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HomeMy WebLinkAboutFin & Corp Svcs - 2009-08-10FINANCE AND CORPORATE SERVICES COMMITTEE AUGUST 10. 2009 CITY OF KITCHENER The Finance and Corporate Services Committee met this date, commencing at 3:45 p. m. Present: Councillor B. Vrbanovic -Chair Mayor C. Zehr and Councillors J. Smola, J. Gazzola, K. Galloway and C. Weylie. Staff: C. Ladd, Chief Administrative Officer D. Chapman, General Manager, Financial Services & City Treasurer T. Speck, General Manager, Corporate Services J. Willmer, Interim General Manager, Development & Technical Services P. Houston, General Manager, Community Services R. Regier, Executive Director, Economic Development L. MacDonald, Director, Legal Services & City Clerk R. Gosse, Director, Legislated Services & City Clerk S. Turner, Director, By-law Enforcement G. Murphy, Director of Engineering M. Hildebrand, Director, Community Programs & Services R. Upfold, Director of Accounting L. Gordon, Director of Purchasing K. Eskens, Director of Financial Planning & Supply Services /Deputy City Treasurer G. Hummel, Manager of Parking Planning, Development & Operations C. York, Arts and Culture Co-ordinator C. Goodeve, Committee Administrator 1. CSD-09-043 -REVISED COUNCIL POLICY I-125 -TERMS OF REFERENCE - SAFE AND HEALTHY COMMUNITY ADVISORY COMMITTEE The Committee considered Community Services Department report CSD-09-043, dated June 26, 2009 regarding revisions to Council Policy I-125 (Terms of Reference -Safe and Healthy Community Advisory Committee). On motion by Councillor J. Smola - itwas resolved: "That Council Policy I-125 (Terms of Reference -Safe and Healthy Community Advisory Committee) be repealed and replaced with the revised Policy I-125, dated June 26, 2009, as attached to Community Services Department report CSD-09-043." 2. CSD-09-045 -COMMUNITY GARDENS LICENCE AGREEMENT - TEMPLATE AMENDMENT The Committee considered Community Services Department report CSD-09-045, dated July 21, 2009 regarding amendments to the Community Garden Grant policy, which is a component of Council Policy I-525 (Community Investment). On motion by Councillor J. Smola - itwas resolved: "That the Community Gardens Licence Agreement template be amended as outlined in Community Services Department report CSD-09-045; and further, That the General Manager of Community Services, or designate, be authorized to execute Community Gardens License Agreements, all such license agreements to be subject to the satisfaction of the City Solicitor." 3. CRPS-09-108 -REQUEST FROM K-W HIP HOP EXPO FESTIVAL TO HOLD A SPECIAL EVENT AT CIVIC SQUARE -SEPTEMBER 5, 2009 The Committee considered Corporate Services Department report CRPS-09-108, dated July 30, 2009 concerning a request to hold a special event. Councillor B. Vrbanovic commented that if a noise exemption is required in addition to the special event license, then staff could bring that forward for consideration at the August 24, 2009 Council meeting. FINANCE AND CORPORATE SERVICES COMMITTEE AUGUST 10. 2009 - 120 - CITY OF KITCHENER 3. CRPS-09-108 -REQUEST FROM K-W HIP HOP EXPO FESTIVAL TO HOLD A SPECIAL EVENT AT CIVIC SQUARE -SEPTEMBER 5, 2009 (CONT'D) On motion by Councillor J. Smola - itwas resolved: "That the request of the K-W Hip Hop Expo Festival to sell refreshments and merchandise in Civic Square on Saturday, September 5, 2009 be approved, provided the necessary licence is obtained, including Health approval." 4. CRPS-09-103 -EXEMPTION TO CHAPTER 450 (NOISE) OF THE MUNICIPAL CODE - W.C.C. NO. 364, 84 WESTMEADOW DRIVE The Committee considered Corporate Services Department report CRPS-09-103, dated July 30, 2009 regarding a noise exemption request. On motion by Councillor J. Smola - itwas resolved: "That an exemption to Chapter 450 (Noise) of the City of Kitchener Municipal Code be granted to Waterloo Condominium Complex No. 364 at 84 Westmeadow Drive on August 29, 2009, between the hours of 3:00 p. m. and 10:30 p. m., for a community pady „ 5. CRPS-09-104 -EXEMPTION TO CHAPTER 450 (NOISE) OF THE MUNICIPAL CODE - WATERLOO PENTECOSTAL ASSEMBLY - KIWANIS PARK The Committee considered Corporate Services Department report CRPS-09-104, dated July 30, 2009 concerning a noise exemption request. On motion by Councillor J. Smola - itwas resolved: "That an exemption to Chapter 450 (Noise) of the City of Kitchener Municipal Code be granted to the Waterloo Pentecostal Assembly for their church picnic and barbecue to be held in Kiwanis Park on Sunday, September 6, 2009, between the hours of 3:00 p. m. and 8:00 p. m." 6. CRPS-09-105 -EXEMPTION TO CHAPTER 450 (NOISE) OF THE MUNICIPAL CODE - K-W OKTOBERFEST EVENTS The Committee considered Corporate Services Department report CRPS-09-105, dated July 30, 2009 regarding a noise exemption request. On motion by Councillor J. Smola - itwas resolved: "That an exemption to Chapter 450 (Noise) of the City of Kitchener Municipal Code be granted to K-W Oktoberfest Inc. for a series of events being held at various clubs between October 3 and October 17, 2009, as outlined in the letter from K-W Oktoberfest Inc., dated June 23, 2009, attached to Corporate Services Department report CRPS-09- 105." 7. CRPS-09-107 -EXEMPTION TO CHAPTER 450 (NOISE) OF THE MUNICIPAL CODE - DOON PIONEER PARK COMMUNITY ASSOCIATION The Committee considered Corporate Services Department report CRPS-09-107, dated July 30, 2009 regarding a noise exemption request. On motion by Councillor J. Smola - itwas resolved: FINANCE AND CORPORATE SERVICES COMMITTEE AUGUST 10. 2009 - 121 - CITY OF KITCHENER 7. CRPS-09-107 -EXEMPTION TO CHAPTER 450 (NOISE) OF THE MUNICIPAL CODE - DOON PIONEER PARK COMMUNITY ASSOCIATION (CONT'D) "That an exemption to Chapter 450 (Noise) of the City of Kitchener Municipal Code be granted to the Doon Pioneer Park Community Association for their annual outdoor concert and festival to be held on September 26, 2009, between the hours of 2:00 p. m. and 10:00 p. m." 8. CRPS-09-106 -EXEMPTION TO CHAPTER 450 (NOISE) OF THE MUNICIPAL CODE - WYANDOTTE WARRIORS - WYANDOTTE COURT The Committee considered Corporate Services Department report CRPS-09-106, dated July 30, 2009 regarding a noise exemption request. It was noted in the agenda that any recommendation from the Committee concerning this matter would be considered at the special Council meeting to be held later this same date. On motion by Councillor J. Smola - itwas resolved: "That an exemption to Chapter 450 (Noise) of the City of Kitchener Municipal Code be granted to the Wyandotte Warriors for a street party on Wyandotte Court on August 15, 2009, between the hours of 2:00 p. m. and 10:00 p. m." 9. DELEGATION PRESENTATION -RESOLUTION PROPOSED BY WATERLOO REGIONAL LABOUR COUNCIL - EMPLOYMENT INSURANCE SYSTEM The Committee was in receipt of a presentation from the Waterloo Regional Labour Council (WRLC) concerning reforms to Canada's Employment Insurance (EI) system. Mr. Len Carter, President, WRLC reviewed the presentation and requested that the City of Kitchener call upon the Government of Canada to introduce the following changes to EI: • 360 hours to qualify for EI benefits in all regions of Canada; • increase benefit duration to at least 50 weeks in all regions; • provide an additional year of "special extension" benefits if national unemployment exceeds 6.5%, paid from federal general revenues; • extend EI Part 1 benefits while a worker is on approved training; and, • increase benefits to at least 60% of normal earnings using workers' 12 best weeks, raise the maximum, suspend the allocation of severance pay and eliminate the two-week waiting period. Mayor C. Zehr advised that a similar resolution to the one presented by Mr. Carter was passed at the 2009 Federation of Canadian Municipalities (FCM) Annual Conference. He stated that while he recognizes that EI does not fall under the City's jurisdiction, reforms are needed; as such, the City could request the federal government to examine this issue. He then circulated a copy of FCM's EI resolution to staff and suggested that it be reviewed in conjunction with the one put forward by WRLC. At the request of Mayor Zehr, the Committee agreed to defer and refer consideration of this matter to the August 24, 2009 Council meeting pending a report from staff on this issue. 10. DELEGATION PRESENTATION -KITCHENER MINOR SOCCER CLUB The Committee was in receipt of a presentation from the Kitchener Soccer Club entitled "Building Better People Through Soccer", dated August 2009 which provides an overview of the Club's current activities and strategic plan. Mr. Franck Hivert, President, Kitchener Soccer Club reviewed the presentation. In response to questions, Mr. Hivert advised that the Kitchener Soccer Club's future vision is to have 11 players starting on international professional teams; and to be a model club in Canada where children become involved at an early age and develop into coaches/mentors and board FINANCE AND CORPORATE SERVICES COMMITTEE AUGUST 10. 2009 - 122 - CITY OF KITCHENER 10. DELEGATION PRESENTATION -KITCHENER MINOR SOCCER CLUB (CONT'D) members to carry out this goal. He noted that soccer is becoming more popular in this area for a number of reasons, among which being the relatively high number of immigrants who decide to settle in Waterloo Region. He agreed to provide the Committee with additional information showing the Club's projected growth compared to other sports and the growth rate of soccer in other communities. He stated that based on the current level of usage and the field quality standards set out by the Ontario Soccer League it is estimated that an additional 16 soccer fields will be needed by 2014. Mr. G. Hummel estimated the cost of constructing a Class Al soccer field, similar to the one at Budd Park, at $400,000. and an additional $200,000. to install lights. He added that the City spends approximately $30,000. annually to maintain these types of fields. He stated that as per the recommendations of the Leisure Facilities Master Plan (LFMP), funding has been allocated in the Capital Forecast in 2015 for the construction of new soccer fields at the proposed South District Park. He advised that when the LFMP was presented in 2005 the need for soccer fields was based on the projected increases in population. He commented that at that time soccer fields had only a 60% usage rate, but are now at 100% capacity. He noted that staff anticipates presenting a report in September 2009 on the Parks Master Plan update, which speaks in part to the construction of additional fields. Councillor B. Vrbanovic requested that when staff report back on the Parks Master Plan update they also provide information on the following: the need for additional fields; how the situation in Kitchener compares to other municipalities; how this issue compares to those faced by minor hockey; and, the impact of immigration. He commented that a similar commitment should be made to soccer as exists for hockey, being that every child who wants to play should have an opportunity to do so. He suggested that staff dialogue with the Kitchener Soccer Club as to how to move forward. 11. CSD-09-044 -CHARLES AND BENTON STREET GARAGE -PUBLIC ART PROJECT The Committee considered Community Services Department report CSD-09-044, dated July 20, 2009 regarding the installation of Ted Fullerton's sculpture "Pedestrian" at the Charles and Benton Parking Garage. Ms. C. York reviewed the report. Mayor C. Zehr expressed concerns regarding the possibility of the sculpture's seventh figure, proposed to be installed at street level near the Benton Street entrance, being subject to vandalism. He requested that staff report back to the August 24, 2009 Council meeting on the possibility of relocating this portion of the sculpture. Ms. York advised that the proposed site-specific sculpture is intended to respond directly, both visually and conceptually, to the goal of promoting pedestrian first values. She stated that one of the objectives of locating the seventh figure at street level was to act as an aid in identifying the entrance to the parking garage and add to the flow of the design which suggests a progression of movement. Several members commented that vandalism is a concern with all public art and that relocating this portion of the sculpture could take away from what the artist intended for his artwork. Councillor B. Vrbanovic noted that this location could be monitored by a security camera, which would reduce the chance of vandalism. Councillor C. Weylie enquired into the selection process and was advised that it took the Public Art Working Group and the Arts and Culture Advisory Committee approximately two months to review the submissions, hear the artists' presentations and conduct interviews. Councillor Weylie put forward that any proposed changes to the design of Mr. Fullerton's sculpture should be considered by the Public Art Working Group and the Arts and Culture Advisory Committee. On motion by Councillor C. Weylie - itwas resolved: "That the Mayor and Clerk be authorised to execute an agreement, satisfactory to the City Solicitor, with Ted Fullerton for the commission and installation of his artwork entitled "Pedestrian" at the Charles and Benton Parking Garage." FINANCE AND CORPORATE SERVICES COMMITTEE CAO-09-039 -SOLE SOURCING FOR ORGANIZATION DESIGN REVIEW The Committee considered Chief Administrator's Office report CAO-09-039, dated July 23, 2009 recommending that the Purchasing By-law's selection requirements be waived to allow Western Management Consultants to be retained to undertake an Organization Design Review of the City. Ms. C. Ladd reviewed the report and advised that an integral part of the Consolidated Maintenance Facility Project (CMF) is the review of work processes, management systems and organizational structures related to those functions which will be moving to the new CMF. She added that given the significance of these functions, encompassing approximately half of the City's workforce, and their location in several different departments, such a review could and is likely to impact the entire organization. As such, a comprehensive review having broad considerations of such factors as leadership approach, management systems, operational practises and formal structures is warranted and advisable to run parallel with the CMF review. She stated that Western Management Consultants have been engaged over the past 12 months to assist in the review related to the CMF and therefore have significant background knowledge of both it and the organization as a whole, which would ensure integration of both reviews. In response to questions regarding the necessity of carrying out the proposed review, Ms. Ladd spoke to the importance of being proactive and having measures in place throughout the organization to ensure the smooth transition of services to the CMF; rather than having to make a number of incremental adjustments after everything has been implemented. Referring to the lessons learned from work on the corporate approach to project management, she noted the value that can be gained by looking at the best ways of managing change and by ensuring that all of the different pieces of the organization are working together properly. She added that staff at all levels of the organization have been engaged throughout the CMF process and Western Management Consultants are planning on continuing this as part of their review. Councillor J. Gazzola advised that he did not support the staff recommendation as he questions the purpose of the review. He then enquired as to when information would be provided on the overall cost of the CMF and was advised that staff anticipate presenting a report on that issue at the September 14, 2009 Finance and Corporate Services Committee meeting. He asked if consideration of this matter could be deferred to that time and Ms. Ladd noted the importance of moving forward with the review given the pending consolidation of operational functions to the CMF. She added that the outcomes of the review would also be helpful to Council when consideration is given to the 2010 budget. It was noted in the agenda that any recommendation from the Committee concerning this matter would be considered at the special Council meeting to be held later this same date. On motion by Councillor K. Galloway - itwas resolved: "That the consultant selection requirements of the Purchasing By-law be waived and Western Management Consultants be retained to undertake an Organization Design Review for the City, for a fee not to exceed $45,990. based on a satisfactory contract being negotiated; and further, That the Mayor and Clerk be authorized to execute an agreement, satisfactory to the City Solicitor, with Western Management Consultants to undertake the Organization Design Review." 13. FIN-09-104 - REQUEST FOR PROPOSAL (P09-051) AWARD -EXTERNAL AUDITOR The Committee considered Financial Services Department report FIN-09-104, dated August 4, 2009 regarding the appointment of KPMG LLP as the City's Auditor. Ms. R. Upfold reviewed the report. Councillor J. Gazzola requested that additional information be provided regarding the past fees paid by the City for audit services and a breakdown as to the portions of the proposed fee attributed to the Corporation and to the other groups receiving these services. FINANCE AND CORPORATE SERVICES COMMITTEE AUGUST 10. 2009 - 124 - CITY OF KITCHENER 13. FIN-09-104- REQUEST FOR PROPOSAL (P09-051) AWARD - EXTERNAL AUDITOR (CONT'D) It was noted in the agenda that any recommendation from the Committee concerning this matter would be considered at the special Council meeting to be held later this same date. On motion by Mayor C. Zehr - itwas resolved: "That proposal P09-051, Audit Services, be awarded to KPMG LLP, Waterloo at their proposed price of $769,260. plus applicable taxes, for a term of five years for the fiscal periods 2009 through 2013; and further, That section 1.1 of Chapter 103 (Auditor) of the City's Municipal Code be amended to effect the appointment of KPMG LLP as the City's Auditor." 14. FIN-09-092- INFRASTRUCTURE STIMULUS FUND PROJECT UPDATE -AUGUST 2009 The Committee considered Financial Services Department report FIN-09-092, dated August 6, 2009 regarding the status of the City's Stimulus Funding projects. Mr. D. Chapman reviewed the report. In response to questions, Mr. Chapman advised that additional information is required in order for the Aquatic Facility Upgrade project to be confirmed approved. He stated that staff will be compiling and submitting this information the week of August 10th and expect that a final determination will be made shortly thereafter. He noted that as the City's total funding obligation is not yet finalized and the 2010 budget process is now underway, it is recommended that the City's share of funding for Recreational Infrastructure Canada (RInC) projects be identified in the 10-year Capital Forecast. Concerning Storm Water Infrastructure Rehabilitation projects, Mr. G. Murphy advised that staff are requesting that the projects involving drainage upgrades only, be expedited by utilizing existing general contractors and current construction contracts through a standard change order process as per purchasing guidelines. At the request of Councillor B. Vrbanovic, Mr. Chapman agreed to provide information in the next Stimulus Funding projects bi-monthly report on the possibility of applying for funds under the Green Infrastructure Program for some of the projects which were awarded funding through the Local Environmental Action Fund (LEAF). On motion by Councillor K. Galloway - itwas resolved: "That the City of Kitchener's 1/3 share of funding for eligible project costs for approved Recreational Infrastructure Canada projects be identified through the 2010 budget process and funded within the 10 year Capital Forecast; and further, That the following additional measure be approved to accelerate the implementation of Stimulus Funding projects: • Storm Water Infrastructure Rehabilitation projects, involving drainage upgrades only, will be delivered by general contractors under existing construction contracts through a standard change order process as per purchasing guidelines." 15. FIN-09-105 -JUNE 2009 FINANCIAL STATEMENTS The Committee considered Financial Services Department report FIN-09-105, dated August 5, 2009 regarding interim financial statements for the six months ended June 30, 2009, which are provided to update Council on City expenditures and revenues compared to the 2009 budget and to explain significant variances. Mr. D. Chapman advised that the projected year-end deficit is $513,000. which equates to a FINANCE AND CORPORATE SERVICES COMMITTEE AUGUST 10. 2009 - 125 - CITY OF KITCHENER 15. FIN-09-105 -JUNE 2009 FINANCIAL STATEMENTS (CONT'D) negative variance of 0.4% on a $127M annual operating budget. He noted that the deficit would be approximately $4,389,000. before taking into account the deficit mitigation initiatives implemented by staff in the first six months of the year, as outlined in report FIN-09-105. He stated that as more refined projections are developed, staff will be able to assess the need for further action and mitigation efforts and will update Council as part of the next interim report. In response to questions, Mr. Chapman advised that staff attempt to provide the most realistic estimates based on the information that is known at the time of preparing the year-end projection, however there are some areas with significant budgets that are difficult to predict at this time. He stated that the City annually receives three supplementary tax summaries from the Municipal Property Assessment Corporation (MPAC), but have yet to receive one this year. He advised that it is estimated that rebates/refunds/reductions will increase this year due to the recent reassessment and current economic conditions, adding that supplementary taxes are estimated to be lower than budget. He further advised that staff has calculated the annual budget for investment income based on a 5-year history on both rate and average balance. He added that with recent market corrections and adjustments of over 220 basis points, investment income is not expected to return the same surplus as in previous years and is only expected at this point to achieve 34% of last year's returns. Several members spoke to the challenges that the City will have to face in setting the next budget and expressed appreciation of the actions undertaken by staff to in order to mitigate the effects of the potential deficit. FIN-09-091 - 2010 BUDGET GUIDELINES The Committee considered Financial Services Department report FIN-09-091, dated July 7, 2009 regarding the key elements of the 2010 budget plan, including the approach, timetable and financial guidelines. Mr. D. Chapman advised that in January 2009 staff projected a tax levy target of 6.83% and since that time this has been reduced to 3.74%, which includes 1.20% for the Economic Development Investment Fund (EDIF). He noted that according to the Annual Municipal Competitiveness Study prepared by BMA Consultants, for the 2"d year in a row, Kitchener has had the fourth lowest average residential property taxes out of Ontario's 26 largest municipalities. He then reviewed the adjustments which form part of the proposed 2010 budget guideline as outlined in Appendix "A" of the staff report. He pointed out that the main areas that require budget corrections are winter control, supplementary taxes, and investment income. He noted that these budget items are non-controllable as they are either driven by the economy or weather. He stated that to "right-size" these budgets it would require a levy increase of approximately 2.5% when looking at a four year average revenue/expenditure compared to budget. Accordingly, staff are recommending a modest budget correction as a first step in realigning these budgets. He noted that failure to do so will inevitably result in continued operating deficits which cannot be perpetually funded through the Tax Stabilization Reserve Fund. He stated that some significant components of near-term projected levy increases relate to the City's commitment to EDIF, the operating expenses of a new/expanded library in 2011 and market-based pay structure adjustments which are being phased in over several years. He outlined that to achieve the recommended levy position, the 2010 budget guidelines would decrease the 2009 net tax-supported base operating budget through cuts of 2% ($1.8M), freeze discretionary spending increases for the fourth year in a row and not permit program expansion or staff additions that were not planned and budgeted for previously or required by legislation. In response to questions, Mr. Chapman advised that the Bank of Canada forecasts that all- items and core inflation rates will gravitate to a 2% target in 2010 and current forecasts anticipate an Ontario CPI around 1.9%. Regarding potential user fee increases, Mr. Chapman advised that each additional 1% fee increase translates to a 0.2% levy reduction and accordingly a 5% increase would equate to a 1% reduction in the tax levy. He outlined that a fee increase of this nature would significantly impact community programs and services as well as parking fees. Concerning the Tax Stabilization Reserve Fund, he stated that the opening balance of that Fund reflects the 2008 deficit close out. FINANCE AND CORPORATE SERVICES COMMITTEE AUGUST 10. 2009 - 126 - CITY OF KITCHENER 16. FIN-09-091 - 2010 BUDGET GUIDELINES (CONT'D) On motion, Mayor C. Zehr brought forward the recommendation contained in report FIN-09- 091 for consideration with an amended clause one directing staff to submit a 2010 tax based operating budget for consideration with an increase below the rate of 3%, including the budget increase for EDIF, currently projected to be 1.2%. Councillor J. Gazzola advised the he would not support the proposed recommendation, noting that in his opinion the tax levy should be set at a rate that is lower than inflation. He commented that wages make up 61% of the budget and suggested that this could be examined as a possible means of reducing the impact of the tax levy. The following motion was Carried on a recorded voted, with Mayor C. Zehr and Councillors K. Galloway, J. Smola, B. Vrbanovic and C. Weylie voting in support and Councillor J. Gazzola voting in opposition. It is noted that Councillor G. Lorentz was not in attendance at this meeting and accordingly, did not vote. On motion by Mayor C. Zehr - itwas resolved: "That staff be directed to submit a 2010 tax based operating budget for consideration with an increase below the rate of 3%, including the budget increase for EDIF, currently projected to be 1.2%; and, That staff and local boards be directed to prepare a tax based operating budget for 2010 that: • excludes any increases to discretionary expenditures; • excludes any requests for additional staff unless previously approved and budgeted or required by legislation; • excludes program expansion requests unless previously approved and budgeted; • removes the notional provision for 0.5% for strategic initiatives; • includes across the board increases to user fees of 5.20% while providing additional funding of $20,000. for leisure access card subsidies representing the third year of a three-year phase in; • strives to identify cuts to budgets to achieve a 2% ($1.8M) 2009 base budget reduction while not compromising the long-term financial stability of the municipality; and, That the 2010 budget meeting timetable outlined in Financial Services Department report FIN-09-091 be approved, subject to the potential adjustment of the timing of final budget day to conform to the 2010 meeting calendar; and further, That the $9,525,000. 20-year debenture issue approved for 2009 for the Charles/Benton Parking Structure be deferred until substantially completion of the project in 2010." ADJOURNMENT On motion, the meeting adjourned at 6:15 p. m. C. Goodeve Committee Administrator