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HomeMy WebLinkAbout2011-02-28 SFINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 CITY OF KITCHENER Present: Councillor J. Gazzola - Chair Mayor C. Zehr and Councillors S. Davey, B. Vrbanovic, Y. Fernandes, K. Galloway, P. Singh, B. Ioannidis, Z. Janecki, F. Etherington and D. Glenn-Graham. Staff: C. Ladd, Chief Administrative Officer D. Chapman, Deputy CAO, Finance & Corporate Services J. Willmer, Deputy CAO, Community Services P. Houston, Deputy CAO, Infrastructure Services C. Smith, Director of Financial Planning R. Regier, Executive Director, Economic Development H. Gross, Director, Project Administration & Economic Investment R. Gosse, Director, Legislated Services & City Clerk M. May, Interim Director, Human Resources S. Adams, Director, Community & Corporate Planning S. Turner, Director, By-law Enforcement M. Hildebrand, Director, Community Programs & Services C. Fletcher, Director, Facilities Management M. Seiling, Director of Building G. Murphy, Director of Engineering J. McBride, Director of Transportation Planning A. Pinard, Director of Planning W. Malcolm, Director of Utilities T. Beckett, Fire Chief D. Murray, Manager, Client Services D. Campbell, Manager, Community Resources Centres D. Keelan, Manager, Acquatics & Athletics K. Kugler, Manager, The AUD & Community Arenas L. Palubeski, Manager, Program & Resources Services R. Hagey, Manager of Financial Planning G. Hummel, Manager, Park Planning, Development & Operations J. Young, Manager, Special Events D. Gilchrist, Committee Administrator J. Billett, Committee Administrator Mayor C. Zehr offered comments at the commencement of this meeting concerning recent media coverage of the budget process and the need for Council to work together in order to achieve the best results for Kitchener. KITCHENER PUBLIC LIBRARY REPORT - PROPOSED OPERATING BUDGET 1. REDUCTION Ms. S. Lewis, CEO, and Mr. D. Carli, Board Chair, Kitchener Public Library (KPL), were in attendance in response to Council’s request to consider up to a 5% reduction in the Library’s 2011 operating budget. Mr. Carli referred to KPL’s report provided in this meeting’s agenda package, stating that in 2010 the book budget was reduced by 11% and staffing was reduced by 4 full-time equivalents. If they are required to cut again this year then services to the public will be affected in terms of the purchase of books and electronic resources and service to the public will also be reduced in terms of hours of operation and other administrative functions. He noted that in tough economic times people turn to the library for many things and advised that there is only one viable option for reduction amounting to $24,600 (0.28%), as outlined in their report. Mr. Carli urged Council to approve the budget as submitted. CREATIVE ENTERPRISE ENABLING ORGANIZATION - ARTS & CULTURE 2. SUSTAINABILITY FUND Mr. R. Farwell, Creative Enterprise Enabling Organization and Mr. G. Remer, Christie Digital, attended in support of a $1.00 per capita contribution to the Arts & Culture Sustainability Fund. Mr. Farwell advised that the Prosperity Council has a 5 point plan which includes: enhancing Regional health care, strengthening post secondary institutions and a creative enterprise agenda. Its aim is to take hold of the future and to create jobs for the future, with one of their functions to ensure the arts and culture sector is funded in a new way and that meaningful work is created for years to come. FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 45 - CITY OF KITCHENER CREATIVE ENTERPRISE ENABLING ORGANIZATION - ARTS & CULTURE 2. SUSTAINABILITY FUND (CONT’D) Mr. G. Remer advised that he supports the Creative Enterprises Enabling Organization (CEEO), noting that he has hired 300 people over the last 3 years and as well, he is a resident and co-chair of Communitech. He also stated that the key issue is attracting talent and the attractiveness of this region to prospective employees, expressing the opinion it is necessary to make the region a more attractive place to live. He emphasized that the creative side of business is important and the integration of arts and business is the hub. The ability to have this interaction is what is important for this region. In answer to questions raised by the Committee, Mr. Remer advised that the CEEO does not take over arts and culture organizations but rather they continue to operate themselves. It is intended that as soon as the new Chief Executive Officer is hired, that person will look across the arts and culture sector to find efficiencies amongst them. He also advised that the CAOs from each municipality are on the board but they have not considered members of Council and he would have to take that to the board for their consideration. Mr. Farwell advised that the City of Cambridge would not be able to make a contribution this year however, the City of Waterloo has approved a full allocation and the Region has included a full allocation in their budget, which has not yet been approved. In addition, the CEEO has received funding from the Trillium Foundation. In regard to sustainable revenue streams, Mr. Remer advised they are seeking investments from the private sector to create avenues for revenue. Mr. Farwell advised that the administrative costs for the CEEO will be $450,000 of which some will be paid from municipal contributions and 50% will come from the private sector. In regard to where funding for arts groups are to go Mr. Farwell advised those discussions have not yet taken place and with respect to the Symphony, the Art Gallery and The Museum, these groups would not likely receive all the funding. He added there has been an advent of a creative organization to foster the best uses of the capital and a collective desire to be examined which was determined through the community consultation process. Councillor P. Singh stated that Kitchener believes in the value of arts and culture but at the same time its residents are facing higher costs. He questioned how the organization would be affected if this Council supports the organization in principle but only provides 50% of the funding requested. Mr. Farwell advised that there would be an immediate impact on the sustainability side of the work and certain programs could not be accomplished. Such an action would also slow the economic returns on investment as part of the outcome is to supply people for the tax base. Councillor Gazzola expressed concerns that the Enabling Organization will operate like the United Way and asked to be provided with a budget for the organization, the results from 2010 and a long term strategy and budget. Mr. Farwell advised that the budget will be the responsibility of the new CEO who will be paid from the funding received from the Trillium Foundation, the municipalities and the private sector. FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS 3. Delegations Ms. A. Mankotia, Kitchener Youth Action Council, was in attendance to request that Council not implement the proposed cuts to the Youth Drop-In and summer playground programs as the benefits these programs provide exceed any financial savings. The summer drop-in program is the only program that provides services for older youth and is an affordable program that substantially reduces the involvement of youth in risk activities. The summer playground programs are of high quality and yet affordable to low-income families and their loss will not only hinder the beneficial results of positive engagement but will also result in the loss of 10 summer student positions. She suggested that in examining and considering the ramifications of their removal and the benefits they provide, it becomes evident that removal of these programs should not be approved. FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 46 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. Ms. M. Patterson, Executive Director and Mr. P. Parker, Board Chair, Residential Energy Efficiency Project (REEP), attended to request continued funding in the amount of $27,500 for 2011 from the City’s Environmental Committee budget. Ms. Patterson provided background information on REEP and its programs including new services to commence in 2011. Mr. Parker stated that they are asking for a small investment that will have big results. He advised that the REEP House for Sustainable Living has caught international attention. He stated that REEP is a strong supporter of some of Council’s policies and that the funding is an investment in local employment which stimulates the local economy. Councillor P. Singh noted that 51% of REEP’s revenue comes from client fees and questioned how that revenue will be affected by the retraction of federal and provincial funding. Ms. Patterson responded that the cutbacks in senior government funding will reduce the number of clients; however, 1,000 people used their services prior to the funding and it is likely that the same number of people will still require their services. With respect to funding from other municipalities, Ms. Patterson advised that they receive funding from the City of Cambridge, the Region and Waterloo North Hydro. Mr. G. Nicholls, resident, attended and circulated a summary of his presentation including replies to the questions he raised at the public budget meeting held February 15, 2011. Mr. Nichols stated that he was not taking a position with respect to the proposed budget but was questioning if Council has enough information, including historical data, to make a sound decision on the 2011 budget. Mr. Nicholls suggested that in reviewing the SWM program in conjunction with the overall City budget, it was his opinion the increase to residents will be 15.6% and 8.26% without SWM. He also pointed out that although there is to be a transfer of $11.3M to capital accounts for the SWM program, he could not see the entry showing the transfer from SWM. Mr. Nicholls pointed out that his previous questions included one regarding the tax increases for the past 8 years in comparison with the Consumer Price Index (CPI) for the same period. He explained that information from the City Treasurer showed a tax increase of 3.08%, whereas the change in CPI was 1.91%, resulting in taxes increasing 61.25% higher than the average CPI increase for the same period. In regard to the SWM fees, Mr. Nicholls advised that he has reviewed the flat rates being applied to the various property categories and calculated that the per square footage fee is less for a large house/business than that being applied to a small house/business. Mr. Nicholls suggested this was inequitable and that one ‘per square footage’ fee be applied to properties. Mr. Nicholls concluded his presentation suggesting that more time is required to review the issues he has raised, before making a decision on the budget. In answer to questions of Councillor Z. Janecki, Mr. Nicholls suggested that the SWM expenditures be returned to the tax base and if not possible, that the fees be based on property assessment which would result in larger properties paying more. Mayor C. Zehr pointed out that there had been public consultation regarding the SWM program over a period of 18-24 months with the facts on the program being provided, including the fee options. He also pointed out that the program will include a credit system that will reduce fees for those property owners who implement measures to mitigate their impact on the storm water system. Councillor S. Davey added that municipal taxation does not take into account the property owner’s ability to pay, whereas the proposed SWM program although not perfect, will be more equitable. Mr. H. Drewitz, resident, attended and circulated a summary of his presentation. Mr. Drewitz suggested that final decision on the 2011 budget be deferred until the questions raised have been answered. He pointed out that no historical budget data or the 2010 actual revenues/expenditures have been included in the material provided to Council and the public. Mr. Drewitz expressed his concerns with the proposed debt levels and the impact this budget will have on those living below the poverty line. FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 47 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. Councillor J. Gazzola advised that the next delegation, Mr. B. Pegg, was no longer in attendance. A copy of Mr. Pegg’s presentation was circulated to the Committee. Mr. Rinze Vanderwerff, Pinegrove Neighbourhood Association, stated that he was in support of the comments made by Mr. Nicholls regarding the SWM program. Mr. Vanderwerff suggested that Council implement a policy so that tax increases do not exceed the CPI rate. Ms. N. Brown, Alliance for Children and Youth, requested that Council keep youth and children issues in mind when making decisions on the 2011 budget. Ms. Brown explained that programs for youth and children are investments in the future as these young people will be the future taxpayers. Reverend James Brown, President, K-W Council of Churches, attended on behalf of area faith communities, requesting that Council continue its commitment to exempt charities and places of worship from the SWM fees. Rev. Brown explained that the added financial burden will cause closure of churches that provide social programs for those less fortunate, as well as community events. He added that places of worship are not businesses being dependent on donations and asked that the SWM exemption not be eliminated. The Committee then recessed at 12:15 p.m. and reconvened at 1:10 p.m. with all members present. Ms. C. Ladd addressed recent comments in the media concerning the budget process, stating that staff remains focused on Council’s direction and mutual dedication to public service. Councillor K. Galloway referred to the written submission circulated this date from Mr. Bill Pegg, area resident, noting that the content of the submission similarly reflects the comments made by Ms. Ladd. 5% Tax Supported Budget Reductions Centre In The Square (CITS) An additional grant request from the CITS in the amount of $87,000., as outlined in Issue Paper #10 of the Operating budget package, is proposed to be eliminated. Councillor K. Galloway questioned the impact if the grant is either not approved or only partially approved. Mr. Jamie Grant, General Manager, CITS, advised that revenue targets have been set to reach certain objectives and the additional funds are needed to implement marketing initiatives geared toward accomplishing those objectives. In addition, collective bargaining agreements are still to be negotiated in 2011. Kitchener Public Library (KPL) Board The Committee was in receipt of a report dated February 17, 2011, submitted by Ms. Sonia Lewis, CEO, KPL, in response to Council’s request for potential operating budget reductions. The report provides options and associated impacts for budget reductions ranging from 0.28% up to 5%, with a reduction of 0.28% ($24,600.) considered to be the only viable option. Councillor D. Glenn-Graham requested clarification of the impact of the Radio Frequency Identification technology (RFID) to labour costs. Ms. Lewis advised that it was never intended that this technology would be used as a cost savings measure in respect to staff reductions. Rather the intent was to enable cost avoidance by negating the need to hire additional staff to manage increasing circulations and growing collections. She added that budget reductions in 2010 have already resulted in some loss of staffing. Office of the Chief Administrator (CAO) Potential reductions include: reduction in capital accounts ($8,000); removal of additional support person for Council ($60,000); elimination of Oktoberfest / Christmas Floats ($15,000); Print Shop efficiencies ($20,000); and Kitchener Market account reductions ($8,500). FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 48 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. Councillor Gazzola inquired if there is room to reduce CAO capital accounts further. Ms. C. Ladd advised that these accounts were carefully scrutinized and no more savings could be found. At the request of Councillor K. Galloway, Ms. Ladd agreed to provide information regarding costs associated with hiring a part-time support person for Council versus a full time position. Councillor P. Singh suggested that a part-time position could also be complemented by a co- op student arrangement. Councillor Galloway inquired if consideration had been given to reducing the size of the Oktoberfest Float. Mr. M. May advised that staff have considered alternatives, but cautioned that a reduced scope may mean the resulting product is not of sufficient quality to make the expenditure worthwhile. Councillor Y. Fernandes questioned the feasibility of the Print Shop providing service to outside organizations to potentially generate new revenue. Mr. May advised that the Print Shop currently provides printing services for minor sports groups, Neighbourhood Associations and partners with the KDBIA. He cautioned, however, that Council must consider at what point the City would be venturing into competition with the private sector and whether or not that is an appropriate direction to go in. Councillor Fernandes suggested that the City needs to take steps to reduce its paper generation. Mr. May stated that paper generation has been substantially reduced, as evidenced by reductions in purchase of paper supplies, which is reflected in the Print Shop’s reduced operating costs. Mr. R. Regier responded to questions concerning proposed reductions to the Kitchener Market operating budget, advising that new revenue growth is beginning to be realized as it relates to use of the newly installed industrial sized kitchen. He suggested, however, that the primary opportunity for new revenue growth lies in promotion and attraction of Corporate events during week days and evenings when the Market is not operating. Councillor Gazzola questioned if the reduction in subsidy to the Market is related to increased fees. Mr. Regier advised that the Market is in the final phase of a graduated fee increase for market vendors and there is potential for additional revenues by increasing the number of market vendors. He added that while it cannot be confirmed at this time, it is anticipated income versus expenses will be in a positive position within the next 5 to 6 years. Councillor B. Ioannidis suggested that instead of reducing the Market funding, these funds should be used to improve the Market’s street visibility through installation of exterior banners similar to that at City Hall. Mr. Regier advised that as part of a new signage program, banners are to be installed this spring with the intent to increase visibility of the Market. Community Services Potential reductions include: elimination of Communities in Bloom ($7,000); elimination of Recreation Program Grant ($13,900); closing of Community Centres during Christmas holiday ($20,000); elimination of Movie Licenses; ($6,000); elimination of Recreational Grants to Neighbourhood Associations ($15,045); closing of 4 Summer Playground Programs ($20,000); reduced Newsletter printing ($7,000); conversion of Breithaupt Community Centre wading pool to splash pad ($11,000); increase in Elderly Persons Centres grants ($54,000); elimination of Summer Youth Drop-in for age 18+ ($4,400); reduced Urban Design capital account ($50,000); eliminate lease of Communication Tower on City buildings ($10,000); adjust Cemetery interest ($46,900); delayed opening of Bridgeport Community Centre ($150,221); and reduced City-run Festivals ($40,000). Regarding Community Centre closings, it was noted that some already close during the period between Christmas and New Years and it is now proposed to formalize closing across all Community Centres. Ms. D. Campbell advised that part-time staff operate the Centres that currently open during the holidays and the proposed closings represent cost savings of approximately $1,500. per Centre. Ms. Campbell agreed to provide statistics on number of users for those Centres that remained open in 2010. Councillor B. Vrbanovic questioned if FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 49 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. consideration had been given to closing City Hall during the same timeframe. Ms. C. Ladd advised that discussions have been undertaken in the past and in addition to any cost savings, there are other issues to consider in respect to having to negotiate with the Unions; particularly, on the issue of use of staff vacation or lieu time to cover the time off. She suggested that there is sufficient time this year to undertake negotiations with the Union and agreed to provide projected savings related to closing of City Hall during the holiday season. Councillor Gazzola questioned the feasibility of having volunteers operate the Centres during the holiday season. Ms. Campbell advised that typically volunteers do not want to work during this period, desiring time with their families, and staff would have concerns of putting volunteers in the position of having to respond to accessibility and safety issues. In response to questions, Ms. Campbell explained that Movie Licenses are obtained through contract with a third party provider and are required in order to show movies at Community Centres. The license fee is per facility and is the most cost effective means to provide this service as purchasing on an as needed basis is much more expensive over an annual license fee. In regard to Recreational grants to Neighbourhood Associations (NA’s), Councillor F. Etherington asked if any of the programming involves subsidies for low income families. Ms. Campbell advised that the City asks NA’s to consider some sort of fee assistance for their programming. In addition, these grants benefit in development of youth programming which is one of the City’s target areas. In regard to playground programming, Ms. L. Palubeski advised that the 4 programs referred to are those that have experienced a decline in attendance and of the 860 spots to be decreased, approximately 400 were used in 2010. Mayor C. Zehr questioned if printing of newsletters is equitably distributed across NA’s. Ms. D. Campbell advised that all affiliated NA’s are eligible, with the number of pages printed geared toward their programming needs. Mr. M. May added that on average 2 NA’s do substantially more printing and agreed to provide statistics for all NA newsletter printing. Councillor Galloway questioned if a shift toward social media is evident. Ms. Campbell advised that a number of NA’s have their own websites and/or blogs and links are provided through the City’s website. Councillor Vrbanovic suggested that the volume of printing is dependent on the geographic boundary a NA serves. Mr. J. Willmer pointed out that what is proposed is a reduction in the number of pages printed and/or the number of times newsletters would be printed annually. He added that some may require more because of the population they serve; however, he noted that the proposed reductions while they would affect some may not affect others at all. Councillor J. Gazzola questioned if the conversion of the Breithaupt Park wading pool to a splash pad might be viewed as a reduction in service. Mr. M. Hildebrand suggested it may as this is a significant feature of the park that many come to use. Councillor K. Galloway questioned if there may be impact in 2012 by including the proposed increase in the Elderly Persons Centres grant. Mr. J. Willmer advised that there is some risk involved in that there is no guarantee the Ministry of Long Term Care will sustain this level of grant from year to year. Ms. Palubeski responded to questions concerning the Summer Youth Drop-In program for ages 18+, advising that costs to run the program include 2 part time staff, 3 days a week for 7 weeks, plus such things as equipment and maintenance. Councillor Gazzola questioned if these programs could operate as a drop-in without supervision. Mr. Hildebrand stated that the City has a responsibility to provide a safe environment for youth and to ensure behaviour management is followed. He added that he would have concerns with placing this responsibility on volunteers. Mayor C. Zehr requested clarification as to funding already committed under the Urban Design capital account for the Fairway Road extension and the impact the proposed reduction would have on this project. Mr. A. Pinard advised that some commitment has been made but a specified dollar amount has not yet been defined pending design completion. He suggested FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 50 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. that staff can work with the remaining balance plus additional future contributions to the account. Councillor D. Glenn-Graham asked if there is potential for private sponsorship of public furnishings. Mr. Pinard advised that the program does not preclude private sponsorship which is an objective of the program. He advised that no projects have been partnered as yet with the private sector; however, partnerships have been entered into with the Region of Waterloo and School Board. Councillor Etherington inquired as to the remaining balance and Mr. Pinard advised that the account has approximately $200,000 remaining. In respect to a lease for a telecommunication tower, Mr. J. Willmer advised that this is a potential revenue stream but cautioned that any revenue has to be factored in with net costs to Facilities Management. Mr. Pinard advised that the City has been approached to enter into a lease arrangement to place a tower at the Sportsworld arena. Ms. C. Fletcher advised that she could not define risks to the City facility at this time as the specifications for the proposed tower installation have not yet been reviewed. Mr. D. Chapman commented that this is a small provision proposed for reduction that could be decided on now and staff could report back at a later date with more information on what is involved in entering into this type of leasing arrangement. Councillor Z. Janecki requested clarification of the savings related to delayed opening of the Bridgeport Community Centre. Mr. D. Chapman advised that the original operating budget assumed 9 months of operation in 2011, with the Centre scheduled to open in April. A delayed opening to October results in only 3 months of operation in 2011 and therefore, provides a savings equivalent to 9 months of operation. The additional 9 months of operation, however, will be reflected in the 2012 budget when the Centre becomes fully operational year round. Councillor J. Gazzola questioned the potential to acquire private sponsorships for City-run festivals. Mr. J. Young advised that staff currently meet with organizers of the festivals to look at opportunity to garner sponsorships and/or grant funding. Mr. Young added that the original costing for each of the 2 festivals targeted for reduction is approximately $60,000 per festival. These are proposed to be scaled back to achieve a savings of $20,000 per festival, with the intent to adjust the timing and scope, as well as pursue alternatives for marketing the events. Finance & Corporate Services Potential reductions include: elimination of part-time wages in Purchasing ($14,155); elimination of Environmental Committee grant to the Residential Energy Efficiency Project [REEP]($27,500); and reduction from Computer / Telephone Reserves ($50,000). Councillor D. Glenn-Graham questioned the feasibility of an incremental amount of $25,000 from the Computer / Telephone Reserves as opposed to $50,000. Mr. D. Chapman advised that he would look to Council for direction, pointing out that the level of reduction recommended by staff ensures a significant enough provision so as to achieve real savings to the tax levy. Infrastructure Services Potential reductions include: reduction in service level for turf cutting ($114,000); reduction in service level for sportsfield maintenance ($49,000); cease operation of City Hall fountains ($7,000); closure of Rockway fountain ($23,000); reduced season for Outdoor Pools - Kiwanis ($17,550); reduced season for Outdoor Pools - Other ($30,000); elimination of SWM charitable organization exemption ($150,000 - $300,000); reduction to Engineering capital accounts ($314,900); Parking - deferred implementation of Transportation Demand Management and Cycling Master Plan ($250,00 - $493,894); delayed opening of McLennan Park ($90,333); and closure of Other Decorative Fountains ($50,000). Mayor C. Zehr advised he could not support a reduction in service for turf cutting as this is a significant issue among citizens, both from an aesthetic point of view, as well as a safety aspect. In response to Councillor Y. Fernandes, Mr. G. Hummel advised that the City is responsible for turf cutting for parks, boulevards and City facilities and currently has a program for citizens to FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 51 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. assume cul-de-sac maintenance with a budget of $15,000. The program is advertised and citizens may make application to a maximum amount of $1,000 toward natural planting of a cul-de-sac. They then become responsible for its maintenance; however, past experience indicates most do not want to take on the responsibility and ultimately the City has responsibility to ensure cul-de-sacs are maintained. Councillor P. Singh inquired as to the potential to have the cul-de-sac program administered through Neighbourhood Associations and Mr. Hummel agreed to pursue this suggestion. Councillor Z. Janecki inquired as to arrangements with School Boards for cutting park land near school yards and Mr. Hummel advised that the City has reciprocal agreements with the School Boards. Councillor Janecki inquired if the reduction is more for passive parks than sportsfields and Mr. Hummel agreed that it is more related to passive recreational park land wherein grass heights may now be left to reach 6” rather than 4 or 5” before being cut back. Councillor D. Glenn-Graham inquired if any maintenance savings related to artificial turf are built in to the proposed reductions for sportsfields. Mr. Hummel advised that it is not built in, with those savings to address any of the “B” fields (soccer / field hockey), playing fields, as well as ball diamonds, grass cutting and lining opportunities. Ms. P. Houston added that any savings accrued from artificial turf installations is earmarked as part of the payback on the capital investment over the first 10 years and therefore, must be kept in the budget. Councillor J. Gazzola questioned if any additional dollars have been added to the sportsfield/turf maintenance budget for growth. Ms. Houston advised that no additional dollars were added to Operations budget for turf maintenance but rather an issue paper was provided as an add item. The allocation to service growth that was provided in the budget was a catch- up to meet budget over-expenditures, and does not address any of the service changes being considered. Regarding the fountains, Ms. C. Fletcher advised that it is proposed to decommission 4 City- run fountains at Rockway, as well as, the City Hall fountain; however, the City Hall pond will continue to re-circulate and be treated. She noted that concerns of interested parties has been raised in regard to closing fountains at Rockway and pointed out that the closings are not related to any revenue or program but simply result in facility savings. Councillor Glenn- Graham questioned if consideration has been given to licensing photographers using the park setting at Rockway for photo shoots. Ms. Houston advised that this has been proposed to the Horticultural Society; however, the challenge is in how to enforce licensed use of a public open space. Councillors F. Etherington and P. Singh spoke in favour of maintaining operation of some fountains at Rockway as it is an entranceway to the City. Councillor B. Vrbanovic questioned the amount of savings if a consistent approach to opening Outdoor Pools was applied between June 25 to September 5. Ms. D. Keelan agreed to provide a figure based on 2010 usage. Mr. M. Hildebrand commented that the staggered approach was used due to the popularity of the Harry Class Pool, which under the proposed opening later in June would have greater community impact. Councillor Janecki questioned the feasibility of opening Kiwanis and other outdoor pools only during weekends for the first few fair weather weeks. Ms. Keelan advised that this could impact rental revenues; particularly, at Kiwanis which is specifically used by school groups throughout the month of June. Councillor J. Gazzola questioned the feasibility of applying the SWM exemption for charitable groups and places of worship to the user rate system rather than the tax base, so residential and non-residential users pay the cost of the exemption. Mr. G. Murphy advised that staff was directed by Council to provide the exemption as a grant and it was clearly stated at that time that it would be borne by the tax base because cross subsidies in the rate system are not permitted and to ensure the rate base is protected from legal challenges. Councillor J. Gazzola questioned under what legislation cross subsidization is governed. Mr. Murphy advised that the authority is vested in the Municipal Act and agreed to provide a copy of the relevant legislation. In response to Councillor Singh, Mr. Murphy further clarified that there is no rationale from a utility aspect that can be used to apply the exemption to the user rate system. FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 52 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. Councillor F. Etherington commented that he would like to see a credit program for charitable groups and places of worship, whereby those who actually engage in charitable works could apply to receive an exemption and all others would be non-exempt. Councillor S. Davey inquired if there is any incentive for them to improve storm water management on their property; and if it is possible to give exemptions for mitigating circumstances on a case by case basis. Mr. Murphy advised that there is no incentive available to them at this time and initially, the intent has been to provide the exemption as seamlessly as possible to allow the grants to flow through to these properties. He suggested that there is value in considering a phasing out of the exemption over a period of time and encouraging them to move toward best management practices. Councillor Singh questioned the feasibility of deferring the fee until they can take appropriate steps that would automatically make them eligible for credit, while those who do not take advantage would be subject to the user rate. Mr. Murphy stated that he would look to Council for direction but suggested that additional options be included in a report to come forward later this year as part of development of a credit policy. He added that phasing out over 3 to 4 years would enable this group to undertake best management practices; however, he noted that not all have adequate space to implement SWM practices and there will be varying challenges from property to property. Mayor C. Zehr commented that it would be helpful to have a system in place, whether phasing out the exemption or a credit policy; however, he suggested that a staged approach be taken. He pointed out that much of 2011 will be taken up in development of a credit policy for the residential sector and he did not want the issue of charitable groups / places of worship to delay completion of the policy. He suggested that in 2013 when the program is reviewed, and potentially an entirely different system introduced, would be the appropriate time to revisit the issue of charitable groups and places of worship. Councillor K. Galloway commented that notwithstanding the need for an exemption given competing factors affecting their financial positions, there is still a desire to have all engaged in environmental stewardship. She stressed the need to strongly encourage charitable groups and places of worship to do all that they can to decrease their storm water impact. Mr. Murphy advised that staff is working with REEP to develop an educational program on SWM best practices, that will include focus on charitable groups and places of worship. Councillor B. Vrbanovic suggested that the transition for this group needs to happen in dialogue with them, through a phased-in approach that would include eligibility for rebates, so that SWM practices become a business decision and over time they can build funding into their budgets for that purpose. Councillor K. Galloway questioned the implications of the first 3 accounts, under reductions proposed from Engineering capital accounts, which all refer to sidewalk repairs. Mr. G. Murphy advised that some funding from these accounts has been redirected to sidewalk repair which is another issue paper for consideration, together with other additional reductions. The intent is to protect the interests of the sidewalk repair budget by transferring funds in from those 3 accounts while offering additional reductions from the accounts. These accounts are legacy accounts that in the past were more heavily used but now there is more structured programming and some types of activities are covered off under other capital programs. Councillor Galloway questioned if the removal of funds from these accounts will impede ability to address the backlog and Mr. Murphy advised that with the transfer of these monies they will be able to continue to address the backlog. Mayor C. Zehr questioned the impact of the proposed reductions related to new sidewalk extensions. Mr. Murphy advised that this program is directly related to achieving the objectives of the City’s Pedestrian Charter and the reductions will put the City further behind in achieving its goals. Mr. Murphy agreed to provide a list of areas where sidewalks are missing, noting that there is currently a 27 year backlog in sidewalk extensions. Councillor Y. Fernandes questioned the impact of reductions proposed for Carson Avenue (Natchez to Confederation). Mr. Murphy advised that the scope of work is proposed to be reduced to surface reconstruction only, with other work such as sidewalk and curb repairs to be considered in conjunction with future capital projects. Mr. Murphy also clarified that these are not provisional items but rather very specific projects with specific goals and objectives. FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 53 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. Councillor Z. Janecki requested clarification of reductions and increases proposed related to traffic calming. Mr. Murphy advised that the increase relates to a request of Councillor Galloway for which an issue paper has been prepared. The reductions are in response to Council’s request; however, he pointed out that any reductions would work against the goals of traffic calming as set now. Ms. P. Houston spoke to reductions concerning Parking operations, advising that staff is proposing Alternative 3, as outlined in Issue Paper OP-32. This provides maximum benefit for reduction to the tax levy; however, it means the Transportation Demand Management (TDM) and Cycling Master Plan (CMP) initiatives will not be developed in 2011. Councillor B. Vrbanovic requested clarification as to the proposed staffing. Ms. Houston advised that the proposed alternative provides for six months salary for the Parking Manager but eliminates the TDM Co-ordinator and Transportation Planning Program Manager positions for 2011. Councillor Vrbanovic inquired as to the feasibility of combining the proposed Manager position with an existing Supervisory position and creation of a junior position to take on some of the more minor responsibilities. Mr. J. McBride advised that a number of staffing options were reviewed and the Manager position was determined a priority need from an operational aspect. The Manager will oversee all parking facilities and must be capable of dealing immediately with operational issues. As well, the Manager will be involved in developing programming, policies and strategic directions, working at a higher level and Mr. McBride expressed the opinion that there is more than sufficient work to support this position. He advised that he could not define what a combined Supervisory / Manager position and junior position would look like without further review and consideration of the implications. Councillor Y. Fernandes suggested that a student could be recruited, either as part-time or as a 4 to 8 month co-op arrangement, to work with the Cycling Advisory Committee to advance initiatives of the CMP. She asked that staff provide information on how this would look. Mr. J. McBride advised that the TDM and CMP programs are long term initiatives involving policy development that would not lend itself to a part-time or co-op term but rather requires the continuity and experience of a full time position. The Committee then recessed at 4:10 p.m. and reconvened at 4:30 p.m. with all members present. Ms. C. Ladd referred to the request of Councillor Fernandes for information on recruitment of students for the CMP, advising that it is unlikely sufficient details can be pulled together in time st for the March 1 budget deliberations. She agreed that smaller steps could likely be taken to achieve some gains in the near term but the details may have to come at a later date. Councillor Gazzola requested that an estimated cost be derived that could be included in the budget and refined, if needed, at a later date. General Potential reductions include: increased Gapping ($0 - $175,000); reduced Fringe ($180,000); reduction in allocation for EDIF ($250,000 - $500,000); increased transfer from Hydro Capital Investment Reserve ($150,000); reductions or elimination of Recognition Reception ($4,000 - $25,000); reduction to Advertising and Publicity ($36,000); reduction or elimination of the additional grant request from Centre In The Square ($0 - $87,000); reduction to Staff Recognition Event ($6,000); adjustment or freezing of Management Salaries (Grade 12 and st up); increase to User Fees of 1% to 2% effective July 1 ($100,000 - $200,000); reduced General Provisions ($0 - $275,000); reduction to Tax Stabilization Reserve ($500,000 - $750,000); and increased transfer from Gas Utility ($0 - $400,000). Councillor P. Singh asked if Gapping could be increased further to $300,000. Mr. D. Chapman pointed out that the Gapping account had a deficit in 2010 of $1.5M. He reiterated that the trend in staff turn over has steadily declined over the past 3 years and while the City can make the period of 12 weeks gapping mandatory, there would be impacts to service delivery; and if it is a revenue generating position, it would create a ripple effect elsewhere. Councillor J. Gazzola questioned if the timing of transfer to a new benefit carrier could be st accomplished sooner than July 1. Mr. M. May advised that an earlier date is not possible if FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 54 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. the contract is awarded to any company other than the current provider because of the complexities that would be involved in transitioning to differing technologies used by a new provider. Mayor C. Zehr inquired as to the timing of the tender award and Mr. May advised that it is anticipated a recommendation will come forward for consideration in early April. Councillor P. Singh inquired as to the feasibility of using the surplus from the Economic Development Investment Fund (EDIF) to fund the Arts and Culture Sustainability Fund (ACSF). Mr. D. Chapman advised that the intent of the creative enterprise initiative is to provide stable funding and with EDIF to sunset in 2014 it could provide funding over the next 3 years at which time funding would have to revert to the tax base. He pointed out that when EDIF sunsets in 2014 there is a significant levy reduction of approximately 1.94% so there would be opportunity to transfer funding to the operating budget at that time. Councillor Vrbanovic agreed with this suggestion, commenting that either the full amount could be allocated again over the next 2 years or a phased approach could be taken in respect to the tax levy. Councillor Z. Janecki inquired if there would be impact to existing projects to be funded by EDIF and Mr. Chapman advised there would be no impact to projects, only to the surplus amount. Councillor J. Gazzola inquired if there is room in the Capital Forecast to fund the KPL project rather than fund it through EDIF so that interest on the debt service for this project could be saved in the long term. Mr. Chapman concurred that interest savings would be achieved over the long term under this approach; however, he pointed out that there would be no impact to the 2011 tax levy as the debt service charges are not scheduled to begin until 2012. Councillor Y. Fernandes inquired as to the feasibility of increasing the transfer from the Hydro Capital Investment Fund (HCIF) to $200,000. Mr. Chapman advised that it could be supported in the near term; however, the amount must be sustainable over the 10 year forecast. He noted that there is indication Hydro’s net income and associated dividend will decline over the next 4 years, resulting in some risks associated in increasing the dividend amount in the City’s forecast. Councillor Fernandes inquired why it must be built in over the 10 year forecast rather than in isolation over 2011 and 2012. Mr. Chapman advised that if not built in over the 10 year forecast there will be direct impact to the 2012 tax levy. Councillor Gazzola suggested that it could be done in 2011 and figures revert back in 2012 recognizing the impact into the next years levy. Mr. Chapman responded that the risks of an additional $50,000 is modest but suggested anything significantly beyond that would have far greater impact. Mayor Zehr suggested that the figure be derived at $200,000., suggesting the risk is essentially mitigated by 2016-2017 at which time it could be phased back. He did agree, however, that anything beyond $200,000 would not be sustainable over the longer term and would not support a higher amount beyond that level. Councillor Z. Janecki advised that he would like to see the dinner reinstituted for long term employee recognition and asked that a dollar value be provided. Councillor B. Ioannidis agreed that this is an area where it is prudent to give something of more quality and would like to see more funding, expressing the importance of instilling in employees a feeling of excitement and pride in their work. Councillor D. Glenn-Graham asked for a breakdown of costs for the long term service group of 15 to 20 years. Councillor F. Etherington disclosed a pecuniary interest in respect to the proposed reduction to Advertising and Publicity as he receives income from one of the City’s primary advertising venues. Councillor Z. Janecki requested a breakdown of costs between newspaper and radio advertising. Mr. May advised that would present a challenge in that, radio is primarily used for enterprise promotions, but did note that whether the City uses the The Record or a community newspaper, newsprint is less expensive than radio. Councillor Y. Fernandes suggested the reduction should be increased to 20%, suggesting there is ample opportunity to reduce advertising costs through use of social media and the internet. Mr. May responded that the City has done well in respect to social media; however, surveys indicate that newsprint and radio are still the top methods from which the public chooses to get their information. Councillor Galloway inquired if the impact of social media has acted in part as the catalyst for the proposed reduction. Mr. May advised that when the Communications Strategy was brought forward it was made clear that a balanced approach to communicating with the public FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 55 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. is necessary and while on-line communications have been ramped up there are still those in the community who do not have access to the new technologies and/or choose not to use these tools. Councillor S. Davey inquired as to the percentage attributed to legislated advertisements. Mr. May advised that he did not have statistics in this regard but most would be large ads that require specific content related to such matters as governed by the Planning Act and Municipal Act, among others. Mr. May added that the legislation requires this type of advertising to be done in a local newspaper having the largest general circulation in the community and Legal staff have advised that The Record must continue to be used at this time for this type of Your Kitchener advertising. Councillor B. Vrbanovic suggested that the City’s newsletter would be more widely read if delivered by Canada Post rather than included with delivery of flyers which often end up in a recycling bin without having been looked at. He suggested that more dollars may need to be invested in this area. Mr. May stated that he could not disagree that delivery by Canada Post may be more effective; however, in respect to tendering for delivery, The Record’s bid was for a few thousand dollars whereas, Canada Post was tens of thousands more; the higher costs of which cannot be justified. Councillor B. Vrbanovic commented that staff wages is an area that needs to be looked at but suggested a complete wage freeze of management salaries may not be appropriate. He cautioned that this is the group which will be asked to do more and while union staff is eligible for overtime and/or time-in-lieu, this group is not. Councillor Singh did not disagree, however, suggested that if this is the year reductions are needed then this must be considered and reductions made. Councillor Fernandes referred to job losses in the community, expressing the opinion that City staff has not been impacted as much in wages and benefits as that of the private sector. Councillor Davey commented that any reductions concerning staff wages should not be seen as a reflection on staff performance but rather he suggested there is a need to pare the public sector with what is happening in the private sector. Mayor Zehr stated that he would have difficulty with a total freeze given concerns raised in regard to compression of wages. He pointed out that many staff will be in a position to retire in the near term and a regression in salaries will impact incentives for potential successors within the organization. Councillor D. Glenn-Graham agreed that there is some disconnect between the private and public sectors, advising he could not support the full 2% cost of living increase for staff and also suggested that Council wages should be frozen. Councillor F. Etherington agreed that a middle ground for staff salaries should be strived for and Council wages frozen, together with other reductions proposed that have impact to Council. Councillor F. Etherington suggested that there is opportunity for new user fees in respect to use of City parks, and in particular Victoria Park, for certain types of users and events. Councillor D. Glenn-Graham stated that he was comfortable supporting an additional increase up to 5% for user fees as this is an area that relates to a direct benefit to those in the community opting to take advantage of certain services and there are programs in place to assist low income families. Councillor S. Davey agreed that this is a smart way to alleviate some of the tax levy impact as the consumer has a choice to either make use of the service or not and would support up to a 5% additional increase in user fees. Mayor Zehr questioned that if an increase is approved if it would apply to all fees, given some were already increased beyond the budget target amount of 3%. Mr. D. Chapman advised that the majority are in the area of recreation and parks but there are also some engineering fees to be adjusted. Mayor Zehr advised he could not support a further increase in 2011 as user fees were already dealt with and approved, in consultation with all user groups. He suggested that to make further adjustment now may be construed as acting in bad faith and pointed out that user fees have been increasing regularly beyond the rate of inflation. Councillor Y. Fernandes commented that she viewed the General Provisions accounts as “rainy day” funds and was prepared to support a 5% reduction rather than 3.8%. Mr. D. Chapman advised that there are no reductions in some instances as they represent a very small portion of the overall funding allocations and to institute a 5% reduction overall would have significant impact. He added that these accounts are not “rainy day” but rather these are detailed projections tied to specific work plans. Mayor Zehr commented that he had reconciled to some reduction in these accounts but agreed they should not be looked upon as “rainy day” FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 56 - CITY OF KITCHENER FCS-11-036 - 5% TAX SUPPORTED BUDGET REDUCTIONS - ISSUE PAPERS (CONT’D) 3. accounts given the City has significant capital assets to maintain. He noted that these funds are used to avert major disasters and suggested that going beyond what is proposed presents too much risk. Ms. C. Fletcher reminded the Committee that $500,000 was taken from these accounts in 2010 and another $900,000 is now proposed, equating to a reduction of $1.4M over 2 years. She pointed out that the normal life cycle of a roof is 20 years but replacements are now on a 36 year cycle and raised concerns that the City will not be able to keep up with needed maintenance. Councillor Gazzola asked if there is currently funding in the roofing account. Ms. C. Fletcher advised that the account ended 2010 at $249,000 but there is a $215,000 encumbrance pending against that amount. Councillor J. Gazzola suggested that given a zero surplus was originally projected for the Tax Stabilization Reserve Fund, the entire $875,000 surplus now being realized could be taken out and the fund be no worse off. Mr. D. Chapman reminded the Committee that the City has had to mitigate deficits 3 years running and there is no indication a surplus will be realized at the end of 2011. He suggested that removal of the entire 2010 surplus will have impact in 2012 and reminded that overall Reserve Fund balances are well below the benchmark target of 5 - 15% set by the Government Finance Officers’ Association. This meeting temporarily recessed at 6:10 p.m. in response to a fire alarm in the building and reconvened at 6:21 p.m. with all members present. Councillor J. Gazzola inquired if there was any flexibility regarding the $6.302M transfer to the Reserve Fund in the Gas Works Utility. Mr. Chapman advised that Issue Paper OP-34 provides information on the dividend from the Gas Utility and in his opinion, the dividend to the Reserve Fund could be increased by $400,000. Councillor K. Galloway asked if it can be assumed that Council is working with a total of $10M from a combination of the bottom lines for the Gas Works Utility ($7.83M) and Gas Capital Investment Reserve Fund ($2.46M). Mr. Chapman stated that for purpose of achieving a tax levy reduction it would come down to the projected balance in the reserve, noting that any retained earnings in the gas delivery operation reflects the working capital for the Utility. Mayor C. Zehr requested clarification of the water and sewer rates at it relates to the number of km the City is able to address under the Accelerated Infrastructure Replacement Program. Mr. D. Chapman advised that the 6.9% rate for water provides for only 16 km of the 51 km deficit to be completed on an accumulative basis over the next 4 years (2011 to 2015). At the request of Councillor J. Gazzola, Mr. D. Chapman agreed to provide a breakdown of expenses covered under “Other” in the chart contained in Issue Paper OP-36 (Storm Water Utility) relative to Storm Water Activities in 2011. FCS-11-043 - STIMULUS PROJECT EXTENSIONS 4. The Committee considered Finance and Corporate Services Committee report FCS-11-043, dated February 25, 2011 concerning execution of any required amendments to the Infrastructure Stimulus (IS) Agreements and Recreational Infrastructure Canada (RiNC) Agreements to address any extensions that may be given under these two programs. Mr. D. Chapman advised that all of the extensions for the RiNC projects have been approved and staff has received informal notification that extensions for the IS projects have also been approved. On motion by Councillor K. Galloway - it was resolved: “That the Mayor and Clerk be authorized to execute any amendments that may be required to the Infrastructure Stimulus Agreements and Recreational Infrastructure Canada Agreements to address any extensions that may be given under the respective programs, said amendments to be to the satisfaction of the City Solicitor.” FINANCE AND CORPORATE SERVICES COMMITTEE FEBRUARY 28, 2011 - 57 - CITY OF KITCHENER ADJOURNMENT 5. On motion, this meeting adjourned at 6:40 p.m. D. Gilchrist J. Billett R. Gosse Committee Administrator Committee Administrator City Clerk