Budget 2019-2021 Blog Post #1 Context and Choices
This is the first of several blog posts I’ll share as part of the budget process over the next several months.
We are planning for St. John’s next three-year budget in a time of significant change in the economy and shifting demographics. As well, several factors are increasing the City’s operating costs from increases in electricity, fire protection, and debt servicing charges, to name a few.
The City has been working aggressively to find ways to operate more efficiently (from program review in 2016 to the current continuous improvement efforts) and as a Council, we are committed to keeping our human resources costs under control, to aggressively address the problem of rising power rates and to focus on stability through partnerships with community and government organizations.
Unfortunately, with the slowing of the economy and the expected reduction in assessed property values for 2019, to balance the budget (which we are required to do by provincial law), with no decrease in services, the City is projecting residential and commercial mill rate increases. The details on the projected increase are here.
My role as a City Councillor has multiple dimensions: to ensure our City as a place and the City government as an organization is on a path that is great for residents in the short and long-term; is built and operates in a sustainable and effective way; has a strengthening democracy; that it reacts to the needs and hopes for the present and future of our residents; is a strong base for economic growth, and is financially stable and efficient.
When approaching Budget 2019-2021 my approach has been to ensure that our spending is in a manner that reflects my understanding and interpretation of the goals of our City and my role as a Councillor. That means providing scrutiny to every dollar in the budget so that we can ensure it is spent to maximize the aim for a strong, sustainable community, democracy, and economy while being as efficient as possible in that spending.
My approach has been and will continue to be:
To understand the nitty gritty of the budget.
Ask questions and consider whether each program is the right one to achieve results for the people of St. John’s, now and in the short and long-term future.
Consider whether the spending, tax and fee amounts are the right amount, too much, or too little.
To understand the pressures driving up costs in our City.
My goals are:
To shift priorities to ensure our City spending achieves the goals set out by our residents and by Council.
To advocate for the changes I committed to when I ran, and those I believe are important for the residents of Ward 4.
To minimize potential increases in taxation.
To make and advocate for changes so that those (residents and businesses) who need breaks, get breaks.
BUDGET CONTEXT AND CHOICES
There are pressures that are driving up costs to the City. Some are those due to the increasing cost of operating: legal costs rising, electricity price increases. Unfortunately, some of these are completely, or partially out of our control.
Some cost pressures are demands that residents have made in the past that the previous and current Council has responded to such as the need for community centres and affordable recreation, which led to the opening of the Paul Reynolds Community Centre and the construction of the Kenmount Terrace Community Park. The expectations of residents are increasing, and with increased service, unfortunately sometimes come increased costs.
Some are needs that the City administration has identified to ensure orderly and effective corporate operations. As a council, we need to decide which of these are compelling and necessary.
Two potential sources of revenue have been looked at closely in 2018: the tax discount currently offered for unserviced lots and the lost revenue from the commercial property vacancy allowance.
Currently, commercial property owners receive a discount on their taxes that amounts, in today’s market, to $5.5M in lost revenue. Council announced in 2016 that it was going to discontinue that allowance, but in consultation with the business community, a decision was made to maintain the allowance while the City and a Business Roundtable worked on ways to reduce the lost revenue without making it overly burdensome on property owners who were struggling with vacancies in this weaker economic climate. Commercial mill rates could also increase as part of the 2019-2021 projections. We do not believe it will help either the economy or people living and working in St. Johns to discontinue the vacancy allowance. We think it is best to maintain the allowance for now and work with the business community on filling vacant properties.
Discount for Unserviced Lots
As to the potential loss of revenue from the discount currently offered to residents living on unserviced lots (those that don’t get water and/or sewer services), we engaged with this community and listened to their concerns and we do not feel that repealing the discount is fair or appropriate at this time. The discount will stay in place.
Budget Mitigating Factors / Actions Taken
There are actions that have been taken and decisions made to mitigate against budgetary increases.
We don’t have assumed inflationary increases. In some governments, and in the past at St. John’s City Hall, some aspects of the budget has been assumed to increase due to inflation each year. This is no longer assumed (nor should it ever be) and each budget request has to be strongly justified.
We have announced a freeze on general salary increase for all management employees. Union negotiations will resume in 2019.
We have eliminated management car allowances and overtime, saving ~$500,000 annually.
The 2014 contract with City employees will in the long term eliminate the pension debt burden and a 2016 program review resulted in a labour force reduction and over $13 million in savings annually.
We have reduced costs of phones by 43%.
This year, a continuous improvement initiative was started to reduce waste and improve service delivery.
Metrobus/GoBus Review: public transportation is an essential public service, supporting 3 million rides throughout the City each year. However, improvement is needed to significantly improve ridership so that the cost of delivering this service is lower. We are completing a comprehensive review, and Councillors Lane, Collins and I are digging deep to strengthen the organization, drive for efficiencies and make this a service that works better for the City.
Additional processes have been put in place at the management level to better manage spending and add scrutiny to spending considerations as the year proceeds.
We have added additional transparency at the Council level with extra budget transparency on tenders, and the line item budget shared publicly, which is the most detail ever shared.
Changes to Public Works:
Yard Waste. The program to collect yard waste at curb side is saving the City money because this compostable waste is no longer being added to the landfill, which is expensive and has a fixed lifespan.
Automated Garbage Collection: this program is increasing the efficiency of this program and should lead to a reduction in the amount of garbage we put in the landfill. This leads to lower cost services.
We have been creative in our approach to make improvements to sidewalk snow clearing:
shifted our staff from operating from 8am-4pm to operating from 4 am to 2 pm to allow for clearing to happen in the lead up to when most people are travelling to get to work in the morning.
shifted our night shift to the weekend to allow for clearing to happen closer in time to when the snow falls, enabling us to stay on top of snow falls more productively.
Changed the sidewalk snow clearing priority of 6 km of sidewalks on one side (on streets where both sides of the street were being cleared) to allow for greater efficiency to clear the higher priority routes.
We have also subcontracted an additional 11 km of sidewalk snow clearing of our current routes (in addition to what is subcontracted for the downtown) and have done so within our current budget. This means our existing staff and vehicles will clear 11 km less sidewalks, which means that we’ll have the remaining cleared sooner.
It’s necessary that the above list of actions taken be only the beginning. We now need to consider what we hold as most important.
There are many decisions under consideration right now that guide the City: the development regulations are under review, the municipal plan, a new strategic plan for the City, and the one most pertinent in this post, the 2019-2021 budget. For the budget, and these other pieces we have lots of work to do including answering these questions:
What services should be maintained, improved, or eliminated? Are there ways to make improvements to important services that don’t cost more money? If we are going to maintain current tax levels, what do we need to change, adapt or cut back, to meet this goal?
We have a challenge on our hands and we need your help figuring it out.
The City has mailed a brochure to every household to explain the challenge and begin the discussion on the budget challenge and choices. You can read the brochure here.
There are lots of budget related resources online:
And, a very in-depth budget document here:
The budget at that link is for 2018, but it gives you all of the details.
Please be in touch with your ideas.
I am reachable at firstname.lastname@example.org, 576-8217, and if you want, I’ll sit down with anyone who wants to meet to discuss the budget. I want to hear from you.
You can also submit submit comments here: https://www.engagestjohns.ca/budget-2019-2021
The in-person engagement sessions are:
Wednesday, Oct. 10 - Southlands Community Centre, 40 Teakwood Drive
Thursday, Oct. 11 - St. John's Community Market, 245 Freshwater Road
Wednesday, Oct. 17 - Waterford Valley High, 465 Topsail Road
Thursday Oct. 18 - Paul Reynolds Community Centre, 34 Carrick Drive
Tuesday, Oct. 30 - City Hall, Foran/Greene Room, 10 New Gower Street
I am planning to attend each of the sessions, so I look forward to discussing this with you. This is a shared challenge, and I look forward to working with you on it.