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HomeMy WebLinkAbout2011-10-17FINANCE AND CORPORATE SERVICES COMMITTEE OCTOBER 17, 2011 CITY OF KITCHENER The Finance and Corporate Services Committee met this date commencing at 11:05 a.m. 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 S. Turner, Director of By-law Enforcement R. Bunn, Chief Information Officer / Director of Information Technology M. Bolger, Manager, Business Systems & DBA A. Bailey, Interim Senior Manager, Communications and Marketing R. Hagey, Manager of Financial Planning L. Baillargeon, Manager, Asset Optimization S. Brisbane, Supervisor of Financial Reporting I. Magid, Supervisor of Benefit Development J. Billett, Committee Administrator FCS-11-177 - ENVIRONMENTAL COMMITTEE RECOMMENDATION 1. WATERLOO REGION GREEN SOLUTIONS (REEP) - - ANNUAL REQUEST FOR FINANCIAL SUPPORT The Committee considered Finance and Corporate Services Department report FCS-11-177, dated September 16, 2011 concerning a request for funding support from the Waterloo Region Green Solutions, Residential Energy Efficiency Project (WRGS - REEP). Councillor F. Etherington declared a pecuniary interest and abstained from all discussion and voting concerning this matter as he is currently participating in programming conducted by WRGS - REEP. Ms. Mary Jane Patterson, WRGS - REEP, attended in support of their annual funding request, highlighting the organization’s achievements in 2010-2011 and their goals for 2012. Ms. Patterson provided rationale for continuation of the City’s annual funding from the perspective that the organization’s activities support the City’s strategic goals in Growth Management; the Environment; Storm Water Management (SWM) Utility programming; and Partners for Climate Protection initiatives. Ms. Patterson stated that in preparation of an annual budget, their organization requires a sense of core funding support that will be available to them so they can use that to build on in developing their annual programming. It was noted that the amount of funding requested by WRGS - REEP was incorrectly reflected as $25,700 in the staff recommendation contained in report FCS-11-177; whereas, the actual amount of funding being requested is $27,500. On motion by Councillor B. Ioannidis the staff recommendation contained in report FCS-11- 177, as modified to allocate $27,500. to WRGS - REEP subject to 2012 budget deliberations, was brought forward for consideration. Councillor Z. Janecki requested clarification of the drop in Federal funding from 2010 to 2011. Ms. Patterson advised that the 2010 funding primarily relates to a grant received under the Federal Infrastructure Stimulus program, used to complete construction of the REEP ‘House for Sustainable Living’ in 2010. Councillor Janecki also requested clarification of the drop in initial home evaluations from 661 in 2010 to 90 in 2011. Ms. Patterson advised that this was due to the Federal government cancelling their participation in new home evaluations effective March 31, 2010. Provincial funding did remain in place and while there was still some activity with new home evaluations it was not to the same level of participation. Councillor Y. Fernandes questioned if the organization will be requesting any further funding support in 2012 beyond this request. Ms. Patterson advised that the request represents core funding to the organization and she did not anticipate any further request for financial support in 2012. She noted that WRGS - REEP received funds under the City’s LEAF grant program and the projects approved for the grant funding will continue to be implemented over the next 2 FINANCE AND CORPORATE SERVICES COMMITTEE OCTOBER 17, 2011 - 129 - CITY OF KITCHENER FCS-11-177 - ENVIRONMENTAL COMMITTEE RECOMMENDATION 1. WATERLOO REGION GREEN SOLUTIONS (REEP) - - ANNUAL REQUEST FOR FINANCIAL SUPPORT (CONT’D) years. Councillor Fernandes questioned the impact of operating the REEP House relative to the organization’s proposed 2012 budget. Ms. Patterson advised that their 2012 budget is significantly lower than in 2010, noting that at its highest their budget is reflective of grants received from the Federal government and is greatly reduced in 2012 in anticipation of conducting less home evaluations and focusing more on education / outreach through the REEP House. Councillor D. Glenn-Graham questioned plans for solar use in the REEP House. Ms. Patterson advised that they have undergone a solar assessment and intend to start with solar water usage. She added that the building is not suitable for solar roofing; however, they are considering partnering with the Region of Waterloo in respect to a neighbouring property owned by the Region should there be an interest in doing so. Ms. Patterson further advised that they are working with the Sustainable Waterloo organization through a Climate Collaborative, whose mandate is to create a Regional community greenhouse gas reduction target and will involve a public awareness campaign. Ms. Patterson noted that the City may receive a funding request from the Climate Collaborative but pointed out that this would be separate and apart from WRGS - REEP. Councillor Glenn-Graham requested clarification as to how funding goals are determined relative to the contributions made by local municipalities versus local Hydro Utilities. Ms. Patterson advised that past funding by municipalities is reviewed annually and a determination is made as to whether or not there is a need to request a percentage increase. In regard to Hydro contributions, she stated that Kitchener-Wilmot Hydro is moving in a new direction of conservation goals and WRGS - REEP is in the process of determining what of their programming will fit in with these new goals and how Hydro may contribute to same. She added that they did not receive funding from Kitchener-Wilmot Hydro in 2011 but hoped that the Hydro Utility will do so going forward. Ms. Patterson also noted that the City of Waterloo, while originally a contributor, had ceased their funding support on the basis of contributions being made by their electric utility, Waterloo North Hydro. Councillor Glenn-Graham advised that he was prepared to amend the motion to provide additional funding to WRGS - REEP up to a total of $30,000. Councillor K. Galloway requested clarification of Kitchener funding sources. Ms. Patterson advised that these would include the request to the City for core funding currently under consideration, as well as grant funding received for 2 projects under the City’s LEAF program. Mr. D. Chapman added that the organization is also indirectly supported by Kitchener Utilities, who cover a portion of the cost of home energy audits for their Utility customers who participate in WRGS - REEP’s programming. In response to Mayor C. Zehr, it was noted that WRGS - REEP is working jointly with the Cities of Waterloo and Kitchener on a Storm Water Management (SWM) education / outreach program and Ms. Patterson suggested that this may provide opportunity to draw the City of Waterloo back as a financial supporter. Ms. Patterson also clarified the amount of funding by each contributor in 2011 and what is anticipated to be received in 2012, including contributions anticipated from Kitchener Utilities and the Hydro Utilities. Mayor Zehr suggested that Council keep in mind all funding contributions in consideration of any move to increase the City’s funding level. Councillor J. Gazzola questioned if the Townships have been asked to contribute and Ms. Patterson advised that it is intended to extend invitations for funding to all area Townships. Councillor Gazzola requested clarification as to how the ecoENERGY results for 2010 and 2011 estimates are derived. Ms. Patterson advised that they draw their assumptions from statistics documented by Natural Resources Canada. Councillor Gazzola raised concerns of the potential for participants in the LEAF funded projects to also benefit from ecoENERGY grant funding, questioning the feasibility of re-directing funds elsewhere to maximize potential benefits. Ms. Patterson advised that there is potential for some to also take advantage of the re-instituted Federal ecoENERGY grant program and suggested that the projects related to the LEAF funding could potentially be delayed until conclusion of the Federal program. She pointed out, however, that the LEAF projects had already commenced prior to the Federal government re-establishing their program and a delay would impact those already FINANCE AND CORPORATE SERVICES COMMITTEE OCTOBER 17, 2011 - 130 - CITY OF KITCHENER FCS-11-177 - ENVIRONMENTAL COMMITTEE RECOMMENDATION 1. WATERLOO REGION GREEN SOLUTIONS (REEP) - - ANNUAL REQUEST FOR FINANCIAL SUPPORT (CONT’D) participating. Councillor Gazzola noted that the organization’s Board of Directors has significant University representation yet the Universities are not financial contributors. Ms. Patterson advised that the Universities have not been approached for cash contributions but rather provide in-kind services in the areas of research and educational outreach. Ms. Patterson agreed to provide audited financial statements for year end 2010. A motion by Councillor D. Glenn-Graham was brought forward for consideration to increase the City of Kitchener’s annual funding contribution to WRGS - REEP from $27,500 to $30,000. Councillor Z. Janecki questioned if approval this date is a commitment to the funding request. Mr. D. Chapman noted that the staff recommendation provides that the funding request be approved subject to 2012 budget deliberations; however, he advised that if approved this date, this item would not be specifically highlighted again in the budget materials and it would be incumbent on Council to raise the matter to staff during budget deliberations if there are further concerns. Councillor B. Vrbanovic spoke in opposition to the proposed increase in funding support, noting that the organization has received additional grant monies from the City. He suggested that in the absence of rationale for an increase it would be premature and should be considered in the context of contributions made from all of the organization’s funding sources. Councillor D. Glenn-Graham’s motion to increase the City’s funding contribution to WRGS - LOST REEP to $30,000. was then voted on and . Councillor F. Etherington previously declared a pecuniary interest and abstained from all discussion and voting concerning this matter as he is currently participating in programming conducted by WRGS - REEP. Councillor B. Ioannidis’s original motion to approve an allocation of $27,500 to WRGS - REEP subject to 2012 budget deliberations was then considered. Councillor B. Vrbanovic suggested that if any member of Council was not inclined to support the funding request that those concerns should be conveyed now in fairness to the organization and their need to have a sense of available funding sources in planning their next year’s programming. On motion by Councillor B. Ioannidis - it was resolved: “That subject to consideration during the 2012 budget deliberations, $27,500. be allocated to the Waterloo Region Green Solutions, Residential Energy Efficiency Project (REEP), as part of the Environmental Committee’s 2012 Operating Budget.” Councillor F. Etherington previously declared a pecuniary interest and abstained from all discussion and voting concerning this matter as he is currently participating in programming conducted by WRGS - REEP. FCS-11-191 - EMPLOYEE ASSISTANCE PROVIDER (EAP) REVIEW AND STOP / LOSS 2. INSURANCE UPDATE The Committee considered Finance and Corporate Services Department report FCS-11-191, dated October 6, 2011 regarding provision of an Employee Assistance Provider for City employees and provision of stop / loss insurance coverage for the City. Councillor F. Etherington declared a pecuniary interest and abstained from all discussion and voting concerning this matter as his spouse is an employee of the company who previously held the role of the EAP provider. Ms. I. Magid advised that following the award of the role of the City’s group insurance provider to Sun Life in April 2011, work continued to engage a preferred vendor for the EAP program. In addition, staff in conjunction with Sun Life and Mercer (Canada) Limited, undertook a cost- FINANCE AND CORPORATE SERVICES COMMITTEE OCTOBER 17, 2011 - 131 - CITY OF KITCHENER FCS-11-191 - EMPLOYEE ASSISTANCE PROVIDER (EAP) REVIEW AND STOP / LOSS 2. INSURANCE UPDATE (CONT’D) benefit analysis of stop loss insurance. Staff is recommending that Homewood Health Solutions be awarded the role of the EAP provider effective January 1, 2012. In addition, an upset limit of $20,000 stop loss insurance for both in and out of country claims has been implemented for a period of one year. Councillor Z. Janecki requested clarification as to how the stop loss insurance is applied. Ms. Magid advised that the insurance mitigates the risk to the City of unanticipated, large claims, in that, any health claims in excess of the pre-determined annual limit of $20,000 will be absorbed by the insurance company and will not be charged to the City’s insurance program. Councillor J. Gazzola questioned the impact to the employee and Ms. Magid advised that there is no resulting change to the employee’s insurance benefits resulting from the addition of stop loss insurance to the City’s program. At the request of Councillor K. Galloway, Mr. D. Chapman agreed to highlight in the 2012 budget materials the anticipated savings resulting from the changes in the City’s insurance program. Mayor C. Zehr suggested that these savings should be shown in context of the impact to the tax base rather than just within the insurance pool. Mr. Chapman pointed out that it is likely that any savings will be off-set by the mandatory 1% increase in membership fees to the Ontario Municipal Employee Retirement (OMERS) fund; and advised that both would be highlighted in the budget materials. Councillor J. Gazzola questioned if the City has statistics on employee usage of the EAP program and Ms. Magid advised that she receives quarterly reports indicating percentage of use and the various types of counselling being sought. On motion by Councillor Z. Janecki - it was resolved: “That Homewood Health Solutions be awarded the role of the employee assistance provider (EAP) for the City’s employees effective January 1, 2012 at their quoted annual estimated cost of $53,000 plus HST.” Councillor F. Etherington previously declared a pecuniary interest and abstained from all discussion and voting concerning this matter as his spouse is an employee of the company who previously held the role of the EAP provider. CAO-11-023 - AMENDMENTS - ON-LINE COMMUNICATIONS STRATEGY / SOCIAL 3. MEDIA POLICY The Committee considered Chief Administrator’s Office report CAO-11-023, dated October 13, 2011 regarding proposed amendments to the City’s On-line Communications Strategy and Social Media Policy. Ms. A. Bailey advised that in 2010 single corporate accounts on Facebook, Twitter, Flickr and YouTube were established in accordance with the City’s policy and are administered by Communications staff. Other divisions, such as Economic Development and Special Events, have since expressed an interest in launching their own corporate social media accounts on Twitter to enhance their outreach beyond normal business hours and to engage community interest in their activities. Staff is recommending that two new Twitter accounts for Economic Development and Special Events be established on a 6 month trial basis and the incumbent staff be trained by Communications and Corporate Records staff on corporate social media guidelines and ‘netiquette’; as well as, in matters of online privacy protection. Following the trial period, staff will analyze the success and/or effectiveness of the new accounts and report back with recommendations going forward. Councillor K. Galloway questioned what other areas have expressed an interest over and above the two recommended for the trial. Ms. Bailey advised that interest has primarily stemmed from areas within the Enterprises, with both the Kitchener Memorial Auditorium and Golf Courses expressing an interest. She pointed out, however, that the two accounts recommended are considered to be the most appropriate as a starting point. Councillor FINANCE AND CORPORATE SERVICES COMMITTEE OCTOBER 17, 2011 - 132 - CITY OF KITCHENER CAO-11-023 - AMENDMENTS - ON-LINE COMMUNICATIONS STRATEGY / SOCIAL 3. MEDIA POLICY (CONT’D) Galloway suggested that the Auditorium would also be a good area to consider for the trial given opportunity to generate additional revenue. Councillor Galloway questioned if additional staffing is required to administer the new accounts and was advised that existing staff would assume this responsibility. Councillor Z. Janecki questioned the cost of the new accounts. Ms. Bailey advised that Twitter accounts are free and as no new staff is required there is, therefore, no cost to the City to establish the new accounts. Councillor B. Vrbanovic commented that Special Events will be entering a period of less activity during the trial period, questioning if it would be more appropriate to include the Auditorium at this time. Ms. C. Ladd advised that this matter was discussed at a Corporate Management Team meeting and it was agreed at that time to start small and grow over time to take advantage of lessens learned given there have been some reported issues in the use of Twitter when used by multiple parties in a single corporation. She added that unlike the Golf enterprise and Auditorium, the two areas recommended are ready to go and it was agreed to proceed with these on the basis that when the results have been analyzed, and if it is appropriate to add more accounts, the Golf enterprise and the Auditorium should be in better position. Councillor B. Vrbanovic raised concerns regarding fragmentation of the City’s messaging versus maintaining the advantage of a single account seen by all of the City’s followers, and asked that staff address this issue in the report following the trial period in context of the City’s overall communication goals. Councillor S. Davey shared similar concerns, encouraging staff to look at this from a public perspective to ensure fragmentation does not have an adverse impact. Councillor Y. Fernandes questioned if the staff involved will have to acquire a mobile device to administer the Twitter accounts. Ms. C. Ladd advised that staff in both areas already have mobile devices. Councillor Fernandes questioned the amount of time required for training. Ms. Bailey advised that an internal training module has already been developed and the staff involved will be required to attend a 1 hour session. On motion by Councillor S. Davey - it was resolved: “That proposed amendments to the City’s Online Communications Strategy and Social Media Policy be approved, allowing the City’s Economic Development Division and Special Events Team to launch their own corporate Twitter accounts for a trial period of six months, until April 24, 2012; and, That staff from both of these divisions who will be given access to either of these new Twitter accounts must first undergo training, provided by Communications and Marketing staff and Records Management staff; and further, That at the conclusion of the six-month trial period, Communications and Marketing staff will report back on the effectiveness of these amendments and seek further direction at that time.” FCS-11-193 - REQUEST TO CONVERT TEMPORARY POSITIONS TO FULL-TIME 4. POSITIONS RE: PARKING SYSTEM ADMINISTRATOR - DIRECT PURCHASE REPRESENTATIVE - - SENIOR QUALITY ASSURANCE The Committee considered Finance and Corporate Services Department report FCS-11-193, dated October 12, 2011 concerning a request to convert several part time positions to full time status. FINANCE AND CORPORATE SERVICES COMMITTEE OCTOBER 17, 2011 - 133 - CITY OF KITCHENER FCS-11-193 - REQUEST TO CONVERT TEMPORARY POSITIONS TO FULL-TIME 4. POSITIONS RE: PARKING SYSTEM ADMINISTRATOR - DIRECT PURCHASE REPRESENTATIVE - - SENIOR QUALITY ASSURANCE (CONT’D) Mr. S. Turner advised that the three positions are long standing temporary positions, similar in nature, for which their current workload justifies transitioning to full time positions. At the request of Councillor J. Gazzola, it was agreed that each of the three positions be dealt with separately. Parking System Administrator Mr. Turner advised that By-law Enforcement has absorbed administrative duties from other areas related to the parking trials process; administration of the private parking officers program; and data input of all hand written parking tickets. He stated that since taking on these responsibilities the number of parking trials processed has doubled; there are now 1,300 private parking officers authorized to issue tickets for over 1,000 properties; and the number of handwritten tickets range from 12,000 to 22,000 annually. He advised that the temporary position was created to reduce the need for officers to come in from the field to complete administrative work and to have the officers complete the work cannot be done without service impact. He added that the length of time the temporary position has been in place is indication that the workload is not diminishing and the position is the subject of a labour management issue related to the length of tenure. Mr. Turner advised that if the position were to be eliminated it will put the City at risk of non-compliance with Provincial legislation and have an adverse impact to revenues and response times. If approved, Mr. Turner advised that the wages and benefits associated with the temporary position will be transferred to the Divison’s full time salaries account resulting in no impact to their annual operating budget. Councillor Z. Janecki questioned if consideration has been given to providing private parking officers with automated devices for issuing tickets. Mr. Turner stated that the investment could not be justified given private parking officers are widely spread across more than 1,000 properties making the actual number of tickets issued by any one individual officer limited in scope. Councillor S. Davey questioned the feasibility of the temporary position becoming a ticket issuer if there was a method to automate issuance of tickets on private property. Mr. Turner advised that if that were possible, staff would have to work with the Union to change the structure of the job to include the element of enforcement. He added, however, that there is no capacity to add enforcement duties to the position at this time given it is the existing workload that is necessitating conversion to a full time position. Councillor Davey questioned the feasibility of having the private parking officers take on the responsibility of data input for the handwritten tickets they issue. Mr. Turner suggested that this would pose a challenge in that this is a large group, accepting responsibility to police their own parking lots at their own expense and the City in turn is receiving all of the fine revenues. He stated that it could result in this group abandoning the program and then calling on the City to enforce parking on their properties. Councillor J. Gazzola raised concerns with the private parking officer program, suggesting that the City should not be policing parking for privately owned businesses and it should not be looked upon as a revenue generator. Mr. Turner advised that it is the property owner who is helping the City by policing their own lots and while the City’s Private Property by-law could be rescinded, many would be upset as there is no other way for the private property owner to police their parking lots on their own. He added that the program is not in place necessarily to generate revenue but rather to provide a tool for the public to address illegal and other parking issues on their private property. Mr. Turner added in response to Councillor Gazzola, that seizing vehicles involves a legal process and if done, the property owner could be at risk if they do not comply with the law. Councillor Gazzola questioned if having this type of program is a common practice among municipalities and Mr. Turner advised that many municipalities have instituted a similar program. At the request of Councillor Gazzola, Mr. Turner agreed to provide Council with a comparison of revenues versus staffing costs in the absence of a private parking officer program. FINANCE AND CORPORATE SERVICES COMMITTEE OCTOBER 17, 2011 - 134 - CITY OF KITCHENER FCS-11-193 - REQUEST TO CONVERT TEMPORARY POSITIONS TO FULL-TIME 4. POSITIONS RE: PARKING SYSTEM ADMINISTRATOR - DIRECT PURCHASE REPRESENTATIVE - - SENIOR QUALITY ASSURANCE (CONT’D) On motion by Councillor Y. Fernandes - it was resolved: “That the Parking System Administrator position within the By-Law Enforcement Division be converted from temporary status to full-time status.” Direct Purchase Representative Ms. L. Baillargeon advised that this position originated in 2006 to provide support for the Customer Information System (CIS) testing, handling direct purchase contracts and managing large billing customers. Support for the Ontario Energy Board’s (OEB) Gas Distribution Access Rule (GDAR) has also been added to the duties of this position, which requires a consistent level of quality service to gas vendors. Ms. Baillargeon advised that it was intended to automate certain work performed by this position; however, other priorities have caused a delay in the development of an automated process. The increased workload performed by the temporary position justifies a move to full time and if the work is not done, the City would be at risk of non-compliance that could result in substantial fines levied by the OEB. Councillor D. Glenn-Graham questioned if there is any technology that could be adapted to reduce the workload. Ms. Baillargeon reiterated that plans to automate certain parts of the work were put on hold to accommodate other priorities, such as implementation of the Storm Water Management Utility; and there are now plans to change the CIS system. She noted that there are at least 3 projects awaiting automation that would equate to at least two years of full time work and if the CIS System is changed, it will bring a host of other matters to address. At the earliest, she anticipated between 3 to 5 years before reporting would become automated and even then there will still be a need for the position to analyse the work. In addition, restructuring in this area of Utilities is needed to address administration of the asset optimization and direct purchase contracts required by legislation for local gas distribution companies. Mr. D. Chapman added that in investigating plans to change the CIS System it is estimated that the work involved will result in approximately 3,000 person hours. He further noted that the process used by Union Gas was investigated and in terms of cost is in the millions of dollars. He stated that while an automated process may be ideal, in comparison to costs, moving this position to full time is more economical. Councillor Z. Janecki requested the salary amount for the position. Ms. Baillargeon advised that the existing wage for the position is approximately $40,000 and a slight increase in benefits is anticipated with the transition to full time. Councillor Janecki questioned if it has any implication to the tax base and Ms. Baillargeon advised that it would not as the position is funded through the Utility. Councillor J. Gazzola requested clarification as to the timing of replacement of the CIS System. Mr. Chapman referred to an earlier report to Council which provided information on an assessment undertaken by Prior & Prior in which they determined there is still good value in the current CIS System which is operated entirely in-house. However, the originating developer of the CIS System no longer supports the software and it was deemed not sustainable in the long term.Mr. Chapman advised that a business case is being developed to determine options for replacement and if it is decided to move to a new system, full implementation would be at least 3 to 4 years away. He pointed out that the work performed by this temporary position is not diminishing and the length of time it has been in place has become a labour relations issue. Councillor Gazzola questioned the harm in carrying forward on a temporary basis. Mr. Chapman advised that the Union Contract defines the perimeter of a temporary position as no more than 12 months and suggested that going to arbitration over extension of the term would not be in anyone’s best interest. A motion by Councillor Z. Janecki to defer to the 2012 budget deliberations consideration of the request to convert the Direct Purchase Representative position in Utilities from temporary LOST status to full time was voted on and . FINANCE AND CORPORATE SERVICES COMMITTEE OCTOBER 17, 2011 - 135 - CITY OF KITCHENER FCS-11-193 - REQUEST TO CONVERT TEMPORARY POSITIONS TO FULL-TIME 4. POSITIONS RE: PARKING SYSTEM ADMINISTRATOR - DIRECT PURCHASE REPRESENTATIVE - - SENIOR QUALITY ASSURANCE (CONT’D) On motion by Mayor C. Zehr - it was resolved: “That the Direct Purchase Representative position within Utilities be converted from temporary status to full-time status.” Senior Quality Assurance Ms. R. Bunn advised that this position was required in 2008 to help support the GDAR and is also having a positive impact on increased demands resulting from implementation of the SWM Utility. She expressed the opinion that for the City’s customers it is critical to have quality assurance in place and pointed out that replacement of the CIS System will also require extensive quality assurance for configuration of the new system. Clarification was provided in respect to how the temporary position is funded relative to that portion of the work in support of the SWM Utility; as well as, the salary range intended for the full time position. On motion by Councillor K. Galloway - it was resolved: “That the Senior Quality Assurance position within the Customer Information System team be converted from temporary status to full-time status.” FCS-11-187 - INTERIM FINANCIAL REPORT - AUGUST 2011 5. The Committee considered Finance and Corporate Services Department report FCS-11-187, dated October 7, 2011 which provides an update on City expenditures and revenues compared to the 2011 budget and explains significant variances as at August 30, 2011. Ms. S. Brisbane advised that staff have identified a potential year-end deficit of $1.91M, representing a negative variance of 1.3% on a $148M annual operating budget. Key variances include: a projected over-expenditure in Operations of $1.31M primarily resulting from the harsh winter experienced in early 2011; a projected deficit in By-law Enforcement of $285,000. due to an expected shortfall in parking fine revenues and increased staffing costs; a projected over-expenditure in Facilities Management of $300,000. due to higher than budgeted hydro costs, unbudgeted maintenance costs and lower recoveries from capital projects; higher than budgeted electricity costs for street lighting resulting in a projected deficit in Engineering of $112,000.; and higher than budgeted fuel costs resulting in a $0.4M projected deficit in Fleet. Other areas impacting year-end estimates that require close monitoring include: supplementary taxes and tax rebates / refunds / reductions which occur late in the year; impact of potential change in interest rates to investment income; and a projected deficit of $200,000 in the budget for gapping. Ms. Brisbane advised that staff is continuing to take action to mitigate the amount of the projected deficit through similar policies implemented in 2009-2010, as well as review potential close-out of unexpended capital balances, all of which is expected to be sufficient to off-set the projected year-end deficit. She then provided an overview of activities related to: Building Enterprise; Golf Courses; Parking Enterprise; Water and Sanitary Sewer Utilities; Storm Sewer Utility; Gas Utility; and Investment Income, as outlined in Schedules 2 to 9 of report FCS-11- 187. Mr. D. Chapman commented that overall the financial position is positive; however, he pointed out that the Parking Enterprise and Sanitary Sewer Utility are not trending in line with budget estimates and will require monitoring through to the end of the year. He pointed out that capital close-out funds have historically been returned back into the capital program to fund new emerging projects; however, over the past several years they have been transferred to the tax base to mitigate year-end deficits. He cautioned that the ability to do so will decline over FINANCE AND CORPORATE SERVICES COMMITTEE OCTOBER 17, 2011 - 136 - CITY OF KITCHENER FCS-11-187 - INTERIM FINANCIAL REPORT - AUGUST 2011 (CONT’D) 5. time and noted that having transferred Storm Water Management (SWM) out of the tax base, any capital close-outs from SWM projects will benefit the SWM Utility rather than the tax base. Councillor Z. Janecki questioned the implication of carrying over a deficit into the following year. Mr. Chapman advised that if a deficit cannot be mitigated, the Municipal Act stipulates that the municipality must recover the deficit through tax rates in the following year. He pointed out that normally the Tax Stabilization Reserve Fund is used to off-set year-end deficits but has been depleted and is the reason why capital close-outs are being transferred to the tax base. He stated that this is not sustainable over the long term. Mayor C. Zehr questioned if the increased net revenue in the Golf Enterprise is due to the cost saving measures taken and was advised that is correct. He noted that while the Enterprise still carries a deficit it has substantially improved; however, he suggested that continued monitoring is necessary in respect to sustainability. Councillor Y. Fernandes raised concerns as to the number of staff present in the Council Chamber, noting that Council had earlier considered conversion of 3 temporary positions to full time due to work overload and questioned how the work of those in attendance was getting done. She acknowledged that some staff may need to be present but suggested that there should be awareness of the fact that a substantial deficit is projected for year-end and all should be cognizant of using staff time in an accountable way. In response to Councillor Y. Fernandes, staff provided clarification of various line items related to Economic Development, Arts & Culture, Special Events, Human Resources and Operations. Councillor Fernandes also requested clarification of the variance in contributions from Reserves and Mr. Chapman explained that this is a matter of timing in posting the transfers and will balance out at year-end. At the request of Councillor Fernandes, Mr. Chapman agreed to review the format used in the statements provided. Councillor K. Galloway responded to the concerns raised by Councillor Fernandes regarding staff attendance, stating that Council has made clear its expectation that staff be cognizant of the need to have appropriate staff available to answer their questions. She added that it is important that staff understand firsthand the views of Council and the direction given by Council and she did not want staff to feel that they could not attend. Councillor Galloway raised concerns that staff may now second guess whether or not Council wants them to be present and suggested the issue raised sends the wrong message that Council is untouchable. She stated that Council is not separate and staff’s attendance at meetings is important and part of their responsibilities. Ms. C. Ladd concurred with the comments of Councillor Galloway, adding that she did not understand the context of the concerns as conveyed relative to the projected deficit. She stated that the reasons for the projected deficit have nothing to do with workload but rather relate to the harsh winter experienced early in 2011, rising fuel and hydro costs, and a shortfall in the gapping budget. She added that the Corporation is considerably lean in staff such that it is difficult to meet gapping projections which was conveyed to Council during the 2011 budget deliberations. Ms. Ladd expressed concerns regarding the comments made relative to staff attendance at the meeting and their work not being done, pointing out that many staff throughout the Corporation work beyond their normal work day without compensation and do so because they are loyal, dedicated and hard working professionals. ADJOURNMENT 6. On motion, the meeting adjourned at 1:15 p.m. J. Billett Committee Administrator