HomeMy WebLinkAboutFCS-11-036 - 5% Tax Supported Budget Reduction Options
REPORT TO:
S~a~'Re~port
finance and Corporate Services department
DATE OF MEETING:
SUBMITTED BY:
PREPARED BY:
WARD(S) INVOLVED:
DATE OF REPORT:
REPORT NO.:
SUBJECT:
RECOMMENDATION:
For discussion
BACKGROUND:
Finance and Corporate Services Committee
February 28, 2011
Dan Chapman, Deputy CAO
Ryan Hagey, Manager of Financial Planning
All
February 18, 2011
FCS-11-036
5% Tax Supported Budget Reduction Options
At a meeting on February 14, 2011, City Council resolved:
www.kitchenerca
That for budget deliberations, staff compile a list of potential items for reduction that would effect
a decrease ranging from 1 % up to 5% in the overall proposed tax levy increase of 1.94% for
2011 and outline the implications associated with each item listed for potential reduction.
The Finance and Corporate Services Committee meeting scheduled for February 28, 2011 will
be used to review the proposed reductions, as well as preview the additional issue papers
included in the March 1, 2011 agenda. No decisions will be made at this meeting, as it will be
used to clarify, question and understand budget items better in advance of the budget meeting
scheduled for March 1, 2011. Delegations may also be heard with respect to the budget
reduction scenarios.
REPORT:
As directed, the Corporate Leadership Team has prepared a listing of feasible tax-supported
budget reductions totalling up to 5.21 %. Attached to this report is a summary sheet outlining the
potential reductions followed by a detailed listing of each reduction and the potential
risks/impacts associated with each.
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Staff Re~p~r~
I~~rc~~nT~~ Finance and Corporate Services 1~eparfinent
ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:
Foundation: Efficient and Effective Government
Goal: Financial Management
Strategic Direction: Strive for competitive, rational and affordable taxation levels
FINANCIAL IMPLICATIONS:
www.kitchenerca
Financial implications for each potential reduction are provided in the attachment.
COMMUNITY ENGAGEMENT:
To the extent possible, staff have contacted stakeholders directly impacted by budget reduction
proposals to advise of the nature of the proposals and the details of the February 28 meeting.
This report was also posted to the City's budget page once complete along with final budget day
materials.
ACKNOWLEDGED BY: D. Chapman, Deputy CAO and City Treasurer (Finance and Corporate
Services)
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2011 Budget Reduction Tracker
1 Reduce CAO capital accounts (8,000) (8.000) (0.01 %) (0.01 %) (0.08) (0.08)
2 Remove additional support person for Council (60.000) (60,000) (0.06 %) (0.06 %) (0.57) (0.57)
3 Oktoberfest/Christmas Floats (15,000) (15,000) (0.02 %) (0.02 %) (0.14) (0.14)
4 Printshop Efficiencies (20;000) (20;000) (0.02 %) (0.02 %) (0.19) (0.19)
5 Market Reduction (8;500) (8,500) (0.01 %) (0.01 %) (0.08) (0.08)
Community Services
6 Communities in Bloom (7.000) (7.000) (0.01%) (0.01%) (0.07) (0.07)
7 Eliminate Recreation Program Grant (13,900) (13,900) (0.01%) (0.01%) (0.13) (0.13)
8 Close Community Centres over Christmas Holidays (20,000) (20,000) (0.02 %) (0.02 %) (0.19) (0.19)
9 Eliminate Movie Licences (6,000) (6,000) (0.01%) (0.01%) (0.06) (0.06)
10 Eliminate Rec. Grants to Neighbourhood Associations (15,045) (15,045) (0.02 %) (0.02%) (0.14) (0.14)
11 Summer Playgrounds -close 4 programs (20,000) (20,000) (0.02 %) (0.02 %) (0.19) (0.19)
12 Reduce Newsletter Printing (7,000) (7,000) (0.01%) (0.01%) (0.07) (0.07)
13 Convert Breithaupt W ading Pool to Splash Pad (11,000) (11,000) (0.01 %) (0.01 %) (0.10) (0.10)
14 EPC Grant Increase (54,000) (54,000) (0.06 %) (0.06 %) (0.51) (0.51)
15 Eliminate Summer Youth Drop in age 18+ (4,400) (4,400) (0.00 %) (0.00 %) (0.04) (0.04)
16 Reduce Urban Design capital account (50;000) (50,000) (0.05 %) (0.05 %) (0.47) (0.47)
17 Communication Towers on City Buildings (10.000) (10,000) (0.01%) (0.01%) (0.09) (0.09)
18 Adjust Cemetery Interest (46;900) (46,900) (0.05 %) (0.05 %) (0.44) (0.44)
19 Delayed opening at Bridgeport Community Centre (150.221) (150.221) (0.15 %) (0.15 %) (1.42) (1.42)
20 Reduce City Run Festivals - (40,000) - (0.04 %) (0.38)
Finance and Corporate Services
21 Purchasing Wages (14;155) (14,155) (0.01%) (0.01%) (0.13) (0.13)
22 BEEP Grant (27,500) (27,500) (0.03%) (0.03%) (0.26) (0.26)
23 Computer/Telephone Charges (50.000) (50.000) (0.05 %) (0.05 %) (0.47) (0.47)
Infrastructure Services
24 Turf Maintenance (114,000) (114,000) (0.12%) (0.12%) (1.08) (1.08)
25 Sportsfield Maintenance (49,000) (49,000) (0.05%) (0.05%) (0.46) (0.46)
26 City Hall Fountain to Reflecting Pool (7,000) (7,000) (0.01%) (0.01%) (0.07) (0.07)
27 Rockway Fountain (23;000) (23,000) (0.02 %) (0.02 %) (0.22) (0.22)
28 Outdoor Pools (Kiwanas) reduced season (17,550) (17,550) (0.02 %) (0.02 %) (0.17) (0.17)
29 Outdoor Pools reduced season (30;000) (30,000) (0.03 %) (0.03 %) (0.28) (0.28)
30 SWM Charitable Organization Exemption (150.000) (300.000) (0.15%) (0.31%) (1.42) (2.83)
31 Reduce Engineering capital accounts (314.900) (314.900) (0.32 %) (0.32 %) (2.97) (2.97)
32 Parking (250,000) (493.894) (0.26 %) (0.51 %) (2.36) (4.66)
33 Delayed opening of McLennan Park (90.333) (90.333) (0.09 %) (0.09 %) (0.85) (0.85)
34 Other Decorative Fountains (50.000) (50,000) (0.05 %) (0.05 %) (0.47) (0.47)
General
35 Kitchener Public Library
36 Gapping - (175;000) - (0.18%) - (1.65)
37 Fringe (180.000) (180.000) (0.18 %) (0.18 %) (1.70) (1.70)
38 EDIF (250,000) (500.000) (0.26 %) (0.51 %) (2.36) (4.72)
39 Hydro (150,000) (150.000) (0.15%) (0.15%) (1.42) (1.42)
40 Reduce Recognition Reception (4,000) (25,000) (0.00 %) (0.03 %) (0.04) (0.24)
41 Reduce Advertising & Publicity by 10 % (36;000) (36,000) (0.04 %) (0.04 %) (0.34) (0.34)
42 CITS additional grant (87;000) (0.09 %) - (0.82)
43 Staff Recognition Event (6,000) (6,000) (0.01%) (0.01%) (0.06) (0.06)
44 Management Salary Adjustment (grade 12 and up) (155,000) (0.16 %) (1.46)
45 Increase Userfees 1 % 2 % (effective July 1) (100.000) (200,000) (0.10 %) (0.20 %) (0.94) (1.89)
46 Reduction of General Provisions - (275.000) - (0.28 %) (2.60)
47 Tax Stabilization Reserve Fund (500,000) (750.000) (0.51 %) (0.77 %) (4.72) (7.08)
48 Increase transfer from Gas Utility (400.0001 (0.41 % 1 (3.77)
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2011 Budget Reductions
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Reduction: $8,000
Impact/Risk:
Compass Kitchener account receives an annualized amount that this advisory committee
uses for surveying and community engagement. Funds accrue over 3 years (generally) to
allow for large scale surveying (in the 4th year of council's term), community engagement
and communication with citizens to ascertain: (a) satisfaction with municipal government,
(b) satisfaction with municipal services, (c) priorities for action, and (d) ideas regarding
improving the health and vitality of our community in light of priorities. The impact of the
proposed reduction constrains our efforts to a degree. That said technology (especially
social media) and "green" communication policies can reduce our use of traditional media
and printed materials, thereby potentially reducing costs to the program.
Safe and Healthy funds the administration of the Safe and Healthy Advisory Committee, as
well as providing financial support to local projects with a focus on community safety and
crime prevention (eg., Festival of Neighbourhood Sponsorship, Downtown Graffiti Project,
Town and Gown, CPTED) as recommended by the advisory committee members. (NOTE:
This capital allocation was reduced from 50K to 40K in 2009.) Reduction to this annual
allocation will impact the extent to which the City can provide financial support to
community projects that aim to prevent crime and increase community safety and well-
being.
Reduction: $60,000
Impact/Risk:
An increase of four new councilors has resulted in an increase in direct costs such as
salaries, benefits and technology. It has also resulted in the need for additional support
staff. In an effort to support the larger Council with the existing staff, over the past year,
OMC staff have been reviewing a number of business processes and practices to make
operations more efficient. However, in order to ensure Council has the support they need
to be effective in their leadership role, provision for an additional staff position has been
included in the 2011 OMC Operating budget in the event additional support is needed.
Risk of not fillin osition; reduced level of su ort for OMC.
• •~- •.
Reduction: $15,000
Impact/Risk:
Every year the City of Kitchener enters a parade float into two community parades -the
Kitchener-Waterloo Oktoberfest Parade (October) and the Santa Claus Parade
(November). Each of these parades lasts for approximately an hour and a half.
Each year City staff build/rebuild on the same basic float frame in order to achieve a
specific "theme" for that year. The float frame is scheduled to be replaced every eight years
due to wear and tear.
On an annual basis, the vast majority of the float costs are related to paying for Facilities
Management staff who build the float. A much smaller amount of funding is used to
purchase materials, equipment and supplies to decorate the float. To fund the creation of
the parade float, each year $15,000 is transferred into a reserve fund.
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City Council may choose to stop the practice of entering a float into these two parades, cut
the $15,000 annual transfer and transfer the balance of that reserve ($8,214) into the tax
stabilization reserve.
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Reduction: $20,000
Impact/Risk:
In 2008 the City purchased and installed new digital, high-speed photocopiers and bindery
equipment for its in-house Print Shop. Over the past two years, as City staff have operated
in this fundamentally different printing environment, they have continually sought
operational efficiencies and savings. Staff believe the following adjustments can be made to
the 2011 Print Shop operating budget:
^ Part-time Wages ($5,000) -staff have been able to modernize a number of labour-
intensive processes previously done manually which has reduced the need to bring in
part-time staff at peak times throughout the year.
^ Printing Supplies ($5,000) -supply costs can reduced for the following reasons:
reduced corporate-wide printing requires less funding for paper in the Print Shop and
across the City; Print Shop staff are strictly limiting the use of high-price stock paper,
and; the new equipment has resulted in less paper being waste.
^ Equipment Leasing ($10,000) -the price per impression the City is charged for leasing
the Print Shop equipment is lower than anticipated for two reasons: (1) reduced
corporate-wide printing has lead to fewer impressions, and; (2) after two years of
operating the new equipment, the per impression cost has proven to be lower than first
anticipated.
There is a minimal risk that corporate-wide printing could increase in 2011, resulting in
higher supply and per-impression costs in the Print Shop. This would result in a small deficit
in these areas. Staff will reduce these lines items within the Print Shop operating budget for
a total savings of $20,000.
-.
Reduction: $8,500
Impact/Risk:
Between 2005 and 2011, the Kitchener Market subsidy has been reduced by 42% from
$665,000 to $285,000 through an aggressively reducing cost by 27% and increasing
revenue by 50%. The proposed cuts are spread across a number of accounts to minimize
their total impact on Market operations. Key budget items such as marketing have been
preserved in order to support the existing branding strategy and revenue targets. Further
reductions to strategic operating and capital budgets at the Market will adversely affect its
ability to achieve further revenue growth and support the City's corporate goals.
•. • C ••
Reduction: $7,000
Impact/Risk:
Kitchener in Bloom is a program that 1) encourages residents and businesses to take pride
in Kitchener and beautify the community, and to 2) recognizes and celebrates those
residents and businesses who do beautify our community and those who take extra effort to
do so in an environmental) friend) wa .The KIB committee is com rised of citizens,
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municipal staff, a member of regional council and members of associations, businesses
and organizations interested in horticulture, heritage and improving community life.
The proposal is to eliminate the program for an annual cost savings of $7,000.
Funds are used for promotion and advertising, administrative costs (mailings, printing), a
bus tour of some of the recognized properties, and a finale celebration to thank and
recognize the selected property owners. The committee works hard to make this program
work with minimal spending and, though they have not had the capacity to find substantial
sponsorship support for the program, they have found smaller donations and support to
reduce costs where possible.
Though it is difficult to measure the exact impact of cancelling the program (i.e many
property owners may already see the value of beautifying their property and may not
necessarily need an "award" program to be motivated), the Kitchener in Bloom committee
members believes that the KIB program offers good value for the dollar in recognizing and
celebrating the efforts of citizens, raising awareness re: positive environmental gardening
practices; building community and inspiring community pride. The bloom bus tour is always
full and the finale is always well-attended. The community members and business owners
involved enjoy the recognition and support they receive for their efforts.
Reduction: ~ $13,900
Impact/Risk:
The purpose of the recreation grant program is to offer financial assistance to
neighbourhood associations and community groups who provide recreation and leisure
programs to children and youth. Essentially, these grants extend our role in the community
and increase the capacity of groups to provide neighhourhood based programs.
The elimination of this program will result in a service reduction to neighbourhood
associations and community groups which may decrease their capacity to deliver programs
to children and youth. Additional pressures maybe put on staff to deliver these programs in
neighbourhoods as an alternative.
Reduction: ~ $20,000
Impact/Risk:
As a cost cutting measure, most Community Centres have closed or offered significantly
reduced hours and services during the Christmas week in the last two years. Continuation
of this practice would allow fora total reduction of $20,000 (wages and fringe
benefits) annually from the Community Centres and Seniors budgets. Impacts of such
closures would include lack of access to public space, including public access computers
and select services at Community Centres, by community members for one week each
year. It would also increase pressure on some neighbourhood associations to complete
planning for program registration and implementation prior to the holiday season.
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Reduction: $6,000
Impact/Risk:
Movie licenses are required to show movies in Community Centers and public settings.
Community Centre budgets have included the annual cost of movie licenses. Reduction of
this funding would result in a savings of $6,000 annually. This reduction would result in an
inability for neighbourhood associations, seniors groups, summer playgrounds, youth drop-
in and camps to show movies. Three Neighbourhood Associations currently show movies
as a regular low cost community program. Movie licenses would need to be purchased on
an as-needed basis at a much higher rate, which would be a significant deterrent to low
cost programming.
Reduction: $15,045
Impact/Risk:
As a benefit of affiliation, neighbourhood associations are eligible for recreation grants to
offset the cost of program expenses, to a maximum of $750 annually. Elimination of these
grants would result in a budget reduction of $15,000 per year. Such a reduction would
make it very difficult for some neighbourhood associations to provide low cost programming
to area residents. This is especially true for new or small NAs, or those neighbourhood
associations in modest income neighbourhoods within the City. It would also act as a
deterrent to the operation of youth programming, which traditionally requires subsidy. The
elimination of these grants will take away a primary benefit of affiliation with the City of
Kitchener, and would necessitate a review of Council Policy I - 324 Affiliation Policy -
Nei hbourhood Associations
• • • • • • ••
Reduction: $20,000
Impact/Risk:
The closure of 4 summer playground programs would result in the elimination of 8 summer
student positions and the loss of approximately 860 summer program spaces for children
between the ages of 3 and 12. The programs that would be affected include; Smithson
summer playground, Our Lady of Grace summer playground, Suddaby summer playground
and Courtland adventure summer playground.
This program celebrates its high quality yet affordability. A reduction
would decrease summer recreation opportunities for our lower income families.
-. ~ •
Reduction: $7,000
Impact/Risk:
Council Policy I-660 outlines printing guidelines for affiliated Neighbourhood Associations.
Access to printing is one of the benefits of affiliation to NAs by the City of Kitchener.
Reductions in the printing budget would necessitate either a reduced number of pages
allocated annually to each NA, or reductions in newsletters from three times per year to
twice per year. Such reductions would create challenges for neighbourhood associations in
communicating information to area residents. The newsletter is the primary vehicle for the
provision of program information. Any reduction in pages or issues would create difficulty
for the NA volunteers to promote their programs, events and information to the public.
Reduced public participation and volunteer stress would result. Reduction of newsletter
rintin would reduce a ma~or benefit of affiliation for NAs.
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2011 Budget Reductions
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Reduction: $11,000
Impact/Risk:
The Breithaupt Park Wading pool operates mid June to the end of August. On a busy
summer day a total of 250 bathers would visit this facility. A lifeguard is scheduled daily to
ensure a safe environment and due to the standing water of 6-8 inches in the pool basin.
Changes to the water circulation system this summer will allow the basin to either fill or
remain as a wading pool, or to simply spray the water over the basin essentially acting as a
Spray Pad facility.
If the pool basin does not have standing water, a lifeguard is not required. $11,000 is
currently budgeted to supervise this facility for 11 weeks during a time frame of 10am -
7:OOpm. Modified hours occur in inclement weather and in late August.
A change of this nature may cause concerns with the users. The lifeguard role was to
ensure the safety of the environment, provide first aid as needed, correct unsafe situations
parents not supervising their children, misconduct of youth) and clean up of debris in the
pool area (branches, cigarette butts, broken glass). The neighborhood has an expectation
that the facility has historically been supervised by City staff.
Reduction: $54,000
Impact/Risk:
Downtown Community Centre, Rockway Centre and Breithaupt Centre receive Elderly
Persons Centres grants from the Ministry of Long Term Care to help offset the operational
expenses of the Centres. In December 2010, notification was received that these grants
were being increased in the amount of $18,000 per centre for 2011. This is a revenue
increase of $54,000 for 2011. It is anticipated that the increase in this grant will be ongoing,
and is therefore a sustainable revenue increase in the Centre operating budgets.
~ .. .. -
Reduction: $4,400
Impact/Risk:
The 18+ Summer Youth Drop-in program is specifically designed to meet the recreation
and leisure interests of youth between the ages of 18 and 24. The program operates three
evenings per week for 7 weeks during the summer at both the Victoria Hills and Mill
Courtland Community Centres.
By eliminating this program, there is a decrease in the number of affordable community
based recreation opportunities for this age group. Two part time positions will be eliminated
resulting in a decrease in employment opportunities for young people. The program is
experiencing good momentum as seen in an increase in the total number of visits from
2009 (206) to 2010 (335). Further, a program cut will decrease staff's opportunity to
connect with this group and to recruit future program staff and volunteers. In
addition, there will be no opportunities for continued participation from youth who "age out"
of the other ro rams
Reduction: $50,000
Impact/Risk:
The Urban Design Budget is for strategic investments in streetscape improvements (not
otherwise funded) with the following objectives:
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• improve the quality of the public realm;
• provide immediate value to the community and/or surrounding neighbourhood;
• enhance the image of the City; and
• show leadership in high quality urban design and to encourage private sector
investment
The Urban Design Budget is a key tool for implementing several community priorities
identified in Kitchener's Strategic Plan including objectives related to "Quality of Life",
"Leadership and Engagement", "Dynamic Downtown" and "Development". The Urban
Design Budget also supports the Economic Development Strategy objective of retaining
and attracting talent.
High profile areas are targeted. Many projects funded through this account are partnership
projects with other public authorities such as the Region of Waterloo. Region of Waterloo
road construction projects normally do not include any funding for the pedestrian
realm or any funding for boulevard enhancements beyond the minimum standard of "cobra
head" light fixtures and sod.
The Urban Design Budget has been in place since 2005. The scope of projects varies.
Recent past projects include:
• a contribution to the downtown King Street reconstruction;
• enhancements to the Queen Street South reconstruction (between Highland and
Courtland);
• streetscape/landscaping/safety improvements to the bus shelter and surrounding
area in front of KCI (Kitchener-Waterloo Collegiate and Vocational School);
• new post and ring bicycle racks/stands as part of the King Street East
reconstruction.
Upcoming projects include:
• contribution to Fairway Road extension/bridge for a gateway feature and pedestrian
connection to trail system along Grand River; and
• contribution to Belmont Avenue reconstruction for pedestrian amenities and a
gateway feature or public art as identified in approved urban design brief.
A potential future project is a contribution the Region's multi-modal transportation hub at
King Street West near Victoria Street.
An annual reduction of $50,000 would reduce this budget by almost 50% which would
limit the scope of work to one or two small projects per year (e.g. King Street East bicycle
racks, KCI bus shelter area) or one significant project every three to five years (e.g.
downtown King Street, Fairway Road Extension). Current funding levels enable a
combination of smaller and larger projects so that there is almost always one project
underway.
Reduction: ~ $10,000
Impact/Risk:
Lease rates for one telecommunication tower or antenna range between $8,000 - $12,000
per year. Leases are normally 5 vears in lenath with renewal provisions for up to 20 vears.
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and the lessee covers all expenses (capital/installation costs, electrical utility costs,
property tax increases etc.). There is currently interest in erecting a tower next to
Sportsworld Arena which could yield approx. $10,000 a year in revenue. Based on
discussions with an industry representative, staff conservatively estimates one additional
lease opportunity every 3 years. For each new lease there would gone-time administration
cost of approx. 10-14 total staff hours to coordinate the lease agreement and the
installation.
Reduction: ~ $46,900
Impact/Risk:
Budgeted Cemetery interest revenue could be increased by $46,900.
When the 2011 budget was set for cemetery interest it was lowered from prior year
significantly. We assumed there would be a smaller return from the anticipated lower
interest rate. The budget was set prior to the 2010 actual interest calculation. Actual
interest received was not as low as anticipated and 2011 rates are expected to have
gradual rate increases. Using conservative estimates the 2011 budget for cemetery
revenues could be increase to $187,100, resulting in decease in the cemeteries total
budgeted deficit by $46,900.
This proposed budget increase also
Reduction: ~ $150,221
Impact/Risk:
the actual interest earned in 2010.
The Centre is anticipated to open in October 2011. The anticipated hours of operation are
Monday to Friday, gam-9pm; Saturday gam-1 pm for programs; 1 pm onward for rentals and
other community use as required; Sunday, open for rentals and community use as
requested. Overall anticipated hours of operation are 80 hours per week.
The original budget request can be amended to reflect 3 months of operation (Oct -Dec
2011). The additional 9 months of operational expenses would be reflected in the 2012
budget.
Additional details available in issue paper Op 21 Growth related items.
Bridgeport Community Centre
User Fees -Rentals
Sundry Income
Salaries/Wages
Administrative Expenses
Equipment Reserve Charges
Material & Supplies
Professional & Contracted Services
Rentals & Leases
Grants Paid
Repairs & Maintenance
Promotional Costs
Utilities
Original Budget
Submission Revised Budget
ommunity ommunity
Services FM Services FM Reductions
(1,500) - (500) - (1,000)
(460) - (153) - (307)
120,053 59,958 40,017 19,986 120,008
4,785 - 2,000 - 2,785
3,636 3,444 1,212 1,148 4,720
5,730 10,060 1,910 3,353 10,527
13,600 - 13,600 - -
913 - 913 - -
750 - 250 - 500
- 4,032 1,344 2,688
500 - 167 - 333
- 14,950 - 4,983 9,967
148,007 92,444 59,415 30,815 150,221
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1 -s
Reduction: $40,000
Impact/Risk:
To date, the City owns and operates six major festivals: Cruising On King Street, Tapestry,
Kidspark, The Word On The Street, Christkindl Market and New Year's Eve.
The City also supports numerous 3rd party festivals and events.
If cost savings are required, staff would recommend that two festivals -Tapestry and New
Year's Eve be scaled back to create two smaller community type programs, resulting in a
savings of approximately $40,000 per year (savings of $20,000 per festival).
While these are excellent festivals Tapestry and New Year's Eve have been identified
because they would involve the least stakeholder impact and have the lowest attendance in
com arison to the other of the festivals owned and o erated b the Cit .
• ..-
Reduction: $14,155
Impact/Risk:
The Purchasing Section of the Supply Services Division maintains a provision for part-time
wages in the amount of $14,155 to provide budget for aback-fill during vacation periods for
the two administrative support staff and also to provide additional support when purchasing
volumes exceed the capacity of those two staff members.
The provision for part-time wages could be eliminated. This may result in the following two
impacts from time to time:
• The front Purchasing counter will need to be closed occasionally should staffing
levels be insufficient to provide coverage, resulting in a decreased level of customer
service; and
• Processing of tender documents will be delayed during periods of peak workload
_ -
Reduction: $27,500
Impact/Risk:
Founded in 1998, the Residential Energy Efficiency Project (REEP) is a community-based
partnership that provides home energy evaluations in the Waterloo Region. Using the
national home energy rating system developed by Natural Resources Canada (EnerGuide
for Houses), REEP has been conducting home energy audits since the federal grant
program began in October 2003. In early 2006, REEP became incorporated as a project of
Waterloo Region Green Solutions (W RGS), a community-based non-profit environmental
organization that is funded by a combination of local partners, provincial contracts, grants
and client fees. The City has funded REEP since 2000 and, for the past several years, the
value of the grant has been $25,000. REEP has requested $27,500 for 2011 and this
amount has been included in the draft 2011 budget based on a previous referral motion of
Council.
At the September 16, 2010 Environmental Committee meeting, the Committee was advised
that the current reduction in 2010 ecoENERGY home energy evaluations correlated with
the loss of federal funding in March 2010. The Province has continued to participate in the
home evaluations rants until March 2011, with no discussions of an extension at this time.
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While there may still be a number of homeowners interested in home energy evaluations,
without the incentives provided through the grants it is anticipated that participation in the
home energy audits will continue to decline.
REEP intends to begin to focus on several new initiatives for 2011. This includes:
showcasing the REEP house, which highlights energy saving measures for the average
homeowner; the continuation of the stormwater public education and awareness program;
and, a new initiative partnering with Kitchener-Wilmot Hydro introducing electricity audits.
This new program would be similar to building envelope audits, where qualified electricity
auditors conduct home electricity evaluations educating consumers on electricity saving
techniques.
In addition to the annual grant paid to REEP for their overall program, Kitchener Utilities
contributes $60 towards the cost of each home energy evaluation and $40 towards the
follow-up visit to reduce the cost to local residents. In 2010, the contribution from Kitchener
Utilities was $71,920 and in 2009 it was $95,280. These costs are funded from the demand
side management (DSM) program which is modeled after the OEB-mandated program for
rate-regulated utilities and are not funded through the property tax base. The City of
Kitchener also provided aone-time grant of $60,000 for the REEP House through the Local
Environment Action Fund in 2009.
In light of the change in direction for REEP, the anticipated decline in home energy
evaluations, and Council's budget targets, it would be reasonable for Council to revisit the
City's ongoing commitment to the program by way of the annual tax-supported operating
grant. REEP has advised that Kitchener's support is vital to their continued operation and
serves to leverage funding from other municipalities, as well as the provincial and federal
governments. REEP's 2009 Annual Report is attached for Council's reference.
Reduction: ~ $50,000
Impact/Risk:
The Computer and Telephone Reserve funds are set up to fund various Information
Technology (IT) infrastructure replacement and upgrade initiatives such as the telephone
upgrade project, ongoing network & database server replacements and desktop computer
replacements These funds have also been used to finance the continual growth of the
City's voice and data networks to new City sites such as Community Centres and Arenas,
as well as to provision the required infrastructure when new technologies are introduced (ie.
mobile computing and VoIP).
Although the IT department is very diligent in monitoring these funds and ensuring that
each project is properly scoped and planned, there are always unexpected equipment
failures and new requirements that need funding. The reduction of these funds, combined
with the previous reduction to the Telephone Reserve Fund in 2009 totaling $100,000
annually, inhibits the IT Divisions' ability to respond to these situations and deliver new
technologies in the future that would support the City's Strategic direction; more efficient
use of staff time and effectively delivery of services to the public.
3- 12
2011 Budget Reductions
Add itiona I Information
200 2010 2011 2012 2413 2O1a
Actual Actual Buhr et Burlr et Budr et Budr et
Tele phone Reseir+e Burlr et
Funtl 0 enin Balance 1,529,013 1,642,143 1,678,711 474,963 -159,384 -13,009
Funtl Closin Balance 1,642,143 1,678,711 474,963 -159,384 -13,009 114,719
Com cuter Reserve Burlr et
Funtl 0 enin Balance 747,628 833,036 943,675 240,197 5,475 -156,334
Funtl Closin Balance 833,036 943,675 240,197 5,475 -156,334 -239,589
CC11r161NECl CLcaSINU BALANCE 2,475,1$0 2,G22,3$5 715,IG0 -153,n09 -1Gn,343 -121,870
The following risks are associated with these reductions:
• With the current initiatives in place, the reduction of these funds will result in an
overall deficit of $124,870 by 2014
• Funding would not be available for computer desktop, network or telephone failures
(the lifespan of each computer at the City is 5 years, which is 1 to 2 years beyond
industry standards and as a result we require spare parts on hand to address any
failures)
~~2009 and 2010 Closing Balances are higher than normal due to the funding that was
budgeted and set aside for the CMF project.
Reduction: ~ $114,000
Impact/Risk:
Description of Reduction: Reduce the service level for turf cutting from once every four
weeks to once every four and one half weeks
Implication: increased resident complaints
Reduction: ~ $49,000
Impact/Risk:
Description of Reduction: reduce level and frequency of maintenance activities
Implication: will reduce playability of the fields. May result in increased user complaints.
Risk of reduced revenues low.
Reduction: ~ $7,000
Impact/Risk:
Description of Reduction: Keep as a reflecting pool, but don't operate fountains
Implication: minimal -aesthetic
Reduction: ~ $23,000
Impact/Risk:
Description of Reduction: Complete closure and draining of fountain
Implication: aesthetic impact. Will result in complaints from Horticultural Society who
maintain the Gardens for the Citv as well as users of the Gardens
3- 13
2011 Budget Reductions
Add itiona I Information
Reduction: $17,550
Impact/Risk:
Description of Reduction: reduce season by two weeks at beginning of season and two
weeks at end of season. Currently start setup April 11t" -open June 3rd -close Sept. 5th
Implication: Service impact to citizens; potential reduction of revenue; potential
implementation complications for 2011 as summer passes already set up to start at a
certain date in summer
Reduction: $30,000
Impact/Risk:
Description of Reduction: reduce season by two weeks at beginning of season and two
weeks at end of season. Currently Harry Class start set up May 2r'd, open June 4t" and
close Sept. 27t"; Idlewood -start setup April 18t" -open May 25t" -close Sept. 5t"; Wilson
- start setup May 2r'd -open June 10t" -close Sept. 5
Implication: Service impact to citizens; potential reduction of revenue; potential
implementation complications for 2011 as summer passes already set up to start at a
certain date in summer
Reduction: $150,000 - 300,000
Impact/Risk:
Description of Reduction: Eliminate or phase out program over a period of years. More
details available in issue paper Op35.
Implication: increase in complaints from charitable organizations
Elimination of "Places of Worship" Grants for stormwater Rate
The stormwater rate is based upon the principle that the more impervious area an individual
property owner has, the greater the amount of runoff and pollutant loading from the
property and, consequently, the greater the demand on the City's stormwater management
system, either for flood control or water quality treatment purposes.
With the implementation of the stormwater rate in 2011, this essential principle applies to
all properties in Kitchener with two exceptions - "places of worship" and charitable
organizations. These properties typically have large impervious areas, due to their parking
lots or building envelope sizes. Under the original tax-based funding model, this sector is
tax exempt and did not contribute towards stormwater program.
Proponents indicated to Council that to charge a stormwater rate to these properties would
be an undue burden on this sector of the community. Council directed staff to establish
grants for 100% of the stormwater rate charges and is contingent on the implementation of
a stormwater or environmental education program for their members or clients. There is no
stipulated end date to this grant program, there is no phase out date for the grant program,
nor upset limit on funding related to this grant program. This grant was effect January 1,
2011, the start of the stormwater rate im lementation.
3- 14
2011 Budget Reductions
Add itiona I Information
From staff's perspective, this does not promote good environmental stewardship by "places
of worship" or charitable organizations, is not fair to other property owners in different rate
categories and would be viewed as subsidizing certain users within a specific rate category,
making the rate structure susceptible to legal challenges by other users.
Based on Council direction, staff recommended that these grants be funded from the tax
levy to the enterprise, as this is deemed to be a social benefit with no rational relationship
to the provision of stormwater management services to those property owners.
Approximately $300,000 will be allocated annually from the tax levy to the stormwater utility
(or a 0.3% tax levy increase in 2011).
For clarity, the "places of worship" grant program is distinct from a stormwater charge credit
policy funded by the stormwater rate base. The credit policy property owners would qualify
for stormwater rate credits when they can demonstrate that their existing or proposed
stormwater facilities or applied best management practices are functioning as approved.
This credit policy is being developed and staff will report to Council on or before January 1,
2012 with regards to a stormwater rate credit policy for all eligible properties including
residential, multi-residential and non-residential sectors.
Reduction: ~ $314,900
Impact/Risk:
Description of Reduction: Eliminate annual contribution from tax base to fund capital
programs -list of programs impacted attached
Implication: listed in attached -Appendix A
Reduction: ~ $250,000 - $493,894
Impact/Risk:
Description of Reduction: Implement Alternative 3 (Issue Paper #) -Defer implementation
of TDM and Cycling Master Plan
Implications: The Transportation Demand Management and Cycling Network programs,
policies and services will not be developed. The delay in starting to give the public
opportunities to travel other than in single occupancy vehicles will result in increased
congestion, greater environmental impacts, greater risk to the downtown from insufficient
parking and greater expense to the City from having to build additional parking structures.
Although the 2011 levy impact is completely eliminated it just shifts the problem to future
years. The parking enterprise will not remain solvent if the dividend remains at the 2011
level. TDM and the Cycling Master Plan will continue to have to be scaled back in 2012.
Budget Impact: $493,894
3- 15
2011 Budget Reductions
Add itiona I Information
Reduction: ~ $90,333
Impact/Risk:
Reduction of McLennan Park budget for operations and facility management, June 2011
opening.
Additional details available in issue paper Op 21 Growth related items.
McLennan Park
Salaries/Wages
Equipment Reserve Charges
Material & Supplies
Professional & Contracted Services
Repairs & Maintenance
Utilities
Original Budget
Submission
Revised Budget
perations perations Reductions
L50,135 86,824 197,102 65,824 74,033
127,300 9,348 122,300 7,048 7,300
2,672 13,878 2,672 9,878 4,000
- 500 - 500 -
- 2,750 - 2,750 -
- 77,000 - 72,000 5,000
380,107 190,300 322,074 158,000 90,333
Reduction: ~ $50,000
Impact/Risk:
Description of Reduction: complete closure of fountains at Clock Tower, Hibner Park,
Grand River Transit Terminal, Oktoberfest Platz, Victoria Park Entrance 1 and 2
Implication: aesthetic impact
Budget Impact: $50,000
Reduction:
Impact/Risk:
Additional details available in issue paper Op 28
Reduction: ~ $0 - $175,000
Impact/Risk:
In 2010, the City's gapping budget was $2.3M. The chart below shows the budget and
actual in gapping for the past three years:
Year Budget Actual Surplus/
(Deficit)
2008 2,233,915 1,849,554 (384,361)
2009 2,300,932 1,685,868 (615,064)
2010 2,300,932 852,039 (1,448,893)
The trend indicates that over the past three years it has been difficult to achieve budgeted
gapping targets. This is in part due to the lack of capacity in headcount through various
3- 16
2011 Budget Reductions
Add itiona I Information
efficiencies and reductions in FTEs. During tough economic times it is also less likely that
people will leave their current roles and thereby create a vacancy.
An increase in the gapping budget from $1.5M to $1.675M represents 0.18% decrease to
the tax levy and an increased likelihood of a budget shortfall.
Reduction: $180,000
Impact/Risk:
City staff is in the final stages of a three-part request for proposals (RFP) for its group
benefits provider; its Employee Assistance Provider (EAP) and its third party flex
administration services provider. Staff anticipates bringing a recommendation forward to
City Council on the awarding of this RFP in early April.
At this point in the RFP process staff have short-listed the proposals to two group benefits
providers. Both of these proposals would be obligated to provide benefits in accordance
with all of the City's collective agreements. While staff continue to work on evaluating the
final two proposals, it has become clear that regardless of which of these two proposals are
awarded the RFP, the City can anticipate saving a minimum of $400,000 in annual benefits
costs - $360,000 of which can be attributed to the tax-base.
Analysis continues on the proposals received for the City's EAP provider, flex benefit
administration services provider -and accidental death and dismemberment (AD&D)
benefit provider. To date, it is not known if the City will achieve savings through the
awarding of these components of the RFP.
Should the RFP be awarded to a company other than the City's current provider, staff
anticipate the transfer to a new benefit carrier could not take affect until July of 2011 -
meaning the potential tax-based savings for the current year would be approximately
$180,000. The balance of the savings would be achieving in 2012. It is important to note
these 2012 savings would be more than offset by the required increases to OMERS.
Reduction: $250,000 - $500,000
Impact/Risk:
Current EDIF projections forecast a surplus of $2.7M at the end of the program in 2013.
This is largely due to investment income of $1.5M that has been earned over the course of
the program caused by timing differences between when funds were received and when
they were spent. Any reduction to EDIF this year would be compounded over all the
remaining years (2011-2013), so a reduction of $500,000 would reduce the projected
ending balance of EDIF by $1.5M ($500,000 x 3 years).
EDIF investments have leveraged $1.78 in partner investment for every dollar invested by
the City. In addition, over $200 million in private sector investments in large projects such
as the Kaufman Lofts, Tannery, City Centre Condominiums, Breithaupt Block and 220
King, have either been made or are in the final design process as a result of EDIF. The
overall effect has been improved employment performance in the downtown, reduced office
vacancy rates, residential intensification, and assessment and tax revenue growth. In
addition, EDIF investments in the downtown have a si nificant im act on the environment
3- 17
2011 Budget Reductions
Add itiona I Information
by supporting urban intensification thereby slowing greenfield expansion of the City. They
also support remediation of contaminated former industrial sites thereby reducing the risks
to the City's ground and surface water resources. Finally, the development of ahigh-quality
urban core improves the ability of high growth companies (e.g. Google, Electronic Arts,
Desire2Learn) to attract and retain talent thereby positioning the City's economy to thrive in
a rapidly changing global knowledge economy.
Reduction: ~ $150,000
$1 million is transferred annually from the Hydro Capital Investment Reserve to the tax-
supported operating budget to mitigate property taxation requirements. This amount is
funded through the Hydro Capital Investment Reserve Fund which receives the dividends
and interest on the City's investment in Kitchener Power Corporation and Kitchener-Wilmot
Hydro. An additional amount is transferred from the reserve to fund the capital program.
Staff recently met with Hydro's CEO to discuss the estimated dividend for 2011 (based on
results for fiscal 2010). It is anticipated that this year's dividend will be higher than in the
past as a result of Hydro's "re-basing" of the rate for a four year term in 2010. Based on the
manner in which the Ontario Energy Board (OEB) approves the rate, Hydro's net income
and the associated dividend will decline over the term of the four-year rate approval. The
Hydro Board will approve this year's dividend in April.
Staff has adjusted the reserve projection (below) to reflect the anticipated increase in the
dividend for 2011 and a decline to the historic baseline by 2014. Although the 2011
amount is still an estimate, it provides an opportunity to increase the transfer to the
operating budget to reduce the 2011 levy increase. Based on the anticipated dividend for
2011 and beyond, a sustainable increase in the operating transfer of $150,000 could be
made without incurring a deficit in the reserve over the longer term.
HYDRO CAPITAL INVESTMENT RESERVE FUND
PROJECTION ($'000's)
2010-2020
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Actual Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget
Revenues
Kitchener Power Corp. Dividend 1.753 2,800 2.300 2.000 1.700 1.700 1.700 1.700 1.700 1.700 1.700
Interest on Long Term Debt 4.198 4,168 4,168 4..168 3,983 3.891 3.891 3,891 3..891 3,891 3.891
Interest income 46 17 26 30 29 23 16 8 4 2 1
5, 996 6.985 6.493 6.198 5.712 5.613 5.606 5, 599 5.595 5.593 5.592
Expenditures
Transfer to Operating 1.000 1.150 1,150 1.150 1.150 1,150 1.150 1.150 1,150 1..150 1,150
Transfer to Capital 5.500 5.500 5.000 5,000 4.750 4.750 4.750 4.750 4.500 4,500 4.500
6.500 6.650 6.150 6.150 5,900 5.900 5.900 5.900 5.650 5.650 5.650
Net Revenue (Expense) (504) 335 343 48 (188) (287) (294) (301) (55) (57) (58)
Balance beginning of year 1.032 528 863 1.206 1.254 1.066 779 485 184 129 72
Balance end of year 528 863 1
779 485 184 129 72 14
Council should consider the following risks before proceeding to increase the transfer from
the reserve:
• Dividends will decline between 2012 and 2014 based on the OEB's approach to
rate-setting;
• The current level of dividend and interest payment will continue to come under
3- 18
2011 Budget Reductions
Add itiona I Information
pressure through the OEB rate-setting process as interveners lobby the OEB to
reduce deemed rates of return;
Cost pressures beyond the control of the local distribution company (such as
provincial policy mandates, generation costs, etc.) place increasing pressure on
Hydro to manage increasing costs within the approved rate; and
They City's reserve fund balances are low by any objective measure. Increasing
the transfer from the Hydro reserve to realize the benefit of higher dividends will
forego an opportunity to improve the City's overall reserve position and move
towards a more balanced financial position
Reduction: ~ $4,000 - $25,000
Impact/Risk
Since 1987 Kitchener's Mayor and City Council have hosted an employee recognition
reception celebrating the achievements, commitment and service of long-service
employees and retirees. In 1990, City Council approved policy II-255 (Years of Service
Recognition Program) which sets out the City's long-service employee recognition program.
That policy was amended in 1996, 2011 and 2010.
The City's long-service employee recognition program includes three main components:
^ A dinner/reception for long-service employees who have worked for the City for 15, 20,
25, 30, 35 and 40 years. The previous year's retirees are also invited to attend. Each
employee is allowed to invite a guest. This component of the recognition program has
averaged $4,210 per year over the past three years. In an effort to minimize the cost of
the dinner, in 2010 the dinner with changed to a reception.
A long-service employee gift recognition program for employees who have worked at
the City for 15, 20, 25, 30, 35 and 40 years. Retirees are also recognized through this
gift program. Depending on their length of service, employees are provided with a gift
ranging from $50 for 15 years of service to $275 for 45 years of service. Retirees are
provided with a gift ranging from $100 for 5 - 10 years of service to $450 for over 40
years experience. The cost of this component of the recognition program has averaged
$18,060 per year over the past three years.
City staff who have worked for the City for 5 and 10 years are recognized with a City
pin. To reduce costs, these pins are purchased in bulk for a two year period. In January
of this year these pins were purchased in 2001 and 2012 at a cost of $5,357.
The City's staff recognition program is funded through a $25,000 operating account in the
Human Resources Division. While it would have a significant impact on staff morale, City
Council could choose to:
^ Eliminate the employee service pin program -savings of $5,500 every two years.
^ Eliminate long-service employee recognition reception -savings of $4,000 per year.
^ Eliminate long-service employee recognition gift program -saving of $18,000 per year.
3- 19
2011 Budget Reductions
Add itiona I Information
•~ °• `• • • • • 1'
Reduction: $36,000
Impact/Risk:
The City purchases advertisements for a variety of reasons, including: informing citizens of
major projects and events/festivals; meeting legislated obligations (e.g. environmental
assessments, tax sales, public notices for planning matters); promoting citizen engagement
opportunities (e.g. budget input), and; generating revenue for a variety of areas such as
Kitchener Utilities, The Aud, cemeteries and golf courses.
While City staff are always looking for low-cost or no-cost opportunities to communicate
information to the public, newspapers and radio advertising continue to be two of the main
avenues the public use to learn about City news. Over the past several years advertising
and publicity funding has held relatively steady or been reduced in some areas. Where
possible, staff attempt to limit the size of advertisements and keep costs low by directing
readers to the City's website for detailed information. However, this is not possible for many
of the City's legislated ads where specific content must be included.
A 10% reduction on tax-based advertising and publicity will lead to less public awareness
major initiatives, events/festivals and citizen engagement opportunities - as well as to
revenue opportunities for operations such as cemeteries and The Aud.
The draft 2011 operating budget includes a total of $360,343 in tax-based advertising
publicity. City Council may choose to reduce that level of tax-based advertising and publicity
10%, saving $36,000.
•~ `•• • °•
Reduction: $0 - $87,000
Impact/Risk:
The special $87,000 request is to fund a new Marketing initiative and a labour relations
strategy. Failure to receive the additional support may make it difficult to achieve a zero
wage increase for collective bargaining and impact negatively our ability to target new
audiences necessary for 2011 revenue growth of the Centre. The loss of missing these
0 ortunities will exceed the additional investment re uested.
•~ •• •
Reduction: $6,000
Impact/Risk:
The Staff Recognition Event is intended for holiday celebrations and to celebrate the
accomplishments of the City of Kitchener employees and to recognize the great work that
have been achieved throughout the year. The reducing of $6,000 from this fund will leave
$7,000 remaining; amounting to a total of $4.67 per employee each year.
Staff have always ensured responsible spending of these funds, and have creatively found
ways to celebrate in a cost effective manner. During the year, individual departments in the
City conduct fundraisers to host team events and recognize outstanding work. The money
in the Staff Recognition Event account is the only funding in the City budget intended to
recognize the entire City of Kitchener staff and their families.
Staff will reduce these funds for a total savings of $6,000.
3 - 20
2011 Budget Reductions
Add itiona I Information
Reduction: ~ $0 - $155
Impact/Risk:
The draft operating budget submission includes a 2% cost of living increase for
management staff. City Council may choose to adjust that increase as follows:
Management Staff
Cost of Living Increase Budget Savings
0% $155,524
0.5% $116,643
1.0% $77,762
1.5% $38,881
2.0% $0
As outlined in issue paper "Op 07 -City of Kitchener Staffing," City Council should be
aware of the following risks with these reductions:
Waae / Salary Compression: Continuing to increase management salaries at a lowe
rate than the salaries of unionized staff will narrow the gap between the salaries paid tc
non-management and management positions. This wage/salary compression can (anc
has) made it difficult to encourage current, skilled, non-management staff to apply fo
management positions. The relatively small increase in salary to a management positior
can be seen as not enough to offset the increased responsibility, as well as the loss o
paid overtime and union seniority protection. It is also not enough to compensate for the
expectation that Management staff work beyond 35 hours per week without paic
overtime or banking those extra hours. This compression can also cause situation;
where frontline staff make more than their direct supervisor -this is especially the casE
where significant amounts of overtime are incurred (e.g. fire department, operation;
division).
Reducing Market Competitiveness: The City's extensive 2006 salary comparison study
concluded staff are paid well below the market rate for similar positions in other
municipalities and corporations. This is especially true with senior management positions.
Freezing management salaries will reduce some of the salary competitiveness gained
through the recent market salary adjustments -especially given a number of other
municipalities are continuing to increase management salaries in 2011
Reduction: ~ $100,000 - $200,000
Impact/Risk:
Increase user fees by an additional amount effective July 1, 2011 to assist in achieving a
reduction to the property tax levy.
1) Increase user fees by an additional 1 % -this would yield an additional $100,000 in user
fee revenue, reducing the property tax levy increase by 0.10%; most fees would increase
by a rate of 4% in total
2) Increase user fees by an additional 2 % -this would yield an additional $200,000 in user
fee revenue, reducing the property tax levy increase by 0.20%; most fees would increase
by a rate of 5% in total
3-21
2011 Budget Reductions
Add itiona I Information
Should Council give consideration to additional fee increases, it is recommended that the
additional increases not apply to the following user fees:
• golf course memberships and green fees (already approved or being reduced)
• parking fees (monthly rates increasing by 10%)
• SWM cash-in-lieu payments (increasing by 25% in accordance with policy)
• building permit fees (enterprise revenue)
• fees frozen at 2010 levels
• letters of credit (refundable)
• business licensing fees (already approved)
• dog licensing fees (set in conjunction with City of Waterloo)
• firefighter recruit administration fees (set to recover costs)
• Fire response to Provincial Highways (set by the Province)
As referenced in memo to council dated February 11, 2011 from D. Chapman
Reduction: $0 - $275,000
Impact/Risk:
General provision accounts within the capital budget have been reviewed, with a goal of
reducing funding by 5%. However, upon review, it was determined that an overall funding
decrease of 3.8% in these accounts can be achieved. Where possible, funding cuts were
increased by more than 5% elsewhere in order to offset any cuts that were increased by
less than 5%.
Additional details available in issue paper Cap 17
•~ .• • •
Reduction: $500,000 - $750,000
Impact/Risk:
The tax stabilization reserve fund is used to fund any year end operating deficits and is the
recipient of any year end operating surpluses. After experiencing a surplus of
approximately $875,000 in 2010, the balance is approximately $1.2M. The current
balance is the equivalent of approximately 1.2% of the net tax levy and is well below the
Government Finance Officers' Association (GFOA) benchmark target of 5%-15%.
Any reduction to the tax stabilization reserve fund puts the City at risk when it comes to
fundin future o eratin bud et deficits.
..:
Reduction: $0 - $400,000
Impact/Risk:
Additional details available in issue paper Cap 34
3 - 22
2009 Annual Report
Ten Years of REEP
~~ 6
~ ~:
3 - 23
2009 Highlights
REEP reaches ten years:
12,000 homes evaluated and
9,200 tonnes of C02 reduced!
^ Homeowners, community partners, contractors and
former staff join us at our Tenth Anniversary Celebration.
^ REEP House construction gets underway and brings
$400,000 of project funding to Waterloo Region.
^ Our first Earth Day Eco-Showcase is held in partnership with
the University of Waterloo's Faculty of Environment.
~~ ~ ~~ Iw ~~LA~
Region of Waterloo
Thanl<you to our valued local partners! 1
Our 2009 results r~~
I~ r'r~ .r ~r~,rl^.1~..
were made possible by
The Corporation
of the City
yo u r f u n d i n g a n d support . `°f Cambridge
^ Region of Waterloo Kitchener
^ City of Kitchener Utilities
^ City of Cambridge
^ Kitchener Utilities Ri~~~,t
^ Kitchener-Wilmot Hydro „~"
^ Waterloo North Hydro '~°"
UL~/
Waterloo North Hydra Inc.
REEP Waterloo Region
2009 Annual Report 2
~+~
~3 - 24
thousand Audits in
Waterloo Region Each Year
In 1999, Dan Scott and Paul Parker discussed
starting a local initiative under Canada's new
Climate Change Action program. They soon
connected with Ian Rowlands, another professor
in the Faculty of Environment at the University
of Waterloo and Don Eaton at the Elora
Environment Centre. These four: Dan, Paul, Ian
and Don were our first management team.
Don said of the Climate Change Action program:
"They did 1200 evaluations across Canada last
year, but we have 12 million households in
this country!" And his solution: "one thousand
audits in each community every year." By the
end of our first year we were on target, with an
operation run by co-op students. Our next step:
hire full-time staff and build up the organization.
Many forget that when REEP started there were
no incentives. Homeowners paid money just to
learn how to make their homes more energy
efficient. The incentives were added in 2003.
When the program was
first cancelled in 2006,
our municipalities urged
the federal government
to reinstate it. Our
electric utilities stepped
in with funding to help
us continue to evaluate
homes. We were one
of the few organizations
still doing home energy
assessments at the time.
~w i
Zesponding to the
deeds of Our Community.
In 2005 we started getting calls from members
of church building committees who wanted to
make their buildings more energy efficient. We
developed a specialized audit for this purpose.
REEP's founders
with Executive
Director Mary Jane
Patterson. From back
left: Ian Rowlands,
Don Eaton, Dan Scott
and Paul Parker.
After years of providing residential energy
assessments, we realized that we could do more
to remove barriers to energy conservation.
In 2007 we started planning REEP House, our
hands-on demonstration project.
Our focus has remained healthier homes and
sustainable communities and most importantly,
working together with our local funders,
partners and the many community participants.
-Excerpts from Tenth Anniversary Celebration
remarks by Paul Parker, Don Eaton and
Mary Jane Patterson.
Left: Rhonda Moreau of
Kitchener-Wilmot Hydro and
Kitchener Mayor, Carl Zehr
at an early REEP event.
elow: REEP co-op student
Sul Wisken (left) at a
ome energy assessment.
REE P H ou se
for S ustai nabl e Livin
L1 wslt~ng design
Q (] i~aue scace
A community labour of
love: Our many partners
and sponsors brought
layers of expertise and
ideas to help REEP House
emerge on Mill Street in
downtown Kitchener.
The Regional Municipality of Waterloo is like
family. Receptive to the concept from the very
beginning, the Region offered us two century-
old houses, generous in-kind staff support and
funding for energy retrofits.
The Kresge Foundation made it possible for us to
hire innovative green architect Graham Whiting
who has produced two award-winning designs:
^ The 25/50 House at 24 Mill Street:
At a cost of $25,000 we reduced energy
consumption by 50%. Payback, including
reduced bills and increased property value?
Four years.
^ REEP House at 20 Mill Street:
Canada's first LEED Platinum renovated
century brick home, clocking in at a
90% energy reduction with a $200 heating bill.
Where Old is New Again
The City of Kitchener was an early adopter of
REEP House. Through their Local Environmental
Action Fund, they are providing athree-year
commitment to help us take our message to the
public, including website development.
The Ontario Trillium Foundation staff helped us
develop a financially sustainable business model
that places REEP House at the centre of the
green renovation movement. Our services will
connect residents with contractors, suppliers,
lenders, designers and real estate agents.
The Ontario Power Authority's Conservation
Fund will support public tours of REEP House,
our online Sustainable Home Action Plan
software and a learning document that will make
it a snap for other communities to replicate our
one-stop-shopping approach.
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3 - 26
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Creating Local Green Jobs
Ball Construction are midwives to this birth of
Canada's first LEED Platinum renovation. It takes
community contacts, technical expertise and
tender loving care to preserve and restore a
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century brick home while upgrading to near-net
zero performance. Site supervisor Scott Moody
has mastered the balance of old and new.
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Canada`s Economic Action Plan hit us a home
run, touching each base on the way. First base:
immediate local construction employment.
Second base: green technologies and products
on display at REEP House, purchased through
local suppliers. Third base: our Green Retrofit
Workbook connecting homeowners with local
businesses. And home plate:
More jobs and carbon
reductions to come as
homeowners complete
REEP House-inspired
green renovations.
As 2009 drew to a close, our team of local
contractors and suppliers was preparing to
raise the roof at REEP House. We thank them
in advance for all of their donated time and
materials, extra care and dedication.
BRC Mechanical
Brown's Concrete Products Ltd
Drain Power
EcoShift
Finishing Touch
Fred Hunsberger Photography
Golden Windows
Heritage Stoneworks
HydroFlowCanada
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Lutron Electronics Co.
Mark Machel and Associates
Merlyn Power
Radiant Roofing
Reitzel Heating and Air Conditioning
Steve's TV
The Timeless Materials Company
Vanguard Electric
3 - 27
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Expert Advice on Deep
Home Ener~v Savings
We provided 2,240 home energy evaluations
under the ecoENERGY program and 1,329
follow-up visits for those who had completed
their retrofits and wanted to access government
grants. This represents a 30% increase in initial
evaluations and a 99% increase in follow-ups
over 2008!
Two economic stimulus measures contributed
to this year's boom: the Home Renovation Tax
Credit and the 25% increase in both federal
ecoENERGY grants and matching provincial
Home Energy Savings Program grants.
REEP's participants invested $7.9 million on
retrofits, or $6,000 per home*. The average
homeowner reduced energy consumption by
22%*, totalling $1 million in local savings each
year. In 2009 our customers received $3.5 million
in federal and provincial incentives. That's more
than in all previous years combined.
Best of all, participants
reduced 4,359 tonnes*of
carbon. Congratulations
Waterloo Region !
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Number of Evaluations 2009
Initial evaluations 2,240
Follow-up evaluations 1,329
Total 3,569
Economic Benefits 2009
Grants received $3,553,580
Energy savings per year' $996,750
Local spending on retrofits' $7,974,000
Cumulative tonnes of
COz emissions reduced by
REEP customers from
1999 to 2009.
Note: There were few
follow-up evaluations done
in the early years of the
program, which made it
difficult to assess results
during that time.
~ Current Year
~ Past Years
1999-2009
12,018
3,958
16, 003
1999-2009
$5,935,748
$2,988,750
$18,282,000
Environmental Benefit 2009 1999-2009
Carbon emissions reduced" 4,359 tonnes 11,395 tonnes
Energy Advisor Joern Roehl
examines a gas furnace at a
*based on estimates by Natu~esource~~a.
**based on estimates by Ont M str rgy.
A Broad Community Base
for Conservation
At the end of 2009 our mailing list grew to
104 faith communities from Waterloo Region,
and Wellington and Dufferin counties. Of these,
51 have actively hosted events and conducted
energy and water audits of their buildings.
Greening Sacred Spaces attracted 120 hom-
eowners, business owners and faith community
representatives to its first annual Solar Infor-
mation Night, organized in partnership with
Mennonite Central Committee. Results: at least
five residential solar installations in 2009, and
more on the way for 2010. Hillcrest Mennonite
Church in New Hamburg made the decision to
install a 10KW ground-mounted photovoltaic
array with tracker.
Derek Satnil< of Mindscape Innovations discussing the
Green Energy Act at the 2009 Solar Information Night
organized in partnership with Mennonite Central Committi
with a new water heater in the kitchen. It previously tool<four minutes
:o eet hot water from the boiler room.
Our October networking meeting attracted
representatives from 21 faith communities.
Dave Klassen of REEP detailed our energy
audit services for faith buildings. We featured
speakers from the Power Savings Blitz, Region
of Waterloo Water Services and Central United
Church of Stratford, which recouped 100% of
their lighting retrofit costs through the Electricity
Retrofit Incentive Program (ERIP) program.
In 2009, faith communities got on board with
Earth Hour, Earth Day and 350.org and timed
their environmental messages accordingly to
strengthen impact and broaden appeal of their
local campaigns.
REEP's faith building energy audit was featured
in the Mennonite Central Committee's Creation
Care DVD which launched in November of 2009.
3 - 29
~i~lall_mF.Ti
Our Water Guides Helped
Owners Assess 80 Wells
In 2009 the Well Aware program reached 80
properties and hundreds more Region residents
with practical resources that empowered people
to maintain their wells and septic systems,
thereby protecting their families and our com-
mon groundwater resources.
Helping Rural Residents
Protect Our Watershed
We provided additional opportunities for the
public to interact directly with knowledge-
able staff at community forums, displays at fall
fairs and presentations to community groups.
We sent our message across Waterloo Region
through television coverage, newspapers,
newsletters and Internet magazines.
Over the last three years Well Aware has been
funded by the Ontario Ministry of Environment.
The Grand River Conservation Authority and the
Region of Waterloo Public Health Department
have generously donated print materials and
staff support.
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iNatch i ng U rba n Waters
In the fall of 2009 we brought together part-
ners for a pilot stormwater education program
through Green Communities Canada, funded by
the Ontario Trillium Foundation.
Stakeholders were invited to a stormwater tour
of Kitchener, Waterloo and Cambridge, followed
by a brainstorming session on how to best
educate the public on urban runoff,
water conservation and water quality.
Our first public event, held at Kitchener's GTO
Car Wash, showed customers the ecological
benefits of commercial car washes with proper
filtration systems.
Stakeholders included:
^ Brown's Concrete Products Ltd.
^ The Canadian Car Wash Association
^ The cities of Cambridge, Kitchener and Waterloo
^ The Grand River Conservation Authority
^ The Region of Waterloo
^ The Waterloo Stewardship Network
^ Yellow Fish Road
3-30
Irendan Schaefer, Certified Water Guide and Harold Albrecht,
Aember of Parliament for Kitchener-Conestoga,
liscussing the well cap on Mr. Albrecht's property.
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Our 10th Anniversary
On December 3rd, 2009 our commemorative
bash was held at Victoria Park Pavilion. The eve-
ning was complete with live band and delicious
food. Presentations included: awards for eight
REEP Star Homeowners who made exemplary
home energy retrofits; the "Our Green Commu-
nity" panel discussion; and recognition plaques
for our valued local funders. These proceedings
were made possible thanks to support from the
Canadian Mortgage and Housing Corporation.
~~ Our First Annual
Earth Day Eco-Showcase
On April 22 at the Kitchener City Hall Rotunda,
local residents learned how to make their homes
more energy efficient from our guest speaker
Don Eaton, REEP founder and building science
expert. We also featured contractors, eco-
service providers and community organizations
at our information fair. This event was held in
partnership with the Faculty of Environment at
the University of Waterloo.
Outreach to 6,000
Throughout the Region
REEP-organized Events
Earth Day Eco-Showcase
Tenth Anniversary Celebration
Energy Saving Renovation Workshops
REEP House Contractors Open House
Well Aware Information Provider Workshop
Well Aware Community Forum
Stormwater Management Community Car Wash
Solar Information Night in partnership with CREW
~-
~.
Presentations and Lunch'n' Learns:
MCC Solar Energy Information Night
YNCU Should I Stay or Should I Go Green event
Region of Waterloo ECO FEST
ReThink Waterloo workshops and conference
KidSpark children's festival
Canada Revenue Lunch 'n' Learns and Eco Fair
Your Kitchener Market Lunch 'n' Learn
COM DEV Lunch 'n' Learn
GRCA Water Forum, Water Conservation
Workshop and Lunch `n' Learn
Beechwood Park Housing Association presentation
Probus Club presentation
Western Ontario Municipalities Conference
Regional Heritage Advisory Planning Committee
The Working Centre New Green Economy panel
UW Environment and Business Conference
UW Staff Conference
WLU "Reaching In" workshops
Community Events:
Preston High School Environmental Expo
Woolwich Healthy Communities Green Tech Fair
Festival of Neighbourhoods Kitchener Finale
Maplesoft Environmental Fair
CREW Solar Energy and You forum
City of Cambridge City Green Workshop
KW Community Foundation Celebration of Giving
Chamber of Commerce Energy & Env. Forum
Your Kitchener Market Blooming Earth Festival
Waterloo Earth Day
Energy Conservation Week with
Kitchener-Wilmot Hydro & Waterloo North Hydro
Cambridge Home Depot event with Union Gas
WLU Commuter Challenge event
Alternatives Journal concert with Bob Wiseman
GRCA Rural Routes Heritage River event
Laurel Creek Headwaters Association meeting
KW Twin City Home and Garden Show
KW Home and Garden Show
KW Twin City Fall Home and Leisure Show
Wellesley Home and Garden Show
Wellesley Fall Fair
Fresh Ayr Festival
Peter Benninger Coldwell Banker Concierge Show
Heffner Spring Garden and Activities Show
l
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New advisors and support
stafF joined us to meet
ecoENERGY demand.
Certified Energy Advisors: Dave Klassen
(Manager), Chris Albrecht, Jim Carnegie, Scott
Cooper, Bruce Mitchell, Cheong Ng, Kevin Pratt,
Joern Roehl, Steve Royce, Mike Speagle, Kate
Taylor and Colin Umbach.
Water Guides: Susan Bryant and Brendan
Schaefer.
Outreach: Julian Van Mossel-Forrester
(Coordinator), Desi Balbon (Intern), Anne-Marie
Wetter (Intern), and Evelyne Russel (Co-op).
Customer Service: Rachel McQuail (ecoENERGY
Coordinator), Rachel D'Aguilar (Customer Service
Coordinator), Rommy Ibanez and
Tammy Sommerville (Intern).
REEP House: Ben Barclay (Project Manager),
Heather Cain (Community Engagement) and
Cheryl Evans (Outreach Officer).
IT Support: Brendan Schaefer.
Finance/Office Manager: Roxanne Luxton.
Executive Director: Mary Jane Patterson.
REEP Waterloo Region
2009 Annual Report 10
Thank You Interns and
Best of luck to Desi Balbon, Evelyne Russel
and Tammy Sommerville, and many thanks
for being part of our team in 2009!
The end of our first decade is an opportunity to
acknowledge one of our greatest strengths:
our Board of Directors. We are lucky to have their
guidance and enthusiasm on our team.
^ Paul Parker, University of Waterloo (Chair)
^ Geoff Malleck, University of Waterloo (Treasurer)
^ Don Eaton, Elora Environment Centre (Secretary)
^ Jason Ball, Ball Construction
^ Mary-Louise Byrne, Wilfrid Laurier University
^ Michael Duschenes, Perimeter Institute
^ Jenn Lynes, University of Waterloo
^ Kate Neff, Your Neighbourhood Credit Union
Fast ana present
staff, interns and
board members
at our Tenth
Anniversary
Celebration.
3-32
a;•l:
Statement of Revenue and Expenses
Revenue 2009 2008
Client fees $ 891,414 $ 624,669
Grants $ 348,317 $ 258,441
Contracts $ 26,115 $ 35,193
Other Income $ 9,910 $ 4,729
Total Revenue $ 1,275,756 $ 923,032
Expenses 2009 2008
Salaries and benefits $ 946,778 $ 651,942
Quality assurance $ 80,649 $ 57,619
REEP House -construction $ 69,521 $ -
REEP House -design and monitoring $ 16,921 $ 41,001
Outreach $ 36,657 $ 12,078
Occupancy $ 32,019 $ 11,524
Contracted services $ 24,586 $ 14,491
Training and development $ 18,510 $ 5,861
Communications $ 14,052 $ 6,985
Office $ 14,294 $ 4,940
Insurance $ 8,196 $ 5,212
Amortization $ 7,985 $ 5,011
Organizational development $ 5,545 $ 3,099
Travel $ 3,657 $ 3,008
Interest and bank charges $ 2,577 $ 1,147
Total Expenses $ 1,281,947 $ 823,918
Excess of Revenue Over Expenses $ (6,191) $ 99,114
Thanks to the friends and
mentors who contributed
their valuable time, skills
and expertise in 2009.
Revenue Breakdown
0% 10% 20% 30% 40% 50% 60% 70%
Earned
Revenue
Local
Funding
Provincial
Funding
Federal
Funding
International
Funding
Aaron Schwab Photography, www.aaronschwab.com
Stephen Dixon, TdS Dixon Inc.
Jane Lynes
James Malvern, Kay Professional Corporation
John Straube, University of Waterloo and www.buildin~science.com
11
3-33
REEP Waterloo Region
222 Frederick Street
Kitchener, Ontario N2H : REEP was founded by: WATERLOO -,~kA •~',"'.~'t{'t ~~~.
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Telephone: 519-744-975y " '. '
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Fax: 519-603-3453
info @ reepwaterlooregion.ca
www. reepwaterlooregion.ca
REEP is a member of Green Communities Canada,
REEP is a registered charity GI`een ~, a national association of non-profit organizations
i.incler the nai~~e U!ate~luo ~®~ C]'1~ ~ I~ that deliver practical solutions to Canadian house-
holds. Our ecoENERGY and Well Aware programs
are available through this membership.
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