Council approves Long Range Financial Plan

by Colin Smith

Morinville Town Council has approved a Long Range Financial Plan projecting 25 years into the future, along with directing the Town Administration to implement a Long Range Financial Model aimed at keeping the plan updated and on track.

Annual residential mill rate increases of three per cent would result in growing operating budget surpluses for the Town, amounting to $12,228,706 in 2040, according to the model developed by the consulting firm MNP LLP.

The model also foresees Morinville going over its mandated debt limit by $3,761,473 in 2024-25 and by $13,690,940 starting in 2030 as a result of capital project spending.

Council approved the Long Range Financial Plan project in December 2018 and its development was awarded to MNP LLP in April. Council received the Long Range Financial Model and summary analysis at its September 17 Committee of the Whole Meeting.

In presenting the plan and model to council for its approval, Corporate and Financial Services Director Shawna Jason emphasized that the model will be regularly updated, and that there will be new numbers, for example as new funding sources appear.

The objective of the plan is to establish a firm basis for all of Morinville’s municipal operations, including a financial model for development of current and future phases of the Leisure Centre.

It is expected to promote alignment between strategic priorities and municipal plans to address future challenges and enable long-term financial sustainability.

The plan report points to several factors that civic leaders will need to deal with during its course.

One is that to maintain debt below mandated levels might necessitate deferring capital expenditures. The appropriateness of the Town’s current debt limit might be reviewed in view of meeting future capital requirements. The model suggests that the Town could borrow up to the Alberta Capital Finance Authority limit without the principal and interest payments causing financial strain.

Another concern expressed in the plan is that tax-supported departments currently operate at a deficit and are being supported by utility departments’ revenues. The Town is also considered to be highly dependent on property tax as a revenue source, making it vulnerable to external factors such as changes in assessments, population size and competitive factors.

“The work done has set the stage to allow us to really set out the chalk-line as it looks right now and give council the tools to look forward and see how changes made today that long-term,” said Mayor Barry Turner. “I think that will be an invaluable tool moving forward and I look forward to its implementation.”

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