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HomeMy WebLinkAbout2019-01-18 - Special Budget WorkshopClarington Special General Government Committee Minutes January 18, 2019 If this information is required in an alternate accessible format, please contact the Accessibility Coordinator at 905-623-3379 ext. 2131. Minutes of a special meeting of the General Government Committee held on Friday, January 18, 2019 at 9:00 AM at the Garnet B. Rickard Recreation Complex. Present Were: Mayor A. Foster, Councillor G. Anderson, Councillor R. Hooper, Councillor J. Jones, Councillor J. Neal, Councillor C. Traill (arrived at 9:36 AM and left the meeting at 12:07 PM), and Councillor M. Zwart Staff Present: A. Allison, T. Cannella, J. Caruana, F. Langmaid, A. Greentree, F. Horvath, R. Maciver, M. Marano, T. Pinn, G. Weir, H. Lynch, B. Radomski, L. Coutu, C. Carr, L. Pinto, N. Schroor, L. Kent. 1 Call to Order Mayor Foster chaired this portion of the meeting. 2 Declaration of Interest Later in the meeting, Councillor Jones declared an interest, regarding slide 92, regarding Hospital Funding. 3 Finance Department 3.1 Verbal Report from the Director of Finance/Treasurer Regarding the 2019 Budget Trevor Pinn, Director of Finance/Treasurer introduced today's agenda. Mr. Pinn provided a verbal report, accompanied by a PowerPoint presentation, highlighting the 2019 Budget. 3/,External Factors o Economic f The Director/Treasurer highlighted the economic effects due to the closure of the GM Plant in Oshawa. He explained that this may slow the housing market in parts of Durham and GTA. The Director/Treasurer noted that overnight interest rates are expected to increase 0.25% in Q3 of 2019. - 1 - Special General Government Committee Minutes January 18, 2019 o Provincial f The Director/Treasurer highlighted funding programs currently being reviewed, the impacts of the Provincial affordable housing strategy on DCs or planning rules and GO Transit and other infrastructure projects in Clarington being reviewed. 3/,Historical Trends 0 1% _ $567,600 for the 2019 budget. o Growth in 2018 = $385,481,110, providing a new revenue of $1,814,429 0 2018 Municipal Levy = $56,757,965 o The share of the property tax bill remains as follows: f 50% Region f 19% goes to School Board f 31 % remains with Clarington o Highlighted how each $100 of Clarington Local Levy is spent BMA Comparative Review 3/4The Director/Treasurer informed Council that a link to the electronic copy has been forwarded to Council. In reviewing the BMA Study, he covered the following: o Socio -Economic Factors Overview o Financial Indicators o Comparing Levy and User Fees — Commercial and Industrial in Toronto pay the vast majority of tax assessment in TO and thus their residential taxes are so much lower. At the moment in our area, the Development Charges are lower. o Property Taxes o Residential Tax Rate o Detached Bungalow — 2008 to 2018 0 2 Storey — 2014 to 2018 o Affordability of Taxes 3/,Mr. Pinn noted that staff recently undertook a project which resulted in an additional $70,000 in tax revenue. Citizen Engagement 3/42019 Citizen Budget Survey o The Director/Treasurer reported on the results of a survey that was posted on the Municipal website regarding "how would you build a budget?" This survey was not about satisfaction, but rather an attempt to seek input from residents as to where they feel funding should be allocated. The results, based on the 131 responses, concluded that, more or less, the respondents wanted to maintain existing spending levels. Mr. Pinn received feedback from Members of Council regarding the value in the survey, and acknowledged that, while the responses are relatively few, staff remain committed to taking every opportunity to engage the residents in the budgeting process. Basia Radomski, Manager of Communications, -2- Special General Government Committee Minutes January 18, 2019 agreed to provide members of Council information related to the analytics of the survey engagement. Asset Management 3/4The Director/Treasurer explained that the Asset Management Plan was received in fall 2017 to meet the requirements of funding agreements and that a Q1 2019 — Inter -departmental working group was established. He mentioned that a draft Strategic Asset Management Policy is currently going through the review process. 3/4The Director/Treasurer highlighted the new requirements for Council: o Must approve Strategic Asset Management Policy o Must approve asset management plans (which will include financing strategy eventually) o Increased public awareness (requirement for AMP to be on the website) Recess Resolution #GG -001-19 Moved by Councillor Traill, seconded by Councillor Anderson That the Committee recess for 10 minutes. Carried The meeting reconvened at 10:12 AM with Mayor Foster in the Chair. Reserves and Reserve Funds 3/4The Director/Treasurer explained that Obligatory Reserve Funds are shown as deferred revenue on the balance sheet. He noted that they are a legislative or contractual obligation (i.e. Development charges, gas tax, etc.). 3/4Reserves are not separately held fund (it's a parking lot) and does not earn interest. 3/4Reserve Fund, separately reported fund with income and expenses and earns interest. 3/4Projected Balances of the Reserve Funds were highlighted. Long Term Debt Management 3/4The Director of Finance/Treasurer continued with his presentation, highlighting debt and Clarington's repayment schedule. Debt is a tool to be used strategically on capital only with a maximum debt servicing costs of 25% of own source revenues, and the Municipality can only issue debts through the Region of Durham. He explained that funding of debt servicing costs can be Development Charge (DC) related. According to debt repayment, the total balance is expected to be fully repaid in 2033. -3- Special General Government Committee Minutes January 18, 2019 3/4The Director of Finance/Treasurer highlighted the policy being developed for debt management, and that the asset management strategy will drive priorities for projects which will impact timing of potential debts. 3/41n response to questions raised by Council, the CAO briefly explained the strategic plan process and confirmed that it will result in a more comprehensive plan identifying priorities and related costs and funding details to assist Council in setting their priorities and timing thereof. The Treasurer confirmed that the goal also is to consolidate the various Plans into one comprehensive Financial Plan which takes into account the DC Study, the Asset Management Plan, the strategic plan and any master plans. 2019 Departmental Budgets 3/4The Director/Treasurer highlighted the 2019 requests and recommended staffing changes. The historical funding policy (which has not be followed by Council), was briefly discussed and the CAO confirmed that he would appreciate the concept of receiving approval for a funding envelope and allowing the CAO to ultimately decide the staffing priorities, rather than Council directing the individual positions to be approved. %In accordance with the Service Contract with the Clarington Board of Trade, the CAO confirmed that any funding increase to the CBOT is capped at 3%. The Contract expires December 31, 2021. 3/4The CAO provided a brief explanation of the manner in which IT related priorities are deliberated and determined by the IT Steering Committee 3/4With respect to the budget format, the Director/Treasurer confirmed that the budget policy, which is to be considered by Committee next week, will continue to provide Council with options. 3/4The Director/Treasurer, along with input from Department Heads, continued his presentation by highlighting the 2019 preliminary budget, and advised Members of the external agencies draft requests. Currently the operating budget is estimated to be less than 3%. o Emergency Services — In response to questions raised by Members of Council, the Director of Emergency and Fire Services confirmed that Clarington's staffing structure is different than other career departments. At this time, the staffing priority, when fully staffed, is as follows: Station 1 (Bowmanville)-- 5 F/T fire fighters per each 24 hour shift, Station 4 (Courtice) — 5 F/T fire fighters per each 24 hour shift, and Station 2 (Newcastle) -- 4 F/T fire fighters per each 24 hour shift. At this time, Station 2 is typically staffed with 3 F/T per shift. The Chief also confirmed there is a volunteer truck at all stations and the policy is such that a truck may not leave the station with fewer than 3 with a maximum of 5. The Chief further confirmed that, at times in the rural stations, there is a poor response time from volunteers during the day. Emergency Services does currently respond to the Highway 407 calls, but have received very few calls recently. The Chief will be working with the CAO to determine a reasonable timeline for the next Master Fire Plan update. The Special General Government Committee Minutes January 18, 2019 Director/Treasurer confirmed that a newly constructed fire station could be 100% funded through DCs. o Engineering — The Director of Engineering confirmed that the planned Outdoor Recreation Needs Study will contemplate a full variety of outdoor recreation activities. o Operations —Staff are looking at setting up an ongoing reserve/reserve fund for "cleanup" in the event we experience a similar emergency situation as we experienced with the flood in 2017. As well, Finance will be working with the Director of Operations to create a winter maintenance reserve to assist in funding in years where winter maintenance is in greater demand. The Director of Operations reported that the parks survey is about 80% complete and the results will be included in the 2019 budget. o Community Services — In response to questions raised regarding the design and construction of a new recreation facility in south Bowmanville, the Director of Community Services explained the cost estimates are between $35 and $50 million and therefore is a project that must be carefully planned and constructed to ensure it is done correctly. Staff anticipate that the design would be done in 2020/2021, with an estimated 18 month construction period, it is reasonable to expect the facility to be open in 2024. The Director briefly explained the unique challenges for Clarington given that there are three urban centres demanding their own facilities. Recess Resolution #GG -002-19 Moved by Councillor Neal, seconded by Councillor Traill That the meeting be extended for 10 minutes beyond the scheduled break of 12:00 noon; and That, at the conclusion of the current discussion, Committee recess for 15 minutes. Carried Councillor Traill left the meeting. The meeting reconvened at 12:29 PM with Mayor Foster in the Chair. 2019 Departmental Budgets - continued 3/4The Director/Treasurer continued to highlight the 2019 requested Departmental budgets. -5- Special General Government Committee Minutes January 18, 2019 2019 External Agency Budgets 3/4The Director/Treasurer highlighted the 2019 budget amounts as requested by external agencies. Councillor Jones declared an interest in the Hospital Funding budget (Slide 92) as she is an employee of Lakeridge Health. Councillor Jones left the meeting and refrained from discussion and deliberation on this matter. 3/4The Director/Treasurer and CAO responded to questions raised concerning the $5,000,000 request from Lakeridge Health to assist in funding the Bowmanville Hospital expansion. Councillor Jones returned to the meeting. Modernizing the Financial Framework 3/4The Director/Treasurer described the various policies that he and the Finance staff are currently reviewing as well as new policies he is developing which will be presented to Council over the next few months. Staff anticipate various Provincial policy changes, but at this time there is very little information available from the Province. Next Steps 3/4Mr. Pinn briefly mentioned the proposed Budget Policy which is being presented to Council on Monday, January 21 st. the proposed policy does not drastically change our historical budget process however, it will be presented with the perspective of sustainability, predictability and understandability. 3/4The Director/Treasurer highlighted the following next steps in the 2019 budget process: o February 5th, draft budget binder distribution o February 15th, Special General Government Committee Meeting (External Agencies) o February 19th, Special General Government Committee (Budget) o February 25th, Council Meeting with Budget Ratification 3/4The Director of Finance/Treasure concluded his presentation by providing a summary of the Tax Levy and the impacts on the 2019 Budget. Currently, the draft budget sits at 4.3% -- all in. All municipalities, except Pickering, are looking at increases of more than 4%. Mayor Foster encouraged all members of Council to take the time to meet with the Department Heads to discuss their budgets. 4 Adjournment Resolution #GG -003-19 Moved by Jones, seconded by Hooper That the meeting adjourn at 12:51 PM. Mayor Special General Government Committee Minutes Carried -7- January 18, 2019 Municipal Clerk