Cranbrook city council and administration are signalling that it is going to be a very difficult budget season amid rising cost pressures as elected officials and staff get set to parse through the details over the coming weeks and months.
City council identified infrastructure maintenance and renewal, community safety and well-being, economic development and diversification, housing and climate change adaptation as the top issues to consider as staff develops a budget framework for next year.
Acting Mayor Mike Peabody led the discussion by putting a motion on the floor identifying three issues, as each councillor around the table offered their own top-three priorities. Housing and climate change adaptation were later added following the discussion.
“This is the kind of direction staff really needed prior to embarking on the tough work ahead that we have to do ahead before we come back,” said Mark Fercho, the city’s Chief Administrative Officer. “We’ll touch many more times with council during the budget process, but there’s so much work we can do behind the scenes with this level of guidance from council on what’s important.”
That led into another discussion on tax levy increases.
“This is an unprecedented year of cost increases and we know that we’re going to be challenged,” Fercho said. “And that’s why I’m asking for council’s priorities so that I know where we as staff can propose some cuts within or service reductions within in order to keep it as low as possible and not offend council that we’ve removed something that council felt was a priority.”
While Fercho was seeking a specific percentage increase limit on the tax levy, city council didn’t formalize any numbers. However, city council’s debate provided some insight on how high the tax levy increase could get, as a consistent number frequently raised centred on 5.7 per cent — the projected increase for 2024 based off 2023’s five-year budgeting process.
Even if the budget meets the 5.7 per cent tax levy increase projection, service reductions will still likely be necessary, according to Fercho.
Mayor Wayne Price, who attended remotely by video conferencing, was blunt in his assessment of where the tax levy increase may land this cycle.
“Quite frankly, I don’t think there’s a chance that we can come in at 5.8 per cent without turning the city almost upside down,” Price said. “We’re going to be eliminating services, we’re going to be eliminating projects that I think are probably critical projects.
“…I have a real fear of double digits, that’s for sure, but personally, I don’t think 5.8 [per cent] is a reality based on some of the discussions we’ve had recently.”
Both councillors Wes Graham and Norma Blissett were firm on the staying as close as possible to the 5.7 per cent projection.
“I’m not comfortable with eight per cent, 10 per cent. I just don’t think we can put that on our taxpayers,” said Blissett.
“My personal viewpoint on this, I’m sure nobody will be shocked is 5.7 [per cent] is where I will stand for my ceiling and if we want more than that, I want a plan that’s going to drive revenue,” Graham said. “Where are the ideas and the outside-the-box ways to get building happening in Cranbrook?
“…Give me a plan that drives some revenue and I might consider moving my target up, but if I don’t see anything that’s going to drive any additional revenue, or at least try to, I’m not going over 5.7 [per cent].”
Supply chain pressures for parts and equipment, contractor costs and availability and municipal costs of doing business, such as fleet insurance, are all driving the city’s budgetary challenges.
Significant major infrastructure projects are also on the horizon, such as the replacement of the Gold Creek Dam which is estimated at $14 million.
Both city council and administration will be meeting for budget sessions over the coming weeks to parse through department operations and work plans for the year, before decisions are made that could potentially impact services.