April
11, 2017
GOVERNMENT SERVICES COMMITTEE
Pursuant
to Standing Order 68, Mark Browne, MHA for Placentia West – Bellevue,
substitutes for Carol Anne Haley, MHA for Burin – Grand Bank.
Pursuant
to Standing Order 68, Barry Petten, MHA for Conception Bay South, substitutes
for Keith Hutchings, MHA for Ferryland.
The
Committee met at 9:03 a.m. in the Assembly Chamber.
CLERK (Hammond):
Good morning.
My name
is Kim Hammond. I'm going to be the Clerk for this meeting of the Government
Services Committee.
The
first order of business is the election of the Chair. Are there are any
nominations from the floor?
AN HON. MEMBER:
I'd like to nominate Randy
Edmunds, Torngat Mountains.
CLERK:
Are there any further
nominations from the floor?
Are
there any further nominations from the floor?
Hearing
no further nominations, the Member for Torngat Mountains is acclaimed Chair.
Mr.
Edmunds, would you like to take the Chair?
CHAIR (Edmunds):
Okay, thank you everyone.
The next
of order of business, we call for nominations for Vice-Chair.
MR. BROWNE:
I nominate the Member for
Stephenville – Port au Port.
CHAIR:
Okay, the Member for
Stephenville – Port au Port has been nominated for Vice-Chair.
Further
calls for nominations?
Further
calls for nominations for Vice-Chair?
Congratulations. The Member for Stephenville – Port au Port is acclaimed as
Vice-Chair.
First,
we'll ask the Government Services Committee to introduce themselves.
MR. PETTEN:
I'm Barry Petten, MHA for
Conception Bay South and Transportation and Works critic for the Opposition.
MS. BONIA:
Laurie Bonia, Researcher, Opposition Office.
MS. HAYDEN:
Veronica Hayden, Office Manager, Opposition Office.
MR. BROWNE:
Mark Browne, MHA, Placentia
West – Bellevue.
MS. PARSLEY:
Betty Parsley, MHA, Harbour
Main.
MR. FINN:
John Finn, Stephenville –
Port au Port.
CHAIR:
Okay, we'll get started here
now and I'll introduce the title. And with that, we'll ask for introductions
from the Transportation and Works Minister and delegates.
CLERK:
1.1.01.
CHAIR:
Shall 1.1.01 carry?
Minister, before we get started I'd like you to introduce yourself and the rest
of your department.
MR. HAWKINS:
Thank you, Mr. Chair.
Minister
Hawkins, Transportation and Works.
MS. KING:
Tracy King, Deputy Minister, Transportation and Works.
MS. ENGLISH:
Tracy English, ADM, Strategic and Corporate Services, Transportation and Works.
MS. MCCARTHY:
Charlene McCarthy, Departmental Controller, Transportation and Works.
MS. HOWARD:
Jacquelyn Howard, Director of Communications, Transportation and Works.
MR. BAKER:
John Baker, ADM of Marine Services, Transportation and Works.
MR. DUNFORD:
Joe Dunford, Assistant Deputy Minister of Transportation.
MR. GRANDY:
Cory Grandy, Assistant Deputy Minister for the Works Branch.
MR. MORRISSEY:
Patrick Morrissey, Budget Manager, Transportation and Works.
MS. PITCHER:
Margot Pitcher, Executive Assistant to Minister Hawkins.
CHAIR:
Okay. Thank you.
I'd like
to introduce the Member for Bonavista who will be late coming in.
What
we'll do now is give the minister some time for opening remarks and then we're
going to do the line by lines.
MR. HAWKINS:
Thank you, Mr. Chair.
Certainly, it's a pleasure for me this morning, along with my staff, to do our
Estimates. This is my second opportunity now as Minister of Transportation and
Works. I have about 16 months now of experience in this department.
Last
year, when we did the Estimates, I think I was probably about three months in.
It was certainly a bit of a daunting task at that time because it was a new
experience for me having to go through Estimates. Of course, a lot of the
Estimates last year that I had tried to defend were actually Estimates and
forecasting from a previous administration and then looking forward in the
fiscal year for our department in the new government. So that was a bit of a
challenge to balance the two, but we did it and we got through it.
Mr.
Chair, I guess this year Budget 2017
really reflects our commitment to strong, fiscal management and returning to
surplus in 2022-2023. I think we've been very clear with our messaging on that
and with this budget that we have. We still have significant fiscal challenges
that we are addressing and within my department itself. We cover such a wide
variety of services that we provide to the residents of Newfoundland and
Labrador. We do have that challenge.
Mr.
Chair, it's probably one of the few departments that I guess every single day we
are touching some resident of Newfoundland and Labrador. Whether it's through
our roads, through our ferries and through the services we provide, air
ambulance, it's pretty much every day someone is going to be impacted.
As
you're aware, of course, departments have focused on finding efficiencies and
curbing spending. In the Department of Transportation and Works we've made a
concerted effort to identify savings and absorb budget pressures within the
current funding levels.
To be
able to do this we've created a culture of enhanced financial accountability.
Everyone is accountable for their budgets. Regular budget monitoring and budget
preparation meetings are held to ensure that everyone is aware of the financial
issues and working together to find solutions. We've focused on reducing travel
costs through the use of technology. We've reviewed the application methods for
salt and sand and have implemented changes to optimize the use of our salt.
In
preparing Budget 2017, government
implemented a zero-based budgeting approach which is a new approach. We have
taken that approach very seriously. We built our budgets from zero and with
justified continued investment. Through the process that we've gone through, we
have $1.37 million in savings and increased revenue as identified in the
Department of Transportation and Works.
Throughout this morning in our Estimates, we will find that there are a number
of organizational changes and reviews. Through the process, 39 positions within
Transportation and Works were eliminated and 16 positions were created because
we did have some changing from department to department. So we have a total
reduction of 23 positions.
All
affected employees have been notified. Most changes will be implemented
following the end of the winter season which we hope is behind us. Of course,
through the review of department structure, we've identified different ways to
deliver some of our services and we continue to do that. Efficiencies are so
important for us to make sure that we are positioning ourselves to get the best
return for the investment we are making.
One of
the challenges that we did have last year or through 2016-2017 was the rainstorm
in October. There were a number of communities that were affected by the
Thanksgiving rainstorm. We did everything that we could possibly do and used
every available resource to make sure we had those communities back in to having
services as quickly as possible. There were 40 road beaches, 10 communities
isolated due to the washouts and the road closures, and 17 communities that
declared states of emergency. So we have made a significant investment, and
obviously working with the federal government on some of the costing, hopefully
return back to the province under the financial aid.
Budget 2017,
we are allocating $77.2 million to the Provincial Roads Program in a five-year
program. I'll certainly get an opportunity to explain more of that later as
well.
We're
seeing positive results, partly by our early tendering which is something we are
taking great pride in. We're getting more kilometres, 90 kilometres of more
roads done last year with $5 million less. Of course part of that, there are a
number of factors, pricing, the cost of asphalt per ton less. Also, one of the
key factors is getting our tenders out early and getting very competitive bids.
So that has attributed to us getting more work done.
Of
course, part of what I'll talk about this morning as well will be our $3 billion
infrastructure investment over the next five years. We also have a five-year
marine plan in place; a $28 million investment over the next five years,
frontloading about $8 million this year.
A couple
of the other issues I just wanted to highlight is the fact that we have made
significant – I guess we have achieved more than what we expected with our
leasing. I had set a target of 40,000 square feet by the end of March and we
surpassed that by 2,500 square feet. I have now set a target of 110,000 square
feet which we will be very actively working on. We had a target of 70,000 and
I've upped that to about 110,000.
I just
wanted to highlight a few of those achievements and investments and direction,
but I also would be remiss if I did not say a huge thank you to all the men and
women who work within my department for their efforts day in and day out to
provide a safe and reliable transportation network for the people of this
province. Mr. Chair, it was never more evident of the tremendous work that our
staff put into the pride in their work then it is during the winter season.
I know
first-hand of some of the challenges, because my brother himself worked with
Transportation and Works for many, many years, and I often heard many of the
stories that he relayed to me of having to use the plows, as an operator, during
the winter under very, very challenging circumstances. This winter past –
hopefully it's past – we've had tremendous challenges.
The
amount of snow we had this year has exceeded anything we've had in the most
recent years, and our men and women have done a yeoman job of being out there in
very adverse weather conditions and blizzard conditions often. I just wanted to
make sure this morning that I recognized, before we get into the Estimates, the
tremendous amount of work and support that we're getting from our employees.
So, Mr.
Chair, thank you for the opportunity to have some of these opening remarks, and
now I just pass it back to you.
CHAIR:
Okay, thank you, Minister.
Before I
open up for questions from the Government Services Committee, I'd just like to
point out that when you go to your department for technical questions from
staff, that there'd be ample time to announce them just for the Broadcast
services so they can identify who the speaker is.
Okay,
with that we'll go to the Government Services Committee. What we'll do is we'll
go in 15 minutes opening, and then probably 10-minute increments. If there are
any questions, I'm sure Mr. Petten has the floor.
So with
that, I will open up to questions from the Government Services Committee.
MR. PETTEN:
There's no one here from the Third Party to ask questions, it's just us. So are
we going to – last year I know the same thing happened; we ran the clock until
we finished the sections and then we voted on them. I'm just –
CHAIR:
Yeah, well we have three
hours. If it takes less than that then –
MR. PETTEN:
No, I'm just saying instead
of running the clock for each section, because it's going to be pretty well
open-ended. We're not going back and forth.
CHAIR:
Okay.
MR. PETTEN:
Thank you very much.
If you
don't mind, Minister, I would, just before I go down through the line-by-line, a
couple of general questions. I may interlude in between off and on and ask
questions pertaining probably to a bigger, as opposed to the line-by-line, some
general questions as well.
MR. HAWKINS:
Yes, that would be fine. I
think, if we can, we'll try to keep them through to the steps we're going
through but that would be fine if we can – because that way it will give me a
better understanding of exactly where I am with the answers I have.
MR. PETTEN:
No, no, we'll still go
through that but there might be some general questions as we get to the
sections.
MR. HAWKINS:
Okay.
MR. PETTEN:
The first question I need to
ask, based on your comments just then, you say there are 23 fewer positions
within the department this year. If that's the number, how many people are
employed with the department now today?
MR. HAWKINS:
As of today, this morning,
1,665.
MR. PETTEN:
And that's 23 less from last
year.
MR. HAWKINS:
Yes, the exact number of
people we have working as of this morning was 1,665.
MR. PETTEN:
Do you know how many of those
are what we consider the 13-weekers?
MR. HAWKINS:
That –
MS. KING:
Can we come back to it?
MR. PETTEN:
Sure.
Out of
those 23 positions eliminated, are the PCNs also gone?
MR. HAWKINS:
I guess Mr. Petten, for some
of these – when we're looking at these, we're going through – and I think I
noted that by the end of the winter season we will have all of the positions
that were impacted, it will all be taken care of within our restructuring and
reorganization.
Tracy,
is there anything else to add to that?
MS. KING:
(Inaudible.)
MR. HAWKINS:
We're working through that
piece.
MR. PETTEN:
Out of those 23 positions,
where is the bulk of those positions from? Are they management level, front
line?
MR. HAWKINS:
It's not front line. As you
know, we've done a restructuring within our management structure. So you will
find these positions within the higher management level. We have done some
changes within our directorship as well, as we reorganized, and as that filters
out. So it will be more the management, superintendent level, the director
level.
MR. PETTEN:
Okay.
I guess
we'll start off and do the line by line now. Some questions there.
CHAIR:
Yes.
MR. HAWKINS:
As we work through this, you
will see some of the – as an answer to the question you put there. You will see
as we work through these line-by-lines some of these positions, how they're
impacted. The answer will come out through those questions in the questioning on
the Estimates where we've made allocations with Salaries. You'll see it.
MR. PETTEN:
Okay.
MR. HAWKINS:
As we work through, you'll
see these filtering out.
MR. PETTEN:
All right.
Just
under 1.2.02, Salaries, it's $300,000 less.
MR. HAWKINS:
One point …?
MR. PETTEN:
Wait now, maybe I'm on the
wrong page.
Sorry
about that. My apologies, I got ahead of myself there now.
1.1.01,
Minister's Office.
MR. HAWKINS:
That's my office, yes.
MR. PETTEN:
Your office, yeah.
In
Salaries, there's an increase.
MR. HAWKINS:
Yes.
You'll
notice that within the salary variance there, in 2017-2018 from last year we're
looking at a decrease. It's a $5,400 decrease due to changes in the funding
levels of departmental salary allocation.
In
2016-2017 from the projected to the revised, the projected revised variance
salaries; there was a $23,000 surplus that we were able to find there. That was
partly because I opted to submit travel claims rather than accept the option of
receiving a car allowance. So when we did our zero-based budgeting this year we
took that into consideration. I'm not taking a car allowance. We've found a
surplus in that, so we've made that change.
MR. PETTEN:
All right.
The next
section, General Administration, 1.2.01, Salaries again on that line is $113,000
less.
MR. HAWKINS:
Yes.
Between
the 2016-2017 revised variance salaries we found a savings of $23,000. Again,
that was partly because we delayed recruitment of an ADM in a Transportation
position, so there was a little bit of an overlap there. The $142,500 decrease
that we projected for 2017-2018, again, is going to be – when we talked about
the executive director positions and some of the step changes for the executive,
we've made some changes there.
The
salary there includes permanent salaries; one for the deputy minister. We have
four under a new structure, four assistant deputy ministers. We have now a
minister of Infrastructure, we'll have an Assistant Deputy Minister of Marine
and Air Services and we'll have an Assistant Deputy Minister of Operations and
Strategic and Corporate Services.
We have
Operations, we have Strategic and Corporate Services, we have Marine Services
and we have Infrastructure. We're going with four ADMs. And then we have two
secretaries to the assistant deputy ministers and one director of
Communications. That's all the salaries we have in that $1,025,100 category.
MR. PETTEN:
Okay.
Move on
to 1.2.02, Administrative Support.
MR. HAWKINS:
Yes.
MR. PETTEN:
Again under Salaries there,
it's a drop of $319,000 from the revised.
MR. HAWKINS:
Yeah, we had projected
revised of $280,000 we found in surplus. That, again, is a result of the
structural reorganization that we did. Under that, there were three positions
that are now reporting to the director of Policy, Planning and Evaluation.
So
you'll see that $280,000 surplus piece, if I'm correct, will come up in Policy –
most of it will come in Policy and Strategic. We've just moved one out. It's a
little bit of reorganization within that structure. A portion of the salary
piece will be picked up in the Policy section.
MR. PETTEN:
You say management
structures. It's a broad statement, I guess, with a department the size of TW.
It's a bit confusing when you just say the term, management structures. I mean,
we see here there's a – you say it's going to show up somewhere else. It is
$200,000 – what, $300,000.
MR. HAWKINS:
Two hundred and eighty
thousand dollars.
MR. PETTEN:
Yeah. For this year's budget,
though, we're down to $1.92 million as opposed to $1.412 million in the revised,
right?
MR. HAWKINS:
Yeah.
MR. PETTEN:
That brings me to $319,000.
MR. HAWKINS:
Yeah, you're correct – well,
actually, there's a decrease in the 2017-2018 budget variations of, I think it's
close to $600,000.
MR. PETTEN:
Right.
MR. HAWKINS:
That's a structural
reorganization. What we've done is we have the addition in that section of an
executive safety branch, HRS department. We moved two OHS positions and a
director of Occupational Health and Safety since additional support will be
provided by this branch.
The
reductions are two OHS consultants, a safety manager and we have created an OHS
consultant. That will result in a net effect decrease of $153,000, so we've done
a bit of reorganization.
I just
want to make it very, very clear, we're not removing OHS. That is still a very,
very important part of our entire operations. We're just doing some
reorganization in that, and to make sure that we're doing the exact same amount
of work as we had previously done.
MR. PETTEN:
In essence, there have been
OHS positions, though, removed from the department and replaced with a
consultant.
MR. HAWKINS:
What we've done is we've
reorganized them.
MS. KING:
Through the Human Resource Secretariat, they've established a new Corporate
Safety Division. Fewer services – I guess not fewer services, but services will
be provided more corporately than on an individual department basis.
Where we
would have formally had a director of OHS, now we have a manager of Corporate
Safety, but the director is in the Human Resource Secretariat. That's just how
the whole system corporately is being reorganized. We're trying to manage OHS
more centrally with more, I guess, front-line involvement in departments. We
still have a safety section with two OHS consultants, a Corporate Safety manager
as well as the OHS folks in Marine and Air.
MR. PETTEN:
Okay.
Under
Employee Benefits, the next line down, it's less. What, in a nutshell, is
included there? Is that severances?
MR. HAWKINS:
Well, under the Employee
Benefits, of course, that would include workers' compensation payments, the
claim cost only, for about 1,700 departmental staff. TW does not pay workers'
compensation premiums, but we do an extended earnings loss pension. There are
some claim costs only and some salary costs for some injured casual workers.
Included
also in those benefits is Corporate Safety. We have fees associated with the
fire protection officer maintaining government-wide National Fire Protection
Association membership as well. These are the costs that we include in our
Employee Benefits section.
MR. PETTEN:
Okay.
MR. HAWKINS:
Just in the variance, we do
have an increase of $2,000 in there. That's a funding reallocation increase.
These are related to fees for the fire protection officer and maintaining its
accreditation for the National Fire Protection Association membership,
basically.
MR. PETTEN:
So what about severance?
Where would that be found there?
MR. HAWKINS:
If there was any severance,
it would be coming up into the employee – it would be in the salary piece, not
into the benefit.
I just
might add we did see a surplus in our revised. If you notice, we did have a
deficit, I'm sorry, of a $167,600 from last year when we did our revised. That's
simply because our workers' compensation payments were higher than expected and
that resulted in a deficit. So what we're trying to do for our budget going
forward is to accommodate those premiums and, hopefully, we will be able to
budget within.
In
Transportation and Works, we pay about 75 per cent of the total workers'
compensation payments for government, due to the size of the workforce that we
have. So sometimes trying to accurately budget for those, it's somewhat of a
challenge.
This
year under the zero-based budgeting when we looked at the cost that we've
incurred, then we've appropriately or we feel we've appropriately budgeted for
that workers' compensation piece going forward.
MR. PETTEN:
So I guess to be clear, and
this will help through probably the rest of the sections, severance is included
in salary lines in all areas. With the elimination or those OHS positions are no
longer in the department, why would the salary figure be less if severance is
included in that salary line? You would anticipate it would be more, wouldn't
you?
MR. HAWKINS:
In this section here, my
understanding is that there is no severance paid out for this particular area
there. Am I correct on that?
OFFICIAL:
That's correct.
MR. HAWKINS:
There will be no severance
paid out.
MR. PETTEN:
Okay.
I don't
want to belabour this one much longer, but I want to be totally clear. The
severance from these OHS positions that were removed where would that have been
paid out from? Obviously, they were entitled to severance.
MR. HAWKINS:
There would be no severance
paid out. My understanding is they were not necessarily laid off; they were
absorbed within government, right?
OFFICIAL:
They went back to their permanent jobs.
MR. HAWKINS:
They went back to their
permanent jobs. So it's not like we would be paying out a severance for these.
MR. PETTEN:
They were on temporary
assignments, basically.
MR. HAWKINS:
Yes.
MR. PETTEN:
Okay.
Transportation and Communications in this area – and I realize the safety, OHS
is training and whatnot. In the past, I know that's what they did. But with less
physical bodies doing it now – I mean this figure is still $20,000 more than
what the revised amount was.
MR. HAWKINS:
Yes. We realized within
2016-2017, if you notice, we did incur a surplus. Projected expenditures were
slightly lower than in previous years. Of course, what we did, we eliminated –
there was a floater cellphone and the elimination of some of the landlines that
we had, due to reduced staffing.
So what
we've done is reallocated. If you look, and the answer to the question going
forward in 2017-2018, which is slightly up, is that we're doing a reallocation
increase within a department's existing operational budget of $8,800 in
Transportation and Communications funding for 2017-2018, which relates to the
implantation of new corporate safety initiatives that will require OH
consultants to conduct visits in Eastern, Western, and Labrador, fire
inspections, fire inspector, fire protection officer, travel for management.
So again
this is just another example of where we used our zero-based budgeting, and
realizing the pressures that we would have within trying to realign some of the
way in which we're doing the work. So then from the zero base we built that
budget. We feel that with the amount of work and the OHS work that's needed, the
increase will reflect adequately to get all that work done, particularly in the
Eastern, Western, and Labrador regions when we incur more costs.
MR. PETTEN:
Under Purchased Services,
what's included in this? Again, that figure has increased by some $34,000 this
year.
MR. HAWKINS:
Yes. Under the Purchased
Services we have funding – a lot of it is document storage, shredding, printing
costs at the Queen's Printer and photocopying costs. I think we have 13
photocopiers; included also in that are the ergonomic assessments that we do for
employees that request that.
And
included in that as well are our public relations. This is where you'll find the
Snow Means Slow and our campaign that we run during the winter, so that cost
would come out of that Purchased Services, in that area. That's an ongoing
program that we feel is very, very important for us because, as you know,
getting the message out when in fact winter conditions warrant us driving
according to conditions. So that's an area that we've invested a fair amount of
money to get that program out there.
MR. PETTEN:
Okay.
The
revenue piece there, where would the revenue be generated under?
MR. HAWKINS:
I'm not so sure. I hope I can
explain this one. Revenue in these areas – we have delivery invoicing for salt
and all that sort of thing, and sometimes there are penalties that are incurred
when there's late salt delivery. These include payments, it could be from Crown
corporations, forfeited security bids that we have – Tracy is there anything
else that would fit into that revenue?
OFFICIAL:
(Inaudible.)
MR. HAWKINS:
The payments from Crown
corporations related to reimbursement of travel and, of course, some salary
costs incurred in the infrastructure projects, so we have a bit of flexibility
there on that revenue.
MR. PETTEN:
Because there's a substantial
difference of $300,000 from the revised amount in 2016.
MR. HAWKINS:
Yes, actually there was a
surplus there, and it's an increase because any time there's a differential in
revenue that means a positive move. So we had, last year in 2016-2017, come in
at higher-than-anticipated revenues. Again, that was related to some of the – we
had a fair number of late salt delivery penalties and there were some forwarded
security bids.
MR. PETTEN:
Under 1.2.03, the next
section, Strategic and Support Services, the salary figures. There seems to be a
lot of fluctuation from your budgeted, to revised, to 2017 Estimates.
MR. HAWKINS:
Yeah. That has to do with the
reorganization within Corporate Services. Information management positions have
been moved from the financial services division to Strategic and Support
Services and so we've had to pick up those costs.
Funding
has also been reallocated as part of the salary planning process in 2017-2018 to
fund an additional ATIPP position. We've had an additional position that was
created to respond to departmental correspondence on a timely basis.
As you
know as a former EA in this department, we do get an exorbitant amount of
correspondence that comes in. Certainly, we try to address this correspondence
in a timely manner. So we felt it was important for us to have a position that
would respond to that as quickly as possible. That's where you'll find an
increase there. Again, we included that into that particular salary structure
and built it from our zero base as well.
As
you've questioned me at the beginning when we talked about the positions
changing – and I said as we go through the Estimates – throughout we'll get the
reorganization piece. This is another example where we've had some reductions.
We
changed the director of Policy position within that. Then, within the new
management structure that we created, instead of the director of Policy position
we have director of strategic and support services, we just categorized and
changed the name. Then we have a manager of Corporate Safety and we have a
manager of information management. Of course changing that organizational
structure from what we previously had to what we have now, gave us a net
increase of roughly about $187,000 into that particular category.
MR. PETTEN:
Okay.
I see
Grants and Subsidies there, a straight line across the board. What would Grants
and Subsidies be?
MR. HAWKINS:
Okay.
In the
Grants and Subsidies there, Mr. Petten, that would include our TAC membership
fee for 2016-2017. It would also include membership in the rural road
association.
This is
a good one, I'm sure we'll all get a chuckle out of this but it's important:
Best Practices for Pothole Repairs in Canada. We are engaged in a research
project with the Transportation Association of Canada to look at ways and best
practices for pothole repairs. That would be included in that. We would give
that as a grant to TAC.
MR. PETTEN:
Thank you.
You
might want to look for a refund on that.
MR. HAWKINS:
If we don't get better
results, right.
MR. PETTEN:
I'll move on now to 1.2.04,
Mail Services. I just have a couple there I want to get into in this section;
again, the salary line.
MR. HAWKINS:
Okay.
Again,
within the Mail Services division we also did some reorganization in the
management structure. There's a reduction of the manager of Mail Services. This
now has been incorporated into and managed by Tendering and Contracts.
You
would see by eliminating that position there are unfunded severance payments.
Included in that $26,700 you see a variance from 2016-2017. That variance is due
to the severance payout that we had. So now by incorporating the manager of Mail
Services into the manager of Tendering and Contracts under our new structure,
we're looking at a savings, in salary, of about $68,000.
MR. PETTEN:
It's a position taken out of
Mail Services and put over in Tendering, is that why the decrease in Salaries?
MR. HAWKINS:
Well, we have removed the
position of manager of Mail Services. The manager of Tendering and Contracts
will now do that work. Am I correct on that?
MR. PETTEN:
So there was a position
removed from the mailroom.
MR. HAWKINS:
Correct.
That
would be one of the positions that we eliminated. Yeah, it was eliminated.
MR. PETTEN:
Okay.
Down
under 1.2.05, Property, Furnishings and Equipment, it looks like just $10,000
was budgeted last year. There was nothing –
MR. HAWKINS:
No, that's associated
purchasing of tangible capital assets. Actually, when we went through the
zero-based budget, because there wasn't a whole lot of activity into that
particular line and that particular support, we were actually going to – and
made a recommendation that we would have that eliminated.
However,
on advice from Finance we're keeping $100 in there to keep the account open in
case. It gives us some flexibility throughout the year. So that would have, in
all intents and purposes, not shown up here other than the fact that we want to
keep the account open. That's a standard figure that we put in there. That's
where that $100 is coming from.
MR. PETTEN:
The next section, 2.1 –
MR. HAWKINS:
We've now finished –
MR. PETTEN:
Section one.
MR. HAWKINS:
How do we do that? Do we want
to vote on the one?
CHAIR:
No, we'll vote at the end.
MR. HAWKINS:
At the end of all of it?
CHAIR:
Yeah.
No,
we're going to vote on the whole package after we've gone through all three
sections.
MR. HAWKINS:
Okay.
CHAIR:
Yes.
So carry
on.
MR. PETTEN:
Carry on.
Thank
you.
Under
Road Maintenance, 2.1.01, again I'll go to Salaries on that one as well.
MR. HAWKINS:
Yeah and you'll find in that
one too – because that would certainly have incurred some of our restructuring
and there will be some severance payouts involved in that – the $468,600 is a
decrease due to salary plan adjustments completed through our zero-based
budgeting process due to the changes in the funding levels in the departmental
salary budget allocation. We will find a funding reduction of $84,000 related to
two clerical employees, and there was a 3 per cent vacancy factor. Also, there
was a reallocation of a clerk typist III position from this activity within this
budget line to financial operations.
I guess
further to that, the department has recently developed an overtime management
policy that we're trying to implement to design and ensure that overtime is only
worked when absolutely required for emergency situations and there may be
occupational health and safety issues that come up. So we're trying to get a
handle on that.
In this
particular area as well, in the salary, it was impacted by changes in management
structure. Again, as I said, we will find throughout some of these changes – so
I just wanted to make sure you are aware of these changes. We had a reduction in
this one of three district managers. We had a reduction of a regional
administrator's position for part of the year, a regional director for part of
the year, and what we've done is created a director of continuous improvement.
We've created a director of road operations. We're creating a director of roads
Trans-Labrador Highway. So we're going to find a net, in fact, decrease of
$158,300.
Within
this, there are not some true vacancies in there. There's about $300K that we're
working through on the zero-based budget.
MR. PETTEN:
So in this line, from your
revised amount, we're down to almost $800,000. So you're saying that there's a
regional administrator, regional director, a couple of your district managers –
MR. HAWKINS:
Yes –
MR. PETTEN:
How many positions in total,
I guess, and where would they be from?
MR. HAWKINS:
Okay.
Well,
the three district managers and the reduction of a regional administrator, a
regional director, and we've replaced them – Tracy, what's the net on that?
MS. KING:
So the net decrease is $158,300.
MR. HAWKINS:
$158,300 on the realignment
of those positions.
MS. KING:
And then the vacancy factors (inaudible).
MR. HAWKINS:
Yes. So we did not fill any
vacancies.
MR. PETTEN:
But it is $794,000, so that
obviously, under Salaries, would be positions. How many positions are included
in that?
MR. HAWKINS:
Well, there would have been
so many vacant positions that we're now taking out under the zero-based
budgeting, right?
MS. KING:
Right, and we're also (inaudible).
MR. HAWKINS:
Right, yes.
MS. KING:
So as part of this, the department is carrying a 3 per cent vacancy factor in
anticipation of what we know is regular employee turnover. We're budgeting that
we're going to have that vacancy factor of 3 per cent here in this line this
year.
That,
coupled with the changes made in the change in the management structure, as well
as the clerical positions that are moving to other areas of the department,
brings you to the $468,000 decrease in the budget for this year.
MR. PETTEN:
So where are those district
managers – what areas were they responsible for?
MS. KING:
I'm going to defer to Joe on the locations.
MR. DUNFORD:
The district managers we have are directors. Our current director structure is
we have one for the Avalon, Eastern, Central, Western and Labrador, and we have
one for a director of design as well. So we're going to a director of roads, a
director of operations, director of equipment and a director of continuous
improvement, as well as one for Labrador. Some of these show up here, yes.
MR. PETTEN:
There'd be two director
positions as a result of those changes – two less director positions?
MR. DUNFORD:
Yes, that's correct.
MR. PETTEN:
So you say regional
administrator that was for the Avalon Region? Is there any way we could get a
list of the new structure and to show –
MR. HAWKINS:
Not a problem.
MR. PETTEN:
Make it clearer.
MR. HAWKINS:
Yes, absolutely.
When
you're trying to get it off of this thing, unless you have your flowchart thing,
it is difficult to really visualize how the whole structure is working. It is a
challenge for all of us, just reading off of that. But when you see the chart,
it becomes a little clearer and we can do that.
MR. PETTEN:
Yes (inaudible).
MR. HAWKINS:
Not a problem.
MR. PETTEN:
Under your Transportation and
Communications, I notice from your budgeted 2016-2017 to this year there's a
$216,000 increase.
MR. HAWKINS:
Yes.
MR. PETTEN:
What would be the –?
MR. HAWKINS:
Okay. The increase is due to
– and I'm not a technical person, so I'll refer that to my expertise in this
area. We do have a number of turbo hubs in areas where broadband service is not
readily available, and we cover both the highway depots and ferry vessels.
There's
a funding reallocation from the Building Maintenance for some of these licensing
fees. So as part of the zero-based budget again, trying to build everything from
a zero base, we found that there was a structural deficit issue in this
particular line item. What we've done is we've reallocated some funding to
rightsize the budget to keep it in line. I don't know if you'd need an
explanation on that turbo hub, but that's basically what the increase is.
MR. PETTEN:
Okay.
I know
Grants and Subsidies are pretty prevalent throughout, but what would grants be
under the Road Maintenance? What would be included in that?
MR. HAWKINS:
Okay. If you look – just a second on that one there, the Grants. We have a
number of small communities, François, examples, Grey River, McCallum, Southeast
Bight, where we give small grants to these communities to do some road
maintenance throughout the summer. So it's pretty much one-offs. These are
pretty much communities that – and including of course, as well, Williams
Harbour, and we do give small grants. We take it out of that $40,000. It's
nothing very big of a grant, but at least it's something they can do some work
in during the summer.
MR. PETTEN:
Okay.
We'll go
to Road Maintenance now, 2.1.03.
MR. HAWKINS:
2.1 –
MR. PETTEN:
Next section, yes, under
Operations.
MR. HAWKINS:
Okay, so we're skipping the
Sign Shop?
MR. PETTEN:
The Sign Shop's pretty
straightforward there, yes. It seems pretty –
MR. HAWKINS:
Yes, okay. So 2.1.03?
MR. PETTEN:
Yes, Maintenance and Repairs,
Salaries again.
MR. HAWKINS:
Okay.
First of
all, in 2016-2017 we realized a surplus of slightly over $400,000. Of course,
that was in summer road maintenance. That was due to a delayed recruitment of
some vacant positions that we had. We incurred a surplus in that area.
For
2017-2018, again, the salary will reflect some of the management – the planned
attrition. We are looking at reductions of six operator positions for part of
the year. When we look at that within the department, there is going to be a net
reduction close to about $200,000 with regard to that, changes in structure
there, salary.
MR. PETTEN:
The six operators; are they –
MR. HAWKINS:
Did I say operators? Operator
supervisors, I'm sorry.
MR. PETTEN:
Operator Supervisors? Is that
what we used to refer to as MEPS?
MR. HAWKINS:
Not the MEPS, it's the OPS.
MR. PETTEN:
The OPS, yeah.
Under
Supplies, I guess a question. It's not a whole – well, it's a half a million
dollar variance. That's enough, I suppose. Why is that increased this year?
MR. HAWKINS:
In the Supplies?
MR. PETTEN:
Yes.
MR. HAWKINS:
That's an area that we built
that one. We had some reallocation of funds and we tried to build that from a
zero-based budget again. In order to reflect what we felt would be inadequate
budget for that line item we put the increase in there.
You will
find that throughout sometimes when we look at the zero-based. When we look at
zero-based we would hope that for the majority of line items you'd see a
decrease. But there is some that if you were having a true zero-based budgeting
practice and exercise, you have to make adjustments to what we expect.
We found
in 2016-2017 that we did find a slight surplus. That was mostly attributed to
last summer of not some of the various types of construction supplies such as
the asphalt, pipe, gravel, paint. We didn't incur the same level of costing, but
felt this year when we did our zero-based budgeting that we would certainly look
at adjusting to make sure we did have an adequate amount of money into that
budget to do that work during the summer.
MR. PETTEN:
Under Purchased Services
there's a decrease this year.
MR. HAWKINS:
Yes.
MR. PETTEN:
What would that be attributed
to? I know it was an increase from last year with the revised.
MR. HAWKINS:
There was, if I can read this
correctly – Purchased Services, we had an increase in cost. We went from $4.8
million to $5.3 million. That was increased requirements for machinery and for
rentals to supplement our own equipment.
Of
course, sometimes we're in these situations that we have to look for rentals.
This is an area that certainly incurred costs there. I'm just flipping back for
a moment on that because I'm trying to remember something that when I looked at
this item I had a question on it myself.
That was
the piece that I was trying to remember exactly if that would fall into that.
That would be the Thanksgiving rainstorm the Thanksgiving weekend and what we
did with the communities that were cut off. We just did not have adequate
equipment to make sure these communities were back with all the breaches that we
had.
We made
a very, very quick decision. We thought it was important to have these
communities connected as quickly as possible. We used every available piece of
equipment that we had and we rented other equipment to make sure that work was
done. That's why you'll see that differential there.
Hopefully, once all the invoices have been done for that Thanksgiving weekend,
we hopefully will be able to get some of the federal funding under the financial
aid.
MR. PETTEN:
Okay.
The
revenue line in Road Maintenance: where does that come from?
MR. HAWKINS:
Okay, that's a good question.
Within
that revenue line you'll find that these will come from the access fees.
Sometimes if we incur costs and replacement costs of guide rails in line with
previous fiscal year, some of the revenue we would get from that as well, if
there are accidents on the highway and guide rails have to be replaced, we would
get revenue from there.
But,
certainly, highway access fees; I know, Mr. Petten, you've brought them up. That
would be included in one of the fee increases that occurred in the budget.
That's reflected in that revenue item.
MR. PETTEN:
I don't think you've
collected a lot on highway access yet though.
MR. HAWKINS:
What's that?
MR. PETTEN:
I don't think that figure is
influenced much by the fees you've collected for highway access.
MR. HAWKINS:
Not really, but that's where
we're capturing it. We'll see how that goes.
MR. PETTEN:
The next section, 2.1.04, my
favourite subject: Snow and Ice Control.
MR. HAWKINS:
Yes.
MR. PETTEN:
That one, Salaries seems to,
for the better part across the board, have limited fluctuation. There's been
some. What changes have occurred there? There is a decrease.
MR. HAWKINS:
In Salaries there's an
increase.
MR. PETTEN:
Yeah, it's not big, but there
is a decrease.
MR. HAWKINS:
Yes, there is an increase; it
costs us more.
The
$174,000 is mainly attributed to unfunded severance costs that we had. You would
find that as a cost, a salary cost associated with winter maintenance, the
winter road maintenance program. They fluctuate based on the severity of the
winter. Of course, this winter we probably had quadruple the amount of snow than
in previous years, so it's been sort of a pressure area for us.
Having
said that, I must say that we have done an extremely, extremely great job in
keeping our cost within budget as much as possible.
MR. PETTEN:
Transportation and
Communications; I know last year it was budgeted at $156,000, it almost doubled
in the revised, and now this year it's still $106,000 more than the original
budget for last year. What's the –?
MR. HAWKINS:
Okay. In the projected there we had, there was $131,400 that was over the –
again, it's one of those areas that if, in fact, you do have worst weather
conditions or whatever, it's covering off the travel requirements for staff that
are involved in the winter maintenance activities.
Any time
you do incur conditions that are more severe in one year compared to another
year, you're going to run into these areas. What we've done in projecting out to
2017-2018, we've certainly realized the structural deficit we incurred last
year. Again, going back to a zero-based budget and trying to reflect what the
true costs are going to be, it was necessary for us to make an adjustment to
address that structural deficit we were finding in that particular line items.
So we're just addressing the shortfall we've had in that area.
MR. PETTEN:
Okay. Just a follow-up on the
Salaries there – it slipped my mind. You say it was severance, so were those
positions eliminated or were they as a result of retirements?
MR. HAWKINS:
To the salary deficit piece
there? Of course we incurred more in Salaries than we had. So there is a deficit
that's attributed to some unfunded severance costs, and that is because of some
of the reallocation of salary resources.
So I
don't know – Tracy, can we see if we can get a true explanation on that?
MS. KING:
This is just unfunded severance as employees leave, turnover, retire. There's no
change to the management structure or anything in here. It's just severance as
people leave.
MR. PETTEN:
Were those positions – were
they retirements or were they elimination of positions?
MS. KING:
There are no eliminations here. So it would just be the regular retirements or
people leaving for any other reason.
MR. PETTEN:
Okay.
Under
Supplies, a two-part question, what's included and why the increase?
From your revised, I'm going by.
MR. HAWKINS:
Yes. The projected revised
variance in Supplies, we had a surplus of $529,000. That's pretty much – and I
will be anxious to see what the reflection is going to be after this winter.
What happened in 2016-17, we had a fairly significant salt inventory that we
had, so we didn't have to incur costs on that. Certainly, the surplus of salt
and the conditions in 2015-2016 during the winter were not as severe. So that
reflected in a $529,000 surplus.
Going
forward in 2017-2018, we've done a reallocation of funds to rightsize that
budget. So we made some adjustments there. That's the variance from 2016-2017.
MR. PETTEN:
Okay.
Under
Purchased Services, it went from $8.7 million to $10.3 million and now to $9.7
million. Why the fluctuation?
MR. HAWKINS:
Again, as I mentioned with
some of the rentals before, the $1.5 million over budget and the revised, that's
attributed to the Thanksgiving storm we had. It's very difficult to budget for
these items, and when they happen we have to react. In reacting to that you
incur extra costs because you don't have the resources to adequately deal with
these emergency situations. So that would certainly be reflected in that revised
Purchased Services there.
MR. PETTEN:
Okay.
Revenue
is $800,000 more this year.
MR. HAWKINS:
Yes.
MR. PETTEN:
What is included in that?
MR. HAWKINS:
Okay. Again, that's reflected
in change in last year's budget when we – historically, we were providing snow
clearing in communities for roughly around $5,000 a kilometre, and last year
there were 72 communities that were impacted by that. We really want to try to
get out of providing that type of service as much as possible. So we encouraged
communities to do their own tendering and looking more at from a regional
approach, looking at opportunities where they could contract.
There
were a number of communities that came in and the contracts were not realistic.
The tenders came back not realistic. So we continued to provide services to
these communities that could not find adequate snow clearing. We increased the
rate – as you know, Mr. Petten – in last year's budget from $5,000 to $6,600 per
kilometre, plus HST. So that's where you'd find that showing up in revenue from
municipalities with snow clearing.
MR. PETTEN:
Okay.
Your
total lines, the total Snow and Ice Control this year is $53.5 million. The
revised amount for last year was $53.75 million. So with the elimination of the
24-hour snow clearing model, the pilot project where you're going to refer to
it, you stated it would be $1.9 million savings.
MR. HAWKINS:
Yes.
MR. PETTEN:
So this doesn't reflect it
here. I'm looking at $200,000 savings.
MR. HAWKINS:
Yes. I just wanted to take a
minute to talk about our nighttime snow clearing. As you know, you and I have
had this debate back and forth. I'm not so sure the right terminology was used
when we say eliminate, because actually what we were doing, we were eliminating
the model that your previous administration had in and we changed it to the
model that we had in providing services. So to the end of March, March 31, we've
incurred costs for that nighttime snow clearing at $770,000.
OFFICIAL:
Seven hundred and seventy-eight.
MR. HAWKINS:
So $778,000. Last year, if
the line items were to reflect all of that, under the previous 24-hour snow
clearing that your administration had, we would incurred a cost of $1.9 million.
Under the model we had this year, we incurred a cost of $778,000. With the
amount of snow that we had this year compared to previous years, we were out
quite often. As a matter of fact, I might even have some – if I can break it
down, and I can certainly provide you with that information as well.
From a
department perspective, looking at the 2015-2016 cost just using the HMEO
labour, for example, would have been $294,000, and we incurred a cost of
$84,000. Materials, even though we had more snow and we were out a significant
amount of time, we went from $740,000 to $385,000. So the end result was we
provided that service and it came in at $778,000.
Again,
we can all sit back and analyze what exactly the 24-hour snow clearing services
provided. When we did our analysis last year and went through the numbers and
using the trigger targets that we had – as you know we put in trigger targets –
in the previous year prior to our model of nighttime snow clearing using the
triggers that we had, they would have been required to be out 11 per cent of the
time. In other words, 89 per cent would not have been required to be out. So
that's a fairly significant analysis that we use.
This
year, I don't have the percentages when we were out. But we were out quite often
when the triggers warranted it, and that's the service we provided. So when we
look at the entire –as we work through the budget piece in different sections,
it cost us $778,000.
MR. PETTEN:
So you're saying as opposed
to $1.9 million?
MR. HAWKINS:
Correct.
MR. PETTEN:
You can provide some
breakdown of that to me?
MR. HAWKINS:
Yes.
MR. PETTEN:
Mr. Chair, if we could have a
five-minute break for the washroom.
CHAIR:
Okay.
We'll
carry on with section 2.2.01 when we come back, and we'll take a short break.
Recess
CHAIR:
Okay, we're going to
reconvene.
I'd like
to welcome the Member for Mount Pearl – Southlands.
With
that, we'll carry on. I think it is section 2.2.01.
MR. HAWKINS:
Mr. Chair, before we do, the
Member opposite asked a question earlier with regard to 13-week employees that
we had. We do have that information.
Just for
the record, we have 49 13-week positions. That's 49 out of our 1,665. I just
wanted to get that to the record.
MR. PETTEN:
Thank you very much.
There's
a lot we have to get through.
MR. HAWKINS:
A lot yet.
MR. PETTEN:
I have some other stuff, so I
guess I'll try to fast track some of this stuff but not miss my main points.
MR. HAWKINS:
Yes.
MR. PETTEN:
Under 2.2.01, Salaries, the
short question is: What positions were eliminated?
MR. HAWKINS:
Restructuring and that under
the Building Maintenance; we had changes in management structure. Reductions:
the regional director part time, regional director of security, regional
director, building manager, area manager, district engineer, area manager and a
building manager. These are the positions that were collapsed.
From
that we did a director of building operations and a manager of security. So it's
going from a director of security to a manager of security which will be a lower
salary position. There was an effective net decrease of $437,000 that was
attributed to the changing in departmental priorities and management structure
that we undertook in that section.
MR. PETTEN:
Okay.
Under
Building Utilities and Maintenance, 2.2.02, what positions would have been
eliminated under the Salaries line there?
MR. HAWKINS:
In that we had a surplus in
our 2016-2017. That was due to vacancies and delayed recruitment of positions.
We have projected out into 2017-'18 – actually it's a reduction of $400,000, a
decrease of $261,000 in our budget process. That's to accommodate the zero-based
budgeting. We're looking at reducing some earnings by somewhere around $250,000,
in that area, and part of that is going to be to look at overtime structure.
What
we've done, we've done a zero-based budget based on what we feel adequately
addresses the salaries for the buildings, utilities and maintenance.
MR. PETTEN:
Under revenue in that
section, why such a spike on your revised amounts? From $1.3 million to $7.3
million and now it's back to $1.3 million. It's $6 million. Where does that $6
million coming from?
MR. HAWKINS:
Well, in that section it is
revenue that's from the rental of government buildings. We also divested of a
steam heat to Eastern Health, I think. We sold that to Eastern Health.
Included
in some of that would be parking meter revenue and some others, like within the
cafeterias and Confederation Building. The revenue also would include the
projected increase – $6 million, is the anticipated receipt of utility rebate
from government-owned buildings.
As you
know, last year we had the rebate from the Rate Stabilization Plan. So the
rebates were made effective and most residential received theirs during February
month or whatever. We're anticipating that there's going to roughly be about $6
million that we will be able to get from that utility rebate.
Also
including that is the sale of the Hoyles-Escasoni Complex that would contribute
to the revenue in that section.
MR. PETTEN:
Okay, 2.2.03.
MR. HAWKINS:
Yes.
MR. PETTEN:
A general question there now
and then I'll ask a couple of others. Under Purchased Services, I'm just trying
to figure out is that the leasing costs?
MR. HAWKINS:
Yes, and some of that
incurred, some of the cost. If you notice, when we did a variance in 2016-2017,
it cost us extra money. That deficit that we incurred is mainly renting heated
space in Gander for our water bombers. These are some of the rental costs that
would be incurred under this line item, would go for the hangar space in Gander.
MR. PETTEN:
Okay.
Is any
amount included in this for the new space for the Crown Lands offices going to
Corner Brook? Is that showing up here or is that going to be …?
MR. HAWKINS:
Not to my knowledge, not in
this.
MR. PETTEN:
That will be in addition.
MR. HAWKINS:
Not in this item.
MR. PETTEN:
That will be additional, go
forward?
MR. GRANDY:
Just for clarity, Mr. Petten, the money that's in our line item for rentals
would only be for TW space. Anything for the Crown Lands office would be in that
department. All departments budget for their own leased space in their own
departments.
MR. PETTEN:
Okay, so this figure here is
just for Transportation and Works space only.
Under
the next section, 2.2.04, I just have a quick question there. The dollar figures
haven't really changed. What's been done? Is there any new construction planned?
MR. HAWKINS:
Yes.
Actually, as you know – and you would be aware of this – there were a number of
areas identified in previous years with storage of our salt and some of our salt
storage sheds, so we've been putting in trying to catch up as much as we can.
In
2014-2015, there was actually about $2.4 million that was allocated. We did
structures in Hampden, Tors Cove and Goobies. In 2015-2016, we spent $1.4
million in Avondale and Stephenville. In 2016-2017, we again had allocated $1.4
million and we did work in Boat Harbour and New World Island. So in our budget
for 2017-2018, again, we've put $1.4 million and we will be addressing two other
areas in the province on that.
MR. PETTEN:
Before I move away from this
Building Maintenance, Operations and Accommodations, I know you're trying to
decrease your blueprint for leased space. Like I say, this figure here that
we're going to have, it will be reflected through all the other relevant
departments that have leased space.
MR. HAWKINS:
Correct.
MR. PETTEN:
Those reductions will be seen
across their line items.
MR. HAWKINS:
They should be.
MR. PETTEN:
Okay. I hope so.
MR. HAWKINS:
I hope so. If not, they're
not doing their zero-based budgeting.
MR. PETTEN:
Okay.
The next
section, 2.3.01, Equipment Maintenance – I just want to go back to one other
question on Building Maintenance, Operations and Accommodations in 2.2.03. Acid
sales, where would they be reflected to?
MR. HAWKINS:
Sorry, 2.2.03.
MR. PETTEN:
The last section we just had.
MR. HAWKINS:
Are we getting the same
number, 2.2.03?
MR. PETTEN:
2.2.03, the last section
under Building Maintenance, Operations and Accommodations.
OFFICIAL:
So it's in 3.3.01 because he's asking where the sales are.
MR. HAWKINS:
All right. We will have
3.3.01, that's where you'll find that.
MR. PETTEN:
Sorry, okay.
Under
Equipment Maintenance –
MR. HAWKINS:
Okay, 2.3.02.
MR. PETTEN:
2.3.01.
MR. HAWKINS:
All right, 01.
MR. PETTEN:
One quick question on that is
I noticed that your Purchased Services has doubled.
MR. HAWKINS:
Yes.
MR. PETTEN:
Nearly doubled from the
budgeted amount from last year.
MR. HAWKINS:
Yes.
Okay. We
had projected in 2016-2017 for $681,000, and we went to $1.1 million. That
deficit was due to an overall increase in auto insurance premiums for
government. The department absorbed the funding from other areas of the
department. So that's where that is reflected.
What
we've done, again in looking at the zero-based budgeting and trying to reflect
an accurate amount going forward, we've reallocated all of that within this
particular account from other areas of the department. Now we're reflecting that
auto insurance premiums from government into this particular line item. So
you'll see that variance there.
MR. PETTEN:
Under Maintenance of
Equipment, Salaries –
MR. HAWKINS:
2.3.02 now are we?
MR. PETTEN:
Sorry. Yes, 2.3.02.
MR. HAWKINS:
Okay.
MR. PETTEN:
Under Salaries, what
positions were eliminated here?
MR. HAWKINS:
Okay. None, as far as I know.
If you looked at, we did have a funding surplus due to a vacancy factor in this
particular area. This is a pressure area for us. Again, I think I've probably
mentioned it a couple of times in interviews I did during the winter.
This has
to do with heavy equipment technicians and welders, particularly on the Avalon
Peninsula. We find there's greater competition for these positions, and it is a
challenge for us in trying to make sure that we do have an adequate number of
heavy equipment technicians and welders in place. As I said, it is more from a
competition, competitive environment that we find on the Avalon Peninsula versus
the other areas of the province.
We do
have in this area some challenges in adequately making sure we have these
positions filled. So from time to time we will have vacancies in this area. That
would be I think the best answer I can give to that question. Having said that,
we do have these positions filled not to full capacity, but it doesn't cause us
any real hardship. Again, it doesn't seem like we're ever to full capacity, and
sometimes we go through the training process and hire and then suddenly again
from that competitive nature we find they move on to other positions.
MR. PETTEN:
Okay.
Under
Equipment Acquisitions, 2.3.03 –
MR. HAWKINS:
Yes.
MR. PETTEN:
Was there not a purchase in
the last fiscal year of asphalt (inaudible)?
MR. HAWKINS:
The recyclers?
MR. PETTEN:
Recyclers, yes.
MR. HAWKINS:
To my knowledge, that would
have been done before last year – recyclers.
MR. DUNFORD:
To my understanding, that would have been the year before the previous fiscal,
yes.
MR. PETTEN:
So we have them in our
possession?
MR. DUNFORD:
Yes.
MR. PETTEN:
Okay.
MR. HAWKINS:
I think last year we did have
equipment acquisitions. I think, if I remember correctly, we had five new
snowplows, and then we had roughly about $249,000 that would have been included
in light vehicles that we had. So that's the acquisitions we made in the last
fiscal year.
MR. PETTEN:
Okay.
I'm
going to go to 3.1.02.
MR. HAWKINS:
3.1.02.
MR. PETTEN:
Under Purchased Services,
there's $600,000 less this year from budgeted but budget revised turned out to
be almost $1 million less, and now it's back up to $400,000 and change, I guess
$500,000 and change. What's the –
MR. HAWKINS:
Again, within that particular
line item, we are picking up the cost of insurance premiums, and the premiums
range between $1.5 million and $1.8 million. There are, additionally, a number
of – dollar value of deductible claims that is demand driven, depending on the
number of incidents that occur. What we've done, we've moved, within the
departments, total allocation for insurance costs through our zero-based
budgeting and properly trying to identify what line items should pick this up.
We have now put that into the Purchased Services line item for the
infrastructure piece.
MR. PETTEN:
Okay.
Now I
want to go to 3.2.03, Improvements – Provincial Roads, that's page 7.12 in my
book.
MR. HAWKINS:
Okay, .03. All right.
MR. PETTEN:
Under Salaries, we have a
fairly substantial increase.
MR. HAWKINS:
Okay. Again, as you know,
we're doing a fair amount of roadwork, provincial roads program in 2017-2018.
It's based on the projected amount of work that we're hopefully getting done.
We're going to anticipate salary cost that would be associated with the
provincial roads in 2017-2018. We're very optimistic that we're actually going
to see a significant amount of work that will be done this summer.
MR. PETTEN:
So in this section that's our
roads program, our $70-some-odd million.
MR. HAWKINS:
No. Included in this would be
our provincial roads, right? Not the $77.2 million.
OFFICIAL:
(Inaudible.)
MR. HAWKINS:
Just for your reference –
they do a lot of good work here for me – the provincial roads capital $29.1
million is reflected in 3.2.09; the $25.1 million provincial roads current is
found in 3.2.03; the new Building Canada current – because we have current and
capital – $10.1 million is found in 3.2.06; and the new Building Canada capital,
the $12.9 million, is found in 3.2.12. So all of the $77.2 million will be
reflected in those sections.
MR. PETTEN:
Okay.
I'm
familiar with this one actually anyway. Transportation provides engineering
services to the provincial roads program, right?
MR. HAWKINS:
Yes.
MR. PETTEN:
It's in-house engineering
that's done on all our contracts, right?
MR. HAWKINS:
Yes.
MR. PETTEN:
Okay.
So under
Purchased Services, I see a $10 million increase. It's this extra asphalt?
MR. HAWKINS:
Well, actually, it includes a
$5.3 million carryover. I don't know how much time I have to talk on that
because that's heartburn for me. And it has always been heartburn, I am sure,
for everybody in every government that's been in is these carryovers from one
year to the next.
Last
year, I was facing an $18 million carryover and that was one of the first things
I put out there. I didn't want those carryovers, so we reduced it to $5.3
million. Hopefully, with our early tenders, getting our roadwork done and a
message to industry that carryovers going forward are something we're not going
to be very happy about. So included in that $9.7 million would be – if I'm
correct – roughly about a $5 million or $5.3 million carryover.
We want
to, in future years, eliminate carryovers. We want the work done in the year in
which hopefully it's going to be done. So that would be part of that $9.7
million.
MR. PETTEN:
Okay.
MR. HAWKINS:
We also include in that – I
think we usually do a carryover of $2 million in brush cutting, so we are
including that as well.
MR. PETTEN:
Minister, if I may – I'm
going to include a lot here now actually – 3.2.04 –
MR. HAWKINS:
3.2.04.
MR. PETTEN:
– which is all of our
infrastructure basically. I'm going to ask you a broad question now because the
way this is presented in the book is kind of hard to follow –
MR. HAWKINS:
Okay.
MR. PETTEN:
To 3.2.10, so all this
infrastructure, we got the Strategic Infrastructure Fund, the new Building
Canada Fund, the Canada/Newfoundland and Labrador Infrastructure Framework
Agreement.
I guess
the generalized question is it looks to be some of these are discontinued. We're
into a new funding arrangement. I'm sure this is federal infrastructure money
too. I guess the Coles Notes explanation would probably be more beneficial. The
Canada/Newfoundland and Labrador Infrastructure Framework, 3.2.05, is that
expired? Because it looks, from the numbers, it would be.
MR. HAWKINS:
Some of the old Building
Canada Funds, we did have some projects on that. So you're looking at 3.2.05?
MR. PETTEN:
Right.
MR. HAWKINS:
We were cluing up – as you
know, there were a number of dollars from the old Building Canada Fund. They
were a couple of projects left on the legacy fund. I know it can be rather
confusing because there are a lot of moving pieces within that.
MR. PETTEN:
Yes.
MR. HAWKINS:
If I remember correctly – and
the staff can certainly jump in and correct me if I'm wrong – the couple of
projects that you see there came out of the old legacy fund. It was funding that
we needed to get clued up and one of them was resurfacing the Trans-Canada
Highway between Lewisporte Junction and Bay d'Espoir Junction.
That was
work that was completed and I think there was close to $7 million, maybe $8
million that would have come out of that old legacy fund. It includes Gambo
River Bridge and Benton intersection as well. So some of these are concluding
and work will be concluded on that. So that would be old Building Canada Fund
and then now, of course, part of our projections going forward that we're
continually putting business cases in – last year, if memory serves me correct,
we had seven identified projects that will be moving forward, which includes
some on the West Coast and some in Central area.
Of
course, then in addition to all of that, the $55 million that was allocated for
the Trans-Labrador Highway which came out of our first business plan; and our
Phase II, Phase III business plans are already in Ottawa to look at continuing
work on Phase II and Phase III.
So when
we look at the new Building Canada Fund and we look at the old Building Canada
Fund, as one program finishes off and the new program comes in place, there's a
few moving parts there.
MR. PETTEN:
Okay.
3.2.09,
under Improvement and Construction – Provincial Roads, Salaries has been reduced
by $1.2 million.
MR. HAWKINS:
Yes. Again, that's part of
the zero base we projected in this area. With some of the work that's been done,
we've reflected that into the projection for salaries for next year. But it's
not a reduction in staff.
MR. PETTEN:
There are no staff
reductions?
MR. HAWKINS:
No.
MR. PETTEN:
Okay.
3.2.11,
the Trans-Labrador Highway.
MR. HAWKINS:
Yes.
MR. PETTEN:
I have one general question
there.
We're
looking at $55 million for this year. That's what's been announced publicly. The
$9 million that was left in the revised, we have some carry-over here, I guess,
do we?
MR. HAWKINS:
Yeah, because the first
business plan we put up for this section came back and we were given a budget of
$63 million which would have been cost shared between federal and provincial. We
put the tender out, the tender came in. We did two separate tenders on that one.
The tender came in a little over $50 million so I think we're looking at – with
engineering services put in there that's where the $55 million would come up.
We were
late getting work started last year, in the last fiscal year – the last calendar
year I should probably say. This is over the next couple of years, two or three
years. We'll find that work progressing and as that work progresses on that
section we also have four business plans up for Phase II and Phase III.
There's
going to be a significant amount of work that we expect we'll doing on the
Trans-Labrador Highway over the next several years. That's how that $55 million
is reflected.
MR. PETTEN:
Okay.
Under
3.2.13, Land Acquisition, there's $2 million budgeted for Property, Furnishings
and Equipment, there was $750,000 spent, I assume, and we're back to $2 million.
That $750,000, I'm assuming that would have been the land expropriation for
Coley's Point elementary, or would that come from Education?
MR. HAWKINS:
Not specifically, no. That's
not that. As you know, of course, we're working on appropriate compensation for
that land.
MR. PETTEN:
Okay.
MR. HAWKINS:
As you know, there is a
significant variance between what the owner is expecting and what we're
anticipating paying. That certainly is not reflected in that.
But,
again, if I may have the opportunity, we still have a number of outstanding
files that we have expropriation of property that probably goes back to the
1960s. We try to deal with them, but when you're working with a somewhat
restricted budget, that's a figure that we feel adequately will provide us with
some compensation when we expropriate pieces of land. There are varying rates
when it comes to expropriation.
MR. PETTEN:
That $750,000, do you have
any information as to what that was?
MR. HAWKINS:
I don't. I'm sorry, I don't.
We do
have a list and we can provide you with that list, if you so wish. A lot of it
would be highway properties that we've expropriated.
MR. PETTEN:
Okay.
Moving
on to Building Construction, 3.3.01.
MR. HAWKINS:
3.3.01?
MR. PETTEN:
3.3.01, yeah.
Under
Salaries they doubled in the revised Estimates and they stayed the same this
year. That would have been new employees?
MR. HAWKINS:
No, it's another exercise in
rightsizing the budget allocation not adequately reflected in previous years.
MR. PETTEN:
Okay.
MR. HAWKINS:
So what we've done with this
zero base, it gave us an opportunity to adequately reflect what that line item
should be. That's why we made the changes there.
MR. PETTEN:
Okay.
Your
Purchased Services increased by over $1 million. If I'm right, this would be for
the “appropriation provide for repairs and maintenance of buildings which are
owned and operated by Government Departments and Agencies as well as for
environmental remediation ….” It has actually gone up by $1.1 million in this
year's budget, but yet the blueprint has been reduced.
MR. HAWKINS:
You're reading Professional
Services?
MR. PETTEN:
Yeah, Purchased Services.
MR. HAWKINS:
Purchased Services, not
Professional Services, right?
MR. PETTEN:
Right.
MR. HAWKINS:
Okay.
In
Purchased Services, in fact we revised it in the surplus. We had
lower-than-anticipated contract costs due to some of the project delays that we
had. I think we were down $467,000 from the original budget to the revised
budget. So what we're doing, we're reflecting back that with the anticipated
contract costs for the fiscal year coming up. We've pretty much adjusted it back
and added that back into the Purchased Services. We expect to have more activity
in that department line item this year so we reflected that.
MR. PETTEN:
There's still an increase in
costs.
MR. HAWKINS:
Correct.
MR. PETTEN:
Even though with less rental
space.
MR. HAWKINS:
No.
OFFICIAL:
(Inaudible.)
MR. HAWKINS:
Yeah, that's not our rentals.
MR. PETTEN:
Pardon me?
MR. HAWKINS:
I'm going to refer to my
deputy minister.
MS. KING:
This is for our own space, for the government footprint, not for space that we
lease. This is maintenance of our own facilities.
MR. PETTEN:
Government buildings.
MS. KING:
Yeah.
MR. PETTEN:
Okay.
With
this government space, we have the Howley Building now. Is that going to be
converted to another purpose? What are the plans for the Howley Building?
MR. HAWKINS:
Well, to answer that
question, again, as I said, we're looking at all space availability that we
have. Any excess space that we have will be part of our plan looking at how we
can improve efficiencies and minimize costs.
That's
not a discussion that I've had yet, but we are continually looking at
opportunities whereby we can utilize our own buildings that we have. An example
of that is some of the changes we made last year, particularly with moving some
of our departments within our West Block. That's just one example of where we're
trying to utilize our availability of our own buildings. We will continue to do
that, and that's part of the efficiencies we're looking at within the structures
that we have.
So it
certainly will be a discussion that we will have. It won't be an empty space. We
will be looking at having that discussion.
MR. PETTEN:
Okay.
Under
3.4.01, Salaries, we have $500,000 less this year than what was budgeted last
year. So what positions would have been eliminated here?
MR. HAWKINS:
Okay. In that salary piece,
there's a decrease of close to half a million, at $444,000. That's due to two
positions that we're removing. Of course they were related to the full-day
kindergarten. So now that full-day kindergarten has been implemented, these
positions are no longer available or necessary.
MR. PETTEN:
Are they eliminated from
government or are they just …?
MR. HAWKINS:
Are they within? I could not
answer that question.
MR. GRANDY:
One of the positions was a temporary position when they were hired a couple of
years ago for the full-day kindergarten implementation. It was known that
project would end in March 2017. So there is one position there that is the
cessation of that temporary employee; another employee that was – it was two
engineering positions. The second one returned to their permanent position.
MR. PETTEN:
Okay.
Under
3.4.02, School Facilities – New Construction and Alterations to Existing
Facilities, those figures under Professional and Purchased Services – I guess
I'll ask them together – it's $7 million less this year than what was budgeted.
On the Purchased Services line, it's $40 million less than what was budgeted and
$37 million was the revised. What does this include? What do these figures mean?
MR. HAWKINS:
So you want to combine the
two –?
MR. PETTEN:
Well, I guess, it's under the
same – I'd say they go hand in hand.
MR. HAWKINS:
The $10 million surplus, it
was cash flow changes on major capital projects that reflect, I guess, the
actual progress on the current projects. We do have a number of schools that are
completed or near completion –
MR. PETTEN:
Yes.
MR. HAWKINS:
– and it certainly would
reflect that. Again, the variance in Purchased Services, the major capital
projects reflect the actual progress, so that would be reflected in those two
numbers.
I'm
assuming I've answered that correct. I'm going to refer to Cory to tell me
whether I'm right or whether I'm wrong.
MR. GRANDY:
(Inaudible.)
MR. HAWKINS:
He says I did okay. So I'm
assuming I'm right.
MR. PETTEN:
They don't like telling you
you're wrong.
Under
Resource Roads, in 3.5.01, you had $648,000 budgeted for Supplies, but this year
it's down to $97,000 – why?
MR. HAWKINS:
The Supplies, there was a
surplus in that section; requirements for funds that would have been
re-profiled. So again, that's another area we've taken from Supplies to
Purchased Services. There was an error in budgeting.
Charlene?
MS. MCCARTHY:
(Inaudible.)
MR. HAWKINS:
Okay, so we just made that
change to reflect it. There was an error in budgeting previously and we've now
made that adjustment to reflect the accurate recording on that line item.
MR. PETTEN:
Okay.
So it's
like $550,000, correct?
MR. HAWKINS:
Yes.
MR. PETTEN:
That is what it was off by?
MR. HAWKINS:
It was $547,000?
OFFICIAL:
(Inaudible.)
MR. HAWKINS:
It was $553,600.
MR. PETTEN:
Okay, no problem.
MR. HAWKINS:
(Inaudible) it is reflected
in those?
OFFICIAL:
Yes.
MR. HAWKINS:
If you look to line item,
Purchased Services – if you look at those combined, there's a little bit of
variation there. So we just did that correction on that.
MR. PETTEN:
Right; moved it to a
different pot.
MR. HAWKINS:
Yes.
MR. PETTEN:
Under Air and Marine, 4.1.01
– I'm going to flip back, Minister. I just missed something there on –
MR. HAWKINS:
Okay.
MR. PETTEN:
– the last page we were on
just then.
MR. HAWKINS:
Which one –?
MR. PETTEN:
We were just on 3.5.01.
MR. HAWKINS:
Yes, okay.
MR. PETTEN:
My question is on the bottom,
it says the Total: Infrastructure.
MR. HAWKINS:
Yes.
MR. PETTEN:
Okay. So does all the money
for all the projects in the multi-year infrastructure program come out of TW's
budget is my question?
MR. HAWKINS:
The answer to that question
is no. Some of it will come out of the health budget and some of it will come
out of our infrastructure budget so we won't be reflecting the – and obviously
education as well will be reflected in their budgets.
MR. PETTEN:
Right.
But a
lot of the engineering costs come out of TW's budget, correct, for those
projects? All engineering costs would come –
MR. GRANDY:
The engineering positions are in TW, but they are charged to the appropriate
capital project. So if our staff are working on a health project, their staff is
charged off to that capital project and that would be in the Department of
Health. Similarly for AES on some of the post-secondary projects that we're
doing, and the Department of Justice as well.
The
Department of Education, because of the merger of engineering services, that
group, with TW, the education budget you're seeing that here in this book – one
of the line items you just referred to earlier. But for right now education,
schools are in TW, but health projects are still in Health, justice projects are
still in Justice.
MR. PETTEN:
Okay.
Section
4.1.01, I don't have a lot of questions here. There are a couple though. These
Grants and Subsidies, this $400,000 figure, where do they come from?
MR. HAWKINS:
Or where do they go?
MR. PETTEN:
What are they, yes?
MR. HAWKINS:
That's a provision of air
services. As you know, we often have ice conditions and we often have weather
conditions, and there may be circumstances that we need emergency passenger
airlifts and that sort of thing, so that cost would be picked up there.
So while
I'm not a fan of flat lining in budgeting, it certainly is using our best
information we have. We continue to put that $400,000 in there; however,
realizing that sometimes historically – and I don't like to use historically
when it comes to zero-based budgeting, but in some situations to be able to get
a good, accurate idea, historically those expenditures have ranged from as low
as $275,000 in a year to as high as $1.2 million. So they vary, depending on
what circumstances we're facing in subsidizing air services in emergency
situations.
MR. PETTEN:
So that full $400,000 was
spent last year?
MR. HAWKINS:
I would assume, because what
we're doing – as you know, that's a projected revised budget. So based on the
information we have so far, it looks like we will be close to $400,000.
MR. PETTEN:
That will be spent.
OFFICIAL:
Yes.
MR. PETTEN:
I think that's it for that
section.
I'll
move on to 4.1.04. Property, Furnishings and Equipment under 4.1.04, there was
nothing budgeted, then there was $853,000 spent, this year now there's $795,000
budgeted.
MR. HAWKINS:
That's part of the helicopter
agreement which, of course, we get federal matching funding. The revenue from
the federal government is relative to the cost sharing on these particular
projects.
MR. PETTEN:
Okay.
MR. HAWKINS:
So in 2016-2017, we
transferred some of the funds from Current to Capital. When we look at Current
budget versus a Capital budget, a lot of times we were providing what we felt
were capital. We were carrying Capital within Current, and it really didn't make
a whole lot of sense. So we were able to work within Finance and were able to
identify some of the expenditures we had in Current that can actually go to
Capital. This is one example that we transferred the funds between Airstrips,
Current and we went and put it to Airstrips, Capital. So you'll see that there.
For
example, in those three situations we had, we replaced a loader and a snow
blower in Mary's Harbour, we replaced a loader and snow clearing attachments in
Nain and we replaced a loader and snow blower in Makkovik which of course these
loaders, to me, that's capital anyway. So that's where you'll see that
reflection. So we move from a current cost out of the current budget to a
capital budget.
MR. PETTEN:
Marine Operations.
MR. HAWKINS:
My favourite topic.
MR. PETTEN:
What?
MR. HAWKINS:
My favourite topic.
MR. PETTEN:
You like that one? I have a
lot of favourite topics in your department.
MR. HAWKINS:
Yeah.
MR. PETTEN:
I see it in my sleep.
Salaries; what positions were eliminated?
MR. HAWKINS:
So we're looking at – I'm
assuming we're on 4.2.01?
MR. PETTEN:
Yeah.
MR. HAWKINS:
4.2.01, okay.
MR. PETTEN:
Yeah.
MR. HAWKINS:
So, again, through our
adjustments in the decreasing we did, within the management structure we had a
reduction of director of ferry operations for part of the year, we had a
director of marine engineering for part of the year, regional marine services
manager. We did assistant marine superintendent and regional marine service
manager. In our management structure changes, we created within that a director
of Marine Services and engineering and we've changed a stakeholder relations
manager. So we had a net effect decrease of $208,700.
MR. PETTEN:
Under 4.2.02, Island Ferry
Operations, we see there was a spike of $3 million in the revised salary
figures.
MR. HAWKINS:
Yeah.
MR. PETTEN:
And now that's dropped back
$1.6 million this year less. So what happened there?
MR. HAWKINS:
Well, yeah, it's a good
question. This is where the heartburn comes in sometimes.
The $3
million was actually insufficient funding with some of the issues that we dealt
with, with the Veteran. And we had to
put in adequate services on Fogo Island for the Fogo Island and Change Islands
service.
With the
mechanical difficulties with the Veteran,
we had to incur extra cost to get the Earl
Winsor back in service. As you know, the
Earl Winsor was slated as a surplus vessel for us and we really
didn't do a whole lot of changes to the regulatory requirements because we were
dealing with it as an excess asset. With the issues and problems we had with the
Veteran, we had to incur significant
cost to get the regulatory requirements satisfied. Then of course, in addition
to that, we incurred some extra cost in overtime for the Fogo Island-Change
Islands service last year.
So,
going forward, we've reflected a $1.3 million increase. That's primarily due to
the fact that under Transport Canada regulations whenever you have a larger
vessel and now, you know, when the
Legionnaire comes into service, we've got to incur extra cost. We've got to
have 12 additional staff for the
Legionnaire itself. So these are all extra costs that we have to incur for
those two vessels in particular.
MR. PETTEN:
So under your Purchased
Services there's $2 million less. With these, I would say that pertains to
refits?
MR. HAWKINS:
In the Purchased Services,
going forward – let me see what we have here. That's a decrease of – is a net
result of management contract increases, prior year fiscal forecast adjustment,
reallocation and decrease of funding during the zero-based budget exercise. So
we're reflecting that, building that budget line, again, on zero-based
budgeting.
MR. PETTEN:
In your revenue line you
budgeted $3.3 million for this year. It's an increase of $400,000, or I should
say $330,000 roughly.
MR. HAWKINS:
Yeah.
MR. PETTEN:
So does this come from this?
What is this money? Fees or …?
MR. HAWKINS:
Yeah. As you know, last year
we were significantly subsidizing our ferry operations to the tune of
about – prior to any changes – 95 per cent or 96 per cent. So last year, we
implemented a 40 per cent increase in ferry rates. Even with the 40 per cent
increase in ferry rates, we're still subsidizing most of our ferry services on
the average of about 93 per cent. So these are the increased rates that you find
from the increase in the rates.
MR. PETTEN:
Allowances and Assistance, $60,000, what is that?
MR. HAWKINS:
Okay. I'm just trying to figure that one out. I'm probably going to have to
defer to Charlene on that, but it's sufficient funding that we put a zero-based
analysis on.
Charlene.
MS. MCCARTHY: We
pay for vehicle damages that are incurred during the year.
MR. PETTEN:
(Inaudible) on the ferries?
MS. MCCARTHY:
Exactly. So the $60,000 is used for that purpose.
MR. PETTEN:
Okay.
Minister, you should have a line in for roads for the
pothole repairs for that – I couldn't resist.
MR. HAWKINS:
What's that?
MR. PETTEN: I
couldn't resist.
MR. HAWKINS: I
missed that one.
MR. PETTEN: She
said it's for vehicle damage for people getting on and off the ferry, so you
should have a line in for fixing tires and rims.
MR. HAWKINS:
Yes, I know. Tell me about it.
MR. PETTEN: I
dealt with it when I was there, so it's clean.
MR. HAWKINS: I'm
still owed a tire and a rim yet, too. Join the club, I'm in there.
MR. PETTEN: Yes,
that's right.
Under Coastal Labrador Ferry Operations –
MR. HAWKINS: So
4.2.03?
MR. PETTEN: Yes,
4.2.03. Why such a decrease in Supplies?
MR. HAWKINS:
That would have been, I would suspect – there are a number of things: fuel
costs, fluctuations in pricing. We also, in part of the budget, changed the
scope with the passenger/freight services. We reduced the Northern Coast from
179 to 169. That would be reflected in that. So some of those changes to fuel
would have certainly had an impact on that line item.
MR. PETTEN:
Okay.
Under 4.2.04, Ferry Terminals,
$1.4 million was budgeted
this year and last, but $760,000 was in the revised amount. I know it's dealing
with breakwaters and maintenance of ferry terminals.
MR. HAWKINS:
Yes, I think part of that
was, if my memory serves me right, there was a late tender that came in, giving
us a surplus in 2016-2017, particularly for department repairs to a couple of
our wharves: Nain, Makkovik, Hopedale, Postville, also Rigolet. I think there
was a late tender that came in that certainly would have attributed to that
surplus.
MR. PETTEN:
While under Supplies, what's
this $25,000 figure? There is nothing budgeted either year, yet it's $25,000
showing up in the revised amount.
MR. HAWKINS:
Was that a consulting for
ferry terminal maintenance projects and they vary from year to year?
MS. MCCARTHY:
I think that's minor supplies that they buy for construction. Some years, they
don't need any and sometimes they need some. So it varies from year to year.
MR. PETTEN:
For what?
MS. MCCARTHY:
Construction materials.
MR. PETTEN:
Okay.
4.2.05,
refits; so I guess that goes to my question I had earlier on the refits. There's
$2 million less budgeted this year. I know you mentioned
Earl Windsor but we also had the
Sound of Islay, is it – is that the
one that's being under refit now?
MR. HAWKINS:
Yes.
We have
nine vessels ranging in age from – well, the
Legionnaire being a year old to 48 years. Again, we do have an aging
fleet that we're trying to work through and part of our plan is to try to
provide the best service that we can possibly can with the vessels we have. And
every one of those vessels that we have, there are a lot of regulatory
requirements that need to be met from time to time. And that will certainly be –
we do planned refits on an annual basis, depending on the age of the vessel and
the life expectancy of the vessel.
So we
look at that and certainly try to, where possible, with regard to the
Sound of Islay, we were able to make a
business case for that one. Under the changes under the federal regulations – I
brought the issue to Minister Sohi, because under the transit we don't qualify,
with exception to the City of St. John's.
I had
several discussions with Minister Sohi and that was how we were able to get the
Sound of Islay to make a good business
case for us. We are getting some federal funding on that.
MR. PETTEN:
Under 4.2.07 –
MR. HAWKINS:
And just as we move forward,
the Sound of Islay will come up
further down in our –
MR. PETTEN:
Okay.
MR. HAWKINS:
If we want to go to that one.
MR. PETTEN:
4.2.07, Purchased Services,
we're under modification of Ferry Terminals. There's $5.6 million budgeted this
year, $5.8 million last year, but there was $3 million in the revised. So what
does this include?
MR. HAWKINS:
Well, in this particular cost
in the Purchased Services, in that area for that, most of the money in this
particular budget will be for Bell Island-Portugal Cove. When we have that work
completed, if you notice the Transportation and Communications, there's a
significant difference in that budget item because, obviously, within we
concentrated on the ferry terminals and upgrades in Bell Island and Portugal
Cove this last fiscal year.
And once
that work has been completed then, obviously, the travel cost outside of the
Bell Island – Portugal Cove area will be more then, certainly within this Avalon
Region. So we've forecasted for that as well because we know that we're going to
incur extra cost and so part of that is reflected in the numbers that we have
there.
And,
again, under the Purchased Services, projected revised cash flow, a savings of
$2.8 million; that was due to the construction delays that we had in Bell
Island-Portugal Cove. So hopefully we are now past that and hopefully get that
work completed fairly quickly.
MR. PETTEN:
Under 4.2.06, Passenger Ferry
Service Infrastructure, you have a budgeted amount this year of $973,000.
MR. HAWKINS:
So .06, we're back one,
right?
MR. PETTEN:
Just the next section back,
yes.
MR. HAWKINS:
What was the number on that
again?
MR. PETTEN:
4.2.06.
MR. HAWKINS:
So we're going back?
MR. PETTEN:
Yes, just the next section
behind. In mine it's under the same page.
MR. HAWKINS:
Okay.
MR. PETTEN:
It's $973,000 budgeted this year.
MR. HAWKINS:
Yes. Again, that's funded
through the current account versus the other is through the capital account.
OFFICIAL:
And it's for the Sound of Islay.
MR. HAWKINS:
Yes, and it's for the
Sound of Islay.
MR. PETTEN:
4.2.08; there's no money
budgeted this year, where we had $2.6 million last year. Would that be a tie-in
to the Legionnaire?
MR. HAWKINS:
Yes, that's the tariffs.
MR. PETTEN:
Got you.
MR. HAWKINS:
Now we should have our money
for our tariffs, or we'll have it.
MR. PETTEN:
There was money paid to the
federal government, was that reimbursed as well?
MR. HAWKINS:
Yes, we paid $106,000 per
month. I think we were doing that. So that's been now recovered.
MR. PETTEN:
That's been reversed, okay.
Under
4.2.09, Provincial Ferry Vessel Refits, I see $2.6 million last year, now we're
up this year to roughly $5.9 million. So what's the –
MR. HAWKINS:
Yes. This year we have
budgeted in the capital rehabilitation piece, we are going to have to do some
work on the Gallipoli, continuing to work on the
Beaumont Hamel, doing some minor work on the
Grace Sparkes, the
Hazel McIsaac and the
Northern Ranger. Then we always insert
a contingency amount because when we're dealing with ferries, no matter if
they're old or they're new, there's always something that pops up that we have
to be prepared for. So that's the extent of what we're doing this year. We have
$5.8 million.
MR. PETTEN:
Under 4.2.10, Passenger Ferry
Service Infrastructure, Purchased Services there have increased by $1.7 million.
What's the reason for that increase?
MR. HAWKINS:
Well, that's the capital
outlay for the Sound of Islay –
MR. PETTEN:
Okay.
MR. HAWKINS:
– would be included in that piece.
MR. PETTEN:
That's kind of spread out
through a lot of …
MR. HAWKINS:
Yeah, some current, some
capital, right?
MR. PETTEN:
Right.
4.3.01,
I see there's a little increase in Salaries.
MR. HAWKINS:
Yeah, in that there's $34,000
extra we incurred. It was increased in – there were some requirements of
overtime and backfilling costs that we incurred there.
MR. PETTEN:
Okay.
MR. HAWKINS:
So we've made the appropriate adjustment for that going forward as well.
MR. PETTEN:
Okay.
Under
4.3.02, Salaries, Government-Operated Aircraft, what positions? Were there
positions eliminated here?
MR. HAWKINS:
No, not to my knowledge.
MR. PETTEN:
It's $300,000 less.
MR. HAWKINS:
Yeah, which is – again, knock
on wood, last summer we had a really good summer when it came to a reduced
number of fires and so there was not a requirement for overtime. So we were able
to have a reduction in $366,000.
MR. PETTEN:
Okay.
MR. HAWKINS:
We had no charters either at
that time.
MR. PETTEN:
So would I be right when
these – these amounts with fluctuation right down through Transportation and
Communications, Supplies and Purchased Services.
MR. HAWKINS:
Yeah.
MR. PETTEN:
Well, Purchased Services
seems flat. Would that be all tied into the fact that we had a good …?
MR. HAWKINS:
Absolutely. It tied into
savings, a reduced requirement for charters –
MR. PETTEN:
Right.
MR. HAWKINS:
– and reduced tie in to water bombers. So you're less fuel, less expenses, so
all of that would be – all of these surpluses, it tied into that.
MR. PETTEN:
Under Grants and Subsidies
here as well, there's a flat line again at $1.285 million. So where is that?
What's included in that?
MR. HAWKINS:
Okay, let's see, Grants and
Subsidies. Of course, that would be attributed to medevac services to Labrador
coastal communities. We allocate $1.2 million year-over-year for that and we
provide that to Labrador-Grenfell Health. So that's what we pay out to that
group for medivac services to coastal communities.
MR. PETTEN:
Okay.
4.3.03,
I see revenue of $1.7 million.
MR. HAWKINS:
Yes. Of course, we have five
new 415s. We have two 215s –
OFFICIAL:
Yes.
MR. HAWKINS:
– that are excess. We don't
need them anymore. Some of them – I think one is serviceable. We have parts that
can be used for the 215s as well. So that's a revenue projection we put in there
because we're going to be actually looking at selling the C-215 and parts that
will be attributed to that. So we're hoping to realize that revenue stream.
MR. PETTEN:
Last year it was $1.7
million, this year it's $1.7 million, but the sale is not – there's been no –
MR. HAWKINS:
No, we didn't. We did engage
discussions at one time and we felt that the return we were hoping from that
agreement did not materialize to the point where we felt would be acceptable for
us. So we decided not to proceed. Now we will be looking at, I guess, divesting
that extra C-215 that we have and parts. We'll see how that goes. If it's not a
return we feel is adequate, well then you'll probably see it come up in a
subsequent budget next year as well.
MR. PETTEN:
Okay.
MR. HAWKINS:
I guess the bottom line is
we're not giving them away.
MR. PETTEN:
I'm getting to the end now. I
had just a few general questions. I wanted to go back and check on one other
section before I finish up, but while we're into talking about selling water
bombers, government assets, what is the plan this year? Is there a list of
government assets you have and you are anticipating selling and disposing of
this year?
MR. HAWKINS:
You mean overall assets?
MR. PETTEN:
I guess, yes.
MR. HAWKINS:
Well, as you know, that's an
ongoing concern of ours. One of the things, I think, when I came in the
department last year in December, in my first few months, trying to determine
how we wanted to move forward with divesting of assets and, I guess, one of the
concerns that you have if you have assets that are not being used and the longer
that you keep them, without looking for opportunities to divest them if you have
no need, the less value you're getting.
So we're
obviously seeing that because a lot of times when we have buildings or any
assets that we no longer require, the longer you hold on to those assets a lot
of times the value depreciates substantially and sometimes you get less return
than you would have expected.
It's an
exercise that we will continue as a department. If there are areas that we
identify – the Hoyles-Escasoni certainly is an area that we moved forward to
divest of that. We still have some other assets that are not being used. Right
now, that's an ongoing discussion that we have, and will continue to have, to
look at opportunities that we can get some return for the value that we have in
these assets.
MR. PETTEN:
Okay.
So
there's no formalized list per se.
MR. HAWKINS:
We don't have a list saying
that July 1, we're moving this asset or whatever. That's a discussion that we
will continue to have as we move forward.
MR. PETTEN:
Okay.
Minister, under equipment – as we know this winter, it was an issue. Has there
been any analysis done? I know mechanics (inaudible).
MR. HAWKINS:
I guess you're talking about
equipment availability. I get daily reports on equipment availability. As I
said, it seemed like the more snow you have, the more you work your equipment;
the end result is that you're probably going to have more pressures on
breakdowns and that sort of thing. We have had some challenges throughout the
winter in maintaining high levels. We'd like to be at the 80 per cent equipment
availability. Overall, on an average, in the West and Central Newfoundland,
we've been able to do to that.
On the
Avalon, depending on when the snow is heavier, we tend to have more pressures on
the equipment. So a lot of times our equipment availability numbers that come
out, come out at 5 in the morning, 5:30 in the morning when our crews go in and
do a check on what's available and they produce those numbers at that time.
Sometimes, during the winter, it's come in at 57 per cent or 65 per cent, and
that becomes an immediate concern to the general public. But sometimes, quite
often, equipment availability could be a light that's out in the truck and
they've got to repair that light. So while it might be 57 per cent availability
at 5 in the morning, by 12 noon or whenever the shift is going out at 1:30 that
could easily be up to 85 per cent.
So
there's a fair amount of fluctuation when it comes to equipment availability
throughout the year but, again, we've done a good job in making sure that we do
have mechanics on site to be able to make those repairs. As you know, if we have
pressure areas when equipment is not, we don't have adequate resources to do
that, the last resort for us is to put them out to a garage to have it fixed.
But the intent for us is to have all available equipment out, and that will vary
because we're dealing with machines and machines break down for various reasons.
MR. PETTEN:
Another question now: Are any
depots closing this year?
MR. HAWKINS:
No.
MR. PETTEN:
No? Okay. That's an easy
answer.
I'm
getting almost to the end. I have two questions; I might get a no on this one,
too.
Can you
provide – our road projects, is there a formalized list of scores for all roads?
MR. HAWKINS:
Well, you've had that
question and I think I've answered it before. Again, what was important for us
and for us as a government and for me as a minister is – and I've said it over
and over again in all fairness – that I needed and I felt there needed to be
some change with how we did roadwork or how we would do roadwork going forward.
And I wanted to put a different lens on how we would do that; hence, I was sort
of looking back historically on what was being done and, in a lot of cases, it
was a year by year by year by year, and not knowing what out-years would be. I
felt there had to be a better way of doing the amount of work that we were
doing.
So it
was for that reason I directed my staff to start looking at a different approach
to doing roadwork. As you know, requests have come in – roughly about $1 billion
worth of requests. Our roads need attention and we just don't have $1 billion to
do it. So we've got to find a better way of doing it, a more efficient way of
doing it and a more objective way of doing it. Roadwork is not something that
can be done subjectively. It's not for me, as a minister, to say I have to do a
road down in CBS just because the MHA for CBS feels I have to do that road.
It is a
process that we're putting into place and I think it will eventually – there
will be some issues as we go forward because everybody figures that they need
all their work done in year one. So what we've done, we've had a concerted
effort to do our roadwork over a five-year plan. Each year, we will announce 100
per cent of the roadwork that needs to be done for that year, and then the
out-years will see 75 per cent, 50 per cent, 25 per cent and 25 per cent.
I think
it's important for us to do that because it gives us the flexibility to be able
to make changes if, in fact, through the process that we go through, there may
be something that we're missing. Last year, all of our engineers came in and we
went through a process where we did a qualitative assessment on the roads that
were in our regions. Within that qualitative assessment we did, we looked at
things such as the class of the road, the condition of the road, the social
economic impact, safety issues and bundling opportunities. Then we scored those,
and we went through the quantitative process after we got through that section.
Then we looked at reliability and we looked at safety and we looked at usage.
So we
took all of those numbers and we collapsed them all in. Then in the fall, we
said okay, now we've done this objective analysis of what we have and the
requirements that we have; let's do somewhat of a subjective look at what people
in those areas – how they feel about roads in their areas. So we did the first
year of our web-based analysis and we will do another one this fall, well next
fall coming up, after we've gone through the summer program.
We had
563 responses through that web-based analysis. Eighty-three per cent of the
feedback we got through that web-based approach fit exactly into what some of
the decisions we're making going forward, which tells us that I guess within
that analysis we did, it's a good indicator that's probably the right approach
to deal with it.
Is it
the end all, be all? It's not, and that's why we built the flexibility in there.
Because we realize and I realize that I do have 40 MHAs, and to go through an
exercise when you have a caucus of 29, 30, you have a caucus that historically –
and I'm not jumping on anybody in particular or any government because it's
probably been done forever and a day – felt that work needs to be done in my
area because I'm Liberal or because I'm PC.
So I'm
trying to change that culture of thought process, and I want to base it on the
evidence we have to make the best decisions we can for no matter what riding it
is. I guess, too, and part of the efficiencies we're looking at how we can
better do the work. We've all heard the stories over the years; you do a
kilometre in this district and a kilometre and a kilometre. That's not the most
efficient way and effective way to do roadwork.
Part of
that is trying to take that out of that, and instead of doing that it probably
makes more business sense and from a cost perspective to do three kilometres in
one district that really, really needs it, and probably not as much in another
district that probably don't need it at the same level.
So it's
a five-year plan. I call it really the living document because even though we
know what's going to be happening in this calendar year and fiscal year, we do
have 25 per cent flexibility next year to be able to work through some of these,
and if there are areas we need to address, we will do that.
MR. PETTEN:
Thank you.
My final
question is: Would it be possible to get a copy of your
Estimates binder?
MR. HAWKINS:
As soon as I take out my
little questions and my little notes.
MR. PETTEN:
Take out your notes.
MR. HAWKINS:
So all my other little notes,
that's fine.
MR. PETTEN:
Yeah. So on that note I want
to say thank you to you and your staff for the full morning, for your answers
and time, I appreciate it, and to the Committee for having to sit and listen to
me and you for three hours. So I want to thank you for your time.
Thanks.
MR. HAWKINS:
I think it helps us all to
fully appreciate – because I don't know how some of this works, and I had to
walk over yesterday and compliment the Member for Ferryland to be able to stand
for three hours and speak the way he did yesterday. Certainly, it doesn't go
unnoticed. It is a challenge to be able to do that. I must say this is a great
exercise, it's a great opportunity.
I just
wanted to let all of you know that if, in fact, at any time you have any
questions, or any time there's something you need to know, my staff are
certainly open to answering anything you need. I usually try to use – I'm not so
sure it always works, but I do have an open door policy that MHAs on either
side, if you do have concerns certainly let me know and I'll do whatever I
possibly can to help you out.
MR. PETTEN:
Thank you.
MR. HAWKINS:
Okay.
CHAIR:
Okay. Thank you.
Before
we recall the section, I'd just like to point out that MHA Mark Browne is
substituting for Ms. Carol Anne Haley, Burin – Grand Bank, and Mr. Petten is
substituting for MHA Keith Hutchings for Ferryland.
So with
that, we'll recall the section.
CLERK:
1.1.01.
CHAIR:
Shall 1.1.01 carry?
All
those in favour?
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
On
motion, subhead 1.1.01 carried.
CLERK:
1.2.01 to 4.3.03 inclusive.
CHAIR:
Shall 1.2.01 to 4.3.03
inclusive carry?
All
those in favour?
Carried.
On
motion, subheads 1.2.01 through 4.3.03 carried.
CLERK:
Total
CHAIR:
Shall the total carry?
SOME HON. MEMBERS:
Aye.
CHAIR:
Carried.
On
motion, Department of Transportation and Works, total heads, carried.
CHAIR:
Shall I report the Estimates
of the Department of Transportation and Works carried?
SOME HON. MEMBERS:
Aye.
On
motion, Estimates of the Department of Transportation and Works carried without
amendment.
CHAIR:
Okay.
A motion
to adopt the minutes from the last meeting.
Moved
by?
MR. BROWNE:
So moved.
CHAIR:
Okay.
Carried.
On
motion, minutes adopted as circulated.
CHAIR:
The next meeting will be May
2 at 9 o'clock, Service NL, Government Purchasing Agency and Climate Change and
will take place here in the Chamber.
With
that, a motion to adjourn.
MS. PARSLEY:
So moved.
CHAIR:
Okay. Moved by Betty Parsley.
All
those in favour?
Carried.
On
motion, the Committee adjourned.