FIRST MEETING OF THE

2009 BUDGET SUB-COMMITTEE

 

CANADA ROOM, MARKHAM CIVIC CENTRE

OCTOBER 27, 2008

 

MINUTES

 

 

Budget Sub-Committee:

 

Councillor D. Horchik, Chair

Regional Councillor T. Wong

Deputy Mayor J. Heath

Councillor V. Burke

Councillor E. Shapero

Councillor J. Webster

Councillor L. Kanapathi

Councillor A. Chiu

 

Regrets:

 

Regional Councillor J. Jones

Councillor C. Moretti

 

 

Staff

 

J. Livey, Chief Administrative Officer

J. Baird, Commissioner of Development             Services

A. Taylor, Commissioner of Corporate Services

B. Librecz, Commissioner of Community and

            Fire Services

B. Cribbett, Treasurer

S. Laing, Director, Human Resources

J. Lustig, Director of Financial and Client Services

A. Tang, Manager, Financial Planning

J. Kee, Committee Clerk

 

 

The First 2009 Budget Sub-Committee meeting convened at the hour of 1:00 p.m. with Councillor D. Horchik in the Chair. 

 

 

 

1.         2009 BUDGET SCHEDULE & BUDGET PROCESS

 

Mr. Joel Lustig, Director of Financial and Client Services, briefly reviewed the Agenda for the Budget Sub-Committee meeting this date.

 

Members were advised that Budget Sub-Committee meetings have been scheduled as follows for the 2009 Budget process:

 

Monday, October 27

Monday, November 3

 

 

Monday, November 24, and

Monday, December 8th

 

The Director of Financial and Client Services reviewed the Town’s 2009 Budget process advising that the preliminary budget is based on a combination of the fiscal scan/economic forecast, Business Plans Incorporating E3, the Reserve Studies, the Recreation, Library, Culture & Parks Master Plan, Councillor Requests, and the Development Charge Background Study.  He advised that the preliminary budget is reviewed by the Department Heads Forum (Capital only); the CAO and Commissioners’ Committee; and extensively reviewed by the Budget Sub-Committee, and public input is obtained prior to Council approval.

 

The Chair advised Members that a meeting has been scheduled at Noon on November 3rd, prior to the Budget Sub-Committee meeting at 2:00 p.m.

 

 

 

2.         FISCAL SCAN

 

The Director of Financial and Client Services provided detailed information relating to the many budget pressures and economic environment that must be taken into account when preparing the current budget.  These include: wage settlements; municipal service contracts, such as winter maintenance, street lights and waste collection; infrastructure, such as stormwater management, cycling & pathway system, landfill, and non-growth share of development charges hard services; growth, such as the ramp up for the new fire station and the next library/recreation facility; provincial legislation, such as compliance with the Customer Service Standard Act (Accessibility) and compliance with the Safe Drinking Water Act; and economic trends, including: inflation, stock market indexes and fluctuating gasoline prices.

 

An additional factor impacting the Budget for 2009 is the E3 Initiative, endorsed by Council in June of 2008.  The E3 objective is to review services to find as many efficiencies as possible, to maximize revenue opportunities, and to minimize tax rate increases while maintaining a focus on customer and staff satisfaction.  Mr. Lustig advised that the total operating impact of budget pressures for 2009 is estimated to be approximately $8.6M.

 

Members queried the following items relating to the budget pressures:

 

  • total funding for stormwater management ponds maintenance, and stormwater management
  • personnel requirements for second library/recreation facility and potential for re-deployment of staff through E3 process; staff will look at opportunities, however, ramp-up is still required
  • Canadian Sports Institute Ontario ramp-up – placeholder currently

 

3.         2009 PROPOSED OPERATING BUDGET

 

2009 Base Operating Budget Assumptions

 

The Director of Financial and Client Services advised that by following an incremental budgeting method, all accounts are at the 2008 base budget levels, of which some have been reallocated/reduced accordingly, and have also been adjusted to account for an expected increase in investment income, and assessment growth of 2%.

 

He also advised that allowances have been made for expected increases relating to salary and benefits for existing full time and part time staff; ramp-up for the East Markham Fire Station, and the next library/recreation facility.

 

In addition, Mr. Lustig advised that allowances have been made for contract price escalations; winter maintenance requirements; insurance; and the ramp-up for the Canadian Sports Institute Ontario (CSIO).

 

 

2009 Preliminary Operating Budget

 

The Director of Financial and Client Services reviewed the 2009 Preliminary Operating Budget Summary, with detailed Revenues, and detailed Expenditures, excluding Building Standards, and Waterworks.  Committee was advised that the projected shortfall and tax rate increase is currently at $6.86M and 6.68% respectively.

 

 

Options to Reduce the Operating Budget Shortfall

 

Mr. Lustig noted that E3 Initiatives to date have increased revenues by $0.76M, and reduced expenditures by $2.02M, providing a total Budget impact of $2.78M and thus reducing the projected shortfall and tax rate increase to $4.08M and 3.98% respectively.

 

Committee noted that any additional E3 initiatives would further reduce the projected shortfall.

 

 

 

4.         2009 PROPOSED CAPITAL BUDGET

 

Funding Sources

 

The Director of Financial and Client Services explained the “pie” breakdown of the funding sources of the 2009 Proposed Capital Budget, as follows:

  • development charges & development fees - $59.9M (56.3%)

 

 

  • life cycle replacement & capital reserve - $16.3M (15.4%)
  • reserves/reserve funds - $12.5M (11.7%)
  • infrastructure grant - $8.3M (7.8%)
  • other/external - $3.6M (3.4%)
  • roads & bridges grant - $3.3M (3.1%)
  • gas tax - $2.4M (2.3%)

 

 

Expenditure Types

 

The Director of Financial and Client Services reviewed the 2009 Proposed Capital Budget, totalling $106.3M, by “expenditure types”.

 

In response to a query of Committee, staff advised that a presentation is going to Development Services Committee regarding the schematic design for the East Markham Community Centre & Library on October 28th, and that the total project cost estimate for the entire project remains at $70.4M.  It was noted that $14.5M is included in the 2009 Budget, as it is expected that the project tender will be awarded in 2009.

 

There was some discussion regarding the Engineering projects, new roads/infrastructure, etc., and staff was requested to prepare detailed information for the next meeting separating each of the engineering capital projects between new roads and other infrastructure/studies.

 

In response to Committee’s request for more information, staff advised that they will be reviewing, in detail at the next meeting, the mechanics of the Life Cycle Replacement & Capital Reserve Fund.

 

 

Highlights of the 2009 Proposed Capital Budget

 

The Director of Financial and Client Services reviewed the highlights of the 2009 Proposed Capital Budget by categories, as follows:

 

- Environment

- Growth

- Transportation & Transit

- Service levels

- Parks, Recreation, Culture & Library Master Plan/Public Safety

- Diversity

 

 

 

 

 

Committee queried the projects and related funding for the waste management initiatives, suggesting that the dollar amount appeared low, given the number of initiatives listed.  Staff advised that details will be presented at the next meeting with respect to the programs and expenses.

 

Members raised questions relating to the following projects:

  • Trees For Tomorrow, and funding for other plantings
  • Environmental Sustainability Fund – current status and top-up
  • Canadian Sport Institute Ontario (CSIO) – status of consultant approval
  • Safe Streets Strategy – more details requested; staff will provide the details during the review of engineering projects
  • Other – detailed information will be presented at the next meeting.

 

The line item, “Second Fire Station”, was raised, and Committee requested staff to change all future reference to “East Markham Fire Station”.  In addition, it was noted that it is most important that details be presented to Committee and the public with respect to how operating cost savings will be monitored with the upgraded standards, higher quality design, and cost-saving technology for new buildings, including the fire station.  Reporting methods regarding the reduction of operating costs, how the Town is capturing and evaluating them, investment vs payback, both short term and long term, will be presented at a future meeting.

 

In response to a request by Committee as to whether there would be information presented on how the 2009 Budget correlates to Click With Markham, staff advised that a presentation will be given on this matter when presenting to the public.

 

Moved by Regional Councillor T. Wong

Seconded by Councillor J. Webster

 

That the presentation given by the Director of Financial and Client Services respecting the 2009 Budget Schedule; Budget Process; Fiscal Scan; 2009 Proposed Operating Budget; and 2009 Proposed Capital Budget, be received.

CARRIED

 

 

 

5.         NEXT STEPS

 

Members were advised that the next meeting of the Budget Sub-Committee is scheduled for the following date, and all Members are to bring their Capital Budget Binders to the meeting:

 

Monday, November 3rd, 2008

2:00 p.m. to 4:00 p.m. in the Canada Room

 

The Chair reminded Members that a brief meeting has been scheduled at Noon on November 3rd prior to the Budget Sub-Committee meeting at 2:00 p.m.

 

 

 

ADJOURNMENT

 

Moved by Councillor V. Burke

Seconded by Councillor L. Kanapathi

 

That the First 2009 Budget Sub-Committee meeting adjourn. (2:00 p.m.)

CARRIED