Budget talks continue as Moncton grapples with $2.5M deficit

MONCTON, N.B. – Budget talks for Moncton’s council will continue Monday as the city battles a $2.5 million deficit.

The city learned Friday its equalization payment from the provincial government would be even less than it had anticipated.

The city was expecting the grant to drop significantly from last year’s, which was about $8.5 million.

They had estimated the grant would drop to about $5.6 million but on Friday, the province announced Moncton would be receiving just under $5.3 million,

That means the city now has to cover a $2.5 million deficit. During Friday’s deliberations, the downtown events centre quickly became the target.

Councillor Brian Hicks said he couldn’t vote for the budget as it stands.

“I could not vote for this budget just on the fact that we’re going to spend $250,000 next near on downtown centre consultants when again we have no idea whether or not the project is going to go ahead,” he said.

But City Manager Jacques Dubé said city staff are operating under direction from council that the centre will be going ahead. He said he has told council in the past that if the centre is not going ahead, he needs to know so he can change direction, but he can only operate on what he has been told.

“As far as staff is concerned, we are under direction of council to make that downtown centre go forward. The $250,000 you see in the budget for the downtown centre is critical if you want to continue with the project,” Dubé said.

The city has a number of capital project priorities, of which the downtown event centre is number two. Others include upgrading aging infrastructure, a community centre in Moncton’s north end and building a new Elmwood fire station.

“You could argue that when you have 17 priorities, maybe you have too many,” Dubé said. “Maybe you got to start revisiting those priorities and saying ‘What’s really, really important? What are the must-haves and what are the nice-to-haves?'”

City staff are recommending the city take about $1.4 million from its more than $10 million dollar reserves, as well as cut other costs by around $800,000 to cover the deficit.

There are other questions the city will also have to deal with. It is still in talks with the federal and provincial governments over the costs of the RCMP shootings in June.

Council will likely not know how much Moncton will be on the hook for until January.

The city also has a structural deficit and John Martin, the chief financial officer, says most of their costs are fixed. He estimated almost 94 per cent of the costs are fixed or semi-fixed, and the city is not bringing in enough revenue to cover them.

“If we don’t do anything, we’re going to be sitting her next year and we’re going to say ‘Oh My God, we’ve got a $2.5 million problem,” he told council, adding that council have to start discussing the 2016 budget in January, despite the fact that the 2015 budget has yet to pass.

He said they will have to consider whether that will mean service cuts or tax increases going forward.

Council will return Monday at noon in council chambers to vote.