With next year’s budget forecast currently reflecting a property tax levy increase of 9.3 per cent, city administration has a steep hill to climb to meet city council’s 3.7 per cent increase target.
“As in prior years, there are familiar, significant financial pressures,” according to a report by city finance co-ordinator Kelsi Bernier, which is on the Sept. 13 city council meeting agenda.
“There are also additional pressures such as significant price changes due to inflation, affecting a variety of inputs such as increased energy costs, insurance, and contractual obligations. The potential remains for anticipated, but unrealized, senior government funding.”
City council gave administration the 3.7 per cent 2023 tax increase target in June, which at the time was expected to include shaving off $16.3 million. The update up for city council discussion next week cites a need to reduce net costs by approximately $17.7 million.
The draft budget remains a work in progress and will be presented to city council on Jan. 17, after which it will be subject to a public review period and anticipated approval by March 7.
This work will be undertaken by whatever incarnation of city council is elected on Oct. 24, which means they’ll face numerous difficult financial decisions right out the gate.
“Greater Sudbury’s budget emphasizes the relationship between expected service levels and the costs required to provide them,” according to Bernier’s report. “City council sets the service levels it wants the community to receive, and the budget reflects those choices.”
Some key areas of budgetary increases highlighted in Bernier’s report include:
- Capital project increase of $10.2 million per city policy, or 3.2 per cent of the tax levy. Reductions are possible, with the consequence being fewer capital projects or additional financing support from other sources, such as senior governments or debt.
- A contribution to reserves of $3.2 million is planned in alignment with the city’s long-term plan and “recognizes the need to address chronically low reserve levels.”
- Salaries and benefits are poised to increase by $5.6 million, or a 1.8 per cent tax levy increase, excluding police. This is due to existing contractual arrangements, increased costs for Workplace Safety and Insurance Board claims and planning taking place for upcoming negotiations with the majority of the city’s unionized employees.
- A 39 per cent increase in fuel costs is anticipated, totalling $2 million, or a 0.6 per cent increase on the tax levy.
- This year’s added debt load will require $2 million for interest and principal payments, resulting in a 0.6 per cent tax levy increase.
- Ongoing support for the supervised consumption site will result in a 0.3 per cent tax levy increase. The city is pushing forward with its support for operational costs until such time as the province steps up.
- Legislated fire service personnel training will cost $770,000, resulting in a 0.2 per cent increase to the tax levy.
- The rising cost of natural gas and hydro is anticipated to require an additional $430,000 yext year, resulting in a 0.1 per cent impact to the tax levy.
- Insurance costs for all municipalities are on the rise due to a tight insurance market, according to Bernier’s report. The city anticipates an eight per cent increase, which is $380,000 or a 0.1 per cent impact to the tax levy.
- Preliminary budgets for Greater Sudbury Police Services, Nickel District Conservation Authority, Greater Sudbury Public Library Board, and Public Health Sudbury and Districts represent an overall increase of $3.8 million, or a 1.2 per cent property tax levy impact.
User fees will be under consideration during 2023 budget deliberations, which “may change the ratio of tax support for fees.” Services whose user fees will be analyzed include those within Leisure Services, Animal Control, Transit and Environmental Services.
The city also anticipates a water/wastewater services increase of 4.8 per cent, which translates into an anticipated additional $1.3 million allocated of water/wastewater capital projects.
Tyler Clarke covers city hall and political affairs for Sudbury.com.