(Advocate file photo).

Red Deer city council makes efforts to brings tax increase below one per cent

An interim budget is expectecd to be passed on Monday

Red Deer city council is making an all-out effort to bring the tax increase for 2020 below one per cent.

Mayor Tara Veer said most households would appreciate the lowest tax increase possible during this sixth recessionary year. With many people still out of work or facing uncertain circumstances, she added, “Dealing with the financial reality is paramount…

“Our goal is to get (the tax increase) as low as possible without compromising services,” said Veer.

While the recommended budget of $385.7 million would have required a tax increase of 2.5 per cent, city councillors spent this week whittling down various expenses, such as cutting department audits and renewals of master plans.

On Friday, they looked at additional cost-cutting measures that were suggested by city manager Allan Seabrooke and Chief Financial Officer Dean Krejci to lower the 2020 tax increase further.

Since council did not want to consider cutting programs and services, they instead looked at NOT transferring one per cent of tax dollars towards future capital projects.

Krejci told council stopping this annual practise wouldn’t affect the 2020 capital budget, which is already approved. The lack of a one per cent capital contribution would not have a noticeable impact on the city’s capital plans until 2024.

Considering community demand exists for a new aquatic centre and concert hall within the next decade or two, council opted for more conservative measure: They decided to transfer only half a per cent for this year.

Council also decided not to transfer $500,000 from the operating budget into an operating reserve fund for emergency or one-time expenses.

Mayor Tara Veer said the idea behind this proposed transfer was to supplement the reserve fund during a lean period when there were no budget surpluses to add to the fund that’s drawn from to pay for various unexpected expenses. “But we decided this was not the year to do that,” she added.

By taking these two measures — as well as administration upgrading the city revenue forecast for 2020, based on greater than expected growth in recent months — council brought the tax increase down to 1.26 per cent.

Councillors then asked Seabrooke whether he could identify other options to reduce costs further, by about $400,000. This would bring the tax increase down to .97 per cent.

Given the size of the city’s budget, Seabrooke was confident that this much more more cost-cutting could be achieved. He is to report back to city council with further cuts recommendations by February.

In the meantime, city council is expected to ratify an interim budget on Monday.


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