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To
the Members of Regional Council, Residents, and Ratepayers of the
Regional Municipality of York, Newmarket, Ontario
Herein are presented the financial statements of the Corporation
of The Regional Municipality of York for the year ended December
31, 2003. This report highlights ongoing financial policies, practices,
budgetary initiatives, and financial performance related to the
Region’s programs and service delivery and presents the key
financial results for the 2003 fiscal year.
The financial statements and related information contained in this
report are the responsibility of the management of the Corporation.
They have been prepared in accordance with generally accepted accounting
principles for local governments established by the Public Sector
Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants.
Management is confident that it has developed a system of internal
control that ensures the financial information presented in the
financial statements is both accurate and reliable.
The accounting
function of the Corporation is the responsibility of the Regional
Treasurer who ensures that all corporate accounting records and
reports conform to Council budgetary requirements, by-laws, policies,
procedures, accounting principles and financial reporting requirements.
York Region’s
financial statements as well as the Financial Information Return
(FIR) which is submitted to the Ministry of Municipal Affairs and
Housing are prepared on a basis consistent with the accounting practices.
The accounting
firm of KPMG LLP was appointed by Regional Council to perform an
independent audit of the Region’s 2003 financial statements.
Its reports are included with the financial statements.
For the sixth
consecutive year, the Government Finance Officers Association of
the United States and Canada (GFOA) awarded a Canadian Award for
Financial Reporting to The Regional Municipality of York for its
annual financial report for the fiscal year ended December 31, 2002.
The Canadian Award for Financial Reporting program was established
to encourage municipal governments throughout Canada to publish
high quality financial reports and to provide peer recognition and
technical guidance for officials preparing these reports.
In order to
be awarded a Canadian Award for Financial Reporting (CAnFR), a government
unit must publish an easily readable and efficiently organized annual
financial report, whose contents conform to program standards. Such
reports should go beyond the minimum requirements of generally accepted
accounting principles and demonstrate an effort to clearly communicate
the municipal government’s financial picture, enhance an understanding
of financial reporting by municipal governments, and address user
needs. Management believes the current report is reflective of the
high standards associated with the CAnFR award and it will be submitted
to GFOA.
The financial management and control of The Regional Municipality
of York is largely governed through by-laws that prescribe purchasing,
accounting, investment, risk management procedures and debt policy.
York Regional Council has sole authority to allocate funds through
the approval of the operating and capital budgets.
The Region
of York has established risk management programs and procedures
to protect the Corporation's assets against the financial consequences
of accidental loss. Through a combination of self-insuring and the
purchase of insurance, corporate assets are preserved and public
service capabilities are protected. Insurance coverage is purchased
from a combination of traditional insurers and from a municipal
insurance exchange.
The Region
has also established a Risk Management Committee. This cross-functional
committee helps to ensure, from a Regional perspective, that the
various risk management programs support the business of the Region.
The committee reviews claims against the Corporation to prevent
them from reoccurring or at the very least minimize adverse impact
or likelihood of reoccurrence.
Regional Council
approved the establishment of an Internal Audit role to assist the
Region to achieve its objectives. This role provides advice on managing
and controlling risk, performs independent appraisals on control
systems, and participates as an advisor in the identification of
efficiencies and improvements in new and existing processes, programs
and services.
Since 1996 York Region’s population has grown by 39% and is
one of the fastest growing municipalities in Canada. In 2003, York
Region accounted for 27% of population growth in the Greater Toronto
Area (GTA), the largest single share of the GTA total. By the year
2026 it is estimated that York Region’s population will be
over 1.2 million and employment will be nearly 700,000.
Manufacturing
continues to be the Region’s primary employment sector, with
strength in the printing, plastics, computer, auto parts and furniture
manufacturing categories. There has been strong growth in the business
services, retail trade, education and finance, insurance and real
estate sectors with average annual growth rates in excess of 6.0
% since 1998.
Between 1998
and 2003, employment in York Region has grown at an annual average
rate of 7.1%. Comparatively, national and provincial employment
grew at annual average rates of 2.3% and 2.7% respectively
Total construction
value was over $2.7 billion in 2003, ranking York Region among the
highest in Canada. All elements of the construction sector remained
strong as industrial, commercial and institutional (ICI) construction
continued to generate 32% of the total value. In the residential
sector, 10,410 homes were completed and 11,049 new residential units
started within York Region last year.
This trend
of economic vitality is anticipated to continue in 2004 and beyond.
On February 21, 2002 Regional Council adopted Vision 2026, a strategic
blueprint for creating strong, caring and safe communities in York
Region. Following 14 months of consultations with citizens, community
service providers, staff and Council through various meetings and
workshops, this framework builds upon earlier developed long-range
goals, with an expanded mandate that now includes human services
such as social housing and public transit.
The Regional
Corporation utilizes a multi-year approach to business planning.
This approach links overall corporate strategies directly to individual
employee performance plans and allows the Region to expand the traditional
one-year time frame to include a further outlook of budgetary pressures.
The critical focus is to ensure that decisions made during the annual
budget process are sustainable and maintain a strong, viable long-term
strategy for the Region.
The Budget Review
Committee comprised of the Regional Chair, the Chief Administrative
Officer, the Regional Treasurer, and the Director of Business Planning
and Budgets, reviews proposed Business Plan and Budgets, to ensure
compliance with Council guidelines and to balance competing priorities.
On February
20, 2003 York Regional Council adopted a total gross expenditure
budget of $1.42 billion. After assessment growth, the net tax levy
impact for all Regional services was 5.7%, which included a 3.3%
net tax levy impact for the transfer of solid waste disposal and
diversion costs from area municipalities to the Region. Subsequent
to Budget adoption, Council approved an additional $7.9 million
in various program funding, throughout 2003, bringing the total
gross expenditure budget to $1.43 billion with no additional net
tax levy impact.
The Budget
addressed the challenges associated with managing both a rapidly
growing Region and the increasing responsibilities given to municipalities
as a result of recent provincial program re-alignments. Major enhancements
to Policing, Emergency Medical Services, York Region Transit, and
various capital programs, combined with a decrease in Provincial
subsidies, accounted for the majority of the Region’s increased
financial pressures for the 2003 Budget.
As a result
of York Region’s 2003 financial activities, the consolidated
fund balances increased by $22.6 million. The highlights of the
financial results are detailed below.
Revenues
Total 2003 revenues of $862.3 million financed current fund operations,
reserves and reserve funds and capital expenditures. The sources
of revenues are as follows:
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$573.6
million through taxation and water and wastewater fees |
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$126.8
million through provincial and federal transfer payments |
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$79.4
million through contributions from the Development Charges |
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$70.3
million through direct service user fees, service charges and
other |
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$12.2
million through interest earned on Operating Funds, Reserves
and Reserve Funds |
Expenditures
for Current Fund Operations totaled $651.4 million in 2003.
The largest component
was Community Services and Housing expenditures of $157.2 million
to provide:
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Financial
assistance to 4,152 York Region households monthly, representing
close to 9,000 beneficiaries; |
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York
Region’s share ($36.0 million) of GTA Pooled Social Assistance
costs; |
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Child
care fee assistance to over 2,700 children per month; |
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Early
Intervention and Special Needs services to over 1,100 children
throughout the year; |
Protection to Persons and Property expenditures of $119.4 million
included costs to provide:
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Police
Services through the deployment of 985 Police Officers and 317
civilian staff; |
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Emergency
Services for the operation of 9-1-1 call center and emergency
preparedness; |
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Court
Services for the administration of over 113,000 charges laid
for matters under municipal by-laws, the Provincial Offences
Act and the Contraventions Act. |
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Funding
contributions to the Conservation Authorities of $2.9 million
for watershed and groundwater management and conservation activities
within York Region. |
The Region’s Social Housing operations utilized expenditures
of $95.4 million to provide:
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Social
housing to approximately 13,000 residents through a network
of 6,214 housing units; |
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Over
39,000 nights of emergency shelter and 320 beds for domiciliary
care through partnerships with community agencies; and |
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York
Region’s share ($38.8 million) of GTA Pooled Social Housing
costs |
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$70.3
million through direct service user fees, service charges and
other |
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$12.2
million through interest earned on Operating Funds, Reserves
and Reserve Funds |
Environmental Services costs represented water, wastewater and solid
waste services totaling $79.4 million that provide:
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Delivery
and treatment of over 115 million cubic metres of water and
wastewater; |
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Operation
of 88 water and 20 wastewater facilities; |
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Administration
of the Water for Tomorrow efficiency program that saved 14.5
million litres of water per day in 2003; |
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Management
of nearly 300,000 tonnes of solid waste with 87,000 tonnes diverted
from landfills; and |
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Operation
of three Household Hazardous Waste Depots and two material recovery
facilities. |
Transportation
service costs of $76.0 million included costs for:
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Maintenance
and management of over 3,200 lane kilometres of roads; |
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Operation
of a centralized traffic control system and nearly 600 signalized
intersections; |
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Operation
of York Regional Transit to provide service to 10.3 million
passengers; |
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Service
enhancements to the York Regional Transit system of $10.1 million
that provided 123,000 hours of additional transit service for
new and expanded routes; and |
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York
Region’s share of GO Transit costs. |
The Health and Emergency Services expenditure of $61.6 million included
costs to provide:
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Emergency
Medical Services (EMS) through the deployment of 28 emergency
vehicles and 222 paramedics responding to over 90,000 calls;
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Family
Health screening assessments for over 9,100 new mothers and
infants; |
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Health
advise to approximately 74,000 callers through the
Health Connection help line; |
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Direct
care and services to 232 seniors at Regionally operated Long
Term Care facilities; and |
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Homemaking
services and community outreach programs to over 2,200 York
Region seniors. |
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Other
Public Health initiatives such as Control of Infectious Diseases,
Chronic Disease and Injury Prevention, Water Safety and Food
Safety Inspections. |
General Government
expenditures of $56.2 million included $10.2 million for York Region’s
share of funding for the Municipal Property Assessment Corporation
and a $7.3 million contribution for new construction projects at
York Region’s three community based hospitals (South Lake,
York Central and Markham/Stouffville).
Planning and
Development Services initiatives totaling $6.2 million provided
enhanced geographic information systems, promotion of economic development
and tourism, and management of regional growth planning policies
and land use development.
Capital Fund
Expenditures in 2003 totaled $283.0 million.
Road improvements
and expansion of the Transit System accounted for $135.1 million in
expenditures for capital projects such as:
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Extension
of Bathurst Street from Highway 9 to Yonge Street; |
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Widening
of Elgin Mills Road from Bayview Avenue to Highway 404; |
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Extension
of Markham By-Pass Phase 2 from 16th Avenue to Major Mackenzie
Drive; |
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Acquisition
of 36 new conventional transit buses, 16 new specialized transit
buses, and major refurbishing of 12 existing conventional transit
buses; and |
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Various
intersection and road surface improvements, and bridge and culvert
rehabilitations. |
Environmental service expenditures, totaling $128.8 million, represented
construction of water and wastewater infrastructure for major capital
projects such as:
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Cost
shared work for Peel Water Supply; |
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Design
and construction of York-Peel water feedermain to Maple reservoir; |
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Design
and reconstruction of Sutton Wastewater Treatment Plant; |
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9th
Line sewer extension to Stouffville; and |
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Completion
of the Lake Simcoe Water Filtration Plant construction in Georgina. |
Protection to persons and property expenditures of $2.3, Community
Services expenditures of $9.1 million and General Government and other
expenditures of $7.7 million represented mainly:
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Upgrades
to the York Region Police communication and computer aided dispatch
systems. |
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Renovations
to long term care facilities at the Newmarket Health Centre;
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Upgrades
to various EMS facilities throughout the Region; |
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Various
leasehold improvements at regionally owned facilities. |
The establishment,
maintenance and prudent management of reserves are important components
of the Region’s financial strategy. Reserve funding supports
a significant portion of infrastructure capital costs and plays
an instrumental role in offsetting unforeseen cost increases during
uncertain economic cycles.
In accordance
with the Region’s Council approved reserve strategy, the 2003
operating surplus of $17.2 million was transferred to the following
reserves:
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Capital
Reserve Fund $7.6 million; |
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Working
Capital Reserve $2.0 million;
and |
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Tax
Stabilization Reserve Fund $7.6 million; |
A portion of
the surplus in the Social Assistance and Social Housing programs
is transferred to the Social Assistance and Social Housing Reserve
Funds in accordance with the reserve strategy. In 2003, these transfers
were $2.2 million and $7.6 million respectively.
York Region’s
policies ensure that growth and development are financed in a fiscally
responsible manner to meet the future needs of the Region’s
communities. In 2003, the Region had undertaken several studies
to prepare to meet the future infrastructure demands of new growth
including:
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Long
Term Water Supply Master Plan Update |
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Draft
Centres and Corridors Strategy |
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Development
Charges By-law Update |
The York Rapid
Transit Plan is focused on an extensive inter-regional network that
reflects an integrated approach to transit development with the
regions of Peel and Durham and the cities of Toronto, Brampton,
Vaughan, Markham, and Richmond Hill.
Bus Rapid Transit, Light Rapid Transit, and subways are all under
consideration for the York Rapid Transit system. Decisions on technology
will be made in consultation with private and public sector partners.
In 2003, Council approved the incorporation of Rapidco that will
act as the operational body for the Region’s joint Public-Private
Partnership (PPP).
Approximately
$4.3 billion of capital infrastructure will be required by 2026
to provide higher order transit service within York Region, based
on assumed funding from senior levels of government equal to two-thirds
of the gross capital costs. The Quick Start Program, which is proposed
to include transit supportive capital improvements within the next
three years, is estimated to cost $150 million.
On August 19,
2003 the Government of Ontario announced that York Region had been
awarded $100 million in low-interest loans through the Ontario Municipal
Economic Infrastructure Financing Authority (OMEIFA). These funds
will be divided into two parts with $50 million to finance York
Region’s portion of the Quick Start Program and the remaining
$50 million to finance regional water and other transit projects.
At half the normal rate of interest that debentures provide, the
OMEIFA loan represents savings of up to $25 million over the next
20 years.
Providing service
to over 855,000 residents and an employment base of 415,000 in a
rapid growth environment requires proactive financial management
and development of a sustainable financial strategy.
Through creative
partnerships, innovative service delivery and excellence in customer
service, York Region has achieved many successes in 2003. With responsible
fiscal policies and constantly improving financial planning processes,
York Region will ensure that services are continually delivered
to the community in an effective and efficient manner.
Sandra Cartwright
Commissioner of Finance and Regional Treasurer
June, 2004
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