The exterior of Saint John City Hall is pictured in this file photo. (Staff photo)
Saint John’s city manager presented the city’s long-term financial sustainability plan at Monday night’s council meeting.
John Collin’s report involves dozens of recommendations to close a $10-million budget shortfall by the end of the year and recommendations for long-term revenue growth to offset rising costs.
Currently, the city projects costs to grow by three per cent annually, while revenues are only expected to grow by one per cent.
“We could crack the champagne bottle on the first of January 2021, to say that we have balanced the budget,” Collin said. “And the very next day, we will begin the discussions about what we will need to cut next in order to address the further challenges we have.”
Collin referred to the long-term growth proposals as “transformational reforms,” including comprehensive property tax reform, regional cost-sharing, and regionalisation of services.
“We need these transformational reforms, so we are not in this endless cycle of cuts, followed by cuts, followed by more cuts,” Collin said.
The report cites three different transformational reforms: wage escalation control, binding arbitration reform and empowerment of cities to generate their own revenues.
Proposed Cuts And New Revenue
Half of Collin’s proposed cuts are reductions in current municipal staffing levels, including axing between seven and nine inside workers, three to six management positions, and a further $2.4 million in cuts to the fire and police departments.
The sustainability plan also includes a recommendation to axe the Saint John Transit Commission and bring Saint John Transit back under the fold of the city. In total, the cuts to transit would amount to $750,000.
Collin also recommends halving funding for regional facilities, including TD Station, the Saint John Trade and Convention Centre and the Imperial Theatre, which would reduce costs by $1.2 million, and introducing a permit for heavy vehicles to bring in an additional $1 million in revenue.
Other operating cost reductions include closing one arena ($155,000), reducing winter street maintenance ($130,000) and cutting some funding from the asphalt overlay program ($200,000).
Council will also weigh its options with Saint John Energy after receiving what Collin called an “unsolicited” bid on the utility. The bid included a three-year rate freeze, and the city manager estimates $2 million to $5 million annually would be drawn in dividends.
Other sources of new revenue include heavy vehicle permits ($1 million), fire fees for service and emergency response ($120,000), increasing the cost of on-street and monthly parking ($234,000) and charging non-residents more for monthly parking ($220,000).
‘Regional Hub’ Costs
The report also included a third-party audit on the costs of Saint John being a “regional hub” for nearby municipalities.
The audit found that the city is incurring more than $12 million annually in costs from out-of-town users, like commuters, and users of recreational facilities who don’t currently pay into the tax base.
Collin suggested two options to help recoup up to $8 million by 2022. The first, a highway toll for commuters, which the audit found could recover between $4 million and $5 million.
The second, more practical option, per the city manager, is a tax levy on nearby communities, which would recoup $6 million in 2021 and $8 million in 2022.
Under the proposed terms of the levy, homeowners in the Saint John region would pay an estimated $265 yearly on taxes in 2021 and $353 in 2022.
Mayor Don Darling said regional cooperation could position the city to achieve its goal of long-term financial sustainability.
“For the 60,000 people (living) outside of Saint John: invest one dollar a day, in coming together, so that we can thrive and grow,” he said.
“I’m a believer that when we look back five years from now, it’ll be the best dollar you’ve ever invested.”
City council moved to accept the report and will debate the item at their next meeting on May 4.
You can view the 386-page update on the city’s website.
