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Banff council passes operating, capital budgets

"We’re not out of the woods and with a global recession potentially impacting Canada’s visitor economy, the Town’s fiscal prudence is lacking.”
Banff Town Hall 1
Banff Town Hall

BANFF  – Banffites will be looking at 11.6 per cent higher taxes this year, with investments in police, fire, expanded transit, increased snow removal and Town of Banff staff.

Town council wrapped up its annual budget deliberations on Jan. 18, voting 6-0 to approve an 11.6 per cent increase on the municipal portion of property tax bills. That includes a last-minute additional one per cent increase of $202,300 to specifically go into reserves – the municipality’s savings account – bringing the total tax funding to capital reserves up to $4.4 million.

While Banff and Lake Louise Hospitality Association (BLLHA) says the Town of Banff's “fiscal prudence is lacking,” several councillors reiterated the importance of reversing the deep 17 per cent tax cuts made in 2020 at the start of the COVID-19  pandemic, which at the time included reduced staff hours, holding back wage increases, and cutting transfers to capital reserves that fund future projects.

Many councillors repeatedly pointed out that the accumulated municipal tax increase over the past four years has been 9.1 per cent, which is less than the cost of living during that same time frame, and that the increase amounts to an extra $11 per month or $132 per year on an average home assessed at $467,100.

“When we look at this budget in isolation from prior years it’s tough, but when we look at it as part of the last four years, it’s really very fair,” said Mayor Corrie DiManno during the final budget meeting on Jan. 18.

The total municipal tax level for 2023 is almost $22.5 million for a total 2023 operating budget of approximately $52.2 million.  A one per cent municipal tax increase raises just over $202,300 in taxes.

Visitor pay parking rates were also increased from $3 to $5 in the peak summer season and from $2 to $4 off-season.

Under the current fee structure, net revenues from pay parking are estimated to be $2.1 million in 2023, $2.14 million in 2024 and $2.17 million in 2025. Hiking the fees will provide another $1.15 million in net revenue in 2023, $1.72 million in 2024 and $1.75 million in 2025.

Council decided to invest revenues from visitor pay parking into increasing service on Banff-Canmore regional transit, expansion of the e-bike program, increased snow removal on Bear Street, two new electric buses and a dedicated bus lane and multi-use trail on Mountain Avenue.

“I believe our future depends on getting visitors out of their cars and onto transit to move throughout our townsite and national park,” said DiManno.

Coming out of the provincially funded economic recovery reserve are additional mitigations for the Banff Avenue pedestrian zone this coming summer and creation of a concept design and community consultation on a permanent downtown pedestrian zone.

Cyber security enhancements falling out of the March 2021 attack on the Town of Banff’s computer systems come with a price tag of $220,000.

Big budget expenses include a 5.4 per cent cost of living wage increases for staff, $821,000 to bring some staff positions in line with other municipalities and new positions to address workloads in at least three departments – finance, communications and IT – as recommended by an independent consultant.

Other new positions include an RCMP officer, fire chief, training-FireSmart officer, and cemetery coordinator. A new full-time municipal enforcement officer is expected to more than pay for itself through associated fine revenue from writing tickets.

Total wages and benefits for the Town of Banff in 2023 are estimated to be $21.6 million.

DiManno said one of her primary filters throughout the 55 hours of service review and budget deliberations has been about building sustainability into the future – and at the top of her list was municipal staff.

She said she understood some residents and businesses in the community may be frustrated or angry by the new Town positions and wage increases, noting new positions aren’t usually palatable to the public at the best of times.

“None of what the Town of Banff does can happen without staff. We can approve service levels and capital projects, but we rely on the team here to make it all a reality,” she said.

“The cost of not investing in our staff could be detrimental to the overall health of the organization and services provided to our community.”

Wanda Bogdane, executive director of Banff and Lake Louise Hospitality Association (BLLHA), said Banff’s service review and budget process was “largely disconnected” from the realities facing Banff’s tourism sector on its long road back to pre-COVID-19 business performance levels.

“While some could be led to believe that the destination’s business performance may be back to normal based on the demand seen during summer 2022, the truth is that the majority of businesses experienced deep losses in the two years preceding this season,” she said.

“Over this time, many piled on pandemic-related debt that could take years to zero-out. Business levels that include high yielding U.S. and international visitors are not expected to normalize for close to another two years. We’re not out of the woods and with a global recession potentially impacting Canada’s visitor economy, the Town’s fiscal prudence is lacking.”

Bogdane said over the years BLLHA has been unwavering that the public sector must follow private sector job creation levels, and that public sector wage growth should follow, not lead, the pace set by the private sector.

The risk with the Town’s expansionary spending, she said, is that it presumes a return to normal and that the uncontrollable risks that the private sector faces everyday – high inflation, high interest rates, broken supply chain – are somehow not relatable to its own budgetary decision-making.   

“It’s troublesome for the private sector that incremental hiring and wage increases in the public sector are largely irrevocable when economic crises arise,” Bogdane said.

“While the private sector is quick to rationalize internal costs to meet those market risks head on, the public sector is seldom as quick with these adjustments, which effectively means commercial and residential ratepayers are on the hook for the long-term effects of perpetually expanding government spending.”

Coun. Ted Christensen, who was not present for the Jan. 18 budget meeting but had a statement read by DiManno, called it a “runaway budget”.

“I see many of the expenditures and associated costs as untenable at this juncture,” he said.

Coun. Barb Pelham was quick to defend the tax increase, saying no other community cut taxes at all, never mind by 17 per cent at the start of the COVID-19 pandemic.

To accomplish that, she said the council of the day agreed to cut Town of Banff employee wages, services, and transfers to reserves by $8 million by the end of 2025.

“We’ve held that line as long as possible, but it simply is not sustainable,” she said, noting Banff’s tax rates remain significantly lower than many Alberta communities.

“We are in a squeeze to catch up on those held-back wages, provide the services that residents need and expect, and resume contributions to our reserves so we can take care of our Banff in the future.”

Coun. Grant Canning didn’t find the double digit increase alarming, noting his municipal taxes in 2019 were $97 per month and will go to $105 a month this year, only $8 a month more than they were four years ago.

On top of that, he said he pays another $75 per month in utility fees for a total of $180 a month for all services and benefits provided by the Town of Banff.

“Let’s put that into perspective. I currently pay $180 a month for my home internet and cable television bill. I pay $100 per month for my cellular phone and data plan.  That doesn’t even take into consideration streaming services,” he said.

“If that’s not good value for money, I don’t know what is.”

The 10-year capital budget includes about $15 million in spending for 2023. It doesn’t contain any major construction projects like the previous years’ pedestrian bridge, St.-Julien Road or Bear Street redevelopments.

There’s $2.8 million set aside for ongoing work on the 10-year redevelopment of the recreation grounds in 2023, which include completion of the multi-purpose pavilion building for recreation users and sports groups. Rec ground projects include a skating rink and adventure playground.

In addition to the $4.4 million tax funding into reserves, other sources of funds budgeted to fund capital reserves in 2023: $4 million in utility fees, $2.4 million from capital grants, $1.3 million debt financing, $123,000 developer levies and $1.25 million in other sources.

Total capital reserves are forecasted to be in a deficit position at the end of 2023 due to the cuts to transfers to reserves in 2020 and 2021. Reserves will return to positive position in 2024 due to a rebuilding of annual transfers.