New Brunswick

Pandemic pushes Moncton toward multi-million deficit, staff aim to avoid tax hike

The City of Moncton estimates it could be facing a deficit of at least $1.7 million if measures to control the pandemic continue through May, though millions more if it continues through the summer. 

City forecasts deficit of at least $1.7 million if measures to control the pandemic remain until June

Marc Landry, Moncton's city manager, says staff are looking at what can be cut from the 2020 budget to reduce a deficit that's expected to top $1.7 million if measures to control the pandemic continue until the end of May. (Shane Magee/CBC)

Moncton's city manager says municipal staff feel "very strongly" that they should avoid a tax rate increase as a result of the pandemic.

Marc Landry said city staff will spend the coming weeks combing through the 2020 budget looking at what can be cut or deferred from the city's $161.8 operations and $47.3 million capital budget. Those proposals will then go to city council for approval.

"We're going to do everything in our power to make sure we go through all the items in the budget and come as close as possible to a balanced budget," Landry said.

That will likely mean shaving millions in spending, according to two financial projections outlined at a city council meeting held by video conference Monday. 

Under the first scenario with measures to control the pandemic lifted by June 1, the city forecasts a deficit of $1.7 million. If the measures remain until Sept. 1, that deficit climbs to $3.5 million.

Coun. Blair Lawrence, shown at a council meeting earlier this year, says the city is in a better position because of money put in reserve accounts and other budget measures. (Shane Magee/CBC)

Coun. Brian Hicks said the last thing residents or businesses need is a tax increase. He suggested millions put into reserve accounts from a surplus last year and higher than budgeted assessment growth could be tapped. 

"We do have a bit of cushioning through reserves and good budgeting," Coun. Blair Lawrence said. 

A one cent change in the tax rate generates about $800,000, Landry said. 

The projections estimate short-term losses related to revenue from the Magnetic Hill Zoo, trade shows at the Coliseum and bus fare, but savings from things like cheaper fuel.

Longer-term losses are anticipated to assessment growth, which reflects the pace of new construction, industrial park land sales, and changes to the value of the city's pension plan because of the stock market. 

Asked by reporters about budget items the city could look at cutting, Landry declined to elaborate. 

He said reducing spending on things like repairing potholes wouldn't make sense because the cost would likely be higher to repair the street in the long-term.

Landry said the city has already laid off 15 casual staff at parks, the Coliseum and rinks. He said the city would need to be at a "full complement" of staff before considering taking on summer students.

The city continues to issue development and building permits, but Landry said it's not clear yet how the booming construction market in the region could be affected over the coming years. 

Moncton estimates the city could face a deficit of more than $3 million if measures to limit the pandemic continue through the summer. (Shane Magee/CBC)

City council also approved eight financial relief measures for residents or businesses:

  • Reimburse Marché Moncton Market vendors for three of the four weeks in March and not charge for April. The measure would continue as long as the market is closed.
  • Opening the gates at city-owned parking lots and making them free until April 30, with that reassessed May 4. 
  • All parking meters, except those near both hospitals, free until April 30, which will be reassessed May 4. 
  • All parking meters in proximity to the two hospitals free between 6 p.m. and 7:45 a.m. on weekdays until April 30, which will be reassessed May 4. The meters are already free on weekends.
  • Waiving the fee for businesses to setup sidewalk patios this year.
  • Waiving of interest charges for water and sewer accounts, and operating accounts not subject to long-term agreements for the month of March, April and May 2020.
  • Waiving "non-sufficient fund" fee of $25 charged if the city attempts to apply a payment to an account, but the customer doesn't have the sufficient funds.
  • Suspending collection efforts for March, April and May 2020, which also suspends water shut-offs in that period. 

The measures are estimated to cost the city $387,109 in lost revenue, which rises to $615,918 if the various parking changes continue through May. The lost revenue was included in the deficit projections. 

Jack MacDonald, the city's general manager engineering and environmental services, told council the Moncton Hospital garage with more than 100 spaces, is closed. He said Horizon is looking at using two nearby school parking lots for staff. 

MacDonald recommended not making hospital-adjacent meters free all the time to encourage turnover in those spaces during the day. The meters are free on weekends.

ABOUT THE AUTHOR

Shane Magee

Reporter

Shane Magee is a Moncton-based reporter for CBC. He can be reached at shane.magee@cbc.ca.

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