A report estimates Saanich will have to raise revenue from property taxes by almost five per cent next year, and questions why council continues to waste the time of staff by asking for budget reductions scenarios, when councillors hardly act on them.
These two findings appear in a report from Valla Tinney, Saanich’s director of finance, in which she offers a “very high level forecast” of next year’s budget while seeking approval of budget guidelines.
Tinney’s report stresses that all “estimates are preliminary” in spelling out the larger financial coordinates and circumstances shaping next year’s municipal budget.
It currently calls for a “preliminary” increase of property tax revenues by 4.73 per cent against the backdrop of rising labour costs, infrastructure needs, and declining revenues among other issues. Last year, council approved a budget that included a 5.2 per cent increase in revenue from property taxes with the proviso that almost third of the additional revenue covered the introduction of the provincial Employer Health Tax (EHT), a cost not faced in 2020.
“The most significant cost driver for the annual budget continues to be labour related costs,” said Tinney in her report.
Labour costs represent 56 per cent of the operating budget, with final figures still emerging after the Saanich Police Association collective agreement expired last year. Two other labour agreements with Saanich municipal staff and firefighters will expire at the end of 2019.
“[So] estimates are required at this point for these employee groups, exempt staff and elected officials,” said Tinney. “Labour will account for an estimated expenditure increase in the magnitude of $2.7 million split between municipal and [police board] employees.”
Tinney’s report also anticipates a police budget in excess of the 3.5 per cent increase approved last year and higher non-discretionary increases for regional services. New positions approved last year will also have a financial effect in 2020.
The report also calls on council to maintain funding levels to replace capital infrastructure, as well as for facilities and information technology requirements.
Tinney’s report also addresses revenues. “Building permit revenues continue to fluctuate, but the long term trend supports that current budget levels continue to be appropriate with conservative increases each year to reflect rising construction costs,” she said. Non-market revenue is also not expected to increase significantly.
“While it is possible that Saanich may experience another 2011 or 2016, the long term estimated growth for the municipality will result in sustained non-market growth of less than 1 [per cent] of taxation,” she said.
Tinney’s report also wonders why council continues to ask for budget reduction scenarios by percentage of tax increase, when it has not acted upon them in recent year.
“As only two operational reductions have been accepted by [council] in the past [two] years, it [would] appear that this historical reduction scenario approach is ineffective and a non-productive use of staff time,” she said. “Staff seek direction in this regard.”
Council will consider the report Monday.