BANFF – Banff’s politicians plan to cut the municipal property tax levy by 17 per cent compared to 2019 to help residents and businesses during the COVID-19 pandemic.
To do this, council plans to cut $1.3 million in wages and benefits and another $1.37 million in service levels, as well as split $687,492 of the municipality’s $1.28 million surplus over 2020 and 2021.
In addition, the planned $4.7 million transfer to capital reserves will be reduced by almost $2 million with about $250,000 going to top up the budget stabilization fund, bringing the undedicated balance in the so-called rainy day account to about $828,000.
Mayor Karen Sorensen said she believes the municipality will need a nest egg given the uncertainty surrounding COVID-19, including the unexpected announcement by the provincial government for a staged reopening of the economy perhaps as early as Thursday (May 14).
“We may be relaunching and people are going to start coming to town sooner than we thought … I’m concerned about having a nest egg in case we need to hire back a little faster than we thought,” she said at council's Monday (May 11) meeting.
“I, for one, believe there may be a need to hold some money back with the intention that we may need summer staff to help us monitor the streets or staff to educate visitors, or educational checkstops just to show people where to park. I see a need for bodies.”
Officials with Banff & Lake Louise Hospitality Association (BLLHA) say they appreciate the thoughtful and detailed consideration of additional budget measures, noting a lot of time and effort went into this.
“That said, we are concerned that the 17.09 per cent reduction in the municipal tax levy may still not be enough given the severity of this crisis,” said Darren Reeder, the group’s executive director, noting BLLHA had called for a 30 per cent reduction.
“It is important to remember that while there is no predictable path to recovery, one thing remains certain: if we do not use the full extent of municipal powers to help ensure the liquidity of our commercial sector during this crisis, all of the town’s future year capital and operating assumptions become a bit of a moot point.”
BLLHA is hopeful that the Federation of Canadian Municipalities’ recent call for $10 billion in targeted emergency operating funding finds some traction with the federal government.
“(We hope) this translates to additional tax relief for Banff ratepayers,” said Reeder.
The Town of Banff's $1.4 million cuts to wages and benefits is a result of a hiring freeze, elimination of performances-based increases, reduced hours of work and overtime requirements, and a stronger focus on reducing overtime.
In total, 71 employees are impacted by these reductions in wages and benefits, which represents 36 per cent of current staff levels. A further 43 positions that were budgeted for will not be hired.
Mayor Sorensen said wages and benefits are about eight per cent lower than originally planned for in the 2020 operating budget.
“My heart goes out to those staff who have been personally impacted because we are reducing service levels in different areas,” she said.
“Some of you also still continue to work full time, many, many hours because we still need clean water and we still need the town to operate as a municipality.”
Councillor Brian Standish agreed with the approach council was taking to lower the tax levy by 17 per cent.
“Our job as town councillors is to govern the Town of Banff and to do this we need to be diligent, we need to use common sense and we need to trust our intuition,” he said.
“We also need to understand that we can’t fix this economic fallout in a one-year budget, or even a three-year budget cycle. This recovery will and has to be a gradual process.”
Coun. Peter Poole was also in favour of council’s decision; however, he pointed out there are implications to reducing the capital reserve transfer by almost $2 million over the next 10 years.
“The Town over many years has had a tremendously strong capital reserve plan and going ahead we’re going to have to rebuild that, and this year and probably next year, we’re not going to be able to rebuild as much as we’d like,” he said.
“It also means that consequences of any future capital expenditures, which add to our burden of capital reserves payments, we have to look at them very, very carefully … even though they may not affect the tax burden in that specific year.”
Poole said it is important to continue putting away capital funds to support the basic functions of the townsite, but it will mean discriminating between projects that are needed versus those considered wants.
“We’ll have to be more careful on some of the more discretionary, optional requests,” he said.
“As a result, I support this currently, and in fall, I will be looking at how to make further trims so we can be careful as we go forward over the next 10 years.”
Chris Hughes, the Town of Banff’s corporate services director, said he believes there’s a great benefit to splitting the $687,492 surplus over 2020 and 2021, as well as topping up the budget stabilization reserve with some of the money previously meant to go to capital reserves.
“It adds some tools for us as we need to respond to the reopening and requests similar to what we've seen earlier today,” he said, referring to a call form the business community to pedestrianize the 100 and 200 blocks of Banff Avenue.
“Going into the 2021 budget process, it gives us a few more tools to allow us to minimize a big requirement for tax increases next year.”
Administration looked at all programs and services included in the 2020 budget to find cuts, which included elimination of the $60,000 Calgary-Banff On-It transit and cancellation of $140,000 Canada Day festivities among others.
Specifically related to the fallout of COVID-19, the Town is expecting a drop in municipal enforcement fine revenue of $559,100 and reduction in RCMP fine revenue of $179,800. There is also predicted to be a $1 million drop in revenue for water and sewer consumption and a net loss from recreation facilities of $137,613.
There’s an estimated $157,000 in additional expenses related to dealing with the new coronavirus pandemic, including $100,000 for additional communication costs and $10,000 on contracted services for the emergency coordination centre.
At its April 16 meeting, council directed administration to defer $12.7 million worth of capital spending into 2021 or beyond – and found another $1.27 million worth of savings from 2020 projects.
The proposed amendments to both budgets will be brought back to council for final approval later this month.
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