HomeMy WebLinkAboutFIN-08-127 - Investing in Ontario Act Grant1
K~rc~ivER
Financial Services
REPORT
Report To: Councillor Berry Vrbanovic, Chair, and Members of the
Finance and Corporate Services Committee
Date of Meeting: September 8, 2008
Submitted By: Dan Chapman, General Manager of Financial Services
Prepared By: Dan Chapman
Wards) Involved: ALL
Date of Report: August 28, 2008
Report No.: FIN-08-127
Subject: Investing in Ontario Act Grant
RECOMMENDATION:
THAT staff be directed to develop a list of priority infrastructure projects that could be funded out
of the Investing in Ontario Act grant allocation to the City in the amount of $9,801,171; and
further
THAT Council give consideration to the list of recommended projects as part of the review of the
Capital Forecast on November 24, 2008 and make a final decision during budget approval on
January 12, 2009
BACKGROUND:
In May 2008, the Province of Ontario passed the Investing in Ontario Act. This act allows the
government to allocate a portion of any surplus to address priority needs as well as reduce the
Province's accumulated deficit. By regulation, municipal infrastructure funding was established
as the priority need and an allocation formula was outlined. On August 25, the Province
announced the year-end surplus and the allocation to municipalities, including the City of
Kitchener. This report has been prepared to outline the recommended approach to selecting
the priority City projects for funding.
REPORT:
Through regulation under the Investing in Ontario Act, the government designated municipalities
as the eligible recipients as payment for 2007-2008 and determined that any surplus between
$0.6 billion and $2.6 billion would be allocated to municipalities, with funding split between
upper and lower tiers. The Provincial surplus amounted to $1.7 billion and, in accordance with
the calculation, $0.6 billion was allocated to deficit reduction and $1.1 billion was allocated to
municipalities. The City of Kitchener will receive $9.8 million. While this funding is not
sustainable, it has the potential to advance the City's infrastructure program and enables further
progress with respect to the infrastructure deficit.
City staff was aware of the passing of the legislation and the potential to receive funding.
However, the quantum of the grant was not anticipated as the Province projected a balanced
budget as of the third quarter fiscal update in January 2008.
In light of the large value of the grant as well as many competing infrastructure priorities, staff
recommends that the allocation of the grant to specific City projects be considered as part of the
capital budget process. Review of the capital budget commences in October and concludes
with final budget approval in early January. This approach will ensure that due consideration is
given to the full range of infrastructure needs and the most appropriate projects are put forward
for funding. Options to be considered include projects related storm water management
infrastructure, the accelerated infrastructure replacement program and road resurfacing.
Deferring consideration to the budget process will not delay projects as it is unlikely that large
projects could be mobilized in time to accomodate them within the current construction season
in any event.
FINANCIAL IMPLICATIONS:
The City of Kitchener will receive $9,801,171 as a capital grant under the provisions of the
Investing in Ontario Act. Staff will prepare a list of priority infrastructure projects that could be
funded out of this allocation and will seek Council direction through the capital budget process
this fall.
Dan Chapman, CA MPA
General Manager of Financial Services