Sault Ste. Marie councillors will be presented Monday with a staff-prepared operating budget proposing $13.5 million in additional spending.
The $216-million budget compares to $202 million spent last year: a 6.7 per cent increase.
"Staff have developed the 2024 operating budget in a prudent manner, maintaining our level of services while trying to mitigate the impacts of inflation, continued increased commodity prices increases in the cost and acquisition timelines of materials and supplies," says Malcolm White, the city's chief executive officer, in a report to Mayor Matthew Shoemaker and council members.
"The city continues to face economic realities, including cost increases from supply chain challenges, a tight labour market, volatility in fuel costs, increasing capital costs for projects and continued higher levels of inflation," adds Shelley Schell, the city's chief financial officer.
"All of these factors put additional pressure on the city’s budget and the revenue needed to support it. The budget in coming years will depend on property tax increases in excess of historical averages unless substantial reallocation or reduction of operating funds for services or reductions in capital investment occurs.
"Balancing affordability and what the community is willing to pay and the level of service that residents have come to rely on is becoming more difficult to maintain," Schell said in comments prepared for Monday's meeting.
About half of the $13.5 million in increased spending is attributed to levy and local boards over which the city has limited or no control.
"Included in the local board category is the Police Services Board, which accounts for 85 per cent of the category’s total expenses," Schell says.
"Year over year, levy and local boards increased 11.2 per cent. This increase is, predominantly, due to an estimated inflationary increase of 3.5 per cent for the Sault Ste. Marie District Social Services Board and Algoma Public Health and a net increase of 17.1 per cent for the Police Services Board.
"The Sault Ste. Marie Region Conservation Authority and Library Board reflect relatively small increases on the 2024 net levy."
Of that part of the budget over which the city has control, 48 per cent is salaries and benefits governed by contractual agreements.
The preliminary operating budget is designed to continue existing levels of service.
If approved as is by city council, the levy increase will be 7.2 per cent.
Factors in that hike include a number of changes already approved by council:
- contractual salary compensation, complement and job class changes and benefits - $1.38 million
- downtown plaza operations - $158,000
- landfill business and implementation plan - $319,000
- Manzo Park splash pad - $118,000
- fleet management improvement initiatives - $550,000
Increases in the cost of doing business are expected to account for $2.1 million of this year's budget increase.
City council is planning further budget deliberations for Dec. 11 and 12, with senior city managers presenting summary budgets for their areas.
Tax policy, rate options and recommendations will be considered in March and April of next year.
A re-assessment planned by Municipal Property Assessment Corp. has again been postponed, so 2024 assessments are based upon 2016 values, councillors will learn on Monday.
Sault Ste. Marie's preliminary 2024 capital budget recommends spending $41.1 million, down $1 million from 2023.
$22.2 million is allocated for roads, bridges and storm sewers.
"Recent updated estimates and design submissions indicate that the biosolids management facility final project costs will be much higher than the current budget estimate reflected in the debt forecast," Schell says in a report prepared for Monday's city council meeting.
"Staff are working with the design team to value manage the project costs down. It is anticipated that the current remaining available debt will be much less than $40 million."
The following outside agencies will also be aiming to be included in the 2024 city budget:
- Algoma University - $40,000 for scholarships and recruiting efforts in Nigeria, Nepal and the Philippines
- Art Gallery of Algoma - $345,000 (up $46,450 from last year) to cope with inflationary pressures and add staff in preparation for a fund-raising campaign for a new building
- Canadian Bushplane Heritage Centre - $250,000 for initiatives including a new children's flight centre
- Sault Ste. Marie Museum - $285,000 (up $25,000 from last year, to ensure that their highly educated and trained staff are compensated at a level comparable with their qualifications)
- Soo Arena Association (Pee Wee Arena) - $22,000 for HVAC and boiler upgrades
- Sault Ste. Marie Crimestoppers - $25,000 to provide cash rewards to tipsters whose information leads to an arrest
- Entomica - $137,276 (up from $75,000 last year) to be primarily used to contribute towards staffing and supplies. The insectarium has no current large outstanding debts but anticipates a deficit of about $150,000 this year
Monday's city council meeting will be livestreamed on SooToday starting at 5 p.m.
The budget portion of the meeting will start at 6 p.m.