City council will have to make a tough decision when 2022 budget deliberations begin on Jan. 24 – either approve a greater than six per cent tax levy increase or make budget cuts that “drastically reduce service levels.”
On Monday, city council received a pair of reports that indicate the city’s projected expenses for 2022 will rise by $8.44 million, while revenue is only projected to rise by $1.16 million. Covering that $7.3 million shortfall would require a 6.37 per cent tax levy increase.
Coun. Garth Frizzell, who chairs the city’s finance and audit committee, said with inflation this year of roughly 4.7 per cent, the city’s budget situation could have been even worse.
“I thought we’d be staring down the barrel of an eight per cent increase,” Frizzell said. “(But) staff sharpened their pencils and brought in a 6.37 per cent budget.”
At Monday’s meeting, Coun. Cori Ramsey brought forward a pair of motions to give council some options to reduce costs. She asked for city staff to prepare reports on what a $1 million reduction in the city’s RCMP budget would look like, and to bring back a report on what a budget with a 4.37 per cent tax increase would look like.
“I proposed this not as a recommendation, but as a point of information. What is the impact on the community of making that decision?” Ramsay said. “A 6.37 per cent increase to the tax levy isn’t appealing to anyone, let’s be frank.”
The city is facing a $2.4 million increase to its RCMP budget, after the federal government negotiated a contract with the RCMP’s union.
The city paid $28 million for its RCMP contract last year, Ramsay said.
“To pay more for the same service, I just don’t think it’s acceptable.”
City director of public safety Adam Davey said cutting a million dollars from the city’s RCMP budget would be the equivalent of a withdrawal of all of council’s enhancements to the downtown.”
“A million dollars would be five members less, and the superintendent would decide where that lands,” Davey said. “That wouldn’t happen all at once, it would be by attrition over time.”
City director of finance Kris Dalio added that the $2.4 million RCMP budget increase is a base budget increase, not associated with the one-time cost of retroactive pay.
Dalio said to bring back an option at a 4.37 per cent tax increase will mean cutting roughly $2 million from city services. The city already cut about $1.5 million in costs during 2020, he added.
Unless council is willing to cut service levels for snow removal or road rehabilitation, that money would have to come from the city’s smaller service areas.
“We don’t think there is anything we can do that won’t drastically reduce service levels,” Dalio said. “Two million dollars is a very large amount to absorb in the smaller areas (of city operations.).”
Coun. Terri McConnachie said council will have to make tough decisions about what the city can afford.
“It’s tough, but here we are.”
