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2018-09-20 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session September 20, 2018 MINUTES — OPEN SESSION FINANCE COMMITTEE MEETING SEPTEMBER 20, 2018 AT 4:30 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: Acting City Manager N. Jacobsen Commissioner of Finance and Treasurer K. Fudge Commissioner Saint John Water B. McGovern Comptroller Finance C. Graham Senior Manager Financial Planning H. Nguyen Deputy Commissioner Administrative Services I. Fogan Assistant Comptroller Finance and Administrative Services C. Lavigne Commissioner Growth and Community Development J. Hamilton Senior Financial Analyst J. Forgie Fire Chief K. Clifford Deputy Commissioner Parks and Public Spaces T. O'Reilly Administrative Assistant K. Tibbits 1. Meeting Called To Order Councillor Merrithew called the Finance Committee open session meeting to order. 1.1 Approval of Minutes —July 24, 2018 Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the minutes of July 24, 2018, be approved. MOTION CARRIED. 1.2 Appointment of Auditor for Auditing Services Ms. Forgie reviewed the submitted report and advised that a combined Request for Proposals was prepared to provide auditing services for the City and several of its agencies, boards and commissions. Over a 6 year period, it equates to a savings of $102K, or $17K annually. (Councillor Norton entered the meeting) Moved by Mayor Darling, seconded by Councillor Sullivan: Finance Committee Meeting Open Session September 20, 2018 RESOLVED that the Finance Committee makes the following recommendation to Common Council: That Deloitte LLP be appointed auditors for the City of Saint John, The Saint John Trust Funds, Saint John Parking Commission, Saint John Transit Commission, Develop Saint John, Saint John Free Public Library, Saint John Aquatic Centre Commission and Saint John Trade and Convention Centre for the next 4 years with a 2 year renewal option at the City's discretion. LTA IQ1[47►[4L1all all1if91 1.3 July 2018 Year End Forecast Ms. Nguyen reviewed the year end forecast as of July 2018. An $825K surplus is projected for year end, however this includes one-time injections of money such as a carry forward amount of $1.3M, property tax amount of $1.2M and the deal with the province for $3.5M. The structural deficit is approximately $5.2M and is projected to increase in 2019. Department heads commented on their budget areas and variances within the budgets. Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that Item 1.3 July 2018 Year End Forecast, be received for information. MOTION CARRIED. 1.3.1 July 2018 Saint John Water Year End Forecast Mr. McGovern reviewed the year end forecast for Saint John Water. A surplus of $1,015,000 is projected for the end of 2018. By year end, the accumulated reserves will have been used as part of the Safe Clean Drinking Water payment. Moved by Councillor Reardon, seconded by Mayor Darling: RESOLVED that Item 1.3.1 July 2018 Saint John Water Year End Forecast, be received for information. MOTION CARRIED. 1.4 2019 General Operating Budget Mr. Fudge presented the first draft of the 2019 General Operating Budget. It is 2.35% higher than the 2018 budget and essentially a status quo budget, consistent with 2018 service levels. This is the last single year budget and will implement long-term strategies going forward. The structural deficit for 2019 is approximately $9M. The 2018 structural deficit gap is approximately a 4% gap between reoccurring revenue and reoccurring expenses and will increase close to 6% in 2019. The 2019 operating budget has a heavy reliance on short term financial assistance from the province with an $8.9M funding commitment for 2019. The City continues to work with the province to find a sustainable funding solution. The agreement with the province commits that the City minimize impact to front-line services until a solution has been found. An increase in the tax rate is not part of the 2019 budget. Work will continue on the 10 year financial plan and the capital investment plan. Moved by Councillor Reardon, seconded by Councillor Norton: RESOLVED that Item 1.4 2019 General Operating Budget, be received for information. MOTION CARRIED. Finance Committee Meeting Open Session September 20, 2018 1.5 2019 Water & Sewerage Utility Operating Budget Mr. McGovern reviewed the 2019 Water & Sewerage Utility Operating Budget. Industrial and potable rate studies as well as the universal metering analysis are all underway. Continuous improvement and revenue generation remain a priority to ensure that water and sewerage costs are allocated appropriately and as fairly as possible. A rate increase of $60 per year is proposed which is slightly less than the initial planned $72 rate increase. Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that Item 1.5 2019 Water & Sewerage Utility Operating Budget, be received for information. LTA IQ1[47►[GL1:k]k]11191 Adjournment Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the open session meeting of the Finance Committee be adjourned. MOTION CARRIED. The Finance Committee open session meeting held on September 20, 2018 was adjourned at 6:30 p.m.