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1997-10-25_Minutes 86-665 COMMON COUNCIL OCTOBER 25, 1997 At a meeting of the Common Council, held at the City Hall in the City of Saint John, on Saturday, the twenty-fifth day of October, AD. 1997, at 9:00 o'clock a.m. present Shirley McAlary, Mayor Councillors Arthurs, Ball, Brown, Chase, Fitzpatrick, Gould, Knibb, Trites, Vincent and Waldschutz - and - Messrs. 1. Totten, City Manager; J. Nugent, City Solicitor; P. Woods, Acting Commissioner of Finance; C. Robichaud, Commissioner of Municipal Operations; J. C. MacKinnon, Commissioner of Environment and Development Services; P. Groody, Commissioner of Human Resources; B. Belyea, Budget Officer; G. Tait, Fire Chief; R. Simonds, Deputy Chief of Police; D. Sherwood, Chief of Police; G. Ingraham, Assistant Deputy Chief of Police; D. Oram, Police Constable; J. Wilcox, Police Constable; D. Christie, Police Department; M. Gillen, Fire Department; G. Buchanan, Fire Department; Ms. J. Holt, Police Constable; Mrs. M. Munford, Common Clerk; and Ms. C. Mosher, Assistant Common Clerk. MeetinQ Called To Order Mayor McAlary called the meeting to order, noting Common Council resolution of October 6, 1997 adopting the General Policy Statement with respect to budget deliberations; and referred to the Budget Meeting Agenda (copies of which were forwarded to Council members prior to this meeting as part of the information for this meeting). Overview Of The Process Mr. Totten referred to the indication in the General Policy Statement with respect to budget deliberations of an open session of Council and the requirement in the Council Procedure By-Law for the City Manager to take his place at the Council table and, having asking Council's permission to make his comments from the podium as opposed to the Council table, addressed Council from the podium, clarifying that, to allow for less-formal discussion, the General Policy Statement should have indicated that it would be a general policy of Council to receive and hear budget submissions in Committee of the Whole to which the public would be invited to attend, rather than an open session of Council. In terms of budget guidelines, Mr. Totten advised that, under the assumption that Council and the taxpayers of the community want the same level of service as in the past year, the various City departments were asked to prepare a base budget, recognizing some inflation and some already-agreed to wage settlements, as well as to respond to the question of the effect on the departments a 10 per cent budget reduction would have; and asked Council to refrain from making any resolutions at this meeting in support of individual budget presentations in that it could confine the City Manager's ability to come back with a recommendation on the entire budget. 1998 Financial Overview Mr. Woods, through an overhead slide presentation, focused on the General Operating Fund in providing a brief historical overview of the major factors that have brought the City to its current financial position, including the Provincial unconditional grant, property assessment and the fact that the City absorbs unpaid Federal property taxes, Provincially-designated highway funding and the tax base, as well as the City's response to these factors in terms of tax rate stability, increased emphasis on tax base growth through initiatives to develop some increased level of economic activity, being a service provider versus a provider of services such as in the case of the Rockwood Park Golf Course, and expenditure/service reductions. Mr. Woods reviewed the following major assumptions used in developing the 1998 budget projections and establishing the guidelines for the various departments, recognizing 86-666 COMMON COUNCIL OCTOBER 25, 1997 that the City has yet to receive from the Province of New Brunswick the exact tax base numbers and the unconditional grant funding amount: (1) wage increases; (2) 1.8% for general inflation on goods and services; (3) an increased cost of $2,370,000 relevant to the landfill, including a tipping fee of $1,200,000 based for budget purposes on 20,000 tonnes at a tipping fee of $60 per tonne, loss of revenue of approximately $1,650,000, and a savings in operating costs of $480,000; (4) an estimated increased annual debt service cost of $294,000; and (5) a zero per cent increase in the tax base; and commented on another consideration in view of the current deliberations on the regionalization of economic development, major facilities and community planning, each of which has the potential to effect the City's operations, including staffing, space allocation and the like, as well as to the effect on the financial picture either in terms of additional costs or potential new revenues. Mr. Woods noted the general rule of thumb that increasing the tax rate by one cent would generate about $330,500 in new revenue, while a one per cent increase in the tax base proper with no increase in the tax rate would yield $500,000 in new revenue; and, in breaking down the expenditures into percentages attributable to wage costs, goods and services, debt and transfers, made the observation that wage costs represent 51 % of the total expenditures corporately, although in some departments wage costs represent in excess of 90 per cent of the operating costs. Mr. Woods provided a breakdown of the percentage of the 1997 Operating Budget of $85,046,125 attributable to departmental and non- departmental expenditures, as well as debt charges; and projected a net impact of either reduced revenues or increased costs of $6,415,909 which, if the City were to resort to a tax rate increase to cover, would require an approximate 19.4 cent increase on the tax rate to offset. With regard to the two options - expenditure reductions or a tax rate increase, Mr. Woods proposed, as staff's response to the increased costs of $6,415,909, a combination of expenditure reduction of $4 million and a tax rate increase to address the remaining $2.4 million. Mr. Woods concluded to the effect that the 1998 budget dilemma translates into $6.4 million in reduced revenues or increased costs which, in turn, translates into a potential for a 19 cent increase in the tax rate, being a combination of new landfill costs in the vicinity of $2.4 million, grant reductions of $2.2 million, an increase in wages of $1.2 million, and a goods and services inflationary increase of about a half million dollars, with staff's suggestion being a combined approach that would see some reduction in service and funding levels and some increase in the tax rate, with the pros and cons of each being part of the budget deliberations. Mr. Woods apprised Council of the state of the City's finances to the effect that they are in good shape and, while there was a serious budget problem going forward for 1998, the City was well up to the challenge of dealing with it. Saint John Transit Commission Mr. Frank McCarey, General Manager of the Saint John Transit Commission, introduced Commissioners Messrs. Peter Gaulton, Chairman, Andrew Britton, Raymond French and Donald McKim, as well as Mr. Wayne Thorne, Comptroller; and, referring to the Commission's 1998 Operating Budget request (copies of which were distributed to Council members at this meeting), noted that the Commission was asked to prepare a budget that would reflect operating the identical services as is had now and to discuss the impact of reductions; and advised that, while an identical service would cost $50,000 less next year than this year, it would seem this year that the Commission would probably underspend its budget by $100,000, although if the Commission were to keep that $100,000 to use next year, the service could probably be maintained at the identical level and, in fact, have a reduction in costs of about 7.5 per cent from what the City's supported it with last year. In terms of a reduction of 10 per cent, Mr. McCarey advised that the Commission would probably start the year off with identical service and see what happened over the first 2 to 3 months before making any reductions, all of which would be based on retaining the $100,000 saved this year. Mr. McCarey confirmed that the positive figures were due to a very significant increase in ridership, particularly over the past four months; reviewed the comparative statistics on cost efficiency, revenue cost ratio and municipal operating contribution per capita, included in the submitted budget information, so as to assure Council that it was getting good value for its investment; and advised of the importance of Council looking at the issue of vehicle average age as the Commission was quickly approaching some very serious situations with regard to its vehicles, in particular in trying to continue operating twelve 1979 buses, which is almost 30% of its fleet, that 86-667 COMMON COUNCIL OCTOBER 25, 1997 are now beyond their useful age and, in the near very near future if these buses are expected to last more than 3 or 4 years, the Commission would have to start sending them out to be refurbished at a cost that would probably be higher than what the capital cost would be to replace them; and that, as the Commission has not bought three buses in years that it should have, the Commission has fallen far behind in its vehicle procurement plan and was at the point where it was about 12 vehicles behind which was beginning to seriously affect the Commission. Mr. McCarey made the observation that the budget was done on the projection that, in fact, three buses would be purchased next year and in following years at least for about three or four years, otherwise the expense numbers start to get very much higher to probably another quarter of a million dollars. Mr. McCarey summarized to the effect that the Commission was asking for $50,000 less than last year and suggesting that, if the anticipated under- budget amount of $100,000 could be retained, the Commission would need $150,000 less, while anything beyond that would probably mean looking at a reduction of service. As to a 10 per cent budget decrease, Mr. McCarey advised that it would be necessary to cut 15 per cent to 18 per cent of its mileage, which would mean cutting those routes with the poorest return which, at this point in time, would be the Loch Lomond, Martinon, South End and Forest Glen routes, and to consider Sunday service for elimination, which would result in a reduction of between 9 and 10, or about 15 per cent, of the Commission's employees. With regard to the Handi-Bus service, Mr. McCarey advised that, as the commitment to this service was not particularly high - being at $40,000 in the proposed 1998 budget, perhaps the Commission would take $4,000 or $5,000 back, although the Commission has looked at reducing its own service as opposed to trying to make some corrections with the Handi-Bus amount, and referenced the recent presentation to Council with regard to the Handi-Bus service. Mr. McCarey responded to questions on the use of large versus small mini-van-type buses, as well as to the concern in 1996 that a rate increase would result in a decrease in ridership when, in fact, ridership increased. Fire Department Chief Tait, through a computerized presentation depicting both scenes of locations with their response times, fire incidents, and the fire stations in the City of Saint John and written and numerical information (copies of the written and numerical portion were distributed to Council members at this meeting) and a video presentation to illustrate a fire situation, addressed the Fire Department's proposed 1998 Operating Budget request of $13,286,498 which would reflect the 1997 funding levels plus acceptable increases in specific line items as per the 1998 budget guidelines, or an Operating budget of $11,919,636 with a 10 per cent reduction. Chief Tait, in explaining the rationale and required action to meet the 1998 budget guidelines, advised that, as personnel costs equal 93 per cent of the Operating Budget or $12,316,958, the only viable solution to meet guidelines would be personnel reduction and the required action would be: (1) to eliminate the Holiday Relief Program at a saving of $575,000 which would result in closing one fire station and the elimination of one fire company to meet the function of staffing fire apparatus during absence (vacation, sickness, training, etc.), with the consequence being the lay-off of 18 holiday relief fire fighters in accordance with the collective agreement, the termination of the most cost-effective program within the Fire Department (i.e. the salary of one permanent fire fighter = the salary of 2 holiday relief fire fighters), and the loss of ability to participate in the Provincial Apprenticeship Program; and (2) to eliminate one captain, 3 lieutenants and 9 fire fighters, and subsequently close a second fire company, which would result in layoffs in accordance with the collective agreement and a saving of $749,405. Chief Tait, in noting the impact of personnel reductions in a saving of $1,324,405, apprised Council of the results of this in terms of response times, increased risk with a greater potential for loss of life and property and an increased risk for fire fighters' safety, a weakened Fire Department infrastructure, the probability of a change in the insurance rating and the effect of such change; and referenced letters (copies of which were distributed to Council members at this meeting), one from the Underwriters Survey, and one from the Fundy Region Solid Waste Commission, the latter regarding the Fire Department's role as the lead agency for emergency response at the Crane Mountain landfill. Chief Tait responded to questions in the above regard during which time he made the observation that, while his job involved the Fire Department doing the best with the funding provided, he could certainly not recommend any reduction in the fire service; and advised that he could make available, as requested, information on the 86-668 COMMON COUNCIL OCTOBER 25, 1997 cost per ranking of the Fire Department. Following a recess at 1:15 o'clock p.m., the meeting reconvened at 1:50 o'clock p.m. Police Force Chief Sherwood, through an overhead slide presentation, addressed the proposed 1998 Operating Budget for the Saint John Police Force of $14,506,200 (copies of which were distributed to Council members at this meeting), consisting of personnel costs of $12,293,381 and goods and services costs of $2,212,819, the 1997 budget having been $13,840,432; and advised that, to reduce the budget below the 1997 allocation of $13.8 million by 10 per cent, would mean finding $1,384,000 and, as there were no significant issues in the Goods and Services account from where any significant amount could be drawn, the bottom line would be the necessity of reducing 23 sworn officer positions to achieve the budget guideline of 10 per cent or $1.3 million. With regard to the Perivale + Taylor report, Chief Sherwood made the observation that, as the Implementation Team had not yet brought all of its recommendations to Council, there were a couple of issues in the Perivale + Taylor report on which he has been unable to put a dollar value; and, with regard to the Victim Services Program recently presented to Council, advised that, if Council were to fund the cost of operating the Victim Services Co-Ordinator estimated at $15,000 for 1998, the Force would find the human resource within the Force to deploy to that function, not necessarily the person, but with some in-house shuffling, the Force could free-up the dollars to fund the Victim Services position next year; and also advised that, with regard to the recommendation dealing with digital voice recording for the computer system so as to free-up officers' time for which the estimated cost of the equipment for this program of $85,000 would be included in the 1998 Capital Program, if Council were to approve the capital funding the Force could find three data entry clerks within the Police Force to assign to that role and responsibility. Chief Sherwood further advised that, having estimated a cost of $255,000 to implement the other Perivale and Taylor recommendations brought before Council in terms of putting more officers back on the street through some civilianization processes, particularly as it relates to Detention and a couple of other areas in the Police Force, the data entry system in terms of time would free up 15,000 hours of sworn officer time which could be devoted to different policing activities on the road or on the street; and clarified that the $255,000 was not included in the proposed 1998 Operating Budget but was a separate submission to Council, nor was the amount of $1,026,218 for a community-based policing initiative, the latter being the model proposed by the Perivale + Taylor report which, while the ideal situation, the Force has no intention of recommending to Council but would indicate to Council what could be done and at what cost with unlimited resources; and explained that, if Detention were civilianized, the four officers involved could go back on the street as the four district officers for the community-based policing districts. Councillor Trites asked if there were some way of clarifying how much of the $1,026,218 for community policing would be included somewhere else within the budget in terms of officer commitments and so on and if there were an overlap, to which Chief Sherwood confirmed that no additional personnel would be required in the community-based policing model as the presentation to be made by Constable Holt would deal with buildings, equipment and that sort of thing, based on rental, with another dimension being that, through capital and partnerships in the community, facilities could be acquired at a substantially-reduced price in terms of the operating account. Councillor Trites asked why, if resources were available now within the Department for Victim Services and three data entry people as indicated by Chief Sherwood, they would not be identified for these particular programs within the budget presentation, and Chief Sherwood explained that the proposal was that, dealing with Victim Services, some of the Police duties and responsibilities, being the position of Staffing Administrator, would be shifted in cooperation with Mr. Groody to the Human Resources Department thereby giving the Force the ability to free-up a position from which the salary and benefits could be assigned to the Victim Services Co-Ordinator position; however, if the Force continued to do business the way it currently does, the position would be needed. Constable Janet Holt, through a slide presentation, highlighted the report on community-based policing (copies of which were distributed to Council members at this meeting), being the cadillac version of the needs of the Saint John Police Force to 86-669 COMMON COUNCIL OCTOBER 25, 1997 better communicate with the community in the concept of community policing, focusing on one-time investments and on-going expenses related to community policing, four district offices, four neighbourhood police centres, and facilities and requirements for each of the centres, and responded to questions in this regard. (Councillor Fitzpatrick withdrew from the meeting during the above presentation. ) During discussion Councillor Trites advised that he would like to see how the Perivale + Taylor recommendations would fit into the 1998 budget, and Councillor Waldschutz suggested that Council should have been presented a 1998 Operating Budget proposal that would indicate, for example, the emphasis that should be placed on community-based policing. On motion of Councillor Vincent Seconded by Councillor Arthurs RESOLVED that Council terminate discussion with the presenters and thank them for their presentations and, when reconvened for the next budget meeting, Council could have additional or new documentation and continue with its discussion with the Police Department at that time. Councillor Trites suggested that the motion, in asking that the Police budget come back to the next session, include a restructured budget proposal incorporating the cost of implementation of various recommendations of the Perivale + Taylor report and any economies that may result from that, such as civilianization, changes in staffing through a retirement and recruitment program which would have cost and benefit implications, community-based policing steps that the Force would like to see happen in 1998 and so on; and the Mayor asked to be advised of the estimated overtime costs for 1998 and whether or not the overall overtime cost would decrease with the new contract and new programs in place, the latter to which Chief Sherwood replied that initial experience with the new collective agreement was a saving of approximately $10,000 per month. Mr. Totten advised that staff would be prepared to work with the Chief and his staff on the information being requested, although its submission to Council would depend on when the next budget meeting would be scheduled. Question being taken, the motion was carried. Adjournment The meeting adjourned at 3:55 o'clock p.m. Common Clerk