CANMORE – Town of Canmore administration has been given direction to develop preliminary 2021 budgets that do not exceed a three per cent tax increase.
During the Aug. 18 virtual council meeting, mayor and councillors debated for more than an hour on administration’s original recommendation of preparing preliminary operating and capital budgets for next year that wouldn't go beyond a five per cent tax increase over the originally approved 2020 budget.
"Picking a number feels like throwing a dart at the board," said Mayor John Borrowman, who was in support of administration's original recommendation. "I know five per cent will frighten people. They will think we are going crazy, but it is only, in my opinion, a strong indication that council wants to consider every opportunity before making a difficult decision to what the budget will end up at."
There are several steps to take before the 2021 budget gets final approval – including an administrative review in October, a finance committee meeting in November and an interim budget and utility rate approval in December.
The final budget is expected to be approved in February 2021.
But that didn't stop council from debating which direction to take as the impacts of the COVID-19 pandemic are facing the mountain municipality.
Councillor Vi Sandford put forward the recommendation to decrease the five per cent maximum increase to a three per cent maximum.
"All of Alberta is struggling right now," Sandford said. "I think given our circumstances, all of us will be feeling some of this pain and may have some things to give up ... I also know there will be more COVID impacts."
But Borrowman said if the maximum percentage increase was reduced for a preliminary budget council would not "get the full picture."
"If council supports the amending motion then we are starving ourselves of the full picture ...we can arbitrarily, we have in the past, say to admin: 'No come back with a different budget' and just cut $1 million out," Borowman said.
"It's a terrible way to prepare a budget and it's been done…I would prefer not to support the change, as I want to see the biggest picture possible before deciding what to cut."
Councillor Rob Seeley said he believed three per cent was a more reasonable starting point.
"If we start at five, I think it is hard to cut," he said.
Councillor Joanna McCallum agreed with Borrowman that it is easier to see the bigger picture first – and then cut.
"Councillor Sandford, I was originally prepared to support this motion, but then you reminded me of the government we have provincially in place right now and I feel like we have not seen the end of what is going to be downloaded to municipalities this fiscal year," McCallum said.
"Because of that, I am tending to lean towards the mayor's suggestion of having a larger picture, which would encompass whatever new surprises our government might have in store for us."
During the presentation, general manager of corporate services Therese Rogers and manager of finance Chelsey Richardson brought up some unknowns for 2021, noting budget pressures include how to phase in increased policing costs, which are expected to increase three per cent in 2022 due to population growth, and the potential loss of $105,000 to $110,000 annually if the provincial government cancels linear taxes.
"Our actions are regularly compared to those in other communities, even though our circumstances are often quite different in each location ... in summary, there is pressure to do more with less," Rogers said.
During the discussion, Councillor Esme Comfort said she noticed the province seemed to be downloading more to municipalities.
"We have to expect the absolute worst, although politics is a funny game … We can't rely on this government and we have to rely on ourselves," she said.
Councillor Jeff Hilstad said he understood both recommendations for the direction of the preliminary budget.
"I think no matter where we end up today, there is a further debate to be had ... but I think it is easier to add than cut," Hilstad said.
Councillor Karen Marra admitted it was a tough choice.
"I know our community is expecting some cutbacks, so yes, I think we should pull a three per cent and see what admin comes back with and hear from administration, who is working hard right now," she said.
Coun. McCallum said council would be shooting itself in the foot if it chooses the three per cent maximum option.
"Those things over three per cent, you won't actually see – that is what we are trying to say ... you won't see it. It won't be provided to us. No one will see them. Where if we go with the five per cent then we can reduce down to two or three or four but we will be blind to those other possibilities if we choose the three per cent," McCallum said.
In a tight vote, Sandford, Hilstad, Comfort, Marra and Seeley voted in favour of a three per cent maximum increase for the preliminary budget, with McCallum and Borrowman opposed.
Council also unanimously directed administration to prepare preliminary operating budget plans for 2022 and 2023 that do not exceed a five per cent tax increase each year.
NEW COVID BUDGET
During the same budget development direction discussion, a new COVID-19 cost contingency budget was created.
Administration initially recommended council include a COVID-19 cost contingency in the 2021 budget, but Coun. McCallum successfully made an amendment asking the contingency be outside the 2020 budget.
"It basically gives administration [the power] to show us a how to choose your own adventure," she said.
Borrowman said if the second budget for the contingency was approved, council could perhaps look at a tax increase of more than three per cent.
"The contingency is there as a back-up if things go off the rails ... it is not necessarily something we are expecting to spend 100 per cent, but it is there for a health and safety perspective," McCallum said.
Coun. McCallum gave examples of some Alberta municipalities receiving additional money from the government for COVID-19 response, such as mask measures.
"The Town might receive more funding and save in some services," McCallum said.
Coun. Sandford said supporting a new budget for a contingency could leave everything up in the air.
"If we had to go into reserves it would be part of funding sources, however, if there is not enough money to cover the need of the COVID response, and I'm expecting more COVID response required, we will have to consider whether or not we agree where that funding source will be," Sandford said.
All of council was in favour of creating a new COVID-19 contingency budget, except Coun. Rob Seeley who voted in opposition.
