Prince Rupert city council voted to cut $462,000 from the city's operations in the form of a three per cent across-the-board reduction to City departments, and are now turning to the public to decide how to proceed with this year's budget.
The cuts, which narrowly passed 4-3 when Mayor Jack Mussallem reluctantly cast the deciding vote, came at the behest of Councillor Anna Ashley. Ashley noted that $850,000 of the $1.175 million needed to balance this year's budget was in the form of one-time funding from realized reductions so far this year and drawing down $596,000 from the $1.6 million operating surplus, and that created great concern about next year's budget.
"If our budget is the same as last year, and it will likely be more because CUPE contracts are coming up and the cost of everything is going up... We're going to be starting out with a $850,000 shortfall right out of the gate," she said.
"If we take everything out of one time funding this year, what are we going to do next year... In terms of us being able to move forward with some certainty about the budget, we have to look at cuts."
Another catalyst for the idea was news that CityWest would not be paying the $500,000 dividend this year and was uncertain when the dividend would return. That, however, was a point of contention among council.
"Our budget will be sustainable if CityWest pays the dividend and if the Port Authority pays what they should. I am gambling that those will happen, and I guess you are gambling that they will not," said Councillor Joy Thorkelson, who also noted the City has ended up with a surplus every year in recent memory.
"It is a big if, and I am not budgeting on ifs... The bottom line is we're not getting $500,000 from CityWest next year and won't likely get it in the next year," countered Councillor Gina Garon.
The cuts, council was told, did not come without a price. Chief financial officer Dan Rodin said every $150,000 in cuts would equate to the lay-off of roughly 2.5 employees, meaning a $462,000 cut would leave roughly 6.5 employees out of work.
"That would likely come out of public works because some of the contracts we have, like the ferry and the fire department, have a required number of staff. So where do you look, you look to public works," he said, noting that layoff notices would need to be sent out right away to achieve the desired savings.
"Those people will find jobs elsewhere. They won't be coming back to the City of Prince Rupert."
Along with Mussallem, Councillors Ashley, Kinney and Garon voted in favour while Councillors Rice, Carlick-Pearson and Thorkelson opposed.
After the motion passed, council set about determining how to use those savings. Options included using a portion to negate any tax increase, using the whole thing to reduce the draw on the surplus, using a portion for the surplus and another portion put back into play service reductions realized this year or a combination of the above. When it came time to decide Mayor Mussallem, who teleconferenced into the meeting, motioned the decision be tabled until a public forum could be held to determine the priority of residents. Council agreed with that, setting the stage for a whirlwind series of meetings next week.
The public forum will be held on May 8, with council meeting to either give staff direction or vote on a budget on May 9. If council isn't prepared to vote on May 9, they will meet again on May 10 for first three readings. The budget will be passed on May 13, one day before the May 14 budget deadline.
"When it really comes down to it, we need to have a vision of where we need to go. Making drastic cuts at this point may not be the best visioning process," said Thorkelson.
"I feel like we just started our budget process instead of being at the end of it," added Garon.