City Council continues to struggle to find a solution to revenue losses

By Leah Murray
June 18, 2018 - 11:09pm Updated: June 19, 2018 - 7:30pm

 

MEDICINE HAT – A City Council debate over how to fill a revenue shortfall lasted an hour and ended with the matter being tabled to a later date.

The normally agreeable councillors were torn on how to back fill a $16 million dollar hole in the budget, that’s traditionally been filled by money generated from oil and gas.

City staff, for the third time, proposed the introduction of a new utility fee. The Municipal Consent and Access Fee (MCAF). The fee would be applied to both the gas and electric utilities.

The fee is charged by municipalities to electric and gas distribution utilities for access to municipal land. The fee is a surcharge for allowing the utility provider to access city owned land in order to construct, maintain and operate distribution systems.

The fee would have been implemented starting in 2019 and by 2022 would have added over $30/month to utility bills in fees not including the commodity rate.

Mayor Ted Clugston said he’s been adamant that he will not support the implementation of an MCAF in Medicine Hat as the city owns its own utilities.

“I will not be voting in favour of property taxes or the MCAF,” he said.

The MCAF proposal was defeated in a five to four vote by City Council Monday night.

The city’s renewed Financially Fit model relied on the MCAF to generate an additional $6 million dollars over the next four years. Without it the city is now looking for other ways to generate money.

A proposal by Councillor Kris Samraj, amended by Councillor Darren Hirsch, proposed a one time seven per cent property tax increase with the financially situation being reviewed again next year.

Samraj said while it is difficult to increase any fees, he felt property tax increases were the best way to go.

“I thought property taxes was a more direct and honest way to do it, in that it’s absolutely clear where the money is going and where we were collecting it from,” Samraj explained.

“As you can see from the discussion tonight it’s a challenge because we’re all struggling with how best to close that gap.”

The motion was carried, but after some concerns were raised by city staff over a lack of direction for budgeting purposes, the discussion was tabled until the next city council meeting.

Still, Mayor Ted Clugston said he can’t support any major increases for tax payers when the city is anticipating a $30 million dollar profit from the electric utility.

“If we’re going to make $30 million each year for the next three years, that’s $90 million,” Clugston said. “We will take a dividend out of that, I think the citizens expect it and they deserve it.”

Councillor Robert Dumanowski summed up the meeting by calling it one of the darkest meetings at city hall in many years, as Councillors and city staff struggle with finding ways to claw back the reliance on money from volatile commodities.

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