Update on November and December Council Meetings

The two-day special meeting, held on Nov. 30th and Dec. 1st, approved the 2021 draft budget. The budget featured belt-tightening cost reductions and an overall increase of 0.5% in property tax revenues. The budget can be accessed here.

In terms of Council’s regular meetings, key items included:

· Denial of requests to waive late tax payment penalties

· Continued stalling on paying the 30% pay cut imposed on Councillors Hanson, Kissel, and Wright as part of the sanctions thrown out last July.

· Transfer of $2.2 million from Tax Stabilization Reserve for water/wastewater debt payment

· Final report from the Economic Recovery Task Force

· Funding decisions under provincial Municipal Stimulus Program

· Refusal to reinstate County advertising in the Rocky View Weekly newspaper

· Decision to purchase two existing water utilities

Not part of Council’s meetings, but also newsworthy, is Councillor Gautreau’s brief tenure as CAO of the town of Swan River in Manitoba.

Refusal to Waive Penalty for Late Tax Payments

The County received an unprecedented number of requests to waive the 12% penalty charged on late property tax payments. Most of the requests this year share a common theme – confusion between Rocky View’s and Calgary’s deferred payment deadlines. Rocky View extended its property tax due date from June 30th to August 31st, while Calgary extended its deadline until September 30th. The County chose to inform ratepayers of its changes only through an insert sent with the tax notices in May and on its website. In contrast, Calgary’s deadline received extensive media coverage.

Almost all requests to waive the 12% penalty came from ratepayers who paid their taxes before the end of September. Because of this, Councillors Hanson, Kissel, Schule, and Wright attempted to convince their colleagues to provide one-time forgiveness of late payment penalties charged on property tax accounts that were paid by September 30th. Debate on providing this leniency dragged on through all three meetings in November and December. By the Dec. 22nd meeting, all but Councillors Boehlke, Kamachi and Reeve Henn acknowledged that the issue needed to be addressed. CAO Hoggan noted that a major communications rollout would be needed to avoid further confusion for 2021’s tax payments.

Despite all of that, the most Council could agree upon was holding a workshop to discuss options before the end of March.

No Back Pay for Councillors Hanson, Kissel & Wright

In July, the judge set aside all the sanctions imposed on Hanson, Kissel and Wright in June 2019, concluding that they were “ones that no reasonable decision-maker could impose”. A legal ruling to “set aside” a decision means that, in effect, the decision was never made. Given this, it is incomprehensible that the council majority continues to refuse to pay Hanson, Kissel, and Wright for the 30% of their salaries withheld under sanctions the court threw out.

Instead, the majority insisted they need yet another legal opinion advising them whether they should pay the amounts withheld under invalid sanctions. It is difficult to imagine that they don’t already have a legal opinion on this question, especially given that they decided months ago to appeal the sanctions court ruling. At this rate, they will spend far more ratepayers’ money on legal opinions and fees than is owing the three councillors for their back pay.

Hanson, Kissel and Wright clearly voted against any further delay in receiving the money owed to them. It was clear they had hoped to get their pay without having the County or themselves incur more legal costs. It is less clear why Reeve Henn voted against the motion – but then, the Council majority is not known for explaining its position on matters.

We were particularly appalled with Councillor Gautreau. In a separate code of conduct complaint, he was found to have been an equal participant in the actions that resulted in Hanson, Kissel and Wright’s pay cut. In contrast, Gautreau’s only penalty was to make an apology, noteworthy only for its lack of remorse. He might have used this opportunity to reduce the discrepancy. Instead, he chose to stick with the majority and continue stalling, while condoning racking up even more legal costs.

Transfer of $2.2 million from Tax Stabilization Reserve for water/wastewater debt payments

The County took out long-term debt in the early 2000s to finance construction of the water / wastewater infrastructure in east Rocky View. The offsite levies intended to repay that debt continue to fall short of their annual obligations.

The County originally promised that levies would repay the debt within the decade. Almost 20 years later, this has still not happened. Instead, the amounts owing to County ratepayers continue to grow. Starting in 2013, $1 million per year in general tax revenues has been used to pay interest on this debt. It is our understanding that before 2013 levies had been insufficient to cover all the ongoing interest, let alone any principal repayment obligations.

Last year, $3.1 million was taken out of the Tax Stabilization Reserve (ratepayers’ rainy-day fund) in addition to the $1 million from general revenue to cover the shortfall between the levies and the total principal and interest obligations for the year. This year, another $2.2 million was removed from the Tax Stabilization Reserve, as well as another $1 million from general revenue, to cover the shortfall. Although 2020’s levies were slightly higher than 2019’s, the reduction in the amount taken from the Tax Stabilization Reserve is primarily due to lower interest costs. The total owed to the Tax Stabilization Reserve is now $13.5 million.

It is becoming increasingly difficult to believe Administration’s ongoing assurances that levies will repay all that is owed to the banks, let alone to Rocky View ratepayers.

As concerning as this is, Boehlke also convinced his colleagues that they should investigate alternative funding sources to repay the debt. Although Boehlke is unlikely to agree, this appears to be a clear acknowledgement that the levy structure, for which he has shared responsibility from its beginning, is an unmitigated failure.

What other funding sources are there? Other than general revenues, it is not clear there are alternatives. Levies exist so that those who benefit from specific capital investments cover the costs of those investments. General tax revenues are supposed to cover costs that benefit all County ratepayers. Rocky View has a long-standing policy to attract business investment which then pays property taxes three times as high as residential properties – to keep residential property tax rates lower than would otherwise be possible. However, those higher property taxes are paid by all businesses in Rocky View, not just the ones that benefit from the water/wastewater infrastructure.

In case you aren’t aware, the water/wastewater system’s annual operating costs have been continually subsidized by Rocky View ratepayers. Utility fees paid by the businesses benefiting from the system have never been sufficient to cover its annual operating costs. As a result, the annual losses are covered by general revenues – everyone’s tax dollars. It is also worth remembering that servicing costs for many of the businesses connected to the system are higher than average for items such as road maintenance and snow removal.

Given this, Boehlke’s argument that the property tax revenues from East Balzac businesses should now be used to pay down the infrastructure debt seems highly inequitable. Will the businesses in west Rocky View that receive no benefit from the infrastructure see a reduction in their property taxes?

Other items of note from Council’s November and December meetings include:

· The Economic Recovery Task Force’s report – one of its major recommendations was that the County needs a comprehensive marketing plan to address the reality that many people and businesses do not realize that Rocky View is a separate entity from its regional urban neighbours.

· At its Sept. 1st meeting, council allocated $1.8 million of the $4.7 million provincial Municipal Stimulus Program funding to pathway upgrades. At the Nov. 24th council meeting, Administration identified nine trails and pathways that will be part of this initiative.

· In a 6-3 decision, the majority refused to support Hanson and Wright’s motion to reinstate the County’s advertising in Rocky View Weekly. Despite the County’s clear communication failure with respect to its 2020 tax payment deadline, the majority continues to insist that posting notices on the County website is all that is required to keep residents informed. Saving $70,000 per year is more important than providing residents with additional avenues for learning about upcoming County decisions and events (or supporting an important local business).

· Council directed Administration to prepare borrowing bylaws for the purchase of both Blazer Water Systems Ltd. and Horse Creek Water & Wastewater Services Inc. No details about the purchases were provided as the discussion was in-camera.

In closing, we note the controversy swirling around Gautreau’s brief tenure as CAO of the town of Swan River, Manitoba. Many councillors have jobs in addition to their County responsibilities. However, it is generally assumed that such employment will not unduly interfere with a councillor’s ability to fulfill their elected responsibilities. Taking a senior, full-time appointment in Manitoba almost a twelve-hour drive away (according to Google maps_ pushes the boundary significantly. Interestingly, Gautreau was reimbursed by the County for many of the courses he used as qualifications for the Swan River CAO position.

There were contradictory messages about the appointment. From Swan River’s Dec. 3rd press release and from their Mayor’s comments in Rocky View Weekly’s Dec. 21st news article, it is clear that Swan River’s council believed they had hired Gautreau as their permanent CAO and were looking forward to his family relocating to their community. In contrast, Gautrea (while in Rocky View, at least) described his appointment as “short term” and “very temporary”. Turns out, Gautreau was correct. By Dec. 18th, Swan River’s Mayor confirmed that Gautreau had “resigned” and was no longer in their employ.