SAINT JOHN -- Saint John common council passed what has been described as a "transitional" budget Monday night as it tackles a multimillion-dollar deficit that's looming large over the city.
The city's financial picture is fairly gloomy and passing the $166-million budget for next year is expected to be the first step in the financial recovery.
"We're going to wrestle our deficit to the ground over the next 12 months," said Saint John Mayor Don Darling.
A budget report to council says "the city's restructuring plan will be implemented in 2020, for which 50 per cent of a projected $10-million deficit will be addressed through workforce adjustment."
"In our budget, about 60 per cent of our costs are people-related costs, and those costs have risen at a rate twice the rate of inflation," Darling said. "More than $100 million has been paid in wages above inflation in the last 15 years."
Darling says they plan to deal with this through things like attrition and reducing or eliminating casual staff in the summertime.
"We're going to try to do it as painlessly as possible but obviously there is going to be some pain," said Saint John Coun. John Mackenzie.
Saint John's financial woes have been many years in the making. Some of the challenges outlined in the city's long-term financial plan include expenses growing at three times the rate of revenue, the city having the highest property tax rate in the province, and employee wages and benefits rising at an unaffordable rate.
"Right now everybody's in denial, more or less," said Saint John Deputy Mayor Shirley McAlary. "They feel that, I guess they think you know, something will come and that something will happen because we've never really had to cut a budget terrible -- we've cut budgets in the past, but this is going to be a bad cut."
The city says this budget will allow them the time they need to make sure the budget for 2021 is balanced.
