City of Medicine Hat (CHAT News)

By Eli J. Ridder | @EliRidder

CITY HALL

Medicine Hat cuts into budget gap with 2024 update

Nov 21, 2023 | 11:46 AM

MEDICINE HAT, AB – City council on Monday approved changes to the 2024 budget that will improve the city’s ongoing municipal budget gap by nearly $800,000.

That deficit has existed for nearly a decade, since a natural gas production dividend emptied. It would now stand at $6.2 million, according to staff.

The remaining deficit will be eliminated with the next two-year budget, staff said.

The 2024 update reduces the municipal budget gap from $7.0 million to $6.3 million.

The improved municipal budget position comes largely because of investment returns from a larger investment portfolio than previously anticipated, staff said.

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Extra spending by council since last year had increased the municipal budget gap by over $1 million. Half of that cash was used for the city’s first-ever investment in the HALO Air Ambulance.

Money was also approved for a new community inclusion coordinator position, additional security personnel hours for downtown transit terminal washrooms and expenditures for the economic development department.

A Budget 2024 update slide from the staff presentation showed the impact of the updated 2024 budget. (City of Medicine Hat)

But the changes approved Monday resulted in a total net increase of $300,000 on the original 2024 municipal operating budget approved in 2022.

Residents will experience a four per cent property tax increase in 2024. That increase was already pre-approved by council last year as part of the budget process.

There was also a one per cent assessment growth that equals an overall property tax revenue increase of five per cent.

Accounting Supervisor Aaron Hoimyr told council Monday the budget update is an important mid-cycle check-up on the city’s finances.

“It is important to have a budget that accurately reflects the current environment in which we are operating so that it is an accurate financial control tool for accountability as we head into the 2025-26 budget planning cycle,” Hoimyr said.

‘A PATH FORWARD’

Dennis Egert, managing director of corporate services, explained the difference between the main budget planning and what came before council Monday.

“The budget cycle sets the city on a path forward to advance council’s priorities and allows us to plan for longer-term initiatives,” Egert said in a statement Tuesday.

“The 2024 budget update accounts for the difference between conditions during the original budget planning cycle and our current environment as well as updated assumptions into the next year.”