HomeMy WebLinkAbout2021-01-31 SpecialClar*wn
Special General Government Committee
Revised Agenda
Date: January 31, 2022
Time: 9:30 AM
Location: Council Members (in Chambers or MS Teams) I Members of the Public (MS
Teams)
Inquiries & Accommodations: For inquiries about this agenda, or to make arrangements for
accessibility accommodations for persons attending, please contact: Lindsey Patenaude,
Committee Coordinator, at 905-623-3379, ext. 2106 or by email at Iatenaude@clarington.net.
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public by on the Municipality's website, www.clarington.net/calendar
Noon Recess: Please be advised that, as per the Municipality of Clarington's Procedural By-law,
this meeting will recess at 12:00 noon, for a one hour lunch break, unless otherwise determined by
the Committee.
Cell Phones: Please ensure all cell phones, mobile and other electronic devices are turned off or
placed on non -audible mode during the meeting.
Copies of Reports are available at www.clarington.net/archive
*Late Item added or a change to an existing item after the Agenda was published.
Pages
1. Call to Order
2.
Land Acknowledgement Statement
3.
Declaration of Interest
4.
Delegations
5.
Presentations
6.
Staff Reports and Staff Memos
6.1. FSD-009-22 - Assessment Growth Paying for Growth
3
6.2. FSD-008-22 - 2022 Operating and Capital Budgets
10
Link to Municipality of Clarington Draft 2022 Budget
*6.3. Memo-002-22 CSD-001-22 — Updated Capital Costs for Recreation
23
Facility Expansion at the South Bowmanville Recreation Complex
*6.4. Memo-003-22 2022 Operating and Capital Budget Update Resolutions
25
*6.5. Memo-005-22 2022 Public Works Capital Budget Information by Ward
28
7. Adjournment
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Clarbgton
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 31, 2022 Report Number: FSD-009-22
Submitted By: Trevor Pinn, Director of Financial Services
Reviewed By: Andrew C. Allison, CAO By-law Number:
File Number: [If applicable, enter File Number] Resolution#:
Report Subject: Assessment Growth Paying for Growth
Recommendation:
1. That Report FSD-009-22 be received for information.
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Municipality of Clarington
Report FSD-009-22
Report Overview
Page 2
Council has requested a report from Staff regarding the impact of assessment growth on the
Municipal budget. This question is a complex question with many variables, the following
report attempts to provide information to Council for their consideration on this question.
1. Background
Does Growth Pay for Growth?
1.1 At the Joint Committee meeting of October 25, 2021, Members of Committee requested
that the Director of Financial Services/Treasurer report back on whether growth pays for
growth. This report was requested to coincide with the budget deliberations.
1.2 The question of whether growth pays for growth has been a hot topic item in municipal
finance for a number of years and must contemplate a variety of factors. This report will
attempt to provide answers to this question.
1.3 Throughout this report it is important to recognize that the current property tax regime in
Ontario treats all properties of a similar class equally. The Municipality does not
currently use area -ratings for property taxes. All funds required to be levied to the tax
base are proportionately levied based on the tax ratios set by the Region of Durham and
tax rates which are calculated based on the assessment prepared by the Municipal
Property Assessment Corporation (MPAC).
1.4 It is impossible to allocate a single amount from an individual taxpayer to any particular
asset or service provided by the Municipality. Any increase in the levy, net of
assessment growth, is proportionately paid for by the entire tax base.
Former Development Charges Act (Prior to 2020)
1.5 The Development Charges Act, 1997 provided a mechanism for municipalities to collect
funds for growth related capital infrastructure. The Act was seen by many in municipal
finance not to cover the full cost of growth for several reasons.
1.6 Under the former regime, development charges could be charged for growth related
infrastructure except for several identified exemptions. The fact that there were growth
related capital needs that could not be eligible for development charges meant that
growth did not pay for growth. For example, as a municipality grows and administrative
offices were required, these would be fully funded by the tax base or other grants, they
were not funded by development charges.
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Municipality of Clarington Page 3
Report FSD-009-22
1.7 The former regime also required in several classes of assets an automatic 10%
reduction in the total eligible costs. On top of this 10% reduction, any benefit to the
existing taxpayer was also factored. Due to the automatic 10% reduction, there was a
portion of all development (regardless of if there was a benefit to existing) that was
supported by the existing taxpayer.
2. Current Development Charges Legislation
Development Charges Only for Eligible Infrastructure
2.1 The Province changed the Development Charges Act, 1997 from a list of ineligible
services (you could charge for anything that wasn't explicitly prohibited) to legislation
where you could only charge development charges if the service was a prescribed
eligible service (you can only charge for items that are explicitly permitted).
2.2 The following services are prescribed eligible services for development charges
a. Water supply services, including distribution and treatment services;
b. Waste water services, including sewers and treatment services;
c. Storm water drainage and control services
d. Services related to a highway as defined in subsection 1 (1) of the Municipal Act,
2001 or subsection 3 (1) of the City of Toronto Act, 2006 as the case may be
e. Electrical power services
Toronto -York subway extension, as defined in subsection 5.1 (1)
g. Transit services other than the Toronto -York subway extension
h. Waste diversion services
Police services
Fire Protection services
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Report FSD-009-22
k. Ambulance services
Services provided by a board within the meaning of the Public Libraries Act.
m. Services related to long-term care
n. Parks and recreation services, but not the acquisition of land for parks
o. Services related to public health
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p. Child care and early years programs and services within the meaning of Part VI of
the Child Care and Early Years Act, 2014 and any related services
q. Housing services
Services related to proceedings under the Provincial Offences Act, including by-law
enforcement services and municipally administered court services.
s. Services related to emergency preparedness
Services related to airports, but only in the Regional Municipality of Waterloo
u. Additional services as prescribed
2.3 The above list of eligible services does not include cemeteries, administrative offices,
cultural centres (art centres or performing arts centres), parking facilities. The
construction of any of these facilities, which all have been contemplated by Council in
the past five years, would not be eligible for capital funding through development
charges. Funding these projects would likely come from the tax levy, therefore growth in
these areas would be funded by the whole tax base.
2.4 While the new Community Benefits Charges regime has been created, there are several
restrictions which minimize the impact of this charge. For example, the charge is limited
to a prescribed value of the land and may only be imposed on development which is at
least five stories and ten residential units, making it ineligible for most of the
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Municipality of Clarington Page 5
Report FSD-009-22
development in Clarington. It is not anticipated that the charges raised by this fee would
be sufficient to meet the capital needs of the ineligible services.
2.5 Also, as part of the recent modernization of the Development Charges Act, 1997, the
mandatory 10% deduction was removed. As a result of this change, all eligible costs
may now be fully recovered through development charges. There remains the
requirement for municipalities to deduct an amount equivalent to the benefit to existing
taxpayers so development cannot pay for more than the growth -related cost of a capital
investment.
2.6 Because there are services which are not eligible to be funded by development charges,
it could be argued that growth will not fully pay for growth; however, it is better than it
used to be because there is no longer a mandatory 10% deduction for eligible costs.
Operating Costs
2.7 Development charges only provide funding for eligible growth -related capital
expenditures. Once the building, road, park, or other infrastructure is built the operating,
repairs and maintenance costs of those items is funded by user -fees, tax levy or other
revenues.
2.8 While it is theoretically possible for some services to be funded entirely by user -fees,
such as water and wastewater services, which are funded by rates, it is not possible for
all costs to be recovered from users. For example, the winter maintenance cost of a new
road would be borne by taxpayers.
2.9 It should be noted that the Municipality receives certain infrastructure such as local
roads, local parks, sidewallks and storm sewer infrastructure that is built by developers
and assumed by the Municipality. These local services are not development charge
eligible because they are built by the developer; however, once they are assumed by
the Municipality they are serviced and maintained like similar assets.
2.10 Operating costs are variable; however true operating costs are not linear in practice. For
example, a snowplow operator may be able to plow 40 km in one day if you have 41 km
you need to hire a second operator. In this case, there is excess capacity that future
growth will pick up but at the initial requirement to get the second driver the existing
taxbase is required to fund most of this position. This could be an area where, in the
short-term, growth does not pay for growth however there is capacity that is covered by
future growth.
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Report FSD-009-22
Is Growth Bad?
Page 6
2.11 The fact that growth may not pay entirely for growth does not mean that growth should
not be encouraged. There are benefits to growth for new stakeholders and existing
stakeholders within the Municipality.
2.12 Growth provides employment which benefits stakeholders in the Municipality outside of
the property tax implications. For example, increased residential growth increases
demands for service and goods that are used within those properties; this creates
demand for commercial providers which increases employment demand.
2.13 Increased residential numbers, standard of living and a strong local economy are factors
in attracting businesses to Clarington. These new businesses, such as OPG, Toyota
and East Penn provide employment opportunities and opportunities for other
businesses to serve them; improving the local economy even more.
2.14 Based on the BMA Study, in 2011 the Municipality had an average household income of
$96,994 and in 2021 that average was $125,010. This represents a 28.9 per cent
increase over the period. For comparison, the average for participating GTA
municipalities over this time was 16.3 per cent and the Province -wide increase was 25.5
per cent. This is a benefit to the Municipality which does not directly impact the
Municipality's budget but is a positive impact of growth.
2.15 Growth also brings diversity, which improves the overall qualify of life for residents. New
types of services, goods and recreational activities develop from growth.
2.16 All of the above factors have nothing to do with the property tax calculations that the
Municipality is required to do but nonetheless improve the quality of life for those who
call the Municipality of Clarington home.
Is All Growth the Same?
2.17 A factor of the debate comes in the form of density of growth. Not all growth has the
same cost impact to the Municipality compared to the increase in revenue that it
generates.
2.18 For example, high-rise condo buildings could bring millions of dollars of new
assessment in a fraction of the land that single-family homes would need for the same
assessment increase. The higher population density would require less roads that would
require maintenance to service the same population.
2.19 Municipalities with higher density growth may see growth paying for growth in the short-
term because the cost of growing upwards is lower, and the assessment revenue
coming in could be similar.
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Municipality of Clarington Page 7
Report FSD-009-22
2.20 The Municipality of Clarington has an estimated population density of 168 persons per
square km; this is significantly lower than the Province -average of 539 and almost 10
per cent of the GTHA average of 1,078 persons per square kilometre. This may indicate
that the cost -structure that the Municipality has is significantly different than those of our
neighbours and comparators.
3. Other Resources
3.1 The Development Charges Act, 1997 is available online through the Province's website.
3.2 The Institute on Municipal Finance and Governance at the Munk School of Global
Affairs and Public Policy through the University of Toronto prepares many research
papers on municipal finance topics. Adam Found holds a PhD from the University of
Toronto, is a Professional Land Economist and specializes in public finance. A fellow at
the C.D Howe Institute and a part-time university professor. His paper Development
Charges in Ontario: Is Growth Paying for Growth? was written in 2019 prior to the recent
changes in the development charges regime.
3.3 There are several articles on "Growth paying for growth"; however, a review of the
articles indicates that many focus on the development charges aspect and housing
affordability. Staff did not find articles on the long-term operating impacts of growth.
4. Concurrence
Not Applicable.
5. Conclusion
It is respectfully recommended that this report be received for information.
Staff Contact: Trevor Pinn, CPA, CA, Director of Financial Services/Treasurer, 905-623-3379
ext.2602 or tpinn@clarington.net.
Attachments:
Not Applicable
Interested Parties:
There are no interested parties to be notified of Council's decision.
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Clarftwn
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: Joint Committees
Date of Meeting: January 31, 2022 Report Number: FSD-008-22
Submitted By: Trevor Pinn, Director of Financial Services/Treasurer
Reviewed By: Andrew C. Allison, CAO Resolution#:
File Number: [If applicable, enter File Number] By-law Number:
Report Subject: 2022 Operating and Capital Budgets
Recommendations:
1. That Report FSD-008-22 and any related communication items, be received;
2. That Council approves the 2022 Operating and Capital Budgets, including "external
agencies" as outlined in the 2022 Draft Budget Book, at an estimated tax levy impact
of 3.74 per cent, exclusive of tax policy impacts, as directed in FSD-008-22.
3. That the 2022 Draft Budget Book be amended to reflect the required tax levy request
from the Historic Downtown Bowmanville Business Improvement Area, and that
Council approves the 2022 Budget for the Bowmanville BIA outlined in Report FSD-
007-22;
4. That Staff request the 2022 budgets for the Orono BIA and the Newcastle BIA for
approval at a subsequent meeting prior to the striking of the tax rates;
5. That the reserve and reserve fund contributions and any new reserve/reserve funds
be approved as shown in the 2022 Draft Budget Book;
6. That the Draft Operating By-law be amended to increase Wages Temp FT ($25,000)
and Wages Temp PT ($50,000) in the Municipal Elections sub -department (100-19-
193) with a corresponding increase in the transfer from the Municipal Elections
Reserve;
7. That the financing of capital projects, as outlined in the 2022 Draft Budget Book, be
approved;
8. That $6,402,000 be added to the 2022 Capital Budget for Newcastle and Orono
arena improvements with funding from a proposed debenture, per Resolution #GG-
012-22
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Resort FSD-008-22
Page 2
9. That any cash flow shortfall in the Development Charges Reserve Funds be interim
financed by the Municipal Capital Works Reserve Fund and General Municipal
Reserve Fund, to be repaid with interest, as cash flow permits;
10.That subject to Council approval of the Newcastle and Orono arena improvements,
per GG#012-22, identified to be funded by debenture financing, that the Director of
Financial Services/Treasurer be authorized to make application to the Region of
Durham for the necessary debenture, such terms at the discretion of the Director of
Financial Services/Treasurer;
11. That Report FSD-008-22 be adopted by resolution in accordance with provisions of
Ontario Regulation 284/09 of the Municipal Act, 2001;
12.That the Director of Financial Services/Treasurer is authorized to fund projects which
have been previously approved in the 2018 to 2021 budgets and not completed with
funding to be from the appropriate reserve or reserve fund;
13.That the appropriate by-laws to levy the 2022 tax requirement for Municipal, Region
of Durham and Education purposes be forwarded to Council for approval, once final
tax policy information is available.; and
14. That all interested parties listed in Report FSD-008-22 and any delegations be
advised of Council's decision.
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Municipality of Clarington
Report FSD-008-22
Report Overview
Page 3
The purpose of this report is to provide necessary information to Council in order to approve
the 2022 Capital and Operating Budgets. The report includes several important components,
and the Budget Book provides specific details. There are significant capital considerations
for 2022 that further enhance the Municipality's capital infrastructure. The Budget is
continuing to carry out the principles and objectives of these important Council priorities.
1. Background
2022 Draft Budget and Levy Impact
1.1 This year's "Clarington Budget 2022: Vision for the Future" was released to Council on
January 18, 2022 and the Municipality's website the following week. This year's budget
book takes on the same format as the 2021 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 2022 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 2022 (similar to
2021), it is unclear when certain services will return to their pre -pandemic levels.
Community Services have assumed reduced revenue in the first six months of the year,
gradually increasing to regular levels by the end of 2022.
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
2022 general ledger areas. Historical accounting information has not been modified; this
is a presentational change only.
1.4 In September 2021, Council directed Staff to bring forth a budget for 2022 with a target
municipal levy increase of 3.95%. 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 3.74% municipal levy increase.
1.5 The average residential property assessment for 2022 is approximately $393,443 (2020
- $394,000). A 1.0% increase in the tax levy would be approximately $15.44 annually on
the property tax bill on the average assessment. As a result of the proposed budget the
average municipal increase is $57.75 per year. It should be noted that in 2022 there
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Report FSD-008-22
was no reassessment of properties, the increase in the average assessment would be
related to the value of new growth.
1.6 A 1 % increase in the levy translates into approximately $653,685 in additional revenue
to the Municipality.
1.7 The Region of Durham's Budget will be presented to Regional Council later 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.
1.8 To be consistent with the presentation of increase information, area treasurers agreed
to also provide the blended rate for taxes. The Municipal portion of 3.74% represents a
total increase of approximately 1.25%, there is 0% increase related to the education
portion of the taxes, and the Region is proposing an increase of 1.23% (a target of 2.5%
with an impact to 49.3% of the overall tax bill). Therefore, the blended increase is
approximately, subject to change, 2.48%.
1.9 The above -mentioned tax increase is below the current rate of inflation. For an
assessed home of $400,000, the total tax bill would go from approximately $4,620 to
$4,730, an increase of $110; this assumes that the Region of Durham portion remains
at 49.3% of the total tax bill.
Items for Council Consideration
1.10 For Council's consideration there are approximately six items that did not make the
budget due to the budgetary target. Staff believe that these items will further the
strategic plan priorities of the Municipality but where not included to ensure that the
budget remained below the Council guideline.
1.11 The Newcastle Community Hall requested $23,900 of funding above the 3.3% target;
however the request is below the 2021 request which included one-time COVID funding
support. If Council wishes to provide this additional funding, the Tax Rate Stabilization
Reserve Fund would be an appropriate source of funding as this is a one-time request
of support to offset the COVID-19 operating impacts that the Hall is facing.
1.12 In the fall, Staff reported on the Heritage Property Tax, at that time Council did not
consider an increase to the funding support for this program. The Planning and
Development Services Department continues to recommend that this funding be
increased to provide additional supports for heritage properties.
1.13 In 2021, Council approved an increase in the contribution to the Community Services
Building Refurbishment Reserve Fund for arenas of $315,000. There was a request that
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Report FSD-008-22
Page 5
this occur for three years, the funding would be above the target and therefore it is on
the Unbudgeted Needs List. It should be noted that during discussions in 2021, the
funding arose from a discussion on arenas, the motion was not specific to any particular
arena; Staff are seeking clarity as it has been mentioned that this would be used for
debenture payments on a new facility. It would be the recommendation of the Director of
Financial Services that if it is Council's intent to build into the levy funds sufficient to
fund the debt payment on a new facility, that the annual contributions until that time go
for the replacement of existing facilities.
1.14 There are three positions in Financial Services which are not included in the budget due
to budgetary constraints and the fact that these positions do not have grant funding or
direct cost savings attached.
a. The Municipality continues to grow and the cost of insurance is rising for
municipalities across Ontario. The addition of an Insurance and Risk Manager
would provide a dedicated resource to the corporation for risk management which is
currently shared by the DMIP. This position would work with departments to identify
areas of risk, establish policies and procedures to mitigate risk and work with the
insurance pool on claims management.
b. Over the past several years the use of technology within the Municipality has
increased. As a result of the COVID-19 Pandemic the Municipality is providing more
services online than in the past and remote working provides opportunities for Staff
to be more effective and efficient. The IT Division manages several corporate wide
programs and the addition of a Solutions Analyst would provide resources for
software specific training as well as process efficiencies with the goal of providing
higher service levels with existing resources.
c. The Purchasing Services Division supports centralized purchasing for all
departments of the Corporation. The addition of a Buyer is required to handle the
continuing high volume of bid calls. Staff currently average 43 bid calls per buyer
(based on 2019 and 2020 data) which is higher than the City of Oshawa (32),
Pickering (39) and Whitby (38). The addition of a Buyer would allow the Manager of
Purchasing and Assistant Purchasing Manager to implement additional policies and
procedures including e-procurement, green procurement, and analysis on contract
management.
2. Tax Rate Stabilization
2.1 In the past, Clarington withdrew funds from the Rate Stabilization Reserve Fund of
approximately $800,000 to balance the budget in general. In past three budgets we
have transitioned to using the funds for specific items which are non -recurring or one-
time expenses.
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2.2 In 2022, the Rate Stabilization Reserve Fund has been used to offset unusual, non-
recurring or one-time expenses in an effort to stabilize the tax levy requirements.
2.3 To ensure the levy came in below the Council approved target and recognizing that
several departments had pressures related to COVID-19 which could be decreased
revenues, increased cleaning costs or other expenses, a transfer of $150,000 for
general levy stabilization is proposed.
2.4 Effective January 1, 2022, new environmental regulations came into effect which
change the Municipality's ability to dispose of waste that is accumulated through the
street sweeping process. The Public Works Department estimates this cost to be
approximately $650,000; a transfer of $325,000 from the Tax Rate Stabilization Reserve
Fund is proposed to mitigate the impact of the regulation change over two years.
2.5 While Community Services has budgeted for a return to service, there continues to be
public health measures in place that will reduce capacity. This impact reduces the
revenue earned while the cost structure remains relatively similar. For example, where
in the past a swim class could have one instructor for a class of ten, there may now be
restrictions in class size to five; the revenue stream is half, however the expenses are
not. To mitigate this impact, a transfer of $1,250,000 is proposed to smooth the impact
of the return to operations. This is a reasonable approach since savings in 2020 and
2021 related to cost mitigation taken primarily in Community Services. It is hoped that in
2023 a return to a stable revenue level will occur.
2.6 A transfer of $100,000 from the fund is also proposed to offset the costs to dispose of
steel and cement at Depot 42. The rubble pile needs to be disposed of and this is a one-
time cost, therefore a reasonable approach is to use the rate stabilization fund to reduce
the impact.
2.7 While the use of the reserve fund is higher this year than in the past, it is reasonable to
smooth the impact and maintain a stable tax levy. Staff continue to advocate for specific
uses of the fund to smooth one-time or non -recurring costs rather than generalized use
to offset the budget.
3. Tax Policy Changes
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 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 In 2020, the Region's tax policy report included a recommendation not to implement a
reduced tax rate for the first $50,000 of assessment on small-scale value-added
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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 November 2020, the Province announced the ability to create an optional sub -class
for small businesses. In November 2021, the Region of Durham Finance Department
prepared report #2021-F-29 outlining the impact of this optional sub -class. The
recommendation was that the sub -class not be pursued at this time. Challenges with the
program design and definition of small business, administrative cost of the program
compared to the relatively small reduction in taxes for small businesses and the shift of
the tax burden to other property classes were identified as the key reasons not to
pursue this tax class at this time.
3.4 As part of the 2021, Fall Economic Statement, the Province of Ontario postponed the
property tax reassessment until at least 2024. Tax assessments for 2022 and 2023 will
remain the same as the 2020 taxation year. This means that the current value
assessment of property is based on the value of the property at January 1, 2016.
3.5 The impact of the reassessment cannot be determined at this time as there is no date
announced. It should be noted that an increase in market value does not necessarily
result in an increase in taxes; for example, if all property values increased equally the
tax burden would not change. However, as residential market values appear to be
increasing higher than commercial values there may be a shift in the tax burden from
commercial to residential; this would be minimal as the residential tax class already
accounts for approximately 90% of the weighted assessment in Clarington.
4. Staffing Requests
4.1 Included in the proposed budget are the following requests for new staff:
a. Upgrade the Customer Service Assistant Coordinator from part-time to full-time
in Community Services;
b. Promote four Firefighters Class 1 to the rank of Captain;
c. Hire four Firefighters Class 5 to allow the existing Platoon Chiefs to move off the
active apparatus;
d. Add a Training Officer is proposed to meet the existing training needs of
firefighters, improve efficiency and reduce overtime;
e. Convert a manager position in the IT Division of Financial Services to a Solutions
Analyst and a Support Technician to better reflect the IT needs of the
organization.
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Create a Financial Analyst position, funded by the OCIF grant, in Financial
Services for asset management planning and forecasting;
g. Create an HR Associate in Legislative Services to meet the ongoing and
anticipated demands of the Municipality;
h. Increase the compliment of Municipal Law Enforcement Officer I by two to
address ongoing operational needs, funded by parking revenues;
Temporary Clerk II to meet the anticipated needs of the 2022 Municipal Election.
In the draft binder temporary election staff were accidentally omitted, these funds
are routine during every election and funded by the Municipal Election Reserve;
Create a Utility Locates Technician to improve the ability to meet locate timelines,
this will be funded by decreasing the contracted services; and
k. Create a GIS and Asset Management Technologist to meet the ongoing needs
for asset management and mapping in the Public Works Department.
4.2 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 2022 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 2021. The book also is reflective
of the changes in accounts resulting from the corporate reorganization completed in
2020 (which impacts the presentation of the 2019 and 2020 actuals).
5.2 Significant changes to operating includes the impact on the Community Services
operations resulting from anticipated service restrictions from COVID-19. For the first
half of the year, it is anticipated that capacity/demand will be about 50% of normal levels
with an increase to normal demand by the end of 2022. It is hoped that many of the
service reductions will return to normal in 2023.
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 as a result of the approval of secondary plans and anticipated
housing growth in the community.
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Municipality of Clarington
Report FSD-008-22
Page 9
5.4 In 2022, changes to environmental regulations will require a change in the process to
dispose of the waste/fill from street sweeping operations. This material now needs to be
shipped and disposed of in a landfill which will increase costs by approximately
$650,000; a transfer from the Tax Rate Stabilization Reserve Fund is proposed to
spread the impact on the tax levy over two years.
5.5 The Draft Budget Book includes summary information on each department and the
variance from the 2021 to 2022 budget requests.
6. Capital Budget Commentary
6.1 The total capital budget investment of $23,538,900 utilizes approximately $3.4 million of
development charges, $11.5 million of reserve funds and $646,800 from reserves.
6.2 Tax levy support in 2022 to the capital budget is $8,003,900 which is slightly lower than
the 2021 tax levy support.
6.3 The capital budget recommendations are incorporated in the Draft Budget Book, under
the section "Capital Budget" starting on page 131. A description of the project is
included for each capital budget item.
7. Debt Status
7.1 Current projected annual debt repayment obligations for 2022 Budget purposes total
$1,987,009 (2021 - $2,139,350) predominantly funded from development charges.
Existing debentures include those issued for: Bowmanville Indoor Soccer, 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. General Government Committee received report CSD-001-22 regarding the
Future Indoor Recreation Facility at its meeting of January 10, 2022, GGC
recommended to Council referring the matter of $57.6 million for the South Bowmanville
location to the 2022 budget deliberations. As this matter is still before Council, the Draft
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Municipality of Clarington Page 10
Report FSD-008-22
2022 Budget did not include any capital or operating costs for this project; however, any
debt issuance would be in the fall of 2022 with the first repayment occurring in 2023.
8. Municipal Grant and Sponsorship Programs
8.1 The Municipal Grant Program and the Municipal Sponsorship Program underwent a
revision in 2021, as approved by Council in the fall of 2020. In 2022, the $35,000 which
was previously included as part of the sponsorship program has been combined with
the funding for the grant program. The total program is $99,000 in 2022, this includes
$69,500 unallocated and available for eligible community groups.
8.2 As hall boards and horticultural societies are ineligible for the new grant program,
funding for these boards has been separately budgeted and accounts for $29,500. Each
of the three horticultural societies has been budgeted $500 and the hall boards between
$3,000 and $5,000 each.
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.
9.2 For 2022, reserve funds that are not funded by revenues (parking and building
inspection) have no changes in the tax levy contribution.
10. External Agencies
10.1 The 2022 budget includes requests from external agencies, including the Clarington
Public Library Museums and Archives, Visual Arts Centre, Bowmanville Older Adults
Association, Community Care Durham, Newcastle Community Hall and Grandview
Children's Centre. These requests have been provided in Report #FSD-007-22 for the
Special General Government Committee meeting of January 28, 2022.
10.2 The 2022 budget guidelines adopted by Council provided for a 3.3 per cent increase
cap for external agencies to be included in the budget. Two organizations have
requested funding in excess of this guideline; however, one (John Howard Society) is
only showing above the guideline because Staff asked them to show the cost of
operations for 2022. The funds provided in 2022 will be below the guideline due to
unspent funds in 2021. If Council wishes to provide the additional funding to the
Newcastle Community Hall this request is included in the Unbudgeted Needs ("B list")
and may be separately moved.
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Municipality of Clarington
Report FSD-008-22
Page 11
10.3 The Newcastle Community Hall is asking for additional funds to offset impacts from the
COVID-19 pandemic; however, the impact is less than in 2021 when they requested an
additional $50,000.
11. 2022 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 2022 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 2022, but
there are longer term implications.
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Municipality of Clarington
Report FSD-008-22
Page 12
11.4 The estimated change to the accumulated surplus at the end of 2022 resulting from the
above items is as follows:
PSAB Additions to the 2022 Budget
Tangible capital asset amortization
Post -employment benefit estimate
Total PSAB Additions
PSAB Reductions to the 2021 Budget
Tangible capital asset acquisitions
Debt principal payments
Total PSAB Reductions
Total PSAB Impact
$21,943,590
1,043,000
$22,986,590
$(23,538,990)
(1,775,922)
$(25,314,822)
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Municipality of Clarington
Report FSD-008-22
12. Concurrence
Not Applicable.
13. Conclusion
It is respectfully recommended that the 2022 Operating and Capital Budgets be
approved by Council.
Page 13
Staff Contact: Trevor Pinn, CPA, CA, Director of Financial Service/Treasurer, 905-623-3379
ext.2602 or tpinn@clarington.net.
Attachments:
Not Applicable
Interested Parties:
The following interested parties will be notified of Council's decision:
• Community Care Durham
• The Clarington Public Library and Museums
• Bowmanville Older Adults Association
• John Howard Society of Durham
• Newcastle Community Hall
• Visual Arts Centre
• Grandview Children Centre
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■
Clarington
MEMO
If this information is required in an alternate format, please contact the
Accessibility Coordinator at 905-623-3379 ext. 2131.
Report To: General Government Committee
From: George Acorn, Director of Community Services
Date: January 31, 2022
Memo #: Memo-002-22
File No.:
Re: CSD-001-22 — Updated Capital Costs for Recreation Facility Expansion at
the South Bowmanville Recreation Complex
At the January 24, 2022 Council Meeting, Resolution # C-016-22 was approved, stating
"That Report CSD-001-22, regarding the Future Indoor Recreation Facility at the Garnet B.
Rickard Recreation Complex Site, be referred back to Staff to consider the cost of a twin
pad arena and a pool at the South Bowmanville site, to be considered as part of the 2022
Budget."
As requested, we reviewed the current costing information for the South Bowmanville
project, removing the branch library component and adding the aquatic facility. Without
specific direction on the remainder of the proposed Phase I components they have
remained in the budget. This includes the gymnasium and walking track: community and
program spaces: and Community Services administration office space.
The revised project budget is outlined below:
Revised Facility Plan — Project Costs
Construction
$57,603,800
Furniture, Fixtures and Equipment
1,700,000
Design/Engineering/Project Management
5,760,400
Total Project Cost
$65,064,200
To provide Council with more detailed information for your deliberation, we have further
outlined the square footage and construction costs for each of the proposed facility
components, as follows:
The Corporation of the Municipality of Clarington, 40 Temperance Street, Bowmanville, ON L1 C 3A6
1-800-563-1195 1 Local:905-623-3379 1 info@clarington.net I www.clarington.net
Page 23
(Insert Reference Number if applicable)
Page 2
Facility Component
Square Footage
Construction Cost
Twin Pad Arena
78,990
$24,195,600
Aquatic Centre
25,675
13,733,500
Gymnasium & Indoor Walking Track
18,375
6,178,900
Multi -Purpose Program & Community
Use Space
9,437
3,553,300
Entrances, Corridors & Public Spaces
13,720
4,851,500
Administrative & Staff Spaces
7,000
2,438,400
Building Services Areas
8,269
2,652,600
Totals
161,466
$57,603,800
As has been previously reported by the Director of Financial Services, we intend to utilize all
eligible development charges funding for this project. As such, with the approval of the
aquatic centre for South Bowmanville, the longer -term future of the Alan Strike Aquatic and
Squash Centre will need to be further considered.
I trust we have provided the necessary information for Council to consider this project in the
2022 capital budget.
George Acorn
Director
Community Services
The Corporation of the Municipality of Clarington, 40 Temperance Street, Bowmanville, ON L1 C 3A6
1-800-563-1195 1 Local:905-623-3379 1 info@clarington.net I www.clarington.net
Page 24
Clarbgton
MEMO
If this information is required in an alternate format, please contact the
Accessibility Coordinator at 905-623-3379 ext. 2131.
Report To: Joint Committees
From: Trevor Pinn, Director of Financial Services/Treasurer
Date: January 31, 2022
Memo #: Memo-003-22
File No.:
Re: 2022 Operating and Capital Budget Update Resolutions
The 2022 Draft Operating and Capital Budget was released on January 18, 2022 and since
its release Staff are aware of some minor changes which could occur which will reduce the
overall impact of the tax levy.
The budget process begins in the summer of the previous year and Financial Services tries
to cut off adjustments as late as possible to allow for as accurate information as possible.
The following changes are relatively minor, however, to ensure transparency, accountability
and accuracy of the budget they are being proposed below for Council's consideration
Revenues
It was identified during discussion with Councillors that the Supplemental Taxation was
omitted from the budget. Some municipalities do not budget for supplemental taxation
during the year, and this becomes "bonus" funds that go into reserves; the practice in
Clarington has been to budget for supplemental taxation.
It is recommended that the following resolution be passed
Resolution #1
That the 2022 Budget be amended to increase Supplemental Taxation to $1,000,000
The Corporation of the Municipality of Clarington, 40 Temperance Street, Bowmanville, ON L1 C 3A6
1-800-563-1195 1 Local:905-623-3379 1 info@clarington.net I www.clarington.net
Page 25
Page 2
Office of the CAO
Council passed resolution #C-409-21 that directed the recreation and leisure guide to no
longer be produced, necessary changes be made to the 2022 operating budget and that
Staff continue to develop targeted and sessionally updated Marketing Campaigns to
@ promote registration in municipal programs and activities. This was passed on December
13, 2021 after the department submissions would have occurred. Staff recommend the
following resolution:
Resolution #2
That the Communications Division budget of the Office of the CAO (sub -department
170) be adjusted to remove $15,000 in revenue and reduce postage expense by
$900.
Legislative Services
Staff are aware of a data entry error in a municipal election revenue account, the revenue
was entered as an expense. This results in a $8,000 reduction in the draw from the
Municipal Election Reserve, there is no tax levy impact.
Resolution #3
That the Municipal Election Revenue be adjusted from $4,000 to ($4,000), and the
corresponding adjustment of $8,000 be made in the transfer from the Municipal
Elections Reserve.
The proposed new staffing for Legislative Services indicates that the net levy impact is
@ $126,200; however $35,100 is funded by the Municipal Election Reserve. The budget
request is overstated by that amount as the transfer.
Resolution #4
That the proposed net staffing impact in Legislative Services be reduced by $35,100
and funded by the Municipal Election Reserve, the funding from the reserve to be
adjusted accordingly.
Community Services
- There is an error in the part time wage submission for Community Development in the 2022
budget. This wage should be reduced by $50,834, Staff recommend the following resolution
Resolution #5
That the Community Development (sub -department 427) Salaries, Wages and
Benefits be decreased by $50,834 to reflect a reduced need in Inclusion Services
part time wages.
The Corporation of the Municipality of Clarington, 40 Temperance Street, Bowmanville, ON L1 C 3A6
1-800-563-1195 1 Local:905-623-3379 1 info@clarington.net I www.clarington.net
Page 26
Page 3
The impact of the above is a reduction of the municipal levy of $871,834. This will reduce
the tax levy as proposed from 3.74% to 2.41 %.
If there are any questions regarding the above resolutions please let me know.
Thanks,
Trevor Pinn, CPA, CA:
Director of Financial Services/Treasurer
Financial Services Department
cc: Department Heads
The Corporation of the Municipality of Clarington, 40 Temperance Street, Bowmanville, ON L1 C 3A6
1-800-563-1195 1 Local:905-623-3379 1 info@clarington.net I www.clarington.net
Page 27
Clarington
MEMO
If this information is required in an alternate format, please contact the
Accessibility Coordinator at 905-623-3379 ext. 2131.
Report To: Joint Committees
From: Trevor Pinn, Director of Financial Services/Treasurer
Date: January 31, 2022
Memo #: Memo-005-22
File No.:
Re: 2022 Public Works Capital Budget Information by Ward
The purpose of this memo is to respond to a request for information from a Member of
Council regarding the Public Works Department's 2022 Capital Budget submission. As this
information may be pertinent to all Members of Council it is being provided as a memo.
As Staff we prioritize the replacement of capital assets for the whole Municipality based on
several factors including legislative requirements, current asset condition, risk of failure and
service disruption, consequence of failure and the impact of failure on service delivery,
coordination of investments with similar projects, growth demand and budgetary restraints.
Arbitrary political boundaries such as ward boundaries are not considered in Staff's
recommendation as all taxpayers in the Municipality fund investment and have access to all
services and assets. Prudent financial and asset management, in my professional opinion,
look at the Municipality as a whole and invest wisely to reduce future costs and service
disruptions.
I have reviewed the Public Works Capital Summary and attempted to allocate the capital
projects by ward. Please note that projects that are Clarington-wide (such as fleet) or are
pending spring review (such as road rehab, structure rehab and parks upgrades) have not
been allocated in this summary.
The Corporation of the Municipality of Clarington, 40 Temperance Street, Bowmanville, ON L1 C 3A6
1-800-563-1195 1 Local:905-623-3379 1 info@clarington.net I www.clarington.net
Page 28
Page 2
The allocation of projects by ward are as follows:
Corporate -wide, unspecified
or to be determined $ 11,891,500 $ 3,185,036
Ward 1 1 431,125 I 175,000
Ward 2 1 4,709,950 I 1,396,000
Ward 3 1 1,012,000 I 500,000
Ward 4 1 1,156,000 I 948,760
Total 1 $ 19,100,575 1 $ 6,204,796
Included in the unspecified or to be determined category are fleet, parking lot resurfacing,
Hampton Depot improvements, streetlights, various park upgrades, structures rehab
(bridges), pavement rehab, roadside protection, sidewalk replacement, retaining walls,
erosion works, rural road resurfacing.
If there are any additional questions, please let me know.
Trevor Pinn, CPA, CA
Director of Financial Services/Treasurer
Financial Services Department
The Corporation of the Municipality of Clarington, 40 Temperance Street, Bowmanville, ON L1 C 3A6
1-800-563-1195 1 Local:905-623-3379 1 info@clarington.net I www.clarington.net
Page 29