Town should rethink revenue generation

Tough to plan for budgets in this economic climate - discussed in this week's editorial.

I don’t envy councils nor administrations in the town and county of Ponoka considering the economic climate.

Both groups have had to take a serious look at their organizations’ finances and operations to deal with major losses in revenue.

For Ponoka County the large loss in tax revenue from a major company has certainly added to the concerns. However, the county has also been financially strong and diligent in its budgeting. That hit is going to hurt to say the least regardless of its strong reserves.

The town faced a $1 million overall shortfall in revenue due to its electrical revenue dropping. While the county has been able to cushion the blow, the town has had to take a major look at how it operates and where it can reduce the burden.

This is not an easy spot to be and credit must be given to the financial department for working countless hours, and again with department heads, to find areas that can be cut.

What has happened in the recent past to cause this angst is that town operations have been offset with the electrical revenue earned from the town’s electrical distribution system. Rather than raise taxes in appropriate measures over the years, the modus operandi has been to keep taxes low and use the electrical money to help pay for the difference. We’re talking a major source of income has gone right to spending.

Granted, the current administration inherited this way of doing things and the cracks in the system only happen when things go badly. As they are now.

With Ponoka’s tax rate being generally lower than other communities it is easy to see why we are in this situation and while it is understandable, council should be doing all it can to find a way to ensure administration is doing its best to find efficiencies. Sure, direction was given and both sides looked at ways to help.

What no one seems to want to talk about is the duplication of resources within the community. The big elephant in the room is the separate fire departments we have in this community.

Get this, there are two fire halls in the Town of Ponoka.

Most assuredly there are no easy answers to this problem but to leave the proposed $350,000 operations budget for the Ponoka Fire Department, up aboout $110,000 over 2016, is not doing anyone any favours. Part of the reason the budget is higher is due to having to pay out Ponoka County for certain pieces of equipment.

Add to that the department had to purchase a new rescue truck this year valued at around $380,000 to fully equip it. Sure, that money came from a provincial grant, but it could have been used in other areas the town needs. Ponoka County residents also took a hit with the purchase of new equipment due to the separation.

That’s a lot of money being spent for a duplicate service.

Going over to the county wouldn’t be free either but the first deal was pretty good. Originally the county proposed to take over operations for the next 10 years, assets would belong to the town and capital purchases would be a shared cost with the town having to pay $1,800 per emergency call. Even if the town had 100 calls emergency calls in a year fire alarms wouldn’t count that would be $180,000 cost in operations. Still a far cry from the amount town residents are paying now.

That is certainly one area where efficiencies can be found.

But the truth is town residents have been provided a certain level of service (all departments) that is somewhat unrealistic based on the revenue coming in and now that we are in tough financial times, the town is really feeling the pinch.

Electrical should be treated as a business and the extra money from that operation could be better put to help offset large capital costs, something the town is in great need of. Rather than pay lower than average taxes, a regular increase to help pay for operations should be in place. That last part falls on previous councils.

Our past veneral leaders assumed lower taxes would keep residents happy without any consideration of how this would negatively affect the community in the future. Well, you know what they say about assumptions…

 

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