The City of Lacombe Administration presented the 2019 Provisional Operating Budget, Capital Budget and 10-year Capital Plans, which are key tools in Council’s Budget process.
Impact on households
The key takeaway for ratepayers is that Council and Administration kept tax increases to the Consumer Price Index (inflation), which this year is 2.8 per cent. For the average household in Lacombe that would be an year increase of $86.94 for 2019. On the operating side, households — if the Budget passes as is — will see an average increase on their utilities of $12.72 per month.
For Capital Projects, the City will will see $6,524,732 in new expenditures — with the funding coming primarily from $3,432,000 million of grant funding and $1,408,000 coming from reserves.
“What we have been able to deliver this year is a really exciting Budget that keeps with this Council’s policy of keeping tax increases to the consumer price index (CPI = inflation), so matching inflation with taxes,” Chief Administrative Officer Matthew Goudy said. “Within that Budget — credit to our staff and Council’s decisions over the last year — we have been able to adhere to all of our policies and meet some of the policies that have been a struggle to meet for the last five years.”
Goudy outlined some of the highlights in the Budget which included adherence to the City’s Compensation Policy, the Training Policy, a higher contribution to the reserves, new playgrounds and the restoration of the Community Builder Fund. Administration also ensured that core infrastructure like water, sewers and roads were respected
Community group funding requests are currently left out of the Provisional Budget, however Goudy said they have left avenues for Council to use if they choose to prioritize community funding including limiting City training and new municipal hires.
“It is a really exciting financial plan for us to be presented to Council and it seems like the reception was warm with Council,” he said.
Long-term funding problematic
The City, along with municipalities in the Province is facing certain troubling issues with long term Capital funding.
Currently, Capital projects are heavily funded through the Province of Alberta’s Municipal Sustainability Initiative (MSI), which is about two per cent of the Provincial Budget and about 10 to 20 per cent of Municipal Budgets. The Province has currently only guaranteed three years of MSI funding, with a potential United Conservative Party government only promising a year of guaranteed funding. Compacting issues, the Province — within the Municipal Government Act (MGA) — has asked municipalities to submit five-year capital plans, meaning that Lacombe and many other communities are submitting plans without guaranteed funding for large-scale projects in the future.
Goudy said their 10-year plan is funded today, but it could be problematic for taxpayers if MSI is pulled.
“If that infrastructure funding is withheld by the Province, and they have not committed to it beyond the three year horizons, these municipalities will be looking at the cancellation of major projects or a significant tax increase to offset,” he said, adding municipalities could see a bump as much as 10 to 20 per cent to their tax rates.
“That will be felt keenly by everyone in the community,” he said.
The City was previously informed that MSI would be addressed in the Fall Session of the Legislature, however that commitment has since been reneged on — meaning the City will continue to operate without guarantees on MSI.
“We have taken the optimistic approach, saying there will be some sort of ongoing commitment,” Goudy said. “There has been a lot of talk about tying revenue to the Province’s revenue so that municipalities are partners in the prosperity of the Province. Conversely, if the Province is in a decline — then we are partners in the poverty of the Province.
“That is a true partner relationship between municipalities and the Province that we don’t feel the current MSI agreement has offered in the past.”
This partnership wouldn’t be necessarily be predictable funding, however the AUMA has said there will be a two-year lag — meaning that municipalities will have time to adjust their capital funding plans.
“There should be some recognition that when things are good in this Province, municipalities are the ones delivering services on the front line to the people of the province. There should be a share in that prosperity,” he said.
Budget Process
Council will now begin working in earnest on the 2019 Budget, making any amendments they feel necessary in the coming months.
“Early November, we have a couple workshops where we will go through the operating and capital budgets in more detail. We also have some public open house for November 15th where we will roll it out to the public and get their feedback on what has been proposed,” Goudy said.
He added, “We (Administration) are excited because we are matching that annual inflation rate and we are confident that will be in the tolerance of the community given that Council’s recent adoption of the taxation policy that targeted that level.”