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HomeMy WebLinkAbout2011-03-01 SSPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 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 J. Evans, Director of Revenue C. Smith, Director of Financial Planning B. Johnson, Director of Accounting R. Regier, Executive Director, Economic Development H. Gross, Director, Project Administration & Economic Investment R. Gosse, Director, Legislated Services & City Clerk J. Witmer, Director of Operations 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 L. Gordon, Director, Supply Services M. Seiling, Director of Building M. Grummett, Director, Project Integration & Coordinator G. Murphy, Director of Engineering J. McBride, Director of Transportation Planning A. Pinard, Director of Planning D. Miller, Director of Fleet W. Malcolm, Director of Utilities K. Baulk, Director of Enterprise R. Bunn, Director, Information Technology / Chief Information Officer T. Beckett, Fire Chief J. Ham, Manager, Database Administration & GIS D. Murray, Manager, Client Services B. Korah, Manager, Development Engineering K. Kugler, Manager, The AUD & Community Arenas R. Hagey, Manager of Financial Planning G. Hummel, Manager, Park Planning, Development & Operations J. Billett, Committee Administrator C. Goodeve, Committee Administrator The purpose of this special meeting was to give final consideration to the 2011 Operating and Capital Budgets and the 10-Year Capital Forecast 2011-2020. It was noted that any recommendations from the Committee this date would be considered at the special Council meeting to be held immediately following this meeting. FCS-11-037 - 2011 FINAL BUDGET DAY 1. The Committee was in receipt of Finance and Corporate Services Department report FCS-11- 037, dated February 18, 2011, concerning the City’s 2011 Operating and Capital budgets, together with budget issue papers for specific items. BUDGET OVERVIEW Councillor J. Gazzola provided opening comments on the decision-making process to be followed today to reach a final tax levy. He acknowledged the formidable task ahead and complimented staff on the work done to date to respond to the many questions asked and providing valuable information to Council in response to those questions. He commented on the need to remember sustainable changes are important but to not lose sight of the fact that the present requires attention also. Councillor P. Singh declared a pecuniary interest regarding road improvements listed in the Capital Forecast for:Stirling Avenue (p. 195); Walnut Street (p. 196); Lydia Street (p. 205); SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 59 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. and, Andrew Street (p. 207), as his family has interests in properties located in these areas. He requested that these matters be voted on separately. Councillor B. Vrbanovic commented on the budget process being reflective of the strategic visions put forward by citizens as part of the 2009 Environics survey. The survey found that 81% of residents felt that the City was heading in the right direction with a large percentage of them preferring higher taxes to ensure a good quality of life for the community. Councillor P. Singh agreed with comments made as to the difficulty of the budget process and the challenge of finding a balance between reducing the tax burden and planning for the future. He stated a commitment to make any required budget cuts to achieve this balance. Mr. D. Chapman then began an overview of the 2011 budget, including: economic context; staff’s approach to the 2011 budget; Kitchener’s competitive position; funding requests from Boards; enterprise and tax supported operating budgets; capital budgets; debt and reserves; and, proposed budget reductions. Informational graphs depicting inflation (CPI and MPI) vs. tax rates over a 5 year and 10 year cumulative were shown. In both instances, tax increases were plotted including and excluding the Economic Development Investment Fund (EDIF). A comparison of typical residential property taxes was provided which compares 2010 property th taxes among municipalities with populations greater than 100,000. Kitchener is ranked 6 lowest with an average $2,810. per household in comparison to the average of $3,256. In addition, household comparisons demonstrating property taxes as well as utility costs for each city within the Region of Waterloo were shown. Councillor J. Gazzola questioned why the effect of utility costs has not been reflected in previous years as part of the tax impact. In 2011, this amount is shown but does not allow for an accurate comparison to past years. Mr. D. Chapman advised that this information has historically been provided to Council in the three-City comparison, and that the 2011 budget impacts have been included for 2011 as a result of the restatements affecting all taxes and utilities related to the SWM transfer. Councillor J. Gazzola commented that the proposed tax levy of 1.94% as stated by staff does not reflect the actual increase for the average homeowner, being 8.95% if the Stormwater Management (SWM) shift is restated in 2010 or 8.37% if it is not included in 2011. Mr. D. Chapman confirmed that these calculations are correct and that figures have been restated to explain the impact of the new SWM rate compared to the 2010 budget. The bottom line increase is the same at $169. per household under either scenario. Councillor Y. Fernandes commented that homeowners want to know the impact of tax increases and SWM fees only as they can control other utility costs as required to offset financial impacts. Mr. Chapman continued his overview with information on change detail for the 2011 tax levy, current unfunded items and their comparable increases, a comparison of FTEs over the past five years and a list of new FTEs tied to various budget items. Councillor B. Vrbanovic asked if physician and specialist recruitment, listed on the unfunded items list ($20,000) could be funded through the Economic Development Investment Fund (EDIF) and was advised that there is capacity to do that. In response to the slides outlining staff FTEs, Mr. M. May will provide Council with information on the current number of full and part-time FTEs in the organization. Mr. D. Chapman then reviewed the 10-year tax rate impact projection, pointing out that there is a levy reduction when EDIF concludes in 2014 and that in 2020 further levy reductions are forecast as EDIF debt will begin to be retired at that time. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 60 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. BOARDS Centre In The Square Mr. Chapman reviewed the 2011 budget for the Centre in the Square, noting a 9.04% increase due to an inflationary increase of 2.5% and an additional grant request of $87,000. equating to 6.54%. He advised that the additional request is to allow for the hiring of a special human resources consultant to assist with an anticipated difficult contract negotiation and to cover costs for an additional marketing initiative in 2011. Councillor B. Ioannidis expressed support for the funding request noting the importance of the Centre in the Square to the community. Councillor P. Singh also expressed support for the Centre in the Square but commented on the need to spend money wisely. Councillor Y. Fernandes requested that all votes taken this date be recorded. Councillor D. Glenn-Graham requested that Mr. J. Grant, General Manager, Centre in the Square (CITS), address Council regarding the additional grant request for $87,000. Mr. J. Grant advised that the request is to allow the Centre to hire outside expertise to assist with negotiations of two union contracts in 2011. Additionally, some of the funds will be used for an aggressive marketing campaign proposed to alleviate some of the losses due to the economic downturn. A suggestion was made that the CITS take advantage of staff expertise in the City’s Human Resources Division and request assistance with the upcoming negotiations. A motion by Councillor D. Glenn-Graham was brought forward for consideration to approve a 2011 appropriation to the Centre in the Square of $1,457,000, which includes the additional grant request of $87,000. to assist with the hiring of outside expertise for union contract negotiations and a 2011 marketing campaign. In response to the suggestion that City staff assist CITS with its upcoming negotiations, Ms. C. Ladd advised that, in the past, staff have assisted CITS but that she needed more detail on the specifics of this negotiation in order to confirm that this could again occur. She further advised that the union in question requires specialized knowledge of labour relations which, due to a recent retirement of staff, the City no longer possesses. Mr. J. Grant clarified that the outside expertise would be hired on a contract basis only to complete this negotiation process. A motion by Councillor Y. Fernandes to amend Councillor Glenn-Graham’s motion was brought forward to provide that the additional grant request to the Centre in the Square be reduced by the amount of $37,000., for a total grant of $50,000. Carried, The amending motion was voted on and by a recorded vote, with Councillors Z. Janecki, Y. Fernandes, J. Gazzola, S. Davey, F. Etherington and P. Singh voting in favour; and Mayor C. Zehr and Councillors B. Vrbanovic, K. Galloway, D. Glenn-Graham and B. Ioannidis voting in opposition. Carried The main motion, as amended, was then voted on by a recorded vote and Unanimously . On motion by Councillor D. Glenn-Graham - it was resolved: “That the 2011 appropriation for the Centre in the Square be approved at $1,420,079.” Kitchener Public Library A motion was brought forward by Councillor Vrbanovic to approve the Kitchener Public Library (KPL) 2011 budget as requested. He noted that the offered cut was reluctantly offered SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 61 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. because of Council’s request. He stated that in reality, the KPL is one of the most valued services to the community. He noted that the way the KPL was able to lower their expenditures last year was by giving wage increases at a lower rate than was given to City staff and by reducing the acquisition of resources, which is not sustainable. He urged Council to support the requested budget. Several other committee members spoke in support of the KPL 2011 budget, as submitted. Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor B. Vrbanovic - it was resolved: “That the 2011 appropriation for the Kitchener Public Library, in the amount of $8,927,661., be approved.” ENTERPRISES Golf Enterprises Mr. Chapman presented the Golf Enterprises 2011 Budget and advised that work has been undertaken to resolve the 2010 budget deficit. Mayor Zehr commented that 2010 was a difficult year and the changes that were made were difficult. A motion was brought forward by Mayor Zehr to approve the Golf Enterprises budget as submitted, as this budget ensures that there is no subsidy from the levy. Councillor Fernandes questioned whether the City has entertained the idea of leasing the Doon Valley facility to another entity. Mr. Chapman advised that the sale or lease of this golf course has been investigated and in 2011 we will look at a longer term strategy. Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Mayor C. Zehr - it was resolved: “That the 2011 budget for the Golf Enterprise be approved as submitted.” Building Enterprise Mr. Chapman presented the budget for the Building Enterprise noting that 2010 revenues exceeded expectations because of the large number of institutions for which permits were issued. He also advised that by legislation, the City cannot take a dividend from this enterprise. Further, any reasonable expense has been charged back to this enterprise. A motion was brought forward by Mayor Zehr to approve the budget for the Building Enterprise, as submitted. Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Mayor C. Zehr - it was resolved: “That the 2011 budget for the Building Enterprise be approved as submitted.” Parking Enterprise Mr. Chapman explained that the dividend from the Parking Enterprise is new for 2011. He advised that if the amount of the dividend is increased there must be a decrease in the amount of the opening balance for the following year. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 62 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. Referring to Issue Paper OP-32, Councillor Vrbanovic suggested that the 2011 dividend be increased by $493,000 as shown in Alternative 3, noting that Alternative 3 would still leave some staff support in the budget. In response to Councillor Gazzola, Mr. Chapman advised that Alternative 3 would eliminate the Transportation Demand Management and Cycling Master Plan funding. Councillor Gazzola questioned the possibility of removing the $1,070,000 opening balance. Mr. Chapman responded that doing so would mean that by 2015 the enterprise would have a significant problem. Councillor Gazzola commented that Alternative 3 would increase the dividend to $2,240,000 and Mr. Chapman noted that the transfer to capital will then be reduced. Mayor Zehr spoke in support of Alternative 3 which will add $493,000 to the dividend. He stated that he is not in support of transferring the $1,070,000 which would be a complete deficit. Councillor Vrbanovic spoke in support of adopting Alternative 3, stating that some staffing can still be explored. Mr. Chapman noted that this additional dividend will result in taking $2.5M over 5 years. Further, adding this cost means reducing somewhere else and that would have to be transfers to capital. Councillor Glenn-Graham spoke in support of Alternative 3, noting that although Transportation Demand Management is important, costs must be cut. He questioned whether the starting balance for 2011 could be reduced by $70,000. Mr. Chapman responded that it would not make a noticeable difference to the levy, as the $70,000 must be divided by the 10 years of the Forecast. Councillor Glenn-Graham stated that he would support a $70,000 reduction in the opening balance of 2011. Councillor Vrbanovic commented that almost $500,000 is being cut from this budget which will have the affect of 0.5% on the tax rate. If 3 staff positions are removed they may eventually have to be put back. He stated that $70,000 will put the budget in a negative position. Councillor Fernandes spoke in support of Councillor Glenn-Graham’s suggestion of a $70,000 reduction in the opening balance for 2011, which she believed could be done for this year. She stated that reductions must be made this year to compensate the public for the stormwater management fees. A motion was brought forward by Mayor Zehr to approve Alternative 3 as outlined in Issue Paper OP-32. Councillor Glenn-Graham put forward an amendment to the Mayor’s motion to reduce the opening balance for 2011 by $70,000. This reduction would result in an additional $70,000 in dividends; so that the 2011 dividend would be increased by the $493,000 recommended in Alternative 3, plus $70,000. Mayor Zehr stated that the additional dividend would mean a reduction of more than 0.5% on the levy and he questioned what it will do to the Parking Enterprise in 2011. Mr. Chapman advised that it will result in a further reduction for 2011 and a $70,000 reduction each year will result in a small deficit in 2015. Mayor Zehr then accepted Councillor Glenn-Graham’s amendment as friendly; however, this amendment was intended to be for 2011 and the adjustment to the dividend in 2012 will only be $493,000. He cautioned that the budget figures are estimates and the margin for error is starting to thin. He commented that last year there was a deficit and cautioned against the same thing happening this year. Councillor Galloway advised of her concern about staffing and put forward an amendment, accepted by Mayor Zehr as friendly, that Council reserves the right to make staffing decisions for the Parking enterprise as required over time. Carried, Unanimously. The following motion was voted on by a recorded vote and SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 63 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. On motion by Mayor C. Zehr - it was resolved: “That the 2011 budget for the Parking Enterprise be approved, as amended, to reduce the opening balance in 2011 by $70,000 and to increase the 2011 transfer to the City (dividend) from $1,750,000 to $2,313,894; the increase in dividend being the $70,000 noted above plus the $493,000 identified in Alternative 3 of Issue Paper OP-32; and further, That Council reserves the right to make staffing decisions for the Parking Enterprise at some future time.” Gas Works Utility Councillor Vrbanovic noted that in Issue Paper OP-33, staff has identified reductions of up to $400,000 related to transfers from the Gas Works Utility; however, he was of the opinion that $500,000 in transfers can be achieved. Councillor Gazzola stated that substantially more than $400,000 can be transferred. He noted that the utility has a net profit of $15M and the utility is almost $2M ahead of where it started. He recommended that the $400,000 be doubled. He suggested that the utility can accommodate this increased transfer without hurting its assets. Councillor Vrbanovic stated that with a $500,000 transfer plus the other changes made thus far, a negative residential levy has been achieved. Because of the problems in the world today, caution should be used respecting further reductions. Mayor Zehr spoke of effects in future years. He cautioned that this will be a huge risk for the corporation and no business would take the risk of such a thin reserve. Mayor Zehr advised that he could support a $500,000 reduction for 2011 only. A motion was brought forward by Councillor Vrbanovic to increase the transfer from the Gas Works Utility budget by $500,000. Councillor Galloway spoke in favour of the motion; whereas Councillors Janecki and Fernandes spoke in support of Councillor Gazzola’s suggestion for an $800,000 transfer. Councillor Glenn-Graham questioned whether the transfer can be approved for 2011 only and Mr. Chapman responded that it could be done but it will increase the levy for subsequent years. Councillor Gazzola stated that over the years we have always maintained that such a reduction could not be accommodated, yet nothing has happened. Mayor Zehr responded that an excess of revenue could be higher than shown in the budget; however, the net revenue is currently less than the budget. He stated that as this enterprise has great fluctuations, we have to think of this as the business that it is. He noted that $9M came from this utility for Gaukel Street and if we had not been prudent we would not have been able to do so. A motion by Councillor Z. Janecki to amend Councillor Vrbanovic’s motion to increase the Lost, transfer from the Gas Works Utility by $800,000. was voted on by a recorded vote and with Councillors Z. Janecki, Y. Fernandes, J. Gazzola and S. Davey voting in favour; and Mayor C. Zehr and Councillors P. Singh, B. Vrbanovic, K. Galloway, B. Ioannidis and D. Glenn-Graham voting in opposition. Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor B. Vrbanovic - it was resolved: “That the transfer from the Gas Works Utility budget be increased by $500,000.” SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 64 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. Water Utility & Sanitary Utility Referring to Issue Paper OP-35a, a motion was brought forward by Mayor Zehr to increase the water and sanitary rates by 1.9%. Councillor Gazzola suggested that the rate increase for both utilities should be 0.9%. Councillor Galloway stated that there is no value in increasing the rates for both utilities by the same amount as the costs for infrastructure replacement are different. Councillor K. Galloway put forward an amendment by Mayor Zehr’s motion, accepted as friendly, to increase the water rate by 2.9% and the sanitary rate at 0%. This arrangement would allow for the same length of renewed infrastructure for both utilities. Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Mayor C. Zehr - it was resolved: “That the 2011 Water Utility rates be increased by 2.9% and there be no increase in the 2011 Sanitary Utility rates.” The Committee then recessed at 12:15 p.m. and reconvened at 1:15 p.m. with all members present. Review of Outstanding Issue Papers OP36 - Storm Water Management (SWM) Utility Councillor Z. Janecki expressed the opinion that the SWM fee is not a user fee due to the fact that a property owner cannot control the amount used, such as they can in the case of water or natural gas. He also raised concerns with respect to how the calculations for the fee will be applied to the various properties. Councillor Janecki suggested that the objective of the fee is to address Victoria Park lake and expenses incurred with respect to other storm water issues. He expressed concerns that with these costs now out of the tax base, the revenues will be used to aggressively deal with the lake. Councillor Janecki stated that after reviewing the Environmental Assessment (EA) completed for the Victoria Park lake, it was his opinion that of the 5 scenarios assessed, Alternative No. 5 would solve the long-term issue regarding the lake and at a lower cost than the selected Alternative No. 3. He added that if Alternative No. 5 was selected it could reduce the required capital for the SWM Utility resulting in lower rates. Councillor Janecki suggested that a peer review of the EA should be undertaken in order to determine the proper and most cost- effective approach to resolve the issue regarding the lake and other SWM issues. Mayor C. Zehr advised that he could not support what was being suggested, pointing out that there was a public process over a 24 month period to receive and discuss information relating to the SWM Utility and associated fees. Mayor Zehr added that reverting the SWM expenditures back to the tax base would not only be a waste of money already spent but residents will end up paying more than they should be for this utility. Mr. D. Chapman advised that putting the SWM expenditures back into the tax base would result in an increase in 14% in SWM costs to the average residential property due to the shift of costs from the commercial/industrial sector back to the residential sector. Councillor F. Etherington advised that the Victoria Park lake is an integral part of the City used by all citizens and will become more important in the future as intensification takes place and green spaces become an important place for residents. He added that further deferral of the required remediation of the lake will result in higher costs in future. Mr. G. Murphy provided background information on the SWM program pointing out that it started in 2004 and the feasibility study was presented to Council in 2009. He advised that the rate structure was adopted through public consultation and although not perfect, is considered to be fair and equitable. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 65 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. A motion by Councillor Z. Janecki to return the Storm Water Management expenditures back Lost, to the tax base was voted on by a recorded vote and with Councillors Z. Janecki and J. Gazzola voting in favour; and, Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, Y. Fernandes, K. Galloway, S. Davey, B. Vrbanovic, F. Etherington and P. Singh voting in opposition. A motion by Councillor Z. Janecki was brought forward to direct staff to undertake a peer review of the Environmental Assessment study completed for the Victoria Park lake remediation project and report back on: the results of the review; a cost analysis of the various options for remediation; and, recommendation on the best option to pursue with respect to the project. Councillor B. Vrbanovic advised that the intent of today’s meeting is to deal with the 2011 budget, not to alter policies and programs developed over years of research and debate. He suggested that before considering the motion of Councillor Janecki that it would be prudent to have staff report on the necessity of a further review of the EA. Carried, The following motion was voted on by a recorded vote and with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, Y. Fernandes, J. Gazzola, K. Galloway, S. Davey, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillor Z. Janecki voting in opposition. On motion by Councillor B. Vrbanovic it was resolved: “That consideration of a motion by Councillor Z. Janecki to direct staff to undertake a peer review of the Environmental Assessment study completed for the Victoria Park be deferred to the April 11, 2011 Finance and Corporate Services Lake remediation, Committee meeting to receive a response from staff on the merits of undertaking such a review.” Councillor J. Gazzola inquired if a 20% reduction in the SWM fees was possible and what the impact would be. Ms. P. Houston suggested that 20% would be too aggressive; however, 10% may be possible. She explained that a reduction in fees would result in carrying the deficit longer than projected. Councillor S. Davey asked if the rebate program could be deferred until 2012. Mr. G. Murphy advised that adjustments related to rebates have already been budgeted and any change to the schedule could result in negative public perception. Mr. D. Chapman suggested that with a 10% reduction in fees, staff could look at deferring some projects under the program in 2012 rather than extending the projected deficit. A motion by Councillor K. Galloway was brought forward to reduce the Storm Water Management fees by 10%. A motion by Councillor Z. Janecki to amend Councillor Galloway’s motion to provide that the Storm Water Management fees be reduced by 50% was voted on by a recorded vote and Lost, with Councillor Z. Janecki voting in favour; and Mayor C. Zehr and Councillors D. Glenn- Graham, B. Ioannidis, Y. Fernandes, J. Gazzola, K. Galloway, S. Davey, B. Vrbanovic, F. Etherington and P. Singh voting in opposition. Carried, The following motion was voted on by a recorded vote and with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, Y. Fernandes, J. Gazzola, K. Galloway, S. Davey, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillor Z. Janecki voting in opposition. On motion by Councillor K. Galloway - it was resolved: “That the 2011 Storm Water Management fees be reduced by 10% effective July 1.” SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 66 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. OP01a - Consultants - Additional Information Councillor Y. Fernandes raised concerns regarding the amount being paid for consultants, suggesting the issue should be reviewed to ascertain what work can be completed in-house and when consultants should be retained. Councillor B. Vrbanovic pointed out that consultants are generally retained for either their expertise or as a resource when staff are unable to complete all work required. Councillor J. Gazzola suggested that the issue of retaining consultants should be further reviewed in future. OP06 - Arts and Culture Sustainability Fund - Creative Enterprises Enabling Organization A motion by Councillor P. Singh was brought forward to allocate $220,000 from the Economic Development Investment Fund (EDIF) surplus for the Arts and Culture Sustainability Fund. Councillor Z. Janecki advised he could not support the motion as the funds are still coming from taxpayers and being part of EDIF, the funds are part of the debentures used for EDIF. Mr. Chapman advised the funds would be allocated from the current surplus and could not be debentured funds since it would not be used for a capital project. A motion by Councillor Y. Fernandes was brought forward to amend Councillor Singh’s motion to have half of the allocated $220,000 to the Arts and Culture Sustainability Fund paid in 2011 and the remaining half in 2012. Ms. C. Ladd advised that it would be best to allocate the full amount in 2011 as there are still outstanding projects making up EDIF. In answer to questions regarding a business plan from the organization, Ms. Ladd explained that a CEO is to be hired within the next month following which a business and strategic plan will be developed and submitted to Council. Councillor Gazzola advised that he supports the Arts and Cultural Sustainability Fund but in his opinion, a business plan should be in place before allocating any funds. The amending motion of Councillor Fernandes was then voted on by a recorded vote and Lost, with Councillors Y. Fernandes, F. Etherington, J. Gazzola and S. Davey voting in support; and Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, Z. Janecki, K. Galloway, B. Vrbanovic and P. Singh voting in opposition. Carried, The following motion was voted on by a recorded vote and with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, Z. Janecki, K. Galloway, B. Vrbanovic and P. Singh voting in favour; and Councillors Y. Fernandes, F. Etherington, J. Gazzola and S. Davey voting in opposition. On motion by Councillor P. Singh it was resolved: “That $220,000 be allocated from the Economic Development Investment Fund surplus for the Arts and Culture Sustainability Fund.” A motion by Councillor F. Etherington was brought forward to request that a member of Council be included on the Board of the Creative Enterprises Enabling Organization and that they provide Council with a business plan as soon as their CEO is hired. Councillor B. Vrbanovic requested that each part of the motion be voted on separately. Carried The following motion was voted on by a recorded vote and , with Councillors F. Etherington, P. Singh, S. Davey, J. Gazzola, Y. Fernandes and B. Ioannidis voting in favour; and Mayor C. Zehr and Councillors K. Galloway, B. Vrbanovic, D. Glenn-Graham and Z. Janecki voting in opposition. On motion by Councillor F. Etherington - it was resolved: “That the Creative Enterprises Enabling Organization be requested to include a member of Kitchener Council on its Board of Directors.” SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 67 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor F. Etherington - it was resolved: “That the Creative Enterprises Enabling Organization be requested to provide Kitchener Council with a business plan as soon as their Chief Executive Officer is hired.” Unfunded Items - Physician Recruitment and Specialist Recruitment Carried The following motion was voted on by a recorded vote and , with Mayor C. Zehr, and Councillors D. Glenn-Graham, B. Ioannidis, Z. Janecki, Y. Fernandes, J. Gazzola, K. Galloway, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillor S. Davey voting in opposition. On motion by Councillor K. Galloway - it was resolved: “That $10,000 be allocated from the Economic Development Investment Fund for Physician Recruitment in 2011.” Carried The following motion was voted on by a recorded vote and , with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, Z. Janecki, K. Galloway, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillors Y. Fernandes, S. Davey and J. Gazzola voting in opposition. On motion by Councillor K. Galloway - it was resolved: “That $10,000 be allocated from the Economic Development Investment Fund for Medical Specialist Recruitment in 2011.” 5% Tax Supported Reductions and Related Issue Papers Reduction Item 38 - Economic Development Investment Fund (EDIF) Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Mayor C. Zehr - it was resolved: “That $500,000 be transferred from the Economic Development Investment Fund to the tax supported operating budget in 2011, 2012 and 2013.” OP07 / Reduction Item 36 - Gapping Councillor Vrbanovic noted that there have been challenges in reaching the gapping target; however, he suggested that this is not the year to fully address this matter. There are two reasons for this: the first being that we are experiencing financial challenges; and, the second is that this is the mechanism that Council has to let staff know that we want to achieve some savings in the overall staffing budget. There is also a risk in not achieving the target as has happened in past years. When gapping occurs it comes at the risk of service delivery slow- downs but gapping is the proper way for Council to address staffing from a policy perspective. Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor B. Vrbanovic - it was resolved: “That the savings through gapping be increased by $500,000.” SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 68 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. OP07 / Reduction Item 44 - Management Salary Adjustment (Grade 12 and Up) A motion by Councillor Vrbanovic was brought forward to provide a salary adjustment of 1%. Councillor Vrbanovic noted that the same approach was taken in 2010. Councillor Singh suggested that a deeper cut is required and recommended no increase in salaries for Management (Grade 12 and above). Mr. M. May advised that Council could freeze salaries for Grade 12 and above but to do so for Grade 11 and below would not comply with legislation. A motion was brought forward by Councillor P. Singh to amend Councillor Vrbanovic’s motion, to award a 0% increase in salaries for Management (Grade 12 and above). A discussion took place in which several members of the Committee stated that the proposed reduction in the increase for salaries was not a reflection of how the member looked upon staff; further stating that they were impressed and appreciative of the work that staff has undertaken respecting this budget process. Carried, The following motion was voted on by a recorded vote and withCouncillors Z. Janecki, Y. Fernandes, J. Gazzola, S. Davey, F. Etherington and P. Singh voting in favour; and Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, K. Galloway, B. Vrbanovic voting in opposition. On motion by Councillor P. Singh - it was resolved: “That in 2011 the salaries for Management (Grade 12 and above) be frozen at the 2010 rates.” Salaries - Mayor and Council A motion by Councillor D. Glenn-Graham was brought forward to freeze Council salaries for 2011. Mayor Zehr spoke in support of the motion but provided some background noting that 2 citizen committees, in 2000 and 2003, had looked into Council remuneration and it was determined that there should be gradual increases rather than a sudden large adjustment. He also noted that there is an array of other compensation, such as technology and RRSP contributions. He suggested that Council may want to initiate another citizen committee in 2013, in accordance with Council’s policy. Carried The following motion was voted on by a recorded vote and , with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, J. Gazzola, Y. Fernandes, K. Galloway, S. Davey, B. Vrbanovic, F. Etherington, and P. Singh voting in favour; and Councillor Z. Janecki voting in opposition. On motion by Councillor D. Glenn-Graham - it was resolved: “That 2011 salaries for the Mayor and Councillors remain at the 2010 level.” Reduction Item 37 - Fringe Benefits Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor B. Vrbanovic - it was resolved: “That the cost of fringe benefits be reduced by $180,000.” OP09 - Mileage Rate Carried, Unanimously. The following motion was voted on by a recorded vote and SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 69 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. On motion by Councillor B. Vrbanovic - it was resolved: “That the mileage rate be increased in 2011 by $0.01 per kilometer.” OP11 - Fleet Administration In response to a question from Councillor Fernandes, Mr. D. Miller advised that the reduction has been created by combining 2 part-time positions into 1 full-time position; and, whereas the 2 part-time positions, including wages and benefits cost $81,023, the full-time position costs $61,997. He noted that this new full-time position will have to be re-evaluated. It was also pointed out that this issue paper was provided for information and no action was required by this Committee. OP21 - Growth Items - Bridgeport Community Centre and McLennan Park Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor K. Galloway - it was resolved: “That the opening of the Bridgeport Community Centre be delayed until October 2011, for a savings of $150,221.” Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor K. Galloway - it was resolved: “That the opening of McLennan Park be delayed until June 2011 for a savings of $90,333.” Reduction Item 3 - Office of the Chief Administrator and Reduction Items - 6, 7, 9, 10, 11, 15 - Community Services Carried The following motion was voted on by a recorded vote and , with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, J. Gazzola, Z Janecki, Y. Fernandes, K. Galloway, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillor S. Davey voting in opposition. On motion by Councillor B. Vrbanovic - it was resolved: “That no action be taken on the following: elimination of the Oktoberfest / Christmas Floats (item # 3) elimination of the Communities in Bloom Program (item #6) elimination of the Recreation Program Grant (item #7) elimination of the Movie Licenses (item #9) elimination of the Recreation Grants to Neighbourhood Associations (item #10) closure of 4 summer playground programs (item #11) elimination of the Summer Youth Drop-In [age 18+] (item #15).” Reduction Item 22 - Residential Energy Efficiency Project (REEP) Grant A motion was brought forward by Councillor P. Singh to approve the 2011 grant to REEP. Several members of Council advised that they are having, or have had, energy audits completed on their homes; however, it was generally understood that the audits, whether complete or not, are not a reason to declare a pecuniary interest as the actual audits are not conducted by REEP. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 70 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. Carried The following motion was voted on by a recorded vote and , with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, K. Galloway, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillors Z. Janecki, Y. Fernandes, J. Gazzola and S. Davey voting in opposition. On motion by Councillor P. Singh - it was resolved: “That the Residential Energy Efficiency Program be awarded a grant of $27,500 in 2011.” Reduction Items 1, 4 and 5 - Office of the Chief Administrator Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor B. Vrbanovic - it was resolved: “That the 2011 budget be reduced as follows: $8,000 from the CAO capital accounts (Item 1) $20,000 in efficiencies in the Print Shop (Item 4) $8,500 in reductions to the Kitchener Market budget (Item 5).” Reduction Item 8 - Close Community Centres over Christmas Holidays A motion was brought forward by Councillor K. Galloway to reduce the savings for the opening of Community Centres over the Christmas Holidays by $4,000. Ms. Campbell advised that the amount would cover the cost of minimal staff to allow the centres to remain open during that time. Councillor J. Gazzola left the meeting at this time and Councillor S. Davey assumed the Chair. Carried, The following motion was voted on by a recorded vote and with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, K. Galloway, S. Davey, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillors Z. Janecki, and Y. Fernandes voting in opposition. On motion by Councillor K. Galloway - it was resolved: “That the Community Centre budget be reduced by $4,000 as it relates to opening the Community Centres over the Christmas Holidays.” Reduction Item 12 - Reduce Newsletter Printing Councillor J. Gazzola re-entered the meeting and assumed the Chair at this time. Carried The following motion was voted on by a recorded vote and , with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, Z. Janecki, J. Gazzola, K. Galloway, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillors S. Davey and Y. Fernandes voting in opposition. On motion by Councillor B. Vrbanovic - it as resolved: “That no action be taken to reduce the Newsletter Printing budget.” Reduction Item 13 - Convert Breithaupt Wading Pool to Splash Pad Carried The following motion was voted on by a recorded vote and , with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, Y. Fernandes, J. Gazzola, K. Galloway, S. Davey, SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 71 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillor Z Janecki, voting in opposition. On motion by Councillor B. Vrbanovic - it was resolved: “That the wading pool at Breithaupt Park be used as a splashpad for a savings of $11,000.” Reduction Item 14 - Elderly Persons Centres (EPC) Grant Increase Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Mayor C. Zehr - it was resolved: “That the operating budgets for the Downtown Community Centre, Rockway Centre and Breithaupt Centre be reduced by the amount of their increase in the Elderly Persons Centres grant, for a total reduction of $54,000.” Reduction Item 16 - Reduce Urban Design Capital Account A motion was brought forward by Councillor Vrbanovic to reduce the Urban Design Capital Account by $25,000 rather than the proposed $50,000. Councillor Y. Fernandes spoke against the motion stating that she would support the full $50,000 reduction. Lost The motion was voted on by a recorded vote and , with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, K. Galloway and B. Vrbanovic voting in favour; and Councillors Z. Janecki, Y. Fernandes, J. Gazzola, S. Davey, F. Etherington and P. Singh voting in opposition. Carried The following motion was voted on by a recorded vote and , with Councillors Z. Janecki, Y. Fernandes, J. Gazzola, S. Davey, P. Singh and F. Etherington voting in favour; and Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, K. Galloway and B. Vrbanovic voting in opposition. On motion by Councillor Fernandes - it was resolved: “That the Urban Design Capital Account be reduced by $50,000.” Reduction Item 17 - Communication Towers on City Buildings Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor K. Galloway - it was resolved: “That the revenues for Communication Towers on City Buildings be increased by $10,000.” Reduction Item 18 - Adjust Cemetery Interest Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor D. Glenn-Graham - it was resolved: “That Cemetery interest revenue be increased by $46,900.” SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 72 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. Reduction Item 20 - Reduce City-Run Festivals A motion was brought forward by Councillor Vrbanovic to reduce funding for City-Run Festivals by $20,000, being half of the proposed reduction, to allow staff an opportunity to increase sponsorships. Carried The motion was voted on by a recorded vote and , with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, K. Galloway, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillors J. Gazzola, S. Davey, Z. Janecki and Y. Fernandes voting in opposition. On motion by Councillor B. Vrbanovic - it was resolved: “That the budget for City-Run Festivals be reduced by $20,000.” Reduction Item 21 - Purchasing Wages Carried, Unanimously The following motion was voted on by a recorded vote and . On motion by Councillor K. Galloway - it was resolved: “That Purchasing Wages be reduced by $14,155.” Reduction Item 23 - Computer / Telephone Charges Councillor Vrbanovic questioned whether this amount could be increased to $75,000. Mr. D. Chapman advised that there are not sufficient funds in this budget for the $50,000 reduction, which may cause computer replacement to go beyond the current 5 years. Mr. D. Murray advised that there has been a surplus in this account in previous years but there have been reasons for this. He advised that this account has financed many projects in the Central Maintenance Facility and it will be used for phone system upgrades, which is beginning at this time. Further, the maintenance of these new technologies will increase and it is not known whether the sophistication of the technologies will balance out the increased maintenance costs. Mr. Murray stated that if staff offers a greater reduction it would probably result in having to come back to Council in future years for more money. Carried The following motion was voted on by a recorded vote and , with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, K. Galloway, S. Davey, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillors J. Gazzola, Z. Janecki and Y. Fernandes voting in opposition. On motion by Councillor B. Vrbanovic - it was resolved: ’ “That the Computer/Telephone Charges account be reduced by $50,000.” OP21 - Growth Items - Office of the Mayor and Council Budget A motion was brought forward by Councillor F. Etherington to reduce the annual conference funding for each Councillor to $3,000 rather than the current $5,050, with the exception of Mayor Zehr and Councillor Vrbanovic, who should be allocated $6,000. each as they are members of a municipal organization; and that the $5,500 technology and home office allowance for Mayor and Councillors be eliminated for the term of this Council. Discussion took place concerning budgeted amounts for conferences, meetings and home technology. Councillor Janecki advised that he could not support the reduction for conferences. Councillor Fernandes advised that she would support the reduction and also requested information on the number of staff who attend conferences and the cost involved. Mr. Chapman advised that he would obtain that information for her. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 73 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. Mayor Zehr cautioned that there are a couple of accounts to consider as there is money for conferences, then there is a separate account for some much smaller items such as meetings in Toronto. Mr. Chapman noted that the conference budget for Councillors does not include the Mayor’s budget. Mayor Zehr disagreed with the proposed reduction noting that $13,000 in that budget relates to being on a Board of Directors. What remains is $37,500 for conferences for 10 Councillors. He also pointed out that “Conference Executive” is to attend meetings for Federation of Canadian Municipalities or Association of Municipalities of Ontario, or other municipal organizations, and not for conferences. Councillor Galloway stated that conference attendance is really a policy issue and she recommended a future policy review, noting that the policy allows members of Council to attend up to 3 conferences per year. Councillor Vrbanovic advised that the new members of Council will be able to avail themselves of training. He suggested that the budget be left in place for 2011 on the understanding that it could be reviewed in 2012. Councillor Etherington stated that he has no concerns with Councillors going to conferences but questioned the benefit of 3 Councillors going to the same conference. He advised that he supports the budget for conferences but is opposed to everything else. The motion by Councillor Etherington to reduce the Council conference budget to $30,000 Lost rather than the current $37,500. was voted on by a recorded vote and , with Councillor F. Etherington voting in support; and Mayor C. Zehr and Councillors P. Singh, B. Vrbanovic, S. Davey, K. Galloway, J. Gazzola, Y. Fernandes, Z. Janecki, B. Ioannidis and D. Glenn-Graham voting in opposition. Councillor Etherington advised that he could support a decrease in the Technology and Home Office accounts in the amount of $500 per Councillor for operating and the same for the capital expenses. Mr. Chapman clarified that each Councillor can spend $3,675 in operating expenses each year for Technology and Home Office. Capital expenditures for the same thing are budgeted at $1,886 per Councillor per year. The total of both is $5,561 per Councillor per year. Several members of the Committee spoke in support of the Technology and Home Office budgets, explaining the purpose of the budget and the fact that such items as blackberries would have to be returned immediately or paid for by each Councillor. A motion was then brought forward by Mayor Zehr to amend Councillor Etherington’s motion to allow $5,000 per Councillor per year for capital and operating expenses for Technology / Home Office, as was the budgeted amount in 2003. Carried, Mayor Zehr’s amending motion, as follows, was voted on by a recorded vote and with Mayor C. Zehr and Councillors P. Singh, B. Vrbanovic, J. Gazzola, Z. Janecki and B. Ioannidis voting in favour; and Councillors F. Etherington, S. Davey, K. Galloway, Y. Fernandes and D. Glenn-Graham voting in opposition. On motion by Mayor C. Zehr - it was resolved: “That the 2011 budget for Technology and Home Office expenses be set at $5,000 per Councillor for capital and operating expenses combined.” OP24 / Reduction Item 24 - Turf Maintenance Councillor J. Gazzola requested clarification of what has been proposed monetarily for turf maintenance. Ms. P. Houston advised that an additional $179,720 was requested as an add to the operating budget to fund 2 trim crews (Issue Paper 13); and a reduction of $114,000 is now proposed under Item 24 of the 5% tax supported reductions. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 74 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. Mayor Zehr advised that he would not support a reduction in the level of service as the goal should be to increase service. He stated that while he would like to add additional monies this year, in order to affect no impact to the tax levy he would accept maintaining the status quo. Carried, Unanimously The following motion was voted on by a recorded vote and . On motion by Mayor C. Zehr - it was resolved: “That no action be taken to reduce the level of service for turf maintenance by $114,000 in 2011.” Carried, Unanimously The following motion was voted on by a recorded vote and . On motion by Mayor C. Zehr - it was resolved: “That no action be taken to increase the level of service for turf maintenance by $179,720 in 2011.” OP12 (Questions) / Reduction Item 2 - Council Support Person Mr. D. Chapman responded to a question by Councillor Galloway regarding the cost of a part- time staff person, advising that the cost is estimated at approximately $17,500 in 2011. He stated that the Committee could opt to eliminate the additional support person altogether for a savings of $60,000 or maintain funding for a part-time person resulting in a savings of $42,500. Councillor Y. Fernandes commented that in light of just hiring a new person in the Office of the Mayor and Council that it would not be a good idea to add to the complement until there is opportunity to see how the Office is managed under existing staff. Mayor Zehr pointed out that the new person hired did not fill a new position but rather was hired to fill a vacant position. Councillors K. Galloway and J. Gazzola supported taking no action to increase staff complement at this time. Carried, Unanimously The following motion was voted on by a recorded vote and . On motion by Councillor Y. Fernandes - it was resolved: “That the additional Council support position be removed from the Office of the Chief Administrator’s operating budget for a savings of $60,000 in 2011.” Reduction Item 25 - Sportsfields Maintenance Councillor J. Gazzola requested clarification of what the proposed reduction of $49,000 relates to. Mr. J. Witmer advised that it equates to a reduction in the frequency of cutting all sportsfields, which will impact playability for users. Councillor Fernandes questioned the feasibility of using turf maintenance staff to assist with sportsfields maintenance. Mr. Witmer advised that this is specialized work using different equipment and requiring a different skill set. Carried, Unanimously The following motion was voted on by a recorded vote and . On motion by Councillor K. Galloway - it was resolved: “That no action be taken to reduce the level of service for sportsfields maintenance by $49,000 in 2011.” SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 75 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. OP26 - Community Grant (Tier 1) - Minor Sport Provision Mr. D. Chapman advised that this issue paper provides information in response to questions as to how the budget for the minor sport provision was allocated in 2010. Councillor K. Galloway asked that staff work with the Kitchener Rangers to help guide the Kitchener Minor Hockey Ice Pirates Special Needs Hockey Program in finding alternative sources of funding. Ms. D. Keelan advised that the funding shown is as a result of inability to fund the program through Tier 2 grants. She added that it was her understanding the Special Needs Hockey Program had exhausted all other options for funding and the funds shown came about as a request from the Kitchener Rangers. Reduction Items 26, 27 & 34 - Fountains - City Hall, Rockway Gardens and Other Decorative Councillor B. Vrbanovic questioned if a reduction of only $10,000 was made, if the fountains could remain running and staff simply make some operational adjustments. Ms. C. Fletcher stated that this arrangement could likely be accommodated Carried, Unanimously The following motion was voted on by a recorded vote and . On motion by Councillor B. Vrbanovic - it was resolved: “That the service level for operation of City-run fountains be reduced by $10,000. in 2011.” OP12 (Questions) / Reduction Items 28 & 29 - Reduced Season for Outdoor Pools (Kiwanis & Other) A motion by Councillor K. Galloway was brought forward to take no action to reduce the season for outdoor pools. A motion by Councillor B. Vrbanovic was brought forward to amend Councillor Galloway’s motion to provide a reduced season from June 25 to September 5, except for the Harry Class Outdoor Pool which would remain open until September 18, 2011, for a savings of $22,950. Councillor Vrbanovic subsequently withdrew his amending motion on explanation by Ms. D. Keelan that a later opening in June would have significant impact to schools, who actively use the pools during the month of June. Carried, Unanimously The following motion was voted on by a recorded vote and . On motion by Councillor K. Galloway - it was resolved: “That no action be taken to reduce the season for Outdoor Pools (Kiwanis & Other) in 2011.” Reduction Item 30 - Storm Water Management (SWM) Charitable Organization Exemption Carried, Unanimously The following motion was voted on by a recorded vote and . On motion by Mayor C. Zehr - it was resolved: “That no action be taken to eliminate the grant program which provides exemption to charitable organizations and places of worship from the Storm Water Management Utility rates.” SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 76 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. Reduction Item 31 - Reduce Engineering Capital Accounts A motion by Mayor C. Zehr was brought forward to reduce Engineering capital accounts by only $211,900 in order to retain funding for sidewalks. Mayor C. Zehr agreed to a request of Councillor Janecki to amend his motion to provide that Engineering capital accounts be reduced by only $156,900 in order to also retain funding for traffic calming. Councillor Fernandes suggested that the Committee was going in the wrong direction and the original reduction of $314,900 should go forward. She noted that traffic calming is only being reduced by 50%; however, Councillor Janecki pointed out that a 50% reduction will only provide for one traffic calming project in 2011. A motion by Councillor Y. Fernandes was brought forward to provide that Engineering capital accounts be reduced by $314,900. Councillor Vrbanovic supported retaining funding for both sidewalks and traffic calming, reminding that the City has a Pedestrian Charter under which there is obligation to provide a safe walking environment and that speeding in neighbourhoods is also a significant concern of citizens. Councillor K. Galloway also supported Mayor Zehr’s motion, stating that she would prefer to actually increase funding for traffic calming given there are 35 roads that currently meet the criteria and if only one is done a year it will take 35 years to complete. It was agreed to vote separately on the issues of retaining funding in Engineering capital accounts for sidewalks and traffic calming. Carried, The following motion was voted on by a recorded vote and with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, J. Gazzola, K. Galloway, S. Davey, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Councillors Z. Janecki and Y. Fernandes voting in opposition. On motion by Mayor C. Zehr - it was resolved: “That $103,000 be retained in Engineering capital accounts for sidewalks.” Carried,Unanimously The following motion was voted on by a recorded vote and . On motion by Mayor C. Zehr - it was resolved: “That $55,000 be retained in Engineering capital accounts for traffic calming.” Carried,Unanimously The following motion was voted on by a recorded vote and . On motion by Mayor C. Zehr - it was resolved: “That Engineering capital accounts be reduced by $156,900.” OP12 (Questions) / Reduction Items 40 & 43 - Staff Recognition Reception and Recognition Event A motion by Councillor K. Galloway was brought forward to take no action to eliminate funding for either the Staff Recognition Reception ($25,000) or the Staff Recognition Event ($6,000). Councillor Gazzola requested clarification of the difference in cost between a dinner and reception. Mr. M. May advised that the savings was approximately $2,200 to go from a dinner to a reception. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 77 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. A motion by Councillor D. Glenn-Graham was brought forward to amend the motion to provide that gifts be eliminated for those employees having 15 to 20 years long term service. Mr. M. May suggested that this would be a program change for 2012 as invitations have already gone out for the 2011 event, which includes direction to staff in that service range as to how to make their choice of a gift. Councillor Vrbanovic suggested that the budget be left as is in 2011 and staff be directed to report at a later date on aspects of the event, taking into consideration the changes discussed regarding such things as a dinner versus reception and the issue of gifts. Councillor D. Glenn-Graham agreed with this approach and withdrew his amending motion. Carried,Unanimously The following motion was voted on by a recorded vote and . On motion by Councillor K. Galloway - it was resolved: “That no action be taken to reduce funding for the Staff Recognition Reception ($25,000) and Staff Recognition Event ($6,000).” Reduction Item 41 - Advertising and Publicity - Reduction by 10% Councillor F. Etherington disclosed a pecuniary interest and abstained from all discussion and voting concerning this matter as he receives income from one of the City’s primary advertising venues. A motion by Councillor B. Vrbanovic was brought forward to provide that funding for Advertising and Publicity be reduced by $16,000 rather than $36,000. Councillors B. Vrbanovic and B. Ioannidis supported the lesser reduction, commenting on the importance of encouraging citizen engagement which requires the use of advertising and publicity in addition to social media. Councillors Y. Fernandes and Z. Janecki suggested that this is an area where the full amount of $36,000 is achievable. Councillor Vrbanovic’s motion to reduce Advertising and Publicity funding by $16,000 was Lost on a tie vote voted on by a recorded vote and , with Mayor C. Zehr and Councillors B. Ioannidis, K. Galloway, B. Vrbanovic and P. Singh voting in favour; and Councillors D. Glenn- Graham, Z. Janecki, Y. Fernandes, J. Gazzola and S. Davey voting in opposition. Recorded Pecuniary Interest and Abstention: Councillor F. Etherington as he receives income from one of the City’s primary advertising venues. A motion by Councillor Z. Janecki to reduce Advertising and Publicity funding by $36,000 was Lost on a tie vote voted on by a recorded vote and , with Councillors D. Glenn-Graham, Z. Janecki, Y. Fernandes, J. Gazzola and S. Davey voting in favour; and Mayor C. Zehr and Councillors B. Ioannidis, K. Galloway, B. Vrbanovic and P. Singh voting in opposition. Recorded Pecuniary Interest and Abstention: Councillor F. Etherington as he receives income from one of the City’s primary advertising venues. Carried The following motion was voted on by a recorded vote and , with all members of except Council voting in favour, Councillor F. Etherington who previously disclosed a pecuniary interest and abstained from all discussion and voting concerning this matter as he receives income from one of the City’s primary advertising venues. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 78 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. On motion by Councillor B. Vrbanovic - it was resolved: “That Advertising and Publicity funding be reduced by $25,000. in 2011.” Reduction Item 45 - User Fees - Increase 1-2% Effective July 1 A motion by Mayor C. Zehr was brought forward to provide that no further action be taken to increase User Fees in 2011. A motion by Councillor S. Davey was brought forward to provide that a further 2% increase be made to User Fees, effective July 1, 2011. Councillor Davey recognized that user fees are traditionally raised once per year but suggested that given the significance of the tax levy increase, measures not usually taken must be considered. It was his opinion this was a responsible way to allow citizens to choose what they spend on as opposed to forcing increases through the tax levy. Councillor P. Singh suggested the increase should be no more than 1% so as not to over burden user groups. Councillor S. Davey accepted Councillor Singh’s suggestion of a 1% increase in User Fees as a friendly amendment. Councillor Y. Fernandes spoke in support of a 2% increase in User Fees, agreeing that this is an area of choice for the community to spend or not; whereas, there is no choice in the tax levy. Mayor Zehr noted that there is likely to be support coming for another $1.5M from a combination of dollars from the Tax Stabilization Reserve Fund, General Provisions and Transfer from the Hydro Capital Investment Fund. He asked that the Committee consider the bottom line effect of that amount which for most people would be a 2.62% increase. He suggested that they are now reaching the point of risking overstretching and causing a problem for the organization and the community and encouraged the Committee not to support a further increase in user fees as these are the same people being hit again who generally do not have amenities at home for these kinds of recreational activities. Following further discussion, Mayor Zehr suggested that the matter of User Fees be set aside until later in the meeting to allow other considerations to be decided on firstly that will have positive impact to the end result of the tax levy. Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Mayor C. Zehr - it was resolved: “That a proposed increase in User Fees, effective July 1, 2011, be laid on the table for further consideration later on this date.” Reduction Item 46 - General Provisions Mr. D. Chapman advised that the current budget is $7.1M and a reduction of $275,000 is proposed that would result in a budget of $6.9M A motion by Councillor Y. Fernandes was brought forward to provide that General Provisions be reduced by $400,000 in 2011. Councillor B. Vrbanovic advised that he could not support a reduction beyond the proposed $275,000, noting that the City has significant capital assets for which it has responsibility to maintain and protect. Mayor Zehr agreed, adding that these funds are to address necessary repairs that if delayed will ultimately cost more. Councillor K. Galloway also expressed concerns with reducing too much, suggesting that the vision and financial position of the City should be brought back into focus and the long term risks considered. Councillor Janecki commented that it is logical to save for later; however, given the issue of finances he was SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 79 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. prepared to support a reduction of $400,000. Councillor Gazzola supported $400,000, commenting that these funds are usually not attributed to specifics and as amounts build in these accounts they become too easy to use. He suggested that if there is insufficient funds for a particular project, staff can return to Council to ask for additional funding as needed throughout the year. Ms. C Fletcher advised that FM general provision accounts are tied to specific programs which are currently funded just over half of what is actually needed to keep on track with required maintenance. She reiterated that 20 year roofs are currently on a 36 year replacement, and while she can return to ask for funding it may be at a time too late. Ms. Fletcher also reminded that this is the second year that funding has been cut equating to a loss of $1.4M. Councillor B. Ioannidis agreed that this is an area in which to be proactive and not wait until an emergency arises, advising that he would support a reduction of only $275,000. Councillor Vrbanovic commented that there is no magical pot of money to pay for repairs in a crisis situation which means having to resort to reserves or elsewhere in the budget. He stated that maintenance is done consistent with acceptable practice for maintaining a property that is owned and monies not spent are returned through such means as capital close-outs. Councillor S. Davey stated that he was comfortable pushing the envelope in light of savings to be achieved in the tax levy but felt $400,000 was too great. He questioned if Councillor Fernandes would accept $325,000 as a friendly amendment. Councillor Y. Fernandes referred to a number of general provision accounts not related to roofs and equipments, suggesting these would cover the $400,000 and more. Mr. Chapman suggested that staff may need to report back outside of the budget process to provide more education on what is entailed in general provision budgets. He pointed out that all are supported by detailed projections and regardless of the outcome today, this particular budget would appear to warrant further discussion. Ms. C. Fletcher also reminded that reductions have to be sustained across the full 10 year forecast. Mayor Zehr suggested that in a legitimate quest to make the tax levy as low as possible the Committee was beginning to micro-manage without full knowledge, giving rise to the potential for mistakes to be made that will have consequences. He suggested that the Committee needs to have an understanding of what the end percentage translates to in dollars, expressing the opinion the dollar value is approaching a level of acceptability to the public and it would be irresponsible to further reduce fixed costs. Councillor Y. Fernandes agreed to accept Councillor Davey’s amendment of $325,000 as friendly. Carried The following motion was voted on by a recorded vote and , with Councillors D. Glenn- Graham, Z. Janecki, Y. Fernandes, J. Gazzola, S. Davey and P. Singh voting in favour; and Mayor C. Zehr and Councillors B. Ioannidis, K. Galloway, B. Vrbanovic and F. Etherington voting in opposition. On motion by Councillor Y. Fernandes - it was resolved: “That General Provisions be reduced by $325,000 in 2011.” Reduction Item 47 - Tax Stabilization Reserve Fund Councillor J. Gazzola requested clarification that when originally considered there was no surplus projected in 2010. Mr. D. Chapman advised that was correct which is why elimination of any transfer out of the reserve was recommended in 2011. Mr. Chapman confirmed that the City was fortunate in achieving a surplus of $875,000. in 2010. Councillor B. Vrbanovic requested clarification that if a transfer of $750,000 was made if this would create an immediate impact in 2012. Mr. Chapman concurred, advising that while it would still provide a small buffer this year, he would caution that there is some risk in realizing another deficit at year-end 2011 given decisions being made this date. He strongly advised SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 80 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. against increasing the transfer to match the balance of what is projected in that fund; adding that the proposed transfer of $500-$750,000 has been put forward as an option but staff is not comfortable supporting a transfer given the benchmark for this fund is 5-15% and the balance sits well below that level. A motion by Councillor B. Vrbanovic was brought forward to provide a transfer of $600,000 from the Tax Stabilization Reserve Fund to the tax supported operating budget. A motion by Councillor P. Singh was brought forward to amend Councillor Vrbanovic’s motion to provide a transfer of $750,000 from the Tax Stabilization Reserve Fund to the tax supported operating budget. Councillor J. Gazzola stated that in taking the higher amount the reserve is still in a better position than was originally thought and does help to reduce the tax levy. Mr. D. Chapman referred to the trend in reserves over the past 3 years, noting that the fund sat at $30M in 2009 at which time a financial condition assessment was done. He pointed out that in 2010 it declined to $23M and in 2011 to $16M. Mr. Chapman referred to the benchmarking exercise, noting that 50% is the reserve balance compared to gross expenditures in the City’s comparator group. The City in 2009 was at 11% and had no contingencies for water and waste water management and while the City enjoyed a reasonable financial position in 2009, as debt increases and reserve balances decline that position will be jeopardized. Councillor Gazzola acknowledged that proper advice has been given but maintained Council has responsibility to make decisions in these matters and will be ultimately accountable. Councillor Vrbanovic advised that he would accept Councillor Singh’s amendment to provide a transfer of $750,000, subject to adding provision for no further increase in User Fees in 2011. At the request of Councillor J. Gazzola, it was agreed that a decision concerning a transfer from the Tax Stabilization Reserve Fund to the tax supported operating budget be tabled for further consideration later this date. Capital Budget and Related Issue Papers Capital Pool Availability Mr. D. Chapman responded to a concern raised previously by a delegation in regard to the storm water transfers in which it was suggested they have not been included. He pointed out that this is only one funding source, being capital out of current and referred to the Funding by Source listing, advising that the storm water transfers are included in the Enterprises line. Hydro Capital Investment Reserve Fund Projection Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Mayor C. Zehr - it was resolved: “That $200,000. be transferred from the Hydro Capital Investment Reserve Fund to the tax supported operating budget in 2011.” Development Charges Projection Mr. D. Chapman advised that development charge projections have been updated to reflect 2010 actuals, with significant projects from Engineering including the Homer Watson Sewage Pumping Station, Victoria Park Lake remediation and Huron Road. He pointed out that the priority of projects has been set by staff and projects will proceed in the order stated as funding becomes available in the reserve fund. Councillor Gazzola questioned if the order of priority can be changed in 2011. Mr. Chapman advised that it could but cautioned that staff will have an approved capital program which they will proceed to execute. He noted that the only time Council will have further opportunity is when a tender comes forward and advised that Council will need to initiate a change if a change in priorities is desired. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 81 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. Unfunded Item - KidsAbility Councillor B. Ioannidis disclosed a pecuniary interest and abstained from all discussion and voting in regard to a grant request from KidsAbility, as his spouse is employed by the organization. Mayor Zehr advised, in response to questions made at the February 28 meeting, that the City of Waterloo did not make a capital contribution to the KidsAbility’s facility in that municipality. Mayor Zehr pointed out that Kitchener has contributed $20,000 per year to an endowment fund over 2 years for KidsAbility and while he would support the current grant request, he suggested that discussion is needed regarding policy development to address requests from not-for-profit agencies as it relates to capital improvements and/or endowments. Councillor S. Davey commented that it must be kept in mind that it is the taxpayer who pays for the support as requested and while he also will support the grant this date, he agreed with development of a policy going forward. Carried The following motion was voted on by a recorded vote and , with all members of except Council voting in favour, Councillor B. Ioannidis who previously disclosed a pecuniary interest in this matter and abstained from all discussion and voting as his spouse is employed by the organization. On motion by Councillor K. Galloway - it was resolved: “That a one time grant in the amount of $25,000 in 2011 to be funded from capital contingencies, be approved to KidsAbility for leasehold improvements at their new Kitchener location.” th Cap03 - 100 Anniversary Mr. D. Chapman advised that this issue paper was provided as information, noting that the project is already included in the Capital Forecast at a cost of $180,000 over 2 years (2011- 2012). Cap07 - Payment Card Industry (PCI) Compliance Mr. D. Chapman advised that this issue paper responds to questions from Council regarding trends in credit card transactions, and the trends indicate payment by credit cards is increasing. Questions were also raised concerning partnering with other municipalities to lower costs associated with becoming PCI compliant. Mr. Chapman advised that the investment will be specific to the City’s systems and merchant number; however, staff is partnering with others to understand how best to approach compliance. Cap09 - Emerald Ash Borer Management Councillor Y. Fernandes questioned why Kitchener could not partner with other municipalities that have already created their own strategy. Ms. P. Houston responded that staff is looking at what other municipalities have developed but there is also a need to look at the City’s own inventory in parks and natural areas which cannot be done with another municipality. She stressed that this is only the beginning as once the strategy is developed it will be a pro-active approach that will require more dollars to be added to the forecast, not less. Councillor Fernandes requested clarification as to what the $175,000 is to be used for and Ms. Houston advised that it is for development of a strategy and inventory of park trees. A motion by Councillor Y. Fernandes was brought forward to provide that the funding for Emerald Ash Borer Management be reduced from $175,000 to $100,000. Councillor J. Gazzola questioned how the $75,000 savings would impact on the tax levy and Mr. Chapman advised that it would equate to a $7,500 savings in 2011 and a similar amount across each year of the 10 Year Capital Forecast. Councillor Gazzola questioned if the full amount could be applied to 2011 only. Mr. Chapman advised that would put all other years into a deficit position. He pointed out that a number of adjustments have been made this date SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 82 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. that affect all years in the Forecast and to do so would mean Council is approving a Capital budget that does not balance; whereas, staff recommends adjusting to the sustainable amount. Councillor K. Galloway requested clarification if the amount requested is for 2011 or 2012 and Mr. J. Witmer advised it is in the Forecast in 2012. Councillor Gazzola suggested that the motion could still go forward even though there is no effect in 2011 to signal a $75,000 reduction in the 2012 budget. Mayor Zehr commented that specifics are not usually approved beyond the current year, suggesting that if this is an issue the full implications of the difference in funding needs to be known. He suggested that as it provides no savings in 2011, the amount be left as is and staff report at a later date this year so that Council may gain full understanding of the implications for 2012. Councillor Fernandes’ motion to reduce funding for Emerald Ash Borer Management from Lost $175,000 to $100,000 in 2012 was then voted on by a recorded vote and , with Councillors J. Gazzola, S. Davey, Y. Fernandes and Z. Janecki voting in favour; and Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, K. Galloway, F. Etherington and P. Singh voting in opposition. Councillor B. Vrbanovic was not present in the Chamber at the time the vote was taken. Cap10 - Outdoor Winter Ice Rinks This issue paper responds to a request from Council as to the feasibility of providing 4 additional outdoor rinks in 2011. Mr. Chapman advised that staff propose to use funding from the Victoria Park ice reserve to fund capital expenditures for the rink installations and if supported, additional funds in the amount of $3,700 per rink, for a total of $14,800, would be added to operating in 2011. In regard to the additional funds required for operating, Councillor Gazzola noted that the season for outdoor rinks this year is almost at an end. Mr. Chapman concurred, advising that the capital dollars would have to be added and the small portion of operating could be annualized. A motion by Councillor K. Galloway was brought forward to provide that 4 additional rinks be installed in 2011 to be funded from the Victoria Park ice reserve and operating costs to be annualized over the remainder of the 2011 season. Councillor Gazzola inquired if there is sufficient funds in operating to cover the costs without making further adjustments. Ms. P. Houston advised that Operations budget is currently under-funded by approximately $500,000 and this will serve to exacerbate that situation. Councillor K. Galloway suggested that Neighbourhood Associations be asked to fund the cost of operation for the month of December, suggesting that the rinks proceed on that basis with operating funds to be addressed by the City in 2012. Mr. D. Chapman clarified that if nothing is added in 2011 it will be a complete add to operating in 2012 for Council’s consideration at that time. Carried, Unanimously. The following motion was voted on by a recorded vote and On motion by Councillor K. Galloway - it was resolved: “That capital costs to install 4 new outdoor rinks be funded from the Victoria Park Capital Reserve with operating expenditures to commence in 2012; and further, That area Neighbourhood Associations be asked to consider funding the operating costs of the 4 new outdoor rinks on a short term basis to the end of the 2011 winter ice skating season.” Cap11 - Huron Natural Area Councillor K. Galloway raised concerns that there are still no monies available to complete the Master Plan from 2001 but expressed a willingness to wait until 2012 to look at capital SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 83 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. expenditures that will allow the joint venture group to come forward with their strategies and initiatives going forward. Cap14 - Increased Traffic Calming Reviews Councillor K. Galloway referred to her earlier concerns related to traffic calming, noting that there are 35 roads that warrant reviews and even at 2 per year it will still take 18 years to complete the list. She advised that she was prepared to support additional funding to provide for 2 additional reviews to be completed in 2011, but with no additional staffing. She acknowledged that this will stretch existing staff and suggested that Council look to next year’s budget to consider a potential increase in staffing, as well as, the addition of 2 more reviews. Councillor Galloway noted that with these additions it will still take 6 years to complete the waiting list which continues to grow and expressed the opinion this is a priority for the community and Council needs to continue to work toward making City streets safe. A motion by Councillor K. Galloway was brought forward to provide that an additional $100,000 be funded from capital contingencies to allow 2 additional traffic calming reviews in 2011 to be undertaken by existing staff complement. Councillor D. Glenn-Graham questioned the feasibility of what is proposed. Mr. J. McBride advised that staff have been stretched to do the 2 reviews normally undertaken in a year and realistically he did not believe 4 could be completed in a year with existing staffing. Councillor Galloway questioned if there is staff from other areas of the Corporation that might be seconded to help with the reviews this year. Mr. McBride advised that there are none within the Transportation Division and none elsewhere in the Corporation he was aware of that would have appropriate qualifications. Councillor Vrbanovic inquired if a student could assist with the basic level of administration, with the more technical aspects to be done by existing staff. Mr. McBride advised that a co-op student is currently on staff and he would be reluctant based on past experience in having them become more involved in traffic calming than they are already. He suggested that if hiring is the direction to be given then a consultant would be more appropriate. Councillor Fernandes questioned if any staff operating out of the CMF could be dedicated to this function once efficiencies at the CMF have been determined. Ms. C. Fletcher advised that staffing at the CMF will not be settled until the summer and she was unsure staff at the CMF would have the actual expertise required. Mr. McBride pointed out that traffic calming reviews typically start prior to the summer months and would not coincide with the move to the CMF; and he would also question the background training and qualifications of the staff person that might be assigned. Councillor Z. Janecki spoke in support of increasing the number of reviews but suggested that only 1 more additional review be added in 2011 at a cost of $50,000 to be completed by existing staff. Councillor D. Glenn-Graham supported the proposed increase in principle but suggested that it be tabled to provide opportunity to obtain more information concerning staff’s ability to complete the work and how other resourcing, such as staff from the CMF, might help in moving the program forward. Mayor C. Zehr acknowledged that this is an important issue; however, he could not support the motion to increase funding at this time as it substantially depletes capital contingencies and it is unlikely staff will be able to complete the work in any event. Councillor K. Galloway stressed that this is an important issue to the community and there is need to press harder as the list of streets continues to grow. She stated that her proposal is an attempt to find a reasonable solution and urged the Committee to give direction today that recognizes this issue as a high priority. Councillor B. Vrbanovic spoke in support of adding funding for traffic calming and asked that staff report back as to potential reprioritizing of work in other Departments that could result in potential staff to help facilitate the reviews and identify recommendations for Council where other projects may be removed to allow the reviews to go forward. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 84 - CITY OF KITCHENER FCS-11-037 - 2011 FINAL BUDGET DAY (CONT’D) 1. Carried The following motion was then voted on by a recorded vote and , with Councillors B. Ioannidis, J. Gazzola, K. Galloway, B. Vrbanovic, F. Etherington and P. Singh voting in favour; and Mayor C. Zehr and Councillors D. Glenn-Graham, Z. Janecki, Y. Fernandes and S. Davey voting in opposition. On motion by Councillor K. Galloway - it was resolved: “That $100,000 be transferred from capital contingencies to the tax supported operating budget in 2011 to provide for 2 additional traffic calming reviews to be undertaken by existing staff complement.” Cap16 - Existing Capital Balances At the request of Councillor J. Gazzola, it was agreed that staff will investigate the feasibility of including capital balances with the Capital Forecast when prepared so Council can see any balances remaining. Cap18 - Other Capital Reductions Councillor K. Galloway raised concerns that a number of capital projects for the South West Kitchener have been further deferred to the end of the Forecast, referring to written submissions by the Williamsburg Community Association and comments from area residents that also raise concerns. She stated that she was not in favour of the proposed timing and would look to address this matter in subsequent budget years. Councillor B. Vrbanovic expressed the opinion that the City has not approached implementation of the Parks Master Plan as aggressively as he expected and while minor progress has been made in the 2011 budget, more needs to be done. He asked that this be taken into account in development of the 2012 budget and if necessary, staff report back in 2011 leading up to next year’s budget deliberations. CAP15 – Reserve Funds A motion by Councillor D. Glenn-Graham was brought forward to transfer $500,000 from the Equipment Reserve Fund and from the Sick Leave Reserve Fund for a total of $1,000,000 to be transferred to the tax supported operating budget. Mr. Chapman advised that these reserves cannot support any further reduction due to an extremely low balance in the Equipment Reserve relative to the forecast replacement requirements and an obligation to maintain Council policy with respect to the Sick Leave Reserve that stipulates a level equivalent to 25% of the liability for accumulated unused sick leave days. He added that shifting funds from the reserves will defer costs to 2012 and there are other known issues that will impact future budgets such as an increase in OMERS and the new library in 2013. Councillor D. Glenn-Graham advised he was withdrawing his motion. A motion by Councillor Y. Fernandes was brought forward to transfer $250,000 from the Equipment Reserve Fund and from the Sick Leave Reserve Fund for a total of $500,000 to be transferred to the tax supported operating budget. Lost The motion was voted on by a recorded vote and with Councillors Y. Fernandes, Z. Janecki, D. Glenn-Graham and J. Gazzola voting in favour; and Mayor C. Zehr and Councillors B. Ioannidis, K. Galloway, S. Davey, B. Vrbanovic, F. Etherington and P. Singh voting in opposition. Councillor P. Singh pointed out that with the approved budget reductions, the tax increase for 2011 has been reduced by 4.62% being very close to the target reduction of 5%. Councillor Singh suggested that consideration be given to further reduce the overall budget by allocating $250,000 from the Equipment Reserve and Sick Leave Reserves, transferring an additional $100,000 from the Gas Utilities and, increasing User Fees by an additional 1% which would SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 85 - CITY OF KITCHENER FCS-11-037- 2011 FINAL BUDGET DAY (CONT’D) 1. result in another $450,000 reduction. Mr. Chapman advised that being too aggressive will create problems in 2012. Mayor C. Zehr suggested further reductions are bordering on financial irresponsibility and the suggested reduction will have impact in 2012. Carried, The following motion by Councillor P. Singh was voted on by a recorded vote and with Councillors P. Singh, S. Davey, K. Galloway, J. Gazzola, Y. Fernandes and Z. Janecki voting in favour; and Mayor C. Zehr and Councillors F. Etherington, B. Vrbanovic, B. Ioannidis, and D. Glenn-Graham voting in opposition. On motion by Councillor P. Singh it was resolved: except for the following: “That User Fees be increased by 1% effective July 1, 2011, 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).” A motion by Councillor P. Singh to transfer an additional $100,000 from the Gas Utility to the Lost, tax supported operating budget, was voted on and with Councillors P. Singh, S. Davey, J. Gazzola, Y. Fernandes and Z. Janecki voting in favour; and Mayor C. Zehr and Councillors F. Etherington, B. Vrbanovic, K. Galloway, B. Ioannidis, and D. Glenn-Graham voting in opposition. Carried, The following motion was voted on by a recorded vote and with Mayor C. Zehr and Councillors F. Etherington, B. Vrbanovic, K. Galloway, B. Ioannidis, P. Singh, S. Davey, J. Gazzola, Y. Fernandes and Z. Janecki voting in favour; and Councillor D. Glenn-Graham voting in opposition. On motion by Councillor B. Vrbanovic - it was resolved: “That $750,000 be transferred from the Tax Stabilization Reserve Fund to the tax supported operating budget.“ Final Recommendations - 2011 Budget The Committee agreed to advance its recommendations pertaining to the 2011 budget, based on decisions made this date, for Council’s consideration at its special Council meeting to be held immediately following, and from which the end result is summarized in brief below: a 2011 department operating budget, resulting in a 2011 levy for general purposes of $86,929,343; a decrease in the 2011 tax rate, excluding tax policy changes, at an estimate of (3.43%); and, a special capital levy of $8,067,335 which results in approximately a 0.64% increase in the 2011 tax rate to be allocated to the Economic Development Investment Fund, with the understanding that this levy represents the eighth year of the 10-year investment program as per the projection included in the budget day presentation to Council. SPECIAL FINANCE AND CORPORATE SERVICES COMMITTEE MARCH 1, 2011 - 86 - CITY OF KITCHENER ADJOURNMENT 2. On motion, this meeting adjourned at 6:37 p.m. L. Korabo D. Gilchrist Committee Administrator Committee Administrator J. Billett R. Gosse Committee Administrator City Clerk