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HomeMy WebLinkAboutFinance & Corp - 2004-02-09 SFINANCE & CORPORATE SERVICES COMMITTEE MINUTES FEBRUARY 9~ 2004 CITY OF KITCHENER The Finance and Corporate Services Committee met in special session this date, commencing at 9:10 a.m. Present: Chair Councillor B. Vrbanovic Mayor C. Zehr Councillors C. Weylie, J. Smola, J. Gazzola and M. Galloway Councillor G. Lorentz (in attendance for part of the meeting) Others: FIN-04-009 J. Fielding, Chief Administrative Officer P. Houston, General Manager of Financial Services/City Treasurer C. Ladd, General Manager of Strategic Services G. Sosnoski, General Manager of Corporate Services/City Clerk G. Stewart, General Manager of Development & Technical Services F. Pizzuto, General Manager of Community Services M. Grummett, Director of Information Services & Technology R. Browning, Fire Chief K. Baulk, Director of Enterprises D. Quinn, Director of Utilities K. Currier, Director of Operations H. Gross, Director of Project Administration J. McBride, Director of Traffic & Parking D. Mansell, Deputy Director of Engineering Services L. Lynch, Manager of Engineering Rehabilitation D. Gilchrist, Committee Administrator 2004 CAPITAL BUDGET AND 10 YEAR CAPITAL 2013 FORECAST 2004- The purpose of this special meeting was to discuss the 2004 Capital Budget and 10 Year Capital Forecast 2004-2013. In this regard, the Committee was in receipt of Financial Services Department report FIN-04-009, dated February 3, 2004, attached to which was the following: a line-by-line listing of all projects in the Capital Forecast by division, changes to the Forecast recommended by the Administration, and, a list of Major Capital Projects in priority order and whether or not each has been included in the Capital Forecast. Ms. Houston introduced the report advising that the following assumptions have been made in the preparation of the Forecast: assessment growth of 1% for 2004, and 2% for 2005-2013; inflation of 2% each year from 2004-2013; and, debt to be carried for a 10 year term at 7%, being slightly higher than the current debt costs. Ms. Houston noted the City's Capital Policy; that the increase in debt charges must equal assessment growth, and, with respect to capital growth, the increase in debt charges plus the increase in capital from current, must be equal to inflation plus assessment growth. Further, the Capital Policy requires that the impact on the taxpayer each year must not exceed the rate of inflation in that year. As the assumed rate of inflation in this Forecast equals 2%, the effect of the proposed Capital Forecast on the average residential household will be $151.84. Ms. Houston then provided the Committee with the following: the impacts of provincial downloading on the capital program for the years 1998 and 2003; and, comparisons for 2001 of tax supported per capita debt for Ontario cities, and 2000 per capita debt comparisons for other Canadian cities. Ms. Houston advised that the 2004-2013 Capital Forecast has been based on the philosophy that there is a need to ensure sufficient funds are available to maintain the City's existing investments before funds are allocated for new buildings. This Capital Forecast includes the following percentage breakdown: 70% to maintenance of investments and 30% to new investments. Further, the focus has changed from a 1 year Capital Plan with a 10-year Capital Forecast, to a 10 Year Capital Investment Strategy. Ms. Houston then reviewed the sources for the pool of capital funds and provided details of the percentage contribution from each source. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES FEBRUARY 9, 2004 - 17 - CITY OF KITCHENER FIN-04-009 -2004 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST2004- 2013 (CONT'D) She advised that the specific projects to be funded by debt must be approved by Council before the debt is issued. With respect to Development Charges Projects for the period 2004-2013, Ms. Houston advised that the amounts for each year are difficult to project at this time, as the City must adopt a new Development Charges By-law by July 1, 2004, and the background work to establish the proposed new charges has not yet been completed. She noted the projections provided include those projects for which front-end financing will be provided by the developer. Councillor G. Lorentz entered the meeting at this time. Ms. Houston then reviewed the prioritization of Major Capital Projects, noting the following projects have not been included in the Forecast, and require separate funding: · Downtown Development Investment Package · Centre Block Development Options and Re-purchase, · Housing and Business Incentives, · Parking Infrastructure, · Employment Lands - Westside Development or Airport, · Downtown Wellness Centre · Victoria Park Strategic Plan and Streetscape / Victoria Park Improvements. Ms. Houston noted that the City Hall expansion and Breithaupt Centre expansion have been deleted from the prioritization. Upon questioning, Ms. Houston confirmed that the total value of the Capital Forecast is $206M, and the total value of capital projects requiring separate funding is $172M. With respect to removing the City Hall expansion from the prioritization, Ms. Houston advised it is anticipated that some staff will be moved to the new Central Maintenance Facility, once constructed, which will alleviate some of the immediate need to expand City Hall. Mayor Zehr directed that a copy of the schedule prepared for the current Development Charges By-law be circulated to members of Council as well as a list of downtown projects and employment lands. Ms. Houston then proceeded with a department by department review of the Capital Forecast, noting that any additions in one area will require one of the following: a reduction in another area of the Forecast, an increase in capital from current, an increase in debt, or the imposition of special levies. GENERAL EXPENSES With respect to project # 070101039 for the K-W Art Gallery, Mayor Zehr directed staff to provide a copy of the study previously considered by Council in this regard. Councillor Gazzola put forward a motion to reduce the amount for the Capital Project Costing Fund to $100,000. Mr. H. Gross advised the Committee that the initial amount of this fund was $360,000, and the current proposal is for half that amount. He advised this year's experience will provide a better idea as to whether this fund can be reduced in future years. It was noted by the Committee members that the purpose of this fund is to save the City money on Capital Projects. Councillor Gazzola revised his motion that the Capital Forecast be amended with respect to the Capital Project Costing Fund to include a budget allocation of $150,000 in 2004, and $100,000 in each subsequent year of the Forecast, which was voted on and lost. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES FEBRUARY 9, 2004 - 18 - CITY OF KITCHENER FIN-04-009 -2004 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST2004- 2013 (CONT'D) On Motion by Mayor C. Zehr it was resolved: "That the 2004 Capital Budget and 10 Year Capital Forecast 2004-2013 for General Expenses be approved as submitted, subject to receipt of the previously circulated report concerning the K-W Art Gallery Strategic Rejuvenation." CENTREIN THE SQUARE The Committee next considered the 2004 Capital Budget and 10 Year Capital Forecast 2004- 2013 for the Centre in the Square. On motion by Councillor M. Galloway - it was resolved: "That the 2004 Capital Budget and 10 year Capital Forecast 2004-2013 for the Centre in the Square be approved, as submitted." KITCHENER PUBLIC LIBRARY Ms. Houston noted the main library auditorium and chiller have been removed from the Capital Forecast pending a decision concerning a new main library. She also advised that the Forest Heights HVAC unit and WREPNET Fibre Project are new to the Capital Forecast. It was noted that the Fibre Project is actually an operating cost, but due to the costs, has been included in the Capital Forecast. On motion by Councillor M. Galloway - it was resolved: "That the 2004 Capital Budget and 10 year Capital Forecast 2004-2013 for the Kitchener Public Library be approved, as submitted." STRATEGIC SERVICES DEPARTMENT Mayor C. Zehr raised a question regarding the sharp increase in 2004 under the item of IT Software and 2007 under the item of WREPNET Fibre Project. Mr. Grummett advised that the software item is the completion of the Windows XP upgrade on the desktops and, the WREPNET increase in 2007 is the City's contribution to the upgrading of the existing fibre infrastructure. On motion by Councillor C. Weylie - it was resolved: "That the 2004 Capital Budget and 10 Year Capital Forecast 2004-2013 for the Strategic Services Department be approved, as submitted." FINANCIAL SERVICES DEPARTMENT The Committee then considered the proposed Financial Services Department Capital Forecast. Ms. Houston noted that except for the two-way radio equipment item, the budget is unchanged since last year. She explained the radio equipment requires upgrading and the account has been increased to achieve this, but has also been moved back from 2005 to 2006 as the first year for replacement. Mayor Zehr noted the substantial increase in replacement equipment in 2007. Ms. Houston explained the account is used to replace Fleet vehicles and currently, 2007 is scheduled for a larger than usual number of vehicles for replacement. She added that as the year draws closer, each individual vehicle will be reviewed and if possible those that can will be moved back to 2008 or longer. Further Ms. Houston noted that as a result of the equipment utilization review conducted in 2003, $300,000 has been deducted each year for the Capital Forecast for FINANCE & CORPORATE SERVICES COMMITTEE MINUTES FEBRUARY 9, 2004 - 19 - CITY OF KITCHENER FIN-04-009 -2004 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST2004- 2013 (CONT'D) this purpose. With the inception of a Central Maintenance Facility, equipment replacement costs may be further reduced. Councillor Gazzola raised a concern regarding the projected cost for the tax/utility system, noting that in previous years the amount forecasted was approximately $8M, whereas the current forecast is showing $13M. Ms. Houston advised that the capital item is consistent with previous Council direction, but changes have been made to ensure equipment upgrades are being made along with the software. M. Grummett advised that the server, as well as other equipment will require replacement for the new system. On motion by Councillor G. Lorentz - it was resolved: "That the 2004 Capital Budget and 10 Year Capital Forecast 2004-2013 for the Financial Services Department be approved, as submitted." CORPORATE SERVICES DEPARTMENT With respect to the Facilities Management Capital Forecast, the Committee was advised that they will be presented with a report prior to the end of the year on a Central Maintenance Facility. Concerning project #500201011 - Roof - General Provision, Mr. Sosnoski advised that funding for roofs on all City facilities has been accommodated in one account. The 2004 allocation provided funds to attend to all roofs which require repair/replacement at this time; further, roof repairs/replacement can then be anticipated and undertaken over the remainder of the Forecast. With respect to the quality of the upkeep of City owned facilities, Mayor Zehr directed staff to be more questioning as to the required renovations and quality of material. Mr. Fielding advised there has been a shift in the thinking of the management of the City's buildings and lands, so that high valued properties are maintained, and consideration given to divesting the City of Iow value properties with high costs. Mayor Zehr questioned the Budd Park Soccer Facility Maintenance, which Mr. Sosnoski advised is as recommended by the consultant who conducted the study of the facility on behalf of the City. Mr. Hergott advised the necessary maintenance for Budd Park includes roofing, electrical, mechanical, life safety systems, and asphalt replacement for the parking lot. Staff advised that in future, when leasing City property, requirements for the party leasing the building to undertake building maintenance at their cost will be included in the lease. Councillor Gazzola questioned the $6.5M allocation for building maintenance audits over the life of the Forecast, and staff was directed to provide details as to why this amount of money is required for this purpose, prior to Budget Day. Staff were also directed to provide the Committee with the details of the consultant study on Budd Park Soccer Facility, and a list of maintenance items that can be delayed. On motion by Councillor J. Smola - it was resolved: "That the 2004 Capital Budget and 10 Year Capital Forecast 2004-2013 for the Corporate Services Department be approved, as submitted, subject to receipt of the details of the auditors report on the Budd Park Soccer Facility, and details of project 500201014 - Building Audits." FINANCE & CORPORATE SERVICES COMMITTEE MINUTES FEBRUARY 9~ 2004 - 20 - CITY OF KITCHENER FIN-04-009 -2004 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST2004- 2013 (CONT'D) COMMUNITY SERVICES DEPARTMENT Councillor Lorentz questioned why the "New Community Arena/Twin Pads" is not included in the 10 Year Capital Forecast until 2008, noting that Council gave direction to staff in October 2003 to undertake a review and prepare an action plan in this regard. Ms. Houston responded that the 2008 placement for the arenas/twin ice pad is based on Council's prioritization of projects and the funding approved. Mr. Baulk advised that staff have been investigating the entire arena situation, and advised decommissioning will be a consideration. Further a Leisure Facilities Master Plan currently being prepared, which will balance the need for renovations, new facilities, and decommissioning. Mayor Zehr stated that a plan must be developed to determine the allocation of funds from the sale of City lands. Ms. Houston responded that unless otherwise stipulated, proceeds from the sale of City assets are deposited in an Asset Management Reserve Fund. Mr. Fielding advised that a review of all City assets is being conducted, and staff will recommend a strategy to Council in this regard. Councillor Lorentz disagreed with the inclusion of the Mill-Courltland Community Centre addition in 2012 of the Capital Forecast, and directed staff to bring this item forward to 2004 or 2005. He stated it is a simple addition to provide office space, and spoke of the importance of this addition in aiding community development. Councillor Gazzola spoke of the importance to the community of a community centre being built in the Kingsdale area. He questioned why it is not included in the Capital Forecast sooner than 2011. Ms. Houston noted that the Kingsdale Community Centre is scheduled to be constructed in conjunction with a new community arena in 2008, but will not be paid for until 2011. A discussion took place with respect to the method used to prioritize new community centres and additions to community centres. Mr. Pizzuto advised that those recommendations contained in the Community Centre Feasibility Study undertaken in 2000 have largely been implemented. The Leisure Facilities Master Plan will be presented in June of this year, and will provide information as to the current need for community centres. A discussion on prioritization can be undertaken by Council in this regard by October of this year. The Committee considered the Operations Division Facilities Management budget and staff were directed to recirculate their report on pumping station maintenance, originally circulated this past fall. Councillor Gazzola questioned the $300,000 allocation in 2004 for the Peter Hallman Ballyard, and staff was directed to provide details on this allocation. On motion by Councillor G. Lorentz - It was resolved: "That the 2004 Capital Budget and 10 Year Capital Forecast 2004-2013 for the Community Services Department be approved, as submitted, subject to the following: · Recirculation of the staff report on pumping station maintenance, and, · Details of the $300,000 expenditure for the Peter Hallman Ballyard." DEVELOPMENT AND TECHNICAL SERVICES DEPARTMENT With respect to the Fire Department Fleet costs, staff were directed to provide details of the allocations in the 10 Year Forecast for this purpose. Upon questioning, Messrs. Lynch and Mansell advised of the City's practices with respect to sidewalks on back lotted arterials, and with respect to installation of sidewalks on all City streets. The Committee was advised that the administration's philosophy is that sidewalks link FINANCE & CORPORATE SERVICES COMMITTEE MINUTES FEBRUARY 9, 2004 - 21 - CITY OF KITCHENER FIN-04-009 -2004 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST2004- 2013 (CONT'D) communities, and if the City has responsibility for all sidewalks, including those on Regional Roads, these links, as well as meeting barrier-free standards, can ensured. Councillor Lorentz put forward the view that the Region should be responsible for sidewalks on Regional Roads. Staff advised that the Region is willing to install only some of these sidewalks. Staff also advised that the Cities of Cambridge and Waterloo have similar policies in this regard. Councillor Lorentz suggested that the urban municipalities should discuss this matter, and determine the best way to approach the Region with respect to their installation of sidewalks on Regional Roads. The Committee then reviewed the storm drain and creek improvements portion of the Captial Forecast 2004-2013. Mayor C. Zehr declared a pecuniary interest in the "Stonegate Drive Slope Stabilization" as it is adjacent to his property, and did not participate in any discussion or voting with respect to this matter. When questioned, staff advised that the Stonegate Drive Slope Stabilization, is reviewed annually, and moved back from year to year in the Capital Forecast, as long as engineering staff are satisfied that the slope is still stable. In considering the Transportation Planning portion of the Capital Forecast, it was noted by Ms. Houston that funding for a new parking garage has not been included in the Forecast this year. A question was raised as to why traffic calming measures for Dunbar and Rushhome are the only traffic calming measures included in the Forecast. Mr. McBride advised that staff will bring forward a report to the Development and Technical Services Committee in April dealing with traffic calming measures. Councillor Weylie noted that traffic calming measures are needed at Dunbar and Rushhome in response to actions taken by the City of Waterloo. On motion by Councillor C. Weylie - it was resolved: "That the 2004 Capital Budget and 10 Year Capital Forecast 2004-2013 for the Development and Technical Services Department, save and except for 'Stonegate Drive Slope Stabilization' be approved, as submitted, subject to receipt of details on the Fire Department Fleet costs." On motion by Councillor C. Weylie - it was resolved: "That 'Stonegate Drive Slope Stabilization' costs of $260,000 included in the year 2005 of the 10 Year Capital Forecast 2004-2013, be approved, as submitted." Recorded Pecuniary Interest and Abstention: Mayor C. Zehr as the required slope stabilization is adjacent to his property. GAS UTILITY ENTERPRISE The Committee next considered the 2004 Capital Budget and 10 Year Capital Forecast 2004- 2013 for the Gas Utility Enterprise. When questioned, Mr. Quinn advised that with respect to the "NGV Refuelling Maintenance", staff are investigating a fast fill station which is portable, and could be moved to a new Central Maintenance Facility. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES FEBRUARY 9, 2004 - 22 - CITY OF KITCHENER FIN-04-009 -2004 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST2004- 2013 (CONT'D) On motion by Councillor M. Galloway - it was resolved: "That the 2004 Capital Budget and 10 Year Capital Forecast 2004-2013 for the Gas Utility Enterprise be approved as submitted." Ms. Houston reminded the Committee that they have already considered the Capital Budget for the Sewer and Water Enterprises, and Infrastructure Replacement. Councillor Vrbanovic thanked Ms. Houston and her staff for the excellent job done to date in preparation and presentation of the Budget. 2. ADJOURNMENT On motion, the meeting adjourned at 12:30 p.m. Dianne Gilchrist Committee Administrator