Mayor Ted Clugston says the city's year-end budget update will introduce the largest cuts in the history of Medicine Hat.--NEWS FILE PHOTO
cgallant@medicinehatnews.com@CollinGallant
Mayor Ted Clugston says the “biggest cuts in the history of the city” budget will be outlined at a council meeting in early December before final budget amendments are decided later in the month.
That statement came after Monday’s council meeting where a number of fees were increased in hopes of recovering more of the cost of service.
Earlier this fall, finance officials told a committee that a budget process to cut costs and boost revenue would be accelerated, but also they would target a zero per cent tax increase while also expecting lower income in other areas.
“We’re trying to find a balanced approach, but you’ll see a budget presentation in December that’s a really good teaser about what we’re talking about,” said Clugston.
“It’s the most massive cuts in the history of the city budget on a percentage basis.”
The current 2019-2022 city budget was approved in late 2018, but each year an update and amendments are presented at the final council meeting of the calendar.
The earlier outline, on Dec. 7 this year, will lay out department-by-department targets for cost cutting, said Clugston, and each will see reduced amounts.
“Some will be very specific, some are administrative, and our call for early retirements will be a big one,” he said, referring to the ongoing offer of between 50 and 100 early retirement packages to the city’s 1,100-person workforce.
Clugston said recreation facilities and fleet services could be featured prominently, but didn’t expand.
“You’ll see some controversial and some non-controversial cuts,” he said.
The approved budget calls for tax increases in the range of 4 per cent each year to help erase a budget gap created when natural gas dividends to the municipal budget were suspended.
The 2020 increase was suspended this year when council approved extra reserve spending as a COVID relief package, but that will be applied in 2021.
Together with previous cost cuts, officials had managed to reduce spending from reserves to about $15 million in 2019.
However, that grew this year, and with the effects of COVID on city expense and revenue, plus the spectre of more cuts in the provincial budget, officials project a $27-million gap in 2021 without action.
At last year’s budget presentation, finance officials said they were embarking on a series of non-public costs, such as renegotiating insurance and fuel contracts.
More recent financial statements show the city saved considerable amounts of cash this spring when the price of gasoline and diesel plummeted.
This month council agreed to a host of fee adjustments that added six per cent to business licences and building permit fees, as well as increases to tax penalties and appeal costs.
Utility budgets reduced
Councillors lauded utility department officials this week for halving projected rate increases for 2021.
They expect average monthly bills to rise by $4.75 combined for water, sewer, trash collection as well as gas and power delivery.
That’s compared to initial projections of an $8.58-combined monthly increase.
The difference comes from “austerity revisions” to capital and operational spending, a wage freeze and altered sales forecasts.
Council members praised staff efforts to limit the increase, and referred to accompanying material that places Medicine Hat utility bills below the average of other four comparable cities in Alberta, including Calgary, Edmonton, Lethbridge and Red Deer.
