City grapples with $25M shortfall

Mayor vows to put managers' 'feet to fire' to meet budget

Thursday, December 20, 2001

Senior city bureaucrats have been unable to close a $25-million gap in the municipal operating budget for 2002.

A memo obtained by the Citizen from city manager Bruce Thom to councillors said managers need more time to bridge that gap and estimates will be delivered to council about a month late.

"It is a very serious gap," Mayor Bob Chiarelli said yesterday.

Estimates were originally scheduled to be tabled on Jan. 9, but now that date has been pushed to Feb. 13.

Council is expected to approve the budget on March 27 after public consultation and committee scrutiny.

The budget is expected to total about $1.68 billion.

The operating budget covers the day-to-day activities of the city.

It will guide every aspect of operations in the coming year. It will affect how much money libraries get for new books and programs; if OC Transpo's fares will increase; and what programs social service agencies will be able to run.

Mr. Chiarelli also said the capital budget is "significantly" over budget. However, the mayor declined to reveal the size of that shortfall.

The capital budget is expected to be in the $309 million range.

"We're going to do some serious sweating" to meet targets, Mr. Chiarelli said.

The gap has caused managers to review their needs.

"Departments are required to go back to identify additional budget adjustments that may require program reviews," Mr. Thom wrote in the memo.

Mr. Chiarelli declined to say what programs might be dropped.

"Nobody is going to get everything they want," he said.

On Sept. 26, senior managers estimated the gap to be in the $50 million range.

On that same date, the mayor and council gave the senior managers tough new marching orders.

Managers were told not to increase taxes and that an amalgamation savings target of $22.5 million was expected.

"I've been very firm," Mr. Chiarelli said. "We have to do whatever is necessary."

The mayor said he wanted to put management's "feet to the fire" to get budget targets in order.

In particular, Mr. Chiarelli wanted to protect the integrity of last year's 10-per-cent tax cut.

Mr. Thom blamed some of the problems of meeting budget on the disbanded former cities.

"Budgeting practices of the former municipalities have been analysed in detail," Mr. Thom wrote. "In some cases, unsustainable base budgets have been identified both in terms of revenues and expenditure recoveries.

"Adjusting for these has contributed to the increased budget pressures," Mr. Thom said.

Mr. Chiarelli also said the budget has to take into account labour negotiations this year.

The mayor believes budgeting will be easier in 2003 and 2004.

That's because the federal government will begin distributing $2 billion worth of infrastructure money nationwide.

The province has also allocated $300 million per year for the next 10 years for transit.

"So there is light at the end of the tunnel," Mr. Chiarelli said.

However, the mayor cautioned that he did not know when that money would begin flowing.

© Copyright 2001 The Ottawa Citizen