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2019-12-02_Agenda Packet--Dossier de l'ordre du jour City of Saint John Common Council Meeting Monday, December 2, 2019 Committee of the Whole 1. Call to Order Si vous avez besoin des services en français pour une réunion de Conseil communal, veuillez contacter le bureau du greffier communal au 658-2862. Each of the following items, either in whole or in part, is able to be discussed in private pursuant to the provisions of subsection 68(1) of the Local Governance Act and Council / Committee will make a decision(s) in that respect in Open Session: th 4:00 p.m., 8 Floor Boardroom, City Hall 1.1 Approval of Minutes 68(1) 1.2 Employment Matter 68(1)(j) 1.3 Communications Plan 1.4 Request to Grant Freedom of the City 1.5 Employment Matter 68(1)(j) 1.6 Financial Matter 68(1)(c,d) 1.7 Land Matter 68(1)(d) 1.8 Legal Matter 68(1)(f) 1.9 Financial Matter 68(1)(c) 1.10 Employment Matter 68(1)(j) 1.11 Financial Matter 68(1)(c) Ville de Saint John Séance du conseil communal Lundi 2 décembre 2019 18 h e Salle du conseil communal (salle Ludlow), au 8 Comité plénier 1. Ouverture de la séance Si vous souhaitez obtenir des services en français pour une séance du conseil communal, veuillez communiquer avec le bureau du greffier communal au 658-2862. privé en vertu des dispositions prévues au paragraphe 68(1) de la Loi sur la gouvernance locale. Le conseil/comité prendra une ou des décisions à cet égard au cours de la séance publique : e 16 h, Salle de conférence, 8 étage, hôtel de ville 1.1 Approbation du procès-verbal paragraphe 68(1) 1.2 68(1)(j) 1.3 Plan des communications 1.4 1.5 68(1)(j) 1.6 Questions financières 68(1)(c,d) 1.7 Questions foncières 68(1)(d) 1.8 Questions juridiques 68(1)(f) 1.9 Questions financières 68(1)(c) 1.10 68(1)(j) 1.11 Questions financières 68(1)(c) Séance ordinaire 1. Ouverture de la séance 2. Approbation du procès-verbal 2.1 Procès-verbal du 18 novembre 2019 2019 (recommandation : accepter à titre informatif) 5.2 Résolutions bancaires (recommandation figurant au rapport) 2020 (recommandation figurant au rapport) Lot D-6, promenade Shoreline du lotissement Highlands of Drury Cove (recommandation figurant au rapport) 5.5 Accords de contribution au Fonds des petites collectivités (FPC) Modifications (recommandation figurant au rapport) 5.6 Contrat 2019-02 : Rue Mecklembourg (de la rue Sydney à la rue Wentworth) pluviaux (recommandation figurant au rapport) 6. Commentaires présentés par les membres 7. Proclamation 7.1 Journée internationale des personnes handicapées 3 décembre 2019 8. Délégations et présentations 8.1 Présentation de DevelopSJ 8.2 Human Development Council John 9. Audiences publiques 18 h 30 9.1 Proposition de modification au règlement de zonage 289, rue Sydney avec recommandant le rezonage 9.2 Proposition de modification au règlement de zonage 431, avenue Millidge avec présentation du personnel et rapport du Comité consultatif rbanisme recommandant le rezonage 59 35, rue Water avec présentation du une modification 10. Étude des arrêtés municipaux 10.1 Proposition de modification du plan municipal et du règlement de zonage 59 348, chemin e Acamac Backland (3 lecture) 11. Interventions des membres du conseil 11.1 Code de conduite du conseil (conseiller Sullivan) 12. Affaires municipales évoquées par les fonctionnaires municipaux 12.2 Mise à jour sur la durabilité 12.2.1 Rapport du directeur général Mise à jour consolidée Plan de restructuration 12.2.2 Élimination de la réserve de croissance Élément de durabilité Élément de durabilité 12.2.4 Subventions et mesures incitatives Élément de durabilité 12.2.5 Revenus de stationnement Élément de durabilité 12.2.6 Réaménagement des effectifs 2022 12.3 Démolition des bâtiments vacants, délabrés et dangereux au 63, rue Jack (NID 00049007) re 12.4 Budget de fonctionnement du fonds des services publics de 2020 (1 et e 2 lectures) 13. Rapports déposés par les comités 15. Correspondance générale 15.1 Lettre de G. Sweigard Réduction des services de transport en commun municipaux (recommandation : communiquer à la commission de transport) 15.2 Lettre de ME Carpenter : accepter à titre informatif) 15.3 Centre aquatique des Jeux du Canada (recommandation : accepter à titre informatif) 16. Ordre du jour supplémentaire 17. Comité plénier e 17.1 17.2 18. Levée de la séance COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 MINUTES REGULAR MEETING COMMON COUNCIL OF THE CITY OF SAINT JOHN NOVEMBER 18, 2019 AT 6:00 PM IN THE COUNCIL CHAMBER Present: Acting Mayor / Deputy Mayor Shirley McAlary Councillor-at-Large Gary Sullivan Councillor Ward 1 Blake Armstrong Councillor Ward 1 Greg Norton Councillor Ward 2 Sean Casey Councillor Ward 2 John MacKenzie Councillor Ward 3 David Hickey Councillor Ward 3 Donna Reardon Councillor Ward 4 David Merrithew Councillor Ward 4 Ray Strowbridge Absent: Mayor Don Darling Also Present: City Manager J. Collin Deputy City Manager N. Jacobsen City Solicitor J. Nugent Fire Divisional Chief R. Nichol Commissioner Saint John Water B. McGovern Commissioner Growth and Community Development J. Hamilton Commissioner Finance and Treasurer K. Fudge Commissioner Transportation and Environment M. Hugenholtz Common Clerk J. Taylor Deputy Common Clerk P. Anglin 1 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 1. Call to Order 2. Approval of Minutes 2.1 Minutes of November 4, 2019 Moved by Councillor Sullivan, seconded by Councillor Hickey: RESOLVED that the minutes of the meeting of Common Council held on November 4, 2019, be approved. MOTION CARRIED. 3. Approval of Agenda Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the agenda of this meeting be approved with the addition of Item 17.1 th Lease Termination of the Donut Queen Inc. City Market (Tabled on November 4, 2019). MOTION CARRIED. 4. Disclosures of Conflict of Interest 5. Consent Agenda 5.1 That as recommended by the City Manager in the submitted report M&C 2019- 287: Central Peninsula Secondary Plan, Municipal Plan, Zoning By-law and Heritage By- law Amendments Referral Report, Common Council approve the following: 1. That Common Council refer the adoption of the Central Peninsula Secondary Plan, including amendments to the Municipal Plan and Zoning By-law, to the Planning Advisory Committee for a report and recommendation on November 26, 2019, and schedule a Public Hearing to be held at a special meeting on December 9, 2019, at 6:30 p.m., and 2. Common Council set a public hearing date for Heritage By-law (Phase 2) amendments for December 9, 2019, at 6:30 p.m., and 3. Common Council receive for information the submitted letters of support and frequently asked questions document and that they be included in the public record as the Plan and related amendments move forward in the adoption process. 5.2 That as recommended by the City Manager in the submitted report M&C 2019- 288: Cleanup of Unsightly Properties at Various Locations, Common Council direct one or more of the Officers appointed and designated by Council for the enforcement of the 2 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 Saint John Unsightly Premises and Dangerous Buildings and Structures By-law, to arrange for the cleanup of the following unsightly properties: 1. 2-4 Wellesley Avenue, PID# 00371310; 2. 101 Broadway Avenue, PID# 00302406; and 3. 461 Milford Road, PID# 55017917 5.3 That as recommended by the City Manager in the submitted report M&C 2019- 291: Saint John Diocesan Cemeteries Inc. Holy Cross Cemetery Correspondence Approval of Mausoleum, Common Council hereby approves of the proposed establishment of a mausoleum at Holy Cross Cemetery, Sand Cove Road, Saint John, New Brunswick by Saint John Diocesan Cemeteries Inc. as shown on Attachment 2 to this report. 5.4 That as recommended by the City Manager in the submitted report M&C 2019- 271: Council Members Wage Escalation Clause, Common Council adopt the following: That Common Council will follow the provisions of the Wage Escalation Policy FAS-007 considerations: Council will receive an annual salary adjustment based upon the Wage Escalation -year rolling average of Assessment Base Growth calculation; or Council will receive an annual salary adjustment based on the Management Professional Non-Union (MPNU) Association salary adjustment; whichever is less. AND THAT Common Council amend the Bylaw LG-1 A Bylaw to Provide for Salaries to the Members of the Common Council of the City of Saint John to incorporate the annual salary adjustment. 5.5 That the submitted report M&C 2019-300: West Saint John Drinking Water Transition Schedule Update, be received for information. 5.6 That as recommended by the City Manager in the submitted report M&C 2019- 308: Microsoft Business and Services Agreement Annual Update Statements, the Mayor and Common Clerk be authorized to execute the necessary documents to complete the annual Enterprise Update Statements process for Year 1 and Year 2 in accordance with the terms of the Microsoft Business and Services Agreement signed on May 15, 2017 in M&C No. 2017-129. 5.7 That as recommended by the City Manager in the submitted report M&C 2019- 307: Security Information and Event Management (SIEM) Contract Award, Common Council approve the following: 3 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 1. The City enter into a three (3) year Agreement with Bulletproof Solutions ULC for Security Information and Event Management (SIEM) Software as a Solution (SaaS) and 24/7/365 Security Operations Center (SOC) Monitoring with an option for two (2) additional two (2) year extensions; and 2. The Mayor and Common Clerk be authorized to execute the necessary contract documents; and 3. Common Council pre-approve the funds allocated in the draft 2020 General Fund Operating budget required to award the contract. 5.8 That as recommended by the City Manager in the submitted report M&C 2019- 296: Saint John Hotel Association Sponsorship of Ice Sport Non-Resident User Fees 2019- 2020, Common Council adopt the following: 1. Accept a $60,000.00 sponsorship from the Saint John Hotel Association in lieu of charging the previously approved $200.00 + HST Non-Resident User Fee for ice sport use of City arenas for the 2019-2020 season; 2. With endorsement of #1, direct the City Manager to immediately cancel roll-out of the Recreation Card Program for ice sports at City arenas for the 2019-2020 season and issue refunds to any non-residents that have paid the $200.00 + HST Non-Resident User Fee; 3. Endorse that recommendations in M&C 2019-296 generally supersede all previous resolutions related to Non-Resident User Fees and the Recreation Card Program for ice sport use of City arenas for the 2019-2020 season; 4. -resident user fees for the 2020-2021 season remains in effect unless an alternative solution is presented for review and approval by Common Council; and 5. That the Mayor officially thank the Hotel Association for their sponsorship. Moved by Councillor Sullivan, seconded by Councillor Merrithew: RESOLVED that the recommendation set out in each consent agenda item respectively be adopted. MOTION CARRIED UNANIMOUSLY. 6. Members Comments Council members commented on various community events. 7. Proclamations 8. Delegations/Presentations 4 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 9. Public Hearings 6:30 PM 10. Consideration of By-laws 11. Submissions by Council Members th 11.1 Flyer Delivery Bylaw (Councillor Hickey) (Tabled on November 4, 2019) Moved by Councillor Sullivan, seconded by Councillor Strowbridge: RESOLVED that the Flyer Delivery Bylaw (Councillor Hickey), be lifted from the table. MOTION CARRIED. The City Manager stated the work associated with a bylaw would be carried out in the 2020 workplan. In the interim, staff will send a letter to Brunswick News outlining the concerns of Council. Moved by Councillor Hickey, seconded by Councillor Strowbridge: RESOLVED that -law, with specific focus to either -model for residents. MOTION CARRIED. 12. Business Matters - Municipal Officers 12.1 Continuous Improvement Initiatives 12.1.1 Presentation (Tabled on November 4, 2019) Moved by Councillor Sullivan, seconded by Councillor Hickey: RESOLVED that item 12.1.1 Presentation be lifted from the table. MOTION CARRIED. The Director of Corporate Performance S. Rackley-Roach updated Council on the following projects and their contribution toward addressing the deficit: Third Party Contract Services / In-sourcing of electrical maintenance services Cost reduction $50,000 Cell phone standardization Cost reduction $50,000 Sports field lining Cost reduction $10,000 Fire Training academy New Revenue $23,000 Moved by Councillor Sullivan, seconded by Councillor Hickey: RESOLVED that as recommended in the submitted report entitled Sustainability Initiatives November 18, 2019 Common Council endorses the continuous improvement 5 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 initiatives presented as contributions towards addressing the entirety of the deficit in 2021 and 2022 as the projects are fully implemented: Third Party Contract Services-Phase 1 Cell phone standardization Sports Field Lining Fire Training academy Phase 1 MOTION CARRIED. 12.2 Sustainability 12.2.1 Sustainability: Process for Approving Initiatives The City Manager described the two-step decision making process for approving sustainability initiatives to address the entirety of the deficit in 2021 and 2022. 1. The first step involves Council evaluating business cases to determine if a sustainability idea should be considered as an option to address the deficit. Those those ideas that Council does not approve as sustainability options, they will be taken off the list and no further work will be completed. 2. As part of the second step of decision-making, City staff will bring forward a recommendation on which sustainability initiatives from the hopper to implement and reflect revenue or savings in the 2020 budget the week of December 2, 2019. A recommendation on the remaining initiatives in the sustainability hopper that should be implemented to address the entirety of the deficit will be brought forward Moved by Councillor Strowbridge, seconded by Councillor Hickey: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-301: Sustainability: Process for Approving Initiatives, Common Council approve the two-step process designed to approve the sustainability initiatives that will be implemented to address the entirety of the deficit in 2021 and 2022. MOTION CARRIED. 12.2.2 Sustaining Saint John A Three Part Plan (Status Update) N. Jacobsen provided Council with an Action Item update on 20 action items: 1. Collective Agreements 2. Special Pension Payments 3. City Boundaries 4. Binding Arbitration Reform 6 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 5. Tax exemption Local Government Transit Facilities 6. Municipal Property Tax Reform 7. Population Growth 8. Saint John Energy 9. Regional Facilities Capital and Operating Streams 10. Accommodation Levy 11. Regional Services Commissions 12. Operating Budget Initiative (50+ continuous improvement and sustainability initiatives 13. Organizational Structure Change 14. Continuous Improvement Framework 15. Operational Audit (EY is the successful proponent) 16. Review of Economic Development Framework (Jupia Consultants) 17. Facilitating Growth Through Collaboration (Business Advisory Committee) 18. Long-Term Financial Plan 19. Debt Management Plan and Wage Escalation Policy 20. Asset Management Phase 2 Part 2 GNB Regional Management Task Force (Report March 2020) Part 3 GNB Re- The Deputy City Manager stated that substantive work is being done with committed partners from the Province of New Brunswick and the Senior Leadership Team to meet the March 2020 timeline. The submitted Sustaining Saint John Progress report will be shared with local Southern ice and all four political parties currently represented in the Provincial Legislature in order to ensure broad situational awareness. Moved by Councillor Sullivan, seconded by Councillor Hickey: RESOLVED that the submitted report M&C 2019-293: Sustaining Saint John A Three Part Plan (Status Update), be received for information. MOTION CARRIED. The City Manager explained the items 12.3-12.8 inclusive are individual initiatives that Council may select to go into the sustainability hopper, or to reject as a sustainability initiative. 12.3. Fire Service Fee Recovery Sustainability Item Moved by Councillor Sullivan, seconded by Councillor Hickey: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-310: Fire Service Fee Recovery Sustainability Item, Common Council endorse the 7 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 proposed Fire Service Fee Recovery Sustainability Initiative as an option to be considered in addressing the entirety of the deficit in 2021 and 2022. MOTION CARRIED. 12.4 Passport to Parks Sustainability Item (Tabled on November 4, 2019) Moved by Councillor Sullivan, seconded by Councillor Hickey: RESOLVED that M&C 2019-30: Passport to Parks Sustainability Item be lifted from the table. MOTION CARRIED. Moved by Councillor Merrithew, seconded by Councillor Sullivan: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-302: Passport to Parks Sustainability Item, Common Council endorse the proposed as an option to be considered in addressing the entirety of the deficit in 2021 and 2022. MOTION CARRIED. 12.5 Lifeguards Sustainability Item (Tabled on November 4, 2019) Moved by Councillor Merrithew, seconded by Councillor Sullivan: RESOLVED that M&C 2019-30: Lifeguards Sustainability Item be lifted from the table. MOTION CARRIED. Moved by Councillor Sullivan, seconded by Councillor MacKenzie: RESOLVED that Common Council remove the proposed elimination of lifeguard services at the Fisher Lakes beach location as an option to be considered in addressing the entirety of the deficit in 2021 and 2022. MOTION CARRIED with Councillors Armstrong, Norton and Casey voting nay. 12.6 Rightsizing Recreation Facilities: Rainbow Park Ice Surface - Sustainability Item (Tabled on November 4, 2019) Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that M&C 2019-304: Rightsizing Recreation Facilities: Rainbow Park Ice Surface be lifted from the table. MOTION CARRIED. 8 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 Moved by Councillor Sullivan, seconded by Councillor Merrithew: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-304: Rightsizing Recreation Facilities: Rainbow Park Ice Surface - Sustainability Item, Common Council endorse the proposed Rightsizing Recreation Facilities: Rainbow Park Ice Surface - Sustainability Item as an option to be considered in addressing the entirety of the deficit in 2021 and 2022. MOTION CARRIED with Councillors Reardon, Hickey, and MacKenzie voting nay. 12.7 Rightsizing Recreation Facilities: Seaside Park Lawn Bowling - Sustainability Item Moved by Councillor Merrithew, seconded by Councillor Strowbridge: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-305: Rightsizing Recreation Facilities: Seaside Park Lawn Bowling - Sustainability Item, Common Council endorse the proposed Rightsizing Recreation Facilities: Seaside Park Lawn Bowling - Sustainability Item as an option to be considered in addressing the entirety of the deficit in 2021 and 2022. MOTION CARRIED with Councillor Reardon voting nay. 12.8 Playground Program - Sustainability Item Moved by Councillor Sullivan, seconded by Councillor Strowbridge: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-297: Playground Program - Sustainability Item, Common Council endorse the proposed elimination of funding for the as an option to be considered in addressing the entirety of the deficit in 2021 and 2022. MOTION CARRIED with Councillors Reardon, Casey, Hickey, and MacKenzie voting nay. 12.9 Transition to New City Hall Location (Verbal Update) Director of Corporate Performance S. Rackley-Roach updated Council on the transition of the restack of City Hall. The landlord will complete the base building requirements and handover to the City for fit-up January 31, 2020. The interior fit-up will go to public tender this week. Occupancy by the City is expected by August 2020. Moved by Councillor Strowbridge, seconded by Councillor MacKenzie: RESOLVED that the Transition to new City Hall Location (Verbal Update) be received for information. MOTION CARRIED. 9 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 12.10 Demolition of Vacant, Dilapidated and Dangerous Buildings at 142-144 Highland Road (PID 55196711) Referring to the submitted report R. Van Wart showed photographs of the vacant, dilapidated and dangerous building at 142-144 Highland Road. The Deputy Mayor read the cautionary statement as follows: Building Inspector stating that the building located at 142-144 Highland Road (PID 55196711) is a hazard to the safety of the public by virtue of its being, amongst other things, dilapidated or structurally unsound. Is there present an owner, including anyone holding any encumbrance upon this property, who wishes to present evidence to the contrary, i.e. that the building is No one came forward to present evidence. Moved by Councillor Strowbridge, seconded by Councillor Sullivan: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-292: Demolition of Vacant, Dilapidated and Dangerous Building at 142-144 Highland Road (PID 55196711), Common Council approve the following: RESOLVED that the House and Shed located at 142-144 Highland Road, PID# 55196711, are to be demolished as they have become a hazard to the safety of the public by reason of dilapidation; and BE IT FURTHER RESOLVED that the Shed is to be demolished as it has become a hazard to the safety of the public by reason of unsoundness of structural strength; and BE IT FURTHER RESOLVED that one or more by-law enforcement officers appointed and designated under the Saint John Unsightly Premises and Dangerous Buildings and Structures By-law are hereby authorized to arrange for the demolition, in accordance with the applicable City purchasing policies. MOTION CARRIED. 12.11 Demolition of Vacant, Dilapidated and Dangerous Buildings at 47-49 Broad Street (PID 00000778) Referring to the submitted report entitled Demolition of Vacant, Dilapidated and Dangerous Buildings at 47-49 Broad Street (PID 00000778) R. Van Wart provided photographs of the vacant, dilapidated and dangerous building located at 47-49 Broad Street. 10 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 The Deputy Mayor read the cautionary statement as follows: Building Inspector stating that the building located at 47-49 Broad Street (PID 00000778) is a hazard to the safety of the public by virtue of its being, amongst other things, dilapidated or structurally unsound. Is there present an owner, including anyone holding any encumbrance upon this property, who wishes to present evidence to the contrary, i.e. that the building is No one came forward to present evidence. Moved by Councillor Strowbridge, seconded by Councillor Sullivan: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-294: Demolition of Vacant, Dilapidated and Dangerous Building at 47-49 Broad Street (PID 00000778), Common Council approve the following: RESOLVED that the building located at 47-49 Broad Street, PID# 00000778, is to be demolished as it has become a hazard to the safety of the public by reason of dilapidation; and BE IT FURTHER RESOLVED that the building is to be demolished as it has become a hazard to the safety of the public by reason of unsoundness of structural strength; and BE IT FURTHER RESOLVED that one or more by-law enforcement officers appointed and designated under the Saint John Unsightly Premises and Dangerous Buildings and Structures By-law are hereby authorized to arrange for the demolition, in accordance with the applicable City purchasing policies. MOTION CARRIED. 12.12 Water & Sewer Rate Study Referring to the submitted report entitled M&C 2019-290: Water & Sewer Rate Study, Andrew Mirabella Consultant Hemson Consulting Ltd. provided an overview of the comprehensive Water and Sewer Rate Study conducted with flat fixed rate projections to 2029. The total flat fixed fee (water and sewer) in 2019 and 2020 remains at $1,428. From 2021-2029 the flat fixed rate projection is a 2.3% average annual rate increase. Moved by Councillor Sullivan, seconded by Councillor Norton: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-290: Water & Sewer Rate Study, Common Council: 1. Endorse the submitted Water & Sewer Rate Study (10 year projection 2019- 2029); 11 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 2. Support removing the third consumption tier from the rate structure given no water consumption has been billed to Tier 3 since 2008; and 3. Direct staff to communicate the results of the rate changes to water only and sewer only customers given they will see a change in their 2020 billing. MOTION CARRIED. Councillor Norton disagreed with the declaration of the result of the vote by the Presiding Officer and requested a recorded vote be taken, in accordance with s. 16.10 of the Procedural Bylaw. The Deputy Mayor called a recorded vote by a show of hands with (4) Councillors Norton, Armstrong, Merrithew and Sullivan voting in favour of the motion and (5) Councillors Casey, Reardon, Strowbridge, Hickey, and MacKenzie voting nay. The Deputy Mayor declared the result of the recorded vote, MOTION DEFEATED. The City Manager advised that a rate needs to be set for 2020. Moved by Councillor Norton, seconded by Councillor Sullivan: RESOLVED that, referring to the submitted report M&C 2019-290: Water & Sewer Rate Study, Common Council: 1. Endorse the submitted Water & Sewer Rate Study for 2020; 2. Support removing the third consumption tier from the rate structure given no water consumption has been billed to Tier 3 since 2008; and 3. Direct staff to communicate the results of the rate changes to water only and sewer only customers given they will see a change in their 2020 billing. MOTION CARRIED. 12.13 East and West Industrial Raw Water Rate Reports Referring to the submitted report entitled M&C 2019-289: East and West Industrial Raw Water Rate Reports, Andrew Mirabella Consultant Hemson Consulting Ltd. provided an overview of the raw water rate analysis for: 1. Irving Oil Ltd. and Irving Paper (at the Flume) on the East Saint John Industrial Water System; and, 2. Irving Pulp & Paper and the NB Power Generating Station (Coleson Cove) on the West Saint John Industrial Water System. The report provided a summary of costs and full cost recovery rates. The report recommends setting by-law rates for each industrial water user as part of the 2020 budget process. 12 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 Moved by Councillor Strowbridge, seconded by Councillor Sullivan: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-289: East and West Industrial Raw Water Rate Reports, Common Council: 1. Endorse the East Saint John Industrial Raw Water Rate Report and the West Saint John Industrial Raw Water Rate Report; and 2. Support the approach of setting all industrial raw water users rates via by-law. MOTION CARRIED. Meeting Extension beyond 10:00 p.m. Moved by Councillor Reardon, seconded by Councillor Armstrong: RESOLVED that in accordance with section 3.13 of the Procedural Bylaw the meeting be extended beyond 10:00 p.m. MOTION CARRIED with Councillors Sullivan and Strowbridge voting nay. 12.14 Cities of New Brunswick Association Resolution Amendments to the Industrial Relations Act Moved by Councillor Strowbridge, seconded by Councillor Sullivan: RESOLVED that as recommended by the City Manager in the submitted report M&C 2019-299: Cities of New Brunswick Association Resolution Amendments to the Industrial Relations Act, Common Council approve the following resolution: WHEREAS: (Cities of New Brunswick Association, Union of Municipalities of New Brunswick, AƭƭƚĭźğƷźƚƓ ŅƩğƓĭƚƦŷƚƓĻ ķĻƭ ƒǒƓźĭźƦğƌźƷĽƭ ķǒ bƚǒǝĻğǒ-- have come together to propose balanced and practical amendments to the Industrial Relations Act. WHEREAS: These amendments propose to strengthen the interest arbitration process (binding arbitration) for achieving joint collective bargaining agreements specifically related to wages and benefits for firefighters and police in the province while reflecting the economic circumstances of the province and the community they serve. WHEREAS: Establishing criteria for binding arbitrators in legislation is critical to ensuring the essential services in our communities are within the means of our municipalities without sacrificing quality of life services that the municipalities provide and municipal growth. WHEREAS: Together, the municipalities from all three Associations are proposing an amendment to the Industrial Relations Act that would ensure that the original legislative 13 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 Intent is achieved. The amendment would include a requirement that arbitrations be conducted by a single arbitrator and is not intended to impose limits on the binding arbitrator's ability to award costs rather, they ensure that decisions are completed in an efficient manner, are more accountable and transparent, and importantly tied to meaningful assessments of a municipality's fiscal health. BE IT RESOLVED: We join and support the request by all City councils that these improvements be implemented within the existing legislative framework in a manner that complements the intended spirit of the legislation and the existing interest arbitration process as it relates to firefighters and police. MOTION CARRIED. 13. Committee Reports 14. Consideration of Issues Separated from Consent Agenda 15. General Correspondence 15.1 Saint John Police Association - Code of Conduct Complaint Councillor Merrithew addressed the complaint stating that he was expressing his opinion in the Telegraph Journal article and that as a Councillor he is obligated to provide his opinions to serve the taxpayers of the City. Moved by Councillor Strowbridge, seconded by Councillor Reardon: RESOLVED that the Saint John Police Association Letter - Code of Conduct Complaint be received for information. MOTION CARRIED with Councillors Norton, MacKenzie and Sullivan voting nay. 15.2 Saint John Board of Police Commissioners: City of Saint John Wage Escalation Policy Moved by Councillor Sullivan, seconded by Councillor MacKenzie: RESOLVED that the Saint John Board of Police Commissioners Letter: City of Saint John Wage Escalation Policy be received for information. MOTION CARRIED. 15.3 Saint John Police Force - 2019 Operating Budget - August Financial Results Moved by Councillor Reardon, seconded by Councillor Sullivan: 14 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 RESOLVED that the Saint John Police Force - 2019 Operating Budget - August Financial Results be received for information. MOTION CARRIED. 15.4 Ticket Purchase Request: 2019 Kiwanis Club of Saint John Annual Christmas Breakfast Moved by Councillor Reardon, seconded by Councillor MacKenzie: RESOLVED that the Ticket Purchase Request: 2019 Kiwanis Club of Saint John Annual Christmas Breakfast be referred to the Clerk to purchase tickets for interested Council members. MOTION CARRIED. 15.5 UPE / ATU Local 1182 / Saint John Police Association - Request to Present re: Industrial Tax Reform Moved by Councillor Reardon, seconded by Councillor Hickey: RESOLVED that CUPE / ATU Local 1182 / Saint John Police Association - Request to Present re: Industrial Tax Reform be referred to the Common Clerk to schedule. MOTION CARRIED. 15.6 ME Carpenter Letter re: Saint John Transit Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that ME Carpenter Letter re: Saint John Transit be received for information. MOTION CARRIED. 15.7 D. Stubbs-Lee - Saint John Transit Cuts Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that D. Stubbs-Lee - Saint John Transit Cuts be received for information and referred to the Transit Commission. MOTION CARRIED. 15.8 D. Bowen Letter - 348 Acamac Backland Road Moved by Councillor Sullivan, seconded by Councillor Reardon: 15 COMMON COUNCIL / CONSEIL COMMUNAL November 18, 2019 / le 18 novembre 2019 RESOLVED that the D. Bowen Letter - 348 Acamac Backland Road be referred to the City Manager for a legal opinion on the alleged conflict of interest prior to third nd reading scheduled for December 2. MOTION CARRIED. 16. Supplemental Agenda 17. Committee of the Whole 17.1 Lease Termination of The Donut Queen Inc. in the City Market Moved by Councillor Reardon, seconded by Councillor Sullivan: RESOLVED that as recommended by the Committee of the Whole having met on th November 18, 2019 Common Council approve the following: 1) That The City of Saint John terminate the lease for The Donut Queen Inc. and the rental of Stall 2 in the City Market; and 2) That the Mayor and Common Clerk execute all required documentation. MOTION CARRIED. 17.2 Christmas Events Budget Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that the Christmas Events Budget be added to the agenda. MOTION CARRIED. Moved by Councillor Sullivan, seconded by Councillor Reardon: RESOLVED that as recommended by the Committee of the Whole having met on November 18th, 2019 Common Council Lighting and the events. MOTION CARRIED. 18. Adjournment Moved by Councillor Sullivan, seconded by Councillor MacKenzie: RESOLVED that the meeting of Common Council held on November 18, 2019, be adjourned. MOTION CARRIED. The Deputy Mayor declared the meeting adjourned at 10:35 p.m. 16 COUNCIL REPORT M&C No. 2019-317 Report Date November 22, 2019 Meeting Date December 02, 2019 Service Area Finance and Administrative Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Terms of the Fall 2019 Debenture Issue OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Author Commissioner City Manager Craig Lavigne Kevin Fudge John Collin RECOMMENDATION It is recommended that this report be received and filed. EXECUTIVE SUMMARY On October 31, 2019 the New Brunswick Municipal Finance Corporation negotiated the sale of a serial bond issue in the amount of $108,400,000 of which $14,400,000 related to the City of Saint John. PREVIOUS RESOLUTION M&C 2019 -216 RESOLVED that occasion having arisen in the public interest for the following Public Civic Works and needed Civic Improvements that the City of Saint John th proposes issue of the following debentures to be dated on or after August 28, 2019: GENERAL FUND Protective Services $ 3,100,000 Transportation Services $ 3,500,000 Economic Development $ 600,000 Parks and Recreation $ 200,000 $7,400,000 REFINANCE DEBENTURES Debenture No. BB 13- 2009 $ 2,830,000 (General Fund 5 years) - 2 - Debenture No. BB 14 -2009 $ 2,500,000 (Water & Sewerage 10 years) Debenture No. BB 15 -2009 $ 1,670,000 $7,000,000 (Transit 5 years) TOTAL $ 14,400,000 THEREFORE RESOLVED that debentures be issued under provisions of the Acts of Assembly 52, Victoria, Chapter 27, Section 29 and amendments thereto, to the amount of $ 14,400,000. REPORT The terms of the issue as they relate to Saint John are as follows: Term: 5 year serial form (General) $ 2,830,000 15 year serial form (General) $ 7,400,000 5 year serial form (Transit) $ 2,500,000 10 year serial form (Water) $ 1,670,000 Coupon Rate: Year 1 - 1.95% Year 6 - 2.20% Year 11 2.50% Year 2 - 1.95% Year 7 - 2.25% Year 12 2.60% Year 3 - 1.95% Year 8 - 2.35% Year 13 2.65% Year 4 - 2.05% Year 9 - 2.40% Year 14 2.75% Year 5 - 2.10% Year 10 - 2.45% Year 15 2.80% Price: $ 99.44 (Principal: $4,500,000) Average Interest Rate: 2.00% - 5 Years Price: $ 99.20 (Principal: $2,500,000) Average Interest Rate: 2.165% - 10 Years Price: $ 99.05 (Principal: $7,400,000) Average Interest Rate: 2.33% - 15 Years Settlement Date: November 21, 2019 The interest rates and the discount factor were within the limits approved by th Common Council at its meeting held on September 9, 2019. As such, the Mayor and Common Clerk have signed the debentures between the City and the New Brunswick Municipal Finance Corporation for $14,400,000 at the terms th listed above on November 6, 2019. - 3 - SERVICE AND FINANCIAL OUTCOMES N/A INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS N/A ATTACHMENTS N/A /hb/L\[w9thw M&C No. 2019-316 Report Date November 22, 2019 Meeting Date December 02, 2019 Service Area Finance and Administrative Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Banking Resolutions OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Author Commissioner/Dept. Head City Manager Craig Lavigne Kevin Fudge John Collin RECOMMENDATION LƷ źƭ ƩĻĭƚƒƒĻƓķĻķ ƷŷğƷ /ƚƒƒƚƓ /ƚǒƓĭźƌ ğķƚƦƷʹ Resolved: 1. That the banking business of the City of Saint John, or any part thereof, may be transacted with the Bank of Nova Scotia. 2. That any two of the: Commissioner of Finance Comptroller Senior Finance Manager Intermediate Accountant be and are hereby authorized on behalf of the City: (a) To borrow money from time to time by way of direct advances by Promissory Notes, Overdraft, or Standby Letters of Credit/Letters of Guarantee; (b) To oversee banking business to include, without limitation, the operation negotiating, lodging, depositing or transferring of any cheques, promissory notes, drafts, acceptances, bills of exchange and orders for the payment of money; the approval of any administrative arrangement relating to any such banking business and defining the rights and power of the parties thereto; and the authorizing of any officer of such - 2 - institution banking business; and (c) To delegate certain transactions which fall under a dollar threshold designated in internal policies, to specific employees of the City as laid out in said internal policies. 3. That any one of the: Commissioner of Finance Comptroller Senior Finance Manager Intermediate Accountant be and are hereby authorized on behalf of the City: (a) To negotiate with or transfer to the Bank of Nova Scotia for deposit or accounts only) cheques, promissory notes, bills of exchange, drafts, orders for the payment of money and other instruments, whether negotiable or not, purporting to be signed or endorsed on behalf of the City by any one of them or having the name of the City impressed thereon by rubber stamp or other devise without any signature; (b) To arrange, settle, balance and certify all books and accounts between the City of Saint John and the Bank and to receive all paid cheques and other vouchers, unpaid and unaccepted bills of exchange and other balances and release; and (c) To delegate any authority conferred on such person by sub-paragraphs (a) and (b) of this paragraph by any other employee of the City, by notice in writing filed with the Bank. 4. That all agreements, documents and instruments signed, drawn, accepted, endorsed or executed as aforesaid shall be valid and binding on the City. 5. That this resolution shall, from the time Common Council approves, supersede any previous resolutions and instructions respecting the transaction of banking business between the City and Bank of Nova Scotia. EXECUTIVE SUMMARY The Bank of Nova Scotia, requires certain resolutions to be passed by Common Council. One of these is the banking resolution that - 3 - sets out the signing officers of the Corporation. As a result of the recent staffing changes it is necessary to modify the existing banking resolutions to reflect the actual staffing structure. PREVIOUS RESOLUTION M&C 2019-219 Banking Resolutions STRATEGIC ALIGNMENT N/A REPORT utions were last updated in September 2019. The purpose of these resolutions is to update staffing changes to reflect the current structure. SERVICE AND FINANCIAL OUTCOMES N/A INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS N/A ATTACHMENTS N/A /hb/L\[ w9thw 20-320 M&C No. Report Date November 25, 2 Meeting Date December 02, 20 Service Area Corporate Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Business Improvement Area 2020 Budget OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Author Commissioner/Dept. Head City Manager Jonathan Taylor John Collin RECOMMENDATION That the 2020 Association Budget for the Business Improvement Area be received for information and that advertising be authorized for setting January 13, 2020 as the date for Council to consider approving the budget. EXECUTIVE SUMMARY The 2020 b to Council by Uptown Saint John Inc. The proposed BIA levy for 2020 remains the same as previous years at 16 cents for each one hundred dollars of assessed value on non-residential property within the BIA. In order to proceed with the 2020 BIA levy, legislation requires that Council approve of the 2020 budget and amend to the BIA by-law for 2020. REPORT The City of Saint John has a in the uptown region which imposes a 16 cent levy for each $100 of assessed value on non- residential property-law describes the specific boundaries of the BIA and the rate paid by the businesses located within the area. Uptown Saint John Inc. is responsible for administering the funds from the BIA levy, which it uses towards beautification initiatives in the area, promotion, and other development activities aimed at stimulating local business in the BIA. The annual budget for the BIA requires approval s Board of Directors and subsequently by Common Council. Subsequent to -2 - Council an amendment to the Business Improvement Area by-law is required. Uptown Saint John Inc. has submitted the 2020 budget, which was approved in the amount of $519,680.00 at the Annual Budget Meeting held on October 1st, 2019. The BIA Act requires the City to give notice (published at least once weekly for two weeks) in a newspaper of the following: Its intention to approve the budget The extent of the levy needed to implement the budget The period during which objections may be made Objections to the budget may be submitted to the Common Clerk by non- residential users not later than fifteen days after the last publication notice. It is recommended that Council authorize the clerk to prepare a newspaper advertisement which sets January 13, 2020 as the date for Council to consider approving the BIA budget and amending the by-law. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS Finance Department and Uptown SJ Inc. were consulted ATTACHMENTS Letter to Council from Uptown SJ Inc. 2020 Business Improvement Area Association Budget Business Improvement Area By-law A LAW TO AMEND ARRÊTÉ MODIFIANT BY-LAW NUMBER BIA-2 ARRÊTÉ N° BIA-2 BUSINESS IMPROVEMENT LEVY ARRÊTÉ CONCERNANT LA BY-LAW CONTRIBUTION POUR Be it enacted by the Common Council of Le conseil communal de The City of Saint the City of Saint John as follows: John décrète ce qui suit: The Business Improvement Levy By-Law L'arrêté concernant la contribution pour of The City of Saint John enacted on the e City of third day of January, 2006, is amended by: Saint John décrété le 3 janvier 2006 et modifié par: 1 Repealing section 2 thereof and 1 inserting the following: : 2 A levy of 16 cents for each one 2 Par la présente, une contribution de hundred dollars of assessed value is hereby 16 cents par tranche de cent dollars par imposed for 2020 upon non-residential rapport à la valeur fixée est imposée pour property within the Business Improvement sur les immeubles non Area established by By-Law No. BIA-1 Business Improvement Area By-Law th enacted on the 5 day of January, 2004. -1 relatif à la zone ioration des affaires édicté le 5 janvier 2004. IN WITNESS WHEREOF The City of EN FOI DE QUOI, The City of Saint John Saint John has caused the Corporate a fait apposer son sceau communal sur le Common Seal of the said City to be affixed présent arrêté le ** ***** 2020, to this by-law the ** day of ****, A.D. avec les signatures suivantes : 2020 and signed by: ____________________________________________ Mayor/Maire ___________________________________________ Common Clerk/Greffier communal First Reading - Première lecture - Second Reading - Deuxième lecture - Third Reading - Troisième lecture - /hb/L\[w9thw M&C No. 2019-324 Report Date November 21, 2019 Meeting Date December 02, 2019 Service Area Growth and Community Development Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Municipal Drainage Easement Acquisition - Lot D-6 Shoreline Drive, Highlands of Drury Cove Subdivision OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Author Commissioner/Dept. Head City Manager Mark Reade Phil Ouellette John Collin Jacqueline Hamilton RECOMMENDATION The City acquire, from Drury Cove Developments Inc., a Municipal Drainage easement for $1.00 generally in the location as depicted on the Subdivision Plan entitled The Highlands of Drury Cove Subdivision Lot D-6 and LPP-10 attached to M&C No. 2019-324, and that the Mayor and Common Clerk be authorized to execute the necessary documents. EXECUTIVE SUMMARY A Municipal Drainage Easement is required to provide the ability to flow storm water from the Public Street Right-of-Way to the Kennebecasis River. Municipal Drainage Easements require a grant of easement so a resolution of Council is required to effect the conveyance. PREVIOUS RESOLUTION On June 23, 2008, Common Council assented to the (then) Phase 12 of the Highlands of Drury Cove Subdivision, which included the creation of a number of residential lots, Lands for Public Purposes and a new street to be known as Shoreline Drive. The development of this phase of the subdivision has been proceeding in sub-phases since that time. - 2 - STRATEGIC ALIGNMENT It is in the interest of The City of Saint John to obtain easements that protect the development and tax base growth within the City. REPORT The developer has submitted the attached subdivision plan for a further sub- phase, which would vest an additional section of lands for Public Purposes and create one additional lot, Lot D-6. The attached plan includes a Municipal Drainage Easement in favour of the City in the southwestern portion of lot D-6. This easement is necessary to provide the right to flow storm water over land from a low point in Shoreline Drive to the Kennebecasis River in conjunction with the overall storm water management system for the subdivision. Unlike Municipal Services easements for piped services, which automatically vest in the City upon filing of the subdivision plan in the Registry Office, Municipal Drainage Easements must be acquired by a formal grant of easement document. As the original Council approvals with respect to the subdivision did not include acceptance of the subject easement, it is now necessary for Council to adopt a resolution authorizing its acceptance in order to effect the conveyance. Staff note the easement to the east of the site, located on PID 55201248 was acquired as a Municipal Services Easement. As this does not specifically provide the right to flow surface water over these lands, City Staff will be initiating discussions with the adjacent landowner regarding the acquisition of the required rights. SERVICE AND FINANCIAL OUTCOMES Not Applicable INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS Infrastructure Development, Real Estate and the have provided input into the report. ATTACHMENTS Attachment 1 - Subdivision Plan The Highlands of Drury Cove Subdivision Lot D- 6 & LPP COUNCILREPORT M&C No. 2019-319 Report Date November 25, 2019 Meeting Date December 02, 2019 Service Area Saint John Water His Worship Mayor Don Darling and Members of Common Council SUBJECT: Small Communities Fund (SCF) Contribution Agreements - Amendments OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Author Commissioners City Manager Brian Keenan Brent McGovern/Michael John Collin Hugenholtz RECOMMENDATION It is recommended that: Common Council authorize the Mayor and Common Clerk to execute the following three Small Communities Fund Contribution Agreements Amending Agreements in the form attached to M&C No. 2019-319: Road Rehabilitation Visart Street - Watermain Renewal and Sewer Separation Rockland Road - Watermain Renewal and Sewer Separation EXECUTIVE SUMMARY The purpose of this report is to request that Common Council authorize the Mayor and Common Clerk to execute the attached three Small Communities Fund Contribution Agreements - Amending Agreements. PREVIOUS RESOLUTION By resolution dated June 4, 2018, Common Council authorize the Mayor and Common Clerk to execute the following Funding Agreements under the Small Communities Fund (SCF): Road Rehabilitation Visart Street - Watermain Renewal and Sewer Separation Rockland Road - Watermain Renewal and Sewer Separation - 2 - STRATEGIC ALIGNMENT Valued Service Delivery, specifically as it relates to investing in sustainable City services and municipal infrastructure. The City is also being Financially Responsible by leveraging opportunities to generate alternative funding sources. REPORT BACKGROUND Staff have been previously authorized by Council to proceed with funding applications for projects under the Small Communities Fund which included among others: Road Rehabilitation Visart Street - Watermain Renewal and Sewer Separation Rockland Road - Watermain Renewal and Sewer Separation The above projects were approved under the 2017/2018 Capital Programs and construction has been completed. ANALYSIS An opportunity has been provided under the Small Communities Fund to amend the original approved project descriptions to take full advantage of Federal/Provincial Eligible Project Expenditures under the SCF Program. Staff have worked with the Provincial SCF Program Co-ordinator to establish Agreement amendments which are attached to the front of the original Small Communities Fund Contribution Agreement for each of the above referenced projects. SERVICE AND FINANCIAL OUTCOMES The overall City Share component of the 2017/2018 Capital Programs will remain the same as originally approved by Common Council however these amendments will allow the City to have access to approximately $288,000 that it would not have access to if the amendments were not completed. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS This report and the Small Communities Fund Contribution Agreement - Amending Agreements have been reve and Administration Services Department . - 3 - ATTACHMENTS Small Communities Fund Contribution Agreement - Amending Agreements for projects: 6920 2062 Road Rehabilition 6920 2079 Visart Street Watermain Renewal and Sewer Separation 6920 2078 Rockland Road Watermain Renewal and Sewer Separation SMALL COMMUNITIES FUND CONTRIBUTION AGREEMENT AMENDING AGREEMENT This Amending Agreement is made as of the date of last signature. BETWEEN: HER MAJESTY THE QUEEN IN RIGHT OF THE PROVINCE OF NEW BRUNSWICK, as represented by the Minister of Environment and Local Government, and, REGIONAL DEVELOPMENT CORPORATIONΉ{h/L;; 59 5;9\[htt9a9b w;DLhb!\[ AND: THE CITY OF SAINT JOHN in the Province of New Brunswick ("Recipient") \[New Brunswick and the Recipient are hereinafter referred to collectively as the \]; WHEREAS NEW BRUNSWICK and the RECIPIENT entered into a funding agreement, the Small rd Communities Fund Contribution Agreement, dated July 3, 2018 a copy of which is attached hereto as Appendix in Original Agreement AND WHEREAS New Brunswick and the Recipient wish to amend a term of the Original Agreement; AND WHEREAS the provides at Clause 15.6 that the Agreement may be amended from time to time on written agreement of the parties; NOW THEREFORE THIS AMENDING AGREEMENT WITNESSES that for and in consideration of the sum of One Dollar ($1.00) in lawful money of Canada now paid by each of the Parties to these present to the other, the receipt and sufficiency of which is hereby acknowledged by each of the Parties hereto, and for other good and valuable consideration, the Parties hereto covenant and agree as follows: 1. New Brunswick and the Recipient mutually agree and consent to amend Schedule A Project Description, page 12 of the by deleting the following wording: Page 1 of 4 Project Description: Project will mill and seal asphalt on various streets and include replacement of concrete curb and sidewalk as warranted. Works will take place on King Street (Water Street to Charlotte Street), Main Street West (Railway Tracks to Church Avenue), Marlin Drive (Bedell Avenue to Crestwood Street), and Marlin Terrace (Marlin Drive to Marlin Terrace). and substituting the following wording: Project Description: Project will mill and seal asphalt on various streets and include replacement of concrete curb and sidewalk as warranted. Works will take place on King Street (Water Street to Charlotte Street), Main Street West (Railway Tracks to Church Avenue), Marlin Drive (Bedell Avenue to Crestwood Street), Marlin Terrace (Marlin Drive to Marlin Terrace), Marlin Court (Marlin Drive to dead end), and Church Avenue (Main Street West to Prospect Street). 2. New Brunswick and the Recipient hereby covenant that they shall perform and observe the terms, the conditions, the covenants, provisos and stipulations in the Original Agreement, as amended, as fully as if such covenants, provisos and stipulations had been repeated in this Amending Agreement. Page 2 of 4 THE PARTIES enter into this Amending Agreement by signing below. HER MAJESTY THE QUEEN IN RIGHT OF THE CITY OF SAINT JOHN THE PROVINCE OF NEW BRUNSWICK Original signed by: Original signed by: ________________________________ _______________________________ Hon. Jeff Carr His Worship Donald Darling Minister of Environment and Mayor Local Government ________________________________ _______________________________ Date Date REGIONAL DEVELOPMENT CORPORATION {h/L;; 59 5;9\[htt9a9b w;DLhb!\[ ________________________________ _______________________________ Name: __________________________ Jonathan Taylor Title: ___________________________ Clerk ________________________________ _______________________________ Date Date Recipient Seal Page 3 of 4 APPENDIX A Page 4 of 4 /hb/L\[w9thw M&C No. 2019- 321 Report Date November 25, 2019 Meeting Date December 02, 2019 Service Area Transportation and Environment Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Contract 2019-02: Mecklenburg Street (Sydney Street to Wentworth Street) Water, Sanitary and Storm Sewer Renewal and Street Reconstruction OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Author Commissioner/Dept. Head City Manager Joel Landers Michael Hugenholtz / John Collin Brian Keenan RECOMMENDATION It is recommended that Common Council: 1. Approve an adjustment to the 2019 General Fund Capital Program Transportation Category to reallocate $95,000.00 from the Engineering Investigations and Design line item to the Mecklenburg Street Transportation budget. 2. Approve an increase to the Contract award amount to Galbraith Construction Ltd. for Contract 2019-02: Mecklenburg Street (Sydney Street to Wentworth Street) Water, Sanitary and Storm Sewer Renewal and Street Reconstruction from $1,546,001.10 to $1,641,001.10 EXECUTIVE SUMMARY The purpose of this report is to update Council on the status of the Mecklenburg Street (Sydney Street to Wentworth Street) Water, Sanitary and Storm Sewer Renewal and Street Reconstruction Project. PREVIOUS RESOLUTION July 30, 2018; 2019 Water & Sewerage Utility Fund Capital Program approved July 30, 2018; 2019 General Fund Capital Program approved April 23, 2019; 2019-02 Mecklenburg Street Project Award September 23, 2019; 2019-02 Mecklenburg Street Project Update - 2 - REPORT BACKGROUND The approved 2019 General Fund and Water and Sewerage Utility Fund Capital Program includes funding for the reconstruction of Mecklenburg Street from Sydney Street to Wentworth Street. The work involves the replacement of the existing watermain, sanitary sewer, a new storm sewer for separation, full street reconstruction including new concrete curb and sidewalk, roadway granulars, asphalt, grass median and trees. On September 23, 2019 (M&C 2019-244) staff updated council regarding encountering contaminated soils on Mecklenburg Street during trench excavation. Council adopted the recommendation of M&C 2019-244 to reallocate $187,000 of surplus funds from other completed 2019 General Fund Capital Program Transportation Category projects and further to increase the Contract award amount to Galbraith Construction Ltd. from $1,189,001.10 to $1,546,001.10. ANALYSIS The watermain, sanitary and storm sewer installation and street reconstruction for this project commenced in June 2019 and was completed in October 2019. As is normal for most large construction projects there has been some unforeseen work arise through the course of the construction project. Most of the unforeseen work to date has been what is considered typical for a project of this nature with one exception. During the course of the works, the Contractor encountered contaminated soils that was inconsistent with previous projects in the area. As per the Department of Environment and Local Government regulatory requirements, the City immediately informed the local Environment Inspector that material excavated during construction contained petroleum products or derivatives. The Department of Environment requested that an environmental engineering consultant be retained to assess, sample, recommend a course of action and report on the findings to the City and the Environment. The City requested Dillon to assess the situation and test, advise and report on the contaminant(s) found. At the request of the Department of Environment and Local Government samples were completed on Mecklenburg Street in order to determine the level obtained samples, from several locations along the street. All samples were sent away for testing and the lab test results came back positive for petroleum product contamination on each of the samples. - 3 - The areas of contaminated soil were excavated, treated and disposed of at an approved site. Contaminated soils such as these are not able to be disposed of in the same manner as common excavation. The estimated additional costs incurred for this unforeseen work includes the cost of removal, treatment and disposal. City staff attempted to minimize the impact to the project by reusing material in the backfill process where possible, helping to mitigate some of the potential costs. FINANCIAL IMPLICATIONS The environmental engineering consultant has completed their soil sampling work and have provided their site recommendations to the City and the Department of Environment and Local Government. The recommendations included excavation, removal, treatment and disposal of the contaminated soils. The final report has now been submitted to the Department of Environment and Local Government. The original contract included a contingency in the amount of $127,000 for typical unforeseen work that would arise over the course of construction. Normally, this contingency amount would be sufficient to cover unforeseen work but with the contaminated soils encountered, the contract will exceed the award amount by approximately $ 452,000 based on final quantities. Additional supplementary funding in the amount of $95,000 is now required to offset the additional costs identified in this report. It is proposed to utilize $95,000 of surplus funding from the Engineering Investigations and Design line item approved in the 2019 General Fund Capital Program Transportation Category. STRATEGIC ALIGNMENT specifically as it relates to investing in sustainable City services and municipal infrastructure. SERVICE AND FINANCIAL OUTCOMES Staff have proceeded with the removal and disposal of the contaminated soils encountered as per environmental regulations and this report provides the final project costs. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS N/A ATTACHMENTS N/A COUNCILREPORT M&C No. 2019-333 Report Date November 28, 2019 Meeting Date December 02, 2019 Service Area Finance and Develop Saint John Administrative Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Fundy Quay Develop Saint John OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Author Commissioner/Dept. Head City Manager Jeffrey Cyr Steve Carson John Collin RECOMMENDATION 1. That the City of Saint John enter into an Option Agreement with Fundy Quay Developments Inc. regarding the site known as Fundy Quay in the form as attached to this M. + C. No. 2019-333; and 2. That the Mayor and Common Clerk be authorized to execute said Option Agreement. EXECUTIVE SUMMARY The purpose of this report is to outline the structure and provisions of an option agreement for the Fundy Quay and the draft business and financial terms for a ground lease agreement. Additionally, this report outlines both the process unfolded to select a developer and the technical analysis undertaken in support of preparing the attached agreements for the Fundy Quay. ŷĻƩĻ ğƩĻ ƷǞƚ ŅƚƩƒğƌ ƌĻŭğƌ ğŭƩĻĻƒĻƓƷƭ ğƷƷğĭŷĻķ Ʒƚ Ʒŷźƭ ƩĻƦƚƩƷ͵ ŷĻ ŅźƩƭƷ źƭ ğƓ ƚƦƷźƚƓ ğŭƩĻĻƒĻƓƷ ŅƚƩ ƷŷĻ ĻǝĻƓƷǒğƌ ƌĻğƭĻ ΛƷƚΏƚǞƓΜ ƚŅ ƷŷĻ ƭźƷĻ͵ ŷĻ ƭĻĭƚƓķ ğŭƩĻĻƒĻƓƷ źƭ źƓĭƌǒķĻķ ƷĻƩƒƭ ŅƚƩ ƷŷĻ ŭƩƚǒƓķ ƌĻğƭĻ ŅƚƩ ƷŷĻ ƦƩƚƦĻƩƷǤ͵ ŷĻ DƩƚǒƓķ \[ĻğƭĻ źƭ ƭƷźƌƌ źƓ ķƩğŅƷ ŅƚƩƒͲ ğƓķ Ǟźƌƌ ĬĻ ĭƚƒƦƌĻƷĻķ źƓ ƷŷĻ ŅƚƌƌƚǞźƓŭ Ќ ƒƚƓƷŷƭ͵ PREVIOUS RESOLUTION There is no previous resolution on this project. REPORT - 2 - At the heart of the City of Saint John sits the Fundy Quay development site. This prime waterfront property represents the best and highest profile development opportunity and dynamic destination for people to gather, live, learn, play, grow and celebrate. A reimagined Fundy Quay will serve to enhance the Saint John urban experience through an eclectic mix of uses such as retail and commercial space and services, specialty shops and boutiques, residential condominiums and apartments, hospitality, entertainment, cultural and educational uses, green spaces, cafes, and waterfront amenities that will truly make the site a vibrant catalyst for future activity. In late 2018, the Proposed New NB Museum planned for the site was cancelled by the Province and DevelopSJ began evaluating alternative options to move forward the This has culminated in an agreement on the primary business and financial terms for an option and ground lease (to-own) agreement with the Fundy Quay Developments Inc. (FQD) (part of the Elias Management Group of Companies). THE CALL FOR EXPRESSIONS OF INTEREST In April 2019, Develop Saint John issued a call for expressions of interest for the development of the Fundy Quay. This process solicited two formal responses from capable developers interested in the project. An evaluation committee was established by Develop Saint John and included City and DevelopSJ staff, members of the Develop Saint John Board of Directors, and other strategic community members. The call for expressions of interest envisioned the Fundy Quay being re-imagined as an eclectic mix of uses such as retail and commercial space and services, specialty shops and boutiques, residential condominiums and apartments, hospitality, entertainment, cultural and educational uses, green spaces, cafes, and public spaces that will truly make the site a vibrant catalyst for future waterfront activity. The expression of interest call established a clear set of criteria for selecting the proponent best positioned to bring this vision to life. Following a rigorous proposal review process, the Fundy Quay Developments Inc. was recommended as the successful proponent for the development of the Fundy Quay and subsequently approved by the Board of Directors of Develop Saint John on June 6th, 2019. DUE DILIGENCE COMPLETED Both during and following the the call for expressions of interest process, considerable due diligence has been completed to allow Develop Saint John to better understand the site and the best options for the City moving forward. This work included: Retaining Cushman & Wakefield to support the site valuation and financial analysis efforts; Engineering analysis by CBCL & Conquest Engineering to support the Bi-Lateral funding application and to better understand site conditions and their fiscal impact on development; An analysis of the economic impact and business case by TCI management consultants; - 3 - Detailed analysis of project economics, including pro-forma and discounted cash flow modeling for multiple scenarios; and of a strategy for structuring the option agreement. Key Findings: The detailed analysis undertaken by Develop Saint John and its consulting team resulted in both re-affirming the Fundy Quay Developments Inc. as the preferred option for the development of the Fundy Quay, as well as providing the following critical findings with regards to the viability of site development: Density is Critical o Piling costs are fixed on the western portion of the site, so a project must maximize the return on that investment Phasing Significantly Increases Viability o As density is important for the viability of future projects on the Fundy Quay, the ability for the market to absorb new development in phases is critical. An inability of a proponent to phase the project will likely result in the need to secure large government leases and extremely high rental rates. For this reason, having a developer committed to operating in Saint John increases the likelihood of project success. Residential Development Can Absorb the Piling Costs o At 6 - 8 storeys, standalone residential projects were viable at rates in line with rental trends in the Uptown. Maximizing Residential Development is What Will Make the Fundy Quay Viable o The current market depth of the Central Peninsula is projected at 1,200 units from 2018-28, which could accommodate significant residential development on the Fundy Quay. In addition to these key findings, work with Cushman & Wakefield also identified alternative options worthy of consideration as a fallback option, should FQD choose not to exercise their option. More specifically, given the strength of the residential market, it was advised that should an integrated mixed-use project (as proposed by FQD) not proceed, that market demand exists to subdivide the property into 6 parcels for sale as single residential development projects. While not as beneficial to the City as an return on its investment in infrastructure such as the seawall. PRINCIPLES GUIDING THE AGREEMENT Based on the information outlined in this report and the previous feedback from both the EOI review committee and the Develop Saint John Board of Directors, the following principles were developed to guide the preparation of the option agreement framework: - 4 - We want a real project, no more false starts An iconic and transformational development Collaborative, & development focused process A fair price for the land The real money is in the tax base Flexibility to change course, should the project not progress as planned -ready site at this point THE OPTION AGREEMENT As negotiations moved forward with FQD, it was determined that the best approach for the site was the signing of an option agreement. In previous efforts to develop the Fundy Quay, no formal agreements of this nature were signed, resulting in drawn out and undefined processes for negotiation and due diligence. The signing of an option agreement provides a number of benefits for both the City and the Developer. This includes: City of Saint John Benefits Sets a clear and pre-defined timeline for due diligence, and allows for the establishment of stage-gates; Includes payments for the option, to create key decision points for the developer and mitigate any risk of speculation; Allows the City an opportunity to prepare the site for development, maximizing the value of the land; and proj FQD Benefits Supports FQD in having more effective discussions with regards to tenants, investors, and in pursuing project financing; It allows FQD the opportunity to complete further due diligence and to build the business plan for the property; and It provides certainty for FQD to begin investing resources into project planning and design. TIMELINE FOR THE OPTION AGREEMENT The proposed option agreement will cover the period of 2020 and 2021, and is structured to encourage the developer to move the project forward, while establishing clear milestones where FQD must inceasingly commit to the project. The timeline for the option period is established within attachment 1 of this report. During the option period, the City will be undertaking the infrastructure work required to prepare the site for development, subject to the approval of federal and provincial - 5 - infrastructure funding required to close the agreement. During the first year, FQD will work closely with Develop Saint John to support political efforts to secure the infrastructure funding (which are currently underway), while also completing their own due diligence, which will include: Assembling a project team with the experience necessary to complete the development; To prepare concept plans and complete a minimum of one public engagement in coordination with Develop Saint John and the City; To complete the business and project plans demonstrating viability and proposed phases for the project; and To acquire the Provincial portion of the property. In addition to the due diligence requirements above, to extend the option agreement into the second year (2021), FQD will be required to provide a non-refundable $250,000 deposit to the City before December 15, 2020. This will act as a critical decision point for FQD to move the project forward or to return control of the property to the City. Should FQD provide the deposit, this will provide the City confidence that the project is moving forward. Should FQD choose not to provide the deposit, the City will have the flexibility to pivot and pursue alternative options for the site. At the end of 2022, FQD will be required to exercise the option or forfeit their $250,000 deposit. THE GOUND LEASE (TO-OWN) Upon FQD exercising the option agreement, they will enter into a ground lease (to-own) agreement with the City of Saint John. The ground lease will last for a maximum of up to th 25 years, with FQD required to purchase the site by the conclusion of the 25 year or at an earlier date. The ground lease model provides a number of advantages which support the viability for the development of the Fundy Quay. Primarily, it offsets challenges in financing large land acquisitions, which typically require substantial down payments and have high interest rates. With the site challenges that already exist on the Fundy Quay, this approach helps to improve project viability and to best position the development for success. THE STRUCTURE OF THE AGREEMENT The agreement is structured to ensure the development has the greatest opportunity to succeed, while also ensuring that the City receives a good price for the land and has the flexibility to change course should FQD decide not to proceed. This section of the report provides a high level overview of the primary business and financial terms agreed upon with FQD. The detailed draft agreement is agreement, and will be finalized and brought back to Common Council for approval within the next 3 months. A Strong Valuation, Balanced with Performance Incentives: To encourage the development of the site, while managing the risks of locking down the property for a long period of time, both parties have agreed to a strong valuation of the property at $6.45 million ($35 psf). This is balanced with performance incentives that reduce the price as the developer achieves the build-out of the project. Should the development exceed an investment in buildings of over $100 million, the price for the land can be -6- reduced to a valuation of $3.6 million ($19.45 psf), which is comparable to the previous deals for the Museum and Rank Inc. In this scenario, the reduced price would be significantly offset by increased tax revenues. Lease-to-Own: The deal will be a lease-to-own arrangement, over a period of 25 years. At the end of the 25-year period, FQD will be required to purchase the property. The City will apply a low interest financing charge, inteneded to support the project and still provide the City with a strong return on its investment. Additionally, FQD will be provided options to buy-out the lease on an annual basis throughout the 25 year period. A breakdown of the lease payments are outlined in Lease Components Paid for the duration of the lease, unless FQD Base Payment: $175,000 exercises its option to buy-out the lease. Matched contribution to support maintenance Maintenance Contribution: of the seawall and public space. Begins in year 6 $25,000 (Indexed to CPI and adjusted and continues to year 50, regardless of whether every 10 years) FQD exercises its option to buy-out the lease. The forgivable portion is a built-in incentive. This payment declines proportionally as FQD Forgivable Payment: $75,000 reaches the minimum performance target of $100 million invested in buildings. Obligation to Purchase: In addition to the lease payments, FQD will be provided with options to purchase the property on an annual basis over the 25 year period. The property must be purchased by the end of year 25. The pricing for the purchase options are in alignment with the valuation and incentive structure of the lease payments. For this reason, the cost to purchase the site changes based on the number of years FQD has made lease payments and the amount of tax -7- revenue that the City has received or is projected to receive over the 25 year lease term. Lease. Project Infrastrucure: The property valuation used in this deal is based upon the City providing FQD with a development ready site. This will require the City to complete the following infrastructure: Repair and raising of the seawall (funding already secured); Remediation or management of contaminated soils (included in bi-lateral application); and Regrading of the site to raise the elevation an additional 1.5 metres (included in bi-lateral application). The completion of this infrastructure is conditional upon the City obtaining federal and provincial funding support. As the seawall has already been approved for federal funding, this requires at a minimum the soil remediation and site regrading funding to -Lateral funding application. In addition to these items, public amenity infrastructure funding will be required to ensure the development of public space can be coordinated with the overall development of the property. Should -Lateral funding application not be approved, the viability of the development of the site is uncertain, however, FQD has committed to work with the City of Saint John in exploring all possible options. In addition to the infrastructure projects identified above, there are additional components included as part of the Bi-Lateral funding application which are not requirements or responsibilities of the City. Instead, these are recognized as possible components of the project which would add value, but will need to undertake further evaluation to determine the business case. Infrastructure Infrastructure City Optional Required to Closeis Responsible forInfrastructure Seawall repaired & Harbour Passage District Energy raisedextension Pedway connection Contaminated soils Loyalist Plaza Underground addressed parking Site raised 1.5 metres Infrastructure Maintenance Fund: As part of FQD maintenance contribution will be matched by the City of Saint John for a 50 year period. This fund will allow the City, working collaboratively with FQD, to ensure that site infrastructure is proactively maintained, significantly reducing future capital costs for the City. Eligible uses of the infrastructure maintenance fund will be for capital maintenance and repairs to the sea wall, and long term capital maintenance projects for Harbour Passage (along the perimeter of the site) and Loyalist Plaza. - 8 - -Purchase the Site: Should FQD exercise the option to enter into the lease agreement and no development proceed within two years, the City will have the ability to terminate the lease, subject to a 6 month cure period in which FQD has the opportunity correct the issue. Should the City terminate the lease, $250,000 (one years lease payment) will be refunded. Additional Key Provisions: In addition to the main business and financial terms agreed upon with FQD, the following minor terms are also agreed to form part of the agreement for the property. This includes: Parking and site revenue will be under the control of the City during the option period. Once the ground lease is in effect, commercial parking must until development has begun. FQD will be responsible for internal site infrastructure above and below ground, excluding harbor passage and the seawall. Upon the purchase of the property, FQD will subdivide and transfer harbour passage and the seawall to the City. FQD will be responsible for all property taxes & utilities during the ground lease period. NEXT STEPS Common Council approval of the option agreement; Mayor and Clerk execute the option agreement with the Fundy Quay Developments Inc.; Finalization of the Ground Lease over the next 3 months; -Lateral Funding Application expected by late 2019 / early 2020; and Common Council approves and authorize the execution of the Ground Lease in the first quarter of 2020. STRATEGIC ALIGNMENT Responsibility, Growth and Propserity, and Vibrant Safe City. It is also a strategic SERVICE AND FINANCIAL OUTCOMES The development of the Fundy Quay will be an important tax base generator and transformational project for the City of Saint John. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS - 9 - regarding the structure of the deal and feedback has been incorporated into the draft agreements. The Growth and Community Development Service has been consulted heavily throughout the process, and were included in the proposal review committee for the selection of a developer. infrastructure capacity required to support a project of this magnitude. preparation of the agreements for the option and ground lease for the Fundy Quay. ATTACHMENTS 1. Presentation 2. Option to Lease Agreement 2019 28, November Fundy Quay Option Agreement Saint John Common Council THE VISION ğƓ ƩĻƭźķĻƓƷźğƌ ğƓķ ğƦğƩƷƒĻƓƷƭͲ A ĬƚǒƷźƨǒĻƭͲ ǞğƷĻƩŅƩƚƓƷ ğĭƷźǝźƷǤ͵ źƒğŭźƓĻ ƷŷĻ CǒƓķǤ vǒğǤ ğƭ Ώ ƭźƷĻ ğ ǝźĬƩğƓƷ ĭğƷğƌǤƭƷ ŅƚƩ ŅǒƷǒƩĻ ĭƚƓķƚƒźƓźǒƒƭ ƭŷƚƦƭ ğƓķ A development for wĻ ĻĭƌĻĭƷźĭ ƒźǣ ƚŅ ǒƭĻƭ ƭǒĭŷ ğƭ ƩĻƷğźƌ ğƓķ Fundy Quay that will: ĻķǒĭğƷźƚƓğƌ ǒƭĻƭͲ ŭƩĻĻƓ ƭƦğĭĻƭͲ ĭğŅĻƭͲ ŷƚƭƦźƷğƌźƷǤͲ ĻƓƷĻƩƷğźƓƒĻƓƷͲ ĭǒƌƷǒƩğƌ ğƓķ ĭƚƒƒĻƩĭźğƌ ƭƦğĭĻ ğƓķ ƭĻƩǝźĭĻƭͲ ƭƦĻĭźğƌƷǤ ğƓķ ƦǒĬƌźĭ ƭƦğĭĻƭ ƷŷğƷ Ǟźƌƌ ƷƩǒƌǤ ƒğƉĻ ƷŷĻ REQUIREMENTS - A all involved. development. focused process. No more false starts. An iconic and transformational A collaborative and development A deal that protects the interests of BACKGROUND 19 2,800,000 - $840,000$440,000 $ $1,815,000$1,440,000 - Net Cash Flow 400,000 Value - 2,800,000 $375,000 $ - +$3,640,000+$1,375,000 Transaction Cash Flow Estimates 2011 Transaction Demolition of Building Sale of Land to Province Demolition of Building 2 City Purchases the Coast Guard Site Coast Guard Lease & Parking Revenue Former Coast Guard Site 19 - Year 2011201820182019 2011 Site & Financial Background School New Central Peninsula Drive Interchange Route 1 Ashburn / Retail Fundy Quay Development Today: Momentum is building completed in short supply Action Plan NeighbourhoodIncreased vibrancy in the uptownResidential units Tourism numbers growing ---- Today: Momentum is building PROCESS Bill MacMackinDale KnoxJacqueline HamiltonSteve CarsonAlanna Waberski Evaluation Committee STEP ONE April 12, 2019 Fundy Quay Call for Expressions of Interest Estates Harbour Estates Fundy Vimy tğƩƷ ƚŅ ƷŷĻ 9ƌźğƭ ağƓğŭĻƒĻƓƷ DƩƚǒƦ ƚŅ /ƚƒƦğƓźĻƭ Fundy Quay Developments Inc. part 1 reliant on Provincial project components - Meets all business case requirementsFamiliar with the site{ŷƚƩƷƌźƭƷĻķ źƓ ƦƩĻǝźƚǒƭ ĭğƌƌ ŅƚƩ źƓƷĻƩĻƭƷ Skin in the game\[ƚĭğƌ ķĻǝĻƌƚƦĻƩ Private investment, non BENEFITS Project viability planning Vendor selection rationale THE DEAL Fundy Quay Developments Inc. year extension - > 2021/22 WE ARE HERE ƩĻŅǒƓķğĬƌĻ 2020 Ώ ƩĻŅǒƓķğĬƌĻ Ώ CĻĻ ŅƚƩ hƦƷźƚƓʹ υЊ ǤĻğƩ ƚƓĻͲ ğƓķ υЋЎЉͲЉЉЉ ǤĻğƩ ƷǞƚͲ ƓƚƓCĻĻ ŅƚƩ 9ǣƷĻƓƭźƚƓʹ υЊ ƚŅ ƭĻğǞğƌƌ ƓƚƷ ķƚƓĻͲ υЋЎЉͲЉЉЉ ƚƷŷĻƩǞźƭĻͲ ƓƚƓ year Option with possible 1 - Exclusive Option to lease site to under stated conditionsDraft Ground Lease attached to Option (main business and financial terms settled)2Main City obligations: exclusivity of site to EMG, seawall construction SEP ONESTEP TWO Option Agreement: Optional Infrastructure District EnergyPedway connectionUnderground parking Responsible Infrastructure Harbour Passage extensionLoyalist Plaza sharing - metres ƌğƷĻƩğƌ ŅǒƓķźƓŭ ğƦƦƌźĭğƷźƚƓ Ώ Infrastructure {ĻĭǒƩĻķ ĻǣƷĻƩƓğƌ ŅǒƓķźƓŭ.ź Seawall repaired & raisedContaminated soils addressedSite raised 1.5 Required to Close STEP THREE SEP ONE Infrastructure cost -- - own agreement - {ƷƩǒĭƷǒƩĻķ Ʒƚ ĻƓĭƚǒƩğŭĻ ğƓ ĻğƩƌźĻƩ ƦǒƩĭŷğƭĻ to year term, EMG must purchase by year 25 - - 25City has option to terminate if no development after 2 yearsPerformance incentives built into the lease STEP FOURSEP ONE Lease 10 9 8 Forgivable Portion 7 6 5 υЋЎͲЉЉЉΉǤĻğƩ ĬĻŭźƓƭ źƓ ǤĻğƩ Џ 4 payment structure Lease Payment Structure Maintenance Contribution υАЎͲЉЉЉΉǤĻğƩͲ ŅƚƩŭźǝĻƓ ğƭ ķĻǝĻƌƚƦƒĻƓƷ ƩĻğĭŷĻƭ 3 υЊАЎͲЉЉЉΉǤĻğƩ 2 Base Payment 1 Base Payment:Maintenance Contribution:Forgivable Payment:ƒźƓźƒǒƒ źƓǝĻƭƷƒĻƓƷ ƷğƩŭĻƷ ƚŅ υЊЉЉͲЉЉЉͲЉЉЉ źƓ ĬǒźƌķźƓŭƭ $0 $50,000 $300,000$250,000$200,000$150,000$100,000 ƦƭŅ ЊАΜ Ώ ΛЋЉЊЌ ЊЊΜ Ώ ƦƭŅ ΛЋЉЉЏ COMPARABLES:aǒƭĻǒƒ θ υЊБ͵ЍЌ wğƓƉ ǝğƌǒğƷźƚƓ θ υЊБ͵ЏЎ IğƩķƒğƓ θ υЊЉ͵ЍЎ ƦƭŅ ŷźƭ źƭ ǞŷĻƩĻ ǞĻ ǞğƓƷ Ʒƚ ĬĻ͵ $6,450,000 / $35 psf $3,600,000 / $19.50 psf 5ĻǝĻƌƚƦĻƩ DĻƓĻƩğƷĻƭ \[źƷƷƌĻ ğǣ wĻǝĻƓǒĻ ŅƚƩ /źƷǤ 5ĻǝĻƌƚƦĻƩ DĻƓĻƩğƷĻƭ {ǒĬƭƷğƓƷźğƌ ğǣ wĻǝĻƓǒĻ ŅƚƩ /źƷǤ Density Completed Price Achieved STEP FIVE NEXT STEPS lateral funding for Seawall infrastructure late - Common Council approval of Option AgreementMayor and Clerk execute the Option Agreement with Fundy Quay Developments Inc.Finalization of the Ground Lease over next 3 monthsBi2019/early 2020Community consultation on design in 2020 A to the table. work and play. residential units. current momentum. to be a great place to live, at the right time: Meeting proven demand for This is the right deal Building on past experience and Bringing local, private investment QUESTIONS GETTING DEALS DONE OPTION TO LEASE AGREEMENT THIS AGREEMENT made this __ day of _______, 2019. BETWEEN: THE CITY OF SAINT JOHN, a body corporate maintaining its City Hall th on the 8 Floor, City Hall Building, 15 Market Square, P.O. Box 1971, Saint John, NB, E2L 4L1, (hereinafter referred to as the Owner -and- FUNDY QUAY DEVELOPMENTS INC., a body corporate maintaining its registered office at \[address\], (hereinafter referred to as the Developer WHEREAS: A. The Owner is the owner of the lands and premises Water Street in the City of Saint John, New Brunswick and more particularly identified in Site; B. The Owner envisions that the Site will be developed to accommodate a mix of uses such as retail and commercial space and services, specialty shops and boutiques, residential condominiums and apartments, hospitality, entertainment, cultural and educational uses, green spaces, cafes, and transportation systems that will make the Site a vibrant catalyst for future waterfront activity; C. The Developer carries on the business of residential and commercial real estate development, and related activities; D. Following a Request for Expressions of Interest dated April 12, 2019 issued by Develop Saint John Inc. on behalf of the Owner, the Developer was selected as the developer for the Site to whom a long-term ground lease could be granted; E. Prior to entering into the ground lease, the Owner wishes to further explore the Developer and development plans for the Site, and has agreed to grant to the Developer an option to lease the Site in the interim, subject to the terms and conditions herein. NOW THEREFORE in consideration of the Option Fee paid by the Developer to the Owner, and the mutual covenants and agreements herein contained, the Parties agree as follows: 1. DEFINITIONS AND INTERPRETATION 1.1 Definitions The following expressions where used in this Agreement, shall have the following meanings: 12364095223,,,MC 2019 - 333 Supporting Document 2 - 2 - (a)Agreementmeans this option to lease agreement; (b) Development means the development on the Site with a view to the redevelopment of Fundy Quay as contemplated in Recital B hereof; (c) means the effective date of this Agreement, being ________________; (d) means written notice served by the Developer on the Owner within the Initial Option Period which submits the Developer's request to extend the length of time that it may exercise the option granted herein to lease the Site; (e) Extension Period means an additional period of one year at the discretion of the Owner from the end of the Initial Option Period pursuant to Section 2.4 herein; (f) Initial Option Period means the period starting on the Effective Date and ending on December 31, 2021; (g) Lease means the ground lease in generally the same form and having the same basic business and financial terms and conditions as the draft ground lease annexed hereto as Schedule B; (h) has the meaning given to it at Section 2.1; (i) Option has the meaning given to it at Sections 2.3 and 2.5; (j) Option Notice means written notice, in the form annexed hereto as Schedule served by the Developer on the Owner within the Option Period and which exercises the Developer's option to lease the Site; and (k) means the combined Initial Option Period and the Extension Period. (l) means the Parties to this Option Agreement. (m) has the meaning given to it in the recitals hereto; 1.2 Interpretation The captions and headings in this Agreement are for the convenience of reference only and do not affect the scope, intent or interpretation of any provision. This Agreement is governed by the laws of the Province of New Brunswick. 2. OPTION TO LEASE 2.1 Grant of Option a) In consideration of the Option Fee and subject to Section 2.2, the Owner hereby grants the Developer an option to lease the Site (the Option) on terms generally in accordance with the draft form of Lease set out in Schedule B attached hereto. 12364095223,,,MC 2019 - 333 Supporting Document 2 - 3 - b) This Option may be exercised by the Developer at any time during the Option Period by serving the Option Notice on the Owner provided both of the following conditions have been met: I. The Developer has fulfilled its obligations set out at Sections 3.1 and 3.2, II. The Developer has acquired the fee simple interest or a leasehold interest for a minimum term of 50 years to the lands currently owned by the Province of New Brunswick bearing Service New Brunswick parcel identifier number 55235105 and located adjacent to the Site. 2.2 Finalization of Form of Lease (a) The Developer acknowledges that the draft form of ground lease attached hereto as contains the basic business and financial terms and conditions upon which the Owner is prepared to lease the Site to the Developer and that supplementary terms and conditions and revisions to the terms and conditions contained in the draft form of ground lease may be contained in the final version of the Lease. (i) The Parties agree that in the event the Owner does not obtain the funding referenced at s. 4.2 and therefore by operation of section 4.2 the Owner does not carry out the infrastructure work contemplated at s. 4.1 (b) and (c), then only in such an event, the rent and purchase price provisions of the Ground Lease will be revised proportionately, pursuant to paragraph (b), to reflect the rent and purchase price of a non- development-ready site. (ii) The Parties also agree that in the event that the Owner receives the funding referenced at s. 4.2 and undertakes the work contemplated at s. 4.1 (b) and (c) but does not complete it before the expiry of the Option Period, then in such an event, the rent provisions of the Lease will be revised to reflect a temporary reduction to the Rent for each month the said work is not substantially complete. (b) Following the execution of this Option by both Parties, the Owner will prepare the final version of the Lease and the Parties will endeavor to settle the final form of Lease, acting reasonably, within (3) months of their execution of this Agreement. Subject to Subsections 2.2(a)(i) and 2.2(a)(ii), the Owner will consider reasonable requests of the Developer for modifications to portions of the Lease, but no modifications will alter the business or financial basis of the terms set out in the draft form of ground lease attac. (c) In the event that the Developer exercises the Option, it shall be understood and agreed by the Parties that insofar as there may be blanks or bullets in the settled form of the Lease, or schedules or affidavits may be missing thereto, or amendments necessary or desirable to deal in a commercially reasonable manner with any changes in law at the time the Option is exercised, such blanks, bullets, affidavits, schedules or amendments shall be completed by the Parties 12364095223,,,MC 2019 - 333 Supporting Document 2 - 4 - herein acting reasonably in accordance with the purpose and intent of this Option and the Lease. Both Parties agree to complete, execute and deliver the Lease, in substantially the same form as settled in accordance with Section 2.2(a), within thirty (30) days of the Owner's receipt of the Option Notice. 2.3 Fee for Initial Option Period In consideration of the Option and other rights granted hereunder, the Developer shall pay the Owner a fee as follows: (a) the fee for the period commencing on the Effective Date and ending on December 14, 2020, is ONE DOLLAR ($1.00) plus HST, payable upon the execution and delivery of this Agreement by the Owner; and (b) the fee for the period commencing on December 15, 2020 and ending on December 31, 2021 is TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000.00) plus HST, payable on or before December 15, 2020. 2.4 Extension Period a) The Developer may request that the Owner extend the Initial Option Period by one year ) by service of the Extension Notice on the Owner. b) Subject to subsection c), the granting of the Extension Period shall be at the sole discretion of the Owner. c) In the event that the Owner does not complete the public infrastructure construction contemplated at s. 4.1 before the expiry of the Initial Option Period, upon service of the Extension Notice, the Owner shall grant the Extension Period. 2.5 Fee for Extension Period a) Subject to subsection b), the Option Fee for the Extension Period granted by the Owner shall be TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000.00) plus HST annually, payable on or before the first day of the Extension Period. b) In the event that the Extension Period is granted pursuant to s. 2.4 c), and only in such event, the Option Fee for the Extension Period shall be one dollar ($1). 2.6 Option Fee Non-Refundable (a) The Option Fee shall be deemed to be fully earned by the Owner: (i) in the case of the $1.00 + HST fee, upon execution of this Agreement by the Owner; (ii) in 12364095223,,,MC 2019 - 333 Supporting Document 2 - 5 - the case of the $250,000.00 + HST fee, on December 15, 2020; and (iii) in the case of any fee required for the Extension Period, upon the granting of any such Extension Period by the Owner, and the Developer shall not be entitled to a refund of any part of the Option Fee under any circumstances, regardless of the date of expiration or termination of this Agreement. (b) In the event the Developer exercises the Option on or before the expiry of the Initial Option Period, the Owner will credit the fee for the Initial Option Period defined at section 2.3.(b) t payment due under the Lease . 2.7 Exclusivity The Owner agrees that during the Option Period, it shall not negotiate or enter into any agreements with any other parties with respect to the lease or sale of the Site. 3. OBLIGATIONS OF THE DEVELOPER 3.1 Qualifications of the Developer, Development Plans and Financing Prior to December 15, 2020, the Developer shall provide to the Owner the following: (a) (b) engineering and project management experience with similar waterfront development projects; and (c) concept plans for the Development, including a completed business and project plan demonstrating project viability and phasing; (d) a letter from a regulated financial institut to finance the entirety of the Development as described in the concept plans, including the completed business and project plans, referenced at paragraph (c). For clarity, no formal commitment letter from such financial institutions is required at this stage. 3.2 Public Consultation Prior to December 15, 2020, the Developer will hold a publicly advertised public consultation event together with Develop Saint John Inc. and the Owner, in an effort to generate public support for the Development including associated public space . 4. OBLIGATIONS OF THE OWNER 4.1 Public Infrastructure Construction 12364095223,,,MC 2019 - 333 Supporting Document 2 - 6 - Subject to Section 4.2, the Owner will use commercially reasonable efforts to carry out the following public infrastructure work before the expiry of the Option Period in order to deliver to the Developer a viable development Site: (a) repair and vertically extend the seawall running along the perimeter of the Site; (b) remediate contaminated soil at the Site in accordance with applicable environmental legislation and guidelines of the New Brunswick Department of Environment and Local Government or its equivalent; and (c) regrade and elevate the Site up to 1.5 m to accommodate for possible future rises in sea level. 4.2 Federal and Provincial Infrastructure Funding (a) public infrastructure work referred to in Subsections 4.1 (b) and (c) shall be subject to the Owner successfully obtaining the full amount of the federal and provincial government infrastructure funding for the soil remediation of the Site and the Site regrading (Infill/Coastal Flood Protection), for which funding an application was made under the Integrated Bilateral Agreement for the Investing in Canada Infrastructure Program on June 28, 2019 through the New Brunswick Regional Development Corporation (b) The Owner and the Developer shall work together in an effort to support the 5. USE OF SITE DURING OPTION PERIOD 5.1 Access for Investigations (a) The Owner grants to the Developer a non-exclusive right during the Option Period for the Developer and persons authorized by the Developer, at its sole risk and cost, to enter the Site at all reasonable times with or without vehicles and equipment to carry out inspections, testing, surveys and similar activities necessary to continuously assess the environmental and geophysical status of the Site. Prior to any such entry, the Developer shall provide a minimum of 72 hours written notice to the Owner along with a summary of its intended activities. (b) for the purposes set out , uninterrupted use of the Site, including the operation of a parking lot on the Site and the carrying out of public infrastructure or other construction work on the Site. (c) The Developer shall exercise its right of access and conduct all operations on the Site in a commercially diligent, careful and workmanlike manner. Unless the Developer elects to exercise the Option, the Developer shall, promptly upon the expiration or termination of this Agreement, and in any event within 15 calendar days following the completion of each of its inspections, tests, surveys or other activities, remove at its expense all equipment from the Site and repair at its expense any damage done to the Site as a result of the Developer exercising its 12364095223,,,MC 2019 - 333 Supporting Document 2 - 7 - right of access, or conducting inspections, tests, surveys or other activities on the Site. The Developer shall not be responsible for any pre-existing contamination by hazardous substances on the Site. (d) All entry onto the Site by the Developer, and persons authorized by the Developer, shall be at the sole risk and expense of the Developer and the Owner shall have no liability for any loss, injury or damage to persons or property arising therefrom. (e) The Developer, its agents, contractors, employees, successors and assigns shall not bring or permit to be brought, any hazardous substances onto the Site except with the prior written consent of the Owner and in accordance with all applicable laws relating to the environment. 5.2 Insurance Requirements of Developer (a) The Developer shall, at its sole cost and expense, take out and maintain in full force and effect, at all times throughout the Option Period, commercial general liability and property damage insurance, including personal liability, contractual liability, legal liability, non- protective insurance coverage with respect to the Site, written on a comprehensive basis with inclusive limits of at least five million dollars ($5,000,000) for each occurrence, or such higher limit as the Owner, acting reasonably, requires from time to time; (b) The said commercial liability insurance shall contain a provision for cross liability or severability of interest as between the Owner and the Developer. All property policies shall contain a waiver of any right of subrogation or recourse by the employees, whether or not any loss is caused by the act, omission or negligence of the Owner, its contractors, agents or employees. The Developer shall obtain from the insurers undertakings to notify the Owner in writing at least thirty (30) days prior to any cancellation thereof; and (c) All such insurance policies shall show the Owner as a named insured, and the Developer shall provide to the Owner within ten (10) calendar days of the Effective Date, and yearly thereafter on the anniversary of the Effective Date, and prior to any access to the Site by the Developer or its agents, certificates of all such insurance policies. 6. INDEMNIFICATION 6.1 By the Developer The Developer shall indemnify and save the Owner harmless against any and all liabilities, claims, damages, interest, penalties, fines, monetary sanctions, losses (including pure economic losses), costs (direct and indirect), and expenses whatsoever (including, without limitation, counse basis, reasonable costs of professional advisors, consultants and experts), except those arising from injury to property or injury to any person, firm, partnership or corporation, caused 12364095223,,,MC 2019 - 333 Supporting Document 2 - 8 - by the use, occupancy or presence of the Developer at, in, on or upon the Site, or the presence of any other person, firm, partnership or corporation at, in, on or upon the Site with the authorization of the Developer, throughout the Option Period. This indemnity shall survive indefinitely the expiration or earlier termination of this Option Agreement notwithstanding anything herein contained to the contrary. 7. EARLY TERMINATION 7.1 By the Developer The Developer may terminate this Agreement at any time during the Option Period upon giving thirty (30) days prior written notice to the Owner. 7.2 By the Owner The Owner may terminate this Agreement on written notice to the Developer if: (a) the Developer fails to pay the Option Fee pursuant to this Agreement when due hereunder; (b) the Developer becomes bankrupt or insolvent or takes the benefit of any statute for bankrupt or insolvent debtors or makes any proposal, an assignment or arrangement with its creditors, or any steps are taken or proceedings commenced by any person for the dissolution, winding-up or other termination of the existence or the liquidation of its assets; or (c) the Developer is in breach of any of its obligations under this Agreement. 7.3 Notices Any notice, election, demand or exercise of option to which a party to this Agreement is entitled or is required to give, is deemed to have been given to any other party, if it is in writing and delivered personally or, if mailed in New Brunswick by postage prepaid registered mail, or if sent by facsimile transmission and addressed as follows: (a) if to the Owner: The City of Saint John th 8 Floor, City Hall Building 15 Market Square P.O. Box 1971 Saint John, NB, E2L 4L1 Fax: 506- Attention: Common Clerk -with a copy to- Develop Saint John P.O. Box 1971 Saint John, NB E2L 4L1 Attention: CEO 12364095223,,,MC 2019 - 333 Supporting Document 2 - 9 - (b) if to the Developer: Fundy Quay Developments Inc. 37 Rothesay Park Road Rothesay, NB E2E 5T7 Attention: Dr. David Elias Any notice so given is deemed conclusively to have been given and received when personally delivered or sent by prepaid courier service or other electronic communication. 7.4 Time of Essence Time is of the essence of this Agreement and each of the terms, conditions, covenants and agreements thereof. 7.5 Counterparts For the convenience of the Parties hereto, this Agreement may be executed and delivered in two or more counterparts, or by facsimile or e-mail transmission of Adobe Acrobat files or either of them, each of which shall be deemed to be an original and all of which together shall constitute one and the same instrument. Any party executing this Agreement by facsimile or PDF file shall, upon the request by any other party, provide an originally signed counterpart of this Agreement. 7.6 Registration The Developer may register a short-form notice of this Agreement on the title to the Site. The Owner agrees to execute such further instruments as are reasonably necessary to permit the Developer to effect such registration. 7.7 Further Assurances Each party agrees to execute such further assurances as may be reasonably required from time to time by the other party to more fully effect the true intent of this Agreement. 7.8 No Assignment The Developer shall not assign this Agreement without first obtaining the written consent of the Owner, which consent shall not be unreasonably withheld. Any transfer or issue by sale, assignment, bequest, inheritance, operation of law or other disposition, or by subscription, of any part or all of the corporate shares of the Developer or any other corporation which would result in any change in the effective direct or indirect control of the Developer, shall be deemed to be an assignment. No permitted assignment shall release the Developer from its obligations and covenants hereunder. 7.9 No Successors and Assigns Subject to the restriction on assignment, this Agreement shall enure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns. 12364095223,,,MC 2019 - 333 Supporting Document 2 - 10 - 7.10No Partnership Nothing contained herein will be deemed to create any relationship between the Owner and Developer other than the relationship of optionor and optionee. \[SIGNATURE PAGE FOLLOWS\] 12364095223,,,MC 2019 - 333 Supporting Document 2 - 11 - IN WITNESS WHEREOF this Agreement has been executed by the Parties and their respective corporate seals have been affixed on the date first above written. Owner: THE CITY OF SAINT JOHN Per: _______________________ Name: Title: Per: _______________________ Name: Title: Common Council Resolution: _____________________________ Developer: FUNDY QUAY DEVELOPMENTS INC. Per: _______________________ Name: Title: Per: _______________________ Name: Title: 12364095223,,,MC 2019 - 333 Supporting Document 2 Schedule A Site PID 55235113 Place Name: Saint John Parish/County: City of/Ville de Saint John/Saint John Designation of Parcel on Plan: Lot 18-2 Title of Plan: City of Saint John Subdivision Registration County: Saint John Registration Number of Plan: 38429529 Registration Date of Plan: 2018-09-27 PID 55221881 Place Name: Saint John Parish/County: City of Saint John/Saint John Label of Parcel on Plan: portion of South Market Wharf a Public Street/partie de la quai sud Market, une rue Publique Registration Number of Plan: 33263436 Registration County: Saint John Registration Date of Plan: October 30, 2013 Title of Plan: Plan of Survey Showing Ward Street, Peters Wharf and South Market Wharf, Montrant Rue Ward, quai Peters, et quai sud Market 12364095223,,,MC 2019 - 333 Supporting Document 2 Schedule B Draft Form of Lease 12364095223,,,MC 2019 - 333 Supporting Document 2 Option Notice *** NOTICE OF EXERCISE OF OPTION FUNDY QUAY TO: The City of Saint John 8th Floor, City Hall Building 15 Market Square P.O. Box 1971 Saint John, NB, E2L 4L1 Fax: 506- Attention: Common Clerk -with a copy to- Develop Saint John P.O. Box 1971 Saint John, NB E2L 4L1 Attention: CEO Pursuant to Section 2.1 of an Option to Lease Agreement dated the day of , 2019 between The City of Saint John, as Owner, and Fundy Quay Developments Inc., as Developer (the hereby exercises its option to lease the Site (as defined in the Option Agreement) subject to the terms and conditions contained in the Option Agreement. Dated this ___ day of , 20___. \[DEVELOPER\] Per: ____________________________ GROUND LEASE FOR FUNDY QUAY BETWEEN: THE CITY OF SAINT JOHN, a body corporate maintaining its City Hall on the th 8 Floor, City Hall Building, 15 Market Square, P.O. Box 1971, Saint John, NB, E2L 4L1, -and- FUNDY QUAY DEVELOPMENTS INC., a body corporate maintaining its registered office at 37 Rothesay Park Road, Rothesay, NB, E2E 5T7, TABLE OF CONTENTS ARTICLE 1 - DEFINITIONS ....................................................................................................... 2 1.1 Definitions ............................................................................................................... 2 ARTICLE 2 - DEMISE AND TERM ............................................................................................ 5 2.1 Demise .................................................................................................................... 5 2.2 Term ....................................................................................................................... 5 2.3 Overholding ............................................................................................................. 5 2.4 ............................................................... 5 2.5 ..................................................... 6 2.6 ............................................................................. 6 2.7 Easements in Favour of Lessor ............................................................................... 7 ARTICLE 3 - RENT .................................................................................................................... 7 3.1 Covenant to Pay, Net Lease ................................................................................... 7 3.2 Rental Taxes ........................................................................................................... 7 3.3 Payment Method ..................................................................................................... 7 3.4 Rent Past Due ......................................................................................................... 8 ARTICLE 4 - GROUND RENT ................................................................................................... 8 4.1 Ground Rent ........................................................................................................... 8 ARTICLE 5 - ADDITIONAL RENT ............................................................................................. 8 5.1 Additional Rent ........................................................................................................ 8 5.2 Realty Taxes ........................................................................................................... 8 5.3 Contesting Realty Taxes ......................................................................................... 9 5.4 Business and Other Taxes ...................................................................................... 9 5.5 Utilities and Services ............................................................................................... 9 5.6 Contribution to Infrastructure Maintenance Fund....................................................10 5.7 Performance Based, Forgivable Payments ............................................................10 ARTICLE 6 - STRUCTION OF IMPROVEMENTS ......................11 6.1 Harbour Passage Extension ...................................................................................11 6.2 Loyalist Plaza .........................................................................................................11 6.3 Outdoor Amenity Space .........................................................................................11 6.4 Other Strategic Infrastructure .................................................................................11 6.5 Commencement of Construction of Improvements ................................................11 6.6 Duties of Lessee in Construction ............................................................................12 6.7 Fire and Liability Insurance During Construction ....................................................13 6.8 Lessee Failure to Build ...........................................................................................14 ARTICLE 7 - OWNERSHIP, MAINTENANCE AND REPAIR ....................................................14 7.1Ownership of Improvements and Fixtures..............................................................14 7.2 Maintenance and Repair of Site and Improvements ...............................................15 7.3 Inspection by Lessor ..............................................................................................15 7.4 Repairs, Alterations, Improvements .......................................................................16 7.5 Waste, Nuisance ....................................................................................................16 7.6 Services .................................................................................................................16 7.7 Lien Claims ............................................................................................................17 ARTICLE 8 - USE, COMPLIANCE WITH LAWS ......................................................................17 8.1 Use ........................................................................................................................17 8.2 Compliance with Laws ............................................................................................17 8.3 Compliance with Environmental Laws ....................................................................18 ARTICLE 9 - INSURANCE AND INDEMNITY ..........................................................................19 9.1 mnity ................................................................................................19 9.2 ................................................................................................19 9.3 Insurance Trustee ..................................................................................................20 9.4 Insurers ..................................................................................................................22 9.5 .........................................................................................22 9.6 Evidence of Insurance ............................................................................................22 ARTICLE 10 - ASSIGNMENT, MORTGAGING AND SUBLETTING ........................................22 10.1 Assignment by Lessee ...........................................................................................22 10.2 Subletting by Lessee ..............................................................................................22 10.3 Status of Lessee after Assignment or Subletting ....................................................22 10.4 Non-Disturbance of Sublessees .............................................................................23 10.5 Lessee Financing ...................................................................................................23 10.6 .........................................................................................................24 10.7 Status Certificates ..................................................................................................25 ARTICLE 11 - QUIET ENJOYMENT.........................................................................................25 11.1 Quiet Enjoyment.....................................................................................................25 ARTICLE 12 - DAMAGE AND DESTRUCTION ........................................................................25 12.1 Damage or Destruction of Improvements ...............................................................25 12.2 Restoration of Improvements .................................................................................25 12.3 Damage or Destruction at End of Term ..................................................................26 12.4 Expropriation ..........................................................................................................26 ARTICLE 13 - DEFAULT ..........................................................................................................26 13.1 Default and Right to Re-enter .................................................................................26 13.2 Default and Remedies ............................................................................................27 13.3 ...........................................................................29 13.4 Distress ..................................................................................................................30 13.5 Costs ......................................................................................................................30 13.6Remedies Cumulative............................................................................................30 ARTICLE 14 - SETTLEMENT OF DISPUTES ..........................................................................30 14.1 Referral to Senior Management .............................................................................30 14.2 Mediation ...............................................................................................................31 14.3 Arbitration ...............................................................................................................32 14.4 Retention of Rights.................................................................................................33 ARTICLE 15 - GENERAL .........................................................................................................33 15.1 Force Majeure ........................................................................................................33 15.2 Effect of Waiver or Forbearance ............................................................................33 15.3 Obligations as Covenants and Survival of Obligations ...........................................33 15.4 Notices ...................................................................................................................33 15.5 Registration ............................................................................................................34 15.6 Number, Gender, Effect of Headings .....................................................................34 15.7 Severability.............................................................................................................34 15.8 Entire Agreement ...................................................................................................34 15.9 Successors and Assigns ........................................................................................35 THIS LEASE made the ___day of ___________, 20__, BETWEEN: th THE CITY OF SAINT JOHN, a body corporate maintaining its City Hall on the 8 Floor, City Hall Building, 15 Market Square, P.O. Box 1971, Saint John, NB, E2L 4L1, -and- FUNDY QUAY DEVELOPMENTS INC., a body corporate maintaining its registered office at 37 Rothesay Park Road, Rothesay, NB, E2E 5T7, (hereinaf WHEREAS: A. of Water Street in the City of Saint John, New Brunswick and more particularly identified B. The Lessor envisions that the Site will be developed to accommodate a mix of uses such as retail and commercial space and services, specialty shops and boutiques, residential condominiums and apartments, hospitality, entertainment, cultural and educational uses, green spaces, cafes, and transportation systems that will make the Site a vibrant catalyst for future waterfront activity; C. The Lessee carries on the business of residential and commercial real estate development, and has agreed to lease the Site from the Lessor for the purposes of its redevelopment as envisioned by the Lessor and described in recital B, in accordance with the terms and conditions herein. 2 WITNESSETH THAT THE PARTIES AGREE AS FOLLOWS: Article 1 - Definitions 1.1 Definitions In this Lease, unless there is something in the subject matter or context inconsistent therewith, the following terms have the following respective meanings: (a) Lessee under this Lease (except Ground Rent and Rental Taxes) either to the Lessor or otherwise including, without limitation, payment of Realty Taxes and charges for water, gas, electricity, and other utilities and other charges which may give rise to a lien upon the interest of the Lessor in the Site, whether or not (b) collectively, an application or applications by the Lessee for one or more building permits in relation to any Phase of the Development; (c) is a statutory holiday in the Province of New Brunswick; (d) (e) City Manager of the Owner, or such person as the City Manager may designate from time to time; (f) Commence CCommenced Cbona fide completion of the foundation of a building and thereafter proceeding diligently to complete such building; (g) ; (h) "CPI" means the All-items consumer price index for the City of Saint John as published by Statistics Canada (or its successor government department or agency) from time to time, or failing such publication, such other index as the parties may agree and, failing such agreement, as determined in accordance with Article 14 Settlement of Disputes; (i) -use development of the Site as contemplated by the Lessor in recital B hereof; (j) -law, order, ordinance, ruling, regulation, certificate, approval, consent or directive of any applicable federal, provincial or municipal government, governmental department, agency or regulatory authority or any court of competent jurisdiction: (i) relating to pollution or the protection of human health or the environment (including workplace health and safety); 3 (ii)dealing with filings, registrations, emissions, discharges, spills, releases or threatened releases of Hazardous Substances or materials containing Hazardous Substances; and/or (iii) regulating the import, storage, distribution, labelling, sale, use, handling, transport or disposal of a Hazardous Substance; (k) (l) greementsmeans all of the agreements or instruments entered into or to be entered into by the Lessee or any of its affiliates relating to the financing of the Development, including without limitation credit agreements and security documents; (m) le by the Lessee pursuant to Article 4; (n) damage to health, safety, property or the environment including, without limitation, any contaminant (as defined in the Clean Environment Act (New Brunswick)), pollutant, dangerous or potentially dangerous substance, noxious substance, toxic substance, hazardous waste, flammable or explosive material, radioactive material, urea formaldehyde foam insulation, asbestos, polychlorinated biphenyls, polychlorinated biphenyl waste, polychlorinated biphenyl related waste, and any other substance or material now or hereafter declared, defined or deemed to be regulated or controlled under any Environmental Law; (o) ments, structures and other installations located on, in or under any portion of the Site at any time throughout the Term, including chattels, equipment and machinery owned by the Lessee and including any additions, substitutions, alterations or replacements thereto or thereof; (p) has the meaning set out in Section 5.6; (q) (r) Improvements and/or the Lesseeinterest in this Lease, from time to time; (s) to time; (t) from time to time to; (u) construction of the Improvements as hereinafter defined, or from time to time any other architect as the Lessee may appoint in substitution, who shall be an 4 architect duly qualified in the Province of New Brunswick and a member in good standing of the provincial association of architects; (v) vertically extend the Seawall, the remediation of contaminated soil at the Site, and the regrading and elevation of the Site to accommodate for possible future rises in sea level; (w) 13.3; (x) (y) (z) s a distinct portion, phase or stage of the Development, and in the event the Development will be fully completed in one single phase or stage, shall mean such single phase or stage; (aa) (bb) (cc) shall have the meaning set out in Schedule (dd) in Section 13.1(2); (ee) (ff) (gg) (including local improvement rates), impost charges or levies, whether general or special, that are levied, charged or assessed from time to time by any lawful authority, whether federal, provincial, municipal, school or otherwise, and any taxes payable by the Lessor which are imposed in lieu of, or in addition to, any such real property taxes, whether of the foregoing character or not, and whether or not in existence at the date hereof, and any such real property taxes levied or assessed against the Lessor on account of its ownership of the Site or its interest therein, but specifically excluding any taxes assessed upon the income of the Lessor; (hh) (ii) (jj) ans any and all taxes or duties imposed upon the Lessor or the Lessee, measured by or based in whole or in part upon the Rent payable under the Lease, whether existing at the date of this Lease or hereinafter imposed by any governmental authority, including, without limitation, goods and services tax, harmonized sales tax, value added tax, business transfer tax, retail 5 sales tax, federal sales tax, excise taxes or duties, or any tax similar to any of the foregoing; (kk) the perimeter of the Site; (ll) (mm) of twenty-five (25) years commencing on the Commencement Date; and (nn) Article 2 - Demise and Term 2.1 Demise In consideration of the rents, covenants and agreements hereinafter reserved and contained on the part of the Lessee to be paid, observed and performed, the Lessor demises and leases to the Lessee, and the Lessee rents from the Lessor, the Site. 2.2 Term The Term shall be 25 years commencing on the Commencement Date and ending on , unless terminated earlier pursuant to the provisions of this Lease. 2.3 Overholding If, at the expiration of the Term, the Lessee shall continue to occupy the Site without further written agreement, there shall be no tacit renewal of this Lease, and the tenancy of the Lessee thereafter shall be from month to month only, and may be terminated by either party on one (1) . Rent shall be payable in advance on the first day of each month equal to the sum of one hundred and fifty percent (150%) of the monthly installment of Ground Rent payable during the last year of the Term and one-twelfth (1/12) of all Additional Rent charges provided for herein, determined in the same manner as if this Lease had been renewed, and all terms and conditions of this Lease shall, so far as applicable, apply to such monthly tenancy. 2.4 Lessor The Lessor represents and warrants that, as of the start of the Term, it has good title in fee simple to the Site, free from all encumbrances, save and except the following permitted encumbrances: registered restrictive covenants, rights-of-way, servitudes, rights in the nature of servitudes and other similar rights in land granted to, reserved or taken by any governmental authority or public utility (including, without in any way limiting the generality of the foregoing, servitudes, and rights in the nature of servitudes for sidewalks, public ways, sewers, drains, gas and oil pipelines, steam and water mains or electric light and power, or telephone and telegraph enjoyment of the Site . 6 2.5 Acknowledgements of Site Conditions (1) Subject to any other provision of this Lease, the Lessee acknowledges and agrees that: (a) the Lessee undertook examinations or subsurface investigations, or both, of the Site, and is satisfied as to the conditions at the Site for the purposes of the Development, including environmental matters, subsurface conditions, bearing pressure, settlement characteristics and nature and consistency of soil and sediments, groundwater and surface water and the impact these could have on any or all of the Development; (b) the Lessee accepts the Siteon an "as is" basis as at the Commencement Date, subject only to the work which this Lease provides is to be undertaken by the Lessor subsequent to the Commencement Date; (c) the Lessor shall not in any way be responsible or liable for any conditions at the Site which are actually encountered, including environmental matters, subsurface conditions, bearing pressure, settlement characteristics and nature and consistency of soil and sediments, groundwater, surface water and the Lessee has made its own determinations of such conditions and their effect, if any, on the Development; and (d) the Lessee is not entitled to any abatement of Rent or reimbursement of costs incurred or to any other remuneration or damages whatsoever, in any way connected with existing conditions at the Site, including environmental matters, subsurface conditions, bearing pressure, settlement characteristics and nature and consistency of soil and sediments, groundwater, surface water, whether or not the same would have been apparent to a contractor experienced in projects similar to the Development upon review of the Site. (2) The Lessee represents and warrants to the Lessor that the Site including the is suitable in all respects for the Development, and the Lessee shall have no claim, nor make any claim, whether at law or in equity, in the event that the Site or the reof, are not at any time and from time to time suitable for the Development; and the Lessee hereby releases and discharges the Lessor from any and all Site Work, or any part thereof, are not suitable for the Development, or are in any manner or way inadequate for the aforesaid purposes. (3) The covenants, representations, and warranties of, and releases by, the Lessee contained in this Article shall survive indefinitely the expiration or earlier termination of this Lease notwithstanding anything herein contained to the contrary. 2.6 Obligation to Purchase (1) Subject to Section 2.6(2), the Lessee covenants and agrees to purchase the Site on or before the expiration of the Term of the Lease, and the Lessor agrees to sell the Site to the Lessee Bprovided the Lessee is not in 7 default under this Lease, and on condition that the Seawall and lands known as Harbour Passage shall be subdivided from the Site and shall remain the property of the Lessor. (2) The Lessee may only notify the Lessor that it is ready to purchase the Site during the last six months of any given lease year of the Term. 2.7 Easements in Favour of Lessor During the Term of the Lease, the Lessee covenants and agrees with the Lessor to grant such easements over the Site as may be reasonably required by the Lessor for access to and from Harbour Passage Extension and the Seawall, and for the installation and maintenance of public utilities, provided that such easements do not materially interfere with the siting and construction of any buildings or above-ground Improvements. Article 3 - Rent 3.1 Covenant to Pay, Net Lease The Lessee covenants to pay Rent as provided in this Lease. It is the intention of the parties that this is a net and carefree lease and that the Rent shall be net to the Lessor and clear of all taxes, costs and charges arising from or relating to the Site, and that the Lessee shall pay as Additional Rent all charges, impositions and expenses of every nature and kind relating to the Site as if it were an owner thereof (except as otherwise specifically provided for herein) in the manner hereinafter provided, and the Lessee hereby covenants with the Lessor accordingly. 3.2 Rental Taxes (1) The Lessee shall pay to the Lessor the Rental Taxes assessed upon: (a) the Rent; (b) the Lessor; and/or (c) the Lessee, pursuant to the laws, rules and regulations governing the administration of the Rental Taxes by the authority having jurisdiction, and as such may be amended from time to time during the Term of this Lease. (2) The Rental Taxes shall not be deemed to be Additional Rent under this Lease, but may be recovered by the Lessor as though they were Additional Rent. 3.3 Payment Method (1) The Lessor may, at any time and from time to time, require the Lessee to provide to the Lessor authorization and documentation required to automatically debit the Lessee bank account for Rent owing. (2) In the event of any change in the estimates of Additional Rent, the Lessor may require new documentation . 8 3.4 Rent Past Due If the Lessee shall fail to pay any Rent when the same is due and payable, such unpaid amount shall bear interest at the rate of eighteen percent (18%) per annum (calculated monthly at the rate of one and one-half percent (1.5%)), such interest to be calculated from the time such Rent becomes due until paid by the Lessee. Article 4 - Ground Rent 4.1 Ground Rent The Lessee covenants and agrees to pay, from and after the Commencement Date, to the Lessor, in lawful money of Canada, without any prior demand therefor and without any deduction, abatement or set-off whatsoever, as annual Ground Rent, the sum of One Hundred and Seventy-Five Thousand Dollars ($175,000.00) in advance, on the first day of each and every year of the Term. Article 5 - Additional Rent 5.1 Additional Rent (1) In addition to the Ground Rent reserved in favour of the Lessor, the Lessee shall, throughout the Term when same become due and payable, pay to the Lessor or as otherwise provided in this Lease, in lawful money of Canada, without any deduction, abatement or set-off whatsoever, as Additional Rent, the following costs incurred and attributable to the Site and Improvements: (a) all Realty Taxes levied, rated, charged or assessed on or in relation to the Site; (b) all charges, costs, accounts and any other sums payable by reason of the supply of the utilities and services to the Site; and (c) all other sums, amounts, costs, cost escalations and charges specified in this Lease to be payable by the Lessee. (2) All of the payments set out in this Lease (other than Rental Taxes) shall constitute Ground Rent or Additional Rent, and shall be deemed to be and shall be paid as rent, whether or not any payment is payable to the Lessor or otherwise, and whether or not as compensation to the Lessor for expenses to which it has been put. The Lessor has all the rights against the Lessee for default in payment of Additional Rent that it has against the Lessee for default in payment of Ground Rent. 5.2 Realty Taxes The Lessee covenants to pay to the lawful taxing authorities, on or before the due date therefor, as Additional Rent, all Realty Taxes. The obligation of the Lessee to pay Realty Taxes shall commence at the Commencement Date, and shall be apportioned for the current taxation year between the Lessor and Lessee as at such date on a per diem basis. Upon the expiry or termination of this Lease, Realty Taxes during the taxation year of termination shall be similarly apportioned between the parties as at the termination date. If the Lessee fails to pay any Realty Taxes when due to the appropriate taxing authorities in situations where the Lessee (or persons 9 on its behalf) is not contesting Realty Taxes in accordance with the provisions of Section 5.3, then the Lessor may itself, after notice to the Lessee as required herein, pay the Realty Taxes, and the amount paid by the Lessor on account of Realty Taxes shall be immediately repaid by the Lessee to the Lessor as Additional Rent under this Lease. 5.3 Contesting Realty Taxes The Lessee shall have the right, in the name of the Lessor or otherwise, at the Lessee expense, by appropriate proceedings conducted diligently and in good faith, to contest or apply for the reduction of the amount, legality or mode of payment of any Realty Taxes in respect of the Site or any portion thereof or any assessments or valuations with respect thereto. The Lessor shall provide any consents, authorizations and other assurances as may be required in order for such Realty Taxes to be contested or such applications to be made and proceeded with. During the period of any bona fide contesting or application, the Lessee may defer the payment of Realty Taxes to the extent permitted under applicable legislation, and no default shall be deemed to have occurred in the Lessee such deferral. The Lessee shall be entitled to any rebate of any Realty Taxes unless such Realty Taxes have been paid by the Lessor in accordance with Section 5.2 and the Lessee has not reimbursed the Lessor. 5.4 Business and Other Taxes In each and every year during the Term, the Lessee shall pay as Additional Rent, within fifteen (15) days after they become due, and indemnify the Lessor from and against payment of, and any interest or penalty in respect of, the following: (a) every tax, licence fee, rate, duty and assessment of every kind with respect to any business carried on by the Lessee on the Site or by any sublessee, licensee, concessionaire or franchisee or anyone else, or in respect of the use or occupancy of the Site by the Lessee, its sublessees, licensees, concessionaires or franchisees, or anyone else (other than such taxes as income, profits or similar taxes assessed upon the income of the Lessor); and (b) all Realty Taxes in respect of the Lessee facilities on or about the Site, and any Realty Taxes occurring as a result of any reason peculiar to the Lessee. 5.5 Utilities and Services (1) The Lessee shall be solely responsible for and shall promptly pay to the appropriate utility suppliers, as Additional Rent, all charges for water, gas, electricity, telephone telecommunications and other utilities and services used or consumed in, and any other charges levied or assessed on or in respect of or services supplied to, the Site and Improvements. (2) In no event shall the Lessor be liable for, nor shall the Lessor have any obligation with respect to, an interruption or cessation of or a failure in the supply of any utilities, services or systems, including water services, in, to or serving the Site or Improvements. 10 5.6 Contribution to Infrastructure Maintenance Fund (1) Subject to Section 5.6(4), th (a) beginning on the first day of the sixth (6) year of the Term and throughout the remainder of the Term, the Lessee shall pay to the Lessor as Additional Rent, in lawful money of Canada, without any deduction, abatement or set-off whatsoever, the sum of $25,000.00 annually, which amount will be allocated by the Lessor to a joint infrastructure maintenance fund Infrastructure ; and (b) during the subsequent ownership of the Site by the Lessee following its purchase thereof in accordance with Section 2.6, the Lessee shall continue to pay to the Lessee the sum of $25,000.00 annually towards the Infrastructure Maintenance Fund for a period ending 50 years following the Commencement Date of the Lease. In the event the Lessee purchases the Site prior to the first day of the th sixth (6annual obligation to pay into the Infrastructure Maintenance Fund shall only commence on the day which is 6 years following the Commencement Date of the Lease. The Lessee covenants and agrees to execute and deliver to the Lessor all such further documents as the Lessor may require for the purpose of giving effect to this continuing (2) The Lessor will contribute an equal amount annually to the Infrastructure Maintenance Fund. The Infrastructure Maintenance Fund shall be for purposes of maintaining and repairing public spaces and infrastructure along the perimeter of the Site, including the Seawall, Harbour Passage, and Loyalist Plaza. (3) Use of the Infrastructure Maintenance Fund for the purposes set out herein shall be determined solely by the Lessor, however the Lessor will invite input from the Lessee. (4) The annual amount payable to the Infrastructure Maintenance Fund will be th increased commencing on the first day of the eleventh (11) year following the Commencement Date and every ten (10) years thereafter (whether during the Term of the Lease or subsequent ownership of the Site by the Lessee) to account for inflation. The increase will be proportionate to the total percentage increase in the CPI over the preceding ten (10) years. (5) The Owner shall be responsible for establishing and administering the Infrastructure Maintenance Fund. 5.7 Performance Based, Forgivable Payments (1) Beginning on the first day of the Term and throughout the remainder of the Term, the Lessee shall pay to the Lessor, in lawful money of Canada, without any deduction, abatement or set-off whatsoever, as Additional Rent, the sum of $75,000.00 annually, subject to reduction in accordance with Section 5.7(2) . (2) The Perfomance Payment may be reduced annually following the completion of new buildings in the Development, and shall be determined based on the following formula: Performance Payment = $75,000 x \[1 Construction Value of Completed Buildings\] 11 $100,000,000.00 (3) Fothe value of building(s) for which: (a) a valid building permit(s) has been issued; (b) construction of the foundation(s) has been completed or is actively in progress; and (c) a cost to construct budget has been provided to the Lessor certified by a professional architect, engineer, or professional accountant independent of the Lessee, and which budget confirms the cost of construction of the building(s) on completion. Article 6 - Construction of Improvements 6.1 Harbour Passage Extension After the Commencement Date, the Lessor may complete the extension of Harbour Passage along the perimeter of the Site. The timing for completion of this work shall be determined by the Lessor in its sole discretion. 6.2 Loyalist Plaza After the Commencement Date, the Lessor may redesign and redevelop Loyalist Plaza in collaboration with the Lessee as the Development progresses. 6.3 Outdoor Amenity Space With the exception of Harbour Passage and the Seawall, all outdoor public amenity space within the Site shall be the sole responsibility of the Lessee to construct and maintain at its own expense, including all above-ground and below-ground infrastructure associated therewith. 6.4 Other Strategic Infrastructure The Lessor and the Lessee will work collaboratively to explore the feasibility and funding opportunities for a pedway connection from the Site to Market Square, a district energy system, subwatertable parking, and any other supportive infrastructure for the Development, provided however that the failure on the part of either party to do so shall not constitute a breach or default hereunder notwithstanding any other provisions herein. 6.5 Commencement of Construction of Improvements Before commencing excavation or any work on the Site for the construction of the Improvements, the Lessee shall have: (a) provided to the Lessor proof of the insurance required by Section 6.7; (b) obtained all necessary building permits; and 12 (c)obtained from the contractor(s)the indemnity, insurance and performance bonds required by the contract(s). 6.6 Duties of Lessee in Construction The Lessee shall perform and comply with the following covenants and requirements in the construction of the Improvements: (a) all laws and legal requirements pertaining to the conduct of the work shall be complied with; (b) the construction work shall be conducted expeditiously in a good and workmanlike manner and otherwise in accordance with the provisions of this Lease; (c) the Lessee, through the Lessee (d) any contractor engaged on the work shall be required to observe all provisions of its contract, and to furnish and maintain all security, indemnity, insurance and performance bonds required by the contract, and upon request by the Lessor, the Lessee shall provide the Lessor with copies of such contracts, security, indemnity, insurance and performance bonds; (e) Upon 72 hours notice, the Lessor and its agents and consultants shall at all times have the right to inspect the work and to notify the Lessee or the Lessee Architect of any default or non-compliance with any construction contract or this Lease, and the Lessee shall forthwith deal with and remedy any default or non- compliance; (f) the Lessor may require the Lessee, at own expense, to submit at reasonable intervals certificates of the Lessee work, the existence and extent of any faults or defects, the value of the work then done and to be done under any contract, the amount owing to any contractor and the amounts paid or retained by the Lessee on any contract, and the Lessee shall also, whenever requested by the Lessor, furnish copies of certificates furnished to it by contractors or by the Lessee connection with construction; (g) the Lessee shall deliver to the Lessor, from time to time as they become available , copies of the following in respect of the Site and the Improvements: (i) soil tests; (ii) (iii) (iv) applications to amend by-laws; (v) site plan applications and approvals; 13 (vi)building permit applications; (vii) building permits issued; and (viii) all other documents or information pertaining to the Site and development of the Improvements in the possession or control of the Lessee; and (h) the Lessee shall promptly pay when due all proper accounts for work done or materials furnished under all contracts which it has entered into relating to the construction of the Improvements, but this shall not prevent the Lessee from retaining any amounts claimed due which the Lessee to be due, or which are properly and reasonably retained to secure the performance of any work or the correction of any defect or which, in the opinion of the Lessee the provisions of the Lien Act (New Brunswick). 6.7 Fire and Liability Insurance During Construction (1) The Lessee shall obtain or shall cause its contractor or contractors to obtain prior to beginning construction of the Improvements, and shall maintain and keep in force until the insurance required under Article 9 has been obtained, insurance naming the Lessor and the Lessee as named insureds and: (a) protecting both the Lessee and the Lessor (without any rights of cross claim or subrogation against the Lessor) against claims for personal injury, death or property damage or other third party or public liability claims arising from any accident or occurrence upon, in or about the Site and from any cause, including the risks occasioned by the construction of the Improvements, and to an amount of not less than eight million dollars ($8,000,000) for any personal injury, death, property or other claims in respect of any one accident or occurrence; and (b) protecting both the Lessee and the Lessor from loss or damage (without any rights of cross claim or subrogation against the Lessor) to the Improvements and all fixtures, equipment, improvements and building materials on the Site from time to time, both during and after construction (but which may be by policies obtained from time to time covering the risk during different phases of construction) against fire and extended perils under a standard extended form of fire insurance policy in such amounts and on such terms and conditions as would be carried by a prudent owner of a similar project during construction to the full insurable value thereof at all times (to be computed upon a replacement cost basis with deduction only of the cost of excavation and foundations and of the value of building materials from time to time on the site but not incorporated in the Improvements, and in any event in an amount sufficient to prevent the Lessor being deemed a co-insurer). (2) The proceeds of insurance which may become payable under any policy of insurance obtained pursuant to Section 6.7(1)(b) shall be payable to the Trustee in accordance with Section 9.3. 14 (3)All the provisions of Article 9 respecting insurance which are of general application apply to the insurance during construction of the Improvements required by this Section 6.7. 6.8 Lessee Failure to Build (1) In the event the Lessee fails to Commence Construction of a building having a minimum floor area of 50,000 square feet within two years of the Commencement Date, such failure shall constitute an Event of Default under the Lease, and the Lessor shall have the right to terminate the Lease in addition to all the remedies available to it as set out in Article 13. Provided however: (i) the Lessor will provide the Lessee with notice of a six (6) month cure period in order to Commence Construction of a building having a minimum floor area of 50,000 square feet prior to exercising such right to terminate the Lease; and (ii) no such cure period shall relieve the Lessee of any other obligation hereunder or to pay Rent when same becomes due and payable. (2) In the event the Lessor elects to failure to Commence Construction of a building having a minimum floor area of 50,000 square feet within two years of the Commencement Date, the Lessor shall pay the Lessee a termination payment of $250,000.00, subject to set-off for any amounts owing by the Lessee to the Lessor hereunder. Article 7 - Ownership, Maintenance and Repair 7.1 Ownership of Improvements and Fixtures (1) The Improvements are intended to be and shall become the absolute property of the Lessor upon the expiration or termination of the Lease, but shall be deemed, as between the Lessor and the Lessee during the Term, to be the separate property of the Lessee and not of the Lessor, subject to and governed by all the provisions of this Lease applicable thereto. The Lessorexpiration or termination of this Lease takes priority over any other interest in the Improvements which may now or hereafter be created by the Lessee, provided that all dealings by the Lessee with the Improvements which in any way affect title thereto shall be made expressly subject to this right of the Lessor, and the Lessee shall not assign, encumber or otherwise deal with the Improvements separately from any permitted dealing with the leasehold interest under this Lease, to the intent that no person who does not at the same time hold a like interest in the Improvements shall hold or enjoy any interest in this Lease acquired from the Lessee. (2) The provisions of Section 7.1(1) shall not be construed to prevent the Lessee from conferring on lessees or occupants of the Improvements the right of property in, or the right to remove, fixtures or improvements which are of the nature of usual fixtures and normally removable by tenants, and which are not part of the structure or any essential part of the Improvements or any building services. The Lessee shall make good, or shall cause the lessees to make good, all damage to the Improvements or building services caused by any removal of the Lessee (3) The Lessee shall at its own expense, at or immediately before the expiration of the Term, remove its furniture, chattels and other usual fixtures not forming any part of the structure of the Improvements or any building services and, provided the Lessee is not in default, the Lessee may from time to time remove such trade fixtures in the ordinary 15 course of its business or in the event of any Changes made pursuant to this Lease, provided that the Lessee shall, except upon the expiration of the Term, cause the fixtures to be replaced with fixtures having a value and utility at least equal to that of the fixtures so removed, considering the need to replace obsolete or defective fixtures and to substitute improved fixtures, and the consequences of any reconstruction, changes and alterations to the Improvements. (4) The Lessor may within 90 days after the expiry or sooner termination of this Lease give notice requiring the Lessee to demolish all Improvements on the Site and return the Site to a vacant state, whereupon the Lessee shall be obligated to do so diligently and expeditiously at its own expense. The foregoing covenant of the Lessee shall survive the expiration or earlier termination of this Lease notwithstanding anything herein contained to the contrary. (5) Any requirement on the part of the Lessee to remove property or demolish Improvements shall not apply in the event the Lessee has provided the Lessor notice of its intention to purchase the Site in accordance with Section 2.6, and completes the purchase within 6 months of having issued such notice. 7.2 Maintenance and Repair of Site and Improvements The Lessee shall, at its own cost and expense, during the entire Term, keep in good order and condition the Site and Improvements, and the appurtenances and equipment thereof, both inside and outside, including, but not limited to, fixtures, walls, foundations, roofs, vaults, elevators and similar devices, heating and air-conditioning equipment, sidewalks on the property, yards and area ways, water and sewer infrastructure within the Site and connections, water, gas, electric and telecommunications facilities and conduits, and all other fixtures in and appurtenances to the Site and Improvements and machinery and equipment used or required in the operation thereof, whether or not enumerated herein, and shall make any and all necessary repairs, replacements, substitutions, improvements and additions, ordinary or extraordinary, foreseen or unforeseen, structural or otherwise, subject to reasonable wear and tear, having regard to the size, age, location and character of the Site and Improvements and force majeure as set out in Section 15.1. Such repairs shall be completed in a good and workmanlike manner and in all respects consistent in quality and workmanship appropriate for a similar project in the vicinity, and shall meet the requirements of municipal and governmental regulations and the fire insurance underwriters. 7.3 Inspection by Lessor The Lessor, its servants, agents and contractors shall be entitled to enter upon the Site and Improvements at any time during normal business hours, on prior notice, for the purpose of inspecting the Site and Improvements. The Lessor shall not be liable for and the Lessee shall not be entitled to compensation for any inconvenience, nuisance or discomfort occasioned thereby. The Lessor shall use reasonable commercial efforts to schedule such inspections so as not to unreasonably interfere with the operation of any sublessee and to minimize interference with the LesseeSite and Improvements. 16 7.4 Repairs, Alterations, Improvements (1) The Lessee may make any repairs, additions, alterations, replacements or or of any part of the Improvements or any other portions of the Site provided that: (a) the Changes shall comply with all applicable laws and other governmental requirements and the requirements of the Lessee (b) the Changes shall not weaken or endanger the structure of the Improvements; and (c) the Changes shall not materially adversely affect the value of the Site and Improvements. (2) The Changes shall be constructed by the Lessee, without cost to the Lessor, in a good and workmanlike manner, using first-class materials. 7.5 Waste, Nuisance The Lessee shall not commit or suffer any waste or injury to the Site and Improvements or any part thereof save and except any demolition and alteration respecting the Improvements on the Site as herein permitted, and shall not use or occupy or permit to be used or occupied the Site and Improvements or any part thereof so as to constitute a nuisance or for any illegal or unlawful purpose, nor in any manner which may contravene any lawful restrictions of the use thereof by any municipal or governmental authorities. The Lessee shall at all times, at its own expense, keep the sidewalks, curbs and passageways within the Site and Improvements clean from rubbish, ice and snow and shall not encumber or obstruct the same or allow the same to be encumbered or obstructed in any manner. The Lessee shall not injure or damage the Site and Improvements or permit the same to be injured or damaged in any way save and except as herein permitted. 7.6 Services The Lessee shall install or cause to be installed all municipal services required to be constructed and installed in connection with any development of the Site, and shall pay all levies, imposts, deposits and charges required by the municipality or any public utility or other authority having jurisdiction for such services. The Lessee shall indemnify and save harmless the Lessor from all claims and demands relating to such services, it being the intention of the parties that the Lessor shall not be required at any time to pay any levies, imposts, deposits or other charges whatever in connection with the servicing or preparation of the Site from time to time for building, use or occupancy. Without limiting the generality of the foregoing, the Lessee shall, at its own expense, install or cause to be installed paved roadways, sanitary sewers, storm sewers, sidewalks, curbs, street lighting, water pipes and underground hydro facilities as may be required by the municipality or other relevant authorities. The Lessee further covenants that it shall construct, renew and repair all services with respect to the Site and Improvements as the municipality, utilities or other relevant authorities shall require from time to time without expense to or contribution from the Lessor. 17 7.7 Lien Claims (1) The Lessee shall not permit any lien to be registered against the Site for any labour or materials furnished to, or with the consent of, the Lessee, its agents or contractors, in connection with any work performed or claimed to have been performed on the Site or Improvements by or at the direction or permission of the Lessee, and the Lessee shall cause any lien to be vacated within ninety (90) Business Days of its registration against the Site. (2) In the event the Lessee fails to cause any lien to be vacated within ninety (90) Business Days of its registration against the Site: (a) such failure shall constitute an Event of Default hereunder and shall entitle the Lessor, without notice to the Lessee, to exercise all of its remedies provided for in Article 13, including without limitation the right to terminate the Lease; and (b) the Lessor may, without notice to the Lessee, demand payment pursuant to the terms of the Letter of Credit referred to in Section 13.3 and pay the proceeds into Court in order to vacate any lien filed or registered against the Site. If the Lessee notifies the Lessor in writing that the Lessee disputes the Lessor's right to draw on the Letter of Credit and pay the proceeds into Court in order to vacate any such lien filed or registered, the Lessor shall nonetheless be entitled to draw on the Letter of Credit and make the payment into Court without any liability to the Lessee. Article 8 - Use, Compliance with Laws 8.1 Use The Lessee covenants that at all times the use made of the Site and Improvements shall be solely for a mix of uses such as retail and commercial space and services, specialty shops and boutiques, residential condominiums and apartments, hospitality, entertainment, cultural and educational uses, green spaces, cafes, and transportation systems, and for no other purpose. 8.2 Compliance with Laws The Lessee covenants that at all times the use made of the Site and Improvements shall be in conformity with all of the requirements of the zoning by-laws and any other municipal and governmental regulations which may affect the Site. The Lessee shall comply with all or recommendations and requirements made by its fire insurance underwriters, and observe and obey all municipal and governmental regulations governing the conduct of any businesses carried out on the Site and Improvements or with respect to the use of the Site and Improvements. The Lessee shall indemnify and save the Lessor harmless against any and all liabilities, claims, damages, interest, penalties, fines, monetary sanctions, losses (including pure economic losses), costs (both direct and indirect) and expenses whatsoever (including, without professional advisors, consultants and experts) arising out of non-compliance with or violation of any of the said laws and regulations or from any liability for costs for damage or injury to any person or property resulting therefrom on and after the Commencement Date. 18 8.3 Compliance with Environmental Laws (1) Without limiting any other obligation of the Lessee in this Lease, the Lessee covenants and agrees that it shall, at its sole cost and expense, observe and otherwise comply with, and cause its sublessees, invitees and all other occupants of the Site to observe and comply with all Environmental Laws. Without limiting the generality of the foregoing, the Lessee covenants and agrees that: (a) it shall not cause or permit any Hazardous Substance to be brought into, stored, kept or used in or about the Site or any part thereof, other than any Hazardous Substance that is used in the ordinary course of the permitted use being carried on at the Site and which is stored, kept and used in strict compliance with all Environmental Laws pertaining thereto; (b) it shall not permit any emissions, discharges or releases of Hazardous Substances or materials containing Hazardous Substances from the Site, other than where such occurs in the ordinary course of the permitted use being carried on at the Site in strict compliance with all Environmental Laws pertaining thereto; (c) it shall not construct or install any underground storage tank in the Site; and (d) on the expiration or earlier termination of this Lease, it shall cause each and every Hazardous Substance which became located on the Site subsequent to the Commencement Date to be removed from the Site in compliance with all Environmental Laws pertaining thereto. (2) The Lessee shall immediately provide the Lessor with written notice of any order, direction, notice of default or notice of legal action received by the Lessee pursuant to any Environmental Laws and relating to the Site, the use and occupation of the Site or the business carried on at the Site. (3) Upon the request of the Lessor, given to the Lessee within six (6) months preceding the calendar month in which the Term expires, the Lessee shall provide to the Lessor, at the sole cost of the Lessee, an independent audit or assessment report, in form and substance and from a qualified consultant approved by the Lessor, acting reasonably, regarding Hazardous Substances in, on or under the Site Report reveal that the presence of any Hazardous Substances beyond those permitted by Environmental Laws were found in, on or under the Site that were released, discharged, emitted or otherwise produced by the Lessee or its employees, agents, invitees or contractors, the Lessee shall complete all remediation required on or before the end of the Term to the standards required by all Environmental Laws at that time. If for reasons beyond the control of the Lessee such remediation cannot be completed by the end of the Term the Lessee shall be entitled, by notice to the Lessor given within ten (10) days of the delivery of the Exit Report to the Lessor, to an additional two (2) months to complete such remediation. All terms and conditions shall continue during such two (2) month period including all of the Lessee obligations in respect of Rent. (4) If any governmental authority shall require the clean-up of any Hazardous Substance held, released, spilled, abandoned or placed on the Site or released into the environment by the Lessee, its sublessees or anyone permitted on the Site by the Lessee, or as a result of the use or occupancy of the Site by the Lessee or its sublessees, invitees or other 19 occupants, the Lesseeshall, at its own expense: (a) prepare all necessary studies, plans and proposals required as a result thereof; (b) obtain all necessary approvals of such authorities required to complete the remediation to the standards required by all Environmental Laws together with any other work required; (c) provide all bonds and other security required by such authorities; and (d) carry out and complete the remediation to the standards required by all Environmental Laws together with any other work required. The Lessee shall also provide the Lessor with copies of the plans and proposals and keep the Lessor advised from time to time as to the status of its remediation and other work. (5) The Lessee agrees to indemnify and save harmless the Lessor and its agents, servants, employees and others for whom Lessor is in law responsible, against any and all liabilities, claims, damages, interest, penalties, fines, monetary sanctions, losses (including pure economic losses), costs (both direct and indirect) and expenses whatsoever (including, without limitation, reasonable costs of professional advisors, consultants and experts in respect of any investigation, and all costs all remediation and other clean-up costs and expenses) arising in any manner whatsoever out of: (a) any breach by the Lessee of any provisions of this Article, or any noncompliance by the Lessee, its sublessees, invitees and other occupants, with any Environmental Laws; (b) any generating, manufacture, refinement, treatment, transportation, storage, handling, disposal, transfer, production or processing of any Hazardous Substance by the Lessee, its sublessees, invitees and other occupants; and (c) any illness, injury or death of persons, or any loss or damage to property, on or about the Site. The covenants and agreements of, and indemnification by, the Lessee contained in this Article shall survive the expiration or earlier termination of this Lease notwithstanding anything herein contained to the contrary. Article 9 - Insurance and Indemnity 9.1 Lessee Throughout the Term the Lessee shall indemnify and save the Lessor harmless against any and all liabilities, claims, damages, interest, penalties, fines, monetary sanctions, losses (including pure economic losses), costs (direct and indirect) and expenses whatsoever reasonable costs of professional advisors, consultants and experts) arising from injury to property or injury to any person, firm, partnership or corporation, caused by the use, occupancy or presence of the Lessee or any other person, firm, partnership or corporation at, in, on or upon the Site or Improvements, except those damages costs and expenses caused by the . 9.2 Lessee (1) The Lessee shall, at its sole cost and expense, take out and maintain in full force and effect, at all times throughout the Term, the following insurance: 20 (a)fire and extended perils under a standard extended form of fire insurance policy with standard extended coverage endorsements, in such amounts and on such terms and conditions as would be carried by a prudent owner of a similar project, having regard to the size, age and location of the project on the Site, and such insurance shall add the Lessor as an additional insured, with coverage to the full insurable value thereof at all times (to be computed upon a replacement cost basis with deduction only of the cost of excavation and foundations); (b) general liability and property damage insurance, including personal liability, contractual liability, tenant-owned automobile liability and Site, written on a comprehensive basis with inclusive limits of at least eight million dollars ($8,000,000) for each occurrence, or such higher limit as the Lessor, acting reasonably, requires from time to time; (c) broad form comprehensive boiler and machinery insurance on a blanket repair and replacement basis, with limits for each accident in an amount not less than the full replacement costs of the property, with respect to any boilers and machinery upon the Site or relating to or serving the Site, and such insurance shall add the Lessor as an additional insured; (d) insurance against loss of rental income due to loss or damage to the Improvements by way of the perils which the Lessee is to insure against in Section 9.2(1)(a) to the value of all rents from the Development with an indemnity period of 24 months from the date of loss; and (e) any other form of insurance with whatever limits the Lessor, acting as a prudent owner, reasonably requires from time to time, in such form and amounts and for risks against which a prudent lessee under similar circumstances would insure. (2) All public liability insurance shall contain a provision for cross liability or severability of interest as between the Lessor and the Lessee. All the foregoing property policies shall contain a waiver of any right of subrogation or recourse by the Lesseeers against the Lessor or its contractors, agents and employees, whether or not any loss is caused by the act, omission or negligence of the Lessor, its contractors, agents or employees. The Lessee shall obtain, from the insurers under the building coverage, undertakings to notify the Lessor in writing at least thirty (30) days prior to any cancellation thereof. The Lessee shall furnish to the Lessor, upon written request, certificates of all such policies. The Lessee agrees that if the Lessee fails to take out or to keep in force such insurance or provide a certificate of every policy and evidence of continuation of coverage as herein provided, the Lessor shall have the right to take out such insurance and to pay the premium thereof and, in such event, the Lessee shall pay to the Lessor the amount paid as premium plus fifteen percent (15%), which payment shall be deemed to be Additional Rent payable on the first day of the next month following the said payment by the Lessor. 9.3 Insurance Trustee Where a partial or complete destruction occurs and the Lessee rebuilds, the following procedures shall apply: 21 (a) Lessor and subject to approval by the Lessee. The Trustee shall be expressly instructed to act on behalf of both the Lessor and the Lessee according to their interests. The Trustee shall be instructed to invest the insurance proceeds, insofar as possible, with a bank or trust company so as to earn interest pending their distribution as contemplated by this Section 9.3. Work-in-progress shall be paid for in installments as progress payments out of the insurance proceeds, and provision shall be made to ensure that no increase in the cost over the amount of the original estimate shall be the responsibility of the Lessor or the Trustee, so that the Trustee at all times retains in its hands sufficient insurance proceeds to pay for the estimated cost of repair outstanding at the date it makes any progress payment; (b) before any contract having a value in excess of $100,000 is entered into by the Lessee for the carrying out of any repair work, copies of the estimates for any work and the contracts for the completion of the work shall be submitted to the Trustee, and it shall distribute such copies to the Lessor and the Lessee. Such contracts shall be deemed to be approved unless notice to the contrary is delivered to the Trustee within fourteen (14) business days of receipt of the contract from the Trustee; (c) any progress payments to be made under this Section 9.3 by the Trustee shall not be made without the submission of a statement, certified by the architect or engineer of the party to whom the payments are to be made, stating the estimated amount required to complete the work or repair at the date of the certificate, the amount owing on work already done, and the amount of any payments made at that date for work already done, and verifying the standard and quality of the work already done, and the Trustee shall be required to retain in its hands, at the date of any payment, an amount sufficient to pay the estimated outstanding cost of completion, even if that has the effect that the payment made becomes less than the amount certified to be due; (d) in making any payment under this Section 9.3, the Trustee shall have regard to the (New Brunswick) and shall retain within its control for the period specified in such legislation the amount of any hold-back required; (e) the fees and expenses of the Trustee shall be borne by the Lessee and shall be paid, to the extent available, out of the moneys held by the Trustee; (f) in the case of any dispute as to the terms of any contract or the amount of any estimate or any matter relating to the actual work or repair, such dispute shall be resolved in accordance with the dispute resolution provisions in Article 14; and (g) should the insurance moneys, if any, be insufficient to pay the entire cost of the work of restoring and repairing the buildings, the Lessee agrees to pay the deficiency. Upon the completion of such work and payment in full therefor by the Lessee, the Lessor shall, upon receipt of proof that such work has been paid for in full and that there is no outstanding lien claim, release to the Lessee any insurance moneys then remaining and in the possession or control of the Trustee and shall so authorize the Trustee. 22 9.4 Insurers All contracts of insurance required to be maintained pursuant to this Lease shall be with a reputable company or companies licensed to do business within the Province of New Brunswick and ordinarily engaged in the business of insuring against the risks herein described. 9.5 Lessor If the Lessee fails to obtain the policies of insurance required hereunder, the Lessor may itself, after not less than twenty-four (24) hoLessee, obtain such policies and shall give the Lessee a notice setting out the amount and dates of payment of all costs and expenses incurred by the Lessor in connection therewith to the date of such notice; the Lessee shall, with the next installment of rent which becomes due, pay the same to the Lessor with interest, calculated on the various amounts from the respective dates of payment thereof by the Lessor. Any sum so expended by the Lessor, together with such interest as aforesaid, shall constitute rent hereunder and be collectable as such rent payable on demand. 9.6 Evidence of Insurance The Lessee shall furnish the Lessor with certificates or other acceptable evidence of all required insurance promptly at the Commencement Date and yearly during the Term. Such insurance shall show the Lessor as a named insured and all property insurance shall provide for a waiver of subrogation among insureds, and liability insurance shall provide for severability of interests and cross liability among insureds. All proceeds of any insurance shall first be used by the Lessee for the costs of repairing, reconstructing or replacing, as the case may be, the damaged or destroyed portions of the Improvements to the standard set out herein, except as otherwise provided for in this Lease. Article 10 - Assignment, Mortgaging and Subletting 10.1 Assignment by Lessee Save and except as set out in this Article 10, the Lessee shall not assign this Lease or sublet all or substantially all of the Site and/or Improvements without first obtaining the written consent of the Lessor, which consent shall not be unreasonably withheld or delayed. Any transfer or issue by sale, assignment, bequest, inheritance, operation of law or other disposition, or by subscription, of any part or all of the corporate shares of the Lessee or any other corporation which would result in any change in the effective direct or indirect control of the Lessee, shall be deemed to be an assignment. 10.2 Subletting by Lessee The Lessee may, without the consent of the Lessor, sublet portions of the Site and Improvements (not constituting all or substantially all of the Site and Improvements), provided the term and all renewals of each sublease do not extend beyond the Term and all exercised renewal terms at such time. 10.3 Status of Lessee after Assignment or Subletting No assignment or sublease shall release the Lessee from its obligations and covenants under this Lease. 23 10.4 Non-Disturbance of Sublessees (1) The Lessor agrees that so long as the Lessee is not in default hereunder and: (a) any particular sublessee is not in default under the terms of its sublease; (b) the sublease has been entered into by the Lessee length with the sublessee; and (c) the sublessee has agreed that in the event of termination of the Lease, upon the request of the Lessor, it shall attorn to the Lessor as sublessor under the sublease, then, upon the request of the Lessee, the Lessor shall permit that sublessee to remain in quiet and peaceful possession of its premises pursuant to the terms of its sublease, notwithstanding any exercise by the Lessor of its rights to terminate this Lease or otherwise re-enter the Site, provided that the Lessor shall not be required to give effect to any prepaid rental periods in excess of one (1) month. (2) In order to give effect to the provisions of Section 10.4(1), upon the request of the Lessee, the Lessor shall execute a non-disturbance or sublease recognition agreement (a sublessee requires, acting reasonably, and provided the Lessor incurs no financial obligation thereunder. 10.5 Lessee Financing (1) The Lessee covenants and agrees with the Lessor that it shall obtain its financing for the entirety of the Development from a regulated financial institution in Canada. (2) The Lessee covenants and agrees with the Lessor that it shall not terminate, amend or otherwise modify any of the Financing Agreements, or waive or exercise any of its rights under the Financing Agreements, if, at the time such action is contemplated and effected, it would materially adversely affect the Lesseeto carry out the Development. (3) The Lessee may, from time to time during the Term, without the consent of the Lessor, make one or more Leasehold Mortgages, provided such Leasehold Mortgage is by way of a sublease or assignment to a regulated financial institution in Canada. (4) If any Leasehold Mortgagee shall give to the Lessor a notice specifying the name and address of such Leasehold Mortgagee, the Lessor shall give to the Leasehold Mortgagee a copy of each notice of default by the Lessee at the same time as and whenever any such notice of default shall thereafter be given by the Lessor to the Lessee, addressed to the Leasehold Mortgagee at the address last furnished to the Lessor. No such notice of default by the Lessor shall be deemed to have been given to the Lessee unless and until a copy thereof shall have been so given to the Leasehold Mortgagee. Save and except as to default in payment of moneys reserved hereunder, such Leasehold Mortgagee shall thereupon have a period of seven (7) days more, after service of such notice upon it, to remedy the default or cause the same to be remedied, than is given to the Lessee after service of such notice upon it. Such Leasehold Mortgagee shall, within the period and otherwise as herein provided, have the right to remedy such default or cause the same to be remedied. The Lessor shall accept 24 performance by the Leasehold Mortgagee of any covenant, condition or agreement onthe Lessee by the Lessee. The time of the Leasehold Mortgagee to cure any default by the Lessee which reasonably requires that the said Leasehold Mortgagee be in possession of the Site to do so shall be deemed extended to include the period of time required by the said Leasehold Mortgagee to obtain such possession with due diligence, provided, however, that during such period all of the other obligations of the Lessee under this Lease including, without limiting the generality of the foregoing, the payment of moneys reserved hereunder, are being duly performed. (5) Lessor and Lessee shall not cancel, surrender, modify or amend this Lease in any respect without the prior written consent of the Leasehold Mortgagee, such consent not to be unreasonably withheld. (6) No Leasehold Mortgagee shall become liable under the provisions of this Lease, unless and until such time as it becomes, and then only for as long as it remains, in possession of the Site or the owner of the leasehold estate. (7) No Leasehold Mortgage shall be made by the Lessee unless the Leasehold Mortgagee shall covenant with the Lessor: (a) to be bound by all the covenants and obligations of the Lessee hereunder as soon as it enters into possession of the Lessee steps to enforce its security which have the effect of depriving the Lessee of the ability to perform fully those covenants and obligations, and such covenant shall continue to bind the Leasehold Mortgagee so long as it continues in possession or continues to enforce its security with the effect as aforesaid; and (b) to obtain, upon any exercise of any power of sale (which sale under power of sale shall be subject to the consent of the Lessor as set out in Section 10.1), a covenant from the assignee in favour of the Lessor to perform all of the Lessee obligations under this Lease, but as soon as the assignee becomes bound by the Lessee covenant. (8) Notwithstanding the execution of this Lease, the Lessor agrees that, in the event that any Leasehold Mortgagee reasonably requires any change in any of the terms, covenants and provisions of the Lease, the Lessor shall execute and deliver such written modifications of the Lease in order to comply with the reasonable requirements of any such Leasehold Mortgagee, provided that there is no reduction in Rent or other payments to be made under the Lease, no variation in the Term, and such changes do not place material burdens upon the Lessor or do not involve material or major alterations in the covenants and agreements contained in the Lease which materially and adversely affect the Lessor or relieve the Lessee of any material obligation or duty previously imposed upon it in the Lease. 10.6 Lessor In the event of the sale, transfer or other disposition by the Lessor of its interest in the Site or any part thereof, or the assignment by the Lessor of this Lease or any interest of the Lessor hereunder, the Lessor shall cause the purchaser, transferee or assignee thereof to directly assume the covenants and obligations of the Lessor hereunder and, thereupon, the 25 Lessorshall, without further agreement, be freed and relieved of all liability with respect to such covenants and obligations under this Lease relating to matters arising from and after such assignment. 10.7 Status Certificates Each party shall, on twenty (2, execute and deliver to the other and/or any actual or proposed Leasehold Mortgagee and/or any actual or proposed purchaser or assignee of a party (as applicable), a statement as prepared by the other in writing certifying the following: (a) that this Lease is unmodified and in full force and effect, or, if modified, stating the modifications and that the same is in full force and effect as modified; (b) the amount of the Ground Rent then being paid; (c) the dates to which Ground Rent, by installments or otherwise, and Additional Rent and charges hereunder have been paid; (d) whether or not there is any existing default on the part of the other party of which the party giving the certificate has notice; and (e) such other matters as may be reasonably required by the requesting party. Article 11 - Quiet Enjoyment 11.1 Quiet Enjoyment (1) Subject to Subsection 11.1(2), the Lessee, upon paying the Rent hereby reserved and performing and observing the covenants and provisions herein required to be performed and observed on its part, shall peaceably enjoy the Site for the Term. (2) Until such time as the Lessee has started construction of the foundation of a building on the Site, the Lessor may continue to have the Saint John Parking Commission or other designee operate the existing parking lot on the Site without any compensation payable to the Lessee. Article 12 - Damage and Destruction 12.1 Damage or Destruction of Improvements The complete or partial destruction or damage, by fire or other casualty, of the Improvements shall not, except as provided herein, terminate this Lease or entitle the Lessee to surrender possession of the Site or to have or to demand any abatement or reduction of the Rent or other charges payable under this Lease. 12.2 Restoration of Improvements The Lessee covenants and agrees that, following the damage or destruction of any of the Improvements, it shall repair, reconstruct or replace such damaged or destroyed Improvements. All insurance moneys shall be made available to the Lessee pursuant to the 26 terms of this Lease to pay for the cost of such restoration, reconstruction and repair and, should the insurance moneys be insufficient to pay the entire cost, the Lessee agrees to pay the deficiency. 12.3 Damage or Destruction at End of Term Notwithstanding Section 12.2, in the event of damage or destruction to the Improvements in the last 5 years of the Term, to the extent that the Lessee determines that the cost to repair the Improvements would exceed 50% of the replacement cost thereof, the Lessee may elect to terminate this Lease by notice to the Lessor within 90 days following the damage or destruction, and the Lessee shall restore the Site to the condition it was in immediately prior to construction of the Improvements, the Lessor shall be paid the remaining insurance proceeds in respect of the Improvements, and this Lease shall be deemed to have been terminated as of the date of such damage or destruction. 12.4 Expropriation If, at any time during the Term, any public body or paramount authority shall take or expropriate the whole or a portion of the Site and Improvements, then the following provisions shall apply: (a) the Lessor, the Lessee, and any Leasehold Mortgagee may exercise fully all the rights, remedies and claims for compensation which each may have under the applicable legislation. The Lessor and the Lessee shall inform each other fully of the claims for compensation made by each of them in the event of any expropriation, shall not claim compensation on any basis inconsistent with this Lease, and shall afford reasonable co-operation to each other in the prosecution of any proper separate claims. The Lessor and the Lessee shall co-operate with each other regarding any expropriation of the Site or any part thereof so that each receives the maximum award to which it is entitled at law; and (b) if such expropriation or compulsory taking does materially affect the Lessee use or enjoyment of the Site, then the Lessee may elect to terminate this Lease by notice to the Lessor within thirty (30) days of the notice of the expropriation and the Term shall terminate on the date upon which the expropriating or taking authority requires possession of the lands so expropriated or taken. In such case, the Lessor shall be entitled to receive the entire compensation awarded or settlement, whether fixed by agreement or otherwise, save and except for the portion thereof that is specifically awarded or allocated to the Lessee in respect of the right of the Lessee to occupy and use the Improvements for the balance of the Term. Article 13 - Default 13.1 Default and Right to Re-enter (1) Any of the following constitutes an Event of Default under this Lease: (a) the Lessee fails to pay any Rent on the day or dates appointed for the payment thereof; 27 (b)the Lessee fails to cause any lien to be vacated within ninety(90) Business Days of being required to do so under subsection 7.7(1); (c) the Lessee becomes bankrupt or insolvent or takes the benefit of any statute for bankrupt or insolvent debtors or makes any proposal, an assignment or arrangement with its creditors, or any steps are taken or proceedings commenced by any person for the dissolution, winding-up or other termination of the Lessee (d) a trustee, receiver, receiver/manager or a person acting in a similar capacity is appointed with respect to the business or assets of the Lessee; (e) the Lessee makes a sale in bulk of all or a substantial portion of its assets, other than in conjunction with a transfer made pursuant to this Lease; (f) this Lease or any of the Lesseend such writ is not stayed or vacated within fifteen (15) days after the date of such taking; (g) the Lessee makes an assignment or sublease or other transfer other than in compliance with the provisions of this Lease; or (h) the Lessee abandons the Site and Improvements. (2) In the event the Lessee fails to observe or perform any other of the terms, covenants or conditions of this Lease to be observed or performed by the Lessee and, if such breach is not otherwise listed in Section 13.1(1), after notice in writing from the Lessor to the Lessee: (a) the Lessee fails to remedy such breach within fifteen (15) days; or (b) if such breach cannot reasonably be remedied within fifteen (15) days, the Lessee fails to commence, or show why it cannot reasonably commence to remedy such breach within fifteen (15) days of such breach, or thereafter fails to proceed diligently to remedy such breach, the Lessor shall then have the right, but not the obligation, to cause the Lessee to purchase the Site in accordance with tby delivering to the Lessee Option. failure to complete the purchase of the Site on the Put Option Closing Date shall constitute an Event of Default hereunder. 13.2 Default and Remedies If and whenever an Event of Default occurs, then, without prejudice to any other rights which it has pursuant to this Lease or at law, the Lessor shall have the following rights and remedies, which are cumulative and not alternative: (a) to terminate this Lease by notice to the Lessee or to re-enter the Site and Improvements and repossess them and, in either case, enjoy them as of its former estate, and to remove all persons and property from the Site and 28 Improvementsand store such property at the expense and risk of the Lesseeor sell or dispose of such property in such manner as the Lessor sees fit without notice to the Lessee. If the Lessor enters the Site and Improvements without notice to the Lessee as to whether it is terminating this Lease under this Section 13.2(a) or proceeding under Section 13.2(b) or any other provision of this Lease, the Lessor shall be deemed to be proceeding under Section 13.2(b), and the Lease shall not be terminated, nor shall there be any surrender by operation of law, but the Lease shall remain in full force and effect until the Lessor notifies the Lessee that it has elected to terminate this Lease. No entry by the Lessor shall have the effect of terminating this Lease without notice to that effect to the Lessee; (b) to enter the Site and Improvements as agent of the Lessee to do any or all of the following: (i) relet the Site and Improvements for whatever length of time and on such terms as the Lessor, in its discretion, may determine, and to receive the Rent therefor; (ii) take possession of any property of the Lessee on the Site and Improvements, store such property at the expense and risk of the Lessee, or sell or otherwise dispose of such property in such manner as the Lessor sees fit without notice to the Lessee; (iii) make alterations to the Site and Improvements to facilitate their reletting; and (iv) apply the proceeds of any such sale or reletting, first, to the payment of any expenses incurred by the Lessor with respect to any such reletting or sale, second, to the payment of any indebtedness of the Lessee to the Lessor other than Rent, and, third, to the payment of Rent in arrears, with the residue to be held by the Lessor and applied to payment of future Rent as it becomes due and payable, provided that the Lessee shall remain liable for any deficiency to the Lessor; (c) to remedy or attempt to remedy any default of the Lessee under this Lease for the account of the Lessee and to enter upon the Site for such purposes. No notice of the Lessorntention to remedy or attempt to remedy such default need be given to the Lessee unless expressly required by this Lease, and the Lessor shall not be liable to the Lessee for any loss, injury or damages caused by acts of the Lessor in remedying or attempting to remedy such default. The Lessee shall pay to the Lessor all expenses incurred by the Lessor in connection therewith; (d) to recover from the Lessee all damages, costs and expenses incurred by the Lessor as a result of any default by the Lessee including, if the Lessor terminates this Lease, any deficiency between those amounts which would have been payable by the Lessee for the portion of the Term following such termination and the net amounts actually received by the Lessor during such period of time with respect to the Site; and 29 (e)to recover from the Lessee become due and payable as accelerated rent. 13.3 ligations (1) Prior to submitting a Building Permit Application for the construction of each Phase: (a) the Lessee shall submit to the Lessor package for that Phase, including the details of any security to be granted by the ng Agreements; (b) the Lessee shall provide an irrevocable standby letter of credit in favour of the Lessor in an amount of 5%, or less, as determined by the City pursuant to section 13.3(5), of the total construction cost for each such Phase and in the form attached hereto as Schedule ; and (c) the Lessee shall provide the Lessor with supporting documentation setting out the details of the total estimated cost of construction of each Phase. (2) The Lessee shall maintain the Letter of Credit in place for the entire duration of construction for each Phase of the Development and for a period which exceeds by five Business Days the maximum time period permitted for the filing of a claim for lien under the (New Brunswick) following substantial completion of each Phase, at which time the Letter of Credit may be cancelled provided that the Developer is not in default hereunder and no construction liens are registered against the Site. (3) Subject to Section 13.3(4), the Lessor will cover the full financing and administrative costs of the Letter of Credit, which costs will be reimbursed to the Lessee in the form of a grant, paid to the Lessee only after a building permit has been obtained and in no case later than 60 days following receipt of proof of payment of the financing and administrative costs of the Letter of Credit. (4) For the first Phase of the Development, the Lessee shall pay the financing and administrative costs of the Letter of Credit in an amount equal to 1% of the total value of the Letter of Credit, to a maximum of $20,000 per year for up to a maximum of 3 years. (5) The Lessor shall have the sole and absolute discretion at any time to reduce the amount of the Letter of Credit required for a given Phase under Section 13.3(1) or to waive this requirement in its entirety, and without prejudice to its right to require a full Letter of Credit during a subsequent Phase. (6) Upon the occurrence of an Event of Default, the Lessor may, at its sole option, demand payment pursuant to the terms of the Letter of Credit and retain and apply the proceeds thereof as liquidated damages and/or exercise any of its other rights or remedies provided for hereunder. 30 (7)The Lessor shall not be required to give any prior notice to the Lessee of its intention to draw on the Letter of Credit. If the Lessee notifies the Lessor in writing that the right to draw on the Letter of Credit and to retain the proceeds as liquidated damages, then the Lessor shall nonetheless be entitled to draw on the Letter of Credit, but will remain liable to repay all or a portion of the amount drawn, together with interest charges at the rate prescribed on that amount, which exceeds the amount of actual liquidated damages to which the Lessor is entitled in the event such dispute has been finally resolved in favour of the Lessee. (8) In no event shall the Lessor be liable to repay any amount drawn on the Letter of Credit, nor interest thereon, in the event the Lessor pays such amount into Court in accordance with Section 7.7(2). 13.4 Distress Notwithstanding any provision of this Lease or any provision of any applicable legislation, none of the goods and chattels of the Lessee on the Site at any time shall be exempt from levy by distress for Rent in arrears, and the Lessee waives any such exemption. If the Lessor makes any claim against the goods and chattels of the Lessee by way of distress, this provision may be pleaded as an estoppel against the Lessee in any action brought to contest the right of the Lessor to levy such distress. 13.5 Costs The Lessee shall pay to the Lessor all damages, costs and expenses (including, without limitation, all legal fees on a substantial indemnity basis) incurred by the Lessor in enforcing the terms of this Lease, or with respect to any matter or thing which is the obligation of the Lessee under this Lease, or in respect of which the Lessee has agreed to insure or to indemnify the Lessor. 13.6 Remedies Cumulative Notwithstanding any other provision of this Lease, the Lessor may from time to time resort to any or all of the rights and remedies available to it in the event of any default hereunder by the Lessee, either by any provision of this Lease, by statute or common law, all of which rights and remedies are intended to be cumulative and not alternative. The express provisions contained in this Lease as to certain rights and remedies are not to be interpreted as excluding any other or additional rights and remedies available to the Lessor by statute or common law. Article 14 - Settlement of Disputes 14.1 Referral to Senior Management (1) All disputes arising out of, or in connection with, this Lease, or in respect of any legal relationship associated with or derived from this Lease shall within two (2) Business Days be referred for resolution to the City Manager and the Lessee Representative. (2) If the City Manager and Lessee Representative are not able to resolve the dispute referred to them under this Section 14.1 within seven (7) Business Days following such 31 referral, the mattershall be referred for resolution by way of mediation upon thewillingness of the parties. 14.2 Mediation (1) Despite an agreement to mediate, a party may apply to a court of competent jurisdiction or other competent authority for interim measures of protection at any time. (2) If the parties resolve to mediate the dispute referred to them under subsection 14.1(2), the parties shall invoke the following mediation process: (a) Either party shall immediately declare an impasse and provide written notice to the other within seven (7) Business Days thereof (or such other period as the parties mutually prescribe) declaring that such party wishes to proceed to mediation and setting out in reasonable detail the issue(s) to be resolved, the proposed time and a list of at least three (3) and not more than five (5) proposed mediators. Each of the proposed mediators shall be an individual: (i) with at least three (3) years' experience working in an executive capacity or representing clients in the area of public disputes, and (ii) unless otherwise agreed by the parties, with no prior connection, affiliation or other formal relationship with either party. (b) Upon receipt of such notice, the notified party shall have two (2) Business Days to select one (1) of the proposed mediators as the mediator, failing which the party providing notice shall select one (1) of its proposed mediators as the mediator. Within seven (7) Business Days following selection of the mediator the matter shall be heard by the mediator. (3) The mediator shall be entitled to establish his or her own practices and procedures. Each party shall co-operate fully with the mediator and shall present its case to the mediator orally and/or in writing within (10) Business Days following the mediator's appointment. The mediation shall not be in the nature of arbitration as contemplated by the Arbitration Act (New Brunswick) and the mediator's decision shall not be binding upon the parties, but shall be considered as a bona fide attempt by the mediator to judiciously resolve the dispute. The decision of the mediator shall be rendered in a written report, not to exceed two (2) pages in length, delivered to the parties within (10) Business Days following the last of such presentations. The fees of the mediator shall be shared equally by the parties. (4) The mediation shall be terminated: (a) By the execution of a settlement agreement by the parties; or (b) By a written declaration of one or more parties that the mediation is terminated; or (c) By a written declaration by the mediator that further efforts at mediation would not be useful. 32 (5)The place of mediation shall be the City of Saint John and Province of New Brunswick. 14.3 Arbitration (1) In the event that the parties are unwilling to mediate their dispute or that the dispute between the parties remains unresolved after mediation has been attempted in good faith, then either the City Manager or the Lessee Representative, upon written notice to the other, may refer the dispute for determination to a Board of Arbitration consisting of three (3) persons, one (1) chosen by and on behalf of the City Manager, one (1) chosen by and on behalf of the Lessee Representative and the third chosen by these two. (2) In case of failure of the two arbitrators appointed by the parties hereto to agree upon a third arbitrator, such third arbitrator shall be appointed by a Judge of The Court of Queen's Bench of New Brunswick. (3) No one shall be appointed or act as arbitrator who is in any way interested, financially or otherwise, in the conduct of the work or in the business or other affairs of either party. (4) Notwithstanding the provisions of the Arbitration Act (New Brunswick), the Board of Arbitration, upon such terms and conditions as are deemed by it to be appropriate, may allow a party to amend or supplement its claim, defence or reply at any time prior to the date at which the parties have been notified of the arbitration hearing date, unless the Board of Arbitration considers the delay in amending or supplementing such statements to be prejudicial to a party. The Board of Arbitration will not permit a party to amend or supplement its claim, defence or reply once the arbitration hearing has been scheduled. (5) The Board of Arbitration may encourage settlement of the dispute and, with the written agreement of the parties, may order that mediation, conciliation or other procedures be used by the parties at any time during the arbitration proceedings to encourage settlement. (6) If, during the arbitration proceedings, the parties settle the dispute, the Board of Arbitration shall, upon receiving confirmation of the settlement or determining that there is settlement, terminate the proceedings and, if requested by the parties, record the settlement in the form of an arbitration award on agreed terms. (7) Subject to subsection 14.3(8), any determination made by the Board of Arbitration shall be final and binding upon the parties and the cost of such determination shall be apportioned as the Board of Arbitration may decide. (8) Either party may appeal an arbitration decision to The Court of Queen's Bench of New Brunswick: (i) on a question of law; or (ii) on a question of fact; or (iii) on a question of mixed fact and law. (9) The place of arbitration shall be the City of Saint John and Province of New Brunswick and the provisions of the Arbitration Act (New Brunswick), shall apply to the arbitration. 33 14.4 Retention of Rights It is agreed that no act by either party shall be construed as a renunciation or waiver of any rights or recourses provided the party has given the notices required under this Article 14 and has carried out the instructions as provided in subsection 14.1. Article 15 - General 15.1 Force Majeure Notwithstanding any other provision contained herein, in the event that either the Lessor or the Lessee should be delayed, hindered or prevented from the performance of any act required hereunder by reason of any unavoidable delay, including strikes, lockouts, inclement weather, acts of God or any other cause beyond its reasonable care and control, but not including insolvency or lack of funds, then performance of such act shall be postponed for a period of time equivalent to the time lost by reason of such delay. The provisions of this Section 15.1 shall not under any circumstances operate to excuse the Lessee from prompt payment of Rent and/or any other charges payable under this Lease. 15.2 Effect of Waiver or Forbearance No waiver by any party hereto of any breach by any other party of any of its covenants, agreements or obligations contained in this Lease shall be or be deemed to be a waiver of any subsequent breach thereof or the breach of any other covenants, agreements or obligations, nor shall any forbearance by any party hereto to seek a remedy for any breach by any other party be a waiver by the party so forbearing of its rights and remedies with respect to such breach or any subsequent breach. The subsequent acceptance of Rent by the Lessor shall not be deemed a waiver of any preceding breach by the Lessee of any term, covenant or condition regardless of the Lessor such Rent. All Rent and other charges payable by the Lessee to the Lessor hereunder shall be paid without any deduction, set-off or abatement whatsoever, and the Lessee hereby waives the benefit of any statutory or other right in respect of abatement or set off in its favour at the time hereof or at any future time. 15.3 Obligations as Covenants and Survival of Obligations (1) Each obligation or agreement of the Lessee expressed in this Lease, even though not expressed as a covenant, is for all purposes considered to be a covenant. (2) All obligations of the Lessee shall expressly or by their nature survive termination or expiration of this Lease and shall continue in full force and effect subsequent to and notwithstanding such termination or expiration until and unless they are satisfied or by their nature expire. 15.4 Notices (1) Any notice required hereunder shall be in writing and any such notice and any delivery, payment or tender of money or document(s) to the parties hereunder may be delivered personally or sent by prepaid registered or certified mail or prepaid courier to the address for such party as set out herein, and any such notice, delivery or payment so delivered or sent shall be deemed to have been given or made and received upon delivery of same or on the third 34 (3rd) business day following the mailing of same, as the case may be. Each party may, by notice in writing to the others from time to time, designate an alternative address in Canada to which notices given more than ten (10) days thereafter shall be addressed. (2) Notwithstanding the foregoing, any notice, delivery, payment or tender of money or document(s) to be given or made to any party hereunder during any disruption in the service of Canada Post shall be deemed to have been received only if delivered personally or sent by prepaid courier. 15.5 Registration (1) Neither the Lessee nor anyone on the Lessee Lessee (including any assignee, sublessee or other occupant) shall register in full this Lease or any assignment, sublease or other instrument relating to this Lease against the Site. The Lessee may register a notice or caveat of this Lease provided that: (a) a copy of the Lease is not attached; and (b) the Lessor gives its prior written approval of the notice or caveat. (2) Upon the expiration or earlier termination of the Term, the Lessee shall immediately discharge or otherwise vacate any such notice or caveat. 15.6 Number, Gender, Effect of Headings Words importing the singular number only shall include the plural and vice versa, words importing the masculine gender shall include the feminine and neuter genders, and words importing persons shall include firms and corporations and vice versa. The division of this Lease into Articles and Sections and the insertion of headings are for convenience of reference only, and shall not affect the construction or interpretation of this Lease. 15.7 Severability Should any Article or Section or part or parts of an Article or Section in this Lease be illegal or unenforceable, it or they shall be considered separate and severable from the Lease and the remaining provisions of this Lease shall remain in full force and effect and shall be binding upon the Lessor and the Lessee as though such Article or Section or part or parts thereof had never been included in this Lease. 15.8 Entire Agreement There are no covenants, representations, warranties, agreements or other conditions expressed or implied, collateral or otherwise, forming part of or in any way affecting or relating to this Lease, save as expressly set out or incorporated by reference herein, and this Lease constitutes the entire agreement duly executed by the parties hereto, and no amendment, variation or change to this Lease shall be binding unless the same shall be in writing and signed by the parties hereto. 35 15.9 Successors and Assigns The rights and liabilities of the parties shall enure to the benefit of their respective heirs, executors, administrators, successors and permitted assigns, subject to any requirement for consent by the Lessor hereunder. \[signatures on following page\] 36 IN WITNESS WHEREOF the parties hereto have duly executed this Lease. Lessor: THE CITY OF SAINT JOHN Per: _______________________ Name: Title: Per: _______________________ Name: Title: Lessee: FUNDY QUAY DEVELOPMENTS INC. Per: _______________________ Title: Per: _______________________ Name: Title: 37 Site PID 55235113 Place Name: Saint John Parish/County: City of/Ville de Saint John/Saint John Designation of Parcel on Plan: Lot 18-2 Title of Plan: City of Saint John Subdivision Registration County: Saint John Registration Number of Plan: 38429529 Registration Date of Plan: 2018-09-27 PID 55221881 Place Name: Saint John Parish/County: City of Saint John/Saint John Label of Parcel on Plan: portion of South Market Wharf a Public Street/partie de la quai sud Market, une rue Publique Registration Number of Plan: 33263436 Registration County: Saint John Registration Date of Plan: October 30, 2013 Title of Plan: Plan of Survey Showing Ward Street, Peters Wharf and South Market Wharf, Montrant Rue Ward, quai Peters, et quai sud Market 38 B Provisions Applicable to Purchase Obligation The Lessee shall notify the Lessor prior to the end of the Term that it is ready to purchase the Site in accordance with its obligation to do so under Section 2.6 (the , provided however that the Lessee may only provide the Purchase Notice during the last six months of any given lease year of the Term. The Purchase Notice from the Lessee shall constitute a binding agreement of purchase and sale, provided that the Lessee is not then in default under the Lease unless waived by the Lessor. The closing of the Purchase Obligation shall be on the ninetieth day following the Purchase Notice from the Lessee, unless such date is not a Business Day, in which case the closing shall be on the next Business Day . Prior to the closing of the Purchase Obligation, the Lessee acknowledges and agrees that the Seawall and Harbour Passage shall be subdivided from the Site and shall remain the property of the Lessor. standard form of agreement of purchase and sale in effect at the time that the Purchase Notice is provided shall apply to the Purchase Obligation, to the extent applicable and where not inconsistent with the terms hereof. Provisions Applicable to Lessor The Put Exercise Notice from the Lessor shall constitute a binding agreement of purchase and sale. The closing of the Put Option shall be on the ninetieth day following the Put Exercise Notice from the Lessor, unless such date is not a Business Day, in which case the closing shall be on the next Business Day . Prior to the closing of the Put Option, the Lessee acknowledges and agrees that the Seawall and Harbour Passage shall be subdivided from the Site and shall remain the property of the Lessor. Provisions Applicable to that the Purchase Notice or the Put Exercise Notice, as applicable, is provided shall apply to the Purchase Obligation or the Put Option, as the case may be, to the extent applicable and where not inconsistent with the terms hereof. Such agreement of purchase and sale shall include an option on the part of the Lessor to repurchase the Site, free and clear of all encumbrances other than Permitted Encumbrances, in the event the Lessee fails to Commence Construction of a building having a minimum floor area of 50,000 square feet within 2 years of the Purchase Obligation Closing Date or the Put Option Closing Date, as applicable (in the event no such building has been previously constructed by the Lessee). The purchase price on such repurchase option shall be the original Purchase Price (as hereafter defined) paid by the Lessee, less the sum of $250,000.00. Provided however, the Lessor will provide the Lessee with notice of a six (6) month cure period in order 39 to Commence Construction of a building having a minimum floor area of 50,000 square feet prior to exercising such option to repurchase. The parties agree that this deduction to the original Purchase Price represents a genuine pre-estimate of the damages incurred by the n the time period agreed to herein. The agreement of purchase and sale shall include a provision that the Lessee shall execute and deliver to the Lessor on closing all such further documents as the Lessor may require for the purpose of giving effect to t Infrastructure Maintenance Fund in accordance with Section 5.6 subsequent the closing of the Purchase Obligation or the Put Option, as applicable. The purchase price , plus all applicable taxes, for the Site shall be based upon the following formula which takes into consideration the municipal revenue (being Ground Rent, Performance Payments, and property taxes collected by the Lessor pursuant to the Lease) and property taxes generated by the Site over the 25 year Term of the Lease, including the adjacent PID 55235105 owned by the Department of Transportation and Infrastructure if the Development extends thereto . In the event the Purchase Notice or the Put Exercise Notice, as applicable, is given prior to the end of the Term before the actual 25-year Municipal Revenue figures are known, the parties, acting reasonably, will extrapolate the known figures to determine the estimated 25-year Municipal Revenue figures. \[see chart on following page\] 40 41 Additional Purchase Price Reductions(Does not apply for Quadrants1Athrough 1Y) Where the actual or projected Municipal Revenue falls within the midrange between two revenue targets, the Purchase Price will be adjusted to proportionally decline between the two revenue thresholds. The following formula will determine the additional reduction in the Purchase Price. Additional Purchase Price Reduction = (Quadrant Price - Higher Quadrant Price) * Actual or Projected Revenue - Lower Revenue Threshold Upper Revenue Threshold - Lower Revenue Threshold An example of the application of a possible additional Purchase Price reduction is as follows: The following is an example to illustrate the application of the Additional Purchase Price Reduction Formula: th If the Lessee elects to complete its Purchase Obligation during the 20 year of the Term and has completed enough of the Development to generate $25 Million in Municipal Revenue over the 25 years of the Term, the following formula shall apply: Key values for the Formula: Quadrant Price = Quadrant 3T, $2,050,000 Higher Quadrant Price = Quadrant 4T, $850,000 Actual or Projected Revenue = $25,000,000 Lower Revenue Threshold = $20,000,000 Upper Revenue Threshold = $30,000,000 Additional Purchase Price Reduction = ($2,050,000 - $850,000)* $25,000,000 - $20,000,000 $30,000,000 - $20,000,000 Additional Purchase Price Reduction = ($1,200,000) * (0.5) Additional Purchase Price Reduction = $600,000 Therefore, based on the price adjustment above, the final Purchase Price for the Purchase Obligation would be: Purchase Price = Quadrant Price (3T) Additional Purchase Price Reduction Purchase Price = $2,050,000 - $600,000 Purchase Price = $1,450,000 42 Sched Letter of Credit Date of Issue: Irrevocable Standby Letter of Credit No.: Financial Institution Branch No.: Amount: Not exceeding CAD $ Date of Expiry: Applicant: Fundy Quay Development Inc. Applicant, as lessee. To: The City of Saint John Pursuant to the request of \[name of Lessee\] (hereinafter called "the Applicant"), we, \[name of bank/financial institution\], hereby establish and give to you an irrevocable standby letter of credit no. in your favour in the total amount of $ (Canadian dollars) which may be drawn on by you at any time and from time to time upon written demand for payment made upon us by you which demand we shall honour without enquiring whether you have a right as between yourself and the said Applicant to make such demand, and without recognizing any claim of the said Applicant for objection by it to payment by us. Your drawing by written demand for payment must bear reference to this letter of credit no. and be accompanied by: (a) a certificate signed by two officers of the Beneficiary certifying that the Applicant is in default of its contractual obligations under the Lease and that you are entitled to draw on this irrevocable standby letter of credit and that an amount of up to $ (Canadian dollars) be paid; and (b) presentation of the original of this letter of credit. Partial and multiple drawings are permitted under this letter of credit. All banking charges are for the account of the Applicant. 43 This irrevocable standby letter of credit no.shall expire on the day of subject to the following: This letter of credit shall be deemed to be automatically extended, without amendment for successive one year periods from the present day or any future expiration date, unless cancelled upon receipt of this original letter of credit accompanied by your written authorization to us to cancel same; The drawings under this irrevocable standby letter of credit are to state that they are drawn under \[insert name of financial institution\] irrevocable standby letter of credit no. . The rights of the Beneficiary hereunder in respect of this irrevocable standby letter of credit shall continue in full force and effect and shall not be waived, released, discharged, impaired or affected by reason of the release or discharge of the Applicant in any receivership, bankruptcy, proceedings under the Bankruptcy and Insolvency Act (Canada) or the Arrangement Act (Canada), or the surrender, disclaimer, repudiation or termination of the Lease. Yours very truly, _____________________________________ Authorization/Signature of Financial Institution _____________________________________ Authorization/Signature of Financial Institution December 2, 2019 Homelessness in Saint John: Presentation to Saint John Common Council www.sjhdc.ca Data Collect and manage homelessness dataReportingCoordinated Access ! Name List Coordination - Reaching HomeByNB Leadership Team on Homelessness www.sjhdc.ca www.sjhdc.ca www.sjhdc.ca 2018 Response www.sjhdc.ca individuals in the past year 67 Name List (BNL) - Building our BySuccessfully housed and supported Developed stronger partnerships within and outside of the homelessness response system (Social Development, SJ Energy, etc.) Avoided opening Out of the Cold Emergency Shelter Highlights and Successes: First Version of BNL (1 year ago) Saint John BNL (with fake names) 2018 Cont... www.sjhdc.ca Summer Snapshot Increase in participating agenciesFormalized procedures for assessment and prioritizationsWorked closely with Social Development Review of 2018 approachIdentified gaps in services and need for additional resources Ongoing monitoring of homelessness data throughout 2019Enhanced and improved the BNL processFall of 2019 Community Engagement SessionsSubmitted requests to the Province 2019 Response www.sjhdc.ca in locations for the winter months - Temporary warming locations in the event shelters are fullDay time drop term Opportunities: - term Opportunities: - Identify City assets that could be used for:Finalize MOU between Community Council on Homelessness (CCH) and the City Review Plan SJ, Zone SJ and Develop SJ to facilitate the fast tracking of development in affordable housing in Saint John Short Medium www.sjhdc.ca 1673 - info@sjhdc.ca Saint John, NB (506) 634 139 Prince Edward St. 2019 December 2 Presentation to Common Council m a e T 289 Sydney Street g n i n n a l P y t i n u m m o C & h t Њ w o r G DƩƚǞƷŷ ε /ƚƒƒǒƓźƷǤ 5ĻǝĻƌƚƦƒĻƓƷ {ĻƩǝźĭĻƭ Utilize portion of site for commercial parking lot Continue use of southern portion as snow lot (snow storage) Proposal Ћ Site Location Ќ Site Layout Ѝ Site Photos Ў Site Photos Џ Site Photos А Future Land Use and CPSP Б Primary CentreScreening from adjacent streetsSupport new investmentParking as interim useCPSP long term recreation and entertainment usesInterim uses until this occurs Future Land Use and CPSP В Zoning ЊЉ commercial parking lot, snow lot, other year term for commercial parking lot - Waterfront Commercial (CW) to Integrated Development (ID) Limit Uses seasonal uses5Enhanced landscaping along Vulcan Street Relax curbing requirementPermit shipping containers as in conjunction with interim uses Zoning ЊЊ November 8, 2019 November 7, 2019 - one in objection, one in support area landowners to Letter Two letters received Area landowner appeared at PAC with concerns City Staff discussion and meeting regarding Charlotte Street access to snow lot Public Engagement ЊЋ Commercial parking lot;Snow lot;Farmers market or seasonal retail use;Interpretive center;Recreational useWalking trail;Special events and associated infrastructure year term for commercial parking lot - Permitted Uses5 That Common Council rezone the site to Integrated Development (ID) Recommended Section 59 conditions Staff Recommendation ЊЌ Detailed site planLandscaping along Vulcan Street frontage by June 20, 2020 Relaxation of requirement for concrete curb and gutter Permit shipping containers in association with permitted use Recommended Section 59 conditions Staff Recommendation ЊЍ similar to that at 35 Water shrubs or ornamental - link fence along Vulcan Street and Sydney - Removal of chainStreet frontagesPlanting types along Vulcan Street grassesEdge treatment along Vulcan Street Street Adopted amended Staff Recommendation Rezone site to Integrated Development (ID) Additional / amended conditions Remaining conditions were as outlined in original Staff Recommendation PAC Recommendation ЊЎ Site Location ЊЏ PLANNING ADVISORY COMMITTEE SUBJECT:Rezoning 289 SydneyStreet RECOMMENDATION: Community Planning Act Date: To: From: For:Meeting ofTuesday,November 19, 2019 SUBJECT Applicant: Owner: Location: PID: PlanDesignation: Existing Zoning: Proposed Zoning: Application Type: Jurisdiction:Community Planning Act Monday,December 2, 2019 SUMMARY RECOMMENDATION Community Planning Act DECISION HISTORY ANALYSIS Proposal Site and Neighbourhood Municipal Plan, Central Peninsula Secondary Plan (Proposed) and Rezoning Community Planning Act Act Parking Area Snow Lot . Conclusion ALTERNATIVESAND OTHER CONSIDERATIONS ENGAGEMENT Public SIGNATURES AND CONTACT Primary AuthorSenior Planner/ManagerCommissioner/Dept. Heads Contact: Phone: E-mail: Project: APPENDIX Site Location Municipal Plan Zoning Aerial Photography Site Photography Site Plan Municipal Plan Policy Review 289 Sydney Street N S T S Y E A1 c 2019 DateDate 0 EXP Services Inc. Rev. No. OSE ACM 1:250 Issue Revision PARKING SITE PLAN . c PRELIMINARY n C-1 I s SITE AREA VULCAN STREET e SNB-00255708-A0 c i v r e S •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• P •••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••• X No.No. AUTHORIZATION MUST BE IN WRITING.••••••••••••••••••••••••Professional Seal(s)Drawn By:Dwg Standards Ckd By:Designed By:Design Checked By:Scale:Project TitleDwg. TitleProject No.Dwg. No. CAUTION: DO NOT SCALE DRAWINGS.THIS REPRODUCTION MAY BE AT A SIZE DIFFERENT THAN ORIGINALLY DRAWN. EXP ASSUMESNO RESPONSIBILITY FOR INCORRECT SCALING. UNAUTHORIZED REPRODUCTION OR REUSE ISSTRICTLY PROHIBITED. NOT PUBLISHED - ALL RIGHTS RESERVED. EXP EXPRESSLY DISCLAIMSRESPONSIBILITY ARISING FROM UNAUTHORIZED USE OF THESE DRAWINGS AND NOTES. KEY PLAN SCALE 1:20000 t: +1.506.646.8020 | f: 1.506.646.8025602 Rothesay Avenue Saint John, N.B. E2H 2H1CANADA E www.exp.com ET SYDNEY STRE TREES (17)CLUSTER EXISTINGDECIDUOUSEXISTING TREE 10.67m X X PUBLIC / TRUCK ENTRANCE X XX X XX XX X XX XX X X X 18 X X EXISTING GATE X (8 TREES) EXISTING CONIFEROUS TREES 30 15 X X X 7.5 X X AREA 7.5 X 2 SNOW REMOVAL / ACCUMULATION X X 2.75 PEDESTRIAN GATE X X 5.5 X X T E E R X T S X N A C L XX XXXX XXX XXXX U V EXISTING FENCE E N I L Y T R E P O R P E T A M I X O R P P A C:\\USERS\\EMERYO\\DOWNLOADS\\VULCAN\\SHEETOLIVER EMERY9/18/2019 3:24 PM Appendix A-Municipal Plan Policy Review289 Sydney Street PolicyStaff Comments From:Proximity To:Reade, Mark Subject:Saint John 289 Sydney Street - rezoning - CN Comments Date:November 19, 2019 12:20:25 PM Attachments:Saint John 289 Sydney Street - rezoning.pdf Good afternoon Mark Thank You for circulating CN Rail on the proposed rezoning of 289 Sydney Street. I have reviewed the information circulated and CN has no comments on the rezoning. Future planning and development notifications can be sent to proximity@cn.ca. If hard copy ĭźƩĭǒƌğƷźƚƓ źƭ ƩĻƨǒźƩĻķ ĬǤ ƷŷĻ ƒǒƓźĭźƦğƌźƷǤ͸ƭ ƦƩƚĭĻƭƭĻƭͲ ƷŷĻǤ ĭğƓ ĬĻ ƭĻƓƷ Ʒƚ ƒǤ ğƷƷĻƓƷźƚƓ ğƷ ƷŷĻ coordinate below. Regards Susanne Susanne Glenn-Rigny, MCIP, RPP, OUQ Precision Railroading: Doing it well and always improving From:Brian Bell To:Reade, Mark;Brian Bell;Darling, Don Subject:289 Sydney Street - project No. 19-220 Date:November 19, 2019 8:19:08 PM Brian Bell PO Box 5079 Shediac, NB E1C 1H8 506-647-7725 Avenue December 2, 2019 Millidge Presentation to Common Council m a e T g n i 431 n n a l P y t i n u m m o C & h t w o r G DƩƚǞƷŷ ε /ƚƒƒǒƓźƷǤ 5ĻǝĻƌƚƦƒĻƓƷ {ĻƩǝźĭĻƭ portion of Rezone a portion of the site to facilitate a new commercial development (medical and dental clinic).Rezoning required as building has been adjusted due to site constraints from original rezoning the site has ended up in residentially zoned lands.Adjustment of the zoning boundary required. Proposal Ћ Site Location & Aerial Ќ Site Plan Ѝ Site Photos Ў Site Photos Џ Site Photos А Future Land Use Б Zoning В (Section 59 conditions) Proposed Section 59 conditions similar to previous rezoning application.Ensures consistent application over the future overall commercially zoned area. Zoning ЊЉ Avenue from R2 to CG; and Millidge Avenue to ensure consistent application over PAC recommend that Common Council rezone the portion of 431 PAC recommend that Common Council impose the proposed Section 59 conditions to the portion of 431 Millidgethe future commercial site. Staff Recommendation to PAC Staff recommend:ЊЊ management existing condition is - 1 of support, 1 of stormwater pre . neighbours incorporated into report. Section 59 condition proposed for plan which will address issue once development occurs. 1 letter of concern received at referral report meeting from neighbor 2 Letters received prior to PAC concern.Concerns related to drainage a matter between Public Engagement ЊЋ . Avenue from R2 to Millidge Avenue to ensure consistent Millidge the portion of 431 the proposed Section 59 conditions to the Rezone CG; andAdopt portion of 431 application over the future commercial site PAC Recommendation Planning Advisory Committee recommends Common Council:ЊЌ Site Location & Aerial ЊЍ PLANNING ADVISORY COMMITTEE November 20, 2019 His Worship Mayor Don Darlingand Members of Common Council Your Worship and Councillors: SUBJECT:Rezoning 431 Millidge Avenue OnOctober 21, 2019 Common Council referred the above matter to the Planning Advisory Committee for a report and recommendation.The Committee considered the attached report at itsNovember 19, 2019meeting. Cristian Parascan, the applicant, appeared before the Committee and indicated they were in agreement with the staff recommendation. The applicant explained that the additional rezoning was as a result of site conditions which and has resulted in the building being pushed further back onto the parcel. Christine Comeau ofDevelopSJ also spoke in support of the proposed application. She advised that DevelopSJ had been working with the applicant to facilitate discussions with the neighbours related to existing drainage issues. Committee had no questions for the applicant on the proposal. No other persons appeared before the Committee regarding the application and staff noted the letter received at the time of the referral report (attached in the report), a letter of support and letter of concern received from nearby property owners. After considering the report and the comments made by the applicant, the Committee adopted the staff recommendation contained in the report. RECOMMENDATION: 1.That Common Council rezone a portion of a parcel of land having an area of 844 square metres, located at 431 Millidge Avenue, also identified as a portion of PID 00041483, from Residential – Two Unit (R2) to General Page 1 of 3 Cristian Parascan431 Millidge AveNovember 20, 2019 Commercial (CG). 2.ThatCommon Council, pursuant to Section 59 of the Community Planning Act, the development and use of a portion of a parcel of land with an area of approximately 844 square metres, located at 431 Millidge Avenue, also identified as a portion of PID 00041483, be subject to the following conditions: a.That the use of the property be restricted to a medical clinic or related uses; b.That the maximum gross floor area of the proposed building not exceed 600 square metres; c.That the gross floor area 600 square metres to a maximum of 750 square metres be approved, subject to further review and consideration by staff; d.That all parking areas and driveways be paved with asphalt or concrete and enclosed by continuous cast-in-place concrete curbs to protect landscaping and facilitate proper drainage; e.No parking shall be located between the building and the street; f.That all disturbed areas of the site no occupied by buildings and vehicular areas must be landscaped; g.Thatthe applicant’s consultant conductatraffic impact study and submit ittothe City’s Chief Engineer, or his designate,forreview and approval prior to theissuance of the buildingpermit.The study mustreview the proposed location oftheaccess andassess therisk ofthe proposedaccess,and provide potential mitigation measures. All required improvementsidentified in the report as necessary to enhance the safety of the site mustbeincluded in the design onthe site plan and completed prior tothe occupancy ofthe buildingfor business purposes h.The stormwater drainage for the site must be developed and maintained in accordance with a detailed stormwater drainage plan and design brief prepared by the proponent and subject to approval by the Chief City Engineer or his designate; i.The site shall not be developed except in accordance with a detailed site plan and building elevations, prepared by the Page 2 of 3 Cristian Parascan431 Millidge AveNovember 20, 2019 developer and subject to approval of the Development Officer, indicating the location of all buildings, parking areas, driveways, loading areas, signs, exterior lighting, landscaped areas, including location of planting materials and other site features; j.The approved plans mentioned in condition (f) and (g) must be attached to the application for building permit for the development; and k.All work shown on the site plan and drainage plan must be completed by the proponent within one year of the building permit being issued. Respectfully submitted, Rick Stephen Vice Chair Attachments Page 3 of 3 Date:November 15, 2019 To:PlanningAdvisory Committee From:Growth & Community Planning Growth & Community Development Services For:Meeting ofTuesday,November 19, 2019 SUBJECT Applicant:Cristian Parascan Owner:680707 N.B. Ltd. Location:431 Millidge Avenue PID:00041483 PlanDesignation:Low to Medium Density Residential Existing Zoning:Two-Unit Residential (R2) Proposed Zoning:General Commercial (CG) Application Type:Rezoning Jurisdiction:The Community Planning Actauthorizes the Planning Advisory Committee to give its views to Common Council concerning proposed amendments to the Zoning By-law. Common Council will consider the Committee recommendation at a public hearing onMonday,December 2, 2019. Page 1of 9 Cristian Parascan431 Millidge AvenueNovember 15, 2019 SUMMARY The proposal is to rezone an approximate844squaremetre portion of the sitefrom Two-Unit Residential (R2) to General Commercial (CG) in order to accommodate a future commercial building that will consist of a medical clinic.This rezoning is required dueto the discovery of boggy conditions in the front of the parcel which is not suitable for situating the building.As a result, the building has been pushed further from the street, causing a rear parking area to intrude into the residentially zoned area. A rezoning for a small portion of the residential lands to the CG zone is required to correct this issue. RECOMMENDATION 1.That Common Council rezone a portion of a parcel of land having an area of 844square metres, located at 431 Millidge Avenue, also identified as a portion of PID 00041483, from Residential Two Unit (R2) to General Commercial (CG). 2.That, pursuant to Section 59 of the Community Planning Act, the development and useof a portion of a parcel of land with an area of approximately 844 square metres, locatedat431 Millidge Avenue, also identified as a portion of PID 00041483, be subject to thefollowing conditions: a.That the use of the property be restricted to a medical clinic or related uses; b.That the maximum gross floor area of the proposed building not exceed 600 square metres; c.That the gross floor area 600 square metres to a maximumof 750 square metres be approved, subject to further review and consideration by staff; d.That all parking areas and driveways be paved with asphalt or concrete and enclosed by continuous cast-in-place concrete curbs to protect landscaping and facilitate proper drainage; e.No parking shall be located between the building and the street; f.That all disturbed areas of the site no occupied by buildings and vehicular areas must be landscaped; g.mit it to the issuance of the building permit. The study must review the proposed location of the access and assess the risk of the proposed access, and provide potential mitigation measures. All required improvements identified in the report as necessary to enhance the safety of the site must be included in the design on the Page 2of 9 Cristian Parascan431 Millidge AvenueNovember 15, 2019 site plan and completed prior to the occupancy of the building for business purposes h.The stormwater drainage for the site must be developed and maintained in accordance with a detailed stormwater drainage plan and design brief prepared by the proponent and subject to approval by the Chief City Engineer or his designate; i.The site shall not be developed except in accordance with a detailed site plan and building elevations, prepared by the developer and subject to approval of the Development Officer, indicating the location of all buildings, parking areas, driveways, loading areas, signs, exterior lighting, landscaped areas, including location of planting materials and other site features; j.The approved plans mentioned in condition (f) and (g) must be attached to the application for building permit for the development; and k.All work shown on the site plan anddrainage plan must be completed by the proponent within one year of the building permit being issued. DECISION HISTORY At the November 4, 2019meeting, Common Council gave accent for Money-in-lieu of Land for Public Purposes for the proposed subdivision of 431 Millidge Avenue, which will create the new parcel for the future commercial building. This subdivision recognizes site conditions and the building placement being adjusted. Registration of the Subdivision to create thenew larger lot is pending the outcome of this rezoning application. At the September 15, 2014 meeting of Common Council, third reading was given to a Zoning By-law amendment and associated Section 39 (now 59) conditions to rezone a portion of 431 MIllidge Avenue to General Business (B2) Zone (the predecessor to the CG Zone). Those conditions are proposed for this rezoning in order to ensure consistency of application to the overall commercial site. ANALYSIS Proposal The proposal is to rezone a portion of 431 Millidge Avenue (approximately 844square metres) from Two-Unit Residential (R-2) to General Commercial (CG) to enable site plan changes for the constructionof a commercial building. The buildingwill containamedical and dental clinic. The original site plan from the 2014 application indicated the future building being located closer to Millidge Avenue than the current proposal. As site analysis for the required permits and Page 3of 9 Cristian Parascan431 Millidge AvenueNovember 15, 2019 associated documents occurred, itwas determined that the front area of the site is not appropriate for the future building as there is significantly boggy areas that would not support a building. The applicant has since revised their proposed site design, however due to parking requirementsa small portion of the parking area for the buildingended up outside of the area zoned CG.This rezoning has been necessitated due to these site plan changes and in order to ensure parking for commercial uses, remained in the CG zoned lands. The proposed building remains generally the same size as was proposed in the 2014 rezoning and is limited in gross floor area as per the section 59 conditions imposed during the rezoning (Appendix2).Those conditions are proposed for this rezoning to ensure consistent application of conditions to the overall commercially zoned area. These conditions will require (among other things) a stormwater management plan to ensure that all drainage is retained on the site tormwater system reducing impacts of drainage on adjacent parcels. Drainage By-law, which now regulates stormwater management for new developments. Site and Neighbourhood Thesite is located in the Millidgeville Area of the City. The lot is located on the western side of Millidge Avenue where the road intersects with Somerset Street. The lot is currently undeveloped with significant tree cover at the rear of the lot. The surrounding residential properties on Millidge Avenue consists of a variety of residential dwellings, as well as various commercial developments (strip mall and car lot). The area is well serviced by public transit and active transportation. Municipal Planand Rezoning The subject property is located in the Low to Medium Density Residential future land use compatibility that small-scale commercial land uses have with residential communities. time by allowing land uses that are complimentary to residential neighbourhoods, such as commercial sites which can include medical and dental clinics. A complete community offers convenient access for its residents to a mix of local services, housing, employment, recreation, transit and active transportation. This area has been slowly developing out a natural commercial node, with a variety of different services to support area residents. The proposed rezoning will facilitate the original intent of the 2014 rezoning additional services for local residents. Variances A preliminary review of the proposed site plan that has been submitted with this rezoning application has been completed. Staff have identified the possibility of a side yard variance and variance to parking area distances to residential properties may beneeded at the permitting Page 4of 9 Cristian Parascan431 Millidge AvenueNovember 15, 2019 stage. Should these variances be needed, they will be processed by the Development Officer. Subdivision A subdivision application was review by Committee at the October 16, 2019 where money-in- lieu of Lands for Public Purposes (LPP) was recommended for approval. Committee endorsed this recommendation, which was approved by Common Council at their meeting of November 4, 2019. In that report, it was noted that a rezoning for the additional lands (currently zoned R2) would be required. The Development Officer will approve the subdivision once monies for LPP are paid. Registration of the subdivision with Service New Brunswick for registration and creation of the new lot will occur following the outcome of this rezoning application. Conclusion Staff are supportive of the proposed rezoning as this would adjust the boundary of the CG area to take into account the revised proposal. The building size is limited through pre-existing Section 59 conditions, which will continue to apply even with the new proposal. Additional pre- existing conditions requiring stormwater management plans and a traffic impact analysis will be required at the permitting stage in order to satisfy the City that impacts to adjacent properties and the street network are mitigated. ALTERNATIVESAND OTHER CONSIDERATIONS No alternatives were considered. ENGAGEMENT Public In accordof Procedure, notification of the proposal was sent to landowners within 100 metres of the subject propertyonNovember 7, 2019.The publichearing for the rezoning was advertised on the City websiteonNovember 8, 2019. Adjacent Resident Comments referral report Aletter from an adjacent resident was received by Common Council on October 21, 2019 as Council initiated the review process of this application. The comments provided in that letter were considered as part of this application. That letter is found as Appendix1to this report. Staff have reviewed the concerns raised by the neighbour from both the letter and PAC meeting of October 16, 2019. Much of the drainage issue does appear to be a result of pre-existing site conditions and is civil matter between landowners. The applicant has reached out to neighbours to discuss this issue and those conversations are being facilitated with the help of DevelopSJ. The pre-existing conditions for the original commercial zoned lands (proposed for the additional lands) includes a condition requiring astormwater management plan be submitted with the Building Permit when development proceeds. This will ensure that all drainage of the Page 5of 9 Cristian Parascan431 Millidge AvenueNovember 15, 2019 lands once the new building is constructed ismanaged and should not impactadjacent parcels. Noise related issues are -law and the uses would likely operate normal business hours with some instances of evening operations. APPROVALSAND CONTACT Primary AuthorSenior Planner/ManagerCommissioner/Dept. Heads Kenneth Melanson, RPP,Mark Reade, RPP, P. Eng.Jacqueline Hamilton, RPP, MCIPMCIP Contact:Kenneth Melanson Phone:(506) 721-8694 E-mail:ken.melanson@saintjohn.ca Project:19-0217 APPENDIX Map1:Site Location Map2:Municipal Plan Map3:Zoning Map 4:Aerial Photography Map 5:Site Photography Appendix1letter from adjacent neighbour received by Common Council Appendix2Original Section 39 (now 59) conditions from 2012 rezoning Submission1Site Plan Page 6of 9 Cristian Parascan431 Millidge AvenueNovember 15, 2019 Appendix1letter received by Common Council October 21, 2019 (with referral report) To whom it may concern ; My name is Chrystal Yeomans I live at 451 Millidge Ave in saint John New Brunswick! I am against 431 Millidge ave being rezoned to commercial as in 2015 it was approved for a medical and dental office and now they are wanting to rezone the rest of the property they own to commercial. We already have water damage from the clearing of trees and filling in of natural spring. I was at the PAC meeting and spoke with the owner whom was supposed to call us and talk to us about our property having water damage. We have not heard from him. I am not against growth, but I am against growth that destroyed my personal property. I was very disappointed as my questions were not addressed at the PAC I was repeatedly told it was a civil matter. If that is the case then why is it when I met with Mr Patrick Beamish he did not inform me ? A few questions I would like answers for are as follows Exactly what is going to be places at 431 Millidge ave if rezoned to commercial ? When is my property going to be fixed due to water damage of clearing trees and filling in of natural spring ? Is more water damage going to occur ? How noisy will it be as I work shift work ? Is our property tax going to increase during to new construction? Is the work going to cause disturbance to our cliff in the back yard? How much increase of the traffic flow as the Millidge ave and summerset intersection as it is already busy and frequent horn blowing with near misses and accident? How noisy will the neighbor hood be with it all commercial? Thank you Chrystal Yeomans 451 Millidge Ave Saint John New Brunswick Page 7of 9 Cristian Parascan431 Millidge AvenueNovember 15, 2019 Appendix2Original Section 39 (now 59) conditions from 2014 rezoning Pursuant to Section 39 of the Community Planning Act, the development and use of the parcel of land with an area of approximately 3,250 square metres, located at 431 Millidge Avenue, also identified as being a portion of PID Number 00041483, being subject to the following conditions: a.That the use of the property be restricted to a medical clinic or related uses; b.That the maximum gross floor area of the proposed building not exceed 600 square metres; c.That the gross floor area 600 square metres to amaximum of 750 square metres be approved, subject to further review and consideration by staff; d.That all parking areas and driveways be paved with asphalt or concrete and enclosed by continuous cast-in-place concrete curbs to protect landscaping and facilitate proper drainage; e.No parking shall be located between the building and the street; f.That all disturbed areas of the site no occupied by buildings and vehicular areas must be landscaped; g.and submit it to the issuance of the building permit. The study must review the proposed location of the access and assess the risk of the proposed access, and provide potential mitigation measures. All required improvements identified in the report as necessary to enhance the safety of the site must be included in the design on the site plan and completed prior to the occupancy of the building for business purposes. h.The stormwater drainage for the site must be developed and maintained in accordance with a detailed stormwater drainage plan and design brief prepared by the proponent and subject to approval by the Chief City Engineer or his designate; i.The site shall not be developed except in accordance with a detailed site plan and building elevations, prepared by the developer and subject to approval of the Development Officer, indicating the location of all buildings, parking areas, driveways, loading areas, signs, exterior lighting, landscaped areas, including location of planting materials and other site features; Page 8of 9 Cristian Parascan431 Millidge AvenueNovember 15, 2019 j. The approved plans mentioned in condition (f) and (g) must be attached to the application for building permit for the development; and k. All work shown on the site plan and drainage plan must be completed by the proponent within one year of the building permit being issued. Page 9of 9 From:gcl@nb.sympatico.ca To:onestop Cc:Melanson, Ken Subject:Response to Rezoning Application - 431 Millidge Avenue Date:November 14, 2019 2:14:02 PM Attachments:City of Saint John_Rezoning Application_431_Milledge_RESPONSE.pdf To whom it may concern: Attached is the response from King Rentals Ltd., owner of PID 49817, regarding the rezoning application for 431 Millidge Avenue. Regards, Tim Colwell, EIT 660 Ready Street Saint John, NB E2M 3S5 Phone - (506) 635-8855 Cell - (506) 651-4443 Fax - (506) 635-1944 2019 November 19 35 Water Street m a e T g n i n n Presentation to Planning Advisory Committee a l P y t i n u m m o C & h t w o r G DƩƚǞƷŷ ε /ƚƒƒǒƓźƷǤ 5ĻǝĻƌƚƦƒĻƓƷ {ĻƩǝźĭĻƭ Utilize portion of site for commercial parking lot Interim use until site developedSite work including seawall reconstruction and fill placementSite work for future developmentProposed uses in CW zone in conjunction with CPSP Proposal Ћ Commercial Parking Lot 5 year term for parking as opposed to 1 yearSeeks land use approvals for seawall rehabilitation and climate change adaptation workAmends 2012 conditions relating to approval of future developmentPermit interim / seasonal uses Temporary use application denied by PAC October 16, 2019Current application is substantially different Proposal Ќ Site Location Ѝ Site Layout Ў Past Parking Approvals Site Layout Џ Site Photos А Site Photos Б Site Photos В Future Land Use and CPSP ЊЉ Telegraph Building Increase demand / Remove supply Site forecast to operate at between 85% and 89% capacity term incremental site development - 2017 Supply meets demandFuture Development in Uptown Primary CentreLongMoveSJ Parking Study Future Land Use and CPSP ЊЊ Zoning ЊЋ Design ReviewSection 59 Amendment year term for commercial parking lot - Waterfront Commercial (CW)Section 59 conditions limit to use approved by CouncilExpand Permitted Uses5Enhanced landscaping along Water Street Relax curbing requirementPermit shipping containers as in conjunction with interim usesPermanent development Zoning ЊЌ November 8, 2019 November 7, 2019 - of the proposal area landowners to Letter One letter of support received to dateArea business operator appeared before PAC and spoke in favour Develop Saint John provided update to PAC of current status including RFP Public Engagement ЊЍ 59 Amendment Permitted Uses Installed by June 30, 2020Design ReviewApproved through Section year term for commercial parking lot - Expand 5Enhanced landscaping along Water Street Relax curbing requirementPermit shipping containers as in conjunction with interim usesPermanent development That Common Council amend the Section 59 conditions: Staff Recommendation ЊЎ 2020) June 30, (by added condition by PAC Amendment amended recommendation Permitted Uses Design ReviewApproved through Section 59 year term for commercial parking lot - Additional condition related to lighting Expand 5Enhanced landscaping along Water Street Relax curbing requirementPermit shipping containers as in conjunction with interim usesPermanent development Adopted Amended Staff Recommendation Planning Staff concur with the PAC Recommendation ЊЏ Site Location ЊА PLANNING ADVISORY COMMITTEE SUBJECT:Section 59 Amendment 35 Water Street RECOMMENDATION: Community Planning Act Community Planning Act, Community Planning Act Date: To: From: For:Meeting ofTuesday,November 19, 2019 SUBJECT Applicant: Owner: Location: PID: PlanDesignation: Existing Zoning: Application Type: Jurisdiction: SUMMARY RECOMMENDATION Community Planning Act Community Planning Act, Community Planning Act DECISION HISTORY ANALYSIS Proposal Site and Neighbourhood Municipal Plan, Central Peninsula Secondary Plan (Proposed)andZoning Scope of permitted uses Parking Lot Period of Operation- Parking Area Recommended Section 59 Conditions Conclusion ALTERNATIVESAND OTHER CONSIDERATIONS ENGAGEMENT Public APPROVALSAND CONTACT Primary AuthorManagerCommissioner/Dept. Head Contact: Phone: E-mail: Project: APPENDIX Site Location Municipal Plan Zoning Aerial Photography Site Photography Site Plan Municipal Plan Policies Area of commercial parking associated withthis application A1 c 2018 DateDate 0 EXP Services Inc. Rev. No. AO AM MJLMJL AS NOTED Issue Revision FORMER . c PRELIMINARY n A-2 I s e SNB-00246827-A0 c i LAYOUT - OPTION 2 v NEW SITE PARKING COAST GUARD SITE r e S • BUILDINGS • EARTH & ENVIRONMENT • ENERGY • P • INDUSTRIAL • INFRASTRUCTURE • SUSTAINABILITY • X No.No. AUTHORIZATION MUST BE IN WRITING. © EXP, 2018 Professional Seal(s)Drawn By:Dwg Standards Ckd By:Designed By:Design Checked By:Scale:Project TitleDwg. TitleProject No.Dwg. No. CAUTION: DO NOT SCALE DRAWINGS.THIS REPRODUCTION MAY BE AT A SIZE DIFFERENT THAN ORIGINALLY DRAWN. EXP ASSUMESNO RESPONSIBILITY FOR INCORRECT SCALING. UNAUTHORIZED REPRODUCTION OR REUSE ISSTRICTLY PROHIBITED. NOT PUBLISHED - ALL RIGHTS RESERVED. EXP EXPRESSLY DISCLAIMSRESPONSIBILITY ARISING FROM UNAUTHORIZED USE OF THESE DRAWINGS AND NOTES. E t: +1.506.646.8020 | f: +1.506.646.8025602 Rothesay AvenueSaint John, NB E2H 2H1CANADAwww.exp.com 1:250 PRINCESS ST. WATER ST. SIDEWALKTOPSOILEXISTINGFLOWER BEDSEXISTINGFLOWER BEDS &TREE EXISTINGEXISTINGEXISTING TREES 12 m 7.5 m LINE OF EXISTING FENCE 12 m 12 m NEW SHRUBS 12 m 12 m PETERS WHARF SAFETY BUFFER FOR JERSEY BARRIERS LINE OF EXISTING FENCE 2.7 m 11.93112 m5.5 m1.5 m SITE PLANNEW SITE PARKING LAYOUT 1 A-1 \\\\TROW.COM\\PROJECTS\\SNB\\SNB-00246827-A1\\60 PROJECT EXECUTION\\60.1 CADD\\19-08-02 NEW PARKING PLANALANA O'HALLORAN8/6/2019 4:14 PM Appendix A-Municipal Plan Policy review 35 Water Street Policy Staff Comments Appendix B Α Area of commercial parking associated with this application From:onestop To:Melanson, Ken;Reade, Mark Subject:FW: Section 59 amendment Date:November 14, 2019 10:54:22 AM Paula Hawkins One Stop Development Shop Permitting & Inspection Services 10th floor – City Hall Saint John, NB E2L 4L1 (506)658-2911 paula.hawkins@saintjohn.ca onestop@saintjohn.ca -----Original Message----- From: Jennifer Irving \[mailto:hello@jenniferirving.com\] Sent: November 13, 2019 7:06 PM To: onestop <onestop@saintjohn.ca> Subject: Section 59 amendment To whom it may concern, I am in support of the amendment of section 59. I look forward to future developments on this property and the opportunities it will bring to Water street. Thank you, Jennifer Irving Jennifer Irving Photography Inc. 62 Water street wĻĭĻźǝĻķ 5ğƷĻ bƚǝĻƒĬĻƩ ЋАͲ ЋЉЊВ aĻĻƷźƓŭ 5ğƷĻ 5ĻĭĻƒĬĻƩ ЉЋͲ ЋЉЊВ hƦĻƓ ƚƩ /ƌƚƭĻķ hƦĻƓ {ĻƭƭźƚƓ Iźƭ ƚƩƭŷźƦ 5ƚƓ 5ğƩƌźƓŭ ğƓķ aĻƒĬĻƩƭ ƚŅ /ƚƒƒƚƓ /ƚǒƓĭźƌ ƚǒƩ ƚƩƭŷźƦ ğƓķ /ƚǒƓĭźƌƌƚƩƭʹ {ǒĬƆĻĭƷʹ /ƚǒƓĭźƌ /ƚķĻ ƚŅ /ƚƓķǒĭƷ .ğĭƉŭƩƚǒƓķʹ ŷĻ /ƚǒƓĭźƌ /ƚķĻ ƚŅ /ƚƓķǒĭƷ źƭ ƭƷźƌƌ ƩĻƌğƷźǝĻƌǤ ƓĻǞ Ʒƚ ǒƭͲ ğƓķ ǞŷźƌĻ ƷŷĻ ĭƚķĻ źƷƭĻƌŅ Ǟğƭ ƒğƓķğƷĻķ ĬǤ ƷŷĻ ƦƩƚǝźƓĭĻͲ ƷŷĻ ƒĻĭŷğƓźƭƒ ğƓķ ƭƷƩǒĭƷǒƩĻ ŅƚƩ źƷƭ źƒƦƌĻƒĻƓƷğƷźƚƓ źƭ ƌğĭƉźƓŭ͵ Ļ ŷğǝĻ ĬĻĻƓ ĭŷğƌƌĻƓŭĻķ źƓ ƷŷĻ ƦğƭƷ ŅĻǞ ƒƚƓƷŷƭ ǞźƷŷ ĭƚƒƦƌğźƓƷƭ ǒƓķĻƩ ƷŷĻ ĭƚķĻ ƚŅ ĭƚƓķǒĭƷͲ ğƓķ źƷ źƭ ƒǤ ĬĻƌźĻŅ ƷŷğƷ ǞĻ ğƩĻ ƓƚƷ ĭǒƩƩĻƓƷƌǤ ĭğƦğĬƌĻ ƚŅ ŷğƓķƌźƓŭ ƷŷĻƒ źƓ ğƓ ĻŅŅźĭźĻƓƷ ğƓķ ƦƩƚŅĻƭƭźƚƓğƌ ƒğƓƓĻƩ ĬĻĭğǒƭĻ ƚŅ Ʒŷźƭ ƌğĭƉ ƚŅ ƦƩƚĭĻƭƭ͵ L ŷğǝĻ ğƷƷğĭŷĻķ ğ ƭğƒƦƌĻ ƦƩƚĭĻƭƭ ŅƚƩ ĭƚƓƭźķĻƩğƷźƚƓ ğƓķ Ʒƚ ƦƩƚƒƚƷĻ ŅǒƩƷŷĻƩ ķźƭĭǒƭƭźƚƓ ğŅƷĻƩ ƭƷğŅŅ ŷğǝĻ ŷğķ ğƓ ƚƦƦƚƩƷǒƓźƷǤ Ʒƚ źƓǝĻƭƷźŭğƷĻ ĬĻƭƷ ƦƩğĭƷźĭĻƭ͵ Ļ ƓĻĻķ ğ ƦƩƚĭĻƭƭ ƷŷğƷ ǞĻ ĭğƓ ŅƚƌƌƚǞ ƷŷğƷ ĻƓƭǒƩĻƭ ƷŷğƷ ƷŷĻ ĭƚƒƦƌğźƓğƓƷ źƭ ƭğƷźƭŅźĻķ ƷŷğƷ ğƓ ğƦƦƩƚƦƩźğƷĻ ƦƩƚĭĻƭƭ ŷğƭ ĬĻĻƓ ŅƚƌƌƚǞĻķͲ ğƓķ ğƌƭƚ ĻƓķǒƩĻƭ ƷŷğƷ ƷŷĻ ĭƚǒƓĭźƌ ƒĻƒĬĻƩ ĭğƓ ŅĻĻƌ ĭƚƓŅźķĻƓƷ ƷŷğƷ ƷŷĻ ƦƩƚĭĻƭƭ ŷğƭ ĬĻĻƓ ŅğźƩ ğƓķ ƷŷĻǤ ŷğǝĻ ĬĻĻƓ ƩĻƭƦĻĭƷĻķ ƷŷƩƚǒŭŷƚǒƷ͵ aƚƷźƚƓʹ ŷĻ ƭǒĬƆĻĭƷ ƚŅ ğ /ƚǒƓĭźƌ /ƚķĻ ƚŅ /ƚƓķǒĭƷ /ƚƒƦƌğźƓƷ wĻƭƚƌǒƷźƚƓ tƩƚĭĻķǒƩĻ ĬĻ ƩĻŅĻƩƩĻķ Ʒƚ ƭƷğŅŅ Ʒƚ źƓǝĻƭƷźŭğƷĻ ĬĻƭƷ ƦƩğĭƷźĭĻƭ ğƓķ ƩĻĭƚƒƒĻƓķ ğ ƦƩƚĭĻƭƭ Ʒƚ ĭƚǒƓĭźƌ ŅƚƩ ƷŷĻ źƓǝĻƭƷźŭğƷźƚƓ ğƓķ ƩĻƭƚƌǒƷźƚƓ ƚŅ /ƚķĻ ƚŅ /ƚƓķǒĭƷ ĭƚƒƦƌğźƓƷƭ ğŭğźƓƭƷ ĭƚǒƓĭźƌ ƒĻƒĬĻƩƭ͵ wĻƭƦĻĭƷŅǒƌƌǤ {ǒĬƒźƷƷĻķͲ ΛwĻĭĻźǝĻķ ǝźğ ĻƒğźƌΜ DğƩǤ {ǒƌƌźǝğƓ /ƚǒƓĭźƌƌƚƩ ğƷ \[ğƩŭĻ /źƷǤ ƚŅ {ğźƓƷ WƚŷƓ Sample Protocol for Complaint Under Common Council Code of Conduct 1. Complaint is received in Open Session at the next regular open meeting of Common Council 2. The Mayor (or Deputy Mayor if the Mayor is the subject of the complaint) appoints a three-member committee of council who will be responsible for the investigation and recommendation. a. The committee will be made up of members of council from a different category than the subject of the complaint. (ie. If the subject was at-large then the committee would all be ward councilors, if the subject was a ward councilor then the committee would not include the other councilor of that ward) b. The subject of the complaint would remove him/herself from that portion of the meeting. 3. The committee would report back no later than 4 weeks from the initial council meeting with either findings & recommendations or an explanation of the process to date and at each subsequent regular meeting of council would do the same. 4. When the report is received by council: a. The subject of withdraw from the meeting. b. The council then debates the recommendation (but not the findings) of the report. c. Council has the final say as to the disposition of the report, its options include: i. Accept the findings and recommendation ii. Accept the findings and support a different recommendation iii. Reject the findings and appoint a new subcommittee to investigate and bring a new report ƭ Ļ ǝ ź Ʒ ğ ź Ʒ ź Ɠ L 2019 Ǥ Ʒ ź ƌ ź Ĭ ğ Ɠ ź Common Council December 2, ğ Ʒ ƭ ǒ { criteria Improvement Number of sustainability initiatives have little to no impact on service delivery or other evaluation Presented collectively as part of Standing Council Item 12.1 on Continuous Some items may be completed others may still need analysis {ǒƭƷğźƓğĬźƌźƷǤ ğƓķ /ƚƓƷźƓǒƚǒƭ LƒƦƩƚǝĻƒĻƓƷ Enhancement of regular preventative maintenance programUtilizing skilled resources for routine maintenanceAlignment with fleet replacement intervals to mitigate escalating maintenance Collaboration and ongoing improvement identification Cost Reduction $50,000 wĻķǒĭĻ tƚƌźĭĻ CƌĻĻƷ ağźƓƷĻƓğƓĭĻ /ƚƭƷƭ wĻķǒĭƷźƚƓ ƚŅ ƩĻƦğźƩ ğƓķ ƭƷğƓķğƩķ ƒğźƓƷĻƓğƓĭĻ Facilities Management Division Rigorous evaluation of janitorial servicesEnergy activities such as the use of LED lightingCollaboration and ongoing improvement identification Cost Reduction $75,000 wĻķǒĭĻ tƚƌźĭĻ IĻğķƨǒğƩƷĻƩƭ hƦĻƩğƷźƓŭ /ƚƭƷƭ \[ĻǝĻƩğŭĻ ĻǣźƭƷźƓŭ ƭǒĭĭĻƭƭŅǒƌ CğĭźƌźƷǤ ağƓğŭĻƒĻƓƷ tƩƚŭƩğƒ Ʀ Ώ $15,000 - buildings and unsightly property 10 unsightly clean ups annually. - storey 1.5 - led demolition range from $6,000 City 3 demolitions and 5 - Maximize resource capacity to complete building demolitions of 1clean ups. Based on historical data this would result in approximately 2 On average cost recovery of labour and equipment costs from each and; unsightly clean ups vary in size depending on the site, average cost recovery of $2,000 each. Cost Recovery of approximately $36,000 {ƚǒƩĭźƓŭ .ǒźƌķźƓŭ 5ĻƒƚƌźƷźƚƓƭ ε ƓƭźŭŷƷƌǤ /ƌĻğƓ ağǣźƒźǩĻ ĻǣźƭƷźƓŭ ƩĻƭƚǒƩĭĻ ĭğƦğĭźƷǤ Ώ LƓ sourcing - Reduce Police Fleet MaintenanceReduce Police Headquarters Operating CostsBuilding Demolition In wĻĭƚƒƒĻƓķğƷźƚƓ It is recommended that Common Council endorses the continuous improvement initiatives presented as contributions towards addressing the entirety of the deficit in 2021 and 2022 as the projects are fully implemented. City Consolidated Update Restructuring Plan To Assure the Long-Term Financial Sustainability for the City of Saint John 20 November 2019 INTRODUCTION decades of decisions and economic considerations. Today, moving into 2020, past is catching up with us and we are no longer able to provide the services that our citizens have come to expect or provide salary increases to our workforce in line with those to which they have become accustomed. In short, we can no longer afford the status quo. Interim government funding ceases at the end of 2020 and this, combined with our ongoing financial struggles, will lead to a significant budgetary shortfall in 2021 and beyond. This shortfall could be as high as $10 million dollars per year in the first few years and could grow by approximately $1.5 - $2 million per year thereafter. Our costs historically grow at approximately 3% per year while our revenue growth traditionally averages 1% per year. Clearly, this is not sustainable. Our current financial situation demands that we act now. Not only must we address our short- term yearly budgetary deficits (required by law) but we must solve the problem for the long term. Otherwise, each and every year we will be discussing and debating further cuts to services and/or to our workforce in order to make ends meet. This too is not sustainable. One could argue that we can solve our challenges through growth. Although this is categorically true, we must be realistic. An optimistic Gross Domestic Product (GDP) growth rate in New Brunswick is forecasted by most to be around 1% per year for at least the next five years. Therefore, the City of Saint John would have to exceed provincial averages for growth in order to get close to addressing our annual cost increase of 3%. The City staff has embraced as part of their cuit is all about growth. This is true. But by being realistic on how much growth can be achieved, we immediately come to the conclusion that we not only must focus on growing our City but also on controlling costs. Growth increases our property-tax base and we receive most of our revenue (approximately 80%) through that tax base. However, our revenues could also be increased through property tax reform, empowerment of the City by the Province to revenue generate, and through regional cost sharing of services provided by Saint John to our neighbours. These fundamental reforms are critical to our long-term financial health and the corresponding long- term financial health of the region and the province. rt has three objectives: to summarize the key drivers within our current financial situation; to sustainability issues to show the overall restructuring plan; and to suggest what remains to be done. Our restructuring plan must not be solely focused on addressing our anticipated shortfall in 2021 and 2022. Clearly, we need to balance our books but such a plan does nothing for our long-term financial health. Our plan must obviously consider our looming budgetary deficits but it must also set us up for success in the out years. A balanced and comprehensive approach is warranted. Background Material This Report attempts to summarize the financial challenge and explain the plan to address it. For brevity, not every aspect is detailed within this document. There are several other products that are valuable references. All of this material is available on the City of Saint John website: 1. City of Saint John Roadmap to Smart Growth, 2017 2. City of Saint John Population Growth Framework, 2018 3. Building a Sustainable Future for Saint John, A 2018 Provincial Election White Paper, 2018 4. City of Saint John Fair Taxation Report, 2017 5. Testimony on Fair Taxation to Standing Committee, 2019 6. Municipal Property Tax Issues The City of Saint John (Kitchen & Slack), 2017 7. City of Saint John Backgrounder: The Path Forward, 2019 8. 8 Cities White Paper, Strong Cities, Strong Province, 2019 9. Sustaining Saint John A Three Part Plan, 2019 THE FINANCIAL FACTS Table 1 illustrates the sources of our budgetary revenue. Although it varies slightly year to year, two key deductions can be made. First, we are overly reliant on a singular source of revenue (property tax) and must diversify. Second, our current ability to generate our own revenue is limited and must improve. .ǒķŭĻƷ ΛLƓĭƌǒķźƓŭ \[bDΜ 20202019201820172016 Property Tax$ 127,906,924 $ 125,704,830 $ 123,443,042 $ 122,979,450 $ 120,182,422 Unconditional Grant$ 16,131,081$ 16,279,669$ 15,659,510$ 19,328,372$ 19,923,206 Financial Assistance$ 7,675,651$ 7,117,402$ 4,717,196$ -$ - Own Sources$ 14,427,459$ 12,119,600$ 12,112,787$ 12,525,989$ 11,436,556 Previous Year Surplus$ -$ 86,557$ 1,338,515$ 416,472$ - Total$ 166,141,115 $ 161,308,058 $ 157,271,050 $ 155,250,283 $ 151,542,184 Table 1 Table 2 shows our growth rates for the past 5 years. The key deduction from this slide is that we must continue our efforts to increase the growth rate. As comparators, Moncton and Fredericton had growth rates of over 4% in 2019 and two of our neighbouring towns had growth rates around 3%. We must do better. Saint John Tax Base Growth Rate (%) 4.00% 3.50% 3.00% 2.50% 1.86% 1.83% 2.00% 1.53% 1.50% 0.59% 1.00% 0.50% 0.39% 0.00% 20162017201820192020 Table 2 Table 3 is illustrative to highlight the importance of growth. It presumes our 2019 operating budget as the base and status quo budgets moving forward. Using various growth rates, the forecasted operating deficit is shown. The key deduction is that time, money and effort spent to Deficit Projection 2021-2023 Based on Growth Assumptions $25 $18.5 $20 s $16.7 n o i l l i $15 $13.0 M $11.0 t i $9.0 c i $10 f e $5.4 D d $5 e t c e j o $0 r P -1.0%0%1.0%1.5%2.0%3.0% Growth Assumptions Table 3 The reality is that the City of Saint John has underperformed in growth for the past two decades. Table 4 shows our property tax base compared to that of Fredericton and Moncton. Leading in 2000, we now trail both other major cities in New Brunswick. This is not a contest. But it does demonstrate that we have failed in the past few decades to attract the growth necessary to prosper. Table 4 As previously mentioned, growth has been increasing at approximately 1% per year. However, costs have been increasing at 3% per year. This is not sustainable and yet is the current reality. Part of this increase is attributable to inflation as reflected through increases in the Consumer Price Index (CPI). Over the past 15 years, CPI has increased by 27.5% or an average of 1.8% per year. A more significant driver for our costs has been salary increases. Table 5 below shows the wage increases of all employee groups paid by the City. The wage 57% of our total budget, wage increases have the greatest impact on our overall costs. The impact of our wage increases has been described in many ways, some of which are included within the reference documents identified at the beginning of this Report. For the purposes of this document, I would simply highlight that if wage increases had been tied to CPI for the past 15 years, the City would have avoided approximately $100 million in costs. That said, wage increases above CPI are often appropriate. Therefore, as another measure, the City would have avoided approximately $57 million in costs. Table 5 The City has a Structural Deficit A government budget deficit occurs when a government spends more than it receives in tax revenue, while a structural deficit is when a budget deficit persists for some time. Structural deficits will eventually pose a problem for any government and this is certainly the case now in Saint John. Our structural deficit exists due to the reality that our costs are increasing at a rate faster than our revenues and have been for the past several decades. , has remained fixed for the past 11 years. Since the non-residential (commercial/industrial) rate is, by law, directly tied to the residential rate, it too has remained constant. Unlike provincial or federal governments, a municipality is not permitted (by legislation) to run a deficit and therefore our books must be balanced annually. With costs outpacing revenues and with a constant tax rate, balanced budgets over the past decade have been achieved through an overall approach of austerity, decreases to the size of the workforce, and reduction of services. Metaphorically to make ends meet. Having done so for many years, the reality is that this approach will no longer work for us since the reductions required are simply too large. Table 6 below illustrates our overall challenge for long-term financial sustainability. Our structural deficit exists because revenue growth hovers around 1% and costs increase 3% annually. Therefore, a gap exists yearly to balance our budgets and the gap grows larger each and every year. Clearly, we must improve our growth which will improve our revenue. But, unless we achieve consistent growth every year of at least 3%, the structural deficit persists and the gap between costs and revenues widens. Right now, we have interim government funding that addresses the gap and allows us to balance our yearly budgets (shown in green on the graph below). This funding ceases 31 December 2020 and at that time, significant cost reductions and some (albeit limited) additional revenue streams must be implemented to close the gap (shown in red on graph below). The gap is projected to be an average of $10 million annually for 2021 and 2022. Table 6 Most importantly, cuts do NOT solve the structural deficit. At any point in time where we close the gap through cuts (and we intend to do so for 1 January 2021), the gap begins anew immediately thereafter. It is essential for long-term sustainability to solve the structural deficit through transformational reforms that permanently eliminate the variance between costs and revenue. These transformational reforms will be discussed briefly later in this document and are also discussed in the background material referenced earlier. They include: comprehensive property tax reform, binding arbitration reform, wage escalation control, empowerment of cities to generate their own revenues, removal of restrictive clauses in collective agreements, regionalization of services and regional cost sharing. Without successful transformational reforms, the City will have no choice but to continually cut services and its workforce, which will impede growth, which will further exacerbate the gap, which will lead to exponentially more drastic cuts and negative growth and which will eventually lead to the City being a shadow of its former self. Other Financial Challenges In addition to the structural deficit, The City has two other key financial considerations that affect our long-term financial health. million. Currently, the debt is at approximately $230 million. Servicing the debt imposes budget pressures of approximately $17 million annually, which equates to 11% of our total budget. Other than limiting flexibility since borrowing more is highly problematic, imagine if our annual debt payments were significantly less. If our debt load was reduced by 60%, we would currently not have a gap between costs and revenues. The other issue is the age of our infrastructure. Based on our most recent asset assessments, the City has $430 million of infrastructure that is at or beyond its useable life. Not only does this put tremendous pressure on our capital budgets, the state of our infrastructure leads to higher maintenance and operating costs which has a direct impact on our ability to balance our annual budgets THE RESTRUCTURING PLAN The scope and magnitude of our financial challenges require a comprehensive approach that includes short-term fixes and long-term initiatives that fully address the structural deficit, our debt load and our asset management. In short, we must restructure through a deliberate plan. The restructure plan that has been developed has three distinct parts. Since all parts must - work on multiple fronts concurrently. Overall, the restructure plan can be summarized as follows: - Prong 1: Efficiency and effectiveness reviews and development of strategic policy. - Prong 2: Short-term sustainable initiatives to address the entirety of the deficit anticipated in 2021 and 2022. - Prong 3: Transformational reforms implemented for 2023 and beyond. Prong 1 Reviews and Policy Development When looking at restructure, individual continuous improvement initiatives only take an organization so far. But by embracing a continuous improvement culture, organizations are driven to occasionally fundamentally re-visit how things are done and who does them. The City of Saint John will complete comprehensive reviews on the following and reap the benefits of these reviews in time for Budget 2021: - Review of all agencies, boards and commissions to find efficiencies and to improve effectiveness. - Review of our economic development framework to achieve better alignment and synergy amongst the various stakeholders. - Review of the organizational structure of City Hall to reduce its size and yet maintain its effectiveness. - Review of all infrastructure to enhance asset management. - Complete an operatiation and its delivery of services to identify viable cost savings. Details on these reviews are available from the background material referenced at the beginning of this document and in a variety of staff reports presented to Common Council. The reviews may identify policies and procedures that need to be developed and implemented. In addition, there is an entire suite of financial policies that are being developed to help impose a high level of discipline in future decision-making associated with tax-payer dollars. All will be fully developed and implemented by the end of the first quarter 2020: - Wage Escalation Policy already approved by Common Council, this policy aims to ensure that future salary increases are affordable. - Debt Management Policy already approved by Common Council, this policy aims to discipline future spending where borrowing will be required so as to control our overall debt. It also aims to lower our debt over time. - Asset Management Plan aims to firstly improve our understanding the state of our infrastructure and then to prioritize maintenance, capital repair and capital replacement. - Capital Budget Policy already approved by Common Council, this policy aims to ensure capital budget decisions are prioritized based on evidenced based information. Operating expenses and third party assets shall not be included. - Operating Budget Policy already approved by Common Council, this policy mitigates the risk of future structural deficits by forbidding the funding of operating expenses with one time revenues. - Reserve Policy already approved by Common Council, this policy supports long term funding strategies by promoting saving today to spend tomorrow rather than funds aside for unexpected future events, and therefore reducing the risk of future deficits. - Investment Policy already approved by Common Council, this policy ensures the City maximizes return on investment while minimizing risk. - Long-Term Financial Plan aims to provide a roadmap with anticipated outcomes for financial decision making. Plan will look out ten years. Prong 2 Short-Term Sustainability Initiatives With the lapse of current interim government funding at the end of 2020 and the reality that most transformational reforms will not be completed and providing tangible results before 2023, there is a need to implement short-term sustainability initiatives that will address the entirety of the deficit for 2021 and 2022. The details on the various initiatives and the overall options are the subject of ongoing analysis and discussion with Common Council. Although Common Council may choose to implement some initiatives at the beginning of 2020, we envision the bulk being implemented sometime during the year with all complete (fully implemented) before 1 January 2021. To achieve this, Common Council will need to make all decisions on the short-term initiatives no later than the end of March 2020. This will allow the staff sufficient time to implement the decisions before 1 January 2021. Put another way, all initiatives to address the budget shortfall will occur at some point during 2020. There are over 60 various ideas currently being explored. Based on Common Council decisions and guidance to this point, these ideas can be grouped under four main themes: - 50 % of the entirety of the deficit will be addressed through workforce adjustments and changes to personnel policies. - Where possible, the City will divest its infrastructure to avoid large operating deficits. - Revenue streams, within the limits of current legislation, will be enhanced; including non-resident user fees. - New and/or innovative approaches to the delivery of services will be pursued based on best practises in other communities and fundamental reviews. At this time, the forecasted deficit is $9 million for 2021 and $11 million for 2022. Since these forecasts are still subject to change, prudence demands that we plan reductions based on the average deficit over the two-year period, which is $10 million per year. Prong 3 Transformational Reforms As mentioned previously, addressing our short-term financial deficit in 2021 and 2022 does not, in and of itself, assure long-term financial sustainability for the City. The internal reviews and the financial policies previously described will help but transformational reforms are required. Without them, the vicious cycle of cuts leading to more cuts and leading to unacceptable growth will continue. The following key transformational reforms are required: 1. Comprehensive property tax reformsystem dates back to the 1960s and must be reformed. There are questions on whether industry is paying their fair share. But there are also questions on tax revenue distribution, flexibility in setting differential rates, tax exemptions, and assessment practises that must be addressed. The Cities of New Brunswick Association has joined us in our assertion that the system of the 1960s no longer works in 2020 and must change. In A Three Part , the Province has agreed to conduct a comprehensive property tax review and to have all changes in place by the end of 2022. 2. Regional cost sharing. There are over 18,000 work commuters who enter the city daily, placing wear and tear on our infrastructure and requiring some of our services. Also, over 30% of all users of our subsidized recreational facilities are non-residents and therefore pay no taxes towards the subsidizations from which they benefit. In past years, Saint John could afford to cover these costs but we are no longer able to do so and some method of regional cost sharing must be put in place. 3. Regionalisation of services. The entire region has only approximately 130,000 people yet we have at least three of everything when it comes to providing services (fire, police, EMO, waste management, road works, etc). There are efficiencies to be had through regionalisation of these services. 4. Wage escalation control. All of our workgroups have seen pay raises greater than CPI over the past 15 years. This has occurred at a time when only approximately 40% average pay raise is 1% (which is well below annual CPI). Common Council has approved a wage escalation policy. This policy will only be transformational once it is embraced by all and the City has the discipline and tools available to adhere to this vital policy. 5. Binding arbitration reform. The New Brunswick Industrial Relations Act prevents firefighters and police officers from going on strike. In exchange and to ensure that they are well compensated for their work, the Act entitles them to proceed to binding arbitration if freely negotiated collective bargaining does not provide what they judge to be acceptable contracts. The unintended consequence of the Act has been approximately 70% cumulative pay raise for police and fire over a 15 year period. During that same 15-year period, CPI has increased by only 27.5%. The eight cities of New Brunswick have all passed an identical motion proposing an amendment to the Industrial Relations Act that would still ensure that the original legislative intent is achieved. There is no desire to limit free and open bargaining nor is there a desire to remove the right to binding arbitration. The proposal does not intend to impose limits on the binding arbitrator's ability to award costs rather, it simply ensures that arbitrator decisions are completed in an efficient manner, are more accountable and transparent, and importantly tied to meaningful assessments of a municipality's fiscal health. 6. Empowerment of cities to generate own revenues. Another limitation to our success is that we, broadly speaking, can only generate increased revenues for enhanced service delivery through raising of municipal taxes. Any opportunity to generate additional revenue through areas like renewable energy generation or professional service delivery is currently not allowed meaning that city taxpayers are forced to pay more for any introduction of enhanced or updated services or find corresponding offsets elsewhere. Municipalities, particularly our eight cities of New Brunswick, are professional service organizations with the knowledge and ability to develop economic generation ideas to improve services without raising taxes. Saint John is not looking to be able to compete with the private sector, but rather explore new revenue-stream opportunities that would reduce the cycle of our citizens always having to pay more. authorities. Ideas such as this must be pursued in this Province. This list of transformational reforms is not intended to be exhaustive. There are other important smaller reforms that would help, such as the removal of limiting language in collective agreements and better alignment of provincial and federal capital expenditures within the region. But the six reforms briefly described above are necessary to complete the -term sustainability. NEXT STEPS WHAT IS LEFT TO BE DONE First and foremost, the City must put in place the necessary initiatives to address the entirety of the deficit in 2021 and 2022. Details for this are ongoing and will be deliberated by Common Council, with all decisions made by March 2020. This, in turn, will provide the necessary time for the transformational reforms to take hold. The internal reviews and completion of the financial policies are fundamental to our long-term success and must be finalised in early 2020. The City must also focus some attention on the re-assessment that it will undertake in March 2020 to determine if A Three Part Plan leading to the expected results. It must also work closely with the province for the provincial re-assessment that is also mandated to occur in March 2020 and then hold the province accountable for taking additional actions as required and as committed to in Saint John Finally and arguably most importantly, Common Council and all City staff must continue to place priority effort on the transformational reforms. These reforms, by their very definition, are the keys to our long-term financial sustainability. Moreover, when the City achieves the financial stability that it needs, the attractiveness of the city to new residents and businesses and the re-invigorated messaging surrounding our community will have dramatic positive impacts on growth. has resulted in the initiatives described in this report and in the overall restructuring plan. More difficult decisions lie ahead, as does a tremendous amount of work within this plan, but the potential for long-term financial health merits the effort required. COUNCILREPORT M&C No. 2019-327 Report Date November 26, 2019 Meeting Date December 02, 2019 Service Area Growth and Community Development Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Growth Reserve Elimination Sustainability Item OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Authors Commissioner/Dept. Head City Manager Phil Ouellette Jacqueline Hamilton John Collin RECOMMENDATION The City Manager recommends that Common Council: Endorse the proposed Growth Reserve Elimination Sustainability Item as an option to be considered in addressing the entirety of the deficit in 2021 and 2022. REPORT Background Saint John Common Council has made growth a central facet of their 2016-2020 priorities, which has resulted in a variety of enhancements in how the City enables economic growth. One of these enhancements was the establishment of a growth reserve, which was originally developed to support the transition of a variety of changes as a result of the Roadmap for Smart Growth. The intention of unforeseen economic obstacles or accelerate opportunities. This would then equip Common Council with the decision-making authority to grant the funds (via recommendations from the Growth Committee) and play a more active role in stimulating economic growth. Since that time, the Growth Reserve has been replenished annually with a $350,000 investment, and has been accessed for a variety of initiatives, including, among others: introduction of population growth function and support towards the Succeed and Stay Program; enhancements to vacant and dangerous building efforts; enhancements to improved community - 2 - enhancements program; transition into Develop Saint John; support towards the Neighborhood Plan for the Central Peninsula; and additional support towards the Heritage Development Grant. Elimination The process to eliminate the Growth Reserve would result in no longer replenishing the annual $350,000 investment into the fund for 2021 and 2022. opportunities, it is important to note that the fund has an existing balance of uncommitted funds. th As of November 20, 2019, the Growth Reserve holds a total of $278,356.24 of uncommitted funds, which are expected to roll-over into 2020. With a projected investment of $350,000 to the Growth Reserve in 2020, the Reserve will hold a total of $628,356.24 of uncommitted funds to continue to support growth- related opportunities and challenges into the future. Once the City has responded to the financial challenges due to the structural deficit, the re-institution of a growth reserve remains an important tool in the supports a long-term revenue strategy that enables reliable and quality municipal service delivery to Saint John residents. PREVIOUS RESOLUTIONS On October 7, 2019, it was resolved by Council to receive and file M&C 2019- 249: Sustainability: Addressing the Deficit 2021-2022. . STRATEGIC ALIGNMENT The savings realized by Growth Reserve Elimination Sustainability Item contributing to the overall Sustainability effort. SERVICE AND FINANCIAL OUTCOMES All sustainability initiatives have been evaluated against criteria based on 2022. In addition to Feasibility, criteria include Growth & Prosperity; Vibrant, Safe City; Valued Service Delivery; and Fiscally Responsible (see Initiative Criteria Evaluation Appendix). With respect to Growth and Prosperity, potential minor impacts could occur due to reduced support for growth programming and opportunities. - 3 - Elimination of the Growth Reserve investment would result in annual savings to the general operating budget of $350,000. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS N/A ATTACHMENTS N/A Appendix: Initiative Criteria Evalutation Relative Evaluation of Sustainability Initiatives based on Impact and Financial Target Impact 100 1 13 3 2 90 129 4 6 80 1110 Growth 7 70 Reserve Fund 58 60 t c a 50 p m I 40 30 20 10 0 012345 Financial Target Evaluation Notes on Growth Reserve Fund: Growth Reduced support to growth programming and opportunities bƚƷĻʹ 9ǝğƌǒğƷĻķ źƓźƷźğƷźǝĻƭ ƷŷğƷ Ņğƌƌ ǞźƷŷźƓ ƷŷĻ ǤĻƌƌƚǞ ğƓķ ŭƩĻĻƓ ğƩĻğƭ ƭŷƚǒƌķ ĬĻ ĭƚƓƭźķĻƩĻķ ğƭ ƚƦƷźƚƓƭ Ʒƚ ğķķƩĻƭƭ ƷŷĻ ЋЉЋЊ ğƓķ ЋЉЋЋ ķĻŅźĭźƷ͵ LƓźƷźğƷźǝĻƭ ƷŷğƷ Ņğƌƌ ĭƌƚƭĻ Ʒƚ ƷŷĻ ƩĻķ ƭŷƚǒƌķ ƚƓƌǤ ĬĻ ĭƚƓƭźķĻƩĻķ źŅ ƷŷĻƩĻ ğƩĻ Ɠƚ ƚƷŷĻƩ ƚƦƷźƚƓƭ Ʒƚ ğķķƩĻƭƭ ƷŷĻ ķĻŅźĭźƷ͵ Sustainability Initiatives Evaluated as of December 2, 2019 (Not including Continuous Improvement Items) 1. Passport to Parks 2. Lifeguards 3. Rightsizing Recreation Facilities - Rainbow Park Ice Surface 4. Rightsizing Recreation Facilities - Seaside Park Lawn Bowling 5. Playground Program 6. Fire Service Fee Recovery 7. Permit and Development Approval Fees Increases 8. Community Grants & Incentives 9. Growth Reserve Fund 10. Non-Resident Differential Parking Fees 11. Monthly Parking Increase 12. Parking Ticket Increase 13. On-Street Parking Increase COUNCILREPORT M&C No. 2019-326 Report Date November 26, 2019 Meeting Date December 02, 2019 Service Area Growth and Community Development Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Permit and Development Approvals Fee IncreasesSustainability Item OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Authors Commissioner/Dept. Head City Manager Amy Poffenroth / Evelyn Jacqueline Hamilton John Collin Hatfield RECOMMENDATION The City Manager recommends that Common Council: Endorse the proposed Permit and Development Approvals Fee Increases Sustainability Item as an option to be considered in addressing the entirety of the deficit in 2021 and 2022. EXECUTIVE SUMMARY Growth and Community Development fees initiative associated with permit and development approvals will come in two phases; phase one, the focus of this report, will include adjustments to current fees and phase two will focus on new fees. The approach for fee adjustment considered three key factors: 1. Consumer price index since the fees were last adjusted; 2. Cost of delivering the service; and 3. Simplified fee structure and addressing fee irregularities for ease of application, fairness, and improved process. Given the legislated timeline for by-law amendments, it would take approximately three months to implement fee adjustments from the initial Council decision. - 2 - This fee adjustment initiative is estimated to generate an additional $80,000 in revenue. Phase two (new fees), which will be considered in 2020, will generate additional revenue. PREVIOUS RESOLUTIONS On October 7, 2019, it was resolved by Council to receive and file M&C 2019- 249: Sustainability: Addressing the Deficit 2021-2022. REPORT Growth and Community Development fees associated with permit and development approvals are under review initiative. This initiative will come in two phases; phase one will focus on adjustments to current fees and phase two will focus on new fees. This report focuses on phase one of the initiative adjustment to current fees. A preliminary list of proposed fee adjustments is provided in the attached schedule sustainability item is approved by Common Council to be implemented as a sustainability initiative, the fees will be further refined and finalized before being presented to Council for final approval. Preliminary fee adjustments are based on average volumes and values of projects over the past four years. The approach for fee adjustment considered three key factors (not all factors were applied to all fees): 1. Consumer price index since the fees were last adjusted; 2. Cost of delivering the service; and 3. Simplified fee structure and addressing fee irregularities for ease of application, fairness, and improved process. Consumer Price Index Adjustments This initiative, if approved, will be the first time all development permits and approvals are adjusted at the same time. There is great variation in the length of time that fees have been adjusted. Fees for some typical development permits and approvals, such as building permits and rezoning applications were last adjusted in 2012; variances were last adjusted in 2016; street excavation permits in 2010. Others have not been adjusted for quite some time, such as pit and quarry permits and flood risk area development permits which were last adjusted 13 and 20 years ago, respectively. A consumer price index (CPI) of 1.5% per year was used for any fees adjusted for CPI. In most cases the full CPI was applied (with some allowance for rounding) and in other cases, a rate less than CPI was used, particularly in cases where - 3 - costing above our comparators was a concern (i.e. variable portion of a building permit fee, rezoning/municipal plan amendment applications). Given costs are increasing annually; Council may want to consider implementing a multi-year schedule of fee adjustments to keep up with CPI. If Council wishes to consider this, the fee schedule would be modified to include annual CPI increases for a certain period of time (i.e. Cost of service delivery Some fees were adjusted to move closer to the cost of delivering the service, such as basic development permits; these were adjusted to include a minimal cost for conducting a site inspection, which is not being covered with the current fee structure. In many cases, cost recovery is not being achieved; for instance, Planning application fees do not reflect cost of service delivery and are subsidized in large part by the City in an effort for the City to remain competitive. Simplified Fee Structure/ Fee irregularities A number of fee structures were simplified to address irregularities and enhance fairness, ease of application and processes. Planning variances, for instance, were reduced from three tiers of fees to two, depending on whether a variance is to be considered by the Planning Advisory Committee or by the Development Officer only. Street occupancy permit fees were modified to address an irregularity and fairness issue by including a variable rate depending on how long the street would be occupied. For instance, a permit for a dumpster on the sidewalk for one week is currently the same fee ŅƚƩ ğ ķǒƒƦƭƷĻƩ ƚƓ ƷŷĻ ƭźķĻǞğƌƉ ŅƚƩ ŅƚǒƩ ƒƚƓƷŷƭ͵ ŷĻ ƭźķĻǞğƌƉ ĭğŅĽ ŅĻĻ ƭƷƩǒĭƷǒƩĻ has also been simplified for ease of application (for clients and staff), enhanced fairness and process to level the playing field for business owners. Comparators Staff has undertaken a preliminary fee review of the most common permit and development approvals from Rothesay, Quispamsis, Fredericton, Moncton, Dieppe and Halifax, shown on the between municipalities and at times can be difficult to compare. Before proceeding with this sustainability initiative, further refinement and analyses needs to be completed for ease of comparison between the municipalities. With the preliminary information it appears that more with Moncton and Dieppe than some of our closer neighbours, particularly in the area of planning applications. In terms of building permit fees, Saint John is the highest and will continue to be higher than the other municipalities; s One Stop Development Shop provides a high level of customer service and support. The One Stop Development Shop is the only one of its kind in New Brunswick, offering an integrated and coordinated customer - 4 - service experience with all development service areas (planning / building / infrastructure / heritage) in one shop, featuring a modernized suite of development by-laws that streamlines approvals and removes barriers for investment. Implementation Permit and development fees reside in a number of development by-laws, i.e. Building By-law, Zoning By-law, Subdivision By-law and policy documents Λ{źķĻǞğƌƉ /ğŅĽ tƚƌźĭǤΜ͵ .Ǥ-law amendments and Council approval will be required to adopt the new fees; in some cases, public hearings at the Planning Advisory Committee (PAC) and Common Council are required. If Council chose to move forward with the suite of fee adjustments, Growth and Community Development Services would coordinate the various processes to have the fee adjustments considered at the same PAC and Council meetings, where possible. Given the legislated timeline for by-law amendments, it would take approximately three months to implement fee adjustments from the initial Council decision. STRATEGIC ALIGNMENT The potential revenue realized by Permit and Development Approvals Fee Increases Sustainability Item Responsible by contributing to the overall Sustainability effort. SERVICE AND FINANCIAL OUTCOMES All sustainability initiatives have been evaluated against criteria based on 2022. In addition to Feasibility, criteria include Growth & Prosperity; Vibrant, Safe City; Valued Service Delivery; and Fiscally Responsible (see Initiative Criteria Evaluation Appendix). With respect to Growth and Prosperity, the impact of increasing permit and development approval fees is mainly one of perception of not encouraging growth and development in Saint John. While we are aligned with some other building permit fees. In terms of what the increases mean to actual projects, a few examples are provided. The average new home in Saint John is valued at $190,000; the current building permit fee is $1,725, versus the proposed new fee of $1,811 an increase of $86. A $4 Million commercial building, requiring a rezoning application currently costs $36,610 for a building permit and rezoning application, versus $38,370 for both approvals an increase of $1,760. These increases would not likely impact the decision to proceed with the projects. - 5 - This initiative does not require any investment and is 100% feasible, as it is based solely on a decision of Mayor and Council and can be implemented in approximately three months. The only exception is with respect to plumbing fee increases, which requires the approval of the Minister of Public Safety and the Lieutenant-Governor in Council in addition to Mayor and Council. Approval at the provincial level for plumbing fees will take additional time. This fee increase initiative is estimated to generate an additional $80,000 in revenue. Phase two, which will be considered in 2020, will generate additional revenue. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS The Finance Team has reviewed projected revenue. ATTACHMENTS Preliminary Proposed Fees Permits and Development Approvals Comparators Preliminary Information Appendix: Initiative Criteria Evalutation Relative Evaluation of Sustainability Initiatives based on Impact and Financial Target Impact 100 1 13 3 2 90 129 4 6 80 1110 7 70 Permit and 58 Development 60 t c Approval a 50 p Fees Increases m I 40 30 20 10 0 012345 Financial Target Evaluation Notes on Permit and Development Approval Fees Increase: Growth Feasibility Minor impact; by-law amendment/fee adjustments Note: Evaluated initiatives that fall within the yellow and green areas should be considered as options to address the 2021 and 2022 deficit. Initiatives that fall close to the red should only be considered if there are no other options to address the deficit. Sustainability Initiatives Evaluated as of December 2, 2019 (Not including Continuous Improvement Items) 1. Passport to Parks 2. Lifeguards 3. Rightsizing Recreation Facilities - Rainbow Park Ice Surface 4. Rightsizing Recreation Facilities - Seaside Park Lawn Bowling 5. Playground Program 6. Fire Service Fee Recovery 7. Permit and Development Approval Fees Increases 8. Community Grants & Incentives 9. Growth Reserve Fund 10. Non-Resident Differential Parking Fees 11. Monthly Parking Increase 12. Parking Ticket Increase 13. On-Street Parking Increase Last Increased 3 years3 years3 years3 years 7 years7 years7 years7 years9 years9 yearsunder reviewunder reviewunder review>25 years18 years18 years18 years>15 yrs6 years7 years7 years3 years3 years3 years3 years>10 years>20years13years3 years>10years>10years9years9years3 years>10yrs>10yrs N/AN/AN/A DepositDepositDepositDeposit $20 per week plus $60 per lot plus $120 per lot plus $50 per hour plus $22 per fixture plus $50 - $4 per m2 plus $50 for 6+ variancesplus $50 for 6+ variances plus $100 for 6+ variancesplus $100 for 6+ variances $14/m3 compensatory storage plus $8.90 /$1,000 of the estimate Proposed Additional Fee plus $2 per square foot + depositplus $4 per square foot + deposit DepositDepositDepositDeposit plus $50 per lot plus $100 per lot plus $50 per hour plus $20 per fixture plus $50 - $4 per m2 plus $10 per additionalplus $20 per additional plus $60 per additionalplus $10 per additionalplus $20 per additional plus $60 per additional plus $5.00 per table/ wk plus $7.50 per table/ wk plus $10.00 per table/ wk Additional Fee $10.75/m3 compensatory storage plus $8.50 /$1,000 of the estimate $70$60 N/AN/AN/A $120$230$340$275$275$220$110$260$150$100$100$120$150$200$400$350$250$350$200$120$350$165$350$300$600$200$400$120$120 $3,700$2,650$1,500 $120 per hour Proposed Base Fee $50$50$50 $65 N/A $100$300$300$200$300$110$300$150$300$250$500$100$300$100$100 $110$210$310$250$250$200$100$250$100$100$100 $3,500$2,500 $1,100 $100 per hour Base Fee $50 plus $100 deposit$50 plus $200 deposit$50 plus $500 deposit SCHEDULE "A" - PRELIMINARY PROPOSED FEES - PERMIT AND DEVELOPMENT APPROVALS Category / Application Type Building Related Permits, Fees & Deposits Building PermitsDemolition Permit - garage/shedDemolition Permit - all otherPlumbing Permit Streets & Sidewalk Related Permits & Fees Driveway Culvert ApplicationExcavation of Streets PermitExcavation Investigation Fee (Streets)Excavation Permit Renewal Fee (Streets)Pavement Degradation Fee plus age of existing asphalt 1yr-15yrs (graduated) Peddlers & Hawkers LicenseSidewalk Cafe Permit Level oneSidewalk Cafe Permit Level twoSidewalk Cafe Permit Level threeStreet Occupancy PermitWater & Sewerage Permit Land Related Permits & Fees Rezoning with Municipal Plan AmendmentRezoning, Amendment to Section 59 conditionsZoning By-law Tier 1 VarianceZoning By-law Tier 2 VarianceZoning By-law Tier 3 Variance (PAC)Change/Re-establishment of Non-Conforming Use - PACChange/Re-establishment of Non-Conforming Use - CouncilConditional, temporary, similar compatible Uses, ServicingDevelopment Permits (use change, signs, pools)Flood Risk Area Development PermitPit and Quarry PermitSimilar or Compatible UseEncroachment in Good FaithSubdivision - LPP ReleaseInstrument - subdivisionType 1 Subdivision Type 2 SubdivisionSubdivision By-law Tier 1 VarianceSubdivision By-law Tier 2 VarianceSubdivision By-law Tier 3 Variance (PAC)Tentative Approval Revalidation -subdivision Administrative Forms, Letters & Copies ResearchesZoning Confirmation / Planning Letters/ Discharge e grad below 5.5' e grad than below greater 0 grade ft 5.5' t at f $50/fixture ft $25/fixture .25/ft.10/sq .10/sq $5.50/$100 .30/sq fixtures fixtures 5 5 $25/fixture pools than & deposit) than additions$50/fixture $25/fixture garages or lessmore decks $500 and less infrastructure otherrenovations or infrastructure decks repairs, units $600 (includeswith & without 4 construction residentialresidential NewAttachedRenosResidentialNonNon$500 res comm $35$75 8.008.007.50" s ft" range ft .91/sq. sq. based on .19 is from BP2020Residential fee300$1000feefeefeefee John 250300250150100350300$400500600800250550500$2000 3500370018001800175035003500 JohnSaint SaintCurrentProposedRothesayQuispamsisFrederictonMoncton**DieppeHalifax value8.508.907.25based Officer100200no Major)31034050100$8/$1,0007.5 projectJan1/20 of street/extension) NEW>6variance2050noNEW>6variance60100nocharge5060nocharge100120no and // (minor)21023050025$8/$1,00035$50.00 street/extension) lotlot new effective Var.Var. (Med perper (no(new 1122 Fee11012020Cost add.add. fixture2022with other become Variable/$1,000AllperPlusPAC300400250300300450/650450PlusTypeTypeTypeType COMPARATORS shown Permit25027510700 Permit100150100N/A250 Amendment "B" fees PermitGarage/shed Plan permitFlat6570Included505065Res Application2500265015001500150027502500 Sewer PermitBase & Excavation Type Moncton's SCHEDULE FeeBuildingDemolitionPlumbingStreetWaterRezoningMunicipalVarianceStaff/DevelopmentSubdivision** COUNCILREPORT M&C No. 2019-328 Report DateNovember 27, 2019 Meeting Date December 02, 2019 Service Area Corporate Services His Worship Mayor Don DarlingandMembers of Common Council SUBJECT: Grants and Incentives ΑSustainability Item OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary AuthorsCommissioner/Dept. HeadCity Manager Stephanie Rackley-RoachNeil Jacobsen John Collin RECOMMENDATION The City Manager recommends that Common Council: Endorse the proposed Grants andIncentives ΑSustainability Item as an option to be considered in addressing the entirety of the deficit in 2021 and 2022. EXECUTIVE SUMMARY The City of Saint John allocates funding for grants and incentives for a variety of purposes. These include incentives to generate investment in the urban core, heritage development and beautification, community and neighbourhood organizations, community arts projects, community events, and event sponsorships among others. The total envelope of funding proposed in the draft 2020 General Fund Operating Budget is $760,971. Reducing grant and incentive related funding is proposed as an option to address the entirety of the deficit in 2021 and 2022. This sustainability option proposes suspension of the urban development incentives and heritage grants for two years and the elimination of all other specified grants with the exception of the Neighbourhood Development Stimulation Grants and Community Grants. The Community Grants envelope would be increased as part of this sustainability initiative for Council to consider funding for some grants that would be eliminated. The total savings proposed for 2021 and 2022 is $398,971 in each year. As transformational budgetary reforms are realized, restoration of funding can be considered. However, funding envelopes and the process for awarding grants must be considered under a grants and incentives policy (to be developed). The - 2 - policy must layout the requirement for key performance indicators that will demonstrate growth in terms of revenue and social return on investment. PREVIOUS RESOLUTIONS On October 7, 2019, it was resolved by Council to receive and file M&C 2019- 249: ͷSustainability: Addressing the Deficit 2021-2022͸. REPORT The total envelope for grants and incentives proposed in the draft 2020 General Fund Operating Budget is $760,971. The following table provides a breakdown of the /źƷǤ͸ƭ various grants and incentives proposed for 2020. Grant or Incentive DescriptionAllocation Urban Development Increase private sector investment in residential $220,000 Incentives development in the urban core area of the City to generate a return on investment in terms of tax base growth (both large scale development and beautification). Heritage Grants Encourage property owners to meet the spirit and $80,000 intent of the Saint John Heritage Conservation Areas By-Law. Community Grants Funding that supports healthy, active, and inclusive $179,721 communities through the delivery of social, cultural and recreational activities. Three categories include: organizational support; community projects; and special events. Neighbourhood Funding support to priority neighbourhoods to $152,000 Development inspire a high level of engagement and Stimulation Grants participation in these neighbourhoods. Community Arts Project support for non-profit organizations or $50,000 Funding Program groups wishing to offer quality arts activities in any discipline of the creative arts within the City of Saint John. Community Events Support for events the community can enjoy or $16,500 participate in such as fireworks (Canada Day, New Years celebrations) and Remembrance Day. Sponsorship Support for one-time events as a result of a Council $17,750 resolution. Current funding is allocated for the Acadian Games, with past funding allocated for the ECMAs. Other Grants Support for parks such as Mispec and the $45,000 Horticultural Association. Urban Development Incentives and Heritage Grants The Urban Development Incentive and Urban Beautification programs have stimulated reinvestment in the Central Peninsula (Uptown, South End, and Waterloo Village) since their implementation in 2016 as a pilot project. The Urban - 3 - Development Incentive program focuseson development of upperfloors, vacant buildings, and vacant lots, while increasing tax base assessments, and increasing residential density in otherwise underused spaces. A program evaluation of the pilot project (2016-2018) was presented to the Growth Committee on March 21, 2019. As part of that program, 71 new residential units were projected to be created. AwardedDevelopment Incentive Grants constituted $654,865 for 11 projects, resulting inan estimated $7.3 million in private investment in the Central Peninsula. The program also resulted in spin-off benefits, which although harder to quantify, should also be highlighted. These included new business, cost reduction to the City by reducing the number of vacant buildings monitored, and catalyzing interest and investment in the Central Peninsula. The Urban Beautification Program provided residents an incentive for the purpose of improving the appearance of the front facing facades of their properties and increasing the attractiveness of streetscapes. Awarded Beautification Grants constituted $95,781 for 41 projects resulting in an estimated $551,636 in private investment in the Central Peninsula. The Heritage Grant Program has run on an annual basis for over 25 years. The program primarily incentivizes designated heritage property owners throughout Saint John to maintain or to make improvements to their properties using appropriate materials and techniques. In 2018, the Heritage Program exceeded its initial annual budget of $80,000 in conditional approvals by July. Additional funds were allocated from the Growth Reserve Fund to meet the demand of program applications. In 2018, there were 38 applications made for 42 grants, with 34 completed grants paid out (80% completion rate). At the end of the program year, a total of $101,750 was granted, leveraging $381,000 of work. A high level analysis has been undertaken to determine the revenue generated in ƷĻƩƒƭ ƚŅ ƦƩƚƦĻƩƷǤ Ʒğǣ ŅƩƚƒ ƷŷĻ /źƷǤ͸ƭ źƓǝĻƭƷƒĻƓƷ͵ DźǝĻƓ ƷŷĻ ƭŷƚƩƷ ƷźƒĻŅƩğƒĻ ŅƚƩ evaluation on these development grants (some commencing 2016), revenue generation appears to be limited. The most potential for revenue comes from the Urban Development Incentives Program with a demonstrated return on investment in terms of current revenue being generated (i.e., the new tax revenue compared to the grant funding awarded). Development incentive and heritage funding is available in municipalities across Canada. Many of the incentive programs focus on the development of vacant properties or revitalize areas of their cities. Often combined with arts and cultural initiatives, sample ĭźƷźĻƭ ƭǒĭŷ ğƭ {Ʒ͵ WƚŷƓ͸ƭͲ Halifax, Fredericton, Moncton, Kitchener-Waterloo, Kelowna, and Vancouver offer some type of grant program. The amount of funding available varies among municipalities. - 4 - CƚƩ {ğźƓƷ WƚŷƓͲ ƷŷĻƭĻ ƦƩƚŭƩğƒƭ ƭǒƦƦƚƩƷ ƷŷĻ /źƷǤ͸ƭ ƚǝĻƩğƌƌ ƭƷƩğƷĻŭǤ ƷƚǞğƩķƭ ǒƩĬğƓ re-development, through initiatives seeking to offer positive and negative reinforcement for developers and homeowners. This is especially pertinent in Saint John, as the City faces a pronounced obstacle in redevelopment due to years of property neglect and the impact of sprawl on ƷŷĻ /źƷǤ͸ƭ ǒƩĬğƓ ĭƚƩĻ neighbourhoods. Recent statistics are indicating that the City is beginning to experience renewed demand in its urban core neighbourhoods, which could ƭǒŭŭĻƭƷ ƷŷğƷ ƷŷĻ /źƷǤ͸ƭ ƦğƭƷ ĻŅŅƚƩƷƭ Ʒƚ ƚŅŅĻƩ ƦƚƭźƷźǝĻ ğƓķ ƓĻŭğƷźǝĻ ƩĻźƓŅƚƩĭĻƒĻƓƷ for developers and homeowners, among other strategies, are yielding outcomes the City was hoping to achieve. Community Grants The Community Grants Program was adopted by Common Council in late 2014 to financially support the operational needs of community organizations, projects and/or special events. A Community Grants Evaluation Committee was created and is now comprised of two community members, two members of Council, and three City staff. The evaluation process considers community need and social impact of the ƚƩŭğƓźǩğƷźƚƓ͸ƭ ƭĻƩǝźĭĻͲ ƦƩƚƆĻĭƷ, or event; its history in serving the community; its alignment with Council and City priorities; and its organizational strengths and financial responsibility. The 2019 Community Grant envelope was approved at $179,721. The same amount is allocated in the draft 2020 General Fund Operating Budget. Below is a list of the 2019 recipients of Community Grant funding. Organization / InitiativeFunding Awarded 360 Stand$4,000 ARCf de Saint-Jean $2,000 Bee Me Kidz $6,000 Brilliant Labs$15,000 Cherry Brook Zoo$15,000 Denis Morris Community Centre$6,000 Fog Lit Festival$1,500 Fundy Gymnastics$2,000 Fundy Fringe Festival $5,000 Human Development Council $15,000 Junior Achievement$300 KBM Outing Association $6,000 Lancaster Kiwanis Club $1,500 Latimore Lake Community Centre $6,000 Lorneville Community Centre $6,000 Marathon by the Sea$8,000 Martinon Community Centre $6,000 Milford Community Centre $6,000 NB Competitive Festival ofMusic $2,000 NBYO Α Sistema $5,000 New Dawn Community $1,000 PRUDE Inc $15,000 Read SJ $2,000 Seaside Lawn Bowling Club$1,500 Seniors Resource Centre $8,000 - 5 - Shining Horizons Therapeutic Riding Assoc $15,000 SJ Multicultural NRC $15,000 SymphonyNew Brunswick$2,000 ŷĻ ͸ƭ aĻƓ $250 Saint John Cycling Club/Trail Miners$1,671 Total Funding Awarded $179,721 Neighbourhood DevelopmentStimulation Grants The Neighbourhood Development Stimulation Grant Program has been a contributor to the sustainability of priority neighbourhood organizations in Saint John since 2008. The grant program has supported staffing, leadership capacity building, and program incentives in the community resulting in a high level of neighbourhood engagement and participation. Priority neighbourhoods are becoming more empowered in their respective communities and have strengthened inter-neighbourhood relationships and bonds through community networking. The budget envelopehas remained at $152,000since 2008. Organizations recommended to receive a grant have demonstrated perseverance and the ability Ʒƚ ƌĻǝĻƩğŭĻ ğķķźƷźƚƓğƌ ŅǒƓķźƓŭ ğƓķ ͷźƓ-ƉźƓķ͸ ƭǒƦƦƚƩƷ ŅƩƚƒ ƌƚĭğƌ ĬǒƭźƓĻƭƭĻƭͲ community supporters, and other levels of government. Below is a list of the 2019 recipients of Neighbourhood Development Stimulation Grants. Organization Funding Awarded Crescent Valley Resource Centre $23,500 ONE Change Inc. (Old North End) $23,500 P.U.L.S.E. (People United in the Lower South End) $21,000 Waterloo Village Association $22,000 Teen Resource Centre $20,000 Around the Block $22,000 (community newspaper for priority neighbourhoods) West Side Neighbourhood Group $20,000 (replacing Westside PACT Αnew group not yet identified)(not funded in 2019) Total Funding Awarded $152,000 Community Arts Funding Program In 2006, Common Council agreed to provide the Saint John Community Arts Board with funds to establish the Community Arts Funding Program. This program was created to provide small grants to arts and culture organizations or groups, for festivals and projects, to a maximum of $3,000. In the past 13 years, a total of $602,050 in grants has been awarded to over 300 arts projects, cultural events, and festivals. In 2019, $51,400 was presented to 22 Saint John organizations embarking on 24 projects, including literary festivals, art classes for adults with intellectual disabilities, intergenerational theatre and music programs for children and seniors, classical music outreach to schools, cultural dance programs, an international theatre festival, a contemporary dance festival, and a peace mural. - 6 - Organization Project2019 Funding \[͸!ƩĭŷĻ {ğźƓƷ WƚŷƓ Creative Connections $2,500 Early Music StudioClassical Music Outreach to Schools $3,000 Symphony New BrunswickMusic For All$3,000 Saint John Tool Library Advanced Woodworking Workshops $1,500 Saint John Theatre CompanyLoyalist City Shakespeare $2,700 Saint John Theatre CompanyFundy Fringe Festival$2,500 ARCfCoup de Coeur $2,500 Saint John Jewish Historical Museum Sharing Culture, History, and Literature $1,800 Third Space GalleryThird Shift Festival $2,700 Chinese Cultural Association Chinese Dance program$2,000 Campus Radio Saint John IncBest of Saint John Music Awards$2,000 Le Theatre duTremoloFort LaTour Theatre$2,500 Community Autism Centre Connecting Through Creativity $2,000 NB Film Co-opDocumentary Sensory Friendly Arts $2,000 Connection Dance Works Saint John Contemporary Dance Festival $2,500 Connection Dance Works Subject is Too Dark Residency $2,000 Jasmine Performing ArtsChinese Ethnic Heritage Production$1,000 Ampersand Collaborations Perluete Hope Restored Symposium $1,000 InterAction Theatre Company Inc Intergenerational Workshops and Play $2,500 Fog Lit Festival IncLiterary Festival $2,700 YMCA of Greater Saint John Youth Newcomer Mural Project $1,000 Discover Saint John/IATA Saint JohnInternational Theatre Festival $3,000 La Bibliothļque Le CormoranFrancophone Literary Festival $2,000 Saint John Newcomers Centre Multicultural Day Festival $1,000 Total $51,400 STRATEGIC ALIGNMENT The savings realized by reducing the grants and incentives General Fund Operating Budget envelope ƭǒƦƦƚƩƷƭ /ƚǒƓĭźƌ͸ƭ tƩźƚƩźƷǤ Ʒƚ ĬĻ CźƭĭğƌƌǤ wĻƭƦƚƓƭźĬƌĻ ĬǤ contributing to the overall Sustainability effort. SERVICE AND FINANCIAL OUTCOMES !ƌƌ ƭǒƭƷğźƓğĬźƌźƷǤ źƓźƷźğƷźǝĻƭ ŷğǝĻ ĬĻĻƓ ĻǝğƌǒğƷĻķ ğŭğźƓƭƷ ĭƩźƷĻƩźğ ĬğƭĻķ ƚƓ /ƚǒƓĭźƌ͸ƭ Priorities and ability to implement to address the deficit of 2021 and 2022. In addition to Feasibility, criteria include Growth & Prosperity; Vibrant, Safe City; Valued Service Delivery; and Fiscally Responsible (see Initiative Criteria Evaluation Appendix). Urban Development Incentives and Heritage Grants Savings This sustainability initiative proposes that all of the funding currently allocated to urban development and beautification incentives as well as heritage grants be suspended for 2021 and 2022. This would result in a total savingsof $300,000in each year. - 7 - A reduction in these incentives and grants may impact the amount of investment occurring in the uptown core andheritage areas. However, investment may continue based on the momentum of growth occurring in these areas today. Consideration must be given to whether the investment would have occurred without the availability of municipal funding to offset development costs. Based on the data available, there is also no clear evidence that property assessments are increasing due to incentives and grants for development. In some cases, properties that received beautification or heritage grants decreased in property value since receiving funding and completing work. Data indicatesthe revenue being generated from these programs is less than the /źƷǤ͸ƭ źƓǝĻƭƷƒĻƓƷ Λź͵Ļ͵Ͳ Ʒğǣ ĬğƭĻ ŭƩƚǞƷŷ ƩĻǝĻƓǒĻ ǝĻƩƭǒƭ ƷŷĻ amount of grants awarded) in the short term. A longer time interval will be needed to determine if there is a good correlation between grant funding and increases in tax revenue. The suspension of the program will provide the time for analysis. The results should then be used to determine what future investment the City should make in these types of development incentive programs. Neighbourhood Development Stimulation and Community Grants Grants related to community and neighbourhood development are vital to improving civic pride and leveraging other funds to support grass-root organizations. A significant decrease or elimination of funding related to these grants could result in the folding of one or more organizations that are providing important services within their respective neighbourhoods. During the years of 2021 and 2022, it is proposed that funding for Neighbourhood Development Stimulation and Community Grants be maintained. In order to allow Council some room to consider grants for other projects or organizations where funding is proposed to be eliminated, it is recommended that additional funds be allocated in the Community Grants envelope. The proposed grant envelopes for 2021 and 2022 maintains $152,000 for Neighbourhood Development Stimulation Grants and funding up to $210,000 for Community Grants. Community Arts Program and Other Grant Funding As part of this sustainability option, it is proposed that specified funding for the Community Arts Program be eliminated. Also targeted for elimination is grant funding for one one-time events (e.g., future games), firework celebrations, Remembrance Day, Mispec Park, and the Horticultural Association. This would result in a reduction of $129,740 from the General Fund Operating Budget. While it is proposed that these grants are eliminated from the operating budget, there will be an opportunity to consider these type of community activities through the increase in the community grants funding envelope. This would require an expanded view of what types of grants would be considered under this program. - 8 - The amount of grant funding that is targeted for elimination would have a minor źƒƦğĭƷ ƚƓ /ƚǒƓĭźƌ͸ƭ ƦƩźƚƩźƷźĻƭ of Vibrant, Safe City. The result would be limited funding from the City for some community organization support or events. These organizations would still have the opportunity to obtain private sponsorships from business and corporate partners in and around Saint John. Elimination of the funding to the Horticultural Association would have an impact on the Public Gardensand potentially the campground at Rockwood Park. The Horticultural Association was created in 1893with a legislated mandate forͻƷŷĻ establishment and maintenance of public gardens and the encouraging of the cultivation of flowers and trees in the Cityͼ. The City would need to work with the Horticultural Association to define the level of service in these parks. This item is 100% feasible, as it is based solely on a decision of Mayor and Council and can be implemented to address the deficit within the timeframe. Elimination of funding for Grants and Incentives would result in savings in 2021 and 2022 in the General Fund Operating Budget in the amount of $398,971 in each year. As transformational budgetary reforms are realized, restoration of funding could be considered. However, funding envelopes and the process for awarding grants must be considered under a grants and incentives policy (to be developed). The policy must layout the requirement for key performance indicators that will demonstrate growth in terms of revenue and social return on investment. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS Growth and Community Development Services was consulted on the development incentives, heritage grants,and arts funding. Transportation & Environment Services, specificallythe Parks and Recreation team, was consulted on community and neighbourhood development funding. Legal and Parks team members were consulted for input on funding obligations to the Horticultural Association. The Finance Team was consulted on budget allocations. ATTACHMENTS N/A Appendix: Initiative Criteria Evalutation Relative Evaluation of Sustainability Initiatives based on Impact and Financial Target 100 1 13 3 2 90 129 4 6 80 1110 7 70 Grants & 8 5 60 Incentives 50 Impact 40 30 20 10 0 012345 Financial Target Evaluation Notes on Grants and Incentives: Growth & Prosperity Α Minor impact with the ability to attract investment in the urban core and heritage areas (full impact not known) Vibrant, Safe City Α Minor impact with the ability of some organizations to hold events Note: Evaluated initiatives that fall within the yellow and green areas should be considered as options to address the 2021 and 2022 deficit. Initiatives that fall close to the red should only be considered if there are no other options to address the deficit. Sustainability Initiatives Evaluated as of December 2, 2019 (Not including Continuous Improvement Items) 1. Passport to Parks 2. Lifeguards 3. Rightsizing Recreation Facilities - Rainbow Park Ice Surface 4. Rightsizing Recreation Facilities - Seaside Park Lawn Bowling 5. Playground Program 6. Fire Service Fee Recovery 7. Permit and Development Approval Fees Increases 8. Grants & Incentives 9. Growth Reserve Fund 10. Non-Resident Differential Parking Fees 11. Monthly Parking Increase 12. Parking Ticket Increases 13. On-Street Parking Increase COUNCILREPORT M&C No. 2019-325 Report Date November 27, 2019 Meeting Date December 02, 2019 Service Area Transportation and Environment Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Parking Revenue Sustainability Item OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Authors Commissioner/Dept. Head City Manager Marc Dionne/ Jill Good Marc Dionne John Collin RECOMMENDATION The City Manager recommends that Common Council: 1. Endorse the proposed On-Street Parking Meter Rate and Parking Ticket Increase - Sustainability Item as an option to be considered in addressing the entirety of the deficit in 2021 and 2022. 2. Support the proposed Monthly Parking Increase and Non-Resident Differential Parking Fees Sustainability Item as an option to be considered in addressing the entirety of the deficit in 2021 and 2022 and refer to the Parking Commission for further analysis and deliberation. EXECUTIVE SUMMARY A number of parking revenue options are proposed to be considered as sustainability options to address the entirety of the deficit in 2021 and 2022. Common Council has the authority to set the rate for on-street metered parking and ticket violations through a decision of Council and by-law amendments. Additional parking revenue could be realized by increasing on-street metered parking by 12%. This would involve looking at parking across the city and implementing a range of rates based on location. Revenue from increasing on- street metered parking rates is estimated to yield an additional $118,000. An increase in parking tickets by $10 could result in an estimated $123,000 in additional revenue. Both these proposed increases align with rates in Fredericton, Moncton, and Halifax. - 2 - The Parking Commission has the authority to increase rates for monthly parking. All revenue related to monthly parking is received by the Parking Commission with the exception of Market Square Parking Garage. The Saint John Parking Commission evaluates monthly parking rates annually. In working with the Parking Commission, an increase of 10% is already being considered across all monthly parking spaces for 2020 and would represent an estimated additional $116,000 in revenue annually. The Parking Commission also has the authority to implement differential parking fees, provided Council adopts the distinction between residents and non- residents. As part of the analysis on the 2,100 monthly parking spaces managed by the Parking Commission, approximately 40% of those spaces are occupied by non-residents. It is proposed to double the monthly parking rate in all parking lots managed by the Saint John Parking Commission for non-residents after the 10% increase has been applied. This could result in approximately $620,000 in additional revenue to the Parking Commission (exception Market Square Parking Garage) provided the same occupancy rate is maintained. With respect to monthly parking increases and non-resident differential parking fees, it is proposed that the Parking Commission explore these opportunities for revenue further. This would include determining a mechanism by which revenue would flow to the City from the Parking Commission. PREVIOUS RESOLUTIONS On October 7, 2019, it was resolved by Council to receive and file M&C 2019- 249: Sustainability: Addressing the Deficit 2021-2022. REPORT On- Street Parking Increase The City of Saint John currently has 146 coin-operated meters, 36 Pay & Display machines, and 21 Pay by Plate kiosks, which are located in the South Central Peninsula. There are approximately 690 on-street metered parking spaces. Common Council has the authority to set the rates for on-street metered parking through by-law amendments. On-street parking rates are currently charged daily from 8:00 am to 6:00 pm, Monday to Friday at a rate of $2.00/hour at all metered spots. Currently on-street parking is free on weekends, holidays, after 6:00 pm Monday to Friday, and is located only in the South Central Peninsula. The Saint John Parking Commission collects approximately $1 Million in net revenue annually from on-street metered parking, not including fines. The on-street metered parking rate has not been increased since 2012. It is proposed that the rate increase by 25 cents to $2.25/hour. If this increase was applied to all on-street metered parking spaces equally, it is projected to result in approximately $118,000 in additional net revenue to the City, representing a - 3 - 12.5% increase for all meters. The proposed increase is less than CPI during the same time period of 12.71%. This additional revenue would be achieved by varying the parking meter rate based on location rather than a flat increase across all metered spots. This approach facilitates turnover of parking in high-demand areas while encouraging people anticipating longer stays to utilize off-street parking. The proposed implementation will also consider a review of the days of the week and/or hours in which there is currently no charge but demand exists for on-street parking. Parking meter rates, time limits, and hours of operation vary across comparable cities of Moncton and Halifax. For example, the on-street parking meter rate is $1.00-$2.50/hour in Moncton and $1.50-$3.00/hour in Halifax depending upon the location. Parking Ticket Increase Common Council has the authority to set the amount for parking ticket violations through the approval of by-law amendments. The Saint John Parking Commission issues approximately 20,000 parking tickets annually for Parking Meter and Traffic By-law violations. In 2019, the Saint John Parking Commission is projected to generate approximately $600,000 in revenue from paid parking ticket violations. The City of Fredericton recently increased their parking ticket violations, in addition to other parking related fees in April 2019. This increase was recommended in The City of Fredericton: Master Plan prepared by Stantec. that Saint John violations remain lower on average than other comparable cities, with the exception of Traffic By-law tickets in Halifax. Below are the current Parking Meter and Traffic By-law Violations. Meter Violations City Date Issued Increased Ticket Amount Summoned Amount Saint John $20 $25 (after 15 days) $50 Fredericton $25 $50 (after 20 days) $75 Moncton $30 $45 (after 20 days) $70 Halifax $25 No Increase $61.60 Traffic By-Law City Date Issued Increased Ticket Amount Summoned Amount Saint John $30 $40 (after 15 days) $65 Fredericton $50 $75 (after 20 days) $100 Moncton $45 No Increase $75 Halifax $25 No Increase $61.60 (after 60 days) It is important that parking ticket violations increase to avoid the potential for parkers to abuse the system for those exceeding the allotted time. For example, there are currently parking meters that have a 10 hour time limit at $2.00/hour. - 4 - A violation for an expired parking meter is only $20. Increasing the penalty may incentivize individuals to adhere to parking time limits and rates. The last increase to parking violations took place in 2012. It is proposed that all Parking Meter and Traffic By-law violations increase by $10. Resulting in approximately $123,000 in additional revenue. Paid within 15 Paid between 16 ViolationPaid after 30 days daysand 30 days CurrentProposed CurrentProposed CurrentProposed Expired Meter/Pay & Display$20$30$25$45$50$60 Overtime Parking/ Time Restricted Zones$30$40$40$55$65$75 No Parking Zone$30$40$40$55$65$75 Alternate Side Parking$30$40$40$55$65$75 Snow Ban Parking$30$40$40$55$65$75 Official Parking (Authorized Vehicles Only)$30$40$40$55$65$75 Parking in Excess of 4 hours ( applies to spaces not contraolled by parking device or $30$40$40$55$65$75 sign) No Overnight Parking at Meters$30$40$40$55$65$75 Commercial Loading Zone$50$60$75$75$100$110 Handicap Space$75$125$75$125$100$125 Monthly Parking Increase In March 2019, the Saint John Parking Commission was tasked with identifying additional sources of revenue and/or cost savings to assist in addressing the City One opportunity for additional revenue brought forward at that time was to increase the overall monthly parking rate by 10%. The Parking Commission has the authority to increase rates for monthly parking without any endorsement of C evaluate monthly parking rates annually. All revenue related to monthly parking is received by the Parking Commission. The only revenue that the City receives at this point in time is for the parking lot at Market Square. There are currently over 2,100 monthly parking spaces in 27 lots under the management of the Saint John Parking Commission of which 22 are under lease agreements (property is not owned by the City of Saint John). In order to implement the 10% rate increase, the Parking Commission must obtain agreement from property owners based on the terms in their respective agreements. A 10% increase to all monthly parking spaces would represent an additional $116,000 to the Commission annually. This projection accounts for an 80% occupancy rate. It does not include any hourly/daily parking revenue from these lots. - 5 - The current monthly parking rates in Saint John range from $50 to $127/month. The City of Fredericton monthly rates range from $60 to $110/month. Fredericton is recommending rate increases in both 2020 and 2021 where rates will eventually range between $100 to $130/month. Monthly parking rates in Moncton range from $125 to $160/month. Non-Resident Differential Parking Fees The Local Governance Act (Act) allows for the implementation of differential parking rates based on residency. As per Section 12 of the Act, except as otherwise provided, a by-law under this Act may be general or specific in its application and may differentiate in any way and on any basis a local government considers appropriate. Therefore, if the City considers it appropriate to differentiate between residents and non-residents, the Act provides authority to make such a distinction in the application of its by-laws. The Parking Commission has the authority to implement differential parking fees, provided Council adopts the distinction between residents and non- residents. All revenue related to differential parking would be received by the Parking Commission, with the exception of Market Square Parking Garage which would be received by the City. As part of the analysis on the 2,100 monthly parking spaces managed by the Parking Commission, approximately 40% of those spaces are occupied by non- residents. It is proposed to double the monthly parking rate in all parking lots managed by the Saint John Parking Commission for non-residents after the 10% increase has been applied. Similar to the increase to monthly parking rates, the Parking Commission must obtain agreement with all property owners for those lots the Commission manages on behalf of others. The proposed non-resident differential parking fee is based on doubling the monthly parking rate. This would include the proposed 10% increase in monthly parking. If implemented, it is projected that an additional $620,000 in revenue could be achieved, provided the same parking lot occupancy rate is maintained. A review of other municipalities across Canada did not yield any comparable data on non-residential differential parking fees. This means there are no guidelines or best practices to benchmark against. Approach to Implementation Given that Common Council can make a decision with respect to an increase to both on-street metered parking and parking ticket violations, the following activities would be undertaken collaboratively between the Parking Commission and City staff to implement these initiatives. Engaging key stakeholders on proposed on-street metered parking changes (e.g., Uptown Saint John) Developing on-street meter parking zones and corresponding rates - 6 - Contacting existing vendors to order software and hardware, where necessary Preparing the necessary by-law amendments for both on-street parking meter and parking ticket violation increases Updating all print materials, website, and internal systems for both on- street parking meter and parking ticket violation increases Delivering a communications program to educate parking customers and stakeholders on changes for both on-street parking meter and parking ticket violation increases Given that the Parking Commission makes the decision with respect to monthly parking rates and non-residential differential parking fees, the following activities would be undertaken by the Parking Commission with support of City staff to implement these initiatives. Obtaining support from the Saint John Parking/Transit Commission Board for implementation of these sustainability initiatives Attaining agreement with property owners for lots the Parking Commission manages to increase monthly parking rates and apply non- resident differential parking fees Finalizing non-resident differential parking fees (considering potential impact) and developing an administrative process for applying these fees and collecting revenue to existing and new non-resident monthly parkers Determining the mechanism to allocate revenue from the Parking Commission to the City (in addition to the Market Square Parking Garage) Time is required for further analysis and the completion of implementation steps required for all parking revenue sustainability initiatives. It is estimated on- street metered parking and parking ticket violation increases could in effect September 2020. The monthly parking rate and non-resident differential parking fee could be implemented by the end of 2020 with projected revenue incorporate into the 2021 operating budget. STRATEGIC ALIGNMENT The revenue realized through the Parking Revenue Sustainability Item supports contributing to the overall Sustainability effort. SERVICE AND FINANCIAL OUTCOMES All sustainability initiatives have been evaluated against criteria based on 2022. In addition to Feasibility, criteria include Growth & Prosperity; Vibrant, Safe City; Valued Service Delivery; and Fiscally Responsible (see Initiative Criteria Evaluation Appendix). - 7 - impact. This is based upon feedback received in the past from the Uptown retail business community, which suggested that parking rate increases could deter shopping in the Uptown. With respect to Valued Service Delivery, there is a risk that with a non-resident differential parking fee, illegal and unregulated parking lots could be created. This would require increased enforcement by City staff in Growth & Community Development Services. There will be minimal investment required to implement any of these parking revenue initiatives (meter equipment and signage). There will also be costs related to any communications carried out to advise the public of the change. All costs will be covered through the annual operating budget. From a feasibility perspective, Common Council can approve rates for on-street metered parking and parking tickets violations. The Saint John Parking/Transit Commission Board would be required to make the decision on monthly rate increases and non-resident differential parking fees. This would include their endorsement of how any additional revenue from monthly parking would be allocated to the City. Projected increases for parking is expected to result in the following revenue: On-Street Monthly Parking Rate Increase $118,000 Parking Ticket Violation Increase $123,000 Monthly Parking Rate Increase $116,000 Non-Resident Differential Parking Fee $620,000 INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS City staff have work extensively with Parking Commission staff on developing these sustainability initiatives. Legal staff have provided input on authority for decision making and possible solutions to apply rate increases. The Finance team has reviewed projected revenue. ATTACHMENTS N/A Appendix: Initiative Criteria Evalutation Relative Evaluation of Sustainability Initiatives based on Impact and Financial Target Impact 100 1 On-Street Parking Increase13 3 90 2 129 Parking Ticket Increase 4 6 11 80 10 Non-Resident 7 Monthly Parking Differential 70 Increase Parking Fees 58 60 t c 50 a p m 40 I 30 20 10 0 012345 Financial Target Evaluation Notes on #10 Non-Resident Differential Parking Fees: There are no impacts to Growth & Prosperity. Impacts on the feasibility of this sustainability item relate to the fact that the Saint John Parking/Transit Commission Board would be required to make the decision. Evaluation Notes on #11 Monthly Parking Increase: There are no impacts to Growth & Prosperity. Impacts on the feasibility of this sustainability item relate to the fact that the Saint John Parking/Transit Commission Board would be required to make the decision. Evaluation Notes on #12 Parking Ticket Increase: There are no impacts to Growth & Prosperity. Evaluation Notes on #13 On-Street Parking Increase: Impacts on Growth & Prosperity could be minor if there are impacts to businesses. Note: Evaluated initiatives that fall within the yellow and green areas should be considered as options to address the 2021 and 2022 deficit. Initiatives that fall close to the red should only be considered if there are no other options to address the deficit. Sustainability Initiatives Evaluated as of December 2, 2019 (Not including Continuous Improvement Items) 1. Passport to Parks 2. Lifeguards 3. Rightsizing Recreation Facilities - Rainbow Park Ice Surface 4. Rightsizing Recreation Facilities - Seaside Park Lawn Bowling 5. Playground Program 6. Fire Service Fee Recovery 7. Permit and Development Approval Fees Increases - 9 - 8. Grants & Incentives 9. Growth Reserve Fund 10. Non-Resident Differential Parking Fees 11. Monthly Parking Increase 12. Parking Ticket Increases 13. On-Street Parking Increase /hb/L\[ w9thw 2019-323 M&C No. November 26, 2019 Report Date December 02, 2019 Meeting Date Corporate Services Service Area His Worship Mayor Don Darling and Members of Common Council SUBJECT: Workforce Adjustments Addressing the Deficit 2021 and 2022 OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Author Commissioner/Dept. Head City Manager Neil Jacobsen John Collin John Collin Kevin Fudge Stephanie Hossack RECOMMENDATION Common Council direct the City Manager to address 50% of the entirety of the deficit in 2021 and 2022 through workforce adjustments and personnel policy changes; and that the City Manager be authorized to draw up to $2 million from the restructuring reserve funds to facilitate and/or encourage early departures to achieve any necessary workforce reductions. EXECUTIVE SUMMARY The purpose of this agenda item is to direct the City Manager to deficit in 2021 and 2022 through workforce adjustments and personnel policy changes in 2020 so as to realize the entire cost avoidance in time for the 2021 budget. - 2 - PREVIOUS RESOLUTIONS ƷŷͲ /ƚƒƒźƷƷĻĻ ƚŅ ƷŷĻ ŷƚƌĻ bƚǝĻƒĬĻƩ Ѝ ЋЉЊВ Moved by Councillor Sullivan, seconded by Councillor Norton: w9{h\[95 ƷŷğƷ ƷŷĻ /źƷǤ ağƓğŭĻƩ ĬĻ ķźƩĻĭƷĻķ Ʒƚ ğķķƩĻƭƭ ЎЉі ƚŅ ƷŷĻ ķĻŅźĭźƷ źƓ ЋЉЋЊ ğƓķ ЋЉЋЋ ƷŷƩƚǒŭŷ ǞƚƩƉŅƚƩĭĻ ğķƆǒƭƷƒĻƓƷƭ ğƓķ ƦƚƌźĭǤ ĭŷğƓŭĻƭͳ ğƓķ ƷŷğƷ ƷŷĻ /źƷǤ ağƓğŭĻƩ ĬĻ ğǒƷŷƚƩźǩĻķ Ʒƚ ĭƚƓƭźķĻƩ υЊΏЌ ƒźƌƌźƚƓ źƓ ƩĻƭƷƩǒĭƷǒƩźƓŭ ŅǒƓķƭ Ʒƚ ŅğĭźƌźƷğƷĻ ƦƚƷĻƓƷźğƌ ĬǒǤƚǒƷƭ ğƓķ ĭƚƩƩĻƭƦƚƓķźƓŭ ǞƚƩƉŅƚƩĭĻ ƩĻķǒĭƷźƚƓƭ͵ MOTION CARRIED. BACKGROUND The Sustaining Saint John A Three Part Plan and previous Reports to Council. A full progress report with respect to Sustaining Saint John A Three Part Plan was provided in open session of Council on November 18th. Based on the most recent property tax assessment data released by the Province of New Brunswick and on further refinement of additional budget considerations, the updated forecast deficit is $9 million for 2021 and $11 million for 2022. Therefore, for planning purposes, staff are now using the average of both years ($10 million annually) as the overall target for deficit reduction. This forecast is clearly subject to change based on a wide variety of factors, and will further evolve over the coming months. On 7 October 2019, the City Manager briefed Common Council on 60+ ideas that could be considered to address the entirety of the deficit for 2021 and 2022. The main ideas directly related to workforce were: (1) a freeze to the total salary and benefit budget envelope for a two-year period and (2) a 50% reduction to the size of the casual workforces in Parks and Recreation and in Public Works. These two initiatives would yield approximately $2.5 million in total cost avoidance in 2021 and $5 million in cost avoidance in 2022. Put another way, these initiatives would yield approximately 37% of the cost avoidance required to address the cumulative anticipated deficit of $20 million in 2021 and 2022. At Committee of the Whole (COTW), the preliminary ideas mentioned above were discussed and it was the will of Committee that a larger portion of the entirety of the deficit be addressed through workforce adjustments and changes to personnel policies. it was the view of Committee that reductions should represent a proportional - 3 - value of the required budget reductions. Under this guiding principle, COTW passed a resolution providing direction to the City Manager to address 50% of the entirety of the deficit through reductions The resolution intentionally did not specify how these costs were to be avoided. Rather, it was the desire of COTW to provide the City Manager with the flexibility to find 50% of the entirety of the deficit through workforce initiatives deemed most appropriate. Since workforce reductions are all but inevitable in order to achieve 50% mandate, the City must take full advantage of natural attrition as a preferred option. Recognizing that this may not yield the reductions required, or it may not be viable to accept reductions through natural attrition in certain areas, COTW also supported the use of restructuring funds, within available amounts, for severance payments and possible voluntary departure incentives. The original approved motion in COTW stated a range of $1-$3 million from the restructuring reserve for this purpose. The range was provided since more work was required to determine what amount would be available. Now knowing that the restructure reserve will have over $2 million available, the proposed resolution for Council has been amended accordingly. ŷĻ /źƷǤ ağƓğŭĻƩ ğķǝźƭĻķ /ƚƒƒźƷƷĻĻ ƷŷğƷ ĭƚƒƒƚƓƌǤ ƩĻŅĻƩƩĻķ Ʒƚ ğƭ ğ ǝƚƌǒƓƷğƩǤ ƭĻƦğƩğƷźƚƓ ƦƩƚŭƩğƒͲ Ǟźƌƌ hb\[ ĬĻ ĭƚƓƭźķĻƩĻķ ŅƚƩ ƦƚƭźƷźƚƓƭ ƷŷğƷ ĭğƓ ĬĻ ƦĻƩƒğƓĻƓƷƌǤ ĻƌźƒźƓğƷĻķ ŅƩƚƒ ƷŷĻ ĻƭƷğĬƌźƭŷƒĻƓƷ ΛƚƩ ğƓ ĻƨǒźǝğƌĻƓƷ ƚŅŅƭĻƷΜ ğƓķ ƦƩƚǝźķĻ ƷŷĻ /źƷǤ ğ ƩĻƷǒƩƓ ƚƓ źƷƭ źƓǝĻƭƷƒĻƓƷ͵ ŷĻƩĻŅƚƩĻͲ ķĻƦğƩƷǒƩĻ źƓĭĻƓƷźǝĻƭ Ǟźƌƌ ƚƓƌǤ ğƦƦƌǤ Ʒƚ ğ ƌźƒźƷĻķ ŅĻǞ ğƓķ Ǟźƌƌ ĬĻ ƭƚƌĻƌǤ ğƷ ƷŷĻ ķźƭĭƩĻƷźƚƓ ƚŅ ƷŷĻ /źƷǤ ağƓğŭĻƩ ĬğƭĻķ ƚƓ ğ ķĻƷĻƩƒźƓğƷźƚƓ ƚŅ ǞŷĻƷŷĻƩ ƷŷĻ ƦƚƭźƷźƚƓ ĭğƓ ĬĻ ĻŅŅĻĭƷźǝĻƌǤ ĻƌźƒźƓğƷĻķ ŅƩƚƒ ƷŷĻ ĭǒƩƩĻƓƷ ƚƩŭğƓźǩğƷźƚƓğƌ ƭƷƩǒĭƷǒƩĻ͵ Assuming that the COTW resolution is approved in open session of Council, the City Manager and the Senior Leadership Team will work with the Unions to identify and explore possible solutions to the challenge that lies ahead. There will also be a follow-on update to Common Council with respect to any future impacts to Management and Professional Staff. The Police and Parking/Transit Commissions will also have a pivotal role to play with their workforces in addressing the deficit challenge that lies ahead. STRATEGIC ALIGNMENT The actions and outcomes resulting from this resolutionare fully aligned w , as well as Service Principles of {ǒƭƷğźƓğĬźƌźƷǤ. - 4 - SERVICE AND FINANCIAL OUTCOMES The actions and outcomes resulting from this resolution are critical to the long-term sustainability and financial viability of the City of Saint John. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS Implementation of this resolution is being led by the the Commissioner of Finance and Director of Human Resources, with support from Senior Executive Team. each of the workforce groups. ATTACHMENTS None. /hb/L\[w9thw M&C No. 2019-322 Report Date November 22, 2019 Meeting Date December 02, 2019 Service Area Growth and Community Development Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Demolition of vacant, dilapidated and dangerous buildings at 63 Jack Street (PID 00049007) OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Author Commissioner/Dept. Head City Manager Rachel Van Wart J Hamilton /A Poffenroth John Collin RECOMMENDATION RESOLVED, that the buildings located at 63 Jack Street, PID# 00049007, are to be demolished as they have become a hazard to the safety of the public by reason of dilapidation; and BE IT FURTHER RESOLVED, that the buildings are to be demolished as they have become a hazard to the safety of the public by reason of unsoundness of structural strength; and BE IT FURTHER RESOLVED, that one or more by-law enforcement officers appointed and designated under the Saint John Unsightly Premises and Dangerous Buildings and Structures By-law are hereby authorized to arrange for the demolition, in accordance with the applicable City purchasing policies. EXECUTIVE SUMMARY The purpose of this report is to advise Council that a Notice to Comply was issued under Part 13 of the Local Governance Act for the building at 63 Jack Street. The hazardous conditions outlined in the Notice have not been remedied by the owners within the required time frame and staff is looking for authorization from Council to arrange the demolition of the buildings. - 2 - PREVIOUS RESOLUTION N/A REPORT The inspections of the property at 63 Jack Street, PID# 00049007 have revealed that there are two buildings on the premise; a single-storey, single family dwelling and a wood framed garage. The building is currently assessed at $63,600. Staff first became aware of the pr - unit residential zone at the end of Jack Street. The House is a hazard to the safety of the public by reason of being open. The Buildings are a hazard to the safety of the public by reason of being vacant, by reason of dilapidation and by reason of unsoundness of structural strength. For the reasons described in the attached Inspection Report, a Notice to Comply was issued on September 30, 2019 and was posted to the building on October 4, 2019, as per section 132(3) of the Local Governance Act that outlines acceptable methods of service. The Certificate Regarding Title lists an individual (deceased) and company (dissolved) as the owners. The building is abandoned. The Notice provided the owners with 45 days to remedy the conditions at the property. The owners did not file a formal appeal and did not take remedial action to comply with the requirements of the Notice. A compliance inspection was conducted on November 19, 2019 which revealed that the conditions which gave rise to the Notice have not changed since the Notice was issued. Attis the Notice to Comply that was issued and the affidavit attesting to service. Also included are photographs of the building. The Local Governance Act indicates that where a Notice to Comply has been issued arising from a condition where a building has become a hazard to the safety of the public by reason of dilapidation or unsoundness of structural strength, the municipality may cause the building to be demolished. As required in the Act a report from an engineer is attached, forming part of the issued Notice to Comply, and provides the evidence to the buildings vacancy, dilapidation, unsoundness of structural strength and resulting hazard to the safety of the public. A copy of the letter advising of the Common Council Hearing date and affidavit is attached; it was posted to the building on November 1, 2019 and sent to the owner via registered mail on October 31, 2019. STRATEGIC ALIGNMENT Enforcement of the Saint John Unsightly Premises and Dangerous Buildings and Structures By-law - 3 - SERVICE AND FINANCIAL OUTCOMES As is written in the Local Governance Act that a municipality must commence in the proceedings of remedial action, approval of Common Council is required prior to starting demolition activities at the property. Total cost of the demolition work is approximated at $10,000 and will take about 4-5 weeks before it is complete. The demolition will be completed by City staff and equipment and the cost of the work will be billed to the property owner. If the bill is left unpaid, it will be submitted to the Province with a request for reimbursement. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS provided ownership verification by obtaining the Certificate Regarding Title for the property registered the Notice to Comply ATTACHMENTS Notice to Comply Affidavit of Posting - Notice to Comply Affidavit of Posting - Notice of Common Council Hearing Letter Photos Њ tŷƚƷƚ ϔ ЉЉЉЍВЉЉА tL5 ЏЌ WğĭƉ {ƷƩĻĻƷͲ {ğźƓƷ WƚŷƓͲ bĻǞ .ƩǒƓƭǞźĭƉ Ћ tŷƚƷƚ ϔ ЉЉЉЍВЉЉА tL5 ЏЌ WğĭƉ {ƷƩĻĻƷͲ {ğźƓƷ WƚŷƓͲ bĻǞ .ƩǒƓƭǞźĭƉ Ќ tŷƚƷƚ ϔ ЉЉЉЍВЉЉА tL5 ЏЌ WğĭƉ {ƷƩĻĻƷͲ {ğźƓƷ WƚŷƓͲ bĻǞ .ƩǒƓƭǞźĭƉ Ѝ tŷƚƷƚ ϔ ЉЉЉЍВЉЉА tL5 ЏЌ WğĭƉ {ƷƩĻĻƷͲ {ğźƓƷ WƚŷƓͲ bĻǞ .ƩǒƓƭǞźĭƉ Ў tŷƚƷƚ ϔ ЉЉЉЍВЉЉА tL5 ЏЌ WğĭƉ {ƷƩĻĻƷͲ {ğźƓƷ WƚŷƓͲ bĻǞ .ƩǒƓƭǞźĭƉ Џ tŷƚƷƚ ϔ ЉЉЉЍВЉЉА tL5 ЏЌ WğĭƉ {ƷƩĻĻƷͲ {ğźƓƷ WƚŷƓͲ bĻǞ .ƩǒƓƭǞźĭƉ А tŷƚƷƚ ϔ ЉЉЉЍВЉЉА tL5 ЏЌ WğĭƉ {ƷƩĻĻƷͲ {ğźƓƷ WƚŷƓͲ bĻǞ .ƩǒƓƭǞźĭƉ /haahb /hb/L\[w9thw M&C No. 2019-318 Report Date November 27, 2019 Meeting Date December 02, 2019 Service Area Saint John Water His Worship Mayor Don Darling and Members of Common Council SUBJECT: 2020 Utility Fund Operating Budget OPEN OR CLOSED SESSION This matter is to be discussed in open session of Common Council. AUTHORIZATION Primary Author Commissioner/Dept. City Manager Recommended by Head Craig Lavigne Brent McGovern John Collin Finance Committee Councillor Merrithew Finance Chair RECOMMENDATION The Finance Committee recommends that Common Council approve the 2020 Utility Fund Operating Budget and proceed with first and second reading of the amendment to the Water and Sewerage By-Law, By-Law No. M-16. The following resolutions are in order provided Council is supportive of the recommended attached budget. It is recommended that Common Council: 1. w9{h\[9 that the estimated revenue for the Water and Sewerage Utility for the year 2020 in the amount of υЍБͲАЉЋͲЉЉЉ be adopted (Appendix A 2. w9{h\[9 that the estimate of expenses for the Water and Sewerage Utility for the year 2020 in the amount of υЍБͲАЉЋͲЉЉЉ be approved 3. Give first and second reading to the two Amendments to the ğƷĻƩ ε {ĻǞĻƩğŭĻ .ǤΏ\[ğǞ ğƷƷğĭŷĻķ Ʒƚ aε/ bƚ͵ ЋЉЊВΏЌЊБ (Appen ). - 2 - EXECUTIVE SUMMARY The 2020 Utility Fund Operating Budget is based upon the new rate structures for both potable and industrial users. A complete rate review of the Utility (as presented to Council November 18, 2019) was undertaken by the consulting firm, Hemson, and was based on how the Utility now provides different services to potable and industrial users due to the separation of potable and raw water between the different classes of users. There have been considerable pressures on the ratepayers and the Utility over the last 10-15 years due to transformational projects (Harbour Clean-up and Safe Clean Drinking Water). Flat rates have consistently risen by $72 per year over a number of years and last year the rate increase was reduced to $60 as a result of numerous expenditure reductions that were implemented and revenue increases that were realized due to by-law changes. The Utility is proposing to keep the flat rate for water and sewer customers at $1,428 per year for customers in 2020, which represents no increase from 2019 rates. Increases for customers will vary depending on whether they are water only or sewer only customers. Rates for water only have gone up significantly due to the investments in the Safe, Clean Drinking Water Project, while sewer costs have gone down significantly as a percentage of water cost. Sewerage costs will now be 80.35% of the water cost, compared to 122% of water cost in the past. Industrial rates have been set based on the use of raw water, cost of providing the service and the management and replacement of industrial water assets. PREVIOUS RESOLUTION At the November 20, 2019 meeting of Finance Committee it is was recommended that the Finance Committee approve the 2020 Utility Fund Operating Budget and nd submit to Common Council for the December 2 meeting for approval along with first and second reading to the amendment to the Water and Sewerage By-Law, By-Law No. M-16. At November 18, 2019 meeting of Council it was RESOLVED: That referring to the submitted report M&C 2019-290: Water & Sewer Rate Study, Common Council: 1. Endorse the attached Water & Sewer Rate Study for 2020; 2. Support removing the third consumption tier from the rate structure given no water consumption has been billed to Tier 3 since 2008; and 3. Direct staff to communicate the results of the of the rate changes to water only and sewer only customers given they will see a change in their 2020 billing. - 3 - And that referring to the submitted report M&C 2019-289: East and West Industrial Raw Water Rate Reports, Common Council: 1. Endorse the East Saint John Industrial Raw Water Rate Report and the West Saint John Industrial Raw Water Rate Report; and 2. Support the approach of setting all industrial raw water users rates via by-law. STRATEGIC ALIGNMENT priorities in taking a strategic approach to financial management of the Utility by continuing to contribute capital funding from operating, finding other revenue sources, improving the allocation of costs among ratepayers and continuing to find efficiencies and savings through continuous improvement initiatives. REPORT The proposed 2020 Utility Fund Operating Budget has been prepared using the Hemson Consulting Ltd. as a foundation. The potable water numbers have changed slightly since the presentation on November 18, 2019 as the budget is now finalized and the industrial numbers have also changed slightly given the approach to the collection of the rate stabilization fund reserve monies has changed from a volumetric based collection to a fixed rate collection. The bottom line revenue collection however remains the same as presented on November 18, 2019 and the revenue from the industrial and potable water customers remains the same. The appropriate costs per user group are established so that the corresponding revenue can be collected. wĻǝĻƓǒĻ Overall revenue for 2020 has been budgeted at $48,702,000 (2019- $48,286,000). The flat rate being proposed remains at $1,428 per year therefore no increase for ratepayers. The allocation of sewer charges as a percentage has changed significantly as a result of the rate study. Sewer charges will now be 80.35% of a water charge versus 122% in the past. Flat rate customers (166) that are water only will see and significant increase, where flat rate sewer only customers (146) will see a significant decrease. The main reason for the shift is related to the additional cost of providing safe, clean drinking water. Customers on a meter will see a negligible adjustment in their bill if consumption is the same amount in 2020 versus 2019. Meter water only customers (106) will see a large increase in there water bills as the cost of water has risen, where sewer only customers will see a significant reduction (3). Industrial revenue is budgeted at $5,548,000 which will cover the cost of providing raw water, contributions to asset replacement, rate stabilization reserve and - 4 - previous debt associated with the system prior to the switch over to a raw water only system. The balance of revenue includes the fire protection levy, storm sewer levy, interest revenue, other revenue and prior year surplus which is much less than previous years. 9ǣƦĻƓķźƷǒƩĻƭ Overall expenditures for 2020 have been budgeted at $48,702,000 (2019- $48,286,000). Based on the recent rate study and to ensure proper allocation of expenses, all debt, internal charges, capital from operating, post-employment benefits and other charges will be allocated across the three cost centres which are; Potable Water, Industrial Water and Wastewater Treatment in accordance with the cost of service. Saint John Water has continued to reduce staffing levels through 2019 (decreased by 6 FTEs) as the Safe, Clean Drinking Water Project has ramped down and is approaching final completion. Saint John Water has several budget initiatives that are planned to be undertaken in 2020. Improvements to safety and security are planned by making workplace improvements at various underground vaults and chambers and improving fencing, security and access at various water and wastewater facilities. There is key replacement of electronic equipment at 30 water and 32 wastewater facilities as well as replacement of eight key communications links to and from various water and wastewater facilities. As well, the replacement of 133 communication radios will be completed. All of this work is necessary for the Utility to monitor activity at its water and wastewater facilities while also ensuring service reliability and efficient use of equipment. Cleaning, inspection and maintenance on two water storage reservoirs, along with repainting 800 out of the 2,100 fire hydrants in inventory will be achieved in 2020. Other initiatives include; key watermain transmission interconnection for further drinking water system reliability, inspection of dams and protecting the environment through the addition of containment at a facility. Under wastewater there is planned dredging of cell one and two at the Lancaster Lagoon for improved operational efficiencies, concrete maintenance and upgrades at the Easter Wastewater Treatment Facility and the continuation of the newly established video inspection and flushing program. These are just some of the expenditures the Utility is planning to undertake in 2020 to increase water and wastewater system reliability, efficiency, and /ƚƓĭƌǒƭźƚƓ The rate freeze for 2020 is a positive note for ratepayers after several years of increases. The rate studies for potable and industrial rate payers have now been - 5 - presented and this will lay the foundation for long-term planning of the Utility that will undertaken in 2020. The Utility will continue to focus on continuous improvement, finding efficiencies, and process to improvements in 2020, as well as debt management, leveraging of funds from other levels of Government and pay as you go for all capital expenditures. This focus will continue to guide some of the financial decisions as the Utility deals with a very large infrastructure deficit and ongoing pressures of rate increases and expenditure increases over the next several years. SERVICE AND FINANCIAL OUTCOMES See enclosed 2020 Utility Fund Operating Budget INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS Input has been received from the various Service Areas, Senior Leadership Team and members of the Finance Committee. ATTACHMENTS Appendix A - 2020 Utility Fund Capital Budget Appendix B Amendment to Water and Sewerage By-Law related to Schedules to the By-Law Appendix C Amendment to Water and Sewerage By-law related to industrial rates Presentation Appendix B O BY-LAW NUMBER M-16 ARRÊTÉ N M-16 A BY-LAW TO AMEND A BY-LAW ARRÊTÉ MODIFIANT ARRÊTÉ RESPECTING WATER AND SEWERAGE CONCERNANT LE RÉ ÉGOUTS Be it enacted by the Common Council of Le conseil communal de The City of the City of Saint John as follows: Saint John décrète ce qui suit : A by-law of the City of Saint John entitled City of -Saint John intitulé « Arrêté concernant les réseaux th enacted on the 7 day of June, A.D. 2004, is hereby amended as follows: comme suit:: 1 1 Les annexes «A» et «B» sont abrogées et following are substituted: sont remplacées par celles qui figurent aux présentes. ANNEXE «A» ster Effective January 1, 2020 En vigueur le 1 janvier 2020 Flat rate customers Tarif forfaitaire pour les clients Flat rate customers Yearly $791.80 Tarif forfaitaire pour Tarif 791.80$ Water charge les clients annuel ANNEXE «B» ster Effective January 1, 2020 En vigueur le 1 janvier 2020 METERED CUSTOMERS WATER SERVICE CHARGE CLIENTS AVEC COMPTEUR Meter Size Yearly ($) Monthly ($) Bi-Monthly($) Dimension du Tarif Tarif Tari compteur annuel ($) mensuel ($) bimensuel($) 15mm 267.54 22.30 44.59 15mm 267.54 22.30 44.59 20mm 327.48 27.29 54.58 20mm 327.48 27.29 54.58 25mm 447.22 37.27 74.54 25mm 447.22 37.27 74.54 40mm 588.04 49.00 98.01 40mm 588.04 49.00 98.01 50mm 1,173.10 97.76 195.52 50mm 1,173.10 97.76 195.52 75mm 2,437.74 203.15 406.29 75mm 2,437.74 203.15 406.29 100mm 4,239.36 353.28 706.56 100mm 4,239.36 353.28 706.56 150mm 6,662.56 555.21 1,110.43 150mm 6,662.56 555.21 1,110.43 200mm 9,573.48 797.79 1,595.58 200mm 9,573.48 797.79 1,595.58 250mm & 12,965.90 1080.49 2,160.98 250mm et 12,965.90 1,080.49 2,160.98 up plus METERED CUSTOMERS CONSUMPTION CHARGE CLIENTS AVEC COMPTEUR FRAIS DE CONSOMMATION 3333 Monthly (by m) Bi-Monthly (by m) Mensuels (par m) Bimestriels (par m) Consumption Rate Consumption Rate Consommation Frais Consommation Frais 3 33 33 3 3 3 (m)($/m) (m)($/m) (m)($/m)(m)($/m) For the first 50 1.9944 For the first 100 1.9944 Pour les 50 1,9944 Pour les 100 1,9944 premiers premiers For all in excess 1.2700 For all in excess 1.2700 of 125,000 of 250,000 Pour toute 1,2700 Pour toute 1,2700 consommation consommation au-delà de au-delà de 125 000 250 000 ANNEXE «C» st er Effective January 1, 2020 En vigueur le 1 janvier 2020 Sanitary sewer surcharge The charge for sanitary sewer charges is calculated Les droits afférents aux égouts sanitaires (including both consumption and service charges) (frais de service et redevance de consommation compris). IN WITNESS WHEREOF The City of Saint John EN FOI DE QUOI, The City of Saint John a fait has caused the Common Seal of the said City to be apposer son sceau communal sur le présent arrêté le affixed to this by-law the day of, A.D. 2019 and 2019, avec les signatures suivantes : signed by: ___________________________________________ Mayor/maire __________________________________________ Common Clerk/Greffière communale First Reading - Première lecture - Second Reading - Deuxième lecture - Third Reading - Troisième lecture - Appendix C BY-LAW NO. M-16 ARRÊTÉ NO M-16 A LAW TO AMEND A BY-LAW RESPECTING WATER AND SEWERAGE Be it enacted by the Common Council of conseil municipal, The City of Saint John as follows: The City of Saint John a décrété ce qui suit : A By-law of The City of Saint John entitled "A By-law Respecting Water and Saint John intitulé « Arrêté concernant les réseaux th Sewerage", enacted on the 7 day of June, A.D. 2004, is hereby amended as follows: modifié comme suit: 1. Section 43 is amended by adding the 1. L following immediately after subsection 43(2): paragraphe suivant immédiatement après le paragraphe 43(2): 43(2.1) The owners of property listed at Les propriétaires é industrial purposes shall pay the charges set out eau brute pour des fins industrielles doivent payer les tariffs forfétaires énoncés 2. Section 44 is amended by adding the following subsection 44(1)(c) immediately following 2. de subsection 44(1)(b): ) suivant immédiatement après : - « E » monthly. bimensuellement. 3-3. E » ci-jointe est ajoutée law immediately following IN WITNESS WHEREOF The City of Saint John EN FOI DE QUOI, The City of Saint John a fait has caused the Corporate Common Seal of the said apposer son sceau municipal sur le présent arrêté City to be affixed to this by-law the day le 2019, avec les signatures of , A.D. 2019 signed by: suivantes : _______________________________________ Mayor /Maire ______________________________________ Common Clerk/greffier communal First Reading - Première lecture - Second Reading - Deuxième lecture - Third Reading - Troisième lecture - Schedule « E » Raw Industrial Water Customers and Rates Raw Water Infrastructure Rate per Rate Customer Cubic Stabilizing Metre ($) Reserve Bi- Monthly($) This user draws its industrial raw water 1. New 0.2492 1,528.39 through a 1500mm diameter concrete Brunswick intake pipe running from Ludgate Lake Power across Route 1 to the Coleson Cove Screen Building located at coordinates N 7355170.56 and E 2522389.97 just off of Route 1. Once through the screen building water passes through approximately 5,000m of 600mm diameter transmission main to ultimately make its way to the Coleson Cove generating station located at 4077 King William Road. This user draws its industrial raw water 2. Irving Pulp 0.0672 44,101.34 through a 1800mm diameter intake pipe and Paper and approximately 330m of 1800mm Limited diameter concrete pressure pipe originating from Spruce Lake leading to the Spruce Lake Screen building. The screen building is located at coordinates N 7357823.16 and E 2525290.60 and is just to the right of the eastern shore of Spruce Lake. Once through the screen building water passes through the Spruce Lake Transmission main to ultimately make its way to the Irving Pulp and Paper Mill located at 408 Mill Road. The Spruce Lake transmission main consists of approximately 7,500mof 1500mm diameter concrete pressure pipe owned by City of Saint John and approximately 1,000m of 1370mm diameter concrete pressure pipe owned by IPP. This user draws its industrial raw water 3. Irving Paper 0.0445 1,809.22 through a 1200mm diameter intake pipe Inc. originating from Latimer Lake leading to the Latimer Lake control valve chamber . Once through the control valve chamber, water passes through approximately 275m of 1500mm diameter reinforced concrete pipe to ultimately discharge into Eldersley brook. Eldersley Brook recharges the Silver Falls watershed. Irving Paper has a private intake, screen and chlorination building located at Silver falls. From there the water eventually makes its way to Irving Paper located at 435 Bayside Drive. Multiple raw water transmission mains 4. Irving Oil 0.2637 20,100.93 deliver raw water from Latimer Lake to Limited other transmission piping near the Lakewood Heights pump station for use by potable and industrial users. Irving Oil Limited draws its industrial raw water from two separate connections to the above mentioned transmission mains prior to their connection to the Loch Lomond Drinking Water Treatment Facility. The first raw water connection to the transmission system near the Lakewood Heights Pumping Station delivers raw water to a chamber located at Champlain Heights through approximately 2,500m of 600mm HDPE relined cast iron raw water transmission main to ultimately make its way to the Irving Oil Refinery located at 340 Loch Lomond Road. The second connection to the above transmission systems is a 600mm PVC Raw water transmission main, approximately 3,000m delivers raw water along Hickey Road to a chamber located at Champlain Heights. From there raw water is delivered through approximately 450m of 500mm raw water transmission main along Commerce Drive to ultimately make its way to the Irving Oil Refinery located at 340 Loch Lomond Road. Notes: a) At between approximately 3 to 5 year intervals, the city will undertake industrial raw water rate studies for purposes of reassessing rates and rate structures. b) Rate Stabilizing Reserve will be reviewed annually as part of the yearly rate setting exercise with the intent of holding approximately 7 months of operating costs in the rate stabilizing reserve at any given time. Annexe « E » Infrastructure Taux au La réserve de brute mètre cube stabilisation ($) des tarifs Tari bimensuel($) Cet utilisateur puise son eau brute industrielle 1. Énergie 0,2492 1,528.39 Nouveau- 1 500 mm de diamètre qui, traversant la route 1, Brunswick va du lac Ludgate au bâtiment de dégrillage de Coleson Cove situé aux coordonnées N 7355170.56 et E 2522389.97, à proximité de la route 1. Une fois sortie du bâtiment de 000 m de conduite principale de 600 mm de diamètre pour finalement se rendre à la centrale de Coleson Cove, située au 4077, chemin King William. Cet utilisateur puise son eau brute industrielle 2. Irving 0,0672 44,101.34 800 mm de Pulp and diamètre vers un tuyau sous pression en béton Paper de 1 800 Limited 330 m environ provenant du lac Spruce et menant au bâtiment de dégrillage du lac Spruce. Le bâtiment de dégrillage est situé aux coordonnées N 7357823.16 et E 2525290.60, juste à droite de la rive est du lac Spruce. Une par la conduite principale du réseau de transport du lac Spruce pour finalement se rendre à chemin Mill. La conduite principale de transport du 7 500 m de conduite sous pression en béton de 1 500 mm de diamètre appartenant à la ville de 000 m de conduite sous pression en béton de 1 370 mm de diamètre appartenant à IPP. Cet utilisateur puise son eau brute industrielle 3. Irving 0,0445 1,809.22 200 mm de Paper Inc. diamètre provenant du lac Latimer et menant à la chambre de vannes de régulation du lac Latimer. Une fois sortie de la chambre de vannes de r 275 m de tuyau en béton armé de 1 500 mm de ruisseau Eldersley. Le ruisseau Eldersley recharge le bassin versant de Silver Falls. Irving Paper possède un bâtiment privé de pri de dégrillage et de chloration situé à Silver promenade Bayside. De multiples conduites principales de transport 4. Irving Oil 0,2637 20,100.93 Limited situées près de la station de pompage de Lakewood Heights pour être utilisées par des elle. Irving Oil Limited tire son eau brute industrielle de deux raccordements distincts aux conduites de transport susmentionnées avant leur potable de Loch Lomond. seau de transport près de la station de pompage de chambre située à Champlain Heights par 500 m de conduite de 600 mm en fonte revêtue de PEHD pour finalement se rendre à la raffinerie Irving Oil située au 340 chemin Loch Lomond. Le deuxième raccordement aux systèmes de transport ci- en PVC de 600 3 000 chemin Hickey vers une chambre située à acheminée par une conduite principale de 500 mm le long de la promenade Commerce chemin Loch Lomond. Notes : a) Tous les trois à cinq ans environ, la Ville entreprend des études sur les tarifs tarifaires. b) annuel dans le stabilisation des tarifs en tout temps. 1 | December 2, 2019 Common Council Meeting 2020 Utility Fund Operating Budget - and st reading of rd reading of By nd and 2 st and 1 for approval Law amendments. - 20: Draft Utility Budget to Finance Committee with Utility Budget to Common Council for 3 amendments. reading of By law amendments. 2020 Utility Fund Budget Context - nd November recommendation to send to Council for approval and 12Dec 2: Draft Utility Budget to Common Council with recommendation Law Dec 16: By reduction $5,120,350 17.78% - 41.49% 2020 Flat Rate proposed for 2020 ewer charge, 80.35% of water charge (122% s This Council & Finance Committee began fiscally prudent practice in 2018 No new debt Utility debt balance by end of 2020 ($88,347,000) reduction from end of 2017 peak ($107,451,000)Debt projections for end of 2024 ($62,875,000) in 7 years from end of 2017 peak in Utility debt. 2020 Utility Fund Budget Context 2020 Operating budget based on new Potable Water rate structure and East and West Industrial rate structures.No proposed increase for flat rate customers $1,428 per year.Major shift in under old rate model) Continued focus on Debt Reduction2020 capital funded from 2020 Operating Budget Fall 2019 15,835 Need Growth 15,896 Spring 2019 ($564,060) 15,994 Fall 2018 years Rate Billings NO INCREASE 16,031 in last 3 Spring 2018 Number of Flat 16,132 Fall 2017 16,230 flat rate customers 2020 Revenue Budget Overview Spring 2017 Flat Rate to be held at $1,428 However, continued pressure on Potable users. Flat Rate customers continue to fall, decrease of 395 16,30016,20016,10016,00015,90015,80015,70015,600 Est. 5,450,000 2019 Consumption 2018 5,344,768 Meter - 2017 Non Industrial 5,586,842 2020 Revenue Budget Overview Flat Rate decrease not being made up in Meter consumption. 5,700,0005,600,0005,500,0005,400,0005,300,0005,200,000 2020 Budget Initiatives Workplace improvements (fall arrest) at various underground vaults and chambers.Improvement in fencing, security and access at various water and wastewater facilities.Replace key electronic equipment at 30 water facilities and 32 wastewater facilities.Replace 8 key communication links to and from various water and wastewater facilities and replace 133 communication radios at water and wastewater facilities throughout the City. Safety and Security Instrumentation and Electrical Uptown - . 2020 Budget Initiatives Potable Water Millidgeville Cleaning, inspection and maintenance on 2 of 10 water storage reservoirs.Fire Hydrant Painting Program (repaint approx. 800 of the 2,100 in inventory) Focus area and Key water transmission main interconnections for further improvements in water system reliability.Inspection of dams in accordance with Canadian Dam Safety Association Guidelines.Protection of the environment through the addition of containment around electrical transformer.Water bottle filling station as part of the sea can container that is being constructed and support deployment at various events. 2020 Budget Initiatives Wastewater Dredging cells 1 and 2 at the Lancaster Lagoon to improve operational efficiency and effectiveness.Concrete maintenance and electrical upgrades at the Eastern Wastewater Treatment FacilityContinuatio n of newly established video inspection and flushing program. Video inspection will inspect another 65kms (15% of inventory) ͵ ε ğƷĻƩ (Appendix ЌЊБ Ώ $48,702,000 Council: $48,702,000 Ʒƚ aε/ bƚ͵ ЋЉЊВ Recommendation attached \[ğǞ 2020 Utility Fund Budget Ώ .Ǥ that the estimated revenue for the Water and Sewerage Utility for the that the estimate of expenses for the Water and Sewerage Utility for RESOLVE year 2020 in the amount of RESOLVE the year 2020 in the amount of Give first and second reading to the two Amendments to the {ĻǞĻƩğŭĻ is recommended that Common It APPENDIX "A" 2020 SAINT JOHN WATER OPERATING BUDGET 20192020 2020 ExpendituresBudgetForecast Drinking Water Watershed Management202,000260,000 Water Treatment10,035,0008,404,000 Water Pumping & Storage1,222,0001,312,000 Transmission & Distribution4,976,0004,919,000 Customer Metering714,000763,000 Internal Charges455,000 Other Charges700,000 Debt servicing4,397,000 Capital from Operating3,724,000 Industrial Water Watershed Management615,000608,000 Water Pumping & Transmission1,835,0001,710,000 Customer Metering133,000124,000 Debt servicing1,654,000 Transfer to Capital Reserve818,000 Transfer to Operating Reserve405,000 Capital from Operating 229,000 Wastewater Wastewater Pumping3,086,0003,027,000 Wastewater Collection3,158,0003,209,000 WasteWater Treatment4,810,0004,947,000 Internal Charges455,000 Other Charges700,000 Debt servicing3,513,000 Capital from Operating1,547,000 Infrastructure Management Municipal Engineering820,000822,000 Other Internal Charges905,000 Additional Post Employment Benefits1,322,000 33,833,00048,702,000 Fiscal Charges Debt servicing9,753,000 Capital from Operating4,700,000 Total Fiscal Charges14,453,000 Total Expenditures 48,286,00048,702,000 20192020 2020 RevenuesBudgetForecast Potable Water Revenue22,673,00022,100,000 Sewerage Treatement Revenue15,744,00016,150,000 Industrial Revenue4,600,0005,548,000 Fire Protection Levy2,600,0002,500,000 Storm Sewer Levy940,000950,000 Other revenues748,000968,000 Previous Year's Surplus981,000486,000 Total Revenues48,286,00048,702,000 Flat Rate - Water & Sewerage$1,428$1,428 4.39%0.00% Meter Rates: /Cu.m. Block 1 - First 100$1.6123$1.9944 Block 2 - Excess of 100$1.0267$1.2700 Block 3 - Eliminated for 2020$0.3623 /ƚƓƭǒƒƦƷźƚƓ ĬğƭĻķ ƚƓ .źΏƒƚƓƷŷƌǤ ĬźƌƌźƓŭ NOTE: Sewer Surcharge 80.35% of Water Charge Industrial Raw Water Rates: /Cu.m. East Industrial Irving Oil$0.2637 Irving Paper$0.0445 West Industrial Irving Pulp and Paper$0.0672 NB Power (Coleson Cove)$0.2492 Your worship and common council, City transit is a vital component to any city. Particularly in cities with an increase of poverty, city transit is the only viable network relied upon by many people. Saint John has one of the highest poverty rates in Canada. Here, not all of us can afford cars. Our transit system becomes an integral framework for moving around this vast city for newcomers, students, elderly, and people who are either unable to drive or afford a vehicle. I understand the city is in dire straights financially and will require cut backs across the board. Take these cuts from other areas. I challenge each board member to ride the bus for a day from home to work to see how our current bus system operates. Now imagine further cuts. This shell of a system cannot handle further cutbacks, it is barely functional as it is. As a single mother who relies on transit, I implore you to consider other options. We need our feeder buses to the main routes. We need our Saturday service. We need our holiday service. Many of us live far away from the bus hubs, such as Lancaster Mall, McAllister Mall and Place 400. We require these feeder routes to get onto the main routes. In a city full of poverty, a way out is transit. With a fully functioning transit service, people can attend school and work and contribute back to their community through volunteerism. Being able to arrive safely and on time is half the battle. Thank you for your attention to this matter, Genevieve Sweigard /hb/L\[ w9thw M&C No. 2019-315 Report Date November 22, 2019 Meeting Date December 02, 2019 Service Area Growth and Community Development Services His Worship Mayor Don Darling and Members of Common Council SUBJECT: Plaza Corp Development at the Corner of University Ave. and Millidge Ave., Amendment to Purchase and Sale OPEN OR CLOSED SESSION This matter is to be discussed in closed session pursuant to the provisions of subsection 68(1)(d) of the Local Governance Act. AUTHORIZATION Primary Author Commissioner/Dept. Head City Manager Brian Irving Jacqueline Hamilton John Collin RECOMMENDATION THAT the Committee of the Whole recommend to Common Council the adoption of the following resolution: between The City of Saint John and Plazacorp Property Holdings Inc., authorized by Common Council on August 4, 2015 and as amended by Common Council Resolutions of February 8, 2016 and June 18, 2018, be further amended by ment remaining unchanged in all other respects; and further that as recommended by the City Manager the sales proceeds from the transfer of land shall be restricted to future priority capital requirements of the City for its Parks and Green spaces in the Millidgeville and Saint John North areas. EXECUTIVE SUMMARY In 2015 Plaza Corp. (Plaza) purchased City owned lands at the corner of Millidge Avenue and University Avenue and subsequently developed a portion of the site with a Jean Coutu Pharmacy. The land most proximate the intersection remains undeveloped due to a restrictive covenant. Of the $700,000 purchase price, - 2 - $175,000 waiting for the restrictive covenant to be released so that Plaza may develop the remaining portion of the site. A public engagement and Private Members Bill is required to remove the covenant to allow for commercial development on the remainder of the site. The recommendations in this report enable a further timeline extension related to the removal of the restrictive covenant and provide direction that the sales proceeds from the transfer of land be restricted to future priority capital requirements of the City for its Parks and Green spaces in the Millidgeville and Saint John North areas. PREVIOUS RESOLUTION That the City enter into an Agreement of Purchase and Sale, in the form as attached to this report dated July 28, 2015, with Plazacorp Property Holdings Inc. for the sale of City Lands bearing PID 55221717; and further That the Agreement authorized by Council at its meeting dated August 4, 2015 (M&C #2015-156) with Plazacorp Property Holdings Inc. for the purchase and sale of City Lands bearing PID #55221717, be amended, to change Section 1.1 by Agreement remain unchanged; and further That as recommended by the City Manager in the submitted report M&C 2018- 178: Amendment to Purchase and Sale Agreement with Plaza Retail REIT Corner of Milllidge and University Avenue, the Agreement authorized by Council at its meeting of August 4, 2015 (M&C #2015-156) with Plaza Corp. Property Holdings Inc. for the purchase and sale of City lands bearing PID #55221717, and subsequently amended by Council on February 8, 2016 (M&C #2016-19); be further amended in Section 2.6 of the Agreement to extend the date of an additional two (2) years, until July 27, 2020 to remove the use restrictions on the Restricted Lands: in all other respects the Agreement remains unchanged. On June 13, 2016, Common Council amended the Municipal Plan designation for the site, including both the Jean Coutu development and the undeveloped lands subject to the covenant, from Suburban Neighbourhood to Local Centre and rezoned the property from Neighbourhood Community Facility (CFN) to General Commercial (CG). With respect to the undeveloped lands subject to the covenant, conditions imposed on the rezoning require that any additional buildings constructed on the site, including the covenanted lands, only be permitted through a Section 59 Amendment to assess the suitability of the site and building design and any infrastructure requirements. These conditions also require the developer to prepare an additional traffic impact study for any future development on the site. - 3 - REPORT In 2015 Plaza purchased City owned lands at the corner of Millidge and University Avenues. The site was subsequently rezoned and developed with a Jean Coutu Pharmacy. The corner of the lot was not developed as there is a restrictive covenant limiting the use of the lands to a fire station or for a public recreation ground or park or part one use, part the otherformer fire training facility (burn tower) historically occupied this portion of the site and has been relocated to the Grandview Industrial Park. The City has ample recreation spaces in the vicinity with playgrounds at M. Gerald Teed, Samuel de Champlain and Millidgeville North schools. Further Shamrock, Tucker and Rockwood Parks are very proximate the lands in question. As such, a park/recreation use is not envisioned for the corner. In order for Plaza to develop a commercial use and for the City to realize the money held in trust the restrictive covenant must be removed. In order to remove the covenant a public consultation and is required. This process would involve a requisite public meeting with community stakeholders to ensure the public understands the current restriction upon the land and ensuing process to lift same. There is existing community expectation that the proceeds of sale be redirected towards a use reflected in the covenant, a symbolic gesture respecting the spirit of the land granting. This action will remove potential opposition to the development. Plaza have agreed to host such a public meeting. Once the Public Meeting is held and on the premise there is general satisfaction with the proposal to advance the site towards commercial development, a process through the Provincial Legislature via a Private Members Bill would transpire to formally remove the restrictions on the land use. From a timeline perspective staff aims to secure Council support for this initiative in November 2019. The public stakeholder meeting would then take place in January 2020 and the Private Members Bill would hopefully receive legislative approval in the first sitting of the Legislature in 2020 and the second sitting would be the backup plan to secure the necessary support. Given the land at the corner of University Avenue and Millidge Avenue will not be used for the aforementioned prescribed uses of park or fire station it is reasonable and expected that the sales proceeds be restricted to future improvements. This directing of monies would again protect the spirit of the land granting to the City and at the same time be an offset for any future municipal - 4 - investment in recreation or parks that the City deems to be a priority in the community, to a maximum of $175,000. Parks and Public Spaces have prepared a list of future capital alternatives the restricted monies could potentially be used for in the future. Examples include but are not necessarily limited to the following: Score clock for the Emera Multi Purpose field ($50,000) Lengthening multi-purpose field #2 (grass) to regulation size ($50,000) Shamrock Park community garden Rockwood Park improvements emanating from an updated Master Plan Alternatively the monies could be placed in the LPP fund which would allow community organizations the opportunity to secure grant funding for various projects and initiatives in the Cpublic spaces. Securing a successful repeal of the restrictive covenant will result in a commercial use that would be welcomed and needed in Millidgville. The construction and site work would result in an investment of approximately $750,000 with an annual property tax yield to the City in the order of $20,000 per year. Millidgeville is currently very limited in terms of commercially zoned lands and there is demand in the market. The lot fronts on a very high profile corner and currently appears unkempt. The improvements would enhance the tics through completion of the development and the associated landscaping. STRATEGIC ALIGNMENT -2020 include the following priorities related to Growth and Prosperity and a Vibrant, Safe City: 5ƩźǝĻ ķĻǝĻƌƚƦƒĻƓƷ źƓ ğĭĭƚƩķğƓĭĻ ǞźƷŷ tƌğƓ{W ƷŷğƷ ĭƩĻğƷĻƭ ķĻƓƭźƷǤ ƩĻƨǒźƩĻķ ŅƚƩ ĻŅŅźĭźĻƓƷ źƓŅƩğƭƷƩǒĭƷǒƩĻ ğƓķ ƭĻƩǝźĭĻƭ͵ {ǒƦƦƚƩƷ ƷŷĻ ƩĻƷĻƓƷźƚƓ ğƓķ ğƷƷƩğĭƷźƚƓ ƚŅ ĬǒƭźƓĻƭƭĻƭ ƷŷğƷ ĭƩĻğƷĻ ƆƚĬ ƚƦƦƚƩƷǒƓźƷźĻƭ͵ 5ĻǝĻƌƚƦ ƓĻźŭŷĬƚǒƩŷƚƚķƭ ƷŷƩƚǒŭŷ ƦƌğƓƓźƓŭ ƷŷğƷ ğƌźŭƓƭ ǞźƷŷ tƌğƓ{W ğƓķ źƓĭƌǒķĻƭʹ o {ƷƩĻĻƷƭĭğƦĻ ĬĻğǒƷźŅźĭğƷźƚƓ o tğƩƉ ğƓķ ŭƩĻĻƓƭƦğĭĻ źƓǝĻƭƷƒĻƓƷ ƷŷğƷ ğƌźŭƓƭ ǞźƷŷ tƌğǤ{W͵ - 5 - SERVICE AND FINANCIAL OUTCOMES There are no anticipated service impacts should the development be realized. The improvements to City owned parks and green spaces are to be sustainable and will offset planned future capital expenditure requirements in its parks. The benefit will approach $20,000 per annum once the site is developed. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS This potential development opportunity and the notion of restricting the funds for future park improvements feedback and support Parks and Public Spaces, Develop Saint John, Growth and Community Planning, Finance and Administrative Services, Saint John Fire and Plaza Corp. ATTACHMENTS Site Map- Corner Millidge and University