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02 - June 24, 2022 Budget Committee Agenda PackagecallUmmoii m� ,ailgr ,. Progressive, by Nature Corporation of the County of Elgin BUDGET COMMITTEE AGENDA For Friday, June 24, 2022 3:30 p.m. Council Chambers/Webex 1St Meeting Called to Order 2nd Approval of the Agenda 3rd Adoption of Minutes — January 12, 2022 4tn Disclosure of Pecuniary Interest 5tn Delegations 6tn Briefings 6.1 SCOR Short Line Rail Support — General Manager of Engineering, Planning & Enterprise/Deputy CAO Other Business 7tn $tn Correspondence 9tn Date of Next Meeting — July 12, 2022 10tn Adjournment VIRTUAL MEETING: IN -PERSON PARTICIPATION RESTRICTED NOTE FOR MEMBERS OF THE PUBLIC: Please click the link below to watch the Council Meeting: Accessible formats available upon request. Council Budget Committee Meeting Minutes Elgin County Administration Building Webex January 12, 2022 at 1.00 P.M. ATTENDEES: Warden Mary French, Chair Deputy Warden Tom Marks Councillor Ed Ketchabaw Councillor Dominique Giguere Julie Gonyou, Chief Administrative Officer Brian Lima, General Manager of Engineering, Planning, & Enterprise/Deputy CAO Jennifer Ford, Manager of Financial Services/Deputy Treasurer Katherine Thompson, Manager of Administrative Services/Deputy Clerk Lisa Czupryna, Senior Financial Analyst Jenna Fentie, Legislative Services Coordinator 1. CALL TO ORDER The Council Budget Committee met this 12t" day of January, 2022 at 1.00 p.m. virtually via WebEx. 2. APPROVAL OF THE AGENDA Moved by: Councillor Ketchabaw Seconded by: Deputy Warden Marks RESOLVED THAT the agenda be approved as presented. Recorded Vote YES NO ABSTAIN Deputy Warden Marks X Councillor Gi uere X Councillor Ketchabaw X Warden Mary French X TOTAL 4 0 0 Motion Carried. 3. APPROVAL OF THE MINUTES Moved by: Councillor Giguere Seconded by: Councillor Ketchabaw RESOLVED THAT the minutes of the meeting held on December 9, 2021 be approved. Recorded Vote YES NO ABSTAIN Deputy Warden Marks X Councillor Gi uere X Councillor Ketchabaw X Warden Mary French X TOTAL 4 0 0 - Motion Carried. 4. DISCLOSURE OF PECUNIARY INTEREST None. 5. DELEGATIONS None. 6. BRIEFINGS AND REPORTS 6.1 Presentation — Manager of Financial Services/Deputy Treasurer The Manager of Financial Services/Deputy Treasurer provided a presentation that outlines the additional information requested from the Budget Committee at its previous meeting. Moved by: Councillor Giguere Seconded by: Councillor Ketchabaw RESOLVED THAT the Budget Committee recommend for Council's consideration the 2022 budget as presented; and THAT the recommended Tax Rate increase of 1.68% (3.85% increase on the Levy) be forwarded to Council for their consideration; and THAT the Budget Committee recommend that the 2023 to 2031 budget with Option #1 be presented to Council for their consideration in principle; and THAT the Landfill rate be accepted in principle and be amended as per regulation 95-17 once updated for 2022. Recorded Vote YES NO ABSTAIN Deputy Warden Marks X Councillor Gi uere X Councillor Ketchabaw X Warden Mary French X TOTAL 4 0 0 - Motion Carried. 7. OTHER BUSINESS The Committee provided feedback to staff regarding the format of the budget presentation to County Council for their Special Meeting on February 1, 2022. 8. CORRESPONDENCE 9. DATE OF NEXT MEETING The next meeting will be held on February 1, 2022 at 1.00 p.m. as a Special Budget Meeting of County Council. 10. ADJOURNMENT Moved by: Deputy Warden Marks Seconded by: Councillor Ketchabaw RESOLVED THAT we do now adjourn at 2.00 p.m. Recorded Vote YES NO ABSTAIN Deputy Warden Marks X Councillor Gi uere X Councillor Ketchabaw X Warden Mary French X TOTAL 4 0 0 Motion Carried. Julie Gonyou, Mary French Chief Administrative Officer. Chair. ,a�ri �ru��7�Y1(11�1Ji Prog.rossive by Nature RECOMMENDATIONS: REPORT TO BUDGET COMMITTEE FROM: Julie Gonyou, Chief Administrative Officer Brian Lima, General Manager, Engineering, Planning & Enterprise / Deputy CAO Jennifer Ford, Director of Financial Services DATE: June 22, 2022 SUBJECT: SCOR Short Line Rail THAT the staff report "SCOR Short Line Rail", dated June 22, 2022, be received and filed; and THAT the Budget Committee provide direction with respect to next steps associated with South Central Ontario Region Economic Development Corporation's request for a letter of support and funding (up to $150,000 over a three (3) year period) for presentation to Elgin County Council at its meeting on June 28t", 2022. RECOMMENDATION(s) (Next step — for Council's consideration): Note: Staff prepared the following proposed draft recommendation(s) for the Budget Committee's consideration. The recommendations are designed to be adjusted according to the Budget Committee's direction following discussion on the topic and, once finalized, will be included in the Warden's walk-on report to Elgin County Council on June 28t", 2022. WHEREAS at its meeting on May 24t", 2022, Elgin County Council directed staff to prepare a follow-up report for presentation to the Budget Committee regarding South Central Ontario Region Economic Development Corporation's (SCOR EDC) request for funding (up to $150,000 over a three (3) year period) and including an analysis of County infrastructure; and WHEREAS on May 25t", 2022, the Warden sent a letter of support, in principle, to SCOR EDC for the short line rail project to revitalize the Cayuga Subdivision line, as directed by County Council, and WHEREAS following receipt of the letter sent to SCOR EDC on behalf of Elgin County Council, SCOR EDC requested that the Budget Committee, and by extension, Elgin County Council expedite its consideration of SCOR's request for funding in the amount of up to $150,000 (over a three (3) year period) to inform its application to the National Trade Corridors Fund (NTCF) due on June 30t", 2022, and WHEREAS on June 24t", 2022, the Budget Committee considered the request for funding from SCOR EDC along with a staff report including background information and details of Crossing Images / Crossing Costs provided to the County by SCOR EDC; and THEREFORE, BE IT RESOLVED... .f...l...l ,.f... the report presented to the Budget Cornr ittee be arnended t inc1ude Cornrnitta.;e disca ussi on and direa�1lon and presa.,unfa.;d by the Ilh/arden to f 4,jin County Counc, l cat its on June 2811", 2022; and .f..l 1, .f... the Cornrn1 tted:°x direct -34ca° to 3�a.udxk a legal opinion ..ror.n E4.1in County. 1...egal Sa.;nlic,a:x°,3� uAlith re,3�pe(,1 to the funding request frorn SCOR f /: C to ensure c,ornphance with the Ontano Murna:�ipaw.:lAa1, 2001 for review82022; and .f..l l .f... the Cornrnittee reca ornrnen s that f 4.1in Co:. my (,,o unc, l auth0l'121 x the 01aw: r len to send a revised letter of suppoil as prescribed by the I117 CF a w::l:phcaw::tion guidelines to South Central Ontano Region f c�onornic �axd�el� `�r��ent l�notporatl /�.. l l �,� on (SCOR ED(,), and to aornrnlf to funding the proposed Cayuga Subdivision Short Rail l�"aevi aw��ll f...i�� e a � a 2law::flon 1"roja.; a f fir up to $1 50,000 (over a three (3) year p� noc), sul:�ject f( Ili f funding approval, using the Growth Ra,*ssaw*srW/e; and ��l y h�::f.Jle��fl..lf lf�, f.11,.f...f:ul�n�.��le� f l�l�n be:, required f� �°��d�°�rla.�� f l�w�l��� l�n��.����f. "ounc�ll wit h regulaw::rpn,)hress reports regarding this�aaw::��f proja*c' , no law*�,3 3� than on aw: quarterly basis, THAT the Committee recommend that Elgin County Council decline to provide funding in support of the proposed Cayuga Subdivision Short Rail 1....ine Revitalization Project of up to $150,000 (over a three (3) year period) as requested by SCOR EDC, PURPOSE: South Central Ontario Region Economic Development Corporation (SCOR EDC) has requested that the County of Elgin provide a letter of support and a financial contribution of up to $150,000 (over a three (3) year period) to support an application for funding under the National Trade Corridors Fund (NTCF) to upgrade infrastructure of the Cayuga Subdivision Short Line Rail (SLR) serving Oxford, Elgin and Norfolk Counties. NTCF program provides up to a maximum of 50% of eligible project costs, therefore SCOR EDC is seeking funding from regional partners including the Counties of Oxford, Norfolk and Elgin to leverage the project. The purpose of this report is to provide additional information to the Budget Committee and seek direction with respect to the provision of funding of up to $150,000 (over a three (3) year period) in support of SLR within the 2022-2024 budgets. At its meeting on May 24t", 2022, County Council received a presentation from the SCOR EDC along with a request for funding and a letter of support. The following motion was passed by Elgin County Council on May 24t" 2022- RESOLVED THAT the Warden be directed to send a letter of support in principle to South Central Ontario Region Economic Development Corporation (SCOR EDC) for the short line rail project to revitalize the Cayuga Subdivision line, and THAT staff be directed to prepare a follow-up report for presentation to the Budget Committee regarding SCOR's request and including an analysis of County infrastructure, and THAT the Budget Committee, following its review of the report, prepare recommendations for County Council's consideration. Moved by: Councillor Purcell Seconded by: Councillor Ketchabaw SUPPLEMENTARY MATERIALS: Appendix I — SCOR EDC Presentation to Elgin County Council — May 24t", 2022 Appendix 11 — Letter: Warden French's response to SCOR EDC, as directed by County Council on May 24t" 2022 Appendix III — Crossing Images / Crossing Costs (provided by SCOR EDC) BACKGROUND: An overview of the CN Cayuga Subdivision Short Line Rail (SLR) project, as presented by SCOR EDC to Elgin County Council is attached as Appendix I. In January 2022, a rail operator (GIO Rail) reinstated SLR service for freight goods on the CN Cayuga Subdivision from St. Thomas to Tillsonburg (Phase 1). A number of required rail infrastructure upgrades (bridge repairs, at grade rail crossings, etc.) are required over the next three (3) years to ensure it is maintained in a good state of repair. GIO Rail advises that it plans to invest approximately 43% of the required funding to undertake the SLR upgrades. SLR infrastructure investment funding support is also being sought through the National Trade Corridor Fund and potential contributions from the province, private investment along the rail line, and benefitting municipalities. positive economic, social and environmental impacts of SLR are substantial _.._ were relayed to Elgin County Council as part of SCOR EDC's presentation to Council on May 24t", 2022. At the time of authoring this report, Oxford County Council had not yet made a decision regarding SCOR EDC's request for $150,000 over a three-year period ($50,000 per year x three (3) years). TECHNICAL ASSESSMENT: At the request of the County, SCOR EDC confirmed that a third -party condition assessment of all at grade rail crossings on County and local roads within Elgin County had not been completed. Instead, project estimates were prepared by GIO Rail Inc. based on similar grade upgrades. GIO Rail Inc. confirmed that they have a 10-year lease agreement with CN to operate along the track. Track upgrades are guided by the Transportation Canada Grade Crossing Standards can be found here: /%k .. e ii gd„a e /e,if u%u all t a,ii`�s.,p2 l�`e��n11„��If Il,/,gI ad e (II 0S°� 1111`��¢:�°'��. SCOR EDC confirmed that, as part of the project preparation, an inventory of track crossings with accompanying images of the current state of the crossings has been developed. Each crossing was reviewed and assigned an approximate cost based on required upgrades (refer to Appendix 3). FINANCIAL IMPLICATIONS: Should SCOR EDC be successful in its application for funding through the National Trade Corridor Fund (NTCF), it is understood that SCOR EDC and the current SLR operator (GIO Rail) will pursue additional funding assistance (grants) from the province and other benefitting counties (including Elgin, Oxford and Norfolk Counties) to support infrastructure investments to the CN Cayuga Subdivision Line. The following was provided to County staff from SCOR EDC's Executive Director: The funding is a 50% matching funding. GIO rail will take on the bulk of the 50% of the partners end but we need to demonstrate business and municipal buy in both in terms of Letter of Support and cash value. Business partners will be contributing to the project and we will be asking the Counties (Elgin, Oxford and Norfolk) for a contribution as well. We would like to present to Elgin Council to ask for a Letter of Support and a contribution of up to $150,000 (over a three (3) year period) to commit to the project. This project has been brought forward mid -year and was not previously identified in the 2022 Budget. Funding for this project is proposed to be sourced from the Growth Reserve, a stabilization reserve established by Council to be utilized for future capital expansion. The 2022-year end projected balance of the Growth Reserve is $588,000. LEGAL CONSIDERATIONS: Caution must be exercised to ensure compliance with Section 106 of the Ontario Municipal Act, 2001 which is an "anti-bonusing" provision of broad application. By its terms, the provision supports a prohibition on municipalities directly or indirectly assisting any manufacturing, industrial, or commercial enterprise through "bonusing". The scope of prohibited "bonusing" extends to the giving or lending of any municipal property, including money, guaranteeing borrowing, leasing or selling any municipal property, or giving a total or partial exemption from any levy, charge, or fee. It is recommended that a legal opinion be sought from Elgin County's Legal Services team to ensure compliance with the Ontario Municipal Act, 2001. ALIGNMENT WITH STRATEGIC PRIORITIES: Serving Elgin ® Ensuring alignment of current programs and services with community need. ® Exploring different ways of addressing community need. ® Engaging with our community and other stakeholders. Growing Elgin ® Planning for and facilitating commercial, industrial, residential, and agricultural growth ❑ Fostering a healthy environment. ❑ Enhancing quality of place. CONVERSATION STARTERS: Investing in Elgin ❑ Ensuring we have the necessary tools, resources, and infrastructure to deliver programs and services now and in the future. ❑ Delivering mandated programs and services efficiently and effectively. The following list of "conversation starters" is intended to address a number of questions that have been asked about this project that were not addressed as part of SCOR EDC's presentation to Elgin County Council. Topic Questions Notes/Comments Project Management / Is 100% of the "ask" for rail line $20,000 total (one-time) Overhead upgrades? from all partner contributions is earmarked to offset SCOR Administration / Project Management costs. Project Costs Should project costs exceed SCOR indicated that budgetary values, who pays the contribution towards difference? project cost exceedance may potentially be sought from partners in the future (as a last resort). Reimbursement of What if the project comes in Unspent funds will be Unused Funds under budget? returned within the 3- year period if rail operations cease. Revenue Sharing Is there an opportunity to SCOR indicated that recoup investment from future they had not revenue? contemplated this. Administration of Who is administering the funds? Oxford County will act as Funds the "banker" to administer financial transactions on behalf of SCOR for this project. Agreements Has NTCF detailed partnership Preliminary discussions requirements between GIO and have been held. It is SCOR? assumed that there would be a future funding agreement(s) that will detail partnership requirements. Project Management Who is leading the project? SCOR indicated that the Who will be preparing and project would be led, administering the RFP and an further stated pertaining to required rail that an RFP for the rail upgrades? line improvements would be administered and awarded by SCOR. Cost Estimates & When were project estimates Project cost estimates Price Escalation completed and does it have were developed within regard for price escalation? the last 6 months and does not account for rice escalation. Metrics of Success How will SCOR measure SCOR indicated that success? they will monitor the project to evaluate whether the investment was worthwhile through metrics associated with increase in rail usage, value per car, increased load capacity, development of lands along the rail, business retention along the line, volume of goods, etc. Precedent Setting? Does the provision of funding While some similarities for this project set a precedent? may be drawn to the Elgincentives program, several differences exist — notably: extent of funding, absence of agreement and formalized process for administering the funding, evaluation criteria, etc. Due Diligence & Risk How do we ensure Elgin County It is recommended that a is compliant with the Municipal legal review be Act, and limit risk exposure? undertaken by the County Solicitor. Elgin County will need to enter into future agreements which will have to be carefully vetted to limit exposure to risk. Ownership Who owns the rail line after the CN Rail will ultimately improvements are completed? retain full ownership of the line. Private Investment Have abutting property owners SCOR indicated that or businesses fronting the rail seven (7) local contributed to project costs? businesses have provided a letter of support and have made voluntary contributions in the amount of $20,000 earmarked solely for project costs. LOCAL MUNICIPAL PARTNER IMPACT: Local Municipal Partners will be informed of project progress, when appropriate. COMMUNICATION REQUIREMENTS: Follow up with Elgin County Council is required and a walk-on report will be provided to County Council at its meeting on June 28, 2022. CONCLUSION: This report serves as a summary of information received to date regarding the SLR program and seeks direction from the Committee with respect to SCOR EDC's funding request in the amount of up to $150,000 (over a three (3) year period). All of which is Respectfully Submitted Julie Gonyou Chief Administrative Officer Brian Lima General Manager, Engineering, Planning & Enterprise / Deputy CAO Jennifer Ford Director of Financial Services O U 3 ('.roxxinR 11 Street fV am ra O11I—t Rd(C., ty Rd 74) Road C)wners'hiyr fter{. Infra rtructuare Surfaci n5d Electronic. Gro^.:iny ReplacenreM +Rail Seal Total Go^.t. iinrcalline vearl earl ear3 . .... .,..... ... ...... ..... ....... ....... 215.... .....,.... Y Y 15000 140000 60000 Year2 6 6 Pen M1ale Rd gn tral El gin (%) 0 N/A 3 Sp-gvater Rd, (El gin C. nty Rd Rogers S1,Rtl, my rd, 53) lJ— St. N.(County Rd 73) -en 35) Ell,, M3lahide Elgin Elgin (F) 1 40, 000 N 0 N/A(C. (F) (R) tla Rtl. 9 Spein gfi dd Rd (County Rd 40) Walker Rtl MalaM1itle lgin Elgin MalaM1itle (F) (F) (F) 40, 000 (%) 0 N% 1 er Rd L-ne MalaM1itle (x) 0 N% 1 40, 000 ollege 3 Springer Hill Rtl. ullotl en Rd ,I,h,de Ely— Elgin (F) (%) 0 N% (F) rs Rd OayM1am Oayd— (F) 40,000 (x) 0 N% 1 ''Rd 19 Ea'yM1_Er Oayd— Oayd Oayh "m (F) 40, 000 (%) 0 N% 1 (F) 15,0. 140,000 60,000 215,000 Ytarl j3,1 12t 1",.11"gency $3,5]0,I50 Y�1lr, 9 I =:4f9etYh4 NO fir! Alison Warwick Chair, SCOR EDC 4 Elm Street Tillsonburg, ON N4G OC4 May 24, 2022 Re: National Trade Fund Corridor Application — Revitalization of the Cayuga Sub Division Line Dear Chair Warwick, On behalf of Elgin County Council, please accept this letter of support for South Central Ontario Region Economic Development Corporation's (SCOR EDC) application to the National Trade Corridor Fund for support to upgrade the infrastructure on the Cayuga Sub Division Line. This track runs through the Elgin municipalities of Bayham, Malahide, Aylmer, and Central Elgin, connecting them to St. Thomas, Oxford County, and Norfolk County and servicing a number of Elgin business along the line. As part of the 2020-2022 Elgin County Strategic Plan, Elgin County Council prioritized Growing Elgin which includes planning for and facilitating commercial, industrial, residential, and agricultural growth. Not only will investing in rail line infrastructure increase the environmental sustainability of transportation, it will also play a key role in attracting investment to this region. SCOR EDC's application to the National Trade Corridor Fund, if approved, will help ensure that our local businesses have the infrastructure they need to transport their goods in an efficient and sustainable way. 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