By Stephen Dafoe
Sturgeon County – County Council and Administration met Monday morning for the first of three days of budget discussion and debate that will ultimately result in a finalized 2012 budget that will determine the amount of taxes ratepayers pay next spring. In prefacing the budget discussions, Interim Chief Administrative Officer Peter Tarnawsky said the County has a revenue problem that will continue for the next few years as the County tries to enable and facilitate industrial and commercial growth in the County. Tarnawsky said there would be no tax revenue from the recently-announced Williams Energy project until 2013 and limited revenues from the Northwest refinery project for another three years.
The starting point for Monday’s discussion was a 7.42 per cent tax increase to support the County’s budgetary needs for next year. This figure is a reduction from the 13.9 per cent increase Council had been facing Nov. 2 to fund a $3,577,770 budgetary shortfall. Administration’s recommendations at that time included leaving two full time positions and four seasonal positions vacant, extracting some gravel from the County’s own pit, and reducing the number of staff conferences and training allowances. Those suggestions shaved $1,667,687 off the budgetary shortfall.
Budget breakdown
As of Monday morning Sturgeon County was looking at a $59.6 million budget in 2012 made up of $39.4 million in operating expenses and $20.2 million in capital expenditures.
The County’s capital budget is largely consumed by its roads, which account for 69 per cent of spending. The remainder is made up of 19 per cent for utilities, 10 per cent for vehicles and equipment and 2 per cent for capital reserves.
On the operating side of the ledger, salaries, wages and benefits for the County’s 174 full time equivalent positions consumes 45 per cent of the operating budget. Contracted services consume another 24 per cent. The remaining operating budget consists of 24 per cent for materials, good and services, 5 per cent for grants, and 2 per cent for interest on debt.
The County is looking to increase that debt in 2012. The County’s debt could increase to $17.5 million in 2012, an increase of $1.3 million over the current $16.2 million debt the county is carrying. Sturgeon County’s debt ceiling is $51.2 million and the majority of County debt is for road projects.
What it all means to ratepayers
Putting the County’s tax situation in perspective, Manager of Corporate Services Rick Wojtkiw said Monday morning the County is at the low end of the taxation spectrum when compared with similar and neighbouring municipalities.
Wojtkiw said the 7.42 per cent proposed increase is built from a 6.03 per cent increase to the County’s operating budget and a 1.39 per cent increase to the 2012 capital budget. Combined, the increase represents a real dollar increase of approximately $98 to the average County home owner’s taxes. That increase is made up of roughly $79.29 on the operating side and $18.27 on the capital side. Approximately 56 per cent of a rate payer’s tax bill is municipal taxes. The remainder is made up of educational taxes and a requisition from the Sturgeon Foundation, the latter of which oversees senior facilities in the region. As such, the property tax bill increase would be higher than the $98 Wojtkiw referenced; however, the additional figures are outside the County’s control.
Further reductions or increases could be coming
Council spent all of Monday afternoon discussing and debating a series of 2012 budget projects as well as a number of service enhancements that are not in the proposed budget but have been recommended for council’s consideration.
There are a total of 10 service enhancements on the block, items that would add $749,000 to the 2012 budget if all approved in full. Those proposed service enhancements include a number the County feels may be candidates for provincial Municipal Sustainability Initiative funding. They include $100,000 for culvert and ditch maintenance, $36,000 for a recreation funding model, $36,000 for a local road reconstruction strategy, $100,000 for drainage studies, and $75,000 for a road study and area structure plan for Highway 642 in connection with what Morinville is doing. A total of $125,000 is being recommended for a response to the preparatory needs of the Northwest Upgrader project. These funds are being recommended to come from Sturgeon County reserves. Other service enhancements up for discussion are $8,000 for rail crossing lighting for Opal Road, $138,600 to fill a vacant senior engineering position, $100,000 for an industrial land strategy, and $31,000 for trail maintenance in the County.
Further reductions mean service cuts
Tarnawsky, in responding to discussion of possibly cutting another 2.85 per cent from the tax increase, said any further reduction from the 7.42 per cent increase would have real impacts on the reduction of services; something Councillor Shaw said would be detrimental to the levels of services the County is currently giving. The councillor said it is important to realize that services cost money. “You hear it all the time; people want more services but don’t want to pay any more taxes,” she said. “That’s unreasonable.” Shaw said she felt administration had done an excellent job in reducing the increase from 13.9 per cent to 7.42 per cent already.
The discussions are scheduled to continue through Tuesday and Wednesday. Approval or disapproval of those projects and service enhancements will directly affect the budget’s bottom line, which will affect the tax increase budget is set to vote on Dec. 13 and which Sturgeon County residents will be required to pay in 2012.
