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Historic Downtown Bowmanville Business Centre (BIA)
Board of Management Special Meeting Minutes
Friday January 22, 2021; 6:30pm
Virtual Meeting due to COVID-19 pandemic
Present: Edgar Lucas, Chair Absent: Justin Barry
Laura Holmes, Secretary Carrie Hooper
Gerri Lucas, Treasurer Erin Kemp
Cathy Holmes
Ron Hooper
Delegations Present: Trevor Pinn, Director of Finance - MOC
This special meeting was called to address the 2021 budget and corresponding levy request.
The meeting was called to order by the Chair.
Quorum confirmed.
Mr. Pinn shared with the Board of Management the definitions of the budget and the levy and explained
how they are distinct but related. He expressed his understanding of the Board
Historic Downtown Bowmanville Business Centre (BIA)
January 22, 2021
APPENDIX A
PROPOSED
2021
Administration
$78,200.00
Events
$70,000.00
Special Promotions
$2,951.00
Streetscape
$27,700.00
Capital Works
$20,300.00
Contingency Fund
$5,000.00
Website
$26,000.00
Office Expenses
$2,000.00
Total Budget $232,151.00
less surplus -$64,712.00
NET TOTAL = LEVY $167,439.00
Clarington
Staff Report
If this information is required in an alternate accessible format, please contact the Accessibility
Coordinator at 905-623-3379 ext. 2131.
Report To: General Government Committee
Date of Meeting: January 29, 2021 Report Number: FSD-006-21
Submitted By: Trevor Pinn, Director of Financial Services
Reviewed By: Andrew C. Allison, CAO By-law Number:
File Number: Resolution#:
Report Subject: South Bowmanville Recreation Centre Partnership Opportunity
Recommendations:
1. That Report FSD-006-21 be received;
2. A) That the South Bowmanville Recreation Centre be referred to the 2021 budget for
consideration of financing sources; OR
B) 7 DVE WI I EH�TG-IlV6UW -DIEP W+M R❑❑GL J E-ILHLFL H-tRWSUL p u b l i c
partnerships and report back to Council.
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Municipality of Clarington
Report FSD-006-21
Report Overview
Page 2
This report was prepared to provide Council background information on the feasibility of a
Public -Private Partnership (P3) arrangement for the development of the South Bowmanville
Recreation Centre, as they consider whether to move this project forward during the 2021
budget deliberations.
1. Background
1.1 , ❑FO a Gm[&R❑❑RDT16 WW LF13 (m❑1111❑❑❑m ❑❑❑❑TD:iMrJ RDOG—Develop the concept,
financing, project plan and potential construction schedule for the South Bowmanville
Recreation Centre for Council in 2019, for consideration in the 2020 budget, with a
design to follow T7RVADM-G V911LSLH_H \NG-5HSF4Y4_CSD-009-19 at the General
Government Meeting of October 15, 2019. The report identified a Phase 1 Facility
Program that would include a twin pad arena; indoor walking track; gymnasium; multi-
purpose community/program space; administrative office and tourism space; and a
branch library.
1.2 At the Joint Committee meeting of September 14, 2020 Report #FND-031-20 was
presented. This report was seeking approval to move forward on the design and
construction of the South Bowmanville Recreation Centre. Staff were recommending the
project be funded through the issuing of a debenture of $50,000,000 from Durham
Region. It is estimated that approximately 74% of the total project cost was eligible for
development charge funding, with the remainder to be funded by the tax levy.
1.3 Following discussion by Members of Committee, the report was referred to the 2021
budget. During these discussions, the matter of finding alternative project financing
options, such as a Public -Private Partnership (P3) was raised. Although specific
direction was not included in the approved resolution, staff subsequently undertook
researching the feasibility of utilizing the P3 model for this new community centre
project.
1.4 Staff arranged for a presentation from a firm, whose services include providing strategic
advisory services to clients to assess the viability of a P3 initiative for their potential
projects. This presentation was attended by members of the Senior Management Team,
Community Services staff as well as the local Ward 2 & 3 Councillors. The information
provided in the presentation and the questions and answers were very informative and
provided all in attendance a better understanding on how P3s work and how they could
be considered for this project.
1.5 Subsequently, the Director of Community Services met with the President and CEO of
The Canadian Council for Public -Private Partnerships. Provided with information on the
proposed facility amenities of this project, The President/CEO was able to expand on
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Municipality of Clarington Page 3
Report FSD-006-21
the principles of P3s for a lower tier municipality. It was also stated that based on the
scope and estimated cost of the project, there would be interest in the P3 market to
partner with the Municipality on this facility.
1.6 At the time of preparing this report, staff are arranging a meeting with representatives
from Infrastructure Ontario, who have extensive experience in managing numerous
infrastructure projects across Ontario at the provincial, regional and local levels.
2. Public ❑ Private Partnerships (P3s)
2.1 According to the Canadian Council for Public-3lIILDN 3 DLIM-LL_LSCuLPublic-Private
Partnerships, or P3s, are partnerships between governments and the private sector to
build public infrastructure like roads, hospitals or schools, or to deliver services. Unlike
traditional procurement, the public sector integrates all parts of a P3 project into one
contract. Depending on the preferred P3 model, this approach requires the architect, the
builder, the lender and the maintenance and/or operations provider to form a team D
2.2 The objective of a P3 for the public sector is to engage the private sector for their
expertise and/or capital to deliver your project. This model also effectively transfers a
significant amount of risk for cost and schedule overruns to the private sector team.
Through these partnerships, the public sector client executes a contract with a group of
private sector firms to provide services to deliver on the list of components that the client
has determined to be included in this partnership.
2.3 The 5 components of a P3 are Design, Build, Finance, Operate and Maintain. An
overview of each possible component of a P3 project include:
Design - as a member of the partnership team, the architectural firm is responsible for
the design of the project, in coordination with the constructor and other team members.
Through this integrated design approach, the risk for errors and omissions, which result
in scope changes, are minimized.
Build L as a member of the partnership team, the constructor (a requirement for all P3
projects) is responsible for the construction of the project and to maintain control of
quality, cost and schedule.
Finance L members of the partnership team are responsible to provide funding for all
projects cost, through the securing of debt or providing equity. The partnership team
finances all costs associated with the project throughout the duration and only upon
completion of the project, does the public sector pay for the asset.
Operate L as a member of the partnership, a private operator would be contracted to
operate the facility for a fixed period of time, generally in the 10 toto -20-year range.
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Municipality of Clarington Page 4
Report FSD-006-21
Despite the use of a private operator, the infrastructure remains the property of the
public sector client.
Maintain ❑ as a member of the partnership team, a private firm would be contracted to
DSP HMl ILH SR❑❑IEIMAdID❑G1 _NDEFWDRG1H1 1VV[P a n i-1 1VVI MIEN❑_D GP Rl OUL
components of the asset. This would include setting aside funds for long term
maintenance and life cycle replacements. Contract terms for this component range
between 20 and 30 years.
2.4 Public ❑ Private Partnerships are executed through a -long-term contract between the
public entity (Municipality) and the private sector firm (P3 partnership firm) for the
provision of services that could include the design, construction, financing, operating
and long term maintenance of the infrastructure asset. The terms of the contract focus
on the outputs and require the public entity to clearly articulate the objectives and
SHLURIP DEFHEAG MLGAVH❑mD VW-DF❑IH❑J- EWHEfl F-DVVVVLR❑J ❑VIC�MH❑
infrastructure project.
2.5 The first step to take to determine if the proposed project is suitable for a P3 is to
❑❑GU96 ,HID❑P DLN-INffR❑❑GL J ❑HERFL:HE7 ALALLDLIFSSRLTVELNVRIFE)FI]RAMRWdLI
marketplace to receive open, uncommitted feedback on the characteristics of the
proposed project and to assess the level of private sector interest. To gain useful
feedback, a market-JR❑❑Q❑J IGTEP H❑ V:ER-GJ LLH1D❑CRd-LJH❑ [RI XVHSU4VFNFFL1R111111
characteristics, schedule, and an indication of the risk/reward structure.
3. Analysis
3.1 In preparing this report, staff discovered numerous examples of P3 projects across
Ontario, with the majority being in the transportation, education and healthcare sectors.
Most of these projects would be categorized as large scale and complex with budgets in
the $100M and above range. A smaller number of projects were identified from lower
tier municipalities. Of those, two were large spectator arena venues (5,000 seats plus)
housing OHL and ECHL hockey clubs. Other examples included large multi -pad arena
complexes that are operated by private facility management firms (e.g. NuStadia and
Spectra). Another project in Orleans, Ontario was a performing arts centre that was
included in an overall project to provide low-income and seniors housing as well as
providing retail and commercial space opportunities.
3.2 Clarington has expertise in both maintaining and operating municipal buildings including
community centres, funding can be secured economically so design/build are the only
remaining components. Staff can better focus on a stringent methodology that achieves
some objects of P3 and manages risk, cost and schedule overruns more effectively than
the traditional method of design, bid, build
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Municipality of Clarington Page 5
Report FSD-006-21
3.3 Benefits of a P3 include allowing the public sector client to transfer risk associated with
any and all of the five components to the partnership that is shared with the private firms
in the partnership. For example, any project costs beyond those clearly outlined in the
contract are the responsibility of the partnership. Another benefit of this model is to bring
expertise s the opportunity to share the risks associated with the project across the
private sector members of the partnership.
4. Financial Considerations
4.1 The Municipality of Clarington, through the Region of Durham can obtain debt financing
at a significantly lower rate than most private -sector organizations. This would likely
result in a lease -to -own arrangement resulting in higher overall costs, as the private
sector partner would want to recover their cost of debt as well as a profit. Given the
legal requirement that long-term debt obtained by the Municipality must be through the
Region of Durham there is no ability to use the private sector solely as a debt financing
source. A purely design -build -lease P3 would likely not be any cheaper than if the
Municipality were to do it on our own.
4.2 If the facility were to differ from a typical recreation centre, for example it included a
performing arts centre, commercial activities (restaurants, retail) it would make sense to
look at outsourcing those specific functions to the private sector as it is likely to be more
efficient to leverage those resources.
4.3 The existing cost of debt makes it advantageous to lock in long term debt, if Council
decides that this is a project they wish to pursue; the cost of debt is most likely to
increase in the future rather than go lower.
4.4 Council could also consider the cost effectiveness of expanding on existing facilities
rather than building a new facility and associated operating costs that are required for a
standalone facility. The capital costs associated with expanding existing facilities to deal
with growth would be eligible for development charges, just like they would be if the
facility expansion was at a new location. By expanding at existing locations, the
Municipality could realize operating cost efficiencies through having less overhead,
staffing efficiencies (no need for minimum staff levels at a new location), and capital
costs could be lower to expand than to build from scratch.
5. Concurrence
This report has been reviewed by the Director of Community Services who concurs with
the recommendation.
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Municipality of Clarington
Report FSD-006-21
6. Conclusion
Page 6
6.1 It is respectfully recommended, that if approved to proceed, the South Bowmanville
Recreation Centre be financed by the Municipality, through the issuing of a debenture
with Durham Region with a principal and interest payment plan utilizing the maximum
eligible development charges with the remainder to be financed through the tax levy, as
recommended in report FND-031-20. Also, once constructed, the facility will be
effectively operated and maintained by Municipal staff.
6.2 Based on the information collected and the assessment of P3 models, staff are
confident the Municipality can effectively finance, operate and maintain the project over
the lifetime of the infrastructure asset. Also upon the approval of the project, staff will
move forward with a design and build methodology that will best manage errors and
omissions in the design and specifications phase of the project that will be most
effective in managing project costs during the construction phase. Through this
approach, staff are confident we can deliver a quality facility that will be of great benefit
to the residents of Clarington.
6.3 Alternatively, if Council wishes to consider alternatives to the South Bowmanville
Recreation Centre, direction can be given to seek interest from the private -sector for
potential partnerships VMl9U Cm1P DUN -K R❑❑ LJ 4 or to consider expansion
opportunities at the existing recreational facilities.
Staff Contact: Trevor Pinn, CPA, CA, Director of Financial Services/Treasurer, 905-623-3379
ext. 2602, tpinn@clarington.net
Attachments:
Not Applicable
Interested Parties:
There are no interested parties to be notified of Council's decision.
3 TF1
Clarington
Staff Report
If this information is required in an alternate accessible format, please contact the Accessibility
Coordinator at 905-623-3379 ext. 2131.
Report To: General Government Committee
Date of Meeting: February 1, 2021 Report Number: FSD-005-21
Submitted By: Trevor Pinn, Director of Financial Services
Reviewed By: Andrew C. Allison, CAO Resolution#:
File Number: By-law Number:
Report Subject: 2021 Operating and Capital Budgets
Recommendations:
1. That Report FSD-005-21 be received;
2. 7 _13W R❑EFlCDSSUR_H0i1JP❑❑11 SRBWJ DFG7 DSUXE❑GJ M O(Q❑J [
DJHF-F HCTLW1 IT❑❑❑ LDVV/o-U HffdTNTDM❑]+M& D\HG'D❑FI TLknpact
of 2.50 per cent, exclusive of tax policy impacts, as directed in FSD-005-21;
3. That Council approves the 2021 budgets for the Bowmanville BIA (Attachment #1),
Newcastle BIA (Attachment #2), and Orono District BIA (Attachment #3);
4. That the 2021 Draft Budget Book be amended to reflect the required tax levy request
from the three business improvement areas, and that the three budgets be
approved;
5. That the 2021 Draft Budget Book be amended to increase the Committee of
Adjustment salaries and benefits by $3,153.96 to reflect four persons on the
Committee rather than one;
6. That the 2021 Draft Budget Book be amended to add a grant in the amount of
$115,000 to Clarington Hospice, to be funded from the Tax Rate Stabilization
Reserve Fund, to offset the local portion of development charges;
7. That the 2021 Draft Budget Book be amended to remove $40,000 from the
0 ❑CLFLSDQ OFMoilE❑GJ MA_SHLJ60 1 MUFRP P H❑C3fiZF-iLLiC5 HSRLW -16 -006-21
($31,000 from postage, $5,000 from advertising expenses and $4,000 from printing);
8. That reserve and reserve fund contributions and new reserve/reserve funds be
approved as shown in the 2021 Draft Budget Book;
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Report FSD-005-21
9. That the financing of capital projects, as outlined in the 2021 Draft Budget Book, be
approved;
10. That any cash flow shortfall in the Development Charges Reserve Funds be interim
financed from the Municipal Capital Works Reserve Fund and General Municipal
Reserve Fund, to be repaid with interest, as cash flow permits;
11. That Report FSD-005-21 be adopted by resolution in accordance with provisions of
Ontario Regulation 284/09 of the Municipal Act, 2001;
12. That the appropriate by-laws to levy the 2021 tax requirement for Municipal,
Regional, and Education purposes be forwarded to Council for approval, once final
tax policy information is available; and
13. That all interested parties listed in Report FSD-005-21 and any delegations be
DGS RI IT R-I_FLCViG+MR IFi
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Municipality of Clarington
Report FSD-005-21
Report Overview
Page 3
The purpose of this report is to provide necessary information to Council in order to approve
the 2021 Capital and Operating Budgets. The report includes several important components
and the Budget Book provides specific details. There are significant capital considerations
for 2021 that further enhance the M LFLSDQW-FDSL)QLILD\A-PM.H117❑H1%o❑GJMme/_
continuing to carry out the principles and objectives of these important Council priorities.
1. Background
2021 Draft budget and levy impact
1.1 This yearVLILGULLI\ LIL!Yo❑GJH&T❑❑El$ 3DN) RI -DL F 11 R❑ERCR❑❑
- D❑ml=❑®❑❑❑DEGWH[0 ❑ARSDWV❑_I F EVWAAH RMD LJ EE HH\L7 AV UWEEGJ MB[
book takes on the same format as the 2020 budget, continuing our movement towards
creating a budget document that is easier to understand and clear for stakeholders.
1.2 The budget looks to prioritize services and resources, as well as continuing to invest in
our capital assets, as the Municipality moves forward in 2021 in the COVID-19
Pandemic. The budget assumes a reduction of service capacity and demand in certain
services, primarily Community Services, as a direct result of the public health
restrictions that are in place. While we are anticipating a recovery in 2021, it is unclear
when certain services will return to their pre -pandemic levels.
1.3 The budget has consolidated all the accounts to reflect the current organizational
structure of the Municipality following the approved corporate reorganization in 2020.
Historical actual and budget information in the budget book has been realigned to the
2021 general ledger areas. Historical accounting information has not been modified; this
is a presentational change only.
1.4 In September 2020, Council directed Staff to bring forth a budget for 2021 with a target
municipal levy increase of 3.55%. Staff worked diligently to meet that target. The draft
budget, including proposed new staffing, increased reserve fund transfers and
maintaining service levels was reached with a 2.50% municipal levy increase. This
represents approximately $39 to the average residential taxpayer.
1.5 The average residential property assessment for 2021 is approximately $394,000 (2020
- $390,700). A 1.0% increase in the tax levy would be approximately $15.17 annually on
the property tax bill on the average assessment. As a result of the proposed budget the
average municipal increase is $38.50 per year. It should be noted that in 2021 there
was no reassessment of properties, the increase in the average assessment would be
related to the value of new growth.
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Municipality of Clarington
Report FSD-005-21
Page 4
1.6 A 1 % increase in the levy translates into approximately $627,500 in additional revenue
to the Municipality.
1.7 711H15 HJLR]CRI 1 ESP VL9/cErJHMIL(OEHISULk iEVV HJPEiDCR]R❑EFLC'ater this winter.
It is anticipated that the impact to the Clarington taxpayer will be lower than the average
Durham resident as the assessment base in the other municipalities is higher than in
Clarington. It is anticipated that approximately 50% of the total property tax bill will still
be related to the Region of Durham; however, at this time it cannot be confirmed.
Items for Council Consideration
1.8 The budget book included a list of items for consideration on page 26. These items may
have been deferred by Staff in order to meet the 3.55% target or brought forth by
members of Council and the public for consideration.
1.9 Items for consideration include approximately $372,540 in operating costs and
$2,532,300 in capital costs. If all these items were to be included there could be an
additional 4.63% to the tax levy; however, this could be mitigated through use of
development charges (where allowed) or reserve and reserve funds (where feasible).
1.10 An item not included on this list or in the budget was a capital request from Emergency
DCII M[6 HU LFH\/_I7REH[DG3-GVRV/- _%t UNULD request for $35,000 for an Extractor
and Dryer for Station 3. These are included in other stations throughout the Municipality.
1.11 Included on this list is an item which has subsequently been approved; however, the
funding for those items has not been determined. This includes the provision of a grant
to Clarington Hospice to offset their local development charges (approximately
$115,000).
1.12 Council also provided pre -budget approval on January 18, 2021 to hire an outside
planning consultant for options regarding recreational vehicle storage in Clarington. This
item requires an increase to the Planning and Development Services consultant
expense account as it was not previously included in their 2021 submission. This item
was included in the determination of the levy and will be added to the appropriate
expense account upon ratification of the budget.
2. Tax Rate Stabilization
2.1 Historically, Clarington has drawn on our Rate Stabilization Reserve Fund
approximately $800,000 per year. In 2019 this was reduced by $200,000 with specific
draws being added for forestry. In 2020, $600,000 was drawn with additional draws for
capital projects.
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Municipality of Clarington
Report FSD-005-21
Page 5
2.2 During 2020, as a result of the COVID-19 pandemic, Council approved $1.0 million to
be used for a tax rebate program. This funding was not required and per Council
resolution is available for the COVID-19 Cl P.
2.3 The 2021 Draft Budget does not include any draw from our Rate Stabilization Reserve
Fund, this is in part a result of funding received from the Province of Ontario for use in
2021 to offset implications from COVID-19.
3. Tax Policy Changes
Current Policy Implications
3.1 A long-term strategic tax policy plan was initially approved in 2002 by the Region of
Durham (who has legislative authority over tax policy), that may have an impact on final
tax rates. The 2021 update is anticipated was presented to Regional Finance and
Administration Committee in February 2021. Any tax ratio changes impact upon the
relative share of the total taxes that each property class pays.
3.2 , T-]TFrWH-5 HJ LR�V%D-Tpolicy report included a recommendation not to implement a
reduced tax rate for the first $50,000 of assessment on small-scale value-added
commercial activities on farms that was announced by the Province of Ontario in 2018.
There is a limited impact to taxpayers (in 2020 only seven properties in all of Durham
Region would qualify) while the administrative costs would be significant.
3.3 In 2020, there was a request from the Town of Whitby to match support for a heritage
property tax rebate. The Region only is allowed to create a program in a municipality
that already has a program; therefore, this would only apply in Ajax (two properties),
Whitby (30 properties) and Oshawa (8 properties). It was recommended that no
program be established as it would go against WH15 HJ IR❑VCREMF\L[HR AUiN J 1\4P LOU-
properties in a similar manner throughout the whole region.
Potential Future Policy Implications
3.4 On November 5, 2020 the Province of Ontario released the Provincial Budget 2020 -
2 LUJP\ V-$ FJR__3 0- 131. UFWB upport, Recover. This budget included several
measures to respond to the COVID-19 pandemic including reductions to Business
Education Taxes (BET) paid by commercial and industrial taxpayers, the creation of an
optional property subclass for small business properties, new tools for redevelopment
and speculative sales, confirmation of the postponement of the 2021 property
reassessment and other initiatives
3.5 Clarington is affected by tax policy decisions made on the education side by the
Province of Ontario. This stems from municipalities retaining the education portion of
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Municipality of Clarington
Report FSD-005-21
Page 6
eligible payment in lieu (PIL) properties such as Ontario Power Generation. In the 2020
budget, the Province has reduced the Business Education Tax (BET) that is paid by
commercial and industrial taxpayers. This does not impact the Municipality for the
majority of taxpayers (as we collect the BET on behalf of the Province and remit to the
school boards); however, as there is a portion that we retain this could reduce our
payments -in -lieu -of -taxes (PILS) that we keep. The Province has indicated that for 2021
the BET rate will remain the same for PILS; however Federal properties typically pay
taxes based on the commercial rates. As Darlington is owned by OPG it is likely that
WHL_U LC@11FM:l MH13 a_I_FHVa h .AR_SDA WH_d 7 DVYMHJRLP HMM.
3.6 The Province has indicated that there will be the ability to create an optional sub -class
for small businesses. This may allow municipalities to target financial support and tax
policy specifically to small businesses. As at January 21, 2021, the Province has not
released any regulations or guidance on how this sub -class or potential financial support
will occur. It should be noted that property tax policy is the responsibility of the Region of
Durham. Staff are continuing to work with the Region to determine the implications of
this policy decision.
3.7 The Province has not released guidance on its tools for redevelopment and speculative
sales at the time of this writing.
3.8 The postponement of the 2021 property reassessment has resulted in no market growth
for properties in 2021. As the last assessment cycle was based on a valuation date of
January 1, 2016 all taxpayers are currently paying taxes based on the assessed value
of their homes five years ago. When the future reassessment occurs, there will likely be
shifts of the tax burden throughout the Municipality depending on the market values and
the phase-in regime applied. At this time, we do not know when the next assessment
date will be.
4. Staffing Requests
4.1 Included in the proposed budget are the following requests for new staff:
a. Convert contract Corporate Policy Analyst to full-time in the Office of the CAO;
b. Convert contract Climate Change Coordinator to a full-time Energy and Climate
Change Response Coordinator in Planning and Development Services;
c. Create a contract Project Manager position in the Community Planning Branch of
Planning and Development Services. This position is funded in part by contributions
from developers;
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Municipality of Clarington
Report FSD-005-21
Page 7
d. Add a full-time Principal Planner in the Development Review Branch of Planning
and Development Services;
e. Add a full-time Development Review Technician in the Infrastructure Division of
Public Works;
Create a full-time Operations Equipment Trainer position in the Operations Division
of Public Works; and
g. Create a full-time Network Security Analyst position in the Information Services (IT)
Division of Financial Services.
4.2 In the Draft Budget BORNV1H11+E UHALP P DU_ the conversion of the Corporate Policy
Analyst to full-time was inadvertently missed. The position and justification was included
in the section dedicated to the Office of the CAO and is included in the proposed
budget.
4.3 Legislative Services, Community Services, and Emergency and Fire Services are not
requesting additional permanent staffing in 2021.
4.4 The specific rationale provided by the departments in support of these requests are set
out in the Draft Budget Book.
5. Operating Budget Commentary
5.1 The 2021 Draft Budget Book provides summary information for all the changes in the
operating departments and sub -departments. This information was provided to ensure
that Council was aware of the projected change from 2020. The book also is reflective
of the changes in accounts resulting from the recent corporate reorganization.
5.2 Significant changes to operating includes the impact on the Community Services
operations resulting from anticipated service restrictions from COVID-19. It is hoped that
many of the service reductions will return to normal in 2022.
5.3 We have reviewed revenue accounts and adjusted to better reflect what the Municipality
estimates to be achievable. This includes an increase to investment income to better
reflect the interest earned on our investments, but also includes decreases in certain
programs or Planning and Development Services revenues which are anticipated to
result in more revenue.
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Municipality of Clarington Page 8
Report FSD-005-21
6. Capital Budget Commentary
6.1 The total capital budget investment of $23,887,348 utilizes approximately $4.6 million of
development charges, $9.9 million of reserve funds, $446,900 from reserves and
$697,000 from external financing sources (grants).
6.2 Tax levy support in 2021 to the capital budget is $8,289,461 which is $5,000 higher than
the 2020 tax levy support. This is an increase of 0.06 per cent in the tax levy support to
the capital budget; however, a $900,000 increase in contribution to the Operations
Equipment Reserve Fund is included which otherwise would have been a tax levy
capital item for replacement vehicles.
6.3 The capital budget recommendations are incorporated in the Draft Budget Book, under
AGI-IM+MF :IMDSLIW&IGJHA V1DWJREISD1H-L20. A description of the project is
included for each capital budget item.
7. Debt Status
7.1 Current projected annual debt repayment obligations for 2021 Budget purposes total
$2,139,350 (2020 - $2,688,395) predominantly funded from development charges.
Existing debentures include those issued for: Bowmanville Indoor Soccer, Garnet B.
Rickard Recreation Complex (final payment is in 2021), Community Care Durham
space, Green Road grade separation, Courtice branch library, the Diane Hamre
Recreation Complex, as well as retrofits for the Municipal Administration Centre and
Pad A of the Garnet B. Rickard Recreation Complex.
7.2 In 2018, two debenture projects were funded internally and will be repaid through
transfers between Reserve Funds. The Garnet B. Rickard Recreation Complex parking
lot refurbishment will be repaid through a portion of the annual contribution to the
Parking Lot Rehabilitation Reserve Fund. The LED light retrofit will be repaid through
savings in electricity and maintenance costs for streetlights.
7.3 In the 2020 Budget, Council approved $4.2 million in debentures related to the design
and construction of the South Bowmanville Recreation Centre. The project did not
receive funding in 2020, resulting in a delay in the project as staff review financing
options. Staff are currently exploring Private -Public -Partnerships (P3s) to determine
feasibility. There are no funds in the 2021 budget specific to the South Bowmanville
Recreation Centre.
8. Municipal Grant and Sponsorship Programs
8.1 The Municipal Grant Program and the Municipal Sponsorship Program have undergone
a revision in 2021, as approved by Council in the fall of 2020. The budget presented this
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Municipality of Clarington
Report FSD-005-21
Page 9
this report includes $60,000 for the grant program and $35,000 for the sponsorship
program.
8.2 As hall boards and horticultural societies are ineligible for the new grant program,
funding for these boards has been separately budgeted. There is $37,500 remaining for
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8.3 Each of the seven hall boards that was formerly eligible under the grant program has
been budgeted an allocation of $3,000. Each of the three horticultural societies has
been budgeted $500.
8.4 , ❑FO 3-GEMUW I118 EEEU HMG-I H-OV❑Q ML1 D-WT❑WfWRUD- III -D �❑❑[ul❑❑[L�I❑
funding for the grant program. This will move the program towards its goal of $1/resident
for community support. Given the financial pressures that many non-profit organizations
are facing due to COVID-19 this may be something that Council wishes to consider.
9. Reserve and Reserve Fund Contributions
9.1 Consistent with past practice, increases in reserve and reserve fund contributions are at
times deemed appropriate to bolster balances in depleting reserve funds or to begin to
put aside funds for an identified need. This is an important part of our asset
management strategies. For 2021, there are several increases to the contributions
which have been recommended in the Draft Budget Book including:
Future Staffing Reserve Fund (increase to bring to $50,000
Municipal Capital Works Reserve Fund
Fire Equipment Reserve Fund
3
22,775
15,000
100,000
Municipality of Clarington
Report FSD-005-21
Page 10
Operations Equipment Reserve Fund
Community Services Capital Reserve Fund
75,000
Community Services Building Refurbishment Reserve Fund 150,000
Roads Capital Reserve Fund 130,000
10. External Agencies
10.1 The 2021 budget includes requests from external agencies, including the Clarington
Public Library and Museums, Visual Arts Centre, Bowmanville Older Adults Association,
[IFP P ❑d T DL -WAP [Ld H❑ FDv1&T RP P TLWT D®❑GH UDDG7NT :M dOLHLIV❑
Centre.
10.2 The 2021 budget guidelines adopted by Council provided for a 1.8 per cent increase
cap for external agencies to be included in the budget. Two organizations have
requested funding in excess of this guideline. If Council wishes to provide the additional
funding to the Newcastle Community Hall and Community Care Durham these requests
DIIH1L-F01CSG LW -I[8 EE❑GJ HAIG 1 HGV ❑S1"V D G -P DQEHAA-ISDU31d P R[HG❑
10.3 Both the Newcastle Community Hall and Community Care Durham are asking for
additional funds to offset impacts from the COVID-19 pandemic. Newcastle Community
Hall is anticipating significant revenue pressures as a result of cancelled rentals and
capacity limitations. Community Care Durham has seen increased demand for service
and corresponding service delivery cost increases to adapt to the pandemic.
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11. 2021 Accrual Based Budget for PSAB per Ontario Regulation
284/09
11.1 Public Sector Accounting Board annual reporting requirements for municipal Budgets
require that certain accrual -based items be reported to Council in conjunction with the
Budget for 2011 onwards.
11.2 Accrual based expenses that are excluded from the 2021 tax -based budget include
post -employment benefits and amortization of capital assets. Other items to transfer to a
PSAB Budget include tangible capital asset acquisitions and accounting treatment of
debt principal payments.
11.3 There is no immediate financial impact of these PSAB additions or reductions since the
tax -based budget approves necessary funds to provide municipal services for 2019, but
there are longer term implications.
11.4 The estimated change to the accumulated surplus at the end of 2019 resulting from the
above items is as follows:
PSAB Additions to the 2021 Budget
Tangible capital asset amortization
Post -employment benefit estimate
Total PSAB Additions
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$20,677,662
0 . • • 1
$21,662,322
Municipality of Clarington
Report FSD-005-21
PSAB Reductions to the 2021 Budget
Tangible capital asset acquisitions
Debt principal payments
Total PSAB Reductions
Total PSAB Impact
Page 12
$(23,887,348)
(1,858,842)
$(25,746,190)
12. Concurrence
Not Applicable.
13. Conclusion
($4,083,868)
It is respectfully recommended that this report and the accompanying documents are
intended to provide Council with the information necessary to make strategic decisions
and ultimately adopt a budget for the 2021 fiscal year.
Staff Contact: Trevor Pinn, Director of Financial Services, 905-623-3379 ext. 2602,
tpinn@clarington.net
Attachments:
Attachment 1 -12021 Historic Downtown Bowmanville BIA Budget
Attachment 2 -12021 Newcastle BIA Budget
Attachment 3 1 2021 Orono District BIA Budget
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Municipality of Clarington
Report FSD-005-21
Interested Parties:
The following interested parties will be notified of Council's decision:
a. Community Care Durham
b. The Clarington Public Library and Museums
C. Bowmanville Older Adults Association
d. John Howard Society of Durham
e. Newcastle Community Hall
Visual Arts Centre
g. Grandview Children Centre
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Page 13
Attachment 1 to FSD-005-21
Historic Downtown Bowmanville Business Centre (BIA)
January 22, 2021
APPENDIX A
PROPOSED
2021
Administration
$78,200.00
Events
$70,000.00
Special Promotions
$2,951.00
Streetscape
$27,700.00
Capital Works
$20,300.00
Contingency Fund
$5,000.00
Website
$26,000.00
Office Expenses
$2,000.00
Total Budget $232,151.00
less surplus -$64,712.00
NET TOTAL = LEVY $167,439.00
3 �❑
Attachment 2 to FSD-005-21
The following budget was proposed for 2021 by the Newcastle
Downtown Business Improvement Association's Board of Directors
for approval by the Membership at the AGM January 26, 2021
Newcastle DBIA Proposed Budget for 2021
Downtown Safety & Decor
23,000
Events
5,000
Advertising
10,000
Admin/Contingency
2,000
FTotalExpenses
i 40,000
Orono DBIA Budget
2020 2021 Proposed
Income
Municipal Levy 6000.00 6000.00
Donations/Sponsorship Santa Claus Parade 0 7,000.00
Antique Festival