Moncton warned about future spending as economy cools

Moncton’s chief financial officer is warning city councillors that they cannot keep spending the way they have grown accustomed to in recent years.

John Martin will unveil the city’s proposed budget for next year at Monday night’s council meeting. He will use the presentation to remind city politicians that the local economy is not growing as fast as it used to.

The warning comes as the city is embarking on a $107-million future downtown sports and entertainment centre.

Martin said he is worried about the number of major projects on the city's wish list.

“So when your revenues are falling and your expenses are growing, you've got a problem that you have to deal with,” he said.

The city wants to build a new police station for an estimated $42 million, along with a new fire station, a recreation centre in the northwest part of the city and it wants to repurpose the Moncton Coliseum

But the city has lost $6 million in provincial grants, as well there is less property tax coming into city coffers because of a stagnant housing market.

He said there were only five subdivisions created last year as opposed to 15 the year before.

The cooling off of the city’s housing markets means revenues may not grow at the same rate as they did in previous years

“If you remember, seven or eight years ago we were seeing lots of growth in the city, fast, rapid growth. growth in the value of our homes, things like that,” he said.

“We're seeing that that is slowing down a bit. There's a large inventory of houses that need to be sold or moved. And until those things happen, the prices are going to be suppressed and that will suppress the amount that we'll receive as far as an assessment lift.”

On top of slowing revenues, Moncton has to dig deep to pay for a large, unexpected expense.

The city needs to pay $1.2 million for RCMP services after the June deaths of three constables.

Martin said he can just balance the budget for next year but that's it.

“We have a hole in our revenue that we have to fix,” the chief financial officer said.

“And until we do, I'm encouraging them to take the time to sit back and think about it strategically.”