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Print | YORK REGION>About Us>Annual Reports>1999 |
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| Source : York Region Finance Department | Source : York Region Finance Department |
THE BUDGETARY PROCESS
Developing the Budget
Provincial legislation requires that the Region prepare a balanced operating and capital budget for each fiscal year. Regional Council provides specific guidelines for departments as part of the budgetary process. For 1999, the Budget Guidelines required departments to continue to maintain a zero per cent increase for existing programs, but to identify changes in revenue and expenditure associated with Local Services Realignment and Special Projects or Initiatives that would be considered by Council. The Guidelines also required that a financial outlook for the year 2000 be provided for all programs in addition to the 1999 estimates. Furthermore, the estimates associated with tax levy support programs are identified and considered separately from services such as water and wastewater that are self-sustaining through user rates.
Prior to the Legislative Review Process, the Budget Review Committee comprised of the Regional Chair, the Chief Administrative Officer, the Treasurer, and the Director of Financial Planning, review department budgets to ensure compliance with Council guidelines.
In addition to the operating departments, the Police Services Board and the Conservation Authorities are required by statute to submit their service plans to Council for budgetary consideration.
Legislative Review Process
Standing Committees review the proposed budget prior to consideration by Regional Council. This provides departments, boards, and agencies with an opportunity to present their respective budget submissions and highlight significant issues. The Finance and Administration Committee then incorporates the recommendations of all the Standing Committee reviews and forwards to Council a recommendation of the overall budget which sets out the impact on the tax levy and user rates.
THE 1999 APPROVED BUDGET
The 1999 Budget was approved by York Regional Council on April 29, 1999. The Budget addressed additional pressures associated with policing, enhancements to regional reserves, ongoing adjustments for Local Services Realignment initiatives and the pooling of social and housing costs within the GTA, as well as the financial impact of 3.8% growth in property assessment.
The total budget for expenditures was $737.0 million comprised of the operating budget of $470.5 million, the capital budget of $221.7 million, contributions to reserves and reserve funds of $28.8 million and debt repayment of $16.0 million.
The 1999 Budget anticipated funding from tax revenues/user fees, fees and services and other of $464.9 million, debenture financing of $32.7 million, subsidies and grants of $88.5 million and contributions from reserves and reserve funds totaling $150.9 million. The distribution of one dollar of property taxes is summarized as follows:
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| Source : York Region Finance Department | Source : York Region Finance Department |
1999 FINANCIAL RESULTS
The net result of the Region's 1999 financial activities was a growth in the consolidated fund balances of $133.5 million. The highlights of the financial results are detailed below.
Revenues
Total 1999 revenues of $662.3 million financed current fund operations, reserves and reserve funds and capital expenditures.
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| Source : York Region Finance Department |
Current Fund Operations totalled $543.0 million in 1999. Of this amount, $442.5 million was raised through taxation and water and wastewater user fees. Provincial and federal transfer payments amounted to $75.6 million and revenue of $30.3 million resulted from fees and services and other.
Development contributions of $93.0 million were made to the Development Charges Reserve Fund in 1999.
Interest earned on Reserves and Reserve Funds totalled $20.9 million.
Financing for capital expenditures was comprised of $1.8 million from provincial and federal transfer payments and $3.7 million for work done on behalf of developers and area municipalities. Capital financing was also provided from water and wastewater rates and capital reserves in the amount of $88.1 million exclusive of interest earned on sinking funds.
Provincial regulation limits the amount of interest and debt repayment that a municipality may include in its annual estimates. This in turn limits the amount of new debt that a municipality may raise for a particular year. As of December 31, 1999, York Region had unused debt capacity equivalent to $75.8 million of additional annual interest and debt repayments as determined through this regulation. This represents a significant increase in capacity due to the changes in the regional budget resulting from Local Service Realignment.
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| Source : York Region Finance Department |
Expenditures and Financing Costs
Current Fund Expenditures
Expenditures for Current Fund Operations totalled $429.4 million in 1999. The largest component was Social and Family Service expenditures of $142.0 million for Ontario Works and employment services and GTA pooling. Social Housing pooling costs were $63.5 million. Protection to Persons and Property expenditures of $79.3 million were for Police Services and funding to the Conservation Authorities. Environmental Services costs represented water, wastewater and solid waste services totalling $65.1 million. Transportation service costs of $28.5 million included costs for provincial and municipal road transfers. The Health Services expenditure of $20.5 million included long-term care facilities costs for the York Region Newmarket and Maple Health Centres and costs for Ambulance Services. General Government expenditure of $27.9 million included $8.8 million for York Region's share of funding for Ontario Property Assessment Corporation. Planning and Development Services of $2.7 million included planning, geographic information systems and the cost of several Human Resources Development Canada initiatives.
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| Source : York Region Finance Department |
Capital Fund Expenditures
Capital Fund Expenditures made in 1999 totalled $98.3 million. The largest expenditures were made for road improvements and expansion of the traffic system. Environmental service expenditures represented construction of water, and wastewater infrastructure. General government capital expenditures of $9.0 million were made for the implementation of the Region's financial and human resources information systems and Y2K project costs. Police capital included the completion of the District #3 Police Headquarters, communications and the computer assisted dispatch system. Planning and development capital represents capital acquisitions for the geographic information system.
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| Source : York Region Finance Department |
ONGOING PROVINCIAL INITIATIVES
Local Services Realignment
In 1999, the Province made further changes to the funding responsibilities for services delivered by municipal governments as part of its Local Services Realignment initiative. It agreed to share 50% of the municipal cost for Public Health and Land Ambulance for services approved by the Ministry of Health. However, it also reduced the amount it would fund administrative costs associated with municipal childcare programs from 80% to 50% commencing July 1, 1999. These initiatives resulted in a net benefit to the Region of York in 1999 of approximately $12.2 million.
Continuation of Tax Mitigation Programs for Multi-Residential, Commercial and Industrial Classes
In 1998, legislation was enacted to limit the property tax reform related tax increases for certain properties resulting from the 1996 province-wide reassessment. Reform related tax increases for the multi-residential, commercial and industrial classes were limited to a maximum of 10 per cent, 15 per cent and 20 per cent for the years 1998, 1999, and 2000, respectively over the amount paid in 1997. To meet the requirements of this legislation, Council adopted a methodology permitted under the Fairness for Property Taxpayers Act in which tax revenue lost from capping those properties which experienced a tax increase would be recovered by applying a uniform clawback at a rate established by the Region against those properties that experienced a tax decrease.
The protection afforded under the Fairness for Property Taxpayers Act was expected to expire after the year 2000; however, in 1999, the Minister of Finance stated that, "the business community can rest assured that our Government will ensure that all existing tax protection tools will be available to municipalities and that current tax limits will continue in effect every year until tax fairness is fully achieved."
In anticipation of new legislation that would continue a form of tax mitigation for these property classes, several municipal organizations have prepared recommendations on this matter for consideration by the Province. While the Minister of Finance has not announced when this legislation will be introduced, it is expected that any new tax mitigation program would remain revenue neutral for the Region of York.
Provincial-Federal Social Housing Agreement
As part of the Local Service Realignment that occurred in 1998, municipalities assumed the full cost of funding social housing. On November 17, 1999, the Ministry of Municipal Affairs and Housing announced that it had reached an agreement with the Government of Canada with respect to federally administered co-ops. Under the terms of the new agreement, the cost of administering these co-ops were to be transferred to the federal government on October 1, 1999. While it is expected that this agreement will result in some savings to the Region of York from federally administered properties, both within the Region and those properties that were cost shared by municipalities across the Greater Toronto Area, the full impact amount has not yet been determined.
Service Based Business Planning – Measuring Performance Outcomes
In March 1999, Regional Council adopted a strategic Multi-Year Corporate Plan (MYCP) developed by over 400 employees. The Financial Strategy developed in the MYCP outlined the need for longer-term business plans, which would proactively address Regional program/service delivery needs linked to the Region's budget approval process. The year 1999 marked the first year whereby consolidated multi-year business plans were prepared for all key Regional program areas.
Importantly, the business plans to incorporate performance measures into each program are to assist with understanding delivery and evaluation.
The new process will demonstrate to taxpayers how their dollars are being managed and what service delivery outcomes are actually being achieved.
The corporate business planning system integrates key objectives (targets), work initiatives, budgets and performance indicators for each regional service. Performance measures are a crucial element of York Region's business planning system - they aid in setting appropriate cost and quality targets, and they allow an evaluation of actual success in meeting those targets.
Each cycle of business planning improves the ability to deliver quality services and to evaluate results in order to promote continuous improvement and ensure public accountability.
LOOKING FORWARD...OUR STRENGTHS
York Region continues to develop its progressive financial and program management abilities to take advantage of the opportunities and to meet the challenges as a result of the major growth expectations in its communities over the next 10 years.
In September 1999, Council adopted new guidelines with respect to the development of future budgets. The new guidelines stemmed from the principles maintained in the Financial Mission Statement discussed earlier, will require that comprehensive business plans be developed and maintained by each service provided by the Region to meet its overall corporate strategy. The business plans, which look forward for three years, will include the objectives and work initiatives planned for each service, together with their financial requirements. Performance indicators and external benchmarks will also be key information for Council to consider.
In 1999, the Region grew by over 40,000 new residents and 25,000 new employees. To put this growth in perspective, each year the Region is growing at a rate of a town the size of Aurora.
Assessment growth from increased realty taxes has averaged over 3.5% the prior few years, and it is anticipated that will continue over the short-term future.
Providing services to over 700,000 residents and 350,000 employees and accommodating the needs of growth, requires proactive financial management and development of a sustainable strategy. York Region achieved many successes in 1999 through Community Partnerships, innovative service delivery and excellence in customer service. Our continued AAA rating by the Canadian Bond Rating Service and upgrading to Aaa by Moody's Investors Service demonstrate confidence in the strength of our communities and our future economic strength.
Sandra Cartwright
Commissioner of Finance and Regional Treasurer
