The town is bolstering its 2017 revenues with a one per cent increase in the electrical franchise fee rate as it begins its 2017 budget process, a challenging task that will attempt to navigate through an unsettling and unclear carbon tax picture.
“There is no information to date,” said Heather Whymark, the town's director of corporate services who is now working on the 2017 municipal budget. “I am not sure what they (province) are waiting for because everybody is going to be in the same situation as us, trying to do a budget.
“I was hoping at the AUMA (conference) they would come out with a bit more information. They did not,” she said. “We are just sort of hanging on and waiting to see what is going to happen.
“I will have a line for it in the budget for what the best we can use to tally with,” said Whymark of how she will deal with the new tax for the new budget.
The provincial NDP government's new carbon tax is part of its ambitious Bill 20 or the Climate Leadership Implementation Act, and is based on the equivalent of $20 per tonne of carbon emissions, and rising to $30 a tonne in 2018. The new levy, which will come into effect on Jan. 1, will target consumers with increases at the gas pumps and home heating bills. And while the legislation is offering hundreds of dollars in rebates to Alberta citizens and families, critics argue the total annual extra cost to an average household could be as high as $1,000.
As for municipalities, they have been waiting patiently for the province to provide answers. The Alberta Urban Municipalities Association (AUMA) was expected to have a better and clearer picture from the province to give to municipalities at its conference this month but none appeared. Mayor Brian Spiller has previously stated the impact of the carbon levy, which will affect every area of town operations, would likely drive up the mill rate for local homeowners in 2017.
Whymark said she called the provincial municipal affairs office last week but was not given any meaningful answer on what sort of impact the town can expect with the new carbon tax.
“Their spokesperson there (province) regarding the carbon tax is like us, ‘We don't know anything. We don't know how they are going to track it. We don't know what kind of dollars to put to it,'” she said.
“The only thing he did mention to me was what he is finding is that most of the councillors are going to use it as a platform because we are going into an election.”
In the meantime, council did approve a one per cent increase in the FortisAlberta (electrical) franchise fee rate for 2017, a decision that will create an extra $94,329 in revenue for the town, and one that will not be as onerous on taxpayers as would a similar rate increase on civic taxes.
“The ways we have to took for revenue is between increasing taxes and looking at franchise fees,” said Whymark. “This revenue collection basis goes across the users in town, not necessarily the taxpayers, so that was the thought process in going this avenue to collect a little bit more revenue generated by the users of the town, instead of through taxes.”
She said the $94,329 extra from the higher electrical franchise fee for 2017 is about the same amount as if the town looked at a 1.5 (per cent) tax increase.
The town will collect a total of $721,267 in 2017 from its FortisAlberta franchise fee, compared to $626,938 in 2016. The average customer's franchise fee will increase from $4.33 to $5.19, which works out to be an 86-cent jump in monthly customers' billings.
Council also approved the franchise fee rate on Oct. 11 for ATCO Gas, and it will be 23 per cent, the same as in 2016.
In 2016, the town generated $469,530 in franchise fee revenue. Even with the maintaining of the 23 per cent fee rate, ATCO is assuming more growth and consumption for 2017, which will mean an $8,258 revenue increase to $477,788, said Whymark, adding it will also mean a “negligible” increase on annual and monthly customers' billings.
“We are talking cents, probably less than five cents on that one,” she said.
After Whymark finishes her work on the 2017 town budget, members of town council will begin their deliberations in mid-November.
Heather Whymark, the town's director of corporate services
"I am not sure what they (province) are waiting for because everybody is going to be in the same situation as us, trying to do a budget. I was hoping at the AUMA (conference) they would come out with a bit more information. They did not. We are just sort of hanging on and waiting to see what is going to happen."
