Councillors showed their consternation while congratulating staff at Lacombe County for recording a year-end surplus of almost $3.6 million.
After much discussion, they agreed to transfer $870,672 to the operational reserve for projects being completed in 2013, during their meeting Apr. 25. Then $2,722,000 was transferred to four reserves as recommended by staff.
The surplus, with the $870,672 not included, represented approximately 6.93 per cent of the year’s total operating budget. The 2011 surplus was almost the same, at $2,764,430.
Tim Timmons, manager of corporate services, explained the surplus was the result of higher than anticipated reserves and lower than anticipated expenses.
Examples he provided included one of the road construction projects planned for last year — Range Road 2-4 to the Yuill subdivision — didn’t get completed and the county received over $288,000 from Trans Canada Trail towards construction of trails in the county — money that wasn’t budgeted.
The operational reserve received $500,000 to fund the cost of new financial software and the possibility of developing an agricultural master plan.
Councillors added $1.1 million to the bridge reserve. “As you know Lacombe County is facing a very serious bridge issue. Based on a combination of the significant number of aging bridge structures we have and the provincial government’s recent decision to eliminate the local bridge grant program, it is likely that considerably more Lacombe County financial resources will have to be dedicated to our bridge program in the foreseeable future,” wrote Timmons, in his report to council.
The tax rate stabilization reserve was increased by $132,000.
This reserve has been used to support operational costs during years when the county has experienced a significant loss of tax revenue due to property assessment appeals. Staff recommended putting the money into the reserve and then using it in 2013 to reduce the proposed tax increase from 2.75 per cent to two per cent.
The final transfer saw $940,000 added to the lake access reserve which is used to finance improvements, amenities and road development associated with improved lake access.
“I’m pleased to see we’re in a surplus again, that makes us very contrarian to everything else that’s happening in the county,” said Councillor Cliff Soper. “I think we’re in a very unique position, but I’m concerned we’re a little too contrarian on this one. There might be an expectation we can do anything.” He wondered if there was a way to become more precise in their budgeting so the surpluses aren’t as large.
But, he added, “this reflects very well on how we manage money here”.
Councillor Brenda Knight called for a further reduction in the tax rate. She wanted an additional $100,000 put into the tax rate stabilization reserve, reducing the lake access reserve by that amount.
Timmons told council that what they’re proposing to do is reduce the increase to 1.5 per cent on the municipal tax rate.
The mill rate bylaw is set for discussion at the next council meeting, he noted.
“I think there should be a discussion about sustainability and collaboration,” said Councillor Rod McDermand. “I don’t think we can go on much longer in isolation. There are more have nots out there than haves.” He suggested that eventually there will be a levelling in the province. “Do we want to be part of the driving force or a reaction to it.” He was speaking about the differences between tax rates in urban and rural jurisdictions.
County Commissioner Terry Hager said, “administration shares your concern over the surplus. Anytime we’re over five per cent, we have to do serious soul searching. We have tried, over the last four or five years, to be closer in our estimates.”
He added, “we need to take a longer term look at mill rates.
Lacombe County could probably get away with a zero per cent increase for two or three years but we don’t want to set up a future council.”
On the issue of collaboration, he thought the county had come a long way with its recreation plans and economic development areas with Eckville, Bentley, Lacombe and Alix. “We do have a model in place.”
Hager also indicated they know the assessment in Lacombe County is going to grow substantially in the future due to the $1 billion expansion at Joffre.
Throwing out other ideas, McDermand said there are roads in the county where it became obvious last year, due to the wet season, that substantial work is needed.
He also said, “I don’t see a commitment to broadband. A lot of people require internet service which they’ve got but they haven’t got broadband service.” He noted other counties are committing millions of dollars to this initiative.
Speaking in favour of the lake access funding, Reeve Ken Wigmore said, “I can guess we’re going to spend all that and quite a bit more when we do lake access.”
While councillors unanimously approved the staff recommendations, Knight warned she’s still going to be asking for changes to reduce the tax rate when it’s discussed.
Councillor Dana Kreil was absent from the meeting.
Councillors were provided with a line-by-line chart of reasons for variances in revenues and expenses as well as a list of the reserves at the end of 2012.
With the additions approved, the county’s total reserves increased from $49.3 million at the end of 2011 to just over $56.2 million at the end of 2012.
During their meeting councillors heard from their auditor that the 2012 financial statements were presented with a clean opinion with no issues found. They approved the statements unanimously.