Minutes - October 6, 2022 - Finance and Facilities Committee Meeting 

Members Present:

Mr. Mike Steele (Chair)
Mr. Matt Reid
Ms. Maureen Cassidy
Mr. Selomon Menghsha 

Regrets:

Ms. Kelly Elliott

Others Present:

Ms. Stephanie Egelton, Senior Executive Assistant to the Medical Officer of Health (Recorder)
Dr. Alexander Summers, Medical Officer of Health
Ms. Emily Williams, Chief Executive Officer
Mr. David Jansseune, Assistant Director, Finance
Ms. Carolynne Gabriel, Communications Coordinator and Executive Assistant to the Board of Health
Ms. Mary Lou Albanese, Director, Environmental Health and Infectious Disease

At 9:01 a.m., Chair Mike Steele called the meeting to order.

Disclosures of Conflict of Interest

Chair Steele inquired if there were any disclosures of conflicts of interest. None were declared.

Approval of Agenda

It was moved by Ms. Maureen Cassidy, seconded by Mr. Matt Reid, that the AGENDA for the October 6, 2022 Finance & Facilities Committee meeting be approved.
Carried

Approval of Minutes 

It was moved by Mr. Reid, seconded by Ms. Cassidy, that the MINUTES of the August 4, 2022 Finance & Facilities Committee meeting be approved.
Carried

New Business

MLHU2 Financial Statements – Fiscal 2022 from April 1, 2021 to March 31, 2022 (Report No. 15-22FFC)

Ms. Emily Williams, Chief Executive Officer introduced the report on the MLHU2 Financial Statements. Ms. Williams explained that this is the “second company” of the Health Unit financially.

Mr. David Jansseune, Assistant Director, Finance provided an overview of the MLHU2 Financial Statements (April 1, 2021-March 31, 2022).

Highlights of these financial statements included:
• The five programs in these financial statements are 100% funded by the Province..
• The goal for these programs is to use as many funds provided as possible to conduct work within these programs.
• MLHU budgeted $2,827,920 on expenditures for these programs but spent $2,714,219 .
• Note 3 indicates financial liabilities, with currently $35,676 listed as liabilities with permission to carry over. This is listed as a liability because if these funded programs (Blind-low vision, Preschool speech and language, Infant hearing, Healthy Babies Healthy Children, Shared Library Services and Smart Start for Babies) ended today, we would be required to pay back these funds to their funders. There was an approximate $6000 deficit for Shared Library Services in 2022.
• In Note 4, it is noted that the HIV/HEP C Program ended in March 2022 and will not appear on future financial statements.

It was moved by Mr. Reid, seconded by Mr. Selomon Menghsha, that the Finance & Facilities Committee make a recommendation to the Board of Health to approve the audited Financial Statements of Middlesex-London Health Unit for programs ended March 31, 2022.
Carried

 Proposed 2023 Budget Planning Process (Report No. 16-22FFC)

Ms. Williams provided the committee a proposal for the 2023 Budget Planning Process.

Ms. Williams noted that the 2023 budget process is being adjusted at MLHU. This is due to continued uncertainty regarding COVID-19 requirements, lack of visibility to 2023 base funding, significant inflationary pressures, and because adjustments at the margin as in past years using Program-Based Marginal Analysis (PBMA) are no longer effective. The new processes needed for planning for MLHU include two new frameworks and zero-based budgeting.

MLHU is going to budget based on the following assumptions:
• Funding will be flat to 2022 levels, with MLHU covering all inflationary pressures and with Ministry funding information to be available in January 2023.
• Mitigation funding will be continued for 2023.
• COVID-19 remains separate “extraordinary expense” with funding confirmed for 2023 on September 29, 2022.

Ms. Williams noted as many organizations are experiencing, MLHU is experiencing significant inflationary pressures. This includes $596,000 for salary/benefits/step-increases and $300,000 for corporate expenses, totaling approximately $896,000.

It was noted that Senior Leadership has supported a plan to reduce gapping to 2021 levels, with an additional pressure of approximately $336,000. Further, Senior Leadership has supported an additional plan to increase payment of variable portion of the bank loan (related to the fit-up of CitiPlaza office location).

This plan includes:
• Budgeting $200,000 for 2023 (currently $75,000 annually).
• Evaluation will occur in Q4:
- This will be added to the gapping budget line; not the overall target.
- Determine amount to pay based on surplus/shortfall – it is noted that the additional payments will only be made if there is a surplus.
- Must be budgeted for Ministry of Health to allow for repayment.

Ms. Williams summarized that the organizational target for inflationary pressures is $896,000 and for reduction in gapping/adding bank loan payment is $336,000 with the total target being $1,200,000.

Ms. Williams highlighted the proposed budget planning process for 2023 includes zero-based budgeting of general expenses and using the frameworks of the Public Health Program Pyramid and Critical Business Infrastructure (depending on which program is being evaluated).

Highlights of zero-based budgeting include:
• The exclusion of COVID-19 funds.
• Keeping 100% funded programs at 2022 levels.
• Finance providing allocations based on 4-year history of actuals.
• Senior Leadership providing rationale for any increase to SLT for approval.

Dr. Alex Summers, Medical Officer of Health provided an overview of the Public Health Program Pyramid (noted in Appendix A):
• The pyramid is split into different levels.
• Legacy (disinvested) work has been moved into different sectors or is deemed no longer impactful. MLHU does not have much of this programming remaining.
• Aspirational (reviewed) work is optional work that could fit into a community need, but not under the core understanding of public health work.
• Essential (maintained) is programming aligned under the Ontario Public Health Standards or legislated under the Health Protection and Promotion Act and considered a part of organizational strategy and effective interventions of programs for their work.
• Critical (preserved) are mandatory programs aligned under the Ontario Public Health Standards or legislated under the Health Protection and Promotion Act and include critical business infrastructure and work throughout a crisis. These include services that were run throughout the pandemic.

Ms. Williams provided an overview of the Critical Business Infrastructure framework:
• Cross-organizational service that impacts all staff, supports all divisions equally and provides consultative/problem-solving services to other parts of the organization.
• Supports legislated requirements.
• Provides business continuity/critical infrastructure that includes support to emergency response and ensures the protection of the organization’s assets.
• Supports external stakeholders, to provide information and support stakeholder relations.

Next steps include Board of Health approval, staff engagement, notifying union partners, presenting at Staff Town Hall and divisional follow up.

The Board noted that funding could be requested from the local municipalities to address shortfalls. Dr. Summers noted that municipal partners could be asked to provide additional funding under the Health Protection and Promotion Act. Municipalities have been filling shortfall for delivery of important public health programs and the gap has been filled in other jurisdictions.

Ms. Williams noted that for cost effective strategies corporately and for the future, MLHU has been conducting equipment refresh cycles and looking at reestablishing certain reserve funds. Ms. Williams further noted that MLHU has embedded risk rating criteria from the historical PBMA process into these budgeting frameworks to leverage the strengths of that process.

It was moved by Ms. Cassidy, seconded by Mr. Menghsha, that the Finance & Facilities Committee make a recommendation to the Board of Health to:
1) Approve the revised budget planning process for 2023 outlined herein;
2) Approve the modified zero-base budgeting approach to General Expenses; and
3) Receive the Public Health Program Pyramid and Critical Business Infrastructure frameworks outlined in Appendix A and Appendix B to Report No 16-22FFC for information.
Carried

Confidential

At 9:40 a.m., it was moved by Ms. Cassidy, seconded by Mr. Reid, that the Finance and Facilities Committee will move in camera to consider matters regarding personal matters about an identifiable individual, including municipal or local board employees, matters regarding labour relations or employee negotiations, and advice that is subject to solicitor-client privilege, including communications necessary for that purpose.
Carried

At 9:57 a.m., it was moved by Mr. Reid, seconded by Ms. Cassidy, that the Finance and Facilities Committee rise and return to public session from closed session.
Carried

Other Business

The next Finance and Facilities Committee meeting will be held November 3 at 9 a.m.

Adjournment 

At 9:58 a.m., it was moved by Ms. Cassidy, seconded by Mr. Reid, that the meeting be adjourned.
Carried

Michael Steele
Chair

Emily Williams
Secretary