City of Saint John Finance Committee - Open …...2018/03/13 · • The City shall promote a balanced approach between debt affordability, maintaining infrastructure and accommodating

City of Saint JohnFinance Committee - Open Session

AGENDA

Tuesday, March 13, 20185:00 pm

8th Floor Boardroom, City Hall

Pages

1. Call to Order

1.1 Approval of Minutes - December 6, 2017 1 - 2

1.2 Long Term Financial Planning 3 - 49

1.3 2018 Revised General Operating Budget 50 - 58

1.4 Water and Sewerage By-Law Amendment 59 - 85

1

City of Saint John Finance Committee Meeting

Tuesday, March 13, 2018

Finance Committee Closed Session

1. Call to Order Si vous avez besoin des services en français pour une réunion de Conseil communal, veuillez

contacter le bureau du greffier communal au 658-2862.

Each of the following items, either in whole or in part, is able to be discussed in private pursuant

to the provisions of subsection 10.(2)(4) of the Municipalities Act and Council / Committee will

make a decision(s) in that respect in Open Session:

4:30 p.m., 8th Floor Boardroom, City Hall

1.1 Approval of Minutes 68(1)

1.2 Financial Matter 68(1)(c)

2

Finance Committee Meeting Open Session December 6, 2017

MINUTES – OPEN SESSION FINANCE COMMITTEE MEETING DECEMBER 6, 2017 AT 5:00 PM

8th FLOOR BOARDROOM, CITY HALL

Present: Mayor D. Darling Councillor D. Merrithew Councillor G. Sullivan Councillor G. Norton Councillor S. Casey Absent: Councillor D. Reardon Also Present: City Manager J. Trail Deputy City Manager N. Jacobsen Commissioner of Finance and Treasurer K. Fudge Senior Manager Financial Planning H. Nguyen Deputy Commissioner Finance and Administrative Services I. Fogan Comptroller C. Graham Commissioner of Transportation & Environment Services M. Hugenholtz Assistant Comptroller Finance C. Lavigne Commissioner Growth and Community Development J. Hamilton Fire Chief K. Clifford Deputy Fire Chief J. Armstrong Police Chief J. Bates CEO Saint John Parking & Transit Commissions I. MacKinnon Administrative Assistant K. Tibbits

1. Meeting Called To Order Councillor Merrithew called the Finance Committee open session meeting to order. 1.1.1 Approval of Minutes – November 29, 2017 Moved by Councillor Sullivan, seconded by Councillor Casey: RESOLVED that the minutes of November 29, 2017, be approved. MOTION CARRIED. 1.2 2018 Recommended General Operating Budget Mr. Fudge reviewed the submitted report entitled, “2018 Recommended General Operating Budget”. Various strategies have been discussed in terms of fiscal responsibility such as budgeting past a single budget cycle, asset management and determining the City’s infrastructure deficit, the need to manage the City’s debt, strategic investments in continuous

1

Finance Committee Meeting Open Session December 6, 2017

improvement and growth, and creation of financial policies including the Asset Management Policy, Investment Policy and Reserve Policy. A three year plan is being introduced to reduce expenditures by $15M through organizational restructure. A $6.1M structural deficit has resulted from an imbalance in reoccurring revenues and reoccurring expenditures. It is recommended that any short term government funding not be used to fund on-going operations to avoid the risk of future increases to the structural deficit. Short term funds are better used to reduce debt, reduce infrastructure deficit, or fund one-time expenditures. It is proposed that any financial assistance received from the province be allocated to a general operating reserve to provide some flexibility to implement work force reductions through an attrition program. This will allow time to plan for service changes, mitigate operational risk and retain employees with less seniority. Mr. Trail stated an attrition plan and an establishment plan will be presented to Council early in 2018 and does not recommend buy out packages or incentive packages to encourage accelerated retirements or reductions in the establishment. Moved by Mayor Darling, seconded by Councillor Sullivan: RESOLVED that the Finance Committee approve the 2018 General Operating Budget as submitted and send the budget to Common Council for approval. MOTION CARRIED. Adjournment Moved by Councillor Sullivan, seconded by Mayor Darling: RESOLVED that the open session meeting of the Finance Committee meeting be adjourned. MOTION CARRIED. The Finance Committee open session meeting held on December 6, 2017 was adjourned at 6:15 p.m.

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2018 Long Term Financial Planning

Finance Committee

March 13, 2018

3

Long Term Financial Plan

1. 2018 Long Term Financial Plan Action Plan 2. Discuss Draft Financial Policies Included in Packet 3. Public Stakeholder Engagement 4. Financial Health Scorecard 2017 5. Long Beach Case Study Included in Packet

4

Background

• The primary objective of Long Term Financial Planning is to:

• Stimulate Long Term Thinking – current annual budget process only provides a single year vantage point and the impacts of financial decisions made by Council can span over multiple years;

• Stimulate Big Picture Thinking – enables municipalities to step back from the detail and think more strategically and holistically about the City’s financial position and requirements;

• Impose Discipline – reinforcing the need to follow sound financial practices and policies.

3

What are we trying to achieve?

5

Work Plan in 2018

1. Define Current Service Levels and prepare long term forecasts that includes funding to sustain those service levels;

2. Conduct Public Consultation (service levels, tax rates and prioritization of funds)

3. Prepare Long Term Forecast Scenarios that include strategies to eliminate structural deficits, control debt and address the Infrastructure Deficit;

4. 10 Year Long Term Financial Plan approved by Council and supported by Policy (refreshed annually);

5. Prepare Budgets that are Aligned with Financial Plans;

6. Strengthen Financial Governance with Council Approved Financial Policies;

7. Monitor Financial Health through Annual Scorecard;

6

Initiatives Target Deliverables Define Service Levels Q3

• High Level Service Definitions for key service areas (high cost, high utilization areas only) based on PlanSJ;

• Limit to the areas of largest expenditure (3-5) service level definitions per service area;

Public Engagement Q3 • Obtain community feedback respecting expectations and

prioritization of service delivery through the Citizen Survey

and online web based tool;

Forecast Scenarios Q3

• Prepare a 10 Year Operating Forecast and 5 Year Capital

Investment Plan (with Asset Management if available);

Budget Development Q4

• Develop 5 Year Capital Investment Plan • Develop Capital Budget with 5 Year Outlook • Develop Operating Budget with 5 Year Outlook

Policy Development Q4 • Council approved financial policies that will strengthen the

governance respecting fiscal responsibility and influence

decision making during the budget planning process;

Financial Health Report

Card

Q4 • Annual Report Card on Financial Health (Sustainability, Flexibility, Vulnerability)

2018 Targets

7

Listing of Policies

6

#

Policy Title Status

FAS-001 Asset Management Approved

FAS-002 Investment Management Approved

FAS-003 Reserves Approved

FAS-004 Operating Budget Draft

FAS-005 Capital Budget Draft

FAS-006 Debt Management Budget Draft

FAS-007 Long Term Financial Plan TBD

Progress on Financial Policy Development

8

Initiatives Status Impact on Fiscal Governance Asset Management

Policy • Asset management principles:

• Defining levels of service. • Applying risk-based decision-making processes. • Utilizing lifecycle costing principles • Budgets must consider Asset Management

Investment Policy

• The City’s funds will be invested according to the liquidity needs for operating cash flow, to optimize return on investment but with protection of principal as the highest priority.

Reserve Policy

• The adequacy of shall be aligned with the Long Term Financial Plan, Asset Management Plan, and the Debt Management Plan;

• Reserve funds will generally come from: • The excess of revenues over expenditures and

one time revenues; and • Planned/budgeted amounts for reserves.

Council Approved Policies

9

Initiatives Status Impact on Fiscal Governance

Operating Budget

Policy

• The City’s budgeted operations shall be in line with

agreed upon Council priorities and the Long Term

Financial Plan;

• The City must be able to bear the budgeted costs of

providing services without incurring financial

difficulty or risking other undesirable consequences;

• Inter-Governmental funding opportunities will be

pursued for initiatives that are in line with Council

priorities, the approved budget, and the Long Term

Financial Plan;

• Non-recurring revenues shall be directed to onetime

uses and away from ongoing expenditures;

10

Initiatives Status Impact on Fiscal Governance Capital Budget Policy

• The City’s Capital Budget shall align with Council priorities

and the Long Term Financial Plan;

• Common Council will prioritize Capital Budget requests:

• Legally Mandated;

• Mitigate Risk for Organization

• Priority of Council (as reflected in LTFP)

• Positive Financial Impact (requires amendment to

LTFP supported by business case);

• Discretionary (requires amendment to LTFP

supported by business case)

• The Capital Budget Requests will be reviewed based on the

full life-cycle investment based on asset management best

practices;

• The Capital Budget will reflect the City’s goal to address the

infrastructure deficit by increasingly funding capital

reserves and Pay-As-You-Go;

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Initiatives Status Impact on Fiscal Governance

Debt Management

Policy

• Long term debt shall not be used as a strategy to fund operating budget shortfalls or to fund annual maintenance expenses;

• The borrowing term shall not exceed the life of the asset;

• The asset must have a life expectancy of at least 10 years;

• The City shall promote a balanced approach between debt

affordability, maintaining infrastructure and accommodating growth by:

• Utilizing this Policy in conjunction with FAS-001 Asset

Management Policy, FAS-005 Capital Budget Policy, and FAS-003 Reserves Policy;

• Debt will be structured to fairly distribute the costs over

time, taking into consideration inter-generational equity; • The City will seek to gradually increase pay-as-you-go as an

option for financing capital over time to reduce the debt pressures.

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Draft Approach Finance Committee March 13, 2018

Long Term Financial Plan: Public Engagement

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Engagement Objectives

• Public input on funding priorities in a using a balanced approach to inform long term strategic directions

• Educate the public on the realities of balancing revenues and expenditures

• Support service-based approach to long term financial decision making

• Best practice for financial planning

Just another input into the process!

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Engagement Components

Designed to ensure maximum accessibility and education

• Citizen Survey – statistically valid approach to understanding public priorities

• In-Person Events – opportunity to educate citizens and gather input on service delivery through discussion

• On-line Budget Simulator – broad scope input that focuses citizens on understanding impacts of allocating funds and decision making

Note: Only Citizen Survey can be limited to Saint John residents. Other tools will need ways to understand which community input is coming from.

15

Approach

• Integrated approach among engagement activities

• Focused on decision-making on service levels and funding allocations (high level)

• Structured to support the on-line tool

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Best Practice – On-line Tools

Citizen Budget Budget Allocator Budget Simulator

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http://ottawa.citizenbudget.com/

http://barriebudget2018.budgetallocator.com/#ba

http://mississaugabudget2015.budgetallocator.com/#ba

http://halifaxtax2015.budgetallocator.com/#ba

Structure – General Fund (Example) Growth &

Community Development

Public Safety

Transportation & Environment

Fire Services • Fire Rescue &

Suppression • Fire Prevention

Police Services • Law Enforcement • Crime Prevention • Public Order

Community Planning • Development

Support

Permitting & Inspection • Building Permits

By-law Enforcement • Vacant Dangerous

Buildings • Community

Standards

Arts & Culture • Community support

Road & Sidewalks • Condition • Winter maintenance

Storm water • Culvert, ditch and

catch basin maintenance

• Drainage projects

Transit • Routes

Solid Waste • Collection Parks • Maintenance

Recreation Facilities • Operation

Recreation Programs • Programming • Community support

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Next Steps

• Identification of service areas to be represented

• Demonstrations of potential on-line tools

• Development of templates for defining service levels and impacts

• Selection of on-line tool

• Completion of templates (first draft) by service areas

• Refinement of service levels and impacts

• Development of citizen survey instrument

• Planning of in-person events

• Execution of engagement plan

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Finance KPIs Reporting on Financial Health

20

Framework to Improve Financial Health

Sustainability: Ability to maintain services and debt ratios without increasing tax burden

Flexibility: Ability to change debt ratios and tax burden to address service needs and meet obligations

Vulnerability: Degree of dependence on sources of funding outside its influence 21

2017 Key Performance Indicator Summary

Status Legend: l Positive Trend l No Change l Negative Trend

Trend Legend: Increasing No Change Decreasing

Indicator Results Goal Trend

SUSTAINABILITY

Total General Fund Reserves per Capita l $116/capita Increase

Pay-As-You-Go as % of Operating Budget l 3.17% Increase Capital from Operating

General Operating Fund Reserves as % of Operating Budget

l 4.30% Increase

General Capital Reserve as a % of General Fund Infrastructure Deficit

l 0.5% Increase

FLEXIBILITY

General Fund Debt per Capita l $1,658 Decrease

Municipal Tax Assessment l 0.59% Increase

Debt Service Ratio l 10.40% Decrease

VULNERABILITY

Own Source Revenue l 8.59% Increase

Reliance on Provincial Operating Grants l 13.17% Decrease

Tax Burden per Capita l $1,788 Decrease

22

Total General Reserve Funds per Capita Metric: Outstanding General Fund Reserve Balance at Year End per Capita

2017 Forecasted Results $116 per capita Target Sustain funding

allocations to the reserve annually (i.e., continue to build reserve)

Trend Positive Trend –

increase of reserve by 42% since 2014

$49 $38

$65

$100

$16

$-

$20

$40

$60

$80

$100

$120

$140

2014 Actual 2015 Actual 2016 Actual 2017 Forecast

Total General Reserve Funds per Capita

General Capital Reserve

Operating Reserves

23

Pay As You Go Metric: Percentage of the Operating Budget that funds capital expenditures

2017 Forecast 3.17%

Target Increase Capital from

Operating

Trend Was dropping until

2016 and has started very slowly increasing

4.85%

4.19%

2.85% 3.17% 3.24%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

2014 Actual 2015 Actual 2016 Actual 2017 Forecast 2018 Budget

Pay-As-You-Go (General Fund Operating Expenses)

24

Reserves Metric: Reserves as a Percentage of General Operating Expenses

2017 Forecasted Results Operating 4.30%

Target Increase Reserves


increase of reserve over operating expenses by over 2%

2.18% 1.70%

2.91%

4.30%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%


General Reserves (General Fund Operating Expenses)

25

General Fund Debt per Capita Metric: Outstanding General Fund Debt Balance at Year End per Capita

2017 Forecasted Results $1,658

Target Decrease General

Fund Debt per Capita


decrease in debt per capita

$1,763 $1,745 $1,733

$1,658

$1,000

$1,100

$1,200

$1,300

$1,400

$1,500

$1,600

$1,700

$1,800

$1,900


General Fund Debt per Capita

26

Municipal Tax Base Assessment

Metric: Total municipal tax base assessment compared to previous years

$6

,62

4

$6

,59

2

$6

,62

9

$6

,73

1

$6

,77

0

$6

,79

7

-0.48% 0.56% 1.53% 0.59% 0.39%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

$-

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

2013 2014 2015 2016 2017 2018

Per

cen

t ch

ange

in a

sse

ssm

ent

Ass

essm

ent

(M

illio

ns)

Saint John Municipal Tax Assessment 2017 Budget 0.59% growth Target Improve Growth Trend 2018 results impacted

by the assessment freeze

27

Debt Service Ratio Metric: Percentage of the Operating Budget that funds Debt

2017 Budget Results 10.40%

Target Decrease in Debt

Service Ratio

Trend Little change from

2017 to 2018

9.34%

10.16% 10.44% 10.40% 10.63%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%


Debt Service Ratio

28

Own Source Revenue Metric: Percentage of the operating revenue comprised of own source revenue includes facility usage fees, building permits, development application fees, and other cost recoveries for services provided to others

2017 Budget 8.59%

Target Increase Own Source

Revenue

Trend Has been consistently

in the 8% range with slight increase in 2017 forecast but see a drop in 2018 budget

8.23% 7.97% 8.25%

8.59%

7.72%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%


Own Source Revenue (General Operating Revenue)

29

Reliance on Provincial Operating Grants Metric: The percentage of revenue that is from the Provincial Grants

By 2020 Budget 16.59%

Target Reduce dependence

on grants from the Province

Trend Negative Trending –

Dependency on Provincial Grants has increased since 2016

13.10% 13.83% 13.05% 13.17% 10.64%

10.37% 10.19%

3.02% 5.56% 6.40%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

2014Budget

2015Budget

2016Budget

2017Budget

2018Budget

2019Budget

2020Budget

Reliance on Provincial Operating Grants (General Operating Revenue)

New ProvincialAgreement

ProvincialFunding

30

Property Tax per Capita Metric: Average Property Tax per Capita

2017 Budget $1,788 Target Decrease property tax

per capita

Trend Negative Trending –

has been increasing since 2014

$1,741 $1,751

$1,778 $1,788 $1,795

$1,500

$1,550

$1,600

$1,650

$1,700

$1,750

$1,800

$1,850

2014 Actual 2015 Actual 2016 Actual 2017 Budget 2018 Budget

Property Tax per Capita

31

Title: Operating Budget

Subject: Operating Budget Category: Finance and Administrative Services

Policy No.: FAS-004 M&C Report No.:

Effective Date: TBD Next Review Date: TBD

Area(s) this policy applies to: Cross Corporate Office Responsible for review of this Policy: Finance and Administrative Services

Related Instruments: FAS-001 Asset Management Policy FAS-002 Investment Policy FAS-003 Reserves Policy FAS-005 Capital Budget Policy FAS-006 Debt Management Policy

Policy Sponsors: Commissioner of Finance and Administrative Services

Document Pages:

This document consists of 5 pages.

Revision History:

Date Created: TBD

Common Council Approval Date:

Contact: Finance and Administrative Services

Common Clerk's Annotation for Official Record

Date of Passage of Current Framework:_________________________

I certify that this Policy was adopted by Common Council as indicated

above.

________________________ ______________________

Common Clerk Date

32

http://ecity/sites/home/communications/Graphics/Forms/AllItems.aspx


TABLE OF CONTENTS

1. POLICY STATEMENT ..................................................................................................... . 2

2. DEFINITIONS ................................................................................................................... 2

3. PRINCIPLES AND STRATEGIES ........................................................................................ 2

4. AUTHORITY ..................................................................................................................... 3

5. USE OF NON-RECURRING REVENUES………………………………………………………………………….3

6. GRANTS………………………………………………………………………………………………………………………4

7. VARIANCE REPORTING………………………………………………………………………………………………..4

8. ROLES AND RESPONSIBILITIES ....................................................................................... 4

33

City of Saint John

Operating Budget (DRAFT)

2

1. POLICY STATEMENT 1.1 The purpose of this policy is to outline the financial principles governing the

funding of the City operating budget;

1.2 Operating budget planning shall comply with all relevant provisions of the Local Governance Act and all other applicable legislation;

1.3 The City’s objectives with respect to the Operating Budget Policy are as follows:

1.3.1 Strengthen Financial Sustainability by budgeting recurring expenditures with recurring revenues and allocating one time revenues to one time expenditures or reserves.

1.3.2 Reduce Financial Vulnerability by gradually decreasing reliance on sources of revenue outside its controls such as operating grants from other government sources.

2. DEFINITIONS Operating Budget – a Council approved plan containing the revenue and expenditure allocations required to provide City programs and services for the current fiscal year which must be aligned with a Council Approved Long Term Financial Plan; Structurally Balanced Budget – a budget for which recurring operating revenues are sufficient to fund recurring operating expenses; Non Recurring Revenues are revenues that the City cannot reasonably expect to receive on an ongoing basis. The source is most likely one-time if any of the followings applies:

Has a set ending date ranging between 12-36 months with the exception of intergovernmental funding agreements designed to improve long term sustainability;

Revenue spikes due to higher than normal transactional activity;

One time transactions, such as the sale of assets.

3. PRINCIPLES AND STRATEGIES 3.1 The City will utilize the following principles and strategies in making decisions

related to the operating budget: 3.1.1 Alignment with Strategy – the City’s budgeted operations shall be in line

with agreed upon Council priorities and the Long Term Financial Plan;

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City of Saint John


3

3.1.2 Affordability – the City must be able to bear the budgeted costs of

providing services without incurring financial difficulty or risking other undesirable consequences;

3.1.3 Innovation –implementation of operational efficiencies, continuous improvement initiatives, and new revenue generation strategies will be considered when planning the operating budget;

3.1.4 Sustainability – the operating budget will be produced with a long-term focus of achieving a structurally balanced budget; giving taxpayers a better representation of the link between financial resources and services that can be delivered over the long term.

3.1.5 Diversification – the City will seek to improve its mix of operating budget revenues to the extent feasible within the confines of the Local Governance Act, and other applicable legislation.

4. AUTHORITY 4.1 The operating budget establishes the spending authority for all Service Area

activities and initiatives.

4.2 Operating budgets, at the Service Area level, cannot be reallocated to compensate for existing over/under-expenditures without Council approval.

4.3 Service Area Commissioners are responsible for managing within their existing budget.

5. USE OF NON-RECURRING REVENUES 5.1 Non-recurring revenues shall be directed to onetime uses and away from funding

ongoing services. Examples of non-recurring revenues would include one-time sale of assets. Examples of acceptable uses would include funding capital expenditures that would otherwise be funded by debt, to fund the infrastructure deficit, or to build up reserves;

5.2 Short term revenue spikes should be treated in a similar way to non-recurring revenue.

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City of Saint John


4

6. GRANTS

6.1 Inter-Governmental funding opportunities will be pursued for initiatives that are in

line with Council priorities, the approved budget, and the Long Term Financial Plan;

6.2 Any opportunities falling outside the criteria in 6.1 will require Council approved adjustment to the budget and the Long Term Financial Plan and be supported by a business case.

7. VARIANCE REPORTING 7.1 The Finance Committee shall be informed on a timely basis on all significant

unfavourable financial matters and will receive, as a minimum, quarterly financial budget variance reports;

7.2 Service Area Commissioners are responsible to present a quarterly report

analyzing material variances and causes of such variances to the Finance Committee.

8. ROLES AND RESPONSIBILITIES 8.1 Council shall:

8.1.1 Approve the operating budget as recommended by the Finance Committee; 8.1.2 Establish priorities through the Long Term Financial Plan.

8.2 The Finance Committee shall:

8.2.1 Review the operating budget and make recommendations for Council

approval; 8.2.2 Ensure the operating budget is aligned with the Long Term Financial Plan.

8.3 The City Manager shall: 8.3.1 Direct, in co-operation with the Finance Commissioner and Senior

Leadership Team, the preparation and presentation of the operating budget

8.3.2 Exercise financial control over all corporate operations in conjunction with the Finance Commissioner to ensure compliance with the operating budget approved by Council.

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City of Saint John


5

8.4 The Finance Commissioner and Finance Team shall:

8.4.1 Prepare long range revenue and expenditure forecasts; 8.4.2 Review departmental budgets with individual departments; 8.4.3 Analyze and make recommendations on budget requests; 8.4.4 Review the consistency and alignment between budget requests and

overall budget goals; 8.4.5 Consolidate all budget requests and their impact into a package that clearly

communicates the City’s budget objectives, pressures, and linkage to the City’s Long Term Financial Plan.

37

Title: Capital Budget

Subject: Capital Budget Category: Finance and Administrative Services

Policy No;: FAS-005 M&C Report No



Related Instruments: FAS-001 Asset Management Policy FAS-003 Reserves Policy FAS-005 Operating Budget Policy


Document Pages:

This document consists of 4 pages

Revision History:

Date Created: TBD

Common Council Approval Date:



Date of Passage of Current Framework:_________________________


above:

________________________ ______________________

Common Clerk Date

38



TABLE OF CONTENTS

1. POLICY STATEMENT ........................................................................................................ 2

2. DEFINITIONS .................................................................................................................... 2

3. PRINCIPLES AND STRATEGIES ......................................................................................... 2

4. CAPITAL PRIORITIZATION…………………………………………………………………………………………….3

5. AUTHORITY...................................................................................................................... 3

6. ROLES AND RESPONSIBILITIES ........................................................................................ 4

39

City of Saint John

Capital Budget (DRAFT)

2

1. POLICY STATEMENT 1.1 This Policy applies to budgeting by the Municipality for capital funds;

1.2 The purpose of this policy is to outline the financial principles governing capital

funding decisions, while providing some flexibility to respond to evolving circumstances;

1.3 Capital budget shall be aligned with the Council approved Long Term Financial Plan;

1.4 Capital budget planning shall comply with all relevant provisions of the Local Governance Act and all other applicable legislation;

2. DEFINITIONS

Capital Budget – A plan of proposed capital expenditures to be incurred in the current year and over a period of subsequent future years (long-term) identifying each capital project and the method of financing; Lifecycle Cost - The total cost of an asset over its life cycle, including the initial purchase or construction cost, maintenance and operating costs, financing costs, and refurbishment costs; Affordability - Ability to pay for the debt servicing and life cycle costs of capital assets; The overall measure of affordability is the burden of debt servicing and life cycle costs compared to the City’s revenues; Asset Management – Process of developing, operating, maintaining, upgrading, and disposing of assets cost-effectively; Infrastructure deficit - Gap between the funding that is required and the funding that is available for maintaining, updating, or replacing existing and aging infrastructure before serious problems occur;

3. PRINCIPLES AND STRATEGIES

3.1 The City will utilize the following principles and strategies in making decisions

related to capital budget planning: 3.1.1 Alignment with Long Term Financial Plan – Capital planning shall reflect

the level of infrastructure investment required to achieve agreed service objectives;

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City of Saint John


3

3.1.2 Asset Management – The Capital Budget will consider the full life-cycle

cost approach to costing capital initiatives based on asset management best practices;

3.1.3 Sustainability - The Capital Budget will reflect the City’s goal to address the infrastructure deficit by gradually increasing capital reserves and Pay-As-You-Go funding;

4. CAPITAL PRIORTIZATION 4.1 Proposed Capital Budget Projects will be prioritized based on the following criteria:

4.1.1 Legally Mandated – must be completed due to legal or regulatory

requirements;

4.1.2 Organizational Risk – required for health and safety requirements, mitigate liability, or to mitigate sudden asset failure;

4.1.3 Priority of Council – As stipulated in the Long Term Financial Plan in accordance with Asset Management best practices and supported by Asset Management recommendations;

4.1.4 Positive Financial Impact – Capital request supported by a business case that demonstrates a positive financial impact for taxpayers as a result of tax base growth or reduction in operating expenses. Requires amendment to the Long Term Financial Plan;

4.1.5 Discretionary – New assets which aim to increase or enhance service levels to the residents and taxpayers as approved in the Long Term Capital Investment Plan and supported by a business case;

5. AUTHORITY

5.1 The capital budget approved by Council establishes the scope, funding and spending authority for each capital project listed in the capital budget document;

5.2 Council approval will be required for any adjustment to the Capital Budget or to the Long Term Financial Plan;

5.3 Service Area Commissioners may authorize additional gross expenditures through change orders in accordance with approval levels in the City’s procurement policy provided that:

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City of Saint John


4

5.3.1 This policy is otherwise complied with;

5.3.2 Funding is available to fund the over-expenditure, either from under-expenditures in other capital projects within the same Service Area or by deferral of other capital projects within the same Service Area;

6. ROLES AND RESPONSIBILITIES

6.1 Council shall:

6.2.1 Approve the capital budget as recommended by the Finance Committee;

6.2.2 Establish priorities through the Long Term Financial Plan;

6.3 The Finance Committee shall: 6.3.1 Review the capital budget and make recommendations for Council

approval;

6.3.2 Ensure the capital budget is aligned with Council priorities and the Long Term Financial Plan;

6.4 The City Manager shall:

6.4.1 Direct, in co-operation with the Finance Commissioner and Senior

Leadership Team, the preparation and presentation of the capital budget;

6.4.2 Exercise financial control over all corporate operations in conjunction with the Finance Commissioner to ensure compliance with the capital budget approved by Council;

6.5 The Finance Commissioner and Finance Team shall:

6.5.1 Analyze and make recommendations on capital budget requests;

6.5.2 Consolidate all capital budget requests and their impact into a package that

clearly communicates the City’s budget objectives, pressures, and linkage to the City’s Long Term Financial Plan;

42

Title: Debt Management

Subject: Debt Management Category: Finance and Administrative Services

Policy No.: FAS-006 M&C Report No.:



Related Instruments: FAS-001 Asset Management Policy FAS-003 Reserves Policy FAS-004 Operating Budget Policy FAS-005 Capital Budget Policy


Document Pages:

This document consists of 6 pages.

Revision History:

Date Created: TBD

Common Council Approval Date: TBD



Date of Passage of Current Framework: _________________________


above.

________________________ ______________________

Common Clerk Date

43



City of Saint John

Debt Management (DRAFT)

2

TABLE OF CONTENTS

1. POLICY STATEMENT ..................................................................................................... . 3

2. DEFINITIONS ................................................................................................................... 3

3. ACCEPTABLE PURPOSES FOR DEBT ............................................................................... 4

4. DEBT LIMITS ................................................................................................................... 4

5. DEBT ISSUANCE .............................................................................................................. 5

6. INTERNAL BORROWING ................................................................................................. 5

7. PAY AS YOU GO .............................................................................................................. 5

8. REPORTING ..................................................................................................................... 6

9. RESPONSIBILITIES .......................................................................................................... 6

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City of Saint John


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1. POLICY STATEMENT

1.1. The Debt Management Policy for the City of Saint John is established to ensure that all debt is issued both prudently and cost effectively. The City will use debt to meet infrastructure requirements while ensuring that future financial sustainability remains relatively unconstrained.

1.2. All City debt issuance and management procedures will comply with the following legislation where applicable:

Province of New Brunswick Local Governance Act

Province of New Brunswick Municipal Capital Borrowing Act

Province of New Brunswick Municipal Debentures Act

Province of New Brunswick Control of Municipalities Act

Province of New Brunswick Financial Corporation Act

2. DEFINITIONS

Sustainability – means meeting the needs of the present without

compromising the ability of future generations to meet their own needs;

Affordability – means the City’s ability to pay for debt servicing in relation to

the City’s revenues;

Long Term Debt – means debentures, lease-purchase contracts, loans and loan guarantees; Debt Servicing Cost – means the annual amount required for debt repayment, including principal, interest, and associated debt fees; Inter-Generational Equity – means distributing the costs associated with capital investments across the generations which will be enjoying the benefits of the

capital assets built today;

Internal Borrowing – means financing for capital purchases from reserve funds as permitted in FAS-003 Reserves Policy;

Pay-As-You Go Financing – means the use of operating funds for capital purchases as opposed to using debt;

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City of Saint John


4

3. ACCEPTABLE PURPOSES FOR DEBT

3.1. The City will issue long-term debt solely for the purpose of financing the projects approved in the Capital Budget;

3.2. Long term debt shall not be used to fund operating or maintenance costs or leveraged to balance operating budgets;

3.3. The borrowing term shall not exceed the life of the asset;

3.4. The asset must have a life expectancy of at least 10 years;

3.5. The City shall promote a balanced approach between debt affordability, maintaining infrastructure and accommodating growth by:

3.5.1. Utilizing this Policy in conjunction with the Asset Management Plan, FAS-005 Capital Budget Policy, and FAS-003 Reserves Policy;

3.5.2. Integrating debt issuance with the Capital Budgeting process to determine the necessity, priority, and viability of the capital project;

3.5.3. Considering the Long Term Financial Plan, and analyzing the tolerance or capacity to absorb and manage new debt given future priorities;

3.6. Debt will be structured to fairly distribute the costs over time, taking into consideration inter-generational equity (matching the cost of debt to those who benefit from the use of the capital)

4. DEBT LIMITS

4.1. The New Brunswick Local Governance Act stipulates that: 4.1.1. A local government shall not, in any one year, borrow for its current

operations any money in excess of the sum represented by 4% of the budget of that local government for that year or $15K, whichever is greater;

4.1.2. A local government shall not, in any one year, borrow for capital expenditures any money in excess of the sum represented by 2% of the assessed value of real property in that local government;

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City of Saint John


5

4.1.3. The total amount of money borrowed by a local government for capital

expenditures shall not exceed 6% of the assessed value of real property in the local government.

5. DEBT ISSUANCE

5.1. A resolution of Council is required for all new debt issues;

5.2. The debt issuance process generally follows the steps below: 5.2.1. Notice of motion: Council gives notice of intent to borrow after 30 days

from the day of Council resolution; 5.2.2. After expiration of 30 days, Council authorizes staff to issue and sell to the

New Brunswick Municipal Finance Corporation debentures at such terms and conditions recommended by the Corporation;

5.2.3. Application form filled out and submitted to the New Brunswick Municipal Finance Corporation;

5.2.4. New Brunswick Municipal Finance Corporation advises the City of the actual bond issue; and

5.2.5. Staff reports back to Council regarding terms of the issue, coupon rate, price, average yield and settlement date.

6. INTERNAL BORROWING

6.1. The City may use reserves as a source of funds for the internal financing of capital projects as approved by Council. Any borrowing from reserve funds shall comply with Policy FAS-003 Reserves Policy.

7. PAY-AS-YOU-GO

7.1. The City will seek to gradually increase pay-as-you-go as an option for financing capital over time. Factors which favor pay-as-you-go financing include: 7.1.1. Assets with a useful life that is less than 10 years – for example, IT

equipment and road maintenance; 7.1.2. Projects that can be completed in an acceptable time frame given the

available resources; 7.1.3. Situations where additional debt could adversely impact the City’s financial

health or as a component of a Debt Management Plan;

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City of Saint John


6

7.1.4. Situations where market conditions favour the use of cash rather than debt (for example, escalating interest rates)

8. REPORTING

8.1. The total debt outstanding, and total annual debt service payments will be reported in the annual consolidated financial Statements;

8.2. Long-term projections for outstanding debt will be provided through the annual budget process;

8.3. Long-term debt will be forecasted over the long term in a Debt Management Plan based on the Capital Investment Plan as part of the City’s Long-Term Financial Plan.

9. ROLES AND RESPONSIBILTIES

9.1 Council shall:

9.1.1 Approve the Debt Management Policy; 9.1.2 Approve new debt issues; and 9.1.3 Approve budgets sufficient to provide for the timely payment of principal

and interest on all debt.

9.2 Finance Committee shall: 9.2.1 Review borrowing requirements for alignment with the Long Term Financial

Plan; and 9.2.2 Recommend to Council the approval of new debt issues.

9.3 The Finance Commissioner shall:

9.3.1 Assume primary responsibility for the debt management process; 9.3.2 Determine the City’s available debt capacity and alignment with Long Term

Financial Plan; 9.3.3 Provide for the issuance of debt at appropriate intervals and in reasonable

amounts as required to fund approved capital expenditures; 9.3.4 Submit to Finance Committee and Council, all recommendations to issue

debt; and 9.3.5 Ensure compliance with the principles and mandatory requirements

contained in this policy.

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49

MARCH 13, 2018

2018 Revised General Operating Budget

50

• 2018 General Fund Operating Budget was approved by Council on December 11, 2017 (Total budget: $152,613,133);

• Council approved the Provincial Funding Agreement (New Deal) on Feb 12 (Additional Funding up to $22.8 Mil over 3 years; 2018 amount: $3,477,659);

• Considering the additional funding from the Province for 2018, Staff recommend a revised budget of $156,090,792 for Council approval;

• Budget adjustments were made to comply with the Provincial Funding Agreement requirements: Minimize impacts on frontline service levels.

Context

51

2018 Structural Deficit $6,055,711

Revenues 2018 Revised Budget

Property Taxes 121,319,088$

Provincial Grant 16,603,206$

Own Source Revenue 12,112,787$

150,035,081$

Expenses

Wages and Benefits 89,992,427$

Operating Expenses 36,806,513$

ABC Funding 12,582,272$

Fiscal Charges 16,709,579$

156,090,792$

Structural Deficit 6,055,711-$

Non Recurring Items:

Carry Over Surplus 1,338,515$

Financial Assistance 1,239,537$

New Deal 3,477,659$

(Deficit) 0$

52

Structural Deficit would grow up to $12.5 Mil by 2021

Budget Anticipated Deficit

2017 Approved 2018 Draft 2019 Forecast 2020 Forecast 2021 Forecast

Revenues

Property Taxes $120,853,074 $121,319,088 $122,532,279 $123,757,602 $124,995,178

Provincial Grant 20,225,932 16,603,206 16,603,206 16,603,206 $16,603,206

Own Source Revenue 12,525,989 12,112,787 12,103,805 12,164,324 $12,230,119

$153,604,995 $150,035,081 $151,239,290 $152,525,132 $153,828,503

Expenses

Wages and Benefits 88,843,678 89,992,427 93,182,466 95,427,850 $97,898,469

Operating Expenses 36,499,688 36,806,513 36,647,135 37,183,169 $37,358,294

ABC Funding 12,228,315 12,582,272 12,803,131 12,853,377 $13,355,969

Fiscal Charges 16,449,786 16,709,579 17,518,873 17,484,435 $17,745,227

154,021,467 156,090,792 160,151,605 162,948,831 166,357,959

Structural Deficit -$416,472 -$6,055,711 -$8,912,315 -$10,423,699 -$12,529,455

Non Recurring Items:

Carry Over Surplus $416,472 $1,338,515

Financial Assistance $1,239,537

New Deal $3,477,659 $8,912,315 $10,423,699

(Deficit) - $0 $0 $0 -$12,529,455

Structural Deficit Forecast

53

2018 Revised Expenditure Budget

Services

2018

Approved

Budget

2018 Revised

Budget VAR

Growth & Community Development Services 10,118,529 10,577,414 458,885

Fire Rescue and Suppression Service 22,600,765 23,718,678 1,117,913

Water Supply and Hydrants 2,300,000 2,300,000 0

Emergency Management Service 300,424 307,729 7,305

Police Services 24,502,293 25,689,293 1,187,000

Public Safety Communications 2,427,079 2,427,079 0

Street lighting 943,000 943,000 0

Transportation & Environment Service 42,025,858 43,720,502 1,694,644

Finance & Administrative Services 9,503,272 9,503,272 0

Corporate Services 8,465,297 8,581,357 116,060

Fiscal Charges 16,709,579 16,709,579 0

Capital from Operating 467,687 467,687 0

Restructuring Cost 1,239,537 -1,239,537

Other Compensation Costs 11,009,813 11,145,202 135,389

Total 152,613,133 156,090,792 3,477,659

54

Major Adjustments:

• Reinstate Growth Reserve fund: $350,000

• Reinstate Heritage Grants: $35,000 (total $80,000)

• Reinstate Fire Department’s budget: $1,117,913

• Reinstate the Police Commission’s budget: $1,187,000 (Revised budget approved by the Board of Police Commissioners)

• Reinstate funding for Transportation and Environment Services: $1,328,799

• Reinstate funding for Transit Commission: $365,845

• Reinstate HR’s casual cost: $22,000

• Increase Cultural Affairs’ budget: $21,787

• Increase IT’s budget $40,000 to accommodate an accelerated web site renewal effort

• Increase Common Clerk’s budget $25,000 for record management support

• Eliminate restructuring cost: $1,239,537.

2018 Budget Adjustments

55

2018 Establishment

City Employees 2017 Establishment Reduction 2018 Establishment

Management / Professional Staff 89 1 88

Non-Union 6 6

Inside Workers 118 6 112

Outside Workers 283 3 280

Firefighters 145 1 144

Total - City of Saint John 641 11 630

Saint John Police Commission

Management / Professional Staff 15 15

Inside Workers 45 1 44

Police Association 144 144

Total - Saint John Police Commission 204 1 203

TOTAL 845 12 833

56

Staff recommend that the Finance Committee approve the 2018 Establishment of Permanent Positions at 630 and the Revised 2018 General Operating Budget as presented and send the Budget to Council for Approval.

Recommendation

57

The City of Saint John

GENERAL OPERATING FUND

1

City of Saint John

2018 Budget

2018

Approved

Budget

2018

Proposed

Budget

REVENUES

Property taxes 121,319,088 121,319,088

Equalization & Unconditional Grant 16,603,206 16,603,206

Financial Assistance 1,239,537 4,717,196

Surplus 2nd previous year 1,338,515 1,338,515

Growth & Community Development Services 2,503,571 2,503,571

Public Safety Services 1,887,022 1,887,022

Transportation & Environment Services 3,982,308 3,982,308

Finance & Administrative Services 3,654,886 3,654,886

Corporate Services 85,000 85,000

TOTAL REVENUES 152,613,133 156,090,792

EXPENDITURES

Growth & Community Development Services 10,118,529 10,577,414

Public Safety Services 50,805,207 55,385,779

Transportation & Environment Services 42,025,858 43,720,502

Finance & Administrative Services 9,503,272 9,503,272

Corporate Services 8,465,297 8,581,357

Other Charges 31,694,970 28,322,468

TOTAL EXPENDITURES 152,613,133 156,090,792

General Fund Surplus (Deficit)

58

Proposed

Water and Sewer By-Law

Amendment

Finance Committee – March 13, 2018

59

Content

1. Proposed Amendment a. Definition of Commissioner

b. Equity and sections 47(3) and 5(2)

c. Repeal of Appeals Committee provision

d. Enforcement (i) New offence re turning valves back on

(ii) Increase of fine and voluntary fine payment scheme

e. Increase of cost to test meter

2. Recommendation

2 60

1. Proposed Amendment a. Definition of commissioner

• By-law currently defines Commissioner as Chief City Engineer

• For years, same person held both designations

• Corporate structure changed

• Position responsible for the W&S By-Law is now Commissioner of Water

• Amendment changes definition to reflect current corporate structure

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1. Proposed Amendment b. Equity and sections 47(3) and 5(2)

• Current Section 47(3) of By-law :

“Whenever the water has been turned off from any premises for six consecutive months, and the building is vacant and unused for domestic or commercial purposes, no further bills for water and sewerage services shall be rendered to the owner for the building for any monthly or bi-monthly period after the expiration of this six-month period for as long as the building remains vacant and unused or until the water is turned on again, except for the base charge for metered service, if any.”

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• The current practice under 47(3):

charge full water rate to customer for that 6 month period while water is disconnected; and

halt all charges to customers after the water has been

turned off for a period of six months, provided the building has been vacant and unused for domestic or commercial purposes.

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• Practice of charging full rate to customers whose service has been disconnected does not comply with “user-charge” principle of utility rate in Local Governance Act

• Legal advice:

• No authority for this practice

• Practice should end

6 64


• Practice of not charging ANY rate after 6 months of disconnection fails to achieve fairness and equity

• Such a practice does not allocate water costs among rate payers equitably – a Council Priority

• There is a cost to having service available to a building; and that cost must be recovered (more equitable if it is recovered from the property owner)

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• Province recognized the need to recover this cost in Local Governance Act (LGA) (and previously in the Municipalities Act)

Providing utilities the ability to meet their obligations to

produce annually balanced budgets

• LGA authorizes a municipal utility to make a charge to the owner of a building standing on land by which a service line runs, if that owner choses not to connect to the service

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• Under this authority, City enacted section 5(2) in current by-law which, in simple terms, states

– An owner who choses not to connect to the service shall pay a rate equal to what the water or sewer service charge (or both) would be if the owner had connected to the service.

9 67


Proposed amendment to improve allocation of costs:

Repeals section 47(3)

Introduces a new provision which ensures that all customers

whose water and/or sewer services have been disconnected

or whose buildings are vacant and unused or made uninhabitable because of fire

pay a water/sewer service charge, which represents the cost of having the service available

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11

Recurring Revenue Estimate • Estimate

Approximately 177 properties

$480.30/property

• Total est. recurring revenue approx.= $85k/year

• Potential for higher delinquency rate; particularly if building slated for demo

• Utility should still collect unless property goes for tax sale

• Additional revenue included in 2018 budget

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1. Proposed Amendment c. Repeal of Appeals Committee provision

• Appeals Committee Section 48

Mandate - to “relieve the owner of any property either in whole or in part, from the payment of any water or sewer service rate imposed under” the by-law if it was established that such owner was “in indigent circumstances”

• Creation and mandate of this committee was legally reviewed

Conclusion: No authority in the legislation to create this committee to give it the stated mandate

12 70

1. Proposed Amendment c. Repeal of Appeals Committee provision

• Existence and mandate of Appeals Committee goes against the “user-charge” principle of utility rates in legislation

• Committee disbanded upon receipt of legal opinion (years ago)

• Section 48 of by-law never repealed

• Proposed amendment repeals Section 48, and removes a practice that is not within our legal authority

13 71

1. Proposed Amendment d. Enforcement

• There have been some instances of an owner turning on their water valve themselves after SJ Water has turned it off

• This poses operational and other concerns

• Proposed amendment makes it an offence for an owner to turn back on the water valve that was turned off by SJ Water

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1. Proposed Amendment d. Enforcement

• Current maximum fine is $200

• No deterrence

• Proposed amendment increases fine to $2,100 (maximum city can impose)

• Proposed amendment also creates option for voluntary payment of fine - $1,500 avoids prosecution

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1. Proposed Amendment e. Increase of cost to test meter

• Current By-law - Cost of $25 to have water meter tested

• $25 far from covers the cost of the utility to offer this service

• Actual cost to utility for this service is $225 • Remove and reinstall new meter • Ship meter to have tested and return • Cost of testing the meter • Reinstall water meter after testing

• Proposed amendment changes cost to have water meter tested to reflect actual cost to the utility

• Note: If meter is found to be outside of required tolerances the cost is reimbursed

16 74

2. Recommendation

That the Finance Committee recommend that Common Council give First and Second reading to the amendment to the Water and Sewerage By-law, By-law No. M-16, outlined in the report to the Finance Committee dated March 6, 2018.

17 75

Questions?

18 76

FINANCE COMMITTEE REPORT

Report Date March 6, 2018

Meeting Date March 13, 2018

Chairman Councillor Merrithew and Members of the Finance Committee. SUBJECT: PROPOSED WATER & SEWER BY-LAW AMENDMENT OPEN OR CLOSED SESSION This matter is to be discussed in open session of Finance Committee. AUTHORIZATION

Primary Author Commissioner/Dept. Head City Manager

J. Brent McGovern and Melanie Tompkins

J. Brent McGovern Jeff Trail

RECOMMENDATION That the Finance Committee recommend that Common Council give First and Second reading to the amendment to the Water and Sewerage By-law, By-law No. M-16, attached to this report dated March 6, 2018. EXECUTIVE SUMMARY The proposed amendment to the Water and Sewerage By-law encompasses, amongst other things, housekeeping items, such as changes to the definition of Commissioner to reflect the current corporate governance, the repeal of a provision that was creating inequity and was not within the city’s authority and the creation of new provisions aimed at improving the allocation of water costs among ratepayers – a Council Priority. The Amendment is also intended to improve By-law enforcement, through the creation of a new offence and the increase of the fine for violations of the by-law. The purpose of this report is to submit for the Committee’s consideration the above described amendment to the Water and Sewerage By-law, and to request that the Committee recommend to Council that it give First and Second reading to the said amendment. PREVIOUS RESOLUTION N/A

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STRATEGIC ALIGNMENT This report aligns with Council’s Priority for Fiscal Responsibility, specifically as it relates to “investigating options to allocate water costs among ratepayers”. REPORT BACKGROUND (CURRENT AND PAST PRACTICE) Presently, subsection 47(3) of the Water and Sewerage By-law states:

“47(3) Whenever the water has been turned off from any premises for six consecutive months, and the building is vacant and unused for domestic or commercial purposes, no further bills for water and sewerage services shall be rendered to the owner for the building for any monthly or bi-monthly period after the expiration of this six-month period for as long as the building remains vacant and unused or until the water is turned on again, except for the base charge for metered service, if any.”

The practice has been to halt any charges to customers after the water has been turned off for a period of six months, provided the building has been vacant and unused for domestic or commercial purposes. REASONS TO AMEND THE BY-LAW After researching the reasoning behind Section 47(3) of the By-law, it was identified that it was intended to serve as a disincentive for “snow birds”, those customers who travel south in the winter months, who may wish to terminate their water and sewerage services for the period during which they are away from their home. However, the practice of charging the full flat rate amount for water and sewerage services to a customer for a period of six months after the service has been disconnected, does not align with the user-charge principle of utility rates under the Local Governance Act. Legal advice was received in the past that there is no authority to support such an approach and that the practice should be brought to an end. Similarly the practice of not charging any water and sewerage rates to a customer after a six consecutive month period of disconnection, as long as the building remains vacant and unused, also lacks fairness and equity as it does not fully allocate water costs among ratepayers. In other words, there is a cost to having the service to a building, which is not being recovered once the rates stop being collected.

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The Province recognized the need for a utility, if it is to produce an annually balanced budget, to recover the cost of having services available to buildings on lands by which a service runs. In this respect, the province enacted a provision in the Local Governance Act (and previously in the Municipalities Act) which gives authority to a municipal utility to make a charge to the owner of a building standing on lands by which a service runs, if that owner refuses to connect to the service. Under this authority, the City introduced Subsection 5(2) to the Water and Sewerage By-Law some time ago, which aims to allocate water costs among ratepayers. In the simplest of terms, section 5(2) states that for homes that are not connected to the water system or sewer system, the owner is to pay a rate equal to what the water or sewer service charge (or both) would be if the owner had connected to the service. To bring about fairness and equity and to more appropriately allocate water and sewer costs among ratepayers, the attached amendment repeals subsection 47(3) and introduces a new section 48 which ensures that all water and sewer customers whose water and/or sewer services have been disconnected, or owners whose buildings are vacant and unused or made uninhabitable because of fire, a basic water/sewer service charge, which represents the cost of having the service available, but does not include the water consumption portion of the rate. OTHER Years ago, Council established an Appeals Committee under section 48 of the By-Law, whose mandate was, pursuant to subsection 48(4) of the by-law, to “relieve the owner of any property either in whole or in part, from the payment of any water or sewer service rate imposed under” the by-law if it was established that such owner was “in indigent circumstances”. The creation of this Committee and its mandate were legally reviewed, and the City Solicitor concluded that there was no authority in the then Municipalities Act to create such a Committee and give it the stated mandate. This was so because the very existence of the Committee and its mandate went against the user-charge principle clearly articulated in the act. Following this legal advice, the Committee was disbanded, but section 48 of the By-Law was never actually repealed. The attached amendment repeals section 48, and replaces it with a new section 48, which addresses the equity amongst rate payers described earlier in this report. The attached amendment also creates a new offense for turning a valve back on when Saint John Water has turned it off. The amendment also increases the fine for violating the by-law and provides for a voluntary fine payment scheme, whereby if an owner charged under the by-law makes a payment of a smaller amount ($1,500), he/she is not liable to prosecution. If the owner does not

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make use of the voluntary fine payment opportunity, and if he/she is found guilty of an offence under the by-law, the fine amount is $600 higher ($2,100). The attached amendment also increases the cost stipulated in the by-law for testing water meters, to reflect the actual cost to the utility to provide this service, and to ensure that the utility is able to produce an annually balanced budget, as mandated in the Local Governance Act. Finally, the amendment changes the definition of “Commissioner” to reflect the current corporate governance structure, such that the Commissioner is no longer the Chief City Engineer, but rather the “Commissioner of Saint John Water”. COMMUNICATION Letters will be sent to the owners of properties that have been vacant and unused for domestic or commercial purposes to advise them of the by-law change in advance of issuing invoices. There are approximately 177 properties that would be impacted by this change. SERVICE AND FINANCIAL OUTCOMES

In the 2018 Budget $85k was included as additional revenue due to anticipated By-law change. The $85k additional revenue was forecasted as a result of an inventory of approximately 177 properties that would be impacted by the By-law changes. Assuming that the 177 properties generate an approximate revenue of $480.30/property results in an additional $85,013.10 in revenue. However, it should be noted that there could be a higher than typical delinquency rate, particularly if the buildings are slated for demolition. While the delinquency rate could be higher than typical, the Utility should continue to still collect on the outstanding balance with the exception of cases where a property is auctioned for property tax sale. The number of water meters tested annually is approximately 7 and therefore the total increase in revenue associated with the increased water meter testing fee is approximately $1,400 per year. INPUT FROM OTHER SERVICE AREAS AND STAKEHOLDERS Both the Finance and Legal Departments were involved in the development of the by-law amendment and the amendment itself was drafted by legal. Growth and Community Development were also consulted as well as communications.

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ATTACHMENTS BY-LAW NO. M-16 A LAW TO AMEND A BY-LAW RESPECTING WATER AND SEWERAGE

81

BY-LAW NO. M-16 A LAW TO AMEND A BY-LAW

RESPECTING WATER AND SEWERAGE

ARRÊTÉ NO M-16 ARRÊTÉ MODIFIANT L’ARRÊTÉ

CONCERNANT LE RÉSEAU D’EAU ET D’ÉGOUTS

Be it enacted by the Common Council of

The City of Saint John as follows:

Lors d’une réunion du conseil municipal,

The City of Saint John a décrété ce qui suit :

A By-law of The City of Saint John

entitled "A By-law Respecting Water and

Sewerage", enacted on the 7th day of June, A.D.

2004, is hereby amended as follows:

1. 1. Section 1 is amended by repealing the definition

of “Commissioner” and replacing it with the

following:

2.

3. “Commissioner means the Commissioner of Saint

John Water or any person authorized by him/her

to act on his/her behalf. (commissaire)”

2. Subsection 34(1) is amended by deleting

“$25.00” and replacing it with “$225.00”.

4.

5. 3. Section 46 is amended by adding the following:

“46(3) A customer whose water service has been

discontinued pursuant to subsection 46(1), section

42, subsection 44(4) or for any other reason, shall

not operate city valves or take any other action in

relation to the City’s water system to reinstate the

water service.”

6.

7.

8. 4. Subsection 47(3) is repealed.

9.

10. 5. Section 48 is repealed and replaced with the

following:

“48(1) Where, in the case of metered customers,

(a) the water service has been discontinued

pursuant to section 42, subsection 44(4) or

subsection 46(1) for a period of at least 72

hours, or

(b) the water has been turned off at the request

of the owner for a period of at least 72

Par les présentes, l’arrêté de The City of

Saint John intitulé « Arrêté concernant les réseaux

d’eau et d’égouts », décrété le 7 juin 2004, est

modifié comme suit:

1. L’article 1 est modifié par l’abrogation de la

definition de “commissaire” et son remplacement

par ce qui suit:

“Commissaire” Commissaire de Saint John Water

ou toute personne autorisée par celui/celle-ci à agir

en son nom. (Commissioner)”

2. Le paragraphe 34(1) est modifié par la

suppression de “25,00$” et son remplacement par

“225,00$”.

3. L’article 46 est modifié par l’adjonction de ce

qui suit:

“46(3) Un abonné dont le service d’eau a été

interrompu en vertu du paragraphe 46(1), de

l’article 42, du paragraphe 44(4) ou pour toute

autre raison, n’opérera pas les valves d’eau de la

ville ni ne fera tout autre chose envers le système

d’eau de la ville afin de rétablir le service d’eau.

4. Le paragraphe 47(3) est abrogé.

5. L’article 48 est abrogé et remplacé par ce qui

suit:

“48(1) Lorsque, en ce qui a trait aux usagers munis

d’un compteur,

(a) le service d’eau a été interrompu en vertu

de l’article 42, du paragraph 44(4) ou du

paragraphe 46(1) pour une période

minimale de 72 hours, ou

(b) l’alimentation en eau a été interrompue à la

82

hours, or

(c) a serviced building is vacant and unused

for domestic, commercial or industrial

purposes; or

(d) fire has made a serviced building

uninhabitable,

the owner shall, upon the expiry of the 72 hour

period described in paragraphs (a) or (b) or upon

the building becoming vacant or uninhabitable, pay

a monthly water rate equal to the water service

charge based on the size of the appropriate meter,

as set out in Schedule “B”.

48(2) Where, in the case of flat rate customers,

(a) the water service has been discontinued

pursuant to section 42, subsection 44(4) or

subsection 46(1) for a period of at least 72

hours, or

(b) the water has been turned off at the request

of the owner for a period of at least 72

hours, or

(c) a serviced building is vacant and unused


purposes; or

(d) fire has made a serviced building

uninhabitable,


period described in paragraphs (a) or (b) or upon

the building becoming vacant or uninhabitable, pay

a monthly water rate equal to what the water

service charge would be if the flat rate customer

was metered, based on the size of the appropriate

meter, as set out in Schedule “B”.

48(3) Where,

(a) the sewer service has been discontinued

demande de l’usager pour une période

minimale de 72 heures, ou

(c) le bâtiment recevant l’alimentation en eau

est demeuré vacant et non-utilisé à des fins

domestiques, commerciales ou

industrielles, ou

(d) le bâtiment est inhabitable en raison d’un

feu,

le propriétaire doit, dès l’expiration de la période

de 72 heures décrite aux alinéas (a) ou (b) ou dès

que le bâtiment est vacant ou inhabitable, payer des

frais mensuels équivalant au tarif des services

d’eau basé sur la dimension du compteur approprié,

tel qu’énoncé à l’annexe “B”.

48(2) Lorsque, en ce qui a trait aux usagers à tarif

forfétaire,

(a) le service d’eau a été interrompu en vertu

de l’article 42, du paragraphe 44(4) ou du

paragraphe 46(1) pour une période


(b) l’alimentation en eau a été interrompue à la

demande de l’usager pour une période


(c) le bâtiment recevant l’alimentation en eau

est demeuré vacant et non-utilisé à des fins

domestiques, commerciales our

industrielles, ou

(d) le bâtiment est inhabitable en raison d’un

feu,


de 72 heures décrite aux alinéas (a) ou (b) ou dès

que le bâtiment est vacant ou inhabitable, payer des

frais mensuels équivalant au tarif des services

d’eau basé sur la dimension du compteur approprié

que l’usager paierait s’il était muni d’un compteur,

tel qu’énoncé à l’annexe “B”.

48(3) Lorsque,

(a) le service d’égouts a été interrompu en

83

pursuant to section 42 or section 46(1) for a

period of at least 72 hours, or

(b) a serviced building is vacant and unused


purposes; or

(c) fire has made a serviced building

uninhabitable,


period described at paragraph (a) or upon the

building becoming vacant or uninhabitable, pay a

monthly sewer rate equal to the applicable water

service charge in paragraph (1) or (2), multiplied

by the percentage set out in Schedule C””;

vertu de l’article 42 ou du paragraphe 46(1)

pour une période minimale de 72 heures,

ou

(b) le bâtiment recevant le service d’égouts est

demeuré vacant et non-utilisé à des fins

domestiques, commerciales ou

industrielles, ou

(c) le bâtiment est inhabitable en raison d’un

feu,


de 72 heures décrite à l’alinéa (a) ou dès que le

bâtiment est vacant ou inhabitable, payer des frais

d’égouts mensuels équivalant au tarif des services

d’eau énoncé au paragraphes (1) ou (2), multiplié

par le pourcentage identifié à l’annexe “C””.

7. Section 50 is repealed and replaced with the

following:

“50(1) A person who violates any provision of this

by-law is liable upon conviction to a fine of

$2,100.00.

50(2) A person who violates any provision of this

by-law may make a voluntary payment of a fine of

$1,500.00 at the Payment Center, City Hall, 15

Market Square, Saint John, NB, Monday to Friday

between the hours of 8:30 am and 4:30 pm.

50(3) A person who violates a provision of this by-

law and makes a voluntary payment pursuant to

paragraph (2) is not liable to be prosecuted for said

violation. ”

7. L’article 50 est abrogé et remplacé par ce qui

suit :

« 50(1) Quiconque contrevient à une disposition

du présent arrêté commet une infraction et est

passible, sur déclaration de culpabilité, d’une

amende de 2100,00$.

50(2) Quiconque contrevient à une disposition du

présent arrêté peut acquitter volontairement une

amende de 1500,00$ au bureau de perception à

l’Hôtel de ville, au 15 Market Square, Saint John,

N.-B., du lundi au vendredi, de 8h30 à 16h30.

50(3) Quiconque contrevient à une disposition du

présent arrêté et acquitte volontairement l’amende

tel que prévu au paragraphe (2) n’est passible

d’aucune poursuite à cet égard. »

84

IN WITNESS WHEREOF The City of Saint John

has caused the Corporate Common Seal of the said

City to be affixed to this by-law the day

of , A.D. 2018 signed by:

EN FOI DE QUOI, The City of Saint John a fait

apposer son sceau municipal sur le présent arrêté

le 2018, avec les signatures

suivantes :

_______________________________________

Mayor /Maire

______________________________________

Common Clerk/greffier communal

First Reading -

Second Reading -

Third Reading -

Première lecture - Deuxième lecture - Troisième lecture -

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Documents

City of Saint John Finance Committee - Open …...2018/03/13 · • The City shall promote a balanced approach between debt affordability, maintaining infrastructure and accommodating