Agenda Contents

Minutes
Budget Steering Committee



    Meeting Type:Budget
    Meeting ID:2018-11
    Meeting Date:Mon April 09, 2018 01:00 PM
    Location:Council Chambers, 360 Pitt Street, Cornwall, Ontario
    Chair:CN=Denis Carr/OU=CITYHALL/O=CityCornwall
    Prepared By:Cindy Delgreco, Financial & Risk Management Coordinator


      


    CALL TO ORDER

    Chair, Councillor Carr called the meeting to order at 1:15 pm. A quorum was present.


    ATTENDANCE

    Council Committee Members:
    Claude McIntosh, Councillor
    Elaine MacDonald, Councillor
    Leslie O'Shaughnessy, Mayor

    Maurice Dupelle, Councillor
    Bernadette Clement, Councillor
    André Rivette, Councillor
    Carilyne Hébert, Councillor
    Justin Towndale, Councillor
    David Murphy, Councillor
    Denis Carr, Councillor


    Regrets
    Mark A. MacDonald, Councillor

    Administration:
    Maureen Adams, Chief Administrative Officer
    Tracey Bailey, General Manager, Financial Services
    Paul Scrimshaw, Accounting Manager/Deputy Treasurer
    John St Marseille, General Manager, Infrastructure and Municipal Works

    Mark Boileau, General Manager, Planning, Development and Recreation
    Norm Quenneville, Manager, Glen Stor Dun Lodge
    Pierre Voisine, Fire Chief
    Geoff Clarke, General Manager, Corporate Services
    Bill Lister, Paramedic Chief
    Mellissa Morgan, Program Supervisor, Social Housing
    Len Tapp, Division Manager, Transit Services
    James Fawthrop, Division Manager, Parks and Recreation

    Danielle Watson, Supervisor of Waste Management
    Cindy Delgreco, Financial & Risk Management Coordinator


    ADOPTION OF THE AGENDA - ADDITIONS OR DELETIONS

    As there were no additions or deletions, the Agenda was approved as presented.

    Moved By: Councillor Rivette
    Seconded By: Councillor E. MacDonald

    Motion: Carried


    DISCLOSURE OF INTEREST

    No disclosure of interest was identified.


    ADOPTION OF THE MINUTES

    Motion to adopt the following Minutes as presented.

    1 March 9, 2018 Budget Steering Committee Meeting
    Click for detail --> March 9, 2018 Budget Steering Committee Meeting

    Moved By: Mayor O'Shaughnessy
    Seconded By: Councillor E. MacDonald

    Motion: Carried



    COMMUNICATION

    1 Multi-Residential Waste Credit

    Ms. Bailey noted that at the February 16th meeting, Administration was asked to provide a list of items to reduce the tax levy. Elimination of the waste credit was one of these items. The report included in the April 9th agenda provided further detail to support the recommendation to phase out this program. The City budgets $90k annually for this program.

    Councillor McIntosh asked why the program was established. Ms. Watson explained that the program started in 1989 and was intended to reimburse multi-residential property owners for tipping fees. Garbage collection is part of and collected through property taxes. This credit provides a refund for the service that multi-residential properties pay for through property taxes.

    Ms. Watson further noted that municipalities are not mandated to provide collection of multi-residential waste. For any property over 6 units, garbage collection is the responsibility of the property owner. The City of Cornwall offers (free of charge) recycle pick-up as an effort to offset the tonnage for disposal at these multi-residential properties. There is only 1 municipality that offers waste collection service to multi-residential units, and that is because they have the necessary infrastructure capable of lifting large disposal bins.

    Councillor E. MacDonald questioned if the recommended reduction would result in a reduction of 50% in 2018, 50% in 2019 and phased out in 2020. She asked if there had been push back from these owners or if push back is expected. Ms. Bailey noted that the City has only heard from 1 owner, who has provided his own recommendations. About 1/3 of the credit goes to Cornwall and Area Housing Corporation (CAHC) which represents about $35K. The City will work with CAHC through this phase out to build the additional cost into their budget.

    Councillor Towndale asked if the option of bag limits has been explored, similar to those in other municipalities. Ms. Watson responded that it is something that is being reviewed and will require further review and analysis.

    Motion to receive report as presented.

    Moved By: Mayor O'Shaughnessy
    Seconded By: Councillor Towndale

    Motion: Carried

    Ms. Bailey asked for direction on this matter. Mayor O'Shaughnessy said that the decision regarding the multi-residential waste credit would need to be made by Council. Ms. Bailey said that we would include it on Council's Unfinished Business listing and report back.

    Recommendation that Administration communicate with property owners and CAHC on the matter and report back to Council.

    Moved By: Councillor Clement
    Seconded By: Councillor E. MacDonald
    Motion: Carried

    2 Progress Fund Review

    Motion to receive report as presented.

    Moved By: Mayor O'Shaughnessy
    Seconded By: Councillor Rivette
    Motion: Carried
    Ms. Bailey explained how scenario 1 and 2 were derived when providing the information to the auditors (CKDM) and the consultant (KPMG). A brief discussion took place around the Progress Fund review report. The committee agreed it would be wise to leave the Progress Fund as it was intended.

    Ms. Bailey explained that the City will continue to look at opportunities for investment, noting that regulations for municipal investing are changing. With these options, the City looks forward to the opportunity to have the ability to earn more interest on its investments. Ms. Bailey noted that the Progress Fund is a unique reserve, and if it were utilized as a Capital Fund, it could possibly affect the financial position of the City. This same view was shared by both the City's auditors and the consultant.

    3 LTFP - Residential Taxation and Household Income

    Ms. Bailey reviewed with the Committee the Residential Taxation and Household Income report that had been deferred in order to be presented with the Progress Fund review.

    Discussion took place around Cornwall being below the Ontario average as it relates to household income. Councillor Clement commented on strategic planning and socioeconomic impacts, noting that we lose site of other components and often focus on financial aspects.

    Mayor O'Shaughnessy asked for further clarification on the graph (agenda pg.22) Residential Taxation as a Percentage of Household Income showing a 3.2% average. Ms. Bailey explained the 3.2% represents the average percentage of household income that would go towards taxation amongst the 5 comparators. It was noted that Cornwall is below the average at 2.91% of household income.

    Ms. Adams noted the graph included in this report is only a part of the Appendix of the LTFP Report prepared by KPMG and the full report is available.

    Mayor O'Shaughnessy asked to be provided with the residential taxes paid within each comparator municipality for a home valued at $250K. Ms. Adams provided the following based on the information published last year;

    Cornwall $3,977
    Brockville $3,728
    Kingston $3,447
    Belleville $4,053
    Peterbrough $3,588

    Ms. Adams explained that the housing markets within each of the comparator municipalities are very different . A home in Cornwall valued at $250K is not the same as a home valued at $250K in Kingston. Cornwall's property values are one of the lowest in the province.

    Councillor McIntosh commented that the City of Cornwall is queued for a population of 65,000 and, if we were at that level we would be sitting in a much better position. Some of the larger municipalities have more opportunity for revenue and that puts Cornwall at a disadvantage. Mayor O'Shaughnessy agreed that the services currently provided could accommodate growth and Cornwall is not seeing that growth.

    Councillor Clement asked if through a departmental audit process, the services being provide are "good value". Ms. Adams confirmed that through the Audit Committee, departmental financial and operational reviews are performed.

    Ms. Adams noted that it also depends how much we want to subsidize. What the City wants to offer and the established rates determine how much will be subsidized. Some of our services (Social and Housing), are heavily subsidized by the province.

    Ms. Adams spoke about the BMA study, and to accurately compare to other municipalities, it is better to compare components (ie. Fire Services, Transit Services) to those similar to the City of Cornwall.

    Motion to receive report as presented.

    Moved By: Councillor Murphy
    Seconded By: Councillor E. MacDonald
    Motion: Carried

    4 Budget Summary Update

    The summary of changes slide was reviewed with the Committee noting where the budget currently stands. Currently, the 2018 revised levy is at $72,482,433. This represents an annual increase of $136.27 (5.9%) to the average residential property valued at $166,771.

    Ms. Bailey noted, from the report, that consideration could be given to fund additional capital works through debt financing. Administration had identified projects currently funded from the tax base that may be funded in this manner.

    Administration suggest the following projects could be financed to reduce the tax levy by $561K:
      • $63K Lemay St. Extension - include with MW Yard project
      • $300K Traffic Signal upgrade
      • $100K Pole Replacement program
      • $25K Video Surveillance - include with the Fuel Tank project at Transit
      • $73K Corporate Email Replacement - include as part of SharePoint upgrade


    Councillor Rivette brought forward the attached letter with concerns of an increase in ticks and the potential of Lyme disease relating to the reduction in grass cutting.
    EOHU - Dr Paul Roumeliotis Letter.pdfEOHU - Dr Paul Roumeliotis Letter.pdf

    Councillor Rivette would like the Committee, based on the letter, to reconsider budget cuts to the grass cutting.

    Motion to reconsider the removal of grass cutting reductions to the 2018 budget.

    A recorded vote on this matter resulted as follows:

    Votes For = 5 Votes Against = 5

    Mayor O'Shaughnessy Councillor McIntosh
    Councillor Dupelle Councillor E. MacDonald
    Councillor Rivette Councillor Clement
    Councillor Murphy Councillor Hébert
    Councillor Carr Councillor Towndale
    Motion: Defeated
    Councillor Rivette will bring the letter forward at the Council Meeting for further discussion.

    Discussion continued around the budget update.

    Councillor Clement asked about borrowing for reoccurring items, such as the proposed projects for Pole Replacement and Traffic Signals. Ms. Bailey noted these projects would not normally be considered for financing but are the best suited projects based on those remaining.

    Mayor O'Shaughnessy asked that the items that are suggested be added to the summary of changes chart, and asked how long the term for financing would be. Ms. Bailey noted, as an example, the $63K for Lemay Street would tie to the MW Yard redevelopment. It is planned that this project would be financed over a 10 year term.

    Including the proposed items to be financed (removed from the tax base funding) changed the effect on the average residential property from 5.9% to 5.0%.

    Mayor O'Shaughnessy asked if the overall surplus of $99K from 2017 could be utilized in the 2018 budget. Ms. Bailey responded that if the Committee (and Council) approved this, the process would be to contribute the 2017 surplus to Working Reserves at year end, then in 2018 contribute from Working Reserves and include in the 2018 Budget.

    Motion to accept the changes provided by Administration ($561K to be financed, reduce the contribution to the Medical Recruitment Reserve by $50K) and to include the $99K 2017 surplus.

    Moved By: Mayor O'Shaughnessy
    Seconded By: Councillor Rivette
    Motion: Carried

    Councillor E. MacDonald asked what is the City's "room to borrow". Ms. Bailey responded that based on the LTFP it is 10% of owned source revenue or $10M. The City's current annual interest and principal payments are approximately $4.5M.

    Ms. Bailey explained that the LTFP has provided insights we haven't had before. Ms. Bailey indicated that the LTFP is very detailed and provides a great framework moving forward. She noted that there is room to borrow more funds as per the LTFP. If borrowing more funds allows the plan to move forward, then it is a step in the right direction.

    Councillor Towndale asked if the reduction for Medical Recruitment was because we lost one of our candidates. Mr. Boileau indicated one candidate selected to stay in Halifax and had to repay their portion.

    Councillor McIntosh questioned if an item could come up where the City would need to borrow prior to the end of the year. Ms. Bailey indicated that this is a possibility.

    Motion to recommend the budget to City Council at 4.86% for the tax year 2018.

    Moved By: Mayor O'Shaughnessy
    Seconded By: Councillor Hébert
    Motion: Carried


    NEW BUSINESS

    There were no New Business items.


    UNFINISHED BUSINESS

    Listing of Reports


    NEXT MEETING

    Special Council Meeting Monday, April 16, 2018 at 5:00 pm


    ADJOURNMENT

    The Budget Steering Committee meeting was adjourned at 3:00 pm.