Following a defeated motion to reduce the 2018 residential and commercial mill rate increase, council last week narrowly approved the three per cent hike.
Elected officials discussed the issue during the April 9 meeting in the absence of Mayor Terry Leslie and Coun. Rob Wolfe.
Attending were Deputy Mayor Cheri Funke as well as councillors Paul Isaac, Richard Warnock, Charlene Preston and Todd Dalke.
Leading up to the discussion was a presentation by Vic Pirie, director of finance and administration, who offered an updated review on the forecast for the municipality’s 2018 operational budget based on feedback and direction provided by council during the March 28 meeting.
“We have adjusted the preliminary first quarter report, which ends up resulting in a deficit of about $119,000,” he said, adding that shortfall stems largely from not anticipating any additional Mountain View County recreation and culture funding for the full year.
Also contributing to the deficit was lower assessments that reduced revenues. The budget as presented also accounted for the previously approved increase of three per cent to the residential and commercial mill rates, said Pirie.
However, administration believes that there will be throughout the coming year opportunities to make up that $119,000, either through further savings in staff salaries and benefits, as well as additional revenues coming forward, he said.
“A lot of that could be through economic development through the growth that occurs here. We already, with the one project going forward, basically have met our year’s projections for revenues for development permits, for example,” he said, referring to the proposed medicinal cannabis facility.
“So if we get additional development, through the process there will be building permits and electrical permits and all of those that will in all likelihood be higher than what we budgeted.”
There could very well be other revenues throughout the year to help offset the deficit without necessarily depending on staff and salary savings, he said.
The situation will be closely monitored and council will regularly be presented with updated financial reports to council, and if it should appear that the aforementioned factors do not materialize, administration also outlined alternative courses of action to cover the deficit.
One option is to forgo interest reserve transfers that would eliminate almost $28,000 from the deficit, another would be to eliminate the fleet reserve transfer that would reduce the deficit by $37,000, and council could also consider eliminating the transfer to infrastructure reserves that would amount to a $53,000 bite out of the deficit, although that last option is from administration’s perspective the least desirable, said Pirie.
“If there was a need to actually look at finding funds to recover the $119,000, those are the three steps that we would be recommending to council for consideration.”
All of these budget figures are based on the previously approved three per cent increase to the commercial and residential mill rates, which administration recommended maintaining before asking council for a decision.
To start council’s discussion, Warnock tabled a motion to approve a 2.25 per cent increase to the 2018 residential as well as commercial mill rates.
Funke asked administration whether information was available regarding how much that reduction in taxes would add to the deficit.
Pirie told council that would result in roughly an additional $23,000 to the deficit.
Warnock said the municipality has realized surpluses in the past and that “sometimes you have to do something for the people.” The councillor also expressed optimism about the potential for economic growth and said the roughly $23,000 risk was worthwhile to give taxpayers a little back.
Isaac was more favourable to reducing the tax increase even more but nevertheless supported Warnock’s motion. He added that he was interested in hearing any opposition for a proper discussion before making a final decision.
Preston said the carbon tax has affected not only residents and businesses but the municipality as well, and that council must be mindful of how the budget’s bottom line would be impacted by any reduction to the tax increase.
Dalke understood where Warnock and Isaac were coming from, but remained concerned about being able to ensure the municipality has enough savings to sustain a growing need for services.
“That $23,000 that we’re talking about would go a long way to support” community organizations that struggle to secure grant funding, such as the Sundre West Country Centre, which had earlier that meeting presented a case requesting several thousand dollars in funding, he said.
Giving back roughly an average of $100 a year per household — or less than $10 a month — is a fairly minor contribution as compared with potentially making available thousands of dollars for struggling non-profit groups that are barely breaking even, he said.
“Those are our community members as well. And by taking this shortfall, are we going to put ourselves in the position where we have to cut something else?”
Funke agreed with Dalke and spoke against the motion in support of maintaining the three per cent tax hike previously approved by the former council.
In this case, reducing taxes for residents and businesses would only mean adding to the deficit “that we have to cover somehow,” she said.
“Then, we have more and more groups coming to ask us for funding.”
Pirie offered additional insight in response to concerns that not enough is being done to reduce the burden on taxpayers, and said council had frozen all user fees this year.
“You haven’t increased any of the fees for water, sewer, garbage, or gas this year to your residents — you already gave them a break,” he said.
Additionally, even with the three per cent increase, the municipality is facing the deficit he had discussed earlier. And any growth experienced this year will not be reflected until 2019’s budget, which would be a more suitable time to consider reducing taxes, he said.
Following further discussion, the deputy mayor called a vote on Warnock's motion, which was defeated with Warnock and Isaac in favour while Funke, Preston and Dalke were opposed.
Dalke then proceeded to table a motion to approve the three per cent increase.
Expressing her gratitude to her council colleagues, Funke said before calling the vote, “You have obviously all looked at this very closely and you have put a lot of thought into what we’re about to do for residents.”
Dalke's motion passed with support from Funke and Preston while Isaac and Warnock remained opposed.
