Finance Committee Report BH.04.SEP1516.R12
September 15, 2016
Report to: Finance Committee
Submitted by: Elizabeth Bowden, Interim Director of Administrative Services
Subject: 2017 DRAFT BUDGET
Recommendations
(a) That the Finance Committee makes recommendation to the Board of Health to receive the 2017 Draft Budget, as presented, for information.
Background
Wellington-Dufferin-Guelph Public Health (WDGPH) receives ongoing funding from several sources: the Ministry of Health and Long-Term Care, the Ministry of Children and Youth Services, the City of Guelph, the County of Wellington, the County of Dufferin, and the Public Health Agency of Canada. Some of the Ministry of Health and Long-Term Care funded programs are cost shared with the three obligated municipalities, and some of them are 100% Provincially funded programs.
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.
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) |
The largest portion of the budget is the Cost-Shared Mandatory Programs (1) budget. CostShared Mandatory programs include: Chronic Disease Prevention, Prevention of Injury and Substance Misuse, Reproductive Health, Child Health, Public Health Emergency Preparedness, Food Safety, Safe Water, Health Hazard Prevention and Management, Infectious Diseases Prevention and Control, Rabies Prevention and Control, Sexual Health, Sexually Transmitted Infections and Blood-borne Infections, Tuberculosis Prevention and Control, and Vaccine Preventable Diseases.
Cost-Shared Related programs are Vector Borne Diseases (2) and Small Drinking Water Systems (3). These programs are cost-shared between the provincial and municipal funders, but provincial funding is provided on an individual basis for each of these programs, as opposed to the Cost-Shared Mandatory (1) programs for which a lump sum of funding is received and the assignment of funds to run the various programs is at the discretion of the health unit.
The Cost-Shared Mandatory (1) (Appendix “3”) and Cost-Shared Related (2, 3) (Appendices “4” and “5”) programs budgets present the projected revenue for these programs from all sources for 2017 (provincial and municipal), and the corresponding expenditures. These budgets are key for the Board of Health, as their approval sets the funding levy for the three municipal partners for the year.
100% MOHLTC (4) funding is provided for: Needle Exchange Program, Enhanced Food Safety, Infection Control, Smoke Free Ontario, Electronic Cigarettes Act, Enhanced Safe Water, Chief Nursing Officer, Infection Control Nurses Initiative, Social Determinants of Health Nurses, Healthy Smiles Ontario, and MOH Compensation Initiative. Budgeted revenue and expenditures for the 2017 fiscal year have been provided for each of these programs/projects for information, with the exception of Health Smiles Ontario. Healthy Smiles Ontario revenue and expenditures have not been forecasted for 2017 as changes to the program structure in 2016 have not yet been reflected in an approved 2016 Healthy Smiles Ontario budget, so there is currently no basis on which to build projections for 2017.
WDGPH programs that are not included in this draft budget are:
- Healthy Babies Healthy Children (HBHC) – funding provided by MCYS.
- Preschool Speech and Language (PSL) – March 31st year-end – funding provided by MCYS.
- County of Wellington Wee-Talk – funding provided by the County of Wellington.
- Canadian Prenatal Nutrition Program (CPNP) – March 31st year-end – funding provided by the PHAC.
- Healthy Smiles Ontario (HSO) – program integration underway, no budget yet provided for 2016. Budget will be presented separately once more details have been provided by MOHLTC
- Other Community Grants – based on individual funding contracts. Community Grants for 2016 are:
-Poverty Elimination Task Force
-Children’s Report Card
-Nurturing Neighbourhoods
-My Health eSnapshot
-System of Care
On October 7, 2015, the Board of Health voted on a Cost-Shared Mandatory and Related programs budget for 2016 which featured a 0% provincial base budget increase and a 2% municipal base budget increase for the Cost-Shared Mandatory and Cost-Shared Related programs.
To date, WDGPH has not yet received the 2016 MOHLTC Provincial Funding Approval letter.
Analysis/Rationale
Budget Objectives
Management’s objectives for the 2017 Cost-Shared Mandatory programs budget are:
- Work within the most realistically expected scenario for provincial funding levels;
- Protect WDGPH’s ability to fulfill its legislated mandate by maintaining workforce numbers; and
- Align budgeted initiatives with the WDGPH 2016 to 2020 Strategic Directions.
Methodology
The following process was undertaken for the preparation of the 2017 budget.
- A budget training session was prepared and delivered to the management team by Finance;
- A 2017 Budget Instruction Manual was prepared by Finance and distributed to Management;
- Timelines and key dates were communicated via the training session, and the 2017 Budget Instruction Manual;
- Templates were sent to all budget managers to be completed and submitted to Finance;
- Finance analysed the budget submissions for each program and division, and met with the Division Director and Program Managers to review their submission;
- Preliminary One-Time Grant Request Proposals for 2017 were prepared by Managers, in consultation with their Division Director, and were submitted to Finance;
- All submissions were compiled and submitted to the Director’s Committee for review and discussion;
- The budgets presented in the attached documents reflect the results of this process.
Salaries:
- The Board of Health approved a salary increase for all staff of 1.0% for 2017, in December 2014.
- The impact of this increase was calculated for all permanent positions, and is reflected in the documents attached.
Benefits:
- Information was gathered, where available on changes to the expected cost for each type of benefit (statutory and other);
- Multi-year trends were analyzed in order to make reasonable assumptions where information for 2017 is not yet available (see Appendix “9” for assumptions).
Operating Costs:
- Each Program Manager reviewed their operating budget in detail and submitted a budget for 2017 program operating costs.
Building Occupancy:
- Building occupancy costs were reviewed in detail by the Manager of Operations to ensure that all projected costs for 2017 are captured in the 2017 draft budget.
2017 Major Cost Drivers
The following represent the major changes and cost drivers for the 2017 budget:
- Salary increase of 1.0% for all Agency staff, offset by staffing structure changes, for a net increase of 0.5%;
- A projected 23% increase to the cost of Extended Health benefits and a projected 12% increase to the cost of Dental benefits for staff, resulting in an overall projected increase of 2.6% to benefits costs for 2017 (full list of benefits and assumptions at Appendix 9);
- An increase to Software Licensing fees resulting in an increase to the Information Technology budget;
- Decrease of $199,000 from the Building Maintenance line as a result of two full years operating the new facilities in Guelph and Orangeville, and the fact that there has been a surplus in the building maintenance lines for each facility during that time. This has been balanced against the knowledge that winter temperatures were very mild for these two years and that hydro rates are currently projected to increase significantly. Based on this, these funds have been redirected for known one-time and “once-every” projects in 2017. The building maintenance budget will be reviewed again, in detail, prior to the 2018 budget process.
- Increase of $206,478 to the Professional and Purchased Services line consisting mainly of the funds from the building occupancy line which have been moved here in 2017 to fund the following one-time and “once every” costs: union negotiation costs, projects resulting from the recommendations of the IT Strategic Assessment, IT Security Assessment and the ERP Systems Assessment, implementation costs of any changes required as a result of the Patients First Strategy, and a projected increase to the organization’s insurance premiums.
Risk Analysis
These are the main critical risk areas faced by the Board for the 2017 budget:
- Provincial funding approval for 2016 has not yet been received;
- Ongoing zero percent increases from the provincial government for the Cost-Shared Budgets (1), (2), (3) and the 100% Funded MOHLTC Budgets;
- 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
Reviewed by: Elizabeth Bowden, Interim Director of Administrative Services
Approved by: Dr. Nicola Mercer, Medical Officer of Health & CEO