Town council recently had a lengthy chat about whether to drop to zero its budgeted tax increase of about 1.9 per cent for 2016.
The discussion, held during council's Jan. 18 meeting, followed a report by administrative staff updating council on the 2015-16 budget, which was passed in December of 2014.
Coun. Myron Thompson said he had anticipated the opposite of the report, which showed a modest surplus of almost $60,000 in 2015.
"I was anticipating a deficit for some expenditures that we certainly didn't budget for that took place, so I'm pleasantly surprised," the councillor said, praising the efforts of staff.
"They worked pretty hard at obtaining funds that they didn't anticipate we could get through certain grants and hard work of individuals. We owe some kudos to our department heads and our managers of this town, because I blame them for a surplus as much as I blame them for a deficit."
However, the report also outlined some shortfalls in 2016.
The economic downturn is having a major impact on consumers and residents who live in Sundre, and people are saying they'll need to change how they do things, said Thompson.
"I, for one, as a councillor am prepared to do what I can for the benefit of those who I work for, called the taxpayers of Sundre. Right off the top of my head, I'm thinking, folks, the way things are headed, this is not a year to raise taxes ó this is a year to look at zero increase in taxes."
Raising taxes during a time of hardship makes no sense, he said.
"To me, it makes sense to try and avoid it as much as possible. In future debates, I will be supporting zero increase. It may be proven to me that it just can't be possible, but at the same time I think we need to work towards that end."
Adjusting the tax rate set by council in the 2015-16 budget is certainly a discussion council can have, said Victor Pirie, director of finance and administration.
But in creating a two-year budget, a number of plans were laid out for 2015 and 2016, he said.
"If we say now that we're not looking at increases in the mill rate to provide the funds for those, that means we really do have to take a look at our overall budget, and go through and basically redevelop a brand new budget."
The idea behind a two-year budget cycle is to provide stability to allow administration to plan properly. It also addresses council's strategic priorities and provides guidance to the community in terms of what can be expected over the next two years in the way of tax rates, he said.
"There are some difficulties I foresee that would arise in not adhering to the 2016 plan."
Coun. Thompson said he has a family budget, and that in light of the downturn would have to make some adjustments this year. The situation is the same for businesses, he added.
"I don't see why it should be any different for us."
There was no way to anticipate the downturn, and revisiting the budget would have nothing to do with the town's planned capital or operational expenses, he said.
"We're going to have to (adjust the budget), whether we like it or not."
Coun. Jodi Orr went on to read a prepared statement from Mayor Terry Leslie, who sent his regrets for being unable to attend the meeting.
"This week saw the Canadian dollar hit a 13 year low, and the price of oil is forecast to continue to drop. The global economic circumstances are not something that we have any control over," she read.
"In this community, the fallout from world events has been evident with job losses, struggling businesses and people pulling back on spending habits as the cost of groceries rises," she continued.
"We don't control these factors either ó what we can control is taxes, and I ask council, administration and staff to hold the line on taxes."
Economic growth must continue, and not increasing taxes would be welcome news to businesses, seniors, families and anyone who pays taxes. The mayor went on to challenge administration and staff to find two per cent efficiencies in the 2016 budget to find a way to get a zero per cent increase in taxes this year rather than the 1.9 per cent increase outlined in the budget.
Coun. Chris Vardas thanked Orr for reading the mayor's statement to council, and said he wasn't keen to raise taxes any more than anyone else.
"But I'm going to caution us as a council to be careful what we wish for and what we say. Because whenever we hold back on something today, we pay for it tomorrow, and I've mentioned that many times on other things."
Going in to revisit a multi-year budget defeats the purpose of having one to begin with, he said.
As a business owner, Vardas said he doesn't want to see a tax increase either.
"But at the end of the day, there will be an increase and there has to be an increase to sustain ourselves."
The town provides services that it has to somehow pay for, and its costs are also going up, he said.
"We're all on this ride together."
Taxes help build up reserves, and without those reserves, the municipality might find itself in a situation it won't like, he said.
"Residents might enjoy it now," he said about a tax break. "But when we turn around down the road and say, ëSorry, now we have to give you a five per cent increase,' how do you think they'd like that?"
However, the debate on taxes will be for another day, he said, reminding council to be careful on what decision it makes when the time comes.
"This is the time to make proper decisions, not bad decisions. When we make bad decisions, the residents pay for it."
Administration inquired whether council wanted to put a temporary hold on operations until council had a chance to revisit the budget.
However, council agreed holding operations was not the way to go, and directed administration to proceed with "business as usual."
"Every time you put a freeze, there's always a cost down the road," said Vardas.
The town might have a surplus coming out of 2015, but with the issues raised by administration regarding shortfalls in 2106, it could be in a deficit position next year, he said, again cautioning against reducing the approved tax increase to zero per cent.
"There's always a price to pay."
