Medicine Hat City Hall is seen in late November. (CHAT News Photo/Colton McKee)

By Chris Brown

Enhanced Financially Fit plan

2021 Budget Update headed to council tonight

Dec 7, 2020 | 11:04 AM

MEDICINE HAT, AB – Medicine Hat City Council will be presented tonight with a 2021 Budget Update, one that continues the city’s Financially Fit initiative to close a $23 million budget gap.

Financially Fit was launched in 2016 and accelerated this year after COVID-19, low oil and gas prices and decreased provincial funding created new financial challenges.

A limited ability to absorb losses through financial reserves is also impacting city coffers.

“The city’s municipal budget has historically been supported by our commodity-based net revenue and funded from financial reserves,” says Dennis Egert, commissioner of corporate services, in a release. “The Accelerated Financially Fit Initiative represents a financial recalibration that will redefine the cost structure of the organization to significantly reduce and ultimately eliminate that reliance. The objective is to create a stable and predictable financial balance and tax environment.”

The budget update includes zero per cent property tax increases introduced to support Hatters through COVID-19.

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The original budget approved in December included a four per cent annual property tax increase. The related $7.3 million in lost revenue added further pressure to the city’s finances.

Egert says council has been clear that a solution must be found beyond tax increases. He says to make up the $23 million through property tax increases would mean a hike of 28 per cent.

The city says some budget targets will be met in staffing through voluntary reductions and attrition and that the futures of some older rec facilities such as Crestwood Rec Centre, Moose Rec Centre and Heights Pool are being considered.

As well, bargaining units and all non-union staff are budgeted to receive a zero per cent increase for 2020 and 2021.

Unlike other levels of government, municipalities are unable to plan deficit budgets.