Loading...
HomeMy WebLinkAbout2016-11-28 - Capital Budget FINANCE AND CORPORATE SERVICES COMMITTEE NOVEMBER 28, 2016 CITY OF KITCHENER The Finance and Corporate Services Committee met this date commencing at 9:07 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: J. Willmer, Chief Administrative Officer D. Chapman, Deputy CAO, Finance & Corporate Services M. May, Deputy CAO, Community 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, Interim Executive Director, Economic Development R. Hagey, Director, Financial Planning D. McGoldrick, Director Operations, Environmental Services H. Gross, Director, Engineering Services M. Seiling, Director, Building J. Rehill, Fire Chief J. Edmonson, Interim Director, Utilities K. Carmichael, Manager, Transportation Planning D. Fagerdahl, Manager, Financial Planning S. Di Donato, Manager, Arts & Culture B. Cronkite, Project Manager, Transportation Planning D. Ritz, Supervisor, Design & Development B. Powell, Project Manager, Facility Asset C. Goodeve, Committee Administrator D. Saunderson, Committee Administrator T. Brubacher, Committee Administrator 1.FCS-16-168 - 2017 CAPITAL BUDGET The Committee considered Finance and Corporate Services Department report FCS-16-168, dated November 1, 2016, and attached line-by-line listing of all projects in the Capital Forecast by Department / Division. GENERAL OVERVIEW Mr. D. Chapman provided opening remarks, stating the objectives of Report FCS-16-168 are to summarize the 2017 Capital Budget Forecast; describe the new investment priorities for the 2017 Forecast; and, summarizes significant changes from the 2016 Capital Forecast. 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 noted highest priority has been given to projects required to meet legislation, next priority has been given to the delivery of core services, and last projects that address community priorities and enhance quality of life; such as, investing in parks and trails. Mr. Chapman advised the 10-year Capital Forecast includes 458 different projects, with a combined value of $1.2 billion, with $103 million in 2017. He indicated 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 highlighted priority areas with in the Capital Budget program, outlining investment in three areas, being: Asset Management, Community Improvements and Make it Kitchener. He added another area of focus is to further reduce the City’s debt levels in 2017. He noted a commitment to this approach has enabled the City to move from the Province’s “high” range of debt per household to now fall within the moderate range. Mr. Chapman further advised there are two notable projects that were not included in the 2017 Capital Budget, being are City Hall Outdoor Spaces and Asset Management Plan Implementations. He indicated both projects are significant, but require more analysis to determine the approach, costs, timing, and potential funding sources. FINANCE AND CORPORATE SERVICES COMMITTEE NOVEMBER 28, 2016 - 59 - CITY OF KITCHENER 1.FCS-16-168 - 2017 CAPITAL BUDGET (CONT’D) BOARDS Centre in the Square (CITS) The Committee considered Issue Paper Cap-01 (Centre in the Square (CITS) Asset Management Plan), which details the program of maintenance work and future funding responsibility between the City and CITS. Ms. Deb Daub, CITS, and Ms. B. Powell were in attendance and responded to questions from the Committee. Kitchener Public Library (KPL) The Committee considered Issue Papers Cap-02 (Update to Southwest Community Library Development) and Cap-03 (Timing of Growth related South End Recreation Facilities) related to the development of amenities in the South West end of the City including a new library, community centre, District Park, pool and indoor field and the Capital funds allocated to those amenities. Mr. Wayne Buchholtz. Chair, Kitchener Public Library Board, presented Issue Paper Cap-02 (Update to Southwest Community Library Development) related to the construction of the new library. He indicated the Library Board has now approved the recommended site of a co- located community centre / library in the Rosenburg Area. He provided an overview of the initial projections for the proposed library, noting they are still committed to developing a community library in partnership with the City and/or any other partners in the area. Ms. Mary Chevreau, Ms. Sabina Franzen and Ms. Penny Fielding, Kitchener Public Library (KPL), were in attendance to respond to questions from the Committee. In response to questions, Mr. Chapman agreed to recirculate information regarding the outstanding balances related to the expansion of the Central Library. Councillor Y. Fernandes requested clarification on the account related to maintenance and upgrades, noting on page C-213 there is a capital balance of $213,443 and a further allocation to that account in 2017 of $92,000. Ms. Franzen advised the funding in that account is intended for general maintenance and repairs for all of the library facilities. She indicated balances in the account accrue over time and assist with some larger capital purchases, such as the replacement of the library delivery vehicle. She further advised that at this time, all of the funds have been identified for future projects. Mr. Chapman clarified the balances outlined in the budget package are as of September 2016 and there may be additional expenses not recorded in those balances. Mr. Hagey noted the existing balances would be updated in the Final Budget package as of December 2016. Questions were raised as to whether any of the funding within the Libraries – General Provision account could be used to partner with the Doon Pioneer Park Community Centre (DPPCC) expansion; given the library and community centre share a common entrance space. Ms.Franzen advised that the KPL has not identified any funding to participate in the expansion, but has been an active participant in the planning process for the project. Councillor Y. Fernandes requested an Issue Paper be prepared for Final Budget Day regarding the existing balance for the KPL related to the Libraries – General Provision account and future funding use; as well as whether any of those funds could be applied toward the DPPCC expansion. Ms.Franzen expressed some concerns with the request, noting an Issue Paper of that nature would need to be considered by the Library Board. She added the Board’s next meeting is scheduled for the first week of December. Several members expressed concerns with the requested Issue Paper, noting the allocation of that funding is a responsibility of the Library Board; and, the request may infringe on the management of the Library. In addition, it was noted that the Library is not proposed to receive an enhancement through the expansion of the DPPCC. FINANCE AND CORPORATE SERVICES COMMITTEE NOVEMBER 28, 2016 - 60 - CITY OF KITCHENER 1.FCS-16-168 - 2017 CAPITAL BUDGET (CONT’D) Councillor S. Davey advised that in light of the concerns expressed regarding the Issue Paper requested by Councillor Fernandes, it should be dispensed with before moving on to the other items outlined in the Capital Budget package. Councillor Fernandes challenged the ruling of the Chair concerning whether a vote should be undertaken at this time on the requested Issue Paper. Councillor Davey put the following question to the Committee: “will the ruling of the Chair be sustained?” The ruling of the Chair was then voted on and was Sustained, on a recorded vote,with Mayor B. Vrbanovic and Councillors J. Gazzola, S. Marsh, D. Schnider, K. Galloway-Sealock, S. Davey, B. Ioannidis, F. Etherington and P. Singh voting in favour; and, Councillors Y. Fernandes and Z. Janecki voting in opposition. Councillor Fernandes’s request for an Issue Paper was then voted on and was 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, S. Davey, B. Ioannidis, F. Etherington and P. Singh and voting in opposition. CAPITAL FUNDING SOURCES Mr. R. Hagey reviewed the funding sources for the 2017 Capital Forecast, advising there is a proposed total allocation of $1.2B, which is an increase of $77M or 6.5% compared to the 2016 Capital Forecast. He stated the Capital Pool is relatively balanced in every year of the Capital Forecast, noting the capital funding and project requirements are in sync across the forecast. 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 that there were concerns in 2015 as projected DC revenues were behind budget, which could have resulted in some projects being deferred if this trend continued. He indicated 2016 was a stronger year, and the revenues improved and there is no longer a need to defer any projects on this basis. He then provided a summary of Engineering projects and non-Engineering projects that were due to be funded in 2017 through DC. The Committee recessed at 10:46 a.m. and reconvened at 10:53 a.m., Chaired by Councillor S. Davey with all members present except Councillors J. Gazzola and F. Etherington. DEBT Councillor F. Etherington re-entered the meeting at this time. Mr. Hagey provided an overview of the current outstanding debt and noted that debt is projected to decrease over the next ten years. He added that debt per household would be within the low range by 2023. Councillor J. Gazzola re-entered the meeting at this time. In response to questions from the Committee, Mr. Hagey explained that the spike in enterprise debt charges in 2022 is due to the end of the term of debt issued for the Kitchener Rangers expansion. He explained that it is fully recoverable from the Kitchener Rangers and has no impact on the tax levy. FINANCE AND CORPORATE SERVICES COMMITTEE NOVEMBER 28, 2016 - 61 - CITY OF KITCHENER 1.FCS-16-168 - 2017 CAPITAL BUDGET (CONT’D) RESERVE FUNDS Mr. Hagey provided an overview of the existing reserve funds and reserve fund policy. He explained that the policy sets minimum targets for each reserve fund and that overall the reserve balances are below the minimum targets. He advised against relying on reserve funds to balance the budget. Mr. Chapman responded to questions regarding the Workplace Safety and Inspection Board (WSIB) Reserve and explained that the projections for WSIB costs are based on historical averages and do not include the projected increases. He noted that the Issue Paper requested during the Operating Budget discussion on November 14, 2016 would address those increases. Mr. Hagey explained that the Economic Development Reserve (EDR) is slated to be used for the initiatives in Make it Kitchener; however, there is no ongoing funding for the Reserve. Committee members expressed concerns with funds being spent from the EDR without Council approval. Mr. Chapman noted that only seven of the projects have not been previously approved by Council and that some of the remaining projects are included for approval as part of the 2017 Budget. In response to a question, Mr. Chapman stated that the Music, Film and Interactive Media Industry Office has not been approved and that none of the money budgeted for it would be spent until a business case has been approved by Council. Responding to questions, Mr. C. Bluhm stated that the majority of the projects funded by the EDR are designed to support job development. He agreed to circulate information on EDR, outlining how it could be used for "place making" outside of the Downtown core and how it ties in with the Neighbourhood Strategy. Ms. S. Di Dinato responded to questions on the proposed Music, Film and Interactive Media Industry Office. She stated that staff are currently consulting with partners and will be presenting a detailed plan in the future. The Committee requested an Issue Paper for Final Budget Day that identifies the existing Economic Development programs that are designed to benefit suburban areas and the items listed in the EDR projection that are also designed to benefit suburban areas. The Committee recessed at 12:18 p.m. and reconvened at 1:20 p.m. Chaired by Councillor S. Davey with all members present except Mayor B. Vrbanovic Responding to questions, Mr. Hagey advised that there are specific types of projects and expenses that are eligible for Federal Gas Tax funding. He agreed to circulate the eligibility criteria to Council. CAPITAL BUDGET INFORMATION Mayor B. Vrbanovic re-entered the meeting at this time. Mr. Hagey introduced the Capital Budget Information. He explained that issues papers have been prepared for any changes over $1 million. 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 2017 Capital Budget, with particular regard to the existing Capital balances. Responding to questions related to Issue Paper Cap 06 (Brownfield Remediation Program), Mr. Willmer advised that the program results in new assessment growth and consequently pays for itself. He further noted that funds added to the budget are for specific new or pending projects. FINANCE AND CORPORATE SERVICES COMMITTEE NOVEMBER 28, 2016 - 62 - CITY OF KITCHENER 1.FCS-16-168 - 2017 CAPITAL BUDGET (CONT’D) The Committee requested additional information on the Brownfield Remediation Program including: the benefits and challenges of the program; examples of successful and unsuccessful past projects and how they contributed to the tax base; the rational for funding from the capital pool rather than EDR; and, recirculating any previous reports approving and explaining the program. Mr. Bluhm responded to questions regarding funding for the Christkindl Market. He agreed to provide information on how the decision was made to allocate funds for the replacement of the Christkindl huts. Responding to questions regarding the funding for Industrial Artifacts and Public Art Maintenance, Mr. Willmer advised it is earmarked for specific projects, which would need perpetual funding for ongoing maintenance. Staff agreed to work with the Public Art Working Group to investigate the possibility of prioritizing public art that needs less maintenance and provide Council with a report prior to the start of the 2018 Budget process. In response to a question from the Committee, Mr. M. May stated that the existing Neighbourhood Matching Grant program would be a good funding source for implementing Youth Forum ideas. He stated that staff would ensure that this program is communicated to the Youth Forum participants in the future. GENERAL EXPENSE The Committee considered the General Expenses Capital Forecast contained on page C-102 of the 2017 Capital Budget package. OFFICE OF THE CHIEF ADMINISTRATOR The Committee considered the Office of the Chief Administrator Department Capital Forecast contained on pages C-105 to C-111 of the 2017 Capital Budget package. The Committee recessed at 2:30 p.m. and reconvened at 2:35 p.m., Chaired by Councillor S. Davey with all members present. FINANCE AND CORPORATE SERVICES The Committee considered the Finance and Corporate Services Department Capital Forecast contained on pages C-112 to C-115 of the 2017 Capital Budget package. COMMUNITY SERVICES The Committee considered the Community Services Department Capital Forecast contained on pages C-116 to C-129 of the 2017 Capital Budget package. In response to questions, Mr. May agreed to recirculate the report regarding the replacement of the CLASS registration system currently in use by Community Services staff. Questions were raised regarding the Heritage Property Grant Program and whether there were sufficient funds allocated to that account. Mr. May agreed to provide the history of the Heritage Property Grant Program, including information of actual expenditures versus the budget allocation. INFRASTRUCTURE SERVICES Councillor P. Singh declared a pecuniary interest with respect to the Engineering - Capital Projects 5163-Ottawa Street – Charles to Expressway, Stirling/Mill to Russel, Fourth Avenue - Kingsway to Connaught Street, Second Avenue – Kingsway to Connaught Street, Connaught Street – Ninth to Traynor and Connaught Street – Third Ave to Fourth, 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. FINANCE AND CORPORATE SERVICES COMMITTEE NOVEMBER 28, 2016 - 63 - CITY OF KITCHENER 1.FCS-16-168 - 2017 CAPITAL BUDGET (CONT’D) The Committee considered the Infrastructure Services Department Capital Forecast contained on pages C-130 to C-180 of the 2017 Capital Budget package. In response to questions regarding how projects are prioritized for reconstruction, Mr. H. Gross agreed to recirculate information outlining the methodology of the Accelerated Infrastructure Replacement Program (AIRP) project prioritization process. Responding to questions regarding the possibility of deferring some of the stormwater network remediation and improvement projects, Mr. Gross indicated that the stormwater facility retrofits program is legislated and advised against a deferral as those are required works. He agreed to provide information identifying the Provincial Act that governs stormwater facility retrofits and the applicable timelines for compliance. Councillor P. Singh requested that additional information be provided to show the projections if the 2017-2019 costs for the Traffic Demand Management and Cycling Masterplan were fully funded through the Parking Enterprise as well as if only 50% of those costs were covered by the Enterprise. In response to questions regarding community led traffic calming, Mr. J. Readman advised that increasing the budget allocation for that item would be examined as part of the Neighbourhood Strategy. It was noted that a report is anticipate to be brought forward on the Neighbourhood Strategy during the first quarter of 2017. Questions were raised regarding the roundabout pedestrian crossing implementation project and Mr. K. Carmichael indicated that at this point the majority of that work relates to the installation of signs and markings; which would be accommodated within the proposed budget. He added that staff anticipates brining forward a report in 2017 to request that funding be provided for other pedestrian crossing locations which require additional infrastructure. In response to questions regarding the LED lighting conversion, Mr. B. Cronkite advised that phase one of the lighting conversion should be completed by the end of 2017. He added an information report is anticipated to be brought forward on this matter in the near future. He noted the original budget estimate for this project was $10M; however, the costs are now projected to be only $7M. Responding to questions, Ms. D. McGoldrick agreed to provide a list of Neighbourhood parks to be completed in 2017 related Neighbourhood Park Development and District Park Development funding. Questions were raised regarding Upper Canada Park, and Ms. McGoldrick advised that staff are undertaking some additional investigative work in terms of the sportsfield element, with information anticipated to be brought forward in the first quarter of 2017. She agreed to also include information on the proposed skatepark as part of the report on the sportsfield component. Councillor K. Galloway-Sealock inquired as to how funding could be set aside to allow for the completion of the Huron Natural Area Master Plan to enable the construction of the nature centre. Ms. C. Fletcher indicated that an item was included in the 2017 Business Plan on this matter; whereby an update would be provided outlining what has been accomplished to date and the work that is still needs to be undertaken. Councillor S. Marsh indicated that she intended to follow-up with staff regarding the previous priorities that remain outstanding in other uncompleted master plans. Mr. Willmer indicated that staff anticipates dedicating one of the 2017 Council Strategy Sessions to master plans, which should provide greater clarity on this issue. Questions were raised regarding Issue Paper Cap-11 \[Playground Accessibility (AODA) Improvements\] and if this work could be combined with projects being pursued through a neighbourhood matching grant. Ms. McGoldrick confirmed that any new playground element, which would include additions to existing structures, would be constructed to meet the FINANCE AND CORPORATE SERVICES COMMITTEE NOVEMBER 28, 2016 - 64 - CITY OF KITCHENER 1.FCS-16-168 - 2017 CAPITAL BUDGET (CONT’D) accessible design criteria. Mr. May indicated that neighbourhood matching grants are used towards relatively small projects that are being implemented quickly, such as the installation of a park bench. He noted consideration would be given to the accessibility standards based on a common sense approach depending on the scale of the project. Mayor Vrbanovic suggested that consideration be given to installing fencing around some playgrounds to enable them to be fully utilized by children with Autism who might be a flight risk. RESOLUTION The Committee then undertook a review of the action items arising from this meeting. On motion by Councillor Y. Fernandes- it was resolved: That staff be directed to report and / or take appropriate action on the following matters arising from the November 28, 2016 Special Finance and Corporate Services Committee meeting relative to the 2017 Capital Budget, as outlined in the chart below: Division/AreaTopicAction Provide an update on the $5M existing KITCHENER Capital Balances capital balance for the KPL Main Branch PUBLIC LIBRARY library. Provide information about how the Economic Development Reserve could be used for "place making" outside of the downtown core and how it ties in with the Neighbourhood Strategy. Reserves Provide an Issue Paper identifying the existing Economic Development staff and programs that benefit the suburbs. It ECONOMIC should also indicate what items listed in DEVELOPMENT the Economic Development Reserve projection benefit the suburbs. Provide information about the existing capital balance of $73,000. for Christkindl and the decision to use the funds to Christkindl Market celebrate the 20th anniversary of the market. (e.g. additional outdoor huts, signage etc.) Provide project and cost eligibility criteria Federal Gas Tax required to utilize Federal Gas Tax funding. Provide additional information on the Brownfield Remediation Program including: The benefits and challenges of the program including examples of FINANCIAL successful and unsuccessful past PLANNINGBrownfield projects and how they contributed to Remediation the tax base; Program The rational for funding from the capital pool rather than Economic Development Reserve Fund; and, Recirculate previous reports approving and explaining the program. FINANCE AND CORPORATE SERVICES COMMITTEE NOVEMBER 28, 2016 - 65 - CITY OF KITCHENER 1.FCS-16-168 - 2017 CAPITAL BUDGET (CONT’D) Recirculate the Arts & Culture policy and prepare a report, outside of the budget ARTS & Public Art process, about the selection of Public Art CULTURE Installation installations and prioritizing pieces that require less maintenance. Recirculate a copy of the report where Class Registration Council approved replacing the CLASS SPORT DIVISION Program system. Provide the history of Heritage Property Heritage Property Grant Program, including information of PLANNING Grant Program actual spent versus budget. AcceleratedRecirculate information outlining the Infrastructure methodology of how Accelerated ReplacementInfrastructure Replacement Program Program (AIRP) (AIRP) projects are prioritized. ENGINEERING Provide information identifying the Provincial Act(s) that govern stormwater Stormwater Utility facility retrofits and the applicable timelines for compliance. Provide additional information outlining projections for the Parking Enterprise if Alternative Cost the 2017-2019 costs for Traffic Demand PARKING Projections 2017-Management and Cycling Masterplan ENTERPRISE 2019were funded: a) 50% by Parking Enterprise b)100% by Parking Enterprise Provide a list of Neighbourhood parks to OPERATIONS – Neighbourhood be completed in 2017 related ENVIRONMENTAL ParksNeighbourhood Park Development and District Park Development funding. 2.ADJOURNMENT On motion, this meeting adjourned at 5:08 p.m. C. Goodeve T. Brubacher D. Saunderson Committee Administrator Committee Administrator Committee Administrator