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By Alessia Proietti

Feedback sought until Nov. 18

Red Deer operating and capital budgets released; 4.79 per cent property tax increase proposed

Nov 8, 2022 | 9:46 AM

A property tax rate increase is being proposed for Red Deerians next year.

Red Deer city administration officially handed over its proposed 2023-2024 operating and capital budgets to council during their meeting on Monday, with a 4.79 per cent property tax rate increase proposed for 2023.

The budget recommended by administration proposes a 4.79 per cent property tax increase, or $6.757 million dollars, for 2023 and 4.38 per cent, or $6.525 million, for 2024. According to City officials, one per cent of each year’s increase will be transferred to capital reserves for future projects.

For 2023, in relation to a typical home assessed at $345,000 in Red Deer, this would represent a property tax increase of $119.29 per year or $9.94 per month. On an average weekly basis, the increase would be $2.08.

City of Red Deer’s proposed 4.79 per cent property tax increase in 2023 impact on average household. (City of Red Deer)

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The City states the budgets and plans have been built based on the preliminary direction given by council in March 2022 and that the increase will go towards the services that Red Deerians use on a daily basis.

“When council set preliminary guidelines for city budgeting earlier this year, the economic situation for our community was much different that it is now,” said Mayor Ken Johnston. “Both city council and administration recognize the need to keep taxation and other fees as low as possible for our citizens and local businesses, however we need to be more deliberate in balancing costs and funding sources while investing in the future of our community given this new economic reality.”

With the previous two years of no tax increases, The City had dipped instead into their reserves, with officials confirming that the funds are made to be used in urgent times. Director of Corporate Services Lisa Perkins stated that approximately $21 million remains in the Operating Reserve Tax-Supported and aims, going forward, to replenish some of the funds. She says the Government Finance Officers’ Association of Alberta suggests a goal for municipalities to have enough in their reserves to support an average of two months of operating expenditures, which would be $65 million for The City.

“We worked alongside our organization to develop short and long-term strategies to get us back on track financially,” said City Manager Tara Lodewyk. “The City of Red Deer has remained in a reasonable financial condition. However, as we look to the future, we know we need to be ready for the next opportunity that comes to our community. These events can be welcome, like the return of economic growth to our community and area, or could challenge us in new ways, like the COVID-19 pandemic.”

City of Red Deer’s Operating Reserves Tax Supported funds. (2023-2024 Capital Operating Budget p.18)

For the capital budget, Lodewyk said the focus is on maintaining what the city currently has rather than beginning new projects.

She says some projects include bringing the GH Daw Community Centre operations online, redevelopment of the downtown Centennial Park, rehabilitation of the Canadian Pacific Railway bridge as a historic asset to the community, decommissioning of the Kinex Arena, and remediation of the Kinsmen Arenas.

As part of the City’s efforts towards Truth and Reconciliation, the City Manager said $100,000 in 2023 and $150,000 in 2024 will be allocated toward the planning for an Indigenous Cultural Centre, to begin construction in 2025 for an estimated $4.5 million.

Operationally, Lodewyk says some staffing increases have been proposed to the municipal police force and emergency services to reduce overtime and employee burnout.

“Like other municipalities, The City is facing unprecedented financial challenges stemming from the economic slowdown, extraordinary inflation, coupled with the impact of COVID-19 recovery, provincial downloads and reduced and uncertain government grants,” said Lodewyk. “We find ourselves in a situation that is a culmination of many factors that have led us to a bit of a perfect storm when it comes to supporting our community, while maintaining a tax rate that is not only supported by council, but by our community.”

Council gave administration the following financial parameters earlier this year:

• Property tax increase of 4.7 per cent in 2023, and 4.3 per cent in 2024, equating to about $6 million annually in additional revenues
• Capital amenities and growth contribution of 1 per cent for 2023 and 2024 to help with building back the reserves
• User fees and charges to be reviewed and implemented in 2023 in compliance with council policy
• One time funding from reserves in 2023 and 2024 of $750,000 per year to support council’s Strategic Plan implementation
• Explore utilities revenue and what would be required to achieve a utility dividend of $3 million in 2023 and 2024
• Increase reserve levels
• Change the Capital Contingency Policy to allow the City Manager to address new projects from a maximum of $50,000 per project and $200,000 a year
• Bring forward an operating contingency policy, like the Capital Contingency Policy
• Bring forward a tax supported operating reserve policy for emergent and urgent issues

Council will deliberate the budgets from November 28-30, 2022.

“This budget appreciates the great community we live in, recognizes where we are at today, and takes responsibility for our future,” said Lodewyk. “Administration and I delivered a budget to council that respects their guidelines, focuses on maintaining the high quality-of-life Red Deerians love and expect, while recognizing we are all feeling the same impacts of inflation in our homes and businesses.”

Residents are being encouraged to review the budgets and plans online and provide feedback to city council through an online comment form. Hard copies of budget binders will be available at City Hall, Downtown Public Library, GH Dawe Public Library and Timberlands Branch Public Library starting Tuesday through November 18.

Visit www.reddeer.ca/budget for all the details.