Coun. Cassi Hider introduces the 2023-24 city budget at council's Monday meeting. After discussions at three previous meetings, council passed the financial plan with limited debate.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
It was a silent night, comparatively, as council passed the 2023-24 city budget Monday with limited discussion after three marathon sessions this fall for councillors to probe and debate the two-year fiscal plan.
The $136.6-million annual municipal operation plan was adopted by a 9-0 vote, with utilities and capital budgets also earning unanimous support.
The only major amendment was agreed to last week, as a motion by Coun. Shila Sharps delaying some hiring, but doesn’t necessarily affect the financial aspects, council heard.
“Overall we asked a lot of questions and got a lot of information,” Mayor Linnsie Clark told reporters following the process. “I’m looking forward to the new year and setting some corporate objectives and starting to measure our progress.”
The budget comes with four per cent tax increases in each year, along with higher utility fees and higher franchise fees that flows into municipal coffers.
That, along with increased investment income and some reserve cash, will balance the budget.
Coun. Robert Dumanowski said the big question from the public this fall has revolved around raising taxes while the city collects record revenue from power sales.
According to the reserves plan, an $83-million dividend from commodity businesses will flow to reserve funds for capital projects and the Heritage Savings Reserve, which could begin paying a dividend to fund municipal operations in 2025.
“We’ve had a significant windfall year in utilities (revenue), and people want to know how that fits in with higher taxes and fees,” Dumanowski told council during discussion.
“(Heritage reserve) literally catches funds from the legacy utilities – we’re not hoarding it away from the public. It’s being held and invested and it will come back soon in the form of a dividend.”
That five-year-old fund was created as an infrastructure endowment from unusually high utility profits, but grew faster than expected.
This year the finance department will essentially double the fund to sit at $151 million at year end. Officials believe that if current returns hold, the fund could by 2025 provide a stable return of 3 per cent plus inflation, and produce a $5-million annual payout to offset taxes.
As the current budget stands, $11 million in reserve spending will be required to balance the budget next year, then $6 million in 2024, but no reserve withdrawals after that.
Coun. Ramona said she was proud of the utility’s financial results and proud to put money away for the future.
City finance officials presented the two-year budget on Nov. 7, and council held a special “Committee of the Whole” meeting to hear detailed presentations. That process carried over for the two last meetings, including Dec. 5 when council voted to pause the hiring of several non-emergency, non-utility positions until a new top city administrator was hired.
The budget suggested adding 27 new positions at a cost of $2.5 million, while overall wage inflation was expected to rise by $2.5 million over the two year period
The capital construction program totals about $87 million, mainly for infrastructure rehabilitation programs, over the two years, with a total of $34 million in new borrowing.
To pay for added expenses, including a general inflationary forecast, budgeters suggested a 4 per cent tax increase in both 2023 and 2024.
The expected effect on the median residential property is calculated at $109 more per year. Average home utility fees will rise by about $11 per month in 2023 and $8 in 2024.
“It is a difficult time, and council is very aware that a four per cent tax increase is difficult to take,” said Clark. “We’re going to consistently push to find savings where we can, but it’s not clear that the community wants city service levels to be reduced.
“If that changes, we’ll re-evaluate.”
