Sept 22/04 Report
1:38 - 2:40pm

Attending:

• Members: DiIanni (chair), Jackson, Collins, Merulla, Ferguson
• Non-Members: Mitchell, Whitehead
• Staff: Managers Peace, Joanette, Graham, Kay, Stewart, Christensen and Priel. Ann Pekaruk, Larry Friday, and 8-10 other staff.
• Press: Spectator (Eric M.), CFMU (Maggie H.)
• Public: 2

Agenda: (no changes)
http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/Sept22/Agenda.pdf

8.1 Audit Report - Social Housing - Review of Accounts Payable and Related Processes on 'Yardi':
http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/Sept22/
CM04013%20-%20Social%20Housing%20-%20AP%
20and%20Yardi%20-%202003-06.pdf

Overview presented by Ann Pekaruk:

Discussion:

Ferguson: "Ann, of the three that are outstanding, if they're implemented.would they impact the financial position? In other words if we spend a buck, will we save two?" Pekaruk: ".We wouldn't be that far ahead but the controls would be there, .it would give less chance for an item cause a loss with the control there. Ferguson: "So our exposure is?" Pekaruk : "The risk (on our?) Exposure would be reduced for that potential to happen". Ferguson: "Do you have a price tag for the three?" Pekaruk: "I'm sorry I don't". DiIanni: "Is there anyone from social housing operating? Ah, Joe-Ann". (Priel) Priel: "(Vicky could you come and sit here?) I'm not sure we know what the three issues are, Ann perhaps you could comment on them and Vicky could answer. Ann: "On page 10 of the appendix of that report we have a 'partially agree'. That is a systems matter so I guess there would be some kind of systems reconfiguration in order to make a 'dummy vendor account'. I don't know, rather than the technical cost of doing that, what other staffing cost there'd be. Number 18, which is on page 13 that's the additional controls over inventory. Now that would involve some staffing because you would have to hire somebody to basically keep the stock and the other person to carry out the booking of the expenses relating to the inventory". DiIanni: "Does that help you Joe-Ann? Now is there a response?" Staff ('Nancy'): In regards to this stock items, it's really expense to begin with (a cell phone is heard in the chambers at this point. It looks to be Collins' ), so as soon as it's purchased it's expensed and the stock room is controlled to move it to the stock room to charge it to a specific project. So, to hire someone else to do that would only cost money. In regards to the 'dummy vendor' the issue is whether or not to set up a vendor for a one-time use. The processes we put in place basically safeguards us from just writing a cheque that's not valid. They are in place. We have addressed it". Ferguson: "What would the value of the inventory be at any given point in time?" Staff: "Somewhere between . $50 -75 thousand dollars". Ferguson: "So, negligible". Staff: "Yes". Ferguson: "Ok, so how many times would that turn over a 12 month period?" Staff: "Depends on the items. I think probably on average it may turn once". Ferguson: " What kind of items are we talking about?" Staff: "The main items are maintenance or janitorial items. So we carry things for the custodians in some of our high-rise apartments - light bulbs, some plumbing supplies, janitorial paper towels, cleaners, things like that". Ferguson: "Ann, does this not fall into the too much analysis leads to paralysis category?" . Pekaruk: "The reason that was brought forward was because I think the inventory does turn much more than one time a year. These are items though even collectively low dollar, they are highly susceptible to pilferage or misuse because they're commonly used anywhere. DiIanni (comments without turning over the chairing of the meeting to the vice-chair): "The issue that's been raised.the last sentence under recommendations: 'to prevent unauthorized processing of transactions from such accounts or to purge the vendor listing'. So is there a danger with what we've got of unauthorized processing or pilfering, and if there is, are you suggesting to clear it would be more expensive than the loss, or how would you respond to that?" Priel: "I think what we probably need to do on these two or three that are outstanding if we could maybe draft an email response back to the questions raised by Councillor Ferguson. I think we need to go back and check in terms of the exact amount of turnover there is with the stock - what is the exact value of the stock? And then what it would cost us, because it's not clear in if that's one person or half a person to do the maintenance of the inventory. If it's $75 -100 thousand dollars but we could do it with .3 of an FTE (full time equivalent) and it's $30 thousand dollars then maybe it is worth it. So I think maybe on that one we need to do a little analysis, so rather than us sitting here, like deer in the headlights, then maybe we just need to do a little bit more analysis". Ferguson : "That was my point, and the way this reads it's almost like the Staff are being unco-operative. I don't think that's the case. I think it's a case of let's put a price tag on it, and how much is possible - possible fall out from it". DiIanni : ".We'll take that as an undertaking then".

Motion to receive the report: Jackson/Collins CARRIED

8.2 Audit Report - Property Taxation: http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/Sept22/CM04015%20-
%20Property%20Taxation%20-%202003-04.pdf

Overview presented by Ann Pekaruk

Discussion:

Collins: "On the issue of supplementary taxes can I get an understanding of how that works and how it relates to the audit here? .how we incorporate supplementary taxes into budgets when they're established early in the year". Staff (Larry Friday): "Supplementary taxes are taxes that are omitted from the MPAC (Municipal Property Assessment Corporation - provincial body) that they've caught later on, or they're for improvements to property that have finished sometime during the year. So MPAC issues us a list of properties that they either missed on the original assessment that we received in December of the previous year or for properties that have had improvements.. There is a line in the budget process where we estimate how much we're going to get in supplementary taxes which becomes part of the budget revenues". Collins: "Does that include new houses as well? Growth to the system, does that include growth?" Staff: "Yes". Collins: "When we prepare our budgets for supplementary taxes and try to incorporate them, I would assume that it's kind of a 'guesstimate'. Obviously we'd try to ensure that we don't overestimate exactly how much revenue source we can expect to receive over and above the prior year levy. When do we check that.? Do we call MPAC in January? Historically and traditionally now we've had habit of finishing the budget, or setting the levy, late spring, so how in those time frames do we look at establishing supplementary taxes?" Staff: "It's basically based on history of what's happened previous. We have been on MPAC's case, if you will, to get us the information in a more timely basis. We have been working with the building department, and MPAC, to get the building department to get the information out to MPAC quicker so that MPAC can get it back to us. The last two supplementary runs we've had have been rather large, because MPAC is catching up, hopefully they will catch up.." Collins: "So from an internal budgeting point of view.we'd use a percentage - it'd be 1.5%, it's 2% - and then we use that as a sort of base, or a 'guesstimate', to incorporate into the budget? And I'm assuming that if it's over that amount that would be a surplus to our budgetary requirements for that calendar year?" Staff: "Pretty well, yes". Collins: "And has it been that case.or have we ever found ourselves in a deficit position ever, with supplementary taxes, where we've overestimated the amount we might expect to see.?" Staff : "To my knowledge we haven't been under. Last year we were over, and this year we are currently over already and we have two more supp. runs to come". Collins: "And last years amount.?" Staff: "I don't have that figure, but I can get it to you". Collins: "And this years, do we know where we are." Staff: "We're approximately a million dollars ($1M) over already. We've just gotten the second supp. run, which won't be as high as the first. we haven't run that through the system yet, and then we'll get a third supp. run in October. My estimate is that we'll be about two and a half million dollars ($2.5M) over budget". Collins: "To the good?" Staff: "To the good". Collins: "And I guess I raise that point only because if we're undershooting it to a great extent, it would certainly help us through the budget session. I mean, $2.5M, I don't think that's a full percentage on the levy, but it's certainly a significant amount, and if we could better co-ordinate with MPAC, or even, based on prior years establish maybe a higher supplementary tax level lets say for the 2005 budget it would certainly help us in our quest to find savings and additional revenues and not have to go out to the general public. So, . are we looking at, for the purposes of setting the 2005 levy, bumping that number up, with the understanding that we've had two years of 'supps' that are higher than what we anticipated, or are we just straight line and then hope for the best?" Staff: "We can consult with MPAC to see how current they are. I mean the danger is that they've done a great catch up, which is shown as a rather high surplus in that area for this year. So we don't want to come in with a budget that's unrealistic. So if we check with MPAC and see how up to date they are in getting these properties assessed on a timely basis then that should give us some comfort feeling whether to bump that up or leave it the same. On the other side of the equation we also have to worry about the number of appeals that get processed which is also a guessing game and if they come extraordinarily high then the 'supp' revenue has been used to offset that shortfall". Collins: "But I would assume .that once we go to the annual reassessment figures the discrepancy between the new figures and the old ones provided to the residents would be a lot less severe, . the gap between those two figure might be lower than what we've experienced in the past where we've had two or three year assessments, now going to the annual (time frame between assessments). Is that something we can expect to see in terms of stability in that reassessment system?" Staff: "We're sure hoping. There has been certain areas. in the last little while - Ancaster this year, Flamborough the year before - where the assessments have just skyrocketed. There was an article in the paper about Ancaster house prices being over ½ million dollars for a number of houses, which generally affects everybody in Ancaster. .(MPAC has started to smooth out these problems) Obviously Flamborough was a lot better this year than it was the previous year, but Ancaster and Dundas were high".

Mitchell : ".Got to add Glanbrook into that list.. My concern . , as you know there's a great rural outcry there about inequities that I know we're all trying to fix. Now on the tax bill, and I didn't see it in here - I haven't read this whole document with a fine tooth comb (and it's excellent that staff have prepared this and I believe we are going in a positive direction), but for the last few years on the rural tax bills, where area rating is involved, we'll have the tax bill sent out and then you'll have 'Glanbrook area rating' a positive number on the tax bill beside it. So you'll have $2700 for the tax bill and you'll have 'Glanbrook or Stoney Creek area rating'. and a plus of 200 or some odd dollars. So they think they're being surcharged for this amalgamation to the city, when in reality it's not that way. And, it stirs the pot badly ! And I've been told from the treasury department that you cannot use negatives on the tax bill, because it would look a whole lot more favourable if you taxed everybody the same, and you gave those areas a credit for the fact that they have volunteer firefighters and volunteers to line diamonds and all the reasons that we use area rating for. That is illegal - we cannot do that. But in someway we can't fueling the fire.that bothers everybody, because it looks like an addition. I've asked for that to be corrected. . I was hoping through this process it could be for the upcoming year. It has to be. ...Huge communication misunderstandings, and if we don't have the flexibility to correct that ourselves then let's prepare a request to the Province to be able to do that. .We don't need to look bad to that rural than we already are, and I'm living that through the firearms by-law right now . DiIanni : "Ok, I'll - can I remind folks though that this is an audit report and questions need to be focused on. That is a comment that is well worth pursuing, but quite apart from the report which is before us. But if there is a quick answer to that, please give it and then we'll get back to the audit". Staff: "There is a report that is going to come.. The tax bill right now has a number of different tax rates: police, social services, general, education, and then there's the area rate for each of the different municipalities. We could basically go down to one tax rate for each area.if that's what Council would like. Previous administration wanted us to put the tax bill out in a shopping list.where we took it even further and broke down the services. That report will come, and we'll give you your options at that time". . Mitchell : ".Maybe it can be a note inside the tax bill explaining that.".

Ferguson : "MPAC, are they admitting that 2, 3 years is the norm?" Staff: "As far as supplementary billing is concerned? Definitely one year. They do have authority to go back current year, plus prior year, plus prior year to that. So, basically some people do get three supplementary bills in a year". Ferguson: I mean if you move into a new house you don't get a bill for 3 years. Is that normal?" . Staff: They're trying to get that caught up so that the most that someone would get would be the current year plus the prior year". Ferguson: "I guess my point is, in budgeting, if we narrow for now at 3 years we're going to go to eighteen months. . MPAC isn't indicating that they know that they're behind and they're going to do a better job catching up, or are they saying what you have is what you're going to get?" Staff: "No, they're trying hard to move to try to make sure they have the information on the system current. They have their administrative problems obviously but they're trying. Every municipality in Ontario has the same problems that we do with them". . Ferguson: ".From a budgeting point of view, could another barometer not be the number of building permits issued in a year? If we issue a lot of permits in '02 then chances are that taxes are going to be up in '04?" Staff: "Yes, could be". .

Merulla: ".At Social Services the other day an issue came up in regards to a 'Joe Rinaldo slush fund'. Apparently there's some sort of account or fund available to tap into. Do we have any idea what this particular fund is? Staff: "I'm not sure what this fund is?" Merulla: "It's a working reserve fund, I believe". Peace: ".I think it would probably be better if I found the exact title.if you tell me what exactly we're looking at I'd be happy to get the information". Merulla: "No, that's what it was referred to as". DiIanni: "Well, it may have been referred to as that, but I'm sure it's not a personal slush fund for any members of staff". Merulla: "No, no - finance". DiIanni: So, if there's a working reserve fund of some sort, I'm sure we have reserve funds.." Merulla : "It was related to the renovations of the financial department's lounge and renovations and so on. Because I asked a question about where is all this money coming from.." DiIanni: "If it's Social Services let's ask the General Manager to make a comment on it". Merulla: "It wasn't Social Services. It just came up in the discussion and I'd been informed that finance was renovation again and building a lounge, and I asked where that money was coming from, and apparently that money was coming from this reserve fund. Over and above that there were additional expenditures that came from this reserve fund. No one on Council knows what this reserve fund is about. I know that Councillor Jackson was present at that meeting, so the issue was one that alerted a number of us, and we're just wondering how much money is exactly in that fund?" Peace: "I'm not aware of finance building a lounge, or anything of that sort. There are some renovations going on on the main floor to accommodate staff, and there is a change. But if that's what we're speaking of I'd be happy to take that as direction, and get the details - the facts, if I might - and notify Council of that - what's transpiring and where the money's coming from". . Priel : ".The money was actually for the Social Services move to 250 Main St. because we had to find a funding source and it was one-time money so, that was the suggestion - the one-time funding source from finance - the working reserve fund. It was in the report (about the move)". DiIanni : "So let's just get something that c., not that we need corroboration, but reminds us of that, just to get away from some of the uh, implications. Yah, we'll get the totals and everything, and the source and how the decision was made and what's happening so everybody knows. OK?"

Merulla: "(Going) back to supplementary taxes, about 6 months ago.(we) brought us the issue of the variance between the actual and those reported in the budgetary period. I know it was touched upon, and I believe there was a discrepancy of about $2M. Now $2M represents close to 1% tax increase or decrease, depending on how you look at it, overall in our global budget. I'm just wondering, why wouldn't we re-allocate that money to next years budget, .we're going to need it. I'm wondering why we would sit on that money rather than apply it to the budget?" Staff : "To sit on the supp. excess revenue money?" Merulla: "Yes". Staff: "Well, it'll all get taken into account when accounting does the year end to see where the overall position of the City is, and I'm sure if there's a surplus then Council can direct that surplus to the tax stabilization reserve or any other reserves". Merulla: "So could we officially do that, so that whatever that actual surplus is actually is applied to the deficit we're starting with in the next budget?" DiIanni: "Well I think that happens all the time". Merulla: "I don't believe it did last year". DiIanni: "Did it not happen last year?" Staff: "I'll defer that one to Rick Mailing (?) I guess". Rick : "Could Councillor Merulla please repeat what it was he asked, I couldn't hear back there?" Merulla : ".supplementary taxes, it's about $6M, and in our last year's budget they were reported only as $4M. Where did that $2M go, and why couldn't that $2M be applied to whatever deficit was starting off next year?" Rick : "That is an option. Throughout the year reports are brought forward. and they would outline the fact that supplementary taxes were expected to exceed the budgeted amount. There would some wording in there about the usages of that money, whether it be used to offset corporate deficits in other areas. But should Council direct that any surplus monies be rolled forward to the following year that a perfectly.option that Council could consider if they so choose". Merulla: "Wonderful. So I'll move that actually". DiIanni: "Let's wait until 'New Business'. We're dealing with this report, but at the appropriate time I'll take that motion". . Merulla : "I do have an issue with the salt. " DiIanni " "You can do that at the appropriate time also".

Motion: Jackson/Kelly "To approve the audited report on property taxation". CARRIED

8.3 Follow-up of Audit Report - Salary Payroll: http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/Sept22/CM04019%20-
%20Follow%20Up%202002-02%20-%20Salary%20Payroll.pdf

No discussion.

8.4 Audit Report - Construction Contract Management and Administration - Design and Construction:
http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/Sept22/CM04024%20-
%20Construction%20Contract%20-%20D&C%20-%202003-07.pdf

Discussion:

Collins : ".re policies and procedures as they relate to the deposits - the deposits are kept, I guess, to ensure that the work is carried out per the specifications and whatever RFP we issue for the work.? Staff (Gerry?): "That's correct. We have a hold-back in place on all our capital projects to ensure it's completed based on the contract, the amount, and any deficiencies generally there's a warranty period on the projects for one year. Collins : "Does staff keep track of the instances where we are required to use that deposit, or disagreements between the vendor and the municipality? .Statistics?" Staff : ".I'm not aware of any that are there, because we're holding the money we generally don't have a problem getting the work done. So, they'll get their payment. That's.the short of it. But I could double check to - if in fact we had to draw down on any of the bonding. There is in fact one project right now that we're in that area, but generally we don't have a problem". Collins : "One of the issues that I've run into is the whole issue of insurance, and when we contract out these projects to a contractor - to the industry, they then assume the responsibility for claims. And invariably.what happens is that when a resident files a claim with a company they're now dealing with the company's insurance provider. And the municipality is.excluded from the process. Is that how the current system works.?" Staff: " Yah, any claims we try to get the contractor to take care of them at source. We get involved if it's a continued complaint.or the appropriate action hasn't taken place.." Collins : " We would be paying for that, I'm assuming. For them to take on that liability it would be included in the cost of the contract, if in fact we excluded insurance or claims, and the City assumed - as the person who's paying for the project - we assumed the claims, would the cost of the projects go down.not putting that in a specification?" Staff : "I would think.in theory it should, but because of the magnitude of the companies that we deal with, and they have to carry insurance.my gut feel is it wouldn't be a savings. Collins : "I guess one of the problems I'm having is a lot of residents, when they're dealing with these companies, are experiencing some difficulty in claiming something where there's damage to property.vehicles.. It seems then that the company denies the claim and then the resident is left taking them to court.without the assistance of the municipality. I know that at times, Gerry's staff has been very co-operative in trying to pressure the company to deal with these in a straight forward manner, but I have an instance now, where I think we were holding back a deposit from a company, where they're just ignoring the residents, phone calls, and they've ignored our own phone calls from staff. So, I think that puts us in an awkward position...and I believe it's our responsibility to try and sort those out. And when we look at the policies and procedures, we're keeping these deposits and we're asking them to provide insurance and I'm not sure that system's working. And I don't know how we deal with them, and I know that Councillor Merulla and I are dealing with more and more of them now that we're dealing with the expressway. It's certainly going to be an issue tomorrow on the Expressway Implementation Committee meeting. But I've noticed this just for general contracts. DiIanni: "Can I suggest.we're not going to resolve that now.can I suggest that staff take that under advisement and come back to us with both status, and maybe some recommendation?" Staff: "We'll take that under advisement and bring back some of the vendor performances that are written into the contract as well". Collins: "Do we keep track, even though we're not involved, as a party in the claims.how many were resolved satisfactorily to the constituent or do we have a handle on how many were actually submitted to sub-contractors? Staff: "We do that now, and that was part of the audit process, to ensure that we are keeping those things on file, so that we're fully aware. So that process is in place now. Historically it hasn't been". Collins: ".I would ask that those numbers come back as part of the report".

Ferguson : ".through to Scott (Stewart, manager of Public Works), did you find this exercise beneficial?" Stewart: " I'll get Gerry to help me as well, as I try to weasel out of that (laughter). I came into this exercise just as I transferred over from.came in at the tail end. Ferguson : "Yes would work". (laughter) Stewart : "Well, you're seeing things come out of it now that you can implement change and see that everybody's comfortable with the process we have in place. So I think that's worthwhile. And this is a lot of work to go through, and to follow up on Councillor Collin's comments, it's now given us the tool to track the various vendors we have and try to do some things with performance guarantees. Shorter answer is yes, but I'll get Gerry to speak to it because he lived through it". Gerry : "Yes. (laughter, DiIanni says "we'll take that".) With the consolidation of design constructions that were within the City - we consolidated - and the audit was taken place, so it was perfect timing to have to do it". Ferguson : "Good answer".

Jackson: ".On page two of appendix a) is 'expanded work' is that where - that's one of those areas that has driven me nuts in the past where staff have come back after a contract's been let out, work has been done, but have had to come back and request more money of Council because of either additional works that needed to be done on site, or work costs that ran over. Is that that area? Is that what that means, cause I don't want to ask questions if that's not the area I'm referring to." Staff : "That is the area". Jackson: "So, basically.just quickly tell me then. The current situation it' requested that our design staff go on site before actually signing off on a tender, is how I read this. So, currently what do we do? . Currently we just take the lowest bid, we don't do any on site visits.? Explain to me the current, and what's prescribed". Staff : "In the past we would design a project (and do the surveys).. That project may not be tendered then for six to eight months, so the design staff wouldn't be going back out to check it out at that point in time. Right now, we're more current in doing that. We take the lowest tender providing it meets the requirements of the contract that we put out. So, again, it's just bettering a process for our capital projects. So, again, we open up a roadway and we anticipated that the sewer would be fine, and we find that's it's not, so that would be a change in scope. . Things like that will always happen. We try to mitigate it. We try to know what's going on, but because you can't see what's going on down there, that'll happen and generally that's the scope changes that we bring back requesting additional funding". Jackson : "So you see this as a more.a beneficial item in terms of doing more frequent, more recent, site visits than before construction work actually begins?" Staff : "Yes, that's correct".

Motion that the report be accepted (Ferguson/Kelly). CARRIED

8.5 Audit Report - Provincial Offences Act (POA) - Revenue and Cash Handling:
http://www.city.hamilton.on.ca/Clerk/agendas-minutes-reports/
Strategic-Planning-Budgets/2004/Sept22/
CM04025%20-%20POA%20-%20Revenue%20&%20Cash
%20Handling%20-%202004-01.pdf

Discussion:

Collins: ".in the addendum.#2 states that 'currently $32.1M is indicated in ICON (1988 computer program) as outstanding type 1 and type 3 fines more than 45 days old, . approximately ¼ of that total, some $8.2M, is unlikely to ever be collected as the fines are more than 8 years old'. Was that part of the right-offs under POA's (provincial offences act) that we passed earlier this year, or is that in addition to those fines.? Staff ('Kevin'): ".that does include what we've written off previously.." DiIanni: ".at the Police Services we authorized outstanding issues there in relation to false alarms and so on.. Do we just right-off.what's the process for trying to recoup the money?" Staff ('Wendy'): ".we have two external collection agencies that we've hired this year, previously we've had one. And we have an internal collection agency as well. . anything that's less than two years old we work ourselves, hoping that we're going to collect that money and not pay a fee to a collection agency. We also file with civil courts to hopefully secure collection of those for a twenty-year period. Staff (Kevin?): ".add to that.any significant amounts be earmarked, and we.try to separate those and go after them, and we're still in the process of determining.how we can still go after them." Collins : "From an accounting standpoint, why would our staff from the 1980's or 1990's not written this off sooner? I mean there must have been some rationale to keep these on the books at the time. And so, our reluctance to do that, during that time period.can we rationalize why we're doing it now in one lump sum rather than going through that exercise 5 or 10 years ago?" DiIanni : "It wasn't us, was it?" Staff (Vicky): "No. The Attorney General looked after provincial offenses up until Feb 6 th , 2000. And this is the first opportunity that we could determine that we wanted to do a write-off. And the collection department wasn't implemented until.2002 in the provincial offences office" DiIanni: "In fact, that was the reason for giving it to us.there was such a huge problem.well, there it was downloaded, but there were revenues as well, which was unusual. Usually they just download with costs, here there's an opportunity for revenue as well".

Ferguson: "Is there any other recourse.can we not renew their license plates, can we.anything that's not bigger than 120 days has a twenty percent chance of being collected. Staff : ".We do do that.. But you cannot add it to a tax bill - legislation would have to be changed provincially for that to happen. .We have a provincial collection committee, and that's something that they're pursuing.." Ferguson: ".against their will?" (amusment)

Kelly: ".nice to see that we inherited the same kind of mess that we inherited when they gave us hydro too.. I understand that when this was downloaded there were revenues associated with it, but we mustn't forget that they were clawed back against our 'CR' (?) funds as well, so it ended up being a zero - actually we ended up loosing money because of the costs we incurred, because we also had to, not just put police.do the administration on it as well. Sadly though, we've inherited this, and I appreciate staff's work on this, . move the report at the appropriate time".

Motion to receive report (Kelly/Ferguson) CARRIED

Motions:

Merulla: "When dealing with supplementary that that surplus be allocated for the subsequent budget proceedings to be applied to the overall budget proceedings" ( DiIanni suggests having the staff do a report on the implications of doing that first. Merulla agrees). Ferguson also wants a projection on write-downs and appeals included.

DiIanni: (not stepping down from the Chair) "I have an item as well, and I hope that somebody might craft a motion as a result of this". He partially attended the meeting of the HUB City Mayors where the federal contributions from the gas tax were discussed. They know it's going to be 5 cents, and it will start before the end of this year, but haven't decided is the formula to allocate the money to communities. From that meeting, subject to the approval of the Big City Mayors' Caucus, is a request for 2.5 cents immediately and the balance at the end of 3 years rather than 5, "which would increase the contributions to cities considerably.suits me personally, I think it should suit us". Also interesting was the speech by McGuinty, in which he said he's permitting the review of the Toronto Act - "the legislation that created the City of Toronto and gives it it's legislative authority. And we have the Hamilton Act.."Reviewing the Act is with a view to "devolve some powers to the city so that they can govern themselves in ways that they now need the Provincial government's support and permission to do some things - around revenue generation and legislative initiatives and so on". . (The Premier) "indicated in fact, that if other communities are interested.in asking for some additional authorities under the legislation that his government would be open to that". Suggests that staff develop a report that would guide Council to choose areas that would advantage Hamilton in terms of governance. ".worthwhile exercise to go through." Other communities will also be doing this. Kelly: ".at a conference in Calgary.where they actually defeated a motion that would give municipalities more taxing powers". Rationale: Would loose Fed/Prov. money to do this. Either taxing powers without this, or upper level government transfers. Kelly didn't want to go there. "and I don't think that's where we want to go on this as well. "If we can craft this in the discussions, so that this is actually going to be a partnership, where that revenue sharing the provincial and the federal governments have now committed to, is still going to be ongoing, I think this is something we need to explore. Although, we have to be careful what we wish for right now. This has happened, actually to the benefit of an awful lot of communities south of the border of course. Housing and Urban Development and the Federal government in the States has given certain municipalities other revenue generating ideas down there - special surtaxes, some consumption taxes in some jurisdictions.in Cleveland, or perhaps levying a special sales in some areas as long as it's dedicated to special projects or reserves. buy in.referendum.. Careful not to send the message that we don't need the revenue sharing as well.." Ferguson: "I would second that, but with a caution: be careful what you ask for you just might get it". DiIanni: "Well, we haven't asked for anything yet.groundwork.review legislation.changes.." Motion CARRIED.

Collins : "We received a letter from the Port Authority (not in the agenda).requesting (4?) Council representatives to form a joint board to look at opportunities in the harbour areas (Pier 8, Fishermans Pier) for, I'm assuming, development and revenue purposes.. Comply.? Agree with the board composition.? DiIanni : ".Direct staff to prepare report.begin discussions that would fit in with our overall plans around some activity in the port". Collins, Merulla and Kelly indicate an interest in being on the board. "We'll have a lottery of sorts".

Merulla: Asks about a (previously discussed) $2M unknown expenditure around "salt and winter control". ".Rinaldo indicated that he would be reporting back to us today.we received an email (stating that)" Glen Peace (General Manger): "Our internal auditor will be making a report October 20 th .on that specific issue".

Ferguson : Asks Ann Petaruk "what she has in her cross hairs this year.any plans?" DiIanni : "I think that part of the process was that we would direct the work plan for this year, and we need to turn our minds to that". Collins: "That's exactly what I was going to ask, when do we get some." DiIanni : "Up to us." Collins : ".put on the next agenda?" DiIanni : "Yup, we'll do that".

Meeting adjourned.