2004-11-01_Minutes--Procès-verbal
November 1, 2004
Minutes of the Portion of the Committee of the Whole Meeting Open to the Public
Monday, November 1, 2004, 5:00 o'clock p.m.
8th Floor Boardroom, City Hall
Present:
Mayor McFarlane,
Deputy Mayor Hooton and Councillors Chang, Chase, Court, Farren, Ferguson,
McGuire, Tait, Titus and White
- and -
1. Totten, City Manager; J. Nugent, City Solicitor; A. Beckett, Commissioner of
Finance and Corporate Services; P. Groody, Commissioner of Municipal
Operations; J. Baird, Commissioner of Planning and Development; B. Edwards,
Commissioner of Buildings and Inspection Services; A. Bodechon, Chief of
Police; R. Simonds, Fire Chief; B. Morrison, Director of Leisure Services; S.
Galbraith, Director of Works; P. Woods, Common Clerk and Deputy City
Manager and E. Gormley, Assistant Common Clerk.
1. MeetinQ Called To Order
The Mayor called the Committee of the Whole meeting to order.
2. Discussion of Confidential Matters
On motion of Deputy Mayor Hooton
Seconded by Councillor White
RESOLVED that the public be excluded from the meeting for the
duration of the discussion on the following matter(s): Nominating Committee 10.2(4)(b);
Appointments - Jeux Canada Games 10.2(4)(b), and Legal Proceedings 10.2(4)(g).
Question being taken, the motion was carried.
Common Clerk
Record Pursuant to Section 10.2(4)
The meeting of the Committee of the Whole of Common Council held on Monday,
November 1, 2004 was closed to the public pursuant to Section 10.2(4) of the
Municipalities Act during the Committee's discussion of the following matter(s):
Nominating Committee 10.2(4)(b); Appointments - Jeux Canada Games 10.2(4)(b), and
Legal Proceedings 10.2(4)(g).
The meeting of November 1,2004, re-convened in public at 6:00 p.m. for the following
items.
(Councillor Farren withdrew from the meeting.)
November 1, 2004
2004-94
5. Conflict of Interest
Consideration was given to a report from the City Solicitor in which he advised of a
conflict of interest which exists for members of senior staff who are also members of the
Board of Trustees of the City's Pension Plan. Citing the Municipalities Act, he advised
Council that he has filed a Disclosure of Interest with the Common Clerk's office, and
that other members of staff may do the same noting that Section 90.8(2) of the Act
provides that a committee or a council may seek and receive the advice of a senior
officer on a matter with respect to which he has a conflict of interest if it requests such
advice with knowledge of the conflict. He added that while that might occur inferentially,
he recommended a more formalized approach involving a resolution of Council which
acknowledges the conflict and notes that the advice is sought with that knowledge. Mr.
Nugent suggested that the latter is also an arrangement which he would suggest the
Committee or Council discuss with the senior officer in question in advance of such a
resolution.
Discussion followed with the City Solicitor assuring Council that the conflict is not in
relation to senior staff's membership on the Board of Trustees, rather it is related to
advice that may be requested of staff. Mr. Nugent advised that the staff involved is
prohibited by the Municipalities Act from giving advice without filing the declaration of
interest, and that Council can choose to proceed without that advice or seek the advice
after a resolution is passed acknowledging the conflict. He reminded Council that it can
also decide to follow the staff's advice or not.
The Common Clerk advised that declarations have also been filed by the City Manager,
the Commissioner of Finance and the Deputy City Manager/Common Clerk with the
Clerk's office.
(Councillor Farren re-entered the meeting.)
On motion of Councillor Tait
Seconded by Councillor McGuire
RESOLVED that Common Council acknowledge the disclosures
of interest of the City Solicitor, the City Manager, the Commissioner of Finance and the
Deputy City Manager/Common Clerk as it relates to The City of Saint John Pension
Plan, and further requests their advice in this regard.
Question being taken, the motion was carried.
6. Update - City of Saint John Pension Plan
The City Manager introduced the presentation on The City of Saint John Employee
Pension Plan, noting that Mr. Beckett would be delivering information on the Plan's
governance, the investment process, the plan funding, legislative requirements and
options being considered. He distributed copies of The City of Saint John Pension Act
and advised that the City's plan is 2% per year based on the highest three year earnings
which is similar to many other plans. He stressed that the present financial problems
with the plan is not something that happened over night, but has been an issue for
several years. He suggested that the Board of Trustees be requested to explore options
for a solution to the plan's issue and report to Council.
November 1, 2004
Page 95
Referring to an electronic slide presentation, Mr. Beckett explained that the terms and
conditions of the City's Pension Plan are set out in the provincial legislation, "City of
Saint John Pension Act", with the City being the Plan sponsor with the overall
administration of the Act being the responsibility of a 12 member Board of Trustees. He
stated the mission of the Pension Fund and described the investment process noting
that the target return for the plan is 8%, with employees contributing 8.5% and the City
7.5%. He advised that according to the Income Tax Act the maximum contribution for
employees is 9% with provision for an increase if it is used toward the unfunded liability.
Mr. Beckett listed some basic statistics of the Pension Plan regarding membership,
noting trends over the past several years. He reviewed the 3 key measures derived
from the Actuarial Review as of December 31, 2003: the going concern valuation - a
deficit of $45,344,500., solvency valuation - a deficit of $91,085,400. and current service
cost - 16.6% of payroll. He explained that in past years when there was a surplus
available in the Plan, benefits were increased, and that given projected declines in the
investment markets when the 2000 valuation was completed, it was determined that the
surplus should be retained in the plan.
Mr. Beckett listed the impact of two years of sustained declines in the world's stock
markets on the City's Pension Plan, with the asset value of the plan at December 31,
2003 being $257,233,059. He listed options being considered to correct the deficit
mentioned above as follows:
- Decrease benefits provided under the Pension Plan
- Increase contributions into the Plan
- Some combination of the above options
- Seek changes to or exemption from legislated funding requirements
Referring to the Pension Act, Mr. Beckett advised that enhancements already made to
the plan, are not able to be eliminated, but changes in benefits can be considered for the
future, adding that it is not an easy process to make changes as it would require a
change in legislation.
On motion of Deputy Mayor Hooton
Seconded by Councillor White
RESOLVED that the Board of Trustees of the Saint John Pension
Plan identify and evaluate alternatives to address the unfunded liability and report back
to Council as soon as possible.
Question being taken, the motion was carried.
7. Capital Budget - General Fund
This item was deferred to the Committee of the Whole Meeting on Saturday, November
6, 2004.
Common Clerk