Guidelines for administration to build the 2023 and 2024 budgets will be considered by Council on Monday. For the past decade, Council has set budget guidelines that consider the economy, long term vision, and immediate needs of the community. Monday’s considerations will be for the next multi-year budgets which includes both the 2023 and 2024 operating and capital budgets.
“We are asking Council to give us goal posts for us to build the 2023-2024 budgets that will be presented in November. We developed recommendations after reviewing the financial condition of the organization, economic forecasts, and Council workshop input,” said Interim City Manager Tara Lodewyk. “We are encouraged to see a positive economic shift in the province. It will take a while to realize this positive shift in our City budgets. In the meantime, these guidelines are about catching up and getting back on track after weathering the last two years by providing zero per cent municipal tax rate increases and using our reserves to keep us there.”
Municipalities have two basic levers to pull, revenues and expenses, when building the budgets. Increasing expenses due to high inflation rates, increased commodity pricing and building back reserves are challenges many sectors across the country are also dealing with.
“The guidelines set by Council enable us to find innovative ways to increase our revenues through the variety of revenue streams we have such as our several utilities, property taxes, fees, and grants,” said Lodewyk. “We need to balance this with maintaining the high level of services our citizens enjoy and value, investing in community and setting the stage for growth. We have always been competitive with our other comparable municipalities and our goal is to stay competitive. “
The City has lower non-residential taxes than comparable municipalities in Alberta, which supports business growth in the community. On the residential side, our residential taxes are very comparable to other cities throughout the province. These support the value in services that make Red Deer the great place to live, work and play.
The guidelines being recommended to Council relate to revenues and expenditures for the operating and capital budgets. The 10 guidelines being proposed 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
- Across our different City utilities explore revenue strategies to increase revenues by as much as 8.4% over two years (2023-2024).
- 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 issue
“We know seeing these proposed increases for 2023 and 2024 can be unnerving, especially coming out of a slowed economy and with other costs rising. I don’t like raising taxes but I also don’t like the alternative of continuing to hold the line. It is not sustainable or responsible and doing so will only hurt us later with large reductions in services, assets in disrepair, higher tax increases and not being prepared for any rainy days we may experience in the future.” said Lodewyk.
Council will consider the guidelines being proposed by administration during their meeting on Monday, March 28. Once guidelines are approved, administration will then build the 2023 and 2024 operating and capital budgets, as well as operating and capital plans which will be brought back to Council for consideration in November. To view the full Council report, visit https://meeting.reddeer.ca.
**with information provided by The City of Red Deer