"You're darned if you do and you're darned if you don't."
These words, spoken by Coun. Chris Vardas during council's March 7 meeting, reflected in a nutshell his and several other members of council's position regarding whether to reduce the 2016 tax increase to zero per cent from an approved 1.9 per cent by digging into reserves.
"Either way you do it, it's going to bite us one way or another," he said.
However, the councillor stood firmly by his previous statements on the matter and again cautioned council from holding back the tax increase "this one time."
"Council, once upon a time, did it ëjust the one time' and we're still paying for that mistake from back then. So whatever we cut today, we pay for it tomorrow," he said, later adding "I don't know if we can afford to pay for it tomorrow."
When the price of oil and the economy eventually pick up, "it's going to come back tenfold, and the prices are going to triple."
Although businesses are certainly doing what they have to do to survive in the meantime, none are going to say they can't raise prices because of the economy, he said.
"That's something you can't control."
Administrative staff did a great job tightening the town's fiscal belt by almost $1 million to make up for a shortfall in 2016, he said.
Although he expressed sympathy for people on fixed incomes, such as pensioners, the councillor said everyone is on a budget, and "strongly" suggested council does not cut back taxes but instead keep them at a reasonable rate like the approved 1.9 per cent increase.
Mayor Terry Leslie had earlier opened the floor for discussion by providing some background on the matter.
"When we did a two-year budget (in 2014), we had forecast that in this second year, things would be much, much better, and they're not."
The result was a shortfall of a little more than $900,000 in expected revenue for 2016, he said.
"So we tasked the staff to go back and every single member in every department went back and you found $904,000."
Should council decide not to increase taxes by 1.9 per cent as originally anticipated, the mayor, who was in favour of taking such an approach, said the additional shortfall could be covered either by making more cuts in the budget or by transferring from reserves. There was no motion yet on the table, and the mayor asked councillors for their thoughts.
"I just want to clarify something that you said," Coun. Cheri Funke told the mayor.
"The staff didn't go and find money. The staff went and cut some very important things out of the budget to find that money."
Coun. Myron Thompson spoke next and said people on fixed incomes are faced with having to cut their savings ó or their reserves, so to speak ó to get by during the economic downturn.
"So to say that we should never touch them (the reserves) I think is wrong-headed."
The councillor said he understands the purpose of reserves and that everyone hopes the economy will kick back into gear, but said reducing the tax increase to zero per cent would be a one-time approach.
"The point I'm trying to make is when all is said and done, the savings is what gets affected by most families who have to make a budget, and some businesses."
Coun. Verna McFadden then asked Victor Pirie, director of finance and administration, what the cost of an average home in Sundre is, to which he answered somewhere between $275,000 and $300,000. In other words, the average homeowner would be looking at an increase of about $35 to $40 on his or her property taxes for the year, said Pirie.
Coun. Jodi Orr was curious to know how much the 1.9 per cent tax increase represented for the overall budget, and Pirie said it amounts to roughly $43,000.
"I see in your chart here that a house that is valued at $100,000, their monthly increase will be $1.24," she said.
But that's the low end of the assessment ó most would be above that price range. At the high end of the spectrum for a house assessed at $400,000, Pirie said the homeowner would be looking at an increase of about $60 a year, or $5 a month.
The mayor went on to maintain his position that council should hold its tax increase at zero per cent for 2016.
"Four years ago, there was maybe $600,000 that went into reserves and this past year $1 million went into reserves, and that is the goal, to be sure we have those reserves in place," he said.
"I don't think we're going to pay for things tomorrow on an item that costs $43,000 for this particular year. I take the position that if we have no increase in taxes this particular year, we take that because we can."
Some people in the community have said their taxes have gone up almost 10 per cent over the last three years, and council could respond to those concerns by holding the line on taxes this year, he said.
Coun. Paul Isaac said he agreed with both points of views.
"That's the dilemma I'm in," he said.
"I can live with both answers, I really can."
The councillor said he wasn't sure which approach was the "lesser of two evils."
"Before I was elected, there was a time council decided not to give an increase," he said.
But there were some huge expenditures in the two following years, and as a result the tax rate jumped up significantly, which is even harsher on taxpayers, he said.
Coun. Jodi Orr agreed with Isaac.
"Everyone's right," said Vardas.
But costs are going up for everything, he added.
"Where are we going to get these extra costs if we're cutting back? Every time we do something like that, we don't put enough money back into that purse, we're going to fall into deficit."
As a taxpayer and business owner, Vardas said he would love to hold the line on taxes but pointed out that "at the end of the day, it's not realistic."
Council has to not only ensure the town can maintain itself but also plan for the future, such as the impending need to upgrade the wastewater treatment facility, he said.
"We are investing in our community, and our community needs infrastructure, our community needs businesses coming in, our community needs tourism ó we just heard we spent $20,000 on advertising, do we cut that? That's what brings dollars to our community," he said, referring to an earlier agenda item on a report about the town's 2015 marketing campaign.
"You got to save your reserves and invest ó that's how you do it. You don't cut."
Funke told council she grew up as an oil and gas kid and married an oil and gas man.
"I know it goes up and down and it affects us all," she said.
"I budget four years in advance. I budget a four per cent increase on my property taxes every year, because there are two things in life that are guaranteed: death and taxes," she said.
"So when a 1.9 per cent increase comes, that's pretty good. It could have been worse and it can be worse. Who knows what's going to happen in the future, because nobody knew this was going to happen. "
Seeking a resolution to the discussion, the mayor put a motion on the floor to hold the line on taxes for this year and that the $43,000 shortfall be covered through surplus funds from 2015 that were put in reserves.
"Our taxes are not the lowest in comparable jurisdictions, so holding taxes sends a message as a positive economic strategy as well," he said.
Council defeated the motion, and administrative staff will at the next meeting on Monday, March 21 bring a request for decision that will list all the budget adjustments made to account for the shortfall.
