Minimum wage increase to cost city $248,000. First budget draft calls for big levy hike

A first draft of the 2018 city budget proposes a 3.02 per cent tax levy increase for Sault Ste. Marie ratepayers.

The preliminary document, which will be presented to City Council on Monday, proposes spending of $169.5 million, offset by revenue of $57.3 million.

That leaves $112.2 million to be raised through municipal property tax levy.

Councillors will be told Monday that just 1.69 per cent of the proposed levy hike is attributable to maintaining city services.

Just under one per cent of the increase is blamed on a reduction in the Ontario Municipal Partnership grant and 0.41 per cent is attributed to levy boards and outside agencies.

The city expects to save $403,000 from getting out of the day care business, but a provincial decision to increase the minimum wage will cost ratepayers $248,000.

Contractual increases to salary and benefits will cost $1.75 million more next year.

Retiree benefits will be up $175,000.

Lower ridership on Sault Transit add $209,000 to the preliminary budget.

Proposed user fee increases will save $281,000.

Preliminary budgets are historically subjected to heavy council scrutiny and the levy increase will almost certainly be reduced by the time final tax rates are set early next year.

The trimming process will begin when further budget deliberations take place on Dec. 5.

The City of Sault Ste. Marie serves about 75,000 citizens in 34,590 households.

"Of the $169.5 million in expenses for 2018, approximately 80 per cent relates to mandated services," says a staff report to City Council.

"These are services which the municipality is legislatively required to provide. The remaining 20 per cent of expenses are for discretionary services, which although not mandated, will have ramifications to the community if the service is terminated or decreased."

Forty-nine per cent of the proposed 2018 budget goes to salaries and benefits.

"Compensation is governed by contractual agreements and thus rates of pay are not controllable by the departments. The budget levels reflect rates in effect for the last contract," the staff report says.

Sault Ste. Marie's tax rate is higher than Sudbury but lower than Thunder Bay and North Bay.

On Monday, city officials will emphasize a different metric – property taxes as a percentage of a taxpayer's income.

By that standard, which staff will argue is a recognized benchmark for comparisons between cities, Sault Ste. Marie ranks lowest among Northern Ontario municipalities.

Monday's City Council meeting will be livestreamed on SooToday starting at 4:30 p.m.