At a special budget meeting on Monday evening, Estevan city council approved the budget proposal with only minor changes.
The budget will see the City cut one per cent from its general operating budget, reducing it to $23.2 million in 2015, while council approved accumulating another $5 million in debt, and investing another $7.9 million in capital spending to cover a number of projects the City has either previously committed to or must complete in 2015.
Among those projects is a $5 million refurbishment of runways and taxiways at the Estevan Municipal Airport. The province has committed 60 per cent of that project’s cost through the Provincial Disaster Assistance Program, and that funding expires in August.
Another $1.2 million will be put toward completing roadwork on Sixth Street and Souris Avenue, which had been committed to previously as part of the Highway 47 North road repairs.
Council approved a seven per cent increase to the mill rate, moving the City to 11.8 mills, along with a new library levy of 0.35 mills and a continuation of the health levy, set at 2.55 mills.
The mill rate increase will mean about $120 in additional tax payments for a typical household in the coming year. The library levy set at 3.18 per cent, will equate to roughly $70 per year for the same household. Those figures are based on a residential property valued at $280,000.
There were questions raised by council about the need to continue the health levy. It was set to raise the City funding of $1.3 million for the Hearthstone Campaign and a new nursing home in Estevan. With Hearthstone reaching its $8 million target at the end of 2014, there was a question regarding the need for that levy to continue.
Mayor Roy Ludwig noted it was continuing because the $1.3 million hadn’t yet been raised, even though it had been committed to and tabulated in Hearthstone’s grand total.
Looking at debt, the City is projecting to make principle payments of $3.76 million in 2015, and continuing on a similar schedule over the next five years. By 2019, the City expects to have less than $14 million remaining to pay.
With $5 million in new debt the City is adding this year, City Treasurer Jeff Ward noted Estevan would net increase the public debt by about $1.3 million, factoring in debt payments.
Ludwig said council has been deliberating all year about the City’s debt load. This debt issuance is in large part because of the $5 million project at the airport. The City must finance the project itself, and will be reimbursed $3.2 million later. Because of that, the debt was considered necessary.
“It was a tough decision, because this council is committed to debt reduction,” said Ludwig, who noted there is now a “blip” in that plan. “This was a turning point this year. The focus will be resumed on debt reduction.”
The word from the City was that for the majority of capital spending in 2015, the City’s hands were tied, either legally, legislatively or because funding was about to expire. Additional borrowing has been designed to cover those costs.
Ludwig said this is a one-year situation for the City, and they don’t expect to find themselves in a similar situation next year.
“We believe what we’re forecasting now will happen. The focus will be riveted on debt reduction, and we absolutely see that happening moving forward,” added the mayor.
However, City Manager Amber Smale noted there are new landfill regulations expected in 2016, and they don’t know what those might mean. She also noted the City has submitted a number of applications to the federal New Canada Building Fund seeking funding. If one or more of those are approved, the City will have to act and be able to fund its third of the project.
While the City is hopeful for funding, Smale said even if a project is approved, it may not have to be completed in 2016.
She expressed some caution about saying never, noting, “You don’t want to say in the next five years you don’t have to take out debt, because you might.”
One fee increase that came under scrutiny was the proposed increase in garbage and recycling fees, which were recommended to increase from $5 to $10 per month. Coun. Greg Hoffort asked why that service fee was set to double.
The fee was increasing because the City wasn’t breaking even on the program, which is contracted to Regens Disposal Ltd. Hoffort suggested a smaller increase in 2015 would be more appropriate with the potential to go up to $10 in future years, if or when, it’s deemed necessary.
Council ultimately decided that fee would increase to $8 per month. The landfill tipping fee, however, was set to increase from $5 to $10.
Water consumption rates will also be increasing by 10 per cent.
