Ponoka town council debated the age-old issue of balancing taxes and having enough money in their reserves during their regular meeting on Sept. 13, when the ATCO franchise fee was discussed.
Administration was proposing an increase to the franchise fee rate to 27 per cent from the current 23 per cent.
Coun. Cal David said that although the Town of Ponoka already has one of the lowest franchise fees, he’d like Ponoka to be the lowest.
Coun. Clayton Nelson said while a franchise fee seems like a more equitable tax making the decision before budget time would just look like council was giving themselves a “bump.”
Chief administrative officer Sandra Lund stated it is a more equitable tax because the cost of operating utilities is then spread across all users, as there are a number of users who don’t pay property tax, such as schools, churches and hospitals.
Because ATCO requires a rate request increase by Nov. 1, 2022, council has to decide to up the rate before budget deliberations take place, or forgo another year of an increase.
Administration estimated that increasing the rate to 27 per cent would give the town an additional $578,000 in revenue in 2023.
Coun. Teri underhill said it’s still another increase to residents and some are already spending one-third of their income on housing and utilities and are “clinging to life by the teeth.”
The town increased the franchise fee from 20 per cent to 23 per cent, effective Jan. 1, 2021.
Nelson noted that the town increased the electrical fees last year, and gas the year before and if they were to increase the gas again this year, “that would seem fairly heavy-handed” to him.
“Since I’ve been on council, I’ve seen it everywhere … people are suffering,” said Mayor Kevin Ferguson, adding the town does have an infrastructure deficit, so he does worry about the town not having enough in reserves to make repairs.
“I don’t know what the answer is,” said Ferguson.
Underhill said council needed to come up with a unique solution to the revenue versus reserves issue, and stated that at least if the amount from the franchise fee increase was allocated into an infrastructure reserve, she’d be more comfortable with that.
Lund answered that administration could build a budget based on that request.
Nelson said it was still frustrating having to make the decision ahead of budget time.
‘This one’s tough for me,” he said.
Council voted to table the issue until their next meeting on Sept. 27.