The City of Red Deer got down to the muddy business of budget conversations this week, with the real work set for November to determine how to navigate 2025 budget shortfalls.
Councillors held a marathon session on Wednesday, going through line-by-line trying to find items to trim from the budget in order to find massive savings that they're expected to need in 2025.
It seems like just yesterday the city decided on a 6.15 per cent municipal property tax increase (it was actually in January, time flies when you're having fun) for 2024, which helped generate $9.3 million in tax revenue.
At the time, Mayor Ken Johnston, a two-time councillor before taking over as mayor, said, “this is, without question, one of the more challenging budgets I have been part of in my time on Council."
City Manager Tara Lodewyk said at the time, "this budget is not just about 2024, it is about planning for the years to come.”
Here we are, embarking on the 2025 budget, and it is sure to be a dousy.
There's no doubt that the city didn't just grow a money tree between January and now and we can be sure, concerns then about the lack of provincial funding funnelling down to municipalities are even more real.
(one conversation that the city had earlier this week not related to the budget for 2025 was the added cost the province will download to municipalities with the new Municipalities Act, which will require the city to hand-count ballots in the 2027 provincial election)
Service cuts were the major part of the budget talks this week and council went through it all to hunt for savings.
Administration did plenty of leg work to find 37 different service reductions isolated from 275 service areas.
One of the bigger items they discussed was photo radar, which is a highly unpopular practice – even the provincial government is doing work to phase it out. So that's an easy saving.
In a report earlier this year, the city said that the province claimed most of the photo radar proceeds (the provincial share has risen to nearly 42 per cent from a previous 27 per cent), the city lost $315,099 on the program in 2023. That is even more than the $253,869 that was lost in 2021.
The goal of that program is to prevent accidents and increase motorist and pedestrian safety. In an anecdotal sense, the program works effectively, with many drivers slowly down at the sight of the photo radar vehicles.
The city believes that goal can be achieved by replacing the mobile photo radar units with peace officers conducting traffic enforcement, that's an easy call.
One item they also discussed was potentially saving $500,000 in unused funds allocated to staff training. That, to me, is an easy item that, when times are tight, can easily be allocated elsewhere.
Another potential saver the city talked about was reducing maintenance of outdoor amenities by 15 per cent, in order to save about $727,000.
When talking about service reductions, it's difficult for the average citizen to put that reduction into perspective. It's hard to understand the real impact of that there quarter of a million dollars will have.
But that's always the game with service reductions. How much can you actually reduce before people begin to notice. Snow clearing is always a contentious issue, with it never being enough and always being hammered on about costing too much. The city will once again have a long conversation this winter about how to best maximize it's snow clearing budget and keep citizens satisfied. The city piloted a new program last winter, introducing 24/7 residential snow removal.
In June, the city reported a cost overrun of $1.28 million (of that amount, $986,000 will need to be found in the 2024 budget). While the base budget for snow and ice control program was $5.88 million, a total of about $7.16 million was spent during the pilot program last winter (November to April).
That overrun, which happens in a province that has winters like ours, is just another little thing that adds up to a lot when you are looking for $20 million worth of cost savings.
The money spent on River Bend golf course renovations have come into focus lately, with 5.5 million set to update its irrigation systems. From all the explanations I've read, it seems like the course didn't have a choice but to upgrade these systems. It's just really unfortunate they come at a time when the city may have to increase taxes to help pay for cost overruns in other areas.
I don't envy this council, which has the unenviable task of finding huge savings in the 2025 budget, with the likelihood of more tax increases coming. What's tough to reckon with, from their perspective, is the loss of municipal funding from the province.
According to Alberta Municipalities, provincial funding for local infrastructure alone has dropped from about $420 per Albertan in 2011 to about $150 per Albertan in 2023 – a decrese of about $270 per Albertan.
The organizations says provincial government’s spending on local infrastructure has dropped from 3.7 per cent of total spending a decade ago to just 1 per cent.
Combine that with inflationary increases, when the city of Red Deer has to look at savings on concrete and sidewalk repairs, that's in part due to a reduction in provincial infrastructure funding.
It's a long road ahead to help smooth out the 2025 budget, and I send my best wishes to this council, who will have another tough test ahead of them in November.
Byron Hackett is the Managing Editor of the Red Deer Advocate and Regional Editor for Black Press Media.
