MOOSE JAW — The 2023 audited financial statements have made it clear to city council that it must prioritize major capital projects in the future and focus more on providing core municipal services.
Council received the financial documents during its July 8 regular meeting and commented on the data in the reports.
The value of the city’s reserves — currently at $114 million — will diminish over time because of inflation if council doesn’t build up that account, said Coun. Heather Eby. She always thought that maintaining that fund would be sufficient, but that’s untrue and could affect future operating budgets because costs would have risen while contributions would remain flat.
Residents regularly tell council to spend that money now, but that would not be helpful, nor would it allow the city to grow that account, she continued. She hoped that councils decades in the future would still have access to the interest from the reserves; otherwise, “a big jump in taxation” would be required.
“It could be a very short-term gain for a long, long-term pain,” Eby remarked.
The Crescent View Lift Station, Fourth Avenue Bridge and a new outdoor pool are proposed major capital projects, and while all are important, the first initiative is the most imperative, she said. If the lift station fails, Moose Jaw is “really, really in trouble,” so the other two projects may have to be shelved for a while. Also, other levels of government must provide funding.
Eby added that without water and sewer services, no one would be living there.
The city’s current debt limit is $95 million, so to increase that fund, it must apply to the Saskatchewan Municipal Board (SMB) and provide its financial data, said Brian Acker, finance director.
However, the board has an “elaborate formula” — it changes often — that dictates the maximum debt limit a municipality may have, he continued. Several years ago, the SMB denied a request from city hall to increase the debt limit to $110 million.
Using debt to finance projects is not the answer, though, as shown by how much debt Regina and Saskatoon have taken on, Acker added. Moose Jaw would require a debt limit of $500 million to be on par with those cities; servicing debt payments would become onerous and cost millions.
While Acker presented the 2023 audited financial statements as healthy, the main message from his report is that future councils will face continued financial pressures, said Coun. Dawn Luhning. Therefore, the city can no longer be “everything to everybody” as in the past.
“Some groups are going to be disappointed in future years if councils do dig in and say we need to start focusing (on) our lane, which is streets and roads, garbage (and) parks,” she added. “… if we continue to take on things that aren’t our priority or (in) our lane, we’re going to be stretched.”
Since Moose Jaw finished last year with an operating deficit of $1.4 million, Coun. Jamey Logan asked city manager Maryse Carmichael what she was doing differently to prevent shortfalls from happening again.
Financial forecasting is an important tool in the corporate world, so most organizations have monthly financial reviews along with their annual analyses, Carmichael said. After she started last spring, she implemented monthly financial reviews and met with directors and staff to analyze how much departments had spent.
That monthly review will continue, while she has told directors to create monthly budget forecasts to accompany their 2025 budget requests.
Carmichael added that rigour and accountability are important, while staff are encouraged to consider those qualities when performing their daily duties, reviewing reports or analyzing data.
The next regular council meeting is Monday, July 22.
