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HomeMy WebLinkAboutFinance & Admin - 1997-01-24 SFAC\1997-01-24-SPE JAN UARY 24, 1997 FINANCE & ADMINISTRATION COMMITTEE MINUTES CITY OF KITCHENER The Finance and Administration Committee met this date commencing at 9:15 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, C. Weylie and M. Yantzi. Others present: Mrs. J. Koppeser, Ms. P. Houston, Ms. K. Schropp, Ms. V. Gibaut, Ms. F. Currier, Ms. B. Baker, Ms. R. Upfold, Ms. B. Aikenhead, Ms. G. Holstead, Ms. L. Gove, Messrs. J. Gazzola, B. Gulliver, L. Gordon, L. F. Parkhouse, R. W. Pritchard, T. McCabe, L. Proulx, B. MacDonald, J. Shivas, T. Clancy, B. Stanley, J. Witmer, D. Paterson, O. den Ouden, J. Hancock, B. Kuntz, M. Grummett, R. Wyatt, G. Kett, P. Beaudry, K. Baulk, M. Price, D. Daly, R. Arnot, L. Neil and G. Sosnoski. The purpose of the meeting was to continue the review of the 1997 Operating Budget as submitted by the Administrative Review Committee. The Committee was in receipt this date of a report from J. Gazzola dated January 23, 1997 in response to questions raised at the January 20 meeting conerning the City's natural gas vehicles and CNG filling station. 1. 1997 OPERATING BUDGET Councillor Ziegler advised that he would deal with two motions later this date, the first from Councillor Galloway concerning budget reductions to offset 1.5 per cent of the two year, 2 per cent staff wage increase; and the second, from Councillor Jake Smola concerning a freeze on all staff salaries at their current levels pending a review of the City's job evaluation system. Councillor Ziegler also requested a report analyzing the financial impact of the department re-organizations undertaken to date, specifically outlining the anticipated savings as a result of eliminating Commissioner positions, as well as how such savings were lost or diminished as a result of job re- evaluations. Finally, Councillor Ziegler advised that in February, he will ask Council, possibly in the context of a roundtable discussion, to consider the possible merging of the Legal and Human Resources functions with the Regional Municipality of Waterloo. He suggested that the City has an obligation to investigate any possible savings in these areas. Councillor Yantzi wanted it noted that Councillor Ziegler is offering his opinion with respect to the above items, and stressed that he has not been a part to any discussions concerning the two motions referred to this date. Councillor Ziegler responded that both issues had been discussed on January 20, and added that comments concerning the Human Resources Division and the Legal Department arose as a result of a recent budget adjustment for staff salaries in the Legal Department. Ms. Houston reviewed the 1997 Operating Budget for the General Services and City Clerk's Department, noting an overall 2.9 per cent increase. Mr. Parkhouse advised that a further $10,000.00 in licensing revenue can be added to the budget bringing the total revenue projection to $410,000.00. Councillor Weylie questioned whether the City could sell printing services to the Region and other area municipalities as a means of generating revenue, and Mr. Parkhouse replied that this may be possible to a limited degree; however, the City does not have the number of staff to produce an increased volume of work. Mr. Gazzola suggested, that notwithstanding a possible increase in operating expenses, it may be worth examining the possibility of providing such a service given that the City has the expertise and the necessary technology. Councillor Weylie asked that the issue be addressed later this date. Councillor Wagner questioned the significant increase in administration costs and expenses in the Facilities Management Division, and Mr. Pritchard replied that these reflect expenses transferred from other department budgets which have decreased proportionately. Mr. Pritchard stressed that the bottom line cost to the City is a net reduction as a result of eliminating one management level position. Councillor Weylie questioned whether there are any areas within the Department which could sell it's services to other municipalities, and Mr. Pritchard replied that he is presently investigating one unspecified area. FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 24, 1997 -15- CITY OF KITCHENER 1997 OPERATING BUDGET - CONT'D Councillor Galloway advised that on January 20 he had voted against each and every department budget as a result of the 2 per cent increase in wages and salaries. He advised that he continues to oppose a 2 per cent increase in expenditures, but henceforward will vote for or against each budget on it's own merits notwithstanding his concern over the impact of the salary increase on the base budget. On a motion by Councillor M. Wagner, it was resolved: "That the 1997 Operating Budget for all divisions of the General Services and City Clerk's Department be approved." Ms. Houston reviewed the 1997 Operating Budget for the Plannin.q and Development Department, noting an overall decrease of 3.6 per cent. She also referred to a salary adjustment adding $44,000.00 to the Department budget. Councillor Vrbanovic asked for a report, on or before Budget Day, of department by department cellular phone charges. Councillor Galloway enquired as to how much of the $200,000.00 in additional department revenue is a direct result of the additional cost incurred. Mr. McCabe referred to information circulated this date on the salary adjustments from 1994 to 1997 based on job evaluation ratings and the appeal process, and presented the Department's perspective on the recent re-organization. Mr. McCabe summarized that the re-organization resulted in cost increases of $90,000.00 in 1995, $50,000.00 in 1996 and $44,000.00 in 1997. He stressed that though it would appear it cost the City $184,000.00 to re-organize the Department, work is being done by the same or fewer employees, and the bottom line figure reflects only a $26,000.00 increase plus fringe benefits. He pointed that some of the increased costs came about as a result of the appeal process, and due to re-posting into higher level jobs. Mr. McCabe pointed out that on the revenue side, there has been a 40 per cent increase since 1995 which is reflected in a combined total of $300,000.00, which has accrued to the City surplus. He advised that staff are presently reviewing the 1996 figures; however, there appears to be an additional $100,000.00 in revenue. Mr. McCabe also put the Committee on notice that the Chief Building Inspector will be reporting in February concerning inspection deficiencies as a result of Provincially mandated inspections, which has a staffing impact. He also advised that the department is considering an increase in certain user fees to reflect indirect application processing costs, and this could add a further $150,000.00 in revenue. Councillor Lorentz advised that he found Mr. McCabe's report to be confusing in view of a similar report received from Mr. Gazzola dealing with the job evaluation and salary figures. He pointed out that in some instances the figures do not match, and specifically referred to the job Grade 18 Planner position. Mr. Gazzola responded that the figures should match; however, a discrepancy may occur in that his report compares 1990 to 1996 and Mr. McCabe's deals with 1994 to 1996. Councillor Jake Smola enquired as to what justifies a job grade change and Mr. Gazzola advised that if there are significant changes in work responsibilities, a new position description questionnaire (PDQ) is drafted and re-evaluated by Committee. Mr. McCabe pointed out that the job grade increase for Building Inspectors is a result of a cross training initiative undertaken by the Department which allows inspectors to cover more than one area if required. Councillor Jake Smola pointed out that it appears all of the job grades have gone up, and this would suggest an increase in workload and stress at a time when the Department's activity levels are Iow. Councillor Redman pointed out that the Planning and Development Department has absorbed the cost of the Downtown Action Team, through the seconding of two staff persons. Councillor Galloway commented that he recalled Council being advised that the re-organization in Planning would save the City money, and this has not proven to be the case. He questioned whether in fact going back to the old Commissioner system would save the City $26,000.00. Councillor Ziegler suggested that Planning and Development is a different type of department, and that the concerns raised by Councillor Galloway would be addressed within the larger review and discussion surrounding the City's job evaluation system. He clarified that all members of Council were told to anticipate savings in the Department of approximately 1. 1997 OPERATING BUDGET - CONT'D FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 24, 1997 -16- CITY OF KITCHENER $100,000.00, and suggested discussions in this regard at a future date. Councillor Weylie pointed out that it was Council's decision to establish General Manager and Assistant General Manager positions, and the costs of these would naturally flow out of the job evaluation system. She further enquired whether any management positions have been eliminated in the Department, and Mr. McCabe replied that one Director position was eliminated as well as a Manager of Building Inspections; however, two management positions were created corresponding to the Community Planning and Development Review Section and the Design, Heritage and Environment Section. Moved by Councillor C. Weylie "That the 1997 Operating Budget for the Planninq and Development Department be approved." Councillor Wagner enquired whether Ms. Frenette plans to report on the recent downloading of Housing responsibilities by the Province, and Mr. Gazzola replied that the Finance Department is looking closely at this issue and has development preliminary figures; however, he is reluctant to report until further detail is available from the Province. Mr. Gazzola added that Housing is only one of the areas affected. Councillor Jake Smola asked for an updated report on the gas mileage savings in the Building Inspection Section as a result of providing inspectors with cellular phones. Mr. McCabe advised that he would update the current report and make it available to Council. Councillor Galloway enquired whether it is appropriate to add the additional $100,000.00 in revenue being projected by Mr. Witmer. Mr. Gazzola pointed out that Mr. McCabe would also like to hire two additional Building Inspectors on a contract basis, and discussion of the request has been referred to Management Committee. He added that revenue projections are easy to make but sometimes hard to deliver; however, if staff could be assured of the same level of activity in 1997 as in 1996, it would be appropriate to add the amount. Mr. McCabe stated that the $100,000.00 figure will be on the table for Council to consider on Budget Day, March 3, 1997. He cautioned against adding the amount at this time, but added that in his view the projections are conservative. Councillor Galloway asked that this issue be revisited on or before Budget Day, but indicated for his part he wishes to be assured of a net increase in revenues. Councillor Jake Smola enquired whether the Department is considering the cross training of building and fire inspection staff, and Mr. Witmer replied that discussion in this area has begun, but pointed out that this may be more difficult in Kitchener than in Waterloo, given that there are two separate unions involved. The previous motion by Councillor C. Weylie to adopt the budget for the Planning and Development Department was voted on and Carried. Ms. Houston reviewed the 1997 Operating Budget for Council noting a 1 per cent increase and no increase in honorarium. Councillor Lorentz noted that it speaks well for this Council that it did not include a salary increase in the 1997 pro forma budget. Councillor Yantzi questioned how Council could support even a 1 per cent increase in this budget, as some have indicated there is an interest in keeping the 1997 mill rate at the 1996 level. He suggested that approving a 1 per cent increase would be contrary in principal. On a motion by Councillor C. Weylie, it was resolved: "That the 1997 Operating Budget for Council be adopted." Ms. Houston reviewed the 1997 Operating Budget for the Mayor's Office, noting a 2.8 per cent increase. Councillor Redman moved the 1997 Operating Budget for the Mayor's Office as submitted. 1997 OPERATING BUDGET - CONT'D Councillor Galloway questioned the $2000.00 increase in meeting expenses, and suggested that this amount should be reduced to zero and discussed at a later date. Councillor Yantzi agreed that this is above the rate of inflation and he would not personally support any increase over 2 per cent. Councillor Wagner suggested that more detail is required before making a decision, and Mr. Neil advised that Mayor Christy is an extremely active Mayor in terms of meetings attended. FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 24, 1997 -17- CITY OF KITCHENER On a motion by Councillor M. Yantzi, it was resolved: "That the proposed $2000.00 increase for meeting expenses in the 1997 Operating Budget for the Mayor's Office be eliminated." On a motion by Councillor K. Redman, it was resolved: "That the 1997 Operating Budget for the Mayor's Office be adopted, as amended." Ms. Houston reviewed the 1997 Operating Budget for the Chief Administrative Officer's Department, noting a 1.8 per cent increase. Councillor Galloway referred to the possibility of including in the Department's budget a communications/media officer which was previously discussed by Council, with no decision made on whether this would be a new employee or a re-allocation of existing staff. Mr. Gazzola confirmed that there is no allocation for such a position in any department budget at this time. On a motion by Councillor K. Redman, it was resolved: "That the 1997 Operating Budget for the Chief Administrative Officer's Department be adopted." Ms. Houston reviewed the Operating Budget for the Human Resources Division noting an 8.7 per cent increase. She explained that the budget reflects a $41,000.00 correction for an item which was previously in the Capital Budget and should have been in the Operating Budget. Mr. Gazzola elaborated that for the last five years the staff person working on the PeopleSoft system has been charged to the Capital Budget. Mr. Paterson further clarified that the incumbent was brought into the Division on a temporary basis to do another person's work, and the salary for that individual was charged to Capital. Councillor Vrbanovic enquired how long the services of the temporary employee would be required, and Mr. Paterson replied that in his view this is a full-time position. Councillor Vrbanovic questioned when Council would receive a report on whether or not to retain this employee on a full-time basis, and Mr. Gazzola replied that this would be part of a package of information which includes other changes in the Human Resources Division. Councillor Vrbanovic advised that it was his hope the PeopleSoft automated system would result in staff reductions, and Mr. Gazzola responded that when the system becomes operational, the City will be looking at reductions. Councillor Galloway referred to the $26,000.00 expenditure attributed to this budget for re-organization, and requested information on the previous re-organization of the Administrative Services Department. Mr. Gazzola replied that the Human Resources Division became the responsibility of the Chief Administrative Officer, the Information Services Division, of the Commissioner of Finance, and the Transit Division, the General Manager of Public Works, and that at present there has been no salary increase for any of these positions. Councillor Ziegler asked for a breakdown of the anticipated savings from all of the department re-organizations to the present, as well as a corresponding analysis of how the job re-evaluation system has impacted these savings. Councillor Jake Smola put forward a motion to request that the Chief Administrative Officer 1997 OPERATING BUDGET - CONT'D review the current job evaluation process, and effective immediately, all job evaluations and re- evaluations under the current system be frozen pending a review and decision by Council. Councillor B. Vrbanovic disclosed a pecuniary conflict of interest and abstained from all voting and discussion concerning the City's job evaluation system as his wife is employed in the Information Services Division and her job rating is presently under review. Councillor John Smola suggested that some latitude should be given for selected job re- evaluations which could be submitted directly to Council for consideration. Mr. Gazzola advised that there are some instances where it would be unfair to delay and he suggested that these should reviewed by Council, in Caucus. FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 24, 1997 -18- CITY OF KITCHENER Councillor Jake Smola amended his previous motion to reflect the suggestion of Councillor John Smola that some re-evaluations be considered directly by Council. He also included a further request for information and analysis of how the job evaluation system has worked to date with regard to the various departmental re-organizations. He also imposed a four week deadline for the report. Councillor Jake Smola accepted, as a friendly amendment, a further suggestion by Councillor K. Redman that all applications for evaluation and re-evaluation be submitted to the Chief Administrative Officer for consideration by Council in-camera. On a motion by Councillor Jake Smola, it was resolved: "That the Chief Administrative Officer review the City's current job evaluation system and report on how it could be improved, and pending a decision on the future of the system, all evaluations and re-evaluations be forwarded to the Chief Administrative Officer who will in turn submit them for consideration at a meeting of Council in-camera; and further, That a further report be submitted by the end of February, 1997 outlining how the job evaluation system has worked from the first of the recent series of department head retirements and subsequent departmental re-organizations up until the present." Councillor B. Vrbanovic previously disclosed a pecuniary conflict of interest and abstained from all voting and discussion concerning the City's job evaluation system as his wife is employed in the Information Services Division and her job rating is presently under review. On a motion by Councillor M. Wagner, it was resolved: "That the 1997 Operating Budget for the Human Resources Division be approved." Ms. Houston reviewed the Operating Budget for the Fire Department, noting a 3.5 per cent increase. In response to a question, Deputy Chief Kuntz advised that the date for Firefighter arbitration talks has been set at February 26, 1997. Mr. Gazzola added that the budget only includes salary figures reflecting the 1996 and 1997 combined salary and wage increase of 2 per cent and does not aniticipate the outcome of any arbitrated settlement. Councillor Lorentz enquired as to the status of the home alarm system initiative, and Fire Chief Hancock replied that staff are preparing a request for proposal, and are about to receive commercial and industrial signals. He added that revenue streaming will begin in 1997, but at this point estimates are uncertain, and as a result only $10,000.00 has been budgeted. Mr. Gazzola added that in future it is likely there will be significant gains in this area; however, at present, the City has to concentrate on getting Waterloo hooked up to the system. 1997 OPERATING BUDGET - CONT'D On a motion by Councillor K. Redman, it was resolved: "That the 1997 Operating Budget for the Fire Department be approved." Ms. Houston reviewed the Operating Budget for the Finance Department, noting a 2.3 per cent decrease. On a motion by Councillor G. Lorentz, it was resolved: "That the 1997 Operating Budget for the Finance Department be approved." FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 24, 1997 -19- CITY OF KITCHENER Ms. Houston then reviewed the status of City Reserves and Reserve Funds. Councillor Galloway questioned the amount in the Working Capital Reserve Fund which is used to finance municipal obligations prior to receipt of interim taxes. Councillor Galloway pointed out that the City has a significant investment in reserves and it is incumbent upon Council to rationalize these from time to time. Mr. Gazzola agreed to provide, prior to Budget Day, a rationalization of the amount in the Working Capital Reserve Fund. Ms. Houston reviewed the Equipment Pool Reserve Fund, noting that the amount represents the undepreciated value of equipment owned by the City. She added that the fund levels fluctuates with the cost of acquiring equipment, particularly in years when the cost of acquisition is above the norm. Councillor Ziegler asked that on Budget Day, information be provided outlining the most recent instance of the Equipment Pool Reserve Fund being depleted, and how the Fund has worked since this previous adjustment was made. Mr. Gazzola referred to the Election Reserve Fund, and advised that it will be necessary to replace the City's votematic equipment as it is insufficient to accommodate possible scenarios resulting from the Province's changes to the Election Act. He also noted that for the first time the municipality will have the authority to pass election expenses on to the Region, the School Boards and the Hydro Commission, and that this will offset in expenses whole or in part the cost of acquiring a new system. Ms. Houston reviewed the Sick Leave Reserve Fund, and noted that at present it is being funded at less than 20 per cent of liability. Councillor Galloway questioned why the City is budgeting for a $1,000,000.00 liability in 1997 when the 1996 amount was $800,000.00. Mr. Gazzola replied that the automatic transfer allows the City to budget for worst case scenarios. Councillor Galloway suggested a $1.4 million transfer from the revenue fund rather than the $1.5 million amount budgeted. Mr. Gazzola replied that this would be possible; however, neither the liability amount nor the bottom line would change. Councillor Ziegler referred to a report previously requested by Council in regard to how the City could change the current sick leave payout and asked for clarification of who would report and when. Mr. Paterson advised that this direction was put into the mandate for all bargaining units. He also noted that there is a potential replacement plan; however, the unions will not continue discussions until they know the disposition of the old plan. Councillor Ziegler asked whether Mr. Paterson obtained information concerning how other municipalities handled this and Mr. Paterson advised that he gave the material he had gathered to Mr. Gazzola who is free to release it at any time. The Committee held over consideration of the remainder of the Reserve Funds pending consideration of the balance of the Board and Department Operating Budgets. Ms. Houston reviewed the 1997 Operating Budgets for the Boards of the Kitchener Public Library and the Centre in the Square, noting a combined increase of 1.1 per cent. 1997 OPERATING BUDGET - CONT'D Ms. M. Walshe, and Ms. S. Franzen appeared on behalf of the Kitchener Public Library Board, and Mr. D. Donaldson and Ms. M. Batchelor, on behalf of the Centre in the Square Board. Councillor Wagner enquired as to the impact of the Library Board grant reductions announced by the Province, and Mr. Gazzola replied that the grants will disappear entirely, with a $95,000.00 loss in 1997, and a further $285,000.00 by March of 1998. Councillor Galloway enquired how the City would deal with the anticipated reductions and whether this would be the responsibility of the City or the Library Board. Mr. Gazzola replied that at present it is the municipality's responsibility to fund the Library and noted that the KPL Board has little flexibility in terms of user fees. Ms. Walshe added that if the Library were to charge user fees in areas where it is not authorized to do so, it would lose it's Provincial grant. She added that there are some new freedoms being considered, but none of these would have a significant budget impact. Ms. Walshe also noted that the Board has approved a salary freeze in 1997 and 1998 and it previously granted a 1 per cent increase in 1995. Ms. Walshe indicated that the Library has absorbed as much of the Provincial grant loss as it can. Councillor Vrbanovic enquired where the savings associated with the removal of the bookmobiles, FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 24, 1997 - 20 - CITY OF KITCHENER as well as the funds generated by non-resident user fees are reflected in the budget. Mr. Walshe replied that the bookmobile impact is scattered throughout various budget lines, and that the revenues referred to, approximately $30,000.00, have been placed in a reserve account which is not reflected in this budget. Moved by Councillor M. Wagner, "That a 1997 municipal appropriation for the Kitchener Public Library Board in the amount of $5,448,000.00 be approved." Councillor Jake Smola enquired as to the actual dollar value of the proceeds from the sale of bookmobile equipment, and Ms. Walshe replied that it was approximately $40,000.00. He then enquired where this amount should be transferred to, and Mr. Gazzola advised that in his view, it should flow through as a windfall, perhaps to the Tax Stabilization Reserve Fund. Councillor Ziegler enquired as to the status of a bookmobile replacement, and referred to the possible purchase of an ELF unit. Ms. Walshe replied that the Board has looked at all service delivery options in this regard, and is planning a survey to determine the best way to deliver this service. Councillor Vrbanovic enquired as to how the City had handled the Library Board's Provincial grant reduction in 1996; specifically, whether there was a motion directing that this would be absorbed by either the Board or the City. Mr. Sosnoski replied that the January 22, 1996 minutes reflect that there was a $97,000.00 reduction in 1996, half of which was absorbed within the 1996 library Board budget. He advised that there was no specific motion directing how the grant reductions would be dealt with; however, Councillor Galloway had advised that he was opposed in principal to subsidizing Provincial grant reductions and noted that approximately $50,000.00 in 1996 Provincial cuts had yet to be offset through the Library budget. Mr. Sosnoski advised that Mr. Gazzola had suggested the Library Board budget be further reduced by $50,000.00 which is reflected in the final amount of the appropriation approved by Council. Councillor Vrbanovic suggested that the Library Board consider keeping all proceeds from the sale of the bookmobile and the related savings, and that these be placed in a reserve fund which would be used to implement an appropriate service delivery alternative. Councillor Wagner advised that he would not accept the suggestion of Councillor Vrbanovic as a friendly amendment, and added that in his view, the Board should deal with the Library budget, and not Council. The previous motion by Councillor Wagner to approve the 1997 appropriation for the Library Board was voted on and Carried. 1997 OPERATING BUDGET - CONT'D Moved by Councillor B. Vrbanovic, "That the Kitchener Public Library Board be asked to consider establishing a reserve fund to finance an alternate form of service delivery to replace the former bookmobile service, with said fund to be comprised of the proceeds from the sale of the bookmobile equipment as well as the revenue from non-resident user fees." Ms. Walshe commented that without additional staff, adding new services at this time would seriously strain existing resources. She also added that as early as 1998, Provincial direction may require libraries to provide services to schools. Councillor Wagner indicated his opposition to the motion, and suggested that the Board administration is responsible for library operation and should not receive detailed direction from Council. Councillor Galloway noted that the 1995 1 per cent salary increase for Library staff should be part of any direction given by Council regarding reductions within the budget to offset wage increases. The previous motion by Councillor B. Vrbanovic to request consideration by the Board of a suggestion to establish a reserve fund to replace the bookmobile service was voted on and Carried. Ms. Houston highlighted the Operating Budget for Centre in the Square noting an overall 1 per FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 24, 1997 -21 - CITY OF KITCHENER cent increase. On a motion by Councillor M. Wagner, it was resolved: "That a 1997 municipal appropriation for the Centre in the Square in the amount of $1,097,000.00 be approved." Councillor Galloway pointed that it would be his intention that the Centre in the Square also be subject to budget reductions to offset 1.5 per cent of the 2 per cent salary increase. In this regard, he suggested that the Centre should be treated the same as the City's operating departments. Mr. Donaldson advised that in this case, the Board would prefer an overall grant reduction, with the latitude to find the savings in any area of it's budget. He further advised that the 1996 operating surplus would be approximately $60,000.00, $30,000.00 of which would go to fund Centre expenses, and 50 per cent of the remaining amount be returned to the City surplus. Ms. Houston reviewed the budgets for Contractual Services, noting a combined reduction of 1.3 per cent. It was also noted that the Project Lift budget includes a 2 per cent salary increase identical to that of City departments. Mr. D. Smith, General Manager, was in attendance on behalf of Project Lift. On a motion by Councillor G. Lorentz, it was resolved: "That a 1997 municipal appropriation for contractual services for Project Lift in the amount of $639,000.00 be approved." On a motion by Councillor G. Lorentz, it was resolved: "That a 1997 municipal appropriation for contractual services for the K-W Humane Society in the amount of $326,000.00 be approved." The meeting then recessed at 1:30 p.m. and reconvened at 2:20 p.m. with all Committee members present except R. Christy, Councillors Jake Smola and B. Vrbanovic. 1997 OPERATING BUDGET - CONT'D Ms. Houston reviewed the Operating Budget for the Parks and Recreation Department noting an overall increase of 2.6 per cent. A breakdown of the Special Events budget and related activities from 1994 to 1997 was circulated this date. It was also noted that the Administrative Review Committee deleted a proposed $38,000.00 increase in special events funding. Mr. Price requested that $27,000.00 be budgeted in 1997 to properly fund the events the City is currently involved in and which attracted approximately 100,000 people in 1996. Councillor Lorentz enquired as to private sponsorship in 1997, and Mr. Price advised that the City receives a lot of service-in-kind sponsorship as opposed to cash contributions. Mr. Gazzola clarified that the 1996 budget was $275,000.00 and the Administrative Review Committee is recommending $279,000.00 in 1997; the department is requesting $318,000.00. Councillor Redman suggested that it is time to stop asking staff and community volunteers to stage special events on a shoe string budget. On a motion by Councillor K. Redman, it was resolved: "That $38,000.00 be added to the Special Events budget of the Parks and Recreation Department." On a motion by Councillor G. Lorentz, FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 24, 1997 - 22 - CITY OF KITCHENER it was resolved: "That the 1997 Operating Budgets for the following areas of the Parks and Recreation Department be approved: Administration; Marketinq and Promotions; Parks Operations; Culture and Special City Events; and, Aquatics." Ms. Houston then reviewed the remainder of the Parks and Recreation Department budget. "That the 1997 Operating Budgets for the following areas of the Parks and Recreation Department be approved: Senior Citizens and Special Needs; Community Development; Auditorium and Farmers' Market; Arenas/Athletics/Desiqn and Development; and, Cemeteries. Ms. Houston then reviewed the Operating Budgets and Six Year Projections for the Rockway and Doon Valley Golf Club Enterprises. On a motion by Councillor K. Redman, it was resolved: "That the 1997 Operating Budgets for the Doon Valley and Rockway Golf Course Enterprises be approved." Ms. Houston reviewed the General Revenues and Expenses budget, noting a $994,000.00 Provincial grant reduction. Councillor John Smola requested a report, by Budget Day, on the impact of raising the interest rate paid to a property owner on taxes rebated as a result of Assessment Review Board decisions. On a motion by Councillor K. Redman, it was resolved: "That the 1997 Budget for General Revenues and Expenses be approved." 1997 OPERATING BUDGET - CONT'D The Committee then resumed consideration of City Reserves and Reserve Funds. In reference to the Telephone Reserve Fund, Mr. Gazzola advised that the City is considering the purchase of a new system in 1997, noting that the life expectancy of the current system is 7 years and that it has been in operation for approximately 10 years. Councillor Galloway enquired as to the purpose of the Farmers' Market Reserve Fund, and Mr. Gazzola replied that in the past, money had been budgeted to cover repairs to the parking garage; however, with the sale of this facility, the fund will be used to pay rent owing for the Market space as well as possible relocation expenses. On a motion by Councillor G. Lorentz, it was resolved: "That the City Reserves and Reserve Funds be adopted as presented." Ms. Houston confirmed that staff would be bringing forward a report, on Budget Day, concerning the per capita debt of area municipalities. Councillors Jake Smola and B. Vrbanovic entered the meeting at this time. Councillor Galloway referred to his previous motion of January 20, 1997 in which he proposed that 1.5 per cent of the 2 per cent increase in wages and fringe benefits in the 1997 budget be offset through corresponding dollar reductions in the City's overall salary, wages and fringe benefits envelope. He indicated his interest in changing this recommendation to give staff more flexibility by allowing the savings to come from City budgets other than those relating to salary and wages. FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 24, 1997 - 23 - CITY OF KITCHENER Moved by Councillor T. Galloway, "That the 1997 Operating Budget be further reduced by $871,000.00 corresponding to 1.5 per cent of the 1996/1997 salary increase of 2 per cent, with these reductions to come from any area of the department Operating Budgets, or contributions from Capital, on the understanding that these reductions are not to result in significant program or service reductions; and further, That the above also apply to the Kitchener Public Library Board, the Centre in the Square Board and Project Lift." Councillor Galloway expressed his confidence that all departments will be able to find the required 1.5 per cent without resorting to layoffs. Mr. Gazzola responded that staff are prepared to take a hard look at the proposed reduction. He suggested that the goal can probably be accomplished, but it will be difficult to say whether service levels will be impacted, as it is difficult to find this amount of money within the organization in the form of duplication or waste. Mr. Gazzola clarified that the City already uses gapping as a method saving money during the hiring process, and suggested that staff positions cannot be eliminated without a service impact. Councillor Ziegler suggested that there may have to be insignificant service reductions. Councillor Yantzi suggested that a reduction of this magnitude will affect service levels and suggested that the reduction should be in the order of 1 per cent rather than 1.5 per cent. Councillor John Smola suggested that the 1.5 per cent reduction is too deep a cut, especially given the Provincial downloading and transfer payment reductions. He indicated that he would support the motion at this time only if there is a list of options available for discussion by Council on Budget Day. Councillor Lorentz offered the view that although the reductions to date are commendable, they are not sufficient. Councillor Weylie enquired as to possible discussions concerning the contracting of Legal and Human Resources services. Councillor Ziegler replied that there is a need to determine whether there are savings in this area as well as the possibility of offering these services to other municipalities on a fee-for-service basis. He suggested discussing this at an upcoming roundtable meeting. Mr. Gazzola asked Council 1997 OPERATING BUDGET - CONT'D to consider the fact that Waterloo has reduced it's grants by 20 per cent, 10 per cent in each of 1996 and 1997; whereas, Kitchener decreased grants by 5 per cent in 1996 alone and is planning to fund 1997 grants at 1996 levels. He enquired whether this is one of the areas where savings could be realized to offset the 1.5 per cent, and Councillor Ziegler suggested that this would be a separate issue from the motion put forward by Councillor Galloway. Councillor Redman advised that she is not committed to a zero per cent tax increase in 1997; however, she is committed to a strong two-tier system of government emphasizing the need for lower tier municipalities to work better together. She suggested that one significant area of economy is in salaries, and offered the view that as much of the 1.5 per cent as possible should come from the salary and wage envelope. She also suggested that the City should investigate incentive or performance pay. She indicated that she would support the motion based on the need to demonstrate a measure of control over salaries. Councillor Wagner stated that he would support the motion, though somewhat reluctantly, as it is his belief that a zero per cent increase for it's own sake is totally wrong, and to attempt this because it is an election year is definitely wrong. He expressed his confidence that staff could find further economies while maintaining service levels and stressed that he does not want to see any reductions in services or programs. Councillor Vrbanovoic stated that not withstanding that it is an election year, he believes it is possible to attain a zero per cent increase and that this is consistent with the wish of the community. He suggested that once the budget process is completed, Council should continue with it's review of core services. Councillor Jake Smola advised that he would support the motion as he has been consistently in favour of zero per cent. Councillor Galloway argued that despite significant revenue increases, it is important to control the tax base if the municipality wishes to control expenditures. He suggested that the kindest way to reduce expenditures by department is to give staff the opportunity to be creative and reduce costs themselves. The previous motion by Councillor T. Galloway to further reduce the 1997 Operating Budget in the amount $871,000.00 was voted on and Carried. FINANCE & ADMINISTRATION COMMITTEE MINUTES JAN UARY 24, 1997 - 24 - CITY OF KITCHENER Councillors John Smola and M. Yantzi requested that they be recorded as opposed to the motion. NEXT MEETING The Budget recommendation of the Finance and Administration Committee will be presented to Council on Budget Day, March 3, 1997. ADJOURNMENT On motion, the meeting adjourned at 4:15 p.m. G. Sosnoski Manager of Corporate Records/Assistant City Clerk