CANMORE – The Town of Canmore is beginning work on the 2022 budget, with direction to cap any tax increase at no more than five per cent.
The municipality's finance committee also gave the thumbs up to a service level review to better analyze the level of services being brought to the community, particularly with a new council in place after the Oct. 18 election for the next budget.
“A lot of work takes place as councils transition,” Mayor John Borrowman said. “We’ve been doing this work for years and I think we’re up to speed with long-term plans, but it’s important administration have this directive so they can do the work to prepare for a new council to not only get the approvals that are ultimately required by the new council, but will be able to prepare a new council for these discussions.”
While the approval has little impact on the final number that’s still half-a-year away, it provides a ceiling for expectations.
The process would see the budget developed during the summer and drafted during September for the Town’s administration to review in October. The information would return to the finance committee in November – following the municipal election – before council begins discussions in December.
The Town already has to contend with upcoming difficult decisions after the provincial budget saw funding cuts made to the Municipal Sustainability Initiative (MSI), which is a critical aspect in helping fund capital projects.
The MSI will remain until 2023, with the Local Government Fiscal Framework replacing it, but the baseline funding was reduced by about 25 per cent. The drop in funding will mean the money will either have to be found elsewhere or cuts made to local services.
“I do believe with the cuts from the provincial government to our MSI fund, these next few years in transition are going to be incredibly difficult,” said Coun. Joanna McCallum, who brought forward the service review motion. “I believe having as much information and working through these budgets as early as possible is quite prudent so we can try to understand what the fall back is going to be on our community and the members of our community.”
A staff report stated the cap would consider the estimated inflation and allow for flexibility in possible changes to strategic priorities. The Calgary CPI is also estimating a 1.5 per cent cost-of-living adjustment, as well as significant jumps in the cost of building materials for capital projects.
The COVID-19 pandemic has played havoc with the previous two municipal budgets, but with vaccinations improving and the province set to open on July 1, there’s been greater optimism.
“As the pandemic continues and vaccine distribution rolls out, the focus on maintaining essential services and business continuity while allowing for scalability of operations remains a significant priority,” the report highlighted. “There is also uncertainty about what the ongoing impacts of the pandemic will be and what that future may look like however, recent reporting suggests a return to “normal” will begin this summer.”
With the election only months away, the staff report recommended the finance committee only ask for a one-year operating and capital budget next year.
The report also noted the next council will begin strategic planning in early 2022 to establish a new four-year direction from 2023-26. Once the plan is finalized, staff will likely look to return to the multi-year budget approvals.
Council previously approved in February the 2021-23 operating planning summary and the 2021-25 capital planning summary.
The operating planning summary had a proposed budget increase of nine per cent for 2022, meaning several tough decisions on what’s needed and what can wait are ahead.
Therese Rogers, the Town’s general manager of corporate services, noted staff always take a service level lens to the budget, but that “there isn’t four per cent easy cuts within that budget. Service levels would need to be impacted at that level.”
The report stated a one per cent tax increase from the 2021 budget equates to $264,000, meaning a little more than $1 million in savings have to be found.
The last municipal operating budget was $57.8 million budget and a $13.8 million capital budget that came with a 4.5 per cent municipal property tax increase.
The budget was originally proposed for an 8.1 per cent increase, but council used a roughly $1.3 million surplus from last year to offset a more significant increase. For a residential property valued at $700,000 that paid $1,539 in municipal taxes in 2020, it meant an increase of about $69.
The service level review will analyze the services that are used by residents and have the results brought back to the next elected council to debate during budget discussions. However, for any new service that is added, it almost always means additional money is needed to operate.
“We have a lot of groups that lobby us for different levels of service. Every time those levels of service are considered, they have impact on the operations because we can’t just absorb new levels of service every time we’re asked for them,” Coun. Vi Sandford said. “Looking at the service level review concept will give us an idea of how much impact that has on our operations and how much we can actually deliver from our size of our community.”
