SECOND MEETING OF THE
2011 BUDGET SUB-COMMITTEE
CANADA ROOM,
MINUTES
Attendance:
|
Members Present: Councillors Present: Regrets: |
Staff Present: |
The
second Budget Sub-Committee meeting convened at the hour of
An email was sent to Members with the 2011
Budget Sub Committee meeting schedule.
Councillors were requested to submit their budget requests to Ms. Andrea
Tang, Manager of Financial Planning, by
Members will receive their Capital Budget Binders tomorrow.
1.
REVIEW OF MINUTES
Moved by Councillor Don Hamilton
Seconded by Regional Councillor Jim Jones
That the Minutes of the December 15, 2010 Budget Sub Committee be adopted as presented.
CARRIED
2.
CAPITAL ( from Budget Sub-Committee
# 1 presentation)
A pie chart of the 2010 Capital Budget funding sources was reviewed. It was noted engineering costs have historically driven up the cost of the Capital Budget and that the first $500,000 of assessment growth goes directly into the operating budget to fund the capital program.
The 2010 Capital Budget expenditure types were reviewed.
It was clarified that in 2010 $8.6 million dollars was spent on general community centre repairs and Recreation Infrastructure Stimulus Programs. There was also $6.0 million spent on renovations to the Thornhill Community Centre, noting this was a special project funded by the Infrastructure Stimulus Grant. Some of the community centre repairs included enhancing the buildings energy efficiency. It was explained that some projects are included in the budget based on the Life Cycle Reserve Study and condition assessments.
Examples of expenses associated with waterworks were provided: watermain replacement; sewer upgrades; and cement relining.
Examples of expenses associated with Information Technology were provided: phase two of installing radio and wireless technology at Civic Centre; phase one of upgrading the phones at Civic Centre; and the purchase of Corporate Intelligence Scanning software, which scans invoices directly into the system eliminating the need for data entry.
It was clarified that it cost 6.1 million dollars to open Cornell Fire Station, which included the cost of purchasing equipment.
3.
REVENUE STREAMS
Mr. Andy Taylor provided a review of
3. A.
POWERSTREAM (INTEREST & DIVIDENDS)
It was reported there is an annual revenue stream of $2.8 million dollars from PowerStream interest income that goes to the Life Cycle Replacement and Capital Reserve Fund. The projected dividend from PowerStream is expected to be from $3.7 million dollars to $4.8 million dollars from 2011 to 2013.
3.B. MARKHAM ENTERPRISE CORPORATION (MEC)
It was reported Markham Enterprise
Corporation (MEC) is a wholly owned subsidiary of
3. C.
It was reported Markham District Energy
Inc. (MDEI) is wholly owned by MEC.
MDEI provides heating and cooling to building developers and
owners. Currently, there is an annual
revenue stream of $300,000 from MDEI interest that goes into the Life Cycle
Replacement and Capital Reserve Fund.
There was a question regarding the lease agreement with the Bell Data Centre located at 8100 Warden. It was clarified that the Town gets the rental revenue and MDEI gets the service revenue.
The importance of placing PowerStream dividend revenue into the Life Cycle Replacement and Capital Reserve Fund was noted. It was thought that Markham should be proud of its prudence as many municipalities do not have a 25 year Life Cycle Replacement and Capital Reserve Fund.
It was clarified that a Town policy directs the amount of money directed into the Life Cycle Replacement and Capital Reserve Fund. Staff provide regular updates to Council regarding the status of the Life Cycle Replacement and Capital Reserve Fund. It was suggested that an outside organization that operates at arms length should review the Life Cycle Replacement and Capital Reserve Fund. Additionally, it was noted that the Life Cycle Reserve Study needs to be reviewed every year to keep up with emerging costs, such as the creation of a more intense urbanized park.
A Member inquired if Markham has Accumulated Depreciation. It was explained that Markham shows its assets on the balance sheet at historical costs, noting there is still a gap between the depreciation and the market value of replacing the asset.
It was noted that
4.
LIFE CYCLE RESERVE STUDY
Members were advised that the Life Cycle Reserve Study was created to address funding requirements for ongoing capital replacements and preventive maintenance of capital assets over its useful life. The assets included in the Life Cycle Reserve Study were reviewed. A flow chart displaying the inflows and outflow of funds from the Life Cycle Replacement & Capital Reserve Fund was discussed.
It was noted that in some years there are greater inflows than outflows and other years there are greater outflow than inflows. Staff was able to reduce the outflows by reviewing all the maintenance and replacement of assets required by the study, for example $23.6 million was saved by extending the life of Town owned vehicles and equipment. Additionally, $42.2 million dollars was saved by implementing a pavement preservation program.
Discussion on Assets
not included in the Life Cycle Reserve Study
Members were advised
that flood control is currently not covered under the Life Cycle Reserve Study.
It was noted that a resolution was made at Council to bring Thornhill to the
100 year storm protection level, which was defined as a 1% (1/100)
chance that a storm of a certain intensity will occur
in a one year time period. The same level of protection
must then be provided to other areas of
A study is being conducted to develop a strategy to cover the cost of upgrading the standard of Markham’s stormwater management system, as improvement costs are not covered by the Life Cycle Replacement and Capital Reserve Fund.
A Member questioned if new developments should require a higher level of stormwater management protection than previously requested. It was suggested stormwater management issues should be reviewed, including the long term effectiveness of having stormwater management ponds. As having stormwater management ponds may not be a best practice.
5.
WATERWORKS
It was explained that
A Member suggested offering residents an incentive for increasing their water efficiency. Staff were requested to advertise/communicate to water users various ways of improving their water efficiency.
Staff were requested to compare Markham’s $2.4164 m3 with neighboring
municipalities water and wastewater rates.
This information was requested to be included in the report going
forward to the General Committee on
Currently all users pay the same rate. Members were advised that Staff are in the process of reviewing different models for determining the water and wastewater rates. It was anticipated this will take seven or eight months to complete.
5. B. 2011 PROPOSED WATER
RATE INCREASE
It was reported that
Key Dates regarding the 2011 Proposed
Water Rate Increase
Members were advised of the following key dates
(yet to be confirmed):
6.
NEXT STEPS
The next meeting of the Budget
Sub-Committee will be held on
7.
ADJOURNMENT
The second meeting of the Budget Sub Committee adjourned at 3:50 p.m.