HomeMy WebLinkAboutADMIN-35-95 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
REPORT
Meeting: f hila#
SPECIAL COUNCIL MEETING C
Date: Res.
December 7, 1995 By-Law#
Report#: File#:
Subject: ADMIN-35-95
PROVINCIAL TRANSFER PAYMENT REDUCTIONS
Recommendations:
It is respectfully recommended to Council the following:
1. That Report Admin-35-95 be received,
2. That direction is requested from Council regarding the Courtice Community
Complex from among the following options:
A) Stop the construction of the facility indefinitely, to allow the Municipality
time to adjust to the cuts and determine whether more cuts are to come in
the 1996 and 1997 Provincial budgets. This will involve some costs to pay for
the excavation work done to date and potentially some penalties or legal
challenges from the contractor. Architectural fees will also have to be
addressed.
B) Proceed with the completion of the foundation and cover it over until the
Municipality can afford to proceed with completion of construction and
operation.
C) Proceed with the construction for a scaled down version of the Complex in
order to operate only one component, either the Library or the Core. This
too could entail additional costs or penalties regarding the excavation work
in that a different type of foundation may be needed. A new set of
architectural drawings would also be needed.
D) Proceed with the construction of the Complex at its original size, and close
the building until the Municipality can accommodate the operational cost of
one or both of the components,
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PAP LEO PAPIER
PAPECYE.
TH IS19PA1t 4EEGYGEEDPAPER 1
ADMIN-35-95 Pa e 2
3. That the Clarington Older Adults Committee be requested to submit a normal
annual operating budget to Staff for consideration in a report back to Council in
January 1996 which will address the option of proceeding with an Older Adults
Centre, and
4. That the following be notified of Council's decision: Don Welsh for the Clarington
Older Adults, Ian Smith, the Chairperson for the Courtice Fundraising Committee,
Craig Brown, Chairperson for the Clarington Library Board.
Background:
1.0 History
1.1 The Municipality of Clarington has over the past several years, acted responsibly in
accommodating the economic climate and have approved zero percent tax mill rates
as follows:
1995 Budget 0.10%
1994 Budget 0.02%
1993 Budget -0.05%
2.0 Provincial Cuts
2.1 Contrary to the Municipal actions, the Province has continued to operate without
fiscal restraint. As a result the Municipality was notified following the Provincial
Economic Statement unofficially that the Province will cut funding to the
Municipality by approximately 23% in 1996, representing approximately $631,000,
and a further additional cut in 1997 of 20%, representing $550,000. The value of
these cuts on the Municipal tax base is approximately 6% in 1996 and an additional
5% in 1997 if no offsetting revenue is found, expenses are not cut, or assessment
growth is not absorbed by normal inflationary increases.
2.2 Notification of the exact impact on the Municipality of Clarington is expected from
the Province in December 1995. The Municipality has not been notified of the
Provincial method of applying the 23% and 20% reduction, and in fact it could be
somewhat more or less depending on the rationale used to apply the grant reduction
to roads and to the unconditional grants.
3.0 Municipal Budget Adjustments
3.1 Staff have identified on Attachment #1, some of the known factors which will add
to the Provincial impact on the 1996 budget. The negotiated wage settlement of 1%
and the ten year phase in of the primary fire response are two of the significant
known costs. In addition, the loss of revenue from the reduction in building permit
ADMIN-35-95 Pae 3
fees on the 1995 budget will erode the accumulated surplus by $200,000 (1995
Budget Building Permit Fees $650,000/Actual 1995 projected to be only$450,000).
The final impact of the uncontrollable and known expenses will not be definite until
the 1996 budget is compiled and the assessment figures are confirmed.
3.2 It is important to note that the 1996 preliminary budget figures anticipate the
assessment contribution from some significant commercial developments. If these
development proposals do not proceed in 1996, the projected numbers will be worse
by at least $200,000. This has not been built into the scenario on the attached
document.
3.3 It was anticipated that the 1996 budget year would have included some adjustments
to levels of service purely to be able to handle the known and uncontrollable costs,
and in order to accommodate some phasing in element of the Courtice Community
Complex. However because the Provincial cuts are greater than anticipated, the
1996 budget can only be accommodated with significant projected budget
adjustments. These are identified on the attachment, and they include not filling
vacancies such as the Economic Development Officer Position, reducing some levels
of service which are not considered to pose any public safety risks, and reducing
transfers to the Public Works Reserves that are no longer subsidized by the Province.
3.4 Service levels proposed to be affected by the cuts include, reducing the gravel
applied to rural roads, reducing the amount of flower planting,reducing the number
of grass cuttings in a season from 18 to 15 times, clearing the Business Improvement
Areas' snow during business hours in order to avoid extra or overtime shifts, and
deleting the sweeping of the downtown areas by Municipal forces.
3.5 The proposed delay in the capital project in Public Works, Station Street and some
Street Lighting, translates to an overall reduction in the capital draw on the tax levy
by $250,000. This effectively means that all future Public Works capital programs
will be operating with at least$250,000 less funding unless the tax rates are increased
or alternate revenue sources are found.
3.6 Proposed increases in user fees will contribute significant funds to the overall
equation, however they will mean that the general public will be paying higher fees
for many recreation and other user fees, permits, and services. Staff anticipate
bringing a report to Council in January 1996 which will identify recommended
increases and/or service level adjustments for immediate implementation in order to
accumulate sufficient revenue or cost savings to accommodate the 1996 budget
projections and Provincial cuts. j
3.7 The Municipal budget adjustments reflect a cut to the Community organizations
grants in an amount equal to the Provincial cuts to the Municipality. This may be
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ADMIN-35-95 Pae 4
detrimental to the continuation of some of these groups and Council may wish to
more closely examine the specific level of these cuts during the 1996 budget process.
4.0 1997 Municipal Budget Adjustments
4.1 It is clear from the attachment that the 1997 year will be much more difficult to
accommodate as it will require new sources of revenue or additional cuts to expenses
on top of those made in 1996. It is anticipated, that unless there are significant
contributions from assessment or other unknown revenue sources, there will be
severe service level reductions, staffing considerations and fee increases required in
order to meet the targets identifiable at this point. One significant impact is the
dwindling surplus,which has been carried forward from the"boom"years and applied
in a reasonable manner to accommodate the general growth expenses rates and
ensure zero percent increases for Municipal taxes. This is anticipated to be used up
by 1997, unless the economy improves significantly in 1996. It has been identified
on Attachment#1 in the worst case scenario in the event that improvements are not
forthcoming.
4.2 At this point, addressing the 1997 budget is premature as there are many unknowns.
It is a concern of staff however, that adding any more to the tax base will cause the
situation to be that much worse. Every $100,000 of cost added to the budget will
potentially add 1% to the tax base.
5_0 Capital Projects
5.1 The question of the impact on the tax base relating to the Courtice Community j
Complex and the Older Adults Centre operating costs, was presented to Council for
reconsideration in light of the Provincial cuts.
5.2 Courtice Community Complex'core facility and library costs, have been reviewed by
the Director of Community Services and the Director of Library Services for
potential adjustments and are included as a net total on the attachment. The 1996
costs for both components of the Complex are essentially staff training and start up j
costs and do not reflect the normal operating costs.
5.3 Courtice Community Complex - Core Facility:
The Director has estimated the core facility costs, which include the leisure pool and
community hall, at $183,000 for 1997. This estimation does not include the cost of
a Facility Manager for the Complex, both the Director and the Chief Administrator
agree that operating a facility of this magnitude without a Manager would not be
prudent. This position would add approximately $50,000 to the projected costs.
However, options including transfer of an existing Staff member for some part of
1997 could be explored further. Although, as a result of the recent reorganization
of the department, remaining staff already are dealing with a heavy workload. The j
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ADMIN-35-95 Pae 5
figures presented also assume an increase in user fees representing$40,000. If user
fees are not increased and if the cost of the manager is added, the projected cost for
the core facility is amended to $271,000 annually,thus making the tax impact in 1997
2.7% for the core alone. The Director has stated that he is comfortable with the net
operating costs and is prepared to outline them to Council. For comparison
purposes, the net cost to operate the Bowmanville Fitness Centre for 1994 was
approximately $250,000. Although the facilities are not identical, and Courtice will
have more to offer thus making it a less costly operation, they are somewhat
comparable. In any case the numbers indicate that the Courtice Complex will be a
subsidized facility.
The capital cost of equipment for the core part of the facility, estimated at $75,000,
is not included in the scenario as they are proposed to be funded from the Lot Levy
Reserve Fund as a one time expenditure. This, as with the capital costs to construct
the facility, is not considered to be of major financial concern as it will not affect the
tax levy.
Staff were asked to review the potential for privatization of the operating functions
of the core facility. Discussions with a firm out of Nepean have revealed that an
operating agreement which would provide a guaranteed revenue stream to the
operators is possible. This has a potential cost to the Municipality to ensure the
revenue is realized however the Town of Ingersoll's Clerk Administrator advises that
they are satisfied with the level of service provided by this firm. User fees under this
scenario would remain Council's decision.
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5.4 Courtice Community Complex - Library:
The Director of Library services has reviewed the original projections to scale down
any operating costs to operate the facility on a five day per week operation. The
Director is also prepared to review these costs with Council. It should be noted that
the Library funding from the Province, which was built into the original financing
scenario may affect the bottom line if the funding is not available for the new library
facility. Refer to Attachment #3 for a detailed breakdown of the cost included in
the potential revised scenario. The Director advises that the revised cost estimate
is subject to Library Board approval.
5.5 Older Adult's Centre:
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Staff have met with representatives of the Clarington Older Adults and have
suggested that they investigate operating costs by consulting with Community Care
and present to Staff a realistic operating budget as soon as possible. This will then
be presented to Council with options regarding the Clarington Older Adults Centre
in January 1996.
6.0 The reality of the impact relating to the Provincial cuts has required that Staff
resent alternatives to Council with re
P spect to the completion of the Courtice
ADMIN-35-95 Pae 6
Complex. In light of the potential for more cuts to be forthcoming in the spring
Provincial budget, Staff are concerned about adding any further operating costs to
future years.
6.1 Direction is requested from Council from among the following options:
A) Stop the construction of the facility indefinitely, to allow the municipality
time to adjust to the cuts and determine whether more cuts are to come
in the 1996 and 1997 Provincial budgets. This will involve some costs to pay
for the excavation work done to date and potentially some penalties or legal
challenges from the contractor. Architectural fees will also need to be
addressed.
B) Proceed with the completion of the foundation and cover it over until the
Municipality can afford to proceed with completion of construction and
operation.
C) Proceed with the construction for a scaled down version of the Complex in
order to operate only one component, either the Library or the Core. This
too could entail additional costs or penalties regarding the excavation work
in that a different type of foundation may be needed. A new set of
architectural drawings would also be needed.
D) Proceed with the construction of the Complex at its original size, and close
the building until the Municipality can accommodate the operational cost of
one or both of the components.
7.0 Conclusion
7.1 It is the opinion of Staff, that had the Provincial cuts not been imposed, and if there
was not the very real possibility of more cuts to come in 1996 and perhaps 1997, the
construction and operation of the Courtice Community Complex would have been
a reasonable and justifiable expense. Adding to the tax base in light of the above
will not be easily accomplished, and will result in service level cuts among other cost
cutting measures. It is for this reason that Staff have requested that Council
reconsider the timing of adding the Courtice Complex to the Municipal operations.
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RespeGtflly submitted, Reviewed by,
----------- J& i
Marie A. Marano, H.BSc., A.M.C.T. W.H. Stockwell,
Treasurer Chief Administrative Officer
MAM/WHS/Pp
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PROVINCIAL IMPACT ANALYSIS Attachment#1
To Report Admin 35-95
1,996 1997,:;
REDU.GTION REDUCTION:
PROVINCIAL IMPACT AMQUNT REQURIRb. (631 000) (550,00
ADD UNCONTROLLABLE EXPENSES:
Fire Primary Response (1,30,000)
Negotiated Union Settlement 1% (11 ;o6q). (115 400)
Social Contract Impact(mileage,uniforms,overtime) (80,000) Q:
Insurance/Benefit Premiums 15% (25;060) (25 OOOj
... :..
Building Permit Projected Revenue Loss (5.0;000) 6:
Other Inflation Costs-utilities etc
Surplus no longer available (200;000). (600 90.,0)
Net Assessment Revenue Contribution 1A.6000: 215 000::
TOTAL AMOUNT REQUIRED TO MAINTAIN 0% (1 135;,000) (t2050.0.t1)
PROPOSED BUDGET ADJUSTMENTS:
General: 1995 Actual
Vacancies Not Filled: *E.D.O. 55,000 55,000
*P.W.Clerk 1 25,000 25,000
*P.W.Labourers repl.w/temps 125,000 60,000
*Plans Examiner 35,000 35,000
*C/S Bldg,Maintenance Vacancy 28,000 28,000
Sub.-Taal 203,000
Consulting 203,000 25,000
Legal 231,000 25,000
Grants:
Reduction to Community Grants 100,000 25,000 20,000
Public Works:
Reduce Transfer to Reserve Equip. 550,000 100,000 100,000
Delay Capital:Station Street 960,000 200,000 0
St.Lights 50,000 0
Service Levels Reduced:
*Rural Rds.gravel reduced 50,000 0
*Pavement Markings reduced 8,000 0
*Tree Planting reduced 5,000 0
*Unopend Rd.allow not maintained 12,000 0
*Mad Vac sidewalk cleaning BIA deleted 14,000 0 i
*BIA Snow Clearing in regular hours 15,000 0
*Parks-reduced planting/#grass cuttings 20,000 0
*Senior's Snow Clearing 30,000 0 30,000
Dufferin Aggregates-gravel value 140,000 0
REVENUES INCREASED:
Increased User Fees 75,000 150,000
New/Increased Service Fees 15,000 15,000
Reserve Transfer-Pits&Quarries 0 140,000
2,342,000
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TOTAL REDUCTIONS IN MUNICIPAL BUDGET 1,135,000 505,000
NET FUNDING EARNED/(STILL REQUIRED) 0 (700,000)
ADp COUtfICE COMMUIJI7'Y COAiIpL�X.
PROJECTED OPERATING COSTS CORE (40;000) (181,000)11,10[61-Costs.$27I,Mj.......cl
116RARY (40 000) (250 OOQ) No?Iset Fee InoreaSes
ARD OLDER ADULTS CENTRE OPERATING 0 Nbtez OperatittgCoststobetderrUledtn
report tt Cdutacll M Tat ualy 1996
TOTAL UNFUNDED OPERATING TO REMAIN AT 096 (80,000) (1 131,000).
nowg OLD TAIE;17riPACi' (;:;
Munlaipal Qperattoris Alone 4 p % :7:0
Inehidin ::Courtice:Com iex 0.8 % 11:3 :%
Dumber 7/95
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ATTACHMENT NO. 2 TO
REPORT NO. ADMIN-35-95
COURTICE COMMUNITY COMPLEX
ESTIMATED OPERATING BUDGET (CORE FACILITY)
CCCBUD.96 EXPENSES
0001 Salaries - Perm. F/T (Manager) (1) $ 40,000
0005 Wages Perm. F/T (Maintenance) (3) $ 90,000
0007 Wages Perm. P/T (Maintenance) (3) $ 15,000
0009 Wages Casual (Instruction) $ 68,000
0010 Wages Program P/T $121,000
0050> (Guards/Cashiers/Bar)
0051>
0052>
0053> Benefits (25% Salaries/Wages) $ 83,500
0054>
0058>
0070 Clothing Allowance $ 1,000
0101 Stationary Office Supplies $ 2,000
0114 Department Issue $ 2,000
0125 Heat $ 79,000
0126 Cleaning Supplies $ 2,500
0129 Utilities/Hydro $ 46,000
0130 Utilities Water/Sewer $ 13,000
0133 Snow Removal $ 3,000
0134 Mech, Equip, Maint. Contract $ 1,000
0142 Banquet Supplies $ 6,000
0167 Program Supplies $ 8,000
0169 Misc, Operating Supplies $ 5,000
0172 R/M Supplies Building $ 5,000
0173 R/M Equipment $ 10,000
0176 R/M Fire Equipment $ 500
0201 Telephone $ 500
0211 Socan $ 800
0224 Copier Maintenance Contract $ 700
0230 Membership $ 700
0232 Travel Expenses $ 500
0254 Insurance $ 5,000
0299 Miscellaneous $ 2,000
CONCESSION EXPENSES $ 60,000
TOTAL
$665,700
REVENUE
Department Issue $ 1,500
Instruction Programs $120,000
Memberships (Pool/Fitness) $ 50,000
Public Swimming $ 50,000
Lockers $ 3,500
Community Hall Rentals $ 40,000
Pool Rentals $ 40,000
Concessions $ 90,000
TOTAL
$395,000
/2
- 2 -
SUMMARY
TOTAL EXPENSES $665,700
TOTAL REVENUE $395,000
$270,700
LESS 10% REVENUE INCREASE (FEES) $231,200
LESS MANAGER & BENEFITS $50,000
GRAND TOTAL $181,200
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SCHEDULE OF EXPENDITURES FOR WEST AREA BRANCH ESTABLISHMENT
1992y°
9 Acct. ( Description 1996 °
Actual ( Actual Ested ted I No. I I Budget i Change i B 9d9g t i i Comments
o rn I 22650 503 I Salaries&Wages I 22650 I 411.5 115855 -1 bh,2 circ cl.and 1 info clerk,1-2 pages
+� I 5280 511 Benefits p g
r t I I 0 1 518 I Collection Materials 5280 I 358.3 I 242000NA I I
000
1600 519 I Collection Processing 1600 ( 484.4 I 5935p
I 0 1 520 Video 0 1 NA I 1000 I I'processing supplies only
250 530 I Heat
I 250 I 2100.0 5500
Hydro
375 531 375 5900.0 I 22500 I I
300 533 I Telephone
I 2500 534 I 300 1425.0 4575
u � I I � Rents&building maintenance � 2500 I 300.0 � 10000 I �
U o ( 3600 I 543 I Furniture&Equipment 3000 -100.0 I 0 1 I
4j Office&Suppges Maintenance I 600 66.7 1000
4J � 400 547
475 548 I Mileage&Courier 400 I 400.0 2000 I I
I I 2000 550 Publicity475 489.5 I 2800 ( I-moving of collection materials to storage site,etc.
50 562 I Insurance 2000 -75.0 I 500 I -ads for hiring of project staff
250 570 Contingency50 I 300.0 I 200 -collection in storage
270 575 Miscellaneous 250 0.0 250
270 0.0 ( 270
1 40000 1 TOTAL EXPENDITURES I 40000 525.0 I 250000 I I