A new budget account will prod city department heads to save money instead of finding use for every dollar they’ve been allotted, a council committee heard Tuesday.
Councillors approved the idea of a savings account that operates separately from the city’s key fiscal stability reserve. Currently, all year-end surpluses go towards that reserve, and most of them come from higher-than-expected revenue sources or labour settlements rather than any efficiencies or unspent dollars within program and department budgets.
The savings account could change the way directors and general managers think of their budgets, chief financial official Eric Sawyer said Tuesday.
“Rather than rushing to spend their budgets by December 31st, they could roll in half of any savings into next year’s budget,” he said.
The other half would go to cross-department spending initiatives. Officials told councillors could tap future revenue windfalls for property tax relief, rather than this new account.
City manager Jeff Fielding also doused the idea of giving financial incentives to managers who save money, in part because of how that would look in the press. “That’s going to end up on the front pages of the paper,” Fielding said.
Coun. Peter Demong, who has encouraged not filling vacancies or slashing public art funds to help control the budget, gave muted support for the savings account.
“An egg doesn’t crack into a fully formed chicken. We have to start somewhere,” he said.
The city’s water and waste utilities will be exempt from the savings account program. A newly released review of the water services unit suggested that it could trim its $150-million by at least $2.4 million to $5 million, but director Dan Limacher said he would rather use that extra money to lower the utility’s ballooning debt, rather than use it to modestly lower water rates.
