A $16.3-million hurdle will stand between the next city council and a 3.7 per cent municipal tax increase they’ve set their sights on for next year.
The current city council helped get the ball rolling during tonight’s finance and administration committee meeting, at which they gave city administration their initial budget direction.
It’ll be up to whatever incarnation of city council is elected on Oct. 24 to decide how to proceed.
The direction provided to city administration tonight includes a 3.7 per cent municipal tax rate increase and a 4.8 per cent increase in water/wastewater rates.
Although the new city council isn’t expected to settle on a final 2023 budget until early in the new year, Ward 7 Coun. Mike Jakubo said an early start will help the city get to work on what will be a significant undertaking.
“It’s not just a finance department exercise, it’s an entire organization exercise pulling information together, considering new factors … in order to get a document before council in a timely manner.”
Jakubo also serves as chair of the city’s finance and administration committee, which was nearly unanimous in providing city administration with tonight’s direction.
In their report presented tonight, city administration outlined a $31.1-million budget increase in 2023 forecast to maintain the city’s current trajectory, whose total impact on the municipal tax levy is estimated at 9.9 per cent.
After factoring in an anticipated net assessment growth of one per cent (new construction and renovations offset by demolitions and appeals), this amount is brought down to a net municipal tax levy of 8.9 per cent.
From that, city administration has been charged with finding a net savings of $16.3 million to bring next year’s tax increase down to the desired 3.7 per cent, which is in keeping with the city’s long-range financial plan.
“There’s lots of work to do,” city financial planning and budgeting manager Steve Facey told Sudbury.com after tonight’s meeting.
This work, outlined in a series of resolutions passed by the committee tonight, will include a review of service levels and user fees, as well as the possible deferral of projects and other cost-cutting measures to be determined by city administration and voted on by city council.
Certain directions valued at $100,000 or less will be incorporated into the base budget wherever the city’s executive leadership team supports the change. A summary of these changes will be disclosed to the city’s finance and administration committee, whose membership is city council as a whole, who will have the opportunity to make all final decisions.
Although the tentative plan includes a $7.5-million increase to the city’s capital budget, city council did not opt tonight to include an alternative plan which would aim to fill the city’s annual infrastructure spending gap within the next decade.
“The reverberating effect of the pandemic is causing significant pressures on the completion of capital projects,” according to the report, which also notes supply chain issues related to construction materials has caused significant price increases and delays in delivery.
“This will result in capital projects with longer completion times as well as higher costs than expected.”
The alternative plan council opted against would see the city plug an additional $5 million per year toward infrastructure every year for the next decade.
Coupled with annual water/wastewater rate increases, this additional infrastructure spending would increase the city’s annual capital budget by approximately $100 million by 2032. This is the amount by which city administration determined last year the city would need to increase annual spending to maintain assets at their current overall state.
Although Facey clarified after tonight’s meeting that city council did not choose to move forward with this infrastructure plan, all budgetary decisions remain at the will of council.
Also included as part of 2023 budget deliberations will be a proposed 4.8 per cent increase in water/wastewater rates, which is part of a long-range plan with increases mapped out to 2039.
While city council ended up settling on having city administration prepare a 3.7 per cent municipal property tax increase for 2023, Ward 6 Coun. René Lapierre tabled a motion to have it dropped to 3.5 per cent, which would require shaving an additional $630,000 from the budget.
Ward 5 Coun. Robert Kirwan criticized the 3.5 per cent proposal as arbitrary, while Ward 4 Coun. Geoff McCausland questioned how the city was going to cut out $16.3 million from the 2023 budget, let alone an additional $630,000.
Kirwan, McCausland, Ward 8 Coun. Al Sizer, Ward 9 Coun. Deb McIntosh, Ward 10 Coun. Fern Cormier, Ward 12 Coun. Joscelyne Landry-Altmann and Mayor Brian Bigger voted against the motion.
Joining Lapierre in supporting his motion was Ward 1 Coun. Mark Signoreti, Ward 2 Coun. Michael Vagnini, Ward 3 Coun. Gerry Montpellier and Jakubo.
With Lapierre’s motion defeated, a majority of city council members approved having city administration pursue a tax increase of 3.7 per cent, which Signoretti, Vagnini and Montpellier opposed. Ward 11 Coun. Bill Leduc was not present.
The city’s elected officials are scheduled to receive a 2023 budget update on Sept. 13, which will join a months-long community consultation opportunity online. City administration will table their proposed budget documents in January, which will be followed by three budget meetings of city council.
The 2023 budget forecast presented by city administration tonight includes the following anticipated changes totalling an increase of $31.1 million:
- Contractual obligations: $10.7 million (3.59 per cent increase from 2022)
- Contribution to Capital increase in accordance with Capital Budget Policy and Bylaw: $7.5 million (24.3 per cent increase)
- Service partners: $3.9 million (4.82 per cent increase)
- Contribution to reserves: $3.1 million (100 per cent increase)
- Debt repayment: $1.9 million (3.2 per cent increase)
- Fuel: $900,000 (15.8 per cent increase)
- Insurance: $735,000 (15.8 per cent increase)
- Phase out of administrative efficiencies (COVID-area layoff of summer employees): $600,000 (47 per cent increase)
- Transitional housing: $600,000 (53.9 per cent increase)
- Legislated training for volunteer firefighters: $525,000 (100 per cent increase)
- Utilities: $400,000 (2.3 per cent increase)
- Other $200,000 (0.1 per cent increase)
Tyler Clarke covers city hall and political affairs for Sudbury.com.
