Loading...
HomeMy WebLinkAboutFinance & Admin - 2001-02-02 SFINANCE & ADMINISTRATION COMMITTEE MINUTES FEBRUARY 2, 2001CITY OF KITCHENER The Finance and Administration Committee met this date in special session, commencing at 10:00 a.m., Chaired by Councillor J. Ziegler with the following members present: Mayor C. Zehr and Councillors M. Galloway, G. Lorentz, J. Smola, B. Vrbanovic and C. Weylie. Others Present:Ms. P. Houston, Ms. G. Luciantonio, and Messrs. J. Gazzola, J. Shivas, S. Gyorffy, F. Pizzuto, R.W. Pritchard, B. Stanley, D. Quinn, M. Grummett and G. Sosnoski. The purpose of this special meeting was to further review the Committee’s 2001 Capital and Operating Budget recommendations, and to address several outstanding issues. 1. 2001 OPERATING BUDGET AND CAPITAL BUDGET/FORECAST Committee members were in receipt of a draft Finance and Administration Committee report summarizing all Committee budget recommendations to date. Ms. P. Houston outlined the recent provincial Market Value Reassessment and its anticipated impact on local taxpayers. She advised that the reassessment utilizes values as at June 30, 1999 and will be used for the years 2001 and 2002. She noted that overall, property values in Kitchener have increased by an average of 7%. She also noted that property tax shifts will occur both between various classes of properties and between area municipalities within the Region of Waterloo. Ms. Houston advised that the impact of Bill 140 (5% capping legislation) is unclear at this time as staff are still awaiting the accompanying Provincial Regulations, which they are hoping to receive by May of this year at the latest. She noted that average household assessment in Kitchener has increased from $129,000. to $138,000., while household assessments Region-wide have increased from $138,000. to $147,000. She added that the majority of changes will involve the eastern and southern portions of the City where the majority of new development is taking place. Mayor C. Zehr noted that Market Value Reassessment does not have an effect on the City’s Operating Budget, even though property owners will be affected by shifts between the various property classes. He stressed that it is important to remember that the City derives no economic benefit from reassessment as these shifts are Provincially initiated and are revenue neutral. Councillor Lorentz suggested that Finance staff consider putting either the entire Market Value Reassessment presentation, or selected portions, on the City’s website. Ms. Houston agreed to investigate the feasibility. Ms. Houston advised that based on Committee recommendations, the increase in the levy is now 4%, net, of assessment growth of 1.09%. She then reviewed the recommendations and issues relative to the 2001 Capital Budget and Forecast. Ms. M. Walsh and Mr. J. Grant were in attendance on behalf of the Kitchener Public Library Board and the Centre in the Square, respectively. The Committee ratified its earlier recommendations in respect to the Operating and Capital Budgets of the two organizations. Ms. Houston reviewed the changes previously made by the Finance and Administration Committee in respect to the Capital Budget, noting that staff have incorporated the community centre expenditures previously directed by Council. She further noted that funding for the Heritage Property Grant program, approved by Council on January 29, 2001 has been incorporated as well as the Doon Village Road (Bechtel to Tilt) project which is now being funded in 2001 and 2002. Ms. Houston further noted that the Wabanaki Drive street improvements (Fairway to Goodrich) have also been included in 2001 and the street improvements to Weber Street (Shantz to Kinzie) have been deleted as they are not required at this time. She advised that the Budget assumes a $2.4 million Superbuild Grant, and if the City does not receive this amount staff will have to investigate other funding sources. She also noted that $200,000. in funding for the Kitchener Memorial Auditorium Complex wall cladding is being transferred from the Auditorium Ticket Sales Reserve Fund. She further advised that the Hydro Capital Investment Reserve Fund has been incorporated into the Budget. Ms. Houston reviewed the development charge projections for the next five years, noting that funding is restricted and that the Development Charge By-law is to be reviewed in 2004 for implementation in 2005. FINANCE & ADMINISTRATION COMMITTEE MINUTES FEBRUARY 2, 2001- 29-CITY OF KITCHENER 1. 2001 OPERATING BUDGET AND CAPITAL BUDGET/FORECAST (CONT’D) The Committee was in receipt, this date of the following staff reports in response to previous Committee direction: · Corporate Services Department report CRPS-01-009 (R.W. Pritchard) dated January 25, 2001 concerning proposed office renovation expenditures in the Fleet, Human Resources and Utilities Divisions; · Public Works Department report PW-00-12 (S. Gyorffy) dated January 23, 2001 concerning a proposal for additional funding for the reconstruction for the Sandrock Greenway from McGarry Drive to Hillbrook Crescent; · additional information from M. Grummett concerning implementation of a new City website strategy; · a memorandum from P. Ferraro, Manager of Training and Workplace Safety, dated January 25, 2001 concerning the impact of the new Safety Specialist position on future insurance premiums; · Finance Department report FIN-01-002 (P. Houston/G. Luciantonio) dated January 16, 2001 concerning the budgeted decrease for payments-in-lieu of taxes and linear properties; · Finance Department report FIN-01-004 (P. Houston/G. Luciantonio) dated January 22, 2001 concerning the salary progression concept; · Business and Planning Services Department report BPS-01-015 (B. Stanley/P. Houston) dated January 25, 2001 requesting an extension to the position of Compass Kitchener Project Co-ordinator. Councillor G. Lorentz spoke in support of the proposed work involving the Sandrock Greenway, stressing the need to begin the project now with the expectation that it can be completed by City Winter Works staff. Ms. Houston noted that the $120,000. amount required to hire a private contractor could be debited from the Hydro Capital Investment Reserve Fund. On motion by Councillor G. Lorentz – : it was resolved “That additional funding in the amount of $120,000. be provided in the 2001 Capital Budget of the Public Works Department to permit completion of the reconstruction of the Sandrock Greenway from McGarry Drive to Hillbrook Drive, funding to be from the Hydro Capital Investment Reserve Fund; and further, That the firm of Totten Sims Hubicki be retained to provide additional engineering services for the project at an estimated cost of $12,000.” Councillor Smola spoke in support of the Community Mobilization Project proposed for the portion of the City bounded by Frederick, King, Sterling and Simeon Streets. Council was in receipt of a memorandum from Hugh C. Russell, Community Justice Consultant, dated January 25, 2001 outlining the project. Councillor Smola explained that the parameters would be similar to the Louisa Street initiative funded in 2000, and would cost approximately $20,000. He suggested that consideration be given to providing funding for similar projects throughout the City on an on-going basis. Mr. Stanley suggested that projects of this type could be accommodated through the existing Community Infrastructure Program. He noted that the neighbourhood would receive a grant, and the project could be accommodated in 2001. FINANCE & ADMINISTRATION COMMITTEE MINUTES FEBRUARY 2, 2001- 30-CITY OF KITCHENER 1. 2001 OPERATING BUDGET AND CAPITAL BUDGET/FORECAST (CONT’D) On motion by Councillor J. Smola – : it was resolved “That $20,000 be included in the 2001 Capital Budget to fund a Community Mobilization Initiative involving Downtown neighbourhoods and as outlined in a memorandum from Hugh C. Russell, Community Justice Consultant, dated January 25, 2001; and further, That prior to or during 2002 Budget deliberations, Council give consideration to including an amount to fund such initiatives on an ongoing basis.” Councillor G. Lorentz noted that $3 million has been budgeted in respect to the Ralgreen settlement, and advised Council that the first meetings have been held and it is hoped a consultant will be hired shortly. On motion by Councillor B. Vrbanovic – it was resolved: “That Council approve the 2001 Capital Budget and Forecast as recommended by the Finance and Administration Committee and amended this date.” On motion by Mayor C. Zehr – it was resolved: “That the 2001 Budget for Reserves and Reserve Funds, save and except the Tax Stabilization Reserve Fund, be adopted, as recommended by the Administrative Review Committee.” The Committee then reviewed its recommendations in respect to the 2001 Operating Budget. Ms. Houston advised that the proposed levy as presented to the Committee, including vacancy rebates, initially totalled 5.38%. The changes made by the Committee to date reduced this amount by .29% to 5.09%. When assessment growth of 1.09% is included the proposed tax increase stands at 4%. Ms. Houston reviewed the outstanding issues highlighted by the Committee at it’s previous meeting and referred to the staff reports submitted in response. She further advised that at present the water/sewer rates have been budgeted at no increase over 2000. In the event the Region of Waterloo approves a rate increase when its budget is adopted in March, flatlining of the rate would have to be reconsidered. Councillor B. Vrbanovic disclosed a pecuniary interest and abstained from all voting and discussion concerning the issue of bingo licence revenue as he is involved in an organization which receives revenues from bingos. Council considered Business and Planning Services Department report BPS-01-015 (B. Stanley/P. Houston) recommending extension of the contract for the position of Compass Kitchener Project Co-ordinator. Councillor Vrbanovic spoke in favour of the recommendation and stressed the need to provide effective support for the Compass Kitchener Committee and to follow through on commitments made by Council to date. The Committee considered a possible change in the funding level for Festival of the Night. Mr. Pizzuto stated that at present $63,000. has been budgeted and referred to other funding options. On motion by Mayor C. Zehr – : it was resolved “That funding for Festival of the Night remain at the current budgeted level with staff to report on funding options to the Finance and Administration Committee in June of 2001, at which time the funding level will be reviewed.” FINANCE & ADMINISTRATION COMMITTEE MINUTES FEBRUARY 2, 2001- 31-CITY OF KITCHENER 1. 2001 OPERATING BUDGET AND CAPITAL BUDGET/FORECAST (CONT’D) On motion by Mayor C. Zehr – it was resolved: “That the position of Compass Kitchener Project Coordinator be extended to February 28, 2002.” The Committee considered the 2001 gapping target of the Chief Administrative Officer, this being the amount of savings to the City as a result of delaying the hiring of staff. Ms. Houston advised that the actual savings due to gapping in 2000 were $600,000. with the target set by Council at $100,000. Mayor Zehr acknowledged the gapping initiatives have an impact on service levels, but noted that a $100,000. target appears to be too low. Ms. Houston advised that a large percentage of the savings in 2000 relate to large, one-time occurrences due to re- organizations in the Community Services and Business and Planning Services Departments. She suggested that a target of $200,000. in 2001 would likely be attainable. On motion by Mayor C. Zehr – it was resolved: “That the 2001 gapping target of the Chief Administrative Officer be increased from the budgeted amount of $100,000. to $200,000.” The Committee then considered the impact on licensing revenues should Council agree to an earlier request of the Charities Bingo Palace to reduce the Licence Fee percentage. Mr. Sosnoski advised that the report and survey requested by Council will be presented to the Finance and Administration Committee on February 5. In response to further questions he advised that every one-percent reduction in the bingo license fee percentage corresponds to approximately $100,000. in revenue. It was generally agreed to consider this item and any possible reduction at the February 5, 2001 Finance and Administration Committee meeting. The Committee then reviewed various projections in respect to the Tax Stabilization Reserve Fund reflecting a variety of transfers and levy increases. Ms. Houston cautioned that committing too large an amount to reduce taxes at this time will reduce the ability to respond to unbudgeted expenditures in future years. She suggested that from a staff standpoint a scenario which maintains a year-end balance in 2005 of no less than $9.5% would be appropriate. She also pointed out that the 2% tax rate increase in 2001 which was used to calculate the various tax stabilization reserve scenarios would now be reduced to 1.82% net of all changes as a result of further reduction to date. On motion by Mayor C. Zehr – it was resolved: “That Council approve an increase in the 2001 tax rate of approximately 1.82% and endorse, in principle, the Tax Stabilization Reserve Fund scenario resulting in a Fund year end balance in 2005 of approximately $9.5M as shown on slide #36 of the screenprints distributed on February 2, 2001.” Councillor Lorentz asked that Finance staff provide an indication of the overall tax rate increase including Regional and Education taxes once these amounts are known. Mayor Zehr also expressed an interest in receiving an outline of the tax and utility rate comparisons between municipalities in the Region. He suggested that if these comparisons are to be meaningful they must include both gas and hydro rates, including the private sector gas rates which correspond to those charged by Kitchener Utilities. He further suggested that in order to be completely accurate the private sector utility rate amounts would also have to include consideration of any dividends paid back to shareholders. Mayor Zehr suggested that it is irresponsible and biased to show utility rates only for Kitchener when comparing the municipality to others in the Region. He further noted that it is incorrect to suggest that utilities are directly funding Downtown and other specific projects, and expressed frustration that this connection continues to be made. Mayor Zehr pointed out FINANCE & ADMINISTRATION COMMITTEE MINUTES FEBRUARY 2, 2001- 32-CITY OF KITCHENER that the only reason other municipalities are not able to utilize this level of funding is that their Hydro utilities 1. 2001 OPERATING BUDGET AND CAPITAL BUDGET/FORECAST (CONT’D) were not as efficiently run as Kitchener-Wilmot Hydro. He stressed that Kitchener continues to have the lowest gas and hydro rates throughout most of the Province. Councillor Ziegler noted that this utility benefit would be lost to the residents of Kitchener in the event of a one-tier municipality. Councillor Vrbanovic asked that staff prepare a comparison showing taxes, gas and hydro rates for the Cities of Kitchener, Waterloo and Cambridge, if possible by the February 5, 2001 Finance and Administration Committee meeting. Councillor Ziegler noted that the comparison suggested by Councillor Vrbanovic would be more meaningful and realistic if staff waited until Cambridge and Waterloo formally adopt their respective budgets. The recommendations of the Finance and Administration Committee in respect to the 2001 Operating Budget and Capital Budget and Forecast stood referred to the Special Council meeting of this date. 2. ADJOURNMENT On motion, the meeting adjourned at 11:30 a.m. G. Sosnoski City Clerk