BONNYVILLE – A “rainy day fund” and deferring capital projects helped the Town of Bonnyville balance their 2020 capital and operating budgets.
The municipality’s capital budget comes in around $13.7-million, while the operating budget is sitting at roughly $21.6-million. Both were approved during council’s regular meeting on Tuesday, April 28.
Council decided against a municipal tax increase this year, partly due to the economic climate and as a result of the coronavirus pandemic.
“As to where the economy is today, and the fact that prior to this COVID-19 we had businesses that were struggling and things of that nature,” noted Mayor Gene Sobolewski. “We just decided that it was more prudent to hold the line.”
Rainy day fund helps balance 2020 operating budget
The 2020 $21.6-million balanced operational budget has an increased revenue of $54,825 from municipal taxes, which accounts for growth and a zero per cent tax increase.
The roughly $454,000 deficit the operating budget previously had was drawn from general operating reserves to bring it out of the red. Sobolewski described the reserves as the town’s "rainy day fund."
“If this sort of event continues for next year, we don’t have a source of revenue coming in. We could be in dire straits next year but we caught a lucky break,” he said.
According to director of finance Rene Stoyles, there’s roughly a $252,000 decrease in overall taxes being collected due to the Bonnyville and District Centennial Centre debenture being paid off in 2019.
“As a result of this, there will be a 3.2 per cent reduction in municipal taxes in 2020,” she noted.
School taxes have also gone down by roughly $419,000 due to a reduction in the annual requisition and an over levy in 2019. That means ratepayers in Bonnyville will be paying around $649,000 less in total compared to 2019, Stoyles stated.
“The reduction will be split between residential and non-residential properties,” she continued. “There has also been a reduction in assessments, the impact of which will also be split. Both conditions will result in a corresponding mill rate adjustment downward when we set the mill rate at the May 12 meeting.”
The multi-family residential subclass will be in effect for the first time in 2020 after council approved the new rate in 2019. The subclass, Stoyles said, equates to 4.59 per cent of all residential taxable assessments.
“As 2020 will be the base year for the multi-family assessment subclass, administration will calculate the residential tax by removing the tax amount collected from these properties in 2019 to calculate the residential and municipal tax rate and then apply the same mill rate to the multi-family residential assessments,” Stoyles detailed.
Since the town was approved as a Family Resource Network (FRN) hub by the province on April 1, just over $143,000 was added to the budget to account for the dollars the municipality is receiving for those services. The FRN spoke portion has $50,000 put toward it.
A number of changes from the interim budget were passed based on actual figures that came in.
Around $3.23-million is being put toward roads, streets, walks, and lighting, with the annual repair and maintenance costs coming in at $270,000 for 2020.
Administration has also included $350,000 for purchasing Cold Lake water from September to December for after the regional waterline is completed.
Other expenses included $2.2-million for police services, roughly $499,400 for fire, $191,146 toward bylaw expenses, and $943,823 for the water treatment plant.
A new line item was included in the operational budget for the money the town’s putting towards fighting the coronavirus. So far, in response to COVID-19, the town has spent around $31,000 on salaries and wages for frontline workers and materials.
Stoyles explained administration will be reviewing all departments throughout 2020 to “ensure maximum cost savings are realized to aid in reducing the transfer to balance operation, which right now is forecasted to be $454,151.”
Projects deferred to balance capital budget
The 2020 capital budget was approved by council at $13.7-million.
The town is estimated to receive about $2.21-million from the MD of Bonnyville through the inter-municipal cooperation program (IMCP), along with $1.85-million in grants from the province and $466,733 from the MD for the regional waterline.
“The final capital budget includes revenue from the debenture of $6-million, which had $1.2-million remaining after deducting the $4.7-million from the 2019 ID 349 amount not yet received,” noted Stoyles.
Other revenue for the 2020 capital budget includes a $200,000 transfer from the water capital reserve and $269,790 being taken from the general capital reserve.
In order to ensure the regional waterline is fully funded, a number of capital projects have been deferred to 2021 and beyond.
“Should we receive the ID 349 funding, projects that have been deferred will be brought back to council for a decision as for which projects to proceed with in 2020,” Stoyles explained.
Work on 47 Ave. and the hospital alley was put off until 2021, saving approximately $2.1-million. Should-do pool upgrades, the recycling compound, streetlight replacement, reservoir engineering, the staging area washroom and warm-up shack, a fine arts feasibility study, and playground upgrades also didn't make the cut and were deferred to next year.
The annual street overlay and patching program and paving was increased by about $212,000 to just under $589,000 to include the 2019 carry-over projects. Work on 47 St. and 49 St. is budgeted at approximately $579,000 for this year.
The airport redevelopment plan had $745,000 carried over from 2019, including roughly $465,800 in funding from the MD of Bonnyville.
To account for carry-over from 2019, around $538,000 was added for trail upgrades to connect the MD trail to Jessie Lake walking trail, and $170,000 for the trail on the north side of 50 Ave. from 37 St. to 44 St.
While 2020 marks the end of construction for the regional waterline, Sobolewski expressed concern about the impact paying off the project could have.
“The component that’s quite scary is the debt that the town's incurring as a result that we didn’t anticipate having to borrow against.”
Sobolewski added, “The absence of the capital funding coming in from the ID 349 offsetting the waterline costs, we’re going to have to bear that ourselves. That’s why there’s been a dramatic reduction in capital projects.”
The provincial government has yet to make a decision on the ID 349 funding for 2019 they held back, but Sobolewski is hopeful to hear some news in the coming months.