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2012-12-10_Supplemental Agenda Packet--Dossier de l'ordre du jour supplémentaireCity of Saint John Common Council Meeting Monday, December 10, 2012 Location: Council Chamber Supplemental to Agenda 16.0 City Manager: Draft 2013 Operating Budget 16.19 City Manager: Proposed 2013 Water and Sewerage Rate Revision The City of Saint John Seance du conseil communal Le lundi 10 decembre 2012 Lieu: Salle du conseil communal Ordre du jour supplementaire 16.0 Directeur general : Budget de fonctionnement de 2013 provisoire 16.19 Directeur general : Augmentation proposee pour 2013 pour les services d'aqueduc et d'egouts REPORT TO COMMON COUNCIL December 8, 2012 His Worship Mayor Mel Norton and Members of Common Council Your Worship and Councillors, Subject: Draft 2013 Operating Budget E The City of Saint John The attached report sets out a proposed operating budget for the General Fund. It is prepared in the context of pension reform, Council priorities, P1anSJ and financial sustainability. It is based on two key assumptions namely that the City will eventually adopt the shared risk pension model and that we will be able to secure a multi -year accounting deferral for a portion of the additional pension expense incurred in 2011. The attached table sets out the financial impact of securing or not securing the deferral and /or proceeding or not proceeding with the SRP model. Staff will elaborate on these scenarios at the upcoming meeting. The cost of securing an LTD insurance program outside the pension plan has not yet been determined or included in this draft and this payment will impact the funding available. A summary expenditure adjustment table has been provided that shows the proposed change in service level and the cost of each change. The detailed Service Based documents (first draft) will not been amended until the status of the deferral and SRP model are known with certainty and Council has made a decision on the various service adjustments. This budget document is a starting point and I anticipate some amendments depending on the feedback received from Council. Respectfully submitted, J ?ckWoods CGA City Manager REPORT TO COMMON COUNCIL as December 6, 2012 His Worship Mayor Mel Norton and Members of Common Council The City of Saint John Your Worship and Councillors, Subject: 2013 General Fund Operating Budget The purpose of this report is to propose a 2013 General Fund Operating Budget and a property tax rate of $1.785. The Context Priorities Common Council pursued a deliberate and focused approach to establishing their strategic priorities for the next four years. Citizen input was solicited at ward meetings and through a formal Ipsos Reid satisfaction survey. An economic development plan, True Growth 2.0, was formulated after extensive consultation with private sector and other key stakeholders. Council then engaged in a priority planning exercise to set out their key objectives. At the same time, a Core Service Review process was initiated to look at comparable service benchmarks and to identify opportunities to improve services or reduce costs. While broad themes were evident certain pressing matters came to the forefront. A compelling need to solve the pension funding issue, the importance of re- investing in road improvements, the significance of creating a livable community with enhancements to recreation services, a focused and coordinated approach to economic development and the all- important need to address the issue of Clean Water were identified as top priorities. Implementation of the policies and principles of P1anSJ were also endorsed as a real opportunity to advance the well -being of Saint John and its residents through sound planning and development. Pension Funding Council, with the support of the Province of New Brunswick Task Force, commissioned an analysis of a Shared Risk Pension model as a means of rendering the pension plan both affordable and sustainable over the long -term. The City has already accrued a $195M liability and the funding situation has been deteriorating for a number of years. The Task Force reported that the current plan was unsustainable and would cost the City $26.2M per year to fund in future years with the risk of additional costs if the financial condition of the plan worsened. They assessed the option of converting to a Defined Contribution Plan and concluded that this would cost a minimum of $29M per year as the City would be obligated to retire the existing $195M liability and contribute to the Defined Contribution Plan. Their Page 2 analysis of the Shared Risk model indicated that total annual plan contributions could be reduced to $16AM and that the City's risk exposure would be limited to an additional 2.75% of payroll if the plan condition worsened. The Task Force recommended that the City adopt the Shared Risk Model, The City has provided $22.7M in the 2012 operating budgets for the General Fund and Water Utility and with a move to the Shared Risk option (with the deferral) the City's General Fund portion of the savings would result in an immediate reduction of approximately $4,340,000 in the required contribution to the pension plan in 2013. A portion of the projected savings must be used to absorb the -st of existing LTD claims which will no longer be an eligible expenditure in the SRP model- The total annual cost will amount to $1.97M of which all but $191,000 will be in the Operating Budget. This payment obligation will diminish with time as the beneficiaries turn 65 and move to regular pension status. The City was unable to conclude the pension reform process as planned in 2011 and therefore was obligated to contribute more than originally budgeted. This translated into a net shortfall of $3.6M in the overall 2011 financial results. While the required amounts have been paid to the plan the City has requested an `accounting' deferral that would allow the contribution to be recognized over an extended number of years. This will avoid a substantial deficit in 2011 and allow the savings from the Shared Risk Plan to be re- invested in needed services. PlanSJ Clearly, implementation of P1anSJ offers a transformative opportunity for our community. It establishes a well- defined baseline for future policy development, targets higher density development and future growth in the primary development area and yet still provides a range of rural, suburban and urban lifestyles for citizens to choose from. It is also evident from the Core Service Review that future deliberations on service delivery will have to consider service level options both inside and outside the primary development area. This will be an evolving debate but it offers the potential for lower costs as well as more effective and more efficient service delivery. PlaySJ The preliminary results of the PlaySJ review concluded there is an over - abundance of parks and playgrounds and as a result the quality of the facilities has been compromised. It points to the need to concentrate on improving quality rather than quantity. The PlaySJ report will be released shortly and an opportunity for public input will be provided. It is anticipated that little used or substandard facilities will be taken out of service in favour of allocating the available resources to those that are in active use and can serve larger areas. The 2013 Operating Budget as presented is predicated on the City adopting the shared risk approach and securing the requested accounting deferral. PlanSJ Clearly, implementation of P1anSJ offers a transformative opportunity for our community. It establishes a well- defined baseline for future policy development, targets higher density development and future growth in the primary development area and yet still provides a range of rural, suburban and urban lifestyles for citizens to choose from. It is also evident from the Core Service Review that future deliberations on service delivery will have to consider service level options both inside and outside the primary development area. This will be an evolving debate but it offers the potential for lower costs as well as more effective and more efficient service delivery. PlaySJ The preliminary results of the PlaySJ review concluded there is an over - abundance of parks and playgrounds and as a result the quality of the facilities has been compromised. It points to the need to concentrate on improving quality rather than quantity. The PlaySJ report will be released shortly and an opportunity for public input will be provided. It is anticipated that little used or substandard facilities will be taken out of service in favour of allocating the available resources to those that are in active use and can serve larger areas. i Fiscal Responsibility An overarching theme during Council's deliberations was the need to act in a fiscally responsible manner. In practice this means living within the available revenue envelope, avoiding a tax rate increase, focusing on the long -term interests of the community, managing our debt obligations, balancing expenditures to ensure that a range of community needs are addressed and ensuring that short-term decisions do not compromise our ability to respond to new opportunities or address emerging challenges. The availability of additional funds does not eliminate the need to exercise good judgment in the use of public funds. The base budgets for each service area were prepared on the assumption that current service levels would not increase. In other words the savings and reductions applied in previous years will be retained. The proposed budget provides for selective service enhancements based on Council's priorities and the public feedback during the community consultations. Revenues The City is legally obligated to present a balanced operating budget. Effectiely, expenditures cannot exceed the available revenues. The three main sources of revenue for the City are property taxes, the Community Funding grant transfer from the Province and proceeds from the sale of services. Total revenues are projected at $147,914,458 for 2013 an increase of 3.272M$ or 2.26% over 2012 with $118,239,743 derived from property taxes at the current $1.785 tax rate, $18,579,923 from the Provincial transfer and $11,094,792 from levies, fines and the sale of goods and services. There are no increases in service charges for recreation, parking, building permits or development applications proposed in this budget; Expenditures The 2013 operating budget (Schedule A) proposes total expenditures of $147,914,458. Approximately $2.65 million was necessary to simply absorb increased costs of wages, insurance, fuel and other base expenditures. Each department's service based budget submission documents the planned service objectives and required resources for next year. The focus areas for the proposed budget directly reflect the priorities established by Common Council and our statutory responsibilities. The more significant allocations and adjustments proposed for 2013 are noted below. Pension — the proposed budget is predicated on the City eventually adopting the Shared Risk Pension Model. The SRP model requires minimum funding of 30% of payroll or $16AM million. There is also a necessity to transfer the annual cost of LTD benefits ($1.78M), which are not permitted under the SRP approach, from the pension plan to the operating budget. The net impact is a year over year cost reduction for pension of $2.56M for 2013. The cost sharing mechanism for a an insured LTD plan has yet to be determined. PlanSJ — actual implementation of P1anSJ requires revising the Building Bylaw, Zoning Bylaw, and Subdivision Bylaw, establishing Infrastructure Guidelines and creating a Stormwater Bylaw as well as amending the Water and Sewerage Bylaw. This is a complex and involved process that is dependent on having qualified and capable professional resources. This is not a process that can be left to evolve over an extended number of years. Rather it is important that the development community understand the rules of the road and it is equally important that the policies be well defined so that the desired process improvements can be properly formulated. The 2013 budget retains a full staff complement in the Growth and Development Department and provides an additional $180,000 for two contract positions to assist in moving these various elements forward on a timely basis. It is anticipated that legal services will be directly impacted by the additional workload and a lump sum of $50,000 has been provided to secure supplemental resources. Roads and Sidewalks — there is universo recognition that additional work needs to be undertaken to improve the overall condition .of our road and sidewalk network. The City Engineer has advised that in order to target a Pavement Condition Index of 80 the 2013 operating budget would have to be increased from the current $3.1 M to $4.4M. In addition the operating budget for curb and sidewalk work would have to be increased by $150,000. Both envelopes are increased accordingly. It is recommended that the current level of service for sidewalk snow plowing remain at the current 61 % coverage target. Recreation and Parks Services- a range of quality recreation opportunities for children, adults and seniors is a 'fundamental necessity in a livable attractive community. The budget contemplates providing a free recreation component at each of the community centers ($60,000), a partnership with the ONE Change to operate the Nick Nicolle Community Centre ($30,000), enhancing youth participation ($72,500) with additional casual resources, summer operation of Mispec Park ($45,000) and Lifeguard services extended until September 2 °a ($30,000). Transit — The base budget for the Transit Service necessitates a $947k funding increase just in order to cover recurring debt charges and other inflationary adjustments. It is proposed that an additional $350,000 be allocated to the service to specifically target evening service in priority neighbourhoods, the Hospital /UNB route and morning service. It is projected that this extra funding will yield approximately 7 -8,000 additional service hours. The Transit Commission should be required to present Council with a detailed implementation plan including not just service hours but also ridership usage as well as demonstrating how service improvements are consistent with the P1anSJ direction and identify any needed capital investments prior to accessing the additional funds. Funding in subsequent years should be dependent on successful achievement of desired outcomes. Economic Development — the adoption of True Growth 2.0 and Council's stated priority to have an integrated and coordinated approach to Economic Development will create new opportunities for the community and the region. It is proposed that the Economic Development envelope be increased by ($143k) to ($2.3M) with the additional funding going to Enterprise Saint John in order to allow it to take a leadership role in the implementation of the True Growth 2.0 initiative. New wealth creation and tax base growth will provide the revenues needed to deliver affordable services in the future. Given the changing role of the Provincial development agencies it would be appropriate to request an updated Service Level Agreement from ESJ showing how their efforts will complement the new mandate of the Provincial development agencies. Dangerous Building Enforcement — The budget provides for an increase in resources ($195k) in order to double the enforcement program (dangerous /vacant/unsightly). Enforcement activity protects the residents of these buildings, reduces the risk to neighbouring properties, improves neighbourhood safety and encourages owners to take timely remedial action on at risk buildings. The question of how to encourage new development or to just improve the appearance of vacant lots will have to be addressed in due course. Arts Culture Activities — a thriving arts and culture scene is a hallmark of a vibrant and livable community. The proposed budget retains commitments to the Arts Centre ($75k) and Imperial Theatre ($337k) through the Regional Facilities Commission and also includes funding for the Saint John Theatre Company ($10k), Salty Jam ($20k), the Fundy Fringe Festival ($5k), the Regional Library ($456k) and the Community Arts Board ($35k). Community based activities on Canada Day, New Year's Eve, as well as the Mayor's Levee will also be funded. Neighbourhood Support — the base budget contained a $150,000 funding envelope to provide support to the various associations and development groups particularly in the priority neighbourhoods. The City will be moving from a direct program provider to a program facilitator role in the delivery of recreation programs with greater emphasis on community engagement. It is proposed that an additional $50,000 be provided to deliver community development grants that could be used to leverage additional private sector or community support for needed programs. A means of determining the return on investment for this type of financial support is currently being studied by graduate students at UNBSJ. Regardless of the methodology Council should be looking for solid outcomes from each of the organizations benefitting from this financial support. Fire Service — the first draft of the Fire Service budget includes the full amount for the arbitrated wage settlement. In effect, this group of employees would have avoided the wage freeze requested and adopted for all other employee groups. This creates a fundamental inequity between the wage treatment of the employee groups that cannot be ignored. It is proposed that the departmental budget be adjusted on the assumption that there were no wage increases for the members of Local 771 in 2011 and 2012. This would result in a reduction of the initial funding request by $560,000 for 2013. The vast majority of fire service costs are salary related and this adjustment will mean a consequent reduction in staffing strength in the department. The Fire Chief will develop a staffing plan in line with the proposed level of funding. City Clean Up — there continues to be interest in re- instating the City wide spring clean-up program. It is estimated that this service would cost approximately $380k annually. Staff are suggesting that given the availability of the large item pick -up service and the white goods drop - off program it may be more beneficial to the entire community to first explore the potential for curb side pick -up of recyclables. Once a cost comparison is completed Council can consider the available options for the 2014 Budget year. Value for Money — each year the City identifies a service area for an in -depth value for money review. In 2011 a Fleet Review was undertaken and in 2012 a Mobile Communication Services review was completed by our IT department. It is proposed that a value for money review of Legal Services be undertaken in 2013. This review will not require additional funding. Instead it is proposed that we move to a bi -annual Ipsos Reid satisfaction survey and redirect the available funds ($50,000) for the value for money project. Should sufficient funding be available it is suggested that Engineering Services also be reviewed. The Citizen survey would then be undertaken in 2014 and again in 2016. Corporate Strategic Plan — Common Council has identified its priorities for its term of office. It is now imperative that the organization fully embrace and implement these key goals. A review and update of the Corporate Strategic Plan will ensure that corporate plans and initiatives are supportive of and contribute to Council's objectives. It will also provide a clear and common understanding across the organization of our overall direction* priorities and objectives. The plan will require limited outside resources ($25k) and will be led by our Corporate Planning staff. Core Service Review — The second phase of the Core Service Review will begin in 2013 with a budget of ($50k). The information gathered will provide peer benchmarks, identify opportunities for additional revenue, new approaches to service delivery and generally assist in challenging the status quo. Implementation of the results of the first phase of the review will also begin next year with particular attention to; • Triggers for multi=lex el Medical First Responder'Calls in the Fire Service • Winter day time vs night time shift deployment for snow removal • Arena staff redeployment — daytime operations • Turf maintenance with consolidation and new remote operation site • 3 year civilianization Plan for Police Services with cost reduction targets • Begin public consultation on right sizing of parks /playgrounds /fields YM -YWCA — the City has agreed to provide property to facilitate the development of the new YM -YWCA. This facility will introduce a marked increase in services in the Crescent Valley area and will also allow the City to refine its program delivery in this neighbourhood. The Y has requested that they be provided relief from the building permit and plumbing fees. It is estimated that their costs will total approximately $175,000. The City cannot exempt individuals or organizations from such fees however it can provide a grant to offset the cost incurred. The budget will show revenue for the permit fees and a grant for the same amount in the expense budget. Regional Service Commission — the Province of New Brunswick has begun implementation of Regional Service Commissions across the Province, including the Greater Saint John area, as part of its Local Governance Reform process. The Commission will initially be responsible for solid waste management, regional planning and EMO planning. It is hoped that a formal regional structure will also lead to more sharing of services at the regional level. The City's contribution to the 2013 Commission is $42,054. LEM Revenue Opportunities — the City introduced increases to ice time rates and development fees during 2012 as well as a small increase in parking meter rates. The primary focus in 2013 will be to pursue contracted service rates with other agencies. The Fire Service has identified some potential revenue generation opportunities and will be developing a bylaw for Council's consideration. Tax Rate Reduction The potential for a tax rate reduction was raised in the context of potentially offsetting some of the proposed increase in water rates. The water rate issue has largely been mitigated in the revised rate submission. A tax rate reduction is much like a corporate dividend in that it should not be extended unless there is certainty that it can be sustained for an tgptended period, The decision to provide a tax reduction rests with Council but should be made full consideration of the current and projected financial position of the City. More particularly, the City will be facing reductions in the order of $350 -400K per year in the provincial grant transfer for both 2014 and 2015. in addition, the rate of tax base growth is expected to slow given the relative lack of major development in the community. As well, because of the significant increases to the pension contribution envelope in recent years there is a real service backlog in various service areas (transit, recreation, roads etc.). Finally, we are only in the first year of the pension reform process and some financial flexibility should be retained until all the implications are fully known (LTD,, deferral, Market returns etc.) It is staffs opinion that the financial position of the City first be fully stabilized and that a tax rate reduction be considered only when there is more certainty with respect to the concerns previously noted. Establishment The approved establishment sets out the number of permanent employee positions included in the budget and acts as a control mechanism for Council in that any change in the total number of permanent positions requires Council approval. Schedule D attached establishes the number of permanent positions funded in the budget at 647 for the coming year (a net reduction of one position). Wage Increases The operating budget includes contracted wage increases for our unionized employees as set out below. A 2.5% wage adjustment for the management, non -union and professional employees is proposed for 2013. With the exception of Local 771 each of the unionized groups has had a two year wage freeze applied to their scheduled adjustments. The non -union group has had three years of wage freezes in the last four years. Page 8 City of Saint John - Comparative Salary Increases 2005 - Present Year Management Loca1486 Local 771 Loca118 SJPA Increase % Increase % Increase % Increase % Increase Expiration of Dec 31, Collective 2014 Dec 31, 2014 June 30, 2014 Dec 31, 2012 Agreement 2005 2.90% 3.00% 4.00% 2.75% 4.00% 2006 3.00% 3.00% 4.00% 2.75% 4.00% 2007 3.25% 3.00% 6.00% 3.25% 4.50% 2008 2.50% 3.50% 5.75% 3.25% 5.75% 2009 0.00% 3.25% 4.50% 3.50% 4.50% 2010 0.00% 3.25% 4.50% 3.25% 5.25% 2011 2.90% 3.00% 2.00% 0.00% 0.00% 2012 0.00% 0.00% 2.00% 0.00% 0.00% 2013 2.50% 0.00% 4.00% 3.00% N/A 2014 N/A 2.90% 4.00% 1.50% N/A Total 17.05% 24.90% 40.75% 23.25% 28.00% Annual Avg. 1.89% 2.49% 4.08% 2.33% 3.50% Citizen Responsibility The City continues its efforts to identify efficiencies and cost reductions in its day to day operations. Citizens also have a role to play in helping to control service delivery costs. Off street parking during winter storms directly reduces snow clearing costs, recycling plastics and metals reduces our solid waste charges at the landfill, using the compost bin reduces our costs by another $75 per tonne. Likewise, fixing faulty alarm systems reduces the waste of fire and police resources. Individual actions may not seem like they make a difference but taken across the community it does make a significant difference. Conclusion With the exception of the new costs for the City's share of the Regional Service Commission, each of the enhanced investments is intended to contribute to the achievement of Common Council's priorities and to respond to identified community needs. Council identified three broad focus areas when establishing its priorities; Economic Health, Community of Choice, and Sustainable Infrastructure. Enhanced enforcement of the dangerous and unsightly bylaw provisions coupled with new emphasis on recreation programming, arts and culture activities and improved transit services will all contribute to creating a vibrant and livable community. The pension reform, value for money review, Core Service Review and the updated Corporate Strategic Plan will help to ensure that public resources are used in a responsible manner and maintain a healthy financial position. The major new investment in road repairs will benefit the entire community with improved infrastructure while continued support for priority neighbourhoods will support revitalization of these areas. Finally the commitment to a coordinated economic development strategy and aggressive implementation of the core elements of P1anSJ will help to create new wealth in the community and create the environment for sound development in the years ahead. Recommendation Respectfully submitted, J. Patrick Woods CGA: City Manager } e In 000's Surplus /Deficit With Deferral Without Deferral With SRP Oct 1, 2012 Without SRP Oct 1 In 000's With SRP Without SRP With SRP Without SRP With SRP Without SRP 2013 General Operating Budget Scenario Analysis 2011 2012 2013 2014 -$ 3,574 2015 $ 360 -$ 360 -$ 360 $ 31574 $ - $ - $ 1,400 $ 4,700 $ 41200 $ 3,800 $ 3,500 -$ 41200 -$ 4,900 -$ 51700 2013 With Deferral Without Deferral $4,340 - $41560 $1,126 - $7,774 2014 With Deferral Without Deferral $3,840 - $5,260 $4,200 - $4,900 2015 With Deferral Without Deferral $3,440 - $61060 $3,800 - $51700 07/12/2012 The City of Saint John 2012 Budget Summary Tax Revenue $ 114,5045447 $ 118,239,743 2013 Difference $ - $ (0) - 2012 PROPOSED BUDGET BUDGET VARIANCE Total Expenditures: $ 14476425653 $ 147,9149458 $ (3,2717805) Less: Non -Tax Revenue: $ (11,2195478) $ (11,094,792) $ (124,686) $ 133,423,175 $ 136,819,666 $ (3,3967491) Unconditional Grant $ 18,9185728 $ 18,5799923 $ (338,805) Net Budget $ 114,504,447 $ 118,2391743 $ (3,7351296) Tax Denominator $ 67414,814,937 $ 6,6241075,264 Tax Rate $ 1.7850 $ 1.7850 Tax Revenue $ 114,5045447 $ 118,239,743 39735,296 Difference $ - $ (0) - 0 N H O N N H 0\0 O > t E o E y � C � f0 y � OO O j Y m V N CD N N w c l7 N N Ln `� w M 0 0 0 n O M N N � 0� 0 0 M O v H O m � M m y O O � a° N N o D � 00 y N N M > . lDD U N OJ d N l�O Q C Om5 o y v1 y ' O 6 N 1� � cO O > 0 N n N O d' N O N W N> C m N �/i r O' V1 m w w a w w m y m a C m O OO c 0) n 00 H l0 v1 �+ N .r t W 000 v^i a r VUi E C V CO N M 0) lD L v m 00 o H E M c N' 3 N Q O - E 6 E > N L N N U E (D 2 d m O v 3 w a o -o c l7 v � v ° v m N •` v d 0 O > 3 o — m E v Q d _Y_ C C .Q n O O O C y C O U 0p O O " ° Q CL E m r u v Q n O c U a O Q L 0a L O C y O AL+ c 3 CLO c W E U D ? w ) O C O d O O O O M h yE OQ O a a d n 0 M N lO Ol n 00 m ry o O Lq M o m 0 a L 0) LO 00 N N 0 0 v V m O O R1 0/ c-i O' M 00 �o w m m in 0 m v p M m m m �-� ti ry 00 LO H O 0) ry N .i T oo m v1 M m m � C 0 O m M M m M M 01 rA n 00 N CL p N N dL > t E o E y � C � f0 y � OO O j Y m V N CD N N w N l7 N N Ln `� w M 0 0 0 n O M N N � 0� 0 0 M O v H E m � M m y O O � a° N N o D � 00 y N N M IDD . lDD U OJ d N l�O Q C Om5 o y v1 y ' O 6 N 1� 01 cO O > 0 N n N O d' N O N W N> C m N �/i r O' V1 m w w a w w m y m °m C m O OO 0) n 00 H l0 v1 �+ N .r t W 000 v^i V r VUi p C V CO N M 0) lD L v m 00 H E M U N' 3 N Q E 6 E > N L N U Q (D 2 d m > t E o E y � C � f0 y � OO O j Y m V N CD N N N E Q L L @ E C Y O 0 O W m u a � o ' a 0 G o4 o m a a O V T G U a n o u o> o 0 3 > w o n C W C 0 W O= E T U N U v E m m m E E o v z E •� N O .� O O¢ O p O F- w rv+ O U a °o. v L p Q c a N U u c p t V G 0 v c E E R v n E d y p W U p C a Q W > c of ,y a > C C P L p 4J t p V1 0 0 o i Y 9 y p C C vi0t S U Q � vpj w U U .i O! 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N G T L s E o E t � N pOp O 3 T m Y V N O N H OJ V u1 OJ h .0 Q \ 01 u C O C (0 0 C O 00 C Z ti L w O O O O O O u c n 0 W V1 00 m w Un o n O in �D 0 O 00 Cn 00 .ti I� N m H N 00 V V ti Ln O r4 � O E N n N ti O m M Ln V O1 M H M 01 ll1 M N 00 O to N N In H In H m m o0 u_ v E \ c 0 N C N C C O u Y N v 0 0 0 0 N 0o O) o h o OJ m M O 00 00 O N N 00 Kt I� L O M to to m 0 o M n m m o0 u_ cz u f6 � O E O Q o U Y 04 O O > O U O U ` d u c n u d a -6 L ` l0 C ` N u L� (U 00 O f0 E o � a O � a C U C d u a y O N 3 _ >O N � O L N Y C U Q Q m O 00 O E E & v "0 0 M 00 ° Y o v � 2 U C U O H v E \ c 0 N C N C C O u Y N v 0 0 0 0 N 0o O) o O o OJ m M O 00 00 M N N 00 Kt I� N N M to to m 0 o M n m m o0 00 00 �o N V O) O O °m OJ Y L C v O_ cu N O M M ml O U N O N m m o0 00 00 �o N n M W M m M N ti N 00 n Ln n Ln N N r �u OJ Y L C v O_ cu N O '6 U U U U O a " u O N f6 � O E � EO o U Y 04 o 0 O U O U ` `o u c n M W M m M N ti N 00 n Ln n Ln N N r OJ O_ H O '6 U U t0 � a " u O N v � v a v° o b.0 O O ` `o u c n u d a -6 L ` l0 C ` N u L� (U 00 O O L 3 y V � C O m u a y N 3 _ N N � C 7 OF- U Q Q � m o F n � o o 0 M 00 � M v � n M W M m M N ti N 00 n Ln n Ln N N r h O1 H O U U y a v° b.0 O ` w v U n C U O C ` N u L� (U 00 L 3 y U j C O m a O _ 0 0 a0+ O U C o a+ F REPORT TO COMMON ­I December 8, 2012 His Worship Mayor Mel Norton and Members of Common Council Your Worship and Councillors, Subject; Proposed 2013 Water and Sewerage Rate Revision The City of SWM John The first draft of the 2013 Water and Sewerage Budget included a proposed rate increase of $72.00 or a 7.4% increase over the 2012 rate for flat rate customers. An equivalent adjustment would be applied to the metered customers. Council was also advised that there would be continued upward pressure on water rates as the City moved torward to invest heavily in the Clean Water program. Council expressed some concern about the impact of the proposed rate increases on homeowners in general and those on limited or fixed incomes in particular. Council requested that various mitigation measures be explored to lessen the impact of the proposed rate increase. Staff advised that adoption of the Shared Risk Pension model would ease pressure on the Water Utility budget and any resultant savings could be applied to lower the anticipated increase. A lower overall rate increase is the most equitable mitigation measure as it applies universally to all customers. An analysis was completed in the past week to determine exactly how rates would be impacted if the contribution rate proposed for the City (13% CSC and 17% PSC) as outlined in the Shared Risk model were applied to the Utility budget. The total amount budgeted for pension contribution in the first draft was approximately $3,000,000. The amount required under the Shared Risk Plan is projected to be approximately $2,000,000.The net effect is to reduce the proposed rate increase from 7.4% to 3.7 %. SJ Water 2013 Proposed 2013 Revised Flat Rate (% /$) 7.4%/$72 3.7 %/$36 Metered Service Charge No Change No Change Consumption 7.4% 3.7% Page 2 A revised bylaw amendment schedule is attached for Council's consideration. The new rates can be adopted at third reading. Given the need for rate certainty and the need to make the necessary adjustments to the billing system, should Council decide not to pursue the Shared Risk Plan it is proposed that the revised rate still apply for 2013 and that the Capital from operating account be used to cover any resulting shortfall. While this approach will serve to increase borrowing costs it would be a temporary measure for the 2013 year only. It is important to note that a full water rate review will be carried out in 2013 and the P3 business case will also be completed. The outcome of both these initiatives will have a direct impact on future rates. The 2014 rate will then be revised to reflect the combined effect of these initiatives and any adjustment for actual pension contributions. As noted, Council also requested that staff exploring other mitigation measures. Staff are considering a variety of options and will have to assess our bylaw authority to implement such measures. These efforts will be examined in more depth and a report will be presented to Council in the New Year. The proposed rate adjustment will nevertheless provide immediate relief to all customers. Recommendation That Common Council approve the revised 2013 rate schedule as attached and adopt same at Third Reading of the Water and Sewerage Bylaw amendment process. R ectfully submitted, trick Woods CGA City Manager 07/12/2012 SAINT JOHN WATER SERVICE BASED BUDGET 2013 -2016 Fiscal Charges Debt servicing 2- Bud et 20 9 Bud ei F2014 orecast 2015 Forecast 2016 Forecast Operating Expenditures 5,605,000 6,485,000 8,692,000 9,642,000 9,825,000 Drinking Water 15,438,000 15,714,000 17,582,000 20,020,000 22,254,000 Watershed Management 249,000 244,000 248,000 252,000 256,000 Water Treatment 2,092,000 2,076,000 2,097,000 2,118,000 2,139,000 Water Pumping & Storage 996,000 1,086,000 1,101,000 1,116,000 1,132,000 Transportation & Distribution 4,370,000 4,456,000 4,517,000 4,579,000 4,643,000 Customer Metering 667,000 708,000 719,000 730,000 741,000 Industrial Water Storm Sewer Levy 1,060,000 1,100,000 11100,000 1,120,000 Watershed Management 476,000 403,000 408,000 413,000 418,000 Water Pumping & Transport 822,000 1,063,000 1,081,000 1,099,000 1,118,000 Customer Metering 104,000 100,000 102,000 103,000 105,000 Wastewater Flat Rate - Water & Sewerage 972 1.008 1,080 1,164 Wastewater Pumping 2,097,000 2,180,000 2,213,000 2,247,000 2,281,000 Wastewater Collection 2,520,000 2,604,000 2,646,000 2,687,000 2,730,000 WasteWater Treatment 4,398,000 4,208,000 4,277,000 4,346,000 4,418,000 Infrastructure Management Block 3 0.2466 0.2557 0.2739 0.2952 Municipal Engineering 1,306,000 1,099,000 1,103,000 1,121,000 1,139,000 Other Internal Charges 509,000 542,000 555,000 565,000 576,000 Net pension costs 883,000 1,196,000 1,196,000 1,196,000 1,196,000 21,489,000 21,965,000 22,263,000 22,572,000 22,892,000 Fiscal Charges Debt servicing 9,833,000 9,229,000 8,890,000 10,378,000 12,429,000 Capital from Operating 5,605,000 6,485,000 8,692,000 9,642,000 9,825,000 Total Fiscal Charges 15,438,000 15,714,000 17,582,000 20,020,000 22,254,000 Total Expenditures 36,927,000 37,679,000 39,845,000 42,592,000 45,146,000 Revenues Flat rate Accounts 16,065,000 16,665,000 17,860,000 19,266,000 20,471,000 Metered Accounts 17,377,000 17,419,000 18,390,000 19,531,000 20,510,000 Fire Protection Levy 2,200,000 2,270,000 2,270,000 2,450,000 2,800,000 Storm Sewer Levy 1,060,000 1,100,000 11100,000 1,120,000 1,140,000 Other revenues 225,000 225,000 `2200 225,000 225,000 Total Revenues 36,927,000 37,679,000 39,845,000 42,592,000 45,146,000 Flat Rate - Water & Sewerage 972 1.008 1,080 1,164 1,236 Meter Rates. Block 1 1.0974 1.1380 1.2188 1.3139 1.3953 Block 2 0.6988 0.7247 0.7761 0.8366 0.8885 Block 3 0.2466 0.2557 0.2739 0.2952 0.3135 Debt Service Ratio 26.63% 24.49% 22.31% 24.37% 27.53% Page 1 of 1 BY -LAW NUMBER M -16 A BY -LAW TO AMEND A BY -LAW RESPECTING WATER AND SEWERAGE Be it enacted by the Common Council of The City of Saint John as follows: A by -law of the City of Saint John entitled "A By -law Respecting Water and Sewerage" enacted on the 7"' day of June, A.D. 2004, is hereby amended as follows: 1 Schedules "A" is repealed and replaced with the following: SCHEDULE "A" Effective January 1", 2013 Flat rate customers Flat rate customers Yearly Water charge $454.05 ARRETE No M -16 ARRETE MODIFIANT L'ARRETE CONCERNANT LE RESEAU WEAU ET D' EGOUTS Lors d'une r6union du conseil municipal, The City of Saint John a d6cr6t6 cc qui suit: Par les pr6sentes, Parr&d de The City of Saint John intitul6 « Arret6 concernant les reseaux d'eau et d'egouts >>, d6cr&6 le 7 juin 2004, est modifi6 comme suit: 1 L'annexe « A >> est abrogde et remplac6e par cc qui suit : ANNEXE <(A)> En vigueur le 1`r janvier 2013 Tarif forfaitaire pour les clients Tarif forfaitaire pour Tarif 454,05$ les clients annuel 216.36 Redevance sur 1eau 36.06 20mm 2 Schedule `B" is repealed and replaced with the 2 L'annexe « B n est abrog6e et remplac6e par cc following: qui suit: SCHEDULE "B" Effective January 11t, 2013 METERED CUSTOMERS — WATER SERVICE CHARGE Meter Size Yeari $) Monthly $ Bi- Monthl ($) 15mm 216.36 18.03 36.06 20mm 264.84 22.07 44.14 25mm 361.68 30.14 60.28 40mm 475.56 39.63 79.26 50mm 948.72 79.06 158.12 75mm 1,971.48 164.29 328.58 100mm 3,428.52 285.71 571.42 150mm 5,388.24 1 449.02 898.04 200mm 7,742.40 645.20 1,290.40 250mm & UP 10,485.96 873.83 1,747.66 METERED CUSTOMERS — CONSUMPTION CHARGE Monthly (by ln Bi- Monthl (by m Consumption m;} Rate $/m3.) Consumption m' Rate ($/m' For the first 50 1.1380 For the first 100 1.1380 For the next 124,950 0.7247 For the next 249,900 0.7247 For all in excess of 125,000 0.2557 For all in excess 1 of 250,000 0.2557 Spillage 0.1100 Spillage 0.1100 IN WITNESS WHEREOF The City of Saint John has caused the Corporate Common Seal of the said City to be affixed to this by -law the day of December, A.D. 2012, and signed by: Mayor /maire ANNEXE <(B)) En vigueur le 1 of j anvier 2013 CLIENTS AVEC COMPTEUR —TARIF DES SERVICES D'EAU Dimension du compteur Tarif annuel ($) Tarif mensucl $ Tari bimensuel($) 15mm 216,36 18,03 36,06 20mm 264,84 22,07 44,14 25mm 361,681 30,141 60,28 40mm 475,56 1 39,63 1 79,26 SOmm 948,72 1 79,06 158,12 75mm 1971,48 164,29 328,58 100mm 3428,52 285,71 571,42 150mm 5388,24 449,02 898,04 200mm 7742,40 645,20 1290,40 250mm et plus 10 485,96 873,83 1747,66 CLIENTS AVEC COMPTEUR— FRAIS DE CONSOMMATION Mensuel (par m ) Bimestriel (par in) Consommation Frais Consommation Frais m1} ($ /rn ) (m) $/m3} Pour les 50 1,1380 Pour les 100 1,1380 Premiers premiers Pour les 0,7247 Pour les 0,7247 124 950 249 900 suivants suivants Pour toute 0,2557 Pour toute 0,2557 consommation consommation au -deli de au -delA de 125 000 1 250 000 Renversement 1 0,1 10OLRcrtyersement I O,11IX1 EN FOI DE QUOI, The City of Saint John a fait apposer son sceau municipal sur le present arr&6 le decembre 2012, avec les signatures suivantes : Common Clerk/Greffiere communale First Reading - December 3, 2012 Premiere lecture - le 3 decembre 2012 Second Reading - December 3, 2012 Deuxieme lecture - le 3 decembre 2012 Third Reading - Troisi6me lecture -