Province to cut transfers to city by $3M in 2015

As expected, the city will receive about $3 million less in transfer payments from the province next year than it received in 2014.

Lorella Hayes, the city's chief financial officer, told councillors this week that further cuts of about $2.9 million are forecast for the next two years after that.

The cuts to the Ontario Municipal Partnership Fund, as it's formally known, were announced in 2012, under a new formula that gives more money to cities with struggling economies, and less to places that are doing relatively well.

The revamped funding formula was part of plans to reduce the fund by $25 million a year until 2016, when it would total $500 million. In total, the city will receive $28.5 million from the fund in 2015.

Councillors also voted to direct staff to come up with budget options on ways to fulfill Mayor Brian Bigger's campaign promise to freeze taxes next year, while not cutting services or laying off staff.

“Staff is in the best position to say what areas we can best find those savings,” Bigger said.

While the report is due in February, the first budget meeting is scheduled for Jan 13. Traditionally, community groups and individuals come with funding requests at that first meeting. The requests are added to a budget list, and are voted on by council according to priority and how much of a tax increase councillors are willing to approve.

But with cuts from the province and the tax-freeze promise, some on council wondered whether they could realistically consider the proposals.

“I'm just wondering about the process,” Ward 4 Coun. Evelyn Dutrisac said. “We are saying no increase (in taxes), but are we telling people how much they can ask for?”

She wondered whether they should have the public meeting first before directing staff to prepare the report.

But Bigger said the staff report will give them an idea what areas in the budget they can focus on to achieve the freeze. With the New Year just weeks away, he said they had to get started as soon as possible.

“We have a very tight budget timeline,” he said.

Ward 5 Coun. Bob Kirwan said councillors would be facing a huge challenge to keep the tax freeze promise, while still seriously considering added budget proposals from the public.

“I'm glad we wished them Merry Christmas before we passed this motion,” Kirwan quipped.