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Council will have to make some tough decisions for the 2020-2021 budget

Elected officials have to stop avoiding making politically unpopular decisions, says Ward 4 Coun. Geoff McCausland
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The city is facing a $16-million shortfall in their 2021 budget and that money will have to be recovered somewhere if the planned 3.9-per-cent tax increase is to be maintained.

Greater Sudbury's finance and administration committee met on Oct. 20 and after some lengthy discussion, established a framework for staff to return with a number of business cases and reports that will shape the direction of the 2021 budget.

While the 2021 budget is still in the fairly early stages, and some tough decisions are on the horizon for city council, the committee heard Tuesday that there was some positive news in this year's budget variance report.

Thanks in large part to more than $12 million that will be received through the province's Safe Restart Funding Agreement, the city is projecting a $3.9-million surplus for the end of 2020.

The city's manager of financial planning and budgeting, Steve Facey, provided the most recent budget variance report on Tuesday night, lending credit to council's decisions over the course of the pandemic, along with the provincial funding for the positive year-end financial outlook.

"Due to decisions made by council, the organization has been able to mitigate a large portion of the potential year-end deficit," said Facey. 

In August, the finance and administration committee was presented a $6.2-million deficit, but thanks to the Safe Restart funding the city will now be able to contribute $3.9 million to offset 2021 budget pressures.

"A lot of thanks has to go to our executive leadership team for identifying the challenges and identifying ways of responding to adapt our budget throughout COVID," said Mayor Brian Bigger.

"We actually had a plan to avoid a deficit, to break even, and whether it was the use of the $5.2 million (from the Capital Holding Account), the $4.1 million from the capital levy, any of those amounts have not been touched, and so staff have chosen to apply the funding that we got from the province. However, any of those options to reduce or offset the operating costs and expenditures from this year are still available to council."

During Tuesday's budget discussions, Ward 11 Coun. Bill Leduc questioned whether the city would be receiving any further COVID-19 relief funding and if that could be applied to the 2021 budget.

"I'm assuming we've already applied to seniors levels of government for additional funding for our municipality for 2021 to alleviate COVID pressures. Is there a dollar amount tied to that at this point?" said Leduc.

City CAO Ed Archer explained that Ontario Big City Mayors has passed a resolution to call on senior levels of government to provide additional operating support to municipalities, though that isn't something that Greater Sudbury should be banking on to hit their budget target for next year.

"No specific amount was identified and whether or not that will produce additional funding remains to be seen," said Archer. "My advice tonight would be not to rely on that for the purposes of finalizing our 2021 budget, but that is an active discussion among Big City Mayors."

Despite the $3.9-million surplus that will go into the city's capital reserve, it was made clear on Tuesday that the city is underfunded in terms of funding for capital expenditures.

Ward 4 Coun. Geoff McCausland asked whether the city would look at changing the way that they budget and properly accounting for the true cost of operations with capital factored into the equation.

"When I look at the major issues that we face today, they're often the results of past councils avoiding those politically difficult decisions, and instead defunding their capital programs," said McCausland.

"We've already used all of our cancelled capital, our capital levy funds and other capital dollars to offset today's costs. We must understand that we are simply pushing our budget problem down the road and compromising the future of our city. We would simply be trading our budget deficit today for more infrastructure deficit; I believe that Sudburians are tired of that trend, tired of seeing the poor state of much of our city's roads and infrastructure."

The city's executive director of finance Ed Stankiewicz was blunt in his response, stating that Sudbury's capital account is "woefully underfunded".

"As you know, we have a $3.1-billion requirement in the next 10 years so we need an infusion of cash."

Council has directed Stankiewicz and the finance department staff to develop a business case for rationalizing facilities to improve utilization levels, or in simple terms, finding what facilities are making money for the city and what facilities are losing money. 

This direction garnered some thoughtful discussion from councillors, with Ward 5 Coun. Robert Kirwan giving the thumbs up on the city taking a deeper dive into how to best use their facilities.

"I think if we're discovering one thing, especially with our aging community, the fact we have 40,000 people in Sudbury who are over the age of 60 and we're trying to promote active transportation, people are going to have to be utilizing facilities that are within walking distance and cycling distance more than trying to centralize," said Kirwan.

"As long as rationalization means if there's something we can use this facility for, then let's do it. It could be totally different (use) than what it was built for 40 years ago. I think there's a way of using these facilities differently in the future and once we get rid of these facilities, they're gone, so at this point I like the idea that staff is hearing that rationalization doesn't mean what can we get rid of."

Ward 12 Coun. Joscelyne Landry-Altmann raised an eyebrow to the direction to have staff prepare a business case on rationalizing facilities, given that city council never reached the final stage of their core services review, which was intended to give council a in-depth look at how their facilities are performing.

"As I'm listening to this ongoing conversation, one of the things we've never discussed fully is the core (services) review. It's been passed along from one agenda to another, but there's never been an in-depth discussion about the review," said Landry-Altmann.

"We seem to refer to it as a resource and yet we've never expanded on what exactly the recommendations are. I would like that to be used as a backdrop to the recommendations of the business cases, so that when we go through the documentation that we will get, I would like to see that this is what was referenced and this is why."

Navigating the 2021 budget will come with its own unique challenges, as there is no definitive timeline on how long the city will be dealing with their COVID-19 response efforts.

"I think the balance that is interesting to navigate in discussions like this as far as what service levels will look like in 2021 involves several variables and they're absolutely difficult to anticipate with a high degree of certainty," said Ed Archer.

"Among the variables we're thinking about is the degree to which predictions of the duration of the COVID response requirements and their applicability beyond 2021 affect our plans."

Kirwan made note that he didn't see in any reports any type of indication that the city would be looking at staff hiring freezes.

"I'm not looking at cutbacks, but just not hiring," said Kirwan. "I'm assuming that when you're putting together the budget, there are a lot of things that may not be in this report that may actually come into play when the finance department actually puts this together to try to hit that 3.9-per-cent target. Do I assume that there's things like possibly holding off on replacing attrition wherever possible?"

Archer explained that in these early stages of budget discussion, staff are looking to council to provide feedback with respect to their priorities and areas where they would like to see some closer analysis to inform their judgement with respect to the 2021 budget.

"We meanwhile are reviewing work plans and evaluating where either there's been adjusted service levels, whether we should be putting advice together for you to sustain those adjustments in order to meet the objective of producing a balanced budget," said Archer.

"The ideas described in tonight's report do not close the gap fully. Among the details that we'll consider is a review of the positions that are currently vacant as a result of salary gapping decisions that were taken by council earlier this year as a cost containment measure. There are a number of positions that remain unfilled in favour of saving the salary and benefit dollars; those have service impacts, so where we can identify potential to sustain those positions as vacant for 2021 we would identify them as business cases for council's consideration."


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