Councilors are expected to provide initial budget approval during it's regular meeting Monday.
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An outline of the next city budget supposed that administrators can eliminate the use of reserve funds to balance its operating budget in 2026, despite boosting direct injection of cash for additional budget items next year.
This week Councillors sat for four hours discussing a 55 recommended proposals to add spending to increase services and new programs or green lit new construction.
On Monday they will be asked for initial approval after debate in regular council session, though elected and administrative officials say more changes could be made in the fall.
“It’s not budget approval (on July 15) but projects will be incorporated into the formal budget proposal that will be put forward for approval later in the year,” said corporate services division head Dennis Egert.
Overall, work on the new two-year financial plan is based on fiscal responsibility but with additions to aid in creating “a more resilient Medicine Hat that is positioned to thrive going into the future,” he said.
That includes reducing direct withdraws from reserve accounts 11 years after the collapse of natural gas production income gutted $24 million out of the city municipal budget.
“This is anchored by our intention to remove that budget gap in 2026,” said budget official Aaron Hoimyr, while describing the relationship between new spending, capital accounts, investment income and reserves for councillors.
The new budget process will continue with four committee of the whole meetings next October and November before a final draft is debated before year end.
“We want residents to understand where their tax dollars are going and that they are getting value for them,” said Hoimyr.
During a two-year tax freeze in 2020 and 2021, the dividend replacement ballooned again above $20 million, but next year the department suggests a $7 million transfer next year will be the last.
The city plans to use $8 million in new recurring investment revenue, and proposed tax hikes near 5 per cent each year.
The elimination, of the “budget gap” would come even as more than $36 million in capital projects, beyond already planned maintenance and infrastructural renewal work is planned – and combined $10.2 million is added in operational spending over two years.
Capital projects have a lesser effect on operating budget, and therefore tax rates, and some operating costs refer to utility projects that affect utility bills, not tax rates.
As well, of the $10.2 million operating total, about $6.1 million is in one-time expenses allocated to operating, though reserve cash could be sourced.
More than half the one-time expense would pay for a $2.6 million development incentive program, as well as $1.1 million for an evaluation and acquisition of under-utilized land toward easing development.
A further $1.14 million is planned for computer systems to modernize and improve the city’s record keeping practises and upgrade cyber security.
Recurring expenses added to the operating budget would total $1.7 million in 2025 and then $2.3 million in 2026, but with some amounts attributed to utility departments.
Administrators told council that includes $300,000 for police officers added to the downtown patrol, improvements to transit and special transit would add $900,000 as ridership rises after cuts were made during the pandemic.
A new “community wellness plan” – promised since 2021 to tackle social issues throughout the city – would require $150,000 in 2025, then another $250,000 in 2026 in operating funds.
A total of 10 new positions would be created it council adopts all of the “recommended items,” including two police officers and a school resource officer, three and a half transit positions, and two positions at the Regional airport.
Within the now proposed 5.6 per cent take increase in 2025, 2.3 percentage points refer to general inflation though departments will be tasks to absorb some level in existing budgets, said Egert.
A further 0.6 points would partly address a budget gap now filled by reserve cash, and 2.2 points to the new items
City’s typically budgets for assessment growth in new construction that would assume some of the burden from existing taxpayers. That figure is estimated at
0.5 points in the next two years.
