(rdnewsNOW file photo)

By Alessia Proietti

Day 1 recap

BUDGET: Low reserves, repurpose councillor-specific budgets, high community engagement

Jan 23, 2024 | 6:38 PM

Red Deer city council got through their first day deliberating the 2024 budget on Tuesday, with a focus on depleting funds in reserves, amendments to information technology (IT) and legal costs, and high levels of public engagement on the subject.

The multi-year budget meeting will run from January 23-26, with the goal of adjusting the budget by $16 million to balance it.

The day started with presentations from various city departments, including an overview of where citizen tax dollars are allocated, making up 40 per cent of the City’s revenues, and factors that have affected the budget including shortfalls in expected revenues from parking, Alberta Health Services Emergency Dispatch, inflation, and a slow economy.

RESERVES

Mike Olesen, General Manager of Growth & Services, reiterated how the city must step back from their dependence on the Operating Reserve Tax Supported (ORTS).

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While the City has various reserves, the purpose of the ORTS is to manage one-time, unexpected emergent financial needs. Council policy states that the reserve should not be used to address ongoing pressures and should have a minimum balance of 10 per cent of total budgeted operating expenses, or in this case, around $35 million.

The City confirmed that the balance was $40 million by the end of 2020, but hit $9 million by the close of 2022. While $1.4 million is put into the reserve annually, Olesen says they budgeted to use another $5.4 million in 2024.

IT AND LEGAL COSTS

As each division within the city will present their budget amendments, the IT and Legal & Legislative Services departments shared their expenses first.

With $385,000 for increases in software maintenance like Microsoft licenses and $898,000 in infrastructure rehabilitation in cell phone and computing networks, council questioned if costs could be reduced for the municipal by-election and the Integrity Commissioner position.

Council passed in September 2023 a Code of Conduct Bylaw that would retain an Integrity Commissioner to give guidance to councillors seeking ethics advice and investigate all formal code of conduct complaints when necessary.

READ: Red Deer city council adopts new Code of Conduct Bylaw

Director of Corporate Services Lisa Perkins said she would be willing to bring the estimated cost of $105,000 down to $85,000.

Councillor Kraymer Barnstable also suggested reducing that to $50,000 and having councillors use their allotted council budgets when they need advice from the Commissioner. With each councillor given $13,000 annually for things like conferences and training, Barnstable said few councillors use it to their full capacity.

PUBLIC ENGAGEMENT

Originally, a property tax increase of 4.1 per cent was approved for 2024. For a typical home assessed at $345,000 in the city, this would equal a property tax increase of $114.81 per year, or $9.57 per month, and $6,125,835 in municipal tax revenue for the City.

Administration is proposing to raise the tax rate to seven to nine per cent instead, which would represent a tax increase of $176 to $226 per year, or $14.67 to $18.83 per month. For the City, this could mean up to $13 million revenue.

Potential tax increases by rate, the cost yearly to residents and the cost monthly to residents, based on a home valued at $345,000 in Red Deer. (Red Deer city council presentation on Tuesday)

READ MORE:

Red Deer may see 2024 property tax increase of seven to nine per cent; city explains breakdown

City of Red Deer and council finalize budget with lowered municipal tax increase

Councillor Dianne Wyntjes shared tax rates in municipalities across the province with 3.28 per cent in Grande Prairie, 5.1 per cent in Leduc, 3.75 per cent in Lacombe City, 5.38 per cent in Sylvan Lake, and salary increases for city councils in Calgary and Edmonton, which Red Deer does not have in their budget.

Councillors like Lawrence Lee questioned that while no one wants to pay taxes, there should be a different connotation to the cost.

“Everyone says ‘taxes are bad’. Why aren’t taxes an opportunity, an investment, in our community to be the best possible municipality as we can?” he asked.

Inviting citizens to share their thoughts in January, Olesen said it was one of the City’s highest engagements on a budget survey.

Receiving 275 survey completions, over 250 social media comments, and 21 email inquiries, 71 per cent of respondents said they would rather see a decrease in city service levels to prevent tax increases while 23 per cent chose to maintain service levels with a modest tax increase.

The majority ranked fire and 911 dispatching as the highest service priority and voted to see future financial prioritizations of balanced budgets, provincial and federal advocacy for stable funding, and predictable tax increases.

POSITIVES

Olesen reiterated that transparency can at times lead the public to see the economy in a strictly negative light. He shared positives such as the high-rise properties starting construction in Capstone and current negotiations with three residential and non-residential developers in the neighbourhood, a 3.5-acre deal signing for another multi-year developer in Timberlands, the selling of show homes in the area with new ones to come this spring, negotiations for four acres in Queens Business Park, and the interest received in the Eastview rezoned lot for multi-unit residential development.

Council will continue with division budget presentations on Wednesday.

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