Audit shows revenue decrease for City of Red Deer

Reinforces council’s decisions to delay capital projects

Reduced city revenues brought to light in the most recent audit, show why council made decisions months ago to delay some capital projects.

A major reduction in city revenues had forced them to perform major surgery on the city’s 10-year capital plan. Many of the decisions around delaying capital projects were made during capital budget discussions at council in November, 2016.

Among the delayed projects were the North Highway Connector, the 911 emergency Communications Centre and Fire Hall #6, which is no longer in the 10-year-capital plan. The site for the city’s sixth fire hall has not been determined.

The audit, released in April, reinforced this loss of revenue as it showed a $53.746 million reduction in the city’s statement of operations from budgeted to actual.

The largest decreases came from user fees, which dropped from a projected $189.447 million to an actual of $161.378 million in 2016. Red Deer collected less in user fees in 2016 than it did in 2015, by $501,000.

Mayor Tara Veer, however, pointed to a reduction in grants from the provincial and federal governments, in particular at the provincial level due to the economy.

“The audit essentially confirmed what we knew in November when we dealt with the capital plan,” said Veer.

Projects such as the North High way Connector have been pushed back, with the bridge and road being built in 2020 to 2022. The 911 Emergency Communications Centre has been pushed back to 2021.

As well, numerous smaller road, sewer and storm drain. A reduced city growth rate has impacted the demand for infrastructure.

“The reduction in revenues for these self-supported areas will not impact the tax rate,” said Dean Krejci, the city’s chief financial officer.

“Unfortunately, like many other businesses and industry in our province, the economic downturn means we’ve generated less revenue on our utility supported side. However, as this revenue is used to manage needs related to growth, the slow economy means this infrastructure requirement is reduced.”

While there was a decline in revenue, City manager Craig Curtis noted operating expenditures were below budget amounts in 2016. The audit was conducted by KPMG.

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