Fixed Cost Increases

The current Collective Agreement with CUPE Local 3784 expires on December 31, 2019. ERCA will be negotiating a new Collective Agreement with its employees and has identified pressures associated with benefit premiums that will need to be negotiated along with salary increases and other proposals. In addition, upward movement on the grid for eligible positions is estimated to be more than $130,000 in 2020. In 2019, ERCA did not fill vacant positions in Conservation Services and Corporate Services, which will remain unfilled in 2020. Other than those positions, ERCA also anticipates a full complement of program staff. ERCA must also fund fixed costs associated with leasing office space within the County of Essex Civic Centre, and costs for taxes, utilities and services at Conservation Areas. Because of ERCA's revenue structure, it is expected that only a portion of those increases will be levy-driven (ranging from 50%-70%), with the remainder absorbed in grant-funded special projects.

Corporate Recoveries

Special grants and third-party fee for service projects reduce the levy burden, as wages for permanent staff and corporate administration are often allowable expenses in the agreement or contract. When these revenues are reduced, a funding gap is created. High levels of special grants and fee for service contracts in recent years, have been a primary driver of the Authority's positive financial results.

FINANCIAL SUMMARY

• While the budget is represented as 'balanced', it was effected through a proposed levy increase of $148,000 and reallocation of CW~GS land securement funding of almost $69,000. The total operating deficit for 2020, before proposed levy increases and levy reallocations was ~$217,000, significantly lower than $315,000, as initially identified as the potential deficit in the 2020 budget pressures report. The $100k reduction was achieved through the addition of:
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• • expected 3rd party funding relating to the regional climate change collaborative;
• • continuation of the JRPH Community Museum Operating transfer payment; and
• • anticipated government grants related to Source Water Protection, DRCC and watershed research that will partially offset permanent staff and associated support and shared costs.

As recommended by the ERCA Finance and Audit Advisory Board (FAAB) and Administration, the increase in proposed levy is $148,000 from $3,238,667to $3,386,667. This is an increase of $0.49 per person, though the actual cost per household ($250,000) decreased by $0.12 to $19.57.

The proposed levy increase amount is primarily a result of the decrease in provincial transfer payments relating to the Flood Forecasting program ($98,000) and costs associated with human resources. However, no new FTEs are included in this budget and some staffing positions will remain unfilled due to consideration of municipal budgets and respective pressures.

The remaining projected operating deficit of ~$69,000 was addressed through a redirection of land securement funding as recommended by Administration and the FAAB. The CW-GS levy directed to land securement will be reduced from $589,600 to $420,780, inclusive of the $69,000 as noted above plus $50,000 will be directed to the insurance reserve (depleted due to wind storm damage deductibles) and $50,000 to the infrastructure reserve in anticipation of higher than expected HBCA workshop replacement costs.

Contributions and repayments to reserves will be $324,250 and transfers from reserves are estimated to be $803,500 for a projected net reduction of $479,250 in reserve funds. Transfers to reserves include: infrastructure ($250,000), replenishment of insurance reserve ($50,000) and multi-year pledge payments from ERCF ($14,250).