Red Deer’s city manager and chief financial officer were in the hotseat as they fielded questions about the proposed $329-million operating budget on Tuesday.
Council asked about the city’s financial health, the impact of provincial budget cuts and the high utility costs in the city.
In his opening address City manager Craig Curtis said the operating budget “fairly conservative” but allows for some enhancement from council. He said the theme is “maintaining and enhancing core services.”
Curtis said, “make no mistake, the city is in excellent financial shape” with healthy reserves.
As of the end of the 2013, the city had $222 million in reserves compared to $208 million in debt.
But Curtis was quick to point out that the city may be forced to revisit the capital budget and 10-year capital plan once the provincial budget is tabled.
Simply put, Curtis said, cuts to provincial grants may mean cuts to city services, higher user fees and higher taxes to make up the difference. He said it could be a combination of the three.
The city has budgeted $37 million for capital and $11.7 million on the operating side for 2015.
Council will begin debating the administration-recommended budget as early as Thursday. A total of $1.17 million in funding adjustment requirements are on the table. The budget will also include items already in the books for multi-year projects such as the new snow and ice control policy and the policing contract approved last year.
Dean Krejci, chief financial officer, said the proposed budget comes with a projected 4.31 per cent property tax increase to the municipal portion. The owner of a home assessed at $325,000 would pay $1,940.33, up $80.17 from 2014. The final rate will be determined after the province sets the education portion for the property tax bill.
Krejci painted a picture of where Red Deer sits on municipality property taxes and utility rates compared to other municipalities. He said Red Deer is the middle of the road for taxes but on the high end for utility costs.
Council heard that Red Deer homeowners pay more in monthly utilities than cities such as Calgary, Lethbridge, Regina and Saskatoon. The owner of an average two-storey house paid $202 monthly for a utility bill in Red Deer in 2013. Calgary homeowners paid on average $195 while Edmonton, the highest compared city paid $213.84 per month on average.
Coun. Dianne Wyntjes questioned why Red Deer homeowners were paying more compared to other cities.
Krejci said some of the city’s current access fee levels and dividend levels are higher but they have changed the utility policy in order to play catch up.
He said part of it is because there are surcharge embedded into some of the utility rates that will help pay for future utility capital projects.
Krejci said this will build up the reserves to fund the future capital costs as opposed to using debt.
Curtis said debt was taken on for the expansion of the two water and wastewater plants and for the utility portion of the new Civic Yards.
He said no doubt other municipalities will see their rates rise once they begin expanding their plants and infrastructure.
Today’s schedule (1 p.m. start):
Office of City Manager