1. 2004 CORPORATE SERVICES AND ECONOMIC
DEVELOPMENT COMMITTEE BUDGET REVIEW

Examen du budget de ~~2003~~ 2004 pour le Comité des services
organisationnels et du développement économique

Committee Recommendations as amended

That Council approve the following recommendations with respect to the 2004 Draft Operating Budget and 2004 Draft Capital Budget:

A - Recommendations/Reductions approved by the Corporate Services and Economic Development Committee:

2004 DRAFT OPERATING BUDGET

Human Resources

1. Schedules 2 & 3 (pages 30-33)

Corporate Services

2. Schedule 1 - 2004 Budget Pressures (pages 46-47)

3. Schedule 2 - Efficiency Improvements & Internal Service Reductions (pages 48-60)

4. Schedule 3 - Enhanced Service Reductions - City Hall Services - CS3.1 - Reduce Volunteer Services (page 62)

5. Schedule 3 - Enhanced Service Reductions - City Hall Services - CS3.3 - Eliminate commemorative plaques for parks and facilities (page 62)

6. Schedule 3 - Enhanced Service Reductions - City Hall Services - CS3.4 - Reduce hours of operation at all CSC’s (page 64-65)

7. Schedule 3 - Enhanced Service Reductions - City Hall Services - CS3.5 - Reduce Call Centre hours of operation (page 66)

8. Schedule 3 - Enhanced Service Reductions - City Hall Services - CS3.6 - Reduce CSC and Call Centre capacity to respond to e-mail inquiries (page 66)

9. Schedule 3 - Enhanced Service Reductions - City Hall Services - CS3.7 - Eliminate three rural Client Service Centres (Kinburn, North Gower and Metcalfe - page 67)

10. Schedule 3 - Enhanced Service Reductions - Communications and Marketing (page 68)

11. Schedule 3 - Enhanced Service Reductions - Facilities and Property Management Services (page 69)

12. Schedule 3 - Base Service Standards Reductions (pages 70-73)

13. Schedule 4A - Inflationary Increases to User Fees & Charges (pages 75-81)

14. Schedule 4B - Opportunity Log - Revenues (pages 82-85)

15. Schedule 5 - Opportunity Log - Business Process Review (page 86)

16. Schedule 6 - Deferral/Elimination of Council-approved Initiatives (page 87)

Development Services

17. Schedule 3 (pages 97-100)

Non-Departmental

18. Schedules 1 & 2 (pages 309-310)

2004 DRAFT CAPITAL BUDGET

19. The projects contained in pages 54-113.

B - Recommendations/Reductions not approved by the Corporate Services and Economic Development Committee:

2004 DRAFT OPERATING BUDGET - Corporate Services

a) Schedule 3 - Enhanced Service Reductions - City Hall Services - CS3.2 - Reduce protocol services by 50% (page 62)

Recommandations modifiÉes du comité

Que le Conseil approuve les recommandations suivantes touchant au budget de fonctionnement et au budget des immobilisations préliminaires de 2004 :

A - Recommandations/Compressions APPROUVÉES par le Comité des services organisationnels et du développement économique :

BUDGET DE FONCTIONNEMENT PRÉLIMINAIRE DE 2004

Ressources humaines

1. Annexes 2 et 3 (pages 30 à 33)

Services généraux

2. Annexe 1 – Pressions budgétaires de 2004 (pages 46 à 47)

3. Annexe 2 – Améliorations de l’efficience et Diminution des services internes (pages 48 à 60)

4. Annexe 3 – Diminution des services améliorés – Services à l’hôtel de ville - CS3.1 – Réduire les services bénévoles (page 62)

5. Annexe 3 - Diminution des services améliorés - Services à l’hôtel de ville - CS3.3 – Éliminer les plaques commémoratives pour les parcs et autres installations de la Ville (page 62)

6. Annexe 3 - Diminution des services améliorés - Services à l’hôtel de ville - CS3.4 - Réduire les heures d’ouverture de tous les CSC (page 64 à 65)

7. Annexe 3 - Diminution des services améliorés - Services à l’hôtel de ville - CS3.5 - Réduire les heures de fonctionnement du Centre d’appels (page 66)

8. Annexe 3 - Diminution des services améliorés - Services à l’hôtel de ville - CS3.6 - Réduire le traitement des demandes par courriel aux CSC et au Centre d’appels (page 66)

9. Annexe 3 - Diminution des services améliorés - Services à l’hôtel de ville - CS3.7 - Éliminer trois centres du service à la clientèle en milieu rural (Kinburn, North Gower et Metcalfe - page 67)

10. Annexe 3 - Diminution des services améliorés - Communications et Marketing (page 68)

11. Annexe 3 - Diminution des services améliorés – Services de gestion des propriétés et installations (page 69)

12. Annexe 3 - Diminution des services de base (pages 70 à 73)

13. Annexe 4A – Hausse inflationniste des frais d’utilisation et redevances (pages 75 à 81)

14. Annexe 4B – Liste des possibilités - Recettes (pages 82-85)

15. Annexe 5 – Liste des possibilités – Examen des processus administratifs (page 86)

16. Annexe 6 – Report/Élimination d’initiatives approuvées par le Conseil (page 87)

Services d’aménagement

17. Annexe 3 (pages 97 à 100)

Hors service

18. Annexes 1 et 2 (pages 309 à 310)

BUDGET DES IMMOBILISATIONS PRÉLIMINAIRE DE 2004

19. Les projets énoncés aux pages 54 à 113.

B - Recommandations/Compressions REJETÉES par le Comité des services organisationnels et du développement économique :

BUDGET DE FONCTIONNEMENT PRÉLIMINAIRE DE 2004 - Services GÉNÉRAUX

a) Annexe 3 – Diminution des services améliorés – Services à l’hôtel de ville - CS3.2 – Réduire les services protocolaires de 50 % (page 62)

Documentation

1. Corporate Services Department General Manager's report dated 23 February 2004 (ACS2004-CRS-FIN-0012).

2. Extract of Minutes, 01 March 2004.

2004 Corporate Services and Economic Development Committee budget review

examen du budget de 2004 pour le Comité des services organisationnels et du dévéloppement économique

ACS2004-Crs-FIN-0012

Steve Kanellakos, A/City Manager began with a few introductory remarks on the Corporate Services and Economic Development Committee budget. Kent Kirkpatrick, General Manager, Corporate Services Department; Lloyd Russell, City Treasurer; Rosemarie Leclair, General Manager, Transportation, Utilities and Public Works Department; and, Ned Lathrop, General Manager, Planning and Development Services, provided an overview of the operating and capital budgets and the proposed increases to fees and charges. A copy of the PowerPoint presentation is held on file with the City Clerk’s office.

Following the staff presentation, the Committee heard from the following public delegations.

Ken Lawless, Ottawa Life Sciences Council (OLSC). Mr. Lawless indicated he had provided to members of the Committee a written submission, which outlined the achievements of OLSC in its ten years of existence and highlighted the “return on investment” the City receives from dollars invested in the OLSC . This submission is held on file with the City Clerk.

Mr. Lawless explained that if the proposed 46.5 % (i.e. $133,000.00 ) cut in funding to the OLSC were approved, it would put at risk the $600 million in projects currently in development. He emphasized the proposed elimination of the Economic Development Capital Budget further reduces the City’s ability to participate in projects that makes Ottawa competitive in the global market place (i.e. the ability to attract investments and jobs to the community.)

Responding to questions from the Committee, Mr. Lawless indicated:

· Most people are of the opinion that if the money is well spent, they would not mind a modest tax increase;

· Funding from the City is important because it provides stability for the OLSC to hire and keep core staff. As well each dollar received from the City leverages $4 from other sources;

· There is no other body in Ottawa providing a similar service as the OLSC; and,

· The “Quality of Life” is paramount to attracting capital and talent to Ottawa.

Bruce Hollands and Art Silverman, The Rothwell Group, provided the Committee with a written brief entitled “Improve Municipal Service Delivery and Reduce Costs by Outsourcing Facilities Management Services”, which is held on file with the City Clerk. Mr. Silverman stated his proposal for the City to outsource its property management services, would save the City at least $9 million without raising taxes or cutting programs. He spoke of Public Works and Government Services Canada’s (PWGSC) success in outsourcing their property management services and noted this was not achieved at the expense of employees. Mr. Silverman urged the Committee to issue a Request for Proposal to test the market to see if the savings can be achieved (i.e. require tenders to guarantee a savings of at least 10%).

In response to questions posed by Councillor Jellett, Mr. Kirkpatrick advised that outsourcing of facility management was considered by the Ottawa Transition Board in 2000 and at that time the industry advised that in order to go out with an RFP, the City would have to have harmonized service level standards in all City buildings and the cost information had to be well known. The recommendation was not to pursue it at that time. He noted that in speaking with senior management at PWGSC, one of their cautions was to be careful of how much of the 10% savings from front line costs would have to be reinvested in contract lawyers, performance monitors, negotiators, arbitrators, etc. Mr. Kirkpatrick indicated that staff would be closely monitoring the second phase of PWGSC’s outsourcing and that he would be speaking further with Mr. Silverman.

Michele Rodrique, National Capital Heavy Construction Association, provided a written copy of his presentation, which is held on file with the City Clerk. Mr. Rodrique spoke of the importance of investing in capital infrastructure and urged Councillors not to put off investing in roads, water and wastewater systems.

Responding to questions from Councillor Bloess, Mr. Rodrique noted there was a significant backlog of work that has committed funds and these contracts and projects are not being put out for tender. He felt the capital projects list (as he proposed in his presentation) would help to set goals and objectives and would benefit the residents, the industry and Council.

Mayor Chiarelli noted he had met previously with the National Capital Heavy Construction Association. He advised there is a commitment to set up a minimum of four meetings a year with the Association and the City Manager and/or the Mayor’s office in order to foster this partnership.

Jacque Burelle, President and Paul Akehurst, Chairman and CEO, Ottawa Tourism and Convention Authority (OTCA), provided members of the Committee with a package of information on OTCA. Mr. Akehurst indicated they were before the Committee to ask for support in sustaining the OTCA full budget at the 2003 level. He said they accepted the inevitability of a moderate tax increase and indexing in the future to pay for OTCA. Mr. Akehurst pointed out that OTCA advertising is paid for entirely by private sector funding; the grant received from the City is used exclusively for the operation of OTCA. As a final point, Mr. Akehurst stated the OTCA has always been a strong supporter of market ready arts and culture. He offered his opinion that arts and culture should be moved from People Services into Economic Development, so that arts and culture and tourism could work even more effectively together.

Councillor McRae asked the delegation to expand on comments he had made regarding the Rideau Canal. Mr. Akehurst responded the OTCA had been working with a committee to have the Rideau Canal designated a world heritage site in time for the Canal’s 175^th anniversary in 2007. He explained the OTCA is part of a group from Ottawa to Kingston funding a major marketing study to inventory all of the tourism-ready products and services for the full length of the Canal.

The Councillor then asked what would happen to the OTCA if the City does not provide the full funding. Mr. Burelle advised that if the cuts are not repealed the OTCA will shut down. He stated this would be a travesty for Ottawa as it would be the only G8 capital in the world without a tourism and convention bureau.

K. Jean Cottam, Citizen, provided a written copy of her presentation, which is held on file with the City Clerk. In her presentation, Dr. Cottam spoke of the need for the City to have regular small tax increases in order to keep up with the cost of living increases. She stressed that essential services such as public health, transit and fire protection must remain intact.

Garry McDonnell, Vice-Chair, Equity and Diversity Advisory Committee (EDAC) submitted a written copy of his presentation. This presentation together with a memorandum to the Committee setting out the motions approved by EDAC (in relation to the draft budget) and a memo to the City Manager expressing EDAC’s concern about the proposal to outsource the Human Rights and Employment Equity Program, are held on file with the City Clerk.

Mr. McDonnell urged the Committee to ensure that the budget cuts would not impact negatively on the most vulnerable in Ottawa and also that they ensure the Human Rights and Employment Equity Program is adequately reflected in the new organizational structure.

Mayor Chiarelli asked Mr. McDonnell if he felt he had adequate access to Senior Management to share EDAC’s ideas. Mr. McDonnell noted that Mr. Kirkpatrick was scheduled to attend an EDAC meeting (tentatively in April). However, he said there appears to be a disconnect between the necessity of caring diversity and how it has to be interwoven with general management practice not just human resources practices.

Mike Brady, Vice Chair and James St. John, Member, Accessibility Advisory Committee (AAC), appeared before the Committee. A copy of the Mr. Brady’s presentation, together with a memorandum dated 16 February 2004 to the CSEDC outlining the AAC’s review of the budget, are held on file with the City Clerk.

Mr. Brady stated the AAC’s concern with the Draft Operating and Capital budgets is that they contain proposals that may run counter to the realization of the principles of the Municipal Accessibility Plan (approved by Council in February 2004). He highlighted the proposed reductions that would have the most extreme impact on the disabled.

Mr. Brady noted there is no money allocated for audible pedestrian signals (APS) in the 2004 budget. He suggested the unspent authority from 2003 (i.e. $126,000) be allocated in 2004 or allocate 1.6% of the 2004 traffic control budget towards the APS program. Mr. St. John spoke of the necessity of audible pedestrian signals to the visually impaired.

Councillor Stavinga sought confirmation that the unspent authority for 2003 for specific projects (i.e. audible pedestrian signals and the accessibility projects) would remained dedicated to those projects; they would simply be completed in 2004. Mr. Kirkpatrick confirmed this was correct and he indicated staff would work on communicating to the public the fact that what is before the Committee and Council is new spending authority (i.e. added to any amount of unspent authority).

In response to questions posed by Mayor Chiarelli, Mr. Brady indicated that to the extent the City is made more accessible, it is made friendlier and therefore more saleable to more visitors. He also indicated that as a taxpayer and a member of the AAC, he would support a moderate tax increase.

Charles Matthews, Disabled and Proud, made the following points:

· At the nine budget consultation session he attended, there was consensus that it was important the budget not touch the most vulnerable;

· The GST rebate should be put into the Capital budget to offset some of the budget cuts;

· Ottawa Crime Prevention Authority does not fall under any umbrella and he wanted to ensure their concerns are addressed

· There will be a new, stronger Ontarians with Disabilities Act (ODA) this fall;

· The City has allocated only $310,000 to its accessibility project compared to $1 million allocated by the Ottawa District School Board this year;

· The proposed cut of 20% to Ottawa Community Housing Association will cause a lot of problems; and

· Suggested that when programs are developed that save the City money, this money should be applied to other programs that help the disabled community.

Dick Brown, Executive Director, Ottawa-Gatineau Hotel Association (OGHA) advised his association represented forty five hotels in Ottawa and seven in Gatineau. Mr. Brown spoke of the terrible impact events of recent years have had on the tourism sector (e.g. 9-ll and SARS). By way of example, he noted the members of the OGHA experienced 120,000 cancelled room nights at a value of some $15 million in the 17-week period from March to June of 2003, as a result of SARS.

Mr. Brown spoke of the important role the Ottawa Tourism and Convention Authority plays and stated the proposed budget cut to the OTCA of 89%, would effectively close this vital economic development agency. He said the OTCA needs substantial and sustainable funding for the destination marketing of the City of Ottawa and this could not be provided by the OGHA’s planned voluntary destination marketing fee. He explained the OGHA is trying to implement a voluntary initiative that would see 35 to 40 OGHA member hotels add a destination marketing fee to their guests bills. The agreement being entered into by the member hotels stipulates this money would be used for the benefit of the whole tourism sector and would not be used to replace the City’s core funding of OTCA. Mr. Brown urged the Committee to reject the staff recommendation that would effectively close the OTCA.

Mayor Chiarelli had questions about the tourism levy. He noted the City of Toronto has already implemented such a levy and questioned why it was not yet in place in Ottawa. Mr. Brown said Ottawa was close behind Toronto in having a voluntary initiative in place. He said one of the impediments is the fear that the money generated would not go into marketing but rather would replace the core funding currently provided by the City of Ottawa. He also noted he had been working with the hotel association in Toronto to urge the Ontario government to put in place a legislative framework that would allow a hotel tax similar to that which exists in five other provinces in Canada (e.g. in Quebec).

In response to questions posed by Councillor Legendre, Mr. Brown agreed that he could see the benefit of using funds from a Provincially mandated hotel room tax that was generating substantial money (i.e. not the voluntary tourism levy), to support the events that would draw tourists to the City (e.g. the festivals, arts and culture events, etc.).

Councillor Bloess noted the intent was that the OTCA would carry out the marketing program with the collected funds from the levy and he questioned if the levy would go ahead if the OTCA did not exist (i.e. as a result of this budget). Mr. Brown said it was not clear whether it would or not. He said the hotels want to ensure that the money collected is dispersed through a recognized destination marketing organization.

Dave McNicoll, provided a written submission that outlined the points he wanted to make (on file with the City Clerk). From his submission, Mr. McNicoll read the second paragraph of a letter to the Premier dated February 2, 2004. He stated it dangerous for the City to move forward without indicators of progress or reality. The Official Plan called for a report card and these are not being produced. Mr. McNicoll also expressed his concern that the budget consultations concentrated almost exclusively on the operating budget and not on the capital budget.

At this juncture (12:35 p.m.), the Committee broke for lunch and reconvened at 1:15 p.m.

Sean McKenny, President, Ottawa and District Labour Council, advised his organization represented over 90 local area unions; some 35,000 working men and women. Mr. McKenny spoke of the discord that exists in the community as a result of the consultation on this budget and the opposing sides in terms of whether taxes should be raised or not. He noted it is the opinion of some that the financial policies of the City are not stringent enough or non-existent and that money is being wasted. If it were proven to the citizens that the checks and balances were in place and their tax dollars were being well spent, he felt the residents would (if they do not already) support a tax increase. Mr. McKenny stated the Labour Council’s position is that if more money is required to sustain the quality of life that the residents of Ottawa have come to expect, then steps must be made to garner that money, including the continued lobbying for more money at the Provincial and Federal levels.

Responding to questions from Mayor Chiarelli, Mr. McKenny estimated that in excess of 65% of the members represented by the Labour Council own property in the City. He indicated as the President of the Labour Council he was speaking on behalf of the union affiliates (i.e. the 35,000 working men and women).

Councillor Jellett noted that one of the member agencies of the Labour Council is CUPE 503 and he asked if they would be willing to take a 5% pay cut in order to solve the City’s financial crisis. Mr. McKenny responded that he was not in a position to bargain on behalf of the affiliates of the Labour Council.

Kathryn Adeney, Willola Beach Property Owner’s Association, provided members with a copy of her Powerpoint presentation, which is held on file with the City Clerk. Ms. Adeney’s comments centred on her opposition to the Chat’s Falls Boat Bypass and she urged the Committee to put the unspent $350,000 allocated to this project back into the City’s budget to fund more important programs.

Mayor Chiarelli had questions concerning the Environmental Assessment (EA) for this project, noting that the City’s funding was conditional on the project meeting all of the EA requirements. Ms. Adeney indicated that initially a municipal class EA was started and there were two public consultation sessions held. It was then discovered that the municipal class EA did not apply and there has been no further public consultation. She said it was her understanding that a federal scope EA might be forthcoming, pending the proponent filing the specific route. Mayor Chiarelli then asked staff to determine prior to Council’s consideration of the budget on 24 March 2004, whether an EA will be required and what approvals are required of the Provincial Government.

In response to questions from Councillor Legendre, Mr. Lathrop confirmed the proponent (Ottawa River Project Inc.) is examining all options, including the railroad infrastructure in this area with the bridge over to the Quebec side.

Mayor Chiarelli had questions with regard to the City committing money to projects that access funding from other levels of government. He asked if there was a “protocol” in terms of the City remaining committed to their contribution. Mr. Lathrop confirmed there was indeed such a protocol and in fact felt there was a legal obligation as well.

Leonard Poole, President, Community Council of Overbrook, supplied members of the Committee with a copy of his presentation, in addition to a document he had submitted prior to the meeting. These documents are held on file with the City Clerk. Mr. Poole’s comments centred on his association’s belief the budget as presented was fiscally irresponsible. He noted that cuts in one area would lead to increased costs in another. He encouraged the Committee to make a courageous choice that would ensure future taxes of the City will not rise astronomically to pay for short-term payouts today.

Sue Taylor and Paul Durber, All-Faith Group, submitted their comments in writing, together with an open letter to the Mayor and members of Council. These are held on file with the City Clerk. Ms. Taylor spoke of the impacts the budget as presented will have on the most vulnerable in the community. She urged the Committee to think about the City’s values of caring for one another and sharing its resources.

Shelly Bird, CUPE 2204 – Child Care Workers. Ms. Bird indicated she was devastated to see the cuts proposed in the Universal Program Review and the Draft budget. Many programs such as childcare and social service programs have endured eight years of budget cuts and freezes and there are no more savings to be found. She said she found it very disturbing that for the last ten years there has not been a tax increase in the City and in this year, when faced with such horrific cuts, the Council put forward a zero percent tax increase. Further, the contemplated three percent tax increase does not come close to what is needed to protect services and quality of life in the City.

Ms. Bird urged the City to go forward to the Province and the Federal Government to demand a new deal for Cities. She stressed that the proposed budget is contrary to the 20/20 Smart Growth vision previously approved by Council. Ms. Bird stated it was time for the City to have an open debate on private public partnerships and pay-as-you-go and what these mean for the City in the long term. There are many examples of where public private partnerships do not work and end up costing taxpayers more in the long run.

Councillor McRae asked the delegation what percentage of tax increase would be enough. Ms. Bird responded that a 9.75% tax increase would ensure that the cuts proposed would not have to be made and would ensure that the City is not in the same painful position next year.

Adele Muldoon, submitted a written copy of her presentation which is held on file with the City Clerk. Ms. Muldoon felt Council was creating an aura of fear in the City (i.e. amongst the most vulnerable – the seniors, disabled, etc.) by letting the citizens believe that their services will be cut. She said that a 3% tax increase was not the answer nor were service cuts, rather the City should increase taxes by 1% and cut spending (e.g. on court cases, OMB hearings, Councillors’ budgets, staff bonuses, etc.).

Paul Parkinson, representing all Ottawa Skating Clubs, provided members of the Committee with a copy of his presentation, which is held on file with the City Clerk. Mr. Parkinson spoke about the proposed increases to ice rental fees. He said the 3% increase for the ice rental fee for fall, winter and spring rates was acceptable but the proposed 3% increase for summer ice rental was unacceptable and would seriously impact skating in the City (i.e. make it inaccessible for many skaters).

John Smart, submitted a written copy of his comments and this is held on file with the City Clerk. Mr. Smart sought assurance from the Council that whatever tax increase is set for 2004, no one would pay more than that (i.e. those that face an above-average tax increase because of increased assessments would get a tax rebate similar to that which was granted in 2003).

In response to questions from Councillor Legendre, Mr. Kirkpatrick advised there would be the same type of assessment-related tax burden shift from the non-residential class to the residential class in 2004. He noted that in 2003, Council directed the Mayor and staff to petition the province and in December he and the Mayor made a comprehensive briefing to the Minister of Finance. Mr. Kirkpatrick stated it was expected an announcement would come in the next several weeks with regards to how the Province plans to address the problem in Ottawa and other municipalities in the Province.

At the Mayor’s request, Mr. Bellomo noted there is outstanding litigation involving the rebate program that has not yet been resolved. He said the applicant (a large property owner) has made clear there is no intention to have any financial ramifications if he is successful in his court application; it is just the principle involved that he wants to have adjudicated. Their argument is that the rebate was illegal unless paid to all classes (i.e. including the business community).

Mayor Chiarelli noted there were basically two ways that property taxes are impacted by assessment evaluations on an annual basis. One is within a property tax class (i.e. within the residential class) and the City is required by Provincial law to calculate the average increase. Those whose taxes go up above the increase, have to pay more taxes, the people whose increase is below the average in fact get a tax cut. For example, if the average residential increase across the City is 20% and your evaluation goes up 30% you have a 10% property tax increase; if someone’s evaluation goes up only 10% they have a 10% tax decrease. That is designed to be revenue neutral to the City. The other type of increase on a residential property tax bill comes from a formula that exists in Provincial law that under certain circumstances, in effect cuts business taxes and requires that to be shifted to residential and this too is revenue neutral to the City.

Mr. Smart said although he did not disagree with the statements made by the Mayor, he suggested this way of describing the problem puts a distance between Council and people like himself who are suffering as a result of these tax increases and does nothing to resolve the problems.

Allister Gillis, Men’s Project, expressed concern about the proposed changes to the Employee Assistance Program (EAP) for City of Ottawa employees. He explained the Men’s Project is a community based non-profit organization dedicated to serving men and their families through the provision of counselling services (e.g. male survivors of childhood trauma, depression anger management, family violence, etc.). He said they feel any proposal that restricts EAP workers access to work directly with family members of City employees, limits that workers ability to provide optimal service to the employee. Mr. Gillis spoke of the importance of family members having access to support from experienced workers and noted counselling of family members has a direct impact on maintaining a healthy and productive workplace.

Mayor Chiarelli asked the delegation if he supported a tax increase. Mr. Gillis said he personally would support a tax increase.

Mark Saunders, Saunders Farm, provided a written copy of his presentation. Mr. Saunders indicated he was appearing before the Committee on behalf of the Ottawa Rural Tourism Council, which is an umbrella organization composed of representatives from the business community to drive growth in this emerging sector of the economy. He urged the Committee to restore the investment in the Business Development Branch to assist the tourism industry and in particular rural tourism.

Mayor Chiarelli asked staff how much it would cost to restore the Business Development position requested by Mr. Saunders. Michael Murr, Acting Director, Business Development responded that the one FTE dedicated to supporting the rural economy would cost approximately $65,000.

Gerard Lemay, Internet Institute, submitted a copy of his presentation, which is held on file with the City Clerk. Mr. Lemay felt that all of the efforts put forward by the business community in terms of the 20/20 Smart Growth Plans, had been ignored in the proposed budget. He opined that Council had no option but to implement a small tax increase this year and he urged Council to begin planning for next year’s budget with the 20/20 vision in mind.

Councillor McRae commented that she had heard repeatedly that small business owners were against a tax increase, yet Mr. Lemay spoke in favour of a small tax increase. She asked for comment from the delegation. Mr. Lemay stated the local economy is extremely important to the survival of his company. He said although he could understand and agree with the position of many that there should be a tax freeze, that the City should be run more efficiently and that the money should be found within the existing envelope, he felt this was not possible this year. He would support a small tax increase this year but stressed that the process must be changed for next year.

Greg Millard, Ontario Soil and Crop Improvement Association (OSCIA) and Terry Otto, Ontario Federation of Agriculture (OFA). Mr. Otto stated he was before the Committee to encourage the City to take a new look at the disposal of biosolids. The OSCIA and the OFA have supported the utilization of biosolids on farmland provided they met with the Ministry of the Environment’s guidelines for the spreading of such materials. He noted the Medical Officer of Health was in favour of the continuation of the program as he could find no health reasons for not doing so. He said it was his understanding that the new and improved program addressed the issues that in the past has upset neighbours (e.g. storage set back, smell, etc.). In terms of the budget as a whole, the prediction for farmers across Canada is for a 30% reduction in net farm incomes for this year and he asked that Council be cautious about raising taxes. Mr. Millard added that when he had biosolids spread on his farm for the last four years, the contractors conducted themselves very professionally and Provincial specifications were complied with.

Mayor Chiarelli asked staff what the savings to the City would be if this program were reinstated. Ms. Leclair noted that staff estimate that approximately $600,000 to $700,000 would be saved by introducing the land application of biosolids. She noted it would take some time to reintroduce the program and to phase it up to that level of savings (i.e. two to three years). There are now new regulations under the Nutrient Management Act that require some procedural items.

The Mayor recalled the previous debate that took place and stated in fact that rural Councillors were split on this issue. He asked the delegations what advice they would offer him on how he should vote. Mr. Millard felt the Mayor should follow science on this issue and noted Dr. Cushman indicated in his previous report that this was a safe practice.

Responding to questions from Councillor McRae, Mr. Millard advised that farmers could not label their produce “organic” if it was grown on land with biosolids applied. Ms. Leclair indicated staff would provide information to Councillors (prior to Council consideration) with respect to this practice in California, growing of organic produce and also ask the Medical Officer of Health to update his previous report.

John Walker, suggested the City should determine if it could solve its budget problems with 50% by way of revenue and the other 50% by cuts to services. He offered the following suggestions for increasing the revenue:

· A tax increase of 5% (resulting in a revenue of about $40 million);

· A charge for solid waste removal e.g. a fee of 50 cents per bag, would generate approximately $5 million annually;

· A charge for adults and seniors using the library e.g. a $5.00 fee annually would generate a few hundred thousand per year;

· Building permits should reflect the capital cost to the City for servicing a lot (e.g. higher in areas where the infrastructure has to be put in than in the areas where the services already exist);

· Request the Province to reimburse the City for some of the $200 million for the health and social services provided by the City;

· Request the Province to provide funding from vehicle taxes and vehicle licenses to cover the cost of arterial roads;

· Reduce the salaries and benefits for senior officials by a few percent or cut back on the travel and entertainment expenses;

· Reduce snow plowing of the side streets (as is done in Edmonton and Calgary);

· Use more modest sized vehicles for some emergency services; and

· Explore possibility of having community councils (suggested a plan with six communities).

Alexa Smith, Serenity Renewal for Families, expressed concern about the number of people who will be negatively affected by this budget. In particular, Ms. Smith stated she was most concerned with the proposed cuts to the Employee Assistance Program (EAP). She noted that currently 28% of employee’s family members access EAP counselling services. Removing this family member support could lead to increased stress levels for staff, with possible impacts in terms of absenteeism and productivity levels. Removing support for managers in the areas of workforce adjustment and union consultation deteriorates the City’s ability to take preventive action prior to incidents and situations escalating. She spoke of the many benefits of helping and empowering the family and she urged the Committee to restore the EAP program.

Responding to questions from Mayor Chiarelli, Mr. Kanellakos indicated it would cost $100,000 to restore the proposed cuts to the EAP program.

Richard Fleming, Chair and Gary Ludington, Vice-Chair, Parks and Recreation Advisory Committee, submitted a written copy of their presentation, which is held on file with the City Clerk. In his presentation, Mr. Ludington stated the proposed budget was not drafted in keeping with the seven guiding principles that were endorsed by Council as part of the 20/20 initiative. He spoke of the proposed cuts that would affect recreation programming and noted the bonuses proposed for senior management would permit the thirty community groups to maintain their programmes. Mr. Ludington also stressed the need for a Financial Master Plan for the City.

With respect to Mr. Ludington’s comment concerning the need for a Financial Master Plan, Mayor Chiarelli noted the City does have such a plan - the Long Range Financial Plan that was tabled in 2002. Mr. Russell advised the focus of the plan was the capital budget, with some observations on the operating side. Staff will be updating the plan in the fall of this year.

Gary Hauch, stated he saw the budget with all of the proposed cuts, as providing short term gain for something that will cost the community in the future.. He expressed concern about the cuts to the Employee Assistance Program. He said it was in the best interest of the employees and their families to be in good mental and emotional health; when their health begins to deteriorate so too does productivity. Mr. Hauch spoke of the potential impacts these cuts will have and the number of people that will be affected. He urged the Committee to reinstate this program and the other programs that affect people who are vulnerable in this City.

Mr. Hauch also commented on the proposal to reduce snow removal on sidewalks. He advised his son is disabled and attends university. If the sidewalks are not cleared he will be unable to attend classes on snowy days because his wheelchair will get stuck.

Richard Eveleigh, commented that the budget as presented does not reflect the 20/20 vision that was previously approved by Council. He said before increasing taxes and reducing social services, the City should be looking for other sources of income. By way of example, Mr. Eveleigh suggested there could be a municipal tax on gasoline, toll fees on busy arterials or the City could sell shares in the publicly owned transit system or the police service.

Bill Driver, felt Council should have concentrated on getting the assessment up to date in the first term of amalgamation. He said the most important asset to the Corporation is its employees and he felt Council had a golden opportunity, which they missed to pick the best from the former municipalities. Mr. Driver commented on the morale of staff and noted that staff morale in local municipalities has been declining since the early 1970’s. He also felt the universal program review should have taken place in the first three years. He offered the following suggestions : eliminate the O Train; eliminate the pedestrian bridge over the canal; and, eliminate duplication of advertising in community newspapers. He urged the Committee to strike a balance in this budget otherwise serious problems will occur.

Having heard from all delegations, the Committee proceeded to ask questions of staff and then deliberated the budget.

The following summarizes the main points raised in the questioning.

· 5.9% of the proposed operating budget is for administration. This is down from 6.4% in 2003 and an average of 8% in the former municipalities, pre-amalgamation (e.g. former Cities of Ottawa and Nepean spent approximately 12% of their budget on administration);

· Even if taxes were frozen this year, 80% of residential homeowners would still see an increase in their property taxes (due to Provincial regulations regarding the property tax system);

· Assessement growth tax revenue expected in 2004 is $20 million (i.e. a 2.5% increase in new properties being added to the assessment role). This amount is taken into account in the proposed budget;

· Within the Provincial legislation, a municipal Council can put in place a program to assist people with property taxes i.e. it can defer any assessment related property tax increases for seniors or low income individuals (i.e. a lien is placed on title and interest would be applied). Regional Council implemented this program in 1998. The means test approved by the Region was difficult to achieve and approximately 20 people since 1998, have succeeded in meeting it.

· Municipalities in Ontario do not have the legislative authority to provide a “reverse mortgage” - these are available from financial institutions in the private sector.

· This is the first year since amalgamation that user fees and charges have uniformly gone up. The proposed increase of 3% is recommended because it comes close to matching the cost escalator (e.g. inflation);

· Staff will be bringing forward a report to Committee and Council in early summer, setting out the goals/guidelines for the Long Range Financial Plan 2;

· It would not be sustainable to use Capital investments to invest in the operating budget and could not be carried out on a one-time basis unless Council changed the existing policies (e.g. debt financing, pay as you go, etc.);

· The revenue targets used in the draft estimates are not overly ambitious;

· For the most part revenues are allocated back to the operating department, however, for a few of the recreation programs the costs stay in a real property account but staff are looking at doing a re-allocation of such costs for each program back to the operating department;

· Funding that will be coming forward to the municipalities from the Provincial and Federal governments (e.g. the GST rebate), is more appropriately directed to the capital budget (rather than operating);

· Staff will be drafting a sponsorship policy for Committee and Council consideration;

· The IT retention program (i.e. bonus pay for IT employees) ended in 2003.

At this juncture, the Committee considered items 2 to 7 and then returned to the budget item, beginning with the Operating budget.

Mayor and Council (Pages 14 and 15)

Councillor Bloess put forward the following motion.

WHEREAS City Council has previously indicated that, “everything is on the table” in the search for savings with respect to the 2004 budget;

AND WHEREAS the Universal Program Review (“U.P.R.”) examined the impact of reduction scenarios of 5%, 10%, 15% and 20% on most City services;

AND WHEREAS no substantive reductions have been suggested in the Mayor’s office and salary budgets (estimated at $781, 000) or the Councillors’ office and salary budgets (estimated at $4,189,500);

AND WHEREAS a 10% reduction in the combined office and salary budgets of all Members of Council would demonstrate a commitment to provide further savings for the City from the Elected Representatives’ administration costs;

THEREFORE BE IT RESOLVED THAT Corporate Services and Economic Development Committee recommend that Council approve an overall reduction of 10% to the office and salary budgets of all Members of Council for a savings of approximately $497,050;

AND BE IT FURTHER RESOLVED THAT the City Clerk be directed to review these office and salary budgets and report back to the Corporate Services and Economic Development Committee in October 2004 regarding the availability of any possible surplus funds that could be redistributed to the City’s three largest wards based on population (Wards 3, 4 and 10).

Councillor Feltmate commented that by looking at increasing the budgets for these three largest wards part way through the year, this would not allow the Councillors of these wards to plan and use their budget wisely. She asked that the motion be amended to allow these three wards to keep their budgets as they are. Councillor Bloess agreed to amend his motion to omit wards 3, 4 and 10 from the 10% cut.

WHEREAS City Council has previously indicated that, “everything is on the table” in the search for savings with respect to the 2004 budget;

AND WHEREAS the Universal Program Review (“U.P.R.”) examined the impact of reduction scenarios of 5%, 10%, 15% and 20% on most City services;

AND WHEREAS no substantive reductions have been suggested in the Mayor’s office and salary budgets (estimated at $781, 000) or the Councillors’ office and salary budgets (estimated at $4,189,500);

AND BE IT FURTHER RESOLVED THAT the City’s three largest wards, based on population (Wards 3, 4 and 10), be maintained at the current level.

LOST

YEAS (3): Councillors Bloess, Jellett and Kreling

NAYS (6): Councillors Bellemare, Chiarelli, Hume, McRae, Stavinga and Mayor Chiarelli,

The Mayor and Council budget was then approved.

Audit (Page 20)

Councillor Bloess noted there were no budget pressures being shown for the Audit Branch. He had questions concerning the status of the search for an independent Auditor General. Mr. Kanellakos noted the position has been advertised. He said the Corporate Services and Economic Development Committee would appoint the members to the selection committee, which will be chaired by the Mayor. He anticipated the position would be filled in April.

Councillor Bloess indicated he had a motion to terminate the search for the Auditor General and asked for a legal opinion as to whether this should be dealt with In Camera. Mr. Bellomo opined this was a Human Resource issue and was not related to the budget. He suggested the motion be filed as a Notice of Motion and be dealt with In Camera at the next CSEDC meeting.

Mayor Chiarelli ruled the motion out of order and agreed it could be considered a Notice of Motion for the next CSEDC meeting of 16 March 2004. The Mayor also advised at that same meeting, the Committee would be appointing members to the selection committee for the Auditor General.

The Audit budget was then approved.

City Manager (Page 24) was approved

Human Resources (Pages 28, 29, 30 to 32 and 33)

The Committee approved Schedule 2 (pages 30 to 32).

The Committee approved Schedule 3 (pages 32 and 33), with Councillors Jellett and Stavinga dissenting on HR3.1.

The Committee then approved the Program Summary pages (pages 28 and 29) of the Human Resources budget.

Corporate Services (Pages 38 to 45, 46 to 47, 48 to 60, 61 to73 and 87)

Schedule 1 (pages 46 and 47) was approved.

Schedule 2 (pages 46 and 47) was approved by the Committee with Councillors Chiarelli, Jellett and Stavinga dissenting on item CS2.3 and Councillors Stavinga dissenting on item CS2.15.

Schedule 3

Councillors Chiarelli, Jellett and Stavinga dissented on Item CS3.1

With respect to Item CS3.2, (Reduce Protocol Services by 50%) Councillor Stavinga felt that as a capital city, Ottawa should have a Protocol Office to receive foreign dignitaries and delegations. She called for Yeas and Nays on this item, which lost on a vote of 5 to 3 as follows.

YEAS (3): Councillors Hume, Kreling and McRae

NAYS (5): Bellemare, Bloess, Chiarelli, Stavinga and Jellett

Referencing item CS3.4 (Reduce hours of operation at all CSCs), Councillor Jellett stated he wanted it on the record that he did not want the Client Service Centres in the suburban areas to be open only from 8:00 to 4:00; he asked that staff look at providing some evening hours.

With respect to Item CS3.5, Councillor Bellemare asked staff to provide additional information on the breakdown of calls received weekdays after 7:00 p.m. and on weekends, prior to Council consideration.

The Committee approved Schedule 3 - Items CS3.3, CS3.4, CS3.5, CS3.6, CS3.7, CS3.8, CS3.9, CS3.10, CS3.11, CS3.12 and CS3.13. Councillor Jellett dissented on item CS3.9 and Councillor Stavinga dissented on item CS3.10.

Schedules 4A, 4B and 5 (pages 75 to 81, 82 to 85 and 86) were received (the items contained in these Schedules were considered by the Committee as part of Items 3 and 4 of this agenda).

The Corporate Services and Economic Development Committee approved the deferral or elimination of the Council approved initiatives contained in Schedule 6 (page 87).

The Program Summary pages (pages 38 to 45) were then approved as amended.

Development Services - Business Development (pages 94 and 97 to 100)

The Committee approved Schedule 3 - Items PD3.2, PD3.3, PD3.4 and PD3.5, with Councillor Stavinga dissenting on all of these items; Councillor Kreling dissenting on item PD3.3; Councillor Bloess dissenting on item PD3.4; and, Councillor Jellett dissenting on Item PD3.5

The Committee then approved the Business Development budget as presented.

Non Departmental (Pages 306, 307, 308, 309 and 310)

At the request of Councillor McRae, Mr. Russell agreed staff would provide an updated listing of the items under “Debt Charges”, prior to Council consideration of the budget.

The Committee approved the Program Summary, Schedule 1 and Schedule 2 of the Non Departmental Operating budget.

Capital Budget (Pages 54 to 113 and pages 386/387)

Councillor Bloess referenced Project 903009 - Lansdowne Park Retrofits 2004, (pages 102/103) and asked that staff provide him with information on the operating budget for Lansdowne Park and also information on Lynx Stadium, prior to Council consideration of the budget.

The Committee then approved the Capital budget as presented.

At Councillor Hume’s request, Mr. Kirkpatrick advised the Committee in approving the budget, had approved $20.5 million in expenditure reductions and $12 million in revenue increases.

The Corporate Services and Economic Development Committee budget was then approved as amended.

That the Corporate Services and Economic Development Committee consider, for recommendation to Council, the applicable 2004 Draft Operating Budget and 2004 Draft Capital Budget, as amended by the following.

2004 DRAFT OPERATING BUDGET

Re: City Hall Services, Office of the Clerk, Schedule 3 – Service Reductions

1. That Item CS3.2 (page 62 of the 2004 Draft Operating Estimates) – “Reduce protocol services by 50%” - not be approved.

CARRIED as amended

Directeur des services financiers et trésorier municipal

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