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HomeMy WebLinkAboutCSD-12-085 - KW Humane Society ContractREPORT TO:Community and Infrastructure Services Committee DATE OF MEETING: June 18, 2012 SUBMITTED BY: Mike Seiling, Interim Deputy CAO, 519-741-2669 PREPARED BY: Shayne Turner, Director of By-law Enforcement, 519-741- 2753 WARD(S) INVOLVED: All DATE OF REPORT: June 11, 2012 REPORT NO.: CSD-12-085 SUBJECT: CONTRACT WITH THE KITCHENER-WATERLOO HUMANE SOCIETY RECOMMENDATION: That the Mayor and City Clerk be authorized to execute agreements, subject to the satisfaction of the City Solicitor, with the Kitchener-Waterloo and North Waterloo Humane Society and the Corporation of the City of Waterloo, for the provision of animal control, pound, dog licensing, and animal by-law enforcement services, as well as the animal spay-neuter program. BACKGROUND: The City of Kitchener has a long standing relationship with the KW Humane Society (KWHS), by way of agreements to provide for animal control, pound services, dog licensing, and animal by- law enforcement services, as well as spay and neuter programs.. The agreements are actually 3 party agreements, which include the City of Waterloo. Typically these agreements are developed and executed to run with the terms of Council. In January of 2011, Council adopted staff’s recommendation in Report No. CSD-11-006, providing for a 1 year extension to the 2007- 2010 contract, to give City and KWHS staff an opportunity to review and negotiate a variety of issues. As such, the current contract expired at the end of 2011 and this report discusses the negotiations towards a new contract. Both the City and KWHS have agreed to continue applying the terms of the expired contract while progress was being made in the current negotiations. REPORT: The financial structure of the City’s past contracts with KWHS is based on a base amount, paid to KWHS, which is subject to inflationary adjustments year over year and a revenue sharing arrangement with respect to dog licensing fees. Services performed by KWHS include: ïð ó ï Provision of a Pound facility and performance of legislated Poundkeeper duties in accordance with by-laws and legislation - Provision of by-law enforcement services pertaining to the City’s by-laws regarding dogs and animals including the designations of potentially dangerous, dangerous, and prohibited dogs (it should be noted that the City’s By-law Enforcement Division also provides by-law enforcement services); - Inspections of exhibitions/circuses involving animals, pet shops, kennels, boarding kennels, and doggy daycares pursuant to applicable by-laws; - Catching and impounding of stray dogs, picking up stray cats, and picking up injured or dying wild and domestic animals; - Removing and disposing of dead animals from public places; - Assisting the Fire Department and Waterloo Regional Police Services in capturing, removing, and sheltering domestic animals; - Assisting to the City in creation or refinement of by-laws respecting animals; - Keeping records in accordance with standards set out in the Agreement and provincial legislation; - Administering the City’s dog licensing by-law program, based on a revenue sharing model (details to be discussed later in this report); and - Administering the spay and neuter program contributed to by the City (details to be discussed later in this report). As staff entered into negotiations with KWHS in 2011 and subsequently into this current year, there was an understanding between both parties that a full clause by clause review of the contract should be undertaken to ensure that the contract reflected the actual services provided by KWHS. Over time, it is believed that the actual services provided, had expanded significantly from what the contract states, all the time being for the better, to the point that the contract did not accurately represent the current situation. It was understood and accepted that such an in- depth review would likely take longer than first anticipated when staff recommended a 1 year extension. However, the longer term benefits and contract clarity would be worth the effort and the time required. As a result, staff believe that the draft contract being recommended to Council is an accurate reflection of the current relationship, meeting the expectations of both parties. The following is an overview of the key elements and changes from previous contracts. Administrative Language A great deal of language in the previous contracts was adjusted to accurately reflect current services provided. It is believed that the refining of the contract language will facilitate a more streamlined negotiation process in future years, by allowing staff to concentrate on the elements of the agreement most likely to undergo negotiation, (ie. financial compensation). ïð ó î Term of Contract Both parties are recommending an initial 2 year term for the draft contract, with an understanding that the aim of subsequent contract negotiations would be 4 year terms. This initial 2 year term will serve 2 purposes. Firstly, it will allow both parties to further engage in the development of initiatives aimed at a “responsible pet ownership strategy”. Secondly, it will offset the expiry date of future contracts so as not to coincide with the term of Council. The net result of this change is that a newly elected Council will not be required to consider such an extensive contract so early in their term. Base Contract Amount Staff are recommending a 2% inflationary increase for 2012 and 2.75% in 2013. Staff believe that this increase can be accommodated within the existing budget allocations, with details provided in the Financial Implications section. Dog Licensing Program During the course of our negotiations, the Humane Society identified its concern that it has been chronically underfunded in provision of animal services. The Humane Society presented some basic financial data indicating that Kitchener’s per capita animal services costs are much lower than the amounts paid in other municipalities across the province. The Humane Society also identified a concern that the past model for sharing the dog licensing revenue is structured to favour the City in terms of future growth and provides virtually no financial incentive for the Humane Society to expend resources on growing the licensing program. The City and the Humane Society explored ways to increase funding to the Humane Society without negatively impacting the tax base. The Humane Society provided some details on how it may be able to increase the number of dog licences being purchased in a manner that is mutually beneficial. As such, staff are proposing a refined cost sharing structure which is more equitable for the KWHS and provides them with a distinct financial incentive for growth, while at the same time providing a guaranteed revenue stream for the City which is higher than in previous years. The old model included a base payment of $177,137 to the Humane Society with a 50/50 split of licensing revenue over that base payment but did not allow the Humane Society to retain any portion of increases in the prices of licenses since 2007. In 2007, the Humane Society retained approximately 86% of licensing fees pursuant to this arrangement but by 2012, the Humane Society’s portion had dropped to approximately 47% of licensing fees collected as they did not share in the rate increases over that time frame. The City’s total payment from licensing revenue in 2011 was $194,568. The new model requires the Humane Society to pay the City the greater of $207,263 or 36% of total gross licensing fees collected by the Humane Society in each of 2012 and 2013. This guaranteed minimum payment exceeds the City’s share of licensing revenue from 2011. However, this arrangement allows the Humane Society to share cost of living increases to licenses and will hopefully make it worth the Humane Society’s while to allocate additional ïð ó í resources to the enforcement of licensing provisions thus expanding the licensed base to the benefit of the City and the Humane Society. Spay/Neuter Programs For many years, the City has provided $30,000 annually for a rebate program relating to pets adopted from the KWHS. The aim of the program is to encourage people to have pets adopted from the Humane Society sterilized as a means of controlling animal populations. In the past, a person adopting an unsterilized animal from the Humane Society was required to leave a $75 deposit which would be returned upon presentation of proof that the animal had been sterilized. Additionally the purchaser would be given a voucher intended to equal the cost of a discounted sterilization procedure. These vouchers could be applied to a sterilization procedure with any vet. The vet would sign off and the Humane Society would then refund the voucher amount. Kitchener contributed 22% of the costs of the vouchers and Waterloo contributed 11%. Although this program assisted with the cost of the procedures and provided an incentive for owners to have the procedures done, it did not ensure that the sterilizations would take place. KWHS would prefer to ensure that every possible animal owned by the Humane Society is sterilized before leaving its care. To make this happen, the Humane Society would like to change the way they use the funds committed by the City. The end result is that there will be no increase in the $30,000 of funding the City currently provides, however the overall goal of the program will be significantly enhanced. As animals will be altered while owned by the Humane Society, the Humane Society can also benefit from lower rates based on their volume than an average pet owner would obtain. This enables the money contributed by the City to go further allowing more animals to be sterilized with these funds while substantially decreasing the administrative burden on the Humane Society. This also allows the Humane Society and the City to lead by example in modelling responsible pet ownership. Under the old program, the Humane Society contributed a minimum of 2/3 of the voucher costs (i.e. $90,000 if the Cities’ combined $45,000 contributions were utilized in full). The Humane Society will continue to be required by our agreement to contribute a minimum of $90,000 annually to this program although we understand that its actual contribution will greatly exceed this amount. Retention and Impound Fees The City requires KWHS to retain dogs they seize for a period of 5 days before they can adopted out or otherwise disposed of. This 5 day period is longer than the standard initially required by provincial legislation. In recognition of this, the City pays the KWHS an additional annual fee that amounted to approximately $7,300 in 2011. Conversely, the KWHS pays the City a percentage of the fees received as impound fees relating to dogs seized and impounded. In 2011, this amount was $9,850. During negotiations, both parties agreed that, from an administrative efficiency standpoint, both of these items could be dispensed with. In the final analysis, there will be a small net benefit to the KWHS of approximately $2,500 annually, which can be accommodated within the City’s ïð ó ì current operating budget allocation. Both parties feel that reducing the administrative work required to manage both payment structures makes sense. Summary It is staff’s opinion that the draft contract represents a significant advancement in the relationship with the KWHS. The contract provides incentives for KWHS to grow their programs and advance their strategic directions, while minimizing the overall financial impact to the City’s tax base. Going forward, the development of a “responsible pet ownership” strategy is a mutually agreed upon goal. It is the intent of City and KWHS staff to make a presentation at a future Council meeting, to outline the foundation of such a strategy, and test the guiding principles with members of Council. It should also be noted that, in the interest of fostering a meaningful and responsible relationship, City and KWHS staff are exploring other avenues that may assist KWHS in controlling costs, without any adverse impact to the City or the tax base. These discussions include such things as Fleet vehicle costs. Any operating cost savings experienced by KWHS can only serve to mitigate future negotiations relating to financial implications. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: The aforementioned amendments support the Community Priority of Quality of Life, as contained in the City’s Strategic Plan. FINANCIAL IMPLICATIONS: The following table is a summary of the revenue and expenses of the City pursuant to the proposed contracts. 2012 2013 Revenue Dog Licensing (based on a $207,263 $207,263 minimum guarantee) Expenses Monthly Services $491,536 $505,053 Spay/Neuter Program $30,000 $30,000 Total Expenses $521,536 $535,053 Net Cost $314,273 $327,790 It is staff’s opinion that the 2% increase in the base amount for 2012 can be accommodated within the current operating budget allocation. The 2.75% increase for 2013, will be incorporated into the 2013 operating budget process. ïð ó ë It should be noted that the revenue from the dog licensing program is a variable. The amount of $207,263 is an amount guaranteed by KWHS, in exchange for a new revenue sharing structure that provides them an incentive to grow the program. Depending on the success of their initiatives, additional revenue could be realized, which would positively impact the City’s budget variance. COMMUNITY ENGAGEMENT: The development and execution of this contract is largely administrative in nature, which does not require a significant community engagement strategy. Moving forward, the development of initiatives for a responsible pet ownership strategy will involve an element of community and stakeholder engagement. ACKNOWLEDGED BY:Mike Seiling, Interim Deputy CAO ïð ó ê