2004/09/20 CORPORATE SERVICES COMMITTEE AGENDA
BARBARA MUIR
FIRST MEETING
Monday, September 20, 2004
Council Chambers - 6:15 p.m.
Staff Contact
1. Reports:
CPS-2004-03 - 2005 General Purposes Budget Discussion Tony Ravenda
CPS-2004-04 - 2005-2009 Capital Projects Budget Discussion Tony Ravenda
CPS-2004-05 - 2005 Municipal Utility Budget Discussion Tony Ravenda
2. Adjournment
Corporate Services Department CPS-2004-03
Human Resources Tony Ravenda
The Ci~ of 4310 Queen Street Executive Director
P.O. BOX 1023
Niogara Foils Niagara Falls, ON L2E 6X5
Car~odo web site: www.city.niagarafalls.on.ca
Tel: (905) 356-7521
Fax: (905) 356-5110
E-mail: travenda@city.niagarafalls.on.ca
September 20, 2004
Alderman Wayne Campbell, Chair
and Members of the Corporate Services Committee
City of Niagara Falls, Ontario
Members:
Re: CPS-2004-03 - 2005 General Purposes Budget Discussion
RECOMMENDATION:
For the information of the Corporate Services Committee.
BACKGROUND:
The 2005 General Purposes Budget will be discussed in the Council Chambers during the Corporate
Services Committee. The 2005 budget process will include several discussions as outlined in the
2005 budget schedule. A final budget review and approval will occur on December 6. This report
provides information on the various Budget Issues that impact the 2005 General Purposes Budget.
The Chief Administrative Officer directed Staff to prepare the 2005 General Purposes Budget in
compliance with City Council's goal "to make every effort to maintain current levels of service
without placing an increased burden on the City's Taxpayers". The Chief Administrative Officer
has also directed staff to use City's Council's strategic priorities, Schedule "A', to guide the
preparation of the budget.
Staff has identified a number of challenges in preparing the 2005 Budget. They are as follows:
REVENUES
TAXATION: ASSESSMENT AND TAXATION
For 2005, the property assessment will not undergo a re-assessment as in 2004. Due to the change
in the valuation date from June 30 to January 1, a re-assessment of property values will be postponed
until the 2006 taxation year. As a result, the total assessment will not change for 2005, except for
all changes from the appeals, omits and supplementals processed in 2004.
Working Together to Serve Our Community
Clerk's Finance · Human Resources Information Systems · Legal Planning & Development
September 20, 2004 - 2 - CPS-2004-03
WASTE MANAGEMENT
For 2004, the City used a waste management tax rate that is based on property assessment. Staff
intends to continue this method for collecting waste management revenues.
TAXATION: PENALTIES AND INTEREST
Since July 1, 1998, the penalty and interest rate has been set at one and one-quarter percent (1 - 1/4%)
per month, which is the maximum rate permitted by the Municipal Act. Staff does not anticipate a
change to this rate for 2005.
PAYMENTS IN LIEU OF TAXATION
The annualized PJ.L. from the Fallsview Niagara Resort (casino) will significantly increase the 2005
revenues. As in past years, this revenue has been used to directly offset the loan payments for the
CN/CP railway corridor and the new community centre.
GRANTS AND SUBSIDIES
Local Services Reali~mnnent included the allocation of the Community Reinvestment Fund (CRF),
a provincial grant to assist municipalities with the costs of transferred responsibilities. The City's
2004 allocation from the CRF was $3,153,000. Staffwill continue to use this allocation amount for
2005.
Staff anticipates the successful award of a one-time grant from Ontario Power Generation Co.
(formerly a part of Ontario Hydro) for the community impact from constructing additional capacity
at the Sir Adam Beck generating station. This agreement is currently under review and therefore the
grant may not be received in the year 2005.
LICENCES, PERMITS, USER CHARGES, FEES, RENTALS
Where appIicable, the approved increases to the Schedule of Fees for Services will be incorporated
in the various revenue sources. Increasing these rates to a full cost recovery would provide
significant sources of funds to pay for specific services.
RESERVE FUNDS, RESERVES AND SURPLUS
During 1999, the Niagara Falls Hydro paid out an outstanding debenture to the City's reserve funds.
Staff will include $140,000 of that reserve fund to pay for the 2005 principal and interest payment.
During 2001, the City debentured $99,100 more than required for the Lundy's Lane Battlefield
Millennium project. These funds have been put into a reserve fund to help pay the annual principal
payments. For 2005, $9,900 will be used to help pay the $27,000 payment.
Staff will be including contributions of reserves to offset specific expenses. Staff is also considering
various contributions from reserves to help offset the increase in expenditures.
September 20, 2004 - 3 - CPS-2004-03
SUNDRY REVENUE
The City receives an annual compensatory grant from Casino Niagara. The City also receives
revenue from the Provincial Offences Act (POA) Inter-Municipal Agreement. The agreement,
approved in May 2000, provides a sharing of net revenue with the Region and the other Niagara
municipalities
EXPENSES
SALARIES, WAGES AND BENEFITS
As of December 31, 2004, a three-year agreement with the Canadian Union of Public Employees,
Local 133, will expire. Staff is using the approved 2004 salary/wage rates in the 2005 Budget.
During 2003, a three-year agreement was negotiated and ratifi ed with the Niagara Falls Professional
Fire Fighters' Association. Staff is also including additional firefighter complement to address the
increasing demand for fire services.
Staffis examining the costs for employee benefit plans and statutory contributions. Premium costs
for benefit plans have increased effective September 1,2004 for a one~year period. Canada Pension
Plan contributions and Employment Insurance contributions may increase from rate increments and
salary/wage adjustments. During 2004, OMERS pension contributions had a significant increase,
due to the return to the full contribution requirements. OMERS contributions for 2005 will only
increase in relation to salary/wage adjustments.
MATERIALS
Staff is including a general inflation rate increase of 2.7% for the 2005 costs for materials and
services. Energy expenses have significantly increased according to each of the relevant percent
increases. General Insurance premium may be maintained for the 2005 policy term, however, claim
payments may increase due to the increased deductible.
CONTRACTED SERVICES
Staff estimates the total expenditure for Contracted Services to increase for 2005. Most of the
expenditure will be paid to the Region for waste management services.
CAPITAL CONTRIBUTION
The General Purposes and Municipal Utility budgets contribute annually to the Capital Projects
Budget. The Municipal Utility Budget includes a 15% increase to waterworks and sanitary sewer
capital projects. The General Purposes contribution has a guideline for amaual increases. The
guideline suggests that 50% of the previous year's supplemental taxes be the maximum value for the
annual increase. Staff is requesting direction as to whether this guideline be maintained, or, that
General Purposes also increases its contribution by 15%.
September 20, 2004 - 4 - CPS-2004-03
DEBT PAYMENTS
At December 31,2004, the total debenture debt outstanding will be $11,962,118. During 2005, the
contractual payment of $1,951,190 includes a reduction of $1,369,894 in principal and an interest
charge of $581,296. Staff will be including contribution from reserve funds to help pay the annual
payment. Per Council direction, Staffis using short-term financing for the railway acquisition and
community centre. For 2005, the financing cost will approximate $941,000 on temporary loans of
$20.6 million. Staff also anticipates the temporary loans to be reduced by $6.2 million.
MUNICIPAL GRANTS TO AGENCIES, BOARDS AND COMMISSIONS
City Council will be receiving requests from Agencies, Boards and Commissions for continued
funding. Staff reminds the Committee that the requests are usually referred to "final budget
deliberations". Staff will provide a summary of all 2005 requests compared to 2004 approved
amounts.
SUMMARY
This report is intended to inform Council of the various issues that Staff will address that will impact
the 2005 General Purposes Budget. This report will also serve as the starting point in which
Council's direction on any of the above issues will be addressed and included as part of the final
General Purposes Budget to be presented and approved on December 6, 2004.
Recommended and Approved by: Respectfully submitted:
T. Ravenda "~ John MacDonald
Executive Director of Corporate Services Chief Administrative Officer
Corporate Services Department CPS-2004-04
Human Resources Tony Ravenda
City' of 4310 Queen Street Executive Director
Niogoro Foils P.O. Box 1023
Conodo Niagara Falls, ON L2E 6X5
web site: w,,~v.city.niagarafalls.on.ca
Tel: (905) 356-5110
Fax: (905) 356-5110
E-maih travenda@city.niagarafalls.on.ca
September 20, 2004
Alderman Wayne Campbell, Chair
and Members of the Corporate Services Committee
City of Niagara Falls, Ontario
Members:
Re: CPS-2004-04 - 2005-2009 Capital Projects Budget Discussion
RECOMMENDATION:
For the information of the Corporate Services Committee.
BACKGROUND:
The 2005 budget process will include several discussions as outlined in the 2005 Budget Schedule.
A final budget review and approval will occur on December 6. This report provides information on
the various Budget Issues that impact the Capital Projects Budget.
The purpose ora Capital Projects Budget is to provide descriptive details of the Capital Projects for
the 2005 budget year and to provide information for future years' Capital Projects. A Capital Projects
Budget also indicates the funding requirements and the sources of funds from the General Purposes,
Municipal Utility, other funding sources and new borrowing.
BUDGET ISSUES
Fire Services
Several new projects are being considered in the 2005 Fire Services capital program. The program
includes the pumhase of vehicles, replacement of fire equipment, upgrading of existing fire station
facilities, and replacement o f radio communications hardware. Some ofthe funding will come from
general purposes and other funds, however, some borrowing may be necessary to provide sufficient
funding for immediate program items.
Working Together to Serve Our Community
Clerk's Finance Human Resources Information Systems Legal Planning & Development
September 20, 2004 - 2 - CPS-2004-04
Municipal l~orks
Tbe 2005 Municipal Works capital program includes several projects already in progress. Some of
the major projects include Montrose Road, Stanley Avenue storm, Fallsview Boulevard and Muddy
Run high rate treatment. The program expenditures will be funded from Roads, Storm Sewer,
Sanitary Sewer, Water, other funding, and new borrowing. Some of the new projects include
Dorchester Road, Drummond Road, Portage Road, and Muddy Run reconstruction, Beaverdams
Road, Kalar Road, and Garner Neighbourhood pump station. Also included are the annual programs
such as asphalt overlay, vehicle replacement, sidewalk construction, watermain replacement, and
combined sewer separation.
Parks, Recreation and Culture
The 2005 Parks, Recreation and Culture major project is the Community Centre, which will be
funded from the YMCA, Community fund-raising, Provincial grant, and new borrowing. Other
significant projects include the Beautification Projects, Kalar Road Girls Home for Soccer,
Chippa~va/Willoughby Memorial Community Park, and Garner Neighbourhood Park and Trail.
Niagara Fails Transit
The 2005 Niagara Falls Transit capital program purchases two new transit buses and is funded from
general purposes, development charges, provincial grant and new borrowing.
Niagara Falls Public Library
The 2005 Niagara Falls Public Library capital program projects that focus on books, materials and
equipment for the new south-west facility and is being funded from general purposes, reserves,
development charges, and new borrowing.
SUMMARY
This report is intended to inform Council of the various factors that will impact the 2005 Capital
Projects Budget. This report will also serve as the starting point in which Council's direction on any
of the above issues will be addressed and included as part of the final budget presented on December
6, 2004.
Recommended and Approved by: Respectfully submitted:
Ravenda xlL/~~'- John MacDonald
T.
Executive Director of Corporate Services~"' Chief Administrative Officer
Corporate Services Department CPS-2004-05
Human Resources Tony Ravenda
4310 Queen Street Executive Director
The City of ~1~ P.O. Box 1023
Niogoro Follstlk Niagara Falls, ON L2E 6X5
CQFi~Q ~. web site: www.city.niagarafalls.on.ca
~ I -- Tel: (905) 356-7521
Fax: (905) 356-2016
E-mail: travenda@city.niagarafalls.on.ca
September 20, 2004
Alderman Wayne Campbell, Chair
and Members of the Corporate Services Committee
City of Niagara Falls, Ontario
Members:
Re: CPS-2004-05 - 2005 Municipal Utility Budget Discussion
RECOMMENDATION:
For the information of the Corporate Services Committee.
BACKGROUND:
The 2005 budget process will include several discussions as outlined in the 2005 Budget Schedule.
A final budget review and approval of the water sewer rates will occur on December 6.
BUDGET ISSUES
REVENUES
CONSUMPTION RATES
The water and sanitary sewer consumption rates £und the expenditures from the Region for water
filtration and sewer treatment.
The water consumption rate is calculated by dividing the total water cost from the Region by the
quantity of water billed to ratepayers. Since 2001, when water metering was implemented for the
residential sector, the water consumption rate has increased from $0.410 per cubic meter to $0.514.
This increase of approximately $0.104 per cubic meter matches the increased unit cost of water
supply from the Region.
Working Together to Serve Our Community
Clerk's · Finance Human Resources Information Systems Legal Planning & Development
September 20, 2004 - 2 - CPS.2004-05
The sewer consumption rate is calculated by dividing the total sewer treatment cost from the Region
by the quantity of water billed to ratepayers where sewer services are provided (some customers in
the City do not receive sewer service). Since 2001, the consumption rate has increased from $0.806
per cubic meter to $0.891. This increase of approximately $.085 per cubic meter is greater than the
increased unit cost of sewer treatment from the Region. The difference may be the result of larger
quantities of sewer treated compared to smaller quantities of water billed.
SERVICE RATES
Service Rates fund the costs to maintain the waterworks and sanitary sewer systems. These costs
are primarily a maintenance function (hard services), but such items as billing and collection (soft
services) are included. Both Water and Sewer service rates are calculated by dividing the total costs
by the number of water meters. Since 2001, the combined service rate for the residential sector has
increased from $21.37 per month to $29.83. This increase has resulted from regular operating
maintenance cost, but more so, from the annual increase in contribution to capital works.
REFUND OF REGIONAL SEWER TREATMENT COSTS
Staff has prepared Report CPS-2004-02, Sewer Consumption Rate Refund, for Council's
consideration. This issue is separate from the Municipal Budget discussion, unless Council directs
otherwise.
EXPENDITURES
WAGES AND BENEFITS
As of December 31,2004, a three-year agreement with the Canadian Union of Public Employees,
Local 133, will expire. Staff is using the approved 2004 salary/wage rates in the 2005 Budget.
Staff is examining the costs for employee benefit plans and statutory contributions. Premium costs
for benefit plans have increased effective September 1,2004 for a one-year period. Canada Pension
Plan contributions and Employment Insurance contributions may increase from rate increments and
salary/wage adjustments. During 2004, OMERS pension contributions had a significant increase,
due to the return to the full contribution requirements. OMERS contributions for 2005 will only
increase in relation to salary/wage adjustments.
DEBT PRINCIPAL AND INTEREST PAYMENTS
The 2005 charges for the payments of interest and principal are expected to remain stable due to no
change in debt commitment during the past year. h~ the capital program, should any of the water and
sanitary sewer projects require debt financing, the servicing of the new debt will begin in 2006.
MATERIALS
The materials budget includes the estimated costs for the purchases of supplies, small equipment and
services. Staff anticipates that there will be a general increase of 2.7% in this expense.
September 20, 2004 - 3 - CPS-2004-05
CONTRACTED SERVICES
Services purchased from external suppliers and contractors are recorded in the Contracted Services
Budget. The principal supplier is the Region of Niagara for water filtration and sewage treatment.
Staff has been advised that the Region expects the rate per cubic meter to be increased by 10% for
water supply and 5% for sewage treatment.
RENTS AND FINANCIAL
The billing and receipting services, provided by Niagara Falls Hydro, will continue to be paid on a
full cost recovery basis. Staff is currently reviewing the services provided and the costs associated
with the billing and receipting services done by Niagara Falls Hydro. The Rents and Financial
budget sheet also makes provision for Audit Fees, Advertising, the Sewer Rebate Program and the
Low-Income Seniors Water Rebate Program. Staffanticipates that a general increase of 3% will
occur for this expenditure.
TRANSFER TO OWN FUNDS
Transfer to Own Funds includes transfers to reserves and Contribution to Capital Projects. These
Transfers provide funding for waterworks and sanitary sewer system infrastructure construction and
maintenance. Staff is including a 15% increase in consideration of City Council's new strategy to
increase the amount of expenditures for the rehabilitation of both water and sanitary sewer systems.
SUMMARY
This report is intended to inform Council of the various factors that will impact the 2005 Municipal
Utility Budget. This report will also serve as the starting point in which Council's direction on any
of the above factors will be addressed and included as part of the final utility budget presented on
December 6, 2004.
Recommended and Approved by: Respectfully submitted:
T. Ravenda
Executive Director of Corporate Services Chief Administrative Officer