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HomeMy WebLinkAbout2019-12-06 Special Budget WorkshopIf this information is required in an alternate format, please contact the Accessibility Co-ordinator at 905-623-3379 ext. 2131 Special General Government Committee Minutes Date: Time: Location: December 6, 2019 9:00 AM Council Chambers, 2nd Floor Municipal Administrative Centre 40 Temperance Street Bowmanville, Ontario Present Were: Mayor A. Foster, Councillor G. Anderson, Councillor R. Hooper, Councillor J. Jones, Councillor J. Neal, Councillor C. Traill, Councillor M. Zwart Staff Present: A. Allison, G. Acorn, R. Albright, F. Horvath, R. Maciver, M. Marano, T. Pinn, G. Weir, A. Greentree _____________________________________________________________________ 1.Call to Order Councillor Neal called the meeting to order at 9:00 AM and chaired this portion of the meeting. 2.Land Acknowledgement Statement 3.Declaration of Interest There were no disclosures of interest stated at this meeting. 4.Finance Department Trevor Pinn, Director of Finance/Treasurer introduced today’s Agenda. Mr. Pinn provided a verbal report, accompanied by a PowerPoint presentation, highlighting the 2020 Budget. External Factors o Economic - The real GDP in Ontario is forecasted to increase annually by 1.5% in 2020, 1.5% in 2021, and 1.9% in 2022 o Provincial – There are many changes to legislation and policies o Planning for Future Funding Changes -- The Municipality relies on two sources of capital funding from the Federal Government and Provincial December 6, 2019 Special General Government Committee Minutes 2 Government (being the Federal Gas Tax and the Ontario Community Infrastructure Fund). The Municipality may lose about $1.8 million from the Provincial funding should they chose to change the program. Historical Trends 1% = $598,228 for the 2019 budget. Taxable Growth in 2019 = $365,853,484, providing a new revenue of $1,608,600 2019 Municipal Levy = $59,822,692 The 2020 draft budget is on point for Council's direction for the 2020 budget increase of 2% The share of the property tax bill remains as follows: 49% Region of Durham 19% School Boards 32% Municipality of Clarington Highlighted how each $100 of Clarington Local Levy is spent -- with approximately 20.45% going to Operations The Municipal budget is trending downwards with our Capital support decreasing which supports the goal of efficiency CPI is a personal indicator and does not necessary reflect the Municipality, which is often somewhat higher than that of a person. BMA Comparative Review o The 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: Socio-Economic Factors Overview Financial Indicators – The Tax Asset Consumption Ratio has been trending upwards which indicates that while Clarington may have newer infrastructure we are not keeping up. We are falling behind, but not at a rate greater than the rest of the Province. Ninety percent of Clarington's debt is Development Charges related; therefore funded by the developer for the most part. In 2017, the Municipality was at about 90% for our Tax Reserves / Capita which indicates the reserves are being used at a rate faster than that of the contributions. Also of note is that Clarington does not have an issue with tax receivables. Comparing Levy and User Fees – Comparatively Clarington residents are taxed less. Commercial and Industrial property owners in Toronto December 6, 2019 Special General Government Committee Minutes 3 pay most of the tax assessment and thus, their residential taxes are so much lower. At the moment in our area, the Development Charges are lower in Clarington than on average and, Clarington is on average with the rest of the Province with respect to Building Permits. Detached Bungalow – 2015 to 2019 report that Clarington has been relatively stable for the past 5 years 2 Storey – 2015 to 2019 -- again on average Clarington is lower than the comparator municipalities of Oshawa and Pickering Affordability of Taxes -- Clarington remains more affordable than the rest of the municipalities in the GTA and across the Province Mr. Pinn noted that staff recently undertook a project which resulted in an additional $70,000 in tax revenue. He further noted that one should ensure that they are comparing the same services when looking at the BMA Study Report. He offered to assist Members of Committee should they wish further clarification of the study and how Clarington's services parallel, or differ, with the services of other municipalities. Citizen Engagement o Introduced in 2019 was the concept of budget open houses. There were three budget workshops that were held in the Municipality with very few attendees. Mr. Pinn provided an explanation to the common question that was raised by those who did attend an open house. Asset Management The Director/Treasurer highlighted the new regulatory requirements with timelines, and noted, o Council must approve asset management plans (which will eventually include financing strategy), and o The need for increased public awareness (requirement for Asset Management Policy to be on the website) Mr. Pinn highlighted the Capital Forecast for the period of 2021 to 2024, and explained that some of the capital projects have been deferred in order to achieve the tax levy target set by Council. While the 2% target may be doable in 2020, it will become increasingly difficult in future years without deferring capital projects. The Treasurer confirmed that the Municipality should hear from the Federal Government, in response to the grant funding application for the South Bowmanville Recreation Complex, in late spring / early summer of 2020. Key Capital Forecast Items were highlighted December 6, 2019 Special General Government Committee Minutes 4 The Director/Treasure acknowledged the request to include the Kendal drainage project in the 2020 budget. Reserves and Reserve Funds The Director/Treasurer explained the following respecting Reserves and Reserve funds: o 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.). Mr. Pinn confirmed that the parkland dedication Reserve Fund is an obligatory reserve fund and has about $2.5 million in this fund. Concerns were raised that the fund is rather large and should be used for park improvements. o Reserves are not separately held fund (it is a parking lot) and does not earn interest. o Reserve Fund is a separately reported fund with income and expenses and earns interest. Mr. Pinn reminded Members of Committee that $5 million is committed to the Bowmanville Hospital Foundation. o Projected Balances of the Reserve Funds were highlighted. The totals do not include any of the 2019 receipts, and therefore are understated in the slide. o In highlighting the changes to Reserve and Reserve Fund Transfers, Mr. Pinn reported that $50,000 is being requested from the Election Reserve for a ward boundary review to be conducted in 2020. The 2020 budget also includes a proposal to undertake a new fire master plan to be funded 100% by Reserve Funds. Long-Term Debt Management The 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. Debt may be eligible for Community Benefit Charges (CBC), but the regulations regarding CBCs are not yet published. Mr. Pinn explained that funding of debt servicing costs can be Development Charge (DC) related. According to debt repayment, Clarington is trending downward and the total balance is expected to be fully repaid in 2033. The 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. December 6, 2019 Special General Government Committee Minutes 5 Mr. Pinn has estimated interest rates at 5%. In 2021 and 2022, the existing debt should be retired. 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. 2020 Departmental Budgets The Director/Treasurer provided the 2020 highlights including recommended staffing changes. The Mayor and Councillor Budget was discussed and the Director/Treasurer responded to questions. Councillor Neal left the meeting at 10:07 AM. Councillor Anderson assumed the chair. Mayor Foster arrived and assumed the chair at 10:09 AM. The Director/Treasurer continued his presentation by highlighting significant items included in each Department's 2020 budget request, and he responded to questions. o CAO Office -- In accordance with the Service Contract with the Clarington Board of Trade (CBOT), the CAO confirmed that any funding increase to the CBOT is capped at 3%. The Contract with CBOT expires December 31, 2021. Councillor Neal returned to the meeting at 10:17 AM. o Mr. Pinn confirmed he would provide details of the design costs identified for Communications and Tourism. 4.1 Recess Resolution # GG-559-19 Moved by Councillor Hooper Seconded by Councillor Traill That Committee recess for 10 minutes Carried The meeting reconvened at 10:25 AM with Mayor Foster in the Chair. 2020 Budget Submission Continued The Director/Treasurer continued to present and respond to questions regarding the highlights of the 2020 departmental budgets. o In response to questions raised regarding the Organization Review Report, Mr. Pinn confirmed that the budget highlights presented today do not incorporate any budget impacts resulting from the recommendations December 6, 2019 Special General Government Committee Minutes 6 which were included in the Organization Review report; except for the staff reduction of 1 in the CAO/Mayor's administration area. The CAO explained to Council that the objective is to roll out the recommendations as quickly, effectively and reasonably as possible. Councillor Traill left the meeting at 11:00 AM o Clerk's -- The Municipal Law Enforcement Vehicle is planned to be an electric vehicle. Councillor Traill returned to the meeting at 11:03 AM. o Engineering -- Staff are working with the Region of Durham to have 5 charging stations in the Municipality. Staff remains hopeful that 50% of the associated costs will be funded through a Provincial grant. o Operations – With respect to the Senior Snow Clearing Program, Mr. Pinn confirmed that the cost gap is growing (ie. fees charged to resident versus the contractor costs to clear), is primarily due to fee increase policy set by Council. Mr. Albright reported on LED overhead light replacement. Phase 1 has been completed. Phase 2, being the replacement of heads on existing poles in the downtowns, mariner and coach lights is planned for early 2020. This will not include the decorative lighting in Newcastle, as there is a streetscape plan that is underway which, when implemented, will include the light replacement at that time. Mr. Brake confirmed that the increased winter maintenance costs are due primarily for materials such as salt and sand costs. Mr. Allison confirmed there would not be significant Municipal costs for the re-location of the helipad, as we will be passing those costs along to other agencies. Clarington's contribution would be the temporary use of our land. Note, the use of this land will be presented to Council for approval. o Community Services – The Acting Director of Community Services committed to providing Council with confirmation as to whether or not the stairs for the outdoor pool has been included in the 2020 budget. 2020 External Agency Budgets The Director/Treasurer highlighted the 2019 budget amounts as requested by external agencies and confirmed that they all met the Council direction of 2%. Next Steps The Director/Treasurer highlighted the following next steps in the 2020 budget process: o December 24, 2019, draft budget distribution o January 10th, Special General Government Committee Meeting (External Agencies)