Town and M.D. graded in spending watch report

Posted on February 20, 2019 by Taber Times

By Trevor Busch and Cole Parkinson
Taber Times

In a new Alberta Municipal Spending Watch Report from the Canadian Federation of Independent Business, the Municipal District of Taber is rubbing shoulders with rarified company after securing a top 20 ranking.

The report compared the operational budgets of cities, towns and counties in the province. Out of 182 ranked municipalities with populations of 1,000 or more, the Municipal District of Taber comes in with the best grade at 17, the Town of Taber is ranked at 71 and the Town of Vauxhall follows at 85.

The Village of Barnwell is also present in the report, though they are unranked due to their population which was under 1,000 residents.

The M.D.’s rank in the top 20 comes from a 19 per cent 2006-2016 population growth, two per cent 2006-2016 growth in real operating spending, $1,965.13 2006-2016 cumulative real operating spending per capita and a negative 15 per cent 2006-2016 growth in real operating spending per capita.

“The M.D. of Taber has maintained a constant level of services for residents and with the growth and population, on a per capita basis, we have been able to offer those services at a lower cost per capita,” explained Bryan Badura, director of corporate services for the M.D. of Taber.

The report states that on average, Alberta municipalities exceeded a sustainable growth benchmark of inflation plus population growth by $2.5 billion in 2016 and municipal operating spending across Alberta increased by nearly two and a half times the rate of population growth from 2006 to 2016.

Badura also stated the M.D. has stuck to the core services and not added any high cost services.

“Part of the report doesn’t specifically examine if there are additional services or new services or let’s say enhanced services that are provided. The M.D. of Taber sticks with the core municipal services in providing water, sewer, roads, infrastructure and maintenance as well as services to the agricultural community. In the last 10 years, off-hand, I can’t think of a lot of additional services as far as high cost services that we have began to provide,” he explained.

This year’s edition of the annual report compares operational spending to population growth from 2006 to 2016, the most recent year that information is available. Overall, it found that local government operating budgets for municipalities of 1,000 or more people grew by 62 per cent over that time, more than twice the rate of population growth.

It excluded capital spending or amortization, and removed power and gas utility operations because they are not uniformly provided by all local governments.

The Town of Taber’s rank of 71 comes from a 9 per cent 2006-2016 population growth, 40 per cent 2006-2016 growth in real operating spending, $1,759 2006-2016 cumulative real operating spending per capita and a positive 28 per cent 2006-2016 growth in real operating spending per capita.

“We’re in the higher end of the average. Obviously it’s great to be number one, but we’re in the above average mid-range for those figures,” said Mayor Andrew Prokop. “To me, I think that’s more than reasonable for what we’ve got going on in this municipality.”

Town council consults the Consumer Price Index (CPI) during budget deliberations, with tax rates based on assessed values and inflation. Over the past decade, annual CPI increases have averaged 1.48 per cent, while the town’s annual average tax rate increase over the same time period has been 0.81 per cent.

“So we’re quite a bit under that actual average for the 10 year period. If we were over, I think that would be cause for concern, but we’re a fair bit under that. To me, this is showing nothing but positives,” said Prokop.

Town administration also noted that during periods of oil boom, land assessments increased which led to higher revenues from taxation. However, after recent periods of recession this revenue has been significantly reduced.

While outlining that there is a “cost associated with the public’s demand for a high level of service”, town administration’s analysis of the report highlighted a series of downloaded costs due to external forces beyond the municipality’s control, including a decline in operating grants from the province over the past decade, wage inflation during times of prosperity that remain a structural cost to the municipality, and increased Occupational Health and Safety demands from the province representing an additional cost for municipalities.

“We’ve had grants reduced, less grants available in that timeframe, but that’s one of our factors,” said Prokop. “There’s more OHS requirements, that’s on the increase, you have to spend more municipal dollars on. Not by choice, but by necessity. The audit requirements are more involved. The larger municipalities have more of those to deal with, and that’s up every year.”

Of the 182 municipalities examined in the study, the Village of Nobleford, north of Lethbridge, was best at keeping spending increases in line with growth. Okotoks was second, followed by Cochrane and Ponoka County.

“The whole report, it’s not exactly comparing apples to apples with all municipalities,” said Prokop. “A few things jumped out at me that others don’t have in comparison. Nothing against Nobleford — they’re top ranked — but we have 24-hour policing, they don’t.”

Town administration analyzed the CFIB report’s five recommendations and explained the measures the municipality employs to work toward those goals.

“With our municipality compared with smaller municipalities, we have more levels of service required, related to recreation, road repair, infrastructure repairs and upgrades,” said Prokop. “With all of that factored in you can’t really compare us with Nobleford. All things considered it’s a fairly in depth report, but it’s not in my mind a complete and accurate account of what’s really going on with all the municipalities compared on the same level playing field. It’s not.”

In limiting spending to inflation and population growth, the town has kept its budget increases — which usually have a corresponding affect on tax increases — as close to the CPI as possible to meet or stay below inflation. In reviewing core services to ensure effective service delivery within a framework of fiscal restraint, administration argues the town is diligent in finding efficiencies and aggressively pursuing grant funding.

For contracting services to the private sector where cost-efficient, administration asserts the town has always followed this practice and will continue to do so. In the area of implementing a sustainable wage policy, administration pointed out that on average the town’s wages are “fair bit lower than our other municipal counterparts. Also recommended by the CFIB was the implementation of contingency funds in case of natural disaster.

“We are now planning as per these recommendations from the CFIB to begin contingency funding in the budget process,” reads a statement from town administration.

Comparing a rural municipality to an urban municipality — such as the M.D. of Taber and Town of Taber — is patently unfair for a number of reasons, according to Prokop.

“It’s similar to what I said about Nobleford. It’s really not on the same level playing field, even if you just look at policing. That’s a major factor for what we have when it comes to cost requirements. So just that one alone — again, nothing against our neighbours in the M.D. — they don’t have that kind of expense that we do. It’s different requirements, different priorities for the municipality than it would be for the M.D. of Taber.”

The Town of Vauxhall shows a 16 per cent pop growth, 66 per cent growth in real operating spending, $1,584 cumulative real operating spending per capita and 43 per cent growth in real operating spending per capita.

The Village of Barnwell has a listing of 75 per cent population growth, 163 per cent growth in real operating spending, $937 cumulative real operating spending per capita and 50 per cent growth in real operating spending per capita.

The top three worst performing municipalities are Turner Valley, the Municipal District of Opportunity, and the Municipal District of Saddle Hills County.

Turner Valley shows a 41 per cent population growth, 841 per cent growth n real operating spending, 266 per cent growth in real operating spending per capita, $6,804 cumulative real operating spending per capita and 569 per cent growth in real operating spending per capita.

On the other end, the best performing municipality was Nobleford who came in at a 48 per cent population growth, 62 per cent growth in real operating spending, $756 cumulative real operating spending per capita and 10 per cent growth in real operating standing per capita.

Other locales in the region were: No. 30 Bow Island, $1,259 per person, up 24 per cent; No. 43 Brooks, $1,359, up 32 per cent; No. 46 County of Newell, $2,489, down 13 per cent; No. 54 Cypress County $2,428, down 6 per cent; No. 68 County of Forty Mile, $2,376, up 1 per cent.