Loading...
HomeMy WebLinkAboutFinance & Corp - 2004-01-12 SFINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 12~ 2004 CITY OF KITCHENER The Finance and Corporate Services Committee met this date, commencing at 1:10 p.m. Present: Chair Councillor B. Vrbanovic Mayor C. Zehr Councillors J. Smola, J. Gazzola, M. Galloway, C. Weylie and G. Lorentz (in attendance for part or the meeting) Staff: J. Fielding, Chief Administrative Officer C. Ladd, General Manager of Strategic Services P. Houston, General Manager of Financial Services/City Treasurer G. Sosnoski, General Manager of Corporate Services/City Clerk F. Pizzuto, General Manager of Community Services G. Stewart, General Manager of Development and Technical Services R. Gosse, Committee Administrator The purpose of this special meeting of the Finance and Corporate Services Committee was to discuss and prioritize the Capital Projects in the 10 year Capital Forecast and to receive information on the Water and Sewer finances in preparation to setting the 2004 rates. 1, FIN-04-003 NEW MAJOR CAPITAL INVESTMENT PRIORITIZATION J. Fielding explained that members of the Committee and the General Managers will be using a system to rate the 28 listed Capital Projects in the 10 year Capital Forecast. The projects would be rated in context to the primary objectives developed last year by the Committee. Mr. Fielding reviewed the primary objectives being: to maintain our ageing base infrastructure and to extend our services to accommodate grow[h; to respond positively to community and neighbourhood needs; to enhance the prosperity, quality of life, and image of the City; to improve our revenue base and our return on municipal investment; and, to improve service delivery to our residences and businesses. He further explained that after rating the 28 capital projects the system will prioritize, in order, the projects and based on the available funding, will show which projects can and cannot be funded over the forecast period. Mr. Fielding advised that the Committee has received Financial Services Department report FIN-04-003 (P. Houston) dated January 7, 2004, which provides a listing of the major Capital projects, the primary objectives with sub-objectives, a cost and funding summary of the new capital investments and a list of funding options. J. Fielding advised that the cost of the Employment Lands project was extremely high and in all likelihood require alternative funding and/or partnerships. It was agreed to remove this project from the list for the purposes of the rating exercise. The Committee and General Managers then proceeded to enter their rings into the system which resulted in the prioritized list of projects with the available funding. Councillor G. Lorentz entered the meeting. It was shown that the current list of projects were under-funded by approximately $42M. General discussion took place on the various options open to the City with respect to the capital projects and various scenarios were presented regarding funding for the projects. Councillor J. Gazzola raised a concern regarding the lack of criteria for the projects making it difficult to determine any priority. He also suggested that the City should continue living within its means and advised that there have been no new ideas given to allow completion of all the projects other than issuing new debt. Councillor G. Lorentz suggested the need for public input with respect to the Capital Projects and advised until the public process is completed the Committee could not move forward with the Capital Budget. P. Houston explained that delaying the Capital Budget process in order to complete a public consultation process would be difficult due to the impact the Infrastructure Replacement Project will have on setting the water and sewer rates. Ms. Houston advised that the infrastructure project is to take place over the next 30 years and is critical to maintaining the infrastructure of the City. J. Fielding suggested that if the Committee committed to the Infrastructure Replacement Project then the budget review process could be delayed in order to complete the public consultation. He also suggested that the projects relating to the downtown redevelopment be FINANCE & CORPORATE SERVICES COMMI'I-FEE MINUTES JANUARY 12~ 2004 - 5 - CITY OF KITCHENER dealt with separately as a package and that staff investigate alternative funding for this project. It was pointed out that the Central Maintenance Facility project will have other implications and Mr. Fielding suggested it be removed from the list and that staff investigate further on ways to fund this project and report back to the Committee. Chair B. Vrbanovic summarized the discussion as follows: · staff will report on the 10 year Capital Forecast projects including funding save and except: the Downtown projects, the Employment Lands project, the City Hall Expansion project, and the Central Maintenance Facility project, all of which will be reported on separately. · staff will report on a public consultation process with respect to the proposed Capital projects · the Capital Budget process will be re-scheduled to allow for public consultation Mayor C. Zehr advised that it may be helpful to have an objective review of the Capital Budget and suggested retaining the City's auditors to conduct the review verifying the calculations being made. P. Houston responded that staff would obtain a quote and report back to the Committee. 2. OVERVIEW - 2004 WATER AND SEWER FINANCES P. Houston gave a PowerPoint presentation on the Water and Sewer Finances 2004. Ms. Houston pointed out that new Legislation requires the City to revise the financial accounting and funding for water and sewer insuring no cross subsidization between taxes and utility accounts. The presentation highlighted the state of the water and sewer infrastructures and the need to replace portions of the infrastructure to improve water quality, fire fighting capability and sewer reliability. Ms. Houston also pointed out that Bill 175, passed December 2001, requires a full cost recovery for water and sewer and replacement of systems, through the utility rates. To this end it will be recommended that a catch-up in rates take place, phased in over a period of 2 years. The Committee was shown a chart giving the water and sewer rates from 2002 and 2003 and the projected rates from 2004-2008. This chart also contained the monthly cost per typical household and the dollar and percentage increase that will be recommended. Councillor J. Gazzola questioned if the catch-up rate increases could be extended over a 3 or 5 year period. Ms. Houston responded that staff will look at these two scenarios and report back. Mayor C. Zehr requested that a chart comparing these rates to the rates of other communities within and outside of the Region be prepared and submitted to the Committee. Ms. Houston concluded the presentation advising a public open house will take place at the Kitchener Auditorium on January 27, 2004 in itself will have direct communication with major water and sewer users to advise them of the recommended rate plan. On motion, the meeting adjourned at 4:35 p.m. Randy Gosse Deputy City Clerk