2020 Budget Breakdown // June 15, 2020

Jasper Municipal Council voted against administration’s recommended zero per cent budget increase, instead adopting a more austere financial plan to reflect a pandemic-affected economy. The Jasper Local explores some of the issues surrounding that process. By Bob Covey

Municipal councillor Paul Butler takes issue with the way recent council decisions have been represented in the public narrative.

One such portrayal, which he has been at pains to rebut, suggests Jasper Municipal Council’s April 7 motion to reduce the 2020 tax requisition by 12 per cent is categorically linked to their May 5 motion to cut $982,000 from the 2020 budget.

Not true, he says.

People assume, he said during the May 12 regular council meeting, “that if we reverse the tax reduction we’d have all this money to provide these services.”

The spirit of the tax reduction motion, he explained, was that because of the COVID-19 pandemic, people are not going to be able to pay their taxes. The spirit of the budget reductions motion, he went on, was that the town’s revenues will be compromised and that as a consequence, expenses will have to be cut.

“The process of digging ourselves out of a hole will be a multi-year process,” he said. “As such, we’ve chosen to give people a little bit of a break this year.”

But if he understands how people might draw links between taxes and budgets, Butler is “mystified” as to another narrative making the rounds: that those councillors who voted for the cuts are intent on not just giving people a little bit of a break, but giving businesses a very sizeable break—at the expense of residents, whose services will be compromised.

“I struggle to understand that,” Butler said in a June 10 interview. “We were trying to reflect the community’s ability to pay with a focus on the business community, who were faced with the reality of having to reduce their expenses. Obviously when we reduce the tax envelope it has a disproportionate effect on the business community.”

So council’s cuts aren’t benefiting the least vulnerable on the backs of the most vulnerable, as some have suggested? 

On the contrary, Butler says, the commercial ratepayers not only pay the lion’s share of the community’s tax envelope, but are also the town’s major employers.

“The hard reality is that residential tax payers get a screaming good deal in Jasper,” Butler said.

Communication gap?

The twenty seven letter writers who voiced their concern that services in Jasper would be irrevocably altered hardly saw the deep cuts to the budget as a screaming good deal. The letters poured in ahead of the May 12 council meeting, when councillor Scott Wilson moved to rescind two motions—one to approve a 12 per cent tax cut and another to shave almost a million dollars from the budget—because he felt the public wasn’t well-enough informed. 

After the pandemic was declared, council met behind closed doors for two weeks before emerging with recommendations to be voted on. The deluge of public input—much of which expressed concern that Jasper’s services would be much more expensive to reboot next year if they were slashed so deeply this year—convinced Wilson to try to get council back to the drawing board. He, in agreement with administration’s recommendations, was advocating for a zero per cent tax requisition from last year.

“I believe the motions were made without sufficient information as to where these cuts would come from and what impact they would have in our community,” Wilson said.

Wilson’s motions to rescind were ultimately defeated, but the question of sufficient public engagement has lingered. Butler, who introduced the motions about the tax requisition and the workforce and service reductions, with the support of councillors Jenna McGrath, Rico Damota, Helen Kelleher-Empey and Bert Journault, admitted some of the cuts took community members by surprise. Nevertheless, he will still argue for them. 

“The cuts to the budget are necessary,” he said. “Council is elected to make these decisions.” 

Proactivity over patience

If Mayor Richard Ireland had it his way, those decisions wouldn’t have been made quite so hastily. Ireland advocated for a wait-and-see approach, arguing that it was premature to forecast revenues when everything, including Alberta’s relaunch strategy, was so day-to-day.

“It seems to me we will never know less than we know today,” he said on May 12, supporting Wilson’s motions to rescind. “My position has been to go with a zero per cent budget…and come back to this question in the fall or later when we have some actual figures. We will see how the recovery is going, we will see what ability our taxpayers have to pay. If necessary we can forgive taxes.”

But the majority of councillors voted for a proactive approach. Butler said some councillors were advocating for a 15 per cent cut, some for 10, before landing on 12.

“We picked a number,” Butler said. “It was admittedly a shot in the dark.”

Councillor Jenna McGrath explained her thought process at the time:

“In my mind I wasn’t protecting businesses or large corporations in Jasper, I was making a socially-minded decision to help as many people as I could without knowing the full magnitude of what’s to come,” she said.

Impact remains to be seen

The full magnitude of the pandemic is one thing, but at the moment, the full magnitude of the cuts to the budget is the more immediate question at hand. Administration is currently preparing a report illustrating the impact of the budget reductions, although because it is being prepared in camera alongside Council, details of exactly what information that document will contain have been scant.

Needless to say, Council will soon have to reconcile with the ramifications of their decisions—whether those ramifications will show up in decrepit infrastructure, unkempt grounds or depleted reserves. Butler’s motion has some built-in flexibility and already, some of the proposed reductions have been walked back. After Council agreed that daycare is a critical service, for example, administration proposed alternate funding solutions (which, by and large, means drawing down reserves). Significant line items in bylaw and protective services have been taken off the chopping block. The Jasper Artists Guild will get custodial help after all. And the public washrooms on Connaught Drive, originally slated for closure because the resources to clean them were not earmarked, are now open. 

“This is a plan-for-the-worst, hope-for-the-best budget,” Butler said. “We said at the beginning this would be a rolling, make-it-up-as-we-go, ongoing process.” 

Phase Two

In short order, council—and subsequently, administration—will be once again making it up as they go. On June 9, Alberta Premier Jason Kenney took the province by surprise and announced that Phase Two of Alberta’s Relaunch Strategy would be accelerated to begin June 12. Included in the relaunch is the green light to open public libraries, community halls and fitness and sports facilities. Which begs the question: if the provincial government says it’s ok to open the Jasper Fitness and Aquatic Centre and other facilities, does the money exist in Jasper’s budget?

The short answer is no, it would seem, but without making a hard commitment one way or the other, Butler said a decision will have to be made about further drawing down reserves.

“I’m not saying when we will open,” he said. “We can’t ignore the fiscal realities. But we’re trying to make intelligent decisions as we go along.”

Expensive cuts?

Jasperites can only hope that the decisions made thus far will look intelligent in retrospect . There are red flags. Inflation is bound to go up, meaning it’s going to be more expensive to deal with future debentures than if we were buying or borrowing right now. Potential severance payments for municipal staff who have been laid off will surely factor into the overall cost savings, as will the cost of rehiring and retraining for those positions, should they become available again. It remains to be seen how municipal assets requiring regular upkeep— things like sports fields, green spaces and flower beds—will be resourced (experts know they cost more in the long run if you let them go to seed).

And hovering over all of this is the fact that according to a 2016 asset management study, town managers should be putting away a total of nearly $4.5 million each year, just to ward off infrastructure deficit. Those savings weren’t being accrued before COVID-19; it’s unlikely they will start in the foreseeable future.

Butler knows all of this. He says council is prepared to live with their choices. And as much as it’s easy for residents to glom onto a certain “narrative” regarding those choices, they haven’t been easy ones to make, he said.

“Layoffs and other workforce reductions have been really significant,” he said. “I make no bones that they were deep and brutal.”

Furthermore, Butler thinks there will be more difficult conversations to be had.

“We need to ask ourselves what are the areas of services we need to focus on in a world where you can’t do everything,” he said. “We have to be willing to have discussions about priorities.”

So far those discussions have been delayed—in part because administrators have spent so much time rejigging the budget to find the $982,000 Council insisted be stripped. Making the operational budget match those cuts has been a massive undertaking, and it remains to be seen if that staff time will be documented if and when the report detailing the impact of the 2020 workforce and service reductions is made public. 

Bob Covey // bob@thejasperlocal.com