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County facing tough choice as deficit projected

Posted on December 13, 2016 by 40 Mile Commentator
Photo by Tim Kalinowski- Pictured, from left: Reeve Darcy Geigle, Coun. LeRay Pahl, and Coun. Dan Hamilton were perplexed at last week's council meeting by the projected deficit of $1.5 million in the budget numbers for 2017.

By Tim Kalinowski
Cypress County councillors were given a bitter pill to swallow by the county’s director of Corporate Services John Belanger and the county’s tax assessment supervisor Steven Toews at last Tuesday’s council meeting.
Council received the first draft proposal of the 2017 budget last week, and, reported Belanger, due to an anticipated decrease in linear taxes in the coming year his staff was projecting a $1.5 million deficit. This represented, according to Belanger, a large hole in the county’s operating budget which will only increase every year if council failed to act to raise revenues, as linear taxes were expected to continue to drop in the future.
Belanger chronicled for councillors what steps his staff had already taken to cut $450,000 out of the county’s operating costs in the 2017 proposed budget to help rectify the situation. He had Toews review in full the county’s tax picture for councillors, and to show how local taxes stacked up against other jurisdictions in the province.
Toews reported Cypress County ranked amongst the lowest in the province on all taxes paid by its residents and business owners, and was the absolute lowest in non-residential taxes. At its current 4. 56 per cent rate, Cypress County was a full seven per cent below the average charged in the rest of the province.
After Toews completed his presentation, Belanger recommended an 11 per cent tax rate hike on non-residential, bringing the total rate to 5.15 per cent, to balance the budget in 2017.
Belanger went on to show a detailed breakdown of how this new rate would affect local businesses, most of whom would only pay less than $100 more. However, larger scale and higher assessed businesses would take a hit of several thousand dollars each next year. (This larger hit would affect about 1.7 per cent of businesses in the county in total).
“We have the lowest non-residential tax in the province. If we raise our rates we will have the second lowest, but two years from now I am sure that we will be the lowest again… I think it is a necessary evil this year. But that’s just my opinion; it’s your decision,” said Belanger.
Coun. Dustin Vossler did not like the idea of raising taxes in 2017.
“I don’t want raise taxes this year… If we can look at things where we don’t have to spend extra money, I’d rather cut it,” he said.
Reeve Darcy Geigle zeroed in on one proposed expenditure in the draft budget. If the county delayed work on the Suffield water distribution system until 2018, channeling the $2.7 million in allocated county reserves for the project toward this year’s budget deficit, there would be no need to raise taxes.
“This  is realistically not going to get done next year anyway,” said Geigle. “If we carry on with everything that’s been proposed and hold off on the (Suffield) distribution system, it makes the budget balance.”
Coun. Richard Oster disagreed with Geigle’s idea of delaying much needed infrastructure work in Suffield to balance the budget and avoid raising taxes; especially because the county’s Utilities supervisor Doran Jensen had told council at the Nov. 22 meeting Suffield is his top water safety concern at the moment.
“If you get it ready this winter, you could start the first of May and it would be done in the fall,” said Oster disagreeing with Geigle’s assertion it could not get done in 2017 anyway. “Really Suffield’s water is worse than Irvine’s… In Suffield there is a serious water problem Doran (Jensen) can’t correct. Irvine’s gone in my mind from being a number one priority, and been switched around with Suffield as the priority.”
Coun. Ernest Mudie agreed with Oster.
“We are sitting here trying to make these things better for these hamlets. I don’t see where Irvine is better than Suffield or Suffield is better than Irvine. If we have the money to do it, let’s damn well do it and get it done with,” he said.
Oster said Geigle shouldn’t be trying to suggest a Suffield cut when the item up for discussion was whether or not to raise non-residential taxes, as had been suggested by county staff. He challenged Geigle to get a show of hands from councillors to see where they stood on the tax issue.
“You are assuming some of us on council are in favour of (not raising taxes on non-residential). Dustin has said he doesn’t want to see it, but that doesn’t mean the other eight of us are into what he said. So we might have to solve that one first, and get a show of hands before you start trying to cut something,” said Oster.
“If you don’t know your options, you don’t know what your choices are,” retorted Geigle. “You have to see where you can cut something before you give up and decide to raise the taxes for the third time in four years.”
Geigle then sought Coun. Dan Hamilton’s opinion on the matter, especially given Hamilton would be one of the 1.7 per cent of business owners hit hardest by the proposed tax increase.
“Mine alone will go up about $5,500,” said Hamilton doing a quick calculation factoring in the proposed tax hike’s impact on his own businesses in Dunmore. “We’re stuck. We should have been doing this (increase gradually) a long time ago. Now we are between a rock and hard spot. I don’t know what to do.”
Hamilton’s sentiment was shared by many on council. The rock and the hard place? You either take away the possibility of a much needed infrastructure project in Suffield, which was fully fundable in 2017 due to accumulated grants (representing 80 per cent of the total cost) and $2.7 million in direct funding available through the county’s existing sewer and water reserve funds- or raise non-residential taxes by 11 per cent.
Realizing the choice called for hard reflection, Reeve Geigle suggested the matter be tabled until the next Cypress County council meeting to give councillors more time to mull it over before a final vote. Council agreed and voted in favour of the suggestion.
The 2017 budget must pass before the end of December to be in compliance with Municipal Government Act.

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