2017-18 Budget Process & Updates
Published: Friday, 03 February 2017 10:31
The Town’s Budget Process is underway! As per the Town’s Standard Operating Procedure adopted in 2015, the first Council meeting to discuss the next fiscal budget begins at the regularly scheduled November Committee of the Whole (COW).
The 2017/18 Budget process began on November 1, 2016 with a goal of approving a balanced budget on March 21, 2017 at the regularly scheduled Town Council meeting.
Use the menu below to navigate each meeting to view agenda packages, presentations and key changes. November 1, 2016, Committee of the Whole.
November 1, Committee of the Whole
January 17, Committee of the Whole
January 24, Special Committee of the Whole
February 7, Committee of the Whole
March 7, Committee of the Whole
The following information was presented for discussion:
- Key Financial Data review of inflation, expected growth (or lack thereof) and other known factors that may create budget limitations to inform discussion on budget philosophy/approach
- Capital Budget Information including the first draft of the 10-Year Capital Invesment Plan (CIP) and Project Charters.
- preliminary PVSC data up only 1% overall
- new construction, average market value increase, impact of CAPPED not yet available
- CAP % not available, currently estimate 1.4% – 1.5% (previous year was 0.3%)
- preliminary PVSC data, drop of 2.75% (10% in 2015)
- don’t have details yetInflation/Cost of Living Adjustment (COLA)/CPI
As noted for assessments, provincial CAPPED Assessment Program tied to October over October comparison (expected to = 1.4%). Average COLA to end of September = 1.3%
Capital Budget Information
The first draft of the CIP included the following projects in Year 1 (201718):
- GIS Equipment Upgrade
- King St. (Victoria to Willow)
- Blomidon Terr. Sidewalk
- Sunset Terr./Sunset Dr.
- Wickwire Ave. Sidewalk
- Shoreline Protection
- Cemetery Wall
- East End Gateway Design
- Evangeline Park
- Nature Preserve Dam - engineering
- Mobile Skateboard Park
Not included in the list above is general equipment/upgrades and engineering costs that are consistent year over year. You can view the complete draft CIP in the agenda package from November 1, 2016. (see link below)
No formal motion is made at this stage. Rather staff is seeking consensus from members of Council on overall budget goals as they move towards the 1st Draft Version 2017/18 Operating and Capital Budgets (Town and Water Utility)
November 1 Agenda Package
November 1 Presentation
November 1 Minutes
Staff updated Council on changes to the draft 10-Year Capital Investment Plan (CIP) based on discussions that took place at the November 1 COW and new information that has been presented to Council regarding future capacity of the Sewer Treatment Plant. The following information points were discussed:
- Direction on what year the traffic lights and the type of active transportation infrastructure should be in the CIP based on the Information Report prepared by Public Works. (found in the agenda package)
- Gaspereau Avenue – Public Works has identified the need to replace a section of older storm water pipe due to deterioration of corrugated metal sections. Current draft CIP shows $180,000 in Year 2. May need to be moved to Year 1.
- Other project changes in the “street” section of the plan.
- Storm Water – Main Street to railway tracks at Orchard Avenue. This was originally part of the 2016/17 Orchard Avenue project. A review by Dept. of Environment and Fisheries and Oceans was needed in this section of the project and therefore it was deferred to 2017/18 for completion.
- In reviewing water quality issues with Public Works staff, Kent Ave. was identified as a higher priority and it was moved forward to Year 2, with Westwood Ave. moving out to Year 3. This change will also allow time to re-evaluate the scope of work required on Westwood Ave.
- Impact of Sewer Treatment Plant expansion added to Year 4 of the CIP.
As with November 1, no formal motion is made at this stage. Staff is continuing to seek consensus from Council.
January 17 Agenda Package
January 17 Minutes
The Special COW in January is the first time the draft Operating budget for the upcoming fiscal year is presented to Council. Below is a highlight of information presented:
- Draft Town Operating Budget V1 is NOT a balanced budget; short fall of $102,300
- Options for reach a balanced budget may include a tax increases and/or other funding (possibly reserves) and/or expenditure cuts.
- This is only draft one and there is still time to make changes – 2 more months!
Impact on taxpayer if the rate is left unchanged:
All ratepayers (residential & commercial)
- Overall, 2.0%
- Excluding new construction/reno, TBD%
- Residential, 2.17%
- Commercial, 1.16%
- New construction data/impact to be provided by Feb COW
Operating Expenditures up $247,400 overall and include:
- Salary & wages (permanent and seasonal), increase $122,500
(including related benefit costs)•
- Contracted Services $110,400
(includes $60,000 for additional mill/pave on Main St & >$21,800 RCMP)
- Operational Equip/Supplies $62,600
(includes Wharf Repairs, Mona Parsons Project, Wayfinding)
- Stipends/Honorariums $21,600
Items not yet included in the first draft:
- Landmark East and Wolfville School one time capital requests - $200,000
- Upward Pressure on Grants to Organizations Policy re: Strategic Partners category
- Wolfville Historical Society
- Recreation Study – joint initiative with other municipal units
- Other costs – Municipal units in Kings Co. appear to have renewed momentum on common topics, could mean new costs for regional initiatives
- Any savings IF Wolfville pulls out of the REN as per notice given a year ago
No formal motion is made at this stage. Staff is continuing to seek consensus from Council.
January 24 Agenda Package
January 24 Presentation
January 24 Minutes
Based on the direction from Council at the January 24th COW and adjusted budget estimates, the budget shortfall has gone from $102,300 down to $22,600. As staff continues to review their budget estimates, there may be room to get closer to break even without substantial decision points. This becomes less likely if decisions are made to add further expenditures to the budget.
Changes made to reduce the shortfall include:
- Deed Transfer Tax – increasing the total budget estimate brings the total up to $300,000. This is still within the 5 year average actual results, but as previously noted there is an increased risk if the upcoming year shows a slowdown in real estate movement. Actual for fiscal 2015/16 was over $410,000. Fiscal 2014/15 actual results were a low of $257,000.
- Adjustment to Employee Benefits (both full time and seasonal) is the result of a more refined estimate. The first draft of the budget reflected a general 20% cost (in relation to wages). Further work was done on these estimates, with the expected actual for each department calculated. Each department, depending on salary/wage levels and participation in health/dental plan, will experience different levels of benefit cost %’s ranging from 15% to just over 20%.
- Professional Development – reflects removal of dollars left in individual departmental budgets that are already included in the HR Dept. budgeted estimate.
- Legal – judgement call on legal, bringing the budget estimate closer to what a “normal” year should be rather than what has been experienced the last couple of years. If the actual experience for 2017/18 sees another issue requiring higher than normal requirements, then senior management will review to fit the extra costs within the overall Town operations. If not possible, and if costs require, a report would come to Council seeking alternative funding, e.g. reserves.
- Utilities, Operational equip/supplies, Contracted services, and Partner Contributions are refinements of original budget estimates.
- Operating Reserves – increased use of reserves discussed at January Special COW, to fund two projects;
- o Mona Parsons
- o Wharf repairs at Waterfront Park
Recap of other budget notes/highlights:
- No change in tax rates from 2016/17
- 48% of residential properties under CAP program (1.4 % increase in assessment)
- 40% of residential assessments have less than a 1.4% increase in assessment
- No change in tax rate means 88% of residential properties will see a 1.4% OR less increase in their taxes. Almost 20% would see a reduction in taxes.
- 42% of commercial accounts saw increased assessments
- 17 commercial accounts (15%) had no change in assessment
- 48 (43%) accounts had a reduction in assessment
- No change in tax rate means 63% of businesses will see a reduction in Town property taxes, notwithstanding increased costs related to increases in the Business Development Area Rate. Further info will be available by meeting time on February 7th.
NOT Included in V2:
- Landmark East and Wolfville School requests - $200,000 ($100,000 each)
- Devour request beyond Policy - $5,000
- Wolfville Historical Society beyond Policy - $5,000
- Potential costs for additional planning Contracted Service/term wages to assist with MPS amendments (one-off outside of MPS review process) - $25,000
In terms of the Capital Budget, it has remained essentially unchanged with the exception of the street lights proposed at Main/Gaspereau. Council direction coming out of January Special COW was to see what funding impact would occur by moving the project tentatively to Year 2. This change is now reflected in the draft CIP. The management team discussed this change after COW, and a couple of issues were identified that would speak to the lights fitting better in Year 3 vs. Year 2.
The Water Utility Budget has been included in this draft. As discussed in past years, this budget has few, if any, decision points for COW/Council. The Capital Budget format has been changed to be more consistent with the format used by the Town Capital Fund, and to fit more closely with the requirements of the UARB template. The key needed at this stage continues to be a Rate Study review that takes into consideration the impacts on the Water Utility of water consumption trends and future capital requirements.
No formal motion is made at this stage. Staff continues to seek direction to reach a balanced budget.
February 7 Agenda Package
February 7 Presentation
February 7 Minutes
The Operational Plan provides many details on what staff expects to complete over the next year, as well as goals for the succeeding three years. In terms of budget dollars it is important to recall the following for 2017/18:
- No change to the residential or commercial tax rate. Approximately 88% of residents will see an increase of 1.4% (CPI) OR less in their tax bill. (Direction was provided to staff to add 1 cent to the residential tax rate following discussion at the March 7 meeting).
- Enhanced Mill & Pave Program for Main Street included at a cost of $60,000. This focuses on the west end of Town and will be funded by way of Operating Reserves with a similar approach projected through to 2020/21.
- WBDC funding increased to $100,000 to be funded by way of an area rate levy. Proposal is for a single area rate versus the two tier (inside/outside downtown) system used in the past.
- Sewer rate increase required to correct previous years error in setting rate, and to enable the sewer rates to contribute an increased amount to capital reserves.
- Professional Development dollars maintained at 2016/17 budget levels, i.e. budget cuts from a year ago have not been built back into upcoming fiscal year.
- Summer recreation programming to be contracted to Acadia University again, assuming mutually agreeable terms can be reached.
- The MPS Review has been extended thru the full 2017/18 year with additional resources being funded by way of Operating Reserves.
- Requested one-off MPS amendments (2 identified) have been added at a cost of $25,000 to be funded by way of Operating Reserves.
- Budget for VWRM has been reduced by amount of anticipated share of year end surplus by VWRM for the 2016/17 year.
- Kings Transit budget increase offsets potential savings Town could have realized with the retirement of the 2005 debenture issue incurred for the purchase of buses a decade ago.
- Grants to Organization budget maintained at 2016/17 level. Based on revised SPP recipients approved by Council last May, this effectively reduces the dollars left for CPP recipients to $11,000. This is less than the amount paid out to CPP recipients in 2016/17 as the CPP portion was over budget for the year.
- Additional $5,000 allocated to Historical Society grant bringing total to $10,000 ($5,000 SPP and $5,000 as requested).
- REN contributions continued in 2017/18, with continued review of effectiveness of staying in this regional partnership.
- Budget to assist with the installation of the Mona Parsons project included at $15,000, to be funded from Operating Reserves.
- Repairs to the wharf at Waterfront Park included at a cost of $20,000, to be funded from Operating Reserves.
- Capital budget funding increased by just over 1% consistent with long term goal to ensure adequate funding for the 10 Year CIP.
Equally important to remember are the items not included in the draft budget at this stage:
- No allowance yet for Landmark East or Wolfville School requests of $100,000 each. Separate RFD’s will be reviewed at March 7th COW prior to budget RFD. (Direction was provided to staff to include a grant of $50,000 in the 2017/18 budget for the Wolfville School Playground project).
- No allowance yet for Devour request for funds in addition to amount provided thru the Grant Policy (SPP’s).
- No funding for Valley Business Leaders Initiative.• No funding for the iValley Smart Communities ask.
- No funding for the Annapolis Valley Chamber of Commerce Tourism request.
- No specific funding for (although some of these groups may qualify under CPP grants);o Annapolis Valley Honour Choiro International gathering of Town Criers.
- Cost Recovery revenue from WBDC per existing Town Policy not included (was $4,400 prior to cut in WBDC funding two years ago). Town has not billed per Policy over last two years in light of the significant reduction in funding provided to WBDC. With possible return to higher funding levels, as proposed in draft budget, Town could start to bill this again. The fee was intended to recover a reasonable fee for staff time required to administer the area rate and deal with collections as it relates to the area rate. Proposed new WBDC Policy removes the requirement to bill for this service fee.
- No discretionary allowance for the Mayor’s Office. There has been some discussion that an allowance may be appropriate and that perhaps $2,000- $5,000 may be a reasonable amount.
- No allowance for grant to Acadia University in relation to an overall athletics agreement, i.e. facility, public access, one time requests, etc. The goal would be to replace the numerous one off deals, requests, old hand shake agreements into a focused funding agreement. Fiscal 2017/18 focus would be on negotiating terms of an agreement, with eye to implementation for 2018/19. This may mean Council would have to consider one off requests over the next year if Acadia had specific initiatives they were seeking funding assistance on, eg. last year’s CIS Women’s Soccer Championship. Staff have been working on these negotiations during 2016/17 but are unresolved to date.
Key Points to Consider/Highlight
- Town continues to rely on use of Operating Reserves. This can be a risk over the long term as annual operating budgets should develop the ability to absorb some new/unexpected costs in order to adapt to changing conditions. Additionally, as has been noted in each of the last few budget years, the Town still needs to rely on the Operating Reserve funds to supplement the 10 Year CIP requirements.
- The data related to Capital and Operating Reserves has been updated to include final draft CIP and newly created 4-year operating budget projections. It now shows the Operating Reserve Balance drops to the minimum benchmark required by Year 5 and this does not include possible use of those reserves for large one time grant requests. Removal/use of an additional $200,000 for these requests would mean the balance would drop to minimum required benchmark by Year 3. This would be a less than an ideal situation as future flexibility to deal with unexpected events would be severely limited.
- The current 10 Year CIP continues to evolve and a noted gap exists in Years 5 through 10 in relation to Community Infrastructure. It is anticipated as more planning/design work is developed that additional projects will be desirable. Ability to address these projects will be limited if reserve funds are utilized excessively in the next two years.
- Annual increase to the capital funding is assumed to be 1% per year for the next five years, and 2.5% increase annually for the following five years. If this goal is not met, notwithstanding any new grants obtained, then the funding shortfall for the 10 Year CIP will grow significantly beyond the current Year 10 shortfall of over $700,000.
- A one page, ALL Divisions Summary, of the Operating Budget Projections is included in this year’s document. Referring to that page, based on the assumptions used for the projected Year’s 2 thru 4, each of the future years reflects a potential budget deficit. Although 2018/19 is a manageable shortfall of $40,200, the shortfall is projected to increase to over $100,000 in each of the following two years, i.e. barring a significant change in spending levels or higher than average assessment growth, Council will continue to face decisions involving service level cuts or tax increase beyond CPI/COLA.
- This is the first year utilizing the multi-year budget projections, and no doubt they will be refined over time to include better estimates for future year priorities, however the assumptions utilized for this year’s version are reasonable and not over pessimistic/conservative. They include:
- Residential assessment growth using an assumed Provincial CAP of 2% each year, with new construction assessment increases of between $6.5 million to $8 million. Combined these two assumptions add $10.5 M to $12 M each year in assessments. That equates to tax revenue growth of $160,000 to $186,000 per year.
- Partner contributions for KTA and VWRM are projection to grow between 5% and 7% per year. This is reasonable; however, each organization has requested higher increase in several of the previous few years.
- Year 2 reflects a one -time increase in Council’s professional development dollars to allow all members of Council to attend FCM when it is in Halifax (2018/19).
- Anticipated savings for cell phones is built into year’s 2-4, assuming 30% reduction in cost.
- Assumed use of Operating Reserves to balance Operating Budget is limited to Mill & Pave Main Street Initiative ($60,000 annually) and Election ($31,000 in Year 4).
- Salary/wage increase use an assumption of 1.75%-2% COLA and slightly higher % for collective bargaining unit. New collective bargaining agreement won’t be finalized until later in 2017/18 after which this will become a known adjustment for 3 or 4 years.
- Assumption built in that loss of Sale of Service revenue is likely over the next four years.
March 7 Agenda Package
, March 7 Minutes*
*Minutes are approved at the next Committee of the Whole meeting