By Trevor Busch
The Town of Taber’s 2018-2020 draft operating budget is calling for an overall increase to property taxes of 3.2 per cent for 2018 while currently sporting a six-figure deficit.
Total revenues in the proposed 2018 operating budget come in at $23,199,408, with total expenditures showing $28,146,096, with a net total of $4,946,688 and amortization of $4,495,929. The budget is currently showing a deficit of $450,759.
The 2018 proposed budget as compared with the 2018 approved budget has an overall variance of $450,000, or five per cent. According to administration, the increase can be absorbed by a proposed Revenue Stabilization Reserve (RSR). Net tax revenue for municipal purposes from the 2018 approved budget is $8.83 million.
With a proposed increase in net taxes of 3.2 per cent — currently unapproved by council — this would produce an increase in revenue of $245,000. Other revenues are on the decline by $105,000, partially based on photo radar revenues being reduced by $80,000 based on 2017 actuals. Rental revenues are also down by $57,000 due to a decrease in cultivated waste water licensing fees (farm land lease revenue).
“So we’ve prepared this budget with a 3.2 per cent tax rate increase. That’s the increase in revenue that we would need for the amounts that you see in front of you,” said CAO Cory Armfelt during council’s Nov. 14 regular meeting. “That is assuming that nothing has been built in the town in 2017. Something that I’ve had to listen to over the last five years since I’ve been participating in this, is council has always indicated we want no more than a 2.5 per cent tax increase. So we go run the model based on no more than a 2.5 per cent tax increase. But that model assumes nothing gets developed in town. As an example, last year the conversation in council was we don’t want any more than a 2.5 per cent tax increase — one per cent for the carbon tax, 1.5 per cent for cost of living increases. What that translated to was a 0.62 per cent tax increase.”
There will be an increase in salaries, wages and benefits of $444,000, which is being driven by the hiring of a new full time recreation operator, the re-classification of a casual position to a full time clerk typist for public works, and the “impact of re-analyzing ‘worst case’ wage requirements for 2018.”
Also on the rise will be materials, good and supplies to the tune of $227,000, which is being driven by “various increases offset by decreases from different departments” and additional requests from leaseholders for upgrades. Repayment of long term debts will require an increase of $101,000 due to additional debt acquired during the year.
Administration was recommending that the budgeting process move from a three year to a four year rolling budget so that council will be able to have four years’ worth of operating expenses at their discretion.
“So you’ll see while we’ve proposed a 3.2 per cent increase in this budget, that’s assuming that nothing is being built this year,” said Armfelt. “It’s a very challenging thing when we run the model to forecast into the future how much development we’re going to have from year to year, what the value of that development is going to be when it comes to assessment, and what that is going to translate into for the revenue side. Those are the things we really don’t know until 2018.”
Total revenues in the proposed 2019 operating budget come in at $23,289,592, with total expenditures showing $28,177,699, with a net total of $4,888,107 and amortization of $4,495,929. The budget is currently showing a deficit of $392,178. Total revenues in the proposed 2020 operating budget come in at $22,753,291, with total expenditures showing $29,038,004, with a net total of $6,284,713 and amortization of $4,495,929. The budget is currently showing a deficit of $1,788,784.
Previous council had approved a 2.5 per cent property tax increase for 2017 (1.5 per cent due to inflation and one per cent due to the provincial carbon tax levy). For residential and farmland, the total 2017 property tax rate was 9.9340 mills, representing an increase over 2016 of 0.9 per cent. For non-residential properties, the increase over 2016 was slightly higher at 1.21 per cent, or a total 15.3105 mills. Machinery and equipment rang in at 11.7597 mills, or an increase of 1.52 per cent, while GIL nonresidential was pegged at 11.6561 mills, or an increase of 1.31 per cent.
Following the presentation, members of council expressed a desire to further study the proposed budget before making any final approvals.
“Are we to that point right now where we’re going to approve this? I don’t think so,” said Coun. Joe Strojwas. “I think for the time being I don’t think we’re going to make that motion here tonight.”
Coun. Louie Tams agreed.
“I was under the impression we were looking at this as information, because we really didn’t drill down on any of that, because there’s a whole bunch more questions — it was a high level overlook.”
As for a looming $450,000 deficit that will need to be addressed, Coun. Garth Bekkering was confident this problem could be easily overcome.
“I’m not prepared to pass an operating budget this evening for sure. But it seems to me if you have a $27 million operating budget, and you’re short $450,000, it’s only two per cent — no big deal. We’ll find a way.”
Following discussion, council voted unanimously to accept the 2018-2020 draft operating budget for information.