Economy weighs on city council as budget deliberations set to begin

Red Deer city council is bracing for some tough budget talks in light of the looming provincial cuts.

Red Deer city council is bracing for some tough budget talks in light of the looming provincial cuts.

Starting today, council will begin reviewing the administration-recommended $329-million operating budget, which comes with a 4.3 per cent property tax increase for 2015.

The operating budget looks at the day-to-day costs of running a municipality and the funding to provide services.

If there are no changes to the budget, owners of a typical home assessed at $325,000 would pay $1,940.33 on the municipal portion of their property bill, up $80.17 from 2014.

As part of the number crunching, administration will recommend $40,000 in cost savings for initiatives such as reducing advertising and promotion, eliminating tax utility bill inserts and reducing budgeted overtime.

Mayor Tara Veer said the economy has changed substantially since the capital budget deliberations in November. She said council will have to be extremely mindful of the changing economy while deciding on the city’s spending plans for the next 12 months.

“All cues from the provincial government suggest there will be cuts from the provincial government,” she said. “Those have a direct impact on us as a municipality and our citizens as we’re heading into imminent recession.”

Council may have to revisit the municipal budgets after the provincial budget is tabled this spring.

City manager Craig Curtis said he hopes any provincial funding changes announced in April will be effective in 2016. He said in the past, like during the Klein years, there were sudden changes in the municipal contribution from the province.

“We believe this province is looking at this very, very carefully,” he said. “We have talked to our MLAs. We think they recognize our concerns and our hopes that if any changes are made, they give us sufficient opportunity to adjust in an appropriate way.”

Curtis called the city’s proposed budget one of “maintaining and enhancing core services.”

Some key spending is projected in areas such as policing, roads, transit and Emergency Services.

Curtis mentioned findings from the recent Ipsos Reid Survey that showed 60 per cent of the respondents would be OK with a tax increase to either enhance or maintain services. He said the budget was based on council direction and newly implemented budget guidelines, including a more robust public consultation.

The city faces many challenges this year, including lower revenue from investments, lost value of construction reserves, fluctuating revenue from land sales and eliminated or reduced grant funding. Some 2014 projects, including boosts to snow and ice control and policing, were split over two years.

The 2015 capital budget ($173.3 million) was adopted by council in November. The direct impact of the capital budget on the operating budget is $1.15 million or the equivalent of a one per cent tax increase.

Taxpayers won’t know the final percentage increase until the education portion of the taxes is set in the spring by the provincial government.

crhyno@bprda.wpengine.com

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