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1. 2011 DRAFT BUDGET - FINANCE AND ECONOMIC DEVELOPMENT COMMITTEE
BUDGET
PROVISOIRE 2011 – COMITÉ DES FINANCES ET DU DÉVELOPPEMENT ÉCONOMIQUE |
That Council, sitting as Committee of the Whole, approve:
1. The 2011 Public Health Draft Operating and Capital Budget; and
2. The Finance and Economic Development Committee portion of the 2011 Operating and Capital Budgets as amended by the following:
a) That the effective date for the user fees listed on pages 86 and 87 of the Organizational Development and Performance Department Budget be amended to read “April 1, 2011”.
RecommandationS MODIFIÉES du ComitÉ
Que le Conseil, siégeant à titre de
Comité plénier, approuve :
1. Le budget préliminaire de
fonctionnement et d’immobilisation pour Santé publique; et
2. La partie des budgets de
fonctionnement et d’immobilisations de 2011 relative au Comité des finances et
du développement économique, telle que modifiée par ce qui suit :
a)
Que la date
d’entrée en vigueur officielle des frais imposés aux usagers figurant aux pages
86 et 87 du Budget du Service du développement et du rendement organisationnels
soit changée au « 1er avril 2011 ».
DOCUMENTATION
1. Committee Coordinator’s report dated 24 January 2011 (ACS2011-CMR-FED-0002)
2. Extract of Minutes of the Finance and Economic Development Committee Special Meeting of 1 February 2011
Finance and Economic Development Committee
Comité des finances et du développement
économique
and Council / et au Conseil
24 January 2011 / le 24 janvier 2011
Submitted by/Soumis par : Committee Coordinator
/ Coordonnatrice du comité
Contact Person/Personne ressource :
Diane Blais,
Committee Coordinator/Coordonnatrice
du comité
City Clerk and
Solicitor/Greffier et Chef du contentieux
(613) 580-2424 x, 28091, diane.blais@ottawa.ca
SUBJECT:
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2011 DRAFT BUDGET - FINANCE AND ECONOMIC DEVELOPMENT COMMITTEE |
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OBJET
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BUDGET PROVISOIRE
2011 – COMITÉ DES FINANCES ET DU DÉVELOPPEMENT ÉCONOMIQUE |
That the Finance and Economic Development Committee consider the relevant portions of the 2011 Operating and Capital Budgets and forward its recommendations to Council, sitting as Committee of the Whole, for consideration at the meeting to be held March 8 to 10, 2011, as required.
Que le Comité des finances et du développement
économique examine les sections pertinentes des Budgets d’immobilisations et de
fonctionnement de 2011 et qu’il présente ses recommandations au Conseil,
siégeant à titre de Comité plénier, aux fins d’examen lors de sa réunion prévue
du 8 au 10 mars 2011, au besoin.
City Council, on December 8, 2010, while considering the 2010-2014 Council Governance Review report, approved the 2011 Budget process which indicated that the individual Committees, Board and Commission would hold meetings to listen to public delegations, review their respective budgets and make recommendations to Council. At that meeting, Council also approved a motion directing the City Treasurer to report back to Council on 15 December 2010 with a more detailed timetable, including suggested Standing Committee review dates, and budget development guidelines.
On December 15, 2010 Council considered and approved the City Treasurer’s report entitled “2011 Budget Timetable and Process”, together with the following motion:
MOTION NO. 2/9
Moved by Mayor J. Watson
Seconded by Councillor S. Desroches
WHEREAS this Council is committed to promoting a culture of fiscal responsibility at City Hall; and
WHEREAS this Council wishes to proceed with the development of its 2011 Budget as soon as possible; and
WHEREAS budget directions with respect to any taxation target have not yet been provided to either staff or Standing Committees responsible for preparing and reviewing budget submissions; and
WHEREAS City Council’s first budget will set the pace and tone for all four budgets we will fashion together; and
WHEREAS Council is mindful of the tough choices many of its citizens must make every day in this economy and is prepared to make the same tough choices when deciding how to spend taxpayers’ dollars in 2011 and beyond; and
WHEREAS the Long Range Financial Plan that is to be developed after the adoption of the 2011 budget provides a term of Council forecast of the City’s financial situation;
THEREFORE BE IT RESOLVED that the 2011 Draft Budget for all of the City’s tax-supported programs be prepared on the basis of a maximum 2.5% total tax increase; and
BE IT FURTHER RESOLVED that the Mayor and the City Manager present a budget overview report to Council that details how that tax target objective can be achieved at a Special Meeting on January 19, 2011; and
BE IT FURTHER RESOLVED that City Council direct each Standing Committee to work within the funding envelope for the budgets in their mandates, and that any additions to the budget will require offsetting reductions; and
BE IT FURTHER RESOLVED that City Council request the Ottawa Police Services Board and the Ottawa Public Library Board deliver budgets that would have no more than 2.5% increase on their tax requirement; and
BE IT FURTHER RESOLVED that the Long Range Financial Plan be developed with a maximum tax increase of 2.5% for the years 2012 to 2014.
CARRIED
Of particular note to Committees is the second resolution of this motion, namely:
“BE IT FURTHER RESOLVED that City Council direct each Standing Committee to work within the funding envelope for the budgets in their mandates, and that any additions to the budget will require offsetting reductions;"
City Council, at its meeting of 19 January 2011, tabled the 2011 Draft Operating and Capital Budgets and referred the budgets within each Standing Committee's mandate, to that Committee for consideration and recommendation to Council.
The 2011 Finance and Economic Development Committee Draft Operating and Capital Budget is now before the Committee for the purpose of hearing from public delegations and to consider and make recommendations to Council.
The Agriculture and Rural Affairs Committee will review and make recommendations on those portions of the budget with Rural Implications.
This meeting was advertised in the three daily newspapers and public delegations will be received by the Committee. As well, there will be five multi-ward bilingual budget consultation meetings held in late February and early March, 2011 (i.e. in advance of Council's consideration of the Budget to be held March 8 to 10, 2011).
There are no legal/risk management impediments to implementing the recommendations int his report.
Financial Implications are identified in the 2011Draft Operating and Capital Budgets, as well as in the City Treasurer's Transmittal Report dated 17 January 2011 and entitled "2011 Draft Operating and Capital Budgets - Tax Support Programs", tabled with Council on 19 January 2011.
Document 1 - City Treasurer's report dated 17 January 2011, entitled 2011 Draft Operating and Capital Budgets - Tax Support Programs (issued previously to all Members of Council and held on file with the City Clerk)
The Committee Coordinator will forward the Committee's recommendations to Council for consideration, at the meeting of March 8 to 10, 2011. Budgets will be amended as per Council deliberation and adoption.
2011 DRAFT BUDGET - FINANCE AND ECONOMIC DEVELOPMENT COMMITTEE
BUDGET PROVISOIRE 2011 – COMITÉ DES FINANCES
ET DU DÉVELOPPEMENT ÉCONOMIQUE
ACS2011-CMR-FED-0002
city-wide / À l’Échelle de la ville
Councillor Holmes, Chair of the Interim Board of Health, spoke to a PowerPoint presentation, which served to provide an overview of the Public Health budget and explain the factors contributing to that department’s budget pressures. In particular, she explained that the proposed budget would address urgent health issues relative to seniors, infectious disease and sexual health, mental health, and outbreak management while maximizing existing and new partnerships. A copy of this presentation is held on file with the City Clerk.
Councillor Egli referenced the proposal of making it mandatory to wear helmets in arenas and he inquired about an awareness program around such things as skateboarding and how money would be spent in this regard. Dr. Isra Levy, Medical Officer of Health, believed any regulations would face some opposition. Therefore, Public Health programs tended to focus on the educational components through a youth engagement strategy. He explained this was a model used in a number of health promotion activities where staff provided youth with guidance and a context in which they could create messaging for their peers that was consistent with healthy living and positive health promotion lifestyle changes. He added that to this end, Public Health staff tended to work with schools and peer group support networks within the school system.
Councillor Clark referenced slide 5, noting that the increases were $2.8M and that the offsets were 50% Provincial revenue and 50% tax levy. If Public Health was maintaining a 75/25 funding split, he wondered why the increases were 50/50. Dr. Levy explained that the 75/25 split was a rough guideline that reflected the balance when all programs and services were factored into the equation. Speaking to the particular slide, he indicated it reflected the increases ($3.8M) needed to support public health making a difference in the community. He noted that staff had been able to find $1M in internal efficiencies, leaving a balance of $2.8M. Further, he reported having received a commitment of $1.4M from the Province for the basket of services proposed. As a result, the balance was being allocated to the City.
Councillor Clark was concerned that the City seemed to be picking up a little more of the costs for new programming and he felt there was not enough justification for this provided in the Budget documents. However, he submitted it would be up to the new Board of Health to work this out.
Councillor Deans was glad to see the department moving ahead with new initiatives with respect to brain injury prevention, youth suicide and infectious disease prevention. However, she inquired about the overall increase in full-time equivalent staff (FTEs). Dr. Levy indicated the increase would be 11.
Responding to a follow-up question from the Councillor, the Medical Officer of Health explained that the increase in 11 FTEs, on a base of 500, would be represented in the total $50M package for Public Health.
Councillor Chiarelli referenced a question that had been put to the Medical Officer of Health (MOH) the previous year through the Community and Protective Services Committee with respect to offsetting negative impact on health by measures that bubble-wrap kids. He recalled that the MOH was going to conduct some investigations to see if anyone would be willing to partner with the City on a study. He wondered how matters of this nature would follow through, given the impending changes in governance structure. Dr. Levy imagined that staff would continue to follow-up on such inquires and/or directions through the new Board of Health. However, with respect to the specific matter raised, he advised that staff had consulted with sister organizations across the Province and professional opinion was that the issue was not a concern, from their professional point of view, that outweighed the positive benefit. Never the less, staff explored the willingness of other organizations to partner in a research study and the response was a lack of interest. When asked what kind of study it would take to answer the question meaningfully, from an academic perspective, local universities suggested it would be quite prohibitive in terms of the type of study that would need to be done, and especially the costs of the study. Therefore, for a service organization, he would be coming back with a staff conclusion and recommending that the City not pursue such an exercise. Instead, he would recommend that the Federal government, through its Canadian Institutes of Health Research, might want to pursue this in the context of its priorities.
Responding to questions from Councillor Wilkinson with respect to rates of immunization for infectious diseases, Dr. Levy explained the challenges Public Health faced with respect to immunization came in two forms. One was the increase in the number of diseases that could be prevented by modern scientific advances in terms of the number of immunizations available and the concomitant complacency that occurred as the rates of these diseases became lower and lower because of the effectiveness of immunization. He submitted that for each different disease, staff found different obstacles, usually related to awareness, willingness and concerns about side-effects, which were almost always unfounded. He noted that there was a small but vocal group of people who believed vaccinations caused harm and, one of the department’s challenges involved working with the physician community to overcome some of the negative perceptions that existed and that could exacerbate the complacency in the larger population. He confirmed that the recent reorganization in that part of the team would be more emphasis on awareness.
Councillor Wilkinson noted that the department provided Radon gas kits but there had not been a lot of publicity relative to this. She wondered if there would be an awareness campaign, given that Radon gas was prevalent in the Ottawa area. Dr. Levy explained the problem with Radon gas was that it was largely background radiation, therefore the Federal government took the lead in developing and providing information resources and new outreach programs for individuals with concerns about the health risks. He indicated the department had no plans to do outreach in this area, which would only increase costs. However, he indicated he would consider it if there was a need.
Mayor Watson referenced a joint initiative underway with respect youth suicide prevention. He wondered if staff had been in contact with the group, whether the proposed departmental budget would help address some of these issues so there was no duplication of efforts. Dr. Levy responded affirmatively, explaining that Public Health staff worked closely with community partners and focused on ensuring synergies rather than duplication.
Responding to questions from Councillor Hume with respect to food premises inspections and service levels related to same, Dr. Levy indicated the department had a food safety strategy, which had been reviewed annually by the Community and Protective Services Committee and would be brought forward to the new Board of Health. He explained the department was making incremental improvements which, he believed, would result in substantial improvements in terms of the program’s effectiveness and efficiency. He advised that the service level was measured by achieving a certain number of inspections based on a level of complexity of risk allocated to each food establishment. He confirmed that highest risk establishments should be inspected three times per year. On this topic, he reminded Committee that about four years prior, the Auditor General had undertaken an audit and found the department was achieving its target 68% of the time. He noted the department was on track for achieving this target 100% of the time before H1N1 and as a result of the aforementioned event, had achieved the target about 91% of the time in 2010. He clarified that the establishments in question were not actually high risk establishments but the way they did food preparation was considered high risk for food contamination. He confirmed that the proposed 2011 budget would put the department on track to achieve 100% of its target this year.
Going back to his original questions with respect to the funding split, Councillor Clark expressed the view that the 75/25 split should be maintained. He referenced the $1.4M Provincial commitment and submitted that the City’s corresponding contribution should be in the order of $500,000 rather than $1.4M. He felt something had to be done to put this back into balance. In other words, he felt the tax levy increase of $1.4M was in excess of overall agreements. Accordingly, he indicated he would not be supporting this budget.
Before moving to the City Manager’s presentation on the draft Budget, Committee dealt with the following motion.
Moved by Councillor P. Clark
WHEREAS the IT Sub-Committee’s recommended Terms of Reference give it the authority to “Review (IT) project proposals, including costs and return on investment, and make recommendations to Committee and Council as part of the City’s annual budget process”; and
WHEREAS the 2011 budget timetable will not allow the IT Sub-Committee to review its portion of the Draft Budget Estimates and report its recommendations to Council through the Finance and Economic Development Committee;
THEREFORE BE IT RESOLVED that the IT Sub-Committee be delegated the authority to review its portion of the Draft Operating Budget Estimates (Capital and Operating) and report its recommendations directly to City Council at the 8 March 2011 Special Council meeting.
CARRIED
Mr. Kent Kirkpatrick, City Manager, spoke to a PowerPoint presentation which served to provide Committee with an overview of 2011 Draft Tax Supported Budget. In particular, he listed the areas under review, outlined the 2011 budget change summary, highlighted the changes, discussed efficiencies, provided a summary of the capital authority, and talked about the sources for capital funding. A copy of this presentation is held on file with the City Clerk.
Mr. Steve Kanellakos, Deputy City Manager of City Operations, spoke to a PowerPoint presentation which served to brief Committee on the Service Ottawa program. In particular, he talked about the benefits of the Service Ottawa program, provided some background with respect to this initiative, and discussed examples of how this program would change the way residents interacted with the City and received City services. A copy of this presentation is held on file with the City Clerk.
Committee then heard from the following public delegations.
Ms. Teresa Whitmore, Chair of the Business Advisory Committee and Ms. Barb Lippett, Vice-Chair of the Business Advisory Committee, addressed the proposed funding for economic development in 2011. They indicated the BAC felt the money put into economic development was commendable and a good start. They also felt economic development spending should be seen as an investment, not an expense for the City. They submitted that how the money was spent would be crucial and they recommended the City look for smart investments that would create conditions in which businesses could thrive. They suggested investing in small to medium-sized businesses and to continue to help these businesses grow, not just from the initial stages but also through their lifecycle. They reported on statistics that showed new businesses tended to fail, or started to fail, within two years of their start-up. She believed that, through economic development, the City should be there lending a lending and providing some support to ensure this did not happen. They noted that the proposed $2M was in addition to the Economic Development branch’s $3.5M base budget. They remarked that Ottawa’s local economy was heavily dependent on the technology section and they stressed the need to diversify within the tech sector to build on the strength of local knowledge-based workers. They referenced green technology, photonics, digital tech and life sciences as areas where the City should be looking to encourage people, such as former Nortel employees, seeking other opportunities.
Mr. Essam Hamed, Co-Chair of the French Language Services Advisory Committee, was pleased that many of Council’s priorities were the same as some of the issues of concern to the FLSAC; including poverty reduction and social housing, recreational activities, and economic development. He relayed his Committee’s full cooperation and support in these matters. He referenced examples where political will, combined with public engagement, had led to great results. He noted that there had been may successes and advancements since the City’s adoption of the Bilingualism Policy in May 2001, however, he submitted that much work remained to be done. He referenced such areas as poverty, social housing and recreational programs and provided statistical data in support of his points in these areas. He commended Council for its engagement in terms of no increasing recreational fees and in terms of enhancing web-based measures for promoting recreational and cultural activities. Lastly, he talked about the issue of economic development. He maintained that bilingualism was an asset to Ottawa and contributed to the region’s economic development and to the well-being of its residents. He believed the presence of a vibrant and active francophone community and access to services in English and in French contributed to the perception of Ottawa as an attractive and welcoming commmunity for businesses and for tourists. When talking about the value added of bilingualism, he felt two sectors stood out: arts and culture; and tourism. With respect to arts and culture, he submitted that support of this sector represent an excellent investment which contributed to citizens’ well-being and quality of life. In terms of tourism, he suggested that the City improve its welcoming infrastructure and its services in French and that it encourage private industry to do the same. He felt this would lead to Ottawa becoming a choice tourist destination. In closing, he reminded Committee of the City’s commitment to offer comparable services to its residents in English and in French. A copy of Mr. Hamed’s written submission is held on file with the City Clerk.
Mr. Louis-Martin Parent, Canadian Federal of Independent Business, spoke to a PowerPoint presentation, which served to introduce the CFIB, explain how CFIB members viewed the City and its services, outline its members concerns and priorities and provide the organization’s recommendations to City Council. A copy of Mr. Parent’s presentation is held on file with the City Clerk.
Councillor Chiarelli referenced the presentation insofar as perceptions regarding wage levels and he wondered how the organization operated internally; whether they just asked questions about people’s perceptions on wage levels. He noted this was one area where the City had empirical data showing what the relative wage levels were across Ontario. Therefore, he wondered if the organization fed information back to its members to correct misperceptions. To the last point, Mr. Parent responded affirmatively. However, he explained that the organization had taken data from the Wage Watch study, which was based on Statistics Canada data. Therefore, it was not just a perception of wages, it was an actual study based on a comparison of equal comparable positions in the private and public sector at various levels.
Councillor Chiarelli presumed that, across Ontario and across Canada, there would be different perceptions based on the very same data. Mr. Parent again responded affirmatively, noting this was why it was drilled down to municipalities. He added that in the case of Ottawa, the data was for Ottawa-Gatineau, because this was how Statistics Canada had looked at it. That being said, he advised that all the organization’s data was verified so they did not simply throw out numbers that were not supported.
Mr. Moe Romanow, resident, believed that Council did not know where the money was being spent, at a level of detail sufficient to establish priorities among the multitude of activities performed in the City. Further, he felt Council had not established a system of determining a value for dollar spent, which would allow it to establish such priorities. He submitted that by authorizing a budget that allocated money to the broad spectrum of city activities and then dumping everything into the lap of management staff, Council had allowed staff to retail the role of establishing priorities. To remedy this, he advocated for the adoption of an online monthly variance report and the creation of two analyst positions, to be seconded from existing staff resources and who would report directly to Council to monitor surpluses, projections and deficiencies. A copy of Mr. Romanow’s written submission is held on file with the City Clerk.
Mr. Claude Haw, President, Ottawa Centre for Research and Innovation, spoke in support of the economic development plan and the additional funding for economic development. He indicated the OCRI was pleased to have been a contributor to the five year strategy for sustainable economic prosperity, which had broad community engagement and identified a number of opportunities for expanding economic growth locally. He advised that in this strategy, the OCRI was identified as a lead agency for the Innovation Ottawa pillar while supporting the other two pillars (Destination Ottawa and Local Ottawa) and that the organization was eager to continue its partnership with the City. He was pleased that the Draft Budget included an additional $2M in funding to support the high priority actions identified in the plan. In talking about the Ottawa community, he reported that the innovation community was in transition; from being telecom-centric in the 1990’s to being more and more diverse. He remarked that, from a base of about 1000 companies and 80,000 people in 2000, the community had expanded to 1944 companies at the end of 2010. He added that innovation was strong in Ottawa, with excellent research and educational institutions and clusters including telecom, photonics, security and defence, wireless, software, e-business and life sciences. He also reported on many new clusters, including clean technologies, digital media and communication enabled applications. Although the economic downturn had an impact on the region, its businesses had survived better than in many other places. He noted that many of the large organizations had been replaced with multiple multi-nationals and new companies had moved into the region, primarily to access the talent here.
Speaking about OCRI, he reported on a number of changes underway, some of which were identified in the strategic planning effort. In particular, he talked about the movement of the K-12 education group, primarily focused around school breakfast programs and similar social programs, which were in support of the school boards and brought a great deal of value to the community but were not economic development. The organization was in the process of moving such programs to a separate organization. In addition, the entrepreneurship centre, which had been delivering services to the community for more than twenty-five years, continued to be a key component of OCRI. We reported on funding received recently for the regional innovation centre, which would allow the organization to accelerate the development of new corporations in the knowledge-base sector and its global marketing initiatives, which were very important in putting Ottawa on the map. In closing, he re-iterated OCRI’s support of a number of initiatives underway and applauded the $2M of incremental funding into economic development.
Councillor Thompson wondered how OCRI compared to similar organizations in other major cities. Mr. Haw indicated this was a complex question because many cities did things differently. He noted that OCRI embodied a number of groups within its organization, including the Entrepreneurship Centres. In noted that in some cities, global marketing activities were done by separate organizations. He believed OCRI offered a lot of value in terms of efficiency and in terms of leveraging capabilities across the whole innovation sector by working to start business, working to accelerate those with the best potential and then taking the leading companies to the world opportunities. In terms of the funding going into economic development, he felt the aforementioned $2M was a great step forward but he noted that many other jurisdictions were spending at a higher level and investing at a higher level in this regard.
Mr. Dick Brown, Executive Director, Ottawa-Gatineau Hotel Association spoke as a member of the Board of Directors of the Tourism Industry Association of Ontario. He recalled that in 2009, the Ontario government had received on Ontario’s tourism industry and its competitiveness. This report identified tourism as one of the sectors in the changing Ontario economy that had very strong growth potential and pointed out that the investment in major events had the highest potential in attracting overnight visitation, which in turn generated the desired tourism expenditures. He reported that currently in Ontario, 80% of tourism was from Ontario residents. He noted this data was mirrored in Ottawa. He submitted that the growth of non-resident tourism was a wonderful opportunity for significant economic benefit and to support this goal, the Province had established a fund for partnering with municipalities and the private sector to attract major events to the Province and its cities. I noted with enthusiasm that the City’s proposed economic refresh also recognized the opportunities available to Ottawa’s economy by growing the local tourism sector. He hoped the City’s major event strategy would align with the Provincial strategy and allow Ottawa to collaborate with the Provincial government and the private sector to bring a steady stream of major events to Ottawa. He talked about what was needed to attract major events; good transportation, solid infrastructure, great venues, other attractions and adequate funding. He submitted that with the approval of the proposed budget, Ottawa would have all these elements and would be in a strong position to strengthen its local tourism sector and the economic benefits associated with it. He encouraged Committee and Council to approve the economic development budget as presented.
Mr. Geoff Publow, Senators Sports and Entertainment, spoke from a PowerPoint presentation which served to promote the notion of a more strategic, integrated approach to attracting major sporting events. He noted that the building blocks were in place and he discussed the City’s role in this regard. A copy of Mr. Publow’s presentation is held on file with the City Clerk.
Responding to a question from Councillor Thompson arising from the presentation, Ms. Nancy Schepers, Deputy City Manager of Infrastructure Services and Community Sustainability, advised that in order to advance his proposal, Mr. Publow would need to talk to staff in the Economic Development group.
Mr. George Brown, Ottawa Community Loan Fund, indicated that his organization, which was responsible for over $1.5M in small business and training loans to over 190 clients, had celebrated its 10th anniversary in 2010. He reported that the organization evaluated the socio/economic impact of its loans through a yearly external evaluation and that last year, the organization had processed 24 loans, which created a total of 34 jobs. He advised that the OCL Board strongly supported the direction of the City’s economic development plan, specifically insofar as its focus on entrepreneurship and community economic development. He felt it was important to ensure the City’s support for economic development was across the spectrum of economic development, from the tech sector to the community economic development and the small business sector. In closing, he expressed the OCL’s commitment to working in partnership with the City to build prosperity in Ottawa.
Councillor Egli wondered how the organization defined success and how many of the start-ups it had helped were still in business three years after receiving a loan from the OCL. Mr. Brown indicated the organization had started to track this type of thing over the past three years. He advised that he defined success in terms of whether or not the loans had been repaid. He reported that over the last ten years, the organization had a historic loan loss of under 10%. He re-iterated that three years prior, the organization had started evaluating the impact of its loans. He advised that out of the 12 start-up business loans the previous year, these had created 16 new jobs, in addition to their own jobs. Although he could not speak to a survival rate, he noted that it was not very good for small businesses in general but the previous year, with the City’s assistance, the organization had started providing more hands on help to entrepreneurs so that they did not simply cut them a cheque and walk away.
Responding to a follow-up question from Councillor Egli, Mr. Brown indicated their average loan was about $8,000 and their yearly total was approximately $170,000.
Mr. Noel Buckley, President & CEO of Ottawa Tourism, submitted that tourism was a key component of economic development and that Ottawa’s tourism industry generated 14,000 direct and 27,00 indirect jobs. He remarked that in 2010, the Province introduced a new structure dividing Ontario into thirteen regions in the hope of doubling tourism revenues by the year 2020. He felt Ottawa had great new infrastructure and was well positioned to capitalize upon these opportunities. He believed additional investments were required in terms of marketing and promotion in order to fully maximize on the potential in this area. He reported that for the past five or six years, Ottawa Tourism had been making substantial investments in marketing and promotion. He indicated one of the things Ottawa Tourism did when investing in marketing was to consider Ottawa’s branding position. He reported that they had consistently built their branding on what they considered to be four key pillars: capital, culture, green and urban. He submitted that special events were important in support such branding positions. He remarked that the Junos and the Genies supported the urban and cultural messages whereas marathons supported the urban and green messages. He suggesting that providing a fund to support the solicitation and investment in these key areas was critical to the long-term success of destination marketing and that this was a most appropriate role for the City. Further, ensuring that these investments were made in cooperation with key stakeholders would be wise. He felt that, as the economic fundamentals changed in many jurisdictions, tourism would become an opportunity, though a highly competitive opportunity. In closing, he congratulated City staff for undertaking to refresh Ottawa’s economic development plan and expressed his organization’s willingness to work with the City in moving forward.
Mr. Deepak Dave, resident, suggested that as Committee deliberated regarding economic development, they should consider the following factors: the pricing, quantum and allocation of capital for local business in Ottawa; the degree of internationalisation of Ottawa’s local business; and drawing commercial partnership such as banks, credit unions and related agencies into the dialogue on local business in Ottawa. With respect to the first point, he felt there was too high a price paid by local businesses, particularly between the ages of 0-4 years post-founding and he put forward a series of recommendations in this regard. Speaking to his second point, he believed that, given Ottawa’s multinational and ethnically diverse population, this City had the potential to become an international business destination. He recommended that the City take an active role in understanding how to channel foreign capital into community investment and loan funds. With respect to his last point, he submitted that small organizations were not as efficient at pricing, directing and administering capital as financial firms with skilled and experienced professionals. Therefore, he recommended that the City organize a round-table of stakeholders in local business financing. A copy of Mr. Dave’s presentation is held on file with the City Clerk.
Mr. Roch Brunette, Ottawa-Gatineau Film and Television Development Corporation, spoke from a PowerPoint presentation, which served to provide Committee with an overview of the organization he represented, including who they were and what they did. He reported on some of the organization’s successes and in conclusion, he talked about the investment the City had made on this area as well as its return on this investment. A copy of Mr. Brunette’s presentation is held on file with the City Clerk.
Mr. Dale Harley, Executive Advisor, National Capital Heavy Construction Association, spoke from a PowerPoint presentation, which service to provide Committee with an overview of the companies the organization represented as well as the number of people it employed and its financial impact on the local economy. He talked about taxpayers’ investment in infrastructure and the importance of appropriately maintaining such infrastructure in order to save money in the long run. In closing, he outlined a list of NCHCA recommendations with respect to infrastructure investment and maintenance. A copy of his presentation is held on file with the City Clerk.
Councillor Egli noted that in his recommendations, the delegation talked about removing questionable operational projects from the list. He wondered what criteria he would use to determine what was and what was not a questionable project. Mr. Harley indicated he had reviewed the capital projects for the various Committees and he felt there were sometimes studies that should be financed from operational budgets rather than capital budgets. As an example, he referenced things such as overlays.
At this juncture, Committee posed questions of staff. The following summarizes the main points.
Councillor Deans referenced the Service Ottawa initiative and asked how much the City was investing on the capital side, noting that the presentation had identified $40M in savings by 2014 with $3.4M in savings for 2011. She noted that there was no mention of the project savings for 2012 and 2013 so she inquired about the incremental savings year over year to get to the aforementioned $40M. Mr. Kanellakos reminded Committee that the capital investment started in 2010 when Council approved $25M towards this initiative. Another $15M was allocated in the 2011 budget, $15M in 2012, $14.9M in 2013 and $14M in 2014. With respect to the savings, he explained this year, these had been allocated across the various Standing Committees so Finance and Economic Development Committee was only seeing a portion of it in its portion of the budget. He indicated the savings this year were projected to be what staff built into the budget as a reduction; $10.6M. However, he noted that there would be an operating pressure because there were some servicing costs in terms of contracts, maintenance, etc., of $2.6M for a net savings of $8M total in efficiencies in 2011. He expected $11M in savings in 2010, $6.4M in savings in 2013 and $3M in savings in 2014.
Councillor Deans surmised this was an overall investment of roughly $84M and a savings of approximately $40M over the period of implementation and then $40M annually going forward. Mr. Kanellakos responded affirmatively, adding that the rate of payback varied depending on the projects. Some of them had a relative quick payback period of a year or a year and a half whereas others would pay back over seven years. He noted the big ones were in the range of three and a half to four years.
Councillor Deans noted that the program anticipated an overall reduction of 300 FTEs by 2014 and she wondered how this would be achieved. Mr. Kanellakos indicated a workforce adjustment team had been created, as part of the project management team, to make sure the City harvested savings through those compensation reductions. The team had been given the task of mapping out business processes and identifying efficiencies, where jobs could be collapsed and where positions could be eliminated. He noted that the savings would actually be taken out of departmental budgets so departments would have to work towards those savings.
Councillor Deans asked whether the unions had been involved in the workforce adjustment program. Mr. Kanellakos indicated the unions had not been involved at this stage, though discussions had been initiated and management staff would be working with the unions as initiatives were rolled out.
Councillor Deans asked about the plan to replace the Chief of Corporate Communications. Mr. Kirkpatrick indicated he and Mr. Kanellakos had been working together on this and that they would be meeting with a recruitment firm to initiate a search to fill the position. Once a candidate had been identified, and as part of preparing for his or her arrival, they would be discussing the department’s structure and what changes could be made to it. He reported having had some broad consultations with the Mayor and members of Council on the department’s strengths and weaknesses and, moving forward, management would be focusing on improving it through a combination of people, processes and technology. He noted that there were some proposals in this budget, which focused on how the City communicated and a big piece of the Service Ottawa initiative also had to do with how the City communicated with the public. Therefore, he confirmed that this would be a major focus going forward in terms of how the department could be improved and in terms of the Service Ottawa program.
Responding to a follow-up question from the Councillor, Mr. Kirkpatrick indicated there were not FTE reductions anticipated in Corporate Communications in 2011. He submitted it was too soon to tell what the outcome of the review might be. However, he undertook to update Committee as the review progressed.
Councillor Deans believed Communications was one area where all members of Council were interested in focusing during the year ahead.
Speaking to the technology initiatives, Councillor McRae asked if management were planning on hiring people from within or who were currently under contract with the City or whether they were planning on going out with an RFP process. Mr. Kanellakos indicated a combination of both methods would be used. He noted that the City had some standing offers with IT companies but that the major initiatives in terms of mobile workforce and client service management software would be part of a procurement process. He advised that staff was currently in the process of evaluating bids received in this regard and would be awarding based on the outcome of the budget.
In response to a follow-up question from the Councillor, Mr. Kanellakos explained that staff had the authority to move forward as part of the 2010 capital work plan and contracts had come in before the end of 2010, which staff was in the process of evaluating. He noted that if Council did not approve future funding, staff would stop the process.
Councillor McRae posed a question with respect to staff resources for enforcing temporary sign permits. Mr. Kanellakos felt this fed into the opportunity currently before Council because currently, there was a lot of staff spending time going out to verify signs and involved in the application process because of the back and forth between the business person wanting a sign and the staff approving and inspecting. He felt this was a great example where work currently being done by by-law officers could be offloaded to someone sitting at a computer with Google Maps the City could have pre-populated the areas where signs were permissible. This would free up by-law enforcement officers to be able to do proper inspections with handheld devices, take and upload photos and do a more comprehensive enforcement because they would have more time to do it.
Councillor Egli referenced the section on “highlights of changes”, noting it talked about an investment of about $800,000 in Communications and Customer Support which would be more than returned. He inquired as to the basis for assuring this return on investment. Mr. Kirkpatrick advised this was the first year of a three-year roll out of this program. He asked Mr. Kanellakos to speak to the end state in terms of what staff believed was the revenue potential and the cost to the investment. Mr. Kanellakos indicated there had been two reviews of this. He explained that when staff brought in IBM to do the business cases for the efficiency opportunities and service improvements, one of the opportunities identified was sponsorship and advertising. They looked at what other jurisdictions were doing in this regard and following this, staff brought in the Colterman Marketing Group to do a detailed analysis of where the opportunities may be and what the practices were in this regard. This gave staff a realistic sense of actual individuals and organizations spending money on advertising and allowed the City to reach out to those stakeholders to see what they were prepared to spend compared to what the City had to offer. Through these processes, over a dozen opportunities were identified and staff was able to validate the IBM business case and effectively come to the conclusion that if an advertising and sponsorship office was created, staffed with three people, the City could generate a steady stream of revenue of between $3.24M to $12.7M annually over the next five years. He added that the total compensation cost would be $230,000 and the other $565,000 would be for commissions, packaging and doing all the other things needed to bring in advertisers.
Councillor Egli asked about the rationale behind the recommendation to eliminate the election contribution rebate program. Mr. Kirkpatrick confirmed this was a proposal for Council’s consideration. He explained that, having looked at the program and at surveys done by other municipalities and as a result, staff had concluded that, in terms of reducing expenditures and rates of return, this was one program Council should consider cutting.
Responding to a follow-up question from the Councillor, he explained that when he talked about the investment, he was referring to the levels of participation in terms of the number of people donating and in terms of the amounts they were donating. He noted that staff did not yet have the results of the 2010 election, therefore the recommendation was based on previous elections and other municipalities.
Councillor Egli submitted that it may be premature to have this proposed cut on the table without the results of the 2010 election. Ms. Leslie Donnelly, Deputy City Clerk, clarified that the rationale for putting this cut on the table related to the fact that the program had never been funded. She explained that it was initially started as a pilot project where staff was to monitor it for several elections to see how it went. She maintained the department did not have the budget for this and budget increases had been cut back, so the rationale for proposing the program’s elimination was simply that it was unfounded and the department needed this money to be contributed every year for four years in order to fund the program. To answer the questions with respect to participation, she advised that in 2010, the level of participation was actually down in terms of the number of participating campaigns. She indicated that in 2006, 64% of campaigns participated (64 out of the 100) whereas in 2010, 55% of campaigns participated (82 out of 150). However, she reiterated the fundamental reason for recommending the cut was that the program had never been funded, therefore it was a large pressure resulting in new programs not being funded.
Councillor Hubley noted that in the presentation, the City Manager had talked about debt service as one example of “non-departmental” expenses. He asked for other examples of things in this category. Ms. Marian Simulik, City Treasurer, indicated staff had increased the debt servicing budget this year to account for two things anticipated in 2011: the second part of the Ottawa Convention Centre project for which the City would be issuing $20M in debt; and the strategic initiative projects approved in 2008, which involved a variety of smaller projects done throughout the community. She advised that the previous Council had approved that these be done through debt financing and she indicated this accounted for an additional $20M for those projects being done in 2011. She noted the remainder of this debt financing would be added in 2012.
Councillor Hubley referenced a slide in the presentation with respect to the budget change summary. He noted it listed $0.9M for growth cost and he wondered if this was offset by the tax levy increase and other charges. Ms. Simulik explained the $0.9M was offset by the $24M in increased taxation the City would have as a result of due assessment. However, staff had identified it separately for each of the Committees and the $24M was actually in non-departmental. Therefore, in order to recognize it as the impact of growth on each of the Committees, staff had singled it out and not netted it off against the increased assessment.
Councillor Hubley talked about the recommendation made by one of the delegation with respect to monthly variance reports. Ms. Simulik indicated staff had addressed this question every year for the past five years. She explained that staff already provided quarterly variance reports, which were presented to each Standing Committee. She noted this report provided explanations as to why projects and programs were either over or under. She added staff also provided forecasts on the year-end position. Speaking specifically to what the delegation was asking for, she advised that the City did not currently have a system to do it and the investment in terms of staff and IT resources was not considered to be warranted because of the existing quarterly reporting system.
Responding to a series of questions from Councillor Clark with respect to the Service Ottawa initiative, Mr. Kanellakos confirmed that $25M was invested last year and with the proposed investments in the coming years, the total investment would be $84.9M. He also confirmed that the return on investment would be cumulative over the coming years, with the total investment being recuperated in six or seven years.
Responding to a follow-up question from the Councillor with respect to the project team and their employment contracts, Mr. Kanellakos explained that there were two aspects to this issue because some members of the project team were on contract and once the project was finalized, they would no longer be employed. However, he added there was also the issue of actual positions within the organization, which would be eliminated as a result of the project.
Councillor Clark felt this was admirable but he looked at the 2011 operating FTE budget and saw that the City was adding 344 more bodies, which seemed to be going in the wrong direction. He recognized that the modernization program was worth doing and clearly had a return on investment. However, he suggested what hadn’t been checked was the growth in FTEs.
Following these exchanges, Committee went through the budget books and approved the various sections as follows:
Public Health – Draft Operating and Capital Budget
CARRIED with Councillor P. Clark dissenting
Finance and Economic Development Committee – Tax Supported Programs – Elected Officials
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Office of the Auditor General
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – City Manager’s Office
Because he often received e-mails and questions on this subject, Councillor Chiarelli asked the City Manager to explain the tasks performed by staff in French Language Services. Mr. Kirkpatrick explained the staff in this area were responsible for work with staff across the City in terms of advancing what the City does and how it does it insofar as the objectives approved by Council as part of the Bilingualism Policy. Therefore, he submitted a lot of their work related to assisting management in reviewing and developing programming with that lens in mind. He added that they also manage the City’s translation operations.
Committee then voted on this section of the Budget.
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Real Estate Partnerships and Development Office
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Financial Services
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – City Clerk & Solicitor
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – City Operations, Deputy City Manager’s Office
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Organizational Development and Performance
Moved by Councillor P. Clark
That the effective date for the user fees listed on pages 86 and 87 of the Organizational Development and Performance Department Budget be amended to read “April 1, 2011”.
CARRIED
Committee then voted on this section of the Budget and approved it, as amended.
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Human Resources
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Information Technology Services
REFERRED
Finance and Economic Development Committee – Tax Supported Programs – Corporate Communications
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Deputy City Manager’s Office Infrastructure Services & Community Sustainability
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Community Sustainability - Economic Development
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Rail Implementation
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Non-Departmental
CARRIED
Finance and Economic Development Committee – Tax Supported Programs – Supplemental Information
RECEIVED
CARRIED, as amended