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2020-10-21 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session October 21, 2020 MINUTES — OPEN SESSION FINANCE COMMITTEE MEETING OCTOBER 21, 2020 AT 5:00 PM MEETING CONDUCTED BY ELECTRONIC PARTICIPATION Present: Mayor D. Darling Councillor D. Merrithew Councillor G. Norton Councillor D. Reardon Councillor G. Sullivan Councillor S. Casey Also Present: City Manager J. Collin Commissioner of Finance and Treasurer K. Fudge General Counsel M. Tompkins Commissioner Growth & Community Services J. Hamilton Commissioner Transportation & Environment M. Hugenholtz Commissioner Saint John Water B. McGovern Manager Human Resources S. Hossack Director Corporate Performance S. Rackley-Roach Deputy Commissioner Transportation & Environment J. Hussey Senior Financial Manager C. Lavigne Senior Financial Manager D. Arbour Senior Financial Manager T. Fawcett Director of Strategic Affairs I. Fogan Fire Chief K. Clifford CEO Transit & Parking Commission M. Dionne Communications Officer N. Moar Deputy Commissioner Saint John Water K. Mason Insurance & Claims Coordinator S. Keyes CEO Transit & Parking Commission M. Dionne Chair Transit & Parking Commission P. Ellsworth Administrative Officer R. Evans 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 — September 15, 2020 Moved by Councillor Reardon, seconded by Councillor Norton: RESOLVED that the minutes of September 15, 2020 be approved. MOTION CARRIED. Finance Committee Meeting Open Session October 21, 2020 2. Consent Items 2.1 2021 General Fund Operating Budget (Recommendation in Report) Moved by Councillor Norton, seconded by Councillor Casey: RESOLVED that as recommended by the City Manager in the submitted report 2021 General Fund Operating Budget, the Finance Committee endorse the following resolutions and the 2021 General Fund Operating Budget and submit to Common Council at its next meeting for approval: 1. That the sum of $157,331,557 be the total Operating Budget of the City of Saint John for 2021; 2. That the sum of $125,990,634 be the Warrant of the City of Saint John for 2021; 3. That the tax rate for the City of Saint John be $1.785; 4. That Common Council orders and directs the levying by the Minister of Environment and Local Government of said amount on real property liable to taxation under the Assessment Act within the Municipality of Saint John; 5. That Common Council authorizes the Commissioner of Finance and Administrative Services to disburse, at a time acceptable to him, to the named Commissions, Agencies and Committees, the approved funds as contained in the 2021 budget. 6. That Common Council approves the 2021 Establishment of Permanent Positions at 572; 7. That Common Council approve $605,000 to the Capital Reserve Fund to fund infrastructure deficit; 8. That Common Council approve $377,484 to the Operating Reserve Fund to mitigate potential impacts of COVID 19 and other one-time emergencies that may arise in the future; MOTION CARRIED. 3. Business Matters 3.1 2021 Utility Fund Operating Budget Mr. McGovern stated that the 2021 Utility Fund Operating Budget represents the third consecutive year without a rate increase for ratepayers that use both water and sewer services. The annual cost for flat rate customers will remain at $1429 per year; the cost for metered customers will also remain unchanged. The Utility reduced costs in 2020 through workforce reductions, low/no wage increases, and savings due to lower interest cost on refinanced debentures. Rate stabilization continues to be a high priority. Rates have increased significantly over several years due to large-scale projects such as the Safe Clean Drinking Water and Harbour Clean-up. Reduced revenues is problematic for the Utility. The number of flat rate customers has declined again in 2020. In addition, the closure of Saputa at the end of the year will reduce revenue by approximately $225k. The impacts of reduced meter revenue due to COVID 19 will likely continue into 2021; the budget has included an estimate for the loss in revenue. Rate stabilization will continue to challenging if the Utility does not have growth in both the residential and commercial customer base. It is critically important to get more users into the system. (Mr. Collin withdrew from the meeting) Moved by Mayor Darling, seconded by Councillor Casey: RESOLVED that as recommended by the City Manager in the submitted report 2021 Utility Fund Operating Budget, the Finance Committee approve the 2021 Utility Fund Operating budget as presented and submit to Common Council for receive and file once the Industrial Raw Water Budgets have been approved by the Finance Committee. LTA [41104I►[4L1ilk] k]11191 2 Finance Committee Meeting Open Session October 21, 2020 3.2 Transit Operations Audit Mr. Fudge stated that the City's sustainability plan included an operational audit of Saint John Transit, which has been completed by Stantec. The report will be released to the public with the accompanying recommendations once the Transit Commission has finalized its review. Ms. Rackley-Roach reviewed the submitted report, "Saint John Transit Operational Audit". As part of the City's sustainability efforts to address the $10M budget deficit in 2021 and 2022, an option under consideration is to decrease the subsidy provided to SJ Transit for its operations. The Stantec operational audit includes recommendations to ensure the sustainability of the transit service long-term. There were challenges in the preparation of the report including limited data, the impact of COVID-19, the data provided was pre-COVID data, and the fact that Stantec did not have local knowledge or the ability to travel to Saint John due to COVID. Much of the information and recommendations are based on best practices. Overall, 17 recommendations, both short-term and long-term, were identified within the report underthe umbrella of Service Planning; Administration and Organizational Structure; Operations; Scheduling, Planning and Dispatching; and Operating, Maintenance and Storage Facility. The Transit Commission is finalizing its review of the audit, focusing on next steps and due diligence. A detailed report will be provided in the coming weeks. Moved by Councillor Reardon, seconded by Councillor Casey: RESOLVED that the submitted report Saint John Transit: Operational Audit be received for information. MOTION CARRIED. 3.3 City of Saint John: 2021 Assessment Base Mr. Fudge stated that the province recently released its annual municipal assessment base. The City of Saint John achieved 0.12% tax base increase, which has been integrated into the 2021 general operating budget. COVID-19 has had a significant impact on the assessment base across the province. There have been a number of questions regarding the manner in which assessments are made, and the low tax base increase given the high profile development projects that are currently underway in Saint John. Mr. Fudge reviewed the tax base results, comparisons with relevant benchmark cities, as well as information received from Service New Brunswick on the manner in which assessments are determined. The committee commented on the need for comprehensive tax reform within the Province of New Brunswick. (Councillor Norton withdrew from the meeting) Moved by Mayor Darling, seconded by Councillor Reardon: RESOLVED that the submitted report City of Saint John 2021: Assessment Base be received for information. MOTION CARRIED. 3.4 2021 Risk Management — Insurance Procurement 2021 Mr. Fogan, referring to the submitted report, commented on the City's insurance procurement process for 2021. Under pre -pandemic conditions, the City would "go to market" every five years, however under the current "hard market" environment it is recommended that the City renew with its current insurer for at least one year. The market is restricted due to COVID-19 Finance Committee Meeting Open Session October 21, 2020 with limited capacity for new business. The procurement policy allows for these types of scenarios — restricted market due to the pandemic. The best -case scenario in going to market is likely obtaining the same or similar premium of the cost of renewal with the current provider. The worst -case scenario is that it could be more expensive than renewing. It is within the City Manager's authority to approve this renewal. Moved by Mayor Darling, seconded by Councillor Casey: RESOLVED that the submitted report Insurance Procurement 2021 be received for information. MOTION CARRIED. Adjournment Moved by Mayor Darling, seconded by Councillor Reardon: RESOLVED that the Finance Committee meeting be adjourned. MOTION CARRIED. The Finance Committee open session meeting held on October 21, 2020 was adjourned at 6:40 p.m. 4