2016-2018 Proposed Operating Budget Adjustment

At the November 29/30 City Council meeting, we will be reviewing the proposed supplemental Operating Budget adjustments. You can read the full reports here (item 6.1) but I want to provide an overview of the proposal and my thoughts on it. The City also has a fantastic interactive website that explains all facets of the 2016-2018 Budget here. I highly recommend this site as it explains both the Capital and Operating budget and how it relates to residents.  As you are probably aware, the 2016-2018 Operating Budget is the first time Edmonton has implemented a multi-year budgeting process that allows Council to plan for 3 year budget cycles. Like most of the province, the City has the tough job of adjusting the budget to account for changing economic conditions. On December 8th, we will hold a Public Hearing for residents to voice their opinions with regards to this proposal. I encourage anyone who wishes to express their thoughts and concerns to register to speak or get in touch with me via email/phone.  The Municipal residential property tax for 2017 is 3.1%, a savings of .3% from last year's approved 2017 budget, the proposed tax increase would account for:

• 1% to maintain and add new services - down 0.5% from last year’s approved operating budget.

• 1.5% increase to the Neighbourhood Renewal program

• 0.6% increase for the Valley Line LRT construction

For the typical household (single family dwelling with an assessed value of $408,000) this means about $6.61 per day/per household for municipal property taxes. That’s an increase of about $72 in 2017 and $118 in 2018.  The reason for the 0.5% decrease to the proposed 2017 Programs and Services budget is due to the City’s management of two major sources of revenue: the EPCOR dividend and franchise fees which work out to about $9 million. By using this money to decrease the base budget, we are able to provide all the same services and programs to Edmontonians without increasing the property tax for this.  The City also found savings by reducing fuel costs, utility costs and contract negotiations which adds up to about $6.2 million dollars, along with an additional savings of $4.5 million from ending management cost of living allowance program. This is also the result of Council’s 2% savings initiative which identifies efficiencies within our organization. 2017 alone has seen nearly $34.1 million in savings from this initiative which has been reallocated as follows:

• $10.0 million towards the three year operating budget

• $5.0 million available for Council to reallocate the money to areas of greater priority or reduce the tax rate

• $19.1 million to be reinvested into funding programs and services for Edmontonians.  

The Neighbourhood Renewal program is an investment in our communities aging infrastructure. This not only allows for upgrades to essential services within communities, but saves us money in the long run by maintaining this investment. You can learn more about the Neighbourhood Renewal Program and my thoughts on it here.

Council will have to debate the unfunded service packages (you can read all of these starting on page 25 here). These are items that have been brought to council in the past year that require full or partial funding. Examples of this are the Edmonton Ski club, Community Development Corporation, etc.  Council will have to consider these during deliberations and its impact on the overall budget. Once you have read through the list of those service packages, I would like to hear your thoughts on these items. Which are important to you? What areas would you like to see savings?  Lastly, I want to reference the savings our City has seen since looking for efficiencies over the last year.  In September of this year, I made the following motion to help find savings that can be applied to this year’s budget deliberations: That Administration provide a report to Council as part of the 2017 Supplementary Operating Budget Process on the following:

1. A breakdown of the 2015, March 2016 and June 2016 permanent position vacancy rate for the following areas:

   1. Utilities

   2. Development Services (formerly Current Planning)

   3. Civic Tax Levy operation

2. An analysis of current vacancies including their status.

3. A review of the feasibility of deleting some of the vacancies and/or increasing the personal discount rate in order to identify cost savings.

From this report, we learned that there are numerous staff vacancies that we could eliminate altogether which would provide us with a considerable amount of savings.  You can read my thoughts and motion here but I am happy to report that we have eliminated 46.0 vacant full time equivalent positions with a savings of $5.2 million dollars. The full report and it’s findings can be found here.

I understand that an increase in taxes is never favourable and for some it can mean added stress and financial hardship. The City has a variety of payment options available for residents  or the Seniors Tax Deferral Program from the Government of Alberta. Beyond those programs above, I would like to see Council use some of those additional savings found to help decrease the proposed tax increase. Please contact me to share your thoughts on the 2017 budget deliberations.