City administration estimates that the 2024 operating budget faces a shortfall of roughly $120,000, while important capital projects face major funding issues due to the increasing need to rehabilitate existing infrastructure.
City council received a preliminary budget review and economic update during its Sept. 11 meeting, with city administration discussing the factors affecting the budget and the challenge of determining which project takes precedence over another.
Operating budget
City administration expects municipal taxation to grow by one per cent next year, with each percentage point increase worth roughly $349,000, said Brian Acker, finance director.
Furthermore, the municipality expects to generate $100,000 more in bank interest revenue and receive up to $228,000 if it acquires the 15 Wing Air Base fire suppression contract. It also expects to receive $982,000 through the province’s PST municipal revenue sharing program.
Meanwhile, Moose Jaw will receive $2.1 million from the federal gas tax program, with that money supporting the waterworks and wastewater utility. However, the city has not successfully acquired any large funding contributions from the province or Ottawa.
Overall, city hall expects revenues to increase by $1,789,000 next year, said Acker.
Meanwhile, inflation is expected to increase salaries and benefits — which comprise 58 per cent of operating expenses — by $465,000, he continued.
Furthermore, energy costs are expected to increase by roughly $30,000; equipment replacement is expected to cost $800,000; and inflation, in general, is expected to add $613,000 more in expenses.
Overall, city hall expects expenses to increase by $1,908,000, meaning the budget deficit will be roughly $119,000, equating to a 0.34-per-cent increase in municipal taxation, he continued.
However, that percentage excludes the increase for the Moose Jaw Police Service, which usually asks for a one-per-cent increase in annual funding, Acker added. Therefore, the potential tax increase could start at 1.5 per cent, and since council must also consider new initiatives, the tax increase could jump to two or three per cent.
Capital budget
The four major capital projects facing increased expense pressures are the Crescent View lift station, the Fourth Avenue (Thunderbird Viaduct) bridge rehabilitation, the new outdoor pool and a new landfill, said Acker.
Meanwhile, existing infrastructure needs to be upgraded, and while the city has made good progress in replacing and rehabilitating those pieces, some infrastructure requires significant repairs, he continued.
“Prioritization of budget priorities will be necessary, as the city cannot fund all of these projects at one time,” Acker stated.
One item council should discuss during its budget deliberations is whether city hall should increase landfill tipping fees, he said. Moose Jaw has not increased its fees in years and is falling behind other cities.
The Buffalo Pound Water Treatment Plant plans to pursue the next stage of its $325.6-million upgrade project in 2024, with Moose Jaw responsible for $14.3 million, Acker added. Since the municipality is struggling to fund its share, water consumption rates must increase by four per cent annually for the next several years to address that issue.
Council comments
Winning the fire suppression contract “is a big piece” for Moose Jaw because if it doesn’t materialize, council will have to make up that shortfall, said Coun. Heather Eby.
The councillor appreciated hearing that council had the power to find efficiencies in the budget, which it has discussed for years but made little headway in achieving, she said. However, new city manager Maryse Carmichael brought “fresh eyes” to a recent meeting and suggested some efficiencies and better ways of doing business.
“I’m looking forward to fleshing those out as we go forward … . I think it will definitely impact the operations of the city in a positive way,” Eby said.
Council must also address its many capital projects and may have to reduce or cut some initiatives, even though it has worked hard to put some in the budget, she continued.
“We have some tough decisions to make going forward,” Eby added.
The next regular council meeting is Monday, Sept. 25.
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