When city politicians enter budget deliberations next month, they will start off on solid, better than expected financial footing.
City councillors received the good news Thursday at a several-hour-long meeting with the senior management team at Swanmore Hall.
“Staff is working hard to put the 2019 budget together,” said city CAO Gayle Jackson, who then provided an overview “from 30,000 feet” of the city’s financial position as of the end of 2018.
Jackson noted the city has a budget surplus of about $1.6 million in addition to almost $2.8 million in unexpected money thanks to projects coming under budget – money that staff suggest should be used to replenish depleted reserve accounts.
The city’s financial position is better than forecast for a variety of reasons, staff explained.
For example, the city budgeted for “in-year tax growth” of about $530,000 and it looks as though the actual number is going to be over $870,000.
On top of that, building permit revenue is up by more than $260,000 due to a surge in growth. The city also qualified for “transitional mitigation funding” of $472,500 related to the reclassification, for tax purposes, of a local retirement home.
The city also is $500,000 in the black due to the delayed opening of the city’s long-anticipated recreation centre on West Street. The city had allocated the half million dollars to the operating costs of the recreation centre as it was originally anticipated it would be open and running in the last quarter of 2018. It won’t be opening until this summer.
Several road and infrastructure projects in 2018 also came in under budget – to the tune, collectively, of $2.8 million.
Council learned the reconstruction of Queen Street cost $600,000 less than budgeted. The reconstruction of Dufferin Street cost $1.3 million less than expected because some of the underground infrastructure did not require replacement.
The reconstruction of Wyandotte Street was under budget by $700,000, the reconstruction of East Street cost $20,000 less than expected and about $45,000 was left over from the budget for the Old Barrie Road/University Avenue project.
Ian Sudgen, the city’s director of planning and development, attributed some of the savings to the city’s proactive approach to the projects.
“The main advantage (is) … we did a joint tender (for several of the projects) early in the year,” Sudgen explained, noting tendering a bundle of roadwork as a single project “motivated (contractors) to bid early and bid low. We benefited from that.”
In addition, about $65,000 less than budgeted was spent on road resurfacing and about $65,000 less than forecast was spent on sidewalk resurfacing.
“We are often challenged financially, so this is good news which puts us in better shape,” said Orillia Mayor Steve Clarke.
Jackson said staff are recommending investments, in 2019, in several areas:
- Winter control
- Road/sidewalk/underground infrastructure
- Fleet management
- Information technology
- Reserve contributions
“Those are the areas the senior management team have focused on as far as the 2109 budget,” said Jackson, noting council will have ample opportunity to reshape those priorities if desired.
City council will meet several times in January to deliberate its capital and operational budgets.
At Thursday's meeting, which served as an orientation of sorts for new councillors Jay Fallis and David Campbell, council also received updates on major projects, discussed the code of conduct, got a glimpse into major projects on the horizon and determined priorities for the coming term.
Watch for more stories about these issues in the days ahead.