Moncton budget balloons by $30M
City's income and spending are $30 million more in 2008 compared to 2004
The City of Moncton is budgeted to take in and spend $30 million more this year than in 2004 -- a 39 per cent increase -- placing the onus on the next council to manage both revenues and expenses more efficiently during the next four years.
Both candidates running for mayor in Monday's municipal elections have pledged to take a hard look at the city's finances and find ways to better manage the budget.
"We need to manage the city like a large corporation and put more into reserves," mayoralty candidate Pierre Michaud said yesterday. He said the city needs to strengthen its asset management plan to make sure money is being wisely spent. For example, he said the city is putting more money into the Coliseum than it generates in revenue. He also wonders whether the city should own the police station building which is used by the contracted RCMP.
Mayoralty candidate George LeBlanc has also said he was raised to spend other people's money more carefully than his own and has promised to take a hard look at spending. LeBlanc's action plan includes an action committee to look at taxes, city spending and rising property assessments.
Over the last four years, Moncton's operating budget has ballooned from $77 million in 2004 to $107 million in 2008. For a balanced budget, the revenue and expenses are the same amount.
So where has the extra revenue come from?
The main source of revenue for the city is property taxes, which have grown from $60 million in 2004 to $85 million in 2008, a difference of $25 million. The increase in the city's unconditional grant from the province has been less dramatic, going from $10 million in 2004 to $11 million in 2008. The "other" sources of revenue have grown from $6 million in 2004 to $10 million in 2008.
City spokesman Paul Thompson says the extra revenue is generally explained by higher property assessments, new buildings and growth in general.
"Fundamentally, we have evolved from a smaller town into a big city. Moncton has become an urban centre," Thompson said. "The candidates in this election are talking about attracting new people and more growth, so we have to compete with other municipalities to give people a reason to come here and keep them here."
He says the increased spending, which appears to be perfectly balanced with the increased revenue, is mainly due to the extra effort needed to look after the city. The rising costs of salaries, fuel, building supplies, equipment, maintenance and just about everything else the city spends money on has also risen dramatically over the last four years.
Essentially, Thompson said, the pieces of the pie have remained the same, it's just that the value of them have gone up.
Protective services, transportation, general government, environment (garbage collection) and other slices of the pie have not changed that much.
Thompson said some administrative changes between 2004 and 2008 have included the money diverted to Codiac Transit (it is now a separate entity whereas in 2004 it was part of the city), and the amount of money that goes into the capital budget for construction projects. He explained the city has moved to a more pay-as-you-go approach to building, as opposed to borrowing, which results in more money in the capital budget and less spent on interest charges.
Otherwise, he cited the increased costs to the city across the board as the main reasons for the $30 million increase in expenditures. For example, the cost of fuel, asphalt, salt, concrete, sewer lines and other commodities have all risen dramatically.
Michaud agreed that costs have risen on everything, but suggests there are ways the city can become more cost efficient and avoid extra expenses. He said the $30-million project to build the new terminal for the Greater Moncton International Airport was done without cost overruns due to shrewd management practices.
He said it is time city council took more control over finances, rather than taking decisions made by city staff.
Quick Facts
Revenues and expenses for the City of Moncton over the last four years:
Revenue (according to the 2008 budget, with 2004 figures in brackets)
* Property taxes: $85 million ($65 million)
* Unconditional grant: $11 million ($10 million )
* Own sources (licensing, fees, etc.): $10 million ($6 million)
Expenditures (according to the 2008 budget, with 2004 figures in brackets):
* Protective services: $31 million ($25 million)
* Transportation: $19 million ($13 million)
* Fiscal: $16 million ($12 million)
* Recreation/culture: $14 million ($11 million)
* General government: $12 million ($9 million)
* Transit (this figure changed as a result of Codiac Transit becoming a separate entity) $5 million.
* Environmental Health/Environmental Development: these were separate categories in the 2004 budget, each worth $2 million.
Total expenditures/revenues: $107,780,110 in 2008 ($77,755,134 in 2004)
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I notice that the biggest percentage increase in the budget is in the administration component. Which tells me that the administration is too lax with taxpayers dollars and that the staff are puting themselves first rather than putting efficiency and productivity first. Since we will be getting a new city manager, now is the time to make a push for greater efficiency and productivity at city hall. First, the will must be there on the part of the elected council to order such and then do the proper follow-up.