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HomeMy WebLinkAboutFCS Minutes - 2017-11-27 - 2018 Capital BudgetFINANCE & CORPORATE SERVICES COMMITTEEMINUTES NOVEMBER 27, 2017 CITY OF KITCHENER The Finance and Corporate Services Committee met this date commencing at 9:32 a.m. Present: Councillor S. Davey - Chair Mayor B. Vrbanovic and Councillors F. Etherington, Y. Fernandes, K. Galloway- Sealock, J. Gazzola, B. Ioannidis, Z. Janecki, S. Marsh, D. Schnider, and P. Singh. Staff: D. Chapman, Chief Administrative Officer M. May, Deputy CAO, Community Services M. Goldrup, Acting Deputy CAO, Finance & Corporate Services C. Fletcher, Interim Executive Director, Infrastructure Services J. Readman, Interim Executive Director, Infrastructure Services J. Miller, Executive Director, Office of the CAO C. Bluhm, Executive Director, Economic Development R. Hagey, Director, Financial Planning D. McGoldrick, Director, Operations Environmental Services D. Murray, Director, Technology Innovation & Service H. Gross, Director, Engineering Services D. Fagerdahl, Manager, Financial Planning L. Stewart, Interim Director, Facilities Management P. McCormick, Manager, Parking Enterprise S. Allen, Manager, Engineering Design & Approvals N. Gollan, Manager, Stormwater Utility D. Ritz, Supervisor, Design/Development J. Rodrigues, Committee Administrator D. Saunderson, Committee Administrator 1. FCS-17-189 - 2018 CAPITAL BUDGET The Committee considered Finance and Corporate Services Department report FCS-17-189, dated November 3, 2017, and attached line-by-line listing of all projects in the Capital Forecast by Department/Division. Councillor J. Gazzola brought forward a motion to vote on the various sections outlined in the Capital Budget Package, including the Capital Issue Papers. Councillor motion was then voted on and LOST on a recorded vote, with Councillors Y. Fernandes, J. Gazzola and Z. Janecki voting in favour; and, Mayor B. Vrbanovic and Councillors S. Marsh, D. Schnider, K. Galloway-Sealock, B. Ioannidis, F. Etherington and P. Singh voting in opposition. INTRODUCTION FROM THE CAO Mr. D. Chapman provided opening remarks, stating the objectives of Report FCS-17-189 are to summarize the 2018 Capital Budget Forecast; describe the new investment priorities for the 2018 Forecast; and, summarize significant changes from the 2017 Capital Forecast. He stated the Capital Forecast is balanced, both financially and in priorities, adding there are identified funding sources for all projects with high priority projects scheduled to be completed first. He indicated Capital Forecast improvements in the overall reserve balances. He further advised the budget is a balance between investments in core infrastructure and community amenities. OVERVIEW Mr. R. Hagey advised the 10-year Capital Forecast includes over 423 different projects, with a combined value of $1.1B and $92M in 2018. He noted the 10-year forecast is a best practice in that it enables Council to adopt a long-term view and make project commitments that are aligned witCouncil considers a one-year capital budget, along with a ten-year forecast which is adjusted annually. He indicated Council identified capital priorities through a number of processes, including but not limited to: the Strategic Plan; the Development Charges By-law; and, various master plans. He stated once the priorities are identified, staff proposes a budget that best addresses the priorities in light of limited resources. He indicated regardless of how priorities are identified, they are often referred to the budget process to determine the specific timing of projects. He further advised the budget process is therefore not intended to revisit the details of the priorities, FINANCE &CORPORATE SERVICES COMMITTEEMINUTES NOVEMBER 27, 2017 - 52 - CITY OF KITCHENER 1. FCS-17-189 - 2018 CAPITAL BUDGET but rather to consider how to best manage the capital program as a whole. Mr. Hagey stated for 2018 there are two notable projects that staff are aware of that are not yet included in the Capital Forecast; being the City Hall Outdoor Spaces, and Asset Management Plan Implementations. He indicated both projects have significant impact, but require more investigation to determine the approach, costs, timing, and potential funding sources. Councillor K. Galloway-Sealock requested clarification on the South District Park Arena, noting it was previously identified in the Capital Forecast and has now been removed. She questioned whether she could get an Issue Paper explaining the timing of that project. In response, Mr. M. May advised the construction of a Twin Pad is a major expenditure. He indicated the Leisure Facilities Master Plan and Development Charges By-law are due to be reviewed within the next two years, which would provide more accurate information on the timing of when a project of that scale could be funded. Councillor Galloway-Sealock expressed concerns that the project is being further delayed in the Capital Forecast when it has been identified and approved in the South District Master Plan. She stated it would be her preference to receive an Issue Paper outlining any information that can be provided this date on the timing of the project. In response to questions, Mr. J. Readman stated there are two phases within the Asset Management Program. He indicated staff have previously circulated an asset management . Councillor F. Etherington noted in relation to deteriorating city bridges and questioned whether anything was planned with regards to the railway bridge over Park Street, specifically whether it was inspected for safety as it has been hit a number of times by trucks exceeding the clearance height requirement. In response, Mr. Readman advised CN Railway conducts complete inspections on the bridge and makes necessary repairs when it has been damaged. He indicated he could follow up with Engineering staff to provide a status update on the condition of the bridge. Questions were raised regarding the timing of the City Hall Outdoor Spaces and whether 2019 was soon enough to address the required repairs. Mr. Readman advised there are a number of items that need to be addressed before staff can begin a detailed design plan. He indicated staff are bringing forward a report at the December 4, 2017 Standing Committee meeting to provide further information on that project. He further advised staff are vigilant on addressing any immediate repairs that are identified in the meantime. In response to questions, Ms. Fletcher advised the urban forest is an asset, noting staff would be bringing forward a Report on the sustainable urban forest in 2018. BOARDS Centre in the Square (CITS) Mr. Hagey provided an overview of the CITS budget, noting there are no major changes from the 2017 budget. He indicated a number of improvements have been made to the facility in 2017 which have been noted in the Budget package. Kitchener Public Library (KPL) Mr. Hagey provide an overview of the Kitchener Public Library (KPL), noting the budget is consistent with the 2017 budget with two additions: an automated sorter which will be at the end of its useful life in 2027; and, the Studio Central project that Council has already dealt with at a recent Council meeting. CAPITAL FUNDING SOURCES Mr. R. Hagey reviewed the funding sources for the 2018 Capital Forecast, advising there is a proposed total allocation of $1.1B, which is a decrease from 2017. He stated the Enterprise funding has decreased due to the change in funding identified through the Water Infrastructure Program (WIP) review. He further advised there was also a substantial change in Development FINANCE &CORPORATE SERVICES COMMITTEEMINUTES NOVEMBER 27, 2017 - 53 - CITY OF KITCHENER 1. FCS-17-189 - 2018 CAPITAL BUDGET Charges, due to the Strasburg Road project being removed from the Forecast in 2022, as Council recently approved a credit for refund agreement in 2017 for the installation of that road. DEVELOPMENT CHARGES (DC) Mr. Hagey presented an overview of the Development Charges (DC), noting the City undertook a review of the DC By-law in 2014. He stated the By-law has a maximum life of five years and is due to be updated by 2019. He indicated there were two financial objectives when previously updating DC By-law, which included ensuring cash flows were balanced and maximizing the charges. He noted those two objectives were fully achieved and have helped to establish clear Capital Project priorities. Mr. Hagey reminded the Committee there were concerns in 2015 as projected DC revenues were behind budget, which may have resulted in some projects being deferred if this trend continued. He indicated 2017 was a weaker year, and despite the projection for 2017, 2018 and 2019 the DC will return to a surplus position. He then provided a summary of Engineering projects and non-Engineering projects that were due to be funded in 2018 through DC. The Committee recessed at 11:06 a.m. and reconvened at 11:16 a.m., Chaired by Councillor S. Davey with all members present. DEBT Mr. Hagey provided an overview of the current outstanding debt, noting debt increased significantly up to 2013, followed by a steady decline beginning in 2014 as the Economic Development Investment Fund (EDIF) debt matures. He stated t $115M, will decrease to $71M at the end of 2018, and will be further reduced to approximately $30M over the next 10 years. He added that debt per household would be within the low range by 2023. RESERVE FUNDS Mr. Hagey provided an overview of the existing reserve funds and reserve fund policy. He explained the policy sets minimum targets for each reserve fund and that overall the reserve balances are below the minimum targets. He noted there are reserve fund ratings identifying the health of the reserve in comparison to the minimum targets. Mr. Hagey provided an overview of the various reserves and how they project in comparison to their minimum and maximum targets. He further advised reserve balances are fairly consistent from 2017, adding overall reserve balances are generally positive. He cautioned against relying on reserve funds to balance the budget. The Committee recessed at 12:01 p.m. and reconvened at 12:48 p.m., Chaired by Councillor S. Davey with all members present except Mayor B. Vrbanovic and Councillors S. Marsh, Z. Janecki, P. Singh, and K. Galloway-Sealock. CAPITAL BUDGET INFORMATION Mr. Hagey introduced the Capital Budget Information. He explained that changes over $50,000 will be highlighted in the PowerPoint presentation and noted Issue Papers have been prepared for any changes over $1M. Councillor Z. Janecki re-entered the meeting at this time. MAJOR CHANGES SINCE PRIOR YEAR & ISSUE PAPERS The Committee reviewed major changes from prior years as well as the Issue Papers put forward as part of the 2018 Capital Budget, with particular regard to the existing Capital balances. Mayor Vrbanovic, Councillors S. Marsh and P. Singh re-entered the meeting at this time. FINANCE &CORPORATE SERVICES COMMITTEEMINUTES NOVEMBER 27, 2017 - 54 - CITY OF KITCHENER 1. FCS-17-189 - 2018 CAPITAL BUDGET GENERAL EXPENSE The Committee considered the General Expenses Capital Forecast contained on page C-109 of the 2018 Capital Budget package. OFFICE OF THE CHIEF ADMINISTRATOR The Committee considered the Office of the Chief Administrator Department Capital Forecast contained on pages C-113 to C-118 of the 2018 Capital Budget package. FINANCE AND CORPORATE SERVICES The Committee considered the Finance and Corporate Services Department Capital Forecast contained on pages C-119 to C-122 of the 2018 Capital Budget package. COMMUNITY SERVICES The Committee considered the Community Services Department Capital Forecast contained on pages C-123 to C-134 of the 2018 Capital Budget package. Councillor K. Galloway-Sealock re-entered the meeting at this time. INFRASTRUCTURE SERVICES Mayor B. Vrbanovic declared a pecuniary interested with respect to the Engineering Capital perty in the vicinity of the subject project. Accordingly, he did not participate in any discussion or voting regarding this matter. Councillor P. Singh declared a pecuniary interest with respect to the projects outlined within Infrastructure Services, as referenced: Utilities - - Charles to Mill Engineering - Capital - Ottawa Street - ; -; and, Parking Innovation District Parking as members of his family own property in the vicinity of the subject projects. Accordingly, he did not participate in any discussion or voting regarding those matters. The Committee considered the Infrastructure Services Department Capital Forecast contained on pages C-136 to C-181 of the 2018 Capital Budget package. Mr. Hagey responded to a question regarding the Kiwanis Park General Provision. He agreed to provide a schedule for final budget day outlining the capital funding for the four city-wide parks. He advised he will also provide a schedule for operating funding if the budgets are segregated to allow him to do so. In response to a question regarding Issue Paper Cap-03 \[Replacing Roofs on City Facilities\], Ms. L. Stewart agreed to bring forward an Issue Paper to final budget day that provides information on the intended future plan for the Don McLaren Arena and whether there are options to reduce the roof repair planned for 2018. Responding to questions regarding the Condition Study for Roads and Sidewalks, Mr. Readman indicated the allocated increased funding will help to fulfill the legislated requirement to inspect every sidewalk on a certain frequency and for any needed repairs to deficiencies when sidewalks settle. He clarified this amount is also for road assessments and agreed to provide the length of sidewalk in kilometres that is repaired annually. Mr. Readman circulated this date additional slides 99a to 99d related to parking in the downtown and future parking predications. Mr. Readman provided a brief presentation on the additional slides, noting staff are reviewing various parking scenarios based on projected development withHe advised based on the Transportation Tomorrow Survey based on the 2006 and 2011 Census data, 89 percent of people travel downtown by automobile. He advised staff is conducting a parking study as part of the business plan to look at ways to maximize the parking usage downtown by shifting people to FINANCE &CORPORATE SERVICES COMMITTEEMINUTES NOVEMBER 27, 2017 - 55 - CITY OF KITCHENER 1. FCS-17-189 - 2018 CAPITAL BUDGET other modes of transportation and to look at possibilities to defer the need for an additional parking garage. He described the parking study zones and advised staff is determining the surplus and demand required for each of those zones. He presented three parking prediction models and advised staff believe the best case scenario would be to achieve a target of 60 travel to downtown. He stated a parking structure recommendation will come forward with a robust business case closer to 2022. Ms. D. McGoldrick responded to a question with regard to the Community Trails General Provision, advising existing capital dollars and the 2018 trail projects have been identified by staff. Ms. Fletcher clarified whether Council would prefer a list of planned new trails for installation or a list of existing trails and the prioritization process identified by staff. Staff agreed to provide Council with a list of trails planned for installation in 2018 funded from the Community Trails General Provision on final budget day. In response to a question, Ms. McGoldrick advised funds allocated to the Naturalization account are related to Naturalization Management Plans and the associated work to implement the plans. She indicated implementation work is identified in collaboration with neighbourhoods and funds are allocated in the budget accordingly. Mr. D. Ritz clarified the plan is for existing natural areas which outlines work that needs to be implemented for the proper management of those areas. He provided Council with examples such as encroachments and invasive species. Staff agreed to provide more information on the Naturalization account, specifically a list of projects planned for 2018 funded from the Naturalization account. RESOLUTION The Committee then undertook a review of the action items arising from this meeting. The following motion was voted on and Carried Unanimously on a recorded vote. On motion by Mayor B. Vrbanovic - it was resolved: That staff be directed to report and / or take appropriate action on the following matters arising from the November 27, 2017 Special Finance and Corporate Services Committee meeting relative to the 2018 Capital Budget, as outlined in the chart below: Division/Area Topic Action Provide an update on the timing of when South District Park SPORT DIVISION South District Park Arena will be included Arena in the 10-year capital forecast. Provide capital funding information about the 4 major parks (Victoria, Kiwanis, Capital funding - McLennan, Huron Natural Area), along Parks with operating if the budgets are OPERATIONS segregated. ENVIRONMENTAL Provide a list of trails planned for 2018 SERVICES Community Trails funded from Community Trails General General Provision Provision. Naturalization Provide list of projects planned for 2018 account funded from Naturalization account. Provide information about the future plan FACILITIES for Don McLaren Arena, and whether Don McLaren Arena MANAGEMENT there are options to reduce the roof repair planned. OPERATIONS Annual Sidewalk Provide information on the length of ROADS AND Repairs sidewalk that is repaired annually. TRAFFIC FINANCE &CORPORATE SERVICES COMMITTEEMINUTES NOVEMBER 27, 2017 - 56 - CITY OF KITCHENER 2. ADJOURNMENT On motion, this meeting adjourned at 2:59 p.m. J. Rodrigues D. Saunderson Committee Administrator Committee Administrator