Property taxes, user fees and charges, operating and capital reserves and utility rates were all discussed during the budget guidelines item at Council today. In the end, Council approved nine guidelines for administration to use while building the next round of multi-year budgets.
“Going into today’s discussion, we anticipated seeing recommended increases throughout the different revenue streams that fund our budgets. We also knew that those increases are reflective of the increase in costs of doing business over the past several years,” said Mayor Ken Johnston. “We were able to hold the line on some increases to minimize the financial impact to residents over the past two years but moving forward we have to be more deliberate in balancing costs and funding sources while investing in the future of our community.”
Administration developed the recommendations after reviewing the financial condition of the organization, economic forecasts, and Council workshop input. The nine budget guidelines approved by Council are:
- Property tax increase of 4.7% in 2023, and 4.3% in 2024.
- Capital amenities and growth contribution of 1% for 2023 and 2024.
- User fees and charges to be reviewed and implemented in 2023 in compliance with Council policy.
- One time funding in 2023 and 2024 of $750,000 per year to support Council’s Strategic Plan implementation.
- Explore utilities revenue, and what would be required to achieve a utility dividend of $3 million in 2023 and 2024
- Increase reserve levels
- Change the Capital Contingency Policy to allow the City Manager to address new projects from a maximum of $50,000 per project and $200,000 a year.
- Bring forward an operating contingency policy, like the Capital Contingency Policy.
- Bring forward a tax supported operating reserve policy for emergent and urgent issues.
Over the past two years, The City was able to maintain a zero per cent increase in municipal property tax revenue, however, the next multi-year budgets will require an increase in property tax and utility revenues.
“When developing the budget guidelines, we had to be realistic in our approach, although there is a positive shift in our economic forecast, it will take several years to see that reflected in our own budgets. Over the past two years, along with maintaining a zero per cent tax increase, we have pulled from reserves and reduced expenditures associated with our service delivery, these are not long-term, feasible options moving forward,” said Interim City Manager Tara Lodewyk. “We are going to build budgets that maintain our service delivery and our assets, respond to community growth, while replenishing our reserves that have taken a hit the last couple of years.”
The guidelines allow administration to recommend increases to the revenues that The City has control over (taxes, utilities, user fees and charges) to balance the expenditures required to maintain services and set the foundation for continued community success.
“We pride ourselves on providing excellent municipal services that Red Deerians have come to enjoy and expect, and we will continue to do this,” said Lodewyk. “We continue to find efficiencies and innovative ways in what we do. This is more important than ever with the increase in costs of doing business. Our promise to Council and the community is that when we are developing the draft budgets for the next two years, we will focus on providing that same high quality of service in the most fiscally responsible manner possible. Red Deer has maintained a lower-than-average level of overall property taxes than comparable cities in the province, which is something we’ll also continue to aim for.”
Administration will develop the draft multi-year budgets in the coming months using the approved guidelines. In November, Council will have the opportunity to review and approve the 2023-2024 Operating and Capital Budgets, as well as the Operating and Capital Plans.
Please see FAQ - Council sets multi-year budget guidelines for 2023 and 2024 (pdf) for more information about the budget guidelines approved today.
For more information, please contact:
The City of Red Deer