Capital cost cuts tricky: CFO

City councillors began Monday what could end up being four days of budget meetings, getting deep into the capital spending for 2017.

Budget committee members met to deal with infrastructure, equipment and other new and replacement costs faced by Orillia next year, all while attempting to keep their hands from digging too deep into the pockets of the citizens.

Coun. Ralph Cipolla was the first to raise the topic of the looming 4.3% municipal tax rate increase during the meeting, wondering what projects could be chopped from the capital budget to lessen the burden on city rate payers.

However, the annual capital budget isn’t the place to do that, unless long-term changes to the city’s five-year capital plan are in the works.

"We know that the capital tax levy is roughly $1.9 million," explained Bob Ripley, the city’s chief financial officer. "We look at our program and that $1.9 million has basically been allocated for the next five years. If you cut the capital tax levy this year, that means you’re going to have to cut projects out of the next five years as well."

Councillors could make such a cut, but if they want the ensure the future projects remain on track, the levy will have to be increased again in succeeding years. However, Ripley suggested if councillors want to lower the municipal tax rate for 2017, "it has to come from the operating side," he said.

That meant Monday’s meeting was an exercise in attempting to spend the ratepayers’ money in the most prudent way possible. More than $21 million in capital projects were being considered by councillors, which would require about $2.1 million from the capital tax levy reserve.

Staff had split the capital budget into two lists of projects. The A list featured 76 items, eating up about $1.6 million of the tax levy. The B list featured another 18 items, requiring a further $609,000. The morning session saw 48 items approved for next year, with the remaining 46 being debated through the afternoon.

With only $1.892 million available from that reserve, councillors were forced to sharpen their pencils during the afternoon portion of the session.

They had the option of adding items to the budget. As Cipolla was the first to look at what could be cut, he was also the first who was keen to increase spending, targeting the road-resurfacing recommendation.

"Our citizens want good roads to travel on," Cipolla said. "I think we could do a lot better and keep a lot more people happy … But I would like to ask this council if we could work toward increasing this budget to at least $1.5 million, or double what we’re doing right now."

Six roads are proposed to be resurfaced in 2017. Rather than doubling the amount of money available, Coun. Tim Lauer suggested the $290,000 earmarked for resurfacing on Progress Drive be spread among smaller projects on residential streets. Citizens, he argued, care more about the shape of the streets where they live than the ones where they work.

Coun. Ted Emond was quick to defend the needs of the business owners, particularly on Progress Drive, many of whom are paying taxes at an industrial rate, about three times the residential rate.

"I think we have to insure that the businesses in our community that are employing Orillians are feeling good about the fact they’re here, and not considering elsewhere," Emond said. "Part of that is continuing to make investments in the infrastructure that serves those people."

Budget committee ultimately decided to stick with the resurfacing recommendation from staff, which will cost $621,000. When the reconstruction of Dufferin and Queen streets is factored in, along with crack sealing, the city will spend nearly $5 million on its roads in 2017. That doesn’t include the improvements being made in the Highway 12-Monarch Drive area.

The items recommended by budget committee for 2017 include the oft-requested $1.62-million replacement of the Udell Fieldhouse, the reconstruction of Queen Street West in order to facilitate construction of the city’s new recreation complex at $1.5 million, and almost $500,000 for fleet replacement in the public works and parks, recreation and culture departments.

All of the initial A-list items received a thumbs-up from committee.

The meeting recessed Monday before any recommended items were removed from the budget. Debate on the capital budget will continue Tuesday.

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