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KID council passes operating budget, 4.5 per cent tax increase

A home in K-Country valued at $530,000 based on 2023 property assessments, will pay about $12 more per month, or $144 annually.

KANANASKIS COUNTRY – Residents of Kananaskis Country will pay an additional 4.5 per cent in municipal taxes this year.

This translates to $12 per month, or $144 annually, based on a home valued at $530,000 in 2023. Kananaskis Improvement District (KID) council passed its 2023-25 operating budget March 21.

Protective services, utilities, and garbage and recycling make up the bulk of the increase, which was kept relatively low, considering the most recent property assessments and inflation rates since KID passed its 2023 interim budget in December.

The initial draft budget was based on an inflation rate determined by the Bank of Canada of 6.9 per cent. The final budget is based on a March 9 Alberta economic outlook report from ATB, which forecasts 2023 inflation rates at 3.9 per cent for the year.

“We are in a different place [now] than we were at the end of last year. There has been some significant work done to find the savings and the opportunities that we haven’t done in the past,” said KID chair Melanie Gnyp at last week's council meeting.

The final 14-page operating budget is pegged at $2.49 million in its first year – an 11 per cent increase over 2022 year-end budget projections, including non-taxation revenues.

Expenditures total $2.56 million in 2023 – an increase of $73,652, or three per cent, compared to 2022 projections. The bulk of new operating costs is for Kananaskis Emergency Services (KES), with an additional $60,471 in 2023, compared to last year. KES provides fire protection and rescue services to residents, businesses, and visitors in KID and has made up for 40 per cent or more of KID’s annual expenses since at least 2020.

“I don’t think it’s any surprise 44 per cent of expenditures in the budget is for our protective services,” said CAO Kieran Dowling, noting trends from past years.  

KES expenditures in 2023 represent a six per cent increase compared to 2022 projected costs, or a 21 per cent increase compared to the 2022 budget. The increase includes adjustments to salaries and wages to better reflect actual EI, CP and WCB amounts, which were under-budgeted by approximately 40 per cent as compared to 2021 end-of-year statements.

Included in salaries are adjustments anticipated in the station officer Alberta Union of Provincial Employees collective agreement. The 2023 budget proposes four full-time permanent station officers, whereas two of these positions were vacant for all, or a portion of 2023, and staffed through backfilling.

The Centre of Excellence's external training program is expected to generate net revenue of $40,000, taking into account the additional expenses related to salaries, equipment, and materials. This calculation reflects the difference between the training program’s revenue and the costs incurred in delivering it.

There are only about 150 residents of the improvement district, according to the 2021 census, but between four to five million people visit K-Country each year. As a result, most local emergency response by KES is required by visitors, with businesses second.

To more evenly disperse taxation relative to levels of services received by residents versus non-residential properties, council introduced a proportional split tax rate policy in 2021. The split acknowledges that KID has a larger commercial property base relative to residential properties, so residential pays 23 per cent of KID’s required taxation revenue, while non-residential properties pay 77 per cent.

For non-residential properties, municipal taxes will rise four per cent compared to 2022. The proportional share of the full taxation requirements for KID for industrial properties is around 33 per cent, while non-industrial commercial properties account for about 44 per cent.

Administration recommended the tax split be maintained over 2023-25, examining implications of increased property assessments and reduced volatility year-over-year.

In 2023, the forecasted net taxation required to fund KID municipal expenses is $1,527,977, up $141,419 (10.2 per cent) compared to the 2022 budget.

The Kananaskis Emergency Services Centre (KESC), which houses KES, also serves as a base of operations for KID council and administration, and the Alberta Parks’ dispatch program for K-Country. The building will cost $130,150 to operate this year, a 16 per cent increase compared to the 2022 budget.

Municipal infrastructure costs, including maintenance of the KESC, garbage, recycling, utilities, transportation, agriculture and other services, make up about 26 per cent of the 2023 budget.

Garbage and recycling costs are down three per cent from 2022 but are forecasted to rise again in 2024 and 2025, at four per cent and six per cent over 2023, respectively. Water utility revenues are 32 per cent lower than forecasted expenditures, at $16,903.

Coun. Anita Szuster asked administration if there was any intent to add a composting service in future years – with no discussion having taken place at council – Dowling noted future plans would require further analysis of potential wildlife conflict.

To allow net neutral operation, administration has recommended updating the water utility rate in 2024, with KID receiving water at no cost from EPCOR. Expenditures are associated with operational maintenance and routine repairs, and deficits in water utility are disbursed by surplus in sewer utility services, which will have an expense of $14,676 and revenue of $52,799 in 2023.

Transportation services, which covers snow and ice removal, minor repairs and maintenance, and other ongoing road servicing by Volker Stevin – Alberta Transportation’s contracted service provider – is set at $105,009 for 2023. This represents a three per cent decrease compared to the 2022 budget or a 12 per cent increase when compared to 2022 year-end projections. The expense is fixed by and paid to Alberta Transportation.

The total cost for KID administrative services is down by about 13 per cent in 2023 from 2022. Anticipated reductions are to professional services, administrative education and training, fleet vehicles and professional memberships, with total expenditures budgeted at $544,314. The next two years, however, will see inflationary increases of 2.3 per cent applied to all administrative expenditures.

Tax stabilization

The operating budget includes notable changes to the use of amortization expenditures and operating contingencies with the goal of stabilizing net taxation revenue year-over-year at a four per cent increase, following a trend council established from 2005-2016.

Nixing its initial plan to draw $150,000 in operating reserves each year over 2023-25 for taxpayer relief, council instead opted to cut contributions to $30,000 in 2023 and $50,000 in 2024, with no contributions forecasted for 2025.

The KID budget and audit committee worked with administration to produce the budget, which instead adds back $42,927 associated with amortization expense collected for non-replaceable tangible capital assets in 2023. Another $58,247 would be added in 2024 and $49,316 in 2025.

According to the budget, this will help support taxation stabilization where operating reserve contributions are reduced.

“It keeps more in the operating contingency available for other council priorities, but it also maintains that connection to the four per cent [tax] trend, an increase that’s been recurring since 2005,” said Dowling, noting there was some fluctuation before and during the COVID-19 pandemic.

Using an interim budget process and waiting to pass the 2023-25 budget until more determining information was available in March proved to be a favourable decision, he added. Council was initially set to return to debate the operating budget earlier in the month, but with the provincial budget having recently been released, they also made revisions for that.

The province doubling its funding contributions to the Municipal Sustainability Initiative (MSI) meant KID added another $18,000 in revenue to its budget.

“Required revenues really turned out to be more favourable due to the rate of inflation, change in MSI operating and the reduction of taxation stabilization, compared to what was presented as the interim operating budget,” said Dowling.

“The additional monies from MSI operating also reduces the required revenue needs, therefore, it also makes an impact on your rate of taxation – which is great.”

As per ministerial order for KID, the 2023 tax rate is final once signed by Minister of Forestry, Parks and Tourism Todd Loewen.

Tax notices are expected to be sent out by May 2023, assuming ministerial approval is received prior to the provincial election.

Several councillors gave kudos to administration and the budget and audit committee for the extra time spent on the budget and in council discussions.

“I’ve sat on council for multiple terms. I’ve been a ratepayer in the valley for 26 years, and I learned more about all of this [at this meeting], than I have in all those years combined – so, thank you,” said Coun. Darren Robinson.

The Local Journalism Initiative is funded by the Government of Canada. The position covers Îyârhe (Stoney) Nakoda First Nation and Kananaskis Country.

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