Got any spare $100s? County homeowners might need them to pay for a proposed $98 tax hike in this year's budget.
County council got its first formal look at the proposed 2012 budget last Wednesday at the first of several special budget meetings. The budget, presented by acting county commissioner Ian McKay, projects a 7.42 per cent tax increase for most county residents. That works out to about $98 more on the tax bill for the average homeowner.
There are very few new items in this budget, McKay said. Apart from a $100,000 reserve fund for snow removal, almost all the dollars in the budget were needed just to maintain current service levels.
"A number of priorities will not be achieved in 2012," he told council, especially since they plan to save money by leaving some positions vacant. "We are stretched thin and need to be realistic."
Cost creep
Administration had originally predicted a 14-per-cent tax hike on account of debts, inflation, salaries, capital spending and reserve repayments, said Rick Wojtkiw, general manager of corporate services.
Staff proposed to trim this to 7.42 per cent using higher assessed property values and longer-term loans for bridges and roads, he said. They also planned to cut costs by leaving five positions vacant and cutting training allowances, and to save about $200,000 by opening their own gravel pit.
The typical homeowner with a $420,500 home would pay about $1,409 in municipal taxes next year if this increase were approved, Wojtkiw said, or about $98 more than this year. Parkland County residents paid about $1,549 for a similar home this year, he added, while St. Albertans paid $2,965.
Add in predicted hikes to education and seniors' levies, he continued (which the county does not control), and the average homeowner would see their tax bill rise by a total of $142 next year.
About 43 per cent of the county's money would go towards infrastructure if this budget were approved, McKay told council. The next biggest chunks would go towards administration (16 per cent) and utilities (12).
Water hikes
The county also planned to raise its water rates.
Sturgeon County has about $50 million in water and wastewater structures to manage, McKay said, and does not currently charge people enough to maintain it. Its reserves for repairs are "dangerously low," and they effectively have no money left over to fix anything that breaks.
The current rate system produces steady rates, staff told council, but also big spikes whenever something needs to be replaced. Staffers propose a shift to a "utility rate" model that would set aside cash for replacement parts over time, smoothing out those rate hikes.
But that would require some significant near-term hikes to build up those reserves, McKay explained — about 45 per cent over the next three years. If council split this hike into three chunks of 15 per cent, as recommended by staff, it would cause the average homeowner's monthly water and wastewater bill to rise to about $97 from $84 by next year.
Council has yet to make a decision on this policy, McKay said, and could choose to spread the increase over a longer period.
It's short-term pain for long-term gain, Coun. Don McGeachy said of this proposal. A relatively small number of residents use the county's water systems, he said, and those users, not all taxpayers, should pay for the system's costs.
Council split
Council members had mixed opinions on the proposed tax hike.
Coun. Karen Shaw said she supported it, noting how staff had already trimmed it down from their original proposal of 14 per cent. "You cut any deeper, and we're going to start affecting services."
The county made the mistake of raiding its reserves in years past to lower tax increases, Shaw said. Now those funds are mostly gone, and the county has big bills due to last year's wildfires, snows and floods.
"When you keep taking food out of the fridge and not putting it back in, pretty soon that fridge is gone, and we've been doing that," she said. "We have to build back our reserves."
It's a tough pill to swallow, McGeachy said of the hike. "Our fuel costs went through the roof this year," he said, and many bridges are in dire need of repair — bridges alone account for two per cent of the proposed increase. "If we want to plow roads and grade roads, we'd better budget for it."
McGeachy said he would not support any more than a 4.5-per-cent increase, and hoped to find more cuts in the budget. He called on councillors to cut their conference and travel budgets by about 75 per cent to keep the tax hike down.
Question marks
McKay also flagged a number of items that council might want to consider adding to the budget.
Council would have to decide if it wanted to set aside cash to intervene in the Alberta Utilities Commission hearing for the Eastern Alberta Transmission line, for example. That line, if built, would start around Gibbons and end near Brooks. The commission recently suspended the hearing for that line at the province's request.
Next, it would have to address the growing cost of intersection improvements. The county needs about $11.6 million to upgrade 26 intersections in the near future, council learned at an October meeting, and may need to pass a road levy to get it.
And it would have to do something about its growing backlog of ditch repairs. Staff have fixed just 87 of the 196 ditches and culverts on their list for flood prevention this year, said transportation services manager Bob Stephen, and that list is growing faster than they can chip away at it.
Other items on the decision list include a new peace officer, a study for a Namao fire hall, full servicing for an industrial park and the 2012 census.
Staff will take council's feedback and create a detailed budget by Nov. 28, McKay said. Council would debate the final budget on Dec. 13.
