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HomeMy WebLinkAboutFin & Corp Svcs - 2007-01-17 SFINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 17, 2007 CITY OF KITCHENER A special meeting of the Finance and Corporate Services Committee was held at 7:10 p.m. this date. Present: Councillor B. Urbanovic, Chair Mayor C. Zehr and Councillors J. Smola, J. Gazzola, K. Galloway, C. Weylie and G. Lorentz. Staff: C. Ladd, Chief Administrative Officer P. Houston, General Manager, Financial Services & City Treasurer A. Pappert, General Manager, Community Services T. Speck, General Manager, Corporate Services D. Chapman, Director, Financial Planning & Reporting S. Adams, Director of Community & Corporate Planning J. Gillett, Committee Administrator 1. 2007 BUDGET -PUBLIC CONSULTATION Councillor B. Urbanovic welcomed members of the public advising that this special meeting was being held to consult with the public regarding the 2007 Operating Budget. He advised that the draft budget being presented has been prepared by staff with proposed increases in certain areas but the budget has not been reviewed by Council as of this date. Ms. C. Ladd provided an overview on the City's approach to Strategic Planning and provided the governance model used by the City in shaping its course and setting strategic direction. Ms. P. Houston provided an overview of how the City's budgets are developed, the revenue sources, the operating and capital expenditures, the City's debt level and, the challenges faced in developing an appropriate budget. A member of the public asked that consideration be given to apportioning a minimal amount of up to $5,000. from the funds received by the City through the Federal Gas Tax Grant to be used to consult with groups having an interest in advancing the use of alternative modes of transportation. Councillor B. Urbanovic requested that staff meet with the individual to gain a better understanding of the proposal and report back to Council. A concern was raised regarding a proposed 3% increase in municipal salaries. Ms. P. Houston noted that the City has 6 unions with staggered, multi-year contracts and the 3% represents an average increase across all contracts. She agreed to follow up with the individual on contracts coming up for negotiation in 2007. A common issue raised by those present related to the one time tax credit applied in 2006 and in particular, the fact that it is proposed to recoup the credit through this years budget. Councillor Urbanovic explained that in March of 2006 Council approved the City's 2006 Operating and Capital Budgets based on a projected surplus. In April of 2006 Council was advised that the surplus amount was much greater than anticipated and of the options available to them chose to give back a portion of the surplus as a one time credit on property taxes. The one time credit was applied through property taxes because of legislation governing municipalities which does not permit the City to send a rebate cheque to taxpayers. As this was a one time credit, in order to maintain the base budget 1.6% (amount of the credit) has to be made up in the 2007 budget and several analogies were provided to assist in better understanding of this issue. A question was asked as to how the City will handle economic downturn in terms of taxation. Councillor Urbanovic commented that historically tax increases have been below the rate of inflation and work is ongoing to continue this practice through long term planning and strategic prioritizing. Ms. P. Houston advised that while not a final determination, the 2006 surplus is projected at approximately $4.3 M which is generated primarily through new housing and development, and $3.3 M of the projected amount is already allocated back to the budget to maintain the base level. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 17, 2007 -18 - CITY OF KITCHENER 1. 2007 BUDGET -PUBLIC CONSULTATION (CONT'D Members of the public raised concerns with a projected tax increase of 5.3% given a projected surplus. Councillor Urbanovic reiterated that Council has not yet reviewed the budget and stressed that it is Council's intention during its budget deliberations to decrease the projected tax rate increase as much as possible. A member of the public expressed appreciation for the City having opted to provide a tax credit in 2006 rather than expend the funds and urged those in attendance to focus on what is needed in 2007 to keep the tax rate as close as possible to the rate of inflation. Ms. P. Houston addressed a question concerning mill rates, advising that the Province issued guidelines that encourage municipalities to move toward a 1 to 1 ratio between residential and commercial, but is not mandated. It was noted that the Region sets the tax ratio and ratio are equal across municipalities within the Region. A member of the public raised concerns in regard to funds utilized from the Economic Development Investment Fund ~EDIF) for the University of Waterloo School of Pharmacy as education is the responsibility of the Province. Another member also objected to the City's subsidizing parking for University faculty. Ms. C. Ladd advised that the University of Waterloo project was the first to receive funding of $30 M because of a sound business plan, to which the University was also required to contribute substantial investment dollars, and has already leveraged significant investment returns. Mayor C. Zehr added that the fund was designed as a long term program that would see gradual return on investments but is progressing more quickly than anticipated in producing economic spin-offs. He agreed that it should be the responsibility of the Province to fund the School of Pharmacy project; however, it was known at the outset that the Province would not contribute to the project regardless of where the school might be located in the Province. He added that the University of Waterloo has been advised that the City's contribution of $30 M is firm and no additional monies will be forthcoming. A suggestion was made that the City should give more thought to persons living on modest incomes, as well as the domino effect layoffs and/or job losses have on the economy. It was also suggested that a portion of monies slated for downtown economic investment be transferred into the proposed Environmental Fund and income tax receipts provided by the City to any citizens who may wish to donate to that fund. Councillor B. Vrbanovic noted that within the budget brief workbook there is a series of questions relating to financial planning intended to solicit public views on use of the municipal consumer price index; how assessment growth revenues should be used; areas for service enhancement or reduction fees; fee increases and improved efficiencies; best process to be used to involve citizens; and any other comments or advice relating to the 2007 budget. He encouraged all those in attendance to take time to answer the questions and submit their responses back to the City. 2. ADJOURNMENT On motion, the meeting adjourned at 9:10 p.m. J. Gillett Committee Administrator