Town of Cardston 2016 - 2018 Budget

Approved December 18th, 2015

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Tableof Contents

ASSESSMENT & TAXATION

WHAT IS PROPERTY ASSESSMENT?

WHAT IS PROPERTY TAX?

WHAT IS SCHOOL TAX?

MILL RATES

MILL RATE HISTORY

4-YEAR BUDGET SUMMARY

DEPARTMENT OPERATING BUDGETS

COUNCIL

REQUISITIONS

ADMINISTRATION

EMERGENCY SERVICES

BYLAW ENFORCEMENT

ROADS, STREETS, WALKS & LIGHTS

AIRPORT

WATER SUPPLY & DISTRIBUTION

SEWAGE TREATMENT & DISPOSAL

WASTE MANAGEMENT

FAMILY & COMMUNITY SUPPORT SERVICES (FCSS)

CEMETERY

OTHER PUBLIC HEALTH & WELFARE

LAND PLANNING & DEVELOPMENT

ECONOMIC DEVELOPMENT

PARKS & RECREATION

CULTURE

ELECTRICAL DISTRIBUTION

DESCRIPTION OF MAJOR OPERATING PROJECTS

LEE CREEK BANK REHABILITATION

CAPITAL BUDGET

FUNDING SOURCES FOR CAPITAL PROJECTS

FEDERAL GAS TAX FUND (FGTF)

MUNICIPAL SUSTAINABILITY INITIATIVE

UTILITY FUNDED

RESERVES/RESTRICTED SURPLUS

CAPITAL BUDGET SUMMARY

DESCRIPTION OF MAJOR CAPITAL PROJECTS

LEE CREEK INTAKE ENHANCEMENTS

2nd AVENUE W, 3rd to 5th STREET

POOL BUILDING UPGRADES

ROTARY PLAYGROUND

GRADER REPLACEMENT

GENSET GENERATOR

ATKINS SUBDIVISION UTILITIES

LED STREET LIGHTING

ELECTRICAL SYSTEM UPGRADES

MAJOR PROJECTS TO CONSIDER

LONG TERM DEBT INFORMATION

PERSONNEL

UTILITY RATES

WATER

SEWER

GARBAGE


ASSESSMENT & TAXATION

WHAT IS PROPERTY ASSESSMENT?

“Property assessment is the process of assigning a dollar value to a property for taxation purposes. In Alberta property is taxed based on the ad valorem principle. Ad valorem means “according to value.” This means that the amount of tax paid is based on the value of the property.”

Source: http://www.municipalaffairs.alberta.ca/1538.cfm#What_is_Property_Assessment

WHAT IS PROPERTY TAX?

“Property taxes are a primary source of revenue for municipalities. Property taxes are used to finance local programs and services, such as:

  • Garbage collection
  • Water and sewer services
  • Road construction and maintenance
  • Parks and leisure facilities
  • Police and fire protection
  • Seniors’ lodges
  • Education

Each municipality is responsible for ensuring that each property owner pays his or her share of taxes. Property assessment is the method used to distribute the tax burden among propertyowners in a municipality.”

Source: http://www.municipalaffairs.alberta.ca/1538.cfm#What_is_Property_Assessment

WHAT IS SCHOOL TAX?

“In 1994, the Government of Albertaestablished the Alberta School Foundation Fund (ASFF).  This fund makes certain that the education property tax is accounted for separately from general revenues.

Every year the province calculates, based on assessment value, the amount each municipality must contribute towards the public education system. Municipalities collect the education property tax and then forward it to the province for deposit into the ASFF.”

Source: http://education.alberta.ca/admin/funding/tax/facts.aspx


 

MILL RATES

Each year, Council, during its budgetary process, approves the amount of revenue required to operate the municipality. From this amount they subtract the known revenues, such as grants, licenses, permits and so on. The remainder represents the amount of money to be raised by property taxes. The amount to be raised is divided by the total assessed value of all the property in the municipality and multiplied by 1,000 to decide the tax rate also known as the “mill rate.”

Town Council continues to remain fiscally responsible and has made a concerted effort to curb spending when reasonable to do so.  Council has also adopted the principle of full-cost recovery for utility infrastructure. This has resulted in the ability to reduce the municipal portion of the mill rate over the past 5 years.

MILL RATE HISTORY

The chart below outlines the mill rate trends since 2010. The 2016 mill rates will be set in May 2016.

DEPARTMENT OPERATING BUDGETS

COUNCIL

The Council budget deals with all costs associated with and incurred by Town Council, including per diems, fees for meetings and conferences, travel reimbursements and professional development.  Members of Council sit on various internal and external boards and committees and are compensated according to the Council Remuneration Policy.  The following table outlines the Council remuneration fees for 2015 through 2018.  Council fees will be adjusted in 2017 & 2018 as per the annual increase to the Employee Association Contract.

Council/Legislative Summary Operating Budget

Variance Highlights

·         2017 Council Expenses are higher as we anticipate additional expenses for new councilors (election year).

 


 

REQUISITIONS

The Municipal Government Act defines "requisition" as any part of the amount required to be paid into the Alberta School Foundation Fund that is raised by imposing a tax rate, and any amount to be paid to a management body referred to in the Alberta Housing Act.  The Town of Cardston pays requisitions to the Alberta School Foundation Fund and the Chinook Foundation.  The Chinook Foundation requisition is not identified separately in the revenue portion of the budget, but is included in the general municipal taxes noted in the Administration function.

 

Requisition Summary Operating Budget

Variance Highlights

·         Alberta School Foundation Fund tax amounts will not be confirmed until into the new year

·         Chinook Foundation requisition has been estimated at a 3% increase

ADMINISTRATION

The Administration budget includes finance, taxation, reception, utilities, communication, human resources and general administrative costs.  Taxes are included in the Administration budget, but are used to fund other areas of operations.

 

Administration Summary Operating Budget

Variance Highlights

·         Reduction in anticipated investment income

·         Part of MSI Capital will be used to fund eligible road maintenance costs

·         Office expenses & Misc. are higher due to contracted financial services

 


 

EMERGENCY SERVICES

The Emergency Services budget deals with Fire and Disaster Services.  The Town of Cardston fire services are provided through Cardston County Emergency Services in partnership with Cardston County, the Village of Glenwood and the Village of Hill Spring.  The Town contributes 52% of the required budget.  Alberta Health Services has leased a portion of the Fire Hall to provide a facility for their staff that are on call.  This lease was extended for a further 3 year term effective January 1, 2015. 

Emergency Management and Disaster Services is a function of administration with limited budget requirements except in the case of an event.

 

Emergency Services Summary Operating Budget

Variance Highlights

·         An additional $40,000 has been budgeted each year for the Town’s anticipated portion of future fire truck replacement costs

 


 

BYLAW ENFORCEMENT

The Bylaw Enforcement budget includes both bylaw and animal control activities.  The Community Peace Officer program continues to focus on animal control and vagrancy, with safety and security of residents taking a high priority.  The activities will include an education component along with enforcement. 

 

Bylaw Enforcement Summary Operating Budget

Variance Highlights

·         $10,000 is being reserved each year for a security system on Main Street

 


 

ROADS, STREETS, WALKS & LIGHTS

The Roads, Streets, Walks and Lights budget is focused mainly on Public Works activities.  This department is responsible for road maintenance including plowing, sanding, street sweeping, curb repairs, infrastructure maintenance, etc.  This budget also includes the cost for street lighting.

 

Roads, Streets, Walks & Lights Summary Operating Budget

Variance Highlights

·         Revenue is higher to reflect margin earned through the use of the Town’s machinery

·         2016 sidewalk repairs appear to be lower, but most of the difference is included in the capital budget

·         Materials, Fuel, Repairs, etc. fluctuates each year with crushing and machine repair expenses

·         Street lighting expense is lower due to the Town’s LED conversion


 

AIRPORT

The Town of Cardston owns the municipal airport.  The Airport Committee oversees the operation of the airport and submits the annual budget for Council consideration.

 

Airport Summary Operating Budget

Variance Highlights

·         2016 budget includes $5,000 for a real property report

·         2016 budget includes $6,000 for line painting for the runway

 


 

WATER SUPPLY & DISTRIBUTION

The Water Supply & Distribution department is responsible for producing potable water and maintaining a water storage and distribution system capable of providing suitable water to the residents.  The production and distribution adheres to the Canadian Drinking Water Standards and the standards set out in the license issued to the town by Alberta Environment.

 

Water Supply & Distribution Summary Operating Budget

Variance Highlights

·         The Disaster Recovery revenue and expense amounts are related to the Lee Creek bank rehabilitation work that will be funded through DRP

·         The water department now funds its own capital projects

 


 

SEWAGE TREATMENT & DISPOSAL

The Sewage Treatment & Disposal budget deals with all functions related to the collection, treatment and disposal of wastewater.  This system functions in accordance with the standards set out by Alberta Environment.

Sewage Treatment & Disposal Summary Operating Budget

Variance Highlights

·         Custom Work revenue is higher to reflect margin earned through the use of the Town’s machinery

·         An additional $14,000 per year has been allocated for storm sewer collection work

·         2016 includes $15,000 for grinder repairs at the wastewater treatment plant (WWTP)

·         An additional $15,000 per year has been allocated for pump repairs at the WWTP

·         The sewer department now funds its own capital projects


 

WASTE MANAGEMENT

The Solid Waste and Recycling function provides weekly waste collection services through a contracted collection system.  The Town also provides recycling services through a contract with the Cardston & District Association for the Handicapped.  Both the waste collection and recycling contracts expire in May 2016.  The Town is also responsible for the management of the Transfer Station located in the county, east of town.  Cardston is one of twelve member municipalities who belong to the Chief Mountain Regional Solid Waste Authority, which is the body that manages the regional landfill.

Waste Management Summary Operating Budget

Variance Highlights

·         2015 budget included $61,000 for CMRSWA Best Practices Study

·         The waste management department now funds its own capital projects


 

FAMILY & COMMUNITY SUPPORT SERVICES (FCSS)

FCSS is an 80/20 funding partnership between the Government of Alberta and the Municipality.  The Town of Cardston operates a regional program in partnership with Cardston County, the Village of Glenwood and the Village of Hill Spring.  FCSS designs and delivers social programs that are preventative in nature to promote and enhance well-being among individuals, families and communities.  The FCSS program receives its mandate from the FCSS Act and Regulations, however, the FCSS Board determines the priority of programs to be offered within the community. 

 

FCSS Summary Operating Budget

Variance Highlights

·         The Provincial Government increased the annual allocation for FCSS in 2016


 

CEMETERY

The Cemetery is owned and operated by the Town of Cardston.  The maintenance is provided through a contract and office staff oversee the administrative function.

 

Cemetery Summary Operating Budget

Variance Highlights

·         2016 includes $13,000 to construct a storage shed at the cemetery


 

OTHER PUBLIC HEALTH & WELFARE

The majority of the allocation within the Other Public Health & Welfare budget deals with weed and pest control.  The Parks department has trained staff members who provide weed control within the parks.  The majority of weed and pest control is provided through contracted services.  The Town has incorporated an intensive larvicide program along with limited fogging to control mosquitos.

Under agreement between the Cardston Health Society and the Town of Cardston, commencing in 1968 with updates to May of 1991, the Town established a Cardston Health Society Trust Fund of $20,600.00. The interest from this fund is allocated on a rotational basis annually to the Chinook Foundation and the Cardston Ladies Auxiliary.

 

Other Public Health & Welfare Summary Operating Budget


 

LAND PLANNING & DEVELOPMENT

The Development Officer provides development services to the municipality and works with the Municipal Subdivision and Development Authority.  The Town also employs a full-time Certified Engineering Technologist.  Planning advice and services are contracted through membership in the Oldman River Regional Services Commission.  Building code, gas and plumbing and electrical inspections are currently being provided through a contract with Park Enterprises. 

 

Land Planning & Development Summary Operating Budget

Variance Highlights

·         2016 budget includes $40,000 for the sale of a parcel in the West Industrial section of Town

·         2015 Building Permits was higher because of the construction of the Cardston Elementary School

·         General expenses decrease as the land use bylaw update, solar power feasibility study, and infrastructure master plan are finalized


 

ECONOMIC DEVELOPMENT

The Economic Development budget includes activities related to economic development initiatives including tourism.  Priority activities include investigation of a post-secondary education facility, developing incentives to attract business, and encouraging event tourism and activities.

 

Economic Development Summary Operating Budget

Variance Highlights

·         Tourism is higher to fund the Town’s portion of an annual Chautauqua to be put on by the Mormon Trail Foundation

 

 


 

PARKS & RECREATION

The Parks & Recreation budget deals with all activities related to recreation within the community with oversight from the Town.  This includes activities related to park use, ice center use, the swimming pool and other recreation programming.  The Town also provides Summer Games oversight for Cardston County on a fee for service basis.  The Ag Society oversees the operations of the agridome.  Black Sands Management Group is currently under contract for golf course operations.  

 

Agridome/Campground/Civic Center/Golf Summary Operating Budget

Variance Highlights

·         The Campground budget includes an amount to convert several sites to accommodate pull-thru

·         2015 Grants General includes $12,000 for a history of Cardston project

·         The 2016 beautification budget includes preservation of the mural by the Card Home Museum

 

 


 

 

Ice Center Summary Operating Budget

Variance Highlights

·         As of 2016 the Town will no longer employ a rink marshall

 

Pool Summary Operating Budget

Variance Highlights

·         Revenues are higher since the pool renovation was completed

·         Chemical and utility expenses are higher since the pool was renovated


CULTURE

The Culture budget deals with Library activities.  The local Library Board oversees the activities and budget requests.  The Municipality is a member of the Chinook Arch Regional Library system which is a network of independent, cooperating libraries in the southwestern corner of Alberta. Chinook Arch provides training, consulting, IT support and centralized purchasing, cataloguing, processing, and delivery services.

 

Library Summary Operating Budget

Variance Highlights

·         The library board requisition has increased due to the addition of contents insurance as well as the mandated increase in minimum wages

·         2017 & 2018 Library budgets have not been confirmed

 


 

ELECTRICAL DISTRIBUTION

The Town of Cardston owns and operates its own electrical distribution system, which is somewhat unique with only 4 small communities in Alberta owning their own system.  The Town is connected through Fortis to the provincial transmission system.  The distribution system is capable of providing reliable access to power, but in recent years Council has taken a proactive approach to upgrading the system from 4 KV to a more reliable and robust 25 KV system.  The Town has a contract with Enmax Power to manage the Regulated Rate Option and Default Supplier services to ensure compliance with provincial legislation.  Kevin Phillips also provides consulting services to monitor the industry and provide advice on rate structures and other relevant material.

 

Electrical Distribution Summary Operating Budget

Variance Highlights

·         Custom Work revenue is higher to reflect margin earned through the use of the Town’s machinery

·         The balancing pool credit is expected to decrease to about $90,000 per year. This credit has funded part of the Town’s electrical capital projects, so this decrease flows through to decrease capital project expenditures in 2017 and 2018

·         2015 budget included a $269,000 refund on the Transmission rider as the Fortis rate increase proposed for July of 2014 has not yet been approved, yet the Town of Cardston 2014 rates were reflective of the increase

DESCRIPTION OF MAJOR OPERATING PROJECTS

LEE CREEK BANK REHABILITATION


Capital Project

Project Name

Lee Creek Bank Rehabilitation

Project Cost

$2,200,000

Funding Sources

DRP – $2,200,000

Rationale for project

In June of 2014 the creek banks at the raw water intake and along the golf course and the campground were significantly damaged by high water.  There are priority locations that require remediation prior to the upcoming spring high water event.  Those areas are the raw water intake, directly west of the golf course bridge and the campground.

Administration has applied to the Province for Disaster funding and the program was approved as of November 2014.  Administration is working with the Provincial representatives to identify what portion of the work and costs associated will be approved under the program.    We have also applied to the Alberta Community Resilience Program, but have since been notified that the application was denied due to the necessity of engineering prior to approval.  We will reapply in March 2015 for any portion of the project that will not be funded under the Disaster Recovery Program.

If the priority areas are not protected, there is potential to lose major infrastructure in any future event.

CAPITAL BUDGET

FUNDING SOURCES FOR CAPITAL PROJECTS

Provincial and Federal grants are available each year to assist the municipality to fund major infrastructure projects.  The Council has additional options to consider such as reserves and tax or utility funding.  The following is a brief explanation of capital project funding source options.

FEDERAL GAS TAX FUND (FGTF)

Each year, the FGTF assists municipalities by providing funding for local infrastructure projects. Funding is provided to the Province, who in turn flows this funding to the municipality. This program has been legislated as a permanent source of Federal infrastructure funding for municipalities. The program is broad-based and allows municipalities to use the funding toward a wide range of projects to meet local priorities.

MUNICIPAL SUSTAINABILITY INITIATIVE (MSI)

Municipalities in Alberta are eligible for funding under the MSI program based on the terms set out in long-term funding agreements with the Province. Municipalities determine projects and activities to be funded based on local priorities within the general criteria set out in the program guidelines and are encouraged to take a long-term approach to planning for capital projects.

UTILITY FUNDED

Revenue generated through utility rates is intended to fully fund operational and routine capital utility costs.  If there is no required capital replacement for a utility in any given year, the surplus amount may be reserved for future capital projects.

RESERVES/RESTRICTED SURPLUS

As a means of solid financial planning, Council has created a number of special reserve funds to address both future operational and especially, capital resource needs. These funds address new acquisition and replacement, but have general restrictions on use. Through the budget process, the Town will designate funds that have been internally restricted to finance those projects for which the funds have been ear-marked.

 

CAPITAL BUDGET SUMMARY


 

DESCRIPTION OF MAJOR CAPITAL PROJECTS

LEE CREEK INTAKE ENHANCEMENTS

Project Description

Lee Creek water intake rehabilitation.

Project Cost

$600,000

Funding Sources

Alberta Community Resilience Program – $600,000

Rationale for project

The 2014 flood damaged the intake and exposed the protective gabion baskets covering the intake-infiltration gallery. This primary intake provides raw water to the Town of Cardston water treatment plant. Scouring of the Creek bed, mainly from seasonal flood, has consistently exposed the existing infiltration gallery gabion baskets multiple times and repairs are frequent. Through a combination of stream-bed upgrades and basket repairs, this project will repair any existing damage, and protect the water intake infrastructure from further damage.

2nd AVENUE W, 3rd to 5th STREET

Project Description

Replace water line from 4th to 5th Street

Replace sewer line from 3rd to 5th Street

Replace curb and gutter from 3rd to 4th Street (north side only).

Replace pavement from 3rd to 5th Street

Project Cost

$600,000

Funding Sources

Utility revenues - $290,000; FGTF – $260,000; MSI – $50,000

Rationale for project

The pavement is in need of replacement, and there is potential for failure of old water and sewer lines after new pavement has been laid. This particular stretch of curb and gutter is very uneven and in disrepair and needs to be replaced in order to accommodate the new paving along this stretch of road.

POOL BUILDING UPGRADES

Project Description

Renovate and potentially expand the existing pool house. 

Project Cost

$500,000 (another $250,000 is budgeted in 2017 to complete this project)

Funding Sources

MSI - $197,000; Reserves - $253,000; Other – $50,000

Rationale for project

The current building is in disrepair, the HVAC system urgently needs replacement, and the building does not meet current standards for accessibility; the need for adequate storage space and accommodation for better handicap and family changing rooms are also factors.

ROTARY PLAYGROUND

Project Description

Contribution towards the Rotary playground at Lion’s Park

Project Cost

$50,000

Funding Sources

Reserves – $50,000

Rationale for project

The Rotary Club of Cardston is heading a project to construct a new playground at Lion’s Park and the Town is supporting this project by providing the land and allocating some cash funding and in-kind labor and machine time.

 


 

GRADER REPLACEMENT

Project Description

Replace the Town’s grader

Project Cost

$370,000 (net of trade-in value of existing grader)

Funding Sources

MSI – $370,000

Rationale for purchase

The current grader is old and in need of replacement. Now is the time to maximize the trade-in or sale value of the existing grader. The current grader is also smaller than ideal for the work we do and doesn’t have an attachment  that is very useful for our operations.

GENSET GENERATOR

Project Description

Install a Genset generator at the 7th Avenue Booster Station

Project Cost

$55,000

Funding Sources

Utility revenues – $55,000

Rationale for purchase

The generator would allow us to maintain water flows during a power outage and to accommodate fire protection for the east hill.

ATKINS SUBDIVISION UTILITIES

Project Description

Install water, sewer and electrical utilities to service the “Atkins” subdivision.

Project Cost

$151,600

Funding Sources

MSI – $111,600; Utility revenues – $40,000

Rationale for project

This subdivision will soon be ready to sell and now requires utility connections

LED STREET LIGHTING

Project Description

Install LED street lighting

Project Cost

$20,000

Funding Sources

Utility revenues – $20,000

Rationale for project

Continue conversion of street lights to LED lamps for energy conservation

ELECTRICAL SYSTEM UPGRADES

Project Description

Upgrade distribution system from 4 KV to 25 KV

Project Cost

$195,00

Funding Sources

Reserves - $150,000; Utility Funded - $45,000

Rationale for project

Create a more reliable and robust distribution system. 

 


 

MAJOR PROJECTS TO CONSIDER

These projects are not currently in the budget as funding sources have not been determined, but should be given consideration. 

Capital Project

Project Name

12th Street West Upgrade

Project Description & Rationale

12th Street West is currently a gravel road which is oiled semi-annually.  Due to the nature of traffic on this road, it continues to fill with potholes and breaks up quite frequently.  Council received a request from the Ag Society to consider upgrading the road to a paved surface.  This would require major improvements to the base of the road.

Project Cost

$2,029,500 to excavate and rebuild the road; or $1,804,000 to rebuild ditches and slopes

Funding Sources

Grants or borrowing similar to the Creek Bank Erosion.  Allocating grants toward these major infrastructure projects means that there would not be funding for the projects currently designated.

Impact on future operating costs

Reduction in oiling costs.  Currently budget $30,000 for oiling annually and the majority of this cost would be for 12th Street.  There would still be approximately $10,000 required for oiling in other areas of the community.

Other options

The County has tested a product on the cemetery road called “Rhino Snot”.  This may be a possibility if that product holds up well over the winter.

 

Capital Project

Project Name

Highway #5 Industrial Area Access Upgrade

Project Description & Rationale

Administration has been working with Alberta Transportation on providing access to the West Industrial land.  Access is required to this property to accommodate sale of industrial land.

Project Cost

Unknown at this time

Funding Sources

Grants or borrowing similar to the Creek Bank Erosion.  Allocating grants toward these major infrastructure projects means that there would not be funding for the projects currently designated.


 

LONG TERM DEBT INFORMATION

 

Loan Repayment Summary Budget

 

Debt as at December 31, 2015


The debenture debt is repayable to Alberta Capital Finance Authority and matures in 2021.


Debt Limit as at December 31, 2014

The debt limit for the municipality is defined in Alberta Regulation 255/00 and is calculated at 1.5 times revenue of the municipality and the debt service limit is calculated at 0.25 times such revenue.  The calculation alone does not represent the financial stability of the municipality. 

PERSONNEL


 

UTILITY RATES

In December of 2015, Mayor and Council passed 3rd reading of the Utility Rate Bylaw which addressed rates up to and including 2018 for water and sewer.  The following is a summary of the rates for 2016.

WATER

The current Garbage utility rate bylaw has been in effect since September of 2011. The proposed rates above are expected to take effect in early 2016.