Municipal property taxes in Warman will be going up 1.6% this year following the adoption of the 2021 civic budget.
Warman City Council endorsed the budget at a meeting on Monday, January 25.
The increase is aimed at raising $167,765 in additional property tax revenue to cover the city’s operating and capital budget shortfall in the coming year. In 2020, the city’s municipal property tax levy totalled $10,485,321; in 2021, it will amount to $10,539,847.
Slightly more than $100,000 will be allocated to capital equipment purchases while just over $60,000 will go toward the operating budget.
The overall 2021 city budget consists of:
* $22,130,181 in operating revenue;
* $17,150,421 in operating expenses;
* $1,909,804 in capital expenditures;
* $4,229,760 in transfers to allocated reserves;
* $1,159,804 in transfers from allocated reserves.
The obvious question: What does the 1.6% property increase mean to the average homeowner?
The short answer is, if 2021 was a normal year and all things being equal, an average home in Warman with an assessed value of $350,000 would see a municipal property tax hike of $30.
But 2021 is not a normal year. It’s a revaluation year.
And that’s where things gets a little complicated. In 2021, property values of residences, businesses and agricultural operations are all being re-evaluated by the Saskatchewan Assessment Management Agency (SAMA). Property values are assessed every four years by SAMA to ensure assessments do not fall behind market realities.
In order to raise the $167,765 in additional tax revenue, the city must set mill rates for the various classes of property. The mill rates will be set to determine actual property taxes after the city receives its assessment values from SAMA in a few weeks. (Property tax in dollar terms is calculated by multiplying the assessed property value and the mill rate and dividing by 1,000.)
So depending on a homeowner’s final property assessment, their municipal property taxes could rise, remain the same, or even decline.
But the bottom line is the overall 1.6% property tax increase is “fair and reasonable” given the challenges of ensuring high-quality services are maintained during the COVID-19 pandemic, according to Warman Mayor Gary Philpchuk.
“Considering our costs have gone up by two per cent overall, I think we’re doing well to streamline things so that we are still putting money away into reserves and covering our operating and capital costs,” said Philipchuk in an interview January 27. “The city is in good shape financially and we’re keeping costs in line.”
Philipchuk said the city’s plan to add a second ice surface to the Legends Centre is still on the table, but the project is dependent on obtaining grant funding from the provincial and federal governments.
“We’re hoping to get some funding for major projects,” said Philipchuk.
He noted the COVID-19 pandemic has resulted in reduced revenues for the city over the past year, and he expects that will continue well into 2021.
Philipchuk said while most services are being maintained at pre-COVID-19 levels, one area that will see a reduction is the spring back-alley cleanup.
“Last year we eliminated the spring back-alley cleanup because we didn’t have the resource to carry it out,” said Philipchuk. “The fall back-alley cleanup went ahead as usual. We’ll be following the same plan again this year.”
The 2021 budget includes a 1.73% overall increase in general government expenses; a 3.16% decrease in protective services expenses; a 0.61% increase in transportation services expenses; a 1.03% increase in Environmental Health and Wellness expenses; a 12.08% decrease in Planning department expenses; and a 4.83% decrease in Recreation and Culture expenses. Total water and wastewater utility expenses for the city will rise 4.15%; however, water and sewer rates will remain the same as last year. The utility increases reflect increased costs of servicing new developments and equipment upgrades.
The city is expecting a reduction in the provincial revenue sharing grant this year, from $2.222 million in 2020 to $2.186 million in 2021.
Among the budgeted capital purchases in the coming year are an F350 truck for the fire department ($85,000), and several pieces of equipment for the public works department including: a front-end loader ($250,000), sidewalk tractor ($160,000). The truck and front-end loaders are replacements for units that are being retired
In addition, $750,000 has been allocated in the budget for land acquisition for a new public works building and yard compound.
A total of $532,000 in capital purchases is earmarked for the Recreation and Culture department. The funds will be used to improve energy efficiency in the Legends Centre; upgrade the ice plant in the Diamond Rodeo Arena, and the sound and video equipment in the Brian King Centre; and replace two aging mowers, a zamboni and a floor scrubber.