The City of Toronto s Long-Term Financial Direction

Transcription

1 The City of Toronto s Long-Term Financial Direction

2 Introduction The City has been able to achieve balanced budgets on an annual basis, despite underlying concerns regarding sustainability. The staff report: reviews the expense and revenue patterns of recent budgets provides early/basic forecasts of future expense pressures and revenue performance outlines a series of principles and directions to ensure long-term financial stability. Circumstances of the recent past have been uniquely favourable. Trends do not form a reliable basis for future fiscal planning. Changes in both expense and revenue management are likely to be required. 2

3 City Governance City Council has direct control of 43% of the Budget Direct City Control, 5,026.2, 43% $11.8 Billion Debt Charges, 486.7, 4% Agencies (Indirect), 3,498.5, 30% Provincially Funded (Cost Shared), 2,743.0, 23% 3

4 $Billions Expenditure Growth in Operating Budget Base vs. New/Enhanced $14 $12 $10 $8 $6 $4 $2 $ Nominal $ Base New/Enhanced 4

5 Change in Gross Expenditures to % 6.0% average annual growth 10% 9.9% 8% 6.9% 6.9% 2.3% average annual growth 6% 4.8% 4.7% 4% 2% 2.6% 2.4% 1.6% 1.9% 3.1% 2.5% 2.5% 0%

6 Gross Expenditure Per Resident (Adjusted for inflation & population) $4,500 $4,000 $4,291 $4,222 $4,168 $4,139 $4,123 $4,133 $4,126 City Operations, Agencies, & Corp Acc $3,500 $3,000 $1,355 $1,354 $1,341 $1,312 $1,305 $1,289 $1,297 Health & Social Services $2,500 $1,190 $1,118 $1,080 $1,054 $1,001 $977 $963 Emergency Services $2,000 $1,500 $626 $612 $608 $602 $627 $643 $622 TTC $1,000 $612 $618 $604 $627 $631 $652 $653 $500 $0 $508 $520 $536 $544 $558 $572 $ Water, Waste, & Parking 6

7 Budget Overall Expenses for 2010 to 2016 (Adjusted for Inflation) 30.0% Budget Overall Expense Increase to 2016 (Real $'s) 25.0% 23.9% 20.0% 15.0% 13.7% 10.0% 5.0% 4.6% 5.8% 1.2% 0.0% (5.0%) (10.0%) (15.0%) (13.8%) (20.0%) 2016 Expense ($ millions) Rate Programs Debt/CFC Emergency Services TTC Other Cost Shared $1,684 $722 $1,772 $1,860 $2,972 $2,743 7

8 Budget Overall Revenues for 2010 to 2016 (Adjusted for Inflation) 150.0% 167.2% 130.0% 110.0% 90.0% 70.0% 50.0% 30.0% 10.0% 23.9% 17.7% 9.0% (10.0%) (30.0%) 2016 Expense ($ millions) (4.4%) Rate Programs Upload MLTT TTC - Fare/Ridership User Fees, Licenses, Permits (4.8%) (4.9%) Property Tax Increase Assessment Growth (18.2%) (19.1%) Government Transfers $1,684 $251 $527 $1,249 $609 $3,931 N/A $1,865 $1,639 Other 8

9 Total Annual Capital Budget 2010 to ,500 3,000 2,500 3, , ,037 2, ,814 2, , ,000 1,500 1,000 2,431 2,016 2,338 2,273 2,212 2,000 2, Tax Supported Rate Supported Total City 9

10 Summary of Unmet Capital Needs ($M) Major Unmet Capital Needs ($Million) Unmet Need Priorities (Tier 1 Projects, TCHC & Waterfront 2.0) TCHC Province/Federal Share of $2.6 billion requirement 1,728 TCHC Capital Maintenance 650 TCHC Revitilization Projects 356 Less Prov Grant on Energy Retro Fit -29 SOGR Backlog to 2% of Asset Value (Exc.TCHC) 1,046 TTC Board Approved Unfunded 2,679 SSHA (George Street Revitalization) 480 Long Term Homes Care Services 246 Other City Priorities 1,318 Lower Don Flood Protection 975 Waterfront Land Servicing (EBF, WDL and Keating) 150 Waterfront Public Realm Initiatives 350 Less Waterfront DCS/Federal & Provincial Funding -1,125 Unfunded Projects from Environmental Assessments 2,000 Tier 2 Unmet Need Priorities TTC Future Capital Needs 2,323 Other Programs 597 Unfunded Transit Expansion Initiatives All Unfunded Transit Expansion Initiatives 15,300 (Preliminary - Pre-Design Estimates) Total of Unfunded Capital Projects ($Million) 29,043 10

11 Projected Incremental Base Expense Growth ($M) 2017 to Base Operations Rate Programs Base Capital Financing Annualizations 11

12 Projected Incremental Debt Charge Growth for Unmet Capital Needs ($M) to

13 Projected Incremental Revenue Growth ($M) 2017 to (60) (59) (9) (20) (16) Assessment Growth Property Tax Increase - 2% MLTT Fed/Provincial Grants Rate Programs Other Revenue Changes City Building Fund 13

14 Incremental Revenue Growth 2010 to 2016 (budgeted) and 2017 to 2021 (projected) $M

15 Projected Cumulative Net Pressures ($M) 2017 to (200) (400) (600) (483) (800) (681) (773) (1,000) (1,200) (929) (1,022) 15

16 Expense and Revenue vs. Prior Six Year Average ($M) Expense Forecast Revenue Forecast Gross Exp Increase per Prior 6 Yr Avg 16

17 2017 Operating Pressures 17

18 Potential Shortcuts to Balance the Budget Provincial or federal government funding for capital projects Continued gains from the Municipal Land Transfer Tax Drawn down reserve funds Manage down surpluses Lower capital from current financing. 19

19 Next Steps The report recommends that staff report back by the end of the year with approaches to strengthen financial planning, decision-making and oversight, including: Strategies and processes to improve integration between program and financial planning A multi-year expenditure management plan A multi-year revenue strategy. Staff are scheduled to report back to Executive Committee on revenue options in June

20 Appendix 21

21 City Governance City Council has direct control of 23% of the Budget Direct City Control, 901.3, 23% Agencies (Indirect), 1,821.6, 46% Debt Charges, 463.4, 12% City Tax Levy $3.9 Billion Provincially Funded (Cost Shared), 744.9, 19% 21

22 Budget Overall Expenses for 2010 to % Budget Overall Expense Increase to % 39.0% 30.0% 20.0% 23.9% 16.3% 17.4% 18.7% 27.6% 13.7% 13.6% 10.0% 0.0% (10.0%) 4.6% 5.8% (1.8%) (0.7%) 6.8% 1.2% (4.9%) (3.3%) (20.0%) (13.8%) (19.1%) (30.0%) Rate Programs Debt/CFC Emergency Services TTC Other Cost Shared 2016 Expense $1,684 $722 $1,772 $1,860 $2,972 $2,743 Unadjusted Real Real Per Capita 22

23 Budget Overall Revenues for 2010 to % Budget Revenue Changes to % 150.0% 199.8% 167.2% 151.0% 100.0% 50.0% 0.0% (50.0%) 2016 Expense ($ millions) 39.0% 23.9% 16.3% 7.3% (4.4%) (10.2%) 32.1% 17.7% 10.5% Rate Programs Upload MLTT TTC - Fare/Ridership 22.3% 9.0% 2.4% User Fees, Licenses, Permits 6.8% 6.7% (4.8%) (4.9%) (10.6%) (10.7%) Property Tax Increase Assessment Growth (8.2%) (9.2%) (18.2%) (23.2%) (19.1%) Government Transfers $1,684 $251 $527 $1,249 $609 $3,931 N/A $1,865 $1,639 Unadjusted Real Real per Capita Other 23 (24.0%)

24 Projected Incremental Net Pressures ($M) 2017 to (100) (200) (300) (199) (92) (156) (93) (400) (500) (483) (600) 24

25 Reserves per Capita Comparison Reserves per capita (December 31, 2014) 3,500 Average of the rest of the GTA $2,806 3,000 2,500 Overall Average $1,868 2,000 1,500 $1,281 1, Toronto City Durham R.M. York R.M. Peel R.M. Halton R.M. Ottawa City Hamilton City Waterloo R.M. London City Windsor City 25

26 Unfinanced Debt Capital from 2006 to 2015* 1,200,000 1,000, , , , , Trsf to Operating Trsf to Reserve Budgeted but Unissued Debt *Note: 2015 is a preliminary number and subject to change 26