Red Deer Mayor Tara Veer is pleased the city council and administration are whittling the 2020 tax increase to lower than one percent.
But she feels a zero municipal tax increase — as sought by the chamber and taxpayers’ association — could have been achieved for 2020 if not for a provincial clawback of more local traffic fine revenues.
“Citizens and businesses are hurting financially so we tried to do as much as we could without affecting services,” said Veer.
Council and administration will get the municipal tax increase down to 0.97 per cent once city manager Allan Seabrooke manages to remove another $400,000 from the near $400-million budget — as he’s confident he can by the end of February.
But Veer noted the city’s revenue stream for 2020 suffered from the province’s decision to seize a larger share of municipal traffic fine revenues — creating a 0.75 per cent dent in the budget.
If that amount hadn’t been removed from the city’s operating capital, she noted the projected tax increase would be a mere .22 per cent, or very nearly a zero increase.
As it is, a 0.97 per cent municipal tax increase will mean the average household in Red Deer (with a property assessment of $325,000) will pay $22.46 more this year. Seabrooke said this amounts to $1.87 a month (not including the addition of school taxes).
Coun. Ken Johnston boiled it down to an extra six cents a day, adding its a small price increase to pay for great recreational amenities, policing service, economic leadership, and other benefits.
City Council approved an interim $389 million operating budget Monday, reducing the proposed 2.49 per cent tax increase to 1.26 per cent with direction to identify further savings to reduce to 0.97 per cent.
Councillors praised the can-do attitude of Seabrooke and administration for identifying further cuts in recognition of the continuing economic recession.
The city manager, meanwhile, credited council for adapting to a more high-level approach on the operating budget by overseeing the process instead of undertaking a line-by-line review of budget items — as was done in the past.
Council’s approved savings included eliminating a$500,000 transfer from operating to the operating reserve tax supported fund, as well as reducing the proposed 2020 capital contribution from one per cent to 0.5 per cent at a value of $682,000.
City staffing levels are frozen in 2020, except for the addition of three previously approved police officers “to address community safety challenges,” said Veer.
Seabrooke called this a hold-the-line budget that maintains service levels, while reducing costs as much as possible.
After he brings his additional proposed cuts to council at the end of February, the municipal tax rate will then be combined with the provincial education tax requisition and the requisition for the Piper Creek Foundation to determine how much overall property tax residents will pay.