Finance and Corporate Services

Committee Minutes

Monday, November 27, 2023 at 1:00 P.m. - 5:00 P.m.

Council Chambers - Hybrid

City of Kitchener

200 King Street W, Kitchener, ON N2G 4G7

Present:

• Mayor B. Vrbanovic
• Councillor S. Davey
• Councillor D. Schnider
• Councillor J. Deneault
• Councillor C. Michaud
• Councillor A. Owodunni
• Councillor P. Singh
• Councillor B. Ioannidis
• Councillor M. Johnston
• Councillor D. Chapman
• Councillor A. Clancy

Staff:

• D. Chapman, Chief Administrative Officer
• M. May, General Manager, Community Services and Deputy Chief Administrator
• V. Raab, General Manager, Corporate Services
• J. Readman, General Manager, Development Services
• J. Lautenbach, Chief Financial Officer, Financial Services
• D. McGoldrick, General Manager, Infrastructure Services
• B. Lam, Director, Sanitary & Stormwater Utilities
• D. Murray, Director, Technology Innovation & Services
• D. Saunderson, Deputy Clerk
• M. Blake, Committee Administrator

---

1.

Commencement

The Special Finance and Corporate Services Committee held a meeting this date commencing at 1:37 p.m.

2.

Disclosure of Pecuniary Interest and the General Nature Thereof

2.1

Councillor P. Singh - Issue Papers C11 & C39 

Councillor P. Singh declared a conflict with regards to issue papers C11 (Community Resource Centres) related to Mill Courtland Community Centre and Rockway Centre Redevelopment and C39 (Full Reconstruction) related to Franklin Street – Kingsway to Wilson, due to owning property in close proximity to the subject projects, and did not participate in any voting or discussion regarding these matters.

3.

Discussion Items

3.1

2024 Capital Budget and 10-Year Forecast, FIN-2023-511

3.1.a

Overview by Chief Financial Officer

J Lautenbach provided opening remarks and an overview of the budget process, noting the capital budget supports long-term City infrastructure investments, which includes three key priorities: strengthening city services, focusing on infrastructure, and advancing strategic goals. J. Lautenbach explained the strategic design of the capital budget, addressing asset replacement, growth-related needs, and strategic initiatives, noting the majority of the capital budget is allocated to infrastructure renewal. J. Lautenbach emphasized the impact of inflationary pressures with regards to construction related costs in the past years, and stressed the need to address capital funding requirements and shortfalls through future budgets. J. Lautenbach highlighted the projects prioritized in the Capital Budget and noted these projects align with the City’s Strategic Plan.

3.1.b

Capital Funding Sources

R. Hagey reported the funding sources for the ten-year forecast of the Capital Budget. R. Hagey noted, more than half of the capital budget funding is derived from enterprises, including Building Golf, Parking, Water, Sanitary, Storm & Gas. R. Hagey stated the Development Charges (DCs) account for 18%, while the capital pool contributes 12% to the ten-year capital funding sources. R. Hagey noted a significant change in capital budget from the previous year is the increase in the enterprise budget by $165 million, which can be largely attributed to enhanced funding for water, sanitary, and stormwater projects, as approved through the Water Infrastructure Program (WIP) update. R. Hagey also noted the structure of the capital pool funds for tax-supported capital projects, outlining four distinct components: capital out of current, debt, and transfers from the gas & hydro reserves.

3.1.c

Debt

R. Hagey reviewed the City's outstanding debt and noted the City's debt levels have been decreasing for the past decade. R. Hagey stated the City may be required to issue DC debt to fund some large dollar growth related projects in 2024-2025 

 

3.1.d

Development Charges

R. Hagey noted there has been significant reduction to DC revenues due to the changes to the City's DC By-law, followed by the changes to the DC Act through Bill 23. R. Hagey noted the impact of the changes for this year is estimated at $5.5M up to mid-November. R. Hagey stated the DC reserve balance is projected to be negative for the next few years, however, is projected to be positive in future years. 

3.1.e

Reserve Funds

R. Hagey spoke to Reserve Funds balances, and the ratings and projections for each fund category. R. Hagey noted the reserve levels are mostly positive, but many are below funding targets. R. Hagey stated the City has a long-standing reserve fund policy, and noted some key principles of the policy include: only using reserve funds for their intended purpose, maintaining positive balances in all reserve funds and even set minimum targets for each reserve. 

3.1.f

Capital Budget Format

R. Hagey introduced the Capital Budget pages, which included the capital forecast and investment options, issue papers and the quality of fund estimates.

3.1.g

Capital Forecast and Issue Papers

The Committee reviewed the Capital Forecast outlined in Appendix ‘C’ and Issue Papers CAP 01 and CAP 02 outlined in Appendix ‘F’ of the budget materials as outlined , and raised any clarifying questions related to the Capital Forecast  specific issue papers. 

Councillor P. Singh declared a conflict (with regards to issue papers C11 (Community Resource Centres) related to Mill Courtland Community Centre and Rockway Centre Redevelopment and C39 (Full Reconstruction) related to Franklin Street – Kingsway to Wilson, due to owning property in close proximity to the subject projects, and did not participate in any voting or discussion regarding these matters.)

It was noted the next meeting in the Budget process would be a Special Finance and Corporate Services later this date to receive feedback from the Public on the propose budget. Following that meeting, there would be a Special Council meeting on December 4, 2023, where the Mayor will table the 2024 budget.  Member of Council will be required to send any proposed amendments to the 2024 budget to the Clerk no later than December 11, 2023, which will then be considered at a Final Budget meeting on December 14, 2023.

4.

Adjournment

On motion, this meeting adjourned at approximately 3:25 p.m.

 

Mariah Blake
Committee Coordinator