Council approves 2024 Budget Update, 2024 property tax revenue holds steady at five per cent

Medicine Hat – Medicine Hat City Council adopted updates to the 2024 Municipal Operating and Capital budgets and the 2024 Operating and Tangible Capital Asset Budgets for the commodity-based energy business unit (COMCO), at the regular Council meeting on Monday, Nov. 20, 2023.

City Council originally approved the 2023-2024 operating, capital and major operating expenditure budgets on Dec. 19, 2022. Since then, Council has approved several budget amendments for items like financial support for HALO, replacing fire engines, or purchasing the building currently occupied by the curling club. The budget update also reflects changing market conditions like persistently high inflation, volatile commodity prices, changes in government funding, and a revised organizational structure.

“The budget cycle sets the City on a path forward to advance Council’s priorities and allows us to plan for longer-term initiatives. The 2024 budget update accounts for the difference between conditions during the original budget planning cycle and our current environment as well as updated assumptions into the next year,” said Dennis Egert, Managing Director of Corporate Services.

“It is important to have a budget that accurately reflects the current environment in which we are operating so that it is an accurate financial control tool for accountability as we head into the 2025-26 budget planning cycle,” said Accounting Supervisor Aaron Hoimyr at Monday’s meeting.

The 2024 update to the tax-supported operating budget keeps the property tax revenue increase for 2024 at five per cent (four per cent tax increase plus one per cent assessment growth) and reduces the municipal budget gap by nearly $0.8 million (from $7.0 million to $6.3 million). The improved Municipal position comes largely because of investment returns from a larger investment portfolio than previously anticipated.

“The increase in property tax revenue was set in the 2023-24 budget cycle to cover the cost of municipal inflation,” added Egert. “We did not propose any further changes to property tax revenue from what was previously approved as many of our costs in 2024 are still anticipated to increase by inflation.”

The update to the City’s Commodity business unit (COMCO) includes higher anticipated earnings of $26.6 million from the previous 2024 budget largely because of higher forecasted energy prices and more economic opportunities to optimize electric generation assets.

The 2024 capital budget included an increase the 3rd Street renewal project by $3.58 million for a total projected cost of $6.98 million due to inflationary pressures and scope changes to save operating and maintenance costs and create efficiencies in future projects. The Medicine Hat Police Service is repurposing a previously approved $0.25 million capital project to replace existing equipment worth $0.13 million resulting in a net savings of $0.12 million.

Those interested in learning more about the update can find the full briefing note in the Nov. 20 Council agenda packet at www.medicinehat.ca/agendasminutes.

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