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HomeMy WebLinkAboutFCS-13-151 - 2014 Budget - Strategic Initiatives and Alternative RevenuesStaff Report Finance and Corporate Services Department REPORT TO: Finance and Corporate Services Committee DATE OF MEETING: October 21, 2013 SUBMITTED BY: Ryan Hagey, Director of Financial Planning 519- 741 -2200 x 7353 PREPARED BY: Ryan Hagey, Director of Financial Planning 519- 741 -2200 x 7353 WARD(S) INVOLVED: All DATE OF REPORT: October 11, 2013 REPORT NO.: FCS -13 -151 wvmkitrhener ra SUBJECT: 2014 Budget — Strategic Initiatives and Alternative Revenues RECOMMENDATION: That the issue papers for Strategic Initiatives and Alternate Revenues attached to report FCS - 13 -151 (2014 Budget — Strategic Initiatives and Alternative Revenues) be posted on the City's budget website for public input and referred to the December 12, 2013 special Finance and Corporate Services Committee meeting dealing with the 2014 operating budget. BACKGROUND: Council has already received report FCS -13 -120 (2014 Budget Process) which outlined the context heading into the 2014 budget, summarized the major issues impacting the 2014 budget, described the approach proposed by staff for the 2014 budget, summarized budget timelines, and outlined the public input plan. As part of this report, Council approved the following motion: WHEREAS the City of Kitchener has established Strategic Directions for Financial Management that, when setting direction for property tax increases, require the City consider: • comparison to other municipalities; • inflationary factors, including those unique to municipalities; and • balance of service levels versus affordability AND WHEREAS Kitchener has the lowest tax burden of cities in the Waterloo region and is well below the average of similar Ontario cities based on an independent study conducted annually by BMA Management Consultants Inc.; AND WHEREAS inflation projections for 2013 range between 1.3% to 1.5 %; AND WHEREAS Kitchener citizens and City Council have indicated a preference towards inflationary tax rate increases that maintain services; THEREFORE IT BE RESOLVED THAT staff be directed to submit the 2014 tax - supported budget with a levy increase not exceeding 1.25 %. BE IT FINALLY RESOLVED THAT staff be directed to bring forward suggestions for an additional 0.25% reduction to the 2014 levy increase, which could be achieved through C =I alternate revenue sources, such as the municipal sponsorship strategy, while having a minimal impact on service levels. This report provides additional 2014 budget information in advance of more detailed presentations on the capital and operating budgets, and is divided into three sections: • 2014 Budget Schedule • 2014 Strategic Initiatives • 2014 Alternative Revenues The issue papers relating to strategic initiatives and alternative revenues are included as part of this report, and are being tabled in advance of the operating budget presentation to allow time for Council to review the options and for the public to provide their input on the proposed options. REPORT: Budget Schedule The City of Kitchener's budget process has been underway at the staff level for a number of months. Staff have spent the summer months developing the 2014 budget, and senior management is currently reviewing budget details in advance of presentation to Council. As has been the practice of Kitchener for many years, the 2014 budget will be discussed by Council in a public forum. The table below outlines the scheduled 2014 budget dates which the public are able to attend. User Fees Presented to Council November 18 Capital Budget Presented to Council November 21 Operating Budget Presented to Council December 12 Public Input Session (proposed) January 13 Final Budget Approval January 30 2014 Strategic Initiatives As part of report FCS -13 -120 (2014 Budget Process), staff indicated they would include a short list of strategic initiatives as part of the budget submission. Strategic initiatives have been an ongoing provision in the 10 year operating budget forecast, but have not been funded in recent years. Strategic initiative funding is meant to invest in enhancements to existing services, provide new services, or implement recommendations from master plans and audit reviews. Staff have developed a short list of strategic initiative proposals based on previous Council discussions /direction. Issue papers for each of the staff proposed strategic initiatives have been included as part of this report, but detailed discussion is not planned until the operating budget is presented in December. This will allow substantial time for review in advance of that meeting and before finally setting the 2014 budget in January 2014. 2014 Alternative Revenues As noted above, part of the motion from report FCS -13 -120 (2014 Budget Process), was for staff to bring forward suggestions for an additional 0.25% reduction to the 2014 levy increase by focusing on alternative revenue sources while having minimal impacts on service levels. 4 -2 The Corporate Management Team, which consists of all City directors and department heads, undertook an interactive brainstorming session to identify potential revenue generation options across the City. The most viable options are being presented for Council's considerations. Issue papers for each option have been included as part of this report, but detailed discussion is not planned for most options until the operating budget is presented in December. This will allow substantial time for review in advance of that meeting and before finally setting the 2014 budget in January 2014. The one exception relates to the alternative revenue issue paper regarding an additional 1% increase to user fees (on top of the proposed 2% increase for most fees). If this is something Council would like to move forward with as part of the 2014 budget, it would be advantageous to approve the additional user fee increase as part of the broader discussion of user fees on November 18. If Council approves a 3% increase to user fees on November 18, these fees will come into effect January 1. If Council waits until final budget day in January and then approves the additional fee increase, the new fee structure will not be in place until April 1. This will result in less revenue being generated in 2014, may cause confusion for citizens as the rates will increase twice in one year, and will cause additional administrative work to update the user fee schedule part way through the year. ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN: Foundation: Efficient and Effective Government Goal: Financial Management Strategic Direction: Strive for competitive, rational and affordable taxation levels FINANCIAL IMPLICATIONS: None. COMMUNITY ENGAGEMENT: For the 2014 budget process, staff will employ a suite of traditional and electronic engagement methods in an effort to effectively inform and consult citizens. Staff will again receive feedback through mail or phone call, advertise the budget meeting schedule in City facilities and online, establish a dedicated budget web page which will contain all public budget information, and post budget updates on the City's Facebook page and Twitter feed. As well, two new initiatives piloted during the 2013 budget process will be continued for the 2014 budget process in an effort to further engage the public. These two methods are: An "Ask An Expert" session on Facebook dedicated specifically to the 2014 budget An interactive budget website which allows citizens to vote for various budget options and provide written feedback. The dedicated budget website containing all public budget information and the interactive portion of the website will be fully operational within two weeks of Council approval of this report. The interactive portion of the budget website will allow residents to model different budget scenarios by choosing which strategic initiatives or alternative revenue items they would support and then could see the impact on their projected tax bill in real time. 4 -3 Based on the array of public input opportunities, citizens will be able to provide their input by: • Writing /phoning City Hall • Attending the public input session planned for January 2014 • Attending the virtual Ask An Expert Facebook event dedicated to the 2014 budget • Responding to the City's Facebook /Twitter posts about the 2014 budget • Completing the questions on the interactive budget website • Contacting their ward councillor ATTACHMENTS: • Strategic Initiatives Issue Papers • Alternative Revenue Issue Papers ACKNOWLEDGED BY: Dan Chapman, Deputy CAO (Finance and Corporate Services) CSI Stratec0c Initiatives Issue Paper (IP) Index 4 -5 Included in IP # Description Proposed Budget? SI 01 Improve Citywide Bylaw Enforcement No S102 Improve Customer Service and Efficiency through Mobile No Technology S103 Improve Infrastructure Data Management to Better Support No Spending Decisions S104 Proactive Street Tree Maintenance No 4 -5 ISSUE: SI 01— Improve Citywide Bylaw Enforcement FUND: Operating DEPARTMENT: Community Services — By -law Enforcement PREPARER: Shayne Turner, Director of By -law Enforcement BUDGET IMPACT: $179,409 tax OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE: Respond to a significant increase in bylaw enforcement service requests from the community by shortening response times and ensuring bylaw officers are available 24/7 to respond to calls from the public. RATIONALE / ANALYSIS: On August 26, 2013, City Council received the results of a service level review of the Bylaw Enforcement Division which demonstrated that over the past several years the numbers of service requests being made by residents has grown significantly. For example: • 80% increase in noise complaints from 2002 to 2012 (2,068 to 3,783); • 220% increase in total calls for service for Noise Officers (includes other by -law types) from 2002 to 2012 (2,224 to 4,979); • 300% increase in parking complaints from 2002 to 2012 (1,330 to 4,014). In addition to a significant increase in the number of calls received from the public, since 2002 the Bylaw Enforcement Division has been required to provide services in a number of new areas. These include (but are not limited to): licensing inspections, open air burning, snow events, student housing, public nuisance, graffiti, site alterations and tree cutting bylaws, towing and snow dumping on roadways. At the same time as service demands have increased within the Bylaw Enforcement Division, staffing levels have remained relatively constant. As a result, during peak periods (late evenings and weekends), response times can be as long as 3 hours depending on the nature of the complaint and the time of day when it is received. In addition to slower than acceptable response times, approximately 26 hours per week, there is no Bylaw Officer on duty to respond to complaints from the public (e.g. noise, public nuisance, backyard fires). The number of calls received during times when no officer was available to respond has increased from 130 in 2008 to 301 in 2012. This has essentially meant there was no response to those calls, or a very late response which is often ineffective given the nature of the issues. The addition of two Bylaw Enforcement Officers would provide the following benefits: Improved response times by filling gaps in the existing staffing schedule and ensuring an officer is on duty 24 hours a day, 7 days a week to respond to public complaints. The addition of 2 FTEs would allow for a schedule that will provide full 24/7 coverage. Staff has experienced an increased public expectation with regard to not being able to access 4 -6 enforcement services during certain times of the week. Now that residents are able to call the main bylaw enforcement line 24/7 and get a live response, they also expect an officer will be available 24/7 to respond to a call in a timely manner. 2. Improved response times by providing for extra officer coverage during times when the City traditionally experiences high call volumes. The two additional FTEs would be assigned as Noise Enforcement Officer and would perform enforcement duties related to the noise bylaw, as well as the Open Air Burning, Public Nuisance and Traffic By -laws. They would also play a key role in supporting Parking Enforcement, particularly during evenings, overnight and weekends. Current staffing levels often allow for only one Noise Enforcement officer to be on shift during peak demand periods such as late evenings or weekends. The addition of these two positions would provide for improved response times during peak periods and will lessen concerns expressed from the public when they are not allow able to receive a timely response to their complaint. 3. Mitigate safety risks to officers by providing for increased times when officers can support /back -up one another when responding to a call with an elevated level of risk; as opposed to only one officer attending to the call. Staff are noticing an increase in the number of incidents where an officer's safety has been jeopardized, either by a specific incident or by an identifiable "near miss." The overlap of officer coverage provided by the addition of two FTEs would mitigate some of these risks by allowing for a joint response (officers teamed together) when responding to calls where elevated risks are identified. 4. Increased bylaw enforcement presence /capacity in Lower Doon. On June 24, 2013, City Council directed staff to consider additional bylaw enforcement in Lower Doon and Doon Pioneer Park as part of the 2014 budget process. This proposal to add two FTEs will allow for increased capacity to provide an increased level of enforcement and presence in the Lower Doon area to focus on: 1) proactively engaging the tenants to help mitigate the nuisance concerns identified; and 2) providing for zero tolerance enforcement where circumstances are warranted. BUDGET IMPACT: This initiative requires two additional full time equivalent (2 FTE) Bylaw Enforcement Officers. Total cost of two additional Bylaw Enforcement Officers is $179,409 (including salary, fringe and administrative expenses). In addition to the service improvements and shorter response times that would result from the addition of two Bylaw Enforcement Officers, it is anticipated those new officers would generate approximately $40,000 in fine revenue (combined) annually that would assist in reducing the $215,000 chronic deficit identified in the April 2013 variance report. ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN: This proposal is linked to the Community Priority of Quality of Life. vwJ ISSUE: SI 02 — Improve Customer Service and Efficiency through Mobile Technology FUND: Operating DEPARTMENT: Finance and Corporate Services — Information Technology PREPARER: Dan Murray— Interim Director of Information Technology BUDGET IMPACT: $102,767 tax / $102,767 enterprise ($205,534 total) OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE: Further implement and support the use of mobile technology at the City of Kitchener to improve handling of citizen requests for service, provide faster response times to citizens, and improve efficiency and effectiveness through better use of data. RATIONALE / ANALYSIS: The Corporate Technology Strategic Plan (2010) identified "mobile computing for staff on the move" as one of the four key strategic areas of focus for the City. The mobile computing strategy was developed in 2013 in response to that recommendation and outlines the requirements to position the City to bolster the use mobile computing for members of the public, field workers and mobile staff to achieve the following: 1. Improved handling of citizen requests for service Increasing the use of mobile technology will be required in order for the City to establish a "closed loop" for two -way communications with citizens which forms part of the customer service vision. This means that citizens will be able to request service through any number of channels (e.g., mobile application, City website, Corporate Contact Centre) and this request can in turn be routed to front -line service staff via mobile technology. Once the request has been completed, information on the status of the request can then be immediately relayed back to the requestor by the field worker using mobile technology and also be tracked for reviewing performance against service levels in real time. This presents an opportunity for improvements in areas such as By -Law enforcement, where complainants have an interest in follow -up communications on the status of their requests. With the use of mobile technology, By -Law enforcement officers could update the status of calls in real time which in turn can be relayed to the complainant at any hour of the day. The addition of mobile computing resources is one of the essential actions required to establish this higher level of customer service. 2. Faster response times for citizens Providing technology to front -line employees enables the City to reduce the need for requests for service to be handled by multiple staff members before they are acted upon in the field. Over the long term, this will increase response times for citizens on selected services. For example, graffiti reporting is presently reported via a phone call to the Corporate Contact Centre, which is handled by a Customer Service Representative, entered into a work management system, prioritized by a Supervisor and assigned via a crew meeting to workers in the field. Using mobile technology, a resident could conceivably snap a picture of graffiti using their smartphone and immediately submit it with location coordinates via the City's mobile application. An automated workflow could immediately route the work request to the appropriate Supervisor or crew, enabling a much faster response. 3. Improve efficiency and effectiveness through better use of data Mobile technology will enable field workers to access better information in the field (e.g., infrastructure drawings and maps, property data, customer history, service request details, etc.) and will also allow field workers to capture data while still in the field. This will improve the ability of field workers to diagnose issues quickly, make better decisions, and complete their work efficiently and effectively. As an example, utility service connection details were historically maintained in hardcopy files. More recently, all of this data was converted to an electronic format in the Geographic Information System (GIS). Without mobile technology, field workers would still be required to print out hardcopy maps and diagrams, which can become outdated and do not provide the ability to capture details in the field based on actual physical conditions or work completed. Implementing mobile technology ensures that workers are using the most current information when undertaking repairs and maintenance. Mobile technology will also enable field workers to capture data remotely, reducing the need for the information to be handled twice, once in the field on paper and once in the office where it would be entered into a system. This would apply to many maintenance and inspection activities, such as routine valve maintenance, fire hydrant inspections, etc. Implementing mobile technology represents a significant new service offering for the Information Technology division and will have many facets, including: • Implementation of citizen - facing mobile applications to engage citizens and improve the handling of requests for service • Increased use and management of mobile devices (tablets, mobile phones and laptops) • Improved support for existing and new applications with a mobile interface , including a Customer Relationship Management System • Development of a Bring- Your - Own - Device (BYOD) mobile policy and procedures In order to achieve the objectives outlined in the mobile computing strategy, dedicated staff resources will be required to both implement the services and to support them on a continuing basis. Without these additional staff resources, significant core services will not be properly established to support the growing demand of mobile computing initiatives and future mobile computing projects will fail to meet their objectives. 4 -9 The staff resources required are: • One Mobile Computing Infrastructure Support Specialist who is required for developing and maintaining the "back end" technologies to support mobile computing, including wireless technology, application delivery, web servers and technologies, device management, etc. • One Mobile Computing Device Support Specialist who is required for managing the end user device lifecycle, including device specifications, device testing, laptop builds, end user support procedures and training, escalated issue resolution, etc. Additional information concerning the Mobile Technology Strategy will be presented as part of an update on the Corporate Technology Strategic Plan at the November 18, 2013 meeting of the Planning & Strategic Initiatives Committee. BUDGET IMPACT: This initiative requires two additional full time equivalent (2 FTE) Mobile Computing staff in the Information Technology division. The staff resources required to deliver on the mobile computing strategy will be funded through a split of tax supported and internal recoveries from the enterprise divisions. The total annual funding required is $205,534, with a tax - supported increase of $102,767 (50/50 split). ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN: This proposal is linked to the Effective and Efficient Government Foundations of Information Technology. The mobile computing strategy is directly referenced in both the Corporate Technology Strategic Plan as well as in the City's Strategic Plan. The following is an excerpt from the City's Strategic Plan: "As the world of technology moves forward at a rapid pace, the city's information technology group supports the technological infrastructure for many of our financial and operational services. With increasing demands for real -time information, the city is looking to bolster the use of mobile technology to help staff report on activities remotely from the field." 4 -10 ISSUE: SI 03 — Improve Infrastructure Data Management to Better Support Spending Decisions FUND: Operating DEPARTMENT: Infrastructure Services — Administration PREPARER: Hans Gross, Director of Asset Management BUDGET IMPACT: $34,205 tax / $35,602 enterprise ($69,807 total) OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE: Maintain infrastructure data required to support optimal decisions by staff and Council regarding capital infrastructure maintenance and replacement. RATIONALE / ANALYSIS: Infrastructure Services Administration currently has two full time staff (temporary positions) spending 80% of their time on staff time entry and 20% of their time on asset data entry. Currently one position is funded from the Cityworks Capital account and the other is funded from a combination of water and gas utilities. The funding from the Cityworks account will stop in 2014 and the funding from water and gas will continue for one additional year. As the City transitions to mobile time entry, these two staff positions will need to transition to asset data entry. Mobile time entry is estimated to be phased in over one to three years. Asset data entry (e.g. asset condition, location, maintenance activity) is required for Facilities Management, Parks, Forestry, Cemeteries, and Golf Courses and is currently not being done by anyone. The need for additional staff is based on the Asset Management Program Roadmap. The Roadmap's first priority is to establish a Data Management Plan, which will consist of data collection, data quality control and data entry /data maintenance. The data entry is the first step in the development of detailed asset management plans which will result in establishing a sustainable financial plan for the management of assets within Facilities Management, Parks, Forestry, Cemeteries and Golf Courses which have a replacement value of $546 million. The City needs to make wise investment decisions to ensure tax and utility revenues are being spent wisely. BUDGET IMPACT: This initiative requires one additional full time equivalent (1 FTE) to assist with Asset Management data entry and will be funded through a split of tax supported and internal recoveries from the enterprise divisions. The total annual funding required is $69,807, with a tax - supported increase of $34,205 and an enterprise increase of $35,602. It is also anticipated that one additional FTE would be required in 2015. ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN: This proposal is linked to the Effective and Efficient Government Foundations of Asset Management and Financial Management. C =15 1 ISSUE: SI 04 — Proactive Street Tree Maintenance FUND: Operating DEPARTMENT: Infrastructure Services — Operations PREPARER: Greg Hummel, Manager Park Planning, Development and Operations BUDGET IMPACT: $169,500 tax OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE: Implement proactive street tree maintenance which will better support the quality of street trees within the City of Kitchener. RATIONALE / ANALYSIS: The City of Kitchener has an existing inventory of approximately 60,000 street trees which should benefit from proactive maintenance including the activities of street raising, structural pruning, and timely stumping. In addition, there are over 800 hectares of natural /hazard and park lands that are covered with trees and forest that need additional maintenance to ensure the quality of the trees, as well as the safety of Kitchener residents. The first activity of street raising ensures safe passage beneath the trees for pedestrians, cyclists and trucks /automobiles. The street raising process needs to be completed every three to five years to ensure that the limbs are not obstructing safe passage or hindering views. Street raising becomes one of the most important proactive maintenance activities when dealing with the existing tree inventory. With the limited number of foresters within the City's labour force, when faced with balancing one priority versus another immediate priority, tree raising gets delayed. Delaying this activity impacts safe passage. The second activity is structural pruning. This new approach to pruning establishes acceptable growing patterns for the trees. Completing this type of maintenance early in the life of a tree takes more time initially, but over the long term growth of the tree will reduce overall maintenance, especially in later years. This time invested early is labour intensive, but as the trees grow, the need for severe street tree raising and the use of costly equipment is reduced. This is healthier for the tree and reduces the overall maintenance costs of the tree. The final activity is the immediate stumping of trees as they are removed. Currently stumps are removed approximately one year after the branches and stems are removed. The additional proposed staff would be able to assist with the immediate stumping, allowing the tree replacement to happen within a growing season. BUDGET IMPACT: This initiative requires two additional full time equivalent (2 FTE) staff and one temporary labourer at a combined cost of $188,000. Staff will also require a chipper truck and necessary attachments to address the structural pruning and chipping of branches at a cost of $61,500. The combined cost is $249,500, of which $80,000 is already included in the 2014 Growth Allocation, reducing the additional budget request to $169,500. ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN: This proposal is linked to the Community Priority of Environment. 4 -12 Alternative Revenue Issue Paper (IP) Index IP # Description Included in Proposed Budget? AR 01 Additional Cost Recovery for Special Events - Non -City Events No AR 02 Increased Cost Recovery for Bylaw Enforcement No AR 03 Increased Advertising Revenue Through Sponsorship Strategy No AR 04 Mobile Catering Licensing Fees No AR 05 Increase User Fees by an Additional 1 %, While Providing Additional Funding for the Leisure Access Card LAC No AR 06 New Cost Recovery for Engineering No AR 07 Fee for Fourth and Subsequent Subdivision Review No 4 -13 ISSUE: FUND: DEPARTMENT: PREPARER: NET BUDGET IMPACT AR 01— Additional Cost Recovery for Special Events - Non -City Events Operating Office of the Chief Administrator - Economic Development Jeff Young, Manager of Special Events $5,000 DESCRIPTION OF THE ALTERNATIVE REVENUE PROPOSAL: Staff has identified an opportunity to increase revenues in Special Events through the chargeback of services offered through the city to 3rd party event organizers (non -city events). Throughout the year, Special Events works with a number of 3rd party event organizers who host both large and small scale events throughout the city. These events typically utilize a combination of city streets and park spaces to host their events. Examples of these types of events include Kitchener Blues Festival, Ribfest, LINK Picnic, Oktoberfest, Tri Pride. Based on event history, staff have identified costs required to run these events in city locations. Examples of these costs that are currently charged back to the event organizers include repairs to grass, garbage collection, custodial, traffic, parking, etc. Special Events will continue to work with internal departments to identify areas where additional costs can be charged back as actuals to 3rd party event organizers. In addition, Special Events will detail in their contract the replacement cost of equipment if it is damaged during their event. Examples of equipment currently loaned to the event organizers from the Special Events inventory includes tents, tables, chairs, projector, etc. NET BUDGET IMPACT: An estimated $5,000 can be further recovered from 3rd party event organizers throughout the yea r. RISKS /IMPACTS ASSOCIATED WITH THIS PROPOSAL: If costs to host their events on city property are increased there is a high likelihood that the organizers would request additional funding through their Tier1 and Tier2 grant applications. If these requests were agreed to, there would be no net benefit to the City. C =EI ISSUE: AR 02 — Increased Cost Recovery for Bylaw Enforcement FUND: Operating DEPARTMENT: Community Services Department — Bylaw Enforcement PREPARER: Shayne Turner, Director of Bylaw Enforcement Kim Kugler, Director of Enterprises NET BUDGET IMPACT: $32,500 DESCRIPTION OF THE ALTERNATIVE REVENUE PROPOSAL: Staff has identified two opportunities to increase revenues in the Bylaw Enforcement Division: Cost recovery for parking enforcement during Kitchener Ranger games ($25,000): The bylaw enforcement division currently provides targeted parking enforcement during all Kitchener Ranger's games (within The Aud parking lots and in surrounding neighbourhoods). This increased level of service is in response to the challenges experienced by surrounding neighbourhood residents and it aligns with the commitment made to them during the public consultation process related to the expansion of The Aud. During a typical evening there are two enforcement officers on duty. During a Kitchener Ranger's game these two officers are directed to pay increased attention to The Aud and surrounding neighbourhoods. In addition a third officer is brought in and assigned specifically for this increased level of parking enforcement. The total costs incurred to provide this increased service level over the entire hockey season is approximately $25,000. Currently those costs are funded through the tax -based operations of the bylaw enforcement division. Staff is proposing the bylaw enforcement division begin to recover these costs through revenue generated from the recently introduced paid parking initiative at The Aud. This will provide a new source of revenue for the bylaw division which is not tax - based. Staff recommends this change as funds from paid parking at The Aud were always intended to fund a variety of future parking and transportation management initiatives, including the enforcement of current parking regulations. Revenue generated from paid parking at The Aud is intended to go into a reserve to fund future investments into transportation and parking initiatives at the facility. 2. New Fees for follow -up inspections ($7,500): Some existing bylaw violations (e.g. property standards) require the bylaw enforcement division to conduct follow -up inspections to ensure the homeowner has complied with an order to remedy a situation by a certain date. On some occasions, when those follow -up inspections are conducted the work remains incomplete, requiring a Bylaw Enforcement Officer to conduct a second (and possibly a third) follow -up inspection at a later date. The City could begin to charge a fee to property owners to assist in recovering staffing costs when these additional follow -up inspections are required because the homeowner has not completed required work by the stated deadline. If an inspection reveals that the violation 4 -15 has been corrected, the fee would not apply. Staff would ensure that any documentation given to a property owner, relating to a Bylaw violation and the required corrective action, also advises of the potential for follow -up inspection fees to be applied if the work is not completed in time. A number of municipalities in Ontario have a follow -up inspection fee mechanism in place, although the amounts of the fees vary. As a starting point, staff is proposing a fee of $75 per inspection when non - compliance is observed, with the potential to increase that fee as additional follow -up in sections are required on the same property. Based on past experience relating to the number of situations where multiple inspections are required before compliance is achieved, staff estimate the potential for $7,500 in new revenue to be generated in 2014. Implementing this new fee will likely require amendments to several existing by -laws, or alternatively an entirely new by -law. Staff also proposed that any fees charged and not paid within a designated timeframe would be applied to the tax rolls for the subject property. NET BUDGET IMPACT: Over the past three years staff has identified a structural deficit in the bylaw enforcement division related to fine revenue and part -time wages. For 2013, staff are projecting that chronic deficit to be in the range of $265,000— $280,000. Council may wish to allocate the new revenues identified in this issue paper to either: (1) reduce the bylaw enforcement division's chronic deficit by $32,500, or (2) increase revenue projections within the Division by $32,500 to reduce the tax supported levy. RISKS /IMPACTS ASSOCIATED WITH THIS PROPOSAL: Cost recovery for parking enforcement during Kitchener Ranger games: Should Council choose to allocate $25,000 in revenue from paid parking at The Aud to fund the increased parking enforcement around The Aud during Kitchener Ranger games, that would reduce the amount of money available in future years to fund other parking and transportation initiatives at The Aud. New Fees for follow -up inspections: This type of fee mechanism is primarily a tool to encourage compliance and will likely not ensure sustained revenue levels over the long term. As compliance levels increase, revenue realized through this fee will decrease. 4 -16 ISSUE: AR 03 - Increased Advertising Revenue through Sponsorship Strategy FUND: Operating DEPARTMENT: Community Services Department PREPARER: Michael May, DCAO NET BUDGET IMPACT: $45,000 DESCRIPTION OF THE ALTERNATIVE REVENUE PROPOSAL: The City of Kitchener owns and operates a wide variety of "assets" (e.g. physical buildings, programs, services, special events) that could potentially be leveraged through increased advertising opportunities and /or sponsorship partnerships with corporations, organizations and individuals to generate non -tax based revenue for the municipality. Currently the City has no formal strategy, policy or program regarding sponsorships. As a result, there is no coordinated and unified approach to identifying, costing and selling these opportunities for the benefit of the municipality and its residents /customers. Nor are there any corporate -wide processes or guidelines in place to encourage, plan, implement, monitor and control sponsorships. The City's historic ad hoc and decentralized approach to selling sponsorships and advertising has for the most part focused on cost recovery instead of maximizing this potential source of non -tax based revenue through sponsorships sold at fair market value. On May 14, 2012, City Council directed staff to undertake the development of a Municipal Sponsorship Strategy. In early 2013, staff began work on a sponsorship strategy that is intended to provide strategic directions and tactical recommendations on the potential development and implementation of a formal Municipal Partnership Program. Staff is continuing to work on a Municipal Sponsorship Strategy which will be presented to the Planning & Strategic Initiatives Committee on December 2, 2013. That strategy, and accompanying staff report, will outline the benefits and risks of proceeding with the development and implementation of a formal, corporate -wide Municipal Partnership Program, and will make specific recommendations on work to be completed prior to launching such a program. NET BUDGET IMPACT: While more work is required to complete the Municipal Sponsorship Strategy before presenting it to City Council on December 2, at this time staff believes there may be an opportunity to add $45,000 in new advertising revenue to the 2014 budget. Staff have already identified the following specific items for 2014: (1) increased advertising revenues at The Aud and Cemeteries ($10,000); (2) increased ad rates for Leisure magazine ($5,000), and; (3) new advertising opportunities in Your Kitchener, Best of Times and Leisure ($15,000). C =qrJ In addition to these three opportunities which have already been identified, the Municipal Sponsorship Strategy will identify other potential opportunities to increase advertising revenues by $15,000 through items such as: • advertisements on municipally owned and operated websites; • facility signage advertisements (e.g. parking garages, aquatics facilities), and; • advertisements on city fleet vehicles. In order to pursue these new advertising opportunities and generate an increased level of revenue for the municipality, it will be necessary to engage the support of an outside vendor through a competitive RFP process. RISKS /IMPACTS ASSOCIATED WITH THIS PROPOSAL: While staff believe it is reasonable to estimate an additional $15,000 in revenue could be generated through these additional advertising sales, there is a moderate risk this revenue target will not be achieved in 2014 due to the startup time required prior to implementation of sales and revenue collection. There is also a public relations risk related to residents' acceptance or disagreement with this increased level of advertising on municipal assets. Further details on the potential revenues and implementation costs of a Municipal Partnership Program will be included in the Municipal Sponsorship Strategy and accompanying staff report being presented to the Planning & Strategic Initiatives Committee on December 2, 2013. 4 -18 ISSUE: AR 04— Mobile Catering Licensing Fees FUND: Operating DEPARTMENT: Finance and Corporate Services — Legislative Services PREPARER: Patricia Harris — Manager of Licensing NET BUDGET IMPACT: $5,500 DESCRIPTION OF THE ALTERNATIVE REVENUE PROPOSAL: In the past year, licensing staff have received several enquiries from businesses that wish to offer their services as mobile caterers. A mobile caterer is hired by a private business to bring a mobile refreshment vehicle to a private social, sporting or recreational event and serve the patrons of that event. Historically, the City has not licensed mobile businesses, but in recent years mobile businesses have been growing in popularity. This includes businesses such as mobile hairstyling and mobile catering. Current City by -laws require caterers at a specific address to obtain a license. Refreshment vehicles such as hot dog carts, chip wagons and mobile canteen trucks that operate at industrial and construction sites are also required to obtain a license to ensure public safety. In order to create a level playing field for all food related businesses and to ensure the health and safety of the public, the licensing of mobile caterers is also being recommended. Among other things, this will enable the necessary inspections to take place (e.g., public health and fire). An amendment to Chapter 586 (Refreshment Vehicles) and Chapter 501 (Business License Fees) will be required to accommodate this new license category. The licensing of mobile caterers will not impact the current food truck program operating in Civic Square. Businesses that sell food only at special events require a Special Event license only, and not an annual business license. NET BUDGET IMPACT: Approximately 10 mobile caterers may be operating in Kitchener. In speaking with the operators, they have indicated that they are asked regularly to provide catering to private events in the City. Based on that information a license fee of $550 per mobile caterer is suggested. This fee was determined by taking the average of the fee for stationary refreshment vehicles such as hot dog carts and chip wagons ($1,020), caterers at specific addresses ($306) and mobile canteen trucks ($328). This amounts to approximately $5,000 in new license fees for 2014. Licensing currently has the resources to issue the licenses and provide enforcement. RISKS /IMPACTS ASSOCIATED WITH THIS PROPOSAL: As in all business licensing, the number of licensees may not meet expectations. This may be because a business is no longer operating. 4 -19 ISSUE: AR 05 — Increase User Fees by an Additional 1 %, While Providing Additional Funding for the Leisure Access Card (LAC) FUND: Operating DEPARTMENT: All PREPARER: Ryan Hagey, Director of Financial Planning NET BUDGET IMPACT: $115,000 DESCRIPTION OF THE ALTERNATIVE REVENUE PROPOSAL: The proposed 2014 budget includes an increase of 2% to most user fees, effective January 1, 2014. This proposal would increase most user fees by an additional 1%, to a total of 3 %, effective January 1, 2014. In order to achieve an effective date of January 1, 2014 Council would need to approve this increase to user fees as part of the broader discussion of user fees on November 18. Fees and charges are used by municipalities to reduce reliance on the tax base for various programs and services. Cost recovery is one of the main driving factors considered when setting fees and charges which are often used for programs and services where customers have a choice whether or not to use them. To help offset increased costs of recreational programs and services, this proposal would provide additional funding for the Leisure Access Card (LAC) fee subsidy program. LAC helps ensure that City of Kitchener recreation programs remain accessible for lower- income families. The LAC program has been consistently overspent for the past number of years, but the additional costs have been covered by third party funding (e.g. Canadian Tire Jumpstart Foundation). There are indications that the third party funding will be reduced or eliminated going forward, which would necessitate the identification of approximately $30,000 in alternate funding for the LAC budget. To ensure a sustainable program, it is recommended that this alternate funding be phased in over the next few years. It is proposed that $10,000 be added this year. Staff will work in the short term to address any remaining shortfall through existing program balances. The current budget for LAC is $122,100, so an increase of $10,000 equates to an 8% increase to this budget. NET BUDGET IMPACT: Increasing user fees by an additional 1 %, effective January 1, 2014 would generate approximately $125,000 of revenue. If user fees were to be increased, staff are also recommending that funding for the Leisure Access Card fee subsidy program be increased by $10,000. The net result is $115,000 of additional revenue for the tax base. RISKS /IMPACTS ASSOCIATED WITH THIS PROPOSAL: The following risks are associated with this proposal: • Increases to user fees can result in decreased use of the program /service, which would result in less revenue than budgeted. • Some user fees cannot be increased as they are set by legislation or are already at the high end of what the market will bear. 4-20 ISSUE: FUND: DEPARTMENT: PREPARER: NET BUDGET IMPACT: AR 06 New Cost Recovery for Engineering Operating Infrastructure Services - Engineering Linda Cooper, Supervisor of Client Services $37,150 Tax Supported $ 6,700 Enterprise DESCRIPTION OF THE ALTERNATIVE REVENUE PROPOSAL: Guiding Principle: Development should pay for itself. No fees are currently collected for several different types of applications and requests that Engineering facilitates. Engineering should collect fees for these services to cover staff's time and associated costs. The new fees are described below and are split into tax supported fees and enterprise fees. Tax Supported Fees Damage Deposit Inspection: Currently the Building department collects a damage deposit on behalf of Engineering as part of every building permit application. Engineering will complete at minimum two inspections for the construction work prior to refunding the damage deposit. Engineering is proposing to collect an admin fee on all damage deposits to cover Engineering admin staff time and field inspections, the proposed fee is $40 per meter of lot frontage up to a maximum of $400. On Site Plumbing Applications: This process is initiated and facilitated by Building. Building will receive an application for a site servicing permit from a developer who is proposing new or revised servicing on site, but is not going through the Site Plan Process. Building will circulate the plans to Engineering, and Engineering staff will review the plans in accordance with the development manual, DGSSMS specs and in terms of adequate capacity within our system. Building will complete their review in accordance with the Building code. Once the plans are acceptable, Engineering will give Building their sign off and then Building will then issue a servicing permit for the property. Engineering is proposing a review fee for these applications of $475 per application which is in line with the Engineering Site Servicing Permit fee. Driveway Ramp Widening Permit: Engineering receives requests for permission /approval from residences who would like to widen their driveway by cutting their driveway ramps. Engineering coordinates the approval with Planning and Transportation Services for the driveway cut. Once all the requirements are satisfied, as per the driveway ramp widening application, then Engineering will issue a permit for the work. Engineering is proposing an admin fee for this process in the amount of $150 per application. 4 -21 Enterprise Fees Sewer Surcharge Review: Engineering receives requests from property owners and developers to surcharge additional flows to the sanitary system. Engineering will run the additional flows through the sanitary model and grant approval for the surcharge. The proposed Sewer Surcharge Fee will be $850 per application which will cover the staff time required to facilitate these requests. Capacity Analysis Request: Engineering receives capacity analysis requests from developers prior to submitting a development application, or for a zone change application for a property. Engineering reviews the development proposal and determines if the sanitary system can accommodate the increase in flow. Engineering is proposing to collect a new fee for a Capacity Analysis Request in the amount of $500 per application. NET BUDGET IMPACT: The total increase in revenue is projected to be $43,850. The breakdown is noted in the table below. RISKS /IMPACTS ASSOCIATED WITH THIS PROPOSAL: All the fees proposed are new and could be viewed negatively by developers and residents. 4-22 ISSUE: AR 07 — Fee for Fourth and & Subsequent Subdivision Review FUND: Operating DEPARTMENT: Infrastructure Services - Engineering PREPARER: Linda Cooper, Supervisor of Client Services NET BUDGET IMPACT: $25,000 DESCRIPTION OF THE ALTERNATIVE REVENUE PROPOSAL: Currently the Engineering drawing review for Subdivision development is paid through an administration fee which amounts to 4.5% of the construction value of the development. This fee is to cover all aspects for which Engineering is involved in the approval of the subdivision. On average the engineering drawings for the subdivision go through 3 -4 review submissions prior to approval of the drawings. Occasionally, subdivision plans are submitted which require more than three reviews, occasioning additional staff time for engineering. In these cases the Engineering Consultant is not completing the required revisions as requested by Engineering and /or in accordance with the Development manual. For these cases, Engineering suggests establishing an additional review fee for the subdivision drawings for those developments that are constantly resubmitting drawings for review without addressing Engineering's past review comments and standards. Additional reviews occasioned by circumstances outside of the Engineering Consultant's control will not be subject to this additional fee. The Engineering Review Fee of $5000 /submission will be applied to any subdivision development upon submitting their fourth and subsequent Engineering drawing set for review. It is anticipated that this fee will encourage thorough preparation of submissions by Engineering Consultants. NET BUDGET IMPACT: The estimated revenue the Subdivision Review Fee will generate is $25,000 per year. RISKS /IMPACTS ASSOCIATED WITH THIS PROPOSAL: Industry may view this new fee as unfair so it will be applied reasonably by the Director of Engineering and may be waived for minor changes such as items missed by City staff in previous reviews, changes in standards, and minor drawing. Since the fee is tied to issues of non- compliance, increased compliance levels may cause a decrease in actual revenue realized over time. 4-23