CANMORE – Canmore's elected officials are considering a $57.8 million operating budget in 2021 and a 8.1 per cent municipal property tax increase.
Council began its budget deliberations through its finance committee meetings beginning on Jan. 5. Previously, councillors had set a direction for administration to prepare a budget that did not exceed a 8.1 per cent municipal property tax increase.
General manager of corporate services Therese Rogers said there have been reductions in all departments to prepare the 2021 operating budget.
"This budget that you will see today is really a business as usual type of budget," Rogers said. "COVID-19 has had a significant impact on the preparation of this budget and council's strategic priorities.
"Across the organization, all departments have reduced their budgets in training, education, travel, conferences, hosting and supplies."
The overall operating budget, including utilities and solid waste services, includes $19.8 million for salaries, wages and benefits. That includes a 1.3 per cent or $211,000 cost of living increase, said Rogers; however, there are no performance based pay increases included in the budget.
She said there were $75,000 in salary adjustments included in the budget, to bring the Town's pay grids in line with other municipal pay grids.
Canmore also budgets for savings from slippage, or when a position is not immediately filled and the budgeted salary is not being paid. In 2021, there is an expectation that administration will find $570,000 worth of savings through slippage.
As for COVID-19, council directed administration to fund lost revenues and additional expenses without using taxes. As a result, Rogers said the budget includes a $600,000 transfer from the tax stabilization reserve to cover those costs.
The overall proposed operating budget includes $26.9 million in revenues from municipal taxes, $21.5 million from sales and rentals, $2.6 million from permits and fines, $1.4 million from grants and $3.9 million from transfers and other sources.
In terms of expenses, the proposed budget includes $4.5 million borrowing costs, $15.6 million in contracted services, $3.8 million in supplies and energy costs, $7.7 million in transfers to reserves and $1.6 million in funding for affiliated organizations.
Insurance costs are going up, noted Rogers, with increases to premiums and increased costs to the new assets owned by the municipality.
As for transfers to reserves, Rogers noted that council scrapped those from the 2020 budget in order to reduce the municipal property tax rate last year to zero. In the 2021 budget, she said administration included the 2020 and 2021 funding amounts for those transfers.
Rogers said while many budget line items in 2021 have been reduced due to COVID, like travel and hosting, in 2022 and 2023 those budget amounts begin to brought back into the budget.
"We are making the assumption we will be in a post-COVID environment for the plans we put together for 2022 and 2023," she said, adding the reduction to this year's budget was $260,000 or one per cent in property taxes.
One significant change proposed by administration moving forward was with respect to how franchise fees are allocated in the budget each year.
In 2020, council approved an increase to the Fortis and ATCO franchise fees, with administration expected to return with a new policy on how those revenues would be spent.
Up until the current proposed budget, franchise fees flowed into general revenues and supported the overall operating budget. Manager of financial services Chelsey Richardson recommended a new allocation model, approved by council at the beginning of January.
In 2021, the two franchise fees are estimated to bring in $2.9 million in revenues. The new allocation model will see those funds split between three priorities: funding for the capital budget ($1.2 million), funding for the asset rehabilitation and replacement reserve ($1.6 million) and climate action initiatives ($147,250).
"Given the recent changes, we looked at the fees and the desire to address climate actions initiatives," Richardson said. "Administration has completely revised the allocation model with what we are proposing now.
"What we are proposing is that franchise fees be used in their entirety to support capital requirements and climate action initiatives."
The transfer to capital was calculated as five per cent of the previous year's taxation, she added, and those funds would be prioritized over drawing from reserves for capital projects. Five per cent of franchise fees would also go toward the climate action program, increasing by one percentage point per year until it reaches 10 per cent.
"This portion of it is planned to be used to fund 75 per cent of the climate change specialist position with the remainder going to a new sustainability reserve," Richardson said.
The climate change specialist position is funded until March 2021 by grants received through the Federation of Canadian Municipalities. Afterwards, it is proposed that the franchise fees are used to fund that position.
Chief Administrative Officer Lisa de Soto said both the asset replacement and sustainability reserve are important to addressing climate action initiatives.
Many projects that could achieve climate action are large infrastructure projects, she said, like fleet replacement, transportation, organics diversion and solar.
"It is really important that sustaining our assets moving forward is done with climate action as a lense and we intent to do that," de Soto said. "It requires the main allocation of the franchise fees to that reserve as a result."
She also said by using franchise fees to fund the capital budget, administration is proposing to eliminate the transfer to capital from municipal property taxes.
General manager of municipal infrastructure Whitney Smithers said the sustainability reserve would provide funds to pilot projects, or do the groundwork for projects that could reduce emissions or improve efficiency.
"We really saw the reserve as an incubator space to pilot new projects and test new ideas, with the intent being those ideas or applications would be operationalized," Smithers said.
Being able to use franchise fees to accomplish climate action initiatives was welcomed by Coun. Vi Sandford.
"I like the breakdown of where the money is going and, as it was mentioned, some of the assets we have to rehabilitate are going to be good candidates for working with climate action opportunities," Sandford said.
