FIRST MEETING OF THE
2011 BUDGET SUB-COMMITTEE
CANADA ROOM,
MINUTES
Attendance:
|
Members: Mayor Frank Scarpitti (ex-officio) Regional Councillor Gord Landon Regional Councillor Jim Jones Councillor Don Hamilton Councillor Alan Ho
Councillors: Councillor Alex Chiu Deputy Mayor Jack Heath |
Staff: John Livey, Chief Administrative
Officer Jim Baird, Commissioner of Development Services Joel Lustig, Treasurer Andrea Tang, Manager of Financial Planning Ralph Capocci, Chief of Staff Laura Gold, Committee Clerk Kitty Bavington, Committee Clerk |
The first Budget
Sub-Committee meeting convened at the hour of
1.
WELCOME
The Chair welcomed
Members to the first meeting of the Budget Sub Committee. He advised that the
objective of having meetings in December was to help the Committee better understand
The Chair explained
that the Budget Sub-Committee meetings will be held in January and February and
that ideally the Budget will be approved by
A Member questioned the Celebrate Markham Grants that have already been approved for 2011. The Committee was advised that there are three grants that have already been approved for 2011: the Tony Roman Grant; the Black History Month Grant; and the Chinese New Years Grant. These grants will be honoured. Moving forward groups receiving grants may be requested to submit financial statements in order ensure both transparency and accountability of the funds. It was noted that all Celebrate Markham Grants should be froze at there current rate until the process is reviewed. It was suggested that it would be beneficial to have a representative from the Trillium Foundation teach the groups how to solicit funds.
2. 2011
BUDGET PRESENTATION
Andy Taylor, Commissioner of Corporate Services, advised that the objective of the presentation entitled “2011 Budget” is to brief Members on the budget process.
3.
BUDGET
PROCESS
Mr. Taylor displayed a flow chart of the budget process and reviewed the key steps of the 2011 budget process, advising that the preliminary budget has been completed at this time.
The process for Business Units to make capital requests was discussed in further detail. The Business Unit presents its accomplishment for the year in addition to its staffing needs. This helps to prioritize capital needs by creating synergy between Business Units, which encourages cross commission integrated thinking.
The Life Cycle Reserve Study was explained in further detail, explaining that the study reviews all existing fixed assets to ensure there is enough money to replace or maintain them as they deprecate over the next 25 years.
Mr. Taylor referred to projects recently endorsed by Council, such as the Integrated Leisure Plan; the Green Print Strategy; and the Diversity Action Plan, which will have implications on the Budget over the next several years.
There was a discussion regarding
the Development Charge Background Study, explaining that the study reviews
Mr. Taylor advised that typically staff will make recommendations to the Committee regarding the Budget and that the Committee will then make recommendations to the General Committee. A public meeting is then held to consult with the public and a Budget Report then goes to the General Committee for its consideration, and then to Council for approval.
A Member questioned how they should prioritize budget requests. It was explained that all budget requests other than Councillor requests have been tentatively prioritized by Staff. Councillors may make suggestions regarding something that is missing from the Budget. It was noted that staff budget requests require a report to Council.
The Chair advised that expenditures based on Council’s priorities should be given a high priority in the budget process. He advised that other priorities may be discussed by the Budget Sub Committee.
Public Meeting Discussion
Mr. Joel Lustig, Treasurer, explained that the Budget Public Meetings typically consists of a presentation regarding the Budget, a fiscal scan, budget challenges, major infrastructure projects and new programs. He noted that a majority of the focus is given to the Capital Budget, as this seems to be of greatest interest to residents. Questions at the public meeting could lead to a budget adjustment. The public meeting occurs in the evening and is advertised in the Markham Economist and Sun, A notice is also provided to the Ratepayer Associations and historically there has been a budget breakfast to provide interested residents with information on the Budget, but this practice will not be continued. A suggestion was made to go to the Community Centres to get further feedback on the Budget.
It was clarified that any changes to the Budget based on feedback at a public meeting would typically be minor in nature and that it is not difficult to make minor changes to the Budget in a short timeframe.
Key Meeting Dates
The Committee was advised of the following tentative key meeting dates (yet to be confirmed):
Budget Sub Committee
January 10, 2011 (1:00 p.m. – 3:00 p.m.)
Budget Public Meeting
February 23, 2011
General Committee
A Member noted that he would like to hold the first meeting on January 17 rather than on January 10. He also wanted to make sure that the budget process was not too condensed. Other Members wanted the meetings to be completed by March 1, as many Councillors will be taking vacation in March. It was noted that the budget schedule is typically adjusted based on need, noting these dates are only tentative. The Chair requested that Staff ensure these dates do not conflict with the Standing Committee meeting schedule.
The Committee was advised that
the latest the Budget could be completed was in May, as tax bills are sent out
at the end of June. It was clarified that that
4.
FISCAL SCAN
Mr. Taylor explained that a fiscal scan is conducted in order to help identify costs. The fiscal scan reviews wage settlement; municipal service contracts; infrastructure; growth; provincial legislation; and economic trends.
Wage Settlement
Municipal Services
Mr. Taylor anticipated an increase in the cost of municipal service contracts..
Infrastructure
The Reserve Study identified
sufficient funding for the next 25 year.
However, some costs related to stormwater management infrastructure are
not covered by the reserve fund. It is
anticipated that there will be increases to expenditures regarding stormwater
management over the next couple of years (e.g. costs associated with stormwater
ponds and downstream erosion). Staff
explained that
Creation of Infrastructure
Related Taskforce
A Member requested that a taskforce be formed to look at LED lights or energy retrofit programs. Ms. Librecz spoke about an energy retrofit project currently underway, which costs approximately $3 million dollars to improve the efficiency of the Town buildings. She noted that the project will reduce energy costs by $200,000 per year and advised that she will report on the total projected savings in the next few months.
Growth
Mr. Taylor explained that based on assumptions of future personnel needs, a ramp up fund is created, where funds are put aside over a specified number of years to avoid a large burden on the Budget in any one year. These reserve funds may be used if the project is completed earlier than expected to pay for the personnel. He confirmed that the process of ramping up funds could be used to raise funds for other types of projected expenditures.
Provincial Legislation
Fiscal impacts based on provincial legislation were discussed including: the creation of a New Town Official Plan; Council’s approval of the Accessibility Customer Service Policy; responsibilities based on the Safe Drinking Water Act; annualization of HST; and changes due to the Bill 168 - Occupational Health and Safety Amendment Act.
Economic Trends
Mr. Taylor reported inflation figures, the stock market indices, October housing sales and Ontario’s unemployment rate.
The Committee discussed the economy, noting that it is still very fragile. A Member requested that the following statistics be provided: the numbers of lost manufacturing jobs in the last four years; the number of planning applications received; recreation user fees collected; delinquency rates on water bills and property taxes; and retail vacancy rates.
It was clarified if the economy
worsens the impact on
Creation of Economic/Customer
Service Related Taskforce
The Chair advised that he would like to set up an “At Your Service Taskforce” in January to review best practices. It was noted that both the cost and benefits should be reviewed when making decisions and that expectations need to be realistic. This process may involve looking at best practices of other municipalities. A Member requested consideration of a windrow program.
5. ASSESSMENT OF PROPERTY
TAXES
The Committee reviewed charts illustrating how residential and non residential property taxes are distributed.
6. TOWN OF
6. A. OPERATING BUDGET
Mr. Taylor provided a summary of
the 2010 Budget. He explained that both the Engineering and Planning Departments
are primarily funded through engineering and planning fees. Building Services
are funded entirely by building fees. A reserve
is created in surplus years to cover expenses in deficit years. It was
clarified that operating expenses are incurred through
A review of the Budget indicated that there is very little discretionary room and that the greatest expense is salary and benefits. A Member requested a more detailed breakdown of the 2010 Budget be provided. Approximately $1.1 million dollars is raised from a 1% tax increase.
I.
2011
OPERATING BUDGET ASSUMPTIONS
Mr. Lustig reviewed the 2011 base Operating Budget assumptions.
II.
2011 – 2014
OPERATING PROJECTIONS
Mr. Lustig reviewed the Draft Operating Budget Projections for 2011-2014, explaining that the additional dollars needed each year are based on the budget assumptions. He advised that some of the additional funds needed each year are ramp-up for known increases to expenditures.
A concern was noted for the increase in the cost of personnel in regards to a certain budget item. As a result, staff were requested to review outsourcing or the contracting out of services. It was advised that this is done in engineering when there is a surge of work and that it is harder to retain and attract a contract employee. Outsourcing could also include contracting another company to do the work. Staff suggested that outsourcing works well with commercial services (e.g. waste collection), but it is otherwise difficult to protect the public interest.
Mr. Lustig reported that the
negative values shown on the Draft Operating Budget are actually reductions to
the budget based on assumptions. He
provided the example that in 2011
Staff are investigating the possibility of increasing insurance deductibles with aim of reducing insurance cost. He explained that capital induced operating cost are delayed fees (e.g. a software maintenance contract that starts the year after purchasing the software), and assessment growth helps offset other expenses.
Mr. Lustig reviewed increases to pension contributions.
Mr. Lustig reviewed the required
tax increases based on the draft Operating Budget presented, and reviewed the
projected costs associated with non-growth portion of projects. These are the costs
not covered by development charges. Advising
that Staff are thinking of creative ways to fund these projects. It was clarified that a portion of the gas
tax may be used to help absorb these costs.
The Chair hoped to continue with
6. B. WATERWORKS BUDGET
This item was deferred to the next meeting.
6. C. CAPITAL BUDGET
This item was deferred to the next meeting.
7. NEXT STEPS
This item was deferred to the next meeting.
8. PUBLIC MEETING
DISCUSSION
A motion to hold public consultation sessions in different communities in Markham (Thornhill, Milliken, Unionville, and Markham) was deferred to a future meeting, as it was thought to be too soon in the budget process to make any decision in this regard. A Member suggested it may be more manageable to put together an information package and present it to the various Ratepayer Associations. Other Members preferred to hold the public meeting at Civic Centre. Staff would look into creative ways of engaging the public on the 2011 Budget.
9. ADJOURNMENT
Moved by Mayor Frank Scarpitti
Seconded by Deputy Mayor Heath
That the first meeting of the
Budget Sub-Committee adjourn at
CARRIED