Property tax holds steady for 2021
By Sean Feagan, Local Journalism Initiative Reporter
Strathmore town council passed the 2021 budget, which will see no change to municipal taxes this year but increases to utilities and the natural gas franchise fee.
The town’s budget and corporate plan for 2021 was discussed during a special committee of the whole meeting during the evening of Nov. 4. The budget was passed during a subsequent regular council meeting that same night.
The town is presenting a balanced budget for 2021.
Under the budget, town expenses ($34.7 million) exceed revenues ($31.6 million). However, there are three balancing items, including a net transfer of $36,000 into reserves, debt repayments of $2.1 million and a non-cash “add back” of amortization.
The town is projecting an increase in revenue due to government operating funding. The town received an additional $1.6 million of operational stimulus funding from the provincial federal governments. “Without this funding, the Town of Strathmore and nearly every other municipality in the province would have been in dire financial straits,” said Doug Lagore, the town’s interim chief administration officer. “There would have been a substantial deficit to the town as a result of COVID if not for this support.”
The town received about $1.375 million from the province from the Municipal Operating Support Transfer (MOST) for April 1, 2020 to March 31, 2021. Of that amount, $1.2 million was used in 2020 for lost revenue and additional expenses incurred because of the COVID-19 pandemic, said Jennifer Sawatzky, the town’s director of strategic and administrative services. The remaining amount for 2021 is $182,000, which will be used for payments, she said.
In 2021, the town will receive $914,000 from the province from Municipal Sustainability Initiative (MSI) grant funding. Over the next five years, $812,000 will be used to cover loan payments for the new town hall. However, even with this funding, there would otherwise still be a $223,000 deficit, which is being covered by a transfer from the town’s financial stabilization reserve.
The town’s expenses are slated to increase by two per cent to $34.7 million. This increase is mainly due to a five per cent increase in contracted services (representing 32 per cent of 2021 budgeted expenses), which is offset by a four per cent decrease in salaries, discussed below.
Strathmore town council passed the 2021 budget, which will see no change to municipal taxes this year but increases to utilities and the natural gas franchise fee.
The town’s budget and corporate plan for 2021 was discussed during a special committee of the whole meeting during the evening of Nov. 4. The budget was passed during a subsequent regular council meeting that same night.
The town’s interest has increased by about $150,000 due to increased debt. Debt principal repayments increased to about $600,000.
Tax rate holds, utilities increase
There will be no residential or commercial property tax increase this year. However, for the 2022 and 2023 budget periods, a 3.9 per cent increase is projected, to cover additional costs for certain contractual obligations, as stated in the town’s 2021 to 2023 corporate plan.
Utility fees are increasing, however. The natural gas franchise fee will increase from 29.6 per cent to 35 per cent, the maximum rate allowed by the province. This will increase the average residential users monthly bill by $2.30 based on an annual usage of 115 gigajoules, reported Mel Tiede, the town’s director of corporate services. The town is already at the provincial limit for electrical franchise fees, of 20 per cent.
Additionally, utilities fees increased by two per cent, and the monthly levy for the infrastructure utility reserve increased by $1.50 per month, from $6 to $7.50. This increase is made up of a 25-cent increase for water, sewer, solid waste and recycling, and a 75-cent increase for the storm sewer infrastructure reserve.
About 10 per cent of properties in the town are “non tax paid,” meaning they are exempt from municipal property taxes. These are largely provincially operated, such as schools, the hospital and seniors housing, as well as other exempt properties, such as churches.
However, they still receive services from the town. “This is our only way of receiving revenue from those properties,” said Tiede.
Combined, these changes will result in a total monthly increase of $6.68 for the average property homeowner for the 2021 budget year, said Tiede. A surplus of $692,000 is being projected for the utility department after transfer to reserves. The change will help build the town’s reserves for infrastructure replacement and repairs, explained Mayor Pat Fule.
“Council is working really hard to come up with a budget that’s going to have the least impact on residents, but we also need to look at trying to improve the situation of the town into the future,” said Fule. “This is one of the things that’s a small increase to people, but it’s a lot less than looking at any kind of property tax (increase).”
Financial stabilization low
As per the town’s previous long-term financial plan, adopted in concert with the 2017 budget in December 2016, the town should have about 20 per cent of its annual budget (about $7 million) in unrestricted surplus and financial stabilization reserve.
The purpose of these funds is to have adequate working capital to meeting ongoing cash requirements for operating and capital budgets without having to borrow for operating needs. At the end of the last year, the town had about $300,000 in financial stabilization and accumulated surplus. “We are well short of the 20 per cent or $7 million and so that is a goal to work towards,” said Tiede.
Capital spending
The town’s 2021 capital spending is about $7.5 million.
The town received $1.6 million of provincial Municipal Stimulus Program (MSP) funding from the Alberta government for capital spending. This funding will be used to fix the Aquatic Centre and Family Centre roofs, and partially fund the repaving of Thistle Way and George Freeman Trail as part of the town’s RAMP Asphalt Paving Program.
The stormwater outfall system at Strathmore Lakes will be upgraded to stop ongoing flooding there, costing $645,000 (about $407,000 from utility borrowing and about $239,000 from storm utility reserve).
The West Ridge Rd. Rehabilitation program will be funded through about $1.6 million from the federal gas tax and another $540,000 through levies.
An engineering inspection of the Brentwood Reservoir for its future decommissioning will be performed, costing about $204,000, funded from the utility reserve.
The protective services cabanas are being moved from the town hall site to the fire hall, allowing for increased coordination between municipal enforcement and the fire department, according to the town’s corporate plan. The move will cost $150,000 from MSI capital funding.
The town is acquiring a hydro-vac trailer ($150,000) and is replacing its power hydraulic tools ($80,000), funded through its capital equipment reserve.
A number of projects are at the Strathmore Wastewater Treatment Plant (WWTP), funded through utility borrowing, including (but not limited to) aeration system replacement (about $191,000), geotube removal (about $142,000), instrumentation (about $95,000) and lagoon refurbishment (about $38,000). Additionally, necessary lift station replacements will cost about $82,000.
Other major capital projects include construction of new pathways ($115,000; MSI capital funding), playground replacement ($90,000; MSI capital funding), Westmount Drive to Wheatland water main tie-in upgrade ($65,000; utility borrowing), Willow Drive utility main replacement ($60,000; utility borrowing), Centre Street upgrade ($50,000; federal gas tax), the Ridge Road storm sewer ($50,000; utility borrowing); a central irrigation system ($50,000; utility reserve); the Wheelchair Ramp Program ($43,000; federal gas tax) and the blue arena light replacement ($40,000).
Staffing reductions, compensation changes
The town has reduced its staff by 17.86 full time or equivalent positions, resulting in cost savings. “We’re confident that this has been accomplished without any impact to service levels or delivery,” said Lagore. Any future additional staffing will warrant approval by council.
Staff will receive a 1.5 per cent pay increase as a cost-of-living adjustment, effective July 2021. No such adjustment has been made for two years. The increase will come into effect halfway through the year only, due to budgetary constraints.
Salary and wages accounts for 36 per cent of the town’s total budget expenses.
Listing town hall for sale
With the new town hall nearing completion, council passed a motion to work towards selling the old town hall located at 680 Westchester Road. First, the site will be surveyed and subdivided. Then the building and a portion of its site will be listed for sale with the help of realtors.
Youth hub discontinued
Strathmore’s hub program has been discontinued. The hub program has been on hold due to the COVID-19 pandemic, and its building at 170 Brent Blvd. has some occupational health and safety issues, said Lagore.
The town will reassess the delivery of youth programs by looking at options and partners available in Strathmore, to work together to prevent overlapping and duplication of services. Administration will request council direction on the future of youth programming in the next couple of months, said Lagore.
Despite the decision, the town is not walking away from providing programs for youth, said Fule.
“We realize the importance of it, but it’s also become an incredibly costly program,” he said. “If there are other agencies that can deliver programming and do it in a very good situation for our kids and youth, that’s something that we do need to explore.”
Councillor Melanie Corbiell voiced her support for this motion. “I don’t want to compete against agencies that we already have,” she said. “We’re not completely getting rid of it; it’s just reevaluating.”
New community hub
The downtown building formerly housing the The Standard One Stop Shoe Shop will become a storefront for multiple nonprofit groups in the community. Council voted to accept a proposal from the downtown cultural group to enter into a partnership for the operation of the building for five years. The town is currently drafting a lease with the current owners.
This cost of this deal will be equal to the building’s property tax and utilities only. “The cost to the town will be minimized with huge benefits to the community and even greater benefits to the downtown core,” said Lagore.
The arrangement will help the vibrancy of Strathmore’s downtown, especially during the evening, said Fule. “One of the largest concerns about downtown is things tend to be closed down after about 5 p.m.,” he said. “This is going to bring some energy to our downtown core, and it helps to save a beautiful building on our main street.”
RCMP funding request denied
In September, the Strathmore RCMP detachment presented a multi-year financial plan requesting increased financial commitment for additional staff and equipment.
The town will not implement any of the options presented in the plan. “Under current economic times, the town is not in a financial position to support the increased manpower or the increased amenities that they were asking for,” said Lagore. “We recognize that they have needs, but the need is all across the corporation and the community.”
Additionally, a vacant watch clerk position at the RCMP detachment will not be filled. “We have been operating for a few months now with this position vacant, and we do not feel that the town is in a financial position to fill this vacancy at this time,” he added.