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2019-12-03 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session December 3, 2019 MINUTES — OPEN SESSION FINANCE COMMITTEE MEETING DECEMBER 3, 2019 AT 4:45 PM 8t" FLOOR COMMON COUNCIL CHAMBER (LUDLOW ROOM), CITY HALL Present: Mayor D. Darling Councillor D. Merrithew Councillor S. Casey Councillor D. Reardon Councillor G. Sullivan Councillor G. Norton Also Present: City Manager J. Collin Deputy City Manager N. Jacobsen Commissioner of Finance and Treasurer K. Fudge Comptroller Finance C. Graham City Solicitor J. Nugent Deputy Commissioner Administrative Services I. Fogan Commissioner Growth & Community Development J. Hamilton Commissioner Saint John Water B. McGovern Fire Chief K. Clifford Commissioner Transportation & Environment Services M. Hugenholtz Senior Financial Manager C. Lavigne Senior Financial Manager D. Arbour Deputy Common Clerk P. Anglin 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 — November 20, 2019 Moved by Councillor Norton, seconded by Councillor Sullivan: RESOLVED that the minutes of November 20, 2019 be approved. MOTION CARRIED. 1.2 Low Carbon Economy Fund (LCEF) Presentation — Funding Agreements 1.2.1 Low Carbon Economv Fund (LCEF) Aereement — Municir)al Buildines Deer) Ener Retrofit (MBDER) 1.2.2 Low Carbon Economy Fund (LCEF) Agreement — District Energy System (DES) Project Mr. Yammine reviewed the submitted presentation entitled, "City of Saint John Low Carbon Economy Fund (LCEF)" and provided an overall description of the projects. Moved by Mayor Darling, seconded by Councillor Reardon: Finance Committee Meeting Open Session December 3, 2019 RESOLVED that the Finance Committee recommends that Common Council approve the following: That the City enter into the Grant Agreement with Her Majesty the Queen in Right of Canada, as represented by the Minister of the Environment who is responsible for the Environment and Climate Change Canada under the Low Carbon Economy Fund for the District Energy System and Municipal Buildings Deep Energy Retrofit Projects in the form and upon the terms and conditions as submitted; and that the Mayor and Common Clerk be authorized to execute the said Agreement. MOTION CARRIED. 1.3 Reserve Fund Mr. Fudge noted that there is legislation prescribing that any transfers into a reserve or withdrawals from a reserve requires a resolution of Council. Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that as recommended by the City Manager in the submitted report entitled "Reserve Fund", the Finance Committee recommends that Common Council approve the transfer of: • $120,000 to an Operating Reserve to cover the cost of finishing the City's website project; • $80,000 to the General Capital Reserve to fund a Solid Waste Pilot Project; • $290,244 to the General Capital Reserve to fund two Saint John Fire projects (CAER Initiative and Industrial Hygiene); • $1,334,500 to an Operating Reserve to cover the cost of the City's restructuring plan. LTA IQ1[47►[GL1:k]k]11191 1.4 Lona -Term Financial Plan Pol Mr. Fudge stated that the Long -Term Financial Plan Policy is foundational to ensure that Councils are committed to strong fiscal management. This is an umbrella policy that covers all of the City's financial policies and demonstrates the Finance Committee and Common Council's commitment to financial management, adherence to financial policies, the efficient use of tax payer funds and accountability to the public on the City's financial management. It also implements the requirement of a two -third vote of Council to change any of the best practice financial policies. Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that as recommended by the City Manager in the submitted report "Long -Term Financial Plan Policy' the Finance Committee recommends that Common Council approve the long-term Financial Plan Policy FAS -020. MOTION CARRIED. 1.5 Long -Term Financial Plan Mr. Fudge commented on the City's first long-term financial plan. The development of this policy, approval of multi-year budgets and setting targets, has spurred a change in culture. The roadmap to financial health and financial sustainability is addressed in this long-term financial plan. Financial management of the City will no longer be conducted on an annual basis through an annual budget process. Ms. Arbour presented a base case scenario, using assumptions supported by strong data and realistic assumptions for growth and inflation; and a stretch goal scenario. The belief is that 2 Finance Committee Meeting Open Session December 3, 2019 these stretch goals are very attainable with a targeted focus on growth and critical municipal reform. Mr. Collin noted that development of a comprehensive continuous improvement framework is on-going and will change standard practices, although the notion of improving processes is encouraged daily. There is no doubt that there is a culture of continuous improvement within the City. Moved by Mayor Darling, seconded by Councillor Sullivan: RESOLVED that the Finance Committee endorse the presentation and direct staff to complete the Long -Term Financial Plan report to be presented to Common Council on December 16t" 2019. MOTION CARRIED. 1.6 2020 General Operating Budget Mr. Fudge and Mr. Lavigne reviewed the submitted presentation regarding the 2020 General Operating Budget. Mr. Fudge noted that is a legislative requirement to balance the budget in 2021 and therefore, all operating expenditures that are going to be reduced will occur in 2020. Mr. Fudge commented on the barriers to reducing costs and how these barriers can be addressed. The long term financial plan and policies in place are part of this equation. 2020 will be a year of transition for the City of Saint John. Mr. Collin, in response to comments regarding the unused provincial money, stated that there are two aspects to the 2018 "New Deal" agreement to consider: • As part of the agreement, the City agreed to not cut front-line services. The City has advised the Province that it cannot get through 2020 transition without addressing front-line services and asked the province to waive that provision. Early indications indicate that the province is willing to forego this provision during the transition period. • There are very clear parameters as to how the City is permitted to spend the money, based on a "doing business as usual' model. Any expenditure outside of normal business is challenged by the Province. Audits are conducted twice per year to ensure funds are used in accordance with this practice. Moved by Mayor Darling, seconded by Councillor Sullivan: RESOLVED that the Finance Committee: 1. Recognize that Budget 2020 is a transitional budget; 2. Approve the draft 2020 General Operating Budget and direct staff to recommend the 2020 General Operating Budget to Common Council; 3. Direct the City Manager to provide quarterly progress reports on the costs taken out of the system as a percentage of the overall projected deficit. MOTION CARRIED. Adjournment Moved by Councillor Sullivan, seconded by Mayor Darling: RESOLVED that the open session meeting of the Finance Committee be adjourned. MOTION CARRIED. 3 Finance Committee Meeting Open Session December 3, 2019 The Finance Committee open session meeting held on December 3, 2019 was adjourned at 6:30 p.m.