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Budget glossary
Municipal budgets can be difficult to read and understand. The following phrases, definitions and examples will help you to navigate Guelph’s budget.
Phrases
| Term | Definition |
|---|---|
| 100 RE | 100 per cent renewable energy |
| Annualization Costs | The incremental costs of a new facility or position that was approved for less than 12 months in the prior budget year. |
| Appropriation | A sum of money to be used for a particular purpose |
| Assessment | The value assigned to a property by the Municipal Property Assessment Corporation (MPAC) used as a basis for property taxation. |
| Assessment growth | The amount of omitted and new assessments minus any tax or assessment appeals for a given year. These are changes made to the annual assessment roll after the roll has closed for a given year. |
| Base Budget | Covers services already approved in previous budgets, adjusted for inflation, wage increases, user fee increases. general revenue and financing (e.g. increased reserve transfers). |
| Brownfields | Properties that were originally developed for industrial and commercial uses and which are now underutilized, derelict or vacant. The soil and water may or may not be impacted by contaminants as result of past practices and uses. |
| Business Unit | An organizational unit with a specific strategic focus and the authority to expend corporate resources in order to deliver an internal or external service. |
| Capital Funding Strategy | Used to determine the amount of funding that will be allocated to the City reserve funds as well as the amount allocated to the various services to support infrastructure replacement, growth and city building. The strategy is based on asset management date and the corporate strategic plan. |
| Contingency | An allotted set of funds available to cover unforeseen events that occur during the fiscal year. These funds are not carried over year-to-year. |
| Consumer Price Index (CPI) | An indicator of changes in consumer prices experienced by Canadians. CPI is obtained by comparing, over time, the cost of a fixed basket of goods and services purchased by consumers. Since the basket contains goods and services of unchanging or equivalent quantity and quality, the index reflects only pure price change.As CPI is an indicator of changes for goods and services that can be associated with a retail price many public goods and services provided by governments are excluded since they cannot be associated with a retail price.The target population of the CPI consists of families and individuals living in urban and rural private households in Canada. |
| Debt Ratio | Indicates what proportion of debt a municipality has relative to the total of all reserves and reserve funds. The measure gives an idea of the potential risks the municipality faces in terms of its debt‐load. A generally accepted target ratio for municipalities is considered to be 1:1. In addition, the City’s Debt Management Policy calls for direct debt to be less than 55 per cent of operating revenue. |
| Debt Servicing | The payment of debt interest and principal over a given period of time.Provincial regulation does not allow the City to issue debt which would result in it exceeding its legislated Annual Repayment Limit (ARL) without approval from the Ontario Municipal Board (OMB). The 2014 ARL is based on the City’s 2012 Financial Information Return (FIR).Notwithstanding the limits prescribed in the regulations, the City has established its own Debt Management Policy as prudent financial management calls for more stringent criteria to limit debt and assist in preserving borrowing capacity for future capital assets while maintaining maximum flexibility for current operating funds. |
| Development Charges | Fees levied against new developments to pay for the initial capital costs of servicing growth.The principle behind development charges is that ‘growth pays for growth’ to ensure the financial burden of servicing new development is not placed on existing taxpayers. |
| Development Charge Debt | Any debt funded from development charges. |
| Efficiencies | The savings realized or additional revenue generated using existing resources. |
| Effectiveness | Refers to whether goal or objective is achieved. For example, garbage is picked up on time therefore the program is effective. |
| FTE (Full-time Equivalent) | A budgeted amount to represent permanent full and part‐time productive hours of work. City departments budget hours of work depending on program and service needs. |
| Grant | A monetary contribution—typically from one level of government to another—as a means to lend support to a specific service, program of function. The City of Guelph makes grants available to various local community organizations for special events and programs. |
| Growth | When additional costs are incurred in order to provide the same level of service to more citizens. |
| Internal Charges | Expenses allocated from one department to another.The Ontario Municipal Benchmarking Initiative (OMBI) method prescribes how costs for support areas such as Finance, Human Resources, and Information Technology should be allocated as a means of moving towards full cost accounting for the City’s services. Internal charges appear as expenditures for the departments in receipt of the service and are equal to the internal recoveries of the departments providing the support. |
| Internal Recoveries | Amounts recovered by one department from another. The City uses the Ontario Municipal Benchmarking Initiative (OMBI) method of allocating the full cost of support areas to service areas. Internal recoveries appear as revenue for the departments providing support and are equal to the internal charges to the departments receiving the service. |
| Levy | The percentage associated with property values to determine the taxes owing which fund City services. |
| Life Cycle Costing Practices | The long term financial analysis for the acquisition, renewal and replacement of assets over the asset’s useful life. |
| Long-term Debt | Matures more than one year after it is issued. |
| Non-tax-supported Budget | Self-supporting and does not require a property tax transfer. The City’s Water Services, Wastewater, Stormwater, Court Services (POA) and the Ontario Building Code (OBC) are represented in this budget. The costs associated with their respective service areas are 100 per cent recovered through user fees and other non-tax sources. Parking Services is being transitioned to a non-tax supported budget but currently receives a portion of property tax support. |
| OMBI Program Support | the OMBI’s method of allocating program support costs from one City function to another using a consistent set of cost drivers as a means of moving towards full cost accounting for the City’s services.OMBI fosters a culture of service excellence in municipal government by creating new ways to measure, share and compare performance statistics to help Councils, staff and citizens understand where their administrations are performing well and where they can make improvements. It is recommended that municipalities with a population greater than 100,000 use the OMBI support cost methodology. |
| Operating Impact from Capital | Identifies additional operating costs—including compensation—resulting from new or expanded assets such as a facilities, vehicles, trails or parks being put into service during the budget year. |
| Own Source Revenue | All revenues received, not including Federal and Provincial Grants |
| Payment-in-Lieu | Compensation from the Federal and/or Provincial governments in recognition of lost property tax revenue.Federally and provincially owned land are exempt from taxation, however, they often compensate the municipality with ‘payment-in-lieu of taxes.’ |
| Performance Measure | Data collected to determine how effective and/or efficient a program is in achieving its objectives. Specific service levels are established for all major services, and then monitored to determine the level of success achieved. |
| Reserve | Allocation of accumulated net revenue. Reserves don’t refer to any specific asset and don’t require the physical segregation of money or assets. Examples of the City’s Reserves are: Tax Rate Operating Contingency Reserve, Employee Future Benefit & Human Resource Related and Program Specific Reserves. |
| Reserve Funds | Assets segregated and restricted to meet the purpose of the reserve fund. Reserve Funds may be:Obligatory – created whenever a statute requires revenues for special purposes to be segregated, e.g., Development Charges Reserve Funds, orDiscretionary – created whenever Council wishes to earmark revenues to finance a future project for which it has authority to spend money, e.g Infrastructure Renewal Reserve Fund and City Building Reserve Fund. |
| Reserve Ratio | Recommended Reserve Ratio is 1:1; that means $1 in reserves for every $1 in debt. In addition, the City’s General Reserve and Reserve Fund Policy includes the following targets:Working and current-purpose reserves and reserve funds at least eight to 10 per cent of operating revenue.Infrastructure Renewal and Non-tax Capital Reserve Fund transfers should equal the Asset Management estimated average annual replacement cost.City funded reserve fund balances should be equivalent to one year worth of estimated capital spending. |
| Supplementary Revenue | Based on the supplementary and omitted assessments issued by MPAC for new properties or improvements to properties that were not assessed on the annual assessment roll. Omitted assessments can be issued as far back as the current year plus two years (residents can be assessed back as far as 2019 for their new properties). |
| Tax Levy | The total amount to be raised by property taxes for operating and debt service purposes specified in the annual Tax Levy By‐law. The City is also responsible for levying taxes for the Boards of Education and the Business Improvement Area. |
| Tax Rate | The rate levied on each real property according to assessed property value and property class. |
Abbreviations
| Abbreviation | Definition |
|---|---|
| AGCO | Alcohol and Gaming Commission of Ontario |
| AODA | Accessibility for Ontarians with Disabilities Act |
| ATU | Amalgamated Transit Union |
| BR | Budget Request |
| CACC | Province of Ontario Central Ambulance Communication Centre |
| CAD/AVL | Computer Aided Dispatch/Automatic Vehicle Location |
| CAO | Chief Administrative Officer |
| CARES | Community Assistance Registration Entry System |
| CCTV | Closed-Circuit Television |
| CFAI | Commission on Fire Accreditation International |
| CIP | Community Improvement Plan |
| CS | Corporate Services |
| ESA | Electrical Safety Authority |
| FADM | Facility Accessibility Design Manual |
| GFOA | Government Finance Officers Association |
| GGH | Guelph General Hospital |
| GIS | Geographic Information System |
| GJR | Guelph Junction Railway |
| GMHI | Guelph Municipal Holdings Inc. |
| GNSC | Guelph Neighbourhood Support Coalition |
| GPL | Guelph Public Library |
| GPS | Guelph Police Services |
| GRCA | Grand River Conservation Authority |
| HRIS | Human Resources Information Systems |
| IDE | Infrastructure, Development, and Enterprise Services |
| IR | Infrastructure Renewal |
| LIP | Local Immigration Partnership |
| LPAT | Local Planning Appeal Tribunal |
| MM | Maintenance Management |
| MOE | Ministry of the Environment |
| MRF | Material Recovery Facility |
| MTO | Ministry of Transportation |
| MYB | Multi-year Budget |
| NUME | Non-union Management Employee |
| OBC | Ontario Building Code |
| On-Point Sign Inventory | GIS software |
| OPA | Official Plan Amendment (used in context with the PBEE Service Area) |
| OPA | Ontario Power Authority |
| PDP | Performance Development Plan |
| PIL | Payment-in-Lieu |
| PM | Project Manager |
| PS | Public Services |
| RMO | Risk Management Official |
| SECC | South End Community Centre |
| U of G | University of Guelph |
| WERC | West End Recreation Centre |
| WRIC | Waste Resources Innovation Centre |
Guelph City Hall