AGENDA REGULAR MEETING OF FREDERICTON CITY COUNCIL · Subject: Housekeeping Changes to Various...

AGENDA

REGULAR MEETING OF FREDERICTON CITY COUNCIL

Date: Monday, May 13, 2019, 7:30 p.m.Location: Council Chamber, City Hall, Fredericton

1. CALL TO ORDER

2. MOMENT OF REFLECTION

3. APPROVAL OF AGENDA

4. CONFLICT OF INTEREST DECLARATIONS

5. CONSENT AGENDA

5.1 Letter from Dorothy Shephard, Minister of Social Development

Recommendation: Receive for Information●

5.2 CMHA Mental Health Week Proclamation - May 6-12, 2019

Recommendation: Receive for Information●

5.3 Brianna Drive – City of Fredericton – Assent of Council

Recommendation: Outlined within the report●

5.4 Housekeeping Changes to Various By-laws


5.5 Parking Restrictions on Kings College Road and Mitchell Street


5.6 Botanic Garden Spring Fair and Plant Sale


5.7 Garrison Night Market 2019


5.8 Fredericton Relay for Life 2019


5.9 Waterford Lane Land Acquisitions

Land acquisitions to facilitate improvements to Millennium Trail


6. PRESENTATIONS/PETITIONS

6.1 25 Year Service Award Presentation to City of Fredericton Employees

Gary Charters●

Brent Grant●

Mike Byers●

6.2 Mayor's Presentation to Sandy MacNeill

7. FIRST AND SECOND READING OF BY-LAWS

7.1 By-law A-21 (Housekeeping Amendment to Update Various By-laws in Regards tothe Updated Procedural By-law)

A By-law to Amend Various By-laws

First Reading of By-law No. A-21, by title●

Second Reading of By-law No. A-21, by title●

7.2 By-law T-1.102 (Parking Restrictions on Kings College Road and Mitchell Street)

A By-law to Amend By-law No. T-1, A By-law to Regulate Traffic

First Reading of By-law No. T-1.102, by title●

Second Reading of By-law No. T-1.102, by title●

8. THIRD READING OF BY-LAWS

8.1 328-338 Priestman Street - Rezoning (Ann Scovil Architect)

Councillors Kevin Darrah and John MacDermid must retire from the CouncilChamber, as they were not present during the Hearing of Objections/Support, heldon April 29, 2019.

By-law No. Z-5.168, A By-law to Amend By-law No. Z-5, A Zoning By-law for theCity of Fredericton

Adoption of Terms and Conditions●

Motion to Read by Summary●

Third Reading of By-law No. Z-5.168, by title ●

9. PUBLIC PRESENTATION OF BY-LAWS

9.1 By-law No. Z-1.51

A By-law to Amend By-law No. Z-1, A By-law to Adopt a Municipal Plan for the Cityof Fredericton - Re-designate property located at 175 Limerick Road from“Recreation” to “Residential” (Ross Ventures Limited)

10. COMMITTEE REPORTS

FINANCE & ADMINISTRATION COMMITTEE REPORT

10.1 2018 Audited Financial Statements

Receipt of the 2018 Audited Financial Statements

COUNCIL-IN-COMMITTEE REPORTS

10.2 Performing Arts Center Design Process

Commencement of the process for the conceptual and schematic design for thePerforming Arts Center

11. OTHER MATTERS

11.1 Appointment to Performing Arts Centre Design Team Procurement Committee -Councillor Bruce Grandy

11.2 Victoria Circle Roundabout Update and Tender # T19-07

Presentation by:

Sean Lee, Assistant Director, Engineering & Operations●

Jon Lewis, Traffic Engineer●

11.3 81 Regent Street - Noise Exemption Request

Exemption to By-law S-13, A By-law Respecting Disturbance by Noise

11.4 Public Hearing Date – 102 Queen Street

Potential Amendment to By-law L-4, City of Fredericton Heritage Preservation By-law

12. ADJOURNMENT

Form No.: GOV-FRM-259 Service: Community Leadership Issue No.: 1.2 Issue Date: 06/11/10

Printed On: May 10, 2019 May 25, 2001

From: Office of the City Clerk Date: Friday, May 10, 2019 Title: Letter from Dorothy Shephard, Minister of Social Development Description: []

Minister Dorothy Shephard provided a response to Mayor O’Brien’s letter of April 8th, 2019, in which he was seeking assistance in finding appropriate housing options for homeless individuals, as the temporary out-of the-cold shelter, located at 791 Brunswick Street closed its doors on April 30, 2019. Minister Shephard advised that the objections outlined in the Homelessness Action Plan are supported by the Department of Social Development and that her Department would continue to work collaboratively with the City of Fredericton in an effort to work towards creating affordable, safe, adequate and inclusive housing options for vulnerable individuals and families in the City of Fredericton. Accordingly, the following resolution is being forwarded to City Council for consideration: BE IT RESOLVED that the letter from Minister K. Dorothy Shephard, dated April 25, 2019, be received and placed on file.

MEMORANDUM

For City Council – May 13, 2019

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PROCLAMATION

CMHA MENTAL HEALTH WEEK

May 6-12, 2019

WHEREAS: CMHA Mental Health Week promotes mental health awareness

through education campaigns, activities and events held throughout New

Brunswick, and offers practical ways to maintain and improve mental

health and support recovery from mental health problems and illnesses;

and,

WHEREAS: The Canadian Mental Health Association encourages everyone to Get

Loud for mental health – to speak up and take action to improve

mental health for all Canadians; and,

WHEREAS: Increased awareness and understanding of mental health will promote

the use of mental health services and supports and ensures Canadians

with mental health problems and illnesses are afforded the opportunity

to recover; and,

WHEREAS: The Canadian Mental Health Association actively supports and

encourages good mental health in all aspects of our lives, during CMHA

Mental Health Week and throughout the year.

THEREFORE I, Mike O’Brien, Mayor of the City of Fredericton, do hereby proclaim

the week of May 6-12, 2019 as CMHA Mental Health Week and

encourage all citizens to join me and Get Loud for mental health.

MICHAEL G. O’BRIEN

MAYOR

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From: Tony Dakiv, Senior Planner Date: April 30, 2019 Title: Brianna Drive – City of Fredericton – Assent of Council

Description: []

OPEN OR CLOSED SESSION: This issue is to be considered at an open session of Council. ISSUE: A final plan of subdivision has been submitted as shown on the attached map. Staff are presently seeking the Assent of Council pursuant to Section 88(1) of the Community Planning Act. BACKGROUND: In February 2012 Council approved a tentative subdivision plan to create a total of 55 residential building lots including 46 narrow lots for single detached homes off of extensions of Langille Drive and Lian Street including Brianna Drive. The proposed final plan of subdivision will create four narrow building lots off of an extension of Brianna Drive. DISCUSSION: Section 88(1) of the Community Planning Act states that a plan of subdivision that provides for the laying out of public streets or setting aside land for public purposes shall not be approved by the Development Officer until the plan has been assented to by Council. COUNCIL POLICY: N/A FINANCIAL CONSIDERATION (Immediate Impact on Approved Budget): N/A LEGAL CONSIDERATION: The Department/Division has determined that there are no legal considerations associated with this matter. The Office of the City Solicitor was not specifically consulted with respect to this administrative report.

ADMINISTRATIVE REPORT

City Council – May 13, 2019

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Form No.: GOV-FRM-002 Service: Community Leadership Issue No.: 1.8 Issue Date: May 19, 2015


SUSTAINABILITY DUE DILIGENCE: N/A COMMUNICATION PLAN: N/A SPOKESPERSON: Marcello Battilana OPTIONS: It is recommended that City Council adopt the resolution. RECOMMENDATION: It is recommended that the following resolution be forwarded to City Council for consideration: BE IT RESOLVED THAT the final plan of subdivision prepared by SurTek Group Ltd., entitled “Oak Ridge Manufacturing Inc. Subdivision 2019-1, Showing Lots 19-27 to 19-30, New P.U.E.s and Brianna Drive (Public), Brianna Drive, City of Fredericton, County of York, Province of New Brunswick” receive the Assent of Council pursuant to Section 88(1) of the Community Planning Act.

Prepared by: Tony Dakiv, RPP, MCIP Senior Planner Community Planning

Approved by: Ken Forrest, RPP, MCIP Director Growth and Community Services /Attachments – Brianna Drive Subdivision for Assent.pdf

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Form No. COR-FRM-101 Service: Communications Management Issue No. 1.1 Issue Date: 02/05/12


To: Mayor Mike O’Brien & Members of City Council From: Legal Division Date: May 2, 2019 Subject: Housekeeping Changes to Various By-laws

An amendment is required to By-law No. R-11, A By-law Respecting Pawnbrokers & Second Hand Dealers in the City of Fredericton, By-law No. T-4, A By-law Respecting Streets and Sidewalks, and By-law No. W-3, A By-law Respecting Water Rates and Sewer Rentals. At the present time, each of the above-noted by-laws refer to By-law No. A-14, A Procedural By-law of the City of Fredericton Municipal Council. By-law No. A-14 has recently been repealed, and replaced with By-law No. A-19, A Procedural By-law of the City of Fredericton Municipal Council. Therefore, references to By-law No. A-14 need to be changed to By-law No. A-19. Accordingly, the following resolution is presented to City Council for adoption: BE IT RESOLVED THAT the Council of the City of Fredericton authorizes the Legal Division to prepare the appropriate by-law to amend By-law No. R-11, A By-law Respecting Pawnbrokers & Second Hand Dealers in the City of Fredericton, By-law No. T-4, A By-law Respecting Streets and Sidewalks, and By-law No. W-3, A By-law Respecting Water Rates and Sewer Rentals, to repeal references to By-law No. A-14, A Procedural By-law of the City of Fredericton Municipal Council, and replace them with reference to By-law No. A-19, A Procedural By-law of the City of Fredericton Municipal Council.

Memorandum City Council – May 13, 2019

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From: Office of the City Clerk Date: Thursday, May 09, 2019 Title: Parking Restrictions on King’s College Road and Mitchell Street Description: []

The Transportation Committee, at its meeting held on April 23, 2019, considered an Administrative Report from the Traffic Engineer, seeking approval for a by-law amendment to implement parking restrictions on King’s College Road and Mitchell Street. Parking restrictions are required on both King’s College Road and Mitchell Street to improve traffic, pedestrian, and cycling efficiency and safety. Currently, the on-street parking that is taking place on King’s College Road is blocking the eastbound bike lane during the warmer months and causes additional challenges for snow plowing and traffic flow during the winter months. Staff are proposing to restrict parking on the south side of King’s College Road between York Street and Regent Street to alleviate some of those challenges. There are currently no parking restrictions along Mitchell Street. Given a recent increase in on-street parking along Mitchell Street, parking restrictions are proposed along the eastern side of the street to help maintain efficient flow. This is a common treatment on many residential streets across the City where there is higher demand for on-street parking. Staff are proposing to restrict parking along the east side of Mitchell Street between Montgomery Street and King’s College Road. Accordingly, the Committee directed that the following resolution be forwarded to City Council for consideration: BE IT RESOLVED that the Council of the City of Fredericton authorizes and directs the Legal Division to draft the appropriate by-law to amend By-law No. T-1, A By-law to Regulate Traffic, to implement the following changes:

Restrict parking on the south side of King’s College Road, between York Street and Regent Street; and

Restrict parking on the east side of Mitchell Street, between Montgomery Street and King’s College Road.

REPORT OF TRANSPORTATION COMMITTEE


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To: His Worship Mayor Mike O’Brien and Members of City Council From: Carlie Dunbar – Special Events Coordinator Date: 03/05/2018 Title: Botanic Garden Spring Fair and Plant Sale

Description: This is an annual event for the Botanic Garden Association, which will include a plant sale, entertainment, displays and BBQ.

Requested By: John Welling with the Botanic Garden Association Event: Botanic Garden Spring Fair and Plant Sale

Date and Time: Sunday, May 26th, 2019 from 12:00 p.m. – 4:00 p.m. Special Notes: The Fredericton Botanic Garden Association wishes to use the Botanic Garden Entrance Garden area (adjacent to the Ball Fields on Prospect St West) for the Spring Fair and Plant Sale. They would like the City of Fredericton to supply 12 picnic tables, 6 garbage cans, access to the portable toilets in the Ball Park and power access. Section 4 (1) of By-Law No. L-8, A By-Law Respecting Parklands and Recreational Areas, states that “no person shall use parklands or recreational areas for the purpose of holding or carrying on a fair, carnival, bazaar or any other activity for profit or gain, except with the permission of the City Council”. Accordingly, organizers are seeking permission from Council for the sale of plants and garden accessories COMMENTS FROM DEPARTMENTS

Police: The Fredericton Police Force has indicated that they do not have any issues with this event.

Transit: The Transit Division has indicated that they do not have any issues with this event

Engineering: The Engineering Services Division has indicated that they do not have any issues with this event.

SPECIAL EVENT REPORT City Council – May 13, 2019

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Special Event Report 2



Parks & Trees: The Parks and Trees Division has indicated they do not have any issues

with this event. They will supply picnic tables and garbage cans based on availability.

Recreation: The Recreation Division has indicated that they do not have any issues

with this event.

Tourism: The Tourism Division has indicated that they do not have any issues with this

event. RECOMMENDATION It is recommended that City Council adopt the following resolution:

BE IT RESOLVED that approval be given to approval be given to the Botanic Garden Association to hold their event “Botanic Garden Spring Fair and Plant Sale” in Odell Park on Sunday, May 26th, 2019, from 12:00 p.m. to 4:00 p.m., pursuant to Section 3.02(1) of By-law No. L-8, A By-law Respecting Parklands subject to recommendations from City staff being met. Submitted by: Carlie Dunbar – Special Events Coordinator Approved by: David Seabrook – Director of Recreation, Tourism and Community Engagement Attachment:

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To: His Worship Mayor Mike O’Brien and Members of City Council From: Carlie Dunbar – Special Events Coordinator Date: 07/05/2019 Title: Garrison Night Market 2019 Description: This is the 2nd year of the Garrison Night Market organized by

Fredericton Tourism. The Garrison Night Market will be held Thursdays from June 20th until September 5th from 4:30pm-9pm on the lower portion of Carleton St. between Queen St. and the 104th Regiment of Foot pedway, wrapping around the river side of the library toward Officers’ Square. This festive community and retail experience will start after the Changing of the Guard ceremony at 4:30pm and conclude at 9:00pm after the 7:30-8:30pm concert, both in Officers’ Square. Musical and theatrical entertainment will be interspersed with street performers on Carleton St. throughout the evening.The Garrison Night Market is meant to showcase our diverse and creative community through handmade, locally produced & designed items as well as internationally imported products that are handmade or artisan produced.

Requested By: Carlie Dunbar –Special Events Coordinator – Fredericton Tourism Event: Garrison Night Market 2019 Date and Time: Thursdays from June 20th until September 5th from 4:30pm-9pm Special Notes: Fredericton Tourism is requesting to close Carleton Street from Queen Street down into the Officers’ Square parking lot each market night from 1:00pm – 10:00pm. COMMENTS FROM DEPARTMENTS Police: The Fredericton Police Force has indicated that they do not have any issues or concerns with this event, Fredericton Tourism will continue to work with Police and Public Safety in regards to safety precautions with the street closure. Transit: Fredericton Transit has indicated that the do not have any issues or concerns with this event.


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Engineering: Engineering Services has indicated that they do not have any issues or concerns with this event. Parks & Trees: Parks and Trees has indicated that they do not have any issues or concerns with this event. Fire: The Fredericton Fire Department has indicated that they do not have any issues or concerns with this event, Fredericton Tourism will continue to work with Fire and Public Safety in regards to safety precautions with the street closure while maintaining a section of the closed street for emergency vehicle access if required. Fredericton Tourism will also work closely with Fire and Public Health in regards to food vendor guidelines and regulations. Recreation: The Recreation Division has indicated that they do not have any issues or concerns with this event. Parking Services: Parking Services has indicated that they do not have any issues or concerns with this event. Fredericton Tourism will continue to work with Parking Services in regards to the Officers’ Square parking lot during the street closure time frame. RECOMMENDATION It is recommended that City Council adopt the following resolution: BE IT RESOLVED that approval be given to Fredericton Tourism to hold their Garrison Night Market on Carleton Street every Thursday evening beginning Thursday, June 20 up to and including September 5, 2019, subject to compliance with all staff recommendations; AND BE IT FURTHER RESOLVED that the City Solicitor be authorized to draft the appropriate by-law to effect a temporary stop-up and closure every Thursday evening beginning Thursday, June 20 up to and including September 5, 2019, from 1:00 p.m. until 10:00 p.m. for Carleton Street between Queen Street and Officers’ Square Parking Lot. Submitted by: Carlie Dunbar – Special Events Coordinator Approved by: David Seabrook – Director of Recreation, Tourism and Community Engagement

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To: His Worship Mayor Mike O’Brien and Members of City Council From: Carlie Dunbar – Special Events Coordinator Date: 06/05/2019 Title: Fredericton Relay for Life 2019

Description: This is a 6 hour, non-competitive Walk-a-thon fundraiser to support the Canadian Cancer Society.

Requested By: Monica Antworth for the New Brunswick Division of the Canadian Cancer Society. Event: Fredericton Relay for Life 2019

Date and Time: Saturday, June 1st, 2019 from 12:00 p.m. – 6:00 p.m.

Special Notes: This event will take place on the grounds of the Capital Exhibit Center. The Canadian Cancer Society has asked to use 10 picnic tables, 2 garbage cans, 2 recycle bins, and 50 delineators. The Canadian Cancer Society is asking the City for permission to hold the event on Capital Exhibit Centre grounds (indoors). COMMENTS FROM DEPARTMENTS

Police: The Fredericton Police Force has indicated that they do not have any issues

with this event.

Engineering: The Engineering Services Division has indicated they do not have any issues with this event.

Parks & Trees: The Parks and Trees Division will be able to provide the requested resources for this event based on availability.

Recreation: The Recreation Division has indicated that they do not have any issues with this event.


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Tourism: The Tourism Division has indicated that they do not have any issues with this

event. RECOMMENDATION It is recommended that City Council adopt the following resolution: BE IT RESOLVED that approval be given to the Canadian Cancer Society to hold the Fredericton Relay for Life 2019 on the grounds of the Capital Exhibit Center from 12:00 p.m. to 6:00 p.m. Saturday, June 1st, 2019, subject to recommendations from City staff being met. Submitted by: Carlie Dunbar – Special Events Coordinator Approved by: David Seabrook – Recreation, Tourism and Community Engagement

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From: Office of the City Clerk Date: Tuesday, May 07, 2019 Title: Waterford Lane Land Acquisitions Description: Land acquisitions to facilitate improvements to Millennium Trail

Council-in-Committee, at its session held on May 6, 2019 reviewed an administrative report from the Manager of Real Estate which requested Council authorization for the acquisition of 10 small parcels of land from 10 owners living in townhouses at Waterford Lane for $1.00 each. The purpose of these acquisitions is to secure the land necessary to proceed with improvements along this section of the Millennium Trail. In 2006 and at the time of the Waterford Lane townhouse development, the City acquired several small parcels to the rear of the lots along Waterford Lane in order to install a section of the Millennium Trail between the townhouse development and the Saint John River. At the time of installation, soil was removed and grading of the shore line was done to slope from the residences down to the river, with the trail in between. In recent years, this section of the trail has been heavily impacted by rising waters. This has compromised the trail in this area – both the “retaining wall” (grading), private land, and the trail have experienced significant washout and erosion. In order to address the situation, Parks and Trees wishes to secure the site by putting in a retaining wall that will better resist against flood and prevent further damage to public and private property in the future. Staff from Parks and Trees, as well as the consultant on this project, Hilcon, have suggested that a “living wall” would be an appropriate solution to the erosion issue. However, in order to install this form of retaining wall, additional land is required from the 10 owners outlined below. The Committee directed that the following resolution be forwarded to City Council for consideration: BE IT RESOLVED that the Council of the City of Fredericton authorizes the purchase of: a 22.6 m² portion of PID 75402099 from Patricia and Ronald Wheaton. a 26.9 m² portion of 75402107 from Melvin Soicher and Marie Blanchard, a 25.8 m² portion of PID 75410845 from Stephen and Pamela Skinner, a 20.4 m² portion of PID 75410852 from Jacques and Elizabeth Paynter, a 4.5 m² portion of PID 75410860 from Ronald Law, a 20.0 m² portion of PID 75416479 from John and Brenda Robison, a 19.9 m² portion of

REPORT OF COUNCIL-IN-COMMITTEE


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PID 75416487 from Charlotte and Lazlo Magasi, a 21.9 m² portion of PID 75416495 from Gregory and Michelle Beers, a 28.8 m² portion of PID 75416503 from Donna Wheaton, and a 43.0 m² of PID 75418111 from Allan and Bridget Menzies for the purchase price of $1.00 for each parcel of land, subject to applicable taxes and terms and conditions; and that the Mayor and City Clerk be authorized to execute the legal documents necessary to complete these transactions.

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AGREEMENT OF PURCHASE AND SALE

This Agreement made in duplicate, this _____ day of _____________, 2019.

BETWEEN: , hereinafter called the “Vendor”;

-AND-

THE CITY OF FREDERICTON, a municipal corporation by virtue of the Local Governance Act, S.N.B. 2017, C. 18, having its head office at 397 Queen Street, Fredericton, New Brunswick, E3B 1B5, hereinafter called the “Purchaser”

WHEREAS the Vendor is the owner of the parcel of land located _____ Waterford Lane, in the City of Fredericton, County of York and Province of New Brunswick, being more specifically identified as SNB PID ________ (the “Vendor’s Property”); AND WHEREAS the Vendor has agreed to sell to the Purchaser and the Purchaser has agreed to purchase from the Vendor that portion of the Vendor’s Property designated as Parcel ____ containing ____ m² as shown and depicted on the sketch annexed hereto as Schedule ‘A” (the “Property”); and

AND WHEREAS the Parties acknowledge that this Agreement shall be subject to the final approval of Council for the City of Fredericton. NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the sum of $1.00 (One Dollar) and other valuable consideration now paid by the Purchaser to the Vendor, the receipt of which sum is hereby acknowledged, the Vendor hereby agrees to sell to the Purchaser and the Purchaser hereby agrees to purchase from the Vendor the Property, subject to the terms and conditions herein contained.

1. THE PROPERTY

1.1 The Vendor agrees to sell to the Purchaser and the Purchaser agrees to purchase from the Vendor all of the Vendor’s right, title and interest in and to the Property.

2. PURCHASE PRICE 2.1 The purchase price of the Property shall be the sum of ONE DOLLAR ($1.00) of lawful money of Canada, (the “Purchase Price”).

3. METHOD OF PAYMENT OF PURCHASE PRICE Not Applicable

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4. ADJUSTMENTS Not Applicable

5. CLOSING 5.1 This Agreement shall be completed on _________________, 2019, or such earlier date as the Parties may mutually agree to in writing (the "Closing Date"). 5.2 This Agreement shall be completed at a time as the Parties may mutually agree upon on the Closing Date in the office of the Solicitor for the Purchase, or at such other place or time as the Parties may mutually agree to in writing. Delivery of documents or money hereunder may be made upon the Vendor or the Purchaser or their respective solicitors on the Closing Date.

6. ACCEPTANCE, CONDITIONS AND RESTRICTIONS

6.1 The Parties shall indicate the date on which each has executed this Agreement in the space provided immediately above the execution line and upon such execution of the last Party signatory being communicated to the other Party or its solicitors pursuant to Section 10, this Agreement shall become a binding agreement for the purchase and sale of the Property. 6.2 The Parties acknowledge and agree that the completion of the sale and purchase of the Property as contemplated by this Agreement is subject to the following conditions: (a) The Vendor and the Purchaser acknowledge that the Property is being is sold on an “as is” basis;

(b) The Vendor hereby grants consent and authorizes the Purchaser to make any necessary

application to the City’s Planning Advisory Committee with respect to the development of the Property by the Purchaser; and

(c) All property agreements and transactions are subject to the Planning Advisory Committee’s

approval and recommendation, if applicable.

7. OBLIGATIONS ON CLOSING – THE VENDOR 7.1 The Vendor shall execute and deliver to the Purchaser on or before the Closing Date, the following: (a) Transfer or Deed - such transfer or deed in registerable form as may be required to transfer to

the Purchaser all of the Vendors’ right, title and interest in the Property; (b) Statement of Adjustments - Not Applicable; (c) Vendor’s Certificate – Not Applicable; (d) Corporate Resolution – Not Applicable; and (e) Other – All other documents specifically referred to in this Agreement relative to the

completion of this Agreement and vacant possession of the Property.

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7.2 All of the documents referred to in Section 7.1 shall be prepared by the Purchaser at the Purchaser’s expense, unless otherwise specifically stated in this Agreement.

8. OBLIGATIONS ON CLOSING – THE PURCHASER 8.1 The Purchaser shall execute and deliver to the Vendor on the Closing Date the following: (a) Purchase Price – Not Applicable ; (b) Corporate Resolution - a certified copy of the appropriate corporate resolution of the

Purchaser approving and authorizing the acquisition of the Property; and (c) Other - any other documents specifically referred to in this Agreement relative to the

completion of this Agreement, together with any other documents relative to the completion of this Agreement as may reasonably be required by the Vendor, acting reasonably, or by the Purchaser and the Purchaser’s Solicitors, acting reasonably.

9. RISK 9.1 Until the Closing Date and completion of the sale of the Property, all buildings on the Property shall be and remain at the risk of the Vendor and the Vendor shall hold all insurance policies and the proceeds of them in trust for the Parties, as their interest may appear. The Vendor shall notify the Purchaser immediately, at the request of the Purchaser, the particulars of insurance on the Property. In the event of substantial damage to the Property, the Purchaser may either have the proceeds of the insurance policies and complete the purchase or may cancel this agreement and the Deposit shall be repaid to the Purchaser without interest or deduction.

10. NOTICE 10.1 Any notice, approval or other communication required or permitted to be given hereunder ("Notice") shall be in writing and shall be sufficiently given if personally delivered or if sent by prepaid registered mail or if transmitted by facsimile: Notice to Vendor: Notice to Purchaser: The City of Fredericton 397 Queen Street Fredericton, NB E3B 1B5 Attn: Manager of Real Estate with a copy to the Solicitor of each party. Vendor’s Solicitor: Purchaser’s Solicitor: City of Fredericton Legal Division 397 Queen Street Fredericton, NB E3B 1B5 Attn: Peter J. Adams, Q.C. Tel: 506-460-2050 E-mail: [email protected]

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10.2 Any Notice so given shall be deemed conclusively to have been given and received if

personally delivered, if sent by facsimile or if sent by electronic mail on the day such Notice was delivered if delivered on a Business Day and deemed to have been received on the next Business Day if such delivery was made on a non-Business Day. Any Notice sent by prepaid registered mail shall be deemed to have been delivered on the third (3rd) Business Day following the date of mailing, provided that for such purposes no day during which there shall be a strike or other occurrence which shall interfere with normal mail service shall be considered a Business Day. No such Notice shall be

mailed during any actual or apprehended disruption of postal services. 10.3 Either Party may from time to time change its address for service by written notice to the other Party by providing notice as stipulated under this section.

11. MISCELLANEOUS 11.1 This Agreement shall constitute the entire agreement between the Parties and there are no other terms, obligations, covenants, representations, warranties, statements or conditions, oral or otherwise (including statutory), of any kind whatsoever except as set out in writing in this Agreement and all prior negotiations, proposals and writings pertaining to this Agreement or the subject matter hereof are superseded hereby. 11.2 This Agreement shall not be modified or amended except with the written consent of the Vendor and the Purchaser. In addition, no modification or amendment to this Agreement binds the Vendor or the Purchaser unless it is in writing and has been duly executed by both Parties. 11.3 This Agreement and everything relating hereto shall be construed and enforced in accordance with the laws of the Province of New Brunswick and the laws of Canada applicable therein. 11.4 Any provision of this Agreement which is determined to be void, prohibited or unenforceable shall be severable without invalidating, limiting or impairing the remaining provisions of this Agreement. 11.5 Time shall in all respects be of the essence hereof, provided that the time for doing or completing of any matter provided for herein may be extended or abridged in accordance with the terms of this Agreement or by an agreement in writing signed by the Vendor and the Purchaser or by their respective Solicitors who are hereby expressly appointed in this regard. 11.6 Neither the Vendor nor the Purchaser shall assign any of the obligations and rights under this Agreement without the prior written consent of the other Party. 11.7 This Agreement shall enure to the benefit of and be binding upon the Parties hereto and their respective heirs, successors and assigns. 11.8 This Agreement shall be read with all changes of gender or number required by the context. 11.9 The Parties acknowledge that they have read this Agreement in its entirety. The Parties further acknowledge that they understand the terms and conditions herein contained and

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acknowledge that they have had the opportunity to obtain independent legal advice prior to signing this Agreement. 11.10 The Vendor and the Purchaser shall from time to time, and at all times, do or cause to be done, such further acts and execute and deliver, or cause to be executed and delivered, such further documents as shall be required in order for the Vendor and the Purchaser to fully comply with the requirements in respect to any HST imposed under any applicable legislation. 11.11 The Purchaser shall pay and be liable for all transfer taxes and other taxes applicable to or resulting from the transactions contemplated hereby, together with all filing, registration or recording charges or fees payable in connection with the filing or registration of any deeds, transfers of land or other documents executed and delivered hereunder, excluding any income tax payable by the Vendor. 11.12 The Vendor and the Purchaser shall be responsible for their own legal counsel and related

services that may be required, in connection with this Agreement.

IN WITNESS WHEREOF the Vendor and Purchaser have caused this Agreement to be executed as of the dates herein below written.

In Witness Whereof this Agreement has In Witness Whereof this Agreement has been signed by the Vendor on ____________ been signed by the Purchaser on _____________ 2019. _______________, 2019.

THE CITY OF FREDERICTON

_____________________________ _________________________________ Michael G. O’Brien, Mayor _____________________________ _____________________________ Jennifer Lawson Murray, City Clerk

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PROVINCE OF NEW BRUNSWICK

COUNTY OF YORK

AFFIDAVIT OF CORPORATE EXECUTION

I, JENNIFER LAWSON MURRAY, of the City of Fredericton, in the County of York

and Province of New Brunswick, MAKE OATH AND SAY AS FOLLOWS:

1. That I am the City Clerk of the City of Fredericton, one of the Parties named in the foregoing instrument and as such I have personal knowledge of the matters herein deposed to. 2. That the seal affixed to the foregoing instrument purporting to be the seal of the City of Fredericton is the Corporate Seal of the City of Fredericton and was so affixed by order of the City Council. 3. That the signature "Michael G. O’Brien" subscribed to the foregoing instrument is the signature of Michael G. O’Brien, the Mayor of the City of Fredericton, and the signature "Jennifer Lawson Murray" subscribed thereto is my signature. 4. That the Mayor and City Clerk are the officers of the City of Fredericton duly authorized to execute the foregoing instrument.

5. That the City of Fredericton is a municipal corporation and has no share capital. SWORN TO BEFORE ME at the ) City of Fredericton, in the County ) of York and Province of New ) Brunswick, this ____ day of ) ____________, 2019. ) ) ) ) _________________________ ) Donna Legacy ) Jennifer Lawson Murray A Commissioner of Oaths )

26

BY-LAW NO. A-21

A BY-LAW TO AMEND VARIOUS BY-

LAWS

ARRÊTÉ NO A-21

ARRÊTÉ MODIFIANT DIVERS ARRÊTÉS

PASSED:

WHEREAS municipalities may make by-laws

pursuant to the Local Governance Act;

AND WHEREAS the municipality of The City

of Fredericton repealed By-law No. A-14, A

Procedural By-law for the City of Fredericton

Municipal Council;

AND WHEREAS the Council of The City of

Fredericton wishes to update its various by-laws

accordingly;

NOW THEREFORE, BE IT ENACTED by the

Council of the City of Fredericton, pursuant to

the authority vested in it by the Local

Governance Act, S.N.B. 2017, c. 18, as follows:

ADOPTÉ:

ATTENDU que les municipalités peuvent établir

des arrêtés en vertu de la la Loi sur la

gouvernance locale;

ET ATTENDU que la municipalité de la Ville de

Fredericton a abrogé l’arrêté No A-14, Arrêté

procédural édicté par le conseil municipal de

Fredericton;

ET ATTENDU que le conseil de la Ville de

Fredericton souhaite mettre à jour ses différents

arrêtés;

IL EST PAR CONSÉQUENT RÉSOLU que le

conseil municipal de la Ville de Fredericton édicte,

conformément aux pouvoirs que lui confèrent la Loi

sur la gouvernance locale, L.N.-B. 2017, ch. 18, ce

qui suit :

1. By-law No. R-11, A By-law Respecting

Pawnbrokers & Second Hand Dealers

in the City of Fredericton is amended

by repealing all references to “By-law

No. A-14, A Procedural By-law of the

City of Fredericton Municipal Council”

and replacing them with “By-law No.

A-19, A Procedural By-law of the City

of Fredericton Municipal Council”.

2. By-law No T-4, A By-law Respecting

Streets and Sidewalks is amended by

repealing all references to “By-law No.

A-14, A Procedural By-law of the City

of Fredericton Municipal Council” and

replacing them with By-law No. A-19,

A Procedural By-law of the City of

Fredericton Municipal Council”.

3. By-law No. W-3, A By-law Respecting

Water Rates and Sewer Rentals, is

amended by repealing all references to

“By-law No. A-14, A Procedural By-

law of the City of Fredericton

Municipal Council” and replacing them

with By-law No. A-19, A Procedural

1. L'arrêté No R-11, Arrêté concernant les

prêteurs sur gages et les revendeurs dans

The City of Fredericton, est modifié par

l'abrogation de toute référence à l’«Arrêté

No A-14, Arrêté procédural édicté par le

conseil municipal de Fredericton » et est

remplacé avec l’ «Arrêté No A-19, Arrêté

procédural édicté par le conseil municipal

de Fredericton ».

2. L'arrêté No T-4, Arrêté concernant les rues

et les trottoirs est modifié par l'abrogation

de toute référence à l’«Arrêté No A-14,

Arrêté procédural édicté par le conseil

municipal de Fredericton » et est remplacé

avec l’ «Arrêté No A-19, Arrêté procédural

édicté par le conseil municipal de

Fredericton ».

3. L'arrêté No W-3, « Arrêté concernant les

taxes d’eau et les redevances d’égouts » est

modifié par l'abrogation de toute référence à

à l’«Arrêté No A-14, Arrêté procédural

édicté par le conseil municipal de

Fredericton » et est remplacé avec

27

http://www.fredericton.ca/sites/default/files/pdf/1By-lawNoR-11.2.pdf



By-law No. / Arrêté N° A-21

2

By-law of the City of Fredericton

Municipal Council”.

l’ «Arrêté No A-19, Arrêté procédural édicté

par le conseil municipal de Fredericton ».

4. The amendments of the by-laws

listed herein, shall not affect any

penalty, forfeiture or liability, incurred

before such amendments or any

proceeding for enforcing the same

completed or pending at the time of

the amendments; nor shall it repeal,

defeat, disturb, invalidate or

prejudicially affect any matter or

thing whatsoever completed,

existing or pending at the time of the

amendments, nor further shall these

amendments in any way or matter affect

the validity or enforceability of any

agreement with the Municipality.

First Reading:

Second Reading:

Third Reading:

__________________________

Michael G. O’Brien

Mayor / maire

4. Les modifications aux arrêtés énumérés

ci-dessus n'ont aucun effet sur les peines ou

confiscations encourues, ou sur la

responsabilité engagée, avant ces

modifications, ni sur les procédures

d'exécution achevées ou pendantes au

moment de celles-ci; elles n'ont pas non

plus pour effet d'abroger, d'annuler, de

modifier, d'invalider ou d'altérer quoi que

ce soit qui serait achevé ou pendant à ce

moment. En outre, ces modifications n'ont

aucun effet sur la validité ou la force

exécutoire d'une entente conclue avec la

municipalité.

Première lecture :

Deuxième lecture :

Troisième lecture:

___________________________

Jennifer Lawson Murray

City Clerk / secrétaire municipale

28

BYLAW NO. T1.102

A BYLAW TO AMEND BYLAW NO. T1,

A BYLAW TO REGULATE TRAFFIC

ARRÊTÉ NO T1.102

ARRÊTÉ MODIFIANT L’ARRÊTÉ NO T1,

ARRÊTÉ VISANT À RÉGLEMENTER LA

CIRCULATION

PASSED:

WHEREAS Municipalities may make by-laws

pursuant to the Local Governance Act;

NOW THEREFORE, BE IT ENACTED by the

Council of the City of Fredericton, and pursuant to

the authority vested in it by the Local Governance

Act, S.N.B. 2017, c. 18 as follows:

ADOPTÉ :

ATTENDU que les municipalités peuvent établir

des arrêtés en vertu de la Loi sur la gouvernance

locale;

IL EST PAR CONSÉQUENT RÉSOLU que le

conseil municipal de la Ville de Fredericton édicte,

conformément aux pouvoirs que lui confère la Loi

sur la gouvernance locale, L.N.-B. 2017, ch. 18, ce

qui suit :

1. By-law No. T-1, A By-law to Regulate Traffic,

is amended by adding a new subparagraph (A)

to paragraph (ix), of subsection (k) of Section

16.05 as follows, and renumbering the

remaining subparagraphs as (B) to (C)

respectively:

(A) on the southerly side of Kings College

Road, between York Street and Regent

Street;

1. L’arrêté no T-1, Arrêté visant à réglementer la

circulation, est modifié à par l’ajout de sous

alinéa A) au l’alinéa ix) au paragraphe k) de

l’article 16.05 et par la modification de la

numérotation des sous alinéas restants de B) à

C) respectivement, comme suit :

A) sur le côté sud de la route Kings College,

entre le rue York et le rue Regent;

2. The said by-law is further amended by adding

a new paragraph (xix) of subsection (m) of

Section 16.05, as follows, and renumbering

the remaining paragraphs as (xx) to (xxvi)

respectively:

(xix) on the easterly side of Mitchell Street

between Montgomery Street and Kings

College Road;

2. Ledit arrêté est de plus modifié est modifié à

par l’ajout un nouvel alinéa xix) au paragraphe

m) de l’article 16.05 et par la modification de la

numérotation des sous alinéas restants de xx) à

xxvi) respectivement, comme suit :

xix) sur le côté est de la rue Mitchell,

entre le rue Montgomery et le route

Kings College;

First Reading:

Second Reading:

Third Reading:

Première lecture :

Deuxième lecture :

Troisième lecture :

29

By-law No. / Arrêté nº T-1.101 Page 2

__________________________________

Michael G. O’Brien

Mayor/maire

__________________________________

Jennifer Lawson Murray,

City Clerk/secrétaire municipale

30

From: Office of the City Clerk

Date: May 8, 2019

Subject: Rezoning – 328 – 338 Priestman Street (Ann Scovil Architect)

Councillors John MacDermid and Kevin Darrah must retire from the Council Chamber, as

they were not present for the Hearing of Objections/Support, held on April 29, 2019.

For City Council on May 13, 2019

Adoption of Terms & Conditions

Reading by Summary of No. Z-5.168

Third Reading of By-law No. Z-5.168 by title

Additional Information

This application will rezone property from MR-2 to MR-4 to allow for the construction a 24 unit

apartment building on property located at 328-338 Priestman Street, subject to terms and

conditions.

City Council Meeting – March 25, 2019

Council adopted a resolution referring the application to PAC, authorizing Section 111

advertising, preparation of a by-law to amend the Zoning By-law, and set the date for

consideration of objections/support to the proposed by-law.

Planning Advisory Committee Meeting – April 17, 2019

Staff recommended approval

PAC recommended approval (no written letters of objection/support)

City Council Meeting – April 29, 2019

Receipt of the Planning Advisory Committee Report

Hearing of Objections/Support (no written letters of objection/support)

First Reading of By-law No. Z-5.168 by title

Second Reading of By-law No. Z-5.168 by title

STATUS REPORT For City Council – May 13, 2019



31

City Council: May 13, 2019

TERMS AND CONDITIONS

ANN SCOVIL 328 – 338 PRIESTMAN STREET The following terms and conditions are recommended under Section 59(1) of the Community Planning Act: a) The site be developed generally in

accordance with Map II attached to Planning Report 19/19 to the satisfaction of the Development Officer;

b) Final building design be substantially in accordance with Maps III and IV attached to Planning Report 19/19 to the satisfaction of the Development Officer;

c) A final landscape and parking plan be provided showing new tree and shrub planting details, existing trees and shrubs to be retained along the rear, parking lot paving/curbing, screen fence and garbage enclosure screening detail to the satisfaction of the Development Officer prior to issuance of the building permit;

d) Lot consolidation and registration of an agreement reflecting the shared driveway/access/garbage location to the satisfaction of the Development Officer;

e) The land owner negotiate in good faith to sell a strip of land 2 metres wide tapering to 1 metre wide from west to east along the frontage of the site to be added to the Priestman Street right-of-way;

f) Access, servicing and lot grading, including storm water attenuation, are to be to the satisfaction of the Director of Engineering and Operations;

CONDITIONS

ANN SCOVIL 328 – 338, RUE PRIESTMAN Les conditions suivantes sont recommandées en application du paragraphe 59(1) de la Loi sur l’urbanisme :

a) Le site doit être aménagé de manière

généralement conforme au plan II annexé au rapport d’urbanisme 19/19, à la satisfaction de l’agent d’aménagement.

b) La conception finale du bâtiment doit être essentiellement conforme aux plans III et IV joints au rapport d’urbanisme 19/19, à la satisfaction de l’agent d’aménagement.

c) Un plan final de stationnement et d’aménagement paysager sur lequel figurent les arbres et les arbustes à planter, les arbres et les arbustes à conserver le long de la partie arrière, l’asphaltage et les bordures du stationnement, la clôture brise-vue et l’information sur le masquage de l’aire réservée aux ordures doit être présenté à la satisfaction de l’agent d’aménagement avant la délivrance du permis de construire.

d) Le remembrement de parcelles et l’enregistrement d’un accord relatif au partage de l’entrée et de l’accès à l’aire réservée aux ordures doivent être effectués à la satisfaction de l’agent d’aménagement.

e) Le propriétaire doit négocier de bonne foi la vente d’une bande de terrain d’une largeur de deux mètres se réduisant progressivement à un mètre d’ouest en est le long de la façade du lot à ajouter à l’emprise de la rue Priestman.

f) L’accès, la viabilisation, le nivellement du terrain et l’atténuation des eaux pluviales doivent être établis à la satisfaction du directeur, Ingénierie et opérations.

32

2

g) Property is located in Wellfield Zone C; all plans must conform to the NB Wellfield Protected Area Designation Order. Refer inquiries to the City Wellfield Protection Officer.

g) Puisque la propriété est située dans la zone C du champ de captage, tous les plans doivent respecter le Décret de désignation du secteur protégé du champ de captage du Nouveau-Brunswick. Les demandes de renseignements doivent être adressées à l’agent municipal de protection du champ de captage.

Marcello Battilana Manager / Gestionnaire

Community Planning/ Planification urbaine

33

CITY OF FREDERICTON

BY-LAW NO. Z-5.168

VILLE DE FREDERICTON

ARRÊTÉ NO Z-5.168

A BY-LAW TO AMEND BY-LAW NO. Z-5, A

ZONING BY-LAW FOR THE CITY OF

FREDERICTON

ARRÊTÉ MODIFIANT L’ARRÊTÉ

No Z-5 RELATIF AU ZONAGE DE THE CITY

OF FREDERICTON

WHEREAS the Council of the City of

Fredericton deems it desirable to amend By-law

No. Z-5 as hereinafter provided.

ATTENDU QUE le conseil municipal de la Ville de

Fredericton estime souhaitable de modifier

l’arrêté no Z-5, ainsi qu’il est prévu ci-après.

THEREFORE THE COUNCIL OF THE CITY

OF FREDERICTON ENACTS AS FOLLOWS:

PAR CES MOTIFS, LE CONSEIL MUNICIPAL

DE LA VILLE DE FREDERICTON ÉDICTE CE

QUI SUIT :

1. By-law No. Z-5, A Zoning By-law for The

City of Fredericton, is amended by changing

the zone as shown on the zoning map thereof,

for the property located at 328 to 338

Priestman Street, and shown on Schedule

“11” attached to and forming part of By-law

No. Z-5.168, from Multi-Residential Zone

Two (MR-2) to Multi-Residential Zone Four

(MR-4).

1. L’arrêté no Z-5, relatif au zonage de The City of

Fredericton, est modifié par la modification de la

désignation, comme l'indique le plan de zonage,

pour une parcelle du terrain situé du 328 au 338,

rue Priestman, comme le montre l’annexe « 11 »

ci-jointe et faisant partie de l’arrêté no Z-5.168,

de zone multi-résidentielle 2 (MR-2) à zone

multi-résidentielle 4 (MR-4).

Read a first time this ____ day of _______,

2019.

Passé en première lecture ce _____________ 2019.

Read a second time this ____ day of _______,

2019.

Passé en deuxième lecture ce ____________ 2019.

Read a third time and finally passed this ____

day of _______, 2019.

Passé en troisième lecture et définitivement adopté

ce _____________ 2019.

______________________________

Michael G. O’Brien,

Mayor/maire

______________________________

Jennifer Lawson Murray,

City Clerk/secrétaire municipale

34

By-law No. / Arrêté N° Z-5.168 2

35

Form No.: GOV-FRM-259 Issue No.: 1.3 Service: Community Leadership Issue Date: May 19, 2015

Sub-Service: Council & Committee Support May 25, 2001 Printed On: May 8, 2019

From: Angela DuPlessis, Secretary, Planning Advisory Committee

Date: April 18, 2019

Title: 328 - 338 Priestman Street

Description: Rezoning from MR-2 to MR-4 to Permit 24-Unit Apartment Building

The Planning Advisory Committee, at its meeting held on April 17, 2019, considered an application from Ann Scovil to rezone property from MR-2 to MR-4 in order to construct a 24 unit apartment building on property located at 328 -338 Priestman Street, and recommended approval, subject to terms and conditions. Terms and Conditions: a) The site be developed generally in accordance with Map II attached to Planning Report 19/19

to the satisfaction of the Development Officer; b) Final building design be substantially in accordance with Maps III and IV attached to Planning

Report 19/19 to the satisfaction of the Development Officer; c) A final landscape and parking plan be provided showing new tree and shrub planting details,

existing trees and shrubs to be retained along the rear, parking lot paving/curbing, screen fence and garbage enclosure screening detail to the satisfaction of the Development Officer prior to issuance of the building permit;

d) Lot consolidation and registration of an agreement reflecting the shared driveway/access/garbage location to the satisfaction of the Development Officer;

e) The land owner negotiate in good faith to sell a strip of land 2 metres wide tapering to 1 metre wide from west to east along the frontage of the site to be added to the Priestman Street right-of-way;

f) Access, servicing and lot grading, including storm water attenuation, are to be to the satisfaction of the Director of Engineering and Operations;

g) Property is located in Wellfield Zone C; all plans must conform to the NB Wellfield Protected Area Designation Order. Refer inquiries to the City Wellfield Protection Officer.

Accordingly, the Committee directed that the following resolution be forwarded to City Council:

BE IT RESOLVED that the Report of the Planning Advisory Committee, dated April 18, 2019, with respect to an application from Ann Scovil to rezone property from MR-2 to MR-4 in order to construct a 24 unit apartment building on property located at 328 -338 Priestman Street, be received.

Yours truly, Angela DuPlessis cc: Ann Scovil Architect, 41 Mill Street, Fredericton, NB, E3A 4L5 Cedar Valley Investments Ltd., 506-527 Dundonald Street, Fredericton, NB, E3B 1X5

REPORT OF THE PLANNING ADVISORY COMMITTEE

For City Council: April 23, 2019

36

Frederict&'1 PLANNING REPORT

PAC-April 17, 2019 Z-7-2019, V-11-2019/P.R. No. 19/19

To: Planning Advisory Committee

From: Tony Dakiv, Senior Planner

Proposal: Rezoning from MR-2 to MR-4 and variances to permit construction of a 24 unit apartment building.

Property: 328-338 Priestman Street (PID's 01452697, 75002196)

OWNER: Cedar Valley Investments Ltd. 506-527 Dundonald Street,Fredericton, NB E3B 1X5

APPLICANT: Ann Scovil

SITE INFORMATION:

Location:

Context:

Ward No:

Municipal Plan:

Zoning:

Existing Land Use:

Previous Applications:

EXECUTIVE SUMMARY:

41 Mill Street, Fredericton, E3A 4L5

South side of Priestman Street between Priestman Street Elementary School and Fredericton High School.

Apartment buildings to the east and west, schools to the north and south.

11

Residential

MR-2

Single and semi-detached dwelling

None

The proposal is a 24 unit apartment building requiring a rezoning and variances for lot area, landscape area and parking. The proposal is consistent with the criteria for medium and high density residential development of the Municipal Plan.

The lot area variance is considered to be reasonable given the context of the site (surrounded by medium/high density residential and institutional uses). The parking variance should not adversely impact adjacent properties as each unit will have at least one assigned parking space and the site is located on a transit route. The proposal will utilize a shared driveway with the adjacent site which also has potential to provide additional parking if required. The landscaped area variance is considered negligible given the adjacent school sites.

The proposal will replace two older low density structures and allow a compatible infill development to occur in an area long established with apartment building development. Staff support this application subject to terms and conditions.

37

APPLICATION:

Ann Scovil Architect has made application for the following: • rezoning from MR-2 to MR-4;• 427m2 lot area variance, 5 parking stall variance and 3% landscaped area variance,

in order to construct a 24 unit apartment building on property located at 328 - 334/338 Priestman Street.

PLANNING COMMENTS:

Proposal:

• The site is composed of two lots containing an older single detached and semi-detached dwelling.The remaining three lots on this portion of Priestman Street contain 3 storey apartment buildings.with densities ranging from 122m2 to 167m2 per dwelling unit.

• The proposed four storey building will contain 18 two bedroom units and 6 one bedroom units.The building will be oriented parallel with the street line with the parking lot in the rearaccommodating 28 parking stalls. The parking lot will be accessed from the existing driveway onthe abutting property to the east (same property owner) which will be a shared drivewayarrangement. Similarly the garbage location will be combined with the existing bin at the end ofthe driveway. This shared arrangement results in some positive site efficiencies and a reducednumber of driveways on Priestman Street. A condition of approval will require agreement(s)re·flecting this arrangement to be registered on title of both properties.

• Currently the site is limited to 12 units without any bonus density hence the need for rezoning tothe MR-4 zone. The proposed MR-4 zone would allow up to 19 units again without a bonusdensity. Since the proposed building contains 24 units, a 427m2 lot area variance is required toallow the additional 5 units. The MR-4 zone requires 30m of lot frontage and the property has alot frontage of approximately 42 metres

• Staff feel the proposed "up-zoning" is reasonable in this case given the context of the site. Thisportion of Priestman Street is a long established area accommodating apartment buildingslocated between an elementary and high school. The proposed MR-4 zoning would provide ahigher residential density in an area that can be considered as having potential for higherdensities than the existing development along this portion of Priestman Street.

• The site plan shows a solid fence to screen the parking lot along the side property lines asrequired under the Zoning By-law since both abutting properties have a residential zone. There isalso mature landscaping (trees and shrubs) that exist along the majority of the rear of the site andalong the highschool property which will provide some natural screening of the parking area. The3m landscaped strip behind the parking lot will provide sufficient space to retain any existinglandscaping. Staff recommend a detailed landscape and parking plan be provided at the buildingpermit stage including existing trees and shrubs to be retained.

Growth Strategy:

• The Areas of Stability and Minor Change section outlines that "modest forms of intensificationmay be permitted at the edges of neighbourhoods, along main roads, e.g., townhousedevelopments and low-rise apartment buildings." Furthermore, "all such changes, however, willrespect the existing pattern, scale and character of the neighbourhood." The proposal isgenerally consistent with this intent as the site is located within a "pocket" of existing apartmentbuildings along the south side Priestman Street and will be replacing two older low densitybuildings which represent an anomaly in the immediate area.

38

Municipal Plan:

• The proposal complies with Section 2.5.2(5) of the Municipal Plan which outlines criteria relevantto medium and high density residential development as follows:

Council shall provide for medium or high density residential development in accordance with the following guidelines. Medium or high density residential development should:

- be adjacent to or in close proximity to collector or arterial streets and transit routes;- located at the periphery of low density residential neighbourhoods;- be encouraged in suitable sites of in-fill development;- be in proximity to the City Centre and other employment or economic nodes;- be compatible with surrounding land uses;- be in locations where all necessary water and sewer services, parks and recreation services,

schools and other community facilities and protective services can readily and adequately beprovided;

- provided sufficient on-site parking and green space;- incorporate site design features that adequately address such matters as safe access, buffering

and landscaping, site grading and storm water management;- Include an exterior building design of high quality that contributes positively to the City's urban

form.

Zoning By-law:

The proposal compared to the standards of the MR-4 zone is as follows:

Standard Required Provided

Density 2400m2 1973m2*

Building Setbacks {front) 3m min. 5.1 m {sides) 2m min. 2.1m, 2.2m {rear) 7.5m min. 23m approx.

Building Height 18m max. 13.7m

Lot Coverage 45% of lot area max. 31%

Landscaped Area 35% of lot area min. 32%*

Parking {min.spaces) 33 spaces 28 spaces* {separation) 2m min. 2m

* Variance required

• The 427m2 lot area variance equates to an additional 5 units over the MR-4 base density and isconsidered reasonable in this case given the context of the site. The site is located immediatelyadjacent to existing apartment buildings and between institutional uses (elementary and highschool) as well as close to commercial services on Prospect Street. The proposed lot areavariance should not adversely impact neighbouring properties and there is significant open spacein close proximity to the site.

• With regard to the variance for 5 parking spaces, each unit will have at least one parking space,and the site has frontage on a transit route. In addition, some tenants may not have a vehicleand the applicant indicates that there is enough space on the adjacent property to the east for

39

additional parking spaces if needed which is under the same ownership. Given these factors staff feel the parking variance is reasonable in this case and should not adversely impact nieghbouring properties.

• The 3% landscaped area variance is considered negligible especially given the amount of openspace existing on the nearby school sites.

Building Design

• The proposed building design incorporates elements to help reduce it's overall form and massingand helps to add visual interest from the street. A three storey portion of the front wall projects outand is gabled reflecting the smaller gabled elements along the roof line. Balconies are insetproviding a variation in wall planes and entrance canopies and gables incorporate similar finishdetail. Exterior finish materials utilize a combination of vertical metal siding and horizontal vinylsiding as indicated on Map Ill. The proposal also meets the minimum building designrequirements of the MR-4 zone.

Access and Servicing

• Access, servicing and lot grading, including storm water attenuation, are to be to the satisfactionof the Director of Engineering & Operations.

• The applicant is to negotiate in good faith to provide a parcel of land 2 metres wide tapering to 1metre wide along the frontage of both properties (PIO 01452697 and PIO 75002196). The land isto be added to the right-of-way for the purpose of future bike lane improvements on PriestmanStreet.

• Property is located in Wellfield Zone C; all plans must conform to the NB Wellfield Protected AreaDesignation Order. Refer inquiries to the City Wellfield Protection Officer.

• Shut-off-at-main fees will be required for one or both of the services to the existing houses.

RECOMMENDATION:

It is recommended the application submitted by Ann Scovil Architect for the following: • to rezone land from MR-2 to MR-4;• a 427m2 lot area variance, 5 stall parking variance, 3% landscaped area variance,

in order to construct a 24 unit apartment building on property located at 328 - 338 Priestman Street be approved subject to the following terms and conditions:

a) The site be developed generally in accordance with Map II attached to P.R.19/19 to thesatisfaction of the Development Office;

b) Final building design be substantially in accordance with Maps Ill and IV attached to P.R. 19/19 tothe satisfaction of the Development Officer;

c) A final landscape and parking plan be provided showing new tree and shrub planting details,existing trees and shrubs to be retained along the rear, parking lot paving/curbing, screen fenceand garbage enclosure screening detail to the satisfaction of the Development Officer prior toissuance of the building permit;

d) Lot consolidation and registration of an agreement reflecting the shared driveway/access/garbagelocation to the satisfaction of the Development Officer;

e) The land owner negotiate in good faith to sell a strip of land 2 metres wide tapering to 1 metrewide from west to east along the frontage of the site to be added to the Priestman Street right-ofway;

40

f) Access, servicing and lot grading, including storm water attenuation, are to be to the satisfactionof the Director of Engineering & Operations;

g) Property is located in Wellfield Zone C; all plans must conform to the NB Wellfield Protected AreaDesignation Order. Refer inquiries to the City Wellfield Protection Officer.

Tony Dakiv, RPP, MCIP Senior Planner, Community Planning

ii� Marcello Battilana, MCIP

Manager, Community Planning

41

Community Planning Planification urbaine

1-1

363

� Subject Properties / Proprietes Vise

Rezone from MR-2 to MR-4.

Modification du zonage de MR-2 a MR-4

Map\ carte# I

File\ fiche: PR-19-2019

Scale 1:11000

Date\ date: avril \ April 17, 2019

Subject\ sujet: rue 328 Priestman Street

Ann Scovil

42

FREDERICTON HIGH SCHOOL GREEN SPACE

PROPERTY UNE ·-·-·-·-·-·-·-·

--!

SHARED GARBAGE

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Ann Scovil

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45

Regular City Council Meeting – May 13, 2019

PUBLIC PRESENTATION OF

BY-LAW NO. Z-1.51

At the Regular City Council meeting held on April 29, 2019, City Council adopted a

resolution authorizing the preparation of a by-law to amend the Municipal Plan with

respect to property located at 175 Limerick Road and set this meeting as the date for

the public presentation.

The purpose of the proposed by-law is to amend the Municipal Plan by re-designating

the property located at 175 Limerick Road from “Recreation” to “Residential”.

I wish to advise the public that proposed By-law No. Z-1.51 is available for public

perusal at the Office of the City Clerk in City Hall, and on the City of Fredericton’s

Website. Written objections may be submitted within the next 30 days.

46



From: Office of the City Clerk Date: Wednesday, May 01, 2019 Title: 2018 Audited Financial Statements Description: Receipt of the 2018 Audited Financial Statements

The Finance and Administration Committee, at its meeting held on May 13, 2019 reviewed a PowerPoint presentation by the Acting Director of Finance, Innovation & Technology and reviewed the 2018 Audited Financial Statements audited by EY. The Committee directed that the following resolution be forwarded to City Council for consideration: BE IT RESOLVED that the 2018 Audited Consolidated Financial Statements of the City of Fredericton, be received.

REPORT OF FINANCE & ADMINISTRATION COMMITTEE


47

City of Fredericton 2018 audit results | 0Confidential –Ernst & Young LLP

Executivesummary

Audit results

Results of IT procedures

Misstatements

Appendices

This is an interactive PDF

Please use the navigation bar to your right, the arrow icons or the tabs, to begin. The middle of the Executive summary page also has navigation for each of the main categories and sub-categories allowing you easy navigation through the materials.

Inquires

City of Fredericton

2018 audit results

23 April 2018

48


Executivesummary

Audit results


Misstatements

Inquires

Appendices

Executive summary

• Our commentary highlights areas that, in our view, are subject to significant judgement and complexity, thereby requiring heightened professional skepticism as we completed our audit procedures.

Results

• Review of final financial statements

• Performance of subsequent event procedures through the date of issuance of the financial statements

• Obtaining the executed letter of representations from management

• External legal confirmation

• Fraud and other inquiries with the Finance & Administration Committee and management (to be conducted at this meeting)

Open items

• Reasonable judgments and consistency in methodology have been used by management to account for sensitive accounting estimates.

• The results of our tests of controls were effective.

• The total impact of the unadjusted audit differences identified during the audit resulted in an overstatement of the annual surplus of $224K.

▪ Accounting policies and estimates

▪ Financial statement discussion and analysis

ComplianceSignificant considerations Required communications

▪ Corrected and uncorrected misstatements

▪ Results of IT procedures

▪ Inquiries relating to matters relevant to the audit

▪ Employee pension plan accounting

▪ Tangible capital assets

▪ Revenue recognition

▪ Budget information in financial statements

▪ Compliance with the Municipal Financial Reporting Manual and Public Sector Accounting Standards (“PSAS”)

▪ Oracle implementation

49


Audit results

Executivesummary


Misstatements

Appendices

Inquires

Provided below is a summary of the City’s critical accounting policies (CAP) and sensitive accounting estimates (SAE), which are in accordance with Public Sector Accounting Standards (“PSAS”).

Description of accounting policyOur views on the quality and application of the Accounting Policy

• Revenue recognition

Taxation revenues are recorded in the period to which the assessment relates and reasonable estimates of amounts can be made.

Government grants and services revenues are recognized when they are authorized and when eligibility criteria has been met. Under certain circumstances, agreements may create a liability which is deferred until certaincriteria are met.

• Tangible capital assets

Tangible capital assets (“TCAs”) are recorded at cost, which includes all amounts directly attributable to acquisition, construction, development or betterment of the asset, and are amortized on a straight-line basis over their estimated useful lives.

Amortization begins in the year after the asset has been put into use. Assets under construction are not amortized until they are put into use.

Revenue recognition:

We believe that the City’s revenue recognition accounting policy and the application thereof are appropriate and in accordance with the application of PS 1000, PS 3410 and PS 3510.

Additionally, we reviewed the disclosures relating to revenue recognition and found them to be appropriate and in conformity with PSAS.

Tangible capital assets:

We believe that the City’s accounting policies for TCAs and application thereof are appropriate, except for amortization, which should begin when the asset is put into use. This difference is immaterial for the Financial Statements as at December 31, 2018.

Additionally, we reviewed the disclosures made by the City and found them to be appropriate and in conformity with PS 3150.

Type: CAP

Accounting policies and estimates

Important updates

50


Audit results

Executivesummary


Misstatements

Appendices

Inquires

Our audit procedures emphasize testing those processes, accounts, contracts or transactions where we believed there was the greatest potential for risk of material misstatement to the consolidated financial statements, whether due to error or fraud, including disclosure items. We considered the effects of current market risk factors on the City, the areas where potential for management bias may exist, and also placed emphasis on those areas requiring subjective determinations by management with heightened professional skepticism. Our audit procedures at the City included additional focus on the following areas:

Key issue / risk area Summary of procedures and findings

• Employee pension plan accounting

The City provides benefits to its employees in accordance with the New Brunswick Pension Benefits Act. In 2013, the City entered into a Memorandum of Understanding (“MOU”) with four of the six unions representing employees of the City. The MOU established a new pension plan and converted the existing defined benefit plan into a Shared Risk Plan (“SRP”) for the employees belonging to the four unions in question. Therefore, as of December 31, 2018, the City provided benefits under a Defined Benefit plan (“DB”) as well as an SRP. The City accrues its obligations under employee future benefit plans and the related costs, net of plan assets. The City has adopted the following policies:

• The cost of pensions earned by employees is actuarially determined using the projected benefit method prorated on service and management's best estimate of expected plan investment performance, salary escalation and retirement ages of employees.

• For the purpose of calculating the expected return on plan assets, those assets are valued at fair value.

• Past service costs from plan amendments are recognized as expenses in the period of the plan amendment.

• Current service costs are expensed during the year.

• The excess of net actuarial gain (loss) is amortized over the average remaining service period of active employees, which is estimated to be 16 years for the DB Pension Plan and 13 years for the retirement allowance benefit.

• The City has a Supplemental Executive Retirement Plan (“SERP”) for eligible employees.

• City employees are entitled to a retirement allowance under collective agreements or in accordance with City policy. The liability is actuarially determined.

• The DB plan continues to be accounted for under the standards as outlined in PS 3250 of the Public Sector Accounting Manual.

• EY engaged EY actuaries to review the accounting valuation of the DB plan including key assumptions used by management in determining the value of the plan. Based on the procedures performed, no issues were identified.

Area of audit emphasis

Important updates

51


Audit results

Executivesummary


Misstatements

Appendices

Inquires


• Employee pension plan accounting (continued)

• Under the enabling legislation for Shared Risk Pensions (SRP), the sole obligation of the employer is to make contributions required by the funding policy. The SRP is a funding and risk management plan where the contribution level provides the desired security levels for pension benefits.

• For the SRP, the City has not recorded a liability on its consolidated financial statements since pension obligations are transferred to the new SRP and the sole obligation for the City is for the contributions defined by the plan. The City has recorded, as a pension expense only, the amount of the contributions it has paid into the SRP.

• Given the absence of specific guidance in PS 3250 for the accounting of SRPs, considerable professional judgment is required to determine the percentage of risk (if any) assumed by the City under the SRP and how to measure the related obligation.

• The City’s sole risk under the SRP is that resulting from the trigger of increased contribution rates, subject to a maximum of 2.25%, should the funding level fall below a certain threshold for two consecutive years.

• In EY’s perspective, the risk associated with this potential increase should be accounted for in a manner similar to the standards followed for a DB plan, adjusted for the risk level assumed by the City. In that respect, an asset or liability, as the case may be, should be reported on the City’s balance sheet with appropriate disclosure in the notes to the financial statements. However, given the lack of accounting guidance as stated previously, the measurement of this item presents estimation difficulties and uncertainty. With assistance from EY actuaries, we estimated that the City would have recorded a liability as at 31 December 2018 of $4.2 (2017 - $4.7M) with a corresponding adjustment on pension expense of ($510K) for the year ended 31 December 2018 (2017 - $311K). This has been included in our summary of audit differences.

• In light of the above uncertainty, management of the City has taken the position that it would not record any asset or liability relative to the SRP in the current year. However, it has provided certain relevant information in the notes to the financial statements.

• It should be noted that the pension liability determined for accounting purposes does not change the contributions required from the City for funding purposes and therefore has no impact on the annual municipal budget and tax rates.

• EY will annually revisit the accounting treatment of the SRP plan, as new guidance emerges.


Important updates

52


Audit results

Executivesummary


Misstatements

Appendices

Inquires


• Revenue recognition

• Tangible capital assets

• We updated our understanding of the revenue recognition process, performed a walkthrough of the revenue classes of transactions and evaluated the design of controls in these areas;

• We tested relevant controls over the identified risks;

• We performed substantive audit procedures, which included detailed testing of significant revenue transactions during the year, tracing to third party support for delivery and evidence of an arrangement. For transactions tested, we also assessed whether the revenue recognized was measurable and collectible;

• We performed substantive analytics over recognized taxation revenues based on confirmations obtained from the Province of New Brunswick and based on municipal tax rates as approved by City Council; and

• Finally, we validated the completeness of government grant and service revenues by testing significant government grants and service revenues recognized during they year.

Based on the procedures performed, no issues were identified.

• We substantively audited additions by tracing to supporting documentation to ensure criteria for capitalization have been met;

• We substantively audited repairs and maintenance by tracing to supporting documentation assessing whether criteria for capitalization have been met;

• We substantively audited disposals by tracing to supporting documentation and recalculating the gain or loss on disposal;

• We recalculated depreciation and reviewed the assumptions used for the useful life and depreciation methods; and

• We performed an impairment analysis on the tangible capital asset balance and identified no conditions indicating that a TCA no longer contributed to the City’s ability to provide goods and service, or that the value of future economic benefits associated with the TCAs was less than its net book value.

• Through our audit procedures, we identified one judgemental errors: understatement of depreciation expense of $734K (2017 – $470k).

Based on the procedures performed, no other issues were identified.


Important updates

53


Audit results

Executivesummary


Misstatements

Appendices

Inquires


• Financial statement discussion and analysis (“FSDA”)

• Budget information in financial statements

Canadian Auditing Standard 720 The Auditor's Responsibilities Relating to Other Information in Documents Containing Audited Financial Statements. The City includes its consolidated financial statements into its annual reporting including the financial statement discussion and analysis which is in the scope of CAS 720. The auditor’s opinion does not cover other information and the auditor has no specific responsibility for determining whether or not other information is properly stated.

Management is responsible for the other information contained within the FSDA. The auditor’s responsibility is to read the other information to determine whether the other information contained within FSDA is materially consistent with the audited financial statements

Audit Response:

• We made arrangements with management to obtain the FSDA prior to the release date to enable us to resolve possible inconsistencies with management on a timely basis; and

• Prior to the release of the City’s annual report, we will read the FSDA to confirm that there are no material inconsistencies with the audited financial statements.


Paragraph A19 of CAS 7000, Forming an Opinion and Reporting on Financial Statements, states that the auditor’s opinion covers the complete set of financial statements as defined by the applicable financial reporting framework. Accordingly, the auditor’s opinion would cover comparisons of actual and planned results or planned amounts included in the statement of operations and the statements of change in net debt. It would be inappropriate for planned results or planned amounts to be marked as unaudited.

Auditors are required to obtain sufficient appropriate audit evidence to express an opinion whether the financial statements are prepared, in all material respects, in accordance with the applicable financial reporting framework, which under Canadian Public Sector Accounting Standards includes the presentation of planned results and planned amounts. The procedures may vary depending on the extent that the auditor uses comparisons of actual and planned results or planned amounts when performing the audit.


Important updates

54


Audit results

Executivesummary


Misstatements

Appendices

Inquires


• Budget information in financial statements (continued)

• Compliance with the Municipal Financing Reporting Manual and Public Sector Accounting Standards (“PSAS”)

Audit Response

• We obtained the final approved budget and compared budgeted amounts in the financial statements to the final approved budget; and

• We examined the schedule in the financial statements which reconciles the budgeted amounts to be in accordance with PSAS.


In addition to complying with PSAS, the City is also required to comply with the Municipal Financial Reporting Manual ("MFRM“) prescribed by the Province of New Brunswick ("PNB“). Differences in accounting policies include the methodology for accounting for TCAs, government transfers, and liability accruals for the pension fund and other retirement benefits. The PSAS also requires full consolidation of funds.

Audit Response

• We reviewed the financial statements for compliance with required standards. Certain areas per the MFRM are still required to be disclosed regardless of PSAS;

• We reviewed PSAS year end accounting adjustments and disclosures; and

• We reviewed the City’s inter-fund accounts to ensure that the balances included are current items only and disclosure is appropriate.



Important updates

55



Executivesummary

Audit results

Misstatements

Inquires

Appendices

2018



Location/ subsidiary Application Financial significance ITGC Evaluations*

Fredericton, NB BannerIntegrated financial management

application (January 2018 to September 2018)

Manage Access: Reliable Manage Change: Reliable

Manage IT Operations: Effective

Fredericton, NB Cogsdale Billing software program Manage Access: Reliable Manage Change: Reliable


Fredericton, NB Oracle FinancialsIntegrated financial management application ( September 2018 to

December 2018)

Manage Access: Reliable Manage Change: Reliable


Observations on the IT environment

• IT staff are knowledgeable about internal IT processes and the importance of security within internal controls.

• The Oracle environment is in the process of stabilization since implementation in September 2018. Consequently, there is an increased focus on internal knowledge building and establishment of the application.

• Our testing of the IT Processes identified breakdowns in the Manage Access process. We encountered instances where access was not removed timely and where access was granted or modified without an audit trail.

• Our testing of the IT Processes identified breakdowns in the Manage Change process. We encountered changes that were implemented with no design approval and no documented approval by the business user to implement into production.

• Due to the findings above, additional procedures were performed by EY. As a result of these procedures, we were able to conclude that ITGCs can be relied upon.

*EY was able to place reliance on the ITGCs related to the Manage IT Operations Process, resulting in an effective conclusion over this process. EY was unable to place

reliance on the ITGCs related to the Manage Access and Manage Change processes. EY performed additional IT substantive procedures to support the controls

associated with the Manage Access and Manage Change processes to achieve a reliable conclusion for audit purposes.

56



Executivesummary

Audit results

Misstatements

Inquires

Appendices

Oracle implementation

Outcome of planed audit procedures over Oracle implementation Summary of planned audit procedures over Oracle implementation

Functionality review — Testing was performed over the application functionality to validate that the application is functioning as intended. A review of key security settings were performed to validate that they are defined in accordance with EY recommended practice. No exceptions were identified.

Internal control — For each process that was impacted by the conversion, EY walked through each process and tested its controls prior to the conversion as well as after the conversion to ensure the control environment was designed and operating effectively in both environments (i.e. prior to the conversion and immediately following the conversion). For any exceptions identified, compensating controls were relied upon or substantive procedures were performed to address the risk exposure.

Data integrity – Data validation and testing was performed to provide comfort that data was appropriately migrated from the legacy IT application to the new application. 100% of all chart of accounts balances, at the point of conversion, were traced from Banner to Oracle. A sample of transactions were selected from Oracle and traced to Banner. EY traced opening balances, closing balances and the sum of credits and debits from Banner to Oracle and from Oracle to Banner.

Users – User access was reviewed to obtain comfort that users′ have appropriate levels of access in the new application considering their previous access in the legacy application and considering their role within the organization.

Functionality review — With new application implementations, there is an increased risk of failure to make the necessary changes to the application that could affect its ability to support effective internal controls that enable appropriate financial reporting. Procedures are required to be performed to validate whether all necessary changes are made.

Internal control — Failure to effectively integrate internal controls into the implementation could negatively affect the internal control environment. An understanding of the business processes affected by the implementation and how they were impacted must be obtained. For each process that is impacted by the conversion, EY will walk through each process and test its controls prior to the conversion as well as walk through and identify, understand and test all controls (including new or changed controls) after the conversion to ensure the control environment is designed and operating effectively in both environments. For all processes and controls that are not impacted by the conversion, we will continue to walk through and test controls consistent with prior audits′ time table.

Data integrity – Data validation and testing is required to provide comfort that data was appropriately migrated from the legacy IT application to the new application. Procedures are required to be performed over the data migration to ensure that the integrity of the data was maintained.

Users – Testing over user access is required to obtain comfort that users and their access was appropriately migrated. Procedures are performed to validate that users′ have appropriate levels of access in the new application considering their previous access in the legacy application and considering their role within the organization.

2018


Observations on the Oracle implementation

• As it relates to the implementation of Oracle, from a project governance perspective, we encountered instances where supporting documentation could not be found. We observed that:

• There was no standardized methodology to retain project artifacts in a consistent and organized manner.

• A method of version control was not consistently applied for the files retained.

• There were no individuals responsible to obtain and store project artifacts, such as data extracts and data reconciliations performed as part of the data conversion. This resulted in a lack of documentation to satisfy audit requirements.

57


Misstatements

Executivesummary

Audit results


Inquires

Appendices

During the course of our audit, we accumulate differences between the amount, classification, presentation and disclosure of a financial statement item recorded or reported by the City and the amount, classification or presentation and disclosure that we believe is required to be recorded or reported under PSAS.Summary

Misstatements

City of Fredericton

Uncorrected misstatements

Below is a summary of those misstatements we have identified through the date of this report that impact the current period annual surplus and that have not been correctly by the City. These uncorrected misstatements, individually and in the aggregate, are not material to the City’s consolidated financial statements.

Impact if adjusted (in thousands of CAD)Debit/(credit)

For the year ended December 31, 2018 December 31, 2017

DescriptionAssets

debt / (credit)Liabilities

debt / (credit)Equity

debt / (credit)

Income statement

debt / (credit)

Income statement

debt / (credit)

Understatement of depreciation expenses (734) - - 734 470

Shared risk plan pension expense - (4,220) 4,730 (510) (311)

Total unrecorded differences (734) (4,220) 4,730 224 159

58


Inquires

Executivesummary

Audit results


Misstatements

Appendices

We made inquiries of you in your Finance & Administration Committee meeting in November 2018 related to fraud and other matters that helped inform our audit strategy and the execution of our audit procedures. As part of our upcoming meeting, we will update our inquiries of you to understand any other matters of which you believe we should be aware, including, but not limited to the following:

• Your views about the risks of material misstatements due to fraud, including the risks of management override of controls

• Your knowledge of any actual, alleged or suspected fraud

• Your awareness of tips or complaints regarding the City’s financial reporting (including those received through the Finance &Administration Committee’s own “whistleblower” program, if any) and its response to such tips and complaints

• How you exercise oversight over the City’s assessment of fraud risks and the establishment of controls to address these risks

• Your awareness of other matters relevant to the audit including, but not limited to, violations or possible violations of laws or regulations

Inquires Inquiries relating to matters relevant to the audit

2018

59


Appendices

Executivesummary

Audit results


Misstatements

Inquires

Appendices

A Auditor’s report

B Summary of required communications

C Independence letter

D Digital audit

60


Appendices

Executivesummary

Audit results


Misstatements

Inquires

To His Worship The Mayorand Members of City Council of the City of Fredericton

OpinionWe have audited the accompanying consolidated financial statements of the City of Fredericton [the “City”], which comprise the consolidated statement of financial position as at December 31, 2018, and the consolidated statements of operations and accumulated surplus, changes in net debt and cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the City as at December 31, 2018 and the results of its operations and its cash flows for the year then ended in accordance with Canadian public sector accounting standards.

Basis for opinionWe conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the City in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of management and those charged with governance for the financial statementsManagement is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian public sector accounting standards and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the City’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the City or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the City’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statementsOur objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

Auditor’s report

Appendix A Auditor’s report (Draft)

61


Appendices

Executivesummary

Audit results


Misstatements

Inquires

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the City’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the City to cease to continue as a going concern.

• Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Fredericton, CanadaApril 23, 2019

Auditor’s report

Appendix A Auditor’s report (Draft) – [Continued]

62


Appendices

Executivesummary

Audit results


Misstatements

Inquires

Required communication

Appendix B

• Provided below is a summary of required communications between the audit team and the Finance & Administration Committee as required by Canadian GAAS.

Services and deliverablesCommunicate when event occurs

Communicate on a timely basis, at least annually

Auditor’s responsibility under Canadian GAAS, including discussion of the type of opinion we are issuing

Page 17

Overview of planned scope and timing Page 17

Our responsibility, any procedures performed and the results relating to other information in documents containing the audited financial statements

Page 17

Significant issues discussed with management in connection with the auditor’s initial appointment or recurring retention

Page 18

Significant corrected misstatements, including significant disclosure differences that merit the attention of those charged with governance

Page 18

Uncorrected misstatements, including significant disclosure differences that merit the attention of those charged with governance, considered by management to be immaterial

Page 18

Critical accounting policies and practices Page 19

Our judgments about the quality of the City’s accounting principles Page 19

The adoption of, or a change in, an accounting policy Page 19

Methods of accounting for significant unusual transactions and for controversial or emerging areas

Page 19

63


Appendices

Executivesummary

Audit results


Misstatements

Inquires


Appendix B

Services and deliverablesCommunicate when event occurs

Communicate on a timely basis, at least annually

Sensitive accounting estimates Page 20

Material alternative accounting treatments discussed with management Page 20

Disagreements with management Page 20

Management’s consultations with other accountants Page 21

Serious difficulties encountered in dealing with management when performing the audit

Page 21

Fraud and non-compliance with laws and regulations (illegal acts) Page 21

Other material written communications with, and representations sought from management

Page 21

Independence matters Page 22

Other findings or issues regarding the oversight of the financial reporting process Page 22

Subsequent events Page 22

Findings regarding external confirmations Page 22

Related party transactions Page 22

64


Appendices

Executivesummary

Audit results


Misstatements

Inquires


Appendix B

Area Comments

Auditor’s responsibility under Canadian GAAS, including discussion of the type of opinion we are issuing

The financial statements are the responsibility of management. Our audit was designed in accordance with Canadian auditing standards to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement.

Upon completion of our remaining audit procedures, we currently expect to issue an unqualified opinion on the City’s financial statements as of and for the year ended 31 December 2018.

Overview of planned scope and timing

We discuss with those charged with governance an overview of the planned audit scope and timing. These discussions are intended to assist those charged with governance in better understanding the consequences of the auditor’s work for their oversight activities, discussing with the auditors issues of risk and materiality, and identifying any areas for which they may request the auditor to undertake additional procedures.

Communicated with the audit planning session held on November 2018.

There were no significant changes in the planned scope of our audit.

Our responsibility, any procedures performed and the results relating to other information in documents containing the audited financial statements

Our auditor’s report on the financial statements relates only to the financial statements and accompanying notes. However, we also review other information such as the Financial statement discussion and analysis, and consider whether such information, or the manner of its presentation, is materially inconsistent with the audited financial statements.

If we conclude that a material inconsistency exists, we determine whether the financial statements, our auditor’s report, or both, require revision. In addition, we notify you if we conclude that there is a material misstatement of fact in the other information.

When it is available, we will review the City’s Financial statement discussion and analysisto ensure consistency with the audited financial statements.

65


Appendices

Executivesummary

Audit results


Misstatements

Inquires


Appendix B

Area Comments

Significant issues discussed with management in connection with the auditor’s initial appointment or recurring retention

We discuss with the Finance & Administration Committee any major professional issues that were discussed (orally or in writing) with management in connection with our initial appointment or recurring retention as the auditor, including, among other matters, any discussions regarding the application of accounting principles and auditing standards, the scope of the audit, financial statement disclosures and the wording of the auditor’s report. We communicate those major professional issues we discussed with management, prior to our being hired as the auditors, during the client’s two most recently completed fiscal years and any subsequent interim period.

None.

Significant corrected misstatements, including disclosure differences that merit the attention of those charged with governance

We provide the Finance & Administration Committee with information about corrected misstatements and disclosure differences that merit the attention of those charged with governance arising from the audit that could in our judgment, either individually or in the aggregate, have a significant effect on the City’s financial statements.

Refer to the “Summary of audit differences (SAD)” section.

Uncorrected misstatements, including disclosure differences that merit the attention of those charged with governance, considered by management to be immaterial

We inform the Finance & Administration Committee about uncorrected misstatements accumulated by us (i.e., adjustments either identified by us or brought to our attention by management) during the current audit and pertaining to the latest period presented that were determined by management to be immaterial, both individually and in the aggregate, to the financial statements as a whole.

Refer to the “Summary of audit differences (SAD)” and “Summary of significant disclosure differences” sections.

66


Appendices

Executivesummary

Audit results


Misstatements

Inquires


Appendix B

Area Comments

Critical accounting policies and practices

We communicate all critical accounting policies and practices used by the City in preparing the financial statements and our assessment of the disclosure of such policies.

We have provided our views in the section titled, “Accounting policies and estimates”.

Our judgments about the quality of the Company’s accounting principles

We discuss our judgments about the quality, not just the acceptability, of the accounting principles as applied in the City’s financial reporting, including the consistency of the accounting policies and their application, accounting estimates and the clarity and completeness of the financial statements and related disclosures.

We have provided our views in the sections titled “Accounting policies and estimates” and “Areas of audit emphasis”.

The adoption of, or a change in, an accounting principle

We determine that the Finance & Administration Committee is informed about the initial selection of, and any changes in, significant accounting principles or accounting policies or their application when the accounting principle or its application, including alternative methods of applying the accounting principle, has a material effect on the financial statements.

None.

Methods of accounting for significant unusual transactions and for controversial or emerging areas

We determine that the Finance & Administration Committee is informed about the methods used to account for significant unusual transactions and the effects of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

We have provided our views in the section titled “Areas of audit emphasis”.

67


Appendices

Executivesummary

Audit results


Misstatements

Inquires


Appendix B

Area Comments

Sensitive accounting estimates

The preparation of the financial statements requires the use of accounting estimates. Certain estimates are particularly sensitive due to their significance to the financial statements and the possibility that future events may differ significantly from management’s current judgments.

We determine that the Finance & Administration Committee is informed about management’s process for formulating particularly sensitive accounting estimates and about the basis for our conclusions regarding the reasonableness of those estimates.

We have provided our views in the section titled, “Accounting policies and estimates”.

Material alternative accounting treatments discussed with management

We discuss with the Finance & Administration Committee all alternative accounting treatments within PSAS for policies and practices related to material items (including recognition, measurement, presentation and disclosure alternatives) that have been discussed with management during the current audit period including:

▪ Ramifications of the use of such alternative disclosures and treatments, including the reasons why the alternative was selected and, if management did not select our preferred alternative, the reasons why it was not selected.

▪ The treatment preferred by us.

We have provided our views in the sections titled “Areas of audit emphasis” and the “Summary of audit differences (SAD)”.

Disagreements with management

We discuss with the Finance & Administration Committee any reportable disagreements with management, whether or not satisfactorily resolved, about matters that individually or in the aggregate could be significant to the City’s financial statements or the auditor’s reports.


68


Appendices

Executivesummary

Audit results


Misstatements

Inquires


Appendix B

Area Comments

Management’s consultations with other accountants

When we are aware that management has consulted with other accountants about accounting, auditing or reporting matters, we discuss with the Finance & Administration Committee our views about significant matters that were the subject of such consultation.

None of which we are aware.

Serious difficulties encountered in dealing with management when performing the audit

We inform the Finance & Administration Committee of any serious difficulties encountered in dealing with management related to the performance of the audit.

None.

Fraud and non-compliance with laws and regulations (illegal acts)

We communicate to the Finance & Administration Committee fraud and non-compliance with laws and regulations (illegal acts) involving senior management and fraud (whether caused by senior management or other employees) that causes a material misstatement of the financial statements.

We also communicate other matters of non-compliance with laws and regulations (illegal acts) that come to our attention during the audit, unless they are clearly inconsequential.

We are not aware of any matters that require communication.

Other material written communications with, and representations sought from management

We determine that the Finance & Administration Committee has received copies of all material written communications with management, including representations requested from them related to uncorrected errors.

We have previously provided you with a copy of the following communications with management:

▪ Engagement letter

▪ Our independence letter is included in Appendix C of this report.

69


Appendices

Executivesummary

Audit results


Misstatements

Inquires


Appendix B

Area Comments

Independence matters

We communicate, at least annually, the following to the Finance & Administration Committee:

▪ Describe, in writing, all relationships between EY and our associated entities and the City and its affiliates or persons in financial reporting oversight roles at the City that may reasonably be thought to bear on our independence;

▪ Discuss with the Finance & Administration Committee the potential effects of those relationships on independence;

▪ Affirm, in writing, that we are independent with respect to the City within the meaning of Canadian professional standards; and

▪ All breaches of our independence policy, regardless of materiality or significance.

Our independence letter is included in Appendix C to this report.

Other findings or issues regarding the oversight of the financial reporting process

We communicate other findings or issues, if any, arising from the audit that are, in our professional judgment, significant and relevant to the Finance & Administration Committee regarding their oversight of the financial reporting process.

There are no other findings or issues arising from the audit that are, in our judgment, significant and relevant to the Finance & Administration Committee regarding the oversight of the financial reporting process.

Subsequent events

We inquire of management and, where appropriate, those charged with governance as to whether any subsequent events have occurred which might affect the financial statements.


Findings regarding external confirmations

We discuss with those charged with governance any instances where management has not permitted us to send confirmation requests, or where we cannot obtain relevant and reliable audit evidence from alternative procedures.

None.

Related party transactions

The auditor shall communicate with those charged with governance significant matters arising during the audit in connection with the entity's related parties.

We have provided a discussion of the related party relationships and transactions in the section titled “Areas of audit emphasis” beginning on page 3, including a discussion of the process, the policies and procedures used by management to identify, account for and disclose its relationships and transactions with related parties.

We did not identify any other significant matters regarding the City’s relationships and transactions with related parties.

70


Appendices

Executivesummary

Audit results


Misstatements

Inquires

Independence letter

Appendix C

18 April 2019

Mr. Greg Ericson,Chair. Finance & Administration CommitteeCity of FrederictonP.O. Box 130Fredericton, NB, E3B 4Y7

We have been engaged to audit the consolidated financial statements of the City of Fredericton (the City) for the year ending 31 December 2018.

Pursuant to Canadian generally accepted auditing standards, we communicate at least annually with you regarding all relationships between Ernst & Young and itsrelated entities and the City and its related entities that, in our professional judgment, may reasonably be thought to bear on our independence.

We have prepared the following comments to facilitate our discussion with you regarding independence matters arising since 22 March 2018, the date of our lastletter. We are not aware of any relationships between Ernst & Young and the City that, in our professional judgment, may reasonably be thought to bear on ourindependence since 22 March 2018, the date of our last letter.

Accordingly, we hereby confirm that we are independent with respect to the City within the meaning of the Rules of Professional Conduct of the CharteredProfessional Accountants of New Brunswick as of 18 April 2019. The engagement team and others in the firm as appropriate, the firm and, when applicable, networkfirms have complied with the relevant ethical requirements regarding independence.

We look forward to discussing with you the matters addressed in this letter at our upcoming meeting on 23 April 2018.

This report is intended solely for the use of the Finance & Administration Committee of the City of Fredericton, management, and others within the City and shouldnot be used for any other purposes.

Yours truly,

Ernst & Young LLP

71


Appendices

Executivesummary

Audit results


Misstatements

Inquires

Digital audit

Appendix D

We have embarked on a major initiative, driven by innovation and digital technologies, to make our audit even more quality-conscious, agile, efficient and relevant. By sharing, honing and deploying new approaches, tools and services, our teams are poised to work smarter and differentiate our audits from the competition. Our approach is based on the premise that we are subject to the same disruption as the companies we serve and we must constantly evolve to deliver against our overarching ambition: to provide trust and confidence in the capital markets and deliver on our purpose of building a better working world for our people, our clients and our communities.

EY CanvasOur global online, integrated audit platform

EY Canvas Client PortalDashboard

Time Phase Summary

Ben Brown

Alex Lowe

Ext Grp 1

Jane Smith

TEAM MEMBERS

31/05/2016

10/09/2016

DUE DATE

15/ 15

9/ 11

TIME PHASE PROGRESS

Scoping

Year End 2/8 20/02/2017

REQUESTS

Interim

David Wallace

My Engagement Summary All Engagement Summary

Company XYZ Half Year Review 2016

15

SENT

1

1NEW

My Engagement Summary All Engagement Summary Time Phase Summary

REQUESTS

Ben Brown

Alex Lowe

Ext Grp 1

Jane Smith

TEAM MEMBERS

RECEIVED

Company XYZ Year End Audit 2016

Company XYZ TASKS DOCUMENTS MORECompany XYZ Year End Audit

All Engagement Summary

All Tasks

All Review Notes

16

0 18CONCLUSION

59SCOPE & STRATEGY EXECUTION

Group Audit Reporting Forms 24

PENDING RESPONSE

12

IN REVIEW

View More

SCOPE & STRATEGY EXECUTION CONCLUSION

ITGCs

General

Task Status

Accounts

SCOTs

23/31

53/104

61/61

48/48

Reference Documents

Add

Understand the business.docx

Audit strategymemorandum.docx

Management letter points.docs

Significant auditing and accounting….

Team My

2

100% 76% 0%

6 OVERDUE

TODAY

Engagement Feed

004–Adjusting pension fund

liability to reflect new annuity rates

2 hours ago

001–Pension liability assumptions

not updated periodically

3 hours ago

002–Extensive reliance on Excel

spreadsheets with complex calc

3 hours ago

001–Valuation system pricing

download

6 hours ago

My Engagement Summary

External Items

TASKS DOCUMENTS MORECompany XYZ

Company XYZ Year End Audit

Organizes your audit in a highly efficient and effective manner to manage and mitigate the risks identified in your company.

EY Mobile Apps

The EY digital audit: Faster. Simpler. Better.

EY Client Portal securely serves as an easy-to-navigate, centralized repository that analyzes the progress of requests by the entire audit, your individual requests or by a designated deadline.

EY’s Canvas mobile apps facilitate submission, review and sign-off of work, thereby decreasing bottlenecks and time spent in the field.

Our mobile apps allow us to fully view the progress of an audit in real time, allowing for more precise and transparent status updates from our team to yours.

72


Appendices

Executivesummary

Audit results


Misstatements

Inquires

Digital audit

Appendix D The EY digital audit: Faster. Simpler. Better.

By combining audit-relevant data and knowledge of City of Fredericton with our advanced EY Helix analytics and visualizations, we are able to ask better questions, enabling us to focus on the right risks and provide a higher-quality audit with better insights to you.

We will use data analytics and enhanced automation to test larger sets of data while reducing your burden to support the audit.

EY’s digital strategy, combined with our service approach that is connected, responsive and insightful, enables us to provide value to the Partnership by:

► Bringing consistency, speed and intelligence to our globalapproach, and reinforces our commitment and ongoingfocus to deliver the highest quality audits in theprofession

► Allowing us a deeper understanding of your business byanalyzing larger populations of audit-relevant data topresent a fuller picture of activities and identify the risksthat matter

► Identifying trends and anomalies in your processes andcontrols to help direct our audit efforts to the right areas

► Providing relevant feedback and insights during the audit,so you can optimize your business processes and controls

Digital is not optional. It's a must. We believe that the

digital audit should change the way our people work so

they can discover deeper insights, provide for more

informed decisions, and target the things that really

matter.

Value to City of Fredericton

We will collaborate with City of Fredericton and identify areas in which we can customize the focus on our audit innovation and investment. By jointly investing the time to identify areas that could benefit from leveraging new processes and tools, such as risk identification and full data testing, we are able to provide you with the most value and impact for the audit.

See the video below for EY’s vision of a digital audit today, tomorrow and in the future.

Please note: you will need wifi to view the

video

► Full data set testing to identify areas of focus

► Expanded audit analytics

► Provide broader assurance, deeper insights, robustpoints of view and greater productivity

73

https://players.brightcove.net/1066292269001/B18pIU7s_default/index.html?videoId=5520734303001

https://players.brightcove.net/1066292269001/B18pIU7s_default/index.html?videoId=5520734303001


EY | Assurance | Tax | Transactions | Advisory

About EYEY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.

EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com.

Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US.

About EY‘s Assurance ServicesOur assurance services help our clients meet their reporting requirements by providing an objective and independent examination of the financial statements that are provided to investors and other stakeholders. Throughout the audit process, our teams provide a timely and constructive challenge to management on accounting and reporting matters and a robust and clear perspective to audit committees charged with oversight.

The quality of our audits starts with our 60,000 assurance professionals, who have the breadth of experience and ongoing professional development that comes from auditing many of the world’s leading companies.

For every client, we assemble the right multidisciplinary team with the sector knowledge and subject matter knowledge to address your specific issues. All teams use our Global Audit Methodology and latest audit tools to deliver consistent audits worldwide.

© 2017 Ernst & Young LLP. All Rights Reserved.

Executivesummary

Audit results


Misstatements

Inquires

Appendices

74

Financial Statements Year Ended December 31, 2018

75

Vision

In the future, Fredericton (the City) will continue to be a vibrant, prosperous, and smart city. Fredericton

will be a livable city compatible with its rich heritage and natural attributes. The City will proudly project

its role as the provincial capital, as well as the centre for higher education, culture and the

knowledge industry.

Growth and development will occur at a human scale compatible with the environment. Fredericton will

be a livable city with an abundance of open spaces provided. This will continue to be one of its most

cherished qualities. Fredericton is, and will continue to be, a city that affords its citizens a high quality of

life. (Abbreviated version from the City’s Municipal Plan)

Mission

Contributing to the Quality of Life in our Community

The City of Fredericton is committed to providing leadership, in partnership with community leaders, to

enhance the quality of life for its citizens and to deliver services in an effective, efficient, professional and

financially responsible manner.

Program Results Areas

Governance and Civic Engagement: Vision, leadership and decision-making for the common good, generated by an informed and engaged community working in collaboration with City government.

Corporate Efficiency: Efficient, effective and responsive Corporate services.

Mobility: A safe, multi-modal transportation system with varied opportunities for the movement of people and goods.

Livable Community: A socially progressive and diverse community guided by comprehensive, sustainable community planning offering varied opportunities for cultural enrichment and active living, and ensuring the preservation of the City’s cultural and historical identity.

Economic Vitality: Focused economic growth, stability and prosperity.

Environmental Stewardship: A community that respects its natural environment, minimizes its environmental impact, and adapts to and mitigates climate change.

Public Safety: A safe and secure community.

Sustainable Infrastructure: Municipal infrastructure planned and financed in a sustainable manner.

76

2

Table of Contents Governance and Strategic Management ...................................................................................................... 3

Financial Statement Discussion & Analysis ................................................................................................... 4

Introduction .............................................................................................................................................. 4

Highlights .................................................................................................................................................. 4

Infrastructure Condition and Deficit ....................................................................................................... 13

Infrastructure Condition ..................................................................................................................... 16

Assessment of Financial Trends .............................................................................................................. 17

Change in Net Debt ............................................................................................................................. 17

Debt Servicing Costs ............................................................................................................................ 17

Improving Asset-to-Liability ratio ....................................................................................................... 17

Taxpayer Affordability ......................................................................................................................... 18

Municipal Tax Burden ......................................................................................................................... 18

Declining Surplus-to-Tax Assessment ................................................................................................. 19

Risks and Uncertainties ........................................................................................................................... 19

Strategies and Techniques for Managing Risk ........................................................................................ 21

Indicators of Financial Health ................................................................................................................. 22

Financial Statements ................................................................................................................................... 25

77

3

Governance and Strategic Management A council composed of a mayor and twelve councillors elected by ward governs the City of Fredericton. The Council is responsible for setting policy that is administered for residents by professional management and staff.

Current Policy is guided by the Capital City Municipal Plan, which was adopted by Fredericton City Council in 2007. Throughout 2018, there were a number of items that needed strong governance and management. From the historic flood of the Saint John River, revisioning of the Officers’ Square Redevelopment and the tragic shooting of August 10th that resulted in two City of Fredericton Officers and two residents losing their lives. A 20 Year Long-Term Financial Plan was adopted by City Council on September 13, 2010. The Long-Term Financial Plan is the City’s road map to long-term financial affordability, flexibility, sustainability and resiliency. Long-term planning considers the full life-cycle cost of assets, weighs the costs and benefits of development opportunities, and adheres to sound funding, debt affordability and capital investment policies. The General Fund long-term financial plan includes a recommended debt servicing limit of 8% of total revenue. The 8% debt servicing ceiling along with the 12% Pay-As-You-Go (PAYG) capital budget allocation provides 20% of the budget allocated to capital assets and infrastructure, which is the amount required to maintain service levels and address stable growth. Capital investment priorities are set based on the need for renewal, extension or addition of capital assets within the City’s eight Program Result Areas. The City maintains a complete inventory and knows the replacement cost of its capital assets. The PAYG capital budget is used to (a) replace existing assets, (b) expand and enhance assets to accommodate new services and growth, and (c) repair and maintain existing assets. The City of Fredericton develops an annual budget that outlines planned revenue collection and expenditures for the calendar year. Revenues are generated primarily from property taxes, although funds are received through transfers from other levels of government and from non-tax revenues, including permit fees, parking levies, transit fares, and from other services. Expenditures relate to each of the services provided by the municipality in support of the goals of the eight Program Result Areas.

78

4

Financial Statement Discussion & Analysis Introduction Management of the City of Fredericton is responsible for preparing the Financial Statement Discussion &

Analysis (FSD&A). This report is supplementary to the audited financial statements with the objective of

explaining, highlighting and analyzing information contained in the financial statements.

This discussion will provide highlights of the key financial information and analysis, including an

assessment of trends and indicators of financial health.

Highlights Revenue Revenue increased in 2018 to $161 million, up from $151 million in 2017. The increase is mainly due to

an increase in infrastructure installations funded by private development. This is due to the

infrastructure received from the amalgamation of Chateau Heights.

Revenue 2018

Property taxes $ 100,185,501

Sales, fines and other fees 28,204,947

Services to other governments 3,327,395

Community funding and equalization grant 1,823,018

Third party contributions: Infrastructure installations funded by private development 13,887,513

Federal and Provincial infrastructure funding 12,510,796 Return on investments, and other miscellaneous revenue 1,082,593

Total revenue $ 161,021,763

Revenue from sales, fines and fees increased by $1.5 million, or 5.5% over the prior year due to higher

usage of public transit and increases in building permits.

Rising public safety personnel costs and increasing needs for public safety infrastructure renewal continue

to be the key drivers for negotiating new service contracts. Staff continue to negotiate contracts with

neighboring communities for such services as Policing and Fire Protection of Saint Mary’s First Nation, Fire

to LSDs and 911 Dispatch Services for the region. These contract agreements aim to achieve full cost

recovery for the services provided to other governments.

79

5

Revenue growth from property taxes is slowing The City’s revenue growth from property tax continues to slow down. Tax base growth is composed of

new construction, and increases in the assessed market value of existing properties.

Tax base growth in 2018 resulting from new construction was 1.06%, while market assessments decreased

by 0.31% due to the Property Tax Assessment Freeze combined with reassessments. Both are well below

the 10-year averages of 2.0% and 2.5%, respectively, and are forecasted to be less than 1% and 1.5% over

the next five year period. For the 2019 budget, the tax base from new construction grew by 0.8% with

market construction growing by 2.32% due to the assessment adjustment associated with the prior year

Assessment Freeze.

While growth in the property tax base is slowing, the City maintains a high reliance on Property Taxes as

the main source of revenue. In 2018, Property Tax revenue was a lower percentage as a result of a higher

than average year for Third Party Contributions making up 62% and 16% respectively.

The increased reliance on property taxes is partly due to a reduction in the Community Funding and

Equalization grant received from the Province of New Brunswick. The grant decreased over a five year

period, from $5.78 million in 2011 to $1.71 million in 2015. In 2018, the Community Funding and

Equalization grant was 1.1% of total revenue, compared to 4.3% in 2011.

0.93% 0.61% 1.06% 0.80%0.76% 0.77%

-0.31%2.32%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Growth in the Property Tax Base

New Construction Market Value

0%

20%

40%

60%

80%

100%

2012 2013 2014 2015 2016 2017 2018

Sources of RevenueThird party contributions

Sales, fines, and other fees

Services to other governments

Unconditional grant

Property tax

80

6

Expenses by Program Results Area Expenses are reported by Program Results Area. Community results are achieved in each program area

through the delivery of services and provision of municipal infrastructure.

* Corporate Services and other overhead costs are reallocated to the external services.

Expenses are related to salaries and benefits, goods and services, and infrastructure costs Annual expenses reported in the financial statements include salaries and benefits, goods and services,

and amortization of infrastructure. Annual amortization expenses are calculated as the historic cost of

infrastructure and assets divided by their expected useful life.

Total expenses in 2018 were $125.8 million, compared to $124.7 in 2017.

*Amortization is at historical cost and does not reflect the current cost of replacing assets.

$40.3

$31.4

$22.2

$13.4

$6.5

$5.5

$4.3

$1.3

$0.9

$- $5.0 $10.0 $15.0 $20.0 $25.0 $30.0 $35.0 $40.0 $45.0

Public Safety

Mobility

Livable Community

Water & Wastewater

Economic Vitality

Governance & Civic Engagement

Environmental Stewardship

Sustainable Infrastructure

Corporate Services

Expenditures by Program Results Area (in $ millions)

Expense by Type (in $ millions) 2018 2017 2016

Salaries 67.0$ 64.9$ 62.1$

Goods and Services 32.6 33.4 31.5

Amortization 23.0 22.8 22.0

Interest 1.8 1.9 2.3

Other 1.5 1.7 (0.2)

125.8$ 124.7$ 117.8$

81

7

Union agreements Three of the six City of Fredericton union agreements expired at the end of 2018. The next three years

will result in newly renegotiated contracts for CUPE Locals 508, 1709 and 3864 effective January 1, 2019,

CUPE Local 1783 and IAFF Local 1053 effective January 1, 2020 with UBC Local 911 effective January 1,

2021.

Costs are expected to increase faster than revenue growth The City’s inflationary costs have been increasing at a rate higher than revenues being generated through

property taxes and are also higher than a typical consumer’s inflation as measured by the Consumer Price

Index.

For 2018, inflation just to maintain existing services was 3% while property tax base increase was only

0.75%. The City continues Innovation and Improvement Initiatives to offset these higher costs, however

there is a risk that the outpacing of the revenue growth could result in adjustments to services if the

contract awards are higher than the City can afford.

The impact of rising costs and slow revenue growth is forecast to create a funding gap The impact of expenses rising faster than revenue will create budgetary challenges for the City. For

2018, the funding gap in the General Operating Fund was forecasted to be $0.8 million but efficiencies

and use of the 2016 Second Previous Year’s Surplus allowed for a balanced 2018 budget. The funding

gap was increased beyond the City’s ability to absorb for 2019 primarily due to personnel costs rising

fast than revenues. As a result, the City required property tax rate increase of $0.01 per $100 of

assessed value of property.

$110

$115

$120

$125

$130

2018 2019 2020 2021 2022

PROJECTED FUNDING GAP (in Millions)

------ EXPENDITURES ------ REVENUES

$2.4 Million

GAP

82

8

Rightsizing the workforce is imperative for sustainability In years of high revenue growth, there was a 10.6% increase in the number of full time equivalent

employees added to the workforce. With salary costs rising faster than the expected growth in the tax

base, it is imperative that the workforce be right-sized through efficiencies back to a sustainable level.

Over the last five years, the City had maintained a balanced budget with no reduction in services or

increases in the tax rate. Savings have been achieved through a reduction in the workforce, and

efficiency projects using the Lean Six Sigma Methodology. 2019 will mark the first year in 10 years that

that rate was increased.

Corporate efficiency strategy focused on Lean 6 Sigma continues to have a positive impact

on the bottom line In 2018, there was continued focus on finding efficiencies and eliminating waste from service delivery

processes. The corporation’s strategy focuses on building the capacity of employees to find innovative

ways to achieve better service delivery at lower costs by eliminating waste and improving

business processes.

Since 2012, more than 60 employees have undertaken Lean Six Sigma training and have received Green

Belt or Black Belt certification. Over 220 employees have received some form of training in Lean and more

than 300 employees have participated in Innovation and Improvement projects. Since 2012, the City has

realized total cumulative annual efficiency savings of $9.2 million.

663.54

649.54

656.04

661.03

666.58

692.79

708.79

721.79

717.40

715.50

718.50

709.53

701.23

692.04

686.54

684.54

683.54

600 620 640 660 680 700 720 740

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

663.54

649.54

656.04

661.03

666.58

692.79

708.79

721.79

717.40

715.50

718.50

709.53

701.23

692.04

686.54

684.54

683.54

600 620 640 660 680 700 720 740

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2012 2013 2014 2015 2016 2017 2018 2019

Cumulative $562,985 $2,642,93 $4,331,03 $5,936,89 $6,579,93 $7,693,90 $8,309,12 $9,239,38

Budget Savings $562,985 $2,079,95 $1,688,09 $1,605,85 $643,040 $1,113,97 $615,221 $930,267

$0.6

$2.6

$4.3 $5.9

$6.6 $7.7 $8.3

$9.2

$0.6

$-

$2

$4

$6

$8

$10

Mill

ion

s

Cumulative Annual Budget Savings

83

9

The impact of the cumulative budget savings on the General Operating Fund Budget has enabled the City

to achieve a balanced budget without raising the property tax rate, while maintaining and enhancing

services. The budget savings achieved so far have helped the City to avoid costs equivalent to a $0.12

increase in the tax rate. The ongoing impact of these existing savings on future periods has placed the

City in a good financial position to be able to deal with the next set of budgetary challenges. Continuing

to focus on efficiencies through Lean Six Sigma, and managing the workforce will help the City to close the

forecasted gap in revenue and expenditures expected in 2020 and 2021.

City is mandated to operate within a balanced budget framework The City is mandated to budget using provincially legislated cash budgeting for each of its operating funds

and is required to maintain a balanced budget on a cash basis with no cumulative surplus or deficit within

those operating funds.

In 2018, the City’s General Operating Fund ended the year with a surplus from regular operations of

$1,317,789 or 1.1% of total revenue. The Water & Sewer Utility Fund ended with a cash budget surplus

of $1,862,191 or 5.9% of total revenue.

Annually, the City is required to consolidate the operations of City owned companies with regular

operations to report a Consolidated General Operating Fund surplus or deficit to the Province of New

Brunswick.

These companies, including the Fredericton Convention Centre, e-Novations Comnet Inc. and Newmarket

Properties Inc., added $360,626 to the annual Consolidated General Fund surplus. The operating

surpluses generated from the subsidiary companies are retained in each company to be used for future

reinvestment in infrastructure necessary to sustain their operations.

The consolidated annual surplus also includes unrealized foreign exchange gains of $359,010 and

unrealized losses on investments of $48,930. Including the subsidiary companies, and the effect of

unrealized foreign exchange gains and unrealized investment losses, the City’s Consolidated General

Operating Fund surplus is $1,988,495 or 1.6% of revenue.

Investments in infrastructure are necessary to sustain service delivery For 2018, the City reported tangible capital assets with a historical cost of $892 million and $305 million

in accumulated amortization, resulting in a net book value of $587 million. During the year, the City

recognized amortization expenses of $23.0 million. To sustain current levels of service delivery, the City

must replace assets at the same rate as the rate of amortization.

The amortization expenses recorded for the cost of consuming assets (at historical prices) is much lower

than the capital expenditures required to acquire replacement assets (at current prices).

The City’s infrastructure consists of long-lasting assets. The annual amortization expense is based on the

historical cost of assets at the time of construction, which is then amortized over the useful life of the

infrastructure. The useful life of a municipality’s large infrastructure assets ranges from 15 to 80 years

and historical construction costs are much lower than current replacement costs. As a result, the total

expense recorded for asset amortization tends to be much lower than the current cost of investments

required to replace those same assets.

84

10

Using Public Sector Accounting Standards, the difference between amortization expense

and the current cost of replacing infrastructure gives rise to an annual surplus The City’s audited financial statements are prepared in accordance with Public Sector Accounting Board

(PSAB) standards. PSAB requires governments to capitalize long-term assets and record amortization

expense at historic costs over their useful lives.

Investments in infrastructure are recorded as an increase in tangible capital assets as shown on the

Consolidated Statement of Financial Position, rather than as a cash expense during the year. Capital assets

are then depreciated over their useful lives and the cost of asset amortization is recorded as amortization

expense each year over the useful life of the asset.

In 2018, amortization expense was recorded at $23.0 million, while the total investment in replacement

and new infrastructure was $52.1 million. Capitalizing investments as assets and recording amortization

expense under PSAB standards resulted in an annual expense that was $29.1 million lower than the City’s

cash operating budget because the historical amortization expense is much lower than current

replacement costs. This creates an annual surplus when reporting for Public Sector Accounting purposes.

Consolidated surplus is related to investment in infrastructure and is supported by third

party contributions. The City ended the year with a consolidated surplus from all funds of $35.2 million and an accumulated

surplus of $588 million, compared with an annual surplus of $26.2 million and a year-end accumulated

surplus of $553 million in 2017.

The City’s operations are managed within a balanced budget on a cash expenditures basis. Budgetary

cash surpluses or deficits are legislated to be included in the second ensuing year’s operating budget. As

a result, the consolidated annual surplus of $35.2 million is made up primarily of:

• Cash investments in capital assets that are higher than the amortization expensed in the year,

• Third party contributions of capital assets and infrastructure funding, and

• Debt repayments.

Throughout the year, the City receives contributions of municipal infrastructure from developers who

have built new subdivision streets, sidewalks, and water and sewer infrastructure and then turned those

assets over to the City. This results in an increase in tangible capital assets as well as an increase in the

property tax base. During the year, developers contributed $13.5 million in linear assets.

Also included in third party contributions are government transfers and funding for major capital projects.

In 2018, the City recorded Federal Gas Tax revenue of $5.2 million used to provide water and sewer system

upgrades. The Federal and Provincial governments contributed investments in other infrastructure valued

at $7.3 million including contributions for Transit Funding, designated highway renewal (Lincoln Road &

Saint-Anne Point Drive) and various water and sewer projects.

Amalgamation of Chateau Heights into City of Fredericton. On August 1, 2018, properties in the community of Chateau Heights were amalgamated into the City of

Fredericton. The primary reason being that many residents did not have reliable access to potable

water. City services were extending including assets that were contributed to the City by the Province in

the amount of $13.5 million. These are assets that are not the responsibility of the City and will be

maintained and replaced in the future.

85

11

Accumulated surplus related to investments in infrastructure The accumulated surplus reported on the Consolidated Statement of Financial Position shows the net

amount of assets available to provide services for the City’s residents. This is not a cash surplus available

for additional expenditures but represents the cumulative investment in infrastructure over time.

The chart on the following page shows the accumulated surplus compared to the net book value of

tangible capital assets. The accumulated surplus is made up almost entirely of investment in

infrastructure and tangible capital assets. This is because the City is required by legislation not to

accumulate year over year cash surpluses from operations.

The net difference between the accumulated surplus and the value of tangible capital assets shown on

the following chart is outstanding long-term debt.

Readers of the financial statements should be cautious about their interpretation of the increase in

tangible assets and accumulated surplus.

The increase in accumulated surplus or tangible capital assets does not necessarily indicate that the

overall condition or life expectancy of existing infrastructure is improving or that future cash requirements

to replace capital assets are diminishing.

The accumulated surplus represents the City’s equity in assets. It represents the City’s future ability to

use infrastructure to deliver municipal services and achieve Program Results.

$-

$100

$200

$300

$400

$500

$600

$700

2011 2012 2013 2014 2015 2016 2017 2018

Mill

ion

s

Accumulated Surplus Tangible capital assets

86

12

Investments in infrastructure support Program Results During 2018, the City made significant investments to renew existing infrastructure and additions of new

infrastructure to achieve Program Results.

Program Results Area Project Community Result

Mobility New transit buses, accessible bus stops and other transit technologies

New equipment and infrastructure to provide safe, accessible, options for movement around the community.


Diamond & Chateau Heights Reservoirs, upgrades at the Barker Street Wastewater Treatment Facility and other core water and sewer renewal projects

Infrastructure to provide safe and clean water

Livable Community Indoor sports floor system, York Regional Museum renovations, and the Living Wall

A vibrant, well-planned, connected and active community

87

13

Infrastructure Condition and Deficit

There are a number of tangible capital assets owned by the City that have reached the end of their

intended useful lives but have not yet been replaced and are still in service. The current replacement cost

of these assets is referred to as the infrastructure deficit. The infrastructure deficit is not included in the

annual or accumulated surplus figures in the consolidated financial statements.

Estimated Infrastructure Deficit (in $ millions)

Infrastructure Assets 2018 2017

Outdoor sports & recreation $ 2.0 $ 2.0

Buildings and municipal facilities 18.3 16.1

Machinery, vehicles & equipment 6.0 7.9

Roads & streets 48.4 48.7

Water & sewer linear and treatment facilities 186.4 175.6

$ 261.2 $ 250.4

Addressing the Infrastructure Deficit through long-term financial planning and fiscal

policies The City is working to address the infrastructure deficit though its fiscal policies and long-term financial

plans. The Long-term Financial Plan for both the Water & Sewer Fund and the General Operating Fund

prescribe a level of funding required for infrastructure renewal that will reduce the infrastructure deficit

over a 20 year period.

The Council has also adopted these long-term financial plans along with related fiscal policies aimed at

achieving the plans’ objectives. The Debt and Affordability Policy caps the level of debt payments to less

than 8% of total recurring budget, and the Capital Prioritization and Investment Policy ensures that at

least 75% of the capital budget is invested in the renewal of existing infrastructure.

Meeting renewal targets for infrastructure replacement is key to achieving a reduction of the

infrastructure deficit.

88

14

Water and Sewer linear assets represent the largest area of infrastructure deficit The City of Fredericton Water and Sewer utility operates eleven water production wells, two water

treatment plants, thirteen booster stations and fifteen water storage reservoirs. Wastewater is

collected and treated at the Fredericton Area Pollution Control Centre treatment plant. Water and

waste water are distributed and collected using over 800 kilometers of underground piping.

Water & Sewer Linear Assets

Total Length (km)

Infrastructure in Service Beyond Expected Useful Life

Length of Deficit (km)

Percent of Total

Replacement Cost (in millions)

Water mains 433.0 175.6 41% $ 111.8

Sanitary sewers 398.9 38.1 10% $ 22.2

Water mains and sanitary sewers have expected useful lives ranging from forty to eighty years. Many

are still in service beyond expected useful life estimates. A renewal rate of 1% of the total length of

infrastructure per year is the target renewal rate for maintaining a sustainable underground system.

Water Main Renewal Compared to Target

Sanitary Sewer Renewal Compared to Target

70%

55% 55% 51%61%

98%

111%

0%

20%

40%

60%

80%

100%

120%

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2012 2013 2014 2015 2016 2017 2018

Me

ters Meters needed to meet target

Water Main Renewal (Meters)

Percent of target achieved

82%

91%

58%

74%

92%

117% 116%

0%

20%

40%

60%

80%

100%

120%

-100

400

900

1,400

1,900

2,400

2,900

3,400

3,900

2012 2013 2014 2015 2016 2017 2018

Me

ters Meters needed to meet target

Sanitary Sewer Renewal (Meters)

Percent of target achieved

89

15

Roads and Streets assets require significant reinvestment to sustain the quality of service

Roads & Streets Linear Assets

Total Length (km)

Infrastructure in Service Beyond Expected Useful Life

Length of Deficit (km)

Percent of Total

Replacement Cost (in millions)

Road surfaces 370.7 72.6 20% $ 12.3

Road base 389.5 31.0 8% $ 19.7

Curbing 566.2 45.3 8% $ 5.5

Sidewalk 248.1 18.7 8% $ 3.4

Road Surface Renewal Compared to Target

Curbing Renewal Compared to Target

In addition to assets that have already exceeded their expected useful lives, a number of assets are nearing

the end of their expected useful lives or have been partially used. The chart on the following page shows

the relative percentage of assets by category that have already reached the end of their expected useful

lives, the amount of life already depreciated from the pool of assets, and the un-depreciated or useful life

remaining. .

82% 83%88%

73% 71%

83%

56%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

5,000

10,000

15,000

20,000

2012 2013 2014 2015 2016 2017 2018

Me

ters

Meters needed to achievetarget

Road Surface Renewal (m)

percent of target achieved

91% 92%

106%99% 97%

120% 116%

0%

20%

40%

60%

80%

100%

120%

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2012 2013 2014 2015 2016 2017 2018

Me

ters

Meters needed to achievetarget

Curbing Renewal (m)

percent of target achieved

90

16

Infrastructure Condition

91

17

Assessment of Financial Trends

Debt is an important measure of financial health and future prospects for the City of Fredericton. Net

debt represents the future amount of revenue required to fund existing commitments, and indicates the

affordability of additional spending. It is calculated as the total short and long term financial obligations

of the City, less current financial assets.

Change in Net Debt The City has experienced a decrease in net debt

over the last five years. In 2012, the East End

Office Complex was sold to the Province of New

Brunswick, reducing the City’s financial

obligations. In 2018, the City continued to repay

its long-term debt, further reducing net debt.

• For the year ended December 31, 2018,

net debt decreased to $1 million.

Debt Servicing Costs Debt servicing costs were 4.0% of total revenue

in 2018. The long-term financial plan sets a

target debt servicing ceiling of 8% of total

recurring revenue.

• Debt servicing costs of $5.3 million were

recorded in 2018, including $1.8 million

in interest and $3.5 million in principal

repayments.

Improving Asset-to-Liability ratio In 2018, the City continued to pay down outstanding debt. The City also received increased contributions

from other levels of government for infrastructure projects reducing out-of-pocket expense for these

projects. The result is an increase in the ratio of financial assets to total liabilities which is a favourable

indicator of financial sustainability. .

YearTotal financial assets

($millions)

Total liabilities ($

millions)

Total assets / total

liabilities (percent)

2013 32.8 78.2 42%

2014 39.1 81.5 48%

2015 36.6 68.5 53%

2016 43.2 63.0 69%

2017 53.0 62.4 85%

2018 56.1 57.7 97%

Comparison of Assets-to-Liabilities

42% 48% 53%69%

85%97%

0%

20%

40%

60%

80%

100%

120%

2013 2014 2015 2016 2017 2018

Pe

rce

nt

Financial Assets-to-Liabilities

Year

5.1% 4.8% 4.6% 4.5% 4.0%

2014 2015 2016 2017 2018

Debt Servicing Costs to Revenue (8% Debt Ceiling)

53

8597

6045 42

3220 9 2

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

The City of Fredericton Net Debt (In $Millions)

92

18

Taxpayer Affordability The flexibility of the City to bear additional

future costs is impacted by the level of net debt

compared with the total value of the tax base.

This trend is improving as the tax base grows and

net debt decreases. It is an indicator of the City’s

ability to utilize debt financing in the future for

major projects.

Municipal Tax Burden In 2018, Fredericton’s overall Municipal Tax Effort was 4.6%. This means that for the average residential unit 4.6% of their household income pays for municipal taxes and water and sewer rates. As income ranges increase so does the amount of municipal taxes paid; however, the amount of taxes paid compared to income decreases. The City provides a high level of service and value to all of its taxpayers while still remaining affordable. Even for lower income ranges tax effort is still at an affordable level relative to the services being provided. In 2018, property tax assessments decreased by 0.31% as a result of the property tax freeze while the New Brunswick’s Consumer Price Index (NB CPI) rose by 2.1% for the year. Over the last ten years, property assessments have risen on average 3.3% per year, while the NB CPI averaged growth of only 1.5%. This means that property taxes have become more expensive relative to other household expenses.

2015 through 2018 were the first four years in the past 11 years that property tax assessment increases were below the average NB CPI.

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

Market Assessments Compared to NB CPI

Market Value

NB CPI

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%

0.70%

2014 2015 2016 2017 2018

pe

rce

nt

Year

Net Debt to Taxable Assessment

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19

Declining Surplus-to-Tax Assessment The accumulated surplus measures the current and all prior years’ operating results. Comparing the

growth in accumulated surplus with the growth in the economy is an indicator of sustainability.

The accumulated surplus has increased due to investments in infrastructure, and the overall accumulated

surplus has increased in relation to the economy (as measured by the tax base). The continuing trending

increase in surplus-to-tax assessment is a favourable indicator of financial sustainability.

However, tax base growth from new construction is a significant source of funding used to sustain existing

services and infrastructure. To mitigate this risk, the City employs two key planning strategies:

• Increase development density to optimize services and amenities

• Intensify development with mixed uses

The City also benefits from stimulus funding and other government transfers for major capital projects

which have resulted in an increase in the accumulated surplus.

Risks and Uncertainties The City has identified certain risk exposures related to its financial sustainability and ability to meet its

strategic objectives.

The most significant financial risks for the City are related to rising municipal costs due to salary increases,

particularly arbitrated settlements and public safety costs, and the size of the workforce, combined with

reduced revenue caused by the slowdown in property tax base growth. This creates a structural deficit in

operating budgets and undermines the City’s ability to sustain services and infrastructure over the long

term.

Slowing Revenue • Reduction of $3.93 million in the Community Funding and Equalization grant transfer

from the Province of New Brunswick over a three year period from 2013-2015. This

increases the City’s reliance on property tax revenues and user fees.

• Growth in the property tax base is projected to slow down to 2.0% or less and may not be

enough to offset other revenue shortfalls and keep pace with inflationary costs. For 2018,

due to the Province’s Property Tax Assessment Freeze, the market assessments

adjustment was negative, while there was a bit of a rebound in 2019.

Rising Costs • Personnel costs now account for 53.2% [2017 - 52.1%] of the overall budget and are

projected to rise faster than inflation and revenue growth.

• Public Safety personnel costs account for 24.7% of the overall municipal expenses. Public

Safety labour contracts and salary amounts are generally reached through a process of

interest arbitration. This process limits the employer's efforts to control labour costs and

continues to increase the costs of emergency services because contract increases are

generally benchmarked against other jurisdictions, creating a leapfrog effect that

escalates salaries beyond inflation.

94

20

Financial Risks • Volatility in oil prices affect the City’s operating budgets significantly. Fuel is a major input

to the City’s general operations and accounts for 1.4% of total expenses. The City uses

nearly 2 million litres of fuel per year to operate buses, trucks, machinery, and fire and

police vehicles. Each $0.01/litre increase in the cost of fuel costs the City approximately

$20,000 more per year. Oil is also a major factor in the price of asphalt.

• Gains and losses on U.S. currency create volatility in managing a balanced budget. A

declining Canadian dollar generates gains on U.S. holdings but makes purchases from U.S.

suppliers more expensive.

• The City is exposed to interest rate risk on its debentures which have 20-year amortization

periods that began to partially mature starting in 2016 and need to be refinanced for the

remaining balances. The City is required to borrow through the New Brunswick Municipal

Finance Corporation. If long-term bond rates rise or if the credit rating of the Province

deteriorates, the interest rate on the City’s bonds could increase. A 1% increase in the

interest rate could result in an increase in annual interest expense of approximately

$500,000.

Environmental Risks • Environmental risks due to climate change and extreme weather events may require

major additional investments in infrastructure to adapt, or increase operating costs

related to dealing with storm events and natural disasters.

Economic Risks • The Province of New Brunswick government is facing severe financial challenges. The

Province’s debt is increasing due to operating deficits. This could impact the City in a

number of ways including downloading of Provincial responsibilities and costs to the City,

reduction in maintenance of Provincial highways within the City, loss of jobs in the Capital

region, increases in taxation, and other economic impacts.

• Regionalization of municipal services may occur creating uncertain cost impacts for the

City’s operating budget.

• Provincial economic conditions may be worsening and economic development activities

may not result in an improved economic environment.

• The City faces uncertain costs for the police and fire fighters’ defined benefit pension plan.

• Major investments to upgrade and replace failed and aging infrastructure are required to

reduce the infrastructure deficit, maintain municipal services and meet strategic

objectives

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21

Strategies and Techniques for Managing Risk The City employs a number of strategies for dealing with financial risk. Financial strategies are focused

on sustaining the City over the long-term and are centered on a long-term financial plan, a results-based

budgeting process, and a corporate culture focused on finding efficiencies in service delivery.

Municipal Plan • Imagine Fredericton. This was the call to action in 2016 for residents, businesses, City Council,

the Mayor, and the City’s directors, planners and staff. Imagine Fredericton is the marketing

brand name of the public consultation phase of a new municipal plan that the City began in 2015.

The existing municipal plan was adopted by Council in 2007, and the new plan is expected to be

completed in 2019. The new municipal plan will take input from the public and professional

planners and staff to develop a new growth strategy for the City. An updated municipal plan will

direct the City’s investment in infrastructure, land use development, and service delivery. The

municipal plan is the main strategic document that guides the long-term financial plans, corporate

strategic plans, and the results-based budget.

Long-term financial plans • The Council continues to adhere to a strategic long-term financial plan for the General Fund that

addresses the infrastructure deficit, sets debt limits, and provides sustainable levels of funding

for services and infrastructure.

• Capital borrowing policies aimed at maintaining financial sustainability; the long-term strategic

plan sets a maximum target of 8% of revenue for debt servicing costs.

• Council has also adopted a long-term financial plan for the Water & Sewer utility.

Results-based budgeting • In 2018, the City continued the process of redeveloping its budget process to create a strategic

financial management and governance system that budgets by results areas. Budgeting for

results focuses budget dollars on areas that achieve the best results for citizens and maximizes

the value that citizens receive in return for their tax dollars.

• The process creates alignment between staff and the Council and provides the flexibility necessary

to address the most important community concerns within a sustainable level of funding.

Corporate strategies • Strategies to mitigate the risks of rising costs include the corporate reorganization in 2012, the

workforce reduction strategy, and training aimed at reducing operating costs by eliminating waste

through Lean and Six Sigma efficiency initiatives, while maintaining and improving service

delivery. For 2018 and beyond, the City is introducing Improvement Targets to achieve required

savings while improving services to Customers.

Visibility boards • The City has implemented the practice of daily management and visibility boards. The daily

management boards, CAO dashboard, and Council visual governance boards show organizational

goals, operational and strategic performance indicators, and progress on Lean Six Sigma projects

and priorities for each area of service delivery. These boards ensure alignment and daily

execution of corporate and strategic initiatives. .

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22

Indicators of Financial Health This analysis gives a broader view of the financial health of the City as it shows trends over time. The information augments the audited financial

statements, which only reflect the City's fiscal status at a point in time.

Indicator Purpose 2014 2015 2016 2017 2018 Analysis

Sust

ain

abili

ty

Assets-to-liabilities Measures extent that government finances its operations by issuing debt

6.92 8.37 9.36 9.87 11.19 Favorable

Financial assets-to-liabilities

Measures whether future revenues will be needed to pay for past transactions

48% 53% 69% 85% 97% Favorable

Net debt-to-total revenue (percent)

Shows whether more time is needed to pay for past transactions

32% 23% 14% 6% 1% Favorable

Net debt-to-taxable assessment

Shows the relationship between Net Debt and the activity in the economy

0.64% 0.47% 0.29% 0.13% 0.02% Favorable

Accumulated surplus (deficit)-to-taxable assessment

Measures the sum of the current and all prior year operating results relative to the growth in the economy

7.27% 7.40% 7.60% 7.87% 8.31% Neutral

Total expenses-to-taxable assessment

Shows the trend of government spending over time in relation to the growth in the economy

1.78% 1.68% 1.70% 1.77% 1.78% Neutral

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23

Indicator Purpose 2014 2015 2016 2017 2018 Analysis

Fle

xib

ility

Debt service charges-to-revenues

Measures extent that past borrowing decisions limits ability to meet current financial and service commitments

5.06% 4.82% 4.56% 4.46% 3.97% Favourable

Net book value of capital assets-to-cost of capital assets

Measures the estimated useful lives of tangible capital assets available to provide products /services

67.78% 67.00% 66.27% 65.75% 65.82% Unfavorable

Own-source revenues-to-taxable assessment

Measures extent income is taken out of the economy

1.77% 1.77% 1.78% 1.80% 1.83% Neutral

Vu

lner

abili

ty Government transfers-

to-total revenues Measures the dependence on another level of government

9.83% 11.56% 9.07% 16.06% 10.73% Neutral

Foreign currency debt -to-net debt

Measures the government’s potential vulnerability to currency fluctuations

N/A N/A N/A N/A N/A

Debt is financed through the MCBB in Canadian Funds

98

24

Sustainability is the degree to which a government can maintain its existing financial obligations both in respect of its service commitments to the

public and financial commitments to creditors, employees and others without increasing the debt or tax burden relative to the economy within

which it operates. Sustainability is an important element to include in an assessment of financial condition because it describes a government's

ability to manage its financial and service commitments and debt burden. It also describes the impact that the level of debt could have on service

provision. For example, a government whose net debt grows at a faster rate than the gross domestic product (GDP) increases the risk that service

levels cannot be sustained.

Flexibility is the degree to which a government can change its debt or tax burden on the economy within which it operates to meet its existing

financial obligations both in respect of its service commitments to the public and financial commitments to creditors, employees and others.

Flexibility provides insights into how a government manages its finances. A government that increases its current borrowing reduces its future

flexibility to respond when adverse economic circumstances develop. Similarly, increasing taxation or user fees or a high tax burden reduces its

ability to increase taxation in the future as a government approaches the limit that citizens and businesses are willing to bear.

Vulnerability is the degree to which a government is dependent on sources of funding outside its control or influence or is exposed to risks that

could impair its ability to meet its existing financial obligations both in respect of its service commitments to the public and financial commitments

to creditors, employees and others. Vulnerability is an important element of financial condition because it provides insights into a government's

reliance on funding sources outside its direct control or influence and its exposure to risks. A government whose vulnerability is relatively low has

greater control over its financial condition.

99

25

Financial Statements

100

CITY OF FREDERICTON

Consolidated Financial Statements

Year ended December 31, 2018

Page

Independent Auditor's Report F-1

Consolidated Statement of Financial Position F-3

Consolidated Statement of Operations and Accumulated Surplus F-4

Consolidated Statement of Changes in Net Debt F-5

Consolidated Statement of Cash Flows F-6

Notes to Consolidated Financial Statements F-7

Schedule 1 - Consolidated Schedule of Segment Disclosure F-21

Schedule 2 - Consolidated Schedule of Tangible Capital Assets F-22

Schedule 3 - Consolidated Schedule of Accumulated Surplus Reconciliation to

Province of New Brunswick ["PNB"] Requirements F-23

Schedule 4 - Consolidated Schedule of Net Operating Loss - Arena Complexes F-24

Schedule 5 - Statement of Reserves F-25

Schedule 6 - Statement of Controlled Entities F-26

Schedule 7 - Reconciliation of Operating Budget for Provincial Requirements to

Public Sector Accounting Standards F-27

Schedule 8 - Detailed Statement of Revenue and Expenditure F-28

101

CITY OF FREDERICTON

F-3

Consolidated Statement of Financial Position

As at December 31, 2018

2018 2017

Financial assetsCash and cash equivalents [note 2] 40,595,114$ 39,637,783$

Investments 5,344,739 72,711

Accounts receivable 10,142,426 13,314,064

Accrued pension asset [note 12] 5,798,100 4,926,400

Due from Subdivision Land - 2,136

61,880,379$ 57,953,094$

LiabilitiesAccounts payable and accrued liabilities 11,438,450$ 10,159,841$

Deferred revenue 3,213,327 3,203,442

Deferred government transfers [note 6] - 1,726,757

Deposits [note 4] 1,741,180 1,222,183

Long-term debt [note 8] 44,450,752 48,037,826

Long-term commitment [note 23] 2,694,497 2,936,922

63,538,206$ 67,286,971$

Net debt (1,657,827)$ (9,333,877)$

Non-financial assetsTangible capital assets [schedule 2] 587,352,727$ 562,419,396$

Supplies inventory 2,662,739 48,690

590,015,466$ 562,468,086$

Accumulated surplus 588,357,639$ 553,134,209$

See accompanying notes

Approved by:

Michael O'Brien, Mayor

Tina Tapley, City Treasurer

102

CITY OF FREDERICTON

F-4

Consolidated Statement of Operations and Accumulated Surplus

For the year ended December 31, 20182018 2018 2017

Budget Actual Actual

RevenueProperty taxes 100,067,182$ 100,185,501$ 99,295,993$

Community funding and equalization grant 1,821,738 1,821,738 1,800,174

Federal grant in lieu of taxes adjustment 1,280 1,280 22,985

Services to other governments 3,212,848 3,327,395 2,885,051

Sales, fines and other fees 27,227,451 28,204,947 26,740,111

Interest and return on investments 118,500 1,082,593 622,592

Third party contributions - 26,398,309 19,520,441

132,448,999$ 161,021,763$ 150,887,347$

ExpensesGeneral Government Services - Corporate 1,373,962$ 921,134$ 714,837$

Sustainable Infrastructure 2,408,874 1,324,603 1,358,776

Economic Vitality 7,064,665 6,521,640 6,210,542

Environmental Stewardship 4,312,152 4,301,388 4,066,226

Governance & Civic Engagement 5,377,237 5,545,833 5,013,134

Livable Community 22,062,042 22,205,174 21,466,255

Mobility [including Transit] 28,165,178 31,355,518 30,301,336

Public Safety [note 20] 41,582,153 40,265,943 39,754,165

Water and Wastewater 15,558,307 13,357,100 15,783,893

127,904,570$ 125,798,333$ 124,669,164$

Annual surplus 4,544,429$ 35,223,430$ 26,218,183$

Accumulated surplus, beginning of year 553,134,209 553,134,209 526,916,026

Accumulated surplus, end of year 557,678,638$ 588,357,639$ 553,134,209$


103

CITY OF FREDERICTON

F-5

Consolidated Statement of Changes in Net Debt

For the year ended December 31, 2018

2018 2018 2017


Annual surplus 4,544,429$ 35,223,430$ 26,218,183$

Acquisition of tangible capital assets (29,539,985) (52,123,779) (40,735,723)

Disposal of tangible capital assets 4,222,261 4,222,261 2,212,237

Amortization of tangible capital assets 22,968,188 22,968,188 22,757,509

Decrease (increase) in supplies inventory - (2,614,049) 4,528

(2,349,536)$ (27,547,379)$ (15,761,449)$

Decrease in net debt 2,194,893 7,676,051 10,456,734

Net debt, beginning of year (9,333,877) (9,333,877) (19,790,611)

Net debt, end of year (7,138,984)$ (1,657,826)$ (9,333,877)$


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Consolidated Statement of Cash Flows

For the year ended December 31, 2018

2018 2017

Operating transactions

Annual surplus 35,223,430$ 26,218,183$

Items not affecting cash

Amortization of tangible capital assets 22,968,188 22,757,509

Loss on sale of tangible capital assets 1,487,863 1,676,354

Uses

Change in accrued pension asset (871,700) (186,000)

Change in long-term commitment (242,425) (370,656)

Change in deferred government transfers (1,726,757) 642,876

Change in deferred revenue 9,885 (177,549)

Change in supplies inventory (2,614,049) 4,528

Change in working capital 4,969,244 (39,478)

Cash provided by operating transactions 59,203,679$ 50,525,767$

Capital transactions

Proceeds on sale of tangible capital assets 2,736,533 535,884

Acquisition of tangible capital assets (52,123,779) (40,735,723)

Cash used in capital transactions (49,387,246)$ (40,199,839)$

Financing transactions

Long-term debt repayment (3,511,782) (3,647,446)

Capital lease principal repayments (75,292) (235,259)

Cash used in financing transactions (3,587,074)$ (3,882,705)$

Change in cash and cash equivalents 6,229,359 6,443,223

Cash and cash equivalents, beginning of year 39,710,494 33,267,271

Cash and cash equivalents, end of year 45,939,853$ 39,710,494$


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Notes to Consolidated Financial Statements


1. Significant accounting policies:

(i) Reporting entity:

Owned/controlled corporations

e-Novations ComNet Inc.

Fredericton Convention Centre Inc.

Newmarket Properties Inc.

(ii) Basis of accounting:

(iii) Revenue recognition:

(iv) Expense recognition:

(v) Supplies inventory:

The consolidated financial statements of the City of Fredericton [the "City"] reflect the assets, liabilities,

revenue, expenditures, and changes in net debt and accumulated surplus in the reporting entity. The

reporting entity comprises the organizations accountable for the administration of their affairs and

resources to City Council and owned or controlled by the City. Inter-fund and inter-corporate balances

and transactions have been eliminated. The entities included in the consolidated financial statements

are as follows:

The consolidated financial statements have been prepared by management in accordance with the

Canadian generally accepted accounting principles for government outlined in the CPA Canada Public Sector Accounting Handbook as issued by the Public Sector Accounting Board ["PSAB"].

Revenue is recognized on the accrual basis and is measurable as it is earned. Revenue received prior

to being earned is recorded as deferred revenue until such time as the revenue is earned.

Expenses are recorded on the accrual basis as they are incurred and are measurable based on receipt

of goods or services and obligation to pay.

Inventory is valued at the lower of cost and net replacement cost, with cost being determined on the

first-in, first-out basis.

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1. Significant accounting policies (continued)

(vi) Tangible capital assets

Useful Lives

N/A

15 - 80 years

20 - 60 years

3 - 40 years

6 - 20 years

15 - 80 years

10 - 60 years

Tangible capital assets ["TCAs"] are physical assets that are used to provide city services, city

administration, construction and/or maintenance of other TCAs owned by the City, will be used on a

regular basis for a period greater than one year, and are not surplus properties held for resale or

disposal. Studies and master plans are not considered TCAs.

TCAs are recorded at cost, which includes all amounts directly attributable to acquisition, construction,

development or betterment of the asset, and are amortized on a straight-line basis over their estimated

useful lives. Amortization begins in the year after the asset has been put into use. Assets under

construction are not amortized until they are put into use. Descriptions and useful lives are as follows:

Machinery and equipment: includes information technology

assets, large signage, transit fare boxes, motorized fleet

equipment, parking meters, leasehold improvements and

similar assets.

Vehicles: all City vehicles, including cars, trucks, buses, and

similar assets.

Linear assets: all Public Works infrastructure including

roads, sidewalks, street lights, traffic signals, storm sewers,

water and sewer mains.

Water and wastewater treatment facilities: includes water

and wastewater treatment plants broken into components:

process piping/equipment, electrical and instrumentation,

structural, architectural, mechanical, and site works.

Land: all land owned by the City, including land under

buildings.

Land improvements: includes major landscaping projects,

sports fields/courts, trail culverts, paved trails, parking lots,

playgrounds and similar assets.

Buildings: all City-owned buildings, with the exception of

treatment plants, as single assets or broken into components:

structural, interior, exterior, mechanical, electrical, specialty

items and equipment, and site works.

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1. Significant accounting policies (continued)

(vi) Tangible capital assets (continued)

(vii) Employee future benefits

[see note 12].

(viii) Use of estimates

2. Cash and cash equivalents

For the purpose of calculating the expected return on plan assets, those assets are valued at fair value.

Current service costs are expensed during the year.

The excess of net actuarial gains (losses) is amortized over the average remaining service period of

active employees, which is estimated to be 16 years.

b) The City has a Supplemental Executive Retirement Plan ["SERP"] for eligible employees

The preparation of consolidated financial statements in conformity with Canadian generally accepted

accounting principles requires management to make estimates and assumptions based on information

available at the date of the consolidated financial statements. Actual results may differ from those

estimates.

Cash and cash equivalents are recorded at cost, which approximates their quoted market value, and are

redeemable upon demand. Included in this amount are funds internally restricted by City Council for

predetermined projects in the amount of $28,564,536 [2017 - $23,543,382].

c) City employees are entitled to a retirement allowance under collective agreements or in accordance

with City policy. The liability is actuarially determined [see note 13] .

The City has a capitalization threshold in the amount of $25,000. Any item purchased under this threshold

is recorded as an expense in the year during which the item is acquired. An exception is pooled assets,

which include computers, street lights, parking meters and groups of assets of a similar nature.

All grants, donations from subdivision developers and other third party contributions are recorded as

income in the year during which the expenditure for the capital asset is incurred. The full cost of the asset

is capitalized in the year during which the asset is substantially complete and put into use.

The City accrues its obligations under employee future benefit plans and the related costs, net of plan

assets. The City has adopted the following policies:

a) The cost of pensions earned by employees is actuarially determined using the projected benefit

method prorated on service and management's best estimate of expected plan investment performance,

salary escalation and retirement ages of employees.

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3. Bank loan payable

4. Deposits

2018 2017

Foundation locations 88,500$ 91,500$

Tenders 57,454 47,670

Infrastructure fees 306,796 306,796

Performance bonds 207,806 79,000

Subdivision development 25,000 25,000

Animal control and other 240 240

Development fees 672,885 671,977

Water and sewer installations 382,499 -

1,741,180$ 1,222,183$

5. Funds held in trust

6. Deferred government transfers

2018 2017

Gas Tax Funding -$ 1,726,757$

7. Infrastructure deficit

Funding received as part of the Gas Tax Funding program is recorded as revenue in the year during which

related expenditures are incurred. Monies that have not been spent are recorded as deferred government

transfers on the consolidated statement of financial position. This amount consists of the following:

These amounts are restricted to fund pre-approved projects that relate to the program objectives and cannot

be used for other projects.

There are no bank loans payable or other short-term borrowings as at December 31, 2018 [2017 - nil].

Deposits consist of monies being held by the City that will either be refunded, provided certain requirements

are met, or earned upon final sale of assets.

There are a number of TCAs owned by the City that have reached the end of their intended useful lives. This

results in an estimated infrastructure deficit in the amount of $261,214,268 as at December 31, 2018 [2017 -

$266,827,511]. This amount is based on the estimated current replacement cost of the assets that are at the

end of their useful lives. This deficit is not included in the annual or accumulated surplus figures in the

consolidated financial statements.

Trust fund assets administered by the City for the benefit of external parties in the amount of $738,295 [2017 -

$649,303] are not included in the consolidated financial statements.

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8. Long-term debt

2018 2017

General Fund

Debentures, 20-year amortization period:

Maturing in 2018 bearing interest at 3.30% to 4.85% -$ 2,430,000$

Maturing in 2019 bearing interest at 0.95% to 5.00% 3,974,000 4,274,000







Maturing in 2026 bearing interest at 2.10% to 3.45% 2,251,000 -

44,262,772 47,774,554

Capital lease obligations with implicit interest rates of 2.85% 187,980 263,272

Total debt 44,450,752$ 48,037,826$

2019 3,420,198$

2020 3,631,971

2021 4,112,787

2022 4,224,507

2023 and thereafter 28,873,309

44,262,772$

Capital lease obligations due within the next two years are as follows:

2019 92,652$

2020 95,328

Total minimum lease payments 187,980$

Principal due within the next five years and thereafter on certificates of indebtedness is approximately as follows:

Interest in the amount of $8,028 [2017 - $4,581] relating to the capital lease obligations is included in interest

expense.

The City has obtained approval of the Municipal Capital Borrowing Board for the long-term debt, and expects to

renew each of the debentures for an additional term of 10 years as they mature.

The General Fund debentures are amortized over twenty years with fixed rates of interest over the initial 10-year

term.

Interest in the amount of $1,766,946 [2017 - $2,004,942] relating to the debentures is included in interest

expense.

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8. Long-term debt (continued)

9. Capital borrowing

Requested and approved capital borrowing

Approved Borrowed

Recreation and Cultural OIC 06-02 14,350,000$ 14,350,000$

Recreation and Cultural OIC 06-23 5,900,000 5,900,000

Recreation and Cultural OIC 06-43 9,360,000 9,360,000

Protective Services OIC 06-43 5,400,000 5,400,000

Protective Services OIC 07-17 1,400,000 1,400,000

General Government OIC 07-55 3,040,000 3,040,000



Protective Services OIC 10-72 500,000 500,000

Environmental Health OIC 11-06 1,100,000 1,100,000

Total authorizations to December 31, 2018 72,850,000$ 72,850,000$

Of the total amount borrowed, $44,262,772 [2017 - $47,774,554] remains to be repaid [see note 8] .

10. Capital commitments

11. Reporting to the Province of New Brunswick

The City obtained approval under Order in Council ["OIC"] and Ministerial order to borrow an amount of

$72,850,000, of which $8,950,000 was financed in 2013, $1,100,000 was financed in 2012, $11,000,000 in

2010, $21,800,000 in 2009, $13,500,000 in 2008, and $16,500,000 in 2006 by the New Brunswick Municipal

Finance Corporation, of which $9,934,000 was refinanced with an internal inter-fund debenture in 2016.

In 2018, the City refinanced an existing debenture by issuing a bond with an interrelated party. The original

debenture was issued in 2008 by the City’s General Capital Fund to the New Brunswick Municipal Finance

Corporation. It had a 10-year initial finance term with a 20-year amortization period. In 2018, the outstanding

principal balance was repaid to the Municipal Finance Corporation with funds from the Capital Reserve Fund.

An inter-fund debenture agreement was structured between the General Capital Fund and the Capital

Reserve Fund. The debenture matures in 2028 and had an initial principal amount of $2,251,000.

The City complies with PSAB accounting standards. The City is also required to comply with the Municipal

Financial Reporting Manual ["MFRM"] prescribed by the Province of New Brunswick ["PNB"]. Differences in

accounting policies include the methodology for accounting for TCAs, government transfers, and liability

accruals for the pension fund and other retirement benefits. The PSAB also requires full consolidation of

funds.

Schedule 3 provides a reconciliation between fund reporting required by PNB and current-year PSAB.

There are no significant capital commitments outstanding as at December 31, 2018 [2017 - nil].

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12. Pension asset/liability

a - Superannuation Pension Plan

2018 2017

Plan assets, at market-related value, January 1 79,581,600$ 68,905,800$

Contributions - City 1,945,200 1,917,900

Contributions - employee required 1,719,200 1,798,900

Benefit payments (2,726,400) (1,206,500)

Expected earnings on market-related value 4,803,000 4,279,800

Actuarial (loss) gain (8,439,500) 3,885,700

Plan assets, at market-related value, December 31 76,883,100$ 79,581,600$

Accrued benefit obligation, January 1 74,889,300$ 69,052,900$

Current service cost 2,980,000 3,085,400

Benefit payments (2,726,400) (1,206,500)

Interest on accrued benefit obligation 4,501,000 4,269,500

Net actuarial gain (1,369,300) (312,000)

Accrued benefit obligation, December 31 78,274,600$ 74,889,300$

Unamortized actuarial losses, January 1 (691,700)$ (5,328,100)$

Current-year gains on accrued obligation 1,369,300 312,000

Actuarial (losses) gains on pension fund assets (8,439,500) 3,885,700

Amortization of prior-year losses/actuarial gains 159,100 438,700

Unamortized actuarial losses, December 31 (7,602,800)$ (691,700)$

Net pension fund asset comprising:

Accrued benefit obligation 78,274,600$ 74,889,300$

Less plan assets (76,883,100) (79,581,600)

Less unamortized losses (7,602,800) (691,700)

Net pension fund asset (6,211,300)$ (5,384,000)$

City portion of Plan expenses

Current year benefit cost 2,980,000$ 3,085,400$

Less employee contributions (1,719,200) (1,798,900)

Add amortization of actuarial losses 159,100 438,700

1,419,900 1,725,200

Interest during the year on average pension liability (302,000) (10,300)

Pension-related expense 1,117,900$ 1,714,900$

An actuarial valuation of the Plan was completed for April 1, 2018 and extrapolated to December 31, 2018.

The City provides pension benefits to certain employees of the City, in accordance with the Pension Benefits Act [New Brunswick] and City By-Law A-5. The Plan is administered by City Council as the Board of

Administrators. The Plan is a contributory defined benefit pension plan covering the active members of IAFF

1053 and UBCJ 911 and IAFF 1053 and UBCJ 911 retirees on or after March 31, 2013. Under the Plan,

contributions are made by the Plan members and the City.

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12. Pension asset/liability (continued)

b - Supplemental Executive Retirement Plan

2018 2017

Accrued actuarial obligation 413,200$ 457,600$

c - Net pension asset/liability 2018 2017

Superannuation Pension Plan (6,211,300)$ (5,384,000)$

Supplemental Executive Retirement Plan 413,200 457,600

(5,798,100)$ (4,926,400)$

Discount rate: 6.10% for 2018 year-end disclosures

[6.00% for fiscal 2018 expense and 2017 year-end disclosures]

Inflation rate: 2.00% [2017 - 2.00%] per annum

Salary growth rate: 2.75% [2017 - 2.75%] per annum, plus promotional and merit scale

Retirement age:

Discount rate: 1.85% [2017 - 1.85%] per annum

60% [2017 - 60%] at the age first eligible for an unreduced pension,

remainder at age 65 [2017 - 65]

Significant management assumptions are used in the actuarial valuation for the Superannuation Pension Plan

are:

Significant management assumptions used in the actuarial valuation for the Supplemental Executive Retirement

Plan are:

The Superannuation Plan for the employees of the City is exempted from funding on a solvency basis. The

exemption was approved by the New Brunswick Superintendent of Pensions and recorded effective May 5, 2014.

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13. Retirement allowance liability

2018 2017

Accrued benefit liability as at January 1 9,238,200$ 8,439,200$

Current service cost 728,000 708,500

Interest on obligation 201,300 192,700

Benefit payments (645,400) (270,100)

Amortization of losses 167,900 167,900

Accrued benefit liability as at December 31 9,690,000$ 9,238,200$

Restricted cash and investments for retirement allowance 9,690,000$ 9,238,200$

Net accrued benefit obligation -$ -$

City portion of benefit expenses

Current-period benefit cost 728,000$ 708,500$

Interest cost 201,300 192,700

Amortization of losses 167,900 167,900

Retirement allowance expense 1,097,200$ 1,069,100$

Significant economic and demographic assumptions used in the actuarial valuation are:

Discount rate: 1.85% [2017 - 1.85%] per annum

Salary growth rate: 2.75% [2017 - 2.75%] per annum, plus promotional and merit scale

Retirement age:

14. Expenses by object

2018 2017

Salaries and benefits 66,974,645$ 64,896,995$

Goods and services 32,574,220 33,395,459

Amortization 22,968,188 22,757,509

Interest 1,795,552 1,942,849

Other 1,485,728 1,676,352

125,798,333$ 124,669,164$

The City provides a retirement allowance to employees of the City who have continuous service of five years

or more and retire due to disability, death or age, or are laid off by the City. The City shall pay such employees

or their beneficiaries an allowance equal to one month's pay for each five years of service or fraction thereof,

but not exceeding six months, at the employee's regular rate of salary plus their benefit spending allowance at

retirement.

Based on an actuarial valuation of the liability, the results as at December 31, 2018 are as follows:

60% at the age first eligible for an unreduced pension, remainder at age

65

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15. Contingencies

16. Recreational service agreement

17. Other

The City, through Newmarket Properties Inc., leases land and building from the Province of New Brunswick

for a nominal fee of $1 a year under a five-year renewable lease agreement that terminated on April 30, 2014.

Under the terms of the lease, the Province of New Brunswick is responsible for the provincial portion of the

real property tax levy. The effect of this lease arrangement is not recorded in these consolidated financial

statements.

Under the Agreements, the City is required to provide access to constituents of the areas to the City's

recreational facilities as if they were residents of the City. In addition, the City is required to provide an audited

schedule of Net Operating Loss of the City's arena complexes [schedule 4] . A capital replacement fund is in

place to plan for future capital expenditures relating to the arenas.

(i) The City provided a letter of guarantee in 2013 in support of a loan by Capital Region Community Tennis

Centre Inc. up to an amount of $670,000 with National Bank for a term not to extend beyond 2016. City

Council guaranteed an extension of 24 months at the November 13, 2018 Council Meeting. The outstanding

loan balance at December 26, 2018 amounts to $167,024.

(ii) The City is subject to claims and lawsuits arising in the normal course of operations. Many of these

claims, especially related to property expropriation, may take several years to resolve. Management is of the

opinion that the ultimate resolution of any legal proceedings will not have a significant effect on the City’s

financial position.

The City entered into Recreational Service Agreements ["Agreements"] with a number of surrounding Local

Service Districts ["LSDs"] and the Village of New Maryland ["Village"]. The Agreements are in effect from

January 1, 2008 to December 31, 2027 with an option to extend beyond this period.

In return, the LSDs and the Village have agreed to have a portion of their property taxes paid to the City in

order to help fund a proportional amount of the capital and operating expenses of the facilities. The

contributions are collected by the Province of New Brunswick, then distributed to the City by the Minister of

Local Government. Contributions under this agreement for the current year amounted to $542,830 [2017 -

$530,587].

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18. Segmented information

Public Safety

Mobility


Environmental Stewardship consists of garbage and waste collection and disposal, and composting.

Economic Vitality

Mobility services consist of common services, road and linear maintenance, street lighting, traffic services,

Parking Services and Public Transit.

Water and wastewater services consist of supply, purification and treatment, transportation, storage,

distribution of water, and collection and treatment of wastewater.

Economic Vitality consists of economic development, and tourism and culture. It includes the Fredericton

Convention Centre, e-Novations Comnet Inc., and Newmarket Properties Inc.

Water and Wastewater Services (utility operations)

Livable Community

Livable Community services include recreation and cultural services consisting of administration, programs,

community liaison, indoor and outdoor pools, arenas, community facilities, the Fredericton Public Library and

the Fredericton Playhouse. Livable Community also includes Parks and Trees, outdoor sport, and Community

Planning; building permits and inspection, development approval, heritage planning and conservation, and

long-range land use planning.


Governance & Civic Engagement services provide legislation, community relations, and community and

corporate leadership. This segment includes the Mayor and Council, and the City Administrator - including

Strategic Initiatives, the City Solicitor, and City Clerk.

The City is a diversified municipal government that provides a wide range of services to citizens. For

management reporting purposes, these operations are broken into segments [schedule 1] . The segments are

as follows:

General Government Services - Corporate

General Government Services are responsible for the internal services provided by and for the other City

departments. They consist of Corporate Services - including Communications, Human Resources,

Purchasing, Fleet, Information Technology, Building Services, Telecommunications, Real Estate, and

Finance. Internal services' costs are re-allocated to the public services areas below.

Sustainable Infrastructure services consist of planning for long-term infrastructure needs, creating long-term

capital plans, and managing debt and affordability.


Public safety services include Police, Fire, By-Law and Building Inspection services within the City and aiding

surrounding areas as required.

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19. Province of New Brunswick Compliance Requirements

(i) Inter-fund accounts

(ii) Restrictions on municipal borrowings

(iii) Water cost transfer

(iv) Second previous year's surplus

20. Public Safety

2018 2017

Native policing expenses 690,889$ 653,372$

Federal contribution (350,020) (288,112)

Provincial contribution (264,651) (265,949)

City contribution 76,218$ 99,311$

21. Comparative figures

Included in Public Safety expenses are amounts related to a contribution agreement between the

Government of Canada, the Province of New Brunswick, the City of Fredericton and the Saint Mary's First

Nation for Native policing services. Amounts included relating to expenses and recoveries are as follows:

Section 89 of the Municipalities Act of the Province of New Brunswick restricts a municipality’s borrowings for

operating purposes to less than four percent of the operating budget of the municipality, as defined by the

Province of New Brunswick, and to less than two percent of the assessed value of real property in the

municipality for capital purposes. Borrowings by the City are within these legislative restrictions.

All inter-fund accounts as at December 31, 2018 represent current transactions except as noted below and

are in compliance with the policy established by the Department of Environment and Local Government.

The City’s water cost transfer is within the maximum allowable by regulation 81-195 under the Municipalities Act based on the applicable percentage of water system expenditures for the population.

The Municipalities Act requires that the General Operating Fund surplus (deficit) be absorbed into the

operating budget of the second subsequent year and that the Water and Sewerage Operating Fund surplus

(deficit) be absorbed into one or more of the three operating budgets commencing with the second following

year [see schedule 3].

The City is in compliance with the following requirements under the Municipalities Act of the Province of New

Brunswick and/or the MFRM:

Certain comparative figures have been reclassified to be consistent with financial presentation adopted in the

current year.

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22. Shared risk pension

23. Pension plan asset split

A split, and transfer of assets from the Superannuation Plan for Employees of the City of Fredericton (the “old

plan”) to the Superannuation Pension Plan for Certain Employees of the City of Fredericton (the “new plan”)

and the SRP Plan, had been approved by the Superintendent of Pensions’ office on November 18, 2014.

Mercer (Canada) Limited performed an actuarial valuation of the old plan with the purpose of determining the

transfer of assets and liabilities as of March 31, 2013. The transfer of assets was based on a division of

assets from the old plan to the new plan and SRP Plan on a going concern basis. Prior year's financial

statements were prepared based on the actuarial valuation prepared by Mercer (Canada) Limited, and

approved by the Superintendent.

However, the decision of the Superintendent of Pensions had been appealed to the Financial and Consumer

Services Tribunal. The Tribunal issued its decision on March 9, 2016, overturning the original division of

assets on a going concern basis in favour of a solvency apportionment of assets.

During the year in 2016, Mercer (Canada) Limited performed new actuarial valuations of the plan asset split

using the solvency basis. As a result of the revised actuarial valuation and remeasurement of the pension

asset split value, an additional $6,314,000 in pension assets have been transferred from the SRP Plan to the

new plan. Prior to the increase in asset value, the new plan had a net pension fund liability of $1,259,400,

which was funded with internally un-restricted cash that was previously expensed. Because the transfer of

additional assets results in a net pension fund asset, the internally un-restricted cash of $1,259,400 was

recognized as revenue in 2016. This resulted in gross revenue related to the revised pension asset split

allocation for the new plan of $7,573,400.

The City is a participating contributing employer to the City of Fredericton Shared Risk Plan [“SRP Plan”]

which is a Shared Risk Plan in accordance with the Pension Benefits Act [New Brunswick]. The SRP Plan is

administered by an independent Board of Trustees and covers employees of the City who are not active

members of IAFF 1053 or UBCJ 911. Under the SRP Plan, contributions are made by the SRP Plan

members and the City. The SRP Plan was created effective March 31, 2013 as a result of a Memorandum of

Understanding between the City and CUPE locals 508, 1709, 1783 and 3864.

Plan members contribute at a rate of 9% of pensionable earnings, with the exception that designated Police

and Fire Management employees contribute at a rate of 12% of pensionable earnings. The City matches

these contributions to form the Plan’s Initial Contributions. In addition, the City is making initial Temporary

Contributions in the amount of 5% of pensionable earnings for at least 10 years and at most 15 years

beginning March 31, 2013. As per the Plan’s Funding Policy, contributions may increase or decrease by

2.25% of payroll for both the City and the employees should certain funding levels be reached.

For service up to and including March 31, 2013, benefits accrue at a rate of 1.3% on the first $5,000 of

earnings and 2.0% on the remainder of pensionable earnings, to a maximum benefit of $2,000 per year of

pensionable service. For this period of pre-conversion service, benefits are available on an unreduced basis

for members who retire on or after age 55 and whose age plus service total at least 80 (or 75 for designated

Police and Fire Management employees). For service after March 31, 2013, benefits accrued at a rate of

1.8% of pensionable earnings. For this period of post-conversion service, benefits are available on an

unreduced basis for members who retire on or after age 65 (or 60 for designated Police and Fire

Management employees).

The last actuarial valuation of the Plan was conducted as at March 31, 2018. At that date, the open group

funded ratio of the Plan was 114.5% [2017 - 112.3%].

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23. Pension plan asset split (continued)

2019 304,688

2020 303,422

2021 302,131

2022 300,815

2023 and thereafter 1,483,441

2,694,497$

The long-term commitment for the additional SRP contributions resulted in a decrease in revenue related to

the pension plan asset split in 2016. This resulted in total net revenue from pension plan split of $4,265,822.

As a result of the split changes to the SRP Plan assets, the City made a new long-term commitment to

increase the Temporary Contributions to the SRP Plan from the initial rate of 4.25% of payroll to 5.0% of

payroll. The commitment for additional Temporary Contributions is for the same period as the initial

Temporary Contributions.

The present value of the long-term commitment for additional Temporary Contributions is estimated to be

$2,694,497.

Additional Temporary Contributions due within the next five years and thereafter on the long-term commitment

are approximately as follows:

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Schedule 1 - Consolidated Schedule of Segment Disclosure


Government &

Civic Engagement

General

Government

Services -

Corporate

Sustainable

Infrastructure Public Safety Mobility

Environmental

Stewardship Economic Vitality

Livable

Community

Water and

Wastewater

2018

Consolidated

2017

Consolidated

Revenue

Property tax/Community

Funding and

Equalization Grant 5,242,185$ -$ 2,394,699$ 36,987,348$ 28,060,531$ 4,481,036$ 5,634,395$ 19,208,325$ -$ 102,008,519$ 101,119,152$

Services to other

governments - - - 2,923,800 403,595 - - - - 3,327,395 2,885,051

Sales and other fees - 585,977 - 1,645,840 4,859,233 - - 2,716,490 18,397,407 28,204,947 26,740,111

Interest and return on

investments - 944,044 - - - - - - 138,549 1,082,593 622,592

Government transfers - 45,000 - - 2,692,904 78,406 - 169,284 9,525,202 12,510,796 17,690,392

Other - 91,423 - - 4,943,228 - - 39,375 8,813,487 13,887,513 1,830,049

5,242,185$ 1,666,444$ 2,394,699$ 41,556,988$ 40,959,491$ 4,559,442$ 5,634,395$ 22,133,474$ 36,874,645$ 161,021,763$ 150,887,347$

Expenses

Salaries and benefits 3,059,282$ 7,536,724$ 917,126$ 31,036,451$ 9,426,474$ 358,374$ 1,361,295$ 8,143,133$ 5,135,786$ 66,974,645 64,896,995

Goods and services 721,164 15,565,950 21,831 (238,809) 6,244,905 3,354,686 1,710,914 2,528,489 2,665,090 32,574,220 33,395,459

Amortization 94,197 - 85,194 1,932,894 9,340,701 449,586 1,738,607 3,855,236 5,471,773 22,968,188 22,757,509

Interest - - - 246,126 28,606 - 802,300 718,520 - 1,795,552 1,942,849

Other (gain) loss on assets - 335,479 - 19,296 1,211,259 - (147,309) (17,448) 84,451 1,485,728 1,676,352

Subtotal expenses 3,874,643 23,438,153 1,024,151 32,995,958 26,251,945 4,162,646 5,465,807 15,227,930 13,357,100 125,798,333 124,669,164

Allocation of Corporate

overhead 1,671,190 (22,517,019) 300,452 7,269,985 5,103,571 138,742 1,055,834 6,977,244 - -

Total expenses 5,545,833 921,134 1,324,603 40,265,943 31,355,516 4,301,388 6,521,641 22,205,174 13,357,101 125,798,333 124,669,164

Annual surplus (loss) (303,648)$ 745,310$ 1,070,096$ 1,291,045$ 9,603,975$ 258,054$ (887,246)$ (71,700)$ 23,517,544$ 35,223,430$ 26,218,183$

120

CITY OF FREDERICTON

F-22

Schedule 2 - Consolidated Schedule of Tangible Capital Assets


LandLand

improvementsBuildings Vehicles

Machinery and

equipment

Treatment

facilitiesLinear assets

Assets under

construction2018 Total 2017 Total

COST

Balance, beginning of year 16,535,800$ 20,083,227$ 156,070,627$ 32,015,494$ 28,575,690$ 57,920,505$ 530,798,091$ 13,376,263$ 855,375,697$ 824,926,348$

Net additions during the year 124,890 1,089,661 1,328,007 2,758,879 5,284,587 9,673,974 36,472,829 (4,609,047) 52,123,779 40,735,723

Disposals during the year (714,626) (6,257) (3,374,455) (3,199,515) (2,555,967) (153,230) (5,041,705) (142,445) (15,188,199) (10,286,374)

BALANCE, END OF YEAR 15,946,064 21,166,631 154,024,179 31,574,858 31,304,310 67,441,249 562,229,215 8,624,771 892,311,277 855,375,697

ACCUMULATED AMORTIZATION

Balance, beginning of year - 6,498,023 47,916,388 15,006,183 12,820,946 30,549,190 180,165,571 - 292,956,301 278,272,929

Amortization during the year - 896,013 4,877,382 2,125,485 2,413,076 1,470,728 11,185,504 - 22,968,188 22,757,509

Accumulated amortization on disposals - (6,257) (1,788,994) (3,006,735) (2,342,796) (147,499) (3,673,657) - (10,965,938) (8,074,137)

BALANCE, END OF YEAR - 7,387,779 51,004,776 14,124,933 12,891,226 31,872,419 187,677,418 - 304,958,551 292,956,301

15,946,064 13,778,852 103,019,403 17,449,924 18,413,085 35,568,830 374,551,797 8,624,771 587,352,727 562,419,396

Consists of:

General Fund Assets 14,594,193 13,778,852 103,019,404 15,778,025 17,058,815 - 208,099,843 3,058,656 375,387,788 369,298,759

Water and Sewer Fund Assets 1,351,871 - - 1,671,899 1,354,270 35,568,830 166,451,954 5,566,115 211,964,939 193,120,637

15,946,064$ 13,778,852$ 103,019,404$ 17,449,924$ 18,413,085$ 35,568,830$ 374,551,797$ 8,624,771$ 587,352,727$ 562,419,396$

The City has tangible capital assets under capital leases as follows, included in the amounts listed above:

Historical Accumulated Net book

cost amortization value

Vehicles 414,650$ 138,217$ 276,433$

Total assets under capital leases 414,650$ 138,217$ 276,433$


NET BOOK VALUE OF TANGIBLE

CAPITAL ASSETS

121

CITY OF FREDERICTON

F-23

Schedule 3 - Consolidated Schedule of Accumulated Surplus Reconciliation to Province of New Brunswick ["PNB"] Requirements


General

Operating Fund

Water and

Sewerage

Operating Fund

Reserve Funds Land Sales FundParking Land

Bank Fund

General Capital

Fund

Water and

Sewerage Capital

Fund

Total

2018 annual surplus (577,258)$ (306,701)$ 5,021,155$ 663,140$ 1,902,691$ 4,652,370$ 23,868,034$ 35,223,430$

Adjustments to 2018 annual surplus

for PNB requirements

Second previous year's surplus 3,587,101$ 2,168,892$ -$ -$ -$ -$ -$ 5,755,993$

Amortization expense - - - - - 17,496,415 5,471,773 22,968,188

Accumulated amortization on asset disposal - - - - - (10,323,544) (642,394) (10,965,938)

PSAB adjusting entries (1,021,348) - - - - - - (1,021,348)

Total adjustments to 2018 annual surplus 2,565,753$ 2,168,892$ -$ -$ -$ 7,172,871$ 4,829,379$ 16,736,895$

2018 annual surplus per PNB

requirements 1,988,495$ 1,862,191$ 5,021,155$ 663,140$ 1,902,691$ 11,825,241$ 28,697,413$ 51,960,325$

Accumulated surplus per PNB

requirements, beginning of year 5,858,125 2,830,904 23,543,382 3,778,652 875,846 507,555,227 297,061,792 841,503,930

Second previous year's surplus (3,587,101) (2,168,892) - - - - - (5,755,993)

Accumulated surplus per PNB

requirements, end of year 4,259,519$ 2,524,203$ 28,564,537$ 4,441,792$ 2,778,537$ 519,380,468$ 325,759,205$ 887,708,262$

122

CITY OF FREDERICTON

F-24

Schedule 4 - Consolidated Schedule of Net Operating Loss - Arena Complexes


2018 2017

Revenue [note 16]

Ice rental 1,093,856$ 1,239,790$

Canteen rental 11,659 6,055

Building rental 23,459 15,140

Community room rental 14,606 26,731

Other 16,440 35,098

YMCA lease agreement 37,629 36,533

Total arena complex revenue 1,197,649 1,359,347

Expenses [note 16]

Salaries and wages 1,501,144 1,571,961

Supplies 84,827 73,178

Repairs and maintenance 453,727 334,459

Utilities 876,378 866,250

Service contracts 116,615 118,597

Other 23,867 23,690

Total arena complex expenses 3,056,558 2,988,135

Net operating loss (1,858,909)$ (1,628,788)$

Capital Replacement Fund - Arenas [note 16]

2018 2017

Opening balance, beginning of year 1,030,703$ 894,203$

Contribution 125,140 125,140

Interest on balance 21,123 11,360

Closing balance, end of year 1,176,966$ 1,030,703$

Total payments made during the year to the Municipal Capital Borrowing Board for the arena debt were

$2,217,817 [2017 - $2,265,635]. The amount representing interest for the year was $657,549 [2016 - $737,499].

Revenue is included in sales, fines and other fees, and expenses are included in Livable Community in the

consolidated statement of operations and accumulated surplus.

The Capital Replacement Fund is included with cash that is designated as reserves for spending in future years

by City Council [see note 2] .

123

CITY OF FREDERICTON

F-25

Schedule 5 - Statement of Reserves


General Operating

ReserveGeneral Capital

Reserve

Water & Sewer

Reserve2018 Total 2017 Total

Assets

Net assets 5,348,260$ 18,264,404$ 4,951,873$ 28,564,537$ 23,543,382$

Accumulated surplus 5,348,260$ 18,264,404$ 4,951,873$ 28,564,537$ 23,543,382$

Revenue

Transfers from Water and General Operating Funds 1,186,967$ 2,260,561$ 1,256,557$ 4,704,084$ 8,581,595$

Interest 80,288 248,699 48,376 377,364 140,807

1,267,255 2,509,260 1,304,933 5,081,448 8,722,402

Expenditures - - 60,294 60,294 2,803,943

Annual surplus 1,267,255$ 2,509,260$ 1,244,640$ 5,021,155$ 5,918,459$

Balance, beginning of the year 4,081,005 15,755,144 3,707,233 23,543,382 17,624,922 Balance, end of the year 5,348,260$ 18,264,404$ 4,951,873$ 28,564,537$ 23,543,381$

124

CITY OF FREDERICTON

F-26

Schedule 6 - Statement of Controlled Entities


e-Novations Comnet

Inc.

Newmarket

Properties Inc.

Fredericton

Convention Centre

Intercompany

Eliminations2018 Total 2017 Total

Assets 2,464,558$ 1,099,646$ 723,592$ (1,907,161)$ 2,380,635$ 2,234,555$

Liabilities (1,270,412) (67,596) (390,943) (6,800) (1,735,751) (1,701,983)

Accumulated Surplus (Deficit) 1,194,146$ 1,032,050$ 332,649$ (1,913,961)$ 644,884$ 532,572$

Revenue 173,839$ 388,675$ 3,554,015$ (1,236,701)$ 2,879,828$ 2,657,245$

Expenditures (164,344) (298,842) (3,536,887) 1,480,871 (2,519,202) (1,779,560)

Annual Surplus - Per PNB Requirements 9,495$ 89,833$ 17,128$ 244,170$ 360,626$ 877,685$

The above noted entities are included in the consolidated financial statements of the City of Fredericton.

Intercompany revenue and expenses and accounts payable and receivable are eliminated upon consolidation.

The controlled entities are consolidated with the General Operating Fund per the Province of New Brunswick requirements.

Surplus (deficit) includes eliminating adjustments for depreciation and capital expenditures, and the second previous year's surplus as per PNB requirements.

The net of revenue and expenses are included in expenses for the Economic Vitality segment.

Controlled entities consolidated with the General Operating Fund

125

CITY OF FREDERICTON

F-27

Schedule 7 - Reconciliation of Operating Budget for Provincial Requirements to Public Sector Accounting Standards


Operating Budget

General

Operating Budget

Water & SewerAmortization TCA

Adjustments for Full

Accrual AccountingOther

Total Budget to PSA

Budget

RevenueProperty taxes 100,067,182$ -$ -$ -$ -$ 100,067,182$

Community Funding and Equalization Grant 1,821,738 - - - - 1,821,738

Federal grant in lieu of taxes adjustment 1,280 - - - - 1,280

Services to other governments 3,212,848 - - - - 3,212,848

Licenses, permits and fines 1,398,454 - - - - 1,398,454

Sales and own source revenue 6,711,355 19,117,642 - - - 25,828,997

Interest and return on investments 118,500 - - - - 118,500

Second previous year's surplus 3,587,101 2,168,892 - (5,755,993) (a) - -

116,918,458$ 21,286,534$ -$ (5,755,993)$ -$ 132,448,999$

Expenses

Governance & Civic Engagement 5,283,040$ -$ 94,197$ -$ -$ 5,377,237$

Sustainable Infrastructure 2,323,680 - 85,194 - - 2,408,874

General Government Services - Corporate 1,373,962 - - - (b) - 1,373,962

Public Safety [note 20] 39,395,843 - 1,932,894 253,416 (b) - 41,582,153

Mobility [including Transit] 18,795,023 - 9,340,701 29,454 (b) - 28,165,178

Environmental Stewardship 3,862,566 - 449,586 - - 4,312,152

Economic Vitality 4,511,298 - 1,738,607 826,065 (b) (11,305) (e) 7,064,665

Livable Community 17,467,002 - 3,855,236 739,804 (b) - 22,062,042

Fiscal Services

Principal payments on long-term debt 3,717,320 - - (3,717,320) (c) - -

Interest payments on long-term debt 1,848,739 - - (1,848,739) (b) - -

Funding current year's capital projects 18,339,985 11,200,000 - (29,539,985) (d) - -

Water and Wastewater - 10,086,534 5,471,773 - (b) - 15,558,307

116,918,458$ 21,286,534$ 22,968,188$ (33,257,305)$ (11,305)$ 127,904,570$

Annual surplus (deficit) -$ -$ (22,968,188)$ 27,501,312$ 11,305$ 4,544,429$

(a) Eliminate second previous year's surplus for PSA

(b) Allocation of interest expense

(c) Principal debt repayment

(d) Funding for current year's capital projects

(e) Budgeted surplus for controlled entities offset to economic vitality expense

126

CITY OF FREDERICTON

F-28

Schedule 8 - Detailed Statement of Revenue and Expenditure

General Operating Fund - Consolidated


2017


Revenue from operations:

Province of New Brunswick

Property taxes 100,067,182$ 100,185,501$ 99,295,993$

Community funding and equalization grant 1,821,738 1,821,738 1,800,174

101,888,920 102,007,239 101,096,167

Federal payment in lieu of taxes 1,280 1,280 22,985

Services provided to other governments

Transportation services - provincial routes 403,193 403,594 403,192

Public Safety Emergency Dispatch and 911 944,885 900,016 681,194

Fire services - Local Service Districts 947,737 948,764 953,236

Fire services - provincial hazmat 107,000 187,250 26,750

Services to Saint Mary's First Nation:

Fire Services - Federal transfer 273,099 273,099 266,618

Police Services - Federal transfer 279,206 350,020 288,112

Police Services - Provincial transfer 257,728 264,651 265,949

3,212,848 3,327,394 2,885,051

Licenses, permits and fines

Taxi, business and dog licenses 50,500 32,613 34,832

Building permits 846,500 1,513,002 1,156,941

Development approval 75,000 77,525 74,325

Parking, municipal bylaw, and other fines 349,454 357,364 328,703

Police security checks, fine sharing and false alarms 77,000 96,830 94,885

1,398,454 2,077,334 1,689,686

Sales and other revenue

Parking meters 663,000 641,483 724,920

Parking lots and garages 1,612,000 1,664,921 1,758,068

Public transit 1,815,000 2,110,846 1,898,207

Para transit 30,000 33,130 25,181

Chartered busing 25,000 53,174 22,930

Arena rentals 1,400,693 1,221,734 1,449,635

Outside user fee 530,587 576,371 559,215

Community centres 218,565 231,486 227,381

Indoor pool 258,422 303,005 313,549

Sports fields 147,588 286,343 153,766

Cultural Development 1,500 4,834 1,455

Police sale of unclaimed goods 2,000 1,660 936

Cash flow and investment management 118,500 526,338 351,682

Miscellaneous 7,000 464,964 271,033

Vehicle auction proceeds - 305,911 136,493

6,829,855 8,426,200 7,894,451

Total revenue from operations 113,331,357$ 115,839,447$ 113,588,340$

2018

127

CITY OF FREDERICTON

F-29



2017


Revenue (Continued):

Government transfers -$ 2,985,594$ 3,771,190$

Transfers from pension asset split - - -

Insurance proceeds - - 66,407

Third party contributions - 384,183 874,610

Transfer from Operating Reserve - - -

Total transfers from reserves - - -

Second previous years' surplus 3,587,101 3,587,101 1,009,539

Total revenue 116,918,458$ 122,796,325$ 119,310,086$

2018

128

CITY OF FREDERICTON

F-30



2017


Expenditure from operations:


Community Leadership 3,156,849$ 3,216,611$ 3,205,052$

Management Systems 1,976,100 2,104,064 1,559,675

Community Liaison & Social Outreach 150,091 130,963 152,074

5,283,040 5,451,638 4,916,801

Economic Vitality

Business Attraction & Retention 843,752 861,933 1,006,895

Tourism Development & Operations 883,983 918,689 791,537

Tourism Marketing & Sales 2,783,563 2,769,890 2,741,995

4,511,298 4,550,512 4,540,427


Solid Waste Management 2,979,519 2,849,876 2,799,534

Composting 22,417 14,658 22,791

Environmental Outreach 16,833 20,547 87,267

Storm Water Management 843,797 966,720 759,828

3,862,566 3,851,801 3,669,420

Livable Community

Land Use Planning 901,836 736,171 483,039

Development Approval 1,158,351 1,122,312 1,033,024

Heritage Planning & Conservation 206,049 191,759 169,250

Arboriculture 1,131,566 1,242,793 1,158,736

Horticulture 855,237 903,920 829,639

Cultural Development 2,201,509 2,210,508 2,058,632

Community Special Event Coordination & Support 684,465 686,376 661,322

Leisure and Recreation Development and Delivery 2,508,708 2,706,891 2,321,806

Recreation Facility Scheduling 5,531,694 5,641,983 5,100,349

Outdoor Sport, Recreation & Leisure Spaces & Infrastruc 2,287,587 2,300,769 2,942,315

17,467,002 17,743,482 16,758,112

Mobility

Roadway Management 8,969,225 10,762,660 9,539,873

Transportation System Management 1,132,516 935,141 969,286

Sidewalk Management 1,334,110 1,302,420 1,065,615

Parking Management 1,568,488 1,704,838 1,498,812

Fixed Route Scheduled Transit 5,130,154 5,360,176 5,265,285

Dial-a-Bus Transit 559,664 546,295 438,867

Chartered Busing 54,203 53,530 50,884

Taxi Industry Regulation 46,663 43,421 40,679

18,795,023 20,708,481 18,869,301

2018

129

CITY OF FREDERICTON

F-31



2017


Expenditure from operations (Continued):

Public Safety

Police Incident Response 16,198,053$ 16,329,594$ 15,805,434$

Police Incident Prevention 4,846,222 4,895,041 4,990,727

Fire Emergency Incident Mitigation 13,600,823 13,785,333 13,297,226

Fire Prevention & Inspection 1,925,913 1,930,241 1,898,268

Fire Investigation 443,243 464,260 434,909

Building Construction Permission & Enforcement 1,103,794 1,130,182 957,163

Emergency Preparedness 859,880 953,070 902,249

Bylaw Enforcement 288,887 285,431 325,228

Animal Registration & Control 122,599 123,323 145,719

Municipal Licensing 6,429 9,224 5,363

Public Safety Service Request Management - - 19,928

39,395,843 39,905,699 38,782,214

Corporate Services

Facilities Management 6,281,530 5,991,986 5,405,046

Real Estate Management 1,954,413 1,911,850 1,919,807

Fleet & Equipment Management 4,093,471 3,563,088 3,907,894

Financial Management 1,670,555 1,699,775 1,782,322

Insurance Coverage Service 51,159 62,870 81,218

Public Procurement Management 534,088 486,317 511,582

Information Technology Support 965,368 1,251,408 869,332

Information Technology Solution Delivery 716,941 771,800 826,232

Legal Services 731,906 730,051 704,891

Human Resource Management 709,298 580,383 464,253

Occupational Health & Safety 43,563 49,155 40,058

Communications Management 510,076 443,741 522,485

Request Management 293,513 292,405 324,126

Records Management 209,008 213,861 183,060

Property assessment and collection (PNB) 1,373,962 1,373,962 1,363,670

Corporate overhead allocated to external services (18,764,889) (18,048,691) (17,542,306)

1,373,962 1,373,961 1,363,670


Capital Prioritization & Investment Service 763,223 244,544 347,565

Linear and Utility Infrastructure Capital Planning Service 1,497,738 926,165 860,347

Debt & Affordability Management Service 62,719 68,700 64,381

Debt principal repayment 3,717,320 3,662,763 3,712,086

Interest on capital debt 1,848,739 1,795,553 1,940,475

Funding current year's new capital projects 5,340,000 2,428,938 3,026,275

Funding current year's capital renewal projects 12,999,985 15,318,771 14,298,544

26,229,724 24,445,434 24,249,673

Transfer to General Capital Reserve - 2,260,561 4,705,405

Transfer to General Operating Reserve - 1,186,967 291,783

Total transfer to reserves - 3,447,528 4,997,188

Total expenditure from operations 116,918,458$ 121,478,536$ 118,146,806$

General Operating Fund surplus from operations -$ 1,317,789$ 1,163,280$

2018

130

CITY OF FREDERICTON

F-32



2017


Remeasurement gains and losses:

Unrealized gain (loss) attributable to foreign exchange -$ 359,010$ 230,052$

Unrealized gain (loss) on investments - (48,930) 230,052

Unrealized surplus from subsidiary entities - 360,626 877,685

Total remeasurement gains -$ 670,706$ 1,107,737$

Consolidated General Fund annual surplus -$ 1,988,495$ 2,271,017$

2018

131

CITY OF FREDERICTON

F-33

Water and Sewerage Operating Fund - Consolidated

Statement of Revenue and Expenditure


2017


Revenue:

Water and sewerage rates 17,983,380$ 18,450,572$ 17,241,850$

Water supply for fire protection 1,000,612 1,000,612 1,000,612

Miscellaneous revenue 68,650 86,245 86,627

Interest - 138,549 44,325

Transfer from utility reserve - 60,294 2,803,943

Land sales and vehicle auction proceeds 65,000 170,262 111,231

Federal and Provincial grant funding - 9,525,202 13,919,203

Second previous years' surplus 2,168,892 2,168,892 792,380

Total revenue 21,286,534$ 31,600,628$ 36,000,171$

Expenditure:

Water

Purification and treatment 307,900$ 130,320$ 319,587$

Source of supply 260,000 437,478 373,873

Transmission and distribution 73,574 260,070 267,302

Plant and equipment maintenance 458,197 (374,054) 904,012

Billing and collecting 90,265 98,620 108,131

Water meters 56,000 352,569 332,807

1,245,936 905,003 2,305,712

Sewerage

Lift stations and system maintenance 571,411 746,712 1,982,221

Sewerage treatment and disposal 2,016,937 1,950,265 1,862,842

2,588,348 2,696,977 3,845,063

Common services 6,252,250 4,198,894 4,200,136

Fiscal services

Funding current year's new capital projects 740,000 3,461,634 937,736

Funding current year's renewal capital projects 10,460,000 17,219,372 20,482,046

Principal debt repayment - - 229,000

Interest on capital debt - - 2,375

Transfer to water and sewer capital reserve - 1,256,557 3,336,092

11,200,000 21,937,563 24,987,249

Total expenditure 21,286,534$ 29,738,437$ 35,338,160$

Annual surplus -$ 1,862,191$ 662,011$

2018

132



From: Office of the City Clerk Date: Tuesday, May 07, 2019 Title: Performing Arts Center Design Process Description: Commencement of the process for the conceptual and schematic design

for the Performing Arts Center

Council-in-Committee, at its sessions held on January 14, 2019 and May 6, 2019 reviewed an administrative report from the Assistant Director of Growth and Community Services which requested council authorization to proceed with the initial schematic/conceptual design phase for the Performing Arts Center. The full procurement strategy for the new center was developed in conjunction with the Fredericton Playhouse Inc and is intended to solicit the best architectural firm to design the Performing Arts Center on the existing Playhouse site. Staff are recommending commencing the first phase of the procurement process which would include the call for expressions of interest (EOI), review of the submissions and the final selection of a design team at the noted cost of $125,000 and then committing to the schematic/conceptual design phase (20% of the total design process). The Committee directed that the following resolution be forwarded to City Council for consideration: BE IT RESOLVED THAT Council directs the City Administrator to ensure the design process for the new Performing Arts Centre specifically considers the integration with the Fredericton Convention Centre (FCC), seeking to maximize integration where feasible and synergizes with both facilities, recognizing certain space needs in the Fredericton Convention Centre, AND BE IT FURTHER RESOLVED THAT the design process must look at the opportunity to phase specific elements currently included in the current Performing Arts Centre program, like a second 300 seat theatre AND BE IT FURTHER RESOLVED THAT Council authorizes the City Administrator to the initiate the design process for the new Performing Arts Centre, specifically the release of an Expressions of Interest (EOI), selection of the design team for one hundred and twenty five thousand dollars ($125,000) and the initiation of the schematic/conceptual

REPORT OF COUNCIL-IN-COMMITTEE


133



design portion of the full design process with all final agreements and detailed costing to be presented to Council for final approval.

134



From: Office of the City Clerk Date: Thursday, May 09, 2019 Title: Appointment to Performing Arts Centre Design Team Procurement

Committee Description: []

The Office of the City Clerk received a request from the President of the Fredericton Playhouse Board requesting the appoint of Councillor Bruce Grandy, as the Council representative, on the steering committee for the Performing Arts Centre Design Team. On June 18, 2018, City Council approved the process to hire a design team for the future performing arts centre, a process that would be developed jointly by both the Fredericton Playhouse Inc. board and the City of Fredericton. The purpose of the Performing Arts Centre Design team is to move forward with the design phase of the project. Accordingly, the following resolution is being forwarded to City Council for consideration: BE IT RESOLVED that the Council of the City of Fredericton hereby appoints Councillor Bruce Grandy, as the Council representative on the Performing Arts Centre Design Team Procurement Committee.

REQUEST FROM PLAYHOUSE BOARD


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To: His Worship Mayor Mike O’Brien and Members of City Council From: Jihad El Zamer, Purchasing and Payables Manager Date: May 08, 2019 Title: Tender # T19-07 Victoria Circle Roundabout

[]

ISSUE: Request for authorization to award Tender # T19-07 and utilize overall savings within the Engineering & Operations General Fund Budgets to cover the cost overages of this project which exceed allocated budget by approximately $190,000.

BACKGROUND: The proposed work includes the construction of a roundabout, which involves excavation of existing roadway, supply and installation of granular materials, curbs and sidewalks, pavers stones, paving, light and sign bases, concrete encased conduit, as well as water main, storm and sanitary sewer replacement, and all related appurtenances.

DISCUSSION: Six (6) submissions were received for Tender # T19-07 which closed on April 12, 2019. The tender results are as follows: Bidder Total Tendered Price Fairville Construction Ltd. $2,961,897.45* KDB Engineers / Contractors Inc. $3,040,815.05* Charmac Construction Co. Ltd. $3,173,048.95* Dexter Construction Company Limited $3,319,968.35* Monteith Underground Services Ltd. $3,440,793.10* Philson Ltd. $3,474,880.25* * HST Included

COUNCIL POLICY: CCDC 4 Contracts which exceed budget require City Council approval in accordance with Policy No. COR-POL-023 Goods and Services Acquisition.

FINANCIAL CONSIDERATION (Immediate Impact on Approved Budget): Funding for this project will come from: 1. Engineering & Operations Utility Fund Budget under Water and Sewer TCA-Renewal Rebuilding –

Victoria Circle Roundabout; 2. Engineering & Operations Utility Capital Reserve Fund under Water and Sewer Fund Reserves –

Water and Sewer TCA Renewal/Rebuild – Capital Project; 3. Engineering & Operations General Fund Budget under Engineering Services TCA-Renewal/Rebuild –

Victoria Circle Roundabout; 4. Engineering & Operations General Fund Budget under Roadway Operations TCA-Renewal/Rebuild –

Storm Sewers Renewal; 5. NBDTI Provincial Designated Highway Funding; and


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6. Growth & Community Services Budget under Community Planning TCA New – Plan Implementation and Public Realm Improvements.

The tender cost is actually within the total overall allocated budget; however, when engineering costs, pavement markings, traffic signage, street lighting, and the relocation of power and communication utilities are factored in, the overall project cost exceeds the allocated budget. The General Fund components are projected to be $190,000 over the allocated budget. The intersection of Brunswick Street, King Street and Smythe Street is an important intersection in the City’s pedestrian and transportation network. The completion of this project is key to improving the safety and efficiency of pedestrian and vehicular movement through the intersection. Engineering Services proposes the cost overages of this project be covered through overall savings within the Engineering & Operations General Fund Budgets. The tender of the low bidder was reviewed by staff of the Engineering and Operations Department for the above noted project and found to be in order. Staff recommends awarding this tender to the low bidder meeting specifications, which is Fairville Construction Ltd. The engineer’s estimate for this tender is $2,475,000.00 HST Included.

LEGAL CONSIDERATION: The Canadian Standard Construction Document CCDC 4, latest revision (2011), for Unit Price Contract, which includes Agreement between Owner and Contractor, Definitions, General Conditions of the Unit Price Contract: General Provisions, Administration of the Contract, Execution of the Work, Allowances, Payment, Changes in the Work, Default Notice, Dispute Resolution, Protection of Persons and Property, Governing Regulations, Insurance and Contract Security and Indemnification, Waiver of Claims and Warranty forms part of this tender.

SUSTAINABILITY DUE DILIGENCE:

the economic impact: This purchase is in keeping with City Council’s policy regarding infrastructure renewal which is formalized in the annual budget process. This project has been selected from a priority list that is in keeping with our commitment to sustainable infrastructure and as guided by the Capital City Municipal Plan and subsequent master plans; balancing infrastructure renewal with on-going maintenance and new investments.

the environmental impact: All requests for goods and services tendered by the City of Fredericton seek environmentally friendly components when applicable; as part of the technical specifications. As well service providers are required to follow all environmental regulations and when necessary, provide an environmental management plan.

the social impact: While the tendering of these goods and services do not directly impact vulnerable citizens and groups; it is important to note that the strategic planning, upgrading and provision of new infrastructure ensures that the entire community continues to enjoy high quality service provision.

COMMUNICATION PLAN: The construction process involves contact between the City and Contractors. Appropriate communications take place at that level. The Contractor has been supplied with construction management signage plans for this project. Communication to the public will be required and will be made by the City and the Contractor through various means.

SPOKESPERSON: Sean Lee, Assistant Director of Engineering & Operations / Manager of Engineering Services Jihad El Zamer, Purchasing and Payables Manager

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OPTIONS: Option # 1 City Council may choose to authorize and approve the award of Tender # T19-07 Victoria Circle Roundabout to Fairville Construction Ltd., low bidder meeting specifications, at the tendered price of $2,961,897.45 HST Included; and authorize the Mayor and City Clerk to execute the CCDC 4 Unit Price Contract and such further legal documents as required to facilitate this resolution; and authorize and direct the Acting City Treasurer to utilize overall savings within the Engineering & Operations General Fund Budgets to cover the cost overages of this project which exceed budget. Option # 2 City Council may choose to not authorize and approve the award of Tender # T19-07 Victoria Circle Roundabout to Fairville Construction Ltd., low bidder meeting specifications, at the tendered price of $2,961,897.45 HST Included. RECOMMENDATION: It is recommended that City Council consider the following resolution:BE IT RESOLVED THAT the Council of the City of Fredericton hereby authorizes and approves the award of Tender # T19-07 Victoria Circle Roundabout to Fairville Construction Ltd., low bidder meeting specifications, at the tendered price of Two Million Nine Hundred Sixty-One Thousand Eight Hundred Ninety-Seven Dollars and Forty-Five Cents ($2,961,897.45) HST Included; andBE IT FURTHER RESOLVED THAT the Mayor and City Clerk are authorized to execute the CCDC 4 Unit Price Contract and such further legal documents as required to facilitate this resolution; andBE IT FURTHER RESOLVED THAT Council of the City of Fredericton authorizes and directs the Acting City Treasurer to utilize overall savings within the Engineering & Operations General Fund Budgets to cover the cost overages of this project which exceed budget. Prepared by: Jihad El Zamer, Purchasing and Payables Manager Approved by: Alicia Keating, Acting Director of Finance, Information, and Technology Department / Acting City Treasurer

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To: His Worship Mayor Mike O’Brien and Members of City Council From: Ken Forrest, MCIP RPP, Director of Growth and Community Services Date: May 07, 2019 Title: Exemption to By-law S-13 A By-law Respecting Disturbance by Noise – 81 Regent Street Description: []

OPEN OR CLOSED SESSION: This issue is to be considered at an open session of Council.

ISSUE: The developer of a new office and retail building to be located at 81 Regent Street requires an exemption from Section 1.03 (f) of By-law S-13, A By-law Respecting Disturbance by Noise to permit construction activity on the site between the hours of 6:00am and 9:00pm on Sunday, May 19, 2019 (Rain-date Sunday May 26, 2019).

BACKGROUND: At the May 6, 2019 meeting of Council in Committee, Sean Lee and the undersigned advised that the developers of 81 Regent Street intend to erect the crane required to facilitate construction of the new building on the Victoria Day long weekend. A full closure of Regent Street for up to 84 hours will be necessary to install the crane on-site. The developer has requested the ability to work on Sunday, which is normally prohibited by the Noise By-law, to complete the work as quickly as possible. An accelerated process will minimize disruptions to the adjacent property owners and to the transportation system.

DISCUSSION: The impacts of the Regent Street closure are being addressed by the developer in consultation with the Engineering and Operations Department. No Council approvals are required for this work. Although vehicular traffic will be detoured on alternate routes, pedestrian access will be maintained through the area keeping local businesses accessible. Appropriate signage will be placed to direct vehicle and pedestrian traffic and Downtown Fredericton Incorporated is involved in implementing measures to minimize overall impact. The exemption to the Noise By-law to work on Sunday is necessary to complete the work during the long-weekend, to include some contingency time to account for poor weather, and to reduce the risk of the work not being completed before the start of the work-week. The recommendation also includes a rain-date as a precaution if the long-weekend weather causes a postponement. Sunday exemptions to the Noise By-law are relatively common for large construction projects and were recently utilized for the work that happened to the Centennial Building last year. The developer advises that the noise associated with crane assembly is not particularly invasive and is at the lower end of the spectrum of common construction noise. The work is unavoidable and necessary for a development of this scale. As a result, staff recommend approval of the exemption request.


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COUNCIL POLICY: Council’s practice is to grant exemptions to By-law S-13 authorization is required for the acquisition, disposals and agreements regarding property for municipal purposes in accordance with Policy No. COR-POL-047, Property Acquisition and Disposal.

FINANCIAL CONSIDERATION (Immediate Impact on Approved Budget): None.

LEGAL CONSIDERATION: The City Solicitor’s Office was not specifically consulted in the preparation of this report given that the normal process for Noise By-law exemptions is being used.

SUSTAINABILITY DUE DILIGENCE: Not applicable.

COMMUNICATION PLAN: The developer has communicated with businesses and residents near the subject property.

SPOKESPERSON: Ken Forrest, Director of Growth and Community Services

OPTIONS: 1. Council may choose to grant the exemption to By-law No. S-13, A By-law Respecting

Disturbance by Noise, Section 1.03 (f); or

2. Council may choose not to grant the exemption to By-law No. S-13, A By-law Respecting Disturbance by Noise, Section 1.03 (f)

RECOMMENDATION: It is recommended that City Council adopt the following resolution: BE IT RESOLVED the Council of the City of Fredericton hereby grants an exemption to By-law No. S-13, A By-law Respecting Disturbance by Noise, Section 1.03 (f), to permit the developer of 81 Regent Street, their officers, agents, contractors, servants, employees, workers, and all other persons acting under its authority or with its permission, to carry out work at 81 Regent Street between the hours of 6:00am and 9:00pm on Sunday May 19, 2019 (Rain-date Sunday May 26, 2019). Prepared by: Ken Forrest, MCIP RPP, Director of Growth and Community Services

141

To: His Worship Mayor Mike O’Brien and Members of City Council.

From: Juan Estepa, Manager of Heritage and Urban Design Date: May 08, 2019 Title: Public Hearing Date – 102 Queen Street: Potential Amendment to By-law L-4, City of Fredericton Heritage Preservation By-law Description: []

OPEN OR CLOSED SESSION: This issue is to be considered at an open session of Council.

ISSUE: Council must decide whether it wishes to initiate the process to consider making a portion of 102 Queen Street subject to By-law L-4, the City of Fredericton Heritage Preservation By-law.

BACKGROUND: On April 23, 2019, a Temporary Order to Cease Activity was issued to the owner of 102 Queen Street, by the City of Fredericton’s Heritage Inspector, pursuant to subsections 84(2) and 84(3) of the Heritage Conservation Act. The Temporary Order to Cease Activity directed that any and all activity cease at or on the Subject Property for sixty (60) days from the date of the Order, in order to allow Council time to consider the heritage designation of the subject property under municipal bylaw. Pursuant to subsection 56(1) of the Act, no proposed bylaw to make the property subject to the City’s heritage by-law shall be considered until Council has done the following: (a) fixed a time and place for considering objections to the by-law; (b) given notice of its intention to consider making the by-law to the owners of the affected properties; (c) made notice of its intention to consider making the by-law available to the public:

(i) by publishing a notice once per week for at least 2 consecutive weeks before the date fixed in paragraph (a) in a newspaper published in or having general circulation in the municipality; or

(ii) by any other method prescribed by regulation; and

(d) considered any written objections to the by-law and heard any person who wished to speak for or

against the by-law at the time and place fixed under paragraph (a).

When Council gives notice pursuant to subsection 56(1)(b) of the Act, the temporary Order to Cease Activity is extended until a decision is made by Council under subsection 55 on whether to designate the subject property as a heritage conservation area by by-law.


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This is the first time the City of Fredericton has utilized these provisions of the Heritage Conservation Act.

DISCUSSION: The process to consider designating 102 Queen Street as a heritage conservation area is very similar to the process that is used by City Council to consider rezoning of land. Council must first decide whether it is prepared to consider an amendment to the By-law and if so, a public hearing date is set, the matter is referred to staff for a professional opinion and to the Preservation Review Board (PRB) for its input, and the notification requirements must be fulfilled. In this case, notification, the preparation of a report and review by the PRB would occur before a public hearing that would be held on Monday, June 24, 2019.

COUNCIL POLICY: Not applicable.

FINANCIAL CONSIDERATION (Immediate Impact on Approved Budget): Meeting the notification requirements requires expenditures for advertising that are covered by existing budget allocations.

LEGAL CONSIDERATION: Not applicable.

SUSTAINABILITY DUE DILIGENCE: Not applicable.

COMMUNICATION PLAN: The legislation sets out the process to communicate the consideration of the proposed By-law.

SPOKESPERSON: Juan Estepa OPTIONS: 1. That Council initiate the process to consider making a portion of 102 Queen Street subject to By-

law L-4, the City of Fredericton Heritage Preservation By-law.

2. That Council not initiate the process to consider making a portion of 102 Queen Street subject to By-law L-4, the City of Fredericton Heritage Preservation By-law.

RECOMMENDATION: It is recommended that City Council adopt the following resolution: BE IT RESOLVED that the Council of the City of Fredericton hereby directs the Legal Division to prepare the appropriate by-law to amend By-law No. L-4, City of Fredericton Heritage Preservation By-law, to include a portion of the property located at 102 Queen Street; that the notice requirements of Section 56(1) of the Heritage Conservation Act be fulfilled; that the matter be referred to the Preservation Review Board for the views of the Board; that the matter also be referred to the Manager of Heritage and Urban

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Design for review and comment; and that the regular Council Meeting of Monday, June 24, 2019 at 7:30 p.m., at the Council Chamber, City Hall, be set as the time and place for the consideration of objections/support to the proposed by-law. Prepared by: Juan Estepa, Manager of Heritage and Urban Design Approved by: Ken Forrest, MCIP RPP, Director of Growth and Community Services

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