County of Barrhead councillors unanimously approved the interim 2021 operating and capital budgets during their Dec. 15 meeting.
The budget is necessary so that the municipality can continue to operate until it passes its final budget which is expected to come before council for their approval sometime in April, but depending on the year can be done as late as May.
The budget includes an operational budget of $15,854,336 and a capital budget of $9,708,367.
Budget process
Finance and administration director Tamara Molzahn said the process of creating the interim budget is a long one, starting in September and going to December and includes input from various sources from staff, public input (from the budget survey) and councillors.
The administration will start refining the budget after they receive additional information from the province, such as how much they will receive from the linear assessment.
Finance and administration director Tamara Molzahn said their goal going into the budget process was to keep service at current levels as best they could while not increasing property tax.
One of the ways she said they plan to accomplish this is by increasing user fees, most notably dusting and water rates, bringing them closer to a true cost-recovery level. She also added that to balance the budget, which is a provincial mandate, it would be necessary to tap into the accumulated surplus.
However, she reiterated the final decision on whether to increase the mill rate will be up to the council and will be made at the same time the final budget is approved and largely dependent on decisions made at the provincial level.
"There is a lot of information we don't know yet," Molzahn said, adding in addition to the previously mentioned assessment, municipalities are waiting to learn how much they will need to collect for school requisitions.
The requisition is the amount of education or school tax that municipalities are required to collect for the province.
The one area where spending has been reduced is the municipality's road oiling program, she said, adding it is the second year in a row the oiling program funding has been reduced.
To reduce the financial impact to ratepayers, Molzahn said whenever possible the municipality has attempted to take advantage of grants to pay for projects.
Interim operating budget specifics
Transportation and road maintenance makes up the largest portion accounting for a little more than 46 per cent of the budget at $7,311,863.
The next largest expenditure is general services and administration at $4,651,405, environmental and developmental planning services (agricultural services, economic development and planning services) at $1,249,020, protective services (fire, bylaw and police) at $926,829 and recreation and cultural services at $892,618. Next are environmental use and protection services (water, sewer, lagoons, landfill and transfer stations) at $761,631, public health and welfare (Barrhead and District Family Community Support Services being the bulk of it) at $61,000.
One of the largest expenditure in the 2021 budget, is actually the school requisition accounting for about 16 per cent of the budget.
Ideally, the school requisition should be a flow-through, but unfortunately for municipalities, they are responsible for paying the requisition regardless of whether or not they can collect it. Since the municipality does not know how much they will have to collect they have used past years as a guide, estimating it to be at $2,559,698. The other flow-throughs are the amount the municipality collects on behalf of the province for the social or seniors housing (Barrhead and District Social Housing Association) and designated requisitions that have been estimated at $112,372 and $12,676, respectively.
Molzahn said key items in the operating budget include improvements in the municipal chambers for required virtual meetings, a capacity review for the Dunstable lagoon, 15 miles of mostly grant-funded shoulder pulls, gravel pit volume testing, municipal office/Pembina Hills School Division building assessment, lake management and four-year strategic plans, the purchase of a drone for Ag. services, research of the weir at Lac La Nonne (along with the accompanying public engagement process), the taking of new air photos and printing of new county maps and replacing reserves that were cut in 2020.
She also noted as it is an election year, there would be additional expenses occurred. To help offset those costs, they have delayed the increase in councillors in per diems.
In April 2019, councillor commissioned administration to form an independent committee to create a report determining what fair compensation would be for councillor compensation. The report was non-binding.
Councillors asked for the Elected Officials Remuneration Advisory Committee (EORAC) to be formed due to the federal government’s decision to eliminate the one-third income tax exemption for municipal elected officials, effective Jan. 1, 2019.
The committee recommended that councillors base-pay be increased by 14. 2 per cent for a councillor and 11.6 and 12.7 per cent for reeve and deputy reeve respectively and that additional increases to their per diem rates also be instituted in stages. The base pay increase was implemented as part of the 2020 budget and changes to the per diem rates were to be instituted in January 2021.
Molzahn also noted that there was a noticeable increase in the policing budget which will continue until at least 2023 due to change in the provincial policing model that requires rural municipalities with populations up to 5,000 to contribute to their policing costs.
Capital interim budget
On the capital side, expenditures toward transportation systems (roads, bridges, et cetera) take the lion's share of resources, accounting for about 64 per cent of the total budget at $5,189,464 followed by environmental use and protection (water, sewer, lagoons and waste collection) at 34 per cent at $2,782,648, followed by general administration at $54,000, environmental development at $45,000, recreation and culture services at $18,725 and fire services at $7,500.
Among the major transportation systems projects, public works has identified as a priority include the major reconstruction of five bridge projects (two tentatively depending on grant funding) along with six road reconstruction as well as upgrades to the Neerlandia lagoons.
"In addition to any capital purchases, we also plan to set aside $1,595,530 for future capital reserves," Molzahn said.
Barry Kerton, TownandCountryToday.com
