October 3, 2023, at 12:00 PM

Original link

The meeting is called to order at 12:00 PM.

1.   Disclosures of Pecuniary Interest

It BE NOTED that no pecuniary interests were disclosed.

2.   Consent

Moved by S. Stevenson

Seconded by H. McAlister

That consent items 2.1 to 2.4, BE APPROVED.

Motion Passed (4 to 0)

2.1   City of London’s Credit Rating

2023-10-03 Staff Report - City of London Credit Rating

Moved by S. Stevenson

Seconded by H. McAlister

That, on the recommendation of the Deputy City Manager, Finance Supports, the City of London’s Credit Rating Report, providing a summary of Moody’s Investors Service Credit Opinion of the City of London, BE RECEIVED for information.

Motion Passed

2.2   2023 Mid-Year Operating Budget Monitoring Report

2023-10-03 Staff Report - 2023 Mid-Year Operating Monitoring Report

Moved by S. Stevenson

Seconded by H. McAlister

That, on the recommendation of the Deputy City Manager, Finance Supports, the report dated October 3, 2023, with respect to the 2023 Mid-Year Operating Budget Monitoring Report, BE RECEIVED;  it being noted that the year-end positions could fluctuate based on factors beyond the control of the Civic Administration:

  • Property Tax Supported Budget projected surplus of $18.0 million;

  • Water Rate Supported Budget projected surplus of $5.5 million;

  • Wastewater and Treatment Rate Supported Budget projected surplus of $3.7 million;

it being further noted that Property Tax, Water, and Wastewater & Treatment Budget surplus will be allocated in accordance with the Council Approved Surplus/Deficit Policy.

Motion Passed

2.3   2023 Mid-Year Capital Budget Monitoring Report

2023-10-03 Staff Report - 2023 Mid-Year Capital Monitoring Report

Moved by S. Stevenson

Seconded by H. McAlister

That, on the recommendation of the Deputy City Manager, Finance Supports, the following actions be taken with respect to the 2023 Mid-Year Capital Budget Monitoring Report:

a) the 2023 Mid-Year Capital Budget Monitoring Report BE RECEIVED for information, it being noted that the life-to-date capital budget represents $3.4 billion with $1.9 billion committed and $1.5 billion uncommitted; it being further noted that the City Treasurer, or designate, will undertake the housekeeping budget adjustments identified in the Report, in accordance with the Multi-Year Budget Policy adopted by amending by-law No. CPOL.-45(b)-239;

b) the completed capital projects, totaling $3.4 million of net surplus funding, included in Appendix “B” as appended to the staff report dated October 3, 2023, BE CLOSED;

c) the funding associated with the rate supported capital projects approved for closure in b) be discharged as follows:

i) pay-as-you-go funding of $15 thousand BE TRANSFERRED from capital receipts;

ii) authorized debt financing of $2 thousand BE RELEASED resulting in a reduction of authorized, but unissued debt;

iii) uncommitted reserve fund drawdowns of $169 thousand BE RELEASED back into the reserve funds which originally funded the projects;

d) the funding associated with the non-rate supported capital projects approved for closure in b) be discharged as follows:

i) uncommitted reserve fund drawdowns of $2.5 million BE RELEASED back into the reserve funds which originally funded the projects;

ii) other net non-rate supported funding sources of $758 thousand BE ADJUSTED in order to facilitate project closings.

Motion Passed

2.4   SS-2023-252 New Fibre Network Service Installation for Fire Station No. 15

2023-10-03 Staff Report - SS-2023-252 New Fibre Network Service

Moved by S. Stevenson

Seconded by H. McAlister

That, on the recommendation of the Deputy City Manager, Finance Supports, the following actions be taken with respect to the new fibre network service installation required for the new Fire Station No. 15 at 2340 Old Victoria Road:

a)    approval BE GIVEN to execute a Single Source purchase as per section 14.4 (d) and (e) of the City of London’s Procurement of Goods and Services Policy;

b)    Single Source negotiated price BE ACCEPTED to secure the installation of the new fibre network service required for the operation of the new Fire Station No. 15 for a total price of $113,850.00 (excluding HST) from Rogers Communications Canada Inc.;

c)    the Civic Administration BE AUTHORIZED to undertake all the administrative acts that are necessary in connection with this purchase;

d)    approval hereby given BE CONDITIONAL upon the Corporation entering into a formal contract or having a purchase order, or contract record relating to the subject matter of this approval in accordance with Sections 14.4(d)(e) and 14.5(a)(ii) of the Procurement of Goods and Services Policy; and

e)    the funding for this purchase BE APPROVED as set out in the Source of Financing Report as appended to the staff report dated October 3, 2023 as Appendix “A”.

Motion Passed

3.   Scheduled Items

None.

4.   Items for Direction

4.1   Budweiser Gardens Proposed Expansion - Additional Information and Proposed Amending Agreement

2023-10-03 Staff Report - Bud Gardens Proposed Expansion

Moved by H. McAlister

Seconded by S. Stevenson

That, on the recommendation of the Deputy City Manager, Finance Supports, the following actions be taken:

a)    the report providing additional information on the proposed Budweiser Gardens Expansion BE RECEIVED for information;

b)    the proposed by-law as appended to the staff report dated October 3, 2023 as Appendix “A” BE INTRODUCED at the Municipal Council meeting on October 17, 2023 to execute the proposed amending agreement to the Participatory Occupancy Lease (Schedule “A”) related to the Budweiser Gardens Expansion project;

c)    the source of financing for the proposed expansion BE APPROVED as set out in the Source of Financing Report as appended to the staff report as Appendix “B”; and

d)    the Civic Administration BE DIRECTED to confirm concurrence in writing for the contract extension with Ovations Food Services, L.P.;

it being noted that the attached questions were submitted by Councillor S. Trosow.

Motion Passed (4 to 1)

4.2   Application - Issuance of Proclamation - National Day of Awareness (Economic Abuse Awareness Day)

2023-10-03 Submission - Proclamation - National Day of Awareness

Moved by S. Stevenson

Seconded by S. Trosow

That based on the application dated September 18, 2023 from the Canadian Centre for Women’s Empowerment, the request BE RECEIVED.

Motion Passed (4 to 0)

4.3   (ADDED) Application - Issuance of Proclamation - Turkish Republic Day

2023-10-03 Submission - Proclamation - Turkish Republic Day

Moved by S. Trosow

Seconded by S. Stevenson

That based on the application dated September 29, 2023 from the Federation of Canadian Turkish Associations, October 29, 2023 BE PROCLAIMED Turkish Republic Day.

Motion Passed (4 to 0)

5.   Deferred Matters/Additional Business

None.

6.   Confidential (Enclosed for Members only.)

Moved by S. Stevenson

Seconded by H. McAlister

That the Corporate Services Committee convenes In Closed Session to consider the following:

 6.1  Land Acquisition/Disposition / Solicitor-Client Privileged Advice / Position, Plan, Procedure, Criteria or Instruction to be Applied to Any Negotiations

 

A matter pertaining to the proposed or pending lease of office space by the municipality, including communications necessary for that purpose; advice that is subject to solicitor-client privilege; commercial and financial information, that belongs to the municipality and has monetary value or potential monetary value and a position, plan, procedure, criteria or instruction to be applied to any negotiations carried on or to be carried on by or on behalf of the municipality.

Motion Passed (5 to 0)

The Corporate Services Committee convenes In Closed Session from 1:28 PM to 1:35 PM.

7.   Adjournment

Moved by S. Stevenson

Seconded by S. Trosow

That the meeting BE ADJOURNED.

Motion Passed

The meeting adjourned at 1:40 PM.

Full Transcript

Transcript provided by Lillian Skinner’s London Council Archive. Note: This is an automated speech-to-text transcript and may contain errors. Speaker names are not identified.

View full transcript (1 hour, 46 minutes)

Hello everyone, welcome to the 17th meeting of the Corporate Services Committee. It is 12 p.m. We have quorum, so I’m gonna call the meeting to order. We do not currently have any members of council with us remotely.

And I will advise councilors if that changes through the course of the meeting. I do want to begin by acknowledging that the city of London is situated on the traditional lands of the Anishinaabek, Paudenosaunee, and Lene Peiwak and Adawander and peoples. We honor and respect the history, languages, and cultures of the diverse indigenous people who call this territory home, and acknowledge that the city of London is currently home to many First Nations, Métis, and Inuit people. As representatives of the people of the city of London, we are grateful to have the opportunity to work and live in this territory.

The city of London is also committed to making every effort to provide alternate formats and communication supports for meetings upon request. To make a request specific to this meeting, please contact csc@london.ca or phone, 519-661-2489, extension 2425. Colleagues, I just want to start by sharing with committee members that we have had a notice from Councillor McAllister that he does have to leave at 2 p.m. if we are not finished.

And I myself actually have a commitment at 2.30. We will not have quorum if we extend past that time. And Councillor Stevenson indicated that she has a commitment at 2.30 as well. So I want to remind colleagues if we can be efficient with our use of time today, or we will lose quorum.

So I am going to begin by looking for any disclosures of pecuniary interest. I see none. So moving along to section two, our consent agenda. We have four items on the consent agenda.

I’ve not been made aware of any items that individuals want dealt with separately on the consent agenda. So I’m going to look to see if there is a mover and a seconder for the entirety of that. Moved by Councillor Stevenson and seconded by Councillor McAllister. So that is moved and seconded.

And we’ll open the floor for discussion on the consent agenda. I see no questions or comments from Councillors. I’m just going to take this opportunity to say, I am really grateful that as the mayor was away at the time of our visit with Moody’s, I didn’t blow our AAA credit rating this year. And that is all due to the excellent work of our financial team and Ms.

Livingston to make sure that I did a good job in attending that meeting with them. And they did a great job of getting me all the background information and answering all the questions to the Moody’s representative. So I just want to thank everybody for that work. And I would like Councillor Truss out next.

Can I just ask a very, very quick question about the consent agenda. And this deals with the issue of the deferral of redoing the assessed values. And that we’re still back at 2016. And I just feel, and I think you’ve mentioned this, it’s outside of your control.

But my question is, what is the city doing in terms of our advocacy work and AMO’s advocacy work to correct this? Because I think the province is really putting us, once again, in a terrible position. So we don’t have our AMO representatives here, Councillor. So I’m not sure if any of the mayor joins us, certainly, or Councillor Hopkins might be able to answer on the AMO side.

But I’m going to go to Ms. Barbone in terms of the staff’s work on this so that she can respond to that. And that could come up with the council meeting too. Ms.

Barbone. Thank you through the chairs. So there is a review of taxation as well that they are beginning to undergo. So I believe there’ll be some assistance that we may be able to provide some input and feedback into that.

Certainly that is an ongoing conversation through our channels with the minister to be able to continue that work and to sooner and whatever information they can provide to us is absolutely something that would assist us. But there is a broader review that’s been announced with respect to taxation in general. So we’re hopeful that there will be some input that we will as a municipality be able to advise through that process. Ms.

Limson may be able to speak on our broader at some of the other levels and provincial tables that she’s a part of with respect to the ongoing advocacy work as well. Ms. Livingston, did you want to add to that? Yes, Mr.

Chair. The only thing that I would add is I was in attendance of a meeting of the OBCMCAOs on Friday. And this discussion occurred with the deputy minister of finance in terms of concerns and impacts for municipalities. So as Ms.

Barbone says, it’s an ongoing discussion and every opportunity we have, we raise what the impacts are. For us, I can’t speak politically what’s been happening, but I believe there’s a number of advocacy steps at that level as well. Thank you, Ms. Livingston.

I see no other questions or comments on this. So we will ask the clerk to open the vote on the consent agenda. But yes. Fosing the vote in the motion carries 4 to 0.

Thank you, colleagues. Moving on, we have no items under section 3 scheduled items. We do have three items under section 4 items for direction. With committee’s indulgence, I’m just wondering if we might want to do just a quick change of order and deal with the proclamation applications first.

As I think we might have some discussion on the Budweiser Gardens proposal. So I’m just going to see if there’s any objections to dealing with the proclamations first. I’m not seeing any Councillors indicating they have any. So I do want to indicate two colleagues as the chair with both of these applications for proclamations.

On 4.2, noting that the application had no local London connection, the clerk’s office did reach out last week to the applicant to seek additional information on a London connection. No response has been provided. On item 4.3, the application for issuance with regard to Turkish Republic Day. The applicant, although out of town, did indicate to us that there was a local chapter and the contact for the local chapter president, Mr.

Awesome Ali. I can confirm that there is, in fact, a local chapter. I’ve reached out proactively to confirm that and that they are supportive of this proclamation from the local level. So 4.2 has no response to the local connection.

4.3 has been confirmed. So I’m going to look for a motion to deal with these, but given their different circumstances, I think we may want to wish to deal with them differently. So we’ll see if there’s a motion on 4.2. Councillor Stevenson.

So we could just move to receive— I’d like to move to receive 4.2. OK, so 4.2 has been moved to receipt. Do we have a seconder for that? Seconded by Councillor Trussow.

Any discussion on that? Councillor Stevenson. I just want to say on this one that the letter that we received actually says we are writing to you today to ask the city of Campbell River to issue a proclamation. So this is one of the reasons why I’m voting to receive it.

Thank you. Anyone else on 4.2? Seeing none, then we’ll ask the clerk to open the vote on that. And again, this is just to receive bear with me for just a moment, colleagues.

I’m having trouble with my E-scribe voting. Fosing the vote in the motion carries 4 to 0. OK, colleagues, moving on to 4.3. The application for issuance of Turkish Republic Day, looking to see if anyone has a motion on this one.

Councillor Trussow. I will move that we accept that. And do we have a seconder? Councillor Stevenson, thank you.

Any debate or discussion on this? Seeing none, then I’ll ask the clerk to open the vote. Fosing the vote in the motion carries 4 to 0. Thank you, colleagues.

I appreciate your indulgence in that small change of order so we could dispense with the mayor Morgan. I’m here and logged in now, but I may not be recorded as a voting member yet, so. Thank you, your worship. And I was actually about to acknowledge for those watching via the live stream as well.

The mayor Morgan has joined us, and we are moving on. And just so you’re aware of your worship, we did us change of order and dealt with the proclamations under items for directions first, so that they were not left dangling while we moved to 4.1, which is Bloodweiser Gardens, proposed expansion, additional information, and proposed amending agreement. colleagues, I just want to remind everybody that this is arising from direction that we provided to our staff earlier in the year when this first came before us. And so I’m going to go to Ms.

Barbone first to provide us an introduction and an overview of this report and the direction that she is working from that was provided earlier in the year. Okay, through the chair. So, OBG 360 had been talking about a proposal for proposed expansion and renovation of Budweiser Gardens for quite some time, noting that the facility is 20 years old and an opportunity for additional investment did exist to expend the back of house as well as to address current facility limitations to potentially enhance the customer experience for all those who play or attend Budweiser Gardens. So as you recall, this proposal came forward to the May 23rd Corporate Services Committee for consideration.

So at that time, OBG 360 had planned to proceed with the upgrades contemplated in phase one of their proposal starting in summer of 2023. So based on the discussion regarding the proposal and May Council directed me with the following. So civic admin was directed to prepare an amending agreement for the proposed expansion and bring forward a confirmed source of financing for phase one funded through the Tourism Infrastructure Reserve Fund. So included as Appendix A, you will find a draft by-law and a proposed amending agreement that was prepared based on the proposal that was provided to the Corporate Services Committee in May should Council wish to proceed.

The terms of the amending agreement are based directly and linked to the proposal, which is presented and included as an attachment to the draft amending agreement. So in section 2.3 and included as Appendix B, the proposed source of financing through the Tourism Infrastructure Reserve Fund has been included as was noted and directed in the resolution. The second item that Council directed was that we confirm concurrence in writing pending a future Corporate Services report for the contract extension. So included in section 2.4, some additional analysis and background with respect to the food services extension that is included as part of the proposal.

So should Council wish to approve the proposal, the concurrence to the contract extension would occur after that approval has been provided should the Council wish to proceed. The other item, civic admin was directed to bring forward a review of the financial case for the proposed expansion, including but not limited to an overview of London’s return on investment expected from the proposed phases of the expansion with a comparison of the return on investment that we would receive as laid out in the current agreement. So that has been included in section 2.0, which summarizes the investment requested, as well as the analysis of the direct return on the investment as well as the payback. So the calculated payback is actually compared to the expected return.

Should the city of London not invest anything additional into the facility? As with any pro forma and future calculations, these are projections and estimates. Real experience, I can almost with certainty guarantee will not be 100% what is provided. As a result, we’ve included the sensitivity analysis that looks at the return on investment to the city’s investment.

Should the assumptions differ over the next 25 years with the actual experience of the facility? So due to the complexity of the calculations in 25 years worth of data, pro forma spreadsheets and calculations, civic admin engaged KPMG to review the ROI calculations and ensure that the work we had performed and the calculations that had been done were reasonable. So they provided a memo to me that noted the calculations understated the return that the city had originally calculated based on the information provided by Budweiser Gardens through OVG. So hence why we’ve provided updated calculations and the returns in this report than what would have been previously identified to the council.

So the last item was that in support of the climate emergency action plan and the net zero goal, civic admin was directed to work with OVG to bring forward existing and contemplated plans for energy efficiency retrofits to Budweiser Gardens and offer support for any applications for financial grant programs for their contemplated upgrades. So we’ve included a section in 2.5 of the report that outlines all the work that OVG has done to date and some of the work that they have embarked upon through the goal program that supports looking at some analysis of the data to be able to inform through data-driven decisions what potential work had be further done to support that initiative. So that’s a summary of the report and this is for council to review and happy to answer any questions. Thank you for that, Ms.

Burwell. So I’m going to go to council now for to look to see, first of all, because I want to make sure that we stay focused on our discussion. Do we have counselors who wish to put forward a motion? Councilor Trussau?

Yes, I would like to put forward some amending motions and I did send a city clerk some language. The gist of my motions is number one, I would like to see the text of the KPMG report. I’ve set out in a series of questions which I provided I’ll be at just today, but I did my best given the complexity of this file and the fact that we didn’t have it that long either. I have a number of questions here, but my first, the first part of my motion is to provide with council to council the KPMG report.

The second part of my motion is to defer taking any action on phase one of the project to the 2024, 2027 multi-year budget deliberation. I think it’s appropriate that phase two has been so deferred and I think there’s a lot of overlap between phase one and phase two, and I would like phase one referred to and I will in my argument later, I’ll go into detail about that. And number three, and I’m not sure this is part of the motion, I think the extension of the food service through 2051 is an excessive extension that this council should not be making and I would ask that any such extension should we decide to grant one should be limited to five years. So those are my concerns that are reflected in a motion.

And I think the clerk may have the language on the screen. Okay, Councillor, I’m going to, I’ll just reiterate this and I’ll check with the clerk of what we’ve have, it’s not an amending motion ‘cause you’re not moving the staff recommendation, you’re putting forward an alternate motion which is to request a copy of the KPMG report to defer phase one to the 2024 to 2027 multi-year budget and the third part of that is with respect to the extension of the food services contract and a limiting on it. I’m going to see if staff and because I want to be, I want to make sure that we are in order on this, first of all, and I do know the clerk has some language that you’ve prepared, but because this is a proposal with a partner, I don’t know if we can provide direction on a term limit and I want to go to staff, I don’t know if Ms. Barbone or even Ms.

Livingston, if you’re able to indicate this isn’t a straight procurement by the city, so I’m not sure what policies may apply in terms of council directing a limit on a component of time in a proposal that’s been brought forward by a third party, so I’m going to look to see if there’s any thought on that and I will also, I know that the city clerk is with us and Mr. Card is with us, so if either of them have any opinion on the suggestion that we would be limiting a food service contract to a specific period of time as a council direction, I would appreciate any comments from staff on that. Ms. Barbone, can you start us off on that?

Certainly, through the chair. So within the existing agreement, the model allows, there is a contract between OVG 360 and to provide the food services through their, one of their companies, which is related, which is OVG or Ovation’s Food Services. So the term of the agreement has to be ultimately approved by council, however, and I’d have to refer to that page in the report just to look exactly when that was last done, however, the term, if there is an extension required greater than five years, council has to provide concurrence in writing for that to proceed. In absence of council, not to be unreasonably withheld, that is part of the proposal that is being provided from OVG 360.

So I cannot comment on the desire of OVG 360 to proceed with the proposal as is, should that term be limited and not granted by council? Okay, thank you for that. So, and I’m just gonna summarize this quickly. What you’re suggesting is that while council could direct a term limit, that does not require our partner to agree to that term limit.

Partner does not require, so right now the contract is the extension goes till 2028. So the request is to have council confirm its concurrence for a term far greater than the five years that could automatically be done. So if council wishes not to grant that, perhaps that may impact the proposal that is before you for which it may not proceed. So if they were to, depending on the impact of that, I don’t know what that would do the proposal.

So there’s a bit of a linkage in terms of it being provided together. OVG 360 would need to provide their response as to how that would potentially impact the proposal that they’ve provided before you. Okay, thank you. So I wanna ask that just to make sure that we could allow this motion to stand as the councilor has proposed.

And what I’m hearing is that, well, we can, there may be some consequences to that. So we have a motion that’s been moved. Do we have a seconder for that? I’m not seeing a seconder for that motion, councilor.

So I’m gonna look to see if councilors have any other motions that they wish to put forward. Councilor Trussow? Well, do I have the opportunity to speak in more detail about why I think that these motions— You do not, councilor, ‘cause you did not have a seconder for the motion. Okay, but I did submit questions which have not been answered yet, and I wouldn’t like the questions answered.

Well, no. And I think that’s reasonable, because I think that’s information that this council would wanna have before making that determination. So I think to cut off the questions that I submitted in advance— - Councilor. No, no, no, I’m calling you to order.

I have not cut off your questions. There will be an opportunity once a new motion is on the floor for questions and debate, but you are now going into debate without a motion on the floor. I’m not cutting off your opportunity for questions, but I am ruling you out of order right now, and I’m gonna look to Councilor McAllister. You had your hand up next.

Thank you, and through the chair, I’d like to put the staff recommendation and motion on the floor. Okay, so the staff recommendation is on the floor. Do we have a seconder for that? Councilor Stevenson seconds.

Okay, now the floor is open for questions and debates on the staff recommendation. Now, Councilor Trussow, we can go to you. I thought it would be more useful, rather than to just oppose this motion, to provide some guidance, but I’ll just have to take this from the point of view of opposing the motion. I did submit some, I did submit questions, which I think are relevant to the motion that’s on the floor, and I would like to get responses to these questions.

I think they’re reasonable questions. These are all based, these are all based on points that are in the staff report. So I’d like to sort of stop and see if I can get these questions answered. Well, if you’d like to ask those questions, Councilor, we have staff here to start providing answers.

Yes, and I provided them in writing. Okay, but you will need to, in public session, ask your question for staff’s response. Yes, well, there’s overlap in the descriptions between phase one and phase two. And I don’t mind doing that.

But if my five minutes are up, I am gonna ask for an extension, because I did provide these to everybody on Council. But I’ll start. There’s overlap in the descriptions between what’s in phase one and phase two, could further detail be given as to exactly what’s anticipated in phase one and phase two. What is the East Bowl lodge?

And can it be moved to phase two? Could the report more precisely state what are the general food and beverage concessions upgrades? The report talks about upgrades to 2051, but it doesn’t say exactly what they are. Could the report more precisely state what’s included under the locker room?

Are there other sources of funding for this? And could more detail be provided regarding the club lounge expansion? Can this be moved to phase two? And that is the first set of four different sets of questions.

So I’ll yield at this point. Okay, and just so you know, Councilor, because your motion wasn’t seconded, that’s the first time you’re speaking to the motion on the floor. So you’ve only used 52 seconds in asking those questions. So you do have lots of time left yet.

I will go to Ms. Barbone first on that set of questions to see if she can provide some response to that. Thank you through the chair. So because those are very detailed questions about the actual proposal, they would be best be answered through the OVG 360 who has that proposal.

Mr. Oll is here today if the Council would wish to or committee would wish to have those questions answered just as to the specifics. I think most of that information is again for Council presentation and their proposal was done at a high level. They are discrete.

Essentially what I do know with respect to the concessions is that a lot of it is a grab-and-go concept and it’s basically trying to move a lot of the stuff in phase one is the revenue generation type proposals with respect to what they’ve put forward and the more infrastructure type things are in the second half. So if the committee wishes to allow Mr. Oll to speak, I’m sure he can provide clarification as you’re requesting. Thank you, Ms.

Barbone. If colleagues can give me just a moment, I’m just conferring with the clerk because we haven’t given Mr. Oll delegation status. So I’m just checking to see if we can, with a motion on the floor, still add that delegation status.

Okay, with timely advice from our city clerks because our Deputy City Manager of Finance supports has invited the proponent to speak. We’re actually in order to allow Mr. Oll to speak if he wishes to answer some of those questions. So Mr.

Oll, I am gonna invite you to the microphone and I know you have some of your team with you, so if it’s more appropriate for one of them working on this file to answer that, you’re invited to include a member of your team as well to answer, but if you’d like to address those questions, I’m gonna invite you to do so. Thank you, thank you, Chair. I would like to hear those questions again because there was a lot of them. Okay, so we’re gonna do that without counting this towards Council Trust House time.

So Councilor, if you could just quickly run through those again. I have categories of questions. This is the first category. I mean, it deals with the overall expansion and the difference between phase one and phase two.

Is there some overlap in the description, which are include, as there is some overlap in the description that’s included in phase one and two, could further detail be given exactly what’s anticipated under phase one and phase two? And specifically, what is the east bowl loach? Can it be moved to phase two? Could the report more precisely state what are the general food and beverage concession upgrades so we understand them?

And could they be moved to phase two? Could the report more precisely state what’s included under the Knight’s locker room renovations? Are there other sources of funding for that? And could more detail be provided regarding club lounge expansion?

What is the club lounge? And can any of these be moved to phase two? In regard to the question, which is the common theme of moving things to phase two, certainly things can be moved to phase two, but then we would have to reevaluate our proposal because I would say that our investment would change on phase one if those things were moved out and that would take some time. But as Ms.

Barbona mentioned that it was the front loaded with the revenue enhancing items. So like I say, in terms of what our investment is, that would change and I would say that we would need time to do that. As for the Knight’s dressing room, our intention was to bring that space allocation to make it like a typical OHL dressing room, which is one of the things in our agreement with the city is we’ve got to provide a venue that is at a certain level in the OHL. We have fallen behind in that.

So we were looking to get space for them, which would include carpets, walls, doors, electrical, plumbing, and the general things, the nights we paying for any upfitting of those spaces in terms of their finishes and that type of thing. To your question about the food and beverages, again, it was already iterated that we’re looking to try to do more grab and go concept, which is becoming the industry norm. The Scotia Bank arena is one that did some stands last year. This summer, I think they did, they may have done all their stands.

And by doing that, it serves two purposes. One, it makes service times quicker. And the second is it increases revenues, which is what we’re, you know, both those things are important things for us. I’m trying to think about it.

I think I covered, ah, there we go. Locker room, oh, the club lounge expansion. We were looking to put a signature bar in there to get and make a little bit more room in there just to alleviate some of the crowding that we have during hockey games, which leaves a lot of people still sitting in their seats rather than coming out and seeing their friends and buying refreshments. So it’s, again, it’s a thing to make things easier for folks to get around, but also to enhance revenue potential for the venue, for the city and for the venue.

I think, oh, the East Bowl Loge, right outside the, in front of the restaurant, we have some seats and we were looking to make those a premium seat. There was a demand for more premium seating in the venue, which generates more revenue for the city and the city share. So that’s, that was the purpose of that. Again, it’s a pretty consistent with major venues and in, you know, in our venue space to have those kinds of premium spots.

And as said, we definitely have, there’s more capacity to add more premium seating based on demand that we’re receiving. Again, it’s a revenue, it would enhance the revenue. So those are things, and again, to your question, if we move things to phase two, then that would have to reevaluate what our investment would be. Thank you.

Thank you, Mr. Oal. And Councillor Trussau, Councillor Privell actually provided a printed copy of your questions so that the folks from Budweiser Gardens have them up there to refer to. If more are appropriate to those, I know you have some more questions, but I’m gonna let Mr.

Oal sit down for a moment, ‘cause I think some of your questions in your second category are more directed towards staff than towards Budweiser Gardens folks. So I’ll go back to you now. Yes, absolutely. How was the 80/20 split derived, and can the city seek a more advantageous split for the city?

Is 80/20 the final offer, or can we negotiate on that? Ms. Barbone. Thank you, through the chairs.

So because this is an incremental expansion renovation to the facility that already exists, 80/20 was the approximate cost sharing when the facility was built, and that was currently negotiated at that time. Because this is an additional, it was actually 82 and a little bit more, higher than 80% for the city of London. It’s in the report. So this time around, they narrowed it down and went to 80/20 as their proposal.

In May, Council did not ask me to renegotiate that, so I do not know if that would be accepted through the discussion, but certainly there was a great deal of time and effort in terms of going through this, and through the discussions with OVG. This was certainly where we landed, noting that a large number of the return on the revenue, the net cash flow, ultimately goes to the city. So that’s one of the things that you’d need to take into account is they’re certainly looking at, their investment and their return on that investment, noting that 70% of the proceeds would to go to the city of London as based on the current agreement. Councilor Trussell.

The next, I’ll try to put some of these together to save time. The fifth paragraph on page 66 says KPMG did not audit the figures or assumptions. What were the assumptions that they used to find these figures? And could we get more information about the effect of those assumptions, what they are and it not being audited?

Similarly, the same paragraph refers to a quote, handful of variables. What are these variables? Could you identify them? Furthermore, the use of the terms quote appears to be and quote may have seemed to be very loose and speculative.

Can more precision be given to these points? Ms. Barboon. Thank you.

So through some of the discussion we had in May and I believe I had noted this at that time is that these are 25 years of projections, their performance based on estimates and assumptions of many, many things. When the initial facility was constructed, there were 50 years of assumptions that went into the potential revenue stream that could come to the city of London upon which the city of London based their decision at that time. What I can tell you is there are many things that occur in a given year that somebody could not foresee. A perfect example would be the pandemic that shut the doors in Budweiser Gardens for over a year and resulted in absolutely zero revenue for a period of time.

Those are precisely the kinds of assumptions that 25 years worth of performance estimate. They are based on expenditure, inflationary assumptions. They are based on sponsorship revenue. They are based on potential projections on how much volume of food and beverage sales will occur at a period of time.

They result in inflationary impacts. So as I had indicated at that time, there is no one that can give you assurance on the validity of those assumptions and the likelihood of them to actually take place because there are many things such as the pandemic that people cannot foresee that could change those assumptions quite dramatically. So we focused on looking at the assumptions and the revenue calculations and all of the 25 years to look at based on the history of the venue and the results that we’ve experienced to date are those assumptions reasonable. No one will provide any assurance as to what the likelihood is of those coming true because we do not have a crystal ball to be able to confirm whether that future projection will in fact come true.

They are estimates and are best reasonableness in terms of reviewing. That is why the sensitivity analysis is there to look at if revenue doesn’t materialize as was estimated in the performance, what would be the city’s return on investment? So we looked at those at various calculations to give a worst case scenario if the expenses increase significantly more than the revenue, you may not have the return, which is calculated based on those estimates. So that’s why there’s no assurance.

That’s why the languages may because they are future projections. We only know they could and that we estimate them to be the case, but we cannot say they will because none of us have a crystal ball to give you that assurance. Thank you, Ms. Barbara.

Thank you, and rather than pursue that, I think I’m gonna just move along to the next series of questions regarding the funding of phase one improvements. Now we know that this comes from the city’s 50% share of revenue from the municipal accommodation tax that goes into a special fund. The other 50% goes to tourism London. Is tourism London able to make any contributions to the overall costs of phase one from its 50% share because this would reduce the amount of debt that the city would have to take on in order to meet the phase one improvements.

And how will the financing of the phase one improvements, which will deplete the existing TIRF balance, affect the ability of other applicants to obtain tourism related funding over the life of the 10 or 20 year loan? And I’ll stop there and let you respond to that. So Ms. Barbara, we have questions there that are related to the city’s share.

We have questions that are related to tourism, London’s allocation of the mat. I will know that Ms. Finn is with us in the gallery as well. So I will go to you first and then if Ms.

Finn wants to add anything from the tourism London perspective, we’ll invite her to speak as well. Thank you through the chair. So as was noted in May with respect to the city’s share of the tourism infrastructure reserve fund, that is a reserve fund that is set out by bylaw and approved by council that is for the capital costs that the city of London may utilize those funding towards as part of the city’s ultimate capital plan. So when you look at the intent of that fund, the Budweiser Gardens expansion absolutely meets the intent of that reserve fund, noting that it’s capital and was something that has been anticipated as quite some time.

So as part of the direction in the resolution, it did identify that the funding was to come from there. So we’ve provided the source of funding and we do know and Mr. Murray can speak to the balances that based on the issuance of debt, there is sufficient revenue coming in from the city’s 50% share to be able to fund the debt costs. However, if there is additional revenue that comes in through the city’s investment, that would first and foremost be used to pay off the debt so that we would not use fully the city’s share of the reserve fund to help mitigate that.

That’s what was done with the initial investment to create Budweiser Gardens. And certainly it doesn’t utilize the full amount of the reserve fund, there is other amounts that are still remaining should there be other needs in the city’s capital plan that would be funded. So Mr. Murray can speak to the exact balances.

Mr. Murray, thank you through the chair. So as of the end of August of this year, the balance in our tourism infrastructure reserve fund was approximately $3.8 million. As Ms.

Barbone has alluded to, certainly the intention would be to first utilize any incremental cash flows coming to the city as a result of this expansion, to service the debt associated with this proposal, only in the event that those incremental cash flows are not sufficient to service that debt would we then look to utilize the tourism infrastructure reserve fund to fund the difference between the debt servicing costs and the incremental revenues. Thank you for that, Mr. Murray. Councilor Truss, I did ask about the tourism London portion of the mat and while it is not referenced in the staff report, I do note the Ms.

Finn is here. So I do want to invite her if she wants to provide any response to how tourism London allocates its share of the mat funding, I would invite her to do so now. Thank you very much. And there was a mat report that came forward on September 19th from tourism London that clearly outlined our governance and criteria related to how we spend and what we spend in regards to that fund that again is by-lawed and approved by council in how we do that and how we will support Budweiser Gardens moving forward which is not within the capital piece.

Thank you, Ms. Finn. Okay, so those are those questions. Councilor Truss, I’ll go back to you.

Well, generally, can anything be done to reduce the estimated costs of the debt servicing under either the 10 or 20 year option? And are there other funds that could possibly be available to support the phase one costs? So I think Ms. Barbo answered part of that question already that the revenues or share of the revenues can be used to reduce the debt cost further.

I will see if she has anything she wishes to add to that. And Ms. Barbo, I’m gonna invite you because it may be relevant to other questions but it has been asked by previous questions around moving things to phase two or moving things to the multi-year budget. Could I ask you to also comment on what the impact of that would be?

Thank you through the chair. So to reduce the amount that we would need to service, the city could issue 20 year debt instead of 10 year debt that would make the payment smaller. However, that would also raise the cost of interest and would ultimately increase the cost of the city’s share in the long run. So it’s not something that we typically recommend.

However, if council wish to do so, that is another option. And certainly we would look to use the incremental revenues to fund it. That would be the most appropriate source. Failing that, the Tourism Infrastructure Reserve Fund is the most appropriate source.

We could look at other reserve funds that the city has instead. But I do know as we’re working on the multi-year budget, we will need to be looking at all of our reserve funds in the broader multi-year budget. With respect to your question about impact, the proposal that’s before you has revenue generation items primarily as part of phase one. So part of phase one is what generates the return to the city of London and the incremental revenue.

By moving some of the items to phase two, that would result in the incremental revenue, calculations changing. So what that would do is alter the return on the city’s investment and need the proposal to be essentially redone to recalculate what the returns are and ultimately what the investment would be and the shares from the partners to proceed in that result. If council wish to alter the proposal and defer everything to phase two or to the multi-year budget, what that would do is we would need to have a new proposal done and prepared and revise all of the return on investment calculations and performance that accompany this. At this point in time, it would be too late to hit the MYB given that we will be releasing a draft budget in early December.

Thank you, Councillor Trussell. I think at this point I’d like to hear from other Councillors if there are any other comments and I’ll just come back at the end for some just general comments on the merits. Thank you very much for both of you all of you answering these questions. And I do have these written out and I’ve circulated.

Could I ask that this being appended to the record so it’s there for the public to see these series of questions to the clerk? The clerk is gonna check on that for you. And while we do that, we’ll ask her to get back to you, but I’ll go to other members of council who wish to speak to this right now. And I know that you had mentioned at the start council, are you concerned about your time?

I just wanna let you know, you’ve got about two and a half minutes left of your five. Councillor McAllister. Thank you to the chair. I actually just wanna yield my time to Councillor Frank ‘cause I know she has to leave in a few minutes.

If that’s possible, just knowing that she does have a time crunch and she’ll need a few minutes left. Well, we typically go to committee members first, but certainly if committee members want to wait, I’m happy to go to Councillor Frank next, Councillor Frank. Thank you, yes, that was quite nice. I didn’t ask for that, so that’s great.

I just had one question to staff and I was just wondering if we can make phase two considerations contingent on Budweiser Gardens submitting a plan to achieve net zero by 2045. I did read in the report the section regarding what sustainability efforts Budweiser Gardens is doing, which I really appreciate. But I’m wondering if there’s perhaps a more thorough approach we could be taking with timelines and a plan that kind of outlined what the steps were, just given that it’s such a significant investment. So I was just wondering if we can make phase two contingent on those plans being submitted.

Ms. Barbara. Thank you through the chair. So given the facility was constructed and is by its very nature in arena and may not have been constructed at that time to the level that may require very significant investments to achieve net zero by that period of time, I know there’s a great deal of work that would probably need to go into them identifying what investments would need to be made that could significantly alter the ability to deliver that within the funding that is already there.

So I would caution that could have a significant detrimental effect on the success of being able to implement this because there is no additional incremental funding to be able to support that investment. And with respect to the operations, the city doesn’t provide any funding or anything to support that. It is all within the operation. So if the cash flow does not materialize to be able to make those investments, I don’t even know at this point in time what investments would need to be made to make such a facility net zero by that period in time.

It could be quite significant and would require likely additional investment that certainly the city of London does not have been approved in our budget. And I would suspect the same to be true of the operation, although they are trying to move forward step by step to improve that climate change sustainability. I believe based on the data, there are still at the initial stages to be able to have that data to identify exactly what even would be needed and the investment required to support that. Thank you, Ms.

Barbone. And Councillor Frank, just before I go back to you, I know you’re visiting and you joined us a little late after the committee had started, but I did wanna let you know Ms. Barbone has indicated already that any changes now, we are too late for the multi-year budget process because they are finalizing their business cases so that they can present them to us in a few weeks. And I’ll go back to you now.

Thank you, yes, appreciate that. And yeah, I definitely don’t wanna necessarily delay it. I think given the answer, I heard a couple times, you mentioned that you’re not really sure. So I think that given that you’re not sure if it would be significant investment or minimal investment, I would be interested in pursuing some sort of direction to Budweiser Gardens and OVG to look into this, because it also could be minimal and there’s also significant federal funding, I think available right now.

So I’ll leave it, that those are my comments. But at this time, I again appreciate the information that they supported, thanks. Thank you, Councillor Frank. I will return now to committee members, Councillor McAllister, you had yielded to Councillor Frank.

I’m gonna go back to you now if you want an opportunity to speak to this yourself. Yes, thank you. In reading through this, I actually agree with what’s been presented to us. In terms of what’s been said as well, I understand putting the revenue generating options to phase one, makes sense.

I understand why that was put forward. To me, it is one of our largest tourism draws. It brings in a lot of revenue, and in terms of the 80/20 split, I don’t have a problem with that personally. I do think we need a venue like this, and I’m supportive of this moving forward.

Thank you. Thank you, Councillor McAllister. I will go to Mayor Morgan next, but just before I do that, I just want to inform Councillor Trussow. The clerk has indicated that there are two options for your questions.

We can do an it being noted with the committee’s consent that the following questions were submitted by Councillor Trussow, or you could submit those on the public agenda for council, either of those options work. So when I come back to you, we’ll see if you want to get the first one on this. I’m gonna go to Mayor Morgan, but I just wanted to let you know what your two options are. Mayor Morgan.

Thank you, I just have a couple of questions about the food services contract extension. So first question is, I agree that when you look at the length of the extension, it’s probably, it’s a long extension. So the two questions are, is there any contemplation of breaking it up into smaller chunks of time, but with essentially the ability for renewal? And the second piece is, given, I just want to understand this a little care, the food and beverage is a commission-based model, and they provide a commission based on the percentage of sales back to the venue.

And then does that form part of then the city’s revenue that we generate from the facility, or does that just go to OBG? Ms. Barbong. So thank you through the chair.

So ovations, food services operates the concessions. They own and operate those concessions within Budweiser Gardens. The revenue earned by those concessions is earned by ovations. Because those sales occur within Budweiser Gardens, for the sales that occur, the commissions are paid to Budweiser Gardens, which form part of the total cash flow that is injected into Budweiser Gardens, of which the city receives a return.

So higher food and beverage sales would mean higher revenue for Budweiser Gardens through the commissions made on those sales that would then translate through, ultimately, the net cash flow received by the city of London. Mayor Morgan. So I guess what I’m trying to identify is, given the way that that formula works, is there any actual risk to an extended contract from the city’s standpoint on the revenue side? Because I’m certainly happy to consider breaking it up, but if there’s no risk to the stability of our revenues, aside from what the sales actually are, but the formula of how it flows back to us, then I’m not as concerned about it overall, the length of the contract.

So my question, I guess, is for our staff, and is there any risk to us and the cash flow that we receive beyond the unpredictable nature of how much people buy at an arena, to the length of the agreement in any sort of way? Ms. Barboon. Thank you through the chair.

So ultimately, the commission model was determined based on the building of the facility, because it limited the city’s risk with respect to the operation of food and beverage. So the supplier, ultimately, Ovation’s, who in this case operates it, Budweiser Gardens has been successful to date and has exceeded what the preliminary projections were when this facility was created. So the risk really is not on the city side, it’s on the operator’s side, and that they’ve proposed putting in a significant number of additional investment to operate the food and beverage, of which ultimately is part of this broader change to some of the grab-and-go and of those other things. So the risk of whether that fails or not, they ultimately, their sales, if the sales go down, ultimately, there’s an impact on the city of London with respect to the volumes.

So the risk really was mitigated from the city of London’s side to have the operator take on that risk if they weren’t successful, then it would have limited some of the city of London’s risk ultimately for investing and creating the infrastructure needed specifically with respect to that food and beverage infrastructure. So there is not a significant amount of risk because it is a related party, that was one of the items, that if it was a larger extension was built into the agreement that the city needed to concur so that it was aware that it is operating under that model through financial statements related parties are disclosed and the amount of that sales is typically identified because there’s ultimately more risk when you have a related party. So really it’s the model that the city already operates under, the significant risk of having a broader contract extension does not increase significantly for the city of London. Mayor Morgan.

Yes, and I know that they’ve put in capital before, asked for an extension. I think it makes sense that you put some money in yourself you wanna be able to know that you’ve got a period of time that you can generate revenue to offset that capital outlay. So I guess my question to you and our staff and based on the KPMG’s report is, given Ovation Foods capital investment that they’re willing to make in the food and beverage operations, you don’t see anything as unreasonable based on the length of time that they’re asking for, for offsetting that much like they’ve done in the past. I know the timeframes have been different for extensions, but I know this is a larger capital outlay than the previous ones.

So this is generally a line with what you’ve seen in the past. You don’t have any red flags on that period of time based on the level of capital investment, Ms. Barbara. Through the chair, so this was certainly an area that we looked to try to get a little bit of the benchmarking to see the models very quite considerably across the province.

So it’s very challenging to say that whether it’s something outside of the realm, it’s certainly a little longer, but that is based on the level of investment that OBG is requesting to ensure that they have a return ultimately to support that investment. So certainly the original extension, there was one extension that was granted in 2014, but the original term of the agreement went from 2002 ultimately. So it was already a significant term. This is a little bit longer based on the amount.

So I would say that the amount of the investment is reasonable considering the term. If you look at the previous amounts that were put in for those periods of time, this would be reasonable in terms of what was approved previously. Mayor Morgan, anything further? I’ll just make a brief comment and then I’ll listen to other colleagues.

So the reason why I don’t have a problem proceeding with phase one sooner rather than later is because phase one contains all of the investments that essentially are gonna drive more revenue of ultimately we partake in. And so I’m comfortable with the source of financing that our staff have recommended. I’m also comfortable with the phasing being predominantly front-ending a majority of the revenue drivers within the proposal. Ultimately that benefits all of the partners to try to drive additional revenue through the changes to the orientation of the food services as well as the expansion of the premium seating.

So to me that makes a lot of sense. I also think that’s why proceeding sooner rather than later is good for all of the partners. Like we’ve got the facility for a number of years under the contract in this partnership. The sooner we can make adjustments that are gonna drive more revenue, the better it will be for us.

Other general things that I like in the contract is I like a little bit of the front-ending of the city’s cash flow by lowering the debt, essentially the repayment of losses threshold downwards. I think that’s to the city’s advantage to start to see that return sooner rather than later so that we can utilize those funds for the many things that we need to utilize funds for. So I think there’s a number of positives in the restructuring of the relationship and I also appreciate the analysis that was done by KPMG on the return on investment. Ultimately we have a facility here.

We have many places that we can deploy money. In this case we have a unique fund that we can use that drives tourism and I don’t think anybody can question that Budweiser Gardens has been the most significant driver, that them in the convention center I would say together, the most significant drivers of tourism overnight stays in the city that we have. So to me, having that revenue tool that we do not have when we built the facility is a great source of financing for the reinvestment in the facility. So I’ll listen to my colleagues other questions.

I think phase one to me makes a lot of sense and I’ll be supporting it. I’ll let you know if I have any other questions but I appreciate the clarifications on the food and beverage side. That makes me much more comfortable with the term. I know it seemed long to me as well but understanding the structure of how that capital investment and then the payback works and then the benefit that we received from the food and beverage side in general makes me much more comfortable with the term.

Thank you, Your Worship. Any other questions or comments? Councilor Stevenson. Thank you and through the chair.

I was wondering if staff could just walk us through Appendix C, which is the financial projections on page 97? Certainly through the chair. So the Appendix C is essentially structured into two sections. The first part being the proposed projections based on the updated OVG proposal.

So what you see here is essentially the projections in terms of the city’s portion of the projected cash flows going forward as well as our estimated city surcharge revenue based on the ticket sales that happened at the venue. So you arrive at a total projected city cash flow. And again, this is through the term of the agreement. So this is through 2051.

So the projection is approximately $58.4 million of total cash flow to the city over that term assuming the expansion proceeds. The status quo section here is essentially what we can expect if the expansion does not proceed. So basically kind of proceeding as is. And what the challenges that we’re facing is the significant amount of losses that have been accumulated over COVID that will need to be repaid according to the terms of the agreement that need to be recovered from available cash flows before they’re distributed.

That’s gonna significantly limit the potential cash flow that the city will see in the coming years. So based on the analysis and KPMG’s review of the analysis we will likely be in a situation where we will only be receiving the minimum $50,000 per year that we are entitled to according to the agreement. We’re only likely to see that minimum $50,000 payment for the foreseeable future, excluding of course our share of estimated revenues on ticket sales. So realistically, the total city cash flow is estimated to be in the neighborhood of approximately $5.4 million over the remaining term of the agreement based on the status quo.

So that leaves an incremental cash flow, estimated incremental cash flow to the city of approximately 53 million. Again, I’ll reiterate Ms. Barbone’s earlier comments around the assurances that can be provided on this. Their assumptions and inherent in those assumptions is the unpredictability, but based on the analysis that’s been conducted, that’s what the projections are for the remaining term of the agreement.

Councillor Stevenson. Okay, thank you. So these are projections from now until the end of the term. So it said that in the first 20 years the net cash flow, if I see this right, the net cash flow to the city was 7.8 million in the first 20 years.

If we don’t do anything, we’re predicting that the next half will only have 5 million. But if we make this investment, we’re gonna get 58 million. Am I seeing that right? ‘Cause it seems like a huge, like we only got 7.8 million in the first 20 years, but if we make this investment of 26 million, we’re gonna get 58 million back.

You know, obviously no guarantees and everything, but that’s the prediction. Mr. Murray or Ms. Barbone?

So thank you for the chairs. So the first 20 years includes a number of years that all included COVID. So the initial years were quite significant on an annual basis. However, when we hit 2020 and COVID incurred substantial losses, those losses created zero return for the city of London.

And that’s ultimately where the crux of the changes with respect to the results that we’ve seen today. Up until 2020, there was a substantial cash flow that was coming to the city of London. And then we hit a grinding halt because the facility could not actually open and had to incur a cost. So through the agreement, the losses were mitigated because OVG360 has to carry those losses.

However, as future profits are made, they get to be repaid towards the losses first. So what that does is it minimizes the net cash flow ultimately that the city received. So that’s where you see when you look at the city cash flow on a status quo basis is that other than the 50th out, even though the facility may be very successful in the future years, until those losses are repaid, the city does not get any return. We get a $50,000 minimum repayment.

So that’s where you see the status quo is we’re not going to see because those losses are so substantial and there isn’t a significant ability to generate incremental revenue that we won’t see a significant amount of return assuming that profits continue in the future. So with respect to the proposed, however, that city cash flow is based on being able to drive incremental revenue. So this is based on the estimates that have been provided for the future 25 years then those estimates are where we see the incremental with respect to the revenue generation. Without those incremental revenue generation that’s where you see the status quo come forward.

But I will caveat is, and this is where we can give you assurance that the projections will not be exactly as has been estimated. That’s where the sensitivity analysis is quite important to temper that potential number of if things unforeseen occur and that revenue doesn’t get generated to the extent that they believe possible, that you could see that cash flow decrease and that it wouldn’t be $58 million it would result in. So if it came in at 50% as an example, the return might only be 2.2% for the city of London. So that’s where the sensitivity analysis is quite important, but when we try to compare based on the two proposals, what the status quo would be if the city did nothing versus putting in some investment.

So that’s where seeing those together is helpful. I can probably say without certainty, it won’t be that exact number. Our hope is that incremental portion of that revenue will in fact give a better return than the low amounts that we will continue to see under the status quo with no investment. Councilor Stevenson.

So, I mean, it’s a dramatic increase, $53 million more, right? Option A is five, like prediction, the projection is five million on one side versus 58 million. It seems really great. I’m just wondering why we don’t see it in the return on investment.

Like the numbers don’t seem that big. Is that because of the losses that have to be paid back? Like you would just think with that big of a difference that the ROI would be higher, but that’s like no doing calculations. That’s just like looking at it.

You’d think, hey, if we could spend 26 million and get an extra 53 million over the course of the next 23 years. Mr. Murray. Thank you through the chair.

The one thing I should clarify and I miss in not mentioning this in my earlier overview of Appendix C is that these are nominal dollars. They are not real figures adjusted for the time value of money or anything like that. That’s where the ROI calculations come in. They account for the time value of money and the fact that a dollar into the future is not worth a dollar today.

So the nominal dollars, yes, 58 million is the proposed total city cash flow, but when that gets discounted back in the ROI calculation, that’s why the number is what it is in that calculation. So just one final thing, it seems as though based on the projections that we’re saying this investment is going to realize a large increase in business in Budweiser Gardens, that’s what the projections are telling us, is that this investment will in all likelihood or is expected to have a large increase in revenue at Budweiser over the next two decades versus if we did nothing, is that correct? I see some nodding of heads both from our staff role, but also from the gallery. And so as we’ve allowed him to respond to some questions from Councilor Trussow, I’m also gonna ask Mr.

Oal if he wants to provide a comment on the return on investment piece and the increase in business that was just asked of our staff. As I recognize you are the business operator, so you may be better positioned than our staff to answer that. The answer is very simple, yes. The investment will increase revenues to Budweiser Gardens, which increases cash flow to the city and quite honestly to OVG 360 as well.

And that’s kind of part of the purpose of what we’re proposing. And I’m going to Councilor Stevenson, if you’ll be patient for a moment, just to be consistent with how I allowed Councilor Trussow’s questions to be answered. I’m gonna ask Ms. Finn if she wants to comment on this investment and its tourism component in terms of drawing increased revenue through the venue operations from a tourism perspective.

Yeah, certainly through you, Mr. Chair, the investment in the building is necessary in regards to increased economic impacts to the city, which we have very strong data that supports it, very strong measures in place, standardized measures in place that allow us to measure the economic impact to the city and to the province and to the country, in some cases, in regards to the importance of the events that we bring in. Whether they be sporting, cultural or other, they are important, the most important to tourism in London. Thank you.

Councilor Stevenson. Thank you, so I appreciate that explanation. If we think of, for me anyway, it’s gonna be an easy yes to say we could, we’ve got a projection of five million, or if we spend 26 million, we’ve got an anticipated projection of an additional 53 million coming back on top of it, aligning with our strategic plan of being a destination in a regional center and promoting culture and tourism. And as Councillor Frank says, some fun in the city too, we could really use it.

So I thank you all for your answers. Thank you, Councillor Stevenson. Any other questions or comments on this item? Councillor Trussau.

How much time do I have? You have about two minutes and 33 seconds. Thank you. Yes, and I would like this to be being noted and appended because I want this to get out to the public as soon as possible.

So I’ll just, I’m just gonna stop you right there and see if the mover and the seconder will consent to the, it being noted. I’m not seeing any objections to that. So I’ll ask the clerk to add that as an it being noted. Go ahead, Councillor.

Okay, so let me start by saying I’m disappointed that I didn’t get a second to put this motion on the floor today. I will be bringing it back to council where I do hope, am I supposed to stand up ‘cause I said council? Oh, I will be bringing it back to council where I will reintroduce this and I will hope to get a second and I will endeavor to get some of these questions further answered. I didn’t get to go over all of them.

One thing’s for sure in terms of costs and revenues, if we go ahead with this, we are going to have the debt service. And yes, that might be offset, but if the staff report, if I read the staff report, right, it’s going to be $700,000 a year under the 10 year plan and 101.2 million over the long plan. So that is certainly going to be a cost. The other cost I see here is the opportunity cost, which I think is undoubtable.

And that is if we deplete the account without any guarantee that there’s going to be additions to it, which there might be, that is going to preclude other worthy claimants on this turf account from seeking funding. So councilor, I just want to caution you. Ms. Barbone indicated that there would still be tourism infrastructure reserve fund monies available that we are not depleting the account on that.

So that’s contrary to what staff has told us. Well, what staff told us in the report is that there’s approximately $9 million, that there’s approximately $9 million of expenses for phase one, and there’s approximately $3 million currently in the account. So in short and in summary, I think there’s still too many questions here for us to just go ahead and do this without further inquiry, including getting more information about what some of the assumptions were under the KPMG report. We’re not really told what some of those are.

And again, I think this is pretty speculative. So all in all, I am not on the merits right now, taking any position against these expansions. And I am in no way making any claim that this is not an important part of our local infrastructure and that it plays a very important role in promoting tourism. I’m not making that claim.

What I’m making the claim as I think is a responsible steward of these funds is that more information is needed before we can proceed on this. And I will re-raise these questions at council to the extent that I can in my five minutes. And thank you, thank you very much. And I really appreciate everybody, especially the chair and the clerk indulging by questioning.

And you have my list of questions and they will be in public and I hope they can be pursued. Thank you very much. Thank you, councilor. And you wrapped up with 18 seconds to spare.

Mayor Morgan. Yes, and I wasn’t gonna speak again, but I do want to clarify something with the treasurer because I understand the councilor’s comments about the municipal accommodation tax portion. But I do not want it to stand that we are doing something that we’re not doing with the balance and the fund or the way that we’re paying this back over time. So the way I read the source of financing report, you’re going to issue a debenture for the cost of phase one.

And then we’re going to pay back the principal and you’re just of that debenture over a period of time based on the inflows to the municipal accommodation tax, the city’s portion, which means if there’s lots of tax coming in, you’re still only paying the principal and whatever the payment is with principal and interest. So there will be other funds available depending on how much hotel tax comes in for other opportunities in the tourism industry. I just want it to be clear on the record how we’re financing this from the municipal accommodation tax perspective because I think it’s important for people to know about the availability of that fund over time. And also are you making a large principal payment initially with the existing balance and the fund or not?

Mr. Murray. Thank you and through the chair. So the mayor is correct.

The intention would be to utilize a debenture to fund this contribution to this project. The intention would then be to service that debenture, the cost of which we estimate will be in the neighborhood of 700,000 to $1.2 million per year depending on the term of that debenture. Our intention would be to first utilize the incremental cash flows that are coming to the city to pay for all or a portion of that 700 to $1.2 million debt servicing cost. In the event that our incremental cash flows are not sufficient, only then would we be utilizing the Tourism Infrastructure Reserve Fund to fund the difference.

I will note that the Tourism Infrastructure Reserve Fund receives, at least in 2022, received approximately $1.6 million of inflows from the city’s share of municipal accommodation tax revenues that is roughly in line with kind of pre-COVID levels of inflows. So obviously there are no guarantees going forward in terms of what the annual inflows will be but that’s kind of the neighborhood of the inflows that we’ve seen in recent years. To the mayor’s other question, no, the intention is not to make a down payment. So to speak, the intention would be to fund the full $9 million contribution through a debenture.

Mayor Morgan. So that is an incredibly helpful clarification for me. So we’re going to make a capital investment. It’s gonna generate, by all expectations, more revenue.

We’re gonna use that revenue to service the debt, that new revenue to service the debt. And if it’s not enough to cover it, only then are we gonna use the incoming flows of municipal accommodation tax, which if we had years like 2022, exceed what would be the full debt servicing anyways. So there’s going to be, unless there’s some sort of pandemic again, it seems to me, I knock on wood or whatever I have to do to make sure that doesn’t happen. It seems to me like there’s gonna be lots of ability within the municipal accommodation tax to assist with other tourism opportunities.

It seems to me if the revenues come through with the additional investment, we’re going to have a way where the investment is essentially paying for itself over time to a certain degree, which is exactly what you wanna do when you make an investment. And we’re not going to make a big down payment with the existing balance in the reserve fund, which does open up all over. So yes, there is an opportunity cost to spending any sort of money, but it is not like an absolute opportunity cost that precludes us from investing in other tourism opportunities in the city through the municipal accommodation. I think it’s a very responsible way to finance such a venture and I appreciate our staff clarifying that.

Councilor Stevenson. Thank you. That just had me thinking that the 53 million, the additional 53 million that we’re talking about is strictly from the profit sharing from Budweiser Gardens. So we haven’t calculated or talked about the, all of the tax revenue that all the hotels of people, you know, if we’re talking about this level of increase in profit, we’re talking about a full city with hotels that will, in theory, create more money in that tax and will allow us to have other projects.

Is that a reasonable assumption? Well, I saw it nodding heads from Ms. Finn and Ms. Barbone, but I’ll go to Ms.

Barbone on that one. Yeah, thank you through the chairs. So that is strictly the cash flow that would come in the city of London. The ancillary benefits of the economic development for not only the hotels that would generate the municipal accommodation tax, but revenue to those that might eat out to pre-show or after from supporting the vibrancy of the downtown and the economic impact on the restaurants and other patrons that may go out to service businesses in the downtown.

Thank you, Ms. Barbone. And Councilor Stevenson, you got about 25 seconds left. Yeah, and it’s just that I get all of the spin-off potentials, but in terms of increasing and having that tax money available for other things, if we’re looking at it, projecting it 10 times the amount of revenue coming back from Budweiser Gardens, it’s reasonable to say maybe that the taxes that will be coming in from hotels stay specifically might be at least two times, if not 10 times.

Is there any way to speculate on that? I don’t know if Ms. Barbone can speculate on the hotel occupancy rates. I don’t know if Ms.

Finn would be able to, on the hotel occupancy rates either, that might be a question that’s beyond their ability, but I will go to Ms. Barbone to see if she’s got a comment on that. So certainly we have not looked into potential correlation with increases in the municipal accommodation tax, we’ve based estimates on hopefully achieving the same level of municipal accommodation tax that we’ve received to date. Certainly that’s something that is way outside our ability to quantify through this report.

I don’t know if Ms. Finn maybe through their work with the hotels might be able to have further information, but certainly not something that I’d be able to draw correlation. And Ms. Finn, I know you may not have that information at your fingertips either, I don’t know if you wanted to comment or not, I’ll invite you to do so if you wish, or if you wish to follow up with counselors individually afterwards, I know you can do that as well, but we’ll see if you have anything to add.

Certainly through you, I’m always open to meeting with counselors as need be. I can tell you through our data that we are tracking since we are in recovery and beyond from a pandemic, we have posted about top 10 in overnight stays nationally. We are strong in terms of the programs that we continue to do to drive overnight visitations to our city. Thank you, Ms.

Finn. I have no other speakers on the list. And counselors other than counselor and counselor, members of the committee have used up most of their time. So I’m gonna see if counselor trust I want to say 18 seconds or if we’re gonna call the question.

Can I thank you? Unfortunately, you can’t bank it for another item counselor. That would require the chair to start operating a spreadsheet on time for other items. I’ve made my points.

Thank you very much. Okay, so with no, Councilor Prabble. Thank you, Chair, I just wanna make a comment even though I’m a visiting counselor. So thank you for this opportunity.

Just in terms of the hotels currently year on year, we are up about 25% in revenues, the ref power, which is really very strong, very positive. And I do wanna thank the hotels and the hospitality industry for helping us collect this money because they are the ones who are collecting this money from the visitors to London. And it is greatly appreciated because it gives us these opportunities to invest, re-invest, and collect more money for our entire municipality community. Thank you very much.

Thank you, Councilor Prabble. And that was well under year five minutes. So I have no other speakers. So I’m gonna ask the clerk to open the vote on this.

Closing the vote in the motion carries four to one. Thank you, colleagues. That concludes our items for direction. We have nothing on the deferred matters additional business list today.

So our only remaining portion of the agenda is the confidential session. I’m gonna look for a motion to move in camera. Moved by Councilor Stevenson, seconded by Councilor McAllister. And we will ask the clerk to open the vote on that for us in just a moment.

I’ll just say I’m in favor. I logged out ‘cause I have to go. Closing the vote, motion carries five to zero. Okay, colleagues, we’ll have to clear the gallery and we will have some staff members and media leaving us temporarily.

We will be going into closed session in just a couple of moments. And then we will return to public session after that is over. Thank you, everyone. We are back in public session.

I’m just gonna ask Councilor Stevenson to report out from our confidential session. Thank you. I’m happy to report that progress was made on the item that we went into camera for. Thank you, Councilor.

And that concludes our agenda today. So I just need a motion to adjourn. Moved by Councilor Stevenson, seconded by everybody, all those in favor. Motion carries.