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Coaldale council discusses draft operations budget

Posted on November 17, 2020 by Sunny South News

By Nikki Jamieson
Sunny South News

A draft budget gave Coaldale town council some insights on their upcoming operations budget for 2021-23.

During a special Nov. 5 council meeting, Kyle Beauchamp, director of corporate service for the town, presented Coaldale town council with a draft budget for 2021.

The budget presentation, which is not the finalized proposed budget for 2021, aimed to provide council with with operational and capital budgeting projections, information on project updates, new requests and financial projections. The presentation was also meant to garner feedback from council so adjustments may be made before the operating and capital budgets come back to council for approval in December. Under the Municipal Government Act, municipalities must pass a three-year operating plan and a five-year capital plan that are revisited and updated each year.

Presenting the draft operating budget, Beauchamp noted there would be several revenue and expose changes between 2020 and 2021. A comparative summary of revenue changes between the 2020 approved and 2021 draft operating budgets are:

  • Investment income: $205,000 lower due to reduced interest rates – Covid
  • User fee revenue: $55,000 lower due to and approximate 20 per cent decrease in use – Covid
  • Utility revenue: $60,000 increase due to increase usage
  • Tax assessment revenue: $190,000 increase due to new assessment growth, and not from tax rate increases or inflation
  • Traffic fines/photo radar revenue: $30,000 decrease due to lower usage – Covid
  • Municipal grant funding: $160,000 increase – various sources
  • Franchise fees: $25,000 increase due to increased usage, although there is no rate changes

A comparison summary of expense changes between the 2020 approved and 2021 draft operating budget are:

  • Salaries, wages and other contracted services: $25,000 savings
  • Lethbridge County annexation payment: $105,000 savings, no longer required as three-year repayment period expired.
  • ORRSC contracted services: $60,000 savings
  • RCMP expense: $100,000 increase
  • Sewer relining program: $100,000 increase, funding 100% through tax support, not reserves, as was the case in 2020
  • Additional funds added to municipal reserves: $87,000 increase
  • Human resources, legislation and legal consultant: $80,000 increase
  • Parks special projects: $50,000 increase for supplies and materials
  • Communications: $30,000 increase for general services

In the draft operating budget for 2021-23, total revenues will fall slightly from 2020 ($19,296,549) to 2023 ($18,688,709). While revenue from taxes, sales and user charges and government transfers revenue are set to increase, revenue from licenses, permits and fees are set to stay the same and revenue from penalty and fines, interest, franchise fees and land sales and transfer from reserves are projected to decrease over the next three years.

For 2021, the draft budget projects total revenues of $18,743,858, which includes $9,037,555 in taxation revenue, $1,494,712 in government transfers and $1,566,000 in interest, franchise fees and land sales.

Total exposes are projected to fall slightly as well between 2020 ($19,296,549) and 2023 ($18,661,593). Salaries, wages and benefits are expected to drop by roughly $70,000 in 2021 before rising again, and government transfer expenses will fall slightly before rising as well. Principal debt repayments will rise slightly before dropping by nearly $300,000 in 2023. Expenses for contracted goods and services, interest on long-term debt and transfers to reserves are set to drop from 2020 levels.

Total expenses for 2021 are projected to be $18,815,009, which includes $6,072,71 in salaries, wages and benefits, $5,358,308 in contracted goods and services and $945,488 in principal debt repayments.

The draft 2021 operating budget is current sitting at a funding deficit of $71,151 if council should decide to approve all requests as presented. This deficit is before any tax, utility or franchise fee increases or adjustments take place, and council would be able to eliminate this deficit through a reduction in expenses or an increase in revenue or some combination of both.

Additionally, both the 2022 and 2023 budgets are in draft form with a projected one per cent residential tax increase and a two per cent non-residential tax increase for each year. These numbers are placeholders and subject to change.

Mayor Kim Craig asked if the draft budget had anticipated any growth in their assessment rate, which Beauchamp said it did include, and it is projected to be about $150,000, a little lower than in the past couple of years. Coun. Roger Hohm asked if they had anything built in to their expected revenues to reflect issues with the pandemic. Beauchamp said they adjusted the anticipated revenues with covid in mind.

“Part of with 2020, we do anticipate a little bit of a surplus,” said Beauchamp. “The exact number isn’t yet known, but part of this budget is we’ve taken some of that surplus and placed a little bit into each of the next three years to kind of help stabilize the revenues as they hopefully recover and rebound from covid.”

Projects and additions to the 2021 operating budget include: $

  • 25,000 for professional human resource services, to help assist in the staff recruitment/hiring process, annual reviews and other human resource needs as needed. All staff would have access to contact, and can request their assistance if needed. This model is $75,000 /year less than the in-house model used in previous years, and is funded through ongoing tax support.
  • $30,000 in additional funding for legislative assistance, to help with the completion of various ongoing projects, including reorganization of the town’s file management system, and is funded through tax support for one year.
  • $24,000 for legislative and legal professional service, to assist with the increasing demand on current staff, and is funded through ongoing tax support.
  • $50,000 for supplies, materials, construction supplies and other expense for the creation of the Parks’Landscaping Division, which will be responsible for the capital aspects of the Town’s green spaces, and is funded through ongoing tax support.

The sewer relining project for 2020 was $200,000. Half of this was funded through tax support, while the other half was funded through reserves. As an area of importance for the Town’s infrastructure, this is now funded 100 per cent through municipal tax support — adding an additional $100,000 to the town’s capital replacement reserves each year.

A two per cent increase budgeted for an ongoing increase to the town’s capital reserves, or a$37,000 increase for 2021, to help build the town’s capital reserves over time, and is funded through ongoing tax support.

A capital replacement/repair fund has been started for the multi-use recreation facility. The annual reserve of $50,000 will accumulate over the years to fund major capital replacements as needed in the future, and is funded through ongoing tax support.

$30,000 allocated the 2021 municipal election for materials, rentals, and other expenses, that is funded through general operating reserve for one year.

$7,000 for the replacement of spray park control panel, to help maintain remote operation of the spray park, and is funded through the spray park reserve fund ($100,000 estimated balance) for one year.

There was a request for a funding increase for the town’s Winter Light festival. Beauchamp stressed they were not looking for formal approval at this time, but it was an opportunity for council to ask questions. There is a current annual budget of $15,000 for the Festival of Lights, and she would like to see that increased to $30,000 annually, to help grow the festival. Last year, an estimated 1,400 visitors attended over nine evenings, and community feedback indicated that they would like the festival to become an annual tradition.

“We are hoping to expand on the tremendous success of the first year of the light festival, by changing the theme of the light festival each year, adding more lights and display and involving more community groups in order to provide the entire community of Coaldale and surrounding area a truly unique winter experience,” said Cindy Hoffman, community services manager for the town.

Last year the festival was the recipient of a community grant. But with approved funding in the budget, the event organizers will no longer need to rely on the community grant for continued growth. Coun. Doreen Lloyd asked if the budget included staff time, which Hoffman said did not.

Craig asked how the pandemic impacted the budget this year. Hoffman said she was sending off the AHS notification with their plan for the festival the next day, and, as they wouldn’t be hosting close-contact activities, their expenses would likely be lower.

Hohm asked about the possibility of collecting donations at the event to help fund it. Hoffman noted last year they had a small donation box at the park, from which they received about $700, and they can look into an online donation method. Additionally, she had also been getting calls from community groups to host evenings, and as they bring their own “goodies”, it will save the town some money, and they are also getting calls from potential sponsors for activities.

Public Works had also submitted a staffing request for a full-time labourer position, which would cost in salary and benefits $51,000 annually. The request is included in the draft budget.

There was also a request for the creation of a compost/branch drop-off site, as in 2020, a yard waste public drop off pilot project was started and the service was well received. However, compliance issues plagued the bins throughout the year in terms of contamination of the bins with garbage and too-large branches. Staffing of the site is required to ensure compliance. Two options were proposed with the first being Yard waste bins at the arena from April-November, with addition staff to monitor the site, at a estimated cost of $50,000. Option two is to relocate the yard waste bins to the lagoon site with less restrictive branch drop off requirements, with one bin for leaves and grass clippings, and piles for branches that can be incorporated into fire training practice, rather than paying for tipping fees, at a cost of $35,000. Costing for either option was not included in the draft budget. Coun. Bill Chapman asked if any of the drop-offs at the bin were from outside of town, as if the town decided to employ and operate this site he wanted to make sure Coaldale residents were put first. Justin MacPherson, director of operational services for the town, said he agreed, and they could track who was using the site and come up with a policy around that.

CAO Kalen Hastings asked if the labour position previously requested would fulfill the requirements of this site, or if it would be a temporary, seasonal worked, which MacPherson said would be the latter.

Hohm noted option 2 looks like it is at the county dump, and asked if they looked at joining forces with the county and cost-sharing the site. Hastings said the town would need to join the waste commission, “which is not an impossibility”, but that entire site is governed through the commission, and joining it is a little more complicated than just cost-sharing on the employee that they have there, although they have talked to other municipalities on how to collaborate on waste management. Hastings asked if council would like administration to come back with a more comprehensive analysis for how to handle overflow waste, organics and recycling and garbage. Chapman, Craig and coun. Briane Simpson voiced support for the idea and exploring options.

Council unanimously passed a motion to direct administration to explore further options of waste management.

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