Regina city council directs administration to re-open 2017 municipal budget

Regina city council called an emergency meeting Monday to deal with an unexpected $11-million shortfall.

Last week, Mayor Michael Fougere estimated the provincial budget could cost the city between $3 million and $6 million. But $11 million was a surprise to Fougere, who said the city had not been consulted leading up to last week's provincial budget.

For some context, Fougere said $11 million would be equivalent to the city's entire snow removal or park maintenance budget.

The provincial budget cancelled $36 million in grants from SaskPower and SaskEnergy, which were paid to municipalities in lieu of property taxes for infrastructure. Money from the grants-in-lieu will no longer be given to municipalities starting April 1.

Council questions province

Emotions were running high at Monday night's meeting.

Ward 8 Coun. Mike O'Donnell questioned whether or not the province understood just how municipal finances work, a sentiment echoed by Fougere in a press release that evening.

Ward 10 Coun. Jerry Flegel also questioned the idea that the municipalities dip into reserve funding. Flegel mentioned how reserve funding ensured the city wouldn't go into "huge" debt when projects like the new stadium or the waste water treatment plant were commissioned.

"That's what reserves are used for — they're not meant to pay to repair potholes," Flegel said.

Reserve funds should never be used to offset operating costs, said Ward 6 councillor Joel Murray.

"Asking us to take money from these is asking us to throw away our future growth and innovation potential," he said.

Regina city council is calling on the provincial government to reverse the funding cuts mandated in last week's budget.

The provincial budget also stopped funding libraries in Saskatoon and Regina.

Mayor wants to avoid tax increase

Monday's emergency meeting saw city administration directed to re-open the 2017 municipal budget, which was passed in February. To the best of his knowledge, Fougere said this has never been done before in the city's history.

Council will look to have a new budget ready to be presented on April 10. Fougere said the last the thing city wants to do is raise taxes, having recently done so by four per cent.

"If there is a tax increase, people of Regina are going to know the reason for that is the cut in transfers by the province," said Fougere.

Using reserves problematic, says Fougere

This weekend, Premier Brad Wall said on Twitter that municipalities are being asked to share in less than three per cent of the province's loss in resource revenues, writing that cities and towns "can do without raising taxes because of reserve funds."

"This is a permanent change," said Fougere. "Unless the government says otherwise, it's $11 million every year. Our reserves would be depleted in no time, and that's exactly the circumstances the province found themselves in."

​This weekend, Saskatoon city council held a similar meeting on the provincial budget. Council proposed looking at legal action against the province, including an injunction against legislation that would permanently redirect money from utility grants.

"It is very, very difficult on us, so we're more prepared to talk than we are to litigate," said Fougere. "That to me is not even on the table for discussion. Talk, find solutions and build a consensus and move forward."

Council will deal with its regular business on Tuesday night.