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HomeMy WebLinkAbout2015-01-12 FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 12. 2015 CITY OF KITCHENER The Finance and Corporate Services Committee met this date commencing at 9:10 a.m. Present: Councillor S. Davey-Chair Mayor B. Vrbanovic and Councillors F. Etherington, Y. Fernandes, K. Galloway- Sealock, J. Gazzola, B. loannidis,Z. Janecki, D. Schnider, and P. Singh. Staff: J. Willmer, Chief Administrative Officer D. Chapman, Deputy CAO, Finance &Corporate Services M. May, Deputy CAO, Community Services D. Tyagi, Deputy CAO, Infrastructure Services R. Regier, Executive Director, Economic Development J. Miller, Executive Director, IT Training & Projects R. Hagey, Director, Financial Planning H. Gross, Director, Engineering M. Seiling, Director, Building A. Pinard, Director, Planning J. Witmer, Director, Operations C. Fletcher, Director, Facilities Management W. Malcolm, Director, Utilities J. Readman, Director, Transportation Services D. Murray, Director, Information Services&Technology G. Hummel, Manager, Park Planning/Development/Operations S. Nickel, Manager, IT Training & Projects D. Ritz, Supervisor, Design/Development C. Goodeve, Committee Administrator D. Livingstone, Committee Administrator D. Saunderson, Committee Administrator 1. FCS-15-002 -2015 CAPITAL BUDGET The Committee considered Finance and Corporate Services Department report FCS-15-002, dated December 15, 2014, and attached line-by-line listing of all projects in the Capital Forecast by Department / Division. In addition, the Committee was in receipt this date of additional materials summarizing Council's Top 12 Priorities from the Business Planning process, the proposed capital grant request from the Centre in the Square as well as an Issue Paper on the South District Master Park. GENERAL OVERVIEW Mr. D. Chapman provided opening remarks, stating the objectives of the report are to summarize the 2015 Capital Budget Forecast; describe the new investment priorities for the 2015 Capital Forecast; and, summarize significant changes from the 2015 Capital Forecast. He requested direction regarding the Final Budget Day agenda package, stating that the year- end budget actuals would not be available until February 17, 2015, but the agenda package is scheduled to be circulated on Friday, February 13, 2015. He questioned whether the Committee would like staff to hold off on printing the entire agenda until February 17, 2015, or receive it on February 13, 2015, with supplementary information to be circulated once it becomes available. Several members spoke in support of waiting until February 17, 2015 to receive the agenda package in its entirety. Accordingly, Mr. Chapman agreed to proceed on that date and to provide a memorandum summarizing the major changes from the Operating and Capital Budget agenda packages in comparison to the Final Budget Day agenda package. Mr. Chapman advised that Council identifies Capital priorities through a number of processes, noting examples such as the Strategic Plan and Development Charges Study. He stated those priorities are most often referred to the budget process to determine the specific timing. He indicated that the 10 year Capital Forecast includes 483 different projects, with a combined value of just over a $113 for 2015. Mr. Chapman further advised that the Capital Forecast is balanced, both financially and in priority. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 12. 2015 -10 - CITY OF KITCHENER 1. FCS-15-002 -2015 CAPITAL BUDGET(CONT'D) Mr. Chapman referenced the slide summarizing the 12 Top Priorities identified by Council and highlighted how they are addressed within the 2015 budget. He stated that the four items highlighted in orange regarding alternative traffic calming options, year-round management and maintenance of trails and walkways, developing pro-active forestry maintenance and, community garden programs, are already included in the 2015 Capital Budget. He indicated that the one item highlighted in blue regarding incentives for affordable housing in multi-unit buildings, requires further clarification by Council to define the scope of work to be able to determine the budget impact. Mr. Chapman further advised that the other seven priorities do not have a budget impact, as this work will be completed using existing resources. Coucillor K. Gal loway-Sealock entered the meeting at this time. In response to questions regarding Item 3 on the Top 12 Priority list relating to incentives for affordable housing in multi-unit buildings, Mr. M. May advised that there are two potential options that staff could explore regarding this Item and would require Council direction on which option staff should pursue. He stated that the first option would be a comprehensive review of the affordable housing policies within the City. He commented that a review of this nature would be extensive and complicated work that would need to be defendable at the Ontario Municipal Board, noting the review would require approximately $80,000. to $100,000. in Capital funding. He further advised that additional direction would also be required on which priority currently being undertaken by the Planning Division could be deferred to accommodate the request. Mr. May advised that the second option would be a review of other municipalities and the Region of Waterloo's current policies and practices on affordable housing, as well as challenges around this issue; indicating staff would then report back on the issue later this year. He stated as part of this option, staff could also invite the Region to make a presentation to Council on their affordable housing program. He further advised that staff have already given consideration to providing affordable housing alternatives through the newly adopted Official Plan and will be further enforced through the Comprehensive Review of the Zoning By-law(CROZBY)currently being undertaken. Upon request, Mr. May agreed to provide an Issue Paper for Final Budget Day summarizing the two options as noted regarding Affordable Housing Incentives and the associated resources for each alternative. Centre in the Square (CITS) Mr. Bruce Gordon and Ms. Sandra Bender, CITS, presented their proposed Capital Grant for 2015, noting that they were seeking an increase from their 2014 allocation of $252,000 to $510,000 for 2015. Mr. Gordon advised that the CITS is now 35 years old and there are ongoing maintenance items that need to be addressed. Ms. Bender advised that an increase in their proposed Capital Grant would allow them to leverage matching grant funding from the Culture Spaces Grant Program currently being offered by the Federal Government. She further advised that the Centre would be eligible for up to$1.2M in matching grant funding from Culture Spaces in 2015, and it is their goal to leverage as much Federal grant funding as possible. In addition, Ms. Bender advised that the CITS is currently undertaking a comprehensive review of their operational mandate and it has yet to be determined whether the Centre will continue to function as a not-for-profit culture arts space or whether it would shift into a commercially run arts space. In response to questions, Mr. Chapman advised that staff could prepare an issue paper on potentially combining the 2015 and 2016 CITS budget allocations, including the implications, into 2015 in order to leverage matching funding from the Cultural Spaces grant. Kitchener Public Library (KPL) Mr. D. Carli, Chair, KPL Board, and Ms. Sonia Lewis, CEO, KPL, were in attendance and responded to questions from the Committee. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 12. 2015 -11 - CITY OF KITCHENER 1. FCS-15-002 -2015 CAPITAL BUDGET(CONT'D) Councillor K. Galloway-Sealock questioned whether, as part of the KPL's presentation for the 2017 Capital Budget, that the Library investigate the costs for the Southwest branch as outlined in Issue Paper Cap 03 (Southwest Community Library) and potential partnerships for the new facility. CAPITAL FUNDING SOURCES Mr. R. Hagey reviewed the funding sources for the Capital Forecast, advising that the total funding in the 2015 Capital Forecast is nearly $970M, which is an increase of$30M over the 2014 Capital Forecast. He noted that the Capital Pool has increased by $9M, which can mainly be attributed to replacing aging infrastructure in the underground utilities. He stated that Development Charge funding has decreased by $18M, but is now more realistic and tied directly to the Development Charge update that occurred in 2014. He noted that the Capital Budget is balanced and members were encouraged to consider the impacts adjustments in the Capital Forecast may have on future budgets. Mr. Hagey presented an overview on Development Charges, noting that the City undertook a review of the Development Charges (DC) By-law in Spring of 2014. He noted that there were two financial objectives in the 2014 DC By-law Update, which included ensuring cash flows were balanced and maximizing the charges. He noted that those two objectives were fully achieved and it has helped to establish clear Capital Project priorities, which means that high priorities are fully funded in the 2015 budget and low priorities are only partially funded or are not funded at all in the 2015 budget. Mr. Hagey then provided a summary of Engineering projects and non-Engineering projects that were due to be funded in 2015 through DC. Upon request, Mr. H. Gross agreed report back on the timing of the three Strasburg Road projects (two sanitary and one road project, noted on pages Cap 40/41) and on the impact of delaying those projects. DEBT Mr. Hagey reviewed the City's overall debt in context of the 2015 Capital Budget and Forecast. He advised that trends of previous years remain with the total debt load peaking in 2013 and then decreasing as the Economic Development Investment Fund (EDIF) debt is retired. He stated that debt charges as a percentage of the tax levy are higher than the 5%-10% target and are anticipated to continue along that trend until 2020. He noted that there is a spike in debt charges in 2022 which relates to the Kitchener Memorial Auditorium expansion debt, which is completely paid by the Kitchener Rangers Hockey Club. After 10 years, this debt will require a payment from the Rangers, or be refinanced and continue to show as Enterprise debt on the City's books. He further advised with regard to debt per household, the target range of $400-$1000 is exceeded, but expected to come within range by 2015. Mr. Hagey stated that the current debt to reserve ratio exceeds the target range; however, as EDIF retires, the ratio is anticipated to come down to 1:1. In response to questions regarding potentially eliminating of tax supported debt, Mr. Chapman advised that a long-term financial planning item has been included as part of the 2015 Business Plan. He commented that if it is Council's wish to entertain a discussion on establishing a debt free policy it can be further considered through that process. The Committee recessed at 11:53 a.m. and reconvened at 12:47 p.m., Chaired by Councillor S. Davey with all members present except Councillor S. Marsh who was absent this date. RESERVE FUNDS Mr. Hagey highlighted the Reserve Fund Policy indicating that the policy includes such principles as only using reserve funds for their intended purpose and maintaining positive balances in all reserve funds. He reviewed the five categories as well as the status of each individual reserve fund and their respective targets. He stated that the total of all reserve funds are well below minimum targets and have been depleted leaving no opportunity to fund deficits from Reserves in 2015. He further advised that the debt to reserve ratios are also below target, but continue to see improvements in the upcoming years. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 12. 2015 -12 - CITY OF KITCHENER 1. FCS-15-002 -2015 CAPITAL BUDGET(CONT'D) In response to questions, Mr. Hagey agreed to provide a listing of capital closeouts and an updated Existing Capital Balances listing as of December 31, 2014 for Final Budget Day. Mr. Hagey responded to further questions regarding the benchmarks and targets for Capital Reserves and agreed to provide an Issue Paper for Final Budget Day on the impact of transferring between $1M and $1.5M from Tax Capital Reserve Fund to Tax Stabilization Reserve Fund. CAPITAL FORECAST INFORMATION Mr. Hagey provided an overview on how Capital Forecast information was compiled within the Budget Package. In addition, he provided specific detail on how Class estimates were indicated within the Forecast for non-general provision projects in excess of$1 M. MAJOR CHANGES SINCE PRIOR YEARS & ISSUE PAPERS The Committee then reviewed the major changes from prior years as well as the Issue Papers put forward as part of the 2015 Capital Budget, with particular regard to the existing capital balances. GENERAL EXPENSE/BOARDS Ms. S. Nickel responded to questions regarding Capital Budget allocations for the Amanda System Upgrade and the implementation of the Public Portal projects. She explained the timing of the Amanda System upgrade has been extended and requires funding in 2015 and 2016. She advised that the $187,000. allocation for the Public Portal project is part of the Corporate Service Strategy Phase 2 and will provide an opportunity for citizens to obtain permits online. OFFICE OF THE CHIEF ADMINISTRATOR Councillor J. Gazzola requested clarification on the interrelation of the Amanda System upgrade, the Public Portal project, and the Customer Relationship Management Software relative to the 2015 Capital Budget. Mr. D. Murray and Ms. J. Miller explained that there is a connection between the software in that these applications work to achieve the vision of the Corporate Customer Service Strategy by providing citizens with a seamless customer service experience. Several Councillors expressed support for this matter to be discussed at the Strategic Session on February 9, 2015, providing information on current and proposed software applications as well as potential efficiencies. Strategic Session topics are to include items such as: the Public Portal; Open Government; Customer Relationship Management (CRM); and, the Utility Billing System. In response to questions regarding the Capital Budget allocation for the Brownfield Program, Issue Paper Cap-05 (Brownfield), Mr. Chapman suggested that the matter could be addressed at the January 19, 2015 Finance and Corporate Services Committee meeting during the discussion on the Proposed 2015 Business Plan. Councillor D. Schnider requested an Issue Paper be provided to examine the impact of reducing the Council Home Technology budget from $63,000. in 2015. Councillor Galloway- Sealock suggested that the impact of reduction could be examined at $50,000.; $55,000, and, $60,000. FINANCE AND CORPORATE SERVICES The Committee considered the Finance and Corporate Services Department Capital Forecast contained on pages CAP-144 to CAP-148 of 2015 Capital Budget package. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 12. 2015 -13 - CITY OF KITCHENER 1. FCS-15-002 -2015 CAPITAL BUDGET(CONT'D) In response to questions, Mr. D. Murray provided an update on the WREPNet Fibre Project, advising that two additional locations, Activa Sportsplex and Sportsworld Arena, will be added to the fibre network in 2015. He explained that significant cost savings have been achieved by partnering with WREPNet which has provided favourable pricing for fibre. COMMUNITY SERVICES With regard to Enterprise Services Division Capital Forecasts for Doon Valley Golf Course and Rockway Golf Course, Councillor J. Gazzola requested that staff recirculate two operational reviews that were completed in 2012. Mr. M. May responded to questions regarding the Capital Forecast for Community Resource Centres. He stated that the prioritization of funding for the Mill Courtland and Doon Pioneer Park Community Centres were approved in the update of the Leisure Facilities Master Plan (LFMP) at the Council meeting of September 9, 2013. He agreed to recirculate the list of six indoor and six outdoor facilities that were prioritized in the LFMP. INFRASTRUCTURE SERVICES With regard to the Capital Budget allocation for 2017 maintenance at the Kitchener Market, Ms. C. Fletcher advised that the membrane at the Market which is used for an indoor/outdoor market area needs to be replaced at a cost of $600,000. Councillor Gazzola requested that staff provide an Issue Paper with information on the rationale for funding the membrane replacement through the Capital Pool rather than Parking Enterprise. A discussion took place regarding the 2015-2017 Capital Budget allocation of $1.9M for the acquisition of a Snow Dump Facility, as per Issue Paper Cap-08 (Snow Dump Facility). Several members indicated that further examination of potential sites and the costs associated with the facility should take place. In response to questions regarding snow removal on Regional Roads, Mr. J. Witmer agreed to provide an Issue Paper with information on the maintenance agreement with the Region of Waterloo relative to snow removal as well as the approach other municipalities take for hauling and disposing of snow. Councillor Galloway-Sealock referred to the Capital Budget allocation of $8.6M for the South District Park, Issue Paper Cap-10 (South District Park) and inquired if the park could open in 2017. Mr. D. Ritz advised that site preparation, grading and construction time may prevent opening prior to 2018. He indicated that the Capital Forecast places park amenities, such as a splash pad, at 2021 with funding from Development Charges. Councillor Galloway-Sealock requested an Issue Paper with information on advancing the opening of the South District Park to 2017 and the potential reallocation from funding sources that are currently budgeted for the South End Library in 2015, 2016 and 2017 to the South District Park as well as potential sponsorship opportunities. Mr. D. Ritz responded to questions regarding the redevelopment of Upper Canada District Park, Issue Paper Cap-09 (Upper Canada Park) with a budget allocation of $2.4M in the Capital Forecast. He advised that the redevelopment of the 17 hectare site involves reconfiguring the baseball diamonds to increase use by minor ball groups as the amount of hours booked at other locations throughout the City are substantially higher. Mayor B. Vrbanovic requested an Issue Paper detailing the current challenges in Upper Canada Park in comparison with the other parks and the current capacity of the baseball diamonds compared with other diamonds. He requested that the Issue Paper also contain a comparison of the need for baseball diamonds versus other recreational needs within City parks. In response to questions regarding the replacement water meters project, Mr. W. Malcom advised that the average life expectancy of a water meter is approximately 15 years. He stated that as a meter ages it slows down, which impacts the accuracy of how much water is being consumed. He added that the City lost an estimated 4%to 5% in revenues last year due to old meters. He indicated that the proposed project is a four year plan to address the backlog of 20,000 meters that are past their anticipated life expectancy. He noted that the revenue that would be recouped by replacing this aging infrastructure should pay for this FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 12. 2015 -14- CITY OF KITCHENER 1. FCS-15-002 -2015 CAPITAL BUDGET(CONT'D) project in approximately five years. Mr. Malcom agreed to provide additional information estimating the amount of lost revenue the City has incurred due to aging water meters. In response to questions regarding the City's accelerated infrastructure program, Mr. D. Tyagi confirmed that staff anticipate bringing forward a report outlining the current state of the City's infrastructure, which would include a plan for addressing the City's aging infrastructure in future years. Regarding the Huron Road Widening project, Councillor Galloway-Sealock requested that for the 2016 Capital Budget deliberations it be clarified that this project pertains to the section of Huron Road running from Fischer Hallman Road to Trussler Road. Mayor B. Vrbanovic noted that there were several projects outlined in the Capital Forecast associated with the extension of Highway 7, suggesting that it might be beneficial for an update to be provided at a future meeting as to the current status of that project. Mr. Gross agreed to provide further details on the Ottawa Street North (Highway 7 to Lackner Boulevard) project and explain why the City is paying anything for this project. Additionally, it was agreed that further information would also be provided regarding the timing of the bridge replacement. Questions were raised regarding the proposed $150,000. that would be expended in 2015 toward the RAIN Program. Mr. Gross advised that this Program assists residents as to determining an effective means of handling rainwater on their properties. He indicated that 2015 is the last year the City is anticipated to make this contribution and agreed to provide an update on the RAIN Program including the history of the Program. Concerning the Community Led Traffic Calming, Mr. J. Readman indicated that a formal report would be brought forward later this year on this initiative. He agreed to include information in that report as to the number of streets that are anticipated to be addressed through this program. On motion by Councillor B. loannidis- it was resolved: "That staff be directed to report and /or take appropriate action on the following matters arising from the January 12, 2015 special Finance and Corporate Services Committee meeting relative to the 2015 Operating Budget, as outlined in the chart below: Division Topic Action Final Budget Package Issue Final Budget Day package to Council by February 17, 2015. Include cover memo in the Final Budget Final Budget Package Day package outlining major changes from operating and capital budgets. FINANCIAL Provide listing of capital closeouts and an PLANNING Existing Capital updated Existing Capital Balances listing Balances as at December 31, 2014 for Final Budget Day. Provide information on the impact of Tax Stabilization transferring between $11M and $1.5M from Tax capital reserve to Tax stabilization reserve. Provide information on the two options for Council's affordable housing priority (high level comparison of what incentives are PLANNING Affordable Housing currently offered versus comprehensive review of municipal best practices) and the associated budget/workplan impact of each. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 12. 2015 -15- CITY OF KITCHENER Provide information about potentially CENTRE IN THE 2015 Capital Grant collapsing the 2015 and 2016 Centre in SQUARE (Cultural Spaces the Square (CITS) budget allocations into Grant) 2015 in order to leverage matching funding from the Cultural Spaces grant. KITCHENER Over the next two years, investigate the PUBLIC Proposed Southwest costing of the Southwest branch, LIBRARY Library Branch reviewing costing estimates and potential partnerships for 2017 Capital budget. Report back on the timing of the 3 Development Strasburg projects (two sanitary and one Charges road project noted on pages Cap 40/41) and on the impact of delaying the projects. ENGINEERING RAIN Program Provide an update of the RAIN program including the history of the program. Provide details on the Ottawa Street Ottawa Street North North (Highway 7 to Lackner Boulevard) (Hwy 7 to Lackner project and explain why the City is paying Boulevard) anything for this project. Also provide the timing of the bridge replacement. Provide information to Council during a Strategic Session on the City's current / proposed software applications (e.g. Public Portal, Open Government, INFORMATION Customer Relationship Management TECHNOLOGY Software Applications (CRM), Utility Billing System) and provide information about what these applications do, how they will benefit Council / Community, how they are all linked, and if there are potential cost savings / efficiencies. Provide information on the impact of MAYOR AND Home Technology reducing the Council home technology COUNCIL capital budget, including the history of budget and what it can be used for. ENTERPRISE Golf Recirculate two Golf operational review reports that were completed in 2012. COMMUNITY Provide Council the Leisure Facilities PROGRAMS& Community Centres Master Plan (LFMP) resolution passed in SERVICES September 2013 listing indoor and outdoor recreation priorities. Provide the rationale explaining why the FACILITIES Market Membrane Replacement is MANAGEMENT Kitchener Market funded fully from the Capital Pool and is not funded at all by the Parking enterprise. Provide information about the relationship with the Region around snow removal OPERATIONS Snow Removal including how other municipalities Facility manage snow removal. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 12. 2015 -16- CITY OF KITCHENER Provide information on the viability of moving forward the opening of the South District Park to 2017, and swapping the South District Park funding sources of the park and the library (Development Charges and Federal Gas Tax) as well as information OPERATIONS about possible sponsorship opportunities. (CONT'D) Provide information on the challenges with the Upper Canada District park comparing it to the other parks and District Parks include the current capacity of the City's baseball fields, as well as comparing ball diamond needs versus other recreational needs across the City. WATER UTILITY Water Meter Lost Provide an estimate of the lost revenue Revenues due to older water meters slowing down. 2. ADJOURNMENT On motion, this meeting adjourned at 5:32 p.m. C. Goodeve D. Livingstone D. Saunderson Committee Administrator Committee Administrator Committee Administrator