ATHABASCA — Town of Athabasca councillors will revisit the topic of franchise fees for the third time after councillors deferred further discussions to Oct. 3 for more time to consider additional options to reduce the forecasted 2024 deficit.
During the Sept. 19 meeting, councillors voted unanimously to push decisions around raising both Apex and Fortis franchise fees to the next council meeting after conjecture around cutting services or the budget ended in more questions.
“In order to continue to provide the level of service that we currently do, we wanted to take time (to) say ‘What's the best way in order for us to do that?’” said mayor Rob Balay in a Sept. 29 interview.
Chief financial officer Jeff Dalley told councillors the rough draft budget for the upcoming 2024 fiscal year carries a deficit of almost $250,000, which he said could be made up through tax increases or covered in part by raising franchise fees.
Coun. Jonathan LeMessurier voiced his support for a bump in utility fees, what Dalley called the “lowest hanging fruit,” for additional revenue. “I would be more in favour of increasing it if we had to to 20 per cent and being able to give our taxpayers a break on the increase in tax this year,” said LeMessurier.
Balancing the budget
The topic was first discussed at the Sept. 5 council meeting, when a motion to not raise franchise fees was defeated 4-3. Mayor Rob Balay and councillors Jonathan LeMessurier, David Pacholok, and Darlene Reimer were opposed, and councillors Sara Graling, Ida Edwards, and Edie Yuill were in favour.
At the Sept. 19 meeting, Dalley said “as it stands, we’re either going to need to do a transfer of fund reserves to cover off this deficit, or we’re going to have to do some increases somewhere along the line, or cut services.”
The biggest portion of the projected deficit stems from the 30 per cent increase water rates from the Aspen Regional Water Services Commission in 2024. “If we’re going to get hit with that, specifically some of that deficit should be addressed with increasing utility costs,” said Balay.
In 2023 the town increased franchise fees from 14 per cent to 16 per cent, and also introduced a $25 bi-monthly utility distribution charge with the intent of reserving the extra funds in anticipation of the water rate jump.
Dalley said if both fees were raised from 16 to 20 per cent, an estimated extra $72,000 from Apex and $138,000 from Fortis would cover a majority of the projected deficit, more than a hike in residential and commercial property taxes.
As for how the increases would impact resident’s utility bills, Dalley said a four per cent bump in both fees would account for an extra $78 per year on average.
Boyle and Blackfalds are examples of municipalities with electricity franchise fees close to or at 20 per cent, and High Level and Westlock all have natural gas franchise fees hovering close to 30 per cent.
Council weighs options
Balay noted although he’s never seen council cut the budget in the six years he’s been involved, he said he would “at least like to look at it,” as an option.
A two per cent cut to the town’s operating budget of $10 million would cover close to the same portion of the projected deficit as the franchise fee increase, but Pacholok questioned the feasibility of a reduction that size, and LeMessurier and Edwards voiced hesitation about cutting services.
“You can’t always never make a reduction in services,” said Balay. “At some point, you have to find that balance. I’m not saying that this is the year, but I at least want to look at it so that I can make an informed decision.”
