By Stephen Dafoe
Morinville – The average Morinville homeowner could be looking at a $73.55 increase to the municipal portion of their spring tax bills now that Morinville Town Council has given third reading to the 2012 Operating and Capital Projects budget. Third reading of the $24.2 million budget passed with a 5-2 vote Dec. 13. Councillors Gordon Boddez and Ben Van de Walle opposed third reading of the budget.
The 2012 budget was introduced and given first reading Nov. 8, went before the public at two open houses Nov. 14 and 16, then returned to Council for trimming based on public input and councillors’ review Nov. 22.
The Town’s first draft of the budget showed a post-debenture payment deficit of a $485,645. Adding $602,500 in operation projects brought the total deficit to $1,088,145. That negative number was proposed to be funded from operating reserves in the amount of $1,037,413, leaving an excess deficiency for 2012 of $50,732.
Nov. 22’s whittling away at the budget reduced spending by approximately $500,000 by eliminating, reducing or deferring a number of proposed projects and initiatives. That budget was further reduced Dec. 13 after Administration responded to a request from Mayor Lloyd Bertschi to cut their operating budget by an additional $150,000.
Administration budget trimmed
Morinville’s Chief Financial Officer delivered a report to Council Dec. 13 on just how the mayor’s request would be accomplished – $125,000 would come from cutting expenses, the remaining $25,000 from an increase in revenue. Administration will save $10,000 by granting the museum the $85,000 they requested instead of the $95,000 originally budgeted. An additional $115,000 will be trimmed from the $1.4 million the town has budgeted for contracted services in 2012. Isbister said an additional $25,000 in revenues will be realized in 2012 from fines. The increase is projected due to the increase in Peace Officer staffing to a second full time member.
The administrative reductions were unanimously accepted by councillors as an amendment to the budget and will reduce the amount of operational reserves required to balance the 2012 budget.
Third reading introduced minor revisions
Councillor Nicole Boutestein once again advocated for a $50,000 one-time grant to assist the Morinville Public Library with the purchase of shelving for the expanded library, set to open in spring. Boutestein had put the motion forward at second reading; however, she was one vote short of a majority. A second attempt resulted in Councillor Paul Krauskopf and Mayor Lloyd Bertschi lending their support to the vote. Councillors David Pattison and Gordon Boddez opposed the motion.
Prior to that vote, Boutestein informed councillors the cost of shelving to replace old and worn out shelves was $159,000. An additional $20,000 was required for an entrance security system / anti-theft device. Boutestein explained the library was using some of its reserves to fund shelving and that the library board was actively engaged in raising funds for the renovations.
Councillor Lisa Holmes also advocated increasing funding of the annual St. Jean Baptiste Festival to $30,000 in 2012. In November, Festival Chair Paul Smith approached Council in search of $40,000, seed money to launch what he saw as a self-sustaining festival. At that time, Smith pointed out committee members had to put money out of pocket to act as security for some events, including the children’s midway.
“I’m not in favour of increasing the operating funds for this festival on an ongoing basis,” Holmes said in presenting the motion, adding her idea was so participants didn’t have to finance aspects of festival on their own credit.
It was a concept the mayor agreed with. “I think it’s preposterous that these guys should be spending $10,000 to guarantee it’s not going to rain,” Bertschi said in reference to personal guarantees needed to secure the midway each year, adding he drew the line at the town underwriting festival concerts. “If a promoter wants to promote a rock concert, we shouldn’t be underwriting that.”
A subsequent motion by Councillor Ben Van de Walle to cut the remaining $75,000 from a technology plan and development implementation program he was championing was defeated by a 6-1 vote, van de Walle casting the only vote in favour of the cut.
Council generally comfortable with increase
Council was largely supportive of the amended 2012 budget and the possibility it could mean a 4 per cent increase to the municipal portion of Morinville tax bills in the spring. That increase will not be solidified until Council sets the mil rate in the spring. Final numbers on real assessment values will determine the actual increase needed to support the 2012 budget passed Dec. 13.
Councillor Paul Krauskopf said he did a comparison of the value of his home and the value of a similar home in Edmonton and found the Edmonton taxes were higher when comparing quality of home with quality of home. “I understand we don’t have a swimming pool and some of the amenities the city has, but I think we do pretty good for a small community,” Krauskopf said, noting he was comfortable with a 4 per cent tax increase.”
Councillors David Pattison and Lisa Holmes also expressed their view that a 4 per cent increase was reasonable, although Holmes said she wasn’t at first. “I had a really hard time with the 4 per cent at first,” she said. “We’re not saving for a rainy day right now. If we were to lower it, we’d be borrowing more money.”
But a proposed 4 per cent tax increase did not meet with all of council’s favour. Councillor Gordon Boddez, who offered no suggestions of what should be trimmed from the budget during second or third reading, expressed his view that Morinville’s taxes were simply too high.
“I may be in the minority, but I don’t agree with the 4 per cent increase, and I’d be happy to talk about that,” Boddez said, adding the 2012 budget is taking significant reserves to cover deficits. “We’re taking our reserves and applying it to our deficit to cover it.”
The councillor said when he looks at actual expenditures; he sees salary and wages increasing along with contracted services at an alarming pace. “I don’t think we’re really showing restraint,” Boddez said. “Our inflation rate is 2 per cent. I don’t think we as a governance group are doing that great a job [by asking for 4 per cent.]”
Boddez said he really thought the mayor’s request to have administration cut $150,000 from their budget would result in a tax decrease for residents in the neighbourhood of 1.25 per cent. “That’s what I would support in this budget,” Boddez said. “I would support a decrease from 4 per cent to 2.75 per cent for our residents.”
Asked by Morinvillenews.com why he offered no cuts or reduction requests during the budget process, the councillor said it was not how he liked to do things. Pressed to support his view, he said he felt Council should present an acceptable tax increase amount to administration and they would then decide for residents what that level of taxes could support. Council would then agree or disagree with those items.
In an interview with MorinvilleNews.com Dec. 14 (the day after the budget was passed) Mayor Lloyd Bertschi said that tax increase recommendation was in fact set by councillors in June when they began an elongated and more detailed 2012 budget process. Council had then agreed on 4 per cent.
In defence of reserve spending
The mayor went on to defend the use of reserves in the 2012 budget, something Councillor Boddez was particularly critical of the previous night. Bertschi explained that offsite levies are charged on every new home built in town, monies that are earmarked for roads, water and sewer and future recreational needs.
“The comment’s been made that we’re really draining a lot of our reserves,” the mayor said. “You don’t have reserves just for the sake of having money on the side. You identify the capital needs and projects over an extended period of time, and then put money away towards those projects. It’s coming to bear. You use those targeted reserves, not just money in the bank – a slush fund. You establish reserves for a reason and then fund them properly.”
Bertschi said a review of reserves, which have upper and lower limits, is in order, particularly given the East Boundary Road project and the Cardiff overpass, the latter an infrastructure project the mayor sees as a game changer in the region.
“Now all of a sudden Cardiff Road comes into play,” he said, noting the situation will exist for a time where there is a two-lane, road without shoulders right on the doorstep of a major overpass. “The bottleneck that comes off of that is just going to be unbelievable. So we’re now going to have to look at when do we schedule the widening of that piece.”
Bertschi explained the project is something both Morinville and Sturgeon County will need to address as it is likely once the overpass is finished, developers who own land around it will be looking to develop their lands. That scenario is something Bertschi said is best served by having a transportation plan figured out well ahead of time. Such an initiative would likely be funded from reserves, which are established for just such a purpose.