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HomeMy WebLinkAbout2012-01-09FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 CITY OF KITCHENER The Finance and Corporate Services Committee met this date commencing at 10:05 a.m. Present: Councillor S. Davey - Chair Mayor C. Zehr and Councillors J. Gazzola, B. Vrbanovic, Y. Fernandes, K. Galloway, P. Singh, B. Ioannidis, Z. Janecki 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. Ross, Assistant City Solicitor R. Gosse, Director, Legislated Services & City Clerk R. Regier, Executive Director, Economic Development G. Murphy, Director of Engineering J. Witmer, Director of Operations L. Johnson, Director, Communications N. Gollan, Manager, Stormwater Utility P. Harris, Manager of Licensing D. Ritz, Supervisor, Design & Development J. Billett, Committee Administrator D. Saunderson, Committee Administrator CSD-12-011 - 2012 APPOINTMENTS TO THE GRAND RIVER 1. ACCESSIBILITY ADVISORY COMMITTEE____ The Committee considered Community Services Department report CSD-12-011, dated December 22, 2011, requesting appointments to the Grand River Accessibility Advisory Committee. On motion by Councillor Y. Fernandes - it was resolved: “That the following applicants be appointed to the Grand River Accessibility Advisory Committee (GRAAC) for a 3-year term ending December 31, 2014, pending ratification by the partnering municipalities of the City of Waterloo, Region of Waterloo, Township of North Dumfries, Township of Wellesley and Township of Woolwich: Anthony Cashin City of Kitchener Reappointment Dorothy Staal City of Waterloo New Andrew Tutty City of Waterloo New Dawn Griffin City of Kitchener New Mike Shipley Township of Woolwich New .” CAO-11-031 - APPOINTMENT - ECONOMIC DEVELOPMENT ADVISORY COMMITTEE 2. The Committee considered Chief Administrator’s Office report CAO-11-031, dated November 23, 2011, concerning the resignation of the current Waterloo Regional Labour Council representative on the Economic Development Advisory Committee and appointment of an individual to fill the vacancy. On motion by Councillor Y. Fernandes - it was resolved: “That the resignation of the Waterloo Regional Labour Council representative, Len Carter, from the Economic Development Advisory Committee, be accepted; and further, That the Recording Secretary of the Waterloo Regional Labour Council (WRLC), Steve Sachs, be appointed to fill the vacancy of the WRLC representative on the Economic Development Committee for a term to expire November 30, 2012.” FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 2 - CITY OF KITCHENER FCS-12-003 - LIQUOR LICENSE REVIEW APPLICATION 3. THE HONEST LAWYER RESTAURANTAINMENT - 305 KING STREET WEST - The Committee considered Finance and Corporate Services Department report FCS-12-003, dated December 23, 2011, concerning a liquor license application by 2306776 Ontario Inc. (The Honest Lawyer Restaurantainment). Councillor B. Vrbanovic raised concerns with the conditions to be applied to the liquor license, given the size of the establishment which potentially could draw 440 patrons to the downtown site. He referred to past challenges years ago which brought about the need for a process of review which he was of the understanding had included consultation with Waterloo Regional Police Services (WRPS). He noted that in speaking with the Regional Police Officer responsible for matters concerning liquor control that the Officer was not contacted for input. Ms. P. Harris advised that the Liquor License Application Review Committee (LLARC) does not normally engage the WRPS in their review; adding that in this case, they felt there was no need to do so as the operator is well known from its other business establishments across the Province and having investigated those other businesses, found no concerns with their operations. Ms. Harris stated that the WRPS would only be consulted if the Committee is aware of existing problems with the operator and in this instance, there is no evidence of any concerns with this establishment. Councillor Vrbanovic noted that the Officer he had spoken with had indicated a desire to participate in the review process, suggesting the Committee should consider doing so as it was his preference the City take a proactive approach rather than have to be reactive as concerns arise. Councillor Vrbanovic stated that he believed there have been restrictions placed on other outdoor patios concerning the timing to stop serving alcohol, as well as, noise restrictions related to amplified sound. He further noted that this establishment will be in close proximity to the Eaton’s Lofts and questioned if similar restrictions should be considered in this instance which could be relaxed at a later date if no concerns arise. Ms. Harris advised that there has been only one patio in the downtown area that has had special restrictions imposed resulting from a Liquor License hearing in 2001, because of various known problems with that particular establishment. She stated that in this case, the circumstances are different, in that, there is no evidence of any problems with this establishment and the Committee has indicated they are comfortable proceeding without adding special conditions to the patio. Councillor Vrbanovic reiterated his concerns regarding a proactive approach to conditions related to amplified sound given past challenges within the downtown. Ms. Harris noted that there are two other existing patios in the area of the proposed establishment which do not have special conditions imposed and she suggested that caution should be exercised in placing conditions on a business when there is no evidence of any problems with the establishment. Councillor Vrbanovic questioned what conditions are to be applied to this establishment in comparison to the other existing businesses in the vicinity. Ms. Harris advised that the conditions to be applied are exactly the same as the other businesses in the vicinity, with no special conditions recommended. Councillor Vrbanovic referenced a previous business, Lucky’s Wings, in which special conditions were imposed at the start and then later relaxed. Ms. Harris advised that in that instance, special conditions were applied because the business owner had no prior experience in serving alcohol; whereas, in this case, the establishment operates their business across the Province and is very experienced in the industry. Councillor Vrbanovic suggested that a condition to require a paid off-duty police officer on weekends would be appropriate given the number of potential patrons to the business. Ms. Renee Roth, Operations Manager, The Honest Lawyer Restaurantainment, advised that they would be quite willing to hire an off-duty police officer during high volume periods and want to have a close relationship with the local police services. She noted that the business is designed to appeal more to a Corporate clientele to minimize potential for unruly situations and they also customize by involving themselves in community special events, such as Oktoberfest celebrations. She expressed the opinion that hiring an off-duty police officer did not necessarily need to be a condition of approval as they would do so in any event as the need arises. She added that they require time to determine how high volumes will reach given this is their first establishment in Kitchener and as volumes become known, hiring an off-duty police officer is an easy solution for them should it be warranted. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 3 - CITY OF KITCHENER FCS-12-003 - LIQUOR LICENSE REVIEW APPLICATION 3. THE HONEST LAWYER RESTAURANTAINMENT - 305 KING STREET WEST (CONT’D) - Councillor Vrbanovic questioned if there has been any dialogue with the residents of the Eaton’s Lofts. Ms. Harris advised that it is the responsibility of the Kitchener Downtown Business Improvement Area (KDBIA) to undertake consultation within the surrounding area on behalf of LLARC and it was her understanding that no concerns had been received. Councillor Vrbanovic suggested that this matter be deferred to provide opportunity for dialogue with the WRPS and for staff to confirm whether or not residents of the Eaton’s Lofts have been consulted. He stated that notwithstanding the business has a positive reputation, it is a large establishment and he would like to ensure the right conditions are in place up front. On motion by Councillor B. Vrbanovic - it was resolved: “That the following recommendation contained in Finance and Corporate Services Department be referred to the January 16, 2012 Council report FCS-12-003, dated December 23, 2011, meeting to provide opportunity for dialogue with the Waterloo Regional Police Services and residents of the Eaton’s Lofts, as well as additional information to be provided by staff concerning a comparison of conditions applied to other like establishments in the vicinity of the subject property, particularly as they would relate to operation of an outdoor patio: ‘That subject to the applicant entering into an agreement with the City including certain conditions of operating a licensed establishment as set out below, Council take no action to oppose the application for a liquor licence for 2306776 Ontario Inc. operating as The Honest Lawyer Restaurantainment, located at 305 King Street West, (herein referred to as the “Applicant”); and further, That the Mayor and Clerk be authorized to enter into an agreement with the applicant should they be willing wherein the applicant agrees to abide by the following conditions and to request they be added to their licence if the Alcohol and Gaming Commission of Ontario chooses to issue the licence: 1. to post in a conspicuous place and abide by the Downtown Licensed Establishments Code of Conduct; 2. to become an active member of the Downtown Kitchener Business Improvement Area’s License and Entertainment Committee and attend its meetings; 3. to abide by a set 50% monthly ratio of alcohol sales to gross refreshment sales (including food and other sundries), in other words alcohol sales will be limited to 50% of gross refreshment sales; 4. to stop serving alcohol by 2:00 a.m. daily; 5. to notify the Clerk of the City of Kitchener in writing of any application to change the license at the time the application for the change is made to the Alcohol and Gaming Commission, and not to expand the establishment without the consent of the City Council; 6. to comply with the Noise By-law and the Region of Waterloo Smoking By-law; and 7. these conditions shall bind all successors, assigns and subsequent licence holders (if any).” DELEGATION - 313 HIGHLAND ROAD WEST 4. REQUEST FOR WAIVER OF FEES FOR SITE PLAN REVIEW AND - DEVELOPMENT AGREEMENT REGISTRATION_______________ Councillor S. Davey advised that he had received notice this date that the delegation would not be attending this meeting, having met previously with City staff and was now satisfied with their proposed solution to his concerns. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 4 - CITY OF KITCHENER CAO-12-001 - CANADA’S TECHNOLOGY TRIANGLE (CTT) INTERNATIONAL 5. BUSINESS MISSIONS - TRAVEL AUTHORIZATION__________ The Committee considered Chief Administrator’s Office report CAO-12-001, dated January 3, 2012, requesting permission for the Mayor to annually participate in one CTT International Business Mission. Ms. C. Ladd advised that following on the success of CTT’s 2011 international business missions in which the Mayors of the 3 cities in the Region each participated in one mission abroad, CTT is now asking for the Mayors to continue their participation in one international business mission on an annual basis. The Mayors have agreed to do so to continue to open doors for regional economic development objectives related to foreign direct investment and the recommendation this date is seeking Council’s authorization for Mayor Zehr to attend one international mission per year, with the endorsement to include approval for the international travel under Council Policy II-35 (Conference, Seminar and Meeting Attendance/Expenses). The policy which talks about Council approval for travel outside North America is not specific to this kind of mission and could be interpreted as to not include this kind of travel because it only speaks to conferences and seminars. Accordingly, staff has brought this report forward for transparency and to ensure there is no question as to this initiative being in contravention of the policy. Councillor J. Gazzola questioned who benefits from these missions, be it the entire Region or individual cities. Ms. Ladd advised that both the Region and individual cities do benefit; adding that in addition to the Mayors a number of local companies participated in the Brazil mission, who have experienced additional investments in their businesses. Ms. Ladd pointed out that the agreement in respect to the Mayors participation is that they will represent the entire Region when abroad; adding that the decision to have one Mayor per mission eliminates duplication of efforts and is viewed as a cost efficient approach. Mayor Zehr commented that there is no question that the Mayor in attendance will promote their own municipality but pointed out that all presentations made to the host country reference the entire Region. He added that of the local companies who participated in the mission he had attended, two were from Kitchener and the remainder were from across the Region. He pointed out that Christie Digital from Kitchener did extremely well in gaining foreign clientele and the other local company, Desire2Learn is going back a second time to continue building on relationships made in Brazil. Mayor Zehr commented that it is not something that you can point to a direct benefit for the municipality and pointed out that the Brazil mission was actually investigative to set the stage for ongoing trade relations, the bonus being that it did result in gaining business right away which was not anticipated. Councillor Z. Janecki questioned if other types of businesses aside from high tech companies can participate, such as manufacturing. Mayor Zehr advised that the Brazil mission was open to any type of business and was not restricted to technology. Ms. Ladd added that a mission to Germany being discussed for 2012 has it’s economy heavy in manufacturing and while those listed for the Brazil mission are primarily high tech companies, she pointed out that Christie Digital also has a manufacturing component to their business. Councillor Janecki questioned that given it is the request of CTT to have the Mayors participate if it would not be appropriate for CTT to fund the Mayor’s travel expenses rather than the municipality. Ms. Ladd commented that a significant portion of CTT’s operating funds comes from the cities and there was discussion to determine if the cities may entertain an increased funding contribution; however, the Mayors preferred expenses to be covered directly by the municipality for purposes of transparency, as the Mayor’s expenses are reported publicly. Councillor Janecki requested clarification as to the intent of the recommendation in regard to whether or not it is an open ended approval or if would still come back to Council annually. Ms. Ladd advised that the intent is to have authorization granted by Council for the Mayor to attend one mission per year without having to return each year for approval so it is known to CTT that there will be a commitment to consistent participation. At the request of Councillor Y. Fernandes, Ms. Ladd advised that she would confirm for Council the amount of funding contributions made by the municipalities to CTT. Councillor Fernandes questioned what happens to the $10,000 associated with the travel expenses if there is no trade mission in any given year. Ms. Ladd advised that there is no specific funding FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 5 - CITY OF KITCHENER CAO-12-001 - CANADA’S TECHNOLOGY TRIANGLE (CTT) INTERNATIONAL 5. BUSINESS MISSIONS - TRAVEL AUTHORIZATION (CONT’D)_ set aside but rather monies for the Brazil mission came from within Council’s existing conference/seminar budget. She explained that Council is entitled to attend 3 conferences per year and the Mayor attended only one, leaving his unexpended portion of the conference budget available to cover these travel expenses. Ms. Ladd stated that the expense does not represent any increase in funding and if there is no trade mission in any given year then existing budget funds would simply not be expended on the activity. On motion by Councillor B. Vrbanovic, the staff recommendation was brought forward for consideration to authorize the Mayor to annually participate in one international business mission with CTT and such endorsement to include approval for international travel under Council Policy II-35. Councillor B. Vrbanovic commented that having only one Mayor at a time attend a mission demonstrates responsible use of tax dollars and these missions bring benefits to the entire Region. He noted that trade missions are about developing relationships over time and there is an expectation by foreign countries that political leadership will be involved. Councillor Vrbanovic added that the Federation of Canadian Municipalities (FCM) has been asked to build a program around this initiative, especially for those municipalities who do not have the expertise of an organization like CTT and is in the process of formulating a program with the Federal government. Councillor Vrbanovic suggested that Council may wish to have an update report in several years time on how the program is progressing, suggesting a report come back in 2013. Councillor Y. Fernandes acknowledged the importance of this kind of program, but raised concerns that the City is accruing expenses beyond the funding it already contributes to CTT. She suggested that it would be reasonable for this to come back each year for Council’s approval and could not support indefinite approval to expend $10,000 per year. Councillor J. Gazzola advised he also had no concerns with the missions given the importance of developing international trade relations but was concerned that it is the wrong time to be introducing additional expense to the City. He agreed that the expense should be covered by CTT which has been established to deal with these matters. A motion by Councillor Z. Janecki was brought forward to amend the main motion to provide approval for the Mayor’s participation subject to CTT covering the cost of the Mayor’s attendance. Mayor Zehr commented that the proposed amendment if approved would likely result in this City not participating in trade missions as CTT’s budget funds are already accounted for in their existing programming and the expense would represent an extra-ordinary cost that would not be in CTT’s capacity to carry. He noted that this is not about the Mayor but rather is about a long term vision to collectively set the stage to build trade relationships and was of the opinion it would be short sighted not to provide a commitment that will enable CTT to plan for this activity. Mayor Zehr added that municipalities are not paying the full costs as CTT does receive funding from the Provincial and Federal governments to assist with trade missions. He stated that there is no additional cost to the City’s budget, reiterating that funding for 2011 came from savings of his unused portion of Council’s existing conference budget and if approval were not to proceed, he suggested that the City will loose its momentum as it takes time to establish trade relations. Councillor K. Galloway commented that having the municipalities pay the costs directly is the most accountable and transparent way of covering the expenses given Council’s expenses are published for public review and suggested that to not proceed could result in the City being asked for an increase in its funding contributions to CTT. Councillor Vrbanovic questioned if staff have considered the Economic Development Investment Fund (EDIF) as a potential source of funding. Ms. Ladd advised that they had not considered EDIF, pointing out that it would only be a temporary option as the program is slated to close in 2013. She suggested that it would be more appropriate to give formal endorsement FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 6 - CITY OF KITCHENER CAO-12-001 - CANADA’S TECHNOLOGY TRIANGLE (CTT) INTERNATIONAL 5. BUSINESS MISSIONS - TRAVEL AUTHORIZATION (CONT’D)_ and have staff look at how it can be funded in the long term. Councillor B. Ioannidis referenced the recent closing of Maple Leaf Foods, commenting that these missions are a proactive mechanism to keeping such businesses operating in the Region. He suggested that rather than focusing on costs, Council should view this initiative as a means to promote the City and the Region and to facilitate companies in gaining more business. Ms. Ladd clarified that the recommendation is not asking for any funding but rather is only asking for authorization for the Mayor’s participation and for his participation to be endorsed under Council Policy II-35. Councillor Z. Janecki suggested that the recommendation as written implies the City will cover the costs and maintained that associated costs for the Mayors should be the responsibility of CTT. Councillor S. Davey stated that missions like this are not about educating Council but rather about economic development on a global scale, involving many companies within the Region, and suggested that whether companies are from Kitchener or not is irrelevant. He stated that these missions are more important than any individual’s conference budget and are not necessarily just about bringing in new business but also about maintaining existing businesses. Councillor Z. Janecki’s motion to amend the main motion was then voted on by a recorded Lost vote and , with Councillor’s J. Gazzola and Z. Janecki voting in favour and Mayor C. Zehr and Councillor’s D. Glenn-Graham, B. Ioannidis, Y. Fernandes, K. Galloway, S. Davey, B. Vrbanovic and P. Singh voting in opposition. Councillor F. Etherington was absent this date and accordingly did not vote. Councillor Y. Fernandes reiterated her desire to have this matter return each year for Council approval. Councillor Vrbanovic pointed out that his motion includes provision for a report to come back in 2013 to update on progress of the program; however, Councillor Fernandes maintained that annual approval should be required. Mayor Zehr reminded that the recommendation is simply to approve his participation and that his participation not be considered as part of the conference policy. Ms. C. Ladd provided further clarification concerning the issue related to Council Policy II-35 and advised that all that is being asked is to provide a commitment to CTT that the Mayors will participate each year in one international business mission and that the provisions of Council Policy II-35 will not apply in this case. Councillor Fernandes indicated that she was comfortable with the explanation given. On motion by Councillor B. Vrbanovic - it was resolved: “That the Mayor be authorized to annually participate in one international business mission with Canada’s Technology Triangle (CTT) to advance the regional economic development objectives related to foreign direct investment and that this endorsement includes approval for international travel under Council Policy II-35 (Conference, Seminar and Meeting Attendance/Expenses); and further, That staff report to the Finance and Corporate Services Committee in 2013 with an update on the progress of CTT’s International Business Missions program.” INS-12-010 - LOCAL ENVIRONMENTAL ACTION FUND (LEAF) 6. FUNDS FOR PARK & TRAIL PROJECTS________ - The Committee considered Infrastructure Services Department report INS-12-010, dated December 22, 2011 concerning the feasibility of utilizing LEAF funds to support park and trail deficits identified in 2012 Budget Issue Paper C11 (Park & Urban Forestry Strategic Plans). Mr. J. Witmer advised that staff reviewed the LEAF program criteria and evaluated what the program offers in context of the particular components of the capital park and trails program FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 7 - CITY OF KITCHENER INS-12-010 - LOCAL ENVIRONMENTAL ACTION FUND (LEAF) 6. FUNDS FOR PARK & TRAIL PROJECTS (CONT’D) - identified in the staff recommendation. The criteria under LEAF identified with each component is set out in Table 1 to report INS-12-010. He acknowledged that the LEAF program has not been as robust or transformational as originally hoped for and as a result, it was necessary to review the program to determine if it is still right to continue with it. He referenced two options for consideration, with the short term option to utilize LEAF funding and advising that the second option to use capital out of current funds over the entire 10 year capital forecast is provided to demonstrate the impact of not utilizing LEAF funds in favour of a tax supported option. Mr. Witmer reviewed the recommendation which provides for discontinuance of the LEAF program in its current form and disbursement of its funding to what staff has identified as the most important priorities and dollars needed to move forward with the specified projects initially. Mr. Witmer stated that this represents a small start to what is ultimately a $15M goal and equates to approximately 1/3 of the overall funds needed. Councillor B. Vrbanovic commented that the recommendation appears to take an all or nothing approach and questioned if other options were considered that would provide for only some of the LEAF funding to be used. Mr. Witmer responded that varied options were considered but pointed out that the park and trails program is in need of substantial dollars to achieve a proper start. He reiterated that the projects identified are considered of highest priority and the funding proposed represents only about 1/3 of the ultimate $15M goal. Councillor Vrbanovic questioned if consideration has been given to an option in lieu of using tax supported funds to reprioritize other capital projects within the current 10 year forecast. Mr. Witmer advised that staff have not specifically looked at a reprioritization of capital projects, noting that capital out of current is the only funding source for these components.He stated that with the new Utilities (Storm Water, Sanitary and Sewer, Gas and Water) there is no availability to use funding from these areas and these components must now be taken straight from the tax supported base. He added that pushing off a capital project would not help as it is not coming from the the same funded dollars and it was staff’s opinion the only real option to get started was to use LEAF funding; and from there it would be the strict application of funding for parks and trails out the tax supported base as a priority. Mr. Witmer further stated that staff have talked of identifying the allocation on billings for those components as it would show persons where the investment is going. Councillor P. Singh referred to the substantial allocation proposed for the Emerald Ash Borer and requested clarification as to the status of this project. Mr. D. Ritz advised that the $275,000 for 2011 is being used for the investigation process and the proposed LEAF allocation anticipates an actual start to removal of trees, inoculations and tree replacements. Mr. Ritz identified that 2017 is expected to be the peak period of tree mortality, beyond which the impact of the bug is expected to dissipate and funding levels will draw back. Councillor Singh requested clarification of the proposed LEAF funding for the Victoria Park Strategic Plan Phase 2. Mr. Ritz advised that after EDIF funds are no longer available, there is still work forecasted beyond 2013 in the Capital Forecast related to such things as tree planting and trail lighting that will need to be completed and it is proposed to utilize LEAF funding for this purpose. Councillor J. Gazzola raised concerns that comments from the LEAF Steering Committee in regard to dismantling the LEAF program has not been provided within the staff report. Mr. J. Willmer referred to comments in the report that speak to the lack of success in terms of whether or not the program has achieved transformational change or leveraged funds; as well as, a cost benefit observation related to the staff and community resources it takes to run the program versus the benefits gained. Councillor Gazzola suggested that there is insufficient detail given which should be provided. Councillor Gazzola questioned from where the projects recommended were derived. Mr. Witmer referred to budget Issue Paper C11 which detailed all of the information to show where the deficit is within the park and trails program, advising that staff took this plan and parceled it out to see how they could move forward, particularly with FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 8 - CITY OF KITCHENER INS-12-010 - LOCAL ENVIRONMENTAL ACTION FUND (LEAF) 6. FUNDS FOR PARK & TRAIL PROJECTS (CONT’D) - those components that had no funding, to ensure the dollars spent for those areas met criteria that could make use of the LEAF funding. He noted that some areas would not qualify under LEAF and those were not brought forward, advising that the schedule of work brought forward to be completed for 2012 - 2015 is based on meeting the LEAF criteria and available funding. Councillor Gazzola questioned if the criteria should be taken into consideration, suggesting that as it is proposed to discontinue the program the criteria no longer has any relevance. Councillor Gazzola referred to the issue paper that was presented during capital budget discussions, suggesting that it appears it was known then that LEAF was to be discontinued and questioned why this list was not provided at that time so that these projects could be considered in the context of all other capital projects for priority status. Mr. J. Willmer reminded that it was not staff who suggested the use of LEAF funding but rather it was direction of Council and all that staff have done is to identify capital works that need to be done but which are not currently funded. Mr. Willmer pointed out that Council asked staff for a plan as to how they could help with this matter. Councillor Gazzola questioned how the projects would be dealt with if there was no LEAF program funding. Mr. Witmer advised that it would become a discussion during the 2013 capital budget deliberations, pointing out that the reason Option 2 is provided was to show the impact of using tax supported funding if LEAF funding is not approved. Ms. C. Ladd commented that in the fall of 2011 Council attended a strategic planning session at which time presentation was made which focused primarily on the concern of the Emerald Ash Borer; however, information was also presented at that time on the environmental program in general. That was an introduction for Council to a substantial issue that would be coming in future and it was known that at some point in time Council and staff would have to try to deal with how they would move forward on the environmental agenda and the associated funding. She pointed out, however, that Council had given clear budget directions such that staff knew they did not have any room to even suggest adding to the capital program. As a result of 2012 capital budget discussions, Council made the suggestion to look at the potential to use LEAF funding to see if this could assist in moving forward on some of the environmental issues raised. Ms. Ladd expressed concerns regarding the comments made suggesting that this matter is being brought through a back door, pointing out that staff has been open and transparent from the beginning on the environmental issues facing this municipality and the fact that there is no funding, and now have been given an opportunity by Council to bring forward a potential solution for Council’s consideration. Mr. Gord Nicholls attended on behalf of the Friends of Hidden Valley to request that the Committee consider amending the recommendation of staff to utilize LEAF funds to purchase Hidden Valley lands and to complete the community trails system. Previous applications for funding by the group were declined despite their opinion the applications met all criteria under LEAF and he suggested that no plausible reason was given other than now was not the time. He suggested that recent events of the past year suggest that now is the time. He stated that enactment under the Ontario Species at Risk Act of a boundary area for the Jefferson Salamander, which includes approximately 75% of the Hidden Valley area, has made development of the portion of Hidden Valley under private ownership no longer viable and the commercial value of the property has decreased significantly. Mr. Nicholls asked that the staff recommendation be amended to provide LEAF funding allocations of $1.9M for a Grand River corridor park in Hidden Valley; $100,000 for the Walter Bean Trail completion; $1.25M for community trails; and $210,000 for trails in the Huron Natural area. Councillor B. Ioannidis questioned how the delegation would propose that the City fund the purchase of the privately owned parcel of Hidden Valley lands.Mr. Nicholls suggested that the City should undertake negotiations now with the property owner given the investment the owner hoped would materialize would now be extremely difficult to achieve given approximately ¾ of the Valley has been quarantined. He acknowledged that municipal dollars will be required to compensate the property owner but suggested the City is in position to achieve a good deal and add significantly to its assets. Councillor J. Gazzola questioned what portion of the lands are privately owned. Mr. Nicholls stated that it was his understanding that a small corner at Wabanaki Drive and Hidden Valley FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 9 - CITY OF KITCHENER INS-12-010 - LOCAL ENVIRONMENTAL ACTION FUND (LEAF) 6. FUNDS FOR PARK & TRAIL PROJECTS (CONT’D) - Road was acquired by the Region for purposes of connecting through to River Road; and the City owns a small parcel to accommodate a storm water pond. He stated that leaves approximately 200 acres (95%) of the lands owned privately. Councillor Gazzola asked how development of the lands might harm the remainder of the park. Mr. Nicholls stated that approximately 115-120 acres is ESPA protected and there is now restriction on the remaining 80 acres of open field concerning the habitat of the Jefferson Salamander, leaving only approximately 40 to 45 acres for development. The open fields sit above wetlands and currently the land is zoned industrial. He noted that the secondary plan for the area has not been reviewed and should an industrial accident occur there would be damage to the wetlands and potential flow into the Grand River affecting the water supply. He stated that serious consideration needs to be given to that portion of the lands and protected because of potential harm to the water supply. Councillor Z. Janecki questioned if the delegation would be amenable to adding the Hidden Valley lands as a 7th category and redistributing the proposed funding allocations proportionately. Mr. Nicholls stated that the group he represents has indicated that they believe the best use of the funding would be to complete several things well, including completion of the trail system and the addition of the Hidden Valley lands to the park system. Councillor Janecki stated that the City’s Official Plan is to be reviewed during which there would be opportunity to review the land designation for Hidden Valley and questioned if the delegation would take part in the public process of the review. Mr. Nicholls stated that if opportunity to do so was presented the group would participate but asked that they be given sufficient advance notice to prepare an approach. In response to Councillor Y. Fernandes, Mr. Nicholls advised that the group has suggested to staff on several past occasions that the secondary plan should be revisited and they were told it was under consideration but nothing has happened to date. Mayor C. Zehr referred to points made by Mr. Nicholls concerning storm water, questioning if he was referring solely to retention and absorption of rain water or to storm water flowing through the Valley. Mr. Nicholls stated that it is his understanding that the water sources in the Valley come from natural sources and from storm water entering through pipes which adds to that; and therefore, it is providing through the wetland a mechanism for filtration and cleansing of the water that flows through the area. Mayor Zehr suggested that this is a matter which requires more facts as staff has a differing view. Mayor Zehr advised of recent discussions concerning a debate of what area is actually included in the boundary to be set under the Ontario Species at Risk Act and questioned if the delegation is suggesting that $1.9M is the fair market value for those lands. Mr. Nicholls stated that embedded in that figure is what he thinks it would cost to purchase the lands. Mayor Zehr commented that the issue presented by Mr. Nicholls is a much larger debate than what is appropriate at this time and while he recognized the group’s view that this is an opportunity to speak as it relates to the LEAF funding, the future of Hidden Valley as has been discussed publicly and privately for many years is more complex. Mayor Zehr added that if in fact $1.9M is the value of the land or any lesser amount, he would question why the City would deal with it all because there are planning matters which will come into play that will determine the value of the land and there are places in which the City would be getting a substantial portion of that land in public ownership, or not be allowed for development at all, without costing the City anything. He stated that it is important if this request is to be given serious consideration that, that singular point be kept in mind because the issue of what development, if any, is for another day; adding that regardless of the current zoning there is not going to be any major plant or other development on that property any time soon. Mr. J. Willmer clarified the zoning referenced by Mr. Nicholls, advising that the lands surrounding Hidden Valley are actually zoned Business Park, which is distinctive from industrial zoning, in that it is most likely to be developed for office type uses rather than manufacturing. He stated that the reason staff has said now is not the time, is to respect the environmental assessment process that the Region is undertaking for the proposed road extension and to respect to the Region’s authority to complete that assessment before any decisions are made. He also agreed that as a general principle public monies should not be FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 10 - CITY OF KITCHENER INS-12-010 - LOCAL ENVIRONMENTAL ACTION FUND (LEAF) 6. FUNDS FOR PARK & TRAIL PROJECTS (CONT’D) - spent to buy lands that have the potential to be acquired at no cost. Mr. Willmer further suggested that if Mr. Nicholl’s logic is to be followed in which only 40 to 45 acres of the land is developable and using the $1.9M while assuming a land value of ¼ to ½ M per acre, that would purchase only about 4 to 5 acres and none of the natural area. Councillor K. Galloway stated that she had difficulty with discontinuing the LEAF program in its entirety, noting that those who submitted the Solar City application were told they could apply a second time if the project was successful. A motion by Councillor K. Galloway was brought forward for consideration to move forward with allocating LEAF funding in 2012 to the community trails at $250,000 and to the Walter Bean Trail completion at $100,000, subject to final budget deliberations; and staff report prior to the 2013 budget process outlining LEAF funding options for 2013-2015 and funding for 2015 and beyond. Mr. D. Chapman requested clarification it the intent of the motion was to temporarily suspend the program or for staff to carry on with current administration. Councillor Galloway confirmed that her intent would be for the program to be suspended at this time, pending the report to come forward so Council may have a larger debate around how the funds will be disbursed. Councillor S. Davey vacated the Chair at this time to participate in discussion and Councillor P. Singh assumed the Chair. Councillor J. Gazzola spoke in favour of the motion, agreeing that more discussion as to how the funds should be disbursed is needed and suggesting that the public also be engaged. He stated that he has been in favour of acquiring the Hidden Valley lands which is an important piece of land to the City and the Region as a whole; and if not acquired now, he suggested the opportunity may be lost and he would like to see provision set aside to acquire the lands in future. He acknowledged that the projects listed are all worthy but that they are existing assets that within time the City should be able to move forward on and suggested that the time is right now to position the City in respect to purchase of the Hidden Valley lands. Councillor B. Vrbanovic questioned if the motion is intended to include public consultation with the LEAF Steering Committee, Environmental Committee and any other interested citizen groups. Councillor Galloway confirmed that was her intent. Councillor Vrbanovic commented that he also had difficulty supporting elimination of the LEAF program and notwithstanding the challenges, he did not want to see the program totally abandoned as he is aware of groups that are looking to LEAF as an application source for future initiatives. He agreed that at some point the City will need to address issues with Hidden Valley and that some portion should come into public ownership but recognized there are still planning matters to be dealt with that may have impact to the cost factor. Mayor C. Zehr suggested that the timing of the report to come should be defined so that the discussion is concluded in a way that will help to construct the 2013 budget process and suggested that the report be presented to the Finance and Corporate Services Committee by no later than May 7, 2012; and if needed, there would still be time for follow-up in June prior to staff commencing to prepare their 2013 budgets. Councillor K. Galloway concurred with this approach. Mayor Zehr commented that he also had difficulty contemplating a change in purpose of the LEAF program; however, he noted that circumstances have changed and other pressures are present for which there is no funding and the LEAF funds present an opportunity to address these matters without imposing a tax increase. Councillor S. Davey stated that while he could support the motion, he had concerns that the funding allocations for 2012 do not have the impact of a reduction in the tax levy. He questioned why the Cycling Master Plan, most of the recommendations of which would meet LEAF criteria, was not considered at least in a stepped approach which could potentially FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 11 - CITY OF KITCHENER INS-12-010 - LOCAL ENVIRONMENTAL ACTION FUND (LEAF) 6. FUNDS FOR PARK & TRAIL PROJECTS (CONT’D) - reduce the tax levy. Mr. D. Chapman advised that an important distinction to make is that the Cycling Master Plan is to be funded entirely from parking rates so would be funded through the 10% increase in rates this year. Councillor Davey suggested that notwithstanding, Council could Increase the dividend from parking to the tax levy and phase it in over a few years. Mr. Chapman stated that while possible, staff has demonstrated through the budget materials that the level of dividend as it stands now is not sustainable. He added that there is no ability to maintain the current level of dividend within parking and so there is already pressure in that budget. Councillor Davey pointed out that what he is proposing is that $200K be funded by LEAF and next year the dividend would decrease by $50K, with LEAF paying $150,000, for a total cost of $500,000 that would be stepped in over a 4 year period so as to decrease the tax levy. Mr. Chapman concurred that this would present a method that does not worsen the parks budget and advised that the Cycling Master Plan was not considered as the intent of Council’s direction was to consider the backlog within the Park & Trails Master Plan. A motion by Councillor S. Davey was brought forward to amend the main motion to provide that in 2012 $200,000 be expended from the LEAF program to fund the Cycling Master Plan such that it would serve to reduce the 2012 tax levy from 3.9% to 3.7%. Councillor K. Galloway suggested that the proposed amendment represents a larger debate and would be better considered on final budget day. Mayor Zehr agreed that the Cycling Master Plan could be looked at but should be done in the context of parking matters at the budget session. He added that the LEAF funds are not surplus but rather are part of an existing budget that has not been fully expended. Councillor S. Davey advised that he was withdrawing his amendment but would raise this issue again at the final budget meeting. Carried Unanimously The following motion was then voted on by a recorded vote and by all members present. On motion by Councillor K. Galloway - it was resolved: “That the Local Environmental Action Fund (LEAF) grant program be suspended effective immediately; and, That subject to final budget deliberations, uncommitted funding from the Local Environmental Action Fund (LEAF) be utilized in 2012 to fund portions of the 2012 - 2015 park & trail capital projects as follows: 100,000 for Walter Bean Trail Completion; 250,000 for Community Trails; and further, That staff be directed to report to the Finance and Corporate Services Committee by no later than May 7, 2012, outlining LEAF funding options for 2013 - 2015 and funding options for 2015 and beyond, for the 2013 budget process; the report to also include results of consultation with the LEAF Steering Committee, Environmental Committee and any other interested citizens groups.” The Committee then recessed at 12:35 p.m. and reconvened at 1:05 p.m. with all members present, except Councillor F. Etherington. INS-12-001 - STORM WATER CREDIT PROGRAM - FINAL REPORT 7. The Committee considered Infrastructure Services Department report INS-12-001, dated December 23, 2011 concerning the 2012 storm water rate schedule and recommendations to implement a storm water credit program. Mr. N. Gollan presented findings of collaborative work with the City of Waterloo to develop a storm water credit policy, designed to reward property owners who own and maintain private FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 12 - CITY OF KITCHENER INS-12-001 - STORM WATER CREDIT PROGRAM - FINAL REPORT (CONT’D) 7. storm water management facilities. The objective of the policy is to encourage implementation of measures on private property to reduce total run-off volume and pollutant loading discharged into the City’s storm water management system (SWM). It is proposed to create two policies with one for non-residential and multi-residential property owners, and another for residential owners with less than 5 dwelling units. Each of the credit policies is to be tailored to address specific issues experienced within the two sectors. The total maximum credit for the non-residential / multi-residential sector is 45%, broken down into three components based on quantity control, quality control and education. The residential sector of less than 5 dwelling units also has a total maximum credit of 45%, broken down into categories based on the number of rain barrels, cisterns (small or large) and infiltration galleries, or combination thereof. Mr. Nollan provided a schedule for implementation of the credit program and outlined additional staffing requirements. The recommendation provides for approvals, subject to final budget deliberations, of the proposed storm water rate schedule, storm water credit schedules, amendment to By-law 2011-153 (Storm Water Charge By-law) and hiring of additional staffing. Cheryl Evans and Sharyn Inward, Waterloo Region Green Solutions (REEP), attended to provide information on the RAIN Program which is an ecological approach to storm water management. Goals of the program include: protection of water quality in lakes and rivers; encourages urban landowners to reduce volume and non-point source pollution entering rivers through storm sewers; measure results; and create a model for adaptation in other communities. In response to questions, the delegation advised that the program is delivered across Ontario, in 10 communities, by Green Communities Canada and within each community, locally by its member organizations. It was noted that education is only part of the program which also delivers contracts to local groups, such as REEP, to build and install storm water measures such as composters and rain barrels. The REEP House is used as an example to others as to what is achievable in reducing impact related to storm water run-off and energy efficiency. It was further noted that based on average rainfalls, in the first year of the program 3 approximately 4,200 m of rain water run-off was diverted across the Province and each year the new measurement is added to the previous year. Mr. Bob McColl, Pinegrove Community Association, advised that his group generally supports the concept of those who produce rain water run-off paying for managing storm water management costs. He noted, however, that while it works well in modern subdivisions where there is built in storm sewer, curb and gutter, there are pockets throughout the City that pre- date modern technology consisting of culverts and ditches. He stated that in the Pinegrove neighbourhood storm water is almost completely absorbed on private property and a number of homes are below grade of the road, such that rain water run-off from the road runs onto private property. Many homes have installed their own storm water systems to collect water from their property which is disposed of on site. Mr. McColl noted that these unique circumstances where whole neighbourhoods manage their own storm water is not mentioned in the report and they would like to see staff look at those neighbourhoods that do not generate storm water to determine the feasibility of exemptions. Mr. McColl added that one other th concern is the number of categories applied to residential properties, suggesting that a 4 category be created for extra large homes that are upwards of 5,000 sq. ft. and have 65% plus hard surface coverage. He noted that under the proposed credit policy and storm water rates the extra large homes are actually contributing less to storm water management than under the property tax system. In response to questions, Mr. McColl advised that road salt affects ability to maintain a healthy lawn and has experienced minor flooding on his property resulting from large storms. Further to issues raised concerning large homes, Mr. McColl agreed that those homes on septic systems require larger properties to accommodate weeping beds; however, he stated that most do not have homes 6 to 7,000 sq. ft. in size. He stated that the proposed fourth category is geared more toward homes of significant square footage with 60 to 70% hard surface coverage, suggesting that they should not be rated the same as those that have 1/3 of their value. Mayor C. Zehr questioned if the delegation understands that the credit system is an attempt to achieve fairness in that, he suspects that many homes in the Pinegrove area will qualify for FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 13 - CITY OF KITCHENER INS-12-001 - STORM WATER CREDIT PROGRAM - FINAL REPORT (CONT’D) 7. credits that would conceivably bring the net cost below that which was included in property taxes prior to establishing the Utility. Mr. McColl agreed in part but raised concerns with individual property owners having to make application for credits when the majority of storm water is already absorbed in ground on their properties. He suggested that while they can purchase rain barrels and qualify for credits this would not result in improvements because storm water is already being 100% absorbed in a majority of cases. Mayor Zehr stated that it is not feasible to attain perfection on how the policy is applied because there is too many variations but rather this is an attempt to achieve some element of fairness; and where properties have ability to reduce their impact to storm water it is likely to be a less expensive route than through property taxes. Mr. McColl agreed, reiterating his group’s general support of the concept and in particular, noting that it brings in commercial / institutional / industrial properties that through the property tax system were not contributing their fair share of the revenue required to manage storm water. Councillor Z. Janecki questioned if the 45% maximum credit was seen as fair. Mr. McColl stated that as an individual he thought it was a realistic number; however, some neighbourhoods may question why the credit is being restricted to 45% given they do not generate storm water run-off. Mr. G. Murphy clarified that the residential credit policy is focused on the volume of storm water captured by property owners, as defined by certain categories and with appropriate credits to apply. He stated that staff recognize there are some properties that have unique circumstances and will be taking a serious look at those; and they will likely be getting some form of credit based upon drainage running off of the municipal right-of-way onto their properties. Messrs. Bruce Buckingham, Tony Matlock and Paul Wygal attended on behalf of the residents of Queens Heights Condominium. Mr. Buckingham advised that the property has its own storm water management control system that reduces run-off to 0%, with all rain and snow melt captured and stored on site for reuse of the property. He noted that the credit policy applies to the individual property owner but suggested that in this case, the benefit of the credit should be paid directly to the Condominium Corporation to defray capital costs as they undertake the installation and maintenance of the storm water control systems and pay for water utilities. Mr. Derek Satnik spoke in support of the credit policy, stating that it should be done in such a way as to not jeopardize the City’s ability to manage storm water and suggested that staff undertake a periodic review to invoke further refinement of the program, citing an example of implementing permeable driveways for all residential properties. Mr. Gus Rungis, Grand River Conservation Authority (GRCA), presented an overview of the GRCA’s SWM Program which seeks to control urban run-off impacts of flooding, stream erosion and water quality. Mr. Rungis advised that the GRCA is supportive of credits to property owners to encourage proper on-site measures and would like to see periodic review of the rate and credit structure to optimize program goals, and implementation of an annual audit. In response to Councillor J. Gazzola, Mr. Rungis commented that considerable effort is put into best management practices for run-off from agricultural lands and there are incentive programs available in different jurisdictions but often they are private lands that may or may not be controlled. In respect to impact of run-off into the SWM system, he stated that each parcel of land is unique and suggested that flatter areas with better soil promote more infiltration and less run-off but when serious events occur, such as a 100 year storm, there will be run-off from most properties. It was also noted that all cities contribute to the GRCA’s operating costs and the GRCA manages certain aspects of the river and undertakes certain projects. Mr. G. Murphy added that the City does undertake a variety of capital projects, citing an example of the Grand River Stabilization Project which is fully funded by the City. Mr. Murphy advised that responsibility for this project was originally that of the GRCA, however, over time responsibility was transferred to the City. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 14 - CITY OF KITCHENER INS-12-001 - STORM WATER CREDIT PROGRAM - FINAL REPORT (CONT’D) 7. Ms. Jennifer Sinclair and Mr. Bob Hanna, Grand Hill Village Community, attended to raise concerns regarding the storm water fee as it relates to their neighbourhood, stating that their community receives no storm water service from the City which they suggest the application of a fee to their properties is counter to municipal legislation. Ms. Sinclair stated that the community does not contribute run-off to the City managed system as their properties have a high proportion of natural surface area and jointly, the residents own and maintain an additional wooded / wetland which also absorbs run-off. The delegation suggested that the credit policy is complicated and will be costly to maintain; and proposed that if the 55% of the fee is the real cost of storm water management this portion should be included in property taxes. It was further suggested that the remaining 45% should be charged to home owners who actually receive storm water services and those like the Grand Hill Village Community who do not benefit from storm water infrastructure and who do not contribute run-off to the system, should be exempt. In response to Councillor J. Gazzola, the delegation advised that they had brought forward their comments to staff but were not able to resolve the issue around the premise that all properties contribute to storm water run-off. Mr. Hanna also confirmed that the community residents jointly own and maintain the common lands situate in the Grand Valley with most residential storm water absorbed on their own properties and the valley receiving run-off from a development on Winifred Drive. Mayor C. Zehr referred to the delegations request for removal of the 55% and questioned if the delegation is aware that they were paying 100% of the costs previously through property taxes. Ms. Sinclair questioned if the amount paid previously now equates to the 55% or the entire amount. Mayor Zehr explained that the total SWM program costs of $8M were increased to $13M and had the costs remained in the property tax base the delegation would be paying 100% of their share of those costs; however, through the SWM Utility and credit policy they would now be paying much less. He added that through that process the City removed a significant portion from the residential sector to include the non-residential sectors because residents were paying a disproportionate amount. Ms. Sinclair suggested that by removing the costs from the tax base and having them separate may give license to increase the amount without the normal controls and balance if it remained in the tax base. Mayor Zehr advised that the same control and balance remains as Council is still the authority in such instance. Mayor Zehr also suggested that the delegation reconsider their use of the word “fraudulent” in their written submission relative to application of a fee for service as this suggests an element of criminality which is not the case. Mr. Peter Gates, River Edge Golf Club, stated that the SWM Utility program as structured will work well but must be equitable, raising similar concerns that not all properties add run-off into the City storm water system and is an issue that needs to be addressed. Mr. Gates stated that it was his understanding staff is introducing a roads related issue into the SWM program but maintained that roads are for the common good, including non-residents, and those costs should not be tied to individual properties. He asked that Council ensure there is equity within the context of what has already been approved. Mr. Gates also requested that consideration be given to the fact that the Club receives run-off from neighbouring properties who are also being charged a SWM fee by the City, asking that open space lands which contribute substantially to the goals of the SWM program be exempt and failing that, the by-law be amended to provide a mechanism wherein the net run-off from any given property can be determined and levy a fee accordingly. Councillor J. Gazzola requested clarification that the delegation is asking for a complete exemption but would be willing to pay their fare share if there is run-off from the property. Mr. Gates concurred, stating that he does believe the system is good for the community; however, he maintained that the Golf Club does not contribute any loading to any City managed SWM system. In response to further questions, Mr. Gates advised that the Club was required by the City to incorporate a road system and parking lot, as well as, design a SWM system to collect all water from the property into on-site ponds; the water from which is recycled for reuse on the property. Mr. Gates added that the cost of the SWM system was approximately $100,000. Councillor D. Glenn-Graham questioned where the delegation would propose run-off from common areas, such as roads, should be charged to. Mr. Gates stated that the City made a FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 15 - CITY OF KITCHENER INS-12-001 - STORM WATER CREDIT PROGRAM - FINAL REPORT (CONT’D) 7. conscientious decision to remove storm water from the tax base and for run-off from municipal property that the City must take responsibility for has to be collected and ultimately directed into the Grand River. Councillor Glenn-Graham commented that he was thinking in terms of roads benefiting the common good and how they should be funded. Mr. Gates suggested that if road construction requires a storm water component then SWM funding should be allocated and is exactly what those funds should be used for. Councillor Z. Janecki inquired if the delegation had approached staff for special consideration and Mr. Gates advised they had but without success to date given there appears to be no recognition that some properties do not add to the storm water system. Mayor C. Zehr commented that he did not fully agree with the delegates interpretation of roads, suggesting that some aspects as it regards any property have some responsibility from an operational perspective. Mayor Zehr advised that he had followed up with staff to determine if there is some flexibility in the credit system and referred to a clause within Schedule B dealing with application of credits that could accommodate some of the extra-ordinary circumstances. He suggested that Mr. Gates have a discussion with staff on this issue. Mr. Gates responded to the comments concerning roads, stating that the program speaks to run- off from individual properties; however, he pointed out that there are many properties of all differing sizes and road frontages and to try to marry road expenditures into the function of storm water was in his opinion inappropriate. Councillor J. Gazzola questioned how the maximum 45% was established. Mr. Gollan advised that the percentage was derived through the study process that took into consideration storm water costs and best management practices; and the upset limit is based on an assessment of SWM costs that could potentially be influenced by long term actions taken by property owners on private lands. Mr. Gollan further clarified that it was determined that every property contributes 55% of run-off into the system and only the remaining 45% is eligible for credit. He stated that this is similar to other funding models that have fixed costs, citing example of the Water Utility. Councillor Gazzola questioned why properties such as the Golf Club and Grand Hill Village Community are included in the fixed charge portion when they receive no service. Mr. Gollan stated that one of the challenges of the Utility is in using impervious surface as a surrogate to indicate amount of run-off and having heard those speak of 0% coming off some properties regardless of how heavy a rainfall, he pointed out that engineering principles suggest that is not the case as once saturated and rain continues to fall there is some run-off coming from those properties. He suggested that in defining the maximum credit there is service provided to every property in some respect by virtue of not being flooded out because the City’s system manages water and ultimately directs it to the Grand River so there is no damage to private property. Councillor Gazzola disagreed that normal rainfall would result in 55% run-off going out into the system and maintained that a property should pay only what it puts into the system. Mr. G. Murphy advised that staff have reviewed properties in the Grand Hill Village Community and approximately 9 of the 38 homes which back onto the Grand River appears to have drainage flowing off of the City right-of-way onto their properties and into the Grand River. He stated that staff has already stipulated that those properties would be eligible for credit and will be looked at individually. The balance of those properties utilize the municipal right-of-way, draining from the west to the east and not to the Grand River, going out onto the City right-of-way and down Grand Hill Drive. Accordingly, Mr. Murphy advised that the majority of the properties in the area would be required to pay the SWM rate unless they take measures to mitigate impact to the storm water system. He stated that the policy is attempting to address the majority of situations and staff understand there will be some extra-ordinary circumstances like those referred to by Mr. Gates and are willing to sit down and consider their concerns. Councillor Gazzola reiterated that staff is still saying that 55% is going into the system. Mr. Murphy stated that the intent of the analysis is to identify overall what property owners could do to influence the costs of the storm water program and that is how the maximum 45% figure was arrived at. He stated that the focus is on the overall storm water program and to suggest it is to parcel it out into 45% is not correct but rather it is about 45% of the program which can be influenced by positive actions taken by the property owner. Councillor Gazzola maintained FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 16 - CITY OF KITCHENER INS-12-001 - STORM WATER CREDIT PROGRAM - FINAL REPORT (CONT’D) 7. that it is still a fee for service and some property owners should be exempt or pay only for what they put into the system, suggesting that the maximum 45% credit is not fair and equitable. Councillor Gazzola questioned how the figures for the number of residential and non- residential properties was derived. Mr. Gollan advised that during the study process an analysis was done on existing developments and a review of engineering on properties was undertaken to see how storm water management was done on residential properties. He noted that the information is available through the development process from which they were able to determine the number of properties with existing storm water facilities that are functioning. In regard to residential properties, staff was able to determine how many have infiltration galleries through the building permit system, equating to approximately 3,000 and an assessment was done of the Region’s Rain Barrel Program as distributed to Kitchener residents since 2001, and through survey information which indicated what percentage of residents might actually implement some form of best practice on their property; equating to another 5,000 properties existing with either rain barrels or cisterns that would be eligible once the credit program is available. Councillor Gazzola questioned the need to incur additional costs to hire new staffing for the program. Mr. Gollan advised that the volume of applications in the first year is anticipated to be high and staffing is needed to administer the process; as well as, to assist in public outreach and to ensure those receiving credit maintain compliance with functioning storm water facilities. Councillor Gazzola questioned the feasibility of the latter being conducted through an audit. Mr. Gollan advised that the intent is not to visit all 8,300 properties but rather is based on the model of the Region’s Toilet Rebate Program wherein a sampling is visited to ensure quality control. Councillor Gazzola raised concerns that when initially established it was his understanding there was to be no rate increase for the foreseeable future yet an increase of 3% is being requested. Mr. Murphy advised that in 2011 Council reduced the rate by 10% and the 3% referenced is simply returning the service level back to the $13M level over the next several years. Mr. Murphy added that the costs associated with the resource component was already included in the SWM Utility in its 2011 budget and is again in the 2012 budget; and therefore, staff is not increasing rates because of the credit program. He added that he did not recall indicating rates would not increase at all, referencing the normal process of establishing a rate structure over a multi-year work plan which would anticipate some inflationary changes and increases to the operating and capital program. Mr. D. Chapman added that Councillor Gazzola is partially correct in that the original model for the SWM Utility showed a sustainable service level at a consistent rate for 3 years, and thereafter it would increase by 3% per year. He added that Council made the suggestion last year to reduce the rate by 10%, and the model presented on final budget day showed the one time reduction and the 3% increase each year thereafter, so the increases did form part of Council’s approval in 2011. Councillor D. Glenn-Graham questioned whether roads are fixed costs for storm water management and whether there is run-off the City has to manage, because roads do benefit everyone. Mr. Gollan stated that the storm water portion of road works is a fixed cost in the sense that the City needs to pay now or pay later. In addition, he pointed out that there are other storm water structures in dire need of attention, such as storm water management ponds and watercourses which are identified in the storm water audit and prioritized to some degree in terms of improvements / maintenance needed to be done. Councillor Glenn-Graham questioned then that for those who say they do not receive a service there may be some calming features and benefits that are fixed costs they may not be considering and Mr. Gollan concurred. Mayor Zehr questioned if he was correct in saying that there was a built in figure in the budgets previously considered that allowed for an anticipated credit and Mr. Gollan concurred. Mayor Zehr questioned what the impact would be to the rate structure if the maximum 45% credit was increased to a higher amount. Mr. Gollan advised that to maintain the level of service being forecast and dependent on the uptake in the credit program, any increase from the maximum of 45% would lead to an increase in the base rate as well. Mayor Zehr stated that it was important to listen to some of the examples given today and have further dialogue with those in unique situations and try to give clearer answers before finalizing this matter. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 17 - CITY OF KITCHENER INS-12-001 - STORM WATER CREDIT PROGRAM - FINAL REPORT (CONT’D) 7. On motion by Mayor C. Zehr, the recommendation in report INS-12-001 was brought forward for consideration to approve, subject to final budget considerations, the SWM Rate Schedule and SWM Credit Schedules, as well as, amend existing By-law 2011-153 (Storm Water Charge By-law) and approval of additional staff resources. Mayor Zehr questioned the time required to obtain details concerning discussions he referred to with those properties owners who have raised unique circumstances. Mr. G. Murphy advised that staff could have those discussions with the property owners involved prior to the final budget deliberations on January 19 but was not confident there would be a resolution by that time. Mayor Zehr suggested that as the credit program is retroactive to January 1, 2011 but not coming into effect until July 1 of this year, that allows time to make the actual calculation up to July 1st. Mr. Murphy advised that there is a window of opportunity for property owners to apply that extends to March 1, 2013 giving a full year to apply for credits but suggested that the sooner approval is given on the policy the sooner staff can move forward with the credit program. In response to Councillor Z. Janecki, Mr. Gollan advised that in some cases SWM best management practices are compulsory in new developments based on sub-watershed requirements and pointed out that it is intended to link the credit application program with the development process to streamline properties for credit as they are developed. Councillor Janecki raised concerns that the credit structure is not really an incentive for residential property owners to undertake improvements given the costs they will incur to purchase rain barrels, cisterns, etc. versus the savings to be achieved will take a substantial number of years for payback. Councillor P. Singh questioned how many properties would qualify under the first category of 1 to 2 rain barrels at a 9% credit. Mr. Gollan explained that staff was able to determine under the Region’s Rain Barrel Program the number of barrels distributed but not where they were distributed to and therefore, assumptions were made as to how many existed per property and he could provide additional details around that analysis if desired. Councillor Singh suggested that it would be fair to say that out of the 8,300 properties eligible for credit, the larger percentage would qualify in that category. Councillor Singh questioned if there will be a review of the credit program within a specified timeframe. Mr. Gollan advised there is a reporting mechanism through the annual SWM audit process. Councillor Singh questioned the reason impervious driveways are not included in considerations as part of the credit program. Mr. Gollan stated that this could be looked at in further review; however, he noted that there are some concerns in the industry regarding promoting impervious pavement because it may actually exacerbate the chlorine impacts to ground water because generally pavement is where salt goes; adding that the Region and the City are trying to mitigate the impact to source water. Councillor Singh agreed with concerns raised that the costs to qualify negate the credit policy as an incentive for property owners to undertake improvements and would like to have this matter deferred to allow further debate. Councillor K. Galloway questioned how agricultural lands have been considered in respect to the credit policy. Mr. Gollan advised that the credit policy is the same for all properties but noted that when the rates were implemented a conscious decision was made to cap the rates for agricultural lands at the residential rate, a savings in some cases of hundreds of dollars per year. Mr. Gollan stated that the decision made recognizes the large, open spaces and potential benefits of farms and accordingly, the agricultural community has been taken into consideration. Councillor Gazzola requested clarification of discussions to be undertaken in respect to properties with unique circumstances and the potential for them to receive a higher credit than the proposed maximum 45%. Mr. Murphy advised that staff recognize there are some circumstances, such as mitigating where properties are experiencing run-off from municipal right-of-ways across their properties, that may warrant a higher credit. Mr. Murphy advised that these situations will be reviewed and a report with recommendations will come back for Council’s consideration. Councillor P. Singh commented that residential properties do not necessarily have the same capability to generate a high percentage of credit as do industrial / commercial properties and FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 9, 2012 - 18 - CITY OF KITCHENER INS-12-001 - STORM WATER CREDIT PROGRAM - FINAL REPORT (CONT’D) 7. needs to be taken into consideration. He expressed the opinion that more feedback is required in order to determine an appropriate mix for the credit program. A motion by Councillor P. Singh was brought forward for consideration to defer the main motion to the next Committee meeting to allow staff an opportunity to provide an impact analysis on variations of how the residential credit values could be applied. Following further discussion, Councillor Singh agreed to modify his motion of deferral to provide that paragraph one of the staff recommendation pertaining to approval of Schedule A (Storm Water Rate Schedule) of report INS-12-001 be dealt with this date and the remainder of the recommendation pertaining to approval of the credit policy be deferred to the January 30, 2012 Finance and Corporate Services Committee meeting. On motion by Councillor P. Singh - it was resolved: “That subject to consideration during the 2012 final budget deliberations, the stormwater rate schedule as specified in Appendix A of Infrastructure Services Department report INS-12-001, be approved and come into effect on March 1, 2012; and further, That the following recommendations contained in Infrastructure Services Department report deferred to the January 30, 2012 Finance and INS-12-001, dated December 23, 2011 be Corporate Services Committee meeting , to allow staff an opportunity to provide an impact analysis on variations of how the residential credit values could be applied: ‘That subject to consideration during the 2012 Final Budget deliberations, the stormwater credit schedules as specified in Appendix B and C of report INS-12-001 be approved and come into effect on July 1, 2012 with eligible credits applied retroactively to January 1, 2011; and, That the proposed by-law in Appendix D of report INS-12-001, amending the existing By-law 2011-153 (Storm Water Charge By-law) be approved; and further, That one (1) engineering technologist position (full-time), one (1) program assistant position (full-time), and two (2) engineering co-op student positions (May-August annually) be hired beginning in January 2012 so as to enable the advance of storm water related programs and the storm water credit program.” CAO-10-030 - ECONOMIC DEVELOPMENT INVESTMENT FUND 8. IMPACT ANALYSIS 2011____________________ - Chief Administrator’s Office report CAO-11-030 (Economic Development Investment Fund – Impact Analysis 2011), dated December 30, 2011, was received as information. ADJOURNMENT 9. On motion, the meeting adjourned at 4:00 p.m. J. Billett, AMCT Committee Administrator