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2018 PRELIMINARY CORPORATE BUSINESS PLAN & BUDGET Governance & Priorities Committee (GPC) October 16, 2017 Presentation By Murray Totland City Manager
2018 PRELIMINARY CORPORATE
BUSINESS PLAN & BUDGET
Governance & Priorities Committee (GPC)
October 16, 2017
Presentation By Murray Totland
City Manager
OVERVIEW
What’s the challenge(s)?
What’s the response(s)?
How do we pay for it?
How do we compare?
Next Steps
THE CHALLENGES
Falling non-tax revenues Growing Population Growing Service
Demand
After two sluggish years, the
Economy is rebounding…
-15
-12
-9
-6
-3
0
3
6
9
Perc
en
t (%
) C
han
ge
2017 2018
Source: Conference Board of Canada
And population growth remains strong
0
7
14
21
28
35
0
1
2
3
4
5
Cum
ula
tive C
hange (
%)
Annual C
hange (
%)
Saskatoon Population Change (%)Source: Statistics Canada CSD Estimates
Annual Growth Rate (Left Axis) Cumulative Growth (Right Axis)
70,000
new residents
At the end of 2018, the City will deliver
services to about 280,000 people
210,000
220,000
230,000
240,000
250,000
260,000
270,000
280,000
290,000
300,000
310,000
City of Saskatoon Population Growth
Statistics Canada, July Annual Estimate Population Projection - 1.5% growth rate
Population Projection - 2.0% growth rate Population Projection - 2.5% growth rate
Sou
rce:
Sta
tistic
s C
anad
a, J
uly
Ann
ual P
opul
atio
n E
stim
ates
,
(bas
ed o
n 20
11 C
ensu
s da
ta)
City
of S
aska
toon
Pop
ulat
ion
Pro
ject
ion
Sou
rce:
Sta
tistic
s C
anad
a, J
uly
Ann
ual P
opul
atio
n E
stim
ates
,
(bas
ed o
n 20
16 C
ensu
s da
ta)
City
of S
aska
toon
Pop
ulat
ion
Pro
ject
ion
Non-Tax Operating Revenues are
Falling as Share of the Budget
40
44
48
52
56
60
2012 2013 2014 2015 2016 2017p 2018p
Share
(%
) of
Opera
ting B
udget
Tax Revenues vs Non-Tax Revenues
City Non-Property Tax Revenues as Share (%) of Total Operating Revenues
City Property Tax Revenues Share (%) of Total Operating Revenues
And the trend shows that the property tax
needs to fund more services
0
10
20
30
40
50
60
Taxation Grants in Lieu of Taxes General Revenues User Fees Government Transfers
Pre
cen
tS
hare
Revenue Sources as Share of Operating Budget (%)
2016a 2017 2018
Partly because less money is
coming from the Province
287.4 285.4 286.5 283.8247.7
223.1
0.0
50.0
100.0
150.0
200.0
250.0
300.0
350.0
2013 2014 2015 2016 2017p 2018p
Pe
r C
apita
$
Provincial Funding Per CapitaCity Operating Budget
(includes GIL, Franchise Fees & Revenue Sharing
2 Year Moving Average
CONTROLLNG
EXPENDITURES
Manage Expenses Innovation & Creativity Continuous Improvement
Over Half of the 2018 Consolidated Budget
Increase is for Capital Investment
2017 2018p
$261.9 $295.4
$477.6 $491.0
$330.0$352.3
Utilities
Operating
Capital
Total:
$1.14 billion
Total:
$1.07 billion
Year over Year Operating Expenditures
up $13.3 million, or 2.8 percent…but
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
2017 2018p
$477.7 $491.0
In m
illi
on
s
The lowest increase in over a Decade!
0
2
4
6
8
10
12
14
An
nu
al C
han
ge
(%
)
Annual Change (%) City of Saskatoon Operating Expenditures (Unadjusted)
Annual Change (%) Operating Expenditures 2-year moving average
And in Real Per Capita terms, we see
Expenditure Reductions in 2018
-2
0
2
4
6
8
10
An
nu
al C
han
ge
(%
)
Annual Change (%) City of Saskatoon Real Per Capita Operating Expenditures
Sources: City of Saskatoon, Statistics Canada, Conference Board of Canada
EXPENDITURE PROJECTIONS VALUE ($)
Inflation 1.67% $7.99 million
Growth $2.47 million
Snow & Ice $1.21 million
Other Service Level Adjustments $1.64 million
2018 Expenditure Increase $13.31 million
Over half of the 2.79% year over year
expenditure increase is due to inflation…
May 2017
But if we increased inflation expenditures
by expected CPI increase for 2018 then….
• All things being equal, our year over year expenditures would have
had to increase by $11 million, or 3.4%
ESTIMATED EXPENDITURES VALUE $
Inflation (using CPI 2.3%) $10.97 million
Growth $2.47 million
Snow & Ice $1.21 million
Other Service Level Adjustments $1.64 million
Potential Expenditure Increase $16.29 million
Public Safety and Transportation related services
account for over half of total operating expenditures
3
3
3
6
7
9
9
10
14
16
20
0 5 10 15 20 25
Community Grants/Housing
Waste Collection
Urban Planning
Debt Servicing
Other
Corporate Support
Transit
Fire
Recreation & Parks
Transportation
Police
2018 Operating Expenditures By Service (% Share of Total)
55%
Staff Compensation accounts for the largest
share of expenditures by category
Staff Compensation, 57.2
Operating Costs, 21.5
Capital/Reserve Transfers, 15
Debt Chrages, 6.3
2018 Operating Expenditures by Category (Share %)
FTE’s as a share of the population is on a downward trend…and
13.00
13.20
13.40
13.60
13.80
14.00
14.20
2013 2014 2015 2016 2017 2018p
FTEs/ 1,000 population
Remains consistent with those employed in the Saskatoon CMA
1.8
1.9
2
2.1
2.2
2.3
Budget 13 Budget 14 Budget 15 Budget 16 Budget 17 Budget 18
Perc
ent o
f F
TE
s to
To
tal E
mp
loym
ent
City of Saskatoon FTEs Relative to Total Saskatoon CMA EmploymentSource: CANSIM 282-0128 (as at September 1 in preceding year)
CityFTEs/ Person Employed Average
MAINTAINING SERVICES
Satisfaction with City Services is
Strong
88% phone
85% online
2017 2016 2013
Telephone 88% 88% 83%
Online 85% 83% 73%
Residents do not want Service Cuts
to help balance the operating budget
Telephone: 15%
Online: 20%
Discontinue
ServiceReduce
Service
Telephone: 69%
Online: 58%
Increase/New Fees, Taxes or
Combination
So, the Budget maintains and even
increases spending for some services
INVESTING IN
INFRASTRUCTURE
UtilityTransportation Recreation &
Culture
Land
Development
Utilities, Land Development and Transportation
account for 2/3’s of all Capital Investments
$200
$233
$315
$2,558
$3,365
$10,322
$16,481
$17,030
$28,202
$29,086
$44,393
$49,677
$93,501
Saskatoon Public Library
Arts, Culture and Events Venues
Community Support
Policing
Urban Planning and Development
Fire Services
Environmental Health
Corporate Governance & Finance
Recreation & Culture
Corporate Asset Management
Transportation
Land Development
Utilities
FIGURE 3.3.1 - Capital Investment by Business Line ($000’s)
Reserves Fund 70% of the Capital
Budget, illustrating their importance
Reserves, 70%
Borrowing, 9%
Private Contributions,
9%
All Other Sources, 12%
2018 Capital Budget Funding Sources
Less than 50% of Debt Servicing Costs
are Tax Supported
• Projected Debt• $411 Million (Dec 31,2017)
• External Borrowing
in 2018:• $12.2 million
• Internal Borrowing
in 2018:
• $15 million
15.3
10
6.8
Debt Servicing Costs ($Millions)
Property Taxation
Utility Rates
Federal Gas Tax Funding
Building Better Roads Investment*
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
2011 2012 2013 2014 2015 2016 2017 2018p
14,765
20,749 22,851
36,615 38,517 41,480 43,587 43,7607,673
7,998
8,988
10,73611,618
13,28413,141 14,336
2,165
2,299
2,434
3,1203,320
3,7993,759
3,789
In (
000)
Roadways Snow & Ice Street Sweeping Total:
$61,885
Total:
$24,603
*includes back lanes and boundary roads
KEY PROJECTS FOR 2018
$40.6 million for water treatment plant
$27.9 million for waste water treatment plant
$31.8 million for Roadway & Sidewalk Preservation
$22.9 million for Gordon Howe Complex Upgrades
$8.8 million Fire Hall #5 Replacement
$15.0 million for Energy Performance Contracting
$15.0 million for Enterprise Resource Planning (ERP)
$49.7 million in Land Development
A BUDGET BUILT ON
TRANSPARENCY
Phase 1:
Prepare/
Educate
Mar - May
Phase 2:
Engage Citizens and Staff
May - July
Phase 3:
Update/Service Level Reports/Construct
July - Oct
Phase 4:
Inform/
Debate/
Approve
Nov - Dec
2018
6.97%
• Original May 15 Estimate
• Based on Growth/Inflation and Revenue assumptions
6.48%
• June 19 Estimate
• Operation savings for insurance and PST identified
5.59%
• August 21 Estimate
• Savings from the 30 Day Challenge
• Revised civic revenue estimates
4.96%
• September 18 estimate
• Additional operational decreases through deferrals and reductions to RCE
2018 Budget Process Recap
HOW DO WE PAY FOR IT?
Expenditures
$13.3 Million
Revenues
$2.4 Million
Revenue Gap
$10.9 Million
Inflation
$7.9 million
Growth
$2.5 million
Service
Level
Changes
$2.9 million
Over half of the 2018 Property Tax increase of 4.96%
is a result of Provincial revenue reductions
2.78% 1.17%
0.41%
0.55%
0.06%
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00%
2018 Property Tax
Provincial Revenue Reductions Police Fire Services Dedicated Snow & Ice All Other Civic Services
The Proposed Property Tax increase attributed to civic
services is less than estimated consumer inflation
1.64
2.78
0.55
2.3
0
1
2
3
4
5
6
2018 Property TaxIncrease
Consumer Inflation
Pe
rce
nt
Saskatoon Consumer Inflation(2018f)
Snow/Ice Service Level
Provincial Revenue Reductions
Civic Services Growth &Inflation
HOW DO WE COMPARE TO
OTHER CITIES?
Saskatoon is just above average for
Consolidated Expenditures Per Capita in 2016
$2,801.37 $2,927.14$2,651.87 $2,492.84
$2,138.14
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
Calgary Edmonton Saskatoon Regina Winnipeg
2016 Consolidated Expenditures Per Capita Sources: 2016 Annual Financial Reports
Statistics Canada CSD Population Estimates
Consolidated Expenditures Per Capita Average
Saskatoon’s Salaries and Benefits are well
below the five City average
53.5 54.2
39.8
50.1 53.2
0
10
20
30
40
50
60
Calgary Edmonton Saskatoon Regina Winnipeg
Perc
en
t
Salaries and Benefits as Percent of Total Expenditures 2016Source: Annual Financial Reports
Wages and Benefits as Share (%) of Total Exenditures 2016 Average
Saskatoon’s FTEs/1,000 population are about
average when compared to other cities
13.515.7
13.712.7 12.4
0
3
6
9
12
15
18
Calgary Edmonton Saskatoon Regina Winnipeg
FT
Es/ 1
,00
0
FTEs / 1,000 Population (2016)Sources: 2016 Annual Financial Reports,
Statistics Canada CSD Estimates
FTEs/ 1,000 (2016) Average
Saskatoon is below average for Operating
Expenditures Per Capita in 2016
$2,282.33$2,537.78
$1,714.75
$2,410.06
$1,450.17
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
Calgary Edmonton Saskatoon Regina Winnipeg
2016 Operating Expenditures Per Capita Sources: 2016 Annual Financial Reports
Statistics Canada CSD Population Estimates
Operating Expenditures Per Capita Average
Saskatoon collects the least amount of property
taxes per person to fund its operations
$831.65 $981.26
$796.07
$1,367.59 $1,479.55
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
Winnipeg Regina Saskatoon Calgary Edmonton
Municipal Property Taxes/Frontage Levies Collected Per Capita 2016Sources: Annual Financial Report Selected CitiesStatistics Canada: CSD Estimates July 1, 2016
Municipal Property Taxes/Levies Per Capita Average
Saskatoon has the second lowest
residential municipal property taxes…
$1,585.32
$2,402.64$1,877.38
$2,172.58 $2,351.34
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
Calgary Edmonton Saskatoon Regina Winnipeg
Residential Property Taxes By City $400,000 Assessed Value
Municipal Tax Education Tax Library Tax
But has the lowest non-residential
municipal property taxes
$5,552.76$6,740.40
$3,007.36$3,606.19 $3,396.38
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Calgary Edmonton Saskatoon Regina Winnipeg
Non-Residential Property Taxes By City$400,000 Assessed Value
Municipal Tax Education Tax Library Tax
Saskatoon has the lowest residential
utility charges among the Cities
$1,202
$1,600 $1,615 $1,755 $1,805
Saskatoon Winnipeg Edmonton Calgary Regina
*Source: City of Regina 2017 Budget Finanical Summaries
Average Water Utility Charge 2016 Sample Residential Customer (Water, Wastewater and Drainage)*Usage based on 360 cubic meters of water per year
Saskatoon’s Debt as a Share of Operating
Revenues is the lowest among the Cities
110%
86%
44% 40%
72%
0%
20%
40%
60%
80%
100%
120%
Edmonton Calgary Regina Saskatoon Winnipeg
Debt as a Share (%) Operating RevenuesSource: Annual Financial Reports
2016 2024 Saskatoon Forecast
Saskatoon’s Debt per Person is also the lowest
among the cities
$2,439
$3,581
$1,188 $1,364 $1,439
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
Calgary Edmonton Saskatoon Regina Winnipeg
Debt Per Capita 2016Source: Annual Financial Reports
Debt/ Per Capita Average
Additional Late Changes
Additional savings and revenues of
$825K, could potentially be used to:
reduce property tax increase by 0.37% to
4.59%
offset other service level changes
Caveat: still finalizing Assessment Growth
numbers
NEXT STEPS
November 14 @ 1:00 pm:
• Business Plan and Budget Agenda and Reports
Tabled with Governance & Priorities Committee
November 27 @ 1:00pm:
• City Council Business Plan & Budget
Deliberations
