5. Financial Policies – A Busy Two Years in Parry
Sound
Policy Date Adopted
Reserve and Reserve Fund Policy August 12, 2014 (NEW)
Procurement Policy January 20, 2015 (Updated)
Investment Policy January 20, 2015 (Updated)
Capital Financing and Debt Management Policy March 3, 2015 (NEW)
Operating Surplus and Deficit Policy April 7, 2015 (NEW)
Payments and Payables Policy July 7, 2015 (NEW)
Donations Policy July 21, 2015 (NEW)
Budget and Financial Control Policy August 12, 2015 (NEW)
6. Financial Policies – Streamlining the Budget
Process
• Adopting policies makes the budget process faster
• Reserve and Reserve Fund Policy
• Provides a mechanism to save for future needs (it is not just "rainy day")
• You do not need a reserve or fund for every different thing…Think larger bucket
• Town went from 153 reserve accounts (57 active) to 19 reserves (now 28)
• Group similar reserves together
• Operating Surplus and Deficit Policy
• Know what you are already going to do with any differences from budget
• Fund to Reserves and Reserve Funds
• Do not need to wait for the year end to be done in order to finish your budget
8. Budget and Financial Control Policy ‐ Guidance
Budget
• Defines "Baseline Budget"
• Sets a target range for tax rate increase
• Based on CPI (75% to 125% of CPI at July)
• At a minimum the increase is equal to the
union wage increase
• Consistent priority method for capital projects
Financial Control
• Sets out reporting to Council
• Q2 to Q4 with variance analysis
• Monthly year to dates
• Sets authority for changes to budget without
Council approval
9. Tax Rate Range Tax Year 2009 2010 2011 2012 2013 2014 2015
Low 3.0% 3.0% 3.0% 2.3% 1.5% 1.9% 1.9%
High 4.5% 3.0% 3.6% 3.8% 1.5% 2.0% 3.1%
Actual ‐1.5% 0.0% 3.0% 2.5% 1.5% 0.0% 3.8%
From 2009 to 2015 the average rate
increase was 1.33%
For same period the annual inflation
(Core CPI) was 1.63% (Bank of Canada)
13. Budget Binder
Before 2015
• Determination of Levy
• Convert PSAB to "levy"
• Listed the capital expenditures line by line
• Listed the transfers line by line
• Operating line budget
Now
• Policy and Overview
• Determination of Levy
• Convert PSAB to "levy"
• Summary of capital expenditures and transfers to
reserves
• Operating budget
• Capital budget
• Reserve and Reserve Fund Transfers
14. Budget Binder – Policy and Overview
• Executive Summary
• Determination of tax levy
• New Initiatives Summary
• Items considered by staff and removed
• Summary of Operating Budget
• Financial Overview
• Strategic Plan
• Financial Policies
• Performance Information
• Org Chart and Staffing
9,972,616
11,228,832
10,968,020
11,233,338
11,667,606
2011 2012 2013 2014 2015 Budget
Total Taxation
15. Budget Binder ‐ Operations
Before 2015
• Presented by PSAB Segment
• Every GL account
• New items weren't separately shown
• Each account only showed the total
• Leads to inflated spending
Now
• Presented by Departments
• Subtotals only by activity
• "New Initiatives" highlighted in exec summary
• 3 budgets for the year
• Baseline
• "One‐time"
• Service level changes
16. Service Delivery Budget – Bobby Orr
Community Centre
2015 2016
2014 Actual
2015 Budget
(As Passed)
Baseline
Budget
One-Time
Items
Service
Level
Changes Total Budget
% Budget
Change
Total Revenues $ ( 185,466 ) $ ( 186,600 ) $( 186,600 ) $ - $ - $ ( 186,600 ) 0.0%
Expenses
Total Arena administration $ 40,949 $ 65,581 $ 63,278 $ 1,000 $ - $ 64,278 -2.0%
Total Unlicensed larger equipment ( 4,935 ) ( 8,305 ) ( 875 ) - - ( 875 ) -89.5%
Total Building 483,347 502,023 498,259 - ( 10,000 ) 488,259 -2.7%
Total Ice surface 86,525 90,569 90,271 - - 90,271 -0.3%
Total Equipment 24,697 42,324 42,300 - - 42,300 -0.1%
Total Hall 39,128 35,293 35,100 - - 35,100 -0.5%
Total Expenses $ 669,711 $ 727,485 $ 728,333 $ 1,000 $( 10,000 ) $ 719,333 -1.1%
Net Loss $ 484,245 $ 540,885 $ 541,733 $ 1,000 $( 10,000 ) $ 532,733 -1.5%
Remove Amortization ( 165,913 ) ( 165,300 ) ( 172,700 ) - - ( 172,700 ) 4.5%
Net Levy $ 318,331 $ 375,585 $ 369,033 $ 1,000 $( 10,000 ) $ 360,033 -4.1%
17. Budget Binders ‐ Capital
Before 2015
• Only one year presented
• Showed only the total spent
• Included "old definition" capital
• Repairs
• Consulting reports
• "Not every year" expenditures
Now
• 5 Years, 1 year budget plus 4 forecast
• Shows the cost plus the source of funds
• Only includes Tangible Capital Assets
• Irregular expenditures are "one‐time" costs in
the operating budget
18. Capital Budget – Development and Leisure
Services
Development and Leisure
Services Call-
Sign Status Priority Cost Taxes Debenture
Provincial
Grant
Federal
Grant Other
2015 Carry
Forward
(Reserves) Reserves
Reserve
Fund
Big Sound Marina - Dock B Replacement
4 Star -
Critical Risk $ 410,000 $ - $ 142,425 $ - $ 126,900 $ - $ 140,675 $ - $ -
Building Department Vehicle Replacement
4 Star -
Critical Risk 25,000 - - - - - - 25,000 -
Town Dock Gazebo Replacement
4 Star -
Critical Risk 38,000 - - - - - - 38,000 -
Old Fire Hall Repairs Replacement
4 Star -
Critical Risk 25,000 - - - - - - 25,000 -
Total $ 498,000 $ - $ 142,425 $ - $ 126,900 $ - $ 140,675 $ 88,000 $ -
19. Reserves – Parks Reserve
Item Projected Balance Jan 1, 2016 Transfers In per 2016 Budget Transfers Out per 2016 Budget
Ending Balance, December 31
2016
Parks General $ 73,000 $ ‐ $ (10,000) $ 63,000
Forestry Tower & Park 11,453 ‐ ‐ 11,453
Y. Williams Park 10,000 ‐ ‐ 10,000
Skate Board Park 9,531 ‐ ‐ 9,531
General Waterfront 73,793 ‐ (46,000) 27,793
Waterfront Advisory 4,250 ‐ ‐ 4,250
Kinsmen Park 20,000 ‐ ‐ 20,000
Big Sound Marina 140,675 ‐ (140,675) ‐
$ 342,702 $ ‐ $ (196,675) $ 146,027