Re: Editorial in the Jan. 6, 2012, edition of the Red Deer Advocate: Questions on the numbers
In the Jan. 6 edition of the Red Deer Advocate questions were asked about the city’s operating budget, and I want to provide a response to those questions.
When council adopted the 2012-2014 Strategic Direction on Aug. 8, 2011, administration was directed to develop implementation plans which have taken the form of charters. This information was also included in a media release at the time. These draft charters were developed to ensure a “reasonable interpretation” of council’s Strategic Direction, including the six themes.
Since August, the charters were mentioned in open council meetings on numerous occasions by both administration and council. The draft charters are coming to council at this time to request the funds needed before we can start implementing council’s Strategic Direction for the community.
Once all of the project charters are approved in principle by council at the Governance and Policy Committee, they will be brought to an open council meeting for information. Depending on the charter, individual initiatives of each charter will be brought forward to council for approval to ensure council’s continued involvement in implementing the Strategic Direction for the community.
Proposed 4.5 per cent tax increase
The operating budget contains both tax and utility supported funds — tax supported being revenue taken in by the city through property taxes and utility funds being revenue generated by the utilities.
Here is where the recommended 4.55 per cent increase comes from:
l $600,000 increase from budget adjustments between 2011 and 2012
l $1.8 million in carry forwards from 2011
l $2.1 million transferred from the operating budget to fund future capital projects.
When the 2012 operating budget binder was printed, carry forwards were not finalized, and the additional $1.8 million in carry forward funds are recommended for council approval in the 2012 budget. These carry forward funds are for initiatives started in 2011 and not completed in 2011. This brings the proposed total 2012 operating budget to approximately $271.6 million.
Of the total proposed budget, there is a transfer of $2.1 million from the operating budget to fund capital projects in future budgets. This transfer is recommended so the city can better budget for capital projects in the coming years and is a component of the financial sustainability model being developed by the city.
It is acknowledged there are high increases in water and wastewater rates. These rate increases are needed because of the major expansions at both the water and wastewater treatment plants to comply with federal and provincial guidelines and regulations as well as growth of the city and the region. Actual operating costs have remained fairly constant at the water and wastewater plants. Increases in utility rates are necessary to fund the major capital expansions.
City of Red Deer