Morinville town council plans to rethink its budget plans next February in order to head off a future fiscal crunch.
Council voted 5-1 last week in favour of a motion from Coun. Gordon Boddez, one that would have council and administration meet this February to review the town’s expenses, revenues and debts over the next five years. Coun. David Pattison was opposed.
The motion stemmed from concerns Boddez had about the town’s ability to pay down its debt.
Council agreed in 2010 to take out a $3 million loan to pay for the Community Cultural Centre, Boddez noted, and committed to paying it off in five years.
But the town has been draining its operating reserves to do so and would have just $8,210 in reserves next year if council did not change the first draft of the budget, he said.
“What’s going to happen in 2014?” Boddez asked. “Are we going to have the reserves to pick up the difference?”
Resident Paul O’Dea made similar criticisms earlier in the meeting.
The town’s costs continue to rise, O’Dea said, and the town plans to use 99.1 per cent of its operating reserves to cover them this year.
“Are we looking at honking big increases in residential taxes and fees as the go-to solution for 2014?” he asked.
In a series of charts, O’Dea compared Morinville’s tax and staffing rates to those of Westlock, Stony Plain, Spruce Grove, Redwater, St. Albert, Devon and Edmonton.
Morinville had the fourth highest residential tax rate amongst these communities at 6.39 per cent, he said, citing information from Municipal Affairs, and was paying the second most tax per household at $1,764.06, second only to St. Albert at $2,517.54.
The town’s spending on salaries had also jumped 46 per cent in three years, he continued. Despite hiring six people to run the Community Cultural Centre, the town still had the fourth highest number of residents per staff member amongst the eight communities he picked.
“Are Morinville taxpayers receiving the best possible value for tax dollars spent?” he asked.
As he did last year, he called for an external efficiency review of the town’s staffing, one he suggested would cost $150,000.
Boddez noted that he had called for such a review three years ago, but council didn’t do one.
“This is like dĂ©jĹ•-vu for me,” he said.
Coun. Lisa Holmes criticized O’Dea’s comparison as selective.
“When you add in other places that are in the region, like Beaumont and Bon Accord, we are not second highest anymore,” she said.
Calculated on a per person basis, administration noted, Morinville residents paid the third lowest taxes amongst nine communities (the same eight O’Dea used plus Sturgeon County).
Holmes also criticized Boddez for talking about overspending without proposing solutions.
“I’m looking forward to what you’re going to cut,” she said.
Boddez later proposed a $110,000 cut to the economic development officer position, but was voted down.
Pattison asked O’Dea where the town would get the money for his proposed review. O’Dea suggested holding off on hiring an economic development officer until the review was done.
Council then passed a series of cuts to the budget that raised the amount of cash left in the town’s operating reserve to $178,210. Those cuts still have to pass a third and final vote.
Council knew when it took out that loan in 2010 that it would be tight on cash for a few years, Mayor Paul Krauskopf said in an interview, but that it would be virtually debt-free when they paid it off by 2015.
Council could raise taxes more instead of raiding the reserves, he said, but council has always tried to keep tax hikes as low as possible.
“Operating reserves, that’s what they’re there for,” Krauskopf said.
The town did need to lessen the tax burden on residents, he acknowledged, and that means getting more non-residential tax sources.
“You can’t force companies to come here,” he said, adding that an economic development officer could draw more of them to town.
As for an external efficiency review, administration already does those reviews internally, Krauskopf said, and council would join in this February due to Boddez’s motion.
“For what residents pay for taxes, I think they’re getting good value for their dollar,” he said.
Krauskopf also made a move that could put more money into the bank next year, one that was backed by everyone but Boddez. Council had projected a two per cent rise in real assessment in this budget, he noted. Should it rise by more than that come this February (when the town sets its mill rate), he moved to have any excess go into capital reserves for future recreation projects.
Council resumes its budget debate next week.
