Few surprises lurk in city budget
Council’s preliminary plan seeks 4.5% tax hike, holds debt steady
Saskatoon property taxes are set to rise again next year, but the city’s debt is not expected to go up.
City hall released its preliminary 2019 budget Wednesday with a 4.5 per cent property tax increase, which is about what was forecast.
While the City of Saskatoon’s proposed operating budget cracks $500 million for the first time, the city plans to spend less on capital projects. That means no borrowing is planned in 2019.
“I would say that’s a little unusual,” the city’s chief financial officer, Kerry Tarasoff, told reporters Wednesday.
“Normally we would have some kind of projects that would require some borrowing. But our capital program is a little bit down from other years.”
The city’s debt is expected to sit at $355 million at the end of the year, just slightly higher than a year ago. The rise in the city’s operating and utilities spending and decline in capital spending expected next year have produced a total budget identical to 2018: $1.14 billion.
The operating budget closely resembles what was expected, as the city adopted a more transparent approach by developing the spending plan in stages throughout the year.
When city council begins budget deliberations at the end of November, the politicians will have $3.1 million of spending at their discretion. Council could opt to increase service in certain priority areas or not spend all the money and lessen the tax hit.
The property tax increase just to maintain existing city services is estimated at 3.16 per cent. The proposed 4.5 per cent property tax increase would mean an extra $81.36 a year for a home with an average assessed value of $371,000.
Property taxes were increased 3.79 per cent this year.
Tarasoff said the budget reflects the direction from council and what the city has heard from residents through surveys. He called the process the most transparent he has seen.
“We’re very cognizant of the fact that we need to keep taxes as low as we can,” Tarasoff said. “We also have a lot of services to maintain.”
The actual budget request from the board of police commissioners for $94.6 million comes in lower than expected with 10 new employees requested instead of 12. That means council has an extra $342,100 that could go unspent to lower the tax increase or be spent elsewhere.
The cost of maintaining services in 2019 is estimated at $17.5 million more, while the city is expected to generate $10.4 million more in revenue. With the $3.1 million for council’s priorities, that leaves an overall gap of $10.4 million, which would require a 4.5 per cent tax increase to cover.
Among the noteworthy increases in spending proposed for 2019 is a $1.9-million boost in spending on transit that will increase the bus budget to $43.1 million.
Transit fares have been identified as one of the areas where the city has struggled to meet its revenue targets this year, along with parking fines and landfill revenue. So the 2019 budget is forecasting lower revenue from bus fares.
The Remai Modern art gallery will also get $456,000 more in 2019; the total city contribution will be $5.9 million as the facility enters its second full year.
Although the city does not plan to borrow to build in 2019, the capital budget still nearly comes to $260 million, most of it coming from the city’s reserve funds. The noteworthy projects in 2019 include $14.3 million to keep advancing improved transit service and $13.5 million to repair the Senator Sidney L. Buckwold Bridge.
The city plans to add about 55 new full-time positions, including the 10 for police, bringing the total to about 3,890.
Tarasoff noted that with population growth, the city’s full-time employees per 1,000 residents has been decreasing for five years.
The public library is seeking a 6.38 per cent increase after seeking no increase in 2018.
The 2019 edition could be the city’s last one-year budget; plans are underway to start a two-year budget in 2020-21.