Rising personnel costs, weak revenues from local construction and continuing efforts to maintain and improve local infrastructure are among the factors driving the 2018 draft financial plan, the public heard Tuesday as formal budget discussions started.
Initial presentations also revealed the public would likely question proposed service reductions, whose impacts “would not be insignificant,” according to staff. Councillors, however, also heard from those who expressed concerns about the process and substance of the provisional budget. These voices have joined a chorus of critics, who are demanding substantial revisions to the budget.
The 2018 budget balances $288.3 million in revenues and transfers against $288.3 in expenditures, up almost $20 million from the previous year, and includes a 4.17 per increase in revenue from property taxes. This figure means that the owner of an ‘average’ Saanich home assessed at $878,000 would pay an additional $105 in property taxes. Including other utilities, these average homeowners would pay $163 more in 2018.
Saanich staff started to flesh out these increasingly familiar figures Tuesday by presenting the overall plan, as well as the operating budgets for various departments. These presentations continued Wednesday and Thursday, as part and parcel of larger process that runs through May.
Saanich has scheduled at least seven special committee-of-the-whole meetings to deal with various aspects of the financial plan, and Tuesday’s opening meeting offered a broad, philosophical overview of the budget that nonetheless included some telling financial details.
“The journey of a 1,000 miles starts with a first step, and that is where we are at now,” said Paul Thorkelsson, chief administrative officer, during introductory remarks before handing over to Saanich’s director of finance, Valla Tinney, whose presentation quickly addressed the rationale for raising property tax revenues by 4.17 per cent.
Cost drivers, she said, include additional labour costs for fire, police and municipal staff, non-discretionary costs for utilities and new infrastructure (parks, transportation and IT infrastructure), and continuing contributions towards the improvement of local infrastructure. Identified challenges, meanwhile, include what she described as “weak new construction revenue” of less than one per cent compared to 2017.
Council last August instructed staff to develop budget reduction scenarios of one per cent and 1.5 per cent. While council is scheduled to consider these scenarios at a later date, Tinney said the reductions “would not be insignificant.”
A budget reduction of one per cent equates to finding $1.55 million in savings or additional non-tax revenues, while a budget reduction of 1.5 per cent equates to finding $1.73 million.
She also presented findings of a 2015 survey that show “a large majority of residents (74 per cent) and business owners (71 per cent) say they prefer to keep the same level of services.” According to this survey, 11 per cent would welcome higher taxes if they financed improved services, while 12 would accept lower services.
Councillors did not tip their hand when presented with this information, but earlier comments suggest an appetite for change.
Mayor Richard Atwell described the draft as a “starting point.” Coun. Colin Plant said council will have some “difficult decisions” to make. “We need to get the proposed [tax] increase number lower,” he said.
Thorkelsson said the budget process leaves much time for a change in direction.
“Staff, of course, are not in the position to reduce or change services to reduce the budget,” he said. “That is the policy decision of council to make.”