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HomeMy WebLinkAboutFin & Corp Svcs - 2007-04-23FINANCE & CORPORATE SERVICES COMMITTEE MINUTES APRIL 23, 2007 CITY OF KITCHENER The Finance and Corporate Services Committee met this date, commencing at 12:30 p.m. Present: Councillor J. Smola -Vice Chair Councillors G. Lorentz, C. Weylie and K. Galloway. Mayor C. Zehr and Councillor J. Gazzola were in attendance for part of the meeting. Staff: C. Ladd, Chief Administrative Officer P. Houston, General Manager, Financial Services & City Treasurer R. Browning, General Manager, Development & Technical Services A. Pappert, General Manager, Community Services T. Speck, General Manager, Corporate Services D. Quinn, Director of Utilities D. Mansell, Director of Engineering S. Turner, Director of By-law Enforcement S. Adams, Director of Community & Corporate Planning R. Regier, Executive Director of Economic Development L. Lynch, Manager of Engineering Infrastructure F. McCrea, Assistant City Solicitor P. Harris, Manager of Licensing J. Billett, Committee Administrator 1. CRPS-07-053 -REQUEST FOR SALE OF FOOD AND SOUVENIRS - ALL TOURNAMENTS ON CITY SPORTSFIELDS The Committee considered Corporate Services Department report CRPS-07-053, dated April 16, 2007 concerning multi-organization requests for permission to sell food and souvenirs on City-owned lands. On motion by Councillor C. Weylie - it was resolved: "That approval be granted to sports organizations that are holding tournaments, during the months May through November, 2007 and have received Field Rental Permits/Contracts from Community Services at the sports fields listed on Schedule `A' attached to Corporate Services Department Report CRPS-07-053; to run a concession which may include the sale of hamburgers, hot dogs, pop, water, packaged foods, etc. as well as souvenirs, provided the necessary licence, including Health and Fire approval, is obtained." 2. CRPS-07-054 -REQUEST FOR VARIOUS EVENTS IN THE DOWNTOWN DURING 2007 The Committee considered Corporate Services Department report CRPS-07-054, dated April 16, 2007 concerning licence approvals for various events to be held in the Downtown during 2007 and declaration of Community Festivals. On motion by Councillor C. Weylie - it was resolved: "That the request for the sale of food and/or merchandise on City property during various events being conducted from June to December 2007, listed on Schedule `A' of Corporate Services Department report CRPS-07-054 be approved, provided the necessary licences are obtained, including Health and Fire approval; and, That the request for an exemption from Chapter 450 (Noise) of the Municipal Code for the events listed on Schedule `B' of report CRPS-07-054 be granted; and further, That the request for permission to sell alcohol on City property for the events listed on Schedule `C' of report CRPS-07-054 be granted and be declared "Community Festivals" for the purpose of applying for a liquor licence." FINANCE & CORPORATE SERVICES COMMITTEE MINUTES APRIL 23, 2007 - 95 - CITY OF KITCHENER 3. DTS-07-061 -EXTENSION OF PURCHASE ORDER FOR CONSULTANTS - JOSEPHIGAUKELIVICTORIA PARK ENTRANCE RECONSTRUCTION PROJECT The Committee considered Development and Technical Services Department report DTS-07- 061, dated April 18, 2007 concerning the extension of existing purchase orders for the Joseph/Gaukel/Victoria Park Entrance Reconstruction project. On motion by Councillor C. Weylie - it was resolved: "That in accordance with Council's approval of additional funding for remedial environmental clean-up at 44 Gaukel Street, and for the completion of the Joseph Street, Gaukel Street, Richmond Street and Victoria Park Entrance Feature, all Purchase Orders for engineering consultants MTE Consultants Inc., and sub-consultants engaged in these projects be extended accordingly." 4. CRPS-07-055 -CONSENT FOR FOOD SERVICE SUB-LET ARRANGEMENT - WATERLOO REGIONAL CHILDREN'S MUSEUM The Committee considered Corporate Services Department report CRPS-07-055, dated April 20, 2007 concerning a request by the Waterloo Regional Children's Museum for consent to enter into asub-let arrangement for provision of a food service component at the Museum. Mr. T. Speck advised that the Museum wishes to introduce an on-site food service component to be operated either by themselves or by a third party secured through a Request for Proposal (RFP). Pursuant to provisions in their lease agreement with the City, the Museum is asking for Council's consent in advance in the event it is decided to secure a separate operator for the food service component. Mr. Speck advised that the Museum has an outstanding loan with the City in the amount of $242,230., which at this time they are unable to repay, and is pursuing the food service component as an option to improve their financial position. He further advised that should consent be granted to enter into asub-let arrangement, same would be subject to a number of conditions as outlined in the staff report. On motion by Councillor G. Lorentz - it was resolved: "That the City consents to a sublet arrangement for the provision of a food service component at the Waterloo Regional Children's Museum premises, leased at 10-22 King Street West, should a separate operator be secured through an RFP process, to be located in the former toy store space located near the main entrance, under the terms and conditions set out in Corporate Services Department report CRPS-07-055." 5. FIN-07-056- NATURAL GAS RATES The Committee considered Financial Services Department report FIN-07-056, dated April 16, 2007 recommending increases in natural gas rates to reflect rising costs in supply, transport and delivery to Kitchener Utilities' customers. Mr. D. Quinn advised that the combined impact of the supply, transportation and delivery rate changes will be approximately $58. per year (4.8%) for the average residential customer, dependent on their consumption levels. He added that rate increases are in keeping with the City's past practices toward cost recovery, in matching rates set by other regulatory authorities for transportation and delivery services to the southwest area. Mayor C. Zehr and Councillor J. Gazzola entered the meeting during Mr. Quinn's presentation. Councillor J. Gazzola questioned how the proposed rate increases compare to estimates used in recent budget deliberations and Mr. Quinn responded that the budget figures closely reflect what is proposed this date. Mr. Quinn noted that budget estimates are "weather normalized", a process which takes into consideration consumption based on normal weather patterns and applies an expected rate. He noted that a warmer than normal winter was experienced in 2006, some of the impact of which has been off-set in the 2007 budget estimates in FINANCE & CORPORATE SERVICES COMMITTEE MINUTES APRIL 23, 2007 - 96 - CITY OF KITCHENER 5. FIN-07-056- NATURAL GAS RATES tCONT'D) anticipation of a return to more normal weather patterns and consumption. He added that significant changes in the Utility's profile also occurred in 2006 with the loss of a major consumer, Michelin, representing an approximate 5% reduction in consumption. Councillor Gazzola questioned if the rates could be raised by a lesser amount than 4.8%. Mr. Quinn responded that the rates have been set in accordance with past practice of matching rates approved by the Ontario Energy Board for Union Gas in the southern delivery area. He added that the last significant increase in rates was implemented three years ago and if measured over the past three year period, the proposed increases are comparable to the rate of inflation. Councillor Gazzola requested clarification as to why the fixed charges are increasing. Mr. Quinn pointed out that a large part of the Utility's portfolio is at fixed prices and in times of warmer weather profitability is at risk because of lower than average consumption. He reiterated that the proposed increases are consistent with the City's past practice of cost recovery; however, if directed by Council a change could be made. Mayor C. Zehr pointed out that the City's cost recovery practice is in keeping with arrangements negotiated with the Ministry of Energy at the time of industry de-regulation, which allowed Kitchener to continue operating as a gas distributor and was of the opinion the integrity of same should be maintained. On motion by Mayor C. Zehr, the staff recommendation contained in report FIN-07-056 was brought forward for consideration to approve natural gas rate increases as recommended by the administration. Councillor J. Gazzola spoke in opposition to the motion as it was his opinion that a lower rate increase could be imposed without adverse impact to the budget and thereby, help mitigate overall tax increases to the public. Mayor C. Zehr commented that the City's rates are among the lowest in the Province while at the same time returning dividends to the shareholders (i.e. taxpayers) and disagreed that an adjustment in the proposed rate increases would not have an adverse impact given they are already built into the City's approved budget. Councillor J. Gazzola requested to be recorded as opposed to the following motion. On motion by Mayor C. Zehr - it was resolved: "That the supply component of the natural gas rates be increased to 31.3 cents per cubic meter from 29.9 cents per cubic meter for system gas customers of the City of Kitchener effective May 1, 2007; and, That the transportation component of the natural gas rates be increased to 3.887 cents per cubic meter from 3.5213 cents per cubic meter for system gas customers of the City of Kitchener effective May 1, 2007 to reflect the interim rates charged by TransCanada Pipelines as previously approved by the National Energy Board; and further, That the delivery components of the natural gas rates be changed as proposed in Appendix A to Financial Services Department report FIN-07-056, for all Kitchener delivery customers effective May 1, 2007." 6. CAO-07-019 -PROPOSAL FOR A TOURISM DESTINATION MARKETING ORGANIZATION FOR WATERLOO REGION The Committee considered Chief Administrator's Office report CAO-07-019, dated April 18, 2007 requesting endorsement of establishing a Waterloo Region Tourism Marketing Corporation as outlined in a report from the CAO's of the Region entitled "A Destination Marketing Organization for Waterloo Region". FINANCE & CORPORATE SERVICES COMMITTEE MINUTES APRIL 23, 2007 - 97 - CITY OF KITCHENER 6. CAO-07-019 -PROPOSAL FOR A TOURISM DESTINATION MARKETING ORGANIZATION FOR WATERLOO REGION tCONT'D) Ms. C. Ladd advised that area CAO's and the tourism industry have worked together for the past two years culminating in a formal proposal to create a Tourism Marketing Corporation for Waterloo Region. The focus of the new organization would be on marketing tourism opportunities in the Region, attracting visitors to the area and encouraging them to stay for longer periods of time. The model recommended is a membership-based, not- for- profit organization, governed by a Board of Directors, and is structured in similar manner as to the Canada's Technology Triangle (CTT). It was noted that a three year (2008-2010) funding commitment is requested, based on municipal grants ($600,000. annually), membership fees, partnerships and municipal/partner in-kind services; however, as establishment of the organization would take place mid-year, municipal grant contributions are estimated at $300,000. in 2007. The City of Kitchener's contribution will be $90,000. per year starting in 2008 and $45,000. in 2007. Ms. Ladd noted that the City currently spends approximately $200,000. per year on tourism and staff anticipate diverting a portion of these funds to the new organization. She added that under this model municipalities will continue to fund and operate Visitor Information Centres, offering services and programs including tourism literature and in- person travel counselling. In this regard, Ms. Ladd advised that a detailed review of K-W Tourism is planned to determine how it may function within the new structure with a subsequent report to come forward for Council's consideration. In response to questions raised by Councillor J. Gazzola, Ms. Ladd explained the difference between a destination marketing program and Visitor Information Centres, noting that the former involves marketing and advertising programs, such as production of tourism literature and attendance at trade shows. The latter would include an information website, 1-800 number and travel consultations with walk-in tourists. She added that the website encompasses both aspects in that, it will contain information generated by the marketing program and will act as a conduit for the tourist to the tourism organization. Ms. Ladd advised that funding details under the new structure is yet to be determined as to how it would be split between destination marketing and Visitor Information Centres. She noted that under the existing program no specific dollar amounts are applied to either but suggested details of K-W Tourism's budget could be provided to give indication as to how the $200,000. has been expended. Councillor Gazzola suggested that the review of K-W Tourism should take place prior to a decision on the new structure. Ms. Ladd advised that a decision to separate Visitor Information Centres was made only recently, with some background information having been compiled to date. She stated that more needs to be done in determining how the Centres will operate in the future, such as exploring partnership opportunities with other area municipalities. She added that the Steering Committee and industry representatives concluded that it would be preferable for the new organization to start with the destination marketing program and build on that aspect in its first three years, following which operation of the Visitor Information Centres would be re-visited to determine if it is feasible to be included under their operation. Councillor Gazzola asked for clarification of municipal funding arrangements and Ms. Ladd advised that each of the three municipalities in the Region are contributing $90,000. annually, and the rural townships $30,000. of which the Townships of Woolwich and Wilmot will each contribute $10,000. and the Townships of North Dumfries and Wellesley will each contribute $5,000. Councillor Gazzola enquired if a business plan has been prepared and Ms. Ladd advised that two previous reports were considered by Council, the latter of which had the original business case attached. She stated that a more detailed business case was subsequently prepared by the consultant, a summary of which was attached to the report this date, and agreed to provide a full copy to members of Council. Councillor Gazzola questioned if the private sector was contributing enough, suggesting that they would benefit the most while municipalities are expected to pay upwards of 50% of the cost. Ms. Ladd agreed to request a breakdown of anticipated investment returns from the consultant but suggested that benefits accrued in the private sector will also have positive effects on the municipal economy. Councillor G. Lorentz questioned how successes will be tracked and Ms. Ladd advised that once established, the new organization would develop performance measures to determine its achievements. Councillor Lorentz questioned if all area municipalities are in support of the proposed new structure. Ms. Ladd noted that in 2006 a preliminary proposal was supported by all area Councils and what is now being brought forward is the formal proposal to establish FINANCE & CORPORATE SERVICES COMMITTEE MINUTES APRIL 23, 2007 - 9$ - CITY OF KITCHENER 6. CAO-07-019 -PROPOSAL FOR A TOURISM DESTINATION MARKETING ORGANIZATION FOR WATERLOO REGION tCONT'D) the new tourism organization. She advised that this is the first presentation, with subsequent presentations to be made to all other area municipalities over the next two to three weeks at which time it will be known if there is unanimous support going forward. Mayor C. Zehr enquired if a comparison of tourism dollars spent in other municipalities of like size has been conducted. Ms. Ladd advised that the consultant had undertaken a survey of other municipalities having some form of a formal tourism program and considerable discussion was undertaken as to an appropriate starting point for the proposed organization. The amount recommended is considered modest being less than that of other municipalities surveyed and Ms. Ladd agreed to provide this information to members of Council. Councillor G. Lorentz enquired as to the Region of Waterloo's contribution and was advised that the Region will contribute approximately $300,000. per year. Councillor Lorentz noted that this initiative is being promoted as a Regional strategy and questioned if consideration had been given to the Region funding the entire program. Ms. Ladd advised that there had been no discussion in this regard pointing out that all municipalities had come as partners to the discussions. On motion by Mayor C. Zehr, the staff recommendation in report CAO-07-019 was brought forward for consideration to endorse establishment of a tourism marketing organization. Mayor C. Zehr commented that while tourism is a split responsibility between upper and lower tier municipalities, the issue of Regional responsibility has been discussed on many occasions but has not happened because some municipalities prefer that it not be under one jurisdiction. It was his opinion that it should be and he hoped that in time that is how it would evolve. He noted that this is at least the third attempt in arriving at a potential solution, with this model being the best having come forward and he hoped that it would be supported by all municipalities. He stated that a consolidated approach is needed in advancing tourism in the area and suggested that K-W Tourism would fit in well with the new structure. Mayor Zehr cautioned that if not supported, it is not likely that this kind of initiative would be looked at again for some time as there would be no desire to start over. Councillor G. Lorentz questioned timing for review of the program and Ms. Ladd advised that a full review is intended after the first three years of operation at which time it is anticipated that the organization will have developed a solid ground on which to be evaluated. It was pointed out that the municipal grant funding will remain constant over the three year period while the industry's contributions may increase as they gain confidence in the new structure. Councillor Lorentz expressed support for the proposal as a good starting point but maintained responsibility for funding should be that of the Region as this initiative benefits the community at large. He asked that in the event not all municipalities support this approach what the next steps would be and Ms. Ladd advised that the Steering Committee preferred to wait until the outcome is known before considering subsequent action. Councillor J. Gazzola advised that he was supportive of the concept of a combined approach to tourism but could not support the recommendation as proposed. He noted that the City has traditionally out-sourced tourism, expressing a desire to have seen details of the review of K- WTourism prior to making a decision and was of the opinion the proposed model was somewhat different from CTT in terms of mandate and how they operate. He agreed that tourism should be under one jurisdiction, noting that the new organization is being promoted as Regional. On motion by Mayor C. Zehr - it was resolved: "That the Council of the City of Kitchener endorse the establishment of The Waterloo Region Tourism Marketing Corporation as set out in a report from the Municipal Chief Administrative Officers in Waterloo Region entitled "A Destination Marketing Organization for Waterloo Region, April 2007", as attached to Chief Administrator's Office report CAO- 07-019." FINANCE & CORPORATE SERVICES COMMITTEE MINUTES APRIL 23, 2007 - 99 - CITY OF KITCHENER 7. ADJOURNMENT On motion, the meeting adjourned at 1:20 p.m. Janet Billett Committee Administrator