Wednesday, December 14, 2016

City Council Timeline: Monday, December 12, 2016

Monday nights final regularly scheduled session of the year was relatively free of controversy, but one steeped in the cold reality of the city's aging infrastructure and the need to make plans to address it.

Much of the fifty five minute session was turned over the city's Financial Officer Corrine Bomben, who laid out the financial blue print for the January fee increases for the City's utilities and how a portion of the fees collected would be used towards a dedicated fund for asset management for those utilities.

That segment of the evening dominated the discussion with each of those Council members that were in attendance offering up thoughts on how best to address those issues, as well as with City Manager Robert Long providing a bit of a reality check for Council members on the financial challenges the city faces when it comes to its infrastructure issues.

Council also received two reports on the night, one related to a proposal to stratify a building on First Avenue East, the other a Report related to the 2017 Financial Plan and Capital works and purchases. Both were approved as part of Monday's proceedings.

For some background on the items of note on the evening, the Agenda for the Regular Council session is available here.

Prior to the 7 PM meeting, Council also had a Closed Session Scheduled for earlier in the day, the notice to close it to the public can be examined here.

Further information from our overview and placement in the video archive can be found below, with the permanent record of the minutes added as they are posted to the city website.

In attendance December 12, 2016

Mayor Lee Brain-- Present 
Councillor Barry Cunningham-- Present  
Councillor Blair Mirau -- Absent
Councillor Wade Niesh -- Present
Councillor Nelson Kinney --  Absent
Councillor Gurvinder Randhawa--  Present 
Councillor Joy Thorkelson -- Present 

Video Archive for December 12, 2016

( 0:00 -- 1:00 ) Regular Council Session -- The Mayor outlined that the Regular Council Agenda was light and that there were no motions to consider on the evening. He read out the minutes of previous meetings and adopted the Agenda for the evening.

(1:00 -- 13:00  ) Report from Director of Operations related to Stratification of property on First Avenue East -- Mr. Pucci provided an overview of the request to convert the existing building located at 101 First Avenue East into two separate strata units, one private residential, the other a commercial unit.

Following the report, Council members weighed in with a number of questions, requests on clarification and comments related to the application. Councillor Cunningham expressed no concerns related to the request, while Councillor Thorkelson expressed her hesitations, outlining how she had concerns over the nature of changing or weakening the current city policy.

Councillor Thorkelson then offered up a more specific motion related to the request, suggesting an amendment that makes note of the conditions related to the specific request under consideration.

Councillors Niesh and Cunningham provided some final observations on the topic, with Council then adopting the motion with the amendment.

( 13:00 -- 16:30 ) Report from the Chief Financial Officer regarding the 2017 Financial Plan and Capital works and purchases -- The City's CFO Corinne Bomben provided the overview for Council detailing some of the Capital Works and purchases ahead for 2017.

The total cost for the work ahead comes to  $27 million , with the funding for the projects including 60 percent from grants, 23 per cent through dividends with the remainder financed through savings, short term financing and operations.

Some of the projects to be addressed in 2017:

Continuation of the access road to Woodworth Dam, known as phase one
Replacement of the Woodworth Dam, phase two
And Replacement of the Submarine line, listed as phase three

The CFO noted that the City has received grant funding for the first phase, with the city having applied for Grant Funding for the other two phases.

Some of the other projects to be taken on in 2017

The start of the West berm expansion of the landfill the final piece of the existing landfill cell.

Recreation complex will install accessibility lifts in the Civic Centre and Aquatic Centre, repairs will also take place on the plumbing to the hot tub and the Arena will see new LED lighting.

The City will take possession in July of the new pumper truck for the Fire Department.

During repair work to the 2nd Avenue Bridge it was determined that some timbers for the structure should be replaced in 2017.

With the province announcing plans to pave Second Avenue from McBride to the Ferry Terminal the City would also like to combine the provincial program with the downtown paving plan for Third Avenue.

Councillor Thorkelson had a number of questions on the nature of the capital budget allocations for the CFO prior Council voting to carry the motion.

16:30 -- 54:00 ) Report from the City's Financial Officer on the Utilities Bylaw and Asset Management Bylaw -- Ms. Bomben outlined the nature of the seven bylaw provisions under consideration on the evening.  Four of which include the Water, Sewer, Solid Waste and Cemetery Rate Bylaws which expire at the end of 2016, explaining how each utility is self funding and to maintain that self sufficiency the operation increases proposed are three percent per year except in certain circumstances. 

By way of comparison, she also noted for Council that the previous rate bylaws which cover 2014 through 2016 had increases of Five percent.

The CFO outlined the work that staff had taken on in 2014 to review the Solid Waste Bylaw and had it rewritten to make some improvements.

In 2016 City Staff did the same for the Water and Sewer Bylaws, the new bylaws will feature clarification to language, will remove references to outdated bylaws and adds further protection for the city in certain circumstances.

Additionally conversion to water meters for commercial payers is encouraged and fairness will be incorporated into the bylaws to eliminate the subsidization of certain services by the community rate payers as a whole.

One final addition to the Water, Sewer and Solid Waste Bylaws is the introduction of an Asset Management Levy of two percent, this charge is to be allocated to a respective reserve fund to be created for each utility.

These separate utility reserve funds are the final three bylaws to be considered and are proposed as a form of savings account that will receive the asset management levy. The accumulated reserve amounts can be drawn on by Council for planned replacement and emergency funds as the case may be, for the specific utility.

Ms. Bomben further explained how such a systematic allocation of this nature would safe guard rate payers from unusual spikes in rates, which provides predictability of fees and demonstrates proactive management of core infrastructure.

She also noted that City Council has embarked on a process of Rebuilding Rupert and that Senior Governments now require an asset management strategy, she observed that the utility reserve fund bylaws under consideration would demonstrate to the community and the granting agencies that Council has a commitment to managing its core infrastructure.

She then reviewed how City Staff suggests splitting the proposed five percent fee increases per year, noting that staff recommends that three percent would go towards regular operations; while two percent would be set aside for capital renewal of core infrastructure.

Mayor Brain then inquired if the city has ever attempted asset replacement management before, with the City's Financial Officer noting that this is the first time that such a project has been considered, noting that in the 2016 Budget Process council had consulted the public on whether a two percent increase was considered reasonable, and the response at that time was that it was reasonable.

The Mayor followed up that observation with a question related to how grant applications are viewed by Senior levels of government, asking if those groups require that the city show an asset management plan or they won't be eligible for them.

Ms. Bomben  noted that they do and in the most recent application the City had been requested to provide to not only provide a plan, but to show that you are putting money away and that in waterworks applications the City had been asked to demonstrate where they were on an asset management strategy and while they didn't ask for amounts that had been set aside they did ask whether something was in place to replace any of the assets that they would construct with today's grant dollars.

With that outline of the proposed fee increases provided, Council members then began a lengthy review of the various elements of the presentation.

Councillor Randhawa asked for a breakdown of what kind of impact the fee increases would have on the taxpayers and what the amounts taken in by the city would be put towards.

Councillor Thorkelson offered up her observations on how the City previously approached utility reserve funds and noted she wasn't opposed to an asset management plan, but did have concerns over how the staff was recommending it be put in place.  Suggesting that any allocations should be taken as part of the fixed budget for each utility and not as a separate increase. She also noted that Council should have stricter rules to determine how the funds would be set up and used for.

Ms. Bomben replied to those thoughts by noting that municipalities are typically trying to catch up and that the idea is that you should be putting away funds that match your depreciation each year, noting that for utilities some of the Prince Rupert utilities are pretty well at the end of their life, while newer work is at the start of its life cycle.

As an example, she called attention to the amount of work required on the city's water infrastructure and how the two percent recommendation is considered a starting point.

She further outlined how the creation of the funds is to provide some confidence that reserves are created so that no one can go ahead and use them for emergency repairs, or use it as a slush fund for a capital project, advising that the idea is for Council to determine how the fund would be used.

The Mayor noted that even if Council moved to go ahead with the recommendation they could work out the details as to how to how the rules would work over the next couple of months, observing that the bylaw rate requirements are the more immediate concern for Council.

As for the consequences if the City doesn't set up the reserve funds, Ms. Bomben noted that the city could still track the increases that would go into effect in January and transfer them to the reserve fund once the bylaws were completed.

The City Manager weighed in at this point of the conversation, noting that without action at some point the City could run out of money to tackle some of its major infrastructure issues and services, which he called a serious consequence.

He offered up that the reality is that within a year or two the federal government would not be getting any grants, unless the City has an asset management program, those are the signals that the senior levels of government is giving at this time. With the City having received 80,000 dollars last year from other government levels to create a plan and that you just can't leave it on a shelf you have to put money into it

Further to that he noted some of the risks the city faces, including such issues as the prospect of a failing bridge or a water system problem, noting that for the most part many of our infrastructure issues are way beyond their useful lifespan.

He added that the city is running on borrowed infrastructure time and how if the City doesn't start to put some money away to cover those things off, the City runs the risk of having no money when something fails and run the risk of not ever being able to get another grant because we don't have a proper asset management program.  Calling them issues that are risky things for Council to ignore, stating that as professionals they have an obligation to advise council that this is the most rational and appropriate behaviour on behalf of the city as a corporation to put some money away.

He noted that as the CFO advised it wasn't a lot of money, adding that the asset management deficit was a lot more money than the City could afford, but that putting aside some money towards an account with a specific purpose that at least would allow the City to continue to make grant applications and address the failures that have been coming up on a frequent basis of late.

He closed his presentation by reminding Council that the city is facing infrastructure issues that are over 100 years old and past their usable life span, suggesting that the fund approach would at least send a signal to the senior levels of government that they are working towards addressing the issues that face the community.

The Mayor offered up his comment that he is in favour of the recommendation, though did accept the idea offered up by Councillor Thorkelson to ensure that proper rules are in place.

Councillor Niesh observed that he wished that previous councils had addressed the situation when the town was in its heyday and put money aside for the future, he noted some of the work that federal and provincial governments had put onto the city, adding as much as he hates the idea of increasing taxes it is something that has to be done.

Councillor Randhawa noted that the City's taxpayers already have the high tax rates and that any increases will have impacts on the residential and commercial realty markets, observing that he can't support the motion and would like to see staff deliver some different numbers.

Councillor Cunningham had a number of questions related to the schedule of fees and conditions that were attached to them, noting that like Councillor Randhawa he was concerned about the impact that they would have for property owners.

The Director of Operations Richard Pucci provided some background on how the City would approach those enforcement issues, the City Manager also provided some background to the themes related to those conditions of concern.

Mr. Cunningham followed that issue up by noting that some of the conditions don't apply to Prince Rupert and should be eliminated, he also suggested that Council should revisit those elements he has concerns about.

As for the need to direct funding for asset management purposes he had concerns on the impact it could have on people of fixed incomes, but did accept that there is a need to address the issues the city is facing.

To bring the conversation on the topic to a close, Mayor Brain recommended that Council move forward with the proposal for the fee increases and asset management fund, mapping out how they would address the reserve fund in the months to come.

Councillor Thorkelson also asked that City staff provide a five year plan for Council to consider to get a better understanding of what the increases would be over the next five years, and to break those numbers down to show how they would be allocated to the regular utility funds and the reserve fund.

She also called for staff to provide an estimate on what a new cell for the City Dump site would cost and when the city will have to build that larger cell at the landfill site.

Council gave first, second and third reading to the motion, with Council to give the bylaws a final review and vote at a Special Council session for Wednesday at 5:30 PM.

A full list of the proposed fee and rate increases can be found from the City's Agenda for this evening's meeting, the schedule of increases through to 2019 can be reviewed from pages 16-70

( 54:00  -- 55:19  ) Reports, Questions and Inquires from Council

Councillor Cunningham raised the issue of the conditions of the sidewalks when it comes to the clearing of snow and ice by local commercial owners and residential owners. He noted that on those that are owned by out of town residents there are stretches where the sidewalks have not been cleared. 

He asked that city staff contact those owners and that the absentee owners and if the city needs to do the work they should and send the owners the bill. Adding that he would like to see the absentee owner taken to task.

With no other items to address on the night the session was adjourned.

You can access the City Council Review for December 12th herewhere a number of items regarding the council session, including links to local media coverage, if any, can be found.

As always, our Council Timeline is only a reflection of our observations from the Council session of the night. Be sure to consult with the official minutes from the City, when posted to their website for further review.

In addition to the city's official minutes, the City's Video archive provides a helpful record of the events from each public council session.

Official Minutes of the Regular Council Session from November 28, 2016 (not available yet)

As noted above, Council is holding a Special Regular Council session this evening at 5:30 to move forward with their fee increase and asset management program.

The next regularly scheduled Council session, the first for 2017 takes place on January 9th.

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