Okay, welcome everyone. Uh, good afternoon. I'm going to I'm going to call this budget committee meeting the whole c uh to order. Okay. Um, just need the first item is an adoption of the agenda that you have before you uh Mayor West. Okay. Hey, any discussion on the agenda? All in favor? Any opposed? That carries. Okay. Any disclosures of pecuniary interest today? I see none. All right. We don't we don't have any delegations. We go right to right to our scheduled business. Item 5.1 is a presentation by Gigi Lee, our director of financial services and treasurer. It's a It'll be a 20-minute presentation on our year-end operating results. Go ahead, Miss Lee. Good afternoon, chair and members of the budget committee. I'll be presenting the city's 2025 year and operating results which is agenda SRCFS 260009. I'll walk through the key results, the variances and the recommended surplus allocations. The draft surplus reflects overall positive budget performance in 2025, partially supported by one-time reserve funding from the snow removal reserve and offset by budget carry forwards. After these adjustments, the final surplus is 2.86 86 billion and it's being recommended for transfer to the transportation network RNR reserve fund to replenish the funds that were drawn during the year for West Beaver Creek Emergency Road Repairs. The city approved 2025 operating expenditure budget of $245 million and completed the fiscal year with a final year and operating surplus of almost $2.9 million. It's the net result of the favorable variances that you see on the screen as well as the uh unfavorable variance that you see as a contributor. The total year-end net operating expenditure were 98.8% 8% of the net operating budget. So the surplus percentage is approximately 1.2%. The key positive variances are highlighted on the slide which include higher tax penalty and interest revenues, stronger investment income, higher supplementary taxes, parking as well as lottery revenues as well as sports rentals, events, and other revenues. There were also other fearable results um related to payment of payment in lie of taxes from the York Region Transit Facility on Orlando Drive from recreation programs as well as a number of various contracts. Last but not least, um we did observe favorable insurance premiums for 2025 as well. The key pressures for 2025 are highlighted on this slide. As you can see, it's lower development related revenues, higher winter maintenance costs, as well as increased fleet and facility maintenance costs. We did also see a negative variance when it comes to personnel gapping, uh, which also contributed to the overall numbers. Overall, when you look at the bottom of the slide, it's almost $5 million in unfavorable contributors that were offset uh by the positive we just saw on the other slide. This slide highlights the budget carry force. $190,000 of the 2025 budget is being carried forward to finish initiatives that already started in 2025 that will see completion in 2026. These relate mainly to corporate priorities and audit related work, continuous improvement initiatives, and other fully funded programs. Next, we're going to take a look at the water and wastewater budget results. The fund ended the year with a $ 1.77 million deficit. This was mainly due to higher water purchase costs linked to non-revenue water, lower development revenues. So overall, the deficit will be funded from the stabilization reserve of $1.7 million. You would note at the bottom which I've bolded is uh the over billing issue that we started talking about in previous reports. staff have previously reported to committee that the review of nonwater non-revenue water was underway. So through the joint investigations between the city and regional staff uh we did identify a an inaccurate regional meter at the highway 7 and young corridor as a contributing factor which resulted in the city being overbuilt. We have received confirmation from the region that the correction will be made and that we will see the credit in 2026. The storm water management operations generated a surplus of $312,000 in 2025. This was mainly due to higher revenues from property reclassifications. It's partially offset by higher infrastructure repair costs. The surplus will be transferred to the water quality protection reserve fund. In summary, overall the city delivered a strong financial result in 2025 with almost $2.9 million in surplus representing about 1.2% of the budget. The water and wastewater fund saw a temporary deficit due to the billing issue and that will be corrected in 2026. And as you saw in the earlier slides, storm water management remains stable with a modest surplus in 2025. The report recommendations are highlighted on the slide. >> Mr. Chair, that concludes the first presentation for the year-end surplus. >> Okay. Thank you very much. So, uh, we have questions of the presenter and, um, would like a motion to receive. Go ahead, Mayor West. >> Well, thank you. Uh thank you very much as always madam treasurer for all of the work that you and your staff uh do on this. Um I just a couple of questions. So on slide two the funding um because of the the size and impact of the snowfall this year uh we are we have spent more than we budgeted for in our snow removal. There's nothing we can do about that. Um I will have a conversation with mother nature after that to uh to correct that problem next year. But uh in the meantime um so we're funding 533,200 from the snow removal reserve uh uh fund and you've made a note there that it that now the fund has been depleted. Um what does that mean for future years? like I we how do we how do we put back into that reserve fund what we need because that reserve fund in this case is very important because it kind of levels off the impact of a of a bad winter >> through the chair to the mayor. So that reserve has been depleted uh for the purpose and intended use. Um in the future what we are proposing essentially is to use our tax rate stabilization reserve. So in one of the other reports that we have on the agenda today, staff did make that recommendation to repeal that reserve. So that on an ongoing basis and moving forward, we will use the tax rate stabilization. >> Okay. >> Right. But you told me that. Okay. That's right. So So in so there will be no snow removal reserve going forward. We'll just use the tax rate st account instead for this for that purpose. >> That's correct. >> Okay. All right. Um that was the first question. The second question uh on the um water and wastewater slide or sorry storm water my my mistake the storm water uh slide which is slide eight I believe there were recent changes made by the provincial government to um stop municipalities from uh from using a storm water rate applied to agricultural land which I you know I wasn't that thrilled about But um the how what kind of an impact have we calculated the kind of what kind of an impact is that going to have because essentially what I understand is that the number of pieces of property now that will be exempt from paying the storm water charges that amount will be distributed amongst everybody else. So have we calculated the impact that we're going to have on our storm water rates as a result of that uh provincial decision? through the chair to the mayor. So that is effective as of July. Um so for 2026 we do plan on continuing with our current practice until the effective date of July. >> Uh we have calculated the the impact and I believe over the five years it's about 600 it's about $600,000 overall. um which means that is the amount that we can no longer collect from this group. And to your earlier point, um we need to redistribute that, >> right? >> So that we're not shortch changing ourselves when it comes to the um overall financials, >> right? So what it means is that yet another provincial decision uh is now going to uh have the potential effect of increasing everybody's storm water rates by a small amount. And what I find frustrating about that was that we already baked into our storm water rate system uh all kinds of discounts for agricultural land to the point where I mean they weren't paying anywhere close to what residential land would cost. But now with this decision uh because not everybody is going to be contributing to the revenue uh it has to be redistributed and and it and put on to everybody else's bill. through the chair. That that is correct. >> Okay. So, will will we be getting a report on that on what the impacts are going to be at some point in this cycle? Like I sorry what what I'm getting at is when when the new storm water bills go out I want it to be clear that you know the rates that we work so hard to have approved are the rates but then there was this unexpected move by the provincial government that will raise everybody's rates >> through the chair to the mayor. I expect that to come back through the budget process as we work through the 2027 budget. this is where we're going to see that redistribution between one group to another. So, we'll certainly report on that. >> Okay. I'd like that to be made clear in the in the documentation to so so we all know how much that's going to cost everybody. >> Okay. Thank you very much. >> Okay. I I see councelor Silvitz had her hand up. Uh C councelor Silivates. >> Thank you, Mr. Chair. Um, the mayor cho the mayor chose all my questions. Thank you. >> Oh, we did. Okay. Well, maybe maybe you'd want to move receipt of all the recommendations in items 5.1. And would you would you like to do that, counselor? >> I can do that. Absolutely. Unless the mayor wishes to do so be >> because I stole all of your questions. Then in the spirit of cooperation, you can move it. >> Thank you, sir. Okay. So, so moved by by councelor Silvich. We've got all the recommendations in item 5.1 on the floor. I I don't see anyone else with questions or discussion regarding that. So, um just going to make a couple comments, put it to a vote. Um I I just want I just want to note uh you know as you look at these numbers just remember that this is this is the final 20 2025 actuals and the numbers just represent the deviation from what was budgeted versus what was actually actually spent. So um it's not a it's not a statement on how any of these item lines are performing. It's just you know we make our best guess and this is uh this is where we ended up. I I think it's um very good indication. I think our budgeting is is uh pretty much bang on. There's always those unforeseen circumstances and and um I I just have to highlight before we leave this issue um that that uh rebate that we're going to get from the region is is going to be extremely significant. uh you know we've been wondering for the past 3 four years why um we we were over on our projections for stor uh for water cost you know just to flow through from the region um you know and our staff did a great job everyone involved should be commended uh for for discovering um that that we were overpaying that in this case this year is almost $1.6 6 million that um but it it goes back three four years maybe longer and the total is I believe it's about $6 million. Do do you know what the total rebate will be coming from the region or that's still a dispute? >> To the chair we have confirmation it's $5.9 million. >> Okay. So very significant. Um like 1.5 million here for four years. um you know that had that that had been the one the one issue we were continually grappling with and um that that's been solved and we are going to be in a very very good position to uh use that rebate to really strengthen our our uh reserves for for that particular item. So um that I that I believe needed to be mentioned but other than that thank you for the presentation and the report. Uh, all in favor? Anyone opposed? Okay, that carries unanimously. Thank you very much. And don't go anywhere, Miss Lee. You're you're up again now for a 15-minute presentation on our 2025 investment portfolio results. >> Thank you. I will now walk through the 2025 investment portfolio results. So as you can see on this slide this it highlights the economic and financial market conditions that we operating in in 2025. Economic growth was modest at 1.7%. Uh inflation and employment increased slightly from the beginning of the year till the end of the year. Overall interest rates declined um by 100 basis point from 3.25 to 2.25 at the end of the year. And obviously the market was overshadowed by US tariffs and trade uncertainty. However, despite all of that, as you can see um at the very bottom, we did show the graphic that equity markets perform strongly despite the ongoing uncertainty. This slide highlights the investment portfolio results. As you can see from the table, the portfolio def delivered uh strong returns across both fixed income and equities as it realized total income of almost $42 million or 5.79% based on the average balance of $721 million. The income return reflects investment income earned on all investments and directly translates to the amount of interest allocated between the operating budget and the city's reserve funds. some gains were from realized equity returns uh which are not expected to recur. When we look at the the right hand side of the table, you we will see that the total portfolio return was 7.89%. This is supported by market gains. It combines realized in in realized investment income with marktomarket adjustments which reflects the change in the market values of the underlying security. Simply put, it means that valuing investments based on their current market value at a specific date rather than what they were originally p purchased for. So overall, as we can see on this on in this table on the slide that we performed um very well in 2025, we also show the comparison to 2024. Um I would say we we did have another stellar year when it comes to investment portfolio. This next table highlights the benchmark comparison which is a combination of number of indices that we benchmark to um that are leading indicators used in measuring Canadian market performance. As you can see the total return of the benchmark was 6.25% and the city's portfolio outperform its benchmark by 1.64%. This next slide highlights the portfolio breakdown. The portfolio remains well diversified across short and long-term investments as you can see from the left hand side of the table or or the slide uh which was reflective of December 31st and 2024 our position then and then on the right is our position at the end of 2025. As you can see also that on the pi chart on the right, cash was shifted into short-term securities to managed the interest rate changes that we saw throughout 2025. The city's investment policy is reviewed at least annually and it was last updated in June of 2024. So that was two years ago. The financial market conditions have continued to evolve and in response staff are recommending refinements to the policy to ensure that the portfolio is set up for ongoing success and to capitalize on future opportunities. The enhancements will continue to abide by statutory requirements and adhere to our main investments objectives and principles. It'll provide more flexibility in making investment decisions that will benefit both short as well as long-term investments. I want to mention that the the recommended updates are solely um based on increasing the portfolio limit on maximum sector exposures when it comes to credit unions as well as the one investment funds. Looking ahead in 2026, there are several external factors that will continue to impact the city's financial position. As we know, the geopolitical risk will continue to create uncertainty in global markets, which can influence our investment performance and broader economic conditions. We're also seeing uh ongoing inflation pressures and uncertainty around interest rates. While rates decline in 2025, future future movements are less predictable and it could affect both our operating costs as well as our investment returns. As a result, we continue to expect volatility in the financial markets, particular in equity markets, which contributed strongly in our 2024 and 2025 results. In this environment, maintaining a well- diversified investment portfolio remains critical to managing risk and supporting a stable and long-term return. The city is well positioned with a strong portfolio structure and with the updated policy framework, it'll provide flexibility to respond to these changing environments. The recommendations of the report are highlighted on this slide. And Mr. Chair, that concludes my second presentation. >> Okay. Well, thank you very much and and uh you know, once again, congratulations on an excellent performance in the portfolio. Richmond Hill's got a that's a sovereign wealth fund that that works well for the benefit of our residents. So, um, is there someone wanting to move the recommendations in item 5.2? Thank you, Councelor Tree. And any questions, Councelor Davidson? Okay. Well, um, you know, say thanks again for, uh, that that that great great performance. Uh, you know, I I do you expect to be setting targets a little lower for for next year in the environment coming up or or were you predicting about the same as we had predicted? At this point is a little too early. No pressure. um through the chair, we're we're obviously um continuing to to monitor and we have uh our forecast as well, but I I would say given a lot of the the market uncertainties, I I and as I mentioned earlier on one of the slides, some of the capital gains are not recurring, right? So so I don't expect us to be able to reach the same level that we have over the last two years, but that's largely market driven. >> Okay. Well, I I definitely see the wisdom in underpredicting and overperforming. That that's served us well last couple years. That's for sure. Um just I just end I just want to say I agree and I think it's a great idea to have more flexibility in and uh in the amounts even though you're well under those limits. You probably remain under the limit, but you have the the flexibility to to go into those areas that are performing well. So, thank you for that. I'm going to call the vote on the motion. All in favor? Any opposed? Again, carries unanimously. Okay. Thank you. So, one one more presentation. Uh, this one is our reserve and reserve fund. Oh, no, there isn't. Uh, this is just for us to deal with. We have a report on the 2025 reserve and reserve fund status. Uh, does anyone have questions on that report or one? I need someone to move it. Thank you, Councelor Tree. Any anyone uh councelor Thompson? Um, thank you very much. uh through you the chair. I just um not exactly sure how to phrase the question, but portions of the city's window snow removal fleet uh may be approaching its end of life uh in the coming years. So, I'm just wanting to get some clarification as to uh what reserve fund or capital financing strategy is actually intended to support replacement of this equipment going forward. Okay. Commissioner Steel through you, Mr. Chair. So, uh, we haven't determined yet that we're going to be replacing them for sure. That'll be a council decision when the time comes. Um, for sure. Um, but as it's a replacement, it would come from the repair and replacement reserve, uh, if they were being replaced. >> Right. And I think that's kind of what I wanted to hear. So, um, the intention is that if any equipment replacement, doesn't matter what the category is, it's actually going to be under the repair and replacement reserve planning basically. Okay, I'll leave it there. Thanks so much. >> Okay, councelor Shu. >> Thank you, Mr. Chair. Uh, this is actually a follow-up question for this snow removal. Uh, what level of snowfall can the city handle typically each winter without needing to draw from the reserve? This a question I want to ask for long through Mr. Chair. >> Uh, through you Mr. Chair. So, uh, our operating budget, our annual operating budget has, uh, various, uh, components for winter maintenance. I don't know the total of them offhand or how that would translate to a snow level, but we we do base our our operating forecast on the average of the past 5 years. >> Okay. Okay. That's all my comments. Thank you. >> I see no more comments. So, I'm going to call the vote on item 5.3. All in favor? Any opposed? Carries unanimously. Very good. Okay. So, item 5.4, we've got um a 2025 development charges, cashing little parkland, and community benefits charge reserve fund statement. That report is also before us. Councelor Shu. >> Thank you, Mr. Chair. And I want to move it. Um just a quick questions. Uh the latest provincial bill 98 may reduce our city's ability to collect DC potentially by as much as 50% in the worst case. So uh any assessment of how this might impact the DC reserve funds in the coming years through Mr. Sh through the charity counselorship. So the details of that announcement have yet to be released. Um so definitely we've done some preliminary analysis based on what that potential impact would be. Um but again we'll have to await the details in order to provide a more detailed analysis. Um we continue to work on our budget process um you know because we we are going into budget season. So we we do have those um um in the back of mind front of mind. So definitely we are making sure that we continue to deliver the city's capital program as it relates to gross related projects in a financially sustainable manner. >> Okay. So that means there's no confirmed federal and provincial fundings to just help cover this shortfall. There's no data yet as well. Right. >> That's through the chair. There has been no detail other than what we saw on that one announcement. Um so we have they provide an estimate or range of the reduction and they did talk about the the overall the contribution from the different levels of government but that's the extent that we have when it comes to details. >> The last question is do you know the timeline what the details will come will come up is any timeline >> through the chair to council shu um I believe it's at the at the end of this month end of May. >> Okay soon. Thank you those are my comments. Thank you. >> Okay. Uh Deputy Mayor Chan. >> Uh thank you chair and um thank you madame treasurer and staff everyone involved. So um by um has been moved to uh recommend this report be received and so on. So that would fulfill our requirement in terms of complying with uh what uh the um providing to the minister of municipal affairs and housing under bill 3. I understand that. Um I guess my question well maybe is a comment first. I think need to be point out that um particular I think it said very nicely the very last sentence page two I don't want it to get a notice. Um relating to the latest rounds of provincial legislation uh including mentioned about here bill 60 uh fighting delays building faster act 2025 and then amendments that's important to the development charges act uh 1997 and also uh bill 17. Um all these are relating to meaning um it doesn't mean necessarily uh expanding the uh or increasing revenues for the days to come or years to come for the women charge men parties not just Richmond Hill. So the last sentence I want to really emphasize and and so that we all take note while we voting. While this affects the timing of development charge collection collectively all this provincial legislation has the cumulative impact shifting financial risk and cash flow pressure from developers and to municipalities. The reason I emphasize this point, I think that needs to make clear that um while um this is something we are reporting in compliance what we require from the province. Uh I think that collectively municipalities not which he for one would certainly uh continue to advocate that need to really shift the balance in terms of what we just hear. Um and I think it's also evident in the report. Uh for example, uh we are not collecting zero dollars uh on these community benefit charge. Uh I I think partly is also because of the whole structure has been shifted and changed. So um in this case uh I I would ask that uh uh I don't know to what extent that uh this may be uh I guess we all uh members of organizations such as for win uh AMO or maybe through the mayor at the big Ontar city mayor caucus. I think that point um that in terms of the more uh fair share of allocation of risk uh to be considered um and I just want to raise a comment um and I'm concerned about looking down the line there's more more on the development charge referral and things and so on that might impact um future report but on this report certainly I support the motion. Thank you Mr. chair for me to uh uy site something we ought to observe and pay attention to. Thank you. >> Okay. Thank you. Next is Mayor West. >> Uh thank you. Just uh I I think this is the most appropriate place to raise this. um at the region the other day, we had a report um that came out of a request that I had made to um uh summarize all of the charges that changes to provincial legislation have made to the uh to the finances of the region. And the amount that they came up with was uh 4.9 billion. That's with a B dollars. That's not small potatoes. That's very very very big potatoes. And so I wonder as I was listening to that and and just the sheer magnitude of those decisions that have that are going to most certainly impact taxpayers all across York Region. I was wondering uh what would be the additional costs on municipalities because that's only the regional level. Have we or could we uh put together a similar report at some for for council's consideration or information I guess at some point in the not too distant future where we can calculate over since 2022 how much uh have we forgone or or you know in in amounts from different um different places that have have come to fruition because of these changes in provinial legislation like how hard would that be for us to do the same thing in a report? I I don't want to do a make work project cuz I I am quite certain that our amount won't be as big as the region, but I wonder if that information could be pulled together because it would be interesting to know what the cumulative effect uh would be. It's a very good question, Mayor West. And there your answer's on its way here. >> Um, through the chair to Mayor West, it's something that we can put together. Um, we have been tracking that at a high level. So I think in the near future there is a report that will be coming back to council um as it relates to the legislative impact of the upcoming changes as well as the we talked about the motion from last week. So we'll include that all in the package so that um council will be able to see in one report the what we've uh forgotten in terms of revenues and what the future impact is that we're looking at. Okay, I'll leave it there for now, but I uh I look forward to seeing that because I think that's going to be very important information for council to take a look at uh because there may be some well, there will likely be some future decisions that we have to make around uh participation in in various uh well in this program, this provincial and federal program um regarding DC. So, I think if we can kind of time that report at about that same time, I think that would be very helpful for council. Thanks a lot. Okay. Thank Thank you, Mayor West. And uh I'm I'm not sure if that would import report would include also um staff's time and and u how how much how much resources dedicated to keeping up with the changes and I I know in I know in planning it's difficult to track and I'm sure there's a lot of a lot of hours and um a lot of resources uh just just um following the bouncing ball as the province continues to intervene and and and and make these these changes. So, um we look look forward to that. But as far as our 2025 uh statements, it's it's it's excellent this this new requirement to it's it's something that we do anyways. We've always been uh pretty open and accountable with their disclosures and our our reserves and use of reserve funds and park cash funds. So, uh we've got the report and the motion to receive it on the table. Uh any all in favor? Any opposed? Okay, that carries unanimously. And finally, we get to item 5.5, which is a staff report regarding the 2025 grant portfolio update. And we're just looking for a motion that that be received for information. And anyone have questions there? Councelor Tree, you want move receipt? Okay. Any other discussion? Oh, councelor Davidson, go ahead. >> Thank you, Mr. Chair. This is just a general a general question at the end. And I think the city is very accountable to the residents. I think we are very um smart and conservative about how we use the money. Is there anything about this budget year 2025 that we've thought, you know what, we're going to do something different next year? anything that we learned in the last year that we let residents know that we're constantly adapting, changing, or is there something we did that we're like, "Okay, that works so great. We're going to we're going to do that again." I know that's a very general thing, but I feel like people might have the mindset cities don't change and they don't react. And I think we do. So, I'm just wondering if there's anything in particular we think, well, we would that worked. We're going to do it again. uh through you uh Mr. Chair uh to Councelor Davidson. Um I'm not sure if there was anything specific in the grant report, which is what we've got in front of you right now. >> I know. Sorry. I was trying to do an overall. Should we finish that first? >> Uh I think we need to we had uh a mover to receive the grant report vote on that. >> I didn't want us to close up before I got to answer that general question. We can vote. of the clerk in terms of the general okay uh comments on budget itself but we always do a lessons learned on our on our budget process um we have received some direction uh towards the 2027 uh budget and certainly uh from city administration I've already uh with uh the uh our treasurer director of finance uh put direction out to our city staff on expectations uh towards compiling the 2027 budget uh information. I don't know if that answers your question, but Gigi may have something to add. >> To councelor Davidson, I would echo what the city manager has just mentioned. And I would add that in June on June 23rd, our next budget committee is where we come forward with a budget strategy and you'll be able to see some of that within the report as well. >> Thank you. Sorry. Sorry to get in the wrong spot. I know. Thank you. >> No problem. That was your last chances. So, we're going to take a vote here. All in favor of the motion? Any opposed? Anyone want to move adjournment? >> Mayor West. All any discussion? All in favor? Any opposed? That carries unanimously.