December 17th, 2017

City must replace transit money

By Collin Gallant on November 21, 2017.

NEWS FILE PHOTO A bus pulls out of the Medicine Hat Tranist parkade in this file photo taken in April. City council on Monday debated the ways it can cover the costs that won't be saved with the decision to revert back to the old system. Switching to the new system, which was abandoned just weeks after it came into effect, would have saved about $650,000.

The city’s transit system will be back to its old self next week but council will have to figure how to cover costs not saved by April when the tax rate is due.

Members debated the issue Monday, with a majority of councillors seemingly supporting the idea of using money from reserves next year rather than a tax increase of one per cent, then hopefully finding offsetting savings down the road.

Coun. Phil Turnbull campaigned on finding savings rather than increasing taxes and said, while a 2018 budget is set, reserve cash is a better option than higher taxes.

“I’m not going to support a five per cent tax increase,” he said, including the already called for four per cent tax increase. “I’m hoping that we, as a council, can find lower ways to operate.”

The entire issue arrived at a committee meeting last week, and a budget amendment was supported 9-0 to cover costs of switching back to old routes on Nov. 27.

But, the 2018 city budget was built with the assumption that $650,000 would be saved. That money — equal to a little less than one per cent of tax revenue — will have to be found elsewhere.

One per cent equates to about $20 on the average household.

The idea seems to gain traction from a majority of councillors, including public services chair Coun. Julie Friesen and Mayor Ted Clugston.

“The silent majority was behind us making (transit) cut — I believe that” said Clugston. “That silent majority might be louder when they hear about budget amendments for $650,000.”

Coun. Jamie McIntosh said that leaning on already strained reserve cash should be a last resort.

“Finding other efficiencies will be priority No. 1,” he said.

Any new changes for transit may not be ready until 2019, administrators said in response to a question from Coun. Kris Samraj.

Under the current budget process, the city is using reserve funds ($17 million next year) to pay the difference between its operating expenses and taxes plus other revenue. The original $23-million gap was created when gas and power profits plummeted and budgeters say cutting a dependence on resource revenue can be done with phased-in tax hikes that would be offset with some higher fees, better cost recovery and budget cuts.

A major cost cut however, was reversed in September after riders and others in the community objected to route changes.

“We’re not going to be fiddling with (transit), but the intent of the motion … was to go back and seek better solutions,” said Friesen.

The September motion to revert back came with the direction of staff to continue studying how to improve the system.

CAO Merete Heggelund said over the next year the division will install an electronic fare system thanks to provincial grants, and improve tracking.

That data will be used to alter the operating plan and hopefully find savings or boost revenue with higher ridership.

Right now, she said, council has sent conflicting messages about what the standard is.

“We’ll present that (data) to council,” she said. “It will be a lot easier to say ‘Here are the levels that council endorses and here’s where we can make improvements.”

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