UPDATED — Oct. 1, 3:15 p.m.
Greater Sudbury's water and wastewater department has blown its 2010 budget by almost three million dollars, a report unveiled at the Sept. 29 city council meeting revealed.
The total over-expenditure was $2.75 million, city council was told.
“This department's budget has been off for some time now,” Ward 3 Coun. Claude Berthiaume said. He likened the shortfall to the cost over-runs in the city's winter works maintenance program in 2009, where staff over spent by $1.6 million.
“We need to be advised earlier about (going over budget),” Berthiaume said. Going over budget means money will have to be taken out of the reserve budget, he explained.
“That could affect future capital projects — they could be delayed.”
Berthiaume said the cost of water and wastewater services are entirely funded out of the water and wastewater fees businesses and residents pay on their water bills. No money from the general tax levy is used for these civic costs, he said.
“If they keep going over budget then taxpayers may have to pay more,” Bertiaume warned. The annual tax bill for residents and businesses could increase.
Marianne Matichuk, one of eight mayoral candidates, said the over expenditure is not surprising, and blamed the city for a lack of planning. She said the fact the city embarked on a water conservation plan a couple of years ago, which resulted in lower water consumption, affects city water and wastewater revenues.
“There was no impact statement on how (the water conservation plan) would affect (city) revenues,” she said.
A sizable portion of the spending comes from salaries, benefits, and contractors. The projected over-expenditure of $675,000 in this area was "largely due to unbudgeted supervision relief and standby charges ($262,000), additional temporary and student salaries ($170,000), succession planning and vacation payouts ($160,000)."
Contract services were over budget by approximately $520,000. Sludge haulage was over budget by $135,000, but that was not a surprise as the extra cost was indicated last spring when a new vendor contract was awarded.
Repairs to water mains added another $330,000 to the bill, though the number of breaks was within historical norms, the report stated.
Increased hydro consumption at the larger water treatment plants added another $148,000 to unanticipated costs.
Furthermore, consumption by water users continued to decline. "Water fees are projected to be short by approximately $800,000, while wastewater fees are estimated to be $1,033,000 less" than expected, the report warned.
But it wasn't all bad news. Scrutiny of material costs by staff resulted in under-spending of $234,000, the report indicated.
Election candidates in a number of wards have said the public is telling them water and wastewater fees have increased over the years. Seniors especially are finding paying increased city fees such for water and wastewater services is making it more difficult for them.
The 2009 water wastewater variance report noted that staff prepared an action plan to cut expenditures in 2010.
- curtailing discretionary expenditures — use of overtime, casual/part time and relief staffing
- detailed review of budget to more accurately align resources
- preparing detailed monthly variance reports (internally) and quarterly variance reporting for council
- review of all internal allocations of costs within and across departments
- analysis of major operating contracts
- preparation of the water financial plan
- major adjustment to budgeted consumption
