The city faced a few budget challenges during their 2018 budget discussions in February.
That was first topic of discussion during Mayor Rob Muench’s Mayor’s Breakfast on June 13, put on by the Humboldt and District Chamber of Commerce.
A number of things were considered when deciding on tax increases and supports or cuts to services, including provincial funding, which saw another year of significant cuts.
Compared to 2016 rates, 2018 provincial funding is still down by $415,000, says Muench.
Property taxes were also reassessed in 2017, which meant increases for some commercial property owners.
“We tried to be revenue neutral from our taxations of businesses. We collected the same amount of taxes in 2017 as we did the year before.”
The 2018 budget and a slight tax increase has been an opportunity to balance out commercial to residential tax rates and make it more competitive with other cities, says Muench.
Humboldt started out the year top of the pack for one of the largest gaps between residential and commercial tax rates. After the budget was released and a tax increase decided, the city is now middle of the pack among Saskatchewan cities, says Muench.
Property tax continues to be the highest source of revenue for the city making up about 45 per cent of total revenue.
Muench also commented on the current state of Humboldt roadways with 44 per cent being in poor condition.
Within the next 10 years, 12 km of roadway and water mains need to be replaced at an annual cost of $1.5 million.
For sustainable maintenance of roadways and structure work where roadway repairs maintain roadway deterioration, the cost to the city would be $2.9 million annually.
“The current budget and 5-year projection averages approximates to $1.6 million per year,” said Muench in his presentation, with the city able to start chipping away at poor sections of roadway.
Another important topic of discussion was regarding tax abatement and whether that is something the city wants to implement to attract businesses. City staff have looked into the possible benefits of tax abatement, comparing growth in Humbolt to growth in Melfort, a city with similar size, services, and demographic to Humboldt who has a tax abatement program for new businesses.
Comparing growth from 2008-2017, Humboldt had greater commercial and residential growth than Melfort without tax abatement. Over a five-year period, Humboldt would have lost $1.36 million in tax abatement that would have had to come from elsewhere in the budget, says Muench.
“That’s a substantial amount of money that we would have had to give up, which may or may not have made a difference with those businesses.”
Muench completed his annual breakfast with a look at supporting local businesses. According to Muench’s rough calculations, Humboldt’s economy loses $504,000 per month by people running into Saskatoon to go to Costco. More needs to be done to promote local businesses and there are new businesses that might have an impact on that, says he says.
“If we make a bit of an honest effort, maybe we can bring that number to half, that’s still a substantial amount of money.”
