Red Deer City Council approved the 2022 budget with an additional $5.571 million in operating costs and $5.976 in capital costs

By Alessia Proietti

Zero per cent property tax increase

Council approves 2022 budget adjustments

Nov 30, 2021 | 9:24 AM

Following an eight hour Multi-Year Budget meeting, Red Deer city council approved the 2022, or year two, capital and operating budgets, with adjustments, Monday evening.

The 12 recommendations, driven by municipal, provincial and federal needs and requirements, add up to $5.571 million in operating costs and $5.976 million in capital costs.

The is in addition to the approved total Operating Budget for 2022, allocated for day-to-day costs funded mainly from property taxes, and sales of goods and services and grants, which is $388.594 million. The approved total Capital Budget for 2022 allocated for major projects is $103.597 million.

As set out in 2020, and achieved in 2021, the promise of a zero per cent property tax increase was accomplished for the 2022 budget, after much debate.

A zero per cent property tax increase does not mean that property tax bills will stay the same, however, as property tax bills may fluctuate depending on requisitions like education and seniors housing collected by the province and individual property assessments.

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Similar to last year, for the average home owner with a residential property assessed in 2021 at $325,000, the total property tax bill will be around $3,238.08. Broken into three categories, it would be $2,365.06 in municipal taxes, $858.36 in provincial education taxes, and $14.66 in seniors affordable housing taxes.

According to Chief Financial Officer Ray MacIntosh and Director of Corporate Services Lisa Perkins, the decrease in operational costs due to cuts made during the pandemic like lay-offs and temporary closure of services, led to a surplus, placed into operational reserves. As well, 98 per cent of residents paid their taxes in full for 2021.

City officials say these added funds along with other capital reserves allowed for a zero per cent property tax increase. This would mean that for the years of 2023-2026, tax increases would be slightly higher to compensate, with estimations of at least two to three per cent or higher.

In addition, the City’s debt limit has also decreased due to the pandemic. The Government of Alberta allows municipalities to incur 1.5 times their annual revenue which in 2019 for Red Deer was $541.1 million but is projected to be $534.2 million in 2020. The City has also set a policy to limit to 75 per cent of that provincial debt limit.

Some councillors voiced concern about relying on reserves for two consecutive years. Councillor Laurence Lee put in a motion for increasing the tax this year at a lower but consistent rate of 1.5 per cent, rather than a higher rate beginning in 2023.

“I would vote to understand, anticipate, to give that predictability, that sustainability, and the transparency to say ‘we are going to experience this increase’,” he said.

For the average household as described before, that would amount to an extra $35.48 per year or $2.96 per month. Businesses would likely need to pay around double or $6 extra per month depending on their size.

Other councillors like Kraymer Barnstable voiced concern about adding expense during the pandemic when citizens were promised otherwise.

“That’s part of our four-year budget that we have coming; that’s part of our strategic plan. There are options that we can go down to not ask high demands of the taxpayer,” he said. “Right now people are in a situation where they can’t afford to tweak their budget.”

The proposed amendment lost by a vote of 5-4 .

“Citizens will not see a tax impact this year due to these additions; they will also not see any changes to the overall service delivery in our community,” said Tara Lodewyk, Interim City Manager.

The additional approved capital projects funded through various capital reserves are:

• E-ticketing software to replace manual process for Peace Officers: $35,000
• Replacement of aerial pumper truck for Emergency Services: $2.386 million
• Hydro excavation Waste Facility for Environmental Services: $3.555 million

The additional approved operational budget items funded by operating reserves are:

• Property tax penalty revenue reduction during pandemic: $300,000
• Increase in tax adjustments from appeal loses: $250,000
• Consultant fees for aid in adopting mandatory accounting standards: $100,000
• Emergency Services overtime pay: $1.2 million
• Biology lab services from provincial to municipal responsibility: $200,000
• RCMP wage increase contract settlement: $2.37 million
• Transitioning the Social Diversion Team from a pilot project of intervening cases of homelessness and mental health, to an ongoing service: $525,000

One item on the additional operating budget raised some contention among councillors: the National Day for Truth & Reconciliation, estimating $230,000.

Councillor Vesna Higham said the costs associated for the holiday do not contribute to reconciliation.

“I personally would rather see that money and actually apply it to specific activities where the community can learn, they can grow and understand in terms of educational opportunity to enhance our knowledge of and our commitment to Indigenous history, Indigenous issues and Indigenous aspirations within the community,” she said.

Mayor Ken Johnston, however, compared the doubts of its positive impacts to the doubts of Family Day, created in 1990 by Alberta Premier Don Getty after, some say, his son was arrested for cocaine-related charges.

“At the time, Premier Getty was reviled and ridiculed frankly by many citizens for how dare he recognize a day devoted to family relationships,” he said. “This is an opportunity for us to stop and reflect as to where our relationships lie.”

In early 2022, council will set its strategic priorities and budget guidelines to allow administration to develop the four-year budget. That will go to council for consideration in the fall of 2022 and will be the first four-year budget for The City of Red Deer.