MOOSE JAW – City administration is predicting that the 2025 budget could see a deficit of nearly $410,000, while the minimum municipal tax hike that taxpayers could face is around four per cent.
City administration kicked off the 2025 budget discussions by presenting a preliminary budget review during the Sept. 23 executive committee meeting.
Money highlights
City administration estimates that the operating budget’s shortfall will be $408,000 — excluding the Moose Jaw Police Service’s budget request — due to increases in salaries and benefits, general inflation and equipment costs. Therefore, a municipal tax increase of 1.08 per cent would be required.
One percentage point of municipal taxation next year will generate about $379,245.
Total operating revenues are expected to increase by roughly $1,142,000, while total operating expenses will increase by about $1,550,000, the report said.
Meanwhile, the general capital budget is facing challenges with funding the Fourth Avenue Bridge/Thunderbird Viaduct rehabilitation, the new outdoor pool, the Crescent View Lift Station upgrade and the landfill project.
Furthermore, federal gas tax money of $2.1 million is supporting the waterworks and wastewater utility; the municipality was unsuccessful in acquiring $26.6 million in federal funding to support Crescent View; and repayment costs for the Buffalo Pound Water Treatment Plant rehabilitation project — borrowing totals nearly $40 million — are putting pressure on that utility.
The report noted that the Buffalo Pound project is straining Moose Jaw’s financial ability to fund its 26-per-cent share. Therefore, the city may need to increase consumption charges by four per cent annually for the next few years to cover its portion.
Reviewing the report
City administration estimates that building permit activity will remain stable, while it will continue to support major industrial and commercial development projects, said finance director Brian Acker. Increasing building permits and approving more projects would have a significant effect on generating long-term taxation.
Operating budget
With the operating budget revenues, city hall expects to receive $505,000 more through the provincial municipal revenue-sharing program, $80,000 more for community services, $128,000 more in franchise fees and $50,000 more in other areas, he continued.
Meanwhile, with expenses, there will be an estimated $650,000 more in salaries and benefits, energy costs will rise by about $52,000, inflation of three per cent will add roughly $600,000, and repair costs for aging equipment fleet will jump $225,000.
Acker noted that inflation could actually be around two per cent in 2025, so the city may see some savings there.
“Realistically this year … one would realistically expect a municipal tax increase in the three- to four-per-cent range this year,” he said.
Capital budget
A new feature of the federal gas tax is Ottawa wants municipalities to conduct a housing needs assessment since that contributes to whether it approves applications, Acker said. That study shouldn’t be a problem for the Crescent View Lift Station, but it may affect whether Moose Jaw can direct that funding to the new outdoor pool.
Furthermore, while city hall was unsuccessful in acquiring a large grant for the lift station, it has been successful in attaining smaller grants for other projects, he continued.
Overall, city administration expects to see a deficit of $12.7 million in the general capital reserve budget, a deficit of $4.2 million in the water and wastewater utility reserve, a surplus of $9.4 million in the solid waste utility reserve and a deficit of $4.7 million in the land development reserve, for an overall deficit of
$12,266,143, Acker noted.
The shortfall in the land development reserve is because the city has incurred many costs developing the agri-food industrial park, although administration expects to recoup costs in the next five years, Acker added.
In response to council questions, the finance director said that investments should generate $5.8 million in interest revenue and borrowing interest repayments could be roughly $4 million.
The next executive committee meeting is Monday, Oct. 7.
