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Canmore finance committee gets sneak peak at 2023-24 operating plans

“Any changes we may look at as part of the previous finance committee motions or anything else might have a ripple effect for those two years. We did want to go through to see what goes through for the five per cent tax increase in each of those years."

CANMORE – Only weeks after going through the 2022 proposed operating and capital budgets for the Town of Canmore, council got a picture of what to expect coming down the pipeline.

Town council was briefed on potential expenses in the coming years with a look at the 2023-24 operating plan.

The overview was at a higher level since the committee was only adopting the operating plan opposed to approving anything.

“Any changes we may look at as part of the previous finance committee motions or anything else might have a ripple effect for those two years. We did want to go through to see what goes through for the five per cent tax increase in each of those years,” said Chelsey Richardson, the Town’s manager of finance.

The finance committee recommended council adopt the 2023-24 operating plan at its Dec. 14 budget meeting.

While all members of the finance committee are on council, the committee operates at an arm's length from council with the Town’s CAO serving as the co-chair. Council has final approval, so nothing recommended by the committee is set in stone.

In the 2023 financial plan, staff are projecting an increase in revenue from franchise fees and revenue from recreation and planning. However, they’re also estimating increases in four new firefighters for $290,000, an extra $245,000 for the RCMP contract and $470,000 for debt servicing the fire hall.

The financial plan for 2024 estimates increases in franchise fees, recreation and planning revenue. The cost-of-living increases are projected to see extra expenses of $253,000, a further $100,000 for power and gas costs and $75,000 for the library due to possibly inflation.

However, the cost-of-living adjustments (COLA) are forecasted at 1.5 per cent, but have doubled in the past year.

Coun. Wade Graham asked if it would be better served to use the existing three per cent COLA in projecting the 2023-24 operating plan.

“It is forecasted inflation will be significantly more and I think we have a pretty good understanding of why that is,” he said.

Richardson told the committee staff’s general practice is to use a consistent number for COLA rather than tweaking in the operating plan and when the operating budget comes forward to use the most up-to-date information.

She added when the plan looks at fuel, power and gas it is forecasted with the most recent information, so it could also have the most recent COLA information.

Town CAO Lisa de Soto said going forward staff could use the most up-to-date figures for COLA forecasting. It would add an extra $250,000 to the 2023 plan, meaning an extra one per cent to the budget. In 2024, it would mean an additional $253,000 for another one per cent to the budget line.

“We could change that in the plan because it is a plan and potentially should reflect reasonable information that we have,” she said. “The initial budget guidelines back in June didn’t anticipate that kind of inflation growth, so we had to put that to bed. That is something we could amend going forward in the expectation that it is likely to be higher.”

Mayor Sean Krausert noted the cap for the tax increase from 2022-24 has been set at five per cent, so if the inflation factors leading to a higher COLA estimate are considered it will mean something has to come out or be reduced of the operating plan.

“Realistically, we should be including the three per cent cost of living is likely to be the minimum inflationary increase on all predictions I’ve read have said inflation is growing and will continue to grow,” de Soto said. “It will put us in a challenging position. I can’t speak arbitrarily to what we need to reduce to bring it to five per cent.”

The committee examined holding the line at five per cent in the operating plan, but factors such as inflation, the upcoming service level review and council’s discussion on its strategic plan early in 2022 will see the operating plan temporarily go over the cap and look at before the 2023 budget.

“We can’t get too tied up with the subsequent years because we’re not crystal ball readers,” Krausert said.

The Municipal Government Act stipulates Albertan municipalities are not permitted to have a deficit, so any expenses have to be budgeted to receive some form of revenue.

Staff have told council any changes to the budget – either additions or cuts – that is $260,000 represents a one per cent change.

However, Richardson said in 2023 that could increase to about $280,000 for one per cent of the budget and closer to $300,000 in 2024.

She noted as services grow, so too will future budgets.

The operating budget that was proposed to council earlier in November is $61.2 million, an increase of $3.4 million from the 2021 budget.

The proposed capital budget for Canmore is $27 million in 2022, with the fire station on Palliser Trail taking up $14.65 million. However, staff told council they received confirmation the $800,000 renovation of the Canmore RCMP detachment does not have to be paid by the town and will be removed from the budget.