Saskatoon city council pursuing legal measures, other revenue following loss of provincial grants

Saskatoon city council is looking at what legal measures can be taken to stop the government from permanently removing grants paid to municipalities in lieu of property taxes from some Crowns.

"They're asking citizens to pay twice because that [grant] money is supposed to compensate the city," Mayor Charlie Clark told reporters.

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Last week's budget put an end to $36 million in grants fromSaskPower and SaskEnergy, which were paid to municipalities in lieu of property taxes for infrastructure.

Disappointment was the word of the day Sunday as council held a special meeting to discuss the loss of the grants, which leaves the city $8.3 million short in its 2017 budget, and $11.4 million short each year that follows.

Council moved forward with a number of recommendations that will explore how the city can cope with the shortfall.

One motion instructed the city's administration to pursue "appropriate legal measures", including an injunction against legislation that would permanently redirect the money from the grants into the province's general revenue fund.

Premier: Municipalities can do without raising taxes

The premier has 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."

Councillors, however, stressed that drawing on resource funds is not a sustainable option.

"Taking the money out of reserves would create a huge problem and a future liability for the city," Clark said.

"If we start going after those reserves we're only kicking the can down the road in creating problems for the future."

The city currently has about $140 million in total in its reserves.

Finding new savings, revenue

Saskatoon's budget for the fiscal year was approved late last year, and included a property tax increase of 3.89 per cent.

In his address to council, city manager Murray Totland said the obvious means to address the shortfall would be raise property taxes further, about four per cent according to a release from the city.

Council, however, instructed administration to report back to them on options of what other savings and sources of revenue are available.

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Council will also request to meet with Saskatoon MLAs from both parties to talk about the provincial budget's impact on the city.

Clark will be in Regina Wednesday to meet with provincial ministers, along with members of the Saskatchewan Urban Municipalities Association and Regina Mayor Michael Fougere, to also discuss the impact of the budget on cities and towns, and what steps can be taken next.

They're asking citizens to pay twice.- Mayor Charlie Clark on province's budget

As for the Saskatoon's 2017 budget, a decision on how to make up the shortfall will need to be made sooner than later.

Council usually sets its mill rate in April so property tax notices can be mailed out by the end of May.

Totland said delays that would stall the collection of property tax would come with a cost of about $500,000 a month.