St. John’s city council is reporting a surplus of $3,075,597 for 2017.
The city will use the surplus, as well as reserve funds, to pay down $6 million of its $32.8-million pension debt – a move that means the city won’t need to make payments on the pension debt for another five years, and saves $757,500 in interest.
Coun. Dave Lane, the lead for finance, said Monday the reduction in pension payments over the next five years means some mill rate relief for taxpayers.
“What we’re trying to do at all times is minimize the burden on taxpayers through mill rates, and so by reducing the cost of our budget for 2019 for sure, that’s definitely going to enable us to, at least by that amount, keep our mill rate down.”
Council is still predicting a $12-million deficit for 2019, but Lane said reducing the pension debt provides both immediate and long-term benefits to taxpayers.
“Just like a homeowner should be trying to pay down their credit card debt as quickly as possible, we’re trying to pay down our pension debt as quickly as possible because that ensures that we don’t have all these payments coming that we could be avoiding.”
The surplus was discussed at the city council meeting Monday evening, when Lane presented the executive summary report on revenue and expenditure. Council unanimously approved the report and the use of surplus funds to pay down pension debt.
Mayor Danny Breen said it’s a “prudent use of those funds,” while Coun. Hope Jamieson called it an “excellent move” and Coun. Wally Collins said it was “common sense.”
Despite using reserve funds along with the 2017 surplus to pay down pension debt, the city still holds $6 million in reserve as protection against unforeseen events.
Council used money from the surplus reserve to pay down pension debt last year as well.
The city is also looking at investing some of its reserve funds into energy-saving programs and technologies to bring down energy costs for the city, which Lane said would have an indirect benefit for taxpayers.
Council will hold three public meetings for residents to learn more about the budget and ask questions.
The first will be held on Wednesday, Oct. 17 at Waterford Valley High School, a second on Thursday, Oct. 18 at the Paul Reynolds Community Centre and a third on Tuesday, Oct. 30 at City Hall. All meetings will take place from 7 to 9 p.m.
There will also be a Facebook Live event on the city’s Facebook page on Oct. 25, tentatively set to start at 7 p.m.