Montréal 2016 Budget - Keeping focus on rigorous management, performance and investment

MONTRÉAL, Nov. 25, 2015 /CNW Telbec/ - The Mayor of Montréal, Denis Coderre, and the Chairman of the Executive Committee responsible for finances, Pierre Desrochers, presented today Montréal's 2016 Operating Budget, which stands at $5,061.2 M, up 2.4% or $120.2 M compared to the 2015 Budget.

This increase results mainly from a $120 M increase of upfront payments of capital investments, which is one of the key elements of the city administration's plan to rebuild Montréal. However, the increase of operating expenditures stands at 0.5% only compared to the 2015 Budget and at 0.3% compared to the 2014 Budget. The anticipated increase for 2016 is in line with the previous budgets which emphasized expenditure control.

"Our administration is now at mid-term and this is our third budgetary year. We are continuing our relentless efforts to achieve the plan that we devised when our administration took over at City Hall: rigorous management of municipal spending, massive investment in aging infrastructures and an in-depth administrative reform to make Montréal a more successful and competitive city. Of course, we are remain true to our commitment not to increase general tax charges beyond the inflation rate, while continuing to provide quality services to Montrealers," said Mayor Coderre.

According to the Conference Board of Canada, the inflation rate for the Montréal region will be 2.3% in 2016.  

Growth of tax charges – Residential properties
General tax charges will increase by 1.9% for residential properties, which meets the objectives of the administration to limit the increase at inflation level.

The tax charges under city council's responsibility increased by 1.9% for residential properties, representing a 1.8% increase of total tax charges for these properties. Overall, borough council decisions led to a 0.1% increase of the tax charges for residential properties, for a total of 1.9% citywide.

Tax charges – Non-residential properties
The tax charges under city council's responsibility were increased by 0.9% only for non-residential properties, or half of the increase announced for the residential sector. This decision to limit the increase of tax charges for non-residential properties was made to help Montréal businesses improve city competitiveness and promote economic development. This measure will cost Montréal $18 M annually. All non-residential property owners throughout the territory will benefit from this measure.

"By doing this, Montréal wishes to show the business community that it is ready to go further and change municipal taxation elements to set conditions conducive to creating jobs and help businesses establish themselves in Montréal and remain in the city. This is a first of several significant moves. In 2016, we will further explore this avenue by examining the possibility of implementing sectoral tax measures to encourage key areas of the Montréal economy, including major sports and cultural events or local trade," said Mayor Coderre.

Mayor Coderre took the opportunity to announce the creation of a special task force with a mission to examine various measures, fiscal or other, to improve the potential for economic development in Montréal. This will also take into account the new powers and tools required by the city as part of the Loi sur la métropole, which should be tabled in February 2016.

Borough taxation
The boroughs are responsible for indexing their services tax to ensure total indexation of their budget. In 2016, the borough councils overall have increased services tax revenue by 1.6%. These decisions, which are under the control of each of the councils, have the effect of increasing, on average, the total tax charges of residential properties by 0.1%. These decisions have a negligible overall impact on non-residential properties.

Variations of total tax charges
Owners of residential and non-residential properties wishing to learn more about the variation of their property's total tax charges may consult the Table titled: Change in total tax charges between 2015 and 2016, by borough, in the document Operating Budget At a Glance 2016. This Table presents the variation of total tax charges of Montréal taxpayers, by borough, including the effect of the variation of the borough taxes. However, the tax account of taxpayers may decrease or increase in varying proportions, due in part to the increase of the property's assessed value compared to the increase in value of other properties in Montréal.

Upfront capital payments
The annual increase of upfront capital payments enables the city to maintain borrowing at the level set by the city's debt management policy. This is a responsible way of doing things and represents a fairer approach on an intergenerational standpoint. The city does not put undue debt pressure on future generations. The overall increase of up-front payments was made possible, amongst others, through rigorous expenditure management.

"Last year, we established a strategy of making higher upfront capital payments, with an additional $40 M allocated to this effort. This year, we are spending an additional $120 M, for a total of $204.6 M in 2016, including contributions from the Water and Roadwork Funds. Such cash payments will climb next year and every year through 2024 by $80 M a year. The challenge is huge, and the pressure to find additional funds for the upfront capital payment plan will grow year after year. This is why we must stay the course and maintain tight control over public monies, so we can create sufficient room for manoeuvre," said the Chairman of the Executive Committee, Pierre Desrochers.

Five-Year Staff Reduction Plan
The ongoing implementation of the rigorous Five-Year Staff Reduction Plan to streamline our workforce led to the reduction of 214.2 person years in the 2016 Budget. In the Operating Budget this translates into salary savings of $10 M. In 2016, the boroughs have also applied plan-specific measures, but kept savings to balance their budgets.

Pension plans
Following the adoption of Bill 15 (An Act to foster the financial health and sustainability of municipal defined benefit pension plan), the city intends to continue negotiations with union partners to find sustainable solutions to reduce pension plan costs. The anticipated effects of this act, together with the good performance of our retirement funds from 2012 to 2014, allow us to anticipate savings of $103.6 M in 2016, or 25.3% less compared to the budgeted cost of pension plans in 2015.

Overall remuneration
Montréal is gradually resuming control over its payroll spending. In 2012, overall remuneration accounted for 53.1% of the city budget. Under the Five-Year Staff Reduction Plan and new government action on pension plans, this proportion shrunk to 48.6% in 2015 and will stand at 46.4% in 2016.

Central departments
The central departments have made huge efforts to control spending growth, which in addition to taking responsibility of the non-indexation for certain credits other than those related to remuneration, have achieved a staffing optimization plan, which led to savings of $31.5 M.

Borough financing reform
The implementation of the borough financing reform will continue in 2016, with an additional credit adjustment of $16.1 M. An additional $3.3 M was added to these credits to connect sewers on public property. This budget also provides for the creation of five professional positions at the Direction de l'urbanisme, to support the boroughs, particularly for urban planning operations and urban project management. These new positions meet the recommendations of the borough financing reform.

Société des célébrations du 375^e anniversaire de Montréal  
The 2016 Budget provides for a contribution of $14 M to the Société des célébrations du 375^e anniversaire de Montréal, an increase of $4 M compared to 2015.

Société du parc Jean-Drapeau
A contribution of $13 M for the Société du parc Jean-Drapeau, up $3 M.

Public transit
The 2016 Budget provides for an overall increase of $25.1 M of the city's contribution to public transit, including an increase of $20.7 M of the regular contribution to the Société de transport de Montréal, for a total of $429.8 M in 2016, or an increase of 5.1% compared to 2015.

Over a three-year period, or since the 2014 Budget, and since the Coderre administration took over City Hall, Montréal's regular contribution to the Société de transport de Montréal increased by $58.2 or 15.7%. Montréal paid an additional contribution of $15.5 M in 2014 to cover the Société's 2013 deficit.

"Our contribution in 2106, which is much higher than the anticipated 2016 inflation rate of 2.3%, shows that the municipal administration is sensitive to the needs expressed by the Société de transport de Montréal to achieve its goals in terms of sustainable mobility increased ridership," said Mayor Coderre.

The city will also contribute $64 M to the Agence métropolitaine de transport, an increase of $0.4 M.

Social diversity
The 2016 Budget provides for an additional contribution of approximately $0.7 M to the Centre for the Prevention of Radicalization Leading to Violence, for a total amount of $0.9 M in 2016.

Public safety
The 2016 Budget provides for allocations of $680.4 M for the Service de police de Montréal and $351 M for the Service de sécurité incendie de Montréal.

Water management
The 2016 Budget provides for $382.5 M for water management, an increase of $5.6 M.

Roads
The 2016 Budget provides for $138.1 M for municipal roads, including $5.9 M for pothole and crack repair, an increase of $1.7 M.

Solid waste management
The 2016 Budget provides for an allowance of $160.6 M for solid waste management, down $5.4 M from the 2015 Budget. This was made possible thanks to a reduction of contract costs and waste volume. An amount of $1.8 M was used to finance expenditures related to food waste management.

Cultural and recreational activities
The 2016 Budget includes $533.1 M for cultural and recreational activities, up $20.0 M, including:

• $73.2 M for Space for Life (Biodôme, Botanical Garden, Insectarium and Rio Tinto Alcan Planetarium)
• $13.9 M for the Conseil des arts de Montréal, an increase of $0.5 M compared to 2015
• $5.9 M for the Pointe-à-Callière Museum of Archaeology and History, an increase of $0.4 M compared to 2015

The 2016 Budget provides for $6.7 M for the urban forest (tree planting and the fight against the emerald ash borer), including $1 M to support and encourage interventions on private properties in at-risk areas, in addition to the interventions that have already been carried out on ash trees growing on public property. A budget of $12 M is also included in the 2016 Three-Year Capital Works Program ($36 M over three years, from 2016 to 2018).

Snow removal
The 2016 Budget provides for $159.4 M for snow removal, an increase of $3.7 M compared to 2015.

Economic development
The 2016 Budget provides for $15.3 M for success@Montreal (PR@M- Industries), to promote economic development in Montréal, an increase of $2.3 M compared to the 2015 Budget. Also, Montréal will contribute $2.1 M to the Concertation régionale Montréal organization to support and ensure coordinated leadership of elected officials and social and economic key players of the Montréal urban agglomeration, following the dissolution of the Conférence régionale des élus, amongst others.

Smart and digital city
The 2016 Budget provides for the injection of more than $1.9 M in the Bureau de la ville intelligente et numérique, to make Montréal an international leader among smart and digital cities, in accordance with the action plan that stems from the 2014-2017 Montréal Smart and Digital City Strategy. This investment follows the creation of the Bureau, in 2015, with a budget of $0.5 M. Added to this amount is a budget of $1 M for deploying secured wireless networks throughout city buildings and in certain public spaces.

Launching of the new visualization tool Vue sur le budget
Montréal took advantage of the presentation of the 2016 Budget to launch simultaneously the first version of the new visualization tool Vue sur le budget, which enables citizens to better understand and have easy access to the city's budget information. Montrealers may have access to this new tool at the following address: ville.montreal.qc.ca/vuesurlebudget. This is the third visualization tool to be introduced by the city as part of the 2015-2017 Montréal Smart and Digital City Strategy, after Vue sur les contrats and Vue sur les indicateurs de performance. Note that this tool will evolve over the next few weeks to offer more detailed budget information.

"Launching of the Vue sur le budget site reflects our desire for transparency in terms of communications between the city and its citizens and citizen participation in democratic life. We wish to put in place tools for visualizing city data, enabling citizens to better understand how the city works, and in this instance, key elements of the city budget. The financial information is already available on the city's open data portal, but this information is found in various files, making it hard to have a general view or carrying out research," said the Chairman of the Executive Committee, Pierre Desrochers.

Improving services to residents
The 2016 Budget provides for an investment of $2.1 M to create the Bureau de l'expérience client, to help the city administration refocus on citizen needs. With this investment, the administration is taking bold steps to achieve its goals in terms of improving citizen services and making the municipal organization more efficient and effective, as well as maximizing services to residents.

"We are continuing our efforts to make sure that Montréal can develop as a true 21st-century metropolis, as an intelligent city where technology serves the community. Montréal will become an exemplary city through its commitments in terms of public transit and environment protection. Montréal will become a vibrant and radiant metropolis and is preparing to celebrate in just one year its 375th anniversary," said Mayor Denis Coderre. 

This press briefing is available on the YouTube channel of the Mayor of Montréal, Mr. Denis Coderre, at the following address: http://bit.ly/1LekA8U.

The Montréal 2016 Budget documents are available at the following address: www.ville.montreal.qc.ca/finances.  

SOURCE Ville de Montréal - Cabinet du maire et du comité exécutif

Sources: Catherine Maurice, Attachée de presse, Cabinet du maire et du comité exécutif, 514 346-7598; Information: Gonzalo Nunez, Relationniste, Division des affaires publiques, Service des communications, 514 868-1127