[00:00:05]
>> GOOD AFTERNOON. ALL YOU HAPPY PEOPLE WITH THAT.
[1. Opening Statement]
I'D LIKE TO CALL THE GOVERNANCE OF PRIORITIES COMMITTEE FOR MONDAY, JANUARY 22, 2024 TO ORDER STARTING WITH OUR OPENING STATEMENT, THE CITY OF YELLOWKNIFE ACKNOWLEDGES THAT WE ARE LOCATED IN CHIEF DRAIGIS TERRITORY.FROM TIME IMMEMORIAL, IT HAS BEEN THE TRADITIONAL LAND OF YELLOWKNIFE'S FIRST NATION.
WE RESPECT THE HISTORIES, LANGUAGES AND CULTURES OF ALL OTHER INDIGENOUS PEOPLE, INCLUDING THE NORTH SLAVE MÉTIS AND ALL FIRST NATIONS MÉTIS IT WHOSE PRESENCE CONTINUE TO ENRICH OUR FIBER COMMUNITY.
[2. Approval of the agenda.]
MADAM CITY MANAGER, ANYTHING TO ADD FURTHER TO THE AGENDA?>> THANK YOU VERY MUCH, MR. CHAIR. NO, NOTHING ELSE TO ADD.
>> EXCELLENT. THANK YOU VERY MUCH.
ANY DISCLOSURE OF CONFLICT OF INTEREST AND THE GENERAL NATURE THEREOF? FROM MY COLLEAGUES? SEEING NONE, SORRY. OH YES, THERE WE ARE NOW OVER TO A PRESENTATION REGARDING LONG TERM CAPITAL PLANNING.
[4. A presentation regarding Long Term Capital Planning.]
MISS KRISTABEL.>> THANK YOU VERY MUCH, MR. CHAIR. YES. WE'RE VERY PLEASED TODAY TO BRING FORWARD FOR COUNCIL'S INFORMATION A PRESENTATION ON THE GENERAL TRENDS IN LONG TERM INFRASTRUCTURE AND CAPITAL PLANNING.
OUR KEY MESSAGE TODAY IS THAT REALLY, COSTS CONTINUE TO RISE SIGNIFICANTLY FOR INFRASTRUCTURE BASED ON SUPPLY CHAIN, LABOR AVAILABILITY, INFLATION, AND INTEREST RATES.
OF COURSE, THIS PUTS PRESSURE ON OUR ABILITY TO ENSURE WE HAVE THE INFRASTRUCTURE IN PLACE TO MEET CORE SERVICE REQUIREMENTS.
IT ALSO IMPACTS HOW WE PLAN FOR AND HOW WE SAVE FOR CRITICAL INFRASTRUCTURE THAT THE CITY NEEDS TO BE ABLE TO DELIVER CORE AND ESSENTIAL SERVICES, PARTICULARLY WATER AND SEWER.
IRONICALLY, I VISITED THE SNOW KING CREW OVER THE WEEKEND AND THEY TOO, ARE DEALING WITH SUPPLY CHAIN ISSUES.
YOU KNOW, THE REALITY IS, THIS IS HITTING US ALL.
IT'S MY PLEASURE NOW TO TURN THINGS OVER TO DIRECTOR OF PUBLIC WORKS, CHRIS GREENHORN AND DIRECTOR OF CORPORATE SERVICES, CAVE PANDO, WHO WILL WALK YOU THROUGH THE OVERVIEW OF THE ISSUES WE'RE FACING.
>> THANKS FOR THE OPPORTUNITY TO GIVE A QUICK LOOK INTO, I GUESS LONG TERM CAPITAL PLANNING AND PRECURSOR AS A PRECURSOR FOR BUDGET 2024 AND THE THINGS THAT WILL BE COMING UP IN THE NEXT COUPLE OF WEEKS.
JUST A QUICK RUN THROUGH THE AGENDA.
BE GOING THROUGH I GUESS THE 2023 CAPITAL PLAN.
HOW WE DO OUR BUDGET, ESTIMATING FOR THOSE THAT DON'T KNOW AND FOR THOSE WATCHING OR CARE TO WATCH OUR MINOR CAPITAL PLAN AND THEN OUR MAJOR CAPITAL INFRASTRUCTURE REPLACEMENT.
THEN CAVILL SPEAK THROUGH SOME SLIDES UNDER HIS PREVIEW.
THIS IS A QUICK LOOK AT OUR TEN YEAR PLAN, IT'S $271 MILLION OVER THE NEXT TEN YEARS ESTIMATED.
THIS IS BASED ON NUMEROUS FACTORS.
OF COURSE MANY OF THEM IS JUST THE WAY OUR PLANNED REPLACEMENTS WILL FLOW, AS MISS BASS KELLET SAID, PRESSURES IN THE INDUSTRY AND LOCAL ALIKE.
BUT YOU'LL SEE SOME SPIKES IN SOME VALLEYS HERE.
IT'S JUST BASED ON HOW THE PROJECTS ARE ROLLED OUT AND THE SCHEDULING OF THEM OVER THE YEARS TO COME.
BASICALLY, BUDGET ESTIMATING CAN BE DONE IN VARIOUS FORMS. ON THE RIGHT, YOU'LL SEE HOW THE NEW WAY OF DOING CLASS ESTIMATES ARE IN, IT IS CURRENTLY MY DAY, BUT THERE'S NO WAY OF DOING CLASS A THROUGH D. CLASS A WOULD BE A VERY REFINED AND ACCURATE ESTIMATE, WHERE CLASS D WAS A LITTLE MORE VAGUE AND LARGELY CALLED BUDGETING ESTIMATES.
NOW FOLKS ARE USING CLASSES ONE THROUGH 41 THROUGH FIVE.
BASICALLY THE SAME IDEA, BUT JUST VARYING PERCENTAGES AND BASED ON THE STAGE OF DESIGN THAT THEY'RE AT OR STAGE OF CONSTRUCTION.
YOU CAN SEE THAT ON THE RIGHT.
TYPICALLY FOR BUDGETING, WE DO CLASS 4 OR CLASS D ESTIMATES.
THAT'S BECAUSE IN SOME CASES, IT CAN BE VERY EXPENSIVE TO ADVANCE A PROJECT TO STAGE 1 OR CLASS A, AND THEN THE PROJECT MAY NOT GO FORWARD FOR VARIOUS REASONS.
IN A LOT OF CASES, IT DOESN'T MAKE SENSE TO ADVANCE THAT MUCH WORK PRIOR TO THE APPROVAL OF PROJECT.
THAT'S HOW WE MOVE THROUGH THE BUDGET ESTIMATING PROCESS.
AGAIN, THESE CAN VARY BASED ON THE PERCENTAGES.
YOU'LL SEE THE ACCURACY RANGE ON THE RIGHT SIDE.
JUST A COUPLE OF POINTS TO NOTE, POST COVID AND EVEN DURING COVID REALLY THROUGH A CURVEBALL AT US FOR ESTIMATING.
THERE'S MULTIPLE REASONS FOR THAT.
SUPPLY CHAIN ISSUES, LABOR CRUNCHES, CURRENT COST OF INFLATION IS AFFECTING EVERYONE.
[00:05:01]
WE ARE SUBJECT TO THE SAME INFLATION THAT PRIVATE RESIDENTS ARE SUBJECTED TO, WHETHER IT'S COST OR POWER OR OTHER FORCED GROWTH FACTORS.WE HAVE TO JUGGLE THEM AND ACCOMMODATE THEM IN OUR BUDGETING PROCESSES.
WHAT WE USED TO BE ABLE TO BUDGET FOR ON A RELATIVELY EASY PROCESS HAS NOW BECOME A BIT OF A CURVEBALL.
YOU'LL SEE THAT IN THE UPCOMING SLIDES.
ON OUR MINOR CAPITAL, WE'VE CALLED THIS BASICALLY SUB $10,000,000 RUN THINGS SUCH AS OUR WATER AND SEWER REPLACEMENT PROGRAM USED TO BE ANNUAL PAVING PROGRAM.
WHAT WE'VE DONE HERE TO COMMENT ON THESE FIRST AS WE'VE MOVED THEM TO A BIENNIAL PROGRAM.
WE'RE DOING THAT IN EFFORTS TO ALLEVIATE PRESSURE ON THE CAPITAL FUND AND BASICALLY DEFER FUNDING TO FUND OTHER CAPITAL PROJECTS SUCH AS LIFT STATION ONE REPLACEMENT AND WATER LICENSE COMPLIANCE.
ROB AND PETER TO PAY PAUL IN EFFORTS TO ADDRESS BOTH ASSET MANAGEMENT PRESSURES AS WELL AS THE FINANCIAL PRESSURES THAT WE SEE COMING IN INDUSTRY.
WHAT THAT MEANS BY ANNUAL, WE'RE GOING TO DO A WATER AND SEWER UNDERGROUND REPLACEMENT ONE YEAR AND THE FOLLOWING YEAR WILL COME BEHIND IN OUR PAVING PROGRAM.
THE THIRD ONE ON THE SCREEN IS JUST THE LANDFILL CELL CONSTRUCTION THAT'S COMING IN, AND AROUND 6.1 MILLION DOLLAR MULTIPLE WATER LICENSE COMPLIANCE PROJECTS.
I CAN'T REMEMBER OFF THE TOP OF MY HEAD HOW MANY EXACTLY THERE ARE, BUT IT'S A 15 YEAR WATER LICENSE AND THE WORK IS COMPLEX AND MULTI YEAR.
SOME ARE MULTIFACETED, WHETHER IT'S WASTE, GROUNDWATER MONITORING OR ON THE SEWAGE SIDE OF THINGS.
ALL THE COMPLIANCE ASSOCIATED WITH OUR LAGOON TREATMENT SYSTEM.
BASICALLY, WHAT'S HAPPENING THOUGH IS WE HAVE SIMILAR BUDGETS THAT WE HAD TEN YEARS AGO, BUT WE'RE GETTING LESS WORK DONE BECAUSE OF THOSE INFLATIONARY FACTORS.
REGULATORY REQUIREMENTS ARE INCREASING AND ARE MUCH MORE BUDGET INTENSIVE.
OUR CURRENT WATER LICENSE, WHILE A REQUIREMENT AND IT DOES GREAT THINGS AND HELPS US PROTECT OUR ENVIRONMENT, IT DOES COME AT A ADDED COST.
WE'RE WORKING OUR WAY THROUGH THOSE AND ESTABLISHING AN IMPLEMENTATION AND PLAN FOR EVERYTHING ASSOCIATED WITH THAT.
ON TO MAJOR CAPITAL, WHICH IS WHAT WE'VE BASICALLY CLASSIFIED AS 10 PLUS MILLION.
AGAIN, THESE ARE ROUGH FIGURES.
I WON'T SPEAK TO THEM ALL IN DEPTH, BUT YOU CAN SEE THE YEARS THAT THEY'VE BEEN CONTEMPLATED ORIGINATED THE ORIGINAL COST, THE REVISED COST, THE BUDGET ASSOCIATED WITH THEM, AND THEN THE OVERALL FUNDING SHORTFALL AS A TOTAL.
AND YOU CAN SEE WE'RE COMING UP QUITE A BIT SHORT AND THESE ARE DUE TO VARIOUS THINGS.
A LARGE ITEM ON THE SUBMARINE WATER LINE.
WE DIDN'T ANTICIPATE IT BEING $57 MILLION IN 2017.
WE THOUGHT WE WERE BEING OVERLY CONSERVATIVE WITH THE $34 MILLION COST.
THEN COVID HAPPENED AND YOU SEE THE REVISED COST, THAT'S FROM OUR ENGINEERING CONSULTANTS AND IT'S BEEN BACKED UP BY A THIRD PARTY ESTIMATING COMPANY VANCOUVER.
WE'RE RELATIVELY CONFIDENT IN THAT.
BUT AGAIN, THAT IS ALSO SUBJECT TO MARKET CONDITIONS.
WE COULD REALISTICALLY PUT THIS OUT TO TENDER AND IT MAY COME IN AT $85 MILLION AND WE WON'T KNOW THAT UNTIL IT HAPPENS.
WE'RE STILL IN THE PLANNING STAGES FOR MANY OF THESE PROJECTS WHICH WILL COME UP THROUGH BUDGET 2024 AND THE DELIBERATIONS ASSOCIATED WITH THAT.
THAT'S IT ON THE OVERALL, I GUESS HIGH LEVEL CAPITAL PLAN AND THE MAJOR FACTORS INFLUENCING THE FIGURES THAT YOU'RE GOING TO SEE TODAY AND IN THE NEXT COUPLE OF WEEKS, I'LL TURN IT OVER TO CAVILL NOW TO TALK THROUGH SOME OF THE FINER DETAILS ON THE FINANCIAL PORTION OF THE PROGRAM PRESENTATION. THANKS.
>> THANK YOU MR. GREENCORN, AND THANK YOU FOR ALL THE NOTES THAT YOU PROVIDED ME FOR THE PRESENTATION.
AFTER MR. GREENCORN'S EXPERT EXPLANATIONS ON THE ISSUES WE ARE CURRENTLY FACING, SO WHAT NEXT? BELIEVE IT OR NOT, THIS IS ONE OF THE FEW TOPICS THAT I TRY TO VOTE BECAUSE IT BOTH FASCINATES ME AND AT THE SAME TIME, IT IS AMONG MY LEAST FAVORITE TO DISCUSS.
THERE ARE TWO MAIN REASONS FOR THAT.
FIRSTLY, THE LONG TIME LINE INVOLVED, WHICH MEANS MANY UNCERTAINTIES IN BETWEEN, AND THE LOT CAN GO WRONG OR RIGHT, SO WE ARE NOT IN TOTAL CONTROL OF EVERYTHING.
[00:10:04]
SECONDLY, THIS EXERCISE IS ABOUT SETTING LONG TERM VISIONS TO GUIDE OUR RESOURCES TODAY, TO POSITION OURSELVES FOR THE FUTURE.THERE LIES THE BIGGEST PROBLEM OF ALL BECAUSE LONG TERM THINKING IS INEVITABLY CHALLENGING WHEN GOVERNMENTS, ESPECIALLY LOCAL GOVERNMENTS FEEL PRESSURE TO DELIVER TANGIBLE SHORT TERM RESULTS.
SOMETIMES, UNFORTUNATELY, AT THE DETRIMENT OF LONG TERM VIABILITY.
WHAT WE'RE HOPING TO ACHIEVE TODAY THROUGH MR. GREENCORN AND MYSELF, IS TO TRY TO EXPLORE OPTIONS THAT WOULD ALLOW US TO STAY THE COURSE AS WELL AS MINIMIZE THE RISK ASSOCIATED WITH THE LACK OF MUNICIPAL INFRASTRUCTURE PLANNING AND FUNDING.
THE FIRST STEP THAT THE CITY UNDERTOOK TO ENSURE SUCCESSFUL LONG TERM PLANNING IS THE CREATION OF AN ASSET MANAGEMENT DIVISION SOME YEARS BACK TO LEAD THE IMPLEMENTATION OF PRINCIPLES AND PRACTICES IN THE CONTEXT OF MUNICIPAL ASSET MANAGEMENT.
THE TERM ASSET MANAGEMENT HAS BEEN DEFINED IN DIFFERENT WAYS BY VARIETY OF GOVERNMENT AND NON-GOVERNMENT BODIES.
THE FEDERATION OF CANADIAN MUNICIPALITIES DEFINES ASSET MANAGEMENT AS AN INTEGRATED APPROACH TO EFFECTIVELY MANAGE EXISTING AND NEW ASSETS, TO DELIVER SERVICES TO RESIDENTS WITH THE INTENTION TO MAXIMIZE BENEFITS, REDUCE RISK, AND PROVIDE SATISFACTORY LEVEL OF SERVICE TO THE COMMUNITY IN A SUSTAINABLE MANNER.
WE TYPICALLY TALK ABOUT ASSETS BEING A PIECE TO OUR MUNICIPALLY OWNED INFRASTRUCTURE, FOR EXAMPLE, ROADS, SIDEWALKS, WATER AND SEWER PIPES, INDOOR AND OUTDOOR RECREATIONAL FACILITIES, OFFICE AND OTHER BUILDINGS.
WORKING IN MUNICIPAL GOVERNMENT MEANS FACING IMMENSE PRESSURE TO USE FUNDS AS EFFICIENTLY AS POSSIBLE.
WITH THESE PRESSURES IN MIND, IT IS UNDERSTANDABLE THAT MUNICIPAL INFRASTRUCTURE GETS MAINTAINED AS NEEDED BASED ON PRIORITY OR URGENCY.
HOWEVER, THIS APPROACH, WHILE WORKS GREAT IN THE SHORT TERM, IS NOT BENEFICIAL IN THE LONG TERM.
COMMUNITIES ACROSS CANADA ARE CURRENTLY EXPERIENCING LARGE INFRASTRUCTURE AND MAINTENANCE GAPS AS A RESULT OF A LACK OF PROACTIVE ASSET MANAGEMENT AT THE CITY OF YELLOWKNIFE.
OUR ASSET MANAGEMENT SYSTEM IS STILL AT AN EARLY STAGE OF IMPLEMENTATION, BUT WE ARE HOPEFUL THAT WE WILL BE ADOPTING THE LEVEL OF SERVICE DIRECTIVES BY THE END OF THIS YEAR, WHILE ASSET MANAGEMENT DATA WILL START INFORMING OUR BUDGETS BY BUDGET 2026.
THIS IS QUITE AN AMBITIOUS TIMELINE, BUT WE'RE CONFIDENT WE WILL ACHIEVE THE SAME AS WE HAVE COMPETENT STAFF TO ENSURE WE DO ACHIEVE THESE MILESTONES.
WHILE ASSET MANAGEMENT IS A GREAT PROACTIVE TOOL TO HELP COMMUNITIES LIKE OURS MANAGE INFRASTRUCTURE ASSETS AND MAKE BETTER INVESTMENT DECISIONS TO PROVIDE RELIABLE AND AFFORDABLE SERVICES TO OUR RESIDENTS, IT WILL ADD MORE FINANCIAL PRESSURE ON US TO BE MORE DISCIPLINED IN SETTING ASIDE FUNDS TOWARDS MAINTAINING AND REPLACING OUR ASSETS ONCE FULLY IMPLEMENTED.
MOREOVER, IN ANTICIPATION OF THE 271.2 MILLION IN UPCOMING CAPITAL PROJECTS, IT WOULD APPEAR THAT WE HAVE NOT BEEN TRANSFERRING ENOUGH MONEY FROM THE GENERAL FUND INTO THE CAPITAL FUND.
AS SUCH, IN LIGHT OF THESE, ADMINISTRATION HAS RECOMMENDED THAT THE ANNUAL TRANSFER FROM THE GENERAL FUND TO THE CAPITAL FUND BE INCREASED FROM 1 MILLION TO 2 MILLION.
AS COMMITTEE HAS SEEN, ASSET MANAGEMENT IS A GREAT PLANNED APPROACH TO FUNDING AND SUPPORTING INFRASTRUCTURE IN OUR COMMUNITY, BUT UNFORTUNATELY, IT IS A LONG TERM STRATEGY WHICH HAS LITTLE IMMEDIATE EFFECT.
SO WHAT CAN WE DO IN THE SHORT TERM TO ADDRESS THE ISSUES INCLUDING THE 60.8 MILLION FUNDING SHORTFALL THAT MR. GREENCORN MENTIONED EARLIER? BUT WE'LL BE HIGHLIGHTING THE OPTIONS THAT ARE TYPICALLY AVAILABLE TO INCREASE REVENUES AS WELL AS CONTROL COST MEASURES.
COMMON PRACTICE ACROSS CANADA SUGGESTS THAT MUNICIPAL GOVERNMENTS FUND CAPITAL EXPENDITURES FROM THEIR OWN REVENUES AND FROM EXTERNAL SOURCES.
INTERNAL REVENUE SOURCES CONSIST MOSTLY OF GENERAL OPERATING REVENUES FROM PROPERTY TAXES AND USER FEES AND CHARGES.
RAISING TAXES, FEES, CHARGE, AND LEVIES IN SMALL INCREMENTAL PERCENTAGES YEAR BY YEAR, WILL ALLOW THE CITY INCREASE ITS REVENUES AND CAPITAL RESERVES.
THE CITY COULD ALSO BE, OR INDEPENDENT OF RAISING TAXES AND FEES, INTRODUCE A SEPARATE CAPITAL LEVY WHOSE REVENUE WILL BE DEDICATED TO A SPECIFIC EXPENDITURE OR PROJECT.
ONCE COST OF THE STATE SPECIAL PROJECT HAS BEEN RECOUPED,
[00:15:02]
THE CAPITAL LEVY CAN BE REMOVED.THIS IS ALMOST SIMILAR IN APPLICATION AS A LOCAL IMPROVEMENT CHARGE.
HAVING SAID THAT, I UNDERSTAND RAISING TAXES, FEES CHARGES, OR INTRODUCING A NEW LEVY IS A NEVER POPULAR CHOICE IF SOLELY APPLIED AS IT HAS A HIGHER COST TO RESIDENTS.
I KNOW SOME OF YOU MIGHT BE THINKING CAVE, YOU'VE LOST YOUR MARBLES, AND MY WIFE WILL ABSOLUTELY AGREE WITH YOU IN A HEARTBEAT.
BUT SURPRISINGLY, INCREASING FEES ON AN INCREMENTAL BASIS IS THE MOST NATURAL ROUTE, AS IT IS TIED TO INFLATION AND LEVELS OF SERVICE.
SIMILARLY, GRANTS ASSISTANCE FROM OTHER LEVELS OF GOVERNMENTS FOR CAPITAL INFRASTRUCTURE, IS AN AVENUE THAT ADMINISTRATION BELIEVES THE CITY SHOULD AGGRESSIVELY CONTINUE TO PURSUE THROUGH CONSTANT POLITICAL LOBBYING ON ONE SIDE AND APPLICATION SUBMISSIONS ON THE OTHER.
EVEN THOUGH WE ALL KNOW THESE FUNDS ARE NOT GUARANTEED, AS THEY ARE EXTREMELY COMPETITIVE TO GET.
BUT AS MARTIN LUTHER KING SAID, WE MUST ACCEPT FINITE DISAPPOINTMENT, BUT NEVER LOSE INFINITE HOPE.
I HOPE SOMEONE IS LISTENING FROM THE OTHER LEVELS OF GOVERNMENT.
FINALLY, BORROWING FOR CAPITAL PROJECTS HAVE BEEN WIDELY USED OVER SEVERAL DECADES BY MUNICIPALITIES BECAUSE CAPITAL PROJECTS ARE LUMPY, AND BORROWING EASES OUT THE REPAYMENT OF DEBT AND PERMITS MUNICIPALITIES LIKE OURS TO SYNCHRONIZE THE COSTS AND BENEFITS OF THE PROJECTS OVER TIME.
MOREOVER, BORROWING IS LIKELY TO HAVE A LESSER IMPACT ON RESIDENTS, HOWEVER, AT THE CURRENT RATES, IT MIGHT BE AN EXPENSIVE OPTION.
THE LAST LOAN THAT THE CITY TOOK WAS $10 MILLION FOR THE AQUATIC CENTER IN EARLY 2022 AT 4.136%, AND WILL EXPIRE IN JULY 2037.
JUST A NOTE, THE BORROWING AND DEBT SERVICE LIMITS DEPENDS ON THE FINANCIAL POSITION OF THE CITY AT THE TIME OF BORROWING, AND ITS BORROWING CAPACITY HAS TO BE FINALIZED AND APPROVED BY MACA AT THAT TIME.
IN RELATION TO OPTIONS AVAILABLE UNDER COST, THE MOST OBVIOUS THAT COMES TO MIND IS TO PRESS "PAUSE" AND EVALUATE ALL PROJECTS CURRENTLY IN THE CARRY FORWARD LIST, WHICH AS A REMINDER, SITS AT 34.3 MILLION.
IF WE ADD THE 25.4 MILLION YEAR MARKED IN BUDGET 2024, THE TOTAL CAPITAL PROJECTS THAT APPEARS TO BE OUTSTANDING IS 59.7 MILLION.
ON A SIDE NOTE, TO BETTER HELP EVALUATE THE PENDING PROJECTS, ADMINISTRATION IS LOOKING AT BREAKING DOWN THIS 59.7 MILLION INTO THREE CATEGORIES.
>> FIRST ONE IS WORK IN PROGRESS, WHICH WILL BE MULTI-YEAR PROJECTS THAT HAVE A START DATE AND END DATE.
FOR EXAMPLE, THE AQUATIC CENTRE.
PROJECTS THAT DO NOT HAVE A START DATE YET BUT FOR WHICH WE HAVE AN OBLIGATION TO COMPLETE EITHER BECAUSE OF REGULATIONS OR SAFETY CONCERNS, OR FOR WHICH FUNDS HAVE BEEN COMMITTED.
FOR EXAMPLE, THE FIRE HALL OR THE SUBMARINE WATER LINE.
THIRD CATEGORY WILL BE ANY OTHER TYPES OF PROJECTS NOT CAPTURED IN ONE AND TWO.
THE BREAKDOWN WILL BE AVAILABLE TO COMMITTEE MEMBERS BEFORE BUDGET 2024 DELIBERATIONS.
THAT WILL GIVE A BETTER PERSPECTIVE AS TO WHAT'S IN THAT 59.7 MILLION BECAUSE CURRENTLY DOES LOOK LIKE A LOT, BUT THERE'S MULTI-DIFFERENT PROJECTS IN THERE THAT WE CAN CLASS IN DIFFERENT CATEGORIES.
PART OF THIS PRESS PAUSE INITIATIVE INCLUDES NOT ADDING ANY MORE PROJECTS THAT FAILS THE PRIORITY AND OR URGENCY TEST TO RELEASE THE FINANCIAL PRESSURE THAT NEW PROJECTS ADD ON THE CITY AND EVENTUALLY ON ITS RESIDENTS.
THIS WILL OBVIOUSLY RESULT IN MORE BUDGET ASK DOWN THE ROAD.
HOWEVER, IF WE ADOPT ANY ONE OR COMBINATIONS OF THE OPTIONS THAT WERE HIGHLIGHTED UNDER REVENUE SLIDES, I BELIEVE WE CAN EXECUTE THE PROJECTS.
ADDITIONALLY, THE CITY COULD REDUCE THE SCOPE OF WORKS.
HOWEVER, THE DANGER HERE IS THAT EVEN IF WE SAVE COST ON ENGINEERING AND CONSTRUCTION, WE MIGHT LOSE SIGHT OF THE INTENT OF THE PROJECT ALTOGETHER.
FURTHERMORE, THE CITY NEEDS TO LOOK AT RELEASING PROJECTS FROM ITS CARRYOVER LIST.
FOR EXAMPLE, PROJECTS WHICH ARE CURRENTLY PART OF THE CARRYOVER LIST BUT WHOSE COMPLETION PATH IS UNCLEAR FOR VARIOUS REASONS, THE FUNDS ASSOCIATED WITH THEM SHOULD BE REALLOCATED TO OTHER PROJECTS.
WHENEVER WE HAVE CLARITY, THESE PROJECTS WILL COME BACK IN THE FALL FOR BUDGETING AGAIN.
[00:20:02]
LASTLY IS A QUASI NEW CONCEPT CALLED THE PUBLIC-PRIVATE PARTNERSHIPS.NOTABLY, THE BUILD-OPERATE-TRANSFER MODEL, WHICH HAS BEEN GETTING TRACTION AROUND THE GLOBE AND IN CANADA AS A WAY OF FINANCING COSTLY PUBLIC INFRASTRUCTURE PROJECTS.
THE PUBLIC-PRIVATE PARTNERSHIPS DOES PROVIDE SOME ADVANTAGES.
FIRSTLY, IT PROVIDES A NEW COST SHARING MECHANISM, WHICH ALLOW THE CITY TO FREE UP FUNDS FOR OTHER PROJECTS.
SECONDLY, IT WILL ENABLE US TO DRAW ON PRIVATE SECTOR EXPERTISE AND SKILLS TO MINIMIZE COST.
THIRDLY, THERE IS THE POTENTIAL OF MORE INNOVATIVE AND EFFICIENT OPERATIONS DESIGN.
HOWEVER, EVEN UNDER A PPP, THE RISK AND REWARDS ARE SHARED.
EVEN IF THE RISK AND REWARDS ARE SHARED FOR MUTUAL BENEFITS, THERE ARE DISADVANTAGES JUST LIKE ANY RELATIONSHIP.
HAVING A SOLID PARTNER, ESPECIALLY FINANCIALLY, IS IMPORTANT TO ENSURE THE PROJECT IS CARRIED THROUGH RIGHT TO THE END.
DEPENDING ON THE AGREEMENT, THERE MIGHT BE A LOSS OF CONTROL ON FEES.
THAT WILL BE CHARGED TO USERS.
THERE IS ALWAYS A DEBATE THAT THERE IS A TRADE-OFF OF UPFRONT CAPITAL COST FOR FUTURE OPERATING COST.
FOR EXAMPLE, THE ANNUAL COST OF PRIVATE SECTOR FINANCING OF A PROJECT MAY TURN OUT TO BE GREATER THAN WHAT THE COST OF PUBLIC SECTOR FINANCING WOULD HAVE BEEN.
BUT IN GENERAL, IT IS ACCEPTED THAT IF THE RIGHT PROJECT AND THE RIGHT PARTNER ARE CHOSEN, A PUBLIC-PRIVATE PARTNERSHIP WOULD PRODUCE COST SAVINGS, EFFICIENCY IMPROVEMENTS, AND BOTH GOOD QUALITY SERVICE FOR THE CITY.
NOW, FROM WHAT WE HAVE SEEN TODAY, WE CAN ALMOST GUARANTEE THAT THE CITY CANNOT CONTINUE TO DO IT ALL.
NOT EVERY PROJECT CAN BE COMPLETED WITH CURRENT RESOURCES.
I KNOW IT'S NOT SOMETHING THAT WE LIKE TO HEAR TYPICALLY, WHETHER IT'S FROM COMMITTEE SIDE OR ADMINISTRATION SIDE, BUT IT'S MORE OF A REALIZATION.
SOMETIMES WE DO NEED TO JUST PRESS PAUSE AND UNDERSTAND WHAT IS GOING ON BECAUSE A LOT OF THINGS WE CAN'T CONTROL.
I KNOW WE HAVE A DEDICATED TEAM, DEDICATED STAFF.
I'VE SAID IT MANY TIMES. I KNOW WE HAVE A VERY PASSIONATE COMMITTEE.
BUT WHEN WE ARE STRUGGLING ON MANY FRONTS, IS IT WISE TO KEEP GOING OR IS IT JUST WISE TO JUST STOP AND TAKE A BREAK? BUT WHILE ADMINISTRATION CONTINUE TO PONDER ON PRIORITIES AND RECOMMENDATIONS ON THE BEST WAY FORWARD, HERE'S YOUR HOMEWORK FOR THIS MONDAY AFTERNOON.
SHOULD THE CITY FOCUS ON DELIVERING ONLY AND CORE MUNICIPAL FUNCTIONS OF PUBLIC SAFETY, WATER AND SEWER, WASTE MANAGEMENT, AND LESSER RECREATION? I DON'T KNOW HOW THAT'S GOING TO FLY.
SHOULD THE CITY CONTINUE TO RAISE TAXES AND FEES INCREMENTALLY TO ENSURE THAT AT THE END OF THE YEAR WE HAVE ENOUGH TO PROVIDE SERVICES, COMPLETE PROJECTS, AND SET ASIDE FUNDS TOWARDS OUR TENURE CAPITAL PLAN? SHOULD THE CITY ONLY PRIORITIZE PROJECTS THAT IT IS OBLIGATED TO DO UNDER VARIOUS LEGISLATIONS? SHOULD THE CITY BUDGET AT A MORE REALISTIC LEVEL DUE TO THE SHORT SUMMERS BUDGET CONSTRAINTS, LACK OF STAFFING, AND SUPPLY CHAIN ISSUES? SHOULD THE CITY TRY TO ADD MORE CAPACITY TO COMPLETE ITS PROJECTS? THESE ARE OPEN-ENDED QUESTIONS THAT I WILL JUST LEAVE THEM WITH YOU.
MY THANK YOU IS JUST IN A VERY GOOD MOOD.
>> THANK YOU SO MUCH TO THE ADMINISTRATION FOR THAT PRESENTATION.
ANY QUESTIONS FROM COMMITTEE MEMBERS? LOOKS LIKE THERE IS NONE.
FIRST ONE FOR ME IS, FOR THE SPECIAL CAPITAL LEVY, ARE THERE ANY OTHER JURISDICTIONS THAT HAVE IMPLEMENTED SIMILAR FUNDING MECHANISMS TO FUND CAPITAL PROJECTS? [INAUDIBLE]
>> THANK YOU VERY MUCH FOR THE QUESTION.
I'LL ASK MR. PANDO IF HE'D LIKE TO RESPOND TO THAT.
>> THANK YOU FOR THE QUESTION.
YES, IT IS COMMON PRACTICE, BUT I DON'T HAVE ANY SPECIFIC LIST.
THERE IS ALSO MUNICIPALITIES THAT DO HAVE SPECIAL LIBRARY LEVY, FOR EXAMPLE.
HAVING SPECIFIC LEVIES, THE ONE I DO KNOW IN SASKATCHEWAN IS VERY PREVALENT WOULD BE THE WATER AND SEWER LEVY THAT'S DEDICATED TOWARDS JUST WATER AND SEWER.
I'VE SEEN INFRASTRUCTURE LEVY THAT CAPTURES EVERYTHING THAT'S INFRASTRUCTURE, BUILDINGS, WATER AND SEWER PIPES.
[00:25:02]
YES, IT IS A COMMON PRACTICE.BUT IF YOU WANT, I COULD COME BACK WITH A LIST OF WHICH COMMUNITIES DO HAVE THEM.
>> THANK YOU VERY MUCH. I WOULD APPRECIATE THE LIST OF SPECIFIC EXAMPLES.
TO MY SECOND QUESTION ABOUT PRIVATE-PUBLIC PARTNERSHIPS.
DO WE HAVE EXAMPLES OF MUNICIPALITIES WHO HAVE ALSO UTILIZED THIS PROCESS FOR CAPITAL PROJECTS? MS. KRISTABEL
>> THANK YOU VERY MUCH FOR THE QUESTION.
TO MY KNOWLEDGE, IT IS LARGER CITIES THAT HAVE DONE THIS, BUT I'LL ASK MR. PANDU IF HE'D LIKE TO SPEAK TO HIS EXPERIENCE AND RESEARCH ON THIS.
>> THANK YOU FOR THE QUESTION.
YES, IT'S EXACTLY CURRENTLY LARGER CITIES HAVE EXPLORED THIS AREA.
COMPANIES THAT DO COME IN MIND IS EPCOR, WHICH IS OWNED BY THE CITY OF EDMONTON.
WE DO HAVE SASKWATER IN SASKATCHEWAN THAT DOES WATER TREATMENT PLANT PROJECTS BECAUSE THEY ARE HUGE, 20, 25 MILLION.
BUT THIS ONE AS WELL, I DON'T HAVE ALL THE COMMUNITIES IN MIND, BUT I CAN CERTAINLY COME UP WITH A LIST.
>> THANK YOU VERY MUCH. THAT LIST AS WELL WOULD ALSO BE VERY MUCH APPRECIATED, IF YOU HAVE THE TIME, OF COURSE.
IT LOOKS LIKE WE HAVE NO FURTHER QUESTIONS. COUNCILLOR HENDRIKSEN.
>> THANK YOU, CHAIR. YOU PIQUED MY BRAIN AS WE WERE GOING THROUGH THAT.
[NOISE] JUST GOING BACK TO THE SLIDE ON THE 60.8 MILLION SHORTFALL.
JUST FROM A PROCESS PERSPECTIVE, BUDGET TIME ISN'T EXACTLY THE BEST TIME TO GET INTO TECHNICAL DETAILS OF THINGS.
JUST FROM A PROCESS PERSPECTIVE, IS IT ADMIN'S INTENT TO COME BACK TO COUNCIL IN THE FUTURE ON EACH ONE OF THOSE PROJECTS? ARE WE GOING TO CONTINUE TO PAUSE? DO WE ACTIVELY GO FORWARD? DO WE ADJUST OR POTENTIALLY CANCEL ANY OF THEM? OR WOULD THAT BE SOMETHING THAT COUNCIL WOULD HAVE TO INITIATE FROM A PROCESS PERSPECTIVE? BASICALLY, WILL ADMIN BE COMING TO US WITH EACH ONE OF THESE AND ASKING COUNCIL'S FEEDBACK OR WILL THAT BE SOMETHING THAT IS LEFT UP TO COUNCIL AT BUDGET OR POST-BUDGET TO SAY YAY, NAY, OR SHIFT? THANKS.
>> THANK YOU VERY MUCH FOR THE QUESTION.
AS WE GO THROUGH BUDGET DELIBERATIONS, THERE WILL BE SOME SUGGESTIONS AND RECOMMENDATIONS THAT WILL BE COMING FROM ADMINISTRATION AROUND PROJECTS.
YOU'VE HEARD OF ONE ALREADY, THE FORCE MAIN TWINNING.
WE'VE RAISED THAT TODAY. WE RAISED THAT IN THE BUDGET INTRODUCTION PRESENTATION THAT HAPPENED ON JANUARY 15TH.
WE WILL BE MAKING RECOMMENDATIONS LIKE THAT WHERE THERE ARE OPPORTUNITIES TO PRESS PAUSE, TO WAIT, AND COME BACK WITH ADDITIONAL INFORMATION.
WE HAVE MORE INFORMATION ON A MORE APPROPRIATE GO FORWARD PLAN.
WE HAVE SOME THAT WE'LL BE ADJUSTING.
OF COURSE, THESE ARE ALL RECOMMENDATIONS TO COUNCIL.
DURING THE DELIBERATION PROCESS, WE WILL COME FORWARD WITH THOSE. THANK YOU.
>> THANK YOU VERY MUCH. JUST TO CONFIRM.
IF THERE'S ANY QUESTIONS FROM MAYOR ALTY OR COUNCILLOR MCLENNAN. NO. ALL GOOD.
THANK YOU SO MUCH. AS I SAID, GREAT FOOD FOR THOUGHT.
WE WILL BE MOVING ON TO THE NEXT SECTION OF OUR AGENDA,
[IN CAMERA]
WHICH IS IN CAMERA.IF I CAN GET A MOTION TO MOVE INTO CAMERA.
COUNCILLOR HENDRIKSEN, SECONDED BY COUNCILLOR FEQUET.
WITH THAT, WE WILL GO IN CAMERA.
[6. Business arising from In Camera Session.]
WE HAVE LEAVE OR LEFT OUR IN CAMERA SESSION FROM BUSINESS ARISING FROM THE IN CAMERA SESSION.NOW WE WILL GO FOR THE MOTION TO ADJOURN.
SECOND BY COUNCILLOR WARBURTON.
[LAUGHTER]
* This transcript was compiled from uncorrected Closed Captioning.