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HomeMy WebLinkAboutPublic Works - 1999-05-25PWTC\199-05-25 MAY 25, 1999 PUBLIC WORKS & TRANSPORTATION COMMITTEE MINUTES CITY OF KITCHENER The Public Works and Transportation Committee met this date, chaired by Councillor John Smola, commencing at 8:40 a.m., with the following members present: Councillors J. Haalboom, C. Weylie, K. Taylor-Harrison, and G. Lorentz. Mayor C. Zehr and Councillor J. Ziegler were in attendance for part of the meeting. Others Present: Ms. J. Buckingham, Ms. P. Houston and Ms. J. Billett, and Messrs. E. Kovacs, S. Gyorffy, D. Snow, J. McBride, L. Lynch, and D. Quinn. 1. CLASS ENVIRONMENTAL ASSESSMENT - MIDDLE AND SOUTH STRASBURG CREEK The Committee was in receipt of a report dated May 11, 1999, from Mr. D. Mansell, Manager, Engineering Development, requesting re-approval of the preferred alignment for the Middle and South Strasburg Creek Trunk Sanitary Sewer pursuant to a Class Environmental Assessment report dated June 30, 1994. Mr. E. Kovacs advised that this study was previously approved in June 1994 for completion within a five year limit. He stated that the five year limit is approaching and the study is not yet complete; however, the contents of the study are still valid and are in keeping with current Class Environmental Assessment policies and procedures. Accordingly, he advised that staff are asking to renew approval to extend the study period for an additional five year term. Councillor J. Haalboom inquired if this study includes the Biehn Drive extension and, Mr. Kovacs responded that this was correct. He noted that the original plans for the study are still in tact. Councillor Haalboom also questioned how close staff are to bringing forward a development proposal with respect to this study. Mr. E. Kovacs advised that the current status of the study was unknown; however, he pointed out that, as the deadline was fast approaching, the project would be at risk and could have potential financial impacts if re-approval to extend the deadline was not granted. On motion by Councillor G. Lorentz - it was resolved: "That Council re-approve the preferred alignment for the Middle and South Strasburg Creek Trunk Sanitary Sewer between Biehn Drive and Huron Road, as was outlined in the Schedule "B" Class Environmental Assessment report dated June 30, 1994; and further, That this report be filed with the City Clerk for the mandatory 30 day public review period." METRONET COMMUNICATION SERVICE INSTALLATION The Committee was in receipt of an information report dated May 18, 1999, from Mr. L. Lynch, Manager, Engineering Rehabilitation, outlining the status of a Municipal Access Agreement between the City and MetroNet Communications Group Inc. It was pointed out that the purpose of the agreement was to allow MetroNet access to municipal right-of-ways to provide Kitchener residents with a wider range of choices in telecommunications. Mayor C.Zehr entered the meeting at this time. Mr. E. Kovacs advised that initial problems have now been overcome and resources put in place to manage this project. He stated that MetroNet has given full cooperation and agreed to all conditions to facilitate implementation of the project. Mr. Kovacs further pointed out that MetroNet's initial program is very aggressive with plans to install a 15 kilometre network of telecommunications cabling within a three month period. He advised that most of the installation will be planted under sidewalks and roadways, hooking into existing facilities, and that a full time inspector has been hired to work with the contractor. In some instances, he advised that it may be necessary to excavate; however, site inspections will be undertaken to determine the necessity prior to any excavation taking place, and, thereby, staff will be able to control and minimize disruptions to residential areas. METRONET COMMUNICATION SERVICE INSTALLATION (CONT'D) PUBLIC WORKS & TRANSPORTATION COMMITTEE MINUTES MAY 25, 1999 - 42 - CITY OF KITCHENER Councillor G. Lorentz questioned if The Centre in the Square was included in the initial program. Mr. L. Lynch responded that he had just received mapping for the area surrounding The Centre in the Square but had not yet had an opportunity to review it, and to his knowledge this area was not included in the initial program. Councillor Lorentz also noted that on the mapping provided, installation appears to extend beyond the municipal boundary and questioned if it was intended to go beyond Kitchener into Waterloo. Mr. Lynch responded that some installation will take place in the City of Waterloo but the mapping provided is only intended to outline installation taking place in Kitchener. Mayor C. Zehr inquired if this would result in some duplication of systems. In this regard, Mr. Lynch advised that in some areas duplication will be necessary as owners of existing equipment will not allow access to other utilities. Mayor Zehr further stated that this represents a major undertaking in the telecommunications area and noted that, in conjunction, Ontario Hydro is also looking at expanding its network of systems. 3. DOPWR 99-17 - ON-STREET PARKING - KENNEDY AVENUE The Committee was in receipt of a report dated May 5, 1999, from Mr. J. McBride, Manager of Traffic and Parking, requesting that parking be limited to two consecutive hours, between 8:00 a.m. and 6:00 p.m., Monday to Friday, on the south side of Kennedy Avenue between Palmer Avenue to Kent Avenue. Mr. J. McBride advised that a request had been received from an area resident to change the existing "No Parking Anytime" between 8:00 a.m. and 6:00 p.m. on the south side of Kennedy Avenue to a parking limit that would control employee parking from nearby businesses and, at the same time, provide short term parking to residents. He stated that as a result of an area survey, staff are now recommending a two hour parking time limit. On motion by Councillor G. Lorentz - it was resolved: "That parking be limited to two (2) consecutive hours, between 8:00 a.m. and 6:00 p.m., Monday to Friday, on the south side of Kennedy Avenue between Palmer Avenue to Kent Avenue; and further, That the Uniform Traffic By-law be amended accordingly." 4. DOPWR 99-18 - NOISE BY-LAW EXEMPTION - LYDIA STREET RECONSTRUCTION The Committee was in receipt of a report dated May 19, 1999, from Mr. D. Snow, Director of Transportation, requesting a Noise By-law exemption for the reconstruction of Lydia Street, between Krug Street and Cameron Street, to be undertaken by the municipality. It was pointed out that this will allow completion of the project in a timely manner, thereby reducing the impact on the residents affected by the construction. On motion by K. Taylor-Harrison - it was resolved: "That the City of Kitchener and its Contractor(s) be exempt from the provisions of Chapter 450 (Noise) of the City of Kitchener Municipal Code - Article 6 (Construction Work), during the reconstruction of Lydia Street between Krug Street and Cameron Street, and all related work between the hours of 6:00 p.m. to 7:00 p.m. during the period from May 25, 1999 to July 19, 1999." Councillor John Smola advised the Committee that this recommendation will be forwarded to the Special Council meeting for consideration this date. PUBLIC WORKS & TRANSPORTATION COMMITTEE MINUTES MAY 25, 1999 - 43 - CITY OF KITCHENER 5. GAS ENTERPRISE BUSINESS STATEGY-UPDATE The Committee was in receipt of a report dated May 18, 1999, from Mr. E. Kovacs, General Manger, Department of Public Works, outlining details of the Business Strategy for the Gas Enterprise. Mr. E. Kovacs advised that the presentation being made this date by Mr. D. Quinn, Director of Utilities, provides an update on efforts by staff to manage deregulation of the gas industry. He asked that the Committee review the presentation as background information to a subsequent report which will be tabled in June, respecting proposed rate changes to the Utility's programs. Mr. D. Quinn appeared before the Committee and pointed out that since the City undertook management of its gas supply the underlying philosophy has been to "keep the value in the City". Councillor J. Ziegler entered the meeting at this time. Mr. Quinn noted that the Utility currently operates five programs, namely: distribution, supply, rental water heaters, financing, and appliance services. He advised that, following the impact of deregulation, a monopoly still exists in distribution of gas from outside the City to within, and inefficient markets exist in the supply of gas to residents and rental of water heaters. He noted, however, that financing and appliance services do have efficient markets, in that there are a number of options available. Mr. Quinn pointed out that, unique to Kitchener, is Council's ability to set rates for gas supply instead of rates being set by the Ontario Energy Board. He stated that representation was made to the Board in this matter and an interim ruling was granted in the City's favour, provided a Provincial Gas Marketer's Licence is obtained. He pointed out, however, that the Board's ruling stipulates that cross-subsidization of gas supply and entry barriers or prohibitive switching of costs is not permitted. In this regard, he noted that staff must maintain accountability in this respect or risk having the Board's ruling revoked. Mr. Quinn stated that as long as staff can provide services at competitive rates and still maintain a sufficient rate of return, the programs will continue. However, if this is found to be unattainable, staff will need to formulate an exit strategy to protect its customers and taxpayers. Mr. Quinn then reviewed strategies for the gas supply program, noting that there are very few suppliers and it is difficult to find out what rates are being charged. He stated that this makes it difficult for customers to determine if they are receiving good value for their money and price gouging has occurred. In this regard, he noted that the Utility has entered the market to provide a viable option and is committed to a cost based service. He advised that over the first year of this program a $77,000 surplus has been realized; however, he pointed out that rates will have to increase to remain competitive but that the increases will be offset somewhat by the surplus. In regard to gas delivery, Mr. Quinn pointed out that rates have been mirrored to that of Union Gas; however, he advised that Union Gas is in the process of restructuring its rates which has resulted in a downward trend on margins available from the gas utility. To meet this challenge, he advised that staff entered into negotiations with Union Gas to unbundle delivery service. He stated that unbundling will improve margins and reduce the cost of gas delivery from Alberta into the City. At this time, through an Ontario Energy Board approval, he advised that Kitchener is awaiting a new unbundled contract for execution between Union Gas and the City. Further, he pointed out that staff are pursuing delivery options within the United States. Mr. Quinn then referred to rental of water heaters and pointed out that, again, Union Gas rates have previously been followed; however, Union Gas is looking at raising its rates 20 to 30% prior to selling to the restructured company to be known as Union Energy. He stated that staff chose not to raise rates in consideration of customer loyalty; however, this has left the Utility in a less competitive field. He advised that following an evaluation, staff have concluded a need to raise rates over the next one to two years to ensure a reasonable rate of return and maintain competitiveness in a changing market. 5. GAS ENTERPRISE BUSINESS STATEGY-UPDATE(CONT'D) PUBLIC WORKS & TRANSPORTATION COMMITTEE MINUTES MAY 25, 1999 - 44 - CITY OF KITCHENER In addition to rental of water heaters, Mr. Quinn pointed out that the Utility provides an appliance service program. He stated that integration of delivery and service business has benefited the Utility which has allowed the City to provide a Iow service rate to customers, subsidized by the delivery business. In addition, the customer benefits from highly qualified technical service. He advised that staff have tracked costs and, through this study, have concluded that rates should be increased rather than cross-subsidized. He stated that staff are also continuing to look for ways to reduce costs and improve the effectiveness of this program. Mr. Quinn then referred to the financing program, noting that the Utility has provided on-spot financing to its customers to induce conversions to gas. He stated that this program could be cross-subsidized but staff must ensure the incentives remain effective in promoting the program goals. In conclusion, Mr. Quinn stated there is a need to invest in future strategy through analyses, rate changes, and hiring of qualified technical expertise. Councillor C. Weylie questioned if there would be any capital costs associated with pursuing delivery options within the United States. Mr. Quinn responded that no capital costs were involved; however, there would likely be contractual obligations to secure transfer rights. Councillor Weylie also questioned how Kitchener is defined, either in name or boundary, in terms of the Board's ruling. Mr. Quinn stated that the Utility is defined by its current franchise, which does not include the Pioneer Tower area currently serviced by Union Gas. He stated that staff are of the opinion that it is not in the Utility's best interest to pursue a franchise in this area at this time. In addition, Mr. Kovacs pointed out that seeking a franchise in this area would be in violation of the Ontario Energy Board's ruling. Councillor Weylie referred to current discussions respecting rationalization of services and questioned if expansion of boundaries would be supported. Mr. Quinn stated that boundaries are somewhat of a grey area and pointed out that the City of Waterloo has recently renewed a 30 year contract with Union Gas. Accordingly, he advised that Waterloo would not be in a position to negotiate for a number years. He stated that staff are evaluating the potential for new business within the City and are monitoring an Ontario Municipal Board appeal by the City of Kingston to assume control of the gas enterprise of the amalgamated Township of Pittsburgh. Councillor C. Weylie inquired if there is a set term for rental of water heaters. Mr. Quinn advised that the term was non-specific prior to being changed to one to two year terms. He pointed out that if the customer chooses another supplier prior to the term expiring then they must pay for removal of the City's unit. Councillor Weylie further inquired how long the unit must be in a home before rental costs are not charged, noting that as the units age de-liming becomes a problem. Mr. Quinn advised that staff are still determining a point at which no rental fee will be incurred; however, he pointed out that the Utility does provide a de-liming service to its customers at no cost. Councillor Weylie also referred to customer complaints respecting the waste of running water before it turns hot. In this regard, Mr. Quinn pointed out that the length of time required to produce hot water is specific to the location of installation of the water heater in relation to the gas tank. He stated that the heaters could be insulated to improve performance. In addition, Mr. Kovacs pointed out that natural gas water heaters are the most cost recovery and that the option to buy outright is available; however, the owner would then be fully accountable for maintenance. Councillor G. Lorentz inquired at what point rate increases would price the Utility out of the market. Mr. Quinn stated that staff must be aware of other providers in determining rates and if the right price cannot be established staff will have to consider changes to the programs. Councillor Lorentz stated that, in order to cover costs and/or gain a surplus, there is a need to provide incentives to encourage new customers. Mr. Quinn agreed, and pointed out that the Utility is providing incentives through its financing program. He also pointed out that staff are GAS ENTERPRISE BUSINESS STATEGY- UPDATE (CONT'D) attempting to project the number of proposed new customers to provide a base margin of funding. PUBLIC WORKS & TRANSPORTATION COMMITTEE MINUTES MAY 25, 1999 - 45 - CITY OF KITCHENER Councillor J. Haalboom inquired, how the current exchange rate would affect gas delivery costs from the United States. Mr. Quinn responded that this is a factor; however, he noted that the exchange rate is rising at the moment. He also stated that fluctuation in the exchange rate provides a net upon which financial risks can be mitigated. Councillor Haalboom also questioned if the supply of gas can be obtained from more than one supplier and Mr. Quinn advised that the purchasing strategy is to have at least two suppliers and currently the Utility utilizes three suppliers. Mayor C. Zehr inquired if the Board's ruling had met expectations and Mr. Quinn responded that it had in terms of the interim ruling. He pointed out, however, that the Board appears to have misunderstood that a final ruling could wait for up to one year. He advised that staff are currently in the process of clarifying to the Board that an expedient final ruling is desired. Mayor C. Zehr questioned if the final ruling would have an impact on rate increases and Mr. Quinn stated that the surplus in the gas supply program would minimize impact to that program. However, the unbundled contract with Union Gas may be significantly impacted. Mayor Zehr cautioned that following Kingston's example in seeking an additional franchise may not be appropriate. He stated that legislation is now in place and, if disrupted, could result in adverse legislation that could affect the City's tax system. In this regard, he questioned if the need to invest really involved infrastructure or people. Mr. Quinn responded that the real investment need was in people and stated that, while the City has retained a consultant, there is a need to bring expertise in-house to maximize the potential of the program. Mr. Kovacs added that the issue of hiring expertise is complex and noted that associated costs are part of the concern. In this regard, he stated that staff will be approaching Council with respect to this issue in the near future. Councillor John Smola inquired how Kitchener-Wilmot Hydro was handling deregulation of the electrical industry. Mayor C. Zehr responded that Kitchener-Wilmot Hydro has hired a consultant to deal with this issue and noted that the volume of issues far exceeds that of gas deregulation. Mr. Kovacs noted that with Hydro deregulation it is difficult to evaluate business options as there are many that can be exercised. In comparison, he stated that there are less options available in the gas business and the consultant is primarily assisting in the purchase of gas and development of program strategies. 6. INFORMATION ITEMS The Committee was in receipt of the following information reports, namely: · Community Safety Zones · Annual Road Resurfacing and Sidewalk Repairs Councillor C. Weylie questioned if staff had resolved with Regional staff the issue of implementing a 50 kilometre speed limit along Westmount Road through to Erb Street, with respect to implementation of Community Safety Zones. Mr. J. McBride advised that the Region has been notified of this request and have been asked to investigate further. Councillor G. Lorentz noted staff's response that fines cannot be included on the signs to be posted for Community Safety Zones. In this regard, he questioned if a simple statement to the effect that if charged the fine imposed would be doubled could be included on the sign. Mr. McBride pointed out that the signs are regulated by the Province and must be exact to maintain legality. He stated that it may be possible to erect an additional sign but pointed out that the fines are varied and may not necessarily be doubled depending on circumstance. 6. INFORMATION ITEMS (CONT'D) Mr. Snow suggested that appropriate wording could be clearly set out in the promotional ads for the program. In addition, Mr. McBride suggested that following the one year trial of the program PUBLIC WORKS & TRANSPORTATION COMMITTEE MINUTES MAY 25, 1999 - 46 - CITY OF KITCHENER staff could assess the need for additional wording and, if necessary, approach the Province at that time. Following further discussion, it was agreed that staff would evaluate the need to include additional wording with respect to fines on the signs posted for Community Safety Zones at the conclusion of the one year trial period. 7. ADJOURNMENT On motion, the meeting adjourned at 9:50 a.m. Janet Billett, AMCT Committee Administrator