St. John’s city council voted 8-3 on Monday night for the 2018 municipal budget, which contains no tax increases for residents of the city.
Expenses and revenues will remain about the same at just over $294 million for the next year, the last in the city’s three-year budget cycle.
Mill rates will remain the same in 2018 — 7.3 for residential properties, and 24.7 for commercial.
Finance head Coun. Dave Lane says the budget seeks to maintain spending levels for the next year, as the city braces for what could be a substantial drop in property values, which could lead to an increase in the mill rate for 2019.
“The challenges we see ahead of us for the 2019-2021 three-year budget cycle primarily has to do with assessed values of homes. With the economy, those values seem to be going down,” said Lane.
For example, should assessed home values drop by 5 per cent, there could be a $7-million to $9-million revenue shortfall that may fall to taxpayers to make up, he said.
“Either we find $7- to $9-million in cuts — which we had a lot of trouble doing, but we did hit almost $14 million last year — then we’re probably going to have to increase taxes,” said Lane.
As part of the budget announcement, the city will explore options for a municipal auditor general.
A panel will be selected in the coming weeks to determine what options are before the city. Right now, the city has an internal auditor who acts at the will of council to determine when and where to look. The goal for a municipal auditor general will be to have an independent person in place for reviews.
Council would have to pass a bylaw to determine the exact scope of the municipal auditor and how much room he or she would have to work free of council direction.
The city is increasing its subsidy to St. John’s Sports and Entertainment by $180,000 to operate Mile One Centre and the St. John’s Convention Centre, bringing the total annual subsidy to $2.67 million.
The increase is more or less an adjustment for staffing needs at the two centres and doesn’t represent wholly new initiatives.
The business vacancy allowance, which was originally planned to be scrapped in 2018, will remain in place after outcry from the business community.
There were no changes to the amount of grants and subsidies the city gives to arts organizations.
The city found $13.2 million in savings through a program review throughout the year. The money will be split, with $5.85 million being paid to the city’s pension plan, and the rest put into a contingency fund for the city.
City staff estimate the payment will reduce future interest payments on the pension plan by $467,000 annually.
The capital-spending budget has been reduced by $5.1 million, to just over $20 million in 2018. That spending target is consistent with what was set out in the initial three-year budget cycle.
Spending on snowclearing and garbage pickup will increase by $609,227 and $365,786, respectively. The increases are a reflection of more services needed for residents in Kenmount Terrace, Southlands, and Galway, rather than increased service throughout the city.
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