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HomeMy WebLinkAboutFinance & Admin - 1998-01-23 SFAC\1998-01-23-SPE JAN UARY 23, 1998 FINANCE & ADMINISTRATION COMMITTEE MINUTES CITY OF KITCHENER A special meeting of the Finance and Administration Committee was held this date commencing at 9:15 a.m. under the Chairmanship of J. Ziegler with the following members present: Councillors T. Galloway, K. Taylor-Harrison, M. Yantzi, John Smola, Jake Smola, B. Vrbanovic, J. Haalboom and C. Weylie. Mayor C. Zehr and Councillor G. Lorentz were in attendance for part of the meeting. Others present: Ms. P. Houston, Ms. R. Upfold, Ms. G. Luciantonio, Messrs. J. Gazzola, T. McCabe, O. den Ouden, S. Gyorffy, R. Arnot, B. Stanley, J. Shivas, R. Wyatt, R. Grau, G. Kett, D. Hergott, R. W. Pritchard, L. Parkhouse, B. Gulliver, D. Anderson, L. Proulx, C. Ford, J. McBride, D. Snow, D. Mansell, B. Musselman, J. Bailey, J. Cicuttin, D. Quinn and G. Sosnoski. The purpose of the meeting was to consider the 1998 Capital Budget and 10 Year Capital Forecast as recommended by the staff Administrative Review Committee. Ms. M. Walshe and Ms. S. Franzen were in attendance on behalf of the Kitchener Public Library, and Mr. D. Donaldson and Ms. M. Batchelor on behalf of the Centre in the Square. 1. 1998 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST The Committee was previously in receipt of a summary outline of the Capital Forecast 1998-2007 as well as screen prints of today's presentations. Councillor J. Ziegler asked that in future, staff also include the prior year figures with the current recommended amounts for comparison purposes, and Ms. Houston responded that this would be done prior to Budget Day. Ms. P. Houston outlined expenditures by department, noting that the combined total expenditure in 1997 was $331,672,000.00 with the combined department estimates for 1998 totalling $344,709,000.00. As a result of the Administrative Review, this amount was reduced to $331,021,000.00. Ms. Houston pointed out that in 1997 the City received approximately $22 million in Provincial grants, including transit and a portion of block funding, and that in 1998 this amount has been reduced to zero. She reviewed the impact of Provincial downloading on the Capital Budget, noting that Provincial transit funding is being replaced with capital from current and that the City is absorbing $6.3 million in reduced Provincial block funding allocated to Capital projects. Ms. Houston then reviewed an analysis of the City's Capital Policy; namely, that debt charges will not absorb more than 7.5 per cent of the tax bill and that the impact on taxpayers will not exceed 2 per cent in any year. She noted that a taxpayer impact of 2 per cent is consistent throughout the Forecast and that the percentage of debt charges is at the 7.5 per cent mark throughout the Forecast, save and except 1998 where the debt charge rises slightly to 7.62. Ms. Houston advised that for purposes of budget preparation, zero per cent assessment growth is assumed in 1998 with 2 per cent for the balance of the Forecast. Inflation has been calculated at 2 per cent in each of the 10 year's of the Forecast. Councillor T. Galloway pointed out that recent Provincial announcements suggest that the assessment rolls will be kept open until the end of April and questioned whether this would benefit the municipality. Ms. Houston confirmed that the rolls are being kept open and that in addition to any such benefit there may also be significant supplementary assessments, and suggested that it would be more appropriate to make adjustments in this regard in the operating portion of the budget. Ms. Houston then reviewed the impact of capital expenditures on the average household from 1980 to 1998, noting that during this period capital expenditure growth was at 1.90 per cent, inflation growth at 1.87 and per household impact at 1.79. She then reviewed the City's per capita debt noting that in 1971 it was $144.00 and has dropped to $72.00 in 1997. She then reviewed lot levy funding and the impact of the new Development Charges Act in future years. She advised that the charge on the development portion of projects is now zero per cent for hard services and a maximum 10 per cent for soft services. It was also noted that these changes have been addressed in the 1998 Forecast. In closing, Ms. Houston advised that at present the Capital Budget and Forecast are in a balanced position. Councillor Jake Smola referred to the favourable impact on the Operating Budget of reducing current debt over the next ten years and asked how the City could approach implementing this FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 23, 1998 -9- CITY OF KITCHENER 1998 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST- CONT'D strategy. Ms. Gazzola explained that the City's Capital Policy makes provision for accumulating a certain amount of debt as this allows flexibility in funding large projects. He added that at present the City is paying 80 per cent cash and that the only way to eliminate the debt is to place an additional burden on the tax bill. Ms. Houston also pointed that the Capital Policy balances issues of fairness in terms of who pays for projects so that future taxpayers are paying a portion of the cost of projects from which they will benefit. Councillor Galloway enquired as to what would be necessary for the City to become debt free and Ms. Houston replied that in order to become debt free within ten years, the City would have to reduce capital projects by $38 million over that period. Mayor Zehr pointed out that Kitchener's debt level cannot be compared to those of senior levels of government, noting that Kitchener's debt is at a responsible level and is manageable at this time. Ms. Houston then reviewed the Capital Budget and Forecast for the Planninq and Development and Finance Departments. Mayor Zehr questioned the furniture replacement allocation in the Administration Division of the Finance Department, and in particular why there are such large amounts in each year of the Forecast. Councillor Vrbanovic enquired why this capital provision appears only in regard to the Finance Department, and where other departments budget for office equipment and furnishings. Councillor J. Ziegler asked that staff prepare a detail sheet on how these figures were arrived at for the entire department Forecast and asked that this item be flagged for additional discussion at a future budget meeting. Ms. Houston then reviewed the Capital Budget and forecast for General Expenses and for the Parks and Recreation Department. Councillor Haalboom questioned how planning the design and construction of City recreational facilities is influenced by demographic trends which indicate that in future the majority of the population will be seniors. Councillor Lorentz stressed the need to incorporate a different philosophy as to how the City operates its community centres rather than build or expand Centres specifically geared to seniors. Councillor Yantzi also suggested that it may be appropriate to combine senior's facilities with other uses such as libraries and churches. He asked that this item be flagged for discussion at the upcoming strategic planning meeting involving Council and senior staff. Ms. Houston then reviewed the Community Centre Reserve Fund provision, and it was noted that at present there are no new Community Centres in the 10 Year Forecast, though an addition is planned to expand the Breithaupt Centre in 2004. Councillor Galloway referred to the Community Centre expansions in the years 2004, 2005 and 2007 of the Capital Forecast, and Councillor Yantzi questioned how these expansions were added to the Forecast without being dealt with at the Committee level. Councillor Vrbanovic noted that in his view, provisions should be approved at this time but not the actual expenditures. On a motion by Councillor B. Vrbanovic, it was resolved: "That the issue of prioritizing of the expansion of existing Community Centres and construction of new Centres be placed on the agenda for the upcoming Corporate Strategic Planning Meeting." In regard to the Kitchener Memorial Auditorium Complex, Councillor Vrbanovic questioned removal of the structural repairs and asked whether there is a safety issue. Mr. Grau replied that there is some uncertainty at this time, as the two engineering reports differ and staff are presently attempting to get a third opinion. Mr. Gazzola explained that the allocation was removed at this time to balance the Forecast as the estimate for repairs was uncertain. Councillor Galloway questioned why the dasher-board replacement could not be funded from the Capital Reserve Fund as this would be an appropriate and visible fund expenditure. Ms. 1998 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST- CONT'D Houston responded that this would be possible, and was asked to work out the details in time for FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 23, 1998 -10- CITY OF KITCHENER Budget Day. Councillor Vrbanovic questioned the site upgrading costs in the Forecast and Mr. Grau advised that these are for general repair and maintenance, the specifics of which are only itemized a year in advance. Councillor Vrbanovic asked for a report providing a detailed itemization of the upgrades. Councillor Galloway asked for a brief report itemizing expenditures for the additional $15,000.00 in 1997 for Community Trails. He asked members of Council to consider adding additional funds to the Community Trail provision on the basis that activity involving these is on the rise. On a motion by Councillor T. Galloway, it was resolved: "That the amount of $50,000.00 be shifted from within the Parks and Recreation Department Capital Budget or from a General Contingency to the Community Trail Provision for unspecified trail improvements, and in this regard staff are to report to a future meeting of the Community Services Committee on how these additional funds will be spent on community trails." Councillor Lorentz also asked that discussion take place at a future Community Services Committee meeting as to the City's policy on Parks and Recreation related expenditures given the changing demographic profile of the community. On a motion by Councillor C. Weylie, it was resolved: "That Topper Woods be considered a high priority for Community Trail expenditures in 1998 on the basis of its status as an environmentally sensitive area, and in this regard a report be considered at the Community Services Committee outlining how this project will be prioritized and integrated into other planned development in the area." Councillor T. Galloway enquired as to the planned use of the $250,000.00 amount allocated to major park development, and Mr. Wyatt agreed to provide additional information in this regard. Councillor Galloway also noted that there is no budget allotment for McLennan Park in 1998, and asked when Council will receive a report on the status of the proposed part. Mr. Gazzola responded that staff would respond on this issue as soon as possible. Councillor J. Haalboom referred to the $30,000.00 amount allocated to tree planting and commented that it appeared relatively small. She asked for a report on where and how trees are to be planted in 1998. Councillor B. Vrbanovic requested a list of how Downtown improvement funding has been reallocated to the various department budgets, and Ms. Houston agreed to report in this regard. Mayor Zehr referred to the budget for a new arena and asked whether staff are anticipating cooperation between various partners in regard to new construction. Mr. Arnot replied that six partners are involved, and Parks and Recreation staff will look at arena development over the next 10 years. Mr. Arnot advised that he anticipated a report to the Community Services Committee in March of this year. Mayor Zehr commented that the budget figure in the Capital Forecast should be Kitchener's contribution only. Ms. Houston reviewed the Capital Budget and Forecast for the Corporate Services Department. She referred to the report previously requested concerning possible acceleration of the Energy Management Program, and in this regard the Committee was in receipt of her report dated January 22, 1998 and a report from C. Ford dated January 19, 1998. Ms. Houston commented that the options are to adjust the Capital program by moving other projects in order to bring energy management initiatives forward; or to issue new debt to finance these projects. She pointed out that anticipated debt charges have been incorporated into option #3 and in this regard the City would be approximately $400,000.00 ahead after 10 years. She suggested that this payback is too long, and suggested that if Council is disposed to reallocate funds to accelerate the energy management projects she would suggest option #2(a) or #2(b). 1998 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST- CONT'D Councillor T. Galloway put forward a motion to adopt option #2(b) in regard to acceleration of the Energy Management Program. This option envisions issuing debt to finance projects having a maximum payback of five years. A full-time engineer would also have to be hired as opposed to using co-op students. FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 23, 1998 -11 - CITY OF KITCHENER Councillor Vrbanovic asked that staff re-evaluate the use of co-op students and suggested a senior engineering student on an eighth month work term. Councillor Galloway amended his previous motion so as to approve Option #2(b) "in principle". Councillor Ziegler also requested a report to the Finance and Administration Committee on the hiring of a full-time, contract Engineer, including the recommended term of the contract and a 10 year forecast prioritizing the projects which would be addressed. Councillor Jake Smola suggested the possibility of cross training existing staff, possibly outside of the Facilities Management Division as opposed to hiring a contract Engineer. The motion was then voted on, as amended. On a motion by Councillor T. Galloway, it was resolved: "That Council approve, in principle, accelerating the City's energy management program as outlined in Option #2(b) in the reports of P. Houston and C. Ford respectively dated January 22, 1998 and January 19, 1998 at an estimated saving over the ten year period of $481,000.00, and further, That in regard to the above, a full-time Engineer be hired in the Fall of 1998 on a three-year contract." Councillor Haalboom questioned the deletion of a $10,000.00 budget amount for repairs to the Homer Watson House, and Mr. Proulx responded that in the absence of the matching funds promised by the Homer Watson House Foundation, the City's portion was deleted. She asked that consideration be given to putting this amount back into the budget as the house is now in a good state of operation and the planned improvements and repairs will facilitate ongoing and additional programming. Councillor Haalboom put forward a motion in this regard, which was note voted on. Mr. Gazzola pointed out that a previous Council resolution indicated that the City's contribution was conditional upon receiving matching funds from the Foundation. Councillor Haalboom argued that the House is operating on a very small budget and the capital expenditures are required to maintain the repairs and improvements already made by the City over the previous years. Mr. Proulx confirmed that the City has spent $50,000.00 on the building over the past number of years. Mr. Gazzola advised that staff would bring back a ten year program for the Homer Watson House. In reviewing the Fleet Division budget, Councillor Jake Smola noted that the interval for bus replacements has been increased from 18 years to 22 years, and Mr. Gulliver responded that with the end of Provincial subsidies, staff were forced to reassess the replacement schedule, with this affecting approximately 50 per cent of the fleet. Mr. Gulliver advised that this will affect purchases in 2001, but additional maintenance requirements due to the need to extend the life of existing buses will take effect immediately. Mayor Zehr asked whether staff are reviewing what size bus is most appropriate before making additional acquisitions, and Mr. Gulliver replied that a multi- departmental committee is looking at the issue of using smaller Transit vehicles; however, this becomes problematic if used during peak times. Councillor Galloway noted the absence of the $10 million allotment for replacement of the Bramm Street facility and questioned why this project does not appear anywhere in the Capital Forecast. Mr. Pritchard replied that staff acknowledged the need for expansion, probably 1998 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST- CONT'D involving land acquisition, over the next five to ten years. Councillor Galloway suggested that some sort of reserve should be established in this regard, and Mr. Pritchard responded that when Council approved the closing of the Maple Street yards, staff had suggested the proceeds from the sale be put in a reserve fund for Bramm Street expansion, with Council reserving its decision on this matter. Councillor Galloway suggested that in his view the present location may not be the most efficient and that relocation to other areas of the City could result in cost reductions, especially if combined with other facilities. He asked that this issue be flagged for future consideration some time during the term of the present Council. FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 23, 1998 -12- CITY OF KITCHENER The Committee then recessed for lunch and reconvened at 1:50 p.m. Ms. Houston then reviewed the Capital Budget and Forecast for the Economic Development Division, the Kitchener Public Library and the Centre in the Square. In regard to the Kitchener Public Library budget, Councillor Vrbanovic advised that he has concerns with the recommendation of the Administrative Review that construction of the Stanley Park Branch be moved back in the Forecast to 2002/2003. He noted that this is to be a joint facility, and questioned the appropriateness of leaving a portion of that facility vacant for a two to three year period, and whether any cost savings as a result of combining the library and fire hall would be lost. He suggested that if anything, this project should be moved forward in the Forecast. Ms. Walshe added that the current Stanley Park Branch lease will be extended to the end of 2001 with a six month option to renew. Councillor Jake Smola pointed out that front end funds are required for the design phase of the joint facility and asked staff to ensure that all funding is in place with respect to a comprehensive, joint design, and that the lease renewal is co-ordinated with the new construction schedule. Ms. Houston then reviewed the Capital Budget and Forecast for the Fire Department. Councillor Vrbanovic referred to the planned construction of Fire Station #3 and the potential closing of the Ottawa Street bridge for up to one year to accommodate highway widening, and asked whether a change in the City's Capital funding is required. Deputy Chief Kuntz advised that he has requested additional information as to the possible closing of the bridge and is awaiting firm dates. He further advised that approximately one year would be required to bring Fire Station #3 into operation. The Committee then entered into discussion concerning an operating budget strategy given the financial impact of Provincial downloading and grant reduction. Councillor Ziegler questioned when and how the City would deal with the loss of the transit subsidy, given that it is trying to maintain a service which in the past benefitted from significant Provincial contributions. He pointed out that a $2.1 million increase in capital from current would be required for transit alone and this would translate into a tax increase of approximately 3-1/2 per cent. Ms. Houston clarified that 50 per cent of this amount would be offset by the education tax room, and that the required tax increase would be in the order of approximately 1-1/2 per cent. Ms. Houston reviewed the estimates of the impact of Provincial downloading which suggest the Province has passed costs onto the municipality in the amount of approximately $9.9 million through various grant and revenue reductions, while the City's estimated education tax room is approximately $4.6 million, leaving a net shortfall of approximately $5.3 million. This amount, combined with anticipated 1998 expenditure requirements and the impact of negative assessment growth, translates into an increase over the restated 1997 levy base of approximately $7.3 million, or a 11-1/2 per cent increase having a cost per household of approximately $69.92. Ms. Houston reviewed the history of Provincial downloading since 1993, noting that over that period the City has had to deal with reductions of approximately $14 million. Mr. Gazzola added that Provincial downloading has had a negative impact of approximately 20 per cent and that through various efficiencies 16 per cent of this has been absorbed with the taxpayer experiencing a net tax increase of approximately 4 per cent since 1992. He noted that over the past three to five periods the City has experienced net negative assessment growth, notably in the area of commercial assessment. Mr. Gazzola further noted 1998 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST- CONT'D that the 11.5 per cent increase in comprised, net of negative assessment growth, of an estimated 8.38 per cent increase due to Provincial downloading and a 2.76 increase in City expenditures. Councillor John Smola enquired as to the anticipated impact of the proposed Provincial reassessment, and Mr. Gazzola answered that based on experience, it is expected that 2/3 of the properties will increase in the 5 - 15 per cent range and that approximately 1/3 will decrease. Councillor Galloway referred to the fifteen tax policy issues to be addressed by Regional Council and the need to formulate a communications strategy in an attempt to explain to the public the complexity and impact of Provincial changes. Mr. Gazzola advised that he would ask staff to report on this issue once he receives additional information. Councillor J. Ziegler then left the Chair in order to address the issue of budget strategy and FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 23, 1998 -13- CITY OF KITCHENER Councillor Galloway assumed the Chair. Councillor Ziegler stressed the need to establish a target with regard to the 1998 Operating Budget. He acknowledged that the supposed revenue neutrality of Provincial actions is a fiction; however, Kitchener Council should strive for no increases in taxes outside of assessment related increases. Moved by Councillor J. Ziegler, "That Council establish a target of no tax increase in 1998 outside of those increases which may occur as a result of Provincial reassessment." Councillor Yantzi suggested that the City should reduce its expense portion of the increase to as close to zero as possible, but that he has a concern with making deep cuts in municipal spending to address the 8.3 per cent problem created by the Province. Mayor Zehr took exception to comments made by the Province that no increase need be passed along to rate payers as a result of Provincial downloading and suggested that it is unwise to set unrealistic reduction targets at this time. He stated that no matter how much Council may want to eliminate the need for a tax increase, setting a zero target at this time is unrealistic and he suggested defining a more reasonable target. Mr. Gazzola characterized a zero target as both frustrating and difficult to obtain, and suggested that $7.5 million in reductions can only come through service cuts and that this amount would translate into layoffs of approximately 150 people. He noted that there is always the possibility of greater administrative efficiency; however, such efficiencies take time to identify and implement. He stated that his experience over 25 years has suggested that no-one is happy with a tax increase; however, at minimum it may be necessary to live with an increase comparable to the amount downloaded by the Province. He offered the opinion that this is the year for a tax increase and that if this is done in 1998 it will set Council on the right path for the next fifteen years. He cautioned that if taxes are not increased at this time Council will be perpetuating the problem for years to come, and he encouraged them to show foresight in this regard. He assured Council that staff are prepared to work in whatever direction Council determines is appropriate. Councillor Ziegler acknowledged that Mr. Gazzola had made several good points, but suggested that some steps could be taken by the City such as reducing its capital from current allocation by $1 to $1.2 million. He acknowledged that it may be too soon in the process to discuss a zero per cent increase, but made it clear he would not support an 11.5 per cent increase, especially given the anticipated problems at the Regional level. Councillor Vrbanovic advised that in his view a zero target is unreasonable and unachievable. Notwithstanding this he noted that the Province is in a period of Iow inflation and with a fragile economy any unreasonable increase could combine with other factors and have a significant impact. He suggested that in his view a three to four per cent increase would be reasonable. Councillor Vrbanovic stressed the need to educate the public as to the predicament the Province has placed the municipality in, and the need to show leadership and work closely with employees 1998 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST- CONT'D to address the problem as best we can. Mayor Zehr suggested that the Committee defer a specific recommendation this date pending more detailed information from staff as to the options for possible and reasonable service level adjustments. Mayor Zehr referred to his recent visit to each City department and indicated he was pleased with the response he received from staff and their appreciation of the problem. He stated that he would like to empower and challenge staff to help Council make the necessary adjustments. He further suggested that in the end, Council will likely end up with a number of factors to address the problem including the possibility of some assessment growth, a possible reduction in services, increased efficiencies and a reasonable tax increase. He asked that the motion to set a zero target not be dealt with at this time. Councillor Jake Smola suggested that it is inappropriate to defer the motion under consideration as staff needs a clear idea of the target Council has in mind. He also indicated that he would be prepared to support a tax increase at the rate of inflation. On a motion by Mayor C. Zehr, it was resolved: FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 23, 1998 -14- CITY OF KITCHENER "That consideration of the motion of Councillor J. Ziegler to establish a target of no tax increase in 1998 be deferred and referred to the February 11, 1998 meeting of the Finance and Administration Committee to review the 1998 Operating Budget." Moved by Councillor J. Ziegler, "That staff recommend where a $1.17 million reduction in Capital from current can be accommodated on an annual basis over the 10 year term of the Capital Forecast." Councillor Ziegler also asked that staff determine the actual rate of inflation for the year 1997 and the estimated rate for 1998 with this information to be available at the February 11 meeting. Councillor Galloway noted that a reduction in Capital could be reversed in subsequent years and may only be time limited. The motion by Councillor J. Ziegler instructing staff to reduce capital from current was voted on and Carried. Councillor Ziegler then assumed the Chair. Councillor Galloway advised that he cannot live with an 11 per cent increase and suggested that staff investigate a multiple year recovery strategy to deal with the problem in a manner similar to that for industrial lands. He suggested the possibility of decelerating the Capital program, removing any inflationary increases for supplies, investigating possible increases in gas utility contributions or transfers from City reserve funds, operational efficiencies as well as a possible across the board budget reduction. Mayor Zehr questioned whether the City could borrow from itself and in effect phase in the impact of Provincial downloading over a number of years, nothwithstanding that there would be a compounding effect. Mr. Gazzola replied that Council can tamper with the Capital Policy but this may result in increased expenditures in the future. He also pointed out that it is easy for staff to reduce capital from current because many of these projects are not staff driven. He also suggested that another option to deal with the problem would be to increase capital debt. Ms. Houston cautioned against relying too heavily on gas utility revenues given the uncertain impact of deregulation. She noted that a $2.6 million contribution towards City projects from the gas utility is expected in 1998; however, this amount is reduced in the forecast thereafter to $2 million. Mr. Gazzola stressed the need for staff to know Council's percentage target for inflationary increases and for the increases handed to the municipality by the Province. It was agreed that the February 11, 1998 meeting scheduled to review the Operating Budget will be used as the forum to discuss strategies for dealing with Provincial downloading including a possible phasing in over a three year period. It was also agreed to defer any 1998 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST- CONT'D recommendations concerning the individual department Capital Budgets and Forecasts pending additional information from staff and the outcome of budget strategy discussions on February 11. J. Gazzola reviewed the Capital Budget and Forecast for the Public Works Department. Councillor Vrbanovic noted that the King Street project (Fairway to River Road) may have been moved by the Region to 1998, and this may require the City to adjust its Capital Budget accordingly. Mayor Zehr enquired as to the Grand River Boulevard stabilization, and Mr. Gyorffy advised that this project has been put off to 2005. Mr. Gazzola pointed out that this is a $9,000,000.00 download by the Province from the Grand River Conservation Authority to the municipality. Mr. Gyorffy commented that the timeliness of the environmental assessment has to be evaluated after five years but will not have to be redone, and though erosion continues, it is not felt to be threatening to either lives or property. Councillor Vrbanovic enquired whether there had been consultation with the property owners on the planned delay and Mr. Mansell replied that there had not and that the consultant did not have an answer as to whether properties would be seriously affected over time. Councillor Vrbanovic asked that staff follow up on this issue to ensure that there is no threat to either individuals or property. Mayor Zehr and Councillor Lorentz left the meeting at this time. On a motion by Councillor C. Weylie, FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 23, 1998 -15- CITY OF KITCHENER it was resolved: "That a budget line for Glasgow Street Improvements be added to the Capital Forecast of the Public Works Department." Councillor Galloway mentioned that given the current timing of the subdivision, the Doon Village Road Diversion does not appear to be necessary before 1999. He suggested moving the Huron Road (Trillium to Westmount) project to 1999 from 2000 and Doon Village Road to 2000 from 1999. Mr. Mansell recommended against this action based on the need to fund 40 per cent of the Huron Road project out of Capital, that being the non-residential portion of the cost. Mr. McCabe advised that he had recently met with industry representatives and the subject of Huron Road was discussed, and it was felt that the developer would not be in a position to fund the project up front. He further advised that no subdivision is presently tied into this section of road, and that the developers felt it was unreasonable for the City to assume that someone was going to pay this cost in advance of development. Mr. McCabe also suggested that the Doon Village Road Diversion is not likely to proceed for the next three to four years and that moving this project to 2000/2001 is reasonable. Mr. Mansell commented that the subdivider feels the City should front the costs and recoup these after land sales, though in the past this has generally been a subdivider cost. He further advised that the City does not have the funds to pay for this cost up front at this time. Councillor Galloway responded that it was his understanding the developer is prepared to build a structure as soon as the road is constructed. Mr. McCabe stated that Ms. Gibaut had enquired as to whether the City could loan funds to the developer, and though the matter has not been brought before Council, Management Committee raised concerns over the legality of such an arrangement. Councillor Galloway instructed that this matter be brought forward to Council at a future date. Mr. Gazzola pointed out that $4 million has been budgeted in the year 2000/2001 to construct a Downtown parking garage, and in this regard the Cora Group will approach the Finance and Administration Committee on January 26, 1998. Councillor Ziegler asked that this item be flagged for discussion at the February 11, 1998 meeting. Mr. Gazzola pointed out that in regard to the Transit Budget and Forecast, bus acquisition has been reduced by $4.6 million dollars over the ten year period. Councillor Vrbanovic enquired as to the $1 million allocation for bus garage expansion and it was explained that the current garage capacity is 120 buses and the present bus fleet is now at 114. Councillor Jake Smola 1998 CAPITAL BUDGET AND 10 YEAR CAPITAL FORECAST- CONT'D questioned whether it would be feasible to store buses outside as is done with Public Works and Parks and Recreation Department vehicles and Mr. Gazzola agreed to report back in this regard. Councillor Vrbanovic suggested that it would be easier for Council to understand the overall transit situation if, for budget purposes only, the Transit and Transit-Fleet items were combined on one comprehensive sheet. Mr. Gazzola agreed to provide this information. NEXT MEETING The next meeting of the Finance and Administration Committee to review the 1998 Budget will be held on Wednesday, February 11, 1998. ADJOURNMENT On motion, the meeting adjourned at 4:40 p.m. G. Sosnoski Manager of Corporate Records/Assistant City Clerk