Talks are underway for Okotoks’ 2017 budget, but the Town is treading carefully in a weak economy.
Guidelines for the Okotoks 2017 budget were laid out by finance and systems director Rolland Russell during council’s Sept. 12 meeting.
The Town is targeting for a tax increase of no more than two per cent, he said.
“That two per cent falls squarely between the 2016 MPI (municipal price index) estimate of 1.4 and the 2017 projected estimate of 3.3,” said Russell.
He said the non-residential tax differential is recommended to remain at 38 per cent above the residential rate. In addition, he recommended no subsidies from municipal taxes go to requisitions for schools, the Foothills Foundation or the library.
In 2015, provincial requisitions contributed to a tax increase of 3.2 per cent after council had approved an increase of 1.6 per cent of the municipal share of taxes.
Coun. Tanya Thorn said the budget guidelines should provide the Town with good parameters to build a decent budget in a tumultuous economy.
“I think there’s a few things we’re going to need to seriously look at, but I think it’s reasonable with where we are in an economic situation right now,” said Thorn, who is also chair of the Town’s finance and budget committee.
She said the Town needs to identify what its needs and wants are in order to make difficult decisions on how to prioritize projects and make the most of the budget.
The upcoming year will see some major expenses, which she said won’t impact municipal taxes, but will need to be factored into the Town’s capital budget. One of those items is regional water pipeline funding.
“That’s an element that is going to need to be seriously looked at for our 2017 budget,” said Thorn.
The town will also have to start thinking about the effects annexation will have on its overall budget, she said. Annexation-driven projects, such as land-use planning and master planning, will be significant and need to be looked at in the budget, she said.
“We’re very much of the mandate that growth will pay for growth, not our current tax base,” said Thorn.
She said the Town needs to be cognizant through the budgeting process of assessment values in the community. Although they are calculated months after budgeting is complete, she said keeping an eye on housing values is important this year.
“I think we’re going to have to watch what happens with assessment values here in our community in the next four or five months,” said Thorn. “We certainly haven’t seen a drop in real estate values in Okotoks like they’ve seen in Calgary.”
She said the perception is that assessment values and housing prices are going down, but not necessarily in the Okotoks market, where there is still limited supply and high demand. While housing prices don’t dictate assessment values, she said it’s still important to keep an eye on the market to ensure that a two per cent increase doesn’t suddenly spike in the spring.
Overall she said the guidelines are fair and a two per cent tax increase is manageable, and in keeping with general inflation rates.
“I’m looking forward to seeing what comes forward for budget presentations this year,” said Thorn. “I know we’re definitely looking hard at how many projects we can or can’t take on and the financial impact of all of those.”
