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AGENDA - Budget Committee - 20191125 Budget Committee Meeting Agenda 2020-22 Operating Budget Review Monday, November 25, 2019 6 p.m. Council Chambers Aurora Town Hall Public Release November 19, 2019 Town of Aurora Budget Committee 2020-22 Operating Budget Review Meeting Agenda Monday, November 25, 2019 6 p.m., Council Chambers 1. Approval of the Agenda 2. Declarations of Pecuniary Interest and General Nature Thereof 3. Delegations (a) Irene Clement, representing Aurora Community Arboretum Re: Aurora Arboretum Update & 2020 Budget Plans 4. Consideration of Items 1. 2020-22 Operating Budget – Business Plans and Presentations (a) Central York Fire Services 2020-22 Operating Grant (Tab 22) Fire Chief Ian Laing, and Mike Mayes, Treasurer, Town of Newmarket Recommended: 1. That the presentation by Central York Fire Services be received; and Budget Committee Meeting Agenda 2020-22 Operating Budget Review Monday, November 25, 2019 Page 2 of 4 2. That the request for 2020-22 operating grant to the Central York Fire Services in the amounts of $11,755,300, $12,200,100, and $12,613,600, which includes an annual allocation of $6,000 for snow clearance for 2020, 2021, and 2022 respectively be tentatively approved. (b) Aurora Historical Society Board 2020-22 Operating Grant (Tab 23) John Green, President, Aurora Historical Society (AHS), Patricia Wallace, AHS Board Secretary, and Geoff Dawe, AHS Board Director Recommended: 1. That the presentation from the Aurora Historical Society Board be received; and 2. That the request for 2020-22 operating grant to the Aurora Historical Society Board amounts of $81,300, $82,800, and $80,900 for 2020, 2021, and 2022 respectively be tentatively approved. (c) Aurora Cultural Centre Board 2020-22 Operating Grant (Tab 23) Suzanne Haines, Executive Director, Aurora Cultural Centre, and Eric Acker, President of Board of Directors Recommended: 1. That the presentation and the business plan from the Aurora Cultural Centre Board be received; and 2. That the request for the 2020-22 operating grant to the Aurora Cultural Centre Board in the amounts of $424,000, $432,500, and $441,100 for 2020, 2021, and 2022 respectively be tentatively approved. (d) Aurora Sports Hall of Fame 2020-22 Operating Grant (Tab 23) David Thom, President, Aurora Sports Hall of Fame Recommended: Budget Committee Meeting Agenda 2020-22 Operating Budget Review Monday, November 25, 2019 Page 3 of 4 1.That the presentation from the Aurora Sports Hall of Fame be received; and 2.That the request for the 2020-22 operating grant to the Aurora Sports Hall of Fame in the amounts of $28,700, $29,300, and $29,900 for 2020, 2021, and 2022 respectively be tentatively approved. (e) Operational Services (Tab 19) Al Downey, Director of Operational Services (Deferred from Budget Committee meeting of November 18, 2019) Recommended: 1.That the presentation by Al Downey, Director of Operational Services, be received; and 2.That the 2020-22 Operating Budget for the Operation Services department as presented be tentatively approved. (f) Water and Sewer Budget (Tab 19) Al Downey, Director of Operational Services (Deferred from Budget Committee meeting of November 18, 2019) Recommended: 1.That the presentation by Al Downey, Director of Operational Services, be received; and 2.That the 2020-22 Operating Budget for the Water and Sewer as presented be tentatively approved. (g)Planning and Development Services (Tab 20) David Waters, Director of Planning and Development Services (Deferred from Budget Committee meeting of November 18, 2019) Recommended: Budget Committee Meeting Agenda 2020-22 Operating Budget Review Monday, November 25, 2019 Page 4 of 4 1.That the presentation by David Waters, Director of Planning and Development Services, be received; and 2.That the 2020-22 Operating Budget for the Planning and Development Services department as presented be tentatively approved. (h)Corporate Revenues and Expenses (Tab 21) Rachel Wainwright-van Kessel, Director of Finance (Deferred from Budget Committee meeting of November 18, 2019) Recommended: 1.That the presentation by Rachel Wainwright-van Kessel, Director of Finance, be received; and 2.That the 2020-22 Operating Budget for Corporate Revenues and Expenses as presented be tentatively approved. 2.FS19-045 – 2020-22 Operating Budget Decision Unit Items Recommended: 1.That Report No. FS19-045 be received; and 2.That the remaining incremental Aurora Cultural Centre 2020, 2021, and 2022 budget pressures be funded from existing budgeted Library Square funding; and 3.That a further 0.5 % tax levy increase for 2020 and 2021 in support of the Town’s planned Library Square construction debenture, be approved; and 4.That the Library Square debenture annual carrying cost funding be contributed to the Tax Rate Stabilization reserve until such time that it is required for its intended purpose. 5.Adjournment Delegation Request 7KLV'HOHJDWLRQ5HTXHVWIRUPDQGDQ\ZULWWHQVXEPLVVLRQVRUEDFNJURXQGLQIRUPDWLRQ IRUFRQVLGHUDWLRQE\HLWKHU&RXQFLORU&RPPLWWHHVRI&RXQFLOPXVWEHVXEPLWWHGWRWKH &OHUN¶VRIILFHE\WKHIROORZLQJGHDGOLQH D.m.2QH ()%XVLQHVVDay Prior to the Requested Meeting Date Council/Committee Meeting DQGDate: Subject: Name of Spokesperson: Name of Group or Person(s) being Represented (if applicable): Brief Summary of Issue or Purpose of Delegation: Please complete the following: +DYH\RXEHHQLQFRQWDFWZLWKD7RZQVWDIIRU &RXQFLOPHPEHUUHJDUGLQJ\RXUPDWWHURILQWHUHVW"<HV ܆܆1R ܆ ,I\HVZLWKZKRP"'DWH ܆ ,DFNQRZOHGJHWKDWWKH3URFHGXUH%\ODZSHUPLWVILYHPLQXWHVIRU'HOHJDWLRQV /HJLVODWLYH6HUYLFHV &OHUNV#DXURUDFD 7RZQRI$XURUD -RKQ:HVW:D\%R[ $XURUD21/*- Budget Committee Nov 25, 2019 6pm Aurora Arboretum Update & 2020 budget plans Irene Clement Aurora Community Arboretum To provide a outline of activities last year and plans for 2020. ✔ Al Downey approx Oct 24, 2109 ✔ Budget Committee Meeting Agenda 2020-22 Operating Budget Review Monday, November 25, 2019 Delegation (a) Page 1 of 1 Town of Aurora Budget Committee Report No. FS19-045 Subject: 2020-22 Operating Budget Decision Unit Items Prepared by: Jason Gaertner, Manager, Financial Management Department: Finance Date: November 25, 2019 Recommendation 1. That Report No. FS19-045 be received for information; and 2. That the remaining incremental Aurora Cultural Centre 2020, 2021 and 2022 budget pressures be funded from existing budgeted Library Square funding; and 3. That Council approve a further 0.5% tax levy increase for 2020 and 2021 in support of the Town’s planned Library Square construction debenture; and 4. That the Library Square debenture annual carrying cost funding be contributed to the Tax Rate Stabilization reserve until such time that it is required for its intended purpose. Executive Summary Through its report and accompanying presentation on November 5, 2019, staff presented to Council the Town’s first multi-year draft operating budget for 2020, 2021 and 2022 for review by the Budget Committee. The draft operating budget recommended a tax rate increase that was within Council’s directed annual rate increase ceiling of inflation plus one percent for the Town’s key fiscal strategies. • Two operating budget items were identified for the Budget Committee’s consideration that were not included in staff’s presented draft operating budget Budget Committee Meeting Agenda 2020-22 Operating Budget Review Monday, November 25, 2019 Item 2 Page 1 of 5 November 25, 2019 Page 2 of 5 Report No. FS19-045 Should Council approve these two operating budget items and the budget as presented, the Town’s total required tax levy rate increase would become 3.4, 3.4 and 2.9 percent for 2020, 2021 and 2022, respectively. Background Through the report and accompanying presentation on November 5, 2019, staff presented to Council the Town’s first multi-year draft operating budgets for 2020, 2021 and 2022 for review by the Budget Committee. At that time, staff also presented two operating budget items for consideration. Analysis Two operating budget items were identified for the Budget Committee’s consideration that were not included in staff’s presented draft operating budget Two budget pressures have been identified that do not fall within staff’s current recommended tax levy increases for each year. These pressures relate the Town’s planned Library Square development and the operations of its community partner, the Aurora Cultural Centre (ACC). Library Square Together, Council and staff are in the process of refining the final design and requirements relating to the construction of a new community hub, currently referred to as Library Square. The planned Library Square work includes many dimensions: • A new addition to the Church Street School • A new outdoor square • An above ground pedestrian bridge linking the new addition and the library • New parking configuration, and • New library vestibule, program rooms and Yonge St. Entrance The total required investment for this project is presently estimated to be $47.9 million. The Town’s proposed investment strategy for this project includes the use of debt as a source of funding. The Town’s debt tolerance for this project was defined as the debt principal cannot exceed a point where its annual carrying costs exceed an equivalent value to a 1 percent tax rate increase being approximately $484,700 in 2020. The investment strategy for this project plans to use the maximum defined debt threshold. This debt is expected to be required in late 2021 or early 2022. This provides the Town Budget Committee Meeting Agenda 2020-22 Operating Budget Review Monday, November 25, 2019 Item 2 Page 2 of 5 November 25, 2019 Page 3 of 5 Report No. FS19-045 time to strategically phase in the annual carrying costs of principal and interest for this debt. It is recommended that this new debt’s annual cost equivalent of a 1 percent tax increase be phased in over 2020 and 2021 in two equal tax rate increases of 0.5%. Aurora Cultural Centre (ACC) The ACC has identified operating pressures in each of the next three fiscal years totaling $67,000, $19,000 and $21,400 in 2020, 2021 and 2022, respectively. These pressures are driven by a 2019 base salary funding catch-up of $30,400, new required annual salary adjustments and rental income losses. The Town has budgeted inflationary increases of $8,300, $8,500 and $8,700 for 2020 to 2022, respectively. Once these available amounts have been applied to the pressures, the net remaining ACC funding requirements become $58,700, $10,500 and $12,800 for the next three years. Staff recommend that each of these net remaining pressures be funded out of existing Library Square operating budget funding that is included in staff’s recommended draft budget thus avoiding the need for any further incremental tax rate increases. Advisor y Committee Review The Financial Advisory Committee does not review the annual draft operating budget, however they review the detailed budgets of each Town department on a rotating basis. This approach allows the Budget Committee to focus their review on the key changes and pressures arising in the annual budget, while relying upon the work of the Finance Advisory Committee in regards to the review of each department’s ongoing core operating budget details. Legal Considerations Section 291 of the Municipal Act provides that a municipality may prepare and adopt multi-year budgets. For the second and each subsequent year, Town Council will have the opportunity to re-review the budget, make any necessary changes and re-adopt the budget for the year to which the budget applies. Financial Implications Should the Budget Committee recommend to Council for its approval the above noted operating budget items, a further increase to the Town’s tax levy rate of 0.5 percent in both 2020 and 2021 would be necessary. With these increases included, the Town’s Budget Committee Meeting Agenda 2020-22 Operating Budget Review Monday, November 25, 2019 Item 2 Page 3 of 5 November 25, 2019 Page 4 of 5 Report No. FS19-045 total required tax levy rate increase could become 3.4, 3.4 and 2.9 percent for 2020, 2021 and 2022, respectively. If Council approves the additional tax increases for Library Square carrying costs, it is recommended that the Town also plan to allocate the funds to the Town’s Tax Rate Stabilization Reserve until such time it is required for its intended purpose. The Tax Rate Stabilization reserve is used to stabilize or control the effects on the Town’s annual required tax levy relating to a significant short-term positive or negative budget shock. Communications Considerations This report will be posted to the Town’s Budget and Financial Information web page for transparency and accountability as part of the overall annual budget communications and engagement plan. Link to Strategic Plan Developing the annual budget supports all aspects of the Strategic Plan. Specifically, this report supports the Plan principles of Leadership in Corporate Management, Leveraging Partnerships, and Progressive Corporate Excellence and Continuous Improvement. Alternative(s) to the Recommendation 1. The Committee may make recommendations for changes to the 2020, 2021 and/or 2022 draft operating budgets at any time during its review process. Conclusions Council established a budget target for the 2020, 2021 and 2020 operating budgets of inflation plus 1 percent in support of fiscal strategies, representing a maximum 3 percent tax increase. Through careful review, staff have developed and presented to the Budget Committee for its review and recommendation to Council for approval draft operating budgets for the next three years requiring an annual tax rate increase of 2.9 percent that meets all of Council’s criteria and goals as set out in their directives to staff. Staff have also identified two pressures in addition to its recommended 2.9 percent increase each year along with recommendations for their mitigation. Should Council Budget Committee Meeting Agenda 2020-22 Operating Budget Review Monday, November 25, 2019 Item 2 Page 4 of 5 Budget Committee Meeting Agenda 2020-22 Operating Budget Review Monday, November 25, 2019 Item 2 Page 5 of 5