Budget 2017: Council cuts budget by $700,000

Trent Ernst, Editor

Council approved its 2017–2021 Strategic Plan, cutting about $700,000 from it’s 2016 budget.

As always, this is not final until the bylaw is passed, which won’t happen until after the District receives its final tax roll.

Every year, writes CFO Jordan Wall, Council considers and adopts a Financial Plan which allows District staff to continue the operation of the community.

“This plan, adopted as a bylaw, contains five years of spending approval. However, communities update the plan every year to keep it more current.”

The Operating Plan for 2017 sees half a percent decrease over core spending from 2016. In 2016, the town spent $9,890,596 on things like water, sewer, the cemetery, public works and protective services, as well as things like Grant in Aid and the golf course.

For 2017, the town is budgeting $9,208,634.

A large chunk of that comes at the expense of the golf course. Last year, the District spent $502,298 to keep the course running, which was more than budgeted. “Because of the operating agreement, the District was required to purchase the alcohol and food for the Golf Course,” says Wall. “This increase is the result of higher than expected sales and will also result in more revenue for the District.”

This year, the District is only planning on spending $244,290 on the course. Much of that decrease will come as the District is moving to lease out the Golf Course Restaurant, rather than the operating agreement they had over the past few years.

While this will reduce the total cost to the District, it puts them back into a situation where they are leasing out the restaurant.

Their previous attempt at leasing out the restaurant and the pro shop saw the lessee, Graham Johnson, break a five year agreement with the District. The District is currently pursuing court action against Johnson, seeking $57,000 in damages for breaking the lease.

Also being cut is the total Grant in Aid, which drops from $598,690 to $532,000, as well as Development Services, which loses about $32,000, being reduced from $364,410 to $332,319.

Most other categories will see their spending increase slightly.

According to the Canadian Federation of Independent Businesses, a taxpayer’s watchdog group, fewer than five percent of municipalities they have examined have kept their municipal core spending under a yearly three percent growth. “In the time span of 2004–2014 the District saw its core spending grow 35 percent, just under average for the Province,” writes Wall. “While this data is not yet available it is likely that over the past two years, Tumbler Ridge is one of the highest performing communities in this area across the province with a two percent decrease in operating expenses.”

Other communities, he says, are seeing a six to eight percent in spending over the same time period.

Wall cautions that the District still holds money in escrow around Site 18, or Monkman Commons. “As Council will see below, the costs of Site 18 have caused the municipal spending reports to be quite different than what is expected,” he writes. “Added into the final Schedule A for the bylaw readings will be the remaining money the District holds for Site 18 as we expect the full amount to be paid out in 2017. This will amount to approximately $1,400,000 in additional spending and revenue.”

Wall points out costs for Monkman Commons are not incurred by the District. Rather, he says, this is HD’s money, “which the District holds and our revenue will increase by the same amount. Even though this is not ‘our’ money it is still flowing through the District so must be accounted for.”

He also says that the numbers presented for 2016 will change over time. “Municipal spending follows very strict accounting rules and money will be shifted in, out, and over, as staff prepares for its annual audit.”

He cautions council that these numbers should not be used as a basis for determining 2017 spending levels. “The projects administration has been asked to undertake in 2017 are different than in 2016 and as such require different funding levels.”

Last year, says Wall, the District spent more on government Services than it budgeted. “This overage comes from two areas: unbudgeted lawsuit settlements ($310,000) and Site 18 costs which flowed through the District (approx. $700,000).”

For 2017, the Community Centre budget has increased. “Due to not having a manager at the Community Centre for a number of years other departments have taken management of areas that should rest with the Community Centre,” writes Wall. “Those responsibilities have shifted back to the Community Centre manager and have resulted in a re-orientation of spending within departments.

Councillor Howe says he’s been pushing to see the budget reduced 15 percent across the board to match the drop in income after Peace River Coal was granted Closure Allowance. “We’re looking at losing about 15 percent of our revenue after what Peace River Coal did,” he says. “We need to be looking at our budget and looking for places to cut 15 percent. With that in mind, we’re going to try and find areas where we can find that 15 percent reduction. We’re using about two million dollars in revenue. That’s the elephant in the room.”

Wall says the most unpopular thing a Council can say is tax increase. “Residential taxes are around $1.1 million,” he points out. “One mine closed is the equivalent of losing all the residents. We either have to find other sources of money or look at ways to decrease spending. We need to look at cutting another seven or eight percent. We may have to make some hard decisions and some unpopular decisions.”