HomeMy WebLinkAboutFin & Corp Svcs - 2007-05-28FINANCE & CORPORATE SERVICES COMMITTEE MINUTES
MAY 2$, 2007 CITY OF KITCHENER
The Finance and Corporate Services Committee met this date, commencing at 1:40 p.m.
Present: Councillor B. Vrbanovic, Chair
Mayor C. Zehr and Councillors J. Gazzola, G. Lorentz, J. Smola, K. Galloway and C.
Weylie.
Staff: P. Houston, General Manager, Financial Services & City Treasurer
A. Pappert, General Manager, Community Services
T. Speck, General Manager, Corporate Services
L. MacDonald, Director of Legal Services & City Solicitor
R. Gosse, Director of Legislated Services & City Clerk
D. Chapman, Director of Financial Planning & Reporting
J. Willmer, Director of Planning
R. Regier, Executive Director of Economic Development
S. Adams, Director of Community & Corporate Planning
P. Harris, Manager of Licensing
L. Baillargeon, Manager of Asset Optimization
J. Billett, Committee Administrator
1. CRPS-07-070 -REQUEST TO EXTEND ADULT ENTERTAINMENT PARLOUR CLASS `E'
LICENSES
- ROXANNE'S BAR & GRILL AND 2027625 ONTARIO LTD. (THE DOLL
HOUSE)
The Committee considered Corporate Services Department report CRPS-07-070, dated May
17, 2007 concerning extension of temporary Adult Entertainment Parlour Class `E" licences.
On motion by Councillor K. Galloway -
it was resolved:
"That temporary Class E -Adult Entertainment Parlour Licences for Roxanne's Bar &
Grill located at 1271 Victoria Street North and 2027625 Ontario Ltd. located at 6 Bridge
Street West be extended until June 30, 2007."
2. CRPS-07-063 -DOG DESIGNATION APPEAL COMMITTEE -PROPOSED AMENDMENTS
TO CHAPTER 530 tDOGS) OF THE MUNICIPAL CODE
The Committee considered Corporate Services Department report CRPS-07-063, dated May
1, 2007 concerning amendments to Chapter 530 (Dogs) of the Municipal Code.
On motion by Councillor K. Galloway -
it was resolved:
"That in accordance with the March 23, 2007 Ontario Superior Court of Justice
Decision, Chapter 530.1.20 (Pit Bull dog -defined) of the City of Kitchener Municipal
Code be amended to read as follows:
530.1.20 Pit Bull dog -defined
"Pit Bull dog" means a dog of any age which has the appearance and physical
characteristics predominantly conforming to the standards for any of the following
breeds, as established by the Canadian Kennel Club or the American Kennel Club
or the United Kennel Club as set out in Schedule `C', and determined by the
Poundkeeper, namely:
(a) American Pit Bull Terrier;
(b) Staffordshire Bull Terrier, except a Staffordshire Bull Terrier which is registered
with the American Kennel Club or the Canadian Kennel Club; or,
(c) American Staffordshire Terrier, except an American Staffordshire Terrier which
is registered with the American Kennel Club or the Canadian Kennel Club; and
further,
That Chapter 530 (Dogs) be amended to incorporate the breed standards set out in
Schedule `C', as attached to Corporate Services Department report CRPS-07-063."
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3. PRESENTATION -KITCHENER PUBLIC LIBRARY (KPL) BUSINESS CASE
- RADIO FREQUENCY INDENTIFICATION (RFID) & AUTOMATED
CHECK-IN PROJECTS
The Committee considered a report by the Kitchener Public Library (KPL), dated May 22,
2007, and attached Business Case, concerning their proposal to invest in Radio Frequency
Identification (RFID) technology and an Automated Check-in system.
Mr. Dan Carli, Chair, KPL Board and Ms. Sonia Lewis, KPL -CEO, presented details of the
business case, advising that the library currently has a collection of over 620,000 books, CDs,
DVDs and other resources which is expected to grow by 30% over the next 5 years. Mr. Carli
stated that current staffing and technology is not sufficient to handle the increasing volume
and accordingly, an investment in new technology is proposed to manage the impending
growth. RFID will provide one step check-out of materials and an automated check-in will pre-
sort materials, resulting in fewer steps and less materials handling. The technology is
expected to increase customer satisfaction, optimize operations and improve health and safety
issues. Implementation is proposed between 2008 and 2011 at all 5 KPL locations, providing
service enhancement throughout the community. The cost of implementation is estimated at
$1.6M and it is proposed to use $155,000 of unexpended funds from the Country Hills
Community Library project, $1 M of existing capital from current approved in the 10 year
Capital Forecast and $450,000 of new capital from current in 2012. The total funding is to be
phased in over 5 years from 2008 to 2012. The total impact to the operating budget from
2009 to 2012 is projected at $161,000, which is substantially less than the cost of adding full
time staff to handle higher volumes of activity.
Councillor C. Weylie inquired as to the impact of using the unexpended funds from the
Country Hills Community Library (CHCL) project. Mr. Carli advised that the funds were
originally targeted for additional furniture and equipment; however, the RFID technology is
considered a higher priority and having adequately addressed immediate needs at the CHCL,
it is proposed to use the unexpended funds to purchase the new technology. Councillor
Weylie noted that the Waterloo Public Library is going through a similar process and inquired
as to the feasibility of the two libraries working together. Ms. S. Lewis advised that
discussions were held with Waterloo, however, their project was at an advanced stage and
with KPL's project not yet approved, Waterloo proceeded to tender in 2006. Ms. Lewis added
that it is unlikely any savings would have been realized as this is not a centralized system and
therefore, equipment cannot be shared; however, she suggested there may be potential for
group purchasing of the security tags. Mr. Carli advised that the annual savings in staff equate
to 5 full time employees that would be required over the next 5 years if the new technology is
not installed.
In response to Councillor G. Lorentz, the delegation advised that the City of Cambridge is not
currently pursuing RDIF technology. Mr. Carli added that the technology is well proven and is
being used in other municipalities as well as in local Universities.
Councillor J. Gazzola inquired as to why the additional costs were not presented during the
2007 budget discussions. Ms. Lewis advised that this is a 2 phase project, with funding
already approved in the capital budget for the first phase involving technology for an
automated check-out system at the main library. The second phase requires new funding for
an automated check-in system and in discussion with City staff, it was determined to combine
both phases in this business case which was flagged for the 2008 budget deliberations.
Councillor Gazzola inquired as to the potential to combine with the City of Waterloo in use of
the software and was advised that the software does not lend itself to centralized sharing as it
is installed on individual PC desktops. Councillor Gazzola requested clarification of the
projected operating costs and was advised that in 2009 the operating costs as shown are
substantially higher as they relate to the main library and beyond 2009, they vary according to
the size and collection of the branches being added to the system. Mr. Chapman also pointed
out that the figures shown are incremental costs of implementing the new technology and are
not reflective of overall library operating costs.
Councillor Gazzola raised concerns that the business case does not provide enough
information relative to staff savings. Mr. Carli stated that savings will be seen in cost avoidance
of hiring new staff and Ms. Lewis added that staffing costs are only one of the projected
FINANCE & CORPORATE SERVICES COMMITTEE MINUTES
MAY 2$, 2007 -10$ - CITY OF KITCHENER
3. PRESENTATION -KITCHENER PUBLIC LIBRARY (KPL) BUSINESS CASE
- RADIO FREQUENCY INDENTIFICATION (RFID) & AUTOMATED
CHECK-IN PROJECTS tCONT'D)
savings, noting that the system will allow better control of inventory in providing security
against loss of materials.
Mayor C. Zehr inquired if at some time in future the CHCL unexpended funds would be added
back into the capital forecast for what they were originally intended to purchase. Ms. Lewis
stated that these items were not essential and if proceeded with would come back as part of
the library's ongoing operating budget. She added that part of the unexpended funds was
intended to be used for technology.
At the request of Mayor Zehr, the delegation agreed to provide further information prior to the
June 11, 2007 Council meeting as to how the number of FTE's required in the event the
technology is not installed was derived.
Councillor Gazzola requested a breakdown of expenditures relative to the $1.6 M and in
particular, as it would relate to consultant fees and the cost of equipment /software. Ms.
Lewis pointed out that expenditure details are outlined in the business case, noting that this
project does not require consulting assistance and the cost of the security tags contributes
significantly to the overall project costs.
The following motion was Carried Unanimously.
On motion by Councillor G. Lorentz -
it was resolved:
"That the Kitchener Public Library's Business Case for the RFID (Radio Frequency
Identification) and Automated Check-In Projects be approved; and,
That the RFID project be funded as follows:
• $1,000,000 -allocation for radio frequency technology (2008-2011) in the
approved ten-year capital forecast; and,
• $155,000 -unexpended capital funding from Country Hills Library capital
account; and further,
That the consideration of an additional $450,000 of capital from current funding for
automated check-in technology in 2012 be referred to the 2008 budget process."
4. CRPS-07-066 -LICENSING HEARING - CAZA BACHA SPA
- 195 VICTORIA STREET NORTH
The Committee considered Corporate Services Department report CRPS-07-066, dated May
14, 2007 concerning refusal of a licensing application to operate an alternative massage
centre.
Ms. P. Harris advised that since writing of the staff report the business in question has closed
but requested that the recommendation be passed as a matter of record.
On motion by Councillor J. Gazzola -
it was resolved:
"That the Manager of Licensing's decision to refuse the application of Jamilah Sulema
Musein to operate an alternative massage centre at 195 Victoria Street North,
Kitchener, Ontario be confirmed."
5. CRPS-07-06$ -COUNCIL POLICY 1-$75 -LOTTERY-BINGO REGULATIONS
The Committee considered Corporate Services Department report CRPS-07-068, dated May
16, 2007 concerning amendments to Council Policy I-875 (Lottery -Bingo Regulations).
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5. CRPS-07-06$ -COUNCIL POLICY 1-$75 -LOTTERY-BINGO REGULATIONS tCONT'D)
Ms. P. Harris advised that the Alcohol and Gaming Commission of Ontario (AGCO) introduced
a new Bingo Lottery Revenue Model on May 1, 2007 which is significantly different from the
previous model. Accordingly, amendments to Council Policy I-875 are required to conform
with the new model.
Ms. Harris responded to questions advising that under the new model, hall operators receive
55% of all revenue while charities receive 45% and it is the hope of the Province that with
other changes that have been made to the revenue model the charities will not lose any of
their current revenue. She added that the addition of a pilot project to allow hall operators to
apply for liquor licences came as a surprise as it was the City's initial understanding that this
was not going forward. Ms. Harris advised, however, that hall operators must first notify the
City prior to making application for a liquor licence at which time the City would have
opportunity to make comment to the AGCO.
On motion by Mayor C. Zehr -
it was resolved:
"That City of Kitchener Council Policy I-875 (Lottery-Bingo Regulations) be amended to
reflect the recent changes to the Alcohol and Gaming Commission's Terms and
Conditions for Bingo Lotteries, dated May 1, 2007."
6. FIN-07-05$- 200$ BUDGET PROCESS AND 3 YEAR FINANCIAL PLAN
The Committee considered Financial Services Department report FIN-07-058, dated May 10,
2007 concerning the 2008 budget process and 3 year financial plan.
Mr. D. Chapman advised that staff is seeking direction with respect to key elements of the
2008 budget plan which will form the basis of the budget call to all City Departments and local
Boards in June. In addition, it is intended to move forward with development of a 3 year
financial plan as proposed at the April 30 Strategic Planning Session. The process will
include: budget preparation from June to September 2007; business plan overview in
September to prioritize initiatives in support of the City's strategic themes and consider
potential for service level or program reductions; and compilation of detailed 3 year
Department business plans between October 2007 to January 2008. A decision is not being
requested at this time on multi-year operating budget targets pending review of strategic
initiatives and reductions, and strategic themes provided at this time are intended for
illustrative purposes only. Public engagement is recommended to occur earlier in the process
at the direction setting stage and use of an ongoing citizen survey or focus groups are
suggested to ensure a response that is representative of the community at large. A
communication plan is to be developed to ensure the public remains informed and involved in
the budget process and a special budget public input session is recommended to be held
between the business plan overview in September and budget deliberations beginning in
November. Proposed timelines for the 2008 budget process were provided, however, Mr.
Chapman pointed out that the meeting dates are subject to finalization of the 2008 Council /
Committee meeting schedule. It was also noted that the meeting date for the business plan
overview has been changed from September 24 to September 17, 2007 to coincide with
Council's strategic planning session of the same date.
The 2008 projection shows a levy increase of 5.47% before EDIF (Economic Development
Investment Fund) and 6.72% including EDIF, which is the highest annual increase projected
over the next 10 years and is due in large part to increased operating costs associated with
construction of the new Fire Station No.7. Mr. Chapman advised that staff is requesting
direction in the following key areas having significant impact on the initial budget direction for
City Departments and local Boards, including:
• Operating budget provisions related to capital facilities and growth -allocations are
sought for increased operating costs associated with construction of the new Fire
Station No.7 and Twin Pad facility, and implementation of the new Financial and
Infrastructure Management Systems; provision for growth-related increase in the
capital-out-of-current contribution consistent with Council's funding policy; and annual
FINANCE & CORPORATE SERVICES COMMITTEE MINUTES
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6. FIN-07-05$- 200$ BUDGET PROCESS AND 3 YEAR FINANCIAL PLAN tCONT'D)
provision for operations to service growth, with an additional $150,000. deferred from
the 2007 operating budget, to fund all FTE's in Operations;
• Base inflation -the tax rate projection includes base inflation at 3% per year across the
10 year period;
• Strategic Initiatives -notional provision of 0.5% of the levy (approximately $400,000) is
set aside for initiatives in support of the City's strategic themes.
Mr. Chapman identified other areas having potential impact on the budget, being: conversion
of Parking Operations to a fully funded enterprise; contract negotiations with the Kitchener
Professional Fire Fighters Association (KPFFA); and outcome of the review of Planning and
Development application process and fee review. It was noted that Appendix D provides
options for potential reductions in the proposed tax levy, including a proposal to increase user
fees beyond the rate of inflation up to a maximum of 6%. The latter is being recommended to
form part of the initial guidelines for purposes of preparing 2008 budgets.
Councillor J. Gazzola raised concerns with the suggested focus groups and Mr. Chapman
advised that the intent is to put together a citizen group that is representative of the
demographic/geographic community to be facilitated by a neutral third party. Councillor
Gazzola inquired as to the Consumer Price Index (CPI) rate of inflation and was advised that
the current CPI is around 2%. Councillor Gazzola then inquired as to the status of the report
on the parking enterprise and Mr. Chapman advised that before going forward an
understanding of the Centre Block business case and Charles/Water Street site is necessary
in order to refine assumptions pertaining to the parking enterprise. Councillor Gazzola
requested explanation of the strategic theme, Quality of Life, which references operating costs
to support the Kingsdale Community Centre expansion. Mr. Chapman stated that this is only
one of a number of illustrative examples of strategic initiatives for potential review as part of
the business plan overview in September.
In response to Mayor C. Zehr, Mr. Chapman advised that a true projection of assessment
growth should be known prior to the operating budget deliberations in January 2008. He also
provided clarification of Appendix C as it relates to User Fees, noting that it demonstrates
inflationary pressures only and that the overall projected increase of 6% includes the base
inflation rate of 3%.
Mayor Zehr expressed support for undertaking focus group sessions as a means to obtain
comment from across-section of the City. He added that much more work lay ahead in
reducing the projected tax levy to a reasonable level, and it was his opinion that no one,
including himself, could support the current projected increase of 6.72%.
In response to Councillor B. Vrbanovic, Mr. Chapman gave assurances that staff will be
looking at identifying user fee increases that may require some subsidization for those who
may find it difficult to afford higher fees.
On motion by Mayor C. Zehr, the staff recommendation in report FIN-07-058 was brought
forward for consideration.
At the request of Councillor J. Gazzola, Clauses 1 and 5 of the motion were voted on
separately.
Councillor Gazzola was opposed to Clause 1, dealing with convening focus group meetings,
as he questioned their value and the associated costs to hire a consultant. He suggested that
the proposed public input session would be sufficient and could be adequately handled by
staff.
Mayor Zehr and Councillor Vrbanovic spoke in support of Clause 1, reiterating that focus
groups provide opportunity to obtain input from across-section of the community and could
serve as a good testing ground for consideration of potential service cuts.
Clause 1 of the motion was then voted on and Carried.
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6. FIN-07-05$- 200$ BUDGET PROCESS AND 3 YEAR FINANCIAL PLAN tCONT'D)
Councillor Gazzola spoke in opposition to Clause 5 of the motion, dealing with initial guidelines
for staff on which to base preparation of the 2008 budget, expressing the opinion the
percentages are too high and it was his desire to have staff bring back a budget at or below
the CPI rate of inflation.
Mayor C. Zehr commented that a number of factors impact on the base levy, not all of which
equate to a tax increase and reiterated that he could not support the current projection of
6.72%.
Clause 5 of the motion was then voted on and Carried.
Councillor J. Gazzola expressed the hope that the timeline for budget discussions as outlined
in report FIN-07-058 would be adhered to without change. Councillor B. Vrbanovic pointed
out, however, that changes may be necessary as the proposed meeting dates are subject to
finalization of the 2008 Council /Committee meeting schedule.
It was noted in the agenda that any recommendation from the Committee regarding this matter
would be considered at the special Council meeting to be held later this date.
On motion by Mayor C. Zehr -
it was resolved:
"That staff be directed to convene representative focus group meetings between June
and August 2007 to identify/clarify potential priority areas for service level or program
reductions over the next three years; and,
That staff be directed to bring forward three-year operating budget projections for
strategic initiatives and service level or program reductions in September of 2007 to
align resources with community priorities (as represented in the City's seven strategic
themes); and
That staff be directed to submit three-year operating budget projections in conjunction
with 2008-2010 departmental business plans in early 2008; and,
That the 2008 budget meeting timetable outlined in staff report FIN-07-058 be approved
in principle, subject to finalization of the 2008 meeting schedule; and,
That the following initial guidelines be issued to staff as the basis for 2008 budget
preparation:
• Increase in fees and charges revenue 6.00%; and
• Impact of capital facilities and growth 3.55% of levy;
• Base inflation 3.00% of levy;
• EDIF 1.25% of levy;
• Provision for strategic initiatives 0.50% of levy; and further;
That staff be directed to monitor and report back on the potential 2008 budget impacts
of assessment growth, the 2007 operating surplus or deficit, the Parking Enterprise
business case, and the settlement of the KPFFA (Kitchener Professional Firefighters
Association) collective agreement."
7. CRPS-07-067 -COUNCIL COMPOSITION AND WARD REVIEW
The Committee considered Corporate Services Department report CRPS-07-067, dated May
18, 2007 concerning amendments to Council Policy I-50 (Ward Boundary -Criteria) and
consideration of pursuing a change in the size of Council.
Mr. R. Gosse advised that should Council wish to pursue further discussion on the size of
Council, staff is recommending a public consultation process be developed for implementation
in late August through September 2007, with a report on results to come forward in October
2007. He added that in accordance with Council's policy to undertake a ward review after
FINANCE & CORPORATE SERVICES COMMITTEE MINUTES
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7. CRPS-07-067 -COUNCIL COMPOSITION AND WARD REVIEW tCONT'D)
every third regular election, such review is required prior to the 2010 municipal election. In
preparation of this review, it is recommended that Council Policy I-50 be amended to provide
clear principles and guidelines for consideration and that Kitchener closely follow the
successful process previously undertaken by the City of Ottawa. Mr. Gosse further requested
that the matter of the size of Council be dealt with firstly as it will have a direct impact on the
focus for the ward review.
Councillor J. Gazzola questioned the feasibility of leaving the policy open to undertaking a
ward review as deemed necessary rather than after every third regular election. Mr. Gosse
stated that it is within Council's purview to direct a review at any time notwithstanding the
policy but by specifying a timeframe it ensures that a review is in fact undertaken at some
point in time. Councillor Gazzola requested that staff give further consideration to this matter
as three regular elections now equate to a 12 year window under the new 4 year Terms of
Office, whereas previously it was a 9 year window.
Mayor C. Zehr agreed that 12 years is too long a period prior to a review given the rate of
growth in this municipality. He suggested, and it was generally agreed, that the policy be
changed to require a review after every second regular election resulting in an 8 year window.
Councillors G. Lorentz, J. Gazzola and B. Vrbanovic spoke in support of the recommended
approach, commenting on the importance of undertaking a full public consultation on the issue
of the size of Council Councillor Gazzola expressed the opinion, however, that the issue of
the timing of a ward review should be further investigated by staff to allow examination of best
practices across the Province.
The following motion was Carried Unanimously.
On motion by Councillor G. Lorentz -
it was resolved:
"That staff undertake a process to solicit public comments/feedback on whether or not
to change the number of Councillors from the current six and report back to Council at a
public meeting to be held in October, 2007; and,
That Council Policy I-50 (Ward Boundary -Criteria) be replaced with the draft policy I-
50, dated May 28, 2007, attached to Corporate Services Department report CRPS-07-
067, as amended to provide that ward boundaries be reviewed after every second
regular election and the ward structure accommodate growth for at least 8 years; and,
That staff report in October 2007 on the ward review process to be based on Policy I-50
and the report to include the terms of reference for a Request For Proposal to retain the
services of a consultant to lead a public process, develop options and make final
recommendations for Council's consideration; and further,
That staff report in January 2008, with a recommendation of a consultant, a budget,
terms of reference and a timetable for the ward review process."
8. FIN-07-072- GAS DISTRIBUTION ACCESS RULE tGDAR) SERVICE AGREEMENT- FEES
The Committee considered Financial Services Department report FIN-07-072, dated May 21,
2007 concerning fees related to the Direct Purchase, Agent Billing Collection (ABC) and Gas
Distribution Access Rule (GDAR).
Ms. L. Baillargeon advised that GDAR is an initiative of the Ontario Energy Board (OEB) to
ensure natural gas distributors provide appropriate and non-discriminatory access to vendors
to facilitate competition in natural gas. The GDAR service agreement becomes effective June
1, 2007 at which time the OEB will assume responsibility over vendors in these matters but the
City will remain the rate-making authority for Kitchener Utilities. A portion of the related fees
was previously approved and these will be included in the service agreement along with new
fees as a result of GDAR requirements.
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8. FIN-07-072- GAS DISTRIBUTION ACCESS RULE (GDAR) SERVICE AGREEMENT- FEES
tCONT'D)
Ms. Baillargeon responded to questions, advising that the changes pertain to the vendor and it
is likely the vendor would pass any associated costs along to their customers. The ABC fee is
the City's charge to vendors for undertaking billing of the vendor's customers and the fees are
consistent with industry practice. Mayor C. Zehr commented that charging for billing the
vendor's customers is prudent as there is a cost to the City and the City should not be
subsidizing the vendor.
On motion by Councillor J. Smola -
it was resolved:
"That the Direct Purchase, ABC (Agent Billing Collection) and GDAR (Gas Distribution
Access Rule) related fees as proposed in the attached Appendix to Financial Services
Department report FIN-07-072, be approved in conjunction with the previously
approved GDAR Service Agreement for Gas Vendors of the City of Kitchener, effective
June 1, 2007."
9. ADJOURNMENT
On motion, the meeting adjourned at 3:20 p.m.
Janet Billett
Committee Administrator