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HomeMy WebLinkAboutTR-77-88 TOWN OF NEWCASTLE REPORT File Res. #( ' t By-Law # MEETING: GENERAL PURPOSE & ADMINISTRATION MEETING DATE: October 3, 1988 REPORT #: TR-77-88 FILE #: SUBJECT: 1989 FIVE YEAR CAPITAL PROGRAM GUIDELINES RECOMMENDATIONS: It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1. That report TR-77-88 be received; and 2. That, the attached guidelines for preparation of the 1989 Five Year Capital Program be endorsed. BACKGROUND & COMMENTS: Staff have commenced preparation of the 1989 Five Year Capital Program. The attached guidelines will serve to establish consistent principles within which the estimates and various options can be evaluated by senior staff and presented to Committe for approval. These guidelines should be regarded as a framework within which the program material will be prepared. The Five Year Capital Program will be presented to Committee in December or early January for review and comment. Guidelines with respect to the 1989 Current Budget will be presented to committee for approval at a later date. Respectfully submitted, Recommended for presentation to the Committee f .R. Blanchard wrenc Kotseff Treasurer Chief A m nistrative Officer JRB/ges 1989 CAPITAL BUDGET 1 9 8 9 C A P I T A L P R O G R A M A N D F O R E C A S T T O 1 9 9 3 TOWN OF N&ICASTLE 1989 CAPITAL BUDGET POLICY GUIDELINES Guideline The following guideline for the 1989 Capital Budget and Forecast to 1993 should be adhered to. Program Guideline 1. That the Chief Administrative Officer and the Treasurer review with Departments and major Boards the current service standards for all programs and the size and status of prior year's program in order to evaluate not only the 1989 proposed level of service, but also the type of funding required for each program prior to Committee review. 2. That the 5 year capital program be prepared in accordance with service standards established for each program on the following basis: a) Provide supportive information relating to expenditures, standards and deficiencies, to indicate the need to maintain on-going programs at a level comparable to 1988. b) Provide supportive information, including existing standards and deficiencies, to justify the need for new capital projects. c) That all departments and major boards submit budgets for all on-going capital programs and planned capital projects. d) That all programs will be prepared on a priority basis. This will provide options to arrive at various levels of service and funding for each program to measure the impact on the residential and commercial/industrial mill rates. 3. In support of the long term financial planning objectives required for a modified "pay-as-you-go" program, the following information is to be prepared for all capital programs: a) That all departments and major boards prepare Capital Program Projections from 1990-1993, indicating the total projected program cost and all applicable financing based on 1988 financial Policy. b) That requests for 1989, and any shortfall in program estimates for 1990 to 1993, to be financed, be reviewed with the Chief Administrative Officer .and Treasurer prior to the presentation of the draft 1989 Capital Budget. TOWN OF N91CASTLE 1989• CAPITAL BUDGET Financial Guidelines 1. That the 1989 Capital Budget be prepared on the following basis: a) Capital programs be evaluated and maintained at an appropriate level that in conjunction with alternative financing, will not require tax supported debt from most 1989 capital budget programs. b) That lot levies available at December 31, 1988, be provided as contributions towards 1989 applicable growth related projects. . c) That where possible, the "pay-as-you-go" policy which has evolved over the years be continued and capital programs and related contributions be maintained in the 1989 Current Budget. 2. Five Year Capital Program Objective a) That the residential mill rate percentage for debt charges on Tax Supported debt continue to be controlled through adopting where possible the "pay-as-you-go" program. TOWN OF NEWCASTLE S 1989 CAPITAL BUDGET POLICY GUIDELINES The Town of Newcastle long term financial planning be based on "pay-as-you-go" financing where possible. The objectives of the program are: . 1. To provide projects when they are required, based on established standards or new studies. 2. To provide projects at a reasonable cost based on established standards. 3. To monitor and control existing and future tax supported debt. The major sources of financing for the Capital Budget are: 1. General Municipal Levy and Reserve Funds 2. Combinations of Subsidy, Tax Levy, Grants, Contributions From Others and Reserves. 3. Long term financing (i.e. debentures, loans) These funds can be used for growth related programs, reconstruction of Public Works infrastructure and major facility improvements. WCASTLE TOWN OF NE 1989. CAPITAL BUDGET The Building and Energy Conservation Improvements Reserve was established in 1986 to help finance reconstruction and building maintenance programs. The purpose of the Building and Energy Conservation Improvements Reserve is: 1. To provide financing for reconstruction of major facilities. 2. To provide contributions to cover the shortfall between the size of the approved program and the financing available from other sources. 3. To provide financing for major building maintenance programs. Contributions from the Building and Energy Conservation Improvements Reserve and the tax levy are necessary to finance projects that cannot be financed by the growth related Municipal Lot Levy from new development. As facilities age, it is essential that funds are available for reconstruction or improvements. Contributions from this reserve for reconstruction and major maintenance programs can be controlled and monitored by: 1. Reviewing the size of the program and the financing available and, if necessary, reducing the size of the program. 2. Gradually increasing the tax levy contributions and reducing the amount financed from the Building and Energy Conservation Improvement Reserve. 3. Establish financial policy to finance certain capital programs by means of specific financial packages. 4. Where necessary, debenture financing to spread the cost over the life of the project. 5. Establish a building profile for each facility. TOWN OF NEWCASTLE 1989 CAPITAL BUDGET GLOSSARY Capital expenditure is any significant expenditure incurred to acquire or improve land, buildings, engineering structures, machinery and equipment used in providing municipal services. This expenditure normally confers a benefit lasting beyond one year and results in acquisition of, or extends the life of a fixed asset. Capital budget is a plan for capital expenditures to be incurred during the budget year from funds subject to appropriation by the governing body of the concerned government for projects scheduled in the capital program for the first year thereof. Capital program is a plan for capital expenditures to be incurred each year over a fixed period of years to meet capital needs arising from the long term work program or otherwise. Thus, it sets forth each project or other contemplated expenditure in which the local government is to have a part and it specifies the full resources estimated to be available to finance the projected expenditures. i TOWN OF NEWCASTLE j1