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HomeMy WebLinkAboutFin & Corp Svcs - 2008-01-14 SFINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ CITY OF KITCHENER The Finance and Corporate Services Committee met in special session this date commencing at 10:00 a.m. Present: Councillor B. Vrbanovic -Chair Mayor C. Zehr and Councillors J. Smola, G. Lorentz, J. Gazzola, K. Galloway and C. Weylie. Staff: C. Ladd, Chief Administrative Officer P. Houston, General Manager, Financial Services & City Treasurer T. Speck, General Manager, Corporate Services R. Browning, General Manager, Development & Technical Services A. Pappert, General Manager, Community Services T. Beckett, Fire Chief L. MacDonald, Director of Legal Services & City Solicitor R. Gosse, Director of Legislated Services & City Clerk D. Chapman, Director of Financial Planning & Reporting J. Witmer, Director of Operations J. Willmer, Director of Planning R. Regier, Executive Director of Economic Development M. May, Director of Communications /Marketing S. Turner, Director of By-law Enforcement S. Adams, Director of Community & Corporate Planning D. Paterson, Director of Human Resources L. Proulx, Director of Facilities Management R. Upfold, Director of Accounting M. Selling, Acting Director of Building M. Grummett, Director of Information Technology G. Murphy, Director of Engineering J. McBride, Director of Transportation Planning D. Keehn, Interim Director of Aquatics & Athletics H. Gross, Director of Project Administration & Economic Investment K. Weiss, Director of Business Development L. Gordon, Director of Purchasing G. Hummel, Manager, Park Planning, Development & Operations D. Locke, Manager, Operational Support & Analysis G. Hastings, Manager, Golf Courses R. LeBrun, Manager, Financial Planning & Reporting L. Palubeski, Manager of Program & Resource Services S. Wright, Manager of Downtown Community Development C. Solcan, Senior Financial Analyst R. Willms, Supervisor of Administration J. Murphy, Customer Service Project Manager J. Billett, Committee Administrator 1. FIN-07-134 - 200$ OPERATING BUDGET The Committee was in receipt of Financial Services Department report FIN-07-134, dated December 10, 2007 concerning the City's 2008 Operating Budget, together with a consolidated budget summary by Department /Object and budget issue papers for specific items; and, Financial Services Department report FIN-08-011, dated December 20, 2007, containing Departmental Business Plans for 2007-2010. Ms. P. Houston provided an overview of the approach to budget preparation including strategic directions, key strategies and initiatives to increase efficiency and reduce costs. A ten-year comparison of the Household Consumer Price Index (CPI) vs. Municipal Price Index (MPI) was previously reviewed at the January 7 public consultation meeting on the 2008 budget, showing an increase of 2.3% and 3.7% respectively. A graph showing the same comparison over afive-year trend (2002-2007) was circulated this date, as requested at the January 7 meeting. Ms. Houston stated that the five-year graph looks quite different; however, municipal tax rate increases are still showing well within the MPI. She noted that continued use of the ten-year graph is preferred as it gives a longer term picture of what tax rates are doing. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 5 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) Councillor J. Gazzola commented that the new chart demonstrates that EDIF has raised the tax rate higher than the CPI; whereas, in the past, Council had endeavoured to remain at or below the CPI. Ms. P. Houston advised that in 2004 Council adopted a policy to strive for competitive, rational and affordable taxation levels, taking into consideration CPI / MPI and comparison to other municipalities. Councillor Gazzola suggested that the policy may need to be re-examined for future years given predictions of a possible recession. Councillor B. Vrbanovic disagreed, noting that Council has undertaken numerous initiatives over the past years to increase efficiencies and reduce costs in an effort to keep tax increases as low as possible and still operate effectively. A chart entitled "Typical Residential Property Taxes" was provided which offers a comparison of 2007 property taxes among municipalities with populations greater than 100,000. It was noted that Kitchener is the fourth lowest in respect to property taxes. At the request of Councillor J. Gazzola, Ms. Houston agreed to provide similar charts for past years 2004-2006. Ms. Houston also reviewed information circulated this date concerning a comparison of typical residential water and sewer charges for 78 municipalities, wherein the group average was $700. and Kitchener is $712. She commented that the City's rates remain very competitive despite significant recent increases in capital funding, which many municipalities have not yet begun to provide for in respect to infrastructure improvements. Ms. Houston provided an overview of the process leading to development of Departmental business plans, advising that each plan consists of background information; details of initiatives by theme together with initiatives /operational key performance indicators, timelines, budgets and annual updates; and links with other Departments. The General Managers of each Department provided highlights of their respective business plans, as outlined in report FIN-08-011. Ms. Houston advised that the DELTA project is to be in place in 2009 and gave assurances that any delay would not unduly impact other smaller initiatives. Ms. C. Ladd advised that each Department has established a process to work on results of the Employee Culture Survey which fully engages staff within each Department. In addition, she noted that a Corporate committee has been established to review issues of a corporate nature and has identified five initiatives for 2008. Ms. S. Adams advised that as the staff liaison, she assists in vetting issues related to Employee Culture Survey through the Employee Advisory Committee. Mr. R. Browning advised that administrative positions in the Development & Technical Services Department, exclusive of Fire Services staff, were re- organized into one cohesive unit to co-ordinate work as a whole and also serve as support for field projects. On motion by Councillor C. Weylie - it was resolved: "That the City of Kitchener Strategic Plan -Departmental Business Plans (2007-2010) be received for information." Mr. D. Chapman then reviewed the proposed 2008 tax levy of 6.37% exclusive of any proposed additions or reductions, noting that the value of 1 % in the operating budget is equal to $840,604. Mr. Chapman pointed out that the base increase is at 2.39%, which is lower than the 3% proforma projection; and is a result of efficiencies in process and departmental reductions identified by staff. BOARDS Mr. D. Chapman presented the proposed operating budgets for the Centre in the Square (CITS) and Kitchener Public Library (KPL), at 3% and 4.2% increases respectively. Mr. Chapman advised that KPL's budget request is over the 3% budget call target by $93,680. and Issue Paper #21 is provided for explanation. He added that Issue Paper #1 requests an FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 6 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) additional $20,750. for KPL's operating budget to accommodate a 0.5 FTE for the Forest Heights Community Library. Mr. J. Grant, General Manager, CITS and Mr. Dan Carli, Chair and Ms. Sonya Lewis, CEO - KPL, were in attendance to support their respective budget requests. The KPL delegation advised that the 2 largest operating expenses relate to resource materials and salaries /benefits. In respect to using volunteers rather than hiring a 0.5 FTE for the Forest Heights branch, Ms. Lewis advised that volunteers are primarily assigned to special projects as opposed to daily administrative work. Mr. Carli advised that despite being a free service there is need to promote programs and events to raise community awareness; and while KPL may benefit in 2008 from the strengthening dollar, he pointed out that there is a 6-9 month lag between the time prices are set and books are sold. Councillor J. Gazzola raised concerns that savings resulting from KPL's Radio Frequency Identification (RFID) project is not shown in the budget. Mr. Carli advised that the anticipated savings relate to cost avoidance in future staffing needs. The delegation added that if the additional funding as requested is not approved, cuts to resource materials and / or salary budgets will have to be considered by the Library Board and may have impact to service delivery. Mayor C. Zehr questioned if promotional materials relative to the library is published in the Your Kitchener newsletter. Mr. M. May advised that traditionally the publication has not been used to promote direct services and cautioned against setting precedence given the potential for other requests. Mayor Zehr requested that staff further investigate the feasibility of using the newsletter to assist in promotion of library services. On motion by Councillor G. Lorentz - it was resolved: "That the 2008 Operating Budget for the Centre in the Square be approved at $1,319,000. in 2008, representing a 3% increase over 2007." On motion by Mayor C. Zehr - it was resolved: "That an additional $93,680. over the 3% budget call target for 2008 Operating Budget of the Kitchener Public Library be approved in 2008, to ensure continuation of the current level of library service to the community." On motion by Councillor G. Lorentz - it was resolved: "That an additional $20,750. be approved for the 2008 Operating Budget of the Kitchener Public Library in 2008, to accommodate a 0.5 FTE staffing request for the Forest Heights Community Library." The result of the above motions concerning the library is approval of a 2008 Operating Budget for the Kitchener Public Library of $8,415,750. in 2008, representing a 4.4% increase over 2007. ENTERPRISES Doon Golf Course Mr. D. Chapman advised it is projected that the 2007 budget will come in as planned. He further advised that the proposed 2008 budget will see a slight decrease in the total gross profit which is due to the expansion project currently underway. Mr. G. Hastings advised that green fees will increase by 6% in 2008 and the canteen budget is being increased as a result of inflation and efficiencies. He further advised that in 2007 there were approximately 41,000 rounds of golf played which are approximately 1,800 more rounds than the previous year. In FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 7 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) answer to questions raised regarding replacement of the gas golf carts, Mr. Hastings advised that in 2008 the carts will be replaced with gas carts until the electrical infrastructure is in place as part of the expansion project; then the carts will be replaced with electric carts as their lifespan comes due. On motion by Councillor G. Lorentz - it was resolved: "That the proposed 2008 Operating Budget for the Doon Golf Course be approved subject to final budget deliberations." Rockway Golf Course Mr. D. Chapman advised that it is expected the 2007 budget will come in as planned. He further advised that the proposed 2008 budget will show an increase in the total gross profit. Councillor J. Gazzola pointed out that the administration costs for the Rockway Golf Course were higher than what is being proposed for the Doon Golf Course. Mr. G. Hastings advised there are full time staff that are transferred from the arenas to Rockway Golf Course and this has an impact on the administration costs. Mr. Chapman advised that staff will look into the details of the administration costs prior to the February 4th final Budget Day. Mr. Hastings further advised that in 2007 there were approximately 41,000 rounds of golf played which is approximately 1,500 - 1,800 more rounds than was played in the previous year. On motion by Councillor G. Lorentz - it was resolved: "That the proposed 2008 Operating Budget for the Rockway Golf Course be approved subject to final budget deliberations." Building Enterprise Mr. D. Chapman advised that the 2007 actual is projected to be in a higher positive position from the 2007 budget due to higher than expected revenues and lower expenses. He further advised that not all FTE's within the Building Enterprise were filled in 2007 which reduced costs and, there was a capital close out of $300,000. related to the renovation costs that were not required. Councillor J. Gazzola raised a concern regarding the variance between the budgeted amount and the projected actuals and the impact this has when capital and operating budgets are budgeted for more than is required. Mayor Zehr advised that there is no impact on taxes in regard to the Building Enterprise budgets but he did question the figures between the budgeted amount and the projected actual amount with respect to the transfer to the Building Reserve. Mr. Chapman advised that staff will look into this in greater detail and clarify the information prior to final Budget Day. Councillor Gazzola suggested that since staff were able to process the building permits without a full staff complement that this should be investigated further to determine the appropriate staffing complement for the Building Enterprise. Mr. M. Selling advised that staff were able to process the building permits but this cannot be sustained without filling the full staff complement. On motion by Councillor K. Galloway - it was resolved: "That the proposed 2008 Operating Budget for the Building Enterprise be approved subject to final budget deliberations." Gas Utility Mr. D. Chapman advised that the 2007 budget for the Gas Utility is projected to be on target. He further advised that starting with the 2008 proposed budget transfers to Gas Capital will be greatly reduced and revenues are expected to decrease from 2007. Councillor Gazzola questioned why revenues would decrease in light of the number of new customers in the City FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14.200$ - $ - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) and he raised a concern regarding the conservative approach to the budget. He added that if staff were a little more aggressive, revenues could be budgeted higher and therefore reducing the need to increase rates. Ms. P. Houston cautioned that in the gas market there is certain volatility and it is difficult to predict revenues. Ms. Houston advised that staff would look at the proposed revenues prior to final Budget Day. Councillor B. Vrbanovic requested that members of Council be provided with information from 2003 - 2007 with respect to revenues and rates and the population of the City for each of those years. Mayor Zehr raised a concern why it would take until mid-February in order for the calculations to be completed with respect to the supplier side. Mr. D. Chapman advised that staff will investigate this and pointed out that the process is complex and bills require reconciliation in order to make the final calculations. Councillor Gazzola asked why the projected actual revenues for the gas supply show an increase. Mr. D. Chapman responded that this is most likely the result of a rate increase but staff will have details for the February 4th final Budget Day. On motion by Mayor C. Zehr - it was resolved: "That the proposed 2008 Operating Budget for the Gas Utility be approved subject to final budget deliberations." Water Utility Mr. D. Chapman advised there is a small increase projected for the 2007 budget which will have a positive effect and that the 2008 budget will increase over 2007 to reflect the rate increase approved by Council. He added that it is projected by 2010 the deficit will be eliminated and there is an expected surplus for that year. Councillor Gazzola raised a question regarding the gas tax that the City receives from the senior governments and how the funds were being allocated. Mr. Chapman advised that the gas tax portion was going into the tax base component of the Infrastructure Program. Mayor Zehr requested information be circulated to members of Council prior to final Budget Day showing water rates with comparable municipalities. On motion by Councillor C. Weylie - it was resolved: "That the proposed 2008 Operating Budget for the Water Utility be approved subject to final budget deliberations." Sanitary Utility Mr. D. Chapman advised that it is being projected that the 2007 budget will result in a more positive position than budgeted due to the close out of various projects that did not move forward in 2007. He also advised it is projected that the deficit will be eliminated in 2011 based on the proposed rate increases. On motion by Councillor C. Weylie - it was resolved: "That the proposed 2008 Operating Budget for the Sanitary Utility be approved subject to final budget deliberations." Council reviewed the history of rate increases for water and sewer for the years 2003 - 2007. Mr. D. Chapman advised that should the 2008 budget be approved as presented, this will result in a combined increase of 12.6% for 2008. Mayor Zehr requested that with respect to the earlier request for information regarding water rates of comparable municipalities that information be provided on the water and sewer rates for the years 2003 - 2007 of comparable municipalities. The Committee recessed at 12:20 p.m. and then reconvened at 1:10 p.m., with all members present. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 9 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) DELEGATION PRESENTATION Homer Watson House & Gallerv tHWHG) Ms. Faith Hieblinger and Mr. Brian Wadsworth, HWHG, attended to request an additional 3% for wage equity in addition to the 2% cost of living recommended by City staff. The request will add $5,700. for a total wage allowance of $197,500. The delegation stated that without the requested funding, the gap in wage equity will again widen and eventually erode the progress made to date. A motion by Councillor J. Gazzola was brought forward for consideration to approve an additional $5,700. for the 2008 operating grant to the Homer Watson House & Gallery, representing a 5% increase in wage equity to achieve a total wage allowance of $197,500. in 2008. Councillor Gazzola acknowledged that the four-year phase-in plan was not formally recognized by Council but the funding requests were met in 2005 and 2006 and a lesser amount was given in 2007. He noted that the Gallery's request results in a lower amount than was to be achieved under the original plan and asked that it be supported. Mayor C. Zehr stated that his concerns with respect to approving the HWHG's funding request relate to an inequity of funding in comparison to the KW Art Gallery. He advised that he would prefer no more than a 3% increase in wage equity for a total wage allowance of $193,700. Councillor J. Gazzola's motion was then voted on and LOST. On motion by Mayor C. Zehr - it was resolved: "That an additional $5,700. be approved for the 2008 operating grant to the Homer Watson House & Gallery, representing a 3% increase in wage equity to achieve a total wage allowance of $193,700. in 2008." TAX SUPPORTED OPERATING BUDGET Mr. D. Chapman reviewed the proposed 2008 tax levy of 6.37%, including 1.22% for the Economic Development Investment Fund (EDIF) and exclusive of proposed additions or reductions. Mr. Chapman provided explanation relative to implementation of the Financial /Infrastructure System Maintenance and agreed to provide information to Council as to the current system maintenance cost. Mr. G. Hummel provided explanation of staffing relative to the Operations to Service Growth and Mr. Chapman advised that the proposal serves to eliminate the funding deficit. NEW INITIATIVES Mr. Chapman advised that Issue Papers have been prepared for new initiatives, totalling $831,769. and staff is recommending a reduction to $582,304., as outlined under column `Category 3' on the New Initiatives summary chart. Issue Pager #2 tAdult Crossing Guard -Williamsburg Public School) An adult crossing guard is proposed to be located at Max Becker Drive and Isabella Street to accommodate students attending the Williamsburg Public School which opened in September 2007. The annual cost for wages, fringe benefits and miscellaneous supplies in 2008 is approximately $8,500. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 10 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) Councillor J. Gazzola questioned how the annual costs had been derived for 2008, suggesting that they should be less based on the cost provided for the remainder of 2007. Mr. R. Browning agreed to follow-up in respect to this matter. On motion by Councillor G. Lorentz - it was resolved: "That one additional adult crossing guard be approved for the intersection of Max Becker Drive and Isabella Street to assist crossing of primary school children attending Williamsburg Public School." Issue Paper #3 (Direct Detect Administrative Assistant) Issue Paper #4 tDirect Detect Manager) Establishment of a manager /supervisor position for Direct Detect and an increase from 0.5 to 1 FTE is proposed to accommodate growth demands and provide for increased sales through marketing. Councillor J. Gazzola acknowledged that there is no impact to the 2008 tax rates but raised concerns with respect to future costs that may be associated with these positions. Fire Chief T. Beckett advised that of the three existing installers, it is anticipated that one will fill the managerial role and through marketing the program, revenues generated from increased sales will off-set costs. On motion by Councillor G. Lorentz - it was resolved: "That an increase from 0.5 FTE to 1.0 FTE be approved for the Direct Detect Program." On motion by Councillor G. Lorentz - it was resolved: "That establishment of a manager /supervisor position be approved for the Direct Detect Program, as outlined in the Direct Detect business plan." Issue Paper #5 tLeisure Access Cards Strategy -Implementation Plan) Hiring of a part-time Inclusion Co-ordinator, increased fee subsidy and marketing costs are proposed, as recommended in the Leisure Access Card (LAC) Strategy report (CSD-07-023). Ms. L. Palubeski spoke to the need for apart-time staff, advising that the goal is to build on recommendations in the strategy report by expanding program capacity and broadening the scope to include resources to address poverty reduction. Ms. Palubeski explained how the fee subsidy is administered, advising that there are associated program costs related to supplies and transportation. Mayor C. Zehr suggested that there is effectively a zero impact in respect to program revenues off-setting program expenditures. Ms. A. Pappert advised that the budget does not specifically show the same amount for revenues, explaining that while an increase in revenues is anticipated, rates have been increased by 6% putting some strain on lower income families, and thereby an increase in requests for subsidization is likely. On motion by Councillor C. Weylie - it was resolved: "That $20,000. be approved in 2008 for additional fee subsidy for the Leisure Access Card Program." FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 11 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) Issue Pager #6 tDowntown Co-ordinator) One additional FTE is proposed to support specific activities related to maintenance, operation and support of quality standards for the Downtown streetscape. The position will focus on public elements of the physical environment and their relationship with community activity in the Downtown. Ms. C. Ladd advised that in 2001-2002 a change in staffing from 4 FTE's to 2 committed to the Downtown occured. The intent of creating a Downtown Co-ordinator is to bring staffing back up to address growth demands. Ms. S. Wright added that this position will ensure a high level of maintenance standards for the King Street streetscape, working with staff across the organization, as well as with outside groups. Councillor K. Galloway questioned if this position could be part-time or if hiring could be delayed until later in 2008. Ms. S. Wright advised that there is sufficient work for a full time position and it is anticipated that recruitment would begin in the spring. Ms. Ladd noted that if salary costs are applied only in part for 2008 it would result in a shortfall to be recouped in 2009. Mr. D. Chapman added that staff has taken the approach of full costing to avoid creating challenges to the budget in 2009. On motion by Councillor J. Smola - it was resolved: "That $63,000. annually be allocated in the Operating budget to add a Downtown Co- ordinator to the Economic Development Division." Issue Paper #7 tDowntown Ambassador Program) A seasonal `Downtown Ambassador' Program is proposed for four months of each year to ensure visitors, employees, residents and business investors have positive experiences within the Downtown area. On motion by Councillor C. Weylie - it was resolved: "That $25,000. annually be added to the Operating budget of the Downtown Development Division to implement a seasonal `Downtown Ambassador' Program for four months of each year." Issue Paper #9 tFinal Installment of Small Business Centre Funding) It was proposed that an increase be approved in the annual grant from $62,500. to $75,000. Ms. K. Weiss advised that the additional funding is required in order to implement an ongoing marketing strategy as well as to continue the funding for an additional FTE. Councillor J. Gazzola raised a concern that not enough information has been provided in order to make this decision. Ms. Weiss explained that she had planned to provide a full report through the grant process but could provide the Committee with more information for the final budget day on February 4th On motion by Councillor C. Weylie - it was resolved: "That the request to add $12,500. to the 2008 Operating Budget for the Waterloo Region Small Business Centre to increase the annual grant from $62,500. to $75,000. be referred to the February 4, 2008 special Finance & Corporate Services Committee meeting tCouncil Budget Davy, in order that further information can be provided by staff." FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 12 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) Issue Pager #11 tEngineerinq Services Division Increase in FTEs) It was proposed that approval be given to hire a Design and Construction Engineer and a Supervisor of Development Client Services in the Engineering Services Division. Mr. G. Murphy provided an overview of the current structure of the Engineering Division advising that the two proposed positions would assist in ensuring effective and efficient processing of development applications, relieve workload and backlog issues currently facing that Division and, meet the expectations of citizens and the development industry. Mr. Murphy added that the intent of the proposed Supervisor, Development Client Services is to optimize current processes through a business service delivery process review and meet the expectations of the Division's clients. In answer to a question, Mr. Murphy advised there is a backlog regarding development applications and that by hiring a Design and Construction Engineer, this will allow the current manager time to work on broader issues such as policy development. On motion by Councillor C. Weylie - it was resolved: "That the hiring of a Design and Construction Engineer in 2008 be approved; and further, That the hiring of a Supervisor, Development Client Services in 2008 be approved, provided that development administration fees are projected to provide full funding for this position." Issue Paper #22 tWilliamsburg Community Centre Proposal) Councillor K. Galloway suggested that this initiative is an opportunity to provide services to a community in the early stages of development that could result in mitigating problems in the future. Councillor Galloway added that there are currently three schools functioning in the area and yet there are no programs for the kids outside of the school curriculum. Councillor J. Gazzola suggested that the establishment of the Williamsburg Community Centre would be beneficial but there are problems in other areas of the City that could also use attention and that perhaps this proposal was premature. Mayor C. Zehr suggested that this area of the City has a fairly dense population and many of the homeowners are young families. It was his opinion that it would be appropriate to implement this proposal now as it will have long term implications. Councillor G. Lorentz agreed that community centres are part of the community and need to be part of the initial planning process to be completed early in the development of a community. On motion by Councillor K. Galloway - it was resolved: "That $53,265. be added to the Community Programs and Services Operating Budget to accommodate the costs associated with leasing and operating 3,000 sq. ft. of space in the Williamsburg area for 2008." Issue Pager #12 tPlanning Division Additional Site Plan Staffl It is proposed to hire two positions in the Planning Division, an additional Site Plan Facilitator and one Planner /Technician who would be dedicated to site plan applications. Mr. J. Willmer advised that the proposed two FTE's would not have an effect on taxes as the associated costs for the positions would be off-set by the already approved fee increases for site plan applications. He further advised that should the two positions not be approved, it is suggested that the fees be reviewed and rolled back. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 13 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) On motion by Mayor C. Zehr - it was resolved: "That the amount of $147,046.40 annually be allocated to the Operating Budget to enable the Planning Division to hire one additional Site Plan Facilitator and one Planner / Technician with urban design experience dedicated to site plan applications; and further, That Planning staff monitor the additional revenue generated by the revised fee structure in 2008 and consider any additional staff warranted to provide services for the fees collected." Issue Paper #13 tPlanning Division Environmental Planner) It is proposed that a second Environmental Planner be hired for the Planning Division in order to meet current work demands. On motion by Councillor C. Weylie - it was resolved: "That the amount of $81,406.10 annually be allocated in the Operating Budget to enable the Planning Division to add a second Environmental Planner." Issue Pager #14 tFacilities Management Energy Management Labour & Benefits) It is proposed that the Operating Budget for Facilities Management be increased by $65,324. plus fringe benefits in order to move an existing position from the Energy Management Capital Fund to the Operating Budget. Councillor J. Gazzola requested that members of Council be provided a full accounting on the Energy Management Capital Fund. Mr. L. Proulx explained that when the energy management project was established, an additional position was created to continue the energy management initiatives and that position has continued to be funded from the Energy Management Capital Project but this is now having an effect on the remaining capital funds. Mr. Proulx added that it has been proposed that the current position now be funded from the Operating Budget. Mayor C. Zehr agreed that more information on the Energy Management Fund would be beneficial and requested that information in the budgets should include any savings that are being realized as a result of the Energy Management Project. On motion by Mayor C. Zehr - it was resolved: "That the proposal to include $83,615. in the Facilities Management Operating Budget to cover energy management labour and benefits starting in 2008 be referred to the February 4, 2008 special Finance & Corporate Services Committee meeting tCouncil Budget Dav)." Issue Paper #15 tCorporate Call Centre) Issue Paper #15 proposes an Operating Budget for Phase 1 of the Corporate Call Centre implementation. On motion by Councillor G. Lorentz - it was resolved: "That a 2008 Operating Budget addition of $107,494. for Phase 1 of the Corporate Call Centre implementation be approved." FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 14 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) Issue Pager #16 tHours of Work Legislation) It is proposed that additional funding be allocated to the Operations Operating Budget in order to comply with the Hours of Work legislation. Councillor J. Gazzola raised a concern that staff requested and received additional funding for this issue in 2007 and at that time it was being proposed that the issue of snow removal in cul- de-sacs would be rectified. Mr. S. Berry advised that even with the additional funding in 2007 limited resources still made it impossible to add the new service. Councillor Gazzola requested that members of Council be provided with a summary of the winter operational costs over the past 2-3 years. Ms. C. Ladd advised that this proposal will not speak to any additional services but will be used to maintain the current level of service. On motion by Councillor K. Galloway - it was resolved: "That $88,560. be allocated to the Operations Operating Budget in order for Operations to comply with Hours of Work legislation." Issue Pager #17 tFinancial Services Support for Cash and Capital Planning) Issue Paper #17 proposes an additional FTE for the Financial Planning and Reporting Division to increase the capacity for cash and capital planning. Mr. D. Chapman advised that the cost of the proposed Financial Analyst will be off-set by additional investment income associated with improved cash planning and investment management. He added that this position will allow for aggressive investment and budget and the expectation is a 4-5% increase in the City's investment. Councillor J. Gazzola requested that the members of Council be provided with information on the investment return realized by the City in 2007. On motion by Councillor J. Smola - it was resolved: "That the addition of one FTE for the Financial Planning and Reporting Division to increase the capacity for cash and capital planning at a cost of $85,000. in 2008 be approved; and further, That the budget for investment income be increased by $85,000. in 2008 in anticipation of increased investment yields associated with the increased capacity for cash planning and investment management." Issue Paper #18 tParking Systems Administrator) It is proposed to convert a contract position to full time to oversee work related to administration of the City's Parking Enforcement program which has been transitioned to the By-law Enforcement Division. Mr. S. Turner advised that the proposed FTE is to handle existing workload currently done through a contract position and if not approved, an extension of the contract will be requested as there is no capacity to absorb the workload through existing full time staff. Mayor C. Zehr advised that he could not support the request, suggesting that there is opportunity to complete the work by other means. On motion by Mayor C. Zehr - it was resolved: "That no action be taken on the request to create a Parking Systems Administrator position in the By-law Enforcement Division." FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 15 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) Issue Pager #19 tJunior Buyer) Mr. L. Gordon advised that the new position proposed would handle routine quotations and tenders which will free senior staff to focus on more complex projects and explore co-operative partnerships to take advantage of cost savings. He added that staff has achieved maximum benefit from technological changes and with no staffing increases since 1980, has reached a point where they are no longer able to ensure service delivery in a timely manner. On motion by Councillor G. Lorentz - it was resolved: "That $55,000. be added to the Operating budget for the Purchasing Division to create a Junior Buyer position." Issue Paper #20 tSupervisor of Storm and Sanitarv Maintenance) Mr. D. Locke advised that this area has experienced significant growth and new technological advancements with the addition of 8 pumping stations since 2000, at least one stormwater management pond for each newly developed subdivision and Regional infrastructure growth. The level of supervision required has surpassed what is normally expected of one individual and accordingly, an additional supervisor is needed to meet growth demands. Mr. Locke added that the position will be funded 50% from the Sanitary Utility and 50% from Operations operating budget through a re-allocation of existing funds. On motion by Councillor C. Weylie - it was resolved: "That $115,000. ($57,500. from Sanitary Utility and $57,500. from Operations Operating Budget) be approved to hire an additional supervisor for the Operations Division in the Storm /Sanitary Sewer area." Additional New Initiatives tConstruction Engineering and Infrastructure Asset Planning) Mr. Grant Murphy advised that two Construction Engineering positions are proposed to be funded from Capital projects and therefore, have zero impact to the 2008 Operating budget. He added that two technician positions were proposed for Infrastructure Asset Planning, at a cost of $116,000.; however, staff has agreed to pursue only one position at this time, at a cost of $58,450., with the need for a second position to be monitored in 2008. On motion by Councillor J. Smola - it was resolved: "That 2 full time Construction Engineer positions be approved for the Engineering Division to be funded from Capital projects." On motion by Councillor J. Smola - it was resolved: "That $58,450. be added to the Operating budget for the Engineering Division to hire one full time technician for Infrastructure Asset Planning and the need for a second full time technician to be monitored in 2008." EFFICIENCIES AND REDUCTIONS Mr. D. Chapman provided examples of efficiencies identified by staff to reduce the overall base increase, including: an innovative approach to purchasing streetlight hydro at a cost savings of $150,000.; and sourcing a new contract for blackberry service at a cost savings of $27,000. He added that as a result of budget focus groups, areas of low spending support were identified and at Council's direction, staff reviewed the suggestions made from an operational point of view. Issue Papers for these additional matters have been provided for FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 16 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) the Committee's consideration; however, it was noted that no significant savings potential has been identified to date. Mr. Chapman reviewed proposed staffing increases, with those included in growth provisions being: staffing for Operations to Service Growth and staffing of Fire Station No. 7. Tax levy scenarios demonstrated the impact of new initiatives, ranging from 5.91 % to 6.62% and a total 2008 property tax increase (City /Region /Education) was projected at 3.49% per average household. Mr. Chapman advised that there will be significant pressure on the City's budgets over the next few years, as demonstrated in the 10-Year Tax Rate Impact Projection chart. OTHER ISSUES Issue Paper #23 tMileage Rate) On motion by Mayor C. Zehr - it was resolved: "That the mileage rate per km be set at $0.44 for the first 5,000 km and $0.39 for each additional km thereafter, effective March 1, 2008." Issue Paper #24 tLegislative Changes) A summary of the impact of legislative changes on the tax base and enterprise budgets from 1999-2008, as outlined in Issue Paper #24, was provided for information. Issue Pager #25 tPotential Budget Reduction -Grass Cutting - Cul-de-sacs) Through budget focus groups a suggestion was made to consider a program to have neighbourhood residents `adopt' the cul-de-sac islands on their street. A number of factors have been identified by staff that require assessment before proceeding to implement this type of program. At the request of the Committee, staff agreed to report by the end of February as to the number of cul-de-sacs currently maintained by the City; the actual costs of maintenance and the potential to convert to anon-maintenance format; actions being taken through subdivision approvals, if any, to require the developer to provide anon-maintenance format; and any investigation of new technologies (ie. snowblower equipment used by the City of Waterloo). On motion by Councillor G. Lorentz - it was resolved: "That staff continue to review the opportunities suggested by the community in respect to cul-de-sac maintenance and to determine means in which to meet the City's minimum `class /priority 3' standard that has been established; such review to be a long term objective and reported on as part of the 2009 budget process; and further, That staff make the necessary adjustments to the `Community Garden' program that will allow it to become more accessible to the general public and to communicate to the residents that this program is available." Issue Pager #26 tPotential Budget Reduction -Leaf Collection) Through budget focus groups suggestions were made to consider the following in respect to leaf collection activity: • assess cost /benefit of leaf drop-off sites usage and rationale for adding more sites; • assess feasibility of selling collected leaves for mulch; and, • assess rationale of providing bagged leaf collection on one side of street only. At the request of Councillor B. Vrbanovic, the third recommendation of staff, as contained in Issue Paper #26, requiring a public forum to explore the community's desire to eliminate loose FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 17 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) leaf collection from roadways in favour a curbside yard waste program only, was voted on separately and Carried. On motion by Councillor G. Lorentz - it was resolved: "That Operations staff continue to monitor the need for additional leaf drop-off sites throughout the City, adding additional sites only when there is a clear need; and, That Operations and Communications staff continue to explore additional ways to market and communicate to residents the preferred use of leaf drop-off sites over curbside loose leaf collection practices; and, That the City continue to transport leaves to either private farms as directed by the Region of Waterloo, or to the Region's Waste Management Facility for compost; and further, That through the public forum process, Operations staff explore the community's desire for the elimination of loose leaf collection from roadways in favour of a curbside yard waste program only." Issue Pager #27 tPotential Budget Reduction - Sgortsfield Maintenance) Through budget focus groups a suggestion was made to consider a program to have user groups `adopt' the facility in which they conduct their games. On motion by Councillor K. Galloway - it was resolved: "That staff continue to pursue partnerships with sportsfield user groups to minimize time spent on garbage collection by staff and to concentrate staff efforts on the playing field; and to meet with user groups to determine solutions for maintaining cleanliness of City facilities." Issue Pager #28 tMarket Salary Survey) Results of an independent review of the competitiveness of the City's salary structure was considered, which concludes Kitchener's pay ranges are below market by 1 to 8.6% on average for salaried jobs and 0 to 6.6% for hourly jobs. The survey also concludes that the current pay policy of 50th percentile of market, results in the City never paying more than the bottom half of the salary market, making it very difficult to attract candidates; and there is need to reduce the number of pay grades to make salary administration easier, as well as the need to update pay rates to market on a more regular basis. Councillor J. Gazzola advised that he could not support the staff recommendation to set aside funding for potential salary adjustments as it was his opinion not enough information has been provided to make an informed decision. He asked that more detailed information be provided by budget day. The following motion was Carried, on a recorded vote, with Mayor C. Zehr and Councillors G. Lorentz, J. Smola, K. Galloway, B. Vrbanovic and C. Weylie voting in favour and Councillor J. Gazzola voting in opposition. On motion by Mayor C. Zehr - it was resolved: "That $720,000. be set aside in 2008 for the potential implementation of salary adjustments, with any recommended adjustments to be brought forward to Council at a more appropriate time in 2008." FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 18 - CITY OF KITCHENER 1. FIN-07-134 - 200$ OPERATING BUDGET tCONT'D) Issue Pager #29 tlnvestment Income) A summary of the 5-year history on rates and balances relative to Investment Income was provided. On motion by Mayor C. Zehr - it was resolved: "That the following recommendation contained in Issue Paper #29 (Investment Income), as attached to Financial Services Department report FIN-07-134, be referred to the February 4, 2008 special Finance & Corporate Services Committee meeting tCouncil Budget Davy, pending additional information from staff as to the actual amount of interest income to be gained: `That the 2008 budget for Investment Income be set at $2.262M, which incorporates a 3% increase over the 2007 budget."' Issue Pager #30 tEconomic Development Investment Fund Special Capital Levy) A review of the projected interest rates on the 10-year $89M debt issue program for the Economic Development Investment Fund was undertaken. The projections were revised to incorporate the actual interest rate on debt that has been issued to date (ranging from 3.15% to 5.03%) and as well, on future debt of 6%. The result of using lower and more realistic interest rates means that the special capital levy increases can be reduced in future years. The following motion was Carried Unanimously. On motion by Mayor C. Zehr - it was resolved: "That the Economic Development Investment Fund (EDIF) projections be amended to reflect current anticipated interest rates on debt issuance; and further, That Option 2 as outlined in Issue Paper #30 attached to Financial Services Department report FIN-07-134, be approved to lower the current year's special capital levy rate to 0.71 % from 1.23%, for an overall reduction in the property tax levy increase in 2008 of 0.52%, with the levy rate for 2009 to 2013 to remain at the current projected level of 1.23%." NET IMPACT TO TAX LEVY Mr. D. Chapman advised that as a result of the decisions made this date the projected tax levy is now at 5.94%. He added that all deferred items are still included in the targeted 5.94% and dependent on decisions made on budget day may have further impact to the tax levy. RESERVE FUND PROJECTIONS In respect to the Tax Stabilization Reserve Fund, Mr. Chapman advised that the City needs to realize a $1 M surplus within the next 3 years to avoid a deficit in 2010. Interim financial reports will be closely monitored and depending on results, staff may recommend that a reduction of reliance on the reserve fund be accelerated. Councillor B. Vrbanovic requested that any suggestions the Committee may have to further reduce the proposed tax increase be forwarded to staff for further investigation prior to budget day. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES JANUARY 14, 200$ - 19 - CITY OF KITCHENER 2. ADJOURNMENT On motion, the meeting adjourned at 4:40 p.m. J. Billett Committee Administrator R. Gosse City Clerk