Loading...
HomeMy WebLinkAboutFCS Agenda - 2022-08-081 KiTc�ivER Finance and Corporate Services Committee Agenda Monday, August 8, 2022, 1:30 p.m. - 3:00 p.m. Council Chambers - Hybrid City of Kitchener 200 King Street W, Kitchener, ON N2G 4G7 The City of Kitchener has aligned with provincial changes to COVID-19 restrictions and City Hall is now open for in-person services, however appointments are still encouraged. Council and Committees of Council are now being offered in a hybrid format and welcome delegate participation either in-person or electronically. Those people interested in participating in this meeting can register online using the delegation registration form at www.kitchener.ca/delegation or via email at delegation (a)kitchener.ca. For in-person delegations, registration can be facilitated up until the start of the meeting. For those who are interested in participating electronically, registration will be required 2 hours prior to the scheduled start of the meeting. The meeting live -stream and archived videos are available at www.kitchener.ca/watchnow Please refer to the delegations section on the agenda below for registration deadlines. Written comments will be circulated prior to the meeting and will form part of the public record. *Accessible formats and communication supports are available upon request. If you require assistance to take part in a city meeting or event, please call 519-741-2345 or TTY 1-866-969-9994.* Chair: Councillor K. Galloway-Sealock Vice -Chair: Councillor S. Davey Pages 1. Commencement 2. Consent Items The following matters are considered not to require debate and should be approved by one motion in accordance with the recommendation contained in each staff report. A majority vote is required to discuss any report listed as under this section. 2.1. Uncollectable Miscellaneous Receivable Accounts Write -Off June 2022, 3 FIN -2022-308 2.2. Uncollectable Utility Receivable Account Write -Off, FIN -2022-309 6 2.3. Waterloo Region Small Business Centre - Three Party Municipalities 9 Agreement, DSD -2022-370 2.4. 200 Ding Street West - Ground Floor - Lease, DSD -2022-375 14 2.5. T20-042 Stirling Avenue Reconstruction Purchase Order Increase, DSD- 16 2022-378 3. Delegations Pursuant to Council's Procedural By-law, delegations are permitted to address the Committee for a maximum of five (5) minutes. All Delegations where possible are encouraged to register prior to the start of the meeting. For Delegates who are attending in-person, registration is permitted up to the start of the meeting. Delegates who are interested in attending virtually must register by 11:30 a.m. on August 8, 2022, in order to participate electronically. 3.1. None at this time. 4. Discussion Items 4.1. Vacant Home Tax, FIN -2022-284 45 m 19 (Staff will provide a 5 -minute presentation on this matter.) 4.2. Procurement By-law Review - FIN -2022-296 30 m 35 (Staff will provide a 5 -minute presentation on this matter.) 5. Information Items 5.1. None. 6. Adjournment Dianna Saunderson Manager of Council/Committee Services & Deputy Clerk Page 2 of 61 Staff Report Financia( Services Department www.kitchener.ca REPORT TO: Finance and Corporate Services Committee DATE OF MEETING: August 8, 2022 SUBMITTED BY: Saleh Saleh, Director, Revenue, 519-741-2200 ext. 7346 PREPARED BY: Marcy Ignor, Manager, Utility billing and Customer Service, 519-741- 2200 ext. 7460 WARD(S) INVOLVED: ALL DATE OF REPORT: July 4, 2022 REPORT NO.: FIN -2022-308 SUBJECT: Uncollectable Miscellaneous Receivable Accounts Write -Off June 2022 RECOMMENDATION: That uncollectable Miscellaneous Receivable Accounts amounting to $44,184 be written off against the Allowance for Doubtful Receivables. REPORT HIGHLIGHTS: • As per council policy, approval from Council approval is required for accounts to be written -off and sent to an outside collection agency for third party collection efforts. • Staff have worked diligently in attempting to collect on these accounts but have not been successful in the process. • This report recommends that accounts totalling $44,184 be written off and forwarded to an outside collection agency. BACKGROUND: As per council policy FIN -FEE -517 Utility and Miscellaneous Receivable policy, approval from Council is required for accounts to be written -off and sent to an outside collection agency for third party collection efforts. This report represents Miscellaneous Receivables accounts that are deemed to be uncollectible by collections staff. Miscellaneous Receivables represent services that are generally billed through the City's financial system (SAP). Examples of miscellaneous receivables include Direct Detect for alarm monitoring, Parking and Cemetery sales. Property tax and utility accounts are not included in miscellaneous receivables. *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. Page 3 of 61 REPORT: Staff are recommending that accounts totalling $44,184 be written off and forwarded to a collection agency. Staff have worked diligently in attempting to collect on these accounts but have not been successful in the process. The collection procedures staff have undertaken include: • Sending customers statements and demand letters. • Verbal request by telephone or in person. • Negotiating revised payment terms. • Applying any deposits held to the outstanding amounts. • Transferring uncollectable items to the customer's property tax account were permitted by the Municipal Act. The current amount being recommended to be written off relates to 37 customer accounts for services provided in the following areas: Cemeteries 7,945 Fire 133 Parking 5,409 By -Law 1,988 Operations 494 Utilities 6,361 Community Services 34 Furnance Financing 21,820 Tota 1 44,184 The cumulative amount of write-offs identified in this report equal $44,184 and relate to the years 2020, 2021 and 2022. The cumulative write-offs are shown in the table below and the average is well below the targeted upper limit for write-offs set at 0.3% previously approved by Council. Page 4 of 61 STRATEGIC PLAN ALIGNMENT: The recommendation of this report supports the achievement of the city's strategic vision through the delivery of core service. FINANCIAL IMPLICATIONS: The uncollectable accounts will be written off against the Allowance for Doubtful Receivables account. COMMUNITY ENGAGEMENT: INFORM — This report has been posted to the City's website with the agenda in advance of the council / committee meeting. PREVIOUS REPORTS/AUTHORITIES: • FIN -FEE -517 Collections- Utility and Miscellaneous Receivable APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services Page 5 of 61 Cumulative Write-offs for the Year Total $ Invoiced Year to Date Write-offs as a % of Sales 2022 $ 4,009 $ 12,569,251 0.0319% 2021 $ 38,573 $ 27,380,864 0.1409% 2020 $ 55,769 $ 23,088,516 0.2415% 2019 $ 44,077 $ 26,057,740 0.1692% 2018 $ 54,464 $ 23,132,498 0.2354% Total 1 $ 196,892 $ 112,228,869 j 0.1754% STRATEGIC PLAN ALIGNMENT: The recommendation of this report supports the achievement of the city's strategic vision through the delivery of core service. FINANCIAL IMPLICATIONS: The uncollectable accounts will be written off against the Allowance for Doubtful Receivables account. COMMUNITY ENGAGEMENT: INFORM — This report has been posted to the City's website with the agenda in advance of the council / committee meeting. PREVIOUS REPORTS/AUTHORITIES: • FIN -FEE -517 Collections- Utility and Miscellaneous Receivable APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services Page 5 of 61 Staff Report r NJ :R Financia( Services Department www.kitchener.ca REPORT TO: Finance and Corporate Services Committee DATE OF MEETING: August 8, 2022 SUBMITTED BY: Saleh, Saleh, Director, Revenue, 519-741-2200 ext. 7346 PREPARED BY: Marcy, Ignor, Manager Utility billing and Customer Service, 519-741- 2200ext 7460 WARD(S) INVOLVED: ALL DATE OF REPORT: July 4, 2022 REPORT NO.: FIN -2022-309 SUBJECT: Uncollectable Utility Receivable Account Write -Off RECOMMENDATION: That uncollectable utility accounts amounting to $231,528 be written off against the allowance for doubtful utility receivables. REPORT HIGHLIGHTS: • As per council policy, approval from Council is required for accounts to be written -off and sent to an outside collection agency for third party collection efforts. • Staff have worked diligently in attempting to collect on these accounts but have not been successful in the process. • This report recommends that accounts totalling $231,528 be written off and forwarded to an outside collection agency. BACKGROUND: As per council policy FIN -FEE -517 Utility and Miscellaneous Receivable policy, approval from Council is required for accounts to be written -off and sent to an outside collection agency for third party collection efforts. Utilities receivable represent invoices generally billed through the City's SAP utility billing System. The majority of these invoices relate to usage for Gas and Water. The current report represents write-off of utility accounts for a one-year period ending June 30, 2022. *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. Page 6 of 61 REPORT: Staff are recommending that accounts totalling $231,528 be written off and forwarded to the collection agency. Staff have worked diligently in attempting to collect on these accounts but have not been successful either due to the customer declaring bankruptcy or having no forwarding address. Any tenant deposits previously received on the uncollectable accounts have been applied to reduce the debt outstanding. A total of 353 customer accounts are being recommended to be written off and transferred to a third -party collection agency. The collection procedures staff have undertaken include: • Sending customers statements and demand letters. • Verbal request by telephone or in person. • Negotiating revised payment terms. • Applying any deposits held to the outstanding amounts. • Transferring uncollectable items to the customer's property tax account where permitted by the Municipal Act. The cumulative amount of utility write-offs identified in this report equal $231,528 and relate to the years 2019, 2020, 2021 and 2022. The cumulative write-offs are shown in the table below and the average is well below the targeted upper limit for write-offs set at 0.3% previously approved by Council. A five-year summary of write-offs is included in the table below. Utility Accounts Write-off Cumulative Total $ Invoiced Write-offs as a Write-offs for the Year Year to Date % of Sales 2022 34,165 $ 121,198, 464 0.0282% 2021 $ 147,687 $ 216, 217, 805 0.0683% 2020 $ 215,030 $ 213, 604, 976 0.1007% 2019 $ 216,675 $ 202, 658, 095 0.1069% 2018 $ 261,616 $ 211, 483, 209 0.1237% I $ 875,173 $ 965,162, 549 0.0907% Tota I Page 7 of 61 STRATEGIC PLAN ALIGNMENT: The recommendation of this report supports the achievement of the city's strategic vision through the delivery of core service. FINANCIAL IMPLICATIONS: The uncollectable accounts will be written off against the Allowance for Doubtful Utility Receivables account. COMMUNITY ENGAGEMENT: INFORM — This report has been posted to the City's website with the agenda in advance of the council / committee meeting. PREVIOUS REPORTS/AUTHORITIES: • FIN -FEE -517 Collections- Utility and Miscellaneous Receivable APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services Page 8 of 61 Staff Report r NJ :R Development Services Department www.kitchener.ca REPORT TO: Finance and Corporate Services Committee DATE OF MEETING: August 8, 2022 SUBMITTED BY: Chris Farrell, Manager Small Business, 519-741-2200 ext. 7294 PREPARED BY: Chris Farrell, Manager Small Business, 519-741-2200 ext. 7294 WARD(S) INVOLVED: All DATE OF REPORT: July 15, 2022 REPORT NO.: DSD -2022-370 SUBJECT: Waterloo Region Small Business Centre - Three Party Municipalities Agreement RECOMMENDATION: That the Mayor and Clerk be authorized to sign an agreement between the City of Kitchener, City of Cambridge and City of Waterloo to collaborate on the delivery of the Waterloo Region Small Business Centre services and programs funded in part by the Province of Ontario, in accordance with report DSD -2022-370; said agreement to be to the satisfaction of the City Solicitor: and further, That the General Manager, Development Services be authorized to execute on behalf of the City of Kitchener any amendments pertaining to the agreement, services and programs provided by the Waterloo Region Small Business Centre, provided said amendment is to the satisfaction of the City Solicitor. REPORT HIGHLIGHTS: The purpose of this report is to form an agreement with the City of Kitchener's Waterloo Region Small Business Centre and the two satellite offices at the City of Cambridge and City of Waterloo The financial implications are each City provides the Waterloo Region Small Business Centre with cash and in-kind contributions. • This report supports the delivery of a Vibrant Economy. BACKGROUND: The Waterloo Region Small Business Centre (WRSBC) provides thousands of entrepreneurs with the training and support necessary to start and grow successful businesses. From concept, through start-up and early growth stages of business, the Centre(s) is a one-stop source for information, guidance and professional advice on starting and running a successful business. Servicing individuals of all ages, educational backgrounds, and businesses from all industry sectors. WRSBC is one of a network of 54 centres in Ontario supported by the province and municipalities. The Waterloo Region *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. Page 9 of 61 Small Business Centre operates from three locations, with Kitchener having 4.5 employees and the Cambridge and Waterloo satellite offices each having one employee. The three municipalities have collaborated to deliver small business services since 1998 in Kitchener and Cambridge, and Waterloo since 2006. REPORT: WRSBC provides a range of entrepreneurial services and supports benefit main street and lifestyle businesses operated by self-employed individuals or companies with fewer than ten employees. In Ontario, 76% of businesses have fewer than ten employees. Services include: • one-on-one business consultations; • workshops and events; • access to business professionals, industry experts and mentors; • assistance with market research, business and marketing plans; • online business registrations, navigating governmental departments, agencies and regulations; and, • delivery of provincial programs and grants for youth, start-ups and growth companies. The services provided by the three offices help businesses to learn, start and grow businesses in the communities, create jobs and impact the local economy with the guidance of business advisors. Imoact 2021-2022 Cambridge Waterloo Kitchener Total Inquiries 2,374 1,210 8,549 12,133 Business Started 72 39 91 202 Business Expanded 24 18 72 114 Jobs 92 41 234 367 One-on-one Consultations 427 261 975 1663 Workshops 22 7 159 188 Events Hosted & Co- hosted 0 0 30 30 Outreach Connections 180 417 7042 7639 Proposed Agreement The proposed agreement would generally mirror the previous agreement between the three municipalities. The agreement would be for a 4 -year term from 2022 until 2026. The agreement would continue to see the City of Kitchener office acting as the WRSBC headquarters to: • oversee the implementation of a wide range of entrepreneurial services and the establishment of initiatives and programs; • develop and implement marketing and digital media strategies; • liaison, communication, collaboration with funders, partners, sponsors, volunteers, Page 10 of 61 • coordinate schedules for workshops, events, staffing in Kitchener, Cambridge, and Waterloo locations; • ensure provincial programming is delivered along with collection and submission of statistical data reporting to the provincial government; and, • responsible for funding agreements, budgets and reports. The three -party agreement between Kitchener, Cambridge and Waterloo ensures the shared commitment to work together to help entrepreneurs will continue. STRATEGIC PLAN ALIGNMENT: This report supports A Vibrant Economy by undertaking industry business cases. FINANCIAL IMPLICATIONS: The three -party funding agreement between Kitchener, Cambridge and Waterloo outlines a monetary contribution from the partners based on a per capita model, indexed annually at 1.5%, based on the most current Statistics Canada Census Population Profile (2021). In addition to the cash contribution, the municipalities support the WRSBC by providing in- kind contributions such as: • one (1) dedicated employee; • service location, utilities, equipment, maintenance; • marketing, training; and, • administrative support services, IT, HR, accounting, legal. Cash — In-kind Contributions 2022 2022 2022 To WRSBC Cambridge Waterloo Kitchener Cash Grant to WRSBC* 14,054 12,326 116,845 In-kind contributions 166,000 110,000 230,000 Total Cash and In-kind 180,054 122,326 346,845 *Note: Cambridge and Waterloo grant is the equivalent of the per capita contribution. The employee's wage at the respective locations is included as an in-kind contribution. At the same time, the Kitchener grant is the equivalent of the per capita contribution and one full-time salary. Operating Budget — The recommendation has no impact on the Operating Budget. COMMUNITY ENGAGEMENT: CONSULT: The Waterloo Region Small Business Centre conducts over ten surveys annually with small businesses to get feedback and suggestions for service and program improvements. COLLABORATE — Waterloo Region Small Business Centre communicates, consults, and collaborates with a broad range of community groups, organizations, agencies, secondary and post -secondary institutes, and municipal, regional, and provincial governments to ensure the entrepreneurial services and programs address the needs of small businesses in the community. The Small Business Advisory Committee volunteers represent twelve industry sectors across the region. Page 11 of 61 INFORM — This report has been posted to the City's website with the agenda in advance of the council/committee meeting. APPROVED BY: Justin Readman, General Manager DSD Page 12 of 61 EXPENSES TOTAL WAGES AND BENEFITS WRSBC WRSBC WRSBC Municipal Projected Projected Projected Contributions OPERATING 2022 2023 2024 16,957 REVENUES Special Events 7,750 7,750 In-kind MEDJCT 456,552 456,552 502,207 Grants CITY OF CAMBRIDGE 14,206 14,264 14478 166,000 CITY OF KITCHENER 116,845 118,598 120377 230,000 CITY OF WATERLOO 12,326 12,511 12698 110,000 REGION OF WATERLOO 50,000 50,000 50000 SEOW -REGION OF WATERLOO 30,000 30,000 15,000 DIGITAL SERVICE SQUAD 198,000 240,000 60,000 SPONSORSHIPS 5,000 5,000 5,000 Total Revenue 882,929 926,925 779,760 EXPENSES TOTAL WAGES AND BENEFITS 589,394 633,389 523,134 OPERATIONS Administrative 42,168 42,168 42,168 Marketing 16,957 16,957 5,048 Special Events 7,750 7,750 7,750 Professional Services 35,660 35,660 10,660 Grants 191,000 191,000 191,000 TOTAL EXPENSES 882,929 926,924 779,760 SURPLUS /(DEFICIT) 0 0 0 OPENING SURPLUS/(DEFICIT 124,227 124,227 124,227 ENDING SURPLUS/(DEFICIT) 124,227 124,227 124,227 Page 13 of 61 Staff Report r NJ :R Development Services Department www.kitchener.ca REPORT TO: Finance and Corporate Services Committee DATE OF MEETING: August 8, 2022 SUBMITTED BY: Chris Farrell, Manager Small Business, 519-741-2200 ext. 7294 PREPARED BY: Chris Farrell, Manager Small Business, 519-741-2200 ext. 7294 WARD(S) INVOLVED: All DATE OF REPORT: July 18, 2022 REPORT NO.: DSD -2022-375 SUBJECT: 200 King Street West — Ground Floor - Lease RECOMMENDATION: That the Mayor and Clerk be authorized to execute a lease agreement with Canadian Caribbean Association of Waterloo Region, within the Small Business Centre at City Hall municipally known as 200 King Street West; said agreement to be to the satisfaction of the City Solicitor. REPORT HIGHLIGHTS: The purpose of this report is to approve a short-term lease to the Canadian Caribbean Association of Waterloo Region, within the Small Business Centre. BACKGROUND: The Canadian Caribbean Association of Waterloo Region (CCAWR) is a non-profit community-based organization focused on fostering collaborations to promote the social, cultural, and economic interests of, and advocate for, the Caribbean community in the Region of Waterloo. In 2021 the organization was awarded a three-year funded project to deliver the Liftoff Black Entrepreneurship Program. The program is designed to support Black entrepreneurs from the earliest stages of starting a business to innovating, growing, and scaling an existing business. The CCAWR Liftoff team requires temporary office space until they move into a new space in December 2022. REPORT: The Canadian Caribbean Association of Waterloo Region (CCAWR) is interested in temporarily utilizing 350 square feet of currently vacant space on the ground floor of City Hall in the Small Business Centre. The Small Business Centre does not plan to use the area requested during the next four months. Staff feel this is an excellent interim use that will activate the space on a relatively short-term basis. CCAWR anticipates commencing occupancy on September 1, 2022, for approximately four months until their new office space is move -in ready. During this time, should the City require the space for alternate purposes, the lease would contain a 30 day notice clause to vacate the space. *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. Page 14 of 61 The mandate of the Liftoff Black Entrepreneurship Program aligns with the services and programs provided by the Small Business Centre. Both organizations have established a collaborative working relationship since the program's inception in the summer of 2021. The Small Business Centre currently refers clients and mentors to the program, attends Liftoff events, and promotes the program on its website and social media. Creating a co -working space with the program benefits the community by providing entrepreneurs direct access to resources that meet their needs at one location. CCAWR will pay the Common Area Maintenance (CAM) fee and taxes for the space. In lieu of rental payments, CCAWR is offering to provide in-kind services to the city at a value equivalent to fair market rent. In-kind services could include: assisting in creating guidelines for small companies to implement sustainable business practices; and, developing a framework for measuring a company's economic impact as it pertains to the sustainable development goals (such as reducing inequalities, decent work, and economic growth for equity -deserving entrepreneurs). STRATEGIC PLAN ALIGNMENT: The City's Strategic Vision for a Vibrant Economy. FINANCIAL IMPLICATIONS: The tenant will be responsible for the Common Area Maintenance (CAM) and taxes. Both fees are subject to annual adjustments. A rental rate of $8.00/sq. Ft. will be payable through in-kind contributions to the City. COMMUNITY ENGAGEMENT: COLLABORATE — Waterloo Region Small Business Centre communicates, consults, and collaborates with a broad range of community groups, organizations, agencies, secondary and post -secondary institutes, and municipal, regional, and provincial governments to ensure the entrepreneurial services and programs address the needs of small businesses in the community. The Small Business Advisory Committee volunteers represent twelve industry sectors across the region. INFORM — This report has been posted to the City's website with the agenda in advance of the council/committee meeting. PREVIOUS REPORTS/AUTHORITIES: There are no previous reports/authorities related to this matter. APPROVED BY: Justin Readman, General Manager DSD Page 15 of 61 Staff Report Development Services Department www.kitchener.ca REPORT TO: Finance and Corporate Services Committee DATE OF MEETING: August 8, 2022 SUBMITTED BY: Gross, Hans, Director of Engineering Services, 519-741-2200 ext. 7410 PREPARED BY: Spere, Chris, Manager, Construction Engineering, 519-741-2200 ext. 7412 Allen, Steve, Manager, Engineering Design and Approvals, 519-741- 2200 ext. 7584 WARD(S) INVOLVED: Wards 8,9 DATE OF REPORT: July 19, 2022 REPORT NO.: DSD -2022-378 SUBJECT: T20-042 Stirling Avenue Reconstruction Purchase Order Increase RECOMMENDATION: That the Purchase Order for the Stirling Avenue South (Greenbrook Drive to Mausser Avenue) Road Reconstruction T20-042 be increased by $1,500,000, funded by existing surpluses in the Water Infrastructure Program (WIP). REPORT HIGHLIGHTS: The purpose of this report is to increase the purchase order for a project that is more complex than initially identified due to delays and changes during construction related to necessary permits and unforeseen issues. The financial implications are limited to an additional transfer from existing WIP balances • This report supports the delivery of core services. BACKGROUND: Engineering Services is proceeding with the reconstruction of Stirling Avenue South. Funds for construction have been approved by Council as part of the 2020 budget. The services were originally constructed in the 1940's and need replacement. The project scope includes the full reconstruction of Stirling Avenue South between Mauser Avenue and Greenbrook Drive, and the reconstruction of the twin culvert under Stirling Avenue South. The administration, design and tendering of this project has been completed by City staff, the construction administration and inspection of this project is being completed by City staff as well. *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. Page 16 of 61 This work is being completed under the City's Water Infrastructure Program (WIP) for road reconstructions. Construction of the Stirling Avenue South Reconstruction was publicly tendered by the city and was awarded in the spring of 2020 at a cost of $3,708,968.68. REPORT: This reconstruction was tendered April, 2020 and construction started June, 2020. The project was planned as a multi -stage, two-year construction to be completed in 2021. This project is a full road reconstruction including a new outlet culvert for Lakeside Park and a new road crossing for Shoemaker Creek. Several challenges and changes experienced during construction have resulted in additional costs. These costs are a result of design changes required during construction, and material and labour cost increases due to an unexpected delay in securing the required permit related to work within Grand River Conservation Authority (GRCA) regulated area. GRCA Permit The GRCA requires a permit for any work within their Regulated Area which includes a portion of this project, specifically the culvert work and areas adjacent to it. This permit was applied for in advance of construction, however the complexities of the design as it relates to the GRCA's areas of interest resulted in a much longer and involved review process which was not anticipated at the time the permit was applied for. Due to conflicting objectives of the Stirling Avenue road design and the GRCA's desire to see no flood line level changes, the permit review period involved significant rework and data gathering efforts. This extra effort included an expansion of the initially submitted Environmental Impact Assessment, revisions to the culvert and road design, and resubmission of the floodplain modelling. As a result of the additional work being required to support the permit, in early 2021 staff proactively notified the contractor that the second phase of the work that included the GRCA regulated areas would be deferred to 2022 to allow time to complete the extra work and secure the permit. This also gave the contractor time to re -allocate resources to other potential projects in 2021. This extra work resulted in the permit not being granted until early 2022. As a result of the 1 -year delay in the second phase, the contractor submitted a claim for additional compensation above their original bid pricing, to adjust for cost increases on labour and materials not yet purchased or installed. Unforeseen Conditions Stirling Ave South had infrastructure that pre -dated most modern record keeping and thus record information for this section of Stirling was scarce and not accurate. During the construction in 2022, numerous unknowns were discovered. These included several large diameter concrete pipes, concrete headwalls, pipes connected to the Lakeside pond and additional buried concrete road. The required additional investigation resulted in delays and additional costs. Design changes resulting from the work included in securing the GRCA permit included a twinning of the initial proposed culvert, different headwalls and retaining walls and an increase in the elevation of the roadway, The material and labour costs are an increase to the tender. Page 17 of 61 It is staff's recommendation that the additional unanticipated costs for the reconstruction of Stirling Avenue South be funded from surpluses in the WIP. The reasons for this include: • The necessary design changes were not anticipated at the time of tender • The delay in securing the necessary permits could not have been anticipated • Additional costs for the new design were reviewed by staff and they are found to be inline with the original bid and would have been included in the original tender had it been known at that time • Unknown buried infrastructure could not have been known or identified during the design phase of the project STRATEGIC PLAN ALIGNMENT: This report supports the delivery of core services. FINANCIAL IMPLICATIONS: Funding for the purchase order extension will be allocated from existing surpluses in the WIP General account which is intended to balance surpluses and deficits between WIP projects. Sufficient funding exists in the WIP General account to address the purchase order extension. COMMUNITY ENGAGEMENT: INFORM — This report has been posted to the City's website with the agenda in advance of the council / committee meeting. PREVIOUS REPORTS/AUTHORITIES: • FIN -20-039 — T20-042 Stirling Avenue South (Greenbrook Drive to Mausser Ave) Road Reconstruction APPROVED BY: Justin Readman, General Manager of Development Services Page 18 of 61 Staff Report Financia( Services Department www.kitchener.ca REPORT TO: Finance and Corporate Services Committee DATE OF MEETING: August 8, 2022 SUBMITTED BY: Saleh, Saleh, Director, Revenue Division, 519-741-2200 ext. 7346 PREPARED BY: Saleh, Saleh, Director, Revenue Division, 519-741-2200 ext. 7346 Danielle Sbeti, Manager, Realty Services, 519-741-2200 ext. 7357 WARD(S) INVOLVED: ALL DATE OF REPORT: May 20, 2022 REPORT NO: FIN -2022-284 SUBJECT: Vacant Home Tax RECOMMENDATION: That a Vacant Home Tax not be implemented at this time. REPORT HIGHLIGHTS: • Legislation allows municipalities to charge a Vacant Home Tax (VHT) to owners of vacant residential properties. • The VHT is intended to provide municipalities with an option to improve housing supply and is not designed to be a revenue tool for the municipality. • The City of Kitchener has one of the lowest vacancy rates in Canada according to the Canada Mortgage and Housing Corporation (CMHC). • Currently only between 100-125 residential properties are suspected to be vacant within the City of Kitchener. • Many municipalities are currently exploring the feasibility of implementing a VHT. • It is expected that the expenses incurred to implement a VHT would be greater than revenues collected for the City of Kitchener. • The City of Kitchener continues to move forward with the action items identified in the City's Affordable Housing Strategy previously approved by Council. • Both the Federal and Provincial governments have announced several strategies to increase the affordable housing supply. BACKGROUND: As housing prices and the need for affordable housing increase, the City of Kitchener continues to explore every opportunity available to improve the housing supply and to add more affordable housing inventory to the market. On December 13, 2021, Council passed the following motion as it relates to the feasibility of implementing a vacant home tax (VHT): *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. Page 19 of 61 "WHEREAS affordable housing in the Province and in the City of Kitchener continues to be an issue requiring municipalities to consider every tool available to them in efforts to increase the supply and affordability of housing, and, WHEREAS the City of Kitchener has adopted "Housing for All — The City of Kitchener's Housing Strategy" demonstrating a commitment to addressing the housing crisis within the municipality; and, WHEREAS Kitchener continues to seek opportunities to address the local housing crisis recognizing the need for safe, adequate and affordable housing, and, WHEREAS the City of Toronto is implementing a tax on vacant residential units to encourage property owners to rent out those properties and other municipalities in the Province are considering doing the same,- THEREFORE ame, THEREFORE BE IT RESOLVED that City of Kitchener staff be directed to work with the Region of Waterloo and area municipalities to consider the feasibility of implementing a property tax charge on vacant residential units as a means of encouraging occupancy of those vacant units and that staff report back on the findings to the Finance and Corporate Services committee in June 2022. " This report is expected to provide the following information: 1. Purpose of a VHT. 2. Understanding of the current legislation as it relates to the VHT. 3. An overview of Kitchener's residential real estate market including important statistics and trends. 4. Shared experiences of other municipalities who have implemented the VHT. 5. Understanding of Vacant Homes in Kitchener 6. A recommendation for Council's consideration REPORT: Purpose The Province introduced legislation under Ontario's Fair Housing Plan 2017 which allows municipalities to impose a tax on vacant units that are classified in the residential property class. The main purpose of this legislation was to encourage residential property owners of vacant premises to either sell or rent their properties, thereby, increasing the supply and affordability of housing. This legislation is intended to provide municipalities with an option to improve housing supply and is not designed to be a revenue tool for the municipality. Current Legislation The Municipal Act, 2001 ("Act") gives authority to municipalities to impose a tax on vacant units that are classified in the residential property class and that are taxable under the Act Page 20 of 61 for municipal purposes. The Act further clarifies that for a municipality to be able to impose a vacant unit tax, the Ministry of Finance must designate the municipality by regulation. Historically and legislatively, property tax policy formulation in a two-tier system, is the responsibility of an upper -tier municipality. However, in this case, as it relates to legislation around the vacant unit tax, the Act is not clear on whether a program built on a vacant unit tax for properties in the residential property class, is the responsibility of the upper -tier municipality. Staff sought clarification from the Province and the Ministry of Finance on this issue but did not receive any clarity. However, staff from the Ministry of Finance, strongly encouraged a regional approach to any tax policy with the caveat that if the City of Kitchener decided to create a VHT program for Kitchener properties only, the Ministry would review the City's approach and may provide the designation. The City of Toronto currently has this designation through the City of Toronto Act; further, the City of Ottawa recently received approval from the Ministry of Finance for this designation. Both, the City of Toronto and the City of Ottawa are single tier municipalities. Kitchener's Residential Real Estate Market Information related to Kitchener's housing market is appended (Appendix A) to this report. Key highlights from this report include: • The supply of housing units per capita in the Kitchener CMA is well below the national average and has been falling since 2016. The months of inventory in the residential resale market reached an all time low of 0.2 in December 2021. • Rental vacancy is at an unhealthy level, with an overall vacancy rate of 2.1% in the City of Kitchener as of October 2021. • Within the secondary rental market (condo units that are rented), the vacancy rate in Kitchener -Cambridge -Waterloo was only 0.8% as of October 2021. • Available studies relating to the impact of foreign buyer taxes on house prices suggest the effect is minimal and temporary in nature, and to date there is a lack of data correlating vacant home taxes to price decreases. • The investor category of purchasers is broadly defined, and the proportion of investor -buyers has been relatively consistent over the past several years. • The point at which investor activity becomes problematic requires further study, and there are aspects in the development of housing, including rental, where investors serve a positive function. • Government action to address housing has typically been on the demand side, and much more policy focus needs to be on the responsiveness of supply to demand. The Canada Mortgage and Housing Corporation (CMHC)'s 2021 rental market report further shows that Kitchener -Waterloo -Cambridge have one of the lowest residential vacancy rates in Canada at 2.0%. Municipal Survey Currently there are many municipalities in Ontario studying the legislation and considering the VHT. Some examples of municipalities reviewing the feasibility of implementing the VHT include the City of Hamilton, Niagara Region, Halton Region, City of Mississauga, Region Page 21 of 61 of Peel, City of St Catharines, and the City of Windsor. Every municipality surveyed is looking to allocate net revenues from this potential tax to support affordable housing initiatives. The City of London has already announced that they will not be implementing a VHT as based on their analysis, the costs of such a program would be higher than the revenues. The City of Vancouver was the first municipality to implement the VHT with an initial tax rate of 1% in 2017. Subsequently, this rate has been increased to 3% in 2021 and a further increase to 5% is being considered at the City of Vancouver. In 2022, the City of Toronto implemented the VHT with results yet to be determined as the tax will be collected in 2023. The City of Ottawa is also moving forward with the VHT in 2022 with results yet to be determined. The following table reflects important statistics and compares the City of Ottawa, the City of Toronto and the City of Vancouver. Key observations to consider: • Population sizes and housing markets are much greater than Kitchener • Significantly higher number of total properties than Kitchener • Requires significant staff resources to administer the program The City of Kitchener has a population size of approximately 257,000 per the 2021 Canadian Census. The total number of properties is approximately 84,000. Based on size, population and the estimated number of vacant homes, Kitchener is much smaller in scale than Ottawa, Toronto or Vancouver who have implemented the VHT. Understanding of Vacant Homes in Kitchener Estimating the number of vacant homes in a municipality is a challenge. Both the City of Toronto and the City of Ottawa have decided to request every property owner to attest annually that their property is not vacant. This is a very time and resource consuming activity which can also result in many challenges such as incorrect information being submitted, late submissions or even no submissions. Initially, the City of Vancouver used hydro consumption data to estimate the number of vacant homes. Subsequently, on further investigation, the City of Vancouver found that the number of vacant homes was significantly Page 22 of 61 City of Ottawa City of Toronto City of Vancouver Population (2021) 11017,000 2,794,000 662,000 Total Number of Properties 330,000 789,000 186,000 Estimated number of Vacant Properties 1,650 7,900 2,200 VHT Rate 1% 1 % 1 % (currently 3%) Estimated Revenues $6.6M (Year 1) $55M -$66M (Year 1) $37M Startup Costs $3.9M $10M -$13M $10M Annual Operating Costs $1.4M $5.8M $2.5M Additional staff 8 15-20 15-20 Key observations to consider: • Population sizes and housing markets are much greater than Kitchener • Significantly higher number of total properties than Kitchener • Requires significant staff resources to administer the program The City of Kitchener has a population size of approximately 257,000 per the 2021 Canadian Census. The total number of properties is approximately 84,000. Based on size, population and the estimated number of vacant homes, Kitchener is much smaller in scale than Ottawa, Toronto or Vancouver who have implemented the VHT. Understanding of Vacant Homes in Kitchener Estimating the number of vacant homes in a municipality is a challenge. Both the City of Toronto and the City of Ottawa have decided to request every property owner to attest annually that their property is not vacant. This is a very time and resource consuming activity which can also result in many challenges such as incorrect information being submitted, late submissions or even no submissions. Initially, the City of Vancouver used hydro consumption data to estimate the number of vacant homes. Subsequently, on further investigation, the City of Vancouver found that the number of vacant homes was significantly Page 22 of 61 lower than initially estimated. For example, there were properties in the initial data set which were in the redevelopment phase and would not qualify for the VHT. Currently, the City of Vancouver also requires all property owners to make a property status declaration each year, to determine whether their property will be subject to the VHT. The most verifiable data to estimate the number of vacant homes is water consumption. It is estimated that between 100-125 properties in the City of Kitchener may be vacant based on a water consumption analysis. This represents a very low percentage (0.15%) of total properties in the City. However, like Vancouver, this figure could also be lower when further investigation is done. The Region of Waterloo conducted an informal survey with builders, developers, realtors, and investors. The feedback from the survey resulted in the following conclusions: • There is no evidence of a vacant home issue within the Region. • Some vacant homes are either under renovation, waiting for redevelopment, Airbnb units or probates (death of owner). Under Toronto, Ottawa, and Vancouver's VHT policy, these properties would not qualify for a VHT. Recommendation/Conclusion The main goal of the VHT is to increase the supply of affordable housing. Factors that are important to consider when determining whether to implement a VHT and how they relate to the City of Kitchener are outlined below. • Vacancy rate- The City of Kitchener has a very low vacancy rate (2.1 % as of October 2021) when compared to the City of Toronto (3.4%) or the City of Ottawa (3.9%) as reported by Canada Mortgage and Housing Corporation. The Advocacy Centre for Tenant's Ontario recommends a vacancy rate between 3% to 5% for a healthy rental market. Further, a review of properties where water consumption was either at a minimum or zero for at least six months revealed that approximately 100-125 properties in the City may be vacant. This represents a very small percentage (0.15%) of total properties in the City which are potentially vacant. • Revenue/Costs- If the City were to implement a VHT, based on the estimated number of vacant properties of between 100-125 and an average assessed value of $325,000, it is expected that the revenue generated with a 1% VHT will be approximately $406,000 at the high end. However, expenses to administer the program will also be incurred including: o Billing system changes o Hiring of additional staff to audit, review, deal with public inquiries and implement the tax annually o Appeal process would need to be established o Printing, advertising, and communication costs It is expected that the expenses related to the implementation of a VHT would exceed the revenues resulting in a net loss to the City's tax base. Page 23 of 61 • Affordable Housing Strategy- The City had developed a robust affordable housing strategy, Housing for All, to invest in solutions which will increase the affordable housing supply. There are several detailed action items identified in this plan which will require time and resources to implement. Implementation of a VHT was not considered or recommended as part of the City's affordable housing strategy. • Federal/Provincial Initiatives- Both the Federal and Provincial governments have announced several strategies to increase the affordable housing supply. Examples include: o More Homes for Everyone Act which will speed up the construction process. o Increase in tax to non-residential homebuyers from 15% to 20% Based on the factors described in this section, it is recommended that at this time, the City of Kitchener, not move forward with a VHT. STRATEGIC PLAN ALIGNMENT: This report supports A Caring Community. FINANCIAL IMPLICATIONS: •lm COMMUNITY ENGAGEMENT: INFORM — This report has been posted to the City's website with the agenda in advance of the council / committee meeting. CONSULT — This report has been shared with the Region of Waterloo. PREVIOUS REPORTS/AUTHORITIES: • Municipal Act, 2001 APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services ATTACHMENTS: Attachment A — Housing Market Dynamics Summary Page 24 of 61 Canadian Housing Market Dynamics — 1 Summary of Current Issues May 19, 2022 I�iITCHENER The following summary of current issues in the Canadian Housing Market discusses key trends related to housing demand and supply and the effect on house prices and unaffordability. While this discussion is not exhaustive, it focuses on the primary concerns, available local and national data, and providing context to the statistics. The summary concludes with an overview of current and recommended government actions to address market imbalances. Highlights • The supply of housing units per capita in the Kitchener CMA is well below the national average and has been falling since 2016. The months of inventory in the residential resale market reached an all time low of 0.2 in December 2021, and currently sits at 1.2. • Rental vacancy is at an unhealthy level, with an overall vacancy rate of 2.1% in the City of Kitchener as of October 2021. • Available studies relating to the impact of foreign buyer taxes on house prices suggest the effect is minimal and temporary in nature, and to date there is a lack of data correlating vacant home taxes to price decreases. • The investor category of purchasers is broadly defined, and the proportion of investor - buyers has been relatively consistent over the past several years. • The point at which investor activity becomes problematic requires further study, and there are aspects in the development of housing, including rental, where investors serve a positive function. • Government action to address housing has typically been on the demand side, and much more policy focus needs to be on the responsiveness of supply to demand. Housing Supply Issues The current situation in Canadian housing markets primarily reflects a chronic insufficiency of home supply that has been temporarily exacerbated by pandemic -related impacts linked to record -low mortgage rates and a shift in preferences for housing by type and geography. As summarized by Scotiabank Economics, the principal challenge facing the housing market, and a major underlying cause of recent rising prices and diminished affordability, is the substantial insufficiency of supply relative to demand. Even before the pandemic, the supply of housing had not been keeping up with population growth, reaching a near -record imbalance. Imbalance of Demand vs. Supply One measure of the imbalance of demand vs. supply is the ratio of new home completions to the change in population. Since 2018, this ratio in Canada has been well below its historical average, and while it improved slightly in 2020 due to the halt on immigration, this is expected to reverse as immigration resumes. Looking at another measure, Canada has the lowest number of housing units per 1,000 residents of any G7 country, and this ratio has been falling since 2016. Page 25 of 61 • Across the G7, the average number of housing units per 1,000 residents is 471. In Canada, this ratio was 424 in 2020. An additional 1.8 million homes would be needed to achieve the average G7 level of supply nationally, with 1.2 million units needed in Ontario alone (Scotiabank Economics). • In the Kitchener -Cambridge -Waterloo CMA, the number of housing units per 1,000 residents fell from 389 in 2016 to an estimated 376 in 2020 (Scotiabank Economics). • The imbalance of demand vs. supply is also reflected in the number of resale listings. Prior to the pandemic, the number of available listings nationally was already at a 14 -year low, with an average 4 months of inventory (CREA). • There were just 1.6 months of inventory on a national basis at the end of January 2022 (CREA). In the Kitchener -Waterloo market, the number of months of inventory reached an all time low of 0.2 in December 2021. Since the start of 2022, months supply has started trending upwards, reaching 1.2 in April (KWAR). Months Suppiy of Homes for Sale W 4.0 3.0 2.0 Kitchener -Waterloo Association of REALTORSO 0.0 1-2009 1-2010 1-2011 1-2012 1-2013 1-2014 1-2015 1-2016 1-2017 1-2018 1-2019 1-2020 1-2021 1-2022 Kitchener -Waterloo Association of REALTORS@ Each data point is one month off activity. Data is horn May 11 2022. Unhealthy Rental Vacancy • In the primary rental market, the overall vacancy rate in Kitchener was 2.1% as of October 2021. The vacancy rates for 1- and 2 -bedroom apartment units ranged between 1.0% and 3.1%, depending on location. Data on bachelor and 3 -bedroom+ units is more limited but indicates a vacancy rate at or below 1.1% (CM HC). • When rental townhouse units are excluded, the vacancy rate for rental apartment units only was 2.0% as of October 2021. • When analyzed by rental rate, the data indicates that vacancy rates increase as rental rates increase. For units below $999 per month in Kitchener, the October 2020 and 2021 vacancy rates ranged between 0.0% and 1.1%, depending on location and unit size. • A healthy rental vacancy rate is considered to be 3.0% or above. The vacancy rate in the Kitchener -Waterloo -Cambridge area has been at or below 3.0% since 2010. In Kitchener in particular, the vacancy rate has only exceeded 2.7% once since 2015 (in 2018) (CMHC). • In the secondary rental market, which consists of condo apartments that are rented, the vacancy rate in the Kitchener -Waterloo -Cambridge CMA has been at or below 2.5% since 2015. As of October 2021, the secondary market vacancy rate was just 0.8% (CM HC). 2 Page 26 of 61 4.00% 3.50% 3.00% 2.50% 2.00% 1.50°/ 1.00°/ 0.50% 0.00°/ Rental Market Vacancy Rates - Kitchener 2015 2016 2017 2018 2019 2020 2021 Primary Rental Market (Kitchener City) Secondary Rental Market (Kitchener CMA) Source: Canadian Mortgage and Housing Corporation (CMHC) • According to rental leads analysis by Rentsync, Kitchener consistently ranks in the top 10 Canadian cities in rental demand, with a demand score of 6.5 as of April 2022. Between April 2021 and 2022, Kitchener saw a 78% increase in unique leads per property. Short -Term Rental Market • The number of short-term rentals actively listed per quarter in the City of Kitchener has ranged between 350 and 493 since the end of 2018. As of May 2022, there are approximately 366 active rentals listed through Airbnb and Vrbo (per airdna data). • Roughly three-quarters of listings are for the entire dwelling or house, with the remaining listings offering a private or shared room in a home. • Only 15% of listings are available full time, meaning that most short-term rental listings are not year-round rentals. Approximately 60% of rentals are available 1-90 days of the year, and 25% are available 91-180 days of the year. Short -Term Rentals in Kitchener Number of Active Rentals 600 493 500 434 451 442 413 400 350 364 . , ' ' 3. 368 371 382 _■ 380 401 300 200 100 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2018 2019 2019 2019 2019 2020 2020 2020 2020 2021 2021 2021 2021 Source: airdna, as of February 23, 2022 3 Page 27 of 61 Vacant Dwelling Units • It is difficult to precisely estimate the number of truly vacant dwelling units in the City of Kitchener. The latest census data (2021) shows that there were 3,576 private dwelling units not occupied by usual residents, which equates to 3.46% of all private dwellings in Kitchener (Statistics Canada). • Removing the estimated vacant rental units from this figure, based on CMHC vacancy rates, leaves 3,093 units that were unoccupied at the time of the 2021 Census. This represents 3.0% of the total number of private dwellings in Kitchener. • The 3,093 units not usually occupied includes secondary homes and student housing where these units are not considered to be the occupant's primary residence. • Units left vacant due to renovation or redevelopment would also be captured in this figure, as well as some newly constructed units that are not yet occupied. For additional context, there were 29 and 66 residential demolition permits issued in the City of Kitchener in 2020 and 2021, respectively. Most of these demolition permits were for single detached dwellings, often replaced with a greater number of units. • While the absolute number of unoccupied private dwellings in Kitchener has increased since 2006, the percentage of unoccupied units declined between 2006 and 2016 and remained relatively unchanged between 2016 and 2021 (3.43% vs. 3.46%) (Statistics Canada). 3,700 3,600 3,500 3,400 3,300 3,200 3,100 3,000 Private Dwellings Not Usually Occupied - Kitchener Census Subdivision 2006 2011 2016 2021 Unoccupied private dwellings % Unoccupied Source: Statistics Canada, Census 2006, 2011, 2016 and 2021 Insufficient Supply is Causing Price Appreciation 4.20°/ 4.00°/ 3.80°/ 3.60°/ 3.40°/ 3.20°/ 3.00% A study released by the Bank of Canada in September 2021 found that cities with more inelastic housing supply face higher increases in house prices in reaction to positive local or aggregate shocks. In 2020, the pandemic put a premium on space. High income households were able to make the most of ultra-low mortgage rates stemming from an unprecedented era of expansionary fiscal and monetary policy. Demand for single family units surged, outstripping supply, and put strong upward pressure on prices. This upward trajectory in the Kitchener market is depicted in the graph on the following page. Canadian residential real estate prices are projected to rise by 14.3% in 2022 (CREA), a decelerated rate compared to the past two years, and there are early signals that rising interest rates are starting to put downward pressure on prices. 4 Page 28 of 61 • The average resale price for single detached and townhouse units in Kitchener declined in March and April 2022, but remain well above April 2021 prices. Apartment prices have so far continued to appreciate. Select Date Range: January2005 0 1,000,000 i 800,000 m v a` 600.000- E r m C m m 4t1D,00D 2D0,00D O O N fC 7 O O N fC 7 O O N C 111 7 N O N C R 7 a m O O N N C ru to R 7 7 0 O N ru R 7 N G N - R 7 q O N ru R 7 KitchenerEast- Single Kitchener East- KitchenerEast - Apartment Kitchener West - Single Kitchener West- KitchenerWest- Apartment Family Townhouse Family Townhouse Note: Areas with insufficient sales are not included in the HPI. Contact your local REALTOR- for exclusive and in-depth neighbourhood level price information. Source: Kitchener -Waterloo Association ofREALTORSs Impact of Foreign Investment • There is persistent speculation and misinformation about who is buying new condominium units in Canada (Baker Insights Group). • It can be tempting to blame investors and foreign buyers for high house prices and the unaffordability of new builds, but planning policy, lack of supply, development fees and land prices tend to be the bigger culprits. • An analysis of new condo sales completed through Baker Real Estate Group indicated that of 39,000 sales, 37,585 of the purchasers (96.7%) were residents of Canada at the time of purchase. Purchasers from China were the second most prevalent at 2.3%, followed by the U.S. at 0.4% (Baker Insights Group). • CMHC studies have indicated that between 4 to 7% of Toronto condos were foreign owned, however this pre -dates Ontario's implementation of a foreign buyer tax in April 2017. Outside of major cities such as Toronto, the percentage of foreign owners is marginal. • In the Kitchener -Cambridge -Waterloo CMA, 1.3% of properties were owned by non- residents as of 2020. The rate of non-resident ownership is highest in the condo apartment category (2.9%) and lowest in the single detached and vacant land categories (0.9%) (Statistics Canada - Canadian Housing Statistics Program). 5 Page 29 of 61 Effectiveness of Foreign Buyer Taxes Introduced in 2017, Ontario's Non -Resident Speculation Tax (NRST) requires foreign nationals, foreign corporations, and taxable trustees to pay a 15% tax on residential home purchases within the Greater Golden Horseshoe Region. This tax has recently been increased to 20% and expanded to all of Ontario. Current data on the impact of Ontario's tax is limited, but a recent study on the impact of the Additional Property Transfer Tax for Foreign Entities in B.C. found that the tax reduced relative house price growth by approximately 1%, with this effect occurring immediately after the announcement of the tax and fading over a period of 6 months. Real Estate as an Investment (Speculation) Canadian Economy is Driven by Real Estate Investment Real estate is a considered a safe investment in Canada and residential investment has surged to 10% of GDP, more than double the U.S. rate. A Broadbent Institute study found that half of Canadian couples between 55 and 64 years of age lack employer-provided pensions. A large proportion of their future livelihood is bound up with the continuing growth of Canada's housing market. Many Canadian pension funds invest heavily in real estate because of its nearly unmatched returns. The housing sector is in many ways propping up the economy, and government policy has served to support this. Lack of Data on Speculation • More recent concern about price speculation in the market has been driven in part by reports from CMHC and Teranet. • A recent CMHC Housing Market Assessment release noted that "exceptionally strong demand and home price appreciation through the course of the pandemic may have contributed to increased expectations of continued price growth for homebuyers in several local housing markets across Ontario and Eastern Canada. This, in turn, may have caused more buyers to enter the market than was warranted." • While CMHC's Housing Market Assessments have identified significant imbalances that could increase the risk and consequences of a housing market downturn, there is no data specific to the prevalence or impact of price speculation in the market. • Recent reports of speculators dominating the market were also fueled by Teranet's Q4 2021 Market Insights Report, which analyzed sales by buyer segment. Teranet reported that purchases by `Multi -Property Owners' have climbed steadily and represented over 25% of total transactions between January and August 2021. • The proportion of buyers defined as `Multi -Property Owners' was roughly 16% in 2011 but increased steadily to approx. 23% in 2017. The proportion has been within the 22% to 25% range since that time (Teranet). • It is important to caution, however, that `Multi -Property Owners' are not necessarily speculators. As an example, Teranet's report highlights trends in Waterloo, where the data validates the anecdotal accounts of parents purchasing second properties to house children pursuing post -secondary education. • A recent Bank of Canada financial system review found that investor -buying rebounded to 20.1% of all purchases in the country. `Investors' were defined in the review as borrowers who obtain a mortgage to buy a property while maintaining a mortgage on another property. 6 Page 30 of 61 It is important to note, however, that the proportion of investor -purchasers has been relatively consistent since 2014, with current trends comparable to the previous peak in 2017-18. The Bank of Canada also cautioned that determining the level at which investor activity should be a cause for concern is difficult and requires further study. Share of total home purchases First-time homebuyers Repeat homebuyers ■ Investors 100 80 64 40 20 0 2015 ' 2016 SOURCE: BANKOFCANADA FIVI VY rAY i rAwlhn 2024 '2021 FINANCIAL POti l • In 2019, 13.4% of residential properties in the Kitchener -Cambridge -Waterloo CMA were owned by `Multiple -Property Owners'. Based on available 2018 data, most of the 'Multiple -Property Owners' in the area (76.9%) own two properties (Statistics Canada — Canadian Housing Statistics Program). Family Assistance is Sustaining Demand While not a new phenomenon, many parents are also assisting first-time home buyers or young movers with down payments and acting as co -signors on mortgages. CIBC reported that the average gift for first-time homebuyers rose from $52,000 in 2015 to $82,000 in 2020, with over 30% of first-time buyers receiving financial help from their families. Parental down payment assistance totaled an estimated $10 billion in 2020. In addition, the number of parents co-signing for mortgages has increased 45% compared to before the pandemic. Parental co-signers likely make up some of the multiple mortgage holders that are broadly being classified as 'Investors' (Financial Post). Investors Contribute to Housing Supply Analysis from CMHC indicates that the longer-term effect is that investors are often a source of financing to develop more housing and increase supply. In many ways, investors contribute positively to the overall supply of housing, including rental. In Canada, most developers are required to sell 65-75% of revenue in a development before they can qualify for construction financing. When end-users don't feel comfortable buying at that stage, this creates an opportunity for investors to act as "middlemen", and in doing so they provide a function to the development industry (Baker Insights Group). 7 Page 31 of 61 • A recent Financial Post article inferred that investors represent a large market segment in part because the data includes mortgages for new home sales. Investors are critical for sustaining the new home market because they finance the construction phase and may not have urgent occupancy needs. They likely represent a smaller share in the resale market. • The supply of purpose-built rental apartments (PBRs) also hinges on investors, as PBRs represent investors taking a longer-term view, and they are often supported by pension funds and REITs that are looking to make consistent, modest returns over a longer horizon. • Condo owners or investors also contribute to the supply of rental housing. The number of condo apartment units in the Kitchener -Waterloo -Cambridge CMA increased from 8,825 to 13,319 between 2015 and 2021. At the same time, the number of condo units that are rented out (secondary rental market) grew from 2,053 to 4,372. The percentage of condo units that are rentals has steadily increased from 23.3% in 2015 to 32.8% in 2021 (CMHC). Source: Canadian Mortgage and Housing Corporation (CMHC) Government Policy and Actions Current Actions • Government action to address housing issues has typically been on the demand side. At the federal level, this has included shorter amortizations, tougher lending practices, stricter mortgage rules and regulatory changes. • Current federal proposals or commitments include bans on foreign ownership, additional taxes on existing foreign property left vacant, an end to blind bidding, a tax to discourage home flipping, a tax-free savings plan for first-time buyers, and funding for builders to build "middle class homes". • While demand-side measures are politically popular, many experts argue that making money easier to get a hold of does not bring down affordability but has opposite effect of supporting high prices. 8 Page 32 of 61 Secondary Rental Market (Condo Apartments) - Kitchener -Waterloo -Cambridge CMA 14,000 35.00/. 12,000 30.0°/ 10,000 25.090 8,000 20.0°/ 6,000 15.0% 4,000 10.0°/ 2,000 ' ' ' ' 5.0! 0 0.0 2015 2016 2017 2018 2019 2020 2021 Condo Universe Condo Rental Units % Rental Source: Canadian Mortgage and Housing Corporation (CMHC) Government Policy and Actions Current Actions • Government action to address housing issues has typically been on the demand side. At the federal level, this has included shorter amortizations, tougher lending practices, stricter mortgage rules and regulatory changes. • Current federal proposals or commitments include bans on foreign ownership, additional taxes on existing foreign property left vacant, an end to blind bidding, a tax to discourage home flipping, a tax-free savings plan for first-time buyers, and funding for builders to build "middle class homes". • While demand-side measures are politically popular, many experts argue that making money easier to get a hold of does not bring down affordability but has opposite effect of supporting high prices. 8 Page 32 of 61 • Toronto has proposed a vacant home tax on properties that remain unoccupied for more than six months starting in 2022, with some exemptions. The prevalence of vacant homes in Toronto is not well known, with some estimates suggesting approx. 1% of dwellings could be empty. Other municipalities such as Hamilton are following suit. • While data following the implementation of Vancouver's vacant property tax indicates that the number of vacant dwelling units did decline, there has been no noted correlation between the tax and a decrease in house prices. • There is also a lack of clarity concerning the proportion of vacant dwelling units that are uninhabitable or under renovation, relative to those simply left unoccupied. • While not a direct response to the housing market issues, the recent and continued increase in interest rates should also serve to cool the demand for housing. Needed Actions As stated in a report by Scotiabank Economics, a key challenge is finding an approach that can overcome political obstacles — very often within City limits, measures to increase density pit current owners vs. prospective residents. It is argued that Canada needs a truly collaborative, multi -stakeholder process and likely federal funding to incent provinces and municipalities (e.g., tie future transit funding to density and speed of approval objectives or offer density incentives). While it is a positive sign that housing starts rose sharply in 2021, further analysis and measures are needed to support new supply of all forms of housing. The supply-side challenges regularly identified by developers and the real estate industry include: o Lengthy development approvals processes and lack of infrastructure to support growth; o Structure of requirements to build inclusive housing (concern with government policy unintentionally interfering with market forces); o Regulatory burden of small-scale intensification (exclusionary zoning); o Rising Development Charges (up to 25% of development costs in some areas) reduces returns relative to existing buildings; and o Shortages of skilled trades are increasingly likely to affect builders' ability to meet demand (need to see more support for skills development programs). Inclusionary zoning policies need to be thoughtful to avoid unintended consequences (e.g. shift burden to new condo purchasers). There are also arguments that the creation of affordable housing needs to be public housing, such as rent -geared to income or other programs, otherwise the effectiveness of such policies is limited. Overall, much more policy focus should be devoted to finding ways to increase the responsiveness of supply to demand and removing the obstacles that limit housing supply (Scotiabank Economics, BILD Toronto, OREA). 9 Page 33 of 61 Highlighted References Airdna, Kitchener Short-term Rental Overview. https://www. ai rd na. co/vacatio n-rental-data/app/ca/ontario/kitchener/overview Baker Insights Group, B.I.G. Market Report, Foreign Buyers Analysis, October 2021. https://www. fli ps nack. com/bakerrealestate/big-ma rket-report-fo reig n-buvers-analysis-dhf6m mkrzp/ful I -view. htm I Bank of Canada, Financial Stability Through the Pandemic and Beyond, November 2021. https://www.bankofcanada.ca/2021/1 1 /financial-stabi lite-throug h-the-pandem ic-and-beyond/ Bank of Canada, Staff Analytical Note — Canadian Housing Supply Elasticities, September 2021. https://www. ba nkofcanada. ca/wp-content/uploads/2021 /09/san2O2l -21. pdf Canada Mortgage and Housing Corporation (CMHC), Housing Market Information Portal, as of October 2021. https://www03.cmhc- schl.gc.ca/hmip-pimh/en#Profile/1/1 /Canada Canada Mortgage and Housing Corporation (CMHC), Rental Market Report 2021. https://www. cm he-schl.gc. ca/en/professionals/housing-markets-d ata -a nd-research/market-reports/rental-market-reports-maior- centres Canadian Real Estate Association, Quarterly Forecasts, September 2021. https://www.crea.ca/housing-market-stats/quarterly-forecasts/ Deaglan Jakob, University of Victoria, Do Taxes on Foreign Purchasers Lower Housing Prices? April 2020. https://www.uvic.ca/socialsciences/economics/assets/docs/doakob thesis1.pdf Kitchener Waterloo Association of Realtors (KWAR), Stats Reports, November 2021, December 2021 and January 2022. https://kwar. ca/category/m a rket-updates/ Kitchener Waterloo Community Foundation, Waterloo Region 2021 Vital Signs Report. https://www.kwcf.ca/vital-signs Moody's Analytics and RPS Real Property Solutions, Canada Housing Market: Slower Price Growth, October 2021. https://www.moodysanalytics.com/-/media/article/2021/1 0-canada-housing-market-outlook. pdf Ontario Housing Affordability Task Force Report, February 2022. https://fi les. onta rio.ca/m mah-housing-affo rdabi lite -task -force -report -en -2022-02-07-v2. pdf PMA - CIBC Summit Series, Season 2 Episode 7, GTA Housing Crisis — Solutions to Affordability and Supply Summit, November 2021. https://www.youtube.com/watch?v=Purco-Ta hs&t=10s RE/MAX, 2022 Housing Market Outlook Report, December 2021. https://blog. rem ax. ca/ re-max-ex pects-canadian-real-estate-prices-to-rise-9-2-in-2022/ Rentsync, National Rental Demand Report, 2021. https://www. rentsync.com/resources/demand-report/rentsync-national-rental-demand-report:-december-2021 Ryerson City Building Institute and Evergreen, Getting to 8,000 — Building a healthier rental market for the Toronto Area, October 2017. https://archive.citybuildinginstitute.ca/wp-contenUuploads/2017/10/Gettingto8000 Report-web.pdf Scotiabank Economics, Estimating the Structural Housing Shortage in Canada: Are We 100 Thousand or Nearly 2 Million Units Short? May 2021. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-note.housing- note--m ay-12-2 021-. htm I Scotiabank Global Economics, Housing Note, Which Province Has the Largest Structural Housing Deficit? January 2022. https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications. housi ng.housi ng-note.housing- note--ia nuary-12-2022-. htm I Statistics Canada, Canadian Housing Statistics Program. https://www.statcan.qc.ca/en/submects-start/housing Statistics Canada, Census 2006, 2011, 2016 and 2021. https://www 12. statcan.gc. ca/census-recensement/index-eng.cfm Teranet, Market Insights Report, Q4 2021. https://www. to ranet. ca/tera net-blog/te ranets-latest-market-insig ht -repo rt-an-update-on-ontarios-buyer-segments/ 10 Page 34 of 61 Staff Report r NJ :R Financia( Services Department www.kitchener.ca REPORT TO: Finance and Corporate Services Committee DATE OF MEETING: August 8, 2022 SUBMITTED BY: Ryan Scott, Manager, Procurement 519-741-2200 ext. 7214 PREPARED BY: Ryan Scott, Manager, Procurement 519-741-2200 ext. 7214 WARD(S) INVOLVED: N/A DATE OF REPORT: June 1, 2022 REPORT NO.: FIN -2022-296 SUBJECT: Procurement By-law Review RECOMMENDATION: That the Procurement By-law attached as Appendix 2 to Financial Services Department report FIN -2022-296, be approved; and That the contents of The City of Kitchener Municipal Code Chapter 170, Purchasing and Materials Management be repealed and replaced by the Procurement By-law; and further, That By-law 2017-106 being a By-law to cover Purchasing and Materials Management policies be repealed. REPORT HIGHLIGHTS: • Revisions to Procurement By-law including Administrative updates; • Proposing Change of Ability to Award within Council Approved Budget; • Benefits include efficiencies in process resulting in time and money savings; • Decrease time to award increases competitive advantage for the City with suppliers. BACKGROUND: The Municipal Act, Section 270(1), requires that policies are adopted with respect to the procurement of goods and services. The existing Purchasing By-law, which forms the basis of Chapter 170 (Purchasing and Materials Management) of The City of Kitchener Municipal Code, outlines policies and procedures to be followed in order to obtain the best value when procuring goods and services. The Procurement Section is responsible for sourcing approximately $120 million dollars annually of goods, services and construction. *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. Page 35 of 61 In 2017 the Purchasing By-law was updated to create a policy framework that aligned with trade agreements and best practices of other municipalities. Since that time there has been a comprehensive review which provided many recommendations and a business plan project was identified to review overall procurement practices including the by-law. Changes were planned to come forward to Council earlier but some of this work was delayed due to the pandemic, picking up again in 2021. The suggested changes align the City's procurement with industry best practices. The intent as set out within this report, and the proposed Procurement By-law, is to enable procurement processes to be efficient and effective, strengthen the policy around procurement while enabling the deployment of various procurement tools and continuing to safeguard the principles of openness, fairness, transparency and accountability. The recommendations will also ensure that the City will continue to experience few challenges related to procurement policies and practices while exploring and implementing innovative and changing best practices in public procurement. REPORT: The revised Procurement By-law, Appendix 2, was developed through collaboration with suppliers, external construction associations, municipal counterparts, staff from across the organization and external legal review. Staff identified potential changes by reviewing: • feedback provided during debriefings with suppliers; • findings in the comprehensive audit of the purchasing section; • undertaking purchasing process review work; • purchasing By-laws of municipalities across the province; • trade agreements including the Trade and Cooperation Agreement of Quebec and Ontario, the Canadian Free Trade Agreement, the Canadian -European Comprehensive Economic and Trade Agreement, the Broader Public Sector Procurement Directive; and • recommendations from external legal counsel External Legal Review In 2019, external legal council specializing in Procurement was hired to conduct a comprehensive review of the Procurement division, procedures, templates, and by-law. Their report confirmed areas of exposure and recommendations. This has resulted in development of new solicitation documents, new procedures and policies, Procurement staff training to facilitate this transition to a strategic mindset and use of appropriate tools, and legal review and recommendations specific to the proposed Procurement By-law. The proposed Procurement By-law is the remaining piece required to bring forward the full implementation of the suite of items the City has available to implement as recommended by external legal counsel and supported by internal legal counsel. Page 36 of 61 Key Changes The proposed Procurement By-law includes language and governance that are broadly recognized industry best practices. Many other agencies have adopted this style of institutional governance. Revisions to the current Purchasing By -Law: • Housekeeping & administrative changes (titles, roles and definitions); • Updates to language that provide more efficiency (eg. for design competition, other innovation procurement approaches); • Updated open competition procurement threshold from $100K to $120K — updated to align with trade agreement values — Appendix 4; • Strengthened language — Contract Management and Supplier Performance; • Ability to award within Council approved budget Ability to Award within Council Approved Budget The current Purchasing By-law is prescriptive on the scenarios which require a recommendation to be approved by Council, based on certain dollar thresholds or other scenarios. This practice however of taking award recommendations to Council (even if already approved in Budget) significantly delays the procurement process, potentially increases pricing thereby putting the city at a competitive disadvantage. Analysis done on recommendations over the past three (3) years shows that approximately 45 reports are brought to Council each year, of which 35 were within Council approved budget. Of the 45 reports, 100% were approved by Council. External legal council has recommended that the practice of going to Council for `approval' of awards within budget, be discontinued for the following reasons: - Council has limited ability to `not proceed' with an award where a binding tender is received and is within budget; there are legal risks Council would be taking if the award recommendation was not approved. - Having Council approve awards exposes the City to the risk of allegations of inappropriate political influence and interference in the procurement process, which is specifically prohibited within the by-law. Council's role is to approve the expenditures through the budget process. - Many other government agencies including the municipal space have adopted this as best practice, as it streamlines the procurement process and reduces legal risk to the municipality. The proposed procurement by-law recommends that staff have the ability to award solicitations within Council approved budget, provided the approved funding is not exceeded and it is in compliance with the by-law. Council will have the ability to identify high value or projects of significant risk, security concern or significant community interest to be brought forward to Council. In addition, Council will continue to receive quarterly reports which provides all information currently being received in the award recommendations. Page 37 of 61 The graphic below outlines the current process vs the proposed process and highlights the significant time saved by awarding procurements within days after evaluation rather than waiting to bring a recommendation to Council for approval. This benefits the City in that suppliers will be able to offer competitive pricing, knowing they will not hold prices for 90 days, quicker time to project start, giving the city a competitive advantage. Other benefits are outlined below. ►►► Proposed Change - Ability to Award Within Council Approved Budget Current Process— Existing Bylaw Council Approves Council solicitation Recommendation Contract Approves Preparation of Posted on Procurement Internal Project Solicitation City's solicitation Review and Budget Documents Website Closes Evaluation Process O © 0 Steps Proposed Process— Updated Bylaw Staff Prepare Council Approves Recommendation to Recommendation Contract Award Report to Award Awarded 0 a Q 30-90 Days D Within Budget but over $750k Council Approves Preparation of Solicitation Procurement Internal Project Solicitatlon Posted onSolicitation Reviewand Budget Documents City's Website Closes. Evaluation Processeps Steps 0 4) 0 0 0 Contract Awarded 2-30 Days Key Benefits to Award within Council approved Budget • Experience shows that more bids received translates to more competitive Shorter - to - • results pricing, resulting in savings to citizens of Kitchener. • - competitive •• better -Suppliers have expressed challenges to hold pricing for 90 days (their suppliers cost certainty hold pricing for only 30 days) resulting in contingency being added to bids and • potential reduced interest in procurements if contractors facing resourcing constraints -Appendix 1 shows other municipalities that have adopted this style of governance (awarding projects within Council approved budget) putting them at a competitive advantage -]Reduces the risk of allegations of inappropriate political influence and interference in the procurement process (as prescribed in the by-law); LIAppreciated by the supplier community as it allows them to more accurately cost and plan their resources to align better with city projects LIAllows suppliers to bid on more City of Kitchener projects (will save $$) LIAllows internal business units to expedite projects -Time savings and efficiencies will provide an opportunity to award the maximum number of projects internally • Provide staff more time for supplier performance management and spend analysis -Quarterly Council reports provide information on all procurements issued exceeding the thresholds • Bid Opportunities are showcased on the City's website, providing transparency to the public, suppliers and Council. Provides up to date information on current and awarded solicitations including submissions and pricing. -Appendix 3 provided as example. Page 38 of 61 Creating Conditions for More Bids and Better Pricing Through our own experience, we know that even one additional bid can result in greater budget savings and the proposed changes to the by-law is expected to create the conditions for encouraging this. Based on the requirements for approval through the current by-law and the process conducted, contractors and suppliers are required to hold their bid prices for 90 days. Through direct feedback, contractors have expressed challenges holding prices for this length of time as many suppliers that they rely on for materials are only willing to hold prices for 30 days. This can result in contingency being added to bids to manage the risk of price fluctuations, and in some cases, limit the interest for certain types of procurements where contractors have limited resources and must be selective in what types of solicitations they decide to respond to and pursue. Timing of contract award matters and is why we often see greater number of bids earlier in the year when contractors are planning their work compared to far fewer bids received for solicitations later in the year. Reducing procurement timelines from approximately 120 to 60 days has the potential to result in additional budget savings. For example, bids on larger solicitations (greater than $51VI), can often vary between $100k to $200k and the difference between the lowest and highest bidder can be up to $1 M. By reducing the timeline, we create the conditions to encourage more bids and better pricing that could result in savings that we are not fully realizing as illustrated in the example below: Proposed Change — Illustrative Scenario Scenario # 1— Current Bylaw and limit of $750k Scenario #2— Proposed Bylaw Award within Budget Road Reconstruction Project — Kitchener Street ) Road Reconstruction Project — Kitchener Street Project Budget: 6M Project Budget: 6M Estimated Process Time: 120 days Estimated Process Time: 60 Days (Solicitation to Award) (Solicitation to Award) Summary of Bids: Summary of Bids: Bid #1 - $6.21M Bid #1 - $6.11M Bid 42 - $5.7M* Bid 442 - $5.6M* Bid #3 — $5.$1M Bid 43 — $5.71M Bides $5.8M *Awarded Bid - $5.71M *Awarded Bid - $5.6M Budget Savings - $300k Bud et Savings - $400k Scenario #2 - proposed bylaw has the potential to result in more competitive bids, better pricing, cost certainty and greater budget savings. Summary Staff are confident that the collaborative approach undertaken in this review ensures that the proposed Procurement By-law is aligned with trade agreements, legislated requirements Page 39 of 61 and best practices to allow an innovative approach to procurement of goods, services and construction. Staff believe the changes proposed will result in significant process efficiencies, providing more time for value-added work such as supplier performance management and spend analysis and in addition will allow suppliers to provide more competitive bids and pricing, resulting in better value. The proposed changes continue to ensure the City's procurements are conducted in an effective, open, and fair manner, providing the public, suppliers and Council transparency in the process. STRATEGIC PLAN ALIGNMENT: This report supports the delivery of core services. FINANCIAL IMPLICATIONS: None COMMUNITY ENGAGEMENT: INFORM — This report has been posted to the City's website with the agenda in advance of the council / committee meeting. PREVIOUS REPORTS/AUTHORITIES: • Municipal Act, 2001 • FCS -17-038 Purchasing By-law Review APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services Department ATTACHMENTS: Appendix 1 - Municipal Comparison for Institutional Governance Appendix 2 - Procurement By-law Appendix 3 - Transparent Procurement Processes — Bid Opportunities Website Appendix 4 - Trade Agreement Competitive Bid Thresholds Page 40 of 61 Appendix 1 Municipal Comparison for Institutional Governance Procurement Spend Per Year on Average City of Waterloo 50 M City of Cambridge 65 M City of Niagara Falls 65 M Authority to Award within Council Approved Budget Limited Yes Yes City of Brantford 89 M Yes City of Barrie 104 M Yes Town of Oakville City of Kingston City of Greater Sudbury City of Vaughn City of Guelph City of Brampton 105 M Yes 120 M Yes 140 M Yes 140 M Yes 147 M Yes 280 M Yes City of Hamilton 350 M Yes Region of Durham City of Mississauga 370 M Yes 477 M Yes Region of Halton 875 M Yes Region of Waterloo City of Ottawa 890 M Limited Yes Yes Yes Yes Limited Yes 1 B Region of Peel Region of York City of Toronto City of Kitchener Current (2017) City of Kitchener Proposed 1 B 1.5 B 3.1 B 120 M 120 M Page 41 of 61 Appendix 2 Procurement By-law Uploaded as separate attachment Page 42 of 61 Appendix 3 Transparent Procurement Process — Bid Opportunities Website The City of Kitchener Bid Opportunities Website provides both Council and the supplier community with bid information including project scope, number of submissions, current status and award results. A few screenshots have been included for Councils reference. Welcome to the City of Kitchener Bid Opportunities Website R' Bid. Details Bid Classification: Bid Type: Bid Number: Bid Name: Bid Status: Bid Awarded Date: Bid Closing Date: Question Deadline: Time -frame for delivery or the duration of the contract: Negotiation Type: Condition for Participation: Electronic Auctions: Language for Bid Submissions: Submission Type: Submission Address: Public Opening: Description: Awarded Ttie roilowing are the awarded Yenclors Tor'trie 61d bids&tenders Construction RFT - Low Bid T22-002 Cambridge Avenue (Bruce Street to Sherwood Avenue) Reconstruction Awarded Tue Apr 12, 2022 (EDT) Wed Mar 23, 2022 1:00:59 PM (EDT) Fri Mar 18, 2022 1:00:00 PM (EDT) Refer to bid document Refer to bid document Refer to bid document Not Applicable English unless specified in the bid document Online Submissions Only Online Submissions Only No Cambridge Avenue Reconstruction - Bruce Street to Sherwood Avenue, extending over an approximate project distance of 550 metres. The work includes the replacement of the existing sanitary sewer, storm sewer, water supply system, roadway, curb and gutter, sidewalks and municipal service connections to the street property line. Company - Contact Results McPherson, Corey Siena Infrastructure Inc 1193 Dundas St, Woodstock 54,219,00D.00 Ontario, Canada N45 7V9 Bids Submitted Tile following are the urwSTtcial old resurls Company Contact Results - MrPherson, Corey Sierra infrastructure Inc 1193 Dundas St, Woodstock 54,219,D0D.00 Ontario, Canada N45 7V9 Davis, Randy Steed and Evans Limited 3000 Ament Line, St. Jacobs $4,406,876.49 Ontario, Canada N092NO Chliderhose, Murray J. Weber Contracting Limited PO Box 59, Breslau Ontario, Canada S4,494,586-25 N0$IMO Small, Don Gedco Excavating Ltd. 485 Paris Rd, Brantford $4,915,601.30 Ontario, Canada N3V OA4 Page 43 of 61 Ur F FR M Ontario Public Buyers Association Appendix 4 Trade Agreement Competitive Bid Thresholds THRESHOLDS CANADIAN FREE TRADE AGREEMENT (CFTA) AND CANADA -EUROPEAN UNION COMPREHENSIVE AND ECONOMIC TRADE AGREEMENT (CETA) Procurement Type CFTA Goods Services Construction CETA Goods Services Construction (January 1, 2022 — December 31, 2023) Ministries and most Provincial Agencies iwM ai Gam. Emir—1 (CDN$) $30,300 $121,200 $121,200 $238,400 $238,400 $9,100,000 Provincial Agencies of a commercial or industrial nature " (CDNS) $605,600 $605,600 $6,056,100 $651,000 Section A, $733,60U Section B $651,000 Section A, $733,600 Section B $9,100,000 Municipalities, school boards, publicly funded academic. health and social services entities {CDNS} {s.n --i o— rs&ks) $121,200 $121,200 $302,900 $366,800 $366,800 $9,100,000 Page 44 of 61 BY-LAW NUMBER 2022 -XXX of the CORPORATION OF THE CITY OF KITCHENER (Being a By-law to repeal and replace Chapter 170 of The City of Kitchener Municipal Code with respect to Purchasing and Materials Management) WHEREAS the Municipal Act 2001, S.O., Section 270 requires all municipalities and local boards to adopt and maintain a policy concerning the procurement of goods and services. AND WHEREAS the Corporation of the City of Kitchener is committed to ensuring its procurement decisions are fair, open and transparent; AND WHEREAS purchases made by the City of Kitchener should reflect best value for the taxpayer, protect the Corporation's financial interests and encourage competitive bidding; AND WHEREAS the Corporation of the City of Kitchener must be prepared to manage extraordinary circumstances from time to time, and that such circumstances may require immediate procurement decisions that are necessary to prevent or alleviate serious delay, a threat to public health, safety or welfare, the disruption of essential services or damage to public property or to respond to any emergency of the Corporation or as required under the provincial Emergency Management and Civil Protection Act (as amended); AND WHEREAS effective planning, monitoring and control of public sector procurement are essential for maintaining public trust and confidence; AND WHEREAS it is deemed expedient that the Council of The Corporation of the City of Kitchener repeal Chapter 170 of The City of Kitchener Municipal Code and repeal and replace By- law 2017-106 as amended being a by-law to establish a policy concerning the procurement of goods and services. NOW THEREFORE the Council of The Corporation of the City of Kitchener enacts as follows 1. PURPOSES OF THIS BY-LAW The purposes of this By-law are: 1.1. To express the City's goals and objectives in relation to its procurement of goods, services and construction; 1.2. To describe the roles, responsibilities and authorities of the City's employees, officers and elected officials in carrying out the City's procurement operations; 1.3. To extend authority to the CAO and CPO for the approval of detailed procurement procedures and protocols that are consistent with the intent of this By-law and, to supplement and amend those procedures and protocols as and when deemed necessary, to meet the present and future needs of the City; and, 1.4. To comply with the requirements of Section 270(1) of the Municipal Act, S.O., 2001, as amended from time to time. 2. PROCUREMENT GOALS AND OBJECTIVES The goals and objectives of the City's procurement operations are: 2.1. To obtain the best value for the City when procuring goods and service(s) and construction and manage inventory in an efficient, timely and cost effective manner; 2.2. To encourage competitive procurement and ensure the principles of fairness, objectivity, transparency and accountability are reflected in the City's procurement processes; 2.3. To support effective business planning such that goods, services and construction will only be acquired after consideration of need, alternatives, timing and appropriate life cycle management issues; 2.4. To adhere to the highest standards of ethical conduct and to avoid conflicts between the interests of the City and those of the City's employees, officers and elected officials; 2.5. To ensure compliance with all applicable trade agreements, laws and regulations; Page 45 of 61 By-law 2022 -XXX The Corporation of the City of Kitchener Procurement By-law 2.6. To practice reciprocal non-discrimination and geographic neutrality with respect to Ontario's trading partners and avoid preferential treatment of local suppliers; 2.7. To avoid creating situations or relationships which may result in a continuous reliance on a particular supplier; and, 2.8. To encourage the procurement of goods, services and construction with due regard to the preservation of the natural environment and the promotion of human rights and fair labour practices. 3. APPLICATION OF THIS BY-LAW 3.1. This By-law applies to all departments of the City and may be adopted in principle and, at their own discretion, by local boards and affiliates of the City; 3.2. This By-law applies to the procurement of all goods, service(s) or construction, except for those items set out in Schedule "A". This By-law also applies to the disposal of the City's Surplus Assets; 3.3. In addition to the items set out in Schedule "A", this By-law does not apply to the acquisition or disposal of real property. The disposal of real property is governed by the Policy and/or By-law in effect at the time of such disposition; and, 3.4. In addition to this By-law, the City has procedures, protocols, templates and forms for use during the procurement cycle. All tools for engaging in procurement activity will be maintained and updated by the Procurement Section as required and stored on the City's Intranet and where applicable the external website. 4. DEFINITIONS 4.1. In this By-law: "Agreement " means a written document, executed by the City and the Supplier, evidencing the Contract between the City and the Supplier for the Deliverables being procured; "Approval Authority " means the authority to approve Procurements and award Contracts, as well as any assignment or corporate change requests related to such Contracts, in accordance with Section 10, but does not include the authority to issue Purchase Orders or execute Agreements; "Best value" means the optimal balance of performance and cost determined in accordance with specified evaluation criteria; "Bid" means a submission in response to a solicitation document; "Bidder" means a supplier that submits a bid; "Business Unit" means the City Department, division or unit initiating or requesting the Procurement of Deliverables; "CAO" means the Chief Administrative Officer of the City or designate; "CFO" means the Chief Financial Officer and Treasurer of the City or designate; "Chief Procurement Officer" or "CPO"" means the head of the City's Procurement Section or designate; "City" means The Corporation of the City of Kitchener; "City Solicitor" means the head of the City's Legal Services Division or designate; "Competitive Process" means either an Open Competition or an Invitational Competition; "Construction" means the process of using labour to build, alter, repair, improve or demolish any structure, building or public improvement, and generally does not apply to routine maintenance, repair or operations of existing real property; "Contract" means a commitment by the City for the procurement of goods, services or construction from a supplier, which may be evidenced by an agreement executed by the supplier and the City or a purchase order issued to the supplier by a duly authorized employee of the City; "Cooperative Purchasing" means a variety of arrangements whereby two or more public procurement entities combine their requirements in a single procurement process to obtain advantages of volume purchases from the same supplier(s) or contractor(s�a 9e 46 of 61 F' By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener "Council" means the Council of the City; "Deliverables" means Goods, Services, Construction, or any combination thereof; "Department" means any department of the City; "Department Head" or "DH" means the General Manager of a Department, and includes the CFO and CAO, or their designate;, "Designate" means a person authorized by the Department Head to act on their behalf, for the purpose of this By-law; "Disposal" means an act through which the City gives up title to property; "Goods" means moveable property including services that are incidental to the provision of the moveable property, such as manufacturing, delivery, installation or maintenance, and any necessary raw materials, products, supplies, equipment and other physical objects of every kind and description whether in solid, liquid, gaseous or electronic form, unless they are procured as part of a construction contract; "Immediate Family" means the spouse of the individual, as defined in Part III of the Family Law Act, and the child, stepchild, parent, stepparent, sibling, grandchild and grandparent of either the individual or their spouse; "Invitational Competition" means a competitive process in which an invitation to submit bids is issued to at least three suppliers; "Limited Competition" has the meaning ascribed thereto in Section 15.1; "Low Cost Purchase" (LCP) means a purchase of Deliverables, as per the thresholds stated in Schedule "B" of this By-law, that are not covered by an existing Standing Offer or Qualified Supplier Roster or available through the City's existing materials inventory; "Non -Competitive Process" has the meaning ascribed thereto in Section 15.1; "Non -Standard Procurement" has the meaning ascribed thereto in Section 15.1; "Open Competition" means the solicitation of bids through a publicly posted solicitation document; "Procurement" or "Purchasing" means the acquisition of goods, service(s) or construction by purchasing, renting or leasing; "Procurement Review Committee" or "PRC" means the committee established pursuant to Section 13 of this By-law; "Procurement Value" means the estimated maximum total value of the Deliverables being procured over the entire duration of the Contract, including the total value of all options for extension of the Contract term and/or expansion of the scope of Deliverables to be purchased under the Contract. The Procurement Value must include all anticipated costs to the City, including, as applicable, acquisition, delivery, installation, training, operation, maintenance, replacement and Disposal, less applicable rebates or discounts and shall exclude HST or other sales taxes; "Purchase Order" means the City's written document issued by a duly authorized employee of the City to a Supplier formalizing all the terms and conditions of the purchase and supply of the Deliverables identified on the face of the Purchase Order; "Procurement Section" means the section of the Finance Department responsible for the procurement of Deliverables for the City; "Purchasing Card" means a credit card provided by the City to duly authorized employees of the City for use as a payment method to purchase directly from Suppliers where permitted under this By-law and in accordance with a written card holder agreement and applicable procedures; "Qualified Supplier Roster" means a list of Suppliers that have participated in and successfully met the requirements of a Open Competition in accordance with Section 14.5, and have been pre -qualified to perform discrete work assignments involving the delivery of a particular type of Deliverables for a specified term; "Qualified Supplier Roster Competition" or "QSRC" means an expedited, invitational competition between suppliers that have been included on a Qualified Supplier Roster for the selection of a supplier to provide the Deliverables as specified in the original Open Competition during the term of the roster; "Real Property" means land or any interest in land and its permanently affixed buildings or structures; "Services" means the furnishing of labour, time or effort by a supplier, which may involve 3 Page 47 of 61 By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener the delivery or supply of products incidental to the provision of the services, and includes professional, construction or maintenance services, and expert or strategic advice that is presented for consideration and decision-making; "Solicitation Document" means the document issued by the City to solicit bids from bidders; "Standard Procurement" has the meaning ascribed to it in Section 14; "Standing Offer" means a written offer from a pre -approved Supplier to supply Deliverables to the City, upon request, through the use of an ordering process during a particular period of time, at a predetermined price or discount, generally within a pre -defined dollar limit. The Standing Offer does not create a contractual commitment from either party for a defined volume of business. The commitment to purchase against a Standing Offer is formed at the time a specific order is placed through the issuance of a Purchase Order to the Supplier; "Supplier" means a person carrying on the business of providing goods, services or construction; "Surplus Assets" means tangible or intangible property owned by the Corporation, other than Real Property, including but not limited to movable property subject to ownership, with exchange value that has been identified by authorized City staff as being Surplus Assets in accordance with Section 26; 4.2. References within this by-law to municipal, provincial or federal laws, by-laws, policies or procedures shall include any amendment to, and any modification or re-enactment thereof; any law, by-law, policy, procedure or provision substituted therefor; and all regulations and instruments issued thereunder or pursuant thereto. 5. CONTRACT SPLITTING 5.1. Subdividing, splitting or otherwise structuring procurement requirements or contracts in order to reduce the procurement value or in any way circumvent the requirements or intent of this By-law is not permissible. 6. CITY'S CONDUCT AND CONFLICTS OF INTEREST 6.1. The City's procurement activities must be conducted with integrity so as to maintain the public's trust. All procurement activities undertaken by the City must be conducted in accordance with: a) the City's Code of Conduct for Members of Council, Local Boards, & Advisory Committees, as applicable; b) the City's Conflict of Interest Policy for employees, as applicable; C) the City's Confidentiality of Information Policy, as applicable; d) the City's Procurement Procedures and Protocols, as applicable; e) the Statement of Ethics for Public Purchasers in Schedule "D" of this By-law; and f) the Municipal Conflict of Interest Act, R.S.O. 1990, c.M.50, as applicable. 6.2. All participants in a procurement process, including any external consultants or other service providers acting on the City's behalf, must declare any perceived, possible or actual conflicts of interest. 6.3. No purchase will be processed for personal items of direct benefit to officers or employees of the City or any member of Council except where permitted by policy, or under the auspices of a City -sponsored employee program or with the prior approval of the CAO. 6.4. No Deliverables will be purchased from an officer or employee of the City, or any associate or Immediate Family of an officer or employee, directly or indirectly, unless the extent of the interest of such individual has been fully disclosed to the CPO and the purchase has been subsequently approved by the CAO. 6.5. Members of Council are required to declare any direct or indirect pecuniary interest, and its general nature, which may result in a conflict of interest pursuant to the Municipal Conflict of Interest Act and the member of Council shall otherwise comply with that Act. 6.6. Any Contract with the City in which a member of Council or any employee of the City has an undeclared direct or indirect pecuniary interest may be voided. SUPPLIER'S CONDUCT AND CONFLICTS OF INTEREST 7.1 The City expects its Suppliers to act with integrity and conduct business in an ethical manner. Page 48 of 61 By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener 7.2 The City may refuse to do business with any Supplier that, in the City's opinion: a) has engaged in illegal or unethical bidding practices; b) has an actual or potential conflict of interest; C) has an unfair advantage in the procurement process; or d) fails to adhere to ethical business practices. 7.3 All Suppliers participating in a procurement process must declare any perceived, possible or actual conflicts of interest. 7.4 Where a supplier is retained to participate in the development of a Solicitation Document or the specifications for inclusion in a Solicitation Document, that Supplier will not be allowed to respond, directly or indirectly, to that Solicitation Document. 7.5 Illegal or unethical bidding practices include: a) bid -rigging, price-fixing, bribery or collusion or other behaviours or practices prohibited by federal or provincial statutes; b) attempting to gain favour or advantage by offering gifts or incentives to City officers and employees, members of Council or any other representative of the City; C) lobbying members of Council or City officers and employees or engaging in any prohibited communications during a procurement process; d) submitting inaccurate or misleading information in response to a procurement opportunity; and e) engaging in any other activity that compromises the City's ability to run a fair procurement process. 7.6 The City will report any suspected cases of collusion or other bid -rigging offences under the Competition Act to the Competition Bureau or to other relevant authorities. 7.7 In providing Deliverables to the City, Suppliers are expected to adhere to ethical business practices, including: a) performing all City contracts in a professional and competent manner and in accordance with the terms and conditions of the contract; b) complying with all applicable laws, including safety and labour codes (both domestic and international as may be applicable); C) ensuring that fair wages are paid to suppliers' employees; and d) providing workplaces that are free from harassment or discrimination of any kind. 8. SEPARATION OF ROLES AND THE ROLE OF COUNCIL 8.1. In accordance with best practices in municipal procurement, Council recognizes the need for a clear separation of political and administrative functions in relation to the City's procurement operations. It is the role of Council to establish policy and to approve expenditures through the City's budget approval process. Through this By-law, Council delegates to the City's officers and employees the authority to incur expenditures in accordance with approved budgets through the procurement of Deliverables in accordance with the rules and processes set out in this By-law. 8.2. To facilitate Council's oversight role in respect of significant projects, Council may require Departments to obtain Council's authority to initiate specific procurements by identifying procurement projects of interest, such as procurements that are of a high value or involve significant risk, security concerns or significant community interest. 8.3. To avoid the potential appearance of bias or political influence in procurement contract award decisions, members of Council will have no involvement in competitive procurement processes from the time those procurement process have been initiated through the advertisement or issuance of the solicitation document until a contract has been entered into with the successful bidder, except where Council is required to approve the contract award in accordance with Section 11 of this By-law. 9. ROLES & RESPONSIBILITIES 9.1. Specific responsibilities pertaining to all stages of a procurement process, from the initial identification of requirements through to the management of contracts with suppliers, are detailed in this By-law and the City's procurement procedures and protocols. In addition to those specific responsibilities, the general roles and responsibilities delegated to the City's 5 Page 49 of 61 By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener officers and employees are set out below. 9.2. Chief Administrative Officer It is the role of the CAO to lead the City's operations and promote this By-law. In fulfilling this role, the CAO is responsible for: a) exercising their authority for all procurement activity within the prescribed limits of this By-law; and b) providing support and guidance to the CFO, CPO and the Procurement Review Committee, as required. 9.3. Chief Financial Officer The CFO is responsible for overseeing the Procurement Section. It is the role of the CFO to implement and promote this By-law and oversee the conduct and activities of the City's employees in carrying out the City's procurement operations. In fulfilling this role, the CFO is responsible for a) providing support and guidance to the CPO and the Procurement Review Committee, as required; b) ensuring compliance with this By-law and reporting serious or repetitive incidents of non-compliance to Council, as warranted; and C) review and approval of recommendations submitted by the CPO and reporting to Council. 9.4. Chief Procurement Officer It is the role of the CPO to lead the City's procurement and inventory management operations. In fulfilling this role, the CPO or designate is responsible for: a) researching developments in Canadian public procurement requirements and best practices and recommending updates to this By-law, as necessary, to reflect such developments and support the City's procurement goals and objectives; b) developing, implementing, maintaining and updating, as necessary, the City's Procurement Procedures and Protocols; C) providing procurement advice and related services, including developing and maintaining the necessary forms, contracts, and solicitation document templates, for the purposes of fulfilling the procurement needs of the City; d) developing procurement strategies and continually analyzing City's business requirements and spending patterns to identify opportunities for more strategic sourcing, including: the standardization of goods and service(s) in conjunction with departments, where appropriate and feasible; and ii) the consolidation of all similar goods and service(s) where appropriate and possible; e) submitting recommendations and reports to Council, as required under this By- law. ensuring the consistent application of procurement procedures and protocols and providing procurement services and inventory management in an efficient and diligent manner; g) addressing and, where possible, resolving issues or concerns that arise in respect of a procurement process or the application and interpretation of this By- law and the City's procurement procedures and protocols and seeking guidance and advice from the Department Head, CFO and City Solicitor, as required; h) referring unresolved issues or concerns raised by the City's officers or employees relating to the procurement process to the CFO, as necessary; referring unresolved complaints from bidders or suppliers to the Procurement Review Committee, as necessary, or where required in accordance with applicable procedures and protocols; ensuring compliance with this By-law and reporting non-compliance, in writing, to the appropriate Department Head and/or the CFO where warranted; Page 50 of 61 By-law 2022 -XXX The Corporation of the City of Kitchener Procurement By-law k) providing appropriate orientation, training and tools to City employees involved in procurement activities; and serving asthe City's representative as member of co-operative procurement groups and organizations, where such membership is determined to be in the best interests of the City. 9.5. Legal Services It is the role of Legal Services to provide legal advice and assistance in respect of the City's procurement activities and its relationships with Suppliers. In fulfilling this role, Legal Services is responsible for: a) advising the CPO, as required, in relation to legal issues arising from procurement activities, and reviewing and approving specific procurement documentation referred for legal review by the CPO; b) providing advice on the finalization of contracts and agreements, and reviewing and advising on proposed changes to the City's standard terms and conditions, legal agreements and solicitation document templates; C) providing opinions to the Procurement Review Committee, as requested; and d) providing legal advice and counsel to the City in the event of a contract dispute or legal challenge flowing from a procurement process. 9.6. Business Units Department Heads It is the role of the Business Units to ensure that their requirements for Deliverables are met in accordance with the goals and objectives of this By-law. In fulfilling this role, Department Heads, or their designates, are responsible for: a) exercising their authority for all procurement activity within the prescribed limits of this By-law; b) delegating authority approval limits to staff in compliance with this By-law and all applicable procedures and protocols; C) ensuring that all procurement activities and decisions are authorized by this By- law and are carried out in accordance with the City's procurement procedures and protocols; d) monitoring all contract expenditures to ensure compliance with financial limits; e) identifying and addressing non-compliance with this By-law and applicable procedures and protocols within their Departments; and upon discovery of instances of non-compliance, notifying the Procurement Section and consulting with Legal Services to obtain advice with respect to mitigating potential risks to the City arising from the non-compliance; and g) ensuring compliance of the requirements of the City's Contractor Safety Program in the procurement of Deliverables to which the Program applies. 9.7. Business Unit Employees Employees of all Business Units are responsible for complying with this By-law. All employees involved in procurement activities must clearly understand their obligations and responsibilities under this By-law and all applicable procedures and protocols, and should consult with the Procurement Section in respect of any questions regarding the application or interpretation of this By-law or the procurement procedures and protocols. Department employees involved in procurement activities are encouraged to develop and foster productive and cooperative professional relationships with their colleagues in the Procurement Section. 9.8. Procurement Section Employees Employees of the Procurement Section are responsible for complying with this By-law and ensuring all procurement procedures and protocols are applied consistently. Procurement Section employees must clearly understand their obligations and responsibilities under this By-law and all applicable procedures and protocols and should consult with the CPO in respect of any questions regarding the application or interpretation of this By-law or the procurement procedures and protocols. Procurement Section employees are expected to provide purchasing services to Departments in an efficient and diligent manner, and are encouraged to develop and foster productive and cooperative professional relationships with their colleagues in Departments. Page 51 of 61 By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener 10. DELEGATED APPROVAL AUTHORITY 10.1. Delegated Approval Authority Delegated Approval Authority to award a contract are set out in Schedule "B". A contract must be established by the execution of a legal agreement and/or the issuance of a purchase order before work on the Deliverables commences. The Procurement processes shown in the Schedule "B" are minimum standards. Although Schedule "B" indicates that the Procurement process shall become progressively more formal as the estimated Procurement Value increases, the Business Unit or the CPO may always choose to use a more formal Procurement process than the process indicated in the table. 10.2. Approval Authority to CAO a) The CAO is hereby given delegated Approval Authority to approve any Contract awards each year during the months of June, July and August, provided that the total costs are within the relevant approved budget and that an information only report regarding these Contract awards is brought to Council at its next meeting. b) The CAO is hereby given delegated Approval Authority to approve any Contract award that would not be permitted for approval by Council under Sections 275 (1) to (4.1) of the Municipal Act, 2001 (otherwise known as "Restricted Acts After Nomination Day"), provided the total costs are within the most recently approved budget adopted by the Council before nomination day in the election and that an information only report regarding these Contract awards is brought to Council at its next meeting. 10.3. Conditions of Delegated Approval Authority All delegated Approval Authority is subject to the following conditions: a) Sufficient funding for the Procurement Value is available in the appropriate Council approved budget as may be amended and approved in accordance with standard City practice; b) The Procurement process was conducted in accordance with this by-law and all applicable procedures and protocols; C) Where a Competitive Process was conducted, the Contract is awarded to the top- ranked Bidder, as determined in accordance with the evaluation and selection process set out in the Solicitation Document; d) No contract may be entered into, either through the issuance of a purchase order or the execution of a legal agreement, unless approved budget in an amount sufficient to cover the Procurement Value is available and the procurement process was conducted in accordance with this By-law and all applicable procedures and protocols; e) A financing lease may only be approved and entered into in accordance with the City's Statement of Lease Financing Policy and Goals; f) The delegation of authority to approve a contract does not apply to a contract requiring Council approval under Section 11 of this By-law. 11. COUNCIL APPROVAL 11.1. The following contracts require Council approval: a) any contract requiring approval from the Ontario Municipal Board; b) any contract prescribed by statute to be made by Council; C) where Council has waived any provisions or requirements of this Procurement By-law; d) where there is an irregularity or unresolved challenge in connection with the procurement process and, in the opinion of the CFO, in consultation with the City Solicitor, the award of the contract is likely to expose the City to legal, financial or reputational risk; and, e) any one or more of the conditions of delegated Approval Authority are not met. i *:/ Xd11111l I P7 . N] ZdS] . a I:Z[el &*Ire1. I Il I;.411L1. Eel 41010211111 :ls3 : FiRl 4101 N Q =I *1 a) The CPO has the delegated authority to issue Purchase Orders and execute all Agreements, amendments to Agreements, assignments of Agreements and related documents concerning the Contract for the procurement of goods, services and construction in accordance with the terms of this By-law. All Agreements must be in a form satisfactory to the City Solicitor. Page 52 of 61 By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener b) Where an existing Contract includes extension or renewal options to permit the City to extend the term of the Contract and/or to purchase additional Deliverables under the Contract, the Approval Authority may exercise the option, provided that: i) the Contract was awarded in accordance with this By-law based on the total Procurement Value, including the value of the extension options; and ii) sufficient funding for the financial commitment is available in the appropriate Council approved budget. C) Where any Contract has been authorized under this By-law, the CPO may authorize disbursement of additional funds, under a Contract or by Purchase Order, provided that the additional funds: shall not exceed the greater of $120,000 or ten percent (10%) of the original Contract price; ii) are available within the relevant budget; and iii) are required to complete works that are necessary as part of the original scope of the Contract and do not expand the scope of work under the Contract beyond what was expressly contemplated under the original Procurement. d) Extensions or amendments to existing Contracts must not expand scope of the Contract beyond what was contemplated under the terms of the Contract and the original Procurement, or circumvent the need to procure additional Deliverables through a Competitive Process. 13. PROCUREMENT REVIEW COMMITTEE 13.1. The CPO is responsible for establishing a Procurement Review Committee (the "PRC") in accordance with the City's Procurement Policies and Protocols for the purpose of satisfying the requirements of this Section and providing oversight in other areas of procurement as established in the Procurement Policies and Protocols. 13.2. The PRC will consist of the CPO and two or more persons designated by the Corporate Leadership Team. 13.3. Where irregularities occur or complaints or challenges are made by bidders or suppliers in respect of a procurement process, the CPO will review the matter and may consult with the City Solicitor, where necessary. Where a bidder or supplier is not satisfied with the proposed resolution by the CPO, they may submit a request for review to the CPO and the CPO must refer the matter to the PRC, which will review with the objective of determining the merits of the alleged irregularity or complaint and an appropriate resolution. 13.4. Any decision of the PRC, or in the event the PRC cannot reach agreement on the resolution of a matter referred to it, a report of the findings of the PRC must be prepared and submitted to the CFO for consideration and determination of the matter. A copy of the report shall be provided to the CPO. 14. STANDARD PROCUREMENT 14.1. A standard procurement is the acquisition of goods, services or construction through the applicable process and method identified and described in Schedule "B" of this By-law. Depending on the type and value of the goods, services or construction required, standard procurement processes include: a) placing an order under an existing Standing Offer; b) making a Low Cost Purchases using a corporate purchasing card, or the issuance of a purchase order; C) conducting a Qualified Supplier Roster Competition to solicit bids from suppliers on an existing Qualified Supplier Roster; d) conducting an Invitational Competition by soliciting bids from a minimum of three suppliers; or e) conducting an Open Competition by publicly advertising and posting the solicitation document. 14.2. All standard procurement processes must be approved, conducted and reported in accordance with this By-law and all applicable procedures and protocols. 14.3. The CPO may initiate requests for information for the purposes of gathering information about the marketplace in order to assist in the determination of future purchasing options or requirements. 14.4. The CPO may establish Standing Offers for Deliverables that the City requires on a regular 9 Page 53 of 61 By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener or recurring basis. Standing Offers may be established through an Open Competition. The establishment of a Standing Offer does not create a contractual commitment to procure Deliverables from the Supplier. 14.5. Open Competitions may include a two-stage process in which a pre -qualification process is conducted by soliciting and evaluating submissions from all interested Suppliers in order to establish a Qualified Supplier Roster of pre -qualified Suppliers that will be eligible to submit a Bid in response to a second -stage Solicitation Document for specified Deliverables during a specified term. A pre -qualification process may be used whenever determined appropriate by the CPO, in consultation with the Department requesting the procurement. Pre -qualified suppliers must be selected in accordance with the evaluation and selection process set out in the Solicitation Document. The establishment of a Qualified Supplier Roster does not create a contractual commitment to procure Deliverables from any Supplier on the Qualified Supplier Roster. 15. NON-STANDARD PROCUREMENT 15.1. A non-standard procurement is the acquisition of goods, services or construction through a process or method other than the process and method normally required for the type and value of the required Deliverables, as identified and described under Schedule "B" of this By-law. Non-standard procurement processes include: a) a Non -Competitive Process, where the Deliverables are acquired directly from a particular supplier without conducting a competitive process when an Invitational Competition or an Open Competition would normally be required; or b) a Limited Competition, where bids are solicited from a limited number of suppliers when an Open Competition would normally be required. 15.2. The use of a non-standard procurement process is only permitted under the specific circumstances set out in Schedule "C" of this By-law. 15.3. All non-standard procurement processes must be approved and conducted in accordance with this By-law and all applicable procedures and protocols. 16. EMERGENCY PURCHASES 16.1. Notwithstanding any other provisions of this By-law, Deliverables may be purchased on an emergency basis where they are required as a result of an unforeseeable situation or event occurring that is a threat to any of the following: a) public health and/or safety; b) the maintenance of essential City services or to prevent the disruption of essential City services; C) the welfare of persons or of public property; or d) the security of the City's interests; and e) time does not permit the use of a standard procurement process due to an event that creates an unforeseen urgency that could not reasonably have been addressed through appropriate advanced planning. 16.2. Where an emergency purchase is required as described above, the CPO has the authority to issue a Purchase Order for the requirements. Any authorized emergency expenditure should be time and cost limited to be proportionate to the emergency and should include clear protocols to terminate the arrangement once that emergency is resolved. 16.3. Subject to the application of the provisions of By-law 2017-138 as amended, updated or replaced from time to time and the City's Emergency Plan, where there is a major Emergency and the City's Emergency Plan is implemented, the CPO or Department Head has the Approval Authority to authorize any required purchases. 16.4. When the Procurement Value of the Emergency purchase exceeds $120,000, the CPO shall provide a report to Council in accordance with Section 27. 17. BIDDER DEBRIEFINGS 17.1. Where the City has conducted a competitive procurement process, unsuccessful bidders may request a debriefing. Debriefings must be conducted in accordance with the City's Debriefing Protocol. This protocol is available to suppliers and staff on the City's Intranet and external website 18. PROCUREMENT PROTESTS 18.1. Suppliers may formally protest the outcome of a procurement process. Formal protests must be made by suppliers and responded to by the City in accordance with the City's Procurement Protest Protocol. This protocol is available to suppliers and staff on the City's 10 Page 54 of 61 By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener Intranet and external website. 19. CONTRACT MANAGEMENT AND SUPPLIER PERFORMANCE 19.1. All contracts must be managed by the respective Department Employees in accordance with this By-law and all applicable procedures and protocols to ensure that both the City and the supplier fulfil the requirements of the contract. Department Employees must involve the Procurement Section and Legal Services in the management of contract disputes, as required by applicable procedures and protocols. 19.2. The respective Department Employee is responsible for monitoring and documenting supplier performance and compliance with procurement contracts in accordance with the City's Supplier Performance Evaluation Protocol. This protocol is available to suppliers and staff on the City's Intranet and external website. 20. SUPPLIER DISQUALIFICATION 20.1. The City may disqualify suppliers from participating in future procurement opportunities in accordance with the City's Supplier Suspension Protocol. This protocol is available to suppliers and staff on the City's Intranet and external website. 20.2 The CPO shall apprise Council, CFO and City Solicitor where any Supplier has been suspended under the City's Supplier Suspension Protocol. 21. RECORDS RETENTION AND ACCESS TO INFORMATION 21.1. All procurement activities must be supported by appropriate documentation and all records relating to a procurement process must be retained in accordance with the City's Contract Management Protocol and the City's Records Retention By-law and any associated records management policies and procedures. 21.2. Disclosure of information related to the City's procurement processes must be made in accordance with applicable procurement procedures and protocols and the City's policies with respect to disclosure and protection of information in accordance with the Municipal Freedom of Information and Protection of Privacy Act (MFIPPA) and the Personal Health Information Protection Act (PHIPA), as amended. 22. UNSOLICITED PROPOSALS 22.1. All unsolicited proposals, including any offers for presentations or product/service trials submitted to the City with the expectation on the part of the submitter of obtaining consideration for an ensuing contract or purchase by the City, must be directed to the CPO for review and approval for acceptance in accordance with this By-law. 22.2. Any procurement resulting from the receipt of an unsolicited bid must comply with the provisions of this Procurement By-law. 22.3. In the absence of a competitive process, a contract may only be awarded in respect of an unsolicited proposal if a Non -Standard Procurement is permitted in accordance with this By-law and all applicable procedures and protocols. 23. CO-OPERATIVE PURCHASING 23.1. The City may participate in co-operative purchasing initiatives with other government or broader public sector entities where it is in the best interests of the City to do so. 23.2. The co-operative purchasing process may be conducted in accordance with the procurement policies and procedures of the entity that is responsible for co-ordinating and leading the process, provided that those policies and procedures are consistent with the City's obligations under applicable trade agreements and the City's procurement goals and objectives set out in this By-law. 24. ACCESSIBILTY FOR ONTARIANS WITH DISABILITIES 24.1. The City will promote, and incorporate, whenever possible, the requirements of the Ontarians with Disabilities Act, 2001 (ODA), the Accessibility for Ontarians with Disabilities Act, 2005 (AODA), and specifically, Ontario Regulation 429-07 and Ontario Regulation 191- 11 made under the Accessibility for Ontarians with Disabilities Act, 2005 in procurement activities of the City. 25. GREEN PROCUREMENT 25.1. The City is committed to the purchase of goods and services with due regard to the preservation of the natural environment and to encourage the use of environmentally friendly products and services. 11 Page 55 of 61 By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener 25.2. All departments, in conjunction with the Procurement Section, are encouraged to seek additional ways of achieving the goal of being environmentally safe and responsible by ensuring that, wherever possible and economically feasible, the City's solicitation document includes specifications that reflect environmentally friendly attributes of the goods and services, as further described in the City's Document Drafting Protocol. 26.1. The Department Head must submit to the CPO, a written report of all Surplus Assets, including but not limited to, furniture, vehicles, equipment, supplies, and other goods and material, which are deemed by the Department Head to be surplus or which have become obsolete, worn out, or otherwise incapable of use. Real Property may not be deemed to be a Surplus Asset. 26.2. The CPO is authorized to sell, exchange, or otherwise dispose of Surplus Assets. 26.3. The CPO may first offer the Surplus Assets to other Departments. Any Surplus Assets not required by Departments and that are deemed by the CPO as having a residual value may be disposed of by any of the following methods: a) by auction or solicitation; b) by trade-in; C) by donation to a non-profit agency; d) by recycling; or e) in the event that all efforts to dispose of the goods by sale are unsuccessful, by scrapping or destroying if recycling is unavailable. 26.4. No City employees, officers or elected officials, or any member of a City Board will personally obtain any Surplus Assets unless they are obtained through a public process. 26.5. The disposal of Surplus Assets is exempt from the requirements of this By-law. 27. REPORTS TO COUNCIL 27.1. The CPO must submit quarterly procurement information reports to Council to provide the following information about the City's procurement activities: a) The circumstances and details of approved procurements exceeding $120,000 in value, under delegated authority of the CPO; and b) the circumstances and details of any emergency purchase(s) with a procurement value exceeding $120,000. 28. BY-LAW REVIEW 28.1. This Procurement By-law will be reviewed every five (5) years, or such earlier date as the CPO or Council may deem it appropriate to evaluate its effectiveness. 29. SHORT TITLE 29.1. The short title of this By-law is the "Procurement By-law". 30. SCHEDULES 30.1. Schedule "A" to this Bylaw — Exempt Procurements forms an integral part of this By-law and is attached hereto. 30.2. Schedule "B" to this Bylaw — Delegated Procurement Authorities forms an integral part of this By-law and is attached hereto. 30.3. Schedule "C" to this Bylaw — Non -Standard Procurements forms an integral part of this By-law and is attached hereto. 30.4. Schedule "D" to this Bylaw — Statement of Ethics for Public Purchasers forms an integral part of this By-law and is attached hereto. 31. REPEAL 32.1 THAT By-law 2017-106 and the contents of Chapter 170 of The City of Kitchener Municipal Code be repealed. 32.2 THAT notwithstanding its repeal, any procurements begun but not yet completed by the effective date of this Chapter shall be completed in accordance with the terms of the previous 12 Page 56 of 61 By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener Chapter 170 of The City of Kitchener Municipal Code as if it were still in effect. 32. ENACTMENT 33.1 THAT this By-law shall come into force and effect immediately upon the final passing thereof. READ a first and second time this 20th day of June, 2022. READ a third time and finally passed this 20th day of June, 2022. THE CORPORATION OF THE CITY OF KITCHENER "ORIGINAL SIGNED" MAYOR — "ORIGINAL SIGNED" CITY CLERK - 13 Page 57 of 61 By-law 2022 -XXX Procurement By-law The Corporation of the City of Kitchener SCHEDULE "A" EXEMPT PROCUREMENTS This By-law does not apply to the acquisition of the following goods or services: 1. Goods or services the supply of which is controlled by a statutory monopoly. 2. Work to be performed on property under the provisions of a lease, warranty or guarantee held in respect of the property or the original work; 3. Goods purchased on a commodity market; 4. Procurement between the City and another public body; 5. Acquisitions related to local boards and affiliates; 6. Any form of assistance that the City provides, including co-operative agreements, grants, donations, and loans; 7. Fund raising, naming rights and sponsorship of any kind; 8. Procurement by the City on behalf of a third party, which will be reimbursed in full, or paid for in full by the third party, where the procurement would not be covered by this chapter if it were conducted by the other person itself, unless the City determines that it is in the best interest of the City to procure the goods, services or construction in accordance with the Standard or Non -Standard Procurement processes of this By-law; 9. Development Charge Payments and Developer Credit refund agreements for land development and for park development and reimbursement; 10. Contracts relating to hiring of employees or employee compensation; 11. The following goods and services related to training and education: • Conferences, conventions, courses and seminars • Newspapers, magazines, books and periodicals • Computer software for educational purposes 12. Goods and services related to cultural or artistic fields, such as: • Events supporting local non-profit organizations • Entertainers for theatre or special events • Original works of art 13. The following special services: • Temporary staffing agencies and services • Recreation program facilitators and/or hosts • Honorariums • Arbitrators • Utility relocates by Public Utility • Realty and Lease Arrangements 14. Goods and/or services specifically excluded by Council This By-law does not apply to payment of the City's general expenses, such as: • Refundable employee expenses (meal allowances, travel, miscellaneous) • Memberships/Professional Dues • Payroll deduction remittances • Workplace Safety Insurance Board payments • Health benefit payments • Tax remittances • Debt payments • Insurance premiums and Damage claims • Legal Counsel Fee's and Legal settlements • Arbitration awards • Charges to and from other government bodies • Refund payments (such as property tax refunds, building permit refunds and refunds for cancelled services, programs or events) • Licence fees (regular licence fees for vehicles, elevators, communications, software, etc. required to maintain existing products and systems originally obtained in accordance with the Procurement Bylaw) • Utility bill payments (such as water and sewer, hydro, natural gas, telecommunications and cable television) 14 Page 58 of 61 Z Z Z O O O m m m W N � .0= D 0 O. fD fD Oa0 � O Q d O. 3 fD 'm 0 0 L CC c 0 C M fD 3 m V O -0 CL d n ad m o a a CL m o d n»nR 0 0 �'o. n c y f 30 d y d 0 n 0 d 0_. m 0 9 0 °' 'o m n am c d O. ,0.. fD v d 'o n n n fD 0 0. d fD n V n d fD � F a X 9 O 56 fD n 0 O_ N c 3 � O. O n $ C D m n w VI u T O O Q C c 3 (D � N ems•' d 3 CL � -CL n O m c O m N � 3 CL v 0 n N a �. G) 2. G) cn m C N 0 0 G) w CD G) o p o O C O -O N O O O 11) 0n 0 :EN f� 3 N N N O N -" N O Cc n c N v( N d o (D y' cn (n (n f0 - p cn (D CL (n o O CL - o O CD (D CD N CD C (D �' CD n 3 CD G n CD < CD fop d - < � d G n cr. - !n C fp N . (D y . O n n CD n CD n CD M �D' CD n d CD CD Z S O 0 a.�•' 0 0 O fp 0 (n n N O N j.= 25. d CD c 0_ p c� n p O > n > n > n (nO n (0 n y o CD QN CL 0 0 O 0 0 o n n,cn., O c c c �d s o' s o' c r 0c 0C 0 �0 c m C L o c c c c > > > > fD 0 0 ry_ d O� ry_CL O� O. _�: d m O s 3 CD CD CD W O 0) W O n O d C N0 l< N0 O 3 O- 3 O- 0 O 0N O 0 0CDoN O_ - O. CDO NO - <Ac 0 (D 0 C CD d C <= =0 (D d C <' (D co O c (D o o en ui fD m (D m o cn O O O 0 O O (D ' (D ' .3. CD o D O O O o 0 0 0 E Z EZ O O > > > Z �' O �' o _0 _0 < < < v 0 _. 0 [7 _. 0 [7 CD > CD > 5; 9 5;n > O O � � 0- O 0-o O 0 0' o' o' �' o D c m m m 0 0 E3 Eo p m N(D m m o 0 0 0_; � C � � o o CD O CD CD CD 0' o' o' 0 n (� 0 cn cn -0 cn cn cn o o 0 0 3 0 �' 0 �' 0 0 0 �' 0 -' 0 -' 0_� D 0 CL m 0 3 (D d 0 d 3 O O .d.. 3 O .d.. O .d.. O CD CD C. CL n n n n 3 S 3 Z O- d l0_ n d O O ,0.' o O O p_ (D d l O c CD O. C CD n c n c (n n (D c n c n c CD CD (D Q ❑. m- fT O. m CD CD CD p' CD CD CD c l0 c v CD m fo fn C _0 O cO _0 - - CD (D CD O O "0 d "4 d `nG `OG O O O o O O C d C O O d d N _0 CD 0 3 D _0 _0 CL n O C n c n 0�_, 0 �_. CD CD 0 !n m 0 0 0 0 (D (D T T5 O S (O .C. n .C. n O O W W CD n n 0 c c c c O d d CD "O (D CD "O (D N � (D � "O "O "O "O C d CL o CL O ,�.. = =' (D CD (D (D CD 0 O' 0 0' ,�.. N N n 0 fn 3Cn In .o In d d CD _. Q _0 CD o � Q n O. n O. Fr CD "O n CD n CD o fn o fn O O 0 0 2' 0 0 2' n C C (D S S CL n CD (D o N r- 3 0 O O D 2 2 D o O 00 O O 0 O O O O 0 C) n n Q o n O O O O O O m (O' m (O' d D � m m o m ADD c (c c C N S 3 (D O O d 3 _ N (D a N O pB. y O O O O O O 0 C) O U Z p, O O O O O O O O o (D X m o 0 Z c o (D ry N N O W v m r m G) D 1 m v ,Zl 0 n C m 9 m Z 1 l< v By-law 2022 -XXX The Corporation of the City of Kitchener Procurement Bylaw SCHEDULE"C" NON-STANDARD PROCUREMENTS Goods, services and construction may only be acquired through a non-standard procurement process under the following circumstances: 1. Where a standard procurement process conducted in accordance with this By-law and applicable procedures and protocols has not resulted in the receipt of any bids. 2. Where only one supplier is able to meet the requirements of a procurement in order to: a) ensure compatibility with existing products; or b) recognize exclusive rights, such as exclusive licenses, copyright and patent rights; or C) maintain specialized products that must be maintained by the manufacturer or its representative. 3. Where there is an absence of competition for technical reasons and the goods or services can only be supplied by one particular supplier and no alternative or substitute exists. 4. The procurement is for additional deliverables by the original supplier of the goods or services that were not included in the initial procurement if a change of supplier for such additional goods or services: a) cannot be made for economic or technical reasons such as requirements of interchangeability or interoperability with existing equipment, software, services or installations procured under the initial procurement; and b) would cause significant inconvenience or substantial duplication of costs for the City. 5. For the procurement of services in the fields of financial services, health services, social services, legal services; and for the services of expert witnesses or factual witnesses used in court or legal proceedings; 6. For the procurement of goods or services relating to matters of a confidential or privileged nature where the disclosure of those matters through an open competition could reasonably be expected to compromise government confidentiality and/or security, cause economic disruption or otherwise be contrary to the public interest; 7. For the procurement of goods or services or construction from a public body or a non-profit organization. 8. For the procurement of goods under exceptionally advantageous circumstances such as bankruptcy or receivership, but not for routine purchases. 9. Unforeseeable events have resulted in a situation where extreme urgency exists and the goods or services could not be obtained in time through Standard Procurement. 10. For the procurement of a prototype of a first good or service to be developed in the course of and for a particular contract for research, experiment, study or original development, but not for any subsequent purchases. 11. For the procurement of goods, services and construction that is financed primarily from donations that are subject to conditions that are inconsistent with a standard procurement process conducted in accordance with this By-law and applicable procedures and protocols. 12. For the procurement of goods or services under the provisions of a warranty or guarantee held in respect of the original work; 13. A contract to be awarded to the winner of a design contest and the contest was organized in a fair and transparent manner and was advertised by publicly posted notice and participants were judged by an independent jury; 14. The procurement of a particular brand of goods or services that are intended solely for resale to the public and no other brand meets the City's program objectives nor is the brand available from any other source; 15. Another organization is funding the procurement and the City has determined that the supplier and the terms and conditions of the proposed contract are beneficial to the City; 16. The procurement is otherwise exempt from Open Competition requirements under all applicable trade agreements and it is in the best interests of the City to proceed with a non-standard procurement. 16 Page 60 of 61 By-law 2022 -XXX Procurement Bylaw The Corporation of the City of Kitchener SCHEDULE "D" STATEMENT OF ETHICS FOR PROCUREMENT Goal: To ensure ethical, professional and accountable procurement. All employees authorized to purchase Goods, Services and/or Construction on behalf of the City must adhere to the following principles. a) Open and Honest Dealings with Everyone who is Involved in the Purchasing Process. Procurement activities must be open and accountable. This includes all businesses with which this City contracts or from which it purchases Goods, Services and/or Construction, as well as all members of our staff and of the public who utilize the services of the Procurement Section. b) Fair and Impartial Award Recommendations for All Contracts and Tenders. Contracting and purchasing activities must be fair, transparent and conducted with a view to obtaining the best value for public money. This means that City Staff do not extend preferential treatment to any vendor, including local companies. Not only is it against the law, it is not good business practice, since it limits fair and open competition for all vendors and is therefore a detriment to obtaining the best possible value for each tax dollar. C) An Irreproachable Standard of Personal Integrity on the Part of All Those Designated as Purchasing Representatives for This City. Individuals involved with procurement activities must act, and be seen to act, with integrity and professionalism. Honesty, care and due diligence must be integral to all procurement activities within and between the organization, suppliers and other stakeholders. Respect must be demonstrated for each other and for the environment. Confidential information must be safeguarded. Participants must not engage in any activity that may create, or appear to create, a conflict of interest, such as accepting gifts or favours, providing preferential treatment, or publicly endorsing suppliers or products. d) Cooperation with Other Public Agencies in Order to Obtain the Best Possible Value for Every Tax Dollar. This City is a member of a cooperative purchasing group made up of several public agencies, this group pools its expertise and resources in order to practice good value analysis and to purchase Goods, Services and/or Construction in volume and save tax dollars. 1s Page 61 of 61