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County of Wellington 2019 Budget and 10-Year Plan

This presentation provides an overview of Wellington County's 2019 budget and 10-year plan, including adjustments, financing, reserves, debt management, and capital budget details.

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County of Wellington 2019 Budget and 10-Year Plan

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  1. County of Wellington2019 Budget and10-Year Plan January 7, 2019 Presentation to Wellington County Council

  2. Purpose of today’s meeting • Review 2019 Budget Process • Provide a background of the County’s finances • To provide Council with an overview of the 2019 Budget and 10-Year Plan in advance of January Committee meetings • Opportunity for Council to review and discuss service levels and proposed capital projects

  3. Agenda • Part 1: Introduction • Purpose of the 10-Year Plan • Sample Budget Adjustments

  4. Agenda • Part 2: 2019 Budget and 10-Year Plan • 2019 Budget Process • Changes to the 10-Year Plan since November • Capital Financing • Reserves and Reserve Fund Balances & Activity • County Debt Management and Forecast • Capital Budget Details • Operating Budget Forecast • Recap and wrap-up

  5. Purpose of the 10-Year Plan • County prepares a fully-integrated operating and 10-year capital forecast with annual property tax implications • Benefits: • Encourages a focus on achieving longer-term plans, goals and objectives • Better aligns future infrastructure funding from other orders of government • Allows for strategic use of debt and reserves • Integrates better with future Asset Management Plans • Will meet the requirements of provincial Asset Management Regulations • Ratings agencies support multi-year planning and suggest it is an indicator of strong financial management practices

  6. Sample Budget Adjustments • Purpose: to illustrate the impacts and the need to consider long-term planning implications when making adjustments to the County tax levy • Designed to highlight the effect of budget adjustments not only in 2019, but in future years as well • Shows the importance of considering the 10-Year Plan, not just the current year budget • Types of adjustments: • Service Level Changes • Timing Changes • Sources of Capital Financing (ie: tax levy, reserves or debt)

  7. Budget Adjustment Sample: Base Scenario

  8. Budget Adjustment Example #1

  9. Budget Adjustment Example #2

  10. Budget Adjustment Example #3

  11. Budget Adjustment Example #4

  12. Budget Adjustment Example #5

  13. Budget Adjustment Example #6

  14. Agenda • Part 2: 2019 Budget and 10-Year Plan • 2019 Budget Process • Changes to the 10-Year Plan since November • Capital Financing • Reserves and Reserve Fund Balances & Activity • County Debt Management and Forecast • Capital Budget Details • Operating Budget Forecast • Recap and wrap-up

  15. County’s Budget Process • Year-round effort – budget monitoring takes place throughout the year • Monthly financial statements • Budget variance reporting • Capital budget amendments, as required • 2019 Budget Schedule was approved by AF&HR in May • Preliminary Budget and 10-Year Plan was presented to all committees in November • CAO & Department Head reviewed line-by-line budgets in December

  16. Budget Schedule to Date

  17. 2019 Budget Process - Next Steps • January 7, 2019 presentation to Council • Budget reviews at Committee and Board meetings next 2 weeks • Full budget package circulated to Council by January 11, 2019 • AF&HR review of budget on January 15, 2019 • AF&HR recommendations considered by Council on January 31, 2019

  18. 10-Year Plan Outlook in November • 10-Year Plan projected a 2.9% budget increase for 2019 • Increases from 3.0% to 3.9% in 2020-2028

  19. Changes to the 10-Year Plan since November • Lower ambulance costs based on updated budget figures from the City ($275K) • Province announced Ontario Cannabis Legalization Implementation Fund (OCLIF) – County funding at $47K • Climate Change Staff Grant ($125K over two years) was approved by FCM to fund 60% for the County to add a Climate Change Coordinator (net cost of $46K) • Two new staffing additions to Children’s Early Years (net cost of $31K) • Net effect of changes to timing and nature of Roads projects and activities added approx. $50K • Effect: reduced tax levy by approx. $200K

  20. Highlights of the revised 10 year plan • Projected tax increase of 2.7% in 2019 and a range of 3.0% to 3.9% from 2020-2028 • Estimated 2019 operating budget of $221.3 million • $371.3 million capital investment over 10 years • $42.9 million in 2019 • $57.3 million in new debt issues over 10 years

  21. 2019-2028 Capital Financing

  22. 2019-2028 Capital Budget Highlights • 59.9% of capital spending will be funded from tax levy and reserves • $47.9 million -12.9% funded through Federal and Provincial subsidies • $30.0 million in Federal Gas Tax • $17.9 million in OCIF (2021 - 2028 forecasted) • $57.3 million – 15.4% to be funded through Debt • $42.9 million tax supported • $14.4 million recovered from development charges • $9.5 million – 2.6% funded by Development Charges

  23. Reserves and Reserve Fund Balances • County’s reserve and reserve fund balances totalled $73.8 million as of December 31, 2017 • Reserves: $60.2 million • Reserve Funds: $13.6 million (more restrictive in use) • Reserve and Reserve Fund balances currently sit at $72.7 million in draft form • Interest earnings still to be allocated • Capital projects still to be closed • Projected surplus still to be allocated ($1.6 to $2.7 million)

  24. Source: 2018 BMA Municipal Study

  25. Projected long term borrowing • $57.3 million in new debt to be issued over the next ten years: • Roads Related Projects - $30.2 million • Roads Growth Related Debt - $14.2 million • WR 46 and WR 124 widening • WR 7 at First Line Roundabout • Rebuild Arthur Shop • Roads Tax Supported Debt - $16 million • Erin Garage Construction • 6 Bridge projects • Hospital Capital Grants - $6.1 million • Solid Waste Services Projects $3.4 million • Riverstown Leachate Collection System $2.4 million • Riverstown Compliance Mitigation $1 million • Property - $16.1 million for Admin Centre Expansion (2028) • Ambulance - $1.5 million for Delhi Street Station (COG project)

  26. Source: 2018 BMA Municipal Study

  27. Source: 2018 BMA Municipal Study

  28. Source: 2018 BMA Municipal Study

  29. Source: 2018 BMA Municipal Study *Wellington County ratio corrected

  30. Debt summary • Debt outstanding will top out at $54.4 million • $40.1 million tax supported, $14.3 million DC supported • Debt servicing costs will top out at $7.4 million • $5.9 million tax supported, $1.5 million DC supported • Debt servicing costs as a % of the county tax levy does not exceed 5.7% over the ten-year plan • Greater reliance on debt due to increasing infrastructure requirements • County’s debt levels are maintained, but debt servicing costs are climbing in latter half of the ten-year plan before leveling off when Terrace debt matures and Admin Centre debt is added

  31. 2019-2028 Capital Expenditures ($371.3 million) Other includes: Planning, Green Legacy, Emergency Management, Police Services, Museum, Library, Affordable Housing, Ontario Works, Child Care, Economic Development and Provincial Offences Act

  32. 10 Year Capital Plan Highlights - Infrastructure • Investment in County roads network • Roads Garages –the replacement of Arthur, Erin / Brucedale and Harriston throughout the forecast • Social and Affordable Housing Capital Improvements • Continued investment in County owned social and affordable housing units. • Development of Riverstown Landfill site • Closure of phase I and preparation for phase II • Expansion of the Administration Centre • Increase office and parking for administration staff located in downtown Guelph.

  33. 10 Year Capital Plan Highlights – Health Care • Ambulance Station Improvements • Proposed construction of 6 sites located throughout the County (5 locations identified over the forecast) • Hospital Capital Grants • Continuum of Care feasibility study and Implementation of Phase 1 for Wellington Place lands • Potential impact to future budgets

  34. Capital Plan: Roads Investment in County roads network including bridges and culverts • $258.6 million investment over 10 years including: • $67.4 million in roads construction projects • $63.7 million in bridges and culverts • $81.2 million in resurfacing projects • Facility Construction - $24.4 million: • Arthur Shop (2019-2021) - $6.2 million • Erin / Brucedale Shop (2022-2024) - $11.2 million • Harriston Shop (2025-2027) - $6 million • $1 million in various facility repairs over the 10 years • Roads Equipment Replacements - $20.6 million

  35. Capital Plan: Roads • Internal funding (75%): • $119.9 million from the tax levy • $44.2 million from County Reserves • $20.6 million funded from the Roads Equipment Reserve • $23.6 million funded from the Roads Capital Reserve • $30.2 million in debt • External funding (25%): • $47.8 million in Federal and Provincial Subsidies • $29.9 million funded from Federal Gas Tax • $17.9 million funded from Ontario Community Infrastructure funding (OCIF) • $8.8 million funded through Development Charges • $7.6 million in municipal recoveries

  36. CapitalPlan: Solid Waste Services • $12.5 million in capital investment over 10 years • $7 million in improvements at active landfill sites and transfer stations • Riverstown Landfill ($6.5 million) - close Phase I and prepare for Phase II • Phase 1: Compliance Mitigation Measures • Phase 2: Cell Development, Leachate Collection System, Storm Water Retention Pond • $4.9 million for equipment • $567,000 work at closed sites

  37. Capital Plan: Social and Affordable Housing • $34.5 million investment in the County’s 1189 Social Housing units for improvements and upgrades • Cost shared with City of Guelph (currently 75.4%) • County share funded from Housing Capital Reserve • County owned Affordable Housing Buildings: • Four sites (Fergusson Place, Webster Place, 182 George Street Arthur and Palmerston) • Retrofit projects for each building total $1.1 million over the forecast • Funded by Housing Capital Reserve

  38. Capital Plan: Hospital Grants • Total of $14.4 million in commitments for Hospital Capital Grants in Wellington • $10.0 million for Groves Memorial Community Hospital • $2.2 million for Louise Marshall Hospital in Mt Forest • $2.2 million for Palmerston and District Hospital • $6.1 million of commitment remains to be transferred • $5.9 million to be debt financed with remaining funding to come from the General Capital Reserve

  39. Capital Plan: Property Services • Facility improvements to County-owned buildings: • Total $3.1 million over the forecast • Vehicle and equipment replacements • Total $275,000 over the forecast • Expansion of the Administration Centre in Guelph (2028) • Concept Plan at this stage • To provide for additional office and parking space • Estimated cost at $21.1 million • Funding split between debt ($16.1 million) and reserve ($5 million)

  40. Capital Plan: Land Ambulance • Ambulance Station Redevelopment – 5 stations over 10 years, 6th station planned just outside 10-years (Harriston) • Erin (2019 - 2020 - $1.5 million) • Guelph/Eramosa (2021-2022 - $1.5 million) • Arthur (2023-2024 - $3 million) • Drayton (2025-2026 - $1.5 million) • Mount Forest (2027-2028 - $1.5 million) • Funded through County Property Reserve - to be leased back to ambulance service • Other Land Ambulance Capital (County share approx. 40%) • Ambulances and related equipment - $3.3 million (County portion) over 10 years • Emergency Services joint training facility – 2028 - $382,000 (County portion) • Delhi Street Facility – 2028 - $1.5 million (County portion) • Funded through reserve transfer in Ambulance operating budget, development charges and debt issue.

  41. Capital Plan: Wellington Terrace • Continuum of Care project on Wellington Place Lands • $1,000,000 as an initial allocation for the implementation phase 1 • Lifecycle replacements of equipment and building components total $3.3 million over the ten years • $240,000 in technology updates • Nutrition Services Hardware (2019) • Network equipment (2019 & 2024) • Wireless Phones replacements (2025)

  42. Capital Plan: Library • Total of $1.5 million in capital investment over 10 years • Lifecycle replacements of building components of $524,000 • Equipment replacements - $405,000 • Technology upgrades and replacements – $575,000 • Library Master Plan - $30,000 in 2021 • Review all aspects of library services and inform future programme initiatives

  43. Capital Plan: Museum and Wellington Place • Upgrades to the Museum and outbuildings • Various facility improvements total $680,000 over 10 years • Farm House Archeological dig over 2021-2022 to turn the site into an interpretive exhibit - $170,000 • Wellington Place investments include: • Construction of Samuel Honey Drive in 2021 - $1.2 million • Driveway resurfacing (2024 – 2025) - $500,000 • Equipment purchases total $110,000 over the forecast

  44. Capital Plan: Economic Development • Wellington Signage Strategy • completion in 2019 ($60,000) • SWIFT Rural Broadband • Last contribution for current agreement ($176,000) • Totalled $880,000 over 5 years • Hillsburgh Library Ground Improvements • Concept to provide a gazebo, food preparation area, trail work and library storage on the property • $300,000 covered by Reserves

  45. Operating Budget Forecast • $221.3 million in expenditures and transfers in 2019 • Forecast to grow to $289.8 million by 2028 • Average Annual Increase of 4.0% over 10 years • Mainly driven by infrastructure requirements (capital transfers) • Totals just under $2.3 billion in projected spending over 10 years • In 2019 -1% tax increase/decrease = $972,000 • 2019 Assessment growth = 2.23%

  46. Operating Budget By Department Other includes: Property Assessment, Economic Development, Tax Write-offs, Corporate Legal, Transfer of Interest to Reserves, Provincial Offences, Debt and Grants to Organizations.

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