City residents may face a 5.74 per cent property tax increase instead of the 3.28 announced after budget deliberations in November. 

The 2024 budget has a deficit of more than $3 million after council decided to scrap its stormwater utility.

“Council decided not to continue with the utility model for funding the city’s stormwater operations and capital, which leaves a net revenue shortfall of $3,073,823,” said city Chief Financial Officer Danielle Whiteway.

“As required under the Municipal Government Act, the city’s budget must be balanced.”

After additional community engagement, it was found that a majority of residents prefer the utility to be funded through property tax, as it was historically done. 

City administration suggested three revenue sources to balance the budget: Tax-funded, reserves or using both reserves and taxation.
If council decided to use reserves, city administration recommended the Financial Stabilization Reserve. 

Whiteway said, “taxation revenue is an ongoing permanent solution to balance the budget and ensure that service costs are covered into perpetuity” while using reserves would require future taxation increases to replenish reserves. 

Mayor Jackie Clayton said she would prefer using the combination of taxation and reserves to balance this year’s budget and using the revenue surplus from last year. 

She said a report is expected next week, and the city could see a revenue surplus coming from its Q4 reports which are expected at the April 16 committee meetings.

Whiteway says a revenue surplus of about $600,000 is expected in its 2023 audited financial statements. 

Coun. Mike O’Connor made a motion for the shortfall to be fully funded by taxation at the April 2 Financial & Administrative Services Committee. 

“If we take it out our reserves, we are still going to have shortfalls in the future,” he said. 

The motion was defeated. 

The mayor then made a motion for the deficit to be funded through property taxes and partially by reserve funding, with a discussion to come to city council on April 22. The motion passed with only O’Connor in opposition. 

City council is on a deadline as it needs to have its property bylaw passed before the end of the month.

“We are running into time constraints with regards to the property tax bylaw, needing to come forward this month so that we can levy taxes (and) mail out to our property owners in a timely fashion,” said Whiteway.

By Jesse Boily, Local Journalism Initiative Reporter

Original Published on Apr 11, 2024 at 08:04

This item reprinted with permission from   Town & Country News   Beaverlodge, Alberta

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