Service cuts, unrealistic cuts for the 2023 budget: municipal administration

The city’s chief administrative officer said the scale of service level changes would be “infinitely complex” and would take money and time to determine the impacts.

The City of St. Albert needs an additional year to find areas for reductions and reduced service levels, the city’s chief executive said.

The city is currently looking for ways to reduce an 8.2% increase in taxes scheduled for 2023, which means the city will have to find $6.3 million in savings to bring the increase down to 3%, or l top end, $4 million for a five percent tax increase.

Diane McMordie, the city’s chief financial officer, said in an email that the city’s 2023 operating budget is still being finalized and that the detailed operating budget will be presented as part of the proposed final budget in October.

To calculate the 2023 fiscal levy forecast, $127 million was used as a base, which represents an 8.2% increase over spending in 2022. The $127 million figure was calculated by taking the total expense budget required to provide board-approved services. and service levels, and subtracting expected non-tax revenue (eg recreation fees, fines, etc.). McMordie noted that the tax levy calculations differ from the operating budget.

Council discussed ways to reduce the tax levy at an Aug. 16 meeting, where options offered by the administration included using money from the city’s stabilization reserve; increase the electricity franchise fee; reduce or eliminate community subsidies; and the reduction or elimination of the 2023 repair, maintenance and replacement (RMR) tax, which automatically adds a 1.5% annual tax increase.

Service cuts and staff reductions are not currently on the table for 2023.

Bill Fletcher, St. Albert’s Chief Administrative Officer (CAO), said in an interview that the main reason the reductions aren’t on the table for 2023 is the complexity of the work required to achieve them.

“It’s easy to change service levels, but very difficult to fundamentally change or undo [them]“, said Fletcher.

He gave the example of a changed level of service resulting from a 2022 budget motion to increase the frequency of grass cutting from every 10 working days to every 12 for savings of 39,000 $.

“The amount of angst that caused among a good portion of the community makes you wonder if it was worth the money that was ultimately saved,” Fletcher said.

With the level of cuts the city faces to reduce the tax increase expected to be in the millions, Fletcher said there are even bigger decisions to be made, with even bigger ramifications.

This scale of service level changes would be “infinitely complex” and would take time and money to determine the impacts, Fletcher said.

In an email, city spokesperson Cory Sinclair said that once council understands which services the city needs to review, they will also assess whether an internal review can be conducted to determine a recommendation to council, or if a consultant will be needed.

Asked why the city hasn’t turned to staff reductions like other organizations have had to due to financial difficulties, Fletcher said the city’s staff hasn’t increased proportionately to St. Albert’s growth over the past five to eight years, which he says could be argued is “a de facto break in time.”

“We can always find better ways to do business,” Fletcher said. “Be we’re lean, and…the product that’s made by city staff trumps, quite frankly, the staffing levels that we’re currently sitting at.”

Moreover, reducing staff ultimately means reducing service levels. Finding areas of service level reduction through additional discussions with council and an assessment will be the main way for the city to ultimately find ways to reduce costs, Fletcher said, a process that will lead to staffing considerations.

McMordie has noted over the past two years that service level reductions offered by the administration were often not accepted by the board at budget time.

“What we learned from that is that we need to engage the board early and often,” McMordie said. “At the end of the day, they are the ones who hold the service levels and they are the ones who ultimately have to deal with the residents’ shortfall.

“That’s why we’re taking a much more holistic and inclusive approach to addressing this issue going forward.”

Servus Square

At the August 16 council committee meeting, when some council members expressed their aversion to the cuts to small community grants, Mayor Cathy Heron said the council needed to “find some money” to make up for the loss. increase in taxes.

Com. Sheena Hughes said in response that the questions on the table were about “nothing about the internal operations” of the city.

“That’s why we’re talking about peanuts here,” Hughes said. “Most of the money doesn’t come from here, it’s internal.”

Hughes raised questions about a $2 million operating deficit at Servus Credit Union Place.

“A $2 million deficit is an unacceptable number to me,” Hughes said, suggesting Servus Place’s budget should be cut with instructions to operate differently.

In an email, Sinclair said the net financial impact of Servus Place is $2.5 million, taking into account $6.7 million in revenue and $9.2 million in expenses.

Diane Enger, director of recreation facilities for the town, said the council’s considerations for Servus Place’s budget are complicated because a portion of Servus Place’s operating cost is covered by revenue.

“Every time you cut something in that building, it could impact revenue, which then could impact cost recovery,” Enger said. “It’s a delicate balance that has to be considered as a whole.”

Cost recovery for Servus Place in 2022 is budgeted at 72%, a decrease of 13% from cost recovery for 2019 of 85%, Sinclair said in the email.

“The cost recovery rate is aligned with typical costs for a multi-component recreation center and aligns with regional counterparts,” Sinclair said in the email. “Municipalities invest in recreational facilities to contribute to the social and physical health of residents.”

Sinclair said it’s also important to consider the impact of the pandemic and resulting closures on recreation facilities.

“We are gradually recovering from the effects of the pandemic and seeing growth in most areas; however, membership numbers are a bit slower to recover to pre-pandemic levels,” Sinclair said. “Similar challenges are also faced by recreational facilities in the region.

“The administration is currently reviewing the fees and embarking on a membership campaign in accordance with plans to restore the facilities.”

McMordie told the board it was unrealistic to determine the facility’s deficit for the 2023 budget.

“Maybe it’s something that’s potentially put on the list for discussion,” McMordie said.

Details of how the city’s approach to service reductions will play out going forward are still being worked out by the administration, McMordie said. The Gazette.

“We need to understand from the board what level and type of public engagement we want to do,” McMordie said. “Is this something the council wants to fight on its own, or how do we engage the public in terms of the services and service levels we are reviewing?”

Ultimately, she says, the city doesn’t have the capacity to look at everything, so every area they look at will need to see some council or community support before the city invests its resources.

Fletcher said while service cuts are a key part of how the city will reduce future tax increases in the coming years, increasing economic development and business investment in St. Albert are also methods. keys that the city pursues in the long term.

“This is a major area of ​​focus for St. Albert – increasing the non-residential tax base and looking at other sources of revenue that will mitigate over the long term, without having to make the really tough choices that are in front of us in this moment,” Fletcher said.

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