Mayor Linnsie Clark argued against staff narrowing down a list of proposed spending projects in the 2025-26 city budget, saying council should debate the individual merits, during council's meeting on Monday. -- News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
City budget talks stalled on Monday as council members discussed how best to pare down a proposed tax hike in 2025 and 2026 while determining what should remain or be cut from a list of new spending items.
Two recent committee of the whole meetings saw council members sit for hours as staffers went through new capital and operational projects administrators are recommending as growth opportunities.
On Monday, finance officials were hoping for some indication of support so they could begin finalizing the larger budget draft in the fall.
Council members, however, rejected the idea of informal polling on the list of 55 recommended items, and instead they want administrators to provide analysis of what could be provided at what level of property tax increase.
Coun. Robert Dumanowski said the debate should focus budget discussion toward a lower rate change.
“I hope it’s a catalyst that gets us to a number that we all can be happy with,” he said, before Council members eventually called on staff to provide a slimmer list that would deliver a lower tax rate adjustment, which is due later this summer.
Mayor Linnsie Clark, however, argued several times during the two-hour discussion, that evaluating, approving or differing projects meant to further council’s strategic plan is council’s responsibility
“It’s a set of puzzle pieces, and I think those discussions need to happen at this table,” she said, noting that about $900,000 in added spending or cuts translates to about a 1 per cent increase or reduction in property tax bills.
“It’s part of our job. We have some wrestling to do with what we think is important and what’s the number for spending and tax rates. That could happen at another meeting.
“That happened in budget assumption (meetings this winter), but there are moving pieces.”
Ongoing costs, the use of reserve funds to offset tax revenue and other measures were discussed at length on Monday.
“We’re in an affordability crisis, and I’m not comfortable with some of the items that seem like wants, not needs,” said Coun. Alison Van Dyke, who also stressed there are items on the list and existing funding that shouldn’t be sacrificed.
Budget officials said they are looking for some level of approval for a list of more than 80 projects, which includes 55 that re-recommended at a cost of $36 million in capital spending and $9 million in mostly one-time operating expense.
Most ongoing operating expense, which most greatly affects tax rate, is comprised of new police officers, money to expansion of transit and special transit operations and measures for the Medicine Hat Regional Airport.
Staffers have said that the tax increase, now estimated at 5.6 per cent, would be needed to absorb general inflation (2.3 points), shrink a budget revenue gap now being covered by reserves (0.6 points), pay for the final growth list (2.2 points). A half point would be covered by assessment growth.
Coun. Shila Sharp moved that three sets of options for batch approval be drawn up to get the overall increase to 3, 3.5 and 4 per cent.
Other councillors noted 3 per cent wouldn’t be possible only considering new spending items, and eventually that motion calls on staff to provide a new list of ranked projects that staff consider critical, but bring down the expected rate hike below 5.6 per cent.
“The presentations are great, but I’m not aligned with a 5.6 per cent (proposed property tax increase),” said Sharps.
City manager Ann Mitchell said the message is clear that council wants to lower the proposed tax rate, but administrators are attempting to give council a clear picture of new spending in a new process.
“It’s very difficult for council to get there arms around exactly what those projects are and what we want to do.. and get some clear direction,” she said. “This is a different budget process, and we heard feedback about the last budget process, so we’re trying to make is as user friendly as possible.
Finance division head Dennis Egert said that “to wait until September for a partial list would put us behind” in the budget process that must be completed by year end and will continue in October with discussions of general spending.
“I appreciated staff trying to move the ball down the field,” said Coun. Darren Hirsch, who argued that a budget tightening exercise over the last term seems to have been lost.
“We went through financially fit and I feel that it’s gone,” he said.
Coun. Andy McGrogan said he is confident that a workforce study now underway could provide savings to offset spending. That would become clear in the fall.
Coun. Robins, Hider, and Knodel said council should decide the goalposts, then let administrators rank projects and come back to council before four more budget-specific “committee of the whole” meetings in late October and early November.
