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2021-07-22 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session July 22, 2021 MINUTES — OPEN SESSION FINANCE COMMITTEE MEETING JULY 22, 2021 AT 4:30 PM 2nd FLOOR COMMON COUNCIL CHAMBER, CITY HALL Present: Mayor D. Noade Reardon Councillor G. Sullivan Councillor G. Norton Councillor P. Radwan Absent: Councillor D. Hickey Also Present: City Manager J. Collin Commissioner of Finance and Treasurer K. Fudge Manager Human Resources S. Hossack Commissioner Transportation & Environment M. Hugenholtz Commissioner Saint John Water B. McGovern Commissioner Growth & Community Services J. Hamilton Fire Chief K. Clifford Senior Financial Manager C. Lavigne Senior Financial Manager D. Arbour Senior Financial Manager J. Forgie Accountant T. Fawcett Energy Manager S. Yammine City Clerk J. Taylor Administrative Assistant K. Tibbits Administrative Officer R. Evans 1. Meeting Called to Order Councillor Sullivan called the Finance Committee open session meeting to order. Moved by Councillor Radwan, seconded by Mayor Reardon: RESOLVED that the agenda of July 22, 2021 be approved with Item 3.2 Finance Committee Orientation being tabled until the next Finance Committee meeting. MOTION CARRIED. 2. Consent Agenda 2.1 Terms of Reference — Finance Committee (Recommendation in Report Moved by Mayor Reardon, seconded by Councillor Radwan: RESOLVED that as recommended by the City Manager in the submitted report Terms of Reference — Finance Committee, the Finance Committee recommends the approval of the submitted amended Terms of Reference to Common Council. Finance Committee Meeting Open Session July 22, 2021 MOTION CARRIED. 3. Business Matters 3.1 Approval of Minutes —April 28, 2021 Moved by Mayor Reardon, seconded by Councillor Radwan: RESOLVED that the minutes of April 28, 2021 be approved. MOTION CARRIED. 3.3 2020 Consolidated Audited Financial Statements (Mr. S. Lund and Mr. J. Mallais, Deloitte, entered the meeting) Mr. Lund and Mr. Mallais reviewed the 2020 audited statements, confirming that the City's financial statements are accurate and in accordance with accounting standards and legislative requirements and expressed a clean audit opinion. The Consolidated Financial Statements present fairly, in all material respects, the consolidated financial position and results of operations of the City of Saint John. Moved by Councillor Radwan, seconded by Mayor Reardon: RESOLVED that the Finance Committee recommends approval of the 2020 Consolidated Financial Statements and that the statements be presented to Common Council at the meeting of August 23, 2021. MOTION CARRIED. Ms. Arbour provided a presentation on the 2020 Consolidated Financial Statements. Moved by Councillor Norton, seconded by Councillor Radwan: RESOLVED that: • Finance Committee approves the audited 2020 Consolidated Financial Statements; • Finance Committee approves the 2020 statement of revenue and expenses of the Saint John Trade and Convention Centre; • Finance Committee approves the 2020 City of Saint John Trust Funds financial statements; • Finance Committee approves the 2020 Develop Saint John financial statements; and, • Finance Committee recommends that Common Council approve the 2020 Consolidated Financial Statements as presented by staff as well as the TCC statement and Trust Funds financial statement. MOTION CARRIED. (Mr. Lund and Mr. Mallais withdrew from the meeting) 3.4 Introduction to Internal Audit Mr. Fudge stated that the role of the internal audit is to provide the City an objective and unbiased view and advice on the organization's risk management and internal control effectiveness and compliance with applicable laws and regulations. Ms. Forgie reviewed the submitted presentation entitled "Internal Audit". Moved by Councillor Radwan, seconded by Mayor Reardon: 2 Finance Committee Meeting Open Session July 22, 2021 RESOLVED that the Finance Committee recommends the approval of the Internal Audit Charter to Common Council and the approval of the addition of the Internal Audit Charter to the Procedural By -Law. LTA [00111111►[4L\ilk] k]I1191 3.5 ABC Reporting Policy Mr. Fudge stated that agencies, boards, and commissions of the City are separate entities with separate boards appointed by Common Council, representing a sizable investment of taxpayer money at approximately 23% of the operating budget. The purpose of the policy is to add formal governance and quality control in terms of a standard operating procedure. A standard template has been developed and aligns with best practices. Ms. Fawcett reviewed the submitted presentation entitled "ABC Reporting Policy FAS-002". Moved by Mayor Reardon, seconded by Councillor Norton: RESOLVED that the Finance Committee recommends that the ABC Reporting Policy be presented to Common Council for approval. MOTION CARRIED. 3.6 Asset Management Policv Amendment Mr. McGovern stated that since the inception of the City's asset management policy and the asset management strategy, the City has used risk and life cycle costs to prioritize investments in infrastructure. Good progress has been made in reducing the City's infrastructure deficit and it is appropriate to review and update the asset management policy. An amendment to the policy would allow for the consideration of infrastructure investment to improve the public's quality of life and opportunities to decommission assets; and to improve decision -making and risk management processes by continuously considering the vulnerability of City assets to the effects of climate change. Mr. Yammine reviewed the submitted report entitled "Asset Management Policy Updates." Moved by Councillor Radwan, seconded by Mayor Reardon: RESOLVED that the Finance Committee endorse the following changes to the Asset Management Policy: • Update the City's asset management principles: o Combine "Risk" and "Climate Change" considerations as a single principle. o Adjust the "Level of Service" principle to include "Quality of Life" infrastructure and align with strategic plans. • Remove section 9 "Strategies"; And FURTHER that the Finance Committee recommend that Common Council approve the updated Asset Management Policy at the next meeting of Council. MOTION CARRIED. 3.7 Utility and General Fund — 2021 Capital Programs Revision III Mr. McGovern reviewed the submitted presentation and commented on the reasons for the revisions to the 2021 capital budget program for the General Fund and the Utility Fund. Moved by Mayor Reardon, seconded by Councillor Radwan: RESOLVED that the Finance Committee: 3 Finance Committee Meeting Open Session July 22, 2021 • Endorse revision III of the 2021 Water and Sewerage Utility Fund Capital Budget in the amount of $12,036,000 (gross) with contributions from other sources of $5,790,000 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; • Endorse revision III of the 2021 General Fund Capital Budget in the amount of $45,309,783 (gross) with contributions from other sources of $29,442,183, yielding a net Capital budget in the amount of $15,867,600 to be funded by debt issue (net) as set in Appendix B; and, • Recommend approval of the revised Utility and General Fund Capital Budgets at the next meeting of Common Council. LTA to] Ius] ►[GL\ilk] ilk] II191 3.8 Gas Tax Fund — 2022 Capital Budget Quality of Life Investment Mr. Fudge stated that previously the criteria in the asset management policy weighed heavily on risk which made it difficult for quality -of -life investments to be a priority. The federal government will provide the City a one-time payment from the Gas Tax Fund of approximately $4.6M. With this additional one-time gas tax funding, staff is proposing approximately $6M be included in the upcoming draft 2022 General Capital budget to be allocated to quality -of -life investments. Mr. Lavigne reviewed the submitted report "2022 Gas Tax Funds — Quality of Life Investments" including an overview of the capital projects that are being proposed as part of this one-time funding. Mr. Collin noted that this is one-time money and is not recurring. Therefore, this money must be, by design, based on capital investments and not operating costs. Moved by Mayor Reardon, seconded by Councillor Norton: RESOLVED that the Finance Committee endorse the Quality -of -Life Criteria established for the proposed investments and to receive and file this report as presented and forward the report and presentation to the next meeting of Common Council as a receive and file. MOTION CARRIED. (Mayor Reardon withdrew from the meeting) 3.9 2021 Year -to -Date General Fund and Utilitv Fund Results Mr. Fudge stated that these year-to-date results and forecast for the remainder of the year is the first review under the Budget Monitoring policy. Wages and benefits must be separately analyzed from goods and services, adding that there cannot be subsidization between the two expenditures. Mr. Lavigne reviewed the submitted report entitled, "May 2021 Operating Results". Commissioners from each of the service areas commented on their year-to-date financial results and estimated year-end projections. Moved by Councillor Radwan, seconded by Councillor Norton: RESOLVED that the 2021 Year -to -Date General Fund and Utility Fund results, be received for information. MOTION CARRIED. 4 Finance Committee Meeting Open Session July 22, 2021 Adjournment Moved by Councillor Radwan, seconded by Councillor Norton: RESOLVED that the Finance Committee meeting be adjourned. MOTION CARRIED. The Finance Committee open session meeting held on July 22, 2021, was adjourned at 7:00 p.m.