City staffs’ work to deliver a budget that keeps the property tax levy as low as possible is on schedule “in broad strokes,” said City CAO, Ed Archer, at a Sept. 19 finance and committee meeting.
Archer presented to the committee an update on the 2024-25 municipal budget. Draft plans would currently require an average property tax levy increase of 6.3 per cent, and staff have been directed by council to reduce that amount to 4.7 per cent.
While staff are working to that end, inflation has become an issue, said Archer.
“A lot of costs that are driven by in some cases, third party contracts, or bargaining unit contracts that have certain fixed costs attached to them,” Archer told meeting chair, Ward 9 Coun. Deb McIntosh.
Costs are going up in every sector of the economy, said Archer.
“The costs are being driven by the supply contracts we have and the third party contracts that our contractors are using,” he said. “We feel those effects ourselves and our contractors and suppliers feel them as well, and you’ll see that in the context of plans for delivering current service levels in 2024 and 2025.”
These inflation costs could also hamper the city’s ability to proceed on capital projects related to water and wastewater, said Archer, noting the budget will follow its financial plan, but inflation effects limit the potential to undertake capital renewal work.
As for the water and wastewater budget, current planning anticipates a 4.8-per-cent rate increase to user fees. Archer said the inflationary effects are significantly influencing the scale of the city’s capital plan.
“That means that some of the work that we would normally undertake for asset renewal may not be affordable within the context of a 4.8-per-cent rate change,” he said. “Which is an increase in risk, or prompts a discussion about a different level of rate support for the service needs that we have.”
The CAO also shared the release of the city’s credit rating from Standard and Poor, released that morning.
“Our credit rating has been reaffirmed as AA+ rating, and a stable outlook,” said Archer. “This is good news.”
Archer said it was one of the highest credit ratings available, and is an indicator of Sudbury’s credit worthiness and overall financial health.
“It's a signal to creditors that we are a good risk,” he said. “The AA+ credit rating is an indication that we would get one of the best available interest rates the market has available at the time.”
Archer also spoke of Sudbury’s supervised consumption site, which in the absence of funding for next year, could close. In his update, he said the draft budget does not include property tax support for supervised consumption services.
The subject of discussions online and in committee meetings, Archer said City staff are aware of the importance of the service. “But as we have discussed on many occasions, this is a public health service,” he said. “From the feedback we've heard so far, we believe that there's a role for the provincial government to play in funding that service. If there was a need for continued property tax support for the service, then there'll be an amendment to the plan that we'll present to you in December, or further direction from you between now and then to incorporate those costs into our 2024-2025 plan.”
Ward Coun. Bill Leduc asked if there had been discussions with Public Health Sudbury and Districts about funding the site, Ward 6 Coun. Rene Lapierre, chair of the board of health, said no direct talks had taken place, and that any funding would have to have approval from the other districts covered by the health Unit as they would not benefit from the site’s Sudbury location.
“There's nuances to being able to do that,” said Lapierre. “Not saying it's impossible, but that's the kind of process that we'd have to look at and the board would have to share.”
Archer closed his presentation by noting that budget development is on schedule.
“Community consultation begins now and will proceed through October,” he said.
City staff anticipate tabling a document for council and public review by mid-November, to be voted on in December.
Jenny Lamothe is a reporter with Sudbury.com