LAC LA BICHE - Although some council members raised concerns over the financial ripple effects of not balancing 2021’s budget, ultimately the Lac La Biche County council agreed on a budget that maintains public services while exceeding the County’s projected revenue.
Total mill rates for 2021 are expected to generate $67 million in revenue. However, in order to maintain essential public services, the County will be spending more than $68 million to cover the costs.
Opting to leave mill rates the same in 2021 council will need to cover a revenue shortfall of approximately $1.2 million in order to float the budget.
The 2021 tax rate for farm and residential property was approved to remain at 3.12 mills. Rural non-residential tax will stay at 18.3647 mills and urban non-residential at 10 mills.
The municipal mill rates are a portion of the formula for determining overall tax payments for area ratepayers. The municipal mill rate is multiplied by the assessed value of a property, in addition to education and seniors rates applied by the provincial government to come up with actual payment tallies. In recent weeks, municipal assessors have informed councilors that property values overall have remained similar to last year’s assessments, despite economic challenges and the pandemic.
The idea to chart a similar course — not increasing municipal taxes, but also not lowering them — was preferred by most of council as a way to maintain services while keeping taxes affordable as many residents and business owners continue to struggle.
While Mayor Omer Moghrabi would have preferred to see some tax rebates given to small business in the community, the majority of council said the growing need to maintain community services during challenging times required at least comparable tax revenues to the previous year.
“While we didn't lower the taxes for our business owners... We are keeping our local owners' taxes at an affordable rate,” Coun. Charlyn Moore said.
Municipal administrators pointed out during the tax rate discussion that overall, Lac La Biche County has the third lowest municipal taxes in the province while continuing to provide a high standard of services to the community.
Reserves set aside in 2020 to fill the gap
This sentiment was echoed by the majority of Council members, including councilors Colette Borgun, Colin Cote and Lorin Tkachuk, who along with Coun. Moore support the withdrawal of $1.2 million from the Revenue Stabilization Operating Reserve Fund.
The special reserve funding was included in last year’s budget. It was designed as a preventative solution for fiscal uncertainty and maintaining economic resiliency for future years, according to the Lac La Biche 2020 budget report.
“The proposed use for this reserve is to cushion against downloading, grant losses, or taxes lost from assessment changes.”
Councilors at this week’s tax discussion said the creation of the fund — which holds approximately $5 million — was an indication of proactive planning on their part in the face of upcoming years of financial uncertainty.
Not all Council members were in favour of supplementing this year’s budget shortfall — and the potential of future years — with the operational reserves, however.
“I'm looking at years forward,” Coun. Sterling Johnson said. “We should have adjusted things to reflect what we are spending this year.”
With the provincial Municipal Sustainability Initiative (MSI) grant set to decrease significantly in 2022 and 2023, the County will likely have to endure more fiscal uncertainty in the years to come.
In its final reading the 2021 Tax Rate Bylaw was carried seven to two by council.
The mayor says the overall commitment by council not to increase tax rates is based on good financial planning and a grassroots knowledge of the struggles residents are facing.
“The pandemic has been a struggle for everyone, and Council wanted to ensure that we don’t increase the tax burden on our residents,” sad Moghrabi. “However, this past year, it’s become clearer to us than ever before just how much citizens rely on the essential services that Lac La Biche County provides. We planned for exactly this scenario, and thanks to our reserve fund, we’re able to keep all of our services and programs at the same level without raising taxes.”
Associate CAO Dan Small says this week’s decision to approve the 2021 tax rates allows tax notices to be issued to residents and property owners within the deadlines set out in the Municipal Government Act. Notices are expected to be sent to residents in the coming week.
Taxpayers will have until June 30 to submit their payment to the County before incurring penalties.
