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2023-03-22 Finance Committee Agenda Packet - Open Session�B City of Saint John Finance Committee - Open Session AGENDA Wednesday, March 22, 2023 4:30 pm Meeting Conducted by Electronic Participation 1. Call to Order 2. Approval of Minutes 2.1 Minutes of November 21, 2022 3. Approval of Agenda 4. Disclosures of Conflict of Interest 5. Consent Agenda 5.1 Budget 101 Infographic (Recommendation: Receive for Information) 5.2 How is Money Spent in the City Infographic (Recommendation: Receive for Information) 5.3 Capital Reserve Recommendation (Recommendation in Report) 6. Business Matters 6.1 Strategic Procurement Policy Update 6.2 General Fund Long -Term Financial Plan 6.3 2024 General Fund Budget Proposed Timeline 6.4 2022 Unaudited General Fund and Utility Fund Financial Results 7. Adjournment Pages 1-5 6-7 8-9 10 - 15 16-74 75 - 101 102 - 106 107 - 146 Finance Committee Meeting Open Session November 21, 2022 MINUTES —OPEN SESSION FINANCE COMMITTEE MEETING NOVEM BER 21, 2022 AT 5:00 PM MEETING CONDUCTED BY ELECTRONIC PARTICIPATION Present: Councillor G. Sullivan Mayor D. Noade Reardon Councillor P. Radwan Councillor G. Norton Councillor D. Hickey Also Present: City Manager J. Collin Commissioner of Finance and Treasurer K. Fudge Commissioner Transportation & Environment M. Hugenholtz Commissioner Saint John Water B. McGovern Commissioner Growth & Community Services J. Hamilton Commissioner Human Resources S. Hossack General Counsel M. Tompkins Fire Chief K. Clifford Director Transit and Fleet I. Fogan Director Financial Services J. Forgie Director Financial Services C. Lavigne Intermediate Accountant V. Parikh City Clerk J. Taylor Administrative Officer R. Evans Administrative Assistant K. Tibbits 1 Finance Committee Meeting Open Session November 21, 2022 1. Meeting Called to Order Councillor Sullivan called the Finance Committee open session meeting to order. 2. Approval of Minutes 2.1 Minutes of November 3. 2022 Moved by Mayor Noade Reardon, seconded by Councillor Radwan: RESOLVED that the minutes of November 3, 2022 be approved. MOTION CARRIED. 3. Approval of Agenda Moved by Mayor Noade Reardon, seconded by Councillor Hickey: RESOLVED that the agenda of November 21, 2022 be approved. MOTION CARRIED. 4. Disclosures of Conflict of Interest No disclosures. 5. Consent Agenda 5.1 2022 Operating and Capital Reserves (Recommendation in Report) Moved by Mayor Noade Reardon, seconded by Councillor Norton: RESOLVED that the Finance Committee approve the transfers to and from the following reserves and forward a copy of the report to Common Council for approval: General Operating Reserves • $1,178,200 from the General Operating Fund to the General Operating Reserve • $367,437 from the General Capital Reserve to General Operating Reserve • $2,580,059 from the General Operating Reserve to the General Operating Fund General Capital Reserves • $4,492,845 from the General Operating Fund to General Capital Reserve • $2,073,852 from the General Capital Reserve to the General Capital Fund • $367,437 from the General Capital Reserve to General Operating Reserve Utility Operating Reserves • $455,178 from the Utility Operating Fund to the Utility Operating Reserve Utility Capital Reserves • $1,438,068 from the Utility Operating Fund to the Utility Potable and Fleet Capital Reserve • $1,005,304 from the Utility Operating Fund to the Utility Industrial Capital Reserve • $472,626 from the Utility Capital Reserve (Fleet) to the Utility Capital Fund K Finance Committee Meeting Open Session November 21, 2022 MOTION CARRIED. 6. Business Matters 6.1 Performance Management S. Rackley-Roach reviewed the submitted report and discussed 2022 deliverables, Council's priorities and key performance indicators, the performance dashboard, metrics, and the launch of the performance management system. Next steps include implementation of the dashboard by the end of the first quarter 2023 and completion of the majority of operation metrics by the end of 2023. Additional goals include implementation of the corporate performance management and reporting system in 2022-2023; the annual review of the Strategic Plan in 2023; identification of service level gaps and a move to performance - based budgeting in 2023; and, a redesign of the continuous improvement program to integrate with the performance management system in 2025 to 2026. Moved by Mayor Noade Reardon, seconded by Councillor Radwan: RESOLVED that the presentation entitled "Performance Management" be received for information. MOTION CARRIED. 6.2 2023 Proposed General Fund Operating Budget Mr. Fudge provided a summary of changes from the previous budget based on feedback from Finance Committee members and other members of Common Council, noting the following adjustments: Revenues Transfer from Operating Reserves - $800,000 Own Source Revenues increase - $50,000 Expenditures Community Services Reserve - $800,000 Increase in Unspecified Grants - $50,000 There were minor adjustments between service areas within Growth and Development to ensure better alignment, however no impact to the overall budget. The proposed 2023 General Operating Budget totals $177,287,500, up 7.63% year over year and includes a property tax rate reduction of 9.0 cents, from $1.71 to $1.62. If approved, the 2023 property tax rate would be reduced by a total 16.5 cents over the last two years. The budget also moves the tax differential for Commercial and Heavy Industry from 1.5 to 1.7. The budget continues to advance and surpass the City's long term strategic financial objectives and increases flexibility, reduces vulnerability, and is sustainable. It also balances the financial objectives of the long-term plan while balancing the priorities of Council along with the recently adopted 10-year strategic plan. Moved by Mayor Noade Reardon, seconded by Councillor Norton: K3 Finance Committee Meeting Open Session November 21, 2022 RESOLVED that as recommended in the submitted report 2023 Proposed General Fund Operating Budget, the Finance Committee approve the proposed 2023 General Fund Operating Budget and forward to the next meeting of Common Council for receive and file and endorse the following: RESOLVED that: 1. The sum of $177,287,500 be the total Operating Budget of the City of Saint John for 2023; 2. The sum of $142,105,410 be the Warrant of the City of Saint John for 2023; 3. The tax rate for the City of Saint John be set at $1.62; 4. The City of Saint John set the property tax rate for Heavy Industrial Class at 1.7 times the residential rate; 5. The City of Saint John set the property tax rate for Non -Residential Class at 1.7 times the residential rate; and, 6. The Wage Escalation Policy apply to the Management Professional Group. MOTION CARRIED with Councillor Radwan voting nay. 6.3 Internal Audit — Health and S Referring to the submitted report, Ms. Forgie noted that the Health and Safety Internal Audit was approved as part of the Internal Audit Plan for 2022. A third party with expertise in Health and Safety was engaged to assist. The focus was on the design and structure of the City's Corporate Health and Safety Program relative to leading practices, including how processes are communicated and implemented within the City's business units with a focus on Utilities and Infrastructure Services, specifically Saint John Water. The scope of the audit included Health and Safety governance activities, tools (data and technology), systems, applicable policies and procedures, communications (internal and external), and training programs. Moved by Mayor Noade Reardon, seconded by Councillor Radwan: RESOLVED that the Finance Committee receive and file the internal audit summary of results for the Health and Safety Internal Audit. MOTION CARRIED. 6.4 Year -to -Date Financial Results and Year -End Protections for General Fund and Utility Fund Referring to the submitted presentation, Mr. Lavigne provided an overview of the estimated year-end financial forecasts for the General Fund and Utility Fund operating budgets. The projections have risk of changing due to such things as supply chain issues and snow removal costs. Revenues have improved in areas that were impacted by COVID-19 such as parking and recreation. Potable water revenues have also improved, which is largely attributed to better than anticipated revenue; the recommendation to transfer to the capital reserve will help with budgeting challenges and the rising cost of capital projects. Moved by Mayor Noade Reardon, seconded by Councillor Norton: RESOLVED that as recommended in the submitted presentation "October 31, 2022 Unaudited Financial Results and Forecast General Fund and Utility Fund," the Finance Committee adopt the following: C! Finance Committee Meeting Open Session November 21, 2022 • Recommend transferring only $1,750,000 in General Fund Operating reserves instead of the budgeted $2,367,056 to alleviate risk of a large surplus; • Recommend transferring $750,000 from the Utility Fund Potable operating budget to Capital reserves; • Finance Committee receive and file this presentation as presented and direct any questions to staff. MOTION CARRIED. 7. Adjournment Moved by Mayor Noade Reardon, seconded by Councillor Norton: RESOLVED that the Finance Committee meeting be adjourned. MOTION CARRIED. The Finance Committee open session meeting held on November 21, 2022 was adjourned at 7:40 pm. 61 $1)098 36% Invested in Public Safety. This includes police and fire services, dispatch, emergency management and street lighting. $374 12% $65 2% Invested in Parks and Public Spaces. This includes the maintenance of parks, trails, beaches, and city landscaping. Invested in Roads and Sidewalks This includes snow control, maintenance, repair and traffic management. Invested in Arenas and Sports fields This includes the operation and maintenance of City - owned arenas and fields. $56 2% Invested in Regional Facilities and Market Square This includes TD Station, Aquatic Centre, SJ Arts Centre, Imperial Theatre and SJ Trade and Convention Centre. $137 4% Invested in transit and parking This includes transit infrastructure and operations and parking administration. $3)078 A home with a value of $190,000 will pay $3,078 in city taxes. Here's where that money goes: $140 5% Invested in Solid Waste and Stormwater This includes residential garbage and compost collection, bulky item pick up, and stormwater management. V $203 7% Invested in Growth and Community Services This includes community planning, building inspections and permitting, economic development, heritage, and arts and culture. $212 7% Invested in Corporate and Support Services This includes M M M internal services such as IT, Communications, Finance, General Counsel and Human Resources. $72 2% Invested in ii•o •••o Infrastructure and +j I" •, ,•• 'm' Asset Management This includes buildings and facilities maintenance and operations, capital from operating and other asset management. $667 22% Invested in Debt Payments and Fiscal Charges This includes interest and principle payments, commitments to disability, pension and reserve contributions. $16 1% Invested in Mayor and Council This includes expenses and salaries. (Note: Based on 2023 Operating Budget. Figures are intended to provide a basic visual representation for educational purposes.) 3UDGETIL 1 65$ 2% investie clans les pares L-j et les espaces publics. Cela comprend 1 098 36 �0 $ 1'entretien des pares, des sentiers, investie clans la securite publique. des plages et Cela comprend les services de I'amenagement police et d'incendie, la reparttion, paysager de la gestion des urgences et la ville. y 4 1'eclairage des rues. 374 $ 12 % investie clans les routes et les trottoirs Cela comprend le deneigement,l'entretien, la reparation et la gestion de la , circulation. `. 3 1 % investie clans les arenas et les terrains de sport Cela comprend 1'exploitation et 1'entretien d'arenas et de terrains appartenant a la Ville 56 $ 2 % investie clans des installations regionales et Market Square Cela comprend la station TD, le centre aquatique, le Centre des arts de Saint John, le Theatre imperial et le Centre de commerce et de congres de Saint John O - O 137$ 4% investie clans le transport en commun et le stationnement Cela comprend l'infrastructure et les activites de transport en commun et I'administration du stationnement. Une maison d'une valeur de 190 000 $ paiera 3 078 $ en taxes municipales. Void ou I'argent est depense : 140 $ 5 % investie clans la gestion des dechets solides et des eaux pluviales Cela comprend la collecte des ordures residentielles et du compost, la collecte des articles encombrants et la gestion des eaux pluviales. 203 $ 7 % investie clans la croissance et les services communautaires Cela comprend la planification communautaire, les inspections et la delivrance de permis de construire, le developpement economique, le patrimoine, les arts et la culture. 212$ 7% o investie clans les services administratifs et de soutien M M M Cela comprend les services internes comme Ies TI, les communications, les finances, les avocats generaux et les ressources humaines. 72$ 2% investie clans la gestion de ('infrastructure et des biens Cela comprend 1'entretien et 1'exploitation des batiments et des installations, les immobilisations decoulant des operations et la gestion d'autres biens 667 $ 22 % investie clans les paiements de la dette et les charges fiscales Cela comprend les versements d'interets et de capital, les engagements a 1'egard de I'invalidite, les cotisations de retraite et de reserve. 16$1% investie pour le maire et le conseil Cela comprend les depenses et les salaires (Remarque : Base sur le budget de fonctionnement 2023. Les chiffres sont destines 6 fournir une representation visuelle debased des fins educatives.) PROPERTY TAX (collected and distributed by the City -sourced Province) Revenues $19,249,705 UNCONDITIONAL GRANT 0 (determined by the Province) 11 �o CITY -SOURCED REVENUES (Examples: parking meters, Market Unconditional Square, rentals & fess; 911 centre Grant service to outside communities; $15,868,062 permits & licenses) 9% 2023 EXPENSES $18,580,739 TOTAL $177,2871500 2023 REVENUE BUDGET TOTAL $177,287,500 797 Growth & Community Services: (Planning, Development, 1,460,000 Permits & Inspections, Population Growth) Public Works &Transportation Services: (Parks & Public Spaces, Streets & Sidewalks, Traffic, Solid Waste Collection, Stormwater Management, Fleet) Public Safety: (Fire, Police and Public Safety Communications Centre) Utilities & Infrastructure: (Engineering, Facility Management, Carpenter Shop, GIS) Strategic Services: (Finance, Supply Chain Management, 7,443,379 Information Technology, Corporate Planning, Risk) Corporate Services: (City Manager's Office, Mayor's 7,074 Office, Common Clerk, Legal, Human Resources, Communications, Real Estate, Customer Service, External Relations) Principal & Interest Special Pension f j Other Infrastructure BUDGET DES RECETTES DE 2023 w6T FONCIER Recettes (perdu et distribue par la province) provenant de OF SUBVENTION la ville INCONDITIONNELLE 19 249 705 $ (etablie par la province) 11 SOURCES DE RECETTES DE LA VILLE Subvention (Exemples : parcometres, Market inconditionelle Square, location et frais; Service du 15 868 062 $ centre 911 aux collectivites de 1'exterieur; permis et licences) 9 DEPENSES DE 2023 18,580,739 $ TOTAL 177 287 500 $ TOTAL 177 287 500 $ 797 $ CROISSANCE ET SERVICES COMMUNAUTAIRES (planification, developpement, permis et inspections, 460 000 $ croissance demographique) TRAVAUX PUBLICS ET SERVICES DES TRANSPORTS (pares et espaces publics, rues et trottoirs, circulation, collecte des dechets solides, gestion des eaux pluviales) SECURITE PUBLIQUE (Centre de communication sur les incendies, la police et la securite publique) SERVICES PUBLICS ET INFRASTRUCTURE (ingenierie, gestion des installations, magasin Carpenter, SIG) 7 443 379 $ SERVICES STRATEGIQUES (finances, gestion de la chaine d'approvisionnement, technologie de ('information, planification ministerielle, risque) 17 074 $ SERVICES ADMINISTRATIFS (Bureau du gestionnaire municipal, Bureau du maire, commis, 1 $ juridique, ressources humaines, communications, immobilier, service a la clientele, relations exterieures) CAPITAL ET INTERET REGIME DE PENSION SPECIAL AUTRES INFRASTRUCTURES FINANCE COMMITTEE REPORT Report Date March 20, 2023 Meeting Date March 22, 2023 Chairman Sullivan and Members of Finance Committee SUBJECT. 2023 General Fund and Utility Fund Capital Budget Update OPEN OR CLOSED SESSION This matter is to be discussed in open session of Finance Committee. AUTHORIZATION Primary Authors Commissioner/Dept. Chief Administrative Head Officer Craig Lavigne/Michael Ian Fogan/Kevin Fudge J. Brent McGovern Baker RECOMMENDATION It is recommended that members of the Finance Committee endorse the following recommendations and forward a copy of this report to Common Council for approval. "Recommend approval of transferring up to $2 million dollars from the General Fund Capital Reserve, as needed, to offset potential cost overruns on the 2023 General Fund Capital Budget as a result of supply chain and other inflationary pressures." "Recommend deferring General Fund Capital Budget Projects if cost overruns due to supply chain or other inflationary pressures exceed $2 million dollars based on the priority rankings in Appendix 1 (i.e., Priority ranking 4 would be utilized first)" and, "Recommend deferring three Utility Fund Capital Projects if required to offset cost overruns due to supply chain or other inflationary pressures based on the priority rankings in Appendix 2 (i.e., Priority ranking 3 would be utilized first)" EXECUTIVE SUMMARY The purpose of this report is to provide Finance Committee with an overview of how the Committee can support the 2023 Capital programs (Utility and General Fund) in terms of the significant overages' capital projects have recently been ito] -2- incurring as part of the tendering process. Staff are recommending a combination of deferring several general and utility fund projects as well as withdrawing up to $2 million dollars of General Fund Capital Reserves to address potential shortfalls in funding for priority 2023 Capital projects. PREVIOUS RESOLUTIONS N/A STRATEGIC ALIGNMENT This report aligns with Council's priority of PERFORM. The updated 2023 capital prioritization and risk mitigation strategy ensures the City is accountable for results in delivering public service by adhering to its plans, policies, procedures, and best practices. REPORT The purpose of this report is to update Finance Committee on the status of the 2023 Capital budget for both the General Fund and Utility Funds in terms of mitigating the impact of rising costs of capital works. The economic environment has changed drastically throughout the world as everyone attempts to recover from the COVID 19 pandemic. The Bank of Canada raised interest rates seven times in 2022, ending the year with an interest rate of 4.25%. Along with interest rate hikes the inflation rates seen in 2022 are the highest seen in almost 40 years. Inflation ended 2022 with a 6.3% rate year over year, however, was as high as 8.1% year over year in June of 2022. The inflation coupled with the increased cost of diesel and continued supply chain issues has created a number of challenges as it relates to the City's capital projects. On average for full street reconstruction projects tendered in 2022 the City has seen overall project budgets needing to increase by a factor of between approximately 1.5 to 2.1 to cover increased costs. Staff are seeing some areas (i.e. watermain work) affected much more than other components within street reconstruction projects. Staff have already brought forth recommendations to mitigate capital project overages such as scope changes or using surplus funds in other projects. The Capital Budget Policy provides two strategies to help mitigate the risk of increased cost of capital projects. ➢ The policy allows the use of capital surpluses to be reallocated to capital deficits or shortfalls. ➢ The policy allows staff to defer or carry forward projects for up to two years without having to relist the project for approval. This is 11 -3- advantageous for managing the timing of projects in order mitigate risk such as the current environment. Finally, there is Capital Reserves and a Capital Reserve Policy which can also play a role in mitigating the cost increases, however the use of such funds will need to be strategic as there are limited funds available. As staff undertake the 2023 Capital program, there will not be any surplus funds available in other projects to mitigate the pricing increases that Staff are currently seeing during the tendering process as well as throughout the design process where engineer's estimates are compared to the budget available. As a result of this issue, staff undertook a review of the 2023 Capital programs and prioritized the list of projects based on a number of factors such as. ➢ Safety or Risk of Failure ➢ Projects that have secured Other Share funding ➢ Projects that have been tendered ➢ Projects currently underway ➢ 2022 Capital Projects that required Supplemental Funding If the City is successful in receiving Other Share funding for projects (i.e. district energy) on the proposed general fund deferral list it is the intention that these projects would move forward with the allocated required City Share and would be removed from the deferral list. General Fund Projects proposed to be deferred are noted in Appendix 1 while deferred Utility Fund projects are noted in Appendix 2. General Fund Staff are recommending the approval of up to $2 million dollars to be transferred from the General Capital Reserve as needed to fund price increases for Capital projects undertaken in 2023. The current balance in the General Fund Capital Reserve that is not allocated is $7.29M. There is an additional $772K being transferred into the reserve in 2023 as part of the 2023 operating budget. The recommended $2 million dollars to be potential transferred represents 25% of the reserve balance which will be used to address the inflationary pressures in the Capital program. Although it is difficult to predict pricing for the Capital works, the transferring of these funds will help alleviate the pricing challenges. Staff will report back to Finance Committee with actual capital reserve transfers for capital. Approvals of all transfers to and from reserves is part of the provincial requirements on reserve transfers. 12 -4- The intention is that once $2 million dollars from the General Fund Capital Reserve is utilized to offset project overages, that staff would then utilize deferred general fund projects funding to offset overages on the higher priority capital projects. Deferred General Fund Capital Projects that have their City Share utilized as an offset to address other project overages will be relisted in the 2025 Capital Program or considered as part of any 2024 Capital Program revisions. Utility Fund Staff are recommending the three projects listed in Appendix 2 be deferred and if required their Utility Share funding be utilized to offset project on higher priority projects within the 2023 Capital Program. Deferred Utility Fund Capital Projects that have their Utility Share utilized as an offset to address other project overages will be re-evaluated in the 2025 Capital Program planning process or considered as part of any 2024 Capital Program revisions. Conclusion In conclusion, the three recommendations will allow staff more flexibility to move forward with 2023 Capital projects by having more City share funding available through projects being deferred as well as the use of up to $2 million dollars or 25% of the balance in General Fund Capital reserves. This will ensure Staff will not need to return to Common Council with every 2023 Capital Program project tender award seeking approval of surplus capital funds or use of Capital reserves. SERVICE AND FINANCIAL OUTCOMES This report meets the City's financial policies, ensures the City stays on budget as well as meets the goals of the Long Term Financial Plan. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS Input was received from all service areas that have projects included in the 2023 Capital programs. ATTACHMENTS Appendix 1 — 2023 Capital Program - General Fund Projects Appendix 2 — 2023 Capital Program - Saint John Water Projects 13 o O O O L fC O 0 O O O O O 0 0 O N T ++ Ln O ^ O Ln O N O N U lN0 L' N of tA G1 L f6 O O N 00 O O O O O O L G1 Ln O to O to O to fu O s r 4 �+ U � N +' > aS a, o tLo 0 u o r—° ° O L rNo Dl ti4 t Q E O_ v O .X u d. �o N ��� "a 0 c u �_ o N Dl ro U U- ro Dl a.' lu O_ Q 0 D1 E .� cn i x O O_ O- ro "a LL OD/ 4� N Q N VI U N U Q N C: Q ro O > O bo ro O N Oru u "a (� v � E 0 a-+ u c to O_ O N pTD O- .� cc C u i 3 O in ri 3 'r6 c a N u v Ly LL m u "a O O_ O O ro a CD Ll 7 N V E u O O U >j U + O O LE 0 w O > a�lu a u bp i C CG i C C f6 LL > JO ru D1 O fu� "a a-+ C Dl J 0 7 0 J u Dl J Y >' Q E D1 f6 i J � O m ,�., O 0 ri 7 J 4-0 41 U a U w •� ib > U i (1) O p m O m L (1) LA > rp Y 41 E C EO r'jMvv O 0rrauoi rn aru OE >o E rruO v u c -a o o cD 0) c>o"U °`° to o°o N ru v Q C 3 o N ( WC- u 0°o� o��N� ���v��L O-0 t N O O_ 7 v -a •� - 0 O u� u E E .N N S ro Q �' Dl N ro LL "a 7 'p O _ _ E c u f6 D1 LL u N0O fu d o O dX o u Jz 0 ov� �n v 3 ro r w T c c E cooE A '0 0) toCc ruou !% ru ni C .UQ C U Dl n m Li- G LL- G ZE`fi� � °1 A L O v N ro ++ E J Dl O O M O v v t 0-0 C -a u ? 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J 0 W aj > Q E o a, � ai O O —_ p aj o O u N "6 —1 E Waj O ++ (6 U O 'in " "6 iJ U t6 i O •� J V)-6 m "6 O aJ O L, � �i v� CO w V o m N C N �, m N Y aj 0 rl aJ0 � aJ O N O O E No.c MN0 o E a� U -0 o O v.s W m° U oma" 0 a 0 i ai vao a o W t N N a N M -6 0 o o -o j3 di O E Q- >°o E Nvo aj �� L v N v v =� v� � b D Oaj To O a v2 nv OE N V U a N aj L • aJ Q ai aOx ° v imNaJ Oaj " 0 > ^ b aj aj O� _v 3 UO3 �6aJ 0DOO a- a -0 U W G1 ai ai ai ^� i� CL :I- U (6 U (6 i U (6 i Y + ar � c E � c E O ai 2 ai V) ai Vn c c c ai 0 v O 41 Y O c � W a � Y O - O 'o N '� 0 a, c U E L a ~ Q U m 0- -a V) a, a, N V y O r-I N m a LO FINANCE COMMITTEE REPORT Report Date March 16, 2023 Meeting Date March 22, 2023 Service Area Strategic Services Chair Sullivan and Members of Finance Committee SUBJECT. Strategic Procurement Policy OPEN OR CLOSED SESSION This matter is to be discussed in Finance Committee Open Session. AUTHORIZATION Primary Author Commissioner/Dept. Chief Administrative Officer Head Chris Roberts/Jodie Forgie Kevin Fudge J. Brent McGovern RECOMMENDATION It is recommended that the Finance Committee receive and file the attached draft Strategic Procurement Policy. EXECUTIVE SUMMARY The purpose of this report is to update the Finance Committee on staff's progress with respect to modernizing the City's procurement policy and associated processes, as described within this report and accompanying Power Point Presentation. PREVIOUS RESOLUTION N/A STRATEGIC ALIGNMENT The recommendation is a step toward the implementation of the City's new Strategic Procurement Policy. It is aligned with Common Council's priority to "Perform". The new policy will update the City's procurement practices to become more streamlined, efficient and strategic, with a view to enhancing the the overall financial health of the organization. -2- REPORT The City of Saint John's procurement policy was last updated in 2011. While it was very suitable and progressive for its day, much has changed since its implementation. As a result, a full modernization project has been undertaken to bring a new policy into alignment with the current environment in which the City conducts its procurement activities. Notable changes in public procurement since the implementation of the current policy include: • Updated thresholds and procedures within the New Brunswick Procurement Act and Regulation • Implementation of the Canadian Free Trade Agreement (CFTA) • Implementation of the Comprehensive Economic and Trade Agreement (CETA) • Evolving case law with respect to public procurement in Canada The City's new Strategic Procurement Policy addresses these substantial changes while simultaneously incorporating various recommendations from the Ernst & Young Operational Review (2020), specifically: • Supplier Performance and Contract Management • Reduction of Payment Vouchers • Red -Tape Reduction In addition to the above, Common Council has expressed a keen interest in adopting Social Procurement practices in an effort to create social value for the community. The new Strategic Procurement Policy incorporates this mindset. Some of the benefits of social value include: • Promotion of supplier diversity • Support of Social Enterprises • Payment of a living wage • Inclusive employment practices • Environmental stewardship • Support of businesses owned by members of traditionally disadvantaged groups SERVICEAND FINANCIAL OUTCOMES A modern, strategic policy which drives increased value for the organization and community while streamlining existing business practices. 17 -3- INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS The modernization project was undertaken by a cross -functional team of dedicated professionals from across the City. The team includes members from the following service areas: • Supply Chain Management • Finance • City Solicitor's Office • General Counsel • Engineering • Chief Administrative Officer's Office Additionally, the project team utilized the services of two highly recognized consultants in the field of public procurement: • Larry Berglund — Presentations Plus • Paul Emanuelli —the Procurement Office ATTACHMENTS • City of Saint John Draft Strategic Procurement Policy • Associated Power Point Presentation iF:3 I LEI N U � � ca U N � N U U L U O N U N 4- 4A Q o ° O E E .� •U_ 3: � Q � N � •N � Q U Q 0 0 N w 0 U m (n w ca 0 0 E U 4--j m O N ca O O 4A C� U • Q U•E UQ LU O +-+ N m N z o 3 = k •E / CL 2 E t u o e = \ = / / / / 0 ./ 3 76 0- \ $ o % e E 3 § " 2 / & C .g 0 W R o e% e '( E [ 0 0 § a u g= ƒ \ \ 2 \ 7 Ln 2 E R 2 \/ \ o e \ = 2 / k 2 2 �&2& -0 § -a ƒ \ § n § 0 � G / / � 4--J \ m V) M - / 73 . / : V . 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The City recognizes that the taxpayers expect and have the right to receive a high level of services at the best value. The City is committed to maintaining a high standard of professionalism in the management of its public resources. The strategic objectives of the City's business practices are reflected in this policy. This policy establishes the accountability to ensure that economically, socially and environmentally responsible acquisitions include goods, services, inventory, vehicles, equipment, infrastructure, construction, and capital expenditures. The Citywill take the necessary actions to ensure it complies with applicable trade agreements, legislated requirements, and best procurement practices in the public sector. All competitive opportunities will be open where required, fair, and transparent. This policy applies to the procurement of all goods, services and construction for the City. This policy and its corresponding Procurement Procedures Manual is administered by Supply Chain Management under the direction of the CAO. 1.2 Principles — Strategic Procurement Policy Statement The City benefits from the alignment of its administrative and operational duties to meet its long-term objectives. The City wants to ensure best value is realized in all its procurement activities. This policy is one of the means by which the City can affect social and economic development to achieve best value for its citizens. Through procurement actions, the City can achieve best value for its citizens which can result in social, environmental and economic benefits. This policy will assist in obtaining best value and alignment with existing corporate plans (including but not limited to the City's Climate Action Plan, Ten -Year Strategic Plan and Ten -Year Financial Plan). The City is committed to conducting its Procurement operations in accordance with the following principles: (a) compliance and consistency with applicable legislation, trade agreements, policies, and procedures; (b) open, fair, and transparent processes that afford equal access to all qualified Suppliers; 3 1 P a g e !E:3 (c) reciprocal non-discrimination and geographic neutrality with respect to its trading partners in accordance with trade treaty obligations; (d) achieving best value through consideration of the full range of Procurement Methods and the adoption of commercially reasonable business practices; (e) effective balance between accountability and efficiency; (f) ensuring adherence to the highest standards of ethical conduct; (g) establishing standardization of goods, equipment, and technology wherever possible to realize best value; (h) procuring goods and services with due regard to the use of responsible products without compromising a healthy, safe, relevant, and aesthetically acceptable learning and working environment; (i) procuring the necessary quality and quantity of goods and services in an efficient, responsive, and cost-effective manner; (j) ensuring that administrative effort and expense are to be commensurate with the value of the purchase; (k) ensuring that the City is not unduly exposed to risk in all procurement -related transactions; (1) ensuring business processes are conducted with fairness, integrity, accountability, and transparency; and (m) ensuring that all procurement awards and contracts are free of any conflicts of interest or bias. 1.3 Role of Supply Chain Management Supply Chain Management is responsible for the purchase of goods and services, and the procurement of construction contracts for all City departments, except for the procurement of infrastructure construction contracts and professional services required by Utilities and Infrastructure Services. Infrastructure construction contracts and professional services will be coordinated through the Supply Chain Management department. Supply Chain Management is the City's link to the vendor community on all matters related to the procurement of goods, services and construction. Supply Chain Management shall prepare, or assist with the preparation of, all bid documents, related reports and recommendations for consideration, approval or award by the CAO, or designate, and/or Common Council on all procurement related matters. The City will consider other leading sustainability practices and may incorporate these emerging strategies into the City's policies where it is deemed to be appropriate and aligns with the City's strategic objectives. Supply Chain Management oversight and support services include, but are not limited to: 1. deploying procurement strategies and tactics which ensure value for money in all transactions; 41 Page 2. determining the procurement method which is most appropriate for the market conditions and facilitating the competitive bid processes and procedures; 3. ensuring supplier performance is meeting or exceeding the City's expectations; 4. compliance with all specifications for all acquisitions; 5. processing all contracts as per the signing authorities for contracts; 6. considering environmental, economic and strategic values when making recommendations or decisions; 7. supporting other departments with policy compliance and best practices; 8. providing professional procurement advice and services, including the recommendations on type of bid solicitation method; 9. monitoring compliance with this policy, the Procurement Procedures Manual and any applicable legislation and trade agreements; 10. notifying Commissioners or Directors, of non-compliance with this policy, the Procurement Procedures Manual and applicable legislation and trade agreements; and 11. notifying the CAO and/or Common Council of non-compliance. Commissioners are responsible for procurement activities within their departments and divisions and are accountable for achieving the specific objectives of the procurement policy. 1.4.1 Requirement for Approved Funds With respect to subsection 2.3.2 the authority to award a Contract is subject to the identification and availability of sufficient funds in appropriate accounts within the Budget(s). Where goods and services are routinely purchased or leased on a multi -year basis, the authority to award a Contract is subject to all of the following conditions: the identification and availability of sufficient funds in appropriate accounts for the current year within the Budget(s). the requirement for the goods or services will continue to exist in subsequent years and, in the opinion of the Chief Financial Officer, the required funding can reasonably be expected to be made available, and the Contract has a provision in it that the supply of goods or services in subsequent years is subject to the approval by Common Council of the Budget estimates to meet the proposed expenditures. 1.4.2 Acquisitions Outside of Approved Budget Where a requirement exists to initiate a project for which Deliverables are required and funds are not contained in appropriate accounts within Common Council approved Budget(s) to meet the proposed expenditure, the Commissioner shall, prior to the commencement of the purchasing process, submit a report, through the CAO, to Common Council containing: 51 P a ge 67i] 1. information surrounding the requirement to contract; 2. the terms and conditions of the proposed Contract; and 3. information on the availability of the funds within existing Budget(s), which were originally approved by Common Council for other purposes or on the requirement for additional funds. 1.5 Common Council Approved Contracts Notwithstanding any other provision of this policy, the following shall be subject to Common Council approval: 1. any Contract prescribed by legislation to be made by Common Council; 2. where the Bid price is higher than the approved Budget(s) and the necessary adjustments cannot be made; 3. where authority to approve has not been expressly delegated; and 4. where a Contract is a result of a public private partnership ("P3") opportunity. 1.6 Prohibitions The following activities are prohibited: 1. the division of contracts, purchases, or changes to the scope of work to avoid the requirements of this policy. 2. the award or approval of a Contract without the appropriate authority to do so; 3. purchase by the City of any goods or services for personal use by or on behalf of any member of Common Council, appointed officers, employees of the City or their immediate families unless specifically authorized by Common Council; 4. purchase by the City from any member of Common Council, appointed officers, employees of the City or their immediate families or from any other source that could result in a conflict of interest; 5. the use of personal credit cards for City purchases where a City Purchasing Card is available; 6. making commitments to other parties or acquiring items through a Contract which extends beyond approved funding availability; 7. the award of a Contract where Supply Chain Management has determined that the provisions of this policy have not been adhered to and has so advised the person responsible for the procurement; 8. any transaction which could result in the creation of an employee - employer relationship. 6 1 P a g e 51 SECTION 2 - INTERPRETATION AND APPLICATION 2.1 Defined Terms Terms used in this policy are defined in the following Glossary of Terms: GLOSSARY OF TERMS insert head of organization, CAO definition. "Bid" means a submission in response to a Solicitation Document, and includes tenders, proposals, quotations, or other responses. "Bidder" means a Supplier that submits a Bid, and includes proponents and respondents. "Budget(s)" means a Common Council approved annual General Fund Operating and Capital Budgets and Saint John Water Operating and Capital Budgets, including authorized revisions. "CAC)" means the Chief Administrative Officer of the City of Saint John, New Brunswick. "City" means the City of Saint John, New Brunswick. "Common Council" means the City of Saint John Common Council. "Competitive Process" means the solicitation of Bids from multiple Suppliers. "Contract" means a commitment by the City for the Procurement of Deliverables from a Supplier, which may be evidenced by an agreement executed by the Supplier and the City, or a Purchase Order issued by the City to the Supplier. "Contract Administrator" means an employee assigned to the management of a Contract. "Deliverables" means any goods, services, or construction, or combination thereof. "Invitational Competition" means a Competitive Process in which an invitation to submit Bids is issued to at least three Suppliers. "Legal Services" means the City's legal advisors. "Low -Value Procurement" means any Procurement of Deliverables with a value below the Low -Value Procurement Threshold set out in the Procurement Policy, except where the Procurement is made through an existing Standing Offer or Qualified Supplier Roster. 7 1 P a g e 61 "Low -Value Procurement Threshold" means the maximum value for a Procurement of Deliverables that the City may procure without proceeding with an Open Competition. "Master Framework Agreement" means a master agreement entered into between the City and the prequalified Suppliers that have been included on a Qualified Supplier Roster. "Non -Standard Procurement" means the acquisition of Deliverables through a process or method other than the standard method required for the type and value of the Deliverables. Non-standard Procurement methods include: (a) acquiring Deliverables directly from a particular Supplier without conducting a Competitive Process when an Invitational Competition or an Open Competition would normally be required; and (b) soliciting Bids from a limited number of Suppliers without conducting an open prequalification process when an Open Competition would normally be required. "Open Competition" means the solicitation of Bids through a publicly posted Solicitation Document. "Open Competition Threshold" means the minimum value for a Procurement of that the City must procure using an Open Competition as prescribed by applicable Acts and Trade Treaties. "Open Framework Competition" means the Competitive Process used to establish a Qualified Supplier Roster and provide for an ongoing application process during the term of the Qualified Supplier Roster. "Performance Evaluation Report" means a report evaluating a Supplier's performance. "Procurement" means the acquisition of Deliverables by purchase, rental, or lease. "Procurement Manager" means the individual officer or employee who is responsible for Supply Chain Management. "Procurement Method" means the bid solicitation format and includes but is not limited to: Request for Quotations (RFQ) Request for Proposals (RFP) Negotiated Request for Proposals (NRFP) Invitation to Tender (ITT) "Procurement Oversight Committee" ("POC") means the committee established by the City under the Procurement Policy for the purposes of considering and making determinations on procurement -related matters. "Procurement Plan" means the plan developed by a Service Area at the outset of an Invitational Competition or Open Competition. 8 1 P a g e 6V "Procurement Procedures Manual" means the compilation of specific details pertaining to various procurement processes. "Procurement Value" means the maximum total value of the Deliverables being procured, and it must include all costs to the City, including, as applicable, acquisition, maintenance, replacement, and disposal; training, delivery, and installation; and extension options, less applicable rebates or discounts and exclusive of sales taxes. "Purchase Order" means the City's written document issued by a duly authorized employee of the City to a Supplier formalizing all the terms and conditions of the purchase and supply of the Deliverables identified on the face of the Purchase Order. "Purchasing Card" means a credit card provided by the City to authorized officers and employees for use as a payment method to purchase directly from Suppliers where permitted under the Procurement Policy and in accordance with any cardholder agreement and applicable procedures. "Qualified Supplier Roster" means a list of Suppliers that have participated in and successfully met the requirements of a Request for Supplier Qualifications ("RFSQ') and have therefore been prequalified to perform discrete work assignments involving the delivery of a particular type of deliverable. The Suppliers that qualify for inclusion on the Qualified Supplier Roster will enter into a Master Framework Agreement and will be eligible to participate in Roster Competitions, as and when the goods or services are required. "Request for Information" or "RFI" means a market research initiative for the collection of data for the purposes of future Procurement planning. "Roster Competition" means an expedited, invitational competition between Suppliers that have been included on a Qualified Supplier Roster for the selection of a Supplier to perform a discrete work assignment during the term of the roster. "Service Area" means the branch, department, division, or unit of the City that is requisitioning the purchase of the Deliverables. "Service Area Head" means an individual officer or employee who is responsible for a specific Service Area. "Service Area Lead" means the Service Area employee assigned primary responsibility for a procurement. "Social Value" means a procurement outcome which has a positive impact on inclusive employment practices, small to medium-sized businesses, supplier diversity, workforce development and environmental stewardship. "Solicitation Document" means the document issued by the City to solicit Bids from Bidders. "Standing Offer" means a written offer from a pre -approved Supplier to supply Deliverables to the City, upon request, through the use of an ordering process during a particular period of time, at a predetermined price or discount, generally within a predefined dollar limit. The Standing Offer does not create a contractual commitment from either party for a defined volume of business. The commitment to 91 P ae 6'51! purchase against a Standing Offer is formed at the time a specific order is placed through the issuance of a Purchase Order to the Supplier. "Supplier" means a person carrying on the business of providing Deliverables. "Supply Chain Management" means the branch, department, division, or unit responsible for purchasing Deliverables for the City. 2.2 Application This policy applies to the Procurement of all Deliverables with the exception of the exclusions set out below: SCHEDULE OF EXCLUSIONS 2.2.1. Excluded Acquisitions and Expenditures This policy does not apply to: (a) Contracts or agreements for the sale, purchase, lease, or licence of land or existing buildings. (b) the acquisition of the following Deliverables: i. services of expert witnesses or factual witnesses used in court of legal proceedings; ii. goods intended for resale to the public; iii. goods purchased on a commodity market; iv. works of art; and V. subscriptions to newspapers, magazines, or other periodicals. (c) Contracts or agreements relating to hiring of employees or employee compensation or reimbursement of employee expenses. Procurement includes the acquisition of Deliverables by purchase, rental, or lease. 2.3.1 Spending and Approval Authorities Spending and approval authorities are as follows (excluding tax): Approved Operating Approved Capital Title Budget Budget Amount Amount Common Council Greater than $150,000 Greater than $500,000 101Page 6191 Chief Administrative Officer $150,000 or less $500,000 or less Commissioners $100,000 or less $100,000 or less Directors $25,000 or less $25,000 or less Line Manager $15,000 or less $15,000 or less Foreman, Supervisor, Admin or Designate $7,500 or less $7,500 or less 2.3.2 Contract Award Authority Delegation Pursuant to By-law No. LG-21, a "By-law Respecting Delegation of Authority to Award or Approve Contracts", Council delegated its authority to approve or award contracts to its CAO, Commissioners and Directors within the spending limits authorized under this policy and subject to compliance with any other applicable terms and conditions of this policy. 2.4 Low Value Procurement Threshold As referred to in this policy, the Low Value Procurement Threshold is set at $15,000 plus taxes. 2.5 Emergency Purchases Notwithstanding any other provisions of this policy, where an emergency exists and prior approval of the Procurement Manager cannot be obtained, a Service Area Head, or their designate, may authorize any officer or employee to acquire required Deliverables in an expedited manner. If the expenditure is not within the approved budget envelope and/or the amount of the purchase exceeds the spending and approval authorities set out in this policy the Service Area Head must provide a report to Common Council providing the relevant details surrounding the application of this section. For the purposes of this policy, an emergency exists when an unforeseeable situation or event occurs that is a threat to any of the following: (a) public health and/or safety; (b) the maintenance of essential services; or (c) the welfare of persons or public property; 111Page 67� Situations of urgency resulting from the failure to properly plan for a Procurement do not constitute an emergency. When using this section, the Service Area Head, or their delegate, shall ensure that a formal contract (when necessary) and other required procurement records are created prior to the acquisition of the goods or services, or, where not feasible in cases of extreme urgency, as soon thereafter as is reasonably possible. For greater certainty, Section 3 — Ethical Conduct and Conflict of Interest shall apply to emergency purchases and Conflicts of Interest must be avoided in relation to all purchases including emergency purchases. 2.6 Related Documents The following documents are to be read in conjunction with this policy: 1. The City of Saint John Procurement Procedures Manual under the Procurement Policy 2. The City of Saint John Procurement Card Policy 3. The New Brunswick Procurement Act and Regulation 2014-93 4. The Agreement on the Opening of Public Procurement for New Brunswick and Quebec 5. The Canadian Free Trade Agreement 6. The Canada -European Union Comprehensive Economic and Trade Agreement SECTION 3 - ETHICAL CONDUCT AND CONFLICTS OF INTEREST 3.1 Conduct and Conflicts of Interest For the purposes of this section, "Conflict of Interest" includes: (a) when applied to the activities of the City and its consultants and service providers: (i) a conflict between one's private interests and one's public, fiduciary, or contractual duties in relation to any procurement activity; or (ii) engaging in any conduct that may give another party an unfair advantage in a procurement process; or (b) in relation to a bidding process, a Bidder has an unfair advantage or engages in conduct, directly or indirectly, that may give it an unfair advantage, including, but not limited to: (i) having, or having access to, confidential information of the City in the preparation of its Bid that is not available to other Bidders; (ii) having been involved in the development of the Solicitation Document, including having provided advice or assistance in the development of the Solicitation Document; (iii) receiving advice or assistance in the preparation of its response from any individual or entity that was involved in the development of the Solicitation Document; (iv) communicating with any person with a view to influencing preferred treatment in the bidding process (including, but not limited to, the lobbying of decision -makers involved in the bidding process); or (v) engaging in conduct that compromises, or could be seen to compromise, the integrity of the open and competitive bidding process or render that process non-competitive or unfair; or 121Page 61FA (c) in relation to the performance of its contractual obligations, a Supplier's other commitments, relationships, or financial interests: (i) could, or could be seen to, exercise an improper influence over the objective, unbiased, and impartial exercise of its independent judgement; or (ii) could, or could be seen to, compromise, impair, or be incompatible with the effective performance of its contractual obligations. The City's Procurement activities must be conducted with integrity, and all individuals involved in the City's Procurement activities must act in a manner that is consistent with the principles and objectives of this policy and avoid any Conflict of Interest. All participants in a Procurement process, including any outside consultants or other service providers participating on behalf of the City, must declare any perceived, potential, or actual Conflicts of Interest and, must recuse themselves from participating in any manner in a Procurement Process to which the perceived, potential, or actual conflict of interest applies. For greater clarity, it is the responsibility of all members of Common Council to disclose any perceived, potential or actual procurement -related conflict of interest and, when the conflict is raised by a member of Common Council, to address that conflict in accordance with the procedures established by Common Council. 3.2 Supplier Conduct and Conflicts of Interest The City requires its Suppliers to act with integrity and conduct business in an ethical manner. All Suppliers participating in a Procurement process or providing Deliverables to the City must declare any perceived, potential, or actual conflicts of interest and must conduct themselves in accordance with the Supplier Code of Conduct set out below. The City may refuse to do business with any Supplier that has engaged in illegal or unethical bidding practices, has an actual or potential conflict of interest or an unfair advantage, or fails to adhere to ethical business practices. 131Pag 611:3 SUPPLIER CODE OF CONDUCT The City requires its Suppliers to act with integrity and conduct business in an ethical manner. The City may refuse to do business with any Supplier that has engaged in illegal or unethical bidding practices, has an actual or potential conflict of interest or an unfair advantage, or fails to adhere to ethical business practices. Suppliers are responsible for ensuring that any employees, representatives, agents, or subcontractors acting on their behalf conduct themselves in accordance with this Supplier Code of Conduct. The City may require the immediate removal and replacement of any individual or entity acting on behalf of a Supplier that conducts themselves in a manner inconsistent with this Supplier Code of Conduct. The City may refuse to do business with any Supplier that is unwilling or unable to comply with such requirement. A. ILLEGAL OR UNETHICAL BIDDING PRACTICES Illegal or unethical bidding practices include: (a) bid -rigging, price-fixing, bribery or collusion, or other behaviours or practices prohibited by federal or provincial statutes; (b) offering gifts or favours to the City's officers, employees, appointed or elected officials, or any other representative of the City; (c) engaging in any prohibited communications during a Procurement process; (d) submitting inaccurate or misleading information in a Procurement process; and (e) engaging in any other activity that compromises the City's ability to run a fair Procurement process. The City will report any suspected cases of collusion, bid -rigging, or other offences under the Competition Act to the Competition Bureau or to other relevant authorities. B. CONFLICTS OF INTEREST All Suppliers participating in a Procurement process must declare any perceived, potential, or actual conflicts of interest. The term "conflict of interest," when applied to Suppliers, includes any situation or circumstance where: (a) in the context of a Procurement process, the Supplier has an unfair advantage or engages in conduct, directly or indirectly, that may give it an unfair advantage, including but not limited to: 141 611%] i. having, or having access to, confidential information of the City that is not available to other Suppliers; ii. having been involved in the development of the Procurement document, including having provided advice or assistance in the development of the Procurement document; iii. receiving advice or assistance in the preparation of its response from any individual or entity that was involved in the development of the Procurement document; iv. communicating with any person with a view to influencing preferred treatment in the Procurement process (including but not limited to the lobbying of decision - makers involved in the Procurement process); or V. engaging in conduct that compromises, or could be seen to compromise, the integrity of an open and competitive Procurement process or render that process non-competitive or unfair; or (b) in the context of performance under a potential Contract, the Supplier's other commitments, relationships, or financial interests: i. could, or could be seen to, exercise an improper influence over the objective, unbiased, and impartial exercise of its independent judgment; or ii. could, or could be seen to, compromise, impair, or be incompatible with the effective performance of its contractual obligations. Where a Supplier is retained to participate in the development of a Solicitation Document or the specifications for inclusion in a Solicitation Document, that Supplier will not be allowed to respond, directly or indirectly, to that Solicitation Document. C. ETHICAL BUSINESS PRACTICES In providing Deliverables to the City, Suppliers are expected to adhere to ethical business practices, including: (a) performing all Contracts in a professional and competent manner and in accordance with the terms and conditions of the Contract and the duty of honest performance; (b) complying with all applicable laws, including safety and labour codes (both domestic and international as may be applicable); and (c) providing workplaces that are free from harassment and discrimination. 15 1 Ais] SECTION 4 - ROLES AND RESPONSIBILITIES 4.1 Role and Responsibilities of Common Council It is the role of Common Council to establish policy and approve expenditures through the City's budget - approval process. Through this policy, Common Council delegates to the City's officers and employees the authority to incur expenditures in accordance with approved budgets through the Procurement of Deliverables in accordance with the rules and processes set out in this policy. Common Council may provide strategic direction and guidance on major projects prior to the commencement of the Procurement process; however, Common Council will not generally be involved in the day-to-day Procurement operations or individual Procurement processes, except to the extent that the approval of Common Council is required under this policy or in the event that an exception to this policy is required. 4.2 Roles and Responsibilities of Officers and Employees Specific responsibilities pertaining to all stages of a Procurement process, from the initial identification of requirements through to the management of Contracts with Suppliers, are detailed in this policy. In addition to those specific responsibilities, the general roles and responsibilities delegated to the City's officers and employees are set out below. 4.2.1 Procurement Manager It is the role of Supply Chain Management to lead the City's Procurement operations. In fulfilling this role, the Procurement Manager, or designate, is responsible for: (a) ensuring the consistent application of this policy and the provision of Procurement services to the Service Areas efficiently and diligently; (b) in collaboration with Service Areas, developing an annual procurement plan to help facilitate proactive procurement planning across the organization and to help identify major projects requiring the creation of project -specific oversight steering committees; (c) developing Procurement strategies and continually analyzing business requirements and spending patterns to identify opportunities for more strategic sourcing, including the creation of new Qualified Supplier Rosters to consolidate purchasing opportunities and to reduce instances of emergency procurements and Non -Standard Procurements; (d) monitoring and reporting non-compliance and conflicts of interest in accordance with this policy; (e) researching, developing, maintaining, updating, and communicating Procurement procedures, and templates; (f) addressing any issues or concerns that arise in respect of a Procurement process and seeking guidance, support, and advice of Legal Services, as required; and 161Page (g) developing an annual procurement training plan for the organization and providing appropriate orientation, training, and tools to employees involved in Procurement activities. 4.2.2 Service Area Heads It is the role of the Service Areas to ensure that their requirements for Deliverables are met in accordance with the principles and objectives of this policy. In fulfilling this role, Service Area Heads are responsible for ensuring that their Service Area complies with this policy, encouraging sound Procurement practices and ensuring the provision of appropriate education and training to employees involved in Procurement activities. Service Area Heads will be held accountable for any decision to proceed with a Procurement process or transaction that is not conducted in accordance with this policy or does not have the approval of Supply Chain Management. 4.2.3 Service Area Employees Employees of all Service Areas are responsible for complying with this policy. Service Area employees involved in Procurement activities must understand their obligations and responsibilities under this policy, and they should consult with Supply Chain Management in respect of any questions regarding the application or interpretation of this policy or adhering to any established procurement procedures. 4.2.4 Supply Chain Management Employees Employees of Supply Chain Management are responsible for complying with this policy and ensuring this policy is applied consistently. Supply Chain Management employees must understand their obligations and responsibilities under this policy, and they should consult with the Procurement Manager in respect of any questions regarding their application or interpretation. 4.2.5 Legal Services It is the role of Legal Services to provide legal advice and assistance on the City's Procurement activities and its relationships with Suppliers. In fulfilling this role, Legal Services is responsible for: (a) advising the Procurement Manager as required on legal issues arising from Procurement activities and reviewing and approving specific Solicitation Documents and related documentation referred for legal review by the Procurement Manager; (b) providing advice on the finalization of Contracts and agreements and reviewing and advising on proposed changes to the City's standard terms and conditions, legal agreements, and Solicitation Document templates; and (c) providing legal advice and counsel to the City in the event of a Contract dispute or legal challenge flowing from a Procurement process. 17 1 I' 4.3 Procurement Oversight Committee The CAO may establish a Procurement Oversight Committee ("POC") for the purpose of: (a) making determinations relating to Conflict of Interest; (ii) Non -Standard Procurement; (iii) bid protests; and (iv) supplier suspension; (b) providing oversight as the steering committee for all Open Competitions, unless a project -specific oversight steering committee is created for a specific procurement; (c) monitoring and reporting non-compliance with this policy; and (d) providing input on other Procurement matters that may be referred to it by the Procurement Manager. The POC will include the Procurement Manager and at least two other senior -level officers or employees of the City and will also include the Service Area Head responsible for the specific Procurement in question. Legal Services will provide guidance and advice to the POC, as required. For greater clarity, if the CAO does not establish a POC, reference in this policy to POC shall be interpreted to mean CAO. SECTION 5 - ESTABLISHMENT OF SUPPLY ARRANGEMENTS 5.1 Recurring Requirements Before initiating a procurement, Service Areas must consider the availability of existing supply arrangements. If the Deliverables will be required on a frequent or regularly recurring basis, and there is no existing supply arrangement, the Service Area must consult with Supply Chain Management about the possibility of establishing a Standing Offer or Qualified Supplier Roster. 5.2 Standing Offers Standing Offers may be established for standardized Deliverables to be purchased by all Service Areas, where: (a) the requirements for Deliverables are recurring and predictable over an extended period of time; (b) the requirements are standard and clearly defined at the time of establishment of the Standing Offer; and (c) it is possible to fix pricing for the Deliverables for the duration of the Standing Offer. 181Page W The establishment of a Standing Offer does not create a contractual commitment to procure Deliverables from the Supplier. The commitment to purchase against a Standing Offer is formed at the time a specific order is placed through the issuance of a Purchase Order to the Supplier. The Procurement Manager is authorized to establish Standing Offers through Invitational and Open Competitions as required. The competitions will be managed by Supply Chain Management, with the co- operation and involvement of subject -matter experts from the relevant Service Area(s). If multiple Standing Offers are established for the same goods or services, clear ranking methodologies and call-up procedures must be specified. 5.3 Qualified Supplier Rosters Qualified Supplier Rosters may be established to prequalify Suppliers that will be eligible to compete for discrete work assignments involving the delivery of a particular type of Deliverables, as and when required. The establishment of a Qualified Supplier Roster does not create a contractual commitment to procure Deliverables from any of the Suppliers. When Deliverables are required, a Roster Competition will be conducted for the purposes awarding a contract to one of the qualified Suppliers. The Procurement Manager is authorized to conduct Open Framework Competitions to establish Qualified Supplier Rosters. The Open Framework Competition will be managed by Supply Chain Management, with the co-operation and involvement of the Service Area(s). 5.4 Co-operative Purchasing The City may participate in co-operative or joint purchasing initiatives with other entities where such initiatives are determined to be in the best interests of the City. If the City participates in such co-operative or joint purchasing initiatives, the City may adhere to the policies of the entity conducting the purchasing process, provided that such policies comply in spirit with this policy and with generally applicable legal requirements. If the City is leading a co-operative or joint purchasing initiative, this policy will be followed. SECTION 6 - PROCUREMENT OF DELIVERABLES 6.1 Procurement Planning Effective Procurement planning is essential to ensuring an effective result and to limiting risk to the City. Service Areas must ensure that they leave sufficient time to plan for a procurement, including time for: (a) developing proper specifications and business requirements; (b) obtaining internal reviews; (c) conducting a Competitive Process, as required; and 191Page AElI (d) obtaining necessary approvals. 6.2 Market Research Where the Service Area is uncertain about the Deliverables required or where there is insufficient internal knowledge about the market, the Service Area must consult with Supply Chain Management about the feasibility of conducting a Request for Information ("RFI") process. If it is determined that an RFI is needed, that RFI process must be openly posted in order to gather market research from prospective Bidders. It must not be used as a prequalification tool. 6.3 Procurement Value It is important to accurately estimate the value of the Procurement to determine the appropriate Procurement method and ensure compliance with the requirements of this policy. 6.4 Contract -Splitting Subdividing, splitting or otherwise structuring Procurement requirements or contracts in order to reduce the value of the Procurement or in any way circumvent the requirements or intent of this policy is not permitted. 6.5 Initiating Procurement Unless specifically permitted under this policy, Service Areas are not permitted to procure Deliverables or engage with potential Suppliers regarding the Procurement of Deliverables without the involvement of Supply Chain Management. 6.6 Procurement Authorization Before any Procurement process begins, proper authorization of the Procurement and delegation of authority to procure must be obtained in accordance with 2.3.1. 6.7 Standard Procurement Methods Depending on the nature, value, and circumstances of the procurement, the City may procure Deliverables through the following standard Procurement methods. The various thresholds for the different methods of procurement shall be as established and maintained by the POC. 6.7.1 Existing Supply Arrangement 6.7.1.1 Ordering from Standing Offer When a Standing Offer is available, its use is mandatory for all Service Areas. To purchase from the Standing Offer, the Service Area must submit an authorized requisition to Supply Chain Management. A purchase order referring to the Standing Offer details should be created and sent to the Supplier. The 201Page ARI Purchase Order referencing the Standing Offer and reflecting the pre -negotiated prices and terms and conditions of the Standing Offer will be created and issued to the Supplier by the Procurement Manager. 6.7.1.2 Roster Competition If the Deliverables are available under an existing Qualified Supplier Roster, they must be acquired through a Roster Competition. Roster Competitions will be managed by Supply Chain Management, with the co-operation and involvement of the Service Area. 6.7.2 Low -Value Procurement Where the Procurement Value is below the Low -Value Procurement Threshold and the Deliverables are not covered under an existing Standing Offer or Qualified Supplier Roster, Service Areas may make Low - Value Procurements without the involvement of Supply Chain Management. It is the responsibility of the Service Area to determine if there is an existing Standing Offer or Qualified Supplier Roster for the required Deliverables before making a purchase. When available, the Deliverables must be purchased in accordance with the terms of the Standing Offer For Low -Value Procurements, the Service Area is only required to obtain one quote and may acquire the Deliverables using a corporate purchasing card or by submitting a requisition to the Procurement Manager. Where practical, departments are encouraged to obtain multiple quotes to ensure they are obtaining best value. Quotes may be obtained through advertisements or Supplier catalogues or by contacting the potential Supplier(s) by telephone or email. The Service Area Head is responsible and accountable for Low -Value Procurements and may authorize specific individuals within the Service Area to make Low -Value Procurements and may assign specific spending authority limits. If a Service Area anticipates making multiple Low -Value Procurements of the same Deliverables and the total value of those purchases may exceed the applicable Low -Value Procurement Threshold, the department must contact Supply Chain Management to discuss the possibility of setting up a Standing Offer or Qualified Supplier Roster or consolidating the Procurement to avoid contract splitting. Supply Chain Management is available to assist Service Areas with Low -Value Procurements, and Service Areas may request that Supply Chain Management conduct an Invitational Competition for any Low -Value Procurement. 6.7.3 Invitational Competition An Invitational Competition, in which Bids are solicited from a minimum of three Suppliers, is the standard method of Procurement when the Procurement Value is between the Low -Value Procurement Threshold and the Open Competition Threshold. 211Page Invitational Competitions will be managed by Supply Chain Management, with the co-operation and involvement of the Service Area. Open Competition may be conducted in lieu of an Invitational Competition, where the Procurement Manager, in consultation with the Service Area, determines that it would be in the City's best interest. 6.7.4 Open Competition An Open Competition, in which Bids are solicited from all interested Suppliers through a publicly posted Solicitation Document, is the standard method of Procurement when the Procurement Value equals or exceeds the Open Competition Thresholds. Open Competitions may include two -stage Procurement processes in which a prequalification process is conducted by soliciting and evaluating submissions from all interested Suppliers in order to establish a short list of prequalified Suppliers that will be eligible to submit a Bid in response to a second -stage Solicitation Document. A two -stage Procurement process may be used whenever determined appropriate by the Procurement Manager, in consultation with the Service Area. Open Competitions will be managed by Supply Chain Management, with the co-operation and involvement of the Service Area. 6.8 Non -Standard Procurement Non -Standard Procurement means the acquisition of Deliverables through a method other than the standard method for the type and value of the Deliverables, as set out above under Section 6.7. Details pertaining to Non -Standard Procurements can be found in the Procurement Policy Manual. Non-standard Procurement methods include: (a) acquiring Deliverables directly from a particular Supplier without conducting a Competitive Process when an Invitational Competition or an Open Competition would normally be required, including but not limited to emergency purchases; and (b) soliciting Bids from a limited number of Suppliers without conducting an open prequalification process when an Open Competition would normally be required. Under no circumstances will a Non -Standard Procurement be used for the purpose of avoiding competition among Suppliers or in a manner that discriminates against, or advantages Suppliers based on geographic location. For greater certainty: (a) the Service Area Head will remain responsible for ensuring Open Competition, or at minimum, Invitational Competition, whenever feasible even in circumstances where direct awards would otherwise be recognized under the applicable trade treaties; and (b) the Conflict of Interest rules will apply to all Non -Standard Procurements. 221Page AYA 6.9 Contract Award and Finalization Contracts must be awarded in accordance with this policy. A Contract may be entered into through the execution of a legal agreement and/or the issuance of a Purchase Order evidencing the contract. The Contract must be entered into prior to the delivery or provision of the Deliverables. The Procurement Manager has delegated authority to issue Purchase Orders on behalf of the City. Agreements must be signed by the Mayor and Common Clerk. No Contract may be entered into, either through the issuance of a Purchase Order or the execution of an agreement, unless: (a) approved funding in an amount sufficient to cover the Procurement Value is available; (b) the Procurement process was conducted in accordance with this policy; and (c) all required authorizations have been obtained. SECTION 7 - SOCIAL PROCUREMENT 7.1 Social Procurement Values Where possible and practicable, to achieve best value for taxpayer dollars, the acquisition of Deliverables may include the following values and criteria when planning for and sourcing its requirements: 1. Sourcing of environmentally and ecologically responsible products and equipment, leveraging low carbon options; 2. Respect for the values of inclusivity, diversity, equity, culture, and fair labour practices; 3. Support of diverse organizations or organizations that have a social impact The criteria and process will be outlined in the Procurement Procedures Manual to assist in the proper execution of these values. 7.2 Social Procurement Above the Open Competition Threshold Any social procurement objective above the applicable Open Competition Thresholds must be supported by a plan approved by Common Council prior to its implementation that confirms, among other things: 1. the jurisdictional basis for the City to implement the objective under authority delegated by the provincial government; 231Page C:�:3 the trade -treaty authority for the City to implement the objective under programs established by the federal or provincial government based on the powers granted to those senior levels of government under the trade treaties; the public policy rationale supporting the objective, including a clear definition of measurable outcomes that the objective is intended to achieve; and 4. operational details for the implementation of the objective in the form of evaluation and award criteria and contract performance requirements that ensure the transparency and defensibility of evaluation and award decisions and contract administration practices in compliance with existing public procurement standards. 7.3 Social Procurement Below the Open Competition Threshold A Service Area may implement social procurement objectives for Contracts valued below the applicable Open Competition Thresholds as a pilot project and shall report the results of that pilot project to Common Council within a year of its implementation. For greater clarity, any below -threshold Contracts that include social procurement objectives will remain subject to the provisions of this policy, including but not limited to Section 3 — Ethical Conduct and Conflict of Interest,and any such pilot project shall at minimum address factor number four identified in the prior paragraph and shall be approved by the POC before being implemented by the Service Area. SECTION 8 - SUPPLIER RELATIONS AND CONTRACT MANAGEMENT 8.1 Debriefings Where the City has conducted an Open Competition, the City shall provide a debriefing to all unsuccessful Suppliers upon request. 8.2 Procurement Protests Suppliers may formally protest the outcome of a Procurement process. Procurement protests must be managed and responded to in accordance with directions provided by the POC. 8.3 Contract Management All contracts for Deliverables must be managed by the Service Area. Master Framework Agreements will be managed by Supply Chain Management. 8.4 Contract Extensions or Amendments Contract extensions and amendments must not be used to expand a Contract beyond what was contemplated under the terms of the Contract and the original Procurement process or to circumvent the need to procure additional Deliverables through a Competitive Process in accordance with this policy. 24 1 P a C1'] During the course of a contract, additional work may arise that could not be anticipated during the project planning process. Contract amendments for adjustments to the scope of the Contract may be approved if the adjustment is for work that is directly connected or incidental to the original Contract scope. The expansion or extension of a Contract to procure Deliverables that were not contemplated in the original Procurement is a Non -Standard Procurement and, if the total cumulative value of the additional Deliverables equals or exceeds the Open Competition Threshold, the Non -Standard Procurement must be approved by the POC. Where a Contract is amended or extended more than once, the total cumulative value of the additional Deliverables includes the value of all previously approved amendments and extensions and the value of the proposed amendment or extension. If a Contract amendment results in a net increase to the Contract value previously approved, the amendment must be approved in accordance with 2.3.1. All amendments to an existing Contract must be appropriately documented. Legal Services should be consulted regarding all matters pertaining to Contract interpretation and application, and for any changes, extensions, renewals, or amendments required to be made to any executed contract. 8.5 Contract Disputes All potential Contract disputes with Suppliers must be managed in accordance with the dispute resolution mechanisms outlined in the contract. Where a Contract is silent on dispute resolution, the Service Area should ensure that potential disputes are proactively managed and appropriately escalated. Written copies of all communications and correspondence with Suppliers concerning a Contract dispute must be maintained by the Service Area. A Contract can be terminated prior to its expiry date only with the involvement of Legal Services. 8.6 Supplier Performance The performance of a Supplier under Contract must be monitored and tracked by the Service Area. Details pertaining to managing supplier performance can be found in the Procurement Policy Manual. 8.7 Supplier Suspension Suppliers can be suspended from participating in future Procurement processes based on determinations made by the POC and as allowed for by the New Brunswick Procurement Act and Regulation 2014-93. SECTION 9 - PROCUREMENT RECORD -KEEPING 9.1 Supplier Information The City must ensure that Supplier information submitted in confidence in connection with a Procurement process or Contract is adequately protected. Supply Chain Management and the Service Areas must 251Page rill ensure that all Bids and contracts are kept in a secure location and are only accessible by those individuals directly involved with the Procurement or management of the contract. 9.2 Procurement Records The maintenance, release, and management of all Procurement records must be in accordance with the City's policies and procedures on document management and access to information. Supply Chain Management is responsible for ensuring that all documentation relating to a Procurement is properly filed and maintained in a Procurement project file. Documentation and reports regarding Procurement processes and Contract awards (including Non -Standard Procurements) and data necessary to trace the process conducted electronically must be maintained for a minimum period of at least seven years from the Contract award date, or such longer period as may be required under the City's document management policies. SECTION 10 -COMPLIANCE MONITORING AND REPORTING 10.1 Compliance Monitoring Non-compliance with this policy may expose the City to the risk of Supplier complaints, reputational damage, Bid disputes, and legal challenges, and may comprises the integrity, fairness, openness, and transparency of the process. The Procurement Manager is responsible for monitoring compliance across the organization. Based on the results of compliance monitoring, reports outlining instances of non-compliance may be issued by the Procurement Manager to the relevant Service Area Head. The Service Area Head must address the identified compliance concerns and submit a written confirmation of actions taken to the Procurement Manager. Ongoing concerns with respect to compliance will be subject to internal audit and to the additional reporting requirements outlined herein. 10.1.1 Non -Compliance Defined For the purposes of this section, non-compliance includes: (a) a breach of any purchasing card policies and procedures; (b) a breach of any codes of conduct involving a Procurement; (c) executing a purchase of any kind, including a new purchase, a purchase made through a contract amendment, or a purchase made under an expired contract, without first obtaining the necessary funding authorization and other applicable approvals; (d) commencing performance of a contract prior to the formal approval and execution of that contract; 261Page 71 (e) directly awarding a contract, or engaging in restrictive tendering, in instances where Open Competition is required, without first obtaining formal approvals for any such exception to Open Competition practices; (f) obtaining procurement approvals based on inaccurate or incomplete information or based on material misrepresentations or omissions; (g) failing to adhere to requirements of the procurement policy, including non-compliance relating to conflict of interest, proper advanced planning, contract splitting, sole sourcing, and recordkeeping; or (h) failing to adhere to the due process standards applicable to the government tendering process, including standards relating to transparency, procedural fairness, non-discrimination, and the protection of confidential supplier information. 10.1.2 Duty to Report and Rectify Service Area Heads are required to observe and address non-compliance with this policy within their Service Areas. Where instances of non-compliance are identified, the Service Area Head is expected to notify the Procurement Manager and obtain advice: (a) with respect to mitigating potential risks to the City arising from the non-compliance; and (b) to ensure future non-compliance is avoided. The Procurement Manager shall record all reported non-compliance to the Procurement Oversight Committee on a quarterly basis and shall, in consultation with that committee: (a) develop recommendations for rectification of any such non-compliance; and (b) provide a report to Common Council on an annual basis of any non-compliance issues not resolved or without a remediation plan in place. 10.1.3 Procurement Oversight Committee Once established by the CAO, the Procurement Oversight Committee ("POC") shall meet at minimum on a quarterly basis, and more frequently as required, to address non-compliance incidents and develop non- compliance remediation measures that may include, based on the severity of the breach: (a) the requirement that the individual(s) involved in the breach complete prescribed procurement remediation training; (b) the suspension of the individual(s) involved in the breach from any future procurement -related activities including the use of the purchasing cards or any other involvement in the procurement process; (c) additional disciplinary measures as may be appropriate based on consultation with Human Resources and Legal Services; 27 1 P a (d) a report to law enforcement authorities where the breach in question is of a criminal or quasi - criminal nature, and, for greater certainty, such breaches may include but are not limited to potential breaches of the Criminal Code or Competition Act. 10.2 Audit All Procurement activities will be subject to audit as prescribed by the CAO. 10.3 Reporting The Procurement Manager will prepare and submit to Common Council an annual report summarizing the City's Procurement activities, including: (a) Non-standard Procurements; (b) instances of non-compliance as described above; and (c) procurements over $100,000. 281Page rig] 291Page rL! 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Unaudited Revenues Property Taxes PI LT Adjustment 2022 2022 Year End Budget Actual Variance 129,423,226 131,483,072 2,059,846 15 15 - Equalization & Unconditional Grant 17,837,497 16,647,118 (1,190,379) Growth & Community Development Services 3,597,649 4,639,580 1,041,931 Public Safety Services 2,105,169 2,177,250 72,081 Transportation & Environment Services 4,808,845 6,888,361 2,079,516 Finance & Adminstrative Services 6,332,418 6,383,753 51,335 Corporate Services 285,000 39,652 (245,348) Utilities & Infrastructure Services 332,039 284,209 (47,830) Total Revenues 164,721,858 168,543,009 3,821,151 Expenditures Growth & Community Development Services 16,291,320 16,848,820 (557,500) Transportation & Environment Services 39,445,202 41,500,985 (2,055,783) Public Safety Services 56,204,643 56,129,367 75,276 Strategic Services 7,286,166 6,697,168 588,998 Corporate Services 7,092,813 6,550,227 542,586 Other Charges 31,778,313 31,009,453 768,860 Utilities & Infrastructure Services 6,623,401 7,349,256 (725,855) Total Expenditures 164,721,858 166,085,277 (1,363,419) Surplus (Deficit) - 2,457,732 2,457,732 137 1 The City of Saint John Operating Fund by Service Area December 31, 2022 - Unaudited 2022 2022 Year End Budget Actual Variance Revenues Property Taxes 129,423,226 131,483,072 2,059,846 PI LT Adjustment 15 15 - Equalization & Unconditional Grant 17,837,497 16,647,118 (1,190,379) Growth & Community Development Services 3,597,649 4,639,580 1,041,931 Public Safety Services 2,105,169 2,177,250 72,081 Public Works & Transportation Services 4,808,845 6,888,361 2,079,516 Strategic Services 6,332,418 6,383,753 51,335 Corporate Services 285,000 39,652 (245,348) Utilities & Infrastructure Services 332,039 284,209 (47,830) Total Revenues 164,721,858 168,543,009 3,821,151 Expenditures Growth & Community Development Services Growth & Community Planning Services 11695,676 1,686,559 9,117 Development Services 102,884 68,059 34,825 Development Engineering 346,667 294,538 52,129 Community Development 388,623 381,111 7,512 Animal Control 91,244 95,370 (4,126) Dangerous & Vacant Buildiings 547,385 265,456 281,929 Minimum Property Standards 310,229 217,892 92,337 Heritage Conservation Service 195,842 161,049 34,794 Cultural Affairs 126,289 122,802 3,487 Other By-laws 429,822 394,023 35,799 Permitting & Inspection Services 1,027,434 1,303,281 (275,847) Envision Saint John 2,175,000 2,979,403 (804,403) Market Square 2,250,000 2,167,157 82,843 Saint John Trade & Convention Centre 262,615 331,662 (69,047) Imperial Theatre 330,444 330,444 - Saint John Aquatic Centre 451,198 591,753 (140,555) Saint John Arts Centre 191,673 191,674 (1) TD Station 590,777 562,804 27,973 Library 473,001 473,001 - City Market 1,075,756 1,043,304 32,452 Arts & Cluture Board 70,000 65,060 4,940 Public Arts Maintenance 16,000 24,468 (8,468) Remembrance Day Ceremonies 1,500 3,129 (1,629) New Years & Canada Day Celebrations 15,000 19,093 (4,093) PRO Kids 235,526 137,646 97,880 138 2 The City of Saint John Operating Fund by Service Area December 31, 2022 - Unaudited 2022 2022 Year End Budget Actual Variance Succeed & Stay 169,736 124,846 44,890 Local Immigration Partnership 124,153 108,023 16,130 Carleton Community Centre 182,700 180,000 2,700 Loch Lomond Community Centre 45,000 45,000 - North End Community Centre 166,876 166,876 - Recreation Programming 564,327 504,610 59,717 Neighbourhood Development 152,000 152,000 - YMCA - Contracted Services 149,560 135,626 13,934 Boys & Girls - Contracted Services 137,887 137,883 4 Unspecified Grants 184,000 351,179 (167,179) Lifeguards 181,000 184,570 (3,570) Play SJ 15,000 17,850 (2,850) Lord Beaverbrook Rink 166,474 177,600 (11,126) Growth Reserve Fund 350,000 350,000 - Affordable Housing 300,000 300,000 - Total Growth & Community Development Servic( 16,291,320 16,848,820 (557,500) Public Safety Services Fire Rescue and Suppression Service 22,749,472 22,907,312 (157,840) Technical Rescue Response 46,065 46,164 (99) Hazardous Materials 67,188 73,287 (6,099) Fire Prevention 850,077 913,400 (63,323) Fire Investigation 58,578 60,295 (1,717) Emergency Management Service 341,536 288,762 52,774 Water Supply and Hydrants 2,500,000 2,335,319 164,681 Public Safety Communications 2,789,423 2,708,018 81,405 Street Lighting 958,800 921,382 37,418 Police Administration 1,835,003 2,173,929 (338,926) Criminal Investigation 4,398,533 4,569,449 (170,916) Police Commission 112,050 105,767 6,283 Automotive Equipment 1,023,518 1,065,915 (42,397) Support Services 2,224,375 2,340,060 (115,685) Detention 176,575 169,147 7,428 Police Operations 15,136,000 14,509,176 626,824 Stations & Buildings 937,450 941,986 (4,536) Total Public Safety Services 56,204,643 56,129,367 75,276 139 3 The City of Saint John Operating Fund by Service Area December 31, 2022 - Unaudited 2022 2022 Year End Budget Actual Variance Public Works & Transportation Services Snow Control Streets 5,177,279 5,792,348 (615,069) Street Cleaning 1,520,026 1,747,156 (227,130) Utility Cuts 710,263 965,322 (255,059) Street Services - Surface Maintenance 7,722,859 8,458,584 (735,725) Snow Control Sidewalk 921,437 1,119,408 (197,971) Sidewalk Maintenance 459,829 545,351 (85,522) Pedestrian & Traffic Management Service 1,982,463 2,038,435 (55,972) Solid Waste Management 3,674,381 4,030,573 (356,192) Regional Services Commission 28,657 28,566 91 Landscape - Parks & Open Spaces 1,883,049 2,144,801 (261,752) Rockwood Park 376,336 310,265 66,071 Urban Forestry 282,576 133,874 148,702 Saint John Horticultural Association 40,000 40,000 - Arena Operation and Maintenance 1,319,299 1,183,679 135,620 Sportsfield Operation and Maintenance 1,159,089 1,203,632 (44,543) Other Facility Operation and Maintenance 396,901 358,078 38,823 Parking Administration 760,182 752,973 7,209 Transit Debt 1,824,485 1,841,856 (17,371) Transit Subsidy 5,273,690 5,490,683 (216,993) Fleet Stockroom 282,982 208,153 74,829 Stormwater Rural 11958,602 1,576,923 381,679 Peel Plaza 297,216 333,397 (36,181) Market Square Parking 132,914 140,375 (7,461) Off Street Parking 11260,687 1,056,553 204,134 Total Public Works & Transportation Services 39,445,202 41,500,985 (2,055,783) Strategic Services Finance 1,172,280 1,109,158 63,122 Assessment 1,468,310 1,491,679 (23,369) Supply Chain Management 428,124 382,899 45,225 Information Technology 31332,935 2,895,449 437,486 Corporate Planning 312,720 194,868 117,852 Insurance 121,797 135,506 (13,709) Liability Insurance 450,000 487,609 (37,609) Total Strategic Services 7,286,166 6,697,168 588,998 140 4 The City of Saint John Operating Fund by Service Area December 31, 2022 - Unaudited 2022 2022 Year End Budget Actual Variance Corporate Services City Manager 1,019,922 702,264 317,658 Mayor's Office 219,350 196,159 23,191 Common Council 524,902 523,164 1,738 Common Clerk 607,207 571,279 35,928 Human Resources 1,853,166 1,835,833 17,333 Legal Department 1,030,331 944,969 85,362 Real Estate 176,940 151,865 25,075 Saint John Industrial Parks 86,371 243,384 (157,013) Corporate Communications 524,001 339,359 184,642 Customer Service 896,456 893,054 3,402 External Relations 154,167 148,898 5,269 Total Corporate Services 7,092,813 6,550,227 542,586 Utilities & Infrastructure Services Engineering 1,191,095 1,107,143 83,952 Carpenter Shop 325,622 453,381 (127,759) Facilities Management 1,545,173 2,061,206 (516,033) City Hall Building 1,014,587 981,122 33,465 Police Headquarters - 59,649 (59,649) GIS 426,585 413,806 12,779 Stockroom 248,134 347,736 (99,602) Stormwater Urban 1,872,205 1,925,215 (53,010) Total Utilities & Infrastructure Services 6,623,401 7,349,256 (725,855) Other Charges Fiscal Charges 15,741,124 15,845,227 (104,103) Deficit 2nd Previous Year 991,456 991,456 - Landfill Closure 300,000 300,000 - Special Pension Contributions 9,245,733 9,722,817 (477,084) Reserves 1,200,000 2,316,607 (1,116,607) Actuarial Gain/Loss - (2,466,654) 2,466,654 Capital from Operating 4,300,000 4,300,000 - Total Other Charges 31,778,313 31,009,453 768,860 Total Expenditures 164,721,858 166,085,277 (1,363,419) Surplus (Deficit) - 2,457,732 2,457,732 141 5 The City of Saint John General Operating Fund By Object Unaudited - December 31,2022 2022 Budget 2022 Actual Year End $ $ Variance Revenues Property Taxes 129,423,226 131,483,072 2,059,846 PILT Adjustment 15 15 - Fqualization & Unconditional Grant 17,837,497 16,647,118 (1,190,379) Permits & Licenses 1,062,050 1,328,926 266,876 Rentals & Fees 1,680,893 1,520,690 (160,203) Inter -fund Charges 1,800,000 1,896,000 96,000 Market Square Parking - 40,000 40,000 Meter Violations & Summonses 225,000 356,262 131,262 Parking Meters 3,063,395 3,812,055 748,660 Traffic By -Law 281,000 429,675 148,675 Fines 25,000 3,015 (21,985) Secondments 200,000 82,881 (117,119) Extra Duties 100,000 70,160 (29,840) Training 64,817 158,728 93,911 Contributions from Others 892,910 1,638,387 745,477 Partnerships 191,933 199,280 7,347 Emergency Dispatch 1,213,800 1,214,073 273 Utility Cuts 816,000 938,673 122,673 Interest Income 500,000 1,155,704 655,704 Internal Services 282,000 295,614 13,614 Insurance Proceeds - 36,693 36,693 Other Miscellaneous Revenues 4,562,322 3,972,300 (590,022) Accomodation Levy 500,000 1,263,688 763,688 Total Revenues 164,721,858 168,543,009 3,821,151 142 6 The City of Saint John General Operating Fund By Object Unaudited - December 31,2022 2022 Budget 2022 Actual Year End $ $ Variance Expenditures Salaries & Benefits Salaries 60,540,274 58,345,109 2,195,165 Overtime 2,048,971 3,053,447 (1,004,476) Other Personnel Costs 473,735 324,481 149,254 Fringe Benefits 16,111,547 16,447,779 (336,232) Pension 9,245,733 9,722,817 (477,084) Actuarial Gain/Loss - (2,466,654) 2,466,654 88,420,260 85,426,979 2,993,281 Goods & Services General Services 3,644,640 4,832,644 (1,188,004) Insurance 1,049,906 1,464,796 (414,890) Professional Services 1,880,765 1,536,711 344,054 Other Purchased Services 1,558,394 1,631,394 (73,000) Repairs & Maintenance 815,836 961,448 (145,612) Other Purchased Goods 1,064,607 1,327,325 (262,718) Roads 4,269,115 5,085,129 (816,014) Tipping Fees 1,305,000 1,270,788 34,212 Property Taxes 1,270,477 1,380,204 (109,727) Assessment Charge 1,468,310 1,491,679 (23,369) Asset Purchases 852,329 950,140 (97,811) Contracted Services 680,323 669,955 10,368 Postage 99,365 96,982 2,383 Inter -Fund Charges 3,523,000 3,317,724 205,276 Telephone 703,438 444,315 259,123 Radio 385,020 335,299 49,721 Growth Reserve Fund 350,000 350,000 - Fuel 1,337,999 1,804,025 (466,026) Advertising 148,075 155,504 (7,429) Travel, Conferences & Training 773,174 580,337 192,837 Commissionaires 470,000 462,361 7,639 Engineering 161,000 171,687 (10,687) Cleaners & Janitors 240,620 196,809 43,811 Solid Waste Collection 117,500 186,365 (68,865) Licenses & Software 1,257,850 1,071,327 186,523 Rentals - Vehicles & Equipment 758,973 440,954 318,019 Asphalt 889,139 958,357 (69,218) Parts 1,377,893 1,894,624 (516,731) Apparel 204,488 220,457 (15,969) Fuel Oil & Gas Oil 305,818 269,430 36,388 143 7 The City of Saint John General Operating Fund By Object Unaudited - December 31,2022 Expenditures (Continued) Salt & Sand Electricity Office Supplies 2022 Budget 2022 Actual Year End $ $ Variance 969,673 1,448,406 (478,733) 1,687,120 1,598,271 88,849 170,120 127,902 42,218 Operating & Safety Supplies 494,782 474,169 20,613 Water 166,970 163,562 3,408 Meals 159,023 173,085 (14,062) Lumber, Paint, Chemicals & Cement 343,684 291,145 52,539 Tools & Hardware 254,732 143,121 111,611 Memberships 158,294 144,362 13,932 Receptions 112,227 63,496 48,731 City Hall Rental 866,129 872,676 (6,547) Market Square Rental 2,250,000 2,167,157 82,843 Off Street Parking 619,996 560,725 59,271 41,215,804 43,786,847 (2,571,043) Grants - Agencies, Boards & Commissions Grants 2,960,200 3,119,789 (159,589) Transit Commission 7,098,175 7,311,167 (212,992) Lord Beaverbrook Rink 166,474 177,320 (10,846) Saint John Free Public Library 473,001 473,001 - Regional Services Commission 28,657 28,566 91 Regional Facilities Commission 1,826,707 2,008,318 (181,611) 12,553,214 13,118,161 (564,947) Fiscal Charges Interest 2,689,728 2,793,831 (104,103) Principal Repayment 13,051,396 13,051,396 - 15,741,124 15,845,227 (104,103) Other Charges Capital from Operating 4,300,000 4,300,000 - Other Miscellaneous Expenses 300,000 300,000 - Transfer to Reserve 1,200,000 2,316,607 (1,116,607) 2nd Previous Years Deficit 991,456 991,456 - 6,791,456 7,908,063 (1,116,607) Total Expenditures General Fund Surplus (Deficit) 164,721,858 166,085,277 2,457,732 (1,363,419) 2,457,732 144 8 Saint John Water Water & Sewerage Operating Budget December 31, 2022, Unaudited Results 2022 2022 Variance Budget Actuals Revenues Flat Rate Accounts 22,250,000 22,127,968 (122,032) Meter Rate Accounts 14,670,000 15,418,145 748,145 Industrial Raw Water Accou nts 6,347,859 6,585,203 237,344 Fire Protection Levy 2,500,000 2,335,319 (164,681) Storm Sewer Levy 925,000 884,401 (40,599) Other Revenues 937,216 1,340,925 403,709 Previous Year's Surplus 437,400 437,400 - Total Revenues 48,067,475 49,129,361 1,061,886 Expenditures Drinking Water Service Watershed Management 822,650 1,034,225 (211,575) Water Treatment 8,440,300 8,146,227 294,073 Water Pumping & Storage 1,178,345 1,088,126 90,219 Transmission & Distribution 4,503,100 4,579,646 (76,546) Customer Metering 728,300 686,993 41,307 Internal Charges 467,500 572,591 (105,091) Other Charges 555,000 607,205 (52,205) Debt Servicing 3,808,000 3,792,126 15,874 Transfer to Operating/Capital Resery - 880,522 (880,522) Capital from Operating 1,057,400 11057,400 - Total Drinking Water Service 21,560,595 22,445,061 (884,466) Wastewater Service Wasterwater Pumping 2,997,800 2,941,414 56,386 Wastewater Collection 3,017,855 3,123,551 (105,696) Wastewater Treatment 4,919,450 4,942,446 (22,996) Internal Charges 467,500 421,428 46,072 Other Charges 555,000 607,205 (52,205) Debt Servicing 3,202,100 3,066,784 135,316 Capital from Operating 4,112,800 41112,800 - Total Wastewater Services 19,272,505 19,215,628 56,877 Infrastructure Management Engineering Services 717,900 683,669 34,231 Total Infrastructure Management 717,900 683,669 34,231 Industrial Water Service Watershed Management 660,800 444,473 216,327 Water Pumping & Transmission 1,859,300 2,111,745 (252,445) Customer Metering 175,950 81,055 94,895 Debt Servicing 1,892,065 1,892,065 - Transfer to Capital Reserves 1,005,304 1,041,493 (36,189) 145 Transfer to Operating Reserve 455,178 480,010 (24,832) Capital from Operating 467,878 467,878 - Total Industrial Water Service 6,516,475 6,518,719 (2,244) Total Expenditures 48,067,475 48,863,077 (795,602) Surplus (Deficit) 266,284 266,284 146