Monday, December 07, 2020 - 3:30 PM

Budget 2021 Balanced with No Property Tax Increase

Total Budget 312,526,525
Today, the City of St. John’s released the details of Budget 2021 which includes measures to address a projected $10-12M deficit but no increase in residential or commercial property taxes.
 
The City budget was balanced at $312,526,525 through a mixture of spending reductions, fee increases and one-time investments from previous years’ surpluses.
 
“We are entering the 2021 fiscal year with an unprecedented level of uncertainty and therefore have crafted a budget with this reality in mind,” said Councillor Dave Lane, lead Councillor for Finance and Administration. “While we have taken measures to reduce the cost of government for this and future years, we are making use of COVID-19 relief funding and previous budget surplus funds to avoid an increased tax burden for the unpredictable year ahead.”
 
Water taxes will increase $15, from $605 for the past two years to $620 in 2021. This increase is required to fund current water operations, and all revenue from this tax goes directly to providing water service.
 
“We recognize the impact the pandemic and current economic uncertainty are having on residents and businesses,” said Councillor Lane. “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 based on the strategic plan and informed by public input.”
 
Forecasted Deficits
The City of St. John’s is forecasting a deficit in 2021 resulting from unpaid taxes and revenue losses, largely due to impacts from the pandemic. Anticipated declines in the Tourism and Marketing Levy are substantial, as are forecasted increases to vacancy allowance claims on commercial properties. The City must also adjust for additional costs to service debt for completed capital projects.
 
“All programs and departments at the City have been asked to closely monitor expenses and seek savings where possible, including the subsidies to the St. John’s Transportation Commission and St. John’s Sports and Entertainment, Ltd,” explained Councillor Lane. “We are pleased to announce that we are able to retain regular frequency on all our Metrobus routes through April by delaying the implementation of the Frequent Transit Network until 2021. Regarding Mile One and the Convention Centre, measures have been taken to reduce costs. We await the results of the consultant’s report for direction on future operations and will take action based on what is in the best interests of our community.”
 
Measures to Balance Budget
In late November, the City of St. John’s announced layoffs that result in $1,227,669 in savings. A further $200,000 will be achieved by closing the Railway Coastal Museum and $700,000 will be saved by reducing some capital projects planned for 2021.
 
A set of fee increases will also be implemented to increase revenue and offset the deficit:
  • A general parking ticket will increase from $30 to $50
  • The ticket for violating the winter parking ban will increase from $55 to $75 
  • Street cleaning violations will increase from $30 to $40 
  • $50 and $60 traffic violation tickets will increase to $60 and $75, respectively
  • Paid parking will increase from $1.50 per hour to $1.75 per hour throughout the City and parking in Churchill Square will increase from $0.75 to $1.00 ($0.25) 
  • Visitor parking permits increase from $27.50 to $35.75 annually
  • Sewer Back Up Calls increase from $100 to $200 
  • Sewer Dig and Lateral Repairs increase to $800 for a repair of 8m or less, and $1000 for a repair greater than 8m
 
The remaining $7,119,822 in projected deficit will be funded from prior years’ surpluses: the City of St. John’s received $6.3 million in COVID relief money from the provincial government which, combined with prior operating surpluses, will be used to address the fiscal challenges.
 
“While it is never easy to increase fees or reduce services, we feel that this budget reduces the impacts on our residents and property owners to the best of our ability and we are pleased that good financial management leading up to this year puts us in a position to reduce that impact even further,” said Councillor Lane. “Revenue challenges will continue into 2022 when we expect a drop in assessed property values, putting further strain on our ability to balance our budget without having to increase taxation.
 
“Council and staff are committed to an extensive budget engagement process in 2021 as we prepare for these challenges and will look to the public for their input to work collaboratively on keeping St. John’s thriving and sustainable into the future.”

2021 Budget Book