Small Alta. municipalities plan for funding cuts

Cities, towns and villages in Alberta are taking a strong look at how they plan on generating revenue in the coming months, given the province might cut funding to their revenue streams.

Recent revelations in the MacKinnon report, which recommended municipalities shoulder more capital costs, are sending mixed messages to elected officials, they said, causing them to explore ideas on how they can generate revenue without compromising services.

“We wouldn’t want to see a drop in funding but the province is laser-focused on shrinking the deficit,” said Brooks, Alta., mayor Barry Morishita, who chairs the Alberta Urban Municipalities Association executive committee, while speaking at the organization’s convention in Edmonton September 25.

Related story: Alberta proposal could see towns pay more for policing

Even though downloading costs on to municipalities is only a recommendation at this point, it’s still got leaders looking at their revenue options.

Members acknowledged they can either raise taxes, increase service fees or hope for more funding from the province to balance their books while maintaining high levels of service.

Municipalities can’t run deficits in Alberta and are limited in other ways to generate revenue.

Of the options that were discussed, many members appeared on board with raising services fees, such as for garbage collection or recreation facility use, arguing it’s a transparent way to show value to residents.

When asked why they won’t increase fees, many reported they are concerned about the impact it will have on residents. There was also a lack of political will from some.

“Fees need to be used thoughtfully,” said Tanya Thorn, councillor with the Town of Okotoks, who sits on the executive committee. “We want to get the balance right.”

Raising property taxes is not easy and usually out of the question, leaders said, given many residents become upset.

They said government transfers will always be required, though the amounts could decrease if the government acts on restraining spending.

The province has indicated it will offer predictable and stable funding to municipalities, but there is no word yet on how much will be available.

Other options worth exploring include potentially imposing levies on livestock animals, the panel suggested.

It pointed to Lethbridge County’s successful efforts to impose a tax on feedlots, which sees a $2.50 charge per animal and generates revenue for repairs and maintenance to roads and bridges.

As well, the panel suggested municipalities explore getting more revenue from property leases, local improvement charges, cost-sharing agreements and by licensing Uber and Airbnb.

Following the suggestions, other municipal leaders stepped forward to offer more ideas.

They included implementing a sales tax, sharing revenue from cannabis operations, reducing red-tape, implementing property tax penalties for vacant properties, and getting compensated for services they provide to residents that don’t live within their boundaries.

Others suggested they need legislation changes so they can develop brownfield sites, which are thought to be potentially contaminated. The province is looking at possibly changing rules to allow for that to happen.

As well, some wanted to see if all communities could somehow benefit from revenue generated by the province’s oil and gas sector.

Others hoped there was a way to collect taxes from decommissioned schools and hospitals in their communities. There are lots of them, they said.

As for the province potentially downloading policing costs onto communities with populations less than 5,000 people, members seemed mixed on the proposal.

Those in favour believed it will help ensure there are more boots on the ground, while those against it questioned whether they will actually see any benefits.

They all agreed that any new money generated for policing goes into front-line services, rather than into general revenue.

“If everything is downloaded to us, it sounds like it could be a transfer of debt,” said Smoky Lake, Alta., mayor Hank Holowaychuk, speaking to members.

St. Paul, Alta., councillor Nathan Taylor said municipal officials must ensure the province isn’t going to download costs onto municipalities.

He said while he was a councillor in Smoky Lake, the town was asked to help pay for doctors.

“We don’t want to be without a doctor, so we fund those things,” Taylor said. “We need to make sure we need more revenue and that they aren’t downloading services that we can’t afford.”

Contact jeremy.simes@producer.com

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