The city is currently looking at a projected $1.36 million operating deficit, according to a preliminary 2011 budget report.
After more figures were firmed up, slight revenue and expense modifications were made to the budget draft which have shrunk the $2.19 million deficit originally predicted in a January budget report.
The way the budget looks now, the General Operating Fund would need to subsidize the Airport Operating Fund, which is intended to bring in enough revenue to fund itself. However, according to a report to council from Laura Ciarniello, the city’s corporate services manager, “the current Airport Fund is running at a deficit of $20,725 which will need to be funded. If this fund is taken from the General Operating it would be in addition to the $344,657 already included in the Airport budget from General Operating.”
Water and Sewer Funds, which are funded through the user fees applied to properties that use the services, are also intended to be self-funding meaning the revenues are enough to pay for operating costs, including debt payments. But the Water and Sewer Funds are also projected to be operating at a deficit. Ciarniello said funds will be taken from the Water and Operating Surplus accounts to balance the budgets instead of taking more money from General Operating and further impacting the deficit.
Ciarniello’s report also outlines an increase in assessments on new construction to nearly $67 million, which Ciarniello says would provide the city with $290,000 in additional tax revenue.
The downside for city council is major industry assessment valuation has decreased by $36 million and council will have to decide how to compensate for the loss.
“It is not advisable for council to increase the taxation rate for major industry to make up for the short fall,” said Ciarniello. “All other things being equal, shifting the entire tax reduction from Major Industry to Residential tax payers would equate to a residential tax increase of approximately seven per cent. Council also has the option to shift the tax to a combination of residential, business and other tax classes which would see a reduction in the seven per cent increase for residents.”
Council has also discussed whether it would be feasible to eliminate or reduce some baseline services in order to cut down on spending.
Council will also gather public input into the financial planning process through open houses and neighbourhood meetings Feb. 23 at the Community Centre from 6:30-8 p.m.; Feb. 24 at Willow Point Hall from 6:30-8 p.m. and March 3 at Ripple Rock School from 6:30-8 p.m. The public can also provide input before the Feb. 15, 22 and March 1 council meetings at City Hall from 7-7:30 p.m.
City council will deliberate this year’s budget March 28-31.