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HomeMy WebLinkAboutFinance & Corp - 2004-01-05FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 5~ 2004 CITY OF KITCHENER The Finance and Corporate Services Committee met this date, chaired by Councillor B. Vrbanovic, commencing at 4:10 p.m. with the following members present: Mayor C. Zehr and Councillors J. Smola, G. Lorentz, J. Gazzola and C. Weylie. Officials Present: Ms. P. Houston, Ms. C. Ladd, Ms. R. Pi[field, Ms. S. Adams, Ms. E. Harris, Ms. J. Billett and Messrs. J. Fielding, G. Sosnoski, G. Stewart, R. Browning, K. Baulk and G. Borovilos. CSD-04-002 - AWARDING COMMISSION OF PUBLIC ART NEW KITCHENER MARKET The Committee was in receipt of Community Services Department report CSD-04-002, dated December 15, 2003 recommending the awarding of a commission of artwork for the new Kitchener Market. Ms. E. Harris, Arts & Culture Co-ordinator, attended to make a presentation respecting the commission of artwork and introduced renowned artist of the winning entry, Walter Gibson. Ms. Harris advised that the artwork will be located at the side patio or the Market on Eby Street and described the piece as a sculpted fountain made of Italian Byzantine and terrazzo glass in the shape of a Pea Pod. The Pod is designed to provide bench seating and will have a central fountain running over copper spheres that represent the peas. A miniature replica was displayed, as well as samples of the materials to be used. On motion by Councillor J. Smola - it was resolved: "That the adjudication of the appointed jury (comprised of Market Supervisor, Architect, Facilities Management staff, arts professionals, Council member and citizens) to award the commission of a piece of artwork for the new Kitchener Market to the proposal (Pea Pod Water Feature) by distinguished area artist Walter Gibson, be endorsed; and further, That the Mayor and City Clerk be authorized to sign an agreement, satisfactory to the City Solicitor, with Walter Gibson regarding the commission, conditions of delivery and acceptance or installation or his winning entry in the Your New Kitchener Market Competition, as set out in Community Services Department report CSD-04-002." 2. FIN-04-001 - CAPITAL FORECAST FUNDING OPTIONS 2004- 2013 The Committee was in receipt this date of Finance and Corporate Services Department report FIN-04-001 (formerly identified as report FIN-03-049 as listed on the January 5, 2004 Finance and Corporate Services Committee agenda), dated December 22, 2003, outlining the philosophy which has been applied to preparation or the 2004 - 2013 Capital Forecast; challenges that have been encountered; and prospective funding options for consideration. The Committee was also in receipt this date or a document entitled "2004 - 2013 Investment Approach to Financial Planning" and "Executive Summary". Councillor B. Vrbanovic advised that the staff report was prepared in response to his request to have a list or options that would assist in making decisions concerning capital investments during deliberation of the 2004 Capital budget. He commented on decline of municipal revenues as a result of downloading and the challenges that lay ahead in ensuring a competitive, healthy community. He stated that in his opinion, current investment strategies need to be revisited and encouraged a proactive investment approach be taken toward financial planning. Councillor J. Gazzola expressed strong disappointment at not having had an opportunity to review the staff report prior to the meeting this date. Councillor B. Vrbanovic advised that given the holiday season, timing constraints prevented staff from providing the report in advance. He emphasized that staff intend to present the report for tabling only and that no decisions would be made at this time respecting capital projects. Ms. P. Houston, General Manager of Financial Services and City Treasurer, attended to present an overview or the staff report and to review timelines for completion or the 2004 budget process. Ms. Houston provided background information concerning the City's current capital policy and the impact on the capital program as a result of Provincial downloading and FINANCE & CORPORATE SERVICES COMMI'I-FEE MINUTES JANUARY 5~ 2004 - 2 - CITY OF KITCHENER 2. FIN-04-001 - CAPITAL FORECAST FUNDING OPTIONS 2004- 2013 (CONT'D) increased reliance on flexible funding sources to maintain current service levels. It was noted that in comparison to other Ontario and Canadian cities, the City's per capita debt is relatively Iow with 2.67% of its operating revenues applied to debt payment while the provincial average is between 6 and 10%. Ms. Houston advised that the Capital Forecast has been divided into three main categories as follows: maintenance investment (existing infrastructure); new investments (new facilities and infrastructure); and economic development investments (provision of infrastructure necessary to encourage industry, business and employment opportunities). She stated that past practice of allocating 70% of capital funding toward maintenance investments and 30% toward new investments was applied to the 2004 - 2013 capital funding requests. The outcome demonstrates a shortfall of $17,166,000. for new projects and an overall budget shortfall of $10,856,000. Ms. Houston advised that economic development initiatives must be considered outside the existing capital policy and expanded on economic development options including the West Side Employment Lands, Downtown Redevelopment and Airport Employment Lands. She pointed out that the Region has assumed a leadership role with respect to the latter option and the City has not been invited to participate. Ms. Houston then outlined various capital funding options with increases in per capita debt ranging from $124. to $583. Ms. Houston advised that the next steps in the process will involve prioritization of new capital projects at the January 12, 2004 Finance and Corporate Services Committee meeting, as well as determination of funding option preferences. Direction received at the January 12 meeting will be used by staff to prepare the 2004 Capital budget and 10 Year Capital Forecast to be considered by the Committee on February 9, 2004. At that time, Ms. Houston advised that staff will also ask for direction respecting investment in employment lands. Councillor J. Gazzola referred to the City's long standing policy of living within its means and raised concerns that all funding options appear to involve some measure of increased debt. Mr. J. Fielding, Chief Administrative Officer, pointed out that in order to accommodate current capital projects a change in policy will be required; however, he stated that a change in policy will not go forward unless directed by Council. He advised that funding options have been provided in advance to assist in prioritization of capital projects at the January 12 meeting and staff will be asking for direction on how to proceed with the Capital Forecast at that time. In response to Councillor G. Lorentz, Ms. Houston advised that as part of an asset management program, staff are currently reviewing surplus lands and enterprise investments to determine those that are beneficial to retain and those which could be disposed of to generate additional revenues. However, she pointed out that a final report respecting asset management will not be completed in time for the 2004 budget deliberations. Councillor G. Lorentz expressed disappointment that the City has not been invited to participate in the Airport Employment Lands Development option. He suggested that development of employment lands should remain a municipal initiative. He also commented that while he supports investment in employment lands, such investments should be well thought out to avoid escalating costs similar to those experienced in developing the Huron Business Park. In response to Mayor C. Zehr, Ms. P. Houston advised that a combination of Provincial downloading, municipal growth and impending legislation that will require municipalities to evaluate and replace existing infrastructure, have all contributed to the City being in a position of having to consider a change in capital policy. Mr. J. Fielding added that tax increases have not kept pace with the rate of inflation which has also contributed to a steady decline in the City's revenue base. Mayor Zehr also commented on the Airport Employment Lands Development option, advising that as a result of discussions between the City, the Township of Woolwich and the Region, it became apparent that the Region should take a leadership role as the majority of costs relate to Regional services. Mr. J. Fielding advised that the City has exhausted its industrial lands and in order to ensure continued economic growth, a decision respecting employment land investment must be made. Mayor Zehr pointed out that such investments would also include brownfields redevelopment. In response to Councillor J. Smola, Ms. P. Houston agreed to provide an outline of individual reserve funds for the January 12 Finance and Corporate Services Committee meeting. Mayor C. Zehr expressed the opinion that if the City is to move forward, continuation of the current capital policy is not sustainable and therefore, the City must find alternative sources of FINANCE & CORPORATE SERVICES COMMI'I-FEE MINUTES JANUARY 5~ 2004 - 3 - CITY OF KITCHENER 2. FIN-04-001 - CAPITAL FORECAST FUNDING OPTIONS 2004- 2013 (CONT'D) revenue. He encouraged pursuit or alternative options that would have a reasonable impact to the tax levy and stressed that public dialogue would be important in differentiating between wants and needs. Councillor J. Gazzola spoke against increasing the City's debt capacity as it would result in a negative impact to annual property taxes and suggested that the City should continue its practice of living within its means. Councillor B. Vrbanovic commented that finding alternative sources of revenue is necessary if the City is to maintain stability of existing infrastructure and continue to provide services that will benefit the community. 3. ADJOURNMENT On motion, the meeting adjourned at 5:20 p.m. Janet Billett, AMCT Committee Administrator FINANCE & CORPORATE SERVICES COMMI'I-FEE MINUTES JANUARY 5~ 2004 - 4 - CITY OF KITCHENER