BH.04.NOV0619.R10 - 2020 Draft Budget

Report to: Finance + Facilities Committee

Submitted by: Dr. Nicola Mercer, Medical Officer of Health and CEO

Subject: 2020 DRAFT BUDGET

RECOMMENDATION(S)

(a) That the Finance + Facilities Committee makes recommendation to the Board of Health to approve the 2020 Draft Budget, as presented.

(b) That the Finance + Facilities Committee receives the 2020 Draft Budget, as presented.

BACKGROUND & BUDGET STRUCTURE

Wellington-Dufferin-Guelph Public Health (WDGPH) receives ongoing funding from several sources: the Ministry of Health (MOH), the Ministry of Children, Community and Social Services (MCCSS), the City of Guelph, the County of Wellington, the County of Dufferin, and the Public Health Agency of Canada. Most of the MOH funded programs are cost-shared with the three obligated municipalities, and a small number are 100% provincially funded programs.

This document presents a consolidated budget for all MOH funded programs, including both those that are cost-shared with the three obligated municipalities and those that are funded 100% provincially. Appendices 1, 2 and 3 present these budgets, grouped as follows:

  • Appendix “1” - Cost-shared budgets: includes Cost-Shared Mandatory Programs and Cost-Shared Related Programs;
  • Appendix “2” - 100% MOH funded budgets: includes all pots of funding for specific programs and initiatives that receive 100% provincial funding; and
  • Appendix “3” - Consolidated budget.

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 components and report reference numbers
Sub-budget Report Reference Number Appendix
Cost-Shared Programs (Mandatory & Related (1) Appendix “1”
100% MOH Funded Budgets (2) Appendix “2”
Consolidated Budget (3) Appendix “3”

ASSUMPTIONS

The following assumptions have informed the 2020 budget:

  1. Status Quo Forecast
  2. Provincial funding increase of 0% for all cost-shared programs;
  3. Provincial reduction in funding of approximately $673k for most programs and initiatives that historically have been funded at 100% (from 100% to 70/30% Provincial/Municipal split);
  4. Municipal funding increase of 2%;
  5. Salaries increase of 2.0% for all management, union and non-union staff except MOH/CEO and AMOH; and
  6. Benefits:
    • Statutory – approximately 3% increases based on trajectory from past 3 years; and
    • Non-statutory – approximately 9% increases based on projections by Benefit Consultants (Mosey & Mosey) earlier in the Summer.
  7. Other Key Changes in 2020 Budget
  8. Employee Salaries and Wages – reduction to “one-time strategic investments” (FTE contracts) in 2020 compared to 2019;
  9. Employee Benefits – reduction due to a variety of FTE changes.  Changes noted in the bullet above;
  10. Investment in new ERP system (all-in-one – HR, finance, scheduling, inventory) to replace old legacy systems;
  11. Efficiencies found in various operational areas:
    • Building occupancy costs – continued utilities savings from newer lighting, HVAC controls and other more efficient monitoring equipment; and
    • Office supplies and photocopying.
  12. Additional IT security costs to minimize impacts of future cyber-attacks;
  13. Rent revenues (expenditure recoveries) generated by recently renovated and rented space in Orangeville office; and
  14. Elimination of “one-time strategic investments” (initiatives) from 2020 budget.
  15. COST-SHARED PROGRAMS

Funding for Cost-Shared Mandatory Programs is received as a global budget, which means that the Agency receives a lump sum amount of funding from the province, which is intended to fund program deliverables the Agency needs to meet the Ontario Public Health Standards. The allocation of these funds is determined by the Board of Health (BOH) based on Senior Management recommendations.

In 2020, the MOH transitioned a number of programs that historically received 100% funding - to the cost-shared envelope using a 70/30 funding split.  This change results in a net funding decrease of $673k for the 2020 year. The programs added to the cost-shared envelope in 2020 are shown at the bottom of the program list that follows.

Cost-Shared Programs:

  • Active Living
  • Community Based Immunization Outreach
  • Community Connections
  • Effective Public Health Practice
  • Emergency Management
  • Food Safety
  • Harm Reduction
  • Health Equity
  • Health Hazard Prevention & Management
  • Healthy Eating
  • Healthy Families
  • Healthy Pregnancies
  • Immunization Monitoring & Surveillance
  • Immunizations for Children in Schools & Licensed Child Care Settings
  • Infection Control
  • Infectious Diseases Prevention
  • Injury Prevention
  • Mental Health Promotion
  • Menu Labelling
  • Non-Publicly Funded Immunizations
  • On Call
  • Oral Health
  • Parenting
  • Population Health Assessment
  • Preconception Health
  • Rabies
  • School Health Promotion
  • Sexual Health
  • Speech & Language
  • Substance Use
  • Tuberculosis Prevention & Management
  • Vaccine Administration
  • Vaccine Management    
  • Vision Screening
  • Vector-Borne Diseases
  • Safe Water

New for 2020: Programs, Positions and Enhancements that previously received 100% MOH funding in 2019 but are now Cost-Shared (70/30)

  • Healthy Smiles Ontario
  • Smoke Free Ontario Strategy
  • Social Determinants of Health Nurses Initiative
  • Enhanced Food Safety
  • Enhanced Safe Water
  • Harm Reduction Program Enhancement
  • Needle Exchange Program Initiative;
  • Infection Prevention and Control Nurses Initiative
  • Chief Nursing Officer
  • Infectious Diseases Control Initiative

(2) 100% MOH FUNDED BUDGETS

The MOH also provides “pots” of 100% funding for specific positions, programs and enhancements to programs. The number of programs in this budget has been significantly reduced in 2020, from 13 initiatives in 2019, down to 2 initiatives in 2020. 

This funding is presented, in aggregate, in Appendix “2”, and includes the following:

  • MOH/AMOH Compensation Initiative; and
  • Ontario Seniors Dental Care Program.

(3) CONSOLIDATED BUDGET

The Consolidated budget shows the Cost-Shared Program Budget (Mandatory & Related) and 100% MOH Funded programs combined together.  This can be viewed in Appendix “3”.

WDGPH programs that are not included in this draft budget are:

  • Healthy Babies Healthy Children (HBHC) – funding provided by the MCCSS;
  • Preschool Speech and Language (PSL) – March 31st year-end – funding provided by MCCSS;
  • County of Wellington Special Needs Resourcing – funding provided by the County of Wellington; and
  • Other Community Grants – based on individual service contracts.

ANALYSIS/RATIONALE

Budget Objectives

The Senior Leadership Team’s (SLT) objectives for the 2020 budget are:

  • Alignment with organizational vision and strategy, updated Ontario Public Health Standards, and Accountability Framework;
  • Balanced budget;
  • Value for money;
  • Limiting the effects of the MOH’s funding decrease to our municipal partners; and
  • Reducing overall Agency liability in anticipation of amalgamation.

Budget Process

The following process was undertaken for the preparation of the 2020 budget:

To date:

  • Budget guidelines provided to management team;
  • Salaries and benefits costs for 2020 calculated by Finance with support from the Agency’s benefit provider;
  • Preparation of program operating budgets and operational plans by Program Managers;
  • Review of program operating budgets and operational plans by Directors;
  • Finance compilation of Divisional Budgets;
  • Finance meetings with each Director and their Managers to review budgets submitted;
  • SLT review of draft budget and preliminary discussion of one-time grant requests;
  • SLT meetings to determine how to address funding reduction of $673k; and
  • Preparation of report and presentation for Finance-Facilities Committee based on SLT approved draft.

To come:

  • Finance + Facilities Committee review and recommendation to BOH for approval;
  • BOH approval;
  • Finalize list of one-time grants;
  • Present final list of one-time grants to be submitted to BOH in February 2020;
  • Preparation of Annual Service Plan and Budget Submission;
  • Submit Annual Service Plan and Budget Submission (by February 28, 2020); and
  • Receive provincial funding approval from MOH later in 2020.

2020 Budget Information

One-Time Grants

One-time grants requests are currently being considered. Once determined, a final list of requests will be provided to the BOH ahead of the MOH submission deadline on February 28th.

Risk Analysis

As of the writing of this report, the areas of risk and opportunity for the BOH related to the 2020 budget are:

  • Further reductions in provincial funding; and
  • Further impacts from the Province’s Public Health Transformation/Amalgamation efforts.

APPENDICES

Appendix “1” – Cost-Shared Mandatory and Related Programs Budget (1)

Appendix “2” – 100% MOH Funded Programs Budget (2)

Appendix “3” – Consolidated Budget (3)

Appendix “4” – Budget Notes

 

Prepared by: Rob Cunnington, CPA CA, Manager, Finance

Reviewed by: David Kingma, Director of Administrative Services 

Approved by: Dr. Nicola Mercer, Medical Officer of Health & CEO

 

Appendix “1”

Cost-Shared Programs Budget (Mandatory and Related)

Wellington-Dufferin-Guelph Public Health 2020 Draft Budget

Fund category: all cost-shared programs

Fund: Multiple

Revenues

2020 Draft Budget
Revenue 2019 BOH Approved 2019 Revised based on Provincial Funding Approval 2020 Draft Increase (Decrease) $ Increase (Decrease) % Notes
Funding - Grant - MOH 14,781,500 14,781,500 14,108,150 (673,350) -4.56% Note 1
Funding - Grant - City of Guelph 3,9460353 3,946,353 4,025,278 78,925 2.0% Note 2
Funding - Grant - County of Wellington 2,724,105 2,724,105 2,778,587 54,482 2.0% Note 2
Funding - Grant - County of Dufferin 1,843,489 1,843,489 1,880,360 36,871 2.0% Note 2
Transfers from reserve 22,333 22,333 22,333 0 0.0%  
Total Funding 23,317,780 23,317,780 22,814,708 (503,072) -2.16%  
Interest Income - Interest revenue 27,000 27,000 27,000 0 0.0%  
Interest Income - Total Interest Income 27,000 27,000 27,000 0 0.0%  
Interest Income - Total Revenues 23,344,780 23,344,780 22,841,708 (503,072) -2.15%  

Expenses

Expenses
Expenses 2019 BOH Approved

2019 Revised based on Provincial Funding Approval

 2020 Draft Increase (Decrease) $ Increase (Decrease) % Notes
Employee Costs - Employee salaries & wages 13,801,135 13,801,138 13,203,521 (597,617) -4.33% Note 3
Employee Costs - Employee benefits 4,036,161 4,036,159 4,007,964 (28,194) -0.7% Note 4
Employee Costs - Total employee costs 17,837,296 17,837,297 17,211,486 (625,811) -3.51%  
Operating Costs - Travel 265,226 265,226 265,483 257 0.1%  
Operating Costs - Staff training 179,415 179,415 179,056 (359) -0.2%  
Operating Costs - Program supplies 665,867 665,866 663,101 (2,766) -0.42%  
Operating Costs - Professional & purchased services 826,890 826,890 848,275 21,385 2.59% Note 5
Operating Costs - Equipment and furniture 7,793 7,793 7,868 75 0.96%  
Operating Costs - Board of Health 38,500 38,500 34,650 (3,850) -10.0%  
Operating Costs - Building occupancy 2,259,894 2,259,894 2,218,715 (41,180) -1.82% Note 6
Operating Costs - Information & IT equipment 728,483 728,483 749,474 20,991 2.88% Note 7
Operating Costs - Telecommunications 149,050 149,050 162,882 13,832 9.28% Note 8
Operating Costs - Office expenses, printing, postage 179,217 179,217 159,193 (20,024) -11.17% Note 9
Operating Costs - Expenditure recoveries and offset revenue (363,712) (363,712) (393,048) (29,336) 8.07% Note 10
Operating Costs - Transfers to reserves 384,727 384,727 388,574 3,847 1.0%  
Operating Costs - One-time strategic investments - Operating 186,134 186,134 346,000 159,886 85.89% Note 11
Total Operating Costs 5,507,483 5,507,483 5,630,222 122,739 2.23%  
Total Expenses 23,344,779 23,344,780 22,841,708 (503,072) -2.15%  
Net Surplus (Deficit) 0 (0) (0) (0)    

Appendix “2” 100% MOH Funded Budget

Fund Category: 100% Related Programs

From: MOH/AMOH Compensation Initiative; Ontario Seniors Dental Care Program

Fund Category: 100% Related Programs, Cost-shared Related Programs, Mandatory Programs
  2019 BOH Approved 2019 Revised based on Provincial Funding Approval 2020 Draft Increase (Decrease) $ Increase (Decrease) %

Revenues

          
Funding          
Grant - MOH 83,505 735,330 1,007,218 271,888 36.97%
Total Funding 83,505 735,330 1,007,218 271,888 36.97%
Total Revenues 83,505 735,330 1,007,218 271,888 36.97%
Expenses          
Employee Costs          
Employee salaries & wages 72,051 305,588 435,310 129,723 42.45%
Employee benefits 11,454 83,545 120,545 37,000 44.29%
Total Employee Costs 83,505 389,133 555,855 166,723 42.84%
Operating Costs          
Travel 0 3,750 5,000 1,250 33.33%
Staff training 0 1,688 2,250 563 33.33%
Program supplies 0 115,760 144,113 28,353 24.49%
Professional & purchased services 0 198,000 264,000 66,000 33.33%
Building occupancy 0 7,500 10,000 2,500 33.33%
Office expenses, printing, postage 0 19,500 26,000 6,500 33.33%
Total Operating Costs 0 346,197 451,363 105,165 30.38%
Total Expenses 83,505 735,330 1,007,218 271,888 36.97%
Net Surplus (Deficit) 0 0 (0) (0)  

Appendix “3” Consolidated Budget

Fund Category: 100% Related Programs, Cost-shared Related Programs, Mandatory Programs

Fund: Al

Fund Category: 100% Related Programs, Cost-shared Related Programs, Mandatory Programs
  2019 BOH
Approved		 2019 Revised
based on
Provincial
Funding Approval		 2020 Draft Increase
(Decrease) $		 Increase
(Decrease)
%
Revenues          
Funding          
Grant - MOH 14,865,005 15,516,830 15,115,368 (401,462) -2.59%
Grant - City of Guelph 3,946,353 3,946,353 4,025,278 78,925 2.0%
Grant - County of Wellington 2,724,105 2,724,105 2,778,587 54,482 2.0%
Grant - County of Dufferin 1,843,489 1,843,489 1,880,360 36,871 2.0%
Transfers from reserve 22,333 22,333 22,333 0 0.0%
Total Funding 23,401,285 24,053,110 23,821,926 (231,184) -0.96%
Interest Income          
Interest revenue 27,000 27,000 27,000 0 0.0%
Total Interest Income 27,000 27,000 27,000 0 0.0%
Total Revenues 23,428,285 24,080,110 23,848,926 (231,184) -0.96%
Expenses          
Employee Costs          
Employee salaries & wages 13,873,186 14,106,726 13,638,831 (467,894) -3.32%
Employee benefits 4,047,615 4,119,704 4,128,510 8,806 0.21%
Total Employee Costs 17,920,801 18,226,429 17,767,341 (459,088) -2.52%
Operating Costs          
Travel 265,226 268,976 270,483 1,507 0.56%
Staff training 179,415 181,102 181,306 204 0.11%
Program supplies 665,867 781,626 807,213 25,587 3.27%
Professional & purchased services 826,890 1,024,890 1,112,275 87,385 8.53%
Equipment and furniture 7,793 7,793 7,868 75 0.96%
Board of Health 38,500 38,500 34,650 (3,850) -10.0%
Building occupancy 2,259,894 2,267,394 2,228,715 (38,680) -1.71%
Information & IT equipment 728,483 728,483 749,474 20,991 2.88%
Telecommunications 149,050 149,050 162,882 13,832 9.28%
Office expenses, printing, postage 179,217 198,717 185,193 (13,524) -6.81%
Expenditure recoveries and offset revenue (363,712) (363,712) (393,048) (29,336) 8.07%
Transfers to reserves 384,727 384,727 388,574 3,847 1.0%
One-time strategic investments - Operating 186,134 186,134 346,000 159,866 85.89%
Total Operating Costs 5,507,483 5,853,680 6,081,585 227,904 3.89%
Total Expenses 23,428,284 24,080,110 23,848,926 (231,184) -0.96%
Net Surplus (Deficit) 0 (0) (0) (0)  

 

Appendix “4”

Budget Notes

Notes for 2020 Draft Budget (Variances 2020 vs. 2019):                                                                                              

Note 1:  Provincial Funding - Reduction announced in 2019 Ontario Budget - 100% funded programs changing to 70/30% split (provincial/municipal)

Note 2:  Municipal Funding - request to each municipality for annual inflationary increases           

Note 3:  Employee Salaries and Wages - reduction to “one-time strategic investments” (FTE contracts) in 2020 compared to 2019

Note 4:  Employee Benefits - various FTE changes and a reduction in “one-time strategic investments” that have affected staffing levels

Note 5:  Professional and Purchased Services - 2020 CBA negotiations fees

Note 6:  Building Occupancy - reduction in building budgets for Guelph and Orangeville offices based on utilities cost-savings efficiencies

Note 7:  Information & IT Equipment - includes additional subscriptions required to improve IT cyber-security                    

Note 8:  Telecommunications – increased costs (est. 30%) for internet/website communications

Note 9:   Office Expenses -reductions office supplies budgets

Note 10:  Expenditure Recoveries and Offset Revenues - Orangeville rental revenue

Note 11:  Primarily due to implementation of new ERP system (delayed from 2019)

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