HomeMy WebLinkAboutFCS Agenda - 2023-06-051
KiTc�ivER
Finance and Corporate Services Committee
Agenda
Monday, June 5, 2023, 2:30 p.m. - 5:00 p.m.
Council Chambers - Hybrid
City of Kitchener
200 King Street W, Kitchener, ON N2G 4G7
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. Please refer to the
delegation section on the agenda below for registration in-person and electronic participation
deadlines. Written comments received will be circulated prior to the meeting and will form part of the
public record.
The meeting live -stream and archived videos are available at www.kitchener.ca/watchnow.
*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 S. Davey
Vice -Chair: Councillor B. loannidis
Pages
1. Commencement
2. Disclosure of Pecuniary Interest and the General Nature Thereof
Members of Council and members of the City's local boards/committees are
required to file a written statement when they have a conflict of interest. If a
conflict is declared, please visit www. kitchener. ca/conflict to submit your written
form.
3. 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.
3.1 The Auditorium - Delegated Authority for Talent, Suite, and Marketing 3
Agreements, CSD -2023-233
4. 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 12:30 p.m. on June 5, 2023, in order to participate electronically.
4.1 None at this time.
5. Discussion Items
5.1 44 Gaukel Creative Workspace Pilot Report, 45 m 7
DSD -2023-143
(Staff will provide a 5 -minute presentation on this matter.)
5.2 Community Benefits Charge (CBC) Direction, 45 m 25
FIN -2023-255
(Staff will provide a 5 -minute presentation on this matter.)
5.3 Natural Gas Purchase Policy Review - 2023, 15 m 28
INS -2023-247
5.4 Appointment of Licensing Appeal Tribunal 10M 40
Members, COR -2023-246
5.5 Manchester Road Traffic Calming Review, 15 m 42
DSD -2023-209
6. Information Items
6.1 None
7. Adjournment
Marilyn Mills
Committee Administrator
Page 2 of 46
Staff Report
Community Services Department www.kitchener.ca
REPORT TO: Community and Infrastructure Services Committee
DATE OF MEETING: June 5, 2023
SUBMITTED BY: Bob Cheyne, Director, 519-741-2200 ext. 7689
PREPARED BY: Jeremy Dueck, Manager, 519-741-2200 ext. 5264
WARD(S) INVOLVED: ALL
DATE OF REPORT: April 15, 2023
REPORT NO.: CSD -2023-233
SUBJECT: Execution of Talent, Suite, and Sponsorship Agreements at The Aud
RECOMMENDATION:
That the Manager of The Aud be authorized to execute talent offer sheets and talent
purchase agreements, suite lease and rental agreements, as well as sponsorship
agreements at The Aud in accordance with the approval parameters set out in CSD -2023-
233; said agreements to be to the satisfaction of the City Solicitor; and further
That the Director of Sport be authorized to execute sponsorship agreements, pertaining
to The Aud, in accordance with the approval parameters set out in CSD -2023-233; said
agreements to be to the satisfaction of the City Solicitor.
REPORT HIGHLIGHTS:
• The purpose of this report is to provide delegated authority to staff to execute key business
agreements between The Aud and a variety of external stakeholders.
• Assigning the Manager of The Aud (or a designate) with authority to sign these key business
agreements would: improve The Aud's ability to secure more live entertainment, improve
business operations and revenue generating opportunities, provide transparency and
accountability, and align with standard operating procedures and industry best practices.
BACKGROUND:
In 2023, staff reviewed business practices at The Aud to identify opportunities to increase
revenue generation (including attracting more live entertainment to the facility), improve
business operations, and improve the customer experience for external stakeholders — all of
which would benefit the municipality and the community as a whole.
*** 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 46
REPORT:
Based on those reviews, staff have identified three areas where delegating authority to staff to
sign business agreements would achieve the objectives stated above:
1. Suite Lease and Suite Rental Agreements
2. Talent Purchase Agreements
3. Sponsorship Agreements (related to The Aud)
1. Suite Lease and Suite Rental Agreements
City staff are responsible for selling and overseeing the administration of 26 luxury suites at
The Aud. The Aud leases most suites for single or multi-year agreements and rents the
remaining suites on a per -event basis. Staff's goal is to maximize suite revenue while fulfilling
the expectations outlined in the suite agreements.
The current suite lease and rental agreements are not efficient because the Manager of The
Aud does not have the delegated authority to execute nor make even minor changes to the
terms and conditions (e.g., setting the amount of time a client must vacate the suite after a
special event, establishing the minimum number of tickets that must be purchased, etc.).
Providing staff with delegated authority to execute suite lease/rental agreements will allow
for expedited changes to be made to those agreements which will decrease service time and
improve customer satisfaction — increasing the chances of repeat customers. All agreements
would continue to be subject to review by Legal, as appropriate.
2. Talent Purchase Agreements
From time to time, The Aud has opportunities to purchase live entertainment/shows directly
from an agency on its own or in cooperation with a third -party promoter. The process for
purchasing a show usually consists of two steps:
i. submitting a "talent offer sheet" to the agent and then
ii. signing a talent purchase agreement after the agent accepts the talent offer (the terms
of the talent purchase agreement align with the talent offer sheet).
Talent agencies consider the talent offer sheet to be a binding proposal. The talent offer
sheet outlines the basic financial deal points. The talent purchase agreement adds additional
terms and conditions, such as the technical/production rider.
Currently, staff do not have a clearly defined process for responding to these opportunities,
nor do they have the delegated authority to sign the talent offer sheet and/or talent purchase
agreements — both of which are legally binding agreements. As a result, staff are unable to
act quickly to purchase these show opportunities when they arise. This inability to move
quickly to sign these talent offers and agreements has meant that in the past The Aud has
missed out on some show opportunities.
Page 4 of 46
The delegated authority recommended would be exercised upon the approval set out below:
The Manager of The Aud would only execute the talent offer sheet and subsequently execute
the talent purchase agreement upon receipt of approval from one of the following persons
based on the risk value of the show (i.e. The artist guarantee):
ARTIST GUARANTEE
APPROVAL
Less than $150K CDN
Director of Sport
Greater than $150K CDN
DCAO or CAO
The Aud Manager and Auditorium staff will complete a pro forma to assess the breakeven
point for ticket sales and ancillary revenue generation opportunities with each talent
purchase. Using the artist guarantee as the risk value is a worst-case scenario — if zero tickets
are sold.
When The Aud decides to solely purchase talent or purchase talent as part of a co -promotion
with a third -party promoter, staff will use the artist's performance history as a measure of
future success (i.e., targeting breakeven or better). The Manager would confirm the findings
of that research with the Director of Sport or DCAO/CAO when seeking their approvals.
3. Sponsorship Agreements
In 2016, Council approved the City's Municipal Sponsorship Policy (GOV-COR-2000) which
grants the CAO or DCAO the delegated authority to enter into agreements for amounts up to
$125,000 for the term of the agreement, subject to the satisfaction of the City Solicitor. City
Council approval is required for any agreement that is in excess of $125,000 for the term of
the agreement; in excess of 10 years in duration; includes the naming rights for an entire
complex; or does not satisfy the provisions of the Municipal Sponsorship Policy.
The operational challenge with the current delegation of authority is that the CAO and DCAO
are being tasked with signing off on sponsorship agreements worth lesser amounts (e.g.,
Sponsorship agreements worth $5,000) which can add additional time to the process of
securing a sponsorship agreement. This is happening because the Council -approved
sponsorship policy did not speak to agreements worth lower values.
The delegated authority recommended would be exercised upon the approval set out below:
APPROVAL AND EXECUTION
VALUE OF SPONSORSHIP AGREEMENT
PERTAINING TO The Aud
Manager of The Aud
Less than $50,000 for the term, less than 10
years in duration and not for naming rights
of an entire complex
Director of Sport
Less than $125,000 for the term, less than
10 years in duration and not for naming
rights of an entire complex
City Council city's Municipal Sponsorship Policy (Gov-
Greater than $125,000 for the term, longer
COR -2000)
than 10 years, and naming an entire
complex
Page 5 of 46
All Agreements to the satisfaction of the City
Solicitor
This is consistent with the City's overall sponsorship policy and approval authorities.
Updating this delegation of authority will allow for sponsorship agreements pertaining to The
Aud to be expedited, creating a better customer experience through efficient business
operations. All sponsorship agreements will continue to abide by the City's overall
Sponsorship Policy and will be subject to review by Legal, as appropriate.
STRATEGIC PLAN ALIGNMENT:
The recommendation outlined in this report supports the achievement of the City's strategic
vision through the delivery of core service.
FINANCIAL IMPLICATIONS:
Approving these delegated authority recommendations will allow The Aud to achieve greater
operational efficiency and provide a clearer path to purchase more shows — creating a business
environment to generate more revenue from ticket sales and ancillary revenues (e.g., Food &
beverage commission, paid parking, merchandise, sponsorships, etc.). Being an active
participant in the talent purchase community will also make Kitchener a more attractive market
for promoters and talent agents. If promoters and agents know that a venue is willing to take on
or share in the financial risk of a show, then they are more likely to come to Kitchener.
The financial risks of solely purchasing a show or buying cooperatively with a promoter include
event cancellation, low ticket sales, and negative publicity. The direct financial liability of
cancelling a show is outlined in the offer sheet and talent purchase agreement with the agent
(i.e., The "artist guarantee").
COMMUNITY ENGAGEMENT:
INFORM — This report has been posted to the City's website with the agenda in advance of the
council / committee meeting.
APPROVED BY: MICHAEL MAY, DEPUTY CHIEF ADMINISTRATIVE OFFICER
Page 6 of 46
Staff Report
Development Services Department www.kitchener.ca
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: June 5, 2023
SUBMITTED BY: Emily Robson, Manager, Arts and Creative Industries, 519-741-2200
ext. 7084
PREPARED BY: Eric Rumble, Coordinator, Arts and Creative Industries, 519-741-
2200 ext. 7424
WARD(S) INVOLVED: All
DATE OF REPORT: May 17, 2023
REPORT NO.: DSD -2023-143
SUBJECT: Creative Hub at 44 Gaukel Pilot Report
RECOMMENDATION:
That staff prepare an issue paper for the 2024 budget process requesting an annual
allocation for the ongoing operations of the Creative Hub; and,
That staff assess various options the long-term location of the Creative Hub, as
outlined in report DSD -23-143, and return to City Council with recommendations for
consideration as part of the 2025 budget process.
REPORT HIGHLIGHTS:
The purpose of this report is to explain the impact and transformation of 44 Gaukel
Creative Workspace/Creative Hub, and to articulate the ongoing demand for
affordable and supportive artists' space.
• The key finding of this report is that staff have established a model for supporting and
cultivating a co -working space that attracts artists, builds community, and supports
new cultural experiences.
• The financial implication is approximately $234,000 per year in operating funds, to be
referred to the 2024 budget process.
• Community engagement includes past consultations and current strategy
documents, as well as new arts sector consultations in 2023 and surveys of active
building users.
• This report supports A Vibrant Economy by advancing work on a Creative Hub.
EXECUTIVE SUMMARY:
During its 2019-2023 pilot period, 44 Gaukel Creative Workspace has become the dynamic
and active focal point for the local arts community that was imagined. More than fifty artists
and organizations currently rent or casually use the facility's spaces and resources to pursue
their entrepreneurial goals and share rich, diverse, arts -based experiences with the public.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
Page 7 of 46
Staff have provided flexible options to artists and cultural workers to establish, develop and
sustain their businesses and projects, created an innovative operating model for below-
market -rate studios and in-kind skills trade arrangements, and brought new vibrancy and
interest to downtown that will only grow beside a revamped Gaukel Block.
The efforts to realize this pilot project and consider its futures aligns with goals in both the
Make It Kitchener 2.0 strategy and the 2019-2022 corporate strategic plan. Early findings
from consultation for the forthcoming Arts & Culture Plan indicate that affordable workspace
is still a persistent and broad concern.
BACKGROUND:
In May 2018, Council allocated $775,000 to establish a creative hub at 44 Gaukel. The
initiative responded to many years of consultation indicating a need for affordable artists'
workspaces and fresh public input to choose a suitable location to attempt a solution. Staff
were driven by the idea that "the full potential of our city is unlocked when the connections
between assets — buildings, people, resources — are strong and resilient" (DSD -18-019).
The Creative Hub's purpose is to provide affordable space for connection and production.
In doing so, an underused City -owned building, was transformed into a conduit of the local
arts scene. The result is the 44 Gaukel Creative Workspace.
Project Timeline
• July 2016: Accelerator Centre leased 44 Gaukel's second floor to support start-ups.
Arts tenancies were added, with ArtsBuild Ontario as an on-site partner.
• 2018: Half of the sale proceeds ($775,000) from the Legion building on Ontario St.
were allotted to establish a creative hub project on the first floor from 2019-2023.
• 2019: A small renovation of the first floor created twelve additional tenant spaces.
• 2020: COVID-19 pandemic was declared. A full -building model was developed to
replace Accelerator Centre's lease, with ArtsBuild Ontario as lead operating partner.
• 2021: Operations continued to adapt and limited programming resumed under Public
Health restrictions.
• 2022: The facility reached 100% occupancy and a waiting list was started. Rent
revenue, mostly investments by local artist tenants, exceeded $100,000.
COVID-19 Impact
After minor renovations were completed, 44 Gaukel Creative Workspace was launched with
an open house in February 2020. A significant community turnout led to early momentum
and potential tenancies. Due to the pandemic, the facility closed to the public, rentals
stopped and tenant demand disappeared. Creative entrepreneurs of in-person experiences
or interactions were especially impacted as their incomes evaporated. Staff retained anchor
tenancies by offering rent relief to offset some pandemic losses and assisted all tenants in
adapting to public health measures.
Following a gradual recovery, anticipated tenant occupancy, usage and activity resumed.
Rent revenues have grown steadily from $60,000 collected in 2020, to nearly $70,000 in
2021, to more than $100,000 in 2022. Achieving 100% occupancy (and a waiting list)
following an uncertain adjustment period demonstrates the demand and need for this type
of space.
Page 8 of 46
Operating Partners
ArtsBuild Ontario became the City's lead on-site operator and collaborator in December
2020. Their primary role is to attract new occupants, support tenants with onsite needs,
guide tenant culture, respond to inquiries and help to cultivate the space's goals and brand.
ArtsBuild is a not-for-profit service organization to thousands of arts and heritage groups
and is dedicated to supporting cultural infrastructure projects. Coordinating tenants and
activities at 44 Gaukel Creative Workspace enables ArtsBuild to practice the skills and
training it offers, drawing interest from Canada Cultural Spaces Fund and Canada Council
for the Arts. ArtsBuild also manages two resources for short-term rentals, including a
rehearsal space.
The Facility
44 Gaukel was initially home to Canada Post. After they vacated the building, the second
floor was converted to a private college. The City of Kitchener acquired 44 Gaukel in 2006,
as part of the Joseph and Gaukel Street Reconstruction Project. For the Creative Hub, the
building was adapted to support the current multi -tenanted layout with modest interior
renovations to the main floor. The building has reached a stage in its lifecycle where future
improvements will be required.
Tenants hold licence agreements with the City for 24-7 use of semi -private spaces. The
thirty-four tenant spaces vary from 91 to 735 square feet, with monthly rents ranging from
$200 to $1100. Staff implemented a flexible rate schedule based on class -B commercial
market rates downtown, with lower rents to account for non -profits, interior units with no
windows, etc. Licence agreements with four-month minimum terms were designed to be
easy for tenants to test facility suitability for their needs.
REPORT:
This section highlights pertinent findings from the 2019-2023 creative hub pilot period.
Building Creative Capacity
In early 2023, Good Company Productions delivered a series of nine live music shows at
THEMUSEUM, drawing thousands downtown on chilly Thursday weeknights. Good Co's
director Amit Mehta was able to produce these high-quality packed -house events because
of the significant time and resources he has invested in developing local music.
In addition to producing curated experiences, performance broadcasts and other artist -
boosting ideas, Good Co has grown its 44 Gaukel footprint since 2020 to build capacity and
interaction for local musicians, bands and visual artists. During the pandemic, Mr. Mehta
created successful concert -in -a -box events out of the facility's flex space. He has supported
intimate concerts to animate Gaukel Block, Vogelsang Green and other spaces. He also
supported JJ Wilde on her way to winning a Juno for Ruthless in 2021 and he continues to
cultivate new performers with jam space, mentorship and gigs.
Arts entrepreneurs like Mr. Mehta are the kind of creative practitioners the City needs to
retain to support an active and compelling cultural scene. 44 Gaukel has provided Good Co.
with a space to experiment and grow into this role in Kitchener's music ecosystem.
Page 9 of 46
Space to Grow and Connect
44 Gaukel Creative Workspace serves both emerging and established arts workers, with
current tenants ranging in age from 20 to 70. Tenants work in a variety of disciplines,
including music production and instruction, visual arts and language education, theatrical
and dance presentation, arts -based therapy, and a range of individual practices including
painting, sculpture, printmaking, design, filmmaking, and photography.
Tenant successes have come in many shapes and sizes. In 2023, Just Ideas' first Juno
nomination for best rap single was produced inside their 44 Gaukel Creative Workspace
recording studio with musician Dom Vallie. Alanah Jewell and Luke Swinson co -created a
mural at 44 Gaukel in 2020, became tenants for a few successful print sales, then quickly
outgrew the space. They have since been hired by huge global brands such as Roots and
the Toronto Maple Leafs.
The pilot period has involved many tenants, but their interests in locating at 44 Gaukel
Creative Workspace have been similar - easy access to other creators. In a survey
conducted in spring 2023, tenants articulated their appreciation for the creative community
at 44 Gaukel Creative Workspace:
• "I really loved the creative vibe of the building, and the affordability was really
important as I was just starting my business."
• "I was very attracted to being in a building with other artists and arts sector workers.
Having moved to Waterloo Region from Toronto, it was the closest I could find to the
Artscape model."
• "I've spent a lot of time working alone. This space has been wonderful to watch it
grow and attract other creatives in the city."
• "There is a desire to create relationships, collaborations and community, which is
central to my work as well."
Local artists' influence on such a centralized location also creates benefits for non -artists.
The community and rehearsal spaces inside 44 Gaukel host dozens of organizations and
hundreds of participants for art workshops, jam sessions, dance practices, rehearsals, and
other meetups. Art$Pay runs a Gaukel-facing window gallery of rotating artworks and
organizes group exhibitions that welcome the public inside. Emmy- and Juno -award-winning
tenant Vincent Marcone's 60' -long exterior mural has become a fabulous backdrop to an
ongoing flow of events, markets, and other activities on the pedestrianized Gaukel Block.
Unlocking In -Kind Value
As part of the Creative Hub pilot, staff developed an in-kind exchange program. Selected
tenants can provide skills trades for reduced rents, enabling tenant contributions of
photography, design, video and music productions, art exhibits, facility features, broadcasts,
and community events. These contributions help make the Creative Hub visible, empower
tenants to act as project ambassadors, and provide experiences for residents and visitors.
The value of each skills trade is negotiated with tenants whose rental terms and creative
disciplines aligned with short-term project goals. Staff have pursued in-kind skills trades with
11 individual tenants since late 2019, with rents discounted against their diverse services.
These services have delivered approximately $100,000 in value to the City and broader
community. The results include live and recorded music performances produced by Good
Page 10 of 46
Co. Productions, Midtown Radio segments featuring tenants, public art restoration work,
murals and installations in the facility and co -creation of a signature program "The Beasting".
Skills trades opportunities could be established to meet future project goals in the areas of
communications, equitable access, professional development, and programming.
Affordability Equals Impact
Longstanding tenant Artshine, which supports youth development through arts instruction,
was the City's first skills trade partner at 44 Gaukel Creative Workspace starting in 2019.
Their arrangement ensures that youth workshops are available at various community
centres each year. In 2023, free monthly art workshops have been offered at Kingsdale,
Chandler Mowat, Victoria Hills, and Centreville -Chicopee. The value of Artshine's instructor
wages, materials, and administrative expenses in delivering these programs are exchanged
for a reduced annual rental rate.
Artshine's ability to build and grow an operating model from a stable, affordable homebase
in Kitchener has also led to incredible results beyond the region. Since 2015, Artshine has
delivered more than $1 -million worth of free or subsidized workshops in schools, community
centres, social service agencies, shelters, seniors' homes, prisons and at many 2SLGTBQ+
events. Artshine's mandate to share the healing, self-sustaining power of arts participation
happens in both French and English, in nearly 20 cities across Ontario, and online
internationally.
While Artshine's example is exceptional, many small businesses in the arts sector are made
more resilient with access to affordable workspaces. Tenant surveys indicate that lower rent
allows artist entrepreneurs and small organizations to invest more time in doing their work
(which is often unpaid), attracting, and retaining volunteers, offering services to low-income
citizens, managing mental wellness, and keeping ticket prices affordable. "I do not sell
enough art to make a living wage," explained one survey respondent. "This allows me to
have a studio."
These insights fit with analysis of labour trends by the Cultural Human Resources Council.
The rate of self-employed creative and artistic producers is more than three times greater
than the average Canadian, including more than 50 percent of workers in sound recording,
more than 41 percent working in live performance and more than 31 percent of visual artists.
Wages are more than 10 percent lower than other workers. Many in the sector describe a
pervasive "poverty mentality," in which gig economy realities are exacerbated by a culture
of unpaid training, practice, and preparation time. Insufficient or unstable earnings, low job
security and lack of benefits, and the need to work over full-time hours, hold multiple jobs
and juggle multiple projects are core challenges faced by arts workers and organizations.
Affordability and creative community are essential to support creative production.
Demand for Creative Space
The primary goal of the pilot was to animate an underused City facility and explore it as an
affordable workspace for arts professionals. In the fall of 2022, 44 Gaukel Creative
Workspace reached 100 per cent occupancy, and currently has a waitlist of about 20
individuals and organizations. Based on this, demand for artists' spaces continues to
outpace availability, the current building is too small to match demand, and the project is
offering a meaningful response to a persistent issue raised by arts workers for years.
Page 11 of 46
Early findings from community consultations for the development of an Arts & Culture Plan
(to be provided in an upcoming staff report) highlight that arts sector workers continue to
identify cultural production space as a priority resource. Artists across all groups and
disciplines repeatedly invoked the idea of a physical hub where they could gather, work, and
collaborate, with access to tools, spaces, grants, and events. Kingston's Tett Centre for
Creativity and Learning was referenced as a desirable example from a city of comparable
size. Beyond the utility of a one -stop -shop for sectoral supports, consultation respondents
identified an opportunity to represent the transformative power of arts and culture in the form
of a bigger, bolder facility project, comparable to a tech accelerator/incubator space.
Similarly, as part of the Harvard -Bloomberg City Leadership Initiative forum, nearly forty
local arts and culture stakeholders identified core challenges to the community's creative
and cultural sectors. Many participants cited the need for additional affordable workspace.
As immersive and interactive technologies rise, the creative economy is one of the planet's
fastest-growing sectors. The Conference Board of Canada predicts the industry will grow 16
percent to $123.1 billion from 2017 to 2026, with employment increasing by eight percent.
They also predict a looming shortfall of more than 20,000 cultural occupations, particularly
graphic designers, illustrators, web designers and developers. Scaled to the region, which
could mean five hundred new local jobs to fill by 2026. Affordable and accessible cultural
production space and active creative networks are essential to realizing this potential.
Expanding the Creative Hub Concept
Professional development opportunities in the future phases of the creative hub could
include mentorship matchmaking, technical skills workshops, and cooperative initiatives. An
arts business accelerator program could be developed, turning a portion of the hub into a
launchpad for more local arts service operations. Subsidized tenancies could be created to
bring additional focus to equity initiatives. Temporary project residencies could be designed
to animate shared areas of the facility, Gaukel Block, or other spots in the city. Increased
space could also aim to fill the local gaps in rehearsal and performance space.
44 Gaukel was originally selected as it was a vacant City -owned facility which could be
easily adapted to serve this intended purpose. While it has served this purpose well, initial
findings from a building condition and accessibility audit recently conducted by Facilities
Management indicate that substantial and urgent improvements are required to support
continued use. Likewise, due to the age of the HVAC system, utility costs represent a sizable
portion of the operating costs. Considering the need for investments in the building,
Economic Development and Facilities Management staff will work together to bring
recommendations regarding the future of the building to Council for discussion. Staff will
assess potential costs of remaining in 44 Gaukel against other locations. These include, for
example:
• Appropriate locations to establish a long-term lease with a private landowner;
• A flexible tenancy model for workspaces at a variety of other City -owned facilities;
and,
• Opportunities for establishing a new, purpose-built facility as part of a future
redevelopment project.
Page 12 of 46
Conclusion
Gaukel Creative Workspace has successfully transformed into the vibrant and central hub
envisioned at the outset of the project. With more than 50 artists and organizations currently
using 44 Gaukel's spaces and resources, the Creative Hub has become a thriving
environment for pursuing entrepreneurial endeavors and showcasing a wide range of arts -
based experiences to the public. As a result, staff recommend consideration of ongoing
funding within the City's Operating Budget as part of the 2024 budget process. Given the
investments needed at 44 Gaukel, staff recommend undertaking a comparative analysis to
determine the optimal long-term location of the creative hub.
In the meantime, operation of the 44 Gaukel Creative Workspace should continue as the
facility's future use and business case are determined. In its current form, 44 Gaukel
Creative Workspace can continue supporting and benefiting from the arts sector workers
who are using it to stimulate citizen interest in local cultural products and experiences.
Gaukel Block's evolution and the perception of the City's support for the arts would be
negatively impacted if the project suddenly concluded.
Moving forward, should Council decide to make a deeper investment in flexible, subsidized
workspace for arts sector development, a balance will need to be found between expenses
for operations, maintaining a state of good repair, and the workforce -boosting, culture -
enriching possibilities of purpose-built, scalable arts resources.
STRATEGIC PLAN ALIGNMENT:
This report supports A Vibrant Economy by advancing work on a Creative Hub.
FINANCIAL IMPLICATIONS:
Capital Budget — The recommendation has no impact. Facility related capital costs will be
assessed through the next phase of analysis as highlighted in the report.
Operating Budget — The recommendation could impact the 2024 operating budget.
Tenancies in approximately 11,150 square feet of rentable space recover approximately
33% of operating expenses. Staff estimate the annual shortfall between revenues and
ongoing facility operations to be between $225,000 and $250,000. This is comparable to
other projects within the sector:
• $295,980 in combined cash and in-kind grants from CoK to THEMUSEUM in 2023
• $244,634 is CoK's Tier 1 community grant to Homer Watson House & Gallery in 2023
• $261,849 was granted to thirty-three local artists by the Region of Waterloo Arts Fund
in 2023
Based on the experience at 44 Gaukel, a creative hub operating budget, without any capital
investment, staff forecast that an appropriate level of operating funding would be as follows:
Page 13 of 46
REVENUES
Notes
Projected annual rent, 44G tenancies
$ 100,000
Estimated based on 80% or more
occupancy
Rent deferred to in-kind contributions
$ 25,000
Estimated from 2022 in-kind
arrangements
Estimated municipal operating funding
$ 234,000
To be considered as part of the
2024 budget process
TOTAL
$ 359,000
On site staffing
EXPENSES
Common area maintenance/utilities
$ 125,000
Based on 2019 to 2022 actuals
Property taxes
$ 50,000
Based on 2019 to 2022 actuals
CAMs/tax contingency
$ 9,000
Estimated 5% increase, or other
discrepancy
On-site operations support
$ 55,000*
On site staffing
Internet services
$ 20,000*
Based on current operations
Custodial labour & supplies
$ 40,000*
2022 actuals plus expanded
service to meet increased use
In-kind program/promotional value
$ 25,000
Contributions from tenants for
reduced rent
Programming/production/improvement
$ 35,000*
Programming including
exhibitions, events, workshops
etc.
TOTAL
$ 359,000
NET
$ -
*These expenses are based on both current and forecasted operations. They are
discretionary and are scalable based on the occupancy and use of the Creative Hub.
COMMUNITY ENGAGEMENT:
INFORM — This report has been posted to the City's website with the agenda in advance of
the council / committee meeting.
CONSULT — Staff have engaged with the users of 44 Gaukel Creative Workspace, impacted
organizations and the Arts & Culture Advisory Committee (ACAC). While this project has
been discussed numerous times by ACAC, on May 16, 2023, the committee expressed their
support for the recommendations offered in this report. Staff have also engaged the
Economic Development Advisory Committee.
PREVIOUS REPORTS/AUTHORITIES:
• DSD -18-019 Creative Industry Hub Next Steps (May 15, 2018)
• FCS -17-128, P17-024 Lease of 44 Gaukel Street & the Creative hub (June 19, 2017)
• CAO -16-034 Options for a Creative Industry Hub (December 5, 2016)
• CAO -16-025 Community Engagement for Creative hub — Status Update (October
3, 2016)
• CAO -16-015 Community Engagement on Potential Arts Hub & Potential of 48
Ontario St. N (May 19, 2016)
Page 14 of 46
CAO -16-016 Animating 44 Gaukel 2nd Floor for Start Ups and Arts & Culture (April
26, 2016)
CAO -15-037 Kitchener's new economic development strategy, Make It Kitchener
(November 16, 2015)
CAO -13-004 Kitchener Studio Project Business Case (April 22, 2013)
APPROVED BY: Justin Readman, General Manager, Development Services
ATTACHMENTS:
• Appendix A — Results from survey of tenants and short -terms renters of 44G
• Appendix B — Summary of skills trade partnerships developed with 44G tenants
• Appendix C — List of current and former 44 Gaukel Creative Workspace tenants,
arts, and culture sector
Page 15 of 46
DSD -2023-143 APPENDIX A
Summary of 44 Gaukel tenant survey results
In late March/early April 2023, 17 tenants or renters of 44 Gaukel responded to a survey
prepared by staff, posted on the Blitzen platform and distributed by ArtsBuild Ontario. The
survey consisted of a dozen questions about their experiences as users of 44 Gaukel.
Seven respondents were tenants or active renters at the facility since 2020 or earlier. The
rest were shorter -term users or only began licencing space over the last couple of years.
Most respondents indicated that prior to taking on space at 44 Gaukel, their arts practice
or organization was based out of a room in their home or they had no space to operate.
Some questions resulted in answers that are tricky to interpret. For example, given the
multidisciplinary and varied nature of 44 Gaukel tenancies, it's difficult to capture the
scale of audiences that benefit from what is produced inside. Some respondents said
they reach hundreds or thousands of people living in the region, while some are building
audiences provincially, nationally or even internationally. Some tenants or renters have
organized dozens of events using various areas of the facility, others have only done
one or two, others host something nearly every week. The crowds at a series of craft
and wellness markets orchestrated by one tenant in 2021 and 2022 brought thousands
of people to shop on the Gaukel Block outside the building. At least two current tenants
have tens of thousands of Instagram followers. One tenant described their reach as,
"millions around the world," which could be corroborated by Spotify streaming details.
Questions that led to insightful responses are summarized by the bullet lists below.
Why artists want to be at 44 Gaukel Creative Workspace
A range or responses with common themes describe users' attraction to the project:
• "The amenities and a space to work beside other like-minded artists."
• "Needed a space to work, heard great things about Gaukel."
• "Location, amenities & price."
• "The affordability of the rental."
• "I really loved the creative vibe of the building, and the affordability was really
important as I was just starting my business."
• "As an artist, I wanted to take the art form to families who could not drive... Being
a small studio who do not have daily classes, renting a space for the entire month
is not affordable... [I try] to keep the costs low to help the families afford to
accommodate their expenditure."
• "Affordable studio space, with enough room to work in."
• "Centrally located, low cost for rent, arts -focused"
• "I was very attracted to being in a building with other artists and arts sector workers.
It was also highly needed to have access to more affordable spaces that are
accessible to my clients. Having moved to Waterloo Region from Toronto, it was
the closest I could find to the Artscape model which I was connected to in Toronto
through the arts community."
Page 16 of 46
• "At the time: the existing tenants, opportunity for collaboration, and flexibility of the
space."
• "Good facility at an excellent rate"
• "Suitable space at a reasonable price for a non-profit group."
• "Working in another environment with other creatives. I've spent a lot of time
working alone, this space has been wonderful to watch it grow and attract other
creatives in the city."
• "The potential to be an arts hub and rent significantly below commercial rates."
• "Being a new production holding auditions on a regular basis, cost matters."
Users were asked how their tenancy or short-term rental(s) has impacted their success:
• 82% said being part of the building provides a greater sense of community
• 76% said their art practice or business is more sustainable and stable
• 65% said their business or practice is easier to manage or has greater capacity
• 59% cited opportunities for collaboration with other facility users
• 53% said being part of a creative workspace downtown benefits their work
• 35% said the size of their audience or visibility within the community has grown
• 35% said their business or practice has found more customers or opportunities
The benefits of affordability
Tenants and renters were asked how the accessible cost of workspace at 44 Gaukel has
allowed them to invest more deeply in other areas of their work:
• "The lower rent allows me to invest more in marketing and have the flexibility to
take unpaid/pro-bono work."
• "It allows me to market my business properly, as well as do more hours of outreach
instead of needing to cram in too many clients into my schedule. It also allows me
to continue to build an equitable arts therapy practice for high -need clients I serve
in low-income situations without any insurance to cover their mental health
supports."
• "We would not be able to afford rehearsal space if we were paying market rate,
which would make our operations much more challenging and make it harder for
us to attract and retain volunteers."
• "Reduces the cost to record artists and provide a creative space for them to create.
Also allows us to invest in gear/essentials."
• "Supports self-employed female artists like me who do not have a big operational
scale due to the exposure of this cultural art form."
• "It's allowed me to continue to take care of myself while I run my business, which
is really important since there is a really high rate of burnout in my field."
• "The money saved has allowed us to put more money towards other production
costs, allowing us to provide higher production value to our shows. It also allows
us to price our tickets competitively to give more families an affordable night out at
the theatre."
• "My business would not otherwise be viable."
• "Materials, and not having to rent a more expensive space - which would destroy
my limited budget."
Page 17 of 46
• "Paying artists."
• "I do not sell enough art to make a living wage. This allows me to have a studio."
The benefits of community
Tenants and renters were asked how other occupants of the facility contribute positively
to their experiences of using the space:
• "Great community vibe, supported each other's events."
• "Positive feedback, advice and compliments."
• "They have been friendly."
• "Having other people around is so nice because I run my business independently
and don't have any co-workers! I like being able to attend events with the building
and also seeing everyone's art around."
• "We come across other art forms and have learned about other cultures as well."
• "A feeling of camaraderie and making friendly connections again after the drought
of the pandemic years."
• "There is a desire to create relationships, collaborations and community which is
central to my work as well."
• "Collaborations/overlaps in clients or services — creating new opportunities for
each other, supporting each other through contracts/collaborations."
• "Students have enjoyed seeing the art work on the windows and the walls as they
enter the building."
• "There is a bit of a university campus vibe developing here. Being able to chat and
talk to other artists has kept my motivated... but also I enjoy sharing what I've
learned with emerging artists."
• "Networking and community spirit."
Users were also asked to articulate their own positive contributions to the workspace:
• "We provide access to equipment and expertise to support other tenants as they
expand to reach new audiences, host events, etc. We've supported production for
their events, managing musicians and talent bookings, event consulting, and
opportunities for them to get involved in our work with our audiences."
• "I'm always available to share information with my neighbours regarding art or
entrepreneurship."
• "I've already within 2 months of moving into the space been able to make
connections with other tenants and plan to collaborate on a project as mentor."
• "They come to experience our rich culturally enriched dance form which they enjoy
when they see us."
• "Connecting artists/musicians and building a community."
• "Hopefully we bring joyful, youthful energy and are not too noisy."
The creative hub in broader context
Finally, respondents were given the opportunity to share any further thoughts:
• "it is so incredibly important for cities to offer spaces that are accessible and
affordable for arts sector workers. Those of us in the arts sector provide more to
Page 18 of 46
the community, often for free, than many other sectors. Spaces are incredibly
difficult to find and often quite isolated from others."
• "This is the most wonderful building and space I have ever had the opportunity to
be a part of. I hope the space is available for years to come."
• "We genuinely hope the City of Kitchener will continue to support this project to
help local artists and community companies like ours afford to continue operating."
• "Gaukel has been a lifeline for our dance space. We are very grateful for this and
hope to have this continue to support small-scale artists/women entrepreneurs."
• "It is an essential space for artists in the area to be able to create work. I would like
there to be more spaces within the building for short-term rentals as I would have
hosted more rehearsals there had the room been available."
• "It's the perfect space in the perfect location that adds professionalism to a
business."
• "I understand the initial plan was to use 44 Gaukel to support artists via affordable
workspace for five years, and that the City has always intended to eventually sell
the property for development. While I know the desire for commercial development
is significant and potentially wildly profitable in the short term, I want to say that
I've seen the space transform in the most wonderful way over the past five years,
notjust internally but the surrounding area. I think Gaukel-Charles has the potential
to become a sort of Granville Island, with the old bus terminal turned into a blend
of Indigenous Centre and Artisanal Market. 44 Gaukel is responsible for much of
the wonderful new vibe that's been created there and could be the cornerstone of
a much more profitable situation for the community in the long term. I sincerely
hope City Council will consider this as they make decisions for the future of the
property."
DSD -2023-143 APPENDIX B
Summary of skills trade partnerships with 44 Gaukel tenants
Page 19 of 46
The photo above, taken by 44 Gaukel tenant John Spaulding in summer 2021, is a
small example of a single output from a skills trade arrangement. It is one of hundreds
of photos taken & supplied by John during his tenancy for use on ArtsBuild Ontario's
Gaukel website and social media channels, and in other project promotional materials.
John has staged shoots in his studio, captured events, coordinated with photo subjects
& made a variety of other accommodations to produce photographs upon request.
Other in-kind partnerships have produced other media, including broadcasted interviews
with 44 Gaukel tenants and program participants, experiments with a video variety show
format (watch GAUKER episode 1, episode 2 & episode 3) and the online presence of a
more elaborate collaborative project called The Beasting. Other partnerships prioritized
in-person experiences in or around the building, such as live music performances,
visual art exhibits, public workshops and murals in the facility. A couple have focused
their output elsewhere, such as community centre programs or public art collection care.
PARTNER
IN-KIND VALUE
SKILLS TRADED
Artshine
$
41,000.00
Arts workshops at City facilities
Good Company Productions
$
17,500.00
Video & sound production services
Art$Pay
$
12,000.00
Art exhibit curation & production
Vincent Marcone
$
10,800.00
Program creation & design services
John Spaulding
$
9,250.00
Photography production services
Midtown Radio
$
6,500.00
Broadcast production & promotions
Torin Langen
$
2,750.00
Installation creation & documentation
Nicholas Rees
$
2,200.00
Public art collection maintenance
Alanah Jewell & Luke Swinson
$
1,600.00
Mural painting contributions
Andy Wright
$
1,100.00
Free photography workshops
Taylor Jones
$
500.00
Photography production services
$
105,200.00
DSD -2023-143 APPENDIX C
List of current & former 44 Gaukel tenants working in the arts & culture sector
About 50 different individuals or organizations in the local sector have held tenancy
licence agreements with the City of Kitchener or subtenancy agreements with ArtsBuild
Ontario. Some predate the pilot period, at which point only a limited portion of the
second floor was available to arts tenants. Accelerator Centre and their various tech
sector subtenancies, some of which began in 2016, are not included in the list below.
ArtsBuild Ontario
,Faces that Hide Productions
Green Light Arts
H ive
KWLT (Kitchener Waterloo Little Theatre)
March 2017 - present
March 2017 - December 2017
March 2017 - December 2017
March 2017 - December 2017
March 2017 - present
Page 20 of 46
Nicole Beno
March 2017 - November 2017
Vincent Marcone (My Pet Skeleton)
March 2017 - present
Artshine & Arts4All
March 2017 - present
, Syd Ursa (Binary Forest)
June 2017 - August 2017
Brianna Kestle
November 2018 - present
Juan Lopezdabdoub
December 2018 - present
Jamie Good
December 2018 - March 2019
Eduardo Soto -Falcon (Pilgrim Falcon Productions)
January 2019 - April 2023
Ikenna Ofoha (Tempus Electric Bikes)
October 2019 - September 2020
Inksmith Education Solutions
November 2019 - May 2020
Taylor Jones
December 2019 - January 2021
i Pamela Cardases
December 2019 - May 2020
Good Company Productions
January 2020 - present
Just Ideas Inc.
February 2020 - present
Nicholas Rees
July 2020 - present
Alanah Jewell & Luke Swinson
July 2020 - May 2021
John Spaulding
August 2020 - present
Basil Alzeri
October 2020 - November 2020
Midtown Radio
December 2020 - April 2022
Robert Plowman
May 2021 - December 2021
Billy Cochrane (Claypot Records)
June 2021 - present
Eddy Grignon
August 2021 - present
Elizabeth Forrest
August 2021 - present
Yulia Balobanova
September 2021 - present
Blue Moon Photography
September 2021 -December 2021
Somali Canadian Association of Waterloo Region
November 2021 - present
Cody Rogers
December 2021 - November 2022
Mina Vedut
January 2022 - May 2022
Arabyon
January 2022 - present
,Sarah Midnight (Midnight Raven Studios)
February 2022 - present ,
586 Group Inc.
March 2022 - July 2022
Art$Pay
June 2022 - present
Alix Simpson
July 2022 - January 2023
Page 21 of 46
Matthew Morales
Jessika Brubacher
Helen Fidler & James Huctwith
,Mason Daigle
Torin Langen
Nehad Abdalkader
Andy Wright & Claire Donnison
Catherine Mellinger
Doris Yi
Zane Fraser
Tristan Molina
August 2022 - present
August 2022 - January 2023
September 2022 - present
September 2022 - present
September 2022 - December 2022
September 2022 - present
October 2022 - present
January 2023 - present
Feb 2023 - present
April 2023 - present
May 2023 - present
ArtsBuild Ontario has also facilitated temporary rentals of community and rehearsal
spaces or other building areas, in some cases either preceding or following tenancies.
More than 130 organizations or individuals who have rented spaces are below.
Organizations
MT Space
Laya Lasya Dance Studio
Kitchener Waterloo Youth Theatre
Green Lights Arts
Faces that Hide Productions
Viral 360
Treehaus Collaborative Workspace
Active Souls Projects
,Gulce Oral
Ring Productions
Page 1 Productions
Illuminate Youth Theatre Company
Porch View Dances
Waterloo Region Small Business Centre
The Making Box
KW Poetry Slam
Night\Shift festival
Individual Artists
Bangishimo Johnston
Jaden Bhundar
Michael Masurkevitch
Gillian Laudano
Brian Lockyer
Alison Harris
Evelyn Barber
Colleen Derek
Sarina Annis
Ronald Hope
Mira Henderson
Jessica Rediker
Gurleen Sidhu
Carolyn Wu
Alexander Wright
Shanice Wilson
Andrew Blakie
Page 22 of 46
Gwaandak Theatre
White Owl Mystic
Registry Theatre
Core
City of Kitchener, Inclusion Services
CAFKA
Community Justice Initiatives
Kitchener Centre Green Party of Ontario
Theatre Mada
Theatre on the Edge
Doyle Academy of Irish Dance
Local Ladies
Pleiads Theatre
Sienci Labs
Navara Yoga
The City Flow Collective
Tri -City Flow
Detour Theatre
JM Drama
Theatre Mada
Mavis Productions
Huniper Productions
,AfterSchool Arcade
Speed Skating Canada
Jungto Society
Expanded Living
The Black Umbrella
Lichwood Grove
K Bresser Music
Golden Astella
The Everything Studio
Kitchener Waterloo Little
Ontario Association of Social Work
Mohamed Kahlil
Yulia Balobanova
Catherine Mellinger
Cody Miller
Paulina Wisniewska
Giulia Pittiglio
Vanessa Spence
Nicole Hayes
Nada Abusaleh
Alicia Reid
Kathleen Kamo McHugh
Vincent Marcone
Phil Marques
Gouri Kundu
Alisa Lin
Jesse Reimer -Watts
Tommy Tran
Cosmic Ray
Chaenel Mattis
Brittany Kennedy
Morgan Anderson
Jimmy C
Melodie Wakefield
Nicole Nash
Marioa Morales
Jessica Davey
Page 23 of 46
Echoson Stem Club
University of Waterloo Black Association for
Student Expression
Sekond Skin Studio
iSpeak Spanish
Mankind Project
Freedom Marching Project
The Projecter12
The Innovative Studio
Youth Theatre Canada
National Service Dogs
I Pinch Cabaret
Friday Empire Band
Levant for Arts and Culture
DiverseWorks Dance Co.
Birds Canada
20 Below Games
KW Smash Bros Tournament
IP Acting Studio
Lightning Banjo Productions
Suzuki Talent Education of Waterloo
Sunflower Swing
Community On Stage
Playful Fox Productions
Kukkiville
Ophelia Gardenia
Page 24 of 46
J
Staff Report
I T iE F_R Finance and Corporate Services Department www kitchener ca
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: June 5, 2023
SUBMITTED BY: Ryan Hagey, Director of Financial Planning & Reporting, 519-741-2200
ext. 7353
PREPARED BY: Ryan Hagey, Director of Financial Planning & Reporting, 519-741-2200
ext. 7353
WARD(S) INVOLVED: All Wards
DATE OF REPORT: April 5, 2023
REPORT NO.: FIN -2023-255
SUBJECT: Community Benefits Charge (CBC) Direction
RECOMMENDATION:
That staff be directed to develop a Community Benefits Charge (CBC) strategy and bylaw;
REPORT HIGHLIGHTS:
The purpose of this report is to get direction from Council to proceed with the development
of a Community Benefits Charge (CBC) strategy and bylaw.
This report supports the delivery of core services.
BACKGROUND:
Through a series of legislative change in 2019/2020, the Provincial government introduced a
new funding mechanism named the Community Benefits Charge (CBC). In their words the
CBC is:
"a flexible new tool under the Planning Act that helps municipalities tackle the costs of
higher density in communities with new developments. This tool replaces the former
section 37 height and density bonusing in the Act, subject to transition rules.
Municipalities can use community benefits charges to fund the capital costs of any
public service associated with new growth, including parkland, if those costs are not
already recovered from development charges and parkland provisions."
CBCs cannot exceed 4% of the value of the land and are for developments with 10 or more
residential units and five or more storeys. Single -tier and lower -tier municipalities can levy
CBCs, whereas upper tier municipalities like the Region of Waterloo cannot. Staff are aware
of 18 municipalities having adopted a CBC, with half of them (9) being appealed at their
implementation. Other municipalities have decided not to move forward with a CBC at all
given the administration considerations compared to the amount of potential revenue that it
would generate, or are waiting to consider a CBC alongside their development charge bylaw.
Locally, the City of Waterloo has passed a CBC, but Kitchener and Cambridge have not.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
Page 25 of 46
REPORT:
Staff are seeking direction from Council to begin the process of implementing a Community
Benefits Charge (CBC). In order to levy a CBC, a municipality must:
a) Develop a CBC strategy, and
b) Pass a bylaw
The work required to implement a CBC is specialized and still relatively new so it would require
the assistance of external consulting services to complete. It is also important to note that CBC
bylaws may be appealed to the Ontario Land Tribunal, so professional expertise in developing
the strategy and bylaw is highly recommended by staff.
Before proceeding with a CBC strategy & bylaw, staff are seeking direction from Council as to
whether there is a desire to entertain implementing a CBC at this time. A CBC could help provide
funding for new City infrastructure, but also seems contrary to recent Provincial legislation which
tries to reduce the fees charged by municipalities for new development. Given current economic
conditions, additional fees may not be received well by the development industry at this time.
Also, it should also be noted that the additional costs of a CBC could impact the viability of some
projects that seek to create affordable/attainable housing options.
Some of the pros and cons of a CBC are noted below.
Pros
Cons
CBCs could replace lost revenues from eliminated development charge (DC) services
and caps on parkland dedication fees.
o As part of Bill 23, the Provincial government removed some services from DC
legislation. Services like Parking, Cemeteries, and Studies are no longer DC
eligible but could instead be funded by CBCs.
o Bill 23 also significantly (estimated between 50%-85%) reduced the amount of
funding the City can collect for cash -in -lieu of parkland. CBCs could be used to
help replace these lost funds.
CBCs could be used for services that are not included in the DC study
o Another option is to use CBCs to fund new service areas that are not included in
the City's DC study. One example is affordable housing, which has been included
in some other municipal CBC strategies.
CBC revenues would not be enough to cover the lost revenues from Bill 23, let alone fund
new service areas.
o Lost revenues because of Bill 23 were estimated at $14M/year (see report DSD -
2022 -501 Bill 23 More Homes Built Faster Act — Kitchener Comments). The exact
amount of CBC revenues will not be known until detailed analysis is completed,
but it will likely be considerably less. For instance, Waterloo which is smaller than
Kitchener, but has a number of multi -unit residential developments have estimated
their annual CBC revenues will be around $500,000/year or less. Oakville which
is more comparable in population has estimated their CBC revenues to be around
$1.2M/year. Staff estimate Kitchener's annual revenues will be closer to
Oakville's, but this won't be known until detailed calculations of estimated
development are completed for Kitchener.
Page 26 of 46
CBCs would only apply to medium and high intensity developments.
o Only buildings that have at least 5 storeys and 10 residential units would pay a
CBC. Other growth -related development fees (e.g. development charges) are paid
by all types of development. It could be seen as unfair for more challenging to
construct forms of development to pay for lost revenues due to legislative changes
(e.g. Bill 23) or to fund new services (e.g. affordable housing).
CBCs would require additional administration and cost.
o Each application of a CBC requires a land valuation to determine the amount of
the charge. Based on the approach taken by other municipalities, a standard land
value for a geographic area could be used and updated regularly, but this work is
currently not done by the City on a regular basis, so would be additional cost/work
load.
o If a developer disagrees with the valuation, they can appeal. This would be time
consuming to mediate or defend on appeal at the Ontario Land Tribunal.
STRATEGIC PLAN ALIGNMENT:
This report supports the delivery of core services.
FINANCIAL IMPLICATIONS:
Existing funding of approximately $100,000 is available to complete a CBC strategy and bylaw.
The amount of revenues generated by CBCs in Kitchener will not be known without completing
more analysis towards developing a CBC strategy. CBC revenues are dependent on the amount
of development that is at least 5 storeys tall and includes 10 residential units, and land values at
the time the development moves forward.
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 -20-054 Development Charge (DC) & Community Benefit Charge (CBC) Update
• Planning Act O. Reg. 509/20: COMMUNITY BENEFITS CHARGES AND PARKLAND
APPROVED BY: Jonathan Lautenbach, Chief Financial Officer, Financial Services
Page 27 of 46
J
Staff Report
I T iE F -R Finance and Corporate Services Department www kitchener ca
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: June 5, 2023
SUBMITTED BY: Greg St. Louis, Director, Gas & Water Utilities, 519-741-2600 ext. 4538
PREPARED BY: Khaled Abu-Eseifan, Manager, Gas Supply and Engineering, 519-741-
2600 ext. 4826
WARD(S) INVOLVED: All Ward(s)
DATE OF REPORT: May 22, 2023
REPORT NO.: INS -2023-247
SUBJECT: Natural Gas Purchase Policy Review - 2023
RECOMMENDATION:
That the proposed updates to Policy No. FIN-ACQ-560 as proposed by report No. INS -
2023 -247 and provided in Appendix A be approved.
REPORT HIGHLIGHTS:
• The purpose of this report is to review the performance of the natural gas purchase portfolio
in meeting its strategic objectives and to provide recommendations for improvements.
• The key finding of this report is that the current purchase horizon of 3 years is sufficient to
maintain a balance between rate stability and market responsiveness.
• The report also recommends changes to supplier financial health criteria to qualify more
suppliers for short term deals.
• There are no immediate financial implications for this report however the proposed
modifications to the Gas Purchase Policy are intended to provide gas supply purchases that
are market responsive and provide rate stability to Kitchener Utilities customers.
• This report supports the delivery of core services.
BACKGROUND:
In January 1998, Council adopted policy 1-560 (The Gas Purchase Policy), which outlines the
procurement of natural gas supply, separate from the City's purchasing bylaw. The main driver
for this separate policy is that the nature, extent, and timing of these transactions did not align
with the City's existing approvals process for goods and services.
Since its inception, this policy has been amended four times, with the most recent amendment
being in June 2014 when council established a more "market responsive" management of the
gas purchase portfolio. This was accomplished by reducing the proportion of fixed purchases
and the purchase horizon from 5 years to 3 years. Fixed proportions determine the minimum
and maximum limits of forward fixed price contracts (hedging) out of the total annual
requirements. These limits ensure the use of disciplined approach to acquire blended portfolio
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
Page 28 of 46
of natural gas that balance between rate stability and market responsiveness. Tables 1 and 2
below provide the fixed portfolio limits before and after the changes.
Table 1: Pre 2014 Fixed Portfolio Limits
Past Fixed Limits
Year 1
Year 2
Year 3
Year 4
Year 5
Maximum
90%
70%
50%
30%
20%
Minimum
40%
30%
20%
10%
10%
Table 2: Post 2014 To Date Fixed Portfolio Limits
Current Fixed Limits
Year 1
Year 2
Year 3
Maximum
60%
40%
20%
Minimum
20%
20%
0%
As per clause 4 of the gas purchasing policy, Staff is required to review the policy on a no less
than three-year basis to ensure that the ongoing performance of the portfolio is meeting its
strategic objectives and customer's rate expectations. This report addresses the requirement as
per clause 4.
REPORT:
Since the introduction of the market responsive policy in 2014, Staff has found that retail rates
charged to Kitchener Utilities customers continue to be more reflective of market costs as will as
being reasonably stable.
Figure 1 below depicts Kitchener Utilities' retail gas rate charged to its customers compared to
market prices and Enbridge Gas rates. Table 3 summarizes Kitchener's gas rate impact in
relation to the market trend.
• Section 1 — The previous report (INS -17-085) in 2017 described how well the 5 -year
horizon and Maximum/Minimum fixed percentages performed in extreme volatility
(upward and downward) during the 16 -year period including 2014. Volatility during that
period was attributed to strong natural gas demand with supply unable to keep up, driving
high prices. High prices led to significant re -investment in North America in both LNG
import terminals as well as unconventional gas retrieval from shale formations. The
success of the latter led to the substantial price drop occurring in 2008/09 coincidentally
during the financial crisis. Kitchener Utilities' legacy fixed prices reaching out 5 years
showed poor responsiveness which led to the recommendation and approval to reduce
the purchase horizon to 3 years.
• Section 2 — The period of June 2014 to October 2017 was too short a period to evaluate
the new parameters, however during that period it appeared to show the rates to be more
market responsive as the gas market fell again and KU rates subsequently followed.
Page 29 of 46
Section 3 — This gas market in the most recent period from November 2017 to April
2023 presented mid-range volatility. The changing market conditions and a global
pandemic brought in demand uncertainty and resulted in a recent spike in prices. The
policy provided the parameters that enabled. KU to set rates that were relatively stable,
more competitive compared to Enbridge rates and able to buffer market prices spikes
for longer periods of time.
• Section 4 — This section provides a forecast for future market prices based on Kitchener
50.0
45.0
40.0
35.0
30.0
M
E
25,0
QJ
Q.
Ln
2'LXO
V
1_g 0
U
10.0
5.0
Utilities' consultant advice. They consider future supply and demand factors, projects and
market trends and provide periodical market updates and forecasts. The latest forecast
shows an upward trending market prices with mid-range volatility for the coming 3 -5
years. The current purchase policy parameters are expected to perform well in these
conditions.
NG Market Price vs KU Gas Rate vs Enbridge Gas Rate
0o rn o N M S Ln W r- W M O N M S Ln W r- W M O N M S Ln W r-
1_� _� 1_� 1_� IV I N N N N N N N N
— — — — — — — — — — — — — — — — — — — — — — — — — — — — — —
r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1 r-1
KU Gas Rate - cents per m3 — — — — Enbridge Gas rate - cents per m3 Market
Figure 1: Natural Gas Market Price vs. KU Gas Rate vs. Enbridge Gas Rate
Page 30 of 46
Table 3: Market trends vs. KU Rate Impact Summary
Section
Market Trend
KU Rate Impact
1
High Volatility
Good performance during rising market prices; poor
responsiveness in dramatic fall-off of prices.
2
Low Volatility
New 3 -year rate impact seems more responsive and stable.
Mid-range
Multi-year stable pricing was enabled by the policy. The
3
Volatility
increased volatility has a mild impact on rate
responsiveness.
Mid-range
Forward market forecasts are projected to be upward
4
Volatility
trending with mid-range volatility. Purchase policy is
expected to soften the impact of these conditions.
The current gas purchase policy with the 3 -year purchase horizon provides a balanced approach
between rate stability and market responsiveness. It allows Kitchener Utilities to soften price
hikes in volatile market conditions, maintain price stability in upward/increasing market
conditions and respond to market prices in downward/decreasing markets. Staff recommends
that the purchase policy horizon of 3 years and the fixed portfolio limits in table 2 remain
unchanged until the next natural gas purchase policy review in 2026.
It is important to note that hedging is not about beating the market and winning but its primary
goal is to reduce volatility in prices and keep rates stable for customers. Also, supply rates are
charged at cost and the utility makes no money from these programs. During some periods,
Kitchener's gas rates will be higher than short term market prices and at other times, it will be
lower. This is the trade-off required for stable rates, which are favored by most Kitchener Utilities
customers.
Modification of financial health minimum required by natural gas suppliers
Market volatility often is the result of tightly matched supply and demand and more specifically
is riskier when the market sentiment is that demand is outpacing supply growth. This is the
current and foreseeable market situation globally and to a lesser extent in North America. A
control exists in the policy to protect the portfolio from suppliers that are not strong financially to
deliver contracted supply throughout the full term of the transaction regardless of current market
pricing at any point in time. For example, in February 2021, "winter storm Uri" resulted in
widespread sustained extreme low temperatures in Oklahoma and Texas triggering high
demand for gas and simultaneously choked off supply due to wellhead freeze -offs. This also
triggered extreme volatility in day pricing in excess of $100/MMBtu for several consecutive days
due to firm contracted supply failures which lead to high cost of supply replacement and/or
penalties levied by utilities and pipelines. Suppliers that cannot sustain this kind of extreme cost
risk typically are not financially strong.
This financial strength leads to inherent cost premiums to support the security. Also, multiple
suppliers help to make a deeper, liquid market and better price discovery. Both principles exist
in the current purchasing policy. What is found typically in a pool of suppliers is that those with
high credit rating (financial strength) often carry price offers that are on the high side of the data
Page 31 of 46
pool. Conversely, those with less financial strength have less overhead cost to recover so have
the opportunity to make lower offers (with all other price drivers being equal). This is an example
of the classic risk -reward trade off. The fixed price risk of a longer term is higher with a less
credit -worthy counterparty.
An adjustment to the policy is recommended as a result of these findings to enable suppliers
with one category below "investment grade" credit rating category to participate in purchase
opportunities that reach no further than the end of Year 1 of the policy's three-year timeframe.
Currently suppliers up to and including line 10 in Table 4 are qualified to participate in natural
gas purchases and the change will allow the ones in line 11 to bid on year 1 deals. This will
qualify more suppliers to bid on short term deals which will provide better prices for the City while
maintaining the risk mitigation measures for long term deals. The proposed changes to clause
6 of the gas purchase policy are provided in Attachment A.
Also, upon closer review of the Gas Purchase Policy a small change is recommended to clarify
the intent. Specifically, it is proposed that clause 8 first sentence be updated:
Current: The financial exposure of the City will be minimized by seeking financial
assurances in the event of supplier default.
Proposed: The financial exposure of the City will be minimized by seeking financial
assurances in circumstances of a high risk of supplier default
Table 4: International Credit Rating Agencies Scores
No
S&P
Moody's I
Fitch
Meaning and Color
1
AAA
Aaa
AAA
2
AA+
Aal
AA+
High Grade
3 AA Aa2 AA
4 AA- Aa3 AA
5
A+
Al
A+
Upper Medium Grade
6 A A2 A
7 A- A3 A-
8
BBB+
Baal
BBB+
Lower Medium Grade
9 BBB Baal BBB
10 BBB- Baa3 666-
11
BB+
Bal
BB+
Non Investment Grade
Speculative
12 BB Bat BB
13 BB- Ba3 BB -
14
B+
B1
B+
Highly Speculative
15 B B2 B
16 B- B3 B-
17
CCC+
Caa1
CCC+
Substantlal Risks
18
CCC
Caa2
CCC
Extremely Speculative
Update and administrative changes of the Gas Purchase policy
It is recommended that the administrative updates of the policy purpose, definitions, scope, and
content clause 9 of the Gas Purchase policy be revised as provided in Attachment A.
Page 32 of 46
STRATEGIC PLAN ALIGNMENT:
This report supports the delivery of core services.
FINANCIAL IMPLICATIONS:
Capital Budget — The recommendation has no impact on the Capital Budget.
Operating Budget — The recommendation has no impact on the Operating Budget.
PREVIOUS REPORTS/AUTHORITIES:
INS -17-085 3 -Year review of Natural Gas Purchasing Policy
INS -14-014 Natural Gas Purchase Policy Review
FIN-ACQ-560 Gas Purchase Policy
APPROVED BY: Denise McGoldrick, General Manager, Infrastructure Services
ATTACHMENTS:
Attachment A — Modified Natural Gas Purchase Policy
Attachment B — Current Natural Gas Purchase Policy
Page 33 of 46
1
POLICY APPLIES TO THE FOLLOWING:
❑ All Employees
❑
POLICY
Policy No: FIN-ACQ-560
Policy Title:
GAS PURCHASE
Approval Date: January 19, 1998
Reviewed Date: June 2023
Policy Type: COUNCIL
Category:
Finance
Next Review Date: June 2026
C.U.P.E. 68 Mechanics
❑
Reviewed Date: Click here to enter text.
Sub -Category:
Acquisitions & Dispositions
❑
Student
Author:
Author Unknown
Last Amended: June 16, 2014
Replaces: 1-560- Gas Purchase
Dept/Div: Infrastructure Services/Gas
K.P.F.F.A.
and Water Utilities
Specified Positions only:
❑
Other:
❑
Repealed: Click here to enter a date.
❑
Local Boards & Advisory Committees
Replaced by: Click here to enter text.
Related Policies, Procedures and/or Guidelines:
N/A
1. POLICY PURPOSE:
The purpose of this policy is to allow the transaction of gas commodity and
transportation contracts in an effective and efficient manner. Gas commodity
pricing is dynamic and fluctuates with the market. The nature of these transaction
do not align with the standard purchasing processes and policies.
2. DEFINITIONS:
None.
3. SCOPE:
1 of
3
Page 34 of 46
POLICY APPLIES TO THE FOLLOWING:
❑ All Employees
❑
All Full -Time Employees
❑
All Union
❑
Management
❑
C.U.P.E. 68 Civic
❑
Non Union
❑
C.U.P.E. 68 Mechanics
❑
Temporary
❑
C.U.P.E. 791
❑
Student
❑
I.B.E.W.636
❑
Part -Time Employees
❑
K.P.F.F.A.
❑
Specified Positions only:
❑
Other:
❑
Council
❑
Local Boards & Advisory Committees
1 of
3
Page 34 of 46
Policy No: FIN-ACQ-560
Policy Title: GAS PURCHASE
This policy applies to the purchase of fuel commodity and transportation contracts
to be delivered to Kitchener Utilities customers.
4. POLICY CONTENT:
3
That the following Market Responsive Portfolio be adopted as the Gas Purchase
Policy for the City of Kitchener, namely:
1) Utilities' Staff, with assistance from external parties, as appropriate and subject to
periodic tendering for consulting services, shall monitor market and economic forces
to develop a prudent purchase strategy.
2) The purchase strategy shall reflect a three-year timeframe and use a disciplined
approach to acquire a blended portfolio of natural gas contracts which varies the
pricing and terms of the contracts to provide rate stability while remaining responsive
to market pricing.
3) Given the long-term nature of getting natural gas to the City, acquiring transportation
or storage contracts should include a longer-term view with contract terms of up to
twenty (20) years.
4) The ongoing performance of the purchase portfolio in meeting its strategic objectives
and customers' rate expectations shall be periodically reviewed, not less than every
three years and not more than annually and revised as needed and approved by
Council.
5) To ensure market competition is used and balanced with contracting costs, the City's
expected natural gas supply needs will be placed with no less than four (4) primary
suppliers. At no time should more than 50% of the City's annual supply be placed
with one supplier.
6) The natural gas supply contracts will only be placed with large, financially secure
suppliers with a proven industry track record. Before supply contracts are placed, the
City must ensure that the supplier has a strong financial rating as evaluated by an
independent evaluator. The minimum rating with Standard & Poor's be BBB or
equivalent Moody's rating Baa for transactions that fall into Year 2 or later. For
transactions falling in less than year 2, the minimum rating will be Standard &
Poor's BB+ or equivalent Moody's rating Bal.
7) The natural gas supply contracts will provide the City with the flexibility to swap
between indexed and fixed prices at market-based transaction fees.
8) The financial exposure of the City will be minimized by seeking financial assurances
in circumstances of high risk of supplier default. These assurances will be
maintained commensurate with exposure of the contracts to an individual supplier.
2 of
Page 35 of 46
Policy No: FIN-ACQ-560
Policy Title: GAS PURCHASE
When dealing with a marketing entity for supply, assurances will be sought from the
corporate parent.
9) All natural gas purchase transactions will be authorized by the CFO & City
Treasurer, Financial Services Department or in his/her absence one of the City's
signing officers and the Director, Gas and Water Utilities or in his/her absence,
Utilities' Manager, Gas Supply and Engineering.
10) Separate accounting for the supply, transportation and delivery programs should be
maintained, audited and reported to Council on a regular basis with other City
financial statements.
5. HISTORY OF POLICY CHANGES
Administrative Uodates
2016-06- Policy 1-560 template re -formatted to new numbering system and given
number FIN-ACQ-560
Formal Amendments
2001-08-27
— As per Council directive
2002-05-27
— As per Council directive
2006-10-06
— As per Council directive
2014-06-16
— As per Council directive
3 of
3
Page 36 of 46
I
POLICY APPLIES TO THE FOLLOWING:
R
POLICY
Policy. No. FIN-ACQ-560
Policy Title:
GAS PURCHASE
Approval Date: January 19, 1998
Reviewed Date: July 2016
Policy Type: COUNCIL
Category:
Finance
Next Review Date: July 2021
Non Union
❑
Reviewed Date:
Sub-Category:
Acquisitions & Dispositions
❑
C.U.P.E. 791
Author:
Author Unknown
Last Amended: June 16, 2014
Replaces: 1-560- Gas Purchase
Dept/Div: Finance & Corporate
Part -Time Employees
Services\Legal
K.P.F.F.A.
❑
Specified Positions only:
❑
Repealed:
❑
Council
Replaced by:
Related Policies, Procedures and/or Guidelines:
To be included at next review.
1. POLICY PURPOSE:
To be included at next review.
2. DEFINITIONS:
To be included at next review.
3. SCOPE:
To be included at next review.
1 of 3
Page 37 of 46
POLICY APPLIES TO THE FOLLOWING:
❑ All Employees
❑
All Full -Time Employees
❑
All Union
❑
Management
❑
C.U.P.E. 68 Civic
❑
Non Union
❑
C.U.P.E. 68 Mechanics
❑
Temporary
❑
C.U.P.E. 791
❑
Student
❑
I.B.E.W.636
❑
Part -Time Employees
❑
K.P.F.F.A.
❑
Specified Positions only:
❑
Other:
❑
Council
❑
Local Boards & Advisory Committees
To be included at next review.
1 of 3
Page 37 of 46
Policy No: FIN-ACQ-560
Policy Title: GAS PURCHASE
4. POLICY CONTENT:
That the following Market Responsive Portfolio be adopted as the Gas Purchase
Policy for the City of Kitchener, namely:
1) Utilities' Staff, with assistance from external parties, as appropriate and
subject to periodic tendering for consulting services, shall monitor market
and economic forces to develop a prudent purchase strategy.
2) The purchase strategy shall reflect a three year timeframe and use a
disciplined approach to acquire a blended portfolio of natural gas contracts
which varies the pricing and terms of the contracts to provide some rate
stability while remaining more responsive to market pricing.
3) Given the long-term nature of getting natural gas to the City, acquiring
transportation or storage contracts should include a longer term view with
contract terms of up to twenty (20) years.
4) The ongoing performance of the purchase portfolio in meeting its strategic
objectives and customers' rate expectations shall be periodically reviewed,
not less than every three years and not more than annually, and revised as
needed and approved by Council.
5) To ensure market competition is used and balanced with contracting costs,
the City's expected natural gas supply needs will be placed with no less than
four (4) primary suppliers. At no time should more than 50% of the City's
annual supply be placed with one supplier.
6) The gas supply contracts will only be placed with large, financially secure
suppliers with a proven industry track record. Before supply contracts are
placed, the City must ensure that the supplier has a strong financial
rating as evaluated by an independent evaluator. The minimum rating
with be Standard & Poors BBB or equivalent Moody's rating Baa
(Investment Grade).
7) The natural gas supply contracts will provide the City with the flexibility to
swap between indexed and fixed prices at market based transaction fees.
8) The financial exposure of the City will be minimized by seeking financial
assurances in the event of supplier default. These assurances will be
maintained commensurate with exposure of the contracts to an individual
supplier. When dealing with a marketing entity for supply, assurances will
be sought from the corporate parent.
2of3
Page 38 of 46
Policy No: FIN-ACQ-560
Policy Title: GAS PURCHASE
9) All natural gas purchase transactions will be authorized by the Deputy CAO
& City Treasurer, Finance and Corporate Services Department or in his/her
absence one of the City's signing officers and the Director of Utilities or in
his/her absence, Utilities' Manager, Regulatory Affairs and Supply.
10) Separate accounting for the supply, transportation and delivery programs
should be maintained, audited and reported to Council on a regular basis
with other City financial statements.
5. HISTORY OF POLICY CHANGES
Administrative Updates
2016-06 - Policy 1-560 template re -formatted to new numbering system
and given number FIN-ACQ-560.
Formal Amendments
2001-08-27 -
As per Council directive
2002-05-27 -
As per Council directive
2006-10-06 -
As per Council directive
2014-06-16 -
As per Council directive
3 of 3
Page 39 of 46
Staff Report
r
NJ :R
Corporate Services Department www.kitchener.ca
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: June 5, 2023
SUBMITTED BY: Amanda Fusco, Director, Legislated Services/City Clerk, 519-741-2200
ext. 7809
PREPARED BY: Helen Fylactou, Manager, Licensing, 519-741-2200 ext. 7854
WARD(S) INVOLVED: 9
DATE OF REPORT: May 16, 2023
REPORT NO.: COR -2023-246
SUBJECT: Appointment of Licensing Tribunal Members
RECOMMENDATION:
That Councillors 1. 2. and 3. be
appointed as the members of the Licensing Appeal Tribunal.
REPORT HIGHLIGHTS:
• This report supports the delivery of core services.
BACKGROUND:
Chapter 599 (Licensing and Regulations of Businesses) of the City of Kitchener Municipal Code
governs the licensing and renewal of businesses. As part of the business licensing regulations,
the Manager of Licensing has the authority to impose conditions, suspend or revoke a business
licence if they find the business is in violation of Chapter 599, or other applicable bylaws, or Acts.
The Business Owner (the Licensee) then has the right to request an Appeal of the decision made
by the Manager of Licensing to the Licensing Appeal Tribunal.
Over the past year, Licensing staff has collaborated closely with our By-law Enforcement team,
Waterloo Regional Police Service, and the Alcohol and Gaming Commission of Ontario in
order to address concerns pertaining to Afro East Restaurant, a licensed food shop situated at
91 Queen Street South. Multiple complaints have been received against the establishment,
and investigations have confirmed that these complaints are valid. The complaints span a wide
range, encompassing issues such as excessive noise and garbage, violations of Fire Code
regulations, infringements of Liquor Licensing regulations, as well as multiple infractions of the
Criminal Code.
In response to these ongoing problems and violations, the Licensee was initially issued a
verbal warning, followed by conditions placed on their licence. Unfortunately, the Licensee has
failed to fulfill these conditions, and as such, the Manager of Licensing revoked their business
licence.
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
Page 40 of 46
REPORT:
On May 10, 2023, the Manager of Licensing informed the Licensee that their business licence
would be revoked due to the ongoing and unresolved issues, and the violations of the licence
conditions. Following the decision, the Licensee has requested an appeal.
In order to facilitate the appeal, Staff is requesting the appointment of 3 councillors to serve as
members for the Licensing Appeal Tribunal for the upcoming hearing concerning Afro East
Restaurant.
In previous Tribunals, the ward councillor is usually not one of the appointed members of the
Licensing Appeal Tribunal in order to avoid any potential perceptions of bias.
The hearing will be scheduled to take place after the summer recess. It is anticipated that the
hearing will take place in the morning; however, members of the Licensing Appeal Tribunal
should allocate the entirety of the workday. The Licensing Appeal Tribunal may recommend,
with respect to the Food Shop Licence, to Council whether:
• To support the revocation of the licence;
• To suspend the licence;
• To grant the licence; or,
• To grant the licence with conditions.
The appointed members and applicant will receive a notice of the location and time of the
Licensing Appeal Tribunal. In general, the request for a Licensing Appeal Tribunal is infrequent
as the initial step is always to mitigate and address concerns.
STRATEGIC PLAN ALIGNMENT:
This report supports the delivery of core services.
FINANCIAL IMPLICATIONS:
The renewal fee for a food shop licence is $255.00. There is no fee for a Licensing Appeal
Tribunal.
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:
There are no previous reports/authorities related to this matter.
APPROVED BY: Victoria Raab, General Manager, Corporate Services
Page 41 of 46
Staff Report
r
NJ :R
Development Services Department www.kitchener.ca
REPORT TO: Community and Infrastructure Services Committee
DATE OF MEETING: June 5, 2023
SUBMITTED BY: Barry Cronkite, Director, Transportation Services
519-741-2200 ext. 7738
PREPARED BY: Steven Ryder, Traffic Planning Analyst, Transportation Services
519-741-2200 ext. 7152
WARD(S) INVOLVED: Ward 1
DATE OF REPORT: May 9, 2023
REPORT NO.: DSD -2023-209
SUBJECT: Manchester Road Traffic Calming Review
RECOMMENDATION:
That staff be directed to implement the proposed traffic calming plan as outlined in
Attachment A (Manchester Road — Proposed Traffic Calming Plan) of report DSD -
2023 -209.
REPORT HIGHLIGHTS:
• The purpose of this report is to seek Council approval for the implementation of the
proposed traffic calming plan for Manchester Road. This traffic calming project was
approved for initiation in June 2022, via staff report DSD -2022-251.
• The key finding of this report is that the proposed traffic calming plan is supported by
the majority of affected residents. The proposed traffic calming measures are
expected to help reduce automobile speeds and improve safety for street users.
• The financial implications are approximately $30,000 which will be taken from the
Transportation Services Traffic Calming capital account. Additional operational
expenses are not anticipated from the recommended measures.
• Community engagement included notifications and surveys via mailouts, and a virtual
Public Information Centre (PIC) held in February 2023. It also included an EngageWR
project page to provide more information and project updates, and a single point of
contact for residents.
• This report supports the delivery of core services.
BACKGROUND:
Traffic volume and speeding are safety related issues frequently raised by residents of
affected neighbourhoods in the City of Kitchener. In response to these issues Council
reviewed, updated and subsequently adopted the City's Traffic Calming Policy in 2014 and
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
Page 42 of 46
established an annual budget to address traffic management issues in residential
neighbourhoods. The traffic calming policy outlines a number of evaluation criteria that
provide a fair and consistent review of streets and communities, while defining and
prioritizing the streets most in need of traffic calming from a traffic safety perspective.
In June 2022, Council received report DSD -2022-251 - "Manchester Road Formal Traffic
Calming Review — Initiation Approval', in which staff recommended that a traffic calming
review be initiated for Manchester Road. Upon discussion and deliberation, Council
approved the initiation of the traffic calming review for Manchester Road.
Engagement with affected residents for this review, as well as the preliminary design of the
traffic calming plan, took place throughout 2022 and early 2023. This traffic calming review
used mailouts and an EngageWR project page as the primary means for community
engagement, with resident surveys being conducted via the Manchester Road EngageWR
project page. A virtual Public Information Centre took place over Zoom on February 1, 2023.
The final resident survey to indicate support for, or against, the proposed traffic calming
plans was circulated in April 2023. Staff is presenting this report to Committee and Council
for approval to construct traffic calming measures by Q4 2023.
REPORT:
Initiation
In August and September 2022, Transportation Services conducted a resident survey for
the initiation of a traffic calming review for Manchester Road. The initiation survey results
are summarized in the table below:
Initiation Survey Results — Manchester Road Total Study Area
Number Percent
Total responses received from 68 addresses surveyed
56 (of 68) 82.4%
In favor of initiating the traffic calming review
56 (of 56) 100%
Opposed to initiating the traffic calming review
0 (of 56) 0%
This survey response rate for addresses directly fronting Manchester Road was 82.4% (56
of 68), which met the minimum required participation threshold (25%) for responses. This
survey showed that 100% (56 of 56 responses) of directly fronting addresses who answered
the survey were in support of initiating the traffic calming review. Staff also incorporated
resident feedback collected from this survey into the design of the preliminary preferred
traffic calming plan which was presented to the neighbourhood in February 2023.
Review Process
The Public Information Centre (PIC) was held in February 2023 over the Zoom platform.
The intent of this PIC was to discuss the traffic calming review process, review results of the
resident initiation survey and present a preliminary preferred traffic calming plan to receive
resident feedback. Staff also answered both written and verbal questions from residents in
attendance.
The preliminary design included five (5) speed humps. Staff reviewed resident feedback
received during and after the Public Information Centre (PIC) and determined that no
Page 43 of 46
changes to the preliminary design were required and finalized the proposed traffic calming
plan.
Affected agencies were also notified throughout the review and asked to provide feedback
on the traffic calming plan. Kitchener Fire did not express any concerns regarding the
preferred traffic calming plan. Grand River Transit did not express any concerns as
Manchester Road is not a bus route.
Final Survey
On April 21, 2023, Transportation Services staff delivered a final survey notification letter to
all directly affected properties along Manchester Road. The intent of the survey was to
determine if there is sufficient support for the implementation of the preferred traffic calming
plan. As per the City of Kitchener Traffic Calming policy, a minimum of 50% of directly
fronting residents must respond to the survey and 60% of the respondents must support the
recommended plan. The results of the final survey are as follows:
Final Survey Results — Manchester Road Total Study Area
Number
Percent
Total responses received from 68 addresses surveyed
37 (of 68)
54%
In favor of implementing the proposed traffic calming measures
34 (of 37)
92%
Opposed to implementing the proposed traffic calming measures
3 (of 37)
8%
The final survey response rate for addresses directly fronting Manchester Road was 54%,
which met the minimum required participation threshold of 50%. Additionally, the final survey
showed that 92% of directly fronting addresses who answered the survey support the
implementation of the traffic calming measures, which meets the minimum support threshold
of 60%.
STRATEGIC PLAN ALIGNMENT:
This report supports People -friendly Transportation.
FINANCIAL IMPLICATIONS:
Capital Budget — The total estimated cost for implementing the traffic calming plan is
approximately $30,000. The funds will be taken from the Transportation Services Traffic
Calming capital budget account.
Operating Budget — The recommendation has no impact on the annual Operating Budget.
COMMUNITY ENGAGEMENT:
INFORM — Directly affected residents and the neighbourhood of the Manchester Road traffic
calming review have received information regarding this review since August 2022.
Notification of the Public Information Centre (PIC) was provided through mailouts and via
the EngageWR project page. Presentation materials were made available the EngageWR
project page after the conclusion of the PIC.
Page 44 of 46
CONSULT — The Manchester Road traffic calming review began with an initiation survey in
August 2022. A virtual PIC was held over the Zoom platform in February 2023 in order to
answer resident questions and concerns about the traffic calming review process and the
preferred traffic calming plan. Transportation Services staff mailed a final survey notification
letter to all neighbourhood residents within the Manchester Road study area to measure
support for the preferred plan via a survey on the EngageWR project page. Residents were
notified that hard copy surveys were available to those who preferred mail and paper format.
PREVIOUS REPORTS/AUTHORITIES:
DSD -2022-251 — Manchester Road Formal Traffic Calming Review — Initiation Approval
APPROVED BY:
Justin Readman, General Manager, Development Services Department
ATTACHMENTS:
Attachment A — Manchester Road — Proposed Traffic Calming Plan
Page 45 of 46
Attachment A: Manchester Road — Proposed Traffic Calming Plan
Manchester Road: Nottingham Avenue to River Road East
Kr
{ y`' #2: Speed #4: Speed
Hump
Hump
Lr MPMUFst LR
C
rD
#1: Speed #3: Speed #5: Speed o
Hum Hum Hum CU
Q
M
1. Speed hump located between #144 and #150 Manchester Road
2. Speed hump located at the intersection of Wedgewood Drive
3. Speed hump located between #262 and #268 Manchester Road
4. Speed hump located between #336 and #364 Manchester Road
5. Speed hump located between #424 and #430 Manchester Road
Page 46 of 46