Summerside city budget strikes a good balance

Journal Pioneer staff
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Summerside city council will be spending some cash, reducing the debt a bit, and taking a little more money from residents this year.
Council laid out its plan for the next fiscal year when it released the city budget Monday evening.

The tax rate won’t be going up and has remained the same for 15 years now. However, water and sewer rates are heading upwards by just under $3.50 per month per household.

The increase is to cover the water utility’s deficit, caused by a higher than normal number of water main breaks this past year. With older infrastructure, this is bound to happen. Although there’s been new water systems installed in some areas, there are still plenty of older water mains throughout the city.

Flooded streets and residents having to go without water until the broken mains are repaired, seemed to be happening frequently this past year. Any of those residents who had their water shut off would likely agree that the city’s plan, to invest $737,000 for water utility improvements, is necessary.

The city’s waterworks is not the only sector that will be getting an injection of funds. Just over half a million dollars has been allocated for economic development initiatives. The budget address was short on details, but attracting new business and helping those already here to grow is key to remaining a viable and vibrant municipality. 

On the other hand, it is encouraging to see that council won’t be overspending and is balancing spending with savings.

The council has planned to reduce its operating budget, which has an $800,000 deficit.

Finance chairman, Bruce MacDougall, pointed out that as the city’s expenses have increased over the past three years by seven per cent, revenues have not kept pace. 

He blames the provincial government.

“The city’s revenue generation has been negatively impacted by the government of Prince Edward Island’s adherence to a revenue-generating formula that holds back our great city from realizing its full potential,” said MacDougall.

He projected the city will lose about $7 million in revenue in the decade between 2008 (when the new formula was implemented) and 2018.

In turn, the provincial government blames the federal government for reductions in its revenues.

At first glance, the city’s budget appears to have struck a good fiscal balance, as it expects to continue to pay down the municipality’s large debt load.

In the coming year, the plan is to cut into the long-term debt by another $2.1 million. It’s not a lot, considering the debt is over $66 million, but the city’s overseers are at least knocking it down a bit more each year. At end of 2013 it was $66,680,000, a reduction from the previous year’s $69,800,000 million.

At least it’s moving in the right direction.

Geographic location: Prince Edward Island

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