St. Albert city council needed just two meetings last week to debate and vote on proposed changes to the 2023 budget, which includes the highest projected property tax increase in over a decade.
The 2023 budget, which won't be formally approved by council until a vote on Dec. 20, includes a projected 5.8 per cent property tax increase, 3.8 per cent utility rate increase, five per cent increase in electrical franchise fees, and an approximate $186-million municipal operating budget.
"This is the hardest budget in 12 years for me," St. Albert Mayor Cathy Heron said.
During last week's budget deliberation meetings, held Nov. 29 and Dec. 1, minor and major changes were made to next year's budget, while multiple motions entailing further changes failed.
Successful motions lowering the impending tax increase for St. Albertans included the approval of using an additional 20 per cent of the city's 2022 assessment growth — the positive difference in tax funds collected from the current year compared to the previous year — to reduce the 2023 property tax rate.
Each year, 25 per cent of the city's assessment growth is automatically used to offset the following year's tax base, but a unanimously passed motion put forward by Coun. Sheena Hughes allows the 20 per cent — $576,700 — of assessment growth earmarked for the stabilization reserve to also be used to reduce the tax rate.
Another motion, also put forward by Hughes, passed by council on Dec. 1 was to reduce the annual 1.5 per cent increase to the city's capital budget in 2023 to a 0.75 per cent increase, and use the remaining 0.75 per cent — $880,600 — to lower the tax rate.
Those measures were countered by another motion put forward by Hughes to not use $1.4 million in one-time funds from the city's stabilization reserve to reduce the tax rate, as planned in the proposed budget. With only Coun. Shelley Biermanski opposed, council voted not to use one-time measures to reduce the tax rate because, Heron said, "it's bad practice to use reserves to artificially lower taxes."
"It's a much more transparent budget and easier to digest from very strictly a financial perspective," Heron said in an interview.
This was the most difficult budget Heron said she has faced in her council career.
"It's such a perfect storm of less money from the province, downloading of services from the province, high inflation, high cost of borrowing rates, we're growing with ever-expanding service expectations, and still kind of recovering from COVID," Heron said.
"It's just a horrible mess that I don't see anything even (changing) in the next year or two."
In an interview, Hughes said using one-time reserve funds would only delay the tax increase.
"It really provides no benefit except for the illusion or the appearance that it's something else," Hughes said. "I did not want to make residents think that we had actually decreased the taxes more than what we had."
"Not ecstatic"
"I'm not ecstatic about where we landed because a 5.8 (per cent) tax increase is significant and it will be difficult for some residents to absorb or manage with that," Coun. Mike Killick said in an interview.
"On the other side, I think we had good deliberation; administration provided really good detailed backgrounders on all of the items and we came in with a budget that addresses this year's needs, and doesn't put us in risk for future years either," Killick said.
Coun. Shelley Biermanski said she thinks council had an opportunity to develop a more taxpayer-friendly budget but failed to do so.
"I'm not happy about the budget," Biermanski said in an interview, adding, "It was just a matter of whether we remove things or not and we didn't remove things so we didn't provide a better budget."
A couple of motions Biermanski put forward which were discussed last week focused on city staffing positions, such as the conversion of two currently temporary executive leadership positions to permanent positions starting next year.
"That was my biggest one, and then a good majority of the other ones were large increases to staffing costs," she said. Biermanski's motion not to fund the two executive positions was defeated with only herself in favour.
"I just didn't see the need to be hiring positions," she said.
Killick, on the other hand, said he firmly believed some of the new positions "were key positions that needed to be filled."
"The city is growing," Killick said. "So that means we have more employees, we have more kind of health issues to deal with, we have more building applications and building permits and regulatory requirements (and) we need support staff to manage that."
During the meeting on Dec. 1, Biermanski and Hughes each withdrew motions to prevent administration from hiring a third full-time financial controller.
According to a backgrounder prepared by Suzanne Findlay, the city's interim director of financial services, the job entails providing "fiscal oversight, financial reporting, and accounting" for every city department.
Hughes asked administration for a clearer picture of the risks of not funding the new position next year. Bill Fletcher, the city's chief administrative officer said, "we are (currently) accepting some risk and I think there's been a couple of occasions where that risk has been caught and mitigated at the last minute, but it was a last-minute catch and it ought not to have been."
Balancing needs
Coun. Ken MacKay told The Gazette it was a "very difficult" budget year for balancing the needs of the city and residents.
"It was tough," MacKay said. "These are tough times and inflationary pressures not only hit our community, our city budget, but they also hit individuals hard."
"Council did the best that we could to balance the needs of the community."
With inflation and cost-of-living pressure in mind, Coun. Natalie Joly put forward a motion that would increase the amount of funds available through the city's Outside Agency Grant Program by $153,000 next year, but the motion failed with herself, Coun. Wes Brodhead, and Mayor Heron in favour.
In a backgrounder written by Craig Cameron, a city parks and recreation manager, Cameron states that the motion would have increased the funds available to distribute next year to $747,738.
The annual grant program provides funds to local non-profits, such as the St. Albert Community Village and Food Bank, to help offset staffing and operating costs. As Joly's motion failed, the funds available to distribute to eligible St. Albert-based non-profits remains at $594,738 next year.
"Eligible funding requests to the 2023 Outside Agency Grant Program total approximately $765,000," Cameron said.
During debate, Joly said "It's a strange time and it calls for a measure that we haven't used in the past."
"I would love to see the province step up on housing and take care of mental health care, but ultimately if they're not, I still feel a responsibility to make sure that our residents are taken care of," Joly said.
Also speaking in debate, Brodhead said he was supporting the motion because the grant program had not been adjusted for inflation, and that one-time additional funding could go along way in supporting vulnerable St. Albertans.
"One of the things I always wrestle with ... is that the need is greater than St. Albert can truly meet, and quite honestly, social issues live in a community, but as it stands right now it's a provincial responsibility to fully address the stated needs," Brodhead said.
"It falls to the municipalities to fill in the gap."
Council will look to approve the 2023 budget on Dec. 20.
