July 18th, 2018

Is there still a Medicine Hat Advantage? Council candidates give their take

By Collin Gallant on October 14, 2017.


A question at a mayoral debate has council candidates similarly split about how to define the Medicine Hat advantage, how to keep it, or how to get it back.

Entering the final weekend before Monday’s municipal election, the News surveyed candidates about how property taxes and utility fees should be used to address falling energy income.

The issue arises after incumbent mayoral candidate Ted Clugston this week challenged his opponents to give their opinion of the utility fee that isn’t currently charged locally.

He said the Municipal Consent Access Fee was an example of the Medicine Hat Advantage.

However, council members were split 5-4 this year against adding the fee that could have raised millions to fill a structural gap in the city budget.

A new energy dividend formula in 2014 essentially eliminated dividends of $24 million per year and this year, $19 million in reserve cash is being used to balance the budget.

Adding the charge was proposed as a “lever” in the financially fit budget plan to cut costs and raise new revenue. Without income from the fee, council will either have to raise taxes in future years or cut spending.

Most incumbent councillors — even those who voted against the new fee this year — say it may need to be considered alongside cost containment to balance revenue and expenses.

Challengers, on the other hand, squarely say cost-cutting is the answer.

Candidate Bill Cocks, the utility committee chair last term, argued for the fee, which he said would help preserve city reserves by closing the budget gap more quickly.

He said during the campaign that Hatters enjoy one of the lowest tax rates and utility rates combined, giving some room to adjust both while avoiding major service cuts.

“It’s a balancing act,” said Cocks this week. “(The access fee) is a part of fees in all other jurisdictions. Hopefully we could impose something while still keeping the overall rate at a very low level.”

Incumbents Jim Turner and Les Pearson were on opposite sides of the council vote on the fee but said Thursday it needs to remain an option as the 10-year budget plan moves forward.

The gravity of the city’s budget situation means adding some fees while cutting costs is needed, said Pearson.

Former aldermen seeking re-election, Darren Hirsch and Phil Turnbull, say they prefer cuts to tax increases.

The ability to control local fees is an advantage in itself, Hirsch said.

Candidate Hugh English, as well, said caution is required when adjusting fees.

“For all intents and purpose a fee and a tax are the same thing,” said candidate Hugh English, adding he felt low utility charges are a better selling point to potential new industry.

“Yes, there’s revenue there, but it might be at too high a cost.”

Candidate Myles Mulholland also said low utilities are too big a selling point for potential business expansion.

“We should not sacrifice such an edge on cuts due to poor decisions and financial mismanagement by previous councils,” he told the News.

First-time candidate Leslie Rath said he entered this race to oppose tax increases.

“The utility should be able to get along without raising bills every year,” he said.

Candidate Immanuel Moritz said, “Raising taxes or fees should be a last resort because there is room in the budgets for efficiencies.”

Incumbent Julie Friesen voted against the move at council stating that lowering tax subsidy of city programs by improving cost recovery is a better answer.

“Utilities are something everyone has to pay, but with things like user fees, only the people who use the service pay,” she said. “I thought it was too much (of an increase) at one time.”

Candidate Robert Dumanowski said taxes and fees need to be options for overcoming such a large amount of money but council considers their effects carefully.

“Some levers are more sensitive,” said Dumanowski, who voted in favour of the fee that would be charged to all utility customers, including renters, rather than property owners.

“It’s is as equitable as it gets. We often talk about the taxpayer and the rate payer being the same person, but sometimes they are not.”

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