INNISFAIL - With an expected tight and conservative budget now looming and the municipality facing large big ticket expenses in 2019, town council has resisted the temptation to snag huge new utility franchise fee revenues that would adversely impact local consumers.
However, local utility consumers, including homeowners, business owners, renters, schools, churches, and federal and provincial government offices, will still see a more moderate increase in costs for gas and electricity in 2019, the first hike in at least four years. And there could also be a tax increase in the 2019 civic budget.
"I'm expecting it's going to be a real conservative budget to put together with new staff and council. Strategic planning is different, therefore their (councillors') wants and needs are going to be different," said Heather Whymark, the town's director of corporate services. "We are going to have to look at how we budget this year to whether we actually look at a tax increase to accommodate some of those new wants and needs."
Mayor Jim Romane agreed with Wymark it will be a "tight" budget this year, acknowledging some big important expenses are coming, notably the new skatepark, which the town has already committed more than a half million dollars towards. Romane has no regrets about that commitment.
"Not at all, not at all. We are not looking back. I have talked to council periodically, 'are you guys having any second thoughts?' And everybody said no we are straight ahead. Let's go," said Romane. "It's not a cheaper version by any means, and we're being told by other communities that it's great, and that they wished they had gone a step further with their bowl and other items."
During council's Agenda & Priorities Meeting on Oct. 1, Whymark presented her reports as information on the 2019 franchise fee rates for ATCO Gas and FortisAlberta. Council was told the town would be losing $36,268 in 2018 franchise fee revenue from ATCO. Instead of collecting a forecasted $496,351, Innisfail will only receive $460,083.
With Innisfail's franchise fee rate with ATCO now set at 23 per cent, Whymark said projected revenues for 2019 are $473,464. Whymark's report to council recommended increasing the franchise fee rate to 30 per cent, which would bring in an additional $144,098.
As for FortisAlberta, the report to council recommended a more than double franchise fee rate, from nine per cent to 20. That would more than double franchise fees on consumer power bills, from an average $5.36 to $12.71 per month. However, the total franchise fee revenue to Innisfail from FortisAlberta would jump from a projected $743,096 to a whopping $1,697,931, an increase of $954,836.
While the projected increased franchise fee revenues were enticing, council members unanimously agreed the hikes would be too steep and sudden, and would have too big an impact on major utility users in town and their budgets.
"Doing it (increase) before we do budget looks like a tax grab that is going to general revenue and not purposed; you're not showing the need," said Coun. Gavin Bates in a passionate response to the franchise fees report. "As much as we say it will target all users I know darn well it will target any pensioner who is paying gas or electricity."
Bates said a better idea for council was to go through the upcoming budget process and see where the town stands financially, and then "predict" the franchise rates increase for next year, with council deciding whether it should confirm the hike.
"You would be fully ready for it," said Bates."I keep hearing what good shape we are in. Let's take whatever our needs are out of reserves for a year and plan this for next year if that is what we really need."
However, council members opted to look for a more moderate increase to utility franchise fee rates for 2019. Administration was directed to bring back a new report to council on Oct. 9 that proposes a three per cent hike for ATCO, from 23 to 26 per cent, and two per cent for FortisAlberta, from nine to 11 per cent.
"My job, especially with new council, is to tell them what avenues they have available to them to pull in other revenue other than tax increases. It was for information only," said Whymark. "It is easier to start high so they know where the cap is at the top, and easier for them to go below that. They are doing the public justice by not putting it up by that percentage."
