February 18/04 Report

Present:

Ferguson (chair)
Pearson
Bruckler
Collins
Powers
Braden (on vacation)

Also present:

Media - Chinta Puxley, Ken Mann, Natalie Marcone (CH)

The meeting began at 9:40

There were no delegation requests.

Council approved Consent Items:

1. That the City appoint a maximum of 4 seats (1 councillor, 3 citizen appointees) as opposed to the customary 2 councillors and 4 citizen appointees to the Board of the Royal Botanical Gardens. This is a result of demographic, assessment and financial changes to be expected in 2004. Phil Bruckler was appointed to the Board, and the citizen selections are in progress.
   
   
2. That taxes deemed to be uncollectible, as per the Treasurer's recommendation where the properties in question vest into the Municipality names after an unsuccessful tax sale, be written off. There were 3 properties listed, their tax arrears totalling $5,609.59, plus appicable interest charges.
   
   
3. This on was about authority to negotiate and place a debenture issue. No details given

Public Delegations

Don McLean spoke regarding the 8 City of Hamilton Procedural By-law Proposals he submitted in his letter. He asked that Council and/or the appropriate Standing Committee of Council consider amendments which would improve democratic practices of the City, as well as the rights of council members and the public. Don said that the City Clerk sees merit in the proposals, and he urged the committee to seek a staff report as the next logical step. See Don's presentation.

There were no questions. Powers said these proposals would be referred to the Governance Committee and the Clerk's Office (all were in favour), and he also suggested that they have Don attend when a staff report is submitted.

Staff Presentations

A report was presented ("Reserves and Trust Investment Policies") and Gerry Boychuk spoke.

The City's investment portfolio includes reserves/reserve funds, capital account balances and unused operating funds. These, as well as the Hamilton Future Fund must be invested in accordance with the new Municipal Act. He presented an Investment Policy for approval by Council, as well as sections on Overview and Administration and Approved Investments. (These are quite detailed and will be kept on file).

Hamilton has an "AA" credit rating (as do Ottawa, Toronto, Guelph and Waterloo), allowing for investment in "Asset Backed Securities" and short term "Commercial Paper". FYI - Halton, Durham, Peel and York have an "AAA" rating, while London, Barrie, Quebec City and Montreal are "A".

The revised Investment Policy is similar to the previous policies, but up-to-date with the new regulations and in keeping with practices found in other large Ontario municipalities. The City's goal is to "save wisely", by maintaining various reserves for contingincies and to finance cyclical expenditures, and by maximizing their investment returns on the City's portfolio and trust funds without undue risk.

Rinaldo said that the three main goals are to safeguard assets, diversify and get a greater rate of return. Bruckler asked what the targeted anticipated return would be. Boychuk - 62.5 % on short term bonds and 27.5% on all government bonds, but of course this fluctuates with interest rates. "We're doing O.K for the first quarter". Collins - What happens if our credit rating falls to "A"?
Boychuk - relatively negligible difference Collins - How close are we to losing status? Rinaldo - no indication that our rating will change Boychuk - We've been improving (longer bonds, higher coupons) Collins - What do we anticipate for "03? Rinaldo - increase by $500,000 We don't budget for interest on reserves, but wants to review this Collins - When will we change policy about replenishing reserves? Rinaldo - will come back to council with change .. right now just following past policies...written policies do not exist...return probably better than anticipated Collins - If we're not replenishing our reserves, it's contributing to our overall situation Rinaldo - we distribute interest earned, not capital gains Collins - How do we use extra money from HFF? Rinaldo- any interest stays in the fund, use some $ to help in capital programmes (for loans) Collins - Can we utilize some of that interest? (couldn't follow response)

Committe approved report, moved to have staff submit further report on policies about interest allocation. (Collins, Bruckler)

DISCUSSION ITEMS:

Purchasing Policies

Cathy Wyatt (Purchasing Analyst) outlined past policies
Rich Vail (?) outlined changes.
They were asking for staff input.
(at 10:58, Bruckler took over chair from Ferguson, and Quorum was lost briefly)

Some of the proposed changes were the direct result of the sweeper and credit card issues.
*Specifications are to be reviewed and approved by GM or designate of initating department and Manager of Purchasing.
*Specifications should not hinder the competitive process. Departments will be required to prepare a business case to be approved
by Council to support a specification that will result in a sole source purchase.
*There will be a clear delineation between mandatory and non-mandatory specifications, and a clear outline on how these will be
evaluated.
(there were a number of other Purchasing Policy changes which can be seen in the report kept on file)
*Further restrictions on the use of procurement card
*Limitations on use of procurement cards for entertainment or business contacts
*Responsibility for card coordinators to review all card transactions
*Increased reporting from card administrator and regular review by Purchasing staff

General Discussion:

Powers made the suggestion that when carrying out projects (such as road work on Locke) the City distribute notices of work that will go on and neighbourhood surveys at the same time. That way people will know what they're expected to evaluate as time goes on.

Rich commented that council was not given "heads up" on the sweeper issue, and that purchasing will bring back to council if one firm is lower on price, but not as highly rated in other categories. Collins - supportive of changes..the problems are the issues of budgets, deficits and overspending...no opportunity for Council to become involved in purchase of goods/services...how can we curb spending in certain areas?...How can we revise policy (not to overburden staff), but build in checks and balances re spending?

Rinaldo - curbing spending impacts on services - budget control policy is vehicle to deal with concerns about spending Collins - a certain department's budget was cut by 15%, but they spent double - where did this excess funding go?- we want to get at hidden expenditures Rinaldo - we have to be more diligent, provide council with a plan if expected to go over - the variance report should make recommendations, have a corrective action plan Collins - the system is not working - no consulting issues are coming to council, there's no opportunity to reduce numbers, or give direction to staff. Rinaldo - We need to provide more reporting in advance of approvals- we're taking notes - we'll try to do this Collins - maybe we need to lower the bar from 100 thousand to 20 thousand (when a tender or rfp award should come to council) Rich - we need to provide a more detailed list of goods and services to council
Collins - a good starting point - I'm also concerned about the delegation of authority in decision-making - how low are we going when we say GM, CEO or designate?

Procurement Cards

Collins - used by director, GM, supervisor and sometimes front line - the intent was that they could be used for emergencies, but it has gravitated from original intent - 600 cards should/could be reduced to? Rich - We'd only lower this by about 100 or 200 cards Collins - good start - who's in charge? Rinaldo - Finances and Accounting group reviews use of cards for improprieties - should we limit types of expenses? - we plan to review all discretionary uses Rick - we processed 6,000 transactions Ferguson - P cards allow for greater efficiency Pearson - Is there a cost associated? Rick - cost for use, but offset by rebates Collins - any changes in the roster of consultants? Rick - it's been working well Collins - the external auditor's report said staff did not always follow purchasing policies - were these areas of concern? Rick - that was actually based on the internal auditor's report - you'll get a report on this review - the process allowing vendors equal opportunity to get city business is working out well Collins - how about from a budget standpoint? - we've had problems with People Software - can we train staff better? Bruckler - re mandatory, non mandatory specifications - is there language for performance criteria, and standards? Rick - we have done reference checks with ciy and other firms - we need more stringent policies, to work with the legal department Pearson - When a company does not perform well, what is the parameter for them bidding another year (has had a complaint) Rich - we need to be notified immediately
(DiIanni arrived - 12:06)

Committee moved to table Staff Parking Issue. Ferguson asked Bruckler to take chair.

8.1 Ward Budgets

Staff report sets out detailed rules on what councillors can bill city for and how much is allocated to each ward councillor to cover their staff, office and other costs. New rule that any costs over budget will NOT be paid by city.

8.2 Propery and Liability Insurance Coverage

Increase of 13% because council failed to deal with this in advance of Jan. 1, and insurance reserves almost depleted. Staff is recommending changes to the 2004 policies (see report for details). Under Option 4 - Rolling Stock they want to convert from replacement cost basis to actual cash value basis, and reduce deductible from $100,000 to 50,000, at a premium savings of $35,830. Powers asked for a spread sheet so that they could see other options within Option 4. Rinaldo - we'll bring that to the next meeting (for 3 - 4 hours all buses are in the storage sheds and this is a problem in case of a fire or similar catastrophe) - can we rotate stock to minimize risk? They approved Options 1 through 3, want to have a risk management report attached to 4.

8.3 Lease Financing Policy

Have to identify true costs for new facility leases Pearson - when will you do a list of all leases? - can we expect it ahead of budget deliberations? Bruckler - are current leases exempt from act?

Presentation to the Standing Committee on Corporate Administration
Wednesday, February 18, 2004
by Don McLean

Mr. Chairman and councillors, I would like you to consider several amendments to the City’s Procedural By-Law in the interests of improving the rights of both members of council and the public. I’d like to thank the clerk for making copies of the relevant sections of the by-law available to you this morning to assist you in considering my suggestions.

I was inspired to make these suggestions when Council recently advertised amendments to the bylaw. Subsequently I spoke to Mr. Christenson and was directed to this committee. I understand that the clerk sees some merit in these suggestions and I would urge you to seek a staff report on these matters to provide you with more specific recommendations for action.

You have a letter in front of you outlining my suggestions. I will try to briefly summarize the points.

1. The current by-law sets a quorum of 4 at all standing committees. This appears to have assumed that standing committees would have six members plus the mayor, which I believe was the original intention. However, three of the standing committees actually have seven or eight members, plus the mayor. Four is not an appropriate quorum for a committee with 8 or 9 members. I suggest that quorum for these committees should be a simple majority of the members (50% plus 1). That would mean a quorum of 5 for the three affected committees, and a quorum of 6 should a committee be expanded to nine members plus the mayor. This aligns with the rules that apply to council and committee of the whole.
   
   
2. The by-law addresses special meetings but doesn’t require that the agendas of these meetings be provided in advance to either members of the public or event to councillors. I suggest the rules that apply to regular committee meetings should also apply to special meetings.
   
   
3. Four standing committees, including this one, hold their meetings at least seven days prior to presenting their reports to Council. This is in line with the practice followed prior to amalgamation in both Hamilton and the Region. However, in the current schedule, two committees meet the day before council, so their decisions are finalized with almost no opportunity for either other councillors or members of the public to evaluate their decisions, or make representations to councillors, or to obtain information from City staff about these decisions and their implications. I suggest the bylaw require that there be at least five working days between the committee decisions and their finalization at council. Some provision for special exceptions may be necessary, but shorter periods should be the exception and not the rule.
   
   
4. A provision needs to be added requiring some form of public notice of special meetings of City Council and of changes to meeting schedules. This could take the form of an email notice to any citizen who has requested such notices. I understand this is already done for members of the media.
   
   
5. I’m also suggesting that the bylaw current prohibition against delegations to council unnecessarily handcuffs both councillors and citizens. I believe such a rule is unusual in municipal councils. While it may not be reasonable to open all meetings of City Council to delegations, it should be at least possible to do so for specific matters. Otherwise citizens are restricted to speaking formally to only that portion of the councillors who are members of and in attendance at a specific Standing Committee. Examples of situations where it may be beneficial and appropriate for delegations to speak to Council include the annual budget, and major matters of policy such as the privatization of public services. The recent utilization of a special Committee of the Whole meeting has been helpful in addressing some of my concerns in this regard.
   
   
6. I am concerned about the very frequent practice of amending the agendas of the Standing Committees on the day of their meetings. I have attended most of the standing committee meetings held this year and noticed that the agendas were amended in nearly every one. This practice effectively negates the intent of the notice provisions in the current By-Law. I would suggest that the By-Law be amended to overcome this practice or at least to limit it to special circumstances defined in advance in the By-Law.

In point 7 I’m merely pointing out that the current by-law is likely in contravention of the Municipal Act. I’m sure this wasn’t intentional, but I believe that meetings of council and its committees should be held in the City Hall as much as possible. Having endured the sound situation in Room 110, I’d support a rule that says all meetings have to be here in council chambers, although I realize that isn’t always possible.

Finally, I’ve noticed a good deal of variation in the practices of the chairs of standing committees. This is the first meeting of Corporate Administration that I’ve attended so I’m not referring to either Councillor Ferguson or Councillor Braden. My particular concern is that the chair refrain from entering into debate on matters before the committee without first stepping down temporarily from the position of Chair. Councillor Collins seems to set a particularly good example.

I believe these are serious matters affecting the procedural operations of Hamilton City Council and I would urge that they be given serious consideration. As I mentioned at the beginning of the presentation, I believe the next logical step is the preparation of a staff report on these matters.

Thank you for considering my suggestions.