Business Plan Summary

Transcription

1 Owner: Business Plan Summary Program Corporate, Operational & Council Services Service grouping Financial Management Service Type Internal Service Larry Palarchio, Director of Financial Planning & Policy, Finance Strategic Priority Financial Stability Purpose Responsible for the compilation and monitoring of the Corporate Operating and Capital budget, City of London Reserve funds/reserves, debt administration program, investment management portfolio and completion of special financial analysis/reporting on corporate related initiatives. Key processes Develop, Implement and Monitor Financial Strategy Financial & Staffing In $000s Operating budget 2010 Actual 2011 Revised Budget Expenditure: 1,026 1,142 Non-tax revenue: Net (tax supported): Capital budget 2010 Revised Budget Revised Budget Expenditure: 0 0 Non-tax revenue: 0 0 Net (tax supported): 0 0 Staffing FTEs: Percentage of expenditures budget (all rate sources): Annual per household cost of net budget ($): Develop long term funding strategies for Council approval and provide ongoing monitoring of those plans and strategies; establish financial plans including the development and maintenance of property tax, wastewater, water rate models as well as reserve funds, debt and cash sensitivity models % Outsourced percentage 0% Develop and Monitor Annual Budget Prepare annual budgets for Council approval, including establishing targets, budget format, preparation of documents and internet access, public input, and all necessary reports and by-laws; monitor annual budget performance and provide quarterly status reports, as well as source of funding reports for capital requests. Debt and Cash Management Monitor and control cash flow to ensure sufficient funds available; provide investment strategy and undertake investments to maximize investment earnings and ensure liquidity; debt issuance and management. % % Outsourced percentage 0% Outsourced percentage 20% Page 1 of 6

2 Regulatory/Policy landscape Service Delivery method Mandatory Legislative New council direction, new regulations, legislative changes Current state of this service Comprehensive structure of reserves and reserve funds are in place to stabilize cash flows, provide contingencies and build capacity for future capital investment. City of London currently has affordable debt levels as demonstrated by our Aaa credit rating. This is considered a strength for the municipality as it could borrow at low interest rates which results in a lower tax levy requirement for the municipality. Continued pressure to reduce costs without reductions in service despite costs in several areas of the budget increasing at a rate greater than CPI. Current projected short term climate of low interest rates is good for debt issuance but challenging for investing. Continued internal and external demands for high customer service on several special project initiatives (Development Charges, New Economy, Personnel/Legal Related initiatives, Corporate Systems). Recent enhancements to economy, efficiency and effectiveness Implemented a Service Based Budget document for 2011 with refinements anticipated in 2012 including integration with Business Planning in response to customer service demands for a different and more informative budget document for corporate decision making. Reallocated resources to areas such as PSAB - tangible capital assets, redevelopment of financial systems and special financial reporting and analysis requirements (personnel agreements, New Economy initiatives). Generated significant vacancy management savings throughout 2010 by maximizing service output of existing resources. Future direction of this service Reserve Fund/Reserve Review: A comprehensive review of City of London Reserve Funds/Reserves will be undertaken to ensure efficient use of assets/resources. Consolidation of reserve funds/reserves, in some cases, may be undertaken to fund program/project needs with a higher priority. Debt Administration and Issuance: To ensure effective cash and working capital management of the municipality, significant debt issuances will be required in 2011 through Ontario Infrastructure Project Corporation and open markets (RFP). Ensuring appropriate resources are dedicated to this function is essential to potentially avoiding millions of dollars of interest cost for the period. (Ex 100 m debt issuance * 1% (int rate differential) = $1 million per year, over 5 years = $5 million). The debt administration management function will become a more pertinent service area as significant complex capital investments are anticipated that require debt financing/administration. Page 2 of 6

3 Corporate Financial Systems: The budget module of the JDE system will require significant and appropriate resource and support during the 2011/2012 upgrade to ensure all Corporate users continue to receive the necessary financial information to implement their operating programs and/or capital projects. Financial Modeling: FP&P will expand its financial modeling role by enhancing Property Tax and Wastewater Models to ensure timeliness and reasonableness of corporate decision making. Furthermore, the division will look into integration with other financial models such as Wastewater, Reserve Fund and/or Debt. Integrating Key Performance Indicators into Budget Development and Target Setting. Policy Development: Key areas of focus within the near future will include updating the Reserve Fund/Reserve Policy, Debt Policy, Surplus Policy and charge backs. Objectives next 4 years PSAB Budget Compliance: Capital Budgeting and PSAB (Tangible Capital Assets) Reporting Requirements. Working with Finance staff and Department areas to ensure budget practices follow generally accepted accounting principles (GAAP). Improve staff utilization amongst corporate resources to ensure integration of Budget with Financial Statements. Expected completion year 2012 Division responsible Financial Planning & policy Actions Resources will continue to be realigned within FP&P to ensure the statutory requirements are met and debt issuances can be completed. Outcomes and measures 2012 Budget Document that is PSAB compliant Aaa Credit Rating Financial Statements - unqualified audit opinion Redevelopment of Budget System (JDE Upgrade) Key Financial Planning resources will be required in 2012 to redevelop and update several budget systems that are crucial for corporate decision making. Expected completion year 2012 Division responsible Financial Planning & policy Actions Maintain an awareness of technological change that will impact the division's operations and increase the effectiveness or efficiency of Corporation's financial development and monitoring ability Temporary additional resources may be required for these budget related systems issues and should be accommodated through the Corporate Systems Project budget. Outcomes and measures Successful upgrade of Budget Development System Page 3 of 6

4 Provide corporate financial analysis and support on Personnel Contract Negotiations throughout 2012 Continue to play a key financial planning role in the negotiation of several personnel related contracts including Management Compensation, Fire, Dearness(CAW), Local 101, Local 107, and Dearness(SEIU,RN). Financial analysis and reporting is required on both management and union cost proposals. A successful and cost effective negotiation would be the preferred outcome. Expected completion year 2012 Division responsible Financial Planning & policy Actions Creation, maintenance and updates on Personnel Cost Overview and Schedules (CAW, Management, Fire) Financial Analysis on potential Corporate impacts Outcomes and measures Successful, timely and cost effective negotiated settlements Emerging issues and challenges Budget Constraints The development of a Property Tax Supported Budget within the targeted increase will be challenging given the current forecasted positions of protective services. Budget Constraints Significant unfunded capital investments such as City Hall Options, Ontario Works in the Community, Green Bin, Rapid Transit will require financial planning and analysis with respect to funding alternatives (special levy, debt, reserve fund, rate). Balancing the community needs based on Council priorities with alternative funding strategies will present a significant challenge for the division Service changes with financial impact (+/-) Statistics and performance measures A Activity measures # of Active Capital Projects Page 4 of 6

5 # of Capital Project Financing Reports # of Active Securities on Development and Subdivision Agreements Internal Management Operating Expense Ratio - Investment Portfolio Vacant position in 2010 resulted in lower cost. (.015) B Efficiency measures $ (millions) in Reserve Funds Under Administration $ (millions) in Net Debt Under Administration Page 5 of 6

6 C Effectiveness/Quality/Satisfaction measures City of London Credit Rating Aaa credit rating through all the years. Page 6 of 6