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HomeMy WebLinkAboutFinance & Admin - 1995-01-20 SFAC\1995-01-20-SPE JAN UARY 20, 1995 FINANCE & ADMINISTRATION COMMITTEE MINUTES CITY OF KITCHENER The Finance and Administration Committee met this date, commencing at 9:10 a.m., under the Chairmanship of Councillor J. Ziegler with the following Members present: Mayor Richard D. Christy, Councillors T. Galloway, K. Redman, Jake Smola, John Smola, B. Vrbanovic, C. Weylie and M. Yantzi. Councillor G. Lorentz was in attendance for part of the meeting. Others present: Messrs. T. McKay, J. Gazzola, O. den Ouden, L. Ryan, J. Shivas, T. McCabe, E. Kovacs, J. Hancock, B. Kuntz, D. Snow, B. Liddle, S. Gyorffy, J. McBride, R. Wyatt, T. Clancy, R. Arnot, G. Kett, R.W. Pritchard, L. Parkhouse, B. Gulliver, C. Ford, P. Summers, L. Proulx, R. Freeborn, W. Beck, T.B. Stanley, G. Sosnoski, Ms. L. Couch and Ms. G. Redgwell. The Committee met this date to consider the 1995 Capital Budget and the Ten Year Capital Forecast as recommended by the Administrative Review. Councillor Ziegler advised that Councillor M. Wagner had sent his regrets and was unable to attend due to medical testing. 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) Members of the Committee were previously in receipt of an information package containing a hard copy of the presentation screens and budget details by department/division. Mr. Gazzola introduced the Capital Budget and Forecast and reviewed expenditures by department, noting that as a result of the Administrative Review, expenditure requests totalling approximately $369 million dollars had been reduced to approximately $321 million dollars, and as a result, the budget is either in a balanced or surplus position for most of the ten year period. Mr. Gazzola then reviewed the sources of funding and noted that since 1980, taxation as a source of capital funding has declined from 45% to 40%. He then reviewed the Capital Policy of Council noting a target of 0% increase in 1995 and a 2% increase in each of the years 1996-2004. Mr. Gazzola indicated that the projections before Council this date are based on 0% assessment growth in 1995, and 2% growth during the balance of the forecast, with an inflation rate throughout of 2%. Mr. McKay advised that staff have noted an increase in construction inflation, and that due to the infrastructure program this will likely increase. He pointed out that in the past tenders had come in below the budget amount allowing for the accumulation of a surplus, but that this surplus is much lower than in preceding years. Mr. Gazzola added that increased inflation has also been in evidence with regard to everyday City expenditures. Mr. Gazzola then presented an analysis of target variance, indicating there is room for expansion in the last four years of the Capital Forecast, which is in a balanced position until the year 2000. He outlined the impact on the average household, noting that capital expenditures have increased since 1980 by approximately 185%, with inflation growth at approximately 180%. He noted that the impact on taxpayers during this period has only been 48%, noting that the impact on the average household has decreased since 1992 from approximately $126.00 to a projected $123.00 in 1995. Mr. Gazzola outlined statistics relative to per capita debt noting that this has declined since 1971 from $144.00 to $82.00. He then reviewed funding by source and noted a capital surplus in 1994 of $275,000.00. Mr. Gazzola reviewed the lot levy priorities for 1995 and indicated that staff will be recommending a transfer from this fund. Mr. Gazzola reported that the budget does not contain an allocation for either the Clock Tower reconstruction or improvements to the Market Square parking garage. He suggested that given the current balanced position, Council would have the option of increasing capital from current (which would have an impact on the 1995 levy), increasing debentures, or reducing expenditures in other areas. 1. 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) cont'd FINANCE & ADMINISTRATION COMMITTEE MINUTES JANUARY 207 1995 -10- CITY OF KITCHENER Mayor Christy inquired as to further actions by staff to identify and acquire Provincial grants. Mr. McKay replied that the City already receives all of the grants provided by the Province with the majority of these in the areas of highways and transit. He pointed out that the Province has reduced grant programs, and that no new grants are foreseen in the near future. Mayor Christy referred to the possible allocation of funds by the Grand River Conservation Authority to the purchase of surplus rail lines, noting that a similar purchase was made in the Brantford area. Mr. McKay replied that the City has made grant applications to an inter-ministerial committee on surplus rail line development, but to date there has been no funding provided to urban municipalities. He suggested that requests to the Grand River Foundation would relate to trail development, for which the City has no plans at present. Mayor Christy suggested that the City should not neglect this possible source of revenue. The Committee then considered the Capital Budget and Forecast for the Centre in the Square. Mr. D. Donaldson, General Manager, was in attendance to answer any questions. Mr. Gazzola advised that the roof replacement has been moved from 1995 to 1996 and that contributions towards this project to date are not sufficient to cover the anticipated cost. He also pointed out that seats require replacement at a cost of between $400,000.00 and $500,000.00, for which funds are not presently allocated. In response to a question from Mayor Christy, Mr. Donaldson advised that the figure represents the total seat replacement cost, noting that repairs cannot be undertaken selectively, but there may be an opportunity to phase replacement over a three year period. Mr. Donaldson advised that the Centre's 1995 Operating Budget submission will include a proposal relative to the use of the year end surplus in this regard. He also referred to the 1995 list of projects totalling approximately $400,000.00 and Councillor Ziegler asked whether these items are more important than seat replacement. Mr. Donaldson replied that the list reflects projects which can be undertaken with available funds. The Committee then considered the Capital Budget and Forecast for the Kitchener Public Library Board. Ms. M. Walshe, Chief Executive Officer, was in attendance on behalf of the Board. Mr. Gazzola advised that the forecast is the same as last year and includes provision for a new community library in 1998, to be funded 100% from the lot levy, and a Stanley Park Branch Library in the years 2002-2003. Councillor Galloway referred to earlier discussions concerning the combining of the library and community centre as a single project, and Mr. McKay acknowledged that this would be the case, though due to the project size it would be spread over a two year period. He added that staff are not suggesting that the timing of the project be changed unless this is the direction of Council. Ms. Walshe referred to an oversight whereby a technology upgrade valued at approximately $100,000.00 was not included in the 1997 allocation. She pointed out that this request was submitted in September of 1994 and would allow the Library to implement additional disc storage and LAN enhancements. Mr. Gazzola advised that staff will revisit the Board's forecast and bring this item back to Council on Budget Day. A brief discussion took place concerning the seat replacement request from the Centre in the Square, and Councillor Lorentz suggested that it may be premature to discuss it further until the new Board meets. He also pointed out that the Kitchener Auditorium seats were replaced after 24 years, and there may be room for delay regarding the Centre. Mr. McKay advised that this item was brought to his attention in September and that a subsequent discussion took place with Mr. Donaldson to discuss alternatives. Mr. McKay stated that Mr. Donaldson wishes to meet with the new Board of Directors to discuss this issue in light of the 1994 operating surplus. Mayor Christy indicated that he hoped customers would not be lost as a result of inadequate seating, as these seats represent revenue. Councillor John Smola questioned use of the term "operating surplus" in conjunction with the Centre in the Square, on the basis that the City contributes approximately $1 million dollars a year to its operation. 1. 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) cont'd Councillor Redman asked whether the proposed technical upgrade at the Kitchener Public Library could be spread over a two year period and Ms. Walshe replied in the affirmative. FINANCE & ADMINISTRATION COMMITTEE MINUTES JANUARY 207 1995 -11 - CITY OF KITCHENER Mr. Gazzola then reviewed the Capital Budget and Forecast for the Fire Department indicating that there are no new projects, though there are some concerns. He advised that there is no provision for the increased land costs relative to Fire Station #7 over and above the $300,000.00 allocated. He also pointed out that the four acre training site identified does not meet Provincial regulations and that a site with a minimum of 25 acres is necessary. In reference to the four acre parcel, Mr. McKay pointed out that the City presently owns the land which has no legal frontage on Homer Watson Boulevard and that Planning staff are examining alternate uses. It was noted that the City has a 99 year lease for a right-of-way over adjacent lands and has approached the owner concerning outright acquisition. Councillor Galloway asked how realistic the 1996 allocation is under the circumstances, and Mr. McKay suggested it is not realistic and that Fire Chief Hancock will make a future presentation to the Community Services Committee in this regard. Councillor Galloway asked whether it was prudent to make an adjustment and reallocate the project and Mr. McKay responded that the land issue will have to be dealt with in 1996, but the construction estimate is premature. He suggested that a possible reallocation be considered only at the end of the Budget Review. Fire Chief Hancock indicated that other land parcels are being investigated and that he would prefer not to lose either the funding or the allocation in the Forecast. In response to a question from Councillor Galloway, Fire Chief Hancock advised that in having its own training facility the City would save accommodation costs, but the major advantage would be in being able to use the site at will. He also indicated that there may be the possibility of training private fire forces on a fee-for-service basis. He noted that the City is now fully responsible for training its own recruits, a process which was previously done by the Province in Gravenhurst. Councillor Lorentz questioned the 1996/97 allocation for Station #7, adding that it was his understanding the Station was to be completed in 1996. Mr. Gazzola advised that land acquisition was to take place in 1995 and construction in 1997, and Mr. McKay added that staff recommend the project be started in 1997 and the station be opened in 1998. A question arose as to ownership of the site previously identified for the location of Fire Station #4, and Deputy Chief Kuntz indicated that it is his understanding the City does not own the site. Fire Chief Hancock added that ownership was assumed at the time of the Fire Station Relocation Study based on information provided at that time. Mayor Christy asked why the Province has changed its training site acreage requirement, and Fire Chief Hancock replied that initially, the City only planned to use smokeless fires generated by using natural gas or propane, but since then staff have decided that the use of A and B Class fires is more appropriate, and the resulting smoke requires the site to be suitably buffered from adjacent properties. Fire Chief Hancock confirmed that the Province had visited the four acre site and inferred that it was inappropriate. Councillor Jake Smola asked whether constructing Fire Station #7 on the same plan as #6 would result in a savings through downsizing the facility. Fire Chief Hancock replied that Station #6 is intended as a two crew station, whereas #7 is a four bay site, which staff feel is more appropriate. Moved by Councillor G. Lorentz, "That the construction of Fire Station #7 be reallocated in the City's Ten Year Capital Forecast from 1998 to 1997." Mr. Gazzola indicated that staff could provide alternate scenarios for Council on Budget Day concerning construction of the fire stations and the training facility. Councillor Galloway inquired as to the relationship between construction of Fire Station #7 and the proposed community centre. Councillor Lorentz advised that the station could be designed to allow a community centre to be attached at a later date. Councillor Galloway questioned where the operating costs, in excess of $1 million dollars, would come from in 1997 and Mr. McKay advised that Council 1. 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) cont'd would have to deal with this, but at present it would have to come from the tax levy. Mr. Gazzola confirmed that the operating cash flow is a problem. With regard to the proposed training centre, Mayor Christy asked whether the classrooms would FINANCE & ADMINISTRATION COMMITTEE MINUTES JANUARY 207 1995 - 12 - CITY OF KITCHENER have to be on site or whether it was possible, for instance, to use the fire tower in Cambridge and classrooms at another location. Mr. McKay advised that Fire Chief Hancock would give a full presentation on the training facility at a meeting of the Community Services Committee in February. The previous motion by Councillor G. Lorentz to reallocate construction of Fire Station #7 was voted on and CARRIED. Councillor Ziegler asked that the Minutes reflect that many Members of Council feel there is an obligation to revisit the allocation of this project, and Mr. Gazzola agreed to flag this item for further consideration on Budget Day. Mr. Gazzola reviewed the Capital Budget and Forecast for all divisions of the Public Works Department. He indicated that the snow dump site has been reallocated from 1995 to 1998 and referred to an environmental problem involving the Gaukel Street Post Office which requires the City to undertake testing in the road right-of-way which would require consulting fees of approximately $100,000.00. In regard to the status of the ring road system, Mr. Snow advised that the previous Council had given direction not to proceed, and that staff are suggesting intersection improvements as an alternative. He also pointed out that the Region has suggested an overall traffic review in the downtown and has budgeted approximately $50,000.00 for a Downtown Transportation Study. Mr. Snow advised that the City is expected to contribute an amount not to exceed $25,000.00, with the details of the study to be developed at a later date. In response to a question from Mayor Christy, Mr. McCabe advised that the Region has eliminated the ring road from their Capital Forecast, and it is staffs' understanding that ring road connections will not be questioned if appropriate intersections are improved and an entrance featured introduced. On a motion by Councillor K. Redman, It was resolved: "That the amount of $25,000.00 be added to the Public Works Department Capital Budget/Forecast to fund the City's share of the Downtown Transportation Study proposed by the Region of Waterloo." The Committee then considered the Capital Budget and Forecast for Storm Drains. Councillor Galloway questioned why the City is awaiting sale of industrial lands before installing Storm Management Pond #4 in the Huron Industrial Park. Mr. Liddle replied that he was uncertain as to why the Pond was not initially built, but it is the Department's position that the developer (in this case the City's Economic Development Department) should pay the cost of this feature. Mr. Liddle noted that he was told funds from the sale of Lot #130 would be applied to this project. Councillor Galloway suggested that this is inappropriate since the City as a whole is the developer and would not allow any other developer to build on the site without proper storm water management. He suggested that Strasburg Creek cannot be allowed to deteriorate further, as this is causing severe erosion problems downstream and asked that this project be included in the 1995 Capital Budget. Mr. McKay suggested that any funds in this regard could be charged to the open project account for the Industrial Park. 1. 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) cont'd On a motion by Councillor T. Galloway, It was resolved: "That construction of Storm Water Management Pond #4 be added to the Public Works Department Capital Forecast in the year 1995 at a budgeted amount of approximately of $150,000.00, and that staff verify the amount and FINANCE & ADMINISTRATION COMMITTEE MINUTES JANUARY 207 1995 - 13 - debit the Industrial Park Open Account." CITY OF KITCHENER Regarding the Street Improvements Budget, Councillor Jake Smola noted that there is no specific allocation relative to the reconfiguration of Heritage Drive to Oakhurst Crescent. Mr. Liddle confirmed that Heritage Drive would be a 1995 project with funding from the General Provision Fund based on the original estimate of $100,000.00. Councillor John Smola asked for a report to the Public Works and Transportation Committee relative to on-street parking and re-surfacing of King Street. Mr. Liddle confirmed that the re- surfacing of King Street will take place in 1995 with funds to be taken from the existing Re- surfacing Account, currently budgeted at $600,000.00. Councillor Smola argued that the King Street project alone would likely cost $200,00.00 and questioned whether it should be allocated separately in 1995. Mayor Christy inquired as to the 1995 road improvement plan for Old Chicopee Drive and asked that this item be flagged for further consideration and that his office be kept informed in order to address inquiries. Mr. McCabe clarified that reconstruction of Old Chicopee Drive was a development cost and that the scenic portion of the road has now been removed, though under the subdivision agreement the developer will be required to replant. Mr. Liddle cautioned that with regard to street re-surfacing, it has been estimated that approximately $2 million dollars in expenditures are required to keep the roads in their present condition. On a motion by Councillor C. Weylie, It was resolved: "That the 1995 allocation of $1,112,000.00 for Strasburg Road street improvements be reduced to $675,000.00, with the revised amount to come from the Lot Levy Fund and the balance to be paid by the developer." Mr. Gazzola reviewed the Budget and Forecast for the Parkin.q and Traffic Division and noted three new items: $75,000.00 for the monitoring of the City Hall parking garage; $35,000.00 for acquisition of the former Kitchener Dairies parking lot; and $115,000.00 for parking meters on King Street. Mr. Gazzola explained that by agreement with the present owner, revenue from the Kitchener Dairies parking lot will be used to pay current taxes and arrears, an arrangement which is beneficial for both parties. Mr. Gazzola pointed out that at present there is no provision in the Budget or the Forecast for repairs to the Market Garage anticipated to be in the range of $3 to $4 million dollars. Mr. Snow explained that staff have met with consulting engineers who presented their suggestions. A report and recommendation (including funding options) will be presented at the end of February. Councillor Redman pointed out that Market Square merchants feel that the closing of the upper two levels of the garage have crucially impacted their businesses. Councillor Galloway asked whether maintenance and repair costs should be charged to the Parking Enterprise, and Mr. McKay agreed that they should, provided the City is charging the proper amount for parking. He referred to the current deficit and the fact that the enterprise cannot be financially viable while funding the repairs in questions. Councillor Galloway asked whether the parking enterprise could debenture this amount, and Mr. Gazzola replied that it cannot sustain these expenditures whether they are paid for outright or debentured. Councillor 1. 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) cont'd Yantzi cited continuing losses by the Parking Enterprise and generally questioned whether the City should continue to operate it. Mr. Gazzola replied that enterprises are usually financed entirely by user fees, which is no longer the case. Mr. McKay pointed out that the enterprise was profitable three years ago, but that the following had a detrimental impact: charging the new City Hall parking garage to the Parking Enterprise; offering one hour free parking; and a general drop in parking revenues. Mr. Gazzola then reviewed the Budget/Forecast for the Gas and Water Utilities, and indicated that FINANCE & ADMINISTRATION COMMITTEE MINUTES JANUARY 207 1995 - 14 - CITY OF KITCHENER with respect to the former, there are no material changes and that the Gas Utility Forecast is substantially the same as 1994. The Finance and Administration Committee then adjourned for lunch at 12:15 p.m. and reconvened at 1:00 p.m. On motions by Councillor John Smola, It was resolved: "That the 1995 Capital Budget and Ten Year Capital Forecast of the Fire Department be adopted, as amended." -and- "That the 1995 Capital Budget and Ten Year Capital Forecast of the Public Works Department be adopted, as amended." -and- "That the 1995 Capital Budget and Ten Year Capital Forecast of the Kitchener Public Library Board be adopted." -and- "That the 1995 Capital Budget and Ten Year Capital Forecast of the Centre in the Square be adopted." Mr. Gazzola then reviewed the Capital Budget and Forecast of the Parks and Recreation Department. With regard to community arenas, it was noted that the general provision has been increased by $312,000.00, a new community arena is scheduled for the year 2002 and that re- roofing of the Grand River Complex has been funded through the Federal/Provincial Infrastructure Program. Mr. Gazzola also pointed out that with respect to Community Programs, $20,000.00 had been allocated in each of the ten years of the Forecast for City Hall programs, and this amount was reduced from $35,000.00 annually by the Administrative Review. Mr. McKay explained that the purpose of this allocation is to cover the cost of an inventory of small items needed to service activities held in the Rotunda and the Civic Square. Mr. Gazzola also referred to the transfer of a surplus from another community program to Cultural Strategies, and Mr. Clancy pointed out that an offsetting grant of 50% has been received from the Province. Councillor Yantzi referred to the upcoming Victoria Park Community celebration and his feeling that a part-time staff person is required to coordinate the event and perform other services such as applying for grants. It was mentioned that approximately $10,000.00 would likely be required in 1995 and $20,000.00 in 1996. Councillor Yantzi put forward a motion that the Capital Budget/Forecast of the Recreation and Programs Division be amended so as to allocate to the Project Account $10,000.00 in 1995 and $20,000.00 in 1996 to be used for the hiring of a part-time Victoria Park Community Celebration Coordinator. 1. 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) cont'd Councillor Galloway expressed concern that if this item is approved as part of the Capital Budget, it will remove some of the incentive to find alternate sources of funding. He indicated that his preference would be to have this amount included as part of the Operating Budget and be provided only if needed. Mr. Gazzola suggested that the organization will likely need this amount in any case, and that it should be part of the Capital Budget. Councillor Galloway pointed out that a larger issue is the amount of staff involvement and the likelihood of additional City grants being required for such items as parking, and suggested that this whole issue should be dealt with more comprehensively. Councillor Lorentz suggested a presentation to the Community Services Committee prior to Budget Day. FINANCE & ADMINISTRATION COMMITTEE MINUTES JANUARY 207 1995 - 15 - CITY OF KITCHENER Councillor Yantzi accepted, as friendly amendments, a suggestion by Councillor Lorentz that a presentation be made to the Community Services Committee prior to Budget Day, and by Councillor Redman that the allocation be changed to reflect a $30,000.00 amount in 1995 only. On a motion by Councillor M. Yantzi, It was resolved: "That the Project Account of the Recreation and Programs 1995 Capital Budget reflect the addition of $30,000.00 for the hiring of a part-time Victoria Park Community Celebration Coordinator, and further, That a presentation in this regard be made to the Community Services Committee prior to Budget Day, February 10, 1995." Mr. Gazzola reviewed the Capital Budget/Forecast for the Aquatics Section and indicated two new items: Expansion of the Breithaupt Centre in 2004; a new community pool in 2002. In regard to the Community Development Budget, Mr. Gazzola referred to a $100,000.00 allocation over the ten year period of the Forecast for the Neighbourhood Festival Program. Councillor Ziegler suggested that similar to the Urban Design Awards, this should be held as a larger event every second year. As an alternative, Councillor Yantzi suggested that allocations be made for five rather than ten years to see whether the present momentum changes. Councillor Lorentz indicated concern that he has not yet seen a final report from the first festival and referred to comments that the prize was distributed through a draw rather than through judging of neighbourhood floats. Mr. McKay responded that the decision to hold a draw was made the day of the event when some of the floats fell apart and it seemed that judging would be inappropriate. Mr. Arnot replied that a report would be submitted to the Community Services Committee for consideration on January 30, 1995. Councillor Galloway expressed concern over the notion of General Provisions and how they are used. He noted that last year he was assured that these provisions would not be used to purchase carpet and furniture replacements, but this occurred throughout the year. In regard to the community center provision, Councillor Lorentz indicated it was his understanding Council had established a policy involving the building of a community centre every four years. Mr. McKay replied that Council reconfirmed Country Hills as the first priority and asked staff to review the consultant's study. Councillor Jake Smola inquired as to plans for the Stanley Park Community Centre and Mr. McKay advised that the project is not in the Ten Year Forecast. Councillor Ziegler clarified that community center construction generally relates to the recommendations made in the consultant's study as well as neighbourhood needs. Councillor Galloway referred to the issue of combining library branches and community centres in the same year and indicated his willingness to put forward a motion that the community library provision be moved from 1998 to 1997 to parallel construction of the Country Hills Community Centre. Mr. McKay pointed out that the move is unnecessary since based on the size of the project, construction will likely be spread over a two year period, and if funds are reallocated it could result in an imbalance. He assured Councillor Galloway that the two components would be dealt with as one combined project. Mr. Gazzola indicated that this item could be flagged 1. 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) cont'd for further consideration on Budget Day. Mr. Gazzola then reviewed the Capital Budget/Forecast for the Business Facilities Section and noted new items comprised of a $100,000.00 cooler upgrade at the Farmers' Market; $336,000.00 for air conditioning at the Kitchener Memorial Auditorium (2004); and $106,000.00 for an exterior marquis to be funded from the Seat Sale Donation Program. Councillor Ziegler requested a report for the January 30, 1995 Community Services Committee on the Seat Sale Donation Program, and asked that it be compared to the Centre in the Square. Councillor Lorentz suggested that such a report may be premature as the program has only started, but results have been encouraging to date. Councillor Lorentz also asked for the status of the roof repairs to the Auditorium. Mr. Arnot replied that staff would have preferred to have seen FINANCE & ADMINISTRATION COMMITTEE MINUTES JANUARY 207 1995 - 16 - CITY OF KITCHENER the roof replacement earlier in the Forecast, but will have to work around the present allocation. Mr. Gazzola advised that replacement had originally been scheduled in 1995, but that the project would be moved up if necessity dictates. Councillor Galloway indicated that it may be worth considering the creation of a slip-off lane relative to the Ottawa Street Auditorium entrance, and Mr. Wyatt noted that this was considered in 1988 and the findings could be resurrected. Mr. Gazzola presented the Capital Budget/Forecast for the Cemeteries Section and noted $50,000.00 for mausoleum repairs; and a $140,000.00 increase to the General Provision. A brief discussion took place concerning the crematorium initiative and Mr. Clancy advised that a business plan and recommendations are forthcoming. Councillor Lorentz suggested a tour of Park's facilities in the Spring/Summer of 1995 as a means of acquainting Council with new projects. Mayor Christy welcomed (on behalf of Council) classes from the Laurentian Hills Christian School. Mr. Gazzola presented the Capital Budget/Forecast for the Parks and Property Division noting two new items: Park development - Huron Natural Park; inclusion of the $2.6 million dollar Parkland Reserve Fund in the Forecast. He also pointed out that there is no provision for the Clock Tower reconstruction. Councillor Galloway inquired as to further consideration of the proposed Woodlot Acquisition Fund and Mr. Clancy replied that land purchases would have to be treated under the Park Acquisition Fund. Councillor Galloway indicated that it was his impression a report was to be prepared on a possible Woodlot Acquisition Fund for further discussion by Council during budget deliberations, and asked that the Minutes be checked in this regard. Councillor Galloway also referred to the present status of McLennan Park, and Mr. Clancy advised that staff can review and report on the situation as well as gas reclamation/safety concerns. Mr. McKay advised that he plans to reinstitute a committee involving Regional representatives and is looking for an agreement to remove any future liability so that development can begin. A brief discussion took place concerning parkland acquisition and an update was requested on the purchase of surplus rail lands for community trails. Mr. McKay advised that staff are still negotiating with CP Rail and Mayor Christy asked that this item be flagged for further consideration on Budget Day. Mr. Gazzola then presented the Capital Budget and Forecast for the Golf Course Enterprises. It was noted that the nine hole addition to the Doon Club has been moved from 1995 to 1996, and that $100,000.00 has been allocated at the Doon Club and $136,000.00 at the Rockway Club for operation of the Golf Cart Program. Mr. Gazzola also noted an additional $29,000.00 allocation for an addition to the Rockway Clubhouse. 1. 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) cont'd On a motion by Councillor T. Galloway, It was resolved: "That the 1995 Capital Budget and Ten Year Capital Forecast for the Parks and Recreation Department including the Golf Course Enterprises be adopted, as amended." Mr. Gazzola reviewed the Budget and Capital Forecast for the General Services and City Clerk's Department (includinq Fleet). With respect to the Energy Management Program it was noted that the present system has been modified so that in future savings generated will be partially used to fund future projects. Mr. Pritchard pointed out that the changes referred to have an impact on energy management strategies, in that there is now a shortfall of $580,000.00 relative to the implementation of the Strategic Plan, and that as a result it may not be implemented as quickly. Mr. Gazzola reviewed a variety of new items in the Facilities Management Budget and Forecast including new roofs, Farmers' Market lighting, the HVAC system for the transit garage and FINANCE & ADMINISTRATION COMMITTEE MINUTES JANUARY 207 1995 repointing of 122 Frederick Street. -17- CITY OF KITCHENER Mayor Christy inquired as to the status of the Market garage elevators and asked that this item be flagged for further discussion. Mr. Gazzola reviewed the Budget and Forecast for the Fleet Division and noted that the budget includes eleven new replacement buses, none of which are natural gas powered. He also pointed out that there is no provision for an NGV filling station. Mr. Gazzola noted that Council had previously directed staff to acquire natural gas buses subject to Provincial funding, but the latter has not been forthcoming as the Province does not feel it is feasible. Councillor Yantzi inquired as to other funding options, given the long term savings of conversion. Mr. Gazzola replied that without Provincial funding, the payback would be fourteen years and this not financially feasible. Mr. Pritchard added that the Province has approved bus tender specifications for 1995/1996 with an option for pricing natural gas units, and has agreed to review the issue when submissions are received. Mr. Gazzola noted that 26 buses were purchased in 1994 which can be converted to natural gas. Mr. McKay also referred to bus price increases resulting from a lack of competition, and pointed out that at present natural gas powered Iow floor buses are not available. On a motion by Councillor M. Yantzi, It was resolved: "That the 1995 Capital Budget and the Ten Year Capital Forecast of the General Services and City Clerk's Department 'including Fleet) be adopted." Mr. Gazzola presented the Capital Budget and Forecast for the Administrative Services Department (includinq Transit) and referred to acquisition of software for $240,000.00, and the reallocation in the Forecast of Transit "Smart Cards" from 1995 to 1996. It was also noted that increases in bus prices will add approximately $2.4 million dollars over the ten year period. Councillor Yantzi inquired why implementation of the "Smart Card" has been delayed, and Mr. Freeborn replied that in his estimation staff are not ready for implementation in 1995. Moved by Councillor C. Weylie, "That implementation of "Smart Cards" be reallocated in the Transit Division Budget/Forecast to 1995 from 1996." 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) cont'd Mr. McKay pointed out that from a logistical standpoint, staff do not feel they could handle this project in 1995 and that at present the cost per unit is far too high. He expressed confidence that the price will come down with time, noting a present cost of between $4,000.00 and $5,000.00 per unit. Mr. Gazzola also pointed out that there is still some uncertainty concerning the connection with the use of debit cards which, have not been used as extensively as anticipated. The previous motion by Councillor C. Weylie to reallocate the "Smart Card" initiative was voted on and was LOST. On a motion by Councillor K. Redman, It was resolved that: "That the 1995 Capital Budget and the Ten Year Capital Forecast for the Administrative Services Department (includinq Transit) be adopted." Mr. Gazzola reviewed the Capital Budget for General Expenses. Mayor Christy requested discussion of the $200,000.00 allocation to downtown improvements which he indicated seemed very Iow in terms of the private initiatives presently under discussion. Councillor Lorentz offered the opinion that the solution to the problems of the downtown do not FINANCE & ADMINISTRATION COMMITTEE MINUTES JANUARY 207 1995 - 18 - CITY OF KITCHENER solely involve more money in the absence of any plan to implement improvements. He suggested that this budget allocation should be reviewed in the context of the recommendations from the proposed Downtown Action Task Force. In response to a question from Councillor Lorentz, Mr. Gazzola advised that to date the City has invested approximately $83 million dollars in the downtown (including construction of the City Hall). Councillors Ziegler and Yantzi agreed with the comments of Councillor Lorentz that funding should follow adoption of a plan. Mr. McKay suggested that an amount should be included in the budget, and advised that the Task Force report should be available in late Spring. He further suggested that if the report indicates specific action and Council endorses the recommendations, a discussion would take place to determine funding sources. Mayor Christy indicated that he was prepared to wait for the development of terms of reference by the Task Force and asked that the possibility of increasing the term of financing for the Business Park debt with the reallocation of some of these funds to downtown development be flagged for consideration on Budget Day. Mr. McKay acknowledged that this is one of the funding options, but noted that the City's auditor has continuously suggested that the City adopt a plan to expeditiously reduce the Business Park debt. On a motion by Councillor M. Yantzi, It was resolved: "That the 1995 Capital Budget and the Ten Year Capital Forecast for General Expenses be adopted." Mr. Gazzola reviewed the Capital Budget and Forecast for the Finance Department noting a new allocation of $50,000.00 for Accounts Receivable software. On a motion by Councillor T. Galloway, It was resolved: "That the 1995 Capital Budget and the Ten Year Capital Forecast of the Finance Department be adopted." Mr. Gazzola outlined the Budget and Forecast for the Planninq and Development Department, noting that there are no changes. 1995 CAPITAL BUDGET AND CAPITAL FORECAST (1995-2004) cont'd On a motion by Councillor M. Yantzi, It was resolved: "That the 1995 Capital Budget and the Ten Year Capital Forecast for the Plannin,q and Development Department be adopted." Mr. Gazzola outlined the Budget and Forecast for the Economic Development Department, noting an allocation of $16.9 million dollars to fund the Business Park debt which could be reduced in the event of additional sales. Mr. McKay clarified that this figure does not reflect any land sales that may occur during the period. Councillor Galloway asked whether such sales would offset the debt and Mr. McKay advised that the first $6 million dollars must be financed, but it may be realistic to assume that funds will not have to be allocated in the years 2000 and 2001. Mr. Gazzola cautioned that the City cannot leave off payment of this debt indefinitely. Mayor Christy inquired as to the cost of the land portion of the Huron Natural Park and Mr. McKay indicated a transfer of one hundred unserviced acres. Councillor Galloway added that based on the original purchase price approximately $1 million dollars in land value is involved. Councillor Jake Smola asked whether there is any way to turn the industrial land into a more marketable commodity such as residential property. Mr. McCabe replied that staff have looked at the designation of land south of the Creek as residential, and have done what they can in terms of use. Mr. McKay pointed out that at present the City has approximately eighty acres of land which is not designated residential, which is relatively small for an industrial land inventory during a rising market. He added that Council has yet to consider whether it wishes to continue as a developer of FINANCE & ADMINISTRATION COMMITTEE MINUTES JANUARY 207 1995 industrial parkland. -19- CITY OF KITCHENER On a motion by Councillor G. Lorentz, It was resolved: "That the 1995 Capital Budget and Ten Year Capital Forecast of the Economic Development Department be adopted." Mr. Ryan summarized the current budget position, noting $55,000.00 of Capital out of Current has been added which has to be offset, and that there is an $827,000.00 imbalance in the year 1997 of the Forecast. 2. NEXT MEETING The Capital Budget will be considered by Council on February 10, 1995. The next meeting of the Finance and Administration Committee to deal with the 1995 Operating Budget will be held on Wednesday, January 25, 1995. 3. ADJOURNMENT On motion, the meeting adjourned at 3:45 p.m. ........... G. Sosnoski ........... Manager of Corporate ........... Records/Assistant City Clerk