Council approves 2022 operating budget with 5% increase

tax bylaw

Residents looking at a 5% tax increase for 2022

by Colin Smith

tax increaseThe Town of Morinville now has an operating budget for 2022, but council members aren’t very happy with the measure they approved at their meeting Tuesday.

In remarks made before unanimously voting in its favour, several council members declared their dislike for a budget that both increases taxes and involves another tax-supported operations financial deficit.

But there was also the sense among them that they had arrived at the best budget possible in the face of financial headwinds, including a $1 million government grant reduction and an estimated $291,000 liability for RCMP back pay costs due to a federal government settlement with its members.

Residential taxes will be going up 5%, which contrasts with a tax increase of 15.39% set out in the initial proposed 2022 operating budget brought to council by the administration in December.

At the same time full funding is being provided for the Morinville Leisure Centre and Morinville Community Library, avoiding service cuts for these popular facilities.

This year’s 5% per cent residential tax increase breaks down to a 3.5% operational tax increase and a capital tax rate increase of 1.5%.

“I don’t like this budget,” said Deputy Mayor Stephen Dafoe. “I also don’t like that we’ve had a million dollars cut from our MSI funding. Because that initially led to an 0.81% tax on assessment value, which was about a 10½% tax increase.

“I also don’t like that the federal government negotiated without us at the table on policing. It equates to about to 2 1/2% tax increase if we pay the $291,000.”

Dafoe noted that they were able to get the proposed 15.39% increase down to 5% at a time when inflation is high and the cost of items such as gas and utilities are rising.

“I don’t like that we are looking at 5% tax increase,” he said. “But given the odds against us, I don’t know how much more we could have done.”

The final 2002 operating budget is substantially the same as the proposal presented to Morinville residents at an information session last week.

One change is that the residential to non-residential tax split will remain at 1.1.1 rather than going to 1.1.15, a 9.7% increase, following the adoption of a last-minute budget amendment moved by Councillor Scott Richardson.

Richardson argued that in the current economic climate a tax increase could lead to higher prices for consumers and business closures.

The originally proposed 15.39% increase included a 5% operational tax rise plus a special capital tax that would have had the effect of a 10.39% increase.

It would also have seen the split between residential and non-residential rates rise to 1:1.2.

Richardson’s motion passed 4-3.

Taxes for this year on an average residential property, valued at $334,603, will increase by $10.58, per month, or $126.98 annually, to a total of $2,666.64.

The town’s 2002 consolidated budget indicates revenues of $24,262,708 and expenses of $23,694,141 for a surplus of $568,568, according to a summary presented by the administration to council

Operations that are supported by utility rates show a surplus of $2,392,746, based on revenues of $24,2621,708 and expenses of $23,694,141.

With revenues of $16, 564,341 and expenses of $18,388,520, the town’s tax-supported operations deficit would be $1,824,178.

That figure was calculated on the basis of a 1.1.15 residential-business tax split. Maintaining the 1.1.1 split results in a tax loss of $70,000, potentially increasing the tax-supported operating deficit, according to Financial Services Manager Travis Nosko.

However that is offset by cancellation of the MLC and MCCC service provision review, costed at $30,000, and a $10,000 drop in the budget request of the Morinville Community Library.

The approved operating budget incorporates unallocated funds from the town’s Municipal Sustainability Initiative grants, and savings garnered from a council-imposed hiring freeze, some program cuts, administrative efficiencies and a $15,000 reduction in council’s operating budget.

At Tuesday’s meeting Councilor Rebecca Balanko sought to amend the budget to cut the library’s 2022 operating funding to $493,276 from the requested $531,655.

The amendment was defeated 4-3, with Mayor Simon Boersma and Councillors Rebecca Balanko and Ray White in favour, and Deputy Mayor Stephen Dafoe and Councillors Jenn Anheliger, Scott Richards and Maurice St. Denis opposed.

Now that the 2022 operating budget has been approved the administration will bring forward the 2022 capital budget, three-year operating budget and five-year capital budget for council approval, as required by the Municipal Government Act.

Council and the administration anticipate beginning work on the 2023 budget soon.

White emphasized the importance of getting the process underway.

“Because this is not the end of our problems, this is the beginning,” he said. “We’ve got a lot of work ahead of us in the next couple of years. It takes a long time to change the culture and get us moving forward on a path of sustainability.”

In the administration budget presentation to council it is noted that the town has experienced a tax-supported deficit for two consecutive years and that continued deficits threaten the long-term viability of the municipality.

“A balanced tax-supported budget is key to ensuring the sustainability of operations in Morinville,” it states. “It is also a prerequisite to the ability of Council to restock tax-supported capital reserves – a vital source of revenue for capital projects, particularly given lower capital support from the Government of Alberta.

“Without sustained incremental tax increases over the next several years, or significant service level reductions, the Town will continue to experience deficits and drain the cash flow from the few funded reserves in place.”

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1 Comment

  1. I hope council remembers for 2023 budgeting that the starting point will be to cut back a one time payment of $291,000 for the RCMP back pay
    I also hope there is an analysis as to why, when there were ongoing wage negotiations, previous councils had not set aside a funding that could have taken care of much of this without requiring the 2.5% that is identified as part of this increase

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