Council pegs tax hike at 2.9%

Red Deer property owners will pay their lowest tax increase in 15 years.

Red Deer property owners will pay their lowest tax increase in 15 years.

Council approved a $349.2-million operating budget on Thursday with a 2.9 per cent property tax hike for 2016.

On a $325,000 home, the owner would pay $1,985.97 on its annual bill, up $55.97 from the 2015 bill.

It took council six-and-a-half days to land on the number after the proposed tax rate fluctuated between 3.78 and 2.9 per cent.

Mayor Tara Veer said this was one of the most rigorous debates in her time on council. The last time the city delivered a capital and operating budget that resulted in a tax increase under three per cent was in 2001.

Veer said this budget fulfills council’s responsibility to move the community forward and to be responsive to the current economic times.

She said council is very mindful of the current economic reality.

“Generally economists will agree a government’s mandate in a recession is to bring stability,” said Veer. “This budget is a methodical, sustainable effort to bring stability and to continue to stabilize our local economy.”

The reduction in provincial grants or downloading was front and centre every day in the debate.

A total of $455,000 or 0.37 per cent of the 2.9 per cent tax increase was a result of reduced provincial grants for housing.

“Let’s invoice the province,” became one of the most common-used phrases.

“Look, we recognize the provincial government is obviously in a financially challenging circumstance much like the private sector and not-for-private sector and other orders of government,” said Veer. “I think you heard very strongly council … took exception to the fact that they are endeavoring to balance their books on the backs of municipalities.”

Veer said the city would have been in a much lower tax rate position had the provincial government not reduced the grants. She said there are areas throughout the budget that have been abdicated from the province on the policing and social housing front.

Heading into Thursday’s deliberations, the proposed tax rate was sitting at 3.11 per cent but administration sharpened its pencils and found nearly $250,000 in savings in fuel charges for fleet and corporate insurance overnight.

Coun. Ken Johnston was poised to bring a motion to use reserves, if necessary, to drop the tax rate even lower. He was successful in his motion to ask the city to develop a policy with guidelines for dipping into operating reserves. In absence of a policy, there would be subjective reasoning for withdrawing funds, said Johnston.

Johnston said now, more than ever, these guidelines are needed in light of the economy, carbon tax and provincial and federal budgets.

He hopes the guidelines will be in place before the 2017 budgets.

City manager Craig Curtis called it a relatively sustainable budget given the times with investments that are needed.

“I have no doubt next year will be tougher,” said Curtis. “But council and administration will work together to find a good spot.”

Next year administration will begin working with a 2.54 per cent tax hike as a result of the 2016 capital and operating budgets. There is a 0.11 per cent tax carry over into 2018.

Chief financial officer Dean Krejci said the tax increase includes the one per cent allocation to the capital savings plan, a 1.53 operational increase and a 0.37 per cent direct download from the province.

Krecji said he was happy the city was able to avoid any consideration of using the reserves to reduce the tax rate.

“Council has gone down that avenue in previous years and it takes a long time to wean them off of it afterwards,” said Krecji. “We generally consider it not to be sustainable.”

The actual tax rate will be set later this spring and combined with the education tax rate and Piper Creek Foundation requisition.

Budget highlights:

* The Red Deer Public Library was zero for three for requests in the 2016 operating budget.

The library requested $108,019 to increase the hours at the Timberlands branch; add a library information technology specialist ($89,635) and fund a publicity campaign ($50,000).

While the Timberlands branch wants to expand its collection, it is essentially a children’s library based inside an elementary school.

The library said the funding would allow them to expand programming to reach the under-served groups such as seniors, teenagers and new Canadians at that branch.

Council reasoned the timing is not right because the demand is not there at Timberlands but suggested revisiting the request once it is there. Others encouraged the library to seek partnerships in the community. Coun. Paul Harris said this is the wrong way to look at it and the audience will never build because the patrons will simply go to other branches.

* Completion dates on the new fire stations (Station 3 and 4) will be delayed a few months because the designs were not completed as expected. The city saved $133, 500 in projected costs in this budget. Both firestations will be finished in 2017.

* City Hall security will be reduced on evenings, weekends and holidays for a savings of $25,000. There will be security personnel in place when the building is in use. An overall security plan is currently underway for the entire city operations. The building does have an existing system in place.

• Council approved $108,000 for a bylaw enforcement alignment and record management software system. It will essentially amalgamate the enforcement efforts of bylaw officers, parks enforcement officers and transit protective services officers in efforts to streamline the system and improve customer service.

• Council gave the green light on a $150,000 future growth amenity study. The city must notify the County of Red Deer its options by June 2017. Annexation would not occur until 2020.

• The city will look into consolidating emergency service and police dispatch after a motion by Coun. Buck Buchanan. A 2008 study that identified barriers to the move. Buchanan is hopeful the change could eliminate inefficiencies in the systems. The report is expected to be completed by June 30.

* Councillors will now have $27,477, up $16,000, to spend on professional development and other expenses.

* A report to bring the wheelchair access on the west side of City Hall up to current building codes is expected in six weeks. It would cost $180,000 to replace the ramp.

Other items:

* River Bend Golf and Recreation – $30,000 for the revenue it will lose when Discovery Canyon closes for extensive renovations for the 2016 season this spring.

* The city will develop a plan to get a handle on the piping infrastructure with a $150,000 allocation to develop a Stormwater Drainage Master Plan.

* Public Works will hire 4.99 full-time equivalent staff (FTE) to work on roads maintenance and growth.

*New neighbourhood parks landscaping including one staff (1.34 FTE) – $229,087.

*Garden Heights, Clearview Ridge and Timberlands will soon have Sunday and holiday conventional and Action bus service – $85,568.

*A new mass notification system for emergencies – $70,000.

*Red Deer Lights the Night – $30,000.

*Expanded Action Bus service to include Sundays and holidays (includes 1.0 FTE) – $110,200.

*Policing – six RCMP officers and six municipal employees.

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