Finance _ Corporate Services Committee Agenda

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					                                        Finance & Corporate Services Committee
                                                       Agenda
                                                       Monday, February 28, 2011
    Office of the City Clerk
    Kitchener City Hall                                  9:00 am - 12:00 p.m.
                        nd
    200 King St.W. - 2 Floor                              1:00 pm - 3:00 pm
    Kitchener ON N2G 4G7
                                                          Council Chamber

    Page 1                     Chair - Councillor J. Gazzola               Vice-Chair - Councillor S. Davey


Consent Items
All matters listed under this section are considered not to require debate by the Committee and should be
approved by one motion in accordance with the recommendation contained in each staff report.

      Nil

Delegations
Pursuant to Council’s Procedural By-law, delegations are permitted to address the Committee for a maximum of 5
minutes.

      Sonia Lewis, CEO and Board Representative - Kitchener Public Library (KPL)
      Roger Farwell, Creative Enterprise Enabling Organization

Discussion Items
1.       Kitchener Public Library Report - Proposed Operating Budget Reduction                       (20 min)

2.       Creative Enterprise Enabling Organization - Arts & Culture Sustainability Fund              (20 min)

3.       FCS-11-036 - 5% Tax Supported Budget Reductions
                 Issue Papers
                   (Note: all issue papers for discussion on February 28th are included in the March 1st
                    Budget Agenda Package)

Information Items

      FCS-11-032 - Stimulus Project Update - February 2011
      Unfinished Business List

The Committee will recess for lunch at 12:00 noon and reconvene at 1:00 p.m.

Janet Billett, AMCT
Committee Administrator
                                                                                REPORT

REPORT TO:               Chair Gazzola and Members of Finance and Corporate Services

DATE OF MEETING:         February 28, 2011

SUBMITTED BY:            Kitchener Public Library Board

PREPARED BY:             Sonia Lewis, CEO, Kitchener Public Library, 519.743.0271, ext. 244

WARD(S) INVOLVED: All

DATE OF REPORT:          February 17, 2011

SUBJECT:                 PROPOSED OPERATING BUDGET REDUCTION

RECOMMENDATION:

For information only.

BACKGROUND:

In 2010 City funding for Kitchener Public Library increased by less than a quarter of one
percent. This funding level resulted in an 11% cut to KPL’s budget for books, AV materials and
electronic resources, reducing it to its 2004 level. The staffing complement was reduced by
almost 4 full-time equivalents. In addition, KPL reduced the cost of living increase allowed
under the budget guidelines and cut the staff training budget by 31%. In the end KPL cut
expenses by 3% in 2010.

In accordance with the City’s budget guidelines, Kitchener Public Library’s proposed 2011
operating budget included a 2.5% increase to the base budget and a growth allocation of
$37,000 for RFID costs. No new staffing was included in the budget.

The purpose of this report is to respond to Council’s request for potential budget reduction
strategies up to 5%. The report also outlines the impact of operating budget reductions on
services provided by the Library. A one percent reduction in City funding equates to
approximately $89,000.

REPORT:

At its February 16, 2011 meeting the Kitchener Public Library Board reviewed Council’s request
for potential operating budget reductions. A number of options up to a 5% cut were examined
by the Library Board. Consideration was given to both revenue generating opportunities and
possible reductions to operating expenses. No opportunities were identified to increase
revenues, largely due to the anticipated impact of the central library project.

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Only one viable cost reduction option was identified by the KPL Board. This option would cut
$24,600 or 0.28% from the budget.

All other options reviewed by the Library Board are not viable as they would have significant
impacts on public service at a time when library services, collections and programs are in
demand.

FINANCIAL IMPLICATIONS:

Option 1 – Cut 0.28%

Savings identified for this option are offset by the need for an additional $43,000 to cover the
OMERS pension rate increase. When the budget was submitted to the City in August 2010, the
full impact of the OMERS rate increase was unknown.

Potential Expense Reductions
       Public Programs                                                     $ (5,700)
       Resource Materials (books, AV materials, electronic resources)      $(25,900)
       Processing/Bindery                                                  $ (3,000)
       Staff Training                                                      $ (6,000)
       Postage, Delivery and Stationery                                    $(12,000)
       Equipment Maintenance and Facilities Expenses                       $(15,000)
       Pension Benefits – add costs for OMERS rate increase                $ 43,000
       Total Reduction                                                     $(24,600)

Option 1 Impact:

Eliminating the 2% inflationary increase in 2011 for resources results in a 0% increase to this
budget line. Since the resource materials budget was cut by 11% in 2010, this means it
remains at its 2004 level. Even with a frozen budget, we have reduced buying power. Costs for
print and AV materials are expected to increase by 1-3% in 2011. Price increases for electronic
resources have been averaging 5%/year.

The provision of recreational and information resources is a core library service. Freezing or
cutting the resources budget has a direct impact on the service we provide to the community as
it means fewer new items would be added to KPL collections. For high demand items this
results in longer turnaround to satisfy holds that customers place on items. It means collections
in languages other than English and French cannot keep pace with the growth in our
multicultural communities, impacting the service we are able to provide to new Canadians. It
limits our abilities to expand our electronic resources at a time when the demand for
downloadable titles doubled last year and continues to increase.

Staff training was reduced by 31% in 2010. The 2011 budget restores some of that cut.
Reduced funding for training limits our ability to develop skills and respond to changes,
particularly in the area of technology and its application in libraries.

Option 2 – Cut 1%

Given the impact on public service, compounded by the effect of cuts made in 2010, the Library
Board feels a 1% cut is not viable.


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                                                                                                1-2
Potential Expense Reductions
       Option 1 cuts (includes 2% cut to Resources)                           $(24,600)
       Salaries – reduce staffing                                             $(64,700)
       Total Reduction                                                        $(89,300)

Option 2 Impact:

Implementing this option would require cutting five positions (3 full-time equivalents), reducing
staffing levels at circulation and information desks and impacting public service system-wide.
This is in addition to the almost 4 full-time equivalents cut in the 2010 budget which also
impacted public service staffing.

Customers would experience longer line-ups, on occasion information desks would be closed
and telephone reference service would be reduced and possibly eliminated. Transferring
support services staff to public services to assist with the gaps in public service would result in
longer turnaround times to get new materials ordered and ready for the public.

Public service would be further impacted as this option includes the 2% cut to the resources
budget outlined under Option 1.

Option 3 – Cut 3%

A 3% cut is not viable given its significant impact on public service.

Potential Expense Reductions
       Options 1 and 2 cuts (includes cuts to resources and salaries)         $ (89,300)
       Additional Resource Materials                                          $ (89,300)
       Additional Salaries                                                    $ (89,300)
       Total Reduction                                                        $(267,900)

Option 3 Impact:

Only the resources and salaries budget lines could fund this level of cut and there would be
significant impacts on public service, possibly on service hours.

Total cut to resources would be 10% or $115,200 (including $25,900 from option 1). $115,200
buys approximately 4,100 books which equates to 12% of the total new books acquired in 2010.
The impact of cutting the resources budget is outlined under Option 1.

Total cut to salaries would be $154,000 (including $64,700 from option 2). This equates to 5
full-time equivalents and would impact 7-9 positions.

Staffing cuts would result in reduced services and programs. Off desk activities would be
reduced so we could staff information and circulation desks. There would be reduced support
for students in our shared high school/library facilities. Storytimes which develop reading and
early literacy skills would be cut back. Reduced staffing levels would impact our ability to
participate in community events like Kidspark and Word on the Street, putting a greater burden
on our partners, like the City. Customers would experience longer line-ups for service. It would
take longer for returned items to be reshelved.



                                                                                                      3 
 
                                                                                                 1-3
Option 4 – Cut 5%

A 5% cut would require significant reductions to public service levels and hours of service. This
level of cut is not viable.

Potential Expense Reductions
       Options 1, 2 and 3 cuts (includes cuts to resources and salaries)    $(267,900)
       Additional Resource Materials                                        $ (89,300)
       Additional Salaries                                                  $ (89,300)
       Total Reduction                                                      $(446,500)

Option 4 Impact:

Only the resources and salaries budget lines could fund this level of cut and there would be
significant impacts on public service as outlined in options 1-3 above. In addition, service hours
would be impacted. Options the Library Board would need to consider would include a two
week system-wide closure, closing Sundays year round and/or closing one evening per week
system-wide.

Total cut to salaries would be $243,300 or over 8 full-time equivalents, impacting 11-13
positions.

Total cut to resources would be 18% or $204,500. Compared to last year, this would result in
purchasing 22% fewer books.


CONCLUSION:

Kitchener Public Library services are in demand city-wide. Circulation has increased 22% in the
past five years. Families, seniors, the unemployed and other residents turn to the library in
tough economic times for access to free information and recreational resources, services and
programs. The cuts absorbed in 2010 cannot be sustained. A reduction of $24,600 could be
achieved, albeit with some impact on the public given the reduced buying power for books, AV
materials and electronic resources. Further cuts beyond that level would have significant
impacts on Kitchener residents and are not recommended by the Kitchener Public Library
Board.




ACKNOWLEDGED BY: Sonia Lewis, CEO, Kitchener Public Library




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                                                                                               1-4
REPORT TO:                       Finance and Corporate Services Committee
DATE OF MEETING:                 February 28, 2011

SUBMITTED BY:                    Dan Chapman, Deputy CAO
PREPARED BY:                     Ryan Hagey, Manager of Financial Planning
WARD(S) INVOLVED:                All

DATE OF REPORT:                  February 18, 2011

REPORT NO.:                      FCS-11-036

SUBJECT:                         5% Tax Supported Budget Reduction Options



RECOMMENDATION:

For discussion

BACKGROUND:

At a meeting on February 14, 2011, City Council resolved:
That for budget deliberations, staff compile a list of potential items for reduction that would effect
a decrease ranging from 1% up to 5% in the overall proposed tax levy increase of 1.94% for
2011 and outline the implications associated with each item listed for potential reduction.

The Finance and Corporate Services Committee meeting scheduled for February 28, 2011 will
be used to review the proposed reductions, as well as preview the additional issue papers
included in the March 1, 2011 agenda. No decisions will be made at this meeting, as it will be
used to clarify, question and understand budget items better in advance of the budget meeting
scheduled for March 1, 2011. Delegations may also be heard with respect to the budget
reduction scenarios.


REPORT:

As directed, the Corporate Leadership Team has prepared a listing of feasible tax-supported
budget reductions totalling up to 5.21%. Attached to this report is a summary sheet outlining the
potential reductions followed by a detailed listing of each reduction and the potential
risks/impacts associated with each.




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ALIGNMENT WITH CITY OF KITCHENER STRATEGIC PLAN:

Foundation: Efficient and Effective Government
Goal: Financial Management
Strategic Direction: Strive for competitive, rational and affordable taxation levels


FINANCIAL IMPLICATIONS:

Financial implications for each potential reduction are provided in the attachment.


COMMUNITY ENGAGEMENT:

To the extent possible, staff have contacted stakeholders directly impacted by budget reduction
proposals to advise of the nature of the proposals and the details of the February 28 meeting.
This report was also posted to the City’s budget page once complete along with final budget day
materials.




 ACKNOWLEDGED BY:               D. Chapman, Deputy CAO and City Treasurer (Finance and Corporate
                                Services)




                                                                                            3-2
2011 Budget Reduction Tracker

Item    Item                                                  Min. $ Levy Max. $ Levy     Min. % Levy Max. % Levy Min. Home     Max. Home
  #     Name                                                  Reduction Reduction         Reduction    Reduction   $ Impact      $ Impact
        Office of the CAO
   1    Reduce CAO capital accounts                               (8,000)      (8,000)         (0.01%)    (0.01%)      (0.08)        (0.08)
   2    Remove additional support person for Council             (60,000)     (60,000)         (0.06%)    (0.06%)      (0.57)        (0.57)
   3    Oktoberfest/Christmas Floats                             (15,000)     (15,000)         (0.02%)    (0.02%)      (0.14)        (0.14)
   4    Printshop Efficiencies                                   (20,000)     (20,000)         (0.02%)    (0.02%)      (0.19)        (0.19)
   5    Market Reduction                                          (8,500)      (8,500)         (0.01%)    (0.01%)      (0.08)        (0.08)
        Community Services                                                                           -          -
   6    Communities in Bloom                                      (7,000)      (7,000)         (0.01%)    (0.01%)      (0.07)        (0.07)
   7    Eliminate Recreation Program Grant                       (13,900)     (13,900)         (0.01%)    (0.01%)      (0.13)        (0.13)
   8    Close Community Centres over Christmas Holidays          (20,000)     (20,000)         (0.02%)    (0.02%)      (0.19)        (0.19)
   9    Eliminate Movie Licences                                  (6,000)      (6,000)         (0.01%)    (0.01%)      (0.06)        (0.06)
  10    Eliminate Rec. Grants to Neighbourhood Associations      (15,045)     (15,045)         (0.02%)    (0.02%)      (0.14)        (0.14)
  11    Summer Playgrounds - close 4 programs                    (20,000)     (20,000)         (0.02%)    (0.02%)      (0.19)        (0.19)
  12    Reduce Newsletter Printing                                (7,000)      (7,000)         (0.01%)    (0.01%)      (0.07)        (0.07)
  13    Convert Breithaupt Wading Pool to Splash Pad             (11,000)     (11,000)         (0.01%)    (0.01%)      (0.10)        (0.10)
  14    EPC Grant Increase                                       (54,000)     (54,000)         (0.06%)    (0.06%)      (0.51)        (0.51)
  15    Eliminate Summer Youth Drop in age 18+                    (4,400)      (4,400)         (0.00%)    (0.00%)      (0.04)        (0.04)
  16    Reduce Urban Design capital account                      (50,000)     (50,000)         (0.05%)    (0.05%)      (0.47)        (0.47)
  17    Communication Towers on City Buildings                   (10,000)     (10,000)         (0.01%)    (0.01%)      (0.09)        (0.09)
  18    Adjust Cemetery Interest                                 (46,900)     (46,900)         (0.05%)    (0.05%)      (0.44)        (0.44)
  19    Delayed opening at Bridgeport Community Centre          (150,221)    (150,221)         (0.15%)    (0.15%)      (1.42)        (1.42)
  20    Reduce City Run Festivals                                    -        (40,000)               -    (0.04%)        -           (0.38)
        Finance and Corporate Services
  21    Purchasing Wages                                         (14,155)     (14,155)         (0.01%)    (0.01%)      (0.13)        (0.13)
  22    REEP Grant                                               (27,500)     (27,500)         (0.03%)    (0.03%)      (0.26)        (0.26)
  23    Computer/Telephone Charges                               (50,000)     (50,000)         (0.05%)    (0.05%)      (0.47)        (0.47)
        Infrastructure Services
  24    Turf Maintenance                                        (114,000)    (114,000)         (0.12%)    (0.12%)      (1.08)        (1.08)
  25    Sportsfield Maintenance                                  (49,000)     (49,000)         (0.05%)    (0.05%)      (0.46)        (0.46)
  26    City Hall Fountain to Reflecting Pool                     (7,000)      (7,000)         (0.01%)    (0.01%)      (0.07)        (0.07)
  27    Rockway Fountain                                         (23,000)     (23,000)         (0.02%)    (0.02%)      (0.22)        (0.22)
  28    Outdoor Pools (Kiwanas) reduced season                   (17,550)     (17,550)         (0.02%)    (0.02%)      (0.17)        (0.17)
  29    Outdoor Pools reduced season                             (30,000)     (30,000)         (0.03%)    (0.03%)      (0.28)        (0.28)
  30    SWM Charitable Organization Exemption                   (150,000)    (300,000)         (0.15%)    (0.31%)      (1.42)        (2.83)
  31    Reduce Engineering capital accounts                     (314,900)    (314,900)         (0.32%)    (0.32%)      (2.97)        (2.97)
  32    Parking                                                 (250,000)    (493,894)         (0.26%)    (0.51%)      (2.36)        (4.66)
  33    Delayed opening of McLennan Park                         (90,333)     (90,333)         (0.09%)    (0.09%)      (0.85)        (0.85)
  34    Other Decorative Fountains                               (50,000)     (50,000)         (0.05%)    (0.05%)      (0.47)        (0.47)
        General
  35    Kitchener Public Library                                     -             -                                     -             -
  36    Gapping                                                      -        (175,000)              -    (0.18%)        -           (1.65)
  37    Fringe                                                  (180,000)     (180,000)        (0.18%)    (0.18%)      (1.70)        (1.70)
  38    EDIF                                                    (250,000)     (500,000)        (0.26%)    (0.51%)      (2.36)        (4.72)
  39    Hydro                                                   (150,000)     (150,000)        (0.15%)    (0.15%)      (1.42)        (1.42)
  40    Reduce Recognition Reception                              (4,000)      (25,000)        (0.00%)    (0.03%)      (0.04)        (0.24)
  41    Reduce Advertising & Publicity by 10%                    (36,000)      (36,000)        (0.04%)    (0.04%)      (0.34)        (0.34)
  42    CITS additional grant                                        -         (87,000)              -    (0.09%)        -           (0.82)
  43    Staff Recognition Event                                   (6,000)       (6,000)        (0.01%)    (0.01%)      (0.06)        (0.06)
  44    Management Salary Adjustment (grade 12 and up)               -        (155,000)              -    (0.16%)        -           (1.46)
  45    Increase Userfees 1%-2% (effective July 1)              (100,000)     (200,000)        (0.10%)    (0.20%)      (0.94)        (1.89)
  46    Reduction of General Provisions                              -        (275,000)              -    (0.28%)        -           (2.60)
  47    Tax Stabilization Reserve Fund                          (500,000)     (750,000)        (0.51%)    (0.77%)      (4.72)        (7.08)
  48    Increase transfer from Gas Utility                           -        (400,000)              -    (0.41%)        -           (3.77)
TOTAL                                                         (2,940,404)   (5,087,298)        (3.01%)    (5.21%)     (27.75)       (48.01)




                                                                                                                                   3-3
                              2011 Budget Reductions
                               Additional Information
Item #1:         Reduce CAO capital accounts
Reduction:       $8,000
Impact/Risk:
Compass Kitchener account receives an annualized amount that this advisory committee
uses for surveying and community engagement. Funds accrue over 3 years (generally) to
allow for large scale surveying (in the 4th year of council's term), community engagement
and communication with citizens to ascertain: (a) satisfaction with municipal government,
(b) satisfaction with municipal services, (c) priorities for action, and (d) ideas regarding
improving the health and vitality of our community in light of priorities. The impact of the
proposed reduction constrains our efforts to a degree. That said technology (especially
social media) and "green" communication policies can reduce our use of traditional media
and printed materials, thereby potentially reducing costs to the program.

Safe and Healthy funds the administration of the Safe and Healthy Advisory Committee, as
well as providing financial support to local projects with a focus on community safety and
crime prevention (eg., Festival of Neighbourhood Sponsorship, Downtown Graffiti Project,
Town and Gown, CPTED) as recommended by the advisory committee members. (NOTE:
This capital allocation was reduced from 50K to 40K in 2009.) Reduction to this annual
allocation will impact the extent to which the City can provide financial support to
community projects that aim to prevent crime and increase community safety and well-
being.

Item #2:         Remove additional support person for Council
Reduction:       $60,000
Impact/Risk:
An increase of four new councilors has resulted in an increase in direct costs such as
salaries, benefits and technology. It has also resulted in the need for additional support
staff. In an effort to support the larger Council with the existing staff, over the past year,
OMC staff have been reviewing a number of business processes and practices to make
operations more efficient. However, in order to ensure Council has the support they need
to be effective in their leadership role, provision for an additional staff position has been
included in the 2011 OMC Operating budget in the event additional support is needed.

Risk of not filling position; reduced level of support for OMC.
Item #3:           Oktoberfest/Christmas Floats
Reduction:         $15,000
Impact/Risk:
Every year the City of Kitchener enters a parade float into two community parades – the
Kitchener-Waterloo Oktoberfest Parade (October) and the Santa Claus Parade
(November). Each of these parades lasts for approximately an hour and a half.

Each year City staff build/rebuild on the same basic float frame in order to achieve a
specific “theme” for that year. The float frame is scheduled to be replaced every eight years
due to wear and tear.

On an annual basis, the vast majority of the float costs are related to paying for Facilities
Management staff who build the float. A much smaller amount of funding is used to
purchase materials, equipment and supplies to decorate the float. To fund the creation of
the parade float, each year $15,000 is transferred into a reserve fund.




                                                                                            3-4
                              2011 Budget Reductions
                               Additional Information
City Council may choose to stop the practice of entering a float into these two parades, cut
the $15,000 annual transfer and transfer the balance of that reserve ($8,214) into the tax
stabilization reserve.
Item #4:          Printshop Efficiencies
Reduction:        $20,000
Impact/Risk:
In 2008 the City purchased and installed new digital, high-speed photocopiers and bindery
equipment for its in-house Print Shop. Over the past two years, as City staff have operated
in this fundamentally different printing environment, they have continually sought
operational efficiencies and savings. Staff believe the following adjustments can be made to
the 2011 Print Shop operating budget:

   Part-time Wages ($5,000) – staff have been able to modernize a number of labour-
   intensive processes previously done manually which has reduced the need to bring in
   part-time staff at peak times throughout the year.

   Printing Supplies ($5,000) – supply costs can reduced for the following reasons:
   reduced corporate-wide printing requires less funding for paper in the Print Shop and
   across the City; Print Shop staff are strictly limiting the use of high-price stock paper,
   and; the new equipment has resulted in less paper being waste.

   Equipment Leasing ($10,000) – the price per impression the City is charged for leasing
   the Print Shop equipment is lower than anticipated for two reasons: (1) reduced
   corporate-wide printing has lead to fewer impressions, and; (2) after two years of
   operating the new equipment, the per impression cost has proven to be lower than first
   anticipated.

There is a minimal risk that corporate-wide printing could increase in 2011, resulting in
higher supply and per-impression costs in the Print Shop. This would result in a small deficit
in these areas. Staff will reduce these lines items within the Print Shop operating budget for
a total savings of $20,000.

Item #5:          Market Reduction
Reduction:        $8,500
Impact/Risk:
Between 2005 and 2011, the Kitchener Market subsidy has been reduced by 42% from
$665,000 to $285,000 through an aggressively reducing cost by 27% and increasing
revenue by 50%. The proposed cuts are spread across a number of accounts to minimize
their total impact on Market operations. Key budget items such as marketing have been
preserved in order to support the existing branding strategy and revenue targets. Further
reductions to strategic operating and capital budgets at the Market will adversely affect its
ability to achieve further revenue growth and support the City’s corporate goals.

Item #6:        Communities in Bloom
Reduction:      $7,000
Impact/Risk:
Kitchener in Bloom is a program that 1) encourages residents and businesses to take pride
in Kitchener and beautify the community, and to 2) recognizes and celebrates those
residents and businesses who do beautify our community and those who take extra effort to
do so in an environmentally friendly way. The KIB committee is comprised of citizens,




                                                                                            3-5
                             2011 Budget Reductions
                              Additional Information
municipal staff, a member of regional council and members of associations, businesses
and organizations interested in horticulture, heritage and improving community life.

The proposal is to eliminate the program for an annual cost savings of $7,000.

Funds are used for promotion and advertising, administrative costs (mailings, printing), a
bus tour of some of the recognized properties, and a finale celebration to thank and
recognize the selected property owners. The committee works hard to make this program
work with minimal spending and, though they have not had the capacity to find substantial
sponsorship support for the program, they have found smaller donations and support to
reduce costs where possible.

Though it is difficult to measure the exact impact of cancelling the program (i.e many
property owners may already see the value of beautifying their property and may not
necessarily need an “award” program to be motivated), the Kitchener in Bloom committee
members believes that the KIB program offers good value for the dollar in recognizing and
celebrating the efforts of citizens, raising awareness re: positive environmental gardening
practices; building community and inspiring community pride. The bloom bus tour is always
full and the finale is always well-attended. The community members and business owners
involved enjoy the recognition and support they receive for their efforts.

Item #7:        Eliminate Recreation Program Grant
Reduction:      $13,900
Impact/Risk:
The purpose of the recreation grant program is to offer financial assistance to
neighbourhood associations and community groups who provide recreation and leisure
programs to children and youth. Essentially, these grants extend our role in the community
and increase the capacity of groups to provide neigbhourhood based programs.

The elimination of this program will result in a service reduction to neighbourhood
associations and community groups which may decrease their capacity to deliver programs
to children and youth. Additional pressures maybe put on staff to deliver these programs in
neighbourhoods as an alternative.

Item #8:        Close Community Centres over Christmas Holidays
Reduction:      $20,000
Impact/Risk:
As a cost cutting measure, most Community Centres have closed or offered significantly
reduced hours and services during the Christmas week in the last two years. Continuation
of this practice would allow for a total reduction of $20,000 (wages and fringe
benefits) annually from the Community Centres and Seniors budgets. Impacts of such
closures would include lack of access to public space, including public access computers
and select services at Community Centres, by community members for one week each
year. It would also increase pressure on some neighbourhood associations to complete
planning for program registration and implementation prior to the holiday season.




                                                                                         3-6
                              2011 Budget Reductions
                               Additional Information
Item #9:          Eliminate Movie Licenses
Reduction:        $6,000
Impact/Risk:
Movie licenses are required to show movies in Community Centers and public settings.
Community Centre budgets have included the annual cost of movie licenses. Reduction of
this funding would result in a savings of $6,000 annually. This reduction would result in an
inability for neighbourhood associations, seniors groups, summer playgrounds, youth drop-
in and camps to show movies. Three Neighbourhood Associations currently show movies
as a regular low cost community program. Movie licenses would need to be purchased on
an as-needed basis at a much higher rate, which would be a significant deterrent to low
cost programming.

Item #10:         Eliminate Rec. Grants to Neighbourhood Associations
Reduction:        $15,045
Impact/Risk:
As a benefit of affiliation, neighbourhood associations are eligible for recreation grants to
offset the cost of program expenses, to a maximum of $750 annually. Elimination of these
grants would result in a budget reduction of $15,000 per year. Such a reduction would
make it very difficult for some neighbourhood associations to provide low cost programming
to area residents. This is especially true for new or small NAs, or those neighbourhood
associations in modest income neighbourhoods within the City. It would also act as a
deterrent to the operation of youth programming, which traditionally requires subsidy. The
elimination of these grants will take away a primary benefit of affiliation with the City of
Kitchener, and would necessitate a review of Council Policy I - 324 Affiliation Policy -
Neighbourhood Associations
Item #11:         Summer Playgrounds – close four programs
Reduction:        $20,000
Impact/Risk:
The closure of 4 summer playground programs would result in the elimination of 8 summer
student positions and the loss of approximately 860 summer program spaces for children
between the ages of 3 and 12. The programs that would be affected include; Smithson
summer playground, Our Lady of Grace summer playground, Suddaby summer playground
and Courtland adventure summer playground.

This   program celebrates  its   high    quality    yet    affordability.  A       reduction
would decrease summer recreation opportunities for our lower income families.

Item #12:        Reduce Newsletter Printing
Reduction:       $7,000
Impact/Risk:
Council Policy I-660 outlines printing guidelines for affiliated Neighbourhood Associations.
Access to printing is one of the benefits of affiliation to NAs by the City of Kitchener.
Reductions in the printing budget would necessitate either a reduced number of pages
allocated annually to each NA, or reductions in newsletters from three times per year to
twice per year. Such reductions would create challenges for neighbourhood associations in
communicating information to area residents. The newsletter is the primary vehicle for the
provision of program information. Any reduction in pages or issues would create difficulty
for the NA volunteers to promote their programs, events and information to the public.
Reduced public participation and volunteer stress would result. Reduction of newsletter
printing would reduce a major benefit of affiliation for NAs.




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                               2011 Budget Reductions
                                Additional Information
Item #13:        Convert Breithaupt Wading Pool to Splash Pad
Reduction:       $11,000
Impact/Risk:
The Breithaupt Park Wading pool operates mid June to the end of August. On a busy
summer day a total of 250 bathers would visit this facility. A lifeguard is scheduled daily to
ensure a safe environment and due to the standing water of 6-8 inches in the pool basin.
Changes to the water circulation system this summer will allow the basin to either fill or
remain as a wading pool, or to simply spray the water over the basin essentially acting as a
Spray Pad facility.
If the pool basin does not have standing water, a lifeguard is not required. $11,000 is
currently budgeted to supervise this facility for 11 weeks during a time frame of 10am -
7:00pm. Modified hours occur in inclement weather and in late August.

A change of this nature may cause concerns with the users. The lifeguard role was to
ensure the safety of the environment, provide first aid as needed, correct unsafe situations (
parents not supervising their children, misconduct of youth) and clean up of debris in the
pool area ( branches, cigarette butts, broken glass). The neighborhood has an expectation
that the facility has historically been supervised by City staff.

Item #14:        EPC Grant Increase
Reduction:       $54,000
Impact/Risk:
Downtown Community Centre, Rockway Centre and Breithaupt Centre receive Elderly
Persons Centres grants from the Ministry of Long Term Care to help offset the operational
expenses of the Centres. In December 2010, notification was received that these grants
were being increased in the amount of $18,000 per centre for 2011. This is a revenue
increase of $54,000 for 2011. It is anticipated that the increase in this grant will be ongoing,
and is therefore a sustainable revenue increase in the Centre operating budgets.

Item #15:        Eliminate Summer Youth Drop in age 18+
Reduction:       $4,400
Impact/Risk:
The 18+ Summer Youth Drop-in program is specifically designed to meet the recreation
and leisure interests of youth between the ages of 18 and 24. The program operates three
evenings per week for 7 weeks during the summer at both the Victoria Hills and Mill
Courtland Community Centres.

By eliminating this program, there is a decrease in the number of affordable community
based recreation opportunities for this age group. Two part time positions will be eliminated
resulting in a decrease in employment opportunities for young people. The program is
experiencing good momentum as seen in an increase in the total number of visits from
2009 (206) to 2010 (335). Further, a program cut will decrease staff's opportunity to
connect with this group and to recruit future program staff and volunteers. In
addition, there will be no opportunities for continued participation from youth who "age out"
of the other programs
Item #16:        Reduce the Urban Design capital account
Reduction:       $50,000
Impact/Risk:
The Urban Design Budget is for strategic investments in streetscape improvements (not
otherwise funded) with the following objectives:




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                              2011 Budget Reductions
                               Additional Information

   •   improve the quality of the public realm;
   •   provide immediate value to the community and/or surrounding neighbourhood;
   •   enhance the image of the City; and
   •   show leadership in high quality urban design and to encourage private sector
       investment

The Urban Design Budget is a key tool for implementing several community priorities
identified in Kitchener's Strategic Plan including objectives related to "Quality of Life",
"Leadership and Engagement", "Dynamic Downtown" and "Development". The Urban
Design Budget also supports the Economic Development Strategy objective of retaining
and attracting talent.

High profile areas are targeted. Many projects funded through this account are partnership
projects with other public authorities such as the Region of Waterloo. Region of Waterloo
road construction projects normally do not include any funding for the pedestrian
realm or any funding for boulevard enhancements beyond the minimum standard of "cobra
head" light fixtures and sod.

The Urban Design Budget has been in place since 2005. The scope of projects varies.
Recent past projects include:

   •   a contribution to the downtown King Street reconstruction;
   •   enhancements to the Queen Street South reconstruction (between Highland and
       Courtland);
   •   streetscape/landscaping/safety improvements to the bus shelter and surrounding
       area in front of KCI (Kitchener-Waterloo Collegiate and Vocational School);
   •   new post and ring bicycle racks/stands as part of the King Street East
       reconstruction.

Upcoming projects include:

   •   contribution to Fairway Road extension/bridge for a gateway feature and pedestrian
       connection to trail system along Grand River; and
   •   contribution to Belmont Avenue reconstruction for pedestrian amenities and a
       gateway feature or public art as identified in approved urban design brief.

A potential future project is a contribution the Region's multi-modal transportation hub at
King Street West near Victoria Street.
An annual reduction of $50,000 would reduce this budget by almost 50% which would
limit the scope of work to one or two small projects per year (e.g. King Street East bicycle
racks, KCI bus shelter area) or one significant project every three to five years (e.g.
downtown King Street, Fairway Road Extension). Current funding levels enable a
combination of smaller and larger projects so that there is almost always one project
underway.
Item #17:        Communication Towers on City Buildings
Reduction:       $10,000
Impact/Risk:
Lease rates for one telecommunication tower or antenna range between $8,000 - $12,000
per year. Leases are normally 5 years in length with renewal provisions for up to 20 years,




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                                     2011 Budget Reductions
                                      Additional Information
and the lessee covers all expenses (capital/installation costs, electrical utility costs,
property tax increases etc.). There is currently interest in erecting a tower next to
Sportsworld Arena which could yield approx. $10,000 a year in revenue. Based on
discussions with an industry representative, staff conservatively estimates one additional
lease opportunity every 3 years. For each new lease there would a one-time administration
cost of approx. 10-14 total staff hours to coordinate the lease agreement and the
installation.

Item #18:       Adjust Cemetery Interest
Reduction:      $46,900
Impact/Risk:
Budgeted Cemetery interest revenue could be increased by $46,900.
When the 2011 budget was set for cemetery interest it was lowered from prior year
significantly. We assumed there would be a smaller return from the anticipated lower
interest rate. The budget was set prior to the 2010 actual interest calculation. Actual
interest received was not as low as anticipated and 2011 rates are expected to have
gradual rate increases. Using conservative estimates the 2011 budget for cemetery
revenues could be increase to $187,100, resulting in decease in the cemeteries total
budgeted deficit by $46,900.

This proposed budget increase also better reflects the actual interest earned in 2010.
Item #19:      Delayed Opening of Bridgeport Community Centre
Reduction:     $150,221
Impact/Risk:

The Centre is anticipated to open in October 2011. The anticipated hours of operation are
Monday to Friday, 9am-9pm; Saturday 9am-1pm for programs; 1pm onward for rentals and
other community use as required; Sunday, open for rentals and community use as
requested. Overall anticipated hours of operation are 80 hours per week.

The original budget request can be amended to reflect 3 months of operation (Oct – Dec
2011). The additional 9 months of operational expenses would be reflected in the 2012
budget.
 Additional details available in issue paper Op 21 Growth related items.
Bridgeport Community Centre
                                         Original Budget
                                            Submission            Revised Budget
                                      Community                Community
                                       Services       FM        Services      FM      Reductions
User Fees - Rentals                        (1,500)           -        (500)         -     (1,000)
Sundry Income                                (460)           -        (153)         -       (307)
Salaries/Wages                           120,053       59,958       40,017    19,986     120,008
Administrative Expenses                     4,785           -        2,000          -      2,785
Equipment Reserve Charges                   3,636       3,444        1,212     1,148       4,720
Material & Supplies                         5,730      10,060        1,910     3,353      10,527
Professional & Contracted Services         13,600           -       13,600          -          -
Rentals & Leases                              913           -          913          -          -
Grants Paid                                   750           -          250          -        500
Repairs & Maintenance                           -       4,032                  1,344       2,688
Promotional Costs                             500           -          167          -        333
Utilities                                       -      14,950             -    4,983       9,967
                                         148,007       92,444      59,415     30,815     150,221




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                              2011 Budget Reductions
                               Additional Information
Item #20:        Reduce City Run Festivals
Reduction:       $40,000
Impact/Risk:
To date, the City owns and operates six major festivals: Cruising On King Street, Tapestry,
Kidspark, The Word On The Street, Christkindl Market and New Year’s Eve.
The City also supports numerous 3rd party festivals and events.

If cost savings are required, staff would recommend that two festivals - Tapestry and New
Year’s Eve be scaled back to create two smaller community type programs, resulting in a
savings of approximately $40,000 per year (savings of $20,000 per festival).

While these are excellent festivals Tapestry and New Year’s Eve have been identified
because they would involve the least stakeholder impact and have the lowest attendance in
comparison to the other of the festivals owned and operated by the City.
Item #21:       Purchasing Wages
Reduction:      $14,155
Impact/Risk:
The Purchasing Section of the Supply Services Division maintains a provision for part-time
wages in the amount of $14,155 to provide budget for a back-fill during vacation periods for
the two administrative support staff and also to provide additional support when purchasing
volumes      exceed      the      capacity      of     those     two     staff    members.

The provision for part-time wages could be eliminated. This may result in the following two
impacts from time to time:

   •   The front Purchasing counter will need to be closed occasionally should staffing
       levels be insufficient to provide coverage, resulting in a decreased level of customer
       service; and
   •   Processing of tender documents will be delayed during periods of peak workload


Item #22:        REEP Grant
Reduction:       $27,500
Impact/Risk:
Founded in 1998, the Residential Energy Efficiency Project (REEP) is a community-based
partnership that provides home energy evaluations in the Waterloo Region. Using the
national home energy rating system developed by Natural Resources Canada (EnerGuide
for Houses), REEP has been conducting home energy audits since the federal grant
program began in October 2003. In early 2006, REEP became incorporated as a project of
Waterloo Region Green Solutions (WRGS), a community-based non-profit environmental
organization that is funded by a combination of local partners, provincial contracts, grants
and client fees. The City has funded REEP since 2000 and, for the past several years, the
value of the grant has been $25,000. REEP has requested $27,500 for 2011 and this
amount has been included in the draft 2011 budget based on a previous referral motion of
Council.

At the September 16, 2010 Environmental Committee meeting, the Committee was advised
that the current reduction in 2010 ecoENERGY home energy evaluations correlated with
the loss of federal funding in March 2010. The Province has continued to participate in the
home evaluations grants until March 2011, with no discussions of an extension at this time.




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                               2011 Budget Reductions
                                Additional Information
While there may still be a number of homeowners interested in home energy evaluations,
without the incentives provided through the grants it is anticipated that participation in the
home energy audits will continue to decline.

REEP intends to begin to focus on several new initiatives for 2011. This includes:
showcasing the REEP house, which highlights energy saving measures for the average
homeowner; the continuation of the stormwater public education and awareness program;
and, a new initiative partnering with Kitchener-Wilmot Hydro introducing electricity audits.
This new program would be similar to building envelope audits, where qualified electricity
auditors conduct home electricity evaluations educating consumers on electricity saving
techniques.

In addition to the annual grant paid to REEP for their overall program, Kitchener Utilities
contributes $60 towards the cost of each home energy evaluation and $40 towards the
follow-up visit to reduce the cost to local residents. In 2010, the contribution from Kitchener
Utilities was $71,920 and in 2009 it was $95,280. These costs are funded from the demand
side management (DSM) program which is modeled after the OEB-mandated program for
rate-regulated utilities and are not funded through the property tax base. The City of
Kitchener also provided a one-time grant of $60,000 for the REEP House through the Local
Environment Action Fund in 2009.

In light of the change in direction for REEP, the anticipated decline in home energy
evaluations, and Council’s budget targets, it would be reasonable for Council to revisit the
City’s ongoing commitment to the program by way of the annual tax-supported operating
grant. REEP has advised that Kitchener’s support is vital to their continued operation and
serves to leverage funding from other municipalities, as well as the provincial and federal
governments. REEP’s 2009 Annual Report is attached for Council’s reference.


Item #23:        Computer/Telephone Charges
Reduction:       $50,000
Impact/Risk:
The Computer and Telephone Reserve funds are set up to fund various Information
Technology (IT) infrastructure replacement and upgrade initiatives such as the telephone
upgrade project, ongoing network & database server replacements and desktop computer
replacements These funds have also been used to finance the continual growth of the
City’s voice and data networks to new City sites such as Community Centres and Arenas,
as well as to provision the required infrastructure when new technologies are introduced (ie.
mobile computing and VoIP).

Although the IT department is very diligent in monitoring these funds and ensuring that
each project is properly scoped and planned, there are always unexpected equipment
failures and new requirements that need funding. The reduction of these funds, combined
with the previous reduction to the Telephone Reserve Fund in 2009 totaling $100,000
annually, inhibits the IT Divisions’ ability to respond to these situations and deliver new
technologies in the future that would support the City’s Strategic direction; more efficient
use of staff time and effectively delivery of services to the public.




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                              2011 Budget Reductions
                               Additional Information




The following risks are associated with these reductions:
   • With the current initiatives in place, the reduction of these funds will result in an
        overall deficit of $124,870 by 2014
   • Funding would not be available for computer desktop, network or telephone failures
        (the lifespan of each computer at the City is 5 years, which is 1 to 2 years beyond
        industry standards and as a result we require spare parts on hand to address any
        failures)

**2009 and 2010 Closing Balances are higher than normal due to the funding that was
budgeted and set aside for the CMF project.

Item #24:       Turf Maintenance
Reduction:      $114,000
Impact/Risk:
Description of Reduction: Reduce the service level for turf cutting from once every four
weeks to once every four and one half weeks

Implication: increased resident complaints

Item #25:       Sportsfield Maintenance
Reduction:      $49,000
Impact/Risk:
Description of Reduction: reduce level and frequency of maintenance activities

Implication: will reduce playability of the fields. May result in increased user complaints.
Risk of reduced revenues low.

Item #26:       City Hall Fountain to Reflecting Pool
Reduction:      $7,000
Impact/Risk:
Description of Reduction: Keep as a reflecting pool, but don’t operate fountains

Implication: minimal – aesthetic

Item #27:       Rockway Fountain
Reduction:      $23,000
Impact/Risk:
Description of Reduction: Complete closure and draining of fountain

Implication: aesthetic impact. Will result in complaints from Horticultural Society who
maintain the gardens for the City as well as users of the gardens




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                              2011 Budget Reductions
                               Additional Information
Item #28:       Outdoor Pools (Kiwanas) reduced season
Reduction:      $17,550
Impact/Risk:
Description of Reduction: reduce season by two weeks at beginning of season and two
weeks at end of season. Currently start setup April 11th – open June 3rd – close Sept. 5th

Implication:    Service impact to citizens; potential reduction of revenue; potential
implementation complications for 2011 as summer passes already set up to start at a
certain date in summer

Item #29:        Outdoor Pools reduced season
Reduction:       $30,000
Impact/Risk:
Description of Reduction: reduce season by two weeks at beginning of season and two
weeks at end of season. Currently Harry Class start set up May 2nd, open June 4th and
close Sept. 27th; Idlewood – start setup April 18th – open May 25th – close Sept. 5th; Wilson
– start setup May 2nd – open June 10th – close Sept. 5

Implication:    Service impact to citizens; potential reduction of revenue; potential
implementation complications for 2011 as summer passes already set up to start at a
certain date in summer

Item #30:        SWM Charitable Organization Exemption
Reduction:       $150,000 – 300,000
Impact/Risk:
Description of Reduction: Eliminate or phase out program over a period of years. More
details available in issue paper Op35.

Implication: increase in complaints from charitable organizations

Elimination of “Places of Worship” Grants for Stormwater Rate

The stormwater rate is based upon the principle that the more impervious area an individual
property owner has, the greater the amount of runoff and pollutant loading from the
property and, consequently, the greater the demand on the City’s stormwater management
system, either for flood control or water quality treatment purposes.

With the implementation of the stormwater rate in 2011, this essential principle applies to
all properties in Kitchener with two exceptions - “places of worship” and charitable
organizations. These properties typically have large impervious areas, due to their parking
lots or building envelope sizes. Under the original tax-based funding model, this sector is
tax exempt and did not contribute towards stormwater program.

Proponents indicated to Council that to charge a stormwater rate to these properties would
be an undue burden on this sector of the community. Council directed staff to establish
grants for 100% of the stormwater rate charges and is contingent on the implementation of
a stormwater or environmental education program for their members or clients. There is no
stipulated end date to this grant program, there is no phase out date for the grant program,
nor upset limit on funding related to this grant program. This grant was effect January 1,
2011, the start of the stormwater rate implementation.




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                               2011 Budget Reductions
                                Additional Information

From staff’s perspective, this does not promote good environmental stewardship by “places
of worship” or charitable organizations, is not fair to other property owners in different rate
categories and would be viewed as subsidizing certain users within a specific rate category,
making the rate structure susceptible to legal challenges by other users.
Based on Council direction, staff recommended that these grants be funded from the tax
levy to the enterprise, as this is deemed to be a social benefit with no rational relationship
to the provision of stormwater management services to those property owners.
Approximately $300,000 will be allocated annually from the tax levy to the stormwater utility
(or a 0.3% tax levy increase in 2011).

For clarity, the “places of worship” grant program is distinct from a stormwater charge credit
policy funded by the stormwater rate base. The credit policy property owners would qualify
for stormwater rate credits when they can demonstrate that their existing or proposed
stormwater facilities or applied best management practices are functioning as approved.
This credit policy is being developed and staff will report to Council on or before January 1,
2012 with regards to a stormwater rate credit policy for all eligible properties including
residential, multi-residential and non-residential sectors.

Item #31:        Reduce Engineering Capital accounts
Reduction:       $314,900
Impact/Risk:
Description of Reduction: Eliminate annual contribution from tax base to fund capital
programs – list of programs impacted attached

Implication: listed in attached – Appendix A

Item #32:       Parking
Reduction:      $250,000 - $493,894
Impact/Risk:
Description of Reduction: Implement Alternative 3 (Issue Paper #) – Defer implementation
of TDM and Cycling Master Plan

Implications: The Transportation Demand Management and Cycling Network programs,
policies and services will not be developed. The delay in starting to give the public
opportunities to travel other than in single occupancy vehicles will result in increased
congestion, greater environmental impacts, greater risk to the downtown from insufficient
parking and greater expense to the City from having to build additional parking structures.

Although the 2011 levy impact is completely eliminated it just shifts the problem to future
years. The parking enterprise will not remain solvent if the dividend remains at the 2011
level. TDM and the Cycling Master Plan will continue to have to be scaled back in 2012.

Budget Impact: $493,894




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                                     2011 Budget Reductions
                                      Additional Information
Item #33:     Delayed Opening of McLennan Park
Reduction:    $90,333
Impact/Risk:
Reduction of McLennan Park budget for operations and facility management, June 2011
opening.

Additional details available in issue paper Op 21 Growth related items.

McLennan Park
                                         Original Budget
                                           Submission             Revised Budget
                                      Operations      FM       Operations     FM     Reductions
Salaries/Wages                          250,135       86,824     197,102      65,824     74,033
Equipment Reserve Charges               127,300        9,348     122,300       7,048      7,300
Material & Supplies                        2,672      13,878        2,672      9,878      4,000
Professional & Contracted Services             -         500            -        500          -
Repairs & Maintenance                          -       2,750            -      2,750          -
Utilities                                      -      77,000            -     72,000      5,000
                                        380,107      190,300     322,074     158,000     90,333


Item #34:      Other Decorative Fountains
Reduction:     $50,000
Impact/Risk:
Description of Reduction: complete closure of fountains at Clock Tower, Hibner Park,
Grand River Transit Terminal, Oktoberfest Platz, Victoria Park Entrance 1 and 2

Implication: aesthetic impact

Budget Impact: $50,000

Item #35:         Kitchener Public Library
Reduction:        $0
Impact/Risk:

Additional details available in issue paper Op 28

Item #36:        Gapping
Reduction:       $0 - $175,000
Impact/Risk:
In 2010, the City’s gapping budget was $2.3M. The chart below shows the budget and
actual in gapping for the past three years:

                                                                     Surplus/
                  Year                 Budget         Actual
                                                                     (Deficit)
                  2008                 2,233,915      1,849,554      (384,361)
                  2009                 2,300,932      1,685,868      (615,064)
                  2010                 2,300,932      852,039        (1,448,893)

The trend indicates that over the past three years it has been difficult to achieve budgeted
gapping targets. This is in part due to the lack of capacity in headcount through various




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                              2011 Budget Reductions
                               Additional Information
efficiencies and reductions in FTEs. During tough economic times it is also less likely that
people will leave their current roles and thereby create a vacancy.

An increase in the gapping budget from $1.5M to $1.675M represents 0.18% decrease to
the tax levy and an increased likelihood of a budget shortfall.

Item #37:         Fringe
Reduction:        $180,000
Impact/Risk:
City staff is in the final stages of a three-part request for proposals (RFP) for its group
benefits provider; its Employee Assistance Provider (EAP) and its third party flex
administration services provider. Staff anticipates bringing a recommendation forward to
City Council on the awarding of this RFP in early April.

At this point in the RFP process staff have short-listed the proposals to two group benefits
providers. Both of these proposals would be obligated to provide benefits in accordance
with all of the City's collective agreements. While staff continue to work on evaluating the
final two proposals, it has become clear that regardless of which of these two proposals are
awarded the RFP, the City can anticipate saving a minimum of $400,000 in annual benefits
costs - $360,000 of which can be attributed to the tax-base.

Analysis continues on the proposals received for the City’s EAP provider, flex benefit
administration services provider – and accidental death and dismemberment (AD&D)
benefit provider. To date, it is not known if the City will achieve savings through the
awarding of these components of the RFP.

Should the RFP be awarded to a company other than the City’s current provider, staff
anticipate the transfer to a new benefit carrier could not take affect until July of 2011 –
meaning the potential tax-based savings for the current year would be approximately
$180,000. The balance of the savings would be achieving in 2012. It is important to note
these 2012 savings would be more than offset by the required increases to OMERS.

Item #38:       EDIF
Reduction:      $250,000 - $500,000
Impact/Risk:

Current EDIF projections forecast a surplus of $2.7M at the end of the program in 2013.
This is largely due to investment income of $1.5M that has been earned over the course of
the program caused by timing differences between when funds were received and when
they were spent. Any reduction to EDIF this year would be compounded over all the
remaining years (2011-2013), so a reduction of $500,000 would reduce the projected
ending balance of EDIF by $1.5M ($500,000 x 3 years).

EDIF investments have leveraged $1.78 in partner investment for every dollar invested by
the City. In addition, over $200 million in private sector investments in large projects such
as the Kaufman Lofts, Tannery, City Centre Condominiums, Breithaupt Block and 220
King, have either been made or are in the final design process as a result of EDIF. The
overall effect has been improved employment performance in the downtown, reduced office
vacancy rates, residential intensification, and assessment and tax revenue growth. In
addition, EDIF investments in the downtown have a significant impact on the environment




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                                            2011 Budget Reductions
                                             Additional Information
by supporting urban intensification thereby slowing greenfield expansion of the City. They
also support remediation of contaminated former industrial sites thereby reducing the risks
to the City’s ground and surface water resources. Finally, the development of a high-quality
urban core improves the ability of high growth companies (e.g. Google, Electronic Arts,
Desire2Learn) to attract and retain talent thereby positioning the City’s economy to thrive in
a rapidly changing global knowledge economy.

Item #39:        Hydro
Reduction:       $150,000
$1 million is transferred annually from the Hydro Capital Investment Reserve to the tax-
supported operating budget to mitigate property taxation requirements. This amount is
funded through the Hydro Capital Investment Reserve Fund which receives the dividends
and interest on the City’s investment in Kitchener Power Corporation and Kitchener-Wilmot
Hydro. An additional amount is transferred from the reserve to fund the capital program.

Staff recently met with Hydro’s CEO to discuss the estimated dividend for 2011 (based on
results for fiscal 2010). It is anticipated that this year’s dividend will be higher than in the
past as a result of Hydro’s “re-basing” of the rate for a four year term in 2010. Based on the
manner in which the Ontario Energy Board (OEB) approves the rate, Hydro’s net income
and the associated dividend will decline over the term of the four-year rate approval. The
Hydro Board will approve this year’s dividend in April.

Staff has adjusted the reserve projection (below) to reflect the anticipated increase in the
dividend for 2011 and a decline to the historic baseline by 2014. Although the 2011
amount is still an estimate, it provides an opportunity to increase the transfer to the
operating budget to reduce the 2011 levy increase. Based on the anticipated dividend for
2011 and beyond, a sustainable increase in the operating transfer of $150,000 could be
made without incurring a deficit in the reserve over the longer term.

HYDRO CAPITAL INVESTMENT RESERVE FUND
PROJECTION ($'000's)
2010 - 2020

                                  2010       2011   2012   2013   2014   2015   2016   2017   2018   2019   2020
                                 Actual     Budget Budget Budget Budget Budget Budget Budget Budget Budget Budget
Revenues
Kitchener Power Corp. Dividend     1,753     2,800   2,300   2,000   1,700   1,700   1,700   1,700   1,700    1,700    1,700
Interest on Long Term Debt         4,198     4,168   4,168   4,168   3,983   3,891   3,891   3,891   3,891    3,891    3,891
Interest income                       46        17      26      30      29      23      16       8       4        2        1
                                   5,996     6,985   6,493   6,198   5,712   5,613   5,606   5,599   5,595    5,593    5,592

Expenditures
Transfer to Operating              1,000     1,150   1,150   1,150   1,150   1,150   1,150   1,150   1,150    1,150    1,150
Transfer to Capital                5,500     5,500   5,000   5,000   4,750   4,750   4,750   4,750   4,500    4,500    4,500
                                   6,500     6,650   6,150   6,150   5,900   5,900   5,900   5,900   5,650    5,650    5,650

Net Revenue (Expense)               (504)     335     343      48    (188)   (287)   (294)   (301)     (55)     (57)     (58)
Balance beginning of year          1,032       528     863   1,206   1,254   1,066     779     485     184      129        72

Balance end of year                 528       863    1,206   1,254   1,066     779     485     184     129       72       14


Council should consider the following risks before proceeding to increase the transfer from
the reserve:

     •    Dividends will decline between 2012 and 2014 based on the OEB’s approach to
          rate-setting;
     •    The current level of dividend and interest payment will continue to come under




                                                                                                                          3 - 18
                             2011 Budget Reductions
                              Additional Information
       pressure through the OEB rate-setting process as interveners lobby the OEB to
       reduce deemed rates of return;
   •   Cost pressures beyond the control of the local distribution company (such as
       provincial policy mandates, generation costs, etc.) place increasing pressure on
       Hydro to manage increasing costs within the approved rate; and
   •   They City’s reserve fund balances are low by any objective measure. Increasing
       the transfer from the Hydro reserve to realize the benefit of higher dividends will
       forego an opportunity to improve the City’s overall reserve position and move
       towards a more balanced financial position


Item #40:       Reduced Recognition Reception
Reduction:      $4,000 - $25,000
Impact/Risk
Since 1987 Kitchener’s Mayor and City Council have hosted an employee recognition
reception celebrating the achievements, commitment and service of long-service
employees and retirees. In 1990, City Council approved policy II-255 (Years of Service
Recognition Program) which sets out the City’s long-service employee recognition program.
That policy was amended in 1996, 2011 and 2010.

The City’s long-service employee recognition program includes three main components:

   A dinner/reception for long-service employees who have worked for the City for 15, 20,
   25, 30, 35 and 40 years. The previous year’s retirees are also invited to attend. Each
   employee is allowed to invite a guest. This component of the recognition program has
   averaged $4,210 per year over the past three years. In an effort to minimize the cost of
   the dinner, in 2010 the dinner with changed to a reception.

   A long-service employee gift recognition program for employees who have worked at
   the City for 15, 20, 25, 30, 35 and 40 years. Retirees are also recognized through this
   gift program. Depending on their length of service, employees are provided with a gift
   ranging from $50 for 15 years of service to $275 for 45 years of service. Retirees are
   provided with a gift ranging from $100 for 5 – 10 years of service to $450 for over 40
   years experience. The cost of this component of the recognition program has averaged
   $18,060 per year over the past three years.

   City staff who have worked for the City for 5 and 10 years are recognized with a City
   pin. To reduce costs, these pins are purchased in bulk for a two year period. In January
   of this year these pins were purchased in 2001 and 2012 at a cost of $5,357.

The City’s staff recognition program is funded through a $25,000 operating account in the
Human Resources Division. While it would have a significant impact on staff morale, City
Council could choose to:

   Eliminate the employee service pin program – savings of $5,500 every two years.
   Eliminate long-service employee recognition reception – savings of $4,000 per year.
   Eliminate long-service employee recognition gift program – saving of $18,000 per year.




                                                                                      3 - 19
                              2011 Budget Reductions
                               Additional Information
Item #41:         Reduce Advertising and Publicity by 10%
Reduction:        $36,000
Impact/Risk:
The City purchases advertisements for a variety of reasons, including: informing citizens of
major projects and events/festivals; meeting legislated obligations (e.g. environmental
assessments, tax sales, public notices for planning matters); promoting citizen engagement
opportunities (e.g. budget input), and; generating revenue for a variety of areas such as
Kitchener Utilities, The Aud, cemeteries and golf courses.

While City staff are always looking for low-cost or no-cost opportunities to communicate
information to the public, newspapers and radio advertising continue to be two of the main
avenues the public use to learn about City news. Over the past several years advertising
and publicity funding has held relatively steady or been reduced in some areas. Where
possible, staff attempt to limit the size of advertisements and keep costs low by directing
readers to the City’s website for detailed information. However, this is not possible for many
of the City’s legislated ads where specific content must be included.

A 10% reduction on tax-based advertising and publicity will lead to less public awareness of
major initiatives, events/festivals and citizen engagement opportunities – as well as lost
revenue opportunities for operations such as cemeteries and The Aud.

The draft 2011 operating budget includes a total of $360,343 in tax-based advertising and
publicity. City Council may choose to reduce that level of tax-based advertising and publicity by
10%, saving $36,000.

Item #42:        CITS Additional Grant Request
Reduction:       $0 - $87,000
Impact/Risk:
The special $87,000 request is to fund a new Marketing initiative and a labour relations
strategy. Failure to receive the additional support may make it difficult to achieve a zero %
wage increase for collective bargaining and impact negatively our ability to target new
audiences necessary for 2011 revenue growth of the Centre. The loss of missing these
opportunities will exceed the additional investment requested.
Item #43:        Staff Recognition Event
Reduction:       $6,000
Impact/Risk:
The Staff Recognition Event is intended for holiday celebrations and to celebrate the
accomplishments of the City of Kitchener employees and to recognize the great work that
have been achieved throughout the year. The reducing of $6,000 from this fund will leave
$7,000 remaining; amounting to a total of $4.67 per employee each year.

Staff have always ensured responsible spending of these funds, and have creatively found
ways to celebrate in a cost effective manner. During the year, individual departments in the
City conduct fundraisers to host team events and recognize outstanding work. The money
in the Staff Recognition Event account is the only funding in the City budget intended to
recognize the entire City of Kitchener staff and their families.
Staff will reduce these funds for a total savings of $6,000.




                                                                                         3 - 20
                              2011 Budget Reductions
                               Additional Information
Item #44:       Management Salary Adjustment (grade 12 and up)
Reduction:      $0 - $155,000
Impact/Risk:

The draft operating budget submission includes a 2% cost of living increase for
management staff. City Council may choose to adjust that increase as follows:

                Management Staff               Budget Savings
                Cost of Living Increase
                0%                             $155,524
                0.5%                           $116,643
                1.0%                           $77,762
                1.5%                           $38,881
                2.0%                           $0

As outlined in issue paper “Op 07 – City of Kitchener Staffing,” City Council should be
aware of the following risks with these reductions:

   Wage / Salary Compression: Continuing to increase management salaries at a lower
   rate than the salaries of unionized staff will narrow the gap between the salaries paid to
   non-management and management positions. This wage/salary compression can (and
   has) made it difficult to encourage current, skilled, non-management staff to apply for
   management positions. The relatively small increase in salary to a management position
   can be seen as not enough to offset the increased responsibility, as well as the loss of
   paid overtime and union seniority protection. It is also not enough to compensate for the
   expectation that Management staff work beyond 35 hours per week without paid
   overtime or banking those extra hours. This compression can also cause situations
   where frontline staff make more than their direct supervisor – this is especially the case
   where significant amounts of overtime are incurred (e.g. fire department, operations
   division).

Reducing Market Competitiveness: The City’s extensive 2006 salary comparison study
concluded staff are paid well below the market rate for similar positions in other
municipalities and corporations. This is especially true with senior management positions.
Freezing management salaries will reduce some of the salary competitiveness gained
through the recent market salary adjustments – especially given a number of other
municipalities are continuing to increase management salaries in 2011

Item #45:        Increase Userfees (effective July 1, 2011)
Reduction:       $100,000 - $200,000
Impact/Risk:
Increase user fees by an additional amount effective July 1, 2011 to assist in achieving a
reduction to the property tax levy.

1) Increase user fees by an additional 1% - this would yield an additional $100,000 in user
fee revenue, reducing the property tax levy increase by 0.10%; most fees would increase
by a rate of 4% in total
2) Increase user fees by an additional 2 % - this would yield an additional $200,000 in user
fee revenue, reducing the property tax levy increase by 0.20%; most fees would increase
by a rate of 5% in total




                                                                                       3 - 21
                              2011 Budget Reductions
                               Additional Information

Should Council give consideration to additional fee increases, it is recommended that the
additional increases not apply to the following user fees:

       •   golf course memberships and green fees (already approved or being reduced)
       •   parking fees (monthly rates increasing by 10%)
       •   SWM cash-in-lieu payments (increasing by 25% in accordance with policy)
       •   building permit fees (enterprise revenue)
       •   fees frozen at 2010 levels
       •   letters of credit (refundable)
       •   business licensing fees (already approved)
       •   dog licensing fees (set in conjunction with City of Waterloo)
       •   firefighter recruit administration fees (set to recover costs)
       •   Fire response to Provincial Highways (set by the Province)

As referenced in memo to council dated February 11, 2011 from D. Chapman

Item #46:      Reduction of General Provisions
Reduction:     $0 - $275,000
Impact/Risk:
General provision accounts within the capital budget have been reviewed, with a goal of
reducing funding by 5%. However, upon review, it was determined that an overall funding
decrease of 3.8% in these accounts can be achieved. Where possible, funding cuts were
increased by more than 5% elsewhere in order to offset any cuts that were increased by
less than 5%.

Additional details available in issue paper Cap 17

Item #47:        Tax Stabilization Reserve Fund
Reduction:       $500,000 - $750,000
Impact/Risk:
The tax stabilization reserve fund is used to fund any year end operating deficits and is the
recipient of any year end operating surpluses.           After experiencing a surplus of
approximately $875,000 in 2010, the balance is approximately $1.2M.             The current
balance is the equivalent of approximately 1.2% of the net tax levy and is well below the
Government Finance Officers’ Association (GFOA) benchmark target of 5%-15%.

Any reduction to the tax stabilization reserve fund puts the City at risk when it comes to
funding future operating budget deficits.
Item #48:       Increase transfer from Gas Utility
Reduction:      $0 - $400,000
Impact/Risk:

Additional details available in issue paper Cap 34




                                                                                        3 - 22
2009 Annual Report
 Ten Years of REEP




                     3 - 23
                                                                                                            Rene Gatien, President
                                                                                                            of Waterloo North
                                                                                                            Hydro, and Paul Parker,
                                                                                                            chair of REEP’s Board of
                                                                                                            Directors at our Tenth
                                                                                                            Anniversary Celebration.



     2009 Highlights
     REEP reaches ten years:                                            Photo: Aaron Schwab Photography

     12,000 homes evaluated and                                                                             Loraine Bailargeon

     9,200 tonnes of C02 reduced!
                                                                                                            accepts Certificate of
                                                                                                            Appreciation on behalf
                                                                                                            of Kitchener Utilities
                                                                                                            from Kate Neff, REEP
       ■ Homeowners, community partners, contractors and                                                    board member, also at
         former staff join us at our Tenth Anniversary Celebration.                                         our Celebration.

       ■ REEP House construction gets underway and brings
         $400,000 of project funding to Waterloo Region.

       ■ Our first Earth Day Eco-Showcase is held in partnership with
         the University of Waterloo’s Faculty of Environment.
                                                                        Photo: Aaron Schwab Photography


                                                                                                            Councilor Berry
                                                                                                            Vrbanovic speaks on
                                                                                                            behalf of the City
                                                                                                            of Kitchener at our
                                                                                                            Celebration.




     Local Funders
     Thank you to our valued local partners!


     Our 2009 results
                                                                        Photo: Aaron Schwab Photography


                                                                                                            Jennifer Mansel of
     were made possible by                                                                                  Kitchener-Wilmot Hydro
                                                                                                            and Sarah Colvin of
                                                                                                            Waterloo North Hydro
     your funding and support.                                                                              at our Solar Information
                                                                                                            Night organized in
       ■	Region of Waterloo                                                                                 partnership with CREW
                                                                                                            (Community Renewable
       ■	City of Kitchener                                                                                  Energy Waterloo).
       ■	City of Cambridge
       ■	Kitchener Utilities
       ■	Kitchener-Wilmot Hydro
       ■	Waterloo North Hydro
                                                                                Photo: Julian van Mossel


                                                                                                            Peggy Stevens of the
                                                                                                            Region of Waterloo,
                                                                                                            Steve May of the
                                                                                                            Waterloo Stewardship
                                                                                                            Network and
                                                                                                            Dan Meagher of the
                                                                                                            Region of Waterloo
REEP Waterloo Region
                                                                                                            with Beth Anne
2009 Annual Report   2
                                                                                                            Currie of Riversides
                                                                                                            at our Stormwater
                                                                                                            Management Tour.



                                                                                     Photo: Cheryl Evans
                                                                                                           3 - 24
Ten Years                                                                                               REEP’s founders
                                                                                                        with Executive
                                                                                                        Director Mary Jane
                                                                                                        Patterson. From back
                                                                                                        left: Ian Rowlands,
One Thousand Audits in                                                                                  Don Eaton, Dan Scott
                                                                                                        and Paul Parker.
Waterloo Region Each Year
In 1999, Dan Scott and Paul Parker discussed          Responding to the
starting a local initiative under Canada’s new
Climate Change Action program. They soon              Needs of Our Community.
connected with Ian Rowlands, another professor
in the Faculty of Environment at the University       In 2005 we started getting calls from members
of Waterloo and Don Eaton at the Elora                of church building committees who wanted to
Environment Centre. These four: Dan, Paul, Ian        make their buildings more energy efficient. We
and Don were our first management team.               developed a specialized audit for this purpose.

Don said of the Climate Change Action program:        After years of providing residential energy
“They did 1200 evaluations across Canada last         assessments, we realized that we could do more
year, but we have 12 million households in            to remove barriers to energy conservation.
this country!” And his solution: “one thousand        In 2007 we started planning REEP House, our
audits in each community every year.” By the          hands-on demonstration project.
end of our first year we were on target, with an
operation run by co-op students. Our next step:       Our focus has remained healthier homes and
hire full-time staff and build up the organization.   sustainable communities and most importantly,
                                                      working together with our local funders,
Many forget that when REEP started there were         partners and the many community participants.
no incentives. Homeowners paid money just to
learn how to make their homes more energy             - Excerpts from Tenth Anniversary Celebration
efficient. The incentives were added in 2003.         remarks by Paul Parker, Don Eaton and
                                                      Mary Jane Patterson.


When the program was
first cancelled in 2006,                                                                 Left: Rhonda Moreau of
                                                                                         Kitchener-Wilmot Hydro and
our municipalities urged                                                                 Kitchener Mayor, Carl Zehr
                                                                                         at an early REEP event.
the federal government                                                                   Below: REEP co-op student
                                                                                         Paul Wisken (left) at a
to reinstate it. Our                                                                     home energy assessment.

electric utilities stepped
in with funding to help
us continue to evaluate
homes. We were one
of the few organizations
still doing home energy
                                                                                                           3
assessments at the time.

                                                                                                        3 - 25
                     REEP House
                     for Sustainable Living
                     A community labour of
                     love: Our many partners
                     and sponsors brought                                                                                    Photo: Graham Whiting

                     layers of expertise and
                     ideas to help REEP House                           Where Old is New Again
                     emerge on Mill Street in
                                                                        The City of Kitchener was an early adopter of
                     downtown Kitchener.                                REEP House. Through their Local Environmental
                                                                        Action Fund, they are providing a three-year
                     The Regional Municipality of Waterloo is like      commitment to help us take our message to the
                     family. Receptive to the concept from the very     public, including website development.
                     beginning, the Region offered us two century-
                     old houses, generous in-kind staff support and
                     funding for energy retrofits.                      Sustainable Inside and Out
                     The Kresge Foundation made it possible for us to   The Ontario Trillium Foundation staff helped us
                     hire innovative green architect Graham Whiting     develop a financially sustainable business model
                     who has produced two award-winning designs:        that places REEP House at the centre of the
                                                                        green renovation movement. Our services will
                     ■ The 25/50 House at 24 Mill Street:               connect residents with contractors, suppliers,
                       At a cost of $25,000 we reduced energy           lenders, designers and real estate agents.
                       consumption by 50%. Payback, including
                       reduced bills and increased property value?      The Ontario Power Authority’s Conservation
                       Four years.                                      Fund will support public tours of REEP House,
                                                                        our online Sustainable Home Action Plan
                     ■ REEP House at 20 Mill Street:                    software and a learning document that will make
                       Canada’s first LEED Platinum renovated           it a snap for other communities to replicate our
                       century brick home, clocking in at a             one-stop-shopping approach.
                       90% energy reduction with a $200 heating bill.




                               Visionaries                                                           Innovators




REEP Waterloo Region
2009 Annual Report   4




                                                                                                                           3 - 26
                                   Photo: Julian van Mossel                                                               Photo: Dorothy McCabe




                                                               Canada’s Economic Action Plan hit us a home
Creating Local Green Jobs                                      run, touching each base on the way. First base:
                                                               immediate local construction employment.
Ball Construction are midwives to this birth of
                                                               Second base: green technologies and products
Canada’s first LEED Platinum renovation. It takes
                                                               on display at REEP House, purchased through
community contacts, technical expertise and
                                                               local suppliers. Third base: our Green Retrofit
tender loving care to preserve and restore a
                                                               Workbook connecting homeowners with local
century brick home while upgrading to near-net
                                                               businesses. And home plate:
zero performance. Site supervisor Scott Moody
has mastered the balance of old and new.
                                                               More jobs and carbon
                                                               reductions to come as
                                                               homeowners complete
                                                               REEP House-inspired
                                                               green renovations.
                                                               As 2009 drew to a close, our team of local
                                                               contractors and suppliers was preparing to
                                                               raise the roof at REEP House. We thank them
                                                               in advance for all of their donated time and
                                                               materials, extra care and dedication.

                                     Photo: Ben Barclay




       Builders                                                                      Supporters

                                                              BRC Mechanical                   Lutron Electronics Co.
                                                              Brown’s Concrete Products Ltd.   Mark Machel and Associates
                                                              Drain Power                      Merlyn Power
                                                              EcoShift                         Radiant Roofing
                                                              Finishing Touch                  Reitzel Heating and Air Conditioning
                                                              Fred Hunsberger Photography      Steve’s TV
                  Inline       Madawaska                      Golden Windows                   The Timeless Materials Company
                Fiberglass       Doors                        Heritage Stoneworks              Vanguard Electric      5
                                                              HydroFlowCanada



                                                                                                                  3 - 27
                     ecoENERGY
                     Expert Advice on Deep
                     Home Energy Savings
                     We provided 2,240 home energy evaluations
                     under the ecoENERGY program and 1,329
                     follow-up visits for those who had completed
                     their retrofits and wanted to access government
                     grants. This represents a 30% increase in initial
                     evaluations and a 99% increase in follow-ups
                     over 2008!                                                                                                                                                       Contractor installing spray foam insulation.


                     Breaking Records                                                                          11,000
                                                                                                              11000

                                                                                                               10,000
                                                                                                              10000

                     Two economic stimulus measures contributed                                                       9,000
                                                                                                                     9000                                                                                             Cumulative tonnes of
                     to this year’s boom: the Home Renovation Tax                                                     8,000
                                                                                                                                                                                                                      C02 emissions reduced by
                                                                                                                     8000
                     Credit and the 25% increase in both federal                                                                                                                                                      REEP customers from
                                                                                                                      7,000
                                                                                                                     7000                                                                                             1999 to 2009.
                     ecoENERGY grants and matching provincial
                                                                                                  Tonnes of Carbon




                     Home Energy Savings Program grants.                                                             6000
                                                                                                                      6,000                                                                                           Note: There were few
                                                                                C02 Reduced (T)




                                                                                                                      5,000
                                                                                                                                                                                                                      follow-up evaluations done
                                                                                                                     5000
                     REEP’s participants invested $7.9 million on                                                                                                                                                     in the early years of the
                                                                                                                      4,000
                                                                                                                     4000                                                                                             program, which made it
                     retrofits, or $6,000 per home*. The average                                                                                                                                                      difficult to assess results
                     homeowner reduced energy consumption by                                                          3,000
                                                                                                                     3000                                                                                             during that time.
                                                                                                                                                                                                                            Current Year
                     22%*, totalling $1 million in local savings each                                                 2,000
                                                                                                                     2000
                     year. In 2009 our customers received $3.5 million                                                                                                                                                    Current Year
                                                                                                                                                                                                                           Past Years
                                                                                                                      1,000
                                                                                                                     1000
                     in federal and provincial incentives. That’s more                                                                                                                                                    Past Years
                     than in all previous years combined.                                                               00
                                                                                                                               1999
                                                                                                                                       2000
                                                                                                                                               2001
                                                                                                                                                       2002

                                                                                                                                                               2003
                                                                                                                                                                       2004
                                                                                                                                                                               2005
                                                                                                                                                                                       2006
                                                                                                                                                                                               2007

                                                                                                                                                                                                       2008
                                                                                                                                                                                                               2009
                                                                                                                              1999
                                                                                                                                      2000
                                                                                                                                              2001
                                                                                                                                                      2002
                                                                                                                                                              2003
                                                                                                                                                                      2004
                                                                                                                                                                              2005
                                                                                                                                                                                      2006
                                                                                                                                                                                              2007
                                                                                                                                                                                                      2008
                                                                                                                                                                                                              2009

                                                                                                                                                                       Year
                     Best of all, participants
                     reduced 4,359 tonnes** of                                                                         Number of Evaluations                                                                  2009          1999-2009

                     carbon. Congratulations                                                                           Initial	evaluations
                                                                                                                       Follow-up	evaluations
                                                                                                                                                                                                          2,240
                                                                                                                                                                                                          1,329
                                                                                                                                                                                                                                12,018
                                                                                                                                                                                                                                 3,958
                     Waterloo Region!                                                                                  Total                                                                              3,569                 16,003


                                                                                                                       Economic Benefits                                                                      2009          1999-2009
                                                                                                                       Grants	received                                                        $3,553,580                   $5,935,748
                                                                                                                       Energy	savings	per	year*                                                   $996,750                 $2,988,750
                                                                                                                       Local	spending	on	retrofits*                                           $7,974,000                  $18,282,000


                                                                                                                       Environmental Benefit                                                                  2009          1999-2009
                                                                                                                       Carbon	emissions	reduced**                                         4,359	tonnes                  11,395	tonnes


REEP Waterloo Region
2009 Annual Report   6
                                                                                   Energy Advisor Joern Roehl
                                                                                   examines a gas furnace at a
                                                                                   home energy assessment.



                                                     Photo: Anne Marie Wetter
                                                                                                                                                                                                                            3 - 28
                                                                                                                                                                              *based on estimates by Natural Resources Canada.
                                                                                                                                                                              **based on estimates by Ontario Ministry of Energy.
Greening Sacred Spaces
A Broad Community Base
for Conservation
At the end of 2009 our mailing list grew to
104 faith communities from Waterloo Region,
and Wellington and Dufferin counties. Of these,
51 have actively hosted events and conducted
energy and water audits of their buildings.


Solar Partnerships
Greening Sacred Spaces attracted 120 hom-
eowners, business owners and faith community
representatives to its first annual Solar Infor-                 Gary Howell, Maintenance Manager at St. Francis of Assissi Church
mation Night, organized in partnership with                      with a new water heater in the kitchen. It previously took four minutes
                                                                 to get hot water from the boiler room.
Mennonite Central Committee. Results: at least
five residential solar installations in 2009, and
more on the way for 2010. Hillcrest Mennonite
Church in New Hamburg made the decision to
install a 10KW ground-mounted photovoltaic                       Audits of All Sorts
array with tracker.
                                                                 Our October networking meeting attracted
                                                                 representatives from 21 faith communities.
                                                                 Dave Klassen of REEP detailed our energy
                                                                 audit services for faith buildings. We featured
                                                                 speakers from the Power Savings Blitz, Region
                                                                 of Waterloo Water Services and Central United
                                                                 Church of Stratford, which recouped 100% of
                                                                 their lighting retrofit costs through the Electricity
                                                                 Retrofit Incentive Program (ERIP) program.


                                                                 Sharing Global Messages
                                                                 In 2009, faith communities got on board with
                                                                 Earth Hour, Earth Day and 350.org and timed
                                                                 their environmental messages accordingly to
                                                                 strengthen impact and broaden appeal of their
                                      Photo: Julian van Mossel   local campaigns.

Derek Satnik of Mindscape Innovations discussing the             REEP’s faith building energy audit was featured
Green Energy Act at the 2009 Solar Information Night
organized in partnership with Mennonite Central Committee.
                                                                 in the Mennonite Central Committee’s Creation
                                                                 Care DVD which launched in November of 2009.




                                                                                                                               7




                                                                                                                            3 - 29
                     Well Aware
                     Our Water Guides Helped
                     Owners Assess 80 Wells
                     In 2009 the Well Aware program reached 80
                     properties and hundreds more Region residents
                     with practical resources that empowered people
                                                                                                                                Photo: Susan Bryant
                     to maintain their wells and septic systems,
                     thereby protecting their families and our com-                  Brendan Schaefer, Certified Water Guide and Harold Albrecht,
                     mon groundwater resources.                                      Member of Parliament for Kitchener-Conestoga,
                                                                                     discussing the well cap on Mr. Albrecht’s property.


                     Helping Rural Residents
                     Protect Our Watershed
                     We provided additional opportunities for the
                                                                                     Stormwater
                                                                                     Education
                     public to interact directly with knowledge-
                     able staff at community forums, displays at fall
                     fairs and presentations to community groups.
                     We sent our message across Waterloo Region
                     through television coverage, newspapers,
                     newsletters and internet magazines.
                                                                                     Watching Urban Waters
                                                                                     In the fall of 2009 we brought together part-
                     Over the last three years Well Aware has been                   ners for a pilot stormwater education program
                     funded by the Ontario Ministry of Environment.                  through Green Communities Canada, funded by
                     The Grand River Conservation Authority and the                  the Ontario Trillium Foundation.
                     Region of Waterloo Public Health Department
                     have generously donated print materials and                     Stakeholders were invited to a stormwater tour
                     staff support.                                                  of Kitchener, Waterloo and Cambridge, followed
                                                                                     by a brainstorming session on how to best
                                                                                     educate the public on urban runoff,
                                                                                     water conservation and water quality.

                                                                                     Our first public event, held at Kitchener’s GTO
                                                                                     Car Wash, showed customers the ecological
                                                                                     benefits of commercial car washes with proper
                                                                                     filtration systems.

                                                                                     Stakeholders included:
                                                                                       ■ Brown’s Concrete Products Ltd.
                                                                                       ■ The Canadian Car Wash Association
                                                                                       ■ The cities of Cambridge, Kitchener and Waterloo
                                                                                       ■ The Grand River Conservation Authority
                                                                                       ■ The Region of Waterloo
                                                                                       ■ The Waterloo Stewardship Network
                                                                                       ■ Yellow Fish Road
REEP Waterloo Region
                                                               Photo: Cheryl Evans
2009 Annual Report   8

         Anne Loeffler of the Grand River Conservation Authority speaking about
         septic system upgrades at our 2009 Well Aware Community Forum.


                                                                                                                                                      3 - 30
In Our Community
                                                                                                                              Photo: Aaron Schwab Photography



                                                                        Presentations and Lunch ‘n’ Learns:
                   Our 10th Anniversary                                 •   MCC Solar Energy Information Night
                                                                        •   YNCU Should I Stay or Should I Go Green event
                   On December 3rd, 2009 our commemorative              •   Region of Waterloo ECO FEST
                   bash was held at Victoria Park Pavilion. The eve-    •   ReThink Waterloo workshops and conference
                                                                        •   KidSpark children’s festival
                   ning was complete with live band and delicious
                                                                        •   Canada Revenue Lunch ‘n’ Learns and Eco Fair
                   food. Presentations included: awards for eight       •   Your Kitchener Market Lunch ‘n’ Learn
                   REEP Star Homeowners who made exemplary              •   COM DEV Lunch ‘n’ Learn
                   home energy retrofits; the “Our Green Commu-         •   GRCA Water Forum, Water Conservation
                   nity” panel discussion; and recognition plaques          Workshop and Lunch ‘n’ Learn
                   for our valued local funders. These proceedings      •   Beechwood Park Housing Association presentation
                   were made possible thanks to support from the        •   Probus Club presentation
                   Canadian Mortgage and Housing Corporation.           •   Western Ontario Municipalities Conference
                                                                        •   Regional Heritage Advisory Planning Committee
                                                                        •   The Working Centre New Green Economy panel
                   Our First Annual                                     •
                                                                        •
                                                                            UW Environment and Business Conference
                                                                            UW Staff Conference
                   Earth Day Eco-Showcase                               •   WLU “Reaching In” workshops
                                                                        Community Events:
                   On April 22 at the Kitchener City Hall Rotunda,      •   Preston High School Environmental Expo
                   local residents learned how to make their homes      •   Woolwich Healthy Communities Green Tech Fair
                                                                        •   Festival of Neighbourhoods Kitchener Finale
                   more energy efficient from our guest speaker
                                                                        •   Maplesoft Environmental Fair
                   Don Eaton, REEP founder and building science         •   CREW Solar Energy and You forum
                   expert. We also featured contractors, eco-           •   City of Cambridge City Green Workshop
                   service providers and community organizations        •   KW Community Foundation Celebration of Giving
                   at our information fair. This event was held in      •   Chamber of Commerce Energy & Env. Forum
                   partnership with the Faculty of Environment at       •   Your Kitchener Market Blooming Earth Festival
                   the University of Waterloo.                          •   Waterloo Earth Day
                                                                        •   Energy Conservation Week with
                                                                            Kitchener-Wilmot Hydro & Waterloo North Hydro
                   Outreach to 6,000                                    •
                                                                        •
                                                                            Cambridge Home Depot event with Union Gas
                                                                            WLU Commuter Challenge event
                   Throughout the Region                                •
                                                                        •
                                                                            Alternatives Journal concert with Bob Wiseman
                                                                            GRCA Rural Routes Heritage River event
                   REEP-organized Events                                •   Laurel Creek Headwaters Association meeting
                   • Earth Day Eco-Showcase                             •   KW Twin City Home and Garden Show
                   • Tenth Anniversary Celebration                      •   KW Home and Garden Show
                   • Energy Saving Renovation Workshops                 •   KW Twin City Fall Home and Leisure Show
                   • REEP House Contractors Open House                  •   Wellesley Home and Garden Show
                   • Well Aware Information Provider Workshop           •   Wellesley Fall Fair
                   • Well Aware Community Forum                         •   Fresh Ayr Festival
                   • Stormwater Management Community Car Wash           •   Peter Benninger Coldwell Banker Concierge Show
                   • Solar Information Night in partnership with CREW   •   Heffner Spring Garden and Activities Show




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                                                                                                                              Photo: Aaron Schwab Photography
                                                                                                                            Photo: Aaron Schwabb Photography



                                                                                                                                     Past and present


                    Our Great 2009 Staff Team...                                                                                     staff, interns and
                                                                                                                                     board members
                                                                                                                                     at our Tenth
                                                                                                                                     Anniversary
                                                                                                                                     Celebration.
                    New advisors and support
                    staff joined us to meet
                    ecoENERGY demand.
                    Certified Energy Advisors: Dave Klassen
                    (Manager), Chris Albrecht, Jim Carnegie, Scott
                    Cooper, Bruce Mitchell, Cheong Ng, Kevin Pratt,
                    Joern Roehl, Steve Royce, Mike Speagle, Kate
                    Taylor and Colin Umbach.                           Thank You Interns and
                    Water Guides: Susan Bryant and Brendan             Co-op Students
                    Schaefer.
                                                                       Best of luck to Desi Balbon, Evelyne Russel
                    Outreach: Julian Van Mossel-Forrester              and Tammy Sommerville, and many thanks
                    (Coordinator), Desi Balbon (Intern), Anne-Marie    for being part of our team in 2009!
                    Wetter (Intern), and Evelyne Russel (Co-op).

                    Customer Service: Rachel McQuail (ecoENERGY


                                                                       ...and Board
                    Coordinator), Rachel D’Aguilar (Customer Service
                    Coordinator), Rommy Ibanez and
                    Tammy Sommerville (Intern).
                                                                       The end of our first decade is an opportunity to
                    REEP House: Ben Barclay (Project Manager),
                                                                       acknowledge one of our greatest strengths:
                    Heather Cain (Community Engagement) and
                                                                       our Board of Directors. We are lucky to have their
                    Cheryl Evans (Outreach Officer).
                                                                       guidance and enthusiasm on our team.
                    IT Support: Brendan Schaefer.
                                                                        ■	Paul Parker, University of Waterloo (Chair)
                                                                        ■	Geoff Malleck, University of Waterloo (Treasurer)
                    Finance/Office Manager: Roxanne Luxton.
                                                                        ■	Don Eaton, Elora Environment Centre (Secretary)
                                                                        ■	Jason Ball, Ball Construction
                    Executive Director: Mary Jane Patterson.
                                                                        ■	Mary-Louise Byrne, Wilfrid Laurier University
                                                                        ■	Michael Duschenes, Perimeter Institute
                                                                        ■	Jenn Lynes, University of Waterloo
REEP Waterloo Region                                                    ■	Kate Neff, Your Neighbourhood Credit Union
2009 Annual Report 10




                                                                                                                       3 - 32
         Financial Report
Statement of Revenue and Expenses                                                      Revenue Breakdown
Revenue                                     2009           2008                        0% 10% 20% 30% 40% 50% 60% 70%

Client	fees                          $	   891,414   $	 624,669
Grants                               $	   348,317   $	 258,441
                                                                          Earned	
Contracts                            $	    26,115   $	 35,193
                                                                         Revenue
Other	Income                         $	     9,910   $	     4,729
Total Revenue                        $	 1,275,756   $	 923,032

Expenses                                    2009           2008
Salaries	and	benefits                $	   946,778   $	 651,942              Local
                                                                          Funding
Quality	assurance                    $	    80,649   $	 57,619
REEP	House	-	construction            $	    69,521   $	         -
REEP	House	-	design	and	monitoring   $	    16,921   $	 41,001
Outreach                             $	    36,657   $	 12,078
Occupancy                            $	    32,019   $	    11,524                  	
                                                                        Provincial	
                                                                         Funding
Contracted	services                  $	    24,586   $	 14,491
Training	and	development             $	    18,510   $	     5,861
Communications                       $	    14,052   $	     6,985
Office                               $	    14,294   $	     4,940
Insurance                            $	     8,196   $	     5,212          Federal		
                                                                          Funding
Amortization                         $	     7,985   $	     5,011
                                                                                                            2009
Organizational	development           $	     5,545   $	     3,099
Travel                               $	     3,657   $	     3,008                                            2008	
Interest	and	bank	charges            $	     2,577   $	     1,147                                            2007
                                                                      International	
Total Expenses                       $	 1,281,947   $	 823,918
                                                                           Funding

Excess of Revenue Over Expenses      $    (6,191)   $     99,114




Thank-You
Thanks to the friends and                               Aaron Schwab Photography, www.aaronschwab.com
                                                        Stephen Dixon, TdS Dixon Inc.
mentors who contributed                                 Jane Lynes
                                                        James Malvern, Kay Professional Corporation
their valuable time, skills                             John Straube, University of Waterloo and www.buildingscience.com
and expertise in 2009.
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                                                      Printed on 100% post-consumer recycled paper.


REEP Waterloo Region
222 Frederick Street
Kitchener, Ontario N2H 2M8
                               REEP was founded by:
Telephone: 519-744-9799
Fax: 519-603-3453
info@reepwaterlooregion.ca
www.reepwaterlooregion.ca
                                                      REEP is a member of Green Communities Canada,
REEP is a registered charity                          a national association of non-profit organizations
under the name Waterloo                               that deliver practical solutions to Canadian house-
Region Green Solutions.                               holds. Our ecoENERGY and Well Aware programs

                                                                                                        3 - 34
                                                      are available through this membership.
Table 1 - Proposed Capital Budget Reductions from Engineering
 Project                               Source of                                                                                                                                                               Proposed Budget Reduction
                 Project Name                                                 Scope of Work                                                                  Implications
 Number                                Funding                                                                                                                                                                       (2011 to 2020)

                                                    In support of infrastructure projects, the Engineering Division from
                                                    time to time requires property lines to be reestablished in older
                                                    areas of the City where legal survey work may not have occurred for
                                                    many decades. Existing property fabric records may be old,
                                                    outdated, or lacking in detail. Additionally, property bars may be
                                                    missing or damaged. This Program provides funding to support             Some funding from this program is proposed to be reallocated to the
                                                    such needs when required. Ontario Land Surveyors are hired to            sidewalk repair program conducted by Operations (refer to 2011 budget
                                                    perform the work, and their organizations perform legal title            issue paper # 11 ). However, as per Council direction on Feb 7, 2011, an
          MISCELLANEOUS LEGAL                       research, install new property bars, and produce legal property          overall budgetary reduction can also be achieved if $10,000 annually from
800401000 SURVEYS                    C/C            plans and field notes for use in City infrastructure projects.           2011 to 2020 for total budget reduction of $100,000.                              $          100,000.00
                                                    This fund provides for very small and unforeseen projects that arise
                                                    during the course of a year. Not every year is this funding required.    Some funding from this program is proposed to be reallocated to the
                                                    With the advent of the AIRP and other very sepcfic project funding,      sidewalk repair program conducted by Operations (refer to 2011 budget
                                                    the utilization of this funding has been lessened and this is            issue paper # 11). However, as per Council direction on Feb 7, 2011, an
          GEN PROVISION/SMALL                       intdicated in the fact that this account has already been reduced by     overall budgetary reduction can also be achieved if $8,000 annually from
800401007 PROJECTS/EQUIP             C/C            25% over the past 3 years.                                               2011 to 2020 for total budget reduction of $80,000.                               $           80,000.00
                                                    This fund provides for very small and unforeseen projects that
                                                    require road closures, due to the results of an EA or other land
                                                    development requirement. Not every year is this funding required.
                                                    With the advent of the AIRP and other very specfic funding Some funding from this program is proposed to be reallocated to the
                                                                                                               sidewalk repair program conducted by Operations (refer to 2011 budget
                                                    associated with the development charges projwects, the utilization
                                                                                                               issue paper # 11). However, as per Council direction on Feb 7, 2011, an
                                                    of this funding has been lessened. This is intdicated in the fact that
                                                                                                               overall budgetary reduction also can be achieved if $10,000 annually from
                                                    this account has already been reduced by 25% over the past 3
701201002 ROAD CLOSURES              C/C            years.                                                     2011 to 2020 for total budget reduction of $100,000.                                            $          100,000.00
                                                                                                               Re-scope this project from a surface reconstruction (ie granulars,
                                                                                                               boulevards, sidewalks and asphalt) to simply a re-surfacing program. This
                                                                                                               results in tis street being transferred to the road resurfacing program and
                                                                                                               other streets of lower pirority being bumped from the street re-surfacing
          GREENBROOK- STIRLING TO               Work includes road surface improvements, grading improvements, program. Remove from 10 year forecast will result in a budget reduction of
701205092 LAKESIDE SR                RES-FEDGAS and potential improvements to pedestrian amenities.            $192,000.                                                                                       $          192,000.00
                                                                                                                             Re-scope this project from a surface reconstruction (ie granulars,
                                                                                                                             boulevards, sidewalks and asphalt) to simply a re-surfacing program, about
                                                                                                                             50% less cost and lower life span. This results in tis street being transferred
                                                                                                                             to the road resurfacing program and other streets of lower pirority being
          STIRLING AVE- GREENBROOK                                                                                           bumped from the street re-surfacing program. Remove from 10 year
701205095 TO H-W SR                  RES-FEDGAS The work includes road surface and grading improvements.                     forecast will result in a budget reduction of $165,000.                           $          165,000.00
                                                                                                                             Re-scope this project from a surface reconstruction (ie granulars,
                                                                                                                             boulevards, sidewalks and asphalt) to simply a re-surfacing program about
                                                The work includes the repair or improvement of stormwater                    50% less cost and lower life span. . This results in tis street being
                                                drainage and pedestrian amenities (where required),                          transferred to the road resurfacing program and other streets of lower
          CARSON AVE-NATCHEZ TO                 andreplacement of asphalt roadway. Specific upgrades will be                 pirority being bumped from the street re-surfacing program. Remove from
701205097 CONFED. SR                 RES-FEDGAS evaluated and assessed during the design phase of this project.              10 year forecast will result in a budget reduction of $766,000.                   $          766,000.00


                                                                                                                                                                                                                                           3 - 35
 Project                          Source of                                                                                                                                                              Proposed Budget Reduction
                 Project Name                                             Scope of Work                                                                Implications
 Number                           Funding                                                                                                                                                                      (2011 to 2020)
                                                                                                                      Re-scope this project from a surface reconstruction (ie granulars,
                                           The work includes the replacement or installation of curbs and             boulevards, sidewalks and asphalt) to simply a re-surfacing program about
                                           gutters, and asphalt roadway. Project may involve some additional          50% less cost and lower life span. . This results in streets being transferred
                                           storm sewers and storm relocation to accommodate the installation          to the road resurfacing program and other streets of lower pirority being
          SYDNEY ST-MILL TO                of curb and gutter. Pole relocations may be required to accomodate         bumped from the street re-surfacing program. Remove from 10 year
701205101 COURTLAND SR          RES-FEDGAS the new sidewalk.                                                          forecast will result in a budget reduction of $166,000.                            $          166,000.00




                                           New sidewalk installation in locations within the urbanized portion of
                                           the city where no sidewalks currently exist, other than industrial
                                           areas or new subdivisions that are being planned or currently under
                                           construction. The process of filling in these “gaps” in the city’s
                                           existing sidewalk network, which is referred to as “sidewalk infilling."
                                           The program is in support of the overall objective of providing a
                                           walking environment that is as safe as is possible for pedestrians by      About 40% budget reduction or elimination of funding will prevent the City
                                           striving to provide sidewalk availability for citizens to use wherever     from making improvements to the pedestrian network and further extened
                                           they may choose to walk within the public right-of-way. Specifically,      the timing of completion of the top third of priority locations (by more than 50
                                           this program is in support of several different corporate goals. At the    years). This would be counter to the City's Pedestrian Charter, Plan For a
          NEW SIDEWALKS-LOCAL              current rates of funding, it will take at least 27 years to address the    Healthy Kitchener, and adversely affect pedestrians - especially disabled
800405048 STREETS               RES-FEDGAS top one-third of priority locations.                                       and seniors. $1.030M budget reduction                                              $        1,030,000.00
                                                                                                                      A 50% budget reduction or elimination of funding will prevent the City from
                                                To review, design and implement traffic calming initiatives on        installing traffic alming features, which is already constrained. $550,000
701206002 TRAFFIC CALMING       C/C             various roads around the City on an annual basis.                     budget reduction.                                                                  $          550,000.00

                                                                                                                                TOTAL FOR 10 YEAR CAPITAL FORECAST $                                              3,149,000.00

                                                                                                                                                         AVERAGE ANNUAL TOTAL $                                     314,900.00




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