WESTLOCK – Westlock County councillors have unanimously approved the municipality’s 2023 interim budget, a “bold” document that touts a five per cent cut to expenses and double-digit decreases to the farm and non-residential mill rates it says will make the county “investment ready”, plus a “reasonable” 1.01 per cent increase to the residential mill rate which “allows service levels to be maintained.”
Following four hours of public and in-camera deliberations at their Dec. 13 meeting, plus three previous days of budget talks, councillors voted 7-0 to pass the interim operating budget, a balanced document that counts equal expenses and revenues of $20,614,338 with a tax requirement of $10,934,782, $857,081 less than the 2022 budget and includes a seven per cent decrease across the board for the municipal tax levy.
Also passed unanimously Dec. 13 was the municipality’s 2023 capital budget, a document that notes $2,552,532 in expenditures with no municipal tax requirement and will be funded by reserves of $924,833, grants of $1,612,699 and sale proceeds of $15,000.
Tax-wise, the 1.01 per cent residential mill rate increase means an “average homeowner” will pay about $22 more in 2023, while the farm mill rate is touted to drop by 10.7 per cent, which adds up to a reduction of $70 per year, per quarter section. Finally, the non-residential mill rate is slated to drop by 12.6 per cent and will provide the “average non-residential property” a reduction of $1,800 per year and gets the county in compliance with the 5-1 non-residential to residential tax rate as dictated under the Municipal Government Act.
The county’s final municipal tax rate will be approved in April 2023 after the property assessment figures are known and will include the provincial school and Homeland Housing requisitions, which the municipality only collects on their behalf.
A “bold strategy”
A Dec. 14 news release from the county called the budgets “disciplined” and keeps “tax rates competitive while continuing to fund important investments in regional infrastructure”, while in a Dec. 15 interview reeve Christine Wiese noted that since 2012 there’s been a 5.5 per cent decrease in the county’s population which means there’s fewer people bearing the tax burden — aside from 2022, when the tax rate did not increase, ratepayers witnessed a 3.5 per cent jump in 2018, a four and 3.5 per cent increase in 2019, a .96 per cent bump in 2020 and a two per cent hike in 2021.
“This is meant to encourage further business development with who we currently have and also to bring more people to Westlock County. We’re not seeing the growth here that is happening in other municipalities and I think the tax rates have been part of that. This is a bold strategy and a bold way of encouraging more people to come here, but it was something that council has identified right from the early days,” said Wiese.
“And this also aligns with our goal of building good faith with the current ratepayers. We needed to correct the high mill rate. Yes, this is bold, but it’s also exciting. I’m confident in the moves we’re making here and I’m hopeful. We have administration excited and council is excited and we’re all looking forward to doing the work.”
CAO Tony Kulbisky repeatedly used the phrase “hunting as a pack” and “investment ready” throughout deliberations and said in a Dec. 15 follow-up interview that their long-term goal is simple: attract more businesses which will generate more tax revenue and will lead to further residential mill rate reductions. During budget deliberations he also pointed to development of a broadband Internet strategy for the entire municipality, as well as the seven-figure work on Highway 44 in front of industrial park in 2023 as “little pieces, that all become a big part of an attraction strategy.”
“Really that’s what we’re trying to do, create a climate for non-residential growth,” he said. “We can’t expect growth to happen in the county if our tax rate is a non-starter for a lot of businesses. We’re trying to adjust the tax rate structure the right way to encourage growth in our community and our region. We’re just trying to set the stage.”
Drawing from reserves
Kulbisky admitted that double-digit tax rate reductions aren’t the norm, but since he started with the municipality at the end of August he’s “looked for efficiencies” and asked “staff how we could do things differently” to make the operation “more efficient, without impacting service levels.”
The release notes that “council’s goal in reducing the non-residential mill rate” was achieved by a short-term, drawdown of reserves, with a long-term goal of “encouraging and promoting investments in Westlock County’s non-residential property.”
Kulbisky said that drawing from reserves for at least the next handful of years will allow them to provide a “competitive tax rate for farm and non-residential” and ensure “that we can maintain service levels for residents and move the county forward by being investment ready.”
As it stands, around $1.2 million in operating reserves will be used annually from 2023 to 2025, then will drop to $581,000 in 2026 — the drawdown means the county’s operating reserves will decrease from $7.5 million at the end of 2022 to $3.1 million by Dec. 31, 2026. Meanwhile, around $4.1 million of the banked $7.8 million in capital reserves is slated to be used over the next three years and will leave all of the municipality’s reserve accounts sitting at around $6.9 million by Dec. 31, 2026, compared to $15.3 million as of Dec. 31, 2022.
“We can’t do the drawdowns forever, we know that and it’s a short-term strategy, but if it sets the climate for investment attraction, we had to look at it. And if it doesn’t work, or happen as quickly as we hope, then we’ll make further adjustments on our spending side,” said Kulbisky. “When I looked at our tax rate structure we were sitting at 28 mills for non-residential and the Town of Westlock is sitting at 17. Well, it’s pretty obvious to me as to where all the growth is going to occur if we don’t at least address it and try to get some parity across the region.”
