With a double-digit tax increase on the books, the time is right for City of Red Deer to reexamine its role, says Red Deer District Chamber.
Chamber CEO Scott Robinson said members of the business organization met with city staff several times before budget deliberations to discuss the city's financial position. So the grim message council got from its administration this past week about the risk of not dealing with its financial challenges now and the need for higher taxes and utility fees came as no surprise.
"That being said, it wasn't what we'd like to see," said Robinson of the city's 10.5 per cent tax rate increase.
"We were hopeful the city would realize a double-digit tax increase was going to be very hard on the business community. You couple that with the utility rate (increases) of over six per cent and you're now looking at roughly a 16 per cent increase if you're a property owner in the city of Red Deer.
"From that perspective, it's a huge increase. Probably the biggest in the province this year."
The business community was hoping city administrators would find more ways to cut costs.
The chamber believes more efficiencies can be found in city operations and non-core services that could be turned over to the private sector.
Robinson said the chamber intends to continue working with the city to see what can be done better and whether its role needs to evolve.
"What are their core services. What is core? That's where they should focus. It's unclear what that means to the city and it's unclear what it means to the public at this point too."
An in-depth review of how the city operates and what services it provides may turn up different ways to offer non-core services, he added.
The chamber agrees with the city's strategy to wean itself off reserves to balance budgets. During this week's budget deliberations it came out that it may have been the first budget for as long as anyone can remember where no money was pulled from reserves.
If the city does not get a handle on its finances and large tax increases continue it will eventually be too expensive for businesses to operate in Red Deer and they will go elsewhere, he said.
Robinson said that despite the tax and utility rate increases approved this year, Red Deer remains competitive with other communities in Alberta.
"But that could change if things don't change in terms of how services are delivered."
