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2025-03-19 Finance Committee Agenda Packet - Open Session Finance Committee Meeting Open Session December 4, 2024 MINUTES OPEN SESSION FINANCE COMMITTEE MEETING DECEMBER 4, 2024 AT 4:30 PM MEETING CONDUCTED BY ELECTRONIC PARTICIPATION Present: Mayor D. Noade Reardon Councillor G. Sullivan Councillor G. Norton Councillor P. Radwan Councillor G. Stewart Also Present: Chief Administrative Office B. McGovern Commissioner of Finance and Treasurer K. Fudge Deputy Fire Chief E. Moyer General Counsel M. Tompkins Commissioner Human Resources S. Hossack Commissioner Growth & Community Services A. Poffenroth Commissioner Public Works & Transportation M. Hugenholtz Manager Analytics, Risk Management & Support, Fire L. Robichaud Director Saint John Water K. Mason Director Financial Services J. Forgie Director Financial Services C. Lavigne Intermediate Accountant V. Parikh Director Legislative Services / City Clerk J. Taylor Administrative Assistant K. Tibbits 1. Meeting Called to Order Councillor Sullivan called the Finance Committee open session meeting to order. 2. Approval of Minutes 2.1 Minutes of November 18, 2024 Moved by Mayor Noade Reardon, seconded by Councillor Stewart: RESOLVED that the minutes of November 18, 2024 be approved. MOTION CARRIED. 3. Approval of Agenda Moved by Mayor Noade Reardon, seconded by Councillor Stewart: RESOLVED that the agenda of December 4, 2024 be approved with the addition of Item 6.0 Heavy Industrial Assessment (Verbal Update). MOTION CARRIED. 4. Disclosures of Conflict of Interest No disclosures. 5. Consent Agenda 6. Business Matters Finance Committee Meeting Open Session December 4, 2024 6.0 Heavy Industrial Assessments (Verbal Update) Commissioner Fudge stated that he wanted to correct some information related to the assessment base information on heavy industrial properties reported at a previous meeting. At that time, an estimated $9.9M was provided as the amount that would be transferred from the province if fiscal reform were to occur. Subsequent to that meeting, a more detailed review was conducted and it was ascertained that a number of properties are exempt from paying provincial property taxes. Taking this information into account, a revised estimate for the taxes collected by the province on heavy industrial properties is approximately $7M rather than the $9.9M reported previously. Moved by Mayor Noade Reardon, seconded by Councillor Radwan: RESOLVED that the Heavy Industrial Assessment verbal update be received for information. MOTION CARRIED. 6.1 Saint John Water Long Term Financial Plan Director Mason and A. Mirabella, Hemson Consulting, reviewed the submitted report Moved by Mayor Noade Reardon, seconded by Councillor Norton: RESOLVED that MOTION CARRIED. 6.2 October Unaudited Financial Results and Year End Projections General Fund and Utility Fund Director Lavigne provided a high-level overview of the estimated year-end results for the General Fund and the Utility Fund. Moved by Mayor Noade Reardon, seconded by Councillor Stewart: RESOLVED that the Finance Committee endorse the staff recommendation of the reserve transfers to both General Fund and Utility Fund; and that this presentation be received for information and any questions be directed to staff. MOTION CARRIED. 6.3 2024 Reserve Director Lavigne stated that the purpose of the Reserve Policy is to address longer term funding strategies to minimize debt servicing costs, address the infrastructure deficit, and mitigate the effects of unanticipated events. In addition to the Reserve Policy, the City must comply with the Provincial Reserve Fund Regulation which states that the establishment, funding, and withdrawal of Reserve funds can only be done through resolutions of Council. Moved by Mayor Noade Reardon, seconded by Councillor Stewart: RESOLVED that the Finance Committee approve the transfers to and from the following reserves and forward a copy of the report to Common Council for approval: General Operating Reserves $816,000 from the General Operating Fund to the General Operating Reserve $1,134,758 from the General Operating Reserve to the General Operating Fund $250,000 from the General Capital Reserve to the General Operating Reserve General Capital Reserves $12,662,936 from the General Operating Fund to General Capital Reserve $6,543,838 from the General Capital Reserve to the General Capital Fund $250,000 from the General Capital Reserve to General Operating Reserve Utility Operating Reserves $1,118,631 from the Utility Operating Fund to the Utility Operating Reserve (Industrial Rate Stabilization) Finance Committee Meeting Open Session December 4, 2024 $1,637,894 from the Utility Operating Reserve to the Utility Operating Fund Utility Capital Reserves $3,124,400 from the Utility Operating Fund to the Utility Fund Capital Reserve MOTION CARRIED. 7. Information Items 8. Adjournment Moved by Mayor Noade Reardon, seconded by Councillor Stewart: RESOLVED that the Finance Committee meeting be adjourned. MOTION CARRIED. The Finance Committee open session meeting held on December 4, 2024, was adjourned at 5:35 p.m. FINANCECOMMITTEEREPORT Report DateMarch 10, 2025 Meeting DateMarch 19, 2025 Service AreaStrategic Services Chair SullivanandMembers of Finance Committee SUBJECT: Procurement Updates OPEN OR CLOSED SESSION This matter is to be discussed in Finance Committee Open Session. AUTHORIZATION Commissioner/Dept. Primary AuthorChief Administrative Officer Head Chris Roberts/Jodie ForgieKevin FudgeJ. Brent McGovern RECOMMENDATION ThatFinance Committeerecommend the report to Common Council to receive and file. EXECUTIVE SUMMARY The purpose of this report is to update the Finance Committee on annual procurement activitiesand to report on items Procurement Policysection 10.3(non-standard procurements, non-compliance and procurements over $100,000). PREVIOUS RESOLUTION That Finance Committee recommend to Common Council the approval of -011 1)That Finance Committee recommend to Common Council By-Law Number LG-21 for approval 2)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 - 2 - STRATEGIC ALIGNMENT The initiatives contemplated in this report are REPORT On June 19, 2023, Common Council stnd Strategic Procurement Policy (FAS-011) and the 1 and 2 readings of a By-law rd Respecting Delegation of Authority to Award or Approve Contracts (LG-21) (3 reading was completed on June 26, 2023). The approval of these documents has had First and foremost, the modernization initiatives procurement processes to bring them in line with the thresholds contained in the following legislated agreements (to which the City is subject): the New Brunswick Procurement Act and Regulation 2014-93 the Canadian Free Trade Agreement (CFTA) the Comprehensive Economic and Trade Agreement (CETA) operated under far more stringent thresholds which resulted in unnecessary non-value-added practices. The City now has more flexibility and agility to respond to a multitude of different scenarios and opportunities while simultaneously satisfying its legal obligations. Another key improvement is the increase in spending authorities for staff in conducting day-to-day purchases. This has items without delays and to avoid administrative time for preparing and attending common council meetings. The increase in spending authorities saw an overall reduction in approvals (in terms of number of approvals) required by Common Council, CAO, Directors and Line Managers, with an increase by Commissioners and Admin. This makes sense, given the increase of authority applied to each approval level. Additionally, it resulted in Common Council still having input into approvals on 68% of the spend by value (a reduction of 14%). The data was used by taking the purchase orders from this year and using the current spending authorities as the Post-Increase and taking that same data and applying the previous spending authorities as the Pre- Increase. -3- Pre-Increase Approvals by Number 6% 9% Admin 6% Line Manager 45% 13% Director Commissioner 21% CAO Common Council Post-Increase Approvals by Number 2% 3% 10% Admin 6% Line Manager 13% Director 66% Commissioner CAO Common Council -4- Pre-Increase Approvals by Spend 1% 3% 3% 9% 2% Admin Line Manager Director Commissioner 82% CAO Common Council Post-Increase Approvals by Spend 3% 3% 3% Admin 11% Line Manager 12% Director 68% Commissioner CAO Common Council In concert with the Policy improvements, createdBylaw Number LG-21. This Bylaw permittedCommon Council to delegate its authority to awardor approvecontracts to the CAO, Commissioners and Directors of the City within the spending limits authorized under the Strategic Procurement Policy. In addition,the Mayor and City Clerk are authorized to execute any contract awarded or approved by the CAO, Commissioners or Directors of the City within the respective spending limits authorized under the Strategic Procurement Policy. By adopting this Bylaw, Common Council drove significant improvements into the contract execution processes. In 2024, there were29contracts executed using the new contract routing form process(29reports to Common Council removed from workload). - 5 - Non-Standard Procurements There were two Non-Standard procurements in 2024, one pertaining to the emergency demolition of a fire-damaged structure and one pertaining to the emergency purchase of a pump for the South Bay wellfield. Instances of Non-Compliance with the Strategic Procurement Policy There were no instances of non-compliance with the Strategic Procurement Policy identified in 2024. Procurements Over $100,000 + Taxes There were 141 procurements over $100,000 + taxes in 2024 of those procurements 79 for a total of $15.9 million was approved by the CAO for an average value of $201,886. All data used in the above calculations was derived from the purchase order report from the Purchasing Module within Naviline for 2024. As such these numbers are approximate and not audited. SERVICE AND FINANCIAL OUTCOMES Maintaining regular communication with the Finance Committee and Common Council to keep leadership informed of annual procurement activities. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS N/A ATTACHMENTS N/A FINANCECOMMITTEEREPORT Report DateMarch 12, 2025 Meeting DateMarch 19, 2025 Service AreaTransportation and Environment Services Chairman SullivanandMembers of FinanceCommittee SUBJECT: 2024 PlaygroundRenewal-Fund Allocation OPEN OR CLOSED SESSION This matter is to be discussed in Finance Committee Open Session. AUTHORIZATION Primary AuthorCommissioner/Dept. HeadChief Administrative Officer Susan StevenIan Fogan/ Michael BakerJ. Brent McGovern RECOMMENDATION It is recommended that the Finance Committee approve the use of the Playground Asset Renewal fundingincluded in the 2024 General Fund Program toupgrade Rainbow Park. EXECUTIVE SUMMARY PlaySJ(the Plan), definesdistrict playgrounds as high-quality and distinctive playgrounds that draw people from across a district. The Plan identifiessix District Playgroundsand Rainbow Park ison this list. The Plan recommendsthat District Playgroundswithin the City be redesigned to higher standards, adheringto best practices for the design, installation and maintenance of both existing and future recreation infrastructure. The Province of New Brunswick plans to openthe new South End School in September 2027. This facility will not only be used as a school but also as a community center and gatheringplace for the residents of this priority zone. The City has committed to support this facilityby upgrading Rainbow Park,which is located adjacent to the siteofthe new school. PREVIOUS RESOLUTIONS M&C 2022-317 (October 17, 2022) 2023 and 2024 General Fund and Utility Fund Capital Programs, approved. - 2 - M&C 2023-238 (October 30, 2023) Revised 2024 General and Utility Fund Capital Programs, approved. M&C 2024-287 (October 28, 2024) 2025 General and Utility Fund Capital Budgets, approved. STRATEGIC ALIGNMENT This project aligns with Councipriorities of BELONG and GROWTH. The BELONG priority is met by offering recreational opportunities that align with PlaySJ, including maintaining District Parks to enhance the quality of life and social well-being in a safe place to live. The GROWTH priority is being met by investing in key infrastructure to enhance quality of life and visitor experience resulting in population and economic growth. REPORT PlaySJ recommends that the City should develop an overall implementation plan and coordinated master plan to create no less than six district level playgrounds within the primary development areas of the City. The Plan states that these playgrounds should adhere to uniform quality standards as high-profile recreation facilities and lists Rainbow Park as one of the recommended District Playgrounds. PlaySJ also notes that Rainbow Park has a master plan developed and recommends the continued implementation of this plan. The construction of the new South End School adjacent to Rainbow Park only reinforces the recommendation that this upgrade project is an appropriate use of the 2024 General Fund Playground Asset Renewal funding. In 2024 the City hired Brackish Design Studio, a local landscape architecture firm, to complete an updated conceptual design for the Rainbow Park site. Contingent on funding available, upgrades included a vegetable garden, open space, memorial garden, tot lot, sand play area, covered seating area, pod sculptures, berm buffers, and picnic area. SERVICE AND FINANCIAL OUTCOMES The total projected cost to complete the upgrades at Rainbow Park is $2,150,000. The intention is to split the project into two phases, with Phase 1 ($290,000 + $500,000 = $790,000) being completed in late 2025 and Phase 2 ($1,360,000) being completed in 2026/2027. Depending on the design and procurement schedule adjustments to the above estimated project timelines may be required. completing the full site design as soon as a consultant can be hired through a public request for proposal process. - 3 - The 2024 General Fund Capital Program has allotted $500,000 for the Playground Asset Renewal project. Staff were directed within the Capital Program to return to Finance Committee for approval once a location for this funding was determined. It is recommended that these funds be used for Phase 1 of the Rainbow Park Upgrades project. The 2025 General Fund Capital Program approved $290,000 in capital reserve funding to be used for Phase 1 of the Rainbow Park Upgrades project. If sapproved the overall funding allocated to Phase 1 would be $790,000. It should be noted it is sintention to submit funding application(s) to the Regional Development Corporation (RDC) to request RDC support on this overall project. If the City is successful obtaining Other Share funding from RDC, the City will be able to reduce the amount of funding requested for Phase 2 of the project. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS Public Works and Transportation Services were consulted on this recommendation. ATTACHMENTS N/A - . . Asset 4 residential . The study s , the see during the ohn Water Long J the feasibility study Financial Plan is . Saint based charge - Ten Year 4 , the ’s Pathway to Net Zero , rate structure and affordability : 203 s - etering. This project would 4 ActSJ m Strategic Plan including: , year 202 - major transformational action niversal 10 u aligns with and Common Council’s Priorities. The Plan also uses cost component to by the City of Saint John from a flat rate to consumption for links to Associated City Plans ut B Policy moving the move Large infrastructure deficitRate affordability and billing structureSize and geography of the system Financial modelling for the plan was conducted by Hemson Consulting. 1.2.3. It should be noted that aregardingcustomers would also addressSeveral challenges or obstacles have been considered development of this plan Alignment with other City Plans In addition to the City’s Term Financial PlanManagement policies as set o See Appendix Note: . s all – ”for tility u Common Council potable (drinking) , for for the next ten years. It ustainable s“Strengthen the “ : universal metering | TEN YEAR FINANCIAL PLAN is a living document created Utility activities he t regarding year Strategic Plan for - ” 10 ’s sets out the following actions: capital budget to support strategic infrastructure lots. . s d meet the present and future economic, social needs of today’s City of Saint John he Utility’s financial and operating includes a discussion and analysis of the financial environment, t and defines financial strategies and targets Structure theinvestmentSeek external funding for future utility infrastructure investmentUndertake a feasibility study residential customers.Seek legislative changes to implement a water service levy on vacant and service , year Strategic Plan service and infrastructure. -SAINT JOHN WATER 10 Saint John Water Long Term Financial Plan s part of the About this Plan The to guide will ensure that Saint John Water operates as a meaning it will ratepayers without compromising the ability of future generations to meet their own needs.This planidentifies challenges and opportunities, details financial principles and policieswater and wastewater services.Financial Principles The City of Saint John Finance Committee has adopted four financial principles to guide the plan: long term sustainability, increased flexibility, reduced vulnerability, and environmental responsibility.Common Council’s Goals for the Plan Aidentified the following objective competitiveness of the water utility in comparison to municipalities with similar The - has he debt its 7 associated with s However, t . 4 the operating budget is and the balance for longbeen additional funding in the overall sewerage , also due to cost . lines 4 ) focus on debt reduction through has very little reduction in ly $6 million per lane kilometer. e the million tility with approximately 19,100 203 u - . There and support efforts to drive fiscal 4 , Project. There has been a focus on debt for the year ending 202 achieving annually of combined sewer 202 of government over the last several years, but even million s m k 75 millionhe Utility is t 5 eficit. large infrastructure deficit being funded strictly from the d 2,875,000 6 timated to be approximat $ a key growth centre for the City the (with no additional borrowing since 2017 , combined terra cotta sewers dating back to 1872 in the Central he Utility’s debt was over $107 from other level t ing that funding Safe Clean Drinking Water nfrastructure The City has some of the oldest wastewater infrastructure in the country, includPeninsulaThe City of Saint John has a critical need to upgrade wastewater infrastructure in order to improve environmental performance, increase wastewater and storm capacitysustainability and tax base growth. With approximately system, renewal of this system to optimize environmental performance and growth opportunities would not be feasible without funding assistance from the federal and provincial governments. The cost of replacing combined sewers is es 4. Long Term Debt In 2017 the reductionterm debt is balance is a significant burden for a customers.The challenge with the high debt and resulted inoperating budget. The capital being funded approximately $5.securedwith i , it is into , million in order assets is 5 The City’s ($1 - however re sustainable ; the urban core current funding in. An infrastructure per year versus $21 in Saint John has an available. With per year is required to As Canada’s first infrastructure deficit eport was prepared in eport . r s condition | TEN YEAR FINANCIAL PLAN Saint John Water se areas mo money thousand o building Fair million (SOTI) of funding to deficit will not improve. at value of $370 which target density was the SOTI r , apartment repairs, and the Very Good assets unit million gap in achieving sustainable funding. - he Infrastructure its 5 and t replacement annual investments in infrastructure. 83(in 2024 dollars) f poor to very poor condition. $2 o can handle any new growth in residential units. - in million per year, th are million development. Utility’s 5 assets are in % 1 estimated 35 - the City for 10 2024 State % of 2024 that 80 in new water and sewerage revenue. This also doesn’t take , the City’s growth objectives the millions of dollars in infrastructure that the Utility needs SAINT JOHN WATER The billion. ) . extensive evaluation of Large Infrastructure Deficit 01 . 4. Without additional large commercial customers, particularly those that use water in manufacturing, any amount of new revenue generated is small compared to the For example, a newly built estimated annual property tax revenue of $230thousandaccountto ensure 3 Infrastructure is the facilities, equipment and systems needed to collect, store treat and deliver water and wastewater serviceincorporated city, the City of Saint John has a legacy of aging infrastructure. A strategic approach is needed to optimize City assets, improve environmental performance and drive growth. Outdated infrastructure is a barrier to realizing and priority suburban growth areas to make thand attractive Saint John Water is currently facing a based on the deficit is essentially the difference between the funding required for replacement, maintenance first 2019$Generallyestimated that 11available of $Approximately $achieve sustainability. Compared to the current funding of $10per year, there is a $20 . a 8 annual basis - and increased costs water consumption. 4 regardless of the amount of water their 203 - including maintenance, electricity and , 4 is the same 202 billed according to are residential customers have their water meters read every - non rate structure, the total bill Flat Rate Billing . 6 Currently, residential customers with fewer than three dwelling units in Saint John are charged for water and sewer services on a flat rate basis. Under flat consumed in each unit. Flat rate water bills are sent on a semiIn contrast, two months and Flat rate billing often results in excess water useassociated with water treatmentchemicals. , . ) of and . of km² 5 etering .4 km no dams m5 it is critical 130.7 , ( niversal size and cost u orcemain, 7 Fredericton has 3 FrederictonFredericton has of f . | TEN YEAR FINANCIAL PLAN limited fundingwhile ,The Utility is endeavouring to ed by two treatment plants .. wastewater treatment plants. and , 50.4 km cost and environmental the size of sewer stations funding that of Fredericton and Moncton than the infrastructure in those other and is serv sewer torm difference means the s such address Saint John is geographically a much larger city is double of . ) large volume to 2 That anitary . ) of s without km² 325.2 km dams and one treatment plant 315.96 km ( wastewater pumping significantly larger and . 2 141.2 nfrastructure I ( 14 dams in its system315.5 km 13 and Moncton have one wastewater treatment plant each. ewer achievable inability to borrow more money s combined sewers Saint John the SAINT JOHN WATER comparing Saint John to other cities like Fredericton and Moncton he Utility continue to seek and secure funding from other levels of he infrastructure in Saint John is significantly larger, older, and much t Size of the System ombined Due tothat government. Major transformational initiatives such as will not be 5. Whencritics generally focus on ratesand tmore costly to operate and maintain cities. In fact, and Monctoninfrastructure is Wastewater Treatment Saint John currently has three Fredericton Saint John has 7Moncton has Drinking Water Treatment Saint John hasMoncton has threeand one water treatment plant. Underground Saint John has cseparateconsiderations. 11 4 203 - 4 202 .. - ) s ). will can rate first s leaks ) rather s ( starting 2%metering , as it ratepayers ” the ending on the etering to meter rates by m helps detect to cost savings and water consumption two percent (ing lifeline rate “ niversal a water. lead u | TEN YEAR FINANCIAL PLAN time -– on water consumption d base dential customers a 30% reduction in . A reduction in water consumption he Utility to implement changes within it t and distribute is a discounted rate to ensure ratepayer the same amount regardless of consumption determine rates for the universal metering identifies etering will allow better distribution of costs pay the implementation of services, regardless of how much they use.block for most resi to treat m key strategys Zero - for the implementation of That means all flat rate billing customers pay the same promotes responsible water usage, rate s , as charges will be - the financial challenges being faced by many cost would be determined at that time of the next study. of a few municipalities in the country that still uses a flat , first e For context, the net additional revenue needed to carry out niversal with u , and optimizes water distribution plan callall ratepayers etering will also allow The ( conservation. transformational project will require at least 50% funding from m ratepayers reduced is Pathway to Net their basic water needs at a rate that is deemed to be affordable Th SAINT JOHN WATER : having Utility’s Universal Metering Saint John is onrate billing structure.amount for their water The in 2028, with conversion 2031. other sources. the metering program would be equal to a oneincrease under the existing rate structure scenario. However, as program will impact different user groups and customers pindividual volume of water consumed, the true rate impacts, with the additional costsThe move to between than Universal rates to assist The Utility will investigate rate block. meetA study will begin in 2026 to program.Water metering alsomore quicklyimproved ActSJ per capita by 2040 as a result in term debt - 14 he Utility remains in T The Debt Management 003) -was created. This policy he Utility Fund 5% of the Operating Budget T 1 the money to cover said Operating budget after 2026 003) s 4 - (FAS rating or maintenance costs. The ay d 203 nd ope - n order to ensure I 4 ainy r 006) - never to fu 202 – The following are stipulations. (FAS sets out the acceptable conditions for the use of debt in oney for a m isely 006) - w The Debt Service Ratio shall not exceed Debt shall not exceed 100% of the Borrow While it would be great to be able to pay cash for everything, the reality is that at some point or another debt will become a fact of life, especially when it comes to large ticket items such as houses or cars. Policy (FAS addition to debt limits, targets and capacity. It stipulates that longwill only be issued to finance projects approved in the Capital Budget and the Capital Investment Plan other key limits and targets are as follows:Key Performance Indicators of Debt Limits of Debt Service Ratio:Total Debt Outstanding as a Percentage of Operating Budget:Save your Everyone knows that surprises happen. There will always be unforeseen expenses that will come up and sometimeexpenses will not be available. compliance with the Debt Management and Operating Budget policies, an Operating and Capital Reserves Policy (FAS allows the Utility to set aside money to use for future operating expenses and capital expenditures. 4) ustainable s 00 - ouncil to help be directed to C was established to (FAS 004) ake- inancial vulnerability. It is | TEN YEAR FINANCIAL PLAN m expenditure It will also ensure that Council’s key financial values: six term financial plan is to have a road map to - oney than you a long m the ability to meet the present and future economic s by applying ore ensure that Saint John Water operates as a “ m developing goal The Operating Budget Policy (FAS time revenues should only be used for onetime expenses - ese he Utility are met. oney will go to funding their minimum payments. That is why it is t pend a defined set of goals. Maintain a structurally balanced budget: Recurring operating expenses should be covered by recurring operating revenuesOperating revenues above required operating and capital reservesOne s , meaning it has ” SAINT JOHN WATER social needs of today’s ratepayers without compromising the ability of tility Policies The purpose of achieveThis road map willuandfuture generations to meet their own needs.goals for A number of best practice policies have been adopted by achieve th Don’t If every year a person uses credit cards to pay for things that they need, but can’t afford, they will dig themselves a financial hole that will be very difficult to get out of. Every year, their debt levels will get higher and a larger portion of their mimportant to only spend the money you have made, thereby living within your means. strengthen financial sustainability and reduce fsummarized as follows: 15 urniture f renewal and 10% for new 4 021) - personnel budgets are managed is a policy that enhances accuracy, - of the City advises that the capital 203 021) (FAS -- 005) -4 responsibility and asset management. policy. The policy enhances fiscal responsibility 202 the efore you buy new living room b oof r MandatoryRiskPriority of CouncilPositive Financial ImpactDiscretionary 005) - Capital Budget Policy (FAS Budget Monitoring Policy (FAS Fix the (FAS The budget for the Utility shall comprise of 90% capital capital. It also prescribes the priority in which capital money is spent each year, specifying that capital projects will be completed in the following order:This means that given the limited available money to spend, the leaky roof will need to be replaced before new living room furniture can be purchased. The Capital budget policy follows four key principles and strategies: affordability, ownership, fiscal Keep track of your money The accountability, and control by ensuring budget allocations are managed and adhered to according to and financial flexibility by integrating budget monitoring practices with the Utility’s reserve fund and debt management strategies. The policy ensures personnel and nonseparately, annual operating revenues and expenditures match forecasts, financial controls to ensure resources are funded and spent in a fiscally prudent manner. Asset 001) - | TEN YEAR FINANCIAL PLAN (FAS roperty p was created. The specific objectives of the s 001) - iabilities apital renewal l are of your c c time operating expenses which are greater than $100,000 that - ood Major unanticipated eventsMajor Future Oneare not part of the operating budgetInfrastructure deficitInvestment growth opportunities Improve the reliability of customer service by maintaining clearly defined levels of service by maintain assets in good conditionImprove the decisions related to the management of the Utility’s assetsImprove the transparency and accountability of community investments in the management of the Utility’s assets.Improve the management of the Utility’s exposure to risks of reduced service deliveryFacilitate the leveraging of partnerships and infrastructure funding from external sources. g SAINT JOHN WATER Reserves are meant to provide for:Take When you own a car, you know that routine maintenance such as changing the oil and rotating the tires will help extend the life of your vehicle as well as minimize the operating expenses in the long run. Also, once the car gets old, there is an optimal time to replace it before the maintenance charges become too high. City assets are very similar and for that reason, an Management Policy (FAS Asset Management Policy are to: and billable 18 inch 15,700 density residential) - year Strategic Plan - . are less than 1 ohn 10 J 4 per year in potable consumption 3 Saint John from 2024 to 2029 of meters 203 - Growth Scenario Industrial, Commercial, Institutional 4 oped using the current state of the Utility l currently has approximately 2.2 million m - pay a flat fixed charge (low 378/year 202 About 65% that $ o based on growth in users Household unit metered accounts are billed based on meter size industrial customers - dditional 2.1 Saint John WaterwaterAn additional 3,300multiAn afrom 25 new residential customers per yearGrowth in line with City of Saint Billable residential fixed connections to increase by 2.14% or an average of d two scenarios Growth Assumptions Over the Planning Period Modeling for the plan was devean Current State of the UtilityConservative Alternate Household Growth Scenario Year Asset - debt considered in the | TEN YEAR FINANCIAL PLAN per annum (2024) for 20 and wastewater ) s 2024 budget and adjusted to account for the ’ 5 million potable operating costs drinking ( I Report = $3 T Based on the Cityeffects of inflation Annual debt payments (existing and projected)Only calculationsPension expenses come offline in Q1 2028 Post 2024 is based on a similar level of activity to 2024 plus inflation.SONeeds for potable system. Full recovery of Full recovery of annual capital needs Contribution to Reserve for future Asset Replacement SAINT JOHN WATER 1.2.3. Full Cost Recovery Approach ebt d 19 ost to c 10% of Operating -- 4 203 - 4 202 onservative growth scenario c (Hemson) ervice Figure 1: s is % 0 7 ($146 is growth 2 203 2034 - . - % ($54 million) focuses on 1 Utility Plan he t | TEN YEAR FINANCIAL PLAN General Fund conservative household the Term Financial ture renewal from 2024 - to Debt Service extreme risk assets is 1 reserves and pay as you go 2032 Long - 023 of funding from other levels of government) etering implementation to start by 2028 m funded by the Utility) that are credible and attainable for million 10% of Operating Cost : 42 % future infrastructure requirements funded by the Utility John Water 2 : 25 new residential customers per yearAdditional revenues over expenditure requirements directed to operating and capital Inflation of goods and services of 2.30% in 2024, then 2.15% annuallyFlat rate to remain stable at $1,428 per year until 2026. There will be gradual increases of 1% to 2% per year until new billing structure introducedWage and benefits to align with Infrastructure deficit to remain stable during term of planUniversal Universal metering project assumes 50% funding from other sources 30millionUnfunded share of remainingUnfunded share of all infrastruc($3 SAINT JOHN WATER Saint Conservative Household Growth Scenario Assumption Theopportunities The following has been assumed within the scenario 20 4 203 - 4 202 ncludes potable water and rate revenues include: fire i | TEN YEAR FINANCIAL PLAN - Non 10% of Operating cost to debt service. (Hemson) -- This forecast Growth Scenario xcludes industrial water. It e year conservative forecast meets all of the financial targets. - SAINT JOHN WATER Figure 2: conservative growth scenario Conservative Household The 10Specifically, the budget is balanced, the total debt load has been reduced, and infrastructure deficit is maintained. wastewater. protection levy, carryover surplus, etc. 21 10% of Operating cost to debt 4 -- 203 - 4 growth scenario 202 alternative : 3 Figure service (Hemson) % 80 63 19.5 2 % ($ directed to 203 2034 is 4 City of Saint - - the | TEN YEAR FINANCIAL PLAN General Fund the rowth in line with g to Debt Service : etering implementation to start by 2028 etering project assumes 50% funding from other sources m m million of funding from other levels of government) 10% of Operating Cost new residential customers per year % future infrastructure requirements funded by the Utility ($1 308 year Strategic Plan 378Additional revenues over expenditure requirements operating and capital reserves and pay as you goInflation of goods and services of 2.30% in 2024, then 2.15% annuallyFlat rate to remain stable at $1,428 per year until 2026. There will be gradual increases of 1% to 2% per year until new billing structure is introducedWage and benefits to align with Infrastructure deficit to remain stable during term of planUniversal Universal 37million funded by the Utility)Unfunded share of remaining extreme risk assets is million)Unfunded share of all infrastructure renewal from 2024($ - SAINT JOHN WATER Alternative Growth Scenario Case Assumption: The following has been assumed withJohn 10 22 4 203 - 4 202 | TEN YEAR FINANCIAL PLAN 10% of Operating cost to debt service (Hemson) -- ncludes potable water and wastewater. It rate revenues include: fire protection levy, - meets all of the financial targets. Specifically, Non growth scenario alternative : 4 year alternate forecast - SAINT JOHN WATER Figure Alternative Growth Scenario Case The 10the budget is balanced, the total debt load has been reduced, and unfunded infrastructure deficit declines. It iexcludes industrial water. carryover surplus, etc. 27 4 203 - 4 202 Treatment Facility Wastewater Treatment Facility City Millidgeville he t Length Manholes Greenwood Facility, Treatment Sewer Length Facility, Length Combined Throughout Length & Basins Sewer Treatment SewerForcemain Wastewater Sewers Stations Catch Treatment SanitaryII Lift SanitarySanitaryCombinedStorm Both Lancaster Wastewater Heights Manholes& Type | TEN YEAR FINANCIAL PLAN I WideWideWideWide Description CityCityCityIncludesWastewaterEasternFacility,Morna Description CityStormType Inventory kmkm kmkm 32 Assets 72 854651119473 49.975.4 Statistics 318.3 Statistics 329.8 Infrastructure Assets (Low (High System Length Facilities Facilities System Combined) Sewer & Length Stations SAINT JOHN WATER Length Length LiftTreatment Wastewater Treatment Storm Sewer (Sanitary Saint John Water SewerForcemain SewersManholes Basins Asset Primary SanitarySanitaryCombinedManholesWastewaterWastewaterVolume)WastewaterVolume) Primary Asset StormStormCatch 28 plan includes a n a l P l, the a i c n a 4 n i F m 203 r e - T - 4 g n o L 202 n h o strong fiscal management. J t n i a a suite of best practice financial policies, the establishment of S f o y t i term financial targets, and a financial health scorecard that measures C - e dopted by Common Council in December 2019 h T Acomprehensive financial assessment of the City’s challenges and opportunities,longresults and ensures - Grow, Green, ActSJ Pathway to – term. veloped to align with 001) was adopted by Priorities e- 2026 - | TEN YEAR FINANCIAL PLAN term Financial Plan, PlanSJ, and - n shall adopt and apply recognized the climate crisis and its commitment to were developed through several workshop term Financial Plan was d - er Long t zero emissions in the city by 2050. - ences the following City plans. r SAINT JOHN WATER Zero, is the City’s response to - year Strategic Plan - Appendix B: Associated City Plans and The Saint John Waand refe 10 This plan serves as a management tool to improve the City’s performance and align with existing plans, including the LongMoveSJ.ActSJ The City of Saint John's Community Energy Action Plan Nettransition to net City of Saint John Asset Management Policy The City of Saint John Asset Management Policy (FASCommon Council in 2018. It confirms support for implementing asset management practices to ensure sustainable delivery of services, with the following statement: The City of Saint Johasset management practices in support of delivering services to its customers reflecting the vision presented in the City' s Municipal Plan, PlanSJ, and related strategic plans.Council Priorities Saint John Common Council priorities for 2021Belong, Move, and Performsettings using input from an online public survey and guided by several municipal strategic plans including Plan SJ, Play SJ, Move SJ, and the Longterm Financial Plan. 29 4 203 - 4 202 fter A 2034) - (2024 | TEN YEAR FINANCIAL PLAN metered Customers - Rate for Non Flat : C SAINT JOHN WATER AppendixUniversal Metering Program Implementation 30 4 203 - 4 202 Planning Period | TEN YEAR FINANCIAL PLAN Financial Forecast over the : D SAINT JOHN WATER Appendix City of Saint John Capital Budget Policy Title: Capital Budget Policy Subject: Capital Budget Policy Category: Finance and Administrative Services Policy No.: FAS- 005 M&C Report No.: 2022-279 Effective Date: September 6, 2022 Next Review Date: 2023 Area(s) this policy applies to: Cross Corporate Office Responsible for review of this Policy: Finance and Administrative Services Related Instruments: Policy Sponsors: Chief Financial Officer FAS-001 Asset Management Policy FAS-002 Investment Management Policy FAS-003 Reserves Policy FAS-004 Operating Budget Policy FAS-006 Debt Management Policy Document Pages: This document consists of 7 pages. Revision History: Common Clerk's Annotation for Official Record Date of Passage of Current Framework: September 6, 2022 I certify that this Policy was adopted by Common Council as indicated above. ________________________ September 13, 2022 Common Clerk Date Date Created: Date Updated: Common Council Approval Contact: 12-March-2025 Strategic Services 1 City of Saint John Capital Budget Policy TABLE OF CONTENTS 1. POLICY STATEMENT ........................................................................................................ 3 2. PRINCIPALS AND STRATEGIES ......................................................................................... 3 3. CAPITAL PRIORITIZATION ................................................................................................ 4 4. CARRY OVER OF PREVIOUS YEAR APPROVED CAPITAL BUDGET .................................... 5 5. INTER-GOVERNMENTAL CAPITAL GRANTS ..................................................................... 5 6. CAPITAL BUDGET SHORTFALLS AND SURPLUSES ........................................................... 5 7. APPENDIX GROWTH RELATED INVESTMENTS COST SHARING FORMULA ......... 5 2 City of Saint John Capital Budget Policy 1. POLICY STATEMENT 1.1. This Policy applies to budgeting by the Municipality for capital funds. 1.2. Each council shall adopt a Capital Budget for each calendar year. 1.3. Capital budget shall align with the Council approved Long Term Financial Plan which includes a 5 Year Capital Investment Plan and a 10 Year Debt Plan. 1.4. Finance Committee will review the 5-year Capital Investment Plan Annually and recommend any major amendments to the Plan to Council for approval. 1.5. The Capital Budget Policy supports the City to achieve its current and future goals in a fiscally responsible and sustainable manner. 1.6. Capital Budget Investment decisions shall be evidence based and conform with the Asset Management Policy. 1.7. The Capital Budget Policy shall comply with all relevant provisions of the Local Governance Act and all other applicable legislation. 2. PRINCIPALS AND STRATEGIES 2.1 Affordability - Capital Budget shall reflect the level of infrastructure investment required to achieve agreed upon service and taxation objectives in the Council approved Long Term Financial Plan. 2.2 Ownership - Only City owned assets, which meet the definition of asset pursuant to Generally Accepted Accounting Principles, shall be funded in the Capital Budget. Funding agreements prior to the approved Capital Budget Policy Council approval date are exempted from the policy. 2.3 Fiscal Responsibility - The City shall reduce its reliance on debt and address the infrastructure deficit by increasingly funding Reserves and Pay-As-You-Go to fund infrastructure renewal. 2.4 Asset Management - The Capital Budget shall consider the full life-cycle cost based on asset management best practices and adhere to the Asset Management Policy. 3 City of Saint John Capital Budget Policy 3. CAPITAL PRIORITIZATION 3.1 To strategically manage the City's debt and infrastructure deficit, the General Fund Capital Budget shall comprise of 80% Capital Renewal and 20% for New Capital and shall align with the City's Long Term Financial Plan and the City's Strategic Plan. The Utility Fund shall comprise of 90% Capital Renewal and 10% for New Capital. 3.2 For the purpose of this policy, Capital Renewal is defined as assets that are at the end of its useful life and contribute to the City's infrastructure deficit. 3.3 As a pre-requisite to share Capital Investments between the General Fund and Utility Fund, the proposed investment must have a primary purpose to grow the tax base (asset management secondary as existing infrastructure is not at the end of its useful life), the project must have a positive business case with a payback period of 10 years or less, the business case be approved by the Finance Committee and be approved in the Capital Budget to qualify for cost sharing in accordance with the Capital Budget Policy. If the project meets the above criteria, the cost of the growth capital investment shall be allocated between the General Fund and Utility Fund in accordance with each funds proportionate share of net present value of net revenue generated by each fund as per the formula set forth in Appendix A of this policy. 3.4 Proposed Capital Budget Projects will be prioritized in the following order. a. Mandatory - Must be completed due to legal or regulatory requirements. b. Risk - Required to mitigate liability associated with health and safety, mitigate liability or to mitigate sudden asset failure. c. Priority of Council - As stipulated in the 5 Year Capital Investment Plan (Long Term Financial Plan) and supported by evidence-based asset management recommendations and are part of the City's strategic plans. d. Positive Financial Impact - The Capital request not included in the 5-year Capital Investment Plan but can be supported by a business case that demonstrates a positive financial impact for taxpayers - would require a Council approved adjustment to the Capital Investment Plan and Capital Budget. e. Discretionary - New asset which aim to increase or enhance service level to the residents and taxpayers. Requires amendment to the Long-Term Financial Plan, the City strategic plans, and supported by a business case. 4 City of Saint John Capital Budget Policy 4. CARRY OVER OF PREVIOUS YEAR APPROVED CAPITAL BUDGET Approved capital budget projects must be started by the end of the second year after approval. 5. INTER-GOVERNMENTAL CAPITAL GRANTS Inter-Governmental capital grants shall only be pursued for Capital projects in line with Council priorities, the approved Capital Budget, and the approved 5 Year Capital Investment Plan. 6. CAPITAL BUDGET SHORTFALLS AND SURPLUSES 6.1 Common Council must approve any adjustments to the Capital Budget for additional funding to cover Capital authority level. 6.2 Capital Budget surpluses that exceed the authority level, where budgeted Capital funds exceed actual capital, shall be, with Council approval. a. Realized as savings resulting in reduced debt financing. b. Used to offset deficits in other approved Capital Budget shortfalls. c. Leveraged to address the infrastructure deficits identified in the Asset Management Plan and the 5 Year Capital Investment Plan. 7. APPENDIX GROWTH RELATED INVESTMENTS COST SHARING FORMULA Assumption: Life of the Project is capped equal to number of years of debt amortization period. Formulas: 1) Cost Allocation: General Fund = C * (NPVNGFR / (NPVNGFR + NPVNUFR)) Utility Fund = C * (NPVNUFR / (NPVNGFR + NPVNUFR)) 2) 3) 5 City of Saint John Capital Budget Policy Where: NPVNGFR = Net Present Value of Net General Fund Revenue NPVNUFR = Net Present Value of Net Utility Fund Revenue NGFR = PT + BP -IC - EX NGFR = Net General Fund Revenue PT = Property Tax Revenue to General Fund BP = Building Permit Fees Revenue IC = Incentives Given for The Project EX = Other Project Specific Expenses NUFR = WR EX + NI NUFR = Net Utility Fund Revenue WR = Water Billing Revenue (Fixed/Metered) EX = Other project specific expenses NI = Net Investment = New Utility Infrastructure Investment less Current Depreciated Value of Infrastructure I = Current Borrowing Rate C = Cost of the Project N = Life of Project NPV = Net Present Value of Net Revenue/Cost NGFR1 = Net General Fund Revenue in year 1, NGFR2 = Net General Fund Revenue in year 2 and so on up to life of the project NUFR1 = Net Utility Fund Revenue in year 1, NUFR2 = Net Utility Fund Revenue in year 2 and so on up to life of the project 6 City of Saint John Capital Budget Policy Example: 7 City of Saint John Debt Management Policy Title: Debt Management Policy Subject: General Fund Debt Management Category: Finance and Administrative Services Policy Policy No.: FAS- 006 M&C Report No.: 2019-167 Effective Date: Next Review Date: Area(s) this policy applies to: Cross Corporate Office Responsible for review of this Policy: Finance and Administrative Services Related Instruments: Policy Sponsors: Chief Financial Officer FAS-001 Asset Management Policy FAS-002 Investment Management Policy FAS-003 Reserves Policy FAS-004 Operating Budget Policy FAS-005 Capital Budget Policy Document Pages: This document consists of 9 pages. Revision History: Common Clerk's Annotation for Official Record Date of Passage of Current Framework: July 8, 2019 I certify that this Policy was adopted by Common Council as indicated above. ________________________ July 10, 2019 Common Clerk Date Date Created: Date Updated: Common Council Approval Contact: July 8, 2019 March 12, 2025 Date: July 8, 2019 Strategic Services 1 City of Saint John Debt Management Policy TABLE OF CONTENTS 1. POLICY STATEMENT ........................................................................................................ 3 2. DEFINITIONS .................................................................................................................... 3 3. ACCEPTABLE PURPOSES FOR DEBT ................................................................................. 4 4. DEBT LIMIT CITY OF SAINT JOHN ................................................................................. 5 5. DEBT LIMIT SAINT JOHN WATER .................................................................................. 6 6. DEBT ISSUANCE ............................................................................................................... 7 7. INTERNAL BORROWING .................................................................................................. 7 8. PAY AS YOU GO ............................................................................................................... 7 9. REPORTING ..................................................................................................................... 8 10. RESPONSIBILITIES .......................................................................................................... 8 2 City of Saint John Debt Management Policy 1. POLICY STATEMENT 1.1. The Debt Management Policy also applies to Saint John Water (Utility); 1.2. The Debt Management Policy is established to ensure that all debt is issued prudently and cost effectively in accordance with the Long Term Financial Plans of the City and Saint John Water; 1.3. The Debt Management policy objectives are as follows: The Organization obtains debt financing only when necessary; The Organization manages debt such that future financial flexibility is maintained; The Organization strategically issues debt based on sound financial planning. 1.4. The Capital Investment Plan (CIP) is essential to intelligent planning of debt issuance by prioritizing potential capital investment and potential sources of financing. 1.5. The organizations debt issuance and management procedures will comply with the following legislation where applicable: Province of New Brunswick Local Governance Act Province of New Brunswick Municipal Capital Borrowing Act Province of New Brunswick Municipal Debentures Act Province of New Brunswick Control of Municipalities Act Province of New Brunswick Financial Corporation Act 2. DEFINITIONS Sustainability - means meeting the needs of the present without compromising the ability of future generations to meet their own needs. Long Term Debt - means financing with a term over 10-30 years with municipal bonds through the Municipal Finance Corporation or capital leasing as defined by the Public Sector Accounting Standards. Inter-Generational Equity - means distributing the costs associated with capital investments across the generations which will be enjoying the benefits of the capital assets built today. Debt Term - the period of time during which debt payments are made. At the end of the debt term, the loan is paid in full. 3 City of Saint John Debt Management Policy Internal Financing - means financing for capital purchases from reserve funds as permitted in FAS-003 Reserves Policy. Pay-As-You Go Financing- means the use of operating funds for capital purchases as opposed to using debt or reserves. Organization the term is used to include the City and Saint John Water as one entity for the purpose of the policy unless specified otherwise. 3. ACCEPTABLE CONDITIONS FOR USE OF DEBT 3.1 The Organization will issue long-term debt solely for the purpose of financing the projects approved in the Capital Budget and the Capital Investment Plan (CIP); 3.2 Long term debt shall not be used to fund operating or maintenance costs or used as a tool balance the operating budget; 3.3 The Long Term Debt amortization period shall not exceed the life of the asset it is financing; 3.4 The Organization shall promote a balanced approach between maintaining an affordable debt level, maintaining infrastructure and accommodating growth by: 3.4.1 Utilizing this Policy in conjunction with the Asset Management Plan,FAS- 005 Capital Budget Policy, FAS-004 Operating Budget Policy and FAS-003 Reserves Policy. 3.4.2 Integrating debt issuance with the Capital Budgeting process todetermine the necessity, priority, and viability of the capital project. 3.4.3 Considering the Long Term Financial Plan and analyzing the tolerance or capacity to absorb and manage new debt given future priorities. 3.5 Debt will be structured to fairly distribute the costs over time, taking into consideration inter-generational equity. 3.6 The Organization may also issue debt on behalf of an Agency, Board or Commissions (ABC) under its control pursuant to Generally Accepted Accounting Principles to further the public purposes of the City. The City shall take appropriate steps to confirm the financial feasibility of the project, the financial solvency of the ABC, and 4 City of Saint John Debt Management Policy that the issuance of such debt is consistent with the policies set forth herein; 3.7 This Policy does not apply for the use of Short Term debt instruments. 4. DEBT LIMITS AND DEBT CAPACITY GENERAL FUND 4.1 The New Brunswick Local Governance Act stipulates that: 4.1.1 A local government shall not, in any one year, borrow for its current operations any money in excess of the sum represented by 4% of the budget of that local government for that year or $15K, whichever is greater. 4.1.1 A local government shall not, in any one year, borrow for capital expenditures any money in excess of the sum represented by 2% of the assessed value ofreal property in that local government. 4.1.2 The total amount of money borrowed by a local government for capital expenditures shall not exceed 6% of the assessed value of real property inthe local government. 4.2 The City's capacity to issue debt is directly related to Taxpayer's ability to service the payments required on the debt. Three key performance indicators will be benchmarked and measured, and the following debt limits shall be applicable: 4.2.1 Debt per Capita: This measurement can provide elected officials with a trend of overall debt outstanding by measuring how much debt the City has per citizen. General Fund Debt per Capita shall not exceed $1600; 4.2.2 Debt Service Ratio: This measurement allows elected officials to be aware of the amount of the current year's annual operating budget which is devoted to servicing debt. The General Fund Debt Service Ratio shall not exceed 12%; 4.2.3 Total Debt Outstanding as a Percentage of Operating Budget: This measurement identifies the percentage of annual operating revenues that would be required to extinguish the City's outstanding debt. The General Fund Total Debt Outstanding as a Percentage of Operating Budget shall not exceed 70%; 4.3 Additional debt is only permissible when existing debt is within these limits, the limits will be reviewed and updated on an annual basis; 5 City of Saint John Debt Management Policy 4.4 The City's General Fund target Debt Per Capita is $750 by 2032, the City's Debt Service Ratio Target is 6.5% by the year 2032 and the City's General Fund Target Debt Outstanding as a Percentage of Operating Budget is 30% by 2032. 4.5 Long Term Debt Term shall be in accordance with the Debt Management Plan. 5. DEBT LIMITS AND DEBT CAPACITY SAINT JOHN WATER 5.1 The New Brunswick Local Governance Act stipulates that: 5.1.1 A local government may borrow temporarily in each year for current expenditures in respect of the operation of a generation facility a sum or sums of money not exceeding 50% of the budgeted revenue for that year. 5.2 The capacity to issue debt is directly related to ratepayers ability to service the payments required on the debt. Two key performance indicators will be benchmarked and measured, and the following debt limits shall be applicable: 5.2.1 Debt Service Ratio: This measurement allows elected officials to be aware of the amount of the current year's annual operating budget which is devoted to servicing debt. The Utilities Fund Debt Service Ratio shall not exceed 15%. 5.2.2 Total Debt Outstanding as a Percentage of Operating Budget: This measurement identifies the percentage of annual operating revenues that would be required to extinguish the Saint John Water's outstanding debt.The Utility Fund Total Debt Outstanding as a Percentage of Operating Budgetshall be reduced to 100% by the year 2026 and shall not exceed by 100% then after unless there is a business case to substantiate the increase. 5.3 Additional debt is only permissible when existing debt is within these limits, the limits will be reviewed and updated on an annual basis; 5.4 Long Term Debt Term shall be in accordance with the Debt Management Plan. 6 City of Saint John Debt Management Policy 6. DEBT ISSUANCE 6.1 A resolution of Council is required for all new debt issues. 6.2 The debt issuance process generally follows the steps below: 6.2.1 Notice of motion: Council gives notice of intent to borrow after 30 days from the day of Council resolution; 6.2.2 After expiration of 30 days, Council authorizes staff to issue and sell to the New Brunswick Municipal Finance Corporation debentures at such terms and conditions recommended by the Corporation; 6.2.3 Application form filled out and submitted to the New Brunswick Municipal Finance Corporation; 6.2.4 New Brunswick Municipal Finance Corporation advises the City of theactual bond issue; and 6.2.5 Staff reports back to Council regarding terms of the issue, coupon rate, price, average yield and settlement date. 6.3 Debt is structured to fairly distribute the costs over time, taking into consideration intergenerational equity; 7. INTERNAL FINANCING 7.1 The Organization may use reserves as a source of funds for the internal financing of capital projects as approved by Council. Any borrowing from reserve funds shall comply with Policy FAS-003 Reserves Policy. 8. PAY-AS-YOU-GO FINANCING 8.1 The Organization will seek to gradually increase pay-as-you-go as an option for financing capital over time. Factors which favor pay-go financing include: 8.1.1 Asset Renewal Projects; 8.1.2 Assets with a useful life that is less than 10 years - for example,IT equipment and road maintenance; 8.1.3 Situations where additional debt could adversely impact the 7 City of Saint John Debt Management Policy financial health; 8.1.4 Situations where market conditions favour the use of cash rather than debt (for example, escalating interest rates) 9. REPORTING 9.1. The total debt outstanding, and total annual debt service payments will be reported in the annual consolidated financial Statements; 9.2. Key performance indicators for debt will be measured and tracked in the Annual Financial Health Report Card; 9.3. Long-term debt will be forecasted over the long term in a Debt Management Plan based on the Capital Investment Plan as part of the Long-Term Financial Plan. 10. ROLES AND RESPONSIBILTIES 10.1 Council shall: 10.1.1 Approve the Debt Management Policy; 10.1.2 Approve new debt issues; and 10.1.3 Approve budgets sufficient to provide for the timely payment of principal and interest on all debt. 10.2 Finance Committee shall: 10.2.1 Review borrowing requirements for alignment with the Long Term Financial Plans; and 10.2.2 Recommend to Council the approval of new debt management plan. 10.3 The Chief Financial Officer shall: 10.3.1 Review the policy annually in consideration to meeting the City's and debt management goals and submit required changes to the Finance Committee for recommendation to Common Council consideration and approval. 10.3.2 Assume primary responsibility for the debt management process; 8 City of Saint John Debt Management Policy 10.3.3 Determine the Ci available debt capacity and alignment with Long Term Financial Plans; 10.3.4 Provide for the issuance of debt at appropriate intervals and in reasonable amounts as required to fund approved capital expenditures; 10.3.5 Submit to Finance Committee and Council, all recommendations to issue debt; and 10.3.6 Ensure compliance with the principles and mandatory requirements contained in this policy. 9 March 19, 2025 General Fund and Utility Fund Finance Committee December 31, 2024, Unaudited Financial Results The City of Saint John Operating Fund by Service Area December 31, 2024 Unaudited 202420242023 BudgetActualActual $$$ Revenues Property Taxes150,579,477 150,579,477 142,105,410 PILT Adjustment - -64,323 Equalization & Unconditional Grant 13,773,578 13,773,578 15,321,432 Regional Services Grant 1,009,6401,009,6401,009,640 1,009,640546,630 Surplus 2nd Previous Year 2,335,8412,335,8412,335,841 2,335,8412,335,8412,335,841 1,753,145 Transfer from Operating Reserves 1,330,0001,330,0001,330,000 1,134,7581,134,7581,134,758161,700 Growth & Community Development Services 4,505,0634,505,0634,505,063 5,257,906 5,736,666 dddddd Public Safety Services 1,992,1131,992,1131,992,113 2,311,180 3,170,367 Public Works & Transportation Services 6,378,9706,378,9706,378,970 7,193,369 6,797,529 eeeeee Finance & Administrative Services 4,380,0004,380,0004,380,000 10,472,470 6,801,053 tttttt Corporate Services - -476,090 iiiiii Utilities & Infrastructure Services316,000316,000316,000295,717287,727 Saint John Energy Rebates 1,200,000 1,442,27679,339 dddddd Total Revenues 187,800,682 195,806,212 183,301,410 uuuuuu Expenditures Growth & Community Development ServicesGrowth & Community Development ServicesGrowth & Community Development Services 19,451,786 18,820,083 18,723,674 aaaaaa Public Works & Transportation ServicesPublic Works & Transportation ServicesPublic Works & Transportation Services 45,457,077 47,908,465 42,647,833 Public Safety Services 62,044,484 60,949,386 58,380,270 nnnnnn Strategic Services 8,610,100 7,737,365 7,315,033 Corporate Services 8,295,166 8,233,4988,016,146 Other Charges 36,584,607 41,907,497 41,110,309 UUUUUU Utilities & Infrastructure Services 7,357,462 7,613,3806,835,287 Total Expenditures 187,800,682 193,169,674 183,028,552 Surplus (Deficit)- 2,636,538 272,858 1 The City of Saint John Operating Fund by Service Area December 31, 2024 Unaudited 202420242023 BudgetActualActual $$$ Growth&CommunityServices Salaries 6,207,974 6,225,221 5,315,440 Goods & Services 13,243,812 12,594,862 13,408,234 TOTAL 19,451,786 18,820,083 18,723,674 PublicWorksandTransporationServices Salaries 17,490,50417,490,50417,490,504 17,660,93517,660,93517,660,935 16,412,316 Goods & Services 27,966,57327,966,57327,966,573 30,247,53030,247,53030,247,530 26,235,517 TOTAL 45,457,07745,457,07745,457,077 47,908,46547,908,46547,908,465 42,647,833 dddddddddddddddd PublicSafetyServices Salaries 50,274,34650,274,34650,274,346 49,012,496 46,858,773 eeeeeeeeeeeeeeee Goods & Services 11,770,13811,770,13811,770,138 11,936,890 11,521,497 tttttttttttttttt TOTAL 62,044,48462,044,48462,044,484 60,949,386 58,380,270 iiiiiiiiiiiiiiii StrategicServices Salaries 4,353,217 4,094,953 3,839,072 dddddddddddddddd Goods & Services 4,256,883 3,642,412 3,475,961 TOTAL 8,610,100 7,737,365 7,315,033 uuuuuuuuuuuuuuuu CorporateServices Salaries 5,740,434 5,728,085 5,221,102 aaaaaaaaaaaaaaaa Goods & Services 2,554,732 2,505,413 2,795,044 TOTAL 8,295,166 8,233,498 8,016,146 nnnnnnnnnnnnnnnn Utilities&InfrastructureSSSeeerrrvvviiiccceeesss Salaries 3,842,743 3,784,053 3,499,703 Goods & Services 3,514,719 3,829,327 3,335,584 UUUUUUUUUUUUUUUU TOTAL 7,357,462 7,613,380 6,835,287 OtherCharges Goods & Services 36,584,607 41,907,497 41,110,309 TOTAL 36,584,607 41,907,497 41,110,309 TOTALEXPENDITURES 187,800,682 193,169,674 183,028,552 2 The City of Saint John Operating Fund by Service Area December 31, 2024 Unaudited 202420242023 BudgetActualActual $$$ Revenues Property Taxes 150,579,477 150,579,477 142,105,410 PILT Adjustment - - 64,323 Equalization & Unconditional Grant 13,773,578 13,773,578 15,321,432 Regional Services Grant 1,009,640 1,009,640 546,630 Surplus 2nd Previous Year 2,335,8412,335,8412,335,841 2,335,841 1,753,145 Transfer from Operating Reserves 1,330,0001,330,0001,330,000 1,134,7581,134,7581,134,758 161,700 Growth & Community Development Services 4,505,0634,505,0634,505,063 5,257,9065,257,9065,257,906 5,736,666 dddddd Public Safety Services 1,992,1131,992,1131,992,113 2,311,180 3,170,367 Public Works & Transportation Services 6,378,9706,378,9706,378,970 7,193,369 6,797,529 Strategic Services 4,380,0004,380,0004,380,000 10,472,470 6,801,053 eeeeee Corporate Services --- - 476,090 tttttt iiiiii Utilities & Infrastructure Services 316,000316,000316,000 295,717 287,727 Saint John Energy Rebates 1,200,0001,200,0001,200,000 1,442,276 79,339 Total Revenues 187,800,682187,800,682187,800,682 195,806,212 183,301,410 dddddd Expenditures Growth & Community Development ServicesGrowth & Community Development ServicesGrowth & Community Development Services uuuuuu Growth & Community Planning ServicesGrowth & Community Planning ServicesGrowth & Community Planning Services 1,826,081 1,715,779 1,612,144 Development Services 240,600 - 200,000 aaaaaa Development EngineeringDevelopment EngineeringDevelopment Engineering 369,657 364,438 344,536 Community Development Community Development Community Development 783,062 754,126 526,216 nnnnnn Animal Control 109,250 105,112 100,310 Dangerous & Vacant BuildingsDangerous & Vacant BuildingsDangerous & Vacant Buildings 468,954 328,810 150,552 Minimum Property Standards 492,521 442,421 373,474 UUUUUU Heritage Conservation Service 202,480 196,394 199,905 Cultural Affairs 139,453 107,814 121,725 Other By-laws 297,303 286,006 238,564 Permitting & Inspection Services 1,412,306 1,411,067 1,357,842 Envision Saint John 3,087,500 3,243,635 3,054,227 Market Square 2,250,000 1,728,225 2,455,454 Saint John Trade & Convention Centre 317,066 377,023 321,313 Imperial Theatre 308,048 308,048 295,501 Saint John Aquatic Centre 421,418 495,607 520,820 Saint John Arts Centre 195,223 195,220 178,280 TD Station 491,949 492,293 587,411 Library 489,909 492,397 487,597 City Market 1,188,448 1,326,952 1,189,487 Arts & Culture Board 70,000 47,190 58,992 Public Arts Maintenance 16,000 - 19,315 3 The City of Saint John Operating Fund by Service Area December 31, 2024 Unaudited 202420242023 BudgetActualActual $$$ Remembrance Day Ceremonies 3,500 - 8,988 New Years & Canada Day Celebrations 50,000 68,826 33,076 PRO Kids 175,057 133,027 80,653 Succeed & Stay 165,118 121,909 115,138 Local Immigration Partnership 93,785 108,297 90,643 Carleton Community Centre 190,700190,700190,700 190,313 187,500 Loch Lomond Community Centre 45,00045,00045,000 45,000 45,000 North End Community Centre 190,313190,313190,313 190,313190,313190,313 187,500 Recreation Programming 720,239720,239720,239 656,048 670,925 dddddd Neighbourhood Development 172,000172,000172,000 150,000 172,000 YMCA - Contracted Services 157,560157,560157,560 153,265 136,932 eeeeee Boys & Girls - Contracted Services 145,887145,887145,887 142,050 139,951 tttttt Unspecified Grants 284,000284,000284,000 289,000 215,710 iiiiii Lifeguards 199,410199,410199,410 207,957 197,595 Play SJ 45,000 26,317 15,169 dddddd Lord Beaverbrook Rink 167,764 160,854 183,712 Regional Services Commission 343,299 358,248 180,197 uuuuuu Growth Reserve Fund 350,000 691,756 350,000 Community Improvement ReservesCommunity Improvement ReservesCommunity Improvement Reserves 558,266 - - aaaaaa Affordable Housing 217,660 215,664 1,319,321 Housing Accelerator FundHousing Accelerator FundHousing Accelerator Fund - 492,683 - nnnnnn Total Growth & Community Development ServicesTotal Growth & Community Development ServicesTotal Growth & Community Development Services 19,451,786 18,820,083 18,723,674 Public Safety Services Fire Rescue and Suppression ServiceFire Rescue and Suppression ServiceFire Rescue and Suppression Service 24,270,385 25,000,351 23,379,121 UUUUUU Fire Training 10,437 447 - Technical Rescue Response 52,120 42,352 42,165 Hazardous Materials 74,775 69,139 61,805 Fire Prevention 930,493 862,570 855,788 Fire Investigation 68,548 70,037 63,709 Emergency Management Service 356,233 225,209 223,342 Water Supply and Hydrants 2,500,000 2,317,033 2,588,571 Public Safety Communications 3,184,016 2,838,288 2,831,516 Street Lighting 1,060,000 1,077,483 951,587 Saint John Board of Police Commissioners 29,537,477 28,446,478 27,382,664 Total Public Safety Services 62,044,484 60,949,386 58,380,270 4 The City of Saint John Operating Fund by Service Area December 31, 2024 Unaudited 202420242023 BudgetActualActual $$$ Public Works & Transportation Services Snow Control Streets 5,592,712 5,776,919 4,912,739 Street Cleaning 1,641,956 2,730,604 2,093,928 Utility Cuts 1,506,716 1,309,996 1,036,191 Street Services - Surface Maintenance 8,445,799 8,363,601 7,396,588 Snow Control Sidewalk 1,158,9261,158,9261,158,926 1,147,936 1,102,581 Sidewalk Maintenance 913,129913,129913,129 592,387592,387592,387 536,537 Pedestrian & Traffic Management Service 2,555,8632,555,8632,555,863 3,093,7473,093,7473,093,747 2,403,960 Solid Waste Management 4,082,7084,082,7084,082,708 4,255,383 4,574,813 Landscape - Parks & Open Spaces 2,182,3032,182,3032,182,303 2,666,971 2,325,340 Rockwood Park 527,829527,829527,829 585,149 278,391 Urban Forestry 414,446414,446414,446 309,011 258,265 Saint John Horticultural Association 60,00060,00060,000 60,000 50,000 Arena Operation and Maintenance 1,501,5051,501,5051,501,505 1,629,275 1,448,509 Sportsfield Operation and Maintenance 1,294,245 1,401,470 1,283,150 Other Facility Operation and MaintenanceOther Facility Operation and MaintenanceOther Facility Operation and Maintenance 461,846 365,309 379,490 Parking Administration 953,960 889,384 826,100 Transit Debt 1,609,000 1,624,131 1,745,331 Transit Subsidy 6,651,541 7,104,058 6,313,874 Fleet Stockroom 363,331 363,457 321,817 Stormwater Rural 1,799,191 2,073,407 1,972,749 Peel Plaza 405,697 329,701 125,772 Market Square Parking 154,280 234,760 229,198 Off Street Parking 1,180,094 1,001,809 1,032,511 Total Public Works & Transportation Services 45,457,077 47,908,465 42,647,833 Strategic Services Finance 1,484,128 1,276,837 1,243,463 Assessment 1,767,493 1,767,493 1,622,340 Supply Chain Management 446,623 421,318 441,954 Information Technology 3,782,930 3,199,587 3,121,093 Corporate Planning 337,961 369,916 232,653 Insurance 215,965 157,653 114,709 Liability Insurance 575,000 544,561 538,821 Total Strategic Services 8,610,100 7,737,365 7,315,033 5 The City of Saint John Operating Fund by Service Area December 31, 2024 Unaudited 202420242023 BudgetActualActual $$$ Corporate Services City Manager 759,585 860,627 1,013,075 Mayor's Office 161,579 169,618 189,310 Common Council 593,458 560,376 622,154 Common Clerk 742,413 728,695 667,748 Human Resources 2,379,4252,379,4252,379,425 2,452,233 2,522,776 Legal Department 1,150,3161,150,3161,150,316 1,450,4211,450,4211,450,421 1,294,328 Real Estate 186,004186,004186,004 204,284204,284204,284 175,872 Saint John Industrial Parks 583,501583,501583,501 253,522 121,628 ddddddddddd External Relations 217,937217,937217,937 204,466 181,719 Corporate Communications 527,882527,882527,882 447,746 406,121 eeeeeeeeeee Customer Service 993,066993,066993,066 901,510 821,415 ttttttttttt Total Corporate Services 8,295,1668,295,1668,295,166 8,233,498 8,016,146 iiiiiiiiiii Utilities & Infrastructure Services Engineering 1,388,104 1,301,871 1,118,992 ddddddddddd Carpenter Shop 401,162 351,046 356,790 Facilities Management 1,633,135 1,632,216 1,571,081 uuuuuuuuuuu City Hall Building 1,021,696 1,245,381 1,011,058 GIS 442,180 437,857 395,588 aaaaaaaaaaa Stockroom 220,396 179,477 256,737 Stormwater Urban 2,250,789 2,465,532 2,125,041 nnnnnnnnnnn Total Utilities & Infrastructure ServicesTotal Utilities & Infrastructure ServicesTotal Utilities & Infrastructure Services 7,357,462 7,613,380 6,835,287 Other Charges Fiscal Charges 15,420,433 15,390,295 15,657,705 UUUUUUUUUUU Landfill Closure 300,000 300,000 300,000 Special Pension Contributions 10,225,000 10,230,416 9,345,794 Reserves 3,790,721 8,751,543 8,008,449 Other Charges 48,453 435,242 2,148,361 Capital from Operating 6,800,000 6,800,000 5,650,000 Total Other Charges 36,584,607 41,907,497 41,110,309 Total Expenditures 187,800,682 193,169,674 183,028,552 Surplus (Deficit) - 2,636,538 272,858 6 SaintJohnWater 2024Water&SewerageOperatingBudget December31,2024 Unaudited 202420242023 BudgetActualsActuals Revenues FlatRateAccounts22,250,00022,174,22322,233,613 MeterRateAccounts15,732,05718,304,67415,991,606 IndustrialRawWaterAccounts7,819,4128,625,8987,417,166 FireProtectionLevy2,500,0002,317,0332,588,571 StormSewerLevy945,0001,087,2341,056,155 OtherRevenues1,455,22114,513,8382,135,992 PreviousYear'sSurplus737,731737,476680,796 TransferfromReserves750,0001,637,804 TotalRevenues52,189,42152,189,42152,189,42169,398,18069,398,18069,398,18052,103,899 Expenditures DrinkingWaterService WatershedManagement676,220676,220676,220745,556431,804 ddddddddd WaterTreatment9,122,3649,122,3649,122,3648,911,4538,659,767 WaterPumping&Storage1,244,6111,244,6111,244,6111,327,6901,318,078 eeeeeeeee Transmission&Distribution4,491,7834,491,7834,491,7835,245,6074,863,952 ttttttttt CustomerMetering712,793712,793712,793761,227727,925 iiiiiiiii InternalCharges465,000465,000465,000547,893400,662 OtherCharges562,486574,206589,103 ddddddddd DebtServicing3,676,7743,642,8733,739,675 TransfertoOperating/CapitalOperating/CapitalOperating/CapitalReserveReserveReserve12,549,2901,978,600 uuuuuuuuu CapitalfromOperating1,715,6221,715,6222,135,000 TotalDrinkingWaterServiceServiceService22,667,65336,021,41724,844,566 aaaaaaaaa WastewaterServiceee WasterwaterPumpingPumpingPumping3,314,7634,008,6053,706,086 WastewaterCollectionCollectionCollection3,110,3443,450,9493,123,635 nnnnnnnnn WastewaterTreatmentTreatmentTreatment6,225,2065,452,5915,318,741 InternalCharges465,000402,500431,072 UUUUUUUUU OtherCharges562,486574,206589,103 DebtServicing2,959,5982,951,3283,012,356 CapitalfromOperating3,825,1343,825,1342,732,300 TotalWastewaterServices20,462,53120,665,31318,913,293 InfrastructureManagement EngineeringServices837,530791,820738,948 TotalInfrastructureManagement837,530791,820738,948 SaintJohnWater 2024Water&SewerageOperatingBudget December31,2024 Unaudited IndustrialWaterService WatershedManagement695,929611,982461,026 WaterPumping&Transmission2,869,2754,089,6622,220,223 CustomerMetering269,463132,89859,237 DebtServicing1,796,5221,846,5701,846,586 TransfertoCapitalReserves836,6771,025,544980,000 TransfertoOperatingReserve1,118,6311,234,810964,497 CapitalfromOperating635,210635,210767,708 TotalIndustrialWaterService8,221,7079,576,6767,299,277 4 TotalExpenditures52,189,42167,055,22651,796,08 Surplus(Deficit)2,342,9542,342,9542,342,954307,815 ddddddddddd SaintJohnWater 2024Water&SewerageOperatingBudget eeeeeeeeeee ttttttttttt SalariesandGoods&Services iiiiiiiiiii 20242024202420242023 BBBuuudddgggetActualsActuals ddddddddddd DrinkingWaterService WagesandBenefits3,682,6074,202,2143,933,206 uuuuuuuuuuu Goods&Services18,985,04631,819,20320,911,360 Total 22,667,65336,021,41724,844,566 WastewaterService aaaaaaaaaaa WagesandBenefits4,501,5944,261,5304,131,535 Goods&Services15,960,93716,403,78314,781,758 nnnnnnnnnnn Total 20,462,53120,665,31318,913,293 InfrastructureManagement WagesandBenefits591,394572,070541,605 UUUUUUUUUUU Goods&Services246,136219,750197,343 Total 837,530791,820738,948 IndustrialWaterService WagesandBenefits1,193,6791,250,407790,204 Goods&Services7,028,0288,326,2696,509,073 Total 8,221,7079,576,6767,299,277 S52,189,42167,055,22651,796,084 TOTALEXPENDITURE