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1. 2009 Proposed Budget Timetable, Process / 2009
Budget Directions and High-Level Fiscal Directions for 2010-2011 Calendrier budgétaire
proposé pour 2009 / Orientations budgétaires pour 2009 et orientations
générales pour 2010 et 2011 |
Committee RecommendationS as amended
That Council approve:
1. That
the 2009 draft budget be developed in accordance with the fiscal directions
adopted by Council during the 2008 budget process and in accordance with the
Fiscal Framework adopted in 2007;
2. That
the 2010 and 2011 drafts budgets be developed in accordance with the fiscal
directions as detailed in this report; and
3. That
the process and timetable for developing and approving the 2009 draft budget
and the 2010 and 2011 high level estimates be adopted as detailed in this
report.
4. That staff be directed to include, in the
2009 draft tax-supported budget, proposed options to cap the FTE total at
13,590.28 (the budgeted amount for 2008) and identify options to reduce the
total number to 13,090.28 excluding growth and related increases for front-line
Police, Fire and Paramedics to be achieved by December 31, 2009;
That these reduction options include the
introduction and investments of new technology and/or business process
reengineering;
That these cost reduction options also
include involuntary departures from the City of Ottawa; and
That the proposed growth of the Police,
Paramedic and Fire Service FTE be accommodated with an offsetting reduction as
part of the proposed reduction of 500 FTE's.
RecommandationS modifiÉes du comité
Que le Conseil approuve :
1.
Que
le budget provisoire pour 2009 soit élaboré conformément aux orientations
financières adoptées par le Conseil dans le cadre du processus budgétaire de
2008 et conformément au cadre financier adopté en 2007;
2.
Que
les budgets provisoires pour 2010 et 2011 soient élaborés conformément aux
orientations financières décries en détail dans le rapport; et
3. Que
le processus et le calendrier budgétaires prévus en vue de l’établissement et
de l’approbation du budget provisoire pour 2009 et des estimations générales
pour 2010 et 2011 soient adoptés de la façon prévue dans ce rapport.
4. Que
l’on enjoigne au personnel d’inclure, dans le budget préliminaire financé par
les taxes de 2009, les options proposées afin de limiter le total des ÉTP à 13
590,28 $ (montant prévu dans le budget pour 2008) et d’indiquer des
possibilités qui permettent de diminuer le montant total à 13 090,28, somme à
atteindre avant le 31 décembre 2009, et qui n’inclut pas l’expansion des services
de première ligne de police, des paramédics et des pompiers et les
augmentations connexes;
Que ces
possibilités de réduction des coûts comprennent l’introduction et les
investissements de technologie nouvelle et/ou la réorganisation des procédés
administratifs;
Que ces
possibilités de réduction des coûts comprennent également les départs
involontaires de la Ville d’Ottawa; et
Que
l’augmentation proposée des ÉTP dans les Services de police et de paramédics et
le Service des incendies soit compensée par une réduction faisant partie de la
réduction proposée de 500 ÉTP.
Documentation
1. City Treasurer’s report dated 2 June 2008 (ACS2008-CMR-FIN-0023).
2. Extract
of Draft Minutes 27, Corporate Services and Economic Development Committee
meeting of Tuesday, 17 June 2008.
Report to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services organisationnels
et du développement économique
and Council / et au Conseil
Submitted by/Soumis par : Marian Simulik, City
Treasurer/trésorière municipale
Contact
Person/Personne ressource: Tom Fedec
A/Manager Financial Planning/Planification financière
Financial Services/Services financiers
(613) 580-2424 x21316, tom.fedec@ottawa.ca
REPORT RECOMMENDATIONS
1.
That the Corporate Services and Economic Development
Committee (CSEDC) table this report on June 3, 2008 and then discuss it at its
June 17, 2008 meeting and then forward to City Council on June 25, 2008 for
consideration and approval;
2.
That the 2009 draft budget be developed in accordance
with the fiscal directions adopted by Council during the 2008 budget process
and in accordance with the Fiscal Framework adopted in 2007;
3.
That the 2010 and 2011 drafts budgets be developed in
accordance with the fiscal directions as detailed in this report; and
4.
That the process and timetable for developing and
approving the 2009 draft budget and the 2010 and 2011 high level estimates be
adopted as detailed in this report.
RECOMMANDATIONS DU RAPPORT
1.
Que
le Comité des services organisationnels et du développement économique (CSODE)
dépose le présent rapport le 3 juin 2008 et qu’il en discute au cours
de sa réunion du 17 juin 2008, avant de le soumettre au Conseil
municipal le 25 juin 2008, pour fins d’examen et d’approbation;
2.
Que
le budget provisoire pour 2009 soit élaboré conformément aux orientations
financières adoptées par le Conseil dans le cadre du processus budgétaire de
2008 et conformément au cadre financier adopté en 2007;
3.
Que
les budgets provisoires pour 2010 et 2011 soient élaborés conformément aux
orientations financières décries en détail dans le rapport; et
4.
Que
le processus et le calendrier budgétaires prévus en vue de l’établissement et
de l’approbation du budget provisoire pour 2009 et des estimations générales
pour 2010 et 2011 soient adoptés de la façon prévue dans ce rapport.
EXECUTIVE SUMMARY
The
purpose of this report is to seek Committee and Council re-confirmation of the
multi-year budget directions that were approved during the 2008 budget process
in order to proceed with the development of the 2009 budget and 2010-2011 high
level forecasts.
In
addition, the following timetable for adopting the 2009 budget is being
presented for Committee and Council consideration and approval.
|
2009 Budget Directions, High-Level Fiscal Direction
for 2010-2011, and Proposed Timetable and Process Report |
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Tabling - Corporate Services & Economic Development Committee |
June 3 |
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Public Consultation - Corporate Services & Economic Development
Committee |
June 17 |
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Council Consideration and Approval |
June 25 |
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Budget Presentation Format Report – submitted by Plamondon &
Associates
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Tabled with Council |
July 9 |
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Council Consideration and Approval |
Aug 28 |
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Budget Challenge Working Group
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Budget Working Group meetings |
Oct 13-24 |
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Report by Working Group to Council |
Nov 5 |
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Tabling
of 2009 Budget - Council |
Nov 5 |
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Public
Consultation |
Nov 5-28 |
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Committee
of the Whole / Council approval |
Dec 1-5 |
The
report also recommends the creation of a Budget Challenge Working Group composed of
three Councillors (supported by an external advisor) along with senior city
staff. The mandate of this Group would
be to conduct a rigorous review of the City’s budget prior
to the actual tabling with Council in November, including the following
elements:
The format and content of the
City’s budget is to be reviewed by Plamondon and Associates with a mandate to
investigate how the budget document can be improved in order to provide clear,
concise and comprehensible data needed by Councillors for decision making.
The projected pressures and offsets for 2009
are presented by the following categories along with an assessment of any risk
factors that are known at this time.
·
Cost
of maintaining existing services
·
Cost increases
in services shared with the Province
·
Growth
pressures
·
New
needs
·
User
fees
·
Transit
fares
·
Management
efficiencies
·
One-time
revenues
The budget direction
as established by Council for developing the 2009 draft operating budget will
require a 4.9% property tax revenue increase reflecting the 2.0% inflationary
increase for City operational purposes, a 1.9% increase for the Capital Tax
Levy and the 1.0% increase required to address the additional requirements for
policing services as outlined in their 2008 budget document. Other expenditure / revenue solutions ranging from $19-$57 million will
be required. The general principles
that will guide the process will be to develop options that minimize the
overall impact on City residents while still trying to respect Council’s term
priorities. Many of the options that
were presented during the 2008 budget process will again be included in the
options list.
The high level fiscal
directions, as approved by Council during the 2008 budget process, will be
utilized in the development of the operating forecasts for the 2010 and 2011
budget years.
The following
Council directions will be the basis for developing the 2009 capital budget and
9 year forecast:
1 - Capital Renewal Projects
a)
A
continuation of the Capital Levy for infrastructure renewal projects.
b)
Assign
additional funds to infrastructure that would shift from renewal to
replacement.
c)
Provide
a priority list of infrastructure renewal projects to Council with the draft
Budget.
2 - Growth related Capital
Projects
d)
Continue to use the current Development Charge funding
principles for determining when growth projects can proceed.
3 - Capital Strategic Initiative Projects
e)
Establish a funding envelope for undertaking capital
strategic initiatives over the next 3 years.
RÉSUMÉ
Le rapport que voici vise à obtenir une nouvelle confirmation de la part
du Comité et du Conseil en ce qui a trait aux orientations budgétaires
pluriannuelles approuvées dans le cadre du processus budgétaire de 2008, en vue
de l’établissement du budget pour 2009 et des prévisions générales pour 2010‑2011.
Par
ailleurs, le calendrier ci‑après, établi en vue de l’adoption du budget
de 2009 est soumis au Comité et au Conseil pour fins d’examen et d’approbation.
|
Orientations budgétaires de 2009, orientation
financière générale pour 2010‑2011 et calendrier et processus
budgétaires proposés |
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Dépôt – Comité des services
organisationnels et du développement économique |
3 juin |
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Consultation publique – Comité des
services organisationnels et du développement économique |
17 juin |
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Examen et approbation par le Conseil |
25 juin |
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Rapport sur le format du budget –
Plamondon ans Associates |
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Dépôt au Conseil |
9 juillet |
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Examen et approbation par le Conseil |
28 août |
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Groupe de travail sur l’examen critique du budget |
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Réunions du Groupe de travail sur l’examen
critique du budget |
13-24 oct. |
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Présentation d’un rapport du Groupe de
travail au Conseil |
5 nov. |
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Dépôt
du budget pour 2009 – Conseil |
5 nov. |
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Consultation
publique |
5-28 nov. |
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Approbation
par le Comité plénier / Conseil |
1-5 déc. |
Le
rapport recommande également la création d’un Groupe de travail sur l’examen
critique du budget formé de trois conseillers (et appuyé par un
conseiller externe), ainsi que de hauts fonctionnaires de la ville. Ce groupe aurait
le mandat d’effectuer un examen rigoureux du budget de la ville avant de
présenter celui‑ci au Conseil, en novembre. Il devrait, notamment,
examiner:
La firme Plamondon and Associates
examinera la présentation et le contenu du budget de la Ville afin de
déterminer les améliorations possibles pour en assurer la clarté, la concision
et la compréhension par les conseillers, en vue de la prise de décisions.
Les pressions et compensations prévues pour
2009 sont classées en fonction des catégories suivantes, tout comme l’évaluation
des facteurs de risque connus pour le moment :
·
coût
du maintien des services existants
·
augmentation du coût des services partagés avec la
province
·
tensions
sur le plan de la croissance
·
nouveaux
besoins
·
frais
d’utilisation
·
tarifs
de transport en commun
·
efficience
de la gestion
·
recettes
ponctuelles
L’orientation budgétaire prévue par le Conseil
pour l’établissement du budget de fonctionnement provisoire de 2009 exigera une
augmentation de 4,9 % des impôts fonciers, ce qui tient compte d’une augmentation
de 2,0 % du taux d’inflation aux fins des dépenses de fonctionnement de la
Ville, une augmentation de 1,9 % de l’impôt sur le capital et une
augmentation de 1,0 % nécessaire pour faire face aux besoins
supplémentaires en matière de services de police, tel qu’indiqué dans le
document budgétaire de 2008. D’autres mesures seront nécessaires sur le plan
des dépenses et des revenus; elles représentent entre 19 et
57 millions de dollars. Les principes généraux qui orienteront le
processus consisteront à trouver des options permettant de minimiser
l’incidence globale sur les résidents de la Ville tout en essayant de respecter
les priorités du Conseil. Bon nombre des options présentées dans le cadre du
processus budgétaire de 2008 seront incluses dans la liste d’options.
Les orientations financières générales
approuvées par le Conseil dans le cadre du processus budgétaire de 2008 seront
utilisées aux fins de l’établissement de prévisions pour les années budgétaires
2010 et 2011.
Les orientations suivantes du
Conseil constitueront le point de départ en vue de l’établissement du budget
des immobilisations et des prévisions pour une période de neuf ans:
1 – Projets de
modernisation du matériel
f)
Maintenir l’impôt sur le capital dans le cas des projets de renouvellement
de l’infrastructure.
g)
Attribuer des fonds supplémentaires à l’infrastructure pour passer du
renouvellement au remplacement.
h)
Établir une liste de priorités en ce qui a trait aux projets de
renouvellement de l’infrastructure et joindre cette liste au budget provisoire.
2 – Projets
d’immobilisations axés sur la croissance
i)
Continuer d’utiliser les principes actuels de
financement des redevances d’aménagement pour déterminer quels projets de
croissance devraient être réalisés.
3 – Projets
d’initiatives stratégiques d’investissement en capital
j)
Établir une enveloppe de financement pour
réaliser des initiatives stratégiques d’investissement en capital au cours des
trois prochaines années.
In the fall
of 2007 Council approved a Fiscal Framework, which set out the guiding
principles and financial targets the City should be moving towards in order to
become financially sustainable. The Local Government Association of Australia
has defined “financial sustainability” as:
"…a government's ability to manage its finances so it can meet its spending commitments, both now and in the future. It ensures future generations of taxpayers do not face an unmanageable bill for government services provided to the current generation."
The development of multi-year
operating budgets has been identified as a key element towards achieving this
objective. The Fiscal Framework document, as adopted by Council,
provided the foundation for the establishment of specific budget directions,
which were incorporated into the 2008 budget and into the development of the
2009-2010 high-level forecasts. The more
significant principles and targets incorporated into these forecasts included:
·
Follow a
financially sustainable budget by 2010
·
Develop a
tax policy that recognizes inflation beginning in 2008
·
One-time
sources of revenue are phased out within the term of Council
·
Recover 50%
of defined costs in transit with fares by 2010
·
Tax
increases not to exceed the rate of inflation in most years
·
Asset
maintenance gap to be gradually eliminated and assets fully sustained
thereafter.
The
purpose of this report is to seek Committee and Council re-confirmation of the
multi-year budget directions that were approved during the 2008 budget process
in order to proceed with the development of the 2009 budget and 2010-2011 high
level forecasts.
In
addition, the timetable for adopting the 2009 budget, along with changes to the
budget process is being presented for Committee and Council consideration and
approval.
DISCUSSION
Timetable
Given concerns raised by Councillors with the 2008
budget timetable, to avoid conflicts with the December holiday season, the
timetable for adopting the 2009 budget is proposed to be advanced by two weeks. This would result in final Council approval
of the tax supported budget during the week of December 1-5. The timetable and process presented in the
table below respects Council’s direction to:
|
2009 Budget Directions, High-Level Fiscal Direction for
2010-2011, and Proposed Timetable and Process Report |
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Tabling - Corporate Services & Economic Development Committee |
June 3 |
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Public Consultation - Corporate Services & Economic Development
Committee |
June 17 |
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Council Consideration and Approval |
June 25 |
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|
|
|
Budget Presentation Format Report – submitted by
Plamondon & Associates |
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Tabled with Council |
July 9 |
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Council Consideration and Approval |
Aug 28 |
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Budget Challenge Working Group
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Terms of Reference to Council |
Aug 28 |
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Budget Working Group meetings |
Oct 13-24 |
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Report by Working Group to Council |
Nov 5 |
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Tabling
of 2009 Budget - Council |
Nov 5 |
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Public
Consultations |
Nov 5-28 |
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Committee
of the Whole / Council approval |
Dec 1-5 |
Public
Consultation
Specific dates and places for the public consultation meetings will be
determined over the upcoming months after consultation with the
Councillors. It is proposed that these
meetings be run similar to the process followed for the 2008 budget. The consultation meetings would include
joint sessions with Councillors at various locations in the City, and sessions
with the Advisory Committees and/or Community groups. The provision of feedback mechanisms will be incorporated into
the consultation process. As in 2008, Councillors would still be able to
organize individual meetings but staff attendance would not be guaranteed.
Process Changes
A
number of process changes are being proposed for Committee and Council
consideration that are designed to allow Council to review budgetary estimates
and provide input to the development of the budget estimates prior to the
actual tabling of the budget documents in the fall.
Budget Challenge Working Group
One of the recommendations stemming from the 2008 review of financial
policies by the Long Range Financial Planning Sub-Committee (LRFPSC) was:
That the LRFPSC review, in detail, the
operating budgets of a minimum of four (4) Branches (ex: Transit, Surface
Operations, Public Health) in advance of the 2008 budget and for every budget
thereafter.
Due
to the limited time between the adoption of the 2008 directions report in late
September and the tabling of the 2008 budget on November 14, staff recommended
that these reviews be implemented and incorporated as part of the 2009 budget
process.
During the 2008 Operational
Budget Reviews for Administrative Services conducted earlier this year, members
of the LRFPSC determined that the 2009 budget process should include a rigorous
budget challenge function prior to tabling.
Consequently, the City has engaged the consulting firm of Plamondon and
Associates to make recommendations on the design and operation of a “Budget
Challenge Working Group”. The design
will be guided by consultations with Councillors and a review of best practices. It is envisioned that the terms of reference
for this working group will be to review the foundations of the City’s budget
including the following elements:
It
should be noted that the Working Group would have no mandate to make policy
decisions affecting the nature and extent of city programs. As directed by Council, the Strategic Branch
Review process will be used to determine what businesses the City should be in
and at what level of service.
The outcome of the budget challenge sessions will be to provide assurance to Council that the assumptions and funding requirements for the 2009 draft budget and forecasts for 2010 and 2011 have been subjected to a thorough review and represent the resources required to deliver the Council approved programs and services. The detailed review by the Working Group will also allow more time for Council to focus on setting priorities and selecting options. A secondary benefit of such a challenge function is that a more focused and streamlined budget document can be developed which will contain content and analysis required by Councillors. The process that is being undertaken to effect changes to the budget presentation and content is discussed in the next section of this report.
Subject to
the process design work to be conducted by Plamondon and Associates over the
August to September time period, it is expected that the membership of this
Working Group will be composed of three Councillors (supported by an external
advisor) along with senior city staff.
A report
with the Budget Working Group terms of reference and membership will be
provided for the August 28, 2008 Council meeting. Tentative timelines for conducting the challenge sessions is
projected to be in mid-October with the Working Group issuing a brief report to
Council noting its conclusions along with any recommendations.
Budget Format / Presentation Changes
At
over 1,000 pages in length, the City’s budget document can be an intimidating
document to review at a detailed level.
Although the budget documents and format were reviewed and substantially
revised in 2005, the need to obtain Councillor input on the usefulness of the
information contained in the documents and how it can be improved, is a
critical part of the continuous improvement process.
Plamondon and Associates
have been engaged to review the content of the budget documents in conjunction
with Councillor feedback and a review of best practices. In general terms, the project mandate is to
investigate how the budget document can be improved in order to provide clear,
concise and comprehensible data needed by Councillor for decision making. Through this process, it is possible that
the main 2009 budget document (before appendices) can be reduced to
approximately 100 pages.
The
results of these discussions and recommendations are to be tabled with Council
on July 9 with Council consideration and approval on August 28.
Rate
Supported – Draft Operating and Capital Budgets
As part of the multi-year
budget directions Council approved in 2007, the rate budget was separated from
the tax-supported budget and presented at a separate time.
A separate process was developed which resulted in the rate budgets
being tabled and approved during the first quarter of 2008. It is recommended that the same timelines be
followed for the 2009 process. A
separate report on the process, timetable and budget directions will be
presented to the Planning and Environment Committee for consideration and
approval later this summer.
2009 BUDGET DIRECTIONS
Overview
The
high level forecast for 2009 as originally presented and approved in the 2008
budget documents has been amended to reflect the impact of Council’s decisions
during the 2008 budget process. As can
be seen from the table below, the resulting level of options (revenue increases
or expenditure reductions) required to achieve Council’s direction has not
changed materially.
|
|
2009 Budget |
|
|
|
As per the 2008 Draft Budget ($millions) |
Revised During Deliberations ($millions) |
|
Costs Increases |
|
|
|
Maintain existing services |
45 |
42 |
|
Legislated services |
12 |
12 |
|
Expansion of service (growth) |
21 |
18 |
|
Capital rehabilitation to address Infrastructure gap |
20 |
20 |
|
New needs |
23 |
23 |
|
Elimination of previous year’s one-time revenues |
20 |
25 |
|
TOTAL |
141 |
140 |
|
|
|
|
|
Offsets |
|
|
|
Decreased costs from provincial uploads |
(7) |
(7) |
|
User fees and transit fares |
(8) |
(11) |
|
Management efficiencies |
(32) |
(30) |
|
One time revenues for current year |
(13) |
(13) |
|
Assessment growth |
(17) |
(19) |
|
Capital Levy |
(20) |
(20) |
|
Citywide operational inflationary tax increase |
(20) |
(21) |
|
TOTAL |
(117) |
(121) |
|
Options required to achieve Council direction |
24 |
19 |
This following section summarizes the financial
requirements stemming from the application of the budget directions as approved
by Council during the 2008 budget process for each category of expenditure and
revenue in order to guide the development of the 2009 budget. Potential risks and opportunities are also
identified in each of the categories that could create additional upward
pressures or downward relief on property taxes.
Staff are currently reviewing their respective
branch operating pressures and underlying assumptions for 2009 and the
2010-2011 forecast period to determine whether significant changes have
occurred to warrant changes to their budgetary requirements. The Budget Working Group, prior to tabling
of the draft budget document, will review these pressures in detail.
In addition, 2008 actual performance against budget
will be analyzed later in the year to determine whether expenditure or revenue
variances are of a one-time nature or whether they represent on-going base
adjustments that need to be reflected in the 2009 budget requirements. These adjustments would be part of the
review undertaken by the Budget Working Group prior to formal budget tabling.
Budget
Directions – 2009 Operating Budget
1.
Costs to
Maintain Existing Services
Council approved
direction - That all the costs to maintain existing services be included.
The
cost of maintaining existing services was estimated to increase by $42 million
in 2009 as a result of:
·
projected
contract settlements for City employees; and
·
inflation
on various goods and services such as energy, vehicle parts and contracts.
The
Budget Working Group would review these cost estimates in detail.
Areas of Risk:
Energy prices - The 2008 draft budget originally contained a
provision for diesel fuel at a price of $0.86 per litre with an increase of
$3.0 million (7.5%) built into the 2009 forecast. As part of establishing the 2008 tax rates, Council adjusted the
2008 diesel fuel budget by an additional $2.4 million bringing the budget to
$0.93 per litre. Every 1 cent increase in the price of diesel fuel results in a
$400,000 cost increase to the City.
Currently the May floating price for diesel fuel is
$1.1683 per litre while the estimated 6-month lock-in price (July to December)
is $1.3131 per litre. At this early
stage it is extremely difficult to predict what will happen with the price of
fuel in 2009. Predictions from market analysts vary from those projecting oil
at $200 per barrel in 2009 to those seeing oil prices declining to around $100
per barrel. For purposes of setting
budget direction an upper end price of
$1.15 per litre has been used resulting in an additional $6 million
being required for the diesel fuel budget.
The cost estimate to be used for 2009 will not be determined until the
fall.
In addition, rising energy costs will create cost
pressures for other goods and services that the City utilizes in the provision
of programs and services, in both the operating and capital budgets. These would include products such as steel
and chemicals that have a direct energy component in their manufacture along
with the associated transportation costs to deliver them to the City. Staff are reviewing how these energy impacts
are being reflected in current tenders for the procurement of various goods and
services to determine the cost implications for 2009.
Contract Settlements - The employees represented by
the Ottawa Firefighters Association have been without a contract since
2004. One of the major issues currently
in arbitration is the issue of retention pay based on years of service. Should the arbitrator rule in favour of
implementing retention pay for Ottawa firefighters, it is estimated that the
additional cost for 2009 could be in the range of $4.0 to $4.5 million.
Loss of Payments-in-Lieu of Taxation - As reported last year, the sale of Federal
government properties to the private sector could potentially result in the
loss of $4.0 million in education taxes.
Discussions are still ongoing with the provincial government to find a
resolution to this issue.
2. Cost
Increases in Services Shared With the Province
Council approved directions:
a) That the costs of maintaining
legislative and cost shared programs be included.
b)
As the Province uploads the cost of
services, the vacated tax room will be used first to address unsustainable
revenues built into the budget, second to fund an increased contribution to
capital and third, to reduce the impact of inflation on the city budget.
The costs associated with legislated / cost-shared
services are projected to increase by $12 million as a result of:
·
projected
contract settlements for City employees in these specific programs; and
·
rate
increases for Ontario Works recipients, Ontario Disability Support Program
caseload increases, additional requirements for Housing operations and rent
supplement programs.
The Budget Working Group would review these cost
increases in detail.
The Province announced in 2007 that it will upload
the costs of the Ontario Disability Support Program (ODSP) over a four period
beginning in 2008. Specific program
components are to be uploaded each year.
Based on the 2008 budget, the net tax requirement of $47 million is to
be phased out as follows:
2009 - $7 million
2010 - $21 million
2011 - $19 million
In the 2008 Council approved budget, $25 million in
one-time revenues were included. Per
Council direction to use vacated tax room (uploading) to first address
unsustainable revenues, the tax room create from the ODSP upload will be used
to reduce a significant portion of the 2008 one-time revenue provision in the
development of the 2009 draft budget.
Areas of Risk:
Provincial Upload - The 2008 budget was approved under the assumption
that the Province would upload the municipal portion of the public health program
in 2009. In anticipation of this
decision, the City share of $9.8 million for the 2008 public health program was
funded from one time sources ($5.6 million from the City Wide Capital reserve
fund and $4.2 million from the Tax Stabilization Reserve fund).
It is expected that the Province will make an
announcement in late June on the results stemming from the joint municipal /
provincial review meetings conducted over the past 18 months. Should the Province not upload additional
costs of $9.8 million in 2009, an additional funding pressure of $9.8 million
will be added to the 2009 pressures list.
If the Province announces an upload of more than $9.8 million the
additional vacated tax room would, in accordance with the Fiscal Framework and
Council direction, be used to reduce the remaining unsustainable revenues built
into the budget.
3.
Growth
Council approved direction:
a)
That
the costs of growth be included.
b)
That
the revenue from new assessment be used as an offset to the direct costs
generated from growth.
Increased operational
requirements to address the effects of growth are estimated to be $18 million,
reflecting:
·
operational
requirements associated with new infrastructure and population growth; and
·
annualization
of program growth costs which were reflected as a part year cost in 2008.
Growth costs are to be
reviewed by the Budget Working Group prior to being tabled in November.
Assessment growth is
currently projected to generate additional taxation revenues of approximately
$19 million (net of the Police share).
Areas of Risk:
Assessment growth - Additional property taxation
revenues from assessment growth were forecasted to increase by 2.2% in 2009
which includes the growth that was not reflected on the 2008 tax roll due to
delays at the Municipal Property Assessment Office. Over the past two years, actual growth has been declining from
2.2% in 2007 to 1.8% in 2008. The
impact on tax revenues for every 0.1% change in growth is approximately $1.0
million. The actual growth numbers will
not be known until the City starts to receive supplementary tax rolls in the
late summer. Should the actual growth
in assessment be closer to 2.0%, a shortfall of approximately $2.0 million
would result.
4. New Needs
Council approved direction - That $23 million in operating
enhancements be included.
A funding envelope of $23 million has been provided
in the 2009 budget for new needs. Specific new operational needs have been
identified for implementation in 2009 and are presented in the table below,
based on the following criteria:
·
have
been specifically approved by Council in a previous report;
·
address
regulatory requirements;
·
stem
from recommendations by the Auditor General; and
·
implement
organizational transformation initiatives to achieve greater efficiencies.
The
new needs identified in the approved 2009 high level estimates are as follows:
2009 New Operating Needs ($000)
Child care Francophone spaces 770
Arts Investment Strategy 490
Community Funding Sustainability 500
Museum Sustainability Funding 320
City Archives 50
Orleans Arts Centre 2,570
Kanata North Complex 800
Organics program 10,545
Trees & Forest Management program 815
Special Events-Sponsor/In-kind Policy 500
Business Transformation program 2,000
Funding to be allocated through the year 3,140
5. User Fees
Council approved direction – Continue
to adjust user fees (except for transit fares) as per the existing policy of
maintaining the current revenue- cost ratio.
Maintaining the current revenue-cost ratios is expected
to generate an additional $5 million in 2009.
Recreation and most other user fees in the City are
increased annually to maintain the direct cost-to-user fee ratio. In the case of recreation programs, special
subsidy programs are available to ensure that all residents are able to
participate in City programs no matter their income level. These programs will be adjusted in
proportion to the increases in user fees for recreation programs.
6. Transit Fares
Council approved direction – With
respect to Transit fares, that
a)
the revenue-cost ratio be raised to 50% by 2010;
b)
user fees be increased by
7.5% in 2008, 2009, and
c)
the revenue-cost ratio be
re-evaluated in 2009 following the review of the Official Plan and
Transportation Master Plan, or if any transit initiative is considered earlier.
The direction to increase fares by an average of 7.5%
will generate approximately $6 million in additional revenues in 2009.
Areas of Risk:
OC Transpo Cost Recovery Target – Council established an
objective to achieve a 50% cost recovery rate from fare box revenues by
2010. In 2007, an increase in fares of
7.5% for both 2009 and 2010 was estimated to achieve the 50% target and was
incorporated into the forecasts.
Since the beginning of the year, OC Transpo has seen
an increase in ridership and therefore revenue, which has been sufficient to
offset the increase in the price of diesel fuel. As fuel prices continue to increase it is unknown whether the
ridership increase will be sufficient to cover the additional costs. The result could be that a higher than 7.5%
fare increase may be required in 2009 and 2010 to achieve the 50% cost recovery
target. An update on this issue will be
provided to the Transit Committee later this fall.
7. Management Efficiencies
Council approved
direction – That potential management efficiency savings targets of $100
million be included in the budgets, to be raised through productivity
improvements, technology investments, asset rationalization and procurement.
|
|
2008 |
2009 |
2010 |
Total |
|
|
$ million |
$ million |
$ million |
$ million |
Productivity
|
10.50 |
10.75 |
13.75 |
35.00 |
|
Technology |
- |
5.00 |
10.00 |
15.00 |
|
Assets |
2.00 |
5.00 |
8.00 |
15.00 |
|
Procurement |
12.50 |
8.75 |
13.75 |
35.00 |
|
Target Total |
25.00 |
29.50 |
45.50 |
100.00 |
The management efficiencies are to be realized
in the following areas:
a) Productivity – improvements would be achieved
through continuous process improvement initiatives to ongoing administration
and service delivery operations.
b)
Technology –
savings will require the completion of business case analysis to ensure that
investment in technology will generate sufficient savings over a reasonable
time period.
c)
Assets – rationalization
and consolidation savings will require an initial investment in some instances.
These initiatives would be brought before Council for consideration prior to
implementation.
d)
Procurement –
potential purchasing savings in the area of procurement will be investigated
through a consultant facilitated analysis of overall corporate procurement
strategies.
Any management efficiencies not found in the year are carried over into
the following year. Staff will be
reporting quarterly on these targets along with the remaining efficiency target
carried over from 2007.
8. One-Time Revenues
Council approved direction – that the use of
unsustainable sources of revenue be eliminated by the 2010 budget year.
By definition, one-time
revenues are not sustainable sources of revenue to fund City services. As discussed earlier, the use of one-time revenues will be
reduced from $25 million as reflected in the 2008 budget, to $13 million in the
development of the 2009 draft-operating budget. The source of these funds will be in the form of a transfer from
the City’s Tax Stabilization Reserve Fund.
Areas of Risk:
Tax Stabilization Reserve – At time of this report the
tax stabilization reserve does not have a $13 million balance to contribute to
the 2009 budget. Sufficient funds may
be available in this reserve as a result of Council’s decision to contribute to
the Reserve any additional Hydro Ottawa dividend stemming from the sale of
Telecom Ottawa.
9. Operational Tax Increase
Council
approved direction:
a) That the average
monthly change in the Consumer Price Index, as determined by Statistics Canada
for the Ottawa-Gatineau region, be used to establish the rate of inflation; and
b)
That
the tax rate budget directions for City Operations be set at the rate of
inflation.
At the end of April
2008, the annual rate of inflation (CPI) for Ottawa as reported by Statistics
Canada was 1.7%. A rate of 2.0% has
been used for presentation purposes in this report as it represents the current
forecast for the 2009 year.
For information
purposes, each 1% increase to the property tax levy generates approximately
$10.5 million in additional tax revenues therefore a 2% tax increase generates
approximately $21 million in taxation.
10. Options Required
The application of
Council’s directions as discussed above will not result in a 2009 budget that
conforms to Council’s taxation direction unless options for expenditure
reductions or additional revenues are identified. The following table shows that between $19 million to $57 million
in expenditure reduction or revenue increase options will be required in order to balance the 2009 budget.
|
|
2009 |
|
|
|
$Millions |
$Millions |
|
Cost Increases |
|
|
|
City Services |
|
|
|
Maintain Existing Services |
42 |
57 |
|
Growth |
18 |
18 |
|
Legislated/ Cost-Shared |
12 |
21 |
|
Previous Years One-Time Funding |
25 |
25 |
|
Increased costs from new needs |
23 |
23 |
|
TOTAL |
120 |
144 |
|
Offsets |
|
|
|
User Fees |
(5) |
(5) |
|
Transit Fares |
(6) |
(6) |
|
Assessment Growth (City portion) |
(19) |
(17) |
|
Management Efficiencies |
(30) |
(30) |
|
Uploading |
(7) |
(7) |
|
One Time Revenues |
(13) |
(1) |
|
|
(80) |
(66) |
|
Taxation Increases |
|
|
|
City Operations 2.0% |
(21) |
(21) |
|
|
|
|
|
Other Expenditure / Revenue Solutions |
19 |
57 |
A list of options
will be provided with the draft estimates for Council’s consideration. The
methodology used to develop the options for the 2008 budget process will be
used again to develop the 2009 option list.
The general principles that will guide the process will be to develop
options that minimize the overall impact on City residents while still trying
to respect Council’s term priorities.
Many of the options that were presented during the 2008 budget process
will again be included in the list of potential options for Council to
consider.
The options list will
be developed using the same prioritized criteria as used in 2008, namely:
·
New revenue opportunities;
·
Deferral new needs not yet implemented;
·
Deferral of capital projects with operating impacts;
·
Reductions to growth pressures to maintain existing service levels; and
·
Reductions to existing programs / services
Ottawa
Police Services
The
Ottawa Police Services have indicated in their 2008 budget documents that an
increase of $13 million, or a 1.0% tax increase after assessment growth, will
be required to provide policing services in 2009. The Ottawa Police Services Board will be meeting in September to
establish budget directions for police services.
Budget
Directions – 2009 Capital Budget
The following Council directions will be the basis
for developing the 2009 capital budget and the 9 year forecast:
1. Capital Renewal Projects
a)
A
continuation of the Capital Levy for infrastructure renewal projects;
b)
Assign
the additional funds to infrastructure that would shift from renewal to
replacement; and.
c)
That a
priority list of infrastructure renewal projects be provided to City Council
with the draft Budget.
To address the spending gap on capital
infrastructure, an additional $20 million contribution for capital renewal
purposes was approved by Council in the 2008 budget. To fund this additional contribution, a dedicated Capital Tax
Levy was implemented and shown as a separate line item on property tax
bills. In addition, Council directed
that the Capital Tax Levy be continued by including an additional $20 million
in both the 2009 and 2010 budgets to address the infrastructure funding gap.
In establishing the
capital program for 2009, staff will continue to ensure that priority is placed
on conducting infrastructure works that prevent City assets from having to be
replaced as opposed to being renewed and rehabilitated.
In addition to
the above recommendations, Council has also implemented the following
principles to guide the development of the City’s capital budget.
d)
Increase
the amount of debt based on an assessment of need; and
e)
Increase the amount of debt temporarily to accelerate
the elimination of the capital renewal gap.
Staff will review the
capital program and assess the potential for utilizing debt as a financing
source where eligible.
2. Growth related Capital
f)
Continue to use the current Development Charge funding
principles for determining when growth projects can proceed.
In May 2006, Council
approved a set of funding principles that aligned when a growth related project
would be authorized by Council with the timing of the project in the overall
growth cycle and the amount of development charges that had been collected to
fund the project. In general hard
services such as sewer and water works, which are required to be in place
before development happens are not constrained by the amount of development
charges collected. Transit and road
projects are only constrained to the extent that yearly spending can not exceed
the total amount of development charges collected. All other services must have all the development charge funds
collected before a project can proceed.
A copy of this report can be accessed in the May 24, 2006 agenda of
Council (Corporate Services & Economic Development Committee Report 47).
These same funding
principles will be used to identify which growth related capital works will be
put forward in the 2009 capital budget.
3. Capital Strategic Initiatives
Council also directed
that staff:
g)
Establish a funding envelope for undertaking capital
strategic initiatives over the next 3 years.
Attached
as Document 1, is a listing of the projects approved by Council for the
2009-2010 time-period. Projects for
2011 that meet the criteria listed below will be presented for Council
consideration when the budget is tabled in November. The list of capital strategic initiatives that will be
recommended for funding will include projects that:
· have been previously approved through a Council report;
· result from a contractual arrangement;
· are required under legislation or regulation;
· work towards finding efficiency targets; or
· are recommendations stemming from the Auditor General.
Summary of Council
Directions
Based on the above discussion,
the budget direction as established by Council for developing the 2009 draft
operating budget will require a 4.9% property tax revenue increase reflecting
the 2.0% inflationary increase for City operational purposes, a 1.9% increase
for the Capital Tax Levy to generate an additional $20 million required for
addressing the infrastructure funding gap and the 1.0% increase required to
address the additional requirements for policing services.
|
Taxation Increases |
$Millions |
|
City Operations 2.0% |
21 |
|
Capital Tax Levy 1.9% |
20 |
|
Police Operations 1.0% |
10 |
|
Total |
51 |
Projected Impact on Average
Residential Homeowner
For the 2009 to 2012
taxation years, property values in Ontario are to be established by the
Municipal Property Assessment Corporation based on a valuation date of January
1, 2008. Although the City does not
benefit from the reassessment of property values through increased taxation
revenues, reassessment may result in the shifting of tax burdens between property
classes and also shifts within a class, particularly within the residential
property tax class.
Assessment related tax increases
will be mitigated through a 4-year phase-in program in the residential, farm
and managed forests property classes.
However these property owners will still see property tax increases that
are greater than the overall City budget increase. The following table illustrates the potential increase on an
average urban and rural residential property tax bill in the absence of
reassessment impacts. The taxation changes
for the Conservation Authorities and the Provincial residential education tax
rates are not known at this time and are shown as “to be determined” (TBD).
|
|
Residential |
||||||
|
|
Urban |
|
Rural |
||||
|
|
2008 |
2009 Inc |
|
2008 |
2009 Inc |
||
|
|
$ |
$ |
% |
|
$ |
$ |
% |
|
City Operations |
2,193 |
70 |
3.2% |
|
1,676 |
60 |
3.6% |
|
Capital Levy |
51 |
51 |
100.0% |
|
51 |
51 |
100.0% |
|
|
2,244 |
121 |
5.4% |
|
1,727 |
111 |
6.4% |
|
Police |
449 |
27 |
6.0% |
|
449 |
27 |
6.0% |
|
Total Municipal |
2,693 |
148 |
5.5% |
|
2,176 |
138 |
6.3% |
|
|
|
|
|
|
|
|
|
|
Conservation Authorities |
19 |
TBD |
TBD |
|
19 |
TBD |
TBD |
|
Education |
729 |
TBD |
TBD |
|
729 |
TBD |
TBD |
|
Total Property Taxes |
3,441 |
148 |
4.3% |
|
2,924 |
138 |
4.7% |
Rural residents
receive a lower level of service for transit and fire services and therefore
pay lower taxes than in the urban area as reflected in the City Operations line
in the above table. The precise
breakdown of cost increases for these service areas between the urban and rural
areas is not available at this time.
Therefore these numbers as presented above should be viewed as very
preliminary.
The 2009 property tax
increase on a percentage basis for an average commercial property will be lower
than the increase associated with a residential property. This is due to the fact that the tax ratio
for the commercial property class in Ottawa is lower than the province-wide
threshold as established by the Province.
Therefore only 50% of any budgetary tax increase can be borne by this
class. The budgetary tax increase this
class does not pay is paid by all the other classes, of which residential is
the largest.
2010
and 2011 - High Level Fiscal Directions
In setting the budget directions for 2008, Council
also looked at the longer-term objective of providing broad direction for 2009
and 2010. This longer-term view
recognizes that decisions made in one year, impact the next and that the goal
of financial sustainability will only be achieved over time with the
development of a plan.
The high level fiscal directions, as approved by
Council during the 2008 budget process, have will be utilized in the
development of the forecasts for the 2010 and 2011 budget years. The following high-level directions include:
a) That the high level
forecasts be developed in accordance with the Fiscal Framework document;
b) That the costs of
maintaining legislated and cost shared programs be included;
c)
As the Province uploads the cost of
services, the vacated tax room will be used first to address unsustainable
revenues built into the budget, second to fund an increased contribution to
capital and third, to reduce the impact of inflation on the city budget
d) That the costs of
growth be included;
e) That the revenue from
new assessment included be used as an offset to the direct costs generated from
growth;
f) That management
efficiency savings targets of $100 million over the 2008 to 2010 time period be
included in the budgets, to be raised through productivity improvements,
technology investments, asset rationalization and procurement;
g) That the Capital Tax
Levy be continue and increased by $20 million in 2009 and in 2010; and
h) That the tax rate budget directions for City
Operations be set at the rate of inflation.
The operating increases for City purposes (in the
categories for Maintain, Legislative, Growth and Enhancements) and for Police
purposes for 2010 as presented in the table below, are based on the estimates
provided during the last year along with incorporating the impacts of Council
decisions during the 2008 budget process.
These will be updated during the months leading to the tabling of the
2009 budget this fall along with developing the forecast for 2011.
|
|
2010 |
|
|
$Millions |
|
Cost Increases |
|
|
City Services |
|
|
Maintain Existing
Services |
46 |
|
Growth |
27 |
|
Legislated |
11 |
|
Previous Years One-Time Funding |
13 |
|
Increased costs from new needs |
24 |
|
Capital Formation |
20 |
|
|
141 |
|
Police Services (net of assessment growth) |
10 |
|
Total Increases |
151 |
|
|
|
|
Offsets |
|
|
User Fees |
(4) |
|
Transit Fares |
(6) |
|
Assessment Growth (City share) |
(17) |
|
Management Efficiencies |
(46) |
|
Uploading |
(21) |
|
Offsets |
|
|
One Time Revenues |
- |
|
|
(94) |
|
Taxation Increases |
|
|
City Operations 2.0% |
(23) |
|
Capital Tax Levy 1.9% |
(20) |
|
Police Operations 1.0% |
(10) |
|
|
(53) |
|
|
|
|
Other Expenditure / Revenue
Solutions |
4
|
All departments, including the Ottawa Police Services were consulted. Public consultation through City Councillors will commence with the June 3 tabling of this document at the Corporate Services and Economic Development Committee. Public delegations on these documents will be held at the Corporate Services and Economic Development Committee on June 17 with Council consideration and adoption on June 25.
The financial implications are detailed in the body of the report.
STRATEGIC DIRECTION
The budget directions as contained in the report in accordance with Council’s objective of advancing the City towards financial sustainability.
Document 1 – 2009-2010 Strategic Capital Initiative Projects
Upon approval of this report, the City will commence development of the 2009 draft operating and capital budgets for tabling on November 5.
Document 1 – 2009-2010 Strategic Capital Initiative Projects
|
Project |
Description |
2009 ($000's) |
2010 ($000's) |
|
900852 Comprehensive Zoning By-Law |
Complete the new Comprehensive Zoning By-law to harmonize all the
former municipal zoning by-laws, and to implement policies in the 2003
Official Plan; and defend the new Zoning By-law at the Ontario Municipal
Board. |
300 |
- |
|
901037 Emergency Management Plan |
Achieving legislative requirements while enhancing City's ability to
prepare, plan, respond and recover from disaster and emergency events. |
1,500 |
1,500 |
|
902042 Watershed/Subwatershed Planning |
Prepare 1 subwatershed plan annually for greenfields and other urban
or rural areas experiencing development pressure, as basis for land use,
stormwater, greenspace network. |
300 |
300 |
|
902203 Stream Restoration Projects |
Initiate 2 - 3 restoration projects annually to restore watercourses
impacted by development, as recommended by subwatershed plans or as
identified by other agencies. |
200 |
200 |
|
902220 By-Law Services Technology Upgrades |
Improved IT/technology required for efficiencies and reporting data to
address Auditor General's recommendations and establish completion standards
and performance measures. |
620 |
20 |
|
902560 Environmental Management |
Implement the Air Quality and Climate Change Master Plan; develop and
implement other corporate environmental policies ie, Green Procurement
Policy. |
130 |
100 |
|
903716 Museum Sustainability Plan |
Museum Sustainability Plan and Building Improvements - Improve local
Museum buildings and plans to meet service needs by 2010. |
1,110 |
- |
|
903778 2006 Railway Crossing Signals Upgrades |
Provides for City's share (12.5%) of any locations requiring changes
to existing railway controls. |
50 |
55 |
|
904271 Johnston Road |
To fulfill cost sharing arrangements under a development agreement. |
1,500 |
- |
|
904272 Bill Leathem Dr ext S Merivale B.P. |
To fulfill cost sharing arrangements under a development agreement. |
- |
1,000 |
|
904273 Street D S Merivale Business Park |
To fulfill cost sharing arrangements under a development agreement. |
- |
500 |
|
904281 Economic Development |
Partner with the City's economic agencies to provide a wide range of
economic development programs , tools, and initiatives to improve Ottawa's
business climate and enhance the City's overall competitiveness, prosperity
and job creation potential. |
1,500 |
1,500 |
|
904455 Tree Program |
The City of Ottawa approved a 4 year Trees, Reforestation, and
Environmental Enhancement (TREE) program as part of the 2007 budget. The program was intended to enhance the
city's urban and rural forests through the planting of 100,000 over four
years. The City of Ottawa has now
pledged a commitment of 100,000 trees to this campaign to be planted over the
4 year period. Currently $1.1M has
been identified for the 2008 budget year underYear 2 of this 4 year program. ACS2006-CCS-PEC-0012 |
1,105 |
1,105 |
|
904529 Tree & Forests Maintenance Program |
Vehicles for Trees & Maintenance |
330 |
94 |
|
904545 2008 R/way Cross Rdwy Safety Mod/Upgrade |
This program provides funding for modifications at high collision risk
rail crossings which includes changes to approaches, land acquisitions, and
signal/barrier construction to mitigate collisions. Program is cost
shared @ 12.5% City, Transport Canada
80%, Rail operator 7.5%. |
400 |
400 |
|
904617 Nederman/Garage Doors - 2008 |
To finish installing exhaust systems to remove noxious gases causes by
diesel fume exhaust emitted when the vehicles leave the station. |
375 |
370 |
|
904640 Storage & Control of Cores-Material Mgmt |
Set up a new area for cores and consolidate parts under Materials
Management control. (AG Fleet Services Audit recommendations # 17 & #
25.) |
- |
200 |
|
904643 Leadership in Energy & Environmental |
Investigate incentives for buildings that achieve a LEED (Leadership
in Energy and Environmental Design) which is a green building rating system. |
110 |
150 |
|
904644 Business Transformation Efficiencies |
Efficiency envelope to implement required technology needs in order to
save on operations. |
5,000 |
5,000 |
|
904657 Business Continuity & Vulnerability |
A multi-year program to assess risks, develop strategies and implement
business continuity measures in selected City buildings and in direct
response to different emergency situations. This program is in support of the
City's emergency response plans. |
1,000 |
1,000 |
|
904712 Intranet (Ozone) Improvements |
Enterprise Content Management (ECM) and Web Content Management (WCM)
Improvements: Search, functionality, usability, growth in use. |
200 |
200 |
|
|
|
15,730 |
13,694 |
2009 Proposed Budget Timetable,
Process / 2009 Budget Directions and High-Level Fiscal Directions for 2010-2011
Calendrier budgétaire proposé pour 2009 / Orientations budgétaires pour 2009 et orientations générales pour 2010 et 2011
ACS2008-CMR-FIN-0023 city-wide / À l’Échelle de la
ville
Councillor Deans discussed the section of the report pertaining to the budget format and presentation changes, its reference to the budget documents being intimidating and the suggestion of preparing an abridged version of the budget document and she indicated she was insulted by the notion. She maintained that the budget was one of the City’s most important documents, that information was power and that the more information members of Council had at their disposal, the better equipped they were to make decisions. Although she recognized the value of making it more user-friendly for the public, she re-iterated the importance of providing as much information as possible to members of Council with respect to the budget.
Responding to questions from the Councillor, Mr. Kent Kirkpatrick, City Manager, noted that a report would be tabled at the July Council meeting with recommendations on the Terms of Reference and composition of the proposed Budget Working Group and that, at its August meeting, Council would need to make decisions with respect to this report. The City Manager explained the intent was to have Council mandate the Working Group to focus on a detailed review and to challenge the draft estimates being developed by management. In terms of the Working Group’s proposed composition, Mr. Kirkpatrick indicated the intent was to emulate the same structure and process as the current Council Audit Working Group, which had proven to be quite successful and effective.
Councillor Chiarelli found it appalling that, in the last election, most members of Council campaigned to get to the bottom of the City’s finances and that they would then proceed to ask for an abridged version of the budget documents. He believed these positions were completely contradictory and that, in the next election, any opponent would hold this against them. He felt it was an abrogation of their responsibilities.
Councillor Wilkinson had no objection to having a fine-tuned budget document insofar as what was presented to the public as long as more detailed information was available to members of Council. She looked forward to seeing what would come forward with respect to this proposal and indicated she found it hard to discuss it without having seen it.
With respect to the issue of details, Mr. Kirkpatrick assured Committee that members of Council would always have access to as much detailed information as they wanted in order to perform their role and be familiar enough to deal with budget decisions. Speaking to the proposed changes in the budget format, he reminded Committee that last fall, in approving its strategic directions, Council wanted to see the budget document evolve and move towards more of an outcome-based format. He submitted the proposed changes were intended to start moving towards Council’s stated objective in this regard.
Councillor Cullen noted that different people had different levels of ability to absorb financial details and therefore, he felt it would be appropriate to have different formats available in terms of budget documents. However, he thought it was premature to debate the issue without having received the staff report, to be tabled in July. The Councillor then referenced the list of 2009 New Operating Needs, contained at page 13 of the report, and the fact that $19 million to $57 million worth of expenditure reduction and/or revenue increase options would need to be identified in order to balance the budget. He maintained that the list contained at page 13 was incomplete and that Council would have to have a debate with respect to the missing items. He provided ParaTranspo, transit services and the proposed Cycling Plan as examples of services and/or programs needing additional resources and indicated he always believed that where the City could demonstrate the additional benefit, the public would decide whether or not it was worthwhile paying the cost. He hoped Committee would approve the current report and that Council would have the debate in December with respect to funding for programs and services.
Councillor Desroches echoed other members’ concerns in that he felt more information was better in terms of the budget documents. He discussed the notion of conducting an affordability test and indicated he would like to see this in the budget documents and grant programs. Ms. Simulik submitted the affordability test was really what Council did in setting the budget.
Speaking to the budget format, Councillor Brooks submitted that Council had to consider the target audience and what the average taxpayer wanted to see in a budget document. He maintained this did not mean members of Council would not have a full set of documents available to them, but that the average resident would not read through a 1,000 page budget document. The Councillor discussed the notion of setting the budget based on estimates and forecasts as opposed to undertaking the exercise based on actuals and he advised that he would be putting forward a motion on this issue.
Responding to a question from Councillor Bloess with respect to Provincial uploading, Ms. Simulik submitted that, should the Province not come forward soon to pick up the costs associated with the estimates built into the 2008 budget, Council would have to decide whether to pick up those costs or whether to put them back in as a budget pressure for 2009. She believed there would be some announcement by the end of June or early July. However, based on the economic climate, she did not know whether the upload would happen in a timely fashion.
In response to questions from Councillor El-Chantiry, Ms. Simulik explained that the Consumer Price Index (CPI) had increased around 2% this year whereas the Municipal Price Index (MPI) was sitting at about 3.5% to 4%. Therefore, there was a gap of approximately 1.5% to 2%. The City Treasurer confirmed that a 1.5% difference between the CPI and the MPI automatically translated into a $15M budget shortfall because Council had directed that the tax increase related to the CPI.
Councillor Brooks posed some follow-up questions with respect to the MPI, in light of the recently tabled Auditor General’s report. Ms. Simulik explained the MPI was a concept used more in the United States than in Canada. However, she noted that it was used by a couple of Canadian municipalities as well as the Yukon government, in determining increases in transfer payments to their municipalities, and that a lot of organizations were looking at it. She indicated the General Finance Officers’ Association was looking at establishing one for governments. She advised that an expert from Statistics Canada had reviewed the methodology used to calculate the MPI and had been quite content with it. Adding to the discussion, Mr. Kirkpatrick submitted this would be one of the roles of the Budget Work Group; to go over, in detail, price increases and the major cost elements that were the components of what was expressed in an MPI.
Councillor Deans introduced the following motion, which she then agreed to table until the 9 July meeting, when staff would be bringing forward a report with respect to the budget format:
That
the outcome-based budget document include the same level of detail as has been
provided to Council in previous years, and that a summary document be prepared
as well, and that the Council budget process include a page by page review of
the entire budget document.
TABLED
Councillor Brooks introduced the following motion:
Whereas it is proposed that the City of
Ottawa tax-supported budget be tabled on November 5, 2008 so that it can be
finalized by December 5, 2008,
And Whereas the City would like to get
to the point where it is comparing actual financial results to budget estimates
instead of forecasted results to an estimate,
And Whereas the Province of Ontario has
made major funding announcements in the last half of March for the last few
years which have positively impacted municipalities,
And Whereas in the absence of an
approved budget the Treasurer has authority to approve expenditures equivalent
to one-quarter of the previous year’s budget up to March 31st,
And Whereas the final budget numbers
are required in late March in order to prepare the final tax bill,
Therefore Be It Resolved that the 2009
budget be tabled on February 11, 2009 for consideration in Committee of the Whole
on March 23 to 27 2009.
In speaking to his motion, the Councillor stressed the need to work from actuals rather than estimates and forecasts. As a result of trying to draft budgets from estimates and forecasts, he believed staff had to build in extras here and there. He submitted that while this may be good for Council in trying to balance the budget, it was not good for taxpayers because it meant they had been overtaxed. He felt the City needed more time to look at the budget and that delaying it until the spring would bring it more in line with the Province and allow Council to make decisions based on actuals rather than forecasts. In closing, he asked that the City Treasurer comment on his proposal.
Ms. Simulik indicated that, from staff’s perspective, there were advantages to going to a later budget but there would also be some issues to address. She acknowledged some of the advantages in terms of having a better handle on actuals rather than building the budget based on estimates and confirmed that programs would continue because, in the first quarter, she had the authority to authorize 25% of the expenditures from the previous year. However, she cautioned that no new programs would be implemented and no new growth would be implemented until after the budget was approved and she expressed concerns with respect to getting certain capital programs out of the gate as quickly as possible in the new year, though she suggested staff could come up with ways to address this. Lastly, she advised that the same staff preparing the draft budget were also required to do the year-end and, if the budget process was moved to the spring, these two activities would take place during the same month.
Councillor Wilkinson did not like the idea of going so far into the year before setting the budget. She noted this used to be the practice and it delayed capital projects and caused problems. Although she understood the intent behind the motion, she expressed a preference for using estimated actuals and getting the budget finalized in a timely fashion, particularly as it related to capital projects but also with respect to some of the operations. Furthermore, she felt there was nothing wrong with looking at the budget again several months later and making adjustments if required. For these reasons, she did not support the motion.
Responding to a question from Mayor O’Brien, Ms. Simulik explained that in the past, when there have been delays in setting the budget, staff had come forward with a mini-budget for capital only in order to allow capital projects to get started in a timely fashion. However, she acknowledged that if Council set a regular process and staff know the budget would be set in March each year, adjustments would be made to ensure things happened in a timely fashion.
Mayor O’Brien stated his only concern with the motion related to the capital program and this had been addressed to his satisfaction.
In response to questions from Councillor Hume, Ms. Simulik explained that with the December timeframe, the draft budget would be based on actuals as of the end of August and a forecast for the balance of the year. She indicated that in the past five (5) years, the forecasts had been fairly close to the actuals, with the one exception being last year because of the inclement weather experienced in November and December, which resulted in a deficit in Surface Operations.
Ms. Simulik responded to some follow-up questions from Councillor Hume with respect to timing of Provincial announcements and potential impacts on the City’s budget. She confirmed new legislation mandated that if the Province had a surplus over a certain threshold, municipalities would get a share of it towards their capital works programs. She acknowledged that any such infusion from the Province could be factored in when Council set its tax rates in April.
Councillor Cullen believed the motion would push Council back to an older form of budget-making, which placed severe constraints on the flexibility of the City to deal with its budget. Although he appreciated the mover’s desire to have actuals, he noted that neither of the upper levels of government had actuals in front of them when developing their budgets for an upcoming year because actuals went through a verification process and arrived much later. He stressed the importance of being able to make timely decisions and expressed support for an earlier budget process, which had proven to be a successful way of doing it.
Councillor Bloess recalled that in the past, Council had regretted putting off finalizing its budget and he did not wish to repeat past mistakes. In the event of some dramatic changes, he asked whether Council could re-open the budget to make any necessary adjustments. Mr. Kirkpatrick confirmed that this could be done, though there would be some public notification requirements.
Councillor Brooks indicated he would not have brought the motion forward had he not felt it had merit. He cautioned against budgeting based on estimates and expressed scepticism with respect to being able to get the votes needed to re-open the budget in the event of some dramatic changes. He indicated he had raised the question about capital because he knew it would be an issue. He wondered if senior managers could work within the timeframe he was proposing and still get work completed on time. He asked his colleagues their preference; having a budget process so compressed that they did not have time to talk to their public, or having the budget come forward in the spring and taking more time to get through the process. He submitted that he preferred to have the right decision over having a fast decision.
Councillor Desroches believed most families needed time to plan how they would pay their tax bills. Therefore, he felt it made sense for Council to finalize the budget as soon as possible.
In order to move a motion, Mayor O’Brien ceded to Chair to Councillor Desroches.
The Mayor then introduced the following motion:
WHEREAS employee compensation accounts for
the largest expenditure in the city's budget and the rate of full-time
equivalent (FTE) growth has equalled, or exceeded, the city's rate of growth
since amalgamation;
AND WHEREAS the citizens of Ottawa were
promised that amalgamation would bring increased staff efficiencies;
AND WHEREAS the Mayor's Task Force on
e-Government has suggested that through capital investments in technology
infrastructure and with the effective use of technology that service standards
program delivery can be maintained or improved without the need for additional
staff;
AND WHEREAS the Auditor General has reported
extensively on the large number of opportunities for reducing the number of
Full-Time-Equivalent employees;
THEREFORE BE IT RESOLVED that staff be
directed to include in the 2009 draft budget proposed options to cap the FTE
total at 13,590.28 (the budgeted amount for 2008) and identify options to
reduce the total number to 13,090.28 excluding growth and related increases for
front-line Police, Fire and Paramedics to be achieved by December 31, 2009;
BE IT FURTHER RESOLVED that these reduction
options include the introduction and investments of new technology and/or
business process reengineering;
BE IT FURTHER RESOLVED that these cost
reduction options also include involuntary departures from the City of Ottawa
(i.e. that these reductions/options be achieved through attrition)
BE IT FURTHER RESOLVED that the proposed
options by staff be presented to the Budget Challenge Working Group for review
prior to being included in the 2009 draft budget,
BE IT FURTHER RESOLVED that the proposed
growth of the Police, Paramedic and Fire Service FTE be accommodated with an
offsetting reduction as part of the proposed reduction of 500 FTE's.
In speaking to his motion, Mayor O’Brien stated he wanted to position this as a responsible, prudent, business-like approach. He indicated he had been educated to the fact that municipal government was not a business but that it was more like an extension of people’s homes, of the way they lived and of their lifestyle. However, he maintained that in both homes and businesses, people always looked at more effective and efficient ways of doing things and planned for changing times. In looking at changing economic times, he spoke in favour of taking a long-term, prudent approach and of turning a challenge into an opportunity. He believed lean times were coming, which had a strong potential of negatively impacting the City’s revenue bases. Therefore, he felt it was time to take a prudent look at the City’s budgeting process going forward. He referenced the report of the e-government task force, released earlier that day, which clearly indicated that technology could be an alternative to FTE growth in the City of Ottawa and that technology should be budgeted as an infrastructure investment rather than a year-to-year expense. For these reasons, he felt it was an opportune time to move ahead with a motion to essentially cap FTEs, excluding growth and related increases to front-line emergency services, to be achieved by December 31, 2009. He believed this could easily be achieved with only minor impacts on services to residents and that it was in the best long-term interest of Ottawa’s citizens.
Prior to debating the Mayor’s motion, Councillor Desroches called for a vote on Councillor Brooks’ motion.
Moved by Councillor G. Brooks
Whereas it is proposed that the City of
Ottawa tax-supported budget be tabled on November 5, 2008 so that it can be
finalized by December 5, 2008,
And Whereas the City would like to get
to the point where it is comparing actual financial results to budget estimates
instead of forecasted results to an estimate,
And Whereas the Province of Ontario has
made major funding announcements in the last half of March for the last few
years which have positively impacted municipalities,
And Whereas in the absence of an
approved budget the Treasurer has authority to approve expenditures equivalent
to one-quarter of the previous year’s budget up to March 31st,
And Whereas the final budget numbers
are required in late March in order to prepare the final tax bill,
Therefore Be It Resolved that the 2009
budget be tabled on February 11, 2009 for consideration in Committee of the
Whole on March 23 to 27 2009.
LOST
YEAS (2): g.
Brooks, Mayor O’Brien
NAYS (9): R. Bloess, R. Chiarelli, D. Deans, E. El-Chantiry, P. Hume, R. Jellett, M. McRae, M. Wilkinson, S. Desroches
At this juncture, Committee moved to a discussion of the Mayor’s motion.
Councillor Chiarelli thought the motion had a lot of good to say about where the City should be going in the next couple of years. He believed the first reaction from the bureaucracy would be that it was too restrictive and almost unattainable because of growth and increased demand for service. However, he presumed that along with this, staff would be given more freedom with respect to bringing in and operating new technology, which would help achieve the flat lining of FTEs to do the same work over a growing customer base. He spoke in support of the motion and encouraged Committee to support it but that Council also had to send a strong message to the bureaucracy to take some chances and make technology work for them.
Councillor Deans agreed that in an organization the size of the City of Ottawa, there would always been redundancies and that, year over year, positions should be reviewed. However, given that the City Manager had already been mandated to find $100M in efficiencies over three (3) years, she was concerned about layering this directive over the previously set target without having some sense of the impact. Therefore, she asked the City Manager to give Committee some sense of the roadmap for achieve the previously approved $100M efficiency target and to tell me, in his opinion, what the Mayor’s motion meant. She noted that Council had also previously directed staff to not reduce service levels or programs valued by the public so she wondered how much of this was possible without impacting services.
In response to the first question, Mr. Kirkpatrick referenced page 14 of the report, which discussed “Management Efficiencies”, noting that it re-iterated what Council had approved during the 2008 Budget in terms of where he was directed to find the $100M. He remarked that $30M of this target had been built into the budget direction report currently before Committee and he estimated this would represent about 150 FTEs. He believed the entire $100M would represent anywhere from 450 to 600 FTEs. Speaking to the motion, he remarked that there were two components to it; capping FTEs at 13,590 and then reducing that number by 500 by December 2009. He referenced the report currently before Committee and the 2009 – 2010 fiscal directions in which Council accepted that there would likely be 300 to 400 new FTEs in each of those years to deal with growth in services. Putting all these things together along with the direction given in the motion to exempt front-line emergency services and Mr. Kirkpatrick submitted this was a significant challenge and he did not believe it could be achieved without impacting services. With respect to investing in technology, he agreed this was the road to higher productivity, less costs and better services. However, he maintained that such changes would take time.
Going back to the motion, the City Manager did not believe the Mayor intended for all 500 FTEs to be reduced without impacting services. Mayor O’Brien confirmed this.
Mr. Kirkpatrick felt this was an important clarification and he re-iterated his belief that such a degree of staff reductions could not be accomplished without affecting services. He noted that the current budget directions report already called upon staff to find between $19M and $57M worth of options for reducing costs in order to have a tax increase of 4.9% and he submitted that the majority of these options would have an impact on service delivery. He referenced the first introductory clause of the motion, which talked about FTE growth having equalled or exceeded the City’s rate of growth since amalgamation and he acknowledge that Ottawa residents were promised that amalgamation would bring increased staff efficiencies. However, he reminded Committee of a presentation made to the Long Range Financial Plan Sub-Committee last year, at which time staff reported that the number of FTEs per 1,000 households was 8% lower than pre-amalgamation.
Mayor O’Brien clarified that his motion called for staff to bring forward a plan to outline the kinds of cuts required.
With respect to the roadmap on achieving the $100M efficiency target, Councillor Deans felt there needed to be more detail than what was provided in the current report. However, she also recognized that there were a number of growth areas referenced in the report and therefore, without additional resources to pay for them, these would have to be absorbed, effectively reducing the current FTEs. Having said that, she referenced anecdotes with respect to staff efficiency and re-iterated her belief with respect to a continual need to review positions and she wanted assurances that what Committee was asking of staff was realistic. She asked the City Manager for his view of what would be a realistic target in the Mayor’s motion. Mr. Kirkpatrick re-iterated that the 2008 portion of the previously approved $100M efficiency target was already built into the budget directions report before Committee and that this would already involve FTE reductions. He also re-iterated that such reductions could not be accomplished without impacting on service delivery. With respect to the issue of investing in technology to achieve productivity savings, he submitted that to achieve big savings through technology required big information technology (IT) investments. He noted that as part of the $100M efficiency target, $15M was to be found through investment in IT and $5M was allocated to fund it.
Councillor Deans referenced the first introductory clause of the motion, which the City Manager had pointed out was factually incorrect, and she wondered if the mover of the motion would be prepared to delete it. Mayor O’Brien accepted this as a friendly amendment.
Responding to a question from Councillor Deans with respect to the requirement for the options to be presented to the Budget Working Group first, Mayor O’Brien explained that if Council implemented a Budget Working Group, as proposed, this would be the normal budget process. However, he acknowledged that if the implementation was not approved by Council, the referenced clause would be deleted.
Councillor Cullen posed a question for clarification with respect to the clause of the motion speaking to attrition and/or involuntary separation. In response, Mayor O’Brien confirmed his intent was that the staff reductions could include involuntary separation and he agreed to amend his motion by deleting the phrase contained in brackets.
Councillor Cullen remarked that it was always permissible for members of Council to suggest options for the budget and that motions to cap or reduce staff levels had been proposed in the past. However, he noted such motions often did not succeed because they were incomplete. Further, he suggested such motions were incomplete because they would require cuts in services yet they do not identify the services to be cut. For these reasons, he felt such motions did a disfavour to taxpayers. He again referenced the list of new operating needs found at page 13 of the report and submitted that if staffing levels were capped or reduced, there would not be the capacity to implement these new operating needs. He suggested that if the Mayor or any other member of Council believed some specific service delivery area needed to be reduced or eliminated, they should have the good faith to communicate this to the taxpayers. However, he maintained that the notion of simply capping was not reasonable in light of the fact that the City was growing.
Responding to a question from Councillor Hume for clarification, Mayor O’Brien confirmed the intent of his motion related specifically to the tax-supported budget and he agreed to amend the motion accordingly.
In response to a further question from Councillor Hume, Mr. Kirkpatrick advised that when the Long Range Financial Plan Sub-Committee conducted a detailed review of the City’s administrative functions, less than 20 FTEs were reduced through the process, though he could not remember the exact number.
Councillor Wilkinson believed things were moving in the right direction in terms of implementing changes at the City and she did not have a problem with capping staff levels, excluding growth and emergency services. Although she felt that in and of itself, this would not have the desired effect, she indicated she did not mind supporting it as a short-term solution. However, in the longer term, she stressed the importance of changing the culture to transform the City into more of a client-centred organization.
Councillor Bloess referenced the introductory clause of the motion that talked about the Auditor General (AG) having reported extensively on the large number of opportunities for reducing FTEs. He indicated this was not his recollection of the Auditor General’s reports and submitted that, had it been the case, it would behove staff to implement such recommendations. Mr. Kirkpatrick responded affirmatively.
Responding to a follow-up question from the Councillor, Mr. Kirkpatrick recalled the Auditor General’s reports since 2005 and confirmed that there had not been a significant number of FTEs identified to be reduced through the AG’s recommendations.
Councillor Bloess indicated he liked where the motion was going. However, he shared some of Councillor Cullen’s concerns and he stressed the importance of setting realistic targets. He submitted that by focusing at the tax-based budget and exempting front-line emergency services, the motion significant reduced the opportunities for making cuts.
In response to a question from Councillor Bloess with respect to laying out options for Council’s consideration, Mr. Kirkpatrick re-iterated his earlier comments with respect to what was already incorporated in the staff report in terms of reduction options and the list of criteria for identifying options: new revenue opportunities first; deferral of new needs not yet implemented; deferral of capital projects with operating impacts; reductions to growth pressures to maintain existing service levels; and reductions to existing programs and services. He maintained that with these budget directions, there would be cuts to programs, which would involve FTEs. He submitted these were the same issues as were in front of Council last summer and as were in front of Council in adopting the high-level fiscal directions for 2009 and 2010 last December.
Councillor Bloess acknowledged that members of Council may not like the options staff would put before them. However, he still wanted to see the options.
Speaking to the new programming listed on page 13 of the report and referenced earlier by Councillor Cullen, Mr. Kirkpatrick confirmed that not all of these areas would be delivered through municipal FTEs. Some would be accomplished through private sector contracts and/or community partners.
Councillor Bloess felt the motion gave a free pass to the Police, which had experienced 10% budget increases year over year and he felt there would come a point when Council’s representatives on the Police Board would have to take a position and direct the Chief to hold the line.
Councillor El-Chantiry referenced the March 3, 2008 meeting Minutes of the Long Range Financial Plan Sub-committee, in which the Mayor indicated he had done a branch-by-branch review and was satisfied with the number of FTEs at the City and indicated he was puzzled by this motion. Like his colleagues, he expressed a desire to see options. However, he referenced options presented in previous budget exercises and remarked that no one could stomach such cuts. He referenced the e-government report and the opportunities it may present and he wondered if this motion duplicated the efforts already underway in terms of the previously approved $100M efficiency target. Mr. Kirkpatrick noted that the $100M efficiency target included a $5M investment in order to achieve 15% of that target through investments in technology. He submitted this was a relatively small investment and therefore it represented smaller initiatives. He believed the e-government task force felt there was an opportunity for a higher quantum level of savings through productivity improvements by making very large investments in technology. He submitted this would require a change in culture, a different focus, and it would take time.
With respect to the Police budget, Councillor Deans noted that the motion exempted front-line Police. She maintained this did not exempt the civilian staff within the Police Service. Therefore, she submitted there could be recommendations to that effect.
Councillor Brooks felt this motion was a step in the direction many resident expected and had expected since amalgamation. He remarked that FTEs were going up but residents were not seeing improvements in the services they received. He stated there was always an assumption that any cuts or capping would result in impacts to service levels. However, he was not sure the data would support this theory. He noted that there had been freezes in the past and the wheels had not fallen off the wagon. He also noted that the Federal government had gone through a period of downsizing in the early ‘90s and yet their services had continued. He asked that staff not tell him why it could not be done but rather to tell him how it could be done. He believed this motion told senior management to tell Council how it could be done. He maintained the City could not continue to hire more and more people and he did not agree that taxpayers were getting more for less. He referenced the Auditor General’s recent report as it pertained to growth projections and recalled a time when the population was projected to reach 1 million by 1991 and he noted that it never happened. He insisted that Council had to have options and these could not always be to hire more staff or cut services. He asked for other options, besides service cuts.
Responding to questions from Councillor Jellett, Mr. Kirkpatrick re-iterated what was already contained in the budget directions report as well as his interpretation of the Mayor’s motion and he submitted that with the same criteria and the same directions, staff would continue to bring forward similar options. He suggested that if it were up to him, he would recommend the elimination of some programs, versus trimming around the edges of many. Further, he indicated he would look at some of the proposed expansions of programs the City continually approved. He maintained that in light of the previous directions given to staff as well as the guidelines and criteria approve in the recent past, Council members would not like the options coming forward.
Councillor McRae recalled that this Council had stated, time and time again, that certain recreational programs were not to be touched and she wanted to ensure that was clear. Mr. Kirkpatrick indicated he would take this as direction. However, he was unsure what programs Council would want to cut ahead of recreation.
Councillor McRae referenced the recommendations from the Community Budget Advisory Team, which had talked about delivering services different as well as the e-government report. She submitted these were good examples of ideas the City could use to find efficiencies without necessarily adding staff. She indicated this was the kind of creativity she was seeking.
In response to a question from Councillor Brooks with respect to moving to full cost recovery, Mr. Kirkpatrick indicated Council had already taken major steps in that regard in terms of transit, development-related costs and adult recreation programs. Beyond that, he submitted the return would be minimal. Speaking to the exemption to development charges in the downtown area, Mr. Kirkpatrick noted the Development Charge By-law was due to be reviewed and would be before Committee and Council this year. However, he explained the City was very close to full cost recovery on the residential charges and he reminded Committee that there was a strong policy rationale for Council to consider with respect to this issue.
Councillor Deans indicated she would support the motion. However, she wanted it to be a realistic exercise and not a wild goose chase. At the same time, she re-iterated her belief that every budget exercise should begin by considering everything; whether there could be job sharing or rationalization, whether service levels were higher than the provincial standards, etc. She also re-iterated her desire for more information and more details rather than less. She did not want staff to come back with options they should know would be unpalatable for Council. She wanted staff to tell Council about new ways of doing business, which may be more efficient and could result in reductions in FTEs or where new programs were not financially viable. Although she did not foresee voting for 500 FTE reductions because she believed it was not realistic, she maintained that she wanted to see the options.
On wrap-up, Mayor O’Brien indicated he thought this had been a positive discussion. He felt members of Council had looked at this and taken on their responsibilities accordingly. He remarked that the City Manager represented 13,500 FTEs and he did so in a very precise and positive way. However, members of Council represented 846,000 citizens of the City of Ottawa. He noted that the debate had not been about the economic climate and he re-iterated his concerns with respect to a general economic slow down. He believed what he requested was a prudent, business-like approach to taking this challenge and turning it into an opportunity. He was asking that staff look into investing in technology, not in the short-term but in the long-term. He submitted that taking a long-term approach would put the City in line with other organizations and other governments, which would result in greater support from other governments, organizations and the community. In order to drive the investment, he was asking the City Manager to cap FTEs. He maintained that Council would have an opportunity to review these options at budget time and he felt it was important to see what the options would be. In closing, he asked Committee to support the motion.
Moved
by Mayor L. O’Brien
WHEREAS the citizens of Ottawa were promised
that amalgamation would bring increased staff efficiencies;
AND WHEREAS the Mayor's Task Force on
e-Government has suggested that through capital investments in technology
infrastructure and with the effective use of technology that service standards
program delivery can be maintained or improved without the need for additional
staff;
AND WHEREAS the Auditor General has reported
extensively on the large number of opportunities for reducing the number of
Full-Time-Equivalent employees;
THEREFORE BE IT RESOLVED that staff be
directed to include in the 2009 draft tax-supported budget proposed options to
cap the FTE total at 13,590.28 (the budgeted amount for 2008) and identify
options to reduce the total number to 13,090.28 excluding growth and related
increases for front-line Police, Fire and Paramedics to be achieved by December
31, 2009;
BE IT FURTHER RESOLVED that these reduction
options include the introduction and investments of new technology and/or
business process reengineering;
BE IT FURTHER RESOLVED that these cost
reduction options also include involuntary departures from the City of Ottawa;
and
BE IT FURTHER RESOLVED that the proposed
growth of the Police, Paramedic and Fire Service FTE be accommodated with an
offsetting reduction as part of the proposed reduction of 500 FTE's.
CARRIED
YEAS (10): R. Bloess, G. Brooks, R. Chiarelli, D. Deans, E. El-Chantiry, R. Jellett, M. McRae, M. Wilkinson, S. Desroches, Mayor O’Brien
NAYS
(1): P. Hume
Committee then voted on the item, as amended.
1. That the
Corporate Services and Economic Development Committee (CSEDC) discuss this
report at its June 17, 2008 meeting and then forward to City Council on June
25, 2008 for consideration and approval;
2. That the
2009 draft budget be developed in accordance with the fiscal directions adopted
by Council during the 2008 budget process and in accordance with the Fiscal
Framework adopted in 2007;
3. That the
2010 and 2011 drafts budgets be developed in accordance with the fiscal
directions as detailed in this report; and
4. That the
process and timetable for developing and approving the 2009 draft budget and
the 2010 and 2011 high level estimates be adopted as detailed in this report; and
5. WHEREAS the citizens of Ottawa were promised
that amalgamation would bring increased staff efficiencies;
AND WHEREAS the Mayor's Task Force on
e-Government has suggested that through capital investments in technology
infrastructure and with the effective use of technology that service standards
program delivery can be maintained or improved without the need for additional
staff;
AND WHEREAS the Auditor General has reported
extensively on the large number of opportunities for reducing the number of
Full-Time-Equivalent employees;
THEREFORE BE IT RESOLVED that staff be
directed to include in the 2009 draft tax-supported budget proposed options to
cap the FTE total at 13,590.28 (the budgeted amount for 2008) and identify
options to reduce the total number to 13,090.28 excluding growth and related
increases for front-line Police, Fire and Paramedics to be achieved by December
31, 2009;
BE IT FURTHER RESOLVED that these reduction
options include the introduction and investments of new technology and/or
business process reengineering;
BE IT FURTHER RESOLVED that these cost
reduction options also include involuntary departures from the City of Ottawa;
and
BE IT FURTHER RESOLVED that the proposed
growth of the Police, Paramedic and Fire Service FTE be accommodated with an
offsetting reduction as part of the proposed reduction of 500 FTE's.
CARRIED
as amended