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2021-02-18 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session February 18, 2021 MINUTES — OPEN SESSION FINANCE COMMITTEE MEETING FEBRUARY 18, 2021 AT 5:30 PM MEETING CONDUCTED BY ELECTRONIC PARTICIPATION Present: Mayor D. Darling Councillor D. Merrithew Councillor G. Norton Councillor D. Reardon Councillor G. Sullivan Absent: Councillor S. Casey Also Present: City ManagerJ. Collin Commissioner of Finance and Treasurer K. Fudge Director Growth and Community Planning P. Ouellette Commissioner Transportation & Environment M. Hugenholtz Commissioner Saint John Water B. McGovern Deputy Commissioner Transportation & Environment J. Hussey Senior Financial Manager C. Lavigne Senior Financial Manager D. Arbour Senior Financial ManagerT. Fawcett Director of Strategic Affairs Ian Fogan Fire Chief K. Clifford Municipal Engineer M. Baker Administrative Officer R. Evans Energy Manager S. Yammine 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 26, 2020 Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the minutes of November 26, 2020 be approved. MOTION CARRIED. 1.2 SNB Property Taxes (L. Dionne, L. Munn, M. Johnson and S. Melanson, Service New Brunswick, joined the meeting electronically) Mr. Fudge introduced the team from Service New Brunswick who provided a teach -in with respect to Service New Brunswick's various assessment policies and practices. Finance Committee Meeting Open Session February 18, 2021 Members of Service New Brunswick reviewed the submitted presentation "Property Assessment Services", including a discussion on SNB's roles and responsibilities, their mandate, and the differences between tax policy and tax assessment. It was noted that their work is driven by the Assessment Act and related policies. Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the submitted presentation from Service New Brunswick "Property Assessment Services", be received for information. MOTION CARRIED. (L. Dionne, L. Munn, M. Johnson and S. Melanson withdrew from the meeting) (Councillor Norton withdrew from the meeting) 1.3 Safe Restart Fundi Mr. Fudge stated that the COVID-19 pandemic has tested the resiliency of organizations, including the City, adding that financial risk remains and must be closely monitored. There have been impacts to parking revenues, recreation user fees, transit fares, water and sewer revenue losses and a reduction in the City's assessment base and property tax revenue in 2020 due to reduced assessments for the restaurant and hotel industry, airlines, and retail industry. Under the 3rd phase of the Safe Restart program, the City of Saint John received approximately $3.6M to be utilized to offset the impacts of COVID-19. Over the three phases Saint John has received a transfer of approximately $7.4M. It is recommended that funds be placed in an operating reserve to offset future revenue losses similar to what was seen in 2020. The recommendation aligns with the use of one-time funds in the Reserve Fund Policy, that is, not using one-time funds for on -going spending. Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that as recommended by the City Manager in the submitted report "Safe Restart Funding Program", the Finance Committee recommends that Common Council approve the transfer of $3,668,373.08 Safe Restart Funding to the General Fund Operating Reserve to be utilized to offset potential future revenue losses due to COVID-19. MOTION CARRIED. 1.4 Property Assessment Gap Mr. Fudge, referring to the elimination of the property assessment gap ("P-Gap"), noted that in 2013 the provincial government capped 102,000 properties across the province from reflecting true market value. The provincial government recently amended the Assessment Act to eliminate this exemption. Given that municipalities have already received their tax base for 2021, the province is providing a grant for the value of this exemption. The City of Saint John will receive approximately $1M of additional revenue. This revenue is reoccurring and pursuant to the City's polices, the funding should be included in the operating budget. The recommendation is that the grant be transferred into a tax rate reduction reserve to support the goals of the long- term financial plan and used to reduce the City's tax rate in 2022. Mr. Collin stated that one of the goals under the long-term financial plan, is a tax rate reduction. The strategic plan is currently under development — this plan will determine if the end goal is lowering the tax rate and/or the development of other goals as well. The strategic plan may drive modifications to the long-term financial plan. Moved by Councillor Sullivan, seconded by Mayor Darling: 2 Finance Committee Meeting Open Session February 18, 2021 RESOLVED that as recommended by the City Manager in the submitted report "Property Gap Assessment (P-Gap)" , the Finance Committee recommends that Common Council approves the allocation of $1,000,000 to the Tax Rate Reduction Reserve and that this amount be used to reduce the City of Saint John tax rate in the year 2022 by 1.5 cents to $1.77 as part of the 2022 General Operating Budget. MOTION CARRIED. 1.5 2022 Budget Guidance for Police and Transit Commissions Referring to the submitted letters to the Police and Transit Commissions, Mr. Fudge noted that the expectation is that the City's funding for 2022 budgets will be limited to increases in wages and benefit envelopes subject to the Wage Escalation policy, a freeze on goods and services budgets, and the establishment of a shared service charge for shared services such as Human Resources and Communications. Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the letters "2022 Budget Guidance for Police and Transit Commissions" be received for information. MOTION CARRIED. 1.6 Capital Budget Adjustment Mr. McGovern commented on the general and utility fund revised 2021 capital programs. The primary reasons for the revisions to the capital program are re -allocations of funding associated with the revised bi-lateral funding program, and the addition of projects to advance one of the city's catalytic projects, the Fundy Quay development. Moved by Mayor Darling, seconded by Councillor Sullivan: RESOLVED that as recommended by the City Manager in the submitted report "Utility and General Fund — Revised 2021 Capital Programs", the Finance Committee recommends endorsement to Common Council of the following revised 2021 Capital Budgets as follows: • The revised 2021 Water and Sewerage Utility Fund Capital Budget in the amount of $12,086,000 (gross) with contributions from other sources of $5,840,000 yielding a net capital budget in the amount of $6,246,000 to be funded by pay as you go (net) as set in Appendix A; • The revised 2021 General Fund Capital Budget in the amount of $44,960,683 (gross) with contributions from other sources of $29,093,083, yielding a new Capital budget in the amount of $15,867,600 to be funded by debt issue (net) as set in Appendix B; and, • The revised 2021 Water and Sewerage Utility Fund Capital Budget be presented to Council at its next meeting for consideration and approval. MOTION CARRIED. 1.7 Government of Canada Healthy Communities Initiative Mr. Fogan stated that the Federal Government has announced a $31M Healthy Communities Initiative fund for projects between $5K and $250K in value towards the creation of safe and vibrant public spaces, improved mobility options and creation of digital solutions. The deadline to apply is March 9t". Given the short turn -around time, staff is working to identify projects and coordinate applications, and are seeking authorization to apply for funding of up to 100%. If the funding request is approved, staff will return with a business case and possible changes to the capital budget. Moved by Councillor Reardon, seconded by Councillor Sullivan: 3 Finance Committee Meeting Open Session February 18, 2021 RESOLVED that as recommended by the City Manager in the submitted report "Government of Canada Healthy Communities Initiative", the Finance Committee directs staff to apply to the Canada's Healthy Communities Initiative. LTA [41104I►[GL\ilk] ilk] IN91 Adjournment Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the Finance Committee meeting be adjourned. LTA [41104I►[GL\ilk] ilk] IN91 The Finance Committee open session meeting held on February 18, 2021 was adjourned at 7:00 p.m.