2006-07-04_Supplemental Agenda Packet--Dossier de l'ordre du jour supplémentaire
City of Saint John
Common Council Meeting
Tuesday, July 4 2006
Common Council Chamber
Supplemental Agenda
11.5 Cancellation of Digby Ferry Service (Councillor Court)
11.6 Blasting in Red Head area (Councillor Court)
12.0 Report from Committee of the Whole - Duty to Act in the Best Interests of the
Citizens
12.1 (a) 2006 Interim Financial Operating Results
City of Saint John
Seance du conseil communal
Le mardi 4 juillet 2006
Salle du conseil communal
L'ordre du jour supplementaire
11.5 Annulation du service du transbordeur assurant la navette entre Digby et Saint
John (Conseiller Court)
11.6 Dynamitage dans Ie secteur Red Head (Conseiller Court)
12.0 Rapport presente par Ie comite plenier relatif a I'obligation d'agir dans Ie meilleur
interet des citoyens.
12.1 (a) Bilan financier du budget d'exploitation interirnaire 2006
. \ \.5
P.O. Box/C.P. 1971
Saint John, NB/N.-B.
Canada E2L 4L 1
www.saintjohn.ca
The City of Saint John
July 4, 2006
Mayor McFarlane and Councillors
Your Worship and Councillors:
Friday's announcement by Bay Ferries Ltd. that the Digby Ferry service will be
cancelled in the fall is a devastating blow to our tourism industry and local
economy. Most important of all is the loss of 130 well paying jobs for people
living in both Saint John and Digby. Using a multiplier effect of four, this means
over 500 families will be affected by this cancellation. This in all likelihood will
result in an out migration of more of our skilled workers in search of replacement
work.
Saint John cannot afford to lose this important part of it's transportation
infrastructure. The tourism potential and economic spinoff that will be lost will be
a major backward step for both Saint John and Digby. This service was an
important reason for tourists to travel to Saint John and to return to Saint John
after a visit to Nova Scotia. The movement of goods and services could result in
companies relocating to other areas as a result of a loss of this service. If Saint
John is to remain competitive it cannot afford to lose any part of it's transportation
system. We have already lost our VIA rail service and our airport is struggling to
attract new carriers. We must put Saint John back on both the political and
tourism maps to show we are a City moving forward not backward.
Therefore, this issue must have a priority status. This Council along with our
Mayor, MLA's, Enterprise Saint John and the Board of Trade must take a
proactive approach to ensure that the Digby service is maintained, if not, our
future growth is at risk.
- 2 -
I move that a special committee be formed headed by our Mayor to work with
Bay Ferries Ltd. to seek a resolve resulting in the retention of the Digby ferry
service.
Respectfully submitted
d1-- {!J
Ivan Court
Councillor
\\.l9
P.O. Box/C.P. 1971
Saint John, NB/N.-B.
Canada E2L 4L1
www.saintjohn.ca
The City of Saint John
July 4, 2006
Mayor McFarlane and Councillors
Your Worship and Councillors:
Recent blasting in the Red Head area resulted in the loss of power for many
homeowners on the eastern section of our City. The size of the blast and the
resulting power outage are of major concern to most residents. Residents have
contacted me by phone and some spoke to me at the Mispec Canada Day
Celebrations. The effects of the blast included large boulders being sent flying
into the waters off the coast of Mispec Road, major vibrations felt great distances
away, the power failure and a great fear by many residents.
Mr. Edwards will remember a similar type of blast that occurred in the backland
area of Acamac. If we do not have regulations in place to control the size of a
blast, the time and weather conditions appropriate for a blast, the requirement of
a preblast survey, and stiff fines for illegal blasting, what protection will our
homeowners have? This recent event clearly illustrates the concerns of
homeowners in all areas of our City where blasting takes place and the need for
regulations within our City boundaries.
I move that our Building Inspector report back to Council with a full report on this
incident and further what his position is on establishing regulations for blasting
within our City limits.
Respectfully submitted
~&
I
IVan Court
Councillor
rJ
)1 \
'0
City Soli!:iror's Office
Bureau de l'avocar municipal
P.O. Box/C.P. 1971
Saint John. NB/r\.-B.
Canada E2L 4L1
www.saintjohn.ca
Section 10.2(4)(f)
The Ciry of Saml lohn
LEGAL SESSION
June 28, 2006
Common Council of
The City of Saint John
Your Worship and Councillors:
Re: Duty to act in the best interests of the Citizens
This opinion letter has as its impetus remarks made by Councillor Ferguson at
the three most recent meetings of Common Council held on May 23, June 5
and June 19, 2006. Its purpose is to advise of the duties arising as a result.
The substance and tone of those remarks is captured I believe in the following
excerpts:
"There are errors and differences in the financial statements and there
is no referenced explanation or footnote in the financial statements.
(May 23/06)
The early retirement program cost the City's Pension Plan far more
than what was reported and those costs are being passed onto the
taxpayer. .... Independent advice Fee from management, free .{i'om
Common Council and free from the Pension Board has not been
provided. Your Worship. I now. final~v, have the documentation to
show this. As a member of Common Council J am prepared to share
this with m.v Council colleagues and the public at large and I will not
accept thesefinancial statements. Thank you. (May 23/06)
I'")
... I....
Common Council
June 29. 2006
Clly SOhCIlN
Page ~
Re: Duty to act in best interest of Citizens
With respect to this independent review [of Pension Plan] Your
Worship. I hope the situation in Saint John is not as bad as what is
happening in San Diego, however, we won't know until we have a fZill
and complete independent examination. (June 5/06)
I'll be very clear. Morneau Sobeco is not independent with respect to
being third party independent according to industry standards. That's
it. It's that simple. I think the taxpayers deserve to have this third
party independence. There's a lot of different stories. J want a third
party independent explanation. (June 19/06)
I assure you Your Worship and with all due respect these attempts to
sweep any solutions under the huge Pension Plan under the carpet will
not last forever. Many employees and professional people are coming
fon1/ard with solid information and revealing details. Your Worship. ..
(June 19/06)
The foregoing share a common feature in that they were and remam
unaccompanied by meaningful supporting information:
. No identification of exactly what the Councillor believes are the
"errors and d~fferences in the financial statements" has been provided
to Council;
. No basis for his asserting that the cost to the Pension Plan of the last
Early Retirement Program was underreported. has been provided to
Council;
. No explanation of his reason for referring, while speaking of the
administration of the City's Pension Plan, to the San Diego pension
scandal where several officials have been charged with fraud, has been
provided to Council;
. No description of the "different stories" apparently relating to the
City's Pension Plan has been provided to Council; and
. None of the "solid information and revealing details" apparently
brought to his attention by "many employees and professional people ..
has been presented to Council.
... /3
Common Council
June 29. 2006
Cl\y Sol1cl\or
Page .3
Re: Duty to act in best interest of Citizens
The final excerpt above is remInISCent of a comment made by Councillor
Ferguson at the April 11, 2005 Common Council Meeting:
"The Telegraph Journal and other media have been patient, they have
been waiting to see what our next step is. there is definite talk on the
street. I've had several professionals within our community contact me,
advise me in confidence, simp(v because the issue is so severe. ..
To date I do not believe the Councillor has presented anything to Council
describing the nature of that advice, its substance or the information upon
which it was based.
There is little doubt that the foregoing excerpts could reasonably be understood
as imputing improper, inappropriate and misleading behaviour bearing
adversely upon the City's financial well being, a matter of singular importance
to the Municipality. The Councillor's failing to provide Council with the
information he possesses substantiating these comments must be addressed.
This letter will attempt to explain why that is so and will suggest a course of
action for Council in the circumstances.
A brief review of the roles and responsibilities of Council and members of
Council is in order at the outset. Common CounciL as you know, is the legal
agent of the corporation of the City of Saint John, a corporation which is
comprised of the municipality's citizens. Council has been conferred the
power, amongst others. to direct the management of the assets of the Municipal
Corporation. "Assets" in this sense is to be construed broadly. including
human, physical and financial resources. That power must be exercised in the
best interests of the community as determined by Common Council acting in
good faith and within its jurisdiction. As we all recognize even at an intuitive
level, with power comes responsibility and the greater the power the greater
the responsibility. The decisions of a Council bearing upon the financial
integrity of the municipality are final and unreviewable decisions, provided the
Council is acting in good faith and within its jurisdiction. Consequently, the
responsibility is great that Council"s decisions are informed and prudent ones.
It is also crucial to recognize that while the decision making power rests solely
with Council as a body acting at a duly constituted meeting. each member
when participating in that forum is responsible for the informed and prudent
character of his own participation.
... /4
Common Council
June 29. 2006
Cny Sohcnor
Page 4
Re: Duty to act in best interest of Citizens
The common sense notion that power travels in lockstep with responsibility is
reflected in the common law view expressed in judicial decisions that a council
functions in a trustee like capacity in relation to the assets of the municipality
and the municipality's citizens. Although at one time otherwise, the
contemporary judicial view holds that members of a council are not trustees in
strict legal terms but are to be considered trustees in the broad sense (see
Seaton v. Vancouver (City ot) [1993], 14 M.P.L.R. (BSSC). See also the
commentary of Dan J. Mandersheid in "The Alberta Municipality - The New
Person on the Block" in (1998) 36 Alberta Law Review, 692).
The Legislature in 2003 enacted several amendments to the Municipalities Act
including one addition which is of particular relevance in the current context.
(S.N.B. 2003, Chapter 27, Section 22). That addition is identified in the
Chapter Outline of the Act as "Duties of Council/or"' and stipulates in part that:
"36(2.1) A councillor of a municipality shall
b) bring to the attention of council matters that may promote the
we(fare or interests of the municipality. .... ..
The duty imposed by that paragraph is entirely consistent with the common
law obligation previously described in this correspondence.
In order to discharge the common law or statutory duty he owes, each member
must disclose to Council information which he honestly believes is germane to
the protection and promotion of the City's best interests (See Savidant v. Dav
[1933],4 D.L.R. 456 (PEICA)). Such a duty or responsibility is a positive one.
It is in my view a dereliction of duty for a member of Council to effectively
state: "1 think there's a serious problem here" without clearly explaining
himself. Informed discussion and decision making by Council requires access
to relevant, reliable information and each member who possesses such
information is duty bound to submit it to Council. If for example, Councillor
Ferguson" s failing to disclose information to Council prevents or inhibits the
Council's making informed and prudent decisions affecting the City's financial
well being, then it could hardly be said he is acting in the best interests of the
citizens. And one can only presume that he believes his information is sound.
... / 5
Common Council
June ~9. ~006
ell\' Soltciwr
Page 5
Re: Duty to act in best interest of Citizens
Councillor Ferguson's duty arising from the remarks in question is clear- he
must disclose to Common Council the information upon which he has relied.
In light of Councillor Ferguson's having failed to provide the information upon
which he bases his remarks, it is my view that Council. has a duty to call upon
him to do so. This information is apparently in the Councillor's possession and
thus should be readily available to Council. The following is the text of an
appropriate resolution:
RESOLVED that Common Council hereby calls upon Councillor John
Ferguson to submit to the Common Clerk not later than July 13. 2006,
for distribution at the next regularly scheduled meeting, a full and
accurate written description of the information upon which he has
relied in making the comments identified in the City Solicitor's letter in
this regard of June 28, 2006 addressed to Common CounciL as well as
any other information which he believes reveals or reasonably suggests
untoward behaviour which adversely affects the City's financial
obligation to the Pension Fund.
Respectfully Submitted.
/1 I / -I---
/ L/ VC1./ri LLt/
John /NUgent
City r~licitor
"')
~
i\
Il' ().. i
i .
REPORT TO COMMON COUNCIL
OPEN SESSION
City of Saint John
July 4, 2006
His Worship Mayor Norman McFarlane and
Members of Common Council
Your Worship and Councillors:
RE: 2006 Interim Financial Operating Results
BACKGROUND:
The purpose of this report is to present the preliminary projections of the City's
financial operations for the year ended December 31, 2006 based on actual
operating results as of April 30.
The financial results are presented to Council at a minimum of three times a year
as follows:
Reportin2 Period Cut-off Date Report to Council
Winter Season April 30 June
Summer Season August 31 October
Year-end December 31 March
As has been noted in prior years, more frequent reports will be provided to
Common Council if the on-going review of financial results show any significant
variation from over-all budgeted targets.
The Finance Department provides all operating departments with detailed
financial reports on a monthly basis. These reports are generated approximately
10 working days after month-end. This 10 day period is needed to ensure that all
inter-departmental charges are processed in the correct financial period.
For purposes of the seasonal reports to Council, Departments are given two weeks
i to analyze their operating results and present a report to the Finance Department
of any significant variances from budget to date and a projection of the expected
financial results at year-end.
ANALYSIS:
For the most part the City's expenditures are very stable and predictable.
Approximately 50-55% of expenditures relate to salaries and wages for full-time
staff positions, 10-15% for debt charges and a further 10-15% for fixed grant or
expenditure allocations. Analysis of financial results then is particularly focused
on discretionary areas of expenditure that may impact on over-all financial results.
With the winter season results at the end of April areas of significance include
such things as costs incurred for the winter snow removal program and costs
incurred in operating the City's arenas. A review would also look for any
expenditure patterns that may result in negative variances at year-end. This would
include such things as staff sick-time, fuel prices and usage, utility charges and
usage, fleet repair costs, etc. In addition staff look for any areas where
expenditures have been incurred that were not anticipated when budgets were
prepared.
On the basis of the reports presented to the Finance Department for operating
results as at April 30, 2006 there are very few areas that will impact the financial
results for the year. Significant items noted to date include the following:
Winter Snow Control - this past winter was unusually mild which
resulted in savings being realized in the area of overtime costs and fuel
consumption. In total these savings are estimated at approximately
$200,000.
Fleet Service costs are projected to be approximately $150-200,000
greater than budget. While significant progress has been made over
the past few years in replacing aging equipment, the City is still
operating a large number of vehicles that are beyond their estimated
useful life. Costs incurred in maintaining these vehicles are
unpredictable and to date have been higher than anticipated during
budget preparation. Staff are reviewing expenditures and operating
requirements and every attempt will be made to reduce the projected
deficit in this area over the balance of the year.
Fire Department - projecting a shortfall of approximately $300,000 for
the year. The over-expenditure is largely as a result of higher than
anticipated overtime costs being incurred to cover sick time within the
Department as well as retirements not occurring at the rate anticipated
during the budget preparation process.
Tipping Fees - the solid waste tonnage amounts taken to the Crane
Mountain landfill Site for the months of January, February and early
March was less than anticipated during the budget process and as such
it is estimated that a savings of approximately $183,000 will be
realized in this cost for the year.
Although it is still very early in the year, on the basis of the analysis completed on
Operating Results to the end of April, staff feels that the City will be in a break-
even position at December 31, 2006.
RECOMMENDATION:
It is recommended that this report be received and filed.
Respectfully submitted,
Terry L. Totten F.C.A.
City Manager