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2009/12/14~, . 1) Approval of the November 30, 2009 Corporate Services Minutes. 2) REPORTS: STAFF CONTACT: a) AODA Training for Councillors Dean lo~da b) F-2009-59 2010 Debenture Issue Todd Harrison c) F-2009-61 Approval of Interim 2010 Spending Limits Todd Harrison d) CPS-2009-12 Generallnsurance Program 2010 ` Ken Burden This will be a handout report' 3) NEW BUSINESS: SEVENTEENTH MEETING Monday, December 74, 2009 t) Approval of the November 30, 2009 Community Services Minutes. 2) REPORTS: STAFF CONTACT: a) MW-2009-86 Niagara Falls Armoury Ed Dujlovic b) PRC-2009-36 Revised Arena Payment and Cancellation Policy Denyse Morrissey c) PRG2009-35 Gale Centre Arena Construction Update Denyse Morrissey d) BDD-2009-05 2010 Pan American Games Serge Felicetti e) TS-2009-52 Vehicle Replacement, Niagara Chair-a-Van Karl Dren f) PD-2009-99 - CB&FIG-2009-013, CB&FIG-2009-014 and CB&FIG-2009-015 4532-4534 Queen Street, 4544 Queen Street & 4536 Queen Street Applicant: Argiri Rigas Alex Herlovitch g) PD-2009-101 CB&FIG-2009-016, Commercial Building & Facade Improvement Grant Application Applicant: 1 D49474 Ontario Inc. (Anthony Kreze) 4529-4531 Queen Street Alex Herlovitch 3) NEW BUSINESS: a) Resolution to go into Closed Meeting. TWELFTH MEETING Monday, December 14, 2009 5:00 p.m. City Hall, Committee Room #2A & B r MINUTES OF CORPORATE SERVICES COMMITTEE Eleventh Meeting Monday, November 30, 2009, Committee Room 2, 5:45 P. M. PRESENT: Councillor Victor Pietrangelo, Chair; Mayor Ted Salci, Councillors Jim Diodati, Shirley Fisher, Vince Kerrio, Bart Maves, Wayne Thomson, Janice Wing and Garolynn loannoni. STAFF: Ken Todd, Ken Burden, Geoff Holman, Dean lorfida, Ken. Beaman, Serge Felicetti, Trent Dark, Steve Norris, Alex Herlovitch, Karl Dren, Lee Smith and Steno -Marianne Tikky. PRESS: Corey Larocque, Niagara Falls Review, Niagara This Week. Gareth Vieira, Niagara This Week. 1) MINUTES MOVED by Councillor Kerrio seconded by Councillor Maves that the minutes of the November 16, 2009 meeting be approved. Motion: Carried Action: Recommendation submitted to Council November 30; 2009. 2) REPORTS: a) IS-2009-02 Phone System VoIP Upgrade at Service Centre MOVED by Councillor Fisher and seconded by Mayor Salci; 1. That the quotations for the purchase of a Voice over IP(VoIP) phone system be awarded to Telus Communications Company in the amount of $30,585.91 and, 2. That staff be authorized to sign the necessary Purchase Order and related documents associated with these purchases. Motion: Carried Action: Recommendation submitted to Council November 30, 2009. b) F-2009-50 2008 Municipal Performance Measures MOVED by Councillor Kerrio and seconded by Mayor Salci; .. -2- 1. That this report be received for the information of City Council. 2. That staff post the information on the City's website. Motion: Carried Action: Recommendation submitted to Council November 30, 2009. c) F-2009-58 Third Quarter Review Capital Budget Report MOVED by Councillor Thomson and seconded by Councillor loannoni that this report be received for the information of City Council. Motion: Carried Action: Recommendation submitted to Council November 30, 2009. d) FS-2009-10 Fire Communications Dispatch Centre Renovations and Infrastructure Requirements MOVED by Councillor loannoni and seconded by Councillor Fisher; 1. That Council approve the expenditure of up to $500,000 forthe replacement of the Fire Communications Dispatch Centre and the infrastructure work required forthe implementation of the radio system. 2. That Council authorize the use of sole source proponents, if appropriate, in accordance with present. Corporate policy 3. That the Mayor and Clerk be authorized to execute all related agreements. Motion: Carried Action: Recommendation submitted to Council November 30, 2009. 4) ADJOURNMENT: MOVED by Mayor Salci, seconded by Councillor loannoni that Council enter into an In-Camera Session and that on the item under 239(2)(d) of the MunicipalActthat the Clerk, Dean lorfida, delegates his authority forthe purposed of the Closed Meeting to the Director of HR, Trent Dark, the Director of Human Resources, who will record without note or comment all recommendations to Council emanating from the Closed Meeting; and that the Corporate Services meeting be adjourned at 6:00 p.m. Conflict: Councillors loannoni and Wing with report HR-2009-07 ., Corporate Services Department -_ Clerk's Division Inter-Department Memorandum Niagara,Falls cnnnun TO: Councillor Victor Pietrangelo, Chair DATE: December 14, 2009 & Members of the Corporate Services Committee FROM: Dean Iorfida City Clerk Ext. 4271 RE: Accessibility for Ontarians with Disability Act (AODA) Training On October 19`", Council approved the attached report and policy related to the Customer Service Standard of the AODA. The standard requires training of every person who deals with the public or other third parties on behalf of your organization and every person who participates in developing your organization's policies, practices and procedures on providing goods or services. [s. 6(1) of the Act] As a result, Council members also are subject to the AODA Customer Service standard training. A brief presentation will be done in Corporate Services by Mr. Brian Kon. Brian is a member of the City's Disability Advisory Committee. He has consulted on barrier free design, privately, and with the Ontario March of Dimes. Brian has voluntarily done audits of City facilities including the MacBain Centre. He is training all front line staff on the AODA customer service standard. ~,~J~`^ Working Together to Serve Our Community Clerks Finance Human Resources Information Systems Legal Planning & Development 1~ ~[1 The City of Niagara Falls is committed to providing excellent customer service to all residents and visitors, and treating everyone with dignity and respect. To do this, we must recognize the diverse needs of all of our residents, including the needs of individuals with disabilities. The Accessibility for Ontarians with Disability Act, 2005 (AODA) requires that all public and private sector organizations in Ontario identify, remove and prevent barriers to accessible customer service. It also outlines a number of requirements the City of Niagara Falls must follow, including providing notification of temporary service disruptions. Additionally, it also states that all staff, Council Members, volunteers, third party contractors, board and advisory committee members must be trained on how to provide accessible customer service. This guide will give you tips on howto best interact with a person with a disability so that you can provide excellent customer service. Accessible Customer Service is about providing service to citizens, customers and clients with disabilities in a manner that: • Respects their dignity and independence. • Is integrated as fully as possible into the method of service delivery. • Ensures that equal opportunity is given to all customers to obtain, use, and benefit from our goods and services. Mobility • Don't touch assistive devices, including wheelchairs, unnecessarily unless it's an emergenry. • Remove obstacles and rearrange furniture to ensure clear passage. Hearing • If necessary, ask if another method of communicating would be easier, for example, using a pen and paper. • Don't put your hands in front of your face when speaking • If the person uses a hearing aid, try to speak in an area with few competing sounds. • Speak directly to your customer, not his or her interpretor. Vision • Identify yourself when you approach your customer and do not walk away without saying good-bye. • If you are giving directions or verbal information, be precise and clear. For example, if you are approaching a door or an obstacle, say so. • Offer your arm (the elbow) to guide the person and walk slowly. • Do not touch or address service animals-they are working and have to pay attention at all times. Speech or Language • Do not assume the customer has an intellectual or developmental disability if they have difficulty speaking. If you are able, ask questions that can be answered with a'yes' or `no' response. • Do not interrupt or finish your customer's sentences. • Wait for them to finish. Mental Health • You may not necessarily know your customer his a mental health disability unless you are informed. • Create a safe environment. Be calm and professional, and ask your customer to tell you the best way you can be of assistance. Learning • A learning disability may interfere with your customer's ability to receive, express or process information. • Therefore, take some time and be patient with your customer. Individuals who experience learning disabilities may take a little longer to understand and respond. • If you are dealing with a child, be patient, encouraging and supportive. I) Review the City of Niagara Falls Accessible Customer Service Standard Compliance Policy on the City's website or employee Intranet system. 2) Speak with your supervisor or manager. 3) Review the resources found on the Access On website: www.accesson.ca 4) Use assistive services such as a TTY and Bell Relay Service, or book a sign language interpreter. 5) Review any additional Resources found on the Mayors Disability Advisory Committee section of the City website - www.niagarafalls.ca. 6) Contact the Mayor's Disability Advisory Committee at: 4310 Queen Street Niagara Falls, ON, L2E 6X5 Phone: 905-356-7521 (ext) 4294 or (ext) 4271 Email: accessibility@niagarafalls.ca 1 have read and understood the City's Accessible Customer Service training brochure. Name: Date: Signature ,r~- Niagaraf galls cD-2oae-13 October 19, 2009 REPORT TO: Councillor Victor Pietrangelo, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario SUBMITTED BY: Clerks/ Human Resources SUBJECT: CD-2009-13, Customer Services Standard Policy RECOMMENDATION That Council adopt the Customer Services Standard, Policy in compliance with the Accessibility for Ontarians with Disabilities Act, 2005. EXECUTIVE SUMMARY The Accessibr/ity forOntarians with Disabi%rties Act aims, by 2025, to eliminate all barriers facing persons with disabilities. To accomplish this goal, standards in five areas are being developed. The first standard that has been proclaimed, through regulation, as the customer service standard, which requires municipalities to develop appropriate policies and train staff by January 1, 2010. Staff has prepared a policy far Council's censideration and staff training will take place during the month of November. The policy recognizes practices that the Corporation has already informally been doing over the years. BACKGROUND In 2005, the Provincial government enacted theAccessibilityforOnfarians with Disabilities Act, 2045 (the "AODA"). The AODA followed 2001's Ontarians with Disabilities Act. The introduction of the legislation was seen as a way to catch up with strides in other countries and jurisdictions (see for example the Americans with Disabilities Act). The AODA is intended to ensure that all Ontarians with disabilities have full and equal access to goods, services, facilities, accommodation, employment, buildings, structures and premises by January 1, 2025. In order to meet the goal, the Province has proposed standards in five areas: Customer Service, Transportation, Information and Communications, Built Environment and Employment. The first standard to be proclaimed, through a regulation to the AODA, is the customer service standard. The public sector has to be in compliance by January 9, 2016. Compliance with the standard requires that a policy be established far such matters as use of service animals and support persons and notice of temporary disruptions, training of staff occurs and a feedback mechanism is put in place. Octohe~ 19, 2009 •2 - CD 2009-13 ANALYSIS/RATIONALE Staff involved with the Mayor's DisabilityAdvisoryCommlttee has attended sessions on the Customer Service standard and has liaised with other municipalities in developing a proposed policy. Some of the requirements of the standard are things this municipality has already been doing, although not necessarily in a formal manner. _ Through the Mayor's Disability Advisory Committee, the municipality has advocated recognition of service dogs for ail disabilities, a wheelchair is available to the public, at both the MacBain Community Centre and City Hall, notice was given of a seivice disruption when City Hall's elevator was being replaced and voluntary sensitivity training has taken place in conjunction with National Access Awareness Week. Staff has formalized these practices in the attached proposed policy., In addition, staff training will be faking place during the month of November. Depending on the staff membePs level of Interaction with the general public, they will receive either atwo-hour session with a trainer, who specializes in accessibility issues or a computer tutorial developed by the Regional Municipality of Niagara. Staff will also investigate making the policy available in alternate forrnats. A feedback mechanism will be encouraged primarily through the website but other forms of feedback will certainly be accepted. FINANCIAL/3TAFFING/LEGAL IMPLICATIONS Municipalities are required to establish a policy for such matters as use of service animals and support persons and notice of temporary disruptions. Staff dealing with the public requires training on dealing with individuals with disabilities and a feedback process, for providers of goods or services, has to be in place. For the public sector these requirements are mandated for 2010. Enforcement of the standard will be through a process of reporting to the Province. The legis lotion does contemplate possible inspec#ian, investigation, compliance orders and administrative penalties. The 2009 Operating Budget does have budgeted monies to cover the customer service training costs for all staff. The type of training proposed wll! be a good complement to other customer service initiatives. While all the legislative standards being developed through AODA, appear to be commendable and necessaryto ensure the accessibility ofgoods end services, withoutthe necessary provincial government funding, the Cky and could face significant budget and resource challenges in implementing the proposed standards. At the moment, there is no provincial funding to support the implementation of this legislation. Once the remaining standards are passed into law, the actual costs of compliance of AODA will need to be reassessed. • • ` Octot~er 19, 2608 - 3 - CD-2009-13 CITY'S STRATEGIC COMMITMENT Arguably, greater accessibility would fall under Council's strategic priority to monitor and improve the efficiency of the organization. The development and implementation of accessibility and customer service standards will demonstrafe Council's ongoing commitment to make the City of Niagara Falls a better place to live, work, and play. The Corporation has been committed to accessibility issues. The City's DlsabilityAdvisory Committee predated the requirement of such a committee under. the Onfarfans with Disabilities Act by six years. In 2006, Council supported a staff recommendation to adopt the Region's Facility Accessibility Design Standards {FADS) as a guide for the developmentoffuturemunicipalfacilities. Staffwillcontinuetomonitortheotherproposed standards and provide input from a municipal perspective. LIST OF ATTACHMENTS Proposed Customer Service Standard Policy and briefing note. Standards under the AODA - Resolution 2004-08 re: service dogs Recommended by: ~`'" De n lorfida, CSI rk .J-/ Recommended by: Trent hector of Human Resources r Approved by: K. E. Burden, Executive Director, Corporate Services Respectfully submitted: . Ken T dd, Chief Administrative Officer DIlI'D Date Effected Accessible Corporate Services January 2010 Customer Service Standard Compliance Policy Human Resources Last Revised Supgort Services & Training Requirements SECTION 400.41 PURPOSE: The Corporation of the City of Niagara Falls is committed to being responsive to the diverse needs of all its residents by striving to provide equal° access to its programs, services and facilities, including people with disabilities. RATIONALE: The Corporation of the City of Niagara Falls will develop policies, procedures and practices which address integration, independence, dignity and equal opportunity, to comply with the legislative requirements prescribed under the Accessibility for On#arians with Disabilities Act (AODA}, and topromoteaccessibility. The policyisacomplementtotheCorporation'sexistingCustomerService policy (400.30}. SCOPE: This policy applies to the Council and staff of the Corporation ofthe City of Niagara Falls, including volunteers, contractors, agents and any other people who interact with the public or other third parties, on behalf of the City. ASSISTIVE DEVICES: If a person with a disability requires assistive devices to access goods or services from the City, they are allowed to use such devices. The City does provide assistive devices at some of its facilities (ie. Wheelchairs). GUIDE DOGS; SERVICE ANIMALS: Service dogs can assist adults and children who are visually impaired, have autism, spina bifida, cerebral palsy, epilepsy, mobility related disabilities, hearing problems and seizure disorders, amongst other disabilities. If a person with a disability is accompanied by a guide dog or other service animal, the City will permit the person to enter the premises with the animal and keeg it with him or her, unless the animal is otherwise excluded by ]aw from the premises. If the service animal or guide dog is excluded by law from the premises, the City will look to other available measures to enable the person wish a disability to obtain, use or benefit from the City's goods and services. SUPPORT PERSONS: If a person with a disability is accompanied by a support person, they are permitted to enter the premises together and are not prevented from having access to each other while on the premises. Tho City may require a person with a disability tc be accompanied by a support person while on its premises, but only if a support person is necessary to protect the health or safety of the person with a disability or the health or safety of others on the premises. Where fees forgoods and services are advertised or promoted by the City, it will provide advance notice of the amount payable, if any, in respect of the support person. Date Effected Accesai6le Corporate Services January 2010 Customer Service Standard ' Compliance Policy Human Resources Last Revised Support Services & , Training Requirements SECTION 406.41 DISRUPTION OF SERVICES: If there is a disruption in a particular facllity or service used to allow a person with a disability to access goods or services, the City will give notice of fhe disruption to the public by posting the reason for the disruption. Further, the City will provide notice on the anticipated duration of the disruption and, notify if any alternative facilities or services may be available. This posting will be in a conspicuous place on the premises ofthe affected City building, orby other reasonable methods in the circumstances. If the disruption is anticipated, the City will provide a reasonable amount of advance notice of the disruption and provide notice in a local newspaper. If the disruption is unexpected, notice will be provided as soon as possible. TRAINING: The City will provide training about the provision of its goods and services to persons with disabilities. All City employees, volunteers, agents, contractors and others who deal with the public or other third parties, and those involved in developing customer service policies, practices, and procedures, will receive Accessibility Awareness Training within six months of beginning their duties. The City will also provide ongoing training with respect to changes in its policies, practices, and procedures to those individuals who require such training as soon as practicable, Lastly, the City -will keep records of all stafl'who have received training (ie. dates, trainer etc). Accessibility Awareness Training will include the following: (a) How to provide goods and services in a manner that respects the dignity and independence of persons with disabilities; (b} How to interact and communicate with persons in a manner that takes into account their disabilities; (c) The process for people to provide feedback to the City, its provision of goods and services to persons with disabilities, and how the City responds to the feedback and takes action on any complaint; (d} How to interact wish persons with disabilities who use an assistive device or require the assistance of a guide dog, service animal or a support person to access goods and services; (e) Information on other Municipal policies, practices, and procedures dealing with the AODA; (f) A review of the purposes of the AODA and the requirements of the customer service standard. (g} How to use equipment or devices available on City premises or provided by the City that may help with the provision of goods and services; (h} What to do if a person with a disability is having difficulty accessing the City's goods and services. Date Effected Accessible Corporate Servfces January 201fl Customer Service Standard Compliance Policy Human Resources Last Revised Support Services & Training Requirements SECTION 40fl.41 FEEDBACK PROCESS; The public can provide feedback on the accessibility of the provision of goods and services by the Corporation of the City of Niagara Falls through the Mayor's Disability Advisory. Committee: (a) by mail addressed to: 4310 Queen Street, Niagara Falls, ON, L2E 6X5 c/o the Mayor's Disability Advisory Committee (b) by phone to: 905 356-7521 ext. 4294, 4271 or 4202 (c) in person at:' 4310 Queen Street, Niagara Falls, ON, L2E 6XS (d) by email to: accessibilityna.niagarafalls.ca Feedback will be responded to within three business days of its receipt by the City. `~ Assistive Devtces Auxiliary aids such as wmmunication aids, cognitiotr aids; personal mobility aids and medical aids (i.e. canes, crutches, wheelchairs, or hearing aids). Disabilities Asper the Ontario Human Rights Code, disability means: a). any degree of physical disability, infirmity, malformation or disfigurement that is caused by bodily injury, birth defect or illness and, without limiting the generality of the foregoing, includes diabetes mellitus, epilepsy, a brain injury, any degree of paralysis, amputation, lack ofphysical coordination, blindness or visual impediment, deafness or hearing impediment, muteness or speech impediment, or physical reliance on a guide dog or other animal or on a wheelchair or other iemedial appliance or device; b) a condition of mental impairment or a developmental disability; c) a learning disability or a dysfunction in one or more of the processes involved in understanding or using symbols or spoken language; d) a mental disorder; or; e} an injury or disability for which benefits were claimed or received under the insurance plan established under the Workplace Safety and Insurance Act, 1997. ("handicap"} Date Effected Accessible Corporate Services January 2010 Customer Service Standard Compliance Policy Human Resources Last Revised Support Services 8z Training Requirements SECTIQN 400.41 Employees Every person who deals with members of the public or other third parties on behalf of the Corporation of the City of Niagara Falls, whether the person does so as an employee, agent, volunteer or otherwise. Persons with Disabilities Individuals who are afflicted with a disability as defined under the Ontario.Human Rights Code. Service Animals Any animal individually trained to do work or perform tasks for the benefit of a person with a disability. . Support Persons Any person whether a paid professional, volunteer, family member, or friend who accompanies a person with a disability in order to help with communications, personal care or medical needs, or with access to goods or services. .. - 1 ' Accessibility for Ontarians Disability Act (AODA}, 2045 What is the AOAA? Recognizing the History of discrimination against pelsons witir disabilities in Ontario, the purpose ofthis Act is to benefit all Ontarians by, (a) developing, implementing and enforcing accessibility standards in orderto achieve accessibility for Ontarians with disabilities with respect to goods, services, facilities, accommodation, employment, buildings, structures and premises on or before January 1, 2025; and (b) providing for the involvement of persons with disabilities, of the Government of Ontario and of representatives of industries and of various sectors of the economy in the development of the accessibility standards, ACCESSIBILITY STANDARAS: There are 5 new Accessibility Standards developed under the AODA. The Customer Service Standard is the first standard developed under the AODA and has a Public Sector compliance date of January 1, 2010. Other proposed standards being developed under the AODA include the folloviing: - Transportation Standard -Information & Communications Standard -Employment Standard -Built Environment Standard - Customer Service Standard {Effective date of Jan 1, 2010) Like the.customer service standard, the other proposed standards are being developed by standards development committees. The committees are made up of people with disabilities or their representatives, representatives ofthe business community,the brnaderpublic sectorand theOntarie government. Standard Under the Ac cessibility for Ontarians w ith Disabilities Act, 2DD5 ~. ~.:r~. Customer Service Ontario's first accessibility Establishment of policies, standard, the customer practices and procedures service standard, came into effect on January 1, 2608. 'l'he standard states what Use of service animals and businesses and other support persons _.organizations in Ontario must do to make the provision of Notice of temporary their goods and services more disruptions accessible to people with disabilities. The legal requirements of the Training for staff accessibility standards for customer service are set out Feedback process for in two Ontario Regulations providers of goods or under the ,tlecgssibility for services Ontarians with Disabilities Act. 2005 Ontario Regulation 429/07 Notice of availability of states the requirements of the documents customer service standard, and Ontario Regulation 436/67 exempts organizations that have feaver than 20 employees (unless the organization is a designated public sector organization} from certain documentation requirements of the standard. -_~iS Niagara,FaIls r-zuuy-5a December 14, 2009 REPORT TO: Councillor Victor Pietrangelo, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario SUBMITTED BY: Finance SUBJECT: F-2009-59 2010 Debenture Issue RECOMMENDATION That the Council request the Region of Niagara issue long term financing for the City through Infrastructure Ontario by issuing debentures totalling $12,000,000.00. EXECUTIVE SUMMARY The City of Niagara Falls has completed two capital projects known as Grassy Brook and Garner Southwest. These projects are development related and these investments were required before further developmentofthis area could be undertaken. The projects require funding to close the projects and as a result, staff must borrow the unfunded balances for each totalling approximately $12 million. All interest expenses incurred during the interim funding of the project has been included in the cost of borrowing. The annual payment, including interest and principal, required to meet the obligations of the payment of the debenture will be derived from the collection of future development charges. BACKGROUND The City, as a lower tier municipality, cannot issue its own debentures but rather requests the Region of Niagara to issue the debt on behalf of the City. Staff of the Region of Niagara have agreed to work with Infrastructure Ontario to prepare a debt issue for early 2010 for the City of Niagara Falls. FINANCIAL/STAFFINGlLEGAL IMPLICATIONS The capital works projects have been completed and require funding to close. These projects were multi-year commitments that were planned and started earlier in the decade. These projects were required to allow development in these areas and were subject to many staff reports. In the staff reports, the funding source has been consistently identified as development charges. The project costs escalated through the construction phase compared to the original estimates. Staff recognize in the preparation of the 2008 Capital Budget that the existing development charges reserves would be inadequate to fully fund the project at completion. Staff identified that debenture funding may be required at completion. Further, in report CPS-2008-06 a chronology of events outlining the progression of the project was provided. In April 2009, Council received F-2009-23 wherein Council approved the issuance of debt and the inclusion of the applicable payment in the Development Charges Study. Based on this report staff included the annual charge for this debenture in the rates established in the 2009 Development Charges Study. December 14, 2D09 - 2 - F-2oU'J-59 Consequently, the interest and principal portion of the annual debenture payment is expected to be collected through future development charges. In the event that annual collections from development charges are inadequate in a year, the shortfall will be included in the provision of future development charges. Thus, the full cost of this project both during construction and during the debenture repayment will be funded from development charges. This debenture is required immediately and cannot be delayed as the funds are required to replenish the cash holdings of the Corporation. Any delays will lead to short term borrowing which will be expended in the General Purposes Budget, thereby impacting property owners. LIST OF ATTACHMENTS Report CPS-2008-06 Garner Southwest and Grassybrook Sanitary Service Area Report F-2009-23 Project Funding-Final Garner Southwest and Grassybrook Sanitary Service Areas ~~ Recommended by: Todd Ha ison, Dir for of Financial Services Approved by: ~~~~~4~'e`"~ K. E. Burden, Executive Director, Corporate Services Respectfully submitted: Ken odd, Chief Administrative Officer TH/Iw June 9,2008 Councillor Victor Pietrangelo, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario Members Re: GPS-2008-06 Garner Southwest and Grassy Brook Sanitary Service Areas RECOMMENDATION: cPS-zoos-os The recommendation(sj contained in this report were adopted by City Council Thatthe interim funding of the Garner Southwest and Grassy Brook Sanitary Service Areas projects continue from reserve funds until development charge revenues have been received for these projects BACKGROUND: Questions Raised by Council on April 28, 2008 Under new business, at the April 28, 2008 Council meeting, questions were raised by Councillors regarding the two development projects located in the Garner south area The questions focused on staff's use of interim funding, development charge funding and the possible use of debenture funding for the projects. Council directed staff to bring back a report on the facts of the financing of the Garner Southwest and Grassy Brook Sanitary Service Areas projects History of Reports to Council Staff has prepared a chart of the reports relating to the Garner Southwest and Grassy Brook Sanitary Service Areas projects (attached). These reports show the date, report number, title, recommendation, contract amount and cumulative total for each project. All of the reports state that the funding for the projects would be received through Development Charges Working Together to Serve Our Community I Corporate Services Department June 9, 2008 - 2 - CPS-2008-06 Explanation of Process for Interim Funding of Capital Projects The decision making authority of the Treasurer for the payment of accounts is found in the Municipal Act under Section 286 This section explains the main duties of the Treasurer The Treasurer manages the cash flow of the municipality and makes the best possible use of the available sources of cash for the paymenf of accounts, including capital projects The Treasurer has the responsibility to report to Council on the financial payments of the Municipality In addition, the Treasurer provides annual reports an Capital Projects, Reserve Funds, Financial Leases, and Long Term Debentures Fora general description ofthe City's cash flows, please see the diagram (attached} entitled Cash Fiow. This diagram shows the inflows of cash, the availability of cash in the City's bank account or from short term borrowing, and the out flows of cash It is important to note that the use of short term borrowing only occurs, as needed Each year the Treasurer brings forward the annual Borrowing By-law. This By-taw provides for a source of short term borrowing, from the City's financial institution, if there were insufficient cash for operating expenditures, i e , if the budget has not been approved or taxes have not been receroed The Borrowing By-law authority is found in Section 407 of the Municipal Act Section 405 of the Municipal Act allows the municipality to borrow in the short term for specific Capital Works Capital Works, referred to in this section, are large capital projects, whose required funding will be in the form of long term debt. This section requires Regional approval of the required long term debt before approving an S 405 Short Term Borrowing BY-law. For example, the Region has approved the $29 5 million in long term debenture funding for the Bob Gale Complex. This project has already expended $4.8 million which the Treasurer has paid by using internal sources of cash The Treasurer has presented an S 405 Short Term Borrowing By-law for specific capital works, namely the construction of the four-pad arena complex. The By-law will provide sufficient short term borrowing, from the City's financial institution, for this specific capital project Legality of the Interim Borrowing By-law Council directed staff to prepare a report on the legality of the Interim Borrowing By-law and that the Ministry of Municipal Affairs and Housing be contacted. The City Solicitor is preparing this report (L-2008-15} Explanation of the Projects Inclusion in the 2004 Development Charges Background Study The Development Charges Background Study was prepared in 2003/2004 At that time, fhe Manager of Development was asked to prepare a list of development projects that may be constructed within the subsequent2004-2014 ten-year planning period to accommodate growth Considerable interest had been received from the Grand Niagara Resortdevelopers in the Grassy Brook west area. There was a desire to extend sewers to facilitate their project which included the golf course, hotel and conference centre, timescale and condominium units The extension of sewers would require a pumping station and other ,,uiie y, cuvo -3 - CPS-2008-06 related infrastructure. Relying on knowledge ofthe Northwest Sanitary Sewer ServiceArea, the cost was estimated at $1.5 million for each of the Garner Southwest and Grassy Brook service areas, for a total of $3 million We now know these costs have escalated to $15 9 million When the 2004 Development Charges Study estimates were determined, it was based on the best information available at the time about the Garner South Service Area The City contracted Philip's Engineering Ltd , in August 2004, to complete a Municipal Class EnvironmentalAssessmentandto determine howbesttoservicethisarea The consultant advised that the deep sewer construction in tight c{ay soils would add significant costs Other issues that were not known previously included impacts from a high water table, having to directionally drill across a water course and the Welland River, and that the Region had implemented a new design criteria for pumping stations The consultants work (Associated Engineering (Ont.) Ltd. -Garner Southwest, Philips Engineering Limited -Grassy Brook) addressed significant issues due to the expansion of the sewer services. • the Ministry of the Environment's order to Grand Niagara Resort permitting a temporary holding tank, • the substandard private sewage system at E S. Fox, • the expansion of Minacs that was limited by the Regional Health Unit • the unavailable services for the Montrose Business Park, and • a holding zone to be placed on the Heartland Forest Project. Funding Plan for the Projects The reports for the Garner Southwest and Grassy Brook Sanitary Service Areas projects state that the funding would come from Development Charges These projects have already expended $11.2 million which the Treasurer has paid by using the City's reserve funds, as an interim source of funds. Also, the Treasurer is using Development Charge revenues to payback the interim use of the reserve funds To-date, $1.1 million has been paid back. No debenturing has been used for these projects Staff did not become aware of the fact that the Development Charges fund would be insufficientto fund all Development Charge-eligible projects upon completion, until the Fall of 2007. At that time, debenturing was considered, as an option, and referenced in the Capital Budget detail sheets for the most expensive projects, as opposed to a number of smaller projects Explanation for including the Garner Southwest and Grassy Brook Sanitary Service Areas Projects in the 2009 Development Charges Background Study Staff has started the process of gathering the information for the 2009 development Charges Background Study Since the two sanitary sewer projects were near completion, and since the areas would be developed in the future, staff requested Cam Watson, Watson and Associates Economists Ltd., to comment on the inclusion of these two projects in the 2009 Background Study Mr Watson confirmed that these projects would qualify for inclusion in the 2009 Development Charges Background Study. Mr. Watson stated that the projects would open those areas to future development and thus qualify in determining future Development Charge rates. The future Development Charge rates would also include any interim financing costs while the Development Charge revenues are collected to fund the projects June 9, 2008 - 4 - CPS-2008-06 Mr. Watson stressed the importance of explaining the large cost variance between the estimated project cost ($3 million) and the current cost ($15 9 million) The explanation must address the reasons for the increase, particularly in terms of the size, scope, and the benefitting area Conclusion The Garner Southwest and Grassy Brook Sanitary Service Areas projects were included in the 2004 Development Charges Background Study at an estimated cost of $3 million Due to significant issues that impacted the servicing of the areas, the actual cost is $15.9 million The projects are eligible for inclusion in the 2009 Development Charges Background Study Future Development Charges revenues will be used to pay for these projects Staff is already reviewing a number of administrative issues based on the concerns raised, including cash flow/management plans for each capital project, afront-end agreement policy and a development charge credit policy. Council also directed the preparation of an inventory of developed and serviced land which is forthcoming Finally, the Treasurer is responsible for the payment of accounts, managing the cash flows, and the short term use of borrowing The Treasurer has undertaken these responsibilities in accordance with applicable legislation and past practices. Staff recommends that the interim funding of the Garner Southwest and Grassy Brook Sanitary Service Areas projects continue from Reserve Funds until Development Charge revenues have been received for these projects The status of completion is as follows • Grassy Brook Project is fully operational and was commissioned on May 14, 2008. • Garner South Project (Brown Road} is nearing the completion of the wet well and yard piping and is awaiting installation of pumps, electronics and mechanical system. Commission is expected in July/August 2008 Recommended by' Corporate Services Respectfully submitted ~~ • ' '/ ~ 'cam"" v J n MacDonald. Chief Administrative Officer Gamer Southwest Sanitary Service Area Chronology of Reports to Council CPS-2008-06 Date to Council Report # Amount Descnphoa Funtlulg Source October 18, 2004 MW-2004156 $59,960 00 Hinng Assomated Engtneeawg to complete Development Charges Reserve Envuonineatal Assessment Fund Decembaz 5, 2005 MW-2005-145 $0 H¢vuowtental ASSessmevt Approval Development Charges Reserve Fwd October 16, 2006 MW-2006-119 $273,192.00 Consulting Sernce Agceement with Development Charges Reserve Assasa[ed En®neenng Fwd 2007 Suly 23 MW-2007-85 $35,490.00 Increase to Consulting Scrvrce Agxeemem 95% Development Charges , with Associated Bngmeering 5%GaznerSW Sanitary Sewn Area Accowt October 15, 2007 MW-2007-123 $2,699,69002 Cnbbons Co¢t[actmg LM.A¢ed 95%Developmw[Charges, Gravity Sewers and Watersains 5%Capital November 26, 2007 MW-2007-129 $254,25600 Associatedfingmeenng engagedm 95%Development Charges, provide inspection services for the 6% Capital constnrchoa. November 26, 2007 MW-2007-130 $3,679,742.39 Gibbons Contracti¢g Ltd. hired 95%Development Charges, Pumping Srahon wd Forcemam 5%Capital TOTAL $7,002,330.41 Grassy Brook Sanitary Servtce Area Chronology of Reports to Council CPS-2008-06 Date to Council Report # Amount Descnphon Funding Source August 16, 2004 MW-2004-123 $57,09300 Etrvuonmental Assessment engaging Development Charges Reserve Philip's Engmucmg Ltd Fund. August 5, 2005 MW-2005-104 $0 Enduonmeatal Assessment Approval. Develapmem Charges Reserve Fuud. Febmary 6, 2006 IvIW-2006-11 $262,543 00 Consulting Services Agreemem - Development Charges Reserve Philip's Bagiawnng LhL W prepare Fmd detailed engineering design. April 3, 2006 MW-2006-38 $1,950,000 00 Amendmwt m Co~ultmg Sernces Development Charges Reserve Agreement wttli Philip's fingmeermg Ltd. Fund. m include gwtechnicel services. October 30, 2006 [vIW-2006-133 $195,000 00 Pbilip's Engmeermg Ltd. H¢ed Development Charges Reserve Inspwnon serncea for Watermam & Fund. Samtary Sewe[ Construchoa December ll, 2006 MW-2006-742 $146,140 00 EaAh Tech- Hned ro provide inspudon Developmem Charges Reserve services for the Pumping Station and Fund. Forca~mProlect.- January 22, 2007 MW-2007-04 $884,61000 Baioceo Construction for construction of 95%Development Charges, Samtary Sewer 5%Capital January 22, 2007 MR'-2007-06 $2,054,442.50 V Gibbons Coanacting Ltd. for 96°/ Development Charges, construction of Pump Station and 5%Capital Foecenwrn. Fehmary 5, 2007 1vIW-2007-06 $3,284,48000 Batocw Construction for constntchon of 66.6%Davelopment Charges, Sanitary Sevrex 33.5%Capital April 16, 2007 MW-2007-35 $30,00000 Consulting Fee Amendmwt-Philip's Development Charges Reserve Eagmeenng Ltd, m mclude design of Fund. services not anticipated at destgn stage. TOTAL $8,864,308.50 CPS•2006-06 CASH FLOW ~ Bank Account -~ Short Term Borrowing irvrwvvs Taxes User Fees Grants Debentures Development Charges Billings uu i rwvvs ur ~.iaai Pavments to Vendors Payments to Authorities 3. Payroll Refunds, Rebates 5. Debt Treasurer 286. 1 A municipality shall appoint a treasurer who is responsible for handltng all of the financial affairs of the municipality on behalf of and m the manner directed by the council of the municipality, including, (a) collecting money payable to the municipality and issuing receipts for those payments; (b} depositing all money received on behalf of the municipality in a financial institution designated by the mumcipality; (c) paying all debts of the municipality and other expenditures autlionzed by the mumcipality; (d) maintaining accurate records and accounts of the financial affairs of the municipality; (e) providing the council with such information with respect to the financial affairs of the municipality as it requires or requests; (f) ensunng investments of the mumcipality are made incompliance with the regulations made under section 418.2001, c. 25, s. 286 (1). Deputy treasurers The municipally may appoint deputy treasurers who shall have all the powers and duties of the treasurer under this and any other Act. 2001, c. 25, s. 286 (2). Not required to bean employee A treasurer or deputy treasurer is not required to be an employee of the municipally. 2001, c. 25, s. 286 (3). Liability limited ~. The treasurer or deputy treasurer is not liable for money paid in accordance with the directions of the council of the municipality unless the disposition of the money is expressly provided for under any Act. 2001, c 25, s. 286 (4). Delegation ~5 . The mumcipalrty may delegate to any person all or any of the powers and duties of the treasurer under this or any otherAct with respect to the collection of taxes. 2002, c 17, Sched. A, s. 47. Continuation despite delegation ~Q The treasurer may continue to exercise the delegated powers and duties, despite the delegation. 2002, c. 17, Sched. A, s. 47 Temporary borrowing for works 405. i A munictpality may authorize temporary borrowtng to meet expendttures made in connection with a work to be fittanced in whole or in part by the tssue of debenttres if, (a) the mumctpaltty is an upper-tier municipality, alower-tier mumcipaltty to a county or a stngle-tier munictpality and tt has approved the issue of debentures for the work; (b) the muntctpahty is a lower-her munictpality in a regtonal munictpality and tt has approved the work and the upper-tier municipality has approved the tssue of debentures for the work; or (c) the municipality has approved the issue of debentures for another muntcipaltty or a school board under section 404.2001, c. 25, s. 405 (1}. Use of proceeds ~2,) The proceeds obtained under subsection (1) shall be applied to the approved work but the lender is not responsible for ensuring the proceeds are used to this manner. 2001, c. 25, s. 405 (2). Security f3~ For the purposes of this section, a municipality that has approved the tssue of debentures but not sold them may authorize another munictpality or school board to use the debentures as security for temporary botrowtng. 2001, c. 25, s. 405 (3). .April 27, 2009, F-2009-23 1~~~ His Worship Mayor Ted Salci and Members of the Municipal Council City of Niagara Falls, Ontario The recommendation{s} contained in this report were adopted by City Council Members: Re: F-2009-23 Project Funding -Final Garner Southwest and Grassybrook Sanitary Service Areas RECOMMENDATION: 1.) That the Council authorize staff to request the Regional Municipality of Niagara issue a debenture on behalf of the City for the unfunded balance #rom the two capital projects, and 2.) That the City include the debt servicing costs of this debenture in the 2009 Development Charges Study. BACKGROUND: The two mentioned capital works projects require final funding to close out the projects. Council provided direction to staff to utilize internal sources of financing to complete the projects. As the projects are at a stage that requires final funding, staff recommends the Council authorize a debenture for the unfunded balance. The balance required will be determined at project completion and is estimated at approximately $12,500,000. The requirement to seek long term financing of this Hato. a~-:due to the fact that interim financing cannot be maintained for the period of,:;tY'~~quired to collect the funds. necessary to close the projects. The internal solarE~rz=~f'unding utilized to undertake the project are required for the purposes that the reserves were originally established. The 2009 Development Charges Study has been developed on the basis that future development charge rates will be collected to offset the expenditures made on these projects. As a result, the debt _`°' icing costs will be made from the collection of these _>: fees. Working Together to Serve Our Community ~ corporate services oepartmen Finance April 27, 2009 -2 • F•2009.23 Staff recommend that the use of external debentures funded by future development charges revenues be undertaken. The continual use of internal sources of cash is not viable in the long term as the City will require these funds in the future. Since the revenue stream from development charges matches directly with the debenture costs, this action results in the most effective strategy. Attached is report CPS-2008-06 which provides background on these projects. Recommended by: Todd Harrisodt, Directordof Financial Services Approved by: ~ ~4"" Ken Burden, Executive Director of Corporate Services Niagar- F-2009-61 December 14, 2009 REPORT TO: Councillor Victor Pietrangelo, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario SUBMITTED BY: Finance SUBJECT: F-2009-61 Approval of Interim 2010 Spending Limits RECOMMENDATION That, in the absence of an adopted 2010 General Purposes Budget, City Council approves the following: 1. City divisions be allowed to incur costs to a level of 50% of the divisions' expenditure budget of the prior year. 2. New capital expenditures which are deemed essential by a division be approved by City Council prior to purchase. 3. That this policy be communicated to all Commissions, Boards and Agencies, and that the City's contributions, to each stakeholder group be in accordance with the attached schedule. EXECUTIVE SUMMARY Spending authority is delegated to the staff by Council through the approval of the annual budgets. interim spending authority provides staff with similar authority within approved limits during the year up to the date of passage of said budgets. BACKGROUND Staffs authority to remit payments is derived from an approved Annual Operations budget. As Council is aware budget deliberations for the 2010 General Purposes Budget are underway. As a result, staff requests that Council approve interim spending limits for 2010 until the 2010 General Purposes Budget is approved. The Municipal Act, 2001 (Section 317) provides Council with the opportunity to authorize staff to remit payments for expenditures incurred. Since the consideration of the 2010 budget is ongoing, most divisions, boards and agencies should be able to operate with an interim spending approval of approximately 50% of the 2009 budget. If Council approval of the budget is not achieved by the end of May, 2010, a further report with an amended interim spending authority will be submitted. December 14, 2009 - 2 - F-2009-61 The purchase of items designated as new capital is to be excluded from the above proposal in as much as their purchase should specifically be approved by the respective Committee, Board or Agency. Such purchases prior to the adoption of the annual estimates will also require the approval of City Council. FINANCIAL IMPLICATIONS The City funds many stakeholders with its annual budget. These Commissions, Boards and Agencies provide a variety of services for the residents of the City. There are a variety of payment schedules made to the stakeholders. Some groups require monthly advances to operate, while others receive their payments once the budget is passed. Since the 2010 General Purposes Budget is not approved, staff suggest that payments to all monthly groups begin in 2010 according to the attached schedule. Groups that have an annual grant of greater than $100,000 would receive monthly funding up to 50% of the 2009 annual grant. For all other groups, the funding would be provided once the budget is approved. LIST OF ATTACHMENTS Stakeholder Payment Schedule Recommended by: Todd Har i/son, DQir'e/c- r/of Financial Services Approved by: ` ~~!~~'`%~~-r~c~ K. E. Burden, Executive Director, Corporate Services Respectfully submitted: Ken T d, Chief Administrative Officer TH/lw December 14, 2009 - 3 - F-2009-61 Stakeholder Payment Schedule Name of Stakeholder Recommended Payment Current Payment Niagara Falls Library Board Monthly Monthly Niagara Falls Board of Museums Monthly Monthly Niagara Falls Humane Society Monthly Monthly Project SHARE Monthly Monthly Winter Festival of Lights Monthly Monthly Niagara Falls Tourism Monthly Monthly Boys and Girls Club Monthly Monthly Women's Place of South Niagara Annually Monthly YWCA Niagara Region Annually Monthly St. John's Ambulance Annually Monthly Niagara Falls Art Gallery Annually Monthly Greater Niagara General Hospital Annually Not approved in 2009 Foundation Niagara Falls Concert Band Annually Annually 483 (Regional Niagara) Wing Royal Annually New in 2010 Canadian Air Force Assoc. Stamford Centre Volunteer Firemen's Annually Annually Association Niagara Falls Badminton Club Annually Annually Niagara Falls Horticultural Society Annually Annually Niagara Falls Lawn Bowling Annually Annually Niagara,FalIs CPS-2009-012 December 14, 2009 REPORT TO: Councillor Victor Pietrangelo, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario SUBMITTED BY: Corporate Services SUBJECT: CPS-2009-012 General Insurance Program 2010 RECOMMENDATION 1) That Council authorize staff to designate Frank Cowan Company Limited as the preferred proponent for the General Insurance Program for the City of Niagara Falls, and the Niagara Falls Library Board, 2) That staff negotiate with the preferred proponent, as per the Request for Proposal (RFP), to conclude the terms of a one year contract for the General Insurance Program at an upset limit of $1,385,407. plus applicable taxes, composed of: City $ 1,341,158. As per proposal, Library $ 42,749. As per proposal, plus Library $ 1,500. Fora $5,000,000 increase in Limit of Liability 3) That the proposed 2010 General Insurance Program be subject to annual renewal based on satisfactory performance and Council approval, 4) That staff investigate alternative insurance programs that would red uce the overall costs to the City for insurance premiums, risk management, and claims handling to be incorporated into a revised Request for Proposal, commenced during the next Council term. EXECUTIVE SUMMARY Three insurance brokerage companies responded to a Requestfor Proposals forthe City's General Insurance Program. The proposals were evaluated by staff and the City's Consultant, RiskPro Consulting. The preferred proponent is Frank Cowan Company Ltd. The new General Insurance Program should be authorized by Council in order to provide insurance policies to be effective January 1, 2010. Upon authorization, staff will finalize the program coverages and costs. BACKGROUND For several years, the City has purchased its General Insurance Program from the Frank Cowan Company, an insurance brokerage firm. In September 2009, a local insurance brokerage firm met with staff to inquire on bidding for the City's insurance requirements. December 14, 2009 - 2 - CPS-2009-012 Since the annual insurance renewals had occurred for some time, staff undertook to prepare and issue a Request for Proposal (RFP). The request also included the Niagara Falls Library Board, which is separately serviced by the City's insurance broker. Staff engaged risk management services from RiskPro Consulting. RiskPro provided the expertise and experienceto develop the RFP forthe General Insurance Program. RiskPro also provided analytical expertise for the evaluation of the proposals. The RFP generated four responses; one of which remitted a letter advising that they would not be able to submit a proposal by the due date. A second proponent submitted an incomplete proposal which was disqualified from further consideration. The remaining two proponents submitted qualifying proposals, however, only one proponent maintained the RFP's prescribed general liability insurance deductible. Staff evaluated the two proposals in accordance with the criteria provided in the RFP. A preferred proponent was selected based on the highest score per the criteria. ANALYSIS/RATIONALE RiskPro Consulting has provided a more detailed analysis and rationale in their Summary Overview, which is attached. The Frank Cowan Company Ltd. (Cowan) is recommended as the preferred proponent for the City's General Insurance Program. The recommendation resulted from Staff's evaluation of the proposals in accordance with the criteria provided in the RFP. This preferred proponent was selected based on the highest score per the criteria. The Cowan proposal contains all ofthe City's and Library's insurance requirements in accordancewith the RFP. Attached is a listing of the insurance program highlights. Cowan is a proven insurance broker with 80 years of municipal experience, providing insurance and risk management services to over 170 Ontario municipalities. Cowan is appropriately licensed and in good standing to operate as an insurance broker. Cowan provides extensive risk management services in designing and implementing strategies to control risk. Services include training, bench-marking, contractual and claims reviews, risk inspections, policy and procedural audits, educational seminars and publications. Cowan also provides in-house claims handling by their professional claims management staff. The Verge Insurance Group, in conjunction with Jardine Lloyd Thompson Canada Ltd.(JLT), provided a qualifying proposal. Verge Insurance is a Niagara regional brokerwith 22 years ofcorporate and institutional experience. JLT is a leading publicsector insurance broker with over 35 years of municipal experience across Canada. Both Verge and JLT are appropriately licensed and in good standing to operate as insurance brokers. The Verge proposal document stated that it was to be considered with JLT's Business Protocols booklet, which was not included in the submission. The proposal did not include costing for the RFP specified deductible for General Liability insurance. The proposal's lesser cost was due in part to the higher deductible. The proposal also stated several `subject to' clauses, assumptions, requirements and exceptions in order to clarify the insurer's knowledge of the City's risks. All or any of these would potentially impact the premiums for the insurance coverages. The proposal offered JLT's extensive risk management and claims handling services. Specific enhancements included an I-Drive defensive driving program and specialty software for tracking and managing claims. December 14, 2009 - 3 - CPS-2009-012 BFL Canada Risk and Insurance Services submitted a proposal which was disqualified from further consideration. The proposal lacked the mandatory requirements of the RFP. By accepting the Cowan proposal the City and Library will continue an established relationship without incurring transitional steps and perhaps unanticipated costs. The Cowan proposal maintains the known services that City and Library staff have relied upon for risk management and claims handling. The Cowan proposal best matches the RFP specifications; the broadly worded coverages provide unparalleled security for the high liability exposure in municipal insurance. FINANCIAL IMPLICATIONS The Frank Cowan Company Ltd. has proposed a total cost of $1,385,407 (plus applicable taxes) for the 2010 City's and Library's General Insurance Program. In comparison to the 2009 insurance costs, the new program will cost 19.7% or $227,960 more. Attached are the summaries of coverages and costs analysis with a 2009 comparative for both the City and Library. The 2010 cost includes $1,500. for an increase of $5,000,000 for the Library's Limit of Liability. This increase will match the City's $20,000,000 Limit of Liability and is recommended by Staff. Attached is a listing of Cowan's program options. Verge and JLT provided an insurance program proposal at significantly less cost. The program featured a different approach to the management of insurable risks by offering insurance products and deductibles that differed greatly from the City's current insurance program. For example, a higher limit of liability would be achieved by using a primary insurance policy for one risk and an umbrella policy for combined risks, rather than using a primary policy for each risk. An increased deductible was also proposed to significantly reduce the premium costs. The City's consultant, RiskPro, advised that due to its many differences, the Verge and JLT insurance program requires considerable study and analysis. The program would impact the City's claims management process, claims adjuster and legal costs, and its self-insured claims payments. RiskPro also advised that the proposed program is a new product in the market place, which has not yet proven its comparability to established municipal insurance programs. Attached is the RiskPro Summary Overview for the City of Niagara Falls 2010 Insurance Review. Council may wish to direct staff to examine options for a future insurance RFP, securing the required expertise to report to Council on the merits of differing approaches to the City's insurance and risk management requirements. CITY'S STRATEGIC COMMITMENT Continue to monitor and improve the efficiency of the organization is one of Council's strategic priorities forthe 2007-10 term. Part of Staffs attention to this priority is the review of the City's General Insurance Program. Since the City's insurance program has been renewed annually for several years without gong to the market, Staff undertook to prepare and issue a Request for Proposal to the insurance market. December 74, 2009 - 4 - CPS-2009-012 The response to that RFP indicates that there may be opportunities to lower the overall cost of the City's insurance/risk management program. However, more research and analysis would be required to provide Council with a meaningful analysis of the comparative merits of alternative insurance programs. LIST OF ATTACHMENTS • RiskPro Summary Overview • Frank Cowan Company insurance program excerpts: • Program Highlights • Program Summary -City • Program Summary -Library • Program Options • Cost Analysis -City • Cost Analysis -Library Approved by: ~ v K. E. Burden, Executive Director, Corporate Services Recommended by: G ~~s~T~'-~Ga!2~c/ Ed Dujlovic, Executive Director, Community Services Respectfully submitted: Ken T dd, Chief Administrative Officer Writer of the Report H:\WPDFiles\ReportslCPS-2009-12 General Insurance Program 2010.wpd City ofNiagara Falls-20101nsurance Review Summarv Overview RiskPro was retained to provide consulting assistance in the review, analysis and evaluation of the submissions received in response to the City of Niagara Falls' Request for Proposal concerning the General Insurance and Risk Management Program for its 2010 renewal. Three submissions were received and provided for our review, as follows: 1. Frank Cowan Company Limited (Cowan), along with First Niagara Insurance Brokers Inc.; 2. The Verge Insurance Group through Jardine Lloyd Thompson Canada Inc. (JLT); and 3. BFL Canada Risk and Insurance Services Inc. (BFL). We further understand that Aon Insurance Brokers had also sent the City a letter of regret citing not enough time, information and details were provided. Upon receipt of this assignment and following a comprehensive review and analysis of the proposal submissions and participating in consensus scoring among the evaluation committee members, RiskPro is pleased to offer you this summary overview and recommendation. Mr. Ken Beaman, City Solicitor, advised the evaluation team that the BFL submission would not be considered as it did not meet mandatory RFP requirements-most notably, policy wordings were not submitted with their proposal. Please refer to Exhibit I, Insurance Proposal Evaluation and Summary Rating for the team's consensus rating, along with the section of this report entitled, "Submission Ratings" which highlights features of each submission. We have also included our rating guidelines for your reference. RiskPro 11/09 Page 1 of 9 City ofNiagara FalIs~2010Insurance Review From this summary, you can see that Cowan scored a total of 81 points; while JLT earned a total of 51 points. The JLT submission did not include an annual premium at the existing $50,000 deductible required in the RFP specifications for both the General Liability and Errors and Omissions coverage. JLT did offer considerable cost savings for the City to consider at a $100,000 deductible level. Unfortunately, by choosing not to provide the City with the cost at the existing and requested deductible level, the committee agreed that it would be impossible to evaluate their submission in terms of Annual Premium alone, as a number of other cost considerations would also need to be investigated and researched to make meaningful comparisons. If you refer to the Insurance Proposal Cost Comparison in Exhibit II, you will find a chart illustrating the annual premiums quoted for each submission, along with our notes identifying some of the areas where additional costs or savings may apply. Again, we should point out that it was very difficult to compaze these two submissions due to the different deductible levels quoted. Since JLT did not provide a quote at the requested $50,000 deductible level for liability coverages, they scored zero points under the Annual Cost criterion, however received the fu115 points available under Added Value for the substantial savings at the $100,000 deductible level. It was unfortunate that the City did not receive complete proposals from all known traditional insurance markets in Ontario offering public entity programs, and further that JLT did not provide a quotation at the requested deductible level. In the section of our report entitled, "Key Issues/Significant Program Differences", we discuss specific or significant differences or aspects of coverage between the various programs that we feel are important to fully understand the fmancial implications for the City. Finally, we have provided a detailed (though not exhaustive) listing of the major aspects and noted differences of coverage between the programs. Please refer to the section of this report entitled, "Program Comparison" to review these further. RiskPro 11/09 Page 2 of 9 City ofNiagara Falls-20107nsurance Review We trust that the information contained in our report provides staff and the Committee with enough information to make an informed decision concerning the placement of the City's General Insurance and Risk Management Program for its 2010 renewal. We would be pleased to assist you, should you require anything further in this regard. Our recommendation follows in the next section. Recommendation Due to the fact that Cowan's overall rating was highest; their submission best meets the City of Niagara Falls' criteria as outlined in the RFP; provides broadly worded insurance policies; offers high service levels; and has a reputable team of insurers, we recommend that the City consider acceptance of the proposal submitted by the Frank Cowan Company Limited, along with First Niagara Insurance Brokers Inc. for both the City's and Library's 2010 renewal programs. Our recommendation is contingent upon the following: 1. Fully utilizing the services-risk management, claims management, and insurance administration provided by Cowan that are within the base premium and identified throughout their proposal submission. 2. Meeting with the appropriate representatives of the Frank Cowan Company and First Niagara Insurance Brokers to implement the proposed Risk Management and Claims Management plans to the City's satisfaction. 3. Consideration is given to increasing both the City's and Library's limit of liability to $25 million for an additional annual premium of $24,634. At a minimum, we highly recommend that both the City and Library maintain similar limits of liability; thus if the City decides to maintain its existing liability limits of $20 million, we suggest the RiskPro 11/09 Page 3 of9 City ofNiagara Falls-20107nsurance Review Librazy increase theirs to the same level for an additional annual premium of $1,500. Please refer to Program Options on page 29 of the Cowan submission for more detail; and page 28, which highlights the importance of adequate liability limits. 4. Other program options are listed on page 29 of the Cowan submission for your consideration. By renewing the City and Library programs with Cowan for the 2010 policy term, the City will also benefit from the following: ^ little or no transitional costs or issues; ^ a known and established relationship with the provision of known services; ^ the security and value in maintaining broadly worded coverage; and ^ the trust, comfort and security in a mazket that knows the City of Niagara Falls and one that has extensive experience and expertise with numerous municipalities in Ontazio of similar size and risk. Please note that the Cowan proposal is only open for acceptance until December 315` 2009. We respectfully suggest (and we know that this simply was not available this year) that when the City issues its next RFP for General Insurance and Risk Management Program that additional time is allotted to prepare the specifications; to give the proponents sufficient time to respond; and finally allow more time for your evaluation team to conduct additional analysis .and reseazch, if necessary, to fully investigate innovative approaches and solutions that may be presented for the City's consideration. We further recommend that you continue to monitor the market and test it formally over a reasonable period of time (every three to five years, depending on market conditions) and to conduct periodic benchmazking with respect to coverage and limits. RiskPro 11/09 Page 4 of9 City of Niagara Falls-20101nsurance Review We trust that the information contained in our report provides staff and the Committee with enough information to make an informed decision concerning the City of Niagara Falls' General Insurance and Risk Management Program for its 2010 renewal. We would be pleased to assist you, should you have any questions or require anything further in this regard. RiskPro 11/09 Page S of9 City of Niagara Falls-20101nsurance Review Exhibit I Please note that the following represents the Evaluation Team's Consensus scoring of each Proponent. Insurance Prouosal Evaluation and Summarv Ratine Criteria/Rating COWAN JLT System 1. Product 30 points Meetin RFP S ecs-5 5 0 Scope of Coverage - 15 13 8 Enhancements and Value Added Services -10 0 7 2. Services-20 points Insurance Administration - 2 2 2 Risk Management Services - 8 6 7 Claims Management Services - 10 8 5 3. Qualifications - 20 points Proponent Experience -7 7 6 Team Ex ertise - 7 7 5 Financial Stability of Insurers - 6 6 6 4. Price - 30 points Annual Cost - 25 25 0 Added Value - 5 2 5 TOTAL -100 81 51 RiskPro 11/09 Page 6 of9 City of Niagara Falls-20107nsurance Review Notes• For purposes of this chart: ^ COWAN represents the proposal submitted by Frank Cowan Company Limited, along with First Niagara Insurance Brokers Inc. ^ JLT represents the proposal submitted by The Verge Insurance Group through Jardine Lloyd Thompson Canada Inc. 2. The rating categories and weightings were selected by City staff and disclosed in the 12FP specifications. 3. The score for each proposal under each category represents a numerical value based on the consensus of the Evaluation team and the following rating key, after reviewing the qualified proponents' submissions. Retina Kev The maximum available for the Services and Qualifications criteria is 20 points each; while 30 points are available for both the Product and Price criteria. 2. The Product category is divided into three sections. Meeting RFP Specifications (5 points), Scope of Coverage (15 points) and Enhancements and Value Added Services worth a total of 10 points. If a proponent's submission meets all of the RFP specifications, full points will be awarded for that section. The Scope of Coverage section is rated on completeness and superiority of the wordings compared with other proponents and additional points can be achieved under Enhancements and Value Added Services for additional or enhanced coverages or services provided. 3. To obtain perfect scores under the Services criterion, the proponent must demonstrate the ability to provide all the services identified in the specifications and further detail what level of service would be provided and how. 4. To obtain a perfect score under Qualifications, the proponent must demonstrate that it has the required experience, expertise, and available resources, along with using insurers that are financially sound and licensed to transact business in Ontario. Financial Stability also includes the individual proponent's perceived ability to negotiate future markets should their existing markets disappear. 5. The Annual Cost criterion is rated by providing a perfect score of 25 points to the proponent with the lowest premium quotation. The remaining bidders are awarded points in correlation to the percentage difference between their proposal cost and that of the lowest bidder. For example, if one bidder had a proposal cost that was 50% higher than the lowest bidder, they would lose half of the points (i.e. 13 points out of the 25 available here). RiskPro 11/09 Page 7 of9 Crty of Niagara Falls-20101nsurance Review 6. The Added Value section of Price takes into consideration any additional services, innovations or other factors provided by the proponent at no additional cost, which would otherwise equate to potential additional costs to the City. 7. The Total represents the sum of all points awarded under each category. Note the maximum number of points available, based on the evaluation criteria, is a total of 100. RiskPro 11/09 Page 8 of9 City of Niagara Fad1a~20101nsurance Review Exhibit II Insurance Proposal Cost Comparison Annual Premium Annual Premium Submission (Liability Policies at (Liability policies at $50,000 Deductible) $100,000 Deductible) COWA N $1,383,907. Not provided JLT No Quote $670,130. Notes• For purposes of this chart: ^ COWAN represents the proposal submitted by the Frank Cowan Company Limited, along with First Niagaza Insurance Brokers Inc. ^ JLT represents the proposal submitted by The Verge Insurance Group through Jazdine Lloyd Thompson Canada Inc. 2. The Annual Premiums shown aze net of any applicable taxes and include all brokers' fees and commissions, if applicable. 3. The Annual Premiums shown include all required risk management services, with the exception o£ - JLT's premium excludes property valuations of heritage buildings. 4. It is important to note that JLT's annual premium may not be firm as the program quoted is subject to a number of assumptions and requirements. Should any of those assumptions be incorrect or if any of the requirements are not met to the underwriters' satisfaction, the City may be facing additional premiums. 5. JLT quoted Liability limits of $25 million applicable to both the City and the Library under the various policies; while Cowan quoted as per the specifications of $20 million for the City and $15 million for the Library. (Having said that, some aggregate limits also apply to JLT's program that do not apply to the Cowan program.) 6. Overall program differences may result in additional costs. Please refer to the following sections of this report, which highlights the major differences. RiskPro 11/09 Page 9 of 9 Corporation of the City of Niagara Falls SERVICE REQUIREMENTS Program Highlights 2010 Municipal Insurance Proposal We have outlined below specific highlights of the comprehensive Cowan Program to assist you when comparing Insurance suppliers. • Abuse included, full policy limits available with no aggregate limit. • Professional Liability included, coverage for bodily injury, property damage, and financial loss. • Medical Malpractice included, not limited to incidental. • Products Liability included. • Blanket Property of Every Description, replacement cost, no co-insurance or margin clauses. • Replacement cost (new for old) on vehicles, as per schedules. • Municipal Liability Limits of $ 20,000,000. each and every occurrence, no aggregates. • Errors and Omissions Liability Limits of $ 20,000,000. each and every occurrence. • Non-Owned Automobile Limits of $ 20,000,000. each and every occurrence. • Automobile Fleet Limits of $ 20,000,000. each and every occurrence. • Environmental Liability includes Watercraft, Sold Property and closed Landfill Sites. • Crime Insurance includes Broad Definition of Insured and does not have a Deductible. • Worldwide cover on Municipal Liability. Frank Cowan Company -6- Corporation of the City of Niagara Falls 2010 Municipallnsurance Proposal PROGRAM SUMMARY SUMMARY OF COVERAGES -CITY LIMTI'S/AMOUNTS Municipal Liability Limit of Protection per occurrence $ 20,000,000. (No Annual Aggregate Limit) Third Party Claims Deductible including expenses $ 50,000. Sewer Backup per Claimant Deductible including expenses $ 50,000. Wrongful Dismissal (legal expense) Limit per claim $ 250,000. Annual Aggregate Limit $ 250,000. Deductible $ 5,000. Malpractice Liability Included Errors and Omissions (Claims Made Form) Limit of Protection per claim $ 20,000,000. (No Annual Aggregate Limit) Deductible including expenses $ 50,000. Non-Owned Automobile Limit of Protection per occurrence $ 20,000,000. (No Annual Aggregate Limit) Legal Liability for Non-Owned Vehicles (S.E.F. No. 94) All Perils Physical Damage Limit $ 250,000. Deductible $ 500. Environmental Liability (Claims Made Form) Liability of Protection per claim $ 3,000,000. Annual Aggregate Limit $ 4,000,000. Self-Insured Retention $ 50,000. Comprehensive Crime Commercial Blanket Bond $ 1,000,000. Money Orders and Counterfeit Paper Currency Included Depositors' Forgery Included Audit Expense $ 100,000. Money and Securities -Blanket any Location $ 100,000. Excess on Securities $ 100,000. Computer Fraud or Funds Transfer Fraud $ 200,000. Frank Cowan Company -20- I Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OFCOVERAGES -CITY LIMTl'S/AMOUNTS Councillors' Accident -Mayor and Eight Members of Council Accidental Death & Dismemberment $ 200,000. (No Annual Aggregate Limit and No Deductible) Weeklyincome-TotalDisability $ 500. Weekly Income -Partial Disability $ 250. Municipal Conflict of Interest Percentage of Legal Fees and Expenses 100% Maximum Limit of Reimbursement per claim $ 100,000. (No Annual Aggregate Limit) Legal Expense Percentage of Legal Fees and Expenses 100% Maximum Limit of Reimbursement per claim $ 100,000. Annual Aggregate Limit $ 250,000. RECREATION AFFII,IATES General Liability Each Occurrence Limit $ 5,000,000. Products -Completed Operations Hazard Aggregate Limit $ 5,000,000. Employers' Liability Limit $ 5,000,000. Personal Injury Limit $ 5,000,000. Tenants' Legal Liability Limit $ 5,000,000. Deductible $ 1,000. Non-Owned Automobile Limit of Protection per occurrence $ 5,000,000. (No Annual Aggregate Limit) Legal Liability for Non-Owned Vehicles (S.E.F. No. 94) All Perils Physical Damage Limit $ 100,000. Deductible $ 500. Frank Cowan Company -21- Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OF COVERAGES -CITY LIMITS/AMOUNTS Property Insurance (including Data Processing Insurance) Total Sum Insured * $ 152,379,452. Valuable Papers $ 500,000. Accounts Receivable (other than Data Processing) $ 500,000. Extra Expense (other than Data Processing) $ 500,000. Business Interruption Rent or Rental Value Farm $ 500,000. Gross Revenue Form $ 3,868,345. Data Processing System and Equipment $ 2,701,800. Media $ 151,500. Extra Expense $ 108,400. Watercraft Floater $ 194,500. Fine Arts Form $ 258,600. Exhibition Floater As Per Lists Provided Deductible $ 10,000. Exceptions: Data Processing, Fine Arts Form and Exhibition Floater $ 2,500. - Museum Contents including Artifacts, Contents belonging to Niagara Falls $ 2,500. Professional and Educational Toy "FLASHY" All Library Buildings and Contents $ 5,000. *Note: Please refer to the insurance contract for an itemized list of assets containing specific limits of insurance or that are excluded from the policy. Frank Cowan Company _22_ Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OFCOVERAGES -CITY LIMITS/AMOUNTS Equipment Breakdown Limit per Accident -Comprehensive $ 50,000,000. Extra Expense $ 500,000. Spoilage -Goods under Refrigeration $ 50,000. Business Interruption -Loss of Profits (Gross Revenue): -Niagara Falls Memorial Arena, 5145 Centre Street, Niagara Falls, ON L2G 3P3 $ 319,800. - Stamford Memorial Arena, 6750 Federica Street, Niagara Falls, ON L2G 1 C9 and $ 634,000. Jack Bell Arena, 6750 Frederica Street, Niagara Falls, ON L2G 1 C9 - Chippawa Willoughby Memorial Arena, 9000 Sodom Road, Niagara Falls, ON $ 207,500. L2E 6S6 -Municipal Swimming Pool, F.H. Leslie ParK, 5250 Valley Way, Niagara Falls, ON $ 28,000. L2E 657; Municipal Pool, Mitchelson Park, Dorchester Road, Niagara Falls, ON L2E 657; Swimming Pool at Prince Charles Park, 6230 Arad Street, Niagara Falls, ON L2G 2Z7; Office, Lunchroom and Maintenance Building, 4501 Stanley Avenue, Niagara Falls, ON L2E 6S7 - McBain Community Centre, 71560 Montrose Road, Niagara Falls, ON L2E 6S7 $ 42,000. - Temmnal-Garage-Office Building, 4320 Bridge Street, Niagara Falls, ON L2E 2R7 $ 2,637,045. And Bus Terminal, 4555 Erie Avenue, Niagara Falls, ON L2E 7G9 Expediting Expenses Included By-Law Cover Included Errors and Omissions $ 100,000. Hazardous Substance (including PCB Contamination) $ 500,000. Ammonia Contamination $ 500,000. Water Damage $ 500,000. Professional Fees $ 500,000. Data Restoration $ 25,000. Denial of Access 2 Weeks Deductible $ 10,000. Frank Cowan Company -23- Corporation of the City of Niagara Falls 20]0 MunicipalInsurance Proposal PROGRAM SUMMARY SUMMARY OF COVERAGES -CITY LIMITS/AMOUNTS Automobile Fleet Liability Limit $ 20,000,000. Deductibles Section 3 (Thud Party) $ 10,000. Section 6 (Duect Compensation) $ 10,000. All Perils $ 10,000. OPCF # 20 -Coverage for Transportation Replacement applies to: - 2004 Chev V entwe and 1995 Dodge Ram Tmck - Limit $ 10,000. per occwrence Automobile Fleet (Transit) Liability Limit $ 20,000,000. .Deductibles Section 3 (Third Party) $ 10,000. Section 6 (Direct Compensation) $ 10,000. Accident Benefits $ 10,000. All Perils $ 10,000. OPCF # 20 -Coverage for Transportation Replacement applies to: - 2002 Ford Chair-A-Van, 2001 Ford Handicap Van, 2003 Girardin Handicap Van, 2006 Corbeil Chair-A-Van and Two (2) 2006 Girardin Chair-A-Vans (S/N's A17818, A52286) - Limit $ 10,000. per occurrence Garage Automobile Third Party Liability Limit Customer Vehicles Collision Limit Deductible Comprehensive Limit Deductible $ 20,000,000. $ 500,000. $ 500. $ 2,000,000. $ 1,000. 2010 - 2011 PROPOSED ANNi7AL PREMRIM -CITY $ 1.314.158 Frank Cowan Company -24- Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal I! PROGRAM SUMMARY SUMMARY OF COVERAGES -LIBRARY LIMITS/AMOUN'T'S General Liability Limit of Protection per occurrence $ 15,000,000. (No Annual Aggregate Limit) Third Party Claims Deductible including expenses $ 2,500. Sewer Backup per Claimant Deductible including expenses $ 2,500. Wrongful Dismissal (legal expense) Limit per claim $ 250,000. Annual Aggregate Limit $ 250,000. Deductible $ 5,000. Errors and Omissions (Claims Made Fonn) Limit of Protection per claim $ 15,000,000. (No Annual Aggregate Limit) Deductible including expenses $ 2,500. Corporate Indemnification Coverage $ 2,500,000. Non-Owned Automobile Limit of Protection per occurrence $ 15,000,000. (No Annual Aggregate Limit) Legal Liability for Non-Owned Vehicles (S.E.F. No. 94) All Perils Physical Damage Limit $ 250,000. Deductible $ 500. Enviromnental Liability (Claims Made Form) Liability of Protection per claim $ 4,000,000. Annual Aggregate Limit $ 4,000,000: Self-Insured Retention $ 2,500. Comprehensive Crime Commercial Blanket Bond $ 1,000,000. Money Orders and Counterfeit Paper Currency Included Depositors' Forgery Included Audit Expense $ 100,000. Money and Securities -Blanket any Location $ 100,000. Frank Cowan Company -25- Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OF COVERAGES -LIBRARY LIMITS/AMOUNTS Councillors' Accident -Eight Board Members Accidental Death & Dismemberment $ 200,000. (No Annual Aggregate Limit and No Deductible) Weeklylncome-TotalDisability $ 500. Weekly Income -Partial Disability $ 250. Municipal Conflict of Interest Percentage of Legal Fees and Expenses 100% Maximum Limit of Reimbursement per claim $ 100,000. (No Annual Aggregate Limit) Legal Expense Percentage of Legal Fees and Expenses 100% Maximum Limit of Reimbursement per claim $ 100,000. Annual Aggregate Limit $ 250,000. Property Insurance (including Data Processing Insurance) Total Sum Insured * $ 29,730,000. Valuable Papers $ 500,000. Accounts Receivable (other than Data Processing) $ 500,000. Extra Expense (other than Data Processing) $ 500,000. Business Interruption Rent or Rental Value Form $ 500,000. Data Processing System and Equipment $ 378,200. Media $ 16,500. Extra Expense $ 8,400. Fine Arts Form $ 258,600. Exhibition Floater As Per Lists Provided Deductible $ 5,000. Exceptions: Fine Arts Form and Exhibition Floater $ 2,500. *Note: Please refer to the insurance contract for an itemized list of assets containing specific limits of insurance or that are excluded from the policy. Frank Cowan Company -26- Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OF COVERAGES -LIBRARY LIMIT S/AMOUNTS Equipment Breakdown Limit per Accident -Comprehensive $ 50,000,000. Extra Expense $ 500,000. Spoilage -Goods under Refrigeration $ 50,000. Expediting Expenses Included By-Law Cover Included Errors and Omissions $ 100,000. Hazardous Substance (including PCB Contamination) $ 500,000. Ammonia Contamination $ 500,000. Water Damage $ 500,000. Professional Fees $ 500,000. Data Restoration $ 25,000. Denial of Access 2 Weeks Deductible $ 2,500. Automobile Fleet Liability Limit $ 15,000,000. Deductible All Perils $ 1,000. Vehicle Insured: 2002 Chev Van S/N 150307 Replacement Cost 2010 - 2011 PROPOSED ANNUAL PREMIUM -LIBRARY $ 42,749. PLUS APPLICABLE TAXES NOTE: Value Added Risk Management Services are included in the total premiums. Frank Cowan Company -27- Corporation of the City of Niagaza Falls 2010 Municipal Insurance Proposal PROGRAM OPTIONS Options are available as outlined below. Please note that in addition to these options, you may also have other exposures that require or may benefit from specific insurance.forms, such as: marina liability, aviation liability, etc. Alternate deductibles and limits may also be available. 2. CRIME INSURANCE - TH1RD PARTY BOND EXTENSION With respect to Crime Insurance, coverage. may be extended to include a Third Party Bond Extension. Should this form of coverage be required, please advise us accordingly in order that we may provide you with a cost quotation. LIABILITY LIMITS tCITYI To increase the present limit of liability from $ 20,000,000. to $ 25,000,000. with respect to the Municipal Liability, Errors & Omissions, Non-Owned Automobile, Owned Automobile (City), Owned Automobile (Transit) and Garage Automobile policies would require an additional annual premium of $ 21,634. 3. LIABILITY LIMITS (PUBLIC LIBRARYI Consideration should be given to increasing the $ 15,000,000. Limit of Liability with respect to the General Liability, Errors & Omissions Liability, Non-Owned Automobile and Owned Automobile policies. We set out below the additional annual premiums required for optional limits: Limit of Liability $ 20,000,000. $ 25,000,000. Additional Annual Premium $ 1,500. Min. $ 3,000. Min. Frank Cowan Company _29_ COST ANALYSIS -City of Niagara Falls MUNICIPAL LIABILITY ERRORS AND OMMISSIONS NON-OWNED AUTOMOBILE FOLLOW FORM EXCESS LIABILITY ENVIRONMENTAL LIABILITY COMPREHENSIVE CRIME COUNCILLORS' ACCIDENT CONFLICT OF INTEREST LEGAL EXPENSE RECREATION AFFILITATES: GENERAL LIABILITY NON-OWNED AUTOMOBILE PROPERTY/DATA PROCESSING EQUIPMENT BREAKDOWN OWNED AUTOMOBILE (CITY) GARAGE AUTOMOBILE (CITY) EXCESS AUTOMOBILE & GARAGE (CITY) OWNED AUTOMOBILE (TRANSIT) EXCESS AUTOMOBILE (TRANSIT) 20D9 AMENDMENTS EXPIRING PROGRAM 2009-2010 TERM 546,587 $ 46,047 500 28,305 38,650 4,750 558 780 6,857 3,427 100 89,5D7 7,429 96,060 9, 207 2,347 191,037 4,571 38,437 NEW PROGRAM 2010-2011 TERM 776,154 46, 047 500 31,839 38,650 4, 750 558 780 6,857 3,018 INCLUDED ABOVE 103,121 7,854 97,957 9,207 2,525 206,388 4,953 ANNUAL PREMIUM $ 1,115,156 $ 1,341,158 COST ANALYSIS -Niagara Falls Public Library EXPIRING PROGRAM NEW PROGRAM 2009-2010 TERM 2010-2011 TERM GENERAL LIABILITY $ 7,657 $ 7,657 ERRORS AND OMMISSIONS 4,967 4,967 NON-OWNED AUTOMOBILE 200 200 ENVIRONMENTAL LIABILITY 2,132 2,132 COMPREHENSIVE CRIME 1,750 1,750. COUNCILLORS' ACCIDENT 496 496 CONFLICT OF INTEREST 540 540 LEGAL EXPENSE 750 750 PROPERTY/DATA PROCESSING 18,728 19,017 EQUIPMENT BREAKDOWN 3,387 3,556 AUTOMOBILE FLEET EXCESS LIABILITY (AUTOMOBILE) ANNUAL PREMIUM INCREASE LIMIT OF LIABILITY 1,484 1,484 200 200 $ 42,291 $ 42,749 1 REVISED ANNUAL PREMIUM $ 44,249 Niagara,FaIls CPS-2009-013 December 14, 2009 REPORT TO: Councillor Victor Pietrangelo, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario SUBMITTED BY: Corporate Services Department SUBJECT: CPS-2009-013 Niagara Falls Humane Society RECOMMENDATION That the City provide up to $179,000. to the Niagara Falls Humane Society (NFHS) as a five-year forgivable mortgage for the financing of completed building improvements at the NFHS animal shelter. EXECUTIVE SUMMARY In response to deficiencies outlined in the Bandow report on Animal Control in the City of Niagara Falls, the Niagara Falls Humane Society (NFHS) invested $300,000 in capital improvements. The improvements have addressed the deficiencies. The result of the improvements has been a depletion of the financial cushion maintained by the NFHS. As a result, the NFHS has requested one-time financial assistance. Staff support the immediate financial assistance for capital improvements to the NFHS facility. BACKGROUND The 2007 Bandow report on Animal Control in the City of Niagara Falls characterized the NFHS facility as "barely adequate". The NFHS has been proactive in investing approximately $300,000 in both building and equipment, despite the uncertainty of their relationship with the City. The completed improvements have addressed many of the animal shelter deficiencies. Staff inspected the facility in 2008 and was satisfied with the improvements. Unfortunately, these expenditures have exhausted the NFHS reserves. The NFHS advised that their reserve funds were used to construct capital improvements to their facility in accordance with the 2007 Bandow report. On July 29, 2009, the NFHS formally requested the City to provide a mortgage in the amount of $179,032.18 for the financing of the shelter improvements. A staff report on November 16'h addressed this issue and a number of other issues (licensing fees, a grant request and the City's operating budget for animal control and sheltering costs). Council approved the fee increase but referred the other items to budget deliberations. Staff has subsequently met with principles from the NFHS. They have indicated that the issue of a forgivable mortgage on the building is a pressing need. The financial cushion, they had prior to the Bandow-related renovations, has been depleted. The forgivable mortgage will provide some breathing room they need to continue to operate. December 14, 2009 - 2 - CPS-2009-013 ANALYSIS/RATIONALE Through meetings between Niagara Falls Humane Society (NFHS) principles and City staff, afive-yearforgivable mortgage was proposed forfinancing the capital improvements to the NFHS facility. The financial assistance relieves the City from constructing and operating its own animal shelter. The 2007 Bandow report detailed the costs for building and operating an animal shelter. New construction costs could amount to $1.8 million with additional equipping costs of approximately $121,000. Staff has reviewed the 2008 Audited NFHS financial statements and has confirmed that the capital improvements have increased the fixed assets of the organization. The fixed building asset as at Dec.31/08 was $839,191. Staff has also verified the actual expenditures for the capital improvements amounting to $179,032.18 . Based on the improvements to the facility and ultimate cost savings to the municipality, staff is recommending that the City provide up to $179,000. to the NFHS as a five-year forgivable mortgage for the financing of completed building improvements. Without such assistance, the financially viability of the shelter will be called into question. The NFHS has expressed their immediate financial challenge. Having exhausted their reserve funds, the NFHS has been using aline-of-credit to support regular operations; however, the 2009 operating costs are exceeding their revenues and the organization continues to incur short term debt. Staff's review of the 2009 NFHS financial statements has confirmed that, without immediate financial assistance, the operations will have to be severely reduced to repay the debt and to address the operating deficit. FINANCIAL IMPLICATIONS The one-time financial assistance is a mortgage and would be registered on the NFHS property. The mortgage will be the security for the City's investment in the facility. Should the NFHS be unable to carryon its contractual duty to the City, the City can claim for any residual amount of the unexpired mortgage term. The mortgage is forgivable overfive years and would not include interest. Each year, 20% of the mortgage is forgiven, so that at the end of the five-year period, the entire amount is forgiven and the mortgage is released. The annual amount forgiven of approximately $35,800 would be drawn from the City's Special Purpose Reserves and would not impact the General Purposes budget. LIST OF ATTACHMENTS July 29, 2009 letter from Niagara Falls Humane Society Table 2 from Bandow Report, Capital Budget for construction and equipment of a municipally operated Animal Centre Niagara Falls Humane Society, Financial Statements, December 31, 2008 December 14, 2009 - 3 - CPS-2009-013 Recommended by: Approved by: ~~~;~~ Dean Iorfida, City Clerk K. E. Burden, Executive Director, Corporate Services Respectfully submitted: Ken Todd, Chief Administrative Officer V:\2009COUNCIL\20D9 12 14\CPS-2009-13 Niagaza Falls Humane SocieTy.wpd Nlt~. FPLLa CLERKS't~ f ~'~ Fi025 Chippawa Parkway, Niagara Fails, Ontario L2E 6X8 Telephone {905) 356-4404 Fax (905) 356-7652 incorporated April 8, 1937 Dean lorfida, City.Clerk City of Niagara Falls 4310 Queen Street Niagara Falls ON I.2E 6X5 Dear Dean: July 29, 2009 This letter is to confirm that The Board of Directors of the Niagara Falls Humane Society has passed a motion to request afive-year #orgivable mortgage agreement from the City of Niagara Fails in the amount of $179,032.18. The above amount will be used by the Niagara Falls Humane Society for the financing of the sh.e(fer improvements. Thank you for your time in regards to this request- Yours truly, ~~~~ Jay DesRoches Executive Director Niagara Fails Humane Society "WE SPEAK FOR THOSE WNO CANNQT SPEAK FOR THEMSELVES" www. rrisgarafaAshumanesociery. com Prolecl Remr1 o(the 2007 Service Review of The C!N ofNio¢ara Falls. OntariaAnimal Care & Coatrof Services (CiN ofNra¢ara Falls, ON. File No. #1949-93) by Jmnes H. Rardaw & Auoeiales Table #2 CapiNai Badget for coftstruetion and equips6leret c€f a mun-scipa[Et~ operated Niagara Falls Anifttai Centre This fatiig contains our pmjeded Capital Budget for construction of a City W Niagara Fatts Munikapa! Animal Centre. Square footage Costs have been projected ijy an architect experienced in shelter design. Tfiis ces! estimate does not inducts the cost of land, or permiLS. Mimal Holding Areas 2,516 sq. ft (a~ $265 666780 Enforcement Space 256 sq. ft. ~ $225 57600 Ancillary Space 3,211 sq. ft ~ $225 722475 hfalllways 1,196 sq. ft. ~ $225 269100 HVAC System 18 Air Changeslhr. + Heat recovery Included Archeled Fee ('9) 110000 Contingency (`10) Included SUB-TOTAL 57,825,815 Dog Kennels 40 @ $3,000 (*11) inducted Cat Caging (Rader) 14 ~ $3,650 ("12) 53900 Securely (*13) ~ 8000 ff Requirements ("14y 8000 Pressure Washer 1 Q $2,600 2600 Service Carts 2 ~ $250 ('15) 500 Freezer (Upright) 1 (a1 $4,000 4000 Veterinary Technical Supplies Microscope 1 @ $200 Clippers 1 ~ $100 Slides, scopes etc... $700 1000 Treatment Table 2 @ $1000 .2000 Appliances (Fridge/Compad Fddge) 1 ~ $750 / 1 ~ $250 1000 Bowls & Litter Trays 150 ~ $15 ('16) 2250 Office FumelurelLodkers etc. Lockers -16 Q $100 = 1,600 Office Furniture-2 ~ $2,500 = $5,000 Workstatrons - 5 ~ $1,01)0 = $5,000 Interview Room Tables - 2 Q $370 = $740 Lunch room Table -1 @ $370 = $740 Tadk Chats-16 ~ $200 =$3,200 GuestChairs - 30 @ $150 = $4,500 Lunch Room Chairs -10 k@ $70 = $700 CoMingenq (Fa inddenfal additions that may have been - mused) - $5,000 26480 Signage 5000 Sound Baffling 3000 Page 138 t'r~ct Resort oflhe 2007 Service Review of the CtN afNi~ara Falls. Oerario Aaimal Care &Control Services Ci! ofNiapara Falls, ON. File No. #1999-931 bvJames H Baadow & Associates Washers snd Dryers 1 Washer and t Dryer ~ $750.00 1500 t=anang (*77) 7500 SUB TOTAL 5120,730 GRAND TOTAL 51,946,645 F~cplanaiory Notes: (*8) Percentage of heat recovered 5+nll lie dependant upon the unit selected'm consultation with mechanipl engineers. (*9) We used a rate of 6.4% which would seem appropriate for a building of this projected cost, but may need to be adjusted. (*10) We used a contingency of 10°k. (*11) See Introductory Comment for Table #1 (*12) See Introductory Comment for Table #1 (*13) This includes prd access readers to limit access to the building to staff outside of public hours which has proven to work more effectively than keys. N limits time of access, records access and can quiddyderryaccesswhen anempbyee (eaves your employ. Add'rtionaly, readers are located to preverd public access to lunch and locker rooms for staff security, treahnentieuthanasia room for severity of thugs, to prevent access to dog and cat isolation rooms to limit disease transmission to the rest of the building and to reduce IiabrTity where the.public may be bitten tiyanimals under rabies observation. Addifionaly, motion detectors maybe requ0ed in areas where animals aze separated from the detectors by slid a glass wafts. As well, door and window comacts will be required. Video cameras in the dog acrd cat areas and a quad monitor in the receiving area may be required to provide security do the rooms without staff corrstantly having to escort viewers. Further, the costs would provide for the installation of a public address system which is very useful to communicate with staff, (*14) We only included an estimate to have a junction box kxated in the facility, network cable to the various computer work station locations (now is the time to locate where there may be need for additional drops in tire future). and a fiber connection to your network. (*15) These are usualy Rubber Maid carts with an upper and lower streff and used to move lifter trays, food etc, about the Taciliy_ (*16) We have found that it is much dteaper and the product beUer, if stainless steel serving bowls are used for food amt water, and chaffing dishes are used as fdter trays. These are available through restaurant soppy houses. Note that cat feeding and water bowls are included in the cost for cat racks. (*17) Fendng is only recommended in areas where security is required - primariy near staff parking and vehicle access fo the unloading bay. We are opposed to fenang around the entire exterior of an animal shelter, especialy around the front, as this presents a very negative animal jaiP image oFthe facllity and its operafion_ Page 139 Crawford smith (,~, swallow NIAGARA FALLS HUMANE SOCIETY Financial Statements December 31, 2008 Crawford smrth(,gZ swallow NIAGARA FALLS HUMANE SOCIETY Financial Statements December 31, 2008 Table of Contents Page Auditors' Report Balance Sheet Statement of Changes in Net Assets 3 Statement of Operations 4 Statement of Cash Flows 5 Notes to Financial Statements 6-9 Schedule to Statement of Operations 10 Gawlortl, Smith antl Swallow craWford Chartered Accountants LLP 6141 Oueen Street smith ~ Niagara Falls, Ontario Te ephone (905) 356-6200 swallow Telecopier 1905) 356-3410 Offices irc Niagara Falls, Ontario SL Catharines, Ontario Fort Erie, Ontario Niagara-on-Ihe-Lake, Ontario Port Colborne, Ontario AUDITORS' REPORT To the Members of Niagara Falls Humane Society We have audited the balance sheet of Niagara Falls Humane Society as at December 31, 2008 and the statements of changes in net assets, operations and cash flows for the year then ended. These financial statements are the responsibility of the society's management. Our responsibility is to express an opinion on these financial statements based on our audit. Except as explained in the following paragraph, we conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In common with many charitable organizations, the society derives revenue from donations, the completeness of which is not susceptible of complete audit verification. Accordingly, our verification of this revenue was limited to accounting for the amounts recorded in the records of the society and we were not able to determine whether any adjustments might be necessary to donation revenue, excess of revenue over expenses and net assets. In our opinion, except for the effect of adjustments, if any, which we might have determined to be necessary had we been able to satisfy ourselves concerning the completeness of the revenue from donations referred to in the preceding paragraph, these financial statements present fairly, in all material respects, the financial position of the society as at December 31, 2008 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. ~,~ - ~ ~~ Niagara Falls, Ontario April 14, 2009 CRAWFORD, SMTI'H AND SWALLOW CHARTERED ACCOUNTANTS LLP LICENSED PUBLIC ACCOUNTANTS NIAGARA FALLS HUMANE SOCIETY BALANCE SHEET December 31, 2008 Assets 2[108 2007 $, $ Current Assets Cash 49x410 199,329 Marketable securities 154 053 Accounts receivable 44,844 14,821 Prepaid expenses 11 9`61 `' 14 150 1.06,323 382,353 Fixed Assets -note 2 652,457 512 824 7fi8,'78Q ' 895,177 Liabilities and Net Assets Current Liabilities Accounts payable and accrued liabilities -note 4 Deferred revenue -note 3 116,156 75,798 80,020 54 652 192,754 134,672 Net Assets 576.026. 760.505 '76,780 895,177 Signed on behalf of the Board: See accompanying notes Director Director crau~ord smith ~ swallow 2 NIAGARA FALLS HUMANE SOCIETY STATEMENT OF CHANGES IN NET ASSETS for the year ended December 31, 2008 Net Assets, Beginning of Year Excess (Deficiency) of Revenue over Expenses from 2b08 2007 $ $ 760,55 603,616 (181,474) "` 121,580 oc onn Net Assets, End of Year 57#;62G 760,505 See accompanying notes 3 Crawford smith C8Z swallow NIAGARA FALLS HUMANE SOCIETY STATEMENT OF OPERATIONS for the year ended December 31, 2008 20Q$ ;; , 2007 ~ $ Revenue Cit of Nia ara Fall f e f t 5 453 082 466 118 y g s- e or service - no e , Niagara Community Foundation grants -note 6 1,343.` ` 2,680 Donations and fund raising ! $3,406.' 79,565 Bequests 1,$&0. 68,913 Shelter -schedule 1 (170,$84'' 184,441 Sundry-schedule 1 25,123, 27,276 Ministry of Training, Colleges and Universities grant 749 Niagara College of Applied Arts and Technology grant 688 '...736,406 ! 829,742 Expenses Amortization 45;638'' 34,880 Bad debts 1$,981'.' 11,057 Bank and interest charges 5,170: 3,472 Canada Pension 1T,742: ` 15,667 Education X69 ' 1,162 Employment lnsurance 8,;955: 8,653 Group insurance 32,4©6: 29,779 lnsurance 19,26'T' ' 20,348 Miscellaneous 4,70T 1,798 Professional fees and purchased services 15>3fJ1 14,110 Provision for lawsuit 26,250 Shelter -schedule 1 272,368:- 162,250 Vehicle 18,476 13,884 Wages 424,'774 379,663 Workplace Safety and lnsurance Board 10,481.:.. 11,439 920,$85 708 162 Excess (Deficiency) of Revenue over Expenses (1$4,479}; 121,580 See accompanying notes 4 crawforrl smith C8Z swallow NIAGARA FALLS HUMANE SOCIETY STATEMENT OF CASH FLOWS for the year ended December 31, 2008 2T108 ' 2007 $ $ Operating Activities Excess (deficiency) of revenue over expenses (184,479''' _____ 121,580 Amortization 45;63 ': - 34,880 boss on disposal of fixed assets 1,183 i Working capital provided (used) by operations {137,658)' , 156,460 Changes in non-cash working capital components Marketable securities jS4,053 _ _ (154,053) Accounts receivable '(3D,123); _. __ (3,837) Prepaid expenses 2.,1'8:1 '< 1,525 Accounts payable and accrued liabilities 36;93~Z 19,226 Deferred revenue 2'1.,1,46 := (5,950) '181,1"93 (143,089) Funds provided by operating activities 46,36 13,371 Investing Activities Purchase of fixed assets (196,454) , (50,892) Decrease in Cash Position (149,919),, (37,521) Cash Position, Beginning of Year 199,329 236,850 Cash Position, End of Year 49;41; 199,329 See accompanying notes 5 Crawford smith C~, swallow NIAGARA FALLS HUMANE SOCIETY NOTES TO FINANCIAL STATEMENTS for the year ended December 31, 2008 Organization Niagaza Falls Humane Society provides humane, animal control, boarding and crematorium services in the City of Niagara Falls. Niagara Falls Humane Society is a registered charity and, accordingly, exempt from income taxes. 1. Significant Accounting Policies The financial statements of the Society are the representations of management prepared in accordance with Canadian generally accepted accounting principles, consistently applied. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of periodic financial statements necessarily involves the use of estimates and approximations. These have been made using careful judgement in the light of available information. The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized below: Revenue recognition Restricted contributions are recognized as revenue in the yeaz in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when received. Financial instruments The Society has elected the following balance sheet classifications with respect to its financial assets and financial liabilities: Cash and marketable securities are classified as "assets held-for-trading" and are measured at fair value. Accounts receivable are classified as "loans and receivables" and are measured at amortized cost, which, upon initial recognition, is considered equivalent to fair value. Accounts payable and accrued liabilities are classified as "other financial liabilities" and are initially measured at fair value. Fixed assets and depreciation Fixed assets are recorded at cost. Expenditures for maintenance and repairs are charged to operating expenses. Depreciation is calculated using rates designed to amortize the cost of fixed assets over their useful lives as follows: Building Furniture and equipment Computer equipment Vehicles - 40 years, straight line - 10 years, straight line - 3 years, straight line - 3 years, straight line 6 crawforti smith C,~ swallow NIAGARA FALLS HUMANE SOCIETY NOTES TO FINANCIAL STATEMENTS for the year ended December 31, 2008 1. Significant Accounting Policies -continued Fixed assets and depreciation -continued Additions during the year are depreciated from the month of acquisition. Disposals are depreciated until the month of disposition. Gains or losses on assets sold or otherwise disposed of are included in the statement of operations. Gifts-in-kind Gifts-in-kind are recognized when the fair value can be reasonably estimated, the materials are used in the normal course of operations and the organization would have purchased the materials or services if they had not been contributed. 2. Fixed Assets Land Building Furniture and equipment Computer equipment 22,2$4: 1A,160 96,142 fi8,4'I6• ':2008 2007 $ $ 84,666; 80,666 495,298' 378,204 50~703> 4,883 8,1?.4? 4,871 f,15~,64~ 49~;185 b62;45'~ _ 512,824 7 crawfom' smith ~, swallow NIAGARA FALLS HUMANE SOCIETY NOTES TO FINANCIAL STATEMENTS for the year ended December 31, 2008 3. Deferred Revenue 2008 2007 Balance, beginning of year 54,652:' 60,602 Contributions: Bequeaths 27,000 :' Capital Campaign 253 Computer equipment 1,000: 1,322 Amortization '? (6,8§4); (7,525) Balance, End of Year ' 75,TJ8 54,652 The balance consists of the following accounts: -2008 2007 $ $ Bequeaths 27,000: Capital Campaign 38;54'- 45,117 Computer equipment 1,242'. 573 Investigation 80 '' ' 80 Puppy Playground 1,169 1,169 Spay and Neuter .7,713....: 7,713 `75,798' 54,652 4. Contingent Liability During 2008 an employee left the Humane Society. The employee has made a claim against the Society for $ 85,000. The Society has provided for an estimated loss of $ 26,250. The cost of the settlement in excess of $ 26,250, if any, will be expensed in the year of settlement. 5. Economic Dependence The Niagara Falls Humane Society's operations consist of providing humane, animal control, boarding and crematorium services in the City of Niagara Falls. The contract with the City of Niagara Falls to receive financing for animal control accounts for 62% of funding in the current year. 6. Permanent Endowment During 2005, the Society transferred $50,000 to the Niagara Falls Humane Society Shelter Enhancement Fund held by the Niagara Community Foundation. During the year, the Society received $ 1,343 from the Fund. 8 Crawford smith CLL swallow NIAGARA FALLS HUMANE SOCIETY NOTES TO FINANCIAL STATEMENTS for the year ended December 31, 2008 7. Gifts-in-Kind Gifts-in-kind recognized in the financial statements include $ 1,000 of computer equipment. 8. Comparative Amounts The 2007 figures, presented for comparison purposes only, have been restated to conform with the current year's basis. 9 crawfortl smith C& swallow NIAGARA FALLS HUMANE SOCIETY Schedule 1 SCHEDULE TO STATEMENT OF OPERATIONS for the year ended December 31, 2008 2n0$ 2007 $_ $ Shelter Revenue Boarding fees 31,541 45,038 Cremations [ 2$,534 28,198 Humane work 17,626:. ' 20,467 Pound fees 5,84 5,890 Sale of animals 62,647 53,427 Sale of dog licences 24,732 ' 31,421 17tl,8$~ 184,441 Sundry Revenue Interest 8,291 __ 6,996 Memberships 480 160 Miscellaneous 16,352 '- 20,120 j 2,5~1~~ 27,276 Shelter Expenses Cremation services 14,303. 17,631 Food 4;630 3,729 Light, heat and water 2$,6x12 31,991 Municipal taxes 6,125'.- 6,097 Office and sundry 35,933'. 20,692 Repairs, maintenance and cleaning 66,559= 23,448 Telephone 10,381 9,346 Veterinarians' fees 105,795 49,316 72~,3b$ 162,250 See accompanying notes 10 Crawford smith C~. swallow Y ADDITIONS TO COUNCIL. MONDAY. DECEMBER 14. 2009 CORPORATE SERVICES 1. CPS-2009-012 -General Insurance Program 2010 2. CPS - 2009-013 -Niagara Falls Humane Society COUNCIL PLANNING MATTERS 1. PD-2009-100 - AM-2009-022, 4901 and 4907 Ontario Avenue. Proposed Cottage Rental Dwellings a) Correspondence from Vijay Kapur COMMUNICATIONS 1. Taps Brewery -request for closure of the City-owned right of the way. -and- Memo from Bob Bolibruck RECOMMENDATION: For the approval of Council subject to proper insurance and passing of the by-law 2009-200 later on the agenda. BY-LAWS Additional By-laws 1. 2009-198 A by-law to hereby authorize the Mayor and Chief Administrative Officer to executethe CommunityAdjustment Fund ("CAF")Agreement between Her Majesty the Queen in right of Canada ("Her Majesty"), as represented by the Minister of Industry (the "Minister"), and the Corporation of the City of Niagara Falls (the "Recipient"). 2. 2009-199 A by-law to amend By-law No. 2002-081, being a by-law to appoint City employees, agents and third parties for the enforcement of provincial or municipal by-laws. 3. 2009-200 A by-law to temporarily remove the public right of passage over a highway. NiagarafaIls CANAAA CPS-2009-012 December 14, 2009 REPORT TO: Councillor Victor Pietrangelo, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario SUBMITTED BY: Corporate Services SUBJECT: CPS-2009-012 General Insurance Program 2010 RECOMMENDATION 1) That Council authorize staff to designate Frank Cowan Company Limited as the preferred proponent for the General Insurance Program for the City of Niagara Falls, and the Niagara Falls Library Board, 2) That staff negotiate with the preferred proponent, as per the Request for Proposal (RFP), to conclude the terms of a one year contract for the General Insurance Program at an upset limit of $1,385,407. plus applicable taxes, composed of: City $ 1,341,158. As per proposal, Library $ 42,749. As per proposal, plus Library $ 1,500. Fora $5,000,000 increase in Limit of Liability 3) That the proposed 2010 General Insurance Program be subject to annual renewal based on satisfactory performance and Council approval, 4) That staff investigate alternative insurance programs that would reduce the overall costs to the City for insurance premiums, risk management, and claims handling to be incorporated into a revised Request for Proposal, commenced during the next Council term. EXECUTIVE SUMMARY Three insurance brokerage companies responded to a Requestfor Proposals forthe City's General Insurance Program. The proposals were evaluated by staff and the City's Consultant, RiskPro Consulting. The preferred proponent is Frank Cowan Company Ltd. The new General Insurance Program should be authorized by Council in order to provide insurance policies to be effective January 1, 2010. Upon authorization, staff will finalize the program coverages and costs. BACKGROUND For several years, the City has purchased its General Insurance Program from the Frank Cowan Company, an insurance brokerage firm. In September 2009, a local insurance brokerage firm met with staff to inquire on bidding for the City's insurance requirements. December 14, 2009 - 2 - CPS-2009-012 Since the annual insurance renewals had occurred for some time, staff undertook to prepare and issue a Request for Proposal (RFP). The request also included the Niagara Falls Library Board, which is separately serviced by the City's insurance broker. Staff engaged risk management services from RiskPro Consulting. RiskPro provided the expertise and experiencetodeveloptheRFPfortheGenerallnsuranceProgram. RiskPro also provided analytical expertise for the evaluation of the proposals. The RFP generated four responses; one of which remitted a letter advising that they would not be able to submit a proposal by the due date. A second proponent submitted an incomplete proposal which was disqualified from furtherconsideration. The remaining two proponents submitted qualifying proposals, however, only one proponent maintained the RFP's prescribed general liability insurance deductible. Staff evaluated the two proposals in accordance with the criteria provided in the RFP. A preferred proponent was selected based on the highest score per the criteria. ANALYSISIRATIONALE RiskPro Consulting has provided a more detailed analysis and rationale in their Summary Overview, which is attached. The Frank Cowan Company Ltd. (Cowan) is recommended as the preferred proponent for the City's General Insurance Program. The recommendation resulted from Staff's evaluation of the proposals in accordance with the criteria provided in the RFP. This preferred proponent was selected based on the highest score per the criteria. The Cowan proposal contains all of the City's and Library's insurance requirements in accordance with the RFP. Attached is a listing of the insurance program highlights. Cowan is a proven insurance broker with 80 years of municipal experience, providing insurance and risk management services to over 170 Ontario municipalities. Cowan is appropriately licenced and in good standing to operate as an insurance broker. Cowan provides extensive risk management services in designing and implementing strategies to control risk. Services include training, bench-marking, contractual and claims reviews, risk inspections, policy and procedural audits, educational seminars and publications. Cowan also provides in-house claims handling by their professional claims management staff. The Verge Insurance Group, in conjunction with Jardine Lloyd Thompson Canada Ltd.(JLT), provided a qualifying proposal. Verge Insurance is a Niagara regional brokerwith 22 years of corporate and institutional experience. JLT is a leading public sector insurance broker with over 35 years of municipal experience across Canada. Both Verge and JLT are appropriately licenced and in good standing to operate as insurance brokers. The Verge proposal document stated that it was to be considered with JLT's Business Protocols booklet, which was not included in the submission. The proposal did not include costing for the RFP specified deductible for General Liability insurance. The proposal's lesser cost was due in part to the higher deductible. The proposal also stated several 'subject to' clauses, assumptions, requirements and exceptions in order to clarify the insurer's knowledge of the City's risks. All or any of these would potentially impact the premiums for the insurance coverages. The proposal offered JLT's extensive risk management and claims handling services. Specific enhancements included an I-Drive defensive driving program and specialty software for tracking and managing claims. December 14, 2009 - 3 - CPS-2009-012 BFL Canada Risk and Insurance Services submitted a proposal which was disqualified from further consideration. The proposal lacked the mandatory requirements of the RFP. By accepting the Cowan proposal the City and Library will continue an established relationship without incurring transitional steps and perhaps unanticipated costs. The Cowan proposal maintains the known services that City and Library staff have relied upon for risk management and claims handling. The Cowan proposal best matches the RFP specifications; the broadly worded coverages provide unparalleled security for the high liability exposure in municipal insurance. FINANCIAL IMPLICATIONS The Frank Cowan Company Ltd. has proposed a total cost of $1,385,407 (plus applicable taxes) forthe 2010 City's and Library's General Insurance Program. In comparison to the 2009 insurance costs, the new program will cost 19.7% or $227,960 more. Attached are the summaries of coverages and costs analysis with a 2009 comparative for both the City and Library. The 2010 cost includes $1,500. for an increase of $5,000,000 for the Library's Limit of Liability. This increase will match the City's $20,000,000 Limit of Liability and is recommended by Staff. Attached is a listing of Cowan's program options. Verge and JLT provided an insurance program proposal at significantly less cost. The program featured a different approach to the management of insurable risks by offering insurance products and deductibles that differed greatly from the City's current insurance program.. For example, a higher limit of liability would be achieved by using a primary insurance policy for one risk and an umbrella policy for combined risks, rather than using a primary policy for each risk. An increased deductible was also proposed to significantly reduce the premium costs. The City's consultant, RiskPro, advised that due to its many differences, the Verge and JLT insurance program requires considerable study and analysis. The program would impact the City's claims management process, claims adjuster and legal costs, and its self-insured claims payments. RiskPro also advised that the proposed program is a new product in the market place, which has notyet proven its comparabilityto established municipal insurance programs. Attached is the RiskPro Summary Overview for the City of Niagara Falls 2010 Insurance Review. Council may wish to direct staff to examine options for a future insurance RFP, securing the required expertise to report to Council on the merits of differing approaches to the City's insurance and risk management requirements. CITY'S STRATEGIC COMMITMENT Continue to monitor and improve the efficiency of the organization is one of Council's strategic priorities for the 2007-10 term. Part of Staff's attention to this priority is the review of the City's General Insurance Program. Since the City's insurance program has been renewed annuallyfor several years withoutgong to the market, Staff undertookto prepare and issue a Request for Proposal to the insurance market. December 14, 2009 -4 - CPS-2009-012 The response to that RFP indicates that there may be opportunities to lower the overall cost of the City's insurance/risk management program. However, more research and analysis would be required to provide Council with a meaningful analysis of the comparative merits of alternative insurance programs. LIST OF ATTACHMENTS • RiskPro Summary Overview • Frank Cowan Company insurance program excerpts: • Program Highlights • Program Summary -City • Program Summary -Library • Program Options • Cost Analysis -City • Cost Analysis -Library Approved by: ~C~C/ ~~~ci K. E. Burden, Executive Director, Corporate Services Recommended by: G` Ed Dujlovic, Executive Director, Community Services Respectfully submitted: Ken T dd, Chief Administrative Officer W rifer of the Report H:IWPDFiles\Reports\CPS-2009-12 General Insurance Program 2010.wpd City ofNiagara Falls-20101nsurance Review Summary Overview RiskPro was retained to provide consulting assistance in the review, analysis and evaluation of the submissions received in response to the City of Niagara Falls' Request for Proposal concerning the General Insurance and Risk Management Program for its 2010 renewal. Three submissions were received and provided for our review, as follows: 1. Frank Cowan Company Limited (Cowan), along with First Niagara Insurance Brokers Inc.; 2. The Verge Insurance Group through Jardine Lloyd Thompson Canada Inc. (JLT); and 3. BFL Canada Risk and Insurance Services Inc. (BFL). We further understand that Aon Insurance Brokers had also sent the City a letter of regret citing not enough time, information and details were provided. Upon receipt of this assignment and following a comprehensive review and analysis of the proposal submissions and participating in consensus scoring among the evaluation committee members, RiskPro is pleased to offer you this summary overview and recommendation. Mr. Ken Beaman, City Solicitor, advised the evaluation team that the BFL submission would not be considered as it did not meet mandatory RFP requirements-most notably, policy wordings were not submitted with their proposal. Please refer to Exhibit I, Insurance Proposal Evaluation and Summary Rating for the team's consensus rating, along with the section of this report entitled, "Submission Ratings" which highlights features of each submission. We have also included our rating guidelines for your reference. RiskPra 11/09 Page 1 of9 City ofNiagara FalLs~-20101nsurance Review From this summary, you can see that Cowan scored a total of 81 points; while JLT earned a total of 51 points. The JLT submission did not include an annual premium at the existing $50,000 deductible required in the RFP specifications for both the General Liability and Errors and Omissions coverage. JLT did offer considerable cost savings for the City to consider at a $100,000 deductible level. Unfortunately, by choosing not to provide the City with the cost at the existing and requested deductible level, the committee agreed that it would be impossible to evaluate their submission in terms of Annual Premium alone, as a number of other cost considerations would also need to be investigated and researched to make meaningful comparisons. If you refer to the Insurance Proposal Cost Comparison in Exhibit II, you will find a chart illustrating the annual premiums quoted for each submission, along with our notes identifying some of the areas where additional costs or savings may apply. Again, we should point out that it was very difficult to compare these two submissions due to the different deductible levels quoted. Since JLT did not provide a quote at the requested $50,000 deductible level for liability coverages, they scored zero points under the Annual Cost criterion, however received the fu115 points available under Added Value for the substantial savings at the $100,000 deductible level. It was unfortunate that the City did not receive complete proposals from all known traditional insurance markets in Ontario offering public entity programs, and further that JLT did not provide a quotation at the requested deductible level. In the section of our report entitled, "Key Issues/Significant Program Differences", we discuss specific or significant differences or aspects of coverage between the various programs that we feel are important to fully understand the financial implications for the City. Finally, we have provided a detailed (though not exhaustive) listing of the major aspects and noted differences of coverage between the programs. Please refer to the section of this report entitled, "Program Comparison" to review these further. RiskPro 11/09 Page 2 of9 City of Niagara Falls-20101nsurance Review We trust that the information contained in our report provides staff and the Committee with enough information to make an informed decision concerning the placement of the City's General Insurance and Risk Management Program for its 2010 renewal. We would be pleased to assist you, should you require anything further in this regard. Our recommendation follows in the next section. Recommendation Due to the fact that Cowan's overall rating was highest; their submission best meets the City of Niagara Falls' criteria as outlined in the RFP; provides broadly worded insurance policies; offers high service levels; and has a reputable team of insurers, we recommend that the City consider acceptance of the proposal submitted by the Frank Cowan Company Limited, along with First Niagara Insurance Brokers Inc. for both the City's and Library's 2010 renewal programs. Our recommendation is contingent upon the following: 1. Fully utilizing the services-risk management, claims management, and insurance administration provided by Cowan that are within the base premium and identified throughout their proposal submission. 2. Meeting with the appropriate representatives of the Frank Cowan Company and First Niagara Insurance Brokers to implement the proposed Risk Management and Claims Management plans to the City's satisfaction. 3. Consideration is given to increasing both the City's and Library's limit of liability to $25 million for an additional annual premium of $24,634. At a minimum, we highly recommend that both the City and Library maintain similar limits of liability; thus if the City decides to maintain its existing liability limits of $20 million, we suggest the RiskPro 11/09 Page 3 of 9 City of Niagara Falls-2010Insurance Review Library increase theirs to the same level for an additional annual premium of $1,500. Please refer to Program Options on page 29 of the Cowan submission for more detail; and page 28, which highlights the importance of adequate liability limits. 4. Other program options aze listed on page 29 of the Cowan submission for your consideration. By renewing the City and Library programs with Cowan for the 2010 policy term, the City will also benefit from the following: ^ little or no transitional costs or issues; ^ a known and established relationship with the provision of known services; ^ the security and value in maintaining broadly worded coverage; and • the trust, comfort and security in a market that knows the City of Niagara Falls and one that has extensive experience and expertise with numerous municipalities in Ontario of similar size and risk. Please note that the Cowan proposal is only open for acceptance until December 315r 2009. We respectfully suggest (and we know that this simply was not available this year) that when the City issues its next RFP for General Insurance and Risk Management Program that additional time is allotted to prepare the specifications; to give the proponents sufficient time to respond; and finally allow more time for your evaluation team to conduct additional analysis and research, if necessary, to fully investigate innovative approaches and solutions that may be presented for the City's consideration. We further recommend that you continue to monitor the mazket and test it formally over a reasonable period of time (every three to five years, depending on market conditions) and to conduct periodic benchmazking with respect to coverage and limits. RiskPro 11/09 Page 4 of9 City ofNiagara Falls-2010Insurance Review We trust that the information contained in our report provides staff and the Committee with enough information to make an informed decision concerning the City ofNiagara Fa11s' General Insurance and Risk Management Program for its 2010 renewal. We would be pleased to assist you, should you have any questions or require anything further in this regard. RiskPro 11/09 Page 5 of9 City of Niagara Falls-2010Insurance Review Exhibit I Please note that the following represents the Evaluation Team's Consensus scoring of each Proponent. Insurance Proposal Evaluation and Summary Ratine Criteria/Rating COWAN JLT System 1. Product 30 points Meetin RFP S ecs-5 5 p Scope of Coverage - 15 13 g Enhancements and Value Added Services -10 0 7 2. Services-20 points Insurance Administration - 2 2 2 Risk Management Services - 8 ( ~ Claims Management Services - 10 g g 3. Qualifications - 20 points Proponent Experience -~ 7 6 Team Ex ertise - 7 7 5 Financial Stability of Insurers - 6 6 6 4. Price - 30 points Annual Cost-25 25 0 Added Value - 5 2 5 TOTAL -100 81 51 RiskPro 11/09 Page 6of9 City ofNiagara Falls-2010Insurance Revrew Notes• For purposes of this chart: ^ COWAN represents the proposal submitted by Frank Cowan Company Limited, along with First Niagara Insurance Brokers Inc. ^ JLT represents the proposal submitted by The Verge Insurance Group through Jardine Lloyd Thompson Canada Inc. 2. The rating categories and weightings were selected by City staff and disclosed in the RFP specifications. 3. The score for each proposal under each category represents a numerical value based on the consensus of the Evaluation team and the following rating key, after reviewing the qualified proponents' submissions. Ratin¢ Key The maximum available for the Services and Qualifications criteria is 20 points each; while 30 points are available for both the Product and Price criteria. 2. The Product category is divided into three sections. Meeting RFP Specifications (5 points), Scope of Coverage (15 points) and Enhancements and Value Added Services worth a total of 10 points. If a proponent's submission meets all of the RFP specifications, full points will be awarded for that section. The Scope of .Coverage section is rated on completeness and superiority of the wordings compared with other proponents and additional points can be achieved under Enhancements and Value Added Services for additional or enhanced coverages or services provided. 3. To obtain perfect scores under the Services criterion, the proponent must demonstrate the ability to provide all the services identified in the specifications and further detail what level of service would be provided and how. 4. To obtain a perfect score under Qualifications, the proponent must demonstrate that it has the required experience, expertise, and available resources, along with using insurers that are financially sound and licensed to transact business in Ontario. Financial Stability also includes the individual proponent's perceived ability to negotiate future markets should their existing markets disappear. 5. The Annual Cost criterion is rated by providing a perfect score of 25 points to the proponent with the lowest premium quotation. The remaining bidders are awarded points in correlation to the percentage difference between their proposal cost and that of the lowest bidder. For example, if one bidder had a proposal cost that was 50% higher than the lowest bidder, they would lose half of the points (i.e. 13 points out of the 25 available here). RiskPro 11/09 Page 7 of 9 City ofNiagara Falls-20101nsurance Review 6. The Added Value section of Price takes into consideration any additional services, innovations or other factors provided by the proponent at no additional cost, which would otherwise equate to potential additional costs to the City. 7. The Total represents the sum of all points awarded under each category. Note: the maximum number of points available, based on the evaluation criteria, is a total of 100. RiskPro !1/09 Page 8 of9 Cidy ofNiagara Falls-2010 insurance Review Exhibit II Insurance Proposal Cost Comparison Annual Premium Annual Premium Submission (Liability Policies at (Liability policies at $50,000 Deductible) $100,000 Deductible) COWA N $1,383,907. Not provided JLT No Quote $670,130. Notes: For purposes of this chart: ^ COWAN represents the proposal submitted by the Frank Cowan Company Limited, along with First Niagara Insurance Brokers Inc. ^ JLT represents the proposal submitted by The Verge Insurance Group through Jardine Lloyd Thompson Canada Inc. 2. The Annual Premiums shown are net of any applicable taxes and include all brokers' fees and commissions, if applicable. 3. The Annual Premiums shown include all required risk management services, with the exception of: - JLT's premium excludes property valuations of heritage buildings. 4. It is important to note that JLT's annual premium may not be firm as the program quoted is subject to a number of assumptions and requirements. Should any of those assumptions be incorrect or if any of the requirements are not met to the underwriters' satisfaction, the City may be facing additional premiums. 5. JLT quoted Liability limits of $25 million applicable to both the City and the Library under the various policies; while Cowan quoted as per the specifications of $20 million for the City and $ I S million for the Library. (Having said that, some aggregate limits also apply to JLT's program that do not apply to the Cowan program.) 6. Overall program differences may result in additional costs. Please refer to the following sections of this report, which highlights the major differences. RiskPro !!/09 Page 9 of 9 Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal SERVICE REQUIREMENTS Program Highlights We have outlined below specific highlights of the comprehensive Cowan Program to assist you when comparing Insurance suppliers. • Abuse included, full policy limits available with no aggregate limit. • Professional Liability included, coverage for bodily injury, property damage, and financial loss. • Medical Malpractice included, not limited to incidental. • Products Liability included. • Blanket Property of Every Description, replacement cost, no co-insurance or margin clauses. • Replacement cost (new for old) on vehicles, as per schedules. • Municipal Liability Limits of $ 20,000,000. each and every occurrence, no aggregates. • Errors and Omissions Liability Limits of $ 20,000,000. each and every occurrence. • Non-Owned Automobile Limits of $ 20,000,000. each and every occurrence. • Automobile Fleet Limits of $ 20,000,000. each and every occurrence. • Environmental Liability includes Watercraft, Sold Property and closed Landfill Sites. • Crime Insurance includes Broad Definition of Insured and does not have a Deductible. • Worldwide cover on Municipal Liability. Frank Cowan Company -6- Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OFCOVERAGES -CITY LIMITS/AMOUNTS Municipal Liability Limit of Protection per occurrence $ 20,000,000. (No Annual Aggregate Limit) Third Party Claims Deductible including expenses $ 50,000. Sewer Backup per Claimant Deductible including expenses $ 50,000. Wrongful Distnissal (legal expense) Limit per claim $ 250,000. Annual Aggregate Limit $ 250,000. Deductible $ 5,000. Malpractice Liability Included Errors and Omissions (Claims Made Fotm) Limit of Protection per claim $ 20,000,000. (No Annual Aggregate Limit) Deductible including expenses $ 50,000. Non-Owned Automobile Limit of Protection per occurrence $ 20,000,000. (No Annual Aggregate Limit) Legal Liability for Non-Owned Vehicles (S.E.F. No. 94) All Perils Physical Damage Limit $ 250,000. Deductible $ 500. Environmental Liability (Claims Made Form) Liability of Protection per claim $ 3,000,000. Annual Aggregate Limit $ 4,000,000. Self-Insured Retention $ 50,000. Comprehensive Come Commercial Blanket Bond $ 1,000,000. Money Orders and Counterfeit Paper Currency Included Depositors' Forgery Included Audit Expense $ 100,000. Money and Securities -Blanket any Location $ 100,000. Excess on Securities $ 100,000. Computer Fraud or Funds Transfer Fraud $ 200,000. Frank Cowan Company -20- Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OF COVERAGES -CITY LIMTfS/AMOUNTS Councillors' Accident -Mayor and Eight Members of Council Accidental Death & Dismemberment (No Annual Aggregate Limit and No Deductible) Weekly Income -Total Disability Weekly Income -Partial Disability Municipal Conflict of Interest Percentage of Legal Fees and Expenses Maximum Limit of Reimbursement per claim (No Annual Aggregate Limit) Legal Expense Percentage of Legal Fees and Expenses Maximum Limit of Reimbursement per claim Annual Aggregate Limit RECREATION AFFII,IATES General Liability Each Occurrence Limit Products -Completed Operations Hazard Aggregate Limit Employers' Liability Limit Personal Injury Limit Tenants' Legal Liability Limit Deductible Non-Owned Automobile Limit of Protection per occurrence (No Annual Aggregate Limit) Legal Liability for Non-Owned Vehicles (S.E.F. No. 94) All Perils Physical Damage Lirnit Deductible $ 200,000. $ 500. $ 250. 100% $ 100,000. 100% $ 100,000. $ 250,000. $ 5,000,000. $ 5,000,000. $ 5,000,000. $ 5,000,000. $ 5,000,000. $ 1,000. $ 5,000,000. $ 100,000. $ 500. Frank Cowan Company _21_ ' Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OF COVERAGES -CITY LIMITS/AMOUNTS Property Insurance (including Data Processing Insurance) Total Sum Insured * $ 152,379,452. Valuable Papers $ 500,000. Accounts Receivable (other than Data Processing) $ 500,000. Extra Expense (other than Data Processing) $ 500,000. Business Intemtption Rent or Rental Value Form $ 500,000. Gross Revenue Form $ 3,868,345. Data Processing System and Equipment $ 2,701,800. Media $ 151,500. Extra Expense $ 108,400. Watercraft Floater $ 194,500. Fine Arts Form $ 258,600. Exhibition Floater As Per Lists Provided Deductible $ 10,000. Exceptions: Data Processing, Fine Arts Form and Exhihition Floater $ 2,500. -Museum Contents including Artifacts, Contents belonging to Niagara Falls $ 2,500. Professional and Educational Toy "FLASHY" All Library Buildings and Contents $ 5,000. *Note: Please refer to the insurance contract for an itemized list of assets containing specific limits of insurance or that are excluded from the policy. Frank Cowan Company -22- Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OF COVERAGES -CITY LIMITS/AMOUNTS Equipment Breakdown Limit per Accident -Comprehensive $ 50,000,000. Extra Expense $ 500,000. Spoilage-Goods under Refrigeration $ 50,000. Business Interruption -Loss of Profits (Gross Revenue): -Niagara Falls Memorial Arena, 5145 Centre Street, Niagara Falls, ON L2G 3P3 $ 319,800. - Stamford Memorial Arena, 6750 Federica Street, Niagara Falls, ON L2G 1C9 and $ 634,000. Jack Bell Arena, 6750 Frederica Street, Niagara Falls, ON L2G 1 C9 - Chippawa Willoughby Memorial Arena, 9000 Sodom Road, Niagara Falls, ON $ 207,500. L2E 6S6 -Municipal Swimting Pool, F.H. Leslie ParK, 5250 Valley Way, Niagara Falls, ON $ 28,000. L2E 657; Municipal Pool, Mitchelson Park, Dorchester Road, Niagara Falls, ON L2E 657; Swimming Pool at Prince Charles Park, 6230 Arad Street, Niagara Falls, ON L2G 2Z7; Office, Lunchroom and Maintenance Building, 4501 Stanley Avenue, Niagara Falls, ON L2E 6S7 - McBain Community Centre, 71560 Montrose Road, Niagara Falls, ON L2E 6S7 $ 42,000. - Ternunal-Garage-Office Building, 4320 Bridge Street, Niagara Falls, ON L2E 2R7 $ 2,637,045. And Bus Terminal, 4555 Erie Avenue, Niagara Falls, ON L2E 7G9 Expediting Expenses Included By-Law Cover Included Errors and Omissions $ 100,000. Hazardous Substance (including PCB Contamination) $ 500,000. Ammonia Contamination $ 500,000. Water Damage $ 500,000. Professional Fees $ 500,000. Data Restoration $ 25,000. Denial of Access 2 Weeks Deductible $ 10,000. Frank Cowan Company -23- Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OF COVERAGES -CITY LIMITS/AMOUNTS Automobile Fleet Liability Limit $ 20,000,000. Deductibles Section 3 (Third Party) $ 10,000. Section 6 (Direct Compensation) $ 10,000. All Perils $ 10,000. OPCF # 20 -Coverage for Transportation Replacement applies to: - 2004 Chev V enture and 1995 Dodge Ram Truck - Limit $ 10,000. per occurrence Automobile Fleet (Transit) Liability Limit $ 20,000,000. .Deductibles Section 3 (Third Party) $ 10,000. Section 6 (Direct Compensation) $ 10,000. Accident Benefits $ 10,000. Al] Perils $ 10,000. OPCF # 20 -Coverage for Transportation Replacement applies to: - 2002 Ford Chair-A-Van, 2001 Ford Handicap Van, 2003 Girardin Handicap Van, 2006 Corbeil Chair-A-Van and Two (2) 2006 Girardin Chair-A-Vans (S/N's A17818, A52286) -Limit $ 10,000. per occurrence Garage Automobile Third Party Liability Limit Customer Vehicles Collision Limit Deductible Comprehensive Limit Deductible $ 20,000,000. $ 500,000. $ 500. $ 2,000,000. $ 1,000. 2010 - 2011 PROPOSED ANNUAL PREMIUM -CITY 1 314 158 Frank Cowan Company -24- Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OFCOVERAGES -LIBRARY LIMITS/AMOUNTS General Liability Limit of Protection per occurrence $ 15,000,000. (No Annual Aggregate Limit) Third Party Claims Deductible including expenses $ 2,500. Sewer Backup per Claimant Deductible including expenses $ 2,500. Wrongful Dismissal (legal expense) Limit per claim $ 25Q000. Annual Aggregate Limit $ 250,000. Deductible $ 5,000. Errors and Omissions (Claims Made Form) Limit of Protection per claim $ 15,000,000. (No Annual Aggregate Limit) Deductible including expenses $ 2,500. Corporate Indemnification Coverage $ 2,500,000. Non-Owned Automobile Limit of Protection per occurrence $ 15,000,000. (No Annual Aggregate Limit) Legal Liability for Non-Owned Vehicles (S.E.F. No. 94) All Perils Physical Damage Limit $ 250,000. Deductible $ 500. Environmental Liability (Claims Made Form) Liability of Protection per claim $ 4,000,000. Annual Aggregate Limit $ 4,000,000: Self-Insured Retention $ 2,500. Comprehensive Crime Commercial Blanket Bond $ 1,000,000. Money Orders and Counterfeit Paper Currency Included Depositors' Forgery Included Audit Expense $ 100 000. Money and Securities -Blanket any Location $ 100,000. Frank Cowan Company -25- Corporation of the City of Niagara Falls 20]0 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OFCOVERAGES -LIBRARY LIMITS/AMOUNTS Councillors' Accident -Eight Board Members Accidental Death & Dismemberment $ 200,000. (No Annual Aggregate Limit and No Deductible) Weekly Income -Total Disability $ 500. Weekly Income -Partial Disability $ 250. Municipal Conflict of Interest Percentage of Legal Fees and Expenses 100% Maximum Limit of Reimbursement per claim $ 100,000. (No Annual Aggregate Limit) Legal Expense Percentage of Legal Fees and Expenses 1 Op% Maximum Limit of Reimbursement per claim $ 100,000. Annual Aggregate Limit $ 250,000. Property Insurance (including Data Processing Insurance) Total Sum Insured * $ 29,730,000. Valuable Papers $ 500,000. Accounts Receivable (other than Data Processing) $ 500,000. Extra Expense (other than Data Processing) $ 500,000. Business Interruption Rent or Rental Value Form $ 500,000. Data Processing System and Equipment $ 378,200. Media $ 16,500. Extra Expense $ 8,400. Fine Arts Form $ 258,600. Exhibition Floater As Per Lists Provided Deductible $ 5,000. Exceptions: Fine Arts Form and Exhibition Floater $ 2,500. *Note: Please refer to the insurance contract for an itemized list of assets containing specific limits of insurance or that are excluded from the policy. Frank Cowan Company -26- Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM SUMMARY SUMMARY OF COVERAGES -LIBRARY LIMIT S/AMOUNTS Equipment Breakdown Limit per Accident -Comprehensive $ 50,000,000. Extra Expense $ 500,000. Spoilage -Goods under Refrigeration $ 50,000. Expediting Expenses Included By-Law Cover Included Errors and Omissions $ 100,000. Hazardous Substance (including PCB Contamination) $ 500,000. Ammonia Contamination $ 500,000. Water Damage $ 500,000. Professional Fees $ 500,000. Data Restoration $ 25,000. Denial of Access 2 Weeks Deductible $ 2,500. Automobile Fleet Liability Limit $ 15,000,000. Deductible All Perils $ 1,000. Vehicle Insured: 2002 Chev Van S/N 150307 Replacement Cost 2010 - 2011 PROPOSED ANNUAL PREMIUM -LIBRARY $ 42,749. PLUS APPLICABLE TAXES NOTE: Value Added Risk Management Services are included in the total premiums. Frank Cowan Company _27_ Corporation of the City of Niagara Falls 2010 Municipal Insurance Proposal PROGRAM OPTIONS Options are available as outlined below. Please note that in addition to these options, you may also have other exposures that require or may beneft from specific insurance, forms, such as: marina liability, aviation liability, etc. Alternate deductibles and limits may also be available. 2. CRIME INSURANCE - THIItD PARTY BOND EXTENSION With respect to Crime Insurance, coverage may be extended to include a Third Party Bond Extension. Should this form of coverage be required, please advise us accordingly in order that we may provide you with a cost quotation. LIABII,ITY LIMITS (CITYI To increase the present limit of liability from $ 20,000,000. to $ 25,000,000. with respect to the Municipal Liability, Errors & Omissions, Non-Owned Automobile, Owned Automobile (City), Owned Automobile (Transit) and Garage Automobile policies would require an additional annual premium of $ 21,634. 3. LIABILITY LIMITS (PUBLIC LIBRARYI Consideration should be given to increasing the $ 15,000,000. Limit of Liability with respect to the General Liability, Errors & Omissions Liability, Non-Owned Automobile and Owned Automobile policies. We set out below the additional annual premiums required for optional limits: Limit of Liability $ 20,000,000. $ 25,000,000. Additional Annual Premium $ 1,500. Min. $ 3,000. Min. Frank Cowan Company -29- COST ANALYSIS -City of Niagara Falls MUNICIPAL LIABILITY ERRORS AND OMMISSIONS NON-OWNED AUTOMOBILE FOLLOW FORM EXCESS LIABILITY ENVIRONMENTAL LIABILITY COMPREHENSIVE CRIME COUNCILLORS' ACCIDENT CONFLICT OF INTEREST LEGAL EXPENSE RECREATION AFFILITATES: GENERAL LIABILITY NON-OWNED AUTOMOBILE PROPERTY/DATA PROCESSING EQUIPMENT BREAKDOWN OWNED AUTOMOBILE (CITY) GARAGE AUTOMOBILE (CITY) EXCESS AUTOMOBILE & GARAGE (CITY) OWNED AUTOMOBILE (TRANSIT) EXCESS AUTOMOBILE (TRANSIT) 2009 AMENDMENTS EXPIRING PROGRAM 546,587 $ 46,047 500 28,305 38,650 4,750 558 780 6,857 3,427 100 89, 507 7,429 96,060 9,207 2,347 191,037 4,571 38,437 NEW PROGRAM 2010-2011 TERM 776,154 46,047 500 31,839 38,650 4,750 558 780 6, 857 3,018 INCLUDED ABOVE 103,121 7, 854 97,957 9,207 2,525 206,388 4,953 ANNUAL PREMIUM $ 1,115,156 $ 1,341,158 COST ANALYSIS -Niagara Falls Public Library EXPIRING PROGRAM NEW PROGRAM 2009-2010 TERM 2010-2011 TERM GENERAL LIABILITY $ 7,657 $ 7,657 ERRORS AND OMMISSIONS 4,967 4,967 NON-OWNED AUTOMOBILE 200 200 ENVIRONMENTAL LIABILITY 2,132 2,132 COMPREHENSIVE CRIME 1,750 1,750 COUNCILLORS' ACCIDENT 496 496 CONFLICT OF INTEREST 540 540 LEGAL EXPENSE 750 750 PROPERTY/DATA PROCESSING 18,728 19,017 EQUIPMENT BREAKDOWN 3,387 3,556 AUTOMOBILE FLEET EXCESS LIABILITY (AUTOMOBILE) ANNUAL PREMIUM INCREASE LIMIT OF LIABILITY 1,484 1,484 200 200 $ 42,291 $ 42,749 1, 500 REVISED ANNUAL PREMIUM $ 44,2gg Niagara,Fi~lIs CPS-2009-013 December 14, 2009 REPORT TO: Councillor Victor Pietrangelo, Chair and Members of the Corporate Services Committee City of Niagara Falls, Ontario SUBMITTED BY: Corporate Services Department SUBJECT: CPS-2009-013 Niagara Falls Humane Society RECOMMENDATION That the City provide up to $179,000. to the Niagara Falls Humane Society (NFHS) as a five-year forgivable mortgage for the financing of completed building improvements at the NFHS animal shelter. EXECUTIVE SUMMARY In response to deficiencies outlined in the Bandow report on Animal Control in the City of Niagara Falls, the Niagara Falls Humane Society (NFHS) invested $300,000 in capital improvements. The improvements have addressed the deficiencies. The result of the improvements has been a depletion of the financial cushion maintained by the NFHS. As a result, the NFHS has requested one-time financial assistance. Staff support the immediate financial assistance for capital improvements to the NFHS facility. BACKGROUND The 2007 Bandow report on Animal Control in the City of Niagara Falls characterized the NFHS facility as "barely adequate". The NFHS has been proactive in investing approximately $300,000 in both building and equipment, despite the uncertainty of their relationship with the City. The completed improvements have addressed many of the animal shelter deficiencies. Staff inspected the facility in 2008 and was satisfied with the improvements. Unfortunately, these expenditures have exhausted the NFHS reserves. The NFHS advised that their reserve funds were used to construct capital improvements to their facility in accordance with the 2007 Bandow report. On July 29, 2009, the NFHS formally requested the City to provide a mortgage in the amount of $179,032.18 for the financing of the shelter improvements. A staff report on November 16"' addressed this issue and a number of other issues (licensing fees, a grant request and the City's operating budget for animal control and sheltering costs). Council approved the fee increase but referred the other items to budget deliberations. Staff has subsequently met with principles from the NFHS. They have indicated that the issue of a forgivable mortgage on the building is a pressing need. The financial cushion, they had prior to the Bandow-related renovations, has been depleted. The forgivable mortgage will provide some breathing room they need to continue to operate. December 14, 2009 - 2 - CPS-2009.013 ANALYSIS/RATIONALE Through meetings between Niagara Falls Humane Society (NFHS) principles and City staff, afive-yearforgivable mortgage was proposed forfinancing the capital improvements to the NFHS facility. The financial assistance relieves the City from constructing and operating its own animal shelter. The 2007 Bandow report detailed the costs for building and operating an animal shelter. New construction costs could amount to $1.8 million with additional equipping costs of approximately $121,000. Staff has reviewed the 2008 Audited NFHS financial statements and has confirmed that the capital improvements have increased the fixed assets of the organization. The fixed building asset as at Dec.31/08 was $839,191. Staff has also verified the actual expenditures for the capital improvements amounting to $179,032.18 . Based on the improvements to the facility and ultimate cost savings to the municipality, staff is recommending that the City provide up to $179,000. to the NFHS as a five-year forgivable mortgage for the financing of completed building improvements. Without such assistance, the financially viability of the shelter will be called into question. The NFHS has expressed their immediate financial challenge. Having exhausted their reserve funds, the NFHS has been using aline-of-credit to support regular operations; however, the 2009 operating costs are exceeding their revenues and the organization continues to incur short term debt. Staffs review of the 2009 NFHS financial statements has confirmed that, without immediate financial assistance, the operations will have to be severely reduced to repay the debt and to address the operating deficit. FINANCIAL IMPLICATIONS The one-time financial assistance is a mortgage and would be registered on the NFHS property. The mortgage will be the securityfor the City's investment in the facility. Should the NFHS be unable to carryon its contractual duty to the -City, the City can claim for any residual amount of the unexpired mortgage term. The mortgage is forgivable overfive years and would not include interest. Each year, 20% of the mortgage is forgiven, so that at the end of the five-year period, the entire amount is forgiven and the mortgage is released. The annual amount forgiven of approximately $35,800 would be drawn from the City's Special Purpose Reserves and would not impact the General Purposes budget. LIST OF ATTACHMENTS July 29, 2009 letter from Niagara Falls Humane Society Table 2 from Bandow Report, Capital Budget for construction and equipment of a municipally operated Animal Centre Niagara Falls Humane Society, Financial Statements, December 31, 2008 December 14, 2009 - 3 - CPS-2009-013 Recommended by: Approved by: Dean orfida, City Clerk K. E. Burden, Executive Director, Corporate Services Respectfully submitted: I "' ~"~rrNv` Ken odd, Chief Administrative Officer V:~2009COUNCIG2009 12 141CPS-2009-13 Niagaza Falls Humane Societywpd HIttC. FpILBCLER>rS'49 p7~J+~+50 8025 Ghippawa Parkway, Niagara Falls, Ontario L2E 8X8 Telephone {905J 356-4404 Fax (905) 358-7652 Incorporatad April 6, 1937 Dean lorfida, City.Clerk City of Niagara Falls 4310 Queen Street Niagara Falls ON L2E 6X5 Dear Dean: Jufy 29, 2004 This letter is to confirm that The Board of Directors of the Niagara Falls Humane Society has passed a motion to request afive-year #orgivable mortgage agreement from the City of Niagara Falls in the amount of $179,032.18. The above amount wilt be used by the Niagara Falls Humane Society for the financing of the shelter improvements. Thank you for your time in regards to this request. Yours truly, ~~~~ Jay DesRoches Executive Director Niagara Falls Humane Society "N/E SPEAK FOR 7!-IOSE N/NC7 CANNUT SPEAK FOR THEMSELVES" www. niagara fallsh umanesociery. com ~(~ ~. Proiec! Report of[he 2007 Service Review of die CiN ofNiar!~a Falls, Ontario Aninur(Care & Control Services (C/N o{Nia¢ara Falls ON FUe No k1999-9316vJames H Sondow e& Associates Table #2 Cauitaf BBfiQet #or eonstrueEecxf and etaUi[afnent tYf a municipaEhf aexerated Niagara FatEs Anenlal Cet~tr~ This tabio contains ourprajeded Capital Budget #ar mnstrudion ~ a C8y of Niagara Fails Municapal Anima! Centre. Square footage Costs Crave been projected by an arduted experienced in shelter design. This cost es8mate Aces not include the ms! of hand, or permits. Animal Holding Areas ~ 2,516 sq. ft @$265 666740 Enforcement Space 256 sq. ft @$225 57600 Ancillary Space 3,211 sq. ft @$225 722475 Halliways 1,196 sq. ft. @$225 269100 HVAC System 18 Air ChangesPor. + Heat recovery Included Archded Fee ('g) 110000 Con8rnlency ('10) Included SUB-TOTAL $1,825,915 Dog Kennels - 40 @ $3,000 (*11) Included Cat Caging (Rados) - 14 @ $3,850 {'12) 53900 Security (*13) 8000 R Requirements (*14) 8000 Pressure Washer 1 @ $2,600 2600 Service Carts 2 @ $250 (*15) 500 Freezer (Upright) 1 @ $4,000 4000 Vetednary Technical Supplies Microscope 1 @$200 Clippers 1 @ $100 Slides, snipes eta.. $700 1000 Treatment Table 2 @ $1000 P00g Appliances (Fridge/Compad Fridge) 1 @ $750 / 1 @ $250 1000 Bowls & Litter Trays 150 @ $15 {'16) 2250 OfTce FumitureiLockerseto Lockers -16 @ $100 = 1,600 Office Furniture-2 @ $2,500 = $5,000 Workstatwns-5 @ $1,000 = $5,000 Interview Room Tables - 2 @ $370 = $740 Lunch room Table -1 @$370 = $740 Tads Chairs - i6 @$200 =$3,200 Guest Chairs - 30 @ $150 = $4,500 Lunch Room Chairs -10 @ $70 = $700 Contingency (For inddental adddions that may have been missed) -$5,000 26ggp Sgnage 5000 Sound Baffling 3000 Page 138 rraiect Reoort ofthe 2007Serviee Review of the CiN ofNiaeara Fa!!s Ontm~io Animal Care & Control Servlees Cl gfNwAOra Falls. ON. File No #1999-93) byJames H Bandaw & Assxiozes Washers and Dryers 1 Washer and 1 Dryer @ $750.00 1500 Fendng (`1~ 1500 SUB TOTAL 5120,730 GRAND TOTAL ;1,946,645 taepianatory Notes: (`8) Percentage of heat recovered wi0 be dependant upon the unit selected in consultation with mechanical engineers. (`9) We used a rate of 8.4% which would seem appropriate for a building of this protected cost, but may need to be adjusted. (`10) We used a contingency of 10%. (*11) See Introductory Comment for Table #1 (*12) See Introductory Comment for Table #1 (*13) This includes card access readers to limit access In the building 1b staff outside of public hours which has proven to watt more effectively than keys. k limits time of access, records access and can quiddydenyaccess when an employee leaves your employ. Additionally, readers are located to prevent public aocess to lunch and todcer rooms for staff security, treatrnenUeuthanasiamom for sedrrity of ilrrgs, to prevent access to dog arM cat isdatron rooms to limit disease. transmission to the rest of the building and to reduce liability where the.public may be bitten. by animals under rabies observation. Additionally, motion detectors may be required. in areas where animals are separated from the detectors by solid or glass watts. As well, door and window contacts will be required. Video cameras in the dog and cat areas and a quad monitor in the receiving area maybe required to provide secunly in the rooms without staff constantly having to escort viewers. Further, the costs would provide for the installation of a public address system which is very useful W communicate with staff. (`14) We only included an esOmate to have a hrncfion box located in the facility, network cable to the various computer work station locations (rww is the time to locate where there maybe need for additional drops in the future), and a fiber connection to your netwotfr. (*15) These are usualty Rubber Maid carts with an upper and lower shelf and used to move litter frays, food etc. about the facility. (*16) We have found that it is much cheaper and the product better, if stainless steel serving bowls are used fa food and water, and chaffing dishes are used as litter frays. These are available through restaurant suppty houses. Note that cat feeding and water bowls an: included in the cost for cat racks. (*17) Fendng is only recommended in areas where security is required -primarily near staff parking and vehicle access to the unloading bay. We are opposed to Fendng around the entire exterior of an animal shelter, espedalty around the front, as this presents a very negative `animal jaiP image of the fadlity and its operation. Page 139 Crawford smith(,, swallow NIAGARA FALLS HUMANE SOCIETY Financial Statements December 31, 2008 Crawford smrth(,g~ swallow NIAGARA FALLS HUMANE SOCIETY Financial Statements December 31, 2008 Table of Contents Page Auditors' Report Balance Sheet Statement of Changes in Net Assets g Statement of Operations 4 Statement of Cash Flows c Notes to Financial Statements 6-9 Schedule to Statement of Operations 10 Crawbrtl, Smith antl Swalbw Crawford Chartered Accountants LLP ~~ 4141 OOean Street C~Y7'71~~ / ~/ t Niagara falls, Ontario Ullll 1liLLL ~~ Te ephone (905) 356-4200 swallow Telecopier (g05) 356-3410 Ollices in' Niagara Falls, Dntario SC Catharines, Ontario Fort Erie, Ontario Niagara-on-Ihe~Lake, Ontario Port Colborne, Ontario AUDITORS' REPORT To the Members of Niagara Falls Humane Society We have audited the balance sheet of Niagara Falls Humane Society as at December 31, 2008 and the statements of changes in net assets, operations and cash flows for the year then ended. These financial statements are the responsibility of the society's management. Our responsibility is to express an opinion on these financial statements based on our audit. Except as explained in the following paragraph, we conducted our audit in accordance with Canadian generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. In common with many charitable organizations, the society derives revenue from donations, the completeness of which is not susceptible of complete audit verification. Accordingly, our verification of this revenue was limited to accounting for the amounts recorded in the records of the society and we were not able to determine whether any adjustments might be necessary to donation revenue, excess of revenue over expenses and net assets. In our opinion, except for the effect of adjustments, if any, which we might have determined to be necessary had we been able [o satisfy ourselves concerning the completeness of the revenue from donations referred to in the preceding paragraph, these financial statements present fairly, in all material respects, the financial position of the society as at December 31, 2008 and the results of its operations and its cash flows for the year then ended in accordance with Canadian generally accepted accounting principles. ~~ ~ ~ ~~ Niagara Falls, Ontario April 14, 2009 CRAWFORD, SMTI'H AND SWALLOW CHARTERED ACCOUNTANTS LLP LICENSED PUBLIC ACCOUNTANTS 1 NIAGARA FALLS HUMANE SOCIETY BALANCE SHEET December 31, 2008 Assets 2t)t~8 2007 Current Assets Cash 4~,41~0 199,329 Marketable securities 154,053 Accounts receivable 4gh,94~1 14,821 Prepaid expenses 1,~ J6Q " 14 150 10;323 382,353 Fixed Assets -note 2 ~~~_ ~~, ; ~,,, ~,,,, Liabilities and Net Assets Current Liabilities Accounts payable and accrued liabilities -note 4 Deferred revenue -note 3 Net 895,177 11~9~6 80,020 192754 134,672 7~87~t1;:' 895,177 Signed on behalf of the Board: Director Director See accompanying notes crawtord smith ~, swallow 2 NIAGARA FALLS HUMANE SOCIETY STATEMENT OF CHANGES IN NET ASSETS for the year ended December 31, 2008 .................. .... 21~1~8 2007 ;$ ._ $ Net Assets, Beginning of Year Excess (Deficiency) of Revenue over Expenses Transfer from A 603,616 121,580 Net Assets, End of Year ~'~8,0 760,505 See accompanying notes Crawford smith C8~ swallow NIAGARA FALLS HUMANE SOCIETY STATEMENT OF OPERATIONS for the year ended December 31, 2008 ~~ 2007 '` $ Revenue City of Niagara Falls -fee for service -note 5 #5~ ~ 466,118 Niagara Community Foundation grants -note 6 1,3~~ 2,680 Donations and fund raising $~„4,Q~ 79,565 Bequests ~_ 1r$~9..~,= 68,913 Shelter -schedule 1 174,8# 184,441 Sundry -schedule 1 2~~1Z3 27,276 Ministry of Training, Colleges and Universities grant 749 Niagara College of Applied Arts and Technology grant '7~fr ~b 829 742 Expenses Amortization ~WS~'3~8' 34,880 Bad debts ' 18>~&~I '. 11,057 Bank and interest charges 5,170 3,472 Canada Pension ' 17x72 15,667 Education 3¢9' 1,162 Employment Insurance ' 8;,955 8,653 Group insurance 32,46: 29,779 Insurance I9~2~"7 ! 20,348 Miscellaneous 4;7bT -.. 1,798 Professional fees and purchased services 15,30L 14,140 Provision for lawsuit 26,250; Shelter -schedule 1 X72,368 . 162,250 Vehicle `1$,476:. 13,884 Wages ~2z#,'774 379,663 Workplace Safety and Insurance Board 10481 - 11 439 -r 9~4,885 708162 Excess (Deficiency) of Revenue over Expenses (Iv8~1,49'J~) 121,580 See accompanying notes 4 crawlorrl smith C~, swallow NIAGARA FALLS HUMANE SOCIETY STATEMENT OF CASH FLOWS for the year ended December 31, 2008 Operating Activities Excess (deficiency) of revenue over expenses Amortization Loss on disnosal of fixed assets _ Changes in non-cash working capital components Marketable securities Accounts receivable Prepaid expenses Accounts payable and accrued liabilities Deferred revenue Funds provided by operating activities Investing Activities Purchase of fixed assets Decrease in Cash Position Cash Position, End of Year -~~ ~'4,1t,~ 4Ct,5~=5 2007 121,580 34,880 (154,053) (3,837) 1,525 19,226 13,371 5( 0,892) (37,521) 236,850 199,329 See accompanying notes 5 Crawford smith Cdr, swallow NIAGARA FALLS HUMANE SOCIETY NOTES TO FINANCIAL STATEMENTS for the year ended December 31, 2008 Organization Niagara Falls Humane Society provides humane, animal control, boarding and crematorium services in the City of Niagara Falls. Niagara Falls Humane Society is a registered charity and, accordingly, exempt from income taxes. 1. Significant Accounting Policies The financial statements of the Society are the representations of management prepared in accordance with Canadian generally accepted accounting principles, consistently applied. Because a precise determination of many assets and liabilities is dependent upon future events, the prepazation of periodic financial statements necessarily involves the use of estimates and approximations. These have been made using cazeful judgement in the light of available information. The financial statements have, in management's opinion, been properly prepared within reasonable limits of materiality and within the framework of the accounting policies summarized below: Revenue recognition Restricted contributions are recognized as revenue in the year in which the related expenses are incurred. Unrestricted contributions are recognized as revenue when received. Financial instruments The Society has elected the following balance sheet classifications with respect to its financial assets and financial liabilities: Cash and marketable securities are classified as "assets held-for-trading" and are measured at fair value. Accounts receivable aze classified as "loans and receivables" and are measured at amortized cost, which, upon initial recognition, is considered equivalent to fair value. Accounts payable and accrued liabilities are classified as "other financial liabilities" and are initially measured at fair value. Fixed assets and depreciation Fixed assets are recorded at cost. Expenditures for maintenance and repairs are charged to operating expenses. Depreciation is calculated using rates designed to amortize the cost of fixed assets over their useful lives as follows: Building Furniture and equipment Computer equipment Vehicles - 40 years, straight line - 10 yeazs, straight line - 3 years, straight line - 3 years, straight line 6 crawlord smith ~ swallow NIAGARA FALLS HUMANE SOCIETY NOTES TO FINANCIAL STATEMENTS for the year ended December 31, 2008 1. Significant Accounting Policies -continued Fixed assets and depreciation -continued Additions during the year are depreciated from the month of acquisition. Disposals are depreciated until the month of disposition. Gains or losses on assets sold or otherwise disposed of are included in the statement of operations. Gifts-in-kind Gifts-in-kind are recognized when the fair value can be reasonably estimated, the materials are used in the normal course of operations an d the organizati on would have purchased the materials or services if they had not been con tributed. 2. Fixed Assets A~euinul&~l host D~~r~itatlan 20,83 2007 ~ ' ' Vin. ` $. $ Land ~BQ,b~b 84,~~6 80,666 Building 83~1~1 34393, 445,2- 378,204 Furniture and equipment 11,359 6~~56: SOf'~03: 4,883 Computer equipment 22,24 14,111 8,r~4 4,871 Vehicles 9fx`~14~2. ~~4 27;~~~a , 44,200 1,154,f~2 49`~r,~~5' ~f~,*~~7 512,824 7 Crawford smith ~& swallow NIAGARA FALLS HUMANE SOCIETY NOTES TO FINANCIAL STATEMENTS for the year ended December 31, 2008 3. Deferred Revenue 8 2007 ~i $ Balance, beginning of year X4,652 60,602 Contributions: Bequeaths 7,f1130 Capital Campaign 253 Computer equipment ; 1,'~d0 1,322 Amortization _.__ i~t-~~1 (7.525 Balance, End of Year _ '~ ' 54,652 The balance consists of the following accounts: _._ 2DQ8 2007 $ $ Bequeaths 2.7,000 Capital Campaign 3~;~~4 45,117 Computer equipment 1,24 573 Investigation 80 '; 80 Puppy Playground 1,16` _. . 1,169 Spay and Neuter `7,713 7,713 `7,79$ ` 54,652 4. Contingent Liability During 2008 an employee left the Humane Society. The employee has made a claim against the Society for $ 85,000. The Society has provided for an estimated loss of $ 26,250. The cost of the settlement in excess of $ 26,250, if any, will be expensed in the year of settlement. 5. Economic Dependence The Niagara Falls Humane Society's operations consist of providing humane, animal control, boarding and crematorium services in the City of Niagara Falls. The contract with the City of Niagara Falls to receive financing for- animal control accounts for 62% of funding in the current year. 6. Permanent Endowment During 2005, the Society transferred $50,000 to the Niagara Falls Humane Society Shelter Enhancement Fund held by the Niagara Community Foundation. During the year, the Society received $ 1,343 from the Fund. 8 Crawford smith ~, swallow NIAGARA FALLS HUMANE SOCIETY NOTE5 TO FINANCIAL STATEMENTS for the year ended December 31, 2008 Gifts-in-Kind Gifts-in-kind recognized in the financial statements include $ 1,000 of computer equipment. S. Comparative Amounts The 2007 figures, presented for comparison purposes only, have been restated to conform with the current year's basis. crawlord smith ~ swallow NIAGARA FALLS HUMANE SOCIETY Schedule 1 SCHEDULE TO STATEMENT OF OPERATIONS for the year ended December 31, 2008 2 2007 >~ $ Shelter Revenue Boarding fees ~~,541 45,038 Cremations ~~ ~ 28,198 Humane work I~~ 20,467 Pound fees < ~i~~4 5,890 Sale of animals fi~„6a~~= ' 53,427 Sale of dog licences ,~ ~~~:"- 31 421 "~ 184,441 Sundry Revenue Interest :8,2;91. 6,996 Memberships 481- 160 Miscellaneous I6z3~" 20,120 _ =rte. '; 27,276 Shelter Expenses Cremation services 1;3011 ': 17,631 Food ; 4;50 3,729 Light, heat and water 28~,6~2 31,991 Municipal taxes f,125 6 097 Office and sundry 35,93 20,692 Repairs, maintenance and cleaning 66,559' 23,448 Telephone IQ,~8T 9,346 Veterinarians' fees _ __ ~5,~95 -, 49,316 ~7~x~68 162,250 See accompanying notes 10 crawlo~ smith C~ swallow