HomeMy WebLinkAboutFCS-15-001 - 2015 Operating Budget Staff Reps ort
T rc; Finance and Corporate Services Department www.kitchener ca
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: January 5, 2015
SUBMITTED BY: Ryan Hagey, Director of Financial Planning, 519-741-2200 x 7353
PREPARED BY: Ryan Hagey, Director of Financial Planning, 519-741-2200 x 7353
WARD(S) INVOLVED: All
DATE OF REPORT: December 15, 2014
REPORT NO.: FCS-15-001
SUBJECT: 2015 Operating Budget
RECOMMENDATION:
For Discussion
Note: Final approval of the 2015 Operating Budget will take place as part of Final
Budget Day, schedule for February 23, 2015
BACKGROUND:
The budget is the City of Kitchener's annual financial plan, and is the primary basis of financial
decision making. The budget process allows Council to prioritize the programs and services
delivered by the City and sets direction for the work to be completed over the upcoming year as
well as future years referenced in the budget forecast. The operating budget funds the day-to-
day costs of the municipality such as salaries, utilities, and supplies.
The objectives of this report are to:
• Highlight the Key Issues in 2015 Operating Budgets
• Provide an Overview of the Tax Supported Operating Budget
• Provide an Overview of the Enterprise Operating Budgets
REPORT:
Key Issues in the Operating Budget
During 2015 Operating Budget deliberations Council will be considering a number of items, but
three key issues rise above the others. These three issues are the amount of the property tax
increase, the potential to improve service levels through approving strategic initiatives, and the
amount of the water & sanitary rate increase. Each of these issues is briefly highlighted below.
Key Issue # 1 — Property Tax Increase
The proposed tax rate increase for 2015 is 2.25%. Based on the measures used when
considering tax rate increases, an increase of 2.25% is affordable. Kitchener already has one of
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the lowest tax burdens of all large municipalities in Ontario, so Kitchener citizens are paying less
tax than if they owned the same property in most other Ontario cities. The proposed tax rate
increase is slightly lower than the rate of inflation in Ontario and maintains existing service
levels, which was the clear preference of Kitchener citizens based on the community survey
conducted by Environics in 2013.
Key Issue #2 —Strategic Initiatives
Strategic initiatives are meant to enhance existing services, provide new services, or implement
recommendations from master plans and audit reviews. Eight different strategic initiatives are
proposed in the 2015 budget and could be funded by additional assessment growth revenue
beyond what was assumed by staff as part of budget planning. This means that service levels
for certain services could actually be enhanced within a tax rate increase below the rate of
inflation. The proposed initiatives support Council priorities as recently identified thrgouh the
business planning process.
Key Issue #3—Water & Sanitary Rate Increase
The proposed water & sanitary rate increase for 2015 is 9.9%. This increase is beyond the rate
of inflation, but is required in order to keep sustain these essential services. There is
considerable upward rate pressure put on these utilities due to decreased water consumption,
rate increases at the Regional level well beyond the rate of inflation, and increased costs to
maintain and replace aging infrastructure. Without a significant rate increase in 2015, these
utilities will be in deficit.
Tax Supported Operating Budget
1) Base Operating Budget
The proposed tax levy increase for 2015 is 2.25%. A tax rate increase of 2.25% on the average
Kitchener home (assessed at $269,000) would amount to $23.08, or just under $2 per month.
In addition, since actual assessment growth (1.51%) exceeds the amount forecasted (1.0%),
there are growth related tax revenues that have not been factored into the base operating
budget. As was the case in 2014, staff are proposing a limited number of additions (Strategic
Initiatives) that could be funded with the additional tax revenues. The Strategic Initiative items
are detailed in the next section of the report.
An appendix to this report shows the 2015 tax supported operating budget in the same format
as the variance report. Like the variance reports, comments have been provided for variances
that are more than $50,000 and/or 10% compared to the 2014 budget.
As noted above, the proposed tax levy increase for 2015 is 2.25%. An increase of this amount
balances the competing interests of affordability and sustainability as described below.
Affordability in the 2014 Tax Supported Operating Budget
Budget affordability means that the budget approved by Council responds to the current
economic climate and supports the strategic directions for financial management.
Locally, some changes within the industrial sector continue to cause some uncertainty in the
economy, but smaller start-up companies continue thrive and make Kitchener an exciting place
to invest. Despite any perceived uncertainty, workforce participation and employment levels in
Kitchener are high. In addition, the construction of LRT is beginning in earnest, and is projected
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to dramatically change the physical and economic landscape of the region's three cities, the
largest of which is Kitchener.
Tax rate policy is explicitly referenced in Kitchener's Strategic Plan under the strategic directions
for financial management. Kitchener's direction for fair taxation says that the City will strive for
competitive, rational and affordable taxation levels. To determine this, the City must consider
the following when setting tax rates:
• Comparison to other municipalities;
• Inflationary factors, including those unique to municipalities; and
• Balance of service levels versus affordability
Comparison to Other Municipalities
The City of Kitchener is already one of the most affordable cities in Ontario. It has one of the
lowest tax burdens of large cities in Ontario, and has the lowest tax burden amongst cities in the
Region of Waterloo. The graph below shows the 2013 results of BMA's annual tax burden
analysis for the same bungalow property in each of Ontario's largest municipalities. Kitchener
now holds the third lowest ranking in the province, meaning it is one of the most affordable cities
in Ontario.
Annual Tax Burden of a Bungalow in the Large Ontario Municipalities (>100,000 people)
$5,000
$4,500 ..
$4,000
$3, 8
$3,500 $2,988 J'„182
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Inflationary Factors, Including Those Unique to Municipalities
The proposed 2014 tax rate increase approximates the anticipated rate of inflation. Inflation
considerations for setting tax rates are in two parts:
• Typical consumer inflation, represented by the Consumer Price Index (CPI)
• Unique municipal inflation, represented by the Municipal Price Index (MPI)
In terms of CPI inflation, the proposed 2015 tax supported budget increase of 2.25% is below
actual CPI inflation for January to October (2.3%).
In addition to CPI inflation, the City of Kitchener calculates a municipal price index (MPI), which
accounts for the fact that the "basket of goods" the City purchases is considerably different than
the basket of goods used to calculate CPI inflation figures. For instance, the top three
components of the CPI calculation are shelter, transportation and food which do not apply the
same way to a municipality as they do an individual. The MPI calculation accounts for the
different costs of a municipality such as staffing, operating supplies, and capital construction.
The MPI figure for the 2015 budget process is 2.2%, meaning that inflation pressures on the
City of Kitchener budget are approximating the typical Ontario household budget in 2014.
Balance of service levels versus affordability
The proposed 2015 tax rate reflects citizen preferences related to service levels and
affordability. These preferences have been reaffirmed recently through citizen surveys
conducted in 2012 and 2013.
In the summer of 2012 (as part of the 2013 budget process) the City commissioned a telephone
survey of Kitchener residents regarding their opinions on tax rate increases and service levels.
In the phone survey, the majority of respondents (62%) said they prefer an inflationary tax rate
increase that maintains current service levels. As part of the 2013 Environics survey, a similar
majority of respondents (61%) said the same thing. While the 2012 phone survey did not reach
enough residents to be considered statistically significant, the 2013 Environics survey
interviewed more than 1,000 residents and the findings are statistically significant.
The graph below shows that Kitchener citizens prefer increasing taxes at the rate of inflation in
order to maintain existing services over other alternatives.
Citizen Preferences Regarding Tax Increases and Service Levels
■2013 Environics 2013 Budget
Increase taxes at the rate of 61%
inflation to maintain services ' 62%
Maintain taxes and possibly cut 23%
services 30%
Increase taxes to expand or
improve services 8%
Don't know/No answer ON 6%
0%
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Sustainability in the 2014 Tax Supported Operating Budget
Budget sustainability means that the budget approved by Council is adequate to fund existing
service levels and avoid deficits. Tax supported operating budget sustainability has been an
ongoing issue within the tax supported budget for a number of years, but significant progress
has been made in recent budgets. Sustainability will be considered in terms of:
• History of operating deficits;
• Chronic deficits; and
• Status of the Tax Stabilization Reserve Fund
History of Operating Deficits
The City of Kitchener has a recent history of operating deficits. For the past number of years,
the City has finished the year with an operating budget deficit (before applying funds from one-
time capital closeouts). In essence, the City's operating budget is not truly balanced. The table
below shows the history of operating deficits dating back to 2010 and includes the projected
2014 deficit based on actuals as of the last variance report. The average annual deficit over this
time is $425,000.
Tax Supported Operating Budget Deficits Before Capital Closeouts
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Deficit Before -$0.48M -$0.24M -$0.51 M -$0.44M -$0.62M
Capital Closeouts
These deficits have over a number of years and through varying weather conditions and
economic circumstances, which means the deficits are not temporary. Instead, the ongoing
nature of the deficits points to the fact that there is a disconnect between the amount of funding
provided to deliver services and the actual amount of work required to deliver expected service
levels. These ongoing deficits must be addressed in order to ensure the City maintains a
balanced budget in substance as required by Provincial legislation.
Chronic Deficits
Over the past few budgets, staff have highlighted a few select areas that have consistently
produced negative variances and have been an ongoing contributor to annual operating deficits.
Three of these areas are Bylaw fine revenues, water & electricity costs, and postage.
In preparing the 2015 tax supported operating budget, staff have been able to fully fund the
chronic deficits in each of these areas while still submitting a budget that is below the current
level of CPI inflation. This means that, unlike recent budgets, staff do not expect actual 2015
tax supported operating results will end the year in a deficit position. This was a critical
objective given the implications of the following section.
Status of the Tax Stabilization Reserve Fund (TSRF)
The City maintains a Tax Stabilization Reserve Fund (TSRF) which is used to fund any
operating deficits (or receive funds from any operating surpluses) within the tax supported
operating budget. As shown in the chart below, based on the projected operating deficit in
2014, the TSRF will be depleted at the end of the year.
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Summary of the Tax Stabilization Reserve Fund
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Endin Balance $3,596,967 $1,695,198 $317,944 $32,282
Tar et Balance Minimum $4,749,802 $4,951,223 $5,104,543 $5,222,519
.....................................................................
.............................................................. .....................................................................................................................................................................................................................................................................................................................................................................
The reserve fund balance has decreased from $3.6M at the end of 2011 to a projected balance
of $32,282 at the end of 2014. Significant funds have been drawn from the reserve fund over
this time to help keep taxes low (improving affordability), but the funds have not been
replenished (decreasing sustainability).
2) Strategic Initiatives
As noted above, there is additional projected new assessment revenue that was not factored
into the base operating budget target. As was the case in the 2014 budget, staff are suggesting
this funding be used for strategic initiatives instead of simply reducing the tax levy increase
below 2.25%. Funding for strategic initiatives is meant to be used to invest in enhancements to
existing services, provide new services, or implement recommendations from master plans and
audit reviews.
The 2015 operating budget includes eight strategic initiative options for Council's consideration
that meet this criteria. The combined cost of the proposed strategic initiatives essentially
matches the additional assessment growth revenues. This means that service levels for certain
services could actually be enhanced within a tax rate increase below the rate of inflation.
Ignoring assessment growth, if all of these strategic initiatives were approved by Council, it
would increase the taxes on the average home (assessed value of $269,000) by $5.14. The
table below summarizes the eight strategic initiative options and their impacts on the net tax
levy. More details about each initiative can be found in the corresponding issue papers.
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Summary of Strategic Initiative Options
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SI 01 Restoration of the Tax Stabilization Reserve Fund $200,000 0.19% $1.94
SI 02 Increased Urban Forest Maintenance $100,000 0.09% $0.97
e-Participation for Open Government
SI 03 ($75,000 Operating, $60,000 already included in $75,000 0.07% $0.73
Ca ital
S104 Health & Safety Compliance Resource $70,000 0.07% $0.68
($70,000 tax/$10,000 enterprise)
S105 Waterloo Region Economic Development Corporation $37,000 0.03% $0.36
Additional $120,000 in 2016
S106 Improve the City's Ability to Engage Volunteers in the $35,700 0.03% $0.35
Community
SI 07 Increased Street Level Special Events Programming $23,588 0.02% $0.23
SI 08 Increased Funding for the Leisure Access Card TBD 0.00% $0.00
Note: The additional assessment growth revenue is approximately $533,000.
Enterprise Operatin_q Budgets
The City operates seven enterprises, which are self-sufficient business lines that raise their own
revenues through user rates instead of being funded through property taxes. As part of the
2015 budget package, "Enterprise Overviews" have been provided for each of the enterprises.
These overviews describe the main purpose of the enterprise, provide some benchmarking
information, and describe recent challenges/successes. The seven enterprises are noted in the
table below.
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• Golf Gas
• Building Water
Sanitary Sewer
Parking Sanit
.............................................................................................................................................................................................................................................................
Storm Water
Rates for the enterprises listed on the left of the table have already been considered by Council
as part of the annual user fee review (report FCS-14-133). The enterprises listed on the right
are commonly referred to as the utilities and do not have their utility rates set until Final Budget
Day (with the exception of Gas which happens mid-year).
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While each of the enterprises is managed separately as its own business line, one significant
principle is followed by each of enterprises; namely ensuring financial sustainability. Each
enterprise has its own stabilization reserve fund that is used to manage fluctuations in financial
operating results from year to year. In years that end with positive results, the surplus funds are
held in reserve and are used to fund deficits that may arise in future years. The general
guidelines for managing these reserve balances is as follows:
• If an enterprise has a positive stabilization reserve balance, the goal of staff is propose a
budget (and any associated rate increase) to ensure the reserve does not become
negative.
• If the stabilization reserve balance is already negative, the goal of staff is to propose a
budget (and any associated rate increase) that reduces/eliminates the deficit in each
year of the forecast.
Budget highlights and reserve balances for each of the seven enterprises are provided below.
Golf
Poor weather in 2014 negatively affected the financial performance of Golf and is resulting in a
projected deficit of $174,000 by the end of the year. This result will worsen the stabilization
reserve balance that was already in deficit.
For 2015, staff have budgeted a 3% rate increase, and with normal weather in operations,
expect see a positive result of$25,000 at the end of the year.
The only significant 2015 budget change for Golf is a reduction of $55,000 (from $130,000 to
$75,000) in the dividend paid to the City (i.e. tax base). The dividend amount is set to be in
accordance with the Level Playing Field agreement signed between the City and the National
Golf Course Owners Association, and represents the amount of property tax and income tax the
golf courses would pay if they were held privately instead of being owned by the municipality.
The divided has been decreased as a result of a reassessment that lowered the assessed value
of the golf courses (thereby reducing their theoretical property taxes). Reductions to golf course
assessments have occurred across the province.
Budget Summary—Golf
2014 Projected Actual $174,000 deficit
2014 Accumulated Stabilization Reserve Balance $947,000 negative
2015 Budgeted Rate Increase 3%
2015 Budgeted Result $25,000 surplus
Building
Increased building permit activity in 2014 is causing a projected surplus of $1.3M by the end of
the year. Staff believe the increased activity was caused primarily by builders moving to get
their building permits before development charge increases at both the City and Regional level
came into effect mid-year.
For 2015, staff have budgeted a 1.5% rate increase to most fees and expect permit activity
levels to be lower than in 2014 as building permit activity levels return to a slightly below normal
level. This will result in an expected deficit of$782,000 at the end of 2015.
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Budget Summary— Building 2014 Projected Actual $1,353,000 surplus
2014 Accumulated Stabilization Reserve Balance $5,272,000 positive
2015 Budgeted Rate Increase 1.5%
2015 Budgeted Result $782,000 deficit
Parking
The 2014 projected deficit of $606,000 in Parking is slightly worse than budget. It is a result of
flat/lower demand in most of the downtown parking garages instead of slight budgeted
increases.
In contrast to previous years, for 2015 staff have budgeted no increase to parking rates. The
City's parking rates are higher than local and other benchmarks, so staff believe holding rates
flat is the appropriate course of action to avoid a further reduction in demand
The other significant item to note for 2015 relates to the funding of Parking's capital program.
The majority of the projects in Parking's capital program will be funded by reserve over the next
decade. The reserve funding will come from development charge recoveries and relates to
parking garages that have already been built (Charles & Benton, Civic District), and could have
been funded through development charges but were funded from non-growth sources instead
due to a negative balance in the Development Charge Reserve Fund. More information on the
development charges recoveries can be found in the 2015 Capital Budget report and package.
Budget Summary— Parking
2014 Projected Actual $606,000 deficit
2014 Accumulated Stabilization Reserve Balance $1,751,000 ne ative
2015 Budgeted Rate Increase 0%
2015 Budgeted Result $77,000 surplus
Gas
In 2014, Gas Delivery is projecting a small deficit of$113,000 once it transfers a dividend to the
Gas Investment Reserve.
For 2015, Gas Delivery is expected to have a deficit of $5.6M after paying the dividend. The
difference is largely caused by the increased need for capital funding. The primarily capital
project in 2015 is the replacement of the utility billing system project which began in 2014 and
will continue through 2015.
Budget
2014 Projected Actual after transfer to Gas Investment Reserve $113,000 deficit
2014 Accumulated Stabilization Reserve Balance $5,744,000 positive
2015 Budgeted Rate Increase Set mid-year
2015 Budgeted Result (after transfer to Gas Investment Reserve) $5,586,000 deficit
Water& Sanitary
Significant deficits are projected for both Water ($4.3M) and Sanitary ($1.OM) in 2014. Water
use was below budget in 2014, which affects both Water and Sanitary as both utilities are billed
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based on the amount of water consumed. In addition to lower revenues, expenses were higher
in Water (related to increased number of water main breaks) and Sanitary (related to increased
amount of sewage processing required). The poor financial results in 2014 will effectively
eliminate the stabilization reserve funds for both utilities, meaning there is no longer any ability
to absorb operating deficits in either utility.
For 2015, both utilities have budgeted rate increases of 9.9%. An increase of this amount is
beyond the rate of inflation, but is required given the state of the stabilization reserve funds and
the ongoing financial pressures on the utilities due to reduced consumption, Regional rate
increases well beyond the rate of inflation, and aging infrastructure. Each of these rate
pressures is discussed in more detail below.
Decreasing water consumption causes upward pressure on rates because some of the costs in
the Water/Sanitary utilities are fixed, which means they do not vary based on how much water is
consumed. Examples include the costs of capital replacement and legislative compliance. If
less water is consumed, it means these fixed costs must be spread over less water, which
causes an increase in rates. Over the past 10 years, water consumption in Kitchener has
generally been declining, even though the city's population has been increasing. The graph
below shows that water consumption was 22.6 million m3 in 2005, but is projected to be 19.8
million m3 at the end of 2014 (one cubic metre of water equals 1,000 litres).
Water Consumption (m)
25,000,000
20,000,000
15,000,000
10,000,000
5,0�00,0�00
2005 2000 2007 2008 2009 2010 2011 2012 2013 2014
Regional rate increases cause upward pressure on City rates because the City purchases water
and sewage processing from the Region and these costs account for more than 50% of the
City's Water/Sanitary costs. In the past five years, the Region has consistently passed
Water/Sanitary rate increases that are more than double the rate on inflation, and in 2013 was
almost seven times (Water) or eight times (Sanitary) the rate of inflation. Simply passing these
Regional cost increases through to Kitchener citizens results in rate increases beyond the rate
of inflation, without even accounting for inflationary costs increases on the rest of the
Water/Sanitary budgets. The graph bellows shows the magnitude of the Regional rate
increases versus CPI (Ontario) inflation for the same year.
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Region of Waterloo Water/Sanitary Treatment Rate Increases
Compared to CPI (Ontario) Inflation
m Water
in Sanitary
4.0% RE,,CPI Inflation
2010 2011 2012 2013 2014
Aging infrastructure causes upward pressure on City rates because it is more costly b» maintain
and is more likely to fail. In 2014. the number of water mains breaks was well above average
and can be attributed to aging infrastructure that was not resilient enough to fend off the effects
of a colder than normal winter. Dealing with reactive maintenance instead of proactive
replacement is not a cost effective way to deal with the problem as the maintenance costs can
amount to 4096 of the costs to replace the main and actually correct the problem instead of
covering it up for a time. The graph below shows that the average age of the City's Water
system is getting older (average age of main is 34 years and is rieing), so costs are going to
increase rather than decrease.
Water Mains -Asset Installation Profile
by Quantity
E=Water Mains Average Age
100,000-
60,000 20
Year
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Budget
2014 Projected Actual $4,327,000 deficit
2014 Accumulated Stabilization Reserve Balance $9,000 positive
2015 Budgeted Rate Increase 9.9%
2015 Budgeted Result $30,000 surplus
Budget
2014 Projected Actual $1,011,07deficit 2014 Accumulated Stabilization Reserve Balance $412,000 2015 Bud eted Rate Increase 9
2015 Budgeted Result $177,000 deficit
Storm Water
Increased maintenance costs and reduced revenues due to lower than forecasted growth in
2014 are projected to result in a deficit of$3.1 M for the Storm Water utility.
For 2015, a budgeted rate increase of 3% will result in a minimal surplus of $136,000. For
2015, the budgeted capital costs for the Storm Water are reduced from previous years as
significant investments in Victoria Park Lake are no longer required.
Budget Summary—Storm Water
2014 Projected Actual $3,154,000 deficit
2014 Accumulated Stabilization Reserve Balance $1,277,000 negative
2015 Budgeted Rate Increase 3%
2015 Budgeted Result $136,000 surplus
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.
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FINANCIAL IMPLICATIONS:
The financial impacts on the average homeowner are shown in the chart below.
Impact on Homeowner
Change Change
2014 2015 $ %
City Taxes $1,026 $1,049 $ 23 2.25%
Storm Water $ 121 $ 125 $ 4 3.00%
Water $ 438 $ 481 $ 43 9.90%
Sanitary $ 491 $ 540 $ 49 9.90%
Natural Gas $ 854 $ 860 $ 6 0.70%
Total $2,930 $3,055 $ 125 4.26%
Assumptions:
City Taxes: Current Assessed Value (CVA) of$269,000
Storm Water: property classified as Residential Single Detached Medium
Water & Sanitary: water consumption of 250m3
Natural Gas: gas consumption of 2,100m3
COMMUNITY ENGAGEMENT:
For the 2015 budget process, staff will again employ a suite of traditional and electronic
engagement methods in an effort to effectively inform and consult citizens. Staff will receive
feedback through mail or phone call, coordinate a public input session where citizens can
address Council directly, post budget updates on the City's Facebook/Twitter pages, and
establish a dedicated budget web page. The dedicated budget webpage will contain all public
budget information as well as an interactive budget calculator. The interactive budget calculator
allows residents to model different budget scenarios by choosing different budget scenarios and
then allows them to see the impact on their projected tax bill in real time.
Based on the array of public input opportunities, citizens will be able to provide their input by:
• Writing/phoning City Hall
• Attending the public input session planned for February 2, 2015
• Responding to the City's Facebook/Twitter posts about the budget
• Completing the questions on the interactive budget website
• Contacting their ward councillor
ACKNOWLEDGED BY: Dan Chapman, Deputy CAO (Finance and Corporate Services)
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CITY OF KITCHENER
ENTERPRISE OVERVIEW
Operating Model/Philosophy:
Kitchener Golf provides an affordable golf experience for all.
Services Provided:
Kitchener Golf operates golf properties and facilities at both Doon Valley and Rockway Golf
Courses offering affordable recreational golf opportunities, as well as facilitated clinics, leagues,
tournament and events.
Kitchener Golf facilities are open from dawn to dusk seven days a week during the golf season,
which can run anytime between March-November dependent upon weather. During the off
season, the facilities can be utilized for special occasions and provide a park space for winter
walking and cross country skiing.
Benchmarking:
The chart below outlines the prices at a number of privately owned public golf courses in the
area. Kitchener Golf's prices are at the low end of the spectrum.
Kitchener Merry Hill Cambridge Puslinch Elmira
Primetime $45.25 $45.20 $56 $48 $52
Off-Peak $35 $39.55 $44 $44 N/A
Primary Legislation:
A Level Playing Field agreement signed with National Golf Course Owners Association states
that municipal golf courses will pay a dividend to their municipality equal to the sum of
property and income taxes. This ensures that municipal golf courses are not at an unfair
advantage. The level of dividend has been updated for 2015 based on current calculations.
Customer Base:
Both courses are open to everyone.
Recent Challenges:
• The golf enterprise has an accumulated deficit of nearly$1M. The accumulated deficit will
be addressed over many years based on dramatic cost reductions enacted in 2011 which
will yield projected surpluses starting in 2015 and reduced debt costs starting in 2020.
• Decline in current senior membership due to age and health.
• Unpredictable change in weather with an increase in storms and rain
• Increased environmental restrictions and constraints for maintaining golf courses
• Pressures of new equipment technology for play on older golf course designs
• Increased competition for discretionary spending and a decrease in time available to play.
Aging infrastructure on the course and in the building structures
Recent Successes:
Stabilized golf operations at a break-even point for 2012-2013 after several years of operating
deficits.
OP - 17
CITY OF KITCHENER
ENTERPRISE OVERVIEW
Building
Operating Model/Philosophy:
The Building enterprise is responsible for the administration and enforcement of the Building
Code Act and Building Code. The mandate of the Building enterprise is to ensure construction
within the City meets the minimum requirements as detailed in the Building Code.
Services Provided:
The Building enterprise provides a majority of its services to external customers for building
permit issuance and on-site inspections. Building also supports the AMANDA software system
for the City.
Benchmarking:
The chart below outlines the total number of building permits issued over the past 5 years.
TOTAL BUILDING PERMITS ISSUED 2010-2014
2500 2155
1885 1891
2000 1978 1972.... .... .... .... .... ....
1500 Industrial/Commerical
1000 111111111111 Institutional
IIIIII Residential
353 ....
500 15 14
111::::k 35
2131 J,
0 11111 I I
2010 2011 2012 2013 2014
• 2014—January 1"to October 31"
Primary Legislation:
The Building enterprise is governed by the Provincial Building Code including referenced
legislation such as Planning Act, Development Charges Act, and other construction standards.
The main purpose of the Building Code is to ensure the buildings citizens work, live and play in
are safe through the issuance of building permits and site inspections. Building permit
revenues must only be used for the administration and enforcement of the Building Code.
Customer Base:
The majority of Building's customers are the private sector, and their experience in building
regulations is diverse; from minimal to knowledgeable. Building's customers include single time
users such as do-it-yourself home owners, repeat homebuilders, and non-residential applicants
who build 1-2 times per year. The breakdown of Building's customer base is:
• residential = 83%
• industrial/commercial = 12%
• institutional = 5%
OP - 18
CITY OF KITCHENER
ENTERPRISE OVERVIEW
Recent Challenges:
Although Building staff regularly monitor economic trends to forecast permit activity levels, it is
difficult to predict permit activity because staff do not control when owners decide to build.
Further, not every permit generates the same amount of revenue or work effort by staff.
Another challenge is to be adequately resourced to meet Provincially legislated time frames for
permit decisions and inspections. All municipal building officials must be Provincially qualified,
which includes passing multiple examinations and training requirements, therefore laying off
staff and re-hiring when busy is not a realistic option as it would increase costs, downtime, and
liability (i.e. the risk of lawsuits & claims).
Recent Successes:
Building successes are attributed to a technically skilled professional staff with proven customer
service skills. Customer feedback on Building staff services continues to be positive.
Building enterprise processes are not stagnant, and evolve to meet the needs of the customers.
Recent examples include Tuesday Night Express Service for do-it-yourself owner projects and
maximizing use of technology such as Online Permit Applications and Permit Status.
Lastly through ongoing and prudent financial measures the Building Stabilization Reserve
remains positive through the economic downturn and is projected to remain positive for the
foreseeable future. This ensures that building permit fees remain stable consistent with
customer preference, and are not subject to rate shocks during economic cycles.
OP - 19
CITY OF KITCHENER
ENTERPRISE OVERVIEW
PARKING ENTERPRISE
Operating Model/Philosophy:
The Parking Enterprise's goal is a self- funded, financially sustainable enterprise providing
accessible and convenient parking in the downtown core at a fair price. It is very important to
the core as it helps the City achieve and balance its economic development growth
management and transportation objectives.
Services Provided:
The Parking Enterprise manages and operates the City's downtown parking portfolio, which
currently consists of 5 parking garages, 19 surface lots, on-street meters and free parking
spaces, totaling 3,872 spaces. It has direct responsibility for the operation, maintenance,
capital rehabilitation, and fiscal management of the City's public parking infrastructure.
Benchmarking:
The table below outlines current prices of monthly parking for surface and garage facilities in
the downtown. The City's monthly parking prices are at the high end of the spectrum.
Current Monthly Parking Fetes before HST
Connpetitor Surface Garage
Major 3rd party IPrivate Business $95„5,0, $11140,
Independent (Parking;IProvider $1105.16 N/A
Technology Area $125.100 N/A
City of Waterloo $113„14 $146.41
Ciity of Kitchener $134.201 $154.87
Primary Legislation:
Not applicable.
Customer Base:
All garage and surface facilities are open to anyone living, working or visiting the downtown.
The customer base currently includes 1,610 monthly parkers and over 386,000 daily customers
per annum working and visiting downtown Kitchener. The total number of monthly parkers has
remained relatively flat year over year, but inventory has increased in the last three years by
1,170 spaces with the addition of two new garages and the Bramm Street Yards surface lot.
The percentage of monthly customers over the current supply is approximately 50%.
Recent Challenges:
Conflicting priorities and expectations exist within Parking including expectations to enhance
revenues, supporting the economic development of the downtown and promoting a balanced
transportation system. Parking is a component of The City of Kitchener's Transportation
Master Plan (TMP) and it supports Transportation Demand Management (TDM) initiatives that
have an adverse effect on bottom line results. In the past four years, the City has adopted
aggressive annual parking rate increases as its primary tool to affect parking demand and has
OP - 20
CITY OF KITCHENER
ENTERPRISE OVERVIEW
developed TDM programs that assist downtown employees in shifting away from auto
dependency. Continued work is required to complete the cycling network.
In 2014, the City's monthly parking rate of$154.87 + HST ($175.00) is the highest being charged
within the downtown business area. Competitors in the downtown have not followed suit with
the City's aggressive parking rate increases, and have eroded the City's market share. Based on
anecdotal evidence, staff anticipates increasing parking rates at this time will result in less
overall revenue, as current customers will seek out cheaper alternatives. Further parking rate
increases therefore will continue to soften results as auto dependent customers search for
cheaper parking solutions other than TDM initiatives. Increased parking rates also influence
Downtown Kitchener's competitive advantage. High parking prices directly impact current and
future economic development in the downtown.
The parking revenue assumptions contained in report INS-11-005 (January 5, 2011) have not
been achieved as a result of lack of anticipated new demand from the private sector/new
courthouse, and timing lags in redeveloping surface lots (i.e. parking supply has not been
reduced). Cash flow projections indicate the Parking Enterprise will be in a deficit position at
the end of 2014 and will continue for a number of years in the future.
The Parking Enterprise has an accumulated deficit of$1.8M. The implementation of the Cycling
Master Plan and the Transportation Demand Management initiatives was to be funded from
the Parking Enterprise, but could be in jeopardy based on the current financial performance of
the enterprise. Recognizing the high priority Council has placed on these two programs, the
costs of TDM and Cycling will be funded from the tax-supported capital budget for the next
three years so the programs will continue uninterrupted. The accumulated deficit will be
eliminated within the 5-year projection.
Recent Successes:
Completion of the newly constructed Civic District garage comprised of 412 underground
parking spaces on three levels. Key elements of the garage design include:
• Pedestrian connection to the Regional Headquarters garage
• Crime prevention through environmental design (CPTED) -cameras & panic alarms
• Incorporates two access ramps to accommodate the linear nature of the garage and for
expansion as future building sites develop
• Expanded stairwells/elevators to accommodate user's ultimate destinations but also
peak vehicular and pedestrian flows from the Centre in the Square performances
Regional funding towards the installation of the Electric Vehicle (EV) charging station provided
an opportunity for the City of Kitchener staff to pilot this service in August 2014. The provision
of an EV charging station demonstrates that the City of Kitchener continues to provide
leadership in green initiatives and embracing technological investments within the community.
The Parking Enterprise will be providing its customers an easier way to pay for monthly parking
by introducing pre-authorized payment options in 2015.
OP - 21
CITY OF KITCHENER
ENTERPRISE OVERVIEW
Gas Utility
Operating Model/Philosophy:
To provide customers with quality, dependable, and economical distribution of natural gas. To
provide prompt, cost effective and professional services related to rental water heaters,
appliance servicing and appliance financing. To promote conservation and to operate in an
environmentally sensitive manner.
Services Provided:
Gas Supply: As a natural gas distributor in Ontario, Kitchener Utilities is required to provide a
default "system supply" option to its customers at cost. Kitchener Utilities purchases and
manages the gas supply to meet customer requirements. Council recently approved a new gas
purchase policy for gas supply.
Gas Distribution: As a natural gas distributor, Kitchener Utilities delivers natural gas to
consumers. Work includes installing and replacing meters, underground pipe installation,
response to gas emergencies involving gas line hits, gas odour, carbon monoxide, and line
locates. This service area pays a fixed dividend to the City which is set using a modified cost of
service approach.
Regulatory Affairs: Ensuring compliance with codes, rules and regulations imposed by
government agencies and regulators.
Appliance Service & Financing: Providing financing and specialized services that focus on
heating and cooling equipment inspection and maintenance, such as central air conditioning
units, furnaces, hot water heaters, clothes dryers, fireplaces, pool heaters, ranges, etc.
Conservation: Developing and promoting conservation programs which help customers save
money and conserve energy.
Water Heater Rentals & Service: Supply and service water heaters on a rental basis, including
24/7 service for repair and replacement of tanks.
Benchmarking:
While the population of Kitchener continues to grow, natural gas use has been declining over
the past 10 years. The graph below shows that the volume of gas consumed in Kitchener has
fallen from 295,733,000 m3 in 2005, to 252,525,000 m3 through November 2014. This can be
attributed to efficiency improvements, a decline in large industrial use, conservation
awareness, etc.
Gas Volumes (M3)
300,000,000
250,000,000
200,000,000
150,000,000
100,000,000
50,000,000
.:::.
2004. 2005 2006. 2007. 2008. 2009. 2010. 2011. 2.012. 2013. 2014.
OP 22
CITY OF KITCHENER
ENTERPRISE OVERVIEW
Primary Legislation: � C"IC;iiC1:�
Technical Standards and Safety Act 2000.
Ontario Regulation 210/01 Oil & Gas Pipeline Systems
Canadian Standards Association Z662-11 Pipeline Systems Essentials Code
Canadian Standards Association Z246.1-09 Security Management for Petroleum and Natural
Gas Industry Systems Code
Canadian Standards Association B149.1-10 Natural Gas and Propane Installation Code
Ontario Regulation 212/01 Gaseous fuels
Ontario Regulation 184/03/215 Fuel industry certificates
Measurement Canada —Gas Meters
Electricity and Gas Inspection Act
Ontario Energy Board —Gas Distribution Access Rule, Demand Side Management Guidelines,
Code of Conduct, Storage and Transportation Access Rule
Customer Base:
Natural Gas: 69,000
Rental Water Heaters: 42,000
Appliance Financing: 600
Recent Challenges:
Increased customer level of service demands and expectations; financial constraints; aging
infrastructure; security and emergency response; growth; evolving business model; climate
change; stricter regulatory requirements; retirements of senior experienced staff and related
workforce shortages and gaps; utility support services.
Recent Successes:
The unique partnership between Kitchener-Wilmot Hydro and Kitchener Utilities, in regard to
conservation and public outreach, allows Kitchener Utilities the flexibility to enhance existing
program offerings and create new program opportunities that reflect evolving market needs
specific to Kitchener. These programs also help Kitchener customers save natural gas, electricity
and water.
The continued partnership on the delivery of the Home Assistance Program saw an increase of
370% in program participation from last year, resulting in 39,303 cubic metres of gas savings for
low income customers.
More than 900 energy audits were performed this year with close to 10,650 energy-efficient
measures installed in eligible customer homes across Kitchener.
Kitchener Utilities completed an online natural gas service application form which streamlines
the application process and automates the status of each application for each builder,
contractor and homeowner.
Mobile technology has enabled the Kitchener Utilities work force to better meet customer
needs as well as streamline work processes.
OP - 23
CITY OF KITCHENER
ENTERPRISE OVERVIEW
Water Utility
Operating Model/Philosophy:
To provide customers with quality, dependable, and economical distribution of water. To
promote conservation and to operate in an environmentally sensitive manner.
Services Provided:
Water Distribution: Monitoring, installing and repairing the network of water mains, meters
and services to ensure a reliable and safe supply of water.
Conservation: Developing and promoting conservation programs which help customers save
both money and conserve energy.
Benchmarking:
While the population of Kitchener continues to grow, water use has been declining over the
past 10 years. The graph below shows that the amount of water metered and billed by the City
of Kitchener has fallen from 22,500,000 m3 in 2005, to a projected amount of 19,800,000 m3 in
2014. This is attributed to decreased industrial demand, increased water efficiency measures,
and greater conservation awareness.
Metered Water (M3)
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
2005. 2006. 2007. 2008. 2009. 2010. 2011. 2012. 2013 2014.
Primary Legislation:
Safe Drinking Water Act, 2002.
Ontario Regulation 170/03 Drinking Water Systems
Ontario Regulation 128/04 Certification of Drinking Water System Operator and Water Quality
Analysis
Ontario Regulation 169/03 Ontario Drinking Water Quality Standards
Ontario Regulation 188/07 Licensing of Municipal Drinking Water Systems
Customer Base:
Water: 64,000
OP - 24
CITY OF KITCHENER
ENTERPRISE OVERVIEW
Recent Challenges:
The primary challenges experienced by the Water utility in recent years are financial and relate
to the water rate.
The City's water rate is based 100% on water consumed, even though the utility has significant
fixed costs that do not change based on the amount of water consumed (e.g. capital costs). As
noted in the graph above, for the past decade water consumption has been declining. This
means the fixed costs must be spread over less water consumed, which puts upward pressure
on the water rate.
In addition, Regional rates make up more than half of the cost of the Water utility and have
been increasing by at least twice the rate of inflation in recent years. Meanwhile, the City-
controlled costs of the Water utility have been limited to inflation or below, even though there
is upward pressure on those costs relating to legislative compliance as well as infrastructure
maintenance and replacement.
In 2014, the combination of an extremely cold winter that caused a significant number of main
breaks and a wet summer that resulted in less outdoor water use have reduced water
consumption to the lowest point in the past decade. The water main breaks also increase costs
as the mains must be repaired before service can be restored. The culmination of decreased
revenues and increased costs in 2014 has caused a significant variance that will eliminate the
stabilization reserve fund created to deal with deficits in the Water utility.
Recent Successes:
The unique partnership between Kitchener-Wilmot Hydro and Kitchener Utilities, in regard to
conservation and public outreach, allows Kitchener Utilities the flexibility to enhance existing
program offerings and create new program opportunities that reflect evolving market needs
specific to Kitchener. These programs also help Kitchener customers save natural gas, electricity
and water.
Mobile technology has enabled the Kitchener Utilities work force to better meet customer
needs as well as streamline work processes.
OP - 25
CITY OF KITCHENER
ENTERPRISE OVERVIEW
Sanitary Sewer Utility(wastewater)
Operating Model/Philosophy:
The Sanitary Sewer utility performs the service of removing wastewater generated in the city in
an efficient, cost effective, and environmentally responsible manner. The Sanitary Sewer utility
also ensures this is done in compliance with legislative and regulatory requirements.
Services Provided:
The Sanitary Sewer utility performs a wide range of activities and programs that together
supports the provision of safe and reliable collection of raw sewage, generated within Kitchener
and its subsequent conveyance through 800 kilometers of pipes and 22 pumping stations to a
Regional wastewater treatment facility, where the City pays the Region for ultimate treatment
and disposal. Such activities and programs include:
• The Accelerated Infrastructure Replacement Program (AIRP)
• Pumping station rehabilitation and replacement
• The trenchless sewer rehabilitation program
• Trunk sewer replacement
• Spot repair program
• Pumping station maintenance
• Flow monitoring program
• Closed Circuit Television (CCTV) inspection program
• Flushing programs
• Emergency repair work
• Service connection blockage clearing
• Hydraulic modeling
• Condition assessment, scoring, and system analysis
• System for the remote control of and data acquisition from pumping stations (SCADA)
Benchmarking:
Sanitary sewer main rehabilitation or replacement statistics for 2013:
City Rehabilitation Replacement
Cambridge 3.0 kilometers 3.0 kilometers
Waterloo 0 kilometers 0.2 kilometers
Kitchener 1.9 kilometers 3.2 kilometers
Primary Legislation:
Clean Water Act
Sustainable Water and Waste Water Systems Improvement and Maintenance Act
Environmental Protection Act
Ontario Water Resources Act
Environmental Assessment Act
OP - 26
CITY OF KITCHENER
ENTERPRISE OVERVIEW
Customer Base:
The owners, residents, and users of nearly all facilities in the city are generators of raw sewage.
This would include nearly every residential, and every significant commercial and industrial
building in the city. In total, this equates to over 60,000 customers billed for this service.
Recent Challenges:
Operational: The height of some new buildings being constructed downtown threatens the
integrity of radio communications for sewage pumping stations.
Legislative: The new legislation for the Sewers Safety Inspection (SSI) process, and for an
increased level of service that is now required for the locating of utilities prior to construction
activities taking place.
Budgetary: (1) Studies are underway to examine potential year-to-year variations in the
discrepancy between volumes of water being sold and volumes of sewage being processed —
and the effect this may have on revenues. (2) Constantly increasing unit costs of sewage
processing (these costs are controlled by the Region). (3) Operations and maintenance
requirements necessary to maintain current levels of service versus current budget allocations
for such activities.
Recent Successes:
Capital Works: Furthering the goals of the Accelerated Infrastructure Replacement Program
through the replacement or rehabilitation of sanitary sewer mains and services: from 2009 to
the end of 2014, 29 kilometers of sewer main replacement and 9.5 kilometers of sewer main
rehabilitation will have been accomplished.
Capital Works: Replacement of the Freeport sewage pumping station (SPS) and associated
forcemain is underway—and is currently running on time and on budget. The completion of
this work will allow the lifting of a development freeze that has existed in this area for over a
decade.
Inspections: 228 kilometres of sanitary sewer main inspected in the past 6 years. The current
city-wide inspection cycle is 19 years. The future target is to reduce this to 13 years.
Maintenance: 53 spot repairs to sanitary sewer mains have been successfully performed in the
past two years.
Analysis: Last year's successful update to the sanitary sewer system hydraulic model, and its
continued day-to-day usage as an important tool in the development approvals process.
OP - 27
CITY OF KITCHENER
ENTERPRISE OVERVIEW
Stormwater Utility
Operating Model/Philosophy:
The Stormwater utility performs the service of treating and controlling stormwater generated
in the city in an efficient, cost effective and environmentally responsible manner to comply with
legislative and regulatory requirements.
Services Provided:
The utility provides the necessary funding to operate, maintain, rehabilitate, replace and build
stormwater infrastructure across the City. The stormwater system is comprised of 100
kilometres of open watercourses, 700 kilometres of sewers, 10,000 catch basins and 100
stormwater ponds with a total replacement value of$705M (2013). Services include new
capital projects identified by the annual water quality audit that is conducted on local
watercourses to determine where additional stormwater controls are required to improve
water quality. Other projects are required to address flooding in various parts of the City. In
addition to discreet capital projects, annual programs are established to address recurring
activities. These include:
• Storm Infrastructure Maintenance Program
• Watercourse Improvement Program
• Storm Water Management (SWM) Pond Retrofit Program
• Drainage Improvement Program
• Storm Infrastructure Rehabilitation Program
• Sewer & Manhole Maintenance and Repair
• Watercourse/Bridge/Culvert Maintenance and Repair
• Street Sweeping
• Leaf Pickup
• Spills
Finally, the utility also funds a credit program to provide an incentive to private property
owners to control stormwater at the source where it falls on private property with the intended
result of a long term cost saving to the City due to less loading on the municipal stormwater
system.
Benchmarking:
The stormwater utility is currently in the process of developing a Comprehensive Stormwater
Management Master Plan (CSMP) to replace the 2001 SWM Policy I-1135. The master plan will
establish goals and objectives as well as provide direction to the utility until the year 2030.
There will be an annual process of measuring progress against planned progress in the CSMP.
Additionally, the utility is now participating in the National Water and Wastewater
Benchmarking Initiative which looks at key performance indicators for municipalities across the
country. Data for 2013 has been gathered and is being processed at the time of writing this
overview and results will be made available at a future date.
OP - 28
CITY OF KITCHENER
ENTERPRISE OVERVIEW
Primary Legislation: � C"IC;iiC1:�
There is existing legislation that dictates certain requirements for stormwater management
which impacts almost every facet of the services the utility provides ranging from new
construction to operations and maintenance. The key pieces of legislation include:
• Clean Water Act,
• Water Opportunities Act,
• Environmental Assessment Act,
• Ontario Water Resources Act,
• Canadian Environmental Protection Act,
• Canadian Fisheries Act, and
• Various supporting Ontario Regulations, etc.
Customer Base:
Every property owner in the city that has impervious surfaces on their property that contributes
to the overall stormwater runoff that is managed by the municipality. In total this equates to
over 70,000 customers billed for this service.
Recent Challenges:
Operational: The nature of storm events becoming more severe and intense due to climate
change has a direct impact to the stormwater management system, by either causing damage
to, or exceeding the capacity of existing infrastructure in an unpredictable manner.
Legislative:The new legislation for the Sewer Safety Inspections process, and for an increased
level of service that is now required for the locating of utilities prior to construction activities
taking place.
Budgetary: (1) There is an existing backlog of legacy projects identified in previous stormwater
audits that still need to be completed. These can only proceed as budget becomes available. (2)
Operations and maintenance requirements necessary to maintain the current service levels
versus the current budget allocations for such activities. This does not take into consideration
the need for additional budget to facilitate the transition to a more preventative maintenance
approach. (3) The CSMP is currently underway to look at alternative strategies to enhance the
lifecycle of stormwater infrastructure to help address the looming deficit identified in the Asset
Management Plan (2013).
Recent Successes:
Stormwater Facility Mobile Inspections: In 2014 the utility rolled out a mobile inspection
platform to conduct inspections on every pond the city owns.This condition information is then
used to identify necessary maintenance works and prioritize capital works based on the existing
condition of the facility.
Closed Circuit Television (CCTV) Inspection Program: The utility recently began inspecting the
condition of existing storm sewers similar what the sanitary utility has done for several years.
This condition information increases the level of confidence when making decisions on the
prioritization of work.
OP - 29
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Oneratina Budget Issue Pager Index
Included in
IP # Description Proposed
Budget?
Op 01 Centre In the Square (CITS) Operating Budget N/A
Op 02 Council Conference Budget (4 year term) N/A
Op 03 Full Time Equivalent Staff Additions Yes
OP - 105
CITY OF KITCHENER
2015 BUDGET ISSUE PAPERCIC; iCJ:�
ISSUE: Op 01—Centre In the Square (CITS) Operating Budget
FUND: Operating
DEPARTMENT: Centre in the Square
PREPARER: Sandra Bender- CEO
BUDGET IMPACT: None
BACKGROUND:
The Centre In The Square embarked upon a Strategic Plan covering 2013-2016. The plan reset
the direction of The Centre to proactively manage both commercial and non-commercial
interests, to engage its audience within the broader community, and to secure a sustainable
financial model to meet the growing financial requirements to operate and maintain the facility.
One of the core principles of the Strategic Plan was to increase revenue stemming from the
calendar management of premium dates. The Centre was to take full and final control of the
calendar to ensure increased revenue to cover these growing operating costs and establish a
market for The Centre with an audience base engaged through a broader programming structure.
This direction would prioritize commercial clients and productions on weekends and over a 3
year period would migrate a portion of weekend dates, traditionally held by not-for-profit arts
organizations to commercial shows and rentals.
The issue of calendar management raised issues for the local arts sector and City in 2013 leading
to an operational review in 2014. The Centre has been operating on a status quo basis (i.e. rental
rates and dates) since 2012 around calendar management and is committed through to June
2016 on that basis. As such, The Centre has not been meeting its financial requirements to
operate and maintain the facility. This will continue to result in further operating losses for The
Centre in 2015 onwards without further subsidy from the City to manage the status quo.
The Centre has been instructed to manage the status quo until the City finalizes their review of
the building and current mandate given to The Centre. In the meantime, The Centre has taken
steps to minimize costs and risks during this period, along with capping administrative costs
which have been in effect since 2012. The priority has been placed on maximizing revenue
through new streams which The Centre does control, including a new membership schemes,
improved non-arts rentals, etc. while investing reserve funds in deferred maintenance and
compliance requirements for the facility. The Centre has been able to deliver financial successes
(i.e. John Legend,The Book of Mormon, etc.), but without an increased subsidy to sustain the
status quo and/or the ability to move forward with calendar management, the growing
operating, repair and maintenance costs of the venue outstrip the capacity of the organization to
generate revenue from its primary source of activity.
While the Strategic Plan included operating losses for 2013 and 2014 during this transitional
period, 2015 was to deliver a breakeven scenario based on increased revenue generated from
the calendar. At this stage, The Centre is uncomfortable with the status quo given the lack of
clarity around future directions that may be applied to the organization. As such, The Centre is
proposing a fixed costs budget to reduce the operating gap minimally. A loss of$643,000 is
projected based on a fixed cost budget for 2015 as shown in the table below.
OP - 106
CITY OF KITCHENER
2015 BUDGET ISSUE PAPERi IC; iC1:�
RATIONALE/ANALYSIS:
Operating Costs Operating Costs
Status Quo Fixed Costs
Revenue
Performances
CITS/Co-Presents $250,000 $250,000
Rentals $650,000 $650,000
KWS $158,400 $158,400
Other $15,000 $15,000
$1,073,400 $1,073,400
Other
Revenue
Other $314,900 $314,900
$1,388,300 $1,388,300
Expenses
Admin & General $495,900 $411,700
Marketing &
$207,920 $120,480
Programming
Occupancy $797,000 $797,000
Salaries & Wages $2,102,369 $2,102,369
$3,603,189 $3,431,549
Net Profit/(Loss) $2,214,889 2,043,240
CoK Grant $1,400,000 $1,400,000
Net Profit/
(Loss) after Grant
8 .4"880 X04 „243
• Revenue target of$900K whether CITS or Rentals make up the majority(based on 54 dates at an average of
$16K/show). Commercial rentals shows are an average of$20K/show;CITS Presents are an average of
$14K/show and NFP shows are$4K/show.
• Revenue from KWS is based on 48 dates confirmed at avg profit of$3.3K per show.
• Highest risk area under expenses is tied to occupancy costs. The level of maintenance and repairs is
significant. Weather can impact these numbers(snow removal,damage, increased heating).
FINANCIAL IMPLICATIONS:
The City's budgeted contribution to the CITS has been $1.4M since 2013. In 2013 and 2014, the
City has reverted to the previous arrangement where the City and CITS evenly share yearend
surpluses/deficits. Given the ongoing work related to the mandate of CITS, a deficit is projected
for 2015. CITS requests that the yearend results for 2015 continue to be shared 50/50 between
the CITS and the City, and that this arrangement be reviewed once the mandate work is
completed in 2015.
RECOMMENDATION:
For information only.
OP - 107
CITY OF KITCHENER
2015 BUDGET ISSUE PAPERCIC; iC1:�
ISSUE: Op 02—Council Conference Budget (4 year term)
FUND: Operating
DEPARTMENT: Office of the Chief Administrator— Mayor and Council
PREPARER: Dorothy McCabe, Chief of Staff
BUDGET IMPACT: None
BACKGROUND:
On April 29, 2013, Council passed a resolution that amended how the funding envelope for
conferences could be accessed by members of Council. Previously, the budget was an annual
budget and pertained to all members of Council as a whole without any limit necessarily for any
one person. It was amended to be a 4-year budget limit per member of Councillor to ensure
that funding was allocated equitably amongst the individual members of Council.
The Conference Policy has been amended to reflect the new criteria and spending restrictions,
however, the budgeted amount allocated to each member of Council for conferences must be
determined and approved at the start of each new term of Council for use during the four year
term.
RATIONALE/ANALYSIS:
The funding limits that were proposed in the April 2013 resolution assumed that the existing
annual limit would be maintained for each of the 4 years and distributed equally among the 10
Councillors with an increased amount for the Mayor, with no change required to the budget.
FINANCIAL IMPLICATIONS:
None.
RECOMMENDATION:
THAT for the 2014-2018 term of Council, each Councillor shall be allocated $14,500 from the
Council Conference Budget for use during that term;
AND
HER THAT for the 2014-2018 term of Council, the Mayor shall be allocated $18,500
from the Council Conference Budget for use during that term.
OP - 108
CITY OF KITCHENER
2015 BUDGET ISSUE PAPERCIC; iCJ:�
ISSUE: Op 03— Full Time Equivalent Staff Additions
FUND: Operating
DEPARTMENT: Finance & Corporate Services Department, Financial Planning
PREPARER: Debra Fagerdahl, Manager of Financial Planning
BUDGET IMPACT: None
BACKGROUND:
Council approves all full time equivalent (FTE) staff additions. In the 2015 budget, 3 FTEs are
being requested. All positions are fully funded and have no impact on the operating
budget.
RATIONALE/ANALYSIS:
The proposed positions are outlined below.
Program Assistant(0.5 FTE), Kitchener Market
A Market Capacity Review Report was completed in March 2014 by the City's Internal Auditor
to analyze work volumes and determine the optimal staffing level for the Kitchener Market.
Report FCS-14-108, 2nd Quarter Audit Status Report was presented to council on June 30, 2014
with the recommendation to "create a part-time Program Assistant position".
The need for the position is summarized in the conclusion of the report:
"Staff are struggling with workload and feel the need to work through lunches, breaks and incur
unpaid overtime in order to get the job done, to provide the best customer service they can, and
have the market be a success. There is frequent turnover in the unit due to the demands of the
work which contributes to the stress and workload. Something needs to be done before more
staff burn-out and leave. It is recommended that in order for the market to continue and to
grow in the future more resources are required. At a minimum more administrative support is
required at this time."
Event Attendant(1.5 FTE), Special Events
The City of Kitchener through KEDS 2011-14 has the objective of supporting urban vitality by
facilitating the development of special events throughout the annual calendar, and increasingly,
in venues across the city. Each year more events require assistance from City staff. In 2014,
more than 100 City of Kitchener sponsored events took place hosting approximately 550,000
attendees. With this in mind, Special Events hires part time staff each year at varying times to
work alongside the full time event coordinators.
As the number of events being supported by City staff continues to increase each year, the
need and value of part time staff has increased. The part time staff assist the full time event
coordinators at varying times throughout the year in the planning of logistics for events, setting
up and taking down event sites, assisting in updating databases, corresponding with vendors,
event research, etc. Without the support of part time staff the number of events conducted
would be significantly reduced.
OP - 109
CITY OF KITCHENER
2015 BUDGET ISSUE PAPERCIC; IC1:�
Landscape Architectural Intern (1.0 FTE), Operations
The Landscape Architectural Intern position was created as a one year contract in 2006 to
address workload demands necessary in performing current and future tasks vital to the
delivery of park and trail capital projects. With continued workload pressures and demand for
additional park and trail programs, the position has been extended annually each year with
support from Local Union #791 C.U.P.E. The current and forecasted workload recognizes that
this position should be full time to keep pace with continued park &trail capital projects.
The position has been and will remain fully funded through the existing park &trail capital
program. Local Union #791 C.U.P.E. has permitted the extension previously but has provided
notice that any further extensions are unreasonable and beyond the bargaining agreement for
temporary positions. Should the position not be made permanent and the Local Union not
support any additional one year extensions, the capital program for park and trail development
would not be realized and a backload of projects would develop.
FINANCIAL IMPLICATIONS:
None. Funding for all of the positions exists in current budgets and has been reallocated to
these priority positions.
RECOMMENDATION:
That the positions noted above be approved by Council.
OP - 110
Strategic Initiatives Issue Paper Index
Included in
IP # Description Proposed
Budget?
SI 01 Restoration of the Tax Stabilization Reserve Fund No
SI 02 Increased Urban Forest Maintenance No
S103 e-Participation for Open Government No
S104 Health & Safety Compliance Resource No
S105 Waterloo Region Economic Development Corporation No
S106 Improve the City's Ability to Engage Volunteers in the Community No
S107 Increased Street Level Special Events Programming No
SI 08 Increased Funding for the Leisure Access Card No
OP - 111
CITY OF KITCHENER
2015 BUDGET STRATEGIC INITIATIVES ISSUE PAPERCIC; iC1:�
ISSUE: SI 01— Restoration of the Tax Stabilization Reserve Fund
FUND: Operating
DEPARTMENT: General Expense
PREPARER: Ryan Hagey, Director of Financial Planning
BUDGET IMPACT: $200,000
OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE:
Begin to restore a balance in the Tax Stabilization Reserve Fund (TSRF) which will be depleted
by the end of 2014. The TSRF is used primarily to fund operating budget deficits arising from
unforeseen and/or extraordinary events. .
BUDGET IMPACT:
Funding of$200,000 is required to begin restoring a balance in the TSRF. This amount equates
to approximately 0.1% of the total tax supported operating expenditures.
RATIONALE/ANALYSIS:
The City of Kitchener has a recent history of operating deficits. For the past number of years,
the City has finished the year with an operating budget deficit (before applying funds from one-
time capital closeouts). The average annual deficit over the past five years is $425,000. These
have been a result of extraordinary events (such as record harsh winters, windstorms, losses at
Centre in the Square, etc.) and also a budget that was not fully funded in non-discretionary
areas like utility costs for municipal properties.
Ongoing operating budget deficits, combined with budgeted transfers out of the reserve fund in
order to reduce tax rate increases have put significant strain on the TSRF in recent years. As
shown in the table below, the TSRF has gone from a balance of$3.6M at the end of 2011 to a
projected balance of$32,000 at the end of 2014. This amount is woefully short of the
minimum target balance of$5.2M, and exposes the possibility that a tax rate increase in a
future year may be automatically required to fund the deficit from the previous year. Up to
now, deficits have been funded through the TSRF, but that will not be a viable option based on
the minimal projected balance. A proactive contribution to the TSRF in 2015 will help to avoid a
shock to tax rate increases in the future.
Summary of the Tax Stabilization Reserve Fund
Target B alance
V $4,749,802 $41951,223 23 $5,104,543 $5,222,519
Minimum
ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN:
This proposal is linked to the Effective and Efficient Government foundation of Financial
Management.
OP - 112
CITY OF KITCHENER
2015 BUDGET STRATEGIC INITIATIVES ISSUE PAPERCIC; iC1:�
ISSUE: SI 02— Increased Urban Forest Maintenance
FUND: Operating
DEPARTMENT: Infrastructure Services—Operation
PREPARER: Greg Hummel, Manager Park Planning, Development and Operations
BUDGET IMPACT: $100,000
OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE:
Increasing the focus on proactive maintenance of street trees from structural pruning, street
raising and timely stumping will minimize the number of complaints from residents as well as
support the quality of street trees. This issue paper has been developed in response to the
recent strategic session in which Council members identified urban forest maintenance as a
high priority for this term.
BUDGET IMPACT:
Funding of$100,000 would allow for additional temporary labourers and other outside services
to proactively deal with Urban Forest Maintenance.
RATIONALE/ANALYSIS:
The City of Kitchener has an existing street tree inventory numbering approximately 60,000
trees. Additional to the street trees is over 800 hectares of natural/hazard and park lands that
are covered with trees and forest that needs additional maintenance to ensure quality and
safety for residents of Kitchener. The inventory needs cyclical maintenance to ensure safe
passage beneath the trees for pedestrians, cyclist and trucks/automobiles. The street raising
process needs to be completed every 3 to 5 years to ensure that the limbs are not obstructing
safe passage or hindering views. The Operations division receives more than 1,800 service
requests each year to address obstructions from boulevard trees.
New street trees are being proactively maintained through structural pruning when available
resources allow. The new approach to pruning establishes acceptable growing patterns for the
trees. By promoting structurally sound limbs to grow, the impact of severe wind, snow or ice
storms diminishes. This maintenance program takes more time initially, yet over the long term
growth of the tree, will require minimal maintenance in later years. This time invested early is
more labour intensive but as the tree grows, the need for severe street tree raising in the
future is reduced. This early pruning minimizes equipment costs, fuel costs and the impact on
the environment in later years.
Additional resources would also be available to address the immediate needs of stumping as
trees are removed from our inventory. Presently stumps are removed approximately one year
after the branches and stems are removed. Additional resources would be directed to assist
with the immediate stumping and the required tree replacement could happen within a
growing season meeting the service level requests of our residents.
ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN:
This initiative is linked to the Community Priority of Environment.
OP - 113
CITY OF KITCHENER
2015 BUDGET STRATEGIC INITIATIVES ISSUE PAPERCIC;LiC1:�
ISSUE: SI 03— E-Participation as part of Open Government
FUND: Operating
DEPARTMENT: Chief Administrator Office—Corporate Communications and Marketing
PREPARER: Jana Miller, Executive Director, Office of the CAO
BUDGET IMPACT: $135,000 ($75,000 Operating, $60,000 already included in Capital)
OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE:
In February 2014, Council endorsed the staff report on Open Government that included
recommendations for open data and e-participation as key components of the 2014 work. The
E-Participation Executive Summary Report was endorsed by Council on September 15, 2014.
This consultant's report provided direction on the establishment of an e-participation
program/strategy for the City of Kitchener and identified technological and staff resourcing
considerations that require funding if the report recommendations are to be achieved. The
report directed staff to bring forward associated funding requirements through the 2015
budget process as a potential strategic addition.
BUDGET IMPACT:
As noted in the consultant's report approved by Council on September 15, 2014, it is imperative
that resourcing for enhanced e-participation/community engagement be sustainable. There
are three distinct resourcing requirements related to the acquisition of technology, its
implementation and ongoing sustainability of an e-participation program, including:
1. Business Solution Acquisition $40,000 (included in the capital budget)
-addresses the need to acquire technology solution to support e-participation
2. Initial Implementation Support $20,000 (included in the capital budget)
-addresses the need for subject matter expert support and training for the initial year
3. Staff Resourcing $75,000 (one full time equivalent or 1 FTE)
-addresses the enhanced services from communications, and the need for a dedicated
internal expert to monitor, manage, grow and maintain this initiative across the organization
RATIONALE/ANALYSIS:
E-Participation is an integral component of the participatory principle in the City of Kitchener's
Open Government Framework. Implementing e-participation technology and strategy support
the City's Open Government Action Plan with a focus on being more participatory. An e-
participation initiative will enhance Kitchener's longstanding tradition of community
engagement, making it easier for citizens to participate in the decisions of Council and to
engage in two-way dialogue. An adequately resourced e- participation community engagement
program will enhance decision making, service delivery and build trust with citizens. It will also
respond to calls from citizens for increased electronic engagement.
ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN:
E-participation is one component of the City of Kitchener's Open Government Action Plan and is
linked to the Community Priority of Leadership and Community Engagement.
OP - 114
CITY OF KITCHENER
2015 BUDGET STRATEGIC INITIATIVES ISSUE PAPERCIC;LiC1:�
ISSUE: SI 04— Health and Safety Compliance Resource
FUND: Operating
DEPARTMENT: Finance & Corporate Services— Human Resources
PREPARER: Michael Goldrup, Director Human Resources
BUDGET IMPACT: $80,000 ($70,000 tax/$10,000 enterprise)
OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE:
An increasingly complex regulatory and compliance environment necessitates an increase in
corporate health and safety resources to both implement and manage the ongoing changes.
This is a proactive risk management strategy to ensure that lost time remains well managed and
the corporation does not increase its exposure to Ministry of Labour fines and orders.
BUDGET IMPACT:
This initiative requires one additional full time equivalent (1 FTE) with a total cost of$80,000.
The cost of this position will be shared between the tax supported budget ($70,000) and the
enterprise budgets ($10,000).
RATIONALE/ANALYSIS:
In 2014 a review of the City's health and safety function was completed. Through this review it
was confirmed that the City faces a dramatic increase in legislated health and safety compliance
obligations. It was also confirmed that the City does not currently possess the capacity or
capability to satisfactorily address these obligations. This issue paper will highlight four key
areas:
1. Recent changes to legislation— Recent major changes to the Occupational Health and
Safety Act require the City to create programs, increase communications and expand staff
training. Some examples include:
• Violence in the Workplace Legislation, which requires policy, training,
investigation/reporting processes and a 'violence in the workplace coordinator'
• Noise in the Workplace Legislation, which requires proactive identification of noise sources,
proactive identification of staff who are exposed to levels of noise prohibited by legislation,
coordination of abatement plans and provision of required personal protective equipment
and training
• Other examples include Mandatory Training for workers and management, Confined Space
Regulation and Musculoskeletal Disease Prevention
2. Pending legislation -The Ministry of Labour has introduced a prevention branch mandated
to improve safety in Ontario. With this change many new priorities have been identified by
the Ministry of Labour that will be acted upon through legislative changes. These will create
new programs of work for the City. Some examples include:
• Major changes to the Workplace Hazardous Materials Information System(WHMIS)
Regulation
• New legislation specifying new requirements for working at heights
• New legislation requiring basic mandatory safety training for workers performing
construction work
OP - 115
CITY OF KITCHENER
2015 BUDGET STRATEGIC INITIATIVES ISSUE PAPERCIC;LiC1:�
3. Changing Ministry of Labour inspection and enforcement practices— Increasingly
rigorous inspections have placed a higher demand on staff to create compliance plans and
initiate changes to assist the Corporation with compliance, and also to respond to Ministry
of Labour inquiries, inspections and orders.
4. Corporate Health and Safety Strategy—the strategy (2011) was based on a gap analysis
audit of the City of Kitchener Health and Safety program based on an industry standard for
managing safety and compliance. Initial work to implement the strategy has shown success
as evidenced through reduced lost time, improved safety culture, and greater focus on
proactive risk management. The City lacks the resources to keep the implementation of the
strategy moving.
What does the City need:
Current technical health and safety resources are insufficient to address an increasingly
complex regulatory and compliance landscape, with only half of an FTE dedicated to this
function currently. Benchmarking data suggests that an organization the size of Kitchener
should have two FTEs dedicated to this role. The City needs to invest in specialized health and
safety resources to implement and manage recent/expected changes to legislation, respond to
the expectations of Ministry of Labour inspectors, and further the implementation of the
Corporate Health and Safety Strategy.
What will happen if the City doesn't meet the needs:
Without adequate resources behind the management of legislative changes and the ongoing
safety program, the City will be exposed to potential fines, stopped work, or orders for
compliance. There is also the risk that the City will be unable to provide suitable records and
proof of reasonable management of safety, a due diligence defense in the case of prosecution.
Consider the impacts of two recent case studies - in 2013, City of Ottawa was fined $80,000 as a
result of a worker falling off a truck box causing a fracture. Also in 2013, the Corporation of the
Township of Essa was fined $50,000 as a result of a worker sustaining an arm injury while
changing attachments on a salt spreader.
The City's current lost time hours per employee per year rate is 1.22 which compares
favourably to the municipal benchmark of 2.33. Based on industry standard accident
causation models for costs of injury to an organization, the cost to the City of reverting to the
municipal benchmark would be more than 3x the cost of the proactive investment outlined in
this issue paper.
ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN:
This proposal is linked to the Effective and Efficient Government foundation of Organizational
Governance.
OP - 116
CITY OF KITCHENER
2015 BUDGET STRATEGIC INITIATIVES ISSUE PAPERCIC;LiCJ:�
ISSUE: SI 05—Waterloo Regional Economic Development Corporation
FUND: Operating
DEPARTMENT: Chief Administrator Office— Economic Development
PREPARER: Jeff Willmer, CAO
Rod Regier, Executive Director of Economic Development
BUDGET IMPACT: $37,000 in 2015, Additional $120,000 in 2016
OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE:
As reported to the joint meeting of all municipal councils in June 2014, and Kitchener Council
August 25 2014 (Report CAO-14-037), the creation of a new regional economic development
corporation has been approved in principle. The mandate of the organization will include:
- Management of the regional economic development strategic plan and coordination with
other stakeholders (new function);
- Investment attraction to the Waterloo Region;
- Liaison with Provincial and Federal government efforts to attract industry and grow key
sectors of the economy;
- Marketing and promotion of the region;
- Key sector development activities (new function);
-Talent development and people attraction (working with partners);
- Data and research to support regional economic development activities;
- Coordination and collaboration of Area Municipal efforts in retaining and supporting the
expansion of"regional scale" businesses (new function); and
-Annual reporting to the Regional and Area Municipal Councils.
BUDGET IMPACT:
Funding of$37,000 is required in 2015, with an additional increase of$120,000 required in
2016.
RATIONALE/ANALYSIS:
Canada's Technology Triangle (CTT) will continue its work throughout 2015 and conclude
operations at the end of 2015. The new Waterloo Regional Economic Development
Corporation (WREDC) will start up in mid-2015 and be fully operational by January 1, 2016.
Total municipal funding for CTT in 2014 is $954,000. Total municipal funding for the new
WREDC is estimated at $2M/year for 2016 and beyond. Kitchener's contributions for 2014-2016
are estimated as follows:
2014 $163,000 (CTT only)
2015 $200,000 (CTT plus partial year of WREDC) - $37,000 increase
2016 $320,000 (WREDC only)—further $120,000 increase
ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN:
This proposal is linked to the Community Priority of Development.
OP - 117
CITY OF KITCHENER
2015 BUDGET STRATEGIC INITIATIVES ISSUE PAPERCIC; iC1:�
ISSUE: SI 06— Improve the City's Ability to Engage Volunteers in the Community
FUND: Operating
DEPARTMENT: Community Services Department—Volunteer Resources Section
PREPARER: Janice Ouellette, Facilitator of Volunteer Resources and Community
Engagement
BUDGET IMPACT: $35,700
OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE:
Respond to the changing trends in how and why people are volunteering in our community by
improving the City's ability to develop partnerships with other community organizations and
expand upon existing volunteer opportunities within the City.
BUDGET IMPACT:
Improving the City's ability to engage volunteers in the community will require the addition of a
part-time (0.5FTE) Coordinator of Volunteers. The total cost of this new part-time position is
$35,700 (including salary, fringe and some minimal administrative expenses).
RATIONALE/ANALYSIS:
The City's Volunteer Resources section is currently responsible for coordinating the
contributions of 2,000 direct and 4,000 indirect volunteers in roles which serve seniors, youth
and inclusion programs, special events, as well as neighbourhood association and minor sport
group boards. This strong volunteer base allows the City to provide its current level of service
and programing to the community at a much lower cost than if staff were required to fulfill
these roles. In addition to coordinating these volunteer opportunities, the Volunteer Resources
section is also responsible for fostering volunteerism within the City, providing training to City
staff and engaging thousands of residents through events such as Festival of Neighbourhoods,
Earth Day and community engagement initiatives such as City Hall 101 information sessions and
tours.
While the city's current level of service and staffing in this area has been adequate in the past,
changing trends in where, how and why people are volunteering requires a more proactive and
robust approach going forward. Kitchener has already begun to see a significant and growing
number of residents that no longer want to make long-term, weekly volunteer commitments
for years at a time.
A 2010 survey of 132 current City of Kitchener Survey of City volunteers
volunteers showed that 20.5% anticipated 30 re:time spent volunteering
volunteering less in the future. Volunteers with 20
minor Sports Associations and Neighbourhood 10
Associations were most likely to indicate they will 0 Rio volunteering less %expecting to
spend less time volunteering in the future. than they did in the last volunteer less in the
12 months next 5 years
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2015 BUDGET STRATEGIC INITIATIVES ISSUE PAPERCIC;LiC1:�
The main reasons for decreased volunteering:
1) lack of time —e.g. too busy due to family, school and work commitments (cited by 65% of
respondents); and
2) no desire to make a long term commitment but rather interested in one time/event/project
episodic based volunteering either individually or as a family/group/corporation (41% of
respondents).
The findings of this survey are consistent with similar trends across North America.
In the face of these changes, maintaining the status quo in terms of the city's current level of
service in this area will result in a decline in volunteering, as has been experienced in other
Canadian cities. This decline in volunteerism would result in higher costs to the municipality to
offer the same level of programs and services as it does today.
Recognizing the changes of how and why people are choosing to volunteer, city council
approved the Volunteer Services Strategy (2010). The strategy recommended that, "to
maintain a vibrant volunteer sector, the City must reach out to new sectors of the community
(new Canadians, Zoomers, corporations); must better understand and respond to the
motivations for volunteering, including a greater emphasis on personal growth and skill
development, and must overcome barriers associated with time constraints and
overcommitted lifestyles".
To help support these objectives, the strategy recommended the addition of a part-time
(0.5FTE)
Co-ordinator of Volunteers. This new part-time position would allow the City to play a much
stronger role in developing partnerships with other community organizations and expanding
existing volunteer opportunities to reflect the new reality of how people want to volunteer.
The new part-time volunteer coordinator will help staff across the corporation, in various city
facilities and with other community groups to redesign and develop volunteer opportunities
that appeal to those who are looking for flexible and skills-based volunteer opportunities that
appeal to various ages and groups. The individual would also assume responsibility for the
coordination of existing community engagement and informal volunteering opportunities, such
as: Festival of Neighbourhoods, Kitchener in Bloom, Earth Day and City Hall 101 tours. Shifting
these coordination responsibilities to the new position would allow the City, through more
efficient and effective use of the existing Facilitator of Volunteer Resources, to play a much
stronger role in outreach and partnership development, fostering volunteerism and capacity-
building in the community and expanding existing volunteer opportunities to reflect the new
reality of how people want to be involved in their community.
ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN:
This proposal is linked to the Community Priority of Leadership and Community Engagement.
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2015 BUDGET STRATEGIC INITIATIVES ISSUE PAPERCIC;LiC1:�
ISSUE: SI 07— Increased Street Level Special Events Programming
FUND: Operating
DEPARTMENT: Chief Administrator Office— Economic Development
PREPARER: Cory Bluhm, Manager Downtown Development
Jeff Young, Manager Special Events
BUDGET IMPACT: $23,588 tax
OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE:
With the recent success of street-level programming (e.g Art Markets, Food Truck Festivals,
Summer Lights, Night\Shift, Days of#KWAwesome, etc.), Economic Development is under
increased community pressure to grow this style of programming.
Street-level event programming is a growing North American trend. It differs slightly from
traditional festivals—events tend to be shorter (1 day/night), are more organic in nature (i.e. a
collection of community groups coming together, often not experienced event organizers), and
occur on streets or in parking lots as opposed to Civic Square or Victoria Park. These events
tend to be niche specific, but often targeted at the key demographics of the Downtown. As
such, they are playing an even more influential role in the growth/improvement of Downtown's
brand and image.
BUDGET IMPACT:
Funding of$23,588 ($5,440 to Downtown Development and $18,148 to Special Events) is
required to expand street level programming in 2015 and beyond based on the City's
experience in 2014.
RATIONALE/ANALYSIS:
On average, a street-level event (including all program costs, fees, internal charges, and
revenues), costs between $1,000-$5,000 depending on the scale and scope or programming.
An increase in funding of$23,588 would enable Economic Development to deliver up to five
additional street-level events per year, which would represent up to a 50% increase in
programming. In most cases, a large portion of this funding is reinvested in the community as it
pays for local musicians, artists, exhibiters, etc. who perform as part of the event. It also
returns to the City by way of licensing fees and cost recovery for internal services.
ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN:
This proposal is linked to the Community Priority of Dynamic Downtown.
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2015 BUDGET STRATEGIC INITIATIVES ISSUE PAPERCIC;LiCJ:�
ISSUE: SI 08— Increased Funding for the Leisure Access Card
FUND: Operating
DEPARTMENT: Community Services—Community Programs & Services
PREPARER: Michael May, DCAO Community Services Department
BUDGET IMPACT: To be determined
OVERVIEW OF THE PROPOSED STRATEGIC INITIATIVE:
Increase funding for the Leisure Access Card (LAC) to allow more low-income residents to
participate in recreational programs across the city.
BUDGET IMPACT:
To be determined.
RATIONALE/ANALYSIS:
Over the past several years, the City has been implementing a multi-year plan to increase the
budget for LAC. As part of that multi-year funding plan, staff has recommended an 11%
increase ($16,000) to the program budget from 2014 to 2015. The average actual cost of the
LAC program for the past five years (2010-2014) is $148,000, while the proposed 2015 LAC
budget is $161,969. Only 2014 has seen actual costs greater than the proposed 2015 budget
for LAC. If Council approves this increase, the City will have added $67,000 in funding to the
LAC program since 2010.
Regardless of budget, no one who qualifies for the LAC program and has requested assistance
has ever been denied access to the LAC program due to a lack of funding. Staff has regularly
been successful in securing funding assistance from private partners (e.g. Jumpstart) or have
sought out funding within existing budgets to offset any cost overrun related to LAC.
During the Finance and Corporate Services Committee's deliberations on 2015 user fees
(December 8, 2014), Councillor Etherington gave notice of his intention to bring forward the
following motion as part of the 2015 budget process:
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 2014 and is expected to go still higher in 2015 and,
Whereas the program serving low-income families experienced a$16,000 shortfall in
2014 after its budget was exhausted and,
Whereas assistance from private funders is increasingly precarious in today's economy
where residents still feel the impacts of unemployment,
Be it resolved that, in addition to the recommended$16,000(11 per cent) increase for
the Leisure Access Card program in 2015, an additional$10,000 be budgeted for the program.
This means the total budget increase for the program in 2015 will be$26,000, increasing the
total LAC budget to approximately$172,000.
ALIGNMENT TO THE CITY OF KITCHENER STRATEGIC PLAN:
This proposal is linked to the Community Priority of Quality of Life.
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