Saskatoon city council has a rough three days ahead as councillors and administration work to whittle down property tax increases for 2024 and 2025.
The local business community has warned that small and medium-sized businesses are feeling the crunch, and additional property taxes would be kicking them while they’re down.
The city’s chief financial officer, Clae Hack, says a property tax increase of 7.14 per cent is proposed for 2024, with a 5.7 per cent increase following in 2025.
“We’re still finalizing a couple figures in regards to assessment growth and some others, so there will be an introductory report (this week) that might have some slight variations for that,” Hack said.
He said those variations will be pretty minor.
Hack said through council deliberation they’ve been able to cut the budget down by about $35 million so far.
“There’s also an additional 57 options and 87 service lines that we’ll be digging into even deeper (this week) to try to find the right balance between property taxes and services.”
Hack explained that every one per cent of property tax increase equates to about $2.8-3 million.
He said some of the biggest things impacting Saskatoon as well as other municipalities across the country are the inflationary pressures, saying they’ve seen a 20-30 per cent increase in things like building construction costs, facility maintenance and roadways.
Hack said residents will see a slight decrease in service levels in the city due to these pressures.
“It’s the service level that we can afford with the property taxes we have heading into 2024.”
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He gave an example of the roadway maintenance cycle in Saskatoon, saying each road in the city used to get a treatment every 20 years, but they’ve now pushed that to every 25 years.
Keith Moen, executive director for the North Saskatoon Business Association (NSBA) said he was concerned, adding that there likely won’t be the reductions he was looking for from the city.
The NSBA listed a number of recommendations during the summer to council when they first started deliberations, one of which was a reduction of full-time equivalent positions, but Moen said he felt those recommendations were ignored.
“They did nothing to accommodate those requests,” Moen said.
“We just feel that there’s not a lot of desire on the part of council to make the tough decisions that we feel need to be made in order to run the city in a prudent way and financially responsible way.”
Moen said small and medium-sized businesses are still struggling, saying additional costs could mean some will shut down.
“We’ve seen that already in some of the hospitality sector.”
Jason Aebig, CEO of the Greater Saskatoon Chamber of Commerce, said it was wise for the city to start budget talks early in the summer, saying it allowed for more discussion around the challenges the city was facing.
He said city council brought down what was initially a very excessive property tax increase, but said many people agreed that it needed to be brought down significantly more.
“There’s more work to be done,” Aebig said.
He said if the property tax increase remains where it’s at, he said this would just be “piling on,” that businesses are facing a range of challenges, and this would just be adding to it.
“I can’t think of a single area where a business has not seen an increase in the last two or three years, not one.”
He said he would like to see the property tax increase sitting at four per cent or lower, but said city council has a lot of work ahead of it.
Aebig said about 60 per cent of the city’s budget was personnel-related.
“When you have that size of your budget that is comprised of wages and benefits, you’re going to have to go to that well to find the savings, whether you like it or not.”
He said this is what many other businesses have had to face, saying they’ve had to downsize their workforce to adjust to external realities.
Aebig noted that the city hasn’t had a net decrease in jobs over the last five years, adding that more jobs have been proposed for the next two years.
He said the city needs to look at cutting service levels on certain things, saying many residents won’t notice if grass gets cut less throughout the year, but that can have an impact on the city’s pocketbook.
He said ultimately we need to remain competitive with our neighbouring communities.
“It’s going to be an interesting three days.”
The City of Saskatoon released the last batch of preliminary documents last week ahead of the budget talks.
On Nov. 10, the preliminary detailed operating and capital summary budget was released, and the preliminary capital budget project details, preliminary budget introduction and climate budget was released on Nov. 20.
Budget deliberations begin Tuesday and run until Thursday.