By: Councillor Austin Davey

1

• By Councillor Austin Davey
• Interim Chair
• Budget Committee of the Whole

2
Councils Direction

• Council Resolution 2001-575 stated
• Be it resolved that the Council of theCity of
  Greater Sudbury directs theChief Administrative
  Officer to prepare the 2002 Operating Budget
  estimates to reflect the following guideline
  that the net basic budget increase be zero
  percent.

3
Purpose

• To review 2002 Budget facts and figures
• To outline alternative approaches to resolving
  2002 Budget challenges
• To outline a schedule of budget meetings

4
Magnitude of 2002 Budget Issues

• approximately 4.3 million of ongoing costs
  related to amalgamation
• approximately 10.2 million in 2002 unavoidable
  costs
• an annual 40 million capital deficit due to
  long-term under-funding

5
2001 Adjusted Base Budget Estimates
6
2002 Base Budget Estimated Increases
7
2002 CurrentBase Budget
8
Traditional Budgeting Options

• efficiencies and process improvements
• Revenues
• capital reductions
• service/program reductions
• one-time offsets
• Other

9
2001 Revised Levy
10
2001 Adjusted Base(Ongoing Costs Related to
Amalgamation)
11
2002 Base Budget Estimated Increases
12
2002 Base Budget Estimated Increases (cont)
13
2002 Base Budget Estimated Increases (cont)
14
2002 Base Budget Estimated Increases (cont)
15
The numbersare large!

• They are here to stayand must be addressed
  immediatelyin a different wayif we are going to
  be a sustainable communitythat not only
  survives, but thrives

16
Challenges present Opportunities

• to show leadership, move forward, plan for the
  future
• HOW? By adopting a new budgeting process
• a process that allows us to deal with the issues
  in the current budget year in a unique short-term
  fashion
• a process that requires us to look ahead and
  address our fiscal needs over the next ten years

17
Sustainable Community Model

• Prudent Fiscal Management
• Opens the door to options not available under
• traditional year-to-year budgeting methods
• Two-step process
• 1. the development of a short-term financial plan
  for 2002 only,
• and, more importantly,
• 2. the development of a long-term financial plan
  for the City,
• (which would be presented to Council in early
  October.)
• Goal A sustainable community

18
Long-TermFinancial Plan

• Public input
• property and business assessment base forecasts
• future and emerging revenue streams
• pressures/opportunities impacting expenditures
• required levels/sources capital financing
• fiscal policy for debt management

• adequacy/levels of reserves and special funds
• property tax policy and rates
• financial indicators
• current financial management policies
• current financial planning / budget process
• best practices in long-range financial planning
• sustained economic growth
• risk analysis

19
Process

• Phase 1 - Issue identification
• Phase 2 - Identify policy options
• Phase 3 - Policy evaluation
• Phase 4 - Financial Plan
• Result Sustainable Community

20
City of Edmonton adopted a Long-TermFinancial
Plan

• City of Edmonton adopted a Long-Term Financial
  Plan in 1998 to guide financial decision-making
  to 2008 by addressing financial issues facing the
  City and outline effective stategies to deal with
  these issues

• Long-Term Financial Plan
• an innovative and progressive component of a
  professionally managed financial system
• will support our ability as a City to efficiently
  finance public services on an ongoing basis

21
Benefits forCity of Edmonton

• helping the City to better understand / address
  its long-term commitments
• providing accurate and timely information
• providing principles to guide decision-making
• providing a policy approach to planning
• ensuring municipal responsibilities are aligned
  with appropriate revenue sources

• Result
• New approach to financial management that shifts
  the emphasis from bottom line financial concerns
  to service delivery, within a longer-term
  financial planning horizon.

22
Benefits to the Sustainable Community Modelfor
the City of Greater Sudbury

• Provides for public participation and input into
  Council decisions
• Fosters confidence in both the public and the
  business community by demonstrating leadership
  and planning by this Council
• Provides a sound basis for a short-term 2002
  solution that is not available under any other
  option

23
Benefits to the Sustainable Community Modelfor
the City ofGreater Sudbury

• Provides for third party involvement i.e. the
  hiring of an outside expert to work with staff to
  prepare long-term options for Councils
  consideration
• Supports Councils direction of Council control
  through policy
• Continues to keep open the political options of
  approaching the Federal and Provincial
  Governments with the same urgency that exists
  today.

24
Unique Opportunity

• Sustainable Community Model
• An opportunity to budget differently and keep us
  on a solid track
• In keeping with Councils Vision a growing,
  world-class community
• bringing talent, technology and a great northern
  lifestyle together.
• Traditional method of budgeting - not sustainable
• Will result in significant reduction in
  services, downsizing(staff reductions) and/or
  drastic reductions in capital,all of which are
  not sustainable in the long-term.

25
2002 Short-Term Solution

• The Sustainable Community Model allows for a
  2002 short-term solution that would not be
  available under any other option
• the use of reserves to offset ongoing costs in
  2002 only provided there is a long-term financial
  plan being put in place for 2003 and beyond.

26
Traditional Budgeting

• In traditional year-to-year budgeting, options
• in all of the following categories are
  considered
• a) Efficiencies
• b) Service reductions and/or eliminations
• c) Long-term capital reductions
• d) One-time offsets
• e) New or enhanced revenue sources
• f) Other.

27
Traditional Budgeting

• Favors year-to-year management, and is contrary
  to the sustainable cities concept, and the
  outcomes of the CGSs visioning exercise
• Provides no perception of leadership or planning
  to the public and/or business community on behalf
  of Council
• Perpetuates ward politics (not in my ward)
• Provides for no policy framework
• Provides for no opportunity for public input on
  policy issues and
• Reduces the urgency of a new deal with the
  Federal and/or Provincial Governments.

28
Seeking Council Support

• Adopt the Sustainable Community Model of
  budgeting
• with a short-term solution and long-term
  financial plan
• Hire an expert to assist in the development of
  the Long-Term Financial Plan with a target
  completion dateof October 2002

29
Benefits to the Sustainable Community Model

• Provides for public participation and input into
  Council policy decisions
• Fosters confidence in both the public and the
  business community by demonstrating leadership
  and planning by this Council
• Provides a sound basis for a short-term 2002
  solution that is not available under any other
  option
• Provides for third party involvement i.e. the
  hiring of an outside expert to work with staff to
  prepare long-term options for Councils
  consideration
• Supports Councils direction of Council control
  through policy
• Continues to keep open the political options of
  approaching the Federal and Provincial
  Governments with the same urgency that exists
  today.

30
Thank You!

• By Councillor Austin Davey
• Interim Chair
• Budget Committee of the Whole
• Questions?