Fredericton budget woes mean tax increase or spending cuts, say staff
Fredericton city council is tasked with making a tough decision: raise taxes or cut capital spending.
Those were the options staff presented to council at a budget meeting Monday night.
City treasurer Tina Tapley didn't mince words when describing the position the city was in financially.
"What we have here tonight … are highly extraordinary, unexpected costs that we've been hit with," she said.
"We're in a tough spot. There's no easy answer."
Aftermath of shootings, WorkSafeNB hike
The budget decision will address two unexpected expenditures for the city.
The first was the hiring of 10 full-time police officers to help stabilize the Fredericton Police force after the Aug. 10 shootings that left four dead. Constables Robb Costello and Sara Burns were killed in the shootings, and a number of their colleagues have taken leave.
The additional police spending will cost the city $2.1 million over the next two years.
The second is the impact WorkSafeNB premiums will have on the city's payroll costs. Premiums are rising to $2.92 per $100 of payroll from $1.70.
That would cost the city an additional $1 million a year and would be more or less permanent. Tapley said.
Raise or cut
The options that were presented to council were to raise taxes by two per cent, with the possibility of one per cent being temporary just to address the police budget, or cut and defer $3.1 million in capital projects.
Neither of those proposals was met with enthusiasm by council, with the raising of taxes being the option suggested by staff.
"That sucked the air out of the room," Mayor Mike O'Brien said after the recommendation was delivered.
The city estimates the tax increase would mean that the average household would pay an additional $66 in taxes per year, a raise that the mayor called "affordable."
"Especially [since] the municipal rate hasn't increased for 13 years basically," said O'Brien.
According to the city, since 2005 council has only increased taxes once, in 2010, an taxes were lowered in 2011.
Skate park at risk?
Among the capital projects listed as possibly being on the chopping block was the proposed downtown skate park.
The park would cost $1.5 million, almost half of the $3.1 million budget shortfall.
Deferring, or cutting, the park would mean the city could get away with raising taxes by only one per cent while having a minor impact on other capital projects.
O'Brien said that since the goal was to maintain the city's quality of life, a deferral of the skate park may be an option.
"We don't have one now, we're looking to maintain," O'Brien said.
Coun. Stephen Chase said he was opposed to widespread deferral of capital projects, but the skate park "may be an item" that could be delayed. He later said he would rather go with the staff recommended for tax increases.
However, Coun. Kate Rogers, whose downtown ward would be the home of the skate park, was opposed to the idea of cutting funding to the park.
"I want that skateboard park," said Rogers. "I think it's owed to that portion of the population who's been fighting for that. Many of them are not folks that get a lot from the city."
Council did not table a motion on whether to accept City staff's recommendation of a 2 per cent tax increase, opting to defer discussion to a future council meeting.
