New Financial Conditions Reduce Proposed 2017 Property Tax Increase To 3.85%

Since tabling the 2017 Preliminary Budget on November 7, 2016, the following three significant changes have taken place:

• Higher assessment growth of $1.2 million than originally estimated, decreasing the mill rate by 0.61%;
• SaskPower’s proposed 5.0% rate increase on January 1, 2017, was reduced to 3.5% by the Saskatchewan Rate Review Panel for a net increase of $306,300 or 0.15%; and
• On November 17, 2016 the Saskatoon Police Board approved a budget $699,600 higher than originally tabled or a 0.34% increase.

All put together, these changes have a net reduction to the property tax requirement of $235,900 or 0.12%, on the City of Saskatoon’s (City) originally tabled budget for a revised preliminary tax increase of 3.85%.

“The good news is that assessment growth is higher than what we were estimating in the budget by $1.2 million – so this is additional money we have available to offset expenditures,” says Chief Financial Officer Kerry Tarasoff.

However, Tarasoff points out there are a few changes to the expenditure side as well.

“As you may have heard, the Saskatoon Board of Police Commissioners has now set its budget and it is being tabled with City Council with a $ 699,600 increase over what is in the current budget already proposed.”

Additionally, Tarasoff explains the smaller SaskPower rate increase also has an effect on the amount of money the city has to use.

“While the lower rate is good news for citizens on their power bills, it has a negative impact to Saskatoon Light and Power and to the mill-rate,” Tarasoff says.  “This affects the amount of revenue we receive from our own power company and franchise fees from SaskPower – as a result the net impact is a $306,300 decrease in our general revenue.”

Tarasoff says the easiest approach to dealing with the new conditions is to build these three changes into the budget already tabled and re-table the 2017 Preliminary Budget on November 30, with a newly proposed 3.85% property tax increase rather than the 3.97% increase previously discussed.

Here is a breakdown of the individual impacts:

The revised budget proposal will be introduced to City Council at its Preliminary 2017 Corporate Business Plan and Budget meeting beginning Wednesday November 30.

To view the 2017 Preliminary Corporate Business Plan and Budget, Executive Summary and other related City of Saskatoon Financial Reports, visit saskatoon.ca/financialfuture.