Nov. 5 will be the first formal chance for Council to provide “first draft” direction to Finance Director Brian McKay (pictured) and his staff on any substantive chances ahead of a Dec. 11 budget deliberation day. In between those two dates is a Nov. 19 deliberation on grants.
In a preview of the draft budget presented to media on Friday, McKay suggested the draft provided to Council is one that’s consistent with a “no new debt,” with the budget plan consistent with Counci’s “fiscal fitness” plan that it has been holding to for several years now.
Indeed, rather than being warned in the past over its debt load by the province, has since opted out of the expensive credit rating process, arguing that it has no intention of borrowing funds.
Rather, the city now deliberately and consistently is setting aside reserve funds that it “lends” to itself in order to handle various capital projects or when key budget items—like snow removal—go over.
This year’s proposed increases, again subject to Council deliberations, includes a projected $850,000 (or 1.47%) write-off that the city expects to have from appeals as it enters the first year of a four-year appraisal cycle.
There’s also the $450,000 the city will lose next year in slots funding (another 0.78%).
The city is also paying $243,362 more for waste collection, amounting to a 0.42% increase in the city’s budget) as well as $196,943 for recycling (0.34% of the total).
All these items are what some might call non-discretionary spending or adjustments in the case of lower appraisals and the absence of gaming revenue.
But the biggest overall chunk comes from the city’s contribution to the Ontario Municipal Employees Retirement System (OMERS), $469,156 more in 2013, plus non-statutory benefits of $221,357 and statutory benefits of $73,620.
As McKay notes, the city is paying less for the interest on debt it incurred in previous years. In essence, each year going forward more of the payments are going to pay down principal, reducing gradually the amount the city owes. By the end of 2012, that will amount to $37 million, an ongoing reduction of about $6-7 million a year.