The city's finance committee will receive an update on the 2020 budget next week – and things are not looking good.
A combination of rising costs and funding cuts from upper levels of government means as much as $6 million in savings has to be found in order to keep the property tax increase at no more than 3.5 per cent.
At their meeting in May, the committee directed finance staff to come back with a proposed 2020 budget that maintains existing services, maintains infrastructure and gives councillors options for approving a budget with increases ranging from 2.5 per cent to 4.5 per cent.
The current draft budget, however, has an increase pegged at 5.6 per cent, and that was before the impact of provincial downloading was factored in.
“With changes in funding from other sources, such as the provincial government, and increased costs passed on to the municipality from third parties, such as employee benefits, maintaining existing service levels will be extremely challenging while also adhering to the 3.5 per cent guideline,” says a report headed to finance Sept. 17.
A recent collective agreement signed with city employees is also adding new costs to the city budget, the report said.
Department heads recently met and made adjustments to the draft budget, the report said, but those adjustments are at high risk of not working out.
For example, budget estimates for full-time firefighters overtime costs could be kept at 2019 levels, but “it is highly likely overtime costs will exceed budgeted amounts.”
The city is estimating the province will cut five per cent of its funding, but that could be reduced to two per cent, although that's a guess and likely the cut will be deeper. In capital projects, construction costs are rising by 6.7 per cent a year, but the city could budget for just a two per cent increase for projects further down the road.
So far, provincial funding cuts will total $2.3 million in 2020, representing 0.8 per cent on the property tax levy. But transfers for social services, land ambulances, police, the health unit and the Conservation Sudbury have not been announced.
Other budget pressures include $830,000 more for snow removal and maintenance, after the budget was exceeded for consecutive years, employee benefits costs rising $1.1 million, WSIB costs are increasing by $550,000 and the city's ageing fleet of vehicles routinely cost more to maintain and replace than budgeted.