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HomeMy WebLinkAboutFin & Corp Svcs - 2010-05-17 SFINANCE AND CORPORATE SERVICES COMMITTEE The Finance and Corporate Services Committee met this date commencing at 4:01 p. m. Present: Councillor B. Vrbanovic -Chair Mayor C. Zehr and Councillors J. Smola, G. Lorentz, J. Gazzola, K. Galloway and C. Weylie. Staff: C. Ladd, Chief Administrative Officer T. Speck, General Manager, Corporate Services P. Houston, General Manager, Community Services L. Gordon, Acting General Manager, Financial Services J. Willmer, Interim General Manager, Development & Technical Services R. Regier, Executive Director, Economic Development S. Adams, Director, Community & Corporate Planning G. Murphy, Director of Engineering S. Ross, Assistant City Solicitor R. LeBrun, Manager, Financial Planning & Reporting B. Korah, Manager, Development Engineering C. Goodeve, Committee Administrator DTS-10-100 - STORMWATER MANAGEMENT UTILITY AND RATE IMPLEMENTATION The Committee considered Development and Technical Services Department report DTS-10- 100, dated May 12, 2010 which is an addendum to Report DTS-10-094 providing additional information related to inquiries and concerns raised at the May 10, 2010 Finance and Corporate Services Committee meeting regarding the proposed stormwater management (SWM) rate structure and implementation plan. Mr. G. Murphy presented the report, addressing questions and concerns regarding the SWM rate program in relation to the following three key topics: Rate Structure and Methodology; stormwater Rate Credit Policy; and, stormwater Program - 10 Year Capital and Operating Forecast. He advised that a rate-based approach provides dedicated funding for the stormwater system, similar to the water, sanitary and gas utility enterprise models which the City already has in place. He stated that the benefit of this approach is that programming can be effectively planned and delivered through the sustaining influence of a rate base. Similar to other City-owned utilities, the rates would be reviewed, scrutinized and approved by Council during the annual budget process. Mr. Gus Rungis, Senior Water Resources Engineer, Grand River Conservation Authority (GRCA) gave a presentation reviewing the GRCA's role in relation to stormwater management, noting that proper maintenance and operation of the SWM system is important to the environment of the Grand River and its tributaries. He stated that the GRCA was a member of the stormwater Advisory Committee, and agrees with the implementation of the proposed SWM rate structure. In addition, he spoke in support of providing incentives to property owners to encourage them to develop their own on-site SWM measures. In response to questions, Mr. Rungis advised that other municipalities outside of this watershed have shifted the costs for their SWM programs from the tax levy to a rate-based approach. He stated that SWM systems can be designed and built in conjunction with new development or rebuilt /retrofitted in existing development areas, noting that the GRCA has a commenting role in both situations. He added that the GRCA is supportive of developing sustainable programs, which contribute to responsible management of stormwater systems. He stated that if an incentive program were implemented for residential properties, some form of site inspection would be necessary to certify the measures installed by homeowners. Pastor James Brown, President, Kitchener-Waterloo Council of Churches, provided the Committee with an information package outlining the concerns /comments of the Council regarding the proposed SWM rate. He stated that places of worship do not belong in the same category as commercial or industrial for-profit properties. He advised that while they understand the rationale behind the need to retrofit Kitchener's 80-year-old SWM infrastructure, places of worship are not equipped financially to be treated as if they are tax- paying properties. He noted that even for the few large congregations, their expenses are commensurate with servicing large numbers of people and the majority of congregations do FINANCE AND CORPORATE SERVICES COMMITTEE MAY 17. 2010 - 91 - CITY OF KITCHENER 1. DTS-10-100 - STORMWATER MANAGEMENT UTILITY AND RATE IMPLEMENTATION (CONT'D1 not have the financial resources to accommodate the proposed SWM rate. Pr. Brown requested consideration of implementing a funding model where places of worship are charged 1 % or less of their annual budgets for SWM services; thereby allowing them to remain financially viable. Councillor J. Gazzola commented that if a congregation has approximately 1000 members and the SWM fee is $1,600. a year, this would equate to being less than $2. per member. Pr. Brown advised that many congregations have accumulated large deficits and their financial futures are uncertain, even without paying the proposed SWM fee. He added that congregations have become increasingly present in the community, supporting and offering services that benefit people of need across the City. He noted that any additional financial burdens placed on places of worship would divert funding away from these social programs. Pr. Brown stated that he would not be opposed to paying more as a residential property owner to offset a reduction in the SWM fee proposed for places of worship. Ms. Yvonne Fernandes stated that as an environmentalist she supports the SWM rate, but is concerned that most residents are not aware of this proposed change. She added that further consultation is warranted on this issue and suggested that the City hold public information sessions on the proposed SWM rate in the fall of 2010. She commented that residents might have a higher regard for local issues in the fall, given that the next Municipal Election is scheduled for October 25, 2010. Ms. Fernandes further stated that in instances where a family is a member of a church and sends their children to private school, this would result in that family paying the proposed SWM fee three times. She then questioned how the City would collect the proposed fee from those organizations that are unable to pay. In response to questions, Ms. Fernandes confirmed that she would be willing to pay more as a residential property owner to offset a reduction in the SWM fee for places of worship. Mr. Murphy advised that collection of the proposed fee would be in accordance with the City's standard billing procedures. He stated that stormwater management involves controlling the quantity and quality of runoff resulting from rainfall or snowmelt events. Maintaining existing facilities is a large part of the stormwater budget. He added that the transfer to this new funding model would help address the infrastructure deficit and ensure a sustainable level of service that allows for greater flexibility and adaptability to address regulatory changes, climate change impacts, etc. He stated that the rate was calculated to support the proposed 10 Year Capital and Operating Forecast for stormwater programming, based on attaining a sustainable level of service that meets environmental regulations. Councillor B. Vrbanovic called forward Mr. Gunther Forth, who registered to address the Committee as a delegation; however, Mr. Forth was not in attendance at this time. Regional Councillor Jean Haalboom advised that as a member of the GRCA Board of Directors, she is aware of the complexities involved with SWM and the need to educate the public on this issue. She stated that it is necessary to examine various methods of reducing the amount of impervious surfaces through encouraging increased landscaping and vegetation. She spoke in support of providing incentives and education to residents, suggesting that the City should delay implementing the SWM rate until more people have been made aware of this issue. In response to questions, she noted that she was not addressing the Committee on behalf of Regional Council and commented on the need for buy-in from the public prior to moving forward with this initiative. Mr. B. McColl addressed the Committee in support of implementing an incentive program for residents who install measures to reduce their impact on the City's SWM infrastructure, such as, large cisterns. He spoke to there being only three categories for residential properties, noting that his 1700 square-foot bungalow would fall under the large category, with properties that have significantly greater amounts of impermeable surfaces. He suggested that a fourth category be developed to account for these "extra large" residential properties. In addition, he proposed that the City should introduce a phased approach to lessen the impact of the SWM rate. He further suggested that the installation of large cisterns should be mandated for the new development in the Doon South Area. He expressed an opinion that this could eliminate the future possibility of Waterloo Region having to obtain its water supply from Lake Erie. FINANCE AND CORPORATE SERVICES COMMITTEE MAY 17. 2010 - 92 - CITY OF KITCHENER 1. DTS-10-100 - STORMWATER MANAGEMENT UTILITY AND RATE IMPLEMENTATION (CONT'D) In response to questions, Mr. McColl commented that while he would prefer if major capital projects, such as the Victoria Park Lake Remediation, could go forward as planned; he did not foresee a harm in delaying it for a year to ease the impact of the SWM rate. Councillor G. Lorentz spoke in support of the proposal to create a fourth category for residential properties. He commented that if a homeowner were to install a cistern, it would fill during a large storm event and eventually overflow; thereby, impacting the City's SWM facilities. In response to questions regarding the implementation of an incentive program, Mr. Murphy advised that options have been put forward for a credit program for the non-residential sector where typically there is more of a benefit resulting from the installation of larger SWM facilities on-site. He added that the residential sector would be more challenging to administer given the volume of residential properties in the City. He advised that in comparison, credit policies for stormwater rates are in the early stages of development. Like water and wastewater, incentive programs should target the critical property owners first (i.e. large industries, shopping malls, colleges, schools, places of worship, etc.) before addressing the individual single-family homeowners (e.g., credits for rain barrels, rain gardens, etc.). He stated that for the numerous though smaller impervious footprints of residential properties, experience has shown that a bigger overall impact can be achieved through public education on good stormwater management practices than through a credit program for individual homeowners. Mr. Kevin Mullan, Vice-President, Conestoga College, circulated correspondence, dated May 17, 2010, outlining the College's opposition to the proposed SWM user rate model. He advised that the College was a member of the stormwater Advisory Committee and recognizes the need for municipalities to invest in infrastructure renewal; however, it is their position that the proposed rate does not represent a fair or equitable approach to sharing SWM costs. He stated that colleges and universities pay a per capita tax for their properties as prescribed in the Municipal Act in lieu of property taxes, which are reimbursed by the Province. He added that this tax is intended to fund costs associated with services provided to these institutions by municipalities; and therefore it can be inferred that these institutions are already paying their share of the municipality's costs for SWM services. In addition, Mr. Mullan stated that Conestoga College already fully manages stormwater on- site. He advised that significant capital investments were made to develop a system that includes having SWM ponds that allow all on-site stormwater to be absorbed into the ground as would occur if the impermeable surfaces were not present. He noted that if a system is not in place to fully credit owners who manage stormwater on their properties, these owners would be paying for both their own SWM developments, as well as for others who have not made such improvements. Mr. Murphy advised that at present the credit options for the non-residential sector have a maximum additive credit capacity of 50%, and acknowledged that there may be special circumstances where additional credits would need to be provided. Mr. Bob Sharpe, Victoria Park Lake Working Group, addressed the Committee in support of implementing the proposed SWM rate. He spoke to the importance of having the Victoria Park Lake Remediation project move forward and thanked staff for their work thus far on this issue. He stated that the Working Group looked at the possibility of staging the Victoria Park Lake project and found that it would not be feasible to delay any aspect of it. He noted that both residents and Council identified this project as a priority. In response to questions, Mr. Sharpe acknowledged that the Victoria Park Lake Remediation project was originally set in the Capital Forecast for 2019 and now has a completion date of 2015. He reiterated that given the interconnectivity of its various components, he would not recommend delaying any stage of the Victoria Park Lake project. Following further discussion, members requested that staff report back to the June 7, 2010 Finance and Corporate Services Committee meeting with information on the following issues: FINANCE AND CORPORATE SERVICES COMMITTEE MAY 17. 2010 - 93 - CITY OF KITCHENER 1. DTS-10-100 - STORMWATER MANAGEMENT UTILITY AND RATE IMPLEMENTATION (CONT'D) • That through the Association of Municipalities of Ontario (AMO) an appeal be made to the Government of Ontario to address the discrepancy between the Municipal Act and the Education Act regarding the City's authority to apply the proposed SWM rate to local school boards. Pending the resolution of this matter, an exemption will not be afforded to the school boards; however, payment of the SWM rate by the boards would not be expected until 2012; • That places of worship and charities be provided an indefinite grant of 100%, linked to their implementation of SWM education programs and where feasible the installation of on-site SWM facilities; • That consideration be given to the creation of a fourth category for residential properties to take into account those with larger amounts of impermeable surfaces; • That staff examine the feasibility of measuring all non-residential properties to provide an exact accounting on the amount of impervious area for this property type; • That a credit system be put in place for non-residential properties for 2012 and be retroactive to January 1, 2011 when the SWM rate is anticipated to come into effect; • That staff investigate the opportunities for a residential credit system to be put in place for 2013; • That for circumstances similar to those of Conestoga College, where significant capital investments have been made to fully maintain an on-site SWM system that does not feed into the City's infrastructure, staff investigate the possibility of providing a credit greater then the proposed 50%; • That staff examine the impact of reducing the recommended level of SWM funding from $13M annually to $10M annually on both stormwater activities, capital projects as well as the proposed SWM rates; and, • That staff consider a phased implementation over two or three years for both the increase in funding and the switch from the tax levy to a user fee. 2. ADJOURNMENT On motion, the meeting adjourned at 6.51 p. m. C. Goodeve Committee Administrator