Today’s finance and administration committee meeting was intended to serve as an early “checkpoint” on business cases to see whether they’re worth being included in draft 2022 budget documents, which will be debated at a series of meetings set to begin Nov. 29.
So described committee chair and Ward 7 Coun. Mike Jakubo in opening up the afternoon’s meeting, at which 25 business cases totalling $7.17 million in potential 2022 budget impacts were considered.
The $7.17-million price tag pales in comparison to the actual financial ask, with some budget items leaning on proposed debt funding paid over several years to make them a reality.
A twin-pad multipurpose sports complex proposed for Hanmer is one such project and would carry a total project cost of $29.2 million, including a 2022 budget impact of $584,520.
“It will be difficult to change my mind that many of these businesses cases shouldn’t be approved as we move forward,” Ward 8 Coun. Al Sizer said early in the meeting, after prompting city financial planning and budgeting manager Steve Facey to outline some financial realities.
“Some of the business cases are suggested will be funded or will have to be funded through debt financing … and we already have approximately $100-million worth of debt that has not been secured,” Sizer said -- a point Facey supported.
There was $43 million in roads and bridges work included in the 2020 and 2021 capital budgets whose debt has yet to be secured alongside $55 million for the Pioneer Manor redevelopment project.
Further, Sizer said, “Our reserves are precariously low, so funding one-time initiatives out of our reserves while it solves that problem for that year, it certainly overall puts us in a more precarious position should we have some kind of major catastrophe or issue in our community.”
This is also a point Facey corroborated, clarifying that reserve levels are considered low “when looking at other comparators,” and the city has an ongoing funding gap of $100 million per year it requires to keep city assets in their current condition.
Although Ward 1 Coun. Mark Signoretti said that although it was good to learn last week that the City of Greater Sudbury has received another AA credit rating from S&P Global, residents aren’t very interested.
“The feedback I received back from my constituents was, ‘We don’t care about your credit rating, we care about how much money you take out of our pocket every month for property taxes',” he relayed.
During their June 22 finance and administration meeting, city council asked staff to prepare a draft 2022 budget that would include a property tax increase no greater than three per cent.
The items listed in the business cases will not form part of this base budget, Facey clarified during today’s meeting.
If all 25 business cases presented today were approved in the final budget using the funding schemes proposed therein they alone would result in a 2.4-per-cent tax levy increase.
Of the proposed projects, Sizer said approximately 19 shouldn’t even be considered this year “in light of the economic conditions we’re facing.”
“Every one of the business cases has merit. If I had my druthers I would support all of them, but unfortunately, the reality isn’t there.”
Business cases in addition to the 25 presented today will also be included in 2022 budget deliberations, including those approved by council in recent weeks and whichever business cases are approved at the Oct. 12 city council meeting.
City administration’s draft budget is expected to be released on Nov. 2 and will set the foundation for budget deliberations to begin Nov. 29.
Tyler Clarke covers city hall and political affairs for Sudbury.com.