By Stephen Dafoe
Morinville – The Town of Morinville’s 2011 operational and capital budget took some interesting twists and turns on the road to third reading Tuesday night but ultimately passed third reading with the unanimous vote of the six council members present.
After first reading was defeated Dec. 7, an amended version of the budget passed first and second reading Dec. 14 with the provision that the hiring of several new administrative positions would not go forward until additional information was presented to council. The requested information largely dealt with how the annualized salaries (estimated to be $959,673 in 2012) would affect future budgets when debenture payments for the Community Cultural Centre and Civic Plaza renovations were factored into the equation.
Morinville passed a borrowing bylaw in the summer of 2009 that permits the Town to borrow up to $3 million to finish paying for the cultural centre when it is completed in the spring of 2012. Additionally, documents presented to councillors during Tuesday night’s meeting included payment information for a possible $2 million debenture to renovate the 40-year old Civic Plaza, a project that had been removed from the budget during budget discussions but was put back into the picture Tuesday evening.
The debenture for the Community Cultural Centre would be spread over a five-year period, the Civic Plaza debenture, should it proceed in 2011, would be spread over 20 years. Interest on the two debentures would be in the three per cent range and the cost to the Town each year would be just under $700,000 in principal and interest for the two new debentures. The first payment would not come into effect until 2012. Morinville currently has two outstanding debentures in play – one for roads and one for the arena. The total cost of debenture payments in 2012 is estimated to be $709,378 for current and new debentures.
Although administration’s figures indicate the Town is looking at an operational surplus of $106,395 in 2011, the inclusion of $1.7 million for next year’s capital projects puts the Town in a $1.6 million deficit situation in 2011. That deficit will be funded from unrestricted reserves in the amount of $1,373,214. The remaining $293,591 will be covered from a $500,000 operational reserve fund, showing a balanced budget in 2011.
Council was presented with three options for eliminating the $293,591 deficit. The first called for reducing expenditures by deferring the hiring of an economic development officer and implementing an economic development plan, eliminating the hiring of a planning and development intern, eliminating a $100,000 contingency fund for the Town’s centennial celebrations and reducing the amount of money spent on a Highway 642 study and money spent on public relations. The second option called for funding the deficit from operating reserves. Council‘s third option was to come up with a combination of the first two options.
Mayor Bertschi suggested a fourth option, funding the deficit from capital reserves’ however, a 3-3 vote on the motion defeated the suggestion.
The now approved 2011 budget calls for a 3.5 per cent increase to property taxes in 2011. Based on the average Morinville home being in the $300,000 range, council believes the impact on the average household will be an $80 tax increase in 2011.
Ed. Note: Further information on Morinville’s 2011 budget can be found in the following MorinvilleNews.com articles: