As always, the new year ushers in a new operating budget for the municipality. With budget deliberations slated for the end of January, council received a sobering report from Amanda Carter, Director of the Finance Department, regarding the context for budget deliberations during the first regular council meeting of this year.
The report itemizes key areas where municipal revenue is spent, along with providing an indication of where savings could potentially, if at all, be incurred and essentially throws cold water on council’s request last summer for each department to find a cost savings of 10 per cent.
The report refers to a July motion directing staff to break departmental budgets down into three categories: statutory, policy/agreement and other costs. Statutory costs are described in the report as being “all costs related to employees ….to include the equipment and supplies that the employee requires to carry out the duties of their role.”
These costs include: wages and benefits, data processing and communication, memberships and publications, office supplies, county equipment charges, other materials and supplies and legal costs. Policy/agreement costs are described as all revenue with the exception of donations.
As the report states, these costs are incurred to “provide the service, as the fees are charged as a result of the County’s fees and charges by-law.” The cost also includes provincial and federal grants that are tied to a transfer payment agreement (TPA) and associated costs. Policy/agreement costs can include: rents, utilities, equipment rent, contracted services, professional services, legal costs and materials. “Other” costs are described as those donations received for projects of community interest as well as costs related to employees that were not seen as statutory.
These include: travel and conferences, transfers to reserves, cost recoveries, advertising and promotion. According to the report, 80.8 per cent of the municipality’s net costs are statutory, 19.8 per cent are policy/agreement driven and -.06 per cent are other.
Despite the provincial government’s 2020 budgetary cuts to municipal funding and the subsequent effort on the part of the County to find a 10 per cent reduction in operating expenditures, there appears to be little room in the upcoming 2020 municipal budget for such cost-cutting.
In her report, Carter presents council with a chart that provides an assessment of where the majority of costs lie.
“As illustrated in the above table there are no obvious areas where cost savings can be achieved without negatively impacting current service levels,” states the report.
Furthermore, with 43.7 per cent of the County’s expenditures falling into the policy/agreement category, the report states a service delivery review should be undertaken.
“The current policy/and or statutory framework doesn’t allow much flexibility in terms of being able to cut or reduce costs. In order to achieve savings we need to review our current policy and procedural framework,” states Carter in her report.
As per the report, the number of by-laws, policies and agreements to be enforced and managed by the County is “enormous”.
“With our current policy/agreement framework 43.7 per cent of the County’s expenditures are required to support this area,” confirmed Carter
Budget deliberations will commence January 8, from 5-9 p.m. with deputations from the public. Meetings will continue each day from 9-5 p.m. until January 31.