Council To Debate Motion To Reduce Taxes After Passing 1st Reading of Bylaw to Increase Rates

City council during Tuesday’s regular meeting. (Photo Alex McCuaig)

City council is dealing with two opposing directions when it comes to property taxes after passing first reading of a bylaw to increase rates and a motion to decrease them, during Tuesday’s regular meeting.

No questions were asked by councillors following a half hour presentation on the situation by acting city CFO Lola Barta which came with a recommendation to increase property taxes to 6.1 per cent. No debate followed first reading of the bylaw which is standard procedure.

“If we don’t speak to this, we’re going to look so stupid,” stated Coun. Stu Young following the passing of first reading of the bylaw while acknowledging the procedure. “This is literally what everybody wants us to talk about.”

Young went on to state it thought it was silly not to have a conversation about the situation and, “I think we all have different opinions when it comes to this. I think people should understand what those differing opinions are.”

Coun. Stu Young.

Despite the comment, Young quickly left after the meeting without speaking to media.

The first reading of the bylaw was followed a motion by Coun. Chris Hellman that would amend the bylaw councillors just passed to reduce the property tax rate to 4.9 per cent.

While the motion was less encumbered by procedure, debate was still limited with only councillors Bill Cocks and Dan Reynish speaking briefly to it prior to voting.

The motion passed with only Coun. Cheryl Phaff voting against the move to reduce the tax rate through the bylaw amendment.

During her presentation, Barta pegged the causes of the need for a rate increase on the rising costs to run the city on inflation, commodity price volatility and previous budget amendments.

What wasn’t specifically mentioned was the $8.5 million increase in staff wages in 2025 over the previous year nor that salaries were over budget by more than $2.5 million last year. 

Acting city CFO Lola Barta.

During a budget presentation at council in November, staff projected a 5.6 per cent tax increase for the next several years to close a $5.1million ongoing budget gap. That presentation also forecast a more than $3 million increase in staff wages for 2026. Despite that, staff expressed confidence the 5.6 per cent increase would be sufficient, albeit ongoing past the current two-year budget cycle.

“The plan is, as I mentioned earlier, is the 5.6 per cent tax increases for 2026, 2027, 2028 annually,” Jaret Dickie, corporate planning manager, told council five months ago.

The Medicine Hat Owl has learned $900,000 in external legal fees were also posted by the city on March 12, 2025 just prior to the previous council deciding to cover a more than half million dollar hole in the 2025 budget by dipping into city reserves. Those legal expenses were spread across three large corporate legal firms including $500,000 to Borden Ladner Gervais and $200,000 each to McCarthy Tétrault and Reynolds Mirth Richards & Farmer. 

The city has also retained external legal services from provincial law firm Parlee MacLaws which recently lost a decision against vocal council critic Nicole Frey who has no formal legal training and was self represented in her case at the Court of King’s Bench. It’s not yet clear what the bill is to the city for that action.

Since the November budget presentation to council, councillors heard the 2026 budget is now $550,000 short.

Like Young, Phaff, Hellman as well as Mayor Linnsie Clark and Coun. Clugston, did not take questions on the issue of property taxes.

Coun. Bill Cocks.

Councillors Cocks and Yusuf Mohammad did avail themselves to the media on the question of tax hikes which was a major election issue.

Asked about whether council has a plan to wrestle the budget and specifically on the significant increases to wages, Cocks said, “there is a plan.

“The budget that we had to set a tax rate to fund was established by the previous council. We’ve got our own budget debate coming up which is going to start right after we get these tax rates set.”

Staffing at the city will be a particular focus, stated Cocks.

“Are we over staffed? Are there too many employees working for the City of Medicine Hat? Where can we save money? We’ve got to find some cost savings,” said Cocks. “And there is going to be some significant debate about that and I think you’re going to find there is some significant cuts,” said Cocks.

He added he is hoping there won’t be significant service cuts through that process, “but I think we have to confront our organization and say, ‘you have to do more with less.’”

Coun. Mohammed stated he stands on a fair tax rate. 

“I’ve said that from the beginning. I understand that when we are setting taxes, we are making sure cost pressure is not on citizens - I’m very cognizant of that,” he said.

Coun. Yusuf Mohammed.

Mohammed says he’s looking for a win-solution on the question of property taxes in which there is efficient use of city renvene, the city isn’t dipping into reserves and reasonable services are maintained.

Asked about the fairly significant external legal bill the city is on the hook for, Mohammed indicated he couldn’t speak to the details about those expenses but said he’s focused on this council’s upcoming discussion on the 2027-28 budget cycle which he said would be thorough.

Both the property tax bylaw and proposed amendment will be debated at the April 20 regular council meeting with a decision on the rates required to ensure notices are sent to property owners by early May.