City facing hefty tax hike or service cuts in 2018

Report says to finance status quo, property taxes would rise 6.97%

Saskatoon residents and city council will have to choose between a huge property tax increase and reduced services in 2018, a new report suggests.

City council will consider a report on Monday that suggests unless reductions are made to services in various areas, the 2018 property tax increase would be 6.97 per cent just to maintain current service.

That would be the second highest municipal property tax increase of the last 20 years, second only to 2014’s 7.43 per cent.

“It’s just the starting point,” Kerry Tarasoff, the City of Saskatoon’s chief financial officer, said in an interview Thursday. “Where we end up with in December (with the budget) is probably going to be totally different.”

The single biggest impact on the budget would be a reduction in provincial funding of $6.1 million through decreases in municipal revenue sharing and grants-in-lieu from Crown corporations.

Inflation of 1.53 per cent is expected to have the second largest impact on the 2018 budget at $5.9 million, according to a report to be considered Monday by council’s governance and priorities committee.

Tarasoff said city hall administration will be producing reports on various city services ranging from road maintenance to fire services, which will give council the opportunity to find savings by reducing service levels.

Waste handling is one area that might provide the potential for cost savings, Tarasoff noted.

“I don’t think anybody would be really happy with a 6.97 per cent tax increase,” he said.

The 6.97 per cent figure includes a 0.55 per cent increase or $1.2 million to move towards a city-wide snow removal program that was deferred in 2017 when the March 22 provincial budget introduced steep cuts to city funding.

The preliminary increase also includes a 1.42 per cent hike for policing or $3.1 million, but that number does not include any growth estimates for police.

Growth is expected to mainly pay for itself in the 2018 budget. The report estimates an additional $3.5 million will be needed to maintain 30 new kilometres of roadways and 51.1 additional hectares of park space.

However, the city is expecting $3.4 million in additional revenue, including $3.2 million more from property taxes due to assessment growth.

Saskatoon’s population is expected to grow 1.5 per cent to 272,000.

The city expects to make $700,000 less from landfill operations and $500,000 less from traffic fines and penalties due to anticipated greater compliance. Dropping landfill revenue has been an issue for years.

The city is also expecting to increase spending on the Remai Modern art gallery in 2018 by $395,000 as the facility is expected to be open for the entire year.

When council was tasked with addressing the $9-million shortfall created by the provincial budget in April, the revised budget included the elimination of a $3.5-million fund for salary increases in 2017.

Tarasoff said there is money included in the 2018 projected budget for salary increases since the city is negotiating contracts with 11 of its unions, including those representing the fire department and police.

Tarasoff would not reveal the amount since the city is still negotiating with the unions.

The proposed property tax increase does not include any extra spending, such as a multi-year levy that has been proposed to restore the fund that pays for bridge maintenance.

Mayor Charlie Clark said changes from the province are putting more pressure on the city’s budget despite the city’s efforts to reduce spending.

“So we need to come up with more certainty and sustainability in our funding relationship with the province,” Clark said in an interview Thursday.