Municipal operational budgets ‘completely out of whack’: report

Canadian Federation of Independent Business is calling on Alberta municipalities to rein in operational budgets by cutting staff costs and limiting spending increases to population growth.

Canadian Federation of Independent Business is calling on Alberta municipalities to rein in operational budgets by cutting staff costs and limiting spending increases to population growth.

According to the CFIB’s new Alberta Municipal Spending Watch report, operational budgets have risen at an unsustainable rate between 2000 and 2012 with spending outpacing population growth for the vast majority of municipalities.

“We understand that with growing populations there does need to be a large capital investment in infrastructure and (the report) is strictly just looking at costs that can be controlled,” said Amber Ruddy, CFIB senior policy analyst, on Thursday who called most municipal operational budgets “completely out of whack.”

“What’s really driving up these costs are wages, salaries and benefits.”

These costs account for 50 to 60 per cent of municipal expenses, she said.

“One of the things that the councils often say is they don’t have any control over collective bargaining. They do have control over the number of people they hire. It’s a little bit of both that is contributing to this very escalating cost.”

She said there’s a huge gap between public sector and private sector compensation.

Contracting work out and redistributing work loads instead of replacing staff who retire are a few ways to reduce costs.

“(Municipalities) are not profit driven, but if they’re running up huge debts and deficits, that’s obviously problematic for future taxpayers to cover that burden,” Ruddy said.

Helen Rice, president of the Alberta Urban Municipalities Association, was baffled by the report and questioned its accuracy.

“We’re in an economy where municipalities are trying to match that rapid growth and all the pressure that it brings. Plus if you look at wages, we’re competing against the energy sector — it’s Alberta,” Rice said.

“The Alberta government predicts Alberta is going to expand at the rate of a small city annually — a city the size of Red Deer annually.”

People don’t bring the services they need when they arrive in the province, she said.

“You have to be ready for it. You’re working ahead of the curve. I’m surprised that they didn’t recognize that.”

At the same time, municipalities are always looking for cost efficiencies, combining departments, looking at new technology, Rice said.

Red Deer is among the 169 out of 181 Alberta municipalities with populations over 1,000 that CFIB compared whose inflation adjusted operating expenses exceeded population growth between 2000 and 2012.

Only 12 municipalities, some of them on the smaller side, kept operational spending at or below population growth.

More than 50 per cent of municipalities outperformed Red Deer that was ranked 102nd due to a 40 per cent population increase over the 12 years and 116 per cent increase in operational spending.

“When you look at Red Deer, they’re actually spending almost three times faster than population growth for the city,” Ruddy said.

“In the past couple of years most cities have leveled off and they’ve been trying to control the spending. But when we look at the chart for Red Deer, it’s still escalating.”

Medicine Hat was ranked the best with a 14 per cent decrease in operational spending despite a population increase of 22 per cent.

Red Deer Mayor Tara Veer said city council and staff continually work towards efficiencies throughout operations.

“In everything that we do in our culture of continuous improvement and finding operational efficiencies where we can, we ultimately deliver service and need to do that in a manner that is responsible to our citizens and that’s affordable to make sure Red Deer is sustainable so that people can afford to live here and do business here,” Veer said.

“When it comes to staff wages, we have had very fair but competitive negotiations in weighing them against inflation. They have generally ranged between two and three per cent in recent years.”

Municipalities are also unique in services they provide, like ambulance and dispatch, that while funded by the province show up as operational expenses in municipal budgets. Red Deer also incurs costs through regional partnerships, like transit, that are recouped over time, she said.

CFIB claimed provincial and federal transfers have jumped 369 per cent between 2000 and 2012 while municipalities say government downloading has resulted in higher costs.

Veer said transfers don’t necessarily apply to municipalities equally. Grants are often conditional or one-time grants.

Just Posted

Severe thunderstorm watch for Central Alberta

Thunderstorm watch covers large area including Sylvan Lake to Stettler

Bird on a wire causes electrical problems in Red Deer

City workers put protective covers on line

WATCH: Kayakers go over Ram Falls south of Nordegg

Two take 30-metre plunge, post video of thrill ride

Count shows slight decrease in Red Deer’s homeless

In two years, the number of homeless in Red Deer has decreased… Continue reading

Nightly closures on Taylor Drive next week

Taylor Drive to be closed Monday to Friday night for bridge demolition work

WATCH: Cirque ZUMA ZUMA puts on a show at Westerner Days

ZUMA ZUMA performs three times a day during Westerner Days

Divers hunt for 4 after Missouri duck boat sinks, killing 13

BRANSON, Mo. — Divers are searching Friday for four people still missing… Continue reading

WATCH: Red Deer’s noxious weeds are a goat’s dietary delight

Piper Creek Community Garden gets chemical-free weed control

‘Amazing Race Canada’ competitors face B.C. challenge

They drove Corvettes, mastered falconry basics, and ate blueberry pie in the Cowichan Valley

From hot to not? The Baloney Meter weighs in on Scheer’s economy claims

OTTAWA — “Justin Trudeau inherited a booming economy, but he’s squandering it.… Continue reading

Scathing suicide inquiry finds gaps, shortcomings at Royal Military College

OTTAWA — Members of a board of inquiry into three suicides at… Continue reading

Premiers strike deal to allow increased flow of beer, alcohol across borders

ST. ANDREWS, N.B. — Canada’s premiers are set to wrap up their… Continue reading

Trump ready to hit all Chinese imports with tariffs

President Donald Trump has indicated that he’s willing to hit every product… Continue reading

Canada’s annual inflation rises 2.5% thanks to boost from higher energy prices

OTTAWA — The country’s annual inflation rate rose 2.5 per cent in… Continue reading

Most Read

Five-day delivery plus unlimited digital access for $185 for 260 issues (must live in delivery area to qualify) Unlimited Digital Access 99 cents for the first four weeks and then only $15 per month Five-day delivery plus unlimited digital access for $15 a month