(rdnewsNOW file photo)

By Josh Hall (Twitter: @Vancan19)

BUDGET 2020: TRIMMING, CUTTING AND DEFERRING

Council whittles tax hike down, reduces capital contribution by half

Jan 10, 2020 | 6:54 PM

Red Deer city council made a big decision on Friday during Operating Budget talks by cutting this year’s contribution to capital projects in half.

The reduction amounts to $682,000, and half a percentage point on the property tax increase. Mayor Tara Veer explained council’s thinking.

“Council approached this very intentionally. We did keep a strong component of the capital savings plan, but there was a recognition that we’ve had to manage expectations on the capital plan anyways as a result of provincial grant cuts,” she says. “So for us to reduce the annual amount for this year alone will provide the necessary tax relief for businesses and households without compromising our long-term capital vision.

Chief Financial Officer Dean Krejci acknowledged that while it is a significant decision for council to have made, the $682,000 looks even smaller when you look at the 10-year capital plan which is worth more than $1.2 billion.

Council began debate on Jan. 7 with a projected 2.48 per cent property tax increase and a total Operating Budget of $385.7 million.

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Here’s where else they’ve cut to make headway towards a smaller tax hike:

1) $17,000 — This comes in the form of a capital project council elected not to move forward on during Capital Budget talks in November; therefore the project doesn’t need its projected operating expenses. The project is a Road and Weather Information System — in other words, a traffic camera system within the city so residents and the City can monitor the roads. That item was deferred until 2021.

2) $185,000 in building permit revenue — City staff originally projected revenues from building permits to be much lower, but have since revised their projection by a net positive $185,000, thereby reducing the tax burden.

3) $500,000 transfer to reserves — City council had been presented with the option to put $500,000 into its Operating Reserve this year, but elected not to, thereby reducing the tax burden.

4) $300,000 — Since releasing the budget in December, staff have revised their projection for construction growth revenue in 2019 from $900,000 to $1.2 million, once again reducing the tax burden.

5) $682,000 — As explained above, council voted to reduce this year’s contribution to capital projects by 50 per cent, reducing the tax hike by half a percentage point.

With those five changes, the property tax increase is reduced from 2.48 per cent to 1.26 per cent. Should #6 (below) be fulfilled, the projected increase would be just 0.97 per cent.

6) $400,000 — Council has directed City administration to find an additional $400,000 in savings between now and when the property tax increase and budget comes back this spring for a final stamp of approval. City Manager Allan Seabrooke expressed strong confidence that it can be done.

It was noted on Friday by several council members and City staff that 0.75 of a percentage point of the property tax is caused by the province’s increased take of fine revenue, which you can read about here: Fine revenue loss stings, but won’t hurt RCMP service delivery

Below are a number of other related Operating Budget stories written by the rdnewsNOW team this week:

External audit coming for recreation, parks and culture department

Operating Budget 2020: Airport funding bumped up

Red Deer city council stands behind Volunteer Central

Ambulances getting bottlenecked as Red Deer Hospital expansion wait persists