Lacombe ties tax increases to inflation with new policy

By rdnewsNOW staff
September 25, 2018 - 8:14pm Updated: September 26, 2018 - 6:14pm

Lacombe city council has added what it describes as ‘consistent principles’ to its budget development process by updating its Annual Budget and Taxation Preparation Policy this week.

“The updated policy includes council’s commitment to align future tax rate increases with the Alberta Consumer Price Index, which allows The City to keep pace with the rising cost of service delivery to residents, without placing undue burden on taxpayers,” said Mayor Grant Creasey, in a press release. “The updates were driven by the current Strategic Plan and the recent changes to the Municipal Government Act, which require municipalities to develop three-year operating budgets.”

The Consumer Price Index (CPI) measures the year-over-year price increase that Albertans pay for a range of products and services. The City will use the June 30 Alberta Consumer Price index as the targeted annual property tax increase.

City officials point out the CPI date is consistent with the date used in The City’s Compensation Policy, which indicates the estimated cost of living allowance for employees. Aligning these dates, according to officials, gives Administration the necessary direction for budget preparation.  

Council also made additional updates to maintain optimal reserve balances by having year-end surplus wages and benefits accrue to the General Operating Reserve. This general reserve is said to fund emergent or unexpected expenses based on Council’s approval of the expense.

Finally, the new policy also addresses the Lacombe Police Commission’s request to have any police surpluses directed back to the Police Operating Reserve. As well, the amount at which a Chief Administrative Officer can vary an individual expense within a department was increased to $25,000 from $5,000. However, any variation must not result in an increase to the department’s budget or affect service levels.

“Capital reserve accounts are critical for The City to fund future infrastructure and equipment,” said Chief Administrative Officer Matthew Goudy. “Healthy reserve balances allow The City to fund projects in a cost-efficient manner and may reduce the need to fully fund projects through debt.”

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