City staff will need to cut $10.5 million from the base budget in order to hit city council’s mandate for a 4.7-per-cent tax levy increase limit during both of the 2024 and 2025 budget years.
This much is affirmed in the city’s latest 2024-25 budget update report, which is on the agenda for the Sept. 19 finance and administration committee meeting of city council.
The $10.5 million does not include the annual expenditure of $1.1 million city council had tentatively approved for The Spot, which is the city’s supervised consumption site.
The 2024-25 budgets will not include funding for this service, “unless otherwise directed by council,” according to the municipal report.
Although efforts have been made to bring in provincial funding for the harm-reduction service, the report notes that no provincial funding has been committed to date.
A similar need to pare down the base budget occurred in advance of 2023 budget deliberations, when staff cut $17.8 million in order to hit city council’s 3.7-per-cent tax levy increase limit in the base budget (city council ended up approving a 2023 budget with a 4.6-per-cent tax levy increase).
Municipal staff achieved their 3.7-per-cent goal through various points of financial maneuvering, which included deferring plans to build up their reserve funds and leaving job positions temporarily vacant after people quit or retire.
This process, called “vacancy management,” ran the risk of causing reduced responsiveness and placing additional strain on teams experiencing high turnover, according to the city's 2023 budget documents.
The adjustments created for more of a “short-term view” to municipal operations, city CAO Ed Archer cautioned at the time, noting there’d be less wiggle room into the budget in areas such as winter control, which is an imprecise budget estimate he admitted “probably will be wrong.”
Despite these points of caution, the city’s latest budget variance report, which was also tabled for the Sept. 19 finance and administration committee meeting, projects a net year-end surplus of $4.1 million for 2023.
Following city council direction, municipal staff will table the 2024-25 operating budgets and four-year capital budget on Nov. 15, which the city’s elected officials will debate the following month.
This is the city’s first crack at multi-year budgets, which were proposed by Ward 9 Coun. (and finance and administration committee chair) Deb McIntosh earlier this year, at which time they were billed as aiding in long-term planning.
The lone city council member to vote against the proposal was Ward 2 Coun. Michael Vagnini.
As with recent budget cycles, city staff have cited a number of challenges in meeting city council’s tax increase deadline:
- Roads is experiencing significant price increases with operations contracts
- There are pressures from Greater Sudbury Fire Services surrounding overtime requirements due to staffing requirements, ongoing absences and WSIB. A business case is being prepared for 2024 deliberations outlining the process to hire additional staff to reduce dependence on overtime.
- The Lorraine Street transitional housing complex will bring additional expense.
- Environmental Services (waste collection) is seeing a “significant price increase” with multiple contracts and decreased revenue, and are bracing for uncertainty around a transition away from municipalities being financially responsible for recycling by April 1, 2025
In keeping with recent years’ long-term plan, water/wastewater rates are slated to increase by 4.8 per cent in both 2024 and 2025, bringing in a respective additional amount of $700,000 and $1.9 million per year.
On top of the 4.7-per-cent base tax levy increases planned, the city will also table an additional proposed net levy increase of 1.5 per cent in each year of the city’s four-year capital plan, toward an “accelerated road asset renewal equivalent.”
If implemented in each of the four years, it would bring in $4.98 million in 2024, followed by $10.5 million in 2025, $16.6 million in 2026, and then $23.32 million in 2027.
As previously established, the city’s roads are currently underfunded, and are en route to slip from an overall “fair” status to “poor” by 2030, following the current funding model.
The city’s five-year historical investment in roads is $35 million per year, and the annual need is $80 million.
A question during upcoming budget deliberations will be whether Mayor Paul Lefebvre invokes the so-called “Strong Mayor Powers,” which were bestowed unto him by the province.
Using these powers, Lefebvre can, with only one-third city council support, set budgets, as well as veto and pass bylaws, as long as they’re in keeping with provincial priorities, such as those around getting more housing built.
Last Month, Lefebvre said he had no intention of using the powers, and would instead strive toward consensus and collaboration around council chambers instead.
The Sept. 19 finance and administration committee meeting of city council will begin at 6 p.m., and can be viewed in-person at Tom Davies Square or live-streamed by clicking here.
Tyler Clarke covers city hall and political affairs for Sudbury.com.