City council chipped away at the 2017 proposed property tax increase and reduced it to 2.28 per cent from 2.45 on Wednesday.
Council decided to use $210,000 from operational savings to address shortfalls in permits and subdivision revenue as they started combing through the $357-million draft operating budget.
Mayor Tara Veer said extremely slow growth for the private sector is having significant effects on revenue in building and development. This was a way to resolve that challenge and minimize the tax rate.
“What it does is use dollars that the community has already invested instead of overtaxing them in this budget year and it just flags for council to revisit the issue next year,” Veer said following the four-hour budget meeting.
She said the decision shows confidence that the economy will recover.
“We don’t know when it will recover, but we know that it will recover.”
To assist residents facing their own economic struggles, fees and charges for Recreation, Parks and Culture were frozen at city facilities. Council also approved $40,000 more for a fee assistance program to help more low-income citizens access those facilities.
“We recognize that not only are more people living in poverty, more people are living now on the threshold of economic challenge so we needed to be responsive to that and hold the line on costs on accessibility to facilities.”
She said the city has outstripped the public’s ability to pay those fees so there are fewer visits.
Council made a point of identifying a provincial funding shortfall of $130,000 for three Red Deer RCMP officers.
“Because there’s been no increase to that particular policing grant over the years, what’s happened over time is the buying power of that grant has become extremely regressive. Even though it was intended to essentially provide for three additional police members for a city of our size, over time it is in effect only funding two,” Veer said.
Each member costs the city $143,300.
She said one of the most critical sources of inequity between rural and urban municipalities is that the province continues to subsidize policing costs for rural municipalities while urban areas like Red Deer face higher policing costs that must be passed on to taxpayers.
Veer said the most expensive item in the operating budget is policing.
“The province is funding .01 per cent — .01 per cent — of our $33-million police budget. We need provincial support because .01 per cent is simply not sustainable for a municipality in this province,” said Coun. Ken Johnston.
Budget deliberations are scheduled to continue until Jan. 20.