Local Journalism Initiative
The first draft budget for 2021 was presented to council including a four per cent tax increase resulting from several cost saving measures.
Compared to budget 2020, the draft budget for 2021 has an increase of just over half a million dollars.
The yearly cost for taxes owing on an average home assessed at $365,000, would be about $2057, which is actually only $17 higher than the rates of 2019, stated Carla Fox, corporate services director, during the first budget discussion with council on Nov. 20. She added that assessment values may face a deflationary decrease due to the current economic situation, however that would come back to council in early 2021.
“The budget that we’re going to discuss tonight and tomorrow includes substantial reductions that are not expected to result in impactful decreases and service levels. Over $400,000 has been reduced in salaries and wages, $250,000 to $300,000 of this will be permanent,” said CAO Emily Olsen on Nov. 20.
In total, the draft budget includes a 14.9 per cent increase in the operating budget to manage fixed increases and additional operating requirements, however operational reductions of 10.9 per cent or roughly $1.4M provides a tax increase of only four per cent.
Fixed increases like union wages, insurance rates, and revenue losses added up to just over $1M, while additional operating requirements such as contracting increases, development plan additions, and non‐union wage increases added up to just over $900,000.
The Preliminary Budget Discussion Report from September confirmed that administration would present a 2021 budget including a tax rate maximum of four per cent for council’s initial look.
Operational reductions include debt reductions, wage reductions, contract reductions, and a franchise fee increase.
“The pressures to try and bring the tax rate in line with what people are willing to pay is going to be an exercise that is going to need public engagement and further discussions with council on areas of service we are willing to let go,” Fox said.
She noted that administration has made real strides in working with council over the last year and recently in setting goals and directions to find further efficiencies.
Each department within the Town’s administration presented their operating budget to council on Nov. 20, as well as highlights of their capital budgets.
Through these presentations, Council learned that departments would continue to offer similar levels of service as a result of the proposed changes.
Each department faced common changes including inflation on goods and services, a seven per cent increase on insurance premiums, union negotiated wage increases, an additional CAO supported non-union wage increase consistent with the union increases, as well as COVID-19 pandemic costs.
“Over $1M was reduced from the budget in 2021 to offset COVID-19 impacts through lost revenue and increased expenses,” Olsen stated.
After the capital and operating budget presentations, council had a chance to make directions and discuss any changes for the next draft budget.
Olsen explained that Municipal Operating Support Transfer (MOST) provided the Town with roughly $1.5M of provincial funds meant to support communities in their COVID-19 response. This funding has not been attributed to anything within the budget and council can make decisions on how to utilize the funds.
“If council makes a motion to receive that money into grant funding for 2020, it will offset the lost revenue that we lost over [the pandemic] and it will put the town in a position where we have surplus dollars in our operating budget,” Fox explained.
Administration tracked funds and losses caused by the pandemic, and still anticipate further losses to be offset by this funding.
“There’s going to be approximately $700,000 left to be placed into a reserve of council’s choosing if that’s what they would like to do,” Fox said. Funds could be used for programs such as a tax penalty forgiveness program or emergency operations reserve for future pandemic impacts, she added.
A brief report on MOST funding will be presented at Dec. 8 standing committee meeting.
Within the operating budget, Council directed that the line item in the 2021, 2022, and 2023 budgets for the Hinton disc golf association reflect an additional $8,000 per year to be funded through taxation.
Coun. Dewly Nelson and Coun. Albert Ostashek both stated they were surprised by the financial ask of the disc golf association, but ultimately believe in the importance of supporting the disc golf association.
“I think the right decision is to ensure long term sustainability. Of that $8,000, $5,000 goes into reserves for future maintenance and enhancements,” Nelson said.
Ostashek added that if this item is important enough to council, then support should be made available through tax dollars and the input of the community rather than at the expense of another organization.
Council also directed the civic agencies’ operating plan be amended to reflect an increase of $30,800 for the Chamber of Commerce for 2021.
“I don’t ever want to be in a place where we don’t have tourism support at our visitor information centre, that is where people have come to expect to find resources that support our businesses and community and I wouldn’t want to be on the lookout for a new tenant for that building or a new tourism provider,” Nelson said.
Council then removed the third, currently vacant Community Peace Officer (CPO) position, from the 2021 budget.
Nelson stated that after speaking with citizens, he did not find a noticeable decrease in services and with the current state of finances and tax increase he was inclined not to add that third position.
As an advocate for the third position, Coun. Trevor Haas disagreed, stating that with only two officers there would be a dip in service levels as they face burnout or fall behind.
“Administration brought back a budget that included the third position and still maintained that [four per cent],” Haas said.
Protective services manager, Todd Martens, stated that it is challenging for two officers to cover all duties.
Council allotted $29,000 to the hanging basket program and maintenance thereof. This would be exclusively funded by new grant monies in the 2021 budget.
“Because it is exclusively funded by grants, if the grants are not met then the project will go to 2022,” stated Mayor Marcel Michaels.
Laura Howarth, director of community services, explained that the flowers are ordered in January each year, which may be impacted by when the budget is approved. While there are no current grants available right now, administration will do some deeper digging, she added.
While the budget showed that this program would return in 2022 and 2023, Coun. JoAnn Race believed it was important to keep this program running in 2020.
Olsen explained this program was cut in the draft budget 2021 to offset COVID-19 losses.
Council also directed that the $100,000 in transfers from reserves along with associated expenditures be removed from the council operating plan and that the $100,000 be maintained in reserves.
All the changes requested by council decreased the operating budget by roughly $40,000, which will be presented in the second draft budget for 2021.
Changes to the capital budget however, did not result in financial changes but several projects await reports before moving ahead.
Within the capital budget, Council requested that any Beaver Boardwalk upgrades come to a future standing committee meeting for discussion prior to beginning work.
Coun. Ryan Maguhn explained that this is an opportunity to transition from council lead discussion on the Beaver Boardwalk to getting the community involved. Ostashek felt this decision was premature and would duplicate work of the Beaver Boardwalk Committee.
The work on the boardwalk is funded by a grant that requires the funds to be spent by the end of 2021, and if a report is requested back to council for discussion, the report and work would be impacted, clarified Olsen.
Nelson agreed that public involvement is important when moving forward with this project.
The Maxwell Lake bridge rehabilitation will also come to council for a decision. Olsen stated that work permits through Alberta’s Environment and Parks (AEP) had not yet been submitted but the intention is to work with AEP regarding those.
Several requests for decisions were made by council regarding the decommissioning of Scout Hall, the greenhouse training building capital amounts for 2022 and 2023, the replaced 400 commercial bins over two years project, and the pool locker replacement.
Fox noted that the reports requested would not hold up the budget process.
“The current numbers in the budget will be kept how they are, those projects identified specifically by motion of council will not move forward without that report and further direction from council,” Fox said.
The draft budget also includes a four per cent utility rate increase for water services, wastewater services, and waste services, as discussed during an earlier meeting of council in November about the water treatment plant agreement with West Fraser.
Nelson stated during the meeting on Nov. 21, that the week leading up to budget discussion had been challenging with limited time to review the budget documents, and that council may bring up further directions in the coming weeks after conversations with the public and additional time to look through the budget.