One of the more difficult budgets in recent memory inched forward Thursday evening, as city councillors managed to wrestle the 2020 budget increase down to 3.2 per cent, but with big decisions still ahead.
The biggest single move yesterday evening at Tom Davies Square was a decision to delay setting aside some of the money earmarked to repay the costs of the big projects: the art gallery, library and convention centre downtown, and the arena on The Kingsway.
Mayor Brian Bigger introduced the plan, which is similar to his proposal to ask Greater Sudbury Police to take $500,000 out of their budget, money being set aside to pay the mortgage on a new headquarters.
In this case, Bigger said delays in getting the projects off the ground due to legal challenges means the arena is no longer scheduled to open in 2021, but 2023.
The other projects, which were to be built where the current arena sits, were delayed as staff looked for another location because of fears they would be held up much long, pending the result of the Kingsway Entertainment District battle.
That means the city's mortgage payments for the projects will begin later than expected. The mayor moved a motion to take advantage of the delay and reduce funds being set aside for those payments by $1 million until next year, when the projects are likely to be closer to construction.
“In no way will it impact services, delay the projects or affect anyone’s job,” Bigger said, but holding off on the payment eases the budget pressures city council is facing this year.
The mayor's motion passed easily and the proposed tax hike now sits at 3.2 per cent.
Ward 1 Coun. Mark Signoretti, who was successful Wednesday with his plan to change the financing of new snowplows – allowing the city to buy two more than planned, while freeing up $1 million in capital funds – was less successful with Thursday.
Signoretti wanted to direct staff to go take another look in their departments to find five per cent savings without affecting any jobs or services.
If the mayor can find $1 million, he said staff can find more ways to save money, too.
“I like to think each department can go back and find savings,” he said. “I want us to be as lean as we can be (and) I’m not saying it has to be five per cent. Any savings.”
Five per cent represents $14.3 million, Signoretti was told. When asked whether this was a goal staff could realize within the next week or so, and make further cuts without job losses or service cuts, CAO Ed Archer replied “no,” although adding he and city staff would “follow the committee’s direction.”
Archer said budget planning began in earnest in the spring, and as part of the process staff spent six weeks doing exactly what Signoretti was asking – a line-by-line review of their budgets.
Each director had to outline savings, and say where they could take a chance in budget estimates to bring costs down.
The city was already trying to close a $7 million budget deficit from 2019, Archer said, and keep tax increases at no more than 3.5 per cent while not cutting staff or services.
Even that number comes with risk, he said, as staff made budget estimates that are riskier in hopes of keeping costs down.
“And if we are wrong in those estimates, there is a negative financial consequence,” Archer said. “The risk would be higher than you would like, the service level would be at risk.”
Ward 9 Coun. Deb McIntosh pointed out that most of the tax increase is a result of outside boards grappling with provincial budget cuts trickling down to local taxpayers.
Just 1.6 per cent of the original 3.5 per cent tax increase is from the city side of the ledger, she said, an increase lower than the rate of inflation.
“The majority of the 3.5 (per cent) comes from changes in provincial funding,” McIntosh said.
She wondered how you can save another five per cent without layoffs, since “most of the operating budget is staff and people.”
Ward 5 Coun. Bob Kirwan said no one like tax increases, but the city has a duty to ensure seniors and other vulnerable groups have access to services.
“A 3.5 per cent tax increase, nobody likes it, but I can’t see how we can maintain services if we cut another ($14M) and provide services to people in need,” Kirwan said. “There has to be a reasonable tax increase every year” because costs and demands for services are rising.
But Ward 3 Coun. Gerry Montpellier said he saw no reason to at least approve the motion and see what happens.
“The motion is to ask staff to do your best,” Montpellier said. “Give it a best try as you can.”
Ward 4 Coun. Geoff McCausland said it was far too late in the budget process to make such a request. Budget planning is a long-term process, he said, and the time to introduce such motions is not days before the budget is approved.
“It’s a little late,” McCausland said.
“It could have been brought up a lot earlier,” Signoretti agreed.
But he was inspired when Bigger asked police to take $500,000 out of their budget. Since they have to wait for a response from police before finalizing the budget, why not use the time to look for more ways to reduce the budget.
“Any savings would be savings.”
But Bigger said what Signoretti was asking for was much different than his motion. Police are being asked to delay a specific line of spending for a year, but Signoretti is asking staff to go over their budgets in detail to try and find new savings, without a specific direction of where to find it.
“(My motion) is not the same as saying there’s a huge opportunity to cut operating expenses.”
Staff have worked for 6 months to get to 3.5 per cent, he said, and they are already “getting to the bottom of the barrel.”
In the end, Signoretti's motion was defeated, with only he and Montpellier voting in favour.
Other highlights from Thursday's meeting:
- Montpellier lost a motion asking for funds to finish the Whitson River Waterway trail, although it still could come back to the finance committee. A total $800,00 was approved last year, leaving $1.1 million needed to complete the project. But that amount will be reduced since a last-minute change will see the Chelmsford trail be built using eco-friendly gravel rather than asphalt. A report on how much that will save could be ready when budget talks resume Dec. 16.
- Signoretti's motion from Wednesday on new snow plow financing freed up $1 million in capital money, and council voted Thursday to delay redeveloping the parking lot at Bell Park, saving another $600,000. But they added new sprinklers for Pioneer Manor and work to replace a collapsed garage at the Capreol Railway Museum, leaving $1.284 million available in capital funds. That money could be used to reduce the impact of a proposed 1.5 per cent special tax to fund more road and other infrastructure repairs. The special levy was rejected last year, but some on council are strongly in favour this time around. With the $1.284 million capital funds now available, the special levy would be reduced to 1.05 per cent. If approved, property taxes at this point would increase by 4.25 per cent.
Budget meetings resume Dec. 16-17, with more meetings possible for January if needed.
