Town of Ponoka

Town proposes 4% tax increase

Unless there is a major disaster in the area, town residents and businesses can expect to see an approximate four per cent tax hike in 2017.

Unless there is a major disaster in the area, town residents and businesses can expect to see an approximate four per cent tax hike in 2017.

That number came after three gruelling days of budget discussions Nov. 1 and 2 and then on Nov. 7 with council and administration coming up with some solid numbers for the draft interim budget.

Line by line staff and councillors looked at every single part of the proposed budget while directors looked specifically into their areas. As deliberations continued the proposed line items would change. Originally the proposal was to present a 10 per cent tax increase, something council was not eager to see.

Getting to a four per cent increase, about $236,000 in total town revenues, was no easy task as the town had to consider a major shortfall in its electrical revenues of $660,000. That shortfall came from the downturn in the economy and a drop in electricity usage.

As the town owns its electrical distribution, in recent years planners have used the revenues to help offset overall operations costs, some of that in staffing. This has occurred for some years now but appears to have caught up with the town due to large companies in the community not having any production. That revenue has been reduced to a projected amount of $290,000.

Going from $1 million short to a balanced budget

The overall shortfall was around $1 million with administration looking at ways to streamline operations and council providing direction for areas it felt could be adjusted.

Much of that discussion came Nov. 1 and 2. For Coun. Carla Prediger the biggest issue the town faces is its drop in revenues. “In every department there has been a significant decrease in revenues.”

“There’s no income supporting service levels,” she added.

Over the years, however, previous councils and administrations brought forward low tax increases, offered Gulka. Ponoka sits relatively low compared to tax rates across the province.

“We have a history of trying to keep taxes so low that it’s finally coming back to us,” said Gulka.

Sandra Lund, director of corporate services, made a calculation for the last five years. If the town had kept a standard five per cent increase from 2012 to 2016, there would be an additional $800,000 in revenues.

Bonnett is against a high tax increase. “We’ve gotta do our cuts internally first.”

For Gulka the real question is about residents’ understanding what the increase means.

Per household a four per cent tax increase would cost a home $82 more annually if assessed at $300,000 and a commercial business would pay $107 if assessed at $300,000.

“You’ve gotta talk to those people that have lost their jobs though,” he added.

In an interview Flootman did add that the community assets do need to be taken care of. If there are cuts to operations, which affect certain levels of service, those plans would need to be revisited after a time. On the flip side of that, if service levels are increased for residents then operations costs will also increase.

Prediger said it is up to each department to find the efficiencies needed to lower the proposed 10 per cent rate. There was also some discussion about dropping training for staff to help find reduce operations costs.

Bonnett allowed resident Vern Dick a chance to speak (he was one of two residents in attendance Nov. 1 and 2). He suggested council and administration have a tough job ahead but recommended not to lose out on valuable training.

He suggested that maybe there are ways municipalities can work together to train employees.

Going from 5 % to 4%

With budget discussions continuing Nov. 7, administration returned with a proposed five per cent increase reducing costs in all town departments.

Lund added that sitting down and looking at every budget line was a positive way to find efficiencies, which ended up reducing operations costs by $293,000. “It was a good exercise.”

Finding a way to reduce costs with no revenue to support the operations proved a challenge. Gulka feels if services are getting cut then a plan needs to be made to explain to residents why those cuts were made. Underhill replied that council will need to speak on operations issues. She said that having a standalone fire department is something council will have to answer to.

Bonnett suggested one way to reduce the tax increase is for out of scope (non-union) staff to take a reduction in its pay. He recommended a two per cent pay cut for both out of scope staff and councillors. Prediger spoke against the suggestion stating that the biggest money comes out of the union wages.

With the town coming into negotiations next year for union wages that will also be a variable for the budget. Out of scope staff have introduced a wage freeze plus no increase to the consumer price index and no Step Increases to salaries.

The proposed budget also sees a five per cent increase in sanitary and sewer fees to residents’ bills. If a bill is at $50, a resident will see that increase to $52.50.

Council did go into two separate in-camera sessions (Nov. 2 and 7) to discuss personnel items related to the budget but it does not appear that any direction was given from those sessions.

Coun. Tim Falkiner did not attend the three meetings while Coun. Underhill attended the first and the third. Coun. Lyon attended the third meeting via conference call.

 

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