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HomeMy WebLinkAboutFin & Corp Svcs - 2008-01-07FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 7, 200$ CITY OF KITCHENER The Finance and Corporate Services Committee met this date commencing at 7:05 p.m. Present: Councillor B. Vrbanovic, 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 R. Browning, General Manager, Development & Technical Services D. Chapman, Director, Financial Planning & Reporting S. Adams, Director of Community & Corporate Planning M. May, Director, Communications /Marketing R. Regier, Executive-Director, Economic Development H. Gross, Director, Project Administration & Economic Investment M. Selling, Acting Director, Building Services D. Keehn, Interim Director, Aquatics & Athletics J. Billett, Committee Administrator 1. 200$ OPERATING BUDGET -PUBLIC CONSULTATION SESSION Councillor B. Vrbanovic welcomed members of the public advising that this meeting was being held to consult with the public regarding the 2008 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. Council will review the 2008 Operating Budget at a special meeting of the Finance and Corporate Services Committee on January 14, 2008. Ms. P. Houston presented 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. It was noted that details of the draft budget were published in the Your Kitchener newsletter, advertised in The Record and posted to the City's website, inviting public comment. Two e-mail transmissions were received as a result and circulated this date for information of the Committee. At the request of Councillor J. Gazzola, Ms. Houston agreed to provide for Budget Day a chart demonstrating the differential between the Consumer Price Index and the Municipal Price Index commencing with the year 2002 and going forward. In regard to household comparisons among the three Cities in the Region, Mayor C. Zehr commented on the natural gas line item. He noted that it is higher for the first time this year than the other two Cities, in part, due to the practice of Union Gas providing more frequent and retroactive adjustments. Ms. Houston advised that the City's practice has been to provide stability in its rates by making adjustments once a year and anticipated a reduction would be realized when next adjusted in April /May 2008. She added that the overall accumulative effect of the City's practice since it began purchasing independently has saved customers over $24M in respect to supply rates. In regard to the City's Accelerated Infrastructure Program, Ms. P. Houston pointed out that staff is recommending the pre-2004 replacement rate of 2.66 km per year be increased to 8.67 km per year in order to achieve the City's goal of replacing all linear infrastructure 80 years in age by 2032. Councillor G. Lorentz inquired if staff is pursuing trenchless technology similar to the City of Waterloo. Mr. R. Browning advised that staff is in the process of investigating use of trenchless technology and has been involved in a number of co-operative projects with the City of Waterloo. He gave assurance that consideration of trenchless technology and co- operative approaches with the City of Waterloo will continue. Mr. Ed Redgwell, resident, raised concerns with respect to the Economic Development Investment Fund (EDIF) established in 2004 at $110M. He stated that he had received information advising that the University of Waterloo project at Victoria and King Streets would cost $145M and questioned how this and other projects targeted for the fund would be paid for FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 7, 200$ - 2 - CITY OF KITCHENER 1. 200$ OPERATING BUDGET -PUBLIC CONSULTATION SESSION tCONT'D) when this project is already in excess of $110M. He voiced concern that $32.5M is still targeted for the library, expressing the opinion that it was clear from the previous year's deliberations that a new central library in the Downtown was not supported by the public. He alleged difficulty in obtaining information respecting the EDIF fund, stating that it was his understanding monies were being borrowed over a 15-year period to fund EDIF. He questioned the actual cost of the fund, suggesting that the City needs to be more informative in this respect. Ms. P. Houston advised that $110M is the total amount of funding available in EDIF for special projects, which is being raised by special capital levy over a 10-year timeframe that commenced in 2004. She stated that the delegation was correct that issuance of debt occurs each year to create the funding, which is repayable over a 15-year period and with interest owing does increase the cost of EDIF over $110M. She pointed out that details of the fund have been made public in each year's budget package and a breakdown of the fund is again provided in the 2008 Capital Budget package, which is available on the City's website for public viewing. Mayor C. Zehr stated that he had advised the delegation that approximately $145M in new construction has been leveraged relative to the University of Waterloo's Health Sciences Campus project; of which, the City's total contribution has been capped at $30M, to be funded from EDIF. The remainder of this project will be funded through the University's investments (ie. University operating /capital budgets and fundraising). Mr. Redgwell requested a written outline of how the project is being funded. Mayor Zehr pointed out that this is a project of the University of Waterloo and in that respect, he was not able to provide specific details in respect to how the remaining funds will be raised beyond the City's contribution. Following further discussion, it was agreed that efforts would be made to obtain project funding information from the University of Waterloo. In respect to EDIF funds targeted for the library, Mayor Zehr clarified that Council chose not to proceed with construction of a new central library on the Downtown Centre Block site but did support pursuing an improved /enhanced library system. He pointed out that the $32.5M set aside for the library is earmarked for a library project which is yet undefined and no contract has been let. Councillor G. Lorentz advised that he had visited the delegation at his residence and had provided him with an extensive package of information compiled by the City's Chief Administrator. Mr. M. May added that since establishment of the fund, the City has provided substantial information to the public on EDIF, including but not limited to: numerous publications in the Your Kitchener newsletter; publication of a special brochure, available on-line; and inclusion of detailed information in the City's Annual Reports. Mr. David Ryrie, resident, encouraged the City to set aside appropriate funding to acquire lands in Hidden Valley to preserve and protect the natural areas for future generations. He raised concerns with rising oil costs as they relate to impact on the City's Accelerated Infrastructure Program and encouraged acceptance of staff's recommendation to increase the replacement rate to 8.67 km per year. He then referenced proposed retention pay for Firefighters and questioned if this would have an impact on other City bargaining units and whether or not the City was budgeting accordingly. Mr. Ryrie also stated a preference for tiered rates as they relate to water and sewer rate increases. Councillor B. Vrbanovic advised that the issue related to Firefighters is still in arbitration and the City is awaiting the outcome. Ms. C. Ladd added that the City is not budgeting for similar circumstances among other bargaining units but rather their salary forecasting is based on a system of pay fairness using a salary survey method whereby pay ranges are compared to that of other municipalities. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 7, 200$ - 3 - CITY OF KITCHENER 1. 200$ OPERATING BUDGET -PUBLIC CONSULTATION SESSION tCONT'D) Mr. Vernon Bowman, resident, questioned the existence of the $32.5M targeted for the library. Ms. P. Houston advised that the $32.5M is part of the $110M EDIF special capital levy, earmarked in years 2009, 2010 and 2011, and as such has not yet been levied. Councillor Vrbanovic added that EDIF is a 10-year program with each special project being one component and each component being funded in differing years. Mr. E. Redgwell put forward a suggestion that consideration be given to removing the $32.5M from EDIF and reallocating those funds to the City's Accelerated Infrastructure Program. 2. ADJOURNMENT On motion, the meeting adjourned at 8:30 p.m. J. Billett Committee Administrator