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HomeMy WebLinkAboutFinance & Corp - 2004-06-21FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21 ~ 2004 CITY OF KITCHENER The Finance and Corporate Services Committee met this date, commencing at 12:10 p.m. Present: Chair - Councillor B. Vrbanovic Mayor C. Zehr and Councillors C. Weylie, J. Smola, J. Gazzola and G. Lorentz, M. Galloway. Staff: R. Browning, Interim Chief Administrator Officer P. Houston, General Manager, Financial Services & City Treasurer G. Stewart, General Manager, Development & Technical Services F. Pizzuto, General Manager, Downtown Development C. Ladd, General Manager, Strategic Services S. Turner, Director of By-law Enforcement J. Willmer, Director of Planning R. Gosse, Director of Legislated Services F. McCrea, Assistant City Solicitor J. Sheryer, Assistant City Solicitor D. Quinn, Director of Utilities J. Koppeser, Manager of Licensing R. Goetz, Senior Financial Analyst L. Masseo, Manager, Design and Development D. Kerr, Design & Construction Technologist D. Gilchrist, Committee Administrator CRPS-04-1 10 - EXEMPTION FROM MUNICIPAL CODE CHAPTER 450 (NOISE) - CALVARY MEMORIAL UNITED CHURCH - 91 GRUHN STREET - JUNE 26, 2004 The Committee was in receipt of Corporate Services Department report CRPS-04-110, dated June 16, 2004, in response to a request received from Calvary Memorial United Church, 91 Gruhn Street, for an exemption from City of Kitchener Municipal Code Chapter 450 (Noise) with respect to an event to take place there on June 26, 2004. It was resolved: "That an exemption from Chapter 450 (Noise) of the City of Kitchener Municipal Code be granted to the Calvary Memorial United Church on June 26, 2004, from 1 p.m. to 4 p.m., for an outdoor picnic involving live music." CRPS-04-112 - COMMUNITY FESTIVAL DESIGNATION OUR LADY OF FATIMA FESTIVAL 1548 FISCHER-HALLMAN ROAD SEPTEMBER 4 & 5, 2004 The Committee was in receipt of Corporate Services Department report CRPS-04-112, dated June 15, 2004, with respect to a request received from Our Lady of Fatima Festival for designation of their event as a Community Festival. It was resolved: "That the City of Kitchener has no objection to the issuance of a liquor licence for Our Lady of Fatima Festival Committee for an event to be held September 4 and 5, 2004 at 1548 Fischer-Hallman Road, Kitchener, provided a building permit is obtained for the erection of any tents; and further, That the event be declared a 'Community Festival' for the purpose of applying for a liquor licence, since this is a traditional Portuguese celebration of their heritage that promotes unity and understanding within our community." FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21,2004 - 91 - CITY OF KITCHENER CRPS-04-118 - PERMISSION TO OPERATE A MERRY-GO-ROUND VICTORIA PARK JUNE 26 & 27 AND AUGUST 20-22, 2004 The Committee was receipt of Corporate Services Department report CRPS-04-118, dated June 16, 2004 with respect to a request from staff to seek a vendor to set up a merry-go-round in Victoria Park during the Multi-cultural Festival and Kids Park this year. It was resolved: "That the request of City staff for an unspecified vendor to operate a merry-go-round in Victoria Park on June 26-27 and August 20-22, 2004 be approved, provided the necessary licence, including TSSA certificates, is obtained; and further, That proof of public liability insurance in the amount of $2,000,000, naming the City of Kitchener as an additional insured must be submitted." CRPS-04-116 - REQUEST FOR FOOD AND MERCHANDISE VENDORS CRUISING ON KING STREET JULY 10, 2004 The Committee was in receipt of Corporate Services Department report CRPS-04-116, dated June 16, 2004, with respect to a request received from the Kitchener Downtown Business Association to invite 6 food vendors and 5 merchandise vendors to sell on Civic Square and King Street during the Cruising on King Street event to take place on July 10, 2004. The request from the Kitchener Downtown Business Association includes locating 3 children's air bounce activity units in the parking lot of the Forsyth Building, for the same event. It was resolved: "That the request of the Kitchener Downtown Business Association be approved to invite 6 food vendors and 5 merchandise vendors to sell on Civic Square and King Street during Cruising on King Street on July 10, 2004, provided the necessary licence is obtained, including Health and Fire approval; and further, That the request from the Kitchener Downtown Business Association to locate 3 children's air bounce activity units in the parking lot of the Forsythe Building be approved, provided that proof of public liability insurance in the amount of $2,000,000 naming the City as an additional insured is provided." CRPS-04-119 - REQUEST OF K.D.B.A. FOR FOOD VENDORS ON CITY PROPERTY ACROSS FROM 125 KING STREET WEST JUNE 24-26, 2004 The Committee was in receipt of Corporate Services Department report CRPS-04-119, dated June 16, 2004, with respect to a request received from the Kitchener Downtown Business Association for 2 food vendors to locate on City property across from 125 King Street West for their sidewalk sale to take place from June 24-26, 2004. It was resolved: "That the request of the Kitchener Downtown Business Association to locate two food vendors on City property across from 125 King Street West, during the sidewalk sale on June 24-26, 2004 be approved, provided the necessary licence, including Health and Fire approval, is obtained." CRPS-04-117 - REQUEST OF KiTCHENER OKTOBERFEST LIONS CLUB OUTDOOR PATIO ON CiViC SQUARE CRUISE DAY JULY 10, 2004 The Committee was in receipt of Corporate Services Department report CRPS-04-117, dated June 16, 2004, with respect to a request received from the Kitchener ©ktoberfest Lions Club to operate an outdoor patio on Civic Square during Cruise Day, July 10, 2004. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21,2004 - 92 - CITY OF KITCHENER CRPS-04-117 - REQUEST OF KiTCHENER OKTOBERFEST LIONS CLUB OUTDOOR PATIO ON CiViC SQUARE CRUISE DAY JULY 10, 2004 (CONT'D) It was resolved: "That the request of the Kitchener Oktoberfest Lions Club to operate a patio on Civic Square during Cruise Day, July 10, 2004, providing beer, coolers and bottled water be approved." CRPS-04-115 - REQUEST OF BBQ RIB COOKOFF AND CRAFT BEER SHOW SALE OF FOOD AND MERCHANDISE OPERATION OF BEER TENT VICTORIA PARK JULY 22-25, 2004 The Committee was in receipt of Corporate Services Department report CRPS-04-115, dated June 16, 2004, with respect to the BBQ Rib Cookoff and Craft Beer Show to be held in Victoria Park on July 22-25, 2004. It was resolved: "That the request of BBQ RibCookoff and Craft Beer Show to sell food and merchandise, and operate a beer tent in Victoria Park on July 22-25, 2004, be approved, provided the necessary licence, including Health and Fire approvals, is obtained." CRPS-04-113 - REQUEST FOR ENCROACHMENT AGREEMENT - 115 SOUTH DRIVE The Committee was in receipt of Corporate Services Department report CRPS-04-113, dated June 16, 2004, with respect to a request received from the owners of 115 South Drive for an encroachment agreement with the City of Kitchener to facilitate the building of a single family dwelling which will encroach on the City's sanitary sewer easement. The City's Engineering Services comment that they cannot support new construction on an existing easement. It was also noted that the existing structures on the property currently encroach onto this easement. Mr. S. Kay, solicitor for the property owners, was in attendance, and advised that the owners have received approval from the Committee of Adjustment to sever a parcel of land, on which they wish to construct a 1000 sq. ft. single family dwelling. A portion of the back of the proposed house will encroach approximately 2 ft. into a 20 ft. wide City easement. An extract from a reference plan was provided to Committee members. It was noted that the existing triplex on the property also encroaches 2 ft. into the easement, which has existed for 40 years. He noted that if the easement is not approved, the location for the house on the lot will have to change, which will require further Committee of Adjustment approval. He requested that the Committee approve an encroachment agreement. When questioned by Mayor Zehr, Mr. G. Stewart advised that a 2ft. encroachment into the easement would not affect the day to day operation of the sewer; however, when the sewer needs to be repaired or replaced, the encroachment will create a challenge. Mr. Kay responded that it is not impractical to work around a 2ft. encroachment, which still allows plenty of clearance to deal with repairs. Upon questioning Ms. Sheryer advised that the City has entered into agreements for encroachments for existing structures, and it is possible to establish costs in an agreement. Staff was directed to discuss with Mr. Kay appropriate clauses in an encroachment agreement dealing with additional costs which may be incurred by the City because of the encroachment, and holding the City harmless for any damage to the portion of the building on the easement. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21,2004 - 93 - CITY OF KITCHENER CRPS-04-113 - REQUEST FOR ENCROACHMENT AGREEMENT - 115 SOUTH DRIVE (CONT'D) On motion by Mayor C. Zehr it was resolved: "That consideration of the request of Octavian and Zlatina Candale for an agreement with the City of Kitchener for the existing triplex, shed, and proposed single family dwelling at 115 South Drive (severed and retained lands) to encroach on a City easement, be deferred and referred to the Council meetinq of June 29, 2004, to allow Legal Services and the property owners the opportunity to establish the terms for a potential agreement." 9. CRPS-04-099 - APPEAL TO LOCATE HOT DOG CART AT 176-A HAYWARD AVENUE - AND - CRPS-04-101 - APPEAL TO LOCATE HOT DOG CART AT 177 HAYWARD AVENUE The Committee was in receipt of Corporate Services Department report CRPS-04-099, dated May 25, 2004, with respect to an appeal filed with the City by Margaret Furey to the decision of the Manager of Licensing not to issue her a licence to operate a hot dog cart at 176-A Hayward Avenue. The Committee was also in receipt of Corporate Services Department report CRPS-04-101, dated May 31, 2004, with respect to an appeal filed with the City of Kitchener by Brian Power to the decision of the Manager of Licensing not to issue him a licence to operate a hot dog cart at his property, 177 Hayward Avenue. It was noted that consideration of these appeals had been deferred at the Council meeting of June 14, 2004, and referred to this meeting. In addition to the above noted reports, the Committee members were in receipt of a site plan of the property at 177 Hayward Avenue, and copies of an e-mail from Mr. J. McBride, dated June 18, 2004, outlining a conversation with Mr. Power, concerning accommodation of trucks attending the property to purchase food from the hot dog cart. He believes the operation of a hot dog cart at this location will have minimal impact on traffic operations; however, if on-street parking does occur, a No-stopping Zone may have to be implemented and enforced. He also advised that contact has been made by staff with Margaret Furey, who has been requested to submit a similar site plan of 176A Hayward Avenue as has been submitted for 177 Hayward Avenue. No such plan has been received. It was noted that although Mr. Power and Ms. Furey had registered as delegations for this meeting, only Mr. Power was in attendance. Councillor Gazzola questioned if a licence can be cancelled once issued, and staff advised a hearing must be held before a licence can be cancelled. A suggestion was made to allow Mr. Power a licence until the end of September, on the understanding that it can be extended if Council is satisfied no on-street parking problems have arisen as a result of the hot dog cart operation. On motion by Councillor J. Gazzola it was resolved: "That the appeal of Brian Powers to the decision of the Manager of Licensing not to issue a licence to operate a hot dog cart at 177 Hayward Avenue, pursuant to City of Kitchener Municipal code Chapter 586 (Refreshment Vehicle) be allowed; and, That subject to receiving Health and Fire approvals, a licence be issued to Brian Powers to operate a hot dog cart at 177 Hayward Avenue until September 30, 2004, at which time the applicant may apply for an extension of time for the licence; and further, That Traffic Enforcement Staff monitor the on-site and on street parking situation at 177 Hayward Avenue on a regular basis." FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21,2004 - 94 - CITY OF KITCHENER 9. CRPS-04-099 - APPEAL TO LOCATE HOT DOG CART AT 176-A HAYWARD AVENUE - AND - CRPS-04-101 - APPEAL TO LOCATE HOT DOG CART AT 177 HAYWARD AVENUE (CONT'D) On motion by Councillor G. Lorentz it was resolved: "That the appeal of Margaret Furey to the decision of the Manager of Licensing not to issue a licence to operate a hot dog cart at 176A Hayward Avenue, pursuant to City of Kitchener Municipal Code Chapter 586 (Refreshment Vehicles0, be denied." 10. CRPS-04-108 - LOCAL IMPROVEMENTS - ROTHSAY AVENUE Councillor B. Vrbanovic advised that he wished to speak to this matter, and Councillor M. Galloway assumed the chair at this time. The Committee was in receipt of Corporate Services Department report CRPS-04-108, dated June 10, 2004, recommending Council adopt a by-law authorizing construction of sanitary sewers and watermains on both sides of Rothsay Avenue, as a local improvement without petition. It is noted in the report that Council, on April 19, 2004, adopted a resolution to undertake the construction of sewers and watermains on both sides of Rothsay Avenue, from Natchez Road to 150 metres east of Forfar Avenue, as a City initiated local improvement, which also includes 1271 Victoria Street North and 12 Natchez Road. Staff advise, in the report, that as a result of Council's April 19th decision, notices of the local improvement were sent to the affected property owners. Three replies were received, each expressing concern with the cost, estimated at $510 per metre frontage, totalling approximately $30,000 per property, due to the large lots. Councillor Vrbanovic suggested that although information was provided to the residents after Council considered this matter in April, communications with the residents has been poor. It will cost each property owner approximately $30,000 to have their property connected to municipal water and sewer. As a municipality, we encourage property owners to connect to municipal services, and we should be assisting them to do so. At $30,000, what the residents are faced with is double taxes for the next 2 to 3 years. Ms. A. Kofler addressed the Committee advising that in the mid-1970s, the properties on Carson Drive were having problems with their water supply. Once this area of the City was annexed from the township, municipal water and sewer were installed on Carson Drive, but not on Rothsay Avenue. In 1986, residents on Rothsay Avenue received a letter from the City of Kitchener advising money would be allocated in 1988 to install municipal services on Rothsay Avenue, but nothing materialized. The cost to each property owner for this local improvement is excessive, and in prior years residents were assured that municipal services would be installed on Rothsay at the City's cost, and not the property owner's. Ms. Kofler then questioned why the group home constructed in this area was provided with municipal services, and what happened to the Kolb Drain. A map of this area was displayed, and it was pointed out by Mr. D. Kerr that the group home is close to Forfar Avenue, and they paid to have municipal serves extended to their property. With respect to costs, Mr. Kerr advised that the cost per meter of frontage is comparable to other parts of the City; however, these lots have much larger frontages than a standard urban lot. Further, installation of these services in conjunction with the forcemain reduces the cost slightly. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21,2004 - 95 - CITY OF KITCHENER 10. CRPS-04-108 - LOCAL IMPROVEMENTS - ROTHSAY AVENUE (CONT'D) Councillor Lorentz questioned installation of services in this area of the City, undertaken 15 years ago, and who bore the costs. Mr. Kerr responded that all of those works were undertaken as local improvements, except the City paid part of the cost because of the need for an extra deep sewer. Councillor Lorentz questioned whether these properties are assessed at a lower value because they are still on private services. Mr. Gosse responded that the Municipal Property Assessment Corporation (MPAC) advises these properties on Rothsay Avenue would have a market value the same as any other property. Mayor Zehr suggested two matters need to be investigated: whether the assessed value takes into consideration that the properties are on private services; and, whether the market value, as determined by the local real estate industry, is less because the properties have private services. Ms. Kofler questioned, being as these properties are in the floodplain, if municipal services are installed, what will happen if there is a flood. Mr. Kerr advised that the Kolb Drian will be installed in a couple of years, which should address any problems with flooding. It was noted by Mr. Kerr that this local improvement was initiated by the city, as a result of a letter from a resident. It was thought to be an appropriate time to install municipal services because some of the costs of the forcemain are being paid by the City. Mr. and Mrs. Morrisette addressed the Committee advising their property is the last house at the end of the project. They questioned whether the sewer and water pipes will extend the entire width of their property; as they do not want to pay for the entire frontage if the pipes don't travel the full width. They also requested that the pipes go the full width of the property so they don't have to dig-up part of their driveway to install the connections. Mrs. Morrisette questioned the 6% interest rate to be applied by the City to the unpaid balance. Ms. Houston advised 6% interest rate is a conservative estimate of debenture costs over the 10 year period, and the City will only charge the interest rate it actually has to pay. Mr. T. Piotto addressed the Committee stating he has been advised by MPAC that his property has been assessed as though it has full municipal services. He has been advised that he may be able to appeal his assessment but only for 1 year. Mr. Piotto also advised that due to a situation that occurred at Bingemans last year, two wells on Rothsay Avenue ran dry. Further, Rothsay Avenue is poorly maintained by the City. Mr. J. Penner advised the Committee he purchased his property 17 years ago. He was advised at that time, by the Mayor of the day, that municipal water and sewer would be forthcoming, and not to appeal his assessment. Mr. Penner stated he has already paid for municipal services through higher assessment, because his property has always been taxed as though it had full municipal services. Mr. and Mrs. Morrisette complained that the City only allowed residents 30 days to respond to the notice of this local improvement, which is not enough time to decide how to finance the $30,000. Further, 6% interest is too high. They questioned what the City did with the money, allocated by the City in 1986, for services on Rothsay Avenue. They also questioned what obligation there is on the part of the property owners to connect to municipal services, and what they are required to do with their existing septic systems. Several members of the Committee agreed consideration of this matter be deferred, and a public meeting be held to include the Ward Councillor, staff, and the residents. Staff were also directed to determine whether the subject properties have been appraised, for assessment purposes, as though they are on full municipal services. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21,2004 - 96 - CITY OF KITCHENER 10. CRPS-04-108 - LOCAL IMPROVEMENTS - ROTHSAY AVENUE (CONT'D) On motion by Councillor B. Vrbanovic it was resolved: "That consideration of the construction of sanitary sewers and watermains on both sides of Rothsay Avenue, form Natchez Road to 150 metres east of Forfar Avenue, as a local improvement without petition, in accordance with Section 2 of Ontario Regulation 119/03, made under the Municipal Act, 2001, be deferred and referred to the Finance and Corporate Services Committee meeting scheduled for August 16, 2004, to allow staff an opportunity to hold a public meeting with the affected property owners and the Ward Councillor, to provide information on the works to be undertaken, and receive their input." Councillor Vrbanovic assumed the chair at this time. 11, CRPS-04-114 - BY-LAW PURSUANT TO CITY OF KITCHENER MUNICIPAL CODE CHAPTER 665 (PROPERTY STANDARDS) 231 GRAND RIVER BOULEVARD The Committee was in receipt of Corporate Services Department report CRPS-04-114, dated June 16, 2004, recommending a by-law be passed with respect to authorizing exterior Property Standards repairs at 231 Grand River Boulevard, at the expense of the property owner. Investigations into the state of this property commenced in 2003, as a result of receipt of a complaint. The matter was scheduled to be heard by the Ontario Superior Court of Justice on April 20, 2004, prior to which the property owner and the City reached an agreement as to the time for compliance. A Consent Order was issued by The Honourable Justice Gordon on April 26, 2004, confirming the Order to Comply, extending the date for compliance to June 15, 2004, and ordering that where the property owner failed to comply with the Order the City may enter in and upon the property to repair the property, and bring it into compliance with the Order to Comply dated July 2, 2003. Mr. T. Bocchino appeared before the Committee in support of the staff recommendation. He advised the problems with the property at 231 Grand River boulevard have been ongoing for some time. He stated that if the City does not enforce its by-laws, there is no point in having them. Further, he advised he has worked with staff in this regard, and he appreciates all the work staff has undertaken. Councillor M. Galloway assumed the chair at this time to allow Councillor Vrbanovic to participate in the following discussion. Mr. G. Windsor, property owner, addressed the Committee advising that he regrets the current situation. He stated he has been a victim of a fire, and is still dealing with insurance companies and multiple legal issues. In addition, he advised that he has a permanent disability, and other medical illnesses. He stated he has undertaken some of the work, and acknowledged there are still things to be done. He advised some of the difficulty he has experienced in completing this work is due to the difficulty in hiring contractors because of the housing boom in the City. Mr. Windsor estimated that 90% of the work has been completed, and requested the Committee defer any action at this time, and allow him to continue working with City staff. In response to questioning by the Committee, Mr. Windsor advised that most of his neighbours, except Mr. Boccino, are satisfied with the progress being made on his property. It was because of Mr. Boccino that he had to go to Superior Court. The fire he previously referred to happened in 1977. At the current time, Mr. Windsor advised he is involved in three court actions. When questioned by the Committee, Mr. Turner advised that he visited the property at 231 Grand River Boulevard earlier this date, and he does not agree the work is 90% complete. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21 ~ 2004 - 97 - CITY OF KITCHENER 11, CRPS-04-114 - BY-LAW PURSUANT TO CITY OF KITCHENER MUNICIPAL CODE CHAPTER 665 (PROPERTY STANDARDS) 231 GRAND RIVER BOULEVARD (CONT'D) Councillor Vrbanovic acknowledged the legal and medical difficulties experienced by the property owner; however, he stated the neighbours have been patient, and the time has come for the City to take further action. He moved the recommendation in the staff report. On motion by Councillor B. Vrbanovic it was resolved: "That a by-law be considered at the special Council meeting of June 21, 2004, authorizing exterior Property Standards repairs at 231 Grand River Boulevard, at the expense of the property owner, where the work has not been completed by the owner on or before June 15, 2004; and further, That the repairs undertaken shall be of a standard consistent with the neighbourhood." Councillor Vrbanovic assumed the Chair at this time. 12. REPORTS REGARDING 2004 DEVELOPMENT CHARGES · FIN-04-031 - 2004 DEVELOPMENT CHARGES BACKGROUND STUDY · SSD-04-025 ECONOMIC DEVELOPMENT ADVISORY COMMITTEE RECOMMENDATION RE: TRANSITIONAL RATES · SUMMARY OF PHASE-IN RATES · FIN-04-032 - 2003 DEVELOPMENT CHARGES RESERVE FUN D The Committee was in receipt of several staff reports with respect to the City's Development Charges, proposed for 2004 and subsequent years, as well as an accounting of the 2003 Development Charge Reserve Fund. The reports include: Financial Services Department report FIN-04-031, dated May 28, 2004, with respect to the 2004 Development Charges Background Study, which had been considered by this Committee on June 7, 2004. Strategic Services Department report SSD-04-25, dated June 1, 2004, advising of a recommendation adopted by the City's Economic Development Advisory Committee on May 26, 2004, with respect to the delayed implementation of increased Development Charges by the City and the Region of Waterloo, this report having also been considered by this Committee on June 7, 2004. Other reports before the Committee this date with respect to Development Charges include a Summary of Phase-in Rates, which had been provided to City Council on June 14, 2004, and Financial Services Department report FIN-04-032 containing the 2003 annual statement of the Development Charges Reserve Fund. Ms. Houston advised the two main components before the Committee this date are the background study and the 2003 accounting of the Development Reserve Fund. She reviewed this process to date, noting staff has presented the original background study to this Committee on April 19th. A revised background study had been presented on June 7th, at which time this Committee requested phase-in options. Those options were provided to Council on June 14th, and are also attached to the agenda for this meeting. Mr. D. Reid, Eastforest Homes and Decora Homes, addressed the Committee advising of his confusion as to which rates are being recommended. Ms. Houston responded that the rates presented to this Committee on June 7th are still being recommended by staff. The other rates in the cart are what would be required if the rates are phased-in, but are not recommended by staff. Mr. Reid also questioned why the Development Charges for townhouses have increased at a greater rate than for other residential structures. Ms. Houston responded that household FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21,2004 - 98 - CITY OF KITCHENER 12. REPORTS REGARDING 2004 DEVELOPMENT CHARGES · FIN-04-031 - 2004 DEVELOPMENT CHARGES BACKGROUND STUDY · SSD-04-025 ECONOMIC DEVELOPMENT ADVISORY COMMITTEE RECOMMENDATION RE: TRANSITIONAL RATES · SUMMARY OF PHASE-IN RATES · FIN-04-032 - 2003 DEVELOPMENT CHARGES RESERVE FUN D (CONT'D) types have changed based on the assumption as to how many people will live in each type of dwelling. Mr. Reid requested the Committee review the increased figures, and consider a phased-in implementation: the first phase to be January 1, 2005, and the second to be June 1, 2005. Such a time table will allow the construction industry to make the necessary changes. Mr. J. Kaufman, President of the Waterloo Region Home Builders Association, addressed the Committee, advising the Association is the voice of residential construction in the Region, and consists of 225 member companies. The industry has had 4,000 starts per year for each of the last 3 years. He stated that the industry and its customers need time to accommodate the increase in development charges. These increases will result in fewer sales and consequently, lay-offs. He requested the City delay implementation of the increased development charges to allow the industry time to manage them. He recommended a phase- in of the increased rates, the first phase to commence January 1, 2005, and the second, July 1,2005. Councillor Gazzola stated the industry should have been aware that Development Charge rates were due to increase. He stated that basically, the methodology of calculating rates has not changed, and new residents are buying into a partnership because of all the facilities this municipality has to offer. He questioned what the impact will be if the increase in development charges is not phased-in. Mr. Kaufman responded the increases are substantial, and one of many other increased costs. New home owners need time to accommodate this increase into their budgets. Mr. M. Sinden, Deerfield Homes, advised the Committee that his company is developing townhouse condominium projects, which they see as being affordable housing. He spoke of the assumptions for persons per unit, stating 2.8 ppu is a reduction from previous calculations. Mr. P. Armbruster of Activa Group next addressed the Committee stating that he agrees development charge rates should pay for future growth; however, the industry is price sensitive, and these increases will have an impact on demand. He suggested Council pass a by-law for a 3-4 month period, allow an opportunity for further review and consultation, then consider the matter further in September. When questioned, Ms. McCrea advised a by-law could be passed for a shorter period of time, and the maximum time frame is 5 years. Mayor Zehr questioned what Mr. Armbruster is trying to accomplish, and he responded that he wants to make certain the numbers are correct. Upon further questioning, Mr. Armbruster advised that industry representatives, on the Regional Development Charges Sub-committee, will be making a presentation to Regional Council later this week. He suggested further review of the proposed City of Kitchener development charges is necessary in order to consider the outcome of Regional Council's consideration of their development charges. Further, if development charge increases become effective January 1, 2005, it will coincide with the annual increases in other construction costs. Mr. P. Britton, MHBC Planning, was the next delegation to address the Committee with respect to the proposed 2004 Development Charges. He stated that the methodology used to arrive at the proposed rates has changed substantially. He stated infrastructure needs to be appropriately planned, and the City and industry should not pay more than their share. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21,2004 - 99 - CITY OF KITCHENER 12. REPORTS REGARDING 2004 DEVELOPMENT CHARGES · FIN-04-031 - 2004 DEVELOPMENT CHARGES BACKGROUND STUDY · SSD-04-025 ECONOMIC DEVELOPMENT ADVISORY COMMITTEE RECOMMENDATION RE: TRANSITIONAL RATES · SUMMARY OF PHASE-IN RATES · FIN-04-032 - 2003 DEVELOPMENT CHARGES RESERVE FUN D (CONT'D) Development Charges are a method of quantitative taxation, which affects people who have not yet purchased a home. Mr. Britton stated he wants to work towards a consensus on the numbers and the infrastructure to be included. Mr. Britton continued by stating that changes have been made, by the City, in the way these development charges have been calculated. The City is required to undertake a qualitative as well as quantitative assessment, and the later has not been done. He noted that the calculation of service level standards does not include current unused capacity, which needs to be included in the calculation. The population figures are conservative, and there needs to be a public process to discuss population figures. The Region's population figures should not be the only figures used. Mr. Britton then questioned how the Development Charge Reserve Fund is calculated, and accounted for, and how the phase-in amounts have been calculated. He suggested and exercise be undertaken to deduct the funds for a project from the capital costs at the outset rather than as cashflow. Mayor Zehr questioned Mr. Britton as to population growth figures for the City of Kitchener, if he considered that the Region's predictions are not accurate. Mr. Britton responded that in time the City of Kitchener would accommodate a larger portion of the Region's population growth. The population figures being used to determine development charges do not include the proper demographics, and do not reflect properly in the persons per unit calculations. Mayor Zehr cautioned Mr. Britton that if there is to be a deferral of the new development charges, the rates would have to be increased. Mr. Brittion responded that he is not so concerned as to the actual rates, as much as whether the infrastructure included is appropriate, and the rates are fairly calculated. Councillor Gazzola questioned whether Mr. Britton thought the municipality would gain if the rates are incorrect. He responded that if the money from development charges is used by the municipality to finance infrastructure assumed to be growth related, but is not growth related, the municipality would gain by not having to borrow as much money, or would tax less. When questioned by the Committee, Ms. McCrea advised that the municipality can not subsidise future development, and one kind of development can not subsidise another. She advised she would like to investigate the matter further, and have discussions with the Region's Solicitor. Mayor Zehr stated it is premature to give an opinion as to phasing-in the rates. If the increase in development charges is postponed, and the rates are not increased accordingly, the increase in costs will automatically have to be transferred to the tax base. Councillor Gazzola questioned what the situation would be if the by-law is passed and it is later determined there is a clerical error in the rates. Ms. McCrea advised a clerical error can be amended; however, and amendment to the by-law to change an error in the rates would be open for appeal. Mr. Brian Blackmere advised the Committee that more time is needed for the consultative process. He advised his request is to have the increase in development charges deferred until January 1, 2005. Such a delay would allow all existing contracts to come to fruition without having to go back to the purchasers and ask for more money. He agreed with Mr. Britton that FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JUNE 21,2004 - 100 - CITY OF KITCHENER 12. REPORTS REGARDING 2004 DEVELOPMENT CHARGES · FIN-04-031 - 2004 DEVELOPMENT CHARGES BACKGROUND STUDY · SSD-04-025 ECONOMIC DEVELOPMENT ADVISORY COMMITTEE RECOMMENDATION RE: TRANSITIONAL RATES · SUMMARY OF PHASE-IN RATES FIN-04-032 - 2003 DEVELOPMENT CHARGES RESERVE FUN D (CONT'D) a number is a number; however, he questioned how much the market can bear. He also questioned how much it will cost to deliver the necessary infrastructure. Mr. K. Ingram of Custom Leather advised that he has purchased land in the Grand River Development Park, and proposes to construct a 70,000 sq. ft. building. As he is awaiting final approval of a rezoning application, he is still waiting to apply for his building permit. He advised he does not want to have to pay increased development charges for a development project commenced before the by-law. Mr. Willmer responded that this situation may not be unique, and it is possible to apply for a building permit before a zone change is finalized. Mr. P. Puopolo, PEIL, requested a 3 month deferral of rate increases, and that the rates be phased-in. These rates need to be incorporated over a space of time. He noted that the affordability for entry level lots is a major concern. Mr. Puopolo noted that London has phased-in its development charge increases, and he believes such a process would work fairly. Mr. J. Vernhout advised the Committee that the Region has held firm on urban expansion, and land prices have increased. He advised he specializes in the area of parks and recreation, and there has been a huge change in the way these development charges have been calculated. For example, there has been a huge change in the replacement cost model, which has included cemeteries, which is neither a park nor a recreation. Further, the Civic Square Ice Rink should not be included. He advised that there needs to be more time to review the numbers and the process. Mayor Zehr moved that consideration of the development charges as recommended by staff be deferred to the June 29th Council meeting. Further, he requested the following: advice as to whether a by-law can be passed for a period less than 5 years; a common legal opinion between the City and the Region, and the establishment of a date to implement residential development charges. Ms. Houston advised that staff commenced its work on a new development charges by-law in the middle of 2003. The process has been delayed because the Region took a long time to provide population figures. The City's public consultation process commenced in April 2004. With respect to this Committee's request for staff to consult further with the industry, Ms. Houston advised that staff will present Council with a list of the stakeholders' issues and staffs' response, prior to next week's Council meeting. On motion by Mayor C. Zehr it was resolved: "That consideration of 2004 Development Charges and a Development Charge By-law be deferred and referred to the Council meeting scheduled for Tuesday June 29, 2004." JUNE 21,2004 FINANCE & CORPORATE SERVICES COMMITTEE MINUTES - 101 - CITY OF KITCHENER 13. ITEMS DEFERRED UNTIL JUNE 29, 2004 There will be a special meeting of the Finance and Corporate Services Committee on Tuesday June 29, 2004, commencing at 4 p.m. in the Council Chamber, 2® Floor, Kitchener City Hall, to consider the following matters: SSD-04-028, Corporate Employee Development Program; FIN-04-029, Natural Gas Rates - Interruptible Customers; FIN-04-024, Investment Policy; FIN- 04-033, Asset Management Strategy Update and PowerPoint Presentation - 2005-2007 Budget Targets. 14. ADJOURNMENT On motion, the meeting adjourned at 3:30 p.m. Dianne Gilchrist Committee Administrator