City Manager Allan Seabrooke says the way municipalities currently receive provincial and federal funding is a "disaster." (rdnewsNOW file photo)

By Troy Gillard and Sheldon Spackman

City Manager calls current system a “disaster”

City seeks municipal funding overhaul

Jun 25, 2020 | 10:51 AM

The City of Red Deer says a new model for funding municipalities is needed for them to remain fiscally viable, especially now that they’re struggling as a result of the COVID-19 pandemic.

Council voted unanimously on Wednesday to second a resolution from the City of Edmonton to be presented at the Alberta Urban Municipalities Association (AUMA) conference this fall. The resolution calls for the AUMA to “advocate for the Government of Alberta to reshape municipal finance for a new time and provide municipalities with reasonable measures and tools, and the responsibility that goes with them, to enable cities, towns and villages to meet their operating and capital budget needs.”

“It certainly supports what we’ve been saying, what I know you as council have been saying, is that we really need governments to step up and support us through our financial troubles from COVID-19,” City Manager Allan Seabrooke told council.

Seabrooke called the current funding system that relies heavily on property tax revenue and government handouts a “disaster” that needs a “complete overhaul.”

“(It) ties our hands to be able to financially plan ahead for our city,” he explained. “It’s really just waiting on our knees for the two other levels of government to decide what type of money and handouts they’re going to give our way instead of giving us funding (where) we know exactly what we’re going to get each year so that we as council and administration can manage our own city well enough without relying on two other levels of government.”

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“Municipalities are delivering more and more services, but the property tax model is proving to be more and more regressive as time goes on,” Mayor Tara Veer said in agreement.

Councillor Ken Johnston lamented the fact that the City gets only seven cents of every tax dollar collected.

“This motion is just asking that we no longer be treated as the poor cousins of orders of government as it relates to taxation,” he suggested, “no longer grasping onto the coattails of other orders of government when it comes to being able to provide the economic stimulus needed closest to the ground.”

Johnston said infrastructure programs announced by the federal and provincial governments put municipalities in “rabid competition” with each other to get a piece of them.

“This (resolution) basically says that it’s time for a new fiscal deal that enables all to prosper at every level,” he said.

Council recently approved up to $10 million in additional borrowing to cover any cash flow issues resulting from the COVID-19 pandemic until property taxes, which are due September 30, can be collected.