Mayor & Councillors Approve Balanced Plan to Fill Provincial Budget Shortfall

The Governance and Priorities Committee (GPC) today approved a wide-ranging plan to address a sudden multi-million dollar hole left by the recent provincial budget cuts.  The committee today approved a tax increase of 0.93% added to the existing 1.62% increase (following the March tax policy decision) which delivers an overall 2.55% municipal tax increase.  That means for an average house it amounts to $43.80 per year or $3.65 per month over the 2016 City property tax bill.

“In the longer term, we’re looking for ways to both find further cost savings and looking for further revenues,” says Mayor Charlie Clark. “We want to really engage in an ongoing negotiation with the provincial government about what the future’s going to look like.”

With reassessment and the City’s recently shifted its tax policy, the overall tax impact on residential property owners would have been 1.62%. But because the province abruptly ended its Grants in Lieu of Taxes for SaskPower, SaskEnergy and TransGas property on city land, the City was required to find ways to address this budget cut.

Committee approved recommendations on principles that included:

• Keeping any property tax increases to a minimum and service levels up; maintaining jobs; City Hall salaries are frozen and the snow and ice levy won’t be collected this year.
• Adjusting all options – how we spend, and the cash collected in fines and fees; more money will go to taxpayers from the City-owned water and waste water utilities.  Parking ticket fines will go from $20 to $30.
• Back-filling the provincial budget hole without dipping into reserves.

The GPC today also received information which outlined Provincial downloading and transfer payments on the City.

Several City Councillors want clear answers on the role and use of reserves and more detail on the perception that City reserves have been built on the back of provincial government revenue sharing.

“Revenue sharing goes to support everyday operations,” says City Manager Murray Totland. “Those are the direct services to citizens such as snow clearing, road maintenance, police and fire service.”

Totland stresses the provincial cut is not a one-year shortfall – it is a permanent operating budget adjustment that requires back-filling by ongoing funds. Taking funds from a reserve would be a one-time solution which would have to back-filled in 2018 and future years to come.

“The reserves are not to cover our day-to-day operating expenses,” Totland says. “Pulling money out of our reserves just transfers this problem down the line and leaves us to deal with unexpected situations out of our operating budget.”

The City has about $140 million in the reserve, of which $21 million is used each year in capital and operating budgets.  If the City was to only use the reserve funds to deal with the ongoing impacts of the recent provincial budget, all of the reserves would be depleted in seven years.

“So at the end of seven years, we wouldn’t have the reserves to pay for all the major projects that they currently fund,” Totland says. “And in seven years, we still would not have a long term solution to pay for the provincial budget shortfall.

“We wouldn’t have anything in our savings account to pay for projects that keep our roads, leisure centres, outdoor swimming pools, or parks in good working condition.”

Find more on the provincial budget funding impact on our website.