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Town positions face chopping block in draft 2021 budget

Posted on October 28, 2020 by Taber Times

By Trevor Busch
Taber Times

Staff reductions to the tune of $610,000 are being called for in recreation, public works, and management in the Town of Taber’s 2021 draft operating budget.

Discussed briefly in public at town council’s Oct. 13 meeting, no resolution was passed but the operating budget was then included as part of a closed session discussion at a special meeting held on Oct. 19. There was no motion carried following this subsequent meeting.

One proposal calls for a $610,000 cut to administrative wages in order to retain a balanced budget.

“As per the directions received in closed session which council was prepared to make public during the formal budget approval process, it targets the following areas for decreased levels of services: 1. Recreation operations (Aquafun Centre) 2. Recreation operations (Parks/Arena) 3. Public Works (Building Maintenance) 4. Management (layoff/vacancy in two management positions),” stated administration in the background to the budget summary. “Due to the imminent negotiations with CUPE in regard to updating the employment contract, it is recommended this budget be considered for adoption as soon as possible to give the management negotiating team clear direction regarding council’s expectations.”

“In addition, this budget brings with it the need for layoffs. It is recommended these be undertaken in either late October or early November. As delaying the adoption of this budget will move the layoffs closer to the end of the year. And layoffs around the Christmas season should be avoided if possible.”

Instead of making up the deficit by way of layoffs, the alternative would be to decrease capital contributions by approximately 30 per cent in 2021.

“This is a solution to the problem but not a recommendation supported by administration as it will reduce the capital contribution,” stated administration in the summary.

Administration’s background to the budget summary outlined they had prepared a balanced 2021 operating budget with a series of “assumptions for council consideration.”

“Extraordinary times calls for extraordinary measures,” said finance director John Orwa. “Because times are hard, we have to look at different areas.”

These assumptions included a management wage freeze in regard to step increases, council wages to remain the same as in 2020, and the CUPE wage allocation to remain the same as in 2020, with step increases still applying.

The budget summary also called for a one per cent cost-of-living increase for management ($22,300), a two per cent increase in net tax revenue from 2020 ($190,000), and an additional system analyst to be shared equally with the Taber Police Service ($80,000). The Taber Police Association con- tract is in effect until Dec. 31, 2021. The 20- year debenture for the 56th Avenue Road Extension at the current rate will cost $118,000 in 2021.

In addition, the budgeted amounts for community-related organizations are from their forecasted amounts presented and approved in 2019. An additional $50,000 was given in 2020 to the Taber Public Library by council, and administration has carried forward the same amount in 2021 to a total of $279,463.

“It’s going to cost us $300,000,” said Coun. Jack Brewin, in reference to library funding. “I’d like a little more discussion about that. Why are we doing this? The handibus service, to me, is much more important than the library. We keep throwing more money at the library. I’d like to see some reasoning why we’re doing this. To throw $10,000 at a 75 year anniversary to me makes no sense.”

Several funding requests have not yet been factored into the 2021 operating budget, including a requested one-time 75th Anniversary funding allotment for $10,000 from the Taber Public Library.

The Taber and District Handibus Association has also requested additional funding of $40,883 for 2021 and an additional $28,883 for 2022, which reflects an increase in expense for the procurement of COVID-19 related PPE’s. Council had previously approved $98,605 for 2021 and $102,829 for 2022.

Under the present 2021 draft budget, operating revenues are expected to come in at $24,958,888, with expenses of $29,768,469. For revenues, fines are expected to bring in $485,775, franchise fees ($1,710,207), net taxes ($9,687,163), rentals ($885,444), and sales and user fees ($9,242,273). For expenses, amortization amounts to $4,809,581, contracted and general services ($5,336,696), materials, goods and supplies ($3,583,911), repayment of long-term debt ($1,130,932), salaries, wages and benefits ($11,062,456), and a reserve transfer ($2,063,494).

“I really wanted to emphasize that this will not automatically translate into two per cent mill rates,” said Orwa. “So when we come to the mill rate times, we will see depending on which direction we go, because there is that inverse relationship between mill rates and assessment…the mill rates are dependent on our actual assessed values, so if the assessed values decrease, the mill rate will need to increase to break even, and vice versa. So we do not know those facts.”

The 2021 operating budget has provided for a two per cent increase in net tax revenue, but this will not automatically translate into a two per cent mill rate increase.

“If the assessed values decrease the mill rates will need to increase to break even and vice versa,” continued administration. “Due to the current economic environment there are a lot of uncertainties regarding future assessed values. The current provincially proposed equalized assessment for the Town of Taber are (a) 5.66 per cent increase to the Residential/Farmland and 2.2 per cent for the Non-Residential assessed values.”

Earlier in the meeting, council had declined to pass an Organizational Review which made sweeping recommendations regarding a reorganization of administration.

“The sad reality is if we’re not going to pass the Organizational Review this evening, to pass this operational budget is going to be ill advised, because the budget takes into account a certain portion of that Organizational Review in order to make it work,” said Coun. Louie Tams. “I’m wondering if we’re biting ourselves in the foot…if we didn’t do one, I think we can’t do the other, that’s my personal opinion.”

CAO Cory Armfelt attempted to convince council the Organizational Review was completely separate from the 2021 operating budget.

“That is for the end of 2021. So this budget for 2021 that we’re proposing now is a business-as-usual budget for this municipality. So the two things are completely separate. The Organizational Review is a document that looks at potential savings for how the municipality works to be implemented at the end of 2021, beginning of 2022. This budget is independent of the Organizational Review. This budget is simply cutting how we currently do things right now.”

Coun. Garth Bekkering agreed with Tams.

“I have a tendency to agree with Councillor Tams, that the two are related, in many ways. My opinion is that we not pass this particular item (budget) either.”

Near the close of the discussion on Oct. 13, Coun. Joe Strojwas sought out the opinions of fellow council for a proposed property tax increase of three per cent rather than the two per cent incorporated in the draft 2021 operating budget.

“Some time ago — six or seven months ago when we were looking at the budget, and we knew that we were going to be an increase, I floated the idea to council and never got much response from it, that perhaps all things considered rather than maintaining a two per cent tax increase, that we look at a hard three per cent.

We have maintained our taxes for the seven years I’ve been on council at two per cent or less, and I think these are circumstances — trying times now — that we should be looking at a one per cent increase over that taking that up to three per cent.”

Bekkering was bluntly opposed to the Strojwas proposal, but Brewin expressed his viewpoint on operating the town like a business.

“I’m not here to be re-elected. I’m here to run a business, and I consider the Town of Taber a business. Everyone is
taking cutbacks, everyone has to dally up to make things work. We’ve got to face reality, the Town of Taber is a business, it’s not a free-for-all. I support Councillor Strojwas. For the last seven years, we’ve all said cut taxes, we’re not going to increase taxes, we want to get re-elected, we want to run this town. But realistically the town costs money to run and we’re not stepping up to the plate with that. We’ve kept taxes as low as we possibly could, and we’re paying for it now…if we want to keep this town successful we’ve got to face reality.”

Coun. Carly Firth was also supportive.

“Nobody likes paying more taxes, myself included, but extraordinary times. We didn’t know how 2020 would look like coming into it, and we don’t know how it’s going to end, but sometimes these things need to be done.”

Tams, on the other hand, was opposed.

“I can’t support three per cent. Already included in this budget is two per cent, and I can work with two per cent, but I can’t support a three per cent increase. Yet, I’m still torn because I do see the merit in it.”

Coun. Mark Garner pointed out that it always seems like an easy choice to raise taxes, but there are real world consequences to such decisions.

“I’m not in favour of going to three per cent…you have to look at the tax base that we’re asking that one per cent. Did they get a one per cent increase? How are they going to do that? How are they going to manage that? It’s pretty easy to say let’s just raise taxes. But the reality is everyone out there is hurting, and I think that our job, we need to meet as a council and come up with some efficiencies. Because I think they’re there.”

Piling on another one per cent in 2020 would not be in the best interests of the community, argued Mayor Andrew Prokop.

“I would be a little reluctant to support three per cent solely, unless there was some other angles we could look at as well, mainly because we’ve maintained the two per cent average for the most part for the last seven years, and it’s a difficult year that we’re having and it’s probably the worst time to be considering that kind of an add on. We’ve talked two per cent the whole year, and that’s what is factored in this budget currently.”

Following discussion, no resolution was made by council, but the matter was discussed again in closed session at a special meeting on Oct. 19, where there was also no motion passed.

Administration’s recommended motion asked for council to approve the 2021 operating budget summary as presented, with service level reductions coming from recreation operations (Aquafun Centre and Parks/Arena), Public Works (Building Maintenance) and Management (layoff/vacancy in two management positions).

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