Nfld. & Labrador

No tax increases for residents as St. John's preps for flood of unpaid bills in 2021 budget

The City of St. John's is predicting a deficit of between $10 million and $12 million in 2021. A big indicator will be how many people can pay their taxes amid the pandemic.

City backs down on changes to Metrobus and fire department, but railway museum still closing

The City of St. John's delivered a budget packed with uncertainty on Monday, looking ahead to life with COVID-19 in 2021. (Rob Antle/CBC)

The City of St. John's is setting aside an extra $3 million in its 2021 budget in anticipation of a spike in people and businesses unable to pay their taxes amid the COVID-19 pandemic.

A total of $4.35 million will be set aside for those who cannot pay up. It is the second-largest increase in spending in a budget full of rising costs and falling revenues related to the pandemic.

Although St. John's is projecting a deficit between $10 million and $12 million in 2021, residents and businesses will not see further tax increases.

Instead, the city will balance its budget on a series of cuts and fee increases while softening some previously announced spending cuts at Metrobus and the St. John's Regional Fire Department.

"We recognize the impact the pandemic and current economic uncertainty are having on residents and businesses," said Coun. Dave Lane, lead for the city council's budget preparation.

"Our goal in preparing the budget was to have as little an impact as possible on services while ensuring that we meet our commitment to sound fiscal management and decision-making."

Two councillors — Maggie Burton and Ian Froude — voted against the budget, citing its failure to improve sidewalk snow-clearing and budget cuts to Metrobus.

Tough times budget

A little over 16 full-time positions will be cut for a savings of $1.2 million. Those won't be high-level employees, because the city cannot afford to pay the severance for those positions.

"We chose not to make any management positions redundant," Lane said. "That would have resulted in potentially large, one-time costs for pay-in-lieu of notice, something we felt we could not afford in 2021."

The city is coming off a brutal year where it saw an unexpected $18-million shortfall due to COVID-19 and a historic blizzard in January that triggered a state of emergency.

Coun. Dave Lane is the city's lead councillor on finance and budget issues. (Patrick Butler/Radio-Canada)

But the city was sitting on a $22-million surplus from previous years. It will use $12 million of that money, plus $6 million in pandemic funding from the province, to offset the losses from 2020.

The city will carry the remaining $10 million surplus forward to cover anticipated losses in 2021, while also hoping to get emergency relief funding from the province for the storm dubbed Snowmageddon.

One of the biggest sucker punches the city suffered involved losses through levies on the tourism and hospitality industries. The city is projecting a further $2-million loss to its coffers from the tourism and marketing levy in 2021. 

The single biggest increase was $4 million in debt servicing on capital works projects such as the construction of the Paul Reynolds Centre and the city's water treatment plants.

Fee increases

The city hopes to recoup more than $4 million through fee increases.

Here's how that will look for residents and businesses:

  • Water tax increases from $605 to $620 annually.
  • General parking ticket goes from $30 to $50.
  • Winter parking ban ticket goes from $55 to $75.
  • Street cleaning ticket goes from $30 to $40.
  • Paid parking goes up $0.25 an hour.
  • Visitor parking permit goes from $27.50 to $35.75 annually.
  • Sewer backup calls double from $100 to $200.
A parking ticket will cost you more in 2021. Increases to fees and fines are a big part of the city's 2021 budget. (CBC)

City backs off on Metrobus, firefighters

In his budget speech, Lane spoke about the difficulty in cutting certain areas close to the hearts of councillors and constituents.

While the city had planned to trim routes over the winter to save $800,000, it is now backing off that plan — a little bit.

Metrobus will maintain its regular winter schedule until April, when it will switch to a summer schedule with buses arriving every 30 minutes instead of 15.

To do this, the city will delay upgrades to the bus service — known as the Frequent Transit Network — until at least January 2022. That upgrade was originally planned to launch in September 2020, before the city was sidetracked by the storm and pandemic.

The budget still has a 3.6 per cent reduction to the Metrobus bottom line, for a total cut of $697,800.

Burton said it is "one fewer step in the wrong direction." Froude said it was a softer blow but still not one he could accept.

"There are many investments in this budget that were said to be too important to cut," Froude said. "Transportation should have been one of them."

Metrobus was looking at a significant reduction in its annual budget, but last-minute changes to the plan will mean less money taken from public transit. (Jeremy Eaton/CBC)

Ridership decreased during the pandemic. As of last week, the city intended to reduce the schedule to meet the lower demand. Lane said the reversal of that decision was based on public feedback.

"I believe this is a socially responsible compromise," Lane said. "One that I hope demonstrates our commitment to public transit as well as our ability to work collaboratively in response to the public's desires and needs."

Crew members of the St. John's Regional Fire Department are seen here using a ladder truck to put out a fire at Neil's Pond Plaza in March of 2019. (Meg Roberts/CBC)

Lane said the city is also working with firefighters to find another solution to ballooning overtime costs. The previous plan was to cut the minimum staffing level by two positions, resulting in occasional days where the St. John's Regional Fire Department would have to take one of its two ladder trucks out of service.

The status quo will remain for now while both sides work out another deal.

The Railway Coastal Museum will still be closing, however. The museum on the west end of Water Street — initially opened by the Johnson Family Foundation and then turned over to the city — had seen far fewer visitors in recent years, and the closure will save the city $200,000 in 2021.

Public consultations coming on Mile One future

Lane also addressed the potential sale of Mile One Centre and the St. John's Convention Centre in his budget speech.

He said the city is still waiting on the final findings from a report it ordered earlier this year and will consult with the public before making a decision on whether to list the building.

Newfoundland Growlers owner Dean MacDonald has been calling for the city to sell him the assets since 2018.

"Regardless of which side of the debate individuals may fall on, council has a responsibility to do what is in the best interests of all taxpayers when it comes to the future of Mile One and the Convention Centre," Lane said.

The cost to run both facilities is expected to rise by $670,650 for a total of $5.1 million in 2021.

Other items

The city also saw expenditure increases in miscellaneous areas, such as:

  • $350,000 for the 2021 municipal election.
  • $270,000 to pay for its 2025 Canada Games bid.
  • Its share of water and fire services, by a combined $350,000.
  • A steep 46 per cent spike in the cost of insurance, for a total increase of $241,934.
  • An extra $408,923 for increasing electricity rates.

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