By Mark Squibb/December 30, 2021
Just minutes after passing Budget 2022, Paradise town council was faced with an unexpected bill for services rendered in 2021.
The Town will have to pay the City of St. John’s over $600,000 extra for regional fire services, not because of an increase of service, but because of an increase in pension costs.
“The operational budget for regional fire services is allocated between the three regional partners: Paradise, Mount Pearl, and St. John’s,” explained Administration and Corporate Services committee chairperson Elizabeth Laurie.
“The percentage allocated is based on the total assessed values for each partner,” she added. “Currently, the town’s share is 12.9 percent. The City of St. John’s received the December 31, 2021, actual evaluation report for their defined benefit pension plan. The plan’s discount rate was reduced, and as a result, the employer’s pension cost increased. So, in addition, a new schedule for special payments is mandated. Further to this, the City has decided to make an early payment on the unfunded liability to reduce future special payments. These additional pension costs have been allocated to each regional partner, accordingly, based on percentage. The Town will see an additional charge of $162,581 for the additional pension costs, and a charge of $442,925 related to the early payment of the unfunded pension liability for a total additional cost in 2021 of $605,543.”
The additional pension costs were not included in the town’s 2021 fire services budget, and so will be taken out of the 2021 operations budget.
Budget 2022, meanwhile, saw the budget for firefighting jump almost 10 per cent, from $4.43 million that was budgeted this past year, to $4.84 million.
The motion passed unanimously with no discussion.
“Year over year, these costs are growing considerably,” Laurie noted in the budget speech. “For example, in 2013, fire protection and water services cost $1.2 million and today, we budget $8 million for these essential services.”
Both water services and firefighting is provided by the City of St. John’s and managed by regional boards which pass on the costs to Paradise and Mount Pearl.