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2017 Draft Operating Budget Overview

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Table of Contents Operating Budget Process................................................................................................................................................................................................ 3

Process Overview ....................................................................................................................................................................................................... 3 Operating Budget Strategy .......................................................................................................................................................................................... 3 Tariff of Fees Update ................................................................................................................................................................................................... 3 Emerald Ash Borer Management Strategy Financial Implications Update .................................................................................................................. 4 Budget Presentation Changes .................................................................................................................................................................................... 4

A. Town Services .......................................................................................................................................................................................... 4 B. Richmond Hill Fire and Emergency Services ............................................................................................................................................ 5 C. Richmond Hill Public Library Board .......................................................................................................................................................... 6

Budget Consultations & Engagement ......................................................................................................................................................................... 6 Budget Presentations .................................................................................................................................................................................................. 7

Demographics and Economy............................................................................................................................................................................................ 8

Income ......................................................................................................................................................................................................................... 8 Financial Indicators ..................................................................................................................................................................................................... 8 Growth Indicators ........................................................................................................................................................................................................ 9 Property Assessment Growth ...................................................................................................................................................................................... 9

The Operating Budget .................................................................................................................................................................................................... 10

2017 Operating Budget vs the 2017 Outlook ............................................................................................................................................................ 10 Town of Richmond Hill Budget .................................................................................................................................................................................. 11 2016 Accomplishments ............................................................................................................................................................................................. 11 2017 Priorities ........................................................................................................................................................................................................... 12

Operating Budget – Town Services ................................................................................................................................................................................ 13

Operating Budget Pressures – Town Services.......................................................................................................................................................... 13 Operating Budget Pressures by Department – Town Services ................................................................................................................................. 14

A. Town Services – Base Pressures ........................................................................................................................................................... 14 B. Town Services – Total Growth Pressures ............................................................................................................................................... 15 C. Town Services – Staffing Annualization Growth Pressures .................................................................................................................... 16 D. Town Services – Program Annualization Growth Pressures .................................................................................................................. 16 E. Town Services – New Staffing Resources Growth Pressures ................................................................................................................ 17 F. Town Services – New Program Resources Growth Pressures............................................................................................................... 18 G. Town Services – Property Assessment Growth Taxation $1,864,100 .................................................................................................... 18 H. Town Services – Legislated Pressures ................................................................................................................................................... 19 I. Town Services – Pressures from Service Enhancements ...................................................................................................................... 19 J. Town Services – Unsustainable Funding Sources ................................................................................................................................. 20 K. Town Services – Operating Budget by Expenditure and Revenues ....................................................................................................... 21 L. Town Services – Operating Expenditures ............................................................................................................................................... 21 M. Town Services – Revenues Sources ...................................................................................................................................................... 22

Operating Budget – Fire & Emergency Services ....................................................................................................................................................... 23 Operating Budget – Richmond Hill Public Library Board ........................................................................................................................................... 24 Operating Budget – Capital Asset Sustainability ....................................................................................................................................................... 24 Operating Budget Summary by Services .................................................................................................................................................................. 25

Financial Outlook and Staffing Plan................................................................................................................................................................................ 26

Tax Levy Increases and the Financial Outlook ......................................................................................................................................................... 26 2018 Outlook ............................................................................................................................................................................................................. 26 2019 Outlook ............................................................................................................................................................................................................. 26 Staffing Plan Details .................................................................................................................................................................................................. 27 Staffing Plan Summary .............................................................................................................................................................................................. 29

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Operating Budget Process Process Overview

The Town of Richmond Hill's annual budget process cycles through a continuous process. Staff begin to work on the following year's budget submission soon after the current year's budget is approved. The budget process goes through the following sequence:

1. Budget strategy adoption in June. 2. Review user fees & charges from July to September. 3. Capital Budget and Ten Year Capital Forecast process from July to November. 4. Draft Operating Budget and Financial Outlook preparation & senior management review from July to January. 5. Budget Information Sessions in October and January. 6. Budget Committee of the Whole meetings and Council adoption from January to March. 7. Present financial results of previous year, compared to the approved budget in June.

Operating Budget Strategy

Council adopted the budget strategy endorsed by the Budget Committee of the Whole (BCW) recommendations from the June 28, 2016 meeting. The approved 2017 Draft Operating Budget Strategy:

1. Maintains existing service levels 2. Includes items consistent with the Strategic Plan, that also provides for:

a. Annualizations of prior years’ approved service enhancements; b. Impacts from development growth; c. Legislated changes; and d. Year two of the three-year phased-in reductions from the Growth Rate Stabilization Strategy, Personnel

Gapping Factor and Supplementary Taxation as approved in 2016.

3. Continues with the Capital Asset Sustainability Fee Strategy approved in 2016 4. Provides an update on the Emerald Ash Borer Management Strategy implementation plan, and report back on

funding alternatives 5. Updates the Financial Outlook and Staffing Plan. 6. Minimizes the tax rate increase

Tariff of Fees Update

As part of the Operating Budget process, staff annually review the following year’s Tariff of Fees and identifies potential areas for revenue opportunities, including rate increases and revenue increases to mitigate anticipated program cost increases. The updated by-law was adopted by Council on Oct 13. 2016, and the 2017 Draft Operating Budget reflects these new rates.

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Emerald Ash Borer Management Strategy Financial Implications Update

The Emerald Ash Borer Management Strategy was first adopted by Council in 2011. In the initial planning stages, staff projected implementation costs to exceed $12 million. In 2015, staff anticipated future financial implications would need to be funded by an Emerald Ash Borer Management Levy. During the 2016 Operating Budget process, staff identified changes to the original implementation plan that deferred further funding needs to the future years, and would provide an updated report as part of the 2017 Operating Budget process. The financial implications are significantly reduced, and an Emerald Ash Borer Management Levy is no longer recommended. A staff report will be presented to BCW on January 31, 2017, when both Community Services and Environment & Infrastructure Services present their budgets to the committee.

Budget Presentation Changes

Over the years, the Town of Richmond Hill has faced changes to the municipal environment with impacting financial pressures: slower growth, new legislation, and the implementation items identified in the Town’s Strategic Plan. The 2017 Budget reflects a greater review of the various budget pressures, expense and revenue categories. The review categories will expand to capture these changes as presented to BCW at the June 28, 2016 meeting. In addition, the 2017 Draft Operating Budget is identified in three main components:

1. Town Services 2. Richmond Hill Fire and Emergency Services 3. Richmond Hill Public Library Board

A. Town Services The Town Services component of the Draft Operating Budget comprises all of Richmond Hill’s departments: Community Services (except Fire and Emergency Services), Environment and Infrastructure Services, Corporate and Financial Services, Planning and Regulatory Services, Office of the Chief Administrative Officer and Corporate Accounts. The budget summary will be presented in a number of formats: by budget pressure category, by expense and revenue categories and by department services.

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Prior years’ budget pressure categories comprised of: Base, Council Approved Service Level Changes and New Items. The updated Budget Pressures descriptions used in the current budget package are summarized in the following table:

2017 Budget Pressures Category Previous Budget Category Description

Base Base Providing the same level of service with inflationary impacts. Any identified efficiencies and savings will be reflected here.

Growth

Council Approved Service Level Changes

Incremental costs of a full-year impact of initiatives approved in the previous year.

Base Providing the same level of service to a growing community.

Legislated Base New legislation imposed on how we provide municipal services.

Service Enhancements

Council Approved Service Level Changes or New

Costs of service level changes to implement approved plans and resources.

The updated expense and revenue types used in the current budget package are summarized in the following table:

Expenditure Categories Revenue Categories Personnel – Permanent Taxation Personnel – Casual User Fees & Fines Contracts, Services Investment Income Materials, Supplies Grants Other Expenditures Revenues from Reserve & Reserve Funds Contributions to Reserve & Reserve Funds Transfers from Other Internal Sources

The current budget package restates prior years’ figures to facilitate comparison.

B. Richmond Hill Fire and Emergency Services In the fall of 2015, the Town of Richmond Hill initiated a Fire and Emergency Services Master Plan (FESMP) study as part of its comprehensive community planning process to guide the delivery of fire protection services over the next ten years. The FESMP provided a complete review of the current operations of Richmond Hill Fire and Emergency Services (RHFES) to assist Council in establishing key objectives for the division. The plan included recommendations to address both short-term (five-year) and long-term (ten-year) strategies for the municipality. The analyses and recommendations contained within the plan were prepared based on a foundation of legislated responsibilities, the Ontario Fire Marshal and Emergency Management Public Fire Safety Guidelines, and stakeholder engagement. The plan was developed with the highest regard for the legislated responsibilities of the municipality as contained within the Fire Protection and Prevention Act (1997) and the Occupational Health and Safety Act.

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The FESMP consisted of over 40 recommendations, which includes “the Fire Chief be directed to develop a multi-year implementation plan for Council’s consideration in responding to the proposed fire suppression phases contained within the Fire and Emergency Services Master Plan.” At the June 28, 2016 Special Council meeting, the ten-year implementation plan was presented to Council by Dillon Consulting Ltd. Council adopted the recommendations from the staff report, Fire and Emergency Services Master Plan (SRCS.16.27), and directed the Fire Chief to report back to Council on priorities, cost, implications and options for phased implementation of the Fire and Emergency Services Master Plan. The follow-up report will be presented to Committee of the Whole on January 23, 2017. The FESMP has significant financial implications over the next ten years. For the 2017 Draft Operating Budget, staff have presented the financial impact of the Richmond Hill Fire and Emergency Services separately from the rest of the Town Operating Budget. The January 23rd report and presentation provides the specific details and overall implications of recommendations as they are introduced in each of the next ten years.

C. Richmond Hill Public Library Board RHPL operates under the direction of a ten member Library Board appointed by the Town of Richmond Hill Council. The Board is governed by the Public Libraries Act. The Richmond Hill Public Library Board operating budget presented to BCW is based on their recommendations, and presented separately as a part of the overall Operating Budget.

Budget Consultations & Engagement

As in previous years, Richmond Hill’s 2017 Operating Budget outreach efforts include:

1. Hosting information sessions a. Business Community Information Session was held on October 26, 2016, at the Richmond Hill Centre of

Performing Arts. Invitations were sent to members of the Richmond Hill Chamber of Commerce, Richmond Hill Markham Chinese Business Association, Village of Richmond Hill Village Business Improvement Area, and Richmond Hill TechConnex

b. Public Budget Information Session to be held on January 21, 2017, at the Richmond Hill Central Library. The public have been invited to attend through notices in the local newspaper and publications.

2. Advertising the Budget Committee of the Whole meeting schedule in the local newspaper and publications. 3. Providing budget information on the municipality’s website. 4. Monitoring a dedicated email address for budget input through budget@richmondhill.ca.

New for the 2017 Operating Budget process, staff launched an educational video, “How Richmond Hill’s Budget Works”. A second video, “What Contributes to Property Tax Increases” is in progress and will be launched after at the conclusion of budget deliberations.

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Budget Presentations

The Corporate Overview, Operating Budget and Departmental Budget presentations will take place during the four Budget Committee of the Whole (BCW) meetings scheduled from 1 to 4 pm every Tuesday from January 24, 2017 to February 14, 2017, in the following order:

1. Tuesday, January 24, 2017 a. Corporate Overview b. Richmond Hill Public Library Board c. Water, Wastewater and Stormwater Management

2. Tuesday, January 31, 2017 a. Community Services b. Environment and Infrastructure Services

3. Tuesday, February 7, 2017 a. Corporate and Financial Services b. Planning and Regulatory Services c. Office of the Chief Administrative Officer d. Corporate Accounts

4. Tuesday, February 14, 2017 – Updated Draft Budget Members of Council are encouraged to meet with Department Heads in advance of each meeting, to ask questions after each presentation, and propose motions for the Committee’s consideration after the relevant presentation. An update of all the changes will be provided to BCW on February 14, 2017. A Special Council Meeting will be held on Tuesday, February 28th to adopt the 2017 Draft Operating Budget.

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Demographics and Economy Income

Based on Richmond Hill’s 2015 Socio-Economic Study, the average 2011 Richmond Hill household income was $109,000, with 55% of households earning $70,000 per year or more, and only 21% of households reported an income of $40,000 or less. 23% of households earn more than $150,000 compared to the 13% provincial average. The median age of a Richmond Hill resident is almost 40, with 13% over the age of 65. The unemployment rate in Richmond Hill is 6.9%, and lower than Ontario’s 8.3% average. 77% of the population has attained a minimum post-secondary education.

Financial Indicators

In developing the Town of Richmond Hill’s operating budget, staff considered anticipated economic pressures facing the average Richmond Hill household, balanced with the economic pressures facing the municipality. Predicting the economic pressures for 2017 with accuracy is difficult, but a look at historical financial indicators and economic forecasts may provide insight. The Province of Ontario’s 2016 Economic Outlook and Fiscal Review (Fall Statement) projects the unemployment rate to decrease 0.1% in 2017 to 6.5%. The Canadian Dollar is projected to be about $0.77 compared to the American Dollar at the end 2017. The Province of Ontario projects the annual Consumer Price Index (CPI) to reach 2% and the economy growing at 2.2% in 2017. The CPI measures price increases over the year and is based on an average household’s spending habits and proportions of each type of expenditures it makes. A direct comparison of the CPI to municipal expenditure increases is not reflective of the municipality’s spending habits. The table below provides examples of inflationary and investment pressures experienced by the municipality.

Price Indices 2016 (%) Construction Price Indices (non-res.) 1.29 Commercial 1.30 Industrial 2.36 Institutional 1.02 Electricity 3.51 (10 as 2017 Forecast) Natural Gas (0.18) Gasoline (1.68) Energy 0.20 Water (York Region Wholesale rate increase) 9.00 Recreation 1.68 Commercial Software 0.59

Source: Statistics Canada unless otherwise noted

Investment Rates 2017 (%) Forecast

Bank of Canada Overnight Rate 0.50 Three-Month Treasury Bill Rate 0.60 10-Year Bond Rate 2.45

Source: RBC Economics Research, Financial Markets Forecast – January 2017

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Growth Indicators

In addition to inflationary and contractual rate increases, the Town of Richmond Hill is also faced with growing population to service and increased infrastructure to maintain and operate. The table below shows how they have grown since 2005.

2005 2010 2015 2017 % Growth since 2005

162,000 187,800 205,300 214,100 29%Households 53,000 57,000 64,150 67,255 24%

Roads (km) 508 531 545 555 8%Sidewalks (km) 552 608 650 670 19%Storm Sewers (km) 460 500 513 524 13%Seniors Driveways 913 1,335 1,424 1,663 87%

Waste Tonnage 51,593 55,963 55,162 17,435 9%

Street Lights 13,680 15,154 15,973 16,305 18%8,704 9,870 12,288 12,600 44%

Traffic Signals 19 22 29 30 58%

Parkland (acres) 728 751.2 766 808 7%Open Space (acres) 1,604 1,826 2,038 2,272 37%

Population

Signs

Property Assessment Growth

Every four years, the Municipal Property Assessment Corporation (MPAC) is responsible for updating all the property assessment values in the Province, of which the changes are then phased-in over four years. The last update was January 1, 2016, and the value will be phased-in for the taxation years 2017 through to 2020. It is important to note that assessment value changes do not affect the total amount of taxes received by the municipality. The property tax rates are re-evaluated annually to provide the same tax revenue. There may be fluctuations however, between homeowners, where some may increase and some may decrease, depending on how their property assessment has changed compared to the municipal average. The updated residential property assessment value, excluding multi-residential properties, is $1,045,900 based on the January 1, 2016 assessment data.

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The Operating Budget 2017 Operating Budget vs the 2017 Outlook

During the last operating budget cycle, staff projected the 2017 Draft Operating Budget would require a $4.4 million tax levy increase. The 2017 Draft Operating Budget is proposed at $4.8 million, a $419,700 increase over the 2017 Outlook.

Increase in Levy 2016 Budget 2017 Budget Current $4,031,700 $4,796,600 Previously Forecasted 4,376,900

Change $419,700 The combined $4,796,600 tax levy increase is comprised of $2,804,000 for Town Services, $1,476,200 for Richmond Hill Fire & Emergency Services, and $516,400 for the Richmond Hill Library Board. The following schedule compares the 2017 Draft Operating Budget to the 2017 Outlook:

Operating Budget - Tax Levy Impacts 2016 Budget2017 Draft

Budget2017 Outlook

Change from Outlook

Town ServicesBase 2,152,900$ 1,023,100$ 2,069,300$ (1,046,200)$ Growth 513,700 401,100 628,800 (227,700) Legislated 221,400 - 221,400 Service Enhancements 125,000 - 125,000 Unsustainable Funding Sources 840,000 1,033,400 840,000 193,400

3,506,600$ 2,804,000$ 3,538,100$ (734,100)$

Richmond Hill Fire & Emergency Services 246,600 1,476,200 447,900 1,028,300 Richmond Hill Public Library Board 278,500 516,400 390,900 125,500 2017 Draft Operating Budget - Tax Levy Increase 4,031,700$ 4,796,600$ 4,376,900$ 419,700$

The Town Services tax levy is a $734,100 decrease over the 2017 Outlook, projected at $3,538,100, mainly due to a contribution increase from the Water & Wastewater Services fund. Property assessment growth was 1.88% compare to the 1.5% outlook. Additional pressures were a result of higher than forecasted utility rates, legislated changes and greater staff resource requirements. The Richmond Hill Fire & Emergency Services tax levy is a $1,028,300 increase over the 2017 Outlook, projected at $447,900, mainly driven by the Fire & Emergency Services Master Plan recommended additions. The 2017 Draft Operating Budget will be the first year to reflect the financial implications of the ten-year implementation plan. The Richmond Hill Public Library Board tax levy is a $125,500 increase over the 2017 Outlook, projected at $390,900, as a result of an higher than forecasted personnel cost increases, and greater staff resource requirements.

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Town of Richmond Hill Budget

If approved, the Town of Richmond Hill’s 2017 Total Budget will be $305.6 million, including the Operating, Capital Asset Sustainability, Water & Wastewater, Stormwater Management and Capital budgets. Except for the Capital Budget, 2017 shows an increase over the 2016 budget.

Total Expenditure Budget 2016 Budget2017 Draft

BudgetInc / (Dec)

OperatingTown Services 121,552,500$ 127,871,400$ 6,318,900$ Richmond Hill Emergency & Fire Services 23,399,900 24,895,100 1,495,200 Richmond Hill Public Library Board 9,734,000 10,240,600 506,600

154,686,400$ 163,007,100$ 8,320,700$

Capital Asset Sustainability 949,600 1,975,400 1,025,800 Water & Wastewater Services 68,546,200 75,333,300 6,787,100 Stormwater Management 3,195,700 3,497,100 301,400 Capital (Approved) 84,465,500 61,786,400 (22,679,100) Total Budget 311,843,400$ 305,599,300$ (6,244,100)$

2016 Accomplishments

The 2016 Budget, provided staff resources to accomplish the following significant initiatives: • Opened the Richmond Green Sports Dome • Recreation and Culture Core Services Review • Regulatory Services Framework Services Review • Awarded Life Saving Society “David Pretty Cup” for the 11th consecutive year • Awarded the Learning Resources Network People’s Choice Award for best brochure for the Adventure Series

programs • Tennis Strategy • Richmond Hill Fire and Emergency Services Master Plan • Successfully appealed the Parkland Dedication Policy at the Ontario Municipal Board • Civic Precinct Project and Financial Plan • Corporate Risk Assessment and Three Year Audit Plan • Asset Management Plan • Grade Separation Prioritization Study • David Dunlap Observatory Park Master Plan • Development Charges Background Study and By-Law updates • Procurement and Financial Control By-Law solutions for implementation • Initiated a Storm Water Preventative Maintenance program • Completion of significant Information Technology projects:

o Web Strategy o Enterprise Resource Planning Phase 1 – requirements documentation o Customer Relationship Management – Phase 1

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2017 Priorities

The 2017 Budget includes funding for the following initiatives to be commenced or completed in 2017:

• David Dunlap Observatory program and service partnership • Tennis Strategy implementation • Recreation and Culture Pricing Policy implementation • Museum Feasibility Study implementation • Park Operations Level of Service Study • Employee Strategy • Information Technology Strategy • Economic Development Strategy Update and implementation • Asset Management Plan implementation • Initiative Comprehensive Zoning By-Law project • Administrative Monetary Penalty System implementation • Water, Wastewater & Stormwater Management Financial Plan • Civic Precinct Project and Financial Plan implementation • Records and Information Management Program project – Phase 1 completion • Information Technology project implementation:

o Enterprise Resource Planning o Customer Relationship Management o Work and Asset Management System optimization o Recreation Management System o Agenda Management System o Planning & Regulatory Management System

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Operating Budget – Town Services The 2017 Draft Operating Budget proposes a $2,804,000 increases over the 2016 budget. Base pressures present a net $1,023,100 impact, followed by phasing-in decreases to unsustainable revenues at a $1,033,400 impact to the tax rate. Growth, Legislated and Service Enhancements pressures together amount to $747,500. Included in the budget are funding of resources towards Strategic Plan initiatives previously approved by Council, including implementation of the Administrative Monetary Penalty System, Asset Management Plan, Comprehensive Zoning by-law update and David Dunlap Observatory Park Master Plan.

Operating Budget Pressures – Town Services

Town Services - Exp / Rev 2016 Budget Base Growth LegislatedService

Enhancements

Unsustainable Funding Sources

2017 Draft Budget

Inc / (Dec)

ExpendituresPersonnel

Personnel – Permanent 57,605,600$ 1,510,300$ 1,902,200$ -$ 28,900$ 200,000$ 61,247,000$ 3,641,400$ Personnel – Casual 11,838,700 260,700 56,800 160,300 85,200 - 12,401,700 563,000

69,444,300$ 1,771,000$ 1,959,000$ 160,300$ 114,100$ 200,000$ 73,648,700$ 4,204,400$ Non-Personnel

Contracts, Services 19,897,300 361,300 201,300 30,000 136,500 - 20,626,400 729,100 Materials, Supplies 19,347,600 701,800 91,200 31,100 36,500 - 20,208,200 860,600 Other Expenditures 3,456,300 65,100 376,100 - 24,500 - 3,922,000 465,700 To Reserve & Reserve Funds 9,407,000 (22,600) 81,700 - - 9,466,100 59,100

52,108,200$ 1,105,600$ 750,300$ 61,100$ 197,500$ -$ 54,222,700$ 2,114,500$

Total Expenditures 121,552,500$ 2,876,600$ 2,709,300$ 221,400$ 311,600$ 200,000$ 127,871,400$ 6,318,900$

RevenuesUser Fees & Fines (31,246,700)$ (768,200)$ (714,900)$ -$ (4,200)$ -$ (32,734,000)$ (1,487,300)$ Investment Income (6,870,000) - - - - 333,400 (6,536,600) 333,400 Grants, Donations (1,004,600) (12,700) (39,000) - - - (1,056,300) (51,700) From Reserve & Reserve Funds (6,294,500) 33,700 345,500 - (155,400) 500,000 (5,570,700) 723,800 From Other Internal Sources (4,550,600) (1,106,300) (35,700) - (27,000) - (5,719,600) (1,169,000)

Non-Taxation Revenue (49,966,400)$ (1,853,500)$ (444,100)$ -$ (186,600)$ 833,400$ (51,617,200)$ (1,650,800)$

Taxation (101,376,000) - (1,864,100) - - - (103,240,100) (1,864,100) Total Revenues (151,342,400)$ (1,853,500)$ (2,308,200)$ -$ (186,600)$ 833,400$ (154,857,300)$ (3,514,900)$

Town Services Levy Requirement (29,789,900)$ 1,023,100$ 401,100$ 221,400$ 125,000$ 1,033,400$ (26,985,900)$ 2,804,000$

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Operating Budget Pressures by Department – Town Services

Town Services - By Pressure 2016 Budget Base Growth LegislatedService

Enhancements

Unsustainable Funding Sources

2017 Draft Budget

Inc / (Dec)

Community Services 28,827,300$ 155,300$ 595,000$ 161,400$ 49,900$ -$ 29,788,900$ 961,600$ Environment & Infrastructure Services 18,611,500 835,200 214,000 30,000 34,300 - 19,725,000 1,113,500 Corporate & Financial Services 17,076,300 259,300 598,500 30,000 38,300 - 18,002,400 926,100 Planning & Regulatory Services 5,563,500 67,600 610,700 - - - 6,241,800 678,300 Offfice of the CAO 5,941,100 205,200 197,300 - - - 6,343,600 402,500 Corporate Accounts (4,433,600) (499,500) 49,700 - 2,500 1,033,400 (3,847,500) 586,100 Taxation (101,376,000) - (1,864,100) - - - (103,240,100) (1,864,100)

Town Services Levy Requirement (29,789,900)$ 1,023,100$ 401,100$ 221,400$ 125,000$ 1,033,400$ (26,985,900)$ 2,804,000$

A. Town Services – Base Pressures These are generally inflation pressures for maintaining service levels. Any identified efficiencies and savings will also be reflected here. A detailed summary of the base pressures follow:

Town Services - Base Pressures 2016 Budget2017 Base

BudgetInc / (Dec)

ExpendituresPersonnel

Personnel – Permanent 57,605,600$ 59,115,900$ 1,510,300$ Personnel – Casual 11,838,700 12,099,400 260,700

69,444,300$ 71,215,300$ 1,771,000$ 2.55%Non-Personnel

Contracts, Services 19,897,300 20,258,600 361,300 Materials, Supplies 19,347,600 20,049,400 701,800 Other Expenditures 3,456,300 3,521,400 65,100 Contributions to Reserve & Reserve Funds 9,407,000 9,384,400 (22,600)

52,108,200$ 53,213,800$ 1,105,600$ 2.12%

121,552,500$ 124,429,100$ 2,876,600$ 2.37%Revenues

User Fees & Fines (31,246,700)$ (32,014,900)$ (768,200)$ Investment Income (6,870,000) (6,870,000) - Grants, Donations (1,004,600) (1,017,300) (12,700) Revenues from Reserve & Reserve Funds (6,294,500) (6,260,800) 33,700 T ransfers from Other Internal Sources (4,550,600) (5,656,900) (1,106,300) Non-Taxation Revenue (49,966,400)$ (51,819,900)$ (1,853,500)$ 3.71%

Taxation (101,376,000) (101,376,000) -

Net Budget (151,342,400)$ (153,195,900)$ (1,853,500)$ 1.22%

Tax Levy Requirement - Town Services (29,789,900)$ (28,766,800)$ 1,023,100$ 3.43%

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Base Expenditure Pressures Personnel expenditure pressures include cost of living adjustment provisions, adjustments to benefit rates and step-rate increases. Recycling and refuse contracts added a $115,900 budget pressure to Contracts and Services. Telephone, Cellular & Data Communications and Winter Maintenance contributed to the majority of the remaining Contracts and Services pressures. Facility related hydro and water expenditures present a $303,100 pressure on materials and supplies, as well as $172,200 in relation to parks and streetlights hydro, and a $68,000 postage increase contributed to the remaining increases.

Base Revenue Pressures User fees and fines revenues are budgeted to increase $768,200. This reflects a $330,300 in additional revenues as a result of the Tariff of Fees update, additional revenues from popular demands on general programs, the Richmond Green Air Support structure, and ice rentals. Additional rental income is included for the Old Post Office lease. Transfers from internal sources include an additional $767,100 transfer from the Water and Wastewater Fund as a result of additional efforts and resources identified in the Operating Fund for Water and Wastewater activities. Staff have reviewed business activities between both operations and were able to identify amounts to allocate.

B. Town Services – Total Growth Pressures The total growth pressure is $401,200. These are pressures from providing the same level of service but to a growing community due to larger volumes or higher level of activities. Growth pressures include cost annualizations of partial year funding of resources in the prior year, new resources for the 2017 budget, and the taxation revenue increase from property assessment growth, summarized below:

Town Services Budget - Growth 2017 Draft Budget

Annualization of Resources Approved in 2016Staffing 752,200$ Programs 7,200

759,400 New Resources Requested for 2017

Staffing 820,500$ Programs 685,300

1,505,800

Property Assessment Growth (1,864,100)$

401,100$

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C. Town Services – Staffing Annualization Growth Pressures Prior year’s Town Services Operating Budget included partial year funding for 16 permanent full-time staffing resources as well as casual staff. The incremental cost of annualizing the personnel related costs for the 2017 is $752,500. The 2016 approved positions are listed below:

Staffing Annualization2017 Draft

BudgetPermanent Full-Time

CAO Administrative Assistant , Communications 50,100$ CFS Financial Management Advisor 59,400 CFS Administrative Assistant to Members of Council (3) 119,200 CSD Assistant Supervisor of Facility Operations 32,800 CSD Coordinator of Marketing 7,200 CSD Facility Booking Coordinator 60,000 EIS Capital Project Coordinator 1,900 PRS Development Process Coordinator 46,200 PRS Site Plan Inspector 53,000 PRS Manager, Development Engineering (Site Plan & High Rise/Infill) 71,700 PRS Development Engineering Technologist 60,300 PRS Senior Traffic Analyst 63,600 CFS Health & Safety Coordinator 60,800 CFS HR Clerk 51,700

737,900

Casual / SeasonalCSD Recreation Assistant Sports Hall of Fame 13,900$ CSD Summer Camp Recreation Assistant (3,500) CSD Parks Operations 1,100 CSD Sidewalk and Trail Maintenance 2,800

14,300

Total Staffing Annualization 752,200$

D. Town Services – Program Annualization Growth Pressures Prior year’s Town Services Operating Budget included partial year funding for changes in two town-owned facilities, the Connor Room and the Lake Wilcox Community Centre. The annualized financial impact to the 2017 budget is $7,200. The total staffing and program annualization growth pressure impact is $759,400.

Program Annualization2017 Draft

BudgetCSD Connor Room 5,000$ CSD Lake Wilcox 2,200

Total Program Annualization 7,200$

Total Staffing and Program Annualizations 759,400$

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E. Town Services – New Staffing Resources Growth Pressures The Town Services Operating Budget includes 18 new and converted, as well as casual and contract staffing resources to support providing existing services to a growing community.

New Staffing Resources2017 Draft

BudgetPermanent Full-Time

PRS Department Assistant (Zoning) 20,200$ PRS Manager Development (Zoning) 72,600 PRS Senior Planner - Zoning 34,400 PRS Planner I - Zoning 13,400 PRS Urban Designer (Senior Planner) 51,000 PRS By-Law Policy Coordinator 46,700 PRS By-Law Enforcement Officer 53,500 CAO Manager, Economic Development 72,600 CAO Project Manager, Strategic Initiatives 64,600 CFS Capital and Development Finance Advisor - EIS Facility Coordinator 48,300 EIS Capital Project Coordinator 52,100 EIS Energy and Waste Manager 77,200

49,700 656,300

Conversion (Part-Time to Permanent, Management Review Items)CSD Integration Services Assistant 9,100 CSD Children and Outdoor Recreation Program Assistant (500) CFS Legislative & Accessibility Coordinator (17,300) CFS Access and Privacy Officer 12,700 PRS Dir, By-Law Licensing & Enforcement (Management Review) 24,100

28,100 Casual / Seasonal

CSD Parks Operations - casual/seasonal labourers 127,200 PRS Project Coordinator (contract - 2) - EIS Powerstream Energy Coordinator 8,900

Growth - Casual / Seasonal 136,100

Total New Staffing Resources - Growth 820,500$

Service EnhancementsNew Permanent Positions

EIS Asset Management - Project Manager 22,500 Conversion

EIS Manager, Asset Management Planning (from Manager, Air Quality (10,700) Contract

EIS Project Manager, Asset Management Planning (extension) - Total New Staffing Resources Enhanced Services 11,800

832,300$

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F. Town Services – New Program Resources Growth Pressures In supporting a growing community, the town incurs costs to expand a number of programs or to a larger population. The program financial impact is $685,300. The total new staffing and program growth pressure impact is $719,200. The following table provides a list of incremental programming costs and revenues of providing services to a growing community:

New Program Resources2017 Draft

BudgetCFS Computer Hardware Maintenance 138,500$ CFS Computer Software Maintenance 173,500 CSD Parks, Playgrounds and Forestry 139,600 CSD Road program (winter maintenance, signs, streetlights) 20,700 CSD Vehicle maintenance, fuel and supplies 33,700 EIS Community Spaces 25,600 CSD Transaction costs related to new Recreation Management System 143,700 CAO Communication Services Contracts / Services - graphics design 10,000

685,300 Administrative Monetary Penalty System (AMPS)

PRS Permanent Full-T ime AMPS Manager 117,300 PRS Casual Parking Clerk 33,900 PRS Hearing Officer 13,000 PRS Program Expenditures and Transfers to Reserves 118,300 PRS Program Revenues (282,500)

- Total New Program Resources 685,300$

Total Staffing and Program Resources 719,200$

G. Town Services – Property Assessment Growth Taxation $1,864,100 In 2017, the property assessment growth is expected at 1.88%, generating additional $1,864,100 in taxation revenue. The net impact of Town Services Growth pressures including annualization, new resources and property assessment growth is $401,200

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H. Town Services – Legislated Pressures The financial impact of new legislation imposed on how we provide municipal services include additional funding for the 2018 municipal elections, minimum wage increases and Electrical Authority permitting requirements.

Town Services Budget - Legislated 2017 Draft Budget

DescriptionCSD Minimum wage increase 161,400$ EIS Electrical Safety Authority permitting for regulatory compliance 30,000 CFS AODA compliance contracts 30,000

Legislated 221,400$

I. Town Services – Pressures from Service Enhancements Service enhancement pressures are increase costs as a result of service level changes to implement approved plans and resources. The Asset Management Plan was presented to Council as part of the 2016 work plan. Also part of the management reorganization plan recommendations, the staffing resources are being requested as part of the 2017 operating budget process. In addition, staff included provisions in the budget for the Records Information Management System implementation, museum program enhancements, a study to review Building Cultural Capacity, a Richmond Hill Farmer’s Market, Richmond Hill Arts Award program, and initial phases of the ownership transfer of David Dunlap Observatory lands and building to the Town.

Town Services Budget - Service Enhancements 2017 Draft Budget

2017 Tax Funding

2017 Other

SourcePersonnel

New Permanent PositionsEIS Asset Management - Project Manager 73,700$ 22,500$ 51,200$

Conversion EIS Manager, Asset Management Planning (from Manager, Air Quality) - (10,700) 10,700

ContractEIS Project Manager, Asset Management Planning (extension) 62,300 - 62,300

Total Personnel 136,000$ 11,800$ 124,200$

ProgramsCFS Records Information Management Project 131,500 38,300 93,200 CSD Museum Program and Service Enhancements 34,800 34,800 - CSD Building Cultural Capacity Study 5,400 5,400 - CSD Richmond Hill Farmers Market 8,800 8,800 - CSD Richmond Hill Arts Award 900 900 - EIS David Dunlap Observatory buildings 25,000 25,000 -

Total Programs 206,400$ 113,200$ 93,200$

Service Enhancements 342,400$ 125,000$ 217,400$

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J. Town Services – Unsustainable Funding Sources As approved in the 2016 Budget, staff are continuing to decrease the revenue budget on items that have historically been unachievable, or that are unsustainable going forward. The Corporate Staffing Gapping Factor is targeted to be reduced to 1% of full-time personnel costs over four-years. Staff originally proposed a three-year phase-in, however, upon review, a four-year plan is more realistic. The budget includes the second year phased-in amount. In addition, staff have also incorporated year two of the three-year plan to eliminate the reliance of the Tax Rate Stabilization Reserve as part of eliminating the Growth Rate Stabilization Strategy. Supplementary Taxation revenue decreases were recommended as part of the three-year phase-in plan for the 2017 Outlook. Based on current development projects underway, staff determined a decrease is not required at this time. With the continued decline in investment returns, the draft budget reflects a decrease in investment income by $333,400. This is new for the 2017 budget process, and is the first-year of a three-year phase-in plan to reduce Investment Income by $1 million.

Town Services Budget - Unustainable Funding Sources 2017 Draft Budget

Dept DescriptionCOR Gapping Vacancy Factor - Year 2 of a 4-year phase-in 200,000$ COR Investment Income - Year 1 of a 3-year phase-in 333,400 COR Eliminate Growth Rate Stabilization Strategy - Year 2 of a 3-year phase-in 500,000

Unsustainable Funding Sources 1,033,400$

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K. Town Services – Operating Budget by Expenditure and Revenues The Town Services 2017 Draft Operating Budget proposes a net operating budget of $26,985,900, an increase of $2,804,000 over the prior year.

Operating Budget - Exp / Rev 2016 Budget2017 Draft

BudgetInc / (Dec)

Town ServicesExpenditures 121,552,500$ 127,871,400$ 6,318,900$ Revenues (151,342,400) (154,857,300) (3,514,900)

(29,789,900)$ (26,985,900)$ 2,804,000$

L. Town Services – Operating Expenditures Town Services Operating Expenditures is comprised of personnel expenditures representing 58% of the budget. Contracts and Services, and Materials and Supplies each represent 16% of the expenditure budget.

Personnel 58%

Contracts, Services 16%

Materials, Supplies 16%

Other Expenditures 3%

Contributions to Reserve & Reserve Funds

7%

Town Services - Operating Expenditure Budget

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M. Town Services – Revenues Sources The most significant portion of the Town Services revenue is property taxation, representing 65% of the revenue budget. User Fees and Fines represent 21% of the revenue budget. Contributions from Reserve and Reserve Funds and Other Internal Sources are 8%, while investment income contributes 4%. The net operating budget funding request is to be determined.

Taxation 65%

User Fees & Fines 21%

Investment Income 4%

Contributions from Reserve & Reserve Funds

3%

Contributions from Other Internal Sources

4%

Grants & Donations 1% To be Determined

2%

Town Services - Operating Revenue Budget

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Operating Budget – Fire & Emergency Services

The increase in Richmond Hill Emergency & Fire Services compared to the 2017 Outlook is driven by step-rate increases and the financial implications of the Fire & Emergency Services Master Plan. Although identified as an impact to future years’ budgets, staff were unable to forecast the amount during the last budget cycle until the master plan was completed. Under Service Enhancements there are eight Firefighters and one Fire Prevention Officer requested for 2017.

Richmond Hill Fire and Emergency Services 2016 2017 Draft Inc / (Dec)

BaseExpenditures

Personnel 21,876,400$ 22,986,900 1,110,500$ Contracts, Services 631,000 656,600 25,600 Materials, Supplies 792,200 806,700 14,500 Other Expenditures 82,800 82,800 - Contributions to Reserve & Reserve Funds 17,500 17,500 -

23,399,900 23,868,100 1,150,600 Revenues

User Fees & Fines (1,494,500)$ (1,513,500)$ (19,000)$

Service Enhancements -$ 344,600$ 344,600$

Tax Levy Requirement 21,905,400$ 22,699,200$ 1,476,200$

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Operating Budget – Richmond Hill Public Library Board

The Richmond Hill Public Library Board’s 2017 Draft Operating Budget is $8.4 million. The total expenditure budget is $10.2 million. The total revenue budget is $1.8 million. The net budget is funded from the municipal property taxes. Included in their budget are three full-time and part-time staffing requests for the Oak Ridges Library Branch: Children's Librarian, Branch Library Assistant, Library Systems Specialist and Pages. In addition, part-time hours are requested for the Richmond Green Library Branch.

Operating Budget – Capital Asset Sustainability

Continuing with the Capital Asset Sustainability Strategy adopted by Council as part of the 2016 Operating Budget, the Capital Asset Sustainability Fee is proposed to increase $15 per tax bill per year. This fee is separate from the Town Services Operating Budget. The 2017 increase will generate an additional $1,025,800 for future capital asset funding for a total budget of $1,975,400.

Personnel - Full-Time 49% Personnel - Part-Time

25%

Contracts / Services 9%

Materials / Supplies 1%

Collection Development 11% Transfer to R&R Reserve

Fund 5%

Richmond Hill Public Library Board Expenditures

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Operating Budget Summary by Services

The combined operating budget including capital asset sustainability proposes a $109,062,500.00 tax levy for the 2017 budget. The net budget supports various municipal services, with the largest proportion in Fire and Emergency Services and maintaining Town owned facility buildings.

Fire & Emergency Services 20%

Town Owned Facility Buildings

13%

Parks Maintenance and Operations

7%

Providing for Infrastructure Sustainability & Capital

Programs 8%

Planning & Development Services

4%

By-Law & Licensing Services

2%

Library Services 8%

Organic, Recycling & Waste Collection

5%

Road and Related Maintenance

9%

Recreation and Special Events

3%

Winter maintenance and snow clearing

3%

Environment Services 3%

Capital Asset Sustainaility 2%

All Other Services (including Administartion)

13%

2017 Draft Operating Budget

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Financial Outlook and Staffing Plan On May 25, 2016, the Financial Services division hosted a 2017 Capital and Operating Budget Strategy Workshop. Managers, Directors, and Commissioners participated in a five-hour workshop to understand the Town’s financial pressures, and to discuss the 2017 budget strategy and processes. The morning session focused on aligning key initiatives from the newly adopted Strategic Plan Implementation Plan – Phase Three, to the timing of resource requirements, and identifying potential operating and capital budget impacts. Staff prepared a preliminary updated Financial Outlook and identified potential future Tax Levy increases.

Tax Levy Increases and the Financial Outlook

Financial Outlook - Tax Levy Impact

2017 Draft Budget

FT Staffing Additions

2018 Outlook

FT Staffing Additions

2019 Outlook

FT Staffing Additions

Town Services 2,804,000$ 18 3,909,900$ 22 3,074,400$ 21 Richmond Hill Fire & Emergency Services 1,476,200 9 1,356,800 10 1,353,400 9 Richmond Hill Public Library Board 516,400 3 911,900 4 1,017,500 4

4,796,600$ 30$ 6,178,600$ 36$ 5,445,300$ 34 Previously Forecasted 4,806,600 3,625,000

Water & Wastewater Services 1 2 Capital Asset Sustainability 1,025,800$ 1,032,200$ 1,062,800$

2018 Outlook

The 2018 Financial Outlook projects a combined tax levy impact of $6,178,600. This is a significant increase over the previously forecasted outlook of $4.8 million. The updated outlook includes $1.4 million for the Fire & Emergency Services Master Plan staffing plan (second year) and $911,900 for the Richmond Hill Library Board’s requirements. Town Services’ $3.9 million Financial Outlook includes funding for 22 full-time staffing requests. A large number of the staffing additions and funding requests support recently approved Strategic Plan initiatives. A large number of the Staffing Plan additions support recently approved Strategic Plan initiatives such as the David Dunlap Observatory Park programming and maintenance, Ed Sackfield Arena Expansion, Comprehensive Zoning By-Law, Environment Strategy implementation, Information Technology Strategy implementation, and maintaining new parks and facilities.

2019 Outlook

The 2019 Financial Outlook projects a combined tax levy impact of $5,445,300. This is a significant increase over the previously forecasted outlook of $3.6 million. The updated outlook includes $1.4 million for the Fire & Emergency Services Master Plan staffing plan (third year) and $1 million for the Richmond Hill Library Board’s requirements. Town Services provides an impact of $3.1 million Financial Outlook and it includes funding for 21 full-time staffing requests. A large number of the staffing additions and funding requests support recently approved Strategic Plan initiatives.

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Staffing Plan Details

Full-Time Department Strategic Plan Position 2018 2019 2020

CAO Regular Business Communication Advisor 1.0

CAO Regular Business Manager, Internal Audit 1.0

- 2.0 -

CFS Regular Business HR Coordinator - Part-time staff 1.0

CFS Regular Business HR Analyst 1.0

CFS Regular Business Disability Management Coordinator 1.0

CFS IT Strategy Network Administrator 1.0

CFS IT Strategy Financial Coordinator 1.0

CFS IT Strategy Client Service Analyst 1.0

CFS IT Strategy Sr. Business Analyst 1.0

CFS Service Improvement Initiatives ERP and Financial Processes Review TBC TBC TBC

CFS Regular Business Water Billing Analyst 1.0

CFS Service Improvement Initiatives Records Analyst 1.0

1.0 5.0 3.0

CSD Ed Sackfield Arena Expansion Facility Operator I 1.0

CSD Ed Sackfield Arena Expansion Lead Hand 1.0

CSD Ed Sackfield Arena Expansion Skating Program Supervisor 1.0

CSD Museum Museum/Heritage Coordinator 1.0

CSD New & Restored Parks Operator III 1.0

CSD Regular Business Box Office Supervisor (Theatre) - Partially Funded by Casual 1.0

CSD Regular Business Volunteer Supervisor - Partially Funded by Casual 1.0

CSD Regular Business Arborist 1.0

CSD Regular Business Education Program Coordinator (conversion) 1.0

CSD Regular Business Inventory Co-ordinator 1.0

CSD Regular Business Manager of Special Projects & CI 1.0

CSD Regular Business Mechanic II 1.0

CSD Regular Business Operator III 1.0

CSD Regular Business Program Assistant (Adult 55+) 1.0

CSD Regular Business Program Assistant (teen and adult; and preschool) 1.0 1.0

CSD Regular Business Project Coordinator (Parks) 1.0

CSD Regular Business Small Engine Mechanic 1.0

8.0 6.0 4.0

Count

28

Full-Time Department Strategic Plan Position 2018 2019 2020

EIS Environ Strategy Implement Sustainability Coordinator (Conversion to FT Perm) 1.0

EIS Environ Strategy Implement Project Manager - Sustainable Dev Lead 1.0

EIS Regular Business Senior Inspector 1.0

EIS Regular Business Parks Supervisor 1.0

EIS Regular Business Project Manager - Energy Project Lead 1.0

EIS Regular Business Facility Service Technician 1.0

2.0 3.0 1.0

PRS Comprehensive Zoning By-Law Urban Designer II - Zoning (2 year contract) 1.0

PRS Official Plan Planner I 1.0

PRS Official Plan Planning Technician 1.0

PRS Regular Business Manager, By-Law Licensing Enforcement 1.0

PRS Regular Business Development Engineering Technologist 1.0

PRS Regular Business Park Planner 1.0

PRS Regular Business HVAC/Plumbing Inspector 1.0 1.0

PRS Regular Business By-Law Enforcement Officer 1.0

PRS Regular Business Urban Design - Planner II 1.0

7.0 3.0 -

CSD Fire Master PlanAssistant Deputy Fire Chief - Manage Disptach Division and assist with Admin duties (not for new station)

1.0

CSD Fire Master Plan Fire Inspector (not for new station) 1.0

CSD Fire Master Plan Firefighter - to staff Aerial T ruck (not for new station) 8.0 8.0

CSD Fire Master Plan Firefighter- 4 for Aerial T ruck and 4 for Station VII 8.0

CSD Fire Master Plan Emergency Management Coordinator 1.0

10.0 9.0 8.0

Count

29

ConversionDepartment Strategic Plan Position 2018 2019 2020

CAO Economic Develop Strategy Refresh Small Business Consultant (Contract Conversion) 1.0 1.0

CAO Economic Develop Strategy Refresh Program Assistant (Contract Conversion) 1.0

CAO Regular Business ARH Advisor (2018 Contract) - Converts to FT Perm in 2019 1.0

PRS Regular Business Project Coordinator - full time conversion - RF 1.0

PRS Regular Business Project Coordinator (contract extension) - RF (2 years) 1.0 (1.0)

PRS Regular Business Director, Natural Environment (Conversion) 1.0

4.0 2.0 -

TRHPLBDepartment Strategic Plan Position 2018 2019 2020

LIB Regular Business Assistant 1.0 LIB Regular Business Librarian 1.0 1.0 1.0 LIB Regular Business Manager 1.0 1.0 1.0 LIB Regular Business Technicians 2.0 2.0 1.0

4.0 4.0 4.0

WwwDepartment Strategic Plan Position 2018 2019 2020

Www Regular Business Operator III 2.0 Www Regular Business Operator III 1.0

1.0 2.0 -

Count

Count

Count

Staffing Plan Summary

2018 2019 2020Town Services - Full Time Additions 18.0 19.0 8.0 Conversion 4.0 2.0 - New Staffing Requests before Fire, Library and Www 22.0 21.0 8.0

Fire Master Plan Levy 10.0 9.0 8.0 Library 4.0 4.0 4.0 Www 1.0 2.0 -