The 2020 Budget season starts with the revelation of the Capital Budget, and 10-year Capital Forecast. On Wednesday October 23, council will hear the presentation from staff, and then they will hear from the people. So what does the capital financial picture look like for 2020 and beyond?
Note: If you want to register as a delegate for any of these items on the Committee agenda, then you have to get in touch with the City Clerk’s office by 10 am on Friday October 18.
CS-2019-79 2020-2029 Capital Budget and Forecast – The proposed Capital Budget for 2020 is $151.6 million, and if that sounds big, it is. It represents a 75 per cent increase over 2019, and according to the staff report, it’s being “driven by a number of large life-cycle projects and an overall increase in the level of investment in infrastructure renewal across the organization.”
So how does this break down? This biggest piece of the pie will go to Water Services with $49.8 million followed by $29.2 million for transportation systems, $24.4 million for Wastewater, $17.2 for corporate projects, and $12 million for Open Spaces, Recreation Culture and Library. The rest of the budget goes to Stormwater management ($7.67 million), Emergency services ($5.4 million), contaminated sites ($3.75 million), and Solid Waste Services ($2.2 million).
The expected impact on the 2021 operating budget of these projects comes out to $454,710 due to the need to hire seasonal staff, maintenance, and software licensing and services.
Looking ahead to 2029, the City is forecasting spending in the amount of $1.9 billion over the next decade. According to the staff report, these projects represent enhancement to the City’s current service levels, and meeting the priorities set out by the Strategic Plan. Staff warns that deferring from what’s outlined in their plan could mean “significant impacts” on council’s vision, and it could make other aspects of the plan not viable if the timing gets shifted on certain projects.
Why is that important to note?
It’s because the report also says that the total 10-year short fall for the budget is $52.1 million, which translates into $5.2 million per year, or a net tax levy impact of 2.19 per cent, and yes, that includes the 0.86 per cent endorsed by council last month to fund the construction of the new main library. Staff is recommending that council phase an additional levy of 2.19 per cent over three years, starting with 0.73 per cent for the 2020 budget year. Staff are also recommending a levy of 0.5 per cent for a tax-supported Growth Funding Strategy to be phased in over five years.
Is there a chance that the City will get outside grant money from other levels of government. The budget does take that into account with “funding programs that the City is reasonably assured of receiving or have already received on a one-time basis,” like the doubling of the Federal Gas Tax allocation, and the Investing in Canada Infrastructure Program: Public Transit Stream (ICIP: PTS).
In terms of funding sources, 39 per cent of the 10-year forecast comes from tax funding, followed by 28 per cent from Development Charges (DCs), 23 per cent from rating funding, eight per cent from grants, and two per cent from other sources. The DCs are tricky because the City is still waiting for the exact specifications for the collection and allocation of the new Community Benefit Charges (CBCs), but staff predicted that those changes could blow a $155 million hole in the City’s 10-year plan.
Council will vote on the Capital Budget and Forecast at the Budget meeting on November 13; council will only vote to defer the recommendations at this meeting.