By Troy Gillard

Parkade built in 2009 still costing city

BUDGET: Revenue loss, outstanding loans causing large parking deficit

Nov 30, 2020 | 8:59 PM

The City of Red Deer is facing a sizeable deficit when it comes to parking operations, council heard during the first day of budget talks on Monday.

A projected $152,000 deficit for this year is being attributed largely to the COVID-19 pandemic and a loss of college students parking in the downtown area.

Tack that amount onto the previously accumulated deficit and the city is looking at a total parking operational shortfall of $279,000 by the end of 2020.

Tara Lodewyk, the city’s director of planning, explained that the unfavourable situation is the combined result of lower parking revenue and continual payments on two outstanding loans to finance building of the downtown parkade back in 2009.

“The debentures have caused strain on the reserve. Initially, we had money in the reserve to pay for the debentures and as time has gone on we’ve depleted the money in the reserve. Revenues have reduced and we’ve also reduced expenses, but it’s not enough to keep the reserve in the black,” Lodewyk laid out.

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Two major developments in 2020 resulted in a substantial drop in parking revenue for the city. The first being the waiving of downtown parking fees for several months during the pandemic. The second being RDC relocating its Donald School of Business to its main campus as many students, Lodewyk explained, parked regularly at the downtown parkade.

Lodewyk recommended to council that the parking operations deficit be rolled into the city’s general expenses so it can be covered by taxes. She also presented two other options on Monday: allow parking to remain self-sufficient and use internal borrowing to cover the deficit, or use tax revenue to pay off the first parkade loan and government grants to cover most of the second.

Councillor Ken Johnston, however, presented a fourth option to table the matter to early next year to give administration time to report back to council on refinancing possibilities for the parkade.

Council agreed to revisit the matter after that report is presented.

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Mayor Tara Veer says she’s confident council can meet its goal of a zero per cent on the municipal portion of property taxes for 2021.

Council set this as one of its budget guidelines earlier this year in light of the COVID-19 pandemic and its effects on the economy and people’s livelihoods.

“I do think in the recommended budget that staff have engaged in substantial work, have undertaken a complete reorganization at the City, a complete service review, in order to ensure that we can hold the line on taxation and utility rates,” Veer said Monday.

“Council will deliberate and there will be some areas of debate, but I do think that there is very strong consensus, if not unanimity in the fact that because of the impact of the pandemic and the continuing provincial recession on households and businesses in our city, that we have an imperative to hold the line and I think that‘s what we’ll see council do.”

City Manager Allan Seabrooke painted an optimistic picture of Red Deer’s finances when he gave his opening budget presentation Monday morning.

He said the city is on “solid financial ground” thanks to “timely expenditure reductions” and reserves that are healthy shape.

Day two of city budget meetings goes Tuesday starting with in-camera sessions at 10 a.m. Open session is expected to begin at around 1 p.m.