2014-12-18_Agenda Packet--Dossier de l'ordre du jour
R E P O R T TO CO M M O N C O U N C I L
December 15, 2014
His Worship Mayor Mel Norton and
Members of Common Council
Your Worship and Councillors,
Re; 2015 General Fund Operating Budget
The General Fund Operating Budget includes provision for all mun
sewerage services and major capital expenditures. The 2015 budgoses expenditures totalling
$151,143,354, or a 1.59 percent increase over 2014, and a stable tax rate of $1.785.
The budget will be funded from tax revenues of $118,446,651 a furovince of
NB in the amount of $20,935,308 and Non-tax revenues from the sale of services, fees and permits of
$11,761,395.
and development), a stable tax rate,
the importance of promoting economic growth, the need to maintain and protect existing assets,
fulfilling our contractual and statutory obligations, creating a community of choice and recognizing our
finite fiscal capacity were key factors in developing the operat
Revenue
Nominal growth of less than one percent in the tax base and increased reliance on provin
points to the need for a focused and deliberate effort to attrac
New growth creates jobs which in turn generates demand for housiincreased commercial
investment. New investment in residential and commercial real e
to fund needed services without increases in the tax rate.
Expenditures
A modern urban community must offer a range of amenities if it is to be successful in creating an
environment that attracts people to live, work and invest. Responsible decision making means that this
must be accomplished within the fiscal capacity of the City.
'¤¤± « &´£ /¯¤± ³¨¦ "´£¦¤³ 0 ¦¤
The need for restraint in a time of limited tax base growth also underscores the importance of a
balanced approach to allocating scarce financial resources. A narrow focus on one service such as fire,
police or roads to the exclusion of other community services such as parks, green spaces, arenas,
and culture, and community events would prove detrimental in the long-term. The question is not
which service is important but rather how much of each service i
Budget in Brief
The following table summarizes the major adjustments that have ben made to the initial budget
submissions in order to deliver a balanced budget that responds
Revenue Adjustment Sale Services, Fire, Legal, Parking $190,000
Senior Heritage Planner Vacancy 99,600
SJIP Reduction 30,000
Grant Pool Reduction 126,000
Wage Cap Limited increases/timing 460,000
Police Reduction Court, OT, acting 320,000
PSCC (Staffing) Vacancies actual costs 90,000
Roads Cap Asphalt Increase 300,000
Winter Maintenance Salt Brine use 100,000
Traffic Technician New Request 63,000
Parks Recreation New requests staff/reports 160,000
Mispec Park Partnership support 25,000
SJDC Reduction 10,000
Pension Percentage 31,000
Fiscal Charges Low Interest Rates 57,000
Finance Reduction 40,000
Strategic Services Intergovernmental Officer 127,500
Common Clerk Reduction Advert/Translation 5,000
Corporate Planning Reduction 5,000
City Market Reduction 5,000
Total $2,244,100
Budget Highlights
Roads - An established priority, the asphalt, curb and sidewalk budget will be increased 6% to
$3,508,000 for 2015. This increased level of funding coupled with a p
materials will allow the City to meet or exceed its target of 61 While retaining
an emphasis on road maintenance, the initial departmental submission has been reduced by eliminating
proposed equipment purchases, equipment rentals, golf course funding, a cost analysis study and
additional staffing.
'¤¤± « &´£ /¯¤± ³¨¦ "´£¦¤³ 0 ¦¤
The budget also provides for Phase II of the Transportation Master Plan which will produce a
comprehensive and integrated approach to moving goods and people
determination of truck routes will be one of the key outcomes in
A new snow dump in the south end on the Sugar Refinery Site and contracting out
services next summer will help to improve efficiency and allow the transfer of staff
needed on-street improvements.
Growth and Development The implementation of PlanSJ will continue with the modernization of the
Building Bylaw and Subdivision Bylaw and introduction of a new Stormwater Bylaw. While
Neighbourhood Planning will be deferred to 2016 there will be a One
Stop Shop project as approved. Each of these initiatives will provide increased certainty an
the development community, reduce red tape and encourage timely
It is proposed that the City continue its overall financial commitment ($2.0M) to the four economic
development agencies (SJIP, DMO, SJWD, ESJ) given the critical need to generate new growth in the
community. The True Growth 2.0 framework will continue to serve as the strategic direction in our
coordinated development efforts. The budget also includes the incremental funding ($25K) previously
committed for the events coordinator position at the DMO and operating funding for the Trade and
Convention Centre.
The proposal to bring the development agencies under one umbrella organization offers real potential.
It is important however that clear outcomes be identified at the outset of the exercise and that
demonstrable benefits be identified. Simply put, a $2.0M annualopment
efforts should yield real returns to the community or the funds should b
Recreation Recreational opportunities enhance the quality of life in a comm of choice. The
Operating Budget continues to provide funding to support the operation of our 6 arenas, 6 community
centres and our district and regional parks. The City will however move to implement the
recommendations of PlaySJ during 2015 that will see a rationalization of parks and playgro
emphasis on quality over quantity at the neighbourhood level.
It is anticipated that the Somerset Community Centre will close in conjunction with the opening of the
new Y in late 2015. The City will also continue its obligations to fund the Imperial Theatre, Aquatic
Centre, Arts Centre and Harbour Station. Programming of the new Emera Field will begin in 2015 as
well. Finally, the roll out of the Clean Cart program will offer new opportunities for citizen involvement
at the neighbourhood level.
Support for community based programs such as ProKids ($112,000), the
($15,000), Remembrance Day Ceremonies ($2,000), the Heritage Grant Program ($90K) to support
reinvestment activity in the Heritage Area and the Community Arts Awards ($35,000) are also included.
'¤¤± « &´£ /¯¤± ³¨¦ "´£¦¤³ 0 ¦¤
Transit There is a real need for public transit service in a modern urba
mean however that the service can be provided at any cost. The
of 10 cents on the tax rate to support Saint John Transit. The 2015 budget contemplates a funding
increase of $205,000 or 4% to bring the total operational subsid
addresses the need for an inflationary adjustment and provides a supplement.
A large infusion of cash ($700-800k) will protect the status quo but will not resolve the fundamental
issue of diminishing ridership. A more thoughtful evidence base
ridership, routes, cost of service, fares etc is essential.
It is strongly recommended that the Transit Commission use a portion of this supplementary funding to
engage expert assistance to develop an independent, multi-year business plan. The key objective of the
plan should be to determine options for the most responsive level of service that can be provided at
alternative, affordable and sustainable funding levels. An informed policy decision can then be made as
to what the community wants and can afford in subsequent years.
Grant Funding The need for a balanced approach to addressing community needs necessitates
targeted contributions to events and organizations that bring co
small investments can yield significant returns when combined wi
community volunteers. After adjusting for in-kind rent supports ($109K) that are no longer required, it
is proposed that the overall grant funding envelop be reduced $126,000 to $231,725. A grant
application process is now in place to assess the merit of various requests.
Police The budget submission of the SJPF called for an increase of $1,030,000 or 4.4%. Wage
represent the largest component of the police operating budget a submission
reflects the cost of the most recent negotiated wage settlement. Notwithstanding the limited flexibility
to civilianize positions or adjust staffing levels, it is important that the force strive to reduce overtime,
court costs and other supplementary earnings. The Commission shotake an analysis of
secondments to ensure that there is no indirect negative impact
The 2015 budget proposes limiting the requested increase to $700,000 or 2.9%. A reduction beyond this
point is not realistically achievable given the limited contractual flexibility and would likely result in an
operational deficit at year end.
The budget submission for the PSCC (911) has been reduced by $90
vacancies arising from general staff turnover.
Fire Protection The cost of fire services has risen well beyond inflationary inc
arbitrated wage settlements have exceeded even those that are fr
groups. The impact on the fire service has been significant and has resulted in the reduction of 40
permanent positions since 2004.
'¤¤± « &´£ /¯¤± ³¨¦ "´£¦¤³ 0 ¦¤
The budget proposes to fund a $300,000 increase in base costs and al for a nominal salary increase in
2015. Total funding for the department would therefore increase $670,000 from $21,634,566 to
$22,304,750 or 3.1%. It is anticipated that the funding cap will require the department to eliminate
overtime. Given the arbitrated wage settlement mechanism for public safety personnel a more
aggressive spending cap could only be achieved with an additional reduction in fire services and an
increased level of risk in the community.
Council should recognize that there are a number of major industrial projects on the horizon that could
significantly change the risk profile of the community. These developments could also bring new
revenue opportunities for the fire service (training, equipment
to the fire service to allow for timely reinvestment in the serv that
may arise.
It is also proposed that a new Fire Services Bylaw be introduced in 2015 that will serve to generate new
revenue opportunities and establish clear expectations for servi
Emergency Management During the 2014 budget deliberations, Council recognized the need for a
dedicated emergency management resource. This new position was
remainder of the funding ($28K) is included in the 2015 budget. This position will ensure proper
planning, full preparedness and a coordinated response to major emerge
Asset Management The City will work with Saint John Energy to undertake a phased transition to LED
Streetlights. It is anticipated that savings from reduced energy costs will
investment.
The City has a major portfolio of investments in buildings, fleet and other infrastructure. It is
these assets be properly maintained and that we move to full lifecycle costing. The finance budget
includes provision for the purchase of an Asset Management Software tool to facilitate this
methodology.
A fleet service costing analysis was completed during 2014. A proposal will be coming forward to
ensure that sufficient funds are provided not only for maintenan
of essential equipment. This approach will better capture actua
future borrowings. A multi-year transition period is anticipated for full implementation of the new
model.
The City will also be actively pursuing options to minimize the
maximize the use of available space in the Transit Building, Citd other facilities.
Human Resources The City will be reviewing the Terms and Conditions of Employmen
management personnel during 2015 and will also be actively engag
three union locals. Each of these initiatives will require a significant time commitment of staff from
'¤¤± « &´£ /¯¤± ³¨¦ "´£¦¤³ 0 ¦¤
across the organization. The corporate budget includes funding for reasonable and competitive wage
increases however any excess costs will necessitate staffing and/or service reductions.
In an effort to contain costs a number of positions have been removed from th
submission including; Senior Heritage Planner, Administrative St, Administrative Casual
(Parks), Maternity Leave Casual, Intergovernmental Affairs Officer and Transportation Technician.
Funding caps for Fire, Police and Transit services will also result likely in staff reductions as service
adjustments are introduced.
Technology The City is fully dependent on technology to deliver cost effect
systems, 911 dispatch services, accounting, billing systems, fac
automated. The budget contemplates continued support for these core services and continued
progress toward providing WiFi services in key locations in the uptown. We will also be advanc
Open Data initiative which will support greater transparency and accountab
Other The budget for the office shows a $330,000 increase. These charges relate to
the potential liability must be recognized in the current budgetirrespective of when the amounts are
actually paid.
The budget for the Parking Commission includes an $88K amount to offset their municipal taxes for the
parking garage as contemplated in their original business model.ty
taxes and the City will rebate the same amount. In effect, as th
City, the property taxes will be neither a net revenue nor expen
As part of the conversion to the shared risk model, the changes llowed for continuation of service
buyback provisions (pre-conversion) for members of the plan. The determination of the a
remains outstanding. There is limited provision in the budget f
Looking Ahead
The attached budget addresses the service needs for 2015. Council must also consider the affordability
and sustainability of services in the longer term. It is already known that the City will finish 2014 with a
deficit of approximately $1.5M. This amount becomes the first charge in 2016. Absent sufficient growth
in the tax base a tax hike will be likely if significant new program or service costs are taken on by the
City.
Debt costs become fixed costs for a 10-20 year time horizon. The higher the debt service costs the less
flexibility to respond to changing circumstances in future years
10% range and should continue to do so. Given the high demand for capital investments, limiting debt
obligations has serious implications for the capital budget in that only those investments that provide
maximum benefit to the community should be considered. This link points to the need for the
'¤¤± « &´£ /¯¤± ³¨¦ "´£¦¤³ 0 ¦¤
development of an Integrated Financial Plan that directly ties capital investments to civic priorities and
our annual borrowing capacity.
The arbitrated wage settlement mechanism currently in place for protective service employees is
broken. These arbitrated wage awards outstrip inflation and anything that coul
at arms-length. The result is ongoing incremental reductions in staffing and service levels in protective
services and other service areas to the detriment of the entire community. The City could take a
leadership role with its counterparts to develop a more balanced mechanism.
greater dependence on funding transfers from the Province of NB.
community extremely vulnerable to changes or reductions in the grant transfer model. It is essential
development on the horizon offers new opportunities and every efe
projects.
Continued progress towards full implementation of PlanSJ and its
implementation of the One Stop Shop must proceed without delay in order to realize the full benefits of
the new community plan.
The City has been successful in cultivating productive partnersh
Recreation Infrastructure, Fire Service Training etc. These joint efforts lead to new revenues and new
ideas to support improved services to the community. There is m
this nature.
A new solid waste model is being explored for the region. It is unclear how the economi
be achieved if all the regional municipalities are not willing participants. The City cannot assume the
bulk of the additional costs for enhanced solid waste services. The effort expended to evaluate the new
model should be commensurate with the likelihood of success.
There are positive indications that the Province will be pursuin
municipalities. The new Municipalities Act can be merely an incremental step forward that continues to
limit the scope of municipal authority or it can serve to unleash the ability of municipalities to shape
their own future and respond to local needs in a timely basis. The City of Saint John and the
New Brunswick need a new and modern legislative platform. Medioice.
Conclusion
A deliberate effort has been made to contain costs and minimize in the
2015 General Fund Operating Budget. The proposed budget exercises restraint, provides a stable tax
rate, sound debt management, continued emphasis on roads, recrea
'¤¤± « &´£ /¯¤± ³¨¦ "´£¦¤³ 0 ¦¤
anticipates affordable wage settlements, honours our contractual,
implements strategic initiatives (PlanSJ, PlaySJ, TG2.0), responds to ou
supports our efforts at creating a community of choice and chall
evidence based decision making.
ial position is one that will continue to challenge Council. Su-term
solutions must be the order of the day in order to avoid either significant reductions in service levels or a
tax rate increase.
Recommendation
1.That the sum of xxxxxxxxx be the total operating budget of the City of Saint John for
2015;
2.That the sum of xxxxxxxxx be the Warrant of the City of Saint John for 2015;
3.That the tax rate for the City of Saint John be $1.7850;
4.That Common Council orders and directs the levying by the Minister of Environment and
Local Government of said amount on real property liable to taxation under the
Assessment Act within the City of Saint John;
5.That Common Council authorizes the Commissioner of Finance and Administrative
Services to disburse, at a time acceptable to him, to the named Commissions, Agencies
and Committees, the approved funds as contained in the 2015 budget;
6.That Common Council approves the 2015 Establishment of Permanent Positions at 651.5
Respectfully submitted,
Gregory J Yeomans CGA MBA J. Patrick Woods CGA
Commission of Finance City Manager
'¤¤± « &´£ /¯¤± ³¨¦ "´£¦¤³ 0 ¦¤