CANMORE – The Town of Canmore will use its tax stabilization reserve in 2021 to mitigate the financial effect of COVID-19 on its operating budget.
The reserve fund, a rainy day savings account of sorts, currently has $6.4 million in it. Over the past decade, council has been using annual surplus amounts to increase the reserve balance and save up for unexpected situations like it finds itself in now due to the pandemic.
At a recent finance committee meeting, general manager of corporate services Therese Rogers provided council an overview of the work by administration to prepare next year's budgets, including plans to use the reserve.
"The biggest impact on revenue, really is because of COVID, and that is recreational revenue, facility rentals and leases, which are expected to have a significant decrease as we continue in this COVID world," Rogers said. "We are currently estimating that impact to be $1.5 million and that is a reduction in revenue.
"To address that COVID impact on this decrease in recreation revenue, administration is proposing a draw from the tax stabilization reserve."
Rogers went through the various other ways COVID has affected revenues, as there were both lost and increased revenues as a result of the pandemic.
Fine revenues were up by $885,000 and the funding for the RCMP is expected to increase next year also, as a result of a renegotiated contract. Other third party affiliate funding, like the library and museum for example, is predicted to be $37,000 less than in 2020.
Roam transit has requested an increase of $110,000 to its requisition, while the newly approved service levels for snow clearing resulted in a $60,000 increase to the contract with Volker Stevin.
New growth in the community is estimated to result in an increase in municipal property tax revenue of $400,000.
"As in previous years, the planning department has done an analysis of building permit activity and our assessor evaluated the impact of building permits on assessed value," Rogers said.
Administration put forward $211,000 in the budget for cost of living increases, at a 1.3 per cent rate set to the consumer price index for Calgary.
However, Rogers said there are no performance-based increases for staff included in the budget for 2021.
"We greatly value the Town staff and really appreciate the work they have done during this pandemic," she said. "But with so many of our own staff and so many of our community members laid off and significantly impacted by COVID, we have removed the performance pay – it is just not appropriate this year."
Council directed administration to prepare a 2021 operating budget based on the approved 2020 budget, with a three per cent cap to the proposed increase to municipal tax rates.
However, because this spring council chose to hold municipal property taxes to the 2019 rates, taxpayers are looking at a potential 7.8 per cent overall increase next year. That is because the 2020 budget had a 4.8 per cent increase to municipal taxes.
Rogers said a one per cent tax increase equals $248,000 in revenue and asked council to confirm that it still supports that direction.
Mayor John Borrowman and councillors reiterated their support for that direction and the overview of the proposed 2021 operating and capital budgets.
Borrowman noted, however, that council's direction does not necessarily mean it will ultimately approve a 7.8 per cent municipal tax increase.
"My preference right now is to continue with the direction as given, so we can go into that final decision making fully informed, both on the cost of moving forward with the important work we have put on the table and to understand what the tax impacts to individual residents might be," he said.
"If there is a need, or an appetite to approve a reduced budget, we will still be able to do that when this comes forward, regardless of the direction today or previously."
In the spring, council directed administration to reduce its transfers to reserves to help offset the budget effects of COVID. Administration is proposing to restore those funds through a $2.25 million transfer to reserves next year.
"This level of reserve transfer just funds the capital plan we will be bringing," Rogers said. "It does not allow us to start to save up for future expansion – we are really holding steady."
She added the capital budget contains projects focused on asset rehabilitation and replacement. That includes a new firehall along Palliser Trail.
Rogers went through the projects being proposed for 2021 to meet the strategic priorities set out by council. That includes establishing paid parking in the downtown core and possibly in other locations that saw increased visitation like at Quarry Lake, as well as two seasonal bylaw peace officer positions.
Council established a tourism task force this year and there is $80,000 proposed in the budget to fund its work to have a community conversation on the future of sustainable tourism for Canmore.
Council approved an increase to franchise fees and Rogers said administration will be coming forward with a policy on what those revenues should be used for. The projects would be connected to achieving outcomes from Canmore's climate action plan and includes making the climate change coordinator position permanent.
Currently the full-time position is funded through a grant from the Federation of Canadian Municipalities.
The budget also includes moving forward with plans to establish a commercial organics diversion program, which was supposed to happen in 2020, but was cancelled due to COVID.
