Column: Stop Morinville from comparing when it should be budgeting

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by Ed Cowley, freelancer

Just as an introduction — some may recognize my name and wonder what’s going on. It’s pretty simple — I retired from owning and operating community newspapers but have always enjoyed council reporting. It’s similar to a retired farmer who shows up in the field to help at harvest time — because he enjoys it.

Freelancing is just a news term for contracting, and like many industries those with experience return on a part-time or casual basis for a specific purpose. From my perspective, I will do what I have done for decades and the publisher here will do what publishers have done throughout history. It makes for an easy working relationship — if I don’t like how something is handled then I don’t continue. If the publisher doesn’t like what I am doing he doesn’t use it and tells me to stop sending material.

Media, even at the local level, play a key role in democracy not only by informing the public about its government but also by trying to hold public officials accountable. Both the media and municipal governance are in a poor state at this time in history. Reporters seem to want to be popular, as do politicians and bureaucrats so if municipal errors and inefficiencies are just swept into the storm drain everyone benefits. Everyone, that is, except residents. How can the public help set the direction of its government if residents don’t know about the problems, options, tough decisions and perceived errors that are going on in the chambers of municipal power?

I don’t deliberately step on toes, but toes have suffered when reporting or commenting on things some officials want washed quietly down the drain. I am not always right about an issue or anything, but if you are outraged enough to contact a council member and provide your comment on a situation (whether favourable or critical), then democracy has been strengthened. (That sounds a little too noble — reporting is fun if you enjoy the challenge and a battle of verbal barbs and witticisms between a reporter and a politician over usually petty details is just plain silliness … and humourous for readers).

However, I disdain reporters that spend time or space on themselves, so let’s move on to something important.

Stop Morinville from comparing when it should be budgeting

Morinville has imbedded in policy its penchant for comparison with a changing list of municipalities. Now it will have three lists of comparator municipalities during budget preparation — a time when the total focus should be on the town’s own operations.

Council endorsed a wide-ranging Budget Principles and Guidelines policy last month, which “defines comparison groups for budget purposes.”
The town will have a Regional Comparison Group “for issues related to competitiveness and equity in the region.”

A Direct Municipal Comparison Group will be used “for financial and operational analysis as well as comparison with communities statistically similar to Morinville.”

There will also be a Compensation Comparison Group which “provides information on the group of communities Morinville competes with for talent.”

The policy does not permanently fix the municipalities to be included in the Direct Municipal Comparison Group. During the previous council term, municipalities were added and subtracted from the list of comparators, apparently to show Morinville’s tax rate low for commercial property or at various points either competitive or high for residential.

The real issue is this. Why would any comparison chart be a factor in the town of Morinville creating a budget for the upcoming year’s operation? Is it Council’s intent to set its budget by looking over its shoulder at other towns? If the other municipalities have higher wages or taxes, is Council going to inflate those elements in Morinville’s budget?

Comparator lists are fine for scratch and sniff ‘what-if’ sessions, but cannot be the basis for any aspect of a budget process. The budget should be a revenue and expenditure plan created through careful attention to factors specifically related to Morinville. Figures from other municipalities are just a distraction during this working process.

Background information provided to Council on the Budget Guidelines policy states: “the policy provides accountability and transparency for the public with respect to Council’s budget strategies and objectives.”
Alas, the ‘accountability and transparency for the public’ phrase may tickle the grand intentions of Council members, but for residents accountability and transparency are as fleeting as the belief there will ever be a reduction in the tax rate.

The new policy contains other shortcomings. Consider section ‘4.6 Balanced Budget.’ It states: “Consolidated Operating Budgets must collect sufficient revenue to support budgeted expenses, as required in the MGA [Municipal Government Act]. Council and Administration will strive to achieve a balanced tax-supported budget without subsidization from utility-supported surpluses. However, should utility reserves be fully funded, as defined in the reserve policy, utility surpluses may be utilized to support tax-supported operations.”

It may sound reasonable, but the reality is that utility reserves will still not be fully funded when the youngest council member reaches 289 years of age. The disappearance of funds at year-end that resulted when a consolidated surplus occurred well above the budgeted amount saw $400,000 apparently whisked away to reduce the budgeted tax-supported operating deficit at the end of 2021 without even a council discussion or resolution. The huge operating surplus achieved by the town utilities also disappeared, likely into utility reserves, without a council resolution at the end of 2021. These year-end disappearing funds from the revenue and expenditure statements are the result of terrible policies which authorize the funnelling of excess funds into reserves. This bypasses the public transparency that would result from Council debate and resolution each year.

Here are a few statements that need to be in any Budget Principles policy to benefit the residents and taxpayers of Morinville:

1. All budget meetings will be public sessions. This allows for public transparency and should eliminate ‘retreats’ or other gatherings that bombard Council with information in closed session.

2. The tax revenue in each year’s initial budget will be based upon a 3% increase from the previous year. Note that this is a revenue increase, not a tax rate increase. This clause should not only limit any tax increase but also allow for a decrease if new developments increase taxable assessment by more than 3% in a single year. (Council has the power to go beyond the policy target figure when finalizing the budget, but the 3% figure changes the mindset by requiring departments to prioritize and limit budget requests).

3. There will be no tax incentives given to any property owner without the specific amount and merit being debated in public session. Any application for any tax incentive plan will clearly state that the property location will be public as part of the process. Some Council members have been musing about a progressive level of tax breaks for new developments — from paying only 33% of municipal taxes one year to 66% before reaching full contribution. Many residents and businesses have been paying the full municipal tax rate for decades without getting a discount from the town. Before putting an incentive into the budget, Council must publicly justify any plan because it will not only see existing taxpayers continue to pay their full tax burden but also contribute to offset the portion of tax forgiven by Council for a new development.
At the upcoming August council meeting it is essential to rescind the Budget Principles and Guidelines policy before it has a chance to do harm. Then Council needs to get to work on the 2023 budget, making all decisions based upon the needs and desires of Morinville citizens and businesses and the level of taxes they wish to pay.