Council delved into some lengthy debate last week about the process behind the budget and uncertainty regarding tax increases.
For the past several months, administration has been meeting with and working alongside elected officials to plot out the municipality’s first-ever, four-year operational budget and 10-year capital plan.
There have been numerous meetings and workshops, which all culminated with the Dec. 11 open house. Although lightly attended by about 17 people, the opportunity still brought out some good conversations and information, said Chris Albert, director of corporate services during the Dec. 17 meeting.
“There were only two changes that I have made to the draft versions of the budget between the public consultation phase and tonight,” said Albert.
He added a little more than $1,400 for the Red Deer River Watershed Alliance that was not previously included in the budget. The other change was the removal of the firefighters’ honorarium increase, he said.
“We took that out of the fire department budget and we allocated it down to put it into the general stabilization fund for right now,” he said
“So the funds are earmarked, they’re in the budget, but they’re not allocated to the fire department so council then has an opportunity to adopt the budget and make a decision on that honorarium at a later time.”
Albert brought up another consideration for council’s information and to encourage discussion.
“There is a distinction between cost increases and tax rate increases,” he said, adding the budget as presented outlined anticipated cost increases.
“This is what the departments have figured that they need in order to operate. The next discussion will happen later when we determine how to cover those costs.”
Highlighting a substantial increase forecasted in 2021, Albert said the cost splitting and sources of funding for required upgrades at the wastewater treatment facility are uncertain.
“That is one of the items that could change. Our revenues can change substantially just based on a cost-split,” he said.
“This is just showing cost increases rather than tax rate increases. The other thing that can affect tax rates is just changes in assessments, which we don’t know until April. So as those numbers change, they will change that tax rate increase, but they won’t change the cost increase.”
Additionally, one of the main goals behind the new budget is to “create an atmosphere of consistency and predictability,” he said.
Cost increases are forecast to go up 2.77 per cent in 2019, 5.03 per cent in 2020, 12.34 per cent in 2021, and 2.92 per cent in 2022.
Administration sought approval to adopt in their entirety both the 10-year capital plan and the four-year operational budget, which all municipalities will be required to operate under by 2019 as per the Municipal Government Act’s new legislation.
However, Albert also outlined the options to either pass an interim budget to be revisited this spring, or to adopt the 2019 operational budget as presented while accepting for information the following three years of the financial planning document.
“The interim budget is not administration’s recommendation,” he said.
Chief administrative officer Linda Nelson reminded council that during spring and fall sessions it would still have the opportunity to revise the budget if needed depending on, for example, new information or circumstances.
“You always have that opportunity…to revisit and make changes,” said Nelson.
Coun. Cheri Funke moved to adopt the 2019 portion of the four-year operational budget as well as the 10-year capital plan and to receive the subsequent three years of the operational budget for information. She expressed confidence in administration.
“We have professional people that are doing their jobs…I think we’re making a bigger deal out of this than it needs to be,” she said at one point during the debate.
Funke also cautioned her colleagues that passing an interim budget means restricting administration and town departments from fully doing their jobs for the next three months.
“They are not allowed to do any large operating or capital expenditures until we pass a full budget. That has the possibility to put projects behind,” she said.
However, there were reservations among some members of council, who were not enthusiastic about passing a budget without knowing more specifically what kind of tax increase residents would be facing.
“When I hear administration say these fees are cost increases, but they’re not tax increases, I can’t vote representing the residents when I can say, ‘We passed the budget, but we don’t know how much it’s going to cost you yet,'" said Coun. Paul Isaac, who was in favour of proceeding with an interim budget for now.
Coun. Richard Warnock as well as Mayor Terry Leslie also expressed a reluctance to support Funke’s motion.
The mayor said some questions remained unanswered, such as uncertainty surrounding year-end figures, spring assessments as well as potential sources of revenue including Municipal Sustainability Initiative funding, and urged his colleagues to consider passing an interim budget.
Leslie also asked whether any major projects would be held up, to which Nelson said there are two.
“My apologies, I’ve already started on Phase 2 (of the Main Avenue project) due to the complexities of TransCanada’s crossing,” said operations manager Jim Hall.
Nelson said administration could bring back separate requests seeking approval for such projects should council choose to adopt an interim budget.
Isaac asked Funke if she felt comfortable accepting the budget without yet knowing what the tax increase will be.
“Our administration has taken the time to figure it out,” said Funke, who said there should not be any surprises provided assessments “stay the line.”
Albert added that while the assessor still has plenty of work to do, preliminary numbers indicate an increase of assessments between one and two per cent on residential properties and more or less staying flat on the commercial side.
Following further discussion, the mayor eventually called a vote on the motion, which was defeated with Coun. Todd Dalke and Funke in favour, and the mayor, Isaac, Warnock, as well as councillors Rob Wolfe and Charlene Preston opposed.
Warnock then moved to adopt the interim budget, to be finalized in the spring, as per one of the options proposed by administration, which carried with Funke opposed.
Following a recess, Dalke reminded council the restrictions imposed by the decision to approve the interim budget means no longer being able to hire a new roads operator to match the agreed upon level of service provision.
Funke suggested rescinding the motion to further discuss her previously defeated motion that would not hold up any projects or plans, which Nelson confirmed council could do by a vote.
Preston’s motion seeking consent from council to amend the motion carried with Isaac opposed.
Funke then moved to remove the restrictions from the motion to adopt the interim budget so previously approved plans could proceed as scheduled.
That motion carried with Isaac and Warnock opposed.
