M.D. of Lesser Slave River council gave final approval to the 2018 operating and capital budgets at its April 11 meeting in Flatbush. Director of finance Jason Warawa ran over the highlights and answered questions. Both the operating and capital sides are in a deficit position, most of which was proposed to be covered by withdrawals from reserves. But the proposal was also for a two per cent increase in property taxes.
“We pulled substantial out of reserves,” said Warawa. “But we felt we should be passing some of these costs on.”
For perspective, Warawa said one per cent of tax increase generates $140,000. “So we’re asking for $280,000.”
The base operating budget is $17,974 million. Added to that are $2.6 million in items earlier approved by council. Adding in a few smaller items (including $257,414 in debt repayment), the operating budget ends up at $22,764,227. That’s $2.3 million more than the M.D. expects to raise through taxes and other means.
On the capital side, council had approved 14 projects worth $2.6 million. That’s a fairly modest program, as these things go. The three biggest items are $468,000 in fleet replacement, $451,000 Widewater Complex renovations and $450,000 for a grader. Engineering on an Old Smith Highway project runs $250,000.
With the M.D. dipping quite far into reserves this year (knocking them down from $23.4 million to $19 million), councillor Brad Pearson asked what was an average amount for reserves. Warawa said five years ago the M.D. had $13 or $14 million and it grew into the low twenties. But in the past two years, he said, “we were hit with $2.2 million loss in assessment.”
However, he said it seems the situation has stabilized and assessment even grew a bit in 2017.
Councillor Robert Esau called it “disheartening” that there is around $400,000 in taxes it appears the M.D. can’t collect.
“It’s a growing concern,” admitted Warawa. On the other hand, he said, other municipalities have it much worse, having millions in apparently uncollectable taxes, largely from oil companies that have decamped. When abandoned assets are eventually sold off, municipalities that are owed taxes aren’t even on the list. Warawa said there’s a court case in process that might change that and establish municipalities as secure creditors.