City council reduces mill rate amid pandemic
City reacts to economic slowdown with cuts to internal budgets, capital projects
For the first time in more than two decades, the City of Moose Jaw is cutting its mill rate increase on property taxes to zero.
Moose Jaw’s six city councillors and Mayor Fraser Tolmie voted on several motions Monday evening, all approved, which add up to a 2.3-per-cent reduction to the previously-agreed-upon mill rate increase.
They opted for the cut due to economic fallout from the COVID -19 pandemic; the rate is in effect for the remainder of 2020.
The last time the city saw a zero increase to its mill rate was in 1997, according to financial services director Brian Acker.
“I’ve been with the city since 1991. From 1991 through the 1997 period, they were all zero-per-cent mill rate increases,” he said.
The 1990s, however, were a markedly different context than the current period. Saskatchewan’s economy “wasn’t doing as robustly as it has been in the 2000s. It caused the province to reduce the funding they shared with the municipalities,” Acker said.
Monday’s decision is connected to the economic slowdown, albeit more abrupt and attributable to the fast-spreading novel coronavirus, which has killed more than 5,000 Canadians, including six in Saskatchewan.
The province’s economy has screeched to a halt after the provincial and federal governments imposed social-distancing measures, business closures and travel restrictions to curb the spread of viral infections.
For example, on April 20, the price for a barrel of West Texas Intermediate crude oil was less than zero, trading at US$-37.63.
Acker said Monday’s decision will affect slightly more than 13,000 taxpayers in Moose Jaw, including residents and businesses.
To cut the rate increase to zero from 2.3 per cent, city council agreed to defer to 2021 a one-percent increase that would have been used for parks, recreational and facilities capital projects, as recommended by Acker’s department in a report sent to councillors. That’s equal to $295,426.
The remaining 1.3-per-cent cut was reached by: cutting third-party funding from the city; cutting financial and human resource services budgets by $51,060; closing Moose Jaw’s outdoor pool for the rest of the year; and councillors cutting their travel budget for the rest of the year, totalling a $31,874 reduction. Closing the outdoor pool will save the city $166,176.
Acker said “council is being responsible and looking at areas where they can reduce their (financial) ask in 2020, so they’re able to pass that on to residences and our businesses.
“It’s something that makes sense. Why would we collect that if we don’t need it this year? … If we can have those savings, it makes total sense that we pass that on to our taxpayers.”
Acker’s department predicts Moose Jaw’s revenue will drop by $1.6 million by the end of August, if the pandemic continues, he said. “Through to the end of the year ... (revenues) would be down about $3 million.”