2003-04-28_Minutes--Procès-verbal
2003-8
At a Public Committee of the Whole meeting of Common Council, held at the City Hall in
The City of Saint John, on Monday, the twenty-eighth day of April AD. 2003, at
5:00 o'clock p.m.
present
Councillor Trites, Chairperson
Mayor McAlary, Deputy Mayor White and Councillors Ball,
Chase, Court, Desmond, Fitzgerald and Teed
- and -
Messrs. 1. Totten, City Manager; J. Nugent, City Solicitor; A
Beckett, Commissioner of Finance and Commissioner of
Corporate Services; and Ms. C. Mosher, Assistant Common
Clerk.
Other staff members present during the meeting were Messrs. P. Woods, Deputy City
Manager; P. Groody, Commissioner of Municipal Operations; J. Baird, Commissioner of
Planning and Development; W. Edwards, Commissioner of Buildings and Inspection
Services; G. Yeomans, Comptroller; B. Morrison, Director of Recreation and Parks; and
C. Cogswell, Chief of Police.
1. MeetinQ Called To Order
Councillor Trites called the meeting to order, noting the three items on the agenda.
2. LonQ-Term Financial Outlook
Consideration was given to a report from the Commissioner of Finance submitting, as
Appendix A, Schedules II, II A and II B from the 2003 Operating Budget and preliminary
Budget for 2004 previously presented to Council and, as Appendix B, a listing of
"recurring" capital expenditure estimates based on the City's existing services totalling
$14.5 million. Highlighted in the report are four issues which have arisen since the
preparation of the preliminary 2004 Operating Budget which will challenge the City's
ability to maintain its current tax rate, including (1) the Employee Pension Plan in that a
soon-to-be-undertaken actuarial review will likely show a significant funding deficiency
due to sustained declines in the world's investment markets from which the impact on
the City could be a requirement to make additional annual contributions to the Plan that
could be in excess of $4 million commencing in 2004; (2) the Unconditional Grant, there
being no indication at this time that additional funding will be forthcoming through this
allocation and the best case scenario at this time would see the City retain its current
level of funding in 2004; (3) the Police Commission's suggestion that its 2004 budget will
need to be increased by at least $5-6,000,000 simply to absorb salary increases; and (4)
the Harbour Station Commission's recent announcement that the AHL's Saint John
Flames will no longer be a major tenant at Harbour Station could impact the City with an
increased funding requirement of $3-400,000 for this facility in 2004. The report
addresses 2004 beyond in terms of "recurring" capital expenditures needed to maintain
existing assets, the investments for which are significant and not isolated to a single year
but rather needed annually if service levels are to be maintained, and which need to be
properly incorporated into the on-going costs associated with each of the services so
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that Council and the public are in a proper position to evaluate the services and
determine allocation of limited resources; and advises the intent at this meeting to
demonstrate a model, developed by staff to progressively move toward increasing the
amounts available within the operating budget to reach the ongoing requirement,
showing the impact of not only reducing dependence on debenture borrowing for
"recurring" capital items but also the impact of such other capital projects as a new
police facility, acquisition of the Coast Guard site, implementation of the Transportation
Study and a new City Hall. The report concludes that Common Council should
commence discussions immediately to determine how it wishes to proceed with the
finalization of the 2004 Operating Budget and, in addition, with Council's input and
concurrence, staff will proceed further with the development of longer term financial
plans and policies aimed at reducing the City's dependence on debenture financing for
"recurring" capital programs and expenditures.
(Councillor Ball entered the meeting.)
Mr. Beckett, through a computer-aided presentation (copies of which were distributed to
the Council members at this meeting), reviewed the above-referenced issues that will
challenge the City's ability to maintain its current tax rate of $1.725 in 2004 and need to
be addressed in order to finalize the 2004 budget. Mr. Beckett made the observation
that, in terms of 2004, the City was facing a shortfall of approximately $5 million
depending on how the Pension Plan funding issue was resolved and the unconditional
grant, and a one-cent increase in the City's tax rate would yield approximately $390,000.
Mr. Beckett spoke to (1) the need for the City to reduce its dependence on debenture
financing for "recurring: capital items, (2) the importance for Common Council to
establish clear direction for future finances of the City, and (3) the need to establish a
dynamic framework for Council to evaluate the impact of financial decisions. Mr. Beckett
outlined objectives for a long-term financial plan, based on projected yearly increases of
2.5% in expenditures, .5% in non-tax revenue, 0% in the unconditional grant and 2.75%
in the tax base, with a goal to, in 10 years, 15 years and 25 years, respectively, see the
City cease using debenture borrowing for "recurring" capital programs, fully fund the
amount required for "recurring" capital programs, and fully payoff all debenture debt
associated with "recurring" capital programs. Mr. Beckett demonstrated the financial,
illustrating the impact on the current tax rate of $1.725 through to 2028 of various
financial scenarios, and responded to questions in this regard.
Following discussion Mr. Totten advised that, if he had one concern with respect to the
projections, his experience has been that the 2.75% increase in expenditure growth will
be very difficult to attain within the administration for the reason that the City has spent
ten years at a constant level while prices for, for example, asphalt and gravel were
increasing, thus a policy statement may be something different from 2.75%; however,
that target will then set the objective for the administration for the next 3 or 4 years.
At Councillor Trites' suggestion, it was agreed to move to agenda item 4 and, following a
brief recess, the meeting reconvened.
4. ManaQement Of City Market
Consideration was given to the City Manager's report on the management of the City
Market (previously submitted to Council on April 7, 2003 and tabled until this meeting for
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a teach-in from staff and an opportunity given to City Market tenants to speak)
discussing an in-house management model and a third-party management model for the
management of the City Market, the latter which would require the City to issue a
request for proposals; expressing the belief that, prior to a decision to simply carry
forward as in the past, the City should explore the possibility of adding value to the
management of the Market; and recommending that The City of Saint John issue a
request for proposals, as submitted, for the purpose of securing a third-party
management company to manage the City Market.
Consideration was also given to a letter from Bruce Macleod on behalf of the tenants of
the Saint John City Market (previously submitted to Council on April 7, 2003 and tabled
until this meeting for a teach-in from staff and an opportunity given to City Market
tenants to speak) commenting on the City Manager's report discussing the City Market
presented at the February 24, 2003 Public Committee of the Whole meeting; and
advising that the merchants of the City Market are eager to work with the City to ensure
that this invaluable treasure in the City's Uptown remains just that and becomes an ever-
increasing source of economic, social, cultural and entertainment value for citizens,
merchants, customers and visitors.
Consideration was also given to a report from the City Manager submitting, as a follow-
up to earlier reports on the City Market, a recently received letter from Bruce Macleod to
the City Manager, dated April 22, 2003, on behalf of the tenants of the Saint John City
Market.
Mr. Macleod, accompanied by a number of City Market tenants, was present at the
meeting in the above regard, as was Mr. D. Gould, President of CUPE local 18.
Mr. Totten advised that, subsequent to his meeting two weeks ago with Mr. Macleod
and Mr. Gould, he received the second letter from Mr. Macleod and, from his
perspective as City Manager, he was pleased with the work done and analysis
undertaken in terms of the approach the tenants have taken, and there were some ways
to move forward both in the best interest of the public and also being extremely sensitive
to the needs and wants of the tenants.
Mr. Macleod, through a computer-aided presentation highlighting the contents of his
April 22, 2003 letter to the City Manager, addressed the four fundamental areas of
concern with respect to the City Market: (1) effective management, (2) preservation of its
unique social, cultural and commercial fabric, (3) cost recovery and rent structure, and
(4) preservation of its historical integrity, during which time he apprised the Committee of
the merchants' position on each. Mr. Macleod reasserted the merchants' belief that a
middle ground can be struck that will allow modern-day small business to prosper in an
environment that respects the "historical" integrity of the City Market and they were
committed to collaborating with the City to find a win-win approach; and advised that the
merchants were pleased that the City has assured some certainty for the local 18
employees who work in the City Market by committing to their employment there through
the term of their collective agreement, while agreeing to make appropriate adjustments
to the cost recovery analysis that has a direct bearing on merchants' rents. Mr.
Macleod also advised that, having had discussion with City staff, he sensed
considerable opportunity for common ground and, while he understood that time was of
the essence because of the situation with management personnel in the Market, his
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bidding was that a proper process be followed to put in place a framework to manage
the City Market.
Following discussion on the City Market issue, the Mayor suggested that, because it was
almost 9:00 o'clock p.m. and rather than have a discussion on the residency issue now
and again at a future regular meeting of Council, agenda item 3 should be considered at
the May 5, 2003 regular Council meeting.
3. Residencv Requirement
On motion of Mayor McAlary
Seconded by Councillor Desmond
RESOLVED that the City Manager's report with respect
to a residency requirement be referred to the next regular meeting of Common Council
on May 5, 2003.
Question being taken, the referral motion was carried.
Councillor Trites declared the meeting adjourned.
Assistant Common Clerk