By Cole Parkinson
The Municipal District of Taber council has gotten their first look at next year’s interim operating budget.
At their regular meeting on Nov. 26, councillors got an in-depth look at changes being proposed for next year’s budget.
The 2020 proposed preliminary operating budget projects a $175,791 operating budget deficit compared to 2019’s $535,422 deficit. The 2020 interim operating budget also includes a non-cash expense of $4,438,414 for amortization.
“Municipalities are allowed to budget deficits up to their amount of amortization. Our amortization is over $4 million,” explained Bryan Badura, director of corporate services.
With oil and gas linear changes, the 2020 budget includes a projected decrease of $790,468 in municipal property tax revenues.
This decrease includes an estimated 40 per cent reduction in machinery and equipment assessment base resulting in close to $1.255 million less revenue compared to 2019.
“We don’t have a for sure confirmation on this change in assessment to oil and gas properties. We’ve heard about it and something is coming but this is an estimate we have included as a potential loss,” said Badura. “At one of our Finance Committee meetings, we had a 40 per cent reduction in just machinery and equipment assessments and then another one we had a 40 per cent reduction in everything, including linear properties. So, those ranged from the $1.225 million loss in taxes up to just over $3.5 million less assessment, which means $3.5 million in fewer taxes. In the proposal, we went with a lesser amount.”
Mill rates also see increases across the board for 2020.
Mill rates are proposed to increase by two per cent for residential property, two per cent in non-residential property and 10 per cent for farmland property.
With those proposed mill rate increases, tax revenues are estimated to jump to $423,273.
“What we are essentially saying is, with the lossed assessed value at $1.2 million, raising the mill rates we gain another $423,273,” continued Badura.
Council inquired if any mill rate had been increased by 10 per cent in the past, which administration stated they had not.
“Last year we did a 4.75 per cent on non-residential properties,” added Badura.
With that sizeable increase to farmland mill rates, some on council were worried that it was too much.
“I have a little bit of a concern with the 10 per cent, considering the year. Sugar beet guys only got half their crop off and a lot of hail. The dry guys have had two or three bad years in a row,” said Coun. Brian Brewin.
Coun. John Turcato stated that even dropping it to nine per cent would be preferable.
With a 10 per cent increase to farmland, $139,000 in additional tax revenues would be brought in while $180,000 in total revenues would be brought in.
The 2020 interim budget has the same allowance for uncollectible taxes as 2019 of $917,000 and currently, non-residential property tax in 2019 still has $1,765,000 outstanding, with that all being oilfield related.
Overall, there is $2.5 million in uncollected taxes as of Nov. 26.
“To do the math, we are not even putting a Band-Aid of $2.5 million,” said Deputy Reeve Jen Crowson of the added increase.
Others on council were more in favour of the 10 per cent increase that was proposed.
“Even with the 10 per cent increase, it is still low. If you compare it to the County of Vulcan, they are at 10 or 11 for farmland and Lethbridge County is 24 and we are at 7.5. I think we need to start heading that way because I have a sneaky suspicion that oil and gas isn’t going to come back booming. I think we need to start slowly progressing that way,” said Coun. Leavitt Howg. “They are the ones using our road networks the most. I know there have been some hard times but they’ve also had some pretty good years, too.”
Another change proposed moving forward was around minimum property taxes, payable per parcel.
As an example, in 2018, a $50 minimum for an estimated 1,574 property tax rolls would result in $41,371 and the proposed changes within the budget projects a net property tax revenue decrease of $790,468 from 2019’s edition.
Some on council voiced concerns around $50 for the minimum and they suggested lowering it to $25 or $30.
The interim operating budget also suggests a zero per cent cost of living adjustment to salaries and wages as well as staffing level changes that reduce overall salaries and wage costs to $8,035,845, which is a savings of $579,748 from last year.
With that in mind, Crowson suggested administration bring more information on what increases of one and 1.5 per cent would look like.
Other budget changes in revenues include water utility charges in the form of a 10 per cent increase to utility fee charges which adds $41,547 in sales and user fee revenues for the next four years and a $10 park camping fire permit fee which adds $70,000 in additional sales and user fee revenues in 2020.
“Why wouldn’t we just go $10 per night for camping?” inquired Coun. Tamara Miyanaga.
“I would be in favour of that as well. Maybe just on the registration,” added Turcato.
Administration concluded that an overall $10 increase would be reasonable, though one councillor voiced their opinion that continuing to raise the prices at the M.D. Park may deter people from continuing to camp there.
“That may make the M.D. park a little less attractive because a lot of these young families going camping go there because it is affordable,” said Howg.
A potentially big change to future municipal budgets comes in the form of all municipalities paying for their policing.
While nothing official has been declared as of yet, the M.D. 2020 interim budget has an estimated $185,000 based on the 10 per cent funding model.
Public works also see a decrease of $109,000 due to moving from two calcium applications to just one.
The 2020 preliminary budget also projects to provide $2,668,269 in cash from operations which is an increase of $368,873 from the previous year.
“This cash from operations can be used for capital budget requirements, you can transfer it to reserves for use in future years,” stated Badura.
Council approved the 2020 interim budget, mill rate increases of two per cent in residential and non-residential and nine per cent in farmland, a minimum tax of $30 and M.D. Park camping rate fees being increased by $10.
They also carried a motion that administration bring back more information on cost of living increases of one or 1.5 per cent increase.