2015-05-14 Finance Committee MinutesPresent:
Councillor Merrithew
Craig Lavigne
Councillor Strowbridge
Councillor Lowe
Councillor MacKenzie
Councillor Reardon
Greg Yeomans
Cathy Graham
Hilary Nguyen
Lloyd Foote - Deloitte
Jeremy Mallais - Deloitte
FINANCE COMMITTEE
CITY OF SAINT JOHN
MINUTES
WEDNESDAY, MAY 14, 2015 — 4:30 pm
John Nugent
Jon Taylor
Bill Edwards
Jacqueline Hamilton
Neil Jacobson
Kevin Clifford
Also present - Sherry O'Connor, Recording Secretary
Approval of Aqenda
Moved by Councillor Reardon
Seconded by Councillor MacKenzie
THAT the agenda of the May 14, 2015 meeting be approved as circulated.
CARRIED
Approval of Minutes
Moved by Councillor MacKenzie
Seconded by Councillor Lowe
THAT the minutes of the November 27, 2014 meeting be approved as
circulated.
CARRIED
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General Fund Financial Statements
Highlights — Greg Yeomans
The purpose of today's meeting is to review the General Fund and Water & Sewerage
Utility Financial Statements.
Department heads are in attendance to answer any questions from the Committee.
2014 Results
Revenues
The City received 100% of the budgeted revenue for Residential Property Tax and the
Unconditional Grant.
There is a recovery for most of the over expenditure in Police Services. The Police
Commission will speak to their budget when they send their results in to Council. They are
a separate Commission.
Parking is under budget due to the bad weather and less events going on.
Expenditures
Growth and Community Development are $754,987 to the good.
Public Safety shows $161,323 in the negative but the Police number of $892,902 is in
there. Fire Rescue and Suppression was $178,108 to the good.
Transportation & Environment Services are $2,367,199 in the red with the bulk of that in
Roadway Maintenance. In May last year, Mr. Edwards went before Council with a report
saying that this service area was projecting a $2.7 million over expenditure as a result of
snow clearing last winter.
Transit service — Greg will be taking their report to Council to talk about their results.
Transit's bottom line for 2014 is a shortfall of $334,367.
Administrative Services are $410,422 to the good.
Strategic Services are $342,566 to the good.
Legislated Services are $210,019 to the negative. The bulk of that is for the payouts for
the City Manager. They were budgeted in 2015 but were accrued in 2014 as per the
appropriate accounting treatment. These funds can be used to mitigate the $3.5 million
shortfall from the 2015 winter operations.
It is important to note that last November a report went to Common Council that indicated
at that point in time it was projected that there would be a $1.4 million deficit for 2014.
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We are at $933,059 so we are approximately $500,000 to the good.
The City Manager was unable to attend but he wanted Greg to highlight that when you
look across the board a lot of departments pitched in and did things to mitigate that
expenditure.
The General Fund is $933,059 in the negative but on the operational side we had a slight
surplus in 2014. The actuaries did an evaluation at the end of the year on the Heart and
Lung liability and LTD liability. The actuarial investment earnings assumption went from
4.48 to 3.47 from Jan 1 to Dec 31, 2014 which cost about $1.3 million in expenses. That
was approximately $780,000 on the Heart and Lung and about $530,000 on the LTD. The
General Fund is a really good news story except for that change. Without that the General
Fund would have broken even despite the fact that we were $2.7 million behind in May.
The bottom line is the $933,059 deficit will be the first charge in the 2016 budget.
The Finance Committee can get together again before these statements go to Council and
discuss what they would like presented.
Water & Sewerage Utility Statements
Revenue
Metered Accounts is $2,461,588 to the good. The bulk of this relates to a negotiated
settlement with Irving Oil. There is a lump sum payment from previous years of about $2.5
million dollars.
Other Revenue is $980,418 to the good. $380,000 in that number is recovery of insurance
proceeds from a fire at Musquash. There was $92,000 more in interest revenue than
budgeted and recoveries of $150,000 more than they budgeted which came from Fundy
Solid Waste.
Expenditures
Drinking Water costs and Industrial Water costs are below budget.
Other Charges is overspent because of the $2.5 million from the Irving negotiations being
placed into a reserve. That is the biggest variance in the fiscal charges.
Debt for Water and Sewerage Utility
At the end of 2014 versus the end of 2013 debt is actually down about half a million. In
2014, $4 million was borrowed and $4,293,000 was paid. By putting aside the $2.5 million
into a reserve this will enable the Utility to reduce capital borrowing.
We are well within the constraints of all our borrowing.
Deloitte will be on sight the first two weeks of June to do the Consolidated Financial
Statement Audit.
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The Consolidated Statements should be ready to go to Council the first week of July.
Motion
Moved by Councillor Reardon
Seconded by Councillor Lowe
THAT the General Fund and Water and Sewerage Utility Financial
Statements be received and filed.
The meeting adjourned at 6:00 p.m.
CARRIED
Councillor David Merrithew, Chairperson