Almost debt-free and with no tax rate increases planned for next year, Red Deer County is in an enviable position, says Mayor Jim Wood.
“A lot of municipalities are worrying about their debt limit because they are borrowing so much money,” he said. “We will be debt-free through this budget process.”
The county’s budget anticipates paying off the last of its debt — $362,440 — next year, leaving it debt-free in 2018.
Council unanimously passed its three-year operating and capital budgets on Tuesday. Next year, the county expects to spend $45.9 million on the operating side and $27.9 million on capitalprojects, such as roads, bridges and other infrastructure.
In light of the province’s economic situation, council opted to hold the line on tax rate increases and freeze council and staff wages for 2017.
“What we’re trying to do with this budget is not to put an extra burden on our local residents,” said Wood.
“I think what this budget has done is it is identified the things necessary for continued economic growth within our municipality.”
Besides creating employment, the county’s infrastructure work will encourage more business investment and increase the amount of non-residential taxes collected.
A word of caution was voiced by former councillor and Bowden-area farmer Dave Hoar, who is concerned the county is draining its reserve funds too quickly to keep taxes low and balance the budget.
The county’s total reserves are anticipated to decline from $46.7 million at the end of this year to $26.9 million at the end of 2019.
“They’re relying extremely heavily on reserves over the next four years,” said Hoar, who sat on council for two terms until 2013, in an interview.
“Without criticizing, I see that there is very little, if any, restraint on either the operating or the capital budget and they are relying solely on reserves to fund the current budget and those for the next several years.”
Wood said that dipping into reserves is not his first choice but council is taking a conservative approach.
“Would I like to use this many reserves? No. But I’m basing it on the economic times we’re in.” The county has decided to fund all of its bridge projects — $11.7 million over three years — out of reserves in absence of provincial funding.
If the economy picks up, the county will be able to set more money aside again. It is hoped the province will also loosen its purse strings and prove more funding to municipalities.
Heather Gray-Surkan, county director of corporate service, said 2019’s reserve level of $26.9 million is still considered “healthy.”