MD of Bighorn residents are looking at a 4.8 per cent tax increase following the initial review of the municipality's draft 2024 budget.
A hike in policing costs collected by the province from $158,381 in 2023 to $240,000 in 2024, makes up for about one-third of the property tax increase requirement of $7.859 million.
In its 2024-28 capital plan, a new $11.4 million operations building will also be about one-third of overall capital project costs, which are all focused in the first year of the plan.
“Although we have budgeted for this already, it’s shocking to see this is the reality of where we’re at with the cost of construction these days,” said CAO Shaina Tutt, adding there is no plan to use property taxes to fund the project.
A Federation of Canadian Municipalities (FCM) grant, if received, would provide $1.368 million to construct the operations building. The draft budget also plans for a 30-year FCM loan of $7.752 million on a 30-year term, with a 25-year term loan from Royal Bank of Canada to round out the rest of the funding at $2.280 million.
Combined annual payments for the 30- and 25-year debts would amount to $721,560 and begin in 2025. If the competitive FCM grant is not received, the MD will have to look at alternative funding sources.
Other major capital projects for 2024 include Exshaw stormwater improvements ($750,000), and a Pigeon Creek pedestrian bridge in Dead Man’s Flats ($275,000), which was formerly pegged at $75,000 in the 2023 budget.
Capital projects for fire services in 2024 total $2.082 million and include a new fire chief command vehicle ($225,000), two bush buggy replacements ($600,000) and a sprinkler protection trailer ($250,000).
In 2024, the budget also takes $100,000 from reserves to look at the feasibility of a fire station in Dead Man’s Flats. In its brief presentation of the budget, administration did not provide insight into future forecasted costs of $2 million in 2026 and $1 million in 2027, also associated with a Dead Man’s Flats fire station.
The cost of 2nd Avenue streetscape improvements in Dead Man’s Flats is pegged at $420,000 in the first year, $825,000 in 2025, $435,000 in 2026, $710,000 in 2027 and $115,000 in 2028. Road rehabilitation will also cost the MD $400,000 per year.
The draft capital plan highlights a spend pattern of about $6 million per year, with more than 100 projects planned in five years. The prior 2023-2027 capital budget had an average spend of $3.3 million per year.
Withdrawals from reserves for capital and operating expenses total $4.406 million in 2024, $2.803 million in 2025 and $2.217 million in 2026.
Deposits to reserves total $912,503 in 2024 and $914,408 in 2025 and 2026, and principal paydowns on loans, mainly for the new operations building, amount to $126,652 in 2024, $237,548 in 2025 and $249,819 in 2026.
The draft budget forecasts reserve accounts will go from $12.371 million in 2023 to a balance of $3.149 million in 2028.
“It’s important that we be aware of what direction we’re going in because this also includes the annual deposits that go into restricted surpluses that are included in the budget envelopes,” said MD corporate and community services director Brenda Hewko.
The MD will need to focus on raising off-site levies, especially for road and fire facilities projects, to offset anticipated capital costs in the five-year plan, she added.
“This is really highlighting the work that needs to go forward on the off-site levies. Even though it is typically a planning and development activity, it is an activity that will need full cooperation across all of the departments within the MD,” said Hewko.
The draft plan further delays a new MD administration building until 2029, recognizing the number of capital projects and costs planned over the next five years.
Reeve Lisa Rosvold noted the draft budget is big and asks a lot of the MD but gave little detail on specific capital projects and expenses, and what projects take priority.
“The way this was presented is awesome, it’s just quite different than how it has been for the last six years. Usually, it has felt that the budget discussion starts with council,” she said.
“I already don’t know how any of the projects that council would like to see go forward are going to fit into this budget with the way it’s already presented. It’s a huge budget.”
The budget overview, which mainly involved administration presenting to committee members, only lasted about two hours.
A two-day strategic planning session took place with council and administration last week, but Rosvold noted this session normally occurs before reviewing the budget to provide administration clear insight into council’s strategic goals.
Tutt said during the strategic planning sessions, council would have the opportunity to identify strategic goals that may not be demonstrated in the budget, as well as discussion on timelines.
“It will also help [council] understand the level of priority from a municipal perspective of those projects that are listed, and then we can add in projects that help achieve the goals that perhaps we’re not aware of yet that you have as a group,” she said.
The CAO also noted a change in staff with Hewko as the MD’s new director of corporate services, who presented the budget to GPC, means the budget’s going to look inherently different.
“It’s just a different way of presenting data that you would have seen similarly historically, but also being respectful that it’s a different director of corporate services and that everybody has different ways of approaching the same beast that is budget,” she said.
The draft operating plan puts 2024 expenses at $14.051 million, 2025 expenses at $14.630 million and 2026 expenses at $15.505 million.
Salaries and wages make up the bulk of expenses, with new positions planned for engineering and infrastructure to address public inquiries to execute capital projects, and new positions for fire services, which could include a deputy fire chief.
There are no changes proposed for the utility rate requirement, in part, because the MD is planning a utility rate review in 2024.
Coun. Rick Tuza noted he would have liked to see operating expenses and tax rates measured up against 2023, which the draft budget did not include.
Hewko noted this was intentional with budget planning taking an approach of planning from zero, instead of using last year’s budget as a guide to budget this year, and still budgeting off historical actuals.
The five-year capital plan outlines other funding expected, but not guaranteed, from grants with the FCM, the Alberta Municipalities Water and Wastewater grant, the Alberta Transportation Infrastructure Program, the Canada Community Building Fund and the Local Government Fiscal Framework (formerly Municipal Sustainability Initiative).
The remainder of the flood recovery grant ($430,157) will also be spent in 2024.
The governance and priorities committee accepted the draft budget as information and will debate it at the next council meeting, with the goal of passing a budget by mid-December.
Jessica Lee, Local Journalism Initiative Reporter, Rocky Mountain Outlook