Red Deer County council narrowly passed a motion on Tuesday to table its operating and capital budgets to get public feedback after councillors voiced concerns about spending and a proposed 3.5 per cent tax rateincrease.
Approving the tabling motion is usually a unanimously supported formality meant to provide two weeks for council to hear from ratepayers before putting the budget to a vote.
However, several councillors voiced concerns about the proposed $56.7 million operating and $21.6 million capital budgets and the tabling motion was passed in a split 4-3 vote.
Coun. Dana Depalme was one of three councillors, along with Councillors Lonnie Kennett and Christine Moore, to vote against tabling.
Depalme said given inflation and the other financial pressure municipalities are under a tax increase was likely coming, but she was concerned the budget proposed a 3.5 per cent increase.
“I’m just really having a hard time, especially with the 3.5 per cent,” she said. “I’m not comfortable with that 3.5 per cent at this point in time.”
The county has held the line on taxes for the past four years, with the exception of small increases to special levies.
Heather Surkan, county corporate services director, said the budget ” illustrates inflationary pressures and continues to maintain service levels with a 3.5 per cent projected tax rate increase.” The final tax rate will not be set until the spring.
“We have made every effort to find partnerships with other levels of government to ease the burden on Red Deer County finances.”
The amount pencilled into the county’s capital budget to continue a project to improve Internet service through a multi-million-dollar broadband initiative concerned other councillors.
The budget includes another $14 million for the initiative, which would be funded through $10 million in hoped-for government grants and $4 million from the county.
Kennett expressed reservations about the proposed broadband spending when so few county residents have yet to benefit from improved internet service.
The county has laid a lot of fibre optic cable, which allows for high-speed Internet connections, but the focus now should be on connecting residents.
“If we’re just laying more fibre we’re not getting out to the people,” he said, adding the county needs to take a close look at how it is spending its broadband money.
“We have spent $18 million and we’ve got 45 wireless customers. That’s horrendous.”
Similar concerns were voiced by Moore.
This is a “tough budget” and the county needs to focus on building a customer base for its high-speed wireless service, she said.
“I’m really, really uncomfortable. I think it’s time to focus on getting these customers.”
Mayor Jim Wood said residents have told him often that poor internet service is a serious problem. The county is not committed to spending millions more on broadband. If the grants fail to materialize, broadband spending will come back to council for a decision.
Wood said at a time when inflation is running at six to eight per cent, the county is proposing raising taxes only 3.5 per cent.
He urged council to pass the tabling motion to allow the public to provide their input on the county’s spending plans and the direction it is taking.
“In two weeks time, if we hear from our residents we’re not on track we can amend this budget.”
Wood said in an interview council is well aware of the challenges ahead, including inflation, dwindling government grants, unpaid oil and gas taxes among others.
“We forecast a very conservative budget every time. By doing that, it creates the assurance that we’re not going the wrong way. So, we’re very cautious.”
All other municipalities are facing the same financial challenges and the county is trying to avoid creating a “shock situation” for residents with a sharp increase in taxes.
Coun. Connie Huelsman said many other municipalities are looking at raising taxes higher than the county is proposing because of the economic situation.
She wants to hear what residents have to say because the only option besides raising taxes will be to reduce service levels.
Huelsman said under the province’s funding formula Edmonton and Calgary getting more funding but “rural municipalities continue to receive increasingly less; yet our requisition from schools and policing are also increasing.”
The budget returns to council for debate on Dec. 13.