Olds town council passed the 2012 operating and capital budgets of $21.2 million and $4 million at its regular meeting yesterday, hiking residential property taxes by an average of $55 a year.
Councillors decided to fund amortization to cover $250,000 depreciation of town assets, a fraction of the $2 million needed to fully fund amortization for 2012. This was the first year the town included amortization in the budget, even though the town has been required to include it in financial reporting information since 2009.
With the added expense, taxes for the average homeowner (based on the average residential assessment of $300,000) will rise by 3.4 per cent or $54.95 per year.
Highlights of the budget included adding 3.5 staff to the town payroll. Administration said there will be minimal impact to the budget since the positions will fill current vacancies. Road, trail and sidewalk improvements totalling $1.2 million will be funded in 2012, as will $1.5 million for water and sewer infrastructure. The town has budgeted $1.3 million for equipment and other infrastructure.
On the operating side of the ledger, council voted yesterday to include $20,000 to fund Central Alberta TV to broadcast municipal events. Coun. Wade Bearchell took issue with administration's characterization of that item as a “contribution.”
“I have confidence that's not the way it's going down, but we should confirm that,” he said.
Coun. Mary Jane Harper agreed, suggesting that the item be put under the town's advertising budget.
Mayor Judy Dahl said she was pleased with the fact that the town was able to maintain the non-residential growth rate while still coming in with minimal tax increases. With a 3.4 per cent cost of living increase adjustment and $236,655 added to the budget for wage increases due to a review that was conducted earlier this year, she was happy that the tax increase was kept to only 3.4 per cent.
“A 3.4 per cent increase to taxpayers … (while) still meeting the consumer price index and not going above that (tax increase) is steady and moving forward. The thing that hit us hardest, of course, is the fact of having to move forward with depreciation, and being proactive in that we've had that on the table since 2009. We are basically being forced to put money for (future) assets away, ” she said.
Dahl said she will be raising the amortization issue with other Central Alberta politicians and the Alberta Urban Municipalities Association when those groups get together in the new year.
“It's going to be a huge discussion with municipalities for the future,” she said.
Norm McInnis, the town's chief administrative officer, said the town saw an opportunity to reduce the capital budget for this year and regroup. He said with the decision to allocate some money for amortization, the town also saw an opportunity to look more critically at what projects the town should fund in 2012.
“We want to take some time to (review) our long-term capital plan and see how this new move to tangible capital assets will give us different types of tools to replace capital assets,” he said.
McInnis said administration is also hopeful that the non-residential tax base will continue to grow, and pointed to the Fibre to the Premise project as well as moving forward with the proposed eco-industrial park as two examples the town is optimistic about to keep reliance on the residential tax base in check.
“We want to continue to support that and make sure that our non-residential growth continues,” he said.
The thing that hit us hardest, of course, is the fact of having to move forward with depreciation, and being proactive in that we've had that on the table since 2009. We are basically being forced to put money for (future) assets away."Mayor Judy Dahl, Town of Olds
