Committee Agrees To Budget Change

By Robert Thomas

Executive Committee has voted unanimously to make changes to the 2022 - 2023 Budget due to a reduction in funds forthcoming from the Province under a revenue sharing grant.

At Monday afternoon’s Executive Committee meeting the committee heard the Revenue Sharing Grant from the Province is down more than anticipated.

The reason for the grant reduction is Moose Jaw’s population decline, based upon the 2021 Census, when compounded with decreased economic activity due to the COVID - 19 pandemic.

The City will now see an unanticipated further reduction in the grant of $355,299. The total reduction in the grant is $680,946.

During budget deliberations the City took into consideration a $325,647 anticipated reduction in the grant but did not factor in the effect of a population drop shown from the 2021 census.

The 2021 census saw Moose Jaw’s population drop by less than one percent. The 2021 Census, released February 9, 2022, showed Moose Jaw’s population at 33,665, a decline of 245 residents (0.7%) from the 2016 Census (33,910).

The 2021 Census numbers were not something Mayor Clive Tolley saw as problematic but when newly elected the Mayor has the status quo needs to go with new jobs and economic development increasing the population.

Administration is proposing the shortfall be made up from three sources - City Solicitor Budget savings $128,309, increased bank interest revenues of $62,000 and a franchise fee of $164,990 from the Solid Waste Utility.

The Revenue Sharing Grant from the Province sees three-quarters of one percent of the PST transferred to municipalities based upon a per capita basis.

With Moose Jaw’s population decreasing (according to the 2021 census) and other centres population increasing means the City will receive less of a share from the Province which is further compounded because the pandemic reduced economic activity where people would pay PST on their purchases.

The decreased economic activity means provincial wide year over year the grant pot shared by municipalities provincewide has decreased by $6,349,519. This year there is $124,764,154 estimated to be distributed versus the $131,113,673 in grant money in the 2021 - 2022 budget year.

Where And Why The Funds Are Available

The savings by not staffing budgeted positions in the City Solicitor’s office as well as less than anticipated utilizing outside legal counsel has resulted in $128,309 being available to make up the shortfall.

With interest rates rising the City is set to see a bit of a cash windfall as the City receives more interest as its deposits are tied to the prime interest rate. As a result the City is anticipating $62,000 more than budgeted in bank interest.

Coiuncillor Doug blanc asked if the $62,000 was a guarantee to which Finance Director Brian Acker replied :”some of it has already occurred there has been one increase already and we are anticipating one more (prime interest rate increase).”

The solid waste utility - which is funded by its users - is in sound financial shape allowing Administration to charge a one-time additional franchise fee of $164,990.

This is on top of a franchise fee of $758,00 assessed as part of the 2022 - 2023 Operating Budget. The totl franchise fee paid from the solid waste utility to the Operating Budget is $922,990.

“We feel at this point in time to dip into that (Solid Waste Utility) is not unreasonable,” Brian Acker said.

This year $1.865 million will be added to the solid waste utility reserve which now total $10.6 million.

The proposal does not make use of the Accumulated Surplus to fund the Operating Budget shortfall.

Executive Committee agreed with Administration and decided not to use the Accumulated Surplus to make up for decreased Revenue Sharing.

The Accumulated Surplus Account - where unused budgeted funds such as snow clearing on snowless years go - which once held millions of dollars has been drawn down successively over the years when it was used to pay for shortfalls elsewhere.

The current balance of the Accumulated Surplus is $856,890.

Executive Committee’s decision must now be approved at a Council meeting in order to be valid.

Councillor Crystal Froese was absent from the meeting.