With two elected officials opposed, council approved the municipality’s operating budget last week.
“Council had adopted a four-year operating budget,” Linda Nelson, chief administrative officer, said during the Dec. 16 meeting.
“We are bringing forward for 2020, changes to the previously approved budget.”
Included among the additions incorporated in the 2020 budget, at no increase, she said, are: full spectrum wastewater testing; the town’s replacement for municipal enforcement; as well as for following years an increased contribution for the library, water testing, further wastewater testing, and additional flower planters.
“We have removed from the budget the second (bylaw) enforcement officer for 2020-21 and ’22,” she said, adding that amounts to a reduction of nearly $113,000 in 2020, about $59,000 in 2021 and more than $61,000 in 2022.
The Highway 27 project in the capital plan was also reduced to about $350,000 from just more than $1.6 million, and is scheduled to occur in 2022, she said.
“That’s a substantial reduction," she said.
“Based on the original information that we had, the plan was to have to replace all of the underground service piping and we were going to do the work to coincide with the roadwork the province is going to need to do with Highway 27,” Chris Albert, director of corporate services, clarified by email.
“Our engineers have since reviewed the project in greater detail, as happens when projects get closer to starting, and it was determined the pipes are still in fairly good shape and installing a sleeve will ensure the integrity of the pipes and extend their life,” Albert explained.
Additionally, some Sundre Arena costs were replaced with a building envelope study that will be brought forward, said Nelson.
Trail connections in 2020 were increased slightly, to $56,000 from $50,000, to enhance wheelchair and reduced mobility access, she said.
Another addition in 2020 is the lagoon lift station budgeted at about $267,000, shop and community centre roof upgrades for $18,000, and the compressor overhaul and replacement as well as arena dehumidifier at $75,000, she said.
In the capital budget, she said administration reduced a number of items, including eastside gas looping in 2023, which was decreased by $320,000.
“This would result in just a fraction over the rate of inflation at 1.6 per cent, which would mean a zero increase to the budget as you’re just adding inflation. So rather than 1.6 per cent, the operating budget would be increased by 1.76 per cent.”
Administration stressed that a predicted cost increase in the operating budget is not necessarily indicative of a tax increase in the same amount, as there are unknown factors — such as assessments, requisitions, additional revenue sources and cost sharing alternatives — that could play a role in determining the mill rate in the spring.
Initiating a discussion, Coun. Todd Dalke moved administration’s recommendation to re-affirm the adoption of the 2019-2022 four-year operating budget as amended, with total expenditures of $8.8 million, $9.2 million, and $9.5 million as well as total operational revenues of $5.1 million, $5.2 million and nearly $5.3 million in 2020, 2021 and 2022 respectively. The remaining balances are to be funded through taxation, the Fortis franchise fee, municipal sustainability initiative operating grant funding from the province as well as restricted surplus accounts where identified.
Coun. Cheri Funke expressed concerns about the sewage lagoon upgrade costs.
“I’m struggling with agreeing to this,” said Funke, adding that for the past three years that expense had been budgeted at $14 million but is now $13 million.
“It was always just a placeholder. And now we’re going to approve a $13 million project for something that council has not seen. We know nothing, we have no information,” the councillor said, adding she was not comfortable approving the expense in the absence of more details.
“We still are working on alternate solutions,” said Nelson.
The number that was in the budget and has been for several years was for a specific type of system, and there have since been some critical upgrades completed, she said.
“That’s why it is now at $13 million rather than $14 million,” she said, adding administration left that figure in the budget based on the engineers’ costs for the system. Grant funding will also be sought for the project.
Jim Hall, operations manager, said the municipality submitted test numbers for ammonia and phosphorous to Alberta Environment, and that he did not anticipate receiving a response until later in the new year. A followup report will be submitted to administration and the council by February, he said.
Mayor Terry Leslie said council will have an opportunity to discuss changes as they arise during workshops next year.
“That is the fluctuation of a normal budget cycle,” said Leslie.
Coun. Rob Wolfe also expressed doubts about being able to support the 2020 budget without knowing what the mill rate and requisitions are going to be.
“I don’t know how we can pass a budget not knowing that information,” said Wolfe.
“Don’t confuse the operating budget with the mill rate,” said Nelson, adding the mill rate will be determined in the spring once the municipality receives requisitions, which have nothing to do with the operating budget and are collected on behalf of other entities, as well as assessments.
“The changes that we have brought forward are minor changes to the already approved budget,” she said.
If assessments come in high, she said the mill rate increase could potentially be lower than the cost of inflation.
Coun. Richard Warnock said the budget is a "live document" that is not set in stone with council’s approval.
“Council can change it at any time with administration. So this just sets the blueprint for building the house. We may yet at some time change a wall, or a room, or add a different roof,” said Warnock, expressing support for the motion on the floor.
“I look forward to the many discussions we’re going to have as to what we can do to hold taxes.”
The mayor, who also supported the motion, said approving the budget gives administration the green light to get started on other projects without delay.
“It is the second year of a four-year budget we’ve already approved,” Leslie said, adding there is — as Warnock pointed out — room in the document for flexibility.
“This is just the next step.”
Nelson sought clarification from Funke, wondering whether the councillor wanted to have the $13 million line removed from the capital plan.
“No, I’m saying that we should hold the passing of the budget until we have information,” said Funke.
“Unfortunately, you will not have that information in time to pass a mill rate bylaw. That’s just a simple fact,” said Nelson.
“We’re working very closely with Alberta Environment right now…but I don’t think that Alberta Environment is going to be prepared to give us any type of approvals by February. I just don’t see that happening.”
Coun. Paul Isaac, who supported the motion and also understood Funke’s concerns, said, “As you’re still doing research, you don’t have an answer, but you still have to budget for it. And that’s all we’re doing.”
Dalke also expressed concerns about the negative impact that would result from holding the budget back, preventing administration from moving forward on other matters.
Funke then inquired whether administration had accounted for the impending policing cost for future years in the operating budget.
“Not at this point,” answered Nelson.
“It’s something that we would bring forward to the spring workshop for discussion,” she said.
Barring any further questions or discussion, council carried Dalke’s motion with Wolfe and Funke opposed.