With new services comes higher costs and an inevitable challenge to balance the books.
Trail councillors are already talking dollars before they get to the nitty gritty of budget in the new year.
Notably it’s very early in the game, but at this point, the bottom line is projected to increase 9 per cent or $1,000,000 - most of that is due to upcoming operations in the integrated library/museum/visitors centre, collectively named the Riverfront Centre.
“The primary cost driver in the 2018 Budget projection is the new Riverfront Centre,” confirmed Chief Administrative Officer David Perehudoff. “Including the various services that will be provided and the new debt that has been issued to fund the capital cost of construction.”
Hours of operation, staffing levels, even keeping the lights on, will directly impact next year’s budget, hence the taxpayer’s pocketbook.
To get a firm grip on what those factors will be once the Riverfront Centre opens, Trail officials are currently reviewing the possibilities.
“Council will be holding a budget meeting in November with the stakeholder,” Perehudoff said. “To get a better handle on the proposed service levels and expenditures before any final decisions are made.”
Economic development will put another dent in the 2018 budget.
After withdrawing from the regional service, Trail will directly fund the Lower Columbia Initiatives Corporation (LCIC) with almost $80,000 for a city-focused service.
“The LCIC results in a direct increase in costs for the city in the context of the expenditure budget,” Perehudoff noted. “But the regional requisition will decline by a like amount and therefore the net cost difference should remain unchanged.”
Aside from the usual two per cent increases for inflation and labour costs, the new terminal at Trail Regional Airport also comes into play. However, Perehudoff says the ATB (Airport Terminal Building) accounts for about $17,000 or a small portion of the overall increase.
“The operation has been restructured and there were previous expenditure budgets for salaries and wages for public works crews to respond to the airport,” he explained.
“The new full-time position (Airport Maintenance Technician) will greatly reduce this need and reduce costs with offset (to) the overall expense.”
The two new part-time airfield maintenance jobs will also have little impact, he said.
“The previous volunteers were compensated so there is not a significant increase in this expenditure as far as the two part-time Airport Operations Specialist positions are concerned.”
Perehudoff says, initially the new ATB will not result in significant operating costs.
“The city will generate revenue from a lease with PASCO who previously paid rent to the Flying Club and the city has also sold advertising to offset the building’s operating costs,” he clarified.
“In this way, we have been able to reduce the overall budget impact and hope to keep the increase in the net deficit to a minimum. We are also looking forward to increased passenger use and revenue as more people see the benefits of the Trail airport,” Perehudoff said.
“But we have not made any significant adjustment in this revenue figure and would hope that results in 2018 will result in a lower deficit than forecast.”
Further review forecasts the total 2018 airport operating budget at $429,100 (the numbers stands at $407,600 this year) and is offset by direct revenue in the amount of $320,000.
The net increase in the 2018 budget is $16,950, considering the net loss forecast to increase to $109,050 from $92,100 last year, clarified Perehudoff.
“In real dollar terms, this increase is marginal when considering the improvements being made at the Trail Regional Airport.”
Finally, the new Collective Agreement, which extends through to 2020, includes an annual two per cent wage increase.
“Most of the services the city provides, involve a high labour component and costs must be adjusted to deal with this,” Perehudoff reported.
The new agreement also indicates that if services are contracted out, there must be a 15 per cent or greater cost savings.
He added, “If council wanted to pursue this more directly, specific service areas would need to be targeted with a view to compare the costs of in-house service versus that of contractors.”
Once operations for the primary 2018 budget driver, the Riverfront Centre, are worked out next month, council will direct staff toward a palatable tax increase or “target” which usually begins around six per cent.