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2017-01-30 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session January 30, 2017 MINUTES - OPEN SESSION FINANCE COMMITTEE MEETING JANUARY 30, 2017 AT 4:30 PM 8t" FLOOR BOARDROOM, CITY HALL Present: Mayor D. Darling Councillor D. Merrithew Councillor D. Reardon Councillor G. Sullivan Councillor S. Casey Absent: Councillor G. Norton Also Present: City Manager J. Trail Deputy City Manager N. Jacobsen Commissioner of Finance and Treasurer K. Fudge Comptroller C. Graham Senior Manager Financial Planning H. Nguyen Commissioner Transportation & Environment Services M. Hugenholtz Commissioner Saint John Water B. McGovern Commissioner Growth and Community Development J. Hamilton Director Corporate Performance/Information Officer S. Rackley Roach Assistant Comptroller Finance & Administrative Services C. Lavigne Continuous Improvement B. Neal Continuous Improvement T. McGrath Deputy Commissioner Finance & Administrative Services I. Fogan Fire Chief K. Clifford Administrative Assistant K. Tibbits 1. Meeting Called To Order Councillor Merrithew called the Finance Committee open session meeting to order. 1.1 Approval of Minutes 1.1.1 Minutes of November 17, 2016 Moved by Mayor Darling, seconded by Councillor Sullivan: RESOLVED that the minutes of November 17, 2016 be approved. MOTION CARRIED. 1.1.2 Minutes of December 8, 2016 Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the minutes of December 8, 2016 be approved. Finance Committee Meeting Open Session January 30, 2017 ►l[01111[0►[4Milk]k]1N91 1.2 Asset Management Update (Mr. Samir Yammine and Mr. Hans Arisz of RV Anderson entered the meeting) Mr. Fudge explained that asset management is an integrated process for managing municipal infrastructure to support fiscally responsible service delivery, with a focus on the strategic aspect of financial planning. Mr. Yammine and Mr. Arisz reviewed the submitted presentation. Mr. Yammine stressed the importance of an asset management plan to ensure sustainability into the future, adding that the foundation of asset management is an understanding of the current state of the City's infrastructure. The involvement for Council is to approve the policy and ingrain it in the operating culture of the City. Mayor Darling summarized by stating that the asset management plan will outline, based on criteria, the assets that need to be reinvested in and the capital required in the short and long term. It will be a benefit when dealing with the federal and provincial governments in terms of alignment with government plans and initiatives. It will allow council to manage the budget more efficiently and assist in identifying council priorities and in making decisions. Mr. Fudge stated that staff will seek feedback from the senior leadership team and a final policy statement will be presented to the Finance Committee for review prior to presenting it to Council for adoption. Moved by Mayor Darling, seconded by Councillor Reardon: RESOLVED that item 1.2 Asset Management Update be received for information. MA • •► WATIffiff (Mr. Yammine and Mr. Arisz withdrew from the meeting) 1.3 Long -Term Financial Planni Mr. Fudge stated that once the assets have been determined and service levels identified, the asset management plan will identify the amount required for re -investment in those assets. A long term financial plan is a combination of planning, analysis and forecasting. It is a strategic process that will identify future financial challenges and opportunities, correlated with service levels to the public. The annual budgets should link strategically with the long term financial plan to provide consistent service levels to the community as well as allow the city to anticipate financial shocks and prevent unexpected tax increases and/or cuts to services. It is the financial link to all of the City's strategic plans to ensure those plans can be sustained over the long term. Ms. Nguyen reviewed the submitted presentation entitled, "Long -Term Financial Planning". She commented on the benefits of a long-term financial plan and the steps involved in preparing such a plan. Mr. Trail noted that staff shares the sense of urgency around advancing long term financial planning but suggested that the first step is the establishment of an asset management plan, noting that there are long term financial elements included in the asset management plan. Moved by Mayor Darling, seconded by Councillor Reardon: RESOLVED that item 1.3 Long -Term Financial Planning be received for information. MOTION CARRIED. 1.4 Continuous Improvement Update Ms. Rackley -Roach provided a summary of the 2016 results with respect to the Cycle I projects noting that savings are estimated at $470,000. She commented on the City hall project and that it was determined the amount of space could be reduced by approximately 27,000 square feet, with estimated savings of $500,000. Finance Committee Meeting Open Session January 30, 2017 Ms. Rackley -Roach commented on the Cycle II projects currently being undertaken by the Continuous Improvement team. The cost savings on these projects are different from the Phase 1 projects with overall savings projected at approximately $65,000, with an emphasis on productivity and service improvements. Ms. Rackley Roach stated that a target of $2M has been set for 2017 which is cumulative by 2018. The 2016 projects are estimated at approximately $500,000, the City Hall project at $500,000, and the 2017 target is $1M. Mr. Trail noted that a $1M target is very ambitious and that the team has tried to identify projects that are reasonably achievable, with a stretched target. The City is challenged to find approximately $3M to $4M per year through a combination of revenue, growth and cost savings. It is important to integrate cost savings into the culture of the overall organization. Mr. Neal and Mr. McGrath, Continuous Improvement Team, commented on the Sidewalk Winter Maintenance Coordination project and the process undertaken by the team with the goal of increasing efficiency and improving the service. Moved by Councillor Reardon, seconded by Mayor Darling: RESOLVED that item 1.4 Continuous Improvement Update be received for information. MOTION CARRIED. 1.5 Water and Sewerage Accounts Receivables Update — December 2016 Ms. Graham commented on the submitted report, "Water and Sewerage Accounts Receivables — December 2016". The accounts receivable amount is approximately $400,000 less than it was a year ago at this time. Collection efforts continue to be successful. Payment schedules have been set up with approximately 35% of the outstanding balances and negotiated payment plans for another $300,000. The City continues to work with its customers to keep accounts up to date. Moved by Councillor Reardon, seconded by Councillor Casey: RESOLVED that item 1.5 Water and Sewerage Accounts Receivable Update — December 2016 be received for information. MOTION CARRIED. Adjournment Moved by Councillor Reardon, seconded by Mayor Darling: RESOLVED that the Finance Committee open session meeting held on Monday, January 30, 2017 be adjourned. MOTION CARRIED. The Finance Committee meeting held on January 30, 2017 was adjourned at 6:35 p.m.