HomeMy WebLinkAboutTR-16-92 THE CORPORATION OF THE TOWN OF NEWCASTLE
REPORT
Meeting: SPECIAL GENERAL PURPOSE & ADMINISTRATION COMMITTAi@#
Date: February 21, 1992
Report#:__TR_-16-92 File#: By-Law#
Subject:
1992 CURRENT BUDGET & 1992 CAPITAL BUDGET
AND FOUR YEAR FORECAST
Recommendations:
It is respectfully recommended that the General Purpose and
Administration Committee recommend to Council the following:
1. THAT report TR-16-92 be received for information,
2 . THAT the 1992 Capital and Current Budget be approved, as
outlined in Report TR-16-92 and Schedule #1 and #2,
3. THAT the four year forecast outlined in Schedule #2
be approved in principle; and
4 . That the Executive Summary provided on Schedule #3 be
received for information.
Background & Comments:
1. Proposed Overall Increase:
1. 1
The proposed 1992 Current Budget and 1992 Capital Budget and four
year forecast are presented for Council 's consideration.
1.2
The 1992 mill rate for municipal purposes only, has been calculated
as follows: 2
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TR-16-92 Page 2
Municipal Mill Rate 1992 1991 %
Proposed Actual Increase
Residential 138. 096 136 . 89 1. 80%
Commercial 162 .466 161. 05 1 . 80%
These calculations are based on the attached capital and current
budgets . (Schedule #1 and Schedule #2 respectively)
1. 3
The following externally prepared budgets have been incorporated
in the mill rate calculation above and are identified here for
Council's consideration as these particular budgets are not subject
to review by the Newcastle Community Services Advisory Board or
Staff.
1992 1991 Tax Impact
Request Actual Increase
Library (Net of R.F. ) $972,650 $950,513 2 . 6 %
Museums - Clarke 76,407 54,586 40.0 %
- Bowmanville 63,049 54,428 16 . 0 %
Handi Transit 119,800 97,800 22 .5 %
If consideration is given to reduce the proposed budgets for the
Museums and Handi Transit to reflect a 5% increase over the 1991
approved budget the mill rate increase would be reduced to 1. 31%.
The 1992 Library proposed budget consists of an increase in
operations of approximately 21% combined with a decrease of 54% on
the tax impact related to capital projects .
1 .4
i
The proposed 1992 current budget, which also reflects the cost
associated with all of the capital projects, has been addressed at
the Staff level in such a manner as to provide an acceptable but
efficient level of service giving consideration to the more
difficult economic climate. Also the proposed budget has
. . . 3
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incorporated various increases beyond the control of the
municipality. Some of these increases relate to operations and
utilities matters . The proposed budget has also made an attempt
to provide a contribution ( $450,000) towards the Town's portion of
the capital works which are identified through the Development
Charges Report. In order to adequately provide for the capital
works to proceed within any reasonable time frame the transfer to
the Reserve Fund should be in the order of $1 million annually.
It is felt that the contribution to reserve fund as suggested in
the proposed budget, combined with a greater emphasis on
efficiencies in methods of operation should over time direct more
of the assessment dollars earned through growth to capital
projects .
2 . Tax Impact Comments
2 . 1
The impact of the proposed 1992 budget is considerably lower in
relation to the previous year's increase. The historical mill rate
increases (which reflect capital and current budget requirements) ,
and assessment growth values are as follows:
Mill Rate Increase (%) Assessment Growth ( %)
1992 1. 80 5 . 6
1991 4 .80 6 .5
1990 7 .87 12 .5
1989 9 .97 8 . 0
2 . 2
The current years 's reduction in impact is primarily due to the
assessment growth, of 5 . 6% and an overall reduction in capital and
current expenditures in every department. The prior year's surplus
of $700,000 which was carried over and identified in the year end
report TR-56-91 for application to the 1992 mill rate. This
surplus was created for the most part by interest earned on
investments which yielded a greater rate than has been anticipated
and a higher grant in lieu of taxes from Ontario Hydro. . . .4
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TR-16-92 Page 4
2 . 3
There have been adjustments to levels of services built into the
proposed 1992 Budget in order to provide the taxpayer with a
minimal increase while still accommodating the additional
services required to be provided to new developments and
maintaining the existing services at a reasonable standard. Some
of the service level adjustments include: number of grass cuttings
in parks and along roadsides, number of times surface treatment is
done on roads, and reduction in staff overtime throughout the
Corporation which may reduce the response times related to the
processing of documentation.
3 . Reserve and Reserve Funds:
Public Works, Community Services, Fire Department as well as the
Library have again proposed fairly significant draws on the lot
levy Reserve Funds to keep the capital impact on the tax levy at
a minimal level and at the same time continuing with the necessary
capital works . The proposed contributions and appropriations to
these funds are presented together with anticipated balances in the
executive summary which accompanies the Budget documents . It is
anticipated that there will be ample funding to provide for the
four year forecasted capital requirements and adjustments will be
reflected as necessary as the year becomes current.
4 . Capital Projects :
The 1992 capital budget proposes initiation of the design stages
of the new Base Line Fire Station and the Courtice Community Centre
as well as the continued road capital works . The capital budgets
for projects as they relate more specifically to Public Works and
I
Community Services are supported by the Development Charges Report
Documentation. The capital works projects are reflected in detail
in the proposed Capital Budget for 1992 .
. . .5 j
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5 . Operations Programs:
5 . 1:
The Clerk's Department has identified through the 1992 proposed
budget the completion of a municipal code manual, and computer
software, which co-ordinates all municipal by-laws and related
legislation. The project was introduced through the 1991 budget
and unexpended funds to complete the 1992 portion of this project
has been carried over to a reserve for use in 1992 in combination
with the proposed 1992 Budget value. In addition there will be a
continued streamlined effort exerted to market the excellent
community services programs available to the public. The continued
focus on aspects of economic development is also recognized in the
proposed 1992 budget.
5 .2 :
The proposed 1992 Budget does not suggest any increases to the
staff complement in any department but there are some minor
adjustments identified on the organization charts within the
current budget. These adjustments are due in part to the
legislated ongoing commitment to the pay equity process, and
represent minimal if any monetary impact.
5 . 3:
The Town is now into it's fourth full year of annual debenture
charges associated with the two major projects, the Arena and the
Administrative Centre. The total related debt charges approximate
$190,000 for principal and $560,000 for interest, to total
$750, 000 . These charges will be completed in the year 2003, and
are approximately the same total charge each year.
5 .4•
Negotiations with the Fire Fighter's Association for the 1991/1992
contract year are proceeding to arbitration during 1992 . The
contingency account 7007-x-298 under unclassified administration
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has provided funding to accommodate adjustments to wages and
benefits in this regard. The contingency account also provides
for Council to make funding decisions on issues that cannot be
anticipated and which may occur throughout the 1992 budget year.
5.5•
The budget process takes place prior to the year end financial
statements and Audit and it is therefore premature to estimate
surplus/deficit position for the 1991 year end. It is recommended
that any surplus or deficit be transferred into or funded from the
Working Funds Reserve. It is appropriate under the Municipal Act
to transfer funds from this reserve as required to meet operating
costs once the year end requirements have been met and it would
ensure the projected surplus value included in the budget is not
interrupted. Council will be notified of any surplus or deficit
position in a subsequent report which deals with year end transfers
to Reserves and Reserve Funds .
6 . Garbage Charges:
6 . 1
The garbage will continue to be collected on a contracted basis
which will be accommodated as a "flat rate" charge through the tax
bill as in the prior two years . The calculated value for the 1992
garbage collection fee is $145 . 00. This value represents a 3%
decrease from the prior year which has been accomplished by the
application of the prior year's regional rebate in the amount of
$ 1.6 million (approx. ) to the disposal and recycling portion of
the budgeted contract value.
I
6 .2
The flat rate garbage charge includes collection, which is a j
Municipal charge, as well as recycling and disposal tipping fees
which are Regional charges . The proposed budget assumes no rebate
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for the current year from the tipping fees as there is no certainty
of the receipt or the amount until well into the year.
6 . 3
The Town maintains a Reserve for garbage related issues . The
Reserve is comprised of municipal Fund Contributions from past
budgets and does not relate to Region rebates . The balance in this
reserve at December 31, 1991 was approximately $715,000 . There is
a proposed transfer of $600,000 (collected from the flat rate
garbage charge) into the Garbage Reserve to maintain the 1992 flat
rate charge for garbage services at a rate similar to the 1991
rate. These funds are recommended for transfer to offset the
Regional Rebate which has been applied to the 1992 flat rate
charge. If this transfer is not made the garbage rate would be
$108.00. This transfer has not been reflected in the budget draft.
This process is consistent with the prior year's practice.
6 .4
The remaining balance in the Garbage Reserve is for future drawdown
against the municipal portion of the garbage contract as directed
by Council through the budget process. The balance in the Garbage
Reserve after the proposed transfer would be approximately $1 . 3
million. In the absence of the Regional rebate, the Reserve
balance would help to stabilize the flat rate charge at a
reasonable rate for approximately two years .
7 . Referrals to Budget:
There were a number of items that were referred to the 1992 budget
for consideration. These items and estimated cost are identified
as follows :
• Snow clearing - senior citizen's property $32,000
• Tyrone Spring 2,500
These items if added to the 1992 budget would increase the impact
by approximately . 05% on an annual basis.
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B. Conclusion:
8 . 1
In conclusion, the intent of the 1992 budget presentation has been
to provide a comprehensive package that focuses on resource sharing
and the provision of an efficient level of service through an
approach that continues to be cost effective. It should be noted
that there may be minor adjustments reflected in the final budget
which were too late for printing in the draft document. Any
changes will not adjust the mill rate impact as they have been
built into the overall calculations for this report.
8 .2
It is respectively recommended that the proposed 1992 Capital and
Current budgets be approved and that the four year forecast be
endorsed in principle.
i
Respectfully submitted, Recommended for presentation
to the Committee,
Mare A. Marano, H.BSc . , Lawrence otseff,
Treasurer. Chief Admi strative Officer.
MAM/pp
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