Budget Squeeze at Ottawa City Hall

Daniel Proussalidis with Stephanie Kinsella
Friday, November 20, 2009

The city of Ottawa is banking on a normal snowfall for this winter season.

That's because the city treasurer warns councillors that there are no reserve funds to pay for extra snow clearing if needed.

Winter maintenance has a budget of $69-million dollars annually.

Normally, there is a reserve fund to pay for extra snow clearing during heavy winters.

But for yet another year, that reserve fund is at zero in Ottawa.

City Treasurer Marion Simuluk says that means there is no financial cushion should the capital be hit with more snowfall that it's prepared to deal with.

"If we have a bad winter that means we have to look to the rest of the city to have surpluses to absorb that. And if we have a really bad winter it will end up being on next year's tax bill," says Simuluk.

The city will also have to drain its regular reserve fund to cover the $35-million settlement of a lawsuit launched by Siemens Canada over the cancellation of the north-south light rail project.

That move could force the city to slow down its capital spending, which includes road repairs and upgrades.

While Ottawa could borrow money to cover next year's reserve, Simuluk says it would have to reduce capital spending by $13-millon per year in 2011, 2012, and 2013 to pay off the debt. These budget pressures come as councillors struggle to whittle down next year’s proposed property tax increase of 7.1%, which comes on top of new fees to cover waste collection and the green bin program that starts in January.