Moncton council gets stern rundown of rising costs

The City of Moncton could be facing hard times if spending isn't curbed, chief financial officer John Martin has warned.

"This particular long-term financial plan has been very difficult to balance," Martin said this week as he presented council with the plan that foresees a $103 million deficit over 10 years.

The city is on the hook for $200 million in capital spending between 2017 and 2020, "which is quite a bit more than we can afford," Martin said.

"For example, the completion of the downtown centre and the new police facility, a north end centre, Centennial beach replacement, the new east end pool, ongoing downtown development and revitalization."

The heavy hitters on the list are the downtown centre, budgeted at $104 million, and the new Codiac RCMP headquarters, with an estimated price tag of $45 million.

Martin offered a list of possibilities to help relieve some of the pressure. He estimated $24 million could be saved if council agreed to keep a tight rein on salaries.

"Wages and benefits need to be targeted to be maintained to a total overall dollar increase of 2.5 per cent a year over the 10-year period," he said.

"It's an area that we need to have control."

Councillor sees problem

But Coun. Paul Pellerin, pointing to past negotiations with Moncton firefighters, said putting a limit on wages for city workers isn't necessarily up to the city.

"How are we supposed to get them to two and a half percent a year when we were are consistently going to arbitration."

Moncton firefighters received a 16 per cent pay boost through arbitration in 2014.

"We have four unions we negotiate with, need to let them know," said Pellerin.

The City Hall Employees Association is currently negotiating a contract with the city, and CUPE Loacl 51's contract comes up for renewal in December 2018. Codiac Transpo drivers are also unionized and paid by the city.

Other options presented to council included a possible tax increase. The last increase, of one cent, was in 2016, taking the rate to $1.6497 per $100 of assessed value.

Saying he was concerned about a cut to services, Pellerin voted against Martin's recommendations.

"If we follow this plan, in my humble opinion, not only this council but the two future councils are also locked in," said Pellerin. "There's no room to manoeuvre."

CFO not finished his list

And there are still more big ticket items the city will need to consider that aren't in the current budget.

Martin said the Superior Propane Centre will bring a cost not yet factored in. The city is responsible to make mortgage payments and operational contributions on a yearly basis.

Also on the table is the former Moncton High School building. If MH Renaissance gets the opportunity to purchase the building, it plans to ask the city for $2.35 million.

Another cost concern is the city parking garage between Church and Alma streets, which Martin said was bought in 1987, and requires both regular upgrades and major repairs.

Martin said council will also have to consider repairs at the Moncton Coliseum and whether the city should buy City Hall on Main Street.

"In the next few years, the lease will expire and the city has the option to acquire the facility," Martin said.

"These are just some of the projects that we picked out to remind (council) that these are big assets, and there's no funding that's been put away for these projects at this point."

Pellerin also raised the issue of RCMP costs The Supreme Court of Canada granted the force collective bargaining rights with the national government in 2015. If members of Codiac RCMP unionize, Pellerin expects wage costs to increase significantly, another possibility not in the current budget.

According to Pellerin, the possibility of a shortfall for the city was easy to spot two years ago.

In August 2015, the city developed a 30-year plan, based on growth of four per cent, which then didn't materialize.

Mayor more optimistic

"That plan literally failed to even take off, so from the get-go, that's when the whole structural deficit in my opinion was commencing."

Pellerin wants to see council scrutinize its spending.

Mayor Dawn Arnold was not available to comment on this story, but at the council meeting on Monday, suggesting she might be "a Pollyanna," said she thought Martin was being conservative with projected revenues.

"So we will keep the momentum going to help to counterbalance some of, some of this," she said.

The recommended long-term financial plan passed.