Lacombe County council found itself wrestling on Thursday with a dilemma most municipalities would welcome: what to do with a big surplus.
The county is booking a $2.7 million surplus from last year, largely because a number of construction projects didn’t complete as planned.
But some councillors were concerned ratepayers would wonder why their taxes are going up when the municipality apparently has more than enough cash in hand to do the job.
County administrators have already tweaked proposed tax rate increases to reflect the good financial picture. An initial 2.75 per cent increase has been downgraded twice and now sits at an average 1.5 per cent increase.
Coun. Brenda Knight wanted to see it reduced even more by shuffling cash from a reserve fund devoted to creating a future boat launch into a tax stabilization fund, which is used to smooth out tax increases and avoid spikes in years of high costs.
Knight suggested an additional $100,000 be shifted into a stabilization fund, on top of $132,000 already put into the fund to reduce taxes.
However, council was warned by staff that making 11th-hour changes to the budget would trigger a new auditor review. That would come up against a provincial government deadline requiring audited municipal finances be submitted by the end of the month.
In light of that wrinkle, McKnight withdrew her motion.
Coun. Rod McDermand said the whole issue of surpluses and where the money goes should be reviewed by council again. There are roads that need upgrading and the county lags behind other rural municipalities in the amount of money invested in broadband Internet coverage, he said.
Coun. Cliff Soper acknowledged the county was in a “unique situation” compared with other municipalities.
“It’s starting to look like there might be expectations we can do everything.”
Bottom line though, the surplus shows the county is managing its money well, he said.
This year, the reserve will be allocated as follows:
• $1.1 million fund to pay for future bridge replacement
• $940,000 for lake access reserve
• $550,000 for operational reserve
• $132,000 for tax stabilization reserve