The Town of Strathmore council has voted to approve the 2022 long term financial plan, corporate business plan, 2022-24 operating budget and 2022-26 capital budget.
The Town’s finances were addressed by the council during a special meeting of council on Nov. 24 which saw each of the areas in question reviewed and clarified prior to the decision to approve.
Chief Administrative Officer Doug Lagore presented the documents to council and opened the floor to discussion and clarified how the process works for the new councilors.
“Administration starts off early in the year and they talk to council about service levels. Do you want to change any service levels? Do you want to increase snow removal, reduce snow removal as example, cut the grass more often in parks, cut it less often, etc,” said Lagore. “If council determines there’s no changes in service levels, your operating budget is pretty well complete. It’s over 90 per cent done and it just needs to be approved because you’re carrying on status quo.”
Lagore added the capital budget proceedings are different than the operating budget, as the former will directly impact local, municipal operations.
“When we get into the capital items, we need to talk about them the method of financing, what’s the impact on operations, etc,” he said.
Council was advised that a decision needed to be made by the end of December so as to avoid impacting the entire municipal organization, as Lagore clarified, from a work plan perspective – being the town’s ability to start projects and get items ready to go to tender.
If a budget was not passed by the end of December, an interim budget would have needed to be passed, which would have put everything on hold until administration redid the budget.
According to the Municipal Government Act (MGA) the Town must have a balanced budget. If there is a deficit for a year, it must then be picked up in the following year.
The Town of Strathmore did not run a deficit in 2021 despite the impacts of COVID-19.
Administration put forward a balanced three-year budget plan which estimates residential and non-residential tax increase of 3.9 and 5.9 per cents respectively.
It was also noted, for a residential property assessed at $350,000, the tax increase would be $10.42 monthly to the property owner. For a non-residential property assessed at the same value, the tax increase would be $20.06 monthly.
“We’re not getting rich, but we are providing in a reasonable way and we hope to increase our reserves and we will do better over a long term,” said Lagore.
Councilor Brent Wiley said he wanted to clarify for the general public what the realistic impact of the raised taxes would look like.
“Probably what people don’t realize at home is, when they hear a tax increase on residential property of 3.9 per cent, they think (their) taxes are going up, but in reality, that’s just keeping in line with inflation,” said Wiley. “Our taxes on non-residential are actually very competitive compared to communities surrounding us,” he said.
Mayor Fule pointed out in 2020, the Town of Strathmore implemented a zero per cent tax increase in order to aid its residents.
“Whenever you do that, you’re forced into a catch-up situation, so that’s kind of where we’re at now. We’ve got to try to keep up with the cost of living,” said Fule.
According to administration, the Town over the last five years has used between $2 – $3 million of reserves to keep local tax rates from going up, in addition to the capital spending that the town typically uses reserves for.
Administration’s proposed budget will see the operating budget increase by roughly five per cent from 2021 going into 2022. The expenses presented for 2022 will equate to $36.4 million according to the document.
Deputy Mayor Jason Montgomery pointed out, the town could technically have left its tax rate as it was and would still see increased revenues as property values increased.
“There’s a bit of a balance between seeking increased revenues from the increase in property taxes and we are raising taxes on top of that,” said Montgomery.
That being established however, he also addressed the town’s unfunded infrastructure liability.
“I believe it’s around $56 million right now. As much as I hate raising taxes, we need to set money aside quite aggressively and this is how we do it,” he said.
Montgomery later suggested in the near future, discussing consistent tax rate increases would be for the benefit of local businesses, as owners would be better able to budget themselves around a regular, steady increase.
The motion to pass the budget and finances as presented, put forward by Councilor Denise Peterson, was passed without opposition.
Details regarding the nuances and specifics of the town’s budget is available online via the Town’s webiste.
John Watson, Local Journalism Initiative Reporter, Strathmore Times