By: Councillor Austin Davey Interim Chair Budget Committee of the Whole

1. By: Councillor Austin Davey Interim Chair Budget Committee of the Whole

2. Council’s Direction Council Resolution #2001-575 stated: “Be it resolved that the Council of theCity of Greater Sudbury directs theChief Administrative Officer to prepare the 2002 Operating Budget estimates to reflect the following guideline: that the net basic budget increase be zero percent.” Budget Committee of the Whole

3. Purpose • To review 2002 Budget facts and figures • To outline alternative approaches to resolving 2002 Budget challenges • To outline a schedule of budget meetings Budget Committee of the Whole

4. Magnitude of 2002 Budget Issues • approximately $4.3 million of ongoing costs related to amalgamation • approximately $10.2 million in 2002 unavoidable costs • an annual $40 million+ capital deficit due to long-term under-funding Budget Committee of the Whole

5. 2001 Adjusted Base Budget Estimates Budget Committee of the Whole

6. 2002 Base Budget Estimated Increases Budget Committee of the Whole

7. 2002 CurrentBase Budget Budget Committee of the Whole

8. Traditional Budgeting Options • efficiencies and process improvements • Revenues • capital reductions • service/program reductions • one-time offsets • Other Budget Committee of the Whole

9. 2001 Revised Levy Budget Committee of the Whole

10. 2001 Adjusted Base(Ongoing Costs Related to Amalgamation) Budget Committee of the Whole

11. 2002 Base Budget Estimated Increases Budget Committee of the Whole

12. 2002 Base Budget Estimated Increases (con’t) Budget Committee of the Whole

13. 2002 Base Budget Estimated Increases (con’t) Budget Committee of the Whole

14. 2002 Base Budget Estimated Increases (con’t) Budget Committee of the Whole

15. The numbersare large! They are here to stayand must be addressed immediatelyin a different wayif we are going to be a sustainable communitythat not only survives, but thrives Budget Committee of the Whole

16. Challenges present Opportunities • to show leadership, move forward, plan for the future HOW? By adopting a new budgeting process: • a process that allows us to deal with the issues in the current budget year in a unique short-term fashion • a process that requires us to look ahead and address our fiscal needs over the next ten years Budget Committee of the Whole

17. Sustainable Community Model Prudent Fiscal Management Opens the door to options not available under traditional year-to-year budgeting methods Two-step process: 1. the development of a short-term financial plan for 2002 only, and, more importantly, 2. the development of a long-term financial plan for the City, (which would be presented to Council in early October.) Goal: A sustainable community Budget Committee of the Whole

18. Public input property and business assessment base forecasts future and emerging revenue streams pressures/opportunities impacting expenditures required levels/sources capital financing fiscal policy for debt management adequacy/levels of reserves and special funds property tax policy and rates financial indicators current financial management policies current financial planning / budget process best practices in long-range financial planning sustained economic growth risk analysis Long-TermFinancial Plan Budget Committee of the Whole

19. Process Phase 1 - Issue identification Phase 2 - Identify policy options Phase 3 - Policy evaluation Phase 4 - Financial Plan Result – Sustainable Community Budget Committee of the Whole

20. City of Edmonton adopted a Long-Term Financial Plan in 1998 to guide financial decision-making to 2008 by addressing financial issues facing the City and outline effective stategies to deal with these issues Long-Term Financial Plan: an innovative and progressive component of a professionally managed financial system will support our ability as a City to efficiently finance public services on an ongoing basis City of Edmonton adopted a Long-TermFinancial Plan Budget Committee of the Whole

21. helping the City to better understand / address its long-term commitments providing accurate and timely information providing principles to guide decision-making providing a policy approach to planning ensuring municipal responsibilities are aligned with appropriate revenue sources Result: New approach to financial management that shifts the emphasis from bottom line financial concerns to service delivery, within a longer-term financial planning horizon. Benefits forCity of Edmonton Budget Committee of the Whole

22. Benefits to the Sustainable Community Modelfor the City of Greater Sudbury • Provides for public participation and input into Council decisions; • Fosters confidence in both the public and the business community by demonstrating leadership and planning by this Council; • Provides a sound basis for a short-term 2002 solution that is not available under any other option; Budget Committee of the Whole

23. Benefits to the Sustainable Community Modelfor the City ofGreater Sudbury • Provides for third party involvement; i.e. the hiring of an outside expert to work with staff to prepare long-term options for Council’s consideration; • Supports Council’s direction of “Council control through policy”; • Continues to keep open the political options of approaching the Federal and Provincial Governments with the same urgency that exists today. Budget Committee of the Whole

24. Unique Opportunity Sustainable Community Model An opportunity to budget differently and keep us on a solid track In keeping with Council’s Vision: “a growing, world-class community bringing talent, technology and a great northern lifestyle together.” Traditional method of budgeting - not sustainable Will result in: significant reduction in services, downsizing(staff reductions) and/or drastic reductions in capital,all of which are not sustainable in the long-term. Budget Committee of the Whole

25. 2002 Short-Term Solution The Sustainable Community Model allows for a 2002 short-term solution that would not be available under any other option: • the use of reserves to offset ongoing costs in 2002 only provided there is a long-term financial plan being put in place for 2003 and beyond. Budget Committee of the Whole

26. Traditional Budgeting In traditional year-to-year budgeting, options in all of the following categories are considered: a) Efficiencies; b) Service reductions and/or eliminations; c) Long-term capital reductions; d) One-time offsets; e) New or enhanced revenue sources; f) Other. Budget Committee of the Whole

27. Traditional Budgeting • Favors year-to-year management, and is contrary to the sustainable cities concept, and the outcomes of the CGS’s visioning exercise; • Provides no perception of leadership or planning to the public and/or business community on behalf of Council; • Perpetuates ward politics (not in my ward); • Provides for no policy framework; • Provides for no opportunity for public input on policy issues; and • Reduces the urgency of a new deal with the Federal and/or Provincial Governments. Budget Committee of the Whole

28. Seeking Council Support • Adopt the Sustainable Community Model of budgeting: with a short-term solution and long-term financial plan • Hire an expert to assist in the development of the Long-Term Financial Plan with a target completion dateof October 2002 Budget Committee of the Whole

29. Benefits to the Sustainable Community Model • Provides for public participation and input into Council policy decisions; • Fosters confidence in both the public and the business community by demonstrating leadership and planning by this Council; • Provides a sound basis for a short-term 2002 solution that is not available under any other option; • Provides for third party involvement; i.e. the hiring of an outside expert to work with staff to prepare long-term options for Council’s consideration; • Supports Council’s direction of “Council control through policy”; • Continues to keep open the political options of approaching the Federal and Provincial Governments with the same urgency that exists today. Budget Committee of the Whole

30. Thank You! By: Councillor Austin Davey Interim Chair Budget Committee of the Whole Questions? Budget Committee of the Whole