2004 Budget

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2004 Budget
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Agenda

• 2003 to 2007 Financial Plan
• 2004 Operating Budget
• 2004 to 2008 Financial Plan
• Summary of the 2004 to 2008 Capital Budget

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2003 to 2007 Financial Plan
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2003 to 2007 Financial Plan
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2004 Operating Budget
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Major Issues

• Outstanding Legal Claims
• Funding of Employee Benefit Obligations
• (Unfunded Liability of 6,953,450)
• Employee Pension Buybacks
• Declining Reserve Funds
• Increasing Debt
• Assessment Appeals

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Unknowns

• 2004 Surplus
• New Construction Revenue
• Final Library Operating Budget
• Interest Rates
• Impact of GST Rebate Changes

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Supplementary Budget Requests
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Summary of Grants
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Additional Grant Requests
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2004 to 2008 Financial Plan
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2004 to 2008 Capital Budget
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Capital Budget Issues

• Capital Funding does not meet Capital Expenditure
  Requirements
• Funding Strategies adopted each year but only
  partially implemented
• Our Debt Level is high and there are increasing
  pressures to borrow for Capital Projects.
• Depleting Reserves.

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Assumptions

• Assumes that the Capital Property Tax Levy is
  increased by 1.5 each year until 2008.
• Assumes that transfers to reserves are increased
  by 500,000 each year until 2008.
• Assumes that the Debt Funding Strategy is
  Adopted.
• Changes to these Funding Strategies will result
  in further Reductions in Capital Expenditures

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Long term Debt Strategy

• We will strive to minimize borrowing and focus on
  debt reduction.
• Debt funding will be limited to the following
  circumstances
• Large one-time Capital Projects (e.g.
  Multipurpose Facility, New Buildings etc.)
  costing 1.0 million or more.
• Large Capital Projects that attract third party
  funding, costing 1.0 million or more.
• Where a business case can be made that the
  interest cost incurred by borrowing will be more
  than offset by revenue received or reduced costs
• Debt funding will not be used to fund maintenance
  programs, equipment purchases and other ongoing
  capital programs

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Balancing Strategies

• Changes to Funding Sources
• Reserves for Development Cost Charges to be
  allocated to 2004.
• Casino Reserves to be allocated to 2004 2007.
• Use Debt Funding where Debt Strategy Allows.
• Give preference to projects that maintain
  existing assets as opposed to create new ones.
• Give preference to projects that attract non-City
  funding.
• Give preference to projects that generate cost
  savings and support customer service.

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Other Considerations

• The timing of construction projects Vs the
  economic environment.
• The timing of projects that are funded by debt.
  The borrowing process takes up to 6 months and
  the earliest we can get funds is November.

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Five Year Capital Budget Summary
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Five Year Capital Budget Funding Sources
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Impact of Funding Strategies
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Borrowing Process

• If we are approving Debt for Capital Projects, we
  must determine the appropriate approval process
• Referendum
• Or
• Counter Petition

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Decisions Required

• Preliminary Approval of Operating. Budget, which
  results in a Property Tax Increase of 4.35 plus
  Police.
• Decision on Supplementary Budget Items.
• Decision on 2004 Grant Funding.

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2004 Budget Timelines and Meetings Required
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Budget Timelines

• Operating Budget workshops with Council
• Capital Budget Workshops with Council
• Preliminary Capital and Operating Budget approval
  by Council
• Council approval of tax rates and ratios
• Adoption of budget bylaws

• Feb 5th, 2004
• Feb 2004
• Feb 2004
• April 15, 2004
• May 15, 2004

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Proposed Schedule of Council Budget Review
Meetings

• Budget Discussion at Finance Committee
• Capital Budget Workshop with Directors
• Council Workshop on Operating Budget
• Council Workshop on Capital Budget
• Council Workshop on Capital Budget
• Public Presentation of Financial Plan

• Jan 12, 2004
• Jan 21, 2004
• Feb 5, 2004
• Feb 13, 2004
• Feb 26, 2004
• March 4, 2004