The Budget Passes, 5-2
For the second time in as many meetings, the B word was the focus of debate as City Council approved the 2018 operating and capital budgets. And in an apparent case of deja vu, there were calls for re-votes on a budget, that this time around, was hashed out, in part, in an in-camera or closed door meeting.
Council came back from a special March 8th Budget Committee meeting, where they met in-camera, after the failure to approve a 15 percent increase in water rates. The defeat of the water rate increase led to the tabling of the entire budget, until a deal could be reached, as the increase was to finance necessary capital replacement in the water distribution system.
The budget will see a property tax increase of 6.41 percent, a water rate increase of 9 percent and the sanitary sewer rate increase by 6 percent. Previously, Budget Committee had proposed a 4.51 percent property tax increase and a water rate increase of 15 percent and a sanitary sewer increase of 6 percent.
Despite being approved by Budget Committee, Councillor Brian Swanson was not happy with that decision.
"All this does is shuffle it around; its the same amount of money," Swanson said, likening the entire process to "walnut shells and a dry pea."
A news release announcing the tentative budget on March 9th stated that the revenue shortfall of $513,000, from reducing the water rate increase from 15 to nine percent, would be made up with a 1.91 percent municipal tax increase.
Swanson decried the tax increase as excessive. He pointed out that by adding the past two years together, residential property taxes went up 12.64 percent while commercial property taxes rose 17.65 percent.
"It's an undue hardship (commercial property taxes) on a sector in Moose Jaw where many parts are suffering," he stated.
Councillor Don Mitchell spoke in defence of shifting the water rate increase to property taxes from water bills as more fair to lower assessed property owners.
Mitchell said a 15 percent water rate increase was the same as a 15 percent tax increase.
"That's a 20 percent increase for that part of the population," he said, adding the most fair way is to spread the water rate increase around through taxation.
"The more excessive burden is on lower assessed property owners," Mitchell stated.
Mitchell has been an opponent of a tax shift. The tax shift is the process of increasing the amount paid by lower assessed property owners while decreasing the amounts paid by higher assessed property owners, by way of utility fee increes or a base tax, thereby reducing the overall property tax rate.
A base tax is where all property owners pay a flat amount, and then, depending on the property's assessment, they may pay additional taxes. If a property is a lower assessed home, below the base tax, they must pay more. A base tax is theoretically the amount of services used by that property.
Councillor Chris Warren said budget decisions were hard but based upon realities.
"It's no secret anymore...we have a huge deficit when it comes to infrastructure" Warren said, adding "whether we like it or not there are projects and capital works that need to be spent."
"The reality is, for a long period of time we neglected to do a lot of this work," he said.
Warren spoke about the cast iron water main referendum and the message it sent to Council.
"The reality is we have got major infrastructure projects and heard loud and clear in the referendum, these are projects that should be shared by the community," Councillor Warren stated.
Mayor Frasier Tolmie characterized the major problem encountered in budgeting over the past two years was the austerity cutbacks by the Province.
"The provincial government's goal was clear and that was no deficit," Mayor Tolmie stated while the City's mandate is to replace deteriorating infrastructure.
"The Province's goal and our mandate do not line up," the Mayor stated, adding, the Province and City did see eye-to-eye when it came to high quality infrastructure in helping attract economic growth.
The need to replace critical infrastructure is a priority. The tax increases are based upon 1.9 percent to the main transmission line from the Buffalo Pound Water Treatment Plant and .45 percent for new positions related to infrastructure.
"If anything were ever to happen the consequences would be much worse," he said.
As part of the budget discussions Councillor Swanson proposed cuts in capital spending in non-core infrastructure.
Council voted unanimously to cut $108,000 from enhanced traffic controls.
City Engineer Josh Mickelborough told Council "we feel it could be cut."
Council voted 7-0 for the cut.
Councillor Luhning said "we need to make priorities and look at some of these things as not as important as the water mains" during the debate over whether to make the cuts.
Luhning claimed that if something wasn't done to make cuts and set priorities then we could expect a 5 - 8 percent tax increase next year.
In the area of $70,000 for change room upgrades at the Kinsmen SportsPlex Parks and Rec Manager Ted Schaefer said the work wasn't needed immediately but would be soon.
"Is it a thing that is critical? No. But as soon as we start pushing these things back...(sooner or later) we have no choice and they're degraded beyond usable life."
Spending was approved with Councillors Luhning and Swanson opposed.
Asked by Councillor Crystal Froese what was the importance of the humidifier and control system upgrades Schaefer replied "major".
"Potentially put the archives at risk," Schafer said about deferring the work.
The expenditure was approved with Councillors Swanson and Luhning opposed.
The $30,000 operating grant for the Moose Jaw Municipal Airport was approved with Councillors Swanson and Luhning opposed.
The grant was identified as something which could be cut in a previous memo to Budget Committee and not affect the City's operations.
In reducing expenditures on storm sewers the same 5-2 result with Councillors Swanson and Luhning opposed.
A motion to eliminate an Energy Management program was likewise defeated 5-2 with Councillors Luhning and Swanson opposed.
A motion to reverse spending the accumulated surplus and photo radar traffic safety reserves on the $2.7 million general capital reserve shortfall was likewise defeated 5-2 with Councillors Swanson and Luhning opposed.
The final vote to approve the operating and capital budgets was passed again with a 5-2 margin and Councillors Swanson and Luhning opposed.
The City must now await until the Province releases their budget on April 10. Last year, Council finalized the budget only to return to the budget process when provincial cuts made the City's budget untenable. It is unknown at the present time if it will happen this year.