The good news is Greater Sudbury's 2019 operating deficit was lower at the end of August than it was in May. The bad news is it's still running at close to $7 million.
A report headed to the finance committee next week says about $300,000 of the deficit has been trimmed since the spring, and by the end of the year, whatever is remaining will be paid off using reserve funds.
The major sources of the budget shortfall are in departments that have struggled to meet their approved budgets in recent years. Leading the way is winter maintenance, which reported it spent $4.7 million more than budgeted as record snowfalls hit Greater Sudbury early in 2019.
“The city received 262 cm of snow (8.6 feet) to date in 2019, compared to the 30-year average of 164 cm, or 5.4 feet,” the report says. “Summer operations is anticipating a $600,000 surplus from the extensions of winter control related activities and therefore a delay in summer maintenance.”
Combined, the roads department is looking at a $4.1-million shortfall.
The city's fleet costs is again over budget — this time by $1.2 million — because maintenance costs for its aging fleet of buses and other vehicles have been increasing. That amount is offset by increased user fees for taxation and lower staffing costs, leaving a shortfall of $790,000.
Pioneer Manor, the city-owned long-term care home, is also $790,000 over budget because of new short- and long-term disability programs offered to CUPE staff at the home.
City transit is also over budget, by $690,000. That's because of added staffing costs as the system changed to GOVA, an extra $140,000 spend removing snow from bus stops and another $130,000 to repair fare boxes “and vehicle body work requirements.”
Other departments in the red include:
- Fire services: $310,000 over budget because of overtime caused by staffing shortages.
- Police services: Over budget by $340,000 because of added staffing costs, OT and costs of hiring outside counsel.
- Leisure services: They are $210,000 over budget because of a drop in rental fees for arenas, added snow removal costs and higher maintenance costs.
Tax revenue is $900,000 less than expected, because tax bill appeals reduced revenue by $500,000 and there was $400,000 less in assessment growth than expected. The amount is offset by higher than expected grants from the province, leaving a $750,000 shortfall.
Some departments are spending less money than their budget. Tipping fee revenue at the landfill is $240,000 more than expected, and other departments saved a significant amount by not filling vacancies.
Because municipalities can't run deficits, whatever shortfall is left by the end of 2019 will be made up using reserve funds. Prior deficits have almost exhausted the tax rate stabilization fund, meaning the lion’s share of the shortfall will come from existing capital reserve funds originally aimed at paying for infrastructure renewal.
Read the full report here ahead of the finance meeting Oct. 22.
