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HomeMy WebLinkAboutCouncil Minutes - 1998-01-19 SCOU NCIL\1998-01-19-SPE JAN UARY 19, 1998 SPECIAL COUNCIL MINUTES CITY OF KITCHENER A special meeting of City Council was held at this date with all members present except Councillors K. Taylor-Harrison and John Smola. Notice of this special meeting had previously been given in accordance with Chapter 25 of the City of Kitchener Municipal Code. Mayor Zehr welcomed Mr. Gary Leadston, Member of Provincial Parliament for the Kitchener-Wilmot Riding and Mr. Wayne Wettlaufer, Member of Provincial Parliament for the Kitchener Riding. Mr. Dave Maxwell, Executive Assistant to Mr. Wettlaufer, was also in attendance. Mayor Zehr thanked everyone for attending this special meeting of City Council to discuss various issues but in particular the impacts of provincial downloading. Making use of a slide presentation, Mayor Zehr provided information regarding the impact of Provincial downloading on the City of Kitchener. Initially, it was stated that the swap of responsibilities between the Province and Municipalities would be revenue-neutral. In reality, it now appears that the Regional Municipality of Waterloo will have to find $18,970,000 for this swap to be revenue-neutral. The City of Kitchener will have to find $5,318,000 of the Regional amount. A series of slides were presented illustrating the impact on the City of Kitchener tax levy taking into account changes regarding the education tax and reductions in Provincial grants. The figures provided compared years 1992 to 1998 inclusive. Mayor Zehr advised the Members of the Provincial Government in attendance that between 1992 and 1998 the City of Kitchener has introduced efficiencies, new revenues and restructuring which amounted to savings of $11.5 million or 16.82% on the tax bill. It was further noted that during the same period of time, Provincial grants have been reduced by approximately 20.6%. Mayor Zehr pointed out that the Provincial position has been that municipalities can reduce costs by approximately 3.2% in 1998. In this regard, Mayor Zehr pointed out that over the last several years, the City of Kitchener has accomplished the following: $750,000 saved through staff restructuring zero percent wage increases for three years during the Social Contract closing of the major Fleet facility with an annual savings of $500,000 many years of energy efficiencies resulting in savings of approximately $922,000 per year general reductions to departmental budgets increased uses fees of 5% per year for two years in a row Mayor Zehr indicated to the Members of the Provincial Parliament that he took exception to statements attributed to the Minister of Finance, the Honourable Ernie Eves, which were to the effect that many municipalities are still utilizing a 50's-60's mentality. When questioned by Mr. Leadston, Mayor Zehr advised that all the efficiencies0000 to which he referred have taken place since 1992. In response to Mr. Wettlaufer, Mayor Zehr advised that Fleet Management will be consolidated into other facilities and the existing buildings will be sold or leased. Concern was expressed that final assessment figures are not yet available and policies on payments in lieu of taxes have not yet been determined. The finalization of these two points could have an impact on the City of Kitchener of up to $1,000,000. The Provincial formula suggests that the City of Kitchener should be able to reduce its expenditures by approximately 3.2%. It was suggested that this formula and the resulting figures are unrealistic. Mayor Zehr suggested that in order to comply with the Provincial formula, the City of Kitchener will have to either increase taxes by 8.4% or reduce services by $5,318,000 or a combination of both. Mayor Zehr expressed concern that it would appear that the Province has not listened to many warnings which were forthcoming from various Provincial organizations. It was suggested to the Members of Parliament in attendance that while the City of Kitchener still has work to do, they have SPECIAL COUNCIL MINUTES REPORTS TO BE CONSIDERED BY COUNCIL MONDAY, OCTOBER ~0, 1997 -3- CITY OF KITCI:IENER JAN UARY 19, 1998 -3- CITY OF KITCHENER been very efficient over the years, but because of Provincial downloading the 1998 budget shows an increase at the present time. Mayor Zehr suggested that it would seem to be appropriate for the Province to give this situation further consideration. Councillor G. Lorentz noted that user fees are going up and community grants are going down and it is difficult to make further reductions to the monies available to local organizations. The City of Kitchener intends to become self-sufficient and operate without Provincial funding; however, it is very difficult to make this step all in one year. Councillor Lorentz also expressed the view that amalgamations in the Regional Municipality of Waterloo would not result in the savings which are being suggested by the Provincial Government. In this regard, Mr. Wettlaufer expressed the view that $30,000,000 could be saved if there were only one municipality in the Region of Waterloo. Mr. Wettlaufer also volunteered to sit down with the City's Finance and Administration Committee and review the 1998 Operating Budgets with them. Mr. Wettlaufer expressed the opinion that finding 3.2% in savings would be an achievable goal. Councillor T. Galloway pointed out that local subsidies are provided to the Centre In The Square, Kitchener Transit and the Auditorium and pointed out that this type of activity is appropriate for the municipal level of government. Mr. W. Wettlaufer suggested that the amount being spent by various levels of government could be reduced if areas of possible savings were discussed with neighbouring municipalities. In this regard, Mayor Zehr pointed out that discussions of this type are actively being pursued with the City of Waterloo. It was also pointed out that at the present time, Fire Service Dispatch for the Cities of Kitchener, Waterloo and two abutting Townships have been centralized. Councillor J. Ziegler pointed out that the City of Kitchener is required to follow rules established by the Provincial Government. In this regard, it was suggested that unless the Province changes the existing rules, there are certain changes which cannot be made. As an example, Councillor Ziegler suggested that a payout to a maximum of six months sick leave will be required when an employee retires unless the existing Provincial rules are changed. Councillor Ziegler also questioned the savings achieved by amalgamation and suggested that one large government in the Regional Municipality of Waterloo would result in a larger staff and costs would no doubt increase. It was also pointed out that if the City of Kitchener were to give up control of water distribution, the costs to its residents would increase even though there may be savings to the residents of the abutting small rural municipalities. Councillor Ziegler suggested that to say that a one-tier government in the Regional Municipality of Waterloo is the answer, is in his opinion, false. Councillor G. Lorentz noted that the City of Kitchener owns its own gas utility and suggested that the implementation of a one-tier form of government would result in this utility being sold to a private enterprise. It was suggested that this course of action would likely result in an increase in the cost of gas to the Kitchener taxpayer. Mr. G. Leadston referred to earlier comments regarding statements by the Minister of Finance and suggested that any concerns in this regard should be forwarded directly to Mr. Eves. It was noted that municipalities are being requested to cut 3.2% off of their existing budgets; however, at the Provincial level, reductions in excess of 10%-15% have been required. It was suggested to Members of Council that the Provincial Government do not expect everyone will support their Plan of Action. In this regard, Mayor Zehr suggested that it was inappropriate to try and equate the cuts made by the Province with those being required of municipalities because municipalities are being asked to make their 3.2% cuts all in one year. Councillor T. Galloway suggested that the population generally supports what the Province is trying to do; however, in his opinion the process is evolving too quickly. Councillor Galloway also suggested that it is unfortunate that municipalities are being given no credit for steps they have taken in the past to improve their financial situation. It is also unfortunate that the Provincial formula for change is not well understood and it is unfair for this formula to be imposed on expenses such as those incurred by places such as the REPORTS TO BE CONSIDERED BY COUNCIL MONDAY, OCTOBER ~0, 1997 -4- CITY OF KITCI:IENER Centre In The Square. SPECIAL COUNCIL MINUTES JAN UARY 19, 1998 -4- CITY OF KITCHENER Councillor Galloway expressed concern and questioned the fairness of Regions with higher education taxes receiving significantly larger benefits than is the case in the Regional Municipality of Waterloo. In this regard, Mr. W. Wettlaufer suggested that every municipality feels there is some area in which they have not been dealt with fairly. Councillor T. Galloway noted that while the City of Kitchener makes up approximately 40% of the population of the Regional Municipality of Waterloo, it appears it will be required to pick up approximately 70% of the additional costs. For this reason, it was suggested that the downloading of social programs to the local tax base would seem to be inappropriate and these programs should be paid for by ability to pay taxes such as taxes based on income. Councillor J. Haalboom suggested that cultural and recreational groups will suffer if municipalities are forced to reduce the monies made available for grant purposes. Many of these groups are made up of volunteers and accordingly, Councillor Haalboom suggested that it was inappropriate to reduce grants and request that user fees be increased. When questioned by Councillor Haalboom, Mr. Wettlaufer suggested that no tax relief will be provided to help sports and cultural groups until such time as the Provincial and Federal debt levels have been significantly reduced from where they stand at the present time. Mr. W. Wettlaufer thanked Council for inviting him to attend this meeting but indicated that he would have to leave at this time to attend another engagement. Mayor C. Zehr indicated that City Council is very serious about the impacts created by the Provincial downloading program and the choices that municipalities will have to make to either increase taxes or cut services. Mayor Zehr pointed out that if the Provincial factor is applied to discretionary spending the percentage increase is phenomenal. Mayor Zehr suggested that the Province is moving far too quickly in their attempts to implement the changes within one year. When questioned by Councillor B. Vrbanovic regarding recent activities in the new City of Toronto, Mr. W. Wettlaufer advised that the Provincial government did not have any control over these activities and the transition team should have paid more attention to what was taking place. Councillor Vrbanovic pointed out that Kitchener City Council has been progressive and over the past number of years have reduced their expenses by approximately 10%. This fact is totally ignored by the Province and the City of Kitchener is being forced to find another 3.2%. On the other hand, municipalities which have taken no such cost-cutting actions are now being asked to reduce their expenditures by 3.2%. Mr. J. Gazzola advised the members of Parliament that City of Kitchener have dealt with their debt reduction problems in the past and do not have a problem at the present time. It appears, however, that the senior levels of government do have debt problems and are trying to download some of these problems to the lower levels of government. Mr. Gazzola suggested that the Provincial government is moving too fast and the reductions being suggested for one year cannot be realistically handled. Mr. Gazzola noted that the Federal Government can download to the Provincial Government and the Provincial Government can download on to Municipal Governments; however, municipal governments cannot download to anyone. Mr. Gazzola expressed the view that the City of Kitchener will not be able to cut services to the extent of 8% of their budget and questioned what the Provincial Government's reaction would be to a tax increase. In this regard, Mr. Wettlaufer suggested that the Provincial Government would not react positively to a municipal partner implementing a tax increase of 8%. Councillor C. Zehr suggested to Mr. Wettlaufer that the key to having a successful partnership is to have full discussion prior to implementation. This has not occurred with this Provincial program. Mr. W. Wettlaufer, Member of Provincial Parliament for Kitchener, excused himself from the meeting at this time. REPORTS TO BE CONSIDERED BY COUNCIL MONDAY, OCTOBER ~0, 1997 -5- CITY OF KITCI:IENER When questioned by Councillor Jake Smola, Mr. G. Leadston suggested that the Provincial Government would likely have its budget in a balanced position by approximately the year 2000. Councillor Jake Smola indicated his support for actions being taken by the Provincial Government, but suggested that at the present time, they are simply moving too fast. In this regard, Mr. Leadston suggested to members of Council that it is likely that there will be a slow down in major Provincial Government changes over the next 2 1/2 years. SPECIAL COUNCIL MINUTES JAN UARY 19, 1998 -5- CITY OF KITCHENER Councillor M. Yantzi noted that in the past, the Provincial Government established guidelines and then provided municipalities with financial assistance to administer these guidelines. Now it appears that the Provincial Government still wants to establish the guidelines, but leave the funding entirely to the local municipality. Councillor Yantzi expressed the view that it would appear that the Provincial government has taken the position of blaming the poor for being poor. Mr. Leadston suggested that this was not the case. Councillor Yantzi noted however, that people are singled out for taking advantage of the welfare system; however, similar action is not taken to single out anyone who is found guilty of avoiding the payment of sales taxes. Mr. J. Gazzola suggested that it would appear that the Provincial Government has not taken the time to follow anything through to a conclusion to determine what final impact will be created. Mr. Gazzola also indicated that he did not concur with the views of some members of the Provincial Government who obviously have the view that bigger is better when it comes to local government. Mr. Gazzola indicated his support for the proposed changes to the assessment system and suggested that in the long-term there will be benefits. In the short-term; however, there will be some who are adversely affected in a serious way. Mayor C. Zehr pointed to Mr. Leadston that the City of Kitchener has taken many positive steps over the past number of years which have not been taken in other municipalities. He suggested therefore, that it would seem to be somewhat unfair that the City of Kitchener is being forced to take the same cost-cutting steps as are being required of municipalities which have done nothing in the past. Mr. Leadston referred to the question of providing funding to cultural and recreational organizations and suggested that additional funding will be available with the establishment of charity gaming halls. In this regard, Mayor Zehr pointed out that a large majority of the money achieved from charity gaming halls will be going directly into the General Fund of the Province. Mayor Zehr questioned whether anyone at the Province has looked at the recent decision of the British Columbia Supreme Court which indicates that the Province cannot receive any monies raised through charitable gaming halls. In this regard, Mr. Leadston advised that this decision is being reviewed; however, at the present time there is some question as to whether or not it would apply in the Province of Ontario. Mayor Zehr requested Mr. Leadston to provide the City of Kitchener with information regarding the effect of the British Columbia ruling on the establishment of charitable gaming halls in the Province of Ontario. Mayor Zehr advised those in attendance that a series of Health Care Forums will be held on January 22 and 29 and February 12. As a result of these forums, a detailed presentation will be made to the Provincial Government. Councillor J. Haalboom noted that the Provincial Government has discontinued the use of photo radar on Provincial highways but questioned whether or not they would support the use of this equipment to control speeding on local residential streets. In this regard, Mr. Leadston indicated that personally he would have no difficulty in allowing local Councils to implement the use of photo radar to control speeding. Councillor J. Ziegler pointed out, however, that in order for photo radar to be effective and fair, it must be able to identify the driver. Councillor Haalboom suggested to Mr. Leadston that the Provincial Government give consideration to providing financial assistance for the implementation of traffic calming measures. REPORTS TO BE CONSIDERED BY COUNCIL MONDAY, OCTOBER ~0, 1997 -6- CITY OF KITCI:IENER Councillor B. Vrbanovic suggested to Mr. Leadston that the Provincial Government consider changes to the Municipal Act which would make it possible for municipalities to become involved in commercial activities such as the development of computer programs. The existing Municipal Act does not permit this type of activity. Mr. Leadston requested Councillor Vrbanovic to detail his concerns and suggestions in writing and forward them to him. Councillor Vrbanovic agreed that he would follow up in this regard. SPECIAL COUNCIL MINUTES JAN UARY 19, 1998 -6- CITY OF KITCHENER Councillor T. Galloway suggested that the Provincial Government should take steps which would allow Cities such as Kitchener and Cambridge to introduce an Inner City Transit Service without having to involve a private sector carrier. Mr. Leadston indicated that he would support efforts in this regard. Councillor Galloway also noted that presently there is a Development Charge freeze pending the implementation of new legislation. Mr. Leadston advised that this and other legislation is being reviewed and regulations are being developed. Councillor Galloway indicated that suggestions have been made that the Development Charge legislation may be held up indefinitely and if this is the case, he suggested that the existing freeze should be lifted so that municipalities can consider new initiatives such as money for community trails. Mayor Zehr requested Mr. Leadston to provide Council with a response regarding the status of the Development Charge legislation. Mayor Zehr requested Mr. Leadston to provide information regarding the continuation of the Elderly Persons Centre Program and the Home Support Long Term Day Care Program. When questioned by Councillor Jake Smola, Mr. Leadston advised that improvements to the Highway 8/Conestoga Parkway Interchange are still a high priority; however, he was not sure when the work would actually be undertaken. Councillor B. Vrbanovic advised that it is his understanding that the Province is not questioning the need for a new cloverleaf but rather the need to increase the number of lanes. Mr. Leadston was asked to look into this entire work program and provide an answer to Members of Council. Mayor Zehr thanked Mr. Leadston for his attendance at this meeting and indicated that he would look forward to a response to the questions raised at an early date. Moved by Councillor B. Vrbanovic Seconded by Councillor M. Yantzi "That an in-camera meeting of City Council be held at 6 p.m. on January 19, 1998 to consider a matter subject to solicitor-client privilege." Carried. On motion the meeting adjourned. REPORTS TO BE CONSIDERED BY COUNCIL MONDAY, OCTOBER ~0, 1997 -7- CITY OF KITCI:IENER MAYOR CLERK