Ask A Candidate Week 3 – Finances and Deficits

compiled by Colin Smith

To help provide information on where candidates for Council stand on matters of interest to residents, Morinville Online will be asking them a question each week for the duration of the election campaign and publishing their responses. The responses may have been edited for length and clarity.

Today’s Question: In October 2019 Town Council unanimously approved a 25-year Long Term Financial Plan that called for annual property tax increases of at least 3%, with the aim of turning Morinville’s persistent tax-supported operating budget deficits into surpluses. Do you think this is the path Morinville should follow? If not, what specific measures should Council take to deal with this financial concern?

MAYORAL CANDIDATES

Simon Boersma: According to this year’s amended operating budget, the increase in salaries and wages was $2.2 million and the decline in net taxation revenue was $1.1 million over the last three years. Contracted and general services have only changed by $200,000. Why have our in-house costs changed drastically? Many residents are on fixed incomes; we cannot see a departure of these residents by a consistent expenditure of an extra 3% each year. Council needs to give Economic Development the tools to sell the community to up our source of income. It will also have to revise the constant increase of wages and salaries to operate our community.

Shane Ladouceur:  I don’t agree with 3% yearly tax increases for 25 years. There should never be any deficit spending. Surprises happen that are out of people’s control, but rainy day funds are meant for those situations. Five to ten-year plans are more feasible. Calling for tax increases for 25 years is because of not budgeting accordingly and playing around with other people’s money. The deficit didn’t have to happen, don’t need to repaint and refurbish a tennis court yet. Or add $15,000 per year pay increases for mayor then have two years of deficits. Should be finding ways to lower the tax burden not ways to increase it.

Barry Turner: The Long Term Financial Plan outlines the options of increasing revenue, reducing costs and increasing user fees. Council has used all three of these methods to mitigate increasing taxes and should continue to do so.  Recently, the Morinville Leisure Centre opened and increased in service levels. The result is a tax-supported budget deficit that needs resolution before it results in drastic service level cuts community-wide. My commitment is to fight to preserve our quality of life in Morinville and use a balanced approach, with sustainable increases mixed with cost reductions from internal efficiencies and regional collaboration through cost and revenue sharing.

COUNCIL CANDIDATES

Jenn Anheliger: Just increasing taxes will not resolve our deficit issue.  We need to address our insufficient revenue and take an honest look at spending to find cost-saving efficiencies, including reviewing our budgeting principles.  Our reliance on Municipal taxes will compound as our other major revenue source (provincial MSI funding) is rolled back.  Council needs to prioritize advocacy around provincial government funding.  We should also seek other sources of revenue. Diversification of revenue streams should become a strategic priority.  Morinville needs to focus on long-term planning, better understand the cost of delivery and ensure thoughtful asset management to better plan for capital costs.

Rebecca Balanko: Pre-pandemic, it may have been a possibility. I don’t believe this is achievable now. I feel we need to do a better and consistent job of living within our means. I don’t know of anyone consistently receiving a 3% cost of living increase. It feels unjust pushing this onto residents already stretched to capacity. Increases will happen, but tying the hands of future councils with a “plan” feels irresponsible.

Nicole Boutestein: Property taxes are the main source of the Town’s revenue stream.  Budgeting tries to reflect the rising cost of goods and services, but cannot always account for unexpected expenses. Some would have you believe that there is no need for increased property tax rates.  This sounds appealing, but without a regular increase, our expenditures will continue to outweigh revenue.  Long term, this is simply unsustainable. For Morinville to continue to operate and offer the high level of services and programming our residents have come to expect and deserve, we need to stay the course and follow through with this financial plan.

Stephen Dafoe: Approving a financial model as a starting point is not blind acceptance, as the report identified areas that need addressing. First, as I argued during the budget, our tax-supported departments operate at a deficit and are supported by utility department revenues. You can call it a consolidated budget, but it is robbing Peter to pay Paul. Second is the level of debt required to do all proposed capital projects. These will need to be weighed, debated and dialled back. The next Council must authorize a service level review to get accurate costs to assist efficiencies in spending.

Wayne Gatza: No, I don’t think Morinville should be going ahead with an annual property tax increase of 3% yearly for the next 25 years. I believe as a council we will need to look at the finances to determine where and how we can save on costs while delivering a high level of service to our residents. We will need to look at ways to increase our revenues without using tax increases as the manner we do it. I think we need to be looking at collaborations with our regional partners on service agreements that can reduce our operational costs.

Alan John Otway: I do not support a financial plan that calls for consistent increases. I think the first priority is to manage funds better, in terms of prioritization of spending. For example, we are spending on a new splash park without increasing our ability to provide for recreation or water to residents. The argument that the park is built with grant money does not hold when there is no plan for ongoing maintenance costs in the budget (without increasing taxes). Second is the prioritization of growth, business and residential. If anything, at least freeze mil rates, with analysis of reduction.

Scott Richardson: No, I do not think it’s sustainable to increase property taxes 3% a year when we are already one of the highest-taxed municipalities in the capital region, with the least amount of amenities. The town needs to rethink their service delivery and find organizational efficiencies. The town also needs to do a better job maintaining town-owned assets, collaborating with our regional neighbours and stretching our tax dollars. I also think the town needs to do a better job tendering projects. It seems like we are paying way to much for the projects we are completing.

Maurice St. Denis: I believe it is always prudent for municipalities to have long-range guiding principles to assist in decision-making. It’s my understanding that we spent a lot of money for this strategic management toolkit based on pre-pandemic modelling, so it would be prudent for our next council to revisit and adjust the recommendations. Finding new revenue streams and operational efficiencies should be at the forefront of any strategy to achieve a more balanced budget.

Erin Vollick: No, 25 years is a long time to stay committed to a plan — especially when it comes to money!  That’s the kind of time you invest in your mortgage, retirement savings, etc., not town finances, as there are too many unknown variables that could come up in such a great length of time.  Someone wisely told me recently that for the first year or so of the new council, realistically we should look at all our wants versus needs — and concentrate on just the needs at first, while wants should be left until all needs have been met.

Ray White: I know that there are obligations under the Municipal Government Act to provide detailed future planning and as such Council put together the long-term plan. Each year a budget is prepared and voted on by council that may be substantially different than what is in the 25-year plan. Whoever is elected and forms the new Council will be tasked with this responsibility. They will also be charged with reviewing the 25-year Long Term Financial Plan and making the necessary changes.

Sarah Hall: No response was provided by our deadline for this article.