Mayor Linnsie Clark voted in support of a motion to postpone the 2022 budget after council asked for more information about the Invest Medicine Hat budget (Tiffany Goodwein/CHATNewsToday)

By Tiffany Goodwein

City budget update deferred following questions about Invest Medicine Hat

Nov 16, 2021 | 1:59 AM

MEDICINE HAT, AB– Plans to approve updates to the city’s municipal budget will be postponed to the next council meeting.

Coun. Shila Sharps requested the postponement because she said there are a lot more questions about Invest Medicine Hat that need to be answered publicly.

“It was a huge election issue, and I think we need to be 100 per cent certain what we are approving and what we are doing,” she said.

At Monday’s council meeting, acting managing director Erik Van Enk presented their operating budget and explained that they are expecting to generate $14.7 million in revenues, an increase of $500,000 from 2021. Expenses for the organization are expected to increase by $600,000, but the three-page report didn’t specify why. It did however note that revenue and expense expectations are “ primarily driven by changes to land sales expectations given the near-term economic environment.”

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Sharps said that what is lacking is more clarity when it comes to Invest Medicine Hat’s financials and that is needed so that council can make more informed decisions.

The decision to support the postponement of the budget was passed in a 7-2 vote with Coun. Hirsch and Coun. Knodel voting against the motion. Mayor Linnsie Clark voted in support, and said more clarity prior to decision-making is always a good thing.

“The concern was that we needed a little more information, and certainly I very much support being an informed council and definitely want to make sure that as we are moving forward if we have questions about something we are not just approving it,” Mayor Clark said.

One of the items on the municipal budget is a proposed 2.5 per cent property tax increase. The city originally forecasted a 4 per cent tax increase but opted for a lower rate due to residents still struggling from COVID-19.

The 2.5 per cent increase will add an additional $2 million to city’s overall property tax revenue of $80.8 million.

For 2020 and 2021, city council kept property tax increases to zero percent. But the director of finance, Lola Barta cautioned that if property tax rates don’t account for the rate of inflation, it eventually will catch up to the city, and the city would have to pay for it later.

Accelerated Financially Fit, an initiative aimed at addressing a $22.6 million gap in the city’s budget was also discussed. Council heard that the city has managed to address $14.8 million of the gap through a workforce reduction, divisional realignment, facility closures, and transit on demand. But the city still has to address the $7.6 million that is remaining.

As for what the city will do to address that gap, Mayor Clark said they are looking at different scenarios

“ There is an increased revenue as well that is projected to fill that gap, and if it is going to be reductions we as a council will receive those options and make a decision about how we are going to proceed then,” Clark said, noting council will begin strategic planning sessions in January.

Further discussions and possible approval of the 2022 budget are set to occur on December 6.