Morinville is in “dire” financial straits and needs to get its house in order lest it start down the path to its dissolution as a town.
Morinville council held extensive talks on the town’s proposed 2023 budget Nov. 8.
The budget, if passed in its current form, would hike residential tax rates by 10 per cent. Add in proposed utility hikes, and the typical homeowner would expect to pay $429 more in town taxes and utilities next year under the proposed budget.
Council heard this increase was part of a “maintenance budget” where the town would pay more to get the same level of services.
Coun. Jenn Anheliger was one of several councillors to describe the town’s financial situation as “dire.”
“I feel we are one large infrastructure problem away from having to look at insolvency issues.”
“Dire”? Yes, says CAO
When asked by Coun. Maurice St. Denis if the town’s financial position was dire, town chief administrative officer Naleen Narayan said it certainly looked that way at first glance.
The town was not spending enough on capital to maintain its roads, sewers, and buildings, town financial services manager Travis Nosko explained. (The town needs to spend about $8.4 million a year on capital to maintain its assets, council heard last October; the draft budget spends just $3.25 million.) It also had little in the way of reserves and was using utility surpluses (which were supposed to be used to fund future pipe and sewer replacements) to fund general operations.
“We are on the precipice of having situations where we may not have the funding we need to make the investments in infrastructure we rely on to provide service to the community,” Nosko said.
The province tracks the health of municipalities with a series of indicators, Nosko explained. When a community fails to meet one of those indicators, it raises a metaphorical red flag. Three such flags triggers an investigation into the municipality’s fiscal viability, which can lead to its dissolution. While he didn’t think the town would trigger three flags anytime soon, Nosko said it might trip the one for insufficient infrastructure investment within three years.
Morinville was in a difficult situation, and would need many years to build up the reserves to get out of it, Narayan said.
“Morinville wants to be something special. We don’t have the financial flexibility to do that,” he said.
“We need to get our house in order.”
Calls for cuts
Coun. Stephen Dafoe was one of several councillors to question the six new positions proposed in the budget.
“We’re looking at a 10 per cent tax increase for residents, and these additions are that 10 per cent.”
Narayan, who has been the town’s CAO for just over a month, said he had yet to review the proposed positions in detail, but said his staff believed they were needed to maintain current service levels.
Coun. Rebecca Balanko said the proposed 10 per cent tax increase “scares the hell out of me,” adding that her neighbour of 21 years recently told her that he loved Morinville but could no longer afford to live in it.
“We are taxing him out of a place to live.”
Council told administration to bring to its Nov. 22 meeting a report on creative cost solutions for the town’s community cultural centre and leisure centre, the effects of deferring a utilities master plan to 2024, and a breakdown of salary increases to town staff. They also told staff to eliminate half of the proposed new positions in the budget, review staffing levels at the cultural centre, study reduced operating hours at town facilities, and to find town programs which could be supported by community groups.
Council was to continue debate on the 2023 budget at their Nov. 22 meeting, which would be followed by a budget open house.
Budget documents are available at www.morinville.ca/en/town-hall/budget.aspx.
