Faced with a deficit of over $800,000, city council took out the big knives and began cutting last week.
Council held two days of budget deliberations with the focus on the capital portion of the budget last Wednesday. On Thursday they began combing through the operations side and were expected to continue that process on Tuesday.
Entering the meetings the City had presented a financial summary, which projected a deficit of $806,000 once capital expenditures were factored in. Noting that a deficit of that size would require a tax increase of two mills to cover, Mayor Roy Ludwig said council would be making some major cuts.
Ludwig added the focus of 2013 would be catching up on projects that have been delayed over the past couple of years. As well, any items or work that wasn't absolutely critical would be deferred for at least one year.
That focus seemed to work as council cut the deficit by almost half, lowering it to $440,000. Ludwig said he is happy with their start, but feels there is more that can be done, adding that once the year-end totals are presented in March they will go through the operations portion again and see what else can be trimmed.
"We still have a long ways to go," he said. "(In March) we'll get the final numbers from 2012 and when we get the final numbers we'll be able to project that forward and have a realistic look of where we are at. And from there we'll do some looking of where we can bring the budget more in line.
"We were very successful (Wednesday night). We took off close to $400,000 and we are halfway there and I would like to see on the operations side some fairly large numbers off there as well."
Ludwig said he personally would like to see the City raise taxes by half a mill each year and then set their budget accordingly. He feels that type of an increase would prevent council from having large hikes in any given year. The new mayor is also confident that a half mill increase would allow the City to keep up with the work that needs to be done to keep Estevan moving forward.
"We feel pretty comfortable that we can still move forward with the needed changes going this way," he said.
Along with the desire to finish what they've started, another reason behind the modest budget is the concern that the City cannot take on more debt. Their debt currently sits in the $37 million range and their ceiling is $45 million. However, Ludwig noted that some major debentures will be coming off the books in the near future which should loosen the constraints some.
"We have to strike a delicate balance and we are there. We have a tightrope to walk right now, but I think with all of us pulling together and making the right decisions I think we can do it," he said.
"We couldn't have done it without the input from the managers and we'll need that input again on the operations side to bring this back to where we want it."
The cuts on the capital side consisted largely of projects that could be held off for a year or pieces of equipment that weren't deemed critical for 2013. Council also encouraged department managers to see if any projects could be spread out over two years to lessen the budget hit.
The projects that did survive were mostly the carry-over items that council said it wants done in 2013. Chief among them is the long-awaited completion of the Souris Valley Aquatic and Leisure Centre parking lots, as well as landscaping that will be carried out when the parking lot is done. Other projects of note are the installation of lights at the Devonian Street/Kensington Avenue intersection; over $800,000 in improvements and repairs to the Estevan Airport; repaving the City-owned parking lot on the 1200 block of Third Street and the extension of Wellock Road to Sister Roddy Road.
The remaining portion of the operations budget was expected to be heard on Tuesday. The final operating cuts will be heard in March.
Along with the likelihood of a half mill property tax increase, it also looks as though water bills will increase. The City's utility fund currently has a deficit of $960,000 and treasurer Tim Leson recommended to council that a 10 per cent increase is needed.
