Welcome to the
Town of Olds
2015 Budget Review
For: Town of Olds Open House
Date: December 01, 2014 1
2015 Budget Outline
2
The Annual Budget is made up of three components:
• The 2015 Operating Budget which is presented to Council for approval,
• The 2015 Capital Budget which is presented to Council for approval, and
• The Multi-Year Capital Plan (MYCP) which is presented for information
2015 Budget Outline
3
Council will give final
consideration to the 2015
Operating and Capital Budgets
at their regular Council Meeting
on Monday December 8th, 2014
at 1:00 p.m.
2015 Budget Outline
4
The 2015 budget will be
revisited in the spring of 2015
once the 2014 year end has
been completed and the final
assessment numbers are
known for tax purposes.
2015 Budget Outline
5
Property tax rates are not set at this time.
The property tax rates for 2015 will be set in the spring when
Council has all of the information they require in order
to set the tax rates.
2014 Reflection
6
The beginning of the 2015 budget process
signals that the end of calendar year 2014 is
soon upon us.
A review of a few of the projects budgeted
for 2014 allows us to paint a positive and
progressive picture for the Town of Olds.
2014 Reflection
7
Some of the 2014 Capital projects included: Work was done in the Aquatic Centre to refinish the floors
and replace the lockers! In the Recreation Complex work
was done on the exterior doors and part of the parking lot
was paved.
2014 Reflection
8
Improvements were made to Town streets, sidewalks,
lighting and the water and sewer systems!
2014 Reflection
9
Porta potties
were added to
the parks and
enclosed in
permanent
concrete
structures!
2014 Reflection
10
Operations leased a new grader to use for grading
alleys and plowing snow!
2014 Reflection
11
A new fire truck was purchased in cooperation with the Mountain View Fire Commission! The truck is currently being fabricated and will be delivered early in 2015.
2014 Reflection
12
A new, larger
Sunshine Bus was
purchased in 2014
that enables the bus
to self lower and
raise for improved
wheelchair
accessibility.
Capital Plan
13
2015
Capital 2015
14
A thorough review of planned projects for 2015 was undertaken, and only those projects that were determined to be realistic for completion in 2015 were considered.
The proposed capital budget for 2015 is $4,687,570
Capital 2015 cont’d...
15
The proposed capital budget for 2015 is grouped into the following types of projects:
Roads, Trails & Street Improvement Projects $1.36 M
Water & Sewer Infrastructure $1.95 M
Recreation & Parks Projects $0.40 M
Vehicles & Other Equipment $0.43 M
Building Upgrades (Admin/Complex) $0.52 M
Capital 2015 cont’d…
16
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
Town of Olds Capital Spending
2011 Actual (4.3)
2012 Actual (5.9)
2013 Actual (3.9)
2013 Contributed (5.9)
2014 Budget (4.5)
2015 Budget (4.7)
Capital Grants
17
Provincial Grants Amount
Municipality Sustainability Initiative (MSI)
MSI not used in 2014
$2,186,000
241,000
Total Provincial: Capital $2,427,000
Federal Grants Amount
Federal Gas Tax Fund (FGTF)
FGTF not used in 2014
$463,000
60,000
Total Federal: Capital $523,000
Multi-Year
Capital Plan
18
2016 - 2025
Multi-Year Capital Plan
19
It is a requirement of some of the
grant programs that a 10-year
Capital Plan be prepared and
approved each year.
Multi-Year Capital Plan
20
Administration has reviewed the
anticipated future Capital needs of
the Town and has tried to predict
third party funding, grant funding
revenue, the need for debenture
funding, draws from Town reserves
or future tax requirements.
Multi-Year Capital Plan cont’d…
21
The Multi-Year
Capital Budget for
2016 – 2025 is
$80.5 million
Multi-Year Capital Plan cont’d…
22
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Capital Spending
Town of Olds Long Term Capital Plan
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
Multi-Year Capital Plan cont’d…
23
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
Long Term Capital Funding
Town of Olds Funding for Capital Plan
Grants
Debentures
Operations - Utilities
Reserves
Other
Operations - Tax
Sale of Assets
Operating Budget
2015
24
Municipal Assessment and Taxes
2015 Assessment
25
The 2015 budget is based upon preliminary assessment estimates.
• The value of the property for 2015 property tax purposes is the value as determined on July 1, 2014,
• Modification to the assessed value of each property will be made to reflect the condition of the property as of December 31, 2014
2015 preliminary Assessment
26
Based upon the preliminary information
provided by our assessor for budgeting
purposes,
The current 2015 assessment estimate is:
2015 2014
Residential 6.5% 1.8%
Non-residential -0.38% 8.1%
Average 5.1% 3.1%
2015 preliminary Assessment
27
Tax Rates
The amended 2014 Operating budget as approved April 28, 2014 included a 3% municipal tax rate increase in order to cover the costs of snow removal as required by the unusual weather. For 2015 it is anticipated that the 3% increase for snow removal will no longer be required. The proposed municipal tax rates for 2015 are as follows:
2015 2014 2013
Residential 5.5432 5.7095 5.5432
Non-residential 7.5835 7.8110 7.5835
2015 preliminary Assessment
28
Using these tax rates the budgeted tax revenue is as shown below:
2015 2014 2013
Residential 5,620,583 5,288,209 5,222,273
- Snow Levy 158,651
5,446,860
Non-residential 2,132,336 2,141,804 2,098,369
- Snow Levy 64,523
2,206,057 z
7,752,919 7,652,917 7,320,642
Using a 0% tax increase and removing the 3% snow levy, the preliminary assessment figures indicate an approximate $322,906 increase in 2015 municipal tax revenue
Municipal Tax Revenue
29
6,200,000
6,400,000
6,600,000
6,800,000
7,000,000
7,200,000
7,400,000
7,600,000
7,800,000
Tax Revenue Comparison
2011 Actual (6.8)
2012 Actual (7.2)
2013 Actual (7.3)
2014 Budget (7.7)
2015 Budget (7.8)
2015 Operating
Budget
30
Overview
2015 Operating Budget
31
Numerous pressures and
projects had to be
considered in the
development of the 2015
draft budget.
Total Operating Budget 2015
32
Even with the new projects and the pressures the Town expects that
it will be facing...
This first Draft Operating Budget for 2015 presented today is
BALANCED with NO proposed tax increase.
Total Operating Budget 2015
33
Between now and when the property
tax rates are set in the spring, if it is
necessary for Council to address
any additional projects or pressures
that arise, this will change the
proposed budget and might change
the tax situation.
Operating Budget 2015
34
• The net increase in both Revenue & Expense for 2015 over 2014 is $1,099,134 (of which $595,102 is utilities).
• This includes a 4% ($141,782) increase in the Alberta School Foundation and Mountain View Seniors requisition which affects both revenue and expense.
2014 2015 Increase
Revenue 24,274,775 25,373,909 4.5%
Expense 24,274,775 25,373,909 4.5%
Net 0 0
Total Operating Budget 2015
35
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
LegislativeServices
GeneralGovernment
Policing &Emergency
Services
PublicWorks &Planning
Utilities SocialDevelop &
CommServices
Recreation &Parks
CulturalPrograms
2015 Operating Budget Expenditures Comparisons
2013
2014
2015
*Excluding Requisitions*
2015 Operating
Budget
36
Utilities
Utilities Operating Budget
37
• The Utilities (Environmental Services)
Operating Budget consists of budgets for
the provision of water, wastewater, storm
water and solid waste services.
• The Utilities Operating Budget of
$7,854,580 (2014 – $7,259,478) is funded
solely through the sale and collection of
revenue for services provided.
2014 Utilities Water and Wastewater
38
• Mountain View Regional Water Services Commission has informed the Town of Olds that the rates charged to the Town will increase by $0.05 per cu m on April 1, 2015. This increased cost of water will require that the water variable rate charged by the Town also increase.
• The Town of Olds is currently sending 2,000 cu m per day to the South Red Deer Regional Wastewater Commission treatment facilities in Red Deer for treatment. The Commission is forecasting that this volume will increase to 4,000 cu m per day as of July 1, 2015. It is projected that this change will increase the cost of wastewater treatment by $625,600. This will require an additional rate increase of $0.45 per cu m.
• This draft budget does not anticipate any increases to the fixed rates for water or wastewater.
2014 Utilities Cont’d… Solid Waste
39
• Mountain View Regional Waste Management Commission has informed the Town that tipping and handling fees will increase as of January 1, 2015. It is anticipated these increases will cost the Town an estimated $206,270. This will require a solid waste rate increase of $4.44 per month.
• In addition, Mountain View Regional Waste Management Commission is anticipating requisitioning the Town with a special levy of $212,775. If this levy is applied directly to the monthly utility invoice it would mean an increase of $5.45 per month for each utility account.
• This does not take into account any changes from the current schedule of picking up bins on a three week cycle. Any changes to that schedule would increase the cost to the Town and to the customers.
Residential Utility Rates
40
RESIDENTIAL UTILITY RATES Proposed Proposed
2010 2011 2012 April 1,
2013 April 1,
2014 Jan 1,
2015 April 1,
2015
Sewer Flat Rate 10.08 10.08 10.42 10.42 10.42 10.42 10.42
Sewer Variable Rate Residential 1.48 1.48 1.48 2.78 2.78 2.78 2.78
Commercial 1.93 1.93 1.93 3.23 3.23 3.23 3.23
Water Flat Rate 9.54 9.54 9.86 9.86 9.86 9.86 9.86
Water Variable Rate 2.31 2.51 2.51 2.61 2.66 2.66 2.71
Solid Waste 18.87 18.87 18.87 19.30 19.30 23.74 23.74
Blue bin 2.00 2.00 3.50 3.50 3.50
Average Residence 5 m3 57.44 58.44 61.10 68.53 70.28 74.72 74.97
Average Residence 9 m3 72.6 74.4 77.06 90.09 92.04 96.48 96.93
Average Residence 20 m3 114.29 118.29 120.95 149.38 151.88 156.32 157.32
41
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
Water, Wastewater & Solid Waste
2011 Actual (4.1) 2012 Actual (4.5) 2013 Actual (6.3) 2014 Budget (7.2) 2015 Budget (7.8)
2015 Utilities Cont’d…..
Operating Budget (excluding Utilities)
42
2015
43
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
Operations Spending (excl. Amortization)
Town of Olds Operations (excl Utilities)
2010 Actual (8.9)
2011 Actual (9.0)
2012 Actual (9.7)
2013 Acutal (11.3)
2014 Budget (11.6)
2015 Budget (11.8)
44
Legislative Services 2.2%
General Government 21.2%
Policing & Emergency Services 19.0%
Public Works & Planning 19.2%
Social Develop & Comm Services
8.4%
Recreation & Parks 25.0%
Cultural Programs 4.9%
2015 Operating Budget Expenditures (excl. Utilities)
2015 Operating Budget By Spending Programs
(excluding Utilities and Requisitions)
45
-
500,000.00
1,000,000.00
1,500,000.00
2,000,000.00
2,500,000.00
3,000,000.00
3,500,000.00
LegislativeServices
GeneralGovernment
Policing &Emergency
Services
Public Works &Planning
Social Develop& CommServices
Recreation &Parks
CulturalPrograms
2013
2014
2015
Operating Grants
46
Operating Grants Amount
(FCSS): Family, Community and Support
Services
$162,780
MSI Operating: Municipal Sustainability
Initiative – Operating
$76,150
MPAG: Municipal Policing Assistance Grant $268,090
New Police Officers Grant $100,000
Total Operating Grants $607,020
Operating Grants Cont’d…
47
County Contributions Amount
Recreation Funding – Aquatic Centre $149,960
Recreation Funding – Sportsplex $150,000
Recreation Funding – Library $28,360
FCSS Funding $38,556
Total County Contributions $366,876
2015 Draft
Operating & Capital Budgets
48
AS PRESENTED:
Capital Budget 2015 $ 4,687,570
Operating Budget 2015
$25,373,909
Amortization
49
2015
2015 Amortization
50
Public Accounting Sector Board
(PSAB) Section 3150 requires all
governments to report Tangible
Capital Assets (TCA) on their
Statement of Financial Position (Balance
Sheet) and requires that the assets be
amortized over a reasonable life span
(Depreciation).
Capital Asset Policy #202C
51
The Town’s Capital Asset Policy states:
“Annual amortization expense shall
be estimated and included in the
Annual Budget of each respective
operating department and shall be
financed.......to finance future
replacements and betterments of
tangible capital assets.......”
Amortization Cont’d…
52
• Amortization is the process of recognizing the loss in the value of the capital assets owned by the Town of Olds as those assets age.
• Part of the purpose of recognizing the loss in the value of the capital assets is to provide the actual dollar value that must be set aside in order to be able to replace assets as they reach the end of their useful life.
• The funds that are set aside can then be used when it is time to replace assets
Amortization Cont’d…
53
• For 2015 the amortization will be in the range of $3.0± million (2013 - $2.5 million).
• $439,700 is the amount in the budget to be set aside for amortization.
• In 2015 the total capital budget is $4,687,570. Of this total, $923,120 is being budgeted from operations to replace older assets.
• $751,810 is the budget amount of the principal and interest payments for the current outstanding loans used to build new asset additions.
• Potential unfunded amortization can be calculated in different ways.
54
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
TCA Carrying Value
Town of Olds
2008 ($46.7 million)
2009 ($49.4 million)
2010 ($55.7 million)
2011 ($57.6 million)
2012 ($61.0 million)
2013 ($67.9 million)
Additional Charts
Debt, Equity in TCA,
Reserves, etc.
55
56
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
14,000,000
16,000,000
18,000,000
Total Debt
Town of Olds Total Debt
2008 Actual (5.7)
2009 Actual (5.2)
2010 Actual (5.6)
2011 Actual (7.5)
2012 Actual (13.4)
2013 Actual (12.4)
2014 Projected (17.9)
57
-
10,000,000.00
20,000,000.00
30,000,000.00
40,000,000.00
50,000,000.00
60,000,000.00
Equity in TCA (carrying value minus total debt)
2008
2009
2010
2011
2012
2013
58
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
Accum Amort Net Debt Equity in TCA
Town of Olds
Tangible Capital Assets
59
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
Reserves
Town of Olds Reserves
2008 Actual (4.4)
2009 Actual (5.8)
2010 Actual (6.4)
2011 Actual (5.9)
2012 Actual (5.8)
2013 Actual (6.5)
60
Town of Olds
(10,000,000.00)
-
10,000,000.00
20,000,000.00
30,000,000.00
40,000,000.00
50,000,000.00
60,000,000.00
70,000,000.00
80,000,000.00
2009 2010 2011 2012 2013
Accumulated Surplus Breakdown
Equity in TCA
Reserves
Unrestricted Surplus
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