Home > News > News Releases > Mayor Don Darling speaks to the importance of financial sustainability for Saint John and responds to the report from the Auditor General of New Brunswick during a press conference in Saint John

Mayor Don Darling speaks to the importance of financial sustainability for Saint John and responds to the report from the Auditor General of New Brunswick during a press conference in Saint John

11-Jun-2019

Mayor Darling’s statement read as follows:

The City of Saint John’s number one priority is its long-term financial sustainability.

Cost cutting is important, but we must grow – we cannot cut our way to prosperity. Municipalities do not have the tools or authority to solve financial challenges without provincial-led reform. The City of Saint John has been consistent in its call for real municipal reform. In fact, this is something that all cities in New Brunswick are looking for and support.

For example:
•    Fair and reasonable property tax reform
•    Ability to share costs and services within a region
•    Authority to find alternative revenue streams
•    Legislative changes to other barriers such as binding arbitration and regional facilities

The support of the former government recognized the real challenges the City faces and put in place interim support, until more permanent solutions could be found. This plan simply paused the necessary restructuring while more permanent solutions could be studied and implemented. When this process began, we never anticipated taking the second and third year of support.

I am on the record and have stated many times that the City of Saint John needs to be restructured. A bright and sustainable future requires the province to play a leading role, and make tough and timely decisions.
We woke up this morning with real structural problems and we will go to bed tonight with the same structural problems. Until the Municipal Sustainability Working Group report, now five months late, comes back with real reform and actions, we are going to continue holding back the potential of the City.

If the City of Saint John is not growing, the region is not growing, and the province will not grow.

The City of Saint John remains committed to the continued work of restructuring. We are waiting for the support pledged by the Higgs government and to actions that will lead to a thriving City of Saint John and Province of New Brunswick.

The residents of Saint John need to know that, without tax reform, the pending cuts will affect nearly every service we provide and they will be drastic. We are talking about reduced service delivery, facility closures and funding cuts all at once. I’m sure that even those shouting for us to make it happen have no idea how severe the cuts will be.

With regards to the report tabled by the Auditor General of New Brunswick today, the City:

•    Respects the role and mandate of the Auditor General.
•    Has no comment regarding recommendations directed to internal Provincial Government Departments. Most of the Auditor General’s conclusions focus on provincial actions and initiatives.
•    Wishes to remind everyone of the purpose behind the “New Deal” funding agreement. As a quote from the agreement, “The Province agrees to establish a working committee with representation from the City for the purpose of evaluating the success of this Agreement as well as to review long term solutions deemed necessary to improve the fiscal condition of the City.  The working committee will complete a report with an evaluation of the measures included in the agreement, any subsequent measures announced as part of the Agreement and any additional recommended actions aimed at solving the City’s structural deficit to government on or before January 1, 2019”. In short, it was never about the money, it was about finding real reform.
•    Wishes to comment on some of the implications contained in the Auditor General’s Report that relate specifically to the City of Saint John.
      o    With respect to the Auditor General’s reference that the City of Saint John leveraged the recent Provincial election to advance the three-year funding agreement, the timing of our efforts reflected the City’s annual budgeting process, as well as the urgent need to address our long-term sustainability issues. Sustainability remains our number one priority, independent of the timetable of Provincial elections and who has or will form government.
     o    With respect to the Auditor General’s reference that the three-year funding agreement encourages the City to run larger deficits, I can reassure you that our motivation has and will continue to be reducing deficits and improving our financial situation. We continue to drive operational efficiencies, through a variety of means, including our continuous improvement initiatives, which are projected to remove $2.5-million in annual expenditures by the end of 2019. We also continue to focus on mechanisms to reduce our reliance on the special funding from the Province. For example, in the second year of the deal, we anticipated a deficit of $8.9-million but through internal efforts, we will only require $7.1-million.
     o    With respect to the Auditor General’s reference that the three-year funding agreement in some way results in insufficient financial reporting and auditing, we would like to reassure both provincial and municipal taxpayers that the City of Saint John has extremely robust financial reporting and audit procedures in place. There is a detailed review and a compliance audit required for the City to receive payments under the three-year funding agreement. The agreement provides the Province full access to City records and documentation. In fact, we just completed the provincial review of the second payment with respect to a $1.5-million payment received on June 4 of this year. The Province will not release funds without ensuring that the financial claim and all supporting submitted financial information is accurate. The City also recently received a 2018 clean audit from Deloitte.

The City of Saint John is in full agreement with the Auditor General with respect to her comments regarding delays in completing the final report and recommendations from the Municipal Sustainability Working Group. Long-term solutions to the City’s financial sustainability challenges were a priority at the time of signing the three-year funding agreement, and remain a priority today.  

Auditor General's Report - see Chapter 5

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