1111

Operating Budget – March 5, 2013

2

Council Budget Direction – April 2012

City will move to three year budget cycle City will hold tax increases to 3.25% or below for 2013,

2014, 2015 The City will engage the public in budget process

33

Budget Realities

To achieve a 3.25% annual tax increase for 2013 - 2015, the operating budget must be reduced by a minimum of $4.3M over the next 3 years.

These cuts must be ongoing permanent reductions, not one-time cuts.

These cuts are in addition to the significant cuts made over the past few years

The City has also been adding new inventory each year which increases operating costs, as well as the infrastructure burden (future costs to upgrade and replace).

44

Status Quo Not Sustainable

The status quo is not sustainable

To keep tax rate increases at a maximum of 3.25% per year:

• The operating budget must be reduced

• Services must be reviewed and resources shifted

• New revenue opportunities must be explored

• Management requires the flexibility to adapt to evolving needs and council priorities by shifting resources to areas with increasing needs

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Steps Taken since April 2012

Council Strategic planning & priorities for 2013-2015 Departments were given detailed instructions to zero base budgets,

and allowance for inflation was removed from all budgets Vacancy Management - Identification of vacant positions that will

not be filled Organizational Review to identify potential changes to structure and

how services are delivered Council undertook a process to develop their ideas for budget

containment and reductions Budget Principles developed and approved Council supported a list of 10 budget reduction strategies to take

forward to the public for input prior to making final decisions Consultation completed and presented to Council

66

77

88

Proposed Budget Reduction Strategies for 2013

In several Special Closed GPC sessions, Council developed a long list of ideas for budget containment / reductions. These were discussed and those items supported by the majority of Council were referred to staff for review and to prepare more detailed information for Council to consider.  

Council approved 10 budget reduction strategies for consideration in November. Council directed staff to inform the public of the reductions being considered and collect input prior to finalizing budgets.  

Of those 10 strategies, 5 would impact the 2013 budget

999

Proposed Budget Reduction Strategies for 2013

1. Limit Mayor and Council salary increases to 0% in 2013

2. Changing Council taxable remuneration

3. Limit Exempt staff salary increases to 0% in 2013

4. Limiting budget increases for library and police to 2%

5. Allocate 1.25% of 2013 tax increase to capital work to maintain City infrastructure

Totaling $979,200

9

101010

2013 Budget Balancing

Additions/ Reductions March 5, 2013

2013 Reduction Needed as per the 2012-2016 Financial Plan to Achieve a 3.25% tax increase 1,684,700

Additions / Reductions to dateForced Growth (Hydro, postage, fleet costs, WCB, LTD) 620,000 620,000 Increased insurance and claims 101,500 101,500 Departmental reductions (650,000) (650,000) Vacancy management (500,000) (500,000) Council meeting webcasting 40,000 40,000 Governance funding 15,000 15,000 Increased lease revenues (95,000) (95,000) Increased payments in lieu of taxes (293,000) (293,000)

(761,500) 923,200

Proposed Budget Reduction StrategiesLibrary additional increase (including building costs) 64,400 64,400 Police Department net budget reduction (503,600) (503,600) Capital property tax levy increase reduction to 1.25% (275,000) (275,000) No salary increases for Exempt (200,000) (200,000) No salary increases for Council (9,000) (9,000) Change Council Taxable Remuneration (56,000) (56,000)

(979,200) (979,200)

2013 Increase Explanation

Capital Property Tax Levy (1.25%) $1,355,000

Police Department 784,700

CUPE – 2013 Salary increase 650,000

Property Tax write-off increase 200,000

Greater Victoria Public Library 184,838

Property tax penalty revenue decrease 120,000

Council meeting webcasting 40,000

Governance Funding 15,000

Various other adjustments 168,214

3.25% Tax Increase $3,517,752

11

Recommendations

That Council approve the budget reductions for 2013:

• Limiting Mayor and Council salary increases to 0%following

• Changing Council taxable remuneration effective January 2013

• Limiting Exempt staff salary increases to 0%

• Allocating 1.25% of 2013 tax increase to capital work to maintain City infrastructure

13

Next Steps

March 5, 2013– Departmental Budget Presentations– 2013 Operating Budget approval in principle

March 7, 2013– 2014 to 2015 Operating Budget

March 8, 2013– Greater Victoria Public Library Budget Presentation– 2013 Capital Budget

April 2013– Public Budget meeting– Financial Plan and Tax Rate Bylaws preparation (adoption of bylaws

must be done before May 15th; the last regular Council meeting before this date is May 8th)

May 2013– Print and mail property tax notices (July 2nd due date)