City a big spender

The City of Red Deer is struggling to curb operational spending and will continue to do so for some time because of high construction costs and other external pressures, city manager Craig Curtis says.

The City of Red Deer is struggling to curb operational spending and will continue to do so for some time because of high construction costs and other external pressures, city manager Craig Curtis says.

Red Deer was recently named in a report on municipal spending as being the 11th highest spender out of 18 Alberta cities during the period of 2000 to 2007.

“All Alberta municipalities are in a very similar position and there are very good reasons for that,” said Curtis on Wednesday. “So I think it’s a very one-sided logic that brings them to the conclusions that they did.”

The Canadian Federation of Independent Business looked at financial summaries provided by municipalities to Alberta Municipal Affairs and then ranked them based on a Fiscal Sustainability Gap, a ratio that compares the operational spending growth with the growth in population and inflation. According to the federation’s analysis, Red Deer’s Fiscal Sustainability Gap was 1.45, which translates into Red Deer spending 1.45 times the rate of inflation and population.

The report shows that only 67 of Alberta’s 349 municipalities, or 19 per cent, kept operational spending at or below population and inflation growth.

As with its first report for the years 2000 to 2006, the federation says these expenditures are growing at an unsustainable rate.

Although Curtis disagrees with the analysis, he said the report does point out that Red Deer is below the average in spending and is almost on par with Calgary and Edmonton. Red Deer is also slightly below the average regarding per capita operating spending.

Three factors are causing municipal costs to be higher than the general rate of inflation, Curtis said.

“We’re very much in the construction business and a large extent of our work deals with gravel and paving and all those sorts of things,” he said. “Those costs in the private sector have gone up over 20 per cent a year in the last number of years.”

Construction costs dipped last year and again this year, but they are expected to rise in 2010, Curtis said.

“When you are looking at 20 per cent increases, those were way above inflation, which was running around three or four (per cent).”

The city is in the business of growth, which requires spending on infrastructure and other projects before getting any revenue back, Curtis added.

Thirdly, provincial standards have driven up costs.

“There are new standards for water management, testing — all good things but they do push up costs,” Curtis said.

Richard Truscott, Alberta director for the national federation, said earlier this week he doubts municipalities will have shown greater restraint in 2008 and 2009, despite a slower economy.

Curtis agrees.

“Costs haven’t come down to the extent that they went up,” he said.

Municipalities across the province are struggling with the same external pressures, many of which come from the private sector, Curtis said.

ltester@bprda.wpengine.com

Just Posted

Parenting: Every woman will have a different pregnancy experience

Wife whose hormones are unbalanced can be unpleasant experience

Men posing as repo men attempt to steal vehicle in Red Deer County

Two men attempted to steal a utility vehicle from a Red Deer… Continue reading

Red Deerian spreads kindness with one card at a time

One Red Deerian wants to combat bullying by spreading kindness in the… Continue reading

Bowden baby in need of surgery

“Help for Alexis” Go Fund Me account

PHOTO: First Rider bus safety in Red Deer

Central Alberta students learned bus safety in the Notre Dame High School… Continue reading

WATCH: Annual Family Picnic at Central Spray and Play

Blue Grass Sod Farms Ltd. held the Annual Family Picnic at the… Continue reading

Woman has finger ripped off at West Edmonton Mall waterslide

SASKATOON — A Saskatchewan woman says she lost a finger after her… Continue reading

Uncertainty looms over Canada’s cannabis tourism, but ambitions are high

TORONTO — Longtime marijuana advocate Neev Tapiero is ready for the cannabis-driven… Continue reading

Feds mulling safeguards to prevent ‘surge’ of cheap steel imports into Canada

OTTAWA — The federal government extended an olive branch of sorts to… Continue reading

Ontario govt caps off summer session by passing bill to cut Toronto council size

TORONTO — The Ontario government passed a controversial bill to slash the… Continue reading

Updated:Italian bridge collapse sends cars plunging, killing 26

MILAN — A 51-year-old highway bridge in the Italian port city of… Continue reading

Saudi Arabia spat affecting Canadians embarking on hajj, community members say

TORONTO — Members of Canada’s Muslim community say recent tensions between Ottawa… Continue reading

Tug carrying up to 22,000 litres of fuel capsizes in Fraser River off Vancouver

VANCOUVER — The smell of diesel filled the air as crews worked… Continue reading

Nebraska executes first inmate using fentanyl

LINCOLN, Neb. — Nebraska carried out its first execution in more than… Continue reading

Most Read


Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month