Derek Spalding, Daily News Nanaimo:
Members of Nanaimo city council and staff moved quickly yesterday to organize a budget review session this morning, where councillors will analyze capital-project spending planned for 2009 to see where they can eliminate costs in an effort to minimize property tax increases. The local politicians on Monday froze any new spending for the year when they set a 5.3% tax-increase target for residents, despite earlier promises to keep the number well below this figure. The decision puts a hold on all new hiring and new programs and restricts staff travel budgets, according to senior management who could not reveal any details of possible cuts because of implications for employees. Mayor John Ruttan and his fellow councillors tried to set a lower target on Monday, but without understanding the impact of service cuts, they could not agree on a figure. Instead, they decided to keep the tax increase set by the previous council and will try to eliminate spending in order to free up money for infrastructure projects that may qualify for additional funding from the federal government's economic stimulus program announced last week.
Members of council for weeks have had a list of capital projects that could be eliminated from the budget, but they want to know more details before making a decision. "Council is wrestling with the tax increase and there is a certain amount of pressure to try to reduce that further before we can decide what to cut," he said. Staff already made $2.2 million in cuts to six different municipal departments and will gather with council members in a public meeting in the training room of the city hall annex. The session could help staff understand the implications of making cuts outlined by senior management. Each politician has carried around four yellow sheets of paper for several weeks, but the suggestions on the list remain confidential, according to Coun. Fred Pattje. "I would not want to release that information at this time," he said.
Very few discretionary cuts remain. The city's financial planner in early January outlined projected revenue losses for this year, including $275,000 from the city's development office, $500,000 from investment income and $150,000 loss in gambling revenue from the Great Canadian Casino. Plus, the city will reduce industrial taxes by 11% this year to make mills like Harmac more viable. The targeted tax rate could still change. The city's leaders will have to free up room in the budget if they apply for Ottawa's infrastructure grant program, unless they can obtain money for a project already in the plans for 2009. The planned Bowen Road expansion may be the only development that meets the criteria, according to city manager Jerry Berry. All other plans would require additional matching funds. Without an ambition for new infrastructure money, members of council can then look for cuts that reduce the tax increase. Coun. Bill Holdom wanted to delay a $750,000 upgrade to RCMP cells at the Nanaimo detachment, but renovations already fall well below federal guidelines and could cost the city much more money if someone is injured while in custody and sues. The current target of 5.3% holds the economic development budget at 90% and puts a hold on two new assistant fire chief positions that would have cost the city $250,000. Fire chief Ron Lambert wants staff to maintain the 10-year fire-service plan outlined by the previous council, but that too could be in "jeopardy" in the long term. The spending freeze also puts neighbourhood plans on hold.
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