Budgets in balance

Before enjoying some holiday relaxation, local municipalities presented their Operating and Capital budgets for the 2010 fiscal year.

The towns of Labrador City and Wabush both presented balanced budgets with plans for community investment in the new year.

Labrador City unveiled a budget with revenue and expenditures of $12,965,179 and Wabush, $4,853,493.

In a public council meeting in Labrador City, Councillor Peter Reccord presented the budget on behalf of the Finance and Administration Committee. He outlined a budget centered on community sustainability and identified priorities as new environmentally responsible waste management, improved infrastructure, enhanced emergency response and the strengthening of recreation and volunteer bases.

Reccord identified waste management as the town's main challenge in 2010. The decommissioning of the Wabush incinerator and the opening of a new, temporary landfill site will cost the municipality an additional $600,000 per year, a 200 per cent increase in waste management costs compared to the current system.

"This increase is among the largest year over year increase in operational costs ever faced by the Town of Labrador City," said Reccord.

At the Wabush council meeting, Councillor Leo Dillon also identified waste management as a hurdle for 2010. The Town of Wabush anticipates an additional cost of $250,000 to implement these new waste management procedures.

Dillon noted this budget was especially difficult to draft. In addition to the new waste management facilities, he citied the financial burden of the recreation facilities, basic year-over-year increases for electricity, wages and fuel, and infrastructure issues.

Regarding recreation facilities, Dillon noted that the projected cost of running the arena and the Mike Adam Recreation Complex in the coming year is $1,100,000. Revenues stemming from the facilities are estimated at $210,000 - resulting in a predicted $890,000 deficit.

"Major support for upfront capital and long term operating expenses are needed from all arrangement with industry, both municipalities, and potentially the provincial and federal governments on a go-forward basis."

In Wabush, recreational user fees will be increased to off set inflationary costs anticipated in 2010.

Fees will remain unchanged in Labrador City, but the summer program registration fee will increase by $5.

Property values

Both municipalities acknowledged that residential property taxes will increase in 2010 despite efforts to off-set the impact of rising property values.

The Town of Labrador City announced it will lower the mil rate from 6.75 mils to 4.35 mils. In addition, the property tax rebate program will again be offered in 2010.

Wabush will decrease the mil rate dramatically, from 14 mils to 7 mils, bringing its rates in line with the provincial average.

The commercial mil rate in Labrador City will decrease from 22 mils to 20.5 mils, and will remain unchanged at 24 mils in Wabush.

With property values experiencing an average increase of 130 per cent and commercial properties an average of 15 per cent in 2009, property owners can still expect a tax increase.

The Town of Labrador City announced that it will increase residential water and sewer fees from $190 to $250 per household per year. The rate will stay at 2009 levels in Wabush.

The rates charged for industrial, commercial, institutional and industrial water usage will be set at $345 in Labrador City, and the metered rate will be set at $1.34 per 1,000 gallons. In addition, a new initiative will see the instalment of water meters in high use commercial establishments that will create an estimated $16,000 in new revenue.

In Wabush, commercial and light industrial water user fees will be increased to a flat rate of $500 per year, while industrial fees will increase to $1,200.

The method of calculating the fees for building permits will be revamped in Labrador City. Instead of being based on the estimated construction value of the project, these fees will now be calculated based on the floor area of the project.

Permits will be required for exterior projects, such as the replacement of windows, doors, and siding for residential and commercial properties. The building permit will be calculated at one per cent of the estimated cost of the construction value.

Capital works and expenditures

With regard to capital expenditures, the Town of Labrador City has budgeted for the replacement of two vehicles in the Public Works department and the purchase of new hydraulic rescue tools, commonly known as the jaws of life, for the fire department.

Funds are also allocated to replace the arena roof, design a new refrigeration room to meet new regulatory standards, retrofit the canteen area, and develop a wheelchair accessible bathroom.

Extension of the water and sewer infrastructure to the hospital/college site will be finalized this year with the construction of a booster pumping station, water storage reservoir and sewage lift station.

Labrador City Council has also made an application to the provincial government for a multi-year capital works agreement that, if approved, will allow for the purchase of a new fire truck and quick response vehicle for the fire department.

This agreement would also allow for the engineering design work for the replacement of the Harrie Lake Sewage Treatment plant, the purchase of an emergency generator for an additional evacuation assembly site, and a street reconstruction program.

Dillon outlined the capital expenditure projects the Town of Wabush will complete in 2010.

The Mike Adam Recreation Complex will receive $40,000 to revamp its front steps, $19,000 for a lighting upgrade, $10,000 for weight room equipment, $8,500 for a vacuum pump and $5,000 for a speaker system.

The arena will receive $47,000 in upgrades, while the fire hall will receive $20,000 for roof repair or replacement, $18,000 for bunker suits, and $2,000 for industrial equipment. Also slated are $36,689 for the multi-year roads agreement and $20,000 for digital mapping.

"Mr. Mayor, as you can see, this list is anything but extravagant. This work is a bare minimum to keep our town functioning well into the future of this budget," said Dillon.

By the numbers

In total, $5,076,851 of Labrador City's 2010 operating budget is earmarked for human resources, $2,465,736 for capital projects, $1,654,925 for supplies and services, $1,095,013 for garbage removal, $607,161 for the municipal portion of debt servicing, $519,240 for snow removal, $337,747 for the provincial portion of debt servicing, $292,202 for Hydro, $265,823 for subsidies and grants, $264,379 for professional services, $122,00 for insurance, $106,029 for travel and $24,740 for other fiscal services.

On the revenue side, of the total budgeted amount, $4,313,352 will come from IOC's annual grant to the town. $2,888,376 will be derived from residential taxes, $2,220,720 from commercial taxes, $1,073,090 from provincial grants, and $711,979 from federal grants. The remaining revenue will be garnered from the town's own reserves and government operating costs.

The Town of Wabush will continue to support the Teen Centre, increasing their donation from $7,000 to $10,000 in 2010. Wabush will also host the Combined Councils of Labrador's annual meeting in 2010, in which delegates from all across Labrador will visit the community. Dillon noted that, while the event will cost $3,000, it is expected to pay dividends to local businesses.

On the revenue side, Dillon noted that Wabush Mines has increased the town's contribution in lieu of taxes from $1.45 million to $1.8 million.

"This is a major show of support for the town and its residents," he said.

The remainder will be derived from various sources, including a municipal operating grant of $204,307. Dillon noted that this operating grant has continued to decline since 1986 while costs rise.

Regarding expenses, $1,100,110 of the budget will go towards recreational services, $926,705 to general government, $888,680 for environmental health, $750,300 to fiscal services, $688,542 to transportation, $226,189 to capital expenditures, $177,467 to protective services, and $95,500 to planning and development.

While addressing the challenges of balancing the municipal budget, Dillon noted that the town has been able to reduce and eliminate several loans in the past few years.

The Town of Wabush is forecasting a debt ratio of 11 per cent in 2010, down one per cent from 2009.

"The initiatives undertaken in this budget will leave us in a good position as we look at our future debt load," he said.

Noting that the budget does increase taxes, Reccord noted that it was necessary to do so primarily to accommodate the rising cost of waste management.

"This budget will allow council to provide our citizens with the highest standard of municipal services while continuing to invest in infrastructure."