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HomeMy WebLinkAboutFinance & Admin - 1995-10-02FAC\1995-10-02 OCTOBER 2, 1995 FINANCE & ADMINISTRATION COMMITTEE MINUTES CITY OF KITCHENER The Finance and Administration Committee met this date, commencing at 10:15 a.m., under the Chairmanship of Councillor J. Ziegler with the following members present: Councillors T. Galloway, G. Lorentz, K. Redman, Jake Smola, John Smola, B. Vrbanovic, M. Wagner and C. Weylie. Mayor Richard D. Christy was in attendance for part of the meeting. Others present: Mrs. J. Koppeser, Ms. J. Jantzi and Messrs. T. McKay, J. Gazzola, J. Shivas, T. McCabe, E. Kovacs, T. Clancy, L.F. Parkhouse, D. Mansell, G. Sosnoski. 1. MONTE CARLO EVENT - WATERLOO MINOR RINGETTE ASSOCIATION The Committee was in receipt of a memorandum from Mrs. J. Koppeser dated September 20, 1995 requesting direction relative to the issuing of a Provincial licence. It was noted that the City's current policy only allows organizations with a physical presence in Kitchener to be licensed for lottery events held in the City. Councillor Vrbanovic questioned whether the Kitchener Minor Ringette Association had been contacted and Mrs. Koppeser replied in the affirmative, advising that they had no objection to the request. In response to a further question, Mrs. Koppeser advised that the City of Waterloo is also aware of the application and that Waterloo has a policy which prohibits Kitchener based organizations from holding Monte Carlo events in Waterloo. Moved by Councillor B. Vrbanovic - "That no action be taken on the request of the Waterloo Minor Ringette Association for permission to hold a Monte Carlo event at the Granite Club, 69 Agnes Street, Kitchener, on December 27-29, 1995, inclusive." Councillor Galloway suggested that the issue is the number of Monte Carlo events being held at a limited number of Kitchener locations. He questioned why more events are not held in Waterloo, and noted that Waterloo should culture its own locations in this regard. Councillor Redman advised of her concern that in approving the application, other Kitchener based charities may be prevented from applying since a limited number of these events can be held throughout the year. The previous motion of Councillor Vrbanovic recommending no action on the request of the Waterloo Minor Ringette Association was voted on and Carried. The Clerk was asked to notify both the Kitchener and Waterloo Ringette Associations of the Committee's recommendation to Council and extend to them an opportunity to attend the October 10, 1995 Council meeting. 2. TAX ARREARS - 220 MADISON AVENUE SOUTH Mr. Rudy van Horsigh appeared on behalf of the owners of 220 Madison Avenue South, Kitchener, concerning accumulated tax arrears. Mayor Richard D. Christy entered the meeting at this time. Mr. van Horsigh informed the Committee that the owners were victimized by an unscrupulous financier and as a result their debt Icad is unmanageable. Mr. van Horsigh requested relief from the interest and penalty charges owing on outstanding taxes, pointing out that he is trying put together a debt package which the property owners can manage. In response to a question from Councillor Galloway, Mr. van Horsigh advised that the owners have been unable to pay their taxes since 1992, but had no problem meeting this obligation before that date. Mr. Gazzola clarified that the amount owing includes back taxes, unpaid utilities as well as penalty and interest charges. Councillor Redman inquired as to Mr. van Horsigh's relationship to the owners and he replied that he is acting as the executor of a 2. TAX ARREARS - 220 MADISON AVENUE SOUTH (CONT'D) FINANCE & ADMINISTRATION COMMITTEE MINUTES OCTOBER 2, 1995 -118- CITY OF KITCHENER friend's will who was involved in a mortgage extension. Mr. van Horsigh stressed that he is looking for an acceptable payback schedule that will allow the owners to pay off the accumulated debt. In response to a question from Councillor Redman, Mr. Gazzola advised that in the past the City has not negotiated forgiveness for arrears, and that a number of requests have been received over the past three years from both individuals and companies. Mr. Gazzola pointed out that in many situations the City has established a long term repayment plan and has encouraged individuals to borrow money at a lower rate than that of the interest and penalty charges levied by the City. He added that incorporating unpaid utilities as part of the amount owing is in itself a concession. Mr. Gazzola acknowledged that there has been no discussion to date in this particular instance as regards a repayment schedule. On a motion by Councillor Jake Smola - It was resolved: "That no action be taken on the request of Mr. Rudy van Horsigh, representing the owners of 220 Madison Avenue South, Kitchener, for relief from the interest and penalty charges owing on outstanding taxes." Councillor Ziegler pointed out that the recommendation put forward by the Committee this date does not prevent staff from working with the property owners to develop a satisfactory repayment schedule. 3. COMPUTER PURCHASE PLAN - KITCHENER PUBLIC LIBRARY Council, on September 25, 1995, deferred consideration of the Finance and Administration Committee recommendation, pending further discussion this date. The initial recommendation involved extending the Employee Computer Purchase Plan to staff of the Kitchener Public Library and charging the cost of providing this funding to the Library's Operating Budget. The Committee was in receipt of additional correspondence from M. Walshe of the Kitchener Public Library, dated September 20, 1995 as well as the original staff report from J. Gazzola dated September 13, 1995. Ms. M. Walshe, Chief Executive Officer, Kitchener Public Library, appeared and noted that given recent changes at the Library, it is imperative that staff become familiar with new technology. She noted that some have demonstrated a willingness to learn and that the Computer Purchase Plan is viewed as a vehicle to increase staff competence in this area. Ms. Walshe noted that her initial request for participation involved an interest free loan for up to 25 Library staff, with repayment of the principle amount over a five year term. She pointed out that the proposal would involve offering the loan to 15 staff in the first year of the program and to 5 additional staff in each of the second and third years. Ms. Walshe argued that such a program would result in long term savings, and asked that with the exception of limiting the number of staff who could participate, the Library have access to the same purchase plan as City staff. Mayor Christy questioned the future involvement of the Library in a purchase plan after the three year term referred to by Ms. Walshe, and she replied that she has no proposal beyond the first three years, but noted that the need for technology and corresponding training is ongoing. Ms. Walshe also pointed out that the Kitchener Public Library Board supports her proposal. Mayor Christy questioned whether the Board feels strongly enough about the initiative to pay any interest charges involved and Ms. Walshe cited the challenge posed by anticipated reductions in Library funding from the Province. Mayor Christy pointed out that Kitchener Council faces the same issues as the Library Board and expressed his concern over commitment to such a plan at a time of grant reduction. He suggested that the entire issue should be deferred to the 1996 Budget process, pending an indication from the Library as to its longer term strategy. 3. COMPUTER PURCHASE PLAN - KITCHENER PUBLIC LIBRARY (CONT'D) Mr. Gazzola referred to his earlier report and noted that he had recommended that all Library employees, both and full and part time, be given access to the program and that the number of loans not be limited to 25. He offered the opinion that the Purchase Plan is an excellent program from both the employee and the corporate perspective. Mr. Gazzola advised that there is "no free lunch", noting that the loan involves a cost allocation and that the Kitchener Public Library is a FINANCE & ADMINISTRATION COMMITTEE MINUTES OCTOBER 2, 1995 -119- CITY OF KITCHENER separate institution from the City. He furthered clarified that the anticipated cost of offering the program to the Library would initially be between $15,000.00 and $16,000.00. He added that the Library has already received generous treatment from the City as regards the Government Bookstore located in City Hall. Ms. Walshe responded that she is only asking that the Library staff be treated the same as City employees, noting that the Library has an added need in view of recent re-engineering initiatives. She also clarified that she is not asking that the Purchase Plan be extended to all Library staff, but to a limited number of participants. Ms. Walshe pointed out that if revenue is the issue, than Kitchener staff should be subject to the same interest charges. Councillor Ziegler suggested that the request be dealt with through the Budget process. Councillor Jake Smola put forward a motion that the City of Kitchener fund an Employee Computer Purchase Plan for the staff of the Kitchener Public Library similar to that currently in place for City of Kitchener employees with no interest being charged on the cost of providing the loans. Mr. McKay clarified that Mr. Gazzola is not suggesting that Library employees be charged interest on the loan and the issue is whether interest is to be paid through the City's budget or the Library Board budget. Councillor Galloway questioned whether Council approval is required at all, if the Library could offer a plan to its staff unilaterally and assume the cost. Mr. Gazzola replied that in that instance the Library would have to borrow money from a lending institution, and that what requires Council approval is extension of any line of credit by the City. Councillor Galloway advised that he would not support the recommendation on the basis that the Library is run by an independent Board to which the City already provides generous capital and operating grants. He suggested that the Library should determine the priority of this project and if appropriate, provide funding themselves. Councillor Weylie requested a recorded vote. Councillor Lorentz indicated his support on the basis that funding a purchase plan is a good long term investment. Mayor Christy suggested that the motion should be defeated, noting that notwithstanding this, he supports the technical innovations and the level of service provided by Library staff. He pointed out that the City has been very generous to date as regards grants to the Library and that the Library Board, like the Municipality, will have to deal with funding reductions in the near future. The previous motion by Councillor Smola to extend the City's Computer Purchase Plan to Kitchener Public Library staff on a no-interest basis was then dealt with and was Lost on a recorded vote. In Favour: Councillors G. Lorentz, M. Wagner and Jake Smola. Contra: Mayor Richard D. Christy, Councillors John Smola, K. Redman, B. Vrbanovic, T. Galloway, C. Weylie and J. Ziegler. COMPUTER PURCHASE PLAN - KITCHENER PUBLIC LIBRARY (CONT'D) On a motion by Councillor T. Galloway - It was resolved: "That the City of Kitchener fund an Employee Computer Purchase Plan for staff of the Kitchener Public Library, with the Plan to be similar to that currently in place for City of Kitchener employees, and further, That the cost of providing this funding by the City is to be charged against the operating account of the Kitchener Public Library at a rate of interest equivalent to that earned by the FINANCE & ADMINISTRATION COMMITTEE MINUTES OCTOBER 2, 1995 - 120 - CITY OF KITCHENER City on its temporary investment funds." AMENDMENT - DEVELOPMENT CHARGE BY-LAW The Committee was in receipt of a joint report from D. Mansell and T. McCabe dated September 12, 1995 recommending an amendment to the By-law exempting all development within the Downtown area from payment of Development Charges. In this regard, a public meeting to solicit written and verbal representations was advertised for 11:00 a.m. this date. Mr. Richard Brown appeared in regard to the proposed amendment and noted that he is contemplating development outside of the area defined in the draft by-law. He asked for comment as to the reasons why the area for purposes of the by-law amendment was not being expanded to include other areas, for example, east of Weber Street and south of Joseph Street. Mr. McCabe advised that the City has the authority to exempt certain areas and types of development from Development Charges, and outlined the proposed changes to the By-law. He also noted that in 1995 between $3,000.00 and $4,000.00 in Development Charges will have been collected relative to the Downtown. In response to Mr. Brown's question, Mr. McCabe advised that the Downtown Task Force defined Downtown boundaries and that staff generally support this delimitation. He stressed that staff feel Development Charges should apply to areas outside the boundary and that if the capital works undertaken have a larger benefit to the City and surrounding area, consideration could be given through a redevelopment allowance. Councillor Jake Smola advised that he has some difficulty with the By-law and the proposed boundaries and suggested that if a large investor were to develop property just outside of the boundary, Council would be under pressure to include this development within the definition of the Downtown area. Mr. McCabe replied that a line has to be drawn somewhere and that the boundaries of the Downtown were not drawn for the Development Charge By-law alone, but are existing and recognized boundaries. Councillor Jake Smola further suggested that Council receive an annual report on all Development Charge exemptions affecting the Downtown and Mr. McCabe agreed. Mr. Mansell pointed out that the boundary line is on the inside of the road right- of-way and that allowance has been made, relative to City of Kitchener roads, that some of the redevelopment allowance could be attributed to appropriate reconstructions and so offset Development Charges. Mr. Brown pointed out that the Victoria Street boundary is drawn at the CN Railway line and does not incorporate the Epton complex and many other derelict properties in the area in need of redevelopment. He suggested that in the interest of attracting development to the Downtown, the boundaries should be expanded. Councillor Redman voiced her concern that expanding the boundary to the Courtland and Lancaster areas as suggested by Mr. Brown, may encourage the destruction of neighbourhoods to facilitate highrise development. Mr. Brown suggested that Council should encourage the proliferation of high density residential development in the Downtown. Councillor Ziegler advised Mr. Brown that any recommendation adopted by the Committee this date will be dealt with by City Council on October 10, 1995. AMENDMENT - DEVELOPMENT CHARGE BY-LAW (CONT'D) Councillor Galloway inquired as to any input received from the development industry and Mr. Mansell advised that the only discussions he has had were with Mr. Brown, and that the development industry is aware of the amendment. Councillor Galloway questioned the time frame of the proposed amendment, noting that he saw this as a two to three year opportunity. Councillor Galloway further suggested that as regards financing of the initiative, the options are to forego the revenue with no charges or to calculate the charges the City has foregone and debit these from the Downtown account. He inquired as to the impact on the Capital Forecast of the second option. Mr. McCabe replied that there is little impact on the Capital Forecast and that at present there is only one project left in the Downtown that would have been subject to Development Charges. He further pointed out that a grant system was investigated, but was discarded due to the legislative process required for the By-law. FINANCE & ADMINISTRATION COMMITTEE MINUTES OCTOBER 2, 1995 - 121 - CITY OF KITCHENER Councillor Jake Smola inquired as to the Development Charges which would be owing in the event phase two of the Canada Trust complex is constructed, and Mr. McCabe estimated the charges to be approximately $90,000.00. However, he pointed out that given the current high rate of commercial vacancy, it was unlikely this project would be built in the next three years. On a motion by Councillor C. Weylie - It was resolved: "That Council approve an amendment to Section 2(1) of the City of Kitchener's Development Charge By-law No.91-314, to exempt all development within the Downtown area from the payment of all Development Charges in accordance with the By-law appended to Planning and Development Department report No. PD 95/90." Councillor Galloway asked for clarification as to the term of the amendment and Mr. Shivas advised that the amendment would be valid until the next five year review of the By-law which would take place in March of 1996. Councillor T. Galloway put forward a motion indicating Council's intention that the Development Charge exemption for the Downtown apply for a three year period only. Mr. Shivas cautioned that there is no legislative authority to set minimum limits, but that the City is obliged to work within the five year framework established by the legislation. Mr. McCabe added that Council has already advised by resolution as to the term of the amendment. Councillor Galloway withdrew his previous motion. RE-ORGANIZATION OF ADMINISTRATIVE SERVICES DEPARTMENT The Committee was in receipt of a report from T. McKay dated September 27, 1995 recommending that the Department be dissolved and the individual divisions re-allocated as follows: Transit Division to the Public Works Department; Information Technology Division to the Finance Department; and the Human Resources Division to the Chief Administrative Officer's Department. Councillor B. Vrbanovic disclosed a conflict of interest and abstained from all voting and discussion concerning Clauses #1 and #3 of Mr. McKay's report, as his wife is currently employed in the City's Information Technology Division. Councillor Vrbanovic requested that these two clauses be dealt with separately. Councillor John Smola asked that Clause #4 relative to the Human Resources Division be dealt with in-camera. Ms. Catherine Thompson, representing the K-W Record, objected to the suggestion that Clause #4 be dealt with in-camera on the basis that it does not deal with a specific individual and as a result in-camera discussion is not authorized by the legislation. Councillor Ziegler advised that Ms. Thompson's objection would be noted. Councillor John Smola pointed out that the discussion relates to a personnel matter and Councillor Jake Smola further clarified that in the course of discussion there would likely be reference to specific RE-ORGANIZATION OF ADMINISTRATIVE SERVICES DEPARTMENT (CONT'D) individuals. Councillor Weylie asked when the proposed re-organization would be implemented, and Mr. McKay replied that this would take place in the next one to two months. On a motion by Councillor John Smola - It was resolved: "That the position of Commissioner of Administrative Services be deleted from the City's compliment and the Department dissolved, and further, That the Information Technology Division be transferred to the Finance Department, reporting to the Commissioner of Finance, and that no action be taken to fill the vacant position of Director of Information Technology until such time as the Finance Commissioner has carried out a review of the Division and reported back to the Finance and Administration Committee on its future operation." FINANCE & ADMINISTRATION COMMITTEE MINUTES OCTOBER 2, 1995 - 122 - CITY OF KITCHENER Councillor B. Vrbanovic previously disclosed a conflict of interest and abstained from all voting and discussion concerning Clauses #1 and #3 of Mr. McKay's report as his wife is currently employed by the City's Information Technology Division. On a motion by Councillor John Smola - It was resolved: "That the Transit Division, under the Directorship of Wally Beck, be transferred to the Public Works Department reporting to the General Manager of Public Works." On a motion by Councillor John Smola - It was resolved: "That the Finance and Administration Committee recommend to City Council that Clause #4 of the report of T. McKay dated September 27, 1995 dealing with transfer of the Human Resources Division to the Chief Administrative Officer's Department be dealt with at the in- camera meeting of Council to be held later this date." Councillor Ziegler introduced former Mayor M. Rosenberg who was in attendance this date. 6. 1996 PROVINCIAL REASSESSMENT Councillor Ziegler advised that he had asked for this item to be on the agenda to familiarize the Committee with action taken by Council as a result of the 1992 reassessment. He noted that in 1992 Council received many applications for relief as a result of shifts in assessment value and that as a result had agreed to phase-in, over a three year period, any increase in assessment value greater than 30% as well as any decrease greater than 10%. Councillor Ziegler noted that the phasing-in of both decreases and increases effectively paid for the phase-in program, and suggested that a similar approach should be taken in 1996 when additional shifts in value are expected. Councillor Ziegler circulated one set of all minutes dealing with the phase-in program. He explained that the Council of the day viewed substantial increases as a hardship and substantial reductions as a windfall, and suggested that a decision to adopt a similar phase-in program should be made before the 1996 reassessment takes place. Mr. Gazzola referred to three cost components associated with the phase-in program. He stressed that the phase-in of increases and decreases since 1992 have not entirely offset each other and there is $175,000.00 cost for the program. Mr. Gazzola also referred to a delay in 1992 in issuing tax bills which resulted in a $10,000.00 to $15,000.00 per day loss in revenue. He added that given the information received from Provincial Assessment to date, this should not be a problem in 1996. Finally, he referred to the expense of additional administration for the phase-in program which in 1992 affected 7,500 ratepayers, 10% of whom had subsequent assessment changes. Mr. Gazzola advised that based on information received to date, it would 1996 PROVINCIAL REASSESSMENT (CONT'D) appear that the City's share of the reassessment in 1996 would be slightly down from 1992, and that he was not sure of the impact on individual assessment classes. Councillor Ziegler inquired as to when more detailed information would be available and Mr. Gazzola responded that the last run-off of information by the Province was at the end of September, and that he anticipates reporting back to Council in the next few weeks. Mr. Gazzola also pointed out that in 1992 the normal tax increase, which in that year was 5%, was added to the increased assessment so that in effect, the phase-in applied to increases greater than 35% rather than 30%. Councillor Redman asked whether the $175,000.00 cost was directly attributed to the phase-in and Mr. Gazzola replied in the affirmative. Councillor Ziegler noted that this could be adjusted in determining the level at which a phase-in would apply. He added that individual relief may not be required if the changes are not as significant as anticipated. Councillor Galloway argued that a decision on a phase-in program should not be made before the details of the reassessment are known and Council hears from those individuals affected. In this regard, he suggested waiting until the reassessment notices have been sent out by the Province. Councillor Ziegler replied that in his view, Council should indicate its willingness to offer the phase-in program if necessary. Mr. Gazzola advised that reassessment notices are scheduled to go out the first two weeks in November 1995 and will indicate the impact on the current year's taxes if the FINANCE & ADMINISTRATION COMMITTEE MINUTES OCTOBER 2, 1995 - 123 - CITY OF KITCHENER property had been assessed under the new plan. He added that following the mailing, the Province has arranged a two week open house in the City Hall Rotunda to give people an opportunity to discuss and appeal the reassessment. OTHER BUSINESS The Committee was in receipt this date of a revised 1996 Budget schedule incorporating direction previously given by Council. The Committee briefly reviewed the schedule and the changes were generally accepted. NEXT MEETING The next regularly scheduled meeting of the Finance and Administration Committee will be held on Monday, October 16, 1995. ADJOURNMENT On motion, the meeting adjourned at 12:25 p.m. ........... G. Sosnoski ........... Manager of Corporate ........... Records/Assistant City Clerk