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HomeMy WebLinkAbout2013-12-02 FINANCE AND CORPORATE SERVICES COMMITTEE DECEMBER 2, 2013 CITY OF KITCHENER The Finance and Corporate Services Committee met this date commencing at 10:02 a.m. Present: Councillor S. Davey - Chair Mayor C. Zehr and Councillors K. Galloway-Sealock, J. Gazzola, D. Glenn-Graham, B. Ioannidis, B. Vrbanovic, Z. Janecki, Y. Fernandes, P. Singh and F. Etherington. Staff: J. Willmer, Chief Administrative Officer D. Chapman, Deputy CAO, Finance & Corporate Services P. Houston, Deputy CAO, Infrastructure Services M. May, Deputy CAO, Community Services R. Regier, Executive Director of Economic Development L. Johnston, Director, Corporate Communications & Marketing W. Malcolm, Director of Utilities L. Baillargeon, Manager, Asset Optimization J. Gruenbauer, Manager, Regulatory Affairs & Supply C. Spere, Manager, Engineering Construction L. Majcher, Manager, Strategy & Business Planning T. Gerber, Marketing Strategist C. Goodeve, Committee Administrator INS-13-112 - QUEEN STREET SOUTH RECONSTRUCTION 1. - CONSULTANT PURCHASE ORDER EXTENSION The Committee considered Infrastructure Services Department report INS-13-112, dated November 18, 2013 requesting an extension to the Purchase Order for the Queen Street South Reconstruction project. Councillor P. Singh entered the meeting at this time. On motion by Councillor B. Ioannidis - it was resolved: “That an extension of the purchase order issued to Stantec Consulting for engineering services related to the reconstruction of Queen Street between Courtland Avenue and Charles Street in the amount of $47,000., be approved, as outlined in Infrastructure Services Department report INS-13-112.” CAO-13-039 - 2014-2016 PROPOSED CORPORATE BUSINESS PLAN 2. The Committee considered Chief Administrator’s Office report CAO-13-039, dated November 27, 2013 regarding the 2014-2016 Corporate Business Plan. Councillor K. Galloway-Sealock entered the meeting at this time. Ms. L. Majcher presented the Business Plan, advising that this is the first time that core services have been reflected as a part of the Plan. She stated that ten of the 24 Corporate Projects listed in the Plan are new for 2014, adding that each contains linkages back to the City’s Strategic Plan. She commented that the report is proposed to be referred for consideration on Final Budget Day, January 30, 2014. She noted this allows approximately seven weeks for members of Council to review the Plan and provide additional comments and feedback. In response to questions, Mr. D. Chapman agreed to provide an issue paper for Final Budget Day cross-referencing the new items on the 2014-2016 Corporate Project list to where it is located in the City’s budget. He further agreed to include information outlining the associated staff report and date of when those projects previously came forward for Council’s consideration. Councillor Y. Fernandes inquired if it would be possible for training to be provided to Council reviewing the procurement process. Mr. Chapman indicated that he would be willing to meet with any member of Council to go over the City’s Purchasing Policy. He noted that the Purchasing Division is proposed to be included as part of the 2014 Internal Audit Work Plan, FINANCE AND CORPORATE SERVICES COMMITTEE DECEMBER 2, 2013 - 111 - CITY OF KITCHENER CAO-13-039 - 2014-2016 PROPOSED CORPORATE BUSINESS PLAN (CONT’D) 2. which is anticipated to come forward for consideration at the December 9, 2013 Audit Committee meeting. Questions were raised regarding the possible inclusion of budget information related to the projects in the Business Plan. Ms. Majcher agreed to include both the previous and current years’ budget information in next year’s Business Plan. Councillor K. Galloway-Sealock left the meeting at this time. On motion by Councillor F. Etherington - it was resolved: “That consideration of the proposed City of Kitchener 2014-2016 Business Plan, as attached to Chief Administrator’s Office report CAO-13-039, be referred to the January 30, 2014 Council meeting.” INS-13-096 - NATURAL GAS PURCHASE POLICY OVERVIEW 3. The Committee considered Infrastructure Services Department report INS-13-096, dated November 26, 2013 regarding an overview of the City’s Natural Gas Purchase Policy for Kitchener Utilities (KU). Councillor K. Galloway-Sealock re-entered the meeting at this time. Ms. P. Houston and Mr. John Voss, Aegent Energy Advisors, presented an overview of the existing Kitchener Utilities Natural Gas Purchasing Policy. Ms. Houston advised that the guiding principle of that policy was to achieve the minimum cost for gas for a minimum amount of risk. She spoke to the difficulty associated with trying to predict the future price of gas, particularly given that its supply and demand is impacted by uncontrollable and unpredictable factors; such as, the weather, economy and geopolitical events. She stated that through previous surveys, the majority of KU customers have indicated that they prefer stable rates; and accordingly, staff are mindful of minimizing the risk of higher prices. She further advised that based on the existing policy, KU buys gas supplies using a combination of fixed and spot prices. Mr. Voss noted that there are risks, benefits and trade-offs between these two approaches to buying gas. He added that these are fundamentally different and designed to achieve different goals. In response to question, Ms. Houston agreed to provide additional information as to whether the approach taken in the existing Natural Gas Policy is consistent with those applied by other gas utilities or is considered an anomaly in the industry. Councillor J. Gazzola entered the meeting at this time. Mayor C. Zehr asked if further information could be provided such as a comparison showing the average rate charged by KU, the Local Authority Services (LAS), and Union Gas. Questions were raised as to whether it would be possible for KU to offer duel rates, with one fixed and the other based on the spot market rate. Ms. Houston indicated that staff could investigate the potential to provide customers with the proposed options, noting that it would add another level of complexity and administration to the existing process. Councillor S. Davey spoke to the equalization billing option that is currently provided by KU, adding that this could continue to be utilized even if the City switched to a spot rate. He suggested that consideration should be given to the potential to offer customers a hybrid of both a fixed and spot rate. At the request of Councillor B. Vrbanovic, Ms. Houston agreed that as part of the report on the findings of the proposed public consultation process, information would also be provided as to whether local natural gas competitors offer primarily spot or fixed rates. In addition, she agreed to ensure that copies of Report INS-13-096 as well as supporting materials are made available as part of the planned public consultation process. FINANCE AND CORPORATE SERVICES COMMITTEE DECEMBER 2, 2013 - 112 - CITY OF KITCHENER INS-13-097 - NATURAL GAS SUPPLY PROGRAM 4. - PUBLIC ENGAGEMENT PROCESS OPTIONS Councillor P. Singh assumed the chair as Councillor S. Davey wished to participate in the discussion regarding this matter. The Committee considered Infrastructure Services Department report INS-13-097, dated November 26, 2013 recommending the retention of a research consulting firm to develop and conduct a quantitative and qualitative survey related to the Kitchener Utilities (KU) natural gas supply program. Mr. W. Malcolm reviewed the report, advising that if approved, staff would endeavour to present the findings of the proposed pubic engagement process by April 2014. At the request of Councillor D. Glenn-Graham, Ms. P. Houston confirmed that as part of the public consultation process feedback would be sought as to the thresholds contained in the Natural Gas Purchase Policy with respect to the percentage of the City’s natural gas portfolio that should be purchased at a fixed rate. Councillor S. Davey questioned whether it would be possible as part of the survey to ask the public if they would prefer to not only have spot or fixed rates, but also a potential hybrid of both. He added that customers should also be given the ability to select all three options. Mr. J. Gruenbauer stated that the provision of similar options have come before the Ontario Energy Board (OEB) in the past. He advised that if the City offered those choices to its customers with respect to the natural gas supply program it could be viewed by the OEB as impeding competition. He added that in the 1990s when KU’s supply program was being initiated, consideration was given to KU’s role compared to the private sector. At that time various options and choices were put forward, but it was viewed that KU should be the default supplier and should offer only one type of pricing model that does not impede the customer choice offered by the private sector. Councillor K. Galloway-Sealock left the meeting at this time. On motion by Mayor C. Zehr, the recommendation contained in Report INS-13-097 was brought forward for consideration. A motion was brought forward by Councillor Davey to defer consideration of the staff recommendation to the December 9, 2013 Council meeting to allow time for consultation with staff regarding the use of approximately half of Kitchener Utilities marketing budget on the proposed public engagement. On motion by Councillor S. Davey - it was resolved: “That consideration of the following recommendation contained in Infrastructure be referred to the December 9, 2013 Services Department report INS-13-097, Council meeting to allow time for members of Council to consult with staff regarding the use of approximately half of Kitchener Utilities marketing budget on the proposed public engagement: ‘That staff be directed to proceed with requests for proposal to hire the services of a Research Consulting firm to develop and conduct quantitative and qualitative research related to our natural gas supply program with Kitchener residents in 2014, as outlined in Infrastructure Services Department report INS-13-097.’ ” ADJOURNMENT 5. On motion, this meeting adjourned at 1:26 p.m. C. Goodeve Committee Administrator