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HomeMy WebLinkAboutFCS-13-001 - 2013 Final Budget Day Package REPORT TO:Finance and Corporate Services Committee DATE OF MEETING: January 17, 2013 SUBMITTED BY: Dan Chapman, Deputy CAO PREPARED BY: Ryan Hagey, Director of Financial Planning WARD(S) INVOLVED: All DATE OF REPORT: January 8, 2013 REPORT NO.: FCS-13-001 SUBJECT: 2013 Final Budget Day Package RECOMMENDATION: For discussion. BACKGROUND: Initial discussions about the 2013 budget began with Council in May 2012. Over the past nine months there have been seven public meetings regarding the 2013 budget. These meetings have covered topics such as general guidelines, public engagement approaches, user fees, capital budgets, operating budgets, and public input,. Final budget day is the last meeting in this process, and will culminate with Council setting the 2013 budget. The attached material is meant to supplement the information previously provided to Council and the public regarding the 2013 budget. The main purposes are to highlight changes to the original budget presentations, and to provide follow up information requested by Council. The attached final budget day package consists of: Updated year end projections for tax supported and enterprise operations Presentation slides which highlight key information Issue papers which respond to additional information requests of Council Potential reduction issue papers which outline reduction options for tax supported operations as requested by Council REPORT: Tax Supported Operating Budget At the conclusion of presenting the operating budget to Council, the proposed tax rate increase stood at 2.87%, which is considerably less than the 5.87% projected at the start of the budget process. Since discussing the operating budget at the start of December, two additional revenue sources have been identified which reduce the tax rate increase further. The two revenues are: 1. Additional assessment growth (1.68% instead of 1.60%) 2. Revenues from the solar roof established on the Kitchener Operations Facility (KOF) These two revenues reduce the projected tax levy increase from 2.87% to 2.49%. FINAL - 1 The projected tax levy increase of 2.49% is calculated prior to making further reductions for any of the 10 reduction options, which could reduce the tax rate increase by an additional 1%. Finally, Council has deferred or referred decisions on a number of grants to final budget day. Council’s direction regarding these grants could be an additional impact on the tax rate increase for 2013, either positive or negative. All of these items are summarized in the chart below OriginalGeneralTaxLevyIncrease1.80% Less:AdditionalAssessmentGrowth0.08% Less:SolarRoofRevenues0.30% RevisedGeneralTaxLevyIncrease1.42% EDIFSpecialLevyincrease1.07% RevisedOperatingTaxLevyIncrease2.49% PotentialReductionItems0%to1.01% RangeforLevyIncrease1.48%2.49% ItemsReferredtoFinalBudgetDay 1)CommunityEnvironmentalInitiativeGrant(CEIG) mount 2)FinalizingTier2GrantA 3)CreativeEnterpriseInitiative(CEI)OperatingGrant Enterprise Operating Budgets There have been no changes to the budgets of any of the enterprises since Council reviewed them in December. 2012 year end projections for all of the enterprises have been reviewed and updated based on the most current information. The changes, if any, are relatively small (e.g. less than 2% of total budgeted revenues). Capital Forecast The capital forecast remains basically unchanged from its original presentation. Only three projects have been added based on two grant funding announcements and one Council decision. The three changes are summarized in the chart below. ProjectAmountFunding CIIF: Trail Upgrades $500,00050/50 Grant/Reserve CIIF: Victoria Park Washrooms $400,000 50/50 Grant/Reserve Strasburg Road $146,000Development Charges FINAL - 2 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: The budget impact for the average homeowner is shown below. The 2013 impact based on a 2.49% tax rate increase, 3% storm water rate increase and 5% rate increase for both water and sanitary would be $71. It should be noted that $30 of this increase is attributed to increases in Regional wholesale water/wastewater rates which are beyond Kitchener Council’s control. No net change to residential gas rates is projected at this time, although rates will not be finalized until mid-2013. The impact of previous budgets has also been included at Council’s request. There are two columns for 2011 as this was the first year of the Storm Water utility, and the impact on the homeowner has been calculated two ways. The first 2011 column shows the impact as it would have appeared on the tax and utility bills. The restated 2011 column shows the impact if storm water had remained in the tax base instead of being a separate utility. Regardless of the calculation methodology, the bottom line impact remains the same ($31). Impact on Homeowner 20112011 Restated20122013 Change $Change $Change $Change $ Taxes$ 34(26) $ $ 2 3$ 2 5 $ 121$ 524 Storm Water $ $ 3 $ 95$ 86 Subtotal $ 2 6$ 2 8 Water$ 11$ 14 $ 1 4$ 2 0 $ -$ 173 Sanitary $ $ 2 2 $106$ 10358 Subtotal (pre Gas) $ $ 7 1 Gas$(75)$ (49)(72)$ $ - Total$ 31$ 31$ 719$ As noted above, a large portion of the $71 total impact to homeowner is attributable to the rate increases approved by the Region of Waterloo. The table below breaks down the total impact to homeowner into the Regional and City portions. Total impact to homeowner $71 Regional portion $30 City portion $41 Council also requested comparative information about rate increases for Cambridge, Kitchener and Waterloo dating back to 2010. These are provided in the charts below to the extent the information is available. For example, Cambridge only publishes the impact of water and sanitary budget changes as a combined impact, so separating the changes is not possible. As well, Kitchener values for 2011 have been restated due to the change in the storm water utility. FINAL - 3 Restatements in 2011 have not been done for the other municipalities as a restatement does not apply (Cambridge), or the information is not readily available (Waterloo). Cambridge 201020112011 R20122013 P Property Taxes City2.80%3.55%N/A3.35%1.86% Utilities Water7.30%8.94%N/A10.11%9.50% Sanitary7.30%8.94%N/A10.11%9.50% Kitchener 201020112011 R20122013 P Property Taxes City2.90%-2.79%3.89%2.39%2.49% Storm WaterN/ANew76.31%3.00%3.00% Utilities Water6.90%2.90%3.70%3.50%5.00% Sanitary9.90%0.00%0.71%4.00%5.00% Waterloo 201020112011 R20122013 Property Taxes City3.33%1.89%N/A2.16%1.55% Storm WaterNewN/A12.67%64.94% Utilities Water9.52%3.62%N/A3.50%4.73% Sanitary5.71%10.14%N/A9.82%6.70% COMMUNITY ENGAGEMENT: Budget information has been made available on the City of Kitchener website (www.kitchener.ca/2013budget). Feedback has been welcomed using the following methods: Public meeting on January 7, 2013 in the Council Chambers Budget webpage including the interactive budget tool Responses to Facebook and Twitter postings, including an “Ask the Expert” session for Facebook on December 10 Regular mail at: 2013 Budget, c/o Corporate Communications, Kitchener City Hall, PO nd Box 1118, 200 King St. W. 2 Floor, Kitchener, ON N2G 4G7 Hard copies of budget information were made available by calling 519-741-2602 and leaving a message with mailing address. Issue Paper BD09 summarizes public input received as of the date of this report. ACKNOWLEDGED BY: Dan Chapman, Deputy CAO (Finance and Corporate Services) FINAL - 4 Issue Paper (IP) Index IP # Description Tax Supported Operating Budget BD01 Centre in the Square Operating Budget BD02 Kitchener Public Library Operating Budget BD03 Security Services Legislation BD04 Security Service (11PM TO 7AM) at City Hall BD05 Conference Costs BD06 2012 Projected Results BD07 Base Budget Adjustments to Accomplish 3% Reduction BD08 Deferred/Referred Grant Issues BD09 Summary of Public Input Enterprise Operating Budgets BD10 Building Division FTE Historical Analysis BD11 Gas Transfers to the Tax Stabilization Reserve Fund Capital Budget BD20 Existing Balances: Corporate Plan and Safe & Healthy Community A Committee BD21 Alternate Emergency Communications Centre BD22 Fire Fleet Details BD23 Environmental Remediation BD24 Surface Reconstruction Road Works BD25 Earth Week Program BD26 Park Programs (Capital & General Provision) BD27 Conservation of the Schoerg Barn Foundation BD28 Debt to Reserve Ratio BD29 Allocation of LEAF Funds (Community Trails & EAB) FINAL - 43 CITY OF KITCHENER 2013 BUDGET ISSUE PAPER ISSUE: BD01 Centre In The Square Operating Budget FUND: Operating DEPARTMENT: Boards – Centre In The Square PREPARER: Sandra Bender, CEO, Centre In The Square BUDGET IMPACT: None BACKGROUND: At Operating Budget Review December 6, 2012, Centre In The Squar financial statements comparing the 2012 Budget, the 2012 Current RATIONALE / ANALYSIS: 2013-01-09 FINAL - 44 F INANCIAL IMPLICATIONS: The $235,246 deficit budgeted for 2013 will be covered entirely through reserves and will have no impact on the City of Kitchene shortfalls across both the operating and capital budgets have be funding proposal, and are tied to Centre in the Square reserves RECOMMENDATION: For information only. 2013-01-09 FINAL - 45 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD02 Kitchener Public Library Operating Budget FUND: Operating DEPARTMENT: Kitchener Public Library PREPARER: Sonia Lewis, CEO, Kitchener Public Library BUDGET IMPACT: None BACKGROUND: At Operating Budget Review December 6, 2012, Library staff was a 1. a three year budget history covering 2010 to 2012 2. a list of reductions in the 2013 Central Library budget 3. financial statements comparing 2012 to 2013 RATIONALE / ANALYSIS: 1. Budget History 2010-2012 Year Budget Submitted Budget Approved Reductions 2010 $8,673,816 $8,673,816 Guidelines directed KPL to cut 2.75% or $238,000. Achieved by reducing: - COLA from 3% to 1% - resources by $136,000 - staffing by $95,000 - staff training by $10,000 - miscellaneous accounts by $16,000 2011 $8,927,661 $8,927,661 To meet guidelines staffing reduced by $34,000. 2012 $9,115,142 $9,055,142 To meet guidelines reduced: - staffing by $52,000 - miscellaneous accounts by $31,000 Additional $60,000 cut: - staffing $17,000 - staff training $5,000 - resources $16,500 - miscellaneous accounts by $21,500 2. 2013 Central Library Operating Budget The 2004 Central Library business case projected an annual opera including 18 FTE. All costs, but primarily staffing and resourc annual impact down to $817,000 which includes 9 FTE. Projected $613,000 in 2013 and $204,000 in 2014. The Library was directed $306,000 and delay the remaining $511,000 to 2014. At the time $306,000 target was achieved by delaying the start date of new e 2013-01-09 FINAL - 46 3. 2012 – 2013 Budget Comparison FINANCIAL IMPLICATIONS: For information only RECOMMENDATION: For information only. 2013-01-09 FINAL - 47 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD03 – Security Service Legislation FUND: Operating DEPARTMENT: INS- FACILITIES MANAGEMENT PREPARER: Cynthia Fletcher, Director of Facilities Management BUDGET IMPACT: None or Decrease of $40K BACKGROUND: At Operating Budget Review December 6, 2012, staff was asked to regarding Security Legislation Bill 159 including the following How the change in legislation impacts the library budget. · Information regarding the additional cost of training City staf · as compared to the cost of contracting security services. Investigate and report on the legislative and financial impact · full security services but did not charge for it. RATIONALE / ANALYSIS: In 2005, Bill 159 – Private Security and Investigative Service Act was enacted. Thi the City’s ability to provide Security Services to external/arm’coup costs of service. In the present format, the City is registered and li provides service to itself and its assets). In order to re-coup would need to be licensed as a separate Business Agency. In adand individual licensing cost, there are additional costs that staff has not been able to quant Officers and Directors of Corporation Registration/Licensing, adur incidents with the registrar and additional uniform compliance r, City Security personnel provided monitoring of the Region of Wat consciously moved away from this type of provision of service f 1) WSIB costs and logistic complexities of potential injury to s, other than a City of Kitchener facility. 2) Liability: As the City is self-insured and currently only prsecurity service, the liability risk is not substantive as the City would not sue itseailure to act. As an Agency, the City would open itself up to significant liabis associated with providing the service. For the reasons listed above, staff recommends the City retain snot a separate agency. In relation to the KPL – Main Branch Currently, city staff provides security service related to monitsite, parking garage and building. Staff does not provide service rel inappropriate behavior of patrons, security of library assets, e). Library staff members are dealing with these issues and/or calling the police for assistan With the expansion of the Main Branch facility, addition of a pature and anticipated significant increase of daily patrons, Library staff have expressed the following concerns: Increased patronage will result in an increased number of incid · Projected traffic through the building (currently averages 1000 visitors/day but Library staff anticipate this number could double) 2013-01-09 FINAL - 48 The expanded facility results in multiple access points into the building (more complex · opening and closing procedures) Library staff are not trained security personnel · Library Staff are seeking quick response and have deemed respons adequate. The KPL staff investigated an option of contracting operation and reported a projected annual cost of $75,000. This contracted Security staff member on site during all hours of opeLibrary staff has indicated this is the optimal level of service. Upon more detailed review Facilities Management, in consultation determined the City may provide direct security service to the L as Employer of Security personnel. The level of service staff r full time Security presence on site. However, security staff cou of service and extend monitoring to the interior of the Main Bra presence and assistance in defined situations. Justification for the recommendation: The City of Kitchener owns the Library facility · The Library Act requires the Municipality to establish Library · the City can recommend the Library services as an extension of t The proposed service does not require the City of Kitchener to · related the KPL assets. The proposed level of service outlined above has been reviewed w willing to try this proposal and re-evaluate after one year to d met. At the time of writing, the Library Board has not taken a th Their next meeting will be January 16, so an update should be available on Final Budget Day th January 17. FINANCIAL IMPLICATIONS: Currently the Library has estimated the cost of contracting out 000 annually. If security services were to remain in-house at the proposed level of service outlined above, it would result in a $25,000 annual increase to the Facil budget to cover additional hours and benefits. The estimated Operating Budget for KPL is based on a March openi main branch. Therefore, the Library has only included $61,700 in their Operating Budget for 2013 with the remaining $13,300 impacting the 2014 budget. Using the same assumption, the impact on Facilities Management budget for 2013 would be $20,750 impacting the 2014 budget. The potential net budget savings would be $40,950 for 2013 if the recommendation is approved by the KPL Library Board and City Council. RECOMMENDATION: That the KPL Board and City Council consider the City of Kitchen current security service to include monitoring the interior of t presence at the facility and assistance in defined situations; and That the City of Kitchener retains the current status of Employe than a Separate Business Agency. 2013-01-09 FINAL - 49 CITY OF KITCHENER 2013 BUDGET ISSUE PAPER ISSUE: BD04 – Security Service (11PM TO 7AM) at City Hall FUND: Operating DEPARTMENT: INS- FACILITIES MANAGEMENT PREPARER: Cynthia Fletcher, Director of Facilities Management BUDGET IMPACT: None BACKGROUND: At Operating Budget Review December 6, 2012, staff was asked to information/rationale for overnight security (11pm to 7am) at City Hall and comparison information from local cities (e.g. Cambridge, Waterloo, Guelph, RATIONALE / ANALYSIS: Security Services has evolved into a 24/7 service over the past years. Security Services started in parking garages and the former City Hall and Revenue Hall was built as an open concept facility with an underground page which closed nightly at midnight. Within a few years, the City received pres to provide parking facilities on Thursdays, Fridays and Saturdayubsequently the City Hall parking garage became a 24 hour operation to better support businesses and accommodate additional access to patrons and residents in the doShortly thereafter, internal stakeholders began to contact Facilities Maregarding the costs and response times experienced with “contract” security pr(i.e. for Community Centers, Arenas and Golf Courses alarm responses often took up t Over the years, changes have occurred within the community puttiservice providers: Police no longer respond to alarms without a charge. If security was not available after · hours, each one of the City’s sites would need to be registered a cost of $10 annually. The first alarm call to each site would be $75 call increasing by $25 to a maximum of $150 per call. There would still need to the Corporation to meet the police for each instance. Calling out staff in these instances would result in increased overtime costs. Security staff has experienced a greater number of homelessness · instances requiring an increased presence throughout the City. In 2006, Council endorsed the Corporate Security Strategic Plan. The goal outlined in the plan stated “We provide a safe and secure environment through an inte proactive approach”. Since 2006 increases in the following area The number of parks and facilities requiring security services · Requests for presence during the school year at facilities and at City of · Kitchener events. As per Emergency Procedures at all facilities, security is identlead role and contact (risk management). Overtime costs for FM call outs have decreaseview issues and determine necessity of call out. 2013-01-09 FINAL - 50 Security Staff are the first response/contact for all facility issues after hours; contractors, alarms, staffing issues. Below is a list of specif Security Staff: Desk Personnel Monitor all emergency call stations from five parking facilitie · downtown core area and provide a safe point of contact for perso Respond to phone enquiries on the parking help line (all inquiries for parking from · 6:00pm - 6:00am daily and all day Sunday), from Dispatch or Contact Center for assistance/alarm calls after hours at over 50 City Facilities (iall cemeteries and two golf courses). Provide access to 24 hour parking facility and washroom at City · Mobile Personnel 1 Respond to calls · Primary contact for all facilities for alarm calls and emergenc o Support for staff requiring assistance at sites during events, to and o determine whether to engage on-call overtime staff Provide customer service to patrons for parking at four other snot o staffed after hours Monitor all City facilities · Identify unsecured doors or non-activated alarm pads and rectifsaving o potential losses to the Corporation Identify building deficiencies or areas of concern – lights outssues of o inappropriate behavior/usage Provide a presence reducing vandalism, break and enters, and crating a safer o environment in the community Proactively identifies issues preventing them from becoming costly or greatly impacting · business functions i.e. pipe burst in Williams restaurant, power Assist police in afterhours matters on City Properties as primary key holder and site · representative. Mobile Personnel 2 Provide services as described above for parks, cemeteries and g · Responds to calls · Proactively monitor all City parks, cemeteries and golf courses · Identifies issues early preventing small issues from becoming cgreatly · impacting business Provides back up to Mobile colleague in alarm response in City · (when deemed a safety requirement) Provides assistance when required to Mobile colleague when situ: · public assistance or addressing inappropriate/aggressive behavio Secures and opens facilities for public where resources do not Public · washrooms at remote locations, Huron Natural Area, Victoria Park Security staffing levels have been set to provide expected service in the most effective and efficient manner. City staff members have worked very hard with over the years to increase the profile of Kitchener, and specifi place to live, work and enjoy. Staff regularly reviews opportunities to reduce costs t different service models, enhanced use of technology and clarifi on resourcing. 2013-01-09 FINAL - 51 Comparisons to other Municipalities: Cambridge, Waterloo, Guelph, Hamilton, London do not provide direct comparison for The City of Kitchener. All of these Municipalities do not have a public underground parking structure, or gathering squares in front of City Hall, or simila City Building Access after Security Underground Public Square/ Hours Hours Hours Parking Events Cambridge M-F 7am – Staff only 24/7 1 person No Yes 8pm Public access 2 persons M-F Sat 7am – during council, 7am –midnight 4pm special events and Sat 7am – 2pm Waterloo M-F 7am – Staff only N/A, Security Yes, no public Not at City Hall 6pm Public access Service access, only for during council, contracted for Mayor, CAO’s, special events events, GM’s and tenants scheduled for (law firm) audit review Guelph M-F 8:30 am Staff only 8am- 5pm and Yes. For Yes, person – 4:30 pm Public access for events Councilors, from transit during council, Directors – building patrols special events Secured access to routinely / the building Service under review London M-F Staff only 24/7 One Next to City Hall Main square is 7am -5pm Public access person but connected at Victoria Park a few blocks during Council Additional through controlled and special security person access. 1 level for away events M-F 8am - 4pm staff and 1 level and for events for public – 24/7 FINANCIAL IMPLICATIONS: Annual Security Staffing Costs for overnight security (11pm to 7 $387,700 including wages, benefits and vehicle costs Number of Annual pro-active initiatives and incidents/calls: 11 RECOMMENDATION: For information only. 2013-01-09 FINAL - 52 CITY OF KITCHENER 2013 BUDGET ISSUE PAPER ISSUE: BD05 - Conference Costs FUND: Operating DEPARTMENT: All PREPARER: Michael Goldrup, Director of Human Resources Tami Turner, Manager of Employee Strategies BUDGET IMPACT: None BACKGROUND: At Operating Budget Review December 6, 2012, Council directed st information regarding conference costs and Full Time Equivalents RATIONALE / ANALYSIS: The conference and seminar cost summary for staff and members of as follows: Cost FTEs General Expense (Amanda/SAP/Cityworks)$ 11,393 CAO’s Office (excluding Office of Mayor & Council)$ 25,133 56 Office of the Mayor & Council **$ 37,490 ** 4 ** Community Services$ 69,156 546 Infrastructure Services$ 65,481 428 Finance & Corporate Services$ 48,507 187 Enterprise (Golf, Utility, Parking, Fleet)$ 56,679 189 Totals$ 313,839 1,410 cost includes support staff and all members of Council; FTE’s in ** Average Conference/Seminar Costs: Per employee (excluding Mayor & Council) $ 157 Per Mayor & Council $ 3,408 Total Learning Expenditure Per Employee: Canadian Organizational Average $ 787 City of Kitchener $ 351 (Source: Conference Board of Canada Learning & Development Outlo Organizations Ready for Learning 2.0, October 2011) Note: Organizational conference and seminar costs represented 50 learning expenditures (which includes health and safety certific programs). On total learning expenditure, the City of Kitchener Canadian organization. Total Learning Expenditure as a Percentage of Payroll: Canadian Organizational Average 1.5% City of Kitchener 0.6% (Source: Globe & Mail, “Training Costs, Less is More”, Wallace I 1 FINAL - 53 An organization’s learning culture can have a significant impact on organizational performance through its emphasis on building employee skills, knowledge, and culture is dependent on the support of senior management from bo perspective. Learning culture is composed of key factors that ad organizations prioritize learning, align learning with organizat support delivery of diverse learning opportunities Our People Plan states: ‘Growing staff isn't just about ensuring we have the skills we ne our jobs effectively. That's just one piece of the equation. We job to position our city for the future. We have a civic respons professional development, and creating opportunities for advance imperative we continue our commitment to learning so we are alwa gears in the face of a rapidly and constantly changing municipal Deloitte was engaged to lead the City through a comprehensive le needs assessment in 2011. They stated in their final report that commitment to learning and development by the organization and t In spite of the fact that we are an organization that enthusiast learning, total learning expenditures per employee when grouped learning culture index of weak $575, moderate $732 and strong $1548, the City of Kitchener scale average at $351 per employee per annum. (Source: Conference Board of Canada Learning & Development Outlook 2011: Are Organizations Ready for 2011) Optimally, training and learning budgets should be in the range financial commitment will allow us to better support and develop meet the needs of the community and the organization and thus fulfill our mandate in the People Plan. RECOMMENDATION: For information only. 2 FINAL - 54 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD06 – 2012 Projected Results FUND: Operating DEPARTMENT: Finance & Corporate Services Department, Financial P PREPARER: Debra Fagerdahl, Manager of Financial Planning BUDGET IMPACT: None BACKGROUND: At Operating Budget Review December 6, 2012, staff was directed actuals to the Summary of Budget Changes By Division report. RATIONALE / ANALYSIS: Refer to the attached appendix for the summary report by Divisioreport includes projections of year end actual results for 2012. These projections are based on th information in the City’s financial system up to January 4, as well as any known adjustments that are still not reflected in those numbers. As the majority still outstanding, the projections are still subject to considerable c For the August variance report, staff was projecting a year end attached projection forecasts a deficit of $449,000. The single largest c Winter Maintenance, which is now projecting a surplus of $1.25M as of August. FINANCIAL IMPLICATIONS: Not applicable. RECOMMENDATION: For information only. 2013-01-09 FINAL - 55 CITY OF KITCHENER 2013 BUDGET ISSUE PAPER ISSUE: BD07 – Base Budget Adjustments to Accomplish 3% Reduction FUND: Operating DEPARTMENT: Finance & Corporate Services – Financial Planning PREPARER: Debra Fagerdahl, Manager of Financial Planning BUDGET IMPACT: None BACKGROUND: At Operating Budget Review December 6, 2012, staff was directed to provide the list of adjustments required to reduce the 2013 tax rate increase by 3%. RATIONALE / ANALYSIS: Report FCS-12-186 included a chart that summarized the reductions and is replicated below. No additional details are provided for the first four items in the chart as the comments provided adequately details the reductions. Additional details regarding the library reductions are included in issue paper BD02, and base budget adjustments are broken out into more detail in the chart on the following page. 2013-01-09 FINAL - 59 FINANCIAL IMPLICATIONS: Not applicable. RECOMMENDATION: For information only. 2013-01-09 FINAL - 60 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD08 – Deferred/Referred Grant Issues FUND: Operating DEPARTMENT: Finance & Corporate Services – Financial Planning PREPARER: Ryan Hagey, Director of Financial Planning BUDGET IMPACT: For Council’s direction BACKGROUND: The City offers grant funding to external organizations for a nu are provided based on direction from Council. During grant disc deferred/referred funding decisions on some grants to final budget day. Funding for all of these grants has been included in the proposed 2013 budget, so any red correspond with a reduction in the tax levy increase. RATIONALE / ANALYSIS: 1) Community Environmental Initiative Grant (CEIG) Council allocated a portion of the available CEIG funds, closed deferred the decision about the ongoing level of CEIG funding th “That action to permanently reduce the annual allocation to the $10,000. to $5,000. be deferred to the January 17, 2012 special Services Committee meeting for consideration as part of the fina 2) Tier 2 Community Grants Council referred the decision about these grants to final budget resolution: “That consideration of the $150,790. allocation to the 2013 budget for Community Grants Tier 2, be referred to January 17, 2013 final budget day. Council later reduced the amount available for Tier 2 grants by additional amount to the tri-Pride Community Association Inc. Therefore the total amount available for Tier 2 Community Grants is $147,790. 3) Creative Enterprise Initiative (CEI) Council referred the decision about this grant to final budget d resolution “That consideration of the 2013 operating grant in the amount of Creative Enterprise Initiative, be referred to January 17, 2013 FINANCIAL IMPLICATIONS: None, subject to Council’s final direction. RECOMMENDATION: For Council’s direction. 2013-01-09 FINAL - 61 CITY OF KITCHENER 2013 BUDGET ISSUE PAPER ISSUE: BD09 – Summary of Public Input FUND: Operating DEPARTMENT: Finance & Corporate Services – Financial Planning PREPARER: Ryan Hagey, Director of Financial Planning BUDGET IMPACT: None BACKGROUND: Public engagement has been a significant area of focus for the 2Both traditional and new methods of engagement were employed for this, and the budget process was advertised more heavily than in recent years to encoawareness and participation. Print ads were placed in local newspapers (The Record and Kitchen as well as Your Kitchener. Social media including the Facebook also used to promote the budget generally, as well as specific ban Expert (described below). Lastly, a comprehensive budget webpage was developed to provide budget information. The efforts taken and the corresponding res RATIONALE / ANALYSIS: 1) Citizen Survey In July, the Survey Research Centre at the University of Waterlo175 Kitchener residents regarding their attitudes towards tax increases and seas part of the Waterloo Region Area Survey. The results were provided to Council in August as part of report FCS-12-131, and the main questions are also summarized lathis issue paper. In general, the results showed that the majority of citizens (62%) preferred maintaining existing services at an inflationary tax rate increase cited as 2) Ask an Expert In December, staff conducted an Ask an Expert session focused onAsk an Expert is a new series of one-hour Facebook events which allo directly with City personnel at specific times on specific subjesession had ten questions from six people which are attached with the associ 3) Interactive Budget Website In mid-November, staff launched an interactive budget website that includes an online calculator to help residents understand the impact of budget chaon their property taxes. As of January 2, the interactive website had 481 hits, aresidents submitting their preferences for potential service reductions. summarized and the comments have been attached. 4) Other Feedback Channels Staff has solicited feedback via e-mail, voice-mail and regular has been received and is attached for Council’s information. 5) Public Input Night On January 7, the City held a public input night where residents directly. In total, 14 delegations spoke before Council on a va (number of delegations indicated in brackets): continued support for arts & culture spending (x2) · supporting the Creative Enterprise Initiative (x3) · balancing long term investment and short term rate increases (x · limiting rate increases to CPI inflation (x2) · 2013-01-09 FINAL - 62 sustainable public sector pensions (x1) · maintaining Fire service levels (x1) · phasing out downtown garbage bins (x1) · fully implementing the cycling and trails master plans (x1) · A more detailed record of the meeting is available through the minutes and Corporate Services Committee meeting held January 7, 2013. FINANCIAL IMPLICATIONS: None. RECOMMENDATION: For information only. 2013-01-09 FINAL - 63 1) Summary of Citizen Survey Question 1: If you were prepared to pay increased property taxes for bette of the following categories of service would you improve? Service Yes No Protection to People and 51% 46% Property Transportation Services 69% 30% Recreation and Culture 63% 35% Parks and Trails 63% 35% Growth Management and 67% 31% Economic Development Staff comment: The results of this question show that there is n to increase if citizens are prepared to pay higher taxes. There any of the services included in the survey, and the results are service areas with the exception of protection services (e.g. fi somewhat below the results of the other four areas. Question 2: If you had to reduce City services to keep property taxes low, categories of service would you reduce? Service Yes No Protection to People and 18% 79% Property Transportation Services 26% 71% Recreation and Culture 41% 57% Parks and Trails 51% 47% Growth Management and 33% 64% Economic Development Staff comment: In contrast to the results to the first question, strong support to reduce services in any of the areas included i property taxes low. Only Parks and Trails received more than 50 reduction, and exceeded that threshold by the smallest of margin Question 3: As a Kitchener taxpayer, would you rather: a) That Kitchener n taxes, even though that means reductions to service; b) That Kit at the rate of inflation (e.g., 2.0% to 2.5%) and maintain curre increase property taxes by more than the rate of inflation so th and variety of services? Option % of votes No tax rate increase, service reduction 29% Inflationary tax rate increase (e.g., 2-2.5%), maintain services Beyond inflationary tax rate increase, with increase to services Staff comment: These results show that a majority of citizens su existing service levels at an inflationary rate of tax rate incr option received more than twice as many votes as the next option reduce service levels. Finally, the results of this survey show appetite for increasing service levels through tax increases tha 2013-01-09 FINAL - 64 2) Summary of Ask an Expert 2013-01-09 FINAL - 65 2013-01-09 FINAL - 66 2013-01-09 FINAL - 67 4) Other Feedback Channels Letter from A. Beaupre dated January 2, 2013 (attached) · 2013-01-09 FINAL - 70 FINAL - 71 FINAL - 72 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD10 – Building Division FTE Historical Analysis FUND: Operating DEPARTMENT: Community Services – Building Division PREPARER: Mike Seiling, Director Building Division Alicia Italiano, Senior Financial Analyst BUDGET IMPACT: None BACKGROUND: At Operating Budget Review December 6, 2012, staff was directed historical information on the actual number of staff or FTE’s to operate th budget. Included below is a chart outlining these numbers as well as some additional information to help explain the trends and issues facing the Bui RATIONALE / ANALYSIS: In 2006, the Ministry of Municipal Affairs and Housing revised t the Building Code Act and Building Code related to the administration of municipal Building Departments. Specifically, the changes surrounded fees being at , the requirement to produce an annual report outlining both direct anand the establishment of a reserve fund for the purpose of administratio indirect costs of operating the Building Division is a transfer for such expenses as heat, hydro, floor space occupied and a portion for services pro including Council. The operation of the Building Division has nowith the exception of the payment of indirect costs to the City. *Note in 2011 direct expenses increased by approximately 225K as the equivalent of 3.5 people were transferred directly into the Building enterprise; previously th After taking into account the note above, the graph shows graduadirect expenses at an inflationary level since the beginning of the Building Enterprise. In contrast to the steady level of direct expenses, the revenues generated are extremely volatile from year to year. 2013-01-09 FINAL - 73 is the purpose of the Building Stabilization reserve fu nd to mitigate large fee increases in any one year. In years of high revenues, like 2007 and 2010, the BuEnterprise generated surpluses of $1.5M contributing to a healthy reserve balance wit. These funds are held in the reserve to ensure rates are stable in years like 2014 to 2015 when revenues are projected to temporarily drop down. Even with the the reserve is not projected to go into a deficit during the slowdown. Although revenues can fluctuate quite drastically in a year, there is not a one to one relationship between permit revenue and the number of permits issued. As demonstrated in the graph below, the actual number of permits has been fairly consistent otime. However, the revenues will vary based on the size and type of project. A good example of this is in 2007 and 2008, the number of permits was almost identical while the revenue generated differed by almost a million dollars. Given the volatility in revenues, not only from year to year, buit makes staffing challenging. Workloads vary depending on the number of permits and the type of permits; commercial versus residential. When a building permit is issued in one year, Building’s statutory requirements (workload) is not complete; site inspections of the construction build often exceed one year from start of construction. The construction build out is extended beyond one year for large and complex projects such as the new pIn reviewing building permit statistics, it is important to consider two factors; staff resources are required to complete site inspections after building permit issu one year is paying for inspections in future years. As can be seen in the chart below, actual staffing levels have b Retaining qualified technical staff in economic slowdowns is vit exposure to liability and meet legislative requirements. For example, there is a legislated requirement that staff make a decision on a building permit application within a specified number of business days based on the size and type of project. The same type of re applies with respect to the turnaround time for site inspectionsMunicipal Building Officials) are now required to be provincially qualified. Each lperson results in a loss of investment in training and time which does building code enforcement, and hiring or replacing technical and professi The building reserve fund is used during economic slowdowns to manage staffing levels when there are temporary fluctuations in activity. The Building Enterprise does not staff at 100%, and 2013-01-09 FINAL - 74 continues to monitor workload throughout the year to e nsure three are adequate staff resources to meet statutory obligations. For example, the Building Enterprise has not backfilled all maternity leaves or immediately filled vacancies due to retireme The chart below, as requested by Council, reflects full time equivalent (FTE) staff levels. The actual number of staff working in the Building Enterprise can fl to staff turnover, maternity leaves, retirements etc. The calcul FTE’s is done by taking total payroll hours for the year divided by 1820 hours which is the standard number of hours one salaried employee is paid for in a given year. The re paid by the Building Enterprise. For example, in 2010 an emplomaternity leave for half of the year so the budgeted headcount is 25.5 instead of 26 as only 50% of t budgeted. FINANCIAL IMPLICATIONS: Not applicable. RECOMMENDATION: For information only. 2013-01-09 FINAL - 75 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD11 – Gas Transfers to the Tax Stabilization Reserve Fu FUND: Operating DEPARTMENT: Finance & Corporate Services – Financial Planning PREPARER: Ryan Hagey, Director of Financial Planning BUDGET IMPACT: For Council’s Direction BACKGROUND: At Operating Budget Review on December 6, 2012, staff was directed to provide additional information on the transfer of funds from the Gas utility to the RATIONALE / ANALYSIS: In the spring of 2012, Council approved a comprehensive reserve target funding levels for all reserves and included the principl used for the specific or intended use for which they were establ reserve fund (TSRF) is meant to provide funding to stabilize the the next year by providing for non-recurring expenditures and re years’ operating deficit and surpluses. The 2013 budget assumes the TSRF to tax supported operations which will deplete the rese In fall 2012, Council received a report related to a gas rate rebe enacted at the time of setting gas rates in mid-2013. The new methodology ensures that gas rates reflect Kitchener Utility costs and are consistent with the provincial r. It also ensures that the City of Kitchener earns a reasonable and steady rate of return fIn 2013, this amount is $13M which is used to fund tax-based operations ($7.5M) and capi FINANCIAL IMPLICATIONS: In 2013, the highest rate of return which can be reasonably justfrom the gas budget (gas delivery and other programs) and transferred to additional transfer would be inconsistent with Council’s approved reserve fund policy and the principles adopted for the gas rate redesign. It should be notet the projected 2013 reserve balance for gas delivery and other programs is between the minimum/maximum benchmarks, meaning that there will be no “surplus” of funds available for r The TSRF will be depleted by the end of 2013, which means there will be no funding available to transfer to tax supported operations in 2014. It should be noted that the TSRF is not meant to be an ongoing funding source to the tax base, but is meant to Removing the transfer from the TSRF will impact the 2014 tax ratly 0.91%, and has been included in the overall increase of 3.32% projected for Council will note that there is potential for the gas transporta balance above the target maximum in the first half of 2013 which would represe “transportation benefit” to be realized by the City before the new rate model is implemented and transportation becomes a flow-through. If this materializes, itansferred to the gas capital investment reserve fund where it will offset an anticipashortfall in the Hydro Capital Investment Reserve Fund of $7M based on recently-announced deemeterm debt rates (4.03% actual vs. current rate of 5.87% or the projection of 5.4 RECOMMENDATION: For information. 2013-01-09 FINAL - 76 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD20 – Existing Balances: Corporate Plan and Safe & Healthy Community Advisory Committee FUND: Capital DEPARTMENT: CAO - Administration PREPARER: Jeff Willmer, CAO BUDGET IMPACT: None BACKGROUND: During the 2013 Capital Budget review meeting on November 8, 201 staff investigate existing balances that remained in the Corporaand the Safe and Healthy Community Advisory Committee account ($28,5y portion of these accounts could be closed to the Capital Surplus RATIONALE / ANALYSIS: Corporate Plan: The capital funding (approximately $54,000 annually) together with Compass K (approximately $28,000 annually) covers matters related to research, community surve plan development, communication, and implementation of the City matters including Employee Culture Survey and organizational dev by this funding. The projected year-end balance is $44,900. Sucapital review process in September 2012, staff is now better able to predict expected 2013 program expenditures and have determined that program commitments in 201be maintained in this account. The remaining $24,900 has been close Safe and Healthy Community Advisory Committee: The use of this funding was addressed in Report CAO-12-047 regarding the future of the Safe & Healthy Community Advisory Committee. By year-end 2012 the full balance will have been expended, in large part to cover a portion of the cost of contra FINANCIAL IMPLICATIONS: The amount of $24,900 has been closed out to Capital surplus frocapital account. As the Safe and Healthy Community Advisory Committee account wil by year end, there is no opportunity for close out. RECOMMENDATION: For information only. 2013-01-08 FINAL - 77 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD21 – Alternate Emergency Communications Centre FUND: Capital DEPARTMENT: CSD- Fire PREPARER: Tim Beckett – Fire Chief BUDGET IMPACT: None (funding already included in proposed 2013 b BACKGROUND: During the 2013 Capital Budget review meeting on November 8, 201Council requested more information about the Alternate Emergency Communication Center ( The Fire Department operates a 24/7 emergency communications cened to maintain state-of-the-art equipment to meet the demands of the c of Kitchener. The Fire Department has an approved business plan The AECC will provide the necessary business continuity and redus liability to deliver continuous emergency services to the citizens of Kitchener and the contract municipalities serviced in the event of a failure or evacuation This project was identified in 2010 as a result of an internal audit and the identification of the r and liability to the Corporation. It was included in the Fire De and was included in the division business plan in 2012 that was approved by Council. The project plan for phase 2 has been finalized; however, staff willwork on Phase 2 until such time as there is a greater clarity on the potential creation of a regional dispatch centre and the implications for Kitchener Fire’s commun There are three phases to the development of an Alternate Emergency Communications Centres: Phase 1 will be completed by early 2013. This phase provides for changesand · back up procedures, and the addition of an auto dialing system tDirect Detect customers regarding their service. Phase 2 would provide the Fire Department with a centre that will connect all systems at · Fire Headquarters communication centre, virtually, to a remote alternate centre at the Kitchener Operations Centre. This will allow for seamless operatprovided that Fire Headquarters equipment is still functioning (e.g. Evacuation as a result of a localized emergency in the area, a fire in the building that has not caused damage to the equipment room, a release of a hazardous substance within the building or evacuation). Phase 3 would provide for a stand alone fully independent centre that wthe · Headquarters communications centre in the event of an emergency. It would no Fire Headquarters equipment to be functioning. This would allow mless operation in the event that the centre at Fire Headquarters was not functioning due to things such as fire, flood, explosion etc. As in phase 2, staff would be unable to work, but the equipment would also not be functioning. There is further testing, planning andto implement phase 3, therefore it is not being requested at this t RATIONALE / ANALYSIS: The Kitchener Fire Department Communications Division dispatches Kitchener Fire, Waterloo Fire Rescue, Woolwich Fire, Wilmot Fire from various sources, including police / 911, ambulance and alar calls are received and dispatched by Kitchener Fire communicatio Department dealt with a total of 15,960 emergency incidents in 2 service fee with the other municipalities. 2013-01-08 FINAL - 78 The Division monitors alarms to support the Direct D etect program, servicing customers in Kitchener, Waterloo, Wellesley, Wilmot, Woolwich and Cambridge, including a public schools in the Region and all Waterloo Regional Housing a Currently only basic continuity plans are in place that would in at EMS Central Ambulance Communications Centre. All operations w ability to monitor Direct Detect alarm signals from any location such, all customers (approximately 3000) would have to be notifi These plans were put into place several years ago, prior to Direevolving and when call volumes were much less Benefits of an Alternate Emergency Communications Centre include Providing improved Communications Centre systems reliability an · building on existing assets and expertise. Ensuring streamlined and seamless emergency Communications proc · evacuation procedures, leading to efficiencies in emergency call Providing a secure, permanent and technologically current offsi · City of Kitchener control, from which to receive, dispatch and m incidents and monitor Direct Detect alarms. Effectively demonstrating that every reasonable step has been t · emergency communications and alarm monitoring can be maintained infrastructure failure, system failure, large scale emergencies of the primary Communications location. FINANCIAL IMPLICATIONS: A new project has been included in the proposed 2013 capital budAlternate Emergency Communications Centre (AECC). The estimated cost for phase 1 and 2 of the project is $220,000. Prior moving forward with phase 2, staff will review the progres regional dispatch project. Phase 3 of the AECC will require additional funding of approxima. Prior to moving to 3, staff would establish a formal project plan, and further det phase before bringing forward a request to council in a future budget The direction for the regional dispatch could also result in a change to the plans in RECOMMENDATION: For information only. 2013-01-08 FINAL - 79 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD22 – Fire Fleet Details FUND: Capital DEPARTMENT: Fire PREPARER: Tim Beckett, Fire Chief BUDGET IMPACT: None (funding already included in proposed 2013 b BACKGROUND: During the 2013 Capital Budget review meeting on November 8, 201 on the age of the fire fleet as well as the 10 year capital proj RATIONALE / ANALYSIS: The Fire division must maintain an effective and reliable fleet subsequent major equipment to meet the demands for an all-hazard Fire, in collaboration with Financial Planning, has developed a major fleet and equipment including self contained breathing app schedule can be found in the tables below. Table 1 – Listing of Vehicles and Year Purchased YEAR VEHICLE DESIGNATION & ASSIGNMENT Pumper 1 (KP-1) 45352009 Pumper 2 (KP-2) 45342009 Pumper 3 (KP-3) 45362009 Pumper 4 (KP-4) 45312007 Pumper 5 (KP-5) 45322007 Pumper/Tower 6 (KP-6) 45292005 Reserve Pump 1 (KP-8) 45231998 Reserve Pump 2 (KP-9) 45201995 Aerial/Ladder (KA-2) 45382009 Aerial/Platform (KA-4) 45392010 Rescue 1 (KR-1) 45372009 Rescue 2 (KR-2) 4525 (Reserve Rescue)2000 Tanker 6 (KT-6) 45272001 Hazmat 1 (KHZ-1) 45262001 2013-01-08 FINAL - 80 Table 2 – Equipment Cost and Years of Service Table 3 – 15 Year Capital Forecast The capital projection shows that the account balance will be re anticipated replacements. Maintaining a reasonable balance in t foreign exchange rate changes and provide funding for emergency FINANCIAL IMPLICATIONS: None. RECOMMENDATION: Information only. 2013-01-08 FINAL - 81 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD23 – Environmental Remediation FUND: Capital DEPARTMENT: General Expenses PREPARER: Bonnie Saunderson, Senior Financial Analyst BUDGET IMPACT: None (funding already included in proposed 2013 b BACKGROUND: During the 2013 Capital Budget review meeting on November 8, 201 issue paper providing details of the Environmental Remediation F RATIONALE / ANALYSIS: The environmental remediation capital account provides funding f Examples include sites which were consolidated to the Kitchener Elmsdale). The chart below shows the revenues and expenditures for this account over the 10 year capital forecast. Maintaining a balance to fund remediation projects is necessary address unforeseen environmental issues. FINANCIAL IMPLICATIONS: None. RECOMMENDATION: For information only. 2013-01-08 FINAL - 82 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD24 – Surface Reconstruction Road Works FUND: Capital DEPARTMENT: INS - Engineering PREPARER: Greg McTaggart, Manager of Infrastructure Asset Plann BUDGET IMPACT: None (funding already included in proposed 2013 b BACKGROUND: During the 2013 Capital Budget review meeting on November 8, 201 prepare an issue paper regarding the capital works programming f ‘surface reconstruction’ by providing the total dollar amount in developed this forecast. RATIONALE / ANALYSIS: Each construction season, the Engineering Division carries out won the remediation of surface infrastructure within the road allowaassets such as the road structure (pavement & base), curbs, and sidewal streetscape features can also be included in the scope of work. s of work conducted under the category of “surface reconstruction” in the capital prare varied. Annual rehabilitation programs such as “Pavement Surface Treatment” and City Streets” are part of the category, along with road widening, intersection improvements, and more in-depth full reconstruction projects of all surface features within a street right-of-way. These larger projects can also include streThe key commonality of all these works is that sub-surface infrastructure such as sewers and watermains are not a primary focus of the work (although some work of this nature may be conducted from time to time as a secondary objective of a projec Capital forecasts for surface-only remediation works are primari pavement management system. This system contains data on relatively current observed and measured road quality conditions of all City streets. These measurements record a number of pavement quality factors: ride comfort, surface distress, and structural adequacy. From these independent measurements, an aggregate pavement quality index (Pis generated for each street segment in the city under its stewardship. This scoris used to ascertain the overall condition of each street segment, identify each street segment tin need of remediation, and compare such identified streets against each other for the purposes of prioritisation of capital planning for road resurfacing or a road sealing surface these programs have a fixed annual budget envelope, as many streets as possible year as will fit into the budget envelope, on a priority basis a described analysis (i.e. - streets in the greatest need are addr If a street has been identified for resurfacing due to pavement that other features of the street such as curbs or the road baseand also require remediation, the work will be pulled from the resura stand-alone project. This is due to the scope of work exceeding the capacity of the road resurfacing program, and is done primarily for risk reductite scope definition, and project planning & design. 2013-01-08 FINAL - 83 FINANCIAL IMPLICATIONS: The approved 2012 budget for surface reconstruction-type capital$4.543 million. This funded all related activities within the “Surface in the capital forecast and included activities such as construction, d A further breakdown is as follows: Type Of Work Source of Funding Amount 1) Road Resurfacing RES-FEDGAS $3,072,000 2) Full Surface RES-FEDGAS $730,000 Reconstruction Projects ENT-SAN $20,000 (6 active projects in total) 3) Pavement Surface RES-FEDGAS $97,000 Treatment C/C $21,000 4) Sidewalk Repair RES-FEDGAS $531,000 5) Pavement Management C/C $34,000 System/Road Needs Study RES-FEDGAS $35,000 6) Road Closures C/C $3,000 2012 TOTAL $4,543,000 It must be noted that the total funding allocated to this catego needs analysis, but is rather an amount that is almost entirely federal gas tax reserve fund for this purpose based on availability of fundsand its inflationary increases over the recent years has not entirely kecosts of doing this work – resulting in downward pressure on the City’ even greater challenges will be encountered as the amount of required road re will increase. This is because streets originally built in the 1be experiencing the end of their pavement life, and a far greater aere constructed in this era than previous eras. The 2012 capital forecast allocated an average of $3.66 million/year for road resurfacing over the 10 years of the forecast. If this funding allocation stays a, and there are no further cost increases for road resurfacing in that 10 year p, Kitchener’s pavement quality will marginally hold at current levels (currently slight or potentially slowly erode downward. A complicating factor howeincreasing volume of resurfacing needs has been identified to occur in the he current needs, and will generate significant challenges in bridg funding in the forecast and funding required to retain target or. As such, any actual reduction in funding over this ten-year period would have very serious consequences for the ability to retain current pavement quality 2013-01-08 FINAL - 84 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD25 – Earth Week Program FUND: Capital DEPARTMENT: INS - Operations PREPARER: Greg Hummel, Manager Park Planning, Dev. & Operations BUDGET IMPACT: None BACKGROUND: At Capital Budget Review November 8, 2012, staff was directed to pr information on the Earth Week Program, the balance in 2012 and t RATIONALE / ANALYSIS: The City of Kitchener continues to support both community-drivenEarth Week events for over 15 years. Community consultations continue to sh environment is an important issue. Earth Week Program Description The Earth Week Program coordinates a variety of events annually Earth Hour: Households, communities and business in cities around the world j lights for one hour in a symbolic gesture to show that it's posstogether, to make a huge impact and to bring attention to the issue of global Staff from the Earth Day Planning Committee worked in collaborat Downtown Kitchener BIA to organize an Earth Hour family event in 9:30 pm. This event featured live musical performances, a non-el face painting. Litter Pick-ups: Recognizing that community clean-ups are easy ways to get many people involved, that they bring neighbours, colleagues or classmates together in a common cause, and that they may build awareness of how a small act for a short time can have a l help participants develop a sense of their influence on their en Planning Committee continued to provide support for the ‘Organize Your Ow clean-up and School initiated clean-ups (elementary and secondar 20 Minute Makeover: th The 20 Minute Makeover took place this year on Friday April 20 with individuals, businesses, city staff, councillors and other organizations taking 20 minutes from their busy schedules to clean up the grounds around their work, schools, or homes. Tim Horton’s Community Clean-up: st The large Community Clean-up, organized by City staff, was held from 10 am to 12 pm. Though in past years this event has been held in Victoria Park, this year, to broaden the public awareness of the signature parks in the commu Community Clean-up was held at McLennan Park. Tim Horton’s also this event by contributing t-shirts, refreshments, significant promot 2013-01-08 FINAL - 85 Environmental Committee Environmental Showcase: The April 19th meeting of the Environmental Committee took a dif hosting an Environmental Showcase to highlight various environmeThe Environmental Showcase provided opportunities for citizens to leollaborate and become more involved. Kitchener’s Natural Areas Event: A Kitchener Natural Areas Program (KNAP) event was held at the Hand was attended by 500-600 people. Numbers were lower than past years battributed to the unusually cool weather. KNAP provides families with a varon learning opportunities related to the environment and brings awareness to the community of the natural areas within the community. Blooming Earth Eco-Fair: City staff collaborated with community members for the 6th annuaFair at st Kitchener City Hall which took place on Saturday April 21 at the Kitchener Market and featured a variety of displays and activities that were developed to enlion how we can improve our environmental practices and reduce our enprint in various areas of our lives. Free GRT Bus Shuttle: st A bus shuttle was provided on Saturday April 21between the Bloomin’ Earth Eco-Fair at City Hall, the Tim Horton’s Community Clean up event at McLennan ParkAP event at Huron Natural Area. The bus service was an environmentally friendly alternative mode transportation and was used to increase accessibility to the eve Earth Week Program Funding The Earth Week Program is funded annually through the ten-year c2012 account summary as of October, 30 2012 is shown in table 1 below. Some 2012 costs are still outstanding, so the final yearend balance is anticipated to be a Table 1: Earth Week Program Account Summary Opening Balance 2012 Revenue 2012 Expenses Ending Balance $4,274 $30,860 $15,350 $19,784 The ten-year forecast for the Earth Week Program is shown in tab Table 2: Earth Week Program Ten-year Capital Forecast 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 31 32 33 34 35 36 36 37 38 38 Note: Amounts shown in 000’s FINANCIAL IMPLICATIONS: No reduction in the account is recommended, as it is staffs understanding that the Region will be reducing their commitment to the Earth Week Program, meaning may fall to The City of Kitchener. Until more is known about possible changes to the Region’s ongoing commitment, staff recommend maintaining funding in this RECOMMENDATION: For information only. 2013-01-08 FINAL - 86 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD26 – Park Programs (Capital & General Provision) FUND: Capital DEPARTMENT: INS - Operations PREPARER: Dan Ritz, Supervisor Design & Development, ext. 4348 BUDGET IMPACT: None BACKGROUND: During the 2013 Capital Budget review meeting on November 8, 201ouncil requested additional information on how park programs, specifically capitageneral provisions are funded and how unfunded programs could be addressed. RATIONALE / ANALYSIS: The Parks Strategic Plan was approved by Council on October 4, 2Of the approximately 100 action items from the Strategic Plan, several strategies had recommendations that have in part been applied to the 10-year bu Park Programs 2013-2022). However, some of these park projects still remain underfunded to limited capital resources and are not included in the current2022 capital budget forecast. 2013-01-08 FINAL - 87 Addressed in the Capital Forecast The Parks Strategic Plan (2010) made recommendation that funding for new neighbourhood parks (rec. 5.3.2) be increased to address the backlog of park development and th park rehabilitation of older inner city parks (rec. 5.1.3) be adbudget. Funding for General Park (Neighbourhood Parks) was increased inccapital forecast and annual funding for Park Rehabilitation will begin i Table 2 – Funded Park Programs Neighbourhood Parks Recommended in Existing Parks Strategic Plan Capital Program (2013-2022) (2013-2022) General Park $6,100,000 $5,519,000 (New Neighbourhood Parks) Park Rehabilitation $2,000,000 $1,780,000 (Older Central Core Parks) Not Addressed in the Capital Forecast The Parks Strategic Plan (2010) made recommendation that fundingWide Parks be identified and included in the ten-year capital forecas2, McLennan Park rec. 4.1.4, and Huron Natural Area rec. 1.3.3). At present, there are only nominal amounts identified in the 10-year capital forecast. Table 3 – Underfunded Park Programs City-Wide Parks Unfunded Existing Existing Capital Program Capital Program General Provision (2013-2022) (2013-2022) (2013-2022) Victoria Park $2,880,000 0 $594,000 McLennan Park $2,175,000 0 0 Huron Natural Area $3,000,000 $50,000 0 Victoria Park, McLennan Park and Huron Natural Area (HNA) are thwide parks utilized by residents on a daily basis. All three have no signifeneral Provision fund to address both the completion of the park mastergoing improvements and upkeep. Park Capital Program A park Capital Program typically addresses the completion of park development id associated Park Masterplan. For the three city-wide parks, staffyear work programs that remain unfunded (see table 3 above, column Un Examples of outstanding projects include: Victoria Park -Roads/Trails (Dill-Schneider final coat of aspha -Park Features (benches, signage, lighting improvements) Strategic Plan Phase 2 -Playground (replacement of playstructure) McLennan Park -Road/Parking (final coat of asphalt, south parkin -Trails (neighbourhood connections, asphalt surfacing) Masterplan -Park Features (benches/tables, garbage containers, ice rink) -Landscaping (shade trees) Huron Natural Area -Trails (new trail & boardwalk development) -Conservation (restoration areas) Masterplan -Front Entrance (natural playground, parking expansion) 2013-01-08 FINAL - 88 Park General Provision A park General Provision is usually developed once the park is fark improvements would include restoration and upkeep to road/parkinls, landscaping, and park amenities outside of normal operating budgets. These loments ensure the sustainability of the city-wide park assets. At present, Victoria Park has a modest annual General Provision of $54,000 (2013), while McLennan Park and Huron Natural Area have not been established (above, column Existing General Provision). FINANCIAL IMPLICATIONS: Presently, park Capital Programs for the three city-wide parks (HNA) are underfunded and are not included in the 10-year capital budget due to limited available resources in the park capital budget. In order to address this shortfall, a funding source such as LEAF, tax levy increase or shift of corporate capital budget pri In addition, park General Provisions have not been established furon Natural Area as the related Masterplan works are not completed and typically Provision would be established on completion of the work. For the 2013 budget, staff and Council have both placed emphasis Ash Borer and increased investment in Community Trails. In the the capital forecast for 2013 to address the remaining funding shortfalls for parks, staff will continue to pursue this issue as part of future budget developme RECOMMENDATION: For information only. 2013-01-08 FINAL - 89 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD27 – Conservation of the Schoerg Barn Foundation FUND: CAPITAL DEPARTMENT: INS - OPERATIONS PREPARER: Dan Ritz, Supervisor Design & Development, ext. 4348 Leon Bensason, Coordinator Cultural Heritage Planning, ext. 2 BUDGET IMPACT: None (funding already included in proposed 2013 b BACKGROUND: During the 2013 Capital Budget review meeting on November 8, 201 prepare an issue paper providing details of the Schoerg Barn cap RATIONALE / ANALYSIS: The Schoerg Barn foundation is located in the Pioneer Tower West Pioneer Memorial Tower, on land settled in the year 1800 by the The Schoergs and Betzners were the first Mennonite pioneers to estab settlement in what would become Waterloo County. A Notice of Intent to designate the c.1830 Schoerg Barn was passed by Council in December 2004 and subseque owner. The appeal was withdrawn in 2009 and as part of a negotia settlement, the City acquired the barn foundation for the purpos heritage features. The Schoerg Barn foundation is one of two historic stone foundations located immediately east of Pioneer Memorial Tower. The foundation of the adjacent c.1830arn was acquired by the City through parkland dedication as part of the developme subdivision. That foundation was restored in 2010 as part of the development of an interpretive feature completed in 2011. Funding for the restoration of the Bearn foundation came from the General Park and Community Trail budgets. The property on which the Schoerg Barn foundation is located also forms part of the City’s open space network; however, funding has not been secured for conservof the barn foundation or improvements to the site for public use. With Stage 3 of the JHS Properties Inc. subdivision recently registered, Joseph Schoerg Crescent has been extended td public access to the Schoerg Barn foundation. As a result, develential lots around the Schoerg Barn foundation is proceeding. The historic Schoerg Barn foundation is in need of repair. Staffcontracted MuirTec Inc. to conduct a physical assessment of the foundation and to provide aestimate for its conservation. The MuirTec Inc. report outlines two options relating to the conservation of the historic foundation: OPTION A: BASIC RESTORATION $350,000 (2013) The MuirTec report estimates that funding in the amount of $300,and recommends that the following work be undertaken to restore the arn foundation to a basic level: • Removal of overgrown vegetation, concrete mangers and tie up s • Make safe the water cistern on the east side of the barn found • Demolition and removal of more recent concrete masonry addition, features and concrete slab; • Restoration of the stone retaining wall to the south; 2013-01-08 FINAL - 90 • Reinstall loose masonry around top of the existing fou ndation wall; • Repoint existing stone and brick masonry; • Replace timber components required as part of the masonry rest • Clean and grade site; • Excavate and construct a retaining wall to provide lateral structural support to the north face of foundation wall. Staff also estimates that an additional $50,000 is required to complete site works relating to the use of the property for recreation and cultural interpretation iing area grading and landscaping, signage, and integration with the surrounding commu Total cost for restoration and site work is estimated at $350,00 OPTION B: SHORT-TERM REMEDIAL WORK OPTION $3,500 (2013) + $5,00 If the City does not proceed with a basic level of restoration oin 2013, the MuirTec report recommends that the following work be under foundation from further deterioration and position the City to d • Cover the masonry wall with ultraviolet stabilized tarps ancho • Monthly inspections and repair or installation of replacement The initial cost for the installation of the tarps is estimated The ongoing cost for monthly inspections and repair is estimated In addition, two public safety concerns were identified in the Malready been addressed by staff through normal maintenance operations: • Make safe the water cistern on the east side of the barn found • Dislodge, remove and store loose stones on top of the foundati RISK OF TAKING NO ACTION No action will likely result in accelerating the deterioration of t restoration cost, and in the longer term could put the historic FINANCIAL IMPLICATIONS: Staff have considered two financial options for the Schoerg Bar OPTION 2013 2014 2015 2016 2017 2018 Total Basic Restoration A 350,000 350,000 (Immediate) Short-Term Remediation & B 8,500 5,000 5,000 5,000 5,000 350,000 378,500 Basic Restoration (deferred) It should be noted with option B, that deferring the basic restoannual remediation and may increase the likelihood of putting the histoif restoration work does not proceed by 2018. Alternative Sources of Funding While City staff will continue to investigate opportunities for ces of funding, it should be noted that municipal led projects either do not qualify or ar for heritage funding. Inquiries will be made with the Waterloo R under the Foundation’s Building Grants program and at the Provinwith the Ontario Heritage Trust and Heritage Canada Foundation respective RECOMMENDATION: For information only. 2013-01-08 FINAL - 91 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD28 – Debt to Reserve Ratio FUND: Capital DEPARTMENT: General Expense PREPARER: Ruth-Anne Goetz, Senior Financial Analyst BUDGET IMPACT: None BACKGROUND: During the 2013 Capital Budget review meeting on November 8, 201 prepare an issue paper providing a revised debt to reserve graph debt or the Auditorium Expansion debt. RATIONALE / ANALYSIS: The following graph depicts the debt to reserve ratio for the CiAuditorium Expansion debt had been issued. FINANCIAL IMPLICATIONS: None. RECOMMENDATION: For information only. 2013-01-08 FINAL - 92 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: BD29 – Allocation of LEAF Funds (Community Trails & EAB) FUND: Capital DEPARTMENT: INS - Operations PREPARER: Dan Ritz, Supervisor Design & Development, ext. 4348 Ryan Hagey, Director of Financial Planning, ext. 2353 BUDGET IMPACT: For Council’s Decision BACKGROUND: At Finance and Corporate Services Committee on November 26, 2012 discontinue the Local Environmental Action Fund (LEAF) and deferthe allocation of the remaining $2.82M balance in the LEAF reserve f Additionally, during the 2013 Capital Budget review meeting on Nouncil requested additional information on how trails could be funded b3 million and an analysis of dollar per linear meter of trail vers RATIONALE / ANALYSIS: Allocation of Remaining LEAF Funds The background and options for the allocation of remaining LEAF have been comprehensively presented to Council through a variety of commit010, FCS-12-187), Compass Kitchener consultation (CAO-12-43) and alsoindividual ranking of their priorities. Through discussions at Finance and Corporate Services Committee and direction by Council on December 3, 2012, the Council-proposed L Emerald Ash Borer (EAB) - $820,000 · Trails - $2,000,000 · The LEAF Fund Allocation provides for a substantial investment ireplanting of street trees due to tree loss experienced by EAB for the firs allows a significant investment in our trail system for the firsUse Pathways and Trails Masterplan. Funding for other natural areas, Huron Na, Victoria Park and McLennan Park is not provided in this option. The proposed annual capital budget allocation of the LEAF funds Table 1 - Annual Allocation of LEAF Fund EAB Trails TOTAL 2013 $320,000 $400,000 $720,000 2014 $500,000 $400,000 $900,000 2015 $400,000 $400,000 2016 $400,000 $400,000 2017 $400,000 $400,000 TOTAL $820,000 $2,000,000 $2,820,000 The allocation of the $2.82M LEAF fund balance can meet some of EAB and community trails initially, but this infusion should not be conssustainable funding for each of these programs. 2013-01-08 FINAL - 93 Community Trail Funding There are many factors which determine the cost of a segment of surface material, load, etc.); recognizing this variability, the construction is $250 per linear meter in comparison to standard resurfacing ($270 per linear meter) and roadway reconstruction ( approximately. Portions of the community trails capital budget are supported th reserve fund (approx. 35%), Development Charges (approx. 11%) an 54%). In lieu of new funding sources, such as LEAF or the Commun Fund (CIIF), funding in one or more of these areas would require to provide additional resources to community trail development. In order to suitably fund trail development, the Trails Master P of $700K per year in each of the first 5 years of the plan, and years of the plan for a total ten-year capital investment of $11 beyond the ten-year forecast in order to implement the entire tr Staff recommends a ramp up of the Community Trail budget to achi capital investment target of $11M. As shown in table 2 below, th 2013-2022 includes $4.7M of the $11M Master Plan recommendation. funding could come from the following sources as shown in the ch $2M from LEAF – as outlined in table 1 above · $500k from CIIF grant & Recreational Land reserve (50/50 split) · available based on submitted applications $500k from Federal Gas Tax reserve – available but not currentl · Table 2 – Community Trails Funding (2013-2022) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 TOTAL TRAILS MASTERPLAN 11000 7008009001000110012001250130013501400 Recommended Funding Level EXISTING CAPITAL BUDGET 4734 378381384387419499554566577589 (2013-2022) FUNDING OPTIONS LEAF ALLOCATION 2000 400400400400 400 Proposed Funding Increase CIIF FEDERAL FUNDING 500 500 Asphalt Surfacing for Trails FEDERAL GAS TAX RESERVE 500 75175 250 Proposed Funding Increase TOTAL POTENTIAL TRAIL FUNDING INCREASE3000 Note: Amounts show in 000’s Summary By providing additional funds through LEAF, CIIF and the Federal community trail budget could achieve recommended funding levels Additional funding sources would be required beyond 2018 in orde sustainable funding level to meet the objects of the Trails Mast As well, by providing additional funds through LEAF, EAB would a replanting of street trees for the first two years of the infest sources would be required beyond 2015 in order to achieve a long level to address the stumping and replanting of street trees. 2013-01-08 FINAL - 94 FINANCIAL IMPLICATIONS: Refer to tables 1 and 2 above. Council’s decision on the allocation of LEAF funds to EAB and tr day. Confirmation of the CIIF grant is pending. Council may wi to the allocation of available federal gas tax funds to trails p2022 capital forecast. RECOMMENDATION: For direction. 2013-01-08 FINAL - 95 Potential Reduction Issue Paper (IP) Index IP#Issue Paper Title$ Amount Consolidate Onpoint Tools(10,175) PR01 Enhanced Sick Leave Claims Management(50,000) PR02 Eliminate Infra-Red Asphalt Program(128,500) PR03 Reduce CITS Box Office Hours(24,000) PR04 Reduce Fire Department Staff Through Attrition(480,000) PR05 Implement Fire Insurance Recoveries(200,000) PR06 Adjust Utility Billing Postage Charges(60,000) PR07 Remove Downtown Bulk Garbage Bins(29,000) PR08 Limit Grant Funding Increase to 1% in 2013(19,359) PR09 Reduce Council Technology & Home Office Budget(11,000) PR10 (1,012,034) TOTAL FINAL - 96 CITY OF KITCHENER 2 013 BUDGET POTENTIAL REDUCTIONS ISSUE PAPER ISSUE: PR01 - Consolidate OnPoint Tools FUND: Capital DEPARTMENT: Finance & Corporate Services – Information Technolog PREPARER: Dan Murray, Interim Director of Information Technolog DESCRIPTION OF POTENTIAL NET BUDGET REDUCTION: Information Technology currently maintains two versions of the Oand Information Tool. One version runs internally and is available tinternal staff and a second version of the product is available through the Internet . Information Technology staff propose consolidating the two separ allowing both the internal and external needs to be delivered frThis consolidation was not possible to achieve in the past due to technol firewall technology upgrade performed in 2011, staff can now leverage that technology to consolidate the versions and thereby realize a financial savings The public OnPoint GIS mapping tool on the Internet is used by residents an locate properties and related information as well as access to tthe City. It is also used to communicate road construction details, planning information, registered building permits as well as spatially locate a variety of other informatiThe external OnPoint mapping system is used on average of 1500 times BUDGET REDUCTION: A reduction of $10,175 to the Infrastructure Maintenance capital account can be realize avoiding paying software maintenance on the second instance of t RISKS/IMPACTS ASSOCIATED WITH REDUCTION: By consolidating the two OnPoint GIS Mapping versions onto one pa few risks that Information Technology staff will have to address Data Security – the consolidation of the two OnPoint versions is completely depe · on the ability of the software to be able to have separate security models for each version due to the difference in the information required in the of writing of this issue paper, staff believes this can be done. Performance – it is possible that having multiple OnPoint instaysical · server may introduce performance issues with either the internal Internet version. Information Technology staff do not feel that 2013-01-08 FINAL - 97 CITY OF KITCHENER 2 013 BUDGET POTENTIAL REDUCTIONS ISSUE PAPER ISSUE: PR02 – Enhanced Sick Leave Claims Management FUND: Operating DEPARTMENT: All PREPARER: Michael Goldrup, Director of Human Resources DESCRIPTION OF POTENTIAL NET BUDGET REDUCTION: Staff propose the implementation of Sun Life’s Salary Continuanc leave claims currently administered in-house. Staff estimate this will result in financial gains sufficient to off-set the cost of the service, and generate an aonal savings of approximately $50,000 per year. Currently sick leave claims are managed in-house. Claims managem WSIB/Accommodation Administrator, and the appropriate supervisor Manager, Employee Relations, as required. Management of sick lea handled in-house as well by their Attendance Management/Return t although this position has recently been eliminated. Long Term D and adjudicated by Sun Life. Sun Life’s short term disability (sick leave) duration managemen in the industry according to independent surveys. Of the 40,000 during their return to work in 2010, sixty-three per cent of the short term disability cases were resolved in less than 8 weeks. By case managing the absences, Su intervene as soon as possible, all employees are managed consist concerns are avoided and the City gets the full benefit of the c The City will have to establish rules which will determine at wh to Sun Life, for example, any sick leave claims greater than 4 d claims, they will then begin their case management which include absence right through to its resolution of return to work, trans Long Term Disability. Sun Life will communicate regularly with the City to facilitate return to work planning allowing the Accommodation Administrator to increase th safe return to work of the employees, the monitoring and managin accommodation plans, attendance issues, and improved management training on injury prevention, attendance support etc. which would mitigate the cur leave claims. Another advantage to moving the claims management can expect improvement in absence resolutions when Sun Life is managing both the short term and long term plans. In conjunction with Sun Life’s management of sick leave claims, Sun Life’s wellness partner, Buffett, to conduct an integrated dhich will analyze past, present and anticipated future claims. Information analyze statistics, WSIB claims, prescription drug claims, long and shor data is analyzed, the City will be able to project future wellness opportunities based on the organization’s current profile and forecast future health risks recommendations will be provided so that the City can plan for t interests of departments, and employee groups will be addressed through these recommendations. With these programs in place, the City will be able to enhance e job satisfaction, engagement and productivity. Staff currently iave 2013-01-08 FINAL - 98 claims would instead be able to focus their efforts on helping a as soon and as safely as possible. In doing so, the City would be taking a proactive and preventative approach to address current situations that if leftunattended, could escalate into future disease and disability claims. BUDGET REDUCTION: In 2010, the Corporation paid $1.73M in sick leave usage; this benefit increased in 2011 to $1.81M. Using a comparable municipality as a benchmark with an a267 cases per year, the cost of having Sun life manage these cases is approxim Life’s fee of $465 per case. In moving the adjudication of sick leave to Sun Life, HR staff a management and through the deterrence impact of having to anticipate meeting the medi evidence test to have claims approved, there will be a drop in s this decrease will result in financial gains sufficient to off-sfrom Sun Life and generate an additional savings of approximately $50,000 RISKS/IMPACTS ASSOCIATED WITH REDUCTION: As per Sun Life’s experience, the return on investment varies fr on how sick leave absences have been managed prior to moving to will only be able to determine the return on investment once it experience. What Sun Life can definitely advise, is that the Cit management, which means that the duration period between the tim leave to the time they return to work, is shortened. 2013-01-08 FINAL - 99 CITY OF KITCHENER 2 013 BUDGET POTENTIAL REDUCTIONS ISSUE PAPER ISSUE: PR03 – Eliminate Infra-Red Asphalt Program FUND: Operating DEPARTMENT: Infrastructure Services, Operations PREPARER: Dan Locke, Manager of Sewers, Traffic & Operational Su DESCRIPTION OF POTENTIAL NET BUDGET REDUCTION: Included in the 2013 tax supported budget is funding for infra-rThe Operations Division is responsible for maintaining roughly 1400 lane kms of road for the City of Kitchener. The infra-red unit is used to perform seamless asphalt repairs w recycled by heating and a small amount of additional asphalt is added. The asphalt i raked and rolled producing a seamless repair. This repair is a mn placing hot asphalt directly on the existing cold surface which raised structures that the plows may hit in the winter, potentially causing damage to t The Infra-red Asphalt Program was added to the Operations divisiannual growth allocation. Due to staff resources, this activity has non able to be utilized since 2010. BUDGET REDUCTION: Funding provided for this function in the 2013 budget is $128,50 RISKS/IMPACTS ASSOCIATED WITH REDUCTION: Meeting Minimum Maintenance Standards (MMS) legislation in relatmaintenance of asphalt road surfaces is achieved through crews assigned to the oad repair and utility cut activities on a daily basis. The infra-red road repair activity can be utilized to efficiently correct minor asphalt maintenance issues that may not be deficiencies according to MMS, but which may still affect operational maintensuch as snow plowing or quality of ride issues related to raised structures. 2013-01-08 FINAL - 100 CITY OF KITCHENER 2 013 BUDGET ISSUE PAPER ISSUE: PR04 - CENTRE IN THE SQUARE OPERATING GRANT AND POTENTIAL NET BUDGET REDUCTION FUND: OPERATING DEPARTMENT: CENTRE IN THE SQUARE PREPARER: SANDRA BENDER, CEO DESCRIPTION OF CITS NET BUDGET: The operating grant for The Centre In The Square (CITS) was $1,4and $1,371,449 in FY2012. The projected operating grant for FY2013 is $1,394,763 based on plus 1.7% (annual inflation rate). DESCRIPTION OF POTENTIAL NET BUDGET REDUCTION: Based on a potential budget reduction of $24,000, the potential for FY 2013 would be $1,370,763. BUDGET REDUCTION: To respond to this potential reduction, CITS would – Reduce Box Office hours and services · Implement staff layoffs · Reduction in Box Office Hours and Services – The CITS would reduce the hours of the box office to 12 noon to 6pm Mon-Sat (versus 10am to 8pm Mon-Fri and Staff Layoffs – Ticketing and Box Office staff would be laid offrating budget requirements. RISKS/IMPACTS ASSOCIATED WITH REDUCTION: Reduction in Box Office Hours and Services – Currently, the CITS provides ticketing services for the Kitchener Memorial Auditorium, Registry Theatre, Grand Philh Company and KW Little Theatre. Ticket transactions by phone and the box office window between 1pm represent approximately 58-60%. This is followed by the 10 am to 12 noon The reduction in hours will reduce service levels and convenien · Lack of convenience could result in reduced sales. · Reducing services will limit growth for regional ticketing servi · which is an income generator for CITS to meet its annual operati Staff Layoffs – Layoffs will result from the reduced hours of opthe CITS operating budget. Layoffs will require one-off termination and severance payments · term financial impacts on the CITS overall budget. Impact on the overall staff morale, employment confidence and product · remaining staff. Confidential FINAL - 101 ALTERNATIVE PROPOSAL FOR THE CITS NET BUDGET: The CITS proposes a multi-year funding arrangement with the City per annum for a 4-year period, starting 1 January 2013. Based on the FY2012 base amount plus 1.7% (annual inflation rate grant for FY2013 is $1,394,763. This proposal represents an increase of $5,236 to cap the operat year term, based on a projected yearly inflation rate of 2%, the $148,666. Having recently recruited a new CEO, the CITS is undergoing a fu processes, as part of the overall strategic planning process. T reposition the CITS and its engagement with the local community, business operations to ensure maximum effectiveness, efficiency operations and administration. During the multi-year agreement, the CITS will not request any · one-off funding initiatives to implement the required structure This proposal stabilizes the yearly operating grant and ensures · investment for the CITS to make long-range plans and commitments yearly operating costs. It equally enables CITS to support a number of local arts organ · services through CITS. For example, KWAG’s tenancy at the Centr covers 70% of the actual operating costs. The remaining 30% is through its own operating funds and earned revenue. RISKS/IMPACTS ASSOCIATED WITH PROPOSAL: The operating grant for the CITS will be frozen during the peri · CITS will need to meet the staffing and production requirements o implementing new sustainable directions for the CITS. CITS will need to manage any one-time costs associated with staffing and new systems, as an outcome of the current strategic planning pro CITS earns the majority of its operating budget. o The arts and entertainment market is soft throughout the region and industry, as a whole, which may impact the capacity of the CITS to implement new systems and processes over the short-term. CITS does not currently receive additional operating or projectgrants from o provincial or federal art councils, the Creative Enterprise Init Despite these potential risks, the lack of stable funds over thiand development is perceived as the greatest risk for the CITS. With a multi-year operating grant of $1.4M, the CITS board and can work · through aspects of the business over the longer-term, and not on Stable operating funds will support the implementation of a new strategic plan and · position the CITS for future growth and successful outcomes for the surrounding community. Confidential FINAL - 102 CITY OF KITCHENER 2 013 BUDGET POTENTIAL REDUCTIONS ISSUE PAPER ISSUE: PR05 – Reduce Fire Department Staff Through Attrition FUND: Operating DEPARTMENT: Community Services - Fire PREPARER: Michael May, Deputy CAO, Community Services BACKGROUND: As directed by City Council on August 13, 2012, staff has reviewed several options to reduce the annual operating budget of the Fire Department. In addition, at Operating Budget Review December 6, 2012, staff information on response times for neighbouring cities and nationthe total Fire budget increase before and after this reduction has been prhis information has been included at the end of this issue paper in the section As approximately 96% of the Fire Department’s annual operating b related costs (salaries and wages, benefits, overtime and lieu dany substantial and sustainable budget reductions within the Fire Department wilan impact on staffing levels. This issue paper outlines the budgetary and pubsafety risks of reducing staffing levels within the Department, and provides oneion City Council could consider for making such a change. The Fire Department’s net annual operating budget for 2012 was $and its capital budget was $1,267,000. On an annual basis, the Fire Department gof the city’s budget. Over the past five years, staffing related cothe Fire Department have grown by 25% or approximately $5.9M. During that same timeframe,a number of other areas within the Department’s budget have been reduced and revenues fr increased to offset some of the growth in staffing costs. As a result of these adjustments, the Department’s overall budget has grown by approximately $5.5M or To assist in putting these figures into context, the following idata gathered through the Ontario Government’s Municipal Performance Measurement Program: 2013-01-08 FINAL - 103 In addition to the above information, according to a survey of 2was th recently conducted by Brantford’s Fire Department, Kitchener’s F lowest ratio of firefighters to population at 1:1,223 and the loof the three municipalities 2013-01-08 FINAL - 104 surveyed in Waterloo Region. R EPORT: One option City Council may consider to reduce the Fire Departme is to achieve staffing reductions through attrition within the smeaning positions would not be filled as retirements occur. There are cumembers of the Fire Department who are eligible to retire (over 30 years of service and over 50 years old). However, as the chart below indicates, there are zero firefighters scheduTo provide some context, a five year history of fire fighter retire Scheduled Retirements (2013 – 2017) 5 Year History of Retirements (2008 – 2012) 2013 0 2012 4 2014 3 2011 7 2015 3 2010 5 2016 3 2009 7 2017 2 2008 1 With no scheduled retirements in 2013, there is no guarantee stafbe reduced through attrition next year. However, City Council may wish to reduce the Fire Department’s budget to reflect a reduction of four positions (on, and should those retirements not occur, staff would look to find alternative corporate funding sources to fund those salaries on an interim basis (e.g. gapping, capita, tax stabilization reserve fund, operational surpluses in other areas of the corporUnder this scenario, failure to find an alternate source of funding would mean the Fiwould run a deficit in 2013. BUDGET REDUCTION: Assuming all four individuals are 1st Class Firefighters, the buthe next four retirees from the Fire Department’s suppression divisiGiven all of these retirements will not occur on January 1, 2013, budgeting for this likely result in a negative variance within the Fire Department variance cannot be quantified as the timing of retirements is no RISKS/IMPACTS ASSOCIATED WITH REDUCTION: It is important to note that for reasons of public and fire figh, the Fire Chief and his management staff do not support this pote continue to recommend the current levels of service as outlined in the City Council approved Standards of Cover. Reduction in Service Levels: As the next four retirements occur within suppression, the staffment on each platoon would be reduced by one individual. This reduction in available suppression staff would increase the likelihood and frequency staffing levels on any given shift 2013-01-08 FINAL - 105 When this occurs, an aerial unit is moved from Station 4 (Fairwa (Pioneer and Homer Watson) and a pumper unit is removed from service at Station 6. (N aerials units have a crew of two fire fighters and a pumper unit Between February 1 and August 31, 2012 staffing levels dropped b times. This is approximately 14% of the time that a pumper unit During City Council’s 2012 budget deliberations staff anticipated this When these changes were made and a pumper unit was removed from during the timeframe noted above, the following operational impa th 1. The total response time for Station 6 and 7 increased by 43 s percentile calculations). This is based on 81 calls that the twos responded to when the aerial was in service versus the remaining calls when the re 2. At Station 4, first on scene unit reliability dropped by 15% whe reassigned due to these staffing changes. When the aerial is not assigned to Station 4, other apparatus from other districts must respond to cover off i already engaged at an incident. There were 42 calls that had len th to aerial 4 being reassigned to another station. The response ti percentile) increase for these situations was 13 seconds. 3. The Department’s standard effective response force objective is within 12 minutes (an industry standard). This is for both publiety and fire fighter safety. The sampling size of the effective response force response timeswas too small to provide sufficient data. Anecdotally, it is known that with the reductio there will be an increase in the effective response force respon Budgetary Risks: There are two budgetary risks associated with this potential sta The reduction of one firefighter on each platoon will increase t · staffing levels on any given shift fall below 35 firefighters, requiring additional personnel to be called in on overtime. This would negatively impact the Depar There are no scheduled retirements in 2013. If retirements do no a source of interim funding would be required until such time as Department would run a deficit. ADDITIONAL INFORMATION: Response Times: The Kitchener Fire Department’s service level response times for fire suppression, emergency medical service, hazardous materials response and technical respare outlined in its Standard of Cover Document (SOC) that was adopted by City Counci According to the Council approved SOC: For 90 per cent of all High Risk structure fires in metro & urban areas, the first-due unit shall · arrive within an 8 minute total response time. The first due unifire fighters capable of establishing command, size-up, water supply and able to provide 5000 L/m (1050 gpm) for firefighting, advancing the first line for fi For 90 per cent of all emergency medical incidents in metro & urban areas, the first-due unit · shall arrive within a 7 minute total response time. The first du 2013-01-08 FINAL - 106 fire fighters capable of providing basic life support with an AE scene. If an EMS unit arrives on scene first, the fire crew will The SOC outlines, in detail, a variety of other service levels for the Kitchener Fire Department depending on the specific nature of an incident. There are no set national average response times to which the Ki responses can be compared. The criteria used in setting Kitchenee times were based on the National Fire Protection Association Standard (NFPA most widely recognized service level standard in North America. For first in unit - Alarm handling will be completed in 60 seco · achieved in 80 seconds (1 minute 20 seconds) for fire and 60 sec emergency medical incidents and travel time achieved in 240 seco total response time of 6 minutes 20 seconds for fire and 6 minut medical responses. For effective response force - Alarm handling will be completed · minute), turnout time achieved in 80 seconds (1 minute 20 second achieved in 480 seconds (8 minutes) for a total response time of It is staff’s opinion that service level response times should b principals and should utilize industry best standards such as th In response to Council’s request, staff contacted a number of On provide Council with some comparators to Kitchener’s service lev following is based on 2010 data and is not an exhaustive listing province, but is simply a compilation of responses received to s Responses times to fire suppression incidents Kitchener Burlington Oakville Guelph Camb Waterloo Vaughan 6:03 7:00 Not st 7:53 5:45 7:45 8:07 1 in Unit uses provided target time averages Effective 11:46 12:30 9:20 12:12 Response NANA NA Force Budget Impact: The overall increase in the Fire budget for 2013 is currently $7 potential reduction is approved the increase for 2013 would be o 2013-01-08 FINAL - 107 CITY OF KITCHENER 2 013 BUDGET POTENTIAL REDUCTIONS ISSUE PAPER ISSUE: PR06 – Implement Fire Insurance Recoveries FUND: Operating DEPARTMENT: Community Services - Fire PREPARER: Tim Beckett – Fire Chief BACKGROUND: At Operating Budget Review December 6, 2012, staff was directed further information on the possibility of retroactively billing for fire insurance r has been included on page 2 under the section titled “Additional Many insurance companies have policies that provide coverage forepartment charges when a fire department is called to save or protect property. Th provided can range from $1,000 to $25,000 per occurrence dependiscale of the response and the municipal resources deployed. Charges can be made directly to the insurance company on a claim that is already being made. To date, the City of Kitchener has not charged insurance compani despite clauses that already exist – and have been priced into –that allow us to do so. REPORT: The concept of municipalities charging insurance companies to cocertain eligible Fire Department costs is relatively new. To date, staff is aware of eall with volunteer fire departments) that have begun to charge insurto cover these expenses. As one example, the Municipality of Meaford is using tfrom insurance company fees to fund fire prevention and public education programs, equipment purchases and training of fire fighters. Given the City of Kitchener has not traditionally charged insura expenses, staff has no in-house knowledge or expertise to effectinister these complex charges. Should Council wish to proceed in charging insurance companies t staff would conduct a competitive request for proposal process tcompany to administer these charges on behalf of the City. The company would retain a percentage of the funds recovered for their work and the City would recover th Engaging an outside company would benefit the City by: Immediately providing the City with the knowledge and expertise · complex system of charges (e.g. comparing each individual fire i insurance policies on a case-by-case basis to identify, applyingfunds from the insurance company). Utilizing the company’s expert knowledge and experience to ensure the City is sec · maximum amount of eligible revenue from the insurance companies . This requires an expert knowledge and understanding of an array Ensuring these charges can begin to be collected in 2013 instea · house expertise, knowledge and processes within the City which would require significantly more time to develop and implement with no guarantee of success. 2013-01-08 FINAL - 108 Eliminating the need for additional staff within the Fire Deparattempt to develop an · in-house system to recover these charges and then administer the Staff is aware of at least one third party company that could pr the City. That company conducted a preliminary review of the Fire Department’s 2011 incident responses and estimated the City could have been entitled to charge insurance companies for up to $300,000 in that year alone. To charge these fees to insurance companies, a change would be rfees and charges schedule. These fees would be charged through the third party to insurance companies that provide coverage for Fire Department responses. ADDITIONAL INFORMATION: (Requested during Operating Budget Review) In Ontario, insurance claim files remain open for one year. At tyear anniversary the claim file is closed and no further action may be taken on the claim. Theoretically the City could retroactively backdate the claim for a one year period from the orporation approves this program. Practically however, the Fire Department only retroactively backdating claims six to seven months. This administration time to process the claim and allows for any appeon the claim before the claim file is closed and no further action may be taken. BUDGET REDUCTION: According to preliminary estimates, beginning to charge insurance companies to cover Fire Department expenses could eventually generate up to $300,000 in Staff estimates it would take several months (following final budget dto complete a competitive RFP process and finalize all necessary legal agreements. As a re budget an increase in revenues within the Fire Department of $20. An additional increase to the Department’s revenue could be made as part of thonce we have had some experience charging these fees and have a more of revenues generated. RISKS/IMPACTS ASSOCIATED WITH REDUCTION: The risks associated with beginning to charge insurance companie 1. The program is not tested in larger municipalities, but has a ha departments that have seen successful reimbursements. 2. If our fire related call volume drops then so will the revenu 3. There may be ‘push backs’ from insurance companies as this is something we have not charged for in the past – although this has not been the experience of municipalities already charging for these costs. 2013-01-08 FINAL - 109 CITY OF KITCHENER 2 013 BUDGET POTENTIAL REDUCTIONS ISSUE PAPER ISSUE: PR07 – Adjust Utility Billing Postage Charges FUND: Operating DEPARTMENT: Finance & Corporate Services – Revenue Division PREPARER: Saleh Saleh, Supervisor of Collections and Payment Pr DESCRIPTION OF POTENTIAL NET BUDGET REDUCTION: The Revenue Division is responsible, among other things, for met and customer service on behalf of the utility enterprises (gas, issue paper identifies potential net budget reductions amounting t functions resulting from operating efficiencies and increased re The following budget reductions are put forward for Council consreview of operating efficiencies and revenue forecasts: Reduce the budget for envelopes and printed forms by $5,000. The · e-post has reduced the volume of printed bills and envelopes. Addi recently changed its process such that accounts paid through online or telephone bankin are flagged and no longer receive return envelopes with their bi assumes that the trend towards electronic commerce will continue Reduce the staff overtime budget by $5,000 (approximately 50%). Overtime hours have · been strictly limited in recent years. There is also a preferenc off instead of overtime pay. Reduce the budget for debit card fees by $5,000 to reflect the ther · payment methods such as online or telephone banking. This assume towards other methods of payment will continue. Increase the Utility Account Administration Revenue budget by $4 · been increasing in this budget line over the past two years. Building this full revenue stream into budget presumes that the current annual volume of te is sustainable. Staff have also reviewed postage charges currently incurred thro room currently processes utility bills that need to be weighed and an a applied as they are not standard mail-outs. Examples include customers who receive multiple bills in one envelope or customers who have mailing addresses loCanada. As the cost of mailing these bills is directly related to the utili that the full cost be borne by the enterprises. Presently, 28% o from outside the tax base. It is recommended that this be increased by $60,000 to 43% to ensure that the allocation more closely reflects the true cost o to the enterprise units. BUDGET REDUCTION: Savings in this area would normally accrue back to the utility erises. However, the benefit of these savings can be realized within the 2013 tax-based budget because of an opportunity to also improve the allocation of postage costs between the tax-based budget and the utility budgets based on a detailed review. The end result is a $60,000 based budget and no impact to the utility budget. RISKS/IMPACTS ASSOCIATED WITH REDUCTION: Assumptions have been made for each of the potential reductions,f any of these assumptions are not actualized e.g. trends do not continuefull extent of budget reductions may be impacted, and the amounts may 2013-01-08 FINAL - 110 CITY OF KITCHENER 2 013 BUDGET POTENTIAL REDUCTIONS ISSUE PAPER ISSUE: PR08 - Remove Downtown Bulk Garbage Bins FUND: Operating DEPARTMENT: Infrastructure Services, Operations PREPARER: Scott Berry, Interim Director of Operations DESCRIPTION OF POTENTIAL NET BUDGET REDUCTION: The Operations Division currently has 44 bulk bins being adminisoperating budget. These bins are all located at city facilities and provid for the facility with the exception of the six bins defined belo The core area of the downtown currently has six bulk bins which day per week collection and are being used by users other than city facilitie Halls Lane behind 22 Water St S (behind Professional Building/T · Halls Lane behind 141 King St E (behind K-W Labour Association) · Halls Lane behind 183/185 King St E (behind Dream Hair Salon) · Goudies Lane behind 30 King St E (behind The Stag Shop) · Forsyth Parking Lot behind 150 King St W · Bell Lane beside 12 Water St N (adjacent to Money Mart) · These bins are being used exclusively by businesses or residents connection to any city facility. Some of these bin locations are Operations staff are responding on a daily basis to pick up refu In 2003/2004 there were an additional 9 bulk bins in the core th city facilities and were removed as part of a rationalization ofough discussions with Economic Development staff and the Downtown BIA. The rationale at the time was to remove 9 of the 15 bins and to look at the remaining 6 bins at a discussions with Economic Development staff and Downtown BIA repand have agreed upon a phased approach over 2013 and possibly into 2014 tthe removal of these bins or to have those businesses/residences take over the bins. Other options for businesses/residents include use of the four din the core, use of the approximate 40 streetscape deep well garbagin the core, seven day per week King Street curbside collection for smaller iof Waterloo Landfill for larger items. BUDGET REDUCTION: The potential reduction to Operations Division operating budget per year or approximately $29,000 per year for all six bins in a annual expenditures for tipping fees are approximately $130,000 (either bulk bins or deep well garbage receptacles). Given the p report budget reductions are estimated at $15,000 for 2013. RISKS/IMPACTS ASSOCIATED WITH REDUCTION: The removal of the bulk bins from downtown could cause increased garbage buildup if downtown businesses did not find an alternate 2013-01-08 FINAL - 111 CITY OF KITCHENER 2013 BUDGET POTENTIAL REDUCTIONS ISSUE PAPER ISSUE: PR09 Limit Grant Funding Increase to 1% in 2013 FUND: Operating DEPARTMENT: General Expenses PREPARER: Ryan Hagey, Director of Financial Planning Renate Willms, Supervisor, Administration, CSD DESCRIPTION OF POTENTIAL NET BUDGET REDUCTION: In developing the 2013 budget, staff included a 1.7% increase to community grants and economic development grants. The proposed reduction would reduce the level of increase to 1.0%. A briefdescription of the grants is provided below. Community Grants: The City of Kitchenerincludesan allocation of grant funding provided tonot- for-profit organizations. These are more commonly known asTiers1,2, and 3,travel assistance and in kind facility grants. These grants are used toprovide funding and support for programs and opportunities that benefit Kitchener residents in the areas of arts and culture/special events, community support and development, and sports and recreation. The budget process sets the overall funding available to be distributed. There is a completely separate process for recommending how much funding specific organizations receivethrough Tiers 1, 2 and 3 grants, which is ultimately approved by Council.In kind facility and travel assistance grants are reviewed and processed by staff upon receipt. Since Council considers and approves Tier 1 grants prior to the other grants, the Tier 2 grant allocation varies annually as the amount allotted to this funding source is the balance remaining after the other grant sources have been allocated their amounts. Economic Development Grants: The Economic Development budget includes an allocation of grant funding provided to partner organizations to help foster economic growth within Kitchener. The majority of the funding is provided to CTT, Communitech and the Small Business Centre, with minor amounts provided to other organizations. BUDGETREDUCTION: Reducing the increase for grant funding from 1.7% to 1.0% wouldresult in a savings of $19,359 as shown in the following table. 2013-01-08 FINAL - 112 /š’’Ò“z·ä D©“·­ {Ýz“m­ .Ò7m;· Tier 1 - Minor Sports (foundational funding) $749,747 $12,746 $7,497 $5,248 Tier 1 - Community Groups (foundational funding) $1,529,440 $26,000 $15,294 $10,706 Tier 2 (projects, events and programming for new and $134,216 $2,282 $1,342 $940 emerging groups) Tier 3 (seed funding for innovative projects in $10,737 $183 $107 $75 collaboration with other local funders) Travel Assistance/In Kind Facility (travel grants for Kitchener athletes 18 years and under; in kind facility $7,517 $128 $75 $53 grants for events at Kitchener facilities) Creative Enterprise Enabling Organization $56,000 $952 $560 $392 š·Œ /š’’Ò“z·ä D©“·­ Å r r Å r  Å r Å r 9-š“š’z- 5;Ý;Œš¦’;“· D©“·­ {Ýz“m­ .Ò7m;· Skills Canada $5,417 $92 $54 $38 Business & Education Partnership $5,417 $92 $54 $38 Junior Achievement $5,311 $90 $53 $37 Communitech $30,000 $510 $300 $210 CTT $155,192 $2,638 $1,552 $1,086 Small Business Centre $76,575 $1,302 $766 $536 š·Œ 9-š“š’z- 5;Ý;Œš¦’;“· D©“·­ Å r Å r  Å r Å /š’,z“;7 š·Œ Å rr Å r Å r Å RISKS/IMPACTSASSOCIATED WITH REDUCTION: If grant increases are reduced,it may be difficult for organizations to keep up with inflationary increases, continue and/or expand their core services, andrespond to governance and/or legislative changes. As well, a decrease to the grant funding provided by the City of Kitchener would not keep pace with user fees being charged to many of the C 2013-01-08 FINAL - 113 CITY OF KITCHENER 2 013 BUDGET POTENTIAL REDUCTIONS ISSUE PAPER ISSUE: PR10 – Reduce Council Technology & Home Office Budget FUND: Operating DEPARTMENT: CAO, Office of Mayor and Council PREPARER: Dorothy McCabe, Chief of Staff DESCRIPTION OF POTENTIAL NET BUDGET REDUCTION: Since 2010, the Office of Mayor and Council has reduced its budgthrough the elimination of an FTE, 2 years of council salary freezes, reduction in the Home and through other cost containment efforts. As per Council’s directive to explore potential areas for budget Home Office Expense budget was reviewed. Based on the 2011 surp projected similar surplus for 2012, funding allocated for this a per council member per year for total annualized savings of $11, As per policy 1—47, Technology and Home Office Expenses, the May council are provided an allocation of a maximum of $5,300 per ye four year term to be used for technology and home office expense BlackBerry, computer and related equipment, and a dedicated home BUDGET REDUCTION: The Technology and Home Office Expenses budget allocation could year per member of council for ongoing annualized savings of $11 RISKS/IMPACTS ASSOCIATED WITH REDUCTION: Generally, the cost of technology is decreasing and there was a surplus in 2011 and a projected surplus in 2012. However, it is important to ensure there are sufficien ongoing operating expenses (data plans, the cost of telephone li others) as well as sufficient funds for future capital items in 2013-01-08 FINAL - 114