An interim operating budget for Kananaskis Improvement District iw set at an eight per cent tax increase for 2023.
But council will return in January to further debate the municipal capital plan and 2023-25 operating budget, with $1.49 million in taxation revenue being required to deliver service levels being considered in the draft operating budget's first year.
The increase, if approved by council, would serve as an eight per cent jump in taxes collected compared to 2022 and 11 per cent from 2021.
Council passed an interim 2023 operating budget at its Dec. 13 council meeting, allowing further time for debate and for administration to explore amortization impacts to the budget, in addition to receiving updated property assessments which will help dictate residential and non-residential tax rates.
“We’ve worked really hard to try to figure out a way to get this budget to a palatable place,” said council chair Melanie Gnyp, also part of the budget and audit committee that worked with administration on the draft budget. “We’re still looking at an 11 per cent increase, which is a lot. I know that some of our neighbours down the road have higher ones, but it’s a lot.”
The draft operating budget totals $2.42 million for 2023 and introduced municipal mill rate comparisons, but did not elaborate on what that could mean for residential tax rates year-over-year to meet the required revenue to deliver the service levels considered in the budget.
“Preliminarily, analysis has been done in the background, but we don’t have enough information to bring here today to give a good understanding of what that looks like,” said CAO Keiran Dowling. “Which is why we used the general municipal rate, because we understood that based on the property assessments that we have.”
In 2023, the draft budget presents an increase of $71,657, or three per cent, in expenditures compared to 2022 projected expenditures.
The bulk of new operating costs is for Kananaskis Emergency Protective Services, with an additional $61,171.
“We’ve been getting reports from our emergency services director on service delivery of the emergency services function, and I would say this is our most important functional area because it’s our most expensive functional area,” said Coun. Darren Enns.
Nearly half of the operating budget is dedicated to emergency services, with more than $1.1 million dollars in projected capital expenses for 2023. A large portion of municipal infrastructure costs at $132,237 comes from the maintenance and function of the Kananaskis Emergency Protective Services Centre (KESC).
Enns pointed to the latest report from KESC fire chief Gary Robertson to council in November, where Robertson shared data showing a distinct split between the level of service required by visitors compared to residents.
The report notes zero calls to KESC made by residents from September through October, where 22 calls were made by visitors and 11 by businesses.
Emergency services have responded to seven resident calls compared to 107 from visitors through the first 11 months of 2022.
“When you look at $1.1 million over a $2.4 million budget, my mind goes directly to that split of who we serve with this service. … The reality is that 45 per cent of our budget goes to providing emergency services to park visitors – 45 per cent,” said Enns.
“If we’re looking at substandard numbers, that’s a pretty substandard number.”
Enns questioned how much council has been receiving from the Kananaskis Conservation Pass, of which none has ever been allocated to KID.
“I think we provide a lot of services to visitors and I think we should be proud of that,” he added. “I think it’s important that visitors are safe when they visit the Kananaskis area and our fire department should be part of that, but the reality is the burden of that falls on ratepayers in Kananaskis and that’s … troubling.”
Other operating costs are administrative services ($544,422); garbage and recycling collection ($359,130); amortization of tangible capital assets ($165,937); utilities ($83,638); and transportation, including snow and ice removal, minor repairs and maintenance, and other ongoing road servicing by Alberta Transportation’s contracted service provider Volker Stevin ($105,000).
Administration is recommending another $150,000 of tax relief for ratepayers through contingency operating reserves in 2023 and $100,000 is proposed for 2024.
“That relief has been continuous from what was provided as COVID-19 relief in 2020, at the initial onset of when that was established in council,” said Dowling.
The idea is to ease the burden on KID’s tax base, but also gradually “off-ramp” the municipality’s financial support.
The general municipal tax rate increased two per cent for KID in 2022. Forecasted rates put 2023 at an eight per cent increase over 2022, a four per cent increase in 2024 compared to 2023 and a nine per cent increase in 2025 compared to 2024.
“2025 is a big one,” said Dowling. “This is where the current resolution of council to transfer operating contingencies to provide relief to the operating budget ends.
“Council was intent on trying to offer a soft off-ramp to that relief process from 2020.”
The five-year capital plan also includes large expenses for KESC, including payments for the acquisition of an aerial firetruck.
The proposed 2023 capital budget includes $1.19 million in capital spending, with the primary funding sources being provincial grants. Contingency reserves make up the rest of the required funds to secure capital expenditures in 2023.
Of particular significance in the capital budget and plan is the new replacement of the KID aerial firetruck, also known as the Quint.
The 2024-28 capital plan specifies the full possession and delivery of the apparatus, but a significant down payment of $498,410 is required in 2023 to ensure delivery by 2024, with another $30,000 for repair and maintenance of KESC’s existing Quint firetruck.
The full cost of the new firetruck is confirmed at $1.56 million, with $914,408 coming from MSI funding and $650,000 from capital and operating contingency reserve funds.
Council opened 2022 with $3.66 million in reserves and is forecasted to end 2023 with $2.03 million, a depletion of $1.634 million, with another $3.99 million in expenditures from 2024-28. Reserve balances are forecasted to be around $2.24 million by the end of 2028.
Other capital expenditures expected for 2023 include the fire protection non-routine maintenance program ($75,000); a transit service feasibility study ($20,000); electric vehicle charging stations feasibility report ($10,000); water metre replacements ($30,000); FireSmart programming and project management ($200,000); telecommunication costs, as a placeholder with project details forthcoming in 2023 ($300,000); community association grants ($20,000) and Kananaskis Public Access Defibrillator Maintenance (KPAD) ($2,500).
Once approved, the 2023 tax rate will represent three years of proportionally split taxation in KID since council passed the KID tax rate policy in 2021. The split is set at 72 per cent non-residential and 28 per cent residential. The rates are established based on benefits received from municipal spending, based on the policy.
Approving the policy resulted in a decrease of approximately $108 for residential ratepayers and an increase of approximately $197 for non-residential ratepayers for a property assessed at $500,000 in 2021.
In the new year, council will direct the CAO to make a recommendation to Forestry, Parks and Tourism Minister Todd Loewen, to establish the rate of taxation by ministerial order. The final budget becomes official when it is approved by the minister.
Council will return to discuss the draft budget and capital plan at its Jan. 24 meeting.
FORECASTED GENERAL MUNICIPAL TAX REQUIREMENT
2023 PROPOSED CAPITAL PROJECTS
2024 PROPOSED CAPITAL PROJECTS
2025 PROPOSED CAPITAL PROJECTS
2026 PROPOSED CAPITAL PROJECTS
2027 PROPOSED CAPITAL PROJECTS
RECURRING ANNUAL CAPITAL PROJECTS
Jessica Lee, Local Journalism Initiative Reporter, Rocky Mountain Outlook