Local Journalism Initiative
Report outlines budget schedule and upcoming challenges
The Preliminary Budget Discussion Report confirmed administration will be bringing forth a 2021 budget including no greater than a four per cent tax rate increase for council’s initial look at next year’s budget.
The report that was brought to council during the standing committee meeting on Sept. 8 also outlined the budget schedule and identified challenges and opportunities for budget 2021.
Carla Fox, director of corporate services, stressed the importance of strategic planning and public engagement to ensure council’s priorities are clear as they head into a difficult year like 2021.
Coun. Ryan Maguhn expressed that starting at a four per cent tax rate increase provides a good comfortable starting point for council to work with and figure out the details of the budget from there.
Fox added that if the Town were to deliver the current service levels, the Town starts off with $490,000 short due to the additional taxation that was brought in last year.
In addition to that, there is a union wage increase, inflationary considerations, and a new normal with COVID-19 pandemic costs.
“When you think about a starting point for us right now, think about those financial considerations that need to be taken into account right off the start. That’s without adding or changing any of our services and without making any reductions,” Fox said.
All those increases need to then be brought into alignment with the four per cent increase, she explained.
An estimated $570,000 will need to be reduced from the 2021 operational budget to achieve the four per cent tax rate increase target, according to the report.
Based on the status of the 2020-22 budget approved by Council, which required an 8.38 per cent tax rate increase in 2021, administration will bring forward Service Level and Area reductions for Council’s consideration.
“This is where we have to go to administration and say, look, where are the realities, but also what do our service levels look like potentially if this is our goal? Where are our potential savings and efficiencies? We have to dig deep and we have to be realistic in understanding this can affect everything from personnel to service levels,” said Maguhn.
Fox reminded council that water utility revenues and the subsidization of general taxation by the profit made in water revenues need to be taken into consideration this year.
There will be public engagement in the form of a town hall, possibly similar to last year at the Performing Arts Theatre of Hinton (PATH).
Coun. Albert Ostashek and Maguhn both stated that only hosting a virtual town hall would eliminate certain demographics from participating.
Mayor Marcel Michaels noted that nothing is limiting a Town Hall where people can come face to face.
“Unless there’s an influx of people coming to us regarding the budget, we only get about a dozen people per year, if you look at the last six years,” Michaels said.
Administration plans to bring back various options to council for public engagement.
Administration is in the process of preparing a draft three-year operating and capital budget, stated the report.
The final draft, which will be brought to Council in late October or early November will include inflation impacts, union negotiated wage increases, and any required direction or new initiatives directed by Council through Strategic Planning.
Presentations will be made to Council to provide Council with all relevant organizational information. Council and Senior Leadership will participate in a Level of Service training session.
A Strategic Planning Session has also been included in the schedule at the end of September.
Once a draft budget is developed, all operational and capital plans are reviewed and approved by Council through the budget adoption process. This process follows a series of public meetings with Council and Administration, which provides Council with an opportunity to request clarification, make changes, and request additional information as required.
Budget deliberations take place in September through December, to approve an Operating and Capital budget for the following year.
The operating budget is made up of the total cost of delivering each service as well as all sources of funding revenues required to pay for those services.
The total of all the operating expenditures required to offer these Services is what determines the amount of taxation required.
For 2021, a one per cent increase equates to approximately $130,000.
On March 17, 2020 the approved 2020 Operating Budget was $29,137,747, and the approved tax rate decrease for 2020 was 3.2 per cent.
At the March 17, 2020 Regular Council Meeting, Council approved an amended Capital Budget of $10,130,302 and at the July 14, 2020 Regular Meeting of Council, the postponement of a number of capital projects due to the COVID pandemic was approved.