Tax hike needed for repairs, replacements, and policing.
Elk Point’s Town Councillors are aware that the local economy is soft, but the town’s coffers are low, so at its regular meeting on April 23 council approved a 0.4 mill tax rate increase which will provide just about enough funds to cover operational and equipment costs. The last time the mill rate was increased was 2010.
Mayor Lorne Young explained the need to look at the whole picture. “What the mill rate increase is based on is the fact that the province raised the education portion of your tax. It’s based on the fact that we’re trying to keep some MSI operating funds for use by non-profits. It’s based on the fact that our lift station had a catastrophic failure and it’s going to cost us some money that we hadn’t planned on. It’s based on money set aside to hire a part-time by-law officer.”
Councillor Debra McQuinn added, “The last couple years mill rates in other communities have gone up, but ours didn’t. As for assessed values of properties, (which have dropped) that we can’t control. But it has now come to the time that the town can’t pay to fill potholes. There are some road repairs that we haven’t had before.”
Young noted that in the past two years when the province increased education taxes the town absorbed the costs, basically subsidizing taxpayers. And because of the soft market, there has been a decrease in revenue from residential and commercial taxes, although construction of the new RCMP building will bring in a federal grant-in-lieu. As well, the electorate clearly identified crime as a concern, so the budget includes $50 000 for costs associated with hiring a part time peace officer.
Young conceded, “It’s trying to find a balance. We want to provide a certain level of services. I know Ken (CAO Ken Gwozdz) has gone to Jay (Jay Duffee, Superintendent of Public Works) and they are trying to cut out here and cut out here and cut out here, but the question is, does that have an effect on the overall administration?”
In a phone interview, Gwozdz explained that it is imperative that the town build reserve funds to cover planned and unplanned expenses. For example, within the next ten years the fire department is planning on acquiring a new fire truck, a rescue truck, and a jaws-of-life, while the town will require a replacement garbage truck. Reserves are also necessary for sewer and water expenses. As a matter of fact, in Elk Point there is no money in reserve to pay for recent damage to pumps at the lift station. While the Government of Alberta will provide grants to cover two-thirds of the cost, the other third will have to be financed.
Gwozdz said “This is a difficult year to raise a mill because the economy is weak,” but a reserve has to be built. “Otherwise, if you borrow you have to pay interest and the interest eats up your operating funds.”
This Council has made funding of core infrastructure a priority. It has determined that ‘utility pays for utility,’ which is why water rates have also increased this year. Basically, the town cannot afford to continue to subsidize.
At the meeting, the town also approved a 5 year capital plan and a revised 20 year equipment replacement plan. Deputy Mayor Dwayne Yaremkevich observed, “Not much money is being spent in the next 5 years.” Replied Gwozdz, “There’s not much to be had.”