2009-07-13 Finance Committee MinutesFINANCE COMMITTEE
CITY OF SAINT JOHN
MINUTES
MONDAY, JULY 13, 2009 - 4:00 p.m.
Present:
Mayor Ivan Court
Deputy Mayor Chase
Councillor Killen
Councillor Mott
Councillor Sullivan
Councillor Higgins
Pat Woods
Greg Yeomans
Cathy Graham
Hilary Nguyen
Also present — Barbara Mahaffy, Recording Secretary
There were 4 members of the media present.
1. Approval of Minutes — June 29/09
On motion of Councillor Mott
Seconded by Councillor Sullivan
RESOLVED that the minutes of the June 29, 2009,
meeting be approved.
Question being taken, the motion was carried.
Mr. Yeomans mentioned the budget process question in the minutes and wanted to clarify
that there are no controls on the budget process.
2. Adoption of Agenda
On motion of Councillor Mott
Seconded by Councillor Sullivan
RESOLVED that the agenda for the July 15, 2009
meeting be adopted.
Question being taken, the motion was carried.
3. April 2009 Results
Mr. Yeomans highlighted the process to obtain these interim financial results. At the end
of February and every month thereafter, every department receives a detailed financial
report. They review these reports and report back to the Finance Department on any
significant variances. The Finance Department reviews and reports to the Finance
Committee and Common Council three times a year.
The report presented to this meeting is a preliminary report for the first four months ending
on April 30, 2009. At the end of April, the City's revenues were approximately $42 million,
which represents 33.6% of the total budget for the year. The expenditures totaled
approximately $36 million, which represents around 28.4% of the total budgeted
expenditures for the year. The bulk of the expenditures will come in the second half of the
year, with the estimate that the City will be over budget by $300,000- 400,000 at the end of
the year.
We are tracking slightly below for revenue, but it is expected that revenues will increase by
year end. On the expenditure side, expenditures are expected to be on budget overall.
There will be some major variances which include winter snow control which could be over
budget; wage costs which could be under spent overall — this takes into account the recent
settlement with the City Manager, zero wage increases for Managers and reported
vacancies; Police Commission and Saint John Transit are not factored in as they report
back to Common Council.
Question: Are there any outsourcing costs included when looking to fill vacancies?
Response: Yes.
Question: Are the staffing vacancies in Leisure Services and the PSCC included in the
$1.4 million?
Response: Yes.
Question: If wage costs were not projected to be under spent, would that put us in a
different position to be over budget?
Response: Yes. We would have to ask what we would do if we had to make other
changes.
Question: Did Common Council set the budget too low, there is not much flexibility?
Response: Initially, Common Council was presented with the needs and wants of the
departments. Common Council then reduced here and there based on what was
presented to them. We have to have the money in order to spend it. The budget is geared
to what we want to accomplish as a community and is based on where we want to go.
Mr. Woods noted that the Fire arbitration is pending; winter is coming and there is the
issue of snow control. Many items are beyond our control going forward; however, we are
keeping an eye on this.
Mr. Yeomans noted that we should err on the side of caution when it comes to
expenditures.
Question: Building permits are down — does that indicate future growth?
Response: A report on this issue will be received soon. We should have a better idea at
the end of August.
Question: How is the $1.2 million going to affect future expenditures this winter?
Response: There will be fluctuations. We will manage them and report back on
measures taken to mitigate these fluctuations.
Mr. Yeomans noted that it is his job to make sure the departments follow the budget
process, not to tell them how to spend their money.
Mr. Yeomans reported that Saint John Water is very capital intensive. It is projected that
they will be over budget at year end by approximately $300,000 — 400,000. The metered
customers drive the consumption and, as a result, this is very difficult to estimate.
He noted that this report will go to Common Council at open session on July 20/09.
Question: The one concern about the utility is that the revenues from the water bills are
not paying for the services.
Response: This is a self- funding program. It is not accumulating a deficit year over year.
There will be a full amortization into the rates. Some more detailed analysis is required on
this, but it is only the first quarter report.
Councillor Sullivan said that there may be questions on the audited financial statements on
Monday evening from the other Councillors.
There is no action required by Common Council with regards to this report. It will be
presented to Common Council for them to take it from there if they wish. Mr. Groody's
report may have a financial impact and Common Council will have to look at that. Deputy
Mayor Chase noted that they need to find the best way to deliver services and still meet
everyone's expectations.
Mayor Court and Councillor Mott left the meeting at 4:30 pm.
There was some discussion on property taxes and the information in the Slack Report. Mr.
Woods discussed briefly the Finn Report which proposes one universal tax rate each for
residential, business /commercial, non - residential, etc.
4. Update on the Terms of Reference for the Finance Committee
The Terms of Reference will be discussed with the Deputy Mayor, the City Solicitor, the
Commissioner of Finance and the City Manager.
5. Dates for Future Meetings
The next meeting will be with Mr. Nugent and the Committee concerning the Terms of
Reference. Mr. Yeomans will advise the Committee of the next meeting date, which
depends on Mr. Nugent's availability.
The meeting adjourned at 4:45 p.m.
Chairperson