Wednesday, 22 January 2014 14:12

Swift Current mayor answers budget critics

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Editor:

There have been a lot of misleading comments made recently about proposed changes to the city’s financial strategy, so I think it’s time I cleared some things up.
While anti-growth critics of the plan are certainly entitled to their own opinions, they are not entitled to their own “facts.” It is vitally important that residents and business owners in Swift Current hear the truth and understand the common sense thinking behind the proposal.
When compared to other cities and towns in Saskatchewan, Swift Current could increase taxes by 50 per cent and we’d still be the lowest taxed city in the entire province. In fact, if property taxes collected increased by 100 per cent, we’d still be on the low side of average. These drastic numbers are meant to emphasize just how low taxes are in the city. 
Unfortunately, many people either have a hard time believing it or haven’t known about it — until now. So here it is: Per capita, in Swift Current, we pay $607 per person in property taxes compared to $1,245 per person in Yorkton and $1,120 per person in North Battleford — the two Saskatchewan cities closest to us in size. 
The main reason we enjoy such low property taxes is that we own our light and power utility, which provides an annual dividend of roughly $5 million to the city. Traditionally, half of that is used to fund capital purchases (equipment for streets, parks, facilities, etc.) and the other half subsidizes our property taxes. While that strategy may have been prudent during a time when neither the city nor province was growing, times have certainly changed — we must look to the future rather than cling to the past in order to ensure our share of Saskatchewan’s growth. 
Yorkton is a terrific example to compare with as they also have low taxes and the same population. They budgeted to collect $19.5 million in taxes for 2013, so a five per cent increase there is $975,000 in additional tax revenue to operate that city. In Swift Current, we collect approximately $9.4 million in taxes, so a five per cent increase is $470,000 of new tax revenue. As you can see, the percentages don’t tell the whole story. The truth is that despite recent increases, we are so far behind other communities in property tax increases over the years that we risk losing our ability to compete with those same communities for the revenues and opportunities now available in the areas of new growth, new business and a constantly improving quality of life. In other words, if we want a future we choose for ourselves, the proposed changes in our financial strategy just make sense.
On the matter of municipal debt...
Very bluntly, without using debt for the responsible investments our city has made, our taxes would not be as low as they are. Of the $74 million in total city debt, more than $50 million of that is for water treatment, wastewater, property development, bridge repairs and the hospital. Obviously, these are critical and unavoidable investments in our community. 
The remaining $24 million is for upgrades at our busiest facilities, such as the iplex and Fairview Arenas (which have attracted more than $4 million in funding from federal and provincial governments) and other city facilities or equipment used to provide services. 
For illustrative purposes, when you combine the property taxes we’ve collected with our light and power profits each year, the total amount collected is still approximately $5 million per year less than Yorkton collected in property taxes alone, in each of the past 10 years. If our total revenues had simply matched over that time, we’d still be the lowest-taxed city in the province, and that extra revenue would create $50 million less in debt.
Certainly, there are things in each budget that people agree or disagree with, and we understand an all-weather track or a playground that is accessible for children with disabilities seems “wasteful” to some.
Collectively paying for things is part of living in a well-rounded community. We can’t (and shouldn’t) stop investing in all areas of the city, because focusing only on road repairs at the expense of water treatment, parks, and recreation facilities would only create future maintenance issues on what we neglect. Not only are we tasked with delivering basic services, but also offering our residents a high quality of life. 
To conclude, this proposed change would mean several things for property owners in this city: 
1. A change in financial strategy simply means we will no longer use light and power to subsidize property taxes, but to pay for capital items in the city rather than relying on debt.
2. Eliminating the property tax subsidy would be a property tax increase phased in over a period of five years. 
3. Annual budgets will continue to be thoroughly vetted and operational efficiencies sought. 
4. Swift Current residents will continue to enjoy the lowest municipal property taxes in Saskatchewan — even after the property tax adjustment is complete.
Criticism of city finances or the change in financial strategy would be warranted if municipal taxes were unreasonably high and council was asking for more. Fortunately, we are in an enviable position. Our taxes are the lowest in Saskatchewan by a wide margin and our balance sheet is in good order. Any assertion Swift Current is or will become unaffordable due to property taxes simply isn’t true. 
Nobody, including myself and council, likes taxes and increases. However, when it comes to services such as fire and police protection, safe drinking water every time we turn on the tap, clean and functional recreation facilities, street repairs and snow removal, we all want and expect those services properly maintained or, when necessary, improved or replaced. 
We have made significant investments for the betterment of our community, and with your support, we will continue to do so. Swift Current is a wonderful place to live and offers a truly enviable quality of life, and we will continue to strive to be a community that refuses to settle for “just good enough.”    
Jerrod Schafer,
Mayor, Swift Current

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