Morinville town council approved a balanced budget last week, but not before accidentally plunging the town into deficit for about 10 minutes.
After hours of procedural wrangling and debate, council unanimously approved a budget with a 3.5 per cent municipal property tax increase at its Dec. 21 meeting. They also approved a two per cent hike to water and sewer rates. The changes add about $80 in taxes to the average $300,000 home in Morinville and about $22 to the average utility bill.
The budget approves about 14 new staff positions as well as $2.5 million to renovate the town hall ($500,000 from grants, $2 million from loans).
It was also the subject of a protracted debate, one so confusing that it led council to accidentally pass a deficit budget. Fortunately, a quick read through Robert's Rules of Order let them undo that decision and pass a balanced budget.
The process left Mayor Lloyd Bertschi with an apparent headache. "This budget process needs a lot of work," he said, after the final vote.
Capital debate
This year's budget was unusually contentious. Council twice voted down first reading earlier this month, and had made its final approval conditional on getting more information from administration on seven proposed staff positions.
Councillors were divided over the large number of capital projects and new positions in the budget, said Coun. Gordon Boddez in an interview. "This is the first time I've seen so many positions created."
Council had approved second reading of the budget in early December with the condition that only half of the 14 new positions be funded: five staff for the new community cultural centre and two clerks for utility and development permits. It had also trimmed a proposed $2-million loan to renovate town hall.
Director of corporate services Andrew Isbister gave a highly technical explanation of how the town could afford to keep the $2 million loan and the other seven positions in the budget. Those additions would lead to a $293,591 deficit next year, but that deficit was due to interest payments on loans — a short-term capital deficit, not a long-term operational one.
The town would post a surplus in 2012 and 2013 and pay off its town hall loan in 20 years, Isbister said. "In my mind, those [numbers] indicate that the funding of the new positions we've brought forward [is] indeed sustainable."
Councillors Boddez and Lisa Holmes wanted to delay the renovation. "We still don't have the plan we were looking for," Holmes said, noting that the town did not yet have a final design and cost for the renovation. "To me, it makes sense to leave it and defer it to 2012."
Council voted 4-2 to add the renovation to the budget, with Boddez and Holmes opposed.
Mix up
Bertschi then called for a vote on the budget, which passed. However, he soon realized that council had forgotten to remove its condition on seven of the proposed new positions, meaning they were still in limbo, and had not specified how to cover the 2011 deficit, meaning it had approved a deficit budget.
Council made a motion to reconsider the budget, undoing the vote, and moved to pay for the 2011 deficit using operating reserves. It then removed its condition on the seven positions and passed a balanced budget.
Bertschi took the blame for the mix-up. "It was a train wreck with a flaming wheel," he said of the erroneous budget in an interview. "For some reason I couldn't get my handle around it."
Council would start doing three-year budgets in 2011, he said, which should make future budgets easier.
Fourteen new positions is a lot, Bertschi admits, but five of those positions are needed to run the community cultural centre and two are essentially free (as they're funded through permits).
The town has had a hiring freeze in place for years, Bertschi said, and these positions are badly needed. "[Administration] is not just putting these positions in for fun."
Morinville has a reputation for administrative excellence in Alberta, Bertschi said, and needs the staff and resources to maintain it. "If we want to be seen as a leader not only in this region but in this province, there's a cost to that."
Council would hire an architect next year to plan renovations to the town hall, Bertschi said, which is about 40 years old, has faulty ventilation, damaged walls and leaky windows. Actual renovations would likely start in 2012.
The minutes of the budget debate will soon be posted to the town's website.
