2017-12-06 Finance Committee Agenda Packet - Open Session
City of Saint John
Finance Committee Meeting
Wednesday, December 6, 2017
Committee of the Whole
1. Call to Order
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Each of the following items, either in whole or in part, is able to be discussed in private pursuant
to the provisions of subsection 10.(2)(4) of the Municipalities Act and Council / Committee will
make a decision(s) in that respect in Open Session:
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4:30 p.m., 8 Floor Boardroom, City Hall
1.1 Approval of Minutes 10.2(4)
1.2 Financial Matter 10.2(4)(c)
Finance Committee Meeting
Open Session
November 29, 2017
MINUTES OPEN SESSION FINANCE COMMITTEE MEETING
NOVEMBER 29, 2017 AT 4:50 PM
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8 FLOOR BOARDROOM, CITY HALL
Present: Mayor D. Darling
Councillor D. Merrithew
Councillor D. Reardon
Councillor G. Sullivan
Councillor G. Norton
Councillor S. Casey
Also
Present: City Manager J. Trail
Deputy City Manager N. Jacobsen
Commissioner of Finance and Treasurer K. Fudge
Senior Manager Financial Planning H. Nguyen
Deputy Commissioner Finance and Administrative Services I. Fogan
Comptroller C. Graham
Commissioner Saint John Water B. McGovern
Commissioner of Transportation & Environment Services M. Hugenholtz
Assistant Comptroller Finance C. Lavigne
Commissioner Growth and Community Development J. Hamilton
Fire Chief K. Clifford
Senior Financial & Economic Analyst B. Zirobwa
Director HR & Finance, Police M. Corscadden
CEO Saint John Parking & Transit Commissions I. MacKinnon
Administrative Assistant K. Tibbits
1. Meeting Called To Order
Councillor Merrithew called the Finance Committee open session meeting to order.
1.1.1 Approval of Minutes September 27, 2017
Moved by Mayor Darling, seconded by Councillor Casey:
RESOLVED that the minutes of September 27, 2017, be approved.
MOTION CARRIED.
1.1.2 Approval of Minutes October 26, 2017
Moved by Mayor Darling, seconded by Councillor Reardon:
RESOLVED that the minutes of October 26, 2017, be approved.
MOTION CARRIED.
Finance Committee Meeting
Open Session
November 29, 2017
1.2 2017 Audit Service Plan
(Mr. G. Cochrane and Mr. J. Mallais of Deloitte entered the meeting)
Mr. Cochrane reviewed the 2017 Audit Service Plan which includes
consolidated financial statements and the Reserve and Trust funds. He noted there is nothing
to indicate fraud that would affect the financial statements and requested assurance from the
committee that they are not aware of any activity that would inhibit the execution of their
procedures. The committee indicated it is not aware of any fraudulent activity that would
impair the audit process.
(Mr. G. Cochrane and Mr. J. Mallais withdrew from the meeting)
Moved by Councillor Reardon, seconded by Councillor Norton:
RESOLVED that the 2017 Audit Service Plan be received for information.
MOTION CARRIED.
1.3 Long Term Financial Planning
Ms. Zirobwa reviewed the long term financial plan for the City of Saint John. A set of tools will
be suggested to strengthen financial governance and allow
finances beyond the immediate budget cycle. Policies will allow better anticipation of, and
response to, financial challenges and opportunities.
Moved by Mayor Darling, seconded by Councillor Reardon:
information.
MOTION CARRIED.
1.4 Operating and Capital Reserve Policy
Ms. Zirobwa commented on the submitted Operating and Capital Reserve Policy. The reserve
policy addresses long term funding strategies through the establishment of reserves for
unexpected events or extraordinary expenditures that could cause large fluctuations in the
operating and capital budgets.
(Mr. Trail entered the meeting)
Moved by Councillor Reardon, seconded by Mayor Darling:
RESOLVED that the submitted Operating and Capital Reserves Policy be received for
information.
MOTION CARRIED.
Moved by Councillor Sullivan, seconded by Councillor Norton:
RESOLVED that the Finance Committee recommend that Common Council approve the
submitted Operating and Capital Reserves Policy.
MOTION CARRIED.
1.5 2017 LNG Revenue City Hall Reserve
Ms. Graham stated that funding has been received through the LNG process for additional
property tax of approximately $1.2M net. The funding is not guaranteed and cannot be
Finance Committee Meeting
Open Session
November 29, 2017
depended upon as part of the operating budget. It is recommended that these funds be placed
into a capital reserve to address fit up costs for the city hall process.
Mr. Fudge noted that the 2018 capital budget has already been approved to capitalize on the
market and achieve the best financial results through the tendering process. The capital budget
for 2018 did not include provisions for the city hall project. A report will be presented to
Council to amend the capital budget for the city hall project.
Moved by Mayor Darling, seconded by Councillor Sullivan:
RESOLVED that the Finance Committee submit the report Reserve for Capital Costs of
City Hall Fit Up to Common Council with a recommendation to establish a General Capital
Reserve Fund for the capital costs associated with the City Hall fit up costs utilizing the
$1,205,732 unbudgeted property taxes received for LNG facility.
MOTION CARRIED.
1.6 Saint John Transit Surplus
Mr. MacKinnon reported that the Saint John Transit commission will end the year in a surplus
position and suggested that the surplus be allocated to a building reserve fund, used exclusively
for the transit building.
Moved by Councillor Sullivan, seconded by Mayor Darling:
RESOLVED that the Finance Committee submit the report
to Common Council for information with a recommendation to establish a Transit Building
Reserve Fund; and to authorize the transfer of $250,000 to the Building Reserve Fund as a
result of a 2017 year-end operating surplus.
MOTION CARRIED.
1.7 2017 Year-End Forecasts (General Fund)
1.7.1 Reserve Recommendations
Ms. Nguyen reviewed the submitted report with respect to the 2017 year-end forecast. The
surplus is forecast to be approximately $1.1M, adding that the actual result can change from
the forecasted amount.
Ms. Hamilton, Mr. Corscadden, Chief Clifford, Mr. Hugenholtz, Mr. Fudge and Mr. Jacobsen
commented on the projected results of each of the service areas as outlined in the submitted
report.
Commenting on the year-end surplus, Ms. Nguyen noted that to continue with fiscal prudence,
it is being recommended that $500,000 be allocated to a capital reserve fund to reduce the
borrowing requirement in the future; as well as allocating $400,000 to an operating reserve to
be used for the one time cost of Phase 3 of the Transportation Plan and a Storm Sewer model.
Mr. Fudge stated that provincial legislation requires any allocated reserve funds to be
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completed by December 31, through the Council process. The funds can be placed in a
reserve and a decision on its specific use can be determined at a later date.
(Chief Clifford withdrew from the meeting)
Moved by Councillor Norton, seconded by Mayor Darling:
-to the next
Finance Committee meeting scheduled for December 6, 2017.
MOTION CARRIED with Councillor Sullivan voting nay.
Finance Committee Meeting
Open Session
November 29, 2017
Councillor Sullivan stated that he would prefer to allocate the funds to the reserves without
specifying the intended use.
1.8 2017 Year-End Forecast (Utility Fund)
1.8.1 Reserve Recommendation
Mr. McGovern provided an update on the year-end forecast for Saint John Water of $1.16M
and reviewed items that could impact the year end variance.
Moved by Councillor Reardon, seconded by Councillor Sullivan:
RESOLVED that the Finance Committee submit the report -End
to Common Council for information and to transfer $850,000 from the projected
surplus of the 2017 Saint John Water operating budget to the Safe Clean Drinking Water Project
reserve fund to reduce borrowing or to address any unbudgeted costs associated with the
project.
MOTION CARRIED.
(Councillor Reardon withdrew from the meeting)
1.9 Recovery of Merchant Fees
Mr. Lavigne reviewed enience Fees for Credit
Staff has investigated the option of charging convenience fees for the use of credit
cards for on-line and telephone payments. The City provides a variety of other options for
payment without cost such as payment on-line through banks, payment in person and cheques.
The annual cost of accepting credits cards for on-line payments and by telephone in 2016 was
$75,000.
Moved by Mayor Darling, seconded by Councillor Sullivan:
RESOLVED that the
convenience fee of no more than 1.75% for use of credit cards for both online and telephone
payments for parking tickets and water and sewerage bills; and further that the City eliminate
the acceptance of American Express cards.
MOTION CARRIED.
Adjournment
Moved by Mayor Darling, seconded by Councillor Sullivan:
RESOLVED that the open session meeting of the Finance Committee meeting be adjourned.
MOTION CARRIED.
The Finance Committee open session meeting held on November 29, 2017 was adjourned at
7:25 p.m.
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December 6, 2017
2018GeneralOperatingBudgetTimeline
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December 6, 2017 3 Draft to Finance Committee Open
Session (Recommendation for Common Council);
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December 11, 2017 3Draft Recommendation to
Common Council for Approval;
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December 18, 2017 (if required)
Additional meetings to be scheduled as required
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Provincial Update
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Received Assessment Information on November 24;
0.39% Assessment Base Growth = $466,014
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Received Provincial Grant on November 24;
Reduction in Provincial Grant from 2017 = -$3,622,726
Over a 5 Year Period (Next Census) = -$18,113,630
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Short Term Financial Assistance on November 24;
Total Pool = $2,414,384
Confirmed Saint John 2018 Financial Assistance = $1,239,537
No formula was Provided
Fredericton & Moncton Received No Assistance
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2018 Property Taxes and Unconditional Grant:
Reduction of $3.16 Mil
20172018Change
Tax Base for Rate$6,770,480,331$6,796,587,554$26,107,223
Tax Rate$1.785$1.785
Property Tax Revenue$120,853,074$121,319,088$466,014
Unconditional Grant$20,225,932$16,603,206-$3,622,726
TOTAL$141,079,006$137,922,294-$3,156,712
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Combined Property Tax & Unconditional Grant
Revenue Reduction from 2017 of 2.24% or $3.16M
Unprecedented and Sustained Decline in Revenue Growth
8.00%
6.98%
6.54%
5.36%
6.00%
4.14%
3.22%
4.00%
4.53%
2.55%
2.00%
1.45%
0.33%0.72%
0.58%
0.00%
2018
200720082009201020112012201320142015201620172018
-2.00%
-2.24%
-4.00%
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Illustrative Example Structural Deficit
Structural DeficitStructural Deficit Forecast
2018 1st Draft2018 2nd Draft2019F2020F2021F2022F
Revenues 1%1%1%1%
Property Taxes$120,853,074$121,319,088$122,532,279$123,757,602$124,995,178$126,245,129
Provincial Grant$17,205,932$16,603,206$16,603,206$16,603,206$16,603,206$16,603,206
Own Source Revenue$12,043,587$12,048,487$12,103,805$12,164,324$12,225,146$12,286,271
$150,102,593$149,970,781$151,239,290$152,525,132$153,823,530$155,134,606
Expenses
Wages & Benefits$90,940,910$90,940,910$93,182,466$95,427,850$97,851,644$100,354,470
Operating Expenses$36,118,760$35,947,529$36,647,135$37,183,169$37,727,176$38,279,276
ABC Funding$12,428,474$12,428,474$12,803,131$12,853,377$13,028,938$13,184,140
Fiscal Charges$16,709,579$16,709,579$17,518,873$17,484,435$17,745,227$17,737,397
$156,197,723$156,026,492$160,151,605$162,948,831$166,352,985$169,555,283
Structural Deficit-$6,095,130-$6,055,711-$8,912,315-$10,423,699-$12,529,455-$14,420,677
Non Recurring Revenues:
Carry Over Surplus$1,338,515$1,338,515 - - - -
Financial Assistance$1,239,537 - - - -
- - - -
Surplus/Deficit-$4,756,615-$3,477,659-$8,912,315-$10,423,699-$12,529,455-$14,420,677
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2018 Recommended Budget
REVENUES 1st Draft BudgetRecommended BudgetChanges
Property Taxes$120,853,074$121,319,088$466,014
Unconditional Grant$17,205,932$16,603,206-$602,726
Financial Assistance$1,239,537$1,239,537
Surplus 2nd Previous Year$1,338,515$1,338,515$0
Revenues from Own Sources$12,107,887$12,112,787$4,900
TOTAL REVENUES$151,505,408$152,613,133$1,107,725
EXPENSES
Growth & Community Development$10,241,933$10,118,529-$123,404
Public Safety Services$50,838,107$50,805,207-$32,900
Transportation & Environment Services$42,046,654$42,025,858-$20,796
Finance & Administrative Services$9,498,207$9,503,272$5,065
Corporate Services$8,465,297$8,465,297$0
Other Charges$30,415,210$30,455,433$40,223
Restructuring Costs$1,239,537$1,239,537
TOTAL EXPENSES$151,505,408$152,613,133$1,107,725
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Major Budget Changes
Net Reduction of $136K in Property Taxes and Unconditional
Grant;
One-time Financial Assistance from Province: $1.2 Mil;
Other miscellaneous adjustments: $131K
Restructuring costs: $1.24 Mil
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Revenues by Categories
2018 Revenue Budget: $152,613,1332017 Revenue Budget: $154,021,467
Surplus 2nd
20182017
Previous Year,
Revenues
$1,338,515 ,
Surplus 2nd
Revenues
from Own
1%
Financial
Previous Year,
from Own
Sources,
Assistance,
$416,472 , 0%
Sources,
$12,112,787 ,
$1,239,537 ,
$12,525,989 ,
8%
1%
8%
Unconditional
Unconditional Grant,
Grant, $20,225,932 ,
$16,603,206 , 13%
11%
Property
Property
Taxes,
Taxes,
$121,319,088 ,
$120,853,074 ,
79%
79%
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Expenditures by Services
2018 Expense Budget: $152,613,1332017 Expense Budget: $154,021,467
2018 Recommended2017 Approved
$60,000,000
33.29%
34.17%
$60,000,000
$50,805,207
$52,636,773
27.54%
$50,000,000
28.18%
$50,000,000
$42,025,858
$43,405,710
19.96%
$40,000,000
$40,000,000
18.98%
$30,455,433
$29,230,857
$30,000,000
$30,000,000
6.23%
6.32%
$20,000,000
$20,000,000
6.63%5.55%6.79%
$9,503,272
$9,727,929
5.56%
$10,118,529
$10,452,225
0.80%
$8,465,297
$8,567,973
$10,000,000
$10,000,000
$1,239,537
$0$0
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Growth & Community Development Services
Total Growth & Community Development
Budget: $10.1 Mil or 6.63% of Total Budget
Growth Initiatives:
Development Incentives: $220K
Heritage Grants: $45K
Develop Saint John: $821K
Enterprise Saint John: $475K
Destination Marketing Organization:
$1,033K
Regional Facilities (T&CC, HarbourStation:
$1.12 Mil)
Market Square Common Area: $2.19 Mil
Growth & Community Planning & One Stop
Development Shop Services: $4.2 Mil
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Public Safety Services
Public Safety Services Budget: $50.8 Mil or 33.29% of Total Budget
Saint John Police: $24.5 MilFire Rescue & Suppression Service:
Public Safety Communications: $2.43 $20.33 Mil
MilEmergency Management Service:
$300K
Water Supply and Hydrants: $2.3 Mil
Street Lighting: $943K
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Transportation & Environment Services
Transportation & Environment Services Budget: $42
Mil or 27.54% of Total Budget
Roadway and Sidewalk Maintenance: $14.73 Mil
Traffic, StormWater, Solid Waste Management &
Engineering: $10.13 Mil
Parks & City Landscape and Sports & Recreation: $6.32
Mil
Recreation & Cultural Programming: $994K
NeighbourhoodImprovement & Community Grants:
$986K
Parking Admin: $584K
Transit: $7.18 Mil
Other ABCs (Lord Beaverbrook Rink, Aquatic Centre,
Free Public Library): 1.11 Mil
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Finance & Administrative Services
Finance & Administrative Services
Budget: $9.5 Mil or 6.23% of Total
Budget
Finance: $1.75 Mil
Assessment Charge: $1.32 Mil
City Hall: $1.94 Mil
Liability Insurance: $304K
Admin Services (Purchasing, Insurance,
Facilities Management, City Market,
Carpenter Shop & Real Estate): $4.19
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Corporate Services
Corporate Services Budget: $8.47 Mil
or 5.55% of Total Budget
Arts & Culture: $624K
Mayor & Council: $649K
Regional Services Commission: $34K
Other Corporate Services (City Manager,
Legal, Common Clerk, HR, Strategy &
Continuous Improvement,
Communications, IT, GIS): $7.16 Mil
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Recommendation
Staff recommend that the Finance Committee
approve the 2018 General Operating Budget
as presented and send the Budget to Council
for Approval.
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Q & A
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