Morinville Allocates part of 2023 surplus to lower 2024 property tax increase

Morinville residents’ and business owners’ 2024 taxes will increase by approximately 3.8% instead of the 4.4% and 5.25% originally planned during the first reading of the tax bylaw and 2024 budget deliberations.

by Colin Smith

Part of an unexpected $2.3 million financial surplus will be used to lower the 2024 property tax increase for Morinville residents and businesses.

Council decided to devote some of the surplus to reducing this year’s increase at its regular meeting on Tuesday, Apr. 23, when it passed the 2024 Property Tax Bylaw.

Property taxes will go up by 3.8%, rather than the 4.4% set out in the property tax bylaw when it was given first reading Mar. 26. 

That bylaw had already been amended to reduce the rate increase from the 5.5% anticipated in the 2024 Operating Budget. The rate cut was based on higher than anticipated municipal assessment values.

At the Tuesday meeting, Financial Manager Travis Nosko reported that the Town of Morinville had an unexpectedly strong financial year in 2023. 

Total revenues exceeding budgeted expectations by $332,957 and total expenses ere lower than budgeted by $2,029,131, resulting in a total surplus of $2,362,088. 

The major source of higher revenue was investment income and sales and user charges, including increased user fees from the MLC and MCCC. 

While expense reductions occurred throughout the town organization, with most departments under budget, contracted services provided the largest savings.

Chief among them was the $303,869 saved because snow removal/hauling needs were lower in the 2023 fiscal year. 

Also, the policing contract was $304,401 under budget, along with salaries, wages and benefits at $205,917 under, after accounting for the $350,000 in budgeted attrition. 

The 2023 net surplus is $1,816,110 after designated transfers, including to the parks, recreation and culture, and offsite levy reserves.

A surplus was anticipated in the development of the 2024 budget, and $1 million of that was assigned to reserves in the document. 

Administration recommended that Council also put the remainder entirely into reserves. 

In accordance with the reserve policy, the $303,869 in snow and ice removal funds would go into the snow removal reserve. Also, according to policy, 25%, $454,000, would be allocated to the capital projects reserve. The remainder would be designated for the operating reserve.

The move to utilize part of the surplus to reduce the 2024 tax increase was spearheaded at the meeting by Councillor Stephen Dafoe.

In discussion of second reading of the bylaw, Dafoe moved that administration allocate $158,000 from the surplus to go toward lowering the tax rate. His concept was that $100,000 would come from snow removal funds, plus $58,000 in what had been described as council discretionary funds.

“I like the fact that we are turning the corner,” he said. “When we have so much surplus, I think some of that should go back.”

In debate, Dafoe’s motion received widespread support from other council members, with the exception of Deputy Mayor Jen Anheliger, who cited the need to plan for financial stability.

“I think this decision to shave a little bit off the top is short-sighted,” she said, “I think it’s important that we stick with the plan.”

A 10-minute recess was called following the proposal of an amendment by Mayor Simon Boersma.

Discussion during recess resulted in council direction to administration to allocate the surplus as follows: $103, 869 to the snow removal reserve, $129,107 to the capital projects reserve, $129,107 to the general operating reserve, from which funds would be transferred to allow for a lower tax rate increase. 

The remainder would be allocated in accordance with the reserve policy or other agreements.

The second reading of the amended tax policy bylaw passed six to one, with Anheliger opposed. 

The bylaw was then given a third reading and unanimously approved.

 

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1 Comment

  1. Reducing taxes because of lower than normal costs for snow removal is not sustainable! What do you do for next year’s budget? My guess is increase taxes by an extra 1.5 percent because you now have to cover typical snow removal costs again. Robbing Peter to pay Paul doesn’t work in the long run.

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