Edmonton City Council building consensus on ways to hold down tax increase

Three different ways to reduce the proposed 3.3 per cent property tax increase for 2019 emerged on Monday as Edmonton City Council began debate on its first-ever four-year operating and capital budgets.

The biggest proposal that was talked about, was taking $7.6 million out of the budget in each of the next four years that otherwise would have been spent on enforcement of the rules surrounding cannabis. That would mean 27 less positions, both with Edmonton police and with city bylaw staff.

The emerging feeling among city councillors is that there aren’t as many problems with legalized pot as earlier feared, Councillor Ben Henderson told reporters.

Councillor Andrew Knack agreed.

“It feels counter-intuitive to approve the money first without really fully experiencing the impact.”

He said it’s likely council will wait until the supplemental spring budget next year, and if problems emerge, add the $7 million then before the mill rate — which sets your property taxes — is firmed up.

Watch: As Edmonton councillors hear from residents, community groups and business leaders while discussing the budget, there are questions about cannabis enforcement spending. Vinesh Pratap explains.

1:31 Edmonton city hall hears questions about cannabis enforcement

The city has $5 million more to work with because the dividend from Epcor increased to $171 million. Stuart Lee, the company’s president and CEO, said in the last three years it has climbed from $141 million.

The dividend jumped by $20 million when Epcor took over the drainage branch. The $5-million increase can reduce the proposed property tax hike from 3.3 per cent, to three per cent even.

Mayor Don Iveson also formally tabled his amendment to the capital budget that would change how the new back alley program would be paid for. Instead of a 0.3 per cent tax hike, it would be split so all property owners would instead pay into a fund at 0.15 per cent, with the other half of the money coming from a local improvement levy.

The idea would be to treat back alley upgrades similar to other improvements, the mayor said.

“The cost will still be there, but it’ll be paid for through a local improvement on your tax roll,” Iveson said. “Same as the sidewalks when neighbourhood renewal comes to your neighbourhood. I think that’s a fairer way to do it.”

Combining less cannabis enforcement, a larger Epcor dividend and changing the back alley program should bring the tax increase to below three per cent.

City manager Linda Cochrane opened the debate on the operational budget, criticizing a report requested from Knack. He had asked what kind of program changes would be needed to reduce the tax hike anywhere from one to four per cent.

“There is no way to realize these kinds of savings without a change in what we offer and how we offer it,” Cochrane told council in her prepared remarks. “Our response to this motion was completed in a very short time frame and needs much work to verify both practicality and costing.”

Earlier drafts of these two budgets saw the tax increase well above 3.3 per cent. It was whittled down last month.

Cochrane said city staff already cut $21 million from the budget, including 47 jobs. The value of the two extremes in Knack’s request ranged from $61 million in cuts in the one per cent scenario to roughly $185 million at the full four per cent.

But there are also council initiatives still to come. CFO Todd Burge said if all are approved, it would add 2.9 per cent to the tax increase, driving it closer to six per cent. Included in that is $3.5 million for an affordable housing plan that council usually supports with surplus money that would now be built in, based on approving a plan this fall that would see housing in all parts of the city.

Monday’s meeting began with councillors tabling amendments to the capital budget. Big-ticket items, like the Lewis Farms rec centre, and upgrades to Terwillegar Drive, were added. That prompted Councillor Mike Nickel to ask how much it would add to the tax increase to pay for everything that council wants to add.

Burge said at the current borrowing rate, it would cost the city $7 million a year for every $100 million borrowed. That’s $42 million a year on the $600 million the city may potentially borrow.

City council has set aside this week and next to finalize the budget for the next four years, and will revisit the spending plan every six months for emerging issues.

Other council initiatives include programs to deal with climate change.