Loading...
HomeMy WebLinkAboutFin & Corp Svcs - 2005-12-12 S FINANCE & CORPORATE SERVICES COMMITTEE MINUTES DECEMBER 12~ 2005 CITY OF KITCHENER The Finance and Corporate Services Committee met in special session this date commencing at 9:05 a.m. Present: Councillor B. Vrbanovic - Chair Mayor C. Zehr and Councillors J. Smola, J. Gazzola, M. Galloway and C. Weylie. Councillor G. Lorentz was in attendance for part of the meeting. Staff : C. Ladd, Chief Administrative Officer P. Houston, General Manager, Financial Services & City Treasurer G. Sosnoski, General Manager, Corporate Services & City Clerk A. Pappert, General Manager, Community Services R. Browning, Interim General Manager, Development & Technical Services D. Chapman, Director of Financial Planning & Reporting K. Kugler, Manager Kitchener Memorial Auditorium M. Seiling, Director of Building R. Gosse, Committee Administrator The purpose of this special meeting was to discuss the proposed Capital Budget and 1 O-Year Capital Forecast 2006-2015. In this regard the Committee was in receipt of Financial Services Department report FIN-05-043 dated November 23, 2005, attached to which were the line by line listing of all projects in the Capital Forecast by Department/Division, and a list showing all of the changes to the original Forecast that are being recommended by the Administrative Review Committee. 1. CAPITAL BUDGET AND FORECAST 2006-2015 Ms. P. Houston introduced the 10-Year Capital Forecast (2006-2015) advising that the Forecast includes any adjustments recommended by the Administrative Review Committee and that the list of adjustments is attached to the proposed Forecast. Ms. Houston reviewed the source of funding and the assumptions being made for the 2006 Capital Budget being: 20/0 assessment growth; 30/0 inflation; and, the 10-Year debt term at 70/0 interest. Ms. Houston advised that it is being proposed that the transfer from Gasworks and the Hydro Reserve, which in 2005 went directly to capital projects, be allocated to a new Gas Capital Investment Reserve Fund and the existing Hydro Capital Investment Reserve Fund then be used to fund projects when required. She also advised that in addition to the proposed new Gas Capital Investment Reserve Fund that a second new fund be established; the Business Parks Reserve Fund which will be used as a funding source for new projects related to future Business Parks. The Committee was advised that any surplus from the development of the Huron and Grand River West Business Parks would be placed in the proposed reserve and that $12 M will be allocated from the Economic Development Investment Fund to be used for the future development of industrial lands. Councillor J. Gazzola requested that staff provide information to the members of Council prior to budget day on the amount of funding from the taxpayers which was used with respect to the Huron Business Park (HBP) and all expenses, revenues and new assessment with respect to the HBP. Councillor B. Vrbanovic left the meeting and Councillor M. Galloway assumed the Chair. Councillor G. Lorentz entered the meeting. Ms. Houston advised that for the 10 Year Capital Forecast, staff have conservatively estimated the debt rate at 70/0 but this rate year-over-year will be dependent on the economy. Councillor M. Galloway requested that staff provide information on the accumulated debt charges over the past 10 years and the range of interest rates for that period of time. Ms. Houston reviewed the Capital Pool availability noting that with respect to the gas tax allocations the Federal Government agreement is for 5 years but staff for the purposes of the 10 Year Forecast have assumed that the program will be ongoing. She pointed out that some projects that would fall under the criteria for the Gas Tax Allocation were identified previous to the signing of the agreement and therefore may not be eligible for the Federal Gas Tax, and may result in the need to amend some of the project funding. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES DECEMBER 12~ 2005 - 142 - CITY OF KITCHENER 1. CAPITAL BUDGET AND FORECAST 2006-2015 (CONT'D) Councillor B. Vrbanovic entered the meeting and assumed the Chair. Ms. Houston then provided an overview of the Development Charges Projection pointing out that commencing in 2007 it is forecasted the Development Charges Reserve Fund will run at a deficit until the end of the 10 and 20 year planning periods for engineering and non- engineering services, respectively. She advised that this will create a cash flow problem within the reserve fund which may result in the City issuing debt within the fund or the need to defer or reduce in scope existing projects in order to avoid incurring a deficit. Councillor Gazzola raised a concern regarding the forecasted deficit asking if the City were to proceed with projects without development charge funding would the City be in a position of not recouping the development charge at a later date. Ms. Houston advised that it would depend on the project and whether it has been identified in the development charge study. Ms. Houston then reviewed the 10-Year operating impacts of Capital Facilities and Growth providing the projected impact of capital on the tax rate, and gave an overview of the Water, Sewer and Gas projections. Ms. Houston then provided an overview of the Economic Development Investment Fund Projection noting a slight deficit in 2006 and 2007 and pointing out the proposed $12 M investment for industrial lands. Ms. Houston reviewed the changes made by the Administrative Review Committee to the proposed Capital Budget and Forecast from the Departments and provided an overview of some last minute changes to a small number of projects. Councillor Gazzola pointed out that the 2006 Capital Budget was being proposed with no funding from the Operating Budget and suggested that in light of the new Gas Tax, the City in future consider continuing this practice in order to mitigate the impact on taxpayers. Ms. Houston replied that the proposed 00/0 from the current Operating Budget was made in order to meet the 30/0 overall budget target and should Council wish to continue this practice, projects will need to be deferred or eliminated. Mayor Zehr pointed out that the Gas Tax is being provided under an agreement and any changes regarding deferring or eliminating projects may cause problems with the City meeting its part of the agreement. Ms. Houston then proceeded to a Department by Department review of the Capital Forecast. GENERAL EXPENSES Ms. Houston pointed out a change with the Corporate Accessibility Fund explaining that the original proposal was amended by the Administrative Review Committee but after further consultation it was decided to set the allocation of funds in 2006 and 2007 at $100,000. each year. KITCHENER PUBLIC LIBRARY The Committee raised questions with respect to the need for the Customer Needs Survey, Radio Frequency Technology and technology upgrades. Ms. S. Lewis, CEO - Kitchener Public Library, responded that although the City has undertaken recent surveys the proposed Customer Needs Survey would pertain specifically to library services. With respect to the Radio Frequency Technology she advised it will allow for tracking of each item in the library's collection which in turn will allow the library to manage staffing costs and provide better customer service. Ms. Lewis added that the technological improvements are intended to cover the cost of replacing over 200 PC's including those used by the public. It was suggested by members of the Committee that the KPL needs to undertake a business plan for the Radio Frequency Technology Project and Councillor Gazzola suggested the cost of the customer service surveys should be accommodated within the Library's Operating Budget. Mayor Zehr raised a concern regarding the main Library roof being included in the Capital Forecast in 2009. Ms. Lewis responded that she was advised to identify upcoming major repairs to the existing branch in the event that a decision on the new central library has not been made. Councillor Gazzola requested that Ms. Lewis determine whether such items as elevator replacement and energy management can be financed through the library's general provision. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES DECEMBER 12~ 2005 - 143 - CITY OF KITCHENER 1. CAPITAL BUDGET AND FORECAST 2006-2015 (CONT'D) CHIEF ADMINISTRATOR'S OFFICE Councillor Gazzola requested that a member of Human Resources attend the special Finance and Corporate Services meeting on January 30, 2006 to provide information on the Employee Development Program. FINANCIAL SERVICES DEPARTMENT A discussion took place regarding the need for efficiencies with respect to meter reading and Ms. Houston advised that automated meter reading has been undertaken for some larger commercial customers but it has not extended to the common meter reading for gas, water and hydro due to changes in regulations for the hydro utility. Mayor Zehr requested that staff again investigate the idea of common meter reading for all customers of the gas, water and hydro utilities. Councillor B. Vrbanovic requested that previously circulated staff reports on the Tax and Utility System and the Corporate Integrated Financial System be re-circulated to members of the Committee. Gouncillor Gazzola requested that with respect to Fleet, staff provide members of the Committee with an account of the Vehicle Replacement Reserve Fund and the schedule used for vehicle replacement. CENTRE IN THE SQUARE Ms. Sharon McMorran, Director of Finance and Administration, Centre In The Square, advised that the technical audit undertaken at the Centre identified the need to replace the speakers in the hall and the requested capital budget will not be enough to pay for the replacement. Therefore the Centre will be undertaking a fundraising campaign to meet the shortfall. Councillor G. Lorentz questioned why the Centre has not considered an annual fundraising campaign to help offset operating and capital costs. Ms. McMorran advised that the campaigns undertaken by the Centre are directly related to specific capital projects but a member of staff will now be mandated to look after fundraising with the goal of increasing fu nds raised. CORPORATE SERVICES DEPARTMENT Councillor M. Galloway pointed out that the Central Maintenance Facility Project has been delayed and he asked if there was any merit in adjusting the Capital Forecast to reflect the actual timeline of the project. Ms. Houston responded that an adjustment could be made to the Forecast but there is still a requirement for expenditures in 2006. The meeting then recessed at 11 :03 a.m. and re-convened at 11 :15 a.m. with all members present. COMMUNITY SERVICES DEPARTMENT Ms. Houston advised of the new project in the Capital Forecast for the new Arena-Southend which was tabled previously in the Leisure Facilities Master Plan (LFMP) but has not been approved by Council. Ms. A. Pappert advised that a staff report will be submitted to the Committee on January 9, 2006 and a comprehensive report on the recommendations contained in the LFMP due in the Fall of 2006. It was agreed that a note be added to the Forecast for the new Arena-Southend stating that it was subject to the LFMP Review in 2006. Councillor Gazzola raised a concern regarding the Arena Accessibility Project questioning why this project is being forecasted in light of the new Corporate Accessibility Reserve Fund. Ms. K. Kugler, advised that the Arena Accessibility Project is a 5-Year project ending in 2007 which was established to deal with accessibility issues at the Auditorium. Councillor Gazzola raised an issue with the Kingsdale Community Centre slated for construction in 2011 and the fact that it will be the only community centre in the area. He suggested that it be moved forward in the Capital Forecast from 2011 to 2009. Ms. Pappert FINANCE & CORPORATE SERVICES COMMITTEE MINUTES DECEMBER 12~ 2005 - 144 - CITY OF KITCHENER 1. CAPITAL BUDGET AND FORECAST 2006-2015 (CONT'D) COMMUNITY SERVICES DEPARTMENT (CONT'D) advised that staff are planning to develop and present a business case for the Kingsdale Community Centre in 2006 and in doing so could analyze the impact of moving the project forward. Councillor J. Gazzola moved that the Kingsdale Community Centre Project shown in the Capital Forecast 2006 - 2015 be moved from the year 2011 to 2009. Ms. Houston advised that shifting the project will require Council to prioritize all projects in 2009 with the possibility of deferring other projects in order to balance the Capital Budget for that year. Councillor Galloway suggested that in order to make such a change, it needs to be reviewed in conjunction with the LFMP and further, that a business case should be developed in order to determine the impact. Mayor Zehr advised that he did not disagree with changing the project year but agreed to the need to look at such a change in context of the LFMP. On motion by Mayor C. Zehr - it was resolved: "That consideration of amending the Capital Forecast 2006 - 2015 by moving the project Kingsdale Community Centre (#620304007) from 2011 to 2009 be deferred to January 30, 2006 special Finance and Corporate Services Committee meeting (Budget Day) to allow time for staff to report on the impact to the Capital Forecast should the project be moved to 2009." DEVELOPMENT AND TECHNICAL SERVICES DEPARTMENT In response to questions raised by the Committee regarding the future Fire Station # 7, R. Browning advised that the City-owned property at Huron and Fischer-Hallman Roads is the preferred site and that the site was also being investigated for other uses such as a future twin-pad arena and sports tourism. Councillor Galloway raised a concern with the allocation for the Building Division renovations questioning why this project was being identified in light of the corporate plan to renovate office spaces throughout City Hall. Mr. M. Seiling advised that the $661,000. identified for renovations is required in order to accommodate the additional staff that have been approved by Council. Councillor Galloway requested that an issue paper on the proposed Building Division renovations be circulated to Council by January 30, 2006. In answer to questions regarding the Wireless Technology Project, M. Seiling advised that the technology will allow for real-time downloading of information for inspectors when performing on-site inspections. He added this will increase efficiencies and provide a better level of service and will be used in the future by Fire Prevention and By-Law Enforcement Officers. Councillor Gazzola requested further information on the Wireless Technology Project. Ms. Houston concluded the presentation advising that for the 2006 Capital Budget the Development Charges Fund will be balanced but the challenge for the City will be in future years when it is projected that the fund will be in a deficit position. She pointed out that Council will be asked to review the projects with the intent of prioritizing and possibly deferring some in order to reduce the impact on the City and borrowing costs. Ms. Houston advised that staff will provide a detailed list of the projects requiring funding from Development Charges. 2. ADJOURNMENT On motion, the meeting adjourned at 12:41 p.m. R. Gosse Committee Administrator