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2022-11-21 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session November 21, 2022 MINUTES —OPEN SESSION FINANCE COMMITTEE MEETING NOVEMBER 21, 2022 AT 5:00 PM MEETING CONDUCTED BY ELECTRONIC PARTICIPATION Present: Councillor G. Sullivan Mayor D. Noade Reardon Councillor P. Radwan Councillor G. Norton Councillor D. Hickey Also Present: City Manager J. Collin Commissioner of Finance and Treasurer K. Fudge Commissioner Transportation & Environment M. Hugenholtz Commissioner Saint John Water B. McGovern Commissioner Growth & Community Services J. Hamilton Commissioner Human Resources S. Hossack General Counsel M. Tompkins Fire Chief K. Clifford Director Transit and Fleet I. Fogan Director Financial Services J. Forgie Director Financial Services C. Lavigne Intermediate Accountant V. Parikh City Clerk J. Taylor Administrative Officer R. Evans Administrative Assistant K. Tibbits Finance Committee Meeting Open Session November 21, 2022 1. Meeting Called to Order Councillor Sullivan called the Finance Committee open session meeting to order. 2. Approval of Minutes 2.1 Minutes of November 3. 2022 Moved by Mayor Noade Reardon, seconded by Councillor Radwan: RESOLVED that the minutes of November 3, 2022 be approved. MOTION CARRIED. 3. Approval of Agenda Moved by Mayor Noade Reardon, seconded by Councillor Hickey: RESOLVED that the agenda of November 21, 2022 be approved. MOTION CARRIED. 4. Disclosures of Conflict of Interest No disclosures. 5. Consent Aeenda 5.1 2022 Ooeratine and Capital Reserves (Recommendation in Report Moved by Mayor Noade Reardon, seconded by Councillor Norton: RESOLVED that the Finance Committee approve the transfers to and from the following reserves and forward a copy of the report to Common Council for approval: General Operating Reserves • $1,178,200 from the General Operating Fund to the General Operating Reserve • $367,437 from the General Capital Reserve to General Operating Reserve • $2,580,059 from the General Operating Reserve to the General Operating Fund General Capital Reserves • $4,492,845 from the General Operating Fund to General Capital Reserve • $2,073,852 from the General Capital Reserve to the General Capital Fund • $367,437 from the General Capital Reserve to General Operating Reserve Utility Operating Reserves • $455,178 from the Utility Operating Fund to the Utility Operating Reserve Utility Capital Reserves • $1,438,068 from the Utility Operating Fund to the Utility Potable and Fleet Capital Reserve • $1,005,304 from the Utility Operating Fund to the Utility Industrial Capital Reserve • $472,626 from the Utility Capital Reserve (Fleet) to the Utility Capital Fund Finance Committee Meeting Open Session November 21, 2022 MOTION CARRIED. 6. Business Matters 6.1 Performance Management S. Rackley-Roach reviewed the submitted report and discussed 2022 deliverables, Council's priorities and key performance indicators, the performance dashboard, metrics, and the launch of the performance management system. Next steps include implementation of the dashboard by the end of the first quarter 2023 and completion of the majority of operation metrics by the end of 2023. Additional goals include implementation of the corporate performance management and reporting system in 2022-2023; the annual review of the Strategic Plan in 2023; identification of service level gaps and a move to performance - based budgeting in 2023; and, a redesign of the continuous improvement program to integrate with the performance management system in 2025 to 2026. Moved by Mayor Noade Reardon, seconded by Councillor Radwan: RESOLVED that the presentation entitled "Performance Management" be received for information. MOTION CARRIED. 6.2 2023 Proposed General Fund Operating Budget Mr. Fudge provided a summary of changes from the previous budget based on feedback from Finance Committee members and other members of Common Council, noting the following adjustments: RP\/PnijPt Transfer from Operating Reserves - $800,000 Own Source Revenues increase - $50,000 Expenditures Community Services Reserve - $800,000 Increase in Unspecified Grants - $50,000 There were minor adjustments between service areas within Growth and Development to ensure better alignment, however no impact to the overall budget. The proposed 2023 General Operating Budget totals $177,287,500, up 7.63% year over year and includes a property tax rate reduction of 9.0 cents, from $1.71 to $1.62. If approved, the 2023 property tax rate would be reduced by a total 16.5 cents over the last two years. The budget also moves the tax differential for Commercial and Heavy Industry from 1.5 to 1.7. The budget continues to advance and surpass the City's long term strategic financial objectives and increases flexibility, reduces vulnerability, and is sustainable. It also balances the financial objectives of the long-term plan while balancing the priorities of Council along with the recently adopted 10-year strategic plan. Moved by Mayor Noade Reardon, seconded by Councillor Norton: Finance Committee Meeting Open Session November 21, 2022 RESOLVED that as recommended in the submitted report 2023 Proposed General Fund Operating Budget, the Finance Committee approve the proposed 2023 General Fund Operating Budget and forward to the next meeting of Common Council for receive and file and endorse the following: RESOLVED that: 1. The sum of $177,287,500 be the total Operating Budget of the City of Saint John for 2023; 2. The sum of $142,105,410 be the Warrant of the City of Saint John for 2023; 3. The tax rate for the City of Saint John be set at $1.62; 4. The City of Saint John set the property tax rate for Heavy Industrial Class at 1.7 times the residential rate; 5. The City of Saint John set the property tax rate for Non -Residential Class at 1.7 times the residential rate; and, 6. The Wage Escalation Policy apply to the Management Professional Group. MOTION CARRIED with Councillor Radwan voting nay. 6.3 Internal Audit— Health and Referring to the submitted report, Ms. Forgie noted that the Health and Safety Internal Audit was approved as part of the Internal Audit Plan for 2022. A third party with expertise in Health and Safety was engaged to assist. The focus was on the design and structure of the City's Corporate Health and Safety Program relative to leading practices, including how processes are communicated and implemented within the City's business units with a focus on Utilities and Infrastructure Services, specifically Saint John Water. The scope of the audit included Health and Safety governance activities, tools (data and technology), systems, applicable policies and procedures, communications (internal and external), and training programs. Moved by Mayor Noade Reardon, seconded by Councillor Radwan: RESOLVED that the Finance Committee receive and file the internal audit summary of results for the Health and Safety Internal Audit. MOTION CARRIED. 6.4 Year -to -Date Financial Results and Year -End Proiections for General Fund and Utilitv Fund Referring to the submitted presentation, Mr. Lavigne provided an overview of the estimated year-end financial forecasts for the General Fund and Utility Fund operating budgets. The projections have risk of changing due to such things as supply chain issues and snow removal costs. Revenues have improved in areas that were impacted by COVID-19 such as parking and recreation. Potable water revenues have also improved, which is largely attributed to better than anticipated revenue; the recommendation to transfer to the capital reserve will help with budgeting challenges and the rising cost of capital projects. Moved by Mayor Noade Reardon, seconded by Councillor Norton: RESOLVED that as recommended in the submitted presentation "October 31, 2022 Unaudited Financial Results and Forecast General Fund and Utility Fund," the Finance Committee adopt the following: Finance Committee Meeting Open Session November 21, 2022 • Recommend transferring only $1,750,000 in General Fund Operating reserves instead of the budgeted $2,367,056 to alleviate risk of a large surplus; • Recommend transferring $750,000 from the Utility Fund Potable operating budget to Capital reserves; • Finance Committee receive and file this presentation as presented and direct any questions to staff. MOTION CARRIED. 7. Adjournment Moved by Mayor Noade Reardon, seconded by Councillor Norton: RESOLVED that the Finance Committee meeting be adjourned. MOTION CARRIED. The Finance Committee open session meeting held on November 21, 2022 was adjourned at 7:40 pm.