2021 Budget - Zero percent tax increase

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Yorkton City Council tabled the 2021 Operating and Capital Budgets Monday night, holding municipal tax increases to zero percent for the coming year.   

“This budget, as presented, represents a zero percent increase in taxation for the City while maintaining a balanced budget, which is required of us as a municipality,” said Mayor Mitch Hippsley. “I’m very pleased that we were able to maintain 2021 taxes at last year’s level.

“Not knowing where the city and the province will be financially and economically over the next year, Council thought it only prudent not to increase taxes this year,” said the Mayor. “This was a promise I and several of the current Council made during the election last fall, and working closely together with city administration we have achieved that goal,” he said.  

This year’s operating budget does not require an increase in taxation in order to balance. While there are operating increases and decreases in various departments, there is a significant budgetary gap expected with relation to closed or reduced service levels in facilities due to the COVID-19 pandemic.

Much of this income gap due to COVID-19 stems from reduced or eliminated revenues at our recreation facilities. While cost cutting has been undertaken to offset this as much as possible, certain fixed costs cannot be completely eliminated even if a facility is not open to the public. These fixed costs are exacerbated when the facility is open at a reduced capacity as often many costs remain at 100 percent, while revenues have decreased by 75 percent or more. An example of this situation is facilities such as the Gallagher Centre, where utilities, insurance and other building costs don’t go away even though there are fewer customers. Other areas of operation that are hard hit are areas open to the public, as increased cleaning and sanitation costs add significant costs.

A positive note, however, is that the Federal and Provincial Governments COVID Safe Restart Program has provided funding of $975,000 to offset lost revenue and increased costs related to COVID-19. This budget makes use of just under $350,000 of this funding to cover these decreased revenues and increased costs. The remaining amount will be held in reserve to cover any other unforeseen deficits from COVID-19.  

Inflation affects spending for city operations as it does any individual or organization, and thus many of our costs increase annually. These include costs for such things as utilities, wage contracts, cost of supplies and all other inputs to perform the services the City provides.

To offset these annual inflationary cost increases, reductions in spending had to be considered. The goal was to find cost reductions that had the least impact to service levels to the general public. This entailed temporary layoffs to some full-time positions as well as numerous part-time positions related to services at our recreation facilities. Other staffing changes were made in areas where efficiencies could be realized while having the least impact on the provision of services.

Regarding the city water utility, this budget includes a previously approved one percent increase to water rates, as well as the $3 per month increase to the water base charge. These amounts will offset ongoing increasing costs to replace water lines, sewer lines, and meters.

The Gallagher Centre levy will be replaced with a recreational facility levy, and funds will be placed in reserves for future capital recreation related projects. These may include such things as a new Deer Park clubhouse or renovation/replacement of the Kinsmen Arena. 

The 2021 Capital Budget includes $4,390,000 of funding from tax revenue, the same as in previous years. It does not include an increase in capital spending and does not require an increase in existing taxation to fund.

The Capital Budget includes a project previously approved by Council as part of the two year Capital Budget approved last year. This includes completion of the Darlington St./Mayhew Ave. project, including reconstruction of Darlington Street between Mayhew Avenue and Dracup Avenue, as well as the new pathway along Darlington Street. 

There are also some new projects for 2021 which were not in the original two year capital budget. These are funded from reserves and do not require an increase in taxation to achieve. The new projects include: York Road reconstruction preliminary design; Deer Park Clubhouse design; grandstand rebuilding; landfill improvements and upgrades to several water wells ($450,000 over two years, both of which are self funded,); and support for the Brick Flour Mill Project.  

This Capital budget has paused the normal one percent annual increase in taxes to fund replacement of aging City infrastructure, much of which is over 100 years old. This may be reinstituted as economic conditions improve in future years. 

The draft budget will be posted on the city website www.yorkton.ca/budget to allow for public feedback, and residents may also contact the city via email or telephone 306-786-1721 prior to the next Council Meeting March 29, 2021.