City budget requires 2.5% tax hike, new council hears

By COLLIN GALLANT on November 16, 2021.

cgallant@medicinehatnews.com@CollinGallant

The 2022 city budget calls for a 2.5% tax increase – essentially the first hike in three years – and will take up the task of balancing the city budget as a matter of thirds.

Last year administrators were asked to remove the final $7.8 million in dividends from the municipal operating budget for this year. That would end any reliance on gas and power revenue, which has been unpredictable or non-existent in the case of gas since 2014.

The document presented Monday shows tax increases would cover inflationary pressure, while the budget gap would be filled one third in new revenue, one third in new spending cuts and the remaining pulled from city’s bank accounts, each equal to about $2.5 million.

The entire municipal budget would increase by about 6% to $124.5 million.

Next year will be the last in the 2019-2022 budget cycle, which had originally called for 4% tax increases each year.

In mid-2020 however, council voted to put $4 million more from reserves into the budget to flatten tax hikes as a so-called “COVID relief” package. Last year approved a near $15-million raft of spending cuts and financial changes to keep rates at 2019 levels.

At the same time they called on budget authors to cut another $8 million in spending to accomplish a “financially fit” budget goal of eliminating $24 million in dividend income over 10 years from operational spending by phasing in cuts, tax increases and using reserve cash as bridge funding.

An “Accelerated Financially Fit” process, approved in late 2020, called officials to balance the budget without raising taxes or using reserve cash five years ahead of schedule.

Budget officials say they are on track to save the $14.8 million in cuts for 2021.

Utility rates change

Utility rate changes introduced at city council on Monday would see the average residential user pay about $3.28 more per month in 2022.

That equates to a 1.5% increase over all five utility categories, but three-quarters of the increase is related to sewer fee changes, or about $2.68 more in an average month.

Other changes and monthly averages are electric distribution (up 55-cents to $47.45 per month), gas distribution (down 65-cents, $40.78), water (up 46-cents, $46.89), and garbage collection (up 24-cents, $27.42).

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