Sundre’s council last week approved allocating about $200,000 into a stabilization fund — increasing the reserve’s total to about $305,000.
Those rainy day savings were established barely a couple of years ago to reduce the impact of unforeseen one-time expenses on the municipality’s bottom line.
“If the Town of Sundre was to experience a major flood incident, for example, and we incurred costs that were not recoverable from the province, you could pull these monies from the Financial Stabilization Fund,” said Vic Pirie, director of finance and administration.
The surplus that was allocated to the stabilization reserve materialized as an unexpected windfall from the 2017 budget that resulted largely from staff vacancies and turnovers, meaning unpaid salaries and benefits.
In other words, had the municipality maintained a full complement of employees as anticipated in the 2017 budget approved by the former council, the surplus would not have amounted to much more than a few thousand dollars — an infinitesimal drop in the bucket for a multi-million dollar budget.
However, during the March 19 meeting, there was a discussion about dedicating a portion of the surplus to offset the previously approved tax increase for 2018.
That surely sounds nice in the short-term, but simply does not add up looking further down the proverbial road, which is riddled with hurdles such as infrastructure that desperately requires tender loving care that will be harder to fund in the face of inflation and increasing costs of production. The longer repairs or replacements are put off, the more they are going to eventually cost, and the more residents and businesses will have to pay.
In a nutshell, tax breaks today mean nothing more than bigger tax hikes tomorrow.
The former council unquestionably had the right idea when it established the Budget Stabilization Fund, which will at some point likely be renamed Financial Stabilization Fund.
So today’s council should keep in mind the importance of growing that crucial reserve, which will ensure a smoother ride during an unpredictable crisis that creates economic hardship for the community.
— Ducatel is the Round Up’s editor
