Loading...
HomeMy WebLinkAboutFinance & Admin - 1993-11-17 SFAC\1993-11-17-SPE FINANCE AND ADMINISTRATION COMMITTEE MINUTES NOVEMBER 17, 1993 The Finance and Administration Committee met this date, commencing at 9:15 a.m., under the Chairmanship of Councillor C. Zehr with all members of Council present except Councillor C. Weylie. Others present: Messrs. T. McKay, J. Gazzola, L. Ryan, O. den Ouden, K. Bowman, F.S. Graham, E. Kovacs, R. Arnot, T. Clancy, G. Nixon, B. Liddle, S. Gyorffy, D. Suzuki, J. Hancock, W. Beck, R. Freeborn, T.B. Stanley and G. Sosnoski. The Committee met this date to consider the 1994 Capital Budget and the Ten Year Capital Forecast (1994-2003) as recommended by the Administrative Review. 1. 1994 CAPITAL BUDGET AND CAPITAL FORECAST (1994-2003) Mr. Gazzola reviewed expenditures by Department, noting that the Budget and Forecast incorporates amounts to pay off debt on the City's industrial lands by the year 1999. He noted that this projection is based on no land sales prior to that date. Mr. Gazzola reviewed funding by source and noted that since 1980 the percentage of funds paid through property taxes has declined from 45% to less than 40%. Mr. Gazzola gave an overview of the City's capital policy which limits tax increases to at or below the rate of inflation and has been in place for approximately 14 years. He advised that capital expenditures have been frozen in 1994 at 1993 levels. Mr. Gazzola provided an analysis of the target variance relative to the Capital Forecast. He reviewed the impact on the average household of capital projects constructed from 1980 to 1994, noting that the impact has steadily declined since 1991. Mr. Gazzola also pointed out that the City's per capita debt is $85.00 per person comparing this to the Federal debt which amounts to approximately $17,000.00 per person. He also reviewed the capital closeouts calculated to date and reviewed a list of projects in this regard. Mr. Gazzola provided an analysis of lot levy funding and noted that the actual closing balance is approximately $1,500,000.00 greater than the budgeted amount. Councillor J. Ziegler entered the meeting at this time. Mr. Gazzola reviewed the lot levy ranking for 1993 and the options for front end financing by developers. He also reviewed the community centre provision, noting a closing balance of $224,000.00 in 1993. Mr. Gazzola then outlined changes relative to the 1993 Capital Forecast. Mr. Gazzola noted that $11,000,000.00 has been budgeted over the next seven to eight years to fund the unfinanced portion of the Huron and Lancaster Business Parks. He noted that at the time of purchase he had obtained an OMB Order to allow debenturing and advised that the debt must be addressed due to depressed land sales. He pointed out that at present the lands are being financed by borrowing from numerous reserve funds with interest being charged. Councillor Galloway questioned whether debenturing would be an option and Mr. Gazzola replied in the affirmative but cautioned that this method would have an impact on the taxpayer. Mr. McKay suggested that debenturing would not be required as long as the lands retain their value and this value does not drop below the carrying costs. He offered the opinion that borrowing from reserves allows a greater amount of measure of flexibility than debenturing. Councillor Zehr noted that this unfinanced liability has been noted in the Auditor's report and Mr. McKay responded that he has spoken with the Auditor who has indicated this is not a critical issue. Councillor Ziegler questioned why staff are concerned over financing of the debt on the basis that the municipality is borrowing from itself. Mr. Gazzola suggested that this could be a problem if and when the money borrowed from reserve funds is required. Councillor Ziegler referred to the $1,800,000.00 amount in the Transit budget allocated to Automatic Vehicle Location. He pointed out that this is a new project in the Forecast for 1997/98 and asked that the possible removal of this item be discussed. 1. 1994 CAPITAL BUDGET AND CAPITAL FORECAST (1994-2003) (cont.) FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 104 -NOVEMBER 17, 1993 Councillor Yantzi noted that the NVG Refuelling Station had been removed entirely from the Capital Forecast and asked for an explanation. Mr. Kovacs replied that the item was removed pending a further study, and noted that the provision was premature and relates to converting City buses to natural gas. Mr. Gazzola advised that at present the Capital Budget is in a balanced position and any additions should be offset by corresponding reductions. Mr. Gazzola then reviewed the 1994 Capital Budget and Ten Year Capital Forecast for all Divisions of the Parks and Recreation Department. Mayor D.V. Cardillo entered the meeting at this time. In response to a question concerning a reduction in the Forecast for the Aquatics Program, Mr. Graham noted that the Department does not attempt to spend up to the approved limit unless the expenditure is necessary and the Forecast is adjusted downward to reflect any surplus. Councillor B. Stortz entered the meeting at this time. A discussion took place concerning the $50,000.00 amount allocated to the Farmers' Market budget in 1994 for renovations required pursuant to the Fire Code. Mr. McKay explained that in response to a complaint from a small food vendor, the Fire Department had inspected the premises and found that work to the exhaust system is required. This will result in the entire food section being located on a single floor. Mayor Cardillo questioned whether the vendors were made aware of the proposed change, and Mr. Graham replied that he believed they were, and reminded Council that small food vending is not the principle purpose of the Market. Mr. Gazzola pointed out that the merchants would pay 100% of the cost and Councillor Zehr asked whether the Fire Department report referred to cost sharing. Councillor Lorentz replied that it had not and made reference to a report from the Director of Business Facilities indicating that the cost of renovations would be $100,000.00 if the small food vendors continued to be located on two floors and half that amount if they were consolidated on one. Mr. Arnot noted that the City plans to recoup the cost on rental of concession stands with recovery taking place over a number of years. Councillor Yantzi suggested that concentrating this activity on one floor has several advantages and Councillor Leadston suggested this might pose a problem unless all small food vendors were located downstairs. Councillor Zehr asked that Mr. Graham bring this item forward for discussion at a future meeting. A discussion took place concerning seat replacement at the Kitchener Memorial Auditorium. Mr. Ryan noted that this project occurs in the Capital Forecast in 1999 and has the same position as approved in 1993. Councillor Lorentz questioned whether the City could afford to wait that long in view of construction of the new facility in Waterloo. Councillor Leadston questioned whether the Kitchener Rangers had been approached concerning the concept of cost sharing. Mr. Graham replied in the negative indicating he was hesitant to pursue this option based on the belief that the City should own all facets of a recreation facility. Councillor Leadston asked that this option be discussed informally. Councillor Stortz suggested that the cost of replacement could be defrayed through a seat sponsorship program. Councillor Wagner referred to National and Provincial events which the City would bid on and asked whether it was possible bids and subsequent revenue would be lost as a result of not replacing the seats as soon as possible. Councillor Stortz questioned whether the replacement was feasible prior to 1999 and asked that the possibility of a ticket surcharge be investigated. Mr. Graham reminded Council that a surcharge is already in place which has accumulated a small surplus. He also cautioned that the facility could lose between 300 and 400 seats based on the installation of new, larger units. He added that staff are considering the option of constructing custom seats which would allow the use of existing hardware. Councillor Zehr asked that this item be noted by Finance staff for further discussion later this date. 1. 1994 CAPITAL BUDGET AND CAPITAL FORECAST (1994-2003) (cont.) Councillor Leadston inquired whether discussions had taken place concerning construction of a crematorium. Mr. Clancy replied that this is being considered and will be the subject of future report, noting that staff are presently considering an eight to ten year timeframe. Councillor FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 105 -NOVEMBER 17, 1993 Leadston suggested that it should be constructed earlier if feasible. Mr. Graham responded that such an initiative requires careful consideration and discussions with the City of Waterloo. In response to a question from Councillor T. Galloway, Mr. Nixon outlined funding in the Capital Forecast in the years 1997-2000 totalling $900,000.00 for the McLellan Park project. Mr. Clancy referred to other major park developments in the Forecast. Councillor Stortz inquired as to the possibility of completing former PRIDE projects in the downtown under the proposed Federal Infrastructure Program. He noted that project drawings have already been completed and construction could proceed quickly if Council agreed and matching municipal funds were available. Mr. McKay responded that the City has already indicated that roads are its number one priority. He added that it is unlikely Provincial or Federal criteria would encompass this type of work, however, if this was the case Council would have to make a decision in this regard. Councillor Wagner questioned why developers are not required to finance community trails since they pay for roads in developments and bicycle trails are an alternate form of transportation. Mr. Gazzola suggested that this should be looked at relative to the Lot Levy Program. Mr. Graham pointed out that this would not address the cost of constructing trails in established areas which Mr. Nixon referred to earlier as the highest priority. Mr. Clancy advised that this option has been investigated and a consultant has indicated that the developer could install the trails at half the current cost if this were done in conjunction with construction of storm drains. Mr. Clancy indicated that he would prepare a report for discussion. Councillor Zehr inquired as to the priority for the planting of old storm water management areas. Mr. Nixon replied that the Public Works Department has to first modify the existing areas based on new storm water quality criteria, and noted that he plans to co-ordinate the planting with the proposed modifications. In response to a question from Councillor Galloway concerning expansion of the Doon Golf Course, Mr. McKay advised that Council has approved funding of the addition but would have to approve any additional land acquisitions. He indicated that a neighbourhood meeting will be held to outline expansion plans and accept input. Ms. P. Walshe, Secretary and Chief Librarian and Mr. T. Polzin, Chairman, appeared on behalf of the Kitchener Public Library Board. Mr. Gazzola reviewed the Capital Budget and Ten Year Capital Forecast for the Kitchener Public Library. Councillor Galloway questioned the allocation of the new community library in 1998, noting it was his understanding that this had been moved up to 1997 to coincide with the construction of a community centre. Mr. Ryan clarified that due to the size of the project, staff had allocated funds over a two year period with the community centre in 1997 and the library in 1998. Councillor Galloway indicated that he wished to insure that both projects are tendered together. Mr. Polzin advised that during initial discussions provision had been made for the addition of a community library to the Lyle Hallman Pool. Mr. McKay advised that a new fire hall has been slated for this area and would have a higher priority than the library. Mr. Gazzola reviewed the Capital Budget and Ten Year Capital Forecast for The Centre In The Square. Mr. Gazzola reviewed the Capital Budget and Ten Year Capital Forecast for all Divisions of the Public Works Department. 1. 1994 CAPITAL BUDGET AND CAPITAL FORECAST (1994-2003) (cont.) Councillor Galloway referred to his suggestion at an earlier meeting that in the interest of assisting with the Operating Budget selected capital expenditures be delayed or their financing deferred to a point in the Capital Forecast where funding would be more readily available. He specifically referred to street improvements and questioned whether this was a viable strategy. Mr. McKay pointed out that approximately $108,000,000.00 relates to non-property tax expenditures funded through grants. He suggested that if Capital is removed from the levy it should be removed from the full Ten Year Forecast as reinstating projects at a later date could result in a significant tax FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 106 -NOVEMBER 17, 1993 increase. Mr. Gazzola also reminded Council that capital expenditures have been frozen over the past two years. Mr. McKay pointed out that the Forecast has already been adversely effected by the Province's Expenditure Control Plan, and that the City's first priority is to maintain existing roads and sewers. He suggested that it may be more appropriate to look for project deferrals in the Parks and Recreation Department budget. Mr. McKay also advised that it has been difficult to reduce the Capital Budget to its present level and repeated earlier comments that the City's first priority is to maintain its existing infrastructure. Consequently, projects such as the addition to the Kitchener Public Library or a new community centre would be in the view of staff a lower priority. Mr. Gazzola pointed out that the Administrative Review of the Capital Budget began with a $2,400,000.00 shortfall and that most of the money allocated in 1994 is for the maintenance of existing facilities. Councillor Stortz requested a concise presentation on the status of the Natural Gas Utility and Mr. McKay asked that the Ten Year Capital Forecast from 1993 be recirculated in this regard. Councillor Ziegler asked whether the new snow dump site had been determined. Mr. Gyorffy replied in the negative indicating that at present the City has one site at Courtland Avenue, but is hoping to obtain land in this area as a result of the proposed highway re-alignment. Councillor J. Ziegler disclose a pecuniary conflict of interest and abstained from all voting and discussion concerning proposed road work involving King Street between Fairway Road and River Road as he owns property in the area. Councillor Lorentz advised that last year Council requested the Voisin Greenway Study which was to be subsequently discussed by the Public Works and Transportation Committee. He noted that the Consultant's recommendations involve approximately $350,000.00 in required improvements, some of which should be addressed in the short term. Councillor Lorentz indicated that he would like to see these expenditures incorporated in the budget. Mr. Liddle replied that he has received a summary of the yet to be completed report which will be circulated to area residents. He also noted that a report is planned for the Public Works and Transportation Committee on December 6, 1993. Mr. Liddle noted that the preferred alternative identified by the Consultant has a cost of approximately $400,000.00, however, it has not indicated in the summary which of the remedial items are critical. A brief discussion took place concerning construction of the Kolb Drain and Mr. Liddle advised that the Ministry of Natural Resources has changed its requirements since the initial Drain Study in 1976 and the impact on construction is not known at this time. Councillor Lorentz noted that the new street lights have a tendency to flicker and go out from time to time both singly and in combination and asked why this occurs. Mr. Suzuki explained that this is a result of the placement of photoelectric cells. He asked that Councillor Lorentz identify the specific locations and advised that he would discuss the matter with Hydro. Mr. Gazzola reviewed the Capital Budget and Ten Year Capital Forecast for both the Gas and Water Utilities. Councillor Smola inquired whether as a cost saving measure staff could rebuild more gas meters themselves and Mr. McKay agreed to investigate. 1. 1994 CAPITAL BUDGET AND CAPITAL FORECAST (1994-2003) (cont.) Mayor Cardillo asked that Mr. Liddle revisit the installation of curb and gutter on the section of Arlington Road leading into the Woodland Cemetery, specifically as regards the cost and financing of the work. Mr. Liddle replied that the cost could be investigated, but as previously indicated Sewer Surcharge Funds cannot be used for this project. Mr. Gazzola reviewed the Capital Budget and Ten Year Capital Forecast for the Traffic and Parking Division and all Divisions of the Fire Department. Councillor Lorentz expressed concern that the construction of Fire Station No. 7 had been moved back in the Capital Forecast to the year 1998. Mr. McKay replied that in view of the economic downturn, staff felt this is the earliest time the municipality could afford the necessary capital and operating expenditures. Councillor Lorentz pointed out that a previous report had recommended an earlier construction date and that a number of new subdivisions have been approved in this area which do not have adequate fire coverage. He noted that the ideal response time is four FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 107 -NOVEMBER 17, 1993 minutes and that in some areas of his Ward it is presently as long as eight minutes. Councillor Lorentz acknowledged the staffing costs referred to by Mr. McKay, but noted that fire protection is an essential service affecting lives and property and that these concerns will increase as the area is developed further. He stated that it is inappropriate to not raise concerns about the delay of the project. Councillor Stortz suggested that this should be dealt with in the context of the Operating Budget due to the staff costs and that it would be reasonable to bring forward the construction of Fire Station No. 7 if other projects can be deferred. Councillor Lorentz offered the opinion that when the original allocation in 1996 was proposed this had seemed reasonable. Councillor Leadston noted that Council has allowed growth development on this side of the City without provision for essential services. Councillor Galloway agreed that if the City allows expansion, it must also provide the corresponding services and suggested that discussions take place with neighbouring municipalities as to the possibility of shared coverage, particularly between Kitchener and Waterloo. Mr. McKay noted that this had been done several years ago, though he was sceptical of the outcome and suggested that the issue be revisited. Fire Chief Hancock indicated that staff are eager to see Station No. 7 constructed on schedule, however, direction from Council concerning budget reductions are incompatible with increases in the level of service, particularly in light of the 0% tax increase discussed. He pointed out that the full Fire Station Plan will be in place once Stations No. 7 and No. 8 are open, at which time the Department could examine the feasibility of fewer staff and less equipment on a City-wide basis. He referred to several areas of the municipality including Idlewood and Forest Heights which have greater than recommended response times. Mr. McKay pointed out that the provision of fire services must be balanced against the risk of fire and that new subdivisions have less fire risk than older areas of the City. Councillor Stortz suggested that fire response time should be considered as part of the planning process. In response to a comment from Mayor Cardillo concerning a possible delay in construction of the training facility, Fire Chief Hancock replied that this remains his number one priority. Mr. McKay added that the facility has no significant operating costs. In response to the suggestion by Councillor Galloway that shared services between municipalities be examined, Chief Hancock indicated that discussions on automatic aid would benefit by some form of political encouragement. He added that a single dispatch would likely be required in order to keep track of vehicle availability across municipal boundaries. He noted that at the direction of Mr. McKay a report has been prepared on staffing options, however, if the municipality continues to cut staff, they will have no options and little flexibility. 1. 1994 CAPITAL BUDGET AND CAPITAL FORECAST (1994-2003) (cont.) Councillor Leadston suggested a joint training centre to be shared by area municipalities. Chief Hancock replied that this option has been discussed informally and the various municipalities have expressed concern over having their trucks outside of City boundaries for training purposes. He referred to the possibility of a mobile training station, but noted such a facility could not address all fire situations. Councillor Leadston indicated that there may be some incentive for industry to financially contribute to a training centre. Chief Hancock indicated that this was an excellent idea and has already been pursued with the University of Waterloo. Mr. McKay offered the opinion that a training facility would have to be built by the City but that neighbouring municipalities could contribute to operating costs through the purchase of service. He added that if the Province legislates minimum standards, the Kitchener facility may be the only suitable one in the area. Moved by Councillor G. Lorentz - "That senior staff be directed to provide scenarios on how the construction of Fire Station No. 7 could be moved in the Capital Forecast to 1995/96, including all Capital and Operating Budget implications." Mr. McKay suggested that moving a project of this nature would be a political decision and reminded the Committee of the staffing implications relative to the Social Contract which expires in 1996. Councillor Stortz asked that this issue be flagged and dealt with in the context of the Operating Budget. The previous motion by Councillor G. Lorentz relative to developing scenarios for accelerating the construction of Fire Station No. 7 was voted on and . CARRIED FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 108 -NOVEMBER 17, 1993 Mr. Gazzola reviewed the Capital Budget and Ten Year Capital Forecast for all Divisions of the Planning and Development Department. Councillor Wagner questioned the reallocation of the Victoria Park Heritage Conservation District, noting that the original intention was to have the designation coincide with the anniversary of the Park. Councillor Wagner suggested that funding for the project be spread over a two year period and asked staff to indicate whether this could be done. It was generally agreed to flag this item for further consideration. Mr. Gazzola reviewed the Capital Budget and Ten Year Capital Forecast for all Divisions of the General Services and City Clerk's Department, including City Fleet. He also reviewed the Capital Budget and Ten Year Capital Forecast for all Divisions of the Administrative Services Department, including Transit. In response to a question from Councillor Ziegler, Mr. Beck advised that the Automatic Vehicle Location System is intended to provide low cost vehicle location and control and will allow the purchase of standardized equipment to monitor all buses simultaneously for schedule purposes. He pointed out that the System also provides dynamic route scheduling to allow more frequent adjustments and will provide a real time version of the Telerider System. He also noted that the budget amount includes the cost of new radios. Mr. Beck offered the opinion that the System is a good management tool and noted that 75% of the capital costs are subsidized. Councillor Ziegler inquired as to the change in ridership numbers since 1980 when the Telerider System was first installed and Mr. Beck replied that there has been a 3% increase in offpeak ridership and an overall increase of 1.5%. Councillor Ziegler expressed the opinion that the proposed Vehicle Location System will not increase ridership, only increase costs. Mr. Beck replied that the System is also a cost reduction tool. Councillor Ziegler suggested that the Automatic Vehicle Location System be put back an additional year and that a study be done in 1997 to access its feasibility. Councillor Ziegler asked that this item be flagged and discussed at a future date. 1. 1994 CAPITAL BUDGET AND CAPITAL FORECAST (1994-2003) (cont.) Mr. McKay advised that the item involving retrofitting of existing buses with new seats has been removed entirely from the budget. He noted that similar seats are provided on new buses and that staff are recommending this as an alternative to retrofitting. Councillor Smola raised concerns over Workers' Compensation claims as a result of back problems and Mr. Freeborn replied that he did not expect the new seats would reduce the claims based on past claim history. Mr. Gazzola reviewed the Capital Budget and Ten Year Capital Forecast for all Divisions of the Finance Department, the Economic Development Departments, as well as General Expenses. Councillor Zehr referred to the issues previously flagged by the Committee for revisiting. On a motion by Councillor M. Yantzi - It was resolved: "That funding for the Victoria Park Heritage Conservation District Study be reallocated in the Ten Year Capital Forecast from the year 1996 to 1994." Councillor Zehr pointed out that as a result of the above motion a reduction would be required in 1994 and Mr. Gazzola concurred, requesting that the contingency not be reduced in this regard. Mr. McKay indicated that staff would accommodate the change. A discussion took place concerning the allocation of Auditorium seat replacement in 1999 at an estimated cost of $630,000.00. Councillor Stortz requested additional information and Mr. McKay suggested that a report be circulated for consideration during 1994 and that the issue be addressed as part of the 1995 budget deliberations. By general consent, the Committee agreed to the suggestion of Mr. McKay. It was also requested that the report include an assessment of the impact on bids in the event seats are not replaced prior to 1999. Councillor Stortz requested clarification of the remaining PRIDE work in the downtown. On a motion by Councillor B. Stortz - It was resolved: FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 109 -NOVEMBER 17, 1993 "That Council adopt the 1994 Capital Budget and Ten Year Capital Forecast (1994-2003) as recommended by the Administrative Review and amended this date to reallocate funds for the Victoria Park Heritage Conservation District Study from 1996 to 1994." Councillor J. Ziegler previously disclosed a pecuniary conflict of interest and abstained from all voting and discussion concerning proposed road work involving King Street between Fairway Road and River Road as he owns property in the area. 2. NEXT MEETING The next regularly scheduled meeting of the Finance and Administration Committee will be held on . Monday, December 6, 1993 3. ADJOURNMENT On motion, the meeting adjourned at 1:35 p.m. _________________________________ G. Sosnoski Manager of Corporate Records/Assistant City Clerk