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HomeMy WebLinkAbout2014-01-30 - Final Budget FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30, 2014 CITY OF KITCHENER The Finance and Corporate Services Committee met this date commencing at 9:10 a.m. Present: Councillor S. Davey-Chair Mayor C. Zehr and Councillors J. Gazzola, D. Glenn-Graham, B. loannidis, Z. Janecki, Y. Fernandes, K. Galloway-Sealock, B.Vrbanovic, F. Etherington and P. Singh. Staff: J. Willmer, Chief Administrative Officer D. Chapman, Deputy CAO, Finance &Corporate Services P. Houston, Deputy CAO, Infrastructure Services M. May, Deputy CAO, Community Services R. Regier, Executive Director, Economic Development T. Beckett, Fire Chief C. Tarling, Director, Legislated Services& City Clerk J. Witmer, Director, Operations R. Hagey, Director, Financial Planning H. Gross, Director, Project Administration & Economic Investment S. Turner, Director, By-law Enforcement C. Fletcher, Director, Facilities Management B. Robinson, Director, Engineering M. Goldrup, Director, Human Resources K. Kugler, Director, Enterprise J. Readman, Director, Transportation Services D. Murray, Interim Director, Information Services &Technology S. DiDonato, Manager,Arts&Culture P. McCormick, Manager, Parking Enterprise G. Hummel, Manager, Park Planning, Development&Operations D. Fagerdahl, Manager, Financial Planning N. Gollan, Manager, Stormwater Utility T. Gabler, Manager Operations (Utilities) L. Cooper, Interim Manager Development Engineering D. Ritz, Supervisor, Design/Development S. Saleh, Supervisor, Collections/Payment Process C. Goodeve, Committee Administrator D. Livingstone, Committee Administrator D. Saunderson, Committee Administrator The purpose of this special meeting was to give final consideration to the 2014 Operating and Capital Budgets and the 10-Year Capital Forecast 2014-2023. It was noted that any recommendations from the Committee this date would be considered at the special Council meeting to be held immediately following this meeting. 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) The Committee considered Finance and Corporate Services Department report FCS-14-009, dated January 15, 2014, concerning the City's 2014 Operating and Capital Budgets, and additional considerations of alternative revenue sources, strategic initiatives, additional assessment growth and chronic deficits that could affect the starting levy increase of 1.17%. OVERVIEW Mr. D. Chapman presented a budget overview advising that the 2014 budget package has been streamlined to focus on two key themes, affordability and sustainability. He indicated that Kitchener compares well to other municipalities with regard to affordability, but has struggled in terms of sustainability as evidenced by operating deficits over the past number of years. He stated that Kitchener is affordable as demonstrated by one of the lowest tax burdens in the province, and has the lowest tax burden and lowest projected tax rate increase in the Region of Waterloo. Further, the proposed tax increase is consistent with inflation for 2013, and meets citizen preferences of inflationary increases that maintain existing service levels. He provided an update on the inflation and tax increases within the Region stating that Consumer Price Index (CPI) inflation figures show that CPI for December was 1.5%, while the annual figure was 1.0%. He added that the Municipal Price Index (MPI) inflation for 2013 was 1.5%, which is higher than CPI inflation of 1.8%, which denotes that Kitchener was more impacted by FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -7 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) inflation than the typical consumer and that the City's costs increase greater than the average citizen. He stated that Kitchener has struggled with sustainability the past few years which has led to chronic deficit in hydro costs, By-law Enforcements fine revenues, and Operations. In the past, operating deficits have been funded by the Tax Stabilization Reserve, but this reserve has been depleted and future deficits will have to be funded through tax rate increases. TAX SUPPORTED OPERATING BUDGETS Mr. R. Hagey presented the Tax Supported Operating Budget advising that the current tax levy increase is estimated at 1.17%, which is the lowest projected 2014 tax rate increase in the Region. Additional considerations are Alternative Revenue options that could reduce the levy by 0.15%, and would result in a net levy increase as low as 1.02%. He stated that there are three areas of potential adjustment for Council to consider, including: additional assessment growth identified during the Operating budget which would reduce the levy increase by 0.30%; four Strategic Initiatives that would improve service levels and increase the levy by 0.47% if they were all supported; and, three areas of chronic deficit that would increase the levy by 0.39% if they were fully corrected. The Committee considered a number of tax supported Issue Papers, BD01 through BD10, that were included within the Final Budget Day package. With regard to Operating Issue Paper BD01 — Potential Impact of the Delayed Central Library Opening, Councillor B. Vrbanovic brought forward a motion to approve the original budget request of$497,000. Councillor Vrbanovic's motion was then voted on and was Carried on a recorded vote, with Mayor C. Zehr and Councillors P. Singh, B. loannidis, S. Davey, B. Vrbanovic, K. Galloway- Sealock and F. Etherington voting in favour; and, Councillors D. Glenn-Graham, J. Gazzola,Y. Fernandes and Z. Janecki voting in opposition. On motion by Councillor B.Vrbanovic- it was resolved: "That the Kitchener Public Library Board's original budget request for $497,700 be approved in the 2014 operating budget, as outlined in Issue Paper BD01 (Potential Impact of the Delayed Central Library Opening)." Councillor K. Galloway-Sealock brought forward a motion regarding Operating Issue Paper BD06 — Boulevard Tree Donations, to direct staff to further investigation options for tree planning donations and report back at a future Community and Infrastructure Services Committee meeting. The following motion was Carried Unanimously on a recorded vote. On motion by Councillor K. Galloway-Sealock- it was resolved: "That staff be directed to further investigate options for tree planting donations, as outlined in Issue Paper BD06, and report back to a future meeting of the Community and Infrastructure Services Committee." With regard to Operating Issue Paper BD08 — Economic Development Strategic Initiatives Fund, a motion was brought forward by Councillor Y. Fernandes to allocate $50,000. to an Economic Development Strategic Initiates Fund to provide seed funding to key partnership projects that advance the Kitchener Economic Development Strategy (KEDS). Councillor B. loannidis brought forward an amendment to Councillor Fernandes' motion to increase the funding amount to $150,000. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -8 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) A further amendment was brought forward by Councillor B. Vrbanovic to endorse the Economic Development Strategic Initiates Fund in principle, without allocating a specific amount, until a fulsome Economic Development Report and community engagement process has been undertaken. Councillor Fernandes then withdrew her motion. Councillor K. Galloway-Sealock brought forward a motion to defer consideration of funding for the Economic Development Strategic Initiatives Fund to the 2015 budget and directing staff to report back by June 2014 with more detail on the potential initiatives. Councillor Galloway-Sealock's motion was then voted on and was Carried on a recorded vote, with Councillors Z. Janecki, S. Davey, K. Galloway-Sealock, F. Etherington, D. Glenn-Graham, and Y. Fernandes voting in favour; and Mayor C. Zehr and Councillors J. Gazzola, B. Vrbanovic, P. Singh, B. loannidis voting in opposition. On motion by Councillor K. Galloway-Sealock- it was resolved: "That consideration of funding an Economic Development Strategic Initiatives Fund, be deferred to Council's 2015 Budget deliberations process; and further, That staff be directed to report back by June 2014 with more detail on the potential strategic initiatives, outlined in Issue Paper BD08 (Economic Development Strategic Initiatives Fund)." With regard to Operating Issue Paper BD09— Postage Charges, a motion was brought forward by Councillor P. Singh to not approve an additional allocation to the postage budget and direct staff to report back with potential solutions to minimize the impact of Canada Post's postage increase on the City's mailing costs. Mr. Chapman cautioned that the City would need to have the number of e-billing customers increase by one-third to successfully absorb the additional postage costs within the current budget allocation for postage. The following motion was Carried Unanimously on a recorded vote. On motion by Councillor P. Singh - it was resolved: "That no increase be allocated to accommodate Canada Post's postage rate increase, outlined in Issue Paper BD09 (Postage Charges); and further; That staff be directed to explore options to reduce postage costs through promotion of e-billing or disincentives for paper billing and report back to a future meeting of the Finance and Corporate Services Committee." The Committee then recessed at 11:40 a.m. and reconvened at 11:45 a.m. chaired by Councillor S. Davey,with all members present. Councillor S. Davey advised the Committee that throughout Council's 2014 Budget deliberation process, members of the public who wished to register as delegations were directed to attend the January 13, 2014 Public Budget Consultation session; or, participate via one of the many other avenues provided to gather public input. He stated that Final Budget Day is reserved as a time for Council to debate and consider the 2014 Budget; and therefore, delegations are not typically heard from at this meeting. He noted that a request has been received from a member of the public to address the Committee this date. He indicated that any member may bring forward a motion to enable this person to be a delegation, adding that such a motion would need to be approved by a majority of those members present. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -9 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) On motion by Councillor B. loannidis- it was resolved: "That pursuant to Section 25.5.5(b) of Chapter 25 of the Municipal Code (Council Procedure), Mr. Harald Drewitz be permitted to address the Committee this date regarding the 2014 Budget." Mr. Harald Drewitz addressed the Committee expressing concerns with a tax levy increase that is beyond the current rate of inflation of 1%. ENTERPRISE OPERATING BUDGET In response to questions, Mr. R. Regier agreed to report back on the terms of the agreement between the City and Wilfrid Laurier University (WLU)with regards to off-street parking spaces within the downtown core. Water Utility A motion was brought forward by Councillor J. Gazzola to approve the 2014 Water Utility budget with a 2% increase rather than 4.75%. A motion was brought forward by Councillor P. Singh to amend Councillor Gazzola's motion to provide that the 2014 Water Utility budget be approved with a 3% rate increase. Councillor Singh's amendment was then voted on by a recorded vote and was LOST, with Councillors P. Singh voting in favour; and Mayor C. Zehr and Councillors B. Vrbanovic, J. Gazzola, Y. Fernandes, Z. Janecki, and D. Glenn-Graham K. Galloway-Sealock, B. Ioannidis, F. Etherington, P. Singh and S. Davey voting in opposition. Councillor Gazzola's motion was then voted on by a recorded vote and was LOST, with Councillors J. Gazzola, P. Singh, Y. Fernandes and Z. Janecki voting in favour; and Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, S. Davey, B. Vrbanovic, K. Galloway- Sealock and F. Etherington voting in opposition. A motion was brought forward by Mayor C. Zehr to increase the Water Utility rates by 3.50% as outlined in Report FCS-14-009. The following motion was then voted on and Carried on a recorded vote, with Mayor C. Zehr and Councillors D. Glenn-Graham, B. Ioannidis, S. Davey, K. Galloway-Sealock, B. Vrbanovic and F. Etherington voting in favour; and Councillors J. Gazzola, P. Singh, Y. Fernandes and Z. Janecki voting in opposition. On motion by Mayor C. Zehr- it was resolved: "That effective March 1, 2014, the 2014 Water Utility budget be approved with a 3.50% increase to $1.7633 per cubic metre." Sanitary Sewer A motion was brought forward by Councillor J. Gazzola to approve the 2014 Sanitary Sewer budget with a 2.5% increase rather than 5.0%. A motion was brought forward by Councillor P. Singh to amend Councillor Gazzola's motion to provide that the 2014 Sanitary Sewer budget be approved with a 4.5% rate increase. Ms. P. Houston cautioned the Committee that as part of the Strategic Session held on October 28, 2013, staff presented the Corporate Asset Management Program and the overall sustainability of existing and future assets. She stated that as part of that presentation, Council was advised that there are significant deficits identified within the Capital Forecast and FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -10 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) in order to manage those deficits rates would need to be set at a level to allow assets to reasonably maintained. Councillor P. Singh's amendment was then voted on and was LOST on a recorded vote, with Councillors P. Singh, S. Davey and Y. Fernandes voting in favour; and Mayor C. Zehr and Councillors B. Vrbanovic, J. Gazzola, Z. Janecki, and D. Glenn-Graham K. Gal loway-Sealock, B. loannidis and F. Etherington voting in opposition. Councillor Gazzola's motion was then voted on and LOST on a recorded vote, with Councillors J. Gazzola, P. Singh, Y. Fernandes and Z. Janecki voting in favour; and Mayor C. Zehr and Councillors D. Glenn-Graham, B. loannidis, S. Davey, B. Vrbanovic, K. Galloway-Sealock and F. Etherington voting in opposition. A motion was brought forward by Councillor K. Galloway-Sealock to increase the Sanitary Sewer rates by 5% as outlined in Report FCS-14-009. The following motion was then voted on and Carried on a recorded vote, with Mayor C. Zehr and Councillors D. Glenn-Graham, B. loannidis, S. Davey, K. Galloway-Sealock, B. Vrbanovic and F. Etherington voting in favour; and Councillors J. Gazzola, P. Singh, Y. Fernandes and Z. Janecki voting in opposition. On motion by Councillor K. Galloway-Sealock- it was resolved: "That effective March 1, 2014, the 2014 Sanitary Sewer budget be approved with a 5% increase to $1.9783 per cubic metre." The Committee then recessed at 1:09 p.m. and reconvened at 2:01 p.m. chaired by Councillor S. Davey,with all members present. Storm Water With regard to Issue Paper BD11 — Storm Water Rate Scenarios, a motion was brought forward by Councillor J. Gazzola to reduce the 2014 Storm Water rate from the proposed 3% increase down to 1%. Councillor Gazzola's motion was then voted on and was LOST on a recorded vote, with Councillors S. Davey,Y. Fernandes, J. Gazzola, P. Singh and Z. Janecki voting in favour; and, Mayor C. Zehr and Councillors K. Galloway-Sealock, B. loannidis, B. Vrbanovic, D. Glenn- Graham, F. Etherington voting in opposition. Mayor Zehr brought forward a motion to approve a 3% Storm Water rate increase as outlined in Report FCS-14-009. The following motion was then voted on and was Carried on a recorded vote, with Mayor C. Zehr and Councillors K. Galloway-Sealock, B. loannidis, B. Vrbanovic, D. Glenn-Graham, F. Etherington voting in favour; and, Councillors S. Davey, Y. Fernandes, J. Gazzola, P. Singh and Z. Janecki voting in opposition. On motion by Mayor C. Zehr— it was resolved: "That effective March 1, 2014, the 2014 storm water utility monthly rates be increased to 3.0%." CAPITAL BUDGET Mr. Hagey advised that the Capital Budget remains unchanged from what was reviewed at the November 21, 2013 Finance and Corporate Services Committee meeting. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -11 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) With regards to Issue Paper BD21 - Council Home Office & Technology Budget, Councillor F. Etherington brought forward a motion proposing to reduce the annual operating budget allowed for each Member of Council by$629.55 down to$2,500. The following motion was then voted on and was Carried on a recorded vote, with Mayor C. Zehr and Councillors K. Gal loway-Sealock, Y. Fernandes, B. loannidis, S. Davey, B. Vrbanovic, J. Gazzola, D. Glenn-Graham, F. Etherington voting in favour; and, Councillors P. Singh and Z. Janecki voting in opposition. On motion by Councillor F. Etherington - it was resolved: "WHEREAS Members of Council, particularly new councillors who take office following the 2014 Municipal Election, might require additional home-office technology equipment in order to communicate with residents in their Ward; and, WHEREAS some Councillors spend their maximum capital budget of$5,301 each four- year term for technology equipment and home-office furniture while others spend far less; and, WHEREAS Kitchener's Mayor and 10 Councillors are each allowed $3,129.55 a year (a total $34,425 a year)for home office and technology operating expenses; and, WHEREAS neither the capital budget nor the operating for technology costs including Blackberries, internet, and telephones has been used in each of the past three years; THEREFORE BE IT RESOLVED that the annual operating budget allowed for each Member of Council be reduced by $629.55 to $2,500 (reducing the total budget by $6,925, from $34,425 to $27,500); and, BE IT FINALLY RESOLVED that notice be hereby given that a motion will be brought forward at the February 10, 2014 Council meeting to amend Council Policy 1-47 (Technology and Home Office Expenses - Mayor and Councillors)to include a provision that unless circumstances like breakage or theft allow the Mayor to make an exception, each Member of Council will restrict home-office technology purchases to one laptop and one tablet per four-year term and digital-camera purchases will no longer be covered by home-office-technology budgets." With regards to Issue Paper BD09— Public Art Fund Balances, a motion was brought forward by Councillor Y. Fernandes to reallocate $100,000. from the 1% Public Art Projects to the Tax Stabilization Reserve Fund without impacting the Civic District Garage and the Kitchener Public Library. Councillor Fernandes' motion was then voted on and was LOST on a recorded vote, with Councillors P. Singh, S. Davey and Y. Fernandes voting in favour; and Mayor C. Zehr and Councillors B. Vrbanovic, J. Gazzola, Z. Janecki, D. Glenn-Graham, K. Galloway-Sealock, B. Ioannidis and F. Etherington voting in opposition. With regards to Capital Issue Paper BD25—Synthetic Turf Funding Reallocation, Councillor K. Galloway-Sealock brought forward a motion to maintain the synthetic turf funding in 2014 as per the current capital budget forecast as outlined in Option 1 in the Issue Paper. The following motion was Carried Unanimously on a recorded vote. On motion by Councillor K. Galloway-Sealock- it was resolved: "That synthetic turf funding remains in the current capital budget forecast, as outlined in Issue Paper BD27 (Synthetic Turf funding Reallocation)." FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -12 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) A motion was brought forward by Councillor Y. Fernandes regarding Capital Issue Paper BD27 - Cenotaph & Vogelsang Green to maintain the rehabilitation projects schedule for 2017 as currently identified in the capital forecast. The following motion was Carried Unanimously on a recorded vote. On motion by Councillor Y. Fernandes- it was resolved: "That the Cenotaph and Vogelsang Green rehabilitation projects remain scheduled for 2017 as currently identified in the capital forecast, outlined in Issue Paper BD27 Cenotaph &Vogelsang Green)." A motion was brought forward by Councillor Y. Fernandes regarding Capital Issue Paper BD29 - Charles and Water Parking Garage to remove the project from the Capital Forecast, as it is scheduled for 2023. Mr. Chapman suggested that the item remain in the Capital Forecast in order to include its impact as part of the development charges review taking place in 2014. Councillor Fernandes then withdrew her motion. A motion was brought forward by Councillor B. loannidis to retain the Charles Street and Water Street parking garage in the Capital Forecast pending completion of a needs assessment to validate the requirements in 2018. The following motion was Carried Unanimously on a recorded vote. On motion by Councillor B. loannidis- it was resolved: "That the Charles & Water parking garage remain in the Capital Forecast pending completion of a needs assessment to validate the requirements in 2018, as outlined in Issue Paper BD29 (Charles and Water Parking Garage)." The Committee considered Capital Issue Paper BD30 - Traffic Calming Reduction. Mr. J. Readman responded to questions advising that if the existing budget were maintained and a reduction to three projects were implemented, more progressive calming measures could be installed. He noted that this could reduce the potential for increased cost for progressive measures in future budget years. Councillor D. Glenn-Graham brought forward a motion to reduce the number of traffic calming projects to three while maintaining the existing capital budget. Councillor Davey expressed support for reducing the number of traffic calming projects. He referred to the analysis included in the Issue Paper, indicating that Kitchener's budget allocation for traffic calming exceeds that of comparable municipalities. He then brought forward an amendment to Councillor Glenn-Graham's motion to decrease the allocation to traffic calming projects by$56,500. per year. Councillor J. Gazzola brought forward a motion to defer consideration of the traffic calming reduction until such time as a public consultation has occurred. Mr. Readman advised that online consultation has been conducted; noting that the public information session held on January 28, 2014 was attended by only four people. Councillor Gazzola's deferral motion was then voted on and was LOST on a recorded vote, with Councillors B. Vrbanovic, J. Gazzola, D. Glenn-Graham and Y. Fernandes voting in favour; and Mayor C. Zehr and Councillors Z. Janecki, K. Galloway-Sealock, P. Singh, S. Davey B. loannidis and F. Etherington voting in opposition. Councillor D. Glenn-Graham then withdrew his motion. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -13 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) A motion was brought forward by Councillor S. Davey to reduce the traffic calming budget by $56,500. per year and decrease the number of annual traffic calming projects from four to three. The following motion was then voted on and was Carried on recorded vote, with Mayor C. Zehr and Councillors P. Singh, Y. Fernandes, Z. Janecki, B. loannidis, S. Davey, K. Galloway- Sealock, B. Vrbanovic, D. Glenn-Graham and F. Etherington voting in favour; and, Councillor J. Gazzola voting in opposition. On motion by Councillor S. Davey- it was resolved: "That the traffic calming budget be reduced by $56,500. per year, as outlined in Issue Paper BD30 (Traffic Calming Reduction); and further, That staff be directed to reduce the number of traffic calming projects from four (4) to three (3) per year." The Committee considered Capital Issue Paper BD31- Margaret Avenue Bridge Replacement - Funding Sources. Ms. B. Robinson responded to questions advising that in order to fund the $6.3M required for the Margaret Avenue Bridge replacement, certain projects such as road resurfacing was cancelled or deferred. Mayor C. Zehr brought forward a motion to confirm the budgetary allocation to the replacement of the Margaret Avenue Bridge and direct staff to prepare a report identifying the sources of that funding. The following motion was Carried Unanimously on a recorded vote. On motion by Mayor C. Zehr- it was resolved: "That staff be directed to report back with more information on the allocation of funding sources for the Margaret Avenue Bridge, outlined in Issue Paper BD31 (Margaret Avenue Bridge Replacement- Funding Sources Capital)." ALTERNATIVE REVENUES The Committee considered Alternative Revenue Issue Papers which present options that could be used to lower the tax levy if implemented. Councillor J. Gazzola brought forward a motion to move the recommendations contained within Alternative Revenue Issue Papers AR01 through AR07 comprehensively. Councillor K. Galloway-Sealock requested that AR02 and AR06 be considered separately. With regards to AR02 - Increased Cost Recovery for By-law Enforcement, Councillor Galloway-Sealock questioned the new fee for follow-up inspections, indicating that the $7,500. in projected revenue should be removed from the budget as it is not a guaranteed amount and could vary depending on the number of follow-up inspections conducted. Mr. S. Turner responded that annually approximately 100 inspections are carried out in this category and agreed that the fee revenue was subject to fluctuation pending the level of compliance. Councillor Galloway-Sealock brought forward a motion to implement the fee of $75 per inspection and to remove the $7,500. revenue from the operating budget. At the suggestion of Councillor P. Singh, it was agreed to amend Councillor Galloway- Sealock's motion to allocate the revenue from the proposed fee to the Tax Stabilization Reserve Fund. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -14- CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) The following motion was then voted and was Carried on recorded vote, with Mayor C. Zehr and Councillors P. Singh, Y. Fernandes, B. loannidis, S. Davey, B. Vrbanovic, and F. Etherington voting in favour; and, Councillors J. Gazzola, D. Glenn-Graham, K. Galloway- Sealock and Z. Janecki voting in opposition. On motion by Councillor P. Singh - it was resolved: "That the revenue from the new fees for follow-up inspections as outlined in Issue Paper AR02 (Increased Cost Recovery for By-law Enforcement) be allocated to the Tax Stabilization Reserve Fund." With regard to Issue Paper AR06b - Engineering Driveway Ramp Permit Fee, Councillor K. Galloway-Sealock brought forward a motion regarding implementation of a permit fee from driveway ramp widening;with the fee being set at$100. rather than the proposed $150. The following motion was then voted on and was Carried on a recorded vote, with Mayor C. Zehr and Councillors K. Galloway-Sealock, P. Singh, Y. Fernandes, B. loannidis, S. Davey, B. Vrbanovic, and voting in favour; and, Councillors J. Gazzola, D. Glenn-Graham, F. Etherington and Z. Janecki voting in opposition. On motion by Councillor Gal loway-Sealock- it was resolved: "That the fee schedule be amended to include Engineering - Driveway Ramp Widening fee of $100. effective March 3, 2014, outlined in Issue Paper AR06b (Engineering Driveway Ramp Permit Fee)." The following motion representing the balance of the Alternative Revenue Issue Papers was then voted on and was Carried Unanimously on a recorded vote. On motion by Councillor J. Gazzola- it was resolved: "That the alternative revenue sources with the net budget impacts detailed in the following Alternative Revenue Issue Papers be approved: • AR01 -Additional Cost Recovery for Special events- Non City Events $5,000. • AR03- Increased Advertising through Sponsorship Strategy $45,000. • AR04- Mobile Catering Licensing Fees $5,500. • AR06- New Cost Recovery for Engineering $43,850. • AR-07- Fee for Fourth and Subsequent Subdivision Review $25,000." Councillor F. Etherington brought forward a motion to increase the leisure access subsidy program by $10,000, in addition to the $10,000 increase Council already approved through Alternative Revenue Issue Paper AR05, resulting in a total budget of$145,780. The following motion was then voted on and Carried on a recorded vote, with Mayor C. Zehr and Councillors D. Glenn-Graham, K. Galloway-Sealock, P. Singh, B. loannidis, B. Vrbanovic, and F. Etherington voting in favour; and, Councillors J. Gazzola, Y. Fernandes, S. Davey and Z. Janecki voting in opposition. On motion by Councillor F. Etherington - It was resolved: "WHEREAS demand for Kitchener's Leisure Access Card program providing subsidies for seniors, children, single mothers and other adults who cannot afford Kitchener's recreation programs continued to increase in 2013 and is expected to go still higher in 2014; and, FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -15- CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) WHEREAS the program serving low-income families experienced a $29,500 shortfall in 2013 after its budget was exhausted helping 3,460 people (up from 2013 in 2012); and, WHEREAS assistance from private funders is increasingly precarious in an economy where many local families have suffered unemployment; THEREFORE IT BE RESOLVED that the $135,780 budgeted for the leisure access subsidy program increased by $10,000 in addition to the $10,000 Council already approved through Alternative Revenue proposal AR05 Increase User Feeds by an additional 1% while providing additional funding for the Leisure Access Card (LAC), resulting in a total budget for leisure access of$145,780." STRATEGIC INITIATIVES AND CHRONIC DEFICITS S101 - Improve Citywide By-law Enforcement The Committee considered Strategic Initiatives Issue Paper S101 — Improve Citywide By-law Enforcement. Mr. Turner advised that the addition of two full time equivalent (FTE) By-law Enforcement officers will assist in responding to the significant increase in By-law Enforcement service requests from the community by shortening response times and ensuring By-law officers are available 24/7 to respond to calls. In response to questions, Mr. Chapman advised that it would likely take 3 to 4 months to complete the hiring process for the subject positions and delaying the effective hire dates would have an impact on the overall tax levy impact. He suggested that consideration could be given to approving the FTEs with an April start date; thereby decreasing the proposed impact on the tax levy from the proposed $179,409 to $134,557. Councillor B. Vrbanovic brought forward a motion to approve the two By-law Enforcement FTEs with an amended hire date of April 1, 2014, having an overall impact on the tax levy of $134,557. A motion was brought forward by Councillor Y. Fernandes to amend Councillor Vrbanovic's motion to approve two By-law Enforcement FTEs, effective January 1, 2014, having an overall impact on the tax levy of$179,409. In response to questions, Mr. Turner advised that if only one FTE was hired, than staff would not be able to both shorten response times and have By-law officers available 24 hours a day for seven days a week. Councillor P. Singh brought forward a motion to amend Councillor Fernandes's amendment to approve one By-law Enforcement FTE effective January 1,2014. Councillor P. Singh's motion was then voted on and was LOST on recorded vote, with Councillors J. Gazzola, S. Davey and P. Singh voting in favour; and, Mayor C. Zehr and Councillors Y. Fernandes, D. Glenn-Graham, K. Galloway-Sealock, F. Etherington, B. Ioannidis, B.Vrbanovic and Z. Janecki voting in opposition. Councillor Fernandes's amendment was then voted on and was LOST on recorded vote, with Councillors K. Galloway-Sealock, Y. Fernandes, and voting in favour; and, Mayor C. Zehr and Councillors J. Gazzola, P. Singh, D. Glenn-Graham, F. Etherington, B. Ioannidis, S. Davey, B. Vrbanovic and Z. Janecki voting in opposition. The following motion was then voted on and was Carried on recorded vote, with Mayor C. Zehr and Councillors K. Galloway-Sealock, D. Glenn-Graham, F. Etherington P. Singh, Y. Fernandes, Z. Janecki, B. Vrbanovic, and voting in favour; and, Councillors J. Gazzola, B. Ioannidis and S. Davey voting in opposition. On motion by Councillor B.Vrbanovic- it was resolved: FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -16- CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) "That two new full time equivalent (FTE) By-law Enforcement officers be approved, effective April 1, 2014, with an increase on the tax levy of 0.13%, outlined in SI 01 - Improved Citywide By-law Enforcement." SI02- Improve Customer Service and Efficiency through Mobile Technology The Committee considered Strategic Initiatives Issue Paper SI02 - Improve Customer Service and Efficiency through Mobile Technology. Mr. D. Murray stated that the addition of two full time equivalent (FTE) mobile computing staff in the Information Technology (IT) Division are being recommended to provide on-going day-to-day support, maintenance for end-users and continual improvement of mobile computing technologies. He indicated that should only one of the two recommended positions be approved, it would negatively impact the ability of IT to support increased mobile computing required to deliver on future mobile and e-services goals. Councillor B. Vrbanovic brought forward a motion to approve a FTE Mobile Infrastructure Specialist with an amended hire date of July 1, 2014 and another FTE Mobile Device Specialist with an amended hire date of April 1, 2014, having an overall impact on the tax levy of$64,229, outlined in SI02. A motion was brought forward by Councillor J. Gazzola to amend Councillor Vrbanovic's motion to approve one FTE Mobile Specialist, effective April 1, 2014. Councillor Gazzola's motion was then voted on and was LOST on recorded vote, with Councillors D. Glenn-Graham and J. Gazzola, and voting in favour; and, Mayor C. Zehr and Councillors, P. Singh, K. Galloway-Sealock, Y. Fernandes, F. Etherington, B. Ioannidis, S. Davey, B.Vrbanovic and Z. Janecki voting in opposition. The following motion was then voted on and was Carried on recorded vote, with Mayor C. Zehr and Councillors B. Ioannidis, S. Davey, D. Glenn-Graham, F. Etherington P. Singh, B. Vrbanovic, and voting in favour; and, Councillors J. Gazzola, Y. Fernandes, K. Galloway- Sealock and Z. Janecki voting in opposition. On motion by Councillor B.Vrbanovic- it was resolved: "That two new full time equivalent (FTE) employees be approved, one Mobile Infrastructure Specialist effective July 1, 2014 and one Mobile Device Specialist effective April 1, 2014, having an overall increase on the tax levy of 0.06%, outlined in SI02 Improve Customer Service and Efficiency through Mobile Technology." SI03 - Improve Infrastructure Data Management to Provide the Basis for Future Grants and to Better Support Spending Decisions The Committee considered Strategic Initiatives Issue Paper SI03- Improve Infrastructure Data Management to Provide the Basis for Future Grants and to Better Support Spending Decisions. Mr. H. Gross advised that Infrastructure Services Administration currently has two full time temporary staff spending 80%of their time on staff time entry and 20%of their time on asset data entry. He stated that currently one position is funded from the Cityworks Capital account and the funding from that account will cease in 2014. He indicated that the second administrative position is currently funded from the Water and Gas Utilities. He further advised that the current temporary funding and employee status should be converted to support the City's long-term asset management plan which required under legislation. A motion was brought forward by Councillor B. Vrbanovic to approve one FTE administrative position for the asset management division with an amendment that the position be funded through the capital budget. The following motion was then voted on and Carried by recorded vote,with Mayor C. Zehr and Councillors B. Ioannidis, S. Davey, D. Glenn-Graham, F. Etherington P. Singh, B. Vrbanovic, and voting in favour; and, Councillors J. Gazzola, Y. Fernandes, K. Galloway-Sealock and Z. Janecki voting in opposition. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -17 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) On motion by Councillor B.Vrbanovic- It was resolved: "That one new full time equivalent (FTE) administrative employee be approved, as indicated in S103 - Improve Infrastructure Data Management to Provide the Basis for Future Grants and to Better Support Spending Decisions." S104- Proactive Street Tree Maintenance The Committee considered Strategic Initiatives Issue Paper S104 - Proactive Street Tree Maintenance concerning the approval of two full time equivalent (FTE) forestry labourer and various forestry equipment to implement a proactive street tree maintenance program to support the quality of street trees within the City. Mayor C. Zehr brought forward a motion to approve two full time equivalent (FTE)staff with an effective hire date of April 1, 2014 as well as the necessary pruning equipment prorated to April 1, 2014,outlined in Issue Paper S104. In response to questions, Mr. J. Witmer advised that forestry is a year round operation. He indicated that forestry staff are rarely reassigned to other operations works unless there is an extreme situation including major snow events when snow clearing becomes a more significant priority. Mayor Zehr's motion was then voted on and was LOST on a recorded vote, with Mayor C. Zehr and Councillors B. Ioannidis, B. Vrbanovic and F. Etherington and voting in favour; and, Councillors J. Gazzola, K. Gal loway-Sealock, Y. Fernandes, P. Singh, D. Glenn-Graham, S. Davey and Z. Janecki voting in opposition. Chronic Deficits Councillor Davey estimated that due to the actions taken regarding the Strategic Initiatives with respect to By-law Enforcement and Operations, the chronic deficits have been reduced from the projected $400,000. down to approximately$280,000. Councillor Gazzola requested that additional information be provided outlining how the identified chronic deficit amounts were derived in the three identified areas, being Electricity at City-owned facilities, By-law Enforcement fine revenues and Operations. A motion was brought forward by Councillor J. Gazzola to apply $280,000. to address the remaining balance in the City's chronic deficits. A motion was brought forward by Councillor B. Vrbanovic to amend Councillor Gazzola's motion to reduce the transfer to chronic deficit from $280,000. to$100,000. Councillor Vrbanovic indicated that he would leave it up to staffs' discretion to determine the most appropriate means of allocating the proposed funding among the three areas identified as having chronic deficits. In response to questions, Mr. Chapman confirmed that if the proposed $100,000. was approved then a negative variance of $180,000. would continue to be projected for the identified three areas over the coming year. He cautioned that in the past capital closeouts and/or the Tax Stabilization Reserve Fund were utilized to cover those shortfalls and those funding sources may not be available in the future. He responded further that an allocation of $136,000. could be accommodated,which would increase the proposed tax levy to 1%. A motion was brought forward by Councillor Y. Fernandes to amend Councillor Vrbanovic's motion to increase the allocation to chronic deficits from$100,000. to$136,000. Councillor Fernandes' amendment was then voted on and was Carried on a recorded vote, with Councillors B.Vrbanovic, K. Gal loway-Sealock, P. Singh, S. Davey,Y. Fernandes and Z. FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -18 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) Janecki voting in favour; and, Mayor C. Zehr and Councillors B. loannidis, J. Gazzola, D. Glenn-Graham, F. Etherington voting in opposition. The following motion was then voted on and was Carried on a recorded vote, with Mayor C. Zehr and Councillors B. Vrbanovic, K. Galloway-Sealock, P. Singh, S. Davey, Y. Fernandes and Z. Janecki voting in favour; and, Councillors B. loannidis, J. Gazzola, D. Glenn-Graham, F. Etherington voting in opposition. On motion by Councillor J. Gazzola- it was resolved: "That $136,000. be allocated toward the three areas identified as having chronic deficits, as follows: • Electricity at City-owned facilities $58,300; • By-law Enforcement fine revenues $43,700; and, • Operations $34,000." Creative Enterprise Initiative (CEI)Operating Grant A motion was brought forward by Councillor P. Singh to reduce the operating grant allocation to Creative Enterprise Initiative (CEI)from$56,000. to $26,000. In response to questions, Mr. J. Willmer confirmed that the total amount of funding provided to CEI is an operating grant of $56,000. He commented that when representatives from CEI attended the December 2, 2013 Community and Infrastructure Services Committee meeting, there was a lengthy discussion regarding the City's dollar per capita funding which does not go to CEI but is redirected to arts groups within the City. He added that support for the originally proposed operating grant was conveyed to CEI at that time. He stated that while it is recognized that it is within Council's purview to reconsider that funding amount at this time; however, CEI most likely felt that the grant of $56,000. was secure for 2014 given the discussion that took place on December 2nd Councillor S. Davey indicated that while he was not supportive of reducing the allocation to CEI by$30,000., he may be inclined to support a reduction of$10,000. Councillor Singh agreed to amend his motion to reduce the allocation to CEI from $56,000. to $46,000. The following motion was then voted on and was Carried on a recorded vote with Councillors F. Etherington, J. Gazzola, P. Singh, S. Davey, Y. Fernandes and Z. Janecki voting in favour; and, Mayor C. Zehr and Councillors B. Vrbanovic, K. Galloway-Sealock, B. loannidis and D. Glenn-Graham voting in opposition. On motion by Councillor P. Singh - it was resolved: "That the operating grant allocation to Creative Enterprise Initiative (CEI) be reduced from $56,000.to $46,000." Transfer from the Gas Utility A motion was brought forward by Councillor Gazzola to transfer$250,000. from the Gas Utility to the Tax Stabilization Reserve Fund (TSRF) as a means of addressing future deficits. Mr. Chapman advised that the balance in the Gas Investment Reserve currently falls below the minimum benchmarks and if that amount was lowered further it would reduce the City's ability to respond to issues caused by weather volatility. He stated that staff strongly recommend against increasing the dividend. He referenced a report that was presented in 2012 on rate methodology, commenting that the City previously had a dividend policy for the Gas Utility that was largely based on the transportation rates which fluctuated and therefore caused the FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -19 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) dividend to fluctuate. Accordingly, Council had to modify the dividend on a year-to-year basis. He added that a number of concerns lingered from that approach and it was changed to align more closely with the one utilized by the Ontario Energy Board (OEB), to establish the City's cost of service; and from there identify the maximum dividend. He noted that the dividend in the 2014 Budget was based on that maximum level. He added that the City's delivery rates are currently higher than Union Gas and the proposed increase could result in a challenge by a ratepayer to the OEB accusing the City of essentially passing an excessive delivery rate to provide a disproportionate subsidy to the tax base. He stated that staff are of the opinion that the current dividend level can be justified based on the established cost of equity approach. He added that if the OEB were to ever exert control over the City's rates, then Council would lose control and the OEB would apply their methodology which would most likely result in a reduction to the dividend; thereby negatively impacting the tax rate. He noted that it would also result in a significant cost increase to the Utility. Accordingly, staff are of the opinion that it is not in the City's best interest to undertake the proposed transfer. Councillor Gazzola's motion was then voted on and was LOST on a recorded vote, with Councillors D. Glenn-Graham, J. Gazzola, Y. Fernandes and Z. Janecki voting in favour; and, Mayor C. Zehr and Councillors F. Etherington, P. Singh, S. Davey, B. Vrbanovic, K. Galloway- Sealock and B. loannidis voting in opposition. Physician Recruitment A motion was brought forward by Councillor Y. Fernandes to reduce the 2014 Economic Development Grant allocation for Physician Recruitment by$10,000. Councillor Fernandes' motion was then voted on and was LOST on a recorded vote, with Councillors S. Davey, J. Gazzola,Y. Fernandes and Z. Janecki voting in favour; and, Mayor C. Zehr and Councillors F. Etherington, P. Singh, D. Glenn-Graham, B. Vrbanovic, K. Galloway- Sealock and B. loannidis voting in opposition. Glasgow Street Reconstruction Protect A motion was brought forward by Councillor Z. Janecki to reallocate the $100,000. that was saved by not including the sidewalk on the north side of Glasgow Street as a part of the reconstruction project to reduce the 2014 tax levy. In response to questions, Mr. Hagey advised that the Glasgow Street Reconstruction project was being funded through water, sanitary and storm water utilities; and therefore, any reduction in the project's budget has zero impact on the tax base. He added that all of the funds that were saved by not including the sidewalk must return to those utilities. Mr. Chapman responded further that the intent outlined in several pieces of legislation, such as the Safe Drinking Water Act, outline that revenues from water, sanitary and storm water utilities are not to be used to subsidize the tax base. He stated that when it is a water main, a sewer main and a storm water main that are driving the reconstruction the extent of the trenching required to replace that infrastructure encapsulates the entire road right-of-way. He added that out of necessity the City is required to remove the sidewalk, curb and gutter as well as road base to facilitate replacing the infrastructure that is driving the project. He noted that is why those utilities can be used to fund the entire project. He confirmed that as there was no tax supported funding identified for the Glasgow Street Reconstruction project, no funding is available to be reallocated back to the tax base. Councillor Davey ruled that Councillor Janecki's motion regarding the Glasgow Street Reconstruction project was out of order as it was contrary to provincial legislation governing the use of funding from water, sanitary and storm water utilities. FINAL RECOMMENDATIONS-2014 BUDGET The Committee agreed to advance its recommendations pertaining to the 2014 Budget, based on decisions made this date, for Council's consideration at its special Council meeting to be FINANCE AND CORPORATE SERVICES COMMITTEE JANUARY 30. 2014 -20 - CITY OF KITCHENER 1. FCS-14-009 -2014 BUDGET PACKAGE (FINAL BUDGET DAY) (CONT'D) held immediately following this meeting; and, from which the end result is summarized in brief below: • a 2014 department operating budget, resulting in a 2014 levy for general purposes of$104,450,373; and further, • an increase in the 2014 tax rate, excluding tax policy changes, of approximately 0.99%. 2. ADJOURNMENT On motion, this meeting adjourned at 8:18 p.m. C. Goodeve D. Livingstone D. Saunderson Committee Administrator Committee Administrator Committee Administrator