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HomeMy WebLinkAboutFCS Minutes - 2023-01-23 - Capital Budget & 10-Year Forecast Finance and Corporate Services Committee Minutes January 23, 2023, 10:00 a.m. Council Chambers - Hybrid City of Kitchener 200 King Street W, Kitchener, ON N2G 4G7 Present: Mayor B. Vrbanovic Councillor S. Davey Councillor D. Schnider Councillor J. Deneault Councillor C. Michaud Councillor A. Owodunni Councillor P. Singh Councillor B. Ioannidis Councillor M. Johnston Councillor D. Chapman Councillor A. Clancy Staff: D. Chapman, Chief Administrative Officer M. May, General Manager, Community Services and Deputy Chief Administrator V. Raab, General Manager, Corporate Services J. Readman, General Manager, Development Services J. Lautenbach, Chief Financial Officer, Financial Services D. McGoldrick, General Manager, Infrastructure Services L. MacDonald, City Solicitor B. Rowland, Director, Corporate Communications and Marketing A. Fusco, Director Legislated Services / City Clerk D. Saunderson, Deputy Clerk M. Blake, Committee Administrator M. Mills, Committee Administrator _____________________________________________________________________ 1 1. Commencement The Special Finance and Corporate Services Committee held a meeting this date commencing at 10:04 a.m., chaired by Councillor S. Davey. 2. Disclosure of Pecuniary Interest and the General Nature Thereof There were no conflicts declared. 3. Discussion Items 3.1 2023 Capital Budget and 10-Year Forecast, FIN-2023-041 3.1.a Overview by Chief Financial Officer J. Lautenbach provided opening remarks and an overview of the budget process. J. Lautenbach noted, majority of the capital budget is allocated to asset replacement and infrastructure renewal in relation to the City's forecasted growth. J. Lautenbach noted, capital costs for some projects have increased due to inflation and supply chain shortages, as such, the timeline of some projects have been adjusted to ensure costs fall within the available funding. J. Lautenbach highlighted the projects prioritized in the Capital Budget and noted these projects 3.1.b Capital Funding Sources R. Hagey reported the funding sources for the ten-year forecast of the Capital Budget. R. Hagey noted the increase in funds for development charges between 2022 and 2023 is due to the updates in the City's development charges by-law and in effect, rescoping of projects. R. Hagey noted enterprise funding also increased significantly due to projects required in the Disaster Mitigation Adaptation Fund. Further, R. Hagey spoke to the Capital Pool and described the implications of adjusting the Capital Budget on tax rates or debt. 3.1.c Debt R. Hagey reviewed the City's outstanding debt and noted the City's debt level is within the target range in terms of decreasing debt load over the last decade. It was noted the debt may need to be issued for Development Charges projects in the near future to fund growth related infrastructure. Councillor M. Johnston left the meeting at this time. 3.1.d Development Charges R. Hagey noted, the balance for 2022 development charges reserves is expected to be positive. However, due to significant growth-related projects, development 2 charges reserves are projected to turn negative for a number of years. Additionally, amendments to the Development Charges Act introduced by Bill 23 may require the City to defer growth projects or issue debt. Councillor M. Johnston re-entered the meeting at this time. The Committee requested an issue paper regarding the implications of issuing debt as opposed to utilizing development charges as a source of funding for growth projects and further, the implications of doubling debt in 2023 instead of 2024, based on the anticipated interest rates. 3.1.e Reserve Funds R. Hagey spoke to Reserve Funds balances, and the ratings and projections for each fund category. R. Hagey noted reserve balances have generally been positive, but many are below the minimum funding targets. In response to questions from the Committee, J. Lautenbach noted the Economic Development Reserve, the Economic Development Reserve 2.0, Affordable Housing Reserve and Energy Retrofit Fund account for some of the forecasted increases in reserve funds. R. Hagey noted an email will be circulated to members of the Committee outlining a breakdown of the reserve funds accounting for the forecasted increase along with a comparison the 2022 reserve fund balance. Councillor D. Chapman requested an update on the implementation of community benefits charges as a source for capital funding. In response, R. Hagey noted this discussion is anticipated to be presented to Council for consideration in the first half of 2023 however, if approved, it would be implemented in the 2024 budget. 3.1.f Capital Budget Format R. Hagey introduced the Capital Budget Pages, which included the capital forecast and investment options, issue papers and the quality of fund estimates. 3.1.g Capital Forecast and Issue Papers In response to questions of the Committee, D. McGoldrick noted the proposed budget for Urban Forestry ensures sufficient investment to achieve the tree canopy targets approved by Council. The Committee requested Staff provide a financial analysis outlining the impacts of reducing the Urban Forestry budget by $100,000/year ($1M total). The Committee inquired about increased funding to the Racialized and Indigenous Supports for Equity (RISE) grant due to significant uptake in 2022. In response to questions regarding the adequacy of funding for the two grant 3 programs, staff agreed to provide additional information related to the possibility of increased funding for the RISE and Love My Hood grants in the amount of $25K each or $50K each. The Committee discussed the necessity for technology upgrades in the Council Chambers and in Council Home Technology to facilitate improved hybrid meeting participation, video quality of meeting livestreams and sound acoustics in the Council Chamber. The Committee requested Staff provide additional information on the budget allocation for the Council Home Technology and whether the outlined amount is adequate for the technology assets required for hybrid meetings. The Committee requested an issue paper regarding the development of the Grand River Park noting the project was a propriety of the previous Council and has not made significant progress in the most recent years. Councillor S. Davey left the meeting at this time. Councillor B. Ioannidis assumed Chair. In response to questions regarding the acquisition strategy of downtown parks, R. Hagey noted there are no commitments in the parkland reserve this date. R. Hagey noted the balance of the reserve fund was $10.5 million at the end of 2022 and is expected to grow by 1 million pending no further commitments. D. McGoldrick noted Council directed Staff to bring back a report for 2023 with regards to parks and neighborhood spaces during the August Council meeting. Councillor S. Davey resumed Chair position. The Committee requested that Staff provide additional information on reallocating $300k/year from cycling infrastructure to the paving of trails. The Committee requested additional information on enhanced garbage collection options in parks and trails. D. McGoldrick noted Staff would provide an issue paper about the existing garbage collection program, cost estimates of increasing the number of garbage cans and the limitations of year-round sanitation in terms of Staffing. It was noted any recommendations arising from the meeting would be considered at a Special Council meeting later this date. 3.1.h Resolution On motion by Councillor Ioannidis 4 "That staff be directed to report and/or take appropriate action on the following matters arising from the January 23, 2023 Special Finance and Corporate Services Committee meeting relative to the 2023 Capital budget, as outlined in the chart below:" 1. Financial Planning & Reporting - Debt - Provide additional information on the possibility of borrowing internally from reserves rather than issuing debt (include the existing Capital Funding & Debt policy). 2. Parks & Cemetery - Forestry - Provide additional information regarding the impact of reducing $100,000/year ($1M total) to the Urban Forestry budget. 3. Neighborhood Programs and Services - Neighborhood Development & Volunteer Engagement - Provide additional information regarding increasing funding to the Racialized and Indigenous Supports for Equity (RISE) and Love My Hood grants ($25K each & $50K each) and how the increase would be funded. 4. Mayor & Council - Council Home Technology Budget - Provide additional information on the budget allocation for the Council Home Technology budget and whether the amount is still adequate for the term of Council. 5. Parks & Cemetery - New Neighborhood Parks - Provide additional information about the resourcing requirements and cost for the development of the Grand River Park. 6. Parks & Cemetery/ Transportation - Cycling & Trail - Provide additional information regarding reallocating $300k/year from cycling infrastructure to the paving of trails. 7. Parks & Cemeteries - Waste Management - Provide additional information on enhanced garbage collection options in parks and trails. 4. Adjournment On motion, this meeting adjourned at 1:44 p.m. Marilyn Mills Committee Administrator 5