INNISFAIL – Town council continues its budget deliberations for 2023 today (Nov. 29) with a sense of urgency to either find ways to trim unnecessary expenditures or injecting reserves to keep this year’s municipal tax increase for citizens at an increase of no more than four per cent.
There was a two per cent tax increase last year for 2022, only the second tax hike since 2015.
Last week after two days of deliberations on Nov. 24 and 25 town council found itself in a position of facing a four per cent increase with a projected budget deficit of $60,000, which municipalities are not allowed to do under the Municipal Government Act.
Mayor Jean Barclay told the Albertan last weekend that town council has options available to get the deficit figure of $60,000 down to a zero balanced budget without facing a tax increase higher than four per cent.
“One of them is more of a tax increase but I don’t feel with the conversations we had there’s an appetite to have more of a tax increase. It's already significant compared to what our residents and business owners are used to,” said Barclay. “But we've had increases of over five per cent from both the water and wastewater commissions and there’s also inflationary pressures on everything that we do.
“We're no different than what households and businesses are feeling,” she added, noting council is working “very hard” to keep the increase at no more than four per cent. “I do not foresee that from the conversation we have had. We are basically going through the operating budget line by line and item by item, but we must keep in the back of our minds, what are the community’s expectations?”
Barclay said the town could also dip into reserves to cut the $60,000 down to a balanced budget, which is not a popular option but one preferable than raising taxes even more.
“I think council from the discussion I heard is that we would rather do that then add another percentage point tax increase,” said Barclay, adding council is being mindful throughout budget deliberations that it must try to maintain service levels with minimal impacts.
One area of concern going into 2023 is that there is less support from the provincial government. Provincial MSI grant monies to fund infrastructure projects has been slashed dramatically for all Alberta municipalities.
Innisfail has seen its MSI cut from $1.8 million in 2018 to $847,106 in 2023.
“That is significant,” said Barclay.
Aside from the well-known inflationary challenges, Barclay said there are other ones, such as remaining committed to the priorities the town and council has already laid down to the public.
“I don't think we'll be able to be quite as ambitious going forward in the next year, that's for sure,” said Barclay before budget deliberations began. “We still have to build out the new industrial park, and there's always infrastructure capital projects that we're doing.
“We're going to have to make some difficult choices as to what to do and what not to do, and what to maybe put out into the future but that happens every budget cycle.”
She said council also has to make a decision on how to fund the $5.5 million development of the new 46-acre Southwest Industrial Park on the reclaimed sewage treatment plant and lagoon lands south of 37th Street.
Last June, town council approved second and third readings of Innisfail’s new borrowing bylaw to finance the development plan.
“That's what we need to decide is how are we going to finance that development and we talked a few months ago that we would get a loan or a partial loan, and I believe that is coming back to us in December with the details of that because that needs to go to the Government of Alberta,” said Barclay, and reiterating “touch choices” have to be met to ensure core services are maintained.
“We have to make sure our fire, police, infrastructure, parks, trails, and recreation facilities are looked after,” said Barclay, noting there has been “a lot” of pressure on local emergency management services.
“There’s a lot more pressure on them,” she said, noting annual ambulance calls have gone from 180 three years ago to the current 300 range.
There is also the matter of waiting for the federal government to decide how much municipalities, including Innisfail, will have to absorb on retroactive payment for policing now that there is a new collective agreement with the RCMP.
The Town of Innisfail has previously stated its bill could be as much as $500,000.
“We want to see the federal government pay that portion, or at the very worst have it split the 70 - 30, like we already do,” said Barclay. “But we're strongly opposed to having that whole retroactive pay come down on the municipality.”
