Budget 2023-2026 Final Update - Part 2: How I Voted on the Budget
Every budget is a hard budget. Almost every request is for something important and as is the case in our household budgets, we don’t have an unlimited supply of money. Therefore, every budget cycle there are excellent programs or services that do not get funded.
I think what made this the hardest budget cycle I’ve been a part of is due to the fact that we are still feeling the financial impacts of the pandemic and those impacts, especially inflation, are having a direct impact on governments as well. Unlike the provincial and federal governments, municipalities in Alberta cannot run a deficit. So when inflation drives up the costs, the other orders of government will often just run a deficit or hope for a revenue increase from natural resources so they can avoid making tough decisions. But for the municipalities, those inflationary pressures mean that we either have to cut services or raise taxes.
As noted in Part 1, this four-year Operating Budget cycle was approved for the following average property tax increase:
2023: 4.96%
2024: 4.96%
2025: 4.95%
2026: 4.39%
For the first time since serving on council, I did not support the 2023-2026 Operating Budget. I did not make this decision lightly.
Like the previous Capital and Utility Budgets, I supported these 4-year budgets. As you would have read in the Budget Impacts on Ward Nakota Isga blog, there are a number of ward-specific and city-wide investments in the Capital Budget that will help improve the lives of Edmontonians. I will cover some of those specific items, including ones that might seem contentious, in the next section.
The Utility budget also has fairly small changes (ex: Waste Services increases of $0.43 in 2023 and $0.44 in 2024) so I was comfortable with the proposed changes.
There are a few key reasons why I did not support the Operating Budget: investment in core services, the future of the Edmonton region, and reductions in spending.
For the first point, I have never been afraid to support an increase in taxes. In fact, the first budget I ever approved after being elected to serve was a 5.2% increase. Based on the approved increases in municipalities across Alberta, there’s a strong case to be made that this was a reasonable change, especially based on the inflationary pressures that we are facing.
In previous budgets, it’s been very rare to have councillors put forward a lot of reduction motions. The reduction motions put forward by this council far outnumber all the council reduction motions combined over the previous 9 budgets. The thoughtfulness and the bravery that went into every reduction motion and the comments made by my council colleagues was unlike anything I’ve seen. Although I did not support the Operating Budget, I want to acknowledge the hard work of my colleagues.
As an elected representative, there are times where I may make an unpopular decision because based on all the information available, I believe that it will have positive long-term benefits. The difference with this budget cycle and the previous ones is that while I do believe there are some important investments in our Operating Budget that will make things better, those investments are not significant enough to justify the dollars being asked for.
Core Services
Some of the core services I campaigned on in the 2021 election were increasing snow removal and improving our transit system. This budget has increases in both of those areas but they are not at the level that is required to make a significant service improvement based on the size of our city.
I wrote a lot about snow removal over the last year. I won’t repeat the information in those previous blogs but I’ll summarize it by noting that our roadway and active pathway inventory has grown significantly over the years without a corresponding change to the budget. This means that for seniors or others with limited mobility, or for the 25% of people who do not drive in Edmonton, the city is not safe enough to navigate in the winter. For those that do drive, there still aren’t enough operators to run the equipment that we have which means we aren’t reaching our targets for plowing snow on city streets or addressing unsafe icy conditions.
This budget has a small increase for snow removal but it falls well short of the approximately $40 million required over the next 4 years. This budget only funds 20% of what is required to hit our current targets. The 20% increase for 2023 is actually a year over year decrease because earlier in 2022, City Council approved funding for the remainder of 2022 that was 50% of what was required to hit our current targets. I don’t believe that is enough based on the thorough analysis completed over the last year to determine the ideal funding level.
For transit, I’m glad to see that the On Demand transit will not only continue, but it will be enhanced by expanding service hours for seniors, adding destinations, and addressing peak hour gaps in locations like the Communities of Big Lake (ex: Hawks Ridge, Kinglet Gardens, Starling, and Trumpeter). There was a small addition of service hours for the standard ETS service of 500 hours per week.
The significant issue I have is that the regional transit service that Edmonton previously committed to last term, was not funded. By eliminating regional transit, we will make it harder for people to easily travel across this region and within the city which will hurt our ability to attract and retain investment in our region. This service was going to provide rapid service for every part of Edmonton.
It took many years but the Edmonton region has been working very collaboratively and that has allowed us to create more economic opportunities for everyone in the region. This collaboration has resulted in a growth management plan that sets higher density targets which will preserve 250 quarter sections of land and save $5 billion in infrastructure costs. This plan which was first approved in 2017 will be updated during this term and I’m worried about how our decision to leave the Commission will affect important work like this. The last thing I want to see is for this region to go back to the way it was a decade ago when we weren’t working together as that ultimately hurt Edmontonians and everyone living in the region.
When it comes to transit safety, I am pleased to see an increase in the number of Transit Peace Officers but it’s half of the recommended amount. The 49 Transit Peace Officers would have brought the total number of officers to that of the City of Calgary but it will now leave us around 25 short of that mark. Overall, I believe that our transit system is safe and this investment will make it better, but I’m not naive to the fact that some Edmontonians perceive that our transit system isn’t safe at all and there have been some real examples where bad things have happened. It is important that all Edmontonians feel safe taking transit any time and I would have preferred to fund the entire request over the 4-year cycle.
Finding Savings
I occasionally get emails from people suggesting that we should “look for savings” without offering specific areas for consideration. I know those emails come from a good place but it makes me realize how little we regularly share how often we are finding savings and efficiencies in our budget. Over the last two budget cycles, hundreds of millions of dollars have been harvested from previous programs or services to either reduce the overall tax increase or to fund other important priorities.
I’ve mentioned this a few times but do still regularly get asked about what I’ve specifically done to reduce spending and over the last two budget cycles, I’ve brought forward cost savings motions that were approved and reduced our budget by approximately $85 million over the last 8 years. Beyond the amount I specifically identified, our City Administration has also identified many areas to reduce over the years and that has helped to keep costs down. For 2021, they identified approximately $50 million in savings which allowed us to achieve the first tax freeze in 24 years.
This is usually an ongoing process which is why I was disappointed with the 2023-2026 Operating Budget. In previous years, there were many pages dedicated to the specific savings that have been found. That allowed us to share that information directly with Edmontonians so you could be confident that we were always looking at this. For this budget, there was only one specific area that outlined any of the work they did to find savings and that is unsurprisingly the Edmonton Public Library. They continue to be the gold standard in our organization in finding ways to save money and yet provide outstanding service.
I submitted a written question to get a full breakdown of the work that has been done across the organization and unlike the example for Edmonton Public Library, there was a basic list without any direct costs attached to each item or efficiencies. While I do believe that some of the actions listed in that response did help reduce costs, it’s not to the level I’m used to seeing over the previous budget cycles and I think that is why we are dealing with such a tough budget overall.
The priorities in this operating budget were not as aligned with the priorities of Edmontonians as I would have liked to see and this was another key reason I could not support the Operating Budget.
To address this going forward, I thought we needed something along the lines of a zero-based budget which would require us to build the budget from the ground up with every department starting at $0 and then having to justify every dollar being asked for. It’s not an approach one should take every year but considering the challenges before us, it was time for a new approach.
In the Mayor’s omnibus motion on the Operating Budget, he added the requirement for a comprehensive corporate review of all programs and services, equipment and infrastructure requirements, organizational structure, outcomes generated and guiding metrics, exercising hiring restraints into non-frontline vacant positions and reducing consultant use and fees, reviewing layers of accountability and internal facing services, without impacting front-line essential services with the requirement to reduce expenses each year by a minimum of $15,000,000, for a total amount of $60,000,000. This motion also included a requirement for City Administration to identify another $240 million that can be reallocated to other priorities, including core services.
There have been motions like this over my time on Council but never to this scale. I think it’s absolutely necessary to do this work but I was expecting that this would have been done as part of this year’s budget deliberations so that we could have properly funded some of those key priorities listed above. While this work is happening starting next year, it will also provide City Council with the opportunity to carefully review any planned budget changes for the remainder of the budget cycle.
One final note on finding savings, similar to previous budget cycles, I did put forward a motion to reduce consulting costs by approximately $36 million over the next 4 years. That motion was defeated but to be considered as part of the larger budget reduction motion put forward by the Mayor. While I would have preferred for this to be approved on top of the larger budget reduction motion, I will keep a close eye on those costs as part of this work.
The final part of this blog will go into more detail on the many different priority areas that were raised with me by Edmontonians.
