Deficit looms

Alisha Morrissey
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City will have to balance $5-M shortfall in budget

Derek Sullivan. — Telegram file photo by James McLeod/The Telegram

This year’s budget numbers are almost tallied and it looks like St. John’s city council will have  to juggle to balance a $5-million deficit.

After Monday night’s regular council meeting, Bob Bishop, the city’s director of finance, gave a brief update on the city’s finances and outlined the numbers.

He said all the department heads have reviewed their budgets and needs, and council has also reviewed the numbers.

Bishop said department re-quests totalled $224 million — up $18.3 million from 2010 — with revenues totalling $219 million.

The greatest increases came from the public works department at $4.8 million, with salaries and benefits for all city employees making up the biggest single increase of more than $7.5 million.

Those numbers are expected to rise again in 2012.

Bishop said council will have to decide between cutting services and raising taxes.

After the review, Bishop pointed to hard times for the city in 1995 when property values dropped dramatically, as did the corresponding tax levels.

Things like hours of service for park patrols and snowclearing were sacrificed, Bishop said.

“Council has to look at their priorities. There are a lot of services — I don’t want to guess what council is going to do — but there are a lot of services provided that are not infrastructure-based,” Bishop said, meaning there are things to be cut from the bottom of the list that don’t have anything to do with previously paid for machinery or technology.

“Council makes its decisions and all I can do is advise them,” he says, refusing to talk about the advice he offers in private meetings. 

“The numbers are stark and we need to take action now to control our spending or we will face even more difficult budgets in the future.” Derek Sullivan, President of the St. John's Board of Trade

Derek Sullivan, president of the St. John’s Board of Trade, said the city simply has to rein in spending.

“Looking at another nine per cent growth again in the coming year, he said, “And that continues to be a concern for us because we believe the growth in spending needs to be to be kept more in check.

 “The numbers are stark and we need to take action now to control our spending or we will face even more difficult budgets in the future,” Sullivan said.

Several members of the board of trade attended the council meeting specifically for Bishop’s annual state of the budget address.

Sullivan said residents and businesses in the city have had their taxes doubled in the last few years and he can’t recommend tax increases as a solution to the problem.

Rather, he said, the city should look at how it delivers services and see if there aren’t efficiencies to be made.

“We took a long-term view and we’ve been advocating this position of fiscal restraint for a number of years now,” he said.

The board will provide a submission to the public consultation process Nov. 8.

Bishop also used the presentation to encourage people to come to the public consultation to have their say and offer ideas.

 The city's budget process started in July and continued through the summer with the committees of council looking at each of the line items in their budgets.

The city will officially set down the budget and mill rates Dec. 15.

Organizations: Board of Trade

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Recent comments

  • Jim
    November 02, 2010 - 14:08

    Funny - what other corporation goes into the red to give salary increases and benefits??? What a joke of a city and province. 14% unemployment, taxes through the roof and this is the best it has ever been! Man, what is going on....

  • Steve
    November 02, 2010 - 13:05

    I guess city hall has to decide if they want the view of the harbour blocked by a mountain of debt or by buildings that put tax dollars into the coffers. Maybe there should be a referendum on the issue of whether people mind tall buildings in our downtown but then again who would pay for the referendum. I don't know why the view is such an issue as anyone who lives past Lemerchant Road can't see the narrows anyway. It would be nice to know where each councillor stands on this issue before the next election rolls around. But wait, i'm sure that they will miraculously balance the budget by then and the issue will be forgotten about just in time. What a bunch of clowns.

    • Cole
      November 02, 2010 - 15:40

      My heart truly breaks for St. John's! With all that oil revenue coming into provincial coffers, an overwhelming majority of the economic spinoff allocated to St. John's and an embarrassing premier who refuses to "spread the love" anywhere outside of St. John's or Corner Brook....I could care less....

  • Hughie59
    November 02, 2010 - 13:04

    Scrap the Heritage committe is one thing and let us get on with good tax paying prodjects,People who oppose glass houses must be afraid of stones.

  • stop the insanity
    November 02, 2010 - 12:07

    I fully expect Doc to throw out the amalgamation red herring yet again in order to deflect from the problems created by the sitting and previous councils in the city. The city simply must reign in spending and provide basic services only. Donating funds to various organizations, taking over responsibility for roads that are a provincial responsibility, turning down commercial developement and wasting money on frills is not acceptable. To those of you who wanted sidewalks cleared in winter at any cost, and a recycling program at any cost, can now see that there definately is a cost and you best be prepared to pay it, this news story is your notice that taxes will be goping up in the near future.

  • joe mcgrath
    November 02, 2010 - 12:00

    We have far to many councillors to begin with. The salaries of city councillors,its management and most of the employees is far to high. Additional benefits ,like health care coverage for certain items eg life style classes is crazy and we the tax payers are footing the bill. We should beg Ron Ellsworth and a few like Sullivan to run and set things in order. The flower power heritage group led by Ms Duff have gone stir crazy with projects turned down because shacks are considered executive suites and land that should be developed is frozen for certain developments. Ms.O'Leary the artist in residence in council chambers rants about culture. Cut ther salaries,cut their perks and cut their benefits. Why do we the taxpayers continue to elect this crowd of toads???

  • Rob
    November 02, 2010 - 11:52

    Just wait until these dummies say there is a water shortage. LOL. People of St. John's you are the real dummies for electing these clowns. The economy is supposed to be booming on the Avalon so maybe just maybe there is a misappropriation of funds here. Just maybe though (sarcasm)

  • Mt. Pearl 4 Life
    November 02, 2010 - 11:40

    The people in St. John's want Paradise and Mt. Pearl to amalgamate into this mess of a city? You've got to be on some of them drugs the RNC keeps busting! The only way Mt. Pearl would amalgamate with St. John's is if they had some half-breed like the Doc in the mayors chair. Randy Simms is not and idiot!

    • Lost4words
      November 02, 2010 - 13:36

      Wow, who setup that projector! Glad Im not a resident of St. John's with that brain power holding the purse strings!

  • Jordan
    November 02, 2010 - 10:50

    It's too bad we can't get a candidate like Derek Sullivan to for mayor. While I think the mayor's salary is sufficient it may be worth increasing to try and get someone like him to run.

  • Randy
    November 02, 2010 - 10:40

    My Taxes have doubled over the past 2 assessments. If my taxes go up I will move out of St. John's and into Paradise. Our street does not even have a sidewalk. My garbage is collected once a week and our street is one off the last to be cleared of snow. Come on DOC and govern our great City or maybe Mr. Wells will come back.

  • Brad
    November 02, 2010 - 10:06

    Enjoy the dirty, antiquated excuse for a city you call St.John's with its hippy councillors that you vote in over and over, but always complain about. Why does downtown need to look like it did in the 1700's when all that was there were brothels and beer parlours. Without new development there are no new tax bases, even Andy knew this.

  • political watchdog
    November 02, 2010 - 08:49

    Maybe the mayor can appeal to the good people of Haiti for a donation; surely they can reciprocate in time of need. Don't jump on my suggestion here; its not meant to make light of the plight of the people of Haiti, but to simply draw attention to yet another moronic decision by this council. Its not the council's place to make charitable donations to that cause or any other when it is dependant on taxpayers to foot the bill. Charity begins and ends at home. If there's surplus funds in the capitol city's coffers, spread it out among the storm torn municipalities in this province.

  • John Smith
    November 02, 2010 - 08:14

    The boobs down at city hall are driving this place into the ground.They didn't support the Fortis building, they denied the development on signal hill, and on old petty hr. rd. Yet they bring in recycling, and take junketts all over the place. The stink comming from the landfill is awful, and the sewage plant is still broken down. Yes, that's quite a coucil we have here. The next thing now is a hefty tax increase to pay for all their mistakes. Oh, and let's not forget the decision to pay 10 million for the Woolworth's redevelopment downtown. Man, these guys haven't got a clue what they are doing.

  • Bob
    November 02, 2010 - 07:37

    This just in....St. John's is already over their snowclearing budget for 2010-2011. I can hear Doc now....the solution is amalgamation....Its all Mt. Pearls fault.

    • Gerry Wells
      November 02, 2010 - 12:22

      I said it before and I'll say it again. When Andy Wells left the mayors chair they started spending like drunken sailors. When Ellsworth was defeated , both he and Tom Hann were the only voices of fiscal reason on that council, now only Hann remains. Very interesting to see the "focus" groups on council....Shannie and the long haired heritage crowd who want no developemnet ie no tax base....then there are the real estate crowd who have their own interests at heart. Interesting how the condo/housing developement on Portugal Cove road that was defeated is now on again after the road was reconfigured.....I guess its only coincidence that Councillor Colbourne is one of the Real Estate agents for this developement. Lets look at snow clearing ...not bad during the week .......but try to get out of your driveway on a weekend and you may get run over by a plow....they seem to clean the street twice an hour....they must work twice as hard on overtime.Hosing developements going up everywhere, hundreds of new homes with the developers intalling infrastructure...all council has to do is haul in the tax and still they cant balence a budget. Let council do what the taxpayers want them to do ,run the city. That does not include being philanthopists for the arts commmunity, giving donations to relief efforts ( we can do this with our own money) We have a city that looks and smells like a dump or a sewer which ever end you are on. Cant wait to retire so I can move around the bay. When are the elections??? Where is Ron Ellsworth..please Mr. Ellsworth give us another chance I will campaign for you free of charge to get rid of this geriactric crowd.

  • Starr
    November 02, 2010 - 07:19

    The City simply CANNOT raise taxes!! The backs of the people can only bear so much and we are taxed to oblivion as it is.

  • Mike
    November 02, 2010 - 07:03

    "Bishop said council will have to decide between cutting services and raising taxes." What services?? We have none to cut! This council needs to take an accounting course...there is no need a city that is growing as fast as St. John's, should have a deficit. The property values and taxes have skyrocketed, development is bringing in millions to the city that it never had 4 or 5 years ago....just stop wasting money! Look at the who George St. plan as one much was spent on that "study" and nothing ever did come of it.