October 7, 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 no pecuniary interests were disclosed.

2.   Consent

Moved by P. Cuddy

Seconded by S. Stevenson

That Consent Items 2.1 to 2.4 BE APPROVED with the exception of item 2.3

Motion Passed (6 to 0)

2.1   SS-2024-291 Single Source Print Contract

2024-10-07 Staff Report - SS-2024-291 Single Source Print Contract

Moved by P. Cuddy

Seconded by S. Stevenson

That on the recommendation of the Deputy City Manager, Enterprise Supports the following actions be taken, with respect to Enterprise Print Services:

a)    approval hereby BE GIVEN to enter into an agreement between the City of London and Ricoh Canada Inc. through Vendor of Record (VOR # 11359), Province of Ontario Agreement, as appended to the staff report as Appendix “A” for a five (5) year term;

b)    the proposed by-law, as appended to the staff report dated October 7, 2024 as Appendix “B” BE INTRODUCED at the Municipal Council meeting to be held on Tuesday, October 15, 2024 to:

i)    the Deputy City Manager, Enterprise Supports BE AUTHORIZED to approve a buyer master agreement between The Corporation of the City of London and Ricoh Canada Inc. from November 1, 2024 to October 31, 2029; and

ii)    the Mayor and City Clerk BE AUTHORIZED to execute the buyer master agreement;

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

d)    Information Technology Services BE AUTHORIZED to increase or decrease the quantity of machines and related supplies and services based on terms and conditions established in the contract, coincident with the needs of the various departments in future as numbers of users change due to increase in staff, relocation of work units or copy requirements change and subject to budget availability; and

e)    approval hereby given BE CONDITIONAL upon the Corporation negotiating the maintaining of satisfactory prices, terms and entering a formal contract, agreement or having a purchase order relating to the subject matter of this approval.

Motion Passed

2.2   City of London’s Credit Rating

2024-10-07 Staff Report - City of London Credit Rating(1)

Moved by P. Cuddy

Seconded by S. Stevenson

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

Motion Passed

2.4   2024 Mid-Year Capital Budget Monitoring Report

2024-10-07 Staff Report - 2024 Mid-Year Capital Budget Monitoring Report

Moved by P. Cuddy

Seconded by S. Stevenson

That, on the recommendation of the Deputy City Manager, Finance Supports, the following actions be taken with respect to the 2024 Mid-Year Capital Budget Monitoring Report:

a) the 2024 Mid-Year Capital Budget Monitoring Report BE RECEIVED for information, it being noted that the life-to-date capital budget represents $4.3 billion with $2.3 billion committed and $2 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;

b) the status updates of active 2021 life-to-date capital budgets (2021 and prior) having no future budget requests, as appended to staff report as Appendix “B”, BE RECEIVED for information;

c) 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 $7.73 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 b) i), above:

Rate Supported

A) pay-as-you-go funding of $7.8 thousand BE TRANSFERRED from capital receipts;

B) authorized debt financing of $69 thousand BE RELEASED resulting in a reduction of authorized, but unissued debt;

C) uncommitted reserve fund drawdowns of $1.0 million BE RELEASED back into the reserve funds which originally funded the projects;

Non-Rate Supported

D) uncommitted reserve fund drawdowns of $1.9 million BE RELEASED back into the reserve funds which originally funded the projects;

E) authorized debt financing of $4.6 million BE RELEASED resulting in a reduction of authorized, but unissued non-rate supported debt;

F) other net non-rate supported funding sources of $113 thousand BE ADJUSTED in order to facilitate project closings.

Motion Passed

2.3   2024 Mid-Year Operating Budget Monitoring Report

2024-10-07 Staff Report - 2024 Mid-Year Operating Budget Monitoring Report

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 the 2024 Mid-Year Operating Budget Monitoring Report:

a)    the 2024 Operating Budget Mid-Year Monitoring Report for the Property Tax Supported Budget, Water Budget, and Wastewater and Treatment Budget BE RECEIVED for information. An overview of the corporate projections are outlined below, noting the year-end positions include the reserve and reserve fund contributions listed in recommendation b) and Tables 1, 2, and 3, while noting actual results could fluctuate based on factors beyond the control of the Civic Administration:

i)    Property Tax Supported Budget projected to be balanced at year-end;

ii)    Water Rate Supported Budget projected surplus of $0.4 million; and

iii)    Wastewater and Treatment Rate Supported Budget projected to be balanced at year-end;

it being noted that any reported 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)    $15.1 million to the Operating Budget Contingency Reserve, noting the balance remains under its target;

ii)    $1.2 million to the Water Budget Contingency Reserve, noting the balance remains under target; and

iii)    $0.6 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 are being made to replenish these reserves that will be utilized to finance the 2024 projected cost of statutory development charges exemptions and discounts resulting from recent legislative changes that are in excess of budgeted amounts and otherwise unfunded.

Motion Passed (6 to 0)

3.   Scheduled Items

None.

4.   Items for Direction

None.

5.   Deferred Matters/Additional Business

None.

6.   Confidential (Enclosed for Members only.)

Moved by P. Cuddy

Seconded by C. Rahman

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

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

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

6.2 Labour Relations/Employee Negotiations

A matter pertaining to labour relations and employee negotiations in regard to one of the Corporation’s association or unions, advice and recommendations of officers and employees of the Corporation including communications necessary for that purpose.

Motion Passed (6 to 0)

The Corporate Services Committee convenes In Closed Session from 2:16 PM to 2:25 PM.

7.   Adjournment

Moved by C. Rahman

Seconded by S. Stevenson

That the meeting BE ADJOURNED.

Motion Passed

The meeting adjourned at 2:27 PM.

Full Transcript

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

View full transcript (1 hour, 31 minutes)

Yeah, don’t bring one. Good afternoon, everyone. Called the 15th meeting of the Corporate Services Committee to order, please check the city website for additional meeting detail information. Meetings can be viewed by live streaming on YouTube and the city website.

The city of London is situated on the traditional lands of the Anishinaabeck, the Haudenosaunee, Lina Wampak, and the Adwondering. We honor and respect the history, languages, and culture that diverse indigenous people call this territory home. The city of London is currently home to many First Nations, Métien, and you would today. As representatives of the people of the city of London, we are grateful to have the opportunity to work and live in this territory.

The city of London is committed to making every effort to provide alternative formats and communication supports for meetings upon request. To make a meeting specific to this, to make a request specific to this meeting, please contact CSC@london.ca or 519-661-2489 extension-2425. I will look for any disclosures of pecuniary interest. Seeing none, we are on to our consent items.

First up is 2.1, which is the single source print contract. Is it actually, is there anything that anyone wants to move? Go ahead, Councilor. Thank you.

I know that I would like to do 2.3 separately. Okay, so we’ll pull 2.3. Looking for 2.1, 2.2, and 2.4 removed. Okay, Councilor Cuddy, Councilor Stevenson.

Yeah, I’m happy to move that. Okay, so we’ll do 2.1, 2.2, and 2.4 first. Any comments? Okay, go ahead, Mayor Morgan.

Sorry, Councilor Stevenson, go ahead. Through Councilor Pribble, he’d like 2.2 separate, so I will do that as well. Okay, so we’ll pull 2.2 and 2.3. So we’re looking at 2.1 and 2.4.

And Councilor Cuddy and Councilor Stevenson, are you okay to move those two together? Okay, so we’re just on 2.1 and 2.4 right now. Any questions or comments? Okay, go ahead, Councilor Stevenson.

Thank you, on 2.4, I just had a couple of questions. So at the bottom of page 369, it talks about the development charges study and the unrealized growth projections and revenue pressures. And I just wondered through you if staff could just explain, it says in 2023, residential and non-residential developments slowed because of inflation and higher borrowing costs. This resulted in only 54 million or 50% of the 109 million projected DC revenues being realized.

So I just wonder for the public who are asking about this, if the developments didn’t happen, do we really need the DC money now? Like is it really a shortfall if we don’t have the developments that are related to that? Thank you, through the chair. So the way that development charge legislation and background study works to culminate in the DC by-law that is there, that essentially is set.

Now that the legislation has changed, we update that every 10 years and the next one will be in 2028. So the amounts are calculated when the development charge by-laws initially put into effect to recover the projected and forecasted costs that are to build the infrastructure for which the housing is anticipated. So those projections, those financing, all of that is built into the DC background study to finance the infrastructure. Obviously the infrastructure has to be built before the homes can be lived in because that infrastructure has to support those new homes.

So those are 20 year plans that are put into place to collect those. So when that money is not materializing, what that means is the money that is required to build the infrastructure is not necessarily there because you need that money to be realized before the homes are built. So what we are flagging is that we are seeing with the decline. Normally we don’t get too worried when we just see a small a year perhaps where it might be a shortfall.

We are starting to see a sustained loss of revenue based on the lack of building and the development charges that are being collected. So it is an early warning sign that if there are shortfalls, that money will not be there to pay the debt charges, to pay the infrastructure that needs to be built in advance. So we are flagging that. That is certainly a long-term concern.

But as an emerging issue, this is something that we certainly want to bring to council’s attention and that we are continuing to monitor and there are a number of different ways that that can be managed. But certainly this is something that is on our radar and causing us a bit of concern at this time. Follow up, Councilor? Yes, thank you and through you.

I do hear that and I’m just wondering, it becomes sort of an immediate concern when we are in the budget deliberations that are coming up and the property tax increases that we are seeing when we are saying we need these reserves to be at a certain level and we’re taking the money to ensure that the reserves are at this level. But we don’t have the development. So I’m not understanding why it’s an urgent need. I can see it being flagged as something, but not as an urgent need where we’re needing to replenish those reserve funds according to a target that apparently is off course.

Do you know what I mean? We’re not developing as fast as we thought we could. So just as a follow-up question, it’s just are there expenses, we budget, let me just say this again. So we’ve got development charges that we take in as developments happen.

And presumably that is income aligned with expenses. So if we don’t have the development and we know that we’ll get it when the development does happen, could we be less concerned about the difference in our projection? Good stuff. Thank you, Chief Chair.

So as you know, we have a 10-year capital plan. So those projects are well planned out in advance and those projects are comprised of tax-supported funding, which is the taxpayer and the tax levy that we set on an annual basis. A portion of those capital projects, particularly with respect to growth, are funded through development charges. So what we are starting to realize is that the funding that is recovered through development charges is not materializing, which means that those capital projects that we will be looking to build in the next number of years may not have the funding to be able to provide the investment in that infrastructure.

So we have a number of different ways that we can do. And one of the ways that is particularly useful is through our growth management implementation strategy, which Council did earlier this year, that is when we have a shortfall anticipated, there are projects that ultimately, if we don’t have financing to be able to support them, would be deferred. And that is done in conjunction with the industry. So that is something that we’re not simply backfilling the reserves, the development charges are not tax-supported, they are built and growth typically has paid for the growth.

So this is particularly only with respect to the growth share to build the infrastructure to service new and growing subdivisions within the city of London. Follow up, Councilor? Yes, thanks. I’ll chew on that for a while ‘cause, but I just had a couple of little questions in case the public is reading this and have the same questions as me.

In section A of the recommendation, it says that 2 billion is uncommitted of the 4.3 billion. So I’m assuming we have it allocated or we have an idea where it’s gonna be spent, but we just haven’t signed agreements that commit us to pay that, is that correct? That’s on page 359, it’s A of the recommendation, where it’s just saying that our capital budget has 4.3 billion, 2.3 of it is committed, and 2 billion is uncommitted. Go ahead, Ms.

Worry. Thank you through the chair, yes, that is correct. So the capital budget and the total amount of that budget is a reflection of budgets that are at various stages in the process. So there are many projects, and in fact, a number of projects added very recently through the budget that are very early stages.

So to give you a couple examples of projects that have significant budget in place at this point, but have not significantly progressed to construction at this point, a couple of examples would be the LTC hybrid facility project that will be progressing in the coming years, the master accommodation plan dealing with this campus, that’s another project in very early stages with significant budget associated with it. So that’s why you see a fairly significant amount of budget there, but showing is uncommitted at this point. Thank you. Sorry, go ahead, Steph.

Oh, not Steph, sorry, go ahead, Councillor Stans. Thank you, and then just one other quick little question at the bottom of 359, it says there’s 133 discrete contract awards, and I just wasn’t sure what that meant by discrete contract awards where 367.8 million were awarded. Go ahead, Steph. Thank you through the chair.

So those would be individual projects. So for example, a particular project may have a road component, a sewer component, a water component. That would be one discrete project though. Follow-up, Councillor?

Nope, that’s great, thank you. Okay, thank you. Any other questions on 2.1, 2.4? So I just need a point of clarification here.

So Councillor Stevenson, you had pulled 2.2 on behalf of Councillor Pribble, and he says he’s no longer needs it. Do you still want 2.2 pulled? Whatever’s easier, we can do it separately, or I’m happy to amend it to include 2.2 as well. Okay, yeah, we’ll just do that as part of the consent motion now.

We’re just testing the clerk there back and forth. Okay, so now that we’ve incorporated 2.2, any questions on the credit rating? That’s part of this, go ahead, Mayor Morgan. Yes, less a question, more comment.

So I just want to thank our finance staff for all the work that they’ve done in anticipation and leading up to the meetings that we had with Moody’s of which I was a part of. I would say the discussions were great, and they always highly compliment our staff for the way that Council’s financial plan has executed over a number of years, which is what has secured, once again, our AAA credit rating, which is important to the taxpayers of City of London, because this is a determinant factor in the actual rates that we’re able to get on our debentures. It’s a function of how subscribed our debentures are, so when we need to build a community center or something like that, and we need to go out to the debt market, having a AAA credit rating ensures that the people are going to want to buy that debt, and they buy it at rates that are some of the most competitive. I would highlight to colleagues that the credit rating outlook is stable, but there are some risks there, and there are some specific things that came up and come up in the discussions with Moody’s on a regular basis.

One of the things that they like is our multi-year budget process because it provides the flexibility. They do think that the way that we structure reserve funds are very much to the benefit of the municipality. We set money aside for things that we know are coming. We can sell finance from that under short-term basis so that we avoid significant instability in our cash flow, so we have a very stable cash flow environment.

Also, they always point to substantive policies, like our surplus deficit policy and our assessment growth policy, and how it helps us ensure that we control debt levels and infrastructure gap by ensuring that we put money towards those things as part of a standard policy framework that is relatively stable over time. They see the governance decision-making is very stable in that we have done a good job as a council over successive councils to stick to a long-term, stable, and comprehensive fiscal plan. So all that to say, you know, this is a very good news story. It can sometimes feel routine after 48 years, but I can tell you it’s not.

It is a function of fiscal discipline over many decades and a good hard work of our staff to ensure that council’s fiscal policies are implemented effectively, and that they bring us a number of solutions, policy ideas, and frameworks to ensure that we continue to stay on a strong fiscal track. So I just wanted to pause the chair to say thank you to our staff, particularly across the finance division and all the divisions who contribute to preparing for these meetings. Again, this is substantive to our ability to borrow debt and borrow at exceptionally good rates. Okay, thank you for those comments, Mayor Morgan.

Go ahead, Councillor Cutty. Thank you, Chair, and through you, and just like to make a few comments, no questions but comments. And I’d like to dovetail off what the mayor just said. You know, that’s quite a remarkable trend in 48 years.

You know, I think that’s longer than Councillor Ben Mirberg has been on council. But really, it’s an incredible feat. And I want to thank, you know, not only this staff, and Ms. Borbo and Mr.

Murray, but previous staff members who have recognized how important it is to have a good credit rating. And, you know, many constituents in the mayor alluded to this. Many constituents and residents don’t understand the value of a good credit rating. And it’s so much more important in our city where we can borrow, you know, at a better rate and better prices and maintain a good solid financial foundation.

Because this isn’t just current, this is setting us up, Chair, this is setting us up for the future. So again, not to belabor this, thank you so much for the great work you do, and for providing such financial stability in the city. Thank you for those words, Councillor Cuddy. Go ahead, Councillor Ramen.

Thank you. This is on 2.4. That’s OK. If I go back to that, thank you.

So thanks to my colleagues for their words on item 2.2, and wholeheartedly agree, it’s positive news. I just wanted to ask a question about how we dive into some of the comments and explanations in Appendix B for the summary of the 2021 life-to-date capital budgets, having no future budget component. I’m just — I’m not sure how to explore some of these explanations, specifically related to the Northwest branch of the library. I’m not sure where that discussion would come back for Council to be involved in.

But just noting that the comment associated with it, I’m just like how do I — who do I talk to about that comment and where that goes? OK. Go ahead, Steph. Thank you through the chair.

So what I can say in general terms is that as we are exploring facility requirements and opportunities across the city, we are always mindful to consider where there may be partnership opportunities with other organizations or agencies, boards, or commissions of the city as well. So that is fundamental in the planning process for those facilities. We do know that the library in particular is very interested in potentially partnering with the city on a couple of potential projects, if and when those projects come to fruition. So that is a known ask on their end.

And certainly, I would suggest that if you’re interested in learning more about specifically the library’s plans and intentions as it relates to future growth and expansion of their network, I’m sure that Mr. Sciconi would be very happy to chat about that and discuss what their intentions are going forward and how he could envision potentially partnering with the city as well. Thank you. Go ahead, Councillor.

Thank you. Just to further comment. So the explanation is listed as the Northwest branch library right now with the uncommitted $6.686 million is there is limited land available in the Northwest that meets the library’s specific requirements within the service area and the library is interested in pursuing another partnership opportunity with the city of London that will utilize these funds. I’m just wondering when that statement would last be checked in terms of the fact that they’re undergoing a renovation of a branch right now in the Northwest.

Go ahead, staff, if you have anything further, you’d like to add? Thank you. So these comments are updated with every iteration of this report. So they would have reviewed and provided their commentary and their feedback on that.

I do know that and perhaps Ms. Smith could also comment on this, but I do know that as we explore potential opportunities for other city facilities in the Northwest, we are similarly challenged by availability of land. That is a challenge that we as the city are dealing with as well. So it’s a common shared challenge, but they do regularly review and update these explanations and provide any pertinent updates that may be available at that time.

That’s helpful. Thank you. And so my follow-up to that would be if that uncommitted amount is in city reserve, is it only related to a library or could it be repurposed to the community center need? The funding?

Go ahead, staff. Thank you through the chair. So these projects are growth-related projects and heavily funded through development charges. And those development charges would have been specifically collected for the purposes of libraries, so they could not be simply reallocated to other purposes.

Follow-up, Councillor? Thank you. But for instance, the library could access that funding be in their current space in the Northwest where they’re expanding services currently. Go ahead, staff.

I don’t know who wants to take crack at that. Through the chair, so when we do, when we establish growth-related projects, it’s through the development of the development charges background study. So what we do is we work with our respective servicers to develop their master plan needs, and we identify the necessary infrastructure to support those needs. In this particular case, they identified a Northwest branch.

If there’s a different servicing solution, we would consider a potential reallocation, our preference would be to keep it in this respected project. Follow-up, Councillor? Thank you. Well, then I look forward to a conversation about a new Northwest London Library branch.

Okay, thank you. Any other comments or questions? This is for 2.1, 2.2, and 2.4. Councillor Ploza and Councillor van Merrigan as well.

Actually, sorry, Councillor van Merrigan, you’re, yeah, go ahead first. Okay, so I can go ahead. Thanks, Chair. Firstly, I want to thank my great good colleague, Councillor Cuddy, for what I assume was a backhanded compliment of a little bit earlier.

Sorry, Councillor interjecting to hear you. Following up on 2.2, I’m interested in knowing, is it somewhat unique for a municipality to have a AAA credit rating and to have it for some time, is that unique in Ontario? Are there comparators with other municipalities? Go ahead, staff.

Thank you, through the chair. So what I can say in general terms is that Ontario municipalities are generally fairly stable and the governance associated with Ontario municipalities is generally quite strong and specifically there are legislative limitations on the amount of debt and the purpose of debt that municipalities can issue. So by virtue of that, municipalities only, of course, issue debt on capital projects. They do not issue debt for general purposes.

So that tends to result in the debt burdens of Ontario municipalities being relatively limited compared to others. So overall, I would say the Ontario municipal sector is quite strong as far as credit ratings are concerned. Certainly not all municipalities are AAA rated and I can’t comment on how long others have been AAA rated, but certainly overall Ontario municipalities generally tend to be fairly well rated as far as credit ratings go. Councillor.

Okay, so what I gleaned from that is there are other municipalities in Ontario that are also AAA? Go ahead, Mr. Murray. That is correct.

Thanks very much. Okay, thank you, Councillor Van Reibergen. Sorry, that was just going to committee members first. So I wasn’t trying to ignore you, Councillor Palazzo, but everybody’s on the right-hand side and you’re holding down the left there.

So go ahead. It’s okay, I know as budget chair, I’m not always the most popular person. That’s okay. My first question is in regards to the 2024 mid-year capital budget monitoring report, in regards to section page 362, which I’m sorry, we’re not doing 2.3.

I’m on 2.4. Oh, sorry. Okay, go ahead. In regards to page 362, which is the bus purchase, replacement, realizing the buses have increased for an additional 1.3 million, but they had money due to delayed implementation of additional transit powers as approved in the multi-year budget.

Do we know if it was delayed conventional transit hours or paratransit hours that they’re reallocating those funds from? Staff might not have the answer today, which is okay, just asking. Good, staff. Thank you through the chair.

We can certainly follow up with LTC to confirm for certain which budget that relates to. Thank you. Thank you. I’m happy to have that answer for Council and appreciate it.

My other comment is just a question through you, Mr. Chair to staff, in regards to the London’s AAA credit rating, which is great all these years, 48 and still going, that as we do the annual mayor’s budget updates, our mid-year monitoring and updates, what is the importance that should we have not had fiscal prudence and reserve funds and adequate planning? What happens if we should happen the day ever comes, not on my watch, but the day comes and we lose the AAA credit rating? What would that do to our debt financing, our ability to cover costs and the potentially increase in costs to the Londoners?

Go ahead, staff. Thank you through the chair. So there are, I would say, two primary implications to that. First and foremost, and debt becomes more costly.

It becomes more expensive for us to borrow. That would in turn then increase our debt servicing costs, which fundamentally would have an impact on property taxes and the amount we need to collect to service that debt. So that is the first point. The second point is our ability to access financing and actually issue that debt.

There are some investors who have certain limitations on minimum credit ratings, for example, that they are able to invest in. So any downgrades may impact the pool of potential investors who are interested in purchasing our debt. Thank you. Follow up, Councillor?

No? All good? Okay. So I’m going to go ahead, Councillor Stinson.

Thank you. I just had a couple more questions on page 392. So that’s schedule B of the capital, the capital budget. And at the top of it, it talks about the public transit stream.

So that’s our rapid transit program. And I can see we approved the $174 million in the multi-year budget. And I see it coming. I think what I see is it coming off the project value.

So does that mean that the total estimate for the rapid transit that we have right now is the $548.9 million? Go ahead, Steph. Thank you through the chair. No, the $548 million is the total of all of those 10 projects.

So numbers 1 through 10 that are listed there in the table. It is only the top three projects, numbers 1, 2, and 3 that relate to the rapid transit program. And the updated total project values for each of those are the figures listed in brackets. Follow up, Councillor?

Yes. Okay. So thank you. But it still looks like it’s close to $500 million.

Is that correct? Good stuff. Thank you through the chair. Rough math, it would be in the order of approximately $450 or so million.

Thank you. Okay. Thank you. And through the chair, down below at the bottom in take number four, I guess on the public transit stream, it talks about application pending submitted December 2022.

So do we know when we’re expecting to hear back on that? Go ahead, Steph. Thank you through the chair. Unfortunately, we do not.

We continue to be in regular contact with Infrastructure Canada and have not yet received a final decision on that. Okay. Any other follow up questions? Yeah, just one.

So this is where we’ve put an application in and we’re hoping for funding, but we don’t have any indication that we’re actually getting it or if we have indication we’re getting it, we just don’t have it finalized and knowing when. Go ahead, Steph. Thank you through the chair. So we have submitted the application.

We have been working through follow up questions with Infrastructure Canada. We are hopeful that the application will be successful, but we do not have any confirmation at this point in time. Thank you. Any more questions?

Yeah, just I guess that’s got to be really patient day. That’s a three year wait with still no certainty. So we’ll hope for good news. Thanks.

Okay. Looking for any other questions or comments on 2.1, 2.2 and 2.4. Okay, we’re not seeing any. So we’ll open that for voting.

Closing the vote. Motion carries six to zero. Okay, so we aren’t to scheduled items. We don’t have any.

So for items for direction, we’ll go back to 2.3, which I know a number of Councillors had questions on. So put 2.3 out there. Can I get a mover and a seconder for that? Councillor Cudi, Councillor Ramen.

Okay, so that is moved and looking for questions or comments. Okay, go ahead, Councillor Stevenson. Okay, got it now. I’ve been emailing with staff earlier today and I just wanted to get clarity on B of this recommendation.

So the moving of the money to the reserve funds now for 2024. We did 2023 in April of 2024 and I’m just wondering why we’re doing this mid-year rather than waiting until the to the end. I thank you through the chair. So at mid-year in 2023, there was as part of the mid-year monitoring report, an emerging issue that highlighted that this was a concern and that we were tracking and following and monitoring it.

We did not have a clear knowledge as to what the potential pressure was because it had still come in and we were still hopeful that there could be potential legislative changes. So at this time, we know that there is a significant pressure that cannot wait until the end of the year. It needs to be a plan put forward to be able to address. Certainly, we knew this during the budget deliberations early in the year in terms of how we were looking and trending and that there was going to be a shortfall for 2023.

So it’s simply a timing issue that the legislation came in at the end of 2022. So at mid-year, the applications in terms of what our experience was to date was not as significant. However, since mid-year of 2023, we have seen a significant uptick in the number of exemptions that have been already granted in accordance with the new development charge legislation. And if this continues to track until the end of the year, based on what we’re anticipating, we know that there will be a significant shortfall.

So it is simply a timing difference with respect to when we were able to identify the problem and put forward a plan to address it. Yeah, I guess so it’s a cash flow issue that we need the money right now because I know we did the 9 million in April. We also had large amounts going to this reserve fund in anticipation of the DC exemption problem. And from what I can see here by us doing this allocation now, our surplus won’t show this part of the surplus at the end of the year.

Am I correct in that? Go ahead, Steph. Thank you. So through the chair, this contribution is not something that is made until the end of the year when we actually know what the surplus is going to actually be.

This is an approval pending a plan to be able to contribute, noting that we have significant liabilities that we need to fund. So as we had spoken earlier with respect to the capital monitoring portion, not only are we seeing significant exemptions, we’re also seeing significant development charge amounts that are collected significantly below what was anticipated. So what this all adds up to be is that there are significant shortfalls in the capital projects that we are anticipating at this time. So until the end of the year, this is simply the approval, noting that this is what we are planning to do, noting that we have a liability.

However, this would not be done and completed until after the year end when we know what the actual surplus and the final projections actually come to become known actuals at that time. Follow up, Councilor? Yes. Thank you.

And through the chair, thank you. That’s helpful. So this number will basically be updated at the end of the year. We won’t see sort of an additional amount.

This number will just, this is our estimated right now. And at the end of the year, we’ll have a final number. Okay, that makes sense. And so the other thing on that, so it’s literally, that makes sense.

So the other part is on page 351, where we talk about the contingency reserves and this shortfall that we have, where does the 23 million that we just got from the provincial government for infrastructure tie into here? Does that alleviate some of this pressure? Good stuff. Thank you through the chair.

So the recent announcement relates to a wastewater project in the core. That is funding that was originally intended to be rate supported funding or funding from the sewage works reserve fund. With the announcement of this additional funding that we will be receiving, that will allow us to free up some capacity in that reserve fund that will help to mitigate the challenges and the pressures that we’re seeing in that sewage works reserve fund in the short term that we anticipate that reserve fund to be under some pressure. It does recover as we look out into the future, but it is certainly a welcome short term reprieve because we, as we have noted in this report, there are significant DC exemptions and discounts related to wastewater.

Wastewater is not projecting a significant surplus that could potentially be used to offset those. The wastewater budget contingency reserve unfortunately does not have a significant amount of funding either, so we’re fortunate then that the sewage works reserve fund, which is kind of the main wastewater reserve fund, will have some capacity freed up to help us manage this pressure in the short term so that we can then develop a plan to address the challenge longer term. Thank you. Follow up, Councillor?

Yes, thank you. So in receiving this funding, is it separate from the DC exemption issue or like is the province saying that this is to help offset that or is this something totally separate and do we have an update on if we are going to be getting any thing from the government to make us whole? Good stuff. Thank you through the chair.

So that funding that we are receiving is specifically tied to a particular capital project here in the core. It is completely separate from the issue of DC exemptions and discounts. On the matter of whether we’ve received any updates from the province, the answer is no. We have received no indication that there will be any funding provided to make us whole for those exemptions and discounts that we are experiencing and incurring.

Follow up, Councillor? I’ll take a pause here, thanks. Okay, Mayor Morgan, I’ll go next on the list. Go ahead.

Yes, thank you. So I’m supportive of the resolution, but I’m going to pick up where Councillor Stevenson left off and that’s on the DC fund components. So the reason why our staff are bringing this with some level of urgency is because under the legislation, despite the fact that the province has put forward statutory exemptions which are being utilized quite heavily on an upward sloping trend within the city of London, there is no money to backfill those and the DC legislation basically doesn’t allow us to under fund the DC fund to account for those. So we actually have to fill the hole with something.

Colleagues will remember this discussion during the budget debate where there was about a $3.2 million amount that we were debating whether or not to include in the budget, which is actually part of our way to actually put some property tax money behind filling this hole to a certain degree. Now 3.2 million ramping up to about five over the course of the multi-year budget is not enough to even come close to covering the 28 million hole that we see this year. So this is a small piece of the amount. So here’s the challenge.

If we don’t use surplus to put this in, the reason why we kind of have to know now what the directionality of Council is is we probably have to think about whether or not we’re going to add $15 million to the 2025 budget and a couple of percent to try to fill the hole another way because we cannot not follow the DC legislation and put the treasurer in a spot where she’s in compliance with the legislation by not actually filling the DC fund up as the DC Act requires us to do. Now you don’t have to like that, but that’s the reality of the situation. But here’s the challenge that we have. So DC funds have two types of exemptions, the non-statutory and the statutory exemptions.

The non-statutory are the ones that we created as a Council which we’re supporting. Those are our CIP and Center programs and those sorts of components that we have choice on and we’ve decided to incentivize development downtown or these village, some industrial development, that sort of thing. We can make different decisions on those if we like. But those in 2021 were about $1.7 million.

By 2023 they were up to about $5.5 million, which is not a bad thing because you would hope that if you put an incentive program, people are going to utilize it. You’re actually going to have draws on it and you’re going to see that happen. So we are collecting and planning to collect about enough tax to cover a number of our incentive programs that we’ve chosen to do. What we don’t have enough budget is on the statutory exemptions that the province puts in place.

And these are a combination of recent ones within Bill 23 and other legislation and long-standing statutory exemptions where we see more of a draw than we have in previous years. For example, schools and school boards don’t have to pay DCs, but the fund still needs to be funded. And so we do that through property taxes. Whereas in 2021 that would have only been about $77,000.

By 2024, not even all the way through the year, it was up $4.5 million. It’s because we’re building more schools, which you would make sense in a growing city. Universities also have exemptions for DCs. Then we have the Bill 23 exemptions, which are not only the ARU exemptions, but the rental housing exemptions, the not-for-profit housing and affordable housing exemptions.

And the rental housing exemption is the one that is escalating, I think the quickest. And it should be the most concerning because we know we need to build a lot of rental housing in the city of London. It’s one of the affordable components of housing, but the DC exemptions associated with that are going to continue to put pressure on us on the property tax side of things or through not having access to surpluses in another way to actually fill the DC fund up. So whereas the non statutory exemptions in 2021 were about 3.1 million.

By 2023, they were 17. And you can see that the pressure in the staff report is 28 million. This particular year that is projected, although we haven’t finalized it. So this is like an unsustainable problem that we have, right?

Because the only way to really solve this is one for the province to actually backfill the DC exemptions and provide us with some support, the whole making us whole piece, not just for maybe the Bill 23 pieces, but perhaps the other exemptions that have been longstanding, maybe not as well utilized, but are accelerating over time now and becoming more of a problem in a fast growing city. The other pieces we stop doing some of these things, like we stop building schools, we stop building affordable housing, not for profit housing, rental housing, which doesn’t seem sustainable as well. The other pieces, and I know Councillor Stephen Rose raised this in the capital side, is the water and wastewater components of these exemptions are also important. And our ability within the DC fund to actually fund, say, a stormwater management pond at the front end of a development so that we can build more housing.

You know, that money being available in the DC fund is actually critically important. So even if we could under fund the DC fund, even if the legislation allowed us to do that, would we actually want to in a way where, you know, we need, we know we need the infrastructure to actually grow, create the growth that we need in the city. So to me, this is, this is the most significant emerging financial issue that we have to find a pathway to deal with this because the development in these areas aren’t going away in a fast growing city. The pressure on the property taxes is only going to go up unless we have an avenue to seek relief from the central governments.

And colleagues who were there at AMO know that this was the main component of the meeting with Minister Klandra flagging for him the challenges that we’re starting to see in DC funds. And I continue to have ongoing dialogue with him as one of the cities that became a fast growing city really early on. I think where I would describe this as a bit of the tip of the spear on on seeing these pressures within the DC fund that other municipalities and my colleagues and other mayors and other cities are actually now seeing as well and facing the same sort of pressure that we are. I know the treasurer and her municipal finance officers association are also talking about the pressure that is seen and how different municipalities are handling it.

For the most part, people are having to backfill this for property taxes. That’s how they’re handling it. In some cases, like where we have the good fortune this year of having a surplus, others are being able to fill it up with other pieces. But that is a temporary solution to what is, I think, a more systemic problem because I just don’t see the growth stopping anytime soon, which means it’s not like we have to fill this whole one time, which we can do this year.

We’ve got to find a pathway to filling it on an ongoing basis if the province isn’t going to come through and actually backfill these DC exemptions with actual dollars to fill the DC fund up as the legislation requires. Again, another pathway could be they could make an exemption for us to underfund the DC fund, but that will create other problems. And that’s where maybe the parental government wants to fund infrastructure a different way. And we can have this conversation about the way municipalities are financed.

But all of these things have to happen at the same time. And if these conversations don’t evolve in the right way, we’re going to have these short-term, very difficult pressures on municipalities to try to come up with the dollars to fund the growth that we’re seeing in our cities. So I don’t, I wanted to provide that context for colleagues because it is important that we deal with this problem now so that we can know what our budget discussion is going to be like a little later on. But that does not stop the advocacy piece on raising the importance as we already have at AMO.

And I will continue to do through AMO and Ontario big city mayors. And this is an issue that we have on upcoming agendas to talk about how we want to, how we want to approach the advocacy, particularly on the D.C. statutory exemption side of things, to try to move beyond just the general, you know, you need to make us whole argument and say these are actually some real significant issues that we are aligned and our priorities on. We both want to grow and build more housing in this province.

But we got to do it in a way that doesn’t put an unnecessary burden on property taxpayers. And that means we need a solution to this challenge in the short to medium term. And, and I expect to do that in partnership with the province and continue the discussions with Minister Klandra. But I wanted to provide that context for colleagues today so you you understand why this is an important piece for us to consider now and know the directionality on it.

But it certainly doesn’t let anybody off the hook for saying this isn’t a sustainable problem and we need a this is an unsustainable problem and we need a solution to it. And that solution isn’t going to be hoping we have enough surplus every year to backfill this on an annual basis. We need a permanent solution to fill the DC fund and deal with the statutory exemptions. Okay.

Thank you, Mayor, for those comments. I gave you a little bit of extra time there, just to wrap up your thoughts. Looking at Councilor Perbal, I think you were next. Go ahead.

Thank you. And thank you to both of my colleagues because some of the questions were already answered, but sort of chair to the staff. So if I look at the current this year’s report, the property tax support, your budget projected to be balanced at the end of the year. So if I look at the B, I would imagine actually the B and compared to page 349, not all the initiatives are listed there.

But my question is this. So from now on, if we take these under consideration from now on, we are not projecting any additional surplus at the end of the year, because I know last year we did project 18 and we ended up being 28 million. So my question is based the way I understand it as it says in point one to be balanced at the end of the year, I believe you are not forecasting any additional surplus. If you can please confirm that or explain.

Thank you. Okay, staff, if you want a crystal ball, the surplus, go ahead. Thank you through the chairs. So what I really want to emphasize is that these are projections at this point in time.

Everything you see in this report is based on forecasts through the end of the year, informed forecasts and our best guess of how we think the year is going to transpire. However, a lot can change over the course of the year. And inevitably, we have projections that fluctuate a little bit. So we will continue to monitor, actively monitor our budgets and we’ll continue to on a monthly basis, update our forecasts and our projections.

However, inevitably, actual results do vary from what we forecast. So this is our best estimate at this point in time. However, again, they are projections at a point in time. Thank you.

Hello, Councillor. And follow up. One thing is that I’m trying to get a kind of a clear understanding is that when I compare last year and this year, and actually Mary just said that we need to deal with it now. But on the other hand, you’re not saying that we are not doing anything till the actually financially year end.

If you can confirm that, please. And the other thing is that if we are, because last year, we didn’t make these, we did not make these commitments. That was just the first part, just the forecast. And we are already currently making kind of commitment, no commitment.

So you’re already stating which reserve funds it should be going to, but we are actually not doing anything. So I was just curious, why is it there now, if you’re not making any commitments, still the year end anyways, financially year end? Good stuff. Thank you through the chair.

So what I can say is that many of the factors driving this year end position and specifically related to the DC exemptions and discounts, that’s a relatively new issue. That new legislation came into effect in late 2022. This time last year, as we were putting together the 2023 mid-year report, we were still very much trying to get an understanding of what the impacts were going to be. And we noted that last year in the emerging issues section of last year’s mid-year monitoring report.

So we weren’t in a position at mid-year last year to even be able to forecast what the ultimate year end situation was going to be because it was such a new and evolving piece of legislation at that point in time. So that is why we ultimately did not do the transfers and the actual back filling until year end. Similarly, this year, as the treasurer has noted, we will not actually be doing the back filling, the actual transfer until the end of the year. However, we do know that this is an issue and we are in a position this year where we think we can make a better informed guess as to what the impact will be for the full year.

And so we felt like it was something that needed to be noted and flagged in this year’s monitoring report and brought to the attention of council at this point. We know it’s an issue that we simply can’t ignore this year. Follow-up, Councillor. Okay, thank you for that answer.

So if I go page 349, we actually are looking at currently forecasting $29 million surplus. And if I take point B, which I really take it currently only as your suggestion because we are not making commitments, we are not making any transfers. So we are committing 15, 16, that’s something like roughly $70 million proposal, your suggestion where should be money going. So 29 minus 17, so we still have $12 million, $12 million that is kind of not unallocated, but not even unsuggested.

And when would that be coming or how would you make that decision, how and when. Go ahead, Steph. Thank you through the chair. So I will refer you to page 349 of the report package.

It’s table one in the operating budget monitoring report. So that breaks down the more significant contributing factors to the projected surplus. As you have noted, for the property tax supported budget, we are forecasting at least at this point a $29 million surplus for 2024. You can then see in the subsequent two lines the allocation of that surplus according to policy.

So the first allocation is to the operating budget contingency reserve, which is section 4.1.2A of the surplus deficit policy. This is in relation to the discussion that we’ve been having related to DC exemptions and discounts. So this is the shortfall of the DC exemptions and discounts on the property tax budget, $15 million. So $15.1 million of the projected surplus will go to the operating budget contingency reserve to backfill.

And the other remaining 13.9 at least based on current projections is the contribution to the unfunded liability reserve fund in accordance with section 4.1.2B of the surplus deficit policy, which authorizes the city treasurer to contribute any net personnel savings that are generated to the unfunded liability reserve fund. So this is a longstanding practice to set aside personnel savings to fund future obligations that are largely personnel related. So once you complete those two gates or checks in the process, there at that point, at least again, based on current projections, is no remaining surplus to allocate as you see at the last row there of table one. Follow-up, Councillor?

Thank you for the answer. I’ll pass for now. Thank you. Go ahead, Councillor Stevenson.

Thank you. I just had two more. One is just clarity on what the mayor was saying about statutory requirement for the DC exemptions, because I could be wrong, but I thought when we discussed this at budget time that the bill 23 DC exemptions were not statutory, that some cities were doing them, some were not, and that we felt it was the prudent thing to do without knowing that we had a commitment to make us whole. So can I just get clarity on what’s a statutory requirement?

Good stuff. Thank you through the chair. During the budget discussion, that is one of the reasons and the primary reason why it was part of the legislative changes and included as part of the tax rate increase. So the exemptions have been introduced by legislation and are mandatory for all municipalities to put forward.

The, as the mayor actually also indicated earlier through his comments, a large portion of the discussion we had during budget is the fact that because those exemptions are there, the DC funds need to be made whole and have a shortfall as a result of these exemptions. Those exemptions have to be funded. That is mandatory for a funding source to be funded. Typically, because we have no other source, it is done through property taxes.

Hence, it is a mandatory requirement to backfill those funds and to backfill the shortfall. If there were other funds available, then we might pursue those. However, there are no other options within our municipality’s ability, a short of receiving a grant from the provincial government that would allow us to backfill those costs. Follow-up, Councillor.

Yeah. Thanks. I guess I have three questions. Because the other one is, well, where will we see that $23 million influx coming in as some sort of relief on this system?

Will we see it at all? Or does that $23 million just go that we received for the infrastructure just recently? Go ahead, Steph. I think you talked about that earlier.

Go ahead. Yes. Kyle answered that earlier. Mr.

Murray answered that earlier. So, that goes directly towards the capital project. That is not part of the property tax-supported budget. That goes directly to support the capital project, which reduced some reliance on the sewage works reserve fund.

Okay. Thank you for that. And the other one is a little bit less related. On page 353, we talk about the cost and the revenue drivers going forward.

And two, social and community support services. There’s a high likelihood of operating costs for agencies delivering services, climbing due to inflation and increasing demand for service. It specifically talks about the reaching home funding, the federal funding. And I just wondered, there was $2 million that was allocated in 2021, $500,000 to lending cares, $500,000 to the Unity project, and a million to at LOSA.

And I wondered when we might be seeing a staff report on the updates on those, because the concern is that we receive that money for an emergency need. And the public is asking, like, how is that helping the homeless right now? How is that money being applied to meet that need? So, I know the Unity project purchased land, but as far as I know, it’s not being used.

And lending cares. There’s a lot of uncertainty about the services there. Is there a plan for a staff report update? I’m looking to staff, but I don’t know if anyone wants to comment on that directly, but go ahead.

Through you. Oh, go ahead, Mr. Dickens. Sorry.

Didn’t see up there. Just hop in over your shoulder here. Sorry. Through you.

Thank you for the question. We do not have a staff report planned to report back on previous year’s allocation of the reaching home, but should Council want a report back on previous year’s reaching home funding, we would certainly follow your direction. Follow-up, Councillor. Actually, while Mr.

Dickens is there, I am just as a follow-up to that question from myself. I believe the reaching home funding, in terms of federal sourcing, that would be coming in the fall if we are looking for more funds. Through you, Chair, if we look to the federal government, we are expecting the federal government to roll out additional funding under different envelopes. Some of it, or all of it, flowing through infrastructure Canada, which actually holds the envelope for reaching home this fall, we do anticipate to hear about additional funding towards the supports for individuals experiencing homelessness.

I don’t know if that’s going to be rolled up through reaching home distribution channels, or if it will be a different process in which we hopefully receive those funds. As far as additional reaching home funds, we would anticipate next year receiving a new allocation we have received this year’s already. Okay, thank you. I was just at an AMO conference and they were talking about it.

They wouldn’t give a firm timeline either, but just put it out there. Looking for any other questions or comments on 2.3. Okay, Councillor Permute, go ahead. Just a quick follow-up, and SBH 349 states, “Did it fund in accordance with surplus deficit policy section 4.1.2?” So, if the council, if we wanted to make any changes of this surplus to be divided different way, then the council would have to make a change to this policy.

Is my understanding correct? Go ahead, staff. Thank you through the chair. So, yes, we are allocating the projected surplus or forecasting that we would allocate the projected surplus based on policy.

Council can choose to potentially change that policy. I will note that we have already received direction to report back on the surplus deficit policy in the first quarter of 2025, at which point council could review the policy and the continued appropriateness of that policy at that time. Oh, Councillor. Thank you.

And last question, in terms of the timing, when this surplus comes in and when I’m aware of the staff coming back to us with the proposal for the new policy quarter one, will there be enough time to make potentially changes for the current years, year and surplus? Go ahead, staff. Thank you through the chair. So, we generally report out on the final year and surplus in April.

So, that will be the start of the second quarter. So, we would envision that would be subsequent to the report coming back on the policy itself. So, there would be an opportunity at that point to, if there are any changes made to the policy, to consider that at that point in time, in the meantime, the surplus, until it is reported out, is simply parked in our operating budget contingency reserve pending that final report out on year end positions. All up, Councillor.

Thank you very much. No more questions? Okay, looking. Okay, go ahead, Councillor Rhum.

Thank you and through you. I’m just wondering if you could provide and doesn’t have to be now, it can be for the next, for the Council meeting. Just the total, between 2023 and 2024, of the DC contributions that are now not being received due to Bill 23, the total. Go ahead, staff.

If you know it or if you want to defer to Council, go ahead. Through the chair. So, if we look at just the ballpark estimate here, and we look at the actual total DC exemptions and discounts that were recorded in 2023, it was about 16 million, as of our best estimate or projections to this point in time for 2024, we’re looking at 28. So, that brings us to an approximate total of 42 million over the course of 2023 and 2024, noting that 2023 was funded.

Final up, Councillor. Okay, thank you. And when you, when you look at the 29 million that we have, that we’ve been discussing today, I’m just wondering, we’re again reliant on how the province decides whether or not to make us whole, of which we don’t fully understand at this point still what that criteria is to do so, and that’s why we’re still advocating to better understand how they’ll go about making that decision. That’s still my understanding of where we’re at in the conversation with the province.

I don’t know if that’s a question for the mayor. Yeah, looking to either the mayor or staff, someone wants to crack it. Why don’t you, I didn’t, I missed the end of the question, so I need to hear it again, but I’m happy to let you start and I’ll jump in, but yeah. Thank you through the chair.

So, I think if I can paraphrase it and please correct me if I’m wrong, Councillor, essentially, do we understand what making us whole means and how will we know if we get there? Yeah, it seems to me that the criteria or the sands keep shifting on how we get to that point of being made whole by the province. It doesn’t seem to be something that they’ve clearly articulated how we get there, and I’m just wondering when we think we might get to a clearer articulation of that or is that what we consider the advocacy to be? I’ll go ahead, Chair, if you want.

Okay, so I think part of the challenge is that the amount isn’t determined, it’s determined based on development, right? So, because they’re exemptions based on development activity for the most part, we’ll only ever know after the year completes what the activity was and how much the exemptions were. So, I think it would be difficult for the province to upfront say we’re going to be ex millions of dollars a year for the next five years and that’s going to cover it, because as cities grow at different paces, they’re going to be impacted differently. So, it seems to me like the reasonable way to do this is an articulation of here’s what had cost us in these years.

Here’s kind of the path that we’re on. This is the impacts of the legislation, because I think, you know, if I approach this collaboratively, I’m not sure anybody really realized the impacts of the legislation upfront. It just let’s try to build some more housing, let’s give some exemptions, and now what we see is an escalating impact that is significant on municipalities. And to the province’s credit, we’ve seen them actually change legislation and back away from things like the five-year phase in and other pieces that had substantive and unintended consequences on municipalities.

So, the way that AMO and the mayors are approaching this is we need to gather data and this is kind of the first year where I think we’ve got the 2023 and 2024 and show kind of a trend line and then go back and say this is exactly what’s happening in municipalities. This is the pressure you’re putting on us. So, making us whole looks like this in these two years, but these exemptions actually have, like, an upward trajectory if everybody wants to build as much housing as we all want to build. And as we expect interest rates come down in that activity to accelerate.

If that activity isn’t affordable housing or purpose-built rentals or schools or universities, then, well, we don’t really have much of a problem, but we know what probably is and that’s probably the place where these things are targeted, because the incentives are meant to incentivize and that’s where the development is probably going to be. So, the only thing I would add if the chair would indulge me, I know the council asked a question of Mr. Sense about the bill 23 exemptions. The numbers I used included both bill 23 exemptions and long-standing statutory exemptions from the 1997 DC Act, which I think are becoming more impactful because of a fast-growing city that I would include as a pressure point.

I wouldn’t just stick to our advocacy on just the bill 23 changes. I think the long-standing statutory exemptions are becoming a different pressure point as well that I think we need to engage with them on too. So, I just wanted to add that context. Okay, Councillor, do you have any other questions?

Thank you. And yes, that’s helpful, because when I see our advocacy, I see it related to bill 23 and not those additional pressures, and I actually think we need a probably not a different strategy, but we need a more forthcoming strategy about some of those additional pressures being that we are kind of not just the trajectory of a fast-growing city, but we’ve been on that trajectory for some time, and so we know how those pressures are kind of adding up and compounding at this point. So, again, trying to give people that are paying attention and getting ready to hear about our budget update, some perspective on some of the pressures and changes that we’re facing. If we were to instead of use surplus and use reserve, and we were instead to not approve this, I’m not saying we don’t, I’m saying, but if we weren’t, and we said instead, this becomes a pressure on the budget update.

What kind of a pressure would it be? I know we say like seven millions, like one point, so. Go ahead, sir. I don’t, Mayor, you said you wanted a final?

Okay. Okay. Go ahead, Mr. Murray.

Thank you, through the chair. So, just based on the short fall on the property tax budget for 2024, the projected short fall, we’re in the ballpark of approximately $15 million. Each 1% is roughly $8 million, so you are almost 2% of pressure at $15 million. Mayor, did you want to add something to your, to Councillor ramen’s previous point?

Go ahead. Yeah, I just for to support Councillor ramen, I know that previously council has spoken about advocacy on bill 23. I want you to know our advocacy at AMO was focused on all of, my advocacy was focused on all of the statutory requirements. I completely agree with you.

It’s also an issue that I’ve raised with other mayors to say we need to start talking beyond just the bill 23 impacts, but for those fast growing cities that are seeing other statutory impacts, these are discounts that the province has said we reasonably should be providing these for these reasons. The challenge is someone’s got to pay them under the legislation and that ends up being us because there’s no other real way to, to fill the fund. So, so just so you know, my, my advocacy approach is the whole thing. I’m not just, I’m not going to leave pieces on the table that are, that are escalating and I intend on ensuring that my, my colleagues at OBCM, you know, consider this as a wider direction than maybe AMO has gone within the past on just bill 23 changes.

Okay, Councillor, are there any further questions? Yes, thank you. I have a ward meeting coming up. Would love a bit more of a briefing note on how we can look at these topics differently from an advocacy perspective because I think the public needs to understand that we’re making fiscal decisions to help lower the impact to them through these kinds of conversations now.

And at the time of the budget update, there will be other conversations about some of the decisions we’re making, but that this one kind of preempts that discussion, I think is, is important for people to, to understand and had we not, or if we do, do not make this decision now, it will add additional pressures and potential costs to them in, in the form of more tax increases. Okay, thank you for that. Okay, I think I had Councillor Preble first and then Councillor Stevens, go ahead. Thank you, Mr.

Chair, to his staff. When we were talking about the budget and the, the financial pressures due to the more homes built faster, we were talking about potentially up to $100 million. This was before the, when we were entering the budget, when we were going through the budget, I just heard an amount which I heard actually before as well. We are looking at $42 million.

Is there any, when we talked about $100 million, was it forecast that budgeted anywhere and now that we are coming lower? Is there any upside potentially? Go ahead. Through the chair.

So when we initially made that estimate of $100 million, we were saying $100 million plus because when the legislation first came out, it was very difficult to understand the full magnitude based on the types of permits that were coming in. There was also a number of financial pressures that were related to non-exemptions and discounts, two of which were actually rolled back with the most recent legislative, legislative, legislative changes. So the five-year commitment of phase indices is now gone, as well as the tracking of DCL’s what capital costs for studies is now a reinstated cost. Those had an, an estimated impact of approximately $45 million.

I’m over a five-year period. So what we’re noticing now is obviously the exemptions and discounts are having a larger financial impact than we initially thought. I follow up, Councillor. Right now, thank you.

Go ahead, Councillor Stevenson. Thank you. Just a last question on the DCs and then I’ve got another question. So the way we’re handling the DC exemptions now, is it the same way that we did it before with the pre-bill 23 exemptions?

We had to backfill those as well. Go ahead, staff. Thank you through the chair. So the pre-bill 23 statutory exemptions were primarily non-statutory exemptions as in exemptions that Council had put forward.

So those had budgets associated with them. The large significant increase in statutory exemptions came into effect at the very end of 2022. So this is a very recent and new program problem with the changes that occurred with the DC legislation changes that have been recently implemented. Thank you for that.

Yes, and through the chair, I just had a question or a couple of questions on the 2024 projected year in financial summary. So on page 357, we’ve got the Middlesex London Health Unit showing a projected deficit of 302,000. And I just wondered, seeing as I think we only pay 25% or something of their expenses. So I just wondered, is this 25% of their deficit?

Or I don’t need the exact number, but is this a portion of their deficit? And what happens to that if that’s true? Because I know I remember last year we let them keep about a half a million dollars of surplus. So I just wondered what happens when there’s a deficit.

Go ahead, staff. Thank you through the chair. So this, these figures that you do see there in Appendix 1 and specifically related to the Middlesex London Health Unit. That is specifically the city’s share of the deficit or the forecasted deficit for the year.

I think the important thing to reiterate is again, these are projections and all organizations who are currently forecasting a deficit are going to continue working to mitigate that and manage that such that that deficit does not materialize. Also know too that some agencies, boards, and commissions do have their own reserves that they manage on their ends, i.e. it’s not something that the city manages on their behalf, but some of them do have their own reserves that they can utilize to mitigate any operational deficits at the end of the year should those materialize. Follow?

Yeah, so I guess is that confirming then that it will not be a negative impact that we won’t be absorbing their deficit? I just want to confirm that. Go ahead, Steph. Thank you through the chair.

I think it’s too early to know and I think that is all subject to how the rest of the year plays out where their budget position ultimately comes in and ultimately then how much they are able to absorb in their reserve at the direction of their board if they are so able to. Oh, thank you. So just to follow up, are we obligated to cover our portion of their deficit or do we have a say yes or no that we will fund it or not? Specifically through the chair, specifically as it relates to the Board of Health, that would be a specific legislative requirement in that particular case that we fund any shortfall that they would have.

Okay, thank you. So given the fact that we knew they were anticipating a deficit, I really am glad that I voted no to letting them keep their surplus. And then the other question is under financial management, there’s almost a 15 million dollar projected surplus. And I know we had a lot of large amounts for financial management in the multi-year budget.

Just wondered if this is a timing thing or if there’s some explanation for the large amount. Go ahead, Steph. Thank you through the chair. The bulk of that financial management surplus is in fact the surplus that we’re projecting in our investment income and investment revenues for this year.

So we’re projecting upwards of 10 million dollars of surplus in our investment revenues for this year. That is something that we’re fortunate to be in that position. And as we look ahead to the 2025 budget update, we are in the process of reviewing our estimates for 2025 in future years as it relates to our investment revenues. Thank you.

Okay, any other questions? Yeah, okay. Thank you for that. That makes perfect sense and happy to have that on the showing up on here.

So the last question is we’re projecting a 4 million dollar surplus in social and community support services given the pressures that we have in terms of our homelessness response is that different buckets. And so we’re not able to offset that. Steph, go ahead. Thank you through the chair.

I’ll start. And if Mr. Dickens wants to jump in, he certainly can as well. In general terms, what I can say is that is a mix of different buckets and different services within that grouping.

That grouping encompasses Ontario works and encompasses housing stability services and encompasses children’s services as well. So there’s a mix of different services that make up that service grouping. Okay, anything to add, Mr. Dickens, or do you know that comes up?

Okay, good stuff. Any other questions? No, that’s good. I think that’s what I thought.

But just if the public is looking, this thinking that we didn’t spend all the money that we had on homelessness, that is not true. Okay, so looking around any other questions? All right, we’re all good. We will open that for voting.

This is for 2.3. Closing the vote. Motion carries 6 to 0. Okay, that concludes items direction.

We don’t have any deferred matters. We do have two items for confidential. So I’ll look for a motion to go in a closed session. Councillor Cuddy, Councillor ramen.

Okay, thank you. I’ll open that for voting. I like that. I’m in favor though.

Closing the vote. Motion carries 6 to 0. Okay, welcome back everyone. Looking to Councillor Steenson report out from closed session.

Go ahead. Thank you. We went into closed session at 2.17 to 2.23 and progress was made for the matters upon which we went into closed session. Great, thank you.

Just looking for a motion to a turn. Okay, Councillor ramen. Councillor Stevens, thank you. All those in favor of adjournment?

Any opposed? Motion carries. Okay, thank you. Have a good afternoon everyone.