2009-06-15_Supplemental Agenda Packet--Dossier de l'ordre du jour supplémentairem;
City of Saint John
Common Council Meeting
Monday, June 15th, 2009
Location: Common Council Chamber
Supplemental to Agenda
3.1(a,b,c,d,e) Terms of Agreement Between The City of Saint John and Terrence Totten
8.2 (a,b) Harry Kitchen and Enid Slack: Options for Financing Services and Infrastructure
8.2(c) Commissioner of Finance: Long-Term Financial Impact on Capital Program
City of Saint John
Seance du conseil communal
Le lundi 15 juin 2009
Lieu : Salle du conseil communal
Ordre du jour supplementaire
3.1a, b, c, d, e) Conditions de Pentente conclue entre The City of Saint John et Terrence Totten
8.2a, b) Harry Kitchen et Enid Slack : Options de financement des seiyices et de Pinfrastructure
8.2c) Commissaire auz finances : Repercussions frnancieres a long tenne sur le prograrnme
d'irmnobilisations
SCHEDULE "B.
News Release
issued by the Communications Department of The City of Saint Jahn
on behalf of Mayor Ivan Court and Mr. Terry Totten
For Immediate Release
June 15, 2009
Saint John Common Council and City Manager Terry Totten Reach Agreement
(Saint John) Mayor Ivan Court, Members of Common Council and Mr. Terry Totten jointly announce Mr. Totten's
resignation /retirement as City Manager of The City of Saint John effective Tuesday, June 16, 2009..
An agreement was reached at the Monday, June 15, 2009 meeting of Common Council and includes a one-time
payment of $500,000 and confirmation of the supplemental benefit provided by Council in 2002.. The entire
agreement will be posted in the agenda section of the City's website by 4pm June 16.
"Terry has done an outstanding job for the City from day one. He has always demonstrated incredible knowledge,
a high degree of professionalism" a strong work ethic and an undeniable commitment to our community and to the
organization," said Mayor Court.
The impetus for Council and Mr. Totten coming to an agreement was twofold.
First, Mr. Totten says that the unprecedented and unwarranted amount of print media coverage that he has
attracted over the past few years has done serious harm to the organization and Mr. Totten himself. In particular,
the negative tone of the editorials and columns has affected Council/staff relations, employee morale, the
organization's ability to attract and retain "top notch" professionals, and Saint John's reputation throughout the
province and across the country.
Second, Council and Mr, Totten have acknowledged the desire to have Saint John be everything that the City can
be. Events leading to the agreement have been likened to those in the sports world. Sometimes, despite best
efforts, a highly skilled, well-managed and well-coached team needs change at the top to move to the next level.
As often in the case in the sports world, reaching the next level requires transformational change the City itself is
on the cusp of transformational change. In those situations, all parties come to a mutual understanding, settle on
contractual commitments, wish each other the best and move on.
This agreement accomplishes this change.
-15-
...2
Mr. Totten is a Chartered Accountant who began his career with the City in 1983 when he was appointed by
Council to the position of Deputy Commissioner of Finance. He was subsequently appointed as Commissioner of
Management Services in 1990. In 1993 Common Council asked him to consider accepting the appointment as City
Manager, a position he has held since that time.
Mr. Totten leaves the organization with the distinction of being the City's longest serving City Manager, a
testament to his employer, his fellow employees and to this community.
"It has been an honour to serve six Mayors, nine different Councils, thousands of employees, volunteers and
individual citizens, Mr. Totten said. "There has never been a day when I hesitated to head into the office. Service as
Saint John's City Manager has been more than a career for me. It has been my life." He continued, "I wish to
express a particular thanks to those with whom I have worked so closely in recent years. Their support and counsel
has been invaluable."
Mr. Patrick Woods, Deputy City Manager, will serve as Acting City Manager.
-30-
Media Contact
Nancy Moar
Communications Manager
City of Saint John
548-3725
June 15, 2009
Common Council of The City of Saint John
Deputy Mayor Stephen Chase and Members of Council
Your Committee reports that it sat on Monday June 15, 2009, when there were present Mayor Ivan
Court, Deputy Mayor Chase, and Councillors Farren, Higgin, Killen, McGuire, Mott, Snook, Sullivan and
Titus and your Committee submits the following recommendation;
THAT, the City enter into an Agreement with Mr. Terrence Totten respecting his
resignation/retirement from The City of Saint John, a copy of which agreement is attached to and forms
part of this report, and that its execution by the Mayor and Common Clerk be authorized.
Respectfully submitted,
- Ln
Mayor Ivan Court
Resolution of Common. Council respecting resignation,/retirement agreement with Terrence Totten
RESOLVED THAT the recommendation of the Committee of the Whole of Common Council, dated June
15tD 2009 respecting an agreement between The City of Saint John and Mr. Terrence Totten, be
adopted.
PV ,
TERMS OF AGREEMENT
BETWEEN:
CITY OF SAINT JOHN, hereinafter referred to as
"the City"
-and-
TERRENCE TOTTEN, hereinafter referred to as
"Mr. Totten"
WHEREAS Mr. Totten holds the. position of City Manager for the City;
AND WHEREAS the parties hereto have agreed upon the following terms in relation to
the resignation and retirement of Mr. Totten as City Manager;
NOW THEREFORE the parties hereto have agreed upon the terms set out hereunder as
reflective of all terms applicable to Mr. Totten's resignation and retirement:
Mr. Totten will submit his resignation as City Manager effective the 16'~ day of June,
2009.
2. Mr. Totten will execute a Full and Final Release (copy attached as Schedule "A") which
acknowledges that, in consideration for the terms of this agreement, he has no other
claims, demands, actions or causes of actions against the City or any of its members of
Councils, management, officers, representatives or employees.
3. (a) Mr. Totten will be entitled to commence receipt of his pension payments by direct
bank deposit on or before July / , 2009. The pension payments to which he is to
be paid are the maximum payable at the date of his resignation/retirement under
the City of Saint John Pension Act (approximately $60,000/year), with
adjustments as provided for therein, and the supplemental pension of 10% of his
salary at the date of his resignation (approximately $16,000/year),
(b) It is understood and agreed that Mr. Totten is not eligible for the entirety of the
maximum payable under the City of Saint John Pension Act due to the fact that he
had not met the 85 factor at the time of his resignation/retirement. However,
based upon the resolution of Council on May 13, 2002, the difference between
that maximum and the amounts actually paid by the Saint John Pension Board
will be borne by the City of Saint John and be made payable to Mr. Totten.
Similarly, the supplement pension payment of approximately $16,000/year shall
be borne by the City and not the Pension Fund,
-2-
(a) It is further understood that only the 10% supplemental pension as referenced in
paragraph 3(b) shall be exclusively paid to Mr. Totten, not be subject to variation
and will not be available to be bequeathed by Mr. Totten but cease upon his death.
(b) The maximum pension payment of approximately $50,000 will be indexed and
subject to a right of spousal election as provided for under the same terms and
conditions of the City of Saint John Pension Plan as of this date; with respect
specifically to the difference between the amount of the annual pension to which
Mr. Totten is entitled under the City of Saint John Pension Act and the maximum
pension payable under that Act at the date of his resignation/retiremeat, that
difference shall be indexed in the same manner as is provided in that Act for the
portion of a pension in respect of pensionable service after January 1, 1993.
5. The City shall further make available to Mr. Totten the total sum of $500,000 upon his
resignation. These funds shall be advanced to Mr. Totten in the most tax advantageous
manner and as he directs, subject always to the City's obligation to comply with
applicable laws.
6. It is specifically understood that the City shall not make any payments or contribute to
the cost of health and dental plans, life insurance, pension contributions, legal expenses
or any similar costs which Mr. Totten may incur prior to and following his resignation
and retirement.
7. As a condition of the payment of the compensation referenced above, Mr. Totten agrees
that, other than self-employment or employment in an area other than in the private for
profit sector, he will not accept or participate in employment for a period of six months
commencing on the date of his retirement/resignation,
Mr. Totten acknowledges that the agreement with the City, the terms of which are
outlined above, are accepted voluntarily.
Mr. Totten further acknowledges that he has had the opportunity and did access
independent legal advice prior to the conclusion of these terms.
10. Upon acceptance of the terms of this agreement by the Common Council, the City and
Mr. Totten will provide to the media the attached joint press release (Schedule `°B").
11. This agreement, when authorized by resolution, shall be binding upon the parties hereto
and their respective successors, assigns, heirs, executors and administrators.
-3-
ITT WITNESS WHEREOF the parties have executed this agreement this
SIGNED, SEALED and DELIVERED }
in the presence of: )
)
)
Witness } Terrence Totten
SIGNED, SEALED and DELIVERED ) City of Saint John
in the presence of, j
}
}
Witness } Per:
day of June, 2009.
Schedule "A''
FULL AND FINAL RELEASE
KNOW ALL MEN BY THESE PRESENTS that TERRENCE TOTTEN, of the
City of Saint John and Province of New Brunswick, hereinafter called the "Releasor" (which
term includes his heirs, executors, administrators, successors and assigns) in consideration of
other good and valuable consideration and the sum of ONE DOLLAR ($1.40) (receipt and
sufficiency of which are hereby acknowledged) does hereby remise, release and forever
discharge the CITY OF SAINT JOHN (which includes its members of council, officers,
employees, successors and assigns), hereinafter referred to as the "Releasee", of and from all
manner of actions, causes of actions, complaints, claims and demands whatsoever which
against the Releasee, the Releasor ever had, now has or hereafter can, shall or may have for
or by reason of any cause, matter or thing whatsoever existing up to the present time, and
particularly and without limiting the generality of the foregoing, of and from all claims,
complaints and demands of every nature and kind whatsoever in any way related to his
resignation and retirement.
AND IT IS UNDERSTOOD AND AGREED by the Releasor that the Releasees do
not admit any liability or impropriety towards the said Releasor. The terms and conditions of
settlement are not to be construed as an admission of liability on the part of the said
Releasees.
IN WITNESS WHEREOF the party hereto has hereunto affixed his hand and seal,
the day of June, 2009.
SIGNED, SEALED AND DELIVERED,
)
in the presence of. )
)
)
}
Witness ) Terrence Totten
--2-
PROVINCE OF NEW BRUNSWICK
COUNTY OF
AFFIDAVIT OF EXECUTION
I, JAMIE C; EDDY, of the City of Fredericton, in the County of York and
Province of New Brunswick, Barrister and Solicitor, MAKE OATH AND SAY AS
FOLLOWS:
1. 1 was personally present and did see the annexed Release duly signed, sealed
and executed by Terrence Totten.
2. The said instrument was executed by the said Terrence Totten at the City of
. in the County of York and Province of New Brunswick.
3. 1 know the said "Terrence Totten.
4. 1 am the solicitor for the said Terrence Totten expressly named by him to
advise him with respect to the nature and effect of the said Release, which I did before the
said Terrence Totten signed the said Release.
5. My signature is on this Affidavit.
SWORN TO BEFORE ME at the City of
, in the County of and
Province of New Brunswick, this
day of ,Tune, 2009.
A Commissioner of Oaths
Being a Solicitor
}
}
}
}
}
}
Jamie C, Eddy
}
FINAN~IA~
SONG TERM
IMPpCT
OF
CAPIOVAI, PROGRAM
• Nothing in this report should
be construed by anyuie to
mean that I am saying We
s hould not proceed with the
Peel Plaza Project
• Your Worsh*p and Vembers of
Common Counc a 't 's my
understand*ng that comments
have been made 'n the e egraph
_ourna over the ast few months,
attributed to me,, that Wou d
breng 'nto questeon the V*ab a 'ty
of the Pee P aza Progect
40
is about the financia impact
This presentation • ita needs of this
of the Genera Fund yap capacity to fund
community in re ation to the cap
these pro'ects
you a had an
• am going to assume Y report so it is my
opportunity to read the rep
intention to address what be ieve are the
significant issues uestions unti
• wou d ask that you ho.d your q
the end
• Out ine
Brief history
Budget protections 2010 to 2012
Capita needs (Genera Fund)
Cha enges
-Property ax Accountabi ity Mechanism
- mpact on Operating Budget
- Potentia So utions
Questions
Recent H*story
Numerous reports dea ing with this in recent
years
une 2006 Commissioner of Finance
- ssues pus Capita
from Operating
- November 2008
- mpact of doing a
projects
- nfrastructure deficit
Budget Pro'ect'ons 20'0
• Counci adopted po icy direction
2010-4,5%
2011- 4%
2012-4%
20"m 2
• -he protections inc uded as Appendix 3
in the report ref ect this po icy direction
Cagelta deeds
fiassumption by which . am
operating ►s that the Pee wknowho put together
What is
these requests for Capita needed
Municipa operations
- Faci ity Management
-Leisure Services
_ Fire Services
Cap*ta \eeds (confnued)
• t is the ro e of these Senior Managers to
inform Counci of the needs - it is the ro e of
the Commissioner of Finance advise Counci of
the impact of the funding these needs in
terms of:
- Debt service
- Tota debt oad
- Budget (tax impact)
-Timing
Challenges
inronditional
Grant f unding
ceS of revenue
isoul bevel of cap'0tal expend
pension Plan Funding
itures
Chal-enges
rant funding
g acity
. uncondjt:10ll
fiscal yap be
as 0 Would n°`N
_ Oiginal basis W 199
r
823 d~fference of
adjuste from
d -19,499' te
_ nIla'tlon 639 actua~ the tax ra
$442 'or 49.5 cents on ~ 0 y Opp in
$2-4,774YS16 for an
f inn rep additions
ort galled funding to the city ding
Uncertain" in this fun
_ Future
Cha enges
• Thesecha enges have not changed in the ast
number of years and need to be addressed to
be ab e to move forward.
• These are funding issues NOT expenditure
reduction issues!
We have been in a cut and s ash menta ity for
a most 20 years -WHY?
9 Funding!
A S highb * ghtedthe 5 ac c/ <-tchen
report "to Co ns der which
'tures cou
expend d be r
reau res a maao
r st
VV
udy
educed
"th many
s an
componevil-zoan e\/a uation
rev0
organI.zationa
ser\/.ces ew,
in the waY ~n `^~hlCh are
and an understand'nS of
de ivered, h-ch ser\/0,ces are
the extent to ued by
• An organizationa review was conducted in
2005/2406 by Chartwe with a
to an $27.6
recommendation to invest ea with the issues
mi ion over ten years t
facing this community
• An eva uation in the way in which services are
de ivered (Va ue for money audits)
• An understanding of the extent to which
services are va ued by taxpayers -community
engagement Vision
over the past zu
• The aPProach
has been to reduce . ^
ears
expenditures to
budget*
balance the
ics and
false
• The result econOm
increased costs for the juture
untau►~►~~
-aX p,cco
o p e fW
~ edhall'sm . of
prIncip.es
Kitchen report
rom the S.acV'
. F
,,b-"c Finance
_ Economic efficiency
_ Equity or fairness
- Accountability
Transparency
_ Autonomy
_ Stability & predictability
Ease of administration
Autonomy
When oca
omy is best achieved e for raising the
puton
are respons►b
governroents
end inc-UdIng
revenue that they Sp oca. tax rates:'
responsibl~~ty jor setting
. See AP'Pendl)(5 for EyarOP,e
Ca P "ta
mpact on Operat'ng Budget
Assumptions
-Interest rates - 5.5%
-Borrowing term ( ength) -15 years
-Assessment base growth - 7%
- Tax rate -1.785
ssue -Capita from Operating for recurring
expenditures -increase in borrowing period
What shou d the Cap a ta Budget be?
• Based on above assumptions use "reverse
engineering concept" to arrive at what eve of
borrowing can be undertaken to maintain a
sta b e tax rate
• Appendix 6 from the report indicates ;based
on these assumptions) what the annua
borrowings wou d be
Cappta 13UdgetDetelmination
•5 junded'Primari:y by
from
The Capita. Pro graWith contributions other
along ent and any o
debentures
then eVe s °f gojer"m
° on
contributions'
Sis to have n° 1-2-impact
~ mi. ion
the ana y end ~
. Based on pity could sP
the tax rate the oUr years
over the next
Cap@ta Budget Determanateon
• The capita needs identified at budget time
were approximate y $311 mi
next four years with $72 mi
amount of $239 mi ion for the City to fund.
ion over the
ion estimated to
he funding from other sources eaving a net
• We have seen that to maintain tax rate we can
fund $120 mi ion
• Funding is needed!
Property axes
• n the S ack/ <itchen report "a though there is
no benchmark to determine if property taxes
are too high in Saint John, it is possib e to
compare different measures of the property
tax burden among the three argest cities in
New Brunswick".
Property ax Burden
• The property tax burden is obtained by
mu tip ying the assessed va ue of a property
by the tax rate the resu t of which is the tax
burden.
• This is a concept tax burden that we have
been trying to high fight for years.
• t is the actua cost to the home owner!
ax Rate Compar*son
S ack/ (itchen report (p36 & 37)
Property tax rate (2007): per $100 of
assessment
•Sa'nt_ohn
• Freder*cton
9 Voncton
.7850
x.40'76
'.6525
ax Burden Compar*son
Sack/ (itchen report (p36 & 37)
Property tax burden 2007): average residentia
property taxes per dwe ing
•Sa'nt_ohn
• Freder*cton
9 Voncton
$ ' 1648
$ ',984
$ ',983
ax Burden Compar*son
S ack/ (itchen report (p36 & 37)
Property tax burden 2007): average residentia
property taxes to after-tax income
•Sa'nt_ohn 3.8%
• Freder*cton 3.9%
•Voncton 4.'%
Fund*.ng
to try and
is not presented to raise
This information sinc e
Cou"C' ortant
tax rate or ion to the imp
•ustify the draw attention rea theme
it 15 to to the
taxes - Tax Burden ANA
issue of the „adequacy of funding".
of this report the
has recognized
~2-002-) ce of
Federa - Government r;mary Soul
taxes as the p
that props eynsufficient
revenue
Fund*ng
• FCM has been preaching this message for over
30 years
• The Federa government so ution is grants
• Grant funding is not sustainab e in the ong-
term.
Fundeng
• `"he Pub ic Finance princip e of "stabi ity and
for future
predictabi M of revenues a and P.
municipa Wes to budget an does not
- Grant funding
expenditures"
support this princiP e
- In tough times grants tend to get frozen or
reduced (PNB) in the 90's
to qua ~fY and receive funding is
- Bureaucracy least
onerous to say the
So. ut's on
-term so ution is a greater share of
• `"he ong
taxation revenues
report spoke about revenue
• 5 ack/kitchen rep tion that
generating options on an assumption
keep their
federa and provincia. governments same tax structure and rates
• `his assumption was used for demonstration
purposes on y -
So uteon
• Municipa ities are the economic engines of
this country and need more than 8% of the
tots tax poo
• f 8% is equa to 98,000,000 does 15% equa
$184,000, 000
• With this eve of funding wou d we even need
grants and it is possib e that property taxes
cou d be owered.
So uteon
• The argument wi be made that a greater
sharing of revenue wi never happen.
• f we don't at east start the discussion, it
certain y won't happen
continue.
and the spira wi
• Our 2009 borrowings wi see their fina
payment being made in "2024"
Solut on
om►~ent that this 15 about
about
My report makes a raking tough lec,SIOn ,
about m
leade ngphoW things ce are done• this
Chang to this Councl. ° across the
This is not a referen
administration - it 15 about eadership
entire spectrum. eadersh►p by
demOnstrat fed5 to
The City needsooince and the and making
pushing the p r isten~ng
ersh►p by
demonstrate ead
changes
Short'term?
ab°ut the
\\.,'hat
our capita
needs to prioritize
-he City decisionS.
ram
am and our make capital 'Pr°g
progr , and prioritizing ~n any
be achieved
'By costing at can
know wh
we can
and !MP act of adding
and particular ~eary
erstthe ahead or bace,.
we can ects pro" ects or Mo\ing'PrO-
Summary
ort.
is `"here is a of of information in this re or at most
Offer to meet one on one, one on two ,
on three with members of Counci to review
one
this in depth if they Wish
a ong with
Set up a committee of Counci (3) Manager to
Commissioner of Finance and Cietys to so ve this
initiate dia ogue with other e
funding crisis.
*.Vhank you
nuestiOns
.4- Rl-vices
0 0 n s or -mr-inancing
anc- nfras-cru'llcru'llre in u-:
Sain,[ a$
Presentation to the City of Saint John
Harry Kitchen and Enid Slack
June 15, 2009
ssues in int o-an
inancia - I- S a'
Property tax rate too high in Saint Sohn
Services that benefit neighbouring
communities without compensation to City
Grant system out of date
nsufficient revenues to finance infrastructure
2
rie Report
What it does:
Describe and eva uate financing too s for
operating and capita expenditures
What it doesn't do:
Determine how to reduce expenditures
Eva uate whether property taxes are too high
3
-
A ~un 0 c
rincip-es a
Efficiency
Equity
Accountabi ity
-ransparency
Autonomy
Stabi ity and predictabi ity
Ease of administration
r' Comparisons
Tax _
Moncto
Prope
n -
_ er1Cton
Fred
Saint o" - 1 .65,25
1.416
I - - l tax rate per 1.950 5.9°f°
re5identia
Average d value $
$10 of asseSSe ent as ° 67'1°f °
ide ltlal asse5s0/,, Of
Res ent $1,923
total assessn1 $1,994
Aver • l rope' X1,648
age re5lde vtla
es er dwelling
tax p 4.1%_
tial property 3.9%, 06
Average redden r-tar 3.90/0 - Canada' 2a
tine to afte 200& and statistics
tares rela . al S~atzst~csl
e _ e Po" of Municzp
j11COn1 Annual R P
e Statistics.
Bru nswick d incom
Sources: Mes an
- community PTO
us
Lens
x
v cuce -e m ropert-v Q/ a/
--'7-avs to a9 ~ / :
Substitute user fees for some services (e.g.
so id waste co ection and d isposa )
ntroduce new taxes (e.g. vehic e registration
fee, tax on non-residentia parking spaces,
municipa fue tax piggybacked on provincia)
Reduce provincia property tax
J- aving e
---or S rvices t--iat 3ene--'-Jt
N eig h'D o u rin g C o m m u nitie s
Municipa boundary changes (Finn Report)
Other revenue too s that capture benefits to
commuters and visitors (e.g.
genera consumption tax, fue
tax)
payro tax,
tax, hote /mote
es
r~axeSicharg ohn G -
N eW l saint ~ - - %
Venue from~1ohn ~ Revenue as
. mated ~e of Sa1n d
o f roperty tax
/ o p
Revenue as ° , Estimace revenues_
d Of property to revenue - -
Estimate revenues 212°f~
I revenue
- % X2.2 million
A.34 ~ - - 19 24%
$1 1 mllhon I
come tax (10/0
X21 million
personal In ovincial tax) 11.150/o
r
on p
surtax nsumption Tax ~1~ million -
General° e point _ 3.190/0
.
I (One percentag
rovincial have
X3.5 million
increase In p ed sales taxi- - 1.910/
2.41%
harl1~4n17~
of the Tax ~l Cent per $1 million o 2 6 million _
1 Motor Fuel 1.~ /o
1%) is't tion $1.4 million _
chicle Re g • 16%
CNIoto, 1 n average' f oT
Fee ($3 le - ° • 16 thousand
each vebic 1 park1ng $136 - $
rNon Rest dentla space, °n thousand
Space ($25 per -
Lo,v ev a
;tructure
Iew -Loo--S to P-inance
Deve opment charges
"Growth shou d pay for itse f'
~ax increment financing
Capturing the increased and va ue arising from
pub is investment to pay for the investment
Comments
~ransfer provincia property tax room to
municipa ities
Expand user fees to inc ude so id waste
co ection and disposa
Re-design the unconditiona grant
ntroduce new revenue sources e.g. vehic e
registration tax, non-residentia parking tax,
fue tax piggybacked onto provincia tax,
deve opment charge, tax increment financing
10