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HomeMy WebLinkAboutFinance & Corp - 2003-03-03FINANCE & CORPORATE SERVICES COMMITTEE MINUTES MARCH 3~ 2003 CITY OF KITCHENER The Finance and Corporate Services Committee met this date, chaired by Councillor B. Vrbanovic, commencing at 3:06 p.m., with the following members present: Mayor C. Zehr, and Councillors M. Galloway, J. Smola and C. Weylie. Councillors J. Gazzola & G. Lorentz entered the meeting shortly after its commencement. Others Present: Ms. P. Houston, Ms. C. Ladd, Ms. R. Pitfield, Ms. C. Heal, M. L. MacDonald, Ms. S. Adams, Ms. J. Murphy, Ms. C. Gravelle, Ms. S. Keeping, Ms. D. Robertson, Ms. B. Wagner, Ms. D. Gilchrist, and Messrs. J. Fielding, R. Pritchard, G. Sosnoski, F. Pizzuto, R. Browning, L. Lynch, R. Gosse, S. Turner, D. Mansell, G. Borovilos, L. Bensason, B. Page. CRPS-03-032 - RECOMMENDATIONS OF SAFE & HEALTHY COMMUNITY ADVISORY COMMITTEE - MEETING OF FEBRUARY 18, 2003 The Committee was in receipt of Corporate Services Department report CRPS-03-032, dated February 25, 2003, providing two recommendations from the February 18, 2003 Safe and Healthy Community Committee meeting. The first recommendation acknowledges the resignation of 3 members of the Safe and Healthy Community Committee and methods for their replacement. The second recommendation speaks to the form of relationship between the Youth Opportunities Plan Committee and the Safe and Healthy Community Advisory Committee. It was resolved: "That with regret, the resignations of Rahim Akabakhsh, Fred Bishop and Nathan Hallman from the Safe and Healthy Community Advisory Committee be accepted; and, That new members to fill the three vacancies be appointed from the list of interested individuals submitted to the Committee Co-Chairs; or failing this, staff be instructed to advertise to fill these vacancies." It was resolved: "That a member of the Safe and Healthy Community Advisory Committee not be appointed to the Youth Opportunities Plan Committee; and further, That the City's Youth Co-Ordinator be requested to report monthly to the Safe and Healthy Community Advisory Committee on items of interest and to solicit input pertaining to the Youth Opportunities Plan, as required." CRPS-03-031 - SIGNING AUTHORITY - CERTIFICATE REQUESTING A CONVICTION The Committee was in receipt of Corporate Services Department report CRPS-03-031, dated February 25, 2003, recommending that, in light of the transfer of Parking Enforcement from Transportation Planning to By-law Enforcement, the Director of By-law Enforcement be authorized to sign Certificates Requesting A Conviction. It was resolved: "That the Director of By-law Enforcement be authorized to sign the Certificates Requesting A Conviction, in accordance with subsection 18.2 (1.1) of the Provincial Offences Act, RSO 1990, c.P. 33." FIN-03-011 - BILL 210-ELECTRICITY PRICING, CONSERVATION AND SUPPLY ACT 2002 The Committee was in receipt of Financial Services Department report FIN-03-011, dated February 28, 2003 recommending that Kitchener-Wilmot Hydro Inc. continue to be incorporated as a corporation under the Business Corporation Act (Ontario), and to operate on a for-profit basis. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES MARCH 3~ 2003 3. FIN-03-011 - 32 - CITY OF KITCHENER - BILL 210 - ELECTRICITY PRICING, CONSERVATION AND SUPPLY ACT 2002 (CONT'D) Ms. P. Houston advised that Committee that the current value of the debt held by the City for Kitchener-Wilmot Hydro is $77M. In 2002, Kitchener-Wilmot Hydro had $150M in assets, on a for-profit basis; however, Ms. Houston could not advise of the Hydro's assets should it become a not-for-profit entity. When questioned about the Provincial trend in terms of for-profit vs. not-for-profit, Ms. Houston advised that the trend is for-profit, particularly in this area. She advised that Kingston is the only municipality she is aware of which has chosen not-for-profit status. Mr. R. Charie, President, Kitchener-Wilmot Hydro Inc. was in attendance to answer questions from the Committee. Upon questioning by Councillor J. Gazzola, Mr. Charie responded that, as a not-for-profit entity, Kitchener-Wilmot Hydro's rates could possibly be reduced in the short- term, possibly unitl 2006. However, Mr. Charie predicted difficulties in infrastructure maintenance with a not-for-profit corporation. He advised that should there be financial difficulties in maintaining infrastructure with a not-for-profit corporation, the City of Kitchener will have to pay these costs. Mr. Charie noted that Kitchener-Wilmot Hydro currently is a profit making corporation which distributes electricity at a lesser rate than other hydro companies in this area. He noted that in 1999, because Kitchener-Wilmot Hydro had excess funds, $13M was given back to customers through lower rates. With respect to the state of K-W Hydro's infrastructure as compared to other neighbouring hydro utilities, Mr. Charie advised Kitchener-Wilmot Hydro's substations have been converted to higher voltage; consequently, funds have been generated through higher efficiency. When questioned by Councillor Galloway as to the amount of dividends which could be expected in a not-for-profit situation as compared to a for-profit situation, Mr. Charie advised that a not-for- profit corporation does not pay dividends. If Kitchener-Wilmot Hydro remains a for-profit corporation it will be the decision of the Board of Directors as to how excess funds will be distributed: either as dividends or through reduced rates. Mr. J. Fielding stated that currently there is a lack of information concerning not-for-profit status. In the future a for-profit corporation can change to not-for-profit should it be deemed beneficial; however, the reverse is not true. Mr. Orville Thacker, Waterloo Regional Council for Union Retirees, spoke in support of a not-for- profit hydro corporation, suggesting that a for-profit corporation would be regressive. He spoke of returning hydro profits to the community. He stated that profit on a utility is an unfair tax, and profiting on the provision of electricity would have a negative impact on Iow income people. He spoke of luxury seats at the Kitchener Memorial Auditorium which poor people will never be able to afford. Councillor B. Vrbanovic advised Mr. Thacker that Kitchener-Wilmot Hydro has the 4th lowest rates in the province, and this Council does have a history of keeping tax rates below the rate of inflation. Further that new seats at the K.M.A. Complex are not being paid for through property taxes, and Kitchener Council has lobbied both the Provincial and Federal Governments regarding taxes. Councillor J. Smola moved the recommendation in the staff report. Mayor Zehr spoke in support of the motion noting that Kitchener-Wilmot Hydro's goal is to provide the highest quality service at the lowest possible rates. He noted that if Hydro does make a profit it can be given as a dividend or rates can be reduced. Mayor Zehr pointed out that some municipalities either sold their hydro utility or sold the debt; however, no one seems to be questioning what they did with that money. However, the City of Kitchener is constantly being questioned about why it is taking dividends. FINANCE & CORPORATE SERVICES COMMITTEE MINUTES MARCH 3~ 2003 3. FIN-03-011 - 33 - CITY OF KITCHENER - BILL 210 - ELECTRICITY PRICING, CONSERVATION AND SUPPLY ACT 2002 (CONT'D) Ms. P. Houston was requested to work with Corporate Communications to inform the public through various channels, as to what the profits from the gas and hydro utilities are spent on. A recorded voted was requested. On motion by Councillor J. Smola - it was resolved: "WHEREAS Section 142 of the Electricity Act, 1998, required municipalities to convert their existing hydro-electric commissions into corporations under the Business Corporations Act (Ontario) before November 7, 2000; and, WHEREAS the City of Kitchener through a public process and meetings, incorporated Kitchener-Wilmot Hydro Inc. under the Business Corporations Act (Ontario) required pursuant to Section 142 of the Electricity Act, 1998 and effective as at August 1,2000; and, WHEREAS on December 9, 2002, Bill 210, the Electricity Pricing, Conservation and Supply Act, 2002 ('the Act') received third reading, Royal Assent and came into force; and, WHEREAS the Act amends the Electricity Act, 1998, by adding Section 159.1, which provides that each municipality that beneficially owns voting securities in a corporation incorporated under Section 142 of the Electricity Act, 1998, and that is licensed under the Ontario Energy Board Act, 1998 to distribute electricity, may within 90 days after Section 159.1 comes into force, pass a resolution affirming that the corporation should continue to be incorporated as provided in Section 142(1) of the Electricity Act, 1998; and, WHEREAS the Act stipulates that should Council not pass the required resolution and submit the necessary certificate certifying the passing of the resolution, consequences for the Hydro utility would include a prohibition against declaring or paying dividends for the benefit of any person; a prohibition against any disposition of the assets or liabilities of the electricity distribution corporation; prohibitions against entering into certain contractual arrangements, and an application being deemed to have been made to the Ontario Energy Board for a rate order that incorporates a 0% return on common equity which effectively converts the distribution corporation into a not-for-profit business; and, WHEREAS the ownership of Kitchener-Wilmot Hydro Inc. has consistently ensured that the electricity customers and taxpayers of the City of Kitchener and the Township of Wilmot receive efficient electrical services at competitive rates; THEREFORE BE IT RESOLVED THAT the Council of the Corporation of the City of Kitchener affirms that Kitchener-Wilmot Hydro Inc., an electricity distributor licensed under the Ontario Energy Board Act, 1998, continue to be incorporated as a corporation under the Business Corporations Act (Ontario) as provided in Section 142(1) of the Electricity Act, 1998, and to operate on a for-profit basis; and, BE IT FURTHER RESOLVED THAT the Mayor and Clerk are authorized to prepare and file with the Minister of Energy the necessary certificate required under Section 159.1 of the Electricity Act, 1998, as provided for in the Act." CRPS-03-035 Carried Unanimously. - BUSINESS & EDUCATION PARTNERSHIP -RECOMMENDATION OF SAFE & HEALTHY COMMUNITY -ADVISROY COMMITTEE -MEETING OF FEBRUARY 18, 2003 The Committee was in receipt of Corporate Services Department report CRPS-03-035, dated February 25, 2003, providing a recommendation from the February 18, 2003 Safe and Healthy FINANCE & CORPORATE SERVICES COMMITTEE MINUTES MARCH 3~ 2003 4. CRPS-03-035 - 34 - CITY OF KITCHENER - BUSINESS & EDUCATION PARTNERSHIP -RECOMMENDATION OF SAFE & HEALTHY COMMUNITY -ADVISROY COMMITTEE -MEETING OF FEBRUARY 18, 2003 (CONT'D) Community Committee with respect to the City establishing a partnership with the Business and Education Partnership of Waterloo Region. Although the Safe and Healthy Community Committee recommends establishing such a partnership, it also suggests the recommendation be considered in conjunction with a report from D. Paterson on the City's participation. On motion by Councillor J. Gazzola - it was resolved: "That consideration of the following recommendation from the February 18, 2003, Safe and Healthy Community Advisory Committee be deferred and referred to the future Finance and Corporate Services Committee meeting when a report from D. Paterson, Director of Human Resources, is considered with respect to the City's potential involvement with the Business and Education Partnership of Waterloo Region: 'That the Safe and Healthy Community Advisory Committee supports the City of Kitchener establishing a partnership with the Business and Education Partnership of Waterloo Region; and, That a City financial contribution of $5,000. be considered; and further, That the Business and Education Partnership of Waterloo Region be requested to provide a report to the City within one year outlining how the City's funds have contributed to positively improving the career opportunities of youth in the community.'" CENTRE BLOCK PRESENTATION Mr. Frank Lewinberg, Urban Strategies Inc., was in attendance to report on the results of the Request for Expressions of Interest process for the redevelopment of the Centre Block. In this regard the Committee was in receipt of correspondence, dated February 27, 2003, from Mr. Lewinberg. Mr. Lewinberg advised that of the 25 firms who purchased a copy of the call brief, only 4 submitted Expressions of Interest by the December 20, 2002 deadline. These Expressions of Interest were evaluated by the consultant team and the Centre Block Steering Committee in accordance with the criteria in the call brief. He advised that the 4 submissions did not adequately respond to the full requirements of the call, and were short of the objectives of the process. In conclusion, Mr. Lewinberg recommended that this Request for Expressions of Interest be discontinued, and the City proceed no further with the 4 submissions. Upon questioning, Mr. Lewingberg advised there appears to be a lack of market interest in the property, partly because the property is partially vacant and part has building located on it. It is important that the City end this process, and then decided next steps. It may be important for the City to determine its own approach. Mr. Craig Robson addressed the Committee on behalf of the Centre Block Steering Committee, advising that the Steering Committee agrees with the consultant's recommendations. He suggested that continued revival of Downtown Kitchener depends on people living Downtown, and it is essential that the City attract people to live in the Centre Block. Mr. Robson explained that following the evaluation of the 4 submissions, the Steering Committee changed its role from 'judge' to putting forward suggestions for possible site development. Through this brainstorming process, the Steering Committee started to talk about relocation of the main library, its need to expand, and the amount of space an expanded library would require. The Steering Committee also considered that the current location of the library could be attractive for residential development, being on the edge of an attractive, older, residential neighbourhood. This type of development on the existing library property could generate income. Further, libraries attract people, and this attraction could be a catalyst for new development in the Centre Block. The discussions on Centre Block development took FINANCE & CORPORATE SERVICES COMMITTEE MINUTES MARCH 3~ 2003 - 35 - CITY OF KITCHENER 5. CENTRE BLOCK PRESENTATION (CONT'D) on a positive tone, and further discussions lead to the concept of a combined development including the library and condominium apartments in one building, having retail and office uses on the lower floor. There is a good possibility that major developers would be interested in such a proposal. There is also the possibility that locating the library in the Centre Block will attract partnerships with one or more educational institutions. Mr. Hans Pottkamper, Centre Block Steering Committee, continued the presentation, stressing that the proposal being put forward is only a concept, one that the Steering Committee believes has a good chance at success. This concept meets a number of other downtown needs: an enlarged modern library with increased patron parking, renewal of part of the City core, more living units in the Downtown, and a chance to reuse select existing buildings. Further this proposal will definitely be a catalyst for renewal of this block overall. With the aid of a PowerPoint presentation, Mr. Pottkamper then displayed images of the site and a concept of a proposed development on this site, including investment and ownership options. Following the presentation, Mr. Pottkamper put forward the following recommendation for this Committee's consideration: That the Steering Committee develop a plan and budget for Council review and approval by no later than the end of March, which will be sufficient to enable retention of expertise. The next step will be to report to Council once the required technical details have been obtained, and prior to public meetings. Using a combination of Council's direction, public consultation, costing information and staff input, the Steering Committee will provide Council with a series of recommendations on how the City might proceed with a new proposal call process. The City could then proceed with a request for proposal that is clearly focused but has enough flexibility to allow response to the market. Ms. C. Ladd advised that costs to date for this project are approximately $133,000, and there are still funds available to support the Steering Committee. Councillor J. Smola put forward a motion to support the recommendations of both Urban Strategies Inc. to end the current process, and to support the recommendations of the Steering Committee that they develop a plan and budget to be presented to this Committee on March 24, 2003. In response to questioning, Mr. Robson advised that even if the Centre Block is not developed, a new library is required. Without developing something on this property, it is worthless, and locating the library on the property will maximize the return. A discussion then took place with respect to the ability of the City to recoup its investment, Mr. Robson emphasizing that the Steering Committee is not making any specific recommendations in that regard at this time. On motion by Councillor J. Smola - it was resolved: "That Council not shortlist any of the expressions of interest received for the redevelopment of Centre Block, on the basis that the proposals received failed to adequately meet the requirements for Stage 1 of the Proposal Call; and, That the Proposal Call for the Centre Block be formally discontinued; and, That the Centre Block Steering Committee be directed to undertake a public process to test the vision for the redevelopment of the Centre Block which includes the relocation of the Main Kitchener Public Library Branch as a component of redevelopment; and, That the composition of the Centre Block Steering Committee for the public process be as follows: (a) Continued membership for the 3 lay members of the current Centre Block Steering Committee - Craig Robson, Ray Robinson and Hans Pottkamper; FINANCE & CORPORATE SERVICES COMMITTEE MINUTES MARCH 3~ 2003 5. - 36 - CITY OF KITCHENER CENTRE BLOCK PRESENTATION (CONT'D) (b) A representative from the Kitchener Public Library; and, (c) Jeff Fielding, CAO, Carla Ladd and Frank Pizzuto; and further, That the Centre Block Steering Committee be directed to prepare a plan and budget for the public process to test the vision for the redevelopment of the Centre Block, and report to the March 24, 2003 Finance and Corporate Services Committee meeting." CRPS-03-034- DECLARATION OF SURPLUS LANDS - OTTAWA STREET NORTH AND NOTTINGHAM AVENUE The Committee was in receipt of Corporate Services Department report CRPS-03-034, dated February 26, 2003, recommending that land at the northwest corner of Ottawa Street North and Nottingham Avenue be declared surplus to the City's needs. The report explains that this property, among others, is being considered by the Region of Waterloo as a Regional Emergency Medical Services Waiting Station. Mayor Zehr stated dialogue with the Region on this matter is required, and he suggested that the staff recommendation be deferred pending a presentation by the Region. On motion by Mayor C. Zehr - it was resolved: "That consideration of the following recommendation be deferred and referred to the March 24, 2003 Finance and Corporate Services Committee meeting, to be considered in conjunction with a presentation by and discussion with the Region with respect to the Regional Emergency Medical Services Waiting Station: 'That Part of Lots 13 and 14, Plan 760, located at the northwest corner of Ottawa Street North and Nottingham Avenue, be declared surplus to the City's needs.'" ADJOURNMENT On motion, the meeting adjourned at 5:40 p.m. Dianne H. Gilchrist Committee Administrator