INNISFAIL – With town council’s budget deliberations for 2025 beginning Tuesday, Nov. 19 Innisfail’s elected leaders and senior staff say the municipality is at a fiscal “crossroads," leaving them with a daunting a task of putting together one of the most challenging budgets in the town’s 121-year history.
There is little doubt there will be a significant tax increase next year for local residents, higher that the 2.8 per cent hike that was set for 2024.
Town council was told by administration on Nov. 4 that a big current problem for the municipality is that staff reports culled from the town’s Asset Management Plan, which include assessments on sidewalks, roads and utilities, is showing the town’s overall infrastructure is in urgent need of money for upgrades.
In a report to council on Nov. 4 from Steven Kennedy, the town’s director of operations and Erica Vickers, the town’s director of corporate services, and with a supporting memorandum from Curtis Hoffman, the town’s engineering coordinator, there is a concerning outlook for the future.
“Based on the current capital expenditures, current condition assessments, and projected costs for forecasted projects, the annual Capital Project Program budget is insufficient to maintain the existing levels of service,” said the report.
“As provincial and federal funding sources decrease or fail to keep pace with inflation, the town will be unable to cover the funding shortfall through reserves, which are being spent faster than they are being replenished.”
In the meantime, the town has found itself with an annual deficit of reserve investments of about $1.6 million.
“It is not a good thing,” Vickers told the Albertan. “The state of our infrastructure is kind of sitting at a point where if we don't start investing more money into it, we're going to get more breakdown of our infrastructure. So, how do we balance that out?”
Vickers said there is a proposal to council about increasing transfers to reserves by two per cent per year, which by 2033 the $1.6 million deficit would finally be covered.
“That's a big ask. That's difficult to get, so I don't know how that's going to look right now,” said Vickers. “The whole point of the fourth (Nov. 4) was to say we see this gap in our capital spending and our investment into reserves, so we want to increase that transfer to reserves, which would then cause a tax increase.
“However, we're also seeing these nasty operational increases,” said Vickers.
The budget expenses for 2025 are projected to jump to $28,465,648, compared to $27,780,667 in 2024.
There are several upcoming operational increases, including $743,883 for staff salaries, $194,000 for operating projects, $75,000 towards electricity and $60,000 for the 2025 general municipal election.
“We're just giving council the heads up that budget deliberations are going to be more difficult this year. There's not a lot of stuff to cut anymore, right?”
Vickers told council on Nov. 4 during a 2025 operating budget discussion that current requirements for operating increases will require a 6.53 per cent tax increase.
She said this includes a two per cent tax increase for the Aquatic Centre debenture and 4.53 per cent for operating increases.
Vickers said the current budget does not include any increases to reserve investment.
However, Vickers is not expecting a tax increase of more than four per cent.
“I think we need to be realistic and what the residents can appreciate,” she said. “I think we need to be under four (per cent), between three and four is likely an appropriate number in my opinion.
“But again that is totally up to council.”
With all of that in mind mayor Jean Barclay agreed the 2025 budget process could work out to be the most challenging one since the town was born 121 years ago.
“I believe it is, and I think it's difficult because now we have the data,” said the mayor, noting the merits of the Asset Management Plan. “I think seeing the gradings on the various assets is really eye opening, and we've seen some of that in the last year or so but I think administration has got to the point where they're able to deliver much more detail to us, and so we have to think about the future.
“We've seen grant money decrease, and it's all falling back onto our taxpayers,” said Barclay. “So, we're really at a crossroads. What we have to keep top of mind is affordability for our residents. We know that is a huge issue for people.”
Council deliberations for the 2025 Town of Innisfail budget are scheduled for Tuesday, Nov. 19 and Wednesday, Nov. 20 starting at 9 a.m. each day.
Friday, Nov. 22 is reserved if deliberations have not concluded at the end of the Wednesday session.
These meetings are held in the town's council chambers and are open to the public.
