‘Sobering’ was a word used by Saint John mayor Don Darling during an open Common Council committee of the whole meeting which served as a financial crash course for the new council, which is expected to pass its first budget later this year.
The financial challenges facing the city were brought to council’s attention at the meeting which include the debtload, the fact that operational spending is outpacing revenue growth, and the reliance on unconditional grants when they have been inconsistent. As well, salaries are forecasted to increase by an average of $2.3-million-dollars a year for the next five years.
“If we continue this pace and this direction we’re going to find ourselves in a real challenge,” said mayor Don Darling. “So I think what tonight sets the stage for us is to know where we stand and as we go into priority setting sessions through the summer we’re doing that with relevant information, relevant facts so what we’re making really good decisions.”
Debt in the utility fund is projected to peak at about $107-million in 2018 with the city’s Safe Clean Drinking Water Project being completed. The general fund’s outstanding debt is nearly $120-million according to City Manager Jeff Trail.
“I think of all the boogeymans we have Jeff, the biggest one is debt,” said councillor David Merrithew, addressing the City Manager.
Revenue from property taxes is expected to be flat or negative next year. At $1.785 Saint John has the highest tax rate of any municipality in the province. On a brighter note, Darling says that there are some projects in the pipeline that will be very good for Saint John, pointing to the Irving Oil HQ project in the uptown.
“I don’t know exactly what the tax revenue will be but that’s a very big building, that’s being built just at the top of King’s Square, and that’s going to be very exciting for our tax base.”
