Council and Budget Committee Review Richmond Hill's 2025 Year-End Finances

Council and budget committee reviewed Richmond Hill's 2025 year-end finances, investment performance, reserve funds, development charge risks and the impact of recent provincial legislation. Staff reported a $2.86 million operating surplus on a $245 million budget and recommended transferring it to the transportation network reserve fund. Members also discussed a $1.77 million water and wastewater deficit, the depletion of the snow removal reserve, and possible municipal impacts from provincial changes to development charge rules.

Topics Discussed

1. 2025 year-end results and reserve transfers

Under file SRCFS 260009, staff reported the city ended 2025 with a $2.86 million operating surplus, about 1.2 per cent of the approved budget. Director of Financial Services Gigi Lee said, "The draft surplus reflects overall positive budget performance in 2025, and recommended the funds be transferred to the transportation network reserve fund "to replenish the funds that were drawn during the year for West Beaver Creek Emergency Road Repairs."

Council also heard that $190,000 in budget carry-forwards would support initiatives continuing into 2026.

2. Water billing error and utility fund deficit

Council discussed a regional metering problem that led to overbilling for water purchases. Notes before council said the city identified about $5.9 million in overpayments over more than four years, including roughly $1.6 million tied to 2025.

One councillor said staff had been trying to understand why storm water-related flow-through costs were coming in high and added that "our staff did a great job" identifying the issue, calling the expected rebate "extremely significant."

The water and wastewater fund ended the year with a $1.77 million deficit. Staff attributed that mainly to higher water purchase costs linked to non-revenue water, with the shortfall to be covered from the stabilization reserve.

3. Snow removal costs and reserve pressures

Council reviewed winter maintenance overruns after heavier snowfall than budgeted. The city drew $533,200 from the snow removal reserve, leaving that reserve depleted.

Mayor West said, "we have spent more than we budgeted for in our snow removal. There's nothing we can do about that." He added, jokingly, "I will have a conversation with mother nature" about next year's weather, before asking what the depleted reserve means for future winters.

Council also asked about replacement planning for aging winter maintenance equipment. Councillor Thompson said "portions of the city's winter snow removal fleet may be approaching its end of life in the coming years" and asked what reserve fund or capital financing strategy would support replacements. Staff said that work would be funded through the Repair and Replacement Reserve, subject to council approval.

4. Investment portfolio and reserve planning

Council reviewed the city's investment portfolio, which reported $42 million in total income, a 5.79 per cent return on an average balance of $721 million, and an overall portfolio return of 7.89 per cent, above benchmark.

Staff also presented proposed updates to the investment policy to provide more flexibility around sector exposure limits for credit unions and investment funds. The discussion linked investment income to both operating support and reserve fund growth.

5. Development charges and provincial legislation impacts

Council discussed the financial effect of provincial legislation on development charges and municipal revenues. Notes before council said Bill 98 could reduce development charge collections significantly, with staff expecting more detail by the end of May.

Deputy Mayor Chan said recent provincial legislation has "the cumulative impact shifting financial risk and cash flow pressure from developers and to municipalities."

Mayor West pointed to a York Region estimate of $4.9 billion in costs tied to provincial legislative changes and said, "That's with a B dollars. That's not small potatoes. That's very very very big potatoes." He asked what the added costs could be for municipalities beyond the regional level.

Staff also told council the city is currently collecting zero dollars in community benefit charges and said a further report would come back on legislative impacts.

Motions

• Item 5.1 – Budget recommendations and 2025 actuals — Carried unanimously
• Item 5.2 – Portfolio Performance & Policy Framework — Carried unanimously
• Item 5.3 – Reserve Fund Status & Snow Removal Equipment — Carried unanimously
• Motion to receive the grant report — Carried unanimously

Attendees

The full attendance list was not included in the supplied notes. Named members and officials referenced in the discussion were:

• Mayor West
• Deputy Mayor Chan
• Councillor Shu
• Councillor Thompson
• Gigi Lee, Director of Financial Services