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Banff council has little appetite for new programs, services for 2021 with COVID-19 uncertainty

I don’t need to see in the next budget what I would call true new service level requests,” said Mayor Karen Sorensen
Banff Town Hall 2
Banff Town Hall

BANFF –Banff’s mayor and councillors appear to have little to no appetite for additional projects, programs, services or staff positions for 2021 in the face of the economic fallout from COVID-19.


As work begins on preparing next year’s municipal budget, administration recently sought guidance on whether council wants to see any new service level requests given the local economy will likely be affected into 2021.


“We don’t want to bring a whole list of service level requests if there’s no appetite by council to fund them,” said Chris Hughes, the Town of Banff’s corporate services director at a governance and finance committee on July 27.


“The exception may be in the case where the new service is fully funded by an alternative source such as grant or donor funding.”


Mayor Karen Sorensen said she would be open to discussing a new service level request that came with outside funding, and wanted the chance to revisit new service level requests previously approved for 2021 or 2022, for example.


“Where I feel pretty strongly… I don’t need to see in the next budget what I would call true new service level requests,” she said.


“I would go so far as to say, that understanding that administration often beings new service level requests to us in an effort to respond to our work plan or our direction in our strategic plan, I’m not prepared this year to see very many service level requests that don’t come with funding or that we haven’t already had a discussions on.”


Councillor Chip Olver echoed the mayor’s statements, but added she would be interested in discussing projects or services that were approved for 2020, but then delayed or cancelled.


“I’ll use examples of the transit things approved and not gone forward on, and those I think would be appropriate to see on the list also,” she said.


“Even though there’s always good reason for new service level requests, this is just not the year for others.”


Councillor Corrie DiManno said she would have a better idea once council has gone through its strategic priority review, and looking at spending through a new lens and parameters around COVID-19.


“Once we have that discussion, that will help me know where council wants to spend time in its last year of our term and what we want to set the future council up for,” she said.


“That being said, if there’s service level requests that need to be done because of COVID or in case we’re still in similar situation next summer,  I would definitely want administration to provide those.”


Councillor Peter Poole, on the other hand, believes the Town has to consider a new approach to its financial planning.


“Any economic entity, the Town being one, is suffering tremendously, and the initial effort to reduce our expenses… by way or taxes is going to be the first of multiple years,” he said.


First, Poole wants to see a scenario analysis for revenue collected from taxes and utilities - a low, medium and high scenario. Secondly, he pointed to a need to squirrel away money on the expenses side.


He said one area to save would be to explore a cap on wages and benefits as well as to assume a zero-based budget without consideration of the projected 1.4 per cent inflation rate.


“We’re in a new period here and we have to be resolute and work together to try to trim overall expenses of the Town,” Poole said.


Due to the financial impacts of COVID -19 and the uncertainty going into the budget and service review cycle for 2021, administration sought guidance on other areas of Banff’s financial plan council may wish to deviate from.


For example, guidance in Banff’s financial plan indexes the overall tax increase related to offering the same level of service at the Alberta inflation rate for the period ending June 30 of the previous budget year.


Administration wants to know what budget should be used as the base budget in 2021.


“Should the starting point be the 2019 budget, the amended 2020 budget, the originally approved 2020 budget, the approved 2021 budget or some other base budget?,” said Hughes.


Secondly, administration also needs to confirm the growth rate, if any, council would like to use for an inflationary factor for the 2021 budget.


“The current forecast for Alberta CPI as per the financial plan is 1.4 per cent,” said Hughes.


In addition, administration is looking for direction on how council would like to see capital reserve funding - essentially the municipality’s savings account for infrastructure projects - handled for the 2021-2023 operating budget.


In order to cut taxes for residents and businesses in 2020 due to the financial fallout from the COVID-19 pandemic, council reduced the budgeted transfer to capital reserves by $1.9 million.


“Would council like to return to the previously budgeted transfer amounts or would the preference be to phase the transfers back in over a period of time?” said Hughes.


“During the capital budget process, administration will bring back options that will look at both the expenditures from and funding to the capital reserves that will address the short-term impact of reduced funding to reserves.”


Coun. Poole said he believes the municipality should start putting back into that savings account, noting there would be a $10 million backlog if the Town keeps reducing capital reserve contributions each year by about $2 million.


“I would suggest we begin returning to our reserve allocations a chunk like $400,000 a year, and we augment that each year over five years,” he said.


“By the end of five years we’ve come out of the hole so that we’re now looking around, but we’re still halfway in the hole, and it will take another five years after that to get out of the hole,” he added.


“If we do those sorts of detailed things, I think we can manage the big economic crisis we are facing as a community.”


Administration will come back with additional information to a governance and finance committee meeting no later than the end of the third quarter to help council with decisions around service review and budget.


Cathy Ellis

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