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HomeMy WebLinkAboutFinance & Admin - 1992-12-18FAC\1992-12-18 FINANCE AND ADMINISTRATION COMMITTEE MINUTES DECEMBER 18, 1992 The Finance and Administration Committee met this date, commencing at 9:15 a.m., under the Chairmanship of Alderman C. Zehr with the following members present: Mayor D.V. Cardillo, Aldermen B. Stortz, T. Galloway, G. Lorentz, J. Smola, M. Wagner, C. Weylie and M. Yantzi. Alderman J. Ziegler and G. Leadston were in attendance for part of the meeting. Others present: Messrs. T. McKay, J. Gazzola, L. Ryan, J. Wallace, R. Freeborn, F.S. Graham, R. Arnot, T. Clancy, P. Beaudry, B. Stanley, K. Baulk, J. Webster, D. Snow, W. Beck, B. Gulliver, R. Miller, J. Nelson, S. Klapman, T. McCabe, T.B. Stanley, J. Witmer, G. Sosnoski, Ms. S. Frenette and Ms. B. Aikenhead. The purpose of the meeting was to further consider the 1993 Operating Budget as recommended by the Administrative Review Committee. 1. 1993 OPERATING BUDGET The Committee was in receipt of a summary of net reductions to date as well as highlights of the Department budgets under consideration. Alderman Zehr asked that any delegations wishing to address Council regarding the budget appear at the January 11, 1993 meeting. He further advised that adjustments have been made to all Department budgets as a result of a reduction in the projected Hydro rate increase. Mr. Gazzola reviewed the Operating Budget for the Legal Department and the changes made by the Administrative Review Committee, noting a proposed 2.1% increase. Mr. McKay questioned the pay increase under a Department employment contract in view of the fact that the incumbent has been on maternity leave. Mr. Wallace questioned whether a decision has been made in the form of a general City policy to direct that pay increases be delayed under such circumstances. He requested an answer in this regard before a decision is made. Alderman Zehr asked that this issue be referred to the Human Resources Division for comment. On a motion by Alderman C. Weylie - It was resolved: "That the 1993 Operating Budget for the Legal Department be approved." Mr. Gazzola reviewed the Operating Budget for all Divisions of the Parks and Recreation Department and the changes made by the Administrative Review Committee. A brief discussion took place concerning the Department's advertising budget, and Alderman Leadston expressed an interest in knowing the amount of budget funds remaining after a reduction is made by the Administrative Review Committee. He asked whether an additional $5,000.00 reduction in the advertising budget of the Recreation and Programs Division would have an adverse effect on the Kitchener Farmers Market. Mr. Arnot replied in the affirmative, indicating that at present Market vendors pay half of the cost of advertising and noted that this budget has been frozen at the 1992 funding level. Alderman Yantzi agreed indicating that any reduction at this time would be unfair to vendors. Alderman Wagner asked that following the budget process he be provided with the total wages paid by the City in each of the areas involving contract and part-time positions and any related policies. He suggested that it may be appropriate to review these statistics prior to considering the 1994 budget. Alderman Leadston questioned whether further reductions could be made to the part-time wages budget of the Department. Mr. McKay replied that Parks and Recreation has the largest part-time budget in the City, and the use of such positions reduces operating costs in view of the fact that most of the programs operate throughout the day, year round. Mr. Arnot noted that the bulk of the part-time wage reductions have been made in Aquatics. 1993 OPERATING BUDGET (cont.) FINANCE AND ADMINISTRATION COMMITTEE MINUTES - 110 - DECEMBER 18, 1992 Mr. Gazzola noted that the Department is recommending a 5% increase in pool fees. Mr. Arnot added that two 5% increases would apply to swimming instruction effective January 1 and June 1, 1993. Mr. Arnot noted the elimination of three youth drop-in centres required to meet the $20,000.00 reduction requested by Administrative Review. He circulated a report dated December 1, 1992 concerning the Community Youth Summer Program, which contains a number of staff recommendations. Alderman Leadston asked whether there had been any discussion with the Neighbourhood Associations regarding their willingness to assist in operating the programs. Mr. Arnot replied that in his opinion this would be unfair given their other responsibilities, however, the Division is contacting local service clubs in this regard. Alderman Leadston suggested that revenue raised by community associations through special events could possibly be used for neighbourhood based projects. Mr. McKay clarified that the reduction under discussion has already been made, and in the event the Committee does not wish to reduce service in this area they should add an additional $10,000.00. Alderman Weylie referred to limited use of the facilities at the Victoria Hills Community Centre and suggested that these could be utilized for more socially oriented events and meetings. She referred specifically to repeated requests from the John Howard Society. Alderman Stortz noted that this issue had been previously discussed by the Committee and it was his understanding staff were to use more flexibility in considering non-recreational uses at community centres. Mr. Arnot replied that to the best of his knowledge this direction had been implemented, and agreed to investigate the particular instance referred to by Alderman Weylie. Moved by Mayor D.V. Cardillo - "That $10,000.00 be added to the Youth Program portion of the 1993 Recreation and Programs Division Operating Budget." Alderman Lorentz suggested that a decision be made as to whether Council, given the current economic climate, intends to cut services. He pointed out that if this is the case, all Department budgets should be examined and not Parks and Recreation alone. The motion by Mayor D.V. Cardillo to add $10,000.00 to the Recreation and Programs Division budget was voted on and CARRIED. Alderman Lorentz indicated his willingness to put forward a motion that no service reductions be made, in the interests of opening discussion on the matter. Alderman Leadston stated that if there is no desire to review Department budgets line by line, Council should agree to a 2% increase and direct staff to make the necessary reductions to meet this overall target. Staff circulated a report from Mr. P. Beaudry dated December 1, 1992 containing recommendations for cost reductions involving Indoor and Outdoor Aquatic Facilities and Programs. Mr. Graham referred to the recommendations in the above report noting that staff view these not as service reductions but service efficiencies. Mr. Beaudry reviewed the recommendations in his report, noting that they involve a different philosophy of service delivery. He explained that pools have been traditionally viewed as servicing a specific geographic area of the City, however, changing circumstances indicate that providing a service on a City wide rather than a neighbourhood basis warrants consideration. Mr. Beaudry then reviewed Recommendations 1 to 7 in his report on Indoor Aquatic Facilities and Programs. Alderman Wagner asked whether the measures recommended would actually discourage use and therefore necessitate further cuts in future. Mr. Beaudry replied that this is a possibility, however, he noted that a 50% attrition rate has been used in calculating the impact of the recommendations. In response to a question from Alderman Galloway, Mr. Beaudry advised that none of the recommendations would have an effect on 1. 1993 OPERATING BUDGET (cont.) the Fall program registration. He added that the major impact would be on Winter, Spring and Summer pre-registrations. Alderman Lorentz asked whether volunteers could be used to assist with pre-registration and Mr. Beaudry replied that the Finance Department may not agree to have volunteers collecting money on behalf of the City. He added that this option may merit investigation, though this has not been pursued in the past. Mr. Arnot agreed to investigate the use of volunteers. FINANCE AND ADMINISTRATION COMMITTEE MINUTES - 111 - DECEMBER 18, 1992 On a motion by Mayor D.V. Cardillo - It was resolved: "That Recommendations #1 - 7 (inclusive) in the report of Mr. P. Beaudry dated December 1, 1992 relative to service efficiencies for Indoor Aquatic Facilities and Programs be adopted for implementation either during or prior to the Spring of 1993, and further, That the exact amount of the budget reduction be identified by the Finance Department and incorporated in the 1993 Operating Budget of the Recreation and Programs Division." Alderman Lorentz asked that a progress report be submitted for consideration by the Community Services Committee in June of 1993. Mr. Beaudry reviewed his report on Outdoor Aquatic Facilities, noting that staff are recommending the implementation of Options 1, 2 and 3 as outlined in his report of December 1, 1992. It was noted that he does not recommend closing any outdoor facility for in excess of three weeks. Mr. Beaudry noted that staff do not support Option #4, which would involve the closing of selected outdoor pools in 1993. On a motion by Mayor D.V. Cardillo - It was resolved: "That Option #3 (reduction in weeks of operation at Harry Class, Idlewood and Wilson outdoor pools) as outlined in the report of Mr. P. Beaudry dated December 1, 1992 be adopted for an estimated annualized saving of approximately $6,000.00, and the 1993 Operating Budget for the Recreation and Programs Divisions adjusted accordingly." Alderman Zehr noted that a report had been previously circulated concerning the conversion of two part-time positions to two full-time positions, with consideration referred to the Operating Budget deliberations. Mr. Arnot suggested that the corresponding budget amount can be reduced by $12,000.00 due to a delay in the opening date. Alderman Galloway expressed concern that the Victoria School Centre would be open for longer hours and more days than any other community centre. Mr. Arnot replied that the programming concept for this facility differs from other community centres in that it must address the needs of seniors and the adjacent communities. In response to a question from Alderman Zehr, Ms. Aikenhead advised that the square footage to be programmed in the new centre will increase substantially and that the seniors program would include an option for opening the facility on weekends. Alderman Galloway expressed concern over the proposed hourly wage for the attendant who would be required to open and operate the centre on Saturday. He pointed out that this may prompt similar requests from other community centres. Mr. Graham stated that staff will attempt to address Alderman Galloway's concerns during the coming year. Mr. Gazzola reviewed the Operating Budget for the Business Facilities Division, noting an 18% increase, principally due to revenue shortfalls. Alderman Leadston inquired as to the status of the professional soccer club and Mr. Stanley indicated that at present there is no financial arrangement, though the club owes the City some money for facility rental. He added that the club has been asked to consider joining another Soccer league at a reduced cost. 1. 1993 OPERATING BUDGET (cont.) Alderman Leadston inquired as to revenue from rink board advertisements in City facilities and Mr. Arnot replied that staff will submit a report for consideration by the Community Services Committee on January 4, 1993. Mr. Gazzola reviewed the Operating Budget for the Parks and Property Division, noting the major impact of market value assessment on Budd Park. Mr. McKay clarified that staff are meeting with Budd Automotive to request an alternative to the present lease arrangement. Alderman Zehr questioned the $4,300.00 amount allocated to equipment for Rosenberg Park. Mr. Clancy explained that staff are attempting to make this and other parks self sufficient and are FINANCE AND ADMINISTRATION COMMITTEE MINUTES - 112 - DECEMBER 18, 1992 taking steps to equip each facility in order to reduce the travel time of the mobile trimming crews. He stated that expanding the equipment pool to allow existing staff to do the required work is more economical and efficient. Alderman Leadston asked that a summary of all positions which are being converted from part to full-time be available on or before Budget Day. Mr. Gazzola reviewed the Operating Budgets and Statements of Revenue and Expenses for the Rockway and Doon Golf Courses. On a motion by Mayor D.V. Cardillo - It was resolved: "That the 1993 Operating Budget for all Divisions of the Parks and Recreation Department be approved, as amended." The Committee adjourned at 11:40 a.m. to attend a graduation ceremony for the new City Fire Fighters, and reconvened at 1:35 p.m. Mr. Gazzola reviewed the Operating Budget for all Divisions of the Transportation Department and the changes made by the Administrative Review Committee. Alderman J. Ziegler entered the meeting at this time. Mr. J. Nelson was in attendance on behalf of CUPE Local 791 concerning a recommendation to contract the coin counting operation. Alderman Zehr reminded the Committee of a previous staff report and a presentation on behalf of the CUPE Local. Mr. Webster asked that consideration of this item be deferred to Council Budget Day on January 22, 1993 pending further discussion of the proposed initiatives with the Finance Department. He advised that a report will be circulated to Council before Budget Day. The Committee generally agreed to the request and Mr. Nelson indicated his willingness to work with Transportation and Finance staff. With regard to the Transit Division budget, Mr. Gazzola noted that route revenue is not keeping pace with inflation. Mr. McKay also noted that the Transit agreement with the City of Waterloo expires this year. Alderman Smola requested the dollar amount remaining in the advertising account and Mr. Beck replied that $85,000.00 has been allocated to promote the Transit system, an amount significantly lower than in previous years. Alderman Ziegler suggested that with regard to all Department budgets it would be helpful to see the remaining budget amounts which correspond to changes made by the Administrative Review Committee. A general discussion took place concerning initiatives to promote ridership. In response to a question from Alderman Galloway, Mr. Webster advised that the industry standard for advertising expenditures is approximately 1%, which in Kitchener's case would translate into a $200,000.00 advertising budget. A brief discussion took place concerning the City's membership in the Canadian Urban Transit Association (CUTA) and in response to a question from Alderman Weylie, Alderman Zehr asked that staff investigate the possibility of savings as a result of combining the Project Lift and City memberships. 1. 1993 OPERATING BUDGET (cont.) Alderman Stortz noted that parking revenues seemed to have stabilized and Mr. Snow agreed, noting that it also appears they are rising. He added that the first hour free parking has had a substantial impact on the Parking Enterprise. Mr. Snow also pointed out that a number of parking lots have been impacted by fair market value assessment, with the dollar amounts increasing from approximately $306,000.00 to $357,000.00. Mr. Gazzola also advised that the Administrative Review Committee is recommending that the Parking Enterprise dividend be eliminated in 1993. On a motion by Mayor D.V. Cardillo - It was resolved: "That the following parking rate changes be adopted: Item 1992 1993 Effective Date FINANCE AND ADMINISTRATION COMMITTEE MINUTES - 113 - DECEMBER 18, 1992 Lot 19 - Centre In The Square Theatre Rate $ 2.50 > $ 3.00 Mar. 1, 1993 Lot 5 - Eby St. Monthly Rate $50.00 > $45.00 Feb. 1,1993" Mr. Gazzola reviewed the six year projection for the Parking Enterprise. Mr. Snow advised that 421 parking meters have been damaged over a six month period which are not covered by the City's insurance, and noted that the $120,000.00 budget amount allocated does not reflect the corresponding loss of revenues. Mr. McKay questioned whether the possibility advertising on King Street parking meters has been investigated. Mr. Snow replied in the affirmative indicating that staff do not feel this is appropriate due to a number of potential problems. In response to a question from Alderman Wagner, a brief discussion took place concerning on-street parking with overnight permits. Mr. Snow reminded the Committee that a report had been previously submitted indicating that staff do not feel this would be a significant revenue generator. He also referred to problems involving snow removal the fact that residents must by law approve of on-street parking. Mr. Gazzola expressed the opinion that the $200,000.00 loss in 1992 relative to one hour free parking should be treated as a grant to the Parking Enterprise rather than an operating expense. He noted, however, that this would have an impact on the taxpayer. He expressed concern that the City cannot continue to operate this enterprise at a loss. Mr. Gazzola pointed out that the grant option would be consistent with the recommendation in a recent consultant's report relative to the Farmers Market. Alderman Stortz reminded the Committee that prior to first hour free parking, the City had lost parking revenue on the second and third hours. Alderman Zehr asked that the Parking Enterprise deficit be flagged for further consideration on Budget Day. Mr. McKay pointed out that there is already a dual impact on the taxpayer in 1993 as a result of removing the dividend and incorporating a $240,000.00 deficit as a result of delays in the processing of parking fines by the Province. He suggested that Council examine the possibility of a grant in 1994. On a motion by Alderman B. Stortz - It was resolved: "That the 1993 Operating Budget for all Divisions of the Transportation Development Department, including the Parking Enterprise, be approved." Mr. Gazzola reviewed the Operating Budget for the Planninq and Development Department and the changes made by the Administrative Review Committee, noting a net reduction of 5.1%. He noted that $6,000.00 for Community Mediation Services was removed from the budget during the Administrative Review. 1. 1993 OPERATING BUDGET (cont.) Mr. Klapman reported on use of the mediation service in 1993. He noted that the City has not used the full quota of 20 referrals in the last calendar year, and that staff are presently authenticating a number of referrals made indirectly by individuals outside of the City administration. He added that the Program is generally well used and urged the Committee to reconsider budgeting the $6,000.00 amount in 1993. Alderman M. Yantzi disclosed a conflict of interest and abstained from all voting and discussion concerning Community Mediation Services (CMS) as this program is related to the agency which employs him. Alderman Ziegler expressed concern over the method of pricing whereby a flat fee of $4,000.00 is paid as well as an additional charge for each referral. On a motion by Alderman M. Wagner- It was resolved: FINANCE AND ADMINISTRATION COMMITTEE MINUTES - 114 - DECEMBER 18, "That $6,000.00 be added to the 1993 Operating Budget of the Planning and Development Department relative to the Program administered by Community Mediation Services." 1992 Alderman Zehr asked that with regard to the comments made by Alderman Ziegler, Mr. Klapman investigate the basis on which the fee to the City is calculated. In response to a comment on the increase in revenue from the Housing Division, Alderman Zehr asked that Mr. Gazzola provide a copy of the budget proposal for Kitchener Housing on Budget Day. On a motion by Alderman M. Wagner- It was resolved: "That effective February 1, 1993, the City's building permit fee be increased from $9.50 to $10.00 per $1,000.00 of construction value." It was pointed out that the $20,200.00 amount budgeted for a Laneway Study had been removed from the budget. Mr. Stanley explained that Council had previously dealt with the request for a study on the long term use of lanes in the downtown. He advised that the amount budgeted relates to the hiring of two summer students to compile survey material necessary to complete the study proper. Alderman Yantzi questioned whether it was necessary for two students to undertake the survey and Mr. Stanley replied that this was done largely in the interest of safety. It was generally agreed that further consideration of funding for a Laneway Study in 1993 be deferred and referred to Budget Day pending receipt of the detailed terms of reference. On a motion by Alderman G. Leadston - It was resolved: .... That the 1993 Operating Budget for all Divisions of the Planning and Development Department be approved, as amended." Mr. Gazzola reviewed the Reserves and Reserve Funds on a line by line basis. The Committee was circulated this date with a Reserves and Reserve Funds budget dated December 16, 1992. Mr. Gazzola noted that at present the 1993 budget incorporates $1,750,000.00 from the Tax Stabilization Reserve Fund. In response to a question from Mayor D.V. Cardillo, Mr. Gazzola expressed the opinion that the Insurance Reserve Fund is the only area he would consider for reallocation. Alderman Zehr asked for information on the impact of increasing the amount of the City's deductible and Mr. Gazzola advised that he would attempt to get this information by Budget Day. 1993 OPERATING BUDGET (cont.) Alderman Zehr noted that the proposed tax increase presently stands at 2.3%, $160,000.00 short of Council's 2% target. Alderman Weylie advised of a possible reduction in revenue from the Region of Waterloo due to a decrease in the frequency of snow removal and salting on Regional roads. She added that staff were told the difference required to maintain the present standard would have to be funded by the City. Mr. Gazzola agreed to investigate. NEXT MEETING Council will formally consider the recommendations of the Finance and Administration Committee relative to the 1993 Operating Budget on Budget Day, January 22, 1993. ADJOURNMENT On motion, the meeting adjourned at 4:15 p.m. FINANCE AND ADMINISTRATION COMMITTEE MINUTES - 115 - DECEMBER 18, 1992 G. Sosnoski Manager of Corporate Records/Assistant City Clerk