Deficit budget for Charlottetown contravenes P.E.I. legislation

Charlottetown City Councilintroduced its first budget deficit since 1993,even though provincial legislation says the city isnot allowed to do that.

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The city is projecting it will go $1.5 million into the red in 2016, even after cutting positions including two police sergeants, increasing fees and fines for parking and increasing recreation fees.

"This budget was very difficult," finance committee chair Melissa Hilton said in her prepared budget address.

While costs continue to rise, Hilton noted revenue from the province is up only marginally from its level in 2008.

"Our current taxation system is neither adequate nor fair," said Hilton, although she noted some progress has been made toward a new fiscal framework for municipalities under the MacLauchlan government.

Hilton said she didn't know how the province would react to council tabling a deficit in contradiction of the Charlottetown Area Municipalities Act, but she noted the city did the same thing in 1989, 1992 and 1993.

Snow removal costs for 2015 caused the city to come in $3 million over budget last year. Council says it's spreading that deficit over two years.

"I am not happy to preside over the first deficit budget since 1993, yet I feel and council agrees that the only other choice was to raise the city portion of taxes by five per cent," said Hilton.

There are no increases in the city's budget to property taxes or utility rates.

Fiveper cent cut to departments

The city asked all departments to cut costs by five per cent.

Four positions will not be filled in order to cut costs, including two Charlottetown Police sergeants and two directors with city administration.

Parking fines and fees will rise.Metered parking will increase from $1.10 to $1.50 an hour.

There will also be increases in rental rates at Cody Banks and Simmons Arena.

While most costs are being cut, compensation for councillors is increasing, as recommended in a consultant's report delivered to council last year by Peter Kelly, recently named as the city's new CAO. Funding for council salaries and benefits is set to increase from $360,000 budgeted in 2015 to $458,186 in 2016.

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