Welcome to the

Town of Olds

2015 Budget Review

For: Town of Olds Open House

Date: December 01, 2014 1

2015 Budget Outline

2

The Annual Budget is made up of three components:

• The 2015 Operating Budget which is presented to Council for approval,

• The 2015 Capital Budget which is presented to Council for approval, and

• The Multi-Year Capital Plan (MYCP) which is presented for information

2015 Budget Outline

3

Council will give final

consideration to the 2015

Operating and Capital Budgets

at their regular Council Meeting

on Monday December 8th, 2014

at 1:00 p.m.

2015 Budget Outline

4

The 2015 budget will be

revisited in the spring of 2015

once the 2014 year end has

been completed and the final

assessment numbers are

known for tax purposes.

2015 Budget Outline

5

Property tax rates are not set at this time.

The property tax rates for 2015 will be set in the spring when

Council has all of the information they require in order

to set the tax rates.

2014 Reflection

6

The beginning of the 2015 budget process

signals that the end of calendar year 2014 is

soon upon us.

A review of a few of the projects budgeted

for 2014 allows us to paint a positive and

progressive picture for the Town of Olds.

2014 Reflection

7

Some of the 2014 Capital projects included: Work was done in the Aquatic Centre to refinish the floors

and replace the lockers! In the Recreation Complex work

was done on the exterior doors and part of the parking lot

was paved.

2014 Reflection

8

Improvements were made to Town streets, sidewalks,

lighting and the water and sewer systems!

2014 Reflection

9

Porta potties

were added to

the parks and

enclosed in

permanent

concrete

structures!

2014 Reflection

10

Operations leased a new grader to use for grading

alleys and plowing snow!

2014 Reflection

11

A new fire truck was purchased in cooperation with the Mountain View Fire Commission! The truck is currently being fabricated and will be delivered early in 2015.

2014 Reflection

12

A new, larger

Sunshine Bus was

purchased in 2014

that enables the bus

to self lower and

raise for improved

wheelchair

accessibility.

Capital Plan

13

2015

Capital 2015

14

A thorough review of planned projects for 2015 was undertaken, and only those projects that were determined to be realistic for completion in 2015 were considered.

The proposed capital budget for 2015 is $4,687,570

Capital 2015 cont’d...

15

The proposed capital budget for 2015 is grouped into the following types of projects:

Roads, Trails & Street Improvement Projects $1.36 M

Water & Sewer Infrastructure $1.95 M

Recreation & Parks Projects $0.40 M

Vehicles & Other Equipment $0.43 M

Building Upgrades (Admin/Complex) $0.52 M

Capital 2015 cont’d…

16

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Town of Olds Capital Spending

2011 Actual (4.3)

2012 Actual (5.9)

2013 Actual (3.9)

2013 Contributed (5.9)

2014 Budget (4.5)

2015 Budget (4.7)

Capital Grants

17

Provincial Grants Amount

Municipality Sustainability Initiative (MSI)

MSI not used in 2014

$2,186,000

241,000

Total Provincial: Capital $2,427,000

Federal Grants Amount

Federal Gas Tax Fund (FGTF)

FGTF not used in 2014

$463,000

60,000

Total Federal: Capital $523,000

Multi-Year

Capital Plan

18

2016 - 2025

Multi-Year Capital Plan

19

It is a requirement of some of the

grant programs that a 10-year

Capital Plan be prepared and

approved each year.

Multi-Year Capital Plan

20

Administration has reviewed the

anticipated future Capital needs of

the Town and has tried to predict

third party funding, grant funding

revenue, the need for debenture

funding, draws from Town reserves

or future tax requirements.

Multi-Year Capital Plan cont’d…

21

The Multi-Year

Capital Budget for

2016 – 2025 is

$80.5 million

Multi-Year Capital Plan cont’d…

22

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

Capital Spending

Town of Olds Long Term Capital Plan

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Multi-Year Capital Plan cont’d…

23

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

Long Term Capital Funding

Town of Olds Funding for Capital Plan

Grants

Debentures

Operations - Utilities

Reserves

Other

Operations - Tax

Sale of Assets

Operating Budget

2015

24

Municipal Assessment and Taxes

2015 Assessment

25

The 2015 budget is based upon preliminary assessment estimates.

• The value of the property for 2015 property tax purposes is the value as determined on July 1, 2014,

• Modification to the assessed value of each property will be made to reflect the condition of the property as of December 31, 2014

2015 preliminary Assessment

26

Based upon the preliminary information

provided by our assessor for budgeting

purposes,

The current 2015 assessment estimate is:

2015 2014

Residential 6.5% 1.8%

Non-residential -0.38% 8.1%

Average 5.1% 3.1%

2015 preliminary Assessment

27

Tax Rates

The amended 2014 Operating budget as approved April 28, 2014 included a 3% municipal tax rate increase in order to cover the costs of snow removal as required by the unusual weather. For 2015 it is anticipated that the 3% increase for snow removal will no longer be required. The proposed municipal tax rates for 2015 are as follows:

2015 2014 2013

Residential 5.5432 5.7095 5.5432

Non-residential 7.5835 7.8110 7.5835

2015 preliminary Assessment

28

Using these tax rates the budgeted tax revenue is as shown below:

2015 2014 2013

Residential 5,620,583 5,288,209 5,222,273

- Snow Levy 158,651

5,446,860

Non-residential 2,132,336 2,141,804 2,098,369

- Snow Levy 64,523

2,206,057 z

7,752,919 7,652,917 7,320,642

Using a 0% tax increase and removing the 3% snow levy, the preliminary assessment figures indicate an approximate $322,906 increase in 2015 municipal tax revenue

Municipal Tax Revenue

29

6,200,000

6,400,000

6,600,000

6,800,000

7,000,000

7,200,000

7,400,000

7,600,000

7,800,000

Tax Revenue Comparison

2011 Actual (6.8)

2012 Actual (7.2)

2013 Actual (7.3)

2014 Budget (7.7)

2015 Budget (7.8)

2015 Operating

Budget

30

Overview

2015 Operating Budget

31

Numerous pressures and

projects had to be

considered in the

development of the 2015

draft budget.

Total Operating Budget 2015

32

Even with the new projects and the pressures the Town expects that

it will be facing...

This first Draft Operating Budget for 2015 presented today is

BALANCED with NO proposed tax increase.

Total Operating Budget 2015

33

Between now and when the property

tax rates are set in the spring, if it is

necessary for Council to address

any additional projects or pressures

that arise, this will change the

proposed budget and might change

the tax situation.

Operating Budget 2015

34

• The net increase in both Revenue & Expense for 2015 over 2014 is $1,099,134 (of which $595,102 is utilities).

• This includes a 4% ($141,782) increase in the Alberta School Foundation and Mountain View Seniors requisition which affects both revenue and expense.

2014 2015 Increase

Revenue 24,274,775 25,373,909 4.5%

Expense 24,274,775 25,373,909 4.5%

Net 0 0

Total Operating Budget 2015

35

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

LegislativeServices

GeneralGovernment

Policing &Emergency

Services

PublicWorks &Planning

Utilities SocialDevelop &

CommServices

Recreation &Parks

CulturalPrograms

2015 Operating Budget Expenditures Comparisons

2013

2014

2015

*Excluding Requisitions*

2015 Operating

Budget

36

Utilities

Utilities Operating Budget

37

• The Utilities (Environmental Services)

Operating Budget consists of budgets for

the provision of water, wastewater, storm

water and solid waste services.

• The Utilities Operating Budget of

$7,854,580 (2014 – $7,259,478) is funded

solely through the sale and collection of

revenue for services provided.

2014 Utilities Water and Wastewater

38

• Mountain View Regional Water Services Commission has informed the Town of Olds that the rates charged to the Town will increase by $0.05 per cu m on April 1, 2015. This increased cost of water will require that the water variable rate charged by the Town also increase.

• The Town of Olds is currently sending 2,000 cu m per day to the South Red Deer Regional Wastewater Commission treatment facilities in Red Deer for treatment. The Commission is forecasting that this volume will increase to 4,000 cu m per day as of July 1, 2015. It is projected that this change will increase the cost of wastewater treatment by $625,600. This will require an additional rate increase of $0.45 per cu m.

• This draft budget does not anticipate any increases to the fixed rates for water or wastewater.

2014 Utilities Cont’d… Solid Waste

39

• Mountain View Regional Waste Management Commission has informed the Town that tipping and handling fees will increase as of January 1, 2015. It is anticipated these increases will cost the Town an estimated $206,270. This will require a solid waste rate increase of $4.44 per month.

• In addition, Mountain View Regional Waste Management Commission is anticipating requisitioning the Town with a special levy of $212,775. If this levy is applied directly to the monthly utility invoice it would mean an increase of $5.45 per month for each utility account.

• This does not take into account any changes from the current schedule of picking up bins on a three week cycle. Any changes to that schedule would increase the cost to the Town and to the customers.

Residential Utility Rates

40

RESIDENTIAL UTILITY RATES Proposed Proposed

2010 2011 2012 April 1,

2013 April 1,

2014 Jan 1,

2015 April 1,

2015

Sewer Flat Rate 10.08 10.08 10.42 10.42 10.42 10.42 10.42

Sewer Variable Rate Residential 1.48 1.48 1.48 2.78 2.78 2.78 2.78

Commercial 1.93 1.93 1.93 3.23 3.23 3.23 3.23

Water Flat Rate 9.54 9.54 9.86 9.86 9.86 9.86 9.86

Water Variable Rate 2.31 2.51 2.51 2.61 2.66 2.66 2.71

Solid Waste 18.87 18.87 18.87 19.30 19.30 23.74 23.74

Blue bin 2.00 2.00 3.50 3.50 3.50

Average Residence 5 m3 57.44 58.44 61.10 68.53 70.28 74.72 74.97

Average Residence 9 m3 72.6 74.4 77.06 90.09 92.04 96.48 96.93

Average Residence 20 m3 114.29 118.29 120.95 149.38 151.88 156.32 157.32

41

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

Water, Wastewater & Solid Waste

2011 Actual (4.1) 2012 Actual (4.5) 2013 Actual (6.3) 2014 Budget (7.2) 2015 Budget (7.8)

2015 Utilities Cont’d…..

Operating Budget (excluding Utilities)

42

2015

43

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

Operations Spending (excl. Amortization)

Town of Olds Operations (excl Utilities)

2010 Actual (8.9)

2011 Actual (9.0)

2012 Actual (9.7)

2013 Acutal (11.3)

2014 Budget (11.6)

2015 Budget (11.8)

44

Legislative Services 2.2%

General Government 21.2%

Policing & Emergency Services 19.0%

Public Works & Planning 19.2%

Social Develop & Comm Services

8.4%

Recreation & Parks 25.0%

Cultural Programs 4.9%

2015 Operating Budget Expenditures (excl. Utilities)

2015 Operating Budget By Spending Programs

(excluding Utilities and Requisitions)

45

-

500,000.00

1,000,000.00

1,500,000.00

2,000,000.00

2,500,000.00

3,000,000.00

3,500,000.00

LegislativeServices

GeneralGovernment

Policing &Emergency

Services

Public Works &Planning

Social Develop& CommServices

Recreation &Parks

CulturalPrograms

2013

2014

2015

Operating Grants

46

Operating Grants Amount

(FCSS): Family, Community and Support

Services

$162,780

MSI Operating: Municipal Sustainability

Initiative – Operating

$76,150

MPAG: Municipal Policing Assistance Grant $268,090

New Police Officers Grant $100,000

Total Operating Grants $607,020

Operating Grants Cont’d…

47

County Contributions Amount

Recreation Funding – Aquatic Centre $149,960

Recreation Funding – Sportsplex $150,000

Recreation Funding – Library $28,360

FCSS Funding $38,556

Total County Contributions $366,876

2015 Draft

Operating & Capital Budgets

48

AS PRESENTED:

Capital Budget 2015 $ 4,687,570

Operating Budget 2015

$25,373,909

Amortization

49

2015

2015 Amortization

50

Public Accounting Sector Board

(PSAB) Section 3150 requires all

governments to report Tangible

Capital Assets (TCA) on their

Statement of Financial Position (Balance

Sheet) and requires that the assets be

amortized over a reasonable life span

(Depreciation).

Capital Asset Policy #202C

51

The Town’s Capital Asset Policy states:

“Annual amortization expense shall

be estimated and included in the

Annual Budget of each respective

operating department and shall be

financed.......to finance future

replacements and betterments of

tangible capital assets.......”

Amortization Cont’d…

52

• Amortization is the process of recognizing the loss in the value of the capital assets owned by the Town of Olds as those assets age.

• Part of the purpose of recognizing the loss in the value of the capital assets is to provide the actual dollar value that must be set aside in order to be able to replace assets as they reach the end of their useful life.

• The funds that are set aside can then be used when it is time to replace assets

Amortization Cont’d…

53

• For 2015 the amortization will be in the range of $3.0± million (2013 - $2.5 million).

• $439,700 is the amount in the budget to be set aside for amortization.

• In 2015 the total capital budget is $4,687,570. Of this total, $923,120 is being budgeted from operations to replace older assets.

• $751,810 is the budget amount of the principal and interest payments for the current outstanding loans used to build new asset additions.

• Potential unfunded amortization can be calculated in different ways.

54

0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

70,000,000

TCA Carrying Value

Town of Olds

2008 ($46.7 million)

2009 ($49.4 million)

2010 ($55.7 million)

2011 ($57.6 million)

2012 ($61.0 million)

2013 ($67.9 million)

Additional Charts

Debt, Equity in TCA,

Reserves, etc.

55

56

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

Total Debt

Town of Olds Total Debt

2008 Actual (5.7)

2009 Actual (5.2)

2010 Actual (5.6)

2011 Actual (7.5)

2012 Actual (13.4)

2013 Actual (12.4)

2014 Projected (17.9)

57

-

10,000,000.00

20,000,000.00

30,000,000.00

40,000,000.00

50,000,000.00

60,000,000.00

Equity in TCA (carrying value minus total debt)

2008

2009

2010

2011

2012

2013

58

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

Accum Amort Net Debt Equity in TCA

Town of Olds

Tangible Capital Assets

59

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Reserves

Town of Olds Reserves

2008 Actual (4.4)

2009 Actual (5.8)

2010 Actual (6.4)

2011 Actual (5.9)

2012 Actual (5.8)

2013 Actual (6.5)

60

Town of Olds

(10,000,000.00)

-

10,000,000.00

20,000,000.00

30,000,000.00

40,000,000.00

50,000,000.00

60,000,000.00

70,000,000.00

80,000,000.00

2009 2010 2011 2012 2013

Accumulated Surplus Breakdown

Equity in TCA

Reserves

Unrestricted Surplus