The 2022 draft operational budget will include $60,000 for the Community Grant Program (CGP), as directed by council during the regular council meeting on Nov. 2, despite a reduction in the Automated Traffic Enforcement (ATE) revenue.
Following a discussion around the revenue deficit identified in the ATE program, which funds the CGP, council decided that the $60,000 is to be funded from the ATE revenue with the rest of the balance to be funded from taxation. This will come forward in a draft budget and council will make final decisions during budget deliberations.
Coun. Albert Ostashek explained that the budget will include any ATE revenue as the primary source of revenue with a target of $60,000 and gives council an opportunity to have a discussion around the CGP during budget time.
“I am absolutely committed to putting $60,000 to the community grant program regardless of where it comes from. The worst case scenario would be from taxation dollars. But I would at least like to slot it in and then have that conversation of if we have a firm amount of let’s say $44,000 accessible within the other revenue source then we can allocate $44,000 to it and only $16,000 through taxation,” said Mayor Marcel Michaels.
Coun. Brian Laberge noted that the $60,000 was an arbitrary number and wanted a realistic discussion during budget time on what that number should be, while Ostashek noted that this was the same number used in 2021.
Regarding the ATE, the provincial government froze any changes to this program two years ago and there is no indication of any development in that, stated interim CAO Laura Howarth. The revenue deficit is a result of reduced ATE program revenue and an increase in the amount of uncollectible ticket revenue, which results in bad debt write-offs. Write-offs must be balanced using funds from the ATE reserve.
While there is a small amount of net ticket revenue from the ATE program, about 30 per cent of the money placed in reserve from the previous years’ collected revenue is actually uncollectable, deemed as bad debt, and must be pulled out of the reserve, explained Carla Fox, Hinton’s director of corporate services. This means the net effect was a negative amount on the ATE reserve and the impact in 20201 was an ATE Proceeds net revenue of $0.
Due to this, the contributions to the Safety Initiatives Reserve Fund and Defined Reserve Fund as per the ATE Proceeds Policy have also been affected, with no contributions planned for 2021.
Coun. Ryan Maguhn unsuccessfully put forward a motion to prepare the budget based on the projected estimated revenue from the ATE and to prepare a report highlighting funding amounts for the 2022 CGP. He did not want to see the CGP line item moving forward without any funding behind it, and felt this was a more holistic way to discuss the future of the program instead of defaulting on the use of taxation. He argued that council should wait and see what the initial ATE revenue is and then discuss topping the program up from there.
Ostashek noted that this would pose a risk of no funding for the CGP in 2022. Based on when the 2021 preliminary year-end financials would be ready, administration wouldn’t know exactly what revenue was generated and what the bad debt was this year until February 2022. Fox added that there is currently $720,000 within that reserve and that bad debt is estimated at just over $200,000 with revenue based on previous years at about $37,000, plus additional bad debt.
The ATE revenue in the draft budget will be an estimate, although more accurate than current numbers, said Howarth. With the uncollectable ticket revenue trend identified, a review of the ATE program is planned to be completed before June 30, 2022.
Masha Scheele, Local Journalism Initiative Reporter, The Hinton Voice