By Treena Mielke
Rimbey town council will give the stamp of approval to its 2011 budget March 9.
The town’s draft budget shows a $174,500 deficit with projected revenues of slightly under $5.9 million and expenditures of just over $6 million.
Mayor Sheldon Ibbotson said the deficit is caused by loan payments.
“The difference basically comes down to interest and principal payments,” he said. “We have the same amount of expenditures as before, but the debt payments have increased.”
Chief administrative officer Tony Goode said the town borrowed $1.5 million last year for a reservoir that was one-third of the cost of the project. The remainder of the funding came from federal and provincial grants. The town also borrowed $1 million for the pool in 2010.
Ibbotson said council is faced with the possibility of raising the mill rate to help cover the deficit. He noted this may be a viable option as the mill rate has not been increased for about 10 years.
Goode said increasing the mill rate by three per cent would generate $54,000 in new taxes. He added home owners may or may not see an increase in their taxes.
“It would depend on the assessment of their property,” he said.
Another option to eliminate the shortfall would be to cut expenses, but Goode said there is not much left to slash from the bare bones budget.
“We’ve taken as much as we possibly can out of the operating budget and put it in the capital budget,” he said.
Council could also take dollars out of the $521,000 in operating reserves to help cover the deficit. However, Ibbotson said he doesn’t believe this to be a good move.
“That’s not good financing,” he said.
Goode said leaving the money in reserves is prudent business sense.
“It’s always prudent for municipalities to build up reserve funds and one of the ways to do that is to budget for a surplus or keep your expenditures less or your revenues higher than anticipated.”
Ibbotson said this year’s budget has been a tough one and council has worked long and hard to come up with viable options.
“In my mind it’s a balancing act. We are still trying to eliminate the deficit in a way that balances the needs of the residents with fiscally responsible planning.”