Deputy Mayor Cassi Hider chairs Monday's city council meeting at Medicine Hat city hall. Mayor Linnsie Clark attended via video conferencing as the final draft of the 2025-2026 city budget was presented.--News Photo Collin Gallant
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Two additions to the next city budget could trigger cuts elsewhere, councillors said Monday as they took up the final draft of the next two-year plan late into the evening.
Final discussion was still taking place at press time, but a final vote on the proposal will come at council’s final meeting before year end, Dec. 16.
If passed as presented, property owners would face a 5.6 per cent tax increase in both 2025 and 2026 to bring in about $5 million in tax revenue more each year – money needed, say administrators, to balance a budget stressed by inflation and dropping power sales revenue.
The figure also includes using double the tax hike value in reserve cash to fill a structural deficit.
Councillors have signalled they want a lower tax increase, while also appearing accepting of adding $250,000 per year for HALO air rescue operations, and a smaller, reserve-funded commitment to regional flood projects.
“These are two investments that are frankly, life and limb, public safety, though they are additions to the budget and it’ll have to percolate,” said Coun. Darren Hirsch following presentations on HALO and the Southern Regional Stormwater Committee.
Staffers brought a final version after changes at six special meetings of council this spring and fall.
Further amendments could be introduced at the next meeting, but the budget must be passed and in place by Jan. 1.
Finance officials say changes to water, sewer and solid waste collection, as well as gas and power delivery, would add $3 per month to the average homeowner’s bill.
That’s due to the elimination of recycling pickup fees, while water charges will increase.
A tax increase of 5.6 per cent would add $10 per month on the municipal portion to the average residential property tax bill.
Compounded, annual bills would be $260 higher in 2026.
“We’ve made significant effort to keep taxes low, but are fighting an uphill battle against inflation, lower revenue and slower (economic) growth,” budget presenter Aaron Hoimyr said during an overview.
In terms of new operating costs, $1.4 million in new one-time operating spending is planned in 2025. That includes $450,000 for the city clerk’s office to conduct the 2025 municipal election and largely cover costs of hand-counting ballot regulations imposed by the province.
Otherwise administrators say they have offset non-salary inflationary costs by telling department managers to absorb all but “unavoidable” cost increases within existing budgets from 2024. Any raises from new union contracts would be added as budget amendments, said Hoimyr.
Over the course of two years, three net job positions will be eliminated overall, even as the Medicine Hat police add three officers to staff a downtown unit.
A further workforce adjustment is planned in 2025 after a “service level” survey aims to save $2 million per year starting in 2026.
The tax increase will bring in about $5 million more in tax revenue annually to fund the city budget, from $84.2 million this year to $89.2 million next.
Over two years, a total of $17.5 million in straight transfer of reserve cash will be needed to balance the budget, on top of $10 million in new delineated tax-subsidizing investment income, and $6 million in regulated utility dividends.
The documents presented Monday are available on the city’s “Shape Your City” budget website, including departmental business plans, cost pressure data and capital project case-by-case information on recommended and deferred.
The final version also includes a $100,000 expense in 2025 for the cost of the Municipal Affairs audit of council procedures approved in the fall.
A potential request for municipal funding for HALO regional air rescue could be reduced each year but extended further into the future, though essentially remaining the same as an original ask for funding.
HALO executive director Paul Carolan addressed council Monday asking that a grant be $250,000 per year for six more years.
“Having the city behind us for a longer amount of time is actually beneficial,” he said, noting his group had originally asked for a total of $2.5 million over five years in 2023, and the total is the same but over eight years.
Council had approved $500,000 annual grants for last year and this year from reserves, but also that future amounts would go through the general budget.
City budget authors had left the grant out of early drafts, pointing to council’s ability to re-insert it.
“It’s was critical to have the City of Medicine Hat at the table with us in talks with the other municipal partners and the government of Alberta,” said Carolan, who said advanced talks are ongoing with the province about dispatch call-outs that could improve activity, as will new agreements with the city’s police and fire departments.
“(Funding) is a piece of the puzzle that will keep HALO operating in the region for years to come.”
Also of note, council heard that supporting the Regional Drainage Committee’s goal of spurring projects on the St. Mary Irrigation canal system, which terminates in the Seven Persons Creek, could add $146,000 per year to a co-pay scheme to fund seven construction projects.
That, along with a $400,000 initial payment for an ongoing project, would initially be paid out of money remaining from the city’s berm budget stemming from he 2013 flood.
“The focus, rightly so, has been on river flooding, and now funding for upstream flood mitigation … is a worthwhile endeavour,” said Coun. Alison Van Dyke, who sits on the committee.
Former SMRID chair Gary Franz addressed council in favour of the potential agreement.
