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2018-06-13 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session June 13, 2018 MINUTES — OPEN SESSION FINANCE COMMITTEE MEETING JUNE 13, 2018 AT 4:45 PM 8t" FLOOR BOARDROOM, CITY HALL Present: Mayor D. Darling Councillor D. Merrithew Councillor G. Sullivan Councillor S. Casey Councillor D. Reardon Councillor G. Norton Also Present: City Manager J. Trail Deputy City Manager N. Jacobsen Commissioner of Finance and Treasurer K. Fudge Commissioner Growth and Development Services J. Hamilton Commissioner Transportation & Environment M. Hugenholtz Commissioner Saint John Water B. McGovern Comptroller Finance C. Graham Senior Manager Financial Planning H. Nguyen Deputy Commissioner Administrative Services I. Fogan Fire Chief K. Clifford Police Chief B. Connell Assistant Comptroller Finance and Administrative Services C. Lavigne Director HR & Finance Police M. Corscadden Senior Financial Analyst J. Forgie Administrative Assistant K. Tibbits 1. Meeting Called To Order Moved by Councillor Sullivan, seconded by Councillor Norton: RESOLVED that the Finance Committee move into open session. MOTION CARRIED. Councillor Merrithew called the Finance Committee open session meeting to order. 1.1 Approval of Minutes—April 7, 2018 Moved by Mayor Darling, seconded by Councillor Norton: RESOLVED that the minutes of April 7, 2018, be approved. MOTION CARRIED. (Mr. Stephen Lund and Mr. Jeremy Maillais, Deloitte, entered the meeting) Finance Committee Meeting Open Session June 13, 2018 1.2 2017 Consolidated Financial Statement Referring to the submitted report, Mr. Lund and Mr. Maillais reviewed the 2017 audit results. Responding to a question regarding fraud risk, committee members confirmed that they are not aware of any known instances of fraud. Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the submitted report from Deloitte entitled, Report on Audited Annual Financial Statements, be received for information. MOTION CARRIED. (Mr. Lund and Mr. Maillais withdrew from the meeting) Referring to the submitted presentation, Mr. Fudge provided an overview of the 2017 Consolidated Financial Statements. Notable achievements in 2017 include a reduction of approximately $5M in debt from the General Fund; small surpluses in both the General and Utility Operating Funds; increased investments in capital assets; and increased contributions to Operating and Capital Reserves. Responding to a comment, Mr. Fudge noted that the principal and interest paid to the General Operating Budget is approximately $16.5M which is equivalent to approximately $0.25 on the tax rate. Moved by Mayor Darling, seconded by Councillor Reardon: RESOLVED that the 2017 Consolidated Financial Statements be received for information. MOTION CARRIED. 1.3 April 2018 Year End Forecast Mr. Fudge commented on the April 2018 status and year end forecast, adding that these are early projections and subject to change. There is a $1.6M favourable variance on the revenue side, largely the result of LNG Revenue. The LNG assessment was not appealed, which resulted in an additional $2.1M in property tax revenue, triggering a claw back of $943K in the unconditional grant. Secondment revenue, short term interest revenue, and parking revenue also contributed to the favourable variance. In terms of the year end predictions, a surplus of $1.29M is forecast, which represents 0.8% of the budget. Responding to a question, Mr. Fudge confirmed that the surplus includes the financial assistance received from the province. Growth & Community Development, Police/PSCC, Fire & EMO Services, Transportation and Environment Services, Finance and Administrative Services and Corporate Services, spoke to their individual results and forecasts to date. Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the 2018 Year End Forecast, be received for information. MOTION CARRIED. Mr. McGovern reviewed the Saint John Water year-end forecast. Moved by Councillor Reardon, seconded by Councillor Casey: RESOLVED that the 2018 Year End Forecast for Saint John Water, be received for information. LTA IQ1[47►[4L1:k]k]11191 Finance Committee Meeting Open Session June 13, 2018 1.4 Capital Budget Policy Referring to the submitted report, Mr. Fudge stated that this is one of a suite of policies to guide the development of a long-term financial plan and to promote fiscal responsibility. Moved by Mayor Darling, seconded by Councillor Reardon: RESOLVED that the Finance Committee recommends that Common Council approve the Draft City of Saint John Capital Budget Policy FAS -005. MOTION CARRIED. 1.5 LNG Revenue Referring to the Operating Budget Policy's statement that non-recurring revenue be directed to one time uses and not for funding on-going services, Mr. Fudge recommended allocation of the net increase to Pay As You Go, in order to reduce the City's long-term debt. Moved by Councillor Reardon, seconded by Councillor Norton: RESOLVED that the Finance Committee refer the submitted report to Common Council with a recommendation to allocate the additional revenue for the LNG facility ($1,157,174) to Pay As You Go (Capital from Operating) for the purpose of reducing future borrowing needs; noting that the recommendation is supported by Council's Operating Budget Policy FAS -004. LTA IQ1[47►[4L1:k]k]1if91 1.6 Update on Flood Watch 2018 Referring to the submitted report, Ms. Graham provided an update on the 2018 flood, including the costs to date, noting that costs and recovery is still on-going. The City's cost estimate for the event must be submitted to the province by June 22nd. To date, the City has incurred over $1M in costs, some of which will be covered either through insurance or NB EMO. Costs not covered include regular wages, equipment costs, insurance deductible and non-refundable HST. Overall cost to the City is approximately $308,000. Moved by Councillor Reardon, seconded by Councillor Norton: RESOLVED that the submitted report entitled Update on Flood Watch 2018 be received for information. MOTION CARRIED. Adjournment Moved by Councillor Norton, seconded by Councillor Reardon: RESOLVED that the open session meeting of the Finance Committee be adjourned. LTA IQ1[47►[4L1:k]k]11191 The Finance Committee open session meeting held on June 13, 2018 was adjourned at 6:35 p.m.