Moose Jaw Budget Status Quo
The effects of the Province's budget and infrastructure needs dominated Moose Jaw's preliminary 2018 budget.
In what was described as a "status quo" budget by Moose Jaw city manager, Matt Noble, the preliminary operating budget of $46,578,781 has a shortfall of $1,040,138, or a tax increase of 4.05 per cent, whereas the proposed five year capital budget of $252,710,335 (consisting of $224,022,013 proposed and $28,688,382 carried forward) will need to find financing.
At the current level of funding, $143,331,842 are available for capital funds projects.
The city is looking at borrowing $75,000,000, plus self financing, but "additional funding sources must be found," Noble warned council.
In addition to the five year capital budget, Noble presented a 10 year Unfunded Capital Budget of $178.7 million for necessary upcoming projects that had been "delayed due to no funding."
According to Noble, The preliminary budget contains no new initiatives, but some will be presented during the budget process as part of departmental business plans.
Noble laid much of the blame for the present financial problems Moose Jaw is facing on the Province's budget and the city's tax structure. The combined effect of Provincial cutbacks on operating and capital budgets is 16.5 per cent.
Losses to Moose Jaw's bottom line include Grants in Lieu (GIL) losses from SaskPower, SaskEnergy and TransGas totaling $2.7 million - $1.4 in the operating budget and $1.3 million in the capital budget.
Additionally, Revenue Sharing from the Province is down $414,000. The Province allocates a funding pot to Moose Jaw based on a per capita formula. Since Moose Jaw has not grown at the same rate as other centres, funds have been reduced.
Changes to the Provincial Sales Tax (PST) now impact Moose Jaw's operations with $84,112 now owing.
Noble provided historic tax data, where in 12 of the past 26 years the City has had zero tax increases. He also emphasized how Moose Jaw had an average 1.9 per cent tax increase over the past 26 years. Pointing out Moose Jaw's residential tax rate is the second lowest in the province and commercial taxes are the sixth lowest provincially.
Noble said other cities similar in size to Moose Jaw were collecting $38.2 million in residential property taxes, whereas Moose Jaw was collecting just $25.5.
Noble also pointed out how 58% of the City's operating budget went to wages, including both the police and fire departments.
The 2018 operating budget will also reflect the increase to the Canadian Union of Public Employees (CUPE). CUPE won wage increases over 2015-2018 in protracted labour negotiations.
A wage increase of one per cent for all City employees - including police and fire services - amounts to $271,000.
"Wage increases are higher than the CPI (Consumer Price Index)," Noble stated.
Equipment costs also were not reflective of the CPI.
Other costs faced by the City include commitments to reserves - $3 million - plus surcharges to property taxes for infrastructure projects such as cast iron watermain replacement.
Commenting on the preliminary budget, Councillor Brian Swanson said the statistics presented don't tell the entire story. During 10 of the 12 years of 0 per cent tax increases over the previous 26 years Moose Jaw actually increased its expenditures.
Coun. Swanson pointed out that money can be raised in other ways, for infrastructure needs, other than tax increases, adding, "the idea that infrastructure was neglected due to no tax increases is not true."
"Zero per cent tax increases are not the goblin they are portrayed to be....(they are) not the Boogey Man people portray them as," Swanson stated.
Coun. Swanson also took issue with tax rates for commercial properties, stating that Moose Jaw's percentage of commercial properties versus residential properties was smaller compared to other centres and budget shortfalls should "not be made up by putting punitive rates against commercial properties."
Noble also stated the capital budget does not include funding from Federal and Provincial governments. Without help from senior governments, Moose Jaw would have to increase property taxes by 66 per cent or enact a levy of $1059 on every taxable property.
"The only way forward is with assistance of federal and provincial governments," Noble told the council.
The budget will be revisited again on January 8th when third party boards will submit their funding requests.
The Moose Jaw Police Service will request $196,324 additional operating funds, the Moose Jaw Public Library will request an additional $15,860 and the Downtown Facility and Field House will request its annual subsidy to decrease by $55,045.