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2023-06-28 Finance Committee Agenda Packet - Open Session
Finance Committee Meeting Open Session May 31, 2023 MINUTES OPEN SESSION FINANCE COMMITTEE MEETING MAY 31, 2023 AT 3:45 P.M. MEETING CONDUCTED BY ELECTRONIC PARTICIPATION Present: Councillor G. Sullivan Chair Mayor D. Noade Reardon Councillor P. Radwan Councillor D. Hickey Absent: Councillor G. Norton Also Present: CAO B. McGovern Commissioner of Finance and Treasurer K. Fudge Director Financial Services J. Forgie Director Financial Services C. Lavigne General Counsel M. Tompkins Commissioner Human Resources S. Hossack Fire Chief K. Clifford Commissioner Infrastructure and Utilities I. Fogan Commissioner Growth & Community Services J. Hamilton Commissioner Transportation & Environment M. Hugenholtz City Clerk J. Taylor Administrative Assistant A. MacLean Deputy Clerk P. Anglin 1. Meeting Called to Order Councillor Sullivan called the Finance Committee open session meeting to order. 2. Approval of Minutes 2.1 Minutes of April 26, 2023 Moved by Councillor Hickey, seconded by Mayor Noade Reardon: RESOLVED that the minutes of April 26, 2023 be approved. MOTION CARRIED. 3. Approval of Agenda Moved by Councillor Radwan, seconded by Mayor Noade Reardon: RESOLVED that the agenda of May 31, 2023 be approved. MOTION CARRIED. 4. Disclosures of Conflict of Interest No disclosures. Finance Committee Meeting Open Session May 31, 2023 5. Consent Agenda The submitted consent agenda resolutions were not received by unanimous consent; the Chair heard discussion and a vote was taken on each individual item. 5.1.1 Council Professional Development Policy Moved by Mayor Noade Reardon, seconded by Councillor Hickey: RESOLVED that the Finance Committee recommend Common Council amend FAS-027 Mayor & Council Professional Development Policy as presented in the submitted report. MOTION CARRIED with Councillor Radwan voting nay. 5.1.2 Council Professional Development Policy Appointments to FCM Moved by Mayor Noade Reardon, seconded by Councillor Hickey: RESOLVED that the Finance Committee refer to Common Council a request to review appointments to the FCM as follows: Applying what Council has in place for funding, a review of the appointments process to provide equity around the table for representatives to the Federation of Canadian Municipalities (FCM) Annual Conference and Trade Show; and that staff be directed to provide information on the best practices and strategies used by the Cities of Moncton and Fredericton for Council Members attending the FCM. MOTION CARRIED. 5.2 Events Ticket Policy for Mayor and Council The issue of gifts was raised as a concern to be reviewed and addressed by staff. Moved by Mayor Noade Reardon, seconded by Councillor Hickey: RESOLVED that the Finance Committee endorse the Events Ticket Policy for Mayor and Council as presented in the submitted report and that the Chair of the Finance Committee bring forth a recommendation to Common Council for approval. MOTION CARRIED. 6. Business Matters 6.1 Performance Management Dashboard Referring to the submitted report entitled Performance Management Dashboard Manager of Corporate Performance E. Hatfield provided a preview of the Council Key Performance Indicators (KPI) dashboard. Moved by Councillor Radwan, seconded by Councillor Hickey: RESOLVED that the submitted report entitled Performance Management Dashboard Update for Finance Committee be received for information. MOTION CARRIED. 6.2 General Operating Budget Public Engagement - Shape Your Budget Referring to the submitted report entitled General Operating Budget Public Engagement - Shape Your Budget, Finance Director C. Lavigne provided on overview of the public engagement that will be undertaken as part of the 2024 Operating Budget. Moved by Councillor Radwan, seconded by Mayor Noade Reardon: RESOLVED that the Finance Committee endorse the action plan related to the 2024 Operating Budget Public Engagement as submitted in the report General Operating Budget Shape Your City and direct any questions to staff. Finance Committee Meeting Open Session May 31, 2023 MOTION CARRIED. 6.3 Parks Capital Budget Recommendation Referring to the submitted report entitled Parks Capital Budget Recommendation, Parks and Recreation Director M. Dionne provided the list of proposed projects for parks and playgrounds asset renewal projects. Moved by Mayor Noade Reardon, seconded by Councillor Hickey: RESOLVED that the Finance Committee approve the list of proposed projects to be funded by the and 2024. MOTION CARRIED. 6.4 City of Saint John Long Term Financial Plan 2023-2032 Referring to the submitted report entitled City of Saint John Long Term Financial Plan 2023-2032 Commissioner K. Fudge outlined the financial steps that the City needs to continue with to ensure a sustainable Saint John. Moved by Mayor Noade Reardon, seconded by Councillor Hickey: RESOLVED that the Finance Committee approve the submitted City of Saint John Long Term Financial Plan 2023-2032 and forward it to Common Council for approval. MOTION CARRIED. 6.5 Strategic Procurement Policy and Protocols Referring to the submitted report entitled Strategic Procurement Policy and Protocols Finance Director J. Forgie and Procurement Manager C. Roberts provided an policy and associated processes. Moved by Councillor Hickey, seconded by Councillor Radwan: RESOLVED that: 1) The Finance Committee recommend to Common Council the approval of the revised City -011 2) That Finance Committee recommend to Common Council By-Law Number LG-21 Delegation of Authority to Award or Approve Contracts for approval 3) That Finance Committee refer the following administrative documents to Common Council for receive and file: Social Procurement Protocol; Contract Management Protocol; Supplier Performance Evaluation Protocol. MOTION CARRIED. 6.6 2023 Year to Date Results General Fund and Utility Fund Referring to the submitted report entitled 2023 Year to Date Results General Fund and Utility Fund Finance Director C. Lavigne provided a high-level overview of the year-to-date results for both the General Fund and Utility Fund. Moved by Mayor Noade Reardon, seconded by Councillor Radwan: RESOLVED that the Finance Committee approve transferring onetime short-term interest earned above the approved budget to the General Fund Capital Reserve per the Operating Finance Committee Meeting Open Session May 31, 2023 , and that the Finance Committee approve the presentation for the 2023 Jan to April year to date results and direct any questions to staff. MOTION CARRIED. 7. Adjournment Moved by Councillor Hickey, seconded by Mayor Noade Reardon: RESOLVED that the Finance Committee meeting be adjourned. MOTION CARRIED. The Finance Committee open session meeting held on May 31, 2023, was adjourned at 6:00 p.m. Respectfully submitted, Patricia Anglin Recording Secretary The City of Saint John Report to the Finance Committee on the 2022audit June 28, 2023 00 Deloitte LLP P.O. Box 20094 Brunswick Square Saint John NB E2L 5B2 Canada Tel: 506-632-1080 Fax: 506-632-1210 www.deloitte.ca June 22, 2023 To the Finance Committeeof the City of Saint John Report on audited annual financial statements Dear Finance CommitteeMembers: We are pleased to submit this report on the status of our audit of theCity of Saint John(“the City”) forthe 2022fiscal year. This report summarizes the scope of our audit, our findingsof the 2022 fiscal year and reviews certain other matters that we believe to be of interest to you. We are continuing to work with management to complete the outstanding matters summarized on page oneof this report. As agreed in our master service agreement (“MSA”) dated December 12, 2022December 12, 2022December 12, 2022, and any previous confirmation letters issued pursuant to the MSA and all as may be updated or amended from time to timeconfirmation letters issued pursuant to the MSA and all as may be updated or amended from time to timeconfirmation letters issued pursuant to the MSA and all as may be updated or amended from time to time, we have performed an audit of thefinancial statementsof thethetheCity of Saint JohnCity of Saint JohnCity of Saint Johnas at and for the year ended December 31, 2022, inaccordance with Canadian generally accepted auditing standards accordance with Canadian generally accepted auditing standards accordance with Canadian generally accepted auditing standards (“Canadian GAAS”) and expect to issue our audit reportonce all work is finalized and the financial statements are approvedis finalized and the financial statements are approvedis finalized and the financial statements are approved. This report is intended solely for the information and use of This report is intended solely for the information and use of This report is intended solely for the information and use of thethetheFinance Committee, management and others Finance Committee, management and others Finance Committee, management and others within the Cityand is not intended to be, and should not be, used by anyone other than theseand is not intended to be, and should not be, used by anyone other than theseand is not intended to be, and should not be, used by anyone other than thesespecified parties. We look forward to discussing this report summarizing the outcome of our audit with you and answering any We look forward to discussing this report summarizing the outcome of our audit with you and answering any We look forward to discussing this report summarizing the outcome of our audit with you and answering any questions you may have. Yours truly, Chartered Professional AccountantsChartered Professional AccountantsChartered Professional Accountants The City of Saint John| Table of contents Table of contents Executive summary1 Significant audit risks and events3 Significant accounting policies, judgments andestimates5 Appendix 1 – Communication requirementsCommunication requirementsCommunication requirementsand other reportable and other reportable and other reportable matters6 Appendix 2 – Group Audit9 Appendix 3 – New and Revised Accounting and Auditing StandardsNew and Revised Accounting and Auditing StandardsNew and Revised Accounting and Auditing Standards10 Appendix 4 – Deloitte resources aDeloitte resources aDeloitte resources aclick awayclick awayclick away12 Additional required communication Additional required communication Additional required communication – – – Draft Management Draft Management Draft Management Representation Letter13 i © Deloitte LLP and affiliated entities. The City of Saint John| Executive summary Executive summary Audit scope and terms of engagement We have been asked to perform an audit of the City’s financial statements(the “financial statements”) in accordance with CanadianPublic Sector Accounting Standards (“PSAS”)as at and for the year endedDecember 31, 2022. Our audit wasconducted in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). The terms and conditions of our engagement are described in the master service agreement, and any previous confirmation letters issued pursuant to the MSA and all as may be updated or amended from time to time. We have developed appropriate safeguards and procedures to eliminate threats to our independence or to reduce have developed appropriate safeguards and procedures to eliminate threats to our independence or to reduce them to an acceptable level. Significant risksStatusUncorrected mUncorrected mUncorrected misstatementisstatementisstatements 1 Management override of controls Materiality $$6.6.4M 4M Presumed risk of fraud relating to revenue recognitionfor property 2 Uncorrected taxes, unconditional grants, and $$320320K other revenue misstatements New from prior Continued from Continued from Continued from Removed from Removed from Removed from Materiality levels are determined on the basis of Materiality levels are determined on the basis of Materiality levels are determined on the basis of total yearprior yearprior yearprior yearprior year expensesexpensesexpenses. Our materiality for the year ended December 31, December 31, December 31, 2022,was $6,400,000 (2021, $$$6,6,6,200,000). Uncorrected misstatements totaled $613,252. Outstanding Matters & Next StepsOutstanding Matters & Next Steps Receipt of legal letters, confirmation of no changes Receipt of signed Management’s representation letter Receipt of evidence tocomplete minordocumentation Completion of our subsequent events procedures items Completion of the Engagement Quality Control Final audit partner review of select working papers review 1 © Deloitte LLP and affiliated entities. The City of Saint John| Executive summary Going Concern Results Management has completed its assessment of No restrictions have been placed on the scope of the ability of the Cityto continue as a going our audit. We intend to issue an unmodified audit concern and in making its assessment did not report on the financial statements of the City for identify any material uncertainties related to the year ended December 31, 2022 once the events or conditions that may cast significant outstanding items referred to above are doubt upon the City’s ability to continue as a completed satisfactorily and the financial going concern. We agree with management’s statements are approved by the Finance assessment. Committee. 2 © Deloitte LLP and affiliated entities. The City of Saint John| Significant audit risks and events Significant audit risksand events The significant audit risks identified as part of our risk assessment, together with our planned responses and conclusions, are described below. Significantrisk dashboard Legend Significant level of management judgment involved Minimal/No management judgment involved D+I: Planned testing of the design and implementation of key controlsPlanned testing of the design and implementation of key controlsPlanned testing of the design and implementation of key controls OE:Planned testing of the operating effectiveness of key controlstesting of the operating effectiveness of key controlstesting of the operating effectiveness of key controls Management override of controls Fraud RiskControl Testing Control Testing Level of management Level of management Specialist, Expert or PlannedjudgementjudgementInnovationInvolvement YESNot applicableNot applicableNot applicable No Analysis of risk Audit Response and Results Under Canadian Auditing Standards, it is the Under Canadian Auditing Standards, it is the Under Canadian Auditing Standards, it is the We discussed fraud with management. responsibility of the management, with the oversight responsibility of the management, with the oversight responsibility of the management, with the oversight We asked the Finance Committee for their views of those charged with governance to place a strong of those charged with governance to place a strong of those charged with governance to place a strong about the risk of fraud, whether they know of any emphasis on fraud prevention and detection. emphasis on fraud prevention and detection. emphasis on fraud prevention and detection. actual or suspected fraud affecting the City and their Oversight by those charged with governance e charged with governance e charged with governance role in the oversight of management’s antifraud includes considering the potential for override of programs. controls or other inappropriate influence over the We tested a sample of journal entries made financial reporting process. throughout the period, and adjustments made at the Management override of controls is present in all end of the reporting period. entities. It is a risk of material misstatement We evaluated the business rationale for any resulting from fraud and therefore is considered as a significant unusual transactions. significant risk. We determined whether the judgements and decisions related to management estimates indicate a possible bias, which included performing retrospective analysis of significant accounting estimates. We obtained sufficient audit evidence to conclude that there were no material misstatements. 3 © Deloitte LLP and affiliated entities. The City of Saint John| Significant audit risks and events Presumed risk of fraud on revenue recognition for property taxes, unconditional grants, and other revenue Fraud RiskControl Testing Level of management Specialist, Expert or PlannedjudgementInnovationInvolvement YESD+I No Analysis of risk Audit Response and Results Under Canadian GAAS, we are required to evaluate We evaluated the design and implementation of the risk of fraud in revenue recognition. We have the internal controls that address this risk. We evaluated the revenue transactions, and we have did not rely on controls. concluded that the significant risk is that the revenue We confirmed balances with third parties when may have been recorded in the incorrect period. possible,possible,possible,to ensure that the revenue recorded This represents a fraud risk for the 2022 audit. was appropriate. When not possible, we detail was appropriate. When not possible, we detail was appropriate. When not possible, we detail tested the revenue streams and ensured that the tested the revenue streams and ensured that the tested the revenue streams and ensured that the proper revenue recognition criteria were met and proper revenue recognition criteria were met and proper revenue recognition criteria were met and that the transactionthat the transactionthat the transactions were recorded in the proper period.period.period. We concluded that the internal controls were We concluded that the internal controls were We concluded that the internal controls were designed and implemented appropriatelydesigned and implemented appropriatelydesigned and implemented appropriately. A summary of uncorrected financial statement A summary of uncorrected financial statement A summary of uncorrected financial statement misstatements misstatements misstatements isisisincluded in additional required included in additional required included in additional required communicationcommunicationcommunication. 4 © Deloitte LLP and affiliated entities. The City of Saint John| Significant accounting policies, judgments and estimates Significant accounting policies, judgments andestimates The accounting policies described below are those that are most important and representativeof the City’s financial condition and financial performance. In the course of our audit of the financial statements, we considered the qualitative aspects of the financial reporting process, including items that have a significant impact on the relevance, reliability, comparability and understandability of the information included in the financial statementsand understandability of the information included in the financial statementsand understandability of the information included in the financial statements. We believe the City’s significant accounting policiesto be: Allowance for doubtful accounts Tangible capital assets – useful lives, amortization, and impairmentuseful lives, amortization, and impairmentuseful lives, amortization, and impairment Accounts payable accruals Assumptions related to pension plans In our judgment, the significant accounting practices and policies, selected and applied by management are, In our judgment, the significant accounting practices and policies, selected and applied by management are, In our judgment, the significant accounting practices and policies, selected and applied by management are, in all material respects, acceptable under in all material respects, acceptable under in all material respects, acceptable under PSASPSASPSASand are appropriate to the particular circumstances of and are appropriate to the particular circumstances of and are appropriate to the particular circumstances of the City. Accounting estimates are an integraestimates are an integraestimates are an integral part of the financial statementsl part of the financial statementsl part of the financial statementsprepared by management and are based on management’s current judgments. These judgments are normally based on knowledge and based on management’s current judgments. These judgments are normally based on knowledge and based on management’s current judgments. These judgments are normally based on knowledge and experience about past and current events, assumptions about future events and interpretations of experience about past and current events, assumptions about future events and interpretations of experience about past and current events, assumptions about future events and interpretations of the financial reporting standards.financial reporting standards.financial reporting standards. During the year ended December 31, 2022During the year ended December 31, 2022During the year ended December 31, 2022, management advised us that there were no significant changes , management advised us that there were no significant changes , management advised us that there were no significant changes in accounting estimates or in judgments relating to the application of the accounting policiesaccounting estimates or in judgments relating to the application of the accounting policiesaccounting estimates or in judgments relating to the application of the accounting policies. 5 © Deloitte LLP and affiliated entities. The City of Saint John| Appendix 1 – Communication requirements and other reportable matters Appendix 1 – Communication requirementsand other reportable matters Required communicationRefer to this report or document described below Audit Service Plan 1.Our responsibilities under Canadian GAAS, including Master Service AgreementMaster Service AgreementMaster Service Agreement forming and expressing an opinion on the financial statements 2.An overview of the overall audit strategy, The audit was conducted in accordance with our audit The audit was conducted in accordance with our audit The audit was conducted in accordance with our audit addressing:plan. We confirm that there have been no significanplan. We confirm that there have been no significanplan. We confirm that there have been no significant amendments to the audit scope and approach amendments to the audit scope and approach amendments to the audit scope and approach a.Timing of the audit communicated in the audit plan from prior yearcommunicated in the audit plan from prior yearcommunicated in the audit plan from prior year b.Significant risks, including fraud risks, names, ames, ames, locations, and planned responsibilities of other locations, and planned responsibilities of other locations, and planned responsibilities of other independent public accounting firms or others independent public accounting firms or others independent public accounting firms or others that perform audit procedures in the auditthat perform audit procedures in the auditthat perform audit procedures in the audit 3.Significant transactions outside of the normal course Significant transactions outside of the normal course Significant transactions outside of the normal course We have not identified any related party transactions We have not identified any related party transactions We have not identified any related party transactions of business, including related partyof business, including related partyof business, including related party transactions transactions transactions that that that were not in the normal course of operations and were not in the normal course of operations and were not in the normal course of operations and that involved significant judgments by management that involved significant judgments by management that involved significant judgments by management concerning measurement or disclosureconcerning measurement or disclosureconcerning measurement or disclosure Enquiries of those charged with governanceEnquiries of those charged with governance 4.How those charged with governance exercise How those charged with governance exercise How those charged with governance exercise Review of returned fraud inquiries oversight over management’s process for identifying management’s process for identifying management’s process for identifying and responding to the risk of fraud and the internal and responding to the risk of fraud and the internal and responding to the risk of fraud and the internal control that management has established to mitigate control that management has established to mitigate control that management has established to mitigate these risks 5.Any known suspected or alleged fraud affecting the Any known suspected or alleged fraud affecting the Any known suspected or alleged fraud affecting the We were not made aware of any suspected or alleged Cityfraud that would affect the City Year End Communication 6.Fraud or possible fraud identified through the We are not aware of any fraudulent events auditprocess 7.Significant accounting policies, practices, unusual Significant Accounting practices, judgements transactions, and our related conclusions and estimates 8.Alternative treatments for accounting policies and Significant Accounting practices, judgements practices that have been discussed withmanagement and estimates during the current audit period 9.Matters related to going concernExecutive summary 6 © Deloitte LLP and affiliated entities. The City of Saint John| Appendix 1 – Communication requirements and other reportable matters Required communicationRefer to this report or document described below 10.Use of the work of specialistsAs planned, Deloitte specialists and experts assisted in the audit to the extent we considered necessary: IT Participated in evaluating internal specialists:controls and in using our computerized audit applications Actuarial Helped assess the adequacy of the experts:defined benefit obligation 11.Consultation with other accountantsManagement has informed us that the Cityhas not consulted with other accountants about auditing or accounting matters 12.Management judgments and accounting estimatesSignificant Accounting practices, judgements Significant Accounting practices, judgements Significant Accounting practices, judgements and estimates estimates estimates 13.Significant difficulties, if any, encountered during the We did not encounter any significant difficulties while We did not encounter any significant difficulties while We did not encounter any significant difficulties while auditperforming the audit. There were no significant delays performing the audit. There were no significant delays performing the audit. There were no significant delays in receiving information from management required for in receiving information from management required for in receiving information from management required for the audit nor was there an unnecessarily brief the audit nor was there an unnecessarily brief the audit nor was there an unnecessarily brief timetable itimetable itimetable in which to complete the auditn which to complete the auditn which to complete the audit 15.Material written communications between Management representation letterManagement representation letterManagement representation letter management and us, including management representation letters 16.Circumstances that affect the form and the content Circumstances that affect the form and the content Circumstances that affect the form and the content Draft Draft Draft auditor’s reportauditor’s reportauditor’s report of the auditor’s report 17.Other matters that are significant toOther matters that are significant toOther matters that are significant tothe oversight of the oversight of the oversight of No other matters to report.No other matters to report.No other matters to report. the financial reporting processthe financial reporting processthe financial reporting process 18.Modifications to our opinion(s)Modifications to our opinion(s)Modifications to our opinion(s)Executive summaryExecutive summaryExecutive summary 19.Other significant matters discussed with ignificant matters discussed with ignificant matters discussed with For further detailsFor further detailsFor further details, please see the Significant Risks and managementEvents section. 20.Under our professional standards we are required to Under our professional standards we are required to Under our professional standards we are required to Our limited procedures did not identify any areas of communicate, unless we are prohibited by a law or communicate, unless we are prohibited by a law or communicate, unless we are prohibited by a law or material non-compliance with laws and regulations by regulation, matters involving nonregulation, matters involving nonregulation, matters involving non---compliance by the compliance by the compliance by the the City, that are not otherwise prohibited to disclosed Company with applicable laws and regulations, Company with applicable laws and regulations, Company with applicable laws and regulations, by law or regulation. including illegal or possibly illegal acts that come to including illegal or possibly illegal acts that come to including illegal or possibly illegal acts that come to our attention 21.LitigationNo litigation matters to report 22.Significant deficiencies in internal control, if any, Nodeficiencies to report identified by us in the conduct of the audit of the financial statements 23.Uncorrected misstatements and disclosure itemsIn accordance with Canadian GAAS, we request that all misstatements be corrected Other reportable matters 24.Changes to the auditplanThe audit was conducted in accordance with our audit plan. We confirm that there have been no significant amendments to the audit scope and approach communicated in the audit plan 25.Concerns regarding management competence and We have not determined any concerns regarding integritymanagement competence and integrity 7 © Deloitte LLP and affiliated entities. The City of Saint John| Appendix 1 – Communication requirements and other reportable matters Required communicationRefer to this report or document described below 26.Disagreements with managementIn the course of our audit, we did not encounter any disagreements with management about matters that individually or in the aggregate could be significant to the financial statements 27.Subsequent eventsAt the date of finalizing this report, we are not aware of any significantpost balance sheet events 28.Reliance on service organizationsNot applicable 29.Limitations when sending confirmationsNot applicable 8 © Deloitte LLP and affiliated entities. The City of Saint John| Appendix 2 – Group Audit Appendix 2 – Group Audit The audit of the Cityis considered to be a group audit, in which portions of the audit, wereconducted by another auditor. EntitySignificanceOther auditors The City of Saint John General Operating Fund SignificantDeloitte (includes Saint John Police Commission) The City of Saint John Capital and Loan FundSignificantDeloitte The City of Saint John Water and Sewerage Utility Operating FundSignificantSignificantSignificantDeloitte The City of Saint John Water and Sewerage Capital and Loan FundThe City of Saint John Water and Sewerage Capital and Loan FundThe City of Saint John Water and Sewerage Capital and Loan FundSignificantSignificantSignificantDeloitte Harbour Station CommissionSignificantSignificantSignificantDeloitte Saint John Transit CommissionSignificantSignificantSignificantDeloitte Power Commission of Saint JohnSignificantSignificantSignificantDeloitte Saint John Trade and Convention CentreNonsignificantNonsignificantNonsignificantDeloitte Lord Beaverbrook RinkNonsignificantNonsignificantNonsignificantAshe Casey & Mills Saint John Aquatic Centre CommissionNonsignificantNonsignificantNonsignificantDeloitte Saint John Free Public Library NonsignificantDeloitte As described above, significant parts of the audit will be performed by other auditors. We have determined As described above, significant parts of the audit will be performed by other auditors. We have determined As described above, significant parts of the audit will be performed by other auditors. We have determined that it is appropriate for us to serve as the Citythat it is appropriate for us to serve as the Citythat it is appropriate for us to serve as the City’’’s principal auditor and, as such, for us to report on the Citys principal auditor and, as such, for us to report on the Citys principal auditor and, as such, for us to report on the City’s financial statements. 9 © Deloitte LLP and affiliated entities. The City of Saint John| Appendix 3 – New and Revised Accounting and Auditing Standards Appendix 3 – New and Revised Accounting and Auditing Standards The following is a summary of certain new standards, amendments and proposals that will become effective in 2023and beyond. To review all recent amendments that will impact your organization in the foreTo review all recent amendments that will impact your organization in the foreTo review all recent amendments that will impact your organization in the foreseeable future, we invite you to review our revampedStandard section of iasplus.com. Public Sector Accounting Standards TitleDescriptionEffective DateEffective Date Section PS This Section establishes general reporting This Section establishes general reporting The amendments regarding 1201 - principles and standards for the disclosure of principles and standards for the disclosure of principles and standards for the disclosure of purchased intangibles are for Financial information in government financial statements.information in government financial statements.fiscal years beginning on or after Statement April 1, 2023. Earlier application Presentationpermitted. The amendments are effective for fiscal years beginning on or after April 1, 2022, with earlier application permitted. Transitional provisions have also been introducedin Section PS 2601. SectionPSThis Section establishes standards on how to Effective April 1, 2021, earlier 3280 - Assetaccount for and report a liability for asset application is permitted. retirementretirement obligations. obligations SectionPSThis Section establishes standards on how to Effective April 1, 2023, earlier 3400 - account for and report on revenue. Specifically, application is permitted. Revenueit differentiates between revenue arising from transactions that include performance obligations and transactions that do not have performance obligations. 10 © Deloitte LLP and affiliated entities. The City of Saint John| Appendix 3 – New and Revised Accounting and Auditing Standards TitleDescriptionEffective Date Guideline This Guideline explains the scope of the Effective for fiscal years PSG 8 - intangibles now allowed to be recognized in beginning on or after April 1, Purchased financial statements given the removal of the 2023. Earlier adoption is intangiblesrecognition prohibition relating to purchased permitted. intangibles in Section PS 1000. Section PS This Section describes the concepts underlying The amendments are effective 1000 - the development and use of accounting for fiscal years beginning on or Financial principles in government financial statements. principles in government financial statements. after April 1, 2023, with earlier statement Such financial statements are designed to meet d to meet application permitted. Retroactive application permitted. Retroactive conceptsthe common information needs of external the common information needs of external or prospective applicator prospective application is users of financial information about a users of financial information about a allowed.allowed. government. Section PS This Section establishes standards on how to standards on how to This Section applies to fiscal This Section applies to fiscal 3160 - Public account for public private partnership account for public private partnership years beginning on or after April years beginning on or after April Private arrangements.1, 2023. Early adoption is Partnershipsencouraged. 11 © Deloitte LLP and affiliated entities. The City of Saint John| Appendix 4 – Deloitte resources a click away Appendix 4 – Deloitte resources a click away At Deloitte, we are devoted to excellence in the provision of professional services and advice, always focused on client service. 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The City of Saint John| Additional required communication – Draft Management Representation Letter Additional required communication – Draft Management Representation Letter \[DATE\] Deloitte LLP P.O. Box 6549 Brunswick House th Floor 44 Chipman Hill, 7 Saint John, NB E2L 4R9 DearMr. Lund: Subject:ConsolidatedfinancialstatemmmeeennntttsssooofffTTThhheeeCCCiiitttyyyooofffSSSaaaiiinnntttJJJooohhhnnnfffooortheyearendedDecember31,2022 This representation letter is provided in connection with the auditThis representation letter is provided in connection with the auditThis representation letter is provided in connection with the auditby Deloitte LLP (“Deloitte” or “you”) of the consolidated financial statementsconsolidated financial statementsconsolidated financial statementsofofofthe City of Saint John (the “Organization” or “we” or “us”) as of and for the the City of Saint John (the “Organization” or “we” or “us”) as of and for the the City of Saint John (the “Organization” or “we” or “us”) as of and for the December31, 20231, 20231, 2022,2,2,the notes to the consolidated financial statementsthe notes to the consolidated financial statementsthe notes to the consolidated financial statementsand a summary of significant year ended accounting policies (the “Financial Statements”) for the purpose of expressing an opinion as to whether the accounting policies (the “Financial Statements”) for the purpose of expressing an opinion as to whether the accounting policies (the “Financial Statements”) for the purpose of expressing an opinion as to whether the Financial Statements present fairly,Financial Statements present fairly,Financial Statements present fairly,in all material respects, the financial position, results of operations, and cashin all material respects, the financial position, results of operations, and cashin all material respects, the financial position, results of operations, and cash flows ofthe Organization in accordance with Public Sector Accounting Standards (“PSAS”).the Organization in accordance with Public Sector Accounting Standards (“PSAS”).the Organization in accordance with Public Sector Accounting Standards (“PSAS”). Certain representations in this letter are described as being limited to matters that are material. Items are Certain representations in this letter are described as being limited to matters that are material. Items are Certain representations in this letter are described as being limited to matters that are material. Items are considered to be material if they, individually or in the aggregate, could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. We confirm that, to the best of our knowledge and belief, having made such inquiries as we considered necessary for the purpose of appropriately informing ourselves: Financial statements 1.We have fulfilled our responsibilities as set out in the terms of the engagement letter between the Organization and Deloitte datedDecember 12, 2022 for the preparation of the Financial Statements in are fairly presented, in all material respects, accordance with PSAS.In particular, the Financial Statements and present the financial position of the Organization as atDecember31, 2022, and the results of its then ended in accordance with PSAS. operations and cashflows for the year 2.Significant assumptions used in making estimates, including those measured at fair value, are reasonable. 13 © Deloitte LLP and affiliated entities. The City of Saint John| Additional required communication – Draft Management Representation Letter In preparing the Financial Statementsin accordance with PSAS, management makes judgments and assumptions about the future and uses estimates.The completeness and appropriateness of the disclosures related to estimates are in accordance with PSAS. The Organization has appropriately disclosed in the Financial Statements the nature of measurement uncertainties that are material, including all estimates where it is reasonably possible that the estimate will change in the near term and the effect of the change could be material to the Financial Statements. The measurement methods, including the relatedassumptions and models, used in determining the estimates, including fair value, were appropriate, reasonable and consistently applied in accordance with PSAS and appropriately reflect management's intent and ability to carry out specific courses of action on behalf of the entity. No events have occurred subsequent toDecember31, 2022that require adjustment to the estimates and disclosures included in the Financial Statements. There are no changes in management’s method of determining significant estimates in the current year.significant estimates in the current year.significant estimates in the current year. 3.We have determined that the Financial Statements are complete as ofWe have determined that the Financial Statements are complete as ofWe have determined that the Financial Statements are complete as ofthe date of this letter the date of this letter the date of this letter as this is the date when there are no changes to the Financial Statements (including disclosures) planned or expected. date when there are no changes to the Financial Statements (including disclosures) planned or expected. date when there are no changes to the Financial Statements (including disclosures) planned or expected. The Financial Statements have been approved in accordance with our process to finalize financial e Financial Statements have been approved in accordance with our process to finalize financial e Financial Statements have been approved in accordance with our process to finalize financial statements. 4.We have completed our review of events after December 31, 2022 r December 31, 2022 r December 31, 2022 and up to the date of this letter.and up to the date of this letter.and up to the date of this letter. 5.The Financial Statements are free of material errThe Financial Statements are free of material errThe Financial Statements are free of material errors and omissions.ors and omissions.ors and omissions. Uncorrected misstatements detected that relate to the prior year Uncorrected misstatements detected that relate to the prior year Uncorrected misstatements detected that relate to the prior year 6.We believe the effects of the uncorrected financial statement misstatements detected in the current year We believe the effects of the uncorrected financial statement misstatements detected in the current year We believe the effects of the uncorrected financial statement misstatements detected in the current year A) that relate to the prior year presented, when combined with those ) that relate to the prior year presented, when combined with those ) that relate to the prior year presented, when combined with those (as summarized in Appendix misstatements aggregated by you during the priormisstatements aggregated by you during the priormisstatements aggregated by you during the prior---year audit engagement and pertaining to the prior year year audit engagement and pertaining to the prior year year audit engagement and pertaining to the prior year presented, are immaterial, both individually and in the aggregate, to the Financial presented, are immaterial, both individually and in the aggregate, to the Financial presented, are immaterial, both individually and in the aggregate, to the Financial Statements for the prior year ended,DecemberDecemberDecember31, 31, 31, 202120212021taken as a whole.taken as a whole.taken as a whole. Internal Controls 7.We acknowledge our responsibility for the design, implementation and maintenance of internal control to We acknowledge our responsibility for the design, implementation and maintenance of internal control to We acknowledge our responsibility for the design, implementation and maintenance of internal control to prevent and detect fraud and error.prevent and detect fraud and error.prevent and detect fraud and error. 8.We have disclosed to you all known deficiencies in the design or operation of internal control over financial reporting identified as part of our evaluation, including separately disclosing to you all such deficiencies that we believe to be significant deficiencies in internal control over financial reporting. Information provided 9.We have provided you with: a.Access to all information of which we are aware that is relevant to the preparation of the Financial Statements, such as records, documentation and other matters. b.All relevant information as well as additional information that you have requested from us for the purpose of the audit; c.Unrestricted access to persons within the entity from whom you determined it necessary to obtain audit evidence; and, 14 © Deloitte LLP and affiliated entities. The City of Saint John| Additional required communication – Draft Management Representation Letter d.All minutes of the meetings of directors and committees of directors, or summaries of actions of recent meetings for which minutes have not yet been prepared. All significant board and committee actions are included in the summaries. 10.We have disclosed to you the results of our assessment of the risk that the Financial Statements may be materially misstated as a result of fraud. 11.We have no knowledge of anyinformation in relation to fraud or suspected fraud that we are aware of and that affects the entity and involves: a.Management; b.Employees who have significant roles in internal control; or c.Others where the fraud could have a material effect on the Financial Statements. 12.We have no knowledge of anyinformation in relation to allegations of actual, suspected or information in relation to allegations of actual, suspected or information in relation to allegations of actual, suspected or alleged fraud, or illegal or suspected illegal acts affecting the Organization. 13.There have been no communications with regulatory agencies concerning actual or potential There have been no communications with regulatory agencies concerning actual or potential There have been no communications with regulatory agencies concerning actual or potential noncompliance with or deficiencies in financial reporting practicesnoncompliance with or deficiencies in financial reporting practicesnoncompliance with or deficiencies in financial reporting practices. . . There are also noThere are also noThere are also noknown or possible instances of non-compliance with the requirements of regulatory or governmental authorities.compliance with the requirements of regulatory or governmental authorities.compliance with the requirements of regulatory or governmental authorities. 14.We have disclosed to you the identities of the entity’s related parties and all the related party relationships We have disclosed to you the identities of the entity’s related parties and all the related party relationships We have disclosed to you the identities of the entity’s related parties and all the related party relationships and transactions of which we are aware, including guarantees, nonand transactions of which we are aware, including guarantees, nonand transactions of which we are aware, including guarantees, non---monetary transactions and transactions monetary transactions and transactions monetary transactions and transactions for no consideration. Independence matters For purposes of the following paragraphsFor purposes of the following paragraphsFor purposes of the following paragraphs,,,“Deloitte” shall mean “Deloitte” shall mean “Deloitte” shall mean Deloitte LLP andDeloitte LLP andDeloitte LLP andDeloitte Touche Tohmatsu Limited, including related member firms and affiliates. Limited, including related member firms and affiliates. Limited, including related member firms and affiliates. 15.Prior to the Organization having any substantive employment conversations with a former or current Prior to the Organization having any substantive employment conversations with a former or current Prior to the Organization having any substantive employment conversations with a former or current Deloitte engagement team member, the Organization has held discussions with Deloitte and obtained Deloitte engagement team member, the Organization has held discussions with Deloitte and obtained Deloitte engagement team member, the Organization has held discussions with Deloitte and obtained approval from the Finance CommittCommittCommitteeeeee. . . 16.We have ensured that all non-audit services provided to the Organization have been preaudit services provided to the Organization have been preaudit services provided to the Organization have been pre-approved by the Audit Committee.Further, we have adhered to all regulatory requirements regarding the provision of nonFurther, we have adhered to all regulatory requirements regarding the provision of nonFurther, we have adhered to all regulatory requirements regarding the provision of non- audit services by Deloitte to the Organization in accordance with applicable laws, regulations and rules that audit services by Deloitte to the Organization in accordance with applicable laws, regulations and rules that audit services by Deloitte to the Organization in accordance with applicable laws, regulations and rules that apply to the Organization, including the FinanceCommittee approval requirements. 17.We have ensured that all services performed by Deloitte with respect to this engagement have been pre- in accordance with its established approval policies and procedures. approved by theAudit Committee Other matters Except where otherwise stated below, immaterial matters less than $330,000collectively are not considered to be exceptions that require disclosure for the purpose of the following representations. This amount is not necessarily indicative of amounts that would require adjustment to or disclosure in the Financial Statements. 18.All transactions have been properly recorded in the accounting records and are reflected in the Financial Statements. 19.The Organization has identified all related parties in accordance with Section PS 2200, Related Party Management has made the appropriate disclosures with respect to its related party Disclosures (“PS 2200”). transactions in accordance with PS 2200. 15 © Deloitte LLP and affiliated entities. The City of Saint John| Additional required communication – Draft Management Representation Letter 20.There are no instances of identified or suspected noncompliance with laws and regulations. 21.We have disclosed to you all known, actual or possible litigation and claims, whether or not they have been discussed with our lawyers, whose effects should be considered when preparing the Financial Statements. As appropriate, these items have been disclosed and accounted for in the Financial Statements in accordance with PSAS. 22.All events subsequent to the dateof the Financial Statements and for which PSAS requires adjustment or disclosure have been adjusted or disclosed.Accounting estimates and disclosures included in the Financial Statements that are impacted by subsequent events have been appropriately adjusted. 23.We have disclosed to you all liabilities, provisions, contingent liabilities and contingent assets, including those associated with guarantees, whether written or oral, and they are appropriately reflected in the Financial Statements. 24.We have disclosed to you, and the Organization has complied with all aspects of contractual agreements ed to you, and the Organization has complied with all aspects of contractual agreements ed to you, and the Organization has complied with all aspects of contractual agreements that could have a material effect on the Financial Statements in the event of nonthat could have a material effect on the Financial Statements in the event of nonthat could have a material effect on the Financial Statements in the event of non-compliance, including all covenants, conditions or other requirements of all outstandicovenants, conditions or other requirements of all outstandicovenants, conditions or other requirements of all outstanding debt.ng debt.ng debt. 25.The Organization has satisfactory title to and control over all assets, and there are no liens or encumbrances The Organization has satisfactory title to and control over all assets, and there are no liens or encumbrances The Organization has satisfactory title to and control over all assets, and there are no liens or encumbrances on such assets.We have disclosed to you and in the Financial Statements all assets that have been pledged We have disclosed to you and in the Financial Statements all assets that have been pledged We have disclosed to you and in the Financial Statements all assets that have been pledged as collateral. Accounting Policies 26.The selection and application of accounting policies are appropriate.The selection and application of accounting policies are appropriate.The selection and application of accounting policies are appropriate. 27.The City’s accounting policies and their method of application have been applied on a basis consistent with The City’s accounting policies and their method of application have been applied on a basis consistent with The City’s accounting policies and their method of application have been applied on a basis consistent with that of the audited Financial Statements as of and for the year ended December 31, that of the audited Financial Statements as of and for the year ended December 31, that of the audited Financial Statements as of and for the year ended December 31, 2021. Going Concern 28.Management has completed its assessment of thManagement has completed its assessment of thManagement has completed its assessment of the ability of the City to continue as a going concern and in e ability of the City to continue as a going concern and in e ability of the City to continue as a going concern and in making its assessment did not identify any material uncertainties related to events or conditions that may making its assessment did not identify any material uncertainties related to events or conditions that may making its assessment did not identify any material uncertainties related to events or conditions that may cast significant doubt upon the City's ability to continue as a going concern, which woulcast significant doubt upon the City's ability to continue as a going concern, which woulcast significant doubt upon the City's ability to continue as a going concern, which would require disclosure in the Financial Statements. In assessing whether the going concern assumption is appropriate, in the Financial Statements. In assessing whether the going concern assumption is appropriate, in the Financial Statements. In assessing whether the going concern assumption is appropriate, management took into account all available information about the future, which is at least, but is not limited management took into account all available information about the future, which is at least, but is not limited management took into account all available information about the future, which is at least, but is not limited to, twelve months from the statement of financial position date, their plans for future action and the feasibility of these plans. Fair value 29.With regard to the fair value measurements and disclosures of certain assets and liabilities, we believe that: a.The completeness and adequacyof the disclosures related to fair values are in accordance with Public Sector Accounting Standards (“PSAS”). b.No events have occurred subsequent to December 31, 2022 that require adjustment to the fair value measurements and disclosures included in theFinancial Statements. c.They appropriately reflect management's intent and ability to carry out specific courses of action on behalf of the City when relevant to the use of fair value measurements or disclosures. 16 © Deloitte LLP and affiliated entities. The City of Saint John| Additional required communication – Draft Management Representation Letter Plans or intentions affecting carrying value/classification of assets and liabilities 30.We have disclosed to you all plans or intentions that may materially affect the carrying value or classification of assets and liabilities reflected in the Financial Statements. Various matters 31.The following have been properly recorded and, when appropriate, adequately disclosed and presented in the Financial Statements: a.losses arising from sale and purchase commitments; b.agreements to buy back assets previously sold; c.provisions for future removal and site restoration costs; d.financial instruments with significant individual or group concentration of credit risk, and related financial instruments with significant individual or group concentration of credit risk, and related financial instruments with significant individual or group concentration of credit risk, and related maximum credit risk exposure; e.arrangements with financial institutions involving compensating balances or other arrangements arrangements with financial institutions involving compensating balances or other arrangements arrangements with financial institutions involving compensating balances or other arrangements involving restriction on cash balances and line-of-credit or similar arrangements;credit or similar arrangements;credit or similar arrangements; f.all impaired loans receivable; g.loans that have been restructured to provide a reduction or deferral of interest or principal payments loans that have been restructured to provide a reduction or deferral of interest or principal payments loans that have been restructured to provide a reduction or deferral of interest or principal payments because of borrower financial difficulties.because of borrower financial difficulties.because of borrower financial difficulties. Management’s responsibilities 32.All transactions and events have been carried out in accordance with law, regulation or other authority.All transactions and events have been carried out in accordance with law, regulation or other authority.All transactions and events have been carried out in accordance with law, regulation or other authority. Investments 33.With regard to the City’s investment in Saint John Energy, we have disclosed to you any events that have With regard to the City’s investment in Saint John Energy, we have disclosed to you any events that have With regard to the City’s investment in Saint John Energy, we have disclosed to you any events that have occurred and facts that have been discovered with respect to such investment that would indicate rred and facts that have been discovered with respect to such investment that would indicate rred and facts that have been discovered with respect to such investment that would indicate impairment of the investment’s valueimpairment of the investment’s valueimpairment of the investment’s value Notes, loans and receivablesNotes, loans and receivablesNotes, loans and receivables 34.We have identified to you all forgivable loans and loans with concessionary terms and have appropWe have identified to you all forgivable loans and loans with concessionary terms and have appropWe have identified to you all forgivable loans and loans with concessionary terms and have appropriately reflected these instruments in the financial statements.reflected these instruments in the financial statements.reflected these instruments in the financial statements. Communications with taxation agencies 35.We have disclosed to you all communications from taxation authorities concerning assessments or reassessments that could have a material effect on the Financial Statements. Employee future benefits 36.Management has appropriately identified all employee future benefit costs, assets, and obligations, as applicable. Government Business Enterprises and Government Partnerships 37.The City has appropriately classified its investments in Saint John Energy as a Government Business Enterprise. 38.With regard to the City’s investment in Saint John Energy, we have disclosed to you any events that have occurred and facts that have been discovered with respect to such investment that would affect the investment’s value as reported in the Financial Statements. 17 © Deloitte LLP and affiliated entities. The City of Saint John| Additional required communication – Draft Management Representation Letter Government transfers 39.We have disclosed to you all correspondence relating to government transfers that the City has had with the funding body. 40.We have assessed theeligibility criteria and determined that the City is an eligible recipient for the government transfers received. 41.We have assessed the stipulations attached with the funding and have recognized the revenue in accordance with meeting the stipulations required. 42.All government transfers that have been recorded as deferred revenue give rise to an obligation that meets the definition of a liability. Those liabilities have been properly recorded and presented in the consolidated Financial Statements. Tangible capital assets 43.Tangible capital assets have been recorded properly and consistently according to the standards in CPA Tangible capital assets have been recorded properly and consistently according to the standards in CPA Tangible capital assets have been recorded properly and consistently according to the standards in CPA Canada Public Sector Accounting Handbook Section PS 3150, Tangible Capital Assets.Canada Public Sector Accounting Handbook Section PS 3150, Tangible Capital Assets.Canada Public Sector Accounting Handbook Section PS 3150, Tangible Capital Assets. 44.Contributed tangible capital assets have been appropriately recorded at fair value, unless fair value is not Contributed tangible capital assets have been appropriately recorded at fair value, unless fair value is not Contributed tangible capital assets have been appropriately recorded at fair value, unless fair value is not reasonably determinable, and in such case, have been recorded at an appropriate nominal value. All reasonably determinable, and in such case, have been recorded at an appropriate nominal value. All reasonably determinable, and in such case, have been recorded at an appropriate nominal value. All contributed tangible capital assets have been appropriately disclosed. contributed tangible capital assets have been appropriately disclosed. contributed tangible capital assets have been appropriately disclosed. 45.We have assessed the useful lives of tangible capital assets and have determined all tangible capital assets es of tangible capital assets and have determined all tangible capital assets es of tangible capital assets and have determined all tangible capital assets contribute to the City’s ability to provide goods and services and therefore do not require a write down.contribute to the City’s ability to provide goods and services and therefore do not require a write down.contribute to the City’s ability to provide goods and services and therefore do not require a write down. Deficiencies in internal controlDeficiencies in internal controlDeficiencies in internal control 46.We have communicated to you all deficiencies in internal control of which we are aware. We have disclosed We have communicated to you all deficiencies in internal control of which we are aware. We have disclosed We have communicated to you all deficiencies in internal control of which we are aware. We have disclosed to you any change in the City’s internal control over financial reporting that occurred during the current year to you any change in the City’s internal control over financial reporting that occurred during the current year to you any change in the City’s internal control over financial reporting that occurred during the current year that has materially affected, or is reasonably likely to materially affect, the City’s internal control over that has materially affected, or is reasonably likely to materially affect, the City’s internal control over that has materially affected, or is reasonably likely to materially affect, the City’s internal control over financial reporting. Adjusting journal entries 47.We have reviewed the year-end adjusting entries and acknowledge our responsibility for their accuracy.end adjusting entries and acknowledge our responsibility for their accuracy.end adjusting entries and acknowledge our responsibility for their accuracy. Communicating a threshold amount 48.We understand that the threshold used foraccumulating misstatements identified during the year was $330,000 for purposes of Appendix A. Misstatements below this amount have been considered clearly trivial. Yours truly, TheCityofSaintJohn KevinFudge,CPACA 18 © Deloitte LLP and affiliated entities. The City of Saint John | Additional required communication – Draft Management Representation Letter AppendixA Summary of prior year uncorrected financial statement misstatements The City of Saint John Year ended December 31, 2022 DescriptionofAssetsLiabilitiesAccumulatedOtherEquityAnnualsurplus Misstatementsurplus Government ($613,252)($613,252)($613,252)$613,252 transfer funding received in 2021 but not recognized in 1 2021 1 Deloitte identified a prior year error when substantively testing government transfer revenue. The error relates to funding received from the Department of Environment and Climate Change Canada (“the Department”) for the Municipal Retrofit project in Saint John to reduce greenhouse gas emissions, a capital budget project that would not have an impact on the City’s operating surplus or deficit. The project commenced in 2021 in which the City was eligible to submit claims and obtain reimbursements from the Department for work performed. The revenue was earned and cash received in 2021 but was incorrectly recognized in early 2022. 19 © Deloitte LLP and affiliated entities. FINANCECOMMITTEEREPORT Report DateJune 22, 2023 Meeting DateJune 28, 2023 Chairman Gary Sullivanand Members of Finance Committee SUBJECT: 2022 Audited Consolidated Financial Statements OPEN OR CLOSED SESSION This matter is to be discussed in open session of Finance Committee. AUTHORIZATION Primary AuthorCommissioner/Dept. HeadChief Administration Officer Craig LavigneKevin FudgeJ. Brent McGovern RECOMMENDATION It is recommended that. EXECUTIVE SUMMARY The purpose of this report is to provide the Finance Committee with an overview of the audited 2022Consolidated Financial Statements. The City of Saint John received a clean audit opinionwhich mean the financial statements present fairly, in all material respects, the financialpositionin the City in accordance with Canadian The report will provide an overview of the major accounting differences between the budgetsfor the General and Utility versus the financial results reported on a consolidated basis. The consolidated statement of operation financial resulted in an annual surplus of $54,192,469 which a large portion resulting from a significant noncashaccounting entry done as part of actuarial review done on employee benefits for Saint John Energyas well as significant government transfers for Capital projects. - 2 - The General Fund Operating budget ended 2022 with a surplus of $2,335,841 and the Utility Fund ended 2022 with a surplus of $266,284 and the report will discuss some of the variances associated with these surpluses. PREVIOUS RESOLUTION N/A STRATEGIC ALIGNMENT The report aligns with Council's priority of ensuring the organization performs. The positive trends that the 2022 Consolidated Financial statements show are the results of following the Long-Term Financial Plan and how the various financial polices ensure the City is delivery financial results. REPORT The purpose of this report is to provide the Finance Committee with an overview of the audited 2022 Consolidated Financial Statements. The City of Saint John received a clean audit opinion which mean the financial statements present fairly, in all material respects, the financial position in the City in accordance with The report will provide an overview of the major accounting differences between the budgets for the General and Utility versus the financial results reported on a consolidated basis. General and Utility Fund Operating Budget vs. Public Sector Accounting Standards . Various sections under the act state that the City cannot own a corporation for the purposes of making a profit. - 3 - The City of Saint John General Operating Fund The City of Saint John Capital and Loan Fund The City of Saint John Water and Sewerage Utility Operating Fund The City of Saint John Water and Sewerage Utility Capital and Loan Fund Saint John Transit Commission TD Station Commission Saint John Aquatic Centre Commission Saint John Trade and Convention Centre Saint John Energy Lord Beaverbrook Rink Saint John Police Commission Saint John Free Public Library NOTE: The Canada Games Foundation Incorporated is no longer consolidated with the City of Saint John. The Foundation amended their Letters Patent and by-laws in 2022 effectively removing any connection with the City of Saint John, therefor consolidation is no longer required. 2022 Consolidated Financial Statements Highlights Consolidated Statement of Financial Position 2022 long term financial plan is financial health continues to improve, and debt continues to decline across the various entities. Net Debt now stands at $97,323,421 for 2022 (2021 - $159,394,905) and was over $330,000,000 in 2018. overall financial health. The higher the level of Net Debt the more future revenues will be needed to fund past transactions and events. - 4 - Long term debt for both the Utility and General fund continues to decrease with the General fund seeing a reduction of 24.28% in debt since 2014 and the Utility reducing debt by 29.63% since 2017. Another sign that the financial health continues to improve is the Statement of Reserves under note 20. Overall reserves for the General Fund and Utility Fund now have a balance of $37,546,839 at the end of 2021 ($33,245,004). Statement of Operations and Accumulated Surplus The consolidated statement of operating for 2022 resulted in an annual surplus of $54,192,468 (2021 - $41,592,865). A large reason for the annual surplus before government transfers was an exceptionally large non-cash accounting entry due to actuarial gains related to post-employment benefits. This resulted in the income from energy sources to be $21,582,000. Government transfers for capital assets was $19,983,136 for 2022 compared to $3,194,795 in 2021. The reason for the variance is the amount of Capital funding the City has been successful in securing, along with Capital works ramping back up as the recovery from Covid continued during 2022. The statement of operations does not reflect the true budgeted results for the General and Utility funds due to the adjustments, consolidation, and other accounting entries required under Public Sector Account Standards. Note 23 in the consolidated statement clearly shows the results of the general and utility funds with all the adjustments to balance to the annual surplus reported under General Fund Operating Budget Results The General Fund Operating Budget result is a surplus of $2,335,841. As reported at a previous meeting of the Finance Committee, in March, the City had a non- cash actuarial favor adjustment of $2,466,342. Therefor the City has an operating budget deficit of $130,501 or 0.079% variance. Staff reported anticipated year end deficit of $8,610 at the March meeting. Utility Fund Operating Budget Results The Utility ended up with a surplus of $266,285 versus the reported the anticipated surplus of $113,854 at the March Finance Committee meeting. There was a surplus in both revenue and expenditure. Revenues continued to recover during 2022 as businesses recovered from COVID and the increase in revenue allowed an additional $750,000 to be transferred into a Capital Reserve. - 5 - Conclusion Overall, the surpluses are a positive note for the City. The fiscal year 2022 saw the ongoing recovery from COVID, challenging snow season early 2022, massive increase in goods and services, particularly fuel cost that were offset with increases in revenue such as building permits, parking revenue, accommodation levies and funding for provincial roads. The various plans and policies in place continue to move the City into a healthy financial position and meet the various financial targets set out. SERVICE AND FINANCIAL OUTCOMES See attachments INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS N/A ATTACHMENTS Appendix 1 The City of Saint John December 31, 2022 Draft Consolidated FS Appendix 2 General Operating Fund December 31, 2022 Draft FS Appendix 3 Utility Operating Fund December 31, 2022 Draft FS Appendix 4 The City of Saint John Trust Funds December 31, 2022 Draft FS Appendix 5 Trade and Convention Centre December 31, 2022 Draft FS The City of Saint John Consolidated Financial Statements December 31, 2022 The City of Saint John Contents Consolidated Financial StatementsPage Independent Auditor's Report3 - 4 Consolidated Statement of Financial Position5 Consolidated Statement of Operations and Accumulated Surplus6 Consolidated Statement in Changes in Net Debt7 Consolidated Statement of Cash Flow8 Notes to the Consolidated Financial Statements9-37 2 Deloitte LLP P.O. Box 20094 Brunswick Square Saint John NB E2L 5B2 Canada Tel: 506-632-1080 Fax: 506-632-1210 www.deloitte.ca Independent Auditor’s Report To Her Worship the Mayor and Members of Common Council of The City of Saint John Report on the Auditof theFinancial Statements Opinion We have audited the financial statements of the City of Saint Johnhe City of Saint Johnhe City of Saint John(the “(the “(the “CityCityCity”), which comprise the ”), which comprise the ”), which comprise the statement of financial positionas at December 31, 20December 31, 20December 31, 20222222, and the statements of , and the statements of , and the statements of operations, operations, operations, and accumulated surplus, change in net debt and cash flowaccumulated surplus, change in net debt and cash flowaccumulated surplus, change in net debt and cash flowfor the year then ended, and notesfor the year then ended, and notesfor the year then ended, and notesto the financial statements, including a summary of significant accounting policies (collectively referred to as the , including a summary of significant accounting policies (collectively referred to as the , including a summary of significant accounting policies (collectively referred to as the “financial statements”). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial In our opinion, the accompanying financial statements present fairly, in all material respects, the financial In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Cityas at December 31, 20December 31, 20December 31, 20222222, and , and , and thethetheresults of results of results of its its its operations, itsaccumulated surplus, changes initsnet debt,and its cash flows for the year then ended in accordance with and its cash flows for the year then ended in accordance with and its cash flows for the year then ended in accordance with Canadian public sector accounting standards (“accounting standards (“accounting standards (“PSASPSASPSAS”)”)”). . . BasisforOpinion We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our responsibilities under those standards are further described in the GAAS”). Our responsibilities under those standards are further described in the GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements for the Audit of the Financial Statements for the Audit of the Financial Statements sectionsectionsectionof our report. We are independent of the Cityin accordance with the ethical requirements that are relevant to our audit of the financial statements in accordance with the ethical requirements that are relevant to our audit of the financial statements in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ResponsibilitiesofManagementandThoseChargedwithGovernancefortheFinancial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with PSAS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the City’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Cityor to cease operations, or has no realistic alternative but to do so. 1 Those charged with governance are responsible for overseeing theCity’sfinancial reporting process. Auditor’sResponsibilitiesfortheAuditoftheFinancialStatements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken onthe basis of these financial statements. As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detectingevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detectingevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud maya material misstatement resulting from fraud is higher than for one resulting from error, as fraud maya material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internalinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internalinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to thObtain an understanding of internal control relevant to thObtain an understanding of internal control relevant to the audit in order to design audit procedurese audit in order to design audit procedurese audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on thethat are appropriate in the circumstances, but not for the purpose of expressing an opinion on thethat are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Evaluate the appropriateness of accounting policies used and the rEvaluate the appropriateness of accounting policies used and the rEvaluate the appropriateness of accounting policies used and the reasonableness of accountingeasonableness of accountingeasonableness of accounting estimates and related disclosures made by management.estimates and related disclosures made by management.estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basis of accounting and,Conclude on the appropriateness of management’s use of the going concern basis of accounting and,Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists based on the audit evidence obtained, whether a material uncertainty exists based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the conditions that may cast significant doubt on the conditions that may cast significant doubt on the CityCityCity’s ability to continue as a going concern. If we’s ability to continue as a going concern. If we’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s reporconclude that a material uncertainty exists, we are required to draw attention in our auditor’s reporconclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the related disclosures in the related disclosures inthe financial statements or, if such disclosures are inadequate, to modifythe financial statements or, if such disclosures are inadequate, to modifythe financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’sour opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’sour opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the report. However, future events or conditions may cause the report. However, future events or conditions may cause the Cityto cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including theEvaluate the overall presentation, structure and content of the financial statements, including theEvaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fairpresentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Report on Other Legal and Regulatory Requirements As required by the Government of New Brunswick, we report that, in our opinion, the accounting principles in Canadian public sector accounting standards have been applied on a consistent basis. Chartered Professional Accountants Saint John, NB \[DATE\] The City of Saint John Consolidated Statement of Financial Position As at December 31, 2022 20222021 $$ Financial Assets Cash and cash equivalents (Note 4) 117,120,316 93,800,447 Accounts receivable (Notes 5, 6 & 7) 20,555,712 18,259,735 Investment in energy services (Note 8) 82,380,000 60,798,000 Note receivable (Note 9) 20,000,000 22,500,000 Other investments (Note 10) 899,331 9,582,591 240,955,359 204,940,773 Financial Liabilities Accounts payable and accrued liabilities (Note 11) 29,607,232 30,755,985 Deferred revenue 2,329,976 1,857,330 Deferred government transfers (Note 12) 32,727,955 20,823,962 Post-employment benefits and compensated absences (Note 14) 78,729,900 99,816,287 Long-term debt (Note 13) 194,883,717 211,082,114 338,278,780 364,335,678 Net debt (97,323,421) (159,394,905) Non-financial assets Inventory 3,992,671 3,898,144 Prepaid expenses 116,185 550,684 Tangible capital assets (Note 21) 984,012,685 991,551,729 988,121,541 996,000,557 Accumulated surplus 890,798,120 836,605,652 Contingencies (Note 15) Commitments (Note 16) Approved by: Donna Noade Reardon, MayorGary Sullivan, Chair of Finance Committee Jonathan Taylor, Common Clerk 5 The City of Saint John Consolidated Statement of Operations and Accumulated Surplus As at December 31, 2022 2022 Budget (Unaudited)20222021 (Note 2) $$$ Revenues Property taxes 129,423,241 131,483,087 129,196,736 Unconditional grant 17,837,497 16,647,118 17,335,948 Other revenue from own sources (Note 26) 20,213,311 22,411,697 17,256,398 Water and sewer revenue 47,630,075 45,312,262 44,723,001 Miscellaneous revenue 3,802,418 1,217,810 7,138,794 Contributions from others (Note 26) 250,000 799,858 1,419,504 Income from energy services - 21,582,000 24,082,000 219,156,542 239,453,833 241,152,381 Expenses General government services (Note 26) 46,772,370 18,126,184 34,809,270 Protective services (Note 26) 57,651,957 53,986,800 52,873,023 Transportation services (Note 26) 41,062,964 44,539,918 40,553,941 Water and sewer services (Note 26) 49,596,475 47,035,748 46,030,787 Environmental health services (Note 26) 3,674,381 3,656,997 3,571,322 Environmental development services (Note 26) 16,364,126 19,105,025 15,794,223 Recreational and cultural services (Note 26) 9,445,513 10,050,557 9,121,745 Canada Games Foundation Investment (Note 10 & 26) - 8,743,271 - 224,567,786 205,244,500 202,754,311 Annual surplus (deficit) before capital contributions (5,411,244) 34,209,333 38,398,070 Government transfers for capital (Note 26) - 19,983,136 3,194,795 Annual surplus - 54,192,468 41,592,865 Accumulated surplus, beginning of year - 836,605,652 795,012,787 Accumulated surplus, end of year - 890,798,120 836,605,652 6 The City of Saint John Consolidated Statement of Changes in Net Debt As at December 31, 2022 20222021 $$ Annual surplus 54,192,468 41,592,865 Acquisition of tangible capital assets (Note 21) (35,226,780) (27,213,257) Loss on disposal of tangible capital assets (Note 21) 925,216 528,564 Proceeds on sale of tangible capital assets 362,275 238,543 Amortization of tangible capital assets (Note 21) 41,478,333 41,439,277 (Increase) Decrease in inventory (94,527) 112,078 Decrease in prepaid expenses 434,499 149,490 Decrease in net debt 62,071,484 56,847,560 Net debt, beginning of year (159,394,905) (216,242,465) Net debt, end of year (97,323,421) (159,394,905) 7 The City of Saint John Consolidated Statement of Cash Flow As at December 31, 2022 20222021 $$ Operating transactions Annual surplus 54,192,468 41,592,865 Items not involving cash Amortization of tangible capital assets (Note 21) 41,478,333 41,439,277 Loss on disposal of tangible capital assets (Note 21) 925,216 528,564 Income from energy services (21,582,000) (24,082,000) Change in non-cash assets and liabilities Accounts receivable (2,295,977) 6,249,799 Inventory (94,527) 112,078 Prepaid expenses 434,499 149,490 Accounts payable and accrued liabilities (1,148,753) (27,443,778) Deferred revenue 472,646 521,161 Deferred government transfers 11,903,993 4,224,211 Other post-employment liabilities (21,086,387) (5,852,083) 63,199,511 37,439,584 Capital transactions Acquisitions of tangible capital assets (Note 21) (35,226,780) (27,213,257) Proceeds on the sale of tangible capital assets 362,275 238,543 (34,864,505) (26,974,714) Financing transactions Repayment of long-term debt (23,448,396) (23,738,900) Proceeds from long-term debt 7,250,000 6,000,000 (16,198,396) (17,738,900) Investing transactions Redemption (Purchase) of investments (Note 10) 8,683,260 (991,744) Note receivable 2,500,000 2,500,000 11,183,260 1,508,256 Increase (Decrease) in cash and cash equivalents 23,319,871 (5,765,774) Cash and cash equivalents, beginning of year 93,800,447 99,566,221 Cash and cash equivalents, end of year 117,120,316 93,800,447 8 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 1.Purpose of the Organization TheCityofSaintJohn(the"City)wasincorporatedbyroyalcharterin1785.Asamunicipality,theCityis exemptfromincometaxesunderSection149(1)(c)oftheCanadianIncomeTaxAct.TheCityhasthe followingvisionstatement:"Weareenergized,engagedpeoplecommittedtoworkingtogethertoprovide services that are responsive to community needs and delivered in a sustainable, cost effective way." 2.Summary of Significant Accounting Policies TheconsolidatedfinancialstatementsoftheCityaretherepresentationsoftheCity'smanagement preparedinaccordancewithPublicSectorAccountingStandards("PSAS")asrecommendedbythe Chartered Professional Accountants of Canada Public Sector Accounting Board ("PSAB"). Significant aspects of the accounting policies adopted by the City are as follows: Reporting Entity Theconsolidatedfinancialstatementsreflecttheassets,liabilities,revenues,expendituresandchangesin netdebtandcashflowsofthereportingentity.Thereportingentityiscomprisedofallorganizationsand enterprisesaccountablefortheadministrationoftheiraffairsandresourcestotheCityandwhichare owned or controlled by the City. Interdepartmental and organization transactions and balances are eliminated. ThefocusofPSASfinancialstatementsisonthefinancialpositionoftheCityandthechangesthereto.The Consolidated Statement of Financial Position includes all the assets and liabilities of the City. Theentitiesincludedintheconsolidatedfinancialstatements,havingthesameyearendastheCity,areas follows: 1. The City of Saint John General Operating Fund 2. The City of Saint John Capital and Loan Fund 3. The City of Saint John Water and Sewerage Utility Operating Fund 4. The City of Saint John Water and Sewerage Utility Capital and Loan Fund 5. Saint John Transit Commission 6. TD Station 7. Canada Games Aquatic Centre 8. Saint John Trade and Convention Centre 9. Saint John Energy 10. Lord Beaverbrook Rink 11. Saint John Police Commission 12. Saint John Free Public Library 9 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 2.Summary of Significant Accounting Policies (Continued) Investment in Energy Services TheCity'sinvestmentinSaintJohnEnergyisaccountedforonamodifiedequitybasis,consistentwith generallyacceptedaccountingprinciplesasrecommendedbyPSAS.Underthemodifiedequitybasisof accounting,thebusinessenterprise'saccountingprinciplesarenotadjustedtoconformwiththoseofthe Cityandinter-organizationaltransactionsandbalancesarenoteliminated.TheCityrecognizesitsequity interestintheannualincomeorlossofSaintJohnEnergyinitsconsolidatedstatementofoperationswith a corresponding increase or decrease in its investment asset account. Budget ThebudgetfigurescontainedinthesefinancialstatementswereapprovedbyCouncilonDecember13, 2021andtheMinisterofLocalGovernmentonJanuary6,2022.Thebudgetisunauditedanddoesnot include elimination of inter-organizational revenues and expenses with controlled entities. Revenue Unrestrictedrevenueandothersourcesofrevenuearerecordedonanaccrualbasisandisrecognized whencollectionisreasonablyassured.Restrictedcontributionsarerecognizedasrevenueintheyearin whichtherelatedexpensesareincurred.Otherrevenueisrecordedwhenitisearned.Propertytaxes, which are authorized by Council, are recognized as revenues in the period for which the taxes are levied. Government Transfers Governmenttransfersarerecognizedintheconsolidatedfinancialstatementsasrevenuesintheperiodin whicheventsgivingrisetothetransferoccur,providingthetransfersareauthorized,anyeligibilitycriteria havebeenmet,excepttotheextentthattransferstipulationsgiverisetoanobligationthatmeetsthe definitionofaliabilityandreasonableestimatesoftheamountscanbemade.Transfersarerecognizedas deferred revenue when amounts have been received but not all eligible criteria have been met. Expenses Expenses are recorded on an accrual basis. The cost of all goods consumed and services received during the year is expensed. Measurement Uncertainty ThepreparationoftheconsolidatedfinancialstatementsinaccordancewithCanadianPSASrequires managementtomakeestimatesandassumptionsthataffectthereportedamountsofassetsandliabilities anddisclosureofcontingentassetsandliabilitiesatthedateoftheconsolidatedfinancialstatementsand thereportedamountsofrevenuesandexpensesduringtheyear.Keycomponentsoftheconsolidated financialstatementsrequiringmanagementtomakeestimatesinclude:theusefullifeoftangiblecapital assets,impairmentoftangiblecapitalassets,ratesforamortization,allowancefordoubtfulaccountsin respectofreceivablesandestimatesforpensionliabilities.Estimatesarebasedonthebestinformation availableatthetimeofpreparationofthefinancialstatementsandarereviewedannuallytoreflectnew informationasitbecomesavailable.Measurementuncertaintyexistsinthesefinancialstatements.Actual results could materiality differ from those estimates. 10 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 2.Summary of Significant Accounting Policies (Continued) Cash and Cash Equivalents Cashandcashequivalentsincludecashonhand,balanceswithbanksandshort-termdepositswithoriginal maturitiesofthreemonthsorless.Restrictedcashisnotavailableforuseingeneraloperationsandisnot availableforwithdrawalasitislegallyrestrictedinaccordancewiththird-partyspecialpurpose agreements. Tangible Capital Assets Tangible capital assets are non-financial assets having a physical substance that: AreheldforusebytheCityintheproductionorsupplyofgoodsandservices,forrentalsto others,foradministrativepurposesorforthedevelopment,construction,maintenanceor repair of other tangible assets; Have useful lives extending beyond one year and are intended to be used on a continual Have a minimum value of $5,000 for individual assets; or $25,000 for pooled assets; and Are not intended for sale in the ordinary course of operations. Tangiblecapitalassetsarerecordedatcostwhichincludesallamountsthataredirectlyattributableto acquisition,construction,developmentorbettermentoftheasset.Assetsthatfallbelowthethreshold amountsareexpensedforaccountingpurposes.Thecostofthetangibleassetisamortizedonastraight line over the estimated useful life as follows: Asset TypeYears Furniture and office equipment5-15 Information technology equipment and 1-15 software N/A Land Land improvements5-100 term of lease Leasehold improvements Machinery and equipment3-25 10-70 Municipal buildings Transportation5-50 5-20 Motor vehicles and mobile equipment Water and wastewater networks5-100 Intheyearofacquisitionandtheyearofdisposal,onehalfoftheannualamortizationexpenseis recognized. Assets under construction are not amortized until the asset is available to productive use. Tangiblecapitalassetsarewrittendownwhenconditionsindicatethatthereisimpairmentinthevalueof theassetsandthereductioninthevaluecanbeobjectivelyestimatedanditisexpectedtobepermanent. The net write-downs are accounted for as expenses in the statement of operations. Donatedorcontributedassetsarerecordedatfairmarketvalueatthedateofconstructionordonation.In some circumstances, replacement cost may be used. 11 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 2.Summary of Significant Accounting Policies (Continued) Segmented Information TheCityprovidesawiderangeofservicestoitsresidents.Formanagementreportingpurposes, operationsandactivitiesareorganizedandreportedbyfunction.Thispresentationwascreatedforthe purposeofrecordingspecificactivitiestoattaincertainobjectivesinaccordancewithspecialregulations, restrictions or limitations. Municipal services are provided by service areas as follows: General Government Services Thissegmentisresponsiblefortheoverallgovernanceandfinancialadministrationofthe City.ThisincludesCouncilfunctions,generalandfinancialmanagement,legalmattersand compliance with legislation as well as civic relations. Protective Services Thissegmentisresponsiblefortheprovisionofpolicingservices,fireprotection,emergency measures, animal control and other protective measures. Transportation Services Thissegmentisresponsibleforcommonservices,roadandstreetmaintenance,street lighting, traffic services, parking and other transportation related functions. Water and Sewer Services Thissegmentisresponsiblefortheprovisionofwaterandsewerservicesincludingthe maintenanceandoperationoftheundergroundnetworks,treatmentplants,reservoirsand lagoons. Environmental Health Services This segment is responsible for the provision of waste collection and disposal. Environmental Development Services Thissegmentisresponsibleforplanningandzoning,communitydevelopment,tourismand other municipal development and promotion services. Recreation and Cultural Services Thissegmentisresponsibleforthemaintenanceandoperationofrecreationalandcultural facilities,includingtheswimmingpool,arenas,parksandplaygroundsandotherrecreational and cultural facilities. Energy Services Thissegmentcomprisesanon-generatingdistributionutilitythatsupplieselectricityto municipal,residential,generalserviceandindustrialcustomersthrough12interconnection supplypointsandsubstationslocatedintheCity.Italsoprovidesstreetlighting,area lighting and water heater rental services. 12 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 2.Summary of Significant Accounting Policies (Continued) Inventory Inventoryconsistsmainlyofpartsandmaterialsandisvaluedatthelowerofcostandnetreplacement cost with cost being determined on the first in, first out basis. Post Employment Benefits TheCityrecognizesitsobligationsunderpost-employmentbenefitplansandtherelatedcosts,asdisclosed in Note 14. Where appropriate, the City has undertaken actuarial valuations. 3.Bank Loan Payable TheCityhascreditfacilitieswiththeBankofNovaScotia.Accordingtothetermsandconditionsofthe commitmentlettersignedbetweentheCityandtheBankofNovaScotia,theCitycanborrowupto$6 milliontofundgeneraloperations.TheinterestrateforthecreditfacilitiesistheBank'sprimelendingrate less0.5%perannumwithinterestpayablemonthly.AsatDecember31,2022,thebalanceofthe operating line of credit was $nil (2021 - $nil). AsprescribedintheMunicipalitiesAct,borrowingtofinanceGeneralFundoperationsislimitedto4%of theCity'soperatingbudget.BorrowingtotemporarilyfinanceUtilityFundoperationsislimitedto50%of the operating budget for the year. In 2022, the City has complied with these limitations. 4.Cash and Cash Equivalents Cash and cash equivalents consists of the following: 20222021 $$ Unrestricted cash 82,382,279 70,854,206 Restricted cash Gas Tax 28,071,699 20,823,963 Funding to support public transit and housing 4,656,256 - Deposits on contracts 1,716,653 1,823,475 Land Sub-division Fund 229,107 238,206 Saint John Non-Profit Housing Future Development Fund 55,766 54,574 Airspace 2049 Fund 8,556 6,023 117,120,316 93,800,447 IncludedinthisamountarefundsinternallyrestrictedthrougharesolutionofCommonCounciltosupport reserves as included in note 20 for a total of $37,546,839 (2021 - $33,245,004). 13 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 5.Accounts Receivable Accounts receivable consist of the following: 20222021 $$ Water and sewer charges to ratepayers 8,703,463 11,164,317 Other receivables 12,252,992 7,825,977 Due from the Federal Government and its agencies 1,489,795 1,162,018 Due from the Province of New Brunswick 461,319 323,619 Allowance for doubtful accounts (2,351,857) (2,216,196) 20,555,712 18,259,735 6.Due from the Federal Government and its Agencies Amounts due from the Federal Government and its agencies consists of the following: 20222021 $$ Canada Revenue Agency HST receivable 1,489,795 1,052,954 Other - 109,064 1,489,795 1,162,018 7.Due from the Province of New Brunswick Amounts due from the Province of New Brunswick consists of the following: 20222021 $$ Regional Development Corporation 401,499 - Department of Transportation - 291,891 Other 59,820 31,728 461,319 323,619 8.Investment in Energy Services Change in equity Saint John Energy: 20222021 $$ Investment, beginning of year 60,798,000 36,716,000 Net gain 21,582,000 24,082,000 Investment, end of year 82,380,000 60,798,000 14 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 9.Note Receivable The note receivable from the Power Commission of the City of Saint John is as follows: 20222021 $$ Power Commission of the City of Saint John 20,000,000 22,500,000 Thenotereceivableisa10-yeartermloan,unsecured,bearinginterestatratesrangingfrom0.5%to1.8%, principal repayable in annual installments of $2,500,000 and maturing on November 26, 2030. 10.Other Investments Other investments consist of the following: 20222021 $$ Canada Games Foundation investments - 8,743,271 Other investments 899,331 839,320 899,331 9,582,591 InvestmentsoftheCityofSaintJohnareheldwiththeBankofNovaScotiawhichfallwithinthescopeof theCity’sInvestmentPolicy.ItisthepolicyoftheCitytoinvestfundstoprovidetheoptimalblendof investment returns and principal protection while meeting the City’s daily cash flow and liquidity demands. During2022,theDirectorsoftheSaintJohnCanadaGamesFoundationfiledbysupplementaryletters patentundertheNewBrunswickCompaniesActtochangetheirchartertoremoveanyandall requirementsthattheMayororanymemberofCommonCouncilbeappointedtotheBoardofDirectors. Commensurately,therecognitioncriteriafortheCanadaGamesFoundationinvestmentswerenolonger met and a charge to the Statement of Operations was recognized. 11.Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consist of the following: 20222021 $$ Trade payables 18,312,368 20,137,118 Payroll 6,985,085 6,822,104 Deposits 1,891,652 1,752,668 Conferences and holdings 1,272,978 993,733 Interest payable 438,768 495,158 Due to Pension Fund 390,236 362,449 Other 316,145 192,755 29,607,232 30,755,985 15 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 12.Deferred Government Transfers Deferred government transfers consist of the following: 20222021 $$ Canada Community-Building Fund 28,071,699 20,823,962 Funding to Support Public Transit and Housing 4,656,256 - 32,727,955 20,823,962 AspertheCanadaCommunityBuildingFundAgreement(formerlyGasTaxFunding),fundingreceivedas partofthisfundingprogramisrecordedasrevenueintheyearduringwhichrelatedexpendituresare incurred.TheCityalsorecievedfundingfromtheFederalandProvinicalGovernenttosupportpublic transitandhousing.Amountsthathavenotbeenspentarerecordedasdeferredgovernmenttransferson the Consolidated Statement of Financial Position. 13.Long-Term Debt 2022 Interest RateTermAnnual Payment20222021 Year of Issue%(Years)$$$ New Brunswick Municipal Finance Corporation Debentures 20082.100 to 5.55015 367,000 362,000 729,000 20082.100 to 5.55015 175,000 1,050,000 1,225,000 20082.100 to 5.55015 100,000 100,000 200,000 20112.0615 200,000 1,800,000 2,000,000 20121.350 to 3.55015 767,000 3,830,000 4,597,000 20121.350 to 3.80020 425,000 4,250,000 4,675,000 20121.350 to 3.55015 300,000 1,500,000 1,800,000 20131.350 to 3.70015 687,000 4,117,000 4,804,000 20131.350 to 4.00020 550,000 6,050,000 6,600,000 20131.350 to 4.00020 360,000 5,760,000 6,120,000 2014220 500,000 6,000,000 6,500,000 20141.150 to 3.90015 707,000 4,944,000 5,651,000 20141.200 to 3.70015 267,000 1,864,000 2,131,000 20141.200 to 3.70020 668,000 3,336,000 4,004,000 20141.150 to 3.90015 27,000 184,000 211,000 20150.950 to 3.25015 500,000 4,000,000 4,500,000 20151.050 to 3.65015 133,000 1,069,000 1,202,000 20150.950 to 3.50020 175,000 2,275,000 2,450,000 20151.050 to 3.15010 175,000 525,000 700,000 20151.050 to 3.65015 67,000 531,000 598,000 20161.200 to 3.55015 300,000 2,700,000 3,000,000 20161.450 to 3.50015 400,000 3,600,000 4,000,000 20161.450 to 3.75020 200,000 2,800,000 3,000,000 20161.200 to 2.95010 400,000 1,600,000 2,000,000 20161.200 to 3.55015 67,000 598,000 665,000 20171.200 to 3.30015 333,000 3,335,000 3,668,000 16 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 13.Long-Term Debt (Continued) 2022 Interest RateTermAnnual Payment20222021 Year of Issue%(Years)$$$ 20171.650 to 3.20015 513,000 1,335,000 1,848,000 20171.650 to 3.40030 1,500,000 37,500,000 39,000,000 20171.650 to 2.90010 350,000 1,750,000 2,100,000 20171.650 to 3.20015 101,000 665,000 766,000 20182.550 to 3.55015 700,000 7,700,000 8,400,000 20182.100 to 3.0005 566,000 566,000 1,132,000 20182.100 to 3.45010 125,000 750,000 875,000 20192.050 to 2.3005 1,034,000 2,068,000 3,102,000 20193.4110 143,000 999,000 1,142,000 20192.050 to 2.85010 75,000 525,000 600,000 20191.950 to 2.1005 334,000 668,000 1,002,000 20191.950 to 2.80015 1,059,000 7,053,000 8,112,000 20191.950 to 2.45010.00 250,000 1,750,000 2,000,000 20200.900 to 1.5005.00 1,000,000 3,000,000 4,000,000 20200.500 to 2.30015.00 467,000 6,066,000 6,533,000 20200.500 to 1.80010.00 2,500,000 20,000,000 22,500,000 20200.900 to 2.05010.00 250,000 2,000,000 2,250,000 20210.300 to 2.30010.00 2,466,000 14,864,000 17,330,000 20210.855 to 2.76215.00 700,000 6,800,000 7,500,000 20210.855 to 2.37810.00 350,000 3,150,000 3,500,000 20224.700 to 4.70910.00 - 7,250,000 - 23,333,000 194,639,000 210,722,000 Other Debentures Canada Mortgage and Housing Debentures 20093.9715 115,396 244,717 360,114 Total Debentures 23,448,396 194,883,717 211,082,114 Theaggregateamountofprincipalrepaymentsrequiredineachofthenextfiveyearsandthereafterto meetprovisionsoflong-termdebt,assumingmaturitydebtisrenewedattermscomparabletothose currently in effect, is as follows: $ 2023 24,391,977 2024 22,318,740 2025 19,792,000 2026 18,617,000 2027 16,446,000 Thereafter 93,318,000 194,883,717 17 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 14.Post Employment Benefits and Compensated Absences City of Saint John Shared Risk Plan TheCityofSaintJohnPensionPlan(FormerCSJPlan)wasconvertedtotheCityofSaintJohnSharedRisk Plan("CSJSRP")effectiveJanuary1,2013(theconversiondate).ThepurposeoftheCSJSRPistoprovide securebenefitstomembersoftheplanwithoutanabsoluteguaranteebutwithariskfocused managementapproachdeliveringahighdegreeofcertaintythatbasebenefitscanbemetinthevast majorityofpotentialfutureeconomicscenarios.Theseobjectivesareachievedthroughthedevelopment ofariskmanagementframeworkthatadherestothelegislatedcriteria,resultsinalowprobabilitythat basebenefitswillbereduced,andsetsoutthespecificstepstobetakenshouldthePlan'sfundedratiofall below,orexceed,specifiedthresholds.Thesesteps,whenthePlanisunderfunded,includethecessation ofindexationofbenefits,increasingcontributionrates(toapredeterminedmaximum),reducingcertain ancillarybenefits,andultimatelyreducingbasebenefits.WhenthePlanhasexcessfunding,previous benefitreductionscanbereversed,indexingisfullyimplemented,andvariousotherpotentialincreases can be implemented, including a decrease in contribution rates (to a predetermined maximum). SharedriskplansarelegislatedundertheprovincialPensionBenefitsAct(PBA)whichcontainsanumberof requirementsthatmustbemetinordertoqualifyforregistrationbytheOfficeoftheSuperintendentof Pensions.ThePlanisalsosubjecttotheIncomeTaxAct.ThePlanisadministeredbyaBoardofTrustees which includes 4 individuals nominated by the City and 4 individuals nominated by each of the four unions. TheassetsofthePlanareheldbyRBCInvestorandTreasuryServiceswhichactsascustodianofthePlan. TheassetsofthePlanaremanagedbyvariousinvestmentmanagerswhohavediscretionaryinvestment authoritywithintheinvestmentmandatesgiventothembythePlan'sBoardofTrustees.Theperformance of the Plan relative to its benchmarks is measured on a regular basis. Forservicepriortotheconversiondate,thePlanprovidesforpensionsattherateof2%peryearofservice timestheaverageofthethreeconsecutiveyearsofservicehavingthehighestsalaryatthetimeof conversion.Forserviceaftertheconversiondate,thepensionaccrualforeachyearofserviceis1.8% timesthesalary(excludingovertimepay)earnedduringtherelevantyeartoacertainmaximumsalaryof $155,499 that is indexed every year. Pensionbenefitsaccruedbeforetheconversiondatearepayablewithoutreductionwhenthemember’s ageandserviceequalatleast85(oratage65,ifearlier).Pensionbenefitsaccruedaftertheconversion datearepayablewithoutreductionatage60foremployeesintheInternationalAssociationofFire FightersandSaintJohnPoliceAssociationandatage65forallotheremployees.Pensionbenefitscanbe paid as early as age 55 with a reduction. Sharedriskplansextinguishallaccruedrightstoautomaticfutureindexing.Theseautomaticadjustments havebeenreplacedbyindexingaspermittedbythePlan'sfundingpolicy,whichiscontingentontheSRP performance. 18 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 14.Post Employment Benefits and Compensated Absences (Continued) City of Saint John Shared Risk Plan (Continued) Theinitialrequiredemployeecontributionsareequalto12%ofearningsforemployeesintheInternational AssociationofFireFightersandSaintJohnPoliceAssociationandemployeecontributionsof9%ofearnings forotheremployees.Membersinpublicsafetyoccupationswhoacceptanon-unionpositionwillhavea one-timeopportunitytoelecttocontinuetocontributeatthehigherrate.TheCitymakesinitialrequired employercontributionsof15.2%and11.4%ofearnings(representingabout126.7%ofemployee contributionrates)foreachofthesegroups.Theinitialcontributionratesforboththeemployeesandthe CityissubjecttochangeasaresultofthetriggeringmechanismandlimitationsimposedbythePlan’s fundingpolicy.Also,sinceApril1,2013,theCityisrequiredtomakecontributionsof17%ofearningsfora periodof15years,orwhenthePlanachievesaminimumfundedratioof150%(ascalculatedunderthe legislation)usinga15-yearopengroupmethod(nolessthan10yearsofpaymentmustbemade).TheCity hasnootherfinancialobligationotherthantomakecontributionsattheaboverates,andwithinthelimits found under the Plan’s funding policy. Intheeventofawind-upofthePlaninthefiveyearsfollowingtheconversiondate,thePlanwouldbe woundupundertheprovisionsoftheFormerCSJPlan.AllassumptionsrelatingtotheCSJSRPhavebeen made on the basis of an on-going Plan and the City does not foresee a wind-up of the Plan. Actuarial Valuations ActuarialvaluationsforthePlanareconductedannuallybytheBoardofTrusteesforregulatorypurposes. Inturn,theactuarialvaluationsforaccountingpurposesarebasedonthesefigures(withadjustments). ThemostrecentactuarialvaluationwaspreparedasatJanuary1,2022.Theactuarialvaluationsfor accountingpurposesarebasedonanumberofassumptionsaboutfutureevents,suchasinflationrates, interestrates,salaryincreases,employeeturnoverandmortality.Theaccruedbenefitobligationasat December31,2021andcurrentperiodbenefitcostforthefollowingyeararebasedonanactuarial valuationconductedasatDecember31,2021.TheaccruedbenefitobligationasatDecember31,2021 andcurrentperiodbenefitcostforthefollowingyeararebasedonanactuarialvaluationconductedasat December31,2021andextrapolatedtoDecember31,2022,usingassumptionseffectiveforDecember31, 2021.Theassumptionsusedreflectmanagement'sbestestimates.Thefollowingsummarizesthemajor assumptions in the accounting valuations and extrapolations at the various effective dates: 20222021 Discount rate 6.10%5.60% Inflation rate 2.10%2.10% Salary increase 2.85%2.85% MortalityCPM - 2014 mortality table with adjustments factors The Expected Average Remaining Service Life (EARSL) is 12 years. During the year, the City made pension contributions of $19,700,000 (2021 - $18,900,000). 19 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 14.Post Employment Benefits and Compensated Absences (Continued) City of Saint John Shared Risk Plan (Continued) ThefollowingtablereflectstheCity'sshareoftheaccruedbenefitliability,whichequalstothefullportion oftheAccumulatedBenefitObligation("ABO")relatedtothetemporarycontributionsand55.9%ofthe remainingportionoftheABOnetofPlanassetsbecausefundingcontributionsaresharedat55.9%bythe Cityand44.1%byemployees,beforetakingintoaccounttheadditionaltemporarycontributionof17%of earnings. 20222021 $$ City share of accrued benefit liability, beginning of year 16,800,000 78,300,000 City share of current period benefit cost 6,000,000 6,100,000 City share of past service cost 1,300,000 1,500,000 Interest cost 700,000 4,100,000 Less: City contributions (19,700,000) (18,900,000) Actuarial loss (gain) 20,500,000 (54,300,000) City share of accrued benefit liability, end of year 25,600,000 16,800,000 Unamortized actuarial gain 35,200,000 64,012,700 Pension liability, end of year 60,800,000 80,812,700 The following table reflects the City share of pension related expenses: 20222021 $$ Current period benefit cost 6,000,000 6,100,000 Past service cost 1,300,000 1,500,000 Interest cost 700,000 4,100,000 Amortization of City share of actuarial gain (6,100,000) (1,400,000) Total expense related to Pension 1,900,000 10,300,000 Other Employee Future Benefits TheCityprovidesforthepaymentofretirementallowancestoretiringemployeesinaccordancewiththe termsofthevariouscollectiveagreementsandMunicipalpolicy.Theretirementallowanceisbasedonthe member’sfinalannualsalaryandyearsofserviceatretirement.EmployeesuponretirementfromtheCity areentitledtoaretirementallowanceequaltoonemonth’spay,toamaximumofsixmonths,forevery fiveyearsofservice.Theprogramhasbeenamendedtoprovidecertainemployeeswithapayoutoption priortoretirement.Acceptingtheearlypayoutoptioneliminatesfurtheraccumulationofretirement allowance entitlement for those employees. TheCityalsoprovidesforemployeesickleave.Unusedsickleaveaccumulatestoamaximumnumberof hourswhichvariesbyemploymentagreement.Underthisprogram,employeesarenotentitledtoacash paymentinlieuofsickleavewhentheyleavetheCity’semploymentexceptasdescribedbelowwith respect to the retirement both outside workers (local 18) and firefighters (local 771). 20 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 14.Post Employment Benefits and Compensated Absences (Continued) Other Employee Future Benefits (Continued) Uponretirement,membersofLocal18and771willbeeligibletoreceive10%oftheirregularrateofpay for accumulated sick leave credits in excess of 1,760 hours or 2,280 hours respectively. ForemployeesoftheCityofSaintJohnFiredepartment,whoareunabletoworkduetoheartdiseaseor permanentinjurytothelungs,theCitypayscertainamountstodisabledfirefightersortheirsurvivor spouseasaresultoftheprovisionsofanActoftheLegislature,knownastheActrespectingtheSaintJohn Firefighter's Association. AsatJanuary1,2013,theCity’spensionplanwasconvertedtoasharedriskmodel.Aspartofthe conversion,theCityassumedtheobligationforpayingexistingdisabilitypensions,thathadbeengranted undertheoldplan,untildisabledmembersreachtheageof65.Onagoforwardbasis,disabilitycoverage isnowprovidedforemployeesthroughalongtermdisabilityprogramadministeredbyaninsurance carrier. FinallytherearespecificagreementsthatobligatetheCitytopaytopuppensionstocertainindividuals. During the year, the City made payments of $66,619 (2021 - $64,500) related thereto. Valuation Techniques and Assumptions Actuarialvaluationsoftheabovebenefitsarecompletedforaccountingpurposesusingtheprojected benefitmethodproratedonservices.Thelastactuarialvaluationofthepost-employmentbenefitplans wasconductedasatDecember31,2022.Previoustothat,anactuarialvaluationwasperformedasat December 31, 2021. Theabovebenefitplansareunfundedandassuch,therearenoapplicableassets.Benefitsarepaidoutof general revenue as they become due. Areconciliationoftheaccruedbenefitobligationfortheseplans,alongwiththemainassumptionsusedfor disclosure and expense calculations are as follows: 20222021 $$ Accrued benefit obligation, beginning of year 22,565,100 26,226,500 Current period benefit cost 1,144,500 1,333,700 Benefit payments (2,797,800) (2,313,200) Interest cost 565,100 548,300 Actuarial loss (3,086,800) (3,230,200) Other employee future benefits, end of year 18,390,100 22,565,100 20222021 $$ Main assumptions used for these plans: Discount rate 4.63%2.60% Salary increase 3.00%3.00% EARSL Range 1 to 25 2 to 24 21 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 14.Post Employment Benefits and Compensated Absences (Continued) Thesebenefitplansrequirenocontributionsfromemployees.ThebenefitliabilityasatDecember31, 2022 includes the following components: 20222021 $$ Accrued Benefit Obligation (Carrying Value) Retirement allowances 3,634,300 4,915,400 Sick leave 7,328,000 8,465,000 Heart and lung pension 2,957,100 3,868,100 Disability benefits 2,916,000 3,413,600 Contractual top up agreements 798,100 1,037,000 Sick leave - Saint John Transit Commission 756,600 866,000 18,390,100 22,565,100 Unamortized actuarial loss (460,200) (3,924,900) 17,929,900 18,640,200 TheunamortizedactuariallosseswillbeamortizedovertheEARSLoftherelatedemployeegroupsstarting in the next fiscal year. EARSL is determined separately for each benefit program. The total expense related to other employee benefits described above includes the following components: 20222021 $$ Current period benefit cost 1,144,500 1,333,700 Amortization of actuarial loss 377,900 603,300 1,522,400 1,937,000 Other employee benefit interest expense 565,100 548,300 Total expense related to other employee future benefits 2,087,500 2,485,300 15.Contingencies InaccordancewiththeRegionalServiceDeliveryActandtheGeneralRegulationthereunder,theCityis alsoliableforaproratashareofthedebenturesandotherlong-termdebtissuedonbehalfoftheFundy RegionSolidWasteCommission("Commission").TheportionattributabletotheCityisdeterminedonthe basisofitspercentageoftotalpopulationwithinallparticipatingmunicipalitiesandunincorporatedareas. ThetotalofsuchdebtoutstandingatDecember31,2022amountedto$1,465,000(2021–$680,000). Based on 2021 population figures, the City is liable for approximately 55% of the Commission’s debt. TheCityis,fromtimetotime,subjecttovariousinvestigations,claims,andlegalproceedingscovering mattersthatariseintheordinarycourseofitsbusinessactivities.Managementbelievesthatanyliability thatmayultimatelyresultfromtheresolutionofthesematterswillnothaveamaterialadverseeffecton theconsolidatedfinancialpositionoroperatingresultsoftheCity.LegalproceedingsfiledinDecember 2013remainoutstandingagainstthecityofSaintJohnwithrespecttotheallegedactivityofaformer employee/policeofficer.Thereliefsoughthasnotbeenquantifiedinthedocumentsfiledwiththecourt and therefore the city is not in a position to estimate the amount of potential liability if any, in this matter. 22 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 16.Commitments Fundy Regional Service Commission During2022,theFundyRegionalServiceCommissionrolewasexpandedbytheProvincialGovernment throughanamendmentofthe"RegionalServiceDeliveryAct".UndertheamendedprovisionsoftheAct, theRegionalServiceCommissionhastheauthoritytodeterminetheannualamountoftotalmunicipal contributionstobemadetowardseconomicdevelopment,tourismpromotion,communitydevelopment, regionaltransportation,recreationinfrastructurecostsharingandadditionalsocialfocus.Theoperationof fiveregionalfacilities:SaintJohnAquaticCentreCommission,TDStationCommission,SaintJohnTradeand ConventionCentre,ImperialTheatreandSaintJohnArtsCentrearenowundertheprovisionsofthe RegionalServiceDeliveryAct,theCity’scontributionisitsproratashareoftheRegionalFacilities Commission’soperatingbudgetandcapitalbudgetisbasedon50%ofthetaxbasesand50%ofpopulation basedontheparticipatingmunicipalitiesoftheTownofQuispamsis,theTownofRothesay,theTownof GrandBay-Westfield,TownofHampton,LocalServiceDistrictsofFundy-St.MartinsandFundyRural District and the City of Saint John. The City's contribution is 55.76% in 2022 (2021 - 66.74%). 17.Water and Sewer Fund Surplus TheMunicipalitiesActrequiresWaterandSewerFundsurplus/deficitamountstobeabsorbedintooneor moreoffourOperatingBudgetscommencingwiththesecondensuingyear;thebalanceofthe surplus/deficit at the end of the year consists of: 20222021 $$ 2022 Surplus 266,284 - 2021 Surplus 1,516,301 1,516,301 2020 Surplus 726,779 969,038 2019 Surplus 98,366 147,549 2018 Surplus 12,948 25,896 2017 Surplus - 133,009 2,620,678 2,791,793 18.Water Cost Transfer TheCity’swatercosttransferforfireprotectioniswithinthemaximumallowablebyRegulation81-195 undertheMunicipalitiesAct,basedupontheapplicablepercentageofwatersystemexpendituresforthe population. 19.Funds Held in Trust FundsadministeredbytheCityforthebenefitofexternalpartiesarenotincludedintheconsolidated financial statements. The amount administered as at December 31, 2022 was $492,218 (2021 - $483,595). 23 - 238,543136,212 3,457,5395,448,650 33,245,00433,245,00415,448,95219,281,24613,832,59619,412,40833,245,004 2021 Total - 362,275708,224 2,849,1415,508,7329,428,3725,126,5374,301,835 37,546,83937,546,83933,245,00437,546,839 2022 Total - 312,866343,542 (367,437) 4,330,532 4,619,503 2,073,852 2,545,651 19,066,18619,066,18616,520,53519,066,186 Reserve General Capital -- 367,437179,703 (854,719) 7,392,0517,392,0511,178,2001,725,3402,580,0598,246,7707,392,051 General Reserve Operating 24 - - - - 40,496 455,178495,674495,674 2,342,893 2,342,893 1,847,219 2,342,893 Reserve Operating Water & Sewer -- 49,409 144,483472,626 8,745,709 8,745,709 2,393,9632,587,8552,115,2296,630,4808,745,709 Water & Sewer Capital Reserve Statement of Reserves Assets CashAccumulated Surplus Revenue Transfers from Water and Sewerage Utility OperatingTransfer between Operating and CapitalTransfers from General Operating FundProceeds on Sale of AssetsInterestTotal RevenuesExpendituresAnnual Surplus (Deficit)Balance, beginning of year Balance, end of year 20. The City of Saint JohnNotes to the Consolidated Financial StatementsFor the year ended December 31, 2022 25 Statement of Reserves (Continued)Council Resolutions regarding transfers to and from reserves Common Council Meeting – December 12th, 2022 – Open Session Moved by Councillor Sullivan, seconded by Councillor Stewart:RESOLVED that as recommended by the Finance Committee in the report entitled M&C 2022-379: 2022 Reserves Common Council approve the transfer of funds to and from the following reserves: General Operating Reserves$1,178,200 from the General Operating Fund to General Operating Reserve$367,437 from the General Capital Reserve to General Operating Reserve$2,580,059 from the General Operating Reserve to General Operating Fund General Capital Reserves$4,643,398 from the General Operating Fund to General Capital Reserve$2,073,852 from the General Capital Reserve to General Capital Fund$367,437 from the General Captial 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 20. The City of Saint JohnNotes to the Consolidated Financial StatementsFor the year ended December 31, 2022 26 Tangible Capital Assets 21. 27 Tangible Capital Assets (Continued) 21. 28 Segment Disclosure 22. $ $ $ $ $ $ 29 $ Consolidated Schedule of Accumulated Surplus (Deficit) Reconciliation 23. $ $ $ $ $ 30 Statements using the modified equity method The above noted entities are included in the Consolidated Financial Statements. The results of Saint John Energy are included in the Consolidated Financial Controlled Entities Operations 24. The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 25.Reconciliation of Funding Deficit Upon Adoption of PSAS OnJanuary1,2017theCityadoptedtheuseofPSAS.Asaresult,certainliabilitiesrelatingtoemployment benefits had to be restated to reflect the adoption of the standards. Special Top-up Retirement AgreementsAllowancesHeart and Lung $$$ Liabilities at December 31, 2016 as calculated on adoption of PSAS 1,035,500 5,133,600 4,517,400 Amount of December 31, 2016 liabilities funded in current year (237,400) (1,499,300) (1,560,300) Balance to be funded in future years 798,100 3,634,300 2,957,100 31 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 26.Other Revenue and Expense Details 2022 Budget (Unaudited) (Note 2)20222021 $$$ REVENUE Other Revenue from Own Sources Transportation services 13,369,145 8,844,886 7,282,986 Environmental development services (317,731) 7,356,026 4,186,315 Protective services 3,059,219 3,316,823 3,454,295 General government services 2,932,793 1,695,329 900,461 Recreational and cultural services 1,169,885 1,198,633 1,432,341 20,213,311 22,411,697 17,256,398 Contributions from Others Recreational and cultural services - 615,563 15,985 Transportation services 250,000 - 253,762 Protective services - 27,843 53,087 Water and sewer services - 71,310 - Environmental development services - - 561,725 General government services - 85,142 534,945 250,000 799,858 1,419,504 Government Transfers for Capital Regional Development Corporation - 4,056,197 75,268 Infrastructure Canada - gas tax funding - 2,929,806 778,704 Federal/Provincial clean waste water funding - 163,661 Community Development - 580,639 - Department of Transportation - 1,041,865 Other - 1,517,765 96,270 Deep Energy Retrofit - 890,762 Bilateral Funding - 6,303,496 - Infrastructure Canada - DMAF - 2,662,605 2,080,892 - 19,983,136 3,194,795 32 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 26.Other Revenue and Expense Details (Continued) 2022 Budget (Unaudited) (Note 2)20222021 $$$ EXPENDITURES General Government Services Legislative Common Council 524,902 517,143 495,830 Mayor's office 219,350 194,451 171,829 744,252 711,594 667,659 City Manager City manager 1,019,922 700,966 515,119 Corporate communications 524,001 336,916 549,332 Corporate planning 312,720 193,344 212,796 1,856,643 1,231,226 1,277,247 Common Services Property assessment 1,468,310 1,491,679 1,392,394 City hall building 1,014,587 981,122 1,118,989 Public liability insurance 450,000 487,609 504,937 2,932,897 2,960,410 3,016,320 Other Amortization - 8,974,593 9,011,686 Other 5,800,000 2,241,955 1,725,274 Information systems and support 3,332,935 3,047,823 3,039,063 Debt charges 16,036,609 2,538,707 3,690,895 Post employment (gains) expenses 9,245,733 (10,903,437) 5,464,912 Finance 1,172,280 1,886,885 1,916,475 Human resources 1,853,166 1,827,258 1,702,230 Materials management 959,240 902,771 826,535 City solicitor 1,030,331 940,590 895,902 External Relations 154,167 148,897 - Insurance 121,797 133,977 276,537 Common clerk 607,207 566,885 587,065 Customer Service 896,456 887,484 682,539 Regional Services Commission 28,657 28,566 28,931 41,238,578 13,222,954 29,848,044 Total General Government Services 46,772,370 18,126,184 34,809,270 33 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 26.Other Revenue and Expense Details (Continued) 2022 Budget (Unaudited) (Note 2)20222021 $$$ Protective Services Police Protection Police operations 15,136,000 14,509,177 14,623,818 Criminal investigations 4,398,533 4,569,450 4,709,814 Administration 1,947,053 2,272,522 1,781,963 Support services 2,224,375 2,140,701 2,039,119 Stations and buildings 937,450 1,001,636 968,179 Automotive 1,023,518 640,979 593,046 Detention services 176,575 169,147 174,077 25,843,504 25,303,612 24,890,016 Fire Protection Fire operations 25,362,725 22,494,534 21,641,725 Fire prevention 850,077 891,119 829,984 Fire investigation 58,578 60,295 57,936 26,271,380 23,445,948 22,529,645 Other Protective Services Emergency dispatch centre 2,789,423 2,688,255 2,876,277 Inspection services 1,027,434 1,297,125 1,053,886 Enforcement services 429,822 391,605 407,204 Dangerous buildings 547,385 264,267 473,675 Emergency measures 341,536 285,220 274,184 Minimum standards 310,229 215,398 275,249 Animal control 91,244 95,370 92,887 5,537,073 5,237,240 5,453,362 Total Protective Services 57,651,957 53,986,800 52,873,023 Transportation Services Public Works Amortization - 11,978,559 11,974,663 Roads and sidewalks 16,511,693 12,575,639 9,735,805 Other drainage services 3,830,807 2,300,385 2,162,159 Street lighting 958,800 921,382 942,148 Municipal operations 346,667 293,143 322,984 21,647,967 28,069,108 25,137,759 34 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 26.Other Revenue and Expense Details (Continued) 2022 Budget (Unaudited) (Note 2)20222021 $$$ General Engineering Traffic engineering and systems 1,982,463 1,799,290 1,947,200 Transportation 1,191,095 1,022,026 861,397 3,173,558 2,821,316 2,808,597 Parking Administration Parking administration 2,450,999 2,122,923 390,456 2,450,999 2,122,923 390,456 External Controlled Entities Saint John Transit Commission 13,790,440 11,526,571 10,210,574 Saint John Parking Commission - - 2,006,555 13,790,440 11,526,571 12,217,129 Total Transportation Services 41,062,964 44,539,918 40,553,941 Water and Sewer Services Saint John Water & Wastewater Amortization - 17,150,242 17,081,493 Drinking water 15,672,695 13,711,007 13,305,790 Wastewater 10,935,105 9,453,379 9,156,044 Fiscal charges 18,639,725 3,634,776 3,818,467 Industrial water 2,696,050 2,351,288 1,915,549 Infrastructure management 717,900 559,542 523,802 Internal charges 935,000 175,514 229,642 Total Water and Sewer Services 49,596,475 47,035,748 46,030,787 Environmental Health Services Sanitary Services 3,674,381 3,656,997 3,571,322 Total Environmental Health Services 3,674,381 3,656,997 3,571,322 35 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 26.Other Revenue and Expense Details (Continued) 2022 Budget (Unaudited) (Note 2)20222021 $$$ Environmental Development Services Research and Planning Community planning 1,695,676 1,566,173 1,573,478 Succeed and stay 171,758 124,846 163,456 Plan SJ 102,884 68,059 22,011 1,970,318 1,759,078 1,758,945 Administration and Geographic Information Systems (GIS) Carpenter shop 325,622 431,967 461,108 GIS 426,585 409,785 357,923 752,207 841,752 819,031 Economic Development Market Square common area 2,250,000 2,181,101 1,996,902 Regional facilities 1,826,707 672,896 832,951 Growth reserve 350,000 84,350 - 4,426,707 2,938,347 2,829,853 Real Estate Management Property management 1,545,173 2,036,760 1,574,277 Real estate 176,940 151,271 159,713 1,722,113 2,188,031 1,733,990 Other Environmental Development Services City Market 1,075,756 1,041,073 1,004,488 Community development 2,494,995 3,246,937 2,644,345 3,570,751 4,288,010 3,648,833 External Controlled Entities Aquatic Centre Commission - 2,592,693 2,333,229 TD Station Commission 3,179,946 3,860,450 2,007,813 Develop Saint John 86,371 243,385 339,304 Trade and Convention Centre 655,713 393,279 323,225 3,922,030 7,089,807 5,003,571 Total Environmental Development Services 16,364,126 19,105,025 15,794,223 36 The City of Saint John Notes to the Consolidated Financial Statements For the year ended December 31, 2022 26.Other Revenue and Expense Details (Continued) 2022 Budget (Unaudited) (Note 2)20222021 $$$ Recreational and Cultural Services Cultural Grants Other cultural grants 2,295,998 1,358,685 1,153,228 2,295,998 1,358,685 1,153,228 Parks Parks general services 1,883,049 2,086,674 1,706,102 Rockwood Park 376,336 310,241 329,703 2,259,385 2,396,915 2,035,805 Community Services Recreation and parks 388,623 381,031 461,029 Parks and playgrounds 282,576 120,301 182,539 Pro Kids 235,526 137,646 7,858 906,725 638,978 651,426 Other Recreational and Cultural Services Sports and recreation 2,875,289 2,640,506 2,872,877 Amortization - 1,412,338 1,368,106 Community centres 564,327 499,530 499,060 Cultural affairs 126,289 122,207 110,919 3,565,905 4,674,581 4,850,962 Externally Controlled Entities Saint John Free Public Library - 569,371 901,622 Lord Beaverbrook Rink 417,500 412,027 467,150 Canada Games Foundation - - (938,448) 417,500 981,398 430,324 Total Recreational and Cultural Services 9,445,513 10,050,557 9,121,745 Loss on Investment Investment in Canada Games Foundation - 8,743,271 - - 8,743,271 - TOTAL EXPENDITURES 224,567,786 205,244,500 202,754,311 37 The City of Saint John General Fund FINANCIAL STATEMENTS Year ended December 31, 2022 The City of Saint John General Fund OPERATING FUND BALANCE SHEET As at December 31 20222021 $$ ASSETS Cash and short-term deposits 115,339,538 90,191,808 Accounts receivable 6,843,429 5,767,052 Investment 316,086 250,560 Due from associated entities Water and Sewerage Utility Operating Fund - 1,917,362 Saint John Transit - Trade & Convention Centre 235,498 274,684 Inventory of materials and supplies (lower of cost and replacement cost) 407,876 354,980 Deferred disability expense - - Prepaid expenses 481,004 911,067 Long-term receivable 217,743 217,743 123,841,174 99,885,256 LIABILITIES AND EQUITY Accounts payable and accrued liabilities 16,436,343 17,765,430 Other payables 11,913,199 14,671,109 Interest payable on long-term debt 253,471 307,189 Due to associated entities Water and Sewerage Utility Capital and Loan Fund 19,863,257 16,739,913 Water and Sewerage Utility Operating Fund 1,327,711 - General Capital and Loan Fund 57,904,226 38,342,909 Saint John Parking Commission - - Power Commission - - Harbour Station Commission 125,492 63,123 City of Saint John Pension Fund 390,236 362,449 Saint John Transit Commission 216,993 113,747 Aquatic Centre Commission 106,874 332,736 Trade & Convention Centre - - Deferred revenue 2,111,248 467,106 Computer Replacement fund Fleet replacement fund General operating reserve 7,392,052 8,246,770 118,041,102 97,412,481 DEFICIENCY 5,800,072 2,472,775 123,841,174 99,885,256 2 The City of Saint John General Fund OPERATING FUND STATEMENT OF REVENUE AND EXPENSES For the Year ended December 31 BudgetActualActual 202220222021 Unaudited Page$$$ REVENUES Property taxes 129,423,226 131,483,072 129,196,736 Unconditional grant Province of New Brunswick 17,837,497 16,647,118 17,335,948 Provincial financial assistance - - - Sale of goods and services8 3,215,135 3,304,400 3,472,166 Other revenue from own sources9 12,066,623 13,817,078 8,654,184 Conditional grants from other governments9 250,000 1,041,865 253,762 Miscellaneous revenue 1,929,377 2,249,476 9,362,833 Saint John Energy Rebates - - - TOTAL REVENUES 164,721,858 168,543,009 168,275,629 EXPENSES AND FISCAL SERVICES General government services10 15,407,046 14,381,489 15,272,488 Protective services11 57,651,957 57,543,660 56,464,020 Transportation services12 34,653,681 36,315,807 31,143,250 Environmental health services 3,674,381 4,030,549 4,127,031 Environmental development services13 12,528,467 13,972,371 12,273,250 Recreational and cultural services14 9,028,013 8,953,838 8,349,720 Fiscal services15 30,786,857 30,017,998 38,677,754 Second previous year's deficit (surplus) 991,456 991,456 214,971 TOTAL EXPENSES AND FISCAL SERVICES 164,721,858 166,207,168 166,522,484 DEFICIT FOR THE YEAR 2,335,841 1,753,145 3 The City of Saint John General Fund OPERATING FUND STATEMENT OF EQUITY (DEFICIENCY) For the Year ended December 31 20222021 $$ DEFICIENCY, BEGINNING OF YEAR 2,472,775 (1,206,724) Deficit for the year 2,335,841 1,753,145 Related party acquisition (Develop Saint John) 108,011 Related party acquisition (Parking Commission) 1,603,372 4,808,616 2,257,804 Deficit (Surplus) second previous year 991,456 214,971 DEFICIENCY, END OF YEAR 5,800,072 2,472,775 4 The City of Saint John General Fund CAPITAL AND LOAN FUND BALANCE SHEET For the Year ended December 31 20222021 $$ ASSETS Accounts receivable 3,087,620 1,462,525 Due from associated entities Water and Sewerage Operating Fund - - Water and Sewerage Capital and Loan Fund - - General Operating Fund 57,904,226 38,342,909 Saint John Parking Commission - - Saint John Transit Commission 832,020 327,022 Investment-Capital Fund - - 61,823,866 40,132,456 Investment in shares of wholly-owned company, Saint John Industrial Parks Ltd., at cost - - Land, buildings, plant and equipment and engineering structures 774,705,718 752,792,546 836,529,584 792,925,002 LIABILITIES AND EQUITY Accounts payable 8,258,628 2,982,193 Debenture debt 90,214,000 95,900,000 Other long-term debt Canada Mortgage and Housing Corporation 244,717 360,113 General Capital Reserve 8,854,940 7,963,003 Computer replacement fund 2,159,219 1,769,665 Fleet replacement reserve 8,052,022 6,771,765 Deferred contributions 28,071,700 20,823,963 145,855,226 136,570,702 EQUITY 690,674,358 656,354,300 836,529,584 792,925,002 5 The City of Saint John General Fund CAPITAL AND LOAN FUND STATEMENT OF EQUITY For the Year ended December 31 20222021 $$ EQUITY, BEGINNING OF YEAR 656,354,300 613,422,102 Debt repaid by General Operating Fund Debenture debt 12,936,000 12,811,000 Other debt 115,396 110,990 669,405,696 626,344,092 Contributions in aid of construction Provincial government 5,492,651 145,488 Federal government 8,346,744 1,874,520 Contributions from reserves 2,129,160 1,483,863 Other 63,240 22,149,533 685,437,491 651,997,496 Proceeds from land sales 40,012 220,676 Capital projects financed by the General Operating Fund 4,300,000 3,724,658 Fixed assets purchased by the General Operating Fund 896,855 411,470 EQUITY, END OF YEAR 690,674,358 656,354,300 6 The City of Saint John General Fund CAPITAL AND LOAN FUND STATEMENT OF EQUITY For the Year ended December 31 20222021 $$ SOURCE Bond issue 7,250,000 12,120,000 Contributions in aid of construction Federal Government 8,346,744 1,874,520 Provincial Government 5,492,651 145,488 Contributions from reserves 2,129,160 1,483,863 Other 63,240 22,149,533 Fixed assets purchased by the General Operating Fund 896,855 411,470 Capital projects financed by the General Operating Fund 4,300,000 3,724,658 Proceeds from land sales 40,012 220,676 Debt repayment 13,051,396 12,921,990 Increase in Capital Fund trade payables 5,276,435 1,188,150 Investment in SJ Industrial Parks - - Decrease in Investment - - Increase in deferred contribution 7,247,737 4,224,211 Increase in Capital Reserve 2,561,748 8,371,903 56,655,978 68,836,462 APPLICATION Capital expenditures 21,913,172 42,302,206 Increase in Investment - - Debt repayment 13,051,396 12,921,990 Increase in Capital Fund trade accounts receivable 1,625,095 1,462,525 Increase in amounts due from associated entities 20,066,315 12,149,741 56,655,978 68,836,462 7 The City of Saint John General Fund OPERATING FUND SCHEDULE OF REVENUE ITEMS (1 OF 2) For the Year ended December 31 BudgetActualActual 202220222021 Unaudited $$$ SALES OF GOODS AND SERVICES Protective services Point Lepreau 82,163 90,039 80,986 Training 79,817 165,928 95,742 Regional hazmat 109,770 109,241 129,950 Recreational and cultural 907,385 816,308 1,027,444 Administrative services Pension fund 120,000 110,884 119,044 Housing operations 63,000 63,000 63,000 Saint John Water 1,800,000 1,896,000 1,903,000 Saint John Transit Commission 53,000 53,000 53,000 3,215,135 3,304,400 3,472,166 8 The City of Saint John General Fund OPERATING FUND SCHEDULE OF REVENUE ITEMS (2 OF 2) For the Year ended December 31 BudgetActualActual 202220222021 Unaudited $$$ OTHER REVENUE FROM OWN SOURCES Licenses and permits Business and other 136,050 205,453 147,253 Building 1,054,000 1,174,640 1,221,552 Plumbing 74,000 85,625 112,511 Gas pipeline 24,754 24,754 24,754 1,288,804 1,490,472 1,506,070 Fines and parking Parking and traffic violations 531,000 822,881 822,317 Parking meters 932,000 764,512 993,685 Market Square Parking Garage 1,156,000 1,547,022 692,576 2,619,000 3,134,415 2,508,578 Rentals City Market 470,000 437,998 462,210 Land and buildings 648,039 374,596 319,901 1,118,039 812,594 782,111 Short-term interest 500,000 1,155,704 365,529 Police revenues 525,000 475,407 734,552 Emergency dispatch 1,213,800 1,214,073 1,078,662 Utility Cuts 816,000 938,673 680,357 Off Street Parking 1,166,395 1,712,857 - Transfer from reserves 2,367,056 2,343,622 614,804 Other revenues from own sources 452,529 539,261 383,521 7,040,780 8,379,597 3,857,425 12,066,623 13,817,078 8,654,184 CONDITIONAL GRANTS FROM OTHER GOVERNMENTS Provincial government and agencies Transportation services - highways 250,000 1,041,865 253,762 9 The City of Saint John General Fund OPERATING FUND SCHEDULE OF EXPENSE ITEMS (1 OF 6) For the Year ended December 31 BudgetActualActual 202220222021 Unaudited $$$ GENERAL GOVERNMENT SERVICES Legislative Mayor's Office 219,350 196,162 175,561 Common Council 524,902 523,165 506,677 General Administrative City Manager 1,019,922 702,263 517,504 Corporate Planning 312,720 194,868 215,389 Common Clerk 607,207 571,279 594,812 Regional Services Commission 28,657 28,566 28,931 City Solicitor 1,030,331 944,969 905,062 Corporate Services Finance 1,172,280 1,109,160 1,178,722 Human Resources 1,853,166 1,835,833 1,716,636 Supply Chain Management 676,258 730,637 611,905 Information systems and support 3,332,935 3,067,361 4,141,572 Corporate Communications 524,001 339,358 552,220 Insurance 121,797 135,507 279,775 Customer Service 896,456 893,054 831,402 External Relations 154,167 148,897 - Common services City Hall building 1,014,587 981,122 1,118,989 Other general government services Property assessment 1,468,310 1,491,679 1,392,394 Public liability insurance 450,000 487,609 504,937 15,407,046 14,381,489 15,272,488 10 The City of Saint John General Fund OPERATING FUND SCHEDULE OF EXPENSE ITEMS (2 OF 6) For the Year ended December 31 BudgetActualActual 202220222021 Unaudited $$$ PROTECTIVE SERVICES Police protection 25,843,504 25,935,081 25,444,842 Fire protection Fire operations 23,771,380 24,000,463 23,068,133 Water supply 2,500,000 2,335,319 2,467,242 Emergency Measures Organization Emergency Measures Organization 341,536 288,760 277,971 Emergency Dispatch Centre 2,789,423 2,708,017 2,888,803 Other protection Inspection services 1,027,434 1,303,279 1,061,024 Minimum standards 310,229 217,892 277,904 Enforcement services 429,822 394,024 410,329 Animal control 91,244 95,370 92,887 Dangerous buildings 547,385 265,455 474,885 57,651,957 57,543,660 56,464,020 11 The City of Saint John General Fund OPERATING FUND SCHEDULE OF EXPENSE ITEMS (3 OF 6) For the Year ended December 31 BudgetActualActual 202220222021 Unaudited $$$ TRANSPORTATION SERVICES Common Services Development Engineering 346,667 294,539 348,682 Engineering 1,191,095 1,107,143 944,071 Road Transport Roads and sidewalks 16,511,693 18,628,169 15,195,181 Street lighting 958,800 921,382 942,148 Traffic services 2,265,445 2,247,927 2,406,813 Parking 2,450,999 2,283,300 881,936 Storm sewer 3,830,807 3,502,144 3,343,308 Public transit Transit operating subsidy 5,273,690 5,510,719 5,158,224 Transit debt charges 1,824,485 1,820,484 1,922,887 34,653,681 36,315,807 31,143,250 12 The City of Saint John General Fund OPERATING FUND SCHEDULE OF EXPENSE ITEMS (4 OF 6) For the Year ended December 31 BudgetActualActual 202220222021 Unaudited $$$ ENVIRONMENTAL DEVELOPMENT SERVICES Research and planning 1,798,560 1,754,621 1,607,119 GIS 426,585 413,805 360,800 Carpenter's shop 325,622 453,378 482,242 Real estate management 1,722,113 2,213,074 1,772,292 Growth reserve fund 350,000 350,000 - Heritage Development Board 195,842 161,047 191,317 Greater Saint John Economic Developent 2,175,000 2,979,403 2,373,199 Saint John Industrial Parks 86,371 243,385 178,926 Market Square common area 2,250,000 2,167,157 1,982,958 Regional Facilities Commission 1,826,707 1,960,332 2,071,185 Succeed and Stay 171,758 124,846 163,686 Local Immigration Partnership 124,153 108,021 83,314 City Market 1,075,756 1,043,302 1,006,212 12,528,467 13,972,371 12,273,250 13 The City of Saint John General Fund OPERATING FUND SCHEDULE OF EXPENSE ITEMS (5 OF 6) For the Year ended December 31 BudgetActualActual 202220222021 Unaudited $$$ RECREATIONAL AND CULTURAL SERVICES Recreational Pro Kids 235,526 137,646 7,858 Other facilities 396,901 358,359 334,771 Community development 388,623 381,112 461,029 Recreational programming 564,327 504,609 503,005 Sports and recreation 2,644,862 2,564,636 2,813,505 Parks 2,541,961 2,588,940 2,316,632 Cultural Free Public Library 473,001 473,001 472,892 Cultural affairs 126,289 122,801 111,410 Grants 1,656,523 1,822,734 1,328,618 9,028,013 8,953,838 8,349,720 14 The City of Saint John General Fund OPERATING FUND SCHEDULE OF EXPENSE ITEMS (6 OF 6) For the Year ended December 31 BudgetActualActual 202220222021 Unaudited $$$ FISCAL SERVICES Interest on long-term debt Debenture debt 2,430,432 2,282,533 2,442,277 Other long-term debt 14,296 15,095 17,144 Principal installments Debenture debt 12,936,000 12,936,000 12,811,000 Other long-term debt 115,396 115,396 110,990 Other Reserves 1,200,000 2,316,607 7,867,448 Other debt charges 100,000 56,076 138,131 Short-term financing 145,000 185,053 203,275 Funding of pension fund 9,245,733 9,322,817 9,536,912 Restructuring costs - - 18,027 Landfill Closure 300,000 300,000 300,000 Other miscellaneous - 655,075 697,103 Actuarial Gain/Loss - (2,466,654) - Long-term disability - - 900,000 Capital projects financed by the General Operating Fund 4,300,000 4,300,000 3,635,447 30,786,857 30,017,998 38,677,754 15 The City of Saint John Water and Sewerage Utility FINANCIAL STATEMENTS Year ended December 31, 2022 The City of Saint John Water and Sewerage Utility OPERATING FUND BALANCE SHEET As at December 31 20222021 $$ ASSETS Accounts receivable 6,493,069 9,864,178 Prepaid expenses - 2,207 Long-term receivable 32,304 32,304 6,525,373 9,898,689 LIABILITIES AND EQUITY Accounts payable and accrued liabilities 1,985,902 2,226,030 Other payables 719,829 929,593 Due to associated entities General Operating Fund- 1,327,712 1,917,361 Operating reserves 2,342,893 1,847,456 Interest payable on long-term debt 185,297 187,969 3,906,209 7,108,409 EQUITY (DEFICIENCY) 2,619,164 2,790,280 6,525,373 9,898,689 2 The City of Saint John Water and Sewerage Utility OPERATING FUND STATEMENT OF REVENUE AND EXPENSES For the Year ended December 31 REVENUES Flat Rate Accounts 22,127,968 22,209,481 Meter Rate Accounts 15,418,145 15,220,500 Industrial Raw Water Accounts 6,585,203 6,402,776 Fire Protection Levy 2,335,319 2,467,242 Storm Sewer Levy 884,401 811,410 Other Revenues 1,340,925 1,098,839 Previous Year's Surplus 437,400 375,000 Total Revenues 49,129,361 48,585,248 EXPENDITURES Drinking Water Service Watershed Management 1,034,225 346,186 Water Treatment 8,146,227 7,683,732 Water Pumping & Storage 1,088,126 1,024,216 Transmission & Distribution 4,579,646 4,822,398 Customer Metering 686,993 657,084 Internal Charges 572,591 451,338 Other Charges 607,205 581,035 Debt Servicing 3,792,126 3,911,896 Transfer to Operating/Capital Reserve 880,522 1,603,406 Capital from Operating 1,057,400 2,836,000 Total Drinking Water Service 22,445,061 23,917,291 Wastewater Service Wasterwater Pumping 2,941,414 2,719,871 Wastewater Collection 3,123,551 2,761,956 Wastewater Treatment 4,942,446 5,080,230 Internal Charges 421,428 451,338 Other Charges 607,205 581,155 Debt Servicing 3,066,784 3,235,696 Capital from Operating 4,112,800 1,965,000 Total Wastewater Services 19,215,628 16,795,246 Infrastructure Management Engineering Services 683,669 648,891 Total Infrastructure Management 683,669 648,891 Industrial Water Service Watershed Management 444,473 466,147 Water Pumping & Transmission 2,111,745 1,661,374 Customer Metering 81,055 94,128 Debt Servicing 1,892,065 1,953,000 Transfer to Capital Reserves 1,041,493 842,744 Transfer to Operating Reserve 480,010 422,131 Capital from Operating 467,878 268,000 Total Industrial Water Service 6,518,719 5,707,524 Total Expenditures 48,863,077 47,068,952 Surplus (Deficit) 266,284 1,516,296 3 The City of Saint John Water and Sewerage Utility OPERATING FUND STATEMENT OF (DEFICIENCY) EQUITY For the Year ended December 31 20222021 $$ EQUITY, BEGINNING OF YEAR 2,790,280 1,648,984 Surplus for the year 266,284 1,516,296 3,056,564 3,165,280 Surplus second previous year (437,400) (375,000) EQUITY, END OF YEAR 2,619,164 2,790,280 4 The City of Saint John Water and Sewerage Utility CAPITAL AND LOAN FUND BALANCE SHEET For the Year ended December 31 20222021 $$ ASSETS Accounts receivable 2,423,659 21,983 Due from associated entities General Operating Fund 19,863,257 16,739,913 Fixed Assets 674,580,247 667,687,067 696,867,163 684,448,963 LIABILITIES AND EQUITY Accounts payable and accrued liabilities 1,490,452 2,308,193 Debenture debt 75,611,001 81,979,001 Capital replacement reserve 3,381,111 2,575,000 Infrastructure reserve 3,040,875 1,992,161 Fleet reserve 2,323,722 2,063,320 85,847,161 90,917,675 EQUITY 611,020,002 593,531,288 696,867,163 684,448,963 5 The City of Saint John Water and Sewerage Utility CAPITAL AND LOAN FUND STATEMENT OF EQUITY For the Year ended December 31 20222021 $$ EQUITY, BEGINNING OF YEAR 593,531,288 580,448,986 Debt repaid by General Operating Fund Debenture debt 6,368,000 6,368,000 599,899,288 586,816,986 Contributions in aid of construction Provincial government 2,106,378 26,050 Federal government 2,995,537 1,148,738 605,001,203 587,991,774 Proceeds from land sales Capital projects financed by the Utility Operating Fund 6,010,099 5,378,730 Fixed assets purchased by the Utility Operating Fund 8,700 160,784 EQUITY, END OF YEAR 611,020,002 593,531,288 6 The City of Saint John Water and Sewerage Utility CAPITAL AND LOAN FUND STATEMENT OF EQUITY For the Year ended December 31 20222021 $$ SOURCE Contributions in aid of construction Federal Government 2,995,537 1,148,738 Provincial Government 2,106,378 26,050 Fixed assets purchased by the General Utility Fund 8,700 160,784 Capital projects financed by the Utility Operating Fund 6,010,099 5,378,730 Proceeds from land sales Debt repayment 6,368,000 6,368,000 Increase in due from associated entities (3,123,344) 24,326,019 Decrease in Capital Fund trade receivables (2,401,676) 66,220 Increase (decrease) in Capital Reserve 2,115,227 3,773,477 14,078,921 41,248,018 APPLICATION Debt repayment 6,368,000 6,368,000 Capital expenditures 6,893,180 7,976,236 Increase in accounts payable and accrued liabilities 817,741 26,903,782 14,078,921 41,248,018 7 Deloitte LLP P.O. Box 20094 Brunswick Square Saint John NB E2L 5B2 Canada Tel: 506-632-1080 Fax: 506-632-1210 www.deloitte.ca Independent Auditor’s Report To Her Worship the Mayor and Members of Common Council of The City of Saint John Report on the Auditof theFinancial Statements Opinion We have audited the financial statements of The City of Saint JohnWe have audited the financial statements of The City of Saint JohnWe have audited the financial statements of The City of Saint JohnTrust FundsTrust FundsTrust Funds(the “(the “(the “City”), which comprise the statement of financial positionas at December 31, 20December 31, 20December 31, 20222222, and the statements of , and the statements of , and the statements of operations, and accumulated surplus, change in net debt and cash flowand accumulated surplus, change in net debt and cash flowand accumulated surplus, change in net debt and cash flowfor the year then ended, and notesfor the year then ended, and notesfor the year then ended, and notesto the financial statements, including a summary of significant accounting policies (collectively referred to as the financial statements, including a summary of significant accounting policies (collectively referred to as the financial statements, including a summary of significant accounting policies (collectively referred to as the “financial statements”). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial In our opinion, the accompanying financial statements present fairly, in all material respects, the financial In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Cityas at December 31, 20December 31, 20December 31, 20222222, and , and , and thethetheresults of results of results of its its its operations, itsaccumulated surplus, changes initsnet debt,and its cash flows for the year then ended in accordance with and its cash flows for the year then ended in accordance with and its cash flows for the year then ended in accordance with Canadian public sector accounting standards (“accounting standards (“accounting standards (“PSASPSASPSAS”)”)”). . . BasisforOpinion We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our responsibilities under those standards are further described in the GAAS”). Our responsibilities under those standards are further described in the GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements for the Audit of the Financial Statements for the Audit of the Financial Statements sectionsectionsectionof our report. We are independent of the CItyin accordance with the ethical requirements that are relevant to our audit of the financial statements in accordance with the ethical requirements that are relevant to our audit of the financial statements in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. ResponsibilitiesofManagementandThoseChargedwithGovernancefortheFinancial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with PSAS, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the City’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Cityor to cease operations, or has no realistic alternative but to do so. 1 Those charged with governance are responsible for overseeing theCity’sfinancial reporting process. Auditor’sResponsibilitiesfortheAuditoftheFinancialStatements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatementscan arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detectingevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detectingevidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from era material misstatement resulting from fraud is higher than for one resulting from era material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internalinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internalinvolve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit proceduresObtain an understanding of internal control relevant to the audit in order to design audit proceduresObtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on thethat are appropriate in the circumstances, but not for the purpose of expressing an opinion on thethat are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accountingEvaluate the appropriateness of accounting policies used and the reasonableness of accountingEvaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by maestimates and related disclosures made by maestimates and related disclosures made by management.nagement.nagement. Conclude on the appropriateness of management’s use of the going concern basis of accounting and,Conclude on the appropriateness of management’s use of the going concern basis of accounting and,Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events orbased on the audit evidence obtained, whether a material uncertainty exists related to events orbased on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the conditions that may cast significant doubt on the conditions that may cast significant doubt on the CCCityityity’s ability to continue as a going concern. If we’s ability to continue as a going concern. If we’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s reportconclude that a material uncertainty exists, we are required to draw attention in our auditor’s reportconclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modto the related disclosures in the financial statements or, if such disclosures are inadequate, to modto the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’sour opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’sour opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the report. However, future events or conditions may cause the report. However, future events or conditions may cause the Cityto cease to continue as a going concern. Evaluate the overall presentation, structure Evaluate the overall presentation, structure Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governanceregarding, among other matters, theplanned scope and timing of the audit andsignificant audit findings, including anysignificant deficiencies in internal control that we identifyduring our audit. Report on Other Legal and Regulatory Requirements As requiredby the Government of New Brunswick, we report that, in our opinion, the accounting principles in Canadian public sector accountingstandardshave been applied on a consistent basis. Chartered Professional Accountants Saint John, NB ttttttt fffffff aaaaaaa rrrrrrr DDDDDDD ttttttttt fffffffff aaaaaaaaa rrrrrrrrr DDDDDDDDD Statement of revenue and Statement of revenue and Statement of revenue and expenses ofexpenses ofexpenses of The City of Saint John The City of Saint John The City of Saint John Trade and Convention Centrerade and Convention Centrerade and Convention Centre December 31, 20December 31, 20December 31, 2022 22 22 Independent Auditor’s Report1–2 Statement of revenue and expensesStatement of revenue and expensesStatement of revenue and expenses3 Notesto the financial statementstatementstatement4–5 Deloitte LLP th 44 Chipman Hill, 7Floor Saint John, NB E2L 2A9 Tel: 506-389-8073 Fax: 506-632-1210 www.deloitte.ca IndependentAuditor’sReport To the Mayor and Common Counselof The City of Saint John Opinion We have audited the accompanying statement of revenue and expenses of The City of Saint John Trade and Convention Centre (the “Centre”), for the year ended December 31, 20and Convention Centre (the “Centre”), for the year ended December 31, 20and Convention Centre (the “Centre”), for the year ended December 31, 2022, and other explanatory information (the “financial statement”). This financial statement was prepared by management in statement”). This financial statement was prepared by management in statement”). This financial statement was prepared by management in accordance with the provisions of the management agreement between The City of Saint Johnaccordance with the provisions of the management agreement between The City of Saint Johnaccordance with the provisions of the management agreement between The City of Saint John (the “City”) and Hilton Canada Co. dated June 1, 1984 with an amendment dated September 4, 2014.(the “City”) and Hilton Canada Co. dated June 1, 1984 with an amendment dated September 4, 2014.(the “City”) and Hilton Canada Co. dated June 1, 1984 with an amendment dated September 4, 2014. In our opinion, the accompanying financial statement of the Cn our opinion, the accompanying financial statement of the Cn our opinion, the accompanying financial statement of the Centre entre entre for the year endedfor the year endedfor the year ended December 31, 2022 are prepared, in all material respects, in accordance with the provisions of the are prepared, in all material respects, in accordance with the provisions of the are prepared, in all material respects, in accordance with the provisions of the management agreement between the City and Hilton Canada Co. dated June 1, 1984 with an amendment management agreement between the City and Hilton Canada Co. dated June 1, 1984 with an amendment management agreement between the City and Hilton Canada Co. dated June 1, 1984 with an amendment dated September 4, 2014. Basis for Opinion We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian We conducted our audit in accordance with Canadian generally accepted auditing standards (“Canadian GAAS”). Our responsibilities under those standards are further described in the GAAS”). Our responsibilities under those standards are further described in the GAAS”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statementsfor the Audit of the Financial Statementsfor the Audit of the Financial Statements section of our report. We are independent of the section of our report. We are independent of the section of our report. We are independent of the Centre in accordance with the ethical requirements that are relevant to our audit of the financial statements in accordance with the ethical requirements that are relevant to our audit of the financial statements in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Emphasis of Matter – Basis of AccountingBasis of AccountingBasis of Accounting We draw attention to Note 1 to the financial statements, which describes the basis of accounting. Thefinancial statements are prepared to assist the Centrein complying with the provisions of the management agreement between The City of Saint John (the “City”) and Hilton Canada Co. dated June 1, 1984 with an amendment dated September 4, 2014. As a result, the financial statements may not be suitable for another purpose. Our opinion is not modified in respect of this matter. Responsibilities of Management and Those Charged with Governance for the Financial Statements Management is responsible for the preparation of the financial statement in accordance with the provisions of the management agreement between the City and Hilton Canada Co. dated June 1, 1984 with an amendment dated September 4, 2014, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Centre’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Centreor to cease operations, or has no realistic alternative but to do so. Those charged with governance are responsible for overseeing the Centre’s financial reporting process. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian GAAS will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain As part of an audit in accordance with Canadian GAAS, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to Identify and assess the risks of material misstatement of the financial statements, whether due to Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit fraud or error, design and perform audit procedures responsive to those risks, and obtain audit fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not nt and appropriate to provide a basis for our opinion. The risk of not nt and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as detecting a material misstatement resulting from fraud is higher than for one resulting from error, as detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, ofraud may involve collusion, forgery, intentional omissions, misrepresentations, ofraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures Obtain an understanding of internal control relevant to the audit in order to design audit procedures Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Centre’s internal control. ’s internal control. ’s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting Evaluate the appropriateness of accounting policies used and the reasonableness of accounting Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.estimates and related disclosures made by management.estimates and related disclosures made by management. Conclude on the appropriateness of management’s use of the going concern basisConclude on the appropriateness of management’s use of the going concern basisConclude on the appropriateness of management’s use of the going concern basisof accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events and, based on the audit evidence obtained, whether a material uncertainty exists related to events and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the or conditions that may cast significant doubt on the or conditions that may cast significant doubt on the Centre’s ability to continue as a going concern. If we conclude that a material uncertainwe conclude that a material uncertainwe conclude that a material uncertainty exists, we are required to draw attention in our auditor’s ty exists, we are required to draw attention in our auditor’s ty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to report to the related disclosures in the financial statements or, if such disclosures are inadequate, to report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the damodify our opinion. Our conclusions are based on the audit evidence obtained up to the damodify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Centreto cease to continue as a going concern. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Chartered Professional Accountants \[DATE\] The City of Saint John Trade and Convention Centre Statement of revenue and expenses Year ended December 31, 2022 20222022 2021 BudgetActual Actual Notes $$$ (Unaudited) 1 Revenue Room rental 197,350 211,580 74,475 Commissions on food and beverage sales and sundry revenue 265,500 195,068 47,993 462,850 406,648 122,468 Direct expenses Wages and benefits 69,07369,073 63,771 69,120 Laundry 16,80016,800 12,804 4,766 Supplies 20,00020,000 3,122 714 105,873105,873 79,69679,696 74,600 356,978356,978 326,952326,952 47,868 Overhead expenses tttttt Salaries and benefits 405,964405,964 249,861 94,121 Cleaning and maintenance 35,79235,792 19,669 10,661 ffffff Advertising and promotion 25,94425,944 13,944 13,944 Miscellaneous expense 7,2007,200 12,133 75,198 Garbage removal 10,66110,661 10,350 10,350 Legal and audit 9,0009,000 8,625 8,450 aaaaaa Equipment rental 3,060 3,168 3,060 Gas 4,994 2,770 1,338 Telecommunication 4,200 2,617 2,160 rrrrrr Water heating chargesWater heating chargesWater heating charges 8,000 1,756 5,084 Postage, printing and stationeryPostage, printing and stationeryPostage, printing and stationery 8,600 1,625 1,000 Licenses 1,365 1,065 1,273 Entertainment 3,000 8 — Outside services 13,560 (1,055) 35,782 Travel and training 8,500 — 148 DDDDDD 549,839 326,536 262,569 Operating surplus (deficit) for the year (192,862) 416 (214,701) Expenses not paid directly by the Centre Management fee 198,940 211,689 201,373 HVAC utility/maintenance 134,714 107,459 137,551 Real estate tax 83,028 80,269 75,746 Electricity 32,604 17,617 32,604 449,286 417,034 447,274 Total expenses 1,104,998 823,266 784,443 Total deficit for the year (642,148) (416,618) (661,975) The accompanying notes are an integral part of the financial statements. Page 3 The City of Saint John Trade and Convention Centre Notes to the financial statement December 31, 2022 1.Revenue Under the terms of the management agreement dated June 1, 1984, with amendment dated September 4, 2014, Hilton Canada Co. pays to theSaint John Trade and ConventionCentre (“Centre”) a percentage of gross revenue forfood and beverage with cost of sales, including product and labour costs, being the responsibility of Hilton Canada Co. The Centre is responsible for all other operating costs. 2.Government assistance In response to the COVID-19 pandemic, the federal and provincial governments have been implementing programs to help companies that are experiencing financial difficulty. During the eriencing financial difficulty. During the eriencing financial difficulty. During the year the Company recognized $24,207 ($111,507 in 20in 20in 20212121) in wage subsidy, which was netted ) in wage subsidy, which was netted ) in wage subsidy, which was netted against salaries and benefits. 3.Management agreement – Saint John Trade and Convention CentreSaint John Trade and Convention CentreSaint John Trade and Convention Centre This financialstatementhas been prepared in accordance with the provisions of the en prepared in accordance with the provisions of the en prepared in accordance with the provisions of the management agreement between the City of Saint John (the “City”) and Hilton Canada Co.management agreement between the City of Saint John (the “City”) and Hilton Canada Co.management agreement between the City of Saint John (the “City”) and Hilton Canada Co. The Centre is ownedby the City and managed by Hilton Canada Co. under an amended by the City and managed by Hilton Canada Co. under an amended by the City and managed by Hilton Canada Co. under an amended management agreement dated September 4, 2014. The original agreement dated June 1, 1984 agreement dated September 4, 2014. The original agreement dated June 1, 1984 agreement dated September 4, 2014. The original agreement dated June 1, 1984 had a 20 year term with options to renew for three consecutive 10 year periods. One 10 year had a 20 year term with options to renew for three consecutive 10 year periods. One 10 year had a 20 year term with options to renew for three consecutive 10 year periods. One 10 year renewal period remains. According to the terms of this agreement, the City is responsible for . According to the terms of this agreement, the City is responsible for . According to the terms of this agreement, the City is responsible for the operating loss of the Centre. In addition to the operating loss under this agreement, the City operating loss of the Centre. In addition to the operating loss under this agreement, the City operating loss of the Centre. In addition to the operating loss under this agreement, the City incurs common area costs and management fees which are reflected in the general operating incurs common area costs and management fees which are reflected in the general operating incurs common area costs and management fees which are reflected in the general operating fund of the City’s consolidated financial statementsfund of the City’s consolidated financial statementsfund of the City’s consolidated financial statements. With the establishment of the Greater Saint John Regional Facilities Commission in 1998, With the establishment of the Greater Saint John Regional Facilities Commission in 1998, With the establishment of the Greater Saint John Regional Facilities Commission in 1998, operating deficits, management fees and property taxes included in common area costs are operating deficits, management fees and property taxes included in common area costs are operating deficits, management fees and property taxes included in common area costs are shared with the municipalities making up the Greater Saint John Regional Facilities Commission.shared with the municipalities making up the Greater Saint John Regional Facilities Commission.shared with the municipalities making up the Greater Saint John Regional Facilities Commission. These costs are allocated in proportion to the tax bases of the municipalities.These costs are allocated in proportion to the tax bases of the municipalities.These costs are allocated in proportion to the tax bases of the municipalities. 4.Recording of assets and liabilitiesRecording of assets and liabilitiesRecording of assets and liabilities The City’s investment in the structure and related equipment, furnishings and fixtures is reported on the Capital and Loan Fund balance sheet of the City. 5.Greater Saint John Regional Facilities Commission Act Under the regional Greater Saint John Regional Facilities Commission Act, pursuant to 87(2)(a) of the Municipalities Act, councils of the participating communities of Grand Bay Westfield, Quispamsis, Rothesay and Saint John are required to pay contributions towards the operation of regional facilities, which include the Centre. The amount of contribution is calculated on the net operating cost for each facility covered under the Municipalities Act, in proportion to the tax base of the contributing municipality. Page 4 The City of Saint John Trade and Convention Centre Notes to the financial statement December 31, 2022 6. Budget figures The 2022 budget figures that are presented on the Statement of revenue and expenses for comparison with the actual figures were provided by the Centre’smanagement and have not been audited. Page 5 l a i c n a Ќ n i Ћ Љ F Ћ Ͳ d ŷ Ʒ e Б t Ћ s a Ļ t Ɠ d n ǒ i W l e o Ļ s m Ļ Ʒ n e Ʒ ź t o ƒ a C t ƒ S ƚ d / e Ļ t ĭ i Ɠ d ğ Ɠ u ź C A 2 2 0 2 millions millions millions Millions Millions E T A S R E O C I P V R R O E CS S E G R A C H I C G E R T E A H R T T SO E R U T C U R T S A R F N I N O I T A T R O P S N D A N R AT The City of Saint John 2024 Draft General Fund Operating Budget 20232024 BudgetBudget $$ Revenues Property Taxes 142,105,410 146,865,941 PILT Adjustment 64,323 - Equalization & Unconditional Grant 15,321,432 14,821,432 Regional Services Grant 546,630 - Surplus 2nd Year Previous Year 1,753,145 2,335,841 Transfer from Operating Reserves 800,000 - Growth & Community Services 4,327,812 5,396,963 Public Works & Transportation Services 5,599,798 7,164,027 Public Safety Services 1,976,432 1,992,114 Utilities & Infrastructure Services 317,000 316,000 Strategic Services 3,178,518 3,880,000 Corporate Services 285,000 459,000 Saint John Energy Benefits 1,012,000 1,200,000 Total Revenues 1 77,287,500 1 84,431,318 Expenditures Growth & Community Services 18,580,740 19,001,178 Public Works & Transportation Services 41,715,344 45,377,584 Public Safety Services 59,633,669 62,065,786 Utilities & Infrastructure Services 6,994,893 7,210,424 Strategic Services 7,917,074 8,330,096 Corporate Services 7,443,378 7,787,822 Other Charges 35,002,402 34,658,429 Total Expenditures 1 77,287,500 1 84,431,318 Surplus (Deficit) - - City of Saint John by Service 2024 Draft General Fund Operating Budget 20232024 BudgetBudget $$ Growth & Community Services Salaries 5,332,525 5,881,902 Goods & Services 13,248,215 13,119,276 TOTAL 1 8,580,740 19,001,178 Public Works & Transportation Services Salaries 16,645,616 17,230,405 Goods & Services 25,069,728 28,147,179 TOTAL 4 1,715,344 45,377,584 Public Safety Services Salaries 48,826,474 50,289,670 Goods & Services 10,807,195 11,776,116 TOTAL 5 9,633,669 6 2,065,786 Utilities & Infrastructure Services Salaries 3,575,653 3,692,688 Goods & Services 3,419,240 3,517,736 TOTAL 6 ,994,893 7 ,210,424 Strategic Services Salaries 4,003,562 4,081,419 Goods & Services 3,913,512 4,248,677 TOTAL 7 ,917,074 8 ,330,096 Corporate Services Salaries 5,266,536 5,478,409 Goods & Services 2,176,842 2,309,413 TOTAL 7 ,443,378 7 ,787,822 Other Charges Goods & Services 35,002,402 34,658,429 3 5,002,402 34,658,429 TOTAL EXPENDITURES 1 77,287,500 1 84,431,318 The City of Saint John 2024 Draft General Fund Operating Budget 20232024 BudgetBudget $$ Revenues Property Taxes 142,105,410 146,865,941 PILT Adjustment 64,323 - Equalization & Unconditional Grant 15,321,432 14,821,432 Regional Services Grant 546,630 - Surplus 2nd Year Previous Year 1,753,145 2,335,841 Transfer from Operating Reserves 800,000 - Growth & Community Services 4,327,812 5,396,963 Public Works & Transportation Services 5,599,798 7,164,027 Public Safety Services 1,976,432 1,992,114 Utilities & Infrastructure Services 317,000 316,000 Strategic Services 3,178,518 3,880,000 Corporate Services 285,000 459,000 Saint John Energy Benefits 1,012,000 1,200,000 Total Revenues 1 77,287,500 1 84,431,318 Expenditures Growth & Community Services Growth & Community Planning Services 1,791,586 1,821,565 Development Services 220,600 220,600 Development Engineering 350,328 359,899 Community Development 608,695 628,626 Animal Control 109,250 109,250 Dangerous and Vacant Building Program 374,428 466,934 Minimum Property Standards 375,506 467,699 Heritage Conservation Service 203,654 203,259 Cultural Affairs 129,827 133,413 Other By-Laws 356,103 219,560 Permitting & Inspection Services 1,181,614 1,367,093 Regional Economic Development Agency 3,093,000 3,087,500 Market Square 2,250,000 2,250,000 Saint John Trade & Convention Centre 390,186 390,186 Imperial Theatre 295,714 295,714 Saint John Aquatic Centre 521,281 521,281 Saint John Arts Centre 178,408 178,408 TD Station 478,246 492,593 Library 487,597 487,636 City Market 1,144,015 1,178,138 The City of Saint John 2024 Draft General Fund Operating Budget 2024 2023 BudgetBudget $$ Growth & Community Services (Continued) Arts & Culture Board 70,000 70,000 Public Art Maintenance & Repair 16,000 16,000 Remembrance Day 1,500 3,500 New Year/Canada Day Celebrations 40,000 50,000 PRO Kids 109,693 127,288 Succeed & Stay 92,785 149,812 Local Immigration Partnership 86,424 94,254 Carleton Community Center 190,700 190,700 Loch Lomond Community Center 45,000 45,000 North End Community Center 174,876 190,313 Recreation Programming 666,282 716,443 Neighbourhood Development 170,000 172,000 YMCA - Contracted Services 157,560 157,560 Boys and Girls Club - Contracted Services 145,887 145,887 Unspecified Grants 234,000 234,000 Affordable Housing Strategy 105,719 234,510 Lifeguards 195,500 199,410 Play SJ 45,000 45,000 Lord Beaverbrook Rink 167,393 167,764 Building Incentive Reserve 350,000 350,000 Regional Services Commission 176,383 176,383 Community Services 800,000 586,000 Total Growth & Community Development Services 1 8,580,740 1 9,001,178 Public Safety Services Fire Rescue and Suppression Service 23,591,356 24,675,601 Fire Training 1,319 10,437 Technical Rescue Response 46,925 51,956 Hazardous Materials 69,984 74,535 Fire Prevention 908,059 918,407 Fire Investigation 66,123 68,317 Emergency Management Services 360,216 351,900 Water Supply and Hydrants 2,500,000 2,500,000 Public Safety Communications Centre 2,894,857 3,045,168 Street Lighting 1,060,000 1,060,000 Police Administration 1,987,488 2,198,585 Criminal Investigations 4,623,244 4,775,919 Police Commission 116,350 119,379 Automotive Equipment 1,106,149 1,215,641 The City of Saint John 2024 Draft General Fund Operating Budget 2024 2023 BudgetBudget $$ Public Safety Services (continued) Support Services 1,812,844 2,021,272 Detention 179,975 188,410 Police Operations 17,342,680 17,801,437 Stations and Buildings 966,100 988,820 Total Public Safety Services 5 9,633,669 62,065,786 Public Works & Transportation Services Snow Control Streets 5,601,737 5,535,587 Street Cleaning 1,605,543 1,632,277 Utility Cuts 919,782 1,516,853 Street Services - Surface Maintenance 7,448,639 8,374,169 Snow Control Sidewalk 1,034,591 1,150,172 Sidewalk Maintenance 712,014 901,088 Pedestrian & Traffic Management Service 2,343,221 2,446,000 Solid Waste Management 3,830,567 4,502,875 Landscape - Parks & Open Spaces 2,095,731 2,104,383 Rockwood Park 405,699 523,780 Urban Forestry 336,497 406,159 Saint John Horticultural Association 50,000 50,000 Arena Operation & Maintenance 1,375,297 1,483,721 Sportsfield Operation & Maintenance 1,228,942 1,272,892 Other Facilities Operation & Maintenance 548,513 583,524 Transit Debt 1,746,105 1,609,000 Transit Subsidy 5,630,640 6,462,619 Fleet Stockroom 354,448 341,455 Stormwater Rural 1,844,465 1,786,072 Parking Administration 942,723 951,286 Peel Plaza Parking Garage 389,616 407,651 Market Square Parking Garage 115,881 156,493 Off Street Parking 1,154,693 1,179,528 Total Public Works & Transportation Services 4 1,715,344 4 5,377,584 The City of Saint John 2024 Draft General Fund Operating Budget Utilities & Infrastructure Services Engineering 1,252,328 1,306,459 Carpenter Shop 371,482 386,968 Facilities Management 1,579,996 1,600,133 City Hall Building 1,014,205 1,021,696 GIS 413,258 445,442 Stockroom 246,122 217,642 Stormwater Urban 2,117,502 2,232,084 Total Utilities & Infrastructure Services 6 ,994,893 7 ,210,424 Strategic Services Finance 1,250,757 1,313,643 Assessment 1,701,756 1,752,809 Supply Chain Management 449,075 430,601 Information Technology 3,511,071 3,765,939 Corporate Planning 316,055 281,815 Insurance 138,360 210,289 Liability Insurance 550,000 575,000 Total Strategic Services 7 ,917,074 8 ,330,096 Corporate Services City Manager's Office 779,270 742,984 Mayor's Office 225,837 230,235 Common Council 602,503 635,684 Common Clerk 642,779 722,890 Human Resources 1,942,089 2,114,400 Legal Department 1,136,916 1,169,974 Real Estate 177,086 185,697 Saint John Industrial Parks 170,763 172,136 Barge Terminal 25,000 25,000 Customer Service 999,115 1,054,171 Corporate Communications 516,634 515,928 External Relations 225,386 218,723 Total Corporate Services 7 ,443,378 7 ,787,822 Other Charges Fiscal Charges 15,685,605 15,420,429 Landfill Closure 300,000 300,000 Special Pension Contributions 9,460,000 9,503,000 Transfer to Capital Reserves 3,771,797 3,000,000 Transfer to Operating Reserves 135,000 135,000 Capital from Operating 5,650,000 6,300,000 Total Other Charges 3 5,002,402 3 4,658,429 Total Expenditures 1 77,287,500 1 84,431,318 Surplus (Deficit) - -