General administration up significantly
© Labradorian file photo
Happy Valley-Goose Bay Mayor Jamie Snook said there was little room for any budget cuts in 2014.
The day-to-day costs of operating the Town of Happy Valley-Goose Bay has gone up significantly since 2013, according to the latest budget, which was passed on March 7.
Nearly every category, including general administration, protective services, transportation services, environmental health, and more, has a bigger budget in 2014 than 2013.
The biggest increase, by far, is in general administration. In 2013, the total costs of general administration was $4,943,460. In 2014, the budgeted costs total $5,631,350; an increase of $687,890.
Out of the $687,890, nearly half-a-million dollars ($494,935) is from employee salaries.
According to town manager Wyman Jacque, the large salary increase comes, mainly, from four new positions the town is adding this year: director of engineering, director of human resources, full-time fire chief, and a waste water treatment plant operator.
Town clerk Hayward Broomfield also points out that the town is currently in negotiations with the employee’s union. When the negotiations are settled, there will definitely be a raise on the table.
“The last contract expired Dec. 31, 2013,” said Broomfield.
“They’re not going to go away without some kind of increase.”
Happy Valley-Goose Bay Mayor Jamie Snook said he wasn’t surprised to see increased costs in a lot of areas, including salaries. Snook said the town is growing, so municipal services are going to grow with it.
“One of the things that the John Walsh report highlighted, when we released that earlier in the fall … there were key positions that were missing from the organization that had to be put into place,” said Snook.
“We also knew that the town was in the middle of a union negotiation. So it didn’t come as a surprise.”
Snook hinted that, as the Muskrat Falls project ramps up and starts doing more hiring, the town might have to offer even more competitive wages to keep qualified employees.
“I’m actually worried that, over the course of the next four years, the town is going to be under a lot of pressure, as is a lot of other employers, trying to retain people against the Muskrat Falls project,” said Snook.
“You got to offer them market wages, or else you ain’t going to get them. So it’s going to be a difficult time over the next four years for a lot of employers.”
The costs of environmental health has also gone up significantly in 2014. Last year, $808,760 was budgeted in this category. This year, $1,062,010 is set aside, a difference of $253, 250.
The main difference for environmental health is much higher costs for sewage collection and disposal, which is up $123,350, and garbage/waste collection and disposal, which is up $171,000.
According to Jacque, the sewage collection and disposal costs are much higher in 2014, because this is the first year the new sewage treatment plant will be online for 12 full months. In 2013, the town only had to budget for half-a-year’s worth of operation.
“This year, we’ve projected for a full year of operations on our sewage treatment,” said Jacque. “When we did the 2013 budget, it was anticipated the sewage treatment plant be online last year. So we budgeted for six months of operations.”
Garbage/waste collection and disposal is up in cost because a new company has taken over the garbage collection contract. According to Snook, for years the town was getting a bargain price on garbage collection. Last year, the town paid just $234,110 for collection. This year, that price has soared to $405,000.
The mayor claims the new cost is more inline with what the market demands in other municipalities.
“The cost of garbage collection has gone up this year. The contractor that had been in place for decades exited the business. And the town had been benefitting for a lot of years on a very favourable price,” said Snook.
“The winning bidder’s price is more now in line with the market and what other towns have been paying.”
Total expenditures down
Despite most budget categories increasing since 2013, total town expenditures are actually less this year from last. That’s because Happy Valley-Goose Bay’s new wastewater treatment plant was completed in 2013, taking several million dollars off of the capital expenditures budget.
In 2013, the budget for capital expenditure out of revenue was $12,595,960, most of which was costs associated with the construction of the wastewater treatment plant. In 2014, with the construction completed, that budget is down to $5,530,865.
According to Broomfield the current capital expenditure includes renovations to the town office and the E.J. Broomfield Arena. The town has also applied to the Building Canada Fund to get money for water and sewer infrastructure in certain areas of town.
The total expenditures for Happy Valley-Goose Bay in 2013 were $21,464,018.26, while 2014’s expenditures total $15,957,113.62.
No fat to trim from expenses
Mayor Snook claims that there were few areas where the town could lower costs instead of raising them. Some areas, he said, had little if any money to operate on. So, increased costs in most areas were inevitable.
“In a general sense, when we went through every bit of the budget, there had basically been no money there for a number of things,” said Snook.
“So when we went through it … to see if there were areas where the town could actually save money and cut budgets, it was quite obvious … there’s not a lot areas that could be cut. The organization was already pretty lean, so to speak.”
Snook mentioned as an example that more money needed to be spent on playgrounds, parks, and recreation to keep up with the demand from users. The total expenditures for recreational and cultural services for 2014 are $297,250, which is $47,500 more than last year.
“So, when we’re advocating changes and improvements, as a council … you got to put money towards it, or else things in the town don’t change, they just stay the way they are,” said Snook
The town is planning to receive $4,079,180 this year in residential property tax, $406,222 more than in 2013.
Surprisingly, the town is budgeted to receive $1,493,905 from commercial/non-residential properties. This is $9,494 less than 2013, despite taxing the same 606 properties.
According to the 2014 budget, the difference comes from lowered assessed values. In 2013, the 606 commercial properties were assessed at $159,553,619 in total. In 2014, that total value is $1,401,741 less.
It’s an issue town officials couldn’t explain to The Labradorian.
“That’s interesting,” exclaimed Jacque.
Sean Martin, executive director of Newfoundland and Labrador’s Municipal Assessment Agency told The Labradorian that, according to his numbers, non-residential/commercial property values are actually up in Happy Valley- Goose Bay. In 2013, the agency valued the properties at roughly $141 million. In 2014, those values are at roughly $146 million.
But, according to Martin, it’s not unusual for assessed values between the agency and a municipality to differ. Each town has it’s own way of categorizing non/residential commercial properties, which affect the community’s tax structure.
“We don’t provide a breakdown because it depends on what you define as residential or non-residential or commercial. We don’t use those same designations, necessarily,” said Martin.
“Each municipality makes its own tax structure.”
Tipping fees aimed at outside contractors
One of the biggest policy shifts from town council, which is expected to generate $100,000 in revenue this year, is a new tipping fee for using the town dump.
While individual residents do not have to pay to dump their garbage, commercial vehicles both inside and outside the municipality will have to pay for each load.
For commercial waste originating from within the town boundaries, the fee schedule is as follows:
• Trucks greater than 10-ton capacity – $100/tip;
• Trucks with 1-10-ton capacity – $50/tip;
• Trucks with one-five ton capacity – $30/tip;
• Pickup truck with trailer – $20/tip;
• Pickup truck – $10/tip.
Companies with waste that originated from outside municipal boundaries, such as Muskrat Falls, will pay significantly higher fees:
• Trucks greater than 10-ton capacity – $150/tip;
• Trucks with 1-10 ton capacity – $75/tip;
• Trucks with one-five ton capacity – $50/tip;
• Pickup truck with trailer – $50/tip;
• Pickup truck with one ton capacity or less – $15/tip.
Mayor Snook said the new fees were inspired by the amount of Muskrat Falls contractors using the local dump. The town is now demanding that they pay their fair share for its usage.
“It’s obviously directed at contractors that are getting business from Muskrat Falls and using up the life of the landfill,” said Snook. “So, it was an initiative of council to offset some of the costs of operating the landfill from those businesses.”