Council mulls lingering budget items ahead of a must-pass Dec. 16 meeting

By Collin Gallant on December 4, 2024.

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cgallant@medicinehatnews.com

City council wants more information on financial implications of giving a direct grant to HALO air rescue, a multi-million-dollar food waste composting facility and recent job additions at city hall before voting on the coming two-year budget.

Councillors discussed the budget until 10:50 p.m. Monday night before making the requests and adjourning final debate on the plan until Dec. 16.

That will be the final meeting before a budget must legally be in place on Jan. 1, 2025, and will also require the final utility rate adjustments be made.

Two most notable points of debate however – a $250,000 annual grant to HALO and the $9.6-million composting plant at the landfill – likely won’t affect a proposed 5.6 per cent tax increase next year and in 2026.

Still, councillors said using reserve funds to fulfil requests from community groups had wider implications, and potential partnership on composting with Redcliff and Cypress County seems to make sense, though landfill staff say otherwise.

“I’m not saying it’s not a good project, it is, but for $9.4 million, let’s talk,” said Coun. Shila Sharps after Monday’s meeting.

Coun. Andy McGrogan also said more work is needed.

“I don’t think we should pass a budget with lingering questions,” McGrogan said regarding the well, but he has also asked for financing plans for Medicine Hat Stampede, which administrators say would be a future amendment, potentially worth $20 million in grants and loans.

“It’s a concern because we’re passing a two-year budget,” he concluded.

Changes to that project would affect utility fees, which are set to rise by about $3 per month next year, according to a proposal that also comes forward Dec. 16.

A $5-million annual increase in tax revenue is needed to maintain operations, absorb inflation and move on several “growth opportunities,” say administrators, while protecting reserve balances with low power profits expected in the mid-term.

Councillors had asked for a lower increase, but appeared generally in favour of the final draft budget, drawn up after almost 30 hours of meetings since the spring.

Coun. Alison Van Dyke said the budget is based on practicality that considers the current affordability crisis in the community.

“The same cost pressures are facing the municipality and we have to deal with that providing services to the community,” she said. “I’m confident that administration will continue to find further efficiencies in the 2026 service level inventory and workforce strategy.”

The budget proposes adding eight positions, but eliminating 11, for a net of three fewer in the 1,100-person municipal workforce.

Mayor Linnsie Clark requested several times Monday a detailed list of positions added during the 2023-24 budget period, though administration says that’s been detailed elsewhere in budget documents and closed meetings.

Coun. Darren Hirsch said he is concerned with increasing requests for operating support from outside agencies, including a request from HALO, now proposed as a $250,000 per year grant, down from $500,000, though over a longer term.

Though supportive of the group, the city may have to cap the amount available to outside agencies, which are “increasingly” asking for operating funds, he said.

“I’m pretty comfortable with it (the overall budget proposal),” he said. “But there will be winners and losers on every line item.”

Coun. Robert Dumanowski indicated he would sponsor the change and requested staff detail the implications, likely to reserve account balances and future investment income.

In terms of the compost facility, the city, Redcliff and Cypress County studied potential collaboration in 2018, but no discernible benefit was found, said solid waste superintendent Jamie Garland.

He told council the city is exploring the idea of drilling a water well nearby to eliminate the need for a $2-million water line in the budget.

This summer, staff outlined that the facility was needed to also process food waste as it is added to the traditional leaves, branch and lawn composting at the city landfill.

The facility also needs to be recertified to meet for volume levels and continue earning carbon offset credits. Those are sold at cost to the power generation division to offset provincial carbon compliance fees there.

Once added operating costs are considered, the facility is expected to show positive net income of $200,000 per year.

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.

A “10-year financial outlook” section, new this year, looks at expectations and uses for reserve funds, which staffers say will be updated and analyzed as major spending proposals come to council.

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