Sustainability + resilience: Fredericton's journey.

• Author: Tapley, Tina

The City of Fredericton, New Brunswick, has managed to not only see its way successfully through the economic turbulence of the last seven years, but to achieve a solid and stable financial footing. City officials understood the severity of Fredericton's infrastructure deficit in 2009 and created a long-term financial plan that provides the foundation for a sustainable future. Smart financial planning and budgeting have allowed Fredericton to overcome problems that have continued to plague other municipalities.

The city's financial stewardship role includes three main responsibilities: 1) balance the annual budget; 2) create and manage financial sustainability, which involves the creation of a long-term financial plan; 3) maximize the value citizens and customers receive for the money spent. Taxpayer dollars should be turned into results that are valued by the community.

ADDRESSING THE CITY'S CHALLENGES

From the outset of this undertaking, the city's goals were to move toward sustainability and, from there, the resiliency to withstand tougher financial times while gaining the flexibility needed to balance growth during financial boom periods. At all times, the city focused its efforts on ensuring that money was being spent on the right things at the right time, while remaining affordable to the taxpayer and avoiding waste. Existing service delivery needs had to be met without compromising the future financial stability or the future growth of the city.

The initial steps, back in 2008, were undertaken to comply with new accounting standards set forth by the Public Sector Accounting Board (PSAB). PSAB set forth independent accounting standards that were used to help determine the current state (and future state) of assets available to municipalities. The City of Fredericton was the first municipality in New Brunswick to comply with the standards, using the pay-as-you-go asset information to determine the city's infrastructure deficit and its long-term infrastructure funding plan. This information fed into a city financial "health assessment" and became the groundwork used in creating a long-term financial plan. Strategies were then formed to improve asset management in the future.

The city created a financial forecasting model in 2009 as part of a long-term financial plan, and it used the model to help determine the infrastructure deficit. The long-term financial plan and infrastructure funding plan were then presented to the city council, which adopted them in 2010. A 2012 corporate restructuring included the first staff layoffs in Fredericton's history, part of a workforce reduction strategy to bring personnel levels back to a sustainable level. Immediately after the reorganization, the city started implementing Lean Six Sigma principles.

Fredericton's tax base began to decrease, and between 2013 and 2015, the city's Provincial Community Funding Grant was cut by 75 percent, resulting in a loss of 4.5 percent in total revenue. Municipal costs were quickly outpacing revenue, resulting in an unparalleled fiscal operating gap. The city's lack of a long-term financial plan had enabled unsustainable personnel growth during the previous economically robust years. This situation was compounded by high arbitrated settlements from public safety wage contracts. The city also faced a $1.38 million infrastructure deficit and the largest pension deficit in its history: $57 million.

The city has been able to increase its yearly savings nearly three- to four-fold between 2012 and 2015. Just between 2012 and 2013, yearly savings grew from $562,985 to $2,079,952 because of efficiencies achieved through Lean Six Sigma and budgeting changes through the city's...