St. John’s forced to delay capital projects

Andrew Robinson
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Mayor says new fiscal arrangement will be achieved

St. John’s Mayor Dennis O’Keefe

Changes to the Municipal Operating Grants (MOG) system have forced the City of St. John’s to delay several capital projects, according to the chair of its finance committee.

“In our 2013 budget, we estimated a $5 to $7 million surplus from 2012,” said Coun. Danny Breen at Monday’s council meeting. “Our intention was to invest that surplus strategically into capital projects within our city and retain a small contingency for unexpected problems that may arise.”

As a result of last week’s provincial budget, the city is set to lose the $3.4 million it received annually through MOGs. That system will from now on only apply to municipalities with 11,000 residents or less.

Municipalities that exceed that number — of which there are seven in the province — will instead receive a one-time commitment of funds from the provincial government to use for capital projects. The city previously stated it will receive $8.5 million.

Among the capital projects the city intends to delay is the automated garbage collection initiative. That service is already offered in Mount Pearl. The City of St. John’s made its interest in automated garbage collection known last month during a council meeting.

The estimated cost of outfitting collection trucks and purchasing garbage carts in Phase 1 is $1.24 million. A further $3.67 million would be needed in Phase 2 for the purchase of the remaining carts required to serve residents.

By delaying capital projects, the city can transfer $3.4 million to its operating budget to make up for the loss of revenue related to MOGs.

Breen said the city still needs more details about the one-time payment from the province before it can take another look at projects that have now been delayed.

Coun. Tom Hann was blunt in offering his assessment of the provincial budget.

“With regard to the provincial budget ... I was disappointed,” he said.

“I’m not sure if the provincial government knew what kind of impact this budget would have, but I’m disappointed because sometimes the attitude of government and people in the Confederation Building is that we have lots of money. Well, we don’t.”

Immediately after Hann finished speaking, Mayor Dennis O’Keefe instructed council members to restrict their comments to the MOG formula. The mayor later added he has spoken with Municipal Affairs Minister Kevin O’Brien several times over the course of the last week about the province’s intentions of creating a new fiscal relationship with the city.

“That will proceed immediately,” said O’Keefe. “There’ll be full consultation on that issue.”

Twitter: @TeleAndrew

Geographic location: Mount Pearl

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Recent comments

  • wayne
    April 05, 2013 - 04:46

    I liked the comment about the prov govt figured the city has lots of money, how ironic, didn't we think that the prov govt had lots of money what ever, all levels of govt should spend within their means and not spend recklessly in good times only to have it come back and bite you in ass

  • Townie
    April 02, 2013 - 09:58

    I seem to remember a report earlier in the year stating that the city would loose $300,000 in taxes due to MUN buying the old Battery Hotel. Perhaps the city should have done something to prevent that from happening. Also, if they would raise property taxes slightly and enforce property maintenance (fining people when they do not comply to keep their property painted and clean) then perhaps they would be able to make a little more money.

  • Budget pipe Dreams
    April 02, 2013 - 09:07

    Maybe GlennCrest is becoming the cities very own Muskratfalls, Take or pay! That's why the people of St. Johns better be cautious and elect a good council this time round. Because when you have people running who will want to tax your grandparents coming in from around the bay for a birthday party or a x-mas dinner while I live and work here, then we have a problem with more than just parking meters. They Should do that at the Airport Too. Or Maybe some just want their names on a few new subdivisions.

  • East ender
    April 02, 2013 - 08:52

    I agree what a waste of money try using this system downtown how are you going get the trucks in between the parked cars,or will you bring in a by law no curb side parking garbage pick up,our streets are so narrow so where do we place these garbage buckets,our streets are such bad shape use the money else where.You want to save money get rid of most of your councilors let them live on their pensions that they are already receiving they are useless anyway.Stop putting statues all over town something happens they put up a monument.I,m sure we can hold the memories of a loved one a lot cheaper then what the city are doing.Save money by cleaning up the staff first,I know we need 3-4 workers to repair a pot hole

  • Turry from town
    April 02, 2013 - 07:20

    Automated garbage collection is a waste of money anyway. Five million dollars could be better spent elsewhere.I use a net over my garbage year round and it works just fine,and it is easy to roll up and store under my front deck.

    • Danny
      April 02, 2013 - 13:49

      Automated garbage pick up must be used.More then one story even here in Nfld has come to light of workers picking up the trash getting cut or jabbed by needles.It is a sad drug culture we live in with no end in sight. Save money laying off justice staff in a town where almost everyone has been affected if not personally but know of someone who has been robbed or asaulted.We now hear impaired & robbery charges never even making it to court due to layoffs.Please at least protect our workers.