2010-11-22_Supplemental Agenda Packet--Dossier de l'ordre du jour supplémentaireCity of Saint John
Common Council Meeting
Monday, November 29, 2010
Location: Common Council Chamber
Supplemental to Agenda
3.1 City Manager: Pension Plan Reforms
11.2 Winter Parking Ban (Deputy Mayor Chase)
13.3b) Uptown Saint John Membership Meeting
13.6 Purchase of 103 Ocean Drive
Background
REP
19 November 2010
RT TO CO
His Worship Ivan Court
and Members of Common Council
Your Worship and Councillors:
SUBJECT: Pension PIan Reforms
In the interest of brevity the key facts are presented in point form below;
N COUNCIL
1,1,1111,111m11
City of Saint John
The financial position of the City of Saint John Pension Plan has been the subject of numerous reports
and debate. The PIan is now faced with a going concern deficit of $129M. The PIan is a defined benefit
plan and as such the City is legally responsible for any funding deficits that may arise. Retiring this
shortfall will require annual supplementary payments to the plan by the City of approximately $9.0M.
Assuming a 3% wage increase on January 1, 2011 and considering the fact that the 2010 required
contribution has not been paid, the estimated increase in both annual pension and wage costs in 2011
will total $11.9M.
Avoiding payment on the plan arrears is not an option. The purpose of this report is to recommend a
series of steps to reform the City of Saint John Pension Plan to render it both more affordable and
sustainable over the long-term.
Employees have a real and personal interest in any proposed changes to the plan. Pension benefits
represent the largest single asset for most employees other than their home. There is therefore a real
reluctance to introduce any change that may negatively impact these benefits. In addition to the
employees there are also a significant number of other stakeholders that have an interest in any
potential changes including —The City as Plan sponsor, the Superintendent of Pensions as plan regulator,
the Province of New Brunswick as legislator, retirees as plan beneficiaries, the Pension Board as
administrator/trustee on behalf of the beneficiaries, and the taxpayer as the sponsor's main revenue
source.
Any proposed amendments must also comply with the Pension Benefits Act as well as the Income Tax
Act and will require legislative amendments to the City of Saint John Pension Act. Simply put the
amendment process is very complex and involves multiple and often conflicting interests. That said, the
City is the plan sponsor and has the responsibility to take definitive action to address the current
financial shortfall and address the long-term affordability and sustainability of the plan.
1. An actuarial review has determined that the Plan has a go ng concern deficit of $129.2M as of
Dec 31, 2009
2. The Plan is defined benefit so the plan sponsor (the City) is legally obligated to fund the full
deficit over a 15 year period
3. The deficit pay-down will result in $9.0M in new annual funding for the plan sponsor beginning
in January 2010 for a 15 year term (current regulations)
4. The sponsor is still vulnerable to and responsible for future deficits that may arise
5. FuI supplementary funding of the deficit would translate into a 15- 17 cent increase in tax rate
in 2011 and beyond and an operating deficit of approximately $9.OM in 2010
G. Council the plan sponsor will not support a 17 cent tax increase and want the pension
problem solved
7. The sponsor already contributes $3.5M in deficit payments to pay off an earlier shortfall
8. The sponsor also has one year remaining on outstanding loan related to deficit payments
$1.7M payment ending in 2011
9. Employee groups understand the need for reform but are limited in willingness to reduce
benefits
10. The Pension Plan is governed by legislation and is not included in the collective agreements
11. The Superintendent of Pensions view is that the plan is unaffordable in its current form,
regulatory reform alone is not the answer and benefit reductions are necessary
12. Employees and sponsor have identified two core groups of potential relief regulato eform
and benefit reductions
13. A formal request for regulatory reform has been subrnitted to the Superintendent
14, The proposed reforms provide needed payment flexibility to reduce the annual financial impact
on the City (consolidation, 25 year term, deferral)
15. The reforms do not cost the province anything and do not allow the City to avoid payment but
will provide more favourable payment terms
16. Implementation of the needed reforms will require the support of the Provincial Government
17. Implementation of the reforms would reduce the annual deficit payment from $9.0M to $4.4M
18. The Cities of Fredericton and Moncton support the request for the proposed reforms
19. The Superintendent has not given any formal support for the proposed reforms
20. The Superintendent has advised that benefits are vested as they are accrued and are therefore
protected simply put what has been promised and earned by plan members must be paid and
any amendments must be made on a go forward basis
21. The Superintendent must administer the PRA requirements as they are currently written
22. Employees have indicated they are willing to consider suspending indexing and maintaining
contributions at 9.0% in return for job security and support for regulatory reform
23. More conservative actuarial assumptions are needed to leave the plan less vulnerable to market
fluctuations in the future
24. Combination of employee and employer contributions plus future earnings must be sufficient to
pay for future benefits and plan costs earnings are Iargest portion
25. The Pension Benefits Act requires that plan members be given written notice of any planned
reduction in benefits -this can affect timing of planned changes
26. The required legislative amendments to the City Plan cannot be introduced to the Legislative
Assembly until the spring 2011 sitting at the earliest but can be made retroactive
27. The Pension Board has submitted a request to the City for payment of $5.0M and has a legal
obligation to pursue payment by the City if the funds are not remitted to the plan as required
28. Terminating the plan and introducing a Defined Contribution (DC) plan will result in the
requirement for immediate solvency funding of $201M and is to be avoided
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29. Transition to a DC plan for future benefits or future hires does not trigger the solvency payment
30. A move to a DC plan will be resisted by the affected eniployees
31. Changes to the City of Saint John Pension Plan Act must follow the amendment process for
private member bills which allows for objections to be raised by any interested party
32. Addressing the deficit can come from any combination of additional employee contributions,
additional employer contributions, benefit reductions and regulatory reform
33. Waiting for a market turnaround will not solve the current funding shortfall a net return of
8.6% would be required over each of the next 15 years to eliminate the deficit not realistic
Notwithstanding the numerous legislative and practical considerations, an effective reform must be
driven by clear objectives. The key considerations applied during the reform process are set out below;
Objectives;
Meet the City's legal obligations as plan sponsor
A financially sustainable plan that avoids the probability of facing significant future demands for
supplemental funding
Avoid/minimize a tax rate increase
Avoid triggering a solvency payment
Comply with all applicable federal and provincial legislation
Maintain the Defined Benefit plan at Peast for current employees
Protect vested benefits of actives and retirees as required by legislation
Secure regulatory relief in whole or in part to reduce the need for benefit reductions and
lower the financial burden on tax payers
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Benefit changes are to be prospective, equitable, tangible
Establish a funding policy in concert with plan changes to address future disposition of surpluses
and deficits
Identify additional potential benefit reductions in the event that the requested reforms are not
achieved
Identify an interim funding solution for 2010 to avoid a huge budget deficit
Maintain/secure the support of employee groups, Council, MLAs, Pension Board,
Superintendent for needed changes
Secure broader municipal support for the proposed regulatory reforms
A quick review of the o readily demonstrates that while some fiexibility exists in certain areas
(benefit changes) other requirements leave little room for movement (legislative compliance, solvency
payments etc.).
Defined Benefit (DB) vs Defined Contribution Plans (DC)
This report discusses two types of pension plan approaches. The differences are significant and should
be understood from the outset.
Defined Benefit Plans are structured such that an employer promises a specific benefit usually earned
for each year of service to be paid to the employee at retirement. In general both the employer and
employee contribute a percentage of earnings during the employee's working career to fund this
promised benefit. The employer takes the responsibility and risk to ensure that there will be sufficient
funds available to meet the defined pension obligation. The Pension Benefits Act in the province also
reinforces this promise by set |ng out various provisions to protect these earned/promised benefits and
to ensure that sufficient assets are avaHable to fuIfiII this promise. The City of Saint John pension plari is
a defined benefit plan.
Defined Contribution Plans are as the name suggests based ori specified contributions from each of the
employer and employee to some type of a registered retirement savings plan. For example, the plan
could state that each party will contribute 5Y6 of salary to the plan. Unlike the defined benefit plan
there is no specific level of benefit promised at retirement. Employees are required to make individual
investment decisions during the course of their careers to fund their retirement. The most significant
difference is that the risk for future retirement income rests with the employee.
The pension funding shortfatl is not unique to the City of Saint John. Several other cities in the Province
are in a deficit position as are certain provincial employee plans. Likewise the same situation prevails
across the country as plan sponsors struggle to determine how to fund promised benefits in a period of
economic decline and low interest rates. The ability to provide sufficient income during retirement for
the coming retirement wave is a matter that raises significant public policy considerations that goes well
beyond the scope of this report.
These policy considerations could however influence the legislative environment for pension plans in
future years. There is already active discussion at both the Federal and Provincial levels of government
about the need for pension reform and any future legislative changes could have a direct bearing on the
City of Saint John Pension Plan.
The Process
Representatives from Common Council, the four collective bargaining groups, the management non-
professional employees, and individual managers have worked as a group with the PIan Actuary during
the past year to gain a comprehensive understanding of the financial and legislative obligations that
arise from the current plan deficit, evaluate the financial and practical impacts of various plan
amendments, consider a range of potential reforms and to communicate the various issues to their
respective constituencies. There were a number of individual and collective meetings and the Plan
Actuary was also made available to the employee groups to explore various options.
The discussions have been open and forthright and the parties have demonstrated a real understanding
that the status quo cannot prevail. As noted previously however the interests of the various parties do
not readily align and achieving a common consensus on a comprehensive approach as to how to best
address the funding issue(s) has not been achieved. The responsibility therefore rests with the plan
sponsor to take definitive action.
Financial Implications
In order to meet its benefit obligations the plan must generate sufficient earnings in addition to regular
employer and employee contributions to cover all investment expenses and future pension payments.
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From the employer perspective there are three key element to consider; the current service cost, the
cost to fund a deficit(s) and the cost of salary increases and related benefits. Salary increases impact
not only the annual wage cost for the City but also increase the cost of future pension benefits. The City
has a limited p001 of funds available to fund wages and benefits so money spent on wage increases is
not available for deficit funding or new money spent to cover the pension liability is not available for
wage increases. Simply put the same dollar cannot be spent more than once.
Briefly, without reguLatory relief or plan amendments the cost of pension benefits would increase from
18.6% of payroll to 34.7% of payroll (Schedule A). In dollar terms this translates into an increase from
$10.4M annually to $30.7K4 annually. The cost of negotiated or arbitrated wage increases would be in
addition to the pension payments. A three percent wage increase wouLd equate to an additionaL $1.BM
in annual costs. The combination of legislated pension funding increases and wage increases is simply
unaffordable for the City.
Human Resource Implications
Council should be aware that a reduction in pension benefits can have an adverse impact onemployee
retention and recruitment. The consequence of the proposed changes cannot be measured definitively
however it is anticipated that some employees will deem it appropriate to retire earlier than planned
and some employees may opt to move to other employers with better overall compensation. There
could also be a negative impact on employee morale and labour-management relations as the benefit
reductions are implemented.
Reform Proposal to Employee Groups
In order to bring closure to the reform process the City Manager presented a comprehensive reform
proposal to the various stakeholders. The proposal is predicated on securing provincial support for the
needed regulatory reforms and a two year wage freeze for the unionized employees (managers are
already imZ' year ofafreoze\.
Assumes we secure pension regulatory reforms addresses $4.6M of funding issue
Suspend indexing effective January 2011 for all active employees until future surpluses are
adequate to reinstate reduce current service cost by $3.0N
Maintains D8 plan for current employees
Value of DB plan capped at 16.0% vs current 20.3%
Maintain Employee contributions at9.OY6-value $400K on CSC
Voluntary two year salary freeze for all unionized value $400K on CSC and $600K on deficit
Move from Final Average 3 to Final Average 5 for future benefits value of $200K
Adopt policy funding targets— addresses disposition of future surpluses/deficits
City provides supplemental annual funding of $1.5M annuatLy
Cap benefits for new hires effective Jan 2O1Z@1496 (City share 796)
EmpLoyee groups support regulatory reforms
This proposal is shown as Option A in the attached Schedule A.
Rationale
The rationale for the proposal is as follows;
Risks
Freeze will free up funds that can support the pension deficit funding and reduce the tax impact
Maintains D8 plan for all current employees
Protects vested benefits of retirees and actives
Balances benefit reductions with additionaL contributions
Addresses long term affordability by capping benefits to new hires and reducing benefits to
current members
Positions employees to be actively supporting affordability indexing/wage
freeze/contributions
Reduces financial impact of pension funding on tax payers from $20.7M to $13. M annually or
from 34.7% of payroll to 22.9% annually
Wage freeze will offset portion of additional City contributions to pension plan
City fulfills its legal obligation to fund the deficit
It achieves the majority of the stated objectives
Two key risks were identified with this proposI
Province does not grant regulatory relief
Employees do not accept 2 year voluntary wage freeze as part of the reform package
Result
Certain employee groups (Local 486, Local 771, Saint John Police Association) have since advised that
while they are willing to support the proposed plan amendments they are not willing to agree to a
voluntary wage freeze as they regard this as a collective bargaining matter. Local 18 (Outside Workers)
have agreed to support the reforms and accept a voluntary wage freeze in return for a contract
extension (Letter B). The Management Non Union Professional employee group has also indicated their
support for the proposed reforms given that they are now participating in a two year wage freeze.
Short service employees have also expressed displeasure at the fact that indexing will be suspended
until the plan is in a financial position to afford this benefit. The move to 5 year averaging from the
current three year was not well accepted. Other employees have expressed concern about a two tier
benefit systern ie one for actives and a Iess generous plan for new hires.
As previously mentioned, money spent on wage increases is not available for pension funding.
Revised Reform Proposal to Council
Unfortunately the unwillingness of certain unionized employee groups to support the wage freeze
element of the proposal means that it will be necessary to be more aggressive in the benefit
amendments in order to make the overall cost of salary and pension benefits affordable and sustainable
over the long-term. it will also be necessary for the plan to be restructured so as to provide a different
schedule of benefits for specific employee groups.
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The reality is that the City cannot afford the current pension plan, pay off the arrears, fund the deficit
and grant wage increases without a substantial increase in the local tax rate. Notwithstanding the
employee interest in supporting a portion of the reform proposal (de-indexing) this alone is not
affordable for the City. Timely action is required.
Recommended Approach
As a consequence the following new reform proposal is being submitted to Council that takes into
consideration the decisions of the respective employee groups to either support Option A which
includes a voluntary two year wage freeze or to reject a voluntary wage freeze thus necessitating even
more significant benefit reductions as set out in Option B.
The revised plan would provide two schedules of benefits based on the decisions made by the employee
groups thus far.
8chadu|eBenafits—K8mnagennentProfessionaLNpn-Union,Lomai18—ohoxvmaoOpthon/\|nSchedu|e
w
Assumes we secure pension regulatory reforms addresses $4.6M of funding issue
Suspend indexing effective January 2011 for all active employees until future surpluses are
adequate to reinstate reduce current service cost by $2.0M
Maintains D8 plan for current employees
Value of DB plan capped at 16.0% vs current 20.6%
Maintain Eniployee contributions at 9.0% value $400K on CSC
Voluntary two year salary freeze for all unionized value $150K on CSC and $150K on deficit
Move from Final Average 3 to Final Average 5 for future benefits value of $200K
Adopt policy funding targets addresses disposition of future surpluses/deficits
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Cap benefits for new hires effective Jan 2012 14% (City share 7%)
Employee groups support regulatory reforms
New Hires Management, Non-Union, Professional, Local 18
Retain DB plan but at a reduced benefit level of 14.0%
Contribution rate of 7.0% of regular earnings for each of the employee and employer
Move from FAE3 to FAE 5
Retirement at Age 60
No Disability Pension
Option A is the most reasonable approach in that it attempts to balance the needs of the various
employee and employer interests. The plan provisions are more realistic and affordable and the
voluntary wage freeze provides the financial flexibility to address the funding shortfall.
CUPE Local 18 Contract Extension
Support from Local 18 for Option A and the consequent regulatory reforms and voluntary wage freeze is
contingent on a 42 month contract extension. The proposed letter of agreement sets out the key
provisions. The Local gains certainty of employment for its members and can demonstrate a real
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willingness to address the pension funding issue in concrete terms to the comrnunity. Given the Iimited
wage increases over the 42 month term, the support for the planned organizational reforms, the
support for the regulatory reforms and the ability to avoid protracted contract negotiations staff can
support this approach.
Schedule Benefits Saint John PoIice Association, Local 486, Local 771 shows as Option B in
Schedule A 444 Employees
Defined Benefit Plan reduced from 2.0% to 1.5% credit per year of pensionable service starting
January 1, 2011 (or as early as permitted by the PBA)
Value of the plan benefits capped at 12.0% with employee contributions set at 6.0% and
employer current service cost set at 6.0% of payroll
Indexing suspended effective 2011
Change from FA3 to FA5 to calculate pension for all future service after January 1, 2011
Disability Benefits removed effective January 2012 (current disability pensions continue)
Retirement remains at 85/65
Adopt policy funding targets addresses future surpluses/deficits
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Additional cost for wages and pension is $2.6M (assuming regulatory relief and 2010
contributions not paid)
Eniployee contributions would be reduced from 9.0% of pay to 6.0%. Depending on the rate of tax base
growth etc. a tax rate increase may be necessary to fund the additional City contribution.
Change from a DB plan to a DC plan effective July 2011 for all new hires in Local 486, Saint John
Potice Association and Local 771
Value of plan benefit is capped at 12.0%
Contribution rate of 6.0% of regular earnings for each of the employee and employer
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No Disability Pension
The change to benefits for future hires will over the course of time reduce the potential for the City to
incur liabilities for pension deficits completely for the respective employee groups.
With the a dual schedule of benefits approach the City would provide supplemental annual funding of
2.5M annually assuming regulatory relief and 2010 annual payments can be amortized.
Rationale
The rationale for the revised proposal is as foIows;
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Recognizes the limited financial capacity of the City to fund salary increases and pension
benefits by creating two schedules of benefits based on employee choice (Option A or B)
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Recognizes support of the current employees who have accepted the requisite wage freeze by
retaining DB Plan although at a much lower benefit level
Protects vested benefits of retirees and actives
Balances benefit reductions with additional contributions from the City
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Addresses long term affordability by capping benefits to new hires and eliminating ong-term
risk
City fulfills its legal obligation to fund the deficit
Reduces financial impact of pension funding on taxpayers from $20.7M to $13.7M annually
It achieves the majority of the stated objectives
Combined, these measures are intended to mitigate the financial impact of the deficit and take into
consideration that a voluntary wage freeze is not fully attainable. They also address the majority of the
stated objectives in particular containing the long-term cost of pension benefits. Note that it continues
to assume that the regulatory funding relief will be available to the plan sponsor.
The proposed changes will reduce the funding contribution from the City from the projected $20.7M
under the current plan provisions or 34.7% of payroll to $13.7M or 22.5% of payroll.
Risks
The key risk identified with this proposa!
Province does not grant regulatory relief
Regulatory Relief is Critical
Up to this point all funding options have assumed that the needed regulatory relief from the Province is
supported and implemented on a timely basis. There is no guarantee that this will happen. The
requested regulatory relief does not eliminate the payment obligation of the City for the deficit but
rather provides more favourable payment terms (extended term) that has the effect of reducing the
annual payments albeit over a longer term. The value of the relief equates to over $4.6M per year in
supplemental funding from the City. If this relief is not put in place then either the City has to contribute
the additional funding (equal to 8cents on the tax rate) or make additional reductions to the plan
benefits. In effect both the taxpayer and beneficiaries will lose.
The provincial pension benefits legislation notonly sets out a framework for providing pensions to
employees it also seeks to protect those benefits once earned. It is hoped that the Provincial decision
makers fully appreciate the fact that absent the needed relief then benefits will have to be further
reduced and/or taxes increased and/or the number of employees and services reduced.
Again, the sought after relief does not cost the province (or other jurisdictions) anything and still
obligates the plan sponsor to make its required payments. In essence, the changes provide nothing
more than better payment terms for the City. This effectively mitigates the impact on municipal
taxpayers who must fund the supplementary contributions and lessens the need for benefit reductions
on active employees.
In brief, the need for substantial tax payer contributions or benefit reductions for employees is greatly
reduced if the political will exists at the provincial level to implement the relief measures.
Immediate Need
The City has requested a one year deferral of payments such that payments on the outstanding liability
would begin in 2011 as opposed to the current requirement of 2010. Municipal budgets are fixed early
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in each calendar year and there is no flexibility to make adjustments of the magnitude required. If the
City is forced to make a large payment to the plan in 2010 this will result in a substantial operating
deficit that will be carried forward into the second following year. In practical terms, this would mean
that effectively two years of payment on the arrears would have to be made in one year /2012\. This
would have a devastating impact on the tax rate and services.
Staff have been advised that this type of short- erno deferral has been granted in other jurisdictions in
recognition of the limited budgetary flexibility at the Municipal level. This would entail a regulatory
change and requires only the approval of the provincial Cabinet. It is imperative that this portion of the
relief request be secured as soon as possibe.
No Regulatory Relief, No Wage Freeze Shown as Option C
Failing implementation of the requested regulatory changes as presented to the Province, all employees
active and future hires would have to contribute to a defined contribution plan as follows;
Change from a 0B plan to a DC plan effective July 2011 for all future service for all employees
PIan benefit is cpped at 10.O%
Contribution rate of 5.0% for each of the employee arid employer
Unfortunately, the magnitude of the regulatory funding reef 15 50 sigriificant that even by rnoving to a
DC plan the City would still have to contribute approximately $18.2M per year or 29.596 of payroll to
meet the full plan obligations. The $8.OM increase would entail a tax rate increase of +/-13.5cents.
Next Steps
The Pension Board has an obligation as trustee of the Plan to pursue timely payment from the City.
Initiating the required regulatory and legislative amendments by the Province is the most pressing
matter. Council should also be wary of individual stakeholders pursuing adjustments and changes to the
submitted proposal out of narrow s&f-interest. Evaluating other piecemeal options will not only take
time and add additional expense but also delay implementation of the needed changes.
Simply put, the interests of the tax payers must take precedence over the narrow financial interests of
individual bargaining groups. The proposal put before Council is comprehensive in nature and is
intended to balance a range of interests.
Provincial Support
The combined efforts of the plan sponsor and active employees will yield little without the active
participation and support of the Province. The requested regulatory reforms rest on a decision of the
Provincial Cabinet while needed amendments to the City Plan to reduce benefits will require legislative
approval. The solution to the pension funding dilemma now rests on active cooperation between the
Iocal and provincial Ievels of government.
Both local and provincial elected officials should anticipate opposition to the proposed reforms and
active lobbying from some stakeholders to delay or prevent the needed reforms however definitive and
timely action is required. The alternative to no action is a 17 cent increase in the local tax rate for 2011.
This would in turn equate to a 25 cent tax rate increase for local businesses.
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Other Considerations
The plan actuary has aso highlighted other structural issues in the current plan provisions including
survivor benefits, benefit cap, continuity of pensionable service, definition of pensionable earnings etc
and has recommended that these issues should also be addressed during the pension reform. Council
should consider receiving advice from the actuary on these matters and including the needed changes in
any legislative submission.
The City of Saint John has previously entered into an agreement (Schedule C) with the various employee
groups respecting contribution rates to the pension plan. This agreement contemplated the City
maintaining a minimum contribution rate of 7.5% commencing in 2010. Concern has been expressed
that the current proposal conflicts with this agreement. The current proposal does anticipate a lower
contribution rate from the City for the current service cost component for a short term but it also
includes supplementary contributions from the City for the outstanding arrears of approximately 16
percent. The City will still be required to revert to a 50/50 cost sharing model in due course.
Conclusion
There is no simpe solution to resolving the pension deficit. The financial magnitude is so large that
simply putting in additional funds or waiting for the market to bounce back or reducing other
operational expenditures are not realistic let alone effective alternatives.
Employees understandably do not want to give up pension benefits and/or future salary adjustments
however both are needed in order to avoid wholesale benefit reductions. Employee's can significantly
mitigate the reduction in benefits and maintain a defined benefit plan by supporting a voluntary two
year wage freeze. Certain groups have indicated a willingness to support the voluntary wage freeze
request and others have chosen not to accept this approach. This reality necessitates a pension plan
with two schedules of benefits based on the employee decisions respecting the wage freeze cornponent.
A small window of opportunity remains for the remaining employee groups to accept the voluntary
wage freeze and prctect their core pension benefits.
The employer as plan sponsor ideally would like to solve the problem without the need for
supplementary cash contributions or a tax increase. Additional contributions can be reduced but they
cannot be eliminated entirely. As plan sponsor the City has a legal obligation towards plan deficits that
it cannot ignore. Supplementary contributions will be necessary as will a potential tax rate increase.
The Provincial Government will play a critical role in any resolution to the pension problem. Changes to
the regulations and amendments to the City of Saint John Pension Act will require the active support of
the Province. A lack of support will have drastic consequences for plan members and the local taxpayers.
Cooperation between the Iocal and provincial elected officials and timely action are essential to resolve
this issue.
Input from Other Sources
The Commissioner of Finance, City Solicitor and Pension Plan Actuary were consulted during the
preparation of this report.
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Recommendation
That Common Council;
1) Direct the City Solicitor, in conjunction with the Plan Actuary, to draft the necessary
amendments to the City of Saint John Pension Act so as to effect the following changes for
active employees in CUPE Local 486, IAFF Local 771 and the Saint John Police Association
effective January 2011;
o Defined Benefit Plan reduced from 2.0% to 1.5% credit per year of future pensionable
service starting January 1, 2011
o Value of the plan beneflts capped at 12.0%
o indexing suspended effective January 1, 2011 for all active employees
o Change from FA3 to FA5 to calculate pension for all future service after January 1, 2011
o DsabiIity Benefits removed for all employees effective January 1, 2012
o Retirement remains at 85/65
o Employee contribution set at 6.0Y6 of earnings and employer current service
contribution set at 6.0%
o Include a requirement for a formal Funding Policy to address the disposition of future
plan surpluses and deficits and the conditions required for the reinstatement of any
indexing of pensionable service
2) Direct the City Solicitor, in conjunction with the Plan Actuary, to draft the necessary
amendments to the City of Saint John Pension Act so as to effect the following changes for new
employees hired in CUPE Local 486, IAFF Local 771 and the Saint John Police Association after
July 1, 2011;
o Change from a DB plan to a DC plan effective July 1, 2011 for all new hires after July 1,
2011
o DC PIan benefit is capped at 12.0%
o Fix the contribution rate at 6.0Y6 of regular earnings for each of the employee and
employer
3) Direct the City Solicitor, in conjunction with the Plan Actuary, to draft the necessary
amendments to the City of Saint John Pension Act so as to effect the following changes for
active employees in CUPE Local 18 and all Management, Professional and Non-Union
employees effective January 2011;
o Defined Benefit Plan with 2.096 credit per year of future pensionable service starting
January 1, 2011
o Value ofthe plan benefits capped at 16.0%
o Indexing suspended effective January 1, 2011 for all active employees
o Change from FA3 to FA5 to calculate pension for all future service after January 1, 2011
o Retirement remains at 85/65
o Employee contribution set at 9.096 of earnings and employer current service
contribution set at 7.0%
o Include a requirement for a formal Funding Policy to address the disposition of future
plan surpluses and deficits and the conditions required for the reinstatement of any
indexing of pensionable service
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4) Direct the City Solicitor, in conjunction with the Plan Actuary, to draft the necessary
amendments to the City of Saint John Pension Act so as to effect the following changes for new
employees in CUPE Local 18 and all Management, Professional and Non-Union hired after July
1, 2011;
o DB pian for all new hires after July 1, 2011
o PIan benefit 15 capped at 14.0%
o Fix the contribution rate at 7.O% of regular earnings for each of the employee and
ernpmyer
o Move from FAE3 to FAE5
o Retirement at age 60
5) Direct the Common Clerk andjor Ran Administrator to prepare and distribute the required
Notice of Adverse Amendment to all active, former and retired plan beneficiaries as per the
requirenients of the Pension Benefits Act
6) Direct the Common Clerk to formally petition the Government of New Brunswick to immediately
enact the deferral request included in the submitted regulatory reforms.
7) Direct the Mayor to schedule follow-up meetings with the local MLAs as soon as possible to
initiate the required regulatory and legislative amendments.
8) Authorize the City Manager to finalize a Letter of Agreement with Local 18 consistent with the
terms set out in Schedule 8.
Respectfully sub itted,
11))trck Woods CGA
City Manager
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E
SAINT JOHN
Mayor and Council
November 19, 2010
Re: Winter Parking Ban lower west side
It is with good intention to ensure proper snow clearing of city streets that municipal staff
recommended to council the winter parking ban.
Adjustments have been made to mitigate the difficulties that this parking ban has
imposed upon some areas of the city.
One problematic situation still remains on the lower west side in that there is not
adequate alternative parking for the vehicles of residents in certain blocks despite best
efforts to make alternative arrangements.
I believe council must for this season suspend the ban in these .localized areas and
direct staff to develop interim measures to accommodate the residents (possibly one side
parking).
Further, if council desires to have the full winter parking ban then council should engage
the parking commission in identify suitable parking areas indentified as problematic.
Motion
1. Suspend winter parking ban on following streets and implement 1 side parking
allowance:
a. Winslow Street (between Lanacaster and Ludlow Street)
b. Gilford Street (between Market Street and City Line)
c. Lancaster Street (between Duke and Winslow)
2. Request the Parking Commission and the City's real estate services to identify
suitable parking sites and submit a proposal for council's consideration to acquire
and maintain. This proposal should include options for financing the acquisition
and maintenance and to be considered if full winter parking ban is to be
implemented on streets specified.
Stephen Chase
(received via e mail)
Deputy Mayor
P.O. Box 1971 Saint John, NB Canada E2L 4L1 vsaintjohn.ca
C.P. 1971 Saint John, N. -B. Canada E2L 4L1
UPTOWN SAINT JOHN INC.
MEMBERSHIP MEETING
BIA 2011 BUDGET
NOVEMBER 18, 2010
PRESENT: Matt Alexander, Anne McShane, Donna Reardon, Doug Kochel,
Stephanie Bell, Bob McVicar, Jeff Yerxa, Michael Gillis, Tracy Hanson,
Peter Asimakos, Leslie Keating no attendees from the general
membership, notice was placed in the Telegraph Journal 10 days prior to
the meeting as per the By -Laws.
Peter Asimakos called the meeting to order and briefed those present on
the 2011 budget.
Following a brief discussion and the opportunity for questions, a motion
was made by Anne McShane to approve the 2011 Budget and to assess a
lever of 16 cents for each one hundred dollars of assessed value for 2011 upon
non residential property within the Business Improvement Area, Motion was
seconded by Bob McVicar, motion carried.
There being no further business, the meeting adjourned.
103 Ocean Drive
RESOLVED that:
1. The City of Saint John purchase 103 Ocean Drive (PID Number 55195341) from 640444 NB
Inc. in accordance with the terms and conditions contained in the Agreement of Purchase and
Sale approved in Common Council meeting in Committee of the Whole earlier this date.
2. The Mayor and Common Clerk be authorized to execute the necessary documents.
Vendor: 64U444NBInc.
10117 Route 102
Grand-Bay Westfield, NB
E5K4T4
Purchaser: The City of Saint John
15 Market Square, PO Box l971
Saint John, NB E2L 411
Attn: Common Clerk
Agreement of Purchase and Sale
Premises: Parcel A Amending Subdivision PIan
64O444N8 Inc. Subdivision Phase
Filed NeW Brunswick Land Tifles Office
Saint John on November 27, 2008 as No. 26527763
Purchase Price: $56,000.00 (HST, if applicable)
Deposit: $2000.00 payable on adoption of Common Council Resolution
Balance: On closing together with the usual adjustments apportioned and aUowed
Closing: Onor before November 3Q,2O1O
The Vendor agrees to sell to the Purchaser and the Purchaser agrees to purchase from the Vendor good
and marketable title to the Premises free and clear from all encumbrances except as may be provided
herein and except as to any registered restrictions or covenants that run with land providing that such
are complied with and do not materially affect market ability.
The purchaser shall not caII for production of any title deeds, abo�act4orothera�denceoft��mxcept
such as are in possession of the Vendor. Within five (5) days frnm the date of acceptance hereof the
Purchaser may examine the title at his own expense. lfwithirt that time any valid objection to the title is
made in writing by the Purchaser to the Vendor which the Vendor shall be unable and unwilling to
remove within three (3) days of notification of said objection or objections and which the Purchaser will
not waive, this agreement shall, notwithstanding any intermediate acts or negotiations in respect of
such objections, be null and void and the deposit shall be returned by the Vendor without interest and
the Vendor stial! not be liable for any costs or damages save as to any valid objection so made within
such time the Purchaser shall be conclusively deemed to have accepted the title of the Vendor to the
real property.
Vacant possession of the real property is to be given to the Purchaser.
The Vendor wilt furnish to the Purchaser at time of closing, a transfer in registerable form at the expense
of the Vendor.
/ne Purchaser defaults in the completion of the sale under the terms of this Agreement, any money,
lot exceeding 5% of the purchase price, paid hereunder shall be forfeited to the Vendor by way of
liquidated damages, or the Vendor may, at his option compel the Purchaser to complete the sale.
There are no representations, warranties, collateral agreements or conditions affecting this Agreernent
or the real property or supported hereby other than as expressed herein in writing.
This Agreement shall be read with all changes of gender or number required by the context, shall be
binding upon the parties hereto, their respective heirs, executors, administrators, successors and assigns
and time shall in all respects be ofthe essence hereof.
Notwithstanding anything contained herein this Agreement shall be subject to and include the following
special conditions or provions, viz:
The Vendor hereby gives to the Purchaser, at the cost, risk and expense of the Purchaser, the right, by
its officers, servants, agents, contractors and workers to forthwith enter the Premises with machinery,
materials, vehicles and equipment to construct and reconstruct a well-house and associated piping for
the chlorination and distribution of potable water from the Premises to the dwellings in the subdivision
commonly known as Harbourview Subdivision.
In witness whereof the Vendor has caused these presents to be executed this »t^ day of November,
2010.
frrbc
640444 NB
Per
and
And the Purchaser has caused these presents to be executed this day of November, 2010.
The City of Saint John
Mayor
Common Clerk
Common Council Resolution:
November 2010