By Trevor Busch
A preliminary 2015 operating budget for the Town of Taber has been presented to town council, with administration seeking input and guidance on revisions to the document prior to a final approval.
During a special budget meeting on Dec. 3, following deliberation town council voted unanimously to accept the proposed 2015 operating budget as information.
The budget proposal has incorporated a property tax increase of 4.95 per cent for initial discussion purposes, and as presented the budget is currently balanced. Each percentage change in property tax rates results in an impact of approximately $80,000.
Total revenues are estimated at $20,899,082, an increase of $912,723 over 2014, or 4.57 per cent. Total expenses are estimated at $22,817,497, an increase of $1,294,296 over 2014, or 6.01 per cent.
According to administration, the proposed 2015 budget reflects a fiscally-conservative approach, based on the growing infrastructure deficit that draws upon the majority of the town’s revenue sources, including senior government grants, municipal reserves, and, property tax and user fees, enabling the municipality to address the highest priority items.
The proposed 2015 operating budget includes minor increases in existing municipal service levels, introducing a health and safety position, an in-house mechanical maintenance position, and additional staffing to maintain roads and storm water drainage.
“I was surprised that there wasn’t someone dedicated for health and safety,” said Coun. Joe Strojwas. “But I was also told that there were three or four individuals that already work for the town, that some of those duties could be offloaded onto that individual, and he could work share or do more with that program together.”
That dynamic no longer exists within the organization for health and safety, according to administration.
“The type of expertise we need in a health and safety position probably doesn’t exist within our organization right now,” said Barkley Busch, human resources manager. “There’s a lot of new legislation, and there’s a lot of qualifications out there for health and safety. That person probably wouldn’t be within our organization at this point in time.”
The half-time health and safety position would be non-union, out of scope, and possibly classified under management on a contractual basis.
“I can support it more if it’s a non-unionized position, because a unionized position, as you know, if the town decides in the future we don’t need that position — just try it,” said Coun. Randy Sparks. “You’ll have huge grief. I can support it more if it is an out of scope or contract position. It’s probably needed, and I’m happy to see it half time, more than full time.”
A full-time health and safety position was not supported by town council during 2014 budget deliberations.
Highlights of the proposed 2015 operating budget include a 4.95 per cent increase in revenues generated from property taxes, based on managers reviewing their budgetary needs and amending the operating budget expenditures by $1,342,000 from the initial budget proposal presented to town council on Nov. 10.
Changes made to procure that reduction include additional revenue in the amount of $122,000, additional reserve transfers of $485,000, facility and equipment maintenance lifecycle program decreases of $91,000, staffing level decreases of $122,000, contracted and general services decreases of $479,000, purchases from other governments decrease of $25,000, and materials, goods and supplies decrease in the amount of $25,000.
The budget as presented incorporates a blended utility rate increase for a typical family of four of approximately $4.23 per month or 3.09 per cent. A typical light commercial industrial user would see an increase of approximately $11.92 per month or 3.8 per cent.
According to administration, the utility rate model is proposing a gradual alignment in rates which would reflect a full cost recovery in each of the four separate utility departments. The alignment for 2015 is primarily focused on correcting the significant waste water department deficit, which is currently funded by the water department surplus. The alignment results in a proposed weighted average increase for a typical family of four of about 3.09 per cent.
Expected return on investment from the town’s portfolio is forecasted to be $255,000. Any investment income earned during the year is transferred to capital reserves at the end of the year in accordance with the town’s investment policy.
Expected government MSI operating transfers for 2015 will be reduced from approximately $67,000 to approximately $33,000, and then phased out completely in 2016. The provincial government is transferring additional amounts to the MSI capital grant to make up the shortfall from the operating grant.
The initial operating budget proposal reflected fully funding the facility and equipment maintenance lifecycle program with $161,000. The budget as presented now reflects an allocation request of approximately $70,000.
Administration is recommending the addition of a half-time health and safety position, a mechanic, and two seasonal positions, both in public works. This would amount to 4,815 hours for these proposed positions. In addition to new positions, reclassifications will result in an extra 1,187 hours. The proposed increase in staffing levels is expected to add $225,000 to the budget.
A cost of living increase for existing staff will be approximately $192,000, subject to upcoming negotiations.
The budget as presented proposes an increase of $703,000, or 12.37 per cent, for contracted and general services, which includes the municipal development plan, land-use bylaw update, off-site levy update, and area structure plan, for a total value of $145,000 which would be funded from operating reserves. Also proposed is an additional $75,000 for road infrastructure repairs and maintenance, additional out of scope utility infrastructure repairs and maintenance of $86,000; sanitary sewer re-lining in the downtown area in the amount of $150,000 funded from capital reserves, building repairs and maintenance primarily for the arena, curling rink and community centre for $76,000; land improvement repair and maintenance for the fall turf program, park rehabilitation and urban tree program allocated $96,000; software support in the amount of $44,000 due to annual maintenance and licencing for existing and proposed software, a census for $20,000; and $11,000 for net inflationary increases and decreases in various accounts.
“I believe that offsite levies are just a real hot topic these days with all municipalities within the province, and also examination of ways it can be used, and I think we really need to examine that if we’re falling behind there,” said Coun. Laura Ross-Giroux.
“The sanitary re-lining, basically we have a bunch of clay tile under the ground, put in in the 1950s or 1960s, and over time it deteriorates, develops cracks,” said Gary Scherer, director of public works. “It’s still functioning, but its lifespan is at its end. By re-lining this, we can actually extend its life by 10 to 15 years. By that time we’ll have to replace it. But right now, the asphalt over top of it now is pretty good, so lets not dig into it, let’s extend the life, and then when the asphalt and all the other components are together, then replace it.”
An increase of $10,000 for purchases from other governments, or 1.11 per cent, is due to increased rates as charged by external municipal agencies for services.
The budget presented shows an increase of $220,000, or 9.25 per cent, for materials, goods and supplies, including increases to equipment and vehicle parts of $53,000; meeting room and council chamber upgrades for tables, chairs and audio-visual equipment for $16,000; various equipment purchases including ECC radios, shelving for the planning storage room, confined space kit, and a diving board for the pool; shale for the ball diamonds for $10,000; sidewalk repairs for $14,000; building, plumbing and electrical supplies for $89,000; promotional and recognition awards for $10,000 primarily for the council function; and the remaining $13,000 for net inflationary increases and decreases in various accounts.
There is a proposed increase in operating reserve transfers to fund expenditures in the amount of $443,000. The reserve transfers are being proposed to fund planning bylaws and plans, water distribution system master plan, sanitary sewer re-lining, meeting room upgrades, and continuing projects from 2014.
The budget has been prepared based on capital reserve contributions in the amount of $2,117,000, which maintains departmental capital reserves contributions at the same level as in prior years.
Administration recommended the municipality consider amending the capital reserves policy to a level that keeps pace with the amortization which is estimated to be $3,981,000. The shortfall is estimated to be approximately $1,864,000, or 46.8 per cent, per year and will widen each year as the town re-invests in its assets.
“With limited grant funding sources, there’s going to be an ever-increasing pressure being put on municipalities to find alternate ways to fund some of their infrastructure,” said Dale Culler, director of corporate services. “Some of it will come from their own sources, competing grants that may be even more challenging to get. I just wanted to point out that we have a shortfall currently — amortization is non-cash, there’s no requirement to fully fund it — but this is the cost of using up your infrastructure and assets over time, this is the historical cost. So if you think the replacement on your infrastructure would be bought at today’s dollars, not historical dollars, there is that need to make sure that you’re at least aware of where we’re at.”