A three-year financial plan that could pay down the city debt or build much needed amenities in Red Deer was approved on Tuesday.
Council voted to set aside $1.15 million, which equals one per cent of the tax revenue base, into operating budgets starting this year for the next three years.
The funding will be allocated between the debt repayment and the capital payment reserves.
The decision did not come easy as council grappled with the “doom and gloom” provincial outlook and the desire to check off items on Red Deer’s 10-year capital plan.
Coun. Ken Johnston unsuccessfully tried to limit the city’s commitment to one-year with room to revisit the amount every year.
He cited concerns of committing to multi-year funding in today’s “fiscal reality and uncertainty.”
“It’s the times we find ourselves in,” said Johnston. “Who would have imagined in the last three months that we would have arrived at a place where the recession word is being bantered around in Alberta?”
Johnston said a one-year formula struck that balance of being responsive to the community and being fiscally responsible in light of the current climate.
But most councillors reasoned the issue can be debated along with the prior decisions and commitments during the annual budget deliberations.
Coun. Paul Harris spoke strongly against Johnston’s motion and seconded Coun. Buck Buchanan’s motion to follow administration’s recommended three-year model.
Harris said the city spent the last year working on the strategic plan and a draft budget and draft plan for amenities.
“We need something that is sustainable and built over long term,” said Harris. “We can adjust it as we go along. If we don’t have something that backs up the plan we currently have then we would really thumbing our noses at the work we have done.”
Coun. Tanya Handley unsuccessfully tried to reduce the amount to $577,000 (or .05 per cent of the base) in 2015 only but she did not have any support from council.
Handley said the plan was not fiscally responsible and it was “asking for too much, too fast.”
She wasn’t convinced the item will be debated enough after it is ingrained into the base budget.
“I think it would be better for us to pull back and cut back what we spend and save that money versus just asking for more,” said Handley.
Harris said council will scrutinize the budget very carefully if there see any dramatic changes to the economy next January.
Coun. Lynne Mulder, however, did not think there was enough money put aside given the city’s amenity deficit. Mulder said this shows council’s commitment to the future and to the citizens who have said “(the city) must save.”
Dean Krejci, chief finanical officer, told council that the city could have an estimated $80.8 million (with interest) in savings if the city stayed with the one per cent saving plan over the next 10 years.
Last week council began the $329-million operating budget deliberations with an anticipated 4.31 per cent increase on the municipal portion of the tax bill.
Today council will head into what is expected to be the final day of budget debate with a projected 4.03 per cent increase following six days of number crunching.
If nothing changes, an owner of a home assessed at $325,000 will pay $1,935.11 in 2015, up $74.95 from 2014.
Day 6 highlights:
l Council approved $185,000 three-year funding for the Red Deer Airport. The airport had requested an additional $236,000 in funding. Council deferred responding to the late request in order to develop a joint agreement with the County of Red Deer.
l Central Alberta Crime Prevention Centre will receive a $143,000 in operating funding.
l Fort Normandeau will extend its operating season and boost its staffing levels thanks to a $23,022 boost in funding.
crhyno@www.reddeeradvocate.com