Saint John councillors are asking staff to offer a list of options for service cuts as the city continues to grapple with its financial problems.

The cuts will be made if the provincial government rejects the city's latest request for better terms to deal with the enormous employee pension fund deficit.

Coun. Christopher Titus said city council may have to cut as much as $10 million from the budget every year if it cannot get more flexible conditions from the provincial government.

"The only way we can make that shortcoming up is through our major services. That would be through police and fire," Titus said.

"And then I think with the amount that we're talking about here it would even get down into recreation and other services that we provide. And I don't say this as a scare tactic. But I do say it's a reality."

The council has asked Pat Woods, the city manager, to come back with a list of options of services that could be cut. Saint John has a pension deficit that has been recently measured at $123 million.

Payback proposal rejected

The city is negotiating with the provincial government over ways to spread out the payments of its pension deficit.

Saint John's first proposal, submitted to the provincial government in spring and requesting a 25-year payback period, was rejected.

The city handed in a new proposal to the provincial government that had six scenarios to be considered, each with varying degrees of salary and benefit reductions, property tax increases and payback length.

The scenarios offered to the provincial government have not been voted on by council. The payback lengths in those scenarios range from 15 to 20 years and have been considered along with property tax increases of up to 16 cents.

Deputy Mayor Stephen Chase said the best place to find the money is within the pension fund itself.

He said city employees should agree to give up some of their retirement benefits.

If city workers agreed to the proposal it would come on top of concessions they already accepted earlier this year.

Mayor Ivan Court said the time has come to consider deep service cuts.

"I can remember a time in 2001 when 9/11 occurred and we had to reduce our budget at that time. We had buyouts and so on. I think we ended up at that time with 20 less police officers and 25 less firemen," he said. "It could be closing buildings, it could be anything. You have to look at every area. Nothing will be sacred."

Not fair for workers

Ron Oldfield, a member of the Saint John District Labour Council, said workers have already faced cuts. Further cuts to active workers means a smaller workforce paying into the pension plan. Creating early retirements creates more demand for the pension pool.

"So who's really at fault here? The workers have made their commitment," Oldfield said.

"If I was a member of any of the municipal unions and was close to retirement, I'd get out. Make no mistake: this plan is going to see some drastic changes and I don't think it's going to be beneficial to the employees. I don't think it's going to be beneficial to the municipality because they won't be able to attract good employees in the future."