While there were many suggestions on the table this week to change the 2016 capital and operating budget, all but one failed to gain full consensus and as a result, council has asked administration to return with suggestions that would reduce the amount of taxes that are collected next year.
Mayor John Borrowman set a target of 4.8 per cent as the level of municipal property tax increase he is comfortable with and the budget in front of council with all priorities included was at a 6.8 per cent increase.
With all levies, franchise fees, utility rates and contributions to external organizations like Canmore Community Housing Corporation factored in – the average property valued at $750,000 would see a municipal tax increase of $207 for the year. The municipal property tax represents $120 of that, but only represents half of the overall tax bill as the Town collects the education requisition for the provincial government.
A 4.8 per cent municipal tax increase would result in an $85 increase on an average property valued at $750,000. Every one per cent or municipal property taxes equals just under $200,000 in revenue.
“I think we can be reasonably optimistic administration can pull that off,” said the mayor.
Having a target amount to define the budget, said Chief Administrative Officer Lisa de Soto, is helpful for administration.
“Defining the envelope is helpful,” she said. “If we know what council is comfortable with and we know your priorities, we will bring back a budget that fits that.”
Councillor Vi Sandford said she is concerned about the economy in general and would prefer to not increase property taxes by a significant amount.
“In terms of economic times, there is a lot of uncertainty in the economy right now and in the coming year our residents are going to feel those uncertainties,” Sandford said.
Coun. Sean Krausert recognized deciding on a municipal tax rate is challenging because council wants to minimize increases and at the same time provide services, which costs money.
“The 6.8 per cent increase is definitely out of my comfort zone,” he said. “But it also very much depends on how we get there and there are some things that I would really like to see happen.”
Coun. Joanna McCallum agreed the tax increase should be below five per cent, and commended administration for a “no nonsense budget” that also addresses council’s priorities.
“There aren’t any frills in here,” she said. “All the proposed enhancements are things that are going to get us to our goals and they are common sense goals.”
McCallum, however, cautioned against continuing to reduce the amount of money put into reserves each year as part of the methodology to keep taxes low.
“We are robbing our reserves to get to a magic number,” she said. “I think we have to start putting money back into our savings account to plan for more common sense goals we have coming down the pipe in the next 10 years. “We are not in trouble, but we will be in trouble if we continue to do this.”
Reserve balances were an issue of importance for all council and administration. Manager of finance Katherine Van Kiempema went over the subject of reserves during a previous budget committee meeting.
Van Kiempema recommended council establish defined targets for reserve contributions, as well as establish two new reserves for asset replacement ($200,000) and flood maintenance reserve ($50,000).
The general municipal operating reserve has a target of $6 million, or 20 per cent of annual expenditures and, according to the budget, 2016 should have a balance of $4 million. General capital reserve also has a target of $6 million and in 2015 its balance is $3.97 million and will increase to an expected $8.5 million in 2016.
