2016-03-15 Finance Committee Open Session AgendaCity of Saint John
Finance Committee Meeting — Open Session
Tuesday, March 15, 201.6 at 5:30
Location: 11th Floor Boardroom, City Hall
1.1 Approval of Agenda
1.2 Approval of Minutes
1.3 Preliminary 2015 Yearend Operating Results Saint John Water
1.4 Water Accounts Receivable Update for end of February, 2016
November 12, 2015
Finance Committee Open Session
FINANCE COMMITTEE
CITY OF SAINT JOHN
MINUTES
THURSDAY, NOVEMBER 12, 2015 -4:30 P.M.
Present:
Councillor Merrithew
Kevin Fudge
Councillor Strowbridge
Cathy Graham
Councillor Lowe
Hilary Nguyen
Councillor Reardon
Valerie Farrah
Jeff Trail
Craig Lavigne
Also Present: J. Taylor, Common Clerk; K. Tibbits, Recording Secretary
Other: Jeremy Mallais and Geoffrey Cochrane, Deloitte
Regrets: Councillor MacKenzie
1. Call to Order
Councillor Merrithew called the open session meeting to order at 4:30 p.m.
1.1 Approval of Agenda
On motion of Councillor Reardon
Seconded by Councillor Lowe
RESOLVED that the agenda of November 12, 2015 be approved.
Question being taken, the motion was carried.
1.2 Approval of Minutes
On motion of Councillor Strowbridge
Seconded by Councillor Reardon
RESOLVED that the minutes of October 28, 2015 be approved.
Question being taken, the motion was carried.
1.3 Deloitte: The City of Saint John 2015 Audit Service Plan
Referring to the submitted report, Mr. G. Cochrane and Mr. J. Mallais of Deloitte provided an overview
of the 2015 audit service plan and responded to questions.
November 12, 2015
Finance Committee Open Session
As part of the audit process, Mr. Cochrane asked the committee members if any member was aware of
any suspected fraudulent activity to which the reply was negative.
On motion of Councillor Reardon
Seconded by Councillor Lowe
RESOLVED that The City of Saint John 2015 Audit Service Plan as presented by
Deloitte be received for information.
Question being taken, the motion was carried.
Adjournment:
The open session meeting of the Finance Committee was adjourned at 4:55 p.m.
Not-*"
March 15, 2016
Members of the Finance Committee
Finance Chair and Members of Council
RE: 2015 Preliminary Year End Results for Saint John Water
I 'K" 61111"0 13
The purpose of this report is to present the preliminary yearend financial results of the Utility Fund
for the year ended December 31, 2015 based on actual operating results as at March 7, 2016. The
results are preliminary as the financial audit is not complete.
SAINT JOHN WATER
The preliminary year -end financial results for the Utility Fund are presently in a surplus position of
approximately $667,000, which represents a variance of 1.57 %. This surplus is due to a combination
of a positive variance in operating expenses of approximately $1,105,000 offset by a shortfall in
revenues by approximately $438,000.
IRAV3QI Sul *1
The table below highlights the decreases in revenues for Saint John Water and the details are
included below:
2015 Utility Revenues - Budget vs Actual
Saint John Water 2015 2015
Approved Year End
2015 Preliminary Results Budget Actual VARIANCE
Revenues
Flat Rate Residential
18,794,000
18,531,586
- 262,414
Metered Accounts
19,092,000
18,755,454
- 336,546
Fire Protection
2,500,000
2,400,000
- 100,000
Storm Sewer
975,000
950,000
- 25,000
Other
1,010,000
1,295,758
285,758
Total Revenues
42,371,000
41,932,798
- 438,202
Flat rate residential has a negative variance of $262,000 as the budget was calculated using an
estimate of 16,580 flat rate accounts. The actual billings were for 16,375 for 2015. The decrease is a
result of flat rate conversions to metered accounts in a trailer park, as well as more demolitions and
abandoned properties than budgeted. In total there were 66 new accounts added, 203 accounts
deleted and 34 accounts changed. The metered revenue experienced a negative budget of $336,000.
Metered revenues experienced a shortfall to budget due to consumption falling below than budgeted.
Report to Finance Committee
2015 Year End Projections
Page 2
Fire protection and storm sewer revenues are under budget given the charges are calculated based on
operating expenses which are under budget. Other revenues were over budget by approximately
$286,000 due to an increase in interest charges, leachate revenue and HST rebate from MasterCard
purchases.
EXPENDITURES
The Utility Fund operating expenses were under budget by $1,105,000 for various reasons. (See
Appendix A attached for details).
Wages and benefits were in surplus by $186,000 due to vacancies in skilled worker positions, a
customer service specialist, operators and the Deputy Commissioner position. This was offset by a
budget deficit in overtime of approximately $334,000 due to the difficult winter conditions and
frozen services in early 2015.
Professional services were under budget by $415,000 in an effort to mitigate the overage in
overtime. Some planned projects were deferred and some other projects required more staff time to
research before proceeding.
Contracted services ended under budget by approximately $439,000 because there -A ere less breaks
than anticipated required less Utility cuts, as well as the contracted unit cost tendered lower than the
amount budgeted. Electricity was under budget by $237,000 because there was Iess pumping from
pumped from Musquash than anticipated.
Fiscal Charges were under budget by $515,000 due to less capital work completed than projected as
well as the City secured lower interest rates through debentures than budgeted for. Bad Debt
expense was over budget by $245,000 due to accounts that have been deemed uncollectible because
of bankruptcy or vacancy. This amount may be recovered through a pending sale of a number of
properties by the end of March.
In Other Goods & Services, tipping fees were over budget by $174,000 due to fully operational
harbor cleanup infrastructure and higher amount of sludge removal than budgeted. Operating
supplies were over budget by $252,000. This is primarily driven by pumping failures from an
increase in wastewater and rainwater in the system and the costs to fix or repair the pumps. Other
General Services were over budget by $110,000. This was a result of higher rentals because of the
harsh winter.
RECOMMENDATION:
It is recommended that this report be received and filed.
Respectfully submitted,
Cathy Graham, CPA, CGA
Comptroller, Finance and Administrative Service
Kevin Fudge, CPA, CA
Commissioner of Finance and Administrative Service
Report to Finance Committee
2015 Year End Projections
Page 3
Schedule 5 - 2015 SAINT JOHN WATER EXPENDITURES BY CATEGORIES
EXPENSES
2015 Budget
2015 Actual
Variance
Salaries & Benefits
1,238,000
1,220,994
17,006
Salaries & Benefits
9,420,589
9,234,813
185,776
Overtime
454,800
798,898
- 344,098
Total Salaries & Benefits
9,875,389
10,033,711
- 158,322
Goods & Services
9,925,000
9,925,000
0
Professional Services
1,022,700
607,856.15
414,844
Contracted Services
1,282,000
842,548.78
439,451
Electricity
1,873,730
1,636,329.13
237,401
Other Charges
Fiscal Charges
7,831,000
7,315,266
515,734
Pension
1,238,000
1,220,994
17,006
Other Charges (LTD, Contingencies)
369,000
331,152
37,848
Bad Debt
-
244,969
-244,969
Internal Charges
614,000
660,000
- 46,000
Capital from Operating
9,925,000
9,925,000
0
Reserve Funding
488,000
488,000
0
Total Other Charges
20, 465, 000
20,185, 381
279,619
Other Goods & Services
General Government
1,829,000
1,579,000
250,000
Water Supply Province
150,000
101,516
48,484
Fleet Charges and 'Fuel
1,438,482
1,367,220
71,262
Equipment & Building Maintenance
194,427
242,579
- 48,152
Insurance
168,751
150,086
18,665
Tipping fees & Waste Collection
185,500
359,252
- 173,752
Operating Supplies
2,211,336
2,463,540
- 252,204
Property Taxes
315,200
302,196
13,004
Training, Travel, Membership
102,000
49,943
52,057
Other Goods & Services
49,997
26,587
23,410
Other General Services
1,207,488
1,318,102
- 110,614
Total Other Goods & Services
7,85Z 181
7,960,020
-107,840
Total Goods & Services
32,495,611
31,232,135
1,263,476
TOTAL
42,371,000
41,265,845
1,105,154
Report Date
March 10, 2016
Meeting Date
March 15, 2016
Committee
Finance Committee
Members of the Finance Committee
SUBJECT: Water and Sewerage Accounts Receivable Update
OPEN OR CLOSED SESSION
This matter is to be discussed in open session of Finance Committee.
EXECUTIVE SUMMARY
STAFF REPORT
M &C 2015 -147 — In its July 20, 2015 meeting, Common Council adopted the following
resolution "the Finance Committee provide updates with respect with Water and Sewerage
Accounts Receivable to Council on a quarterly basis."
REPORT
As of February 29, 2016, Water and Sewerage Account Receivable balances were as follows:
Current: $9,680,795
Over 30: $363,505
Over 60: $241,829
Over 180: $1,997,304
Total: $12,283,433
Since the last Accounts Receivable reported as of October 31, 2015;
* Of the total Accounts Receivable $12,283,433, $9,680,795 is current and not yet due.
• Meter rate billing totaling $2,029,058 was billed Nov 30, 2015 and the latest amount of
$2,112,082 was billed on January 21, 2016, with a due date of February 22, 2016.
• Flat rate billing totaling $9,835,161 was billed on February 29, 2016, with a due date of
April 5, 2016.
• Payments collected on accounts totaled $8,102,302 and there has been 470 payment
plans satisfied totaling $391,861 included in the payments collected.
RECOMMENDATION:
It is recommended that this report be received and filed.
Respectfully submitted,
Craig Lavigne, CPA, CGA, H.B. Com
Assistant Comptroller, Finance and Administrative Service