Several sources of city revenue turned out to be less than budgeted in 2011, maxing out the city’s conservative contingency fund.
Among the shortfalls are fire-code related fees and fines.
“In hindsight, these (estimates) were ambitious,” said Victoria finance director, Brenda Warner, during a budget update to council last week.
The city budgeted for $140,000 in fire revenues but the new estimate is for $60,000.
A similar outcome exists for parking-services and water-consumption revenues, which could prove to fall short as much as $530,000 and $480,000 respectively.
Parkades earned less than anticipated because of some closures for renovations. Also, a few stores which used the parkades relocated.
Water consumption is down due to a number of reasons, including weather. Earlier this month, council approved a water-utility rate hike to correct the budget for 2012.
The funds to cover the 2011 shortfall will be drawn from a $1 million contingency fund.
“It’s a very conservative contingency,” said Warner. The contingency fund is also used for snow removal, an item not budgeted for.
Lastly, city departments did not budget for the wage increase negotiated in the new collective agreement signed in November.
Because the increase was anticipated, however, a provision was made in its corporate contingency account. Council approved a recommendation to transfer $1,050,691 from this account to the respective city departments. This money will cover the union salary increases and benefits retroactive to Jan. 1 2011 when the previous contract expired, as well as exempt salary increases retroactive to Jan. 1, 2010.
Council newcomer Lisa Helps questioned the procedure.
Since the salary increase was anticipated, why it wasn’t included in the budget rather than being drawn from a contingency fund, whose purpose is to cover unanticipated expenses? she asked.
“You’re budgeting quite a bit in advance,” explained city manager Gail Stephens. “You don’t know what collective bargaining is going to get you.”