Dark budget clouds on CBS’s horizon

By Craig Westcott/November 25, 2022

The likelihood of tougher times next year is high on the minds of CBS councillors. Three of them broached the subject on separate occasions at last week’s public council meeting.

The first was councillor-at-large Rex Hillier, who as chairman of the planning and development committee, was involved with the Town’s decision last year to extend its Covid-related policy of waiving fees on building and other permits.

Hillier began by highlighting some of the suggestions council heard from residents during the recent public consultations and an online survey.

“I’d like to thank all those people who took the time to complete the survey and I know our planning staff have had a look at the responses and pulled out the ones that most affect the planning department— and there were many,” Hillier said. “I’ll just list a couple as examples. For instance, some people felt we should have more building inspectors, some people felt we should have a better organized road network, some people felt we should have bicycle lanes, and some people felt we should spend more time planning for climate change. Some of those thoughts are new ideas for us and we’ll certainly commit to having a serious look at them. Some of the issues are old and councils have struggled with them for decades. And some of the issues we recognize as important and are taking steps to implement them.”

Hillier noted the planning department keeps a detailed record of the work that passes through the office.

“Year to date, the planning department has opened approximately 200 more files than at this time last year, and for the most part, for the past five years,” Hillier said. “These can be anything from a fence (application) to a building development. But more files obviously indicate more development and presumably more tax revenue.”

The number of compliance letter requests, which are an indication of house sales and mortgage activity, is on pace with 2021, which saw substantially higher activity than any year in the previous five years, Hillier pointed out. “This is an indication of a busy real estate market which should result again in increased tax revenue.”

However, the total value of construction projects is down this year compared to last year, according to Statistics Canada, Hillier said. “While our total construction values were significantly higher in the spring of 2022, they dropped off during the latter part of the summer and early fall. So, things have slowed down a little bit this year.”

Total housing starts are also down compared to last year, Hillier said, but still higher than what they were in 2019 and 2020.

“We know a large percentage of our budget comes from residential taxation, so this is a number that we watch very closely,” Hillier said.

Commercial development, which the Town would like to increase, Hillier said, is healthy and combined with the residential activity indicates CBS is still experiencing growth adn remains one of the fastest growing towns in the province.

“It’s obviously a place where people want to come and live,” Hillier said. “But, Your Worship, as I started out to say, this is all about budget time…and Planning will have to make some decisions. Will we still be able to absorb the $60,000 to $70,000 that the free building permit policy costs us each year? Or should we play the long game and take advantage of the future taxation from the work done under these permits? Also, we’re in a period of increased interest rates. How will that impact our starts in 2023 and how will that impact our budget?”

The next one to raise the budget subject, was councillor-at-large Joshua Barrett.

“I wanted to paint a bit of a picture on how we need to as a town incorporate and how we are planning on incorporating the reality of climate change and the impacts of climate change into our budgeting process,” Barrett said. “This is not news to anybody, but over the last number of years we’ve seen first hand the impacts of climate change, whether it is storm surges or windstorms. We’ve seen power outages and weather patterns continue to impact our community, our infrastructure, our homes, our natural spaces. It’s difficult to quantify the value we put on spending to mitigate the impacts because it goes into literally every decision, we make… Late last year we invested upwards of three quarters of a million dollars on addressing shoreline erosion at the wastewater treatment plant (in Kelligrews), we’re doing a coastline study at Long Pond… we replaced the pool roof… Beyond that the impact of climate change is also affecting residential use, so in planning we address flooding concerns, we’re doing a study regarding landslides at Manuels River, and these are all very real impacts and the money we’re spending on this is taking away from potential other programs and services. This is just the reality that we operate in.”

Some 30 minutes later, during her finance committee report, Deputy Mayor Andrea Gosse, raised the budget again.

“We’re still very much feeling the impact of Covid-19,” said Gosse. “Covid-19 seriously impacted supply chains, which has affected the cost of vehicles, equipment, and things that should have been replaced in 2020 and 2021 we couldn’t replace, they weren’t available. And now we’re looking at it and the prices are significantly higher. So those are things we have to take into consideration with the budget. Are we going to replace vehicles, are we going to upgrade equipment? These are things we are having a serious look at. And as everyone knows, inflation has seriously impacted our lives and it’s impacted the cost of day-to-day operations here at the Town by way of consumables – fuel, vehicle parts, tires, supplies for cleaning and paper supplies, PPE (personal protective equipment), food and canteen supplies – these have all increased exponentially and it’s very fluid, it’s hard to predict. So, in trying to put together a budget, it’s something we’re really having to look at very closely.”

The higher interest rates that the Bank of Canada have imposed to combat inflation, are also affecting the Town’s ability to borrow for large capital works projects, Gosse acknowledged.

“It also impacts the cost of borrowing on existing loans,” she added. “Anything we have for renewal in the next one to two years is going to be impacted by these interest rates.” 

Finally, the fees for regional services, which CBS pays to the City of St. John’s for the use of the Robin Hood Bay Landfiill and drinking water from Bay Bulls Big Pond are also going up, Gosse said, as are the standby fees paid to the St. John’s Regional Fire Department. The higher tipping fees at the dump translate into a minimum $200,000 increase next year, she noted.

“These are all costs that are out of the control of the Town, but they are going to significantly impact the budget,” Gosse said. “So, we’re looking at everything really, really hard. We’re going to try and meet the needs of the community and we’re looking at how we can maintain the current level of service and prepare a budget that minimally impacts our residents. But it’s certainly no easy chore and we’re not there yet.”

Mayor Darrin Bent said council hopes to present the budget before its next scheduled council meeting, which is set for December 6.