The process of finalizing Greater Sudbury's roughly $540 million budget will begin Jan. 22, when the new city council will formally receive a copy of the draft budget.
In May, councillors directed staff to prepare a budget that maintains existing services while keeping property tax increases to no more than 3.5 per cent. The direction included options on how to limit the tax hike to three per cent and 2.5 per cent.
An update in September outlined the problems staff was facing in preparing the budget that kept existing services, but limited the tax hike. They include cuts in provincial funding – particularly funds for social housing and green programs. There's also less federal money for social housing.
The city's fleet of aging vehicles are becoming more costly to maintain. The city's transit department, for example, spent more than $645,000 more than budgeted on bus parts in 2018, plus $310,000 more on fuel because of rising diesel costs.
“The asset management plan as produced by KPMG indicated an immediate $8 million dollar capital requirement to replace vehicles/equipment that are beyond their useful lives,” the September update said. “This compares unfavourably to the capital budget of approximately $3.3 million. As a result, maintenance costs continue to rise.”
Higher worker insurance premiums will add $680,000 to the 2019 budget, and the loss of China as market for some recycled products means a loss of $600,000 in revenue. Rising energy costs will add another $675,000 next year, and the winter control budget has seen significant overages for the last three years, including $1.25 million in 2018.
In addition to the property tax hike, homeowners are expected to see water and sewer rates rise by 7.4 per cent, part of a long-term plan to have the costs of maintaining the system transferred to users. The hike will give the city an added $3.4 million for capital work next year.
Also adding to budget pressure in 2019 are outside boards – the police, health unit and conservation authority. While they have been asked to keep their budget ask to 3.5 per cent or less, the police in particular will be challenged because they spend little aside from salaries, and they need either a new headquarters, or to proceed with an $18.8 million renovation of their Brady Street location.
After receiving the budget in January, councillors will have a month to study it and ask staff questions before intense budget meetings begin Feb. 19-21. The goal is to pass the budget by Feb. 21.
@darrenmacd
