Report shows Town's finances in good shape
Okotoks: Provincial analysis shows Town's taxes, spending less that other municipalities
Thursday, Jan 09, 2014 11:58 am
A provincial report is painting a favourable picture of Okotoks’ finances.
Financial information analyzed by the provincial government shows Okotoks’ tax rates and spending are lower than other, comparable municipalities across Alberta.
Coun. Ed Sands said the report shows Okotoks is in good financial shape and the Town has done a good job balancing costs, taxes and saving for the future.
“It says we’re running a tight ship,” said Sands, who is also the chairman of the Town’s budget and finance committee. “We, and previous councils, have done a good job to hold the tax rates low, spending is low.”
The report is compiled by Alberta Municipal Affairs. It compares the financial status of 18 different municipalities across Alberta from the year 2012 to evaluate areas like taxes, debt and municipal spending.
The report shows residential property taxes in Okotoks are below the median and near the bottom the range for the 18 municipalities studied, while taxes on non-residential properties in Okotoks are the lowest in the group.
“Overall, tax rates are significantly below the median for comparable municipalities,” said Wayne Braun, Okotoks financial services manager.
The Town is below the median level on expenses on the whole and when broken down into specific areas like recreation, protective services, transportation and salaries and benefits. He said the Town’s salaries and benefits are 34 per cent below the median and expenses for contracted and contracted services are 15 per cent below the median. The Town is at the bottom of the range on revenues from user fees.
Braun said the report’s findings are meaningful because they come from a third-party source, namely the provincial government.
He said firm controls on spending have helped the Town keep costs to Okotoks residents down, compared to other municipalities.
“There’s a reason why we are there and I personally believe it’s because we’ve controlled costs,” said Braun. “The only way you can have lower taxes is if you have lower costs.”
The challenge will be finding more room to tighten spending.
“From a cost control point of view, we’ve achieved costs savings, the efficiencies are already there,” said Braun. “So the question is then how do we move forward.”
He said it was easy to keep costs controlled under the town’s previous fixed growth model. As the population cap has been lifted, he said the Town needs to prepare for growth and this could result in new expenses.
“You’re seeing some additional staff being added now in order to prepare for the growth model and as we prepare for growth, whether it’s bringing water in by pipeline or the annexation,” said Braun. “All those things are going to add costs, but there will be more assessment out there to cover it.”
One area where the Town doesn’t have as favourable a position is its debt. In 2012, Okotoks’ debt was at 51.1 per cent of the maximum allowed under provincial regulations, well above the median of 33.4 per cent.
Braun said the Town’s higher debt is a result of loans taken out to pay for important infrastructure like the Centennial Arena, 32 Street bridge and the Southridge Emergency Services Facility.
“We’re above the number but that reflects a growing community in need of developing required infrastructure,” he said.
However, Braun added, Okotoks’ debt will improve as the Town isn’t borrowing any money in 2014 and will pay $3 million off its debt this year. As Okotoks continues to grow, Sands said the Town will continue its strong record on fiscal management. He said Okotoks has a long record of ensuring the cost of new development is covered by developers and growth itself and the Town will take the same approach when it comes to building new water infrastructure, such as a water pipeline from Calgary.
“There’s going to be a huge cost to new growth but Okotoks has, for the entire time I’ve been around, done our best to attribute costs of new growth to new growth,” he said.
Coun. Tanya Thorne said the report is enlightening, as a first-term councillor.
“I think our administration has done a good job of maintaining services with out adding significant more bodies in a lot of areas,” she said.
Thorne said Okotoks doesn’t have as large an industrial tax base that other communities may have to help offset residential taxes. However, she said the Town has still been able to keep its taxes competitive.
“We are on par or below a big majority of them in residential taxes,” she said.
As a new councillor, Thorne went into the budget deliberation in the fall thinking recent tax increases were too high and cuts were needed.
However, she said her opinion was changed when he saw the finer details of the Town’s budget.
“It’s not as black and white as saying taxes should be two per cent or whatever number someone might pick,” said Thorne.
She said the Town can always keep looking for ways to save money and be more efficient.