The City of Estevan promised that the 2014 budget would be a lean one and they have delivered on that pledge.
The members of city council spent Wednesday morning deliberating the budget, which currently calls for a one-mill property tax increase. Council had booked the entire day to go through the budget but were able to soar through it in less than four hours.
That expedience was due in no small part, to council's directive that capital spending would be kept to an absolute minimum in 2014.
Mayor Roy Ludwig said he was pleased with how the budget session went and that council remains unified in their goal of reducing the City's debt, which is currently just over $37 million.
"Moving forward we all know what we have to do and that is cutting back on a lot of capital," Ludwig said. "We are looking at turning the corner, living within our means and starting to pay down our debt. This is a very serious year for us, and I know council is taking it very seriously."
Ludwig credited the work of treasurer and acting city manager Jeff Ward, as well as the managers of the various departments, for their work on the budget. The mayor added that under Ward, the budget, and all City financial information moving forward, was very transparent and included some much-needed changes.
One significant change of note came in how the City accounts for land sales in the budget. Ludwig said in the past the City had been counting on sales in the budget that they probably shouldn't have been counting on and when the sales didn't happen they were left with a budget shortfall.
For example, this year the City has six lots worth over $3 million available in the Glen Peterson Industrial Subdivision currently available. However, instead of counting that as revenue, Ludwig said they are forecasting to sell just one lot and anything else beyond that is a bonus.
"In some cases we didn't necessarily get that money and then we would end up in a deficit position and then that would continue for the following year," Ludwig said. "Now, with (Ward) checking into best practices, we are moving away from that. So if we don't have it, we don't spend it and we prioritize accordingly."
Asked why that practice was allowed in the past, Ludwig said he wasn't sure why, adding that it was something that evolved over the years, which they are now moving away from.
"We don't feel it is a proper way to run a balance sheet," he said. "We want to be more transparent because we are responsible to and answer to the public."
With council making the directive to keep capital spending down, Ludwig said the focus is on projects they had previously committed to along with a few new items.
Highlighting the list of committed-to items is Phase 2 of the Highway 47 rehabilitation project. After repairing the north leg of Highway 47 through Estevan, the City planned to repair the south portion from the CPR rail tracks, down Sixth Street and Souris Avenue from Sixth Street to Fourth Street. The project also called for 13th Avenue from the tracks to Fourth Street to be rehabilitated.
Ludwig said the City is now looking at staging that project over a couple of years.
"We will look at the (intersection of 13th Avenue and Sixth Street) because that is deplorable," he said. "Because of watermain replacement going east, and then up to Estevan Motors, we will be having some serious discussions on that, and we may be putting that portion off."
Ludwig added while part of the reason is financial, there is also a practical rationale. He noted there is an emerging technology for watermain replacements called pipe bursting that has the potential to save the City millions if they wait and see how it develops.
"That is new technology whereby the cast iron main, we run plastic pipe in. Where it meets the cast iron main, it's called bursting; it goes inside and at the same time bursts the cast so what you end up with is a whole new piece of PVC pipe," Ludwig said. "You still have to dig wherever the connections are but you don't have to dig up the entire road because it uses the space where the cast iron main was right at the head where it pushes through and uses the space for the PVC to take over."
Other projects they are committed to include finishing paving the Estevan Leisure Centre parking lot at a cost of $1.24 million, $1.5 million for the Wellock Road extension and $700,000 worth of work on Milne Crescent.
As for new capital spending, the list included such items as new floors for the leisure centre squash courts and equipment for the Estevan Police Service. The biggest items were left to the water and waste water treatment plants, which both require significant work, some of which will need to be done in 2014. Division manager Kevin Sutter said the current priority is a bio solids facility for the wastewater treatment plant.
Along with keeping a tight leash on capital spending, council also made it known that the various groups they provide funding to such as the Estevan Chamber of Commerce and Estevan Art Gallery and Museum, will not receive any funding increases in 2014.
Overall, the budget as currently presented, forecasts a surplus of $1.06 million.
