APTD AGENDA - Finance Advisory Committee - 20220208Town of Aurora
Finance Advisory Committee
Meeting Agenda
Date:February 8, 2022
Time:5:45 p.m.
Location:Video Conference
Due to the COVID-19 pandemic, meetings will be available to the public via live stream only on
the Town’s YouTube Channel. To participate electronically, please visit aurora.ca/participation.
Pages
1.Call to Order
2.Approval of the Agenda
3.Declarations of Pecuniary Interest and General Nature Thereof
4.Receipt of the Minutes
4.1.Finance Advisory Committee Meeting Minutes of January 18, 2022 1
That the Finance Advisory Committee meeting minutes of January 18,
2022, be received for information.
5.Delegations
6.Matters for Consideration
6.1.Memorandum from Senior Advisor, Financial Management; Re: Corporate
Revenues and Expenditures Reporting Improvements
4
That the memorandum regarding Corporate Revenues and
Expenditures Reporting Improvements be received; and
1.
That the Finance Advisory Committee comments regarding
Corporate Revenues and Expenditures Reporting Improvements
be received and referred to staff for consideration and further
action as appropriate.
2.
6.2.Memorandum from Manager, Financial Management; Re: Community
Benefits Charge Project Update
8
That the memorandum regarding Community Benefits Charge1.
Project Update be received; and
That the Finance Advisory Committee comments regarding the
Community Benefits Charge Project Update be received and
referred to staff for consideration and further action as
appropriate.
2.
7.New Business
8.Adjournment
1
Town of Aurora
Finance Advisory Committee
Meeting Minutes
Date:
Time:
Location:
Tuesday, January 18, 2022
5:45 p.m.
Video Conference
Committee Members: Mayor Tom Mrakas (Chair)
Councillor Harold Kim
Councillor Michael Thompson
Other Attendees: Doug Nadorozny, Chief Administrative Officer
Rachel Wainwright-van Kessel, Director, Finance
Jason Gaertner, Manager, Financial Management
Elizabeth Adams-Quattrociocchi, Manager, Financial Reporting
and Revenue
Ishita Soneji, Council/Committee Coordinator
_____________________________________________________________________
1. Call to Order
Councillor Kim called the meeting to order at 5:46 p.m.
Mayor Mrakas assumed the Chair at 5:48 p.m.
2. Appointment of Committee Chair
Moved by Councillor Thompson
Seconded by Mayor Mrakas
That the Committee appoint Mayor Mrakas as Chair for year 2022 of the Finance
Advisory Committee (2018-2022 term).
Carried
Page 1 of 12
2
3. Approval of the Agenda
Moved by Councillor Thompson
Seconded by Councillor Kim
The agenda as circulated by Legislative Services, be approved.
Carried
4. Declarations of Pecuniary Interest and General Nature Thereof
There were no declarations of pecuniary interest under the Municipal Conflict of
Interest Act, R.S.O. 1990, c. M.50.
5. Receipt of the Minutes
5.1 Finance Advisory Committee Meeting Minutes of December 7, 2021
Moved by Councillor Thompson
Seconded by Councillor Kim
That the Finance Advisory Committee meeting minutes of December 7,
2021, be received for information.
Carried
6. Delegations
None.
7. Matters for Consideration
7.1 Memorandum from Senior Advisor, Financial Systems and Policy; Re:
Property Tax and Water Bill Payment Options Update
Staff provided an overview of the memorandum proposing the elimination
of cash transactions at Town Hall for property tax and water bill
payments.
The Committee inquired about any exceptions to the process and
alternate cash payment options, and staff advised that cash payments will
be accepted at user financial institutions. The Committee suggested that
an adequate transition period would be beneficial to the residents and
business owners. Staff noted that residents and business owners will be
Page 2 of 12
3
notified well in advance of the effective due date as part of the roll-out
plan. The Committee and staff further discussed about the potential cost
savings due to the reduction in armoured vehicle cash pick-up services.
The Committee expressed support for the proposed initiative.
Moved by Councillor Thompson
Seconded by Councillor Kim
1. That the memorandum regarding Property Tax and Water Bill Payment
Options Update be received; and
2. That the Finance Advisory Committee comments regarding Property
Tax and Water Bill Payment Options be received and referred to staff
for consideration and further action as appropriate.
Carried
8. New Business
None.
9. Adjournment
Moved by Councillor Kim
Seconded by Councillor Thompson
That the meeting be adjourned at 5:59 p.m.
Carried
Page 3 of 12
100 John West Way
Aurora, Ontario
L4G 6J1
(905) 727-3123
aurora.ca
Town of Aurora
Memorandum
Finance
Re: Corporate Revenues and Expenditures Reporting Improvements
To: Finance Advisory Committee
From: Sandeep Dhillon, Senior Advisor, Financial Management
Date: February 8, 2022
Recommendation
1. That the memorandum regarding corporate revenues and expenditures reporting
improvements be received; and
2. That the Finance Advisory Committee comments regarding corporate revenues and
expenditures reporting improvements be received and referred to staff for
consideration and further action as appropriate.
Background
Corporate revenues and expenditures include a number of budget items that do not fit
within departmental budgets including:
Debt repayment
Contributions to capital reserves
High-level salary and benefits assumptions
Non-levy tax revenues
Business Improvement Area taxes
Receipt of grant funds and allocation to reserves
Investment income
Recovery of overhead costs from user rate funded services
The attachment included in the interim operating budget forecast reports includes the
breakdown of corporate revenues and expenditures shown in Table 1. This current
format makes it difficult to clearly explain variances.
Page 4 of 12
Corporate Revenues and Expenditures Reporting Improvements
February 8, 2022 Page 2 of 4
Table 1
Current Reporting Structure for Corporate Revenues and Expenditures
Forecast reporting description Notes
Supplementary Taxes & Payments-in-Lieu As described
Penalties on Unpaid Property Taxes Manually pulled out for reporting
purposes
Overhead Cost Re-allocation to Water &
Building Services
Manually pulled out for reporting
purposes
All Other Revenue Includes leases, grant receipts offset
equally in all other expense, reserve
draws for debt payment, investment
income, other miscellaneous revenues
Cash to Capital As described
All other expenses Retiree benefits, salary and benefit
assumptions, WSIB, contingency, debt
repayments, allocations to reserves,
revenues, other non-levy tax revenues,
etc.
The current structure also results in some challenges relating to revenue recognition for
grants under Public Sector Account Standards. Manual adjustments must be done to
not include the grants as revenue when received but when the revenue is earned.
Analysis
Restructuring corporate revenues and expenditures will make reporting and variances
easier to understand
The new proposed structure is intended to simplify and align the reporting structure
with how these corporate accounts are managed and align them with the fiscal
strategy. To do this the related revenues and expenditures reported separately will be
brought together under the new structure. This will reduce the confusion in explaining
the “all other revenue” and “all other expense” lines in shown in Table 1. The interim
forecast for 2022 are proposed to be presented as shown in Table 2 which also
includes an additional subtotal to separate like items for reporting.
Page 5 of 12
Corporate Revenues and Expenditures Reporting Improvements
February 8, 2022 Page 3 of 4
Table 2
Proposed Reporting Structure for Corporate Revenues and Expenditures
Subtotal Forecast Reporting Notes
Corporate
Management
General Corporate General items which do not fit other
categories including revenue for solar
panels, HST rebate, etc.
Salary Management Salary and benefits budget
adjustments or assumptions, WSIB,
retiree benefits
Contingency Council specific and multi-year budget
Recovery from
Rate
User Rate Recoveries Recovery for overhead from user rate
services including water and building
Fiscal Strategy Reserve Management Includes traditional “cash-to-capital”
contributions to reserve
Investment
Management
Investment income, allocation to
reserves and working capital
Debt Management Principal, interest and development
charge revenues supporting repayment
Non-Levy Tax
Items
Supplemental Taxes Supplementary taxes and reserve
contribution for excess revenue
Payments-in-Lieu of
Tax
Payments from upper levels of
government in lieu of taxes
Business Improvement
Area Levy
Levy specific to the Business
Improvement Area (BIA). Note: The
amount paid to the BIA will also be
moved here to offset the tax. Currently
this is included in the Economic
Development Budget
Tax
Adjustments/Losses
Tax adjustments and losses relating to
MPAC assessment appeals
Tax Administration
Revenues
Penalties on tax, reminder notices etc.
Page 6 of 12
Corporate Revenues and Expenditures Reporting Improvements
February 8, 2022 Page 4 of 4
Grants represent deferred revenues and the current recognition creates a reporting risk
under PSAS
The grants that have typically flowed through the Corporate Revenues and Expenditures
accounts include Ontario Community Infrastructure Fund and Canada Community
Building Fund (formerly Federal Gas Tax). These grants are used to pay for construction
in the capital budget. To date we would include the monies received as a revenue then
allocate the full amount to reserve as an expense. This practice creates a reporting risk
under PSAS as they represent deferred revenue that can only be recognized as the
construction of the project is completed. This results in these accounts being handled
differently.
In 2022, the Finance team plans to handle these grants similar to other deferred
revenues such as Development Charges. When the funds are received, they will be
allocated directly to the reserve and will not appear in the operating budget. The
revenue then gets recognized when the funds are drawn from the reserve to fund the
capital project they are budgeted to support.
The 2022 budget will be restated to reflect this change. It will reduce the overall
expenditures and non-tax revenues but have no net impact on the budget.
Finance is continuing to review the chart of accounts to simplify its use for both internal
and external reporting
In preparation for the financial systems project, Finance has been reviewing the current
chart of accounts to ensure that both the chart and the new system supports the
reporting needs of Aurora both internally and externally. Finance is continuing to work
with staff across departments to support them in providing financial reporting that will
better help them manage their business and also simplify some internal process.
The changes identified in this memo are ones that should support Council and the
public in better understanding how Aurora reports and manages corporate items and
reporting.
Attachments
None
Page 7 of 12
100 John West Way
Aurora, Ontario
L4G 6J1
(905) 727-3123
aurora.ca
Town of Aurora
Memorandum
Finance
Re: Community Benefits Charge Project Update
To: Finance Advisory Committee
From: Jason Gaertner, Manager, Financial Management
Date: February 8, 2022
Recommendation
1. That the memorandum regarding Community Benefits Charge Project Update be
received; and
2. That the Finance Advisory Committee comments regarding the Community Benefits
Charge Project Update be received and referred to staff for consideration and further
action as appropriate.
Background
The Community Benefits Charge was introduced as part of Bill 197
Bill 197 introduced a new Community Benefits Charge (CBC) through which a
municipality can recover select growth-related costs under the Planning Act. More
specifically, a CBC may be used to recover the capital costs for services needed due to
development. These may include services that are ineligible or eligible for recovery
under the Development Charges Act or through a parkland dedication bylaw. The CBC
also allows for the recovery of growth costs previously recoverable under the original s.
37 of the Planning Act (via bonusing charges) which was eliminated under Bill 197 as
well.
The CBC will recover growth costs not collected through other means for specific types
of developments
Under the new Community Benefits Charge regime, the following criteria will apply:
A CBC may only be used by lower and single-tier municipalities.
Page 8 of 12
Community Benefits Charge Project Update
February 8, 2022 Page 2 of 5
A CBC may only be levied on residential development of at least 10 residential
units and five storeys at or above ground.
A CBC may be used in conjunction with other development charges (DC) or
parkland cost recovery provisions as long as the proposed requirements for CBC
recovery are not intended to be recovered through these other provisions.
The CBC bylaw is appealable to the Ontario Land Tribunal.
The CBC must be calculated using prescribed percentages of the land value on
the day before the date of the building permit issuance for a development (CBCs
are due at the time of building permit request).
The following types of developments are exempt from community benefits charges
under the Planning Act:
Long-term care homes
Retirement homes
Universities and colleges
Memorial homes, clubhouses, or athletic grounds of the Royal Canadian Legion
Hospices
Non-profit housing
The CBC is applied to eligible developments based on a percentage of land value
The CBC rate must be calculated as a prescribed percentage of land value on the day
before the date of the building permit issuance for an approved development parcel of
land. As a land appraisal must be completed for every proposed development in order
to derive the CBC owing, an increase in administrative effort will be necessary to
coordinate and administer such processes (i.e., third party land appraisal). As per
legislation, a lower-tier municipality may charge up to a maximum of 4% of the land
value. Each municipality is required to complete a CBC strategy that demonstrates its
need to charge the full available 4% cap, as well as produce an accompanying CBC
bylaw.
Although a local municipality may impose a CBC against land to pay for the capital
costs of facilities, services and matters required for a development or redevelopment,
developers have the ability to appeal a CBC bylaw to the Ontario Land Tribunal (OLT),
which in turn may require that the Town refund partial or whole of CBC collected plus
applicable interest after a successful appeal.
Page 9 of 12
Community Benefits Charge Project Update
February 8, 2022 Page 3 of 5
The establishment of a Community Benefits Charge is optional for each lower-tier or
single-tier municipality
The benefits and costs of using a CBC will vary materially from one municipality to the
next depending upon the nature of future planned development and existing levels of
service.
The key determinant of a CBC’s feasibility will be a given municipality’s anticipated
volume of future high density residential units that will be constructed, as well as the
timing of their construction.
Each eligible municipality must determine if a CBC is financially feasible for them.
There is value in considering the alignment of a municipality’s Development Charges and
CBC Bylaw updates
A municipality is able to obtain some efficiencies through completing both its DC and
CBC bylaw updates at the same time. As both exercises require a comprehensive
review of the municipality’s future anticipated growth and the impact that this growth
will have on capital requirements, this information can be easily shared between both
exercises. It also allows for a comprehensive assessment of the tools through which
these identified requirements may be recovered such as through its development
charges, community benefits charge, or parkland dedication bylaws.
Of note, legislation requires that a DC Bylaw undergo a review and update at a minimum
once every five years; a similar requirement does not exist for a CBC bylaw. As a result,
if a CBC bylaw does not require an update, the same bylaw can be used for more than
five years.
The Town’s next development charges study and bylaw update must be completed by
March 26, 2024. On September 18, 2022, the Town will lose its ability to collect density
bonus charges under section 37 of the Planning Act.
Analysis
Developing a CBC bylaw for Aurora will provide a financial benefit to the Town
Watson & Associates’ recent CBC financial feasibility analysis has confirmed that there
is a financial advantage to the Town in establishing a CBC bylaw. Some key highlights
of Watson’s analysis include:
Page 10 of 12
Community Benefits Charge Project Update
February 8, 2022 Page 4 of 5
The Town may experience approximately 1,531 in potential CBC eligible high
density residential unit growth by 2030.
This growth has a potential of generating approximately $1,830,000 in CBCs
over this same time period.
It was assumed that the Town could charge the maximum allowable 4% of
appraised value in calculating its CBCs owing.
This charge would represent an average additional development cost of roughly
$1,195 per high density unit.
The Town can begin collecting CBCs as soon as its authorizing bylaw becomes
effective.
Staff are proceeding with the establishment of a CBC bylaw in 2022
Staff are proceeding to work with a consultant to develop a CBC bylaw in 2022. The
following reasons support proceeding now rather than waiting until the next DC study:
Aurora will lose the ability to recover density bonusing charges under section 37
of the Planning Act on September 18, 2022.
There have been recent CBC eligible developments before Council and this trend
is expected to continue.
A CBC bylaw will ensure that the Town does not forego any potential
development revenue from future high-density growth.
A CBC bylaw does not expire like a DC bylaw, therefore there is not a strong
benefit to align with the next study in March 2024.
Staff are working towards having an approved CBC bylaw in place by September 18,
2022. The required steps to establish a CBC bylaw are similar to those for a DC bylaw
but are shorter in their required duration. To expedite this process further, the Town’s
existing DC Study work will be drawn upon as much as possible. Watson & Associates
Economists Ltd. will be engaged to assist the Town in this regard as they developed the
2019 DC bylaw and subsequent amendments in 2021.
An appraiser’s services will also be required in support of this project. As the
establishment of a CBC bylaw is new for everyone, including the consultants, there is a
greater risk of unanticipated requirements arising which may result in process delays
that will need be accommodated.
Page 11 of 12
Community Benefits Charge Project Update
February 8, 2022 Page 5 of 5
Furthermore, there is sufficient approved capital budget authority under project no.
14077 – Community Benefits Charge Study and DC Update to fund the proposed CBC
strategy and bylaw.
Attachments
None
Page 12 of 12