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2016-11-17 Finance Committee Minutes Open SessionFinance Committee Meeting Open Session November 17, 2016 MINUTES - OPEN SESSION FINANCE COMMITTEE MEETING NOVEMBER 17, 2016 AT 4:30 PM 8t" FLOOR BOARDROOM, CITY HALL Present: Mayor D. Darling Councillor D. Merrithew Councillor D. Reardon Councillor G. Sullivan Councillor G. Norton Councillor S. Casey Also Present: City Manager J. Trail Commissioner of Finance and Treasurer K. Fudge Comptroller C. Graham Senior Manager Financial Planning H. Nguyen Commissioner of Transportation & Environment Services M. Hugenholtz Commissioner Saint John Water B. McGovern Commissioner Growth and Community Development J. Hamilton Deputy Fire Chief J. Armstrong Administrative Officer R. Nichol Assistant Comptroller Finance C. Lavigne Administrative Assistant K. Tibbits 1. Meeting Called To Order Councillor Merrithew called the Finance Committee open session meeting to order. Moved by Councillor Reardon, seconded by Councillor Norton: RESOLVED that the agenda for the open session meeting of the Finance Committee be approved. LTA IQ1[47►[4L1:k]k]1if91 1.1 Approval of Minutes — November 8, 2016 Moved by Mayor Darling, seconded by Councillor Reardon: RESOLVED that the minutes of November 8, 2016 be approved. MOTION CARRIED. 1.2 Service Audit Plan presented by Deloitte (Mr. J. Cochrane and Mr. J. Maillais entered the meeting) Finance Committee Meeting Open Session November 17, 2016 Mr. Cochrane and Mr. Maillais commented on the highlights of the submitted report and discussed the approach and the scope of the audit for 2016. The audit is conducted on the consolidated statements in accordance with public sector accounting standards. Mr. Cochrane asked that if anyone is aware of any fraudulent activity, to bring it forward to the auditors. Responding to a comment regarding the utilization of one firm for all audits in order to reduce costs and drive efficiencies, Mr. Fudge commented that the competitive bidding process comes into play as well as the fact that the ABCs have the autonomy to choose their own auditors. The possibility of seeking voluntary compliance with the ABCs and tendering the audit process as a single package was discussed. Moved by Councillor Reardon, seconded by Mayor Darling: RESOLVED that the submitted report by Deloitte LLP entitled, "2016 Audit Service Plan", be received for information. (Mr. Cochrane and Mr. Maillais withdrew from the meeting) 1.3 2nd Draft General Operating Budget to Finance Committee (Recommend the 2nd Draft Budget to Council for Information on November 28th) Mr. Fudge provided an overview of the operating budget and responded to questions. The provincial tax information is not yet available but staff is recommending that the budget be sent to Council for review at the next Council meeting. This will be Council's first formal opportunity to review the material and provide feedback. The budget is a 0.96% increase over the 2016 budget and the 91h straight budget without a property tax rate increase. It consists of flat revenue growth and expenditure cuts to goods and services. The budget was framed in context to Council's priorities. The budget includes $12,519,000 in revenue which is an increase of 9Y2% over the 2016 budget primarily due to building permit revenue. Salaries and benefits account for approximately 58% of the overall budget. (Councillor Casey entered the meeting) Mr. Trail, responding to a comment, stated that there has been considerable scrutiny put into the budget. All service areas were challenged on their 2017 budget submissions. Referring to service levels, Mr. Fudge commented that moving from a one year budget projection to a five year outlook and long-term financial planning will help facilitate discussions of service levels and assist in dealing with some of the systemic issues. Ms. Nguyen noted that the budget does not include potential increases in salaries for Mayor and council members. The Hay Consulting Group is expected to address Council in open session on November 281h Responding to a comment regarding the procurement process, Mr. Trail stated that there is a process underway with Saint John, Moncton and Fredericton to identify common areas and a review of contracts and vendors to identify opportunities for savings. Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the Finance Committee recommend the 2017 General Operating Budget be referred to Common Council at the meeting of November 28, 2016 with a recommendation to receive for information. MA royffel► WARTM "I Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the request from the Imperial Theatre, referred by Council on September 61h, be added to the agenda as item 1.4.3. ►I• •► -:: 1.4 Grant Requests 1.4.1 Saint John Communitv Arts Board 1.4.2 Ellipsis Productions (Alice's Adventures in Wonderla Finance Committee Meeting Open Session November 17, 2016 1.4.3 Imperial Theatre Moved by Councillor Norton, seconded by Councillor Reardon: RESOLVED that the requests from the Saint John Community Arts Board, Ellipsis Productions, and Imperial Theatre be referred to the Community Grants Evaluation Committee. It was noted that the Arts and Cultural board is currently being recommended for $35,000 in funding in the operating budget, outside of the budget for grants. The mover and seconder agreed to withdraw the original motion in order to consider this request at the Finance committee level. Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the requests from Ellipsis Productions and the Imperial Theatre be referred to the Community Grants Evaluation committee for consideration. MOTION CARRIED. Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the Finance Committee recommends that the allotment given to the Saint John Community Arts Board be increased from $35,000 to the requested $70,000 and that staff be directed to recommend an offsetting adjustment in the operating budget. MOTION CARRIED. 1.5 Capital Budget Referring to the capital budget, Mr. Fudge noted that adjustments were made to the deferred list as a result of feedback from Council. Moved by Councillor Reardon, seconded by Mayor Darling: RESOLVED that the Finance Committee approve the 2017 General Fund Capital Budget and recommend for approval at the November 28th Council meeting. MOTION CARRIED with Councillor Sullivan voting nay. 1.6 Payment in Lieu of Tax (PILI) Ms. Graham commented on the PILT program. The City receives funding from the federal government for the property it owns within the municipality, based on the property tax rate. The federal government has its own assessors but the assessed value is in the vincinty of 99% of the value assessed by SNB. Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the verbal update regarding Payment in Lieu of Tax (PILT), be received for information. MOTION CARRIED. Adjournment Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the Finance Committee open session meeting held on Thursday, November 17, 2016 be adjourned. MA royffel► WARTM "I The Finance Committee meeting held on November 17, 2016 was adjourned at 6:50 p.m.