2014 to 2015 Operating Budgets [PPT - 1.8

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2014 to 2015 Operating Budgets
Governance & Priorities Committee
March 7, 2013
1
Council Budget Direction – April 2012
 City will move to three year budget cycle
 City will hold tax increases to 3.25% or below for 2013,
2014, 2015
 The City will engage the public in budget process
2
Budget Realities
To achieve a 3.25% annual tax increase for 2013 – 2015, the operating
budget must be reduced by a minimum of $4.3M over the next 3 years.
These cuts must be ongoing permanent reductions, not one-time cuts.
These cuts are in addition to the significant cuts made over the past
few years
The City has also been adding new inventory each year which
increases operating costs, as well as the infrastructure burden (future
costs to upgrade and replace).
3
Status Quo Not Sustainable
The status quo is not sustainable
To keep tax rate increases at a maximum of 3.25% per year:
• The operating budget must be reduced
• Services must be reviewed and resources shifted
• New revenue opportunities must be explored
• Management requires the flexibility to adapt to evolving needs and
council priorities by shifting resources to areas with increasing
needs
4
Steps Taken since April 2012
 Council Strategic planning & priorities for 2013-2015
 Departments were given detailed instructions to zero base budgets,
and allowance for inflation was removed from all budgets
 Vacancy Management - Identification of vacant positions that will not
be filled
 Organizational Review to identify potential changes to structure and
how services are delivered
 Council undertook a process to develop their ideas for budget
containment and reductions
 Budget Principles developed and approved
 Council supported a list of 10 budget reduction strategies to take
forward to the public for input prior to making final decisions
 Consultation completed and presented to Council
5
6
Organizational Review
Findings from the Organizational Review are expected to be provided
to the City Manager in March
Findings along with Recommendations from the City Manager are
expected to be presented to Council in April
The five year financial plan can be amended at any time to reflect
changes approved through the Organizational Review
7
8
Proposed Budget Reduction
Strategies for 2014 and 2015
• After several meetings in 2012, and consideration of over 30
potential cost reduction strategies, Council approved 10 budget
reduction strategies for consideration and directed staff to inform the
public and seek feedback prior to finalizing budgets for 2013, 2014
and 2015. Council has received all of the feedback collected.
• Of those budget reduction strategies, seven require decisions now in
order to realize reductions in 2014 and 2015 budgets:
9
Proposed Budget Reduction
Strategies for 2014 and 2015
1. Limiting budget increases for library and police to 2%
2. Allocate 1.25% of the tax increase to capital work to maintain City
infrastructure
3. Partial automation of some parkades during slow periods
4. Advertising in parkades, on parking machine etc
5. Shift from annuals to perennials in some beds
6. Reduction in City-led seasonal programming in Centennial Square
Totaling $1.9M
Leaving $434K in reductions to be found through the Organizational Review
7. Organizational Review findings and recommendations are expected to be
presented to Council in April
10
Partial Automation of Some
Parkades
•
•
•
•
•
•
•
To automate some parkades during the slower periods to reduce expenses
Ensure customer service level maintained at a high level
To minimize any service impact during peak periods of arrival and exit, or
special events, staff would be scheduled during peak periods
Initial capital cost of approximately $500,000 for equipment, which would be
funded by the equipment reserve fund
The potential savings is estimated to be $300,000 annually
The estimated savings of $300,000 would constitute between 30% to 40%
of staff hours, predominately from auxiliary hours
In addition, a parking service review will be completed in 2013
Council Approval in Principle is being requested. Staff will then review options
in detail as noted above and report to Council before any final approval is
requested.
11
Shift from Annuals to Perennials
• Convert annual beds/planters outside of the downtown core and
Beacon Hill Park to perennials
• Spring and fall plantings reduced
• 2 FTE reduction; positions eliminated through retirement or
vacancies (no layoffs)
• Savings begin in 2014
Potential savings: $150,000 each year
12
Reductions in City-led seasonal
programming in Centennial Square
• Reduce lunchtime concerts to 3 a week (from 5)
• Eliminate winter programming
– Technical support for the Christmas Tree light-up, Figgy
Pudding, Snow Day and any other seasonal programming
• Reduce programming and event support
Potential savings: $82,000 each year
13
2014 to 2015 Budget Balancing
Shortfall as per the 2012-2016 Financial Plan
Forced Growth
Elections - 4 additional offsite voting places, staffing
Pension
Governance
Reductions:
Silver Threads lease - reduced space
Payment in Lieu of Taxes (PILTS)
Construction permit revenue
Budget Consultation Items:
Reduce Capital Property Tax Levy to 1.25%
Police reduction
Library increases greater than original FP
Shift from annuals to perennials in some beds
Reduce City led programming in Centennial Square
Partial automation of some parkades
Advertising on Parkdades, parking machines
Further reductions required to meet 3.25% target
Reductions to be Identified through
Organizational Review
14
2014
1,604,281
2015
1,088,579
Total
1,799,281
16,000
195,000
10,000
1,309,579
(50,000)
(265,600)
(140,000)
1,343,681
(121,000)
(140,000)
1,048,579 2,392,260
195,000
3,108,860
(285,000)
(459,711)
64,424
(150,000)
(82,000)
(300,000)
TBD
(1,212,287)
131,394
(290,000)
(506,381)
50,794
(745,587)
302,992
434,386
(131,394)
0
(302,992)
0
(434,386)
0
Sample 2013 – 2017 Five Year Plan
2013
Net City
Net Police
Library
Reductions to be determined
Property Tax Levy
New Assessment Revenue
Property Tax Increase
Estimated Property Tax Increase
15
70,788,458
36,985,839
4,275,183
2014
2015
2016
2017
112,049,479
69,485,572
37,699,203
4,393,350
(131,394)
111,446,730
72,984,208
38,382,102
4,505,431
(302,992)
115,568,749
76,814,838
39,371,158
4,612,970
80,434,141
40,388,091
4,722,631
120,798,966
125,544,862
108,366,728
165,000
108,531,728
107,454,460
500,000
107,954,460
111,446,730
500,000
111,946,730
115,568,749
500,000
116,068,749
120,798,966
500,000
121,298,966
3,517,751
3,492,270
3,622,019
4,730,217
4,245,897
3.25%
3.25%
3.25%
4.09%
3.51%
(434,386)
Recommendations
That Council approve the following budget reductions
for 2014 and 2015:
• Allocate 1.25% of the tax increase to capital work to
maintain City infrastructure
• Partial automation of some parkades during slow periods
• Advertising in parkades, on parking machine etc
• Shift from annuals to perennials in some beds
• Reduction in City-led seasonal programming in
Centennial Square
Next Steps
 March 8, 2013
– Greater Victoria Public Library Budget Presentation
– 2013 Capital Budget
 April 2013
– Public Budget presentation
– Financial Plan and Tax Rate Bylaws preparation (adoption of
bylaws must be done before May 15th; the last regular Council
meeting before this date is May 8th)
 May 2013
– Print and mail property tax notices (July 2nd due date)
17
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