Committee of the Whole - Township of Strathroy-Caradoc

1MUNICIPALITY OF STRATHROY-CARADOCCouncillor Brennan, ChairMINUTES OFCOMMITTEE OF THE WHOLEFINANCE MEETINGMONDAY, DECEMBER 12 th , 20115:30 P.M.COMMITTEE ROOM52 FRANK STREET, STRATHROYAGENDA1. ROLL CALL (All cell phones, pagers, etc. are to be turned off.)Present:Also present:Mayor Joanne VanderheydenDeputy Mayor Brad RichardsCouncillor Marie BakerCouncillor John BrennanCouncillor Dave CameronCouncillor Steve PelkmanCouncillor Larry CowanCouncillor Steve DausettCouncillor Neil FlegelRalph Coe, Chief Administrative OfficerAngela Toth, Director of Corporate Services/ClerkJane McPherson, Director of Financial Services/TreasurerKerry Maloney, Assistant Corporate Services DirectorStephen Riczu2. DECLARATIONS OF PECUNIARY INTEREST - None3. ACCOUNTS RECEIVABLE WRITE OFFSThe Director of Financial Services (DFS)/Treasurer provided a reportregarding three (3) outstanding invoices issued prior to 2011 that arenot collectible. Eventhough the accounts would be removed from theCommittee of the Whole Finance Minutes Dec 12 11

2books, if the circumstances change attempts will be made to recoverthe amounts owed.Moved by Councillors Dausett and CameronTHAT: Finance Committee recommends approval to write-offinvoices totaling $145.55 based on the report dated November 30 th ,2011 from the Director of Financial Services/Treasurer.Carried.4. 2012 DRAFT BUDGET OVERVIEW UPDATEThe Chief Administrative Officer and the DFS/Treasurer reviewed thesubject update circulated with the agenda package showing theimpact on taxation is an increase of 6.2%; made up of increases tooperations and maintenance 3.23%, debt 2.37% and taxation andadjustments 3.90%, and a reduction in capital of 3.31%.The changes in tax dollars required is currently $740,284 which is6.2% more than what was budgeted for 2011. Tax rates wouldincrease 1.49%. The latest assessment statistics reflect a 4%increase. Based on the estimates rates for 2012, a house assessedat $200,000 will increase in value to $208,000 and the resultingincrease would be $78.01, or 5.81% for the municipal portion.In response to questions posed at the November 28 th meetingregarding recommended levels for reserves and reserve funds amunicipality should have, the DFS/Treasurer checked with ourauditor and was provided with the following information:- Capital reserves/reserve funds should equal theaccumulated depreciation/amortization.Our reserves are estimated to be $10.2 million by the end of 2012,and by this recommendation they should be $76.4 million. We couldachieve this level if we were to raise $ 4 million per year which wouldcover our yearly depreciation/amortization costs. We currently don’traise any tax dollars towards this.- Future Needs Reserve should be 5 -15% of taxationrevenues.This reserve is established by accumulating any yearly surplus, andprovides a buffer in the event of an unforeseen expense. Based onthis recommendation we should have $1.2 million in that reserve,and we have only $20,000. We have been using money from thisfund to offset tax increases over the last few years.- Accumulated depreciation/ amortization should beapproximately 30% of our capital assets.Ours is 37%. This means that we aren’t spending quite enough oncapital projects to keep up with the growing depreciation on ouraging infrastructure.Committee of the Whole Finance Minutes Dec 12 11

3FINANCIAL INDICATOR REVIEWThe Ministry of Municipal Affairs and Housing prepares a FinancialIndicator Review yearly. Total Reserves and Discretionary Reservesare expressed as a percentage of Operating Expenses. In 2009 wewere at 58.6% with the median for our group being 64.8%. At theend of 2012 we will drop to 34%. This trend is pushing us to a higherrisk level. Members were concerned with the information dating backto 2009 and asked that up-to-date indicators be provided as soon asthey are available.Members were provided with a pie chart showing where the taxdollars would come from based on the information provided at thismeeting: commercial 10.26%, industrial 5.82%, farm 3.13%,pipeline 2.75%, residential 74.84%, multi-residential 3.19% andmanaged forest .01%.Reference: for further review and consideration.5. REPORTS ON QUESTIONS FROM NOVEMBER 28 th MEETINGReports were provided for questions that arose at the FinanceCommittee meeting November 28 th , as follows:a) Melbourne Agricultural Society (MAS) - report from theCommunity Development Manager dated December 6 th , 2011asking MAS how the proposed 2012 donation is to be spent(operational and maintenance expenses vs. special eventrelated expenses) in order to clarify their request for funding.The communication also requested an update on the status oftheir Ontario Trillium Foundation grant application.The MAS was informed that there is currently no precedent forsupporting the ongoing operating expenses associated withfacilities owned and operated by community groups. Althoughother service clubs and organizations may receive donationsupon request for other activities (ie. events and festivals),there is currently no agreement in place with any communitygroup to sustain operations or maintain their facilities. Thecommunication also requested an update on the status of theirOntario Trillium Foundation grant application.The communication was received and circulated by Mr. Britanto members of the MAS for their input with the intention offormulating a response to Finance Committee. This resulted inthe attached responses from Mr. Britan and Past-PresidentKevin Pierce. These responses have been included for thereview of Finance Committee at the request of Mr. Britan. Theyoutline their understanding of an arrangement that the MASCommittee of the Whole Finance Minutes Dec 12 11

4indicated was made with the previous Council regarding a fiveyear commitment for funding to assist with the operation andmaintenance of the facility. Mr. Britan and Mr. Pierce also drawcomparisons in their letters to the financial support that iscurrently provided by the municipality to cover the operatingexpenses associated with the Caradoc Community Centre forthe residents of Mount Brydges.Mr. Britan also informed (in a separate correspondence) staffthat the MAS was successful in their recent grant application tothe Ontario Trillium Foundation, and that they were awarded$15,100.00 to be put toward renovations and upgrades ofequipment in the kitchen area of the hall. Mr. Britan indicatedthat with these funds, all repairs and improvements to thebuilding will be complete, and that no further assistance wouldbe required for repairs in 2012. Mr. Britan clarified that theintent of the $15,000.00 request to Finance Committee forconsideration in the 2012 budget was for operational expensesrelated to utilities and building maintenance, as per thepreviously established understanding with former Mayor Veale.Two budget outlines were provided by Mr. Britan to separatethe revenue and expenses associated with the Melbourne Hallfrom those associated with the operation of the Melbourne Fairevent.Upon further review of correspondence between the MAS andthe Municipality over the last several years, it would appearthat an understanding was reached with former Mayor Vealeand subsequently with Finance Committee in September of2009 whereby the MAS would maintain the operations of theMelbourne Fair with support from the Municipality to cover thecost of operating the main Fair building (Melbourne Hall) forthe 2010 year. There is no indication in the minutes,correspondence or elsewhere regarding the existence of a fiveyear commitment, or even a defined annual contributionamount. Amounts requested in following years were dictatedby the needs of the MAS in that particular year, and werealways subject to available funds and the discretion of Council.After inquiring with the Director of Recreation regarding thecomparison between the Caradoc Community Centre (CCC)operating model and the Melbourne Hall, it is important to notethat the use of the CCC facility by community groups iscurrently subsidized to an extent by the Municipality. Althoughprivate users are charged a competitive rate, many localorganizations are not charged (ie. Scouts, Lions, etc.). This isan arrangement that was developed when the facility wasCommittee of the Whole Finance Minutes Dec 12 11

5established in 1990. As such, the suggestion was made by MASmembers that consideration should be given to evaluating theirrequest for financial assistance in light of other municipalcontributions, rather than in isolation.In consultation with Councillor Cowan and municipal staffregarding this issue, the Community Development Managerrecommended to Finance Committee that a formal agreementwith the MAS be established should the decision be made toprovide financial assistance for the maintenance and operationof the Melbourne Hall. This would serve to clarify the position ofthe municipality, defining the amount of the annualcontribution and the length of the commitment, as well as theparameters surrounding public use of the facility (subsidizedvs. paid use).Councillor Cowan said he thinks the municipality has anobligation to provide assistance to MAS. He said it appears thebuilding is in good condition and that are we now getting morecomplete financial statements separating operating expensesfrom the Fair expenses.Moved by Councillor Cowan and Mayor VanderheydenTHAT: Finance Committee recommends that $15,000 beprovided to Melbourne Agricultural Society in 2012 foroperating its buildings and that an agreement be establisheddefining the amount of the annual contribution and that theterm of the agreement will expire on December 31, 2014.Carried.b) Fire Department various matters - report from the FireChief regarding the Fire Department Budget, an update fromthe County regarding fire and police dispatch services; andvolunteer firefighter training sessions.The Fire Chief said he reduced the Fire Conventions andSeminars budget by $2,000 as requested. Regarding thetransfer of funds from the Fire Equipment Reserve, the FireChief said it is his understanding that monies collected for thisreserve fund came from public donations, and memorialdonations, for special projects of the fire department notnormally funded through the budget process. The Fire Chiefsaid he was recently made aware of the amount in the reservefund and is hoping to use some of the funds for training roomimprovements at the various stations as well as possiblycontribute funds to the Strathroy Station Firefighter Associationfor the construction of a proposed community information signCommittee of the Whole Finance Minutes Dec 12 11

6at the Strathroy Station. The Fire Chief is asking that $12,000of the reserve fund be allocated for the air pack upgrades andthe balance to be maintained to fund other non-operatingbudget projects.Regarding an update from the County about fire and policedispatch services, the Fire Chief reported that he was asked byCouncil to investigate possible cost savings by utilizing theCounty Fire Dispatch system for fire dispatch in Strathroy-Caradoc. The Fire Chief’s research involves the area of FireDispatch only and not Police Dispatch as Police have their ownsystem, needs and 911 responsibilities. The Fire Chief has hadnumerous conversations with the County Emergency ServiceDirector over the past few months and extensive research hasbeen conducted in the review of how our existingcommunication system could be incorporated into the Countysystem. The only outstanding issue that has to be finalized isthe costs and impact of the proposal on the London FireDepartment Operations. Although the County owns thecommunication system infrastructure utilized by the County,the London Fire Department provides the dispatch centre andthe personnel needed for the delivery of the service. Numerousrequests have been made to the London Fire Department fortheir input into the feasibility and costs associated with theinitiative; London Fire has been slow to respond to ourinquiries. Additional call volume information was forwarded toLondon Fire on November 17, 2011 for their review andanother inquiry was made on December 5 th for an update butno response has been received yet. The Fire Chief will continueto attempt to gather more information for council review assoon as possible.Regarding the feasibility for fire volunteers to meet bi-weeklyrather than weekly and if there is a savings to be realized withthis type of change, the Fire Chief reported that each Station ofthe Fire Department is obligated to conduct 20 regular trainingsessions per year with additional voluntary special trainingsessions conducted as required as opportunities becomeavailable. Additionally each station is made up of four squadsconsisting of an officer and a complement of firefighters. Eachsquad is responsible to be on-call for one weekend per monthto ensure that a minimum compliment of firefighters isavailable to respond on any given weekend. This Duty Squad isresponsible to conduct a maintenance review of apparatus andequipment during their on-call week. The purpose of this is toensure that all equipment and trucks have been properlyCommittee of the Whole Finance Minutes Dec 12 11

7maintained and are in service ready condition for anyemergency call that might be received.The Fire Chief believes that the training and maintenanceprograms developed is a reasonable expectation of duediligence for the delivery of fire protection to our communityand to ensure the safety of our volunteer firefighters andshould not be modified.One area that cost savings could be realized (approximately$50,000.00 per year) is the elimination of the on-call weekendthat firefighters are obligated to participate in. Considerablethought however should be given to the elimination of the oncallweekend.This initiative was developed at the request of council manyyears ago (prior to amalgamation) when it was found that onsome weekends a shortage of firefighters was such that therewas no guarantee that at least one truck was available torespond to an emergency. Council may wish to initiate a studyinto the need for the continuation of the on-call weekendrequirement in the future as a means of reducing operationalcosts in future budget years.After a brief discussion the following motions were passed:Moved by Councillors Cowan and CameronTHAT: staff determines the number of weekend fire callsreceived over the past two years and report back to Committeeon any cost savings that may be realized while posing aminimal impact on the municipality.Carried.Moved by Councillor Baker and Deputy Mayor RichardsTHAT: Finance Committee recommends that $12,000 beallocated from the Fire Equipment Reserve to fund air packupgrades in 2012.Carried.c) Status of certain roads - report from the Roads Managerregarding Blackjack Drive, Cooks Road, Parkhouse Drive andTroops Road.The following information was provided as requested andprovides an overview with respect to anticipated capital roadworks:1. Blackjack DriveA culvert replacement is required. A decision will berequired to keep the road open or to close the road. ACommittee of the Whole Finance Minutes Dec 12 11

8report to Transportation Committee will be prepared as soonas we receive from the M.O.E. and Oceans and Fisheriesapproval to proceed. There is no funding in the 2012budget. It is possible that a decision may not be made untilthe end of 2012; this would then need to be budgeted in2013.2. Cooks RoadThis road requires re-alignment. Land purchase isnecessary to move the road over and re-align theintersection. A report to Transportation Committee will beprepared in the near future which will determine the courseof action and the funds required. We could either purchaselands or expropriate the land required; however, there is no2012 budget. Once Committee decides the course of action,this will take some time to achieve; there will need to be anallocation in the 2013 budget.3. Parkhouse Drive and Troops RoadPreliminary work is being done on the culverts and drainagecurrently funded through the Operations Budget. Somesurveying is required to realign Troops Road and theParkhouse Drive intersection.Funds should be budgeted for these road improvements inthe 2013/2014 budget. Development charges collectedwhen the lots are sold will help fund improvements.A report will be provided to the Transportation Committeerecommending the work to be done in 2013/2014, by thattime we may know what the Developer will contributetoward road improvements.Reference: for information.6. FULL COST RECOVERY - PROPOSED PLANNING FEESPaul Hicks, Planner, provided more information on proposed planningfees, as requested at the Finance Committee meeting November 28 th .To recover the full expenditure would require that planning fees beredistributed and raised overall by an estimated 25% to cover 100%of the expenses. The current fees were approved in 2009.It is proposed that the 2012 planning fees be (the current fee is inbrackets): Official Plan Amendment $3,650 ($2,700); Zoning BylawAmendment $2,100 ($1,600); Site Plan Approval $1,350 ($1,000);Plan of Subdivision $4,700 ($3,700); Consent $1,750 ($1,300);Minor Variance $700 ($600); Part Lot Control $600 ($500); RemovalCommittee of the Whole Finance Minutes Dec 12 11

9of the Holding Symbol $350 ($250); and Renewal of a TemporaryUse $500 (300).Moved by Councillors Cowan and CameronTHAT: Finance Committee recommends going to full cost recoveryfor planning fees starting January 1, 2012 as proposed by Paul Hicks,Planner in his report dated November 23 rd , 2011; and further that abylaw authorizing the new fees be prepared for Council approvalDecember 19 th , 2011.Carried.7. 2012 DRAFT CAPITAL BUDGET AND 5-YEAR CAPITAL PLANMembers reviewed an updated report on the subject matter includinga report from the Director of Environmental Services providing moredetails on the 2012 infrastructure projects. Information was firstprovided to Finance Committee November 18 th .A map showing the location of proposed capital infrastructure worksfor 2012 was provided at the meeting.A summary of the 2012 capital project costs and sources of financingproposed are as follows:2012In the 2012 Budget year, the proposed projects total $6,219,415.- $302,800 will come from taxation- $1,289,000 will come from Gas Tax- $405,150 will come from Development Charges- $609,300 will come from Reserves- $3,236,316 will come from User Fees and water & sewer reserves- $376,849 will come from DonationsThe current following five (5) year capital project forecast is asfollows:2013In the 2013 Budget year, the proposed projects total $8,137,984- $4,588,600 will come from taxation- $1,991,825 will come from DC’s and Gas Tax- $30,000 will come from Reserves- $1,248,858 will come from User Fees- $278,700 will come from other sources2014In the year 2014, the proposed budget for capital projects is$7,708,326.- $6,040,250 will need to come from taxation- $683,170 will come from DC’s and Gas TaxCommittee of the Whole Finance Minutes Dec 12 11

10- $866,156 will come from user fees- $118,750 will come from other sources.2015In the year 2015, the proposed budget for capital projects is$6,843,202.- $5,460,250 will need to come from taxation- $114,000 will come from DC’s and Gas Tax- $1,250,202 will come from user fees- $18,750 will come from other sources.2016In the year 2016, the proposed budget for capital projects is$2,367,295- $1,537,750 will need to come from taxation- Nothing has been budgeted from DC’s and Gas Tax- $812,295 will come from user fees- $17,250 will come from other sources.Reference: for further consideration.8. PROPOSED NEXT STEPSCirculate updated Budget package for binders by the end of theyear (the DFS/Treasurer will contact members when hardcopies are available at the Town Hall); Budget review and recommendation to Council – January 16,2012, and January 23, 2012 if required; Budget Presentation to Council February 6, 2012 forconsideration and adoption (public notice will be provided).9. SCHEDULING OF MEETINGS Monday, December 19, 2011 – Council followed by Committeeof the Whole @ 6:30 pm. Monday, January 9, 2012 – Council followed by Committee ofthe Whole @ 6:30 pm. Monday, January 16, 2012 – Finance Committee @ 5:30 p.m.10. IN-CAMERA MATTERSMoved by Councillors Baker and DausettTHAT: Finance Committee moves In-Camera to consider personaland property matters.Carried.Personal and property matters were discussed.Committee of the Whole Finance Minutes Dec 12 11

11At the conclusion of the In-Camera session the following motion waspassed:Moved by Councillors Pelkman and DausettTHAT: Finance Committee concludes the In-Camera session andreturns to open session.Carried.11. ADJOURNMENTThe meeting adjourned at 7:46 pm on a motion by Councillor Bakerand Deputy Mayor Richards. Carried.________________________Mayor___________________________Clerk/kmCommittee of the Whole Finance Minutes Dec 12 11