Help St. John’s Build Budget 2017

Speak now or forever hold your tongue: take advantage of this opportunity to help shape budget 2017.

In December of 2015, the City of St. John’s released its budget for 2016, and it was met with much backlash, particularly over dramatically increased property taxes. As council gears up to craft Budget 2017, they’re asking for the input from the community – so we can be outspoken before, not just after, the budget is set in stone.

Jonathan Galgay, the chairman of the city’s standing committee on finance and administration is saying “You want us to show you that we are aware of how this budget impacts you, personally. You want us to be smart with your tax dollars. We have heard this message. We are listening, and we will continue to listen, and we invite you to tell us what you would like to see addressed in Budget 2017.”

Where Can You Weigh In?

You can share your two cents, and read the input of others in your community here: http://engagestjohns.ca/Budget-2017.

People have already begun sharing thoughts like Jon Duke’s, “The City should focus on efficiency in its internal operations. It must bring total compensation of staff in line with like sized municipalities across the country and also within the context of provincial employers. That’s my top ask. Behind that is continuing to make St. John’s a more livable city for all residents and all neighbourhoods. I think we are making good progress here, but as always there is more to do.”

Where DOES the City Earn All Its Money?

revenue

What Are the City’s Expenditures?

expenditure

Budget 2017 Will Be Program/Service Level-Oriented

What does that mean? Basically: the budget will focus on the delivery of services. The City is in the midst of a Departmental Program Review where every program and service — from St. John’s Sports and Entertainment to the Metrobus — are being analyzed “to determine which programs and services should remain and in what form, given current fiscal restraint.” They’ve so far found $1.7 Million in savings. Here are council’s targets for 2017:

1. Subject to finding sufficient expenditure reductions through Departmental Program Review, residential property tax rates may be reduced by between 0.3 mils to 0.5 mils. This reduction of between 3.8% and 6.4% on property tax would also apply to commercial properties. To enact this, “we need to find expenditure reductions of between $6.6 million and $11 million.”

2. Improvements and changes identified during the Departmental Program Review will be made immediately. A review committee is evaluating the city’s services to be sure they’re fiscally sound, asking questions about each department, like: Why is this being done? Could this be done better? Have alternative strategies for providing this service been examined? Are other service providers (private, non-profit, etc.) providing the service more efficiently than the City of St. John’s? What would happen to performance if funding were to increase or decrease? So far they project savings of 1.7 million.

3. No expenditure increases will be accepted, AND, Staffing must be maintained at or below 2016 levels.

4. Subject to finding sufficient expenditure reductions through Departmental Program Review, we would increase the capital out of revenue funding available by 10% to 20%, which is the equivalent of $2.6 million to $5.2 million. This funding for 2017 is currently projected to be $26.7M with approximately $15.7 of this dedicated to specific projects. This leaves $11M to be allocated as part of the upcoming budget process.

5. Water taxes from both residential and commercial users are set to rise by 6.3% and total $56.7M, an increase of $2.8M over 2016. Unlike property tax, water tax is dedicated solely to the provision of clean drinking water and treatment of wastewater.

6. We will direct staff to seek to reduce debt charges if possible, understanding that our targeted mil rate reductions may push the debt service target higher, to approximately 13.5%, and this has consequences for our operating budget. Operating Budget 2017 will see an increase in debt charges because the City only has to make one payment in 2016 for money borrowed in the first half of this year, but we will have to make two payments in 2017. The charges are estimated at $4.2 million and are for capital works carried out by the City and funded either largely by the City or on the basis of cost-shared programs with either the provincial and/or federal governments or the City’s regional partners. We will carefully review infrastructure requirements and capital borrowing in order to meet the infrastructure construction program identified in the 10 Year Capital Plan. In order to spend what we need to address our infrastructure – a reduction in spending on programs and services may be required.  This then allows us the fiscal capacity to fund the related debt charges used to pay for cost shared capital works projects.

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