With declining growth and assessment base, famously debt-free city looking to trim its budget
Sep 13, 2008 04:30 AM
Phinjo Gombu
Urban Affairs Reporter
Mississauga faces some difficult choices with the release of a staff report late yesterday that recommends cutting $12 million from the $515 million operating budget over the next two years.
The GTA's second-largest city, once cash-rich but now struggling with a declining assessment base, faces the prospect of cuts in service that might mean fewer fire trucks on the road, library closings, or a fee charged to residents for emergency responses to car accidents.
At a meeting next Wednesday, the city's budget committee also plans to look at fees for parking at city parks, reduced snow clearing, fewer sidewalk and road repairs, a 25-cent transit fare increase and eliminating some poorly performing transit routes.
"There will be staff implications because you cannot provide services without people," said the city's budget director, Roberto Rossini. He was asked by council to come up with some $15.3 million in savings in June. Almost half that cost was attributed to increases in the cost of fuel, utilities and winter maintenance – items that will also hit many other municipal budgets across the GTA in coming months.
The stark choice facing council was to find the savings or hit residents with a 9.7 per cent property tax hike next year, followed by a potential 9.9 per cent hike the following year – more than double last year's 3.9 per cent tax hike.
Rossini was able to shave about $3.2 million, but for the rest came up with at least 80 recommendations for council to ponder.
"No decisions on any budget reduction options have been made," he said yesterday. "Council will be seeing these for the first time ... so many of these ideas could be complete non-starters for them."
Councillor George Carlson said it's time for Mississauga council to make some hard decisions, even if that means staff cuts.
"Seventy-five per cent of our budget is staffing, so it stands to reason that if there are savings, that's where it's going to come from," Carlson said.
"Sooner or later, the free money from developers (development charges paid to the city) will be finished and the party's over," he continued.
"We have to really tighten down. There's no way we can continue with the past practice of budgets growing every year beyond the inflation rate."
The current financial woes are especially galling in Mississauga because the city hasn't borrowed any money since 1978.
Mississauga's woes have escalated recently after years of unprecedented growth.
Fuelled by a growing assessment base, the city managed without a single tax hike between 1990 and 2001.
But now, mostly built-out, it has turned to its cash reserves to help make ends meet. At the current rate of depletion those reserves would disappear by 2012, putting the city in the red for the first time.
Longtime Mayor Hazel McCallion has become a leading champion for federal government assistance to cities dealing with an infrastructure crisis that, in Mississauga's case, will require about $75 million a year for the next 20 years.
Mississauga council flirted with a proposal last year for a 5 per cent stopgap infrastructure levy that would have raised an extra $12.5 million a year. But in the end councillors opted for a 1 per cent levy that will bring in only $2.5 million a year.