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HomeMy WebLinkAbout04/12/1999 (Special) J MUNICIPALITY OF arington ONTARIO SPECIAL GENERAL PURPOSE AND ADMINISTRATION COMMITTEE DATE: APRIL 12, 1999 TIME: 1:00 P.M. PLACE: COUNCIL CHAMBERS 1. ROLL CALL 2. DISCLOSURES OF PECUNIARY INTEREST 3. REPORT (a) TR-15-99 - 1999 Capital Budget and Four Year Forecast Opening Remarks - Chair - Chief Administrative Officer - Treasurer Presentations - Bowmanville Museum - Clarke Museum and Archives - Clarington Public Library Board - Director of Public Works - Director of Community Services - Fire Chief - Property Manager 4. UNFINISHED BUSINESS 5. OTHER BUSINESS 6. ADJOURNMENT CORPORATION OF THE MUNICIPALITY OF CLARINGTON 40 TEMPERANCE STREET - BOWMANVILLE -ONTARIO - L1C 3A6 - (905) 623-3379 - FAX 623-4169 RECYCLED PAP THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON REPORT SPECIAL GENERAL PURPOSE AND ADMINISTRATION COMMITTEE April 12, 1999 TR-15-99 1999 CAPITAL BUDGET AND FOUR YEAR FORECAST It is respectfully recommended that the General Purpose and Administration Committee recommend to Council the following: 1 . THAT the 1999 Capital Budget be approved as proposed in TR-15-99. 2. THAT Council considers the priority #1 and priority#2 requests, as outlined on Attachment #1. 3. THAT Council approve the four-year forecast in principle. BACKGROUND AND COMMENT: 1.0 Timing: 1.1 As in 1998, the 1999 Capital budget is presented separately from the current budget, due to delay in finalization of assessment information from the Province. The current budget is scheduled for presentation to the General Purpose and Administration Committee meeting on May 3, 1999, with ratification, by Council on May 10, 1999. 2.0 Recommended Capital Projects (non-controllable): The Capital Budget presented includes only a few items for Council consideration, which will add to the tax base. The projects are essential to maintain the efficient continuation of municipal services and programs. All items proposed as non-controllable maintain the existing level of service; the only change is the recommended support of these projects from the tax base. Prudent financial management dictates adding to the tax base in a reasonable incremental manner in order to accommodate REPORT TR®15-99 PAGE 2 normal capital programs such as those identified below. The impact of these capital items are summarized on Attachment #1 . Of particular concern to senior staff: is the heavy draw on various reserve funds in the last few years in order to maintain a no tax increase position. The reserve funds have been eroded to a point where their balances will no longer support the magnitude of charges / expenditures that have been provided for regular replacement type capital projects as identified below: I. Computer-Financial / Tax System / Y2K: In 1998, Council committed adding $150,000 to the tax base in each of at least 3 years, to accommodate the replacement of the financial system. This system provides for all corporate financial requirements including the general ledger, (linked to the tax system), accounts receivable, accounts payable, purchase order encumbering and many other support modules. As explained to Council in 1998 the existing system has been made Y2K compliant, with a custom written transitional program, which will allow delay of the replacement until the year 2001 , at an approximate cost of $850,000. The recent reallocation of 100,000 of the 1998 funds set aside for this project for the Fire Dispatch System may extend the budgetary commitment for financial systems for an additional year. The 1999 Component of the project has been included in the Capital budget presented. II. Fleet replacement: The Public Works Department maintains all fleet and replaces them on a schedule that maximizes use of vehicles at minimal cost. However, the cost on one major piece of snow plowing equipment can be in excess of $200,000. Generally 2 or 3 pieces of equipment of different varieties and cost, must be replaced annually to maximize their benefit. In the past the cost of this equipment was subsidized from the Province by 50% or more. This grant was eliminated several years ago and the Reserve has REPORT TR®15-99 PAGE 3 not been replenished in order to maintain the zero percent budget over the past six years. The Reserve is now in a position where it can not support normal equipment purchases. Consequently, $150,000 has been included in the budget to accommodate normal fleet requirements. If this budget item is not provided, the result will be to extend the life of the present equipment such that it ends up costing more in repairs than replacement would have been. It is therefore essential to accommodate this in the 1999 Capital budget. III. Parkland Cash-in-lieu Reserve Fund Uses: Property Management: The Municipality owns and maintains in excess of 20 facilities. The cost attributed to the normal replacement of windows, furnaces, roofs etc. has been primarily funded from the Parkland cash-in-lieu Reserve Fund in the last few years in order to maintain a zero percent budget impact. Community Services: The Community Services Department capital has virtually had no tax support for the last few years and has funded essentially all program equipment and program facility needs from the same Parkland Cash-in-lieu Reserve Fund. The main use of the Parkland cash-in-lieu Reserve Fund should be directly to purchase lands for future Community Parks. This is also a requirement of the new Development Charge legislation. The reserve account has been drawn down substantially and if not replenished, will severely jeopardize the Municipality's ability to purchase parkland to meet future needs. In addition, unlimited drain on this reserve for property maintenance and recreational equipment replacement is no longer sustainable. Therefore, it is recommended that the Property Management and Community Services program equipment requirements be funded to a maximum of $50,000 each from the Parkland cash-in-lieu Reserve Fund, for approximately 5 years, with the tax base to accommodate REPORT TR-15-99 PACE 4 an equal amount. The balance of their respective Capital works and programs, will be funded from the existing Reserve Funds for this purpose, which also have only minimal balances left over from the old Lot Levy Reserve Funds. 3.0 Additional Capital Considerations: There are a minimal number of items, which have either been referred by Council to the budget for consideration, or have been identified by Staff as being important for Council to consider. These items have been categorized into priority #1 and priority #2 ratings, and they are identified with their household impact on Attachment #1. The priority #1 projects are described below, and the priority #2 items are more or less self- explanatory and will be discussed during the relevant department's capital budget presentation. 3.1 Skateboard Park — In addressing some of the youth concerns and demands, Council referred, through report WD-51-98, the proposed Skateboard Park at the Rickard Recreation Complex to the 1999 Capital Budget. This item represents a different type of recreational activity in the Municipality, strongly supported by both staff and council, and is therefore considered to be a priority #1 item. The total cost of this item was projected at $190,000, however, because the project is identified in the Development Charge Capital program for 50% funding, it is only costing the tax base 50 cents for each $1.00 spent. 3.2 Transfer to Reserves & Reserve Funds for Capital Purposes: A) In 1998 the Roads Pavement Program was given priority since it was demonstrated that at least $300,000 per year must be applied to road maintenance, otherwise deterioration would cost in excess of eight times as much to reconstruct rather than to maintain the same roads. This program was accommodated in the 1998 zero REPORT TR-15-99 PAGE 5 percent budget by reducing the transfer to the Municipal Capital Works Reserve Fund. In 1999, the commitment to the roads program must be maintained, and the Reserve Fund transfer is recommended to be phased back in over 3 years, with $100,000 applied to the 1999 tax base. B) Reserve Account for Property Acquisition: Several years ago Council endorsed a property acquisition program which provided that sale of surplus property would be used to offset the purchase and capital improvements of buildings and land. The inactive economy has not enabled this to take place. Consequently, purchases such as the LCBO property and much of the waterfront properties have been funded from the already depleted Parkland Cash-in-lieu Reserve Fund and other Reserve Funds. Therefore, it is recommended that a transfer in the amount of $75,000 to the Reserve for Acquisition of Real Property be incorporated into the 1999 tax base. 4.0 Museums and Library: The Library and Bowmanville Museum have maintained the same tax impact as in 1998. The Clarke Museum has requested $10,000 be considered for Computer System Hardware, Microfilm Printer, etc. Clarke Museum did not make funding recommendations, however consideration might be given to 50% tax funding and 50% from the Clarke Museum Reserve Fund. 5.0 Conclusion: 5.1 The 1999 Capital budget has been prepared on a conservative basis, with an attempt to provide the residents of Clarington with the maximum effectiveness of their tax dollar. The total recommended programs including the priority#1 items such as the Skateboard Park can be accommodated for a total household tax impact of approximately $2.00 REPORT TR-15-99 PAGE 6 per month. 5.2 With respect to the current budget a report will be presented to the General Purpose and Administration Committee on May 3, 1999. Staff would like to advise at this time that there are several uncontrollable known tax impacts such as negotiated settlements with local unions, 24 hour fire protection in Courtice, nuclear emergency training etc., which Council should be aware of. Respectfully submitted, Reviewed by, n arie A. Marano, H.BSc., A.M.C.T., Franklin Wu, M.C.I.P., R.P.P. Treasurer Chief Administrative Officer MM/km Attachment #1 — Summary of 1999 Capital Budget Impact DN:99Taxincrlpg2] Report TR15-99:Attachment#1 SUMMARY OF 1999 CAPITAL BUDGET IMPACT Priority#1 % 1 $Annual I CosVHousehold Increase 1per Item I Annual Monthly 1998 Tax Base (rounded) 14,680,000 [Cumulative] Non-Controllable Items: a) Financial System Replacement[committed in 981 150,000 b) Fleet Replacement-for purchases in 1999 150,000 c) Property Management Capital-building repairs 50,000 d) Community Services Capital-program equipment 50,000 e) Other Misc. Depts. Less than$5,000 each 13,000 Sub-total 1 413,000 2.81 $ 15.08 $ 1.26' Priority#1 Items for Consideration f) (Skateboard Park[50%funded from Dev.Charges] 95,000 3.46 3.47 $ 18.55 $ 1,55' g) Capital Transfers to Reserves: i) Road Repair Program funded from Mun.Cap.Works 100,000 4.14 3.65 $ 22.21 $ 1.85 ii) Municipal Acquisition of Property[Incl.waterfront] 75,000 4.65 2.74 $ 24.94 $ 2.08 Clarke Museum -new addition to tax base 5,000 4.69 0.18 $ 25.13 $ 2.09 275,000 Priority#2 Items for Consideration Public Works: 1)CCC walkway/lighting 72,000 5.18 2.63 $ 27.76 $ 2.31 11)Soper Creek grass infield 100,0001 5.86 3.65 $ 31.41 $ 2.62 NOTE: Every$146,000 will add 1%to the Tax Base Every 1%adds$5.to the Household Cost