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HomeMy WebLinkAbout2013-01-07 SFINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 7, 2013 CITY OF KITCHENER The Finance and Corporate Services Committee met this date commencing at 7:00 p.m. Present: Councillor S. Davey - Chair Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, Z. Janecki, Y. Fernandes, K. Galloway-Sealock, F. Etherington, P. Singh, B. Vrbanovic and J. Gazzola. Staff: J. Willmer, Chief Administrative Officer D. Chapman, Deputy CAO, Finance & Corporate Services M. May, Deputy CAO, Community Services J. Witmer, Acting Deputy CAO, Infrastructure Services R. Regier, Executive Director, Economic Development R. Hagey, Director, Financial Planning L. Johnston, Director of Communications & Marketing C. Goodeve, Supervisor of Legislative Services D. Livingstone, Committee Administrator 1.DRAFT 2013 BUDGET - PUBLIC CONSULTATION Councillor S. Davey welcomed members of the public and advised that this special meeting was being held to receive input and feedback from the public with respect to the draft 2013 budget. He stated that public consultation is the foundation of the budget process and recognized the importance of reaching as many citizens as possible to provide input and engage Council. He indicated that in order to facilitate consultation, many resources were available to the public and noted that input received will be taken into consideration for final budget deliberations to be held on January 17, 2013. Mr. R. Hagey presented a draft issue paper providing a summary of public input, advising it will be updated and redistributed as part of the final budget package. He reviewed the consultative measures, including: public meetings; a dedicated telephone line; email address; mail; posted budget information on the City’s website; advertisements in local newspapers; and social media technology. He detailed new public consultation methods used for 2013, including: a citizen survey conducted by the Research Centre at the University of Waterloo, in which 175 randomly selected citizens were asked about their attitudes towards tax increases and service levels. He stated that the results of the survey indicate that 62% of respondents preferred maintaining existing service levels at an inflationary tax rate at 2% to 2.5%. He added that other new methods for 2013 included an ‘Ask the Expert’ Facebook session, which focused on the 2013 Budget; and, an interactive budget website which was launched in mid-November and contained an online property tax calculator allowing citizens to see the impact of various budget cuts to their property tax. He indicated that all input will be provided in conjunction with the information provided by the delegations during the public input session to Council for final deliberation of the 2013 Budget. The Committee was also in receipt of correspondence this date from the following: Mr. Harald Drewitz, dated January 7, 2013, requesting a reduction to the proposed tax increase. Mr. Jerry Remers, Christie Digital, spoke in support of the proposed annual contribution to the Creative Enterprise Initiative (CEI), advising that the CEI provides great value for the investment. He stated that Christie Digital has a core mandate to enrich the community by supporting arts and culture and has committed $30,000. a year for the next 3 years to CEI as a demonstrated commitment to their value in supporting arts and culture. He indicated that the CEI acts as an umbrella organization which provides arts groups programs and opportunities to leverage funding, and gain traction towards self-sustainability. Mr. Remers responded to questions by advising that a strong arts and culture base makes the Region of Waterloo competitive when recruiting talent. He stated that it is necessary to offer a balanced and well-rounded quality of life when attracting individuals; and, that the CEI offers strategic branding to enhance the appeal of the area. He encouraged the City to take a long- term view of the CEI, and commit at least ten years of support so they may establish the strength of their branding strategy and continue to fill the funding gap identified by the Prosperity Council. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 7, 2013 - 2 - CITY OF KITCHENER 1.DRAFT 2013 BUDGET - PUBLIC CONSULTATION (CONT’D) Mr. Harald Drewitz, resident, advised that the proposed tax rate increase of 2.87% should be limited to the average rate of inflation reflected in the Consumer Price Index (CPI). He stated that the CPI is decreasing, as demonstrated by the November 2012 CPI of 0.8%, and questioned why Council did not request a further potential reduction of 0.5%. He referred to the Citizen Survey, which was completed in early summer of 2012, commenting that Staff has presumed the citizens based their responses on the current inflationary rate of 2.0% to 2.5%, and stated that the proposed increase of 2.87% is still above that rate. He pointed out that 62% of respondents preferred an inflationary tax rate increase while maintaining current service levels. He commented that the allocation of resources for Fire Services is not sustainable; and, recognized that Council will have no alternative but to reduce fire-fighting services in order to meet its compensation obligations, as determined through arbitration. Regarding further reductions, he suggested scaling down the Capital Forecast beginning in 2013 recognizing development charges would be reviewed in 2014 and would have an impact on the Capital Program. He summated that economic growth continues to be slow and the proposed tax increase would not be just to the private sector in the City of Kitchener. Mr. Drewitz responded to questions stating that the public consultation methods used this year were very effective, noting that staff responded quickly and efficiently to any concerns he brought to their attention. With regard to potential reductions, he suggested reviewing middle management staff positions and indicated that ultimately, a 1.3% rate increase would be appropriate. Mr. Tim Jackson, Centre In The Square, advised that he is aware of the current financial demands placed on the municipality, but encouraged the City of Kitchener to maintain a position of leadership and continue to invest in arts and culture in 2013. He referred to a potential inflationary increase and noted that property values in both residential and commercial classes have increased at a rate above the CPI, which can be partially attributed to the City’s investment to arts and culture amenities. Councillor B. Vrbanovic commented that the Region of Waterloo is fortunate to have three established post-secondary institutions and inquired as to how valuable it is to retain graduates in the area. Mr. Jackson indicated that the University of Waterloo attracts students and individuals from varied locales, and in order to retain graduates it is important to continue to make investments which enhance the amenities available within the Region. Mr. Ed Redgwell, resident, expressed concern related to the debt held by the City of Kitchener and urged Council to budget within its means to improve the financial position. He questioned the approval process for the Economic Development Investment Fund (EDIF), which in his opinion lacked transparency and proper public consultation. He commented that the City of Kitchener’s debt has increased to approximately $111M of permanent debt. He expressed further concern that the development of the Light Rail Transit would have negative long-term financial implications to the City and is not a desired service by the citizens of Kitchener. Mr. Redgwell responded to questions, advising that an appropriate increase in the tax rate would be limited to the inflationary rate of the CPI. He indicated that cancelling the allocations to EDIF would enable Council to achieve a budget increase proximal to the inflationary rate of the CPI. Mayor C. Zehr clarified comments provided by Mr. Redgwell, stating that the current debt held by the City of Kitchener is not permanent; and, that the process for approving EDIF was transparent. He further stated that all documentation has been provided to Mr. Redgwell on two separate occasions. Mr. Bill Tufts, Fair Pensions for All, advised that his organization advocates long-term fair pensions for all, and believes public sector pensions are unsustainable. He urged the Committee to investigate the Ontario Municipal Employees Retirement System (OMERS) short fall and implement a long-term financial plan to deal with the impending financial catastrophe caused by retirement in the public sector. At the request of the Committee, Mr. Tufts agreed to circulate a copy of a presentation he prepared regarding an analysis of the City of Kitchener’s compensation expenses. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 7, 2013 - 3 - CITY OF KITCHENER 1. DRAFT 2013 BUDGET - PUBLIC CONSULTATION (CONT’D) Ms. Alexandra Pintea and Ms. Yasha den Hoed, Kitchener Youth Action Council (KYAC), attended to express concern for the proposed reduction to Fire Service in the 2013 Budget. Ms. den Hoed explained that a reduction in the complement of fire fighters would result in increased emergency response times, thereby impacting the safety of citizens of the community. She referred to the Citizen Survey, which reported 79% of respondents did not want to see a reduction in services related to protection to people and property. Ms. Pintea and Ms. den Hoed urged the Committee to consider alternative budget reductions that do not impact safety, as the Youth Action Council feels that the decision to reduce the number of fire fighters places the population at risk. In response to questions, Ms. den Hoed indicated that KYAC had not been provided with statistical data from Fire Chief T. Beckett, which indicates that of the 900 calls received to the Fire Department in 2012, only 242 were fires. Councillor Y. Fernandes asked for clarification on what services or reductions could be suggested from KYAC, if fire service remained at the current level. Ms. den Hoed suggested that a proportion of the streetscaping, and beautification through gardening, could be completed by volunteers or co-op students from the university to reduce the operating costs of the municipality. Ms. Pintea confirmed that from KYAC’s perspective, maintaining the current service levels with an inflationary tax rate increase would be appropriate for the 2013 Budget. Mr. Iain Klugman, Communitech, appeared in support of continued financial allocation to support arts and culture in the 2013 budget. He advised that Communitech has successfully assisted in bringing 900 new technology companies to the Region of Waterloo in the past three years, resulting in 4200 employment opportunities. He stated that the innovative investments to EDIF, and in arts and culture, have been instrumental in Communitech’s successful competition for talent. Mr. Klugman advised that he had prepared a presentation and requested that it be distributed to the Committee by the Office of the City Clerk. Mr. Klugman responded to questions, indicating that when compared with other municipalities within the Region, the level of commitment from the City of Kitchener to the development and partnership with high-tech industry is evident through continued investment. He added that recruiting talent is the primary issue facing new companies and that a vibrant urban core offering arts and culture, and transportation, are all essential to ensuring relocation to the area. Mr. Mike Farwell, resident, appeared in support of balanced long-term investment in the municipality through infrastructure improvement and the vitality of the downtown core. He acknowledged that rate increases are required for improvements, commenting that although road reconstruction and infrastructure improvement can be a nuisance, the impact has been increased property value in his experience. He stated that the investments to EDIF continue to produce dividends, including a vibrant downtown. He added that to build communities with enjoyable amenities, short-term rate increases may be required but should be balanced with long-term gain. In response to questions, Mr. Farwell clarified that he is not encouraging Council to over- spend; but rather, achieve fiscal balance through the responsible long-term investment in the community and conservative allocation of resources. Mr. Dan Carli, Chair, Kitchener Public Library Board, advised that as a resident, he is in support of continuing long-term investment in community development. He stated that the investments made through EDIF have enhanced the vitality of the downtown core. He further acknowledged Council’s commitment to trails and arts and culture, which have enhanced the quality of life for residents. He cautions against approving reductions which would have long- term impacts to the municipality. Mr. Carli responded to questions, stating that it is important to his family to have a safe downtown. He added that from a youth perspective, his daughter has indicated that safety, as well as recreational amenities, are important. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 7, 2013 - 4 - CITY OF KITCHENER 1. DRAFT 2013 BUDGET - PUBLIC CONSULTATION (CONT’D) Ms. Erin Rudland, Downtown Kitchener BIA, advised that the proposed removal of six waste receptacles will have a negative impact on the business attraction efforts in the downtown core. She suggested a phased-in approach to their removal, with a transition period to provide the BIA with an opportunity to develop alternate ownership arrangements of the containers. In response to questions, Ms. Rudland confirmed that City Staff have been apprised of the request from the BIA to phase-in the removal of the containers. Councillor S. Davey requested information for Final Budget Day on the financial implications for the phased-in approach relative to the $29,000. potential budget reduction for the removal of the six waste receptacles. Mr. Gordon Hatt, Contemporary Arts Forum Kitchener and Area (CAFKA), spoke in support of the operating budget for the CEI. He stated that the CEI provides value to organizations, such as CAFKA, by providing opportunities to generate expanded audiences and garner financial support. He explained that CEI offers professional expertise in areas such as grant writing, that small groups may not have available and encouraged funding be maintained in order that organizations can reap the benefit of building a public profile through the assistance of the CEI. Mr. Hatt responded to questions advising that the transition from an organization which is dependent on external funding to a position of self-reliance is going to take time. He encouraged the City to continue allocating resources in support of arts and culture; and confirmed that to date, CAFKA has received $10,000. from the CEI. Mr. Cory Crossman, KOI Music Fest, spoke in support of the proposed funding to the CEI, stating that the organization is paramount to developing strength in the arts and culture sector in the community. He indicated that although KOI is a for-profit organization, the CEI has assisted the festival organization to become self-sustaining through their mentorship program, which has helped with networking and gaining sponsorship. He urged the Committee to continue funding the CEI on a long-term basis, as the value of the programs offered will be proven over time. Ms. Mary Sehl, Kitchener Cycling Advisory Committee, advised that the proposed 2013 Capital Forecast fails to sufficiently allocate $6.3M in resources to fully implement the strategies set forth in the Cycling Master Plan, and Multi-Use Trails and Trails Master Plan. She indicated that failure to designate funds will result in insufficient infrastructure and urged the City to renew their commitment to cycling by moving forward with the implementation of those Plans. Ms. Sehl responded to questions, indicating that the Cycling Advisory Committee was aware of the recent grant awarded to the City of Kitchener from the Community Infrastructure Improvement Fund in the amount of approximately $500,000. dedicated to primary trails. Councillor B. Vrbanovic referred to the disbursement of the $3M from the Local Environmental Action Fund (LEAF), which will be determined on Final Budget Day, noting it may be allocated to trail development. He stated that staff has been directed to prepare an Issue Paper for Final Budget Day demonstrating the impact of the LEAF funds, in incremental amounts, on trail improvement and development. Ms. Heather Sinclair, Creative Enterprise Initiative, provided clarification on the opportunities for assistance provided by the CEI to for-profit organizations. She stated that as KOI is an entry-level enterprise, it qualifies for the benefits provided by the programs offered through the CEI. She added that the small and mid-range for-profit organizations can provide economic benefit to the City of Kitchener and the Region of Waterloo; and accordingly, the CEI has worked with them to develop broader benefits through public relations and marketing to attract people to the area. She noted that a report will be brought forward referencing the legal ruling of public funds used for sectorial change. Councillor S. Davey thanked members of the public for their interest in the budget process and advised that their comments would be considered as part of the deliberations on Final Budget Day, being held on January 17, 2013. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 7, 2013 - 5 - CITY OF KITCHENER 2.ADJOURNMENT On motion, this meeting adjourned at 10:17 p.m. D. Livingstone C. Goodeve Committee Administrator Supervisor of Legislative Services