Lacombe city council reduces property tax increase to under one per cent

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Lacombe residents can expect a slightly lower property tax increase than originally planned in 2020.

While the property tax won’t be frozen for the year, council did vote 4-3 in favour of reducing the tax increase from 1.4 per cent to 0.9 per cent in the 2020 provisional operating budget during their regular meeting Monday – a move they say reflects Alberta’s economic climate.

“Its an acceptable increase,” said City of Lacombe Mayor Grant Creasey, who voted to reduce the tax rate. “The very best part of it, for me, is knowing we are still providing funds for the reserves at a level which is higher than any year previous, so it’s kind of two-fold; We haven’t increased the taxes a great deal – less than one per cent – but we are still maintaining services with the exception of BOLT.

“We’re looking to the future and being respectful of the current economic realities for our ratepayers.”

Council asked administration to bring forward two different budget “scenarios” at their last regular meeting, including what the budget would look like with a zero per cent property tax increase, and a 0.9 per cent increase. While the current council set a policy to align their tax rate increases with that of inflation – CPI (Consumer Price Index) – several councillors, including Coun. Reuben Konnik who also voted in favour of the lower increase, said they owed it to ratepayers to “do better.”

By lowering the tax rate increase by 0.5 per cent, the additional $42.07 on a house assessed at $380,000 will dip. Utility rate increases, as well as Cost of Living Adjustments (COLA) for city staff and police administration are also expected to be reduced to 0.9 per cent, meaning the city will see staffing expenses lower by $54,000, but take in $74,000 less in revenue, resulting in a shortfall of $20,000.

With the province making cuts to the Municipal Sustainability Initiative (MSI), as well as other programs that serve community groups such as Parent Link, and the Lacombe and District Historical Society, however, councillors Jonathan Jacobson, Chris Ross and Cora Hoekstra weren’t necessarily in favour of the reduction.

Hoekstra and Ross said the city needed the 1.4 per cent increase revenue to account for potential support for the historical society, Parent Link, and other community groups and programs facing cuts as a result of changes in the provincial budget.

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Jacobson agreed.

“We still don’t know the bottom of the well in terms of provincial cuts. It seems like every month there’s more and more stuff happening and frankly, the provincial government has made it explicitly clear that if the economy does not pick up with the completion of pipelines and stabilization of the oil and gas industry, there will be more cuts coming,” he said. “What that means for us here, is that if more of our provincial funding dries up, we’ll have to make a decision between substantial tax increases or more significant service cuts.”

Hypothetically, in such a case, he said going from a 1.4 per cent tax increase to 2.8 per cent would be more palatable than zero to four per cent. While some councillors said keeping the tax increase lower would show council’s restraint, he cautioned them on making populous decisions rather than “right” decisions.

“If you get too caught up in populous decisions that are perhaps not best for policy, while they are good in the short term, they’ll ultimately lead you to a situation where you’re much further away from where you’re meant to be in the first place. I’m not suggesting that any of my fellow councillors are doing anything disingenuous but I believe, myself, that sticking to this revenue level would’ve put the city in a position to better manage things down the road.”

That same concern wasn’t shared by Creasey.

“While I respect the concerns other councillors have…no one has a crystal ball. That’s why we do these deliberations annually. I’m hopefully next year we’re able to come up with appropriate accommodations as well and work our way through the current financial situation we’re in and on to better days,” he said.

With the 0.9 per cent property tax increase now decided upon, the focus is now on how to make up the $20,000 shortfall. Amongst considerations is reaching out to the Town of Blackfalds and City of Red Deer to inquire about leaving BOLT Transit even earlier than planned, given the system’s lower ridership over the summer months. Should Blackfalds and Red Deer agree, that would cover the shortfall in full, with an additional $20,000. However, it would likely impact Blackfalds’ budget, given what the continuation of the BOLT system without Lacombe will look like is not yet known.

Other options include a partial reduction to the Community Builder Fund, and reduction in allocated funds for fire hall maintenance and repair work, from delaying a $7,000 replacement of storage racks, to reducing ongoing upkeep and repairs to critical need only in anticipation of a new fire hall being built in 2023-24.

“I would suspect it’ll be a combination of several rather than totally and specifically all of any individual item,” said Creasey. “There very well may be some additional savings that we can consider and increase our transfer to reserves further.”

Concrete decisions on where to make up the shortfall will occur at the next regular meeting, Dec. 9, 2019 when the 2020 Operating Budget will return for potential final approval. The meeting will take place at 5 p.m. in council chambers.