(rdnewsNOW/Ashley Lavallee-Koenig)

By Ashley Lavallee-Koenig

emotional debate as cuts made

Red Deer city council approves “absolutely necessary” 10.5% property tax increase

Nov 21, 2024 | 11:48 PM

Following four days of debate, Red Deer city council has approved an operating budget of around $512 million; this yields a 10.5 per cent property tax increase, which for an average home in Red Deer — assessed at $350,000 — represents an increase of $22.75 per month.

A motion on the property tax increase passed 5-4 after councillors spent the bulk of Thursday making incremental cuts wherever possible in an effort to reduce a looming $18 million deficit.

“In my 12 years, this was by far, I would say the most emotionally challenging budget that I was a part of, and I’m sure I can speak for administration too,” reflected Mayor Ken Johnston.

He added, “I would certainly encourage Red Deerians to be able to understand, or to value, first of all, the work that their administration and their council put into the number itself. It certainly was a very detailed, very thorough, very analytical process.”

Councillors Kraymer Barnstable, Vesna Higham, Victor Doerksen, and Chad Krahn voted against the motion, citing concern the number at which they landed still doesn’t address the bigger picture and what they’d heard from or promised the community.

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“With numbers like these, I do still wonder and ponder how many of these tax raises will affect instrumentally, people that won’t be able to appreciate some of the things we have because they won’t be able to pay their tax bill,” Barnstable commented.

Councillor Dianne Wyntjes spoke in favour of the motion and addressed that this is the first budget she’s seen approved that has no planned withdrawals from reserves.

“You’ve got to touch everybody and I think this budget, for the most part, did that,” she commented. “City Manager, you said change is hard. It is, and I think the changes that we’re going to see next year as we see the impact and outcomes are going to be hard.”

Multiple signals from administration communicated that this year’s budget needed to focus on maintaining rather than enhancing the city’s assets and replenishing depleted reserves, which council endeavoured to respond to.

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READ MORE: City of Red Deer sets the stage for Operating Budget debate

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Although the tension was palpable, and emotions ran high at times, Growth & Finance GM, Mike Olesen, said the difficult decisions made today will have an impact on the city’s future financial position.

He commented, “In previous years we were focused on putting out fires and doing more with less. Now we have an opportunity to move forward and really focus on building our reserves and delivering on the service council put their votes of confidence behind.”

City Manager Tara Lodewyk said the most notable reductions made were to parks and trails maintenance and service levels, as well as to concrete rehabilitation programs.

On the flip side, she reminded that resources were diverted in positive ways as well, such as to the Red Deer Symphony Orchestra, Tourism Red Deer, to catch up on inflation costs, and to speed up the city’s development process.

“As much as we finished, the work still continues and when we’re looking to our future, you’ll see work coming forward in front of council that takes that line of sight into the future further… today was a turning point in that we were able to close the gap that had been created from many years of zeroes,” Lodewyk said.

The following budget decisions were passed unanimously:

• Reduction of $30,000 from Let’s Talk from the 2025 Corporate and Employee Services Budget. Councillors mentioned that additional community engagement opportunities exist and that it’s quite late in their term for one given next year’s municipal election.
• Council directed administration to explore funding options that could contribute to capital reserves through the lens of the Community Services Master Plan (dollar impact pending administration’s findings).
• Reallocation for Red Deer Symphony Orchestra (RDSO) funding: rather than receiving year-to-year programming grants through the Community Culture Development Fund, the RDSO will receive ongoing operational funding of $47,000 by removing that amount from the competitive grant stream.
• Reduction of $1 million from Corporate Fleet Reserve Sustainability.
• Reduction to the Office of the Mayor’s budget by $120,000.

The City clarified as well that the 10.5 per cent municipal tax increase does not mean each individual property tax bill will change by that amount.

“City council’s approval of the operating budget is reflective of the current economic realities impacting our organization and our community,” said Mayor Johnston.

“This tax increase of 10.5 per cent is absolutely necessary if we want to continue to provide the critical programs and services our citizens expect and need. Over the last number of days, city council and administration have put forward recommendations and made decisions with rigour and careful consideration. Today we took a step forward in ensuring a financially sustainable future for our organization and our community.”

Many other budget amendments were subject to rigorous debate by council, with some being defeated, others withdrawn, and one postponed to be reevaluated in Q1 of 2025, following a report from administration.

The capital portion of the budget was passed at the beginning of the week, on November 18, with a budget of $88.9 million in new project costs for 2025, and $148 million per year for the 10 Year Capital Plan.

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READ MORE: Red Deer city council approves 2025 Capital Budget and 10 Year Capital Plan

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Now that the budget has been approved by council, the tax rate bylaw will be updated with the change in spring 2025.

More reaction from the city can be found at reddeer.ca.