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Cochrane town council asks administration to re-draft 2023-2025 budget with lower property tax increase.

As Cochrane town council sat down to prepare to start discussing the municipality’s 2023 to 2025 Draft Budget in earnest this week, Mayor Jeff Genung kicked things off with a seasonal reference.
20211122 Council budget meeting screenshot JL
Cochrane town council wants staff to trim the fat from a proposed 7.55 per cent tax increase before the budgetary approval next month.

As Cochrane town council sat down to prepare to start discussing the municipality’s 2023 to 2025 Draft Budget in earnest this week, Mayor Jeff Genung kicked things off with a seasonal reference.

“It’s the most wonderful time of the year,” Genung said, clarifying after that he was only half-kidding.

Nine hours, forty-three minutes and two days later, council had asked administration to go back to the drawing board and come back with options to allow for cutting the proposed property tax increase in half.

By the end of the second day, Genung probably wasn’t half-kidding anymore.

The actual deliberations – the meat and potatoes of trimming the budget for the fastest growing town in Alberta – begins after the revised draft comes back to council next week.

As it stands, based on the average price of a house, the draft proposes a 7.55 per cent property tax increase, which would translate into a $15.67 per month bump, excluding utilities – wastewater, water, and storm sewer. With utilities included, the increase would be $23.22.

Last year at this time, the general discussion among council was around aiming for a ‘growth plus inflation’ budget. No one envisioned what was about to happen to inflation in 2022.

For budgetary purposes, administration projects 3.25 per cent population growth every year. Currently, inflation (based on the most current estimates available from the City of Calgary) sits at 6.7 per cent. Administration pointed out during the recent meetings the actual municipal rate, which wasn’t available this year, is typically higher than Calgary’s.

Chief Administration Officer Mike Derricott noted the process that arrived at a 7.55 per cent tax increase started out with an increase “in the teens.”

He stressed the difficulty in paring down a budget that was largely driven by inflation, before adding he considers the prudent use of tax dollars a sacred trust.

“Cochrane is among the very most judicious organizations in local government in terms of how effective and efficient we are in expending tax dollars, and that’s demonstrable statistically,” he said.

One of the conundrums facing administration and council is the hard fact that growth is not paying for itself. Simply put, a 3.25 per cent rise in population doesn’t translate into 3.25 per cent more revenue.

So the task is to find a way to balance rising cost pressures with service level expectations.

The first order of business in the special meetings Nov. 15 and 16 was to clarify what information councillors would need to prepare for the actual deliberation process. After six hours of page-by-page questions on the operating budget Tuesday, Coun. Morgan Nagel spoke up for the first time to explain why he had been quiet until that point.

He said what was going on in his head was like he was shopping for a new four-wheel-drive truck, walking around with the salesperson, listening as the numbers add up and financial reality sets in.

“I’d be quietly thinking ‘I can’t afford a $70,000 truck,’ but I’d be listening quietly,” he said.

He said there’s a “big mismatch” between where he’s at and the 7.55 per cent rise currently being proposed.

“People are going to the gas station and not knowing how they’re going to pay for a $200 fuel-up. They go to the grocery store and fill their cart and what used to cost $350 now costs $500,” he said.

“I think it’s important that we recognize it is going to be difficult for us to respond to this inflationary environment, and if we just go ahead and increase taxes by 7.55 per cent, it’s like we’re just not bearing the brunt of the inflationary challenges.”

Nagel identified two basic approaches to arrive at a tax increase he could live with: councillors could go through the draft line by line, cutting as they go, or they could ask administration to go back to the drawing board and re-draft a budget with an increase in the 3.5 to four per cent level.

He said he wasn’t equipped to pick and choose where to cut, and would prefer administration come back to council with a pared-down document, including options.

The rest of council agreed with Nagel.

Coun. Marni Fedeyko, citing an example of some single parents who needed to go to the food bank this year, said current financial pressures needed to be recognized.

Unlike Nagel, Coun. Tara McFadden took a noticeably more meticulous approach in the previous six hours – to the point where it almost became humourous. She asked administration for numbers of staff attached to each department as they came up in the page-by-page review, taking notes each time.

She said council should aim for a “no frills” budget that represented reality, which for her would be reducing the proposed tax increase by half.

She offered a couple of suggestions as a starting point: a hiring freeze, and no Cost of Living Adjustment (COLA) for council or management. (The draft budget suggests a 3.5 per cent COLA boost for all non-unionized employees).

Genung agreed with the decision to ask administration to go back and look for reductions, and come back with more options. He recognized how difficult that process would be, pointing out that if snow isn’t ploughed and grass isn’t cut, town council will hear about it.

The mayor concluded with an appeal to residents to get involved in the discussion.

“I hope residents will rise up and give us their opinions on what cuts might look like,” Genung said.

So residents who aren’t happy with the snow that still hasn’t been removed from in front of their driveways may have to consider how much they’re willing to pay to improve that service.

Or maybe how much they’d pay for a second-hand four-wheel-drive truck.


Howard May

About the Author: Howard May

Howard was a journalist with the Calgary Herald and with the Abbotsford Times in BC, where he won a BC/Yukon Community Newspaper Association award for best outdoor writing.
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