WESTLOCK - Westlock County councillors have received the 119-page “recommended” 2022 capital and operating budget document which calls for a “reduction to the shoulder-pull program, a reallocation of grant funding and a practical mill rate increase” as the municipality aims at
“kick-starting the economy and breathing new life into the county.”
Councillors received the budget in-camera at their Nov. 30 regular meeting, then spent Dec. 1-2 being briefed by administration in advance of more in-depth deliberations running Dec. 8-10 — login details to attend the meetings are available on the county’s website, while the document went online Dec. 6.
CAO Kay Spiess said in a follow-up interview Dec. 3, where she provided the document to the media, that she’s hopeful the $6.349 million capital budget, as well as an interim operating budget, will be approved at council’s Dec. 14 meeting. The budget was posted to online Dec. 6.
The operating budget, which is pegged at $20,815,292 ($370,000 higher than 2021), will eventually be passed in April when the municipality gets its assessment figures and then nails down the mill rates.
Reeve Christine Wiese, who’s one of four new councillors going through the municipal budget process for the first time, said she’s looking forward to digging into the document at this week’s meetings.
“Administration has laid the foundation down for council and now council can get down to working on it. I think it’s going to shine through that this council is a well-rounded group. There are people with financial and business backgrounds and then there’s the experienced members who have gone through the budget before and that’s huge for us,” said Wiese Dec. 3.
The outlook for 2022
Spiess writes on page 2 of the document that the municipality’s current financial position is strongly influenced by revenue shortfalls as assessment continues to decrease for non-residential tax revenue and the result has meant that even before this year’s budget process began the “county was in a loss situation.”
She states that just to break even with a zero per cent tax increase, a $289,000 or 2.5 per cent mill rate increase is required. Due to continued revenue declines, budget 2022 must close a $1 million “gap” to balance the budget and achieve a zero per cent tax increase.
Explained on page 27, the “gap” refers to the difference between forecasted revenues and forecasted expense, or the amount of money the municipality needs to come up with to maintain current service levels. Spiess said the “gap” is a “key piece” for the public to understand that there are a lot of variables they have to estimate when building a budget.
“To further complicate the position, provincial grant reductions are impacting revenues the county has relied on for critical projects and operations and future funding is uncertain. The county must also shift budgets to accommodate downloads from the province for various services, such as policing,” she writes.
She goes on to state that the past council was “faced with difficult decisions for service delivery options that acknowledge the county’s financial position. These decisions reflect commitment to ratepayers and the continued efforts to maintain service levels as COVID-19 evolves with impacts on the daily lives of residents. Our focus now becomes kick-starting the economy and breathing new life into the county.”
Her statement says that reactivating economic activities through the exploration of development opportunities in the county and region is “crucial and will set the stage for future progress.” “Many exciting possibilities are available to the county and its partners with thoughtful planning and strategic collaboration. Improving the way we do business will support this growth and administration continues to streamline operations and find efficiencies.”
Ultimately, she writes, budget 2022 “is a reflection of current financial realities — but with sound financial decisions, dedication to quality services, and an eye to the future, we can address revenue shortfalls and prepare the county for future development and growth. Sustainable revenue strategies will build momentum and guide us into a position of long-term success.”
The process never ends
While discussion and debate now begin in earnest, the documents themselves are a product of months of work.
Spiess says after the budget is approved in the spring, administration begins preparing for the next year.
“The budget process typically starts right after we have the approved budget in April, so we begin to start looking at numbers again in May and then go in front of council then to talk about the environment,” said Spiess.
“We don’t build a budget based on whimsy. We look at many factors that will impact it and do a lot of that analytical work in the spring and early summer. And that sets the context for the departments as they go through to start and build their budgets.”
The departments then continue that work and aim to have tentative numbers in place by the end of the summer.
“And then we move into the three-step review process. So, the first part is that the directors review the budgets with their departments and go over it with a fine-tooth comb. Then we go to an executive review where senior leadership reviews all of the budgets and we start to design the story, the messaging and build the narrative to explain the numbers, because numbers are just numbers without a story. And then we move into council review,” Spiess explained.
