Thursday, 06 April 2017 03:41

Provincial budget delivers a surprise for City of Swift Current

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The City of Swift Current will have to find additional savings in its 2017 budget as a result of a reduction in funding from the provincial government.


For Mayor Dennis Perrault the grants-in-lieu reduction to municipalities in the 2017-18 provincial budget was unexpected.
“We spent a lot of time on our budget,” he said. “We worked very hard before Christmas to put our budget together. What we were trying to do was to find efficiencies and more importantly, we were trying to set forth a budget that had all must do’s, what we needed to do. We’re very thankful that the provincial government has come to Swift Current in the form of a new hospital, a new long-term care facility, two new joint-use schools, but it did come as a very big surprise on March 22 when the provincial government came forward and decided to pull away the grants-in-lieu tax specifically for SaskPower and SaskEnergy.”
The impact of the grants-in-lieu reduction on municipalities will vary widely. The provincial government has capped the reduction at 30 per cent, which means that nine municipalities (Estevan, Humboldt, Melfort, Melville, Moose Jaw, North Battleford, Prince Albert, Weyburn, Yorkton) will keep a portion of their grants-in-lieu payment.
In the case of Swift Current, the grants-in-lieu reduction is $523,490, which is less than for many other municipalities.
“A grant-in-lieu of taxes is reimbursing municipalities for the infrastructure and for the land that’s taken by SaskEnergy and SaskPower as opposed to paying municipal taxes,” Perrault explained. “The reason that ours is far less is because number one, we own our own electrical utility, but number two, we do not have a lot of SaskEnergy or SaskPower buildings within our community as opposed to other municipalities. The real big one though is that we do own our own utility.”
Swift Current will also receive $256,743 less in municipal revenue sharing based on provincial sales tax earnings, but the City was aware of this reduction before the official announcement of the provincial budget.
“The reason why we could do that is it’s based on last year’s data,” he said. “So we already knew last year’s PST revenue and more importantly, we already knew what our census numbers were. So it’s a predictive model and that’s the reason why municipalities are so in favour of this current revenue sharing formula because it’s predictive. It allows us to plan, it allows us to budget, it allows us to move forward, knowing that we’ve got this revenue to work with, even in a year when there’s less.”
The total reduction in revenue sharing for Swift Current as a result of the 2017-18 provincial budget is therefore $780,233 or 23.05 per cent less than in 2016-17.
“We really don’t have too many levers,” Perrault said about the City’s options to deal with this drop in revenue. “One would be to raise tax and I can promise you we won’t. The tax increase that we put forward in our budget almost two months ago was the one that we’re going to stay true to for this year. The other option that we have is to cut services. We will be looking at those things and to continue to find efficiencies.”
He added it will be extremely challenging for the City to find additional efficiencies in the 2017 budget as a result of the unexpected grants-in-lieu reduction, because council members and administration have already been through that exercise in December during the preparation of the budget.
“We’re running a city with one less body than we had last year,” he said. “That’s an incredible feat in my opinion when we are in growth mode. The other option, we have is to dip into reserves. We do have some savings and at the end of this year this is something we might have to do.”
The City is still evaluating the impact of any other items in the provincial budget on Swift Current, for example a reduction of funding for the urban highway connectors program.
“We were able to apply and we were successful on the Highway 4 interchange, and so that will still happen,” he said. “The urban connector program is something we would be applying to every year. So we’re not sure yet how that’s going to impact us going forward.”
Swift Current is a participating community in the Main Street Saskatchewan Program, which has been suspended until further notice on April 1 as part of the provincial government’s efforts to control spending.
Main Street Swift Current has recently received close to $60,000 in provincial grant funding and while agreements with communities will remain in place during the suspension of the program, there will be no intake of grant applications during the 2017-18 fiscal year.
“It’s our understanding that those grants are still going to be completed per their contract, but moving forward that’s where the change is going to happen,” he said.
Perrault noted various items in the provincial budget can have an impact on Swift Current as a community, for example the termination of the STC bus service, the addition of provincial sales tax on  restaurant meals and children's clothing.
The reduction of provincial funding to the regional library system will have an impact on the Chinook Regional Library. The City’s 2017 budget includes an allocation of $$413,683 for the Swift Current Branch Library. The City will be unable to assist the Chinook Regional Library with the budget shortfall.
“We are not prepared to make up the shortfall that the Chinook Regional Library is facing,” he said. “We feel that we’re contributing a very reasonable number for the services that we receive for the library here in Swift.”
Despite the potential impact of the various reductions in the provincial budget, Perrault is still positive about the outlook for Swift Current.
“The government said all things were on the table and they were going to look at all lines, and they did,” he mentioned. “So we will see impacts in the next few months as a direct result of this provincial budget. That being said, I’m confident that 2017 will be a great year for the city of Swift Current. We are going to see growth, we are going to see new businesses choosing to be here, in spite of those changes. It’s a challenging budget that the provincial government faced, and we as the City of Swift Current want to work with the province. They’re our partner, they’re our ally, and we want to move together because we’re thankful for all the things that they’ve been able to offer us in our city.”

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Matthew Liebenberg

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