Warman city councillors are sharpening their pencils as they prepare to finalize the city’s 2024 capital and operating budgets.
A special meeting of council is slated for Monday, November 13 to pare down expenses contained in a draft budget prepared by city administration. The special meeting, to be held during the day at the Warman Home Centre Communiplex, is open to the public.
Budget decisions will be particularly tough this year because of skyrocketing costs, according to Warman Mayor Gary Philipchuk.
“We’re feeling the effects of inflation this year more than in the past,” said Philipchuk in an interview October 17. “For many years, the rate of inflation was about two or three per cent, so even though our expenses went up, we’ve been able to keep property tax increases below inflation.
“But over the past two years, from August 2021 to August 2023, the rate of inflation has gone up 11.5 per cent. That inflationary pressure translates into increased costs for the city.”
Maintaining current services and infrastructure while keeping a lid on tax increases is always a balancing act, according to Philipchuk. But because of soaring inflation, a property tax increase in the coming year is unavoidable. The city’s goal, he said, is to keep it reasonable.
“We don’t have any control over increased costs for equipment and for necessary capital projects,” said Philipchuk. “But we still have to keep moving forward; we still have to accommodate growth and provide the quality-of-life amenities that people expect.
“We’ll be taking a hard look at the budget in the coming weeks to figure out what capital projects we can defer and how we can best manage operating expenses.”
Philipchuk said he understands that residents and businesses are also coping with increased costs.
“I realize people are looking to us to keep a tax increase to a reasonable amount,” he said. “I always use inflation as a guide point, and try to keep it below that rate.”
A draft budget prepared by city administration and presented to a city council meeting on Monday, October 16 included a proposed 9% municipal property tax hike.
Philipchuk said council will be looking to limit a municipal tax increase to no more than 6%.
One of the items in the draft budget submitted by city administration is a proposed increase in the base tax of $69 per property to go toward a new RCMP building. Removing that item from the 2024 budget would reduce the proposed tax hike from 9% to 6% as a starting point, said Philipchuk.
“There are a lot of questions still up in the air about the new RCMP building,” said Philipchuk. “Is it to be part of the Regional Node? Is it something Warman does on its own, or do we do it in partnership with Martensville? And we don’t have any numbers from the RCMP yet; so for all practical purposes, it’s not something that is going to be ready for this year anyway. So I feel that moving it to next year at the very earliest would probably be what’s going to happen.”
RECREATION LEVY
While the proposed hike to the base tax may be shelved, other items are set in stone. Council voted earlier this year to implement a recreation capital levy of $75 per property in 2024. The recreation capital levy will rise to $150 in 2025 and continue at that level for succeeding years.
The recreation capital levy is directly tied to funding recreational facilities, said Philipchuk. The immediate priority is the expansion of the Warman Home Centre Communiplex (WHCC) to include a second ice surface; but in future the recreation levy would be allocated to other priority projects.
“This is a designated amount tied to something very specific, which is recreation capital projects,” said Philipchuk. “This is the most open and transparent way of setting aside funds that are targeted at a specific type of project.”
Philipchuk said the city is proceeding with the arena expansion on its own following several unsuccessful infrastructure grant applications to senior levels of government. The city is currently in the process of requesting competitive bids from contractors on the project, and a tender is expected to be awarded in late November. The goal is to have the new facility operational by the fall of 2025.
Philipchuk noted the additional ice surface is needed, not only because the current facilities are at capacity, but also because the aging Diamond Rodeo Arena has experienced ongoing issues with brine leaks under its ice surface that threaten to take the facility out of commission at any time.
“Earlier this fall we were unsure if the Diamond Rodeo Arena would make it through this season,” said Philipchuk. “Fortunately, right now everything seems to be fixed for the time being. But the reality is, we need to figure out what to do if we lose the use of that facility.
“So we’re moving forward with the WHCC expansion to allow us to do a full forensic and perhaps an overhaul of the Warman Diamond Rodeo Arena instead of relying on temporary band-aid solutions.”
CAPITAL COST OVERRUNS
In addition to figuring out what capital projects to retain and what to defer in the 2024 budget, city officials are also wrestling with cost overruns from the 2023 budget for the expansion of the city’s sewage lagoon and also for the replacement of Lift Station Number 3. Those expenses have been reallocated to the 2024 budget.