A $385.7 million operating budget was proposed by administration today. The budget focuses on maintaining services provided to citizens based on the current economy.
In preparing the recommended budget, administration focused on four key considerations: be sensitive to the economic conditions, focus on cost effective and efficient delivery of municipal services, commit to financial leadership and sustainability, and comply with budget guidelines set by City Council.
“The City recognizes the economy has not rebounded as quickly as we would have expected or liked. However, we still need to deliver the services our citizens expect and build a community that attracts new investment, creates positive economic conditions and contributes to a high quality of life,” said Allan Seabrooke, City Manager. “We need to plan for and ensure our community’s future through investment in essential services that we currently provide. This is reflective of Council’s Strategic Plan.”
The Operating Budget is funded through multiple revenue sources with the main ones being property taxes, user fees and sales of goods and services. In the 2020 recommended Operating Budget, property taxes cover 40 per cent of revenues and meets Council budget guidelines of not exceeding a 2.5 per cent tax increase. This increase includes one per cent towards capital investment for amenities and growth, with the remaining 1.5 per cent going towards annual operating costs.
“We understand that any amount of tax increase, especially in this time of economic austerity, is disappointing to our residents; however, with a reduction in revenue sources in other areas such as grants, there is still need for revenue to cover the costs of services our residents expect,” said Seabrooke. “Administration was challenged to find ways to be effective and efficient in developing this budget and we were able to find some corporate wide savings that have been built into this budget such as an increase in the staff vacancy factor.”
The vacancy factor applies to the natural staffing turnover in the organization. Every year administration budgets for wages; however, there are funds that go unused due to a timing gap in filling a position. Between the vacancy factor and reduced transfer to capital reserves, in the short term administration incorporated $5 million in cost savings to achieve the tax increase guideline of 2.5%.
“We did our best to reduce the tax impact on property owners through cost savings, however, the combination of inflation and reduced revenues needs to be considered when developing any budget,” said Dean Krejci, Chief Financial Officer. “What we’re proposing to Council is just a starting point, where and how much money is being allocated will shift throughout deliberations which will inevitably affect the outcome, both in the services we provide and level of tax increase.”
Budget deliberations are from January 7 to 10 and 13 starting at noon in Council Chambers. Administration will present the recommended Operating Budget by department for Council approval.
As part of the budget process, citizens have the opportunity to provide feedback to members of Council about Administration’s recommended budget from December 13 until December 27 at noon. Citizens can provide their feedback in person at the Collicutt Centre, Recreation Centre, City Hall and Red Deer Public Library (Downtown, Dawe and Timberlands Branches) or through The City’s online form.
To submit feedback online and to see the recommended 2020 Operating Budget in more detail, visit www.reddeer.ca/budget.
For more information, please contact:
City of Red Deer
Chief Financial Officer
The City of Red Deer
Communications & Strategic Planning
The City of Red Deer