Yorkton Council took its first public look at the City’s 2017 operating and capital budgets Tuesday.
And while the document is not yet etched in stone, as it sits, the combined budgets would necessitate a 6.68 per cent increase in taxation.
“Currently Administration is proposing a 6.68 per cent increase in taxation revenue for the 2017 year. This includes 2.94 per cent for future capital projects, 2.50 per cent increase for police and fire protection services and 1.24 per cent for all other operational expenditures,” Shannon Bell, Director of Finance told the Committee-of-the-Whole meeting.
Mayor Bob Maloney was quick to suggest the numbers in the budget, including the tax hike, are not finalized.
“These are musings at this time. Nothing is set stone … There’s a lot of work yet before determining where we are going,” he said.
Bell said the budgets circulated had been created through much consultation between Council, and City administration.
“Administration began the budgeting process by first presenting Council with a capital projects budget. This budget has $4,085,000 of funding from 2017 taxation revenue,” she began.
The first section listed all capital projects that were approved in prior year budgets that are not yet completed.
“These projects are typically funded from prior year budgets, however this year we are needing to utilize $150,500 from the 2017 capital budget to finish off all of the prior year projects,” said Bell.
The second section details new projects for 2017 that are fully funded through grants, long term loans and reserve accounts. This means that no funding from taxation revenue will be required for these projects.
The final section lists all the new projects that are funded through the 2017 capital budget and 2017 taxation revenue.
“For 2017, we have $18.5 million in projects to complete from the prior year, $2,969,000 in projects that are fully funded by reserves, grants and long-term loans; and $6,204,500 in projects that will utilize 2017 taxation revenue, various grants and reserve funds. In total Administration is proposing $27,640,091 in capital projects for the 2017 year,” said Bell.
Councillor Quinn Haider said Council has been percolating numbers behind the scene.
“We’ve spent hours going through this,” he offered, adding they have focused on making it a budget that works for the City, and residents’ pocketbooks.
Pre-release work was always carried out on the operating side, said Bell.
“Next the Operating budget was presented to Council for its consideration. Originally the Operating budget was presented with an 11.34 per cent increase to taxation revenue,” she said.
The budget presented included “same as” services with increases to taxation revenue for:
* Capital replacement of infrastructure;
* Increased costs associated with wages for Fire Fighters & RCMP Members;
* Adding people resources – 1.36 FTE’s for City Operations plus 0.75 FTE for RCMP Administration;
* Increased costs associated with computer maintenance contracts, communication strategies, etc;
* Increased level of service for gravel roads.
The numbers at that point were not good, admitted Bell.
“To accommodate all the additions to budget Administration was budgeting for an additional $1,712,800 in taxation revenue, which amounted to an 11.34 per cent increase. After discussions with Council, this increase was determined to be excessive and Administration was asked to review the budget to bring the percentage increase in taxation revenue down,” she said.
From that point, City administration took another look at the document making changes to reduce the numbers to the point a 6.68 per cent increase was achieved, said Bell.
Changes made included;
*Remove Facility/Asset Manager Position proposed ($104,040) savings *Reduce Fire operations due to efficiencies ($89,880) savings *Reduce transfer to reserve for future fire truck replacement ($26,963) savings *Reduction in allowance for doubtful accounts ($40,000) savings *Remove additional 0.75 RCMP position ($43,800) savings *Reduction in fleet charges to all departments ($100,000) savings The final numbers for both sides of the budget are still far from assured, said Bell, noting the impact of the provincial budget in late March is unknown.
The City does know it will receive less in 2017.
“We have received correspondence from the Provincial Government in regards to the City's municipal revenue sharing funding that comes from the Provincial Sales Tax (PST). As the PST revenue is lower, all municipalities will see a reduction in the revenue that they are currently receiving from the Provincial Government,” explained Bell. “Indications are that on average, the PST revenue is approximately 5.1 per cent lower and that municipalities will need to adjust for this decrease in revenue.”
In 2016 the City of Yorkton received $3,421,900 in funding from the PST revenue.
The actual number could be less though.
“Since the City's budget has been prepared there have been reports from the Provincial Government that they will be looking at further reductions in the funding that they provide municipalities. They are currently discussing that reductions in funding could amount to as much as a 20 per cent reduction. This is significant funding for the City of Yorkton and as such Administration is recommending that we delay approving the 2017 budget until after the Province releases their budget on March 22, 2017,” said Bell.
As examples a 10 per cent reduction would mean a $342,190 reduction, or a 1.68 per cent loss in revenue. If it was a 20 per cent reduction it wolf be a 3.36 per cent loss.
Coun. Ken Chyz said a 20 per cent reduction in revenue sharing would certainly force Council “to work extremely hard” to adjust the budget to work with significantly fewer dollars.
Coun. Randy Goulden said there may be reductions in other revenue streams from the province, in particular with talk of reductions in grants-in-lieu.
Bell explained Crown corporations such as SaskTel and SaskPower do not pay property taxes on buildings, but do pay a grant in lieu, in excess of $2 million in Yorkton’s case.
The City in now seeking feedback on the document as it stands, said Bell.
“Administration wants to take the next few weeks, while we are waiting for the Provincial Budget, to invite the public and property owners of the City of Yorkton to review the budget documents and to provide any comments or concerns regarding the budgets presented. Administration will post this report and the attachments on the City's website for the public to access. All comments can be submitted to the Finance department at City Hall,” she said.
Bell also reiterated the numbers are not yet final.
“Administration would like to advise Council and the Public that just because a 6.68 per cent increase in taxation revenue is being proposed, this does not necessarily mean that a property owner’s total tax bill will increase by 6.68 per cent. Included in the total tax bill is a portion of funds that go to the school divisions. The taxation rates for the school divisions are set by the Provincial Government and will not be known until after the Provincial Government passes their budget for the year,” she said.
Longer term, there are major decisions to be made, in particular on the capital side of things.
“Administration has also discussed with Council the future capital requirements that have been identified. Specifically a Civic Operations Building (a new Public Works Building), a new Kinsmen Arena, a new Deer Park Clubhouse, renovations to the Gallagher Centre and a drainage plan for the entire City,” said Bell.
“Council recently was presented with an overall drainage plan for the City of Yorkton with an approximate cost exceeding $40,000,000.”
The other projects mentioned could potentially amount to $35,000,000.
“Funding for these projects, and all other capital projects such as streets and roads, is extremely high and decisions in the future will have to be made and priorities set, as there are just too many multimillion dollar capital projects to be funded without strapping the City of Yorkton financially,” said Bell.
