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HomeMy WebLinkAboutFinance & Admin - 1993-07-05FAC\1993-07-05 FINANCE AND ADMINISTRATION COMMITTEE MINUTES JULY 5, 1993 The Finance and Administration Committee met this date, commencing at 11:30 a.m., under the Chairmanship of Alderman C. Zehr with all members present. Others present: Alderman G. Leadston, Messrs. T. McKay, J. Gazzola, R.W. Pritchard, O. den Ouden, J. Wallace, L.F. Parkhouse, G. Sosnoski and Ms. L. Balfour. 1. APPLICATION TO DISCHARGE FIREARM WITHIN CITY LIMITS The Committee was in receipt of a letter from Mr. G. White, Manager, Central Ontario Exhibition, dated June 28, 1993 requesting approval to discharge a weapon using blank cartridges as part of an Exhibition performance. They were also in receipt of a letter from Mr. R.L. Gravill, Chief of Police, dated June 21, 1993 endorsing the application, as well as a copy of Chapter 745 (Guns) of the Municipal Code. On a motion by Alderman G. Lorentz - It was resolved: "That pursuant to Chapter 745 (Guns) of the City of Kitchener Municipal Code, Council grant the request of the Central Ontario Exhibition for approval to discharge a weapon using blank cartridges as part of Exhibition performances on July 6-11, 1993." 2. 1992 AUDITED FINANCIAL STATEMENT Mr. T. Reidel was in attendance on behalf of the City's external auditor, Ernst & Young. Committee members were previously circulated with a copy of the Financial Statement. Mr. Reidel gave an audio/visual presentation reviewing the Condensed Balance Sheet and details. He pointed out two areas of risk involving tax arrears, namely, delinquent business taxes, for which the City has no security, and delinquent property taxes where the property value is less than the amount owing. Mr. Reidel suggested that the percentage of tax arrears to date is average relative to other municipalities, but suggested the City could be more aggressive as regards collection of the larger arrears accounts. In reference to the financing of industrial lands, it was noted that this expenditure will be reduced to fair market value over the next five years. In reviewing the fund balances, Mr. Reidel pointed out that the Parking Enterprise deficit has grown dramatically, adding that enterprises should not be in a deficit position. He acknowledged the City's foresight in setting aside money to build up its reserve funds, noting that this softens the impact of the present economic downturn. In response to Mr. Reidel's review of expenditures, Mr. Gazzola noted that the City has been spending approximately $40,000,000.00 a year to create new facilities which themselves require operation and maintenance. Alderman Zehr pointed out that some of these are replacement facilities. Mr. Reidel reviewed the Analysis of Current Operations and noted evidence of expenditure constraint. He added that .3% on $150,000,000.00 is good management of funds. He also applauded the City's performance relative to investment income given the decrease in interest rates. Both Mr. Reidel and Alderman Zehr extended their thanks to Finance Department staff for their assistance in conducting the audit. Mr. Reidel advised that he will be submitting a Management Letter in the near future. On a motion by Alderman G. Lorentz - It was resolved: "That Council accept the Consolidated Financial Statements of the City of Kitchener for the period ending December 31, 1992 as prepared and presented by the City's external auditors, Ernst & Young." FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 51 -JULY 5, 1993 3. DELEGATION - ADULT ENTERTAINMENT PARLOUR Mr. P. Taylor was in attendance on behalf of The Pink Zone concerning their request that the City amend Chapter 504 (Adult Entertainment Parlour Location - Limitation) of the Municipal Code to allow the operation of an adult entertainment parlour for members of the gay community. The Committee was previously in receipt of Mr. Taylor's written submission and the relevant extract from the Code. Mr. Taylor noted that a one hour show is planned one night of the week and would not be advertised nor have an adverse effect on the downtown core. Alderman Stortz noted that Council had previously introduced an adult entertainment parlour by- law to regulate the number and locations of these operations. He suggested that opening the by- law relative to any further requests would be unlikely, noting that a number of similar proposals have been received in the past and been declined by Council. On a motion by Alderman B. Stortz - It was resolved: "That no action be taken on the request of Mr. P. Taylor, The Pink Zone, to amend Chapter 504 (Adult Entertainment Parlour Location - Limitation) of the Municipal Code to allow the limited operation of an adult entertainment parlour in the downtown." Alderman Zehr advised the delegation that the recommendation this date would be placed before City Council at the regular meeting of July 12, 1993. 4. AMENDMENT TO STREET VENDORS BY-LAW Mr. A. Poulos was registered as a delegation this date concerning his previous request to amend the by-law so as to expand the list of eligible products and allow specifically for the sale of souvlaki. The Committee was previously in receipt of a written submission from Mr. Poulos dated May 11, 1993 and a report from Mrs. J. Koppeser dated May 13, 1993. Alderman Stortz explained that Mr. Poulos had spoken with him prior to the meeting and it was agreed that his request would be considered in the fall of this year in conjunction with the annual review of the street vendors by-law. It was generally agreed that consideration of Mr. Poulos' request would be deferred to the fall of 1993 and the Clerk was asked to ensure that his name is added to the relevant mailing list. 5. PERMISSION TO USE CITY ITEMS - CENTRAL DISTRIBUTORS The Committee was in receipt of a report from Mr. R.W. Pritchard dated June 15, 1993 in response to the request of Mr. H.C. Miller, Manager, Central Distributors, for permission to use the City Crest and other devices in the production of souvenirs. Mr. H. Miller was in attendance this date and circulated a mock up of a shoe shine kit souvenir. Mr. Miller clarified that he is requesting permission to use the City Crest and the wording "Souvenir of Kitchener, Ontario" only and submitted a letter in this regard dated July 5, 1993. Alderman Zehr read aloud the letter submitted by Mr. Miller. He pointed out that Mr. R. Freeborn had previously spoken to the issue of souvenirs and expressed concern over the request. Alderman Ziegler put forward a motion to grant permission to use the City of Kitchener Crest only. Alderman Wagner indicated his willingness to put forward a motion of no action on the basis that the City has never granted permission to use the Crest and should refrain from doing so now. 5. PERMISSION TO USE CITY ITEMS - CENTRAL DISTRIBUTORS (cont.) Alderman Ziegler amended his previous motion so as to grant permission for use of the wording FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 52 -JULY 5, 1993 "Souvenir of Kitchener, Ontario". Mr. Miller indicated he would be satisfied with such a recommendation. On a motion by Alderman J. Ziegler - It was resolved: "That Council grant the request of Mr. H.C. Miller, Central Distributors, for permission to use the words "Souvenir of Kitchener, Ontario" on gift/promotional items." Mr. Pritchard advised that he had received another request relative to use of the design for the new City Hall and questioned whether it was Council's intention to develop a formal policy in this regard, or to deal with each request on a case by case basis. Alderman Zehr expressed the opinion that it is the intent of Council that the City retain the right to any devices relative to the new City Hall. Alderman Lorentz advised that he has no objection to the use of the City Crest provided it is done tastefully and would support a more lenient policy in this regard. Mr. McKay added that the City has always operated on the basis that its Crest is the property of the Corporation and not individual ratepayers. He encouraged the Committee to respect this practice and not allow the use of the Crest by any other organization without the permission of Council. He also suggested that any request to use photographs of the new City Hall be reviewed in one year's time, and should a policy be adopted in this regard it should not be as restrictive as the practice involving use of the City Crest. In response to a question from Alderman Zehr, Mr. Pritchard confirmed that at present the City has no formal policy on the use of the Crest, but has operated on precedence only. Alderman Zehr asked that staff give further thought to the need for a formal policy and report back to the Committee at a later date. 6. DELEGATION - PATIO REQUEST (DANDY'S RESTAURANT) Mr. E. Dyck and Mr. Peter Bardouniotis appeared on behalf of Dandy's Restaurant concerning their request for permission to operate an outdoor patio July 7-10, 1993 in conjunction with a promotion by the Kitchener Downtown Business Association (KDBA). The Committee was in receipt this date of a written submission from Mr. G. Bardouniotis dated June 30, 1993 including a sketch of the proposed patio layout and location. Mr. Dyck described the proposed patio indicating that it has been endorsed by the KDBA and approved by the Regional Health Unit. He explained that in order to obtain a liquor licence he requires a letter from the City indicating it has no objection to the proposed facility. Mayor D.V. Cardillo put forward a motion that the request of Dandy's Restaurant be granted. Ms. N. Brawley appeared on behalf of the KDBA indicating that her organization had referred the request to the City on the basis that a 14 foot emergency clearance is required, given the fact that the patio would be located in the roadway. She also noted that the permission of the neighbouring Royal Trust office would also be required as the patio would encroach on an area adjacent to their premises. Mr. Bardouniotis advised that he was unable to obtain the permission of Royal Trust as the Manager is on vacation. Ms. Brawley reiterated that it had been made clear to the applicant that a patio of that size would require the permission of Royal Trust. Mr. Dyck suggested that any recommendation this date could be made conditional upon receiving the appropriate approvals, and if these were not forthcoming the dimensions and arrangement of the patio could be altered accordingly. Mayor Cardillo accepted, as a friendly amendment, a suggestion from Alderman Lorentz that the motion be amended to indicate that Dandy's Restaurant would be required to meet all the necessary requirements. Alderman Stortz suggested that the Committee should support the request. 6. DELEGATION - PATIO REQUEST (DANDY'S RESTAURANT) (cont.) Mr. Pritchard noted that the event in question would be held prior to the Council meeting on July FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 53 -JULY 5, 1993 12, 1993 and asked whether staff are to respond on the basis of the Committee's direction alone. Alderman Zehr responded in the affirmative. On a motion by Mayor D.V. Cardillo - It was resolved: "That subject to the applicant meeting all requirements of the municipality and the Kitchener Downtown Business Association, the City has no objection to the operation of an outdoor patio by Dandy's Restaurant during the period July 7-10, 1993 as outlined in the written submission and diagram of Mr. G. Bardouniotis dated June 30, 1993." 7. ELLEN STREET EXPANSION - THE CENTRE IN THE SQUARE Mr. D. Donaldson was in attendance this date on behalf of the Centre. The Committee was also in receipt of a report from Mr. J. Gazzola dated July 2, 1993 recommending that the City allocate funds to the Ellen Street Expansion subject to the Centre receiving a Provincial grant under the Jobs Ontario Program. Mr. Donaldson explained that at least Phase 1 of the project would be fundable by a grant comprising approximately 1/3 of the cost. He advised the Committee of the constraints imposed in submitting an application before the Provincial deadline and noted that the Province requires some assurance that the balance of funding will be forthcoming. Alderman Zehr asked whether the $400,000.00 contribution from the City's Investment Portfolio recommended by Mr. Gazzola would be decreased by other forms of fundraising undertaken by the Centre and Mr. Donaldson replied in the affirmative. In response to a question from Alderman Galloway, Mr. McKay explained that the project had been previously approved by Council conditional upon 1/3 of the project cost being provided through fundraising. Mr. Donaldson explained the need for the extension, which he indicated would result in an operating budget increase, but be offset by other revenue generated by the facility. A discussion took place concerning the proposed doubling of the per ticket Capital Replacement Levy from $1.00 to $2.00. Mr. Donaldson explained that this increase could possibly be reduced given the extended terms for repayment of the City loan. On a motion by Alderman B. Stortz - It was resolved: "That the $125,000.00 originally allocated in 1993 of the Capital Forecast (1993-2002) for the Ellen Street Expansion to the Centre In The Square be provided out of the General Capital Contingency Fund, and, That an advance of $400,000.00 from the City's Investment Portfolio be made to the Centre, with this amount to be repaid over a period not to exceed 10 years from the date of the advance and with interest applied at either a fixed rate for the term (based on current interest yields for such a term) or at variable rates of prime plus 1%, and further, That all of the above be subject to the Centre receiving a grant from the Province of Ontario totalling 1/3 of the project cost." The Committee was in receipt of a report from Mrs. J. Koppeser dated June 29, 1993 concerning a request to sell frozen yogurt from a cart on private property along King Street. 8. LICENCE REQUEST - YOGURT CART Alderman Zehr asked whether staff are supporting the request and Mr. Parkhouse replied that this would not necessarily be the case as it would entail adding to the approved product line. He also noted that if the request related to the use of City lands staff would not support it. On a motion by Alderman J. Ziegler - FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 54 -JULY 5, 1993 It was resolved: "That pursuant to Chapter 586 (Refreshment Vehicles) of the Municipal Code, Council grant the request of Ms. E. Matlow, Matcho Holdings Inc., for permission to locate a frozen yogurt cart in the alcove in front of 125 King Street West as shown in the site plan appended to her letter of June 25, 1993, and further, That the above approval be conditional upon the applicant satisfying all requirements of the municipality and obtaining the necessary licence." 9. LICENCE REQUEST - REFRESHMENT STAND (VICTORIA PARK) The Committee was in receipt of a report and recommendation from Mrs. J. Koppeser dated June 30, 1993 in response to a request to operate a stand as part of the Blues Festival on July 25, 1993. On a motion by Alderman B. Stortz - It was resolved: "That pursuant to Chapter 586 (Refreshment Vehicles) of the Municipal Code, Council grant the request of Mr. R. Fordham for permission to operate a refreshment stand (BBQ) in Victoria Park during the Blues Festival scheduled for July 25, 1993, and further, That the above approval be subject to the applicant obtaining health and fire approvals as well as the necessary licence." 10. PRE-BUDGET APPROVAL - BUILDING FEES The Committee was in receipt this date of a report from Mr. J. Witmer dated July 2, 1993 (PD#72/93) requesting approval to increase and establishment of a number of minimum permit fees for small construction projects. Ms. Balfour explained that the $25.00 minimum permit fee has not been recalculated for five years and that though the construction value of this type of project is low, the amount of staff time required to process applications is similar to that for larger projects. Alderman Ziegler expressed the opinion that the fee proposed is too high and may discourage applications, indicating that on this basis he would not support the recommendation. Alderman Galloway concurred with the comments of Alderman Ziegler. Ms. Balfour advised that in her opinion the increase would not be detrimental and merely reflects the amount of time spent by staff in processing these applications. Moved by Alderman J. Ziegler - "That no action be taken on the staff request to amend Chapter 710 (Building - Permits and Fees) of the Municipal Code to allow the increase and establishment of minimum permit fees for small construction projects as outlined in the report of Mr. J. Witmer dated July 2, 1993." Alderman Lorentz suggested that the increases will have an adverse impact on homeowners rather than building professionals and on this basis he would not support the recommendation. Both Mayor Cardillo and Alderman Wagner indicated they would not support the fee increase. 10. PRE-BUDGET APPROVAL - BUILDING FEES (cont.) Mr. McKay advised that the proposed fee is to cover the cost of processing only and would apply to services which are not routinely accessed by the general public. The motion by Alderman J. Ziegler to take no action regarding an increase in small construction permit fees was voted on and . CARRIED FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 55 -JULY 5, 1993 11. REFRESHMENT VEHICLES - PLAZA LOCATIONS The Committee was in receipt of a report from Mrs. J. Koppeser dated June 29, 1993 concerning options for regulation of the above. Alderman Zehr advised that he has received complaints from restaurant owners in response to recurring instances where businesses in malls are selling food items or allowing them to be sold in support of charities. He questioned whether other Aldermen had received similar complaints and whether the Committee wished to take any action. He suggested that the City could restrict the number of licences for a particular location, voicing his preference for a three licence maximum in any given year. Moved by Alderman J. Ziegler - "That the City restrict the number of food carts located in plazas/malls and operating for charities by issuing a maximum of three licences per year for any one location." Alderman Zehr noted that some of the vendors have circumvented the licence requirement by accepting donations in lieu of a charge for the food item. Alderman Galloway indicated his support for the recommendation, noting that landlords may appreciate a limitation in this regard. Alderman Wagner indicated that due to size differences some locations may be able to accommodate more than three carts in one year. He also noted that this type of activity traditionally attracts customers which in turn benefit other businesses. He suggested that it be determined how restauranteurs are specifically affected by the carts, as well as the prevalence and seriousness of the problem. Alderman Stortz indicated that in his opinion the action proposed by Alderman Ziegler would not be enforceable and on this basis he would not support the motion. Alderman Lorentz mentioned instances of regular weekend garage sales and suggested that the City look at a similar limitation on this activity. He requested a report in reference to possible limitations on garage, lawn and yard sales. The previous motion by Alderman Ziegler to restrict the number of licences issued for food carts in plazas/malls was voted on and . LOST 12. STATUS REPORT - TAX ARREARS The Committee was in receipt of a report from Mr. J. Gazzola dated June 30, 1993 outlining Taxes Receivable (Realty and Business). Mr. Gazzola noted that the report addresses two specific questions raised by City Council relative to waiving the penalty for late payment of taxes and to moving the instalment due date from September 1 to October 1. Alderman Ziegler acknowledged the necessity for an appropriate late payment penalty, but asked for the Committee's consideration of a grace period which would have the effect of removing any late payment penalties for a one month period following the September 1 due date for the third tax instalment only. He indicated this would assist ratepayers who may require additional payment time since the September date occurs just after the Labour Day weekend. Alderman Galloway argued that Council approved moving the due date from October to September at the same time it instituted a monthly instalment plan. He inquired as to the use of the monthly plan and suggested that many of the problems referred to by Alderman Ziegler have been addressed. Alderman Ziegler pointed out that the monthly payment plan 12. STATUS REPORT - TAX ARREARS (cont.) would only be relevant where a regular source of income is involved. Mr. Gazzola reported that use of the payment plan has increased between 75 and 100%, adding however that the total number of people taking advantage of the instalment plan is not significant. In response to a question from Alderman Galloway, Mr. den Ouden advised that the figures referred to by Mr. Gazzola do not include instances where payments are made by banks or mortgage companies on behalf of the property owner. FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 56 -JULY 5, 1993 Moved by Alderman J. Ziegler - "That the City institute a grace period relative to the third instalment due date which would have the effect of extending the time for payment without penalty by one month, and that without a change in the notification procedure this measure apply to the 1993 tax year only, and further, That Mr. J. Gazzola report to the Finance and Administration Committee on the impact of this initiative following the expiry of the grace period." Alderman Smola asked whether the City can legally change the due date and Mr. Wallace advised that this would likely require amendments to the by-law relative to due dates and penalty charges. He cautioned, however, that providing a grace period with no penalty could pose a serious problem. Alderman Smola suggested that staff analyze the relevant statistics for 1993 and that this issue be addressed relative to 1994 taxes. Alderman Ziegler suggested an analysis of the difference between due dates as regards the number of late payments, and Mr. Gazzola cautioned that this may be difficult due to the current range of payment options. Alderman Stortz suggested moving the third instalment due date from September 1, 1993 to September 15, 1993. Alderman Ziegler withdrew his previous motion relative to a grace period for late payment penalties. Mr. McKay advised that since the due dates have already been established by Council any action in this regard would require a motion to reconsider. He suggested an examination of statistics for 1992 and 1993 as they relate to the percentage of payments before and after the due date. From these, staff could identify any major discrepancies between the third and the first two instalments. Alderman Stortz suggested, and it was generally agreed, that this issue be referred to the 1994 budget deliberations pending receipt of the analysis suggested by Mr. McKay. Alderman Zehr expressed concern over the rate charged by the City for late payment of taxes. He stated that he does not disagree with the notion of charging prime plus 1 1/4%, however, a study he had undertaken showed that in 1993 the spread between the penalty charge and prime plus 1 1/4% was 9%. He suggested that the percentage of the penalty should be fair and that a fixed rate appears inappropriate. Mr. McKay pointed out that a large number of taxpayers prefer to in effect borrow from the City via the penalty charge as opposed to approaching financial institutions. Mr. Gazzola offered the opinion that the rate is not intended to be fair but to act as an incentive to pay and a disincentive to treat the City as a bank. He stressed that it is a penalty and not a borrowing rate. Alderman Wagner questioned how aggressively the City is pursuing tax arrears owed by the business sector, and suggested that allowing arrears to accumulate may amount to subsidizing a business relative to its competitors. Mr. Gazzola replied that staff are pursuing collection as aggressively as possible given their present resources. 13. OTHER BUSINESS - FREEZING ASSESSMENT ON GOLF COURSE LANDS Alderman Wagner noted that the minutes of the June 14, 1993 Finance and Administration Committee meeting did not reflect the fact that he had voted against the request of the Deer Ridge Golf Club, and asked that it be noted in the minutes of the meeting of this date. Alderman Wagner asked Mr. Gazzola to clarify comments he had made concerning the agreement between the City and the Westmount Golf and Country Club. Mr. Gazzola advised that he had intended to convey the fact that nothing can be done relative to the agreement at this time short of a change in the enabling legislation. Alderman Wagner expressed the opinion that freezing assessment value and other forms of tax deferral are unfair to other private clubs. Mayor Cardillo pointed out that the legislation, though permissive is not mandatory and in the event the lands are sold the City will be paid all back taxes owing. Alderman Wagner put the Committee on notice that FINANCE AND ADMINISTRATION COMMITTEE MINUTES- 57 -JULY 5, 1993 he intends to pursue the matter further and will raise the issue of a legislative change at the next Finance and Administration Committee meeting. Mr. McKay suggested that Alderman Wagner draft an appropriate motion in this regard. Alderman Galloway questioned why the items relative to renewal of an amusement arcade licence and charitable bingo violations were being dealt with in caucus and it was explained that given the nature of the information involved these items would be most appropriately dealt with in camera. 14. NEXT MEETING The next regularly scheduled meeting of the Finance and Administration Committee will be held on . Monday, August 16, 1993 15. ADJOURNMENT The regular meeting adjourned at 1:20 p.m. and the Committee resolved itself into caucus to consider the balance of its agenda. _________________________________ G. Sosnoski Manager of Corporate Records/Assistant City Clerk