Belt-tightening helps city achieve small budget surplus

Greater Sudbury is headed for a small budget surplus, in part thanks to money saved during the P6M initiative.

P6M – or Project $6 million – was the city's successful effort to find $6 million in savings to pay for the tax freeze Mayor Brian Bigger promised during the October 2014 election campaign.

Savings found during that process helped balance out shortfalls in other areas. For example, tax writeoffs are projected to cost $460,000 more than forecast, as a result of such things as appeals and requests for reconsideration.

Sudbury Transit and other fleet vehicles are running a deficit of around $1 million, with Transit alone coming in $820,000 over budget.

The Transit projected net over expenditures of $820,000 is largely a result of … over expenditures in Transit bus repairs and maintenance of $710,000, which includes unanticipated major component rebuild expenses,” says a report going to the city's finance and administration committee on Tuesday. “ (And there's a) shortfall in Transit fare box revenues of approximately $310,000 due to a two-month delay in approving 2015 user fee increases and a decline in ridership.”

However, efforts to address a surge in Handi-Transit usage by enforcing eligibility rules meant that after years of going over budget, it will finish the year $160,000 under budget.

“The Fleet projected net over expenditure of $470,000 is primarily a result of over expenditures in vehicle repair and replacement parts, partially a result of fleet vehicles remaining in service beyond their useful lives, damages to department fleet vehicles and unanticipated increases in vehicle licensing fees,” the report said.

The environmental services department – which includes landfills and recycling – went over budget by $470,000, primarily because tipping fees from the industrial and commercial sector was $420,000 less than forecast.

On the positive side, the city received $1.95 million more income on its investments than it forecast, “primarily from capital gains from the sale of bonds,” the report said.

That amount is offset by a projected cut in OLG slots revenue of $185,000 and a “projected increase in interest on tax arrears net of writeoffs of interest and penalties $120,000,” the report said.

“The city’s projected net year-end position will result in a reduction to the budgeted draw from the Tax Rate Stabilization Reserve of approximately $650,000 as a result of Project 6 Million savings. Any additional net surplus realized will be contributed to reserves in accordance with the Reserve and Reserve Fund Bylaw.”