The 2021 Operating and Capital budgets were presented and approved by Kneehill County council during the regular council meeting on Tuesday, February 23.
There were additional challenges in preparing the 2021 municipal budget, including the unloading of policing costs on rural Albertan ratepayers and financial strains due to the ongoing COVID-19 pandemic.
“The budget is more than a bunch of numbers,” said Director of Corporate Services Bill McKennan during the presentation. “We’re trying to make the budget... articulate the level of services council is providing to ratepayers, outline the multitude of programs being delivered, articulates the priorities of council.”
Prior to adjusting service levels and accommodating other revenue losses, an initial budget variance of more than $2 million was identified. Mr. McKennan noted several amendments were recommended to reduce expenditures.
“All the controllable costs council has control over are down in the 2021 budget,” Mr. McKennan said. He added this was also seen in prior budgets for 2019 and 2020.
Although budget constraints and pressures are a familiarity for council and administration, some additional pressures included changes “driven by provincial policy.”
One such change was the reduction in tax revenues on oil and gas properties due to assessment model changes and the recent provincial policy to disallow collection from well drilling sites. The county is estimated to lose approximately $400,000 from well drilling sites and $650,000 on linear oil and gas property assessments, on top of revenue losses of nearly $2 million from shallow gas taxes in 2020.
The unloading of police funding costs presented another challenge to the budget. The county will pay the province $240,000 in 2021 for RCMP policing, which will increase annually; by 2023 the county will expect to pay $480,000 annually according to the budget.
An ongoing, and major impact, on the municipality’s budget has been the COVID-19 pandemic. In 2021 the county anticipates revenue losses of some $400,000, though these revenues are expected to return to normal as the pandemic ends and the economy recovers.
To compensate for revenue shortfalls and new expenses from the provincial government, it was proposed to increase tax rates on farmland, residential, and non-residential properties throughout the county. The increase will see an average of $37 per $30,000 assessment value on farmland, and between $20 and $62 on residential properties valued between $100,000 and $300,000, while non-resident property will see a five per cent increase which will have varying impacts based on assessment values.
Kneehill County has also made some significant changes to help reduce expenses. Council approved a new remuneration policy during the Tuesday, March 9 council meeting which will reduce council base pay and per diem rates by approximately 15 per cent; this is anticipated to save the county an estimated $52,000 annually. The county has also reduced two seasonal and permanent positions and reduced external contracts by insourcing work, which will help save approximately $580,000 annually.
Due to the COVID-19 pandemic, several capital projects were unable to be completed in 2020 and these were carried forward from the previous year’s budget.
This includes more than $3 million for the ongoing Torrington gravel pit and $775,000 newly budgeted to complete hauling and crushing of gravel in 2021. The Torrington gravel pit is expected to provide the county with gravel for the next 10 to 15 years, and is anticipated to save the county more than $27 million over this period.
An additional $5.8 million was carried forward for bridge replacements and rehabilitation, however, the county anticipates $3.7 million in grant funding towards this project; and $1.32 million has been allocated towards a day use washroom and retail facility at Horseshoe Canyon, though this project is currently on hold pending a finalized report from the Horseshoe Canyon Focus Group.
The county has also budgeted $595,000 to upgrade fire communication systems, $242,000 to complete upgrades to the Ron Gorr Memorial Arena in Torrington, and $160,000 between economic development initiatives and ongoing facility needs.
Council approved both the 2021 Operating Budget in the amount of $29,947,902, and the 2021 Capital Budget in the amount of $12,815,858.