June 19th, 2024

Inflationary pressures influencing City budget planning

By Al Beeber - Lethbridge Herald on October 27, 2022.

LETHBRIDGE HERALDabeeber@lethbridgeherald.com

As City Treasurer, Darrell Mathews knows well the pressures facing administration as it deals with higher inflation and rising costs.

Inflation has been cited during discussions about the 2023-26 City budget as among the external pressures facing civic government as it prepares the budget.

The forecast increase to the base budget amounts to an average of $94.20 per single family residence based on an average market value of $285,800 next year. The base budget, says the City, is what’s required to maintain current service levels. Presently, the base increase is forecast at 3.77 per cent annually over the next four years.

Mathews, in a recent phone interview, said the City of Lethbridge is facing pressures like residential taxpayers with increased costs for fuel and utilities hitting the bottom line.

“Corporate fuel, the fuel that we use for our transit and fleet, there are big increases in inflationary costs expected there,” said Mathews.

Fuel prices, especially diesel which is used for the bulk of fleets, has gone up considerably in the last year, Mathews said.

“Traditionally, a high mark would have been $1.45 per litre and we’re looking at prices now in that $1.60 to $1.70 by the end.

“There’s two factors for that. There’s inflation, which you see is going on in the global prices, plus also you have the increase in the taxation side, too,” including the carbon tax, he said.

The price of oil for vehicle maintenance has increased as well.

“All those consumable pieces have dramatically increased in the last little while,” said the treasurer.

Facilities use electricity and natural gas like homes and the City expects those prices to rise, as well. The cost of supplies have also increased for the City. Chemicals used at the water treatment plant and wastewater treatment plant have increased substantially in price, Mathews added.

The processing and hauling of those chemicals has also increased, creating a “trickle of inflation almost on every single good we use just as everyone else has seen.”

Insurance costs have also increased.

“As the insurance market has been hardening, not just for residential and commercial but also for industrial, municipalities are also faced with that same thing in the marketplace for insurance costs as well,” said Mathews.

“There’s a wide range of coverage we carry and those insurance premiums have been going up consistently,” the treasurer added.

The city is also looking at increasing costs for collective agreements with personnel.

“All of those factor into it,” he said of inflationary pressures.

“Inflation is continuing to rise” across the globe, Mathews added, saying the Bank of Canada is raising interest rates to combat it but “it has substantially risen over the last two years,” he said.

“This is probably one of the toughest budgets,” since Mathews has been with the City, he said.

“Every single month there’s been continual change in the market place with the global geopolitical changes that are going on right now. . .usually we can set an inflation rate at the beginning and know that it’s going to be two per cent or whatever but that’s not the case. Every month it’s been different,” he said.

Follow @albeebHerald on Twitter

Share this story:


Comments are closed.