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HomeMy WebLinkAboutFinance & Admin - 1994-07-04FAC\1994-07-04 J U LY 4, 1994 FINANCE & ADMINISTRATION COMMITTEE MINUTES CITY OF KITCHENER The Finance and Administration Committee met this date, commencing at 11:40 a.m., under the Chairmanship of Councillor C. Zehr with the following Members present: Mayor D.V. Cardillo, Councillors B. Stortz, M. Wagner, M. Yantzi, J. Smola, J. Ziegler, T. Galloway, G. Lorentz and C. Weylie. Others present: Messrs. T. McKay, J. Gazzola, T. McCabe, R.W. Pritchard, T. Clancy, L. Parkhouse, L. Proulx, P. Summers, G. Sosnoski, Mrs. J. Koppeser and Ms. D. Arnold. 1. CONTROLS AND INSTRUMENTATION TENDER - KITCHENER PUBLIC LIBRARY The Committee was in receipt of a written submission from Mr. Michael Herz, Sales Manager, Sutherland-Schultz Inc. dated June 30, 1994 questioning the tender process used by the Kitchener Public Library Board (KPL) relative to the controls and instrumentation tender for the addition/alterations to the Main Library. Mr. Herz was also in attendance in support of his submission. Councillor Zehr explained that the original tender was over budget and the project was subsequently re-tendered, with those who had bid on the first tender being given an opportunity to resubmit. He pointed out that neither the City, nor its Purchasing Division, had been involved in the tender which was let by the KPL Board on a direct basis. He also questioned whether the municipality has any jurisdiction relative to tenders let by an independent Board of Management. Councillor Ziegler put forward a motion that the delegation in attendance this date on behalf of Sutherland-Schultz Inc. be permitted to speak. He added that the situation should be examined more closely, and noted that as regards the area of jurisdiction, the City provides capital and operating funds to the KPL as well as the services of a Project Manager. Councillor Ziegler suggested that on this basis the Committee has an obligation to hear the delegation. Mr. McKay pointed out that the Library Board operates as a Board of Management under the Library Act. He suggested that it is neither appropriate, nor in the City's interest, to involve itself in disputes over tenders let by the KPL since the relationship between the municipality and the Library is intended to be at arms length. Councillor Stortz suggested that the concerns of the delegation be referred back to the KPL Building Committee, as the matter is out of the City's direct control. Councillor Yantzi pointed out that according to the delegation Sutherland-Schultz Inc. has attempted to contact the KPL Board, without success. Councillor Zehr noted that Ms. P. Walshe, Chief Executive Officer of the KPL, had informed him that Sutherland-Schultz Inc. was informed of the tender decision both verbally and in writing. Mr. Herz acknowledged receipt of a letter in this regard, but pointed out this was received after the fact. The previous motion by Councillor Ziegler to hear the delegation from Sutherland-Schultz Inc. was voted on and CARRIED. Councillor Wagner put forward a motion to refer the concerns of Sutherland-Schultz Inc. relative to the controls and instrumentation tender back to the KPL Board for their consideration and quick action. Mr. M. Herz appeared on behalf of Sutherland-Schultz Inc. and alleged that the process used to tender for controls and instrumentation was completely unfair, and stated that the KPL Board has refused to hear his company's concerns. Mr. Herz suggested that the City should exercise some control on the basis that it provides funding to the KPL. He suggested that this could be done by making funding conditional upon the use of sound tendering practices. Councillor Ziegler noted that the KPL Board is publicly funded, and under the circumstances should be willing to hear from taxpayers. He suggested that the Committee send a letter to the Board asking them to hear the concerns of Sutherland-Schultz Inc. Councillor Galloway questioned the "arms length" status of the KPL, given that the City provides approximately $6,000,000.00 in subsidies per year. He offered the opinion that the KPL Board should deal with this matter first, and expressed surprise that they have not been willing to hear the concerns of Sutherland-Schultz Inc. Councillor Yantzi asked whether Mr. Herz had submitted a written FINANCE & ADMINISTRATION COMMITTEE MINUTES JULY 47 1994 - 63 - CITY OF KITCHENER 1. CONTROLS AND INSTRUMENTATION TENDER - KITCHENER PUBLIC LIBRARY (cont'd.) request to the Board asking to be heard, and he replied that an initial letter was sent to the architect before the tender was awarded as well as a second letter, both of which have been flatly ignored. Councillor Ziegler asked that the motion on the floor be amended to reflect that the KPL is being asked to advise of their consideration of this issue, and any action taken by them. Councillor Wagner accepted the suggestion of Councillor Ziegler as a friendly amendment. Mr. Herz suggested that the motion could also indicate that funding would be withheld until the problem is resolved, and Councillor Zehr indicated that the Committee was not prepared to take such action. In response to a question from Councillor Galloway, Mr. McKay advised that the City's Project Manager is involved on a fee for service basis. He also pointed out that the contract has already been awarded and that Council has no legal right to change a KPL Board decision. He also noted that the KPL has substantial experience in this regard. Councillor Ziegler asked that the motion be further amended to indicate that the KPL also provide reasons for any actions taken by them on the concerns of Sutherland-Schultz Inc., and Councillor Wagner accepted the suggestion as a friendly amendment. The motion by Councillor Wagner was then voted on, as amended. On motion by Councillor M. Wagner - it was resolved: "That concerns raised by Mr. Michael Herz, Sutherland-Schultz Inc., relative to the controls and instrumentation tender for the 1994 addition/alteration to the Main Library, be referred back to the Kitchener Public Library Board, and that the Board be asked to hear his submission and act upon these concerns as quickly as possible, and further, That the Board advise the City of Kitchener of their consideration, as well as any subsequent actions taken by them, along with the reasons for such actions." Councillor Zehr asked that the Clerk provide verbal notice to the KPL Board this date, and followup in writing advising of the Committee recommendation. 2. REQUEST TO INCREASE BINGO PRIZE BOARD The Committee was in receipt of a report from Mrs. J. Koppeser dated June 28, 1994 concerning a request from the Concourse Charities Bingo Association to increase the maximum prize payout for any one bingo to $3,500.00. Mr. Max Rausch appeared on behalf of the Kitchener Charities Bingo Association, and in opposition to the request for an increase in the bingo prize board. Mr. Rausch noted that bingo attendance fluctuates seasonally and that declines cannot be directly attributed to a lower prize board. He referred to a recent survey of Ontario Bingos which found that prize boards are too high and that there are too many bingo halls in operation. He offered the opinion that an increase in the prize board is not the solution to declining attendance and profits. Mr. Rausch asked that in the event Council agrees to increase the prize board, such an increase not take effect until September 1, 1994, and that this uniform implementation date apply to all licensees, irrespective of whether they have recently renewed their licences for a one or two month period. Reverend Patrick Aiello and Mr. Robert Kirck appeared on behalf of St. Aloysius Church. Reverend Aiello referred to a letter recently sent to the Ministry of Consumer and Commercial Relations indicating that the Province endorses the Church's use of bingo revenues for building and administration and various services in support of the Roman Catholic faith. He also pointed out that a large amount of the bingo profits are put back into the community. Reverend Aiello asked that the prize board amount remain as is, in the interest of avoiding compulsive gambling. REQUEST TO INCREASE BINGO PRIZE BOARD (cont'd.) Councillor Weylie asked whether recent prize board increases in Cambridge and Woolwich Township have had a detrimental impact on bingo revenues. Reverend Aiello replied that he has FINANCE & ADMINISTRATION COMMITTEE MINUTES JULY 47 1994 - 64 - CITY OF KITCHENER noticed a decrease in attendance, but he could not say for certain whether this was a direct result of prize board increases. Mr. Kirck offered the opinion that at present there are too many bingo halls, and that raising the prize board will not necessarily combat declining attendance. He also pointed out that a higher prize board would require a higher admission charge, which in itself may further reduce attendance. Mr. Tim Grub appeared on behalf of the Sertoma Speedskating Club, the owner/operator of a bingo at the Transylvania Club, which is shared with the Region of Waterloo Swim Club. Mr. Grub stated that the Sertoma Club has lost patrons due to larger prize boards, who may return if there is a subsequent increase. He suggested that something needs to be done in this regard even though smaller clubs may fail as a result. Councillor Zehr referred to a letter circulated to the Committee this date from Ms. Judi Langford, Bingo Director, Region of Waterloo Swim Club, indicating the Club's support for a higher prize board, on the assumption that it will maintain the current attendance level and possibly encourage additional patronage. Councillor Stortz offered the opinion that even though community groups have been seeing their bingo profits decline, an increase in the prize board may not be the answer, and may in fact further reduce profits. He suggested that a meeting of politicians and staff from area municipalities be convened to discuss the situation and how the prize board issue is hurting southern Ontario charities. He pointed out that bingos are a highly regulated form of gambling and that prize board amounts are determined by the individual municipalities and not as part of a free enterprise environment. Councillor Wagner offered the opinion that keeping prize board amounts artificially Iow will only hurt charities where there is a need to keep pace with other bingo halls, and agreed with the suggestion of Councillor Stortz concerning a meeting of local municipalities. On motion by Councillor T. Galloway - it was resolved: "That no action be taken on the request of the Concourse Charity Bingo Association for permission to increase the maximum prize payout on any one bingo event to $3,500.00." On motion by Councillor B. Stortz - it was resolved: "That through Councillor C. Zehr and Mrs. J. Koppeser, the City convene a meeting of Council representatives and senior staff of municipalities in the Region to discuss the setting of bingo prize board amounts and the impact on local charities." 3. COLLECTION OF REALTY/BUSINESS TAXES The Committee was in receipt of reports from Mr. J. Gazzola and Mr. O. den Ouden dated June 15 and June 7, 1994 requesting endorsement of a collection policy. Mr. Gazzola indicated that something needs to be done as regards collection of business/realty tax arrears and that he is asking Council to endorse actions which are permitted under the Municipal Act. He added that if the City's collection policy is weak, citizens are less likely to be concerned over tax arrears. Councillor Yantzi questioned how the City decides on which arrears to pursue and suggested that it is important to have established principles and criteria in this regard. Mr. Gazzola indicated that the City attempts to treat everyone equally, and that one of the criteria for pursuing arrears would be in instances where an owner has refused negotiation or discussion of a payment schedule. He added that in all cases staff attempt to negotiate payment of the amount owing before the situation reaches the tax sale stage. Mr. McKay 3. COLLECTION OF REALTY/BUSINESS TAXES (cont'd.) referred to his experience with the Province and noted that the majority of tax sales are seldom brought to conclusion, but often serve as a means of encouraging reluctant owners to negotiate payment. Councillor Wagner referred to the reference in Mr. Gazzola's report to limited use of the Bailiff process, and Mr. Gazzola clarified that he is not sure of the exact number of instances where this procedure has been used by the City. FINANCE & ADMINISTRATION COMMITTEE MINUTES JULY 47 1994 - 65 - CITY OF KITCHENER Councillor Wagner inquired as the number of properties currently in arrears of realty and business taxes. Mr. Gazzola replied that 200 properties are affected with combined arrears of $4,000,000.00. Councillor Wagner indicated his agreement with the staff recommendation, noting that with respect to residential tax arrears the City will eventually get its money, however, business and realty taxes are a different matter and taking no action on arrears could be construed as subsidizing a competitor. Mr. Gazzola clarified that some of the 200 properties previously referred to could be residential. He also noted that staff have concerns when the amount of arrears are in excess of the property value. Councillor Galloway agreed that the City should be more pro-active in this area. He also agreed with the necessity for collection criteria and suggested these could involve a ratio between unpaid taxes and the assessed value of a property, and instances where negotiation on arrears payment has been unsuccessful. Councillor Yantzi suggested that enforcement should also be based on the type of property involved, and if owner occupied, additional consideration should be given. He also suggested that ideally past work orders should also be taken into consideration. Councillor Ziegler suggested that the wording of the staff recommendation be changed to reflect the various stages of collection, including all authority granted under Provincial legislation, and the development of criteria to be applied at each stage. On motion by Councillor J. Ziegler - it was resolved: "That Finance Department staff prepare a report for consideration by the Finance and Administration Committee outlining the various stages applicable to the collection of realty and business tax arrears, including the Bailiff procedure and disposal of property under the Tax Sale Act, and to include criteria for the application of each of these stages of collection." 4. DEVELOPMENT CHARGE DEFERRAL - SIEMATIC CANADA This item was withdrawn at the request of Economic Development. 5. 1993 AUDITED FINANCIAL STATEMENT Councillor Zehr referred to the statements recently circulated to members of Council and asked that these be considered at the August 15, 1994 Committee meeting. 6. 1995 PRO FORMA BUDGET Mr. Gazzola requested a special meeting of the Finance and Administration Committee within the next two to three weeks to give guidelines to staff for the preparation of 1995 Capital and Operating Budgets. Various dates were discussed, and by general consent, it was agreed that a special meeting would be convened on July 13, 1994 commencing at 3:30 p.m. 7. REQUEST FOR OVER-EXPENDITURES - TRANSIT/FLEET GARAGES The Committee was in receipt of a report and recommendation from Mr. P. Summers dated June 30, 1994 concerning various repairs to Transit and Fleet Garages. REQUEST FOR OVER-EXPENDITURES - TRANSIT/FLEET GARAGES (cont'd.) On motion by Councillor G. Lorentz - it was resolved: "That an over-expenditure in the amount of $16,200.00 be approved for repairs to the Transit Garage at 250 Strasburg Road, with the funds to be debited from index code 526159, and further, That an over-expenditure in the amount of $10,750.00 be approved for repairs to the Fleet Garages, with the funds to be debited from index code 526158, all of the above as outlined in the report of Mr. P. Summers dated June 30, 1994." FINANCE & ADMINISTRATION COMMITTEE MINUTES J U LY 47 1994 - 66 - CITY OF KITCHENER 8. ETHNO-CULTURAL ADVISORY COMMITTEE Councillor Galloway advised that applications have been received for the Ethno-Cultural Advisory Committee and asked for permission to digress from the City's normal appointment process. He suggested that a group of individuals, including Council representatives, should be appointed to review the applications and make appointment recommendations to the Finance and Administration Committee. By general consent, the Committee agreed to the arrangement proposed by Councillor Galloway and Mayor D.V. Cardillo, Councillor Zehr and Councillor Galloway volunteered to serve as the Council representatives. 9. OTHER BUSINESS Councillor Zehr inquired as to the status of a report he requested earlier concerning the payment in lieu of taxes by the telephone communications industry. Mr. Gazzola replied that an information report would be circulated to members of Council this week, along with a report on recent changes made by the Province relative to supplementary assessments. Councillor Zehr proposed that the payment in lieu of taxes issue be dealt with at the July 11, 1994 Council meeting. 10. NEXT MEETING The next regularly scheduled meeting of the Finance and Administration Committee will be held on Monday, August 15, 1994. 11. ADJOURNMENT On motion, the meeting adjourned at 12:55 p.m. G. Sosnoski Manager of Corporate Records/Assistant City Clerk