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Opinion: Red Deer city budget leaves big questions


More than a month later than normal, the City has finally released its proposed budget adjustments.

The numbers give Council - and the public - a much clearer picture of the City’s finances.

They’re not great.

They’re not even good.

In fact, the picture the proposals paint is pretty bleak.

The City is facing a $16.1 million shortfall, and is rapidly approaching its debt limit.

The reserves are also nearly gone as a result of using those funds to cover the shortfall in previous years instead of making a major course correction.

The tax increase to make up the shortfall is in the double digits - 10.65 per cent.

That’s a huge increase, but it’s made even worse by the fact that there’s no extravagant infrastructure project or big spending item on the books - it’s simply to maintain the operational status quo.

Let that sink in. For the City to continue offering the same level of services, they will need to raise taxes by 10.65 per cent.

Compare that with Statistics Canada’s November inflation rate - and Alberta’s projected 2024 inflation rate - of 2.5 per cent.

The City’s expenses are outpacing inflation and, more importantly, economic growth.

Council will hopefully do its best to soften the blow when the budget adjustments are actually debated later this month, but the built-in deficits that have crept into the budgeting process are going to haunt us.

Nearly every other municipality had their budget debates take place in November, but Red Deer’s are taking place on January 23-26.

Council will be left with the unenviable decision to either raise taxes, cut services, drain reserves or sell off assets.

If only there had been a way to prevent this.

Where are the learnings from the last few years? Where is the commitment to incremental improvement? A system of asking the front line staff ‘what is the next simple thing we can do to make this better’ to find that smart, bottom-up change. Taking that feedback to innovate and automate the way the City does business before we end up staring down big tax increases and no economic growth.

Red Deer’s population has largely plateaued, and consequently, so have housing starts.

Contrast that with other cities in Alberta - Calgary, Edmonton, and Lethbridge are all seeing their populations grow and new homes being built.

Alberta as a whole had such high rates of interprovincial migration that they ended their “Alberta Is Calling” program, originally designed to attract people to the province.

Worse still, Red Deer has the highest unemployment rate for a major region in Alberta.

Why is Red Deer stagnant?

The status quo approach to business hasn’t worked. The City interacting with business the same way it always has is producing diminishing returns.

We need a Council Committee on Red Tape Reduction, along with a dedicated commitment to reexamine the building code and a promise to industry to have a guaranteed turnaround time on issuing permits.

The downward trend in economic growth should have already set a five-alarm fire for the City. After all, they had to know how dire the financial situation already was.

Alberta is growing, and comparable cities across the province are all growing, but Red Deer’s graph is pointing in the wrong direction. The budget document even says that the city’s economic development resources are spread too thin and generally focused on land development and sales.

It also notes that economic leaders should all be in alignment, but the budget documents admit that the alignment isn’t there.

Getting our economic drivers aligned should be a top priority - getting all of Team Red Deer firing on all cylinders needs to happen immediately.

We can’t wait until some new report comes out in 2025.

We know what the problems are.

We’ve known for a long time.

This is an incredible place to live, yet somehow, the story is going untold.

Red Deer could be so much more.

Chad Krahn is a former candidate for Red Deer City Council.