By Nikki Jamieson
Sunny South News
Coaldale town council has approved the 2021 interim budgets.
During their regular Dec. 14 meeting, Coaldale town council was presented with the draft interim operating and capital budgets for 2021. The budgets won’t be finalized until next spring, when the province sends the town its mill rates. Until then, the interim budgets will allow the town to continue operating until the final budget approvals.
The budgets were previously presented to council during a special Nov. 5 meeting that discussed the contents of the proposed budgets, and the operating budget was further discussed during their regular Nov. 23 meeting.
During that council meeting, they discussed an operating budget deficit of about $75,000, and administration had received some informal direction to explore a reduction in costs and a one per cent increase to both the electrical and gas franchise fee rate, and administration had also looked at the possibility of a zero per cent increase to residential and non-residential taxes for 2021.
Director of Corporate Services Kyle Beauchamp said they were able to reduce the operating budget deficit by $15,000 by way of a reduction of the municipal library levy fee from Chinook Arch and a reduction in line items such as promotion, conferences, subsistence and travel expenses due to event cancellations, leaving a deficit of about $60,000.
Administration had presented two options for council to consider: no franchise fee increase in 2021 and a two per cent franchise fee increase in 2022, or a one per cent franchise fee increase in 2021 and a one per cent increase in 2022.
Beauchamp noted it was considered good practice to implement smaller consistent increases to municipal revenues sources, rather than large periodic increases, as it can make long range planning more difficult. If the town did defer the increase in franchise fees to 2022, council would still need to balance the 2021 budget by drawing $60,000 from the mill rate stabilization reserve, if they went with the first option.
It will take approximately three months for any franchise fee changes to come into effect, so they are bringing forward the 2022 increase to council now for efficiency.
For the second option, the amount of fee increase would be the same in 2022 as it was in the first option, but the rate of increase would be spread out over the two years.
Beauchamp noted that for the draft capital budget, the only thing that would need to be added is a dollar amount for the Gem of the West Museum’s budget, which was left blank to account for council’s decision on a museum item presented earlier in the meeting, for which council approved $140,000 to the 2021 budget.
An additional $40,000 has also been requested for the operating budget for the town to complete phase two of it’s Records Management project, as part of their file management process, which will be funded through operational reserves as a one-time project. Coun. Bill Chapman asked how much was in the stabilization reserve account, and how they can predict their MSI funding for the year. Beauchamp said that the current stabilization reserve account balance was between $500,000-$550,000. As for MSI, the town receives about $260,000 in operating funding a year, and about $1.5-1.6 million in capital funding a year.
“MSI capital is going to expire effective 2021/2022. Part of that, it will transition to a new framework, which is tied specifically to provincial revenues. So as provincial revenues go down or go up, MSI will change for that,” said Beauchamp. “As part of this capital budget, we’ve only budgeted funds from the MSI projects that we know, or anticipate we will receive. No funds from the new framework have been included in this budget just from the uncertainty. The MSI operating, if, say, the province did reduce that or change that, that would have an effect on our budget in the future. The province does issue $30 million through MSI operating each year, and with town’s share being $260,000, if that did change on a proportionate basis, it wouldn’t be anything of significance, with the expectation that the province wouldn’t change that significantly, but that can always change.”
Council unanimously passed motions to approve amendments to the 2020-2024 Capital Plan as presented with an additional $140,000 for museum repairs, and to approve the 2021-2023 Operating Plan with a zero per cent increase in municipal taxes and franchise fees for 2021; and that the operating deficit of $60,000 be funded through the mill rate stabilization reserve; and that council approve a two per cent increase to the municipal franchise fees effective Jan. 1, 2022, along with an additional $40,000 for the Records Management project from operational reserves.
The official budget documents will be released in early 2021.