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1. TERM OF
COUNCIL (2007-2010) PLANNING AND BUDGET PROCESS AND TIMETABLE
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COMMITTEE RECOMMENDATION
That the Council approve the 2007 budget
process, related planning activities and timetables contained in this report.
RECOMMENDATION DU COMITÉ
Que le Conseil approuve le
processus budgétaire de 2007 et les activités de planification et échéanciers
connexes présentés dans ce rapport.
DOCUMENTATION
1.
Chief
Corporate Services Officer’s and Chief Corporate Planning and Performance
Reporting Officer’s report dated 23 June 2006
(ACS2006-CMR-OCM-0006).
2.
Extract
of Draft Minute, 04 July 2006.
Report
to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services organisationnels
et du développement économique
and Council / et au Conseil
23 June 2006 / le 23 juin 2006
Submitted by/Soumis par : Greg Geddes, Chief Corporate
Services Officer/
Chef des Services généraux
aAnd/et
Bob Hertzog, Chief Corporate
Planning and Performance Reporting Officer/
Chef de la planification municipale
et de l'évaluation du rendement
Contact Person/Personne ressource : Marian Simulik, Acting Director, Financial
Services and City Treasurer/Directrice des services financiers et trésorière
municipale par intérim
Financial Services/Services financiers
(613) 580-2424, ext./poste 14159,
Marian.Simulik@ottawa.ca
and/et
Kevin Whitehouse, Manager, Corporate
Planning/Gestionaire, Planification municipale
Corporate Planning/Planification
d’ensemble
(613)580-2424, ext./poste 15431,
Kevin.Whitehouse@ottawa.ca
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SUBJECT: |
TERM OF COUNCIL (2007-2010) PLANNING
AND BUDGET PROCESS AND TIMETABLE |
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OBJET : |
MANDAT DU CONSEIL (2007-2010) – ACTIVITÉS DE PLANIFICATION, PROCESSUS
BUDGÉTAIRE ET ÉCHÉANCIERS |
REPORT RECOMMENDATION
That the
Corporate Services and Economic Development Committee recommend
Council approve the 2007 budget process, related planning activities and
timetables contained in this report.
RECOMMANDATION DU
RAPPORT
Que le Comité des services organisationnels et
du développement économique recommande au Conseil d’approuver le processus
budgétaire de 2007 et les activités de planification et échéanciers connexes
présentés dans ce rapport.
EXECUTIVE
SUMMARY
Each yearOn
an annual basis, City staff prepares
and presents for Council’s consideration for Council’s consideration an outline
of the process that will be used in
that year for the development of the subsequent
year’s budget. This
document,
called the Budget Process and Timetable, is
a first step in developing the annual budget.
In
the years since amalgamation the absence of an overall strategic planning
framework for the City has resulted in the annual budget cycle becoming the “de
facto”
planning cycle. The
annual budget process emphasizes
day-to-day
services provided to residents of the City of Ottawa, and does not clearly
present the “change agenda”
or Council priorities that Council wishes to promote during its
term of Council. Therefore,
the annual budget process is not the correct
tool to
capture
and set longer-term
strategic priorities for the City.
InOver the past several years Council
has provided direction to staff about the types of improvements they it
would like to see in the annual budgetat
process including:
§
. Increased transparency in
decision making;,
§
Llonger-term
forecasts and thinking;,
and
§
Cclearer
priorities linked to financial strategies.
are some of
the direction that staff has received
This
feedback has been incorporated into several policy documents including . A number
of initial
steps from the City, such as the first City Corporate Plan (CCP)
and the latest version of the Long-Range Financial Plan
(LRFP), have moved the City along those directions. At
the same time, lessons have been learnt from the experiences of those initial
steps.
The
Integrated Planning Framework (IPF)
was developed to recognize the need for
Council to set priorities and
a long-term
vision for the City. The
IPF facilitates the ability for Council
to more effectively direct the planning cycle and
establish the City’s
priorities; and
therefore,
focus the annual budget debate
around the implementation of these priorities
and strategies.
The
planning component of the City’s IPF
was presented to Council in the spring of 2005.
This
document identified how the remaining components fit into the IPF. The IPF
provides a
number of things including:
§
an overall strategic framework for the City
in the form of the CCP and related documents,
§
supporting financial strategies
in the form of the LRFP,
§
an identification of human resource needs to
support these strategies in the form of the
Human Resources Plan
(HR Plan); and
§
the ability to streamline
the decision-making process and provide for better integration of the various
planning documents developed by the City.
· Most notably, it sets the context and the process for integrating the 2007 annual budget cycle into the planning framework for the first time since amalgamation, which is a significant change in the City’s budget cycle.
Based on the directions
from Council, lessons from
those initial steps,
and recommendations from
City
studies,
several significant potential improvements to the City’s Integrated Planning
Framework have been identified.
These will
facilitate
Council’s establishment of
its priorities, streamline
the decision-making process and provide for better integration of plans.
This
report outlines the key changes in the planning framework for which Council
approval is sought and explains why these changes are being recommended.
Assumptions and Analysis:
The
eEnhancements
to the IPF outlined in this report are based on
upon the following principles:
§
Plans and budgets should be based on a term of
Council approach that allows Council to clearly establish what it wants to
accomplish during its mandate;
§
City plans should be consistent and integrated with
each other; and on-going decision-making should be linked to those plans;
§ Mechanisms need to exist to allow plans to be adjusted during their duration so as to accommodate changing conditions within the City and changes to Council’s policies;
§
High-level direction for strategic plans should be provided
by City Council , and (plans
and budget details based on that direction should
be are approved by Council);
and
§
Plans
and budgets should be based on a term of Council approach that allows Council
to clearly establish what it wants to accomplish during its mandate
§ City priorities should be developed within the City’s financial context; longer-term financial forecasts should be provided to assist in the establishment of priorities and to provide greater transparency about the City’s projected financial future.
§City plans should be consistent and integrated with
each other; and on-going decision-making should be linked to those plans, and
§mechanisms need to exist to allow plans to be
adjusted during their duration so as to allow for changing conditions
The framework described builds on existing budget
development processes while making the improvements directed by Council. It contains the
following
main
improvements:
Proposed
Process – What is new for 2006-2007:
Staff
suggests the following improvements for the 2006/2007 IPF work
plan:
§
An updated
draft LRFP document will be prepared and tabled
with Council in September 2006, which
will include
long-range financial forecasts for both
the capital
and operating budgets. Operating
forecasts were not included in
prior LRFP documents. The LRFP
will be based
upon existing planning documents; and
will contain
financial issues and strategies,
plus the
principles/directions
for developing the 2007 budget.
§
An orientation and priority-setting workshop will
be held with
the newly elected Council in late November
or early December 2006, immediately following the election, during
which Council will establish its
priorities for its four-year
term, and
identify major projects or activities to be undertaken to achieve those
priorities. This
information will be used to develop a Term
of Council CCP, and may impact the
draft LRFP document.
§
Draft
2007 Four-year, term of Council, operating
and capital budgets will be prepared based on the approved CCP
and LRFP and will include both four year operating and
capital forecasts.
§
§
Council should approve the CCP and the LRFP
concurrently at the same Council meeting early in the new year.
§A combined operating and capital long-range
financial plan be prepared, which will include financial issues and strategies
plus principles for developing the budget, and be tabled with Council in
September 2006
§An orientation and priority-setting workshop be
held for the Council elected in November 2006 during which Council will
establish their priorities for their term of Council and the major projects or
activities to be undertaken to achieve those priorities, and
§The
City Corporate Plan and Long-Range Financial Plan should be approved by Council
at the same Council meeting early in the new year
Financial Implications:
The
fFunding
to carry out the activities described in this report is already
available within existing budgets.
Public Consultation/Input:
Members
of A number of Councillors
provided suggestions to staff on aspects of the planning framework during
discussions about this framework and performance reporting in March and April
of 2006. The recommended process to
implement Council’s planning framework has been based upon directions provided
by Council in earlier reports and best practice research with other
municipalities.
RÉSUMÉ
Chaque année, le personnel de la Ville prépare
et soumet à l’examen du Conseil les grandes lignes du processus qui servira à
établir le budget de l’année suivante.
Ce document, appelé Directives budgétaires, constitue la première étape
de l’élaboration du budget annuel.
Depuis la fusion des municipalités,
en raison de l’absence d’un cadre général de planification stratégique pour la
Ville, le cycle budgétaire annuel est devenu le cycle de planification de facto. Malheureusement,
le processus budgétaire annuel met l’accent sur les services courants offerts
aux résidents de la Ville d’Ottawa et ne présente pas clairement le
« programme de changements » ou les priorités du Conseil, que ce
dernier souhaite promouvoir durant son mandat.
Le processus budgétaire annuel n’est donc pas l’outil adéquat pour
définir et établir les priorités stratégiques de la Ville à long terme.
Au cours des dernières années, le Conseil a donné des directives au
personnel sur le type d’améliorations qu’il souhaiterait que l’on apporte au
processus budgétaire, dont les suivantes :
§
. Accroître
la transparence du processus décisionnel;,
§
Établir
des prévisions et optiques à plus long terme;
§
Établir
des priorités plus claires, arrimées aux stratégies financières.
are some of the direction that staff has
received
Ces commentaires ont été intégrés à
plusieurs documents de politique, y compris le premier Plan directeur municipal
(PDM) et la plus récente version du Plan financier à long terme (PFLT),
have moved the City along those directions. At
the same time, lessons have been learnt from the experiences of those initial
steps.
Le Cadre de planification intégrée
(CPI) a été préparé afin de reconnaître le besoin pour le Conseil d’établir des
priorités et une vision à long terme pour la Ville. Le
CPI accroît la capacité du Conseil à orienter plus efficacement le cycle de
planification et établir les priorités de la Ville; il focalise donc le débat
entourant le budget annuel sur la mise en œuvre de ces priorités et stratégies.
Le CPI de la Ville a été présenté au
Conseil au début de 2006. Il prévoit notamment :
§
Un
cadre stratégique général pour la Ville, défini dans le PDM et les documents
connexes;
§
Des
stratégies financières à l’appui de ces priorités, énoncées dans le PFLT;
§
La
détermination des besoins en ressources humaines à l’appui de ces stratégies,
énoncée dans le Plan des ressources humaines (PRH);
§
La
capacité de rationaliser le processus décisionnel et d’intégrer plus efficacement
les divers documents de planification élaborés par la Ville.
Plus particulièrement, et pour la toute
première fois depuis la fusion des municipalités, le CPI établit le contexte et
le processus qui permettront d’intégrer le cycle de budgétisation annuel pour
2007 au cadre de planification, ce qui constitue une amélioration considérable
au cycle budgétaire de la Ville.
·Based
on the directions from Council, lessons from those initial steps, and recommendations from City
studies,
several significant potential improvements to the City’s Integrated Planning
Framework have been identified.
These will
facilitate
Council’s establishment of
its priorities, streamline
the decision-making process and provide for better integration of plans.
This
report outlines the key changes in the planning framework for which Council
approval is sought and explains why these changes are being recommended.
Hypothèses et analyse :
Les améliorations apportées au CPI,
décrites dans ce rapport, reposent sur les principes suivants :
§
Les
plans et les budgets devraient être basés sur la durée du mandat du Conseil
pour permettre à ce dernier d’établir clairement ce qu’il entend réaliser
pendant son mandat;
§
Les
plans de la Ville devraient être cohérents et intégrés les uns aux autres; et
les décisions courantes devraient être arrimées à ces plans;
§
Il
importe de mettre en place des mécanismes permettant de rajuster les plans de
façon à tenir compte de l’évolution de la conjoncture au sein de la ville et
des changements apportés aux politiques du Conseil;
§
Le
Conseil devrait donner une orientation de haut niveau pour les plans
stratégiques (les plans et détails budgétaires émanant de cette orientation
sont approuvés par le Conseil);
§
Plans
and budgets should be based on a term of Council approach that allows Council
to clearly establish what it wants to accomplish during its mandate
§
Les
priorités de la Ville devraient être élaborées dans la perspective du contexte
financier de la Ville; des prévisions financières à plus long terme devraient
être définies pour faciliter l’établissement des priorités et assurer une plus
grande transparence de l’avenir financier projeté pour la Ville.
§City
plans should be consistent and integrated with each other; and on-going
decision-making should be linked to those plans, and
§mechanisms
need to exist to allow plans to be adjusted during their duration so as to
allow for changing conditions
The
framework described builds on existing budget development processes while
making the improvements directed by Council.
It contains the
following
main
improvements:
Processus proposé
– Du nouveau pour 2006-2007 :
Le personnel propose les
améliorations suivantes au plan de travail du CPI pour 2006‑2007 :
§
Un
PFLT provisoire mis à jour sera préparé et déposé au Conseil en septembre 2006
et comprendra des prévisions financières à long terme pour les budgets
d’immobilisations et de fonctionnement.
Les prévisions du budget de fonctionnement n’étaient pas comprises dans
les PFLT antérieurs. Le PFLT se fondera sur les documents de
planification existants, et il présentera les enjeux et les stratégies d’ordre
financier, de même que les principes et orientations qui permettront d’élaborer
le budget de 2007.
§
Un
atelier d’orientation et de priorisation sera offert à la fin de novembre ou au
début de décembre 2006 au nouveau Conseil élu, immédiatement après les
élections. Durant cet atelier, le Conseil établira ses priorités pour son
mandat de quatre ans et déterminera les grands projets et les principales
activités à entreprendre à l’appui de ces priorités. Cette
information servira à élaborer un PDM axé sur la durée du mandat du Conseil, et
elle pourra avoir un effet sur le PFLT provisoire.
§
Les budgets préliminaires d’immobilisations et de fonctionnement pour
2007 seront préparés en fonction du PDM et du PFLT approuvés, et ils
présenteront les prévisions au titre du fonctionnement et des immobilisations
pour les quatre prochaines années.
§
§
Le
PDM et le PFLT devraient être approuvés en même temps par le Conseil au cours
d’une même réunion au début de la nouvelle année.
§A
combined operating and capital long-range financial plan be prepared, which
will include financial issues and strategies plus principles for developing the
budget, and be tabled with Council in September 2006
§An
orientation and priority-setting workshop be held for the Council elected in
November 2006 during which Council will establish their priorities for their
term of Council and the major projects or activities to be undertaken to
achieve those priorities, and
§The
City Corporate Plan and Long-Range Financial Plan should be approved by Council
at the same Council meeting early in the new year
Répercussions financières :
Le financement pour mener les
activités décrites dans ce rapport est déjà disponible à partir des budgets
existants.
Consultation publique et commentaires :
Les membres du Conseil ont transmis des
suggestions au personnel relativement au cadre de planification au cours des
discussions entourant ce cadre et les rapports de rendement en mars et avril
2006. Le processus recommandé pour mettre en œuvre le cadre de planification
repose sur les directives fournies par le Conseil dans des rapports antérieurs,
de même que sur l’étude des pratiques exemplaires en place dans d’autres
municipalités.
BACKGROUND
Since
amalgamation the City of Ottawa has recognized the importance of longer term
planning and priority setting with both
the Ottawa 20/20 planning document and the
adoption of the first Long Range Financial Plan in 2002. While
there have been many steps
taken in 2004,
2005, and to date in 2006
towards creating a more comprehensive framework for strategic planning and
financial management, the City has yet to achieve alignment among
the annual budget cycle, the strategic planning cycle and the Term of Council. This report provides the process
for achieving
this goal.
The
financial sustainability, vulnerability and flexibility of municipalities in
Canada has become the focus of attention in the past few years with of
both higher levels of government engaged in the debate. Municipalities are generally moving towards
extending their planning horizons and integrating their various planning
documents in order to get
achieve a clear picture of their overall
financial challenges. Since amalgamation the City of Ottawa has
recognized the importance of longer term planning and priority setting both
with the Ottawa 20/20 planning document and with the adoption of the first Long Range Financial Plan in 2002. Therefore,
it makes sense for
the City of Ottawa to align its
planning cycle with the Term of Council.
Since amalgamation,that time Council has adopted a number two
additional of
other planning tools that form key parts of the City’s revised
planning framework:
§
In 2005, Council approved the City’s first City
Corporate Plan (CCP) which outlined Council’s priorities
for the City for the next four years;
and
§ In 2005, Council received the City’s first Human Resources Plan (HR Plan) which provided a five-year retrospective and five-year prospective view of the City’s staffing levels.
On an annual basis, City staff
has also prepared for Council’s
consideration an outline of the process that will be used in that year for the
development of the subsequent
year’s the
budget. Once approved, a
Budget Directions document is prepared which provides Council and residents
with a preliminary overview of the projected spending pressures and potential
revenues for the next year. Upon
consideration of the report, Council has provided direction to staff as to how
the budget is to be developed for consultation with residents.
This
will no longer be the case commencing with the 2007 budget cycle. The
planning components City’s Integrated Planning Framework (IPF) was
presented to Council in 2005.
The
complete IPF provides an overall strategic framework for the
City in the form of the CCP and related documents, provides supporting
financial strategies in the form of the Long Range Financial Plan (LRFP) and
the HR Plan, and, most significantly sets the context and the process for
integrating the 2007 annual budget cycle into the planning framework for the
first time.
This report outlines the recommended process for the development of the 2007
budget, taking in to consideration past Council direction, lessons
gathered from previous year exercises, and best practices in use in other
municipalities.
The
process of renewing the City’s strategic and financial plans begins in earnest
with the election of the new Council in November. In late 2006 and early 2007, City Council will develop and
approve the operating and capital budgets, the
City Corporate Plan (CCP), the Human Resources (HR) Plan and the Long-Range Financial Plan (LRFP). Renewal
of all of the major planning and budgeting documents in the same year provides a
unique opportunity to refine the City’s planning and budgeting process, with a
particular view towards incorporating recommendations and directions from
earlier Council motions and City studies, as described below.
The
current IPF
is linked to the In
22004
report entitled, ,
the “It's About Accountability”
report was approved by Council.
Thathe report included three
recommendations relevant to this discussion:
§
Prepare a two-year forward- looking budget,
that projects two additional years of expenditures based on what is known and
likely, in order to consider future year impacts of current budget decisions
and to disclose future year issues;
§
Provide a long-term capital budget and financing plan,
so that major capital projects can be planned and assessed against available
financing;,
an
andd
§
Link performance results with the strategic plan, so that financial and other results
can be measured against a baseline.
Also
in 2004,That same year Council approved thea 2005 Budget Process and Timetable
that included a couple
oftwo longer-term directions for planning and
budgeting:
§
The LRFP is to be renewed in the last six months of
each term of Council to enable a full public discussion on the longer-term
financial issues prior to the election of a new Council,
and to provide Council with the information it will need to set its term of
Council priorities, and
§
A multi-year budget is to be prepared, to clearly illustrate how Council’s
priorities for its term are financially reflected.
This was followed by Council’s
approval ofIn
2005, the
first CCP in 2005.was
developed and approved by Council. The CCPIt
set out Council’s broad priority areas and specific actions to achieve those
priorities. At
the same time, s
part of the approval of that first plan Council reconfirmed its
commitment to multi-year budgeting, and term of Council priority setting,
ands
well as the integration of budgets
with Council prioritiespriorities
that take into account the requirements
that:. Through
that initial process a series of lessons were learned:
§ City Councillors need to be more directly involved in the initial development of strategic priorities;
§
The relationship between the various planning and
budgeting documents needs to be improved to clarify the role of each document
and improve their integration;,
and
§ The process of developing and approving the documents needs to be streamlined, where possible.
This
yearIn 2006, the Auditor General delivered hisa
report on his review of the Management Control
Framework at the City of Ottawa, which made several
recommendations on the City’s planning and performance management
framework. Of
The most relevantce of
these recommendations was to this discussion, he recommended thatto
enhance the link between the budget and the CCP
be enhanced. In the
Auditor General’s his
view “the success of the City Corporate Plan depends on how well it informs the
budget process.”
During 2006, City staff have also
researched planning frameworks in place in certain Canadian and other
municipalities (;
e.g. the City of Calgary, Region
of Peel, City
of Toronto,,
the Halifax, Regional
Municipality and the City of Melbourne
Australia).
Best practice elements from each of thethose
planningse
frameworks have been adopted in the proposals contained in this report.
This
report presents
several significant improvements to the City’s IPF,
specifically the manner in which the annual operating and capital budgets are
developed within this framework. This
report also replaces the traditional Budget Process and Timetable report
that would normally go forward to Council. The
recommended process for the development of the 2007 budget, takes into
consideration past Council direction, lessons gathered from previous years’
exercises, and best practices in use in other municipalities.
Within
the context of the IPF, the new budget timelines and process of renewing the
City’s strategic and financial plans begins in earnest with the election of the
new Council in November. In late 2006
and early 2007, City Council will develop and approve:
·
the revised City Corporate Plan;
·
the revised Long-Range Financial Plan;
·
an updated Human Resources Plan; and
·
the 2007 operating and capital budgets.
Renewal
of all of the major planning and budgeting documents in the same year provides
a unique opportunity to refine the City’s planning and budgeting process, with
a particular view towards incorporating recommendations and directions from
earlier Council motions and City studies as described below. More
importantly,
it links spending plans in the form of the annual budget to the City’s
strategic planning documents, or more specifically, the Council’s priorities
for its
Term of Council.
DISCUSSION
Principles
The
recommended process on the following pages is based on the following principles. These principles have been developed based
on Council directions, some of which were described in the earlier background
section:
§High-level direction for the plans should be
provided by City Council, and plan and budget details based on that direction should
be approved by Council
§Plans and budgets should be based on a term of
Council approach that allows Council to be clear about what it wants to
accomplish during its mandate
§City priorities should be developed within the
City’s financial context; longer-term financial forecasts should be provided to
assist in the establishment of priorities and provide greater transparency
about the City’s projected financial future
§City plans should be consistent and integrated with
each other; and ongoing decision-making should be co-ordinated with those
plans, and
§Mechanisms need to exist to allow plans to be
adjusted during their duration so as to allow for changing conditions
The cornerstone of the various recommended changes to the
planning framework and the budget development process is the
establishment of a set of clear tTerm
of Council priorities by the new City Council in late 2006 and early 2007. For each priority
identified in that exercise it is,
expected that outcomes or goals will be set and the
key activities to achieve those goals will be identified. This will enhance public
accountability by allowing citizens to better understand City priorities
and assess progress in the achievement of its goals.
Key
Changes
The CCP approved by Council in
2005 presentedwas
the first opportunity for the City to establish key priorities and connect
those priorities to the budget. Following that initial planning cycle, staff have received substantial feedback regarding
the improvements that should be made to the planning process for future years.
In
the years since amalgamation,
the absence of an overall strategic planning framework for the City has
resulted in the annual budget cycle becoming the de facto planning cycle. The
annual budget process has an emphasis on day-to-day services provided to
residents of the City of Ottawa, and does not clearly present the “change
agenda” that Council wishes to promote during its
term of Council. The annual
budget process is not the right tool for capturing
and setting longer term strategic priorities for the City.
The
development of an IPF at the City of Ottawa presents
an opportunity to address this issue and to allow
Council to more effectively direct the planning cycle, the City’s
priorities and to allow the annual budget process to focus on the
implementation of these strategies.
The
recommended changes to the framework responds to that opportunity feedback and incorporates a number of
key changes from the planning and budgeting process used in past years. It
also establishes the link between the annual budget process and the planning
cycle.
The
key changes are highlighted
identified herebelow,
along with an explanation of why these changes are being recommended.
The
recommended changes include:
§
having Priorities
established by members
of Council establish term of Council priorities aat a priority
setting workshop immediately following the election;
§
utilizing the outcome of the priority setting
exercise to will drive the development of
the CCP(in prior years,
staff came forward with an initial proposed list of priorities that Council
could amend). As described in the
principles above, high-level directions should be developed by elected
officials instead of staff;
§
having all
strategic projects in the CCP (in prior years, these appeared in the
departmental business plans and/or the CCP).
§
the addition of fFour-year operating budget projections
will be included within the LRFP
(prior versions of the LRFP provided capital budget projections only)
in order to provide a. This change is recommended to provide a
complete, four-year, high-level picture of the City’s finances;
§
The
LRFP will include an
assessment of the operating and capital issues facing the City
within the LRFP document and indicating, potential strategies to deal with
those issues and
and the associated financial policies and
principles that need to be incorporated into
the annual the budgetsbudget
process to achieve these goals.
§
All strategic projects
will be included in
the CCP (in prior years, strategic
plan projects were listed in any one of four
departmental business plans or the CCP).
Under
this proposal, all strategic priorities will be contained in a single document
for Council to approve
§
having Council approve tThe
LRFP and CCP will
be approved at the same Council meeting (in
the past, there were years between the Council meetings in which these
documents were approved). toThis change will allow Council
and the public to clearly see the linkages between financial and
strategic priorities to
be considered together and to be more closely aligned;
§
Multi-year, term of Council, budgets will be
presented (previously, the operating budget provided one-year of budget
estimates only, while the capital budget provided one year of budget estimates
and two additional years of budget forecast).
pProviding
four years of budget informationi
(both capital and operating)on
as part of the annual budget process should to
give Council a more complete financial picture and allow more rigorous
financial planning;
§
revising tThe
HR Plan to will have a four year time frame (the
previous HR Plan had a five year time frame)
to make it . The period
covered by the HR Plan will then be consistent
with the LRFP, CCP and the annual budget documents multi-year budget;
and
§
eliminating the need for a separate Budget
Process and Timetable report and Budget Directions report (as this will become
part of the LRFP).
Overall
Planning Architecture
The following schematic provides the overall
recommended architecture for the planning framework. The primary
point of reference for the plans in the City’s IPF is the City’s strategic
vision, as established through Ottawa 20/20.
That vision is then mapped to strategic goals at the CCP and LRFP stage. A greater degree of detail on how those
strategic goals will be achieved is provided in a series of documents such as
departmental strategic frameworks, branch narratives and multi-year budgets.
Each
of the main documents in the IPF
is designed to meet a particular role in the planning and budgeting
process. The
following schematic provides the overall recommended architecture for the
planning framework. A
description of the role of each of the main documents follows.
Roles of Key Documents
Each
of the main documents in the Integrated Planning Framework is designed to meet
a particular role in the planning and budgeting process. A description of the role of each of the
main documents follows.
LRFP
The
new LRFP is being designed to identify the various financial issues the City is
facing and to identify both short and longer-term strategies for their
resolution. In addition, the LRFP will
identify financial policies and principles to be incorporated in the
development of the term of Council budgets.
As
in prior LRFP exercises the longer-term capital needs and funding will be
identified and funding strategies and priorities recommended. The LRFP will also include a four-year
operating forecast to provide Council with context when setting CCP
priorities. Both long- and short-term
strategies will be identified for Council’s consideration in dealing with the
financial issues arising from the operating budget.
CCP
The CCP utilizes
existing approved
policies and strategies and the outcome of the post
election priority setting workshop is designed to
allow Council to document establish the specific priorities, and the high level
projects to and achieve Council’sthose priorities,
for the current term of Council.its term. It also demonstrates how ongoing City activities align with and
contribute to these priorities set by Council. Along with the LRFP, it will guide the
development of the annual budget processmulti-year
budgets. All strategic
initiative capital items and all operating budget enhancements will be listed
in the CCP to ensure alignment with Council priorities. The projected cost of those items will match
the amounts identified in the LRFP so that strategic priorities are integrated
within current financial realities.
The CCP will contain descriptions
of Council priorities grouped into “agendas.”
Each agenda will also
show the outcomes or goals that Council wants to achieve, and for
each goal the specific projects that will be carried out to achieve itthose
specified goals. A sample
version, with fictional content, of one goal from the CCP is attached as Annex
A.
LRFP
A
revised LRFP is being developed to
identify the various financial issues the City is facing and to identify both
short and longer-term strategies for their resolution. In addition, the LRFP will identify
financial policies and principles to be incorporated in the development of
annual budgets
throughout the term of Council. The LRFP will contain information on budget
directions which has been traditionally put into a separate report.
As
in prior LRFP documents,
the longer-term capital needs and funding will be identified and funding
strategies and priorities recommended.
The LRFP will also include a four-year operating forecast to provide
Council with context when setting CCP priorities. Both long- and short-term strategies will be identified for
Council’s consideration in dealing with the financial issues arising from the
operating budget.
Annual Budget Cycle - Multi-Year Operating and Capital Budgets
A
major change to the annual budget preparation is the introduction
of four-year operating and capital budgets in the 2007 budget cycleThe multi-year operating and capital budgets are
designed to establish a detailed budget allocation for.
The 2007 budget
will consist of a detailed budget for the first year of
the new term of Councilthe
first year
in the term of Council, and detailed budget ,
and forecasts for the remaining
three yearsder
of the term of Council. (i.e. years two to four). The budgets will show the detailed impact of the
decisions made as part of the CCP and LRFP approval. The forecasts for years two to four of
the multi-year budget documents will be updated on an annual basis to
account for any significant changes in assumptions and conditions, and a
forecastdetail
for a further fourth year will be added
each year.
The specific information included in the operating and capital budgets will be similar to the 2006 budget presentation, except that four years of budget detail will be provided. The operating budgets will contain information on branch objectives, services and performance measures aligned with the CCP.
To
assist in the presentation, design and layout of the information in the budget
document, tThe City has engaged the services of
Plamondon & Associates Inc. to conduct a review of "best
practices" in the the area of multi year budget presentation
of multi-year budgets
formats that are currently in
use by other
municipalities in North America This
firm was also engaged in 2004 and produced the "It's About
Accountability" report. The report
recommendations as approved by Council have been implemented and have formed
the basis for financial information reporting in the City. Based
on the results of the "best practices" review, sStaff
will be providing recommendations in
late August toeparing a presentation to the Long Range
Financial Planning Sub-committee in
late August which
will recommend on a preferred presentation format
bt.
ased on this study.
HR Plan
The HR Plan is designed to
provide Council with a tool to understand the
distribution of Full Time-Equivalent
positions (FTEs)
in the various work units of the City Departments, as
well as a forecast of projected
changes to this distribution and the overall FTE
number in future years.staffing
levels and strategies. The HR Plan is guided by and linked to
the strategies established by Council in the CCP and LRFP.
The HR Plan will follow
a similar format to the 2005 version,
but will only contain a four
yearfour-year retrospective and a four yearfour-year
forecast of FTEfull-time
equivalent (FTE) allocations
to be consistent with the other planning documents in the IPF. This
data is split in a variety of ways such as job type by department, branch,
bargaining unit, etc.
Departmental Strategic Frameworks
New
in 2007 will be the development of The
departmental strategic frameworksframeworks,
which will replace the Departmental Business Plans that
were published in 2005. These
new documents will be much smaller and no longer overlap and duplicate
information contained within the CCP.
They
areare designed to provide the standing
committees for each department with an understanding of how the branches of the
department intend to work together in general and to support the priorities
established by Council in the CCP. These
frameworks explain the department’s mission and the principles that guide the
department’s work. .
The frameworks will contain a departmental mission statement, a list of
guiding principles, and aseries
set of common
of goals,
a list of guiding principles and a departmental mission statement
for the department..
Process
and Timeframes:
The
following process describes how
staff plans In order to
deliver the proposed changes to the IPFeach of the document roles earlier described,
and to meet the principles listed at the beginning of this section, the
following process is recommended for 2006/2007.
.
The
process changes will begin in In September of 2006,
, when a
draft version of the LRFP will be tabled with Council. ,
per Council’s direction as described in the Background section of this report.This
draft plan will provide members of Council and the public with the most
up-to-date information on the City’s financial forecast, and provide an overview
of the internal and external factors influencing the long range financial
picture for the City.
A
multi-day Council priority setting session will
be held in late November or early December Ffollowing
the election. The
,a a
multi-day Council orientation will be held in late November or early December. The agenda for this
session e orientation will
be established following discussions with Councillors.
At
this point staff is
proposing that it include,
but in general the following:
§
There
will be aAn initial orientation to the City planning
process, and major initiatives including
existing strategic plans, the City’s financial and operating context, and an
overview of City operations;
§
Councillors would develop high-level priorities and
goals for the City for its
term of office;
§
Councillors would identify major projects or
activities they would like to see carried out in order to achieve the goals
they developed;
§ Councillors will have an opportunity to discuss their key issues, concerns and questions particularly as they relate to the LRFP and high-level priorities and goals;
§
Councillors will discuss and provide direction on the draft
version of the LRFP that was tabled in September.
r
§Councillors
will develop high-level priorities and goals for the City for their term of
office, and
§Councillors will identify major projects or
activities they would like to see carried out in order to achieve the goals
they developed
Based
on the directions received from Councillors during the orientation session,
Aa
draft CCP will be presented to Council in January 2007 for Council’s
consideration that will reflect the outcome and direction
received from Councillors during the priority setting session. Council
will approve the CCP with the LRFP document concurrently.
In
February of 2007, the 2007a
draft, multi-year budget will be tabled with Council, which
will be based on the LRFP and CCP approved by Council. From that point, the
remainder of the budget process will
be similar to the process usedused
for the 2006 budget.
will be followed:
Councillor-led ward budget consultations will occur in late February and
early March 2007, and will be followed by public delegations to
Committee of the Whole. The formal budget debate will proceed
after public consultations; followed by approval of the 2007 budget. The 2007
budget must be established by 27 March 2007 (in order to meet the
tax billing cycle).
Consultation
The process for receiving public input on the budget is one of Council’s chief areas of interest.
The 2006 Budget Process and Timetable report analyzed and made recommendations on future budget consultations. The consultation process for the 2007 budget process is recommended to follow those directions, which in brief are:
§ Make available one main summary of the budget, with a feedback form, as the main tool for consultations;
§ Use Councillor ward meetings (supported by staff) as the primary method of consultation;
§ Provide a budget phone line and e-mail address for comments during the draft budget consultation phase;
§ Conduct a complete Citizen Satisfaction Survey every four years at the mid-term of a Council’s term (i.e. the next one to occur in 2008), and
§ Use the Committee of the Whole process for public delegations on budget estimates. In past years, three days were scheduled for public delegations. Given that a term of Council budget is being developed, two additional days of public delegations are to be scheduled, to bring the total to five days. These days will be scheduled in the usual fashion to allow for early morning and late evening sessions as needed.
2006-/2007 Key Dates
Date
|
Item |
|
27 September 2006 |
LRFP tabled with Council |
|
13 November 2006 |
Municipal election |
|
late November |
Council orientation and priority setting workshops |
|
10 January 2007 |
Public delegations on the CCP and LRFP received by Committee of the Whole |
|
11 January 2007 |
CCP and LRFP approved by Council |
|
14 February 2007 |
Multi-year budget estimates and HR Plan tabled with Council |
|
15 February – 02 March 2007 |
Councillor ward meetings |
|
05 – 09 March 2007 |
Public delegations to Committee of the Whole |
|
19 – 22 March 2007 |
Budget deliberations in Committee of the Whole |
|
27 March 2007 |
Budget must be set by this date for tax billing cycle |
Future Years
There
are additional implications
for the remaining years of the new
term of Council.
Given
that this Integrated Planning Framework will move the City to developing
strategies and financial plans to cover an entire term of Council, the steps
that will occur in future years must also be defined. These are as
follows:
Annually
On an annual basis:
§ Major changes in the City’s financial or strategic context will be brought to Council's attention as they occur;
§
A small, one
or two -
or two-question survey of citizen satisfaction with City services
will be administered annually to provide input for performance
measures included in the Annual Report;
§
The IPF calls for theThe
City’s financial performance and strategic priorities towill be updated in the second quarter
of each year. This
may result inIf
there have been substantial changes, then
changes to the CCP and LRFP will
be updated in Septemberin
September of that year;
§
Each November the
Refreshed budget estimates will
be refreshed and the forecast for the threefor
the subsequent years
will be updated ( with
an additional three
years
added); of budget forecasts will be tabled with Council in
November
§
Councillor-led ward budget consultations will occur eachin November; and
§
It is anticipated that tThe
annual budget will be approved eachin December.
2007
2008
In
2008:
In
2008 CCouncilouncil
will have an opportunity tobe
asked to review and modify , as necessary, this new revised
IPF based on the experience what
was learned from the first two years. There
will also be other activities related to the IPF taking place that year
including:
·
A full Citizen Satisfaction Survey, similar to
the one used in 2004;,
will
be administered
·
There
will be fFocused consultation with citizens on the CCP
contents;
·
The
An update to the City’s Official Plan; will
be updated
·
A review of the The Ddevelopment Ccharges Bby-law will be
reviewed(to be presented to Council in 2009),;
and
·
Activities
to The City will begin the refresh of the
Ottawa 20/20 will
beginplan;
2009In 2009, a new development charges by-law will be presented to Council for approval.2010In 2010:
· Development of new versions of the CCP and LRFP will begin.
The process will begin to repeat in 2010 with the election.
Challenges
There are a
number of key challenges associated
withto implementing these
changes:
any planning framework. A number of challenges particular to this framework have been
identified. For each, a strategy to try
to mitigate the challenge has been developed.
The key challenges identified are:
§
Short
timeframes involved:
There
is a short turnaround time between the date of thefrom
the election and the dates required forto
the approval of the CCP, LRFP, 2007
budget and the HR Pplan.
Staff is currently gathering dTo address this, data-gathering work has already
begun. Detailed
financial data is
now
being
gathered by staff to reduce
the risk associated with this short turnaround timeonce
Council decides on its priorities and goals.
§
Significant change
in process from the current process: Councillors will need to make term of
Council decisions in their first few months in office. To
address this, Aa
Council orientation has been planned, as earlier describ.
ed
O. One
of the objectives of that orientation
session will be
is to provide Council with appropriate information needed to
develop priorities and goals and to make these decisions.
§
Complex
interrelationship between planning documents: The
documents described in this framework are very much interrelated. To address
this, tIt is important that hethe
planning documents and the 2007 budget documents arewill be considered by Council in a
logical sequence so that increasing levels of detail can
be are added
logically.
added
§
HighThe volume
of data gathering,
required
for compilation
and analysis work is large:.
To address this, to the extent possible, tThe
data collection work has been front-loaded
for staff, to the greatest
extent possible,
to provide the maximum amount of time for the compilation and analysis.
so that the work can be stretched over longer
periods of time
§
Timing of the approval of the 2007 Budget: The
2007 budget will not be established until the end of the first quarter of 2007,
which may create complications for the tendering of some capital projects. Later this fall, tTo
address this, the he
City TreasurerDirector
of Finance will
consider the possibility of recommendingo Council in
late 2006
an advance the approval for the authority required for capital
budgets in respect of projects that must be
tendered in the first quarter of 2007.
CONSULTATION
In
March and April of 2006, members
of Council provided suggestions to staff on aspects of the planning framework
during discussions about this framework and performance reporting.
The
recommended process to implement Council’s planning framework has been based
upon directions provided by Council in earlier reports and best practice
research with other municipalities.
A
number of Councillors provided suggestions to staff on aspects of the planning
framework during discussions about this framework and performance reporting in
March and April of 2006. The
recommended framework has been based upon directions provided by Council in
earlier reports and best practice research with other municipalities.
FINANCIAL
IMPLICATIONS
This
report describes process changes.
Funding to carry out the activities described in
this report is already available within existing budgets.
Funding
to carry out the activities described in this report is available within
existing budgets.
SUPPORTING DOCUMENTATION
Annex A - Mock-up of City Corporate Plan agenda
DISPOSITION
Upon approval of the 4ecommendations in this report, appropriate Departments/Branches will proceed to develop plans and implement steps required to complete this process change.
ANNEX A
Mock-up of City Corporate Plan Agenda
TERM OF COUNCIL (2007-2010) PLANNING AND BUDGET
PROCESS AND TIMETABLE
MANDAT
DU CONSEIL (2007-2010) – ACTIVITÉS DE PLANIFICATION, PROCESSUS BUDGÉTAIRE ET
ÉCHÉANCIERS
ACS2006-CMR-OCM-0006
Councillor Hume asked staff if they
had considered dealing with the rate supported portion as a separate and
distinct section of the budget documents.
Greg Geddes, Chief Corporate Services Officer, advised the rate
supported side would be a separate section of the Long Range Financial Plan
(LRFP) document to be tabled in the fall.
However, the 2007 budget documents that will be tabled early in 2007,
will be in the traditional format (i.e. the rate supported side would not be
separated out).
Councillor Hume asked when he could
give direction to staff to break out the rate supported section in the budget
documents. Mr. Geddes said normally,
staff would take this type of direction when the budget directions document was
tabled. This year, however, the budget
directions aspect would be included in the LRFP process in the fall. Councillor Hume gave notice that he would be
soliciting support among his colleagues and bringing forward a direction to
separate the rate supported portion of the budget documents, at that time. Mr. Geddes advised that in the interim,
staff would review and advise Committee and Council as to whether or not this
would be possible to do in the final budget documents and, if it is possible,
whether it could be done for 2007.
Mayor Chiarelli noted the report
indicated (i.e. on page 14 of the agenda) the new Council would be setting its
priorities early in their term. He
asked if Council wanted to revisit its priorities during their four-year term,
if this would require waiver of the rules.
Rick O’Connor, City Solicitor, advised sufficient language should be
included in either the Procedure By-law or expressly set out in the priorities
document, to indicate Council’s wish (e.g. a simple majority would be required
to revise the priorities based on new information). Mayor Chiarelli asked that staff make note of this and that it be
brought to the attention of the new Council.
Mr. O’Connor confirmed this would be done.
Councillor Stavinga had questions
with respect to how the process would unfold.
She noted the goal is for Council to determine Citywide, area and ward
specific priorities in December (when the new Council is elected) and then
carry out public consultation, and she questioned whether this was
realistic. She asked for staff comment
on this.
Kent Kirkpatrick, City Manager,
stated the Councillor had hit on a core and critical piece of this
process. He noted the proposed process
was as a result of Council direction (i.e. when the Corporate Plan was approved
in 2005) to have more input at the preliminary stages of the setting of the
Corporate Plan. He explained that as
part of the week long orientation session for the new Council, it is
anticipated that two or three days would be dedicated to supporting the new
Council in setting its high level directions for its four year term. These high level objectives will then help
form the Corporate Plan and public consultation would be carried out prior to
Council approval of the Corporate Plan.
Mr. Kirkpatrick stressed the process was still being developed and staff
would be consulting further with the City of Calgary (the only other city in
Canada that utilizes a similar process) with respect to how they have been able
to make the process effective, given the limitations in terms of timing and
public consultation that the Councillor was concerned with. He indicated staff would be bringing forward
more definitive recommendations in terms of the process, in the fall.
Councillor Stavinga stated she was
pleased there would still be an opportunity to fine-tune the process but indicated
she wanted to highlight her concerns.
She noted originally, the Corporate Plan was to be based on a three-year
cycle but because the Province had mandated a four-year term of Council, it has
automatically changed to four years.
She said she did not know whether it was good or bad at this point in
time. As a final point, the Councillor
stressed that in terms of engaging the public it should not be presumed that
the election would be the sole source of identifying priorities.
Referencing the issue raised by
Mayor Chiarelli with respect to Council being able to revise its priorities
during its four year term, Councillor Cullen pointed out the report indicated
budget estimates would be refreshed each November and the three year forecast
updated and that there would be Councillor led budget consultations each
November. He stated there would be an
expectation from the public that there is purpose to these budget consultations
and if new priorities emerge they would be accommodated in the refreshed budget. He agreed there had to be a sensible means
of re-opening the discussion on priorities and indicated his agreement with the
requirement for a majority vote.
Councillor Cullen then drew the
Committee’s attention to the proposal for the new Council to establish its
priorities at a “workshop”. He noted
the former City of Ottawa held a budget workshop with restricted access and
this was challenged by one of Ottawa’s major media outlets because it was
deemed to be a Council meeting.
Councillor Cullen expressed his assumption that this workshop would be
treated as a Council meeting, as priorities can only be set by motion and
motions can only be approved in a formal meeting of Council.
Mr. O’Connor confirmed the
Councillor was correct and indicated the case referred to was a 1991 decision
of the Divisional Court of Ontario. He
went on to say staff are looking at this issue and discussing the degree of
involvement of the public and media.
Mr. Kirkpatrick added that although
Council must make decisions in public, Council could choose to receive
information and technical briefings in public, or not. He stated staff would be coming back with
all of the alternatives available for Council’s consideration.
Mayor Chiarelli stated this was a
very positive innovation that would give the new Council the opportunity to
come to an understanding of the direction in which it is moving. He stated as long as there is the
flexibility to allow adjustments along the way, it will be very useful for
Council, management and the public and he opined it was well worth
pursuing.
The Committee then approved the
staff recommendation.
That Corporate Services and Economic Development Committee recommend Council approve the 2007 budget process, related planning activities and timetables contained in this report.
CARRIED