HomeMy WebLinkAboutFinance & Admin - 1998-04-16 SFAC\1998-04-16-SPE
APRIL 16, 1998
FINANCE & ADMINISTRATION COMMITTEE MINUTES
CITY OF KITCHENER
The Finance and Administration Committee met this date in special session commencing at 9:15 a.m.,
and Chaired by Councillor J. Ziegler with the following members present: Mayor C. Zehr, Councillors T.
Galloway, Jake Smola, B. Vrbanovic, J. Haalboom, G. Lorentz and C. Weylie. Councillors K. Taylor-
Harrison, M. Yantzi and John Smola were in attendance for part of the meeting.
Others present: Ms. P. Houston, Ms. J. Jantzi, Ms. C. Oliver, Ms. J. England, Ms. S. Roberts, Ms. R.
Upfold, Ms. S. MacDonald, Mrs. J. Koppeser. Messrs. J. Gazzola, J. Shivas, T. McCabe, R. Arnot, T.
Clancy, J. McBride, J. Cicuttin, M. Grummett, J. Hancock, E. Kovacs, R. W. Pritchard, L. F. Parkhouse, L.
Proulx, D. Paterson, D. Hergott, B. Musselman, D. Snow, J. O'Rourke, J. McBride, O. den Ouden, B.
MacDonald, L. Gordon and G. Sosnoski.
1. PROPOSED CORPORATE COMMUNICATION DIVISION
The Committee was in receipt of a report from a team comprised of staff members from various
City departments dated March 18, 1998 recommending the establishing of a Corporate
Communication Services Division reporting to the Chief Administrative Officer, with a review of
said Division to take place after six months.
Ms. Jantzi spoke on behalf of the team and in the absence of the Chair, Ms. Gina Luciantonio.
She explained that staff were asked to look into measures to improve the City's public relations
and marketing functions and provided an overview of the staff report and appendices. Ms. Jantzi
noted that at present the marketing function within the City is decentralized and that most
municipalities surveyed have a centralized function for marketing, public relations and graphic
services. She explained that four possible models were developed as outlined in the report and
that the staff team is recommending the model listed as 2B involving centralized corporate public
relations and graphic services with marketing resources. Ms. Jantzi then reviewed the evaluation
criteria and the services to be provided noting that the cost of the new Division would be
approximately $420,000.00, $350,000.00 of which relate to salaries. She explained that the team
envisions seven full-time employees for the Division, with some of these positions being filled
through transfer of existing staff from other City departments. Ms. Jantzi requested the
Committee's endorsement of the staff recommendation.
Councillor Vrbanovic questioned the rationale for retaining marketing related budget funds in
individual departments, and Ms. Jantzi suggested that this would be appropriate in order that the
Department could purchase specialized services from the new Division rather than using more
costly, private services. Councillor Vrbanovic enquired as to the feasibility of a total transfer of
current positions within the municipality relating to these functions as opposed to the partial
transfer recommended. Ms. Oliver replied that the group felt it was appropriate for some
departments, as originators of the work, to keep some expertise in their respective areas.
Councillor Vrbanovic noted that the special events function is not in the final recommendation and
questioned why it is not included. He noted that other municipalities such as North York have
merged the special event staff into the unit proposed. Ms. Oliver replied that initially the staff team
considered nine staff including special events and protocol positions; however, it was felt that the
added cost was inappropriate at this time and that this type of model could be worked toward in
the longer term. Councillor Vrbanovic indicated his support for the concept, but expressed
concern over the dollar amount involved.
Councillor K. Taylor-Harrison entered the meeting at this time. Mayor Zehr indicated his interest in
the consolidated aspect of the recommendation; however, expressed concerns over the amount of
money involved. He questioned whether it would be possible to review the staff proposal and
accomplish the intent using existing resources and on a revenue neutral basis. Ms. Jantzi argued
that at present there are insufficient resources and expertise to address all areas within the
proposed Division.
Ms. Clancy responded from the perspective of the Parks and Recreation Department, noting that
at present four staff in his area perform the marketing function. He expressed concern that
centralizing these resources would not assure the same level of marketing service as at present,
and that this is critical given that there is a direct relationship between this service and the
Department's ability to generate revenue. He commented that he is sceptical the level of service
can be maintained as promised.
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CITY OF KITCHENER
PROPOSED CORPORATE COMMUNICATION DIVISION - CONT'D
Councillor Haalboom questioned how the City could measure the benefits of the proposed new
Division, and Ms. Oliver replied that from the marketing side an improvement in this area should
result in increased revenues. Councillor Lorentz enquired whether the Kitchener Public Library
and Centre in the Square had been approached concerning the potential for shared services, as it
was his understanding both organizations have marketing expertise in-house. Mayor Zehr
suggested that formation of a new Division may not be required as much as an individual assigned
with responsibility for co-ordinating the various marketing and communications functions currently
performed. He suggested that this is a less costly and more gradual approach which could be
expanded over time. Ms. Oliver replied that the recommendation contemplates new work over and
above what is presently being done, and as a result additional resources are required. Councillor
Vrbanovic suggested that this may be accomplished through further secondments and a more co-
ordinated approach.
Councillor B. Vrbanovic put forward a motion that the structure of a Corporate Communications
Services Division be approved in principle, pending a report from the Chief Administrative Officer
in regard to an alternate funding model, the possible combination of special events functions and a
review of the Division following its formation.
Councillor Vrbanovic stressed the need to develop the recommended approach using existing
resources and with limited, new funding. He then accepted as a friendly amendment, a suggestion
from Councillor Haalboom that a mechanism be developed to benchmark and measure the
benefits of the proposed Division.
Councillor Galloway pointed out that the history of this initiative originates with the City's lack of a
Communications Officer or someone to perform public relations and communication functions. He
noted that the original suggestion was to hire a consultant, and that staff suggested this function
be performed in-house. He stressed that the primary focus was the corporate communications
function and that it has not been demonstrated this function will not be lost in all the discussion
about marketing of City services. Councillor Galloway noted that the Mayor's suggestion of a co-
ordinator appeals to him, and that he would not wish to see individual Department marketing
weakened by the initiative proposed. Ms. Jantzi pointed out that the Corporate Communications
Officer position is listed as one of the recommended staff and the duties are outlined in the report
and the recommended model. Councillor Galloway expressed concern that given the structure of
the proposed Division, too much of the Communication Officer's time may be taken up with other
Divisional administrative functions. Ms. Jantzi assured Councillor Galloway that this would not be
the case. In response to a further question, Mr. Gazzola agreed that six weeks would be a
reasonable amount of time for him to report on an alternate funding model.
A brief discussion took place concerning promotion funding currently provided by the City to the
Visitor and Convention Bureau and the possibility of the proposed Division undertaking some of
this promotion itself. Councillor Vrbanovic advised that a group has been formed to look into the
matter.
Councillor Vrbanovic declined to accept, as a friendly amendment, a suggestion from Councillor
Jake Smola that the functions of the Visitor and Convention Bureau be considered as part of the
proposed Communications/Marketing initiative.
The main motion by Councillor B. Vrbanovic was then voted on, as amended.
PROPOSED CORPORATE COMMUNICATION DIVISION - CONT'D
On a motion by Councillor B. Vrbanovic,
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APRIL 16, 1998
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CITY OF KITCHENER
it was unanimously resolved:
"That Council approve, in principle, the creation of a Corporation Communication Services
Division as referred to the staff report dated March 18, 1998, and that no final decision in
this regard be made pending a review of the staff recommendation and a report to the
Finance and Administration Committee within 6 weeks outlining a funding model whereby
the proposed Division could be staffed using existing employees and/or in partnership with
other agencies such as the Kitchener Public Library and the Centre in the Square, and with
any necessary departmental restructuring and job description modifications; and,
That in preparing his report, the Chief Administrative Officer include a recommendation as
to whether the special events function should be combined in the proposed Division, and if
so an indication of timing considerations and comment on how the positions will be filled;
and further,
That in the event the above Division is created, goals and objectives be developed and a
method of continually measuring and monitoring the benefits of such a Division, with
progress to be reviewed by Council every 6 months during the first two years of the
Division's operation."
Councillor Lorentz suggested that the issue of the Visitor and Convention Bureau be discussed at
the upcoming Twin City dinner, and Mayor Zehr agreed to put this item on the agenda, noting that
concerns have been expressed by other funding parties.
Councillor M. Yantzi entered the meeting at this time.
1998 OPERATING BUDGET REVIEW
The Committee was in receipt of an outline of the 1998 Operating Budget as recommended by the
Administrative Review Committee, a list of Operating Budget reductions and potential efficiency
adjustments, as well as a list of 1998 pre-Budget approvals.
Ms. Houston provided an overview of the 1998 Operating Budget, noting that the City has a $2.9
million share of the $9 million impact of downloading by the Province, with this amount comprising
a 4.45 per cent impact on the levy. She added that City increases of approximately $1.6 million
add approximately 2.47 per cent, and negative assessment growth had a .56 per cent impact. The
resulting 7.48 per cent potential increase was then reduced as a result of Administrative
Committee Review by $2.2 million with the current tax increase presently standing at
approximately 4 per cent. Ms. Houston explained that as directed by Council, a three year plan
was developed to defray the impact of the recent Provincial changes which would result in a 1998
levy increase of 4 per cent and an additional 1 per cent in each of the years 1999 and 2000. She
further noted that if agreed to by Council, the 4 per cent increase would result in the City's portion
of the tax bill increasing by approximately $25.00 for the average household. She also pointed out
that budget figures assume no assessment growth.
Councillor Galloway indicated that he was pleased to see the efforts made by staff in reducing the
budget amount, noting that when last discussed, the City was facing an 11 per cent increase. In
response to further questions, Ms. Houston advised that the Province has since reduced the City's
reduction target by approximately $300,000.00 or .50 per cent, this as a result of mathematical
errors in the Province's initial calculation and revisiting of some of the components questioned by
the City.
It was requested that at the April 20 meeting, staff share ideas concerning a
communications plan in regard to the City's budget situation, and it was also requested that
at that time staff advise as to the 1998 impact on an average household with an
1998 OPERATING BUDGET REVIEW - CONT'D
assessment of $140,000.00 of possible increases of 5.3 per cent by the Region, 4 per cent by the
City and .46 per cent on the Province's education portion, and Ms. Houston indicated that an
estimate could be made based on preliminary figures.
Ms. Houston then reviewed the details of the 3 year phase-in plan noting that Departmental
budget reductions of approximately $1 million are required in 1998, approximately $1 million in
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CITY OF KITCHENER
1999 and $692,000.00 in 2000. She noted that this has an annualized impact of approximately
$1.6 million. She referred to the impact on the Tax Stabilization Reserve Fund with $1.6 million
being transferred in 1998, and the City's dependency on this fund being reduced to zero over the
next five years. She pointed out that a $300,000.00 per year surplus from the gas utility is being
assumed for budget purposes and that this is a conservative estimate based on changes in gas
industry de-regulation. It was also noted that the Province's one-time unconditional grant of $2.4
million has been put in the stabilization reserve fund. Ms. Houston also pointed out that except for
a minor housing subsidy, virtually all Provincial subsidies have been removed, and that two to
three years ago these totalled approximately $15 million.
Ms. Houston then reviewed the changes made by the Administrative Review Committee and
reviewed various slides relating to past and anticipated assessment growth. Councillor Galloway
noted that assessment has declined recently due to successful appeals in regard to commercial
and industrial properties, but that residential construction is strong and should perhaps warrant
budgeting of a higher residential assessment. Ms. Houston cautioned that based on anticipated
Provincial delays; staff have not budgeted for growth as it is uncertain whether supplementary
residential assessments will be available prior to early 1999.
Ms. Houston pointed out that given the changes by the Province, the dollar impact of a 1 per cent
increase is $658,000.00, or $6.08 on the average household with a market value of $130,000.00.
Ms. Houston then reviewed the analysis and budget reductions by department, noting that in the
absence of Provincial downloading, taxes would have decreased by .5 per cent.
Councillor Jake Smola referred to the expenditure reductions by department and questioned why
reductions in the Parks and Recreation Department are proportionately Iow relative to the amount
of the departments overall budget. Ms. Houston explained that staff developed the reduction plan
so as to have the least negative impact on direct services to the public.
Ms. Houston then reviewed anticipated 1998 revenues, and Mayor Zehr questioned whether it
would be more appropriate to report Kitchener's portion of the Transit operation alone, rather than
including the contribution by Waterloo, as this resulted in the City assuming a larger percentage of
the Provincial reduction target. Ms. Houston advised that she would check with the City's auditors
to determine whether this can be done. Councillor Galloway pointed out that Transit was not the
only operation interpreted to the City's detriment by the Province when it calculated its reduction
targets, and referred to the Cemeteries and other City enterprises. He noted that other
municipalities reported expenditures differently and as a result benefitted in terms of a lower
reduction target.
Ms. Houston reviewed an analysis of changes in the levy from 1997 to 1998, as well as the City's
mill rate performance in relation to the consumer price index, noting that in regard to the latter the
City has been very close to the index over the past ten years.
Ms. Houston then reviewed the 1998 Operating Budget for Contract Services involving the
Humane Society and Project Lift. Mr. D. Smith, General Manager and Ms. Janice Walsh,
Treasurer, were in attendance on behalf of Project Lift.
Ms. Houston noted a 1.8 per cent increase in accordance with the Humane Society contract and
an increase of approximately 104 per cent to the Project Lift budget, directly due to the elimination
of Provincial subsidies.
1998 OPERATING BUDGET REVIEW - CONT'D
Councillor Galloway asked for an estimate, by Budget Day, of the cost to the City of having
the Humane Society provide basic wildlife retrieval services.
Mayor Zehr enquired whether Project Lift had made any changes to the cycling of vehicle
replacements, as has been done in the Transit Division. Mr. Smith replied that the Province had
required the City to be on a 7 year cycle in conjunction with its grant; however, the industry
estimate of optimal life is 5 years, after which major repair costs can be anticipated. He suggested
that this would suggest that the cycle should decrease from the present level. Mayor Zehr
expressed concern that with the elimination of the grant, the subsidy rates may differ between
Kitchener and Waterloo and that there is need to co-ordinate action in this regard. Mr. Gazzola
pointed out that historically, agreement is required between both parties before establishing
FINANCE & ADMINISTRATION COMMITTEE MINUTES
APRIL 16, 1998 - 53 -
CITY OF KITCHENER
service levels.
Councillor John Smola pointed out that a Project Lift task force is currently looking at service
delivery options, and that it may be premature at this time to eliminate and reduce dispatch hours
as recommended as this will work against recent initiatives to increase ridership. Councillor Smola
suggested that it may be more appropriate to implement the preferred reduction of the Project Lift
Board; namely, reduce ambulatory customer rides by a percentage equivalent to the $9,000.00
saving which would result from the dispatch adjustments. Mr. Smith would advise as to the exact
percentage reduction required to meet this target. Ms. Walsh supported the comment of
Councillor John Smola and indicated that the Board preferred this reduction of the basis that it
impacts only a portion of the Project Lift ridership; whereas, the dispatch changes would affect all
riders. Councillor Vrbanovic suggested that it may be worthwhile examining the possibility of
combining Project Lift and other City dispatch functions, possibly as a continuous improvement
project. Councillor John Smola advised that Project Lift is looking into this possibility as well.
On a motion by Councillor John Smola,
it was resolved:
"That the 1998 Operating Budgets for Contract Services involving the Humane Society and
Project Lift be approved, subject to the following reductions and/or efficiency adjustments:
Reduction in ambulatory customers rides
$ 9,000.00."
Ms. Houston then reviewed the 1998 Operating Budget for the Corporate Services Department,
noting a net budget decrease of 1.2 per cent.
Councillor Galloway enquired whether any further licence fee increases are being considered, and
Mr. Parkhouse replied that costs are now legislated for business and lottery licences; however,
there may be the potential for an additional $10,000.00 to $15,000.00 in revenue based on
Provincial changes involving break-open tickets.
Councillor Galloway referred to comments he had received from organizations expressing concern
over the cost of services related to public use of the City Hall rotunda. Councillor Jake Smola
referred to the Council/Staff committee referenced in the draft Corporate Goals and Objectives
charged with examining this and related issues. Councillor Vrbanovic asked that the staff
representatives be selected as soon as possible and the process begun. Mr. Pritchard reported
that Mr. den Ouden has been appointed to Chair the above Committee and that staff are currently
selecting representatives from Parks and Recreation and Facilities Management. Councillor Jake
Smola referred specifically to the feasibility of allowing Facilities Management staff to assume
maintenance responsibilities for all City owned facilities, as opposed to the current involvement of
Parks and Recreation staff and possible duplication.
1998 OPERATING BUDGET REVIEW - CONT'D
On a motion by Councillor Lorentz,
it was resolved:
"That the 1998 Operating Budget for the Corporate Services Department be approved, as
submitted."
The Committee then recessed for lunch at 12:25 p.m. and reconvened at 1:10 p.m.
Ms. Houston reviewed the 1998 Operating Budget for the Public Works Department, noting an
overall 9.5 per cent increase and recommended reductions/efficiencies totalling approximately
$307,000.00.
Councillor Galloway questioned the impact of eliminating half of the temporary staff in the
Operations Division for a savings of $28,000.00. Mr. Kovacs replied that this item relates to the
maintenance of drainage systems, which would now be less structured. He stressed that staff feel
they can still do the work with the remaining resources; however, this will not be done as quickly as
FINANCE & ADMINISTRATION COMMITTEE MINUTES
APRIL 16, 1998 - 54 -
CITY OF KITCHENER
in the past, and a minimum of public inconvenience is expected.
Councillor Yantzi enquired as to the status of the garbage rebate program, and it was indicated
that it is still in place, with no recommendation to remove it. Councillor Galloway asked that the
earlier report in this regard from Mr. Gyorffy be re-circulated to members of Council prior to
Budget Day.
Councillor Lorentz enquired as to possible savings due to the recent mild winter, and Mr. Kovacs
replied that the first half of the season was less costly than the 5 year average, and Mr.
Musselman added that savings could total as much as $1/4 million. Councillor Lorentz expressed
concern over maintenance of the Voisin Greenway given the proposed elimination of student
brush cutters given that the Greenway backs directly onto residential lots. Mr. Musselman advised
that to a great extent, such work would not be completed in the same manner or timeframe as in
the past. Councillor Haalboom questioned whether there was any possibility of greater public
involvement in maintaining public watercourses, and Councillor Lorentz pointed out that the City
applies a consistent standard to vegetation along water- courses, including naturalization
initiatives, and that public involvement may jeopardize the standardized approach to maintenance
and affect the appearance of the watercourses.
Councillor Jake Smola expressed an interest in revisiting the business plan relative to the
installation of computerized salt spreaders in order to determine if the savings have been realized
in the magnitude anticipated.
In reference to the Street Lighting budget, Councillor Lorentz questioned whether staff are tracking
the savings as a result of light conversions. Ms. Houston replied that savings will only appear in
the budget at the end of 1999 when the City has paid off the capital debt relative to conversion
costs. She noted that over the past years, the City has used the savings totalling approximately
$300,000.00 a year to offset debenture charges. Mr. Gazzola advised that for Budget Day,
staff will bring back a report outlining the energy usage figures for street lighting over the
past numbers of years.
A brief discussion took place as to the implication of a selective reduction in lighting during certain
times of the day. Mr. Snow replied that the savings would be insignificant as lights are now only
on for 12-1/2 hours per day on average. Mr. Kovacs pointed out that the majority of the system is
already operated on photo cells, and also pointed out that a number of initiatives emanating from
the Safe City Committee will likely lead to increased lighting costs. Councillor Galloway suggested
that even a minor reduction, in the area of 15 minutes, could result in significant energy savings
across the entire City, and Mr. Snow replied that he could enquire with Hydro to determine
anticipated savings. He pointed out that at present the City's usage is not metered, but is based
on calculations involving the average cost per luminaire. Mr. Kovacs advised that he would
speak with Hydro representatives in order to verify the energy rate currently being charged
to the City.
1998 OPERATING BUDGET REVIEW - CONT'D
Ms. Houston then reviewed the 1998 Operating Budgets and Five Year Forecasts for the Water
Works, Gas Works and Sewer Surcharge.
A brief discussion took place concerning additional initiatives to reduce costs by initiating projects
to further reduce the City's leak and infiltration rate. Mr. Kovacs advised that this had been studied
at the Regional level and Kitchener was found to have one of the better performance records in
this regard. Councillor Galloway acknowledged that the City had the lowest INI rate at 15 per cent;
however, there may be the possibility of up to $1 million in additional savings if this could be
lowered. He requested that a cost/benefit analysis be undertaken to weigh the relative merits of
spending additional funds to reduce the INI rate in order to realize further savings on sewer
surcharge costs. Councillor Ziegler asked that a report in this regard be submitted for
consideration at a future Public Works and Transportation Committee meeting. Mr. Kovacs
pointed out that this is currently being addressed in part by initiatives involving video inspection of
older parts of the sewer system, with subsequent repairs, and the installation of flow measuring
devices to signal possible problems in the collection system.
On a motion by Councillor G. Lorentz,
it was resolved:
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CITY OF KITCHENER
"That no action be taken to eliminate the student brush cutter positions in the Operations
Division of the Public Works Division."
Councillor Galloway advised that in reference to his earlier comments concerning the City's
garbage rebate program, elimination of this program in regard to multi-residential owners would
result in a $400,000.00 saving.
Councillor Jake Smola referred to previous discussion of an equipment purchase in regard to the
leaf collection program. Mr. Kovacs indicated that there would be a need for two pieces of
equipment, included in the Capital Budget, and that the amount in the Operating Budget assumes
economies would result from this purchase.
Councillor Ziegler asked for a report prior to Budget Day outlining the equipment purchase
and the corresponding effect on the Capital and Operating Budgets. Mr. Gazzola pointed out
that no capital equipment would be purchase until the Operating Budget review was completed.
On a motion by Councillor G. Lorentz,
it was resolved:
"That the 1998 Operating Budget for the Administration, Operations, Street Li.qhtin.q, Gas
and Water Utilities and Sewer Surchar,qe of the Public Works Department, be approved,
subject to the following reductions and/or efficiency adjustments:
· Reduction in Engineering Temporary employees $ 32,000.00
· Shift change implementation-Operations $ 47,000.00
· Garbage collection/tip fee reduction for bulk containers$ 50,000.00
· Chip crew to crack sealing $17,000.00
· Eliminate half of temporary staff - Operations $ 28,000.00."
Ms. Houston reviewed the 1998 Operating Budget for the Traffic and Parkinq Division, noting that
reductions are recommended in Traffic totalling $13,000.00, and in Parking totalling $44,000.00.
2. 1998 OPERATING BUDGET REVIEW - CONT'D
On a motion by Councillor Jake Smola,
it was resolved:
"That the 1998 Operating Budget for the Traffic and Parkinq Division be approved, subject
to the following reductions/efficiency adjustments:
Implement shift proposal as per best management practices
Convert Lot #1 from cashier to pay and display parking
(assuming no garage)
Charge $1 to park in Duke and Ontario garage on Saturday
$ 13,000.00
$
$ 2,000.00."
12,000
Ms. Houston then reviewed in 1998 Operating Budget for the Transit Division, noting that the
majority of the projected increase relates to the elimination of a $2.1 million Ministry of
Transportation Ontario Grant. She also referred to further reductions totalling $60,000.00.
Councillor Galloway enquired whether staff are projecting an additional increase in revenue
through an increase in ridership, and Mr. Cicuttin replied that 1.5 per cent growth is forecast in
1998, this being the same growth as was experienced in 1997.
Councillor Jake Smola referred to the City's increased use of natural gas buses and asked that, at
a future date, a report be submitted to the Finance and Administration Committee comparing fuel
and maintenance economies between diesel and natural gas buses. He also asked that the issue
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APRIL 16, 1998 - 56 -
CITY OF KITCHENER
of filling station payback based on current and proposed conversions be addressed in the report.
On a motion by Councillor M. Yantzi,
it was resolved:
"That the 1998 Operating Budget for the Transit Division be approved, subject to the
following reductions/efficiency adjustments:
· Eliminate co-op student $10,000.00
· Reduce part-time operators $ 50,000.00."
Ms. Houston then reviewed the 1998 Operating Budget for the Economic Development Division,
noting a 4.9 per cent increase.
Ms. Houston clarified that the budget figures relate to the current, as opposed to any proposed
staff complement. Mayor Zehr enquired as to the amount budgeted for promotions, and Councillor
Vrbanovic questioned whether this figure is adequate. Ms. Gibaut advised that in terms of
promotion, the Economic Development Department is grossly underfunded for a City of its size
and that an appropriate budget amount depends on the direction the City wishes to take. She
suggested that in her view, the City should be spending on marketing Kitchener and the Canada's
Technology Triangle. Councillor Vrbanovic suggested an additional $20,000.00 to $30,000.00 be
put in this budget, and it was further suggested by Councillor Ziegler that any action in this regard
be delayed pending completion of the Department re-organizational study.
On a motion by Councillor B. Vrbanovic,
it was resolved:
"That the 1998 Operating Budget for the Economic Development Division be approved as
submitted."
Ms. Houston then reviewed the 1998 Operating Budget for the Legal Department noting a 2 per
cent increase, and additional, suggested increases in user fees totalling $15,000.00 in revenue.
Mayor Zehr questioned the basis for the substantial fee increases, particularly as they relate
1998 OPERATING BUDGET REVIEW - CONT'D
to subdivision development, and suggested that before taking any action in this area there
should be consultation with the parties affected. Mr. Shivas responded that most of the fees are
new for Kitchener, though the majority of other municipalities currently charge some or all of these.
He advised that the fees constitute a modest entry into the area of recovering legal costs related
to development, noting that the fees are well within cost recovery. Notwithstanding this, he
expressed some concern over the concept of charging out legal fees as this may raise questions
as to who the lawyer represents and result in a perception that staff are too closely aligned with
developer's interests. Councillor Vrbanovic enquired as to how the amounts proposed relate to
charges by other municipalities, and Mr. Shivas replied that in most instances the proposed fees
are lower. Councillor Ziegler expressed an interest in receiving a copy of the comparison study of
legal fees charged by other municipalities.
Councillor Jake Smola enquired as to how the City's Legal Department budget relates to other
municipalities either having in-house staff or contracting the services of a private law firm. Mr.
Shivas replied that the City's budget compares reasonably well, but pointed out that dollar to dollar
comparison of costs between in-house and private legal staff is difficult as Kitchener operates a
number of processes which would not be handled by private law firms. Ms. Houston added that
the City also has a number of enterprises which other municipalities do not operate, and as a
result, such a comparison is difficult and complex. Councillor Haalboom offered the view that the
City does not recover enough of its costs relative to subdivision processes. Councillor Vrbanovic
questioned who the City would contact to obtain input on the proposed fees, and Mr. McCabe
advised he could provide the Legal Department with an industry list.
Councillor Jake Smola enquired as to the 1997 amount paid by the City for outside legal advice,
and Mr. Shivas advised that a rough estimate suggests approximately $160,000.00, about
$97,000.00 of which relates to the gas utility, most of the latter being recoverable from the Energy
Commission. Councillor Ziegler suggested that it may be more meaningful to have outside legal
FINANCE & ADMINISTRATION COMMITTEE MINUTES
APRIL 16, 1998 - 57 -
CITY OF KITCHENER
advice charges which now appear in different department budgets consolidated and reported as
part of the Legal Department budget.
On a motion by Councillor B. Vrbanovic,
it was resolved:
"That the 1998 Operating Budget for the Le.qal Department be approved; and further,
That no action be taken at this time in regard to the proposed fees, and that discussion as
to the suitability of such fees take place at a later date."
Ms. Houston then reviewed the 1998 Operating Budget for the Finance Department noting a 0.6
per cent increase and additional reductions/efficiencies totalling $224,000.00.
On a motion by Councillor G. Lorentz,
it was resolved:
"That the 1998 Operating Budget for the Finance Department be approved, subject to the
following reductions/efficiency adjustments:
· Reduction in Corporate audit fees $ 17,000.00
· Reduction in Corporate insurance premiums $120,000.00
· Increased tax certificate revenue $ 15,000.00
· Reduction in part-time Revenue staff $ 16,000.00
· Reduction in telephone costs (Purchasing) $ 1,000.00
· Reduction in Information Services staff $ 12,000.00
· Reductions in forms, deposit slip system $ 5,000.00
· Increased NSF charge to $25.00 $ 3,000.00
· Reduction in Accounting staff $ 35,000.00."
NEXT MEETING
The next regularly scheduled meeting of the Finance and Administration Committee to review the
1998 Operating Budget will be held on Monday, April 20, 1998.
ADJOURNMENT
On motion, the meeting adjourned at 4:30 p.m.
Manager of Corporate
Records/Assistant City Clerk