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2018-07-24 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session July 24, 2018 MINUTES — OPEN SESSION FINANCE COMMITTEE MEETING JULY 24, 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: Commissioner of Finance and Treasurer K. Fudge Commissioner Saint John Water B. McGovern Comptroller Finance C. Graham Senior Manager Financial Planning H. Nguyen Director Corporate Performance S. Rackley -Roach Assistant Comptroller Finance and Administrative Services C. Lavigne Deputy Commissioner Building & Inspection Services A. Poffenroth Senior Financial Analyst J. Forgie Fire Chief K. Clifford Deputy Commissioner B. Keenan Administrative Assistant K. Tibbits 1. Meeting Called To Order Moved by Councillor Norton, seconded by Councillor Reardon: RESOLVED that the Finance Committee move into open session. MOTION CARRIED. Councillor Merrithew called the Finance Committee open session meeting to order. 2. Approval of Minutes 2.1 Approval of Minutes—June 13, 2018 Moved by Councillor Norton, seconded by Mayor Darling: RESOLVED that the minutes of June 13, 2018, be approved. MOTION CARRIED. 3. Consent Agenda 3.1 Audit RFP Update Moved by Councillor Reardon, seconded by Mayor Darling: Finance Committee Meeting Open Session July 24, 2018 RESOLVED that the submitted report entitled "City of Saint John Audit Services", be received for information. MOTION CARRIED. 4. Business Items 4.1 Continuous Improvement Program Update Ms. Rackley -Roach provided an update on the Continuous Improvement Program including a discussion on program outcomes, selection process for projects, and program results in terms of cumulative hard savings and productivity savings as a result of the continuous improvement initiatives. (Councillor Sullivan entered the meeting) Moved by Mayor Darling, seconded by Councillor Reardon: RESOLVED that the submitted report entitled "Continuous Improvement Program Update", be received for information. LTA [00411111►[4L1:k]k]111101 4.2 2019 General and Utility Capital Budgets Mr. Fudge reviewed the draft 2019 General Capital Budget. The budget reflects Council's strategic priorities and adheres to the capital budget policy, representing an $18M investment in the community. It caps the City's portion to $12M in order to achieve its debt management goals. Long-term planning, a culture shift from a heavy reliance on debt financing, to saving money for future capital needs, continues to be a focus. Through asset management best practices, the capital budget investments are evidence based and supports Council's strategic plans. Mr. McGovern reviewed the draft 2019 Utility Capital Budget. The budget is focused on addressing urgent operational issues while balancing Council's priorities. There is significant rate pressure due to the Safe Clean Drinking Water project and Harbour Clean Up. The budget seeks to leverage approximately $3M in funding from other levels of government. The focus is to keep expenditures as low as possible, while paying down the debt. Going forward, the objective is a strategic capital budget to renew infrastructure, lower operating costs, and leverage funding opportunities. In response to a question, Mr. McGovern stated that 2019 is expected to be the last year of significant increases. There has been an increase of $72 annually the past several years to prevent rate shock and provide an opportunity to establish a reserve fund to reduce borrowing costs. There continues to be a large infrastructure deficit and replacement of water and sewer mains will be necessary in the coming years. As the debt from the SCDW project is decreased, spending in infrastructure will be required, while trying to keep rates as low as possible. Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the Finance Committee submit the draft 2019 General and Utility Capital Budgets to Common Council for the July 30th meeting for receive and file. LTA IQI[Q0KGY1:k]k]111101 Adjournment Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the open session meeting of the Finance Committee be adjourned. Finance Committee Meeting Open Session July 24, 2018 MOTION CARRIED. The Finance Committee open session meeting held on July 24, 2018 was adjourned at 6:20 p.m.