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City plans for growth with multi-year indicative budget

For immediate release: June 12, 2019 - 4:06pm
CF19-471

The City continues to roll-out steps in planning for the first multi-year budget for 2020 and 2021. The multi-year budget will provide greater certainty for residents about the future direction of property taxes, better alignment of the City’s longer-term goals and objectives, and improved financial stability, transparency and accountability.

Setting the municipal indicative property tax rate is a guideline and an important early step in the development of a business plan and budget. Setting an indicative rate gives City Council an opportunity to discuss budget priorities it wants to invest in.

“Prior to budget deliberations this fall, we’re now presenting a number of options to the Governance and Priorities Committee (GPC) on setting an appropriate indicative rate for this 2020/2021 budget cycle,” says Kerry Tarasoff, Chief Financial Officer. “Not only will this provide increased transparency surrounding the City’s budget process to residents, but it will give Administration the direction we need to further refine the budget including service level changes and initiatives aimed at achieving City Council’s Strategic Priorities.”

While the Administration is tabling this information with GPC at its meeting on Monday, June 17, 2019, detailed work will continue to refine the budget right up until budget deliberations at the end of November. 

Administration has prepared three property tax options for consideration by Committee, each with benefits and risks for City programs and services. Administration is currently projecting a 2.94% and 3.17% property tax increase required in 2020 and 2021 in order to maintain current service levels.

Option 1:

  • Target a property tax less than 3.94% and 4.17% for 2020 and 2021, which includes an additional 1.0% towards the city-wide organics program and the waste operations/landfill operating deficit and funding shortfall.
  • This option would require the Administration to reproduce a budget less than the current estimated cost to maintain existing services and implement the city-wide organics program phase-in.

Option 2:

  • The Administration is recommending a targeted property tax increase equal to 3.94% and 4.17% in 2020 and 2021 which includes an additional 1.0% towards the city-wide organics program and the waste operations/landfill operating deficit and funding shortfall.
  • This option would require the Administration to proceed with the current estimated costs to maintain existing services as well as continued implementation of the city-wide organics program phase-in. 

Option 3:

  • Target a property tax higher than 3.94% and 4.17% for 2020 and 2021, which includes an additional 1.0% towards the city-wide organics program and the waste operations/landfill operating deficit and funding shortfall.
  • This option would provide sufficient funding to maintain existing service levels, continue the phase-in of the city-wide organics program and leave funding for the implementation of other initiatives to achieve other City Council Strategic Priorities.

“Balancing property taxes, service level changes, our Strategic Goals and City Council’s Strategic Priorities is always difficult, however, we believe we’ve provided Committee with a full picture of the City’s financial projections and their available options for 2020 and 2021,” Tarasoff says.

Report Highlights:

  • Administration anticipates a total revenue increase of $22.66 million for 2020/2021, mainly comprised of user fees, internal and external revenues and property tax growth.
  • The City’s 2020/2021 budget forecasts increased expenditures of approximately $28.70 million, or 7.08% over 2019.
  • Saskatoon Police Service currently estimates a total of $8.86 million in growth and inflationary pressures for 2020/2021.
  • For the purposes of the 2020/2021 Indicative Budget Report and associated options, a 1.00% property tax change has been estimated to be equivalent to $2.44 million.

The indicative rate decision is a guideline for the rest of the year. City Council has the opportunity to set the final budget and associated municipal property tax rate through the 2020/2021 multi-year budget deliberations at the end of November 2019.

For more information on the City’s multi-year budget, visit saskatoon.ca/budget.