Beaver County looks at economy, price of oil, elections and provincial budget in pre-2016 budget talks

Beaver County is taking a pro-active approach to planning next year’s budget, already discussing factors that could make 2016 an interesting year for fiscal planning.

“It’s a financial teeter totter,” said Reeve Kevin Smook (Division 1), after hearing Chief Financial Officer Ed Bujnowicz’s summary on “Issues, opportunities, trends and unknowns” around the 2016 budget.

“There are a lot of things that are going to affect us,” said Bujnowicz, with the question being “how to mitigate those things that negatively affect us.”

A strategic planning session has been scheduled for Sept. 21, and he asked council to consider some of these variables before the meeting. The planning session helps determine what goals will have to be budgeted for next year.

Councillor Arnold Hanson (Division 5) compared it to “crystal ball gazing (as to) what new developments will affect us.”

“This year there’s been the most uncertainty going into the budget session since I’ve been here,” noted county CAO Bob Beck. “This year, there’s more risk and uncertainty, that’s all.”

Some of the unknowns include what the price of oil will be, the fact there has been no provincial budget passed for 2015, with next year’s budget probably more challenging than those of the recent past, said Bujnowicz. Then there’s the issue of the federal budget and how that will be affected by the current federal election results.

Another factor important to the county is the loss of machinery and equipment assessment, with wells shutting down creating a drop in revenue. Beck noted that, “Growth (in other areas) sheltered the county the last few years,” from the drop in linear revenue.

However, the report questions if that will continue in light of the economic downturn.

“Certain costs are going up, certain costs are going down,” said Bujnowicz, with the question being: “How will it affect us?”

Other losses include the Municipal Sustainability Initiative (MSI) funding removed two years ago, and local municipalities made responsible for bridges, yet another cost addition.

No bridge funding is expected for 2016, and Bujnowicz posed the question: “Do we wait? What do we do with our bridges deteriorating?” County council heard a report last month on five bridges in the county that require repairs, making the question even more pertinent.

Other emerging issues included consideration of service level adjustments if revenues drop or grants aren’t forthcoming. Bujnowicz noted that the Bathgate Water Project’s federal funding application was rejected, and the county now has to consider its options in trying to move forward with that project.

If residents keep requesting more oiled roads in subdivisions, the county would need to find a way to fund this, along with town and village requests. He noted the Town of Tofield has requested a partnership to build a new community hall that both town and county residents would use.

Plus, there is maintenance work for various county facilities, including its two campgrounds and the Beaver Arts Centre, that require funds. Inflation is also a factor in the calculations.

Bujnowicz said the county is “in an excellent financial position,” but a new road construction plan has already been approved along with a capital equipment replacement plan. He did note that “construction and commodity costs in 2016 may be lower presenting us opportunities.

“Each of these items and others will affect how we do business for 2016,” he told the committee. “And how will we maintain our strengths in the future and take up the opportunities and the challenges?”

CAO Beck added: “It could present some opportunities but it could present some real challenges, too.”

“We’re not looking for any specific direction,” said Bujnowicz in conclusion. “We are just providing information for council discussion.”

And the strategic planning session “will provide more information to help prepare the budget by discussing many of the uncertainties previously listed, and perhaps highlight new issues or opportunities,” he said.

“We can’t attach numbers (to a budget) until we have that strategic planning session,” said Beck.

Patricia Harcourt
Editor