedule 4 Town of Aurora 2013 Operating Budget DETAILED OPERATING PRESSURES FOR 2013 1.RUNNING TODAY'S TOWN OF AURORA A. TOWN PROVIDED SERVICES Changes to Full-Time and Equivalent Staffing Costs: Salaries & Wages: Cost of Living Allowance Non-Union (1.0%) (84,600) Cost of Living Allowance Union (1.0%) (18,400) (103,000) Step Increases on existing positions (134,400) (237,400) 0.74% Benefits: Rate Increase - OMERS Pension (131,600) Rate Increases - Other Benefits (119,300) (250,900) Effect of Step Increases on Benefits Costs (34,900) Effect of COLA on Benefits Costs (23,300) (309,100) 0.97% 2013 Annualization of Approved Positions (part year in 2012): Town Staff (69,200) 0.22% Converted and New Position Requests (see Schedule 5): Conversions of contract positions to full time positions (41,000) New contracts and part time staffing requests (36,200) (77,200) 0.24% Total Staff Related Pressures (692,900)$ (2.17%) Changes to all Other: Inflationary Increase in Fuel Costs, Vehicles Repair & Supplies (100,800) Inflationary Increase in Utilities (74,000) Increase in Building Repair & Maintenance (89,000) All other expenses net of other revenue 215,700 (48,100) (0.15%) TOTAL TOWN PROVIDED SERVICES (741,000)$ (2.32%)(0.79 %) B. SERVICES PROVIDED BY OTHERS: - Central York Fire Service (CYFS): Aurora's Share of CYFS 2013 Budget Increase (253,800) Emergency EOC Increase re Community Disaster Training (6,000) Aurora's Planned Decrease in Reserve Draw for Fire Support (140,200) (400,000) (1.25%)(0.43 %) - Library Operational Funding (95,500) (0.3%)(0.10 %) TOTAL SERVICES PROVIDED BY OTHERS (495,500)$ (1.55%) (0.53 %) C. GROWTH TAXES FROM NEW PROPERTIES Growth Taxes From New Properties 409,000 Change in Supplementary Tax 150,000 559,000 1.75%0.60 % TAX PRESSURES OF RUNNING TODAY'S AURORA (677,500)$ (2.12%) (0.72 %) 2.PREPARING FOR THE FUTURE AURORA Additional Contribution to Reserves for maintenance of the Towns Infrastructure Assets (313,400) Reduction of operational reliance on Hydro Reserve's Interest (100,000) (413,400) (1.3%)(0.44 %) NET TAX PRESSURE INCREASE (1,090,900)$ (3.42%)(1.16 %) C h a n g e Favourable / (UnFavourable) percentage = tax pressure Estimated Impact to Blended Res. Tax Rate Town of Aurora Schedule 5 2013 Operating BudgetCONVERTED AND NEW POSITIONS IN 2013 BUDGET 2013 Budget Requests Full-Time Reduction (Jan.-May) Net Effect (Jun.-Dec.) Complement 2013 Base Full-Time Compliment 201 Conversion Requests CFS( I.T.) Adminstrative Assistant - Conversion from Part-Time to Full-Time 31,200$ (12,200) 19,000 1 Salaries and Benefits Costs from June 1, 2013 to December 31, 2013 CFS( I.T.) Junior Database Administration - Conversion from Contract to Full-Time 12,900 (5,700) 7,200 1 Benefit Costs from June 1, 2013 to December 31, 2013 BBS By-Law Enforcement Officer - Conversion from Contract to Full-Time 12,500 (5,200) 7,300 1 Benefit Costs from June 1, 2013 to December 31, 2013 BBS Manager of Customer Service - Conversion from Contract to Full-Time 12,900 (5,400) 7,500 1 Benefit Omers Costs from June 1, 2013 to December 31, 2013 69,500$ (28,500)$ 41,000$ 205 New Contracts and Part Time Staffing Requests CAO(HR) Summer Student 10,000 - 10,000 P&R Part-Time Life Guard 20,700 - 20,700 CLS Summer Student 5,500 - 5,500 36,200$ -$ 36,200$ Total Net 2013 Budget Requests 105,700$ (28,500)$ 77,200$ D o l l a r s Net Annual Cost Town of Aurora Schedule 6 2013 Capital Budget REPAIR & REPLACEMENT PROJECTS Page Proj Reserve Ref #Funding REPAIR & REPLACEMENT PROJECTS 14047 Computer & Related Infrastructure Renewal CFS (197,800) - 197,800 14060 Financial System Optimization CFS (110,000) - 110,000 12002 Accessibility Committee Allocation (detail decided by Committee)CLS (50,000) - 50,000 72098 Ice Plant Retro-Fits Aurora Family Leisure Complex Facilities (100,000) 100,000 72099 AFLC Parking Lot Repaving and Curbing Facilities (250,000) - 250,000 72102 SARC LED Parking Lot Lights Facilities (100,000) - 100,000 72109 AFLC LED Parking Lot Lights Facilities (50,000) - 50,000 72115 Reconstruction of Retaining Wall & Asphault Driveway - ACC Facilities (200,000) - 200,000 72123 Seniors Centre West McKenzie Room Floor Restoration Facilities (15,000) - 15,000 72128 Library Supplementary HVAC Facilities (20,000) - 20,000 72129 SARC Supplementary Cooling for Inverter Panels Facilities (30,000) - 30,000 72131 ACC - Re-roof ACC#1 Facilities (400,000) - 400,000 72134 SARC Plumbing Fixtures Retrofit Facilities (33,334) (16,666) 50,000 72138 Town Hall Air Handling Units Facilities (250,000) - 250,000 72144 ACC #1 Fire Exit Stair System Replacement Facilities (30,000) - 30,000 72145 Reverse Osmosis System for AFLC Rink Ice Facilities (30,000) - 30,000 34158 Backhoe (#44) - Replacement Fleet (180,000) 180,000 34177 IES 6 Tonne Plow Truck - Replacement Fleet (180,000) - 180,000 34178 IES Paint Trailer #83 - Replacement Fleet (15,000) - 15,000 71052 1 Tonne Pick-up (#202) - Replacement Fleet (50,000) - 50,000 71086 Parks Replacement of Tractor (#219) with Light Industrial Loader Fleet (120,000) - 120,000 31079 Design - Elderberry Trail (part), Springmaple Chase, Houdini Way IES (102,600) - 102,600 31080 Reconstruction - Hilldale Rd., Hillside Ct., Kenlea Ct.IES (549,600) - 549,600 31099 Reconstruction - Tyler Street & George St IES (1,614,100) - 1,614,100 31102 Reconstruction - Hunters Glen Rd & Fox Point IES (1,193,700) - 1,193,700 34708 Yonge St LED Traffic Re-Lamping IES (21,000) - 21,000 42047 SWM Facility Cleanout - Deer Glen Terrace IES (200,000) - 200,000 42051 SWM Facility Sediment Cleaning - Deerhorn Cres & Kennedy St W IES (50,000) - 50,000 43029 Structural Watermain Relining IES (733,100) - 733,100 73155 Lions Park Stairs and Trail Repair P & R (25,000) - 25,000 74007 Fitness Equipment Replacement P & R (55,000) - 55,000 43038 Water Meter Replacement Program CFS (150,000) - 150,000 ** 72150 Fire Hall 4-3 Parking Lot Facilities (150,000) - 150,000 ** 73117 Parks Pathway System - various replacements P & R (80,000) - 80,000 ** 73140 Park Shelter/ Back Stop - various replacements P & R (75,000) - 75,000 ** 73152 Bowling Green Perimeter Border Repair P & R (15,000) - 15,000 ** 73160 Emerald Ash Borer Management Program P & R (40,000) - 40,000 ** (7,465,234) (16,666) 7,481,900 ** approved subject to further report from staff Outside Funding CostDescriptionDeptTotal Town of Aurora Schedule 7 2013 Capital Budget GROWTH & NEW PROJECTS Page Proj Ref # GROWTH & NEW PROJECTS 14035 Records & Information Management CLS (100,000) - 100,000 31110 Wellington St West Entrance Features IES (602,235) (277,065) 879,300 73182 100 Bloomington Sdrd - ORC Land / Soccer Fields P & R (405,000) - 405,000 72162 Town Hall Parking Lot Expansion Facilities (200,000) 200,000 34217 Joint Operations Centre IES (13,236,500) - 13,236,500 34628 Sidewalk Network Completion IES (314,200) - 314,200 12022 Town Hall 10 kW Photovoltaic System CAO (60,000) - 60,000 12023 Aurora Public Library 10 kW Photovoltaic System CAO (60,000) - 60,000 13008 Meeting Management Software CLS (30,000) - 30,000 34180 New Light Duty Truck - Water Fleet (20,000) - 20,000 73178 Seniors Bocce Courts P & R (42,000) (5,000) 47,000 73183 Wellington Street Planting P & R (25,000) - 25,000 34522 Speed Message Board IES (16,000) - 16,000 73186 WAMS Mobile Devices P & R (85,900) - 85,900 12016 Customer Care Implementation BBS (200,000) - 200,000 ** 73085 Arbotetum Development P & R (50,000) - 50,000 ** 31101 Reconstruction and Upgrade - Vandorf Sideroad IES (2,253,400) - 2,253,400 ** 34520 Intersection Pedestrian Signals IES (89,000) - 89,000 ** 34181 New Road Pick-up Trucks (2)Fleet (60,000) - 60,000 ** 34707 Street Light Improvements - Wellington St IES (366,600) - 366,600 ** 12025 Customer Relationship Management (CRM)CAO (100,000) - 100,000 ** 73179 Mark St to McMahon Park Pathway P & R (88,000) - 88,000 ** 73157 Skate Board Park P & R (800,000) - 800,000 ** (19,203,835) (282,065) 19,485,900 ** approved subject to further report from staff Description Dept TotalReserve Funding Outside Funding Cost Town of Aurora Schedule 8 2013 Capital Budget STUDIES & OTHER PROJECTS Page Proj Ref # STUDIES & OTHER PROJECTS 73185 Cultural Master Plan P & R (70,000) - 70,000 73180 Urban Forest Study P & R (60,000) (60,000) 120,000 14054 Development Charges Bylaw Study CFS (45,000) - 45,000 (175,000) (60,000) 235,000 Description Dept TotalReserve Funding Outside Funding Cost Town of Aurora 2013 Budget Schedule 9 2013 Operating and Capital Budget CONTINUITY of RESERVES & RESERVE FUNDS - Estimate Interest Internal External Operating Capital A.Reserves for Existing Infrastructure Infrastructure Sustainability (Repair & Replacement) - Tax Rate Funded Roads R&R - Federal Gas Tax (100% Roads)1,022.2 18.4 - 1,461.0 - (1,946.8) 554.8 - Roads & Related 2,925.0 69.8 1,484.3 - - (1,413.2) 3,066.0 Total Roads R&R 3,947.3 88.2 1,484.3 1,461.0 - (3,360.0) 3,620.8 Facilities R&R 2,549.0 53.2 1,482.9 3.4 - (2,070.1) 2,018.4 Info Technologies R&R 85.8 (2.7) 100.4 - - (307.8) (124.4) Fleet R&R 140.4 (7.0) 110.1 35.0 - (545.0) (266.5) Parks R&R (587.2) (7.5) 39.8 - - (170.0) (724.9) Special R&R-for Discretionary Projects 388.8 10.1 128.5 - - (48.2) 479.2 Total Tax Rate Funded 6,524.0 134.4 3,346.0 1,499.4 - (6,501.1) 5,002.7 - - Water Rates Funded - Water System (850.1) (69.8) 936.0 - (567.2) (2,202.8) (2,753.9) Sanitary Sewer System (1,172.4) (54.9) 864.0 - (523.6) (228.2) (1,115.2) Storm Sewer System 619.8 20.4 1,000.0 - (59.7) (449.5) 1,131.0 Total Water Rates Funded (1,402.7) (104.4) 2,800.0 - (1,150.5) (2,880.5) (2,738.1) - - Total Town Infrastructure Sustainability 5,121.2 30.0 6,146.0 1,499.4 (1,150.5) (9,381.6) 2,264.6 Library Managed R&R 432.3 10.2 130.0 - - (126.8) 445.7 Church Street School 1.4 .0 - - - - 1.4 War Memorial 3.3 .1 - - - - 3.4 Total Existing Infrastructure Reserves 5,558.2 40.4 6,276.0 1,499.4 (1,150.5) (9,508.4) 2,715.1 B.Reserves for New Infrastructure Development Charges - General Government (1,341.7) (55.7) - 199.8 (260.0) (63.0) (1,520.6) - Fire Services 628.8 16.6 - 150.7 - - 796.2 - Parks Development & Facilities (5,779.2) (246.3) - 770.8 - (1,680.1) (6,934.8) - Indoor Recreation (6,899.7) (283.5) - 1,620.0 (1,883.1) - (7,446.3) - Library 1,381.0 32.3 - 357.9 (280.0) (100.0) 1,391.2 - I.E.S. Administration & Fleet 3,015.2 70.8 - 241.8 - (266.0) 3,061.8 - Roads & Related Infrastructure 1,909.2 (55.2) - 1,534.3 - (6,132.4) (2,744.0) - Water System (917.0) (27.7) - 650.1 - - (294.6) - Storm Sewer System 1,496.8 40.9 - 474.6 - - 2,012.2 Total Development Charges (6,506.6) (507.7) - 6,000.0 (2,423.1) (8,241.5) (11,678.9) Dev/Sale Of Municipal Lands (2,023.8) (241.2) - - - (8,451.9) (10,716.9) Cash In Lieu Of Parkland 12,492.9 299.3 - 1,200.0 - (813.4) 13,178.8 Cash In Lieu Of Parking 72.7 1.7 - - - - 74.5 Parks Master Plan 561.9 13.3 - - - - 575.2 Growth & New Capital Reserve 10.4 (4.3) 383.0 - - (470.0) (80.9) Studies & Other Capital Reserve 4.5 .4 94.9 - - (70.0) 29.8 Total New Infrastructure Reserves 4,612.3 (438.6) 477.9 7,200.0 (2,423.1) (18,046.8) (8,618.3) continued………….. Estimated Dec. 31, 2012 Balance Estimated 2013 Revenue Est. 2013 Expenses Shown in $,000's Estimated Dec. 31, 2013 Balance Schedule 9 continued CONTINUITY of RESERVES & RESERVE FUNDS - Estimate Interest Internal External Operating Capital C.Reserves for Special Purposes Stabilization Working Fund 2,255.6 53.2 - - - - 2,308.8 Debt Deferral - Library (1,960.3) (77.7) 280.0 - (280.0) - (2,038.1) Future Legal 49.3 1.2 - - - - 50.4 Election 145.9 4.5 90.0 - - - 240.4 Insurance 26.0 .6 - - - - 26.6 Winter Maintenance 88.2 2.1 - - - - 90.2 Workers Compensation 1,076.2 27.0 225.0 - (85.0) - 1,243.2 Tax Rate Stabilization 212.2 5.0 - - - - 217.2 1,893.0 15.9 595.0 - (365.0) - 2,138.9 Unearned Revenue Building Department - Bill 124 793.1 10.5 - - (698.7) - 104.9 Engineering Inspections Fees 2,316.7 48.6 - - (275.3) (240.9) 1,849.1 Landscape Inspections Fees 228.6 5.4 - - - - 234.0 3,338.5 64.4 - - (974.0) (240.9) 2,188.0 Special Accounts Whitwell Donation 137.5 3.2 - - - - 140.8 Arts & Culture 61.7 1.3 - - (10.0) - 53.1 Fire Service Training 107.0 2.5 - - - - 109.6 Library Donation & Bequests 32.4 .9 - 10.0 - - 43.3 Emerald Ash Borer - 2.3 235.0 - - (40.0) 197.3 Heron Annuity 47.6 1.1 - - - - 48.7 Accessibility Advisory Committee 1.9 .0 - - - (1.8) .2 Parks & Rec Sponsorship 5.2 .1 - - - - 5.3 393.5 11.6 235.0 10.0 (10.0) (41.8) 598.2 Total Special Purposes Reserves 5,624.9 91.8 830.0 10.0 (1,349.0) (282.7) 4,925.1 D.Other Reserves Council Discretion 1,154.4 25.8 - - - (120.0) 1,060.3 Undesignated Proceeds from Aurora Hydro Sale 32,549.3 761.9 - - (500.0) - 32,811.2 Total Other Reserves 33,703.8 787.7 - - (500.0) (120.0) 33,871.5 Estimated Dec. 31, 2012 Balance 2012 Ending Balances are estimates based of best available information as of December 2012 2013 Revenue as shown are comprised of transfers from the 2013 Operating and Water Budgets and estimated Revenues from external sources 2013 Expenses as shown are derived from budgeted transfers from 2013's Capital and Operating Budgets. Shown in $,000's Estimated 2013 Revenue Est. 2013 Expenses Estimated Dec. 31, 2013 Balance Schedule 10 Town of Aurora 2013 Operating Budget HISTORY OF AURORA TAX RATE INCREASES The above are unblended, Aurora-Only Tax Rate Increase Percentages over the past 12 Years 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 9.00%8.80% 6.00%5.50% 7.90% 7.90% 4.30% 5.00% 1.80% 2.82% 3.79% 4.77% 3.42%