Long-sought by a handful of Greater Sudbury’s elected officials, a series of zero-based budgeting-style reviews are slated to take place during the next three years.
Although city auditor general Ron Foster said these reviews “may generate some savings,” they might also reveal a need to spend more money on various service lines..
“Don’t expect miracles,” he told the audit committee of city council during Tuesday’s meeting.
Zero-based budgeting has been bandied about by elected officials for the past several years, and gained traction during last year’s civic election. The report tabled on Tuesday was requested by city council late last year.
This approach to budgeting works from the “ground up” Foster explained, with expenses re-justified from scratch. Every budget line begins at zero, and each cost and revenue element is assessed to determine if it is still required.
In a presentation to city council in 2021, staff advised against undertaking a zero-based budget review of Greater Sudbury’s entire annual budget, as it would require approximately 6,000 additional hours of staff hours and would not produce “incrementally greater benefits.”
They did, however, suggest an incremental approach, in which the city’s 58 service lines are targeted one at a time, might uncover areas of savings. CAO Ed Archer cautioned at the time that the review might also shine a light on areas of underfunding within city operations, which might result in the recommended expenditure of more money.
Foster’s presentation at Tuesday’s meeting reiterated much of the 2021 report.
Although zero-based budgeting is seen as a silver bullet by some, Foster noted that although it was introduced with a lot of promise, it hasn’t met these expectations in the public sector.
As such, few municipalities employ zero-based budgeting techniques.
That said, he cited the City of Calgary as a positive example of zero-based budgeting. During a seven-year period, they used zero-based budgeting on 11 service areas and uncovered approximately $50 million in savings from capital cost avoidance, $20 million of operational savings and $10 million of productivity gains.
“Calgary’s circumstances during this time period, in a growing economy, were quite different from our city’s current circumstances,” Foster said. Plus, he noted that their annual budget dwarfs Greater Sudbury’s, which adds scale to their reported savings.
Given the degrading state of Greater Sudbury infrastructure, in which an additional $100 million (at least, due to the estimate not yet factoring in all city assets) needs to be spent per year to maintain city assets in their current condition, the upcoming series of reviews are likely to find areas of required expenditure alongside savings.
“There might be a few thorns along with some of the roses we unearth in this exercise and cause some budget pressure,” Foster said.
The proposed service level changes to come out of the upcoming reviews “might not square or sit well” with constituents or the city’s elected officials, Foster said, noting that staff will take a close look at the math and impacts on program areas for city council consideration.
The first review, expected to commence shortly, will be parks services, which will be followed by engineering, paramedic, children, fleet, general government, winter maintenance, wastewater, water and building services. The order the reviews take place in may change when Foster presents a work plan to city council later this year.
Tyler Clarke covers city hall and political affairs for Sudbury.com.