Service cuts likely in 2011 city budget

News — 09 November 2010

A commonly used phrase around budget time, ‘tough decisions’ may never ring more true than in 2011.

City council, city staff, council-elect a very small contingent of residents gathered in The Centre, Nov. 4 to talk about how the city should spend its money in a year in which a good deal of belt-tightening is expected in the wake of 2010’s flood of stimulus funds.

Just like 2010, the city faces significant challenges to its revenue stream — a $260,000 loss in tax revenue; an as-of-yet unknown one-time loss in settlement of outstanding tax appeal for the large industrial tax sector; a two per cent wages and benefits allowance that will result in a $260,000 cost on the city payroll; hydro and heating increases; and changes to the sanitary sewer budget that could impact the budget to the tune of $250,000.

It appears unlikely that the municipality will avoid service level cuts in 2011.

“There’s no magic answer here,” said City Manager Arie Hoogenboom. “One of the difficult decisions, I think, for the new council will be to look at the various service levels and determine which ones we absolutely have to have and which ones we might consider reducing. Ultimately, we don’t have the same amount of revenue coming in. Only so much of that can be absorbed by your commercial and residential sectors.”

With federal and provincial coffers open to fund all manner of shovel-ready projects to the tune of two-thirds, our Centennial year was an expensive one for capital projects including the Centennial Business Park, Norwill Industrial Subdivision, Duke St. overpass and preparations for the construction of a new sewage treatment facility.

City administration was asked by a resident to account for the current level of debt.

While a dollar figure encompassing the city’s total debt was not offered by city staff at the meeting, City Treasurer Linda McNaughton says the community is still in ‘good shape’ with debt levels standing at about 25 per cent of the maximum debt guidelines for a municipality of our size set out by province’s Ministry of Finance.

McNaughton added outstanding debentures currently cost the city in the neighbourhood of $300,000 in interest cost. That will increase in 2012 when the city’s $10 million share of the sewage treatment plant is added to the debt.

Efforts were made by the city to compare and contrast local tax rates with surrounding communities. Dryden features the lowest residential, commercial

One resident posed a question that councillor Mike Wood called the defining question of that council’s term in office — In difficult times, why don’t we as a municipality tighten our belt and live within our means like we always have?

“This council and outside agencies saw very clearly that too many years of doing exactly the same thing turned opportunity away from Dryden,” said Wood. “We said, ‘We have the mill across the river, we don’t need new business’. That turned up when we took a critical look at our investment readiness. We failed miserably because we hadn’t made any investments in infrastructure and we weren’t ready in any respect.”

City staff made an effort to compare and contrast local tax rates against regional communities — revealing that Dryden has the lowest tax rates in all classes between Kenora, Thunder Bay, Sioux Lookout and Red Lake.

The City of Dryden’s 2011 Budget Process is accelerated this season, beginning nearly one month early in an effort to involve and inform council-elect in the process and decision-making.

Council is expected to establish 2011 budget parameters on at the Dec. 13 open meeting of council. Senior management will table a first draft of the 2011 operating and capital budgets on Dec. 20.

In the new year on Jan. 17, residents will have an opportunity to provide input to council and staff.

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