Prince George, BC - The City of Prince George cut $2,750,000 from the operating budget in 2020 and 2021.
The City is entering budget deliberations on Monday, January 24. As citizens may know, this will be Council’s third round of budget deliberations since Covid-19 was declared a global pandemic in March of 2020. What residents may not be aware of is the steps Council and City Administration have taken to curb spending, cut costs, and save taxpayers money during these financially challenging times.
In a report to City Council on the agenda for Monday’s budget meeting, City Manager Walter Babicz provides an overview of recent measures enacted to address the economic times brought on by the pandemic. For example, Administration has undergone a series of changes to reduce the number of departments, streamline functions, and reduce operating costs.
The following measures achieved approximately $2,750,000 in annual operating expense reductions:
- In 2020, non-labour budgets were reviewed by each department head. Expenses such as training, travel, and conferences were suspended with the intention of their return when public health orders were lifted. Department heads also reviewed non-labour budgets to identify expenses that could be eliminated permanently without significant impact. This review resulted in the elimination of annual non-labour expenses in the amount of $349,440.
- The management/exempt employee group was assigned a 0% cost of living salary increase in both 2020 and 2021, resulting in approximately $500,000 of total operating expense reductions.
- In November 2020, eight management/exempt positions and four unionized positions were eliminated, resulting in a total of $1,552,246 in operating expense reductions.
- In 2021, further organizational structure changes were implemented resulting in a total of $365,592 in operating cost reductions.
No tax increase in 2021
In spite of lost revenue and increased expenses due to the pandemic, Council approved a budget in 2021 with no tax increase. Council authorized the use of $3,072,625 of Provincial Safe Restart Grant funding in 2021 to counter lost revenues projected in the budget.
Year-end projections for 2021 suggest that the City will not need to use any of the Safe Restart funds authorized for use by Council in connection with the 2021 budget due to cost savings throughout the year. Administration is advising Council that the City’s Safe Restart Fund balance should be restored to $6,110,000. Administration’s recommendation is to use the Safe Restart funds as intended to mitigate the reduced revenues the City has sustained.
For further information about upcoming budget deliberations, including how residents can provide feedback, please visit the City website.