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2017-04-11 Finance Committee Minutes - Open SessionFinance Committee Meeting Open Session April 11, 2017 MINUTES - OPEN SESSION FINANCE COMMITTEE MEETING APRIL 11, 2017 AT 5:00 PM 8th FLOOR BOARDROOM, CITY HALL Present: Councillor D. Merrithew Councillor D. Reardon Councillor G. Sullivan Absent: Mayor D. Darling Councillor S. Casey Councillor G. Norton Also Present: Commissioner of Finance and Treasurer K. Fudge Deputy Commissioner Finance and Administrative Services I Comptroller C. Graham Commissioner Saint John Water B. McGovern Commissioner of Transportation & Environment Services M. Assistant Comptroller Finance C. Lavigne Continuous Improvement Officer S. Ranson Administrative Assistant K. Tibbits 1. Meeting Called To Order Fogan Hugenholtz Councillor Merrithew called the Finance Committee open session meeting to order. 1.1 Approval of Minutes 1.1.1 Minutes of January 30, 2017 1.1.2 Minutes of February 28. 2017 Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the minutes of January 30th, 2017 and February 28th, 2017, be received for information. MOTION CARRIED. 1.2 Asset Management Roadma (Mr. Samir Yammine, Energy Manager, and Mr. Hans Arisz of RV Anderson entered the meeting) Mr. Yammine stated that the first phase of the project has been completed. The roadmap will provide comprehensive detail on service levels and the effective management of assets. It will allow for more effective decision making to provide an optimal level of service, offer the benefit of being able to quantitatively defend decisions, and provide for transparency. Referring to the submitted report, Mr. Arisz commented on the purpose and vision of the asset management plan. For successful implementation, support is required from Council, senior leadership and staff. Mr. Arisz commented on how the asset management plan aligns with the City's operations and the roll out of the plan. Implementation of the program will occur in the second phase and will assist in making more informed decisions which is a main benefit of an asset management plan. Finance Committee Meeting Open Session April 11, 2017 Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the submitted presentation entitled, "Saint John Asset Management Road Map Project Update", be received for information. MOTION CARRIED. (Mr. Yammine and Mr. Arisz withdrew from the meeting) 1.3 Long -Term Financial Planning Framework Mr. Fudge stated that the development of a long-term financial plan is slated for 2018. It provides a tool for financial forecasting by identifying future financial challenges and opportunities and identifying strategies to secure financial stability. A long term financial plan will address the delivery of the appropriate level of services, cost containment strategies, infrastructure considerations and be aligned with the City's strategic vision. It will include strategies to mitigate financial shocks and protect the tax payer from unexpected tax increases or cuts to services. Components of a Long -Term Financial Plan: • Environmental analysis — general economic trends and local issues, analyze potential impacts to the financial position in terms of employment rates, tax rates, affordability of services, demographic shifts, changes to legislation. • Revenue/expenditure forecast based on the current position — provide long range projection (10 to 15 years) to reveal gaps and determine the level of services to be provided. • Debt analysis - describes current and anticipated debt levels, assesses the sustainability of the debt burden, and examines the capacity to take on additional debt with respect to infrastructure needs through the asset management plan. • Financial Balance analysis — identify gaps, estimate future financial position, uncover potential problems by incorporating strategies to describe how to address those imbalances. • Long term capital investment plan to align with the asset management plan. • Suite of polices that align with the long-term financial plan. (Mr. Fogan withdrew from the meeting) This plan will provide for a stable tax rate over the long term by identifying ways for the City to take mitigating actions in advance by being proactive rather than adjusting the tax rate annually or having to reduce services. It encourages mindful decisions and awareness of the long term impact of today's decisions. Sustainability does not necessarily infer current service levels but a strategy where a planned level of service can be maintained over the long term. Reserve funds are not meant to help with structural imbalances but are intended as risk mitigation reserves to absorb fluctuations that cannot be predicted. Service levels are set based on what the community and council wants and the degree it can be funded. Affordability is a key consideration in a long-term financial plan. Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the submitted presentation entitled, "Long Term Financial Planning Framework", be received for information. MOTION CARRIED. 1.4 2018 Budget Timeline Mr. Fudge commented on the advantages of early completion of the capital budget. Construction companies are getting ready to bid on a number of projects and there are economies of scale through that process by getting tenders out early, prior to March 1St Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the report entitled, "2018 Proposed Budget Schedule", be received for information. MOTION CARRIED. Finance Committee Meeting Open Session April 11, 2017 1.5 Account Receivable Update Ms. Graham reviewed the submitted report entitled, "Water and Sewerage Account Receivable Update March 2017." Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that the presentation entitled, "Water and Sewerage Account Receivable Update March 2017", be received for information. MOTION CARRIED. Adjournment Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the Finance Committee open session meeting held on Tuesday, April 11, 2017 be adjourned. MOTION CARRIED. The Finance Committee meeting held on April 11, 2017 was adjourned at 6:55 p.m.