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Unprecedented challenges force council to approve tax and utility rate increases
By Cindy BallanceEditor
Continued challenges with electricity costs, policing needs, ballooned insurance costs and the world economy has forced Okotoks council to approve a four-per-cent increase to municipal property tax rates and increase utility rates.
Council approved the 2002 operating budget at a special meeting held Dec. 10.
'This is a difficult budget,' said finance and budget committee chair and councillor Ed Sands. 'We are faced with huge external pressures this year — provincially, nationally and internationally, over which we have absolutely no control yet they still impact us.'148;
The budget is based on a four-per-cent municipal property tax rate increase (assuming residents see no change in the market value of their home); an estimated reduction in revenues from natural gas and franchise fees; the execution of an electric distribution franchise agreement which includes the implementation of an electric franchise fee of about $3.80 per month to the average resident; and modest increases to rates, fees and charges.
'We have to budget realistically for this stuff now,' said Sands.
The increase means an additional $41 per year on the municipal portion of the property taxes. Council will set the tax rate in April.
Council will struggle in the new year with an estimated increase in electricity costs of about 35 per cent. The Alberta government recently confirmed that the energy rebate program will end Dec. 31, 2001 and therefore, Okotoks will stop receiving the 3.6 cent per kilowatt hour rebate.
'We are seeing the impact of electricity shelters eliminated. That is going to affect the municipality to a tune of $210,000,' explained Sands.
Another challenge for council in setting its 2002 operating budget is policing services. Key initiatives approved by council in September indicated that policing and public safety are the main issues among residents.
Therefore, in order to retain the existing resources, RCMP policing costs will increase about 14 per cent and EMS will increase 13 per cent.
Council explained that the majority of increases are due to salary adjustments.
'There are extremely rigid increased costs in protective services to retain our existing resources,' said Sands. 'The cost per member from K-Division has increased significantly.'
The budget calls for the addition of one RCMP officer to start Sept. 1. It is anticipated that the upcoming G-8 Summit will preclude filling new or vacant positions prior to the summer of 2002.
Increases to utility costs, primarily electricity, will be spread across business centres that operate public facilities. By far the largest impact is on indoor facilities and water and sewer utilities.
According to the town's budget, the water rate will be increased 8.95 per cent; sewer, 8.88 per cent; and refuse, 4.3 per cent. The average resident will be paying about $23 more per year on water and sewer and about $4.44 per year on refuse.
'The difficulty with raising the utility rates is that we have raised them significantly and not a red cent goes to anything to help the utility, to help the Town of Okotoks or to improve the depreciation reserves,' said Sands. 'It all goes out of the community straight into the pockets of the (utility) folks.'
Sands added that increasing the utility rates for these reasons, and not for the benefit of the resident, is his biggest regret in the 2002 operating budget.
The rate increases will be applied equally to residential and non-residential clients.
Sands added that the town's proactive steps in energy conservation measures have greatly assisted the community in recouping some of the lost revenue in electricity. The town has reduced energy consumption by 1.5 million kilowatts per hour saving the town about $210,000 per year.
There has also been a dramatic impact on insurance costs directly related to world events. Council is anticipating a rate increase between 20 and 50 per cent, about $10,000 to $20,000 for the town.
In order to address these challenges and reflect the priorities of residents, the operating budget includes provisions for various increases. Budget highlights are as follows:
- Open spaces —15.515.5 per cent increase ($64,000);
- Information management systems —28.828.8 per cent ($85,000) mainly targeted toward a secondary back-up system server to create a disaster recovery system;
- Fleet reserve increase of approximately $40,000 (this is the second year of a two-year program to bring the fleet reserve into alignment with long-term replacement needs);
- Protective services — RCMP, $92,000; fire —$152,000; bylaw —$40,000; EMS —$26,000; disaster services —$5,000.es &5,000.147;We believe it is a responsible budget. In fact, despite every (struggle) we were able to maintain the reserve contribution for recapitalization and actually increased slightly the reserve contribution for fleet replacement,' said Sands.
Candy cane comfort
Santa and Mrs. Claus attempt to comfort this little one with a candy cane during the Claus' special visit from the North Pole to the Turner Valley Legion Saturday for the annual Children's Christmas party.
- photo by Cindy Ballance
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The budget also includes provision for salary increases for town staff and council effective July 1, 2002. The rate of increase is estimated to be about 3.5 per cent. 'We have used 3.5 per cent as a ball park. The exact figure may vary by July 1,' said Sands.
'We feel it (the salary increases) is fair and reasonable and pulls council into mid-market (compensation),' said municipal manager Will Pearce.
Councillor Bill Robertson made an amendment to the salary grid to eliminate compensation to the deputy mayor and an increase in the mayor's base salary. The amendment was approved.
Robertson said that with council's present challenges he was unable to support those salary adjustments.
