AMENDED AGENDA. Financial Sustainability & Audit Meeting No. 6. June 14, 2018 at 1:30 p.m. Council Chambers, City Hall

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1 AMENDED AGENDA Financial Sustainability & Audit Meeting No. 6 June 14, 2018 at 1:30 p.m. Council Chambers, City Hall Page A. CALL TO ORDER - Mayor Simpson [CHAIR] B. APPROVAL OF AGENDA: 1) ADD: F.4) Painting Project; and G.1) Federation of Canadian Municipalities Invoice [Addenda] C. ADOPTION OF REGULAR MINUTES: 2-3 1) Minutes of May 30, 2018 D. ACTIONS / OLD BUSINESS: 4 1) Action Summary E. STAFF REPORT(S): 5-7 1) FSAC Wrap-up Report - Director Bolton F. NEW BUSINESS: 1) Finance Department Update 2) Spending Issues (Overage) 8 3) CAO / CFO Expense Reports: City Manager Johnson 4) Painting Project [Addenda] G. CORRESPONDENCE: 9 1) Federation of Canadian Municipalities Invoice [Addenda] H. NEXT MEETING Not required I. MOVE TO SPECIAL CLOSED J. RELEASE ITEM(S) FROM SPECIAL CLOSED TO SPECIAL OPEN K. ADJOURN SPECIAL CLOSED AND RESUME SPECIAL OPEN L. ADJOURNMENT: Page 1 of 9

2 MEETING NO. 5 A Municipal Council Standing Committee - FINANCIAL SUSTAINABILITY & AUDIT Meeting was held on the 30th day of May, 2018 commencing at 1:30 p.m. at Council Chambers, City Hall, 410 Kinchant Street. Present: Committee Members: Mayor Bob Simpson [CHAIR], Councillors John Brisco, Ed Coleman [via teleconference] Staff: City Manager Byron Johnson, Deputy City Manager/Director Finance and Corporate Services Kari Bolton Guest(s): Director Public Works Operations Matt Thomas Gallery: None A. CALL TO ORDER - MAYOR SIMPSON [CHAIR] Mayor Simpson called the meeting to order at 1:30 p.m. B. APPROVAL OF AGENDA: MOVED Councillor Brisco, Seconded Mayor Simpson and resolved: THAT the Financial Sustainability & Audit Committee approve the May 30, 2018 with the following amendment: Addenda: G.1) May 20, Quesnel Shiraoi Twinning Society - Financial request CARRIED C. ADOPTION OF REGULAR MINUTES: C.1) Minutes of March 28, 2018 C.2) Minutes of April 17, MOVED Councillor Brisco, Seconded Mayor Simpson and resolved: THAT the Financial Sustainability & Audit Committee adopt the regular minutes of March 28, 2018 and April 17, 2018 as presented. CARRIED D. ACTIONS / OLD BUSINESS: D.1) Action Summary Reviewed and revised. E. STAFF REPORT(S): None F. NEW BUSINESS: F.1) Finance Department Update Busy with Property Tax Notices F.2) F.3) Spending Issues (Overage) Nothing at this time Pin Policy Review Committee discussed whether or not Quesnel, as a location trying to attract tournaments/conventions etc., should have promotional items for hosting gifts. The committee asked staff to research practices of other hosting communities and related policies. Current pin policy [10 free per large group] remains in effect. Minutes of May 30, 2018 Page 2 of 9

3 Meeting No. 5 Financial Sustainability & Audit Committee 30 May, 2018 F.4) Action: Bring forward staff report on hosting swag at budget time; September 2018 Landfill / Recycling RFP - Discussion The City has issued a Request for Proposal for a Landfill/Recycling Strategic Review. A comprehensive review of the landfill and recycling operations including the City s options for landfilling in the future, whether the City s landfill meets the new landfill criteria, traffic flow, zero waste initiatives like composting and recycling in the future when the City s current contract expires. The 2018 budget had $50,000 in gas tax funds set aside for this project. Staff requested that amount be increased to $102,000 based on the request for proposals received MOVED Councillor Brisco, Seconded Mayor Simpson and resolved: THAT the Financial Sustainability and Audit Committee recommends to Council to increase the budget for the Solid Waste Review from $50,000 to $102,000 with the additional funds coming from the Gas Tax Reserve. CARRIED F.5) F.6) Placemaking and Wayfinding project budget - Discussion For information only regarding the sign project. A full budget will be coming to a future FSAC meeting for discussion. Plan B Financial Plan for Public Works - Discussion This was a discussion of the alternative plan if the referendum for the public works facility fails in October. If the loan is not approved the intent would be to save the funds for the new public works facility over 10 years as the current location needs to be replaced. G. CORRESPONDENCE: G.1) May 20, Quesnel Shiraoi Twinning Society - Financial request Requesting the City host dinner and gifts for delegates coming in July. The City does have $2,000 budgeted for this. H. NEXT MEETING(S) June 14, 2018 June 28, Cancelled September 6, 2018 Not required I. MOVE TO SPECIAL CLOSED J. RELEASE ITEM(S) FROM SPECIAL CLOSED TO SPECIAL OPEN K. ADJOURN SPECIAL CLOSED AND RESUME SPECIAL OPEN L. ADJOURNMENT: With there being no further business to discuss, the Financial Sustainability & Audit Committee meeting ended at 2:38 p.m. CERTIFIED CORRECT Mayor Bob Simpson [CHAIR] Minutes of May 30, 2018 Page 3 of 9

4 Action Summary Page 4 of 9 Financial Sustainability & Audit Committee Action Tracking Summary 2018 Date # Responsible Action Status/ Complete 2016 NOV K.Bolton [M.Thomas] 2018 Fleet review Develop Terms of Reference for a fleet review to determine the best cycle period for our equipment and types of equipment Report on yearly investments Director Bolton f/u with M.Thomas JAN K.Bolton Business Licenses for Nightclubs/Bars. Rate for licensed facilities PabCom Jan 23 Referred back to FSAC MAY FUTURE AGENDAS Wrap up meeting with Directors; Council invitation Done; June 14/18 Asset Management grant details 05/30/18 - Bring forward staff report on hosting swag at budget time September 2018

5 FSAC: Report Date: June 6, 2018 Meeting Date: June 14, 2018 To: From: Subject: Financial Sustainability and Audit Committee Director of Corporate and Financial Services FSAC Wrap-up Purpose The purpose of this report is to provide a summary of some of the achievements made by the current Council in regards to the Financial Sustainability of the Corporation, to make some recommendations to future councils and to note some of the upcoming financial challenges. Summary During this term of Council the following achievements regarding financial sustainability were achieved. A tax framework was implemented for the whole term which increased the amount of funds going to the Capital Reinvestment Reserve, reduced reliance on industry taxation by holding the amounts collected from those classes at 2015 levels and looked for various savings to the operating budget. Utility fees were increased bringing the sewer fund to a sustainable level for the foreseeable future (only requiring increases for inflation). The water fund still requires ongoing increases and has been assisted by grants such as the Pinecrest Reservoir grant received in 2017 and the City will continue to look for grants for Water Projects. An Asset Management Policy was adopted to ensure that asset management remains a focus in the future. Recommendation THAT the Financial Sustainability and Audit Committee receive this report for information. Background POTENTIAL STRATEGIES Tax Framework for whole term Setting a tax framework for the whole term gives focus to Council s strategic direction for the financial sustainability of the corporation. It makes it easier to communicate to the public the direction expected over the next four years. The challenge is very little time between arriving as a new Council and having to put through the first budget. Capital Planning More work is required to ensure that the capital planning is more robust in outer years so that the five year capital plan gives a true picture of the funding required for projects so that sources of funds can be determined. Urban Systems completed the last capital reinvestment program update in 2014 and it is recommended that this be updated ever five years with the next review in Commercial Tax Rates Commercial tax rates are now more than the average in the province (14.39 vs in 2017). The challenge with trying to rebalance commercial tax rates is that the work to reduce major industry and light industry rates could be reversed unless the burden is all shifted to residential taxation. Residential taxation is now in the 3 rd quartile of the province. FSAC Wrap-up Report - Director Bolton Page 5 of 9 Page 1 of 3

6 Branding The City needs to continue to implement its brand and ensure that branding is considered in both the operational and capital budgets in the future. This will included continued investments in amenities, signage, programs and services that enable the City to achieve the brand promises. Grant Funding It is essential that the City remains aggressive in obtaining grants and ensuring that there are shove ready projects available for grant funding. It is imperative that the City take advantage of major infrastructure grant funding available. Funding Equity It is important that the City continue to seek equitable funding on regional services and seek funding from the province for downloaded services. This includes costs such as the RCMP, Victim Services and CWPP. INFRASTRUCTURE RESERVES Sewer the Sewer fund is at a sustainable level for the foreseeable future. Staff recommends regular increases in the future to cover inflation. Water there is still a significant infrastructure debt in water. Staff recommends continuing the 5% per year rate increases and active work pursing grants for water projects. Roads/Sidewalks The increases to the Capital Reinvestment Reserve have enabled there to be funds to complete road and sidewalk work. No increases to this reserve are recommended at this time. Equipment Currently just over $318,000 is put aside yearly for equipment capital replacements. This will be a challenging area as the City s equipment is aging and significant funds will be required for replacements of large equipment in the next few years. Alternatives include using the MFA financing options for some major equipment purchases but even that will require more funding in the reserve. A fleet services review RFP has been issued which will include a right size analysis, life cycle analysis, and ten year capital plan to give input into the next budget. Buildings There is no reserve for buildings (besides the public works relocation reserve) so maintenance and capital projects tend to be delayed. This is an area that needs to be worked on. City Hall and Fire Hall #1 are two buildings that have had delayed maintenance and will need to be reviewed. Landfill Significant changes are likely needed to the landfill/recycling that could mean significant costs. A consultant is being hired to review the options to expand the landfill or look at alternatives such as Gibraltar, ensure the landfill is in compliance with the new landfill criteria, and improve the layout and recycling options. This review will include cost estimates of the various projects that will be required. Landfill Closure Liability Each year the landfill closure liability grows at a rate higher than the funds the City is putting aside each year for this eventual cost. At the end of 2017, the liability was just over $2.0 million, the reserve was $1.35 million. The consultant reviewing the landfill will also review the landfill closure liability to give the City an updated estimate of what funds should be saved for the eventual closure of the landfill. WQLS Infrastructure Over the past few years the City with grants has invested substantial amount of dollars into infrastructure in the WQLS area. At this point there is no reserve for the replacement of those drainage assets when required. Airport - The City has currently budgeted that the airport capital/surplus be used to fund the airport capital projects for the next five years. The City will need to determine how to rebuild the airport capital reserve. FSAC Wrap-up Report - Director Bolton Page 6 of 9 Page 2 of 3

7 OTHER RESERVES Gas Tax The City has taken advantage of the build up of Gas Tax Reserves over the past few years to take on some major projects including the roads in west Quesnel and several major park upgrades. These funds are now down to the amount received each year just under $500,000. Tax Stabilization Reserve There is still a significant outstanding assessment appeal and a new industrial appeal for At this point the reserve is equal to $500,000 plus the estimated amount of the Cariboo Pulp appeal. Funds from this reserve have also been earmarked for a potential land purchase. Land Sales Reserve At this point there are no funds in the land sales reserve. With the City s desire to create an effective housing program, there may need to be consideration towards how to look at increasing funds in this reserve by selling City land. MANNING CONSIDERATIONS The City currently has some temporary positions that will need to be reviewed and if continued budgeted for accordingly. Council Initiatives Coordinator funded by grants in 2017 and partially in 2018 Bylaw Clerk/Officer temp position funded from surplus in 2018 The balance of employees between maintenance and capital needs to be considered as well as the seasonals for snow removal in the winter. PUBLIC WORKS BUILDING Depending on the results of the referendum, a significant tax increase may be required in 2019 for the public works relocation reserve. PARCEL TAXES The South Hills Parcel Tax I comes to an end in Due to additional homes coming on the system the final year could be lowered to 20% of the original amount, $100 in final year. The next year, frontage taxes would be applicable to all the properties (unless a policy decision was made about frontage taxes) and the average frontage tax would be $145 (assuming frontage of 100 ). The City could actually end the parcel tax and start the frontage tax in 2019, might be cleaner than going down to 100 then back up to 145 on average. South Hills II also had additional properties added. The City could end the parcel tax a year early (2019 would be the last year) and then begin frontage taxes in The parcel bylaws do not indicate anything about ending early, they just state the parcel tax is for 20 years. However, there was discussion in the community that they could be reduced as additional properties came into the system. Policy discussions regarding the use of frontage taxes should occur with the new Policy and Bylaw Committee in the fall. FSAC Wrap-up Report - Director Bolton Page 7 of 9 Page 3 of 3

8 I V CAO / CFO Expense Reports: City Manager Johnson Page 8 of 9 DATE COMPLETED YYYY 2018 NAME Byron Johnson REASON FOR TRAVEL Asset Based Community Development Workshop City of Quesnel EXPENSEIADVANCE TRAVEL CLAIM FORM INSTRUCTIONS: Claimant please attach appropriate receipts in order of claim MM DD June 8 DAILYCOSTS Note: To clelmdinner the employee mustreturn home a?er 8 pm. To claim breakfast.the employee must rmve been on Travel Status the evening prior and have stayed ovemlght. DATE OF TRAVEL IE OTHER COSTS (Registration, Fllghte,etc) REGISTRATION TOTAL OF COLUMNS PLACE TRAVELLED TOIFROM Quesnel - Prince George PRIVATE VEHICLE USE RATE KMTRAVELLED LOCATION AND DATES OF FUNCTION Prince George I May 31/18 B.$15.00 L $20.00 Dlnntr s:a.oo Total $65.00 POSITION City Manager 4 HOTEL COSTS Page of TOTAL PAID BY PAID BY TOTAL DAILY COSTS CITY CLAIMANT COST», -' LKL 30 I I L\ KM IATE SIGNED: ADVANCE WAS GREATER THANEXPENSETOTALENTERAMOUNTAND IVE THE BALANCEREFAID ITTACHRECEIPTS) PAID ev cmr PAID av CLAIMANT ToTAL AMOUNT DUE To CLAIMANT (AFTER ADVANCE DEDUCTION) ( ( Q L ATE SIGNED: ff _ PROCESSING CLERK INITIALS Q FIN-10 REV Director oggorale & Financial Services, Karl Bolton

9 Federation of Canadian Municipalities Invoice Page 9 of 9