Finance Committee Report BH.04.OCT1316.R14
October 13, 2016
Report to: Finance Committee
Submitted by: Elizabeth Bowden, Interim Director of Administrative Services
Subject: 2017 FINAL DRAFT BUDGET
Recommendations
(a) That the Finance Committee make recommendation to the Board of Health to receive the 2017 Final Draft Budget, as presented, for information.
(b) That the Finance Committee make recommendation to the Board of Health to approve the 2017 Final Draft Budget, as presented.
On September 15, 2016, the first draft of the 2017 budget was presented to the Finance Committee for review. That report provided background on the overall budget for the organization, the subset of the overall budget which was presented in the 2017 Draft Budget report, as well as an overview of the process and assumptions which went into the preparation of the budget.
This report covers the same sub-set of the overall budget as was presented in the September 15, 2016 - 2017 Draft Budget report: Cost-Shared Mandatory Programs, Cost-Shared Related Programs (Vector Borne Diseases and Small Drinking Water Systems) and the 100% Ministry of Health and Long-Term Care (MOHLTC) Funded Programs. The budget for Healthy Smiles Ontario (HSO) was not presented in the September 15, 2016 – 2017 Draft Budget report, and is presented in this report.
In 2016 and beyond, the HSO program is the newly integrated program which encompasses the former Children In Need of Treatment (CINOT) and CINOT Expansion programs. Before the 2016 provincial funding approval was received, there was insufficient information on which to base a budget for the HSO program for 2017 available, as the amount of funding to be provided for the newly integrated program in 2016 had not yet been determined. Part of the integration of the programs involved a change in the way fee for service payments are made to community dentists for providing services to children in the programs. Under the previous system, health units administered those payments; under the integrated program, a third party administrator fulfils this role, so, fee for services payments to dentists are no longer part of the WDGPH budget. In addition to this change, some of the work that was previously done under the CINOT program, which fell under the Cost-Shared Mandatory programs budget, is now done through the HSO program, which is a 100% MOHLTC funded program. As a result, a reduction was made to the Cost-Shared Mandatory programs funding, and an addition was made to the HSO program funding; there was no net change to the overall budget.
To reflect this, another column was added to Appendices 3 through 7, to this report, called “2016 Revised, based on Provincial Funding Approval” (these appendices were previously presented in the report BH.04.SEP1516.R16 - 2017 Draft Budget).
This document presents for consideration, a consolidated budget for all Ministry of Health and Long-Term Care funded programs, including both those cost-shared with the three municipal partners, and those funded 100% provincially. In addition to the consolidated budget, individual sub-budgets are presented for information and approval.
Each of the sub-budgets have been numbered, as follows, and these numbers will be used consistently throughout this report when referring to a sub-budget component:
| Sub-budget | Report Reference Number |
|---|---|
| Cost-Shared Mandatory Programs | (1) |
| Cost-Shared Related Vector Borne Diseases | (2) |
| Cost-Shared Related Small Drinking Water Systems | (3) |
| 100% Funded MOHLTC Budgets | (4) |
| Consolidated Budget | (5) |
Analysis/Rationale
The attached appendices provide detailed information about each of the sub-budgets, and the consolidated budget, with the highlights as follows:
- Assumption of a 0% provincial funding increase, with the exception of an increase of $10,000 for the Needle Exchange Program, and an increase of $191 for the MOH Compensation initiative which reimburses the Agency for the portion of the increased benefits cost which is related to the top up;
- 2% increase to the municipal levy for each of the three obligated municipalities;
- 1% increase to all staff and management salaries, with the exception of the MOH/CEO, as approved by the Board of Health in December 2014;
- An increase to benefits costs of 2.9%, due to increases to the cost of providing extended health and dental benefits;
- A temporary reduction in the Building Occupancy budget of 3.4%, based on the actual operating costs for the two new facilities in Guelph and Orangeville incurred to date, with the recognition that occupancy costs are expected to increase again in the medium term with ongoing increases to hydro rates and the renewal of leased premises;
- A temporary increase of 22.9% to the Information Technology line, borrowed for the 2017 fiscal year from the Building Occupancy line to support the implementation of the anticipated recommendations from the three IT assessments that are ongoing in 2016.
- Appendix “8” provides a preliminary list of 2017 proposed one-time grant requests. Over the coming months the projects on the list will be further explored and developed, and a final list will be provided to the Board of Health prior to the Program Based Grants (PBG) budget submission to the MOHLTC at the end of February, 2017.
Risk Analysis
These are the main critical risk areas that remain for the Board related to the 2017 budget:
- Ongoing zero percent increases from the provincial government for the Cost-Shared Budgets (1), (2), (3) and the 100% Funded MOHLTC Budgets (4);
- Potential for employee benefits costs increase in excess of projections (unknown until April 2017);
- Impact of Patients First Strategy, in particular, on resources of Health Analytics programs; and
- Potential for new additional provincial initiatives and/or changes to Accountability Agreements.
Appendices
Appendix “1” – WDGPH Funding Sources Overview
Appendix “2” – Notes to 2017 Consolidated Budget
Appendix “3” – Cost-Shared Mandatory Programs Budget
Appendix “4” – Cost-Shared Vector Borne Diseases Budget
Appendix “5” – Cost-Shared Small Drinking Water Systems Budget
Appendix “6” – 100% MOHLTC Funded Programs Budget
Appendix “7” – Consolidated Budget
Appendix “8” - 2017 Preliminary Proposed One-Time Grants
Appendix “9” – 2017 Budget Assumptions
Prepared by: Shanna O’Dwyer Manager, Finance, Administrative Services
Reviewed by: Elizabeth Bowden, Interim Director of Administrative Services
Approved by: Dr. Nicola Mercer, Medical Officer of Health & CEO
