April 15, 2024, at 1:00 PM

Original link

The meeting is called to order at 1:00 PM; it being noted that Councillor P. Van Meerbergen was in remote attendance.

1.   Disclosures of Pecuniary Interest

That it BE NOTED that Councillor C. Rahman disclosed a pecuniary interest in item 2.1, having to do with expropriation of lands and the East London Link Project Phase 4, by indicating that Fanshawe College is her employer.

2.   Consent

Moved by P. Cuddy

Seconded by C. Rahman

That Consent items 2.4 to 2.7 BE APPROVED.

Motion Passed (5 to 0)

2.4   Year 2024 Tax Policy

2024-04-15 - Staff Report (2.4) - 2024 Tax Policy Report - Full

Moved by P. Cuddy

Seconded by C. Rahman

That, on the recommendation of the Deputy City Manager, Finance Supports, the following actions be taken with respect to property taxation for 2024:

a)         the proposed by-law as appended to the staff report dated April 15, 2024 as Appendix ‘A’ being a by-law setting tax ratios for property classes in 2024, in accordance with Sub-sections 308(4) and 308.1(4) of the Municipal Act, 2001 BE INTRODUCED at the Municipal Council meeting to be held on April 23, 2024, it being noted that the 2024 Municipal Tax Ratio By-Law has been prepared reflecting the equalization of the average property tax increase in residential and multi-residential classes with no change to other tax ratios;

b)         the proposed by-law as appended to the staff report dated April 15, 2024 as Appendix ‘B’ being a by-law levying tax rates for property classes in 2024, in accordance with Sections 307 and 312 of the Municipal Act, 2001 BE INTRODUCED at the Municipal Council meeting to be held on April 23, 2024; and

c)    the Civic Administration BE REQUESTED to invite the Municipal Property Assessment Corporation to provide an update at the May 6, 2024 meeting of the Corporate Services Committee on municipal property assessment in the Province of Ontario.

Motion Passed

2.5   Year 2024 Education Tax Rates

2024-04-15 - Staff Report (2.5) - 2024 Education Tax Rates Report March 28 Final - Full

Moved by P. Cuddy

Seconded by C. Rahman

That, on the recommendation of the Deputy City Manager, Finance Supports, the proposed by-law as appended to the staff report dated April 15, 2204 as Appendix “A” being a by-law levying rates for 2024 for school purposes in the City of London BE INTRODUCED at the Municipal Council meeting to be held on April 23, 2024.

Motion Passed

2.6   Court Security and Prisoner Transportation Program Transfer Payment Agreement

2024-04-15 - Staff Report (2.7) - Court Security and Prisoner Transportation Program - Full

Moved by P. Cuddy

Seconded by C. Rahman

That on the recommendation of the Deputy City Manager, Finance Supports, the proposed by-law as appended to the staff report dated April 15, 2024 as Appendix “A” BE INTRODUCED at the Municipal Council meeting on April 23, 2024 to:

a)    approve the Ontario Transfer Payment Agreement between His Majesty the King in right of Ontario as represented by the Solicitor General and The Corporation of the City of London for the provision of funding for the Court Security and Prisoner Transportation Program (“Agreement”) appended as Schedule “1” to the staff report;

b)    authorize the Mayor and Clerk to execute the Agreement;

c)    authorize the Deputy City Manager, Finance Supports to approve any future amending agreements between His Majesty the King in Right of Ontario as represented by the Solicitor General and The Corporation of the City of London with respect to the Court Security and Prisoner Transportation Program (“CSPT”);

d)    authorize the Mayor and Clerk to execute any future amending agreements between His Majesty the King in Right of Ontario as represented by the Solicitor General and The Corporation of the City of London with respect to the Court Security and Prisoner Transportation Program (“CSPT”) approved by the Deputy City Manager, Finance Supports;

e)    authorize the Deputy City Manager, Finance Supports (or designate) to execute any reports required by the province under the Agreement; and

f)    authorize the Deputy City Manager, Finance Supports to approve and execute an agreement between The Corporation of the City of London and the London Police Services Board regarding obligations in respect of the funds and obligations in connection with the Agreement.

Motion Passed

2.7   Board of Directors - Federation of Canadian Municipalities - Councillor S. Franke

2024-04-15 Submission - FCM-S. Franke

Moved by P. Cuddy

Seconded by C. Rahman

That the following actions be taken with respect to the communication dated March 18, 2024 from Councillor S. Franke regarding standing for election to the Federation of Canadian Municipalities’ Board of Directors and her associated expenses:

WHEREAS the Federation of Canadian Municipalities (FCM) represents the interests of municipalities on policy and program matters that fall within federal jurisdiction;

WHEREAS FCM’s Board of Directors is comprised of elected municipal officials from all regions and sizes of communities to form a broad base of support and provide FCM with the prestige required to carry the municipal message to the federal government;

WHEREAS FCM’s Annual Conferences and Trade Show will take place June 6-9, 2024, in Calgary, and June 2025 in Ottawa, during which time the Annual General Meeting will be held and followed by the election of FCM’s Board of Directors;

BE IT RESOLVED that the Council of The Corporation of the City of London endorses Councillor Skylar Franke to stand for election on FCM’s Board of Directors for the 2024/2025 term;

BE IT FURTHER RESOLVED that Councillor Skylar Franke be reimbursed by The Corporation of the City of London, outside their annual expense allocation, for her campaign expenses in seeking re-election to the Board of Directors, in an amount of up to $500, upon submission of eligible receipts; and

BE IT FURTHER RESOLVED that Council assumes all costs associated with Councillor Skylar Franke attending FCM’s Board of Directors meetings, the FCM Annual Conference and AGM and the Trade Show, during the 2024/2025 term.

Motion Passed

2.1   Expropriation of Lands - East London Link Project Phase 4

2024-04-15 - Staff Report - RT - Expropriation East London Link Project Approval PHASE 4 Report 1 of 3

Moved by H. McAlister

Seconded by P. Cuddy

That, on the recommendation of the Deputy City Manager, Environment and Infrastructure, with the concurrence of the Director, Construction and Infrastructure Services, and on the advice of the Director, Realty Services, approval BE GIVEN to the expropriation of land as may be required for the East London Link Project Phase 4, and that the following actions be taken in connection therewith:

a)    application be made by The Corporation of the City of London as Expropriating Authority to the Council of The Corporation of the City of London as approving authority, for the approval to expropriate the land required for the East London Link project Phase 4;

b)    The Corporation of the City of London serve and publish notice of the above application in accordance with the terms of the Expropriations Act;

c)    The Corporation of the City of London forward to the Ontario Land Tribunal any requests for a hearing that may be received and report such to the Council of The Corporation of the City of London for its information; and

d)    the proposed by-law as appended to the staff report dated April 15, 2024 as Schedule “B” BE INTRODUCED at the Council meeting on April 23, 2024, to authorize the foregoing and direct the Civic Administration to carry out all necessary administrative actions.

Motion Passed (3 to 1)

2.2   2023 Year-End Operating Budget Monitoring Report

2024-04-15 - Staff Report - 2023 Year-End Operating Monitoring Report

Moved by H. McAlister

Seconded by P. Cuddy

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

a)    the 2023 Year-End Operating Budget Monitoring Report for the Property Tax Supported Budget, Water Budget, and Wastewater and Treatment Budget BE RECEIVED for information. An overview of the net corporate positions are outlined below, noting that the year-end positions include the contributions listed in b) and c):

i)    Property Tax Supported Budget surplus of $28.0 million;

ii)   Water Rate Supported Budget surplus of $3.0 million;

iii)   Wastewater and Treatment Rate Supported Budget is balanced at year-end;

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

b)    the contribution of year-end Property Tax Supported, Water Rate Supported and Wastewater and Treatment Rate Supported Budget surplus to the applicable Contingency Reserve in accordance with the Council approved Surplus/Deficit Policy BE RECEIVED for information:

i)    $9.7 million to the Operating Budget Contingency Reserve, noting the balance remains under its target;

ii)    $1.1 million to the Water Budget Contingency Reserve, noting the balance remains under its target;

iii)    $0.5 million to the Wastewater and Treatment Budget Contingency Reserve, noting the balance remains under its target;

it being noted that the contributions to the respective budget contingency reserves were made to replenish these reserves that were utilized to finance the 2023 cost of statutory development charges exemptions and discounts resulting from recent legislative changes that were otherwise unfunded;

c)    the request to fund the 2023 London & Middlesex Community Housing operational deficit of approximately $33 thousand BE APPROVED (see Appendix “B” of the staff report for Letter of Request).

Note: The reported year-end position is subject to completion of the 2023 financial statement audit;

it being further noted that the Corporate Services Committee received a communication dated April 11, 2024 from C. Butler with respect to this matter.

Motion Passed (5 to 1)

2.3   2023 Year-End Capital Budget Monitoring Report

2024-04-15 - Staff Report - 2023 Year-End Capital Monitoring Report - Full

Moved by H. McAlister

Seconded by P. Cuddy

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

a) the 2023 Year-End Capital Budget Monitoring Report BE RECEIVED for information, it being noted that the life-to-date capital budget represents $3.5 billion with $1.9 billion committed and $1.6 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(c)-209;

b) the capital budget adjustments in section 2.4 BE APPROVED to transfer available surplus funding to projects requiring additional funding:

i) $650 thousand from EW384222 – Lead and Copper Water Service Replacement Program to EW1103 - Outer Drive Reservoir Demolition;

ii) $600 thousand from EW384222 – Lead and Copper Water Service Replacement Program to EW110423 – Southeast Pumping Station Optimization and Renewal;

iii) $428 thousand from EW383321 – Watermain Construction and Repairs to EW110423 – Southeast Pumping Station Optimization and Renewal;

c) the status updates of active 2020 life-to-date capital budgets (2020 and prior) having no future budget requests, as appended to the staff report as Appendix “B”, BE RECEIVED for information;

d) the following actions be taken with respect to the completed capital projects identified in Appendix “C” as appended to the staff report, which have a total of $2.3 million of net surplus funding:

i) the capital projects included in Appendix “C” BE CLOSED;

ii) the following actions be taken with respect to the funding associated with the capital projects approved for closure in d) i), above:

Rate Supported

A) pay-as-you-go funding of $58 thousand BE TRANSFERRED from capital receipts;

B) authorized but unissued debt financing of $113 thousand BE RELEASED from the capital budget; 

C) uncommitted reserve fund drawdowns of $1.3 million BE RELEASED back into the reserve funds which originally funded the projects;

Non-Rate Supported

D) uncommitted reserve fund drawdowns of $746 thousand BE RELEASED back into the reserve funds which originally funded the projects; and

E) other net non-rate supported funding sources of $281 thousand BE ADJUSTED in order to facilitate project closings.

Motion Passed (5 to 0)

3.   Scheduled Items

None.

4.   Items for Direction

Moved by P. Cuddy

Seconded by C. Rahman

That items for direction 4.1 to 4.2 BE APPROVED.

Motion Passed (5 to 0)

4.1   Application - Issuance of Proclamation - London Run for Ovarian Cancer Week

2024-04-15 Submission - Proclamation-London Run for Ovarian Cancer

Moved by P. Cuddy

Seconded by C. Rahman

That based on the application from London Run for Ovarian Cancer, May 6 - 12, 2024 BE PROCLAIMED London Run for Ovarian Cancer Week.

Motion Passed

4.2   Application - Issuance of Proclamation - 32nd Falun Dafa Day Anniversary Celebrations

2024-04-15 - CSC - LondonProclamationApplication - 32nd Falun Dafa Day - Full

Moved by P. Cuddy

Seconded by C. Rahman

That based on the application dated April 4, 2024 from Falun Dafa Association Canada, May 13, 2024 BE PROCLAIMED 32nd Falun Dafa Day Anniversary Celebrations.

Motion Passed

5.   Deferred Matters/Additional Business

None.

6.   Confidential

None.

7.   Adjournment

Moved by P. Cuddy

Seconded by H. McAlister

That the meeting BE ADJOURNED.

Motion Passed

The meeting adjourned at 2:51 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 (2 hours, 7 minutes)

Hello, Sarah. Yes. Oh, hi, this is Sam. Hi.

I just wanted to make sure that you see me and I’m logged in properly. Yes, yes, thank you. Great, I’ll just mute. Okay, good afternoon, everyone.

I should just grab our seats. Okay, welcome to the seventh meeting of the Corporate Services Committee. Please check the city website for additional meeting detail information. Meetings can be viewed via live streaming on YouTube and the city website.

The city of London is situated on the traditional lands of the Anishinaabek, the Haudenosaunee, and the Leno Wampock, and I’d have wondered. We honor and respect the history languages and culture of the diverse indigenous people who call this territory home. The city of London is currently home to many First Nations, Métis, and Inuit today. As representatives of the people of London, we are grateful to have the opportunity to work and live in this territory.

We have all of committee here. And we also have some visiting counselors as well. The city of London is 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 519-661-2489, extension 245.

And I will look to disclosures of pecuniary interest. Okay, go ahead, Councilor Roman. Thank you. I’ll be just, I have a cuniary interest, sorry, on item 2.1, expropriation of lands, East London link project phase four as one of the properties involves my employer.

Okay, thank you for that. I have no two poll 2.1, which is our first consent item. So we are on item 2.1, expropriation of lands, East London link project phase four, looking for any other items to be pulled separately. Okay, go ahead, Councilor Stevenson.

Thank you, 2.2, please. Any others, okay, can I then perhaps get a motion to have 2.3 to 2.7 consent? Chair, if you don’t mind. I had Councilor Mann-Ragan.

Yeah, like 2.3, more or less go, I mean, it goes along with 2.2, if we can call them both of them at the same time, if that’s possible. Okay, yep, I’m just gonna leave those then. So 2.1, 2.2, and 2.3 will deal separately. Looking for 2.4 and 2.7 to be put forward as a motion.

Councilor Cuddy, your seconder, Councilor Roman. Okay, any comments on 2.4, 2.7? Okay, go ahead, Councilor Frank. Thank you and appreciate you accepting me at this committee.

I want just to speak briefly to 2.7, which is my request for support from this committee and then from the Council to run for re-election for the FCM board. At FCM, we do annual elections. And so now is the time before the upcoming AGM for me to submit my documents. So just seeking your support in running for this re-election.

I did highlight in the letter a variety of the things I was able to do over the past year, which is attend many of the board meetings and committee meetings and advocacy week at Ottawa, as well as submitting reports to corporate services. And including, I wanted to highlight that most recently from, as directed from our past council meeting in regards to cost overruns and escalations on some of our capital projects, bringing that as a resolution to the FCM board, which was approved by the FCM board in March. And so it will become one of our federal lobbying positions. And that is highlighted and bold in the letter, but specifically lobbying to the federal government to work with municipalities to address these cost overruns.

And so looking forward into the future, trying to make sure that that is created as a contingency within our various projects. So just wanted to highlight the work that’s been done. I really appreciate the support that I’ve had from this committee and council in the past and hope to continue bringing London’s positions and needs to the federal level. Thank you.

Okay, thank you, Councillor Franken. Thank you for your hard work on FCM, appreciate it. Any other comments or questions for 2.4 to 2.7? Okay, see, oh, go ahead, Councillor Rhomme.

Thank you, I just wanted to again, recognize Councillor Frank’s work on FCM. I will say that for the public, those that perhaps aren’t maybe as informed on FCM, the Councillor does give considerable time. And so this is much appreciated. And I do appreciate the updates.

I would like to see more dancing on Instagram though. Thank you, Councillor Rhomme. Yes, more dancing. Okay, any other discussion, 2.4 to 2.7?

Okay, seeing none, none online. We’ll open that for voting and that is 2.4 to 2.7. Councillor Stevenson, I vote yes. Closing the vote, motion carries, five to zero.

Okay, thank you, so sorry. The other three will be on deferred matters. So we are now on two items. We don’t have any scheduled items, so we’re on items for direction.

And we do have two applications for proclamations. So I will put 4.1, 4.2 as a motion together. We’ll put that forward. Okay, Councillor Cady, Councillor Rhomme, thank you.

Okay, so we got 4.1, 4.2 on the floor. Any questions or comments on those two items? This is items for direction. Seeing none, we will open that for voting.

Councillor Stevenson votes yes. Closing the vote, motion carries, five to zero. Okay, thank you. And now we’re on deferred matters.

So go back up to the list, which is, we’ll start with 2.1. And this is the item that Councillor Rhomme had to recuse our stuff. So looking for any questions or comments on item 2.1. Seeing none, this was for the expropriation of lands, the East London, length phase four.

Most of these properties were on Oxford Street. Councillor Cady doesn’t have any objections, we have to move on ‘cause that’s mostly in your ward. Okay, so we will open that for voting. Second, I’ll move this, can I get a second here?

Councillor Cady, all right, open that for voting. Closing the vote, motion carries, three to one, with one abstained. Okay, we are now on to item 2.2. I would like to put 2.2, 2.3 together.

As Councillor van Mer, we’re gonna said they were related. We’ll call them separately, but if you want to speak to those two items, go ahead, this is your time. Okay, Councillor van Merrigan, you’d like to go first? Thank you, Chair.

First of all, I’d like to thank staff for a very fulsome report on both the operating and capital, but it goes without saying this is a big number in terms of a surplus. And I think because of the size of the number and just the timing of having a four-year budget with significant tax hikes, there’s a lot of misconstrued do-do information that’s floating around. It begs the question, are we being overtaxed? I mean, a lot of the constituents I’m talking to, that’s the first thing they think of.

They see a big number like that, along with a big number for a tax hike, and the question then becomes, well, is this part of overtaxation? So maybe I could get staff to perhaps comment on that. In their view or in their expert opinion, how do they see this in a more fulsome light? Yeah, I will go to staff, but I would also say in the report, the staff had already previously identified a number of these items were things that were kind of outside of our control.

They were external factors, but I’ll let staff speak to that more. I understand that, Chair. I think we need more clarification and it needs to be spoken of because we’re not getting it in the main media in terms of the more fulsome picture. All people seem to be hearing is that it’s just a massive surplus on the heels of a big tax hike.

So if I could just get staff to… Yeah, absolutely. So staff, if you just want to speak to that more, go ahead. Thank you through the chair.

So with respect to the surplus, certainly many of these items, as we highlighted in the report, we’re outside the control of civic administration and the council and were things that we either were unexpected or did not go forward to the extent that we were expecting. So with respect to interest rates alone, overnight rates rose from March of ‘22 to July of 2023. We went from 0.25% all the way to 5%. So a very significant increase that was sustained for a large part of the year.

One of the things that because we do budget monitoring and the green bin was the other program that although we were hopeful that that would be implemented prior to the end of the year, that was not implemented until January. So that does not have an impact on the 2024 to 2027 multi-year budget, those were already accounted for. But what we do have is these costs or these increased surplus or revenues that resulted in that resulted in a one-time savings. So those savings for a large part were factored into the creation of the multi-year budget.

Specifically with respect to interest income, we did include as part of the multi-year budget a significant increase in interest income over the 2024 through to the 2027 to have a permanent sustained increase in revenue resulting in a decrease in the taxes that would have been reflected as part of council’s approval. So certainly from that perspective, there were one-time events that created a surplus of which we have a surplus deficit policy that primarily with respect to the debt part does provide an ability to decrease lower tax levies in the future as a result of that debt being extinguished and having an alternate source. And primarily given the increase in debt over the course of the multi-year budget, certainly applying the surplus towards the policy in that respect would have a positive influence on the multi-year budget. Okay, thank you, Steph.

Follow up, Councillor van Merrigan, go ahead. Sure. So what I took away from that is it was well-factored into this current budget cycle that we would have larger than expected beneficial investment income. And so that again was factored.

What I also take away here is that this will help with future budgets and keeping tax rates lower. Is that correct to staff, go ahead. Thank you through the chair. So yes, we can confirm that investment revenue was increased by almost 4.5 million annually as part of the 2024 to 2027 budget.

And the debt reduction will certainly alleviate the future impacts of issuing debt on the additional debt approved as part of the multi-year budget. And if I could, another question, Chair. Yeah, go ahead. I think it’s reasonable because it is such a big number and there are some moving parts that go along with it to explain to the public that we take a more, perhaps, fulsome active communications procedure or activity here and make some sense to maybe post it on the city’s website.

Would staff be able to do that without a motion? Would they agree that that might be something that might be positive to go ahead with a more fulsome communications activity? To staff, I mean, even a press release, I guess, like something. Or an entity, yeah.

And the website, just to get more information out there. Yeah, go ahead, Steph. Thank you through the chair. So certainly having a press release is something that civic and men administration has what’s in its control to do.

So certainly if that’s something that would be helpful to communicate better to the public on the balance of this, we’d be happy to proceed in doing so. Okay, thank you. And sorry, would you need a motion or is that something that staff could take on? Certainly we don’t need a motion to proceed in that manner.

Okay, thank you. Do you have any other questions, Council Member? One of the last part I’d like to make is how much of this surplus needs to go back into the system to help with backfilling the homes built facts faster act in terms of DCs and the impact that all had on our treasury. To Steph, thank you through the chair.

So the numbers that you see reported have already factored in the legislative development charges exemptions that we have incurred for 2023. So as indicated in recommendation B of the report, there was a total contribution of $9.7 million made to our operating budget contingency reserve to deal with the property tax supported DC exemptions and then correspondingly $1.1 million on the water budget contingency reserve and half a million to the wastewater budget contingency reserve. So that’s already factored in these figures. What we will say though, is that these legislative exemptions and discounts will continue to be an issue going forward.

And so I would anticipate that we will have similar pressures coming up for 2024, albeit we did approve a budget business case through the budget process to provide some funding. Certainly the level of exemptions that we’ve seen in 2023 and I would anticipate continuing into 2024 continue to be significant and will continue to be a pressure going forward as well. Okay, thank you very much, to Steph and thank you chair. You’re welcome.

I’m sorry, I just do have to get someone to move and second this, I jumped the gun on that one. I’m happy to move, could I get a seconder? Okay, Councillor Cudi, thank you. And we’re just doing these separate.

So this is just 2.2, so looking, well actually, sorry, I already have a speaker’s list. I’ve got Councillor Stevenson next, go ahead. Thank you. To follow up on some of those questions, I’m just wondering why the emphasis on it being outside of the controller council and unexpected when it comes to the income side of things, when we deal with that all the time on the expense side of things, we’re dealing with all kinds of unexpected outside of our control expenses.

So why this distinction when it comes to money in on the investments? Go ahead, Steph. Thank you through the chair. So it’s important to note that our investment income budget was first developed back in 2019, leading into the 2020 multi-year budget.

So that was when the budgets were first set. That was a much different interest rate environment at that point in time. Fast forwarding, certainly the opportunity to adjust would have been through the 2023 budget update process. However, that work was being undertaken in the summer of 2022.

As the treasurer just noted, the rate hiking cycle had only just started at that point in time. We had no idea to what extent interest rates were going to climb and at what pace. So it would have been virtually impossible to forecast, you know, to what extent we would have realized additional investment revenues based on not knowing exactly how many interest rate hikes would have been happening. So as the treasurer did notice well, we have right sized to some degree for the 2024 multi-year budget.

We need to be mindful and careful not to go too far though, because we do not want to create a future budget whole when interest rates inevitably come down again as many economists and market forecasters are anticipating. So we’ve taken a prudent approach to right sizing, we believe for the 2024 multi-year budget, but it’s something that occurred very quickly, very rapidly, and not something that we would have had the ability to adjust for, even through the 2023 budget update process. All up. Thank you.

Yeah, thank you and through the chair. Yeah, I totally understand how it was unexpected and unable to be forecasted. My comment is around that there’s sort of this distinction about it being— it just seems to the income side of things that’s unexpected seems to be treated differently than the expense side of things, which is automatically absorbed by the taxpayer. So in the news article, at least it refers to it not being taxpayer money and sort of this thought that it’s— like to me, if we’re absorbing all kinds of high inflation and interest rate expenses on the negative side, that it’s great that we’ve got these unexpected incomes.

And so it was just a comment that seems to be a lot of emphasis on that, and I just think it’s true of many of our expenses, which the taxpayers are automatically having to absorb. So I just wondered when— because we would have known there was this— and I’m also assuming this is a significantly higher surplus than usual. I’m curious as to how much higher it is than we’ve seen in the past. And if we’d known about this, was there any discussion around bringing this forward at the multi-year budget time so that council could have some sort of a say as to whether we might use this to reduce the property taxes for 2024?

Because it is 2.5% in very unexpected and difficult to swallow 8% plus increase this year. So I’m just wondering if there was that discussion around potentially bringing this forward so council could possibly do something different at the time of setting the rate. And also what the distinction is between the savings that were brought forward in terms of fiscal savings and the P1 that usually happens for the annual updates, where it’s the budget right sizing. Because I know that didn’t happen in the multi-year budget, but we’ve got P1 budget right sizing that usually comes forward on the annual update and how that is different than this amount.

To staff, go ahead. So I think I’ve got all of them. So with respect to the timing, so we have a policy that we follow with respect to surplus deficit. So it does not normally get countered as part of the multi-year budget.

Although knowing that rates were increasing, when we set the multi-year budget, we certainly took that into account so that the budgets that we put forward already reflected that. Using one-time surplus to automatically apply and factor into the following year’s budget is not something that we would normally do, given we have a policy, a council approved policy that we follow. So certainly from a projection perspective, we did incorporate those changes in for a permanent reduction that were as part of that. The P1 that you are referring to is the adjustments we make as part of the annual budget update that we would bring forward where we need to make amendments to bring forward.

So in 2023, there was an amendment that we brought forward for the investment income. It certainly was not to the extent of which we saw, but keep in mind, we had been deficiting on our investment revenue lines for a number of years. Those deficits, we did not bring forward and amend our budgets to incorporate. So even though there was, and again, this is where interest rates fluctuate quite significantly throughout the course, we try to look at what our estimate is to come up with something that’s reasonable so that we’re not creating permanent deficits and certainly not creating something that’s too significant that we would need to bring down.

So when we did bring that forward, we know that we’ve got in our feeling a good estimate going forward to recognize higher than average rates in our multi-year budget, also balancing off the fact that we need when we issue debt each and every year, we have to pay the higher rates on the debenture’s side. So there is a bit of a balance and because our rate issuances, our debt issuances were a little bit lower in amount, we did not have the pressure from the budget perspective on the expenditure side because our amounts that we went out to issue the debt were lower. So that offset the additional interest rates that we were going to have to pay. So certainly we’re looking at the interest rates that create the revenue as well as balancing off the payments for the debt that we issue each and every year.

And I think there was one more question that I forgot. Yes, thank you, that’s helpful. And I do appreciate the fact that all of this has been factored into the 2024 to 2027. So my question was knowing that this surplus was so large, 2.5% would have been the impact on the tax rate and knowing that we were facing this 8% increase.

And I understand that we have a council approved policy but understanding all of the unusual and unexpected. Was there any discussion around bringing that information to council at the time to see if we did want to stick with that policy or if there was the opportunity to lower the tax rate for 2024? Move to staff, go ahead. Thank you through the chair.

So certainly through the multi-year budget, there was a business case that did take a one year revenue into account that was one time that had been there historically. That was adopted as part of the council approved budget that was a one time. So certainly that reflected surplus and things that were not needed historically. So from that perspective, we did bring something forward with respect to 2023.

At the time the budget was created, we were not close to your end. We’re still in the process of having our external audit to go through our numbers. So until that process is complete, we really weren’t in a position to bring something forward, particularly as the year end process, there are other expenditures that might have also, yes, this was one particular revenue side but we need to look at everything in totality to actually confirm what that end of year surplus deficit actually is. So given that that process is still underway, we’re comfortable with bringing it forward that we’re close enough but we certainly were not in January during the budget discussions.

Councilor Stevenson, do you have a follow? I do. Okay, and I appreciate that. And we just finalized, I guess it was February, March but the number is significant.

So at this point, if council were to want to do something different, like I appreciate the policy and I’m sure it served us really well, but given that we haven’t had an 8% before and given that we’ve got this huge surplus, if council were to take some or all of this and want to reduce the taxpayer levy, what would be the process? Through to staff, go ahead. Thank you through the chair. So certainly that is something council could consider to do.

Certainly what I would say is it is a one time payment. So whatever one time amount that if you decrease one year, it will have a corresponding increase the following year. The other component that you’ll need to keep into account is that from a budget perspective, given the strong mayor’s legislation, ultimately the tabling and release of the budget will be up to the mayor through the strong mayor’s power. So he would ultimately have jurisdiction as to what he includes in the budget that is tabled.

What I would say is given the allocations that are here, the debt certainly has an automatic impact on reducing future costs related to debenture issuances on as it stands, and the other two sources certainly also, because they are in reserve funds, also give the ability for council to consider the use of that as a funding source towards the budget at a later point in time. So should council wish to go that route? You don’t need to make that decision today. That would something that would need to be incorporated as part of the 2025 budget that could come forward at a later time, noting that they are a part of a reserve fund.

Okay, Councillor Stinson, go ahead. Thank you, and just to clarify there on the strong mayor’s power in the annual budget. So what role of any does council play in next year’s annual update? Thank you through the chair.

So the process we anticipate, and we’re still working through the details. So it’s very preliminary and very early in the process. However, we would anticipate that the budget process will be somewhat similar from a council deliberations perspective as it was this past year during the multi-year budget. So the mayor would propose his budget.

Council would then have the 30-day window and the opportunity to make amendments to that budget. And then the opportunity then exists for the mayor to potentially veto any amendments that council wishes to make, or then correspondingly for council to potentially override mayoral vetoes if they so choose to do that. So we’re still working through ultimate timelines and when this will come forward, but I would envision a very similar process to the one that transpired for the multi-year budget. Okay, thank you for the questions.

Go ahead, Councillor Stinson. Yeah, thank you, that all sounds familiar. So I just have two other sort of more specific questions here. On page 23 in 4.1, where it talks about the unfunded exemptions, so in the second paragraph, it says the total unfunded exemptions that are required to be paid by the city for 2023 to backfill the city services development charges reserve funds.

I know we talked about this at budget time. I have this, it’s this thing about the word required. Can I just get staff to confirm who it is that is requiring that? Go ahead, staff.

I thank you through the chair. That would be a municipality. So the as exemptions are granted, the full amount of the development charges are not collected and that backfill cannot be borne by other development charges. That has to be borne by another source, which would be ultimately through the municipalities, a tax levy or the rate supported sources.

Thank you, go ahead, Councillor Stinson. Thank you, but just to confirm that’s a decision staff have decided, right? Like because it’s not legislated that we must put it in, is it? To staff?

Yes, thank you. As we had discussed through budget, through the business cases, this is a legislated requirement through the development charges act. Thank you, I’ll go back and refresh myself on that one. So the other thing is in the recommendation, it talks in B, it talks about the breakdown, the 9.7, 1.1 and 0.5 for the 2023.

And I see where they’re going to, but where are they coming from? It just, I wasn’t clear on that where these amounts are coming from. To staff? Thank you through the chair.

So the amounts that you see, the recommendations that you see in part B are contributions that have already been conducted or completed based on the authority of the city treasurer as per the policy. Those contributions have already been taken out of the overall year in position and contributed to those reserves to provide that funding source. So those are already completed. And then the subsequent transfer will be done from the operating budget contingency reserve to the relevant city services reserve funds to backfill for those required exemptions and discounts.

Go ahead, Councillor Stevenson. Thank you. So where did that money come from though? To be able to put that in for 2023?

Just not clear where it came from. To staff? Thank you through the chair. So that’s part of the overall year in position.

So that came off the top essentially before the reported surplus was finalized. So it’s part of the overall year end surplus for the corporation. Go ahead. - Thank you.

The chair, so that’s in addition to any regular funding of the reserves, these additional amounts came off the top to make up for this, what I referred to there, the unfunded exemptions. Go ahead, staff. That is correct. Thank you.

All right. Got quite a list developing here. Any committee members, would they like to speak? Got some visiting on the list already, not seeing any?

Do you have Deputy Mayor Lewis and then I have Councilor Perbal and Councilor Troso after that? Go ahead, Deputy Mayor. Thank you, Chair. And thank you, staff, for the report.

I think you’ve highlighted some very key factors for consideration in this. I do agree with Councilor Van Mirberg and I think some public information to press release some additional information on the website would be helpful that we could point people towards. But I want to speak in general about this situation and why this is really important for people to understand. First, as staff have indicated, the 50% of the surplus that will go into debt reduction is future tax year savings.

It means that we are paying less to service the debts that we have as a city in the years moving forward. So we can see adjustments to future property tax rates because we have less interest to pay out on our debts, which we do pay out from our budget. So it’s really important that we, first of all, do not muck around, in my opinion, with the debt reduction portion, not only is it key to the future tax rates, but it is also key how we handle debt in terms of how we maintain our AAA credit rating as a city. And there may be people who think, well, I don’t care if it drops a grade, no big deal, what does it mean to me?

It impacts the rate at which the city can borrow. Therefore, it does impact everything we do because we are going to have to pay higher rates to borrow if we lose that AAA credit rating. If folks think that this is not something that Moody’s monitors in terms of evaluating our AAA rating, then they’d be absolutely wrong because they do monitor this. They wanna see us handle debt responsibly.

And so it’s really, really key that we take what we have from this, what I’m gonna call a bit of a windfall from some interest rates that I don’t think anybody expected to see this high when interest rates started rising, take this one time money and pay down our debt. It’s a responsible thing to do. The other thing that I really want to focus on is the contributions to the two reserve funds and why this is important. We know, and for those who are new to council, you might not be aware, but the infrastructure gap reserve fund.

That’s something that for several years now, council has taken their foot off the gas pedal on. So our contributions have not been as significant as they had been maybe five or six years ago. And that’s okay because a reserve fund, you can put the gas down, take the gas off a little bit and deal with that in terms of its impact on the budget. But when we get this opportunity to backfill with a surplus, that really helps us maintain the contributions at the rate they’re at.

So staff then don’t have to bring forward a budget amendment next year and say you have to increase taxes to increase the reserve fund contributions because they’re too low. If we put some surplus in, then we can start to replenish them and get them back to where they were. The community investment reserve fund at the end of the multi-year budget process was for all intents and purposes zero. We drained that reserve fund to pay for a number of business cases that councilors thought were very important to see in the multi-year budget, but they didn’t want it to impact the tax rate.

So we drew from that. We drew it to almost nothing. It needs to be replenished. That’s critical so that we have the opportunity to fund some initiatives that we may want to fund moving forward.

Now, I’ve got an underlying though, and I say this respectfully, but before anybody starts getting ideas about, oh, let’s go back and do some more multi-year budget business cases. This is one-time funding, even when it goes into a reserve fund. So you cannot use this for funding permanent ongoing operational costs because the money does run out. You can use it for a one-time cost for something.

You can use it for a cost that’s a fixed period of time. In the past, we did that with the ambassador program and that pilot program ultimately wound up. Councillor Cudi and I have actually identified it as a potential source for a pilot project that we’re suggesting at SPPC small. That is something that staff will have to determine whether it’s the appropriate source of funding or not.

But again, it’s for a fixed period of time. So it’s not an ongoing cost. We cannot start to use this to backfill board and commission operating dollar shortages that they didn’t get in the multi-year budget, if it’s an ongoing cost. So it’s really important that we treat this really, really respectfully, and I cannot say this enough.

I really recommend following staff’s recommendations on this because it is prudent fiscal policy for us to do this. Okay, thank you. Councillor Peruzza indicated that he’d like to switch his order. So I have Councillor Trozzo next on the list.

Go ahead, Councillor Trozzo. Thank you very much. Reading through the staff report, I saw a number of occasions reference to the council approved surplus deficit policy. And I never saw a citation to that.

I never saw a link to that. Where would we find that? To staff, go ahead. Through the chair, all of our council policies are on the city website.

Certainly we’d be happy to send the council or the direct link if that would be helpful also. Yeah, I think beyond saying it’s on the city website, it might be nice to get a link. So could you send me that right away after the meeting? Sure, staff can do that.

Do you have any further questions? Oh, yeah, I have quite a few. Okay. Again, I’m going to try to, I want to try to go through as many of these as I can at this meeting so as not to have to bring them, bring them up at council.

I would, I’m wondering why we didn’t get an option. I’m wondering why we didn’t get an option in this staff report, even though it would be outside of the surplus deficit policy, which I understand correctly that we can alter that. We’re not bound by that, is that correct? To staff, go ahead.

Thank you through the chair. I believe the councilor is referring to the surplus deficit policy and altering the recommendation. Certainly not with, so although that’s a council approved policy, certainly the council has the prerogative that not withstanding the council policy, they could make a change and have a different recommendation. Okay, so if the council wanted to entertain returning at least some of this surplus to the taxpayers in the form of a lower levy, that would be, that’s not what’s being recommended, but that would be an option that we have, is that correct?

To staff. Thank you through the chair. So certainly that is something that the council could choose to do. Although I would note that the 2025 budget release and initial tabling would be subject to what the mayor’s budget would incorporate to put forward.

So certainly that would be up to the mayor and then through the process that would ensue, there is the opportunity for council amendments. Well, I was listening, thank you again through the chair. I was listening to councilor Stevenson’s questions before and I got the sense that it would have been premature to raise these types of questions now. Would this be the appropriate time to raise those if any councilors wanted to raise those?

If I’m understanding your question, councilor, if the councilors asking whether there would be the prerogative for the committee to amend the recommendation, yes, that is something that the committee could put on the floor. Would it be possible for the committee to say, we want to maybe not deal with the capital infrastructure gap reserve fund or the community investment reserve fund portion of this, but maybe alter the debt reduction portion? Could we, would the council have the prerogative of doing that? To staff?

Yes, certainly the committee could do so. What, was there, see, I’m just trying to understand why that wasn’t put forward as an option in the staff report or whether we could get some supplemental information on that before the council meeting. So the council would have the full possible range of alternatives before the council meeting. Just to staff.

Thank you, through the chair. So certainly, staff have applied, council’s approved policy, and we believe it is prudent to do so because that ultimately achieves quite significant tax reductions in the future with respect to the debt primarily. Certainly, if you’re wishing to apply that towards the budget, it is a one-time reduction. So there would be a corresponding increase in the following year, and it would be subject to what the mayor would be putting forward as part of the budget.

I’m not sure Mr. Murray has more specific impacts that he might be able to provide for you. Thank you, through the chair. I would just add that staff have put forward the recommendation in accordance with the policy as we believe it’s extremely prudent, extremely prudent at this point in time to be following the policy.

Just to provide a little more color on the challenges and the importance of the allocations, according to policy, through the multi-year budget, council added more than $330 million of tax-supported debt over the next 10 years through the decisions made through the budget process. We believe it is extremely, extremely prudent to continue to apply the 50% allocation to reducing that debt burden. Similarly, on the infrastructure gap element to the surplus deficit policy, council will recall that the infrastructure gap business case was not approved through the budget process. So that makes this one-time allocation through the surplus deficit policy extremely important as well, and was previously alluded to the community investment reserve fund has essentially been drained to next to nothing.

So it’s an opportunity to replenish that. And I might add to give council a funding source to use at your discretion, whether it be through the 2025 budget process or at another point in time to use those funds as you wish. So we believe it’s never been more important as it is right now to apply this surplus per policy. Thank you.

Yes, and I just want to focus on the interest when the interest rate piece of this week. We don’t really know for sure that the interest rates are going to go down to any considerable measure over the next period. So we sort of are speculating. How close are we to having a problem with our, you know, with Moody’s, with our credit rating if we don’t put all of this money into debt release?

Are we on the edge of that or do we have a nice cushion? Just to have. Thank you through the chair. Unfortunately, that’s not a question I can answer ‘cause there’s not a single factor or even single handful of factors that will drive that.

What I can say in general terms is that Moody’s generally focuses on two things in looking at our credit rating, our debt and our reserve funds. As I just noted, we added considerable debt through the multi-year budget period, whether that would be problematic in the eyes of Moody’s. I can’t speculate, however, we are trying to be as prudent as we can be in managing our debt, of course. The other element is reserve funds.

And I can say that we did tap into some of our reserve funds to some degree during the multi-year budget and also did not approve additional investment into some of our reserve funds through the multi-year budget. So these recommendations allow us to address both elements that Moody’s looks at primarily in their review of the city. They also look at not just how things are standing right now, but what is the outlook? How are we trending?

How are we projecting into the future? And they will be looking at what our future forecasts look like coming out of the multi-year budget. Okay, the reason I’m raising a lot of these questions is I think many of our taxpayers have been hit very hard as a result of the increased interest rates. And I’m just wondering if there’s some way that we can try to ameliorate that a little bit by returning at least some portion of the interest rate surplus to voters.

It may seem strange coming from me saying, well, let’s use this to lower the tax levy. But given how high the tax levy was and given how hard many of our residents have been hit by interest rate increases, I would like to get a little bit more information about this as an option. And I will ask some more questions at the council meeting, but I’m hoping you can provide us with a little bit more information on this before that. And thank you very much for letting me speak at this meeting and I hope my points are well taken.

Thank you very much. I don’t think staff want to comment further on that. Go ahead if you’d like to, but do you have any further comments to Councilor Troso? Okay.

  • All right. So we have Councilor Pribble next. And thank you, Stephen, so much. Excuse me, thank you, Mr.

Chair, to the staff. Thank you, by the way, and for this report, and I totally agree that according to the staff, sorry, to the Council’s policy. And I wanted to ask you, we finished our multi-year budget and we kind of have it pretty safe that we even included PL3 with 21 and a half million dollars for the bill 23, et cetera. If you can answer to me, if you didn’t, and I totally understand that the forecasting forecast, even though we could have been kind of somehow closer where we’ll be heading, because the interest rate starting to be high already over a year ago.

But what would happen if we didn’t have this surplus? Because we finished our multi-year budget, we were pretty confident with it for the next four years that we are actually pretty safe. We are not putting our cooperation and Londoners into the risk. If we didn’t actually have this surplus, because some of the objectives I’ve been hearing in last 10, 15, 20 minutes, critical, crude and fiscal, we depleted balances.

So if all this has been so critical to address this surplus, why didn’t we address it through multi-year budget? The staff? Thank you through the chair. So we did include and address some of this of what was anticipated to be permanent and ongoing as part of the multi-year budget.

So interest revenue in particular was adjusted upward to reflect a higher interest rates. We also note that the Bank of Canada is still forecasting two to three potential rate cuts, also in the next six to eight months. So there’s a balance. And I certainly, for any of our services, we look to try to estimate and adjust throughout the year where needed.

Certainly, even at mid-year, we did forecast there was going to be a surplus, but we did not know or envision that interest rates were going to continue at such a high rate right through into the start of this year. But to the extent that we could look at a permanent increase, we did increase interest revenue, and that was factored into the multi-year budget. Thank you, so we’re gonna try out a different way. If we didn’t have this surplus, how would we deal with these three accounts which we are all gaining 50, 25 and 25%?

If we didn’t have this surplus, what would we do with these balances? What could we do with staff? Thank you through the chair. So certainly, if there was not this extent of surplus or even a smaller surplus, then there would not be a source to move forward, to decrease debt reduction, or authorize some amount to go towards debt reduction.

There would not be an amount added to the capital infrastructure reserve fund to support the infrastructure gap. And certainly the balance in the community investment reserve fund would be close to zero. So those are opportunities that council would not have to decrease future rates into the future. We also have the assessment growth policy that does look at opportunities to decrease very similar same way to decrease debt in the future.

So when we look at all of our policies as a whole, that is how we look at through, and I think some of this is through our financial framework that we brought forward, is to lay out how all the policies fit together and look at sustainability, and try to, over time, limit the impact of tax rate increases in the future. Obviously, there are things that are not foreseen, but that is what the surplus deficit policy is there, to provide guidance, to be able to make prudent decisions when those opportunities arise. And that is how Moody’s looks at our fiscal framework to try to assess how we’re managing our debt levels and our reserve funds to ensure that we make prudent sound financial decisions over the long run. I follow up, Councilor Provost.

Thank you, and I understand that Moody’s looks at it, but again, if you have the surplus, then we will be kind of where we are currently right now. I do understand that there are certain opportunities that there’s these funds that we are gonna be addressing with, but what I’m looking, but actually some of the questions we already answered, as I said by you, staff, and actually by my fellow councillors, but I do think that both policy for this, as well as for the annual growth assessment, I do believe that Council, we should revisit it, and we should revisit it, that we do have the kind of the final word or the decision how we will treat it, that these reports are not gonna be just for information, and we are gonna accept the information. I think our, and this policy, I would be totally fine with if we had kind of the average increase of levy low, or one of the lower ones in Ontario, but as we know, and we know why, and we have good reasons why, but it’s really one of the highest, one of the highest in Ontario. And I do understand that we are paying of the debt for our corporation, but are we creating additional debt for our citizens, for residents of London?

And that is my issue kind of where I’m stuck, and this is difficult for me, because if I look at some of these, and if we were to even put this, or majority of this into the reserve fund, and we spread it over four years, we are looking 20,000,000, 75, we are looking at potentially 1% per year, per year potentially savings, potentially even more, because some of the money would be again, earning interest, if it was in the reserve fund for it. And so what I’m trying to say is that we are, and we are decreasing our debt, no doubt, that it’s gonna be in the long run, it’s gonna be cheaper for the Londoners, yes it will, but again, it’s much longer effect, and much smaller effect than right now, we have many, many Londoners who are struggling, and we put on them very high interest rates, sorry interest rates, very high levy for the tax increase. And this is the thing that I hope, and to us as a Councillors, we’ll take it back, we’ll revisit it, and I do know Councillors next week, but I, you know, some of the things that I receive the answer is that yes, we can do one off, let’s say next year, and potentially decrease it, but what I’m a little bit skeptical about this one off, or one way opportunity, are we actually gonna address what’s already in the budget now, are we gonna do a new thing that’s gonna cover, that’s not even covered, right, in the budget, therefore again, the resident of London wouldn’t get the benefit of it besides the service, there’s another one that’s coming tomorrow for SPPC, very positive, very great thing, but it’s a new thing, again, it’s not saving the money to the Londoners, so I would say I’ll finish with the last question to our staff actually. If you look at the situation we are in, what we are putting proposal for next four years, and especially this year and next year, if you look at cost-benefit analysis in terms of the future, paying off the debt, and yes, in over the years, paying 0.25 amounts less instead of making the higher difference in Londoners, Londoners daily lives, which is right now, do you still believe this is the best way, or are there any other opportunities within a week before it goes to council, then we can look at it and really address this in a way that we take care of these.

Again, it’s not I’m not saying to do $32 million, oh sorry, 20 plus three, I think it is so $31 million towards the tax levy, but to do a combination, so we really address all levels, and again, this is a thing that we are talking $31 million, which is a surplus, we didn’t expect that, thank you. And before I let staff respond to that, I think, ‘cause I’ve been hearing a bit of a theme going on, I just wanna point out to my colleagues that, I mean, this is our policy, and I am hearing a lot of like, well, why didn’t staff speak to this, what I mentioned is like, this is the policy that they’re following, they’re being prudent, they’re positioning themselves in terms of what the city will do with this money, but the decision, I mean, is ours, right? So I think, I don’t wanna keep asking staff for like speculative answers in terms of like, well, like how best to serve Londoners, ‘cause really that’s our responsibility, right? I think they’re doing their job in terms of following the policy, that they’ve allocated the money, how they see serve the city best, but in terms of, there’s a political element here that I think we keep dancing around it, I think we have to acknowledge that that’s on us, and then we know what to respond.

No, Chair, I totally agree, but I’m just looking for the cost benefit analysis. Go ahead, staff, on the cost benefit. Thank you, and through the Chair, what I will say, Councillor, is that I wanna reiterate that this surplus, as any surplus, is one-time money. So certainly, you could benefit the 2025 tax levy increase, a 28 million, let’s say $28 million surplus, translates into roughly a 3.4% reduction.

That would be roughly a 3.4% reduction on the 2025 tax levy increase. However, again, it is one-time money, and the problem, as far as high tax levy increase, would simply be shifted to the next year, because that money will not be available to offset the tax levy increase in the following year. So, again, if we’re looking for sustainable reductions to the tax levy, we need to be looking for permanent reductions as far as expenditures are concerned, or additional permanent revenues of some variety, in order to provide those sustainable ongoing savings to Londoners. The application of this surplus to 2025, yes, it would reduce about 3.4% off next year, but it would shift that 3.4% increase to the following year, and we’d be looking at it roughly a 9.1% tax levy increase for 2026.

So, I don’t debate the benefit of a one-year impact, certainly it does have a one-year impact, however, it’s not a permanent ongoing, sustainable reduction in taxes. Follow up, Councillor Peruzza. Thank you, and to the last question, yes, and I know I keep hearing it that if we do it, then I do understand the cumulative effect. But my question is this, but we could potentially, I don’t know if it’s according to our policy, but have a reserve fund that, if we talk about the amount you just mentioned, let’s say $28 million, we put in there, and then we fund virtually 1% of the budget for over four years.

So, that will bring us to 1% each year down, and plus for the year two, three, four, it’s still an interest. Just to have, go ahead. Thank you, Chair, that may be the case, but then once you get to year five, that one-time money has been exhausted, there is no more one-time money left, and you now have a tax levy pressure at the outset of the next multi-year budget. So, that is something, according to our strategic financial framework, we really try to avoid creating a tax levy pressure on the subsequent multi-year budget process.

Follow-up? No question last comment, but that’s in four years from now. And right now, we have many Londoners who are facing remargaging their homes. Interest is high.

Yes, in four years, we don’t know what’s gonna be, and potentially it could be even higher. But again, I believe we need to address the issues now and very near future. So again, we don’t take care of only of our debt, but we take care of the debt of the Londoners, who are actually a big majority source of our revenue for the city. Thank you.

Okay, thank you, Councillor Prabble. I didn’t have Councillor Stevenson, but Mayor Morgan has also asked to be on the list, and he hasn’t spoken yet, so I’d like to go to him first. Go ahead, Mayor. Thank you, I appreciate colleagues’ conversation so far.

I’ll try not to be repetitive, ‘cause I wasn’t here for some of the conversation, but I would just, I wanna add my voice to whoever may have said that we should follow our policy. This is not our debt, it’s Londoners’ debt. The debt with their paying down is their debt. It’s the debt that I’ll pay, my children will pay, their children will pay.

And so putting money by policy towards debt reduction is paying everybody back a little bit. It’s like putting it in a reserve fund and reducing the budget artificially for a few years is artificial for a few years. Not issuing debt and paying it over 40 years is gonna lower our costs for decades. There’s a reason why we have a strategic financial framework and why we have a policy.

There’s also a reason why some of us, I can’t speak for others, but some of us made the decisions we did in the budget process. I didn’t fund the infrastructure gap business case because I knew we had other policies in place that could actually help with that challenge. And you see that before us today, $7 million into infrastructure gap. We have other tools at our disposal when we follow our policies consistently.

So paying down debt is absolutely critical. And I know that I came in and I heard people talking about well, how important is the debt to Moody’s? Like I’ve done the interviews with Moody’s. They ask the head of council to do those.

It’s really important. Where we’re going on issuing debt that binds the corporation for upwards of decades is incredibly important to our ability to borrow money in the future. So paying some of that down and giving us more space gives us options in the future to meet the challenges we have. Well, at the same time reducing the operating costs on that debt and providing relief in multiple budgets moving forward.

There’s a piece in here, the Community Investment Reserve Fund piece. That’s a council discretionary fund that money is being put into. You can let it put into that fund. And for everybody who wants more information or wants to think about it, you can decide how to fund that another day.

Whether you want to fund projects, whether you want to use it in the budget in some way, putting in that fund actually gives it a space to fill up the fund, think about it. And when we got proposals coming back to us on potentially funding parking in different parts of the city or audits or things like that, like the guess where the money is going to come from, probably the Community Investment Reserve Fund, right? We’re going to have a source of financing for those opportunities and allow council the flexibility. So reducing the debt, dealing with the infrastructure gap, which again is not our gap.

It’s Londoners assets that we’re investing in here and Londoners debt that we’re paying down, as well as giving council flexibility throughout the course of this year next, with the contribution of the Community Investment Reserve Fund, I think puts us in a very good spot for decision-making in the future. And I agree, like I would love to lower everybody’s taxes all through the year. But if you want to do that, we got to make tough decisions in the budget process. You need to make it permanent.

Artificially lowering it for a few years is not going to get anybody anywhere, except dealing with this problem four years down the road for two or three, depending on how long you want to use it. And if council is going to move this direction and actually not reduce the debt, like then the table budget has to consider changes to our capital plan down the road. Like if we have the opportunity to adjust that, and we issued over 300, I think 300 and some odd million, I see Mr. Murray nodding, 330 million, I think of new debt in this multi-year budget.

We have a chance to like not issue some of that. Like that’s a good financial decision, right? Be a good decision if you were a homeowner too. If you have the opportunity to avoid cumulating debt at a time where the interest rates are one of the highest, they’ve been in, you know, a good number of years.

So I support the application of the policy. It doesn’t preclude us from making some decisions on a portion of this fund. The community investment reserve fund is also when money goes into the infrastructure gap. Yeah, there’s some ability to shuffle between funds assuming it hasn’t been spent in the future too.

So there’s some ability to shuffle this around, but I just wouldn’t recommend anybody touch the debt reduction portion of this at all. And if you didn’t, if you supported not funding the infrastructure gap business case in the budget, you should probably let the money flow into it here so that we’re at least putting some money away to that through our various policies. And for someone who said this is like staff are following our policy, this is a council decision. This is a report for decision.

This isn’t an information report. This is a report where we’re deciding to apply our policy in this case. And I think we should. Okay, speakers, I’m just gonna take this opportunity.

I haven’t spoken yet either, I am adding to the list as we go. And just to what the mayor has said. I mean, for me, like the community investment fund is a very useful fund. I think we need to have a discretionary fund.

There were a lot of community initiatives that we all have. There are things in the multi-year budget that weren’t funded, but there are issues that come up across the city that we need that money for. And we’ve seen that. We have motions that come before us.

And the first question, which I’m sure causes a lot of anxiety for staff is find us a source of funding. And I think that a lot of the time that’s the tough part is to find that money. And I think having that fund added to, I think we’re down to $200,000, I believe, which is quite low for something like that. You’re not gonna have a lot of things that we’re able to fund through that.

So I know we spent a lot of time in terms of talking about like lion’s share of this going to the debt, which I think is a responsible policy to follow. But I just like to add that there is a component in here that gives us the power to use that money on our initiatives that we’re gonna see, I’m sure, across the city, especially when times are tough. This is another opportunity for us to use that money to allocate where we see the need in our city. So I just wanted to speak to that ‘cause I know we spent a lot of time talking about the other things, but I do think there’s an importance with the community investment fund.

I do have next, well, I don’t mean to keep shuffling you Councillor Stevenson, but Councillor Rama would like to speak as well. So do you okay holding your questions? Okay, go ahead, Councillor Rama. Thank you and through you, Chair.

The chair first, thank you to staff for the report. And again, for answering questions around our policy and how we should follow that policy. I appreciate that. I wanted to ask a question about 4.1, specifically around the $16.8 million and how we’ll treat that $16.8 million when it comes in.

Because I think that that also needs to be factored into our discussion as we’re looking at this. And to staff, go ahead. Thank you, through the chair. So certainly with respect to the contribution to fund the development charge exemptions, we knew throughout the budget process that we were starting to see the staff were in the process of doing the work to quantify what the exemptions were and to track them specifically.

So we had a sense that they were tracking higher than we had initially anticipated. And certainly we did put something forward through the multi-year budget. Over time as they ramp up, they could fluctuate quite significantly from year to year, depending on what developments are actually put forward. So that’s something that we are looking to enhance our processes to track that as they occur.

So we have a better sense throughout the year. We did not have a sense of exactly what those exemptions were till we hit closer to the end of 2023. So we’re fortunate to have a surplus that we are able to fund those exemptions or we would have needed to dip into a reserve fund to fund those. So certainly that is something we’ll be monitoring very carefully as we proceed through to 2024 and beyond.

I follow up. Thank you, quite a few. So for the 16.8 million, when it is realized, it would come in and we would follow our same policy at the time and it would be treated as under the same policy to go into our debt and then the 50% the 25 and the 25. To staff, go ahead.

So through the chair, just to be clear, the 16.7 million is exemptions that have already occurred throughout 2023. So those are exemptions that were granted that are now short within our reserve funds. So that amount has already been taken off the top. The surplus that we’re allocating with the 50, 25 and 25 has been taken subsequent to the allocation to the reserve funds.

So going forward in 2024, if there is, hopefully the budget will have a contribution to provide the backfill for that amount. But if we are short, then we would be looking to surplus or and or reserve fund to try to seek with that backfill of that source of cash would be. Follow up, go ahead. Thank you, so the way I read this in this report is that the province still has not given us that 16.8 million dollars.

But we see that money as it said in the, in what we’ve heard, we’re supposed to be made whole. When that comes in though, what would that, how would that money be used is what I’m asking. Would it be, it would, the same policy would apply? Staff, thank you for that clarity.

So if the province were to provide a source of financing to backfill this, certainly then we would have a revenue that is unexpected and would create surplus in 2024. In that case, then assuming that there isn’t any other challenge, it would come forward as part of the surplus and would go forward. So certainly it would go through our surplus deficit policy is how I would anticipate it and be reported as part of the corporate surplus going forward in the event that that occurred. Cool.

Thank you. Do we have any indication that other cities are planning differently with that potential transfer from the province? Just to have. Thank you through the chair.

So certainly what I would say is, and I think I said this throughout the budget process, is that historically through the Development Charges Act, there have been exemptions already as part of that legislation. Those were funded through the municipal budgets. I don’t expect that these will also be treated any different. However, certainly the advocacy has been very strong and that initial comment was made that they were looking to make us whole.

I have not seen anything that would suggest that that transfer payment is worth coming in the near future. Cool. So the way I read it and what I’ve been hearing as well is that our indication is that we don’t anticipate the province is going to pay us back for that $16.8 million. And so, I mean, that’s concerning for me that we are then, again, putting that back on taxpayers when we could be doing something different with that $16.8 million.

What I worry about is that if the province is following closely, they see us in a surplus position and they see us then being able to use the surplus as per our policy. I can imagine why they wouldn’t pay us back for that reason that we have this surplus and that we’re using it this way. However, I do think if we said, for instance, notwithstanding our council policy, should the province put forward or transfer the $16.8 million to us in the future that we will use these for tax savings for residents of the city, something of that sort. I do think that at that point, then it should be incumbent on us to look at ways to allocate it differently.

And so I’m thinking, I agree with what we have here, but I wonder if what we need to ponder is how we do that in an notwithstanding our policy way so that we’re all thinking about that future offset. And I realize it’s one time money as well, so we do have that challenge as well, but perhaps we can think about it differently and be creative. To have one responder, take that in his comments. Through the chair, the only thing I would say is that we’ve just had recent legislation that’s come forward where they’ve released the phase in, which was going to anticipate it to have a very, very significant impact.

The exemptions were still provided for within that recent legislation. So there’s certainly nothing that I have heard through my channels that suggests the province will be doing anything different, but I do know through all my discussions with other regional treasures is that they are all proceeding to fund this, knowing that this is a legislated part of the Act and the DC Act that we do need to backfill. So it’s prudent to do so, and then should funding come forward, it would be simple at that time to be able to reallocate and or do something different. The only other alternative we would have would be to defer projects within the DC study, which is not going to assist council in achieving their objectives.

Go ahead. Thank you. Thank you to you, just to follow up, I’m just wondering, and I saw the mayor’s hand go up, so I’ve made the he’s anticipating my question. I’m just wondering how we are going to communicate to the province that we’ve now quantified this to $16.8 million, and that we expect it to be paid back and whole.

Okay, I’m going back to the mayor to that one, go ahead. Yes, I’m happy to answer that. If you’ll indulge me, Chair, I just a couple of comments on what Councillor Ramen said and what the deputy city manager said. So first off, I don’t want council to not think we weren’t successful in our advocacy positions in part.

The removal of the phase in of the DCs is like a significant, was a significant cost coming down the road. And for those who did not have the option, like we did to defer our DC by-law, an immediate, immediate substantive concern on the part of most municipalities. And so this is like a very good thing, and the province actually moving towards making us whole. But it’s not complete yet.

And we’ve been very clear that there’s more to do, including this particular thing. In fact, when I was in Queens Park on Thursday, I did have a chance to speak directly with Minister Calandra, and I raised what we did in our budget on so that I can raise the surplus piece, because I hadn’t read the report at that time on Thursday, but I did raise what we set aside in our budget through the legislative case number three to start to have to account for this, and that it is now an ongoing tax concern for Londoners. And this is now going to start to become the next piece of our advocacy on make it whole, or make us whole, because what we have now is starting to have like real actual dollars in data and decisions that we’re making. So the advantage of being made whole on this isn’t just what you’ve suggested, and that’s giving council the option to not withstanding the policy under those circumstances to perhaps provide some tax relief, but also to back down the contributions that we’ve started putting into the reserve fund directly through the ongoing tax increases, and I believe in the budget, it was about a half percent impact, which we could then back out of the budget as well.

So there is a significant piece here that irrespective of the assessment on whether it will be successful. I remember early on people saying we’re never gonna be successful in getting them to back down on the phase in, and they’ve through constructive and collaborative dialogue understood the impacts on municipalities and made those changes. We’re not stopping the advocacy on the other pieces of make us whole. So this will be communicated both through, and I’m sure councilor Hopkins can come in as well, through AMO’s advocacy on the next kind of piece of the make it whole argument through the Ontario big city mayors, as well as the direct engagements I have, showcasing the London examples, but other mayors will have their own examples.

And I think our, when we contribute to, here’s what we did to the totality of the impact that also creates a powerful case for the province to hear. Go ahead, Councilor. Thank you, I appreciate that. And again, I appreciate all the comments and discussion we’ve had here.

On the communication that Councilor Van Mirbergen suggested, I’m wondering if we could include more information about that $16.8 million, specifically about how if we were made whole, as the province has promised that it would give London more opportunities to pass those savings on or use that money differently. However, we want to word it, but I do think it’s important that we start to state that more publicly. We talked about this during our multi-year budget. We talked about some sort of communication.

We backed away from it. But again, these conversations continue, and this is a significant amount of money. Thanks. Okay, thank you, Councilor.

And yes, it’s great to the phase in. That was great to hear. I’m sure through AMO, through the Mayor, we’ll continue to advocate for making us whole. I’m sure they’ll get sick of hearing that, but we’re all on board with that message.

So you have to reiterate every chance we get. I do have, Councilor Stevenson, I believe you were the next one. And yes, welcome to Councilor Hopkins, also visiting. So go ahead, Councilor Stevenson.

Thank you. The 2023 year-end financial summary on page 27, it says there was a $10 million surplus in social and community support services. And I just wondered if there was anything staff could share on that, given the plight that a lot of people are feeling, just love to know how there was 10 million surplus. Good stuff.

Thank you, and through you, Chair. This category captures a number of departments under that umbrella. Within that, one of the largest drivers making up that surplus is roughly about 4.8, 4.9 million in personnel costs that were not realized as a result of some staff turn over a new position vacancies. The largest impact of that comes out of the Ontario Works program.

And then there was a number of management positions also tied to that that were vacant as well. That’s one of the biggest drivers. The other driver is also tied to Ontario Works, and it’s through the purchase of service agreements through the transition from an Ontario Works program to a London Regional Employment Services program. So with the province transitioning from one social assistance program to a new employment Ontario employment program, there was a number of transitions in there around the purchase of service contract.

So those are big contributing factors. The rest, we would see some purchase of service in other departments around just through our course of work. As well, we would have a surplus in the purchase of service around childcare. We had some unspent budgeted municipal expansion funding as a provincial subsidy was actually able to cover those expenses.

There is still some lag in creating new childcare spaces which that budgeted funding was also intended for. So there’s a number of factors that drive that. Oh, well, Councillor. Thank you, I appreciate that.

And there’s a lot of talk about the need to pay down our debt. And there’s been a few comments about how in our multi-year budget, we endorsed 330 million in new debt. It’s something that we never talked about that I recall during the budget process. Is there anything that staff can share for the public just as an overview as to what that was and why we’re choosing to do that at a time when we’re concerned about paying down debt ‘cause we’re talking about the importance of paying it down in a small amount given that we’ve taken on this huge amount or committed to doing it.

Through staff, thank you, through the chair. So through the multi-year budget, there were a number of large initiatives that were brought forward, large capital projects in particular. One that comes to mind is the business case related to the protective services training campus between London Police and London Fire. That was a significant capital project that I recall we had a use of debt to fund that, which is entirely appropriate in line with our financial policies and financial practices.

It’s a long live asset with a long service life and in support of the principle of intergenerational equity, we would certainly support that as an appropriate use of debt. There were other capital projects as well. London transits facility, I recall second phase of that was another one that required debt financing as well. So there were a number of significant capital project investments that drove that increase in debt and we believe it’s a manageable amount of debt, but there’s the opportunity through the application of our policies to whittle away at that debt and to avoid having to see that full amount of debt come to fruition over the course of the next 10 years.

Follow up, Councilor? Yes, and thank you through the chair. We were talking about the amounts in part B of the recommendation that have already been transferred to cover the shortfall in 2023 for the reserve fund. So, and they said that it already come off the top.

So was it fair to say that the surplus for 2023 was actually 39 million or 4% prior to that shortfall being made up? Staff, go ahead. Through the chair, that is correct, may follow up. Yes, so given that high tax rate that people are facing and I understand we can talk about how prudent it is to pay down debt and be responsible, but people are having trouble paying for groceries.

They’re worried about making their mortgage payments and I want as a Councillor, the residents in my ward are expecting me to have said I have done absolutely everything I possibly can do to keep the property tax rates down and this is the amount that absolutely has to be paid in order to keep services running. And I am quite concerned about that. There is a lot of expectation from the public that this council will do everything that they possibly can do to keep the property tax rates at a minimum and obviously provide the level of service that they need. It’s not just affecting homeowners.

That 8% rate as we were advised is going to, in all likelihood, affect renters as well. As landlords and large multi-property owners apply for an increase in the rents because of the rate that we chose. So I’m open to what the committee is doing here, but I really believe that we owe it to the taxpayers to either consider finding a way to reduce the tax burden or at least come back with a staff report that really explains why we had no option. Because to do a large property tax increase and then just happily celebrate this surplus and how it’s going to refill our reserves, I personally need, and I appreciate the staff report, but I need to see those scenarios as to why we cannot take this unexpected income and reduce the tax burden the same way we have had to burden them with the unexpected costs that we’ve had.

So a 4%, $39 million. So Council, I’m just gonna stop you there ‘cause I think we’re starting to go into a territory which I think is unfair. I think staff have made their case in terms of what they’ve presented for us. A lot of what you’re saying in terms of decisions made, that decision was on us as a council.

That’s not something that we bring on staff. You’ve referenced a lot of the struggles that lenders are going through, absolutely. But those business cases and the tax rate that was brought forward, that is on us. And that was the appropriate time to make that case.

In terms of the surplus that’s before us, staff is following policy. If we disagree with that policy, you’re well within your right to bring something forward. But I just wanna caution you in terms of what you’re saying that I think as a council, we had tried, we all had our cases, we made our cases. And so I don’t wanna get into a territory of accusing each other of not doing everything in our power, okay?

Absolutely, absolutely. And I wasn’t talking about staff at all. I’m saying that council right now has a decision to make. That’s what I’m talking about.

Is potentially referring this back to have staff prepare something for us if that’s what we want or for us to come forward with solutions or suggestions to see what staff thinks. No, I’m talking about proactively right now. We have a surplus that’s significant at a time when lenders are struggling. And so this talk of paying down debt, we can say how it’s prudent.

But at the same time, we’ve agreed to add 330 million. So to tell them we can’t give you back your 28 or 39 million because we need to pay down debt. If that’s true, then I would just like the tools to be able to explain that to the public. So like I said, I’m not gonna put anything forward here right now.

I would be open to doing something different or coming up with the explanation as to why there really was absolutely nothing we could do as a counselor or why we chose not to do it. That is exhausted my speaker’s list unless anyone. Oh, Councillor Van Buren, go ahead. No, I just have to, I just have to chime in here.

It’s, it’s, and I’m one to look anything to try and get lower tax rates, not like this. You can’t use one-time funding, which this is what this is, to provide an ongoing tax rate reduction. The net result of that is you create a budget bomb in future years because you have unfunded ability to keep these operations moving. And so to use one-time money, so this year we did get some extra income, but you can’t use that for an ongoing tax relief because you’re gonna end up next year or the year after perhaps both with an already significant tax hike projected for next year with even more to cover the whole that’s being created because you don’t have that steady income stream.

It’s just one-time money. So again, I have to caution all of us not to use one-time money for rate reduction. It simply doesn’t work. And maybe staff could comment on that.

Go ahead, Steph. Thank you through the chair. So I would reiterate what Councillor Van Buren has said that is in fact one of the core principles and pillars of our strategic financial framework is that one-time funding is appropriate for one-time costs only. Ongoing expenditures require an ongoing funding source to pay for them.

So that is completely consistent with the core financial principles and policies that we employ. Thank you. A follow-up, Councillor? No, that’s fine.

Thank you, Chair. Thank you. Yeah, I think that’s a very good note. Just to remind folks, so thank you for that Councillor Van Buren.

Councillor Stevenson, you have further comments? Yes, thank you. And I appreciate the discussion and I’m open to understanding this on the floor right here. So in the multi-year budget, Business Case P71 was the utilization of COVID-19 contingency as tax levy relief.

It was 15,475,000 as a reduction. Just to help me understand how that reduction, that one-time reduction isn’t a concern, but this would be. Steph, thank you through the chair. So that COVID release of funds that was done through the multi-year budget was very much a special case.

That was collected through the course of multiple year-end cycles and set aside for that specific purpose and the purpose being potential COVID-related financial impacts on the municipality. We were fortunate that through service adjustments that we were able to make, coupled with additional federal and provincial funding that came through, we did not require that. And because it was required or collected for that very specific purpose, we deemed it appropriate because that purpose was no longer in play. We deemed it appropriate to release those funds on a one-time basis.

But that was very specific and collected for the very reason of COVID financial impacts. Follow? Yes, thank you through the chair. I understand the onetimeness of it.

My, what I want to understand is why a $15 million one-time reduction here isn’t a concern. And yet a concern of any one-time reduction here is a concern about a bump. Just to have. Thank you through the chair.

So just to reiterate with Mr. Murray said, that one was a very specific case. We put that forward as a business case for council’s consideration throughout the multi-year budget, noting there were many opportunities for additional investment. So the mayor chose to include that as part of his tabled budget and then council has the opportunity for amendments.

So it was entirely different. That was something that was able to be released and certainly the surplus deficit policy governs the year-end surplus. That one was something entirely different and ultimately a choice of council. So notwithstanding the policy that you have and that we reiterated previously, it is council’s choice if they choose to do something differently, but certainly we’ve presented to you all the impacts of choosing something different.

Yes, thank you. And as I said, I’m not critical of what we did or staff or decisions. I totally understand that it’s at council’s discretion. But as I bring up the possibility of taking a portion of this as a one-time reduction on the property tax rate, there’s a lot of caution, a lot of serious caution from my colleague and from staff around the concern about using one-time reduction on property taxes.

And I’m looking to learn on the floor here and so that the public understands too why there wasn’t a concern then, but now there’s a grave amount of concern right now. Definitely the comment further. Thank you to the chair. I think what we’re saying here today is that you can certainly choose to do a one-time tax levy reduction.

You just need to be aware of the impacts of doing so and the fact that it is not a sustainable reduction to tax levy pressures over time. It would represent a one-year relief and effectively shift the burden to the next year. So we are not saying you cannot do it. We are saying that’s not what your council approved policy says and you just need to be mindful of what the impacts of doing so are.

Okay, fall. Yes, thank you. And I appreciate that. And like I said, in P1 of the 2022 or 2023 year, again, we had a 6.5 million.

We also had all of the savings and things that staff were able to do to create and we’re always very appreciative of seeing that at the annual budget time. So I’m all for the one-time savings as well. I’m gonna bring this up and because again, I’m hearing the importance of having this money and using the policy to allocate it the way that it was. And I see the need for that.

When I raised this point when we had the Middlesex London Health Unit surplus of a half a million dollars and at the time I said, “We’ve got this big increase coming. “We’ve got all of these concerns. “Is there not some concern about keeping that money “and allocating it because we need it?” And at the time, I know staff did not make a recommendation, but at the time, I was told no, we didn’t need it. And so I’m just gonna, I would just appreciate if staff did have any comment there again as to so the public’s trying to, when they’re trying to follow me, when I’m saying I voted against that because we needed the money.

And now it’s reiterating the fact that we need the money. How do I again explain how we didn’t need that half a million? It might be the amount, that was a smaller amount. This is a bigger amount, but I would just love to be able to explain to the public a little bit better how at the time when we had that half a million, there wasn’t a need for it.

Staff like to comment. And councilor, just to let you know, you just have under a minute left. And if it’s an unfair question, that’s okay. I mean, I’ll leave it up to staff if you don’t want to respond.

Do you wanna? Thank you for the chair. We’re trying to recall exactly what the counselors were referring to and exactly in the context ‘cause I’m not 100% certain we caught that. Okay, sometimes I do that.

Last summer, the Middlesex London Health Unit came to us and said there was a surplus of just under half a million dollars and they were asking to keep it. And there was no staff recommendation, but council chose to let them keep it. And at the time, I said, given the property tax increase rate coming, given the shortfall in our reserves and the need to pay down our own debt, is it, would it not be prudent for taxpayers to take that half a million dollars back and apply it according to a council policy, just like we’re doing with this? At the time, it didn’t seem to be important for us to get that money back.

30 seconds. If I recall the quote was, we didn’t need it. And so, I’m just reminded of that. At this time when again, I hear how much we need it to pay down our debts, to be prudent at the time, we allowed the Middlesex, we’re not allowed.

We approved the Middlesex London Health Unit to keep the surplus to pay down their debts, rather than us pay down the taxpayer debt. Steph. Thank you for providing that context. So through the chair, the health unit had a surplus that, and if I recall, that was quite some time following their year end and subsequent to the corporate surplus report, when they had brought that forward and had requested that they utilize their surplus, that they equally went to Middlesex County at that time also, ‘cause they cost sharing, the cost sharing of that entire budget, to pay down their debt.

So at the time, certainly it was subsequent to our corporate surplus report, and was not something that was known. They had reported a balanced position when we came forward. So certainly, that was a council decision to allow them to pay down their debt. And certainly, given that any future pressures on the health unit, with respect to their debt, is passed on to Middlesex County and the City of London.

There were many reasons why that was prudent to allow them, noting that it could have offset future pressures that they’d be coming back to the City of London for. So had it come back, then it would have been likely applied in a very similar manner, according to policy. And Councilor, that exhausts your time, and I do have Mayor Morgan next on the list. Yeah, I just wanna go to the comments that were just made, and through the chair to my colleagues.

What Middlesex London Health Unit did was try to do exactly what we’re trying to do now. They had a variable rate loan, the interest rates were going up, and they were trying to use their surplus in a way with our permission to pay down that loan. Also, I would note that in the budget process, that was one of the boards and commissions that made significant cuts and reductions to their operating position in order to come in, and I think a 3% per year estimate. And so they’re doing responsible things, I think, with their debt position.

They also made some tough decisions to try to bring down their budget, which is what brings it down on a more permanent basis, right? It’s not a one-time thing. So I think it’s easy to compare things year over year, but there was all the context in that situation. So I think that that’s the difference.

Now, I would say to my colleagues, I, when we talk about the COVID funding in the budget, like, this was a situation where, through the course of the pandemic, we were never sure when things were gonna get restored to the level, and so we were trying to keep a buffer within the carry forwards of the budget surpluses to ensure that we were protected for the year so that we weren’t gonna have a shortfall. The consequence of having a mid-year shortfall is a mid-year tax increase outside of the budget cycle, which none of us wanna avoid. So we always wanna have some level of surpluses, because the opposite to that is some sort of unanticipated significant draw on reserves or a mid-year tax increase if it’s not sustainable. So, you know, that after we realized that that was no longer needed, there was an option before us.

Now, we could have spent that in like five different ways. We could have put it towards debt reduction. We could have done it some other things. And for anybody who wants to look closely at why, there’s a lot of pressure next year in the tax, right?

It’s because we’re actually, it brought the tax rate down a couple of points in 2024. It brought it up a couple of points in 2025, right? We had to actually account for that one-time reduction. And so, yes, you can do one-time reductions.

I think the circumstances were different based on the context. Could Council do that with this money? Of course it could, of course it could. But it’s gonna be the same context.

You’re gonna bring, as Mr. Murray said, you’re gonna bring 2025 down a couple of points, and you’re gonna bring 2026 up a bunch more points, because it’s actually a less number. So the math works out in a way where the percentage numbers are probably higher, just on a percentage basis. So, you know, there’s lots of choice that we have.

I think we can have differences of opinion on this. I think that’s very fair. I think there are many different perspectives on how we can approach that. In this case, this is being driven into a policy where staff have dealt with an unfighted liability with the allocation of the 16 million that we know we have to fund under the Development Charges Act, which is provincial legislation and rules.

We don’t have a choice but to do that one way or the other, whether it’s through this year-end surplus before it hits the surplus policy, or whether it’s us having to find some other way that we haven’t anticipated to do it, they’re solving an unfunded liability problem with that. And I think we, you know, I certainly appreciate that because we know we have to pay for it. In this case, we have the chance to lower some of the costs that we incurred in the budget. Yes, we chose to incur those costs.

There’s many things that we could have chosen not to do. We can actually choose not to do some of those in subsequent budget updates if we’d like to do. But for now, we have an opportunity to take some of that pressure off on the debt side of things, which puts us in a good position from a pouring perspective down the road. And again, like, I respect that everybody might have a difference of opinion on this.

I think following the policy is the way to go and certainly how I’ll be voting today. Okay, thank you, Mayor. I do have Councillor ramen. And just as an FYI, Councillor Cuddie and Councillor Hopkins, you haven’t spoken.

So if you want to get on, let me know. Go ahead, Councillor Ramen. Oh, Councillor Cuddie, did you want to speak? Thank you, Chair, and through you, I just like to repeat what Councillor Van Mereberg and said earlier that the, you know, it’s really great when you have a surplus that the problem is when you have a surplus and you go to pay down taxes, you’re not paying down debt as we talked about before.

And, you know, we’ve talked many times at council meetings about the importance of our AAA rating and the mayor’s alluded to it and Mr. Murray’s mentioned it. And so it was a treasure. And I would mention very briefly that, you know, AAA ratings are very, very hard to get, very easy to lose and very, very hard to get back.

So when we have such a good credit rating as we do have for the city, it would be, I think, in our best interest and the best interest in our citizens that we protect that. Thank you. Thank you, Councillor Cuddie. Councillor Hopkins, do you want to speak?

Okay. - You might. Okay, go ahead, Councillor Hopkins. Yeah, thank you, Mr.

Chair. And I just would like to ask the committee or explain to the committee the importance of how we need to be kept whole. I am to meet with the mayor right now and talk about advocacy that Ingeau is doing as well as OBCM. In the meantime, I would encourage the committee to understand the importance that it is our responsibility to make sure we’re kept whole for now.

Thank you. Thank you, Councillor Hopkins. Councillor Robin, go ahead. Thank you.

So for some of us, this is our first small-tier budget. This is the, you know, we saw in 2023 that there were some savings that came through and that we were able to do some reductions because of those savings. And my understanding is from following that there, that has been the case in previous years. So we anticipate that potentially as we move forward, that there will be some of those savings from, from 2024 and into 2025 and so on.

I’m wondering though, how much we can actually direct within this, so I just wanted to share where I’m comfortable. So I personally would be comfortable with splitting the community investment reserve fund allocation from 7 million to 3.5 million. But only if we were to direct the mayor to find service reductions to offset the future years when he brings forward budget updates. I don’t know if that’s something we can even do because technically we can’t direct the mayor to do that or ask the mayor to do that, I think, under the strong mayor’s powers.

So I’m not sure how we actually can direct any changes that then implicate the future budgets in that sense. And that’s where I’m struggling because like I said, I’d be comfortable to do that. I’d be comfortable to split the community investment reserve fund, it’s not a huge reduction, but I think it’s something that we could find in future years if we did that because my concern is if we put the 7 million in is that we’re already seeing some hands up for where that should go and we’re seeing some ideas of how that may be spent. So I just wanted to just share that’s what I’m comfortable with and contemplating for council.

Okay, thank you, Councillor Omme did staff wanna add any comment to that? Okay, that’s fine, no worries. Interesting, I mean, I had also thought of in terms of the community investment reserve fund. I do have a question though to staff in terms of, I know we’ve nearly depleted it, but historically where have we kept that fund at?

Like where has it traditionally fallen? Thank you through the chair. So the community investment reserve fund is a relatively new reserve fund. It was established, you know, maybe seven or eight years ago.

It had grown in balance somewhat over the course of that time. It grew to, you know, in the neighborhood of approximately $5 million prior to the most recent multi-year budget here. So as has been discussed today, it’s almost essentially been depleted at this point, but heading into the multi-year budget, it was in the 5 million or so range. Okay, thank you, and with that in mind, I’d be comfortable with 5 million just to Councillor Omme’s point, I don’t have any further speakers unless someone else wants to speak to this.

Go ahead and Councillor cutting. Chair, I’d like to move staff for a combination. Oh, it’s already on the floor and you seconded it. So we’ve got it on the floor.

If I don’t have any further speakers, we can open that for voting. And I’m not seeing any, so we can open that for voting. And this is just 2.2. Posing the vote motion carries four to one.

We will make note of that and change that. So we’re onto 2.3, which is the earned capital budget monitoring report. So looking for any, oh, sorry, let’s move that. I’m going to move, can I get a seconder?

Councillor Cuddy, thank you. Okay, so that’s on the floor. 2.3, any questions or comments? I feel like we’ve talked a little bit about it in our course of our conversation today, but if anyone wants to speak to that specifically, now is your chance.

Okay, not seeing any, we’ll open that for voting. Posing the vote motion carries five to zero. Okay, thank you. So we do not have any confidential items today.

And we are into adjournment. So can I get a motion to adjourn? Councillor Cuddy, I’ll second. All those in favor?

Motion carries. Thank you, everyone. I’ll get after you.