SOUTH SLAVE - The two tax-based municipalities in the South Slave – Hay River and Fort Smith – have taken different routes to their 2011 budgets.

Hay River Mayor Kelly Schofield holds the town's provisional budget for 2011. A final budget will be passed by the end of January. Over in Fort Smith, council has decided to hike taxes five per cent. - Paul Bickford/NNSL photo

On Dec. 20, Fort Smith town council passed its budget, which will include a five per cent increase in taxes.

Fort Smith will see a municipal tax hike with its new budget.

"This is as a result of increased costs for heating and other utilities, for wages, for supplies and other materials," Mayor Janie Hobart said.

She said she hopes residents will understand the need for higher taxes.

"The municipal services that are provided in the Town of Fort Smith are very, very good and they come with a cost," she said.

Four councillors voted for the budget, while two were opposed. Two councillors were absent for the vote.

Hobart noted the operating budget for 2011 is very close to what it was for 2010.

The budget includes a number of capital projects, including planning for a water plant heating project; drainage and road work; street lighting; a forest fire abatement program; work on sidewalks, boardwalks and trails; a landfill recycling program, particularly for tires; rubberizing a new running track; a new asset management computer system; work on parks and playgrounds; and three major planning exercises for advisory boards on tourism, sustainable development and recreation.

The total expenses and revenue in the budget will each be just over $9 million.

In 2010, Fort Smith had a tax increase of 7.8 per cent.

In Hay River, town council unanimously approved an interim budget.

"The idea tonight is to pass a provisional operating fund budget," said deputy mayor Mike Maher. "We're not setting the mill rate. We're not doing anything. We'll just keep the lights on in January, and we have a lot more work to do on that budget."

Maher assured residents they should not be concerned about expenses related to a list of capital projects in the proposed budget.

"There's a lot of work to do to it, and a lot of those things will be cut," he said. "They'll be moved down further in our five-year plan."

Maher was responding to concerns about the budget expressed by a three-person delegation representing the Hay River Chamber of Commerce, the new Hay River Ratepayers Association and the Corridor Ratepayers Association.

Following the meeting, Mayor Kelly Schofield noted the budget delay is not unprecedented.

"There's nothing strange about what we're doing," he said. "It's not a normal process, but it's not unheard of either."

Schofield noted the provisional budget had to be passed to continue to receive funding from the Department of Municipal and Community Affairs.

"We passed the provisional operation and maintenance budget. That is all," he said. "That gives us the right to pay bills, to collect bills, to pay our staff, to open the doors. Just to operate as a municipality."

The town still has to approve the utility part of the budget, which includes water rates, capital expenditures and the mill rate – the tax per dollar of assessed property value.

Schofield said the main reason for the budget delay was the town was unable to find a new director of finance until late in the year.

The mayor said the municipality knew entering November there would be a delay in the budget.

Council also passed a motion directing its communications committee to investigate this year's budgetary time crunch.

Schofield noted town administration and organizations receiving funding from the municipality, such as the Chamber of Commerce, the public library and the Hay River Museum Society, have been asked to tighten their belts so the municipal mill rate might be lowered by at least half a mill. It is hoped the initiative will save $150,000-$160,000.

We welcome your opinions. Click here to e-mail a letter to the editor.