2017 General Capital BudgetM&C No,
2016-287
Report Date
November 22, 2016
Meeting Date
November 28, 2016
Service Area
Finance and
Administrative Services
OPEN OR CLOSED SESSION
This matter is to be discussed in open, session of Common, Council',
Primary Author
Co,mmissioner/Dept, Head
--
CManager
anagerj:�
0i
[Craig Lavigne
Kevin Fadge
Jeff Trail
It is recommended that Common Council approve the 2017 General Capital
Budget in the amount of $22,410,250 (gross) with contributions from other
sources of $12,237,7510 yielding a net Capital budget in the amount of
$10,172,500 (net) as set in Exhibit 1,
EXECUTIVE SUMMARY
The draft 2017 General Fund Capital Budget was presented to the Finance
Committee on October 6, The information was updated to reflect Council's
priorities approved on October 31, 2016. The updated 2017 General Fund Capital
Budget was presented to the Finance Committee on November 8 and 17 for
review. The report was presented to Council for review for the November 14
meeting and for approval' on November 28.
NIA
STRATEGIC ALIGNMENT
The proposed 2017 General Fund Capital Budget is aligned with Councils'
priorities, Plan SJ and Play 5J, focusing on investment in the, prime development
areas.
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The 2017 General Fund Capital Budget al�igns with Council's priorities to supporl
investment in Growth and Prosperity, creating a Vibrant, Safe City, offerin,.y
Valued Service Delivery an'd being Fiscally Responsible. The budget also
strategically aligns with Plan SJ and Play SJ.
Several of the capital projects in the proposed budget span across several of
Council's priorities. For example, investing into road improvements not only
supports value, service delivery, but also demonstrates fiscal responsibiliity by
preventing roads from falling into a more costly reconstruct stage. Investment in
facilities such as the Aquatic Center and the Carleton, Community Centre reduces
the infrastructure deficit while at the same time invests in recreation experiences
that create a sense of community pride.
The City is undertaking an asset management plan will play an important part of
future capital budget decision making. The plan will! give Council the ability to
make evidenced and strategic based decisions on where best to invest the
limited capital' dollars to help achieve Council's priorities, The asset management
plan sets the foundation, for long term debt planning, long term financial
planning and supports fiscally responsible spending focused on service,
The Finance Department received $53.46 million in capital budget requests from
service areas in 2017,, The requests exceed the $10-$12 million that the City has
established as a financial measure to keep long term debt from growing to an
unsustainable level. Long term debt for the, General Fund will reach $117.6
million by the end of 2016.
The proposed 2017 General Fund Capital Budget totals $22,410,250 of which
$12,237,750 is to be funded from other sources (gas tax, reserves, etc.) and the
remainder $10,172,500 is to be funded by debt issue ($11,926,300 in 2016).
2017 CAPITAL BUDGET HIGHLIGHTS
Council Priority -'Valued! Service Delive
The capital budget includes investments that support sustainable city services
and municipal infrastructure. Key investments include road improvements,
investments in municipal buildings, storm water, fleet and information
technology that will maintain service delivery and contribute to reducing the
infrastructure deficit.
Transportation — Council's priority to ensure valued service delivery calls for
continued investment in road improvements including asphalt, curb and
sidewalks, as well as surface reinstatements associated with water and sewer
projects. The 2017 General Fund Capital Budget includes $5.345 million of
investment in asphalt, curb and sidewalk and street reconstruction. This
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represents a year over year reduction of $600,000 compared' to the 2016
General Fund Capital Budget ($5,95 mullion). The reduction, can be attributed to
less road reconstruction tied into the Water and Sewerage Capital Budget., Total
investment in roads in Capital and Operating Budgets for 2017 equals $6.71
million ($7.29 million 2016). Overall PCU is intended to remain at similar levels;
however there is risk that the price of asphalt and the reduction in capital
spending may have a negative impact if the trend conitinues.
Additional funding for Transportation Services includes replacing the bus lay area
on King Street ($100,000), and funding for Sand Cove Road ($700,000), Staff will
report back to Council on Sand Cove Road, There is also funding included for the
repairs at the Howe's Lake landfill ($100,000) to replace the landfill cover to
ensure there are no negative environmental impacts,
Drainage — Continuing to iinvest in Westgate Park, funds have been included in
the amount of $880,000. There are also three projects included for storm sewer
separation that is being done in conjunction with Saint John Water for $375,250
which will continue to advance the reliability of the wastewater network through
separation of storm water and wastewater as well as amount for land
acquisitions of $50,000.
Fleet — Funding of $2,5 million from the fleet reserve is included to ensure the
City has the, equipment and fleet required to provide necessary public services
wiitholut having to increase borrowing. A new fleet model is being developed for
2017, along with a reduction of vehicles through the continuous improvement
initiatives that aligns strongly with a value service delivery model. A separate
report to Council will be coming in before the end of the year.
Information Technology - The City's information technology its key in supporting
Council and staff initiatives, as well as supporting effective and efficient delivery
of the services provided to residents. The proposed budget includes $780,000 in
IT investments, with $73,0,000 being funded from the computer reserve fund.
This is made up of network infrastructure and upgrades to the ERP ($150,0100),
disk storage and backup systems ($200,000) and the regular replacement of
monitors, laptops, workstations and licensing agreements ($380,000). There is
also funding included to upgrade the Council Chamber electronic equipment
($50,000).
Parking - Investment in electronic chalking equipment ($88,000) wiill increase
efficiency and will require less manual work around monitoring parking,
Energy Management - The City of Saint John is a finalist for a Quest — Smart
Energy Community Award and has received other awards such as the Premier's
Award for Energy Efficiency through the work done around energy management.
The 2017 budget has funding included for $22,000 for various energy efficiency
projects,
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03—M .1AFd7W7,M,-V.Tr.=
The 2017 proposed budget continues to see investment in key assets that
support services such as Transit, Recreation, Parks, and Public Safety that
promote neighborhoods and creates a vibrant and safe City.
Recreation— Strategic investment in recreation, culture and arts creates a sense
of community pride. Investments in facility renewal iin areas such as: the
Rockwood Park Interpretation Center, the Dominion Park canteen, and Queein
Square lighting ($200,000) has been identified. The budget continues with
investments in, facilities that include replacement of additional windows and
HVAC upgrades at the Carleton Community Center ($470,000), safety rail
replacement at LBR ($150,000), equipment and energy upgrades at Harbour
Station ($170,000) and a second air handling unit and equiipment at the Canada
Games Aquatic Centre ($610,000). The Canada Games Aquatic Center has
applied for funding from the Canada 150 fund for investment in facility renewal.
The application is for approximately ($400,000) and is beiing funded equally
between the City and the Canada 150 fund. The 2016 budget inclluded a facility
renewal budget that has a balance, of ($140,000) along with the ($60,000)
proposed in 2017, will match the Canada 150 funding application,
Harbour Passage — Building on Play SJ and the Bike and Trailways Master Plan,
staff has identified an extension of Harbour Passage to Sydney Street as a
strategic priority. This extension would increase the accessibility of Rainbow
Park, as well as Tin Can beach. Half of the cost of the project would be covered
through, the Public Infrastructure Fund ($600,000).
City Market — The market is an historic icon for the City and was nominated as
one of Canada's Great Public Spaces of 2013. Funding was officially committed
from the Province and ACOA for $2.03 milllion each in 2016. This investment
celebrates and protects the history around the historic City Market, The capital
budget recommends $360,000 for the City's portion: which will bring the City's
total funding to $2.03 million since 2014, matching the other levels of
government.
Central Library — The Central library celebrates arts and culture. The Library
hosts author readings, live music and is a community gathering place.
Renovations to the central library include renovations to the children's
department, teen space, creating a flexible space for authors and musicians and
flooring replacement ($80,000).
Fort Latour — Building upon Harbour Passage, $220,000 has been earmarked for
the City's funding for the Fort Latour Project. Fort Latour celebrates the history
of Saint John and this project will improve this green space on Harbour Passage
for the enjoyment of citizens and visitors.
Saint John Stone Symposium - The Saint John Stone Symposium attracts
international artists to the Saint John Waterfront. The capital budget includes
$15,000 to cover the deposit of two stone sculptures for the 2018 Stone
Symposium, These two works of art will be placed at two locations within the
City,
Transit — Access to reliable cost-effective public transportation plays an
important part in creating great neighborhoods. Saint John, Transit has secured
funding from the Public Transit Infrastructure Fund (PTIF) in 2016. Funding of
$2.5 million (half from PTIF) is included in 2017 capital budget for the purchase
of 5 bus replacements and an approximate additional' $3.1 million (half from
PTIF) has been committed for 2018 for additional buses. This investment in
buses will ensure reliable transportation and reduce the average age of the
transit fleet of buses there by reducing operating expenses,
Public Safety Services — A major investment for Public Safety was approved in
the 2016 capital budget to replace the trunk radio system currently being used
by the City's first responders. The second allocation of $1,25 million is
provisioned in the 2017 capital budget. Upon complleti,on of the project, Police,
Fire andl EMO will have the capabilities and efficiency around communications
needed to perform the changes with an evolving community. This project will
also provide more communication capabilities with other jurisdictions in New
Brunswick, PEI and Nova Scotia that is not currently available today with the 30
year old technology being used.
Fire — To ensure the Fire, Department has the equipment to provide safe and
effective delivery of service, equipment needs to be reliable and safe. The
budget has $110,000 for replacement of safety equipment and $210,000 to
replace the emergency generator at Fire Station #1.
Police — The Police require replacement of their firearms that have been in use
since the early 90's and are no longer supported by the manufacture ($200,000).
Economic Development — The Trade & Convention Centre's year 5 of the 5 year
commitment made by the City to upgrade the facility is incl:uded for $125,000
which will bring the total investment to $1.581 million since 2013.
Fundy Quay — Drilling on the Fundy Quay site has been completed and an
additional amount of $70,000 is needed to complete the environmental
assessment on this site.
The 2017 capital budget aligns with Council Priority of fiscal responsibility. The
capital budget set forth is based on $10,172,500 of new borrowing; however
there are significant contingent projects that could put upward pressures on long
_6_
term debt if one of those projects moves forward. Staff continues to
recommend that Council limit new debt to $11-$12 million per year in order to
reduce the debt over time to ensure fiscal sustainability.
Staff has prepared applications for funding under the New Building Canada Fund
(Small Communities Fund). Applications for funding were due by November 15
and several projects recommended in the capital budget are being submitted for
funiding. If the City is, successful in: receiving additional funding for these
projects, Council will have the opportunity to reduce, borrowing or put additional
money into other projects.
With Council:'s endorsement, staff has undertaken the first steps in developing
an Asset Management plan. A request for proposal has been issued and willl be
awarded to the successful proponent. The first phase of the plan is targeted to
be completed by end of 2016 and second phase Iby end of 2017. Thiiis will set the
foundation, for current and future Councils, staff and all stakeholders enabling
better sound financial decisions, setting levels of service, and the creation of long
term financial plans. This will be a living document to help guide financial
decision making.
Contingent Fundin,g Envelope
A contingent envelope of potential capital projects is also included with the 2017
General Fund Capital Budget. Several of these projects have been listed in
previous capital budgets and' are contingent on achieving additional funding,
Fundy Quay — The contingent budget for 2017 includes $500,000 (approximately
12% of the total cost) for refurbishment of the sea wall and $23 million for
environmental remediation (approximately 40% of total cost). The business case
for this investment will be tax base growth in the PDA and the costs of borrowing
will be weighed against the return on investment.
Exhibition Field House - This $25 million project involves the construction of a
new Field House at Exhibition Park. The Centre would include an indoor track
and facilities for a range of indoor sport activities. The City has been requested
to consider a contribution of $4.2 million over a three year period, The City
funding is contingent on securing federal and provincial funding commitments as
well as ensuring the City has no exposure to risk of having to fund any future
operating deficits.
Loyalist Plaza — The estimated cost of the Loyalist Plaza Development is $6.4
million with an anticipated City contribution of $3.4 million. A master plan has
been developed, after a series of public consultations, that when implemented
wiilll serve to rejuvenate this anchor location in the iUptown. The City's
commitment is contingent on the remainder of the capital funding being
secured.
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Planned capital expenditures total $22,410,250 with $12,237,750 coming from
other sources,. The annual funding from the gas tax program as well as funding
from other government programs, has helped reduce projected borrowing costs
,and has allowed the City to undertake needed infrastructure improvements.
This level of capital expenditures is within the City's borrowing capacity.
The 2017 capital budget invests in road infrastructure, storm and environmental
needs, public transportation, plubliic safety, arts, cultural, and recreation while
miaiintainiing fiscal responsibility, The projects identified align with Council's,
priorities, Plan SJ and Play SJ.
The 2017,General Fund Capital budget will become a fixed charge, for the next 15
years for the General Operating Budget. The projects chosen, for the capital
program that require borrowing have a useful life of 15 years or more,
lnp,ut has been received from the all the Service Areas, the ABCs, the Senior
Leadership Team and Common Council.
F—MMINIMMEW
Exhibit I - 2017 Draft General Capital Budget
Exhibit 2 - 2017 Deferred General Capital Budget
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