FIRST MEETING OF THE

2008 BUDGET SUB-COMMITTEE

 

CANADA ROOM, MARKHAM CIVIC CENTRE

OCTOBER 22, 2007

 

MINUTES

 

 

Budget Sub-Committee:

 

Councillor D. Horchik, Chair

Regional Councillor J. Heath

Councillor V. Burke

Councillor J. Virgilio

Councillor J. Webster

Councillor L. Kanapathi

Councillor A. Chiu

Mayor F. Scarpitti, Ex Officio (1:15 pm)

 

Regrets:

 

Regional Councillor T. Wong

Councillor C. Moretti

 

 

Staff

 

J. Baird, Commissioner of Development             Services

A. Taylor, Commissioner of Corporate Services

A. Seabrooke, Commission Lead & Director,

            Strategic Services

P. Loukes, Commission Lead & Director,

            Operations

B. Cribbett, Treasurer

J. Lustig, Director of Financial and Client Services

A. Tang, Acting Manager, Financial Planning

S. Skelcher, Senior Financial Analyst

J. Kee, Committee Clerk

 

 

The first 2008 Budget Sub-Committee meeting convened at the hour of 1:10 p.m. with Councillor D. Horchik in the Chair. 

 

 

1.         2008 REVISED BUDGET SCHEDULE

 

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

 

Members were advised that Budget Sub-Committee meeting have been scheduled as following for the 2008 Budget process:

 

Monday, October 22

Monday, October 29

Monday, November 12

Monday, November 26

 

The Budget Breakfast is tentatively scheduled for Tuesday, January 8, and a further meeting of the Budget Sub-Committee is tentatively scheduled for Monday, January 14.  It is expected that a presentation will be made to General Committee in mid to late January, and that the 2008 Budget will be presented to Council at the end of January or early February.

 

 

2.         BUDGET PROCESS

 

The Director of Financial and Client Services reviewed the Town’s 2008 Budget process, advising that the preliminary budget is based on a combination of the fiscal scan/economic forecast, Business Plans(growth and new initiatives), the Reserve Study, the Recreation, Library, Culture and Parks Master Plan, and Councillor Requests.  He advised that the Preliminary Budget is reviewed by the Department Heads Forum; (Capital Budget only); CCC (CAO and Commissioners’ Committee); extensively reviewed by the Budget Sub-Committee, and public input is obtained prior to Council approval.

 

 

3.         FISCAL SCAN

 

The Director of Financial and Client Services provided detailed information relating to the many budget pressures that must be taken into account.  These include: wage settlements; municipal service contracts, such as waste collection, winter maintenance and street lights; infrastructure, including repair and replacement of existing roads and facilities; growth, including ramp up for new fire station and recreation/library facility; Provincial Legislation; and economic trends, including increases in gas and hydro rates and continued phase-in of insurance increase and inflation.

 

The total operating impact of budget pressures for 2008 is estimated to be approximately $6.7 million.

 

 

4.         2008 BASE OPERATING BUDGET ASSUMPTIONS

 

The Director of Financial and Client Services advised that by following an incremental budgeting method, all accounts are at the 2007 base budget levels, of which some have been reallocated/reduced accordingly, and have also been adjusted to account for an expected increase in assessment growth of 2.75%.

 

Allowances have also been made for expected increases relating to salary and benefits on existing full time and part time staff; continued ramp-up for the second fire station; and a new ramp-up for the next community centre/library.

 

In addition, allowances have been made for contract escalations; infrastructure growth; winter maintenance requirements; insurance increase; and the tax funded Capital Program.

 

Committee queried the expected increase relating to salaries and benefits, and staff advised that $2.6 Million relates to existing staff, but does not include staffing positions in Building Standards, Planning & Design, Engineering or Waterworks.  Committee briefly discussed the Recreation, Library, Culture and Parks Master Plan, and staff advised that $450K is the ramp-up increase related to the second fire station, and the new library/recreation facility.

 

 

5.         2008 PRELIMINARY OPERATING BUDGET

 

Members had before them Appendix A, which was included in the Budget Sub-Committee Agenda package, and provided detailed information relating to the 2008 Preliminary Operating Budget.  The Director of Financial and Client Services noted that the Assessment Growth (2.75%) is much lower than in previous years.  Committee requested staff to ascertain when it had been this low in the past.

 

Members queried the loss of the YRT revenue for snow removal, and staff advised that discussions will continue with YRT staff to consider other options relating to this service.

 

Committee was advised that the projected shortfall and tax rate increase before Additional Staff would be 4.33% ($4.19M); and the projected shortfall and tax rate increase after Additional Staff would be 5.25% ($5.08M).

 

Mr. Lustig reviewed the itemized permanent full time staff requests, noting that there are a total of 13 positions to be totally tax funded in the amount of $891,193.  Six additional positions would be development fee and water rate funded.  The position of Closed Meeting Investigator was queried, and staff explained that this would not be a full time position, but would be a person on retainer/on-call for investigations. 

 

 

6.         2008 OPERATING BUDGET ADDITIONAL/DISCUSSION ITEMS

 

The Director of Financial and Client Services briefly reviewed two items that may be considered during this budget process, specifically: Library – Enhanced Service Hours; and Library Collection Improvements.  Members were advised that the projected shortfall/tax rate increase after including these items would be 5.95% ($5.76M).

 

 

 

 

 

 

 

7.         TAX RATE INCREASES (2002 – 2007)

 

The tax rate increases set by the Town were presented, ranging from 2.30% in 2002 to 3.98% in 2007.

 

Committee raised the matter of the rising cost of construction and coverage by development charges.  Members were advised that staff is currently reviewing the development charges hard services by-laws and amendments will be presented to Council shortly.

 

 

8.         2008 PROPOSED CAPITAL BUDGET - FUNDING

            SOURCES AND CAPITAL BY DEPARTMENT

 

The Director of Financial and Client Services explained the “pie” breakdown of the 2008 sources of Capital Funding, and Capital by department – ($136.1 Million).

 

In response to a query regarding 2008 funding for the East Markham Community Centre and Library, staff explained that funding is always placed in the year in which the tender is going to be awarded, and in this case there is no impact on the tax rate, as it is funded through Reserves.

 

 

9.         HIGHLIGHTS OF 2008 PROPOSED CAPITAL BUDGET

 

The Director of Financial and Client Services highlighted the 2008 Capital Budget projects, in the following areas:

 

  • Environment
  • Growth Management
  • Transportation and Transit
  • Core/Essential Services
  • Parks, Recreation, Culture, Library Master Plan/Public Safety, and
  • Diversity

 

It was noted that many of the new projects listed in the 2008 Budget relate to the Council Initiatives, stated earlier in the year.

 

The process relating to the use of the Markham Environmental Sustainability Funding for internal applications was raised.  Some concern was expressed that funding for Markham’s Tree Initiative may have come out of this fund, without the consideration of the members of the Environmental Issues Committee.  It was noted that this concern had also been raised at the last meeting of the EIC Committee, and staff had been requested to follow up and report back.

 

Staff advised that a separate report will be coming forward in the New Year regarding the Markham Tree Initiative, and it will include all financial options.

 

Committee queried the feasibility of the expansion of Milliken Mills Community Centre, and staff advised that there are no plans for this in the 2008 Budget.  It is expected that it will be considered in conjunction with both the Recreation, Library, Culture and Parks Master Plan review, and the Development Charges soft services review in early 2008, and following that review, staff will bring a report forward.

 

Committee advised that the Advisory Committee on Accessibility has made a request to have either a part-time or full-time person engaged to assist with the work of the Committee.  Staff requested that an email request be directed to either the Director of Financial and Client Services or to the Acting Manager of Financial Planning.  A dollar ($) amount will be attached to the request, and the item will be added to the list of Councillor requests for consideration.

 

 

10.       NEXT STEPS

 

The Director reminded Members to bring their Capital Budget binders to the next meeting scheduled for Monday, October 29th, as the Capital Projects will be reviewed on an exception basis.

 

Councillors A. Chiu and V. Burke advised that they will not be able to attend the October 29th meeting.

 

 

ADJOURNMENT

 

Moved by Councillor J. Webster

Seconded by Councillor A. Chiu

 

That the first 2008 Budget Sub-Committee meeting adjourn. (2:10 p.m.)

CARRIED