Red Deer’s city manager did some detailed number-crunching and found the $400,000 in budget savings required to bring the 2020 municipal tax rate below one per cent.
Allan Seabroooke told council on Monday how it’s possible to achieve a 0.97 tax rate — and council unanimously accepted his recommendations.
Councillors heard city administration had over-estimated the amount of traffic fine revenue that the provincial government would claw back from municipalities in 2020.
A review of the provincial budget indicates the new formula that gives the government a bigger slice of the fine revenue pie won’t take effect until April 1, whereas city administrators had previously calculated this loss from Jan. 1.
Seabrooke said since the first quarter for fine revenues will remain the same as last year, it’s possible to reduce the estimated revenue reduction by 25 per cent, or about $205,525. This means that $616,485 will be lost to the province from municipal fine revenues instead of the previously calculated $821,980.
Seabrooke carefully reviewed all city staffing, benefits and salaries and through such factors as changing positions and temporary vacancies found a further $71,000.
He was also able to find some $123,500 in savings through some more detailed accounting – the city is eliminating part of a transfer to capital reserves because of depreciation.
Councillors credited Seabrooke for taking up the challenge set out by council and finding savings to allow the municipality to keep the tax increase low, in recognition of Red Deer’s stalled economy.
Coun. Ken Johnston mentioned Calgary’s seven per cent pending tax increase as a comparison, and he said it “bodes well” that Red Deer city council and administration have managed to reign in spending, exemplifying good stewardship for the city and local taxpayers.
Seabrooke said the city administrators “feel good” that they were able to find additional savings at council’s request.
But Coun. Lawrence Lee noted this is a one-time solution. He suggested it would likely not be able to repeated next year without service reductions, unless the economy improves, driving up city revenues.