Less revenue will flow into the municipality’s water utility coffers this year due to higher expenses to repair a record-setting number of water main breaks, according to city hall.
There were 35 water main breaks from July 1 to Sept. 30, compared to 21 during the same time last year. Meanwhile, there have been 93 breaks from Jan. 1 to Sept. 30, compared to 68 during the same time last year.
Those 93 water main breaks — with the possibility of more before the end of the year — mean the municipality will likely incur costs of about $2.2 million to fix them all, explained finance director Brian Acker.
“That is very significant compared to what we would be in in a more normal situation,” he told city council during its Nov. 12 regular meeting. “That takes anywhere from $1.2 (million) to $1.5 million away from the overall profits of that utility. That profit goes to fund our infrastructure … . It’s a bit of a catch-22 situation.”
A summary of the revenues and expenses from the third quarter, plus the overall financial picture for the City of Moose Jaw, was presented to council during its regular meeting. Council voted 6-1 to receive and file the report; Coun. Brian Swanson was opposed.
“I really appreciate the comparisons provided,” said Coun. Crystal Froese. “It gives us a birds’ eye view of where we are at through our quarter year and how much work is probably left to be done.”
Appeals board decisions
The third-quarter report showed, for the most part, there is nothing out of the ordinary with the municipality’s finances, Acker said.
Yet, there were some areas worth pointing out.
A summary of revenues for the third quarter showed the municipality had a surplus of more than $128,000 under the municipal taxation category. However, Acker explained that decisions made by the Development Appeals Board in favour of commercial property assessment appeals means that supposed surplus will be wiped out.
Acker didn’t have the full assessment values made by the appeals board but knew the overall losses to the municipality would be $280,000. City council made provision in the 2019 budget to cover property re-evaluations up to $120,000, so council can expect to see a shortfall of $160,000.
Other revenues
Revenue is down in the fines and penalties category compared to 2018 since SGI is now taking more of the revenues from the automated speed enforcement cameras to cover costs and share with other municipalities.
The municipality expects to take in $1.675 million in revenue this year from this category, compared to the $2.28 million received in 2018.
Revenue is up in the recreation services department over 2018 since YaraCentre now forms a part of the municipality’s revenues. So far, the municipality has received $527,186 from the sports complex, while expenses are $525,336.
Expenses
Total expenditures are up about $3.68 million in the third quarter, with most of that for the police service ($1.1 million in salaries), fire services ($450,000 salaries) and fire services retro pay for the recent four-year salary settlement ($1.715 million).
Tax arrears
The total amount of property tax arrears has increased since 2017, according to the third-quarter report. Composed of liens and payment plans, total arrears in Q3 totalled $854,822 in 2017, $1.29 million in 2018, and $1.31 million this year.
Meanwhile, property tax receivables — composed of current property taxes received and outstanding arrears — totalled $7.6 million in 2017, $8.1 million last year and $8.2 million this year.
Other areas
- Expenses in the traffic division category were about $200,000 less this third quarter compared to 2018 since the municipality no longer pays any of the costs related to automated speed enforcement.
- There has not been any subsidy provided yet to Mosaic Place this year, with the only cost incurred being $168,000 in equipment reserve contributions.
- Waterworks distribution costs are roughly $465,000 higher than in 2018, due to increased expenses around distribution main repairs.
- Sewage treatment costs were down by about $250,000 in the third quarter compared to 2018. This is due to the elimination of the sludge removal reserve.
- The Saskatchewan Municipal Board approved the municipality’s request to maintain its debt limit at $95 million. The City of Moose Jaw can apply at any time in the future if a change is required.
The next regular council meeting is Nov. 25.
