City Council Budget Committee Reviews 2026 Forecasts

The budget committee reviewed the city's 2026 capital and operating forecasts. Staff reported that closing 186 capital projects would return about $15 million to reserves and reserve funds, while required budget adjustments would draw $4.16 million, for a net return of almost $11 million. On the operating side, staff reported a midyear unfavorable variance of almost $4 million in the tax-supported budget, driven by winter maintenance, fire and emergency services staffing, and lower development revenues. Councillors also questioned rising fire-truck replacement costs, reserve-fund strategy, and a proposed $500,000 allocation tied to tennis and pickleball implementation.

Topics Discussed

CAPITAL PROJECTS: 186 projects closing with net return of almost $11 million

The committee received the Capital Project Financial Status Report. Staff said 186 projects listed in Appendix A would be closed, returning $15 million to reserves and reserve funds.

Director of Financial Services Gigi Lee said, "Closing 186 projects in appendix A will return $15 million into the reserves and reserve funds. Offsetting that, the budget adjustments require a draw of $4.16 million. The net result is almost $11 million being returned to reserves and reserve funds, which will strengthen our funding position heading into the next budget cycle."

Councillors praised the result as a sign of project management discipline. Deputy Mayor Godwin Chan thanked staff "for managing the projects" and said the city was "able to close some of them."

OPERATING FORECAST: Midyear variance tied to winter maintenance, fire staffing and lower development revenues

Staff reported that the tax-supported budget was showing an unfavorable variance of almost $4 million at midyear.

Lee said, "At midyear, the total tax supported budget is almost $80 million and it shows an unfavorable variance of almost $4 million or 105% of the budget. The largest pressure sits within community services and in planning and building services where mid-year spending is at 109 and 142% respectively. This is due to high winter maintenance costs, fire and emergency services staffing as well as lower development revenues."

Discussion focused on several specific pressures identified in the report, including winter maintenance, fire-service staffing costs, and reduced development-charge-related revenues. Councillors also raised questions about recreation revenues and reserve balances.

FIRE SERVICES: Councillors questioned truck replacement cost increase and staffing overruns

Councillor Scott Thompson highlighted the increase in the aerial fire truck replacement budget, saying, "in the 2022 budget we were looking at the replacement of the aerial fire truck and at that time the budget was 1.5 million and when I look at the report today it's bringing a revised budget of approximately 3.23 million. So that really that number really jumped out at me."

Councillor Carol Davidson separately asked about fire-service operating pressures, saying, "and the other one I sort of caught my eye through, Mr. Chair, is 1.2 million over budget for fire and service, mainly because of um staffing levels, operation continuity. Um, I think last year there was maybe a half a million dollar overrun. I think if I recall correctly, it was regarding um dispatch. My question is that seems high as a as off. So what if anything can uh emergency management do to foresee these these overruns?"

The discussion centered on the scale of the increase and whether staffing-related overruns could be better anticipated in future budgets.

TENNIS AND PICKLEBALL: Councillors pressed for cost clarity on West Gormley proposal

Council discussed a proposed $500,000 allocation for early implementation of the tennis and pickleball strategy, including work related to a possible lease arrangement with Metrolinx for the West Gormley property.

Davidson questioned the cost range before proceeding, saying, "One is the Metrolinx pickleball. What is the estimated cost for that? Because I think like my suggestion when I brought it forward was that we utilize the space that's not being utilized at the moment, but it can't be at any cost. So, I was really thinking low, but are we talking about massive amounts of money for this thing? Like is it over 25,000, 30,000? Like where are we looking at the range?"

The discussion focused on whether the initial allocation was proportionate to the early-stage work and what future costs might come back to council.

RESERVES AND BUDGET STRATEGY: Councillors debated how much surplus should be retained

Councillor Michael Shiu asked whether more of the available surplus could be directed to development-charge reserves, saying, "I'm happy to see that around 10 million uh $10 million is being returned to reserve and reserve fund with about $5.2 million going back to DC reserve fund. Uh we understand the city receives some fundings from the provincial government, but the DC shortfall could have a significant impact over the next few years. So would it be possible to put even more of the surplus into the DC reserve fund to prepare for the years ahead? Is the $5.2 million the best we can do through Mr. Chair?"

Councillor David West emphasized that reserve decisions should avoid collecting more than necessary from taxpayers. He said, "it's also really important when we're doing a budget like this that we're not overcollecting above what we need. So for example with winter maintenance you know we don't want to collect more than we ultimately need for winter maintenance because that means that we're collecting more from the taxpayer."

West also said the city's tax-rate stabilization reserve had been rebuilding because it had not been relied on in recent years, calling that "prudent and wise fiscal management."

Motions

Passed: - Recommendations A, B and C related to the 2026 capital project financial status report and associated budget adjustments - $500,000 allocation for early implementation of the tennis and pickleball strategy, including consultant and legal work related to the West Gormley/Metrolinx proposal - Council direction related to Brody House Park design, as referenced during the meeting

Rejected/Deferred: - No rejected or deferred motions were identified in the meeting materials provided.

Attendees

Councillors identified in the discussion included:

• Deputy Mayor Godwin Chan
• Councillor Carol Davidson
• Councillor Michael Shiu
• Councillor Scott Thompson
• Councillor David West
• Councillor Karen Cilevitz

Other officials identified included:

• Gigi Lee, Director of Financial Services
• Darlene Johnson, City Manager
• Richmond Hill Fire Chief