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City budget running $2.2M in the red: report

July storm cleanup, added winter maintenance costs behind the shortfall
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Greater Sudbury is facing a number of rising costs that will make the 2019 budget process particularly challenging, says a report headed to city council next week.

Earlier in the year, council directed staff to come back with a budget that maintained services, but kept the property tax hike to no more than 3.5 per cent, with options on reducing it to 3 per cent and 2.5 per cent.

“Staff are navigating several significant pressures in 2019 just to maintain the level of service provided,” the report says. “These items place upward pressure on the net tax levy.”

They include funding cuts from the new provincial government – particularly for social housing and green programs – as well as less federal money for geared-to-income housing.

And costs of maintaining the city's aging fleet of vehicles are rising every year, the report said, since the city only spends $3.3 million a year replacing them, rather than the $8 million required to catch up, as outlined in a KPMG report on maintaining city assets.

They include: the hike in minimum wage, which is adding $130,000 in new costs; WSIB premiums are rising by $680,000; a softening of the recycling market is costing the city $600,000; and, energy costs are rising $675,000.

As for the final 2018 budget, the report says the city's $550 million budget is about $2.2 million over, largely because of a $1.25 million overrun in the winter control budget, and the cleanup after July 9 storm in Sudbury cost an unbudgeted $950,000.

“Departments have been continually working to mitigate this potential deficit,” the report says. “Staff will continue to implement measures to reduce expenditures wherever possible in order to further reduce this deficit. 

“The city’s projected net year end position will result in a draw from the Winter Control Reserve Fund and the Tax Rate Stabilization Reserve in accordance with the Reserve and Reserve Fund bylaw.”

The report goes to council Sept. 25 in what will be the final meeting before the Oct. 22 municipal election. 




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