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2016 Administration Budget Recommendations

November 13, 2015

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Agenda

Strategic Context for Budget

Economic & Financial Conditions

Civic & Utility Operating Budget

Capital Budget

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Disclaimer

This presentation has been prepared by City of Regina staff. It has not been adopted, approved, disapproved, or otherwise acted upon by City Council.

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Strategic ContextOur budget recommendations are guided by:

• Official Community Plan – Design Regina

• Corporate Strategic Plan (2014-17)

• Service level standards, including those that are regulated

They are affected by:• The need to continue to grow our infrastructure

funding

• Limited revenue tools at our disposal

• Increasing service demands

• The need to remain affordable for residents

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Regina’s Planning Framework

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Budget Challenges

• Lack of diversity in revenues means the City relies on property taxes and grants

• Aging infrastructure requires increased funding

• Community growth creates future infrastructureliabilities

• Rising costs put pressure on current services

• Ability to meet resident expectations with available funding

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Infrastructure Challenges

• Infrastructure renewal is required to support• Residential streets

• Water and wastewater pipes

• Recreational facilities

• Other buildings

• Need to meet regulatory requirements

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Budget 2016 Theme

Managing Progress: Doing What Matters Most

• Preserving resources for asset management including for residential roads

• Supporting a safe community

• Delivering on key community investments

• Maintaining existing services and service levels

• Maintaining affordability

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City of Regina Our Environment

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-1.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

F

2016

F

2017

F

2018

F

2019

F

Perc

enta

ge G

row

thRegina Key Economic Indicators (2006 - 2019)

Regina GDP Growth Regina Unemployment Rate

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Building Permits

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Regina’s Competitive Tax Increases

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**Winnipeg and Vancouver had no data provided for Two-Storey Houses

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Expenditures Per Household

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Provincial Revenue Sharing

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Operating Revenues

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

% of total re

venu

es

Revenue Sources 2007 ‐ 2016 Other Revenues

Transfers fromReserves

Gas and ElectricalRevenues

Licenses, Levies andFines

Fees and Charges

Government Grantsand Transfers

Taxation

$216.2 $230.9 $250.3 $262.2 $280.4 $305.2 $333.1 $362.9 $388.6 $409.6

Total Revenue($M)

20Capital Funding Sources 2011-2015

Total Capital Plan $662 million

CurrentContributionsReserves

Debentures

DevelopmentChargesFederal Grant

Provincial Grant

Other

External GovernmentSources

23%City Own-Source

Funding77%

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Capital Funding Sources 2016 - 2020

Total Capital Plan $540 million

CurrentContributionsReserves

Debentures

DevelopmentChargesFederal Grant

Other

Non-CitySources

13%City Sources

87%

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Projected Reserve Balances

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Reserve Balances 2010-2020

Res

erve

Bal

ance

(000

's $

)

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Projected Utility Reserve Balances

-

10,000.0

20,000.0

30,000.0

40,000.0

50,000.0

60,000.0

70,000.0

80,000.0

90,000.0

2010 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F 2020F

Utility Fund Reserve Balances 2010-2020

Res

erve

Bal

ance

(000

's $

)

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Debt Projections

25Municipal Debt Levels

 $‐

 $2,000

 $4,000

 $6,000

 $8,000

 $10,000

 $12,000

Regina Saskatoon Calgary Edmonton Winnipeg

Deb

t per Hou

seho

ld

2011 2012 2013 2014 2015

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Financial Condition - Sustainability Indicator

Sustainability Indicators  2010 2011 2012 2013 20142015 Forecast

2016 Budget

Ratio of Financial Assets to Liabilities 1.11 1.25 1.31 1.44 1.10 n/a n/aRatio of Net Debt to Total Revenue 0.21 0.18 0.15 0.13 0.34 0.35 0.34Total Debt Per Household  $1,314 $1,081 $980 $928 $2,742 $2,737 $2,667

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Financial Condition – Flexibility Indicators

Flexibility Indicators  2010 2011 2012 2013 20142015 Forecast

2016 Budget

Ratio of Debt Charges to Total Revenue 0.01 0.01 0.01 0.01 0.01 0.01 0.01Municipal Taxes as % of Household Income 2.15% 2.19% 2.24% 2.36% 2.66% 2.38% 2.45%Ratio of Total Municipal Revenue to Taxable Assessment 0.02 0.03 0.03 0.01 0.03         0.03         0.03        

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Financial Condition – Vulnerability Indicator

Vulnerability Indicator  2010 2011 2012 2013 20142015 Forecast

2016 Budget

Ratio of Government Transfers to Total Revenue 0.20 0.14 0.14 0.13 0.13 0.13 0.13

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Summary• Regina’s current financial condition is relatively stable

• Heading in the right direction, BUT…• …we are not fully funding our long-term service costs

• Administration’s approach to budget development considers:

• Importance of maintaining affordable services• Expectation that we will strengthen the City’s financial condition• Maintain service levels

• Unknowns that could affect our ability to sustain current service levels:

• Asset condition• Succession planning

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Budget ProcessCall for budget estimates – May 2015

Cross divisional team review • Recommendation to Executive Leadership Team

(ELT)

Citizen Budget Tool

ELT recommended 2016 Budget to Council

Public debate December 7, 2015

Council final approval

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Citizen Budget Tool

• Open from October 13 to November 3

• 1,692 visitors and 200 responses (203% increase)

• Increase investment:

• Roadways & Transportation

• Infrastructure and Parks & Open Space

• Maintain investment:

• Community Investment

• Slight reduction in all other areas

• Average mill rate increase of 3.45%

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Budget Book Updates

• Expanded information to reflect best practice and increased transparency

• General Fund

• Utility Fund

• Costing Fund

• Information on all costs and FTEs allocated to each fund

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Performance Reporting

• Operational performance now being reported in budget

• Comparisons to Ontario Municipal Benchmarking Initiatives (OMBI) data in select areas

• This will continue to grow as we launch our participation in OMBI

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2016 General Operating BudgetRecommendations

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2016 Budget at a Glance

• Maintains service levels and minimize risks

• 2.9% tax increase plus 1% dedicated to residential road renewal

• 1% ($1.8M) approved by Council per year for 5 years (2015-2019)

• Tax supported permanent FTE growth 17.15

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2016 Budget at a Glance

• Key investments:

• Strengthening front line police services

• Record funding levels for snow clearing and road infrastructure

• 5-year capital plan is the largest ever -- $1.08 billion

• Landfill Gas to Energy Project to become operational in 2016

• Drainage system upgrades to reduce flooding

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Taxation$205,068 

49%

Licences, Levies and Fines

$14,282 4%

Government Grants and Transfers

$43,935 11%

Fees and Charges$64,083 15%

Gas and Electrical Revenues$43,010 10%

Other Revenues$39,270 

9%

Regina Police Service$9,156 2%

Revenue Sources ($000’s)

Total Revenue$419 Million

392016 General Operating Expenses2016 Budget

($000's)

Salaries & Benefits 158,615.0

Office & Administrative Expenses 7,509.4

Professional & External Services 29,423.6

Materials, Goods & Supplies 7,530.5

Utilities and Other Costs 16,440.6

Intra-Municipal Services 40,036.4

Civic Operating Costs 259,555.5 Community Investment 11,189.6

Allocation to Capital 51,209.3

Transfers to Reserves 16,010.7

Civic Other Expenditures 78,409.6 Total Civic Expenditures 337,965.1

Regina Police Service 80,837.8

Total General Operating Expenditures $ 418,802.9

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FTE Additions for 2016

Tax Supported FTE’s 26.15

Permanent 17.15

Temporary 9.0

Fee Supported FTE’s 17.3

Permanent 17.3

Total Civic FTE 43.45Police FTE increase 11.0Total = 54.45

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2016 Utility Operating BudgetRecommendations

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Utility Budget Highlights

• Investments in both Capital and Operating focused on meeting service levels

• Continuing to focus on system-wide improvements

• Wastewater Treatment Plant

• Long-term sewer trunk relief strategy

• Continuing to address key drainage issues

• 6% Utility rate increase (2016 and 2017)

• Average customer increase of just over $8.25/month

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Utility Cost Comparisons for Average Household (2015)

Regina Calgary Edmonton Saskatoon Winnipeg

Total Annual Water 882.00 829.43 750.79 389.81 522.00

Total Annual Wastewater 659.01 646.63 734.32 240.62 820.80

Annual Drainage Infrastructure Levy 175.20 133.35 423.29 243.61

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Total Annual Utility Charges $1,716.21 $1,609.41 $1,908.40 $ 874.04 $1,342.80

Note1: Saskatoon’s infrastructure levy is not specific to the drainage infrastructure.

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2016 Utility Operating Revenue

Water Revenue$61,633  49%

Wastewater Revenue

$47,105  37%

Drainage Infrastructure Levy $15,488 12%

Other Revenues$1,650  1%

Total Revenue $126 Million

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2016 Utility Operating Expenses2016 Budget

($000's)

Expenditures

Salaries & Benefits 16,556.0

Office & Administrative Expenses 1,058.2

Professional & External Services 8,883.7

Materials, Goods & Supplies 3,080.9

Utilities and Other Costs 12,933.7

Intra-Municipal Services 24,949.9

Utility Operating Costs 67,462.4

Debt Servicing 1,402.3

Total Utility Operating Expenditures $ 68,864.7

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2016 Capital BudgetRecommendations

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• Non-tax revenue sources – like Service Agreement Fees – provide needed capital funds and have a positive effect on taxation levels

• Large, multi-year capital projects in this budget that anticipate funding commitments in 2016 and future periods

Highlights

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Proposed Five Year Capital PlanSummary of Five Year Capital Plan ($000's)

2016 2017 2018 2019 2020 Five Year Total

General Capital 132,727.5 119,361.2 135,482.6 78,945.3 73,516.9 540,033.5

Police Capital 2,747.0 3,036.9 3,057.9 3,223.3 3,261.0 15,326.1

Utility Capital 127,775.0 92,466.3 100,635.9 103,356.4 101,076.4 525,309.9

Total Expenditures 263,249.5 214,864.3 239,176.4 185,525.0 177,854.3 1,080,669.5

Funding Sources:

Current Contributions (General) 37,067.2 38,179.3 39,324.6 40,504.4 41,719.5 196,795.0

Current Contributions (Police) 2,747.0 3,036.9 3,057.9 3,223.3 3,261.0 15,326.1

Current Contributions (Utility) - 50.0 50.0 - - 100.0

Debt 12,859.0 2,500.0 2,500.0 2,500.0 2,500.0 22,859.0

Reserves 104,834.9 102,998.9 102,891.0 85,404.5 79,008.0 475,137.3

Government Grants * 63,248.8 16,233.8 15,833.1 14,563.1 11,088.0 120,966.7

Development Charges ** 16,850.5 36,147.3 39,968.0 38,413.8 36,831.8 168,211.3

Third Party Funding *** 25,642.1 15,718.3 35,551.8 916.0 3,446.0 81,274.1

Total Funding 263,249.5 214,864.3 239,176.4 185,525.0 177,854.3 1,080,669.5

* Government Grants includes Gas Tax, Building Canada Plan and P3 Federal Funding

** Development Charges Includes Servicing Agreement fees for Parks, Roadways and Utilities

*** Third Party Funding Includes funding from Private Sports Groups, Special Project Funding and Moose Jaw

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SummaryThe recommended 2016 budget maintains Regina’s property taxes as one of the lowest in Canada

The recommended 2016 budget maintains existing services and service levels, with enhancements that reflect priority areas identified by Council

2016 Budget supports:• Maintaining programs and services at 2015 levels

• Progress on the City’s largest ever five-year capital plan

• Fixing more residential streets via a dedicated tax levy

• Supporting a safe community with the addition of 8 new officers at the Regina Police Service

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Summary

2016 Budget supports:• Improving transit service

• Partnering with the University of Regina on the Upassprogram - increase transit frequency and capacity on key transit routes

• Record level investment for snow clearing ($9.1 million )

• Continuing to focus on improving sewer and drainage service

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Interested members of the public are encouraged to get involved:

- Provide feedback to their Councillor

- Appear before Council as a special delegation on December 7, 2015

- Note that the Citizen Budget Tool will remain live indefinitely for educational purposes with results reviewed regularly.

Visit: Regina.ca

Public Input & Information

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Thank you