SUNDRE – The municipality anticipates an annual four per cent increase to its cash requirements over the next couple of years.
However, the predicted hike in operational expenses will not necessarily automatically translate to an equal increase to taxes, Chris Albert, director of corporate services, said on Dec. 5 during a presentation to council outlining the four-year operating budget and 10-year capital plan.
All members of council were present, with mayor Richard Warnock and councillors Connie Anderson, Owen Petersen, Todd Dalke as well as Jaime Marr attending in person while Chris Vardas and Paul Isaac joined remotely by phone.
The former council in 2019 adopted the municipality’s first-ever multi-year budget, which Albert said administration felt had been working out very well.
Although it’s a multi-year budget, council still has an opportunity to annually review and revise the document. Forecasts for the 2023-2026 budget are in part developed with community input gleaned from spring and fall open houses, as well as council planning sessions to develop a vision and strategies for the next four years, said Albert.
Following both spring and fall open houses, council then holds a workshop after which administration spends the next couple of months researching which projects and initiatives can be undertaken over the coming years to help council achieve its goals, he said.
Once approved, the budget is used to set the mill rate – which is used to calculate how much taxes residents and businesses ultimately have to pay – the following spring.
As the municipality did not receive many requests to either increase or decrease levels of service, which primarily determine what the operating budget will be, “we did not have a lot of cost-impacting initiatives,” he said.
“A lot of the initiatives, we believe we can work with in our existing framework,” he said, adding a lot of the budget from 2023 to 2026 therefore remains fairly consistent with the 2022 budget.
As council carried a motion during the Nov. 28 meeting approving a four-year annual cost of living adjustment (COLA) for town employees, Albert said that was also factored into the budget.
“We don’t incorporate (COLAs) normally into the budget immediately; it’s one of those carry-over items that we work with throughout the budget cycle,” he said.
“But because council did make a motion to adhere to a four-year cycle, in this particular case we thought it was prudent to incorporate that.”
Additionally, Albert said that based on conversations with council, administration also included more funding for the Sundre Fire Department’s advanced medical first aid training.
“That was an additional cost that council seemed to be in support of,” he said.
Another item that was included per council’s direction is annually recurring funding to the tune of $10,000 for the Sundre Curling Club, he said.
Conversely, removed from the budget as a result of council’s fall workshop was a request from the economic development department to conduct some studies.
“Council was not in favour of those at this time, so we have removed those from that preliminary budget information that was submitted to council for the fall workshop,” he said.
Albert also informed council that the municipality’s costs for 2023 to 2026 are expected to increase by four-plus per cent for the next couple of years before finally dropping a bit.
In 2023, the increase will represent about 4.65 per cent more than the costs in 2022. In 2024, the increase is expected to peak at around 4.84 per cent over costs in 2023. The year-over-year cost increases expected in 2025 and 2026 are 3.26 per cent and 2.42 per cent respectively.
A significant portion of those cost increases, explained Albert, stems from the incremental hikes to the provincial government’s new police funding model.
“In 2023, the cost that we have to pay for the provincial police funding model, goes up from $85,000 in 2022 to about $115,000 in 2023,” he said, adding that funding will again go up in 2024 to $170,000.
Those estimated increases, he later added following his presentation in response to a question from the mayor, will supposedly cease after four years, according to the provincial government.
“That’s the assumption that we’re going with; we hope that actually happens and that they don’t continually increase substantially,” he said.
“I’ll wait to see that, because that doesn’t seem to be the trend,” Warnock said, adding a large sum like $170,000 represents no small slice of a small town’s budget with $4 million in cash requirements.
Additionally, regular inflation is also of course factored into the calculations, said Albert, who stressed that the cost increases do not automatically translate to a tax increase of the same amount.
“It is not a one-to-one relationship,” he said, adding the mill rate is primarily established by dividing the total cash requirements from taxes with the town’s total assessment, which can change for a variety of reasons like market values.
New developments are another variable that has a significant impact on taxes, he said.
“Unfortunately, in 2022, we have not seen significant multi-million-dollar developments,” he said.
The municipality also has no control, nor budgets for, requisitions, he added.
“We can try and keep a nice stable budget for our four-year cycle, but there are still the education requisitions and the Mountain View Seniors’ Housing requisitions that come forward that also affect people’s taxes.”
Presenting a few highlights from the capital budget, Albert said the Sundre Arena’s dehumidifier – a roughly $92,500 expense – was moved up to 2023 from 2024.
Also included in the 2023 capital plan is a project to build a permanent outdoor rink and multi-use space at a budgeted $362,500, as well as start initial work on the passive-use outdoor recreation area and campground earmarked at $300,000.
Although that project is still in the planning and consulting phase, budgeting ahead is prudent and potentially opens doors to begin implementing some of the plans as they are approve, he said.
Also bumped up one year early to the 2023 capital plan at council’s direction is a $20,000 automated resuscitation machine that helps responders do compressions on patients to assist members of the Sundre Fire Department who are increasingly being depended upon to provide emergency first aid as the provincial ambulance service struggles to keep up.
Another $80,000 was set aside for the possibility of completing the interpretive nature boardwalk sooner by way of contributing funds for materials to assist the volunteer-driven effort.
By far the biggest ticket item anticipated in next year’s capital plan is an estimated $1.8-million upgrade to water and wastewater infrastructure along Highway 27, which is set to be repaved in the summer of 2023 by a contractor on behalf of Alberta Transportation.
Overall, there are about $3 million in capital costs budgeted in 2023. A little more than $1.3 million in capital expenses are forecast for 2024 and includes project such as hard surfacing some back alleys at $100,000, the purchase of a 2008 Chev C5500 Duramax for $400,000, as well as water leak detection and repairs for $500,000.
Following further discussion, council unanimously carried a motion approving the multi-year budget and capital plan, which for 2023 has operating cash expenditures of almost $9.1 million and revenues amounting to a little more than $5.1 million with the remaining nearly $4 million to be funded through taxes, the Fortis franchise fee, Municipal Sustainability Initiative funding as well as restricted surplus accounts where identified.
The budget is available in full on the municipality’s website by clicking on the “Council” tab under the main page’s “Your Government” section, then selecting “Meeting Minutes and Agendas” to find the Dec. 5 package.
